Monday, November 4, 2013
SCOTUS, Class Actions & Cy Pres: Cert. Denied in Marek v. Lane, but with a Statement by Chief Justice Roberts
Today the Supreme Court denied certiorari in Marek v. Lane (No. 13-136), a closely watched class action against Facebook. Four class members had objected to the settlement of that class action, which included as a cy pres remedy “the establishment of a new charitable foundation that would help fund organizations dedicated to educating the public about online privacy.” The settlement was approved by the district court and on appeal to the Ninth Circuit, prompting a petition for certiorari by one of the objectors.
Scroll to the end of today’s order list, however, and you’ll find a “Statement of Chief Justice Roberts respecting the denial of certiorari.” Here’s the final paragraph of the Chief’s statement:
I agree with this Court’s decision to deny the petition for certiorari. Marek’s challenge is focused on the particular features of the specific cy pres settlement at issue. Granting review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action litigation, including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues. Cy pres remedies, however, are a growing feature of class action settlements. See Redish, Julian, & Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617, 653–656 (2010). In a suitable case, this Court may need to clarify the limits on the use of such remedies.
Sunday, November 3, 2013
We covered earlier the Second Circuit’s order staying District Judge Shira Scheindlin’s rulings in the stop-and-frisk litigation and removing her from the case. For more, here are a few links worth taking a look at:
- Judge Richard G. Kopf (U.S. District Court for the District of Nebraska), Hercules and the Umpire: A cheap shot
- Katherine Macfarlane (Louisiana State University), The Danger of Nonrandom Case Assignment: How the Southern District of New York’s 'Related Cases' Rule has Shaped the Evolution of Stop-and-Frisk Law, Michigan Journal of Race & Law (forthcoming 2014) (an article examining the district court local rule that was mentioned in the Second Circuit’s order)
- Jeffrey Toobin, The New Yorker: The Preposterous Removal of Judge Scheindlin
- Howard Wasserman (Florida International University), PrawfsBlawg: Stays and appellate benchslaps
Thursday, October 31, 2013
Second Circuit Stays SDNY's Stop-and-Frisk Rulings Pending Appeal, Orders District Judge Removed From Case
In August, U.S. District Judge Shira Scheindlin ruled that the New York City Police Department’s “stop and frisk” policy was unconstitutional and ordered a series of remedies. Today the Second Circuit not only stayed Judge Scheindlin’s orders and opinions pending appeal; it also ordered that she be taken off the case. From the Second Circuit’s order (footnotes omitted):
Upon review of the record in these cases, we conclude that the District Judge ran afoul of the Code of Conduct for United States Judges, Canon 2 (“A judge should avoid impropriety and the appearance of impropriety in all activities.”); see also Canon 3(C)(1) (“A judge shall disqualify himself or herself in a proceeding in which the judge’s impartiality might reasonably be questioned . . . .”), and that the appearance of impartiality surrounding this litigation was compromised by the District Judge’s improper application of the Court’s “related case rule,” see Transfer of Related Cases, S.D.N.Y. & E.D.N.Y. Local Rule 13(a), and by a series of media interviews and public statements purporting to respond publicly to criticism of the District Court.
Accordingly, we conclude that, in the interest, and appearance, of fair and impartial administration of justice, UPON REMAND, these cases shall be assigned to a different District Judge, chosen randomly under the established practices of the District Court for the Southern District of New York. This newly-designated District Judge shall implement this Court’s mandate staying all proceedings and otherwise await further action by the Court of Appeals on the merits of the ongoing appeals.
Wednesday, October 23, 2013
We first reported on the Delaware Coalition for Open Government's challenge to the statutorily-mandated confidentiality of court-sponsored arbitrations here, when the federal district court held that the First Amendment mandated public access to the arbitrations.
The Third Circuit has now affirmed that decision:
Because there has been a tradition of accessibility to proceedings like Delaware’s government-sponsored arbitration, and because access plays an important role in such proceedings, we find that there is a First Amendment right of access to Delaware’s government-sponsored arbitrations. We will therefore affirm the order of the District Court.
Delaware Coalition for Open Government v. Strine, No. 12-3859 (3d Cir. Oct. 23, 2013).
Tuesday, October 15, 2013
During last week’s oral argument in Madigan v. Levin (No. 12-872), the Justices revealed some concerns about whether that case was a suitable vehicle for deciding the issues for which the Supreme Court granted certiorari. One such concern—highlighted in a law professor amicus brief—was that the Seventh Circuit lacked appellate jurisdiction to decide the issue.
Today, the Supreme Court dismissed the writ of certiorari as improvidently granted. As is often the case, the Court issued only a one-sentence per curiam opinion: “The writ of certiorari is dismissed as improvidently granted.” (Well, it's two sentences if you count “It is so ordered.”)
Wednesday, October 2, 2013
Judge Posner Admonishes District Court for Dismissing Prisoner's Complaint After Telephonic "Hearing"
The Seventh Circuit, in an opinion by Judge Posner, has ended the "unlawful" practice apparently followed in the Central District of Illinois of the district judge conducting a telephonic "merit-review hearing" shortly after the filing of a civil complaint by a pro se prisoner. In this case, a prisoner filed a pro se §1983 complaint alleging a failure of jail officials to prevent other prisoners from assaulting him. On the basis of the telephonic "hearing" with the prisoner, which was not transcribed, the district court dismissed the prisoner's complaint for failure to state a claim, stating that the plaintiff had "no evidence that the guards . . . had any knowledge of any threat made by the inmate who assaulted him."
Remarking that the "the procedure employed by the judge was inquisitorial" and had "no basis in American law other than in proceedings before some administrative agencies," the court reversed. Williams v. Wahner, No. 12-1886 (7th Cir. Oct. 1, 2013).
Tuesday, October 1, 2013
Today the Supreme Court came back from its summer recess and granted certiorari in eight cases. More information is available from Lyle Denniston at SCOTUSblog. Three of the cases raise interesting procedural issues specific to intellectual property claims:
Monday, September 30, 2013
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:
Monday, September 9, 2013
A divided state Superior Court panel has thrown out a $14.5 million asbestos verdict awarded to the widow of a man who died from mesothelioma, determining that her counsel's suggestion of a specific sum for damages to the jury was improper and that the plaintiff's expert's testimony was inadmissable. Read more . . .
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.
Tuesday, August 27, 2013
Following its decision in Comcast v. Behrend, the Supreme Court remanded a number of class actions for reconsideration (two in April and one in June). Last month, the Sixth Circuit found that class certification remained proper in Glazer v. Whirlpool, a class action involving defective washing machines. The Seventh Circuit has now done the same in a similar washing machine class action against Sears. The entire opinion (Butler v. Sears) is worth a read; Judge Posner’s discussion of Comcast starts on page 5. Here are some excerpts:
Tuesday, August 13, 2013
Here’s Adam Liptak’s latest story, When Lawyers Cut Their Clients Out of the Deal, which discusses a recent Ninth Circuit decision on cy pres settlements that is the subject of a pending Supreme Court cert. petition, Marek v. Lane (No. 13-136).
Monday, August 12, 2013
Hot on the heels of Genesis Healthcare Corp. v. Symczyk, 133 S. Ct. 1523 (2013), comes a new Second Circuit decision heralding the slow strangulation of Fair Labor Standards Act cases: Sutherland v. Ernst & Young LLP, No. 12-304-cv (2d Cir. Aug. 9, 2013).
Plaintiff, a former employee of Ernst & Young, brought a class action on behalf of herself and other similarly situated to recover overtime wages under the FLSA and the New York Department of Labor's Minimum Wage Order. Plaintiff's employment contract, naturally, contained a mandatory arbitration clause that specifically applied to the FLSA and state wage laws, as well as a provision that "disputes pertaining to different employees will be heard in separate proceedings."
Plaintiff's individual alleged unpaid overtime wages were $1,867.02. The district court denied Ernst & Young's motion to dismiss, stay the proceedings, or compel arbitration on an individual bases. The district court reasoned that "[e]nforcement of the class waiver provision in this case would effectively ban all proceeings by [plaintiff] against E&Y."
The Second Circuit reversed. Citing American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), the court held that the "effective vindication doctrine" (which might allow invalidation of a class-action waiver) was not satisfied even if the cost of proceeding individually in arbitration would exceed the potential recovery. Further, the court held that FLSA "does not include a 'contrary congressional command' that prevents a class-action waiver provision in an arbitration agreement from being enforced by its terms."
Thursday, August 8, 2013
The Judicial Panel on Multidistrict Litigation granted three Motions to Centralize and denied eight Motions to Centralize in its July 2013 Hearing Session.
MDL No. 2458 - IN RE: Effexor (Venlafaxine Hydrochloride) Products Liability Litigation (before Judge Rufe in the Eastern District of Pennsylvania)
MDL No. 2455 - IN RE: Stericycle, Inc., Steri-Safe Contract Litigation (before Judge Shadur in the Northern District of Illinois)
MDL No. 2454 - IN RE: Franck's Lab, Inc., Products Liability Litigation (before Judge Engelhardt in the Eastern District of Louisiana)
MDL No. 2469 - IN RE: Capatriti Brand Olive Oil Marketing and Sales Practices Litigation
MDL No. 2467 - IN RE: Bank of America, N.A., Mortgage Corporation Force-Placed Hazard Insurance Litigation
MDL No. 2466 - IN RE: Wells Fargo Bank, N.A., Mortgage Corporation Force-Placed Hazard Insurance Litigation
MDL No. 2465 - IN RE: JPMorgan Chase Bank, N.A., Mortgage Corporation Force-Placed Hazard Insurance Litigation
MDL No. 2464 - IN RE: HSBC Mortgage Corporation Force-Placed Hazard Insurance Litigation
MDL No. 2463 - IN RE: Fresh Dairy Products Antitrust Litigation (No. II)
MDL No. 2453 - IN RE: Adderall XR (Amphetamine/Dextroamphetamine) Marketing, Sales Practices and Antitrust Litigation
MDL No. 2456 - IN RE: Kashi Company Marketing and Sales Practices Litigation
Monday, July 22, 2013
The Northern District of Ohio, supervising multidistrict litigation alleging that Whirlpool's front-loading washing machines allow mold and mildew to grow in the machines, certified a class of Ohio purchasers for liability purposes. The Sixth Circuit affirmed. The Supreme Court granted Whirlpool's petition for certiorari, vacated, and remanded to the Sixth Circuit for reconsideration in light of Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).
The Sixth Circuit just reaffirmed the class certification, despite Amgen and Comcast. Glazer v. Whirlpool Corp., No. 10-4188 (6th Cir. July 18, 2013).
Saturday, July 13, 2013
Nineteen plaintiff families filed a single complaint against Pfizer and other pharmaceutical companies in state court in West Virginia, alleging that Zoloft caused birth defects to children born of women ingesting it. Only one of the plaintiff families was nondiverse from the defendants. A West Virginia state rule required each family to be docketed separately and to pay a separate filing fee, but did not required them to fiile separate complaints.
The pharmaceutical companies removed eighteen of the nineteen families to federal court, alleging diversity jurisdiction. The district court remanded, holding that the action was really one civil action lacking complete diversity, and that the one nondiverse family was not fraudulently joined.
The Fourth Circuit held that the remand order was within the scope of 28 U.S.C. 1447(c) because it was based on the district court's lack of subject matter jurisdiction. Therefore, the remand order was not reviewable on appeal under 28 U.S.C. 1447(d).
Retired Justice Sandra Day O'Connor, sitting by designation, joined the opinion. E.D. v. Pfizer, No. 12-2188 (4th Cir. July 12, 2013).
Wednesday, July 3, 2013
The Legal Intelligencer reports that a Pennsylvania lower court has upheld the statutory $500,000 limit on damages awards against governmental entities, reducing a $14 million award to a plaintiff for loss of her leg, and setting the stage for a constitutional challenge to the damages cap in the Pennsylvania Supreme Court.
Monday, July 1, 2013
Here is the opinion in The Authors Guild, Inc. v. Google Inc. The opinion begins:
We consider in this appeal whether the United States District Court for the Southern District of New York (Denny Chin, Circuit Judge, sitting by designation) erred in certifying the plaintiff class—authors claiming that defendant-appellant Google Inc. committed copyright infringement by copying and displaying “snippets” of millions of books in the Library Project of its Google Books search tool. On the particular facts of this case, we conclude that class certification was premature in the absence of a determination by the District Court of the merits of Google’s “fair use” defense. Accordingly, we vacate the June 11, 2012 order certifying the class and remand the cause to the District Court, for consideration of the fair use issues, without prejudice to any future motion for class certification.