Monday, June 9, 2014
The opinion of the Massachusetts Appeals Court begins:
The plaintiffs appeal from the denial of their motion for sanctions against Bingham McCutchen LLP (Bingham), intervener, the law firm that defended Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill), in the 2002 jury trial of this action. The plaintiffs claim that in that litigation Bingham wrongfully withheld documents relevant to the issue whether Merrill, in handling the accounts of Benistar Property Exchange Trust Company, Inc. (Benistar), knew that Benistar was trading with money belonging to third parties. We hold that Bingham lacked an adequate legal basis, under the guise of the work product doctrine, for its decisions to withhold information that Merrill employees had viewed certain Benistar Web pages describing its business as an intermediary for third-party funds and then to present a defense claiming that no Merrill employees had viewed the very same Web pages. As a result, we vacate that portion of the final judgment entering judgment in favor of Bingham on the plaintiffs' motion for sanctions. As explained below, there remain certain issues that require resolution by a fact finder, and thus, we remand for further proceedings consistent with this opinion.
Cahaly v. Benistar Property Exchange Trust Co., Inc. No. 12-P-956 (Mass. Ct. App. June 6, 2014).
Hat tip: The American Lawyer
Tuesday, June 3, 2014
Some people really, really want to be in federal court instead of state court. In Arnold Crossroads v. Gander Mountain, No. 13-2020 (8th Cir. Jun. 2, 2014), defendant Gander tried and failed to remove the case three times. Plaintiff filed this breach-of-lease case on February 24, 2009 in Missouri state court, seeking one month's damages of $40,000. Defendant's first attempt at removal on the basis of diversity failed for lack of the amount-in-controversy requirement. Defendant then filed a declaratory judgment action in federal court, which was dismissed on abstention grounds in light of the pending state case.
Plaintiff eventually amended its complaint to seek millions of dollars in damages for breach of the lease's entire 15-year period, and defendant attempted to remove again, but this time failed because the effort to remove was untimely under 28 U.S.C. §1446 (one year for diversity actions).
A year later, the City where the lease was to have operated intervened as a plaintiff, seeking $750,000 from defendant. Defendant attempted a third time to remove, purporting to remove only the City. The federal district court once again remanded, and defendant appealed.
The Eighth Circuit dismissed the appeal for lack of appellate jurisdiction under 28 U.S.C. §1447(d) (an order remanding a case to the state court from which it has been removed "is not reviewable on appeal or otherwise"), because the district court's remand order was based on the "§1447(c) procedural flaw of untimely removal." Judge Smith dissented: "I would reach the primary issue in this case and hold that Gander can remove the City's claim because that civil action involved a new party who asserted a new and original claim."
Friday, May 30, 2014
The Hastings Law Journal seeks submissions for a symposium on forum selection after Atlantic Marine Construction Co. v. U.S. District Court. The symposium, co-sponsored by the Journal and by UC Hastings College of the Law, will be held at UC Hastings in San Francisco on Friday, September 19, 2014.
Topics may include -- but need not be limited to -- analyses and implications of the Supreme Court’s decision, the sources of law governing forum selection, and issues of private control of litigation more generally. Accepted essays will be published in the Journal in 2015, and invited participants will receive assistance with travel and lodging expenses. Practitioners and others working in the field are welcome to attend.
Abstracts of 2-4 pages should be sent to firstname.lastname@example.org no later than Monday, June 23. Authors of accepted essays will be notified in the first week of July, and completed drafts must be submitted for circulation to symposium participants by Friday, September 5.
Wednesday, May 28, 2014
Tired of using Mosley v. General Motors for an illustration of joinder under Rule 20? The D.C. Circuit has provided a great new case. The court quaintly began its opinion:
Generally speaking, our federal judicial system and the procedural rules that govern it work well, allowing parties to resolve their disputes with one another fairly and efficiently. But sometimes individuals seek to manipulate judicial procedures to serve their own improper ends. This case calls upon us to evaluate—and put a stop to— one litigant’s attempt to do just that.
AF Holdings, LLC v. Does 1-1058, No. 12-7135 (D.C. Cir. May 27, 2014).
Plaintiff AF Holdings, represented by a law firm related to one that was called a "porno-trolling collective" in another case, allegedly (there was some question of forgery) acquired the copyright to a pornographic film called "Popular Demand." It sued 1,058 "John Doe" defendants in federal court in D.C. for copyright infringement for downloading the film on a file-sharing service known as BitTorrent.
Moving for leave to take immediate discovery, AF Holdings then sought to serve subpoenas on the five Internet service providers linked to the 1,058 IP addresses it had identified: Cox Communications, Verizon, Comcast, AT&T, and Bright House Networks. The district court granted the motion . . . . The providers refused to comply. Invoking Federal Rule of Civil Procedure 45(d)(3)(A), . . . they asserted that the administrative expense involved was necessarily an “undue burden” because AF Holdings had failed to establish that the court would have personal jurisdiction over the defendants or that venue would lie in this district. . . . The providers also argued that any burden was necessarily undue because AF Holdings had failed to provide any reason to think that joinder of these 1,058 defendants in one action was proper. The district court rejected these arguments, . . . [but] certified its order for immediate appeal.
The D.C. Circuit vacated, holding that AF Holdings had failed to make a threshold showing of a good faith belief that the discovery would enable it to show that the court had personal jurisdiction over the unknown defendants; thus, the information sought from the service providers was not relevant.
The court then turned "to the question of joinder, which provides a separate and independent ground for reversal":
. . . Federal Rule of Civil Procedure 20(a)(2) sets forth that multiple defendants may be joined in one action if the plaintiff seeks relief “with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences” and “any question of law or fact common to all defendants will arise in the action.” In a multi-Doe copyright infringement lawsuit such as this, at least one issue of law or fact will generally be common to all defendants—here, that issue might be whether AF Holdings has a valid copyright in Popular Demand. But whether all of these Doe defendants could possibly have been a part of the same “transaction, occurrence, or series of transactions or occurrences” so as to support joinder is a more difficult question. . . . For purposes of this case, we may assume that two individuals who participate in the same swarm [a type of peer-to-peer file sharing] at the same time are part of the same series of transactions within the meaning of Rule 20(a)(2). In that circumstance, the individuals might well be actively sharing a file with one another, uploading and downloading pieces of the copyrighted work from the other members of the swarm. But AF Holdings has provided no reason to think that the Doe defendants it named in this lawsuit were ever participating in the same swarm at the same time.
The D.C. Circuit left the question of sanctions to the district court on remand.
Tuesday, May 27, 2014
Today the Supreme Court issued a unanimous decision in Wood v. Moss, with Justice Ginsburg authoring the opinion for the Court. As covered earlier here, Wood v. Moss is a Bivens case brought by plaintiffs who had been protesting against President George W. Bush during his 2004 visit to a restaurant in Oregon. The plaintiffs claim that the defendants, who were secret service agents, violated their First Amendment rights by moving them farther away from the President than a similar group that was expressing support for the President.
In today’s decision, the Court unanimously rules that the defendants are protected by qualified immunity. To most, this conclusion did not come as a surprise. For many proceduralists, however, the case was of particular interest because of its potential effect on pleading standards in the wake of Twombly and Iqbal. Here’s how Justice Ginsburg puts things in footnote 5: “In ruling on a motion to dismiss, we have instructed, courts ‘must take all of the factual allegations in the complaint as true,’ but ‘are not bound to accept as true a legal conclusion couched as a factual allegation.’ Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).” And on page 12: “[U]nder the governing pleading standard, the ‘complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’ Iqbal, 556 U.S., at 678 (internal quotation marks omitted).”
Part II.B of the opinion contains the most detailed discussion of qualified immunity and its requirement that a plaintiff’s claim be based on a right that was “clearly established at the time of the challenged conduct.” [p.12]. Among other things, Justice Ginsburg writes:
“No decision of which we are aware ... would alert Secret Service agents engaged in crowd control that they bear a First Amendment obligation to ensure that groups with different viewpoints are at comparable locations at all times. ... No clearly established law, we agree, required the Secret Service to interfere with even more speech than security concerns would require in an attempt to keep opposing groups at roughly equal distances from the President. And surely no such law required the agents to attempt to maintain equal distances by prevailing upon the President not to dine at the Inn. [pp.14-15 (citations and internal quotation marks omitted)]”
Part III of the opinion addresses a potentially distinct theory of liability, and that part of the opinion may prove more instructive on pleading standards generally. Part III begins: “The protesters allege that, when the agents directed their displacement, the agents acted not to ensure the President’s safety from handguns or explosive devices. Instead, the protesters urge, the agents had them moved solely to insulate the President from their message, thereby giving the President’s supporters greater visibility and audibility.” [pp.15-16] Justice Ginsburg does recognize the possibility that “clearly established law proscribed the Secret Service from disadvantaging one group of speakers in comparison to another if the agents had no objectively reasonable security rationale for their conduct, but acted solely to inhibit the expression of disfavored views.” [p.16 (citations and internal quotation marks omitted)] She rejects this theory, however, noting that a map of the relevant area that the plaintiffs had included in their complaint “undermines the protesters’ allegations of viewpoint discrimination as the sole reason for the agents’ directions”; the map “corroborates that, because of their location, the protesters posed a potential security risk to the President, while the supporters, because of their location, did not.” [p.16]
Although the plaintiffs “make three arguments to shore up their charge that the agents’ asserted security concerns are disingenuous,” [p.16] Justice Ginsburg is not persuaded. In particular, she writes:
“[A]s the map attached to the complaint shows, see supra, at 4, when the President reached the patio to dine, the protesters, but not the supporters, were within weapons range of his location. See supra, at 14. Given that situation, the protesters cannot plausibly urge that the agents had no valid security reason to request or order their eviction.” [p.18 (citations and internal quotation marks omitted)]
One of the many questions that has vexed courts, commentators, and practitioners after Twombly and Iqbal is how to evaluate allegations about a defendant’s intent. Although the 2002 decision in Swierkiewicz v. Sorema suggested a very lenient approach to such allegations, many have read Iqbal – which also involved allegations of discriminatory animus – to require a stricter approach. At first glance, Wood does not seem to provide a conclusive resolution. Although the Court rejects the plaintiffs’ viewpoint-discrimination theory, Justice Ginsburg relies heavily on the fact that material in the complaint itself – the map of the relevant area – “undermines the protesters’ allegations of viewpoint discrimination as the sole reason for the agents’ directions.” [p.16] This is not likely be a regular occurrence in cases involving discriminatory intent. Another feature of Wood may be even more important. Given Justice Ginsburg’s reasoning regarding qualified immunity, the plaintiffs would have had to show that “the agents had no objectively reasonable security rationale.” [p.16] Part III of the opinion, therefore, did not hinge on the premise that viewpoint discrimination played no role at all in the defendants’ decision; rather – as a matter of the substantive law governing the defendants’ qualified immunity defense – the presence of an objectively reasonable security rationale doomed the plaintiffs’ claims even if viewpoint discrimination also played a role.
PS: Readers may have noticed Adam Liptak’s recent New York Times article describing how Supreme Court opinions can be revised by the Justices after they are initially issued – sometimes years later. For what it’s worth, then, I’m including in this post not only the relevant link to the opinion on the Supreme Court’s website, but also a downloaded version of the opinion as it originally appeared there this morning:
Tuesday, April 29, 2014
Today the Supreme Court issued unanimous decisions in Octane Fitness v. Icon Health and Fitness (No. 12-1184) and Highmark Inc. v. Allcare Management Systems, Inc. (No. 12-1163), two cases on fee-shifting in patent cases. Both opinions were authored by Justice Sotomayor.
The Octane Fitness opinion begins:
Section 285 of the Patent Act authorizes a district court to award attorney’s fees in patent litigation. It provides, in its entirety, that “[t]he court in exceptional cases may award reasonable attorney fees to the prevailing party.” 35 U. S. C. §285. In Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F. 3d 1378 (2005), the United States Court of Appeals for the Federal Circuit held that “[a] case may be deemed exceptional” under §285 only in two limited circumstances: “when there has been some material inappropriate conduct,” or when the litigation is both “brought in subjective bad faith” and “objectively baseless.” Id., at 1381. The question before us is whether the Brooks Furniture framework is consistent with the statutory text. We hold that it is not. [Slip Op., p.1]
Rather, as Justice Sotomayor explains:
[A]n “exceptional” case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances. As in the comparable context of the Copyright Act, “‘[t]here is no precise rule or formula for making these determinations,’ but instead equitable discretion should be exercised ‘in light of the considerations we have identified.’” Fogerty v. Fantasy, Inc., 510 U. S. 517, 534 (1994). [pp.7-8 (footnote omitted)]
And here’s how the Highmark opinion begins:
We granted certiorari to determine whether an appellate court should accord deference to a district court’s determination that litigation is “objectively baseless.” On the basis of our opinion in Octane Fitness, LLC v. ICON Health & Fitness, Inc., ante, p. ___, argued together with this case and also issued today, we hold that an appellate court should review all aspects of a district court’s §285 determination for abuse of discretion. [Slip Op., p.1]
Monday, April 7, 2014
Today the Supreme Court granted certiorari in Dart Cherokee Basin Operating Co. v. Owens (No. 13-719). Here is the question presented that appears in the cert. petition (like many cert. petitions these days, it includes a few paragraphs of prologue before the “question” is “presented”)…
A defendant seeking removal of a case to federal court must file a notice of removal containing “a short and plain statement of the grounds for removal” and attach only the state court filings served on such defendant. 28 U.S.C. § 1446(a). Consistent with that statutory pleading requirement, the First, Fourth, Fifth, Seventh, Eighth, Ninth, and Eleventh Circuits require only that a notice of removal contain allegations of the jurisdictional facts supporting removal; those courts do not require the defendant to attach evidence supporting federal jurisdiction to the notice of removal. District courts in those Circuits may consider evidence supporting removal even if it comes later in response to a motion to remand.
Here, in a clean break from Section 1446(a)’s language and its sister Circuits’ decisions, the Tenth Circuit let stand an order remanding a class action to state court based upon the district court’s refusal to consider evidence establishing federal jurisdiction under the Class Action Fairness Act (CAFA) because that evidence was not attached to the notice of removal. (That evidence, which was not disputed, came later in response to the motion to remand.)
The question presented is:
Whether a defendant seeking removal to federal court is required to include evidence supporting federal jurisdiction in the notice of removal, or is alleging the required “short and plain statement of the grounds for removal” enough?
More information about the case is available at SCOTUSblog.
Wednesday, April 2, 2014
Lost in today's coverage of the campaign finance case might be the fact that SCOTUS has ruled on a preemption issue. In Northwest, Inc. v. Ginsberg, the Court found that the Airline Deregulation Act preempts state common law contract claims for breach of the implied covenant of good faith and fair dealing.
So, in case anyone was ever under the impression that they had any contract rights against an airline for frequent flyer status...now you know.
As for me, I'll just take my privilege in boarding in Group 1. Which, on most airlines, apparently comes third or fourth after several other privileged groups. [sigh.]
Tuesday, April 1, 2014
Rule 52(a) of the Federal Rules of Civil Procedure provides that in matters tried to a district court, the court’s “[f]indings of fact ... must not be set aside unless clearly erroneous.”
The question presented is as follows:
Whether a district court's factual finding in support of its construction of a patent claim term may be reviewed de novo, as the Federal Circuit requires (and as the panel explicitly did in this case), or only for clear error, as Rule 52(a) requires.
More info available at SCOTUSblog.
Tuesday, March 25, 2014
The Supreme Court issued a unanimous decision today in Lexmark International, Inc. v. Static Control Components, Inc. It’s principally a Lanham Act case, but Justice Scalia’s opinion has some interesting discussion on Article III standing, prudential standing, and whether Congress has (or has not) authorized a cause of action [See Part II, pp.6-9]. Justice Scalia recognized that the plaintiff in Lexmark had Article III standing based on its “allegations of lost sales and damages to its business reputation.” [p.6] Although the parties had “treat[ed] the question on which we granted certiorari as one of ‘prudential standing,’” he found this “misleading.” [p.6] Instead, he explained [p.9]:
[T]he question this case presents is whether Static Control falls within the class of plaintiffs whom Congress has authorized to sue under §1125(a). In other words, we ask whether Static Control has a cause of action under the statute.4 That question requires us to determine the meaning of the congressionally enacted provision creating a cause of action. In doing so, we apply traditional principles of statutory interpretation. We do not ask whether in our judgment Congress should have authorized Static Control’s suit, but whether Congress in fact did so. Just as a court cannot apply its independent policy judgment to recognize a cause of action that Congress has denied, see Alexander v. Sandoval, 532 U.S. 275, 286–287 (2001), it cannot limit a cause of action that Congress has created merely because “prudence” dictates.
Footnote 4 states:
We have on occasion referred to this inquiry as “statutory standing” and treated it as effectively jurisdictional. See, e.g., Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 97, and n. 2 (1998); cases cited id., at 114–117 (Stevens, J., concurring in judgment). That label is an improvement over the language of “prudential standing,” since it correctly places the focus on the statute. But it, too, is misleading, since “the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the court’s statutory or constitutional power to adjudicate the case.’ ” Verizon Md. Inc. v. Public Serv. Comm’n of Md., 535 U.S. 635, 642–643 (2002) (quoting Steel Co., supra, at 89); see also Grocery Mfrs. Assn. v. EPA, 693 F.3d 169, 183–185 (Kavanaugh, J., dissenting), and cases cited therein; Pathak, Statutory Standing and the Tyranny of Labels, 62 Okla. L. Rev. 89, 106 (2009).
There’s also a footnote that mentions Iqbal [footnote 6, on p.15]:
Proximate causation is not a requirement of Article III standing, which requires only that the plaintiff ’s injury be fairly traceable to the defendant’s conduct. Like the zone-of-interests test, see supra, at 8–9, and nn. 3–4, it is an element of the cause of action under the statute, and so is subject to the rule that “the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction.” Steel Co., 523 U.S., at 89. But like any other element of a cause of action, it must be adequately alleged at the pleading stage in order for the case to proceed. See Ashcroft v. Iqbal, 556 U.S. 662, 678–679 (2009). If a plaintiff ’s allegations, taken as true, are insufficient to establish proximate causation, then the complaint must be dismissed; if they are sufficient, then the plaintiff is entitled to an opportunity to prove them.
Saturday, March 1, 2014
The Supreme Court, in Chadbourne & Parke LLC v. Troice, in an opinion by Justice Breyer, held that the Securities Litigation Uniform Standards Act of 1998 did not forbid "a class action in which the plaintiffs allege (1) that they 'purchase[d]' uncovered securities (certificates of deposit that are not traded on any national exchange), but (2) that the defendants falsely told the victims that the uncovered securities were backed by covered securities."
An analysis of the opinion is on SCOTUSblog here.
Tuesday, February 25, 2014
Today the Supreme Court issued a unanimous decision in Walden v. Fiore. The case is a Bivens action against an officer involved in seizing cash that the plaintiffs were carrying through the Atlanta airport. Justice Thomas’s unanimous opinion begins: “This case asks us to decide whether a court in Nevada may exercise personal jurisdiction over a defendant on the basis that he knew his allegedly tortious conduct in Georgia would delay the return of funds to plaintiffs with connections to Nevada.” The answer? No. From the final paragraph:
Well-established principles of personal jurisdiction are sufficient to decide this case. The proper focus of the “minimum contacts” inquiry in intentional-tort cases is “‘the relationship among the defendant, the forum, and the litigation.’” Calder, 465 U. S., at 788. And it is the defendant, not the plaintiff or third parties, who must create contacts with the forum State. In this case, the application of those principles is clear: Petitioner’s relevant conduct occurred entirely in Georgia, and the mere fact that his conduct affected plaintiffs with connections to the forum State does not suffice to authorize jurisdiction.
Here are some highlights from the opinion:
Plaintiffs filed class complaints against CarMax, alleging wage and hour violations. The trial court granted CarMax's motion to compel arbitration, and the California Court of Appeals reversed.
SCOTUS granted CarMax's petition for certiorari, vacated the judgment, and remanded the case for further consideration in light of American Express Co. v. Italian Colors Restaurant, 570 U.S. ___ (2013).
Monday, February 24, 2014
Today the Supreme Court denied certiorari in three cases that have come to be known as the “smelly washing machine” class actions. In all three, the lower court certified the class action, and the defendants—invoking Wal-Mart and Comcast—sought certiorari. The cases are:
- Whirlpool Corp. v. Glazer (S.Ct. No. 13-431), from the Sixth Circuit
- Sears Roebuck & Co v. Butler (S.Ct. No. 13-430), from the Seventh Circuit
- BSH Home Appliances Corp. v. Cobb (S.Ct. No. 13-138), from the Ninth Circuit (which did not issue an opinion but denied permission under Rule 23(f) to appeal the district court’s order granting class certification).
Saturday, February 22, 2014
Supplemental Jurisdiction Over State-Law Claim Proper Despite Plaintiff's Statement in Brief of "Dismissal" of Federal Claims
Plaintiff Thomas, a union member and an employee of U.S. Steel, was a team leader at a facility in Minnesota. He had an altercation with one of the employees under his supervision, and that employee reported the incident as harassment. At a fact-finding meeting held to determine what happened, the union representative attending the meeting made several allegedly defamatory comments about plaintiff, such as “[Thomas] has been verbally abusive to others for the past five years,” and plaintiff was thereafter removed from his position as team leader.
In his second amended complaint against the union and the union representative, plaintiff asserted federal labor-law claims and a state-law claim of defamation. The defendants moved for summary judgment on all of the claims. In his memorandum in opposition to the motion, plaintiff stated “the [Collective Bargaining Agreement] is not implicated in any of Plaintiff’s claims and as such [he is] dismissing all claims except the defamation claim . . .” The district court granted summary judgment.
On appeal, the Eighth Circuit sua sponte raised the question of whether the district court maintained subject matter jurisdiction to decide the defamation claim, after plaintiff stated he was dismissing the federal claims. The court held that the district court had jurisdiction: "we are not persuaded that an attempt to dismiss federal claims in a memorandum in opposition to a motion for summary judgment is the equivalent of filing an amended complaint because such act does not satisfy the requirements of Federal Rule of Civil Procedure 15. We therefore hold that because Thomas failed to follow Rule 15’s procedures and nothing in the district court’s order or the record suggests that leave to amend the complaint was granted, the federal claims were not withdrawn from the second amended complaint and remained before the district court until those claims were dismissed by the court in its order. . . . [T]the claims were merely abandoned for purposes of argument, not removed from the second amended complaint."
Having determined that the district court had subject matter jurisdiction, the court further concluded that the district court properly exercised supplemental jurisdiction over Thomas’s state-law defamation claim, “[g]iven the substantial amount of time and judicial resources expended in this case and the well-settled principles of state law concerning defamation."
On the merits of Thomas’s defamation claim, the court reversed the grant of summary judgment, finding genuine issues of material fact. Thomas v. United Steelworkers Local 1938, No. 12-3625 (8th Cir. Feb. 20, 2014).
Saturday, January 25, 2014
In my continuing efforts to make Bitcoin and other cryptocurrencies somehow relevant to this blog, I can report that Kanye West has sued Odaycoins.com, Coinye-Exchange.com, Amazon.com, and others in federal district court in Manhattan (Case Number 1:14-cv-00250, filed January 14, 2014). The suit is for trademark infringement, unfair competition, and dilution and right of publicity violations, arising from Defendants' "initial public offering of a 'block' of cryptocurrency called, interchangeably, COINYE WEST, COINYE and COYE on their website . . . Although Defendants could have chosen any name for their cryptocurrency, they deliberately chose to trade upon the goodwill associated with Mr. West by adopting names that are admitted plays on his name." (Complaint, pp. 1-2.)
In a civil procedure move that our students will likely find interesting, Judge Analisa Torres entered this order:
ORDER GRANTING PLAINTIFFS' EX PARTE APPLICATION FOR PERMISSION TO USE EMAIL AS SERVICE OF PROCESS ON DEFENDANTS AND THIRD PARTIES: that Plaintiffs may serve all legal documents on defendants and third parties by email at email addresses that Plaintiffs ascertain to be valid and operational including, but not limited to the following email addresses: email@example.com; coinyewest@ gmail.com; firstname.lastname@example.org; email@example.com; firstname.lastname@example.org, email@example.com; firstname.lastname@example.org. Such service shall constitute due and sufficient service and notice hereof.
The summonses were returned executed two days later.
Another update in the ongoing jurisdictional battles involving GlaxoSmithKline. Howard Bashman of How Appealing reports that the Third Circuit has allowed plaintiffs to appeal the lawfulness of GSK's diversity re-removals of state court Paxil personal injury cases more than one year after the cases were filed in state court.
Thursday, January 23, 2014
Last week the Supreme Court issued its decision in Daimler AG v. Bauman, a case covered earlier here and here and here. In many ways, the case resembles Kiobel v. Royal Dutch Petroleum, last Term's decision on the Alien Tort Statute (ATS). The Daimler plaintiffs had brought claims under the ATS against Daimler—a German company headquartered in Stuttgart—for human rights and other violations committed by Daimler's Argentinian subsidiary during the "dirty war" of the 1970s and 1980s. The Supreme Court's decision in Daimler, however, is all about personal jurisdiction, and it is not limited to the ATS context.
The Ninth Circuit had held that Daimler was subject to general personal jurisdiction in California based on the activities of its American subsidiary, MBUSA. Because it involves general jurisdiction, Daimler is an important follow-up to the Court's 2011 decision in Goodyear Dunlop v. Brown. Writing for a unanimous Court in Goodyear, Justice Ginsburg explained that general jurisdiction over corporations is proper "when their affiliations with the State are so 'continuous and systematic' as to render them essentially at home in the forum State."
In Daimler, all nine Justices conclude that it would be unconstitutional for California to exercise general jurisdiction over Daimler. Justice Ginsburg again writes for the Court, although Justice Sotomayor writes a separate concurrence that disagrees with much of Justice Ginsburg's reasoning. Parts of the decision—and some of the areas of disagreement—are harder than usual to follow because the parties either conceded or forfeited a number of potentially important points during the course of the litigation [see p.15]. That said, the most significant parts of the Daimler decision address three issues:
(1) When can a subsidiary's activities in the forum state be attributed to the parent for purposes of general jurisdiction?
(2) More generally, when is a corporation subject to general jurisdiction under the Goodyear standard?
(3) What role (if any) do the so-called "reasonableness" factors play in the general jurisdiction context?
Wednesday, January 22, 2014
In Medtronic, Inc. v. Mirowski Family Ventures, LLC, Mirowski licensed its patents relating to implantable heart stimulators to Medtronic, which makes medical devices. Later, Mirowski notified Medtronic that it believed some of Medtronic's new products infringed Mirowski's patents.
Medtronic brought a declaratory judgment action in federal court in Delaware, claiming that its products did not infringe Mirowski's patents and that the patents were invalid. The district court held that Mirowski, as patentee, bore the burden of proving infringement, even though it was the defendant, and Mirowski lost after a bench trial.
The Federal Circuit reversed, holding that Medtronic, the declaratory judgment plaintiff, bore the burden of proving infringement.
The Supreme Court, in a unanimous opinion by Justice Breyer, reversed. First the Court addressed federal jurisdiction. An amicus argued that in a DJA, in order to determine whether the action arose under patent law under Section 1338(a), the court must look to the action that the DJ defendant (the patentee, Mirowski) could have brought in the absence of a DJA. That action, argued the amicus, would be a state-law claim for breach of the license agreement.
The Court agreed that when determining declaratory judgment jurisdiction, courts look to the "character of the threatened action" to see whether it would necessarily present a federal question. However, the Court held that the threatened action would arise under federal patent law, because if Medtronic stopped paying royalties, Mirowski could terminate the license agreement and sue for patent infringement.
Turning to the burden of proof issue, the Court reversed the Federal Circuit:
It is well established that the burden of proving infringement generally rests upon the patentee. . . . We have long considered "the operation of the Declaratory Judgment Act" to be only "procedural." . . . And we have held that "the burden of proof" is a "'substantive' aspect of a claim." . . .
Taken together these three legal propositions indicate that, in a licensee's declaratory judgment action, the burden of proving infringement should remain with the patentee.
Thanks to Professor Ira Nathenson for bringing this case (which perhaps only a Civil Procedure professor could love) to my attention.
Wednesday, January 15, 2014
Supreme Court: Appeal Time Starts Running on Merits Order Despite Pendency of Attorneys' Fees Motion
Here's one of those lawyer's procedural nightmares: an order you believe to be interlocutory actually turns out to be a final decision under 28 U.S.C. §1291, so that the 30-day appeal time has run before you've figured it out.
That's what happened in the third Supreme Court opinion on civil procedure issued this week, Ray Haluch Gravel Co. v. Central Pension Fund. Union-affiliated benefit funds (Respondent Funds) sued Petitioner Haluch, a landscape supply company, for unpaid contributions that the Funds claimed were required under a collective-bargaining agreement, ERISA, and the LMRA. The Funds also sought attorneys' and other fees under ERISA and the CBA itself.
After a bench trial, the district court entered judgment on June 17, 2011, ordering that the Funds were entitled to $26,897.41 in unpaid contributions, which was less than had been requested. The District Court did not rule on the Funds' separate motion for attorney's fees and other costs until July 25, 2011, when it awarded $34,688.15 in attorney's fees, which was about one-quarter of the amount requested.
On August 15, 2011, the Funds appealed from both orders. In the First Circuit, Haluch argued that the June 17 decision on the merits was a final decision under 28 U.S.C. §1291, so that the appeal from that decision, made more than 30 days later, was untimely. The Funds argued that there was no final decision until July 25, when the District Court rendered a decision on their request for attorney's fees and costs. Judge Selya agreed with the Funds, holding the appeal timely on all issues.
The Supreme Court, in a unanimous opinion by Justice Kennedy, reversed:
In Budinich v. Becton Dickinson & Co., 486 U.S. 196, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988), this Court held that a decision on the merits is a “final decision” under § 1291 even if the award or amount of attorney's fees for the litigation remains to be determined. The issue in this case is whether a different result obtains if the unresolved claim for attorney's fees is based on a contract rather than, or in addition to, a statute. The answer here, for purposes of § 1291 and the Federal Rules of Civil Procedure, is that the result is not different. Whether the claim for attorney's fees is based on a statute, a contract, or both, the pendency of a ruling on an award for fees and costs does not prevent, as a general rule, the merits judgment from becoming final for purposes of appeal.