Saturday, July 31, 2010

Burch on the Manifest Disregard Standard in Arbitration

Professor Thomas V. Burch (Florida State University College of Law) has posted "Manifest Disregard and the Imperfect Procedural Justice of Arbitration" on SSRN.  It will be published in the Kansas Law Review. 

The abstract states:

Arbitration is an efficient dispute-resolution system that respects parties’ right to an accurate award. But because arbitration is designed to be efficient, accuracy is not guaranteed. This presents a challenge when courts are asked to confirm or vacate arbitrators’ decisions. Judges dislike approving inaccurate awards, especially in cases where parties have unequal bargaining power. Yet, judges also recognize arbitration’s limited-review principle. So they are forced to balance their desire for accuracy against arbitration’s efficiency policy. Efficiency typically wins at the expense of accurate outcomes.

This Article contends that courts place too much emphasis on the efficiency policy in mandatory arbitration. Consider the narrow manifest disregard standard that most courts apply. It is virtually impossible to vacate an award under this standard because the court must have proof that the arbitrator consciously disregarded known, applicable law. Consequently, parties subjected to mandatory arbitration have little chance of overturning inaccurate awards, which is problematic from a procedural justice standpoint because parties like decision control. This Article proposes giving parties greater decision control by allowing them to appeal arbitrators’ awards for legal error. This expanded standard creates a procedural mechanism for correcting arbitrators’ mistakes, thereby enhancing mandatory arbitration’s procedural justice.

~clf

July 31, 2010 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Friday, July 30, 2010

Big Day in Boise: JPML Hearing on Possible MDL for BP Oil Spill Litigation

Yesterday the U.S. Judicial Panel on Multidistrict Litigation (JPML) heard argument on various motions to centralize litigation relating to the BP Oil Spill. Orders relevant to the hearing are available on the JPML website here.

For press coverage, see Associated Press; Bloomberg; National Law Journal.

--A

July 30, 2010 in Current Affairs, In the News, MDLs | Permalink | Comments (0)

Thursday, July 29, 2010

Insurers Not Required to Defend in Class Action Alleging Economic Damages

The National Law Journal reports a decision from the Seventh Circuit holding that the insurers of sellers of baby products had no duty to defend the insured in a class action lawsuit that sought only economic damages.

RJE

July 29, 2010 in Class Actions, Mass Torts, Recent Decisions | Permalink | Comments (0)

Junior Faculty Federal Courts Workshop Registration Deadline

Professor Jamelle C. Sharpe (University of Illinois College of Law) has sent the following reminder about the registration deadline for the Junior Faculty Federal Courts Workshop:

For those who are interested, I just wanted to send a reminder that the registration deadline for the Third Annual Junior Faculty Federal Courts Workshop is thisSaturday, July 31.  The workshop will be held at the Club Quarters Central Loop in Chicago, IL on October 7-8, and will be hosted by the University of Illinois College of Law.  This year, we are excited to have Richard Freer, Jim Pfander, Martin Redish, and Louise Weinberg as commentators on papers submitted by junior faculty members from across the country.

Please e-mail
Jamelle Sharp or visit the workshop website at http://www.law.uiuc.edu/faculty-admin/federal-court-workshop.asp if you would like to attend, or if you have questions.  The website will also have additional information regarding the workshop, including how to book accommodations at the Club Quarters at a discounted rate.

~clf

July 29, 2010 in Conferences/Symposia, Federal Courts | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 28, 2010

Jeffries on Qualified Immunity

Professor John C. Jeffries (University of Virginia School of Law) has posted "What's Wrong with Qualified Immunity? " on SSRN.  It will be published in the Florida Law Review.

The abstract states:

Originally delivered as the Dunwody Lecture at the University of Florida, this paper argues that “qualified immunity needs a course correction.” The Supreme Court’s attempt to strike a balance between the “importance of a damages remedy to protect the rights of citizens” and the “public interest in encouraging the vigorous exercise of official authority” (Harlow v. Fitzgerald) may have seemed sensible in the abstract, but has broken down in administration. Today, the law of qualified immunity is complicated, unstable, and overprotective of government officers. This paper documents those defects and proposes reforms designed to “get constitutional tort law back on track.”

~clf

July 28, 2010 in Federal Courts, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 27, 2010

Wasserman on a Two-Course Sequence in Civil Rights & Federal Courts

Howard Wasserman (Florida International) has posted on SSRN his paper, Civil Rights and Federal Courts: Creating a Two-Course Sequence, 54 St. Louis Univ. L.J. 821 (2010). Here’s the abstract:

This paper discusses the details of an independent course on § 1983/constitutional litigation as an off-shoot of the traditional Federal Courts course and how to create a two-court upper-level course sequence. The paper was published as part of the St. Louis University Law Journal's symposium on "Teaching Civil Rights."

--A

July 27, 2010 in Conferences/Symposia, Federal Courts, Recent Scholarship | Permalink | Comments (0)

Monday, July 26, 2010

Interesting Case on Preemption and Twombly

Courtesy of the Drug and Device Law Blog comes this post about Franklin v. Medtronic, Inc., 2010 U.S. Dist. LEXIS 71069 (D. Col. May 12, 2010).  The court dismissed a claim that an implantable defibrillator malfunctioned and caused an injury using Twombly, and preemption and causation doctrines.  The post reflects the delight of our honorable Drug and Device Law Blog colleague, but also provides a good summary of the opinion.

RJE

July 26, 2010 in Federal Courts, Recent Decisions | Permalink | Comments (0)

Commentary on Recent CAFA Decision (Cappuccitti v. DirecTV)

Last week the Eleventh Circuit issued a very significant (though a bit puzzling) decision on the 2005 Class Action Fairness Act (CAFA). The case is Cappuccitti v. DirecTV, Inc., No. 09-14107,  ___ F.3d ___, 2010 U.S. App. LEXIS 14724, 2010 WL 2803093 (11th Cir. July 19, 2010), covered earlier here. One of CAFA’s most significant changes was an amendment to the diversity jurisdiction statute, codified at 28 U.S.C. § 1332(d), to authorize federal diversity jurisdiction over class actions for which there is (a) minimal diversity between the parties, and (b) an aggregate amount in controversy in excess of $5,000,000. Neither party in Cappuccitti disputed that federal subject matter jurisdiction was proper under § 1332(d); DirecTV's appeal challenged only the district court’s refusal to compel arbitration. But the Eleventh Circuit raised the jurisdictional issue sua sponte and dismissed the case entirely. It held that even if a class action’s aggregate amount-in-controversy exceeds $5,000,000, CAFA jurisdiction applies only if at least one class member’s claim exceeds the $75,000 threshold that applies for ordinary diversity jurisdiction under 28 U.S.C. § 1332(a).

It is difficult to see how this result follows from CAFA’s text. CAFA’s § 1332(d) created a new category of diversity jurisdiction over class actions that is distinct from the general form of diversity jurisdiction set forth in § 1332(a). The only situation where the two overlap is for so-called “mass actions” -- cases that are not class actions but nonetheless include more than 100 plaintiffs with related claims. Section 1332(d)(11) provides that such “mass actions” can trigger CAFA jurisdiction, but only for plaintiffs whose claims exceed § 1332(a)’s $75,000 threshold. See 28 U.S.C. § 1332(d)(11)(B)(i). Cappuccitti, however, is a true class action brought pursuant to Federal Rule of Civil Procedure 23. So § 1332(d)(11)’s provisions for “mass actions” don’t apply, leaving no textual basis for incorporating § 1332(a)’s $75,000 threshold into § 1332(d). 

Thus, § 1332(d)’s plain text provides that as long as a class action’s aggregate amount in controversy exceeds $5 million, it doesn’t matter whether any individual class member’s claim exceeds $75,000 (or any other amount). CAFA’s legislative history confirms that this was exactly what Congress intended. According to the Senate Judiciary Committee’s report (S. Rep. 109-14), CAFA responded to “the nonsensical result under which a citizen can bring a ‘federal case’ by claiming $75,001 in damages for a simple slip-and-fall case against a party from another state, while a class action involving 25 million people living in all fifty states and alleging claims against a manufacturer that are collectively worth $15 billion must usually be heard in state court (because each individual class member's claim is for less than $75,000).” [S. Rep. 109-14, at p.11 (emphasis added)]. In further critiquing the pre-CAFA approach to diversity jurisdiction over class actions, the Senate Report explained [at p.69]:

[T]he process of assessing whether a class action complies with the current jurisdictional amount requirement is also often “an expensive and time consuming process,” requiring discovery on the nature and value of the named plaintiffs' claims. As noted previously, in some federal Circuits, the jurisdictional amount requirement in a class action is satisfied by showing that any member of the proposed class is asserting damages in excess of $75,000, and in other Circuits, the question is whether each and every member of the putative class has individually an amount in controversy exceeding $75,000. Again, this time-consuming issue, often requiring significant amounts of record review and fact-finding, is litigated very frequently in the many class actions that are removed to federal court under current law. [CAFA] will make the resolution of class action jurisdictional issues easier -- not harder. . . . [I]t will be much easier to determine whether the amount in controversy presented by a purported class as a whole (that is, in the aggregate) exceeds $5 million than it is to assess the value of the claim presented by each and every individual class member, as is required by the current diversity jurisdictional statute.

[S. Rep. 109-14, at p.11 (emphasis added)].

My purpose here is not to defend CAFA. One can certainly question whether, as a policy matter, federal diversity jurisdiction should have been expanded to cover these kinds of class actions. And CAFA does contain several instances of problematic drafting (see, e.g., here and here). But the issue addressed in Cappuccitti is not one of them. The court’s holding is very hard to square with CAFA’s text and purpose.

--A
 

July 26, 2010 in Adam Steinman, Class Actions, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Dobbins on Structure & Precedent

Professor Jeffrey C. Dobbins (Willamette University College of Law) has posted "Structure and Precedent" on SSRN.  It will be published in the University of Michigan Law Review.

The abstract states:

The standard model of vertical precedent is part of the deep structure of our legal system. Under this model, we rarely struggle with whether a given decision of a court within a particular hierarchy is potentially binding at all. When Congress or the courts alter the standard structure and process of federal appellate review, however, that standard model of precedent breaks down. This Article examines several of these unusual appellate structures and highlights the difficulties associated with evaluating the precedential effect of decisions issued within them. For instance, when Congress consolidates challenges to agency decision making in a single federal circuit, is the decision that ultimately issues binding on just the deciding court, or is it binding nationwide? The lack of well-accepted answers to this and similar questions undermines the work of practitioners, courts, and Congress.

This Article uses these nonstandard processes and institutions to emphasize a rarely stated observation that will ensure a more careful and rational discussion of precedential rules in the future: the structure of the court system within which decisions are made-the structure of the appellate universe-is critical to defining the rules of binding precedent. After discussing this relationship between structure and precedent, this Article identifies, and argues in favor of, a Clear-Statement Approach to determining the precedential effect of decisions in non-standard appellate structures. This approach encourages Congress to pay attention to the precedential effect of its structural decisions, and highlights the degree to which Congress controls rules of precedent through its control over the structure of the federal judiciary.

~clf

July 26, 2010 in Federal Courts, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Sunday, July 25, 2010

Perry on Punitive Damages and the Exxon Valdez Litigation

Ronen Perry (University of Haifa) has posted Economic Loss, Punitive Damages, and the Exxon Valdez Litigation to SSRN.

Abstract:     
On March 24, 1989, an Exxon supertanker ran aground on Bligh Reef off the Alaskan coast, spilling millions of gallons of crude oil into Prince William Sound. The spill was probably the worst environmental disaster in American history, and sparked unusually extensive and complex litigation, as well as a vast academic literature. But the natural focus on concrete legal and procedural questions has left at least one abstract juridical puzzle unsolved - one that goes to the very foundation of tort liability.

The article uncovers a fundamental yet unnoticed inconsistency in American land-based and maritime tort law that surfaced following the unprecedented spill. The understandable emphasis on the award of punitive damages in recent literature has overshadowed an extremely important part of the Exxon Valdez litigation, namely the wholesale rejection of numerous claims for purely economic loss by the federal district court in the early 1990s. Thus, on the one hand, liability for economic loss was strictly limited under the renowned Robins Dry Dock v. Flint, leaving dozens of thousands of victims uncompensated. On the other hand, liability was expanded through an award of punitive damages to relatively few successful claimants. While these two components of the legal saga might not seem incompatible from a simple doctrinal perspective, they are inconsistent on a deeper - justificatory - level. This inconsistency transcends the Exxon Valdez litigation: It is a troubling trait of land-based and maritime tort law, which happened to surface when the Exxon oil submerged.

The first two parts introduce the clashing rules and their underlying rationales: Part I discusses the origins of the exclusionary (economic loss) rule, its scope of application, and most importantly - its main justifications in American case law and academic literature. Part II provides a short history of punitive damages, and discusses the common justifications for this private law anomaly. Next, Part III shows how the two rules were applied through the Exxon Valdez litigation, and explains why their in tandem application gives rise to incoherence on the justificatory level. After delineating the contours of the stark incongruity, the article proposes a conceptual framework for resolution. Generally, it holds that if courts believe liability must be expanded beyond the limits set by the exclusionary rule in order to obtain certain levels of deterrence and retribution, relaxing the exclusionary rule and allowing more victims to recover is a more defensible path than awarding punitive damages to the already compensated few. The former simply extends the application of two general principles of tort law, whereas the latter is based on problematic exceptions to these universal principles and generates severe distributive injustice.

Through this analysis, the article not only sheds new light on the particular proceedings and on the common law of torts, but also lays the foundation for a more holistic approach to legal reasoning: a transition from fragmentation to integration. “Can two walk together, except they be agreed?” the biblical prophet rhetorically inquires. The Exxon Valdez litigation shows that they can, but this article concludes that they should not.

RJE

July 25, 2010 in Mass Torts, Recent Scholarship | Permalink | Comments (0)