Monday, March 21, 2016
If you have been gnashing your teeth over Senate Republicans' stated refusal to vote on the nomination of Judge Merrick Garland to the Supreme Court, here is some information that may make you feel a little better.
- Judge Garland was a member of the Judicial Conference of the United States, which voted to approve the amendments to the FRCP that took effect on Dec. 1, 2015. (I and many others have described those amendments as "anti-plaintiff.")
- I cannot discover if Judge Garland actually is or has been a member of the conservative Federalist Society, but he has numerous links to the Society:
- He listed in the "Experts" link of the website of the Federalist Society. (It should be noted that the website states that a person’s listing on the Experts page does not imply any “endorsement or relationship between the person and the Federalist Society.”)
- Judge Garland moderated a panel called "Changing the Federal Rules of Civil Procedure: Has the Time Come?" on Dec. 9, 2010 hosted by the Federalist Society at the National Press Club in Washington, D.C. One of the panelists argued that discovery costs should routinely be shifted to the party requesting the discovery (something that defense interests have lobbied for ever since, with partial success in the amendment to Rule 26(c)(1)(B)). Another panelist argued that Rule 4(b), allowing a subpoena to issue against a defendant without a preliminary hearing, is unconstitutional. A third panelist described Twombly and Iqbal as “perfectly sensible cases.” Of course, merely by moderating the panel, Judge Garland cannot be understood to be endorsing any of these views.
- By my count, Judge Garland has also moderated about ten other panels hosted by The Federalist Society. See, e.g., here and here. In fact, at the panel on the FRCP described above, the person who introduced Judge Garland as the moderator said to him, “You are a repeat moderator for Federalist Society events.”
President Obama’s political calculation in nominating Judge Garland may be even shrewder than anyone’s given him credit for.
Friday, February 5, 2016
A bill to prohibit corporations from forcing arbitration of certain disputes, Restoring Statutory Rights Act, S.2506, was introduced on February 4 by Senator Patrick Leahy (D-VT).
Sunday, January 31, 2016
A bill to extend federal jurisdiction to claims for theft of trade secrets, the Defend Trade Secrets Act of 2015 (S. 1890), has been reported out of committee to the full chamber. Trade secrets are largely the subject of state law, and the federal courts currently lack jurisdiction of a claim for theft of trade secrets, unless there is diversity of citizenship or joinder with a transactionally-related federal-question claim such as trademark infringement.
The bill is co-sponsored by Republicans and Democrats.
The bill creates a civil action with original federal jurisdiction brought by “an owner of a trade secret that is misappropriated . . . if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The bill sets conditions for the “seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.”
The bill would also create a cause of action by “a person who suffers damage by reason of a wrongful or excessive seizure.”
One of the remedies that is authorized is, of course, damages:
[a court may] (B) award—
(I) damages for actual loss caused by the misappropriation of the trade secret; and
(II) damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; or
(ii) in lieu of damages measured by any other methods, the damages caused by the misappropriation measured by imposition of liability for a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret . . .
(As an aside: Could (B)(ii) be characterized as an award of statutory damages, currently under attack in the Supreme Court in Spokeo, Inc. v. Robins?)
A brief description of the bill’s background by David J. Kappos, former director of the United States Patent & Trademark Office, is in thehill.com.
Sunday, January 10, 2016
On January 8, the House of Representatives passed the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2016. (The L.A. Times called the "fairness in class action" part of the title "Orwellian" and "shameless.")
For additional coverage of the bill, see our post from last Friday.
The bill goes to the Senate next for consideration.
Friday, January 8, 2016
The House of Representatives is close to taking up a bill (H.R. 1927) that some are calling the "Volkswagen bail-out bill" due to its stymieing effect on class actions. Another part of the bill, the Huffington Post charges, "would force the online disclosure of sensitive personal information of sick and dying asbestos victims seeking compensation for their illnesses."
When we last reported on this bill, it dealt only with class actions. That bill has now been amended and combined with another bill on asbestos claims, resulting in the "Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2015."
The latest draft of the portion of the bill on class actions reads as follows:
SEC. 2. FAIRNESS IN CLASS ACTION LITIGATION.
(a) IN GENERAL.—No Federal court shall certify any proposed class seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.
(b) CERTIFICATION ORDER.—An order issued under Rule 23(c)(1) of the Federal Rules of Civil Procedure that certifies a class seeking monetary relief for personal injury or economic loss shall include a determination, based on a rigorous analysis of the evidence presented, that the requirement in subsection (a) of this section is satisfied.
The House Judiciary Committee has issued House Report 114-328 on the class action portion of the bill. The Democrats opposing the bill stated in their dissenting views that the bill is “a solution in search of a problem” and “represents the latest attempt to shield corporate wrongdoers and deny plaintiffs access to justice.” They concluded:
H.R. 1927 is an unnecessary bill that threatens to deny millions of plaintiffs access to Federal courts by creating potentially insurmountable obstacles to class action certification and raising litigation costs. Moreover, it disrespects the Federal courts by imposing new burdens on them and by circumventing the congressionally created Rules Enabling Act process by which Federal civil procedure rules are amended after extensive input from the bench and bar.
Meanwhile, at the annual meeting of the Association of American Law Schools, members of the Advisory Committee on Civil Rules are scheduled to discuss potential class actions reforms today. I am not at the conference this year, and would be interested to learn if anyone mentions H.R. 1927 and how that bill might relate to proposals before the Advisory Committee.
The House yesterday passed a resolution limiting amendments to and debate on the bill.
Professor Alexandra D. Lahav testified against the bill last April.
Thursday, January 7, 2016
Up on the Courts Law section of JOTWELL this week is Robin Effron’s essay, Anti-Plaintiff Bias in the New Federal Rules of Civil Procedure. Robin reviews Patricia Hatamyar Moore’s recent article, The Anti-Plaintiff Pending Amendments to the Federal Rules of Civil Procedure and the Pro-Defendant Composition of the Federal Rulemaking Committees, 83 U. Cin. L. Rev. 1083 (2015).
Thursday, December 31, 2015
As if New Year’s Eve wasn’t exciting enough, Chief Justice Roberts has released his 2015 Year-End Report on the Federal Judiciary. He emphasizes the recent amendments to the Federal Rules of Civil Procedure (prefaced by a two-page wind-up about 19th-century dueling practices).
Wednesday, September 30, 2015
The House Judiciary Committee held a hearing yesterday on a bill entitled “The Fraudulent Joinder Act of 2015.” Minority witness, Professor Lonny Hoffman, testified against the bill.
The bill, H.R. 3624, provides:
Section 1447(c) of title 28, United States Code, is amended by adding at the end the following:
“A motion for remand, and any opposition thereto, may include affidavit or other evidence showing a plausible claim for relief against each nondiverse defendant, or the lack thereof, or indicating a good faith intention to prosecute the action against each nondiverse defendant or to seek a joint judgment, or the lack of such a good faith intent. The district court shall deny a motion to remand if it finds that the complaint does not state a plausible claim for relief against a nondiverse defendant under applicable state law or there is no good faith intention to prosecute the action against a nondiverse defendant or to seek a joint judgment.”
Professor Hoffman explains the bill’s effect: “The bill would replace the existing common law fraudulent joinder test with a statutory test that places the burden on the plaintiff to prove that her claims against the non-diverse defendant are ‘plausible’ and brought in ‘good faith.’ Overall, the bill would make proving fraudulent joinder much easier than it is under current law.”
One of the majority witnesses, Elizabeth Milito, Senior Executive Counsel of the National Federation of Independent Business Small Business Legal Center, asserted the need for the bill:
[F]or a small business owner being served with lawsuit generates significant trepidation, disgust, and yes, uncertainty.
Because litigation entails angst and great expense for small businesses, NFIB is pleased to see this Committee’s attention focused on the issue of fraudulent joinder. Fraudulent joinder remains a source of confusion and unnecessary litigation in our courts and impacts far too many innocent small businesses. The situation unfolds as follows: plaintiffs’ attorneys will name a small business – such as a local pharmacy or insurance agent – with little connection to the complaint in order to deny the federal courts of jurisdiction. In many instances, the plaintiff has no intention of imposing liability on the fraudulently joined party. With courts divided over the standard for finding that a defendant is fraudulently joined, the small business is forced to engage in protracted litigation when all they want is to be dismissed from the case entirely.
In opposition to the bill, Professor Hoffman’s introduction summarizes his testimony:
There is no warrant for amending 28 U.S.C. §1447. More than a century old, fraudulent joinder law is well-settled and strikes the proper balance among competing policies in how it evaluates the joinder of non-diverse defendants. With recognition that there are sound reasons for not trying to exhaustively examine the merits of the plaintiff’s claims immediately after removal, courts across the circuits uniformly impose a high burden on the defendant to demonstrate that a non-diverse defendant’s joinder was improper. That burden can only be met if the defendant establishes that the joinder of the diversity-destroying party in the state court action was made without a reasonable basis of proving any liability against that party. By greatly expanding the scope of the fraudulent joinder inquiry, this bill would displace the well-functioning law with wasteful adjudications that district courts are ill-equipped to undertake at the remand stage, burdening the judicial system and raising litigation costs for all parties, especially for plaintiffs on whom this bill imposes the burden of proof. Finally, by requiring that courts resolve merits inquiries that under current law are decided by state courts, the proposed amendments to §1447 raise federalism concerns.
Monday, September 28, 2015
Professor Suja Thomas (University of Illinois College of Law) and Professor Renee Lettow Lerner (George Washington University School of Law) recently participated in a debate on civil juries under the auspices of the Federalist Society's Litigation Practice Group. Professor Thomas argued in favor of the civil jury, while Professor Lerner argued the civil jury's downsides.
Friday, September 25, 2015
Professors Benjamin Means and Joseph Seiner (University of South Carolina School of Law) have posted on SSRN their essay, "Navigating the Uber Economy," forthcoming in U.C. Davis Law Review.
In litigation against ride-sharing companies Uber and Lyft, former drivers have alleged that they were misclassified as independent contractors and denied employment benefits. The companies have countered that they do not employ drivers and merely license access to a platform that matches those who need rides with nearby available drivers. At stake are the prospects, not only for Uber and Lyft, but for a nascent, multi-billion dollar "on-demand" economy.
Unfortunately, existing laws fail to provide adequate guidance regarding the distinction between independent contractors and employees, especially when applied to the hybrid working arrangements characteristic of a modern economy. Under the Fair Labor Standards Act and analogous state laws, courts consider several factors to assess the "economic reality" of a worker's alleged employment status; yet, there is no objective basis for prioritizing those factors.
This Essay argues that the classification of workers as independent contractors or employees should be shaped by an overarching inquiry: how much flexibility does the individual have in the working relationship? Those who can choose the time, place and manner of the work they perform are more independent than those who must accommodate themselves to a business owner's schedule. Our approach is novel and would provide an objective basis for adjudicating classification disputes, especially those that arise in the context of the on-demand economy. By reducing legal uncertainty, we would ensure both that workers receive appropriate protections under existing law and that businesses are able to innovate without fear of unknown liabilities.
Tuesday, September 15, 2015
NPR this morning has a story entitled "When Cyber Fraud Hits Businesses, Banks May Not Offer Protection." It describes some instances in which small businesses that had their bank accounts drained by cyber fraud were unpleasantly surprised to find that their banks were not legally obligated to reimburse them (unlike in most cases for bank accounts owned by individuals).
The story of one company contradicted the frequent assertion by defendants that defendants in civil suits are often "forced to settle" because the costs of defense exceed the claim. One of the victimized businesses found its checking account down by $545,000 due to cyber fraud:
[The owner of the construction company involved] thought his bank . . . would reimburse him. It refused, and he sued. [The owner] says the bank threw a huge amount of resources at the case. He says he discovered in mediation that the bank had spent "in excess of $1.2 million fighting this, when we offered to settle this for $200,000."
[The construction company] lost the first round but won on appeal when a panel of judges concluded [the bank's] security had not been commercially reasonable.
Another small business lost $14,000 due to cyber fraud, and its owner "considered suing [his bank], but was advised he'd spend much more on legal fees than he'd recover."
Friday, September 11, 2015
So you send a survey to people whose job depends on how well they do defending their $100-million-plus employer in court and ask them how fair and reasonable the courts are. If they just lost a big verdict in Texas, they probably think juries in Texas are unfair and the judge who tried the case is an idiot. (A friend who was born and raised on a farm said that it was like asking foxes to rate how fairly the farmer guarded the henhouse.)
Compile all those subjective answers, assign some ordinal numbers to them, and rank the fifty states: that’s about the long and short of the U.S. Chamber Institute for Legal Reform’s 2015 "lawsuit climate survey" conducted by Harris Poll "to explore how fair and reasonable the states’ tort liability systems are perceived to be by U.S. businesses." (The full report is here.)
To be fair, if you read the report carefully, it does not misrepresent what it purports to show. It never says it is a random survey (and it isn't). It explains that the only people asked to participate are lawyers and other executives who are in charge of litigation for companies with at least $100 million in annual revenues. (It doesn’t say, but it’s fairly obvious, that these companies are overwhelmingly defendants, not plaintiffs, in lawsuits.) The report admits that what it measures are these executives’ “perceptions” (p. 3 of the Executive Summary), not any objectively quantifiable element of a state’s justice system, such as the caseload per judge.
But the sheer repetition of the ensuing headlines (egged on by the Chamber's state-specific press releases) encourages the casual reader to elide the difference between objective reality and the subjective perceptions of a very distinct interest group. A sampling:
"Florida's 'lawsuit climate' hits all-time low, Chamber survey says" (Tampa Bay Times)
"Survey: Missouri’s Lawsuit Climate Hits All-Time Low, Ranks Among Nation’s Worst" (Associated Press, via ABC's WAAY-TV)
Once again, Louisiana’s lawsuit climate ranked second worst in US (Greater Baton Rouge Business Report)
And that's not even counting the "coverage" of the survey by news-like websites that are owned by the U.S. Chamber of Commerce, such as the West Virginia Record and the Madison-St. Clair Record, or op-eds planted by the U.S. Chamber Institute for Legal Reform.
Anyway, the purpose of this post is not to go through the myriad glaring problems with the survey. But I can't resist pointing out one of many examples: the survey respondents really couldn't help calling Cook County, Illinois or Miami-Dade County "among the worst city or county courts." That is because the survey respondents were given twelve listed locations to pick from, which included those two locations, and the respondents would have had to think of any other jurisdiction on their own. Question 637 (p. 127 of the full report) is:
Thinking about the entire country, which of the following do you think are the worst city or county courts? That is, which city or county courts have the least fair and reasonable litigation environment for both defendants and plaintiffs? Please select up to two responses.
1 Chicago or Cook County, Illinois
2 Los Angeles, California
3 San Francisco, California
4 Philadelphia, Pennsylvania
5 Madison County, Illinois
6 Miami or Dade County, Florida
7 New Orleans or Orleans Parish, Louisiana
8 New York, New York
9 East Texas
10 St. Louis, Missouri
11 Detroit, Michigan
12 Washington, DC
13 Other [ONLINE: (Please specify)] [ PHONE: CAPTURE RESPONE]
14 Not sure
99 Decline to answer [EXCLUSIVE] [PHONE ONLY]
The twelve listed locations were randomized for each survey respondent, so they were not necessarily listed in the order above for any given respondent. But it's a great example of the availability heuristic.
Anyway, setting aside the problems with the survey, I noticed this: in general, the fewer people who live in a state, the better that state's "lawsuit climate" is perceived.
Many of the top-ranked states (with the “best” perceived “litigation climates”) in the Chamber's survey are states with the fewest people. Using census data for 2014, I ranked the states from 1 to 50, from most populous to least populous. For example, California has the largest population, so is ranked #1, and Wyoming has the fewest people, so it's ranked #50. I then compared the 15 least populous states (ranked 36-50) with the "best" 15 states in the U.S. Chamber's survey (ranked 1-15). Ten states were on both lists: Alaska, Delaware, Idaho, Maine, Nebraska, New Hampshire, North Dakota, South Dakota, Vermont, and Wyoming.
In other words, the Chamber rankings are negatively correlated with the population rankings: in general, as the state's population goes down, the perception of its "lawsuit climate" goes up. Here is a scatterplot of the fifty states and a fitted line:
I’ve labeled two of the fifty data points as examples. California is ranked #1 in population (the y-axis) and #47 in the Chamber survey (the x-axis). Delaware is ranked #45 in population and #1 in the Chamber survey (the “best” in the country).
So what does this all mean? Of course, correlation is not the same as causation. But maybe if there are fewer people, there are fewer things to go wrong (industrial accidents, adverse drug reactions, discriminatory employment decisions), so there are fewer lawsuits. Just a simple-minded theory.
Wednesday, July 1, 2015
In the wake of last week’s U.S. Supreme Court decision in Obergefell, federal judge Callie Granade issued an order today confirming that her earlier classwide preliminary injunction in the Strawser case is “now in effect and binding on all members of the Defendant Class.”
According to one report, attorneys for the Strawser plaintiffs will be seeking contempt rulings against probate judges who issue marriage licenses to opposite-sex couples but not same-sex couples.
Saturday, June 27, 2015
By now readers are surely aware of yesterday’s landmark Supreme Court decision in Obergefell v. Hodges, which held by a 5-4 vote that the U.S. Constitution does not permit states to bar same-sex couples from marriage on the same terms as are accorded to opposite-sex couples. Despite this ruling, it is not yet clear how things will unfold in Alabama—or in other states that have not recognized same-sex marriage but are not directly involved in the Obergefell case (which involves the four states in the Sixth Circuit—Kentucky, Michigan, Ohio, and Tennessee).
According to early reports, many Alabama counties began issuing marriage licenses to same-sex couples shortly after Justice Kennedy announced the Obergefell decision (some of these counties had already done so earlier but stopped after the March 3 ruling from the Alabama Supreme Court). Other Alabama counties are still not issuing marriage licenses to same-sex couples or have stopped issuing marriage licenses altogether.
So where do things stand on the Alabama judicial front? Federal judge Callie Granade has already issued a class-wide preliminary injunction against all Alabama probate judges, ordering that they may not enforce Alabama’s ban on same-sex marriage. She stayed that injunction “until the Supreme Court issues its ruling” in Obergefell, but as of this post she has taken no further action.
Meanwhile the Alabama Supreme Court’s mandamus ruling, which orders Alabama probate judges not to issue marriage licenses to same-sex couples, remains. The Alabama Supreme Court has yet to rule on a motion filed earlier this month by groups opposing same-sex marriage, which had sought “clarification and reaffirmation” of the mandamus ruling in the wake of Judge Granade’s class-wide injunction. Alabama Chief Justice Roy Moore was in the news once again shortly after Obergefell came down, asserting the decision was “even worse” than Plessy v. Ferguson.
The upshot is, we’re likely to see more action in both state and federal court before things get resolved. Stay tuned.
Wednesday, June 24, 2015
Under this Act, to obtain class certification, class action plaintiffs "seeking monetary relief for personal injury or economic loss" will have to "affirmatively demonstrate that each proposed class member suffered the same type and scope of injury as the named class representative."
Amendments offered by Democrats all failed. These failed amendments were to: except Title VII claims; except antitrust claims; strike the words "and scope"; strike the words "or economic loss"; require Judicial Conference approval of the changes; and require the Administrative Office of the US Courts to assess the effect of the bill on litigants and courts.
Wednesday, June 3, 2015
Two weeks ago, federal district judge Callie Granade certified a class action in the Strawser case and issued a class-wide injunction forbidding enforcement of Alabama’s ban on same-sex marriage. She stayed the injunction, however, until the U.S. Supreme Court issues its ruling in Obergefell v. Hodges, which is expected later this month.
In the meantime, two groups opposed to same-sex marriage have returned to the Alabama Supreme Court, seeking “clarification and reaffirmation” of that court’s earlier mandamus ruling ordering Alabama probate judges not to issue marriage licenses to same-sex couples. Yesterday’s motion asks the Alabama Supreme Court “to enter an order clarifying and reaffirming the continued effectiveness of the Mandamus Order despite entry of the conflicting Strawser Class Injunction.”
Thursday, May 21, 2015
Alabama Same-Sex Marriage Litigation Update: Federal Judge Grants Class Certification and Issues (but Stays) Class-Wide Injunction
Things had been fairly quiet in the litigation over Alabama’s same-sex marriage ban (here’s where things stood back in March). Today, U.S. District Judge Callie Granade made two important rulings in the Strawser case. In one order, she certified both a plaintiff class and a defendant class under Rule 23(b)(2). She wrote:
Plaintiffs’ motion to certify a Plaintiff Class consisting of all persons in Alabama who wish to obtain a marriage license in order to marry a person of the same sex and to have that marriage recognized under Alabama law, and who are unable to do so because of the enforcement of Alabama’s laws prohibiting the issuance of marriage licenses to same-sex couples and barring recognition of their marriages is GRANTED.
Plaintiffs’ motion to certify a Defendant Class consisting of all Alabama county probate judges who are enforcing or in the future may enforce Alabama’s laws barring the issuance of marriage licenses to same-sex couples and refusing to recognize their marriages is GRANTED.
In another order, Judge Granade concluded—yet again—that Alabama’s ban on same-sex marriage is unconstitutional. Accordingly, she granted the plaintiff’s motion for a preliminary injunction; but she also ordered that “because the issues raised by this case are subject to an imminent decision by the United States Supreme Court in Obergefell v. Hodges and related cases, the above preliminary injunction is STAYED until the Supreme Court issues its ruling.”
Tuesday, May 12, 2015
Medical malpractice case filings across Pennsylvania are at their lowest since statewide tracking began in 2000, according to statistics from the Administrative Office of Pennsylvania Courts.
In 2014, according to the AOPC, 1,463 new medical malpractice cases were filed, representing a 46.5 percent decrease from the number of cases filed during the “base years” of 2000 to 2002, when statewide medical malpractice case recording began.
The numbers showed a significant downward trend after the implementation of the certificate of merit rule in 2003 and a subsequent rule in 2004 designed to curb “venue shopping,” according to the AOPC. . . .
There were 129 jury verdicts in 2014, of which 81% were in favor of defendants.
Monday, April 20, 2015
The movant was defendant Shaquille O’Neal. The plaintiff Jahmel Binion—a Michigan resident—alleged claims for invasion of privacy, intentional infliction of emotional distress, defamation, and general negligence based on posts Shaq had made on Instagram and Twitter that included pictures of Binion. Although the court stated that Shaq’s posts were “highly offensive,” it found after a discussion of Zippo and the “effects test” from Calder v. Jones that jurisdiction in Michigan would not comport with due process.
Here’s the New York Daily News with some background on the incident that gave rise to the lawsuit.
Friday, April 3, 2015
Just received the annual report of the Oklahoma Bar Association on attorney discipline in calendar year 2014. (86 Okla. B.J. No. 8, p. 624.) All 16 attorneys publicly disciplined in 2014 in Oklahoma were men (based upon their first names). Of three other attorneys charged with disciplinary violations who were exonerated, two were women.
Although Oklahoma is a relatively small and perhaps unrepresentative state, the outsized proportion of male disciplined attorneys is consistent with my study of all 3,500 publicly-disciplined US attorneys in the year 2000. My co-author Kevin Simmons and I found that although male and female attorneys comprised 76.4% and 23.6% of all licensed attorneys in the US in 2000, 88.3% of the disciplined attorneys were male and 11.7% were female.