Civil Procedure & Federal Courts Blog

Harvard Law Review Tribute to Benjamin Kaplan

The current issue of the Harvard Law Review (Vol. 124, No. 6) is dedicated to Harvard Professor Emeritus Benjamin Kaplan. In Memoriam: Benjamin Kaplan features tributes authored by Justice Stephen Breyer, Justice Raya Dreben, Justice Ruth Bader Ginsburg, Marjorie Heins, Arthur Miller, Martha Minow, and Lloyd Weinreb.

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Stand in the Place Where You Live?: DDC Opinion Raises Questions About Whether Prospective Intervenors in D.C. Circuit Must Establish Article III Standing

Should prospective intervenors have to establish standing before intervening? After the Supreme Court amended Federal Rule of Civil Procedure 24(a)(2) in 1966, federal courts largely agreed for the next 25 years or so that the answer was "no." See Carl Tobias, Standing to Intervene, 1991 Wis. L. Rev. 415 (1991). But thereafter, "[a]n increasing number of circuit and district courts...demanded or suggested that [prospective intervenors] have an 'interest' greater than, or equal to, that necessary for standing or comply with certain standing requirements." Id. In its 1986 opinion in Diamond v. Charles, 476 U.S. 54 (1986), the Supreme Court noted this circuit split, pointing out that "[t]he Courts of Appeals have reached varying conclusions as to whether a party seeking to intervene as of right must himself possess standing." Ultimately, however, the Court concluded, "We need not decide today whether a party seeking to intervene before a District Court must satisfy not only the requirements of Rule 24(a)(2), but also the requirements of Art. III."

In the wake of Diamond v. Charles, the circuit split persists. And for years, the D.C. Circuit was on the side of the split requiring prospective intervenors to establish standing. But did that change with the D.C. Circuit's opinion in Roeder v. Islamic Republic of Iran, 333 F.3d 228 (D.C. Cir. 2003)? According to Judge Roberts of the United States District Court for the District of Columbia in Akiachak Native Community v. U.S. Dept. of Interior, 584 F.Supp.2d 1 (D.D.C. 2008), the answer is "yes." But according to Judge Kennedy of the same court in his opinion last week in Center for Biological Diversity v. U.S. E.P.A., 2011 WL 1346965 (D.D.C. 2011), the answer is "no." So, who is right, and which position makes more sense? Let's go to the scorecards!

Before the D.C. Circuit's opinion in Roeder, it was clear that the court required prospective intervenors to establish standing. For instance, in its 1994 opinion in Building and Const. Trades Dept., AFL-CIO v. Reich, 40 F.3d 1275 (D.C. Cir. 1994), the D.C. Circuit noted that "we have held that because an intervenor participates on equal footing with the original parties to a suit, a movant for leave to intervene under Rule 24(a)(2) must satisfy the same Article III standing requirements as original parties."

But fast forward 9 years, and you have the D.C. Circuit's opinion in Roeder. In Roeder, Americans taken hostage during the 1979 Iran Hostage Crisis brought a class action on behalf of themselves, their spouses, and their children, against the Islamic Republic of Iran and its Ministry of Foreign Affairs. The United States District Court for the District of Columbia eventually

entered a default judgment against Iran on liability and scheduled a date for trial on the damages. On the eve of trial for damages, however, the State Department, which had only recently become aware of the action, attempted to intervene, and to have the judgment on liability vacated and the suit dismissed. For the State Department, resolution of Roeder in the executive's favor (which, ironically, now meant in Iran's favor) was essential, not merely to protect Iran's frozen assets, but also to prevent the potential disregard of the Algiers Accords. W. Michael Reisman & Monica Hakimi, 2001 Hugo Black Lecture: Illusion and Reality in the Compensation of Victims of International Terrorism, 54 Ala. L. Rev. 561, 576 (2003).

After a handful of further zigs and zags in the case, the court dismissed the action, prompting the plaintiffs to appeal, claiming, inter alia, that the State Department lacked standing to intervene in the action. In rejecting this argument, the D.C. Circuit held that

Although the government...satisfied the requirements of Rule 24(a), decisions of this court hold an intervenor must also establish its standing under Article III of the Constitution....The court's opinion in Rio Grande Pipeline Co. v. FERC, 178 F.3d 533, 538 (D.C. Cir. 1999), identified a split in the circuits on the subject of intervenor standing.... Still, there is no need to dwell on the issues thus raised. With respect to intervention as of right in the district court, the matter of standing may be purely academic. One court has rightly pointed out that any person who satisfies Rule 24(a) will also meet Article III's standing requirement. Sokaogon Chippewa Cmty. v. Babbitt, 214 F.3d 941, 946 (7th Cir. 2000). So here. The United States established that it was in imminent danger of suffering injury in fact - a breach of its obligations under the Accords. There was a "causal connection between the injury and the conduct complained of" and the injury was capable of judicial redress....The United States therefore had standing as a defendant-intervenor.

In his aforementioned opinion in Akiachak, Judge Roberts found that the State of Alaska satisfied Rule 24(a) and then cited Roeder for the proposition that "[t]he standing inquiry is repetitive in the case of intervention as of right because an intervenor who satisfies Rule 24(a) will also have Article III standing." In other words, according to Judge Roberts, when a prospective intervenor satisfies Rule 24(a), it automatically has Article III standing. 

But last week, Judge Kennedy rejected this conclusion in his opinion in Center for Biological Diversity for three reasons:

First, the Roeder court itself engaged in a standing inquiry, albeit a very brief one....Second, as a three-judge panel, the Roeder court had no authority to abrogate the clear rule announced in prior three-judge panel cases...Third and finally, subsequent decisions of the D.C. Circuit and this district flatly state that putative intervenors must meet Article III's standing requirements.

Judge Kennedy is correct that subsequent decisions in the D.C. Circuit have held that prospective intervenors must meet Article III's standing requirements, but none of them had held that a prospective intervenor satisfying Rule 24(a) failed to establish standing. And Judge Kennedy did not reach such a conclusion in Center for Biological Diversity, instead finding that the prospective intervenors before him lacked Article III standing, meaning that he did not even need to decide whether they satisfied Rule 24(a). So, can prospective intervenors in the D.C. Circuit who satisfy Rule 24(a) fail to meet Article III's standing requirements? I don't know.

One seeming solution to this problem would be to have courts apply Rule 24(a) with an eye toward the Article III standing analysis, thus harmonizing the two doctrines. In fact, that is exactly the approach suggested by Professor Tobias in the article I cited in the introduction to this post.  According to Professor Tobias, courts should rarely require prospective intervenors to establish standing, but the standing analysis should inform how courts decide whether there can be intervention under Rule 24(a). Under Professor Tobias' proposed intervention analysis,

in considering intervention requests courts should treat as paramount applicants' potential contributions to issue resolution.

The essential intervention inquiry should be whether an applicant promises to help resolve issues that warrant consideration before the court makes a decision on the merits of the dispute. This may be ascertained by examining numerous relevant factors that comprise particular factual contexts....

The most significant consideration is the potential quality of the applicant's proposed participation. Is the applicant likely to provide expertise, information, or legal or policy perspectives that contribute to a court's understanding of questions already in issue? Correspondingly, will the applicant raise, and help resolve, new questions that the judge should consider?....

A court may want to analyze whether, and if so how much, the applicant's involvement promises to improve its substantive decisionmaking. For instance, will the potential intervenor help give specificity to a statutory standard that asks which agency choice will best effectuate the "public interest"? Correspondingly, is the applicant likely to provide facts that other participants do not or cannot, thereby increasing the court's understanding of how challenged governmental practices allegedly injure citizens or violate pertinent constitutional commands?....

Once the court evaluates what the applicant will offer, it should permit intervention by an applicant that clearly will contribute to issue resolution, unless the involvement will impose undue costs on the judicial system or the original parties, and, even then, the judge should seriously consider allowing intervention and conditioning it. If the court is less certain that an applicant will facilitate issue resolution, the judge should estimate as accurately as possible the value of the applicant's projected participation and attempt to ascertain the disadvantages, especially in terms of expenditures of time, money and effort, that intervention will occasion for the civil justice system and the existing litigants.

An important consideration in many cases will be how much the intervention is likely to delay the dispute's resolution, potentially undermining judicial economy and prejudicing parties. The court might want to consult the nature of the applicant's involvement, what form the participation will assume, at which stage of the litigation the involvement will occur, and how much it promises to complicate the lawsuit. For example, will such a substantial amount of data be tendered or the information be so tangentially related to the central questions in dispute that the material inundates the judge, obfuscating, rather than clarifying, the issues and protracting the litigation? 

The court then should informally balance the benefits and disadvantages of granting intervention. This task is problematic, principally because it is virtually impossible to assign values to the relevant considerations in a way that permits refined comparison....

The problems, especially the difficulty of making the assessments with exacting precision, mean that in situations where the advantages and disadvantages seem relatively comparable, and even in some circumstances when intervention is more clearly warranted, the court should consider the possibility of conditioning intervention. The judge, in close cases thus may want to grant intervention motions rather flexibly but adjust the participation permitted to factors, such as the court's perceptions of its need for the intervenors' decisional input, the potential quality of contributions, and the time required and available to treat the involvement.

This approach makes a lot more sense to me than courts either finding that the  Rule 24(a) analysis as it currently exists is coextensive with the Article III standing analysis or conducting a two-step analysis in which the former analysis tells us nothing about the latter analysis. And, if you want to see an example of Professor Tobias' suggested approach in action and some further justifications and explanations of his approach, you should check out his terrific article, which I have only briefly excerpted here.

-Colin Miller

Popper on the Gulf Oil Spill and Caps on Liability

Andrew F. Popper (American University) has posted Capping Incentives, Capping Innovation, Courting Disaster: The Gulf Oil Spill and Arbitrary Limits on Civil Liability to SSRN.

Abstract:      
Limiting liability by establishing an arbitrary cap on civil damages is bad public policy. Caps are antithetical to the interests of consumers and at odds with the national interest in creating incentives for better and safer products. Whether the caps are on non-economic loss, punitive damages, or set for specific activity, they undermine the civil justice system, deceiving juries and denying just and reasonable compensation for victims in a broad range of fields. 

This paper Article postulates that capped liability on damages for offshore oil spills may well have been an instrumental factor contributing to the recent Deepwater Horizon catastrophe in the Gulf of Mexico. More broadly, it argues that caps on damages undermine the deterrent effect of tort liability and fail to achieve economically efficient and socially just results.

RJE

SCOTUS Decision in Virginia Office for Protection and Advocacy v. Stewart

Today the Supreme Court decided Virginia Office for Protection and Advocacy v. Stewart (No. 09-529). Per Justice Scalia’s majority opinion (joined by Justices Kennedy, Thomas, Ginsburg, Breyer, and Sotomayor), the case “consider[s] whether Ex parte Young, 209 U. S. 123 (1908), allows a federal court to hear a lawsuit for prospective relief against state officials brought by another agency of the same State.” The answer:

Although we have never encountered such a suit before, we are satisfied that entertaining VOPA's [the state agency’s] action is consistent with our precedents and does not offend the distinctive interests protected by sovereign immunity.

 In conclusion, Justice Scalia writes:

[W]e are mindful of the central role autonomous States play in our federal system, and wary of approving new encroachments on their sovereignty. But we conclude no such encroachment is occasioned by straightforwardly applying Ex parte Young to allow this suit. It was Virginia law that created VOPA and gave it the power to sue state officials. In that circumstance, the Eleventh Amendment presents no obstacle to VOPA’s ability to invoke federal jurisdiction on the same terms as any other litigant.

Justice Kennedy writes a concurring opinion joined by Justice Thomas. Chief Justice Roberts writes a dissenting opinion joined by Justice Alito. Justice Kagan took no part.

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So Say We All?: Northern District of Indiana Opinion Addresses Circuit Split Over Whether Each Defendant Must Submit Written Documentation Consenting to Removal

Earlier this month, I posted an entry about the circuit split over how 28 U.S.C. Section 1446(b)'s 30 day period for removal applies in actions with multiple defendants served on different days. In other words, the post dealt with when defendants can move to remove in multiple defendant litigation. In today's post, I will discuss the recent opinion of the United States District Court for the Northern District of Indiana in Boruff v. Transervice, Inc., 2011 WL 1296675 (N.D.Ind. 2011), which discussed the circuit split over whether each defendant in multiple defendant litigation must submit written documentation indicating that it consents to removal or whether one defendant's notice of removal can state that other defendant(s) consent to removal. In other words, this post will deal with how defendants can remove in multiple defendant litigation. 

In Boruff, James Boruff filed a complaint in state court, alleging that he was injured as a result of the mechanical failure of a trailer hitch crank support on a vehicle he was operating, which was owned or leased by and/or maintained under the direction of defendants Walgreen Co. and/or Transervice, Inc. Walgreen was served with a summons and the complaint on July 13, 2010, and Transervice was served the next day. On August 12, 2010, Walgreen filed a notice of removal with the United States District Court for the Northern District of Indiana. This notice of removal represented that "Defendant, Transervice, Inc. consents to the removal." Transervice did not itself file any paper indicating that it consented to removal.

Boruff thereafter moved to remand the action to state court, claiming that the defendants failed to comply with 28 U.S.C. Section 1446(a)'s requirement that all defendants consent to removal. Specifically, Section 1446(a) provides that

A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action.

In addressing this motion, the court noted that there is a circuit split on the issue. For instance, in Harper v. AutoAlliance Intern., Inc., 392 F.3d 195 (6th Cir. 2004), the Sixth Circuit found no problem with a defendant named Kelly not filing a pleading consenting to removal because the attorney for the three other defendants filed a notice of removal indicating that Kelly consented to removal. According to the court,

Rule 11 merely requires any pleading to be signed "by at least one attorney of record" and states that by presenting such pleading the attorney is certifying that, inter alia, "the allegations and other factual contentions have evidentiary support."... Thus, the attorney for AutoAlliance, AAI and Childress was bound by Rule 11 when she represented to the district court that Kelly consented to the removal. Nothing in Rule 11, however, required Kelly or his attorney to submit a pleading, written motion, or other paper directly expressing that concurrence or prohibited counsel for the other defendants from making such a representation on Kelly's behalf. Had counsel for AutoAlliance, AAI and Childress misrepresented Kelly's concurrence in the removal, no doubt Kelly would have brought this misrepresentation to the court's attention and it would have been within the district court's power to impose appropriate sanctions, including a remand to state court.

Later, in Proctor v. Vishay Intertechnology Inc., 584 F.3d 1208 (9th Cir. 2009) (which Adam Steinman posted about on this blog), the Ninth Circuit

adopt[ed] the Sixth Circuit's position as fully sufficient to implement the unanimous joinder rule. The so-called "rule of unanimity," announced by the Supreme Court in Chicago, Rock Island, & Pacific Railway Co. v. Martin, 178 U.S. 245, 248...(1900), as an interpretation of a predecessor removal statute, merely says that "all the defendants must join in the application" for removal....Chicago does not specify how defendants must join in removal. Nor does any federal rule or statute specifically prescribe a particular manner in which codefendants' joinder must be expressed. In the absence of any rule governing joinder in removal, we turn to the general principles that govern procedures for removal and for attorney representations to district courts generally. Under 28 U.S.C. § 1446(a), "[a] defendant or defendants desiring to remove any civil action" must file a "notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure." Rule 11, in turn, provides that "[e]very pleading, written motion, and other paper must be signed by at least one attorney of record,"...and that "[b]y presenting to the court a pleading, written motion, or other paper-whether by signing, filing, submitting, or later advocating it-an attorney...certifies that...the factual contentions [therein] have evidentiary support...."

Applying these general principles, we conclude that the filing of a notice of removal can be effective without individual consent documents on behalf of each defendant. One defendant's timely removal notice containing an averment of the other defendants' consent and signed by an attorney of record is sufficient. Ernst & Young submitted such an averment under threat of sanctions pursuant to Rule 11; the other co-defendants were notified of the removal notice and had an opportunity to object to it. These two considerations-the availability of sanctions and of objection-mitigate concerns that one defendant might falsely state the other defendants' consent, or that one defendant might game the system by silently allowing another to remove and, if the federal forum proves disadvantageous, belatedly object that he had not consented.

Conversely, in Getty Oil Corp. a Div. of Texaco, Inc. v. Insurance Co. of North America, 841 F.2d 1254 (5th Cir. 1988), the Fifth Circuit held that

while it may be true that consent to removal is all that is required under section 1446, a defendant must do so itself. This does not mean that each defendant must sign the original petition for removal, but there must be some timely filed written indication from each served defendant, or from some person or entity purporting to formally act on its behalf in this respect and to have authority to do so, that it has actually consented to such action. Otherwise, there would be nothing on the record to "bind" the allegedly consenting defendant. 

Later, in Pritchett v. Cottrell, Inc., 512 F.3d 1057 (8th Cir. 2008), the Eighth Circuit agreed with the Fifth Circuit, citing Getty for the proposition that

There must..."be some timely filed written indication from each served defendant," or from some person with authority to act on the defendant's behalf, indicating that the defendant "has actually consented" to the removal.

Most importantly for the Northern District of Indiana, the Seventh Circuit has agreed with the Fifth and Eighth Circuits, relying upon Getty in Roe v. O'Donohue, 38 F.3d 298 (7th Cir. 1994), to conclude that

A petition for removal fails unless all defendants join it.....To "join" a motion is to support it in writing, which the other defendants here did not.

Therefore, the Northern District of Indiana held that Walgreen's representation in its notice of removal

that "Defendant, Transervice, Inc. consents to the removal"...[wa]s insufficient to meet the Seventh Circuit's requirement of express, written consent.

So, who has the better of the argument? I think that the answer is the Fifth, Seventh, and  Eighth Circuits. Why? Both the Sixth and Ninth Circuit focused upon the fact that Federal Rule of Civil Procedure 11 merely requires any pleading to be signed "by at least one attorney of record," meaning (1) that not all attorneys need to sign notices of removal in multiple defendant litigation; and (2) that an attorney representing that other defendants consented to the removal would be subject to sanctions if the other defendants did not in fact consent.

Here, however, are some problems I see with this analysis. First, what constitutes consent by another defendant? If another defendant indicates that it does not object to removal, is that sufficient? Would it be enough for the other defendant to say that it consents to removal? Or, would the other defendant specifically have to consent to defense counsel representing in the notice of removal that the other defendant consents to removal? Sure, if the defense counsel filing the notice of removal creates the other defendant's consent out of cloth, he would be subject to sanctions under Rule 11, but I imagine that most cases would involve questions about whether other defendants actually consented and could lead to complicated sanctioning and remand decisions. It seems that the only way to avoid these problems would be to have other defendants put their consents in writing, but, if they are putting their consents in writing (and filing them), they are complying with precedent in the Fifth, Seventh, and  Eighth Circuits.

Of course, this also prompts the question of whether non-filing defendants are bound by notices of removal in the Sixth and Ninth Circuits. Assume that defendant A gets defendant B's consent to remove and indicates as much in its notice of removal. Then, assume that defendant B gets cold feet and wants the action back in state court. Is defendant B bound by the notice of removal? I don't know. Is there any other context in which attorneys can file pleadings, written motions, or other papers that bind parties other than the party or parties that the attorney represents?

One thing that I think is clearer is that defendant B and/or his counsel could not be sanctioned for defendant A's notice of removal in this case. The Advisory Committee's Note to the 1983 Amendment to Federal Rule of Civil Procedure 11 provides that "If the duty imposed by the rule is violated, the court should have the discretion to impose sanctions on either the attorney, the party the signing attorney represents, or both, or on an unrepresented party who signed the pleading, and the new rule so provides."

In this example, the attorney for defendant A does not represent defendant B, so defendant B couldn't be sanctioned for defendant A's notice of removal, and the attorney for defendant B doesn't file anything, so presumably neither could be sanctioned. Or would the attorney for defendant A "represent" defendant B in filing the notice of removal? And could defendant B and/or his attorney be sanctioned for filing a motion to remand after orally representing to the attorney for defendant A that they consented to removal? Again, I don't know.

And, how about this: Let's say (1) that there is no question that defendant B consented to the removal; and (2) that there is no question that the removal was improper (e.g., the amount in controversy clearly did not exceed $75,000). Again, I see no way in which defendant B and/or his attorney could be subject to sanctions under Rule 11 because they never filed anything. And would they be responsible for costs under 28 U.S.C. Section 1447(c)? Again, I don't know.

But if they couldn't be sanctioned, I see sort of a reverse prisoner's dilemma situation possibly developing in multiple defendant removal cases. All defendants want to remove, and it would be in all of their best interests to remove, but none of them want to put their necks on the line and file the notice of removal. Instead, each asks the others to file the notice of removal and represent that they also consent to removal as the 30 day clock ticks.ticks.ticks.

Okay, so maybe this scenario wouldn't arise very often, but it seems to me that the Sixth and Ninth Circuits are trying to make things easier by not requiring all defendants to file writings indicating that they consent to removal. And, I think that this post reveals that such a conclusion actually complicates the issue more and creates mixed motives.  Therefore, I think that a clear rule requiring all defendants to indicate in writing that they consent to removal is the better practice.

-Colin Miller

Cunningham on AT&T Mobility v. Concepcion

We covered earlier AT&T Mobility v. Concepcion, which was argued in November and is still pending in the Supreme Court. The case presents the issue:

Whether the Federal Arbitration Act preempts States from conditioning the enforcement of an arbitration agreement on the availability of particular procedures—here, class-wide arbitration—when those procedures are not necessary to ensure that the parties to the arbitration agreement are able to vindicate their claims.

Professor Lawrence Cunningham (George Washington) has some commentary on the case over at Concurring Opinions, in a post titled Supreme Court Arbitration Rhetoric v. Reality and AT&T.

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