August 1, 2008
Speaking of the Second Branch
This week, yet another court remanded a case to state court because Grable was not satisfied. In Singh v. Duane Morris LLP, the Fifth Circuit held that second-branch jurisdiction did not extend to plaintiff's malpractice claim. Suit one was a federal trademark suit that plaintiff lost because he did not produce evidence of secondary meaning. In suit two, plaintiff sued his lawyer from suit one, arguing that the lawyer messed up by not proving secondary meaning. Because of the suit-within-a-suit requirement of a malpractice claim, plaintiff's claim, though created by state law, involved an embedded federal issue. Cue Grable, the second branch, and the article I posted yesterday. Using the Grable vocabulary, the court persuasively explained how exercising jurisdiction over such a malpractice claim would be "disruptive." (Its substantiality discussion was less than artful.) The case is notable because it reaches a different result than did the Federal Circuit in a similar case. In the Air Measurement Case (which we covered here) the court held that second-branch jurisdiction did extend to a malpractice action when the suit within the suit involved patent infringement. --RR
For those interested, I've posted a revised draft on SSRN of my most recent article: It's Just Not Worth Searching for Welcome Mats with a Kaleidoscope and a Broken Compass. If you have comments, please do e-mail them. The abstract follows:
Justice Holmes construed the words "arising under" to mean something simple and ascertainable - a case arises under the law that creates the cause of action. By rejecting the bright-line Holmes test as the exclusive test, the Supreme Court created a second branch of federal-question jurisdiction, which applies to state-created claims with embedded federal issues, and which is governed by a flexible and elusive standard. While eschewing the bright-line Holmes rule as too rigid, champions of the second branch have both praised its flexibility and predicted that clear-enough boundaries will develop. They have not and will not. Long ago, Justice Cardozo acknowledged that the second branch requires an "accommodation of judgment to...kaleidoscopic situations." Then armed with kaleidoscopes, the Court and Academy tried to locate the boundaries. Professor Cohen then informed us, in his landmark article, that the arising under compass was still broken. The Court tried to fix the compass in the Merrell-Dow case, but that just created a 3-way circuit split. Finally, in the recent Grable case, the Court explained that Merrell-Dow caused confusion because we should have had our kaleidoscopes and compasses set on finding welcome mats. 85 years of trying is enough.
I make three assertions in the article: (1) The second branch should be eliminated (2) by Congress (3) by defining "arising under" solely for purposes of 28 U.S.C. § 1331. Simple may not always, or even often, be better. But in this context it is. Viewed in light of the state, federal, and systemic interests, the costs of retaining the second branch outweigh the benefits. A limited sample group of opinion-generating second-branch removal cases indicates that for every removed case that satisfies Grable about eight more are remanded after an average delay of about six months - cases remanded without opinion almost surely skew the numbers more. The class of delay-prone cases will remain large because most colorably removable cases are removed, and the nature of the second-branch casts a wide net of colorability. As for the change coming by amendment, Justice Thomas recently invited original-intent arguments to justify returning to the Holmes test, and I agree with him in part. We should look for the Holmes test, but to today's Congress, not the Congress of 1875. The article concludes by considering issues surrounding the amendment of a major general grant of jurisdiction and ultimately recommending that Congress should define "arising under" solely for purposes of § 1331. This approach will allow Congress to retain the second branch in areas of exclusive jurisdiction, will eliminate Grable's new disruptiveness prong, and will ultimately facilitate a transition where once again cases construing the jurisdictional statute will resemble statutory-construction cases.
July 31, 2008
Return to blogging
It's time to catch up on the reading list and return to blogging. As I proceed through my list, I'll link to the decisions and articles I think will interest our readers. For today, readers might be interested in the controversy regarding Pharma experts, disclosure, conflict of interest, and especially the discussion in the comments by Ted Frank. And where do we look for controversy? Here, of course. --RR