Saturday, December 12, 2009

The UK's New Supreme Court

This past October, Britain's new Supreme Court kicked off its first term.  In the past, the UK's highest court was a group of "law lords" who were actually part of Parliament.  However, beginning on October 1, 2009, under the Constitutional Reform Act of 2005, the court was removed from Parliament and a new, independent Supreme Court was created.

The British Supreme Court does not have the same power of judicial review that the United States Supreme Court has--it may not strike down statutes as being unconstitutional--but separating the new Supreme Court from Parliament will provide additional independence and the new court has the power to declare that laws are incompatible with human rights norms, thus sending laws back to Parliament for refinement.

For some additional commentary on the new British Supreme Court, see this National Law Journal OpEd.

~clf

December 12, 2009 in Current Affairs, International Courts | Permalink | Comments (0) | TrackBack (0)

Thursday, December 10, 2009

Exam Time Query: What Makes a Good Law School Exam Answer?

This week, the Wall Street Journal's Law Blog took on the question that's on everyone's mind this time of year:  what makes a good law school exam answer?  The WSJ Law Blog asked seven law school professors to fill in the blank in this statement:  "A good law exam answer is _________."  Here are the responses:

Professor Heather Gerken (Yale):  "A good law exam answer is evaluative."
Professor Richard Friedman (Michigan):  "A good law exam answer answers the question."
Professor Eric Chiappinelli (Creighton):  "A good law exam answer is one that does more than tells me what the law is (more or less well) and applies the law to the facts (more or less well) and then stops."
Professor Paul Secunda (Marquette):  "A good law exam answer gets to maybe."
Professor Adam Winkler (UCLA):  "A good law exam answer is rigorous and deep."
Professor Tim Wu (Columbia):  "A good law exam answer is honest and perceptive."
Professor Pamela Karlan (Stanford):  "A good law exam answer is like a poem."

In addition, each professor provided a brief elaboration about what, in his or her opinion, makes a good exam answer.  

~clf

December 10, 2009 in Weblogs | Permalink | Comments (0) | TrackBack (0)

Personal jurisdiction over foreign contractors

Foreign companies often do business with the United States as foreign contractors.  As the recent wars in Iraq and Afghanistan have shown, sometimes that business takes place entirely overseas.  Where does that leave persons wishing to sue foreign contractors?  The answer, as most procedure profs might guess, is that such litigants are often unable to sue or collect default judgments because U.S. courts lack personal jurisdiction over the defendants.

The Senate is considering a bill, introduced by Claire McCaskill (D-Mo) (available here: HEN09C09) that would "provide personal jurisdiction in causes of action against contractors of the United States performing contracts abroad with respect to members of the Armed Forces, civilian employees of the United States, and United States citizen employees of companies performing work for the United States in connection with contractor activities, and for other purposes."

Additional reporting available here and a transcript is available at the Federal News Service (subscription required).

RJE

December 10, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 9, 2009

Justice Sotomayor, Civil Procedure, and the "Tradition" of Unanimous Debut Opinions

Yesterday brought the Supreme Court's first decision in a case argued this Term. The Court in Mohawk Industries v. Carpenter writes:

"The question before us is whether disclosure orders adverse to the attorney-client privilege qualify for immediate appeal under the collateral order doctrine. Agreeing with the Court of Appeals, we hold that they do not. Postjudgment appeals, together with other review mechanisms, suffice to protect the rights of litigants and preserve the vitality of the attorney-client privilege."

The issue of when interlocutory district court orders can be immediately appealed is one that's particularly interesting to me (though perhaps not to many others outside the civil procedure world). From a historical perspective, Mohawk is significant as the first opinion authored by Justice Sotomayor. She is thus forever linked to civil procedure (as is Chief Justice Roberts, I might add, whose debut opinion involved the attorney-fee provision in 28 U.S.C. § 1447(c). See Martin v. Franklin Capital Corp., 542 U.S. 132 (2005)).

Justice Thomas's concurring opinion in Mohawk has also attracted attention. Although he agrees with the Court's result, Justice Thomas writes that Justice Sotomayor's opinion "needlessly perpetuates a judicial policy that we for many years have criticized and struggled to limit." He concludes:

"I would leave the value judgments the Court makes in its opinion to the rulemaking process, and in so doing take this opportunity to limit -- effectively, predictably, and in a way we should have done long ago -- the doctrine that, with a sweep of the Court's pen, subordinated what the appellate jurisdiction statute says to what the Court thinks is a good idea."

Some have argued that Justice Thomas's opinion contravenes the Supreme Court's "tradition" that a new Justice's first opinion be a unanimous one. (See Eric Muller's post at The Faculty Lounge: Clarence Thomas "Welcomes" Sonia Sotomayor to the Supreme Court). The New York Times described the concurrence as "testy" and "a swipe at his new colleague." On the other hand, Mohawk was unanimous in the sense that all nine Justices agreed in the result. And Justice Thomas did sign on to two whole paragraphs of Justice Sotomayor's opinion ("I concur in the judgment and in Part II-C of the Court's opinion"). What do folks think?

At the end of the day, maybe it doesn't really matter. Justice Breyer did not enjoy the benefit of this so-called tradition. He prompted outright dissents from Justices Scalia and Thomas in his first opinion. See Allied Bruce Terminix v. Dobson, 513 U.S. 265 (1995). Then again, Justice Breyer went on to serve a remarkably long tenure as the Court's most junior Justice. Could there be a "Curse of the Nonunanimous Debut Opinion"?

--A

(Cross-posted at Concurring Opinions)

December 9, 2009 in Current Affairs, Federal Courts, Recent Decisions, Supreme Court Cases | Permalink | Comments (1) | TrackBack (0)

PENNumbra Twombly/Iqbal debate continues

Today features Professor Burbank's opening statement, adding to the Hermann/Beck opening statement posted last week.

http://www.pennumbra.com/debates/debate.php?did=24

RJE

December 9, 2009 in Current Affairs, Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0) | TrackBack (0)

Nagareda on Embedded Aggregation in Civil Litigation

Richard Nagareda (Vanderbilt University) has posted Embedded Aggregation in Civil Litigation to SSRN.

Abstract:     
When one hears the term “aggregation” in civil litigation, the context that comes to mind involves the long-running debate over class actions. Viewed within its own terms, that debate tends to convey the impression that the world neatly divides itself into the mass effects somehow unique to class actions and the confined realm of one-on-one litigation. In the midst of this debate, a closely related set of issues has gone curiously underexplored. Here, the concern is not over some deviation from the one-on-one lawsuit. Rather, the basic suggestion is to circumscribe what an ostensible individual action may do in order to prevent that lawsuit from exerting some manner of binding force upon nonparties who are broadly similar to the parties involved. The idea, in other words, is to constrain what individual litigation may do, precisely because it is not a “de facto class action” empowered to act upon nonparties. Variations of this concern have emerged across what might seem an unrelated array of contexts: the Supreme Court’s 2008 decision in Taylor v. Sturgell, rejecting the procedural doctrine of “virtual representation”; the Court’s 2007 decision in Philip Morris USA v. Williams, regarding the constitutional due-process limits on punitive damages; and the multibillion-dollar deal reached in 2007 to resolve mass tort litigation over the prescription pain reliever Vioxx. This Article explains that there is something deeper going on here but that its nature and implications remain undertheorized. Each instance involves a more general phenomenon, what this Article delineates as “embedded aggregation.” In each, a doctrinal feature of what is ostensibly individual litigation – the scope of the right of action asserted, the nature of the remedy sought, or the character of the wrong alleged – gives rise to demands for the suit to bind nonparties in some fashion, beyond the ordinary stare decisis effect that any case might exert. Ironically, the features of Taylor, Williams, and the Vioxx litigation that make them situations of embedded aggregation also, in all likelihood, would defeat efforts to aggregate them overtly as class actions. The result is to leave the law today in a kind of procedural Catch-22, whereby embedded aggregation seemingly invites class-action treatment, but such treatment is unavailable due to the very features that make the situation one of embedded aggregation. This Article frames an emerging prescription for situations of embedded aggregation in a world in which the modern class action does not, and will not, realistically shoulder the entire regulatory load. The way out of the procedural Catch-22 in which the law finds itself consists of “hybridization” – the combination of individual actions with some manner of centralizing mechanism, just not always the unity of litigation generated by the class action device. Moving outside the parameters of the class action means shifting into new settings a similar need for a centralizing mechanism and, crucially, for legal regulation of the manner in which it may exercise coercive power. In so doing, this Article seeks to break down the prevalent supposition of a neat division between the perceived need for legal regulation of class actions and the supposedly benighted world of autonomous individual lawsuits. The time has come to move the conversation about aggregate procedure beyond the class action device – to broaden the menu of approaches available for our modern world of mass civil claims. Such an approach actually would remain more true to the historical emergence of the class action device over time than a prescription for either a vast expansion of that device or reflexive individualization in all situations of embedded aggregation. In addition, hybridization accords better with the emerging transnational conversation about the design of aggregate litigation procedures.

RJE

December 9, 2009 in Class Actions, Federal Courts, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Hovenkamp on Pleading in Antitrust Cases

Professor Herbert Hovenkamp (University of Iowa College of Law) has posted "The Pleading Problem in Antitrust Cases and Beyond" on SSRN as part of the Working Paper Series.  

The abstract states:

In Twombly the Supreme Court held that an antitrust complaint failed because its allegations did not include enough “factual matter” to justify proceeding to discovery. Two years later the Court extended this new pleading standard to federal complaints generally. Twombly’s unnecessarily broad language had led to a broad rewriting of federal pleading doctrine.

Naked market division conspiracies such as the one pled in Twombly must be kept secret because antitrust enforcers will prosecute them when they are detected. This inherent secrecy, which the Supreme Court did not discuss, has dire consequences for pleading if too much factual specificity is required. Indeed, it can close the door in cases where the conspiracy is reasonably suspected but supporting evidence has not already been uncovered.

In the paradigm cartel case the defendants meet secretly in a hotel room and plot prices or output. But antitrust agreements can be proven by other evidence, including evidence of interdependence, parallel behavior, and actions contrary to independent self-interest. By indicating that the complaint failed because it did not state “which of their employees” may have conspired and that there was some “when” or “where” that the agreement took place, the Court was apparently requiring the plaintiff to plead something in its complaint that existing law woud not require it to show in order to avoid summary judgment or a JML at trial. Or to say it differently, the Court was changing conspiracy doctrine at the same time that it was changing pleading doctrine.

The most salient fact about Twombly is that, although it was a proof-of-agreement case, the claim was of geographic market division rather than parallel pricing. For all of its lengthy discussion about the facts essential to a good complaint, the Supreme Court paid little attention to the difference between price fixing and market division. While parallel pricing typically is interdependent conduct, parallel failures to enter one another’s markets typically are not. As a result, methods of indirect proof that might work in a case alleging unlawful price fixing are unlikely to work in one alleging unlawful market division. Twombly clearly reached the correct conclusion, but it could have done less damage to the values of notice pleading stated in the Federal Rules had it focused more narrowly on the mechanisms by which anticompetitive agreements are proven. Pleading reform requires, not an increase in “factual matter,” but rather a closer correlation between the legal elements that must be proven and the allegations in a complaint.

~clf


December 9, 2009 in Recent Scholarship, Twombly/Iqbal | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 8, 2009

SCOTUS decision in Mohawk Industries v. Carpenter: the collateral order doctrine, discovery orders, and the attorney-client privilege

The Supreme Court today decided Mohawk Industries Inc. v. Carpenter, No. 08-678. (See here and here for our earlier coverage of the case.) Justice Sotomayor begins the opinion:

"The question before us is whether disclosure orders adverse to the attorney-client privilege qualify for immediate appeal under the collateral order doctrine. Agreeing with the Court of Appeals, we hold that they do not. Postjudgment appeals, together with other review mechanisms, suffice to protect the rights of litigants and preserve the vitality of the attorney-client privilege."

Justice Thomas concurred in judgment, writing separately to challenge the legitimacy of the collateral order doctrine (a.k.a., the Cohen doctrine):

"We need not, and in my view should not, further justify our holding by applying the Cohen doctrine.... In taking this path, the Court needlessly perpetuates a judicial policy that we for many years have criticized and struggled to limit."

--A

December 8, 2009 in Recent Decisions, Supreme Court Cases | Permalink | Comments (0) | TrackBack (0)

Senators opine on Iqbal & Twombly in the Wall Street Journal

Under the heading Restoring Justice or Hurting National Security?, yesterday's Wall Street Journal published two Senators' letters to the editor about the Notice Pleading Restoration Act of 2009. The Act is designed to legislatively overrule the Supreme Court's decisions in Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly.

The letters by Senator Arlen Specter (who sponsored and supports the bill) and Senator Jeff Sessions (who opposes the bill) are available here.

For coverage of last week's Senate Judiciary Committee's hearing on Senator Specter's bill, see here, here, and here.

(Hat Tip: Suja Thomas)

--A

December 8, 2009 in Current Affairs, Federal Rules of Civil Procedure, Twombly/Iqbal | Permalink | Comments (0) | TrackBack (0)

Monday, December 7, 2009

Commentary on The Federal Courts Jurisdiction and Venue Clarification Act of 2009 (H.R. 4113, now in Congress)

Now pending before Congress is H.R. 4113, a.k.a. The Federal Courts Jurisdiction and Venue Clarification Act. The Act could certainly use a workup by the House Acronym Committee (maybe I have soccer on the brain after Friday's World Cup draw, but “FC JAVCA” sounds like it could be a mid-tier European football club). All kidding aside, the Act makes a number of commendable improvements, many of which were recommended by a recent project of the American Law Institute (ALI).

For more information on the bill, see the Library of Congress's website here. The full text of the bill is available here (.xml format) or here (.pdf format). Earlier coverage of the bill is here. Among other things, the Act would amend Title 28 with respect to removal and remand procedure, venue, and actions involving permanent resident aliens and foreign corporations and insurers. This post summarizes (and flags some potential concerns with) the Act's provisions dealing with the amount in controversy required for diversity jurisdiction. Under current law, the amount in controversy must exceed $75,000.

First, the Act would index the amount-in-controversy threshold to automatically adjust for inflation. [Act, § 103.] Beginning in 2011, the $75,000 threshold would be adjusted every five years according to the percentage change in the Consumer Price Index. If you’re worried about the amount in controversy becoming $83,516.44, have no fear; the amount will be rounded to the nearest multiple of $5,000.

Second, the Act has a number of provisions dealing with a plaintiff's ability to preclude diversity jurisdiction by declaring that it will neither seek nor accept a judgment in excess of the amount in controversy threshold. [Act, § 104.] Making such a declaration in state court will prevent removal to federal court "as long as the plaintiff abides by the declaration and the declaration is binding under the laws and practice of the State." If the plaintiff fails to abide by this declaration, the case can be removed within 30 days after the defendant receives "an amended pleading, motion, order or other paper from which it may first be ascertained" that the plaintiff seeks or is willing to accept a judgment in excess of the threshold for diversity jurisdiction. The Act also provides that a removed case may be remanded to state court if the plaintiff makes a similar declaration in federal court within 30 days of removal. In that situation, "the district court shall remand the action to State court unless equitable circumstances warrant retaining the case."

One possible concern with these provisions is that they do not allow "re-removal" if the plaintiff who makes the declaration in federal court then reneges on the declaration after getting back to state court. The new language that would allow removal after a plaintiff reneges applies only "[i]f the plaintiff has filed such a declaration in state court but thereafter fails to abide by that declaration." (emphasis added)

Third, the Act codifies the general rule that "the sum demanded in good faith in the initial pleading [the state court complaint] shall be deemed to be the amount in controversy." [Act, § 105(b), to be codified at 28 U.S.C. § 1446(b)(4).] It then provides that the notice of removal may assert the amount in controversy required for diversity jurisdiction where either (a) nonmonetary relief is sought, or (b) "State practice either does not permit demand for a specific sum or permits recovery of damages in excess of the amount demanded." The defendant must then establish to the federal court by the preponderance of the evidence that the amount-in-controversy threshold is met.

One concern with this provision is that it does not authorize the notice of removal to assert the amount in controversy if state practice does permit demand for a specific sum but the initial pleading just fails to make one. Arguably the notice of removal should be able to assert the amount in controversy in that situation as well. 

I'm hoping to blog on other provisions in the Act in the near future. In the meantime, feel free to use the comments to share your own thoughts.

--A

(Cross-posted on Concurring Opinions)

December 7, 2009 in Current Affairs, Subject Matter Jurisdiction | Permalink | Comments (2) | TrackBack (0)

Attaching electronic funds in martime jurisdiction

The Second Circuit recently overturned its previous position regarding the attachment of electronic fund transfers (EFTs) for purposes of maritime jurisdiction.

Rule B of the Federal Rules of Civil Procedure Supplemental Rules allows courts to attach tangible or intangible property of a named defendant in admiralty cases if certain conditions are met.  This procedure is often used by parties involved in foreign litigation or arbitration to aid in enforcement of judgments.

The EFT issue arises when a defendant transfers money from one bank to another, and the money is funneled through an intermediary bank located in the jurisdiction (most often in New York).  When the funds are in New York, they are attached for purposes of litigation -- a procedure that does not require notice.  In an case earlier this decade, Winter Storm Shipping, LTD. v. TPI , 310 F.3d 263 (2d. Cir. 2002), the Second Circuit ruled that EFT funds were eligible for Rule B attached.

Last month, the Second Circuit overruled this holding in The Shipping Corp. of India LTD v. Jaldhi Overseas PTE LTD , - F.3d -, -, 2009 WL 3319675 (2d. Cir., 2009).  The court based its decision on an interpretation of the New York Uniform Commercial Code, holding that the funds are in temporary possession of the intermediary bank, and therefore are not property of the EFT initiator.   However, the court also cited practical concerns motivating its decision such as the increased case load resulting from these lawsuits, and the high costs that the intermediary banks must spend in defending them.

RJE

December 7, 2009 in Federal Courts, Federal Rules of Civil Procedure, Recent Decisions | Permalink | Comments (0) | TrackBack (0)

Eisenberg & Huang on Supreme Court Jurisdiction Shifting from Mandatory to Discretionary

Theodore Eisenberg (Cornell University School of Law) and Kuo-Chang Huang (Institutum Iurisprudentiae) have posted "The Effect of Rules Shifting Supreme Court Jurisdiction from Mandatory to Discretionary--An Empirical Lesson from Taiwan" on SSRN.  

The abstract states:

Theoretical works suggest that granting a supreme court discretion in choosing the cases to be decided on the merits could shift dockets away from traditional case-based adjudication and towards issue-based adjudication. According to this prediction, legislatures can recast supreme courts’ roles in society by modifying jurisdictional rules. This study tests this prediction empirically. Using a newly assembled data set on appeals terminated by the Taiwan Supreme Court for the period 1996-2008, we study the effect of jurisdictional-source procedural reform, a switch from mandatory jurisdiction to discretionary jurisdiction in 2003, on the Taiwan Supreme Court’s performance. Our study shows that the 2003 reform failed to transform the function of the Court from correcting error to a greater role in leading the development of legal doctrine as intended by the legislature. Our findings suggest that a supreme court can adjust the way it conducts business according to its own preference and the role it defines for itself, which are influenced both by the background against which it operates and the inertia of its members’ working habits. Our study informs policy-makers that merely amending procedural rules, without more, is unlikely to change the function of a supreme court. Our findings also suggest that statutorily dictated mandatory jurisdiction may not be implemented by a high court faced with caseload pressure.

~clf

December 7, 2009 in International/Comparative Law, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Sunday, December 6, 2009

Schwartz on the the Federal Arbitration Act

David S. Schwartz (University of Wisconsin) has posted The Federal Arbitration Act and the Power of Congress Over State Courts to SSRN.

Abstract:     
The Federal Arbitration Act is unconstitutional as it has been applied to the states over the past 20 years. In its 1984 decision in Southland Corp. v. Keating, the Supreme Court held that FAA is substantive law binding on state courts under the Supremacy Clause. The resulting doctrine of FAA preemption has nullified dozens of state contract laws, sewn confusion in the courts, and poised the FAA to become a significant "tort reform" statute. The FAA is thus an important example of a larger recent trend of efforts to impose tort reform, indirectly, by federal regulation of state court procedure.

States' sovereignty over the structure, jurisdiction and procedure of their courts is fundamental to federalism. The Supremacy Clause requires state courts to apply federal substantive law, but the constitution assumes state courts will do so applying their own neutral rules of procedure. While state courts' implementation of federal substantive law may incidentally, in isolated cases, affect state procedural rules, Congressional efforts to impose procedural rules on state courts abridge the states' "residual and inviolable sovereignty" and impermissibly commandeer both state judges and legislatures.

The FAA is procedural regulation, notwithstanding Southland. It governs contracts about procedure and overrides the fundamentally procedural allocation of decisionmaking authority between courts and arbitrators. Looked at through every relevant context in which a substance-procedure distinction has been applied, arbitration enforcement is a procedural matter, and Congress is without power to impose it on the states.

RJE

December 6, 2009 in Recent Scholarship, State Courts | Permalink | Comments (0) | TrackBack (0)