Thursday, September 12, 2013
The Eighth Circuit's decision last week in Horras v. American Capital Strategies, Ltd. (No. 12-3886), __ F.3d __, 2013 WL 4711389, includes a partial dissent by Judge Colloton that is worth a read for his approach to pleading standards after Iqbal and Twombly. (Hat tip to Ryan Koopmans, who covers the case in this post.) The majority in Horras affirms the district court's dismissal of Horras’s complaint. Judge Colloton dissents as to Horras's claim for breach of fiduciary duty.
Judge Colloton writes that while the Supreme Court's approach to pleading in Iqbal and Twombly is an “important development,” courts “must be careful not to embellish it.” Citing Erickson, Swierkiewicz, Form 11, and articles by Judge, Dean, and chief drafter of the original FRCPs Charles E. Clark, he concludes: “Under the simplified pleading standard of Rule 8(a), I think the complaint here was sufficient to give ACS fair notice of the fiduciary duty claim that Horras has amplified in his briefing.”
Here are some excerpts from Judge Colloton's opinion:
Friday, September 6, 2013
Plaintiffs filed suit in Pennsylvania state court asserting state-law claims arising from a plane crash. Defendants removed the case to federal district court, asserting diversity jurisdiction. Plaintiffs moved to remand the case, asserting that one of the defendants was a citizen of Pennsylvania, and therefore not diverse from all plaintiffs. The district court granted plaintiffs' motion and ordered the case remanded to state court. One of the defendants moved for reconsideration. The district court also denied the motion for reconsideration. Defendants appealed.
The Third Circuit dismissed the appeal for lack of appellate jurisdiction. 28 U.S.C. 1447(d) provides that "[a]n order remanding a case to the State court from which it was removed is not reviewble on appeal or otherwise . . ." The court noted that the purpose of this provision "is to prevent a party to a state lawsuit from using federal removal provisions and appeals as a tool to introduce substantial delay into a state action." Allowing an appeal from a denial of a motion to reconsider an order to remand would circumvent this purpose.
The district court itself had jurisdiction to consider the motion to reconsider, however, because "at the time when the District Court considered the motion for reconsideration, a certified copy of the remand order had not yet been mailed from the District Court Clerk to the state court." Agostini v. Piper Aircraft Corp., No. 12-2098 (3d Cir. Sept. 5, 2013).
Saturday, August 31, 2013
The Ninth Circuit dismissed an appeal from the district court's denial of an ex parte application for an exemption from PACER fees (the fees associated with electronic access to federal court records) for lack of jurisdiction, holding that the denial was not a final decision under 28 U.S.C. Section 1291. In Re: Application for Exemption from Electronic Public Access Fees, No. 12-16373 (9th Cir. Aug. 29, 2013).
Judge O'Scannlain, who wrote the opinion, also filed a concurrence acknowledging "the elephant in the room" -- if the denial was unappealable, to whom might one go for review? -- and suggesting that it "will be up to Congress to decide whether to fashion an appellate-review mechanism." I'm not holding my breath.
Monday, August 26, 2013
Stephen Vladeck (American University) has posted Military Courts and the All Writs Act to SSRN.
When it comes to the role of the federal courts in the federal system, few statutes play as significant a role — or are as routinely misunderstood — as the All Writs Act. It is the All Writs Act that rounds Article III’s sharp jurisdictional edges by investing courts of such limited subject-matter jurisdiction with a species of common-law authority; as Justice Stevens has explained, “The Act was, and is, necessary because federal courts are courts of limited jurisdiction having only those powers expressly granted by Congress, and the statute provides these courts with the procedural tools — the various historic common-law writs — necessary for them to exercise their limited jurisdiction.”
Although the All Writs Act applies on its terms to “all courts established by Act of Congress,” two recent opinions in high-profile military justice cases have rejected the power of military courts to issue relief that is routinely available from civilian courts under the All Writs Act. In the Bradley Manning court-martial proceedings, for example, the highest court in the military justice system — the Court of Appeals for the Armed Forces (CAAF) — held that it lacked the authority under the All Writs Act to issue extraordinary relief to protect the First Amendment right of public access to criminal trials identified by the Supreme Court in Richmond Newspapers and its progeny. Similar reasoning was also offered by one of the judges of the Court of Military Commission Review (CMCR), in explaining why the CMCR lacked jurisdiction to provide analogous relief in the context of the military commission trial of the 9/11 defendants.
It is easy enough to identify the analytical errors common to these two opinions, but in addition to doing so, this short essay argues that there is more behind such analysis than a mere misreading of precedent. Ultimately, both CAAF’s decision in the Manning case and Judge Silliman’s concurrence in the CMCR’s 9/11 proceedings have at their core a misplaced and outdated understanding of both the military justice system’s exceptionalism and its relationship to the civilian courts. As I conclude, the understanding common to these two opinions has the ironic — and surely unintended — effect of weakening arguments for a separate system of military justice insofar as such crabbed understandings of the All Writs Act only bolster the need for increased Article III oversight of the military justice system through actions for collateral review.
Thursday, August 22, 2013
Alan Trammell (Brooklyn Law School) has posted Jurisdictional Sequencing to SSRN.
This Article offers a critical re-assessment of subject matter jurisdiction, arguably the most fundamental constraint on federal courts. The project examines the nature and purposes of subject matter jurisdiction through the lens of jurisdictional sequencing, a practice that allows a federal court to decide certain issues — and even dismiss cases — before it has verified subject matter jurisdiction.
Despite many scholars’ antipathy toward jurisdictional sequencing, it is a legitimate practice that reveals a nuanced understanding of jurisdiction’s unique structural role in protecting federalism and separation of powers. Specifically, elected institutions have principal responsibility for crafting conduct rules that regulate people’s primary activities. Federal courts may interpret and apply conduct rules — and thus in a meaningful sense “make law” — only when they have verified their subject matter jurisdiction. By contrast, federal adjudication does not implicate the structural concerns at the heart of subject matter jurisdiction when courts dismiss cases based on other rules (what I term allocative rules). Re-imagining the precise role of subject matter jurisdiction reveals how federal courts can decide cases more efficiently and also respect essential constraints on the allocation of powers.
Tuesday, August 20, 2013
Michael Steven Green (William & Mary) has posted The Twin Aims of Erie to SSRN.
We all remember the twin aims of the Erie rule from first-year civil procedure. A federal court sitting in diversity must use forum state law if it is necessary to avoid "forum shopping" and the "inequitable administration of the laws." This Article offers a reading of the twin aims and a systematic analysis of their proper role in federal and state court. I argue that the twin aims apply in diversity cases not because they protect state interests, but because they serve the federal purposes standing behind the diversity statute. So understood, they are about separation of powers, not federalism. Through the twin aims, state law is incorporated into federal procedural common law in order to serve federal interests.
This reading does not merely have important consequences for diversity cases. It also has an impact on the role of the twin aims outside diversity. If the twin aims have their source in the purposes standing behind the congressional grant of jurisdiction, rather than respect for state interests, the fact that a federal court entertains a state law action is neither a necessary nor a sufficient reason for the twin aims to apply. The twin aims might apply to federal courts when entertaining federal causes of action. Conversely, they might not apply to a federal court when entertaining state law actions under jurisdictional statutes other than diversity.
I therefore examine four jurisdictional scenarios in order to assess the role of the twin aims in each: a federal court entertaining a federal cause of action, a state court entertaining a federal cause of action (sometimes called reverse-Erie), and a federal court entertaining a state law action under supplemental jurisdiction and under bankruptcy. In the course of my argument, I suggest a resolution to the current circuit split about whether a federal court sitting in bankruptcy should use forum state choice-of-law rules. I also argue that the Supreme Court has wrongly assumed that the twin aims apply in a reverse-Erie context. As a result, it has improperly limited state courts’ powers when entertaining federal civil rights actions — most recently in Haywood v. Drown, 556 U.S. 729 (2009).
This Article offers an original justification of the twin aims in diversity cases, and the first comprehensive explanation of their role in a variety of other jurisdictional contexts.
Saturday, August 17, 2013
The Washington Post published an Op-Ed yesterday by Professor Michael J. Yelnosky, at Roger Williams University School of Law. Yelnosky notes that in the ABA's Standing Committee on the Federal Judiciary, which rates potential nominees for federal judicial vacancies, "Not one of the lawyers on the committee for 2013-14 regularly represents individuals who bring lawsuits alleging they were harmed by the actions of corporations or other business entities, and not one represents individuals charged with anything other than white-collar crimes."
Friday, July 19, 2013
AALS Section on Federal Courts: Annual Award for Best Untenured Article on the Law of Federal Jurisdiction
The AALS Section on Federal Courts is pleased to announce the second annual award for the best article on the law of federal jurisdiction by a full-time, untenured faculty member at an AALS member or affiliate school—and to solicit nominations (including self-nominations) for the prize to be awarded at the 2014 AALS Annual Meeting in New York.
The purpose of the award program is to recognize outstanding scholarship in the field of federal courts by untenured faculty members. To that end, eligible articles are those specifically in the field of Federal Courts that were published by a recognized journal during the twelve-month period ending on September 1, 2013 (date of actual publication determines eligibility). Eligible authors are those who, at the close of nominations (i.e., as of September 15, 2013), are untenured, full-time faculty members at AALS member or affiliate schools, and have not previously won the award.
Nominations (or questions about the award) should be directed to Tara Leigh Grove at William and Mary Law School (firstname.lastname@example.org), Chair-Elect of the AALS Section on Federal Courts. Without exception, all nominations must be received by 11:59 p.m. (EDT) on September 15, 2013. Nominations will be reviewed by a prize committee comprised of Professors Janet Cooper Alexander (Stanford), Judith Resnik (Yale), and Steve Vladeck (American), with the result announced at the Federal Courts section program at the 2014 AALS Annual Meeting.
Friday, July 12, 2013
The Atlantic online has posted an essay entitled "How the Sequester is Holding up Our Legal System" by Andrew Cohen. It describes federal judges' concerns about issues raised if the budget cuts reach into the next fiscal year. "The sequester . . . represents an assault by the legislative and executive branches upon core judicial functions. . . . The Administrative Office of the United States already has indicated that it may be forced to eliminate civil jury trials in the month of September . . ."
The essay also describes public apathy about the issue.
Hat tip: Howard Bashman, @howappealing.
Friday, June 28, 2013
This week the Supreme Court issued its much-anticipated decisions in Windsor v. United States (on the federal Defense of Marriage Act) and Hollingsworth v. Perry (on California’s Prop. 8). Both cases presented significant questions with respect to Article III jurisdiction and standing, which were excellently summarized earlier this year by Marty Lederman’s seven-part series for SCOTUSblog.
In Windsor, a five-Justice majority opinion authored by Justice Kennedy (joined by Ginsburg, Breyer, Sotomayor, and Kagan) found that Article III jurisdiction was proper and that the Court should not invoke prudential grounds to refrain from exercising jurisdiction; the majority then concluded that DOMA was unconstitutional.
In Perry, a five-Justice majority opinion authored by Chief Justice Roberts concluded that the intervenors who supported Proposition 8 lacked Article III standing to challenge the district court’s order declaring Prop. 8 unconstitutional and enjoining California officials from enforcing it. Perry was a particularly interesting 5-4 split: The Chief was joined by Scalia, Ginsburg, Breyer, and Kagan. Justice Kennedy dissented, joined by Thomas, Alito, and Sotomayor.
From a jurisdictional standpoint, one crucial difference was that in Windsor, the federal government enforced DOMA (by denying Windsor the requested refund) and then proceeded to seek review of both the district court and appellate court rulings that DOMA was unconstitutional. As Kennedy puts it: “It would be a different case if the Executive had taken the further step of paying Windsor the refund to which she was entitled under the District Court’s ruling.” In Perry, on the other hand, the California government did not appeal the district court’s order and injunction. Perhaps the standing inquiry in Perry would have come out differently if the California government had adopted a litigation strategy similar to the one the U.S. government took in Windsor.
For anyone counting heads, here’s how each Justice came down on the Article III issues in both cases:
- Kennedy, Alito and Sotomayor supported exercising jurisdiction in both Windsor and Perry. (Alito is somewhat unique as to Windsor, because he argued that the U.S. government “clearly is not a proper petitioner” given its position that DOMA was unconstitutional; he argued instead that jurisdiction was proper because the House of Representatives’ Bipartisan Legal Advisory Group had standing as intervenors.)
- Roberts and Scalia opposed exercising jurisdiction in both Windsor and Perry.
- Ginsburg, Breyer and Kagan supported jurisdiction in Windsor and opposed jurisdiction in Perry.
- Thomas supported jurisdiction in Perry and opposed jurisdiction in Windsor.
Monday, June 24, 2013
With all of this week’s end-of-the-Term anticipation and excitement, some of today’s cert. grants may have slipped below the radar. But here are two cases that will be argued next Term that may be of interest:
Wednesday, June 19, 2013
Plaintiff, a Florida limited liability company, filed a diversity suit against Sheraton in the Southern District of New York. After three years and much discovery, the action was dismissed without prejudice for lack of subject matter jurisdiction when it was revealed that at least one of the members of plaintiff's limited liability company was a New York citizen, as was Sheraton. Plaintiff then tried to cure the jurisdictional defect by dropping the non-diverse member of its company and filing a new action alleging the same claims.
The district court also dismissed the second action for lack of subject matter jurisdiction, ruling that 28 U.S.C. §1359 prohibited such "engineering" of diversity jurisdiction. The court also granted Sheraton's motion for "just costs," including $200,000 in attorney's fees, under 28 U.S.C. §1919 ("Whenever any action or suit is dismissed in any district court . . . for want of jurisdiction, such court may order the payment of just costs.")
The Second Circuit reversed, holding that Section 1919's allowance of "just costs" did not include attorney's fees, and that the invocation of the common-law "bad faith" exception to the American Rule on attorney's fees was not appropriate in the case. Castillo Grand, LLC v. Sheraton Operating Corp., No. 11-2457 (2d Cir. June 18, 2013).
In Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988), this Court held that a district court’s decision on the merits that left unresolved a request for statutory attorney’s fees was a “final decision” under 28 U.S.C. § 1291. The question presented in this case, on which there is an acknowledged conflict among nine circuits, is whether a district court’s decision on the merits that leaves unresolved a request for contractual attorney’s fees is a “final decision” under 28 U.S.C. § 1291.
You can find a link to the First Circuit’s decision below and the cert-stage briefing at SCOTUSblog’s case file.
Wednesday, June 12, 2013
It’s a quick read at <3 pages, where “<3” actually means “less than 3” as opposed to a sideways emoticon heart.
Saturday, June 8, 2013
In an absurdly lengthy opinion, which I must admit to only skimming, the Third Circuit has held that a ten-by-ten foot subleased office makes Delaware the principal place of business of a GlaxoSmithKline holding company, and thus upheld diversity jurisdiction over a personal injury action involving thalilomide. (Yes, thalilomide, the anti-nausea-in-pregnancy drug from the late 50's and early 60's that caused birth defects.) Plaintiffs claim to have discovered new evidence showing that defendants were aware of the drug's defects while marketing it. Johnson v. SmithKline Beecham Corp., No. 12-2561 (3d Cir. June 7, 2013.)
The plaintiffs are Pennsylvania citizens and they claimed that four defendants were also Pennsylvania citizens. So when defendants removed the action from Pennsylvania state court, plaintiffs moved to remand. That motion was denied and the issue certified for interlocutory appeal. Apparently the issue of these companies' citizenship for diversity purposes has come up in several other cases and the district court rulings have conflicted.
As a naive law student, I concluded that any corporate structure that I could not understand was up to no good, and I have found no reason to change my mind about this well into middle age. Three of the four defendants that plaintiffs claimed were Pennsylvania citizens are entities affiliated with GlaxoSmithKline plc, the British entity that is the "global head" of the GlaxoSmithKline group of companies. Defendant SmithKline Beecham Corp. was once a Pennsylvania corporation, but it converted in 2009 to a Delaware LLC. As far as I understood, the purpose of the conversion was to avoid "unnecessary tax liability." (Wish I could convert myself to a Delaware LLC!) SmithKline Beecham then dissolved. The court thus held that SmithKline Beecham was not a Pennsylvania citizen because it had converted itself into a new entity, defendant GSK LLC.
GSK LLC operates the US division of GlaxoSmithKline plc. Its headquarters is still in Philadelphia, "where it occupies 650,000 square feet of office space and employs 1,800 people" – the same as when it was still SmithKline Beecham. SmithKline Beecham's board of directors became GSK LLC's "board of managers." Does that mean GSK LLC's principal place of business is still Pennsylvania?
No. As an LLC, GSK LLC's citizenship for diversity purposes is derivative of its owner's (or "member's") citizenship. Its sole member is GSK Holdings, a Delaware corporation with its principal place of business in (according to the Third Circuit) Delaware. GSK Holdings subleases a ten-by-ten foot office in Delaware. It has one employee who works about 20 hours per year. Its three directors hold quarterly 15-30 minute meetings in Delaware (at least one of the directors is usually physically present at the meetings) to discuss GSK Holdings' investments.
As for the fourth defendant at issue, Avantor, it evidently moved its principal place of business to Pennsylvania five days after the removal, so the court held that it was still a New Jersey citizen at the time of removal.
Friday, May 31, 2013
Now available on the Courts Law section of JOTWELL is an essay by Sergio Campos (Miami) entitled Back to the Future. It reviews a recent article by Robert Jones (Northern Illinois), Lessons from a Lost Constitution, 27 J. L. & Politics 459 (2012).
Tuesday, May 28, 2013
Whether a state’s parens patriae action is removable as a “mass action” under the Class Action Fairness Act when the state is the sole plaintiff, the claims arise under state law, and the state attorney general possesses statutory and common-law authority to assert all claims in the complaint.
You can find a link to the Fifth Circuit’s decision below and the cert-stage briefing at SCOTUSblog’s case file.
It will be the second Supreme Court case to interpret CAFA in as many Terms, following the decision this March in Standard Fire Insurance Co. v. Knowles.
Thursday, May 16, 2013
Two years ago we covered the strange set of developments in Comer v. Murphy Oil USA, a class action lawsuit against a number of chemical and energy companies based on their alleged contribution to climate conditions that exacerbated the force and effect of Hurricane Katrina. The district court had dismissed the case on political question grounds, but a Fifth Circuit panel reversed — rejecting the political question argument and finding that the plaintiffs had standing. See 585 F.3d 855 (2009).
The en banc Fifth Circuit granted rehearing, although due to several recusals only nine of the sixteen Fifth Circuit judges were able to vote. Then one of those nine judges recused, thus depriving the en banc court of its quorum. However, the quorum-less en banc court chose not to revert to the Fifth Circuit panel’s decision, which would have reversed the district court’s dismissal and remanded the case for further proceedings. Rather, the quorum-less en banc court (per five of the remaining eight judges) dismissed the appeal in its entirety, thereby reinstating a district court ruling that had already been unanimously reversed by a three-judge Fifth Circuit panel. See 607 F.3d 1049 (2010).
In 2011, the plaintiffs filed a new lawsuit alleging many of the same claims. This week, a Fifth Circuit panel affirms the dismissal of that lawsuit, finding it barred by res judicata. In Comer II (No. 12-60291, May 14, 2013), the panel concludes that — despite the unusual chain of events at the Fifth Circuit two years ago — the first lawsuit satisfied all the elements of res judicata: “(1) the parties are identical or in privity; (2) the judgment in the prior action was rendered by a court of competent jurisdiction; (3) the prior action was concluded by a final judgment on the merits; and (4) the same claim or cause of action was involved in both actions.” [Slip Op. 7]
(Hat Tip: David Coale)
Monday, May 13, 2013
SCOTUS cert grant on the ability of in forma pauperis filers to amend their complaints under the Prison Litigation Reform Act
Whether the Sixth Circuit erred in holding—in conflict with all eleven other federal circuit courts of appeals—that the in forma pauperis statute, 28 U.S.C. § 1915(e)(2), prohibits indigent defendants from amending their complaints.
You can find a link to the decision below and the cert-stage briefing at SCOTUSblog’s casefile.
Friday, May 3, 2013
Over at Balkinization, Prof. Jack Balkin (Yale) has a post entitled Erie Railroad v. Tompkins and the New Deal Constitution. It begins:
Last week Richard Epstein and I were on a panel at AEI on the New Deal Constitution, commemorating the 75th anniversary of the decisions in Erie Railroad v. Tompkins and United States v. Carolene Products. The video is available here. Michael Greve kicks it off with a fifteen minute introduction to the two cases; Richard's talk begins about 14:30, and my talk begins about 24:55. I discussed both Erie and Carolene Products in my talk; in this blog post, I will say a few words about Erie.
Erie is often associated with the New Deal, because it resulted in a kind of federal judicial restraint. Henceforth, federal courts had to defer to state common law decisions in diversity cases. Nevertheless, in my talk, I pointed out that Erie's connection to New Deal ideas was quite contingent. If Erie had been decided in 1948, after Darby and Wickard, rather than in 1938, the course of history might have looked very different. It might not have seemed all that important to overrule Swift v. Tyson, and Erie might have come out the other way.