March 13, 2010
Nichol on Equal Access to the Civil Justice System
Professor Gene R. Nichol, Jr. (University of North Carolina School of Law) posted "Judicial Abdication and Equal Access to the Civil Justice System" on SSRN. It will be published in Case Western Reserve Law Review.
March 12, 2010
Pleading Standards and Bernie Madoff
The SEC's civil action against defendants allegedly involved in the Madoff ponzi scheme ran up against federal pleading standards in a recent decision from the Southern District of New York. The case is SEC v. Cohmad Securities Corp., No. 09-CV-5680, and docket information is available here. Judge Stanton's decision is at 2010 WL 363844 or 2010 U.S. Dist. LEXIS 8597. Here are some excerpts:
"[N]owhere does the complaint allege any fact that would have put defendants on notice of Madoff's fraud. Rather, the complaint supports the reasonable inference that Madoff fooled the defendants as he did individual investors, financial institutions, and regulators.
. . .
[T]he SEC has failed to allege facts giving rise to a plausible inference of the Cohns' or Jaffe's fraudulent intent, and the securities fraud claims against them are dismissed. Since the SEC has failed to plead the Cohns' or Jaffe's fraudulent intent (and it does not argue that Madoff's intent can be imputed to Cohmad), the securities fraud claims against Cohmad are dismissed as well."
The SEC was granted leave to replead.
(Hat Tip: Paul Stancil)
March 11, 2010
Ground Zero Workers cases set for settlement
Hartnett on Responding to Twombly and Iqbal
Professor Edward Hartnett (Seton Hall) has posted on SSRN his essay Responding to Twombly and Iqbal: Where Do We Go from Here?, to be published later this month in the Iowa Law Review Bulletin. Here's the abstract:
As reflected in the title of their article, Inventing Tests, Destabilizing Systems, Professors Clermont and Yeazell contend that the Supreme Court in Twombly and Iqbal invented a “new and foggy test” for judging the sufficiency of a complaint and “have destabilized the entire system of litigation.” As they see it, the Court’s approach is “thoroughly new,” and the Court “effectively creat[ed] a civil procedure hitherto foreign to our fundamental procedural principles.”
Elsewhere, I have offered a more-optimistic take on these cases, emphasizing the connections these decisions have with prior law and suggesting ways in which they can be tamed. See Taming Twombly—Even After Iqbal, 158 U. Pa. L. Rev. 473 (2010). Rather than rehash those arguments here, I instead take up Professors Clermont and Yeazell’s challenging question, “Where Do We Go from Here?” and address several of the proposals made to respond to Twombly and Iqbal by statute or rule amendment.
I also offer my own proposal, which focuses on the core issue at stake in debates about Twombly and Iqbal: should a plaintiff be able to obtain discovery in an effort to uncover evidence without which he or she cannot prevail? My proposal has something to offer plaintiffs, defendants, and the judicial system. I believe it represents an improvement over the current law and better than other proposed legislative and rulemaking responses to Twombly and Iqbal. Surely it could be improved by the perspectives of others in the academy, on the bench, or at the bar. Nevertheless, in deciding where we go from here, stumbling in the right direction is better than standing still or trying to go backwards.
And from the text, here is Professor Hartnett's proposal to amend the Federal Rules of Civil Procedure. He argues for adding the following language to Rule 12:
Rule 12(j): Allegations Likely To Have Evidentiary Support After a Reasonable Opportunity for Discovery
If, on a motion under Rule 12(b)(6) or 12(c) that has not been deferred until trial, the claim sought to be dismissed includes an allegation specifically identified as provided in Rule 11(b)(3) as likely to have evidentiary support after a reasonable opportunity for discovery, the court must either (1) assume the truth of the allegation, or (2) decide whether the allegation is likely to have evidentiary support after a reasonable opportunity for discovery. In deciding whether an allegation is likely to have evidentiary support after a reasonable opportunity for discovery, the court must consider the parties‘ access to evidence in the absence of discovery and state on the record the reason for its decision.
If the court decides that the allegation is likely to have evidentiary support after a reasonable opportunity for discovery, it must allow for that discovery, under the standards of Rule 26, and deny the motion to dismiss. If the court decides that the allegation is not likely to have evidentiary support after a reasonable opportunity for discovery, the court must treat the motion as one for summary judgment under Rule 56, and provide all parties a reasonable opportunity to present all the material that is pertinent to the motion.
Consolidating the Toyota Lawsuits: Let the Jostling Begin
Almost as predictable as the fact that Toyota is facing a multitude of lawsuits is the fact that lawyers will begin an intense campaign to determine where and how the lawsuits will be consolidated, and which lawyers will win the prize of leading the charge.
The National Law Journal reports here that around 150 met in Chicago to discuss strategies for going forward, and to jockey for who will take the lead in the litigation. Thus far, the fault lines have developed around arguments concerning venue, with some lawyers supporting the Central District of California where Toyota has its headquarters and where a District Judge is already hearing twelve cases against Toyota, whereas others favor the Western District of Kentucky (site of a large manufacturing plant) or the Eastern District of Louisiana (MDL district extraordinaire).
Spencer on Iqbal and Restrictive Procedure
Professor Benjamin Spencer (Washington & Lee University School of Law) posted "Iqbal and the Slide Toward Restrictive Procedure" on SSRN. It will be published in the Lewis & Clark Law Review.
Choi, Gulati, & Posner on What Federal District Judges Want
Professors Stephen J. Choi (NYU School of Law), G. Mitu Gulati (Duke University School of Law), and Eric A. Posner (University of Chicago Law School) posted "What do Federal Judges Want? An Analysis of Publications, Citations, and Reversals" on SSRN.
March 10, 2010
Abebe and Posner on Foreign Affairs Legalism
Daniel Abebe (University of Chicago Law School) and Eric Posner (University of Chicago Law School) have posted Foreign Affairs Legalism: A Critique to SSRN.
Foreign affairs legalism, the dominant approach in academic scholarship on foreign relations law, holds that courts should abandon their traditional deference to the executive in foreign relations, and that courts and Congress should take a more activist role in foreign relations than in the past. Foreign affairs legalists argue that greater judicial involvement in foreign relations would curb executive abuses and promote international law. We argue that foreign affairs legalism rests on implausible assumptions about the incentives and capacities of courts. In U.S. history the executive has given more support to international law than the judiciary or Congress has; this suggests that foreign affairs legalism would retard rather than spur the advance of international law.
March 9, 2010
Wanted: Law Professors To Sign On To SCOTUS Amicus Brief
See announcement below:
Max Huffman (Indiana) and Austen Parrish (Southwestern) have written an amicus brief in the case British American Tobacco v. United States in support of a petition for cert. The cert. petition is part of a massive case brought by the U.S. against the tobacco companies. Various cert. petitions have been filed, including a government petition seeking recovery of a $280 billion disgorgement award. Details about the underlying case can be found on SCOTUSblog.
The amicus brief focuses only on the narrow issue of how a court should approach issues of extraterritorial jurisdiction. They are looking for full-time law professors at ABA-accredited law schools to sign on to the brief. If you would consider signing on to the amicus brief, please email Austen Parrish at email@example.com, and he can send you a draft for review. There’s a tight deadline and the brief will be finalized this week: the deadline for providing notice to file the amicus is this Friday and the brief will likely go to the printer early next week. Because the effects test applies in a number of contexts (antitrust, securities, trademark, labor law, environmental law, criminal law etc.), the D.C. Circuit's decision could have far-reaching implications. This would be a good opportunity for the Court to clarify what is now a confused area of law.
Quick Overview of Case and Issues
The petitioner's cert petition implicates the question of whether RICO applies to the overseas conduct of foreign corporations. The D.C. Circuit did not directly address whether Congress intended RICO to apply extraterritorially -- an issue on which the lower courts are divided. Instead, it found: (1) that when domestic effects are felt in the United States, regulation of foreign conduct of a foreign corporation does not implicate extraterritorial jurisdiction; and (2) that it need not decide whether RICO applies extraterritorially so long as the foreign conduct has substantial effects in the United States. Because the D.C. Circuit found a domestic effect, it presumed that Congress intended RICO to regulate abroad. The case raises interesting questions about the role of the presumption against extraterritoriality, the effects test, and international law. It implicates at least a three-way circuit split on how the courts determine legislative (prescriptive jurisdiction).
The amicus brief focuses on how a court should interpret the geographic reach of federal law (the extraterritoriality question). The brief is being submitted to encourage the Court to grant certiorari. After explaining the confusion that exists in the lower courts on the issue of legislative jurisdiction, the brief clarifies the history and application of the effects test and shows how that history bears upon the proper interpretation of whether Congress intended a statute to reach extraterritorial conduct. The brief does not take a position on the underlying merits: the federal government's use of RICO to prevent and restrain an alleged scheme to deceive American consumers about the health risks of smoking. The amicus brief argues that courts should not use the effects to create a presumption in favor of extraterritorial regulation, but rather that the effects test sets the outer limit of Congressional power under international law (assuming one of the other bases for jurisdiction under international law does not exist). The brief highlights how assuming that legislation applies extraterritoriality can cause harm and undermine the meaningful development of international law.
March 8, 2010
SCOTUS Grants Cert in Vaccine Preemption Case
The BNA reports here:
Chin and Lindenbaum on the SCOTUS Special Docket
Gabriel Chin (University of Arizona School of Government and Public Policy) and Sara Lindenbaum (University of Arizona College of Law) have posted Reaching Out to Do Justice: The Rise and Fall of the Special Docket of the U.S. Supreme Court to SSRN.
In 1964-1967, the Supreme Court put three complicated cases involving individuals in a permanent state of suspension on what would come to be known as the “Special Docket.” Under this largely unknown feature of the Court’s practice, the cases were held without decision until after the parties involved died in the 1990s. Although the impulse to mercy in these cases was understandable (all involved mental illness and two were capital cases), as a small experiment, it must be adjudged a failure, because there is a reasonable possibility that in each case, just outcomes were not achieved. Assuming that the Court thought judicial intervention was necessary to avoid an unjust outcome, using the normal tools of decision might have been better.
Claim Against Donald Rumsfeld Survives Motion to Dismiss (and Iqbal)
Last week Judge Wayne Andersen of the U.S. District Court for the Northern District of Illinois denied former Secretary of Defense Donald Rumsfeld's motion to dismiss a lawsuit that was filed against him by two contractors who allege they were detained and mistreated while in Iraq. The case is Vance v. Rumsfeld, 1:06-cv-06964 (N.D Ill.), and Judge Andersen's opinion can be found here (courtesy of the Legal Times' Blog, which has additional coverage here). The docket is available via Justia or Pacer.
As for last Term's Supreme Court's decision in Ashcroft v. Iqbal, Judge Andersen wrote:
"Iqbal undoubtedly requires vigilance on our part to ensure that claims which do not state a plausible claim for relief are not allowed to occupy the time of high-ranking government officials. It is not, however, a categorical bar on claims against these officials."
Relying on the Ninth Circuit's decision in Al-Kidd v. Ashcroft, 580 F.3d 949 (9th Cir. 2009), Judge Andersen concluded that "the allegations of Rumsfeld's personal involvement in unconstitutional activity are sufficiently detailed to raise the right to relief above the speculative level and would survive a motion to dismiss."
March 7, 2010
Act of State Doctrine in Australia
From the post: