Tuesday, April 3, 2007

Taxicab Redemption?

Yesterday, in Ambrosia Coal v. Morales, the Eleventh Circuit held that a subsidiary's assignment of a claim to its parent does not give rise to a presumption of collusion under section 1359, at least where the assignee has "business purposes beyond the litigation of the assigned claims and is the real party in interest."

The opinion is worth mentioning here based on the importance of the holding, but it caught my attention for an entirely different reason.  To support the notion that the motives of a transfer are irrelevant in determining whether an assignment is collusive, the Eleventh Circuit cites the Supreme Court's opinion in Black & White Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer Co.--the case you probably cover between Swift and Erie in your Civil Procedure class. 

This citation struck me as extremely odd because, in Erie, I see the Supreme Court saying "mea culpa" for Swift, and the Court uses the Taxicab case to illustrate the extent of its culpa.  The Taxicab case certainly does (or at least did) support the proposition for which the Eleventh Circuit cites it, but using the Taxicab case in such a way, to me, is like writing an opinion with a skeleton from the Supreme Court's closet.  --Counseller

http://lawprofessors.typepad.com/civpro/2007/04/taxicab_redempt.html

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