February 4, 2010
9/11 Workers Cases are in Settlement Talks
The New York Times reports that the lawsuits brought by the rescue and clean up workers might be near settlement, with 12 bellwether trials nearing their start in May in the Southern District of New York .
These are largely plaintiffs whose claims arose after the Victim Compensation Fund had closed, so liability and compensation has been a delicate political and judicial matter.
Gluck on States as Laboratories of Statutory Interpretation
Prof. Abbe Gluck (Columbia) has posted on SSRN her article Consensus Textualism: States as Laboratories of Statutory Interpretation, 119 Yale L.J. ___ (forthcoming May 2010). Here's the abstract:
This Article undertakes the first close study of statutory interpretation in several state courts of last resort, and illustrates that many central ideas in mainstream (federal) statutory interpretation, heretofore theorized only in the abstract, are actually in play in a number of states. It would doubtless surprise most academics and many judges to learn that, while academics have spent the past decade speculating about the “death of textualism,” or the utility of congressionally legislated rules of interpretation, or the capacity of judges on multimember courts to agree on a single set of interpretive rules, many state courts have been engaging in real-world experiments in precisely these areas. Several state courts have articulated single, governing interpretive regimes for all statutory questions. Methodological stare decisis - the practice of giving precedential effect to judicial statements about methodology - which is generally absent from federal statutory interpretation, appears to be a common feature of some states’ statutory caselaw. Every state legislature in the nation has enacted certain rules of interpretation, which some state courts are, in an unexpected twist, flouting. And, far from textualism being “dead,” what emerges from the state cases is a surprisingly strong theory of what I label “modified textualism” that, while sharing textualism’s core components, has broader potential appeal.
These state developments offer a powerful counter-paradigm to that of the U.S. Supreme Court, where persistent interpretive divides and arefusal to treat methodological statements as precedential have made interpretive consensus seem impossible. Indeed, methodology seems to be an entirely different animal in these state courts. In these states, it is possible for one judge to bind another judge’s methodological choice. And in fact, federal judges, too, readily assent to this conception of methodology in other areas of law, like contract interpretation. Yet these principles have failed to translate to the federal statutory interpretation context, without much explanation of why statutory interpretation should be any different. Contrary to long-held assumptions, these state examples illustrate that ex ante-defined methodological frameworks are possible; that they appear to have beneficial rule-of-law, coordination, and expressive effects; and that the “modified textualist” theory advanced by the Article - the interpretive theory around which the state courts reach their consensus - may enhance the prospects of achieving methodological consensus in even more courts.
February 3, 2010
Symeonides on Choice of Law
Professor Symeon C. Cymeonides (Willamette University College of Law) has posted "Choice of Law in the American Courts in 2009: Twenty-Third Annual Survey" on SSRN. It will be published in the American Journal of Comparative Law.
CAFA and the Home State Exception
(Cross posted at Prawfsblawg).
Even if you're not a civ pro buff you've probably heard of the Class Action Fairness Act
(CAFA). Enacted in 2005, CAFA allows some class actions based in state
law to proceed in federal court, even if they don't meet the normal
1332 diversity requirements. CAFA's
proponents touted the statute as a national remedy for class action
“abuses” in state courts in which state law procedural devices were
blamed for empowering litigants to bring “nationwide” class actions in
states with plaintiff-friendly law.
But what of genuinely local class actions? To protect such lawsuits, CAFA's drafters crafted some exceptions for local actions, one for actions where two thirds of the class are citizens of the state where the action was filed , and one for local controversies. CAFA's home state exception has the power to change class action practice, and this might not be a bad thing. A Seventh Circuit decision from last week, In re Sprint Nextel Corp., illustrates a few of the new issues.
plaintiffs, Sprint and Nextel customers from Kansas, accuse Sprint of
conspiring with other wireless companies to artificially inflate text
messaging rates. There was nothing special here about Kansas, and this
is the sort of action that pre-CAFA might have been brought as a
nationwide consumer class action. Here, however, the lawsuit has been
confined to residents of a single state, clearly with the hope that the
action would remain in Kansas state court.
This looks like a new trend in class action practice -- filing smaller state-wide class actions to avoid the CAFA net. At first blush this might look like a new breed of forum shopping to the tune of 50 separate class actions. How could that be efficient? This, however, assumes that the nationwide class action was an efficient method of litigation to begin with. The Supreme Court has already noted that nationwide class actions present serious choice of law issues, or manageability and predomination issues if the laws of many different states must be applied. The CAFA home state exception might be forcing some of the smaller, more local class actions that the plaintiff bar initially resisted in the Phillips Petroleum v. Shutts context.
While some plaintiffs' attorneys have retooled to bring nationwide class actions on a state by state basis, the defense bar has started to look to the nationwide nature of the class for their salvation. In Sprint Nextel, the defendants argued that the denominator in the two thirds number should be all possible plaintiffs in a nationwide class, rather than all members of the class in Kansas (remember, not Kansas subscribers are Kansas citizens). The Seventh Circuit rejected this argument, but the reversal of state and national focus among plaintiffs and defendants is interesting to watch.
The Seventh Circuit remanded the case to the district court to allow the plaintiff class a chance to prove the Kansas citizenship of two thirds of the class. But prove their citizenship the plaintiffs must -- guesswork flowing from the class definition won't cut it.
This illustrates a final observation about the CAFA home state exception: more exceptions equal more litigation. And like other threshold matters in class action practice, determining the citizenship of the class requires discovery and findings of fact. In this new breed of local/nationwide class actions CAFA's minimum diversity requirement turns out to demand more work of the courts, and not less.
February 2, 2010
Decision of Interest on the Class Action Fairness Act (CAFA)
BNA's U.S. Law Week reports today on the Fourth Circuit's recent decision in Ferrell v. Express Check Advance, No. 09-2401, ___ F.3d ___, 2010 WL 60903, 2010 U.S. App. LEXIS 424 (Jan. 8, 2010).
The panel held that a limited liability company (LLC) is an "unincorporated association" for purposes of the Class Action Fairness Act (CAFA) and, therefore, "shall be deemed to be a citizen of the State where it has its principal place of business (PPB) and the State under whose laws it is organized." 28 U.S.C. § 1332(d)(10). It then held that Express Check had its PPB in South Carolina. The panel used a "place of operations" test for determining PPB, although it recognized that the U.S. Supreme Court was currently grappling with the PPB issue in the recently-argued case of Hertz Corp. v. Friend (covered here, here, and here).
Accordingly, the Fourth Circuit found that minimal diversity was lacking because the plaintiff class was exclusively South Carolina citizens, and the defendant Express Check was a South Carolina citizen as well. It reached this conclusion even though Express Check, having been organized under Tennessee law, was also a Tennessee citizen. Treatment of dual-citizen litigants for purposes of CAFA's minimal-diversity requirement appears to be an unresolved question. See, e.g., In re Hannaford Bros. Co. Customer Data Security Breach Litigation, 592 F. Supp. 2d 146, 147 (D. Me. 2008) (describing "some uncertainty under CAFA whether a corporate defendant with dual citizenship . . . creates minimal diversity with a plaintiff who is a citizen of one of those states). Under the approach used by some lower federal courts (but not the Fourth Circuit), Express Check's Tennessee citizenship would have created minimal diversity with the South Carolina plaintiff class despite the fact that Express Check was also a citizen of South Carolina.
The Supreme Court has yet to resolve this question. But it has acknowledged the possibility that a litigant's multiple citizenship could mean that minimal diversity is satisfied even when all adverse parties are also citizens of the same state (although it stated that this was "far from clear"). Grupo Dataflux v. Atlas Global Group, L.P., 541 U.S. 567, 577 n.6 (2004) ("It is possible, though far from clear, that one can have opposing parties in a two-party case who are co-citizens, and yet have minimal Article III jurisdiction because of the multiple citizenship of one of the parties.")
February 1, 2010
Faculty Hiring Announcement
Readers may be interested in the following announcement from Drake Law School, which is seeking to fill curricular needs in (among other areas) civil procedure and federal jurisdiction:
DRAKE LAW SCHOOL may have one or more tenure-track or visiting positions available in the 2010-11 academic year. We are interested in both entry-level and experienced candidates. Our curricular needs include Health Law (and related courses), Civil Procedure, Federal Jurisdiction, and Constitutional Law. Drake is an equal-opportunity employer and applicants who will contribute to the diversity of the faculty are particularly encouraged to apply. We seek candidates with J.D. degrees from accredited schools, who exhibit the ability to produce excellent scholarship and become outstanding teachers.
Contact: Professor Jerry L. Anderson,
Chair, Faculty Recruitment Committee,
Drake Law School,
2507 University Ave., Des Moines, IA 50311
Lande on Early Case Handling and Private Dispute Resolution
John Lande has posted The Movement Toward Early Case Handling in Courts and Private Dispute Resolution to SSRN.
This article identifies early case handling (ECH) as an important general phenomenon in dispute system design theory and practice, catalogs the major ECH processes, and urges practitioners and policymakers to encourage use of and experimentation with ECH processes when appropriate.
The key element of ECH is that people intentionally exercise responsibility for handling the case from the outset. ECH processes in courts include early case management procedures, differentiated case management systems, early neutral evaluation, and other early alternative dispute resolution (ADR) processes. ECH in the private sector includes ADR pledges and contract clauses, early case assessment and ADR screening protocols, settlement counsel, and Collaborative and Cooperative practice.
ECH processes offer many potential benefits for parties, lawyers, courts, and society. Earlier resolution offers the potential of efficiency resulting from conscious efforts to streamline the process, reducing unproductive efforts such as excessive and unfocused discovery. Earlier resolution should generally reduce indirect costs of prolonged disputing, such as opportunity costs and damage to relationships and reputations. ECH processes may not be appropriate in some situations. When used well and in appropriate cases, there should be few or no disadvantages.
ECH processes are not uniform “off-the-shelf” products that can simply be “plugged into” dispute systems on the flawed assumption that people will simply follow directions to use them as intended. Instead, for ECH processes to work properly, system designers need to assess the motivations of the system participants and tailor processes so that people will be motivated to use them effectively.