Civil Procedure & Federal Courts Blog

SCOTUS Remands Two Class Actions in the Wake of Comcast Corp. v. Behrend

Yesterday’s Supreme Court order list includes “GVRs” in two class actions, remanding them “for further consideration in light of Comcast Corp. v. Behrend.” The two cases are RBS Citizens, N.A. v. Ross (No. 12-165), which was sent back to the Seventh Circuit, and Whirlpool Corp. v. Glazer (No. 12-322), which was sent back to the Sixth Circuit. For more coverage, check out:

• Lyle Denniston (SCOTUSblog)
• Lawrence Hurley (Reuters)
• Jessie Kokrda Kamens & Martina S. Barash (Bloomberg BNA, Class Action Litigation Report; subscription required)
• Alexandra Lahav (Mass Tort Litigation Blog)

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SCOTUS Cert Grant of Interest: Atlantic Marine Construction v. U.S. District Court

Today the Supreme Court granted certiorari in Atlantic Marine Construction Co. v. U.S. District Court for the Western District of Texas (No. 12-929). The case involves the interplay between forum-selection clauses and motions to transfer venue. Here are the questions presented:

Following the Court’s decision in M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972), the majority of federal circuit courts hold that a valid forum-selection clause renders venue “improper” in a forum other than the one designated by contract. In those circuits, forum-selection clauses are routinely enforced through motions to dismiss or transfer venue under Fed. R. Civ. P. 12(b)(3) and 28 U.S.C. § 1406. The Third, Fifth, and Sixth Circuits, however, follow a contrary rule. This Petition presents the following issues for review:

1. Did the Court’s decision in Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), change the standard for enforcement of clauses that designate an alternative federal forum, limiting review of such clauses to a discretionary, balancing-of-conveniences analysis under 28 U.S.C. § 1404(a)?

2. If so, how should district courts allocate the burdens of proof among parties seeking to enforce or to avoid a forum-selection clause?

You can find a link to the Fifth Circuit’s decision below and other information about the case at SCOTUSblog’s casefile.

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Appellate Jurisdiction and Guantanamo

This week the U.S. Court of Military Commission Review denied petitions for writs of mandamus filed by the ACLU (order here) and a group of several media outlets (order here) in connection with the military commission trials at Guantanamo Bay, Cuba. The petitions were filed under the All Writs Act [28 U.S.C. § 1651(a)], and challenged a protective order issued by the Military Commission Judge. Among other things, the protective order authorizes automatic closure of proceedings and sealing of records whenever classified information is disclosed, even if the information is publicly known, and prohibits personal testimony by the defendants about their experiences while in U.S. custody.

The Court’s order does not address the merits of the petitioners’ arguments, or whether the All Writs Act is properly invoked in this context. Rather, it concludes that the case “is not ripe for our review.” From the order regarding the media petitioners:

This controversy is not ripe for our review. The judge has issued a protective order in accordance with Military Commission Act (MCA) Sec. 949p-3, 10 U.S.C. §949p-3. Petitioners have not alleged a single instance where the Military Commission Judge has improperly applied Amended Protective Order #1 to deny Petitioners access to information, sufficient to warrant the sort of extraordinary relief petitioners seek. See MCA Sec. 949d(c). See generally Clapper v. Amnesty International, 133 S. Ct. 1138 (2013); Cheney v. United States, 542 U.S. 367 (2004); Am. Civil Liberties Union v. U.S. Dep’t of Def., 628 F.3d 612 (D.C. Cir. 2011) (discussing classified information and Freedom of Information Act).

We emphasize the limited scope of our holding. We are not ruling on the merits of the parties claim that there is writ jurisdiction under the All Writs Act, 28 U.S.C. § 1651(a).

Judge Silliman authored a concurring opinion urging the Court to address whether it has jurisdiction under the All Writs Act and arguing that 28 U.S.C. § 2241(e)(2) “explicitly stripped our Court of such jurisdiction.”

Steve Vladeck (American University) has more coverage at Lawfare.

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SCOTUS Decision in Comcast Corp. v. Berhend

Today the Supreme Court decided Comcast Corp. v. Behrend (No. 11-864), a case challenging a Third Circuit decision affirming certification of an antitrust class action. For our earlier coverage, see here and here. By a 5-to-4 vote, the Court concluded that the class action did not satisfy Rule 23(b)(3). Justice Scalia writes the majority opinion. Here’s an excerpt [Slip Op. 6-7]:

Respondents’ class action was improperly certified under Rule 23(b)(3). By refusing to entertain arguments against respondents’ damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry. And it is clear that, under the proper standard for evaluating certification, respondents’ model falls far short of establishing that damages are capable of measurement on a classwide basis. Without presenting another methodology, respondents cannot show Rule 23(b)(3) predominance: Questions of individual damage calculations will inevitably overwhelm questions common to the class.

The dissenting opinion is co-authored by Justices Ginsburg and Breyer, and joined by Sotomayor and Kagan. Among other things, the dissenters argue that case should have been DIG’ed—that the writ of certiorari should have been dismissed as improvidently granted. [See Dissenting Op. 1-2] They note that the Supreme Court had reformulated the question presented when granting certiorari, but that “our reformulated question was inapt” given Comcast’s failure to preserve certain issues.Turning to Rule 23, the dissenting opinion states:

While the Court’s decision to review the merits of the District Court’s certification order is both unwise and unfair to respondents, the opinion breaks no new ground on the standard for certifying a class action under Federal Rule of Civil Procedure 23(b)(3). In particular, the decision should not be read to require, as a prerequisite to certification, that damages attributable to a classwide injury be measurable “‘on a class-wide basis.’” See ante, at 2–3 (acknowledging Court’s dependence on the absence of contest on the matter in this case); Tr. of Oral Arg. 41. To gain class-action certification under Rule 23(b)(3), the named plaintiff must demonstrate, and the District Court must find, “that the questions of law or fact common to class members predominate over any questions affecting only individual members.” This predominance requirement is meant to “tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation,” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623 (1997), but it scarcely demands commonality as to all questions. See 7AA C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §1778, p. 121 (3d ed. 2005) (hereinafter Wright, Miller, & Kane). In particular, when adjudication of questions of liability common to the class will achieve economies of time and expense, the predominance standard is generally satisfied even if damages are not provable in the aggregate. See Advisory Committee’s 1966 Notes on Fed. Rule Civ. Proc. 23, 28 U. S. C. App., p. 141 (“[A] fraud perpetrated on numerous persons by the use of similar misrepresentations may be an appealing situation for a class action, and it may remain so despite the need, if liability is found, for separate determination of the damages suffered by individuals within the class.”); 7AA Wright, Miller, & Kane §1781, at 235–237. Recognition that individual damages calculations do not preclude class certification under Rule 23(b)(3) is well nigh universal. 

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SCOTUS Decision in Standard Fire Insurance v. Knowles

Today the Supreme Court issued a unanimous decision in Standard Fire Insurance Co. v. Knowles (No. 11-1450), covered earlier here. The Court concludes that removal under the Class Action Fairness Act (CAFA) is proper even if the named plaintiff in a state court class action stipulates that the class will not seek aggregate damages in excess of CAFA’s $5 million threshold.

Justice Breyer’s opinion (a quick read at 7 pages) emphasizes that—prior to class certification—the named plaintiff’s stipulation is not binding on the other class members:

[A] plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified. See Smith v. Bayer Corp., 564 U. S. ___, ___ (2011)…. Because his precertification stipulation does not bind anyone but himself, Knowles has not reduced the value of the putative class members’ claims. For jurisdictional purposes, our inquiry is limited to examining the case “as of the time it was filed in state court,” Wisconsin Dept. of Corrections v. Schacht, 524 U. S. 381, 390 (1998). At that point, Knowles lacked the authority to concede the amount-in-controversy issue for the absent class members. [Slip Op. 4]

Justice Breyer is more sympathetic to a different argument against CAFA jurisdiction. He writes:  

The strongest counterargument, we believe, takes a syllogistic form: First, this complaint contains a presently nonbinding stipulation that the class will seek damages that amount to less than $5 million. Second, if the state court eventually certifies that class, the stipulation will bind those who choose to remain as class members. Third, if the state court eventually insists upon modification of the stipulation (thereby permitting class members to obtain more than $5 million), it will have in effect created a new, different case. Fourth, CAFA, however, permits the federal court to consider only the complaint that the plaintiff has filed, i.e., this complaint, not a new, modified (or amended) complaint that might eventually emerge. [Slip Op. 5-6]

But he is ultimately unpersuaded:

Our problem with this argument lies in its conclusion. We do not agree that CAFA forbids the federal court to consider, for purposes of determining the amount in controversy, the very real possibility that a nonbinding, amount-limiting, stipulation may not survive the class certification process. This potential outcome does not result in the creation of a new case not now before the federal court. To hold otherwise would, for CAFA jurisdictional purposes, treat a nonbinding stipulation as if it were binding, exalt form over substance, and run directly counter to CAFA’s primary objective: ensuring “Federal court consideration of interstate cases of national importance.” §2(b)(2), 119 Stat. 5. It would also have the effect of allowing the subdivision of a $100 million action into 21 just-below-$5-million state-court actions simply by including nonbinding stipulations; such an outcome would squarely conflict with the statute’s objective. [Slip Op. 6]

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Grossi on Gunn v. Minton

Professor Simona Grossi (Loyola Los Angeles) has posted on SSRN a draft of her article, Federal Question Jurisdiction: The Compass, the Maze and the Trap. Here’s the abstract:

On February 20, 2013, the Supreme Court announced its decision in Gunn v. Minton. There the Court revisited the scope of statutory “arising under” jurisdiction in the context of a legal malpractice suit premised on alleged attorney errors committed in a prior patent litigation. The significance of the decision transcends the specific context in which it arose. Although Gunn involved patent law arising under jurisdiction, 28 U.S.C. §1338, that jurisdictional standard is interpreted in precisely the same manner as the identically worded §1331 standard. Hence, the decision in Gunn applies to a full range of federal question cases in which a federal issue is embedded in a state-law claim. In addition, Gunn provides insight into the ongoing clash between principle and docket-management concerns that has become so characteristic of Supreme Court decisions in the realm of procedure.

The Gunn opinion was much anticipated by the legal community since prior decisions by the Court had generated considerable confusion as to the scope of arising under jurisdiction in so-called “federal-ingredient” cases. Some commentators hoped that the Court would adopt the creation test as the exclusive measure of jurisdiction. Others hoped for a clarification of the federal-ingredient test. Still others, like this author, hoped that the Court would redirect the jurisdictional analysis to the traditional fundamental principles that once animated federal question jurisdiction. As I explain in my article, everyone will be disappointed by the result. 

The specific jurisdictional issue in Gunn focused on what had come to be known as the third and fourth prongs of the “Grable test,” namely, whether the federal ingredient embedded in the plaintiff’s state-law claim was substantial and whether the exercise of jurisdiction over that claim would upset the congressionally mandated balance between federal and state courts. Lower courts had been struggling with the interpretation and application of both prongs. Some had adopted detailed and highly technical doctrinal tests that led to counterintuitive results where jurisdiction was denied over concededly “significant” federal questions. Others had adopted a more holistic approach, seemingly designed to apply Grable test and, at the same time, avoid that test’s obvious strictures.Some lower courts actually confessed that the jurisdictional determination was subjective and speculative and that, under similar circumstances, different judges might reach different conclusions. While the Gunn Court did address both Grable prongs, it did little other than endorse its previous iterations of those elements, providing neither a defense for them nor a principled method through which they might be applied. Thus, much of the confusion over federal jurisdictional standards that preceded Gunn remains largely unresolved.

In this article, I begin by assessing the development of statutory arising under jurisdiction from its nineteenth century roots to the Court’s most recent decisions. Here I examine the fundamental-principles compass that was developed by the Court in foundational arising-under cases, and synthesized succinctly by Justice Cardozo in Gully v. First Nat. Bank in Meridian. There the Court endorsed a unified jurisdictional theory that focused on the role of the federal issue in the case, asking whether the case was truly about federal law, for if the case was truly about federal law, the exercise of jurisdiction would be inherently consistent with congressional intent to provide a forum for federal question cases.

With this fundamental-principles model as my foundation, I then examine more recent arising-under cases and show that, beginning in the 1980s, the compass got lost and was replaced by a maze of increasingly complex doctrinal tests disconnected from logical and well-established jurisdictional principles. Here the focus shifted from the federal nature of the controversy to a policy-driven model weighted heavily toward case-management concerns.

Gunn offered the Supreme Court an opportunity to recapture the compass or, at the very least, to provide a comprehensible map that would assist lower federal courts in navigating the judicially created maze. The Court, however, missed that opportunity. Instead, the Court continued along a meandering doctrinal path that diverges from the fundamental principles of jurisdiction and often leads to results inconsistent with the congressionally mandated goal of providing a federal forum for the interpretation and application of the principles of federal law.

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SCOTUS Cert Grant on Personal Jurisdiction & Venue: Walden v. Fiore

Today the Supreme Court granted certiorari in Walden v. Fiore (No. 12-574), a case involving personal jurisdiction and venue. Here are the questions presented:

1. Whether due process permits a court to exercise personal jurisdiction over a defendant whose sole “contact” with the forum State is his knowledge that the plaintiff has connections to that State. 

2. Whether the judicial district where the plaintiff suffered injury is a district “in which a substantial part of the events or omissions giving rise to the claim occurred” for purposes of establishing venue under 28 U.S.C. § 1391(b)(2) even if the defendant’s alleged acts and omissions all occurred in another district.

You can find a link to the 9th Circuit’s opinion below and other information about the case at SCOTUSblog’s casefile.

Here’s a story on the case from the AP.

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More Coverage of Clapper v. Amnesty Int'l

Here are links to some recent coverage of last week’s Supreme Court decision in Clapper v. Amnesty International, which rejected a challenge to federal wiretapping procedures for lack of Article III standing:

• Prof. Vik Amar (UC-Davis), via Justia.com
• Prof. Noah Feldman (Harvard), via Bloomberg

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SCOTUS Decision in Amgen: Class Certification in Securities Fraud Cases

Today the Supreme Court issued its decision in Amgen v. Connecticut Retirement Plans (No. 11-1085), covered earlier here. The basic issue is whether, in a securities fraud case, proof of “materiality” is required in order to certify a class action. The Court splits 6-to-3, with Justice Ginsburg writing the majority opinion (joined by Roberts, Breyer, Alito, Sotomayor, and Kagan). Here’s an excerpt from the first few paragraphs of Justice Ginsburg’s opinion (Slip Op. 2-3):

The issue presented concerns the requirement stated in Rule 23(b)(3) that “the questions of law or fact common to class members predominate over any questions affecting only individual members.” Amgen contends that to meet the predominance requirement, Connecticut Retirement must do more than plausibly plead that Amgen’s alleged misrepresentations and misleading omissions materially affected Amgen’s stock price. According to Amgen, certification must be denied unless Connecticut Retirement proves materiality, for immaterial misrepresentations or omissions, by definition, would have no impact on Amgen’s stock price in an efficient market.

While Connecticut Retirement certainly must prove materiality to prevail on the merits, we hold that such proof is not a prerequisite to class certification. Rule 23(b)(3) requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor of the class. Because materiality is judged according to an objective standard, the materiality of Amgen’s alleged misrepresentations and omissions is a question common to all members of the class Connecticut Retirement would represent. The alleged misrepresentations and omissions, whether material or immaterial, would be so equally for all investors composing the class. As vital, the plaintiff class’s inability to prove materiality would not result in individual questions predominating. Instead, a failure of proof on the issue of materiality would end the case, given that materiality is an essential element of the class members’ securities­fraud claims. As to materiality, therefore, the class is entirely cohesive: It will prevail or fail in unison. In no event will the individual circumstances of particular class members bear on the inquiry.

Essentially, Amgen, also the dissenters from today’s decision, would have us put the cart before the horse. To gain certification under Rule 23(b)(3), Amgen and the dissenters urge, Connecticut Retirement must first establish that it will win the fray. But the office of a Rule 23(b)(3) certification ruling is not to adjudicate the case; rather, it is to select the “metho[d]” best suited to adjudication of the controversy “fairly and efficiently.”

Justice Alito writes a concurring opinion. Justice Scalia writes a dissenting opinion. And Justice Thomas writes a dissenting opinion (joined by Kennedy and partially by Scalia).

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SCOTUS Decision on FRCP 54(d): Marx v. General Revenue Corp.

Yesterday, the Supreme Court issued its decision in Marx v. General Revenue Corp., covered earlier here. Justice Thomas’s majority opinion begins:

Federal Rule of Civil Procedure 54(d)(1) gives district courts discretion to award costs to prevailing defendants“[u]nless a federal statute … provides otherwise.” The Fair Debt Collection Practices Act (FDCPA), 91 Stat. 881, 15 U. S. C. §1692k(a)(3), provides that “[o]n a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney’s fees reasonable in relation to the work expended and costs.” This case pre­sents the question whether §1692k(a)(3) “provides other­wise” than Rule 54(d)(1). We conclude that §1692k(a)(3) does not “provid[e] otherwise,” and thus a district court may award costs to prevailing defendants in FDCPA cases without finding that the plaintiff brought the case in bad faith and for the purpose of harassment.

Justice Sotomayor dissents, joined by Justice Kagan.

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SCOTUS Decision in Clapper v. Amnesty International: Article III Standing

Today the Supreme Court decided Clapper v. Amnesty International (No. 11-1025), covered earlier here. By a 5-to-4 vote, it found that the plaintiffs lacked Article III standing to challenge the 2008 amendments to the Foreign Intelligence Surveillance Act.

Justice Alito wrote the majority opinion (joined by Roberts, Scalia, Kennedy, and Thomas) and Justice Breyer wrote the dissent (joined by Ginsburg, Sotomayor, and Kagan).

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More Coverage of Gunn v. Minton

Here’s some more coverage of last week’s Supreme Court decision in Gunn v. Minton, which addresses Grable and federal question jurisdiction:  

• Prof. Josh Blackman (South Texas)
• Prof. Rodger Citron (Touro), Justia
• Prof. Ronald Mann (Columbia), SCOTUSblog

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SCOTUS Opinion in Gunn v. Minton

Today the Supreme Court issued a unanimous opinion in Gunn v. Minton, covered earlier here and here. The case revisits the recurring problem of when a federal law ingredient in a state law cause of action is sufficient for federal question jurisdiction (cases "arising under" federal law). It's a pretty quick turnaround--oral argument was on January 16.

Chief Justice Roberts authors the opinion, which endorses and applies the test developed eight years ago in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308 (2005). Here’s one colorful passage on Grable [Slip Op. 6], which the Chief distills into a four-part test:

[E]ven where a claim finds its origins in state rather than federal law—as Minton’s legal malpractice claim indisputably does—we have identified a “special and small category” of cases in which arising under jurisdiction still lies.  Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U. S. 677, 699 (2006).  In outlining the contours of this slim category, we do not paint on a blank canvas.  Unfortunately, the canvas looks like one that Jackson Pollock got to first. See 13D C. Wright, A. Miller, E. Cooper, & R. Freer, Federal Practice and Procedure §3562, pp. 175–176 (3d ed. 2008) (reviewing general confusion on question).

In an effort to bring some order to this unruly doctrine several Terms ago, we condensed our prior cases into the following inquiry: Does the “state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities”?  Grable, 545 U. S., at 314.  That is, federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.  Where all four of these requirements are met, we held, jurisdiction is proper because there is a “serious federal interest in claiming the advantages thought to be inherent in a federal forum,” which can be vindicated without disrupting Congress’s intended division of labor between state and federal courts.  Id., at 313–314.

Applying Grable, the Court ultimately concludes that federal jurisdiction did not extend to Minton’s state law malpractice action, even though issues of federal patent law were “necessary” and “actually disputed” for purposes of requirements 1 and 2. As to the third requirement, Chief Justice Roberts writes [Slip Op. 8]:

[T]he federal issue in this case is not substantial in the relevant sense…. As our past cases show, … it is not enough that the federal issue be significant to the particular parties in the immediate suit; that will always be true when the state claim “necessarily raise[s]” a disputed federal issue, as Grable separately requires. The substantiality inquiry under Grable looks instead to the importance of the issue to the federal system as a whole.

The full discussion of the third requirement [Slip Op. 8-12] is worth a read, with some interesting discussion of the possible effect (or lack thereof) of state court malpractice actions on federal patent law and issue preclusion. As to the fourth requirement, the Chief Justice writes:

It follows from the foregoing that Grable’s fourth requirement is also not met. That requirement is concerned with the appropriate “balance of federal and state judicial responsibilities.” Ibid. We have already explained the absence of a substantial federal issue within the meaning of Grable. The States, on the other hand, have “a special responsibility for maintaining standards among members of the licensed professions.” Ohralik v.  Ohio State Bar Assn., 436 U. S. 447, 460 (1978).  Their “interest . . . in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice, and have historically been officers of the courts.”  Goldfarb v. Virginia State Bar, 421 U. S. 773, 792 (1975) (internal quotation marks omitted).

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SCOTUS Decision on Article III & Mootness: Chafin v. Chafin

Yesterday the Supreme Court issued a unanimous decision in Chafin v. Chafin (No. 11-1347), which addresses Article III mootness in the context of the Hague Convention on the Civil Aspects of International Child Abduction.

Chief Justice Roberts wrote the opinion, and Justice Ginsburg authored a concurring opinion that was joined by Justices Scalia and Breyer.

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Judge Rules on Motion to Dismiss Second Amended Complaint in BP Securities Litigation

On February 6, Judge Keith Ellison in the Southern District of Texas granted in part and denied in part defendants' motion to dismiss the Second Amended Complaint in MDL No. 10-md-2185, In re BP p.l.c. Securities Litigation. The ruling was summarized in the National Law Journal as "allow[ing] investors to go forward on claims that BP and former chief executive officer Anthony Hayward misled the public about the scope of BP's operating management system, or OMS—a safety program introduced before the 2010 [Deepwater Horizon] disaster spread millions of gallons of oil throughout the Gulf of Mexico."

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8th Circuit Decertifies Rule 23(b)(3) Class Action Involving Domino's Delivery Drivers

Yesterday the U.S. Court of Appeals for the Eighth Circuit issued its decision in Luiken v. Domino’s Pizza, LLC, which begins: 

The district court certified a Rule 23(b)(3) class of about 1,600 Minnesota delivery drivers employed by Domino’s Pizza LLC between March 6, 2006, and February 28, 2010. The drivers allege that, under Minnesota  law, a fixed delivery charge that customers paid Domino’s was a gratuity wrongfully withheld from them. This court granted an interlocutory appeal and now reverses the class certification.

Coverage here (from Brendan O’Brien, Thomson Reuters).

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(Hat tip: Michelle Olsen, @AppellateDaily)

SCOTUS decision in Already v. Nike: Article III, mootness, and... it's gotta be the shoes

Today the Supreme Court issued its decision in Already, LLC v. Nike, Inc., covered earlier here and here. The unanimous opinion by Chief Justice Roberts begins: “The question is whether a covenant not to enforce a trademark against a competitor’s existing products and any future ‘colorable imitations’ moots the competitor’s action to have the trademark declared invalid.”

Recognizing that “[a] case becomes moot—and therefore no longer a ‘Case’ or ‘Controversy’ for purposes of Article III—when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome” [Slip Op. 4], Chief Justice Roberts proceeds to apply the voluntary cessation doctrine. [Slip Op. 6-14.] He concludes:

Already’s only legally cognizable injury—the fact that Nike took steps to enforce its trademark—is now gone and, given the breadth of the covenant, cannot reasonably be expected to recur. There being no other basis on which to find a live controversy, the case is clearly moot. [Slip Op. 13-14]

There was also no need to remand the case for further proceedings: “The uncontested findings made by the District Court, and confirmed by the Second Circuit, make it absolutely clear this case is moot.” [Slip Op. 15]

Justice Kennedy authors a concurring opinion that is joined by Justices Thomas, Alito, and Sotomayor. He writes [Concurring Op. 2]:

This brief, separate concurrence is written to underscore that covenants like the one Nike filed here ought not to be taken as an automatic means for the party who first charged a competitor with trademark infringement sud­denly to abandon the suit without incurring the risk of an ensuing adverse adjudication. Courts should be well aware that charges of trademark infringement can be disruptive to the good business relations between the manufacturer alleged to have been an infringer and its dis­tributors, retailers, and investors. The mere pendency of litigation can mean that other actors in the marketplace may be reluctant to have future dealings with the alleged infringer.

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The Seventh Circuit Explains “Incidental Monetary Relief” that May be Certified Under Rule 23(b)(2)

A new Case Note posted by the ABA Class Action & Derivative Suits Committee:

Judge Posner's opinion in Johnson v. Meriter Health Services Employee Retirement Plan, No. 12-2216 (7th Cir. Dec. 4, 2012), focuses on one question arguably left open by Wal-Mart Stores v. Dukes – what kind of incidental monetary relief may be certified in a Rule 23(b)(2) case? The Court affirmed the class certification order in this ERISA class action, concluding that the variations and the complexity of the claims did not destroy commonality because the claims of each sub-class were homogeneous. The Court also noted that the Supreme Court's holding that damages could not be sought in a Rule 23(b)(2) action was limited to “monetary relief [which] is not incidental to
the injunctive or declaratory relief.” Here, the plan participants were permitted to seek monetary relief incidental to the declaration of their rights under the subject pension plan. The Court also provided detailed guidance as to calculating this incidental monetary relief where the plaintiffs' claims might require an evidentiary hearing, including certification of a Rule 23(b)(2) class with notice and opt out, bifurcated certification, or damage calculations via a computer program.

Submitted by Jocelyn Larkin, Impact Fund

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SCOTUS Cert Grants of Interest: Hollingsworth v. Perry; U.S. v. Windsor; Oxford Health Plans v. Sutter

The Supreme Court granted certiorari in several cases of interest today. One is Oxford Health Plans LLP v. Sutter (docket no. 12-135), which presents an important question on class-wide arbitration:

Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third Circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively "agreed to authorize class arbitration," Stolt-Nielsen, 130 S. Ct. at 1776, based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract.

Not surprisingly, the cert grants in two cases on same-sex marriage—Hollingsworth v. Perry (docket no. 12-144) and United States v. Windsor (docket no. 12-307)—have garnered considerable attention. The Court asked the parties in these cases to brief some additional questions that may be of particular interest to our readers, including an issue that’s has been all over the Court’s docket this Term – standing.

In Hollingsworth, the Court ordered:

In addition to the question presented by the petition, the parties are directed to brief and argue the following question: whether petitioners have standing under Article III, §2 of the Constitution in this case.

In Windsor, the Court ordered:

In addition to the question presented by the petition, the parties are directed to brief and argue the following questions: Whether the Executive Branch’s agreement with the court below that DOMA is unconstitutional deprives this Court of jurisdiction to decide this case; and whether the Bipartisan Legal Advisory Group of the United States House of Representatives has Article III standing in this case.

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SCOTUS Per Curiam Opinion in Arbitration Case: Nitro-Lift v. Howard

Yesterday the Supreme Court issued a five-page per curiam opinion in Nitro-Lift Technologies L.L.C. v. Howard, granting certiorari and reversing the Oklahoma Supreme Court based on the Federal Arbitration Act. It begins:

State courts rather than federal courts are most frequently called upon to apply the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq., including the Act’s national policy favoring arbitration. It is a matter of great importance, therefore, that state supreme courts adhere to a correct interpretation of the legislation. Here, the Oklahoma Supreme Court failed to do so. By declaring the noncompetition agreements in two employment contracts null and void, rather than leaving that determination to the arbitrator in the first instance, the state court ignored a basic tenet of the Act’s substantive arbitration law. The decision must be vacated.

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