Thursday, July 14, 2011

HBO Documentary To Follow Five Years in Environmental Case

An HBO documentary, Mann v. Ford, will air Monday, July 18, 2011, at 9:00 p.m. Eastern time.  It follows a mass action filed in 2006 arising out of the alleged negligent toxic poisoning of the Ramapough Mountain Indians’ land from the Ford assembly plant in Mahwah, N.J. 

A synopsis of the film is here http://www.hbo.com/#/documentaries/mann-v-ford/synopsis.html on the HBO web site.

--PHM

July 14, 2011 | Permalink | Comments (0)

Zimmerman on Agency-Based Aggregate Settlements

Adam Zimmerman (St. John's University School of Law) has a great post over at the Reg Blog on procedural protections in aggregate agency-based settlements.  From the post:

"agency settlements may frustrate court access just like class actions. Agency settlements may “crowd out” private litigation by exhausting the limited funds of a defendant, requiring that the claimants waive rights to sue, or simply foreclosing class action litigation. In addition, like private class counsel, agencies may have conflicts with the victims they compensate. Agencies may succumb to capture by the businesses they regulate, seek quick settlements to resolve embarrassing missteps in regulatory policy, or lack incentives and input to address victims’ interests."

RJE

July 14, 2011 in Class Actions, Federal Courts | Permalink | Comments (0)

Wednesday, July 13, 2011

Koppel on Shady Grove

Professor Glenn Koppel (Western State University) has posted on SSRN a draft of his article, The Fruits of Shady Grove: Seeing the Forest for the Trees, which is forthcoming in the Akron Law Review.  Here is the abstract:

In piecing together the fragments of the Supreme Court’s 2010 decision in Shady Grove Orthopedic Associates v. Allstate Insurance Company, the Court’s most extensive treatment of, “Erie/Hanna,” issues since Gasperini unsettled the doctrinal waters 14 years earlier, this symposium article finds, in Justice Stevens’ pivotal concurrence that lies at the Court’s center between the plurality and the dissent, a principled Middle Way to guide the Court in calibrating the balance of power in judicial federalism between the federal courts’ interest in procedural uniformity and the states’ interest in uniform intra-state enforcement of their substantive policies. Shady Grove augurs a return to a modified formalist approach to interpreting procedural rules that recognizes a normative difference between, “procedure,” and, “substance,” and that accords considerable, but not determinative, weight to the text of rules to achieve greater predictability in the uniform application of the Federal Rules.

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July 13, 2011 in Federal Courts, Recent Scholarship | Permalink | Comments (0)

Senator Grassley Asks the ABA to Answer 31 Detailed Questions By July 25

            Chuck Grassley (R-Iowa), Ranking Member of the Judiciary Committee, sent a letter on July 11 to ABA President Stephen Zack “to express concern after reading a June 9, 2011 article in The Chronicle of Higher Education that reported that the American Bar Association (ABA) 'was found to be out of compliance with 17 regulations, including the need to consider student-loan default rates in assessing programs.'”  He continued: 

My concern is that the ABA, which has the power to accredit law schools, was barely granted renewed recognition by the U.S. Department of Education’s accreditation experts. Moreover, in the eyes of the National Advisory Committee on Institutional Quality and Integrity, the ABA appears to be doing little to assess student-loan default rates in its law school accreditation process. 

The New York Times also addressed similar issues in an April 30, 2011 article regarding what many law students interviewed by the New York Times referred to as a “bait and switch” practice regarding merit-based scholarships.  According to the New York Times, ABA accredited law schools “offer more scholarships than [they] plan to renew[.]”  One result of this practice is that many law students lose their merit-based scholarships after their first year because they failed to maintain a certain grade-point average.  The New York Times articles raised concerns that some schools appear to set their grading curves in a manner which results in a large number of students losing their merit-based scholarships.

(Footnotes omitted.)

            Senator Grassley then requested that the ABA provide written answers to 31 questions by July 25, 2011.  The questions relate mainly to student financial issues such as student scholarships, loan repayment education programs, and programs to prevent default on student loans.            

            Some of the questions, though, relate to the number of law schools that the ABA has accredited in the last 20 years, as well as the qualifications of the accreditation committee members. 

            Another article about Senator Grassley’s letter appears in the National Law Journal today.

--PHM

July 13, 2011 in Current Affairs, In the News | Permalink | Comments (0)

Tuesday, July 12, 2011

California Supreme Court Holds California Confidentiality of Medical Information Act Is Not Preempted By Federal Fair Credit Reporting Act

            Plaintiff Brown and his two children were patients of dentist Reinholds.  Dr. Reinholds billed Brown $600 for a crown that Brown claimed he never received.  Brown refused to pay the bill, and Reinholds referred the debt to a collection agency (defendant Mortensen). 

            The story continues: “Over the next two years, Mortensen repeatedly disclosed the contents of Brown's and his children's dental charts to the three major national consumer reporting agencies, Experian, Equifax, and Trans Union. Additionally, Mortensen disclosed to the agencies the Browns' names, Social Security numbers, dates of birth, addresses, telephone numbers, and Brown's and his children's entire dental history with Dr. Reinholds, including alleged dental treatments.”

       Brown and his children sued Mortensen for violation of the California Confidentiality of Medical Information Act (Civ.Code, § 56 et seq.), which 

prohibits the unauthorized dissemination of individually identifiable medical information and provides for compensatory damages and other remedies. . . . The trial court sustained a demurrer with leave to amend and then, when Brown elected not to amend, dismissed the action. 

The Court of Appeal affirmed. While it rejected the trial court's conclusion that Brown's Confidentiality Act claims were impermissibly vague, it accepted Mortensen's alternative argument that the FCRA preempted them. The Court of Appeal opined that all state law claims arising from the furnishing of information to consumer reporting agencies are preempted by the FCRA. . . .  Reasoning that Mortensen had acted as a furnisher of credit information when disclosing the Browns' medical information to various credit agencies, the court affirmed dismissal.

            The California Supreme Court reversed, holding that the FCRA did not preempt the California cause of action.  Brown v. Mortensen, --- P.3d ----, 51 Cal.4th 1052, 2011 WL 2409913.  

            The Consumer Credit Reporting Reform Act of 1996 amended the FCRA by imposing affirmative duties on entities that furnish information to consumer reporting agencies, and by adding a state-law preemption clause, 15 U.S.C. § 1681t(b)(1)(F): “(b) No requirement or prohibition may be imposed under the laws of any State—[¶] (1) with respect to any subject matter regulated under—[¶] ... [¶] (F) section 1681s–2 of this title, relating to the responsibilities of persons who furnish information to consumer reporting agencies . . . .”

            Following four federal district courts, the California Supreme Court held that the preemption of state law was limited to the two specific areas “regulated under . . . section 1681s-2,” which are “what a furnisher must do to ensure the information it provides is accurate (a subject covered in exhaustive detail by the many subparts of § 1681s–2(a)), and what a furnisher must do upon receiving official notice that the accuracy or completeness of its information is in dispute.”  It further stated, “Our own inspection of the overall statutory scheme and the pertinent legislative history reveals evidence suggesting Congress never intended in section 1681t(b)(1)(F) to preempt state laws regulating medical privacy and thereby to relieve entities otherwise obligated to maintain confidentiality of the duty to do so when reporting credit information.”

            Thus, the claims for damages under the California Confidentiality Act, “having as their gravamen issues neither of accuracy nor of credit dispute resolution, do not involve the same subject matter as section 1681s–2 and are not preempted.”

            The article in the online journal amednews.com (American Medical News)  says Mortensen is considering petitioning SCOTUS for review.

--PHM

July 12, 2011 in Recent Decisions, State Courts | Permalink | Comments (0)

Toyota Shareholder Judge Declines to Exercise Supplemental Jurisdiction

In the Toyota shareholder litigation, the plaintiffs have had trouble maintaining a sizable lawsuit in federal court.  Last year, the Supreme Court ruled that plaintiffs do not have standing to bring federal securities law claims for shares that were bought on a foreign exchange.  (Morrison v. National Australia Bank).  The Toyota plaintiffs responded to this development by amending their complaint to add claims under Japanese law.  The district judge hearing the case, however, declined to exercise supplemental jurisdiction to hear these claims because they would "substantially predominate" over the remaining federal claims in the case.

The National Law Journal has further coverage here.

RJE

July 12, 2011 in Class Actions, Federal Courts, In the News | Permalink | Comments (0)

Monday, July 11, 2011

Another Decision of Interest on the Alien Tort Statute: Flomo v. Firestone (7th Cir.)

Hot on the heels of last week’s D.C. Circuit decision on corporate liability under the Alien Tort Statute, the Seventh Circuit issued a decision today in Flomo v. Firestone Natural Rubber Co. (No. 10-3675). The opinion by Judge Richard Posner begins:

This suit under the Alien Tort Statute, 28 U.S.C. § 1350, pits 23 Liberian children against the Firestone Natural Rubber Company, which operates a 118,000-acre rubber plantation in Liberia through a subsidiary; various Firestone affiliates and officers were also joined as defendants. . . . The plaintiffs charge Firestone with utilizing hazardous child labor on the plantation in violation of customary international law. The Alien Tort Statute confers on the federal courts jurisdiction over “any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” The principal issues presented by the appeal are whether a corporation or any other entity that is not a natural person (the defendant is a limited liability company rather than a conventional business corporation) can be liable under the Alien Tort Statute, and, if so, whether the evidence presented by the plaintiffs created a triable issue of whether the defendant has violated “customary international law.”

--A

(Hat Tip: Howard Bashman)

July 11, 2011 in Federal Courts, International/Comparative Law, Recent Decisions | Permalink | Comments (0)

Thoughts on the Federal Judiciary Committee’s study of 12(b)(6) motions after Iqbal

            As most of you know, the FJC released its study comparing 12(b)(6) motions in 2006 and 2010 in March 2011.  Overall, the study takes the view that the empirical effect of Iqbal has been modest.  As I mentioned in a previous post, some are emphasizing the finding that the FJC found no increase in the rate of grants of motions without leave to amend

            I have an updated quantitative study coming out in the University of Richmond Law Review in the fall.  My study concludes that Iqbal has had a significant effect not only on the rate of granting 12(b)(6) motions with leave to amend (a finding shared by the FJC), but also without leave to amend.  Another finding of my updated study is that a case is 1.74 times more likely to be entirely dismissed upon the granting of a 12(b)(6) motion under Iqbal than under Conley.  The FJC reached a different result on a similar question.     

            Richmond accepted this article before the FJC results came out, and I am reworking it over the summer to incorporate a review of the FJC results and a comparison with my own.  The draft of the Richmond article on my SSRN page does not contain these revisions yet.  I welcome all comments!

            I wanted to limit the length of this post.  Please contact me for a fuller version of these preliminary remarks.             

            1.  Database inclusions and exclusions.  Here are the major differences between the FJC's database and the database for my updated study:

Table 1

FJC Study and Hatamyar Study Database Parameters

Database parameter

FJC

Hatamyar

Time period

Two separate six-month periods (January to June 2006 and January to June 2010)

A five-year continuous period (May 22, 2005 to May 18, 2010)

Number of cases

1,922

1,333

Number of U.S. district courts

23

86

Method of retrieval

CM/ECF codes in 23 district courts; translation of PDF documents to text; electronic search.

Electronic searches of Westlaw DCT database.

Pro se plaintiffs, including prisoner and non-prisoner

Not included

Included

12(c) motions

Not included

Included

12(b)(6) motions directed to counterclaims

Not included

Included

Motions decided under Rule 9(b) (fraud) or the PSLRA

Included

Not included

District court reviews of motions decided by magistrates

Not included

Included

MDL cases

Not included

Included

             

            II.  Results.  Table 2 compares the overall results of the two studies, removing all pro se plaintiffs from the calculations for my database so as to approximate the FJC's.

Table 2

Comparison of FJC and Hatamyar Overall Results, Represented Plaintiffs Only

Denied

Granted at least in part

FJC

Hatamyar

FJC

Hatamyar

2006

2010

2006

2010

2006

2010

2006

2010

34%

25%

34%

27%

66%

75%

66%

73%

(239)

(305)

(51)

(46)

(461)

(916)

(98)

(123)

Notes:  The FJC figures include only orders entered in 23 districts from January through June 2006 and January through June 2010.  The Hatamyar figures include orders entered in 86 districts in all of calendar year 2006 and from January through June 2010.   

            Overall, as shown in Table 2, the two studies are close in their overall percentages, when looking at represented plaintiffs only.  First, even when the plaintiff was represented, both studies found a significant increase, from 2006 to 2010, in the percentage of 12(b)(6) motions granted at least in part – from 66% to 75% in the FJC study, and from 66% to 73% in my study.  Second, both studies found that 12(b)(6) motions were denied in 34% of cases in 2006 in which the plaintiff was represented by counsel. 

            A comparison of these results may shed some light on the debate as to whether cases reported in Westlaw fairly represent the “universe” of cases.  My database included only cases reported in Westlaw, and the FJC’s database included cases gleaned as thoroughly as possible from the courts’ electronic filing records.  Yet both my study and the FJC’s found the same percentage – 34% -- of motions denied in 2006.  I think that these results may tend to disprove the hypothesis advanced by the FJC that published cases are more likely to report the grant of a 12(b)(6) motion to dismiss than unpublished cases.  Further, in 2010, the percentage of motions granted at least in part (in cases with represented plaintiffs) was actually higher in the FJC study (75%) than in my study (73%), which was based solely on cases reported in Westlaw.  This is the opposite of what one would predict if grants of 12(b)(6) motions were more likely to be published than denials.    

            The real divergence in the results of the two studies is seen when considering pro se plaintiffs, which the FJC omitted from its study.  This is shown in Table 3.

Table 3

Comparison of FJC and Hatamyar Results:

Both Represented and Pro Se Plaintiffs Included in Hatamyar Results

Denied

Granted at least in part

FJC

Hatamyar

FJC

Hatamyar

2006

2010

2006

2010

2006

2010

2006

2010

34%

25%

27%

20%

66%

75%

73%

80%

(239)

(305)

(58)

(48)

(461)

(916)

(157)

(189)

Notes:  The FJC figures include only orders entered in 23 districts from January through June 2006 and January through June 2010 and include only cases in which the plaintiff was represented by counsel.  The Hatamyar figures include orders entered in 86 districts in all of calendar year 2006 and from January through June 2010, and include both represented and pro se plaintiffs.  

            Finally, I ran some logistic regressions in an attempt to limit my database so as to more closely approximate that of the FJC.  The FJC reports the rulings as an initially binary choice (deny vs. grant at least in part), so I recoded the rulings in my database to either “denied” or “granted at least in part.”  In addition, I limited the database, as did the FJC, to cases in which the plaintiff was represented by counsel and that were decided by a district court judge. 

            First, I used all the cases in my database from 2005 to 2010, except as otherwise limited above.  The results indicate that even taking out the pro se cases, the odds of a court granting a 12(b)(6) motion, at least in part, as compared to denying the motion, were expected to be 1.79 times greater under Iqbal than under Conley (p = 0.002), all other variables held constant.

            Second, I used only the cases in my database from 2006 (Jan to Dec) and from 2010 (Jan to May 18), and otherwise limited as described above (no pro se, no magistrate judges).  Here, the results indicate that even leaving out the pro se cases, the odds of a court granting a 12(b)(6) motion, at least in part, as compared to denying the motion, were expected to be 1.92 times greater in 2010 than in 2006 (p = 0.013), all other variables held constant. 

 

July 11, 2011 in Federal Rules of Civil Procedure, Recent Scholarship, Twombly/Iqbal | Permalink | Comments (2)

Decision of Interest: Ninth Circuit on the Class Action Fairness Act

The Ninth Circuit’s recent decision in Westwood Apex v. Contreras (No. 11-55362), 2011 WL 1744960, considers which kinds of defendants may remove a class action to federal court under the Class Action Fairness Act’s removal provision (28 U.S.C. § 1453(b)). The opinion by Judge Milan Smith begins:

The Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4, confers federal jurisdiction over class action lawsuits where the amount in controversy exceeds $5,000,000 and the adversaries are minimally diverse. When a class action satisfying these conditions is filed in state court, Section 5 of CAFA provides that “such action may be removed by any defendant without the consent of all defendants.” 28 U.S.C. § 1453(b). In this appeal, we address whether CAFA Section 5, 28 U.S.C. § 1453(b), allows a party joined to an action as a defendant to a counterclaim (an additional counterclaim defendant) to remove the case to federal court. We hold that § 1453(b) does not permit additional counterclaim defendants to remove an action to federal court, and we affirm the district court’s decision to remand this case to state court.

The court explains:

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July 11, 2011 in Class Actions, Federal Courts, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)