Civil Procedure Prof Blog

Rule 60(b) and bad lawyering

When must a district court grant a Rule 60(b) motion to vacate a default judgment due to bad lawyering? Essentially never, says the Seventh Circuit.  Because of the principal-agent nature of the lawyer-client relationship, which attributes the lawyer's conduct to the client, even gross omissions don't constitute exceptional circumstances.  Click the link to download Bakery Machinery & Fabricattion, Inc. v. Traditional Baking, Inc: Download BMF

--RR

The Past, Present, and Future of Trans-Substantivity in Federal Civil Procedure

Prof. David Marcus recently posted an interesting piece on SSRN,  The Past, Present, and Future of Trans-Substantivity in Federal Civil Procedure.  Click the title to download it.  The abstract follows:

The trans-substantivity principle – the same procedural rules should apply regardless of the substance of the case – has been a central feature of modern federal civil procedure since its beginnings in 1938. In recent years, however, a number of scholars have questioned whether the principle should continue to govern procedural rulemaking. Mirroring this scholarly disquiet, legislatures have crafted substance-specific rules to apply in heavily-litigated areas of substantive doctrine. The future of trans-substantivity is uncertain. In this symposium contribution, I use the history of the rise of trans-substantivity in American civil procedure as a basis to predict its role going forward. This history, beginning in the early nineteenth century and culminating in 1938, illuminates the jurisprudential foundation for trans-substantivity, its normative implications, and the political role it played in assisting the development of court-supervised rulemaking. I then assess the current status of trans-substantivity. Recent legislative developments call the jurisprudential and normative bases for trans-substantivity into question, but court-supervised rulemakers continue to limit themselves to trans-substantive rules. Guided by this pattern of institutional behavior, I argue that the principle, however theoretically suspect, has a role going forward as a mechanism for the allocation of rulemaking power. Court-supervised rulemakers can strengthen their legitimacy if they limit themselves to trans-substantive rules, while substance-specific departures from the principle should come from legislatures.

--RR

Two Interesting Links:

Two thought-provoking links for the day:

• Over at his blog, Adamsdrafting, Ken Adams has an interesting post about the admissibility of expert testimony in the context of ambiguous contract terms.  Whether a contract is ambiguous is a legal question. Does that mean that, without regard to context, expert testimony is never admissible to help a generalist judge determine whether the words are reasonably susceptible to multiple interpretations?

• Over at Drug and Device Law, a "spirited off-line discussion" (of which I was a part) generated an interesting post regarding ethics in the adversarial system.  In short, we all know that sometimes in advocacy we win a point we should lose because our adversary defaults and somehow forfeits the point that she should have won.  What are the ethical implications of taking obviously-wrong-if-but-only-if--objected-to positions? Is there a difference between, say, introducing hearsay and removing a case late?  Click here to join the discussion.

Junior Federal Courts Conference at Michigan State

Click the link to view an updated flyer for the Federal Courts Conference at Michigan State this fall.  Prof. Lou Mulligan is the contact person, and you can find his information in the flyer.  Download Federal Courts Conference Flyer1

Cert. Granted

Yesterday, the Supreme Court granted certiorari on the following issue:  For purposes of determining principal place of business for diversity jurisdiction citizenship under 28 U.S.C. § 1332, can court disregard location of nationwide corporation's headquarters--i.e., its nerve center?  The case is Hertz. Corp. v. Friend from the 9th Circuit, 297 Fed. Appx. 690.   --RR

Hat tip to Ben Spencer.

Case of Interest -- Reed Elsevier v. Muchnick

Readers may be interested in a case currently pending before the Supreme Court called Reed Elsevier v. Muchnick.  It’s a copyright case, but it raises neat civil procedure issues.

The case is a class action on behalf of authors who contributed works to print periodicals, which then entered into agreements to publish the authors’ works in electronic databases.  The class sued the print publishers and electronic databases, claiming that the authors had not consented to reproduction in electronic publication.  All parties entered into a settlement agreement that, in grossly simplified form, would provide monetary compensation in exchange for electronic publication.

The settlement purports to cover works that were timely registered with the Copyright Office (and thus entitled to statutory damages), those that were untimely registered, and those that were never registered.  Objectors, led by Irvin Muchnick, a freelance writer covered by the class definition, argued that the settlement was unfair to authors of unregistered works and that the class representation was inadequate.  The district court certified the class and approved the settlement over the objections.  Muchnick and other objectors appealed.

And here is where the mundane copyright issues become subordinate to the sexy civil procedure issues.  The Second Circuit, acting sua sponte, ordered briefing on whether the district court ever had subject-matter jurisdiction over the claims based on unregistered copyrights.  Why?  Well, 17 U.S.C. § 411(a) provides: “No action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made.”  All parties, including objectors, argued that § 411(a) was nonjurisdictional and that its requirement had been waived.  Nevertheless, a divided panel held that § 411(a) deprived the district court of subject-matter jurisdiction over unregistered works.  The panel also held that the supplemental jurisdiction statute, 28 U.S.C. § 1367(a), does not permit supplemental jurisdiction over unregistered copyright claims even when joined with properly registered copyright claims.

The Supreme Court granted certiorari to review whether § 411(a) is jurisdictional and, because all parties challenged the Second Circuit’s holding, appointed an amica curiae (Ohio State’s Deborah Jones Merritt) to argue in support of the judgment.

The write-up on the case and all of the merits briefs challenging the judgment are here.  Note that the amica’s brief has not yet been filed.

The case presents, in a nutshell, two jurisdictional questions that are prime fodder for civil proceduralists.  First, does § 411(a) restrict the subject-matter jurisdiction of the federal courts—at least such that a district court cannot approve of a class action settlement resolving purported copyright claims for unregistered works?  Second, if so, does the supplemental jurisdiction statute nevertheless allow the exercise of jurisdiction when unregistered copyright claims are joined with claims over which the district court does have independent subject-matter jurisdiction under § 411(a)?

The first implicates the mess that is jurisdiction, on which the Court has been fairly active in recent years, deciding cases such as Kontrick v. Ryan, Eberhart v. U.S., Scarborough v. Principi, Arbaugh v. Y&H Corp., Bowles v. Russell, and John R. Sand v. U.S.  As I have written (somewhat extensively—see my papers here, here, here, here, and here, and my blog posts here and here), the Court’s pronouncements have failed to provide a clear framework for resolving jurisdictional characterization issues.  My latest piece, entitled “Mandatory Rules” and published in Stanford Law Review last year, argues that some limitations could be formally nonjurisdictional but yet have jurisdictional functionalities, such as being immune to waiver.  (That piece, along with another, was cited by the petitioners’ merits brief, though not for that proposition.)

The second implicates the extent to which the supplemental jurisdiction statute extends jurisdiction to claims that do not otherwise exist under state law.  Thus, the question is somewhat different than that presented in Exxon Mobile v. Allapattah Services, in which the Court held that the supplemental jurisdiction statute extends jurisdiction to state claims that did not meet the amount-in-controversy requirement for diversity jurisdiction.  The issue also implicates the meaning of § 1367(a)’s “except as otherwise expressly provided” language that might exempt a claim from supplemental jurisdiction.

-- Scott Dodson

Against Twombly & Iqbal -- A Reply to Drug & Device Law Post

Rory and Jeremy have invited responses to the formidable and polite defense of Twombly and Iqbal posted by the folks at the Drug & Device Law blog.  I’m not shy—I’ll give it a shot.

Let me first note a couple of areas of agreement that I have with DDL’s defense.  I agree that the decisions are attempts to be “practical and common-sense.”  Reasonable people can disagree about the proper pleading standard, and I do not think that the standards of Twombly and Iqbal are unreasonable.  To borrow from AEDPA, I think they are wrong, but I do not think they are unreasonable.  I think DDL is right that they are borne of practicality, of a perceived need to reduce discovery pressures.

I also agree that discovery has significant problems.  DDL is right that discovery costs can be unduly high and abusive (although I’d suggest that it’s not always the plaintiff that “weaponizes” discovery and not always the defendant that bears the costs), and that there may be room for reforms to the rules to alleviate those burdens.

I might also agree (though I’d want to bone up on my tort law knowledge first) that the allegation that “the defendant violated FDA regulations” without stating the regulation that was violated or what the defendant did should be inadequate under Rule 8.  The same might be said for a complaint that simply alleges “defective design.”  But I doubt that such allegations would have survived even pre-Twombly because they fail to give proper notice to the defendant.

Finally, I agree that there are two sides to the coin.  We should worry about imposing difficult pleading burdens on plaintiffs.  But DDL is right that we should worry too about frivolous lawsuits that impose significant costs on defendants.  The question, of course, is how to do both.

Having exchanged pleasantries, though, let me now engage our disagreements.  There are several, but I'll highlight two of the most fundamental.

First, I disagree that “[t]he only way to avoid discovery . . . is to win a motion to dismiss.”  Justice Stevens, I think, does a nice job in his Twombly dissent explaining how a district court has ample authority to structure and limit discovery to avoid undue burdens while still allowing the plaintiff access to the crucial information she needs.  DDL quotes extensively from the Twombly majority opinion, which in turn quotes from a Just Easterbrook article on discovery abuse written in 1989, arguing that district court control of discovery costs is largely ineffective.  But that has not always been the case in my own experience defending large corporations against lawsuits.  And it certainly does not ring true in theory, particularly after the amendments to the Federal Rules made after 1989 that limit discovery and give more supervisory control to the judge.  I see no reason why (and my anecdotal experience suggests the contrary) judges/magistrates cannot effectively measure the costs and benefits to the requester and the burdens to the defendant.  (Isn’t that what Rule 26 requires anyway?)  And, even if only a rough estimation is possibly, the district court has the authority to narrow the discovery scope, to allow limited discovery at first as a “test” production, and to order cost-shifting where appropriate to alleviate the defendant’s burden.  In short, the idea that discovery costs are always a problem that cannot be addressed within the confines of the existing discovery rules is misplaced.

The discovery rules may still not be up to the task of controlling undue costs in some cases, but that suggests that we ought to consider how to fix the problem by reforming discovery rather than by resort to raising the pleadings bar.  After all, the discovery costs and burdens apply (and may apply unfairly) even when the claim has merit.  So, I think that if folks have problems with discovery, the discussion ought to properly focus (at least initially) on discovery changes, not pleadings changes.

But even if reforms to alleviate discovery burdens must go beyond the discovery rules, it’s not clear to me that they must focus on Rule 8 pleading.  Other options might include tinkering with Rule 12(e), Rule 11, or fee-shifting rules.  I’m not necessarily advocating these options—I just mean to say that I’m not convinced that raising Rule 8 pleading standards best achieves the amelioration of discovery costs that DDL seeks.  If discovery costs are really the elephant in the room, then let’s deal with the elephant.

Second, DDL does not appreciate fully the downside to raising the pleading standards.  The failure to plead a plausible claim is not necessarily an indication that the claim lacks merit.  Nevertheless, Twombly, at least, appears to proceed on that premise, calling the complaint at issue there “largely groundless,” having no “reasonably founded hope” of revealing supporting evidence in discovery.  And DDL appears to assume that as well, calling the “hallmark of a meritorious case is that it’s factually supported from the get go.”  In some cases, that might be true.  But it is not always true, particularly in the kinds of cases where the plausibility standard is likely to be invoked the most—discrimination and conspiracy cases.  In those cases, the information often necessary to meet the plausibility standard is largely in the hands of the defendants.  The problem is one, as Randy Picker described it, of information asymmetry.  The point is that, in many cases, just because the plaintiff doesn’t have a fact in her possession doesn’t mean it didn’t happen.  And, as a result, erroneously equating the failure to plead plausibility with meritlessness will result in fewer meritorious cases filed, fewer meritorious cases surviving to discovery, and fewer injuries resulting from wrongful conduct being redressed.  Neither the Court nor DDL comes to terms with this unjust result.

--Scott Dodson

 

UPDATE: I now see that Howard Wasserman also has a response up on Prawfslaws here.

Reviewing Remand Orders

Justice Scalia once asked a brilliant question: "How can that be? How can a statute explicitly eliminating appellate jurisdiction to review a remand order not 'control' whether an appellate court has jurisdiction to review a remand order?"  His question reflects the confused state of the law regarding the reviewability of remand orders, which is the topic of Drug and Device Law today. --RR

The other side of the Twombly/Iqbal coin:

A few days ago, the folks at Drug and Device Law noted the Iqbal decision and the unanimous condemnation of the decision among academic bloggers. Beck and Herrmann promised to present the other side of the argument, and today they have done just that. Forcefully.  Academics, attack! --RR

Beyond Twombly (by Prof. Scott Dodson)

Today, the Supreme Court decided Ashcroft v. Iqbal, a case that continues the recent evolution of pleading standards under Rule 8  mostly begun by a case from two years ago, Bell Atlantic v. Twombly.  As I have written previously here, here, here, here, and here, Twombly affirmed, for the first time, lower court attempts to impose something more than mere notice pleading to a claim governed by Rule 8.  The Supreme Court’s opinion in Twombly was not a model of clarity, however, with Courts of Appeals taking divergent views of the proper pleading standard in its wake.

We at least can applaud Iqbal for clarifying matters.  Twombly’s “plausibility” standard is clearly now a uniform Rule 8 standard, not a standard borne of antitrust law or reserved for certain claims, as some had argued.  And, it is clear that, as I argue in this article forthcoming in the University of Pennsylvania Law Review, the plausibility standard is a “factual sufficiency” standard that depends upon the factual detail and content alleged. 

But, in my view, reaffirming Rule 8’s transsubstantivity with the restrictive pleadings standard of Twombly continues to move pleadings in the wrong direction.  There may be good reasons to depart from transsubstantivity to accommodate the challenges and complexities of particular types of claims.  (For more, see Professor Burbank’s thoughts in this recent article.)  There may also be good reasons to adhere to a liberal pleading standard applied transsubstantively.  (For more, see Professor Spencer’s thoughts in this recent article.)  But applying a restrictive pleading standard transsubstantively will surely result in fewer meritorious cases filed, more meritorious cases dismissed, and less unlawful conduct redressed, particularly for cases in which a less restrictive standard could achieve a better balance between efficiency and justice.  

In addition, Iqbal reintroduces distinctions between conclusions of law, ultimate facts, and evidentiary facts that Rule 8 was designed to obliterate.  The Court casts the distinction between ultimate facts and evidentiary facts in different terminology, namely “conclusory” and “nonconclusory” (or, perhaps, “well-pleaded”), but the inadequacy remains.  As Justice Souter points out in dissent, the distinction between “conclusory” and “nonconclusory” factual allegations is difficult at best and may be fallacious.  

Iqbal may be most remarkable for what it did not say.  It did not cite to Erickson v. Pardus, a per curiam decision issued two weeks after Twombly that many (though not I ) thought might temper Twombly’s reach.  It did not cite to Swierkiewicz v. Sorema N.A, a discrimination case that may now be effectively overruled.  It did not explain how Form 11’s assertion of “negligently drove” is both nonconclusory and plausible.  And it made no mention of notice.  I think it is fair to say that we have entered a new era in pleadings.  Notice is now an aside, probably insignificant in most cases.  Instead, pleadings litigation will focus on factual sufficiency.  As I think the Court made clear, that inquiry will turn on whether each factual allegation is “conclusory” or not and whether all of the nonconclusory allegations state a claim that is “plausible.”

 -          Scott Dodson

Iqbal decided

Today the Supreme Court released its decision in Ashcroft v. Iqbal.   Section IV of the opinion has much to say about Twombly and notice plausibility pleading.  --RR

2 USSCT Decisions

Today, the Supreme Court decided Carlsbad Technology, Inc. v. HIF Bio, Inc., a case whose Certworthiness was apparent even back in November of 2007.  Our readers will also be interested in today's Arthur Andersen, LLP v. Carlisle decision, which involves whether appellate courts have jurisdiction to review denials of stays required by litigants who were not parties to the arbitration agreement.  Visit SCOTUSBLOG for more information on these cases.  We'll likely have commentary on one or both decisions soon. --RR.

Staying Execution of a Mandate

Our own 10th Court of Appeals in Waco decided an interesting procedural case yesterday.  Chief Justice Gray's introduction cleanly states the issue:

In a prior proceeding, we were asked to decide certain issues. We did. We issued an opinion. In that opinion we decided only the specific issues presented to us by the parties then before us. We issued a judgment. Review was sought but denied. We issued our mandate.

The trial court has now allowed a new party to intervene in the proceeding in the lower court. The trial court has abated the proceeding until more parties are added to the proceeding in the lower court. The trial court has stayed the execution of the judgment.

We are now asked to compel the trial court to set aside these orders and enforce our mandate.

The court correctly determines that the trial court abused its discretion and conditionally issued the writ of mandamus.  Click here to download the full opinion.  -RR

Junior Faculty Federal Courts Workshop

THE SECOND ANNUAL

JUNIOR FACULTY FEDERAL COURTS WORKSHOP

 

October 22-23, 2009

 

The Michigan State University College of Law is pleased to announce that the Second Annual Junior Faculty Federal Courts Workshop will take place on its campus October 22–23, 2009. The inaugural workshop, held in April 2008 at the American University Washington College of Law, was a resounding success attended by junior scholars from 30 law schools, resulting in publications in numerous preeminent journals. We aim to continue this tradition.  

 

The workshop pairs junior and senior, federal-courts scholars in a day-long, works-in-progress workshop. Senior scholars who have confirmed their attendance for this year’s workshop are Susan Bandes (DePaul University School of Law), Martha Field (Harvard Law School), Martin Redish (Northwestern University School of Law), and David Shapiro (Harvard Law School).

 

Workshop Agenda

 

Drafts of papers will be distributed to participants prior to the workshop, which begins with dinner on Thursday, October 22. On Friday, October 23, following breakfast, two panels of junior scholars, composed of three to four persons each, will present papers in the morning.  After lunch, two panels of junior scholars will present papers in the afternoon.  Each panel will be assigned a senior scholar who will provide commentary on the paper and lead the group discussion.  

 

Invitees

 

The workshop is open to non-tenured, or newly tenured, academics who teach Federal Courts (or an equivalent course) or whose scholarly agenda encompasses topics ordinarily associated with such a course.  Those who do not currently hold a faculty appointment but expect that they will during the 2010-2011 academic year are also welcome.  There is no registration fee for this conference.

 

RSVP

 

Those who plan to attend the workshop are asked to RSVP by July 31, 2009 to Sally Rice at Michigan State University College of Law (events@law.msu.edu). Please indicate whether you will attend the dinner on October 22.

 

Persons wishing to present a paper are asked to e-mail an abstract by June 29, 2009 to Lou Mulligan (mulligan@law.msu.edu).  A committee of past participants will select papers no later than July 3, 2009.

 

Michigan State College of Law is pleased to provide all participants with meals while attending the workshop and has secured a block of rooms at a discounted rate.

--RR

FRCP Amendments

Prof. Ben Spencer reports here on recent Federal Rules amendments approved by the Supreme Court.   You can also click here for more information on the U.S. Courts page. --RR

Pleading and the Dilemmas of "General Rules"

Click the article title to download Pleading and the Dilemmas of General Rules, by Prof. Stephen B. Burbank.  The article will appear in the Wisconsin Law Review.  The abstract follows:

This article comments on Professor Geoffrey Miller's article about pleading under Tellabs and goes on (1) to use Tellabs, Bell Atlantic Corp. v Twombly, and Iqbal v. Hasty (in which the Court has granted review) to illustrate the limits of, and costs created by, certain foundational assumptions and operating principles that are associated with the Rules Enabling Act's requirement of general rules, and (2) more generally, to illustrate the costs of the complex procedural system that we have created. Thus, for instance, the argument that the standards emerging from Twombly should be confined to antitrust conspiracy cases confronts the foundational assumptions that the Federal Rules are trans-substantive and that they cannot be amended by judicial interpretation. Similarly, in Iqbal, the Government presumably denies that it is calling for the imposition of a heightened fact pleading requirement in cases involving high government officials entitled to an immunity defense because the Court seems to have made it impossible for the judiciary openly to impose such a requirement other than through The Enabling Act Process. The Court may, however, take a different view of the appropriate contextual plausibility judgment than did the lower court in Iqbal. If so, however, the Court would thereby confirm the view that Twombly is an invitation to the lower courts to make ad hoc decisions reflecting buried policy choices. I therefore argue that, if the Court is persuaded that the changes already made to pleading jurisprudence are insufficient to accommodate the needs of the immunity defense, it should forthrightly require fact pleading as a matter of substantive federal common law.

--RR

Alternative MDL-management Method

Click the article's title to download The Quasi-Class Action Method of Managing Multi-District Litigations:  Problems and a Proposal, authored by Profs. Charles Silver and Geoffrey Miller.  The abstract follows:

This article uses three recent multi-district litigations (MDLs) that produced massive settlements -- Guidant ($240 million), Vioxx ($4.85 billion), and Zyprexa ($700 million) -- to study the emerging quasi-class action approach to MDL management. The approach has four components: (1) judicial selection of lead attorneys; (2) judicial control of lead attorneys' compensation; (3) forced fee transfers from non-lead lawyers to cover lead attorneys' fees; and (4) judicial reduction of non-lead lawyers' fees to save claimants money. These widely used procedures have serious downsides. They make lawyers financially dependent on judges and, therefore, loyal to judges rather than clients. They compromise judges' independence by involving them heavily on the plaintiffs' side and making them responsible for plaintiffs' success. They allocate monies in ways that likely over-compensate some attorneys and under-pay others, with predictable impacts on service levels. They also lack needed grounding in substantive law because the common fund doctrine, which supports fee awards in class actions, does not apply in MDLs. Academics have not previously noted these shortcomings; this is the first scholarly assessment of the quasi-class action approach.

This article also proposes an alternative method of MDL management. It recommends the creation a plaintiffs' management committee (PMC) composed of the attorney or attorney-group with the most valuable client inventory, as determined objectively by the trial judge. The PMC, which would have a large interest in the success of an MDL, would then select and retain other lawyers to perform common benefit work (CBW) for all claimants and monitor the lawyers' performance. The new approach would thus use micro-incentives to organize the production of CBW in MDLs rather than judicial control and oversight. The court would stand back from the process, exercising only a limited backup authority to prevent abuses. If enacted as a statute, the proposal would restore judges' independence, preserve lawyers' loyalties, provide the requisite legal foundation for fee awards, and encourage the fairer, more efficient, and more appropriate representation of claimants in MDLs.

--RR

Erie Meets the First Amendment

Howard Wasserman just posted an interesting question over at PrawfsBlawg: 

So here is a nice Erie question: In a diversity action, must a federal court apply the state-law standard for when a plaintiff can subpoena the identity of an anonymous poster or can it utilize a different federal standard?

The rest of the post describes the context for his question.  To read it, click here. --RR

Supreme Court decides Vaden

SCOTUS Blog reports that the Supreme Court "ruled that a firm seeking to compel arbitration of a dispute may take the case to a federal District Court only if the underlying controversy could have been litigated in federal court.  A federal court has no jurisdiction, Justice Ginsburg wrote for the Court, to order arbitration of “a slice of a controversy when the controversy as a whole” would be beyond its reach."  I'll post a link to the opinion soon:  Click here to download the opinion.

The case is Vaden v. Discover Bank.  If the oral argument is any indication, the opinion will be interesting indeed.  ---RR

Courtoons

Absolutely hilarious.  --RR