Thursday, August 9, 2007

A few links

A few items of recent note:

  • The Fourth Circuit recently issued a decision applying the relitigation exception to the Anti-Injunction Act in Bryan v. Bellsouth Communications, Inc.  Bryan follows the same two-bites-at-the-apple approach I noted in an earlier post, and is subject to the same criticisms.  although in a reversed-remand scenario that raised different comity concerns.

  • Having passed the most significant legislative reform of complex litigation in American history, advocates of the Class Action Fairness Act have now set their sights on more technical battles of statutory interpretation and application. One of the most important post-enactment questions with regard to CAFA concerns the burden of jurisdictional proof. In the broadest sense, the issue is who bears the burden of proving the existence (or nonexistence) of the federal district court's subject matter jurisdiction under the new statute. Traditionally, the party who desires to maintain the suit in federal court always has had the obligation of demonstrating the court's authority to hear the case. Shifting the burden so that the other side (which, as a practical matter, means shifting the burden to the plaintiff, since a challenge to the federal court's authority occurs most often after the defendant has removed the case from state court and the plaintiff has asked that it be moved back) to prove that federal jurisdiction is lacking constitutes a sea-change of enormous proportions. Yet, this is exactly what the vast majority of courts—and every circuit court to consider the question—has found Congress intended. In this paper, I describe (in Part I) how a statute that is entirely silent on the question of jurisdictional proof under CAFA has come to spawn two different burden of proof debates, producing, most remarkably, two opposing answers. In Part II, I then consider all of the arguments credited by courts that have adjudged Congress intended to shift the burden of proof onto the party opposing federal jurisdiction. I will endeavor to show that these arguments rest on a number of highly suspect doctrinal and empirical assumptions. Against the prevailing view, I argue that there are sound reasons to conclude that CAFA does not shift any of the burden of jurisdictional proof from the party who desires to maintain the suit in federal court.
  • Finally,  two of our colleagues have joined the Law Professor Blogs  Network.  Welcome to Larry Bates and Kristin Simpson at the Secured Credit Blog.   --RR

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Just wondering if you view _Bryan v. BellSouth_ as somewhat different from the normal "two bites" scenario discussed in your earlier post because the state court was proceeding upon the case after it had been remanded from federal court--a remand that was then overturned by the Fourth Circuit. Thus, it seems like there could be a strong argument that the federal injunction in this case was necessary not only to prevent relitigation of the same issue in state court, but also to protect the judgment reversing the remand.

Posted by: Anon | Aug 10, 2007 3:48:15 PM

I don't view that as a material difference with respect to the relitigation exception. After the reversal, the prevailing party still had two choices to defeat the state-court suit because of the federal judgment: seek an injunction or raise the preclusion defense in state court. The fact that the judgment followed an appeal and reversal is of no moment. In this procedural context, I suppose a clever lawyer might craft an argument based on the "necessary in aid of jurisdiction exception." Also, upon reversal, it is very likely that the removal statutes "expressly authorized" an injunction.

Posted by: --RR | Aug 11, 2007 8:14:18 AM

You're right about the choices facing the prevailing party. But I think that the comity justification of Parsons Steel, discussed in your previous post, is less applicable in the Bryan scenario than in other "two bites" scenarios. In this case, the original action was filed in state court and was removed, thus depriving the state court of jurisdiction over the action. One count was then remanded, but the remand was reversed. At this point, it seems as if the state court is the entity violating comity if it proceeds with the remanded count. Unlike in the normal re-litigation scenario, not only has the federal court rendered a judgment on the substance of the action, but it has also (through its reversal of the remand) determined that the state court does not have jurisdiction over the action at all. I realize that the state court has jurisdiction to determine its own jurisdiction, but do not see why the federal court has an obligation arising from comity to allow a state court to proceed upon an action where a federal court has already vacated the remand (which provided the state court with jurisdiction) and determined the merits in a final judgment.

Posted by: Anon | Aug 12, 2007 9:45:17 AM

Anon, your point is thoughtful. Once the appellate court reversed, the jurisdiction that the state court acquired upon remand was divested, in a sense (though I agree with the court's analysis about jurisdiction not being retroactively nullified). At that point, the removal statute likely provided a basis for an injunction against further proceedings in state court via the expressly authorized exception (or perhaps the necessary in aid of jurisdiction exception.) But the court did not invoke that rationale because it was wrestling with the idea that the state proceedings had to become a "nullity" to enjoin. So instead, it used the merits-based preclusion ruling as the basis for a relitigation exception, and it used the same two-bites reasoning to disregard the state-court ruling on the same issue: "the state-court order in this case denying BellSouth’s motion to dismiss was not a final order." My preference would have simply been for the appellate court to affirm the injunction because once the remand was reversed, the removal statute provided an expressly authorized exception to the AIA. That said, both federal courts showed a more sophisticated understanding than I'm accustomed to seeing, and both were dealing with a situation that doesn't arise commonly: reversal of a remand order. To the extent the court enforced the same policy considerations to deny using comity when Parsons doesn't apply technically, no harm no foul. The appellate opinion can be read, though, to view such considerations as immaterial: "Although the district court enjoined the state proceedings in large part because it viewed those proceedings as having been a nullity, the injunction was proper, as outlined above, under the relitigation exception to the Anti-Injunction Act."

Posted by: --RR | Aug 13, 2007 8:11:07 AM

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