April 3, 2010
Alienage Jurisdiction: What Would Ali G Say?
It seems we now have a chance to find out. The Palestinian activist Aiman Abu Aita has sued British actor and comedian Sascha Baron-Cohen (creator and actor of the Ali G, Bruno and other characters) for $110 million in damages for defamation, alleging that he was portrayed as a terrorist in Baron-Cohen's recent flim "Bruno." NBC Universal and CBS are also defendants, and have moved to dismiss the case, arguing that there is no alienage jurisdiction when both the plaintiff and a defendant are aliens.
I'm sure that Baron-Cohen could come up with far better jokes than I, but that would require him actually caring about things like diversity and alienage jurisdiction. Then again, it seems that he has 110 million reasons to care.
The Hollywood Reporter has further coverage here.
Malveaux on Pre-Dismissal Discovery and Iqbal
Professor Suzette M. Malveaux (Catholic University School of Law) has posted "Front Loading and Heavy Lifting: How Pre-Dismissal Discovery Can Address the Detrimental Effect of Iqbal on Civil Right Cases" on SSRN. It will be published in Lewis & Clark Law Review.
The abstract states:
April 2, 2010
Civil Procedure Professors, Insomniac Litigators & Supreme Court Junkies...
You're one of these people if you read this week's Shady Grove decision (covered earlier here) in full. So begins yesterday's post The Shady Grove Case: Is Scalia Getting Soft on Plaintiffs? on the WSJ Law Blog. More specifically, Ashby Jones writes:
"Shady Grove Orthopedic Associates v. Allstate Insurance, which the Supreme Court handed down on Wednesday, is one of those opinions you’d only read in full if you are one of the following: 1) a civil procedure professor, 2) an insomniac litigator in hour 15 of a flight to Australia and who cannot bare another look at the SkyMall offerings, 3) a Supreme Court junkie who’s had four too many cans of Red Bull. Why do we say this? Well, it’s about Federal Rule of Civil Procedure 23. It’s also divvied up into about 23 separate opinions, concurrences and dissents."
April 1, 2010
Interesting Article on How Law Office Rules Affect Women
The New Jersey Law Journal has an article about a recent advisory ruling by the NJ bar concerning compliance with New Jersey's bona fide office rule.
The advisory opinion warns lawyers who rent space in cooperative office arrangements that they might be in violation of this rule by listing it as their primary place of business. Female lawyers, however, have expressed concerns that the regulation might discriminate against women since juggling of home and work responsibilities often requires "non-traditional" office arrangements.
March 31, 2010
Recap of Today's Decision in Shady Grove v. Allstate
Here's a brief recap of today's SCOTUS decision in Shady Grove Orthopedic Assocs. v. Allstate Ins. Co., which considers whether New York's bar on class actions for certain statutory-damages claims (N.Y. C.P.L.R. 901(b)) precludes class certification in a federal court diversity action. The result is essentially a 5-4 decision, with Scalia writing the Opinion of the Court. Justice Stevens, however, is the tie-breaking vote, and he joins only certain parts of Scalia's opinion and writes a separate concurrence. Justice Ginsburg writes the dissent. The fractured ruling means that considerable uncertainty remains on how federal courts should resolve other potential conflicts between state law and the Federal Rules of Civil Procedure.
The first issue the Court confronts is whether Federal Rule 23 "is sufficiently broad to control the issue before the court, thereby leaving no room for the operation of seemingly conflicting state law." On this issue, five Justices (Scalia, joined by Roberts, Stevens, Thomas and Sotomayor) hold that Rule 23 does control the issue. Therefore, Rule 23 will trump New York's 901(b) unless Rule 23 violates the Rules Enabling Act. (This is Part II-A of Scalia's opinion.)
The same five Justices then hold that Rule 23 does not violate the Rules Enabling Act, but Stevens does not join Scalia's reasoning on this and writes a separate concurrence. Channeling Sibbach, Scalia reasons that a Federal Rule passes muster as long as it "really regulates procedure." Stevens' approach is more deferential to state law: a Federal Rule "cannot govern a particular case in which the rule would displace a state law that is procedural in the ordinary use of the term but is so intertwined with a state right or remedy that it functions to define the scope of the state-created right." Despite their different approaches, Scalia and Stevens agree that Rule 23 is validly applied.
In dissent, Justice Ginsburg (joined by Kennedy, Breyer & Alito) reasons that Rule 23 should be construed not to collide with New York law. Therefore the applicability of New York law presents what has been called a relatively unguided Erie choice, not one that hinges on Rule 23's validity under the Rules Enabling Act. Under this approach, Ginsburg reasons, New York's 901(b) is binding in federal court if (per Hanna v. Plumer) "application of the state rule would have so important an effect upon the fortunes of one or both of the litigants that failure to apply it would be likely to cause a plaintiff to choose the federal court." Thus, Ginsburg reasons that New York's 901(b) should apply: "Shady Grove seeks class relief that is ten thousand times greater than the individual remedy available to it in state court. As the plurality acknowledges, forum shopping will undoubtedly result if a plaintiff need only file in federal instead of state court to seek a massive monetary award explicitly barred by state law."
Today's SCOTUS Decision in Shady Grove v. Allstate
March 30, 2010
Decision of Interest on Joinder
BNA's U.S. Law Week reports today on the Fifth Circuit's recent decision in Acevedo v. Allsup's Convenience Stores, Inc., No. 09-10417, ___ F.3d ___, 2010 WL 908678, 2010 U.S. App. LEXIS 5382 (March 15, 2010). The plaintiffs were approximately 800 current and former employees who sought payment of unpaid wages and overtime under the Fair Labor Standards Act. The district court dismissed the claims on the basis that the plaintiffs were not properly joined.
The Fifth Circuit panel held that denying joinder was not an abuse of discretion, reasoning that federal courts may refuse joinder of parties even if the requirements of Fed. R. Civ. P. 20 are satisfied:
"[A]ssuming arguendo that Allsup's company-wide policies allow Appellants to satisfy Rule 20's transaction test, denying joinder in this case would still not be an abuse of discretion. . . . [D]istrict courts have considerable discretion to deny joinder when it would not facilitate judicial economy and when different witnesses and documentary proof would be required for plaintiffs' claims."
The panel did, however, reverse the district court for dismissing all of the plaintiffs' claims as a result of the misjoinder: "[S]ince Rule 21 establishes that misjoinder of parties is not a ground for dismissing an action, the district court erred when it dismissed this entire action, rather than simply dismissing the claims of any misjoined plaintiffs."
March 29, 2010
Today: SCOTUS hears arguments in Morrison v. National Australia Bank
The Supreme Court will hold oral argument in Morrison v. National Australia Bank, a securities class action by foreign investors against a large Australian Bank with a Florida subsidiary. The Court will consider whether there is enough of a connection to the U.S. to maintain jurisdiction. The questions presented are:
I. Whether the antifraud provisions of the United States securities laws extend to transnational frauds where: (a) the foreign-based parent company conducted substantial business in the United States, its American Depository Receipts were traded on the New York Stock Exchange and its financial statements were filed with the Securities Exchange Commission (“SEC”); and (b) the claims arose from a massive accounting fraud perpetrated by American citizens at the parent company’s Florida-based subsidiary and were merely reported from overseas in the parent company’s financial statements.
II. Whether this Court, which has never addressed the issue of whether subject matter jurisdiction may extend to claims involving transnational securities fraud, should set forth a policy to resolve the three-way conflict among the circuits (i.e., District of Columbia Circuit versus the Second, Fifth and Seventh Circuits versus the Third, Eighth and Ninth Circuits).
III. Whether the Second Circuit should have adopted the SEC’s proposed standard for determining the proper exercise of subject matter jurisdiction in transnational securities fraud cases, as set forth in the SEC’s amicus brief submitted at the request of the Second Circuit, and whether the Second Circuit should have adopted the SEC’s finding that subject matter jurisdiction exists here due to the “material and substantial conduct in furtherance of” the securities fraud that occurred in the United States.