Tuesday, October 14, 2014
The Supreme Court of Ohio issued an interesting decision last week involving standing, subject matter jurisdiction, and whether they can be challenged via Ohio Rule 60(b) after the opportunity for a direct appeal has passed. The case is Bank of America, N.A. v. Kutcha.
Marianna Bettman has an analysis of the opinion, calling it a “Field Day for Civil Procedure Geeks.”
Thursday, August 7, 2014
In Walsh v. U.S. Bank, N.A., No. A13-0742 (Aug. 6, 2014), the Minnesota Supreme Court held:
[W]e now decline to engraft the plausibility standard from Twombly and Iqbal onto our traditional interpretation of Minn. R. Civ. P. 8.01. We decline to do so despite the fact that the relevant text of Fed. R. Civ. P. 8(a)(2) is identical to the text of Minn. R. Civ. P. 8.01. . .
. . . A claim is sufficient against a motion to dismiss for failure to state a claim if it is possible on any evidence which might be produced, consistent with the pleader’s theory, to grant the relief demanded.
Hat tip: James Pielemeier
Thursday, July 31, 2014
A recent opinion from the California Court of Appeals perhaps illustrates the extent to which defendants have been emboldened by the United States Supreme Court's decision striking down personal jurisdiction in Daimler AG v. Bauman.
In Bristol-Myers Squibb Co. v. Superior Court of San Francisco County, No. A140035 (Cal. App. July 30, 2014), BMS filed a petition for writ of mandate to reverse the trial court's ruling upholding personal jurisdiction. The court set the scene:
Defendant Bristol-Myers Squibb Company (BMS) has been sued by dozens of California residents in a coordinated proceeding before the San Francisco Superior Court. They allege defects in Plavix, a drug BMS manufactures and sells throughout the country. Jurisdiction over BMS as to these plaintiffs is conceded. The question presented is whether California also has jurisdiction over BMS regarding identical Plavix defects claims brought by hundreds of non-resident co-plaintiffs, the real parties in interest here (RPI), in the same coordinated proceeding, consistent with the Due Process Clause of the Fourteenth Amendment.
The trial court had upheld general jurisdiction over the non-residents' claims against BMS because:
[I]t had sold in the state nearly $1 billion worth of Plavix between 2006 and 2012 and 196 million Plavix pills between 1998 and 2006, had been registered with the California Secretary of State to conduct business since 1936, maintained an agent for service of process in Los Angeles, operated five offices in California that employed approximately 164 people, employed approximately 250 in-state sales representatives, owned a facility in Milpitas employing 85 people that was used primarily for research, operated other facilities that were used primarily for research and laboratory activities in Aliso Viejo, San Diego and Sunnyvale, and had a small office in Sacramento that was used by the company’s Government Affairs group.
Despite these extensive contacts with California, the appellate court concluded that after Daimler, California could not exercise general jurisdiction over BMS because it was not "at home" in the forum.
All was not lost for the non-resident plaintiffs, however. Turning to specific jurisdiction, the court relied on Keeton v. Hustler Magazine to show that "the doctrine of specific jurisdiction can apply to the claims of a non-resident against a non-resident." Further, the court noted that although the United States Supreme Court has not yet defined "what it means for a suit to 'arise out of' or 'relate' to a defendant’s contacts with the State," California has adopted the “'substantial connection' test, under which the relatedness requirement is satisfied if 'there is a substantial nexus or connection between the defendant’s forum activities and the plaintiff’s claim.'”
The court held that there was a "substantial connection" between BMS' extensive contacts with California and the non-residents' claims of injury involving Plavix:
BMS has “deliberately exploited” the relevant market in the State (Keeton, supra, 465 U.S. at p. 781) for many years, having sold over 196 million Plavix pills in California between 1998 and 2006 and nearly $1 billion worth of Plavix between 2006 and 2012.
Further, plaintiffs allege BMS’s Plavix sales in California have led to injuries to California residents that are the same as those suffered by the RPI.
Finally, the court held that BMS had not satisfied its burden of showing that California's exercise of specific jurisdiction was unreasonable.
Hat tip: Levi Wilkes (St. Thomas J.D. Candidate 2015)
Friday, July 25, 2014
In a 4-3 decision, the Wisconsin Supreme Court has adopted the plausibility pleading standard of the U.S. Supreme Court's opinion in Bell Atlantic Corp. v. Twombly. Data Key Partners v. Permira Advisers LLC, No. 2012AP1967 (Wis. July 23, 2014).
The court reversed the Wisconsin Court of Appeals' ruling that plaintiffs had alleged sufficient facts to show breach of fiduciary duty against the defendants. Wisconsin's pleading rule requires a complaint to contain "[a] short and plain statement of the claim, identifying the transaction or occurrence or series of transactions or occurrences out of which the claim arises and showing that the pleader is entitled to relief." Wis. Stat. § 802.02(1)(a).
The court held that "[p]laintiffs must allege facts that, if true, plausibly suggest a violation of applicable law," stating that "Twombly is consistent with our precedent." The court also asserted that Twombly had overruled Conley v. Gibson. (In my view, however, Twombly only overruled Conley's "no set of facts" standard, not the entire opinion.)
Justice Shirley Abramson, for two other justices, dissented.
I would follow Wisconsin law and conclude that as a general rule, parties need not plead specific facts at the motion-to-dismiss phase. In the instant case, although the plaintiffs raised the business judgment rule in their complaint, the plaintiffs also set forth sufficient facts to plead around the rule and provide notice to the defendants of the claim being alleged.
. . . Under Twombly/Iqbal, federal district courts have increased the rate at which they grant motions to dismiss.
No Wisconsin case has adopted the rule as stated in Twombly and Iqbal. Twombly was not argued or briefed in the instant case. The majority opinion relies on the Twombly heightened pleading standard without any briefing or argument. I have written before that this court should give counsel the opportunity to develop arguments before the court in the adversarial system. . . .
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
Wednesday, May 7, 2014
The State Bar of California has published a proposed formal opinion for public comment on the question, "What are an attorney’s ethical duties in the handling of discovery of electronically stored information?"
The digest of the opinion states:
An attorney’s obligations under the ethical duty of competence evolve as new technologies develop and then become integrated with the practice of law. Attorney competence related to litigation generally requires, at a minimum, a basic understanding of, and facility with, issues relating to e-discovery, i.e., the discovery of electronically stored information (“ESI”). On a case-by-case basis, the duty of competence may require a higher level of technical knowledge and ability, depending on the e-discovery issues involved in a given matter and the nature of the ESI involved. Such competency requirements may render an otherwise highly experienced attorney not competent to handle certain litigation matters involving ESI. An attorney lacking the required competence for the e-discovery issues in the case at issue has three options: (1) acquire sufficient learning and skill before performance is required; (2) associate with or consult technical consultants or competent counsel; or (3) decline the client representation. Lack of competence in e-discovery issues can also result, in certain circumstances, in ethical violations of an attorney’s duty of confidentiality, the duty of candor, and/or the ethical duty not to suppress evidence.
The deadline for public comments is 5 p.m., June 24, 2014.
Friday, January 17, 2014
Professor Ruthann Robson on the Constitutional Law Prof Blog posted on a decision by the Washington State Supreme Court holding that a medical malpractice statute of limitations violated the state constitution. See http://lawprofessors.typepad.com/conlaw/2014/01/equality-and-statutes-of-limitations-in-the-washington-state-supreme-court-.html
Monday, December 2, 2013
See how the Supreme Court of Tennessee addresses these issues in Cooper v. Glasser, __ S.W.3d __, 2013 WL 6174469 (Tenn. Nov. 26, 2013). The opinion is here. It begins:
Wednesday, November 13, 2013
The Fall 2013 newsletter from the ABA Mass Torts Litigation Committee has several blurbs of possible interest to Civil Procedure professors (the summaries below are in the newsletter's words), including:
By Deborah A. Elsasser, Nicholas Magali, and Philip R. Weissman
Some claimants have the opportunity to try their claims in Florida while others will litigate in Italy.
Undoubtedly, the outcome of this case will impact the "jurisdictional gamesmanship" involved with the litigation of mass-torts actions.
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).
Monday, September 30, 2013
Wednesday, September 4, 2013
Jim Vertuno (AP) covers a recent order by a Texas state court judge compelling Lance Armstrong to respond to discovery requests. Here are some excerpts from the report, Judge Orders Armstrong to Answer Doping Questions:
Nebraska-based Acceptance Insurance Holding is seeking the information in its lawsuit to recover $3 million in bonuses it paid Armstrong from 1999 to 2001.***
Travis County District Judge Tim Sulak last week ordered Armstrong to provide documents and written answers to a series of questions by the end of September. The case has been set for trial in April 2014.
The questions seek information dating to 1995 and ask Armstrong to detail who was paid for delivered performance-enhancing drugs, who determined what amount to use and administered them, and who was aware of his drug use. Acceptance specifically asks for information on when and how Armstrong's closest friends, advisers, ex-wife and business partners learned of his doping.
Wednesday, August 21, 2013
JD Supra Law News has a recent post on the new Texas Rules of Civil Procedure, effective March 1, 2013. One change is the tracking of cases depending on the size of the relief requested and creating an "Expedited Action Rule" for claims less than $100,000. "Expedited Actions" are subject to a limit of 15 interrogatories (down from 25) "and only 15 requests for production and 15 requests for admission (both of which were not limited under the old rules)," as well as other time limitations.
Sounds a lot like some of the proposed amendments to the FRCP (reported on here), except the proposed amendments to the FRCP are not limited to claims under $100,000.
Friday, July 19, 2013
Thomas H. Cohen, of the Administrative Office of the U.S. Courts, has posted on SSRN "Litigating Civil Cases in State Intermediate Appellate Courts: Analyzing Decisions to Appeal Civil Trial Verdicts or Judgments and the Impact of Appellate Litigation on Trial Court Outcomes."
In the civil justice system, litigants can file appeals as a means of challenging or modifying trial court verdicts or judgments. In most states, intermediate appellate courts represent the first, and in many cases, final arbiter of review for civil cases decided by bench or jury trial. While prior research on state appellate courts has focused primarily on civil appeals in state courts of last resort, there have been few attempts to examine the appeals process in state intermediate appellate courts. The current research attempts to address this gap by examining a national sample of tort and contract trials concluded in 2005 that were subsequently appealed. Specifically, this paper explores the factors that are related to (1) the rates in which civil trials are appealed to intermediate appellate courts, (2) the likelihood that a civil appeal will be decided on the merits, and (3) the probability of trial court outcomes being reversed at the intermediate appellate court level. The paper provides a roadmap for better understanding the case and litigant level characteristics that drive key decisions in intermediate appellate courts.
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.
Sunday, June 23, 2013
Wednesday, June 12, 2013
From the National Law Journal:
A study released on Tuesday
by the American Constitution Society for Law and Policy identified a
"statistically significant" relationship between ballooning campaign
contributions by business interest to state supreme court candidates and
pro-business decisions by those courts.
Researchers studied more than 2,345 business-related state high court opinions between 2010 and 2012 and campaign contributions during that same time to sitting state high court judges. As the percentage of contributions from business groups went up, the probability of a pro-business vote by judges — defined as any decision that made a business better off — went up as well.
The study's author was Joanna Shepherd, a professor at Emory University School of Law. During a teleconference, she said the findings demonstrated that state court elections were becoming increasingly politicized and expensive. She pointed to surveys showing concern within the judiciary and among the general public about the influence of outside dollars on the courts.
To read more of the article, click here.
Thursday, June 6, 2013
stunning development, the Oklahoma Supreme Court has invalidated a sweeping
tort reform bill passed in 2009. The
particular provision at issue in Douglas
v. Cox Retirement Properties, Inc., 2013 OK 37, a wrongful
death action against a nursing home, was the requirement of an expert's "affidavit
of merit" to be filed with or shortly after the filing of the complaint in
a professional negligence claim. When
the plaintiff failed to file the affidavit of merit, the trial court granted
defendant's motion to dismiss. The
Oklahoma Supreme Court reversed.
The expert affidavit of merit requirement was just one portion of Oklahoma H.B. 1603, the so-called Comprehensive Lawsuit Reform Act of 2009. The bill has 90 separate sections encompassing such disparate topics as transfer of cases, limitations on noneconomic damages, suing fast food providers, and a host of other provisions. The court held that H.B. 1603 violated Article 5, Section 57 of the Oklahoma Constitution ("Every act of the Legislature shall embrace but one subject, which shall be clearly expressed in its title"), commonly known as the single-subject rule. "The purposes of the single-subject rule are to ensure the legialtors or voters of Oklahoma are adequately notified of the potential effect of the legislation and to prevent logrolling."
A separate opinion, Wall v. Marouk, 2013 OK 36 (June 4, 2013), also invalidated the affidavit of merit requirement in a medical malpractice action. The court held that the requirement violated two other Oklahoma constitutional provisions, one prohibiting "special laws" (Okla. Const. art. 5, §46), and the other guaranteeing right of access to the courts (Okla. Const. art. 2, §6).
Saturday, May 4, 2013
Plaintiff is a director of the defendant Company, a Delaware corporation, and he owns an entity that was the Company's largest shareholder. The remaining directors of the Company are also defendants. The Board of Directors established a Special Committee to explore strategic alternatives for the Company. Plaintiff was a member of the Special Committee. Later, the entity owned by Plaintiff announced it would nominate candidates for election at the Company's annual meeting. The defendants then secretly "sprang into action" and 11 days later, Company counsel notified Plaintiff by email that a special Board meeting would occur the next day to approve a recapitalization in which an entity controlled by one of the defendants would emerge as the largest shareholder of the Company. At meetings of the Special Committee and the Board of Directors the next day, the recapitalization was approved over Plaintiff's negative vote. The day after that, the Company announced the recapitalization and also announced that it was postponing the annual meeting and deferring the record date. That same day, Plaintiff filed suit challenging the recapitalization and the postponement of the annual meeting and record date.
Plaintiff subpoenaed counsel to the Company and to the Special Committee for documents relating to the planning and scheduling of the special meetings and the structuring of the recapitalization. Defendants asserted the attorney-client privilege and work product protection.
The court granted Plaintiff's motion to compel, holding that until the day the Board voted to approve the recapitalization, the Company could not assert either privilege against Plaintiff, who was a director of the Company. After the Board voted to recapitalize, however, sufficient adversity existed between Plaintiff and the Company such that Plaintiff could no longer have a reasonable expectation that he was a client of the Board's counsel. Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (Delaware Court of Chancery, April 17, 2013).
Friday, April 5, 2013
Another Semtek in the Making? Delaware Supreme Court Holds Collateral Estoppel Bars Shareholder Derivative Suit
Allergan, the pharmaceutical company, agreed to pay $600 million in civil and criminal fines after a Department of Justice investigation into the company's allegedly improper marketing of BOTOX for off-label uses. Several Allergan shareholders then filed shareholder derivative suits, some in federal district court in California (which were consolidated) and one in Delaware Chancery Court. Allergan moved to dismiss both actions for failure to plead demand futility under Rule 23.1 (the Delaware rule is "substantially the same" as Federal Rule 23.1).
The federal court dismissed the California action with prejudice (the dismissal is currently on appeal). The Delaware Chancery Court held that the California judgment did not bar the Delaware action and denied Allergan's motion to dismiss.
On interlocutory appeal, the Delaware Supreme Court reversed. Pyott v. Louisiana Municipal Police Employees' Retirement System, No. 380, 2012 (Del. April 4, 2013). Citing Semtek, the court first held that the preclusive effect of the California judgment would be determined by California state law. The California federal court held, as a matter of Delaware law, that demand was not futile and dismissed the derivative complaint "on the merits of demand futility."
Applying California preclusion law, the Delaware Supreme Court held that the issue of "whether, under Rule 23.1, the failure to make demand on the Allergan board is excused because such a demand would have been futile" was precluded. The court held that "because the real plaintiff in a derivative suit is the corporation, 'differing groups of shareholders who can potentially stand in the corporation's stead are in privity for the purposes of issue preclusion.'"
In addition, the court addressed and rejected plaintiffs' argument that the California plaintiffs' representation was inadequate. The Delaware Chancery Court had applied an irrebutable presumption that derivative plaintiffs who file their complaints without seeking books and records, very shortly after the announcement of a "corporate trauma," are inadequate representatives. The Delaware Supreme Court rejected such an irrebutable presumption.