Thursday, October 13, 2016
Last week, the U.S. Court of Appeals for the Third Circuit issued its decision in Schuchardt v. President of the United States (3d Cir. No. 15-3491). The plaintiff filed a lawsuit challenging NSA surveillance activities, but the district court dismissed for lack of standing. The Third Circuit reversed, with an opinion that begins:
This appeal involves a constitutional challenge to an electronic surveillance program operated by the National Security Agency (NSA) under the authority of Section 702 of the Foreign Intelligence Surveillance Act (FISA). Elliott Schuchardt appeals an order of the United States District Court for the Western District of Pennsylvania dismissing his civil action for lack of jurisdiction. The District Court held that Schuchardt lacked standing to sue because he failed to plead facts from which one might reasonably infer that his own communications had been seized by the federal government. Because we hold that, at least as a facial matter, Schuchardt’s second amended complaint plausibly stated an injury in fact personal to him, we will vacate the District Court’s order and remand.
The court goes on to discuss the Supreme Court’s 2013 decision in Clapper v. Amnesty International USA, as well as the general pleading standard set forth in Twombly and Iqbal.
It’s worth noting that a case similar to Schuchardt is currently pending in the Fourth Circuit. Wikimedia Foundation v. NSA (4th Cir. No. 15-2560) is scheduled for oral argument in December. If readers are interested, below is a link to an amicus brief in the Wikimedia case that I filed on behalf of various civil procedure and federal courts professors:
Wednesday, October 5, 2016
David Shapiro has posted on SSRN his essay, An Incomplete Discussion of “Arising Under” Jurisdiction, which was published in the Notre Dame Law Review. Here’s the abstract:
This essay, a contribution to a Symposium in honor of Professor Daniel Meltzer, focuses on one aspect of federal question jurisdiction – cases in which a question of federal law is “embedded” in a state law cause of action. The essay deals primarily with these cases as they come to the Supreme Court on request for review of a state court decision, but also addresses cases that arise when a party invokes the original or removal jurisdiction of a federal district court. The questions whether and to what extent such cases fall within the constitutional and statutory authority of the federal courts are considered in the historical context of the evolution of Supreme Court decisions, and the interplay of the views over several decades of the author, of Professor Meltzer, and of seven editions of Hart & Wechsler’s “The Federal Courts and the Federal System.”
Tuesday, October 4, 2016
Last week Congress voted to override President Obama’s veto of the Justice Against Sponsors of Terrorism Act (JASTA). Although there’s apparently been some “buyer’s remorse” by members of Congress who voted to override the veto, JASTA’s provisions narrowing sovereign immunity are now in effect.
Among other things, JASTA adds a new provision to Title 28 of the U.S. Code: 28 U.S.C. § 1605B. Subsection (b) of the new provision states:
(b) RESPONSIBILITY OF FOREIGN STATES.—A foreign state shall not be immune from the jurisdiction of the courts of the United States in any case in which money damages are sought against a foreign state for physical injury to person or property or death occurring in the United States and caused by—
(1) an act of international terrorism in the United States; and
(2) a tortious act or acts of the foreign state, or of any official, employee, or agent of that foreign state while acting within the scope of his or her office, employment, or agency, regardless where the tortious act or acts of the foreign state occurred.
Subsection (d) provides: “A foreign state shall not be subject to the jurisdiction of the courts of the United States under subsection (b) on the basis of an omission or a tortious act or acts that constitute mere negligence.’’
Sunday, September 11, 2016
The House Judiciary Committee, Subcommittee on the Constitution and Civil Justice, will hold a hearing on Tuesday, September 13 at 11:00 a.m. on "Exploring Federal Diversity Jurisdiction."
- Mr. Charles Cooper, Partner, Cooper & Kirk, PLLC
- Ms. Joanna Shepherd, Professor of Law, Emory Law School
- Mr. Ronald Weich, Professor of Law, University of Baltimore
In 2014, Mr. Cooper co-authored an article, Complete Diversity and the Closing of the Federal Courts, which argued for minimal diversity as the jurisdictional standard and was published in the Harvard Journal of Law & Public Policy, a forum for conservative scholarship.
In 2015, Professor Shepherd published a study conducted for the National Association of Manufacturers entitled Estimating the Impact of a Minimal Diversity Standard on Federal Court Caseloads, which concluded:
This study shows that concerns of diversity jurisdiction burdening the federal courts are largely unfounded. Empirical analysis of almost 3,600 complaints filed in state court shows that replacing complete diversity with a minimal diversity standard would increase existing federal district court caseloads by less than 8 percent. Distributed evenly over existing federal judgeships, this caseload increase translates into an additional 43 cases per year for each judgeship.
Ronald Weich is the dean of University of Baltimore College of Law.
Hat tip: Altom Maglio.
Friday, September 9, 2016
S.I. Strong has posted on SSRN a draft of her article, Congress and Commercial Trusts: Dealing With Diversity Jurisdiction Post-Americold, which will be published in the Florida Law Review. Here’s the abstract:
Commercial trusts are one of the United States’ most important types of business organizations, holding trillions of dollars of assets and operating nationally and internationally as a “mirror image” of the corporation. However, commercial trusts remain underappreciated and undertheorized in comparison to corporations, often as a result of the mistaken perception that commercial trusts are analogous to traditional intergenerational trusts or that corporations reflect the primary or paradigmatic form of business association.
The treatment of commercial trusts reached its nadir in early 2016, when the U.S. Supreme Court held in Americold Realty Trust v. ConAgra Foods, Inc. that the citizenship of a commercial trust should be equated with that of its shareholder-beneficiaries for purposes of diversity jurisdiction. Unfortunately, the sheer number of shareholder-beneficiaries in most commercial trusts (often amounting to hundreds if not thousands of individuals) typically precludes the parties’ ability to establish complete diversity and thus eliminates the possibility of federal jurisdiction over most commercial trust disputes. As a result, virtually all commercial trust disputes will now be heard in state court, despite their complexity, their impact on matters of national public policy and their effect on the domestic and global economies.
Americold will also result in differential treatment of commercial trusts and corporations for purposes of federal jurisdiction, even though courts and commentators have long recognized the functional equivalence of the two types of business associations. Furthermore, as this research shows, there is no theoretical justification for this type of unequal treatment.
This Article therefore suggests, as a normative proposition, that Congress override Americold and provide commercial trusts with access to federal courts in a manner similar to that enjoyed by corporations. This recommendation is the result of a rigorous interdisciplinary analysis of both the jurisprudential and practical problems created by Americold as a matter of trust law, procedural law and the law of incorporated and unincorporated business associations. The Article identifies two possible Congressional responses to Americold, one involving reliance on minimal diversity, as in cases falling under 28 U.S.C. §§1332(d) and 1369, and the other involving a statutory definition of the citizenship of commercial trusts similar to that used for corporations under 28 U.S.C. §1332(c). In so doing, this Article hopes to place commercial trusts and corporations on an equal footing and avoid the numerous negative externalities generated by the Supreme Court’s decision in Americold.
Tuesday, August 30, 2016
Scott Dodson has posted on SSRN a draft of his article, Jurisdiction and Its Effects, which is forthcoming in the Georgetown Law Journal. Here’s the abstract:
Jurisdiction is experiencing an identity crisis. The Court has given jurisdiction three different identities: jurisdiction as power, jurisdiction as defined effects, and jurisdiction as positive law. These identities are at war with each other, and each is unsustainable on its own. The result has been a breakdown in the application of the basic question of what is jurisdictional and what is not.
I aim to rehabilitate jurisdiction. Jurisdiction is none of the three identities above. Rather, jurisdiction determines forum in a multi-forum system. It seeks not to limit a particular court in isolation but instead to define boundaries and relationships among forums. Because it speaks to relationships generally, jurisdiction exhibits neither unique nor immutable effects. Instead, positive law can prescribe whatever effects - including waivability, forfeitability, and even equitable discretion - best fit a particular jurisdictional rule.
This identity for jurisdiction resolves tensions across a wide range of doctrines. For example, it reconciles personal jurisdiction and original subject-matter jurisdiction as jurisdictional kin, a pair long estranged because of personal jurisdiction’s waivability. Other categorizations are more surprising. For example, venue, abstention, and even the Federal Arbitration Act are all jurisdictional because they select among forums, while Article III standing is non-jurisdictional because it does not. These categorizations are unconventional, but they ultimately produce a more coherent, consistent, and useful jurisdictional identity.
Wednesday, August 24, 2016
Today the U.S. Court of Appeals for the Second Circuit handed down another post-Kiobel decision on the Alien Tort Statute (ATS). Licci v. Lebanese Canadian Bank involves claims against a Lebanese bank alleging that they provided international financial services to Hezbollah that facilitated Hezbollah’s rocket attacks on civilians in Israel.
From the opinion’s introductory paragraphs:
This case is not new to our Court. In fact, this appeal is in its third appearance before us in the last five years. In our prior opinions, we determined (with an assist from the New York Court of Appeals, see Licci v. Lebanese Canadian Bank, SAL, 20 N.Y.3d 327, 339 (2012) (“Licci III”)) that the District Court had personal jurisdiction over defendant LCB, and that subjecting the foreign bank to personal jurisdiction in New York comports with due process protections provided by the United States Constitution. See Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 165 (2d Cir. 2013) (“Licci IV”); Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 73–74 (2d Cir. 2012) (“Licci II”). This case presents a different question: Whether the District Court has subject matter jurisdiction over Plaintiffs’ ATS claims. The District Court dismissed the ATS claims under Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (“Kiobel II”), reasoning that Plaintiffs failed to displace the presumption against extraterritorial application of the ATS. Though we disagree with the District Court’s basis for dismissal, we affirm because the ATS claims seek to impose corporate liability in contravention of our decision in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 145 (2d Cir. 2010) (“Kiobel I”).
Here’s the full opinion:
Particularly notable is the Second Circuit’s discussion of the Supreme Court’s Kiobel decision [pp.18-30 of the opinion], and its conclusion that “Plaintiffs have surpassed the jurisdictional hurdle set forth in Kiobel II, 133 S. Ct. at 1669.”
Monday, August 22, 2016
Earlier this summer, Judge Robert Mariani of the U.S. District Court for the Middle District of Pennsylvania issued an opinion dismissing an Alien Tort Statute claim brought against Muhammed Fethullah Gülen, a Turkish cleric who has been a U.S. permanent resident since the 1990s. (Gülen has been in the news more recently following the attempted coup that took place in Turkey last month; Turkey is currently seeking Gülen’s extradition.)
Judge Mariani’s ruling in Ates v. Gülen contains a detailed discussion of the U.S. Supreme Court’s decision in Kiobel (an important Alien Tort Statute decision from 2013) as well as some of the post-Kiobel case law in the lower federal courts.
Wednesday, July 13, 2016
Fred Smith has posted a draft of his article, Undemocratic Restraint, on SSRN. Here’s the abstract:
For almost two hundred years, a basic tenet of American law has been that federal courts must generally exercise jurisdiction when they possess it. And yet, self-imposed “prudential” limits on judicial power have, at least until recently, roared on despite these pronouncements. The judicial branch’s avowedly self-invented doctrines include some (though not all) aspects of standing, ripeness, abstention, and the political question doctrine.
The Supreme Court recently, and unanimously, concluded that prudential limits are in severe tension with our system of representative democracy because they invite policy determinations from unelected judges. Even with these pronouncements, however, the Court has not eliminated any of these limits. Instead, the Court has recategorized some of these rules as questions of statutory or constitutional interpretation. This raises an important question: When the Court converts prudential limits into constitutional or statutory rules, do these conversions facilitate democracy?
This Article argues that it is unlikely that recategorizing prudential rules will do much to facilitate representative democracy. Worse, constitutionalizing prudential limits reduces dialogue among the branches, and exacerbates some of the most troubling aspects of countermajoritarian judicial supremacy. Further, constitutionalizing judicial prudence has and will make it more difficult for Congress to expand access to American courts for violations of federal rights and norms. When measured against newly constitutionalized limits on judicial power, American democracy is better served by self-imposed judicial restraint, guided by transparency and principle.
Wednesday, May 18, 2016
The Supreme Court issued Spokeo, Inc. v. Robins, No. 13-1339, earlier this week. In a majority opinion unlikely to make anyone happy, the Court vacated the Ninth Circuit’s decision, which held that Robins had adequately alleged Article III standing, and remanded.
A Brief Recap
Robins’ complaint alleged that Spokeo maintained an inaccurate consumer report about him on its website, in violation of the Fair Credit Reporting Act’s requirement that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” In particular, Robins alleged that a photo purporting to be Robins on the site wasn’t him, and that the site incorrectly stated that he was in his 50s, married, employed in a professional or technical field, has children, has a graduate degree, and is in the top 10% for wealth.
The upshot of this disseminated misinformation, Robins alleged, was that when he was “out of work” and “actively seeking employment,” he encountered “[imminent and ongoing] actual harm to [his] employment prospects.”
The Majority Opinion
You wouldn’t know that Robins alleged actual harm to his employment prospects by reading the majority opinion, which didn’t mention it. Instead, the majority opinion by Justice Alito (joined by Roberts, Kennedy, and Thomas and inexplicably by Breyer and Kagan) managed to further stultify constitutional standing doctrine by seizing on the Court’s prior repetition of the phrase “concrete and particularized” in describing the “injury in fact” required for standing. The Court now finds it obvious that these are separate, distinct requirements: (1) concrete and (2) particularized (although the Court cited no case that actually discussed these terms separately). The Ninth Circuit, held the majority, applied the “particularized” branch but not the “concreteness” branch.
Thursday, March 17, 2016
There’s a lot of attention right now on President Obama’s nomination of Merrick Garland to the U.S. Supreme Court. But I wanted to quickly flag last week’s unanimous decision on diversity jurisdiction. Justice Sotomayor’s opinion in Americold Realty Trust v. ConAgra Foods, Inc. begins:
This case asks how to determine the citizenship of a “real estate investment trust,” an inanimate creature of Maryland law. We answer: While humans and corporations can assert their own citizenship, other entities take the citizenship of their members.
The Court reaffirmed the “oft-repeated rule” that unincorporated entities take on the citizenship of all of their members (citing Carden v. Arkoma Associates, 494 U. S. 185 (1990)), and held that the “members” of this sort of Maryland-law entity included all of its shareholders:
In Maryland, a real estate investment trust is an “unincorporated business trust or association” in which property is held and managed “for the benefit and profit of any person who may become a shareholder.” Md. Corp. & Assns. Code Ann. §§8–101(c), 8–102 (2014). As with joint-stock companies or partnerships, shareholders have “ownership interests” and votes in the trust by virtue of their “shares of beneficial interest.” §§8–704(b)(5), 8–101(d). These shareholders appear to be in the same position as the shareholders of a joint-stock company or the partners of a limited partnership—both of whom we viewed as members of their relevant entities. See Carden, 494 U. S., at 192–196; see also §8–705(a) (linking the term “beneficial interests” with “membership interests” and “partnership interests”). We therefore conclude that for purposes of diversity jurisdiction, Americold’s members include its shareholders.
Justice Sotomayor concluded by recognizing—but rejecting—the argument that the citizenship of an unincorporated entity should be determined the same way as a corporation:
We also decline an amicus’ invitation to apply the same rule to an unincorporated entity that applies to a corporation—namely, to consider it a citizen only of its State of establishment and its principal place of business. See Brief for National Association of Real Estate Investment Trusts 11–21. When we last examined the “doctrinal wall” between corporate and unincorporated entities in 1990, we saw no reason to tear it down. Carden, 494 U. S., at 190. Then as now we reaffirm that it is up to Congress if it wishes to incorporate other entities into 28 U. S. C. §1332(c)’s special jurisdictional rule.
Monday, February 22, 2016
The House of Representatives is to consider the so-called Fraudulent Joinder Prevention Act of 2016, H.R. 3624. this week. The bill provides:
Section 1447 of title 28, United States Code, is amended by adding at the end the following:
Sunday, January 31, 2016
A bill to extend federal jurisdiction to claims for theft of trade secrets, the Defend Trade Secrets Act of 2015 (S. 1890), has been reported out of committee to the full chamber. Trade secrets are largely the subject of state law, and the federal courts currently lack jurisdiction of a claim for theft of trade secrets, unless there is diversity of citizenship or joinder with a transactionally-related federal-question claim such as trademark infringement.
The bill is co-sponsored by Republicans and Democrats.
The bill creates a civil action with original federal jurisdiction brought by “an owner of a trade secret that is misappropriated . . . if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” The bill sets conditions for the “seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.”
The bill would also create a cause of action by “a person who suffers damage by reason of a wrongful or excessive seizure.”
One of the remedies that is authorized is, of course, damages:
[a court may] (B) award—
(I) damages for actual loss caused by the misappropriation of the trade secret; and
(II) damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; or
(ii) in lieu of damages measured by any other methods, the damages caused by the misappropriation measured by imposition of liability for a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret . . .
(As an aside: Could (B)(ii) be characterized as an award of statutory damages, currently under attack in the Supreme Court in Spokeo, Inc. v. Robins?)
A brief description of the bill’s background by David J. Kappos, former director of the United States Patent & Trademark Office, is in thehill.com.
Monday, January 25, 2016
SCOTUS Decision in Montgomery v. Louisiana: Supreme Court Jurisdiction, State Courts, and Retroactivity
Today the Supreme Court issued a 6-3 decision in Montgomery v. Louisiana, which involves the retroactive effect of the Supreme Court’s 2012 decision in Miller v. Alabama (where the Court prohibited mandatory sentences of life without the possibility of parole for juveniles).
The case presented both an interesting question of Supreme Court jurisdiction in the context of state collateral review proceedings, and the perennial federal courts challenge of when a new constitutional right applies retroactively. The majority opinion authored by Justice Kennedy (joined by Chief Justice Roberts and Justices Ginsburg, Breyer, Kagan & Sotomayor) concluded:
(1) The Supreme Court had jurisdiction to review a state court’s failure to recognize, in the context of state collateral review, a federal constitutional right that applies retroactively;
(2) Miller did announce “a substantive rule of constitutional law” that applies retroactively; and
(3) A state may remedy a Miller violation by extending parole eligibility to juvenile offenders.
The three dissenters were Justices Scalia, Thomas, and Alito, who disagreed both on jurisdiction and on the merits. Justice Scalia wrote a dissenting opinion that was joined by both Thomas and Alito, and Justice Thomas wrote a separate dissent as well.
Check out Lyle Denniston’s analysis on SCOTUSblog.
Wednesday, January 20, 2016
The Supreme Court issued its decision today in Campbell-Ewald Co. v. Gomez, a closely watched case on class actions, Article III, and mootness (covered earlier here and here). Justice Ginsburg’s majority opinion begins:
Is an unaccepted offer to satisfy the named plaintiff ’s individual claim sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of persons similarly situated? This question, on which Courts of Appeals have divided, was reserved in Genesis HealthCare Corp. v. Symczyk, 569 U. S. ___, ___, ___, n. 4 (2013) (slip op., at 5, 6, n. 4). We hold today, in accord with Rule 68 of the Federal Rules of Civil Procedure, that an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.
Justice Ginsburg’s opinion is joined by Justices Kennedy, Breyer, Sotomayor, and Kagan. Justice Thomas adds a sixth vote, but writes a separate concurring opinion. Chief Justice Roberts writes a dissenting opinion, joined by Justices Scalia and Alito, and Justice Alito writes a dissenting opinion as well.
Friday, January 15, 2016
Whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. § 1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.
You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog.
Tuesday, December 1, 2015
Today the Supreme Court issued its first opinion in an argued case this Term: OBB Personenverkehr AG v. Sachs. In an opinion by Chief Justice Roberts, the Court unanimously held that a lawsuit against the Austrian state-owned railway was barred by Foreign Sovereign Immunities Act. From the opinion:
Respondent Carol Sachs is a resident of California who purchased in the United States a Eurail pass for rail travel in Europe. She suffered traumatic personal injuries when she fell onto the tracks at the Innsbruck, Austria, train station while attempting to board a train operated by the Austrian state-owned railway. She sued the railway in Federal District Court, arguing that her suit was not barred by sovereign immunity because it is “based upon” the railway’s sale of the pass to her in the United States. We disagree and conclude that her action is instead “based upon” the railway’s conduct in Innsbruck. We therefore hold that her suit falls outside the commercial activity exception and is barred by sovereign immunity.
Our earlier coverage is here.
Monday, November 2, 2015
The Supreme Court hears oral argument today in Spokeo, Inc. v. Robins, which presents the question:
Whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.
For our earlier coverage, see here, here, and here. You should also check out Amy Howe’s preview of the argument for SCOTUSblog and the Vanderbilt Law Review’s En Banc Roundtable on the case, available here.
UPDATE: The transcript of the oral argument has now been posted.
Thursday, October 22, 2015
Scott Dodson and Philip Pucillo have posted on SSRN a draft of their recent article, Joint and Several Jurisdiction, which will be published in the Duke Law Journal. Here’s the abstract:
Is federal diversity jurisdiction case-specific or claim-specific? Consider a state-law case in federal court between a Texas plaintiff and two defendants — one from California and the other from Texas. The complete-diversity rule taught to every first-year law student makes clear that, when the diversity defect is noted, the court lacks subject-matter jurisdiction over the action as a whole. The court cannot, therefore, proceed with either claim as long as the nondiverse claim remains. But does the court’s subject-matter jurisdiction nevertheless extend to the diverse claim, such that the case can continue if the spoiler is dismissed? This question is both pervasive and unsettled. We identify and explore two possible answers, each based on a different theory of subject-matter jurisdiction. The first we denote “joint jurisdiction ”— an all-or-nothing theory — under which the presence of a nondiverse claim contaminates the whole case and deprives the court of diversity jurisdiction over diverse claims. The second we denote “several jurisdiction” — a claim-by-claim theory — under which the court lacks subject-matter jurisdiction over the nondiverse claim but always had, and continues to have, diversity jurisdiction over the diverse claim. We show that each theory boasts jurisprudential support, leaving the doctrine ambivalent on a question that affects thousands of cases filed in federal court each year. We then offer a way to reconcile these seemingly incompatible theories and precedent: manipulation of the nonjurisdictional time-of-filing rule. Finally, we discuss how that solution potentially creates new tensions, particularly regarding the notion that a court without subject-matter jurisdiction over an action may nonetheless render a binding adjudication of claims within that action.
Wednesday, October 14, 2015