Wednesday, January 16, 2013

The Latest on Federal Question Jurisdiction: From Merrell Dow to Grable to... Gunn v. Minton?

The Supreme Court heard oral argument today in Gunn v. Minton—the latest in the Court’s long-running struggle to define when a federal law ingredient in a state law cause of action is sufficient for federal question jurisdiction (cases "arising under" federal law). 

Here’s the oral argument transcript, which includes this comment from Justice Scalia [p.16 of the transcript]:

"Well, I like -- I like bright-line rules. In fact -- you know, I thought Holmes had it right. It doesn't arise under unless the cause of action is a Federal cause of action."

Justice Thomas is on record as being receptive to the so-called Holmes approach (in his Grable concurrence, 545 U.S. at 320-21). He is not alone, apparently.

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January 16, 2013 in Federal Courts, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Tuesday, January 8, 2013

SCOTUS Oral Argument in Standard Fire v. Knowles

Yesterday the Supreme Court heard oral argument in The Standard Fire Insurance Co. v. Knowles (No. 11-1450), which considers whether plaintiffs can block CAFA removal by stipulating that the class is seeking damages below the $5 million threshold for CAFA diversity jurisdiction. Check out the oral argument transcript.

For additional coverage:

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January 8, 2013 in Class Actions, In the News, Subject Matter Jurisdiction, Supreme Court Cases, Weblogs | Permalink | Comments (0)

Tuesday, December 11, 2012

More on Standing & Jurisdictional Issues in the SCOTUS Same-Sex Marriage Cases

Today the Supreme Court issued an order in United States v. Windsor (docket no. 12-307) appointing Prof. Vicki Jackson (Harvard) “to brief and argue this case, as amicus curiae, in support of the positions that the Executive Branch’s agreement with the court below that DOMA is unconstitutional deprives this Court of jurisdiction to decide this case, and that the Bipartisan Legal Advisory Group of the United States House of Representatives lacks Article III standing in this case.”

For more coverage, check out Lyle Denniston (SCOTUSblog).

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December 11, 2012 in Standing, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Monday, October 8, 2012

SCOTUS Cert Grant of Interest: Gunn v. Minton

Last week the Supreme Court granted certiorari in Gunn v. Minton (No. 11-1118), which presents the question:

Did the Federal Circuit depart from the standard this Court articulated in Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005), for "arising under" jurisdiction of the federal courts under 28 U.S.C. § 1338, when it held that state law legal malpractice claims against trial lawyers for their handling of underlying patent matters come within the exclusive jurisdiction of the federal courts? Because the Federal Circuit has exclusive jurisdiction over appeals involving patents, are state courts and federal courts strictly following the Federal Circuit's mistaken standard, thereby magnifying its jurisdictional error and sweeping broad swaths of state law claims - which involve no actual patents and have no impact on actual patent rights - into the federal courts?

You can find a link to the Texas Supreme Court’s opinion below and other information about the case at SCOTUSblog’s case file.

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October 8, 2012 in Federal Courts, Recent Decisions, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Friday, August 31, 2012

SCOTUS Cert Grant of Interest on CAFA Jurisdiction & Removal: Standard Fire Insurance v. Knowles

Today the Supreme Court granted certiorari in The Standard Fire Insurance Co. v. Knowles (11-1450). Here’s the question presented in the petition for certiorari:

Last Term, this Court held that in a putative class action “the mere proposal of a class . . . could not bind persons who were not parties.” Smith v. Bayer Corp., 131 S. Ct. 2368, 2382 (2011). In light of that holding, the question presented is:

When a named plaintiff attempts to defeat a defendant’s right of removal under the Class Action Fairness Act of 2005 by filing with a class action complaint a “stipulation” that attempts to limit the damages he “seeks” for the absent putative class members to less than the $5 million threshold for federal jurisdiction, and the defendant establishes that the actual amount in controversy, absent the “stipulation,” exceeds $5 million, is the “stipulation” binding on absent class members so as to destroy federal jurisdiction?

You can find links to the lower court opinion and the cert-stage briefing at SCOTUSblog's casefile.

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August 31, 2012 in Class Actions, Recent Decisions, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Monday, June 25, 2012

SCOTUS Cert. Grants of Interest

Today the Supreme Court granted certiorari in a number of cases. Some of these may be of particular interest:

Comcast Corp. v. Behrend (No. 11-864), with certiorari limited to the following question: Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.

Genesis HealthCare Corp. v. Symczyk (No. 11-1059), which presents the question: Whether a case becomes moot, and thus beyond the judicial power of Article III, when the lone plaintiff receives an offer from the defendants to satisfy all of the plaintiff ’s claims.

Another case looks on the surface like it’s about trademark law, but the question presented has a federal courts angle. Already, LLC v. Nike, Inc. (11-982) presents the question: Whether a federal district court is divested of Article III jurisdiction over a party’s challenge to the validity of a federally registered trademark if the registrant promises not to assert its mark against the party’s then-existing commercial activities.

You can find links to the lower court opinions and the cert-stage briefing at the SCOTUSblog casefiles for Comcast v. Behrend; Genesis HealthCare v. Symczyk; and Already v. Nike.

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June 25, 2012 in Class Actions, Federal Courts, Recent Decisions, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Friday, March 9, 2012

Ninth Circuit Holds Parens Patriae Suit Not Removable Under CAFA

In State of Nevada v. Bank of America, No. 12-15005 (Mar. 2, 2012), the Ninth Circuit held that the district court did not have subject matter jurisdiction under either the Class Action Fairness Act or Section 1331 (under Grable & Sons):

The State of Nevada . . .filed this parens patriae lawsuit against Bank of America . . . in Clark County [Nevada] District Court. Nevada alleges that Bank of America misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of the Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. §§ 598.0903-.0999. Nevada also alleges that Bank of America violated an existing consent judgment (“Consent Judgment”) in a prior case between Nevada and several of Bank of America’s subsidiaries, entered in Clark County District Court.

Bank of America removed this action to federal district court, asserting federal subject matter jurisdiction as either a “class action” or “mass action” under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), and as arising under federal law, 28 U.S.C. § 1331. Denying Nevada’s motion to remand, the federal district court concluded that it has jurisdiction over this action as a CAFA “class action,” but not as a “mass action,” and that it also has federal question jurisdiction because resolving the state claims will require an interpretation of federal law.

We granted Nevada’s request for leave to appeal the district court’s denial of its motion to remand pursuant to 28 U.S.C. § 1453(c)(1). We conclude that because parens patriae actions are not removable under CAFA, and the action does not otherwise satisfy CAFA’s “mass action” requirements, the district court lacks jurisdiction under CAFA. We also exercise our interlocutory appellate jurisdiction under 28 U.S.C. § 1453(c) to review the district court’s determination that it has federal question jurisdiction because the complaint references the federal Home Affordable Mortgage Program and the Fair Debt Collection Practices Act. We conclude that the district court lacks federal question jurisdiction [citing Grable & Sons]. Because there is no basis for federal subject matter jurisdiction, this case must be remanded to Nevada state court.

PM

March 9, 2012 in Class Actions, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Tuesday, February 28, 2012

More Kiobel Coverage

Lots of coverage on Kiobel v. Royal Dutch Petroleum, which is being argued today:

One issue that isn’t squarely raised by the questions presented is whether the Alien Tort Statute applies to claims brought by one alien against another (as in Kiobel). Amanda Frost’s Academic Round-up for SCOTUSblog covers an essay by Anthony Bellia and Bradford Clark, which argues that the Alien Tort Statute applies only to claims brought by an alien against a U.S. citizen. Marco Simons has a response on Concurring Opinions.

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February 28, 2012 in In the News, Recent Scholarship, Subject Matter Jurisdiction, Supreme Court Cases, Weblogs | Permalink | Comments (0)

Wednesday, January 18, 2012

SCOTUS Decision in Mims v. Arrow Financial

Today the Supreme Court issued a unanimous decision in Mims v. Arrow Financial Services LLC (covered earlier here), which considers whether federal-question jurisdiction exists under 28 U. S. C. §1331 for claims brought against telemarketers under the Telephone Consumer Protection Act of 1991 (TCPA). The provision of the TCPA that created a private cause of action refers to actions that would be brought in state court. See 47 U. S. C. §227(b)(3) (“A person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an ap­propriate court of that State . . . an action based on a violation of this subsection . . . .”).

In an opinion by Justice Ginsburg, the Supreme Court holds that federal-question jurisdiction is proper under §1331. From the opinion [Slip Op. at 2]:

The question presented is whether Congress’ provision for private actions to enforce the TCPA renders state courts the exclusive arbiters of such actions. We have long recognized that “[a] suit arises under the law that creates the cause of action.” American Well Works Co. v. Layne & Bowler Co., 241 U. S. 257, 260 (1916). Beyond doubt, the TCPA is a federal law that both creates the claim Mims has brought and supplies the substantive rules that will govern the case. We find no convincing reason to read into the TCPA’s permissive grant of jurisdiction to state courts any barrier to the U. S. district courts’ exercise of the general federal-question jurisdiction they have possessed since 1875.

In particular, Justice Ginsburg notes [Slip Op. at 11]: “Title 47 U. S. C. §227(b)(3) does not state that a private plaintiff may bring an action under the TCPA ‘only’ in state court, or ‘exclusively’ in state court.”

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January 18, 2012 in Federal Courts, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Friday, December 9, 2011

"He Signed You, Bill! Now You're A Law!"

With apologies to Schoolhouse Rock for the title of this post, President Obama has signed the Federal Courts Jurisdiction and Venue Clarification Act of 2011, covered earlier here. The law contains many significant provisions regarding federal diversity jurisdiction, removal and remand, and venue. If you’re keeping score, it amends 28 U.S.C. §§ 1332, 1391, 1404, 1441, 1446, and 1453; repeals 28 U.S.C. § 1392; and enacts new code sections 28 U.S.C. §§ 1390 and 1455.

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December 9, 2011 in Current Affairs, Federal Courts, Subject Matter Jurisdiction | Permalink | Comments (0)

Sunday, December 4, 2011

Federal Courts Jurisdiction and Venue Clarification of Act of 2011

This week Congress passed the Federal Courts Jurisdiction and Venue Clarification Act of 2011 (H.R. 394), although it is still awaiting the President's signature. It’s a very important piece of legislation that will be significant for academics and practitioners alike.

Prawfsblawg’s Howard Wasserman (Florida International) has posted a summary of the final bill that was circulated by Arthur Hellman (Pittsburgh). If you want to keep tabs on the bill, check out the Bill Summary & Status here.

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December 4, 2011 in Current Affairs, Federal Courts, Subject Matter Jurisdiction | Permalink | Comments (0)

Saturday, September 3, 2011

Decision of Interest: Circuit Split on Diversity Jurisdiction and National Banks

Yesterday a panel of the U.S. Court of Appeals for the Eighth Circuit issued a 2-1 decision that appears to create (or at least deepen) a circuit split over the citizenship of national banks for purposes of diversity jurisdiction. The case is Wells Fargo Bank, N.A. v. WMR e-PIN LLC, No. 09-3800, 2011 WL 3862589 (Sept. 2, 2011).

Here’s some background: Under 28 U.S.C. § 1348, “[a]ll national banking associations shall . . . be deemed citizens of the States in which they are respectively located.” In Wachovia Bank v. Schmidt, 546 U.S. 303 (2006), the Supreme Court rejected the notion that such a national bank is “located” in every state where it has a branch office, holding instead that a “a national bank, for § 1348 purposes, is a citizen of the State in which its main office, as set forth in its articles of association, is located.” Id. at 307.

The Wachovia decision acknowledged but did not directly confront the question of whether, for purposes of diversity jurisdiction, a national bank is also a citizen of the state where it has its principal place of business (PPB). See id.at 317 n.9. That question could be significant if the bank’s PPB is in a different state than the “main office” listed in its article of association. That’s precisely the issue in Wells Fargo. The party opposite Wells Fargo was a California citizen, and it argued that diversity jurisdiction was lacking because Wells Fargo’s PPB is in California, even though the “main office” set forth in its articles of association is in South Dakota.

The majority opinion in Wells Fargo, authored by Judge Wollman, concludes that a national bank is not a citizen of the state where it’s PPB is located for purposes of diversity jurisdiction. Judge Wollman acknowledges that this holding is contrary to decisions from other circuits such as Horton v. Bank One, 387 F.3d 426 (5th Cir. 2004), and Firstar Bank v. Faul, 253 F.3d 982 (7th Cir.2001), although he asserts that the Seventh Circuit changed course on this issue in Hicklin Engineering v Bartell, 439 F.3d 346 (7th Cir. 2006).

Judge Murphy dissents, arguing that a national bank like Wells Fargo can be a citizen of two states: the state of its PPB and the state where its main office, as listed in its articles of association, is located.

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(Hat Tip: How Appealing)

September 3, 2011 in Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Monday, July 11, 2011

Decision of Interest: Ninth Circuit on the Class Action Fairness Act

The Ninth Circuit’s recent decision in Westwood Apex v. Contreras (No. 11-55362), 2011 WL 1744960, considers which kinds of defendants may remove a class action to federal court under the Class Action Fairness Act’s removal provision (28 U.S.C. § 1453(b)). The opinion by Judge Milan Smith begins:

The Class Action Fairness Act of 2005 (CAFA), Pub. L. No. 109-2, 119 Stat. 4, confers federal jurisdiction over class action lawsuits where the amount in controversy exceeds $5,000,000 and the adversaries are minimally diverse. When a class action satisfying these conditions is filed in state court, Section 5 of CAFA provides that “such action may be removed by any defendant without the consent of all defendants.” 28 U.S.C. § 1453(b). In this appeal, we address whether CAFA Section 5, 28 U.S.C. § 1453(b), allows a party joined to an action as a defendant to a counterclaim (an additional counterclaim defendant) to remove the case to federal court. We hold that § 1453(b) does not permit additional counterclaim defendants to remove an action to federal court, and we affirm the district court’s decision to remand this case to state court.

The court explains:

Continue reading

July 11, 2011 in Class Actions, Federal Courts, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Wednesday, July 6, 2011

SCOTUS Cert Grant of Interest: Mims v. Arrow Financial

Last week the Supreme Court granted certiorari in Mims v. Arrow Financial Services LLC (No. 10-1195), which presents the question: Did Congress divest the federal district courts of their federal-question jurisdiction under 28 U.S.C. § 1331 over private actions brought under the Telephone Consumer Protection Act?

SCOTUSblog’s case file is available here, which contains links to the Eleventh Circuit’s opinion below and the cert-stage briefs.

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July 6, 2011 in Federal Courts, Recent Decisions, Subject Matter Jurisdiction, Supreme Court Cases | Permalink | Comments (0)

Tuesday, June 21, 2011

Johnson on Securities Class Actions in State Court

Professor Jennifer Johnson (Lewis & Clark) has posted on SSRN a draft of her article, Securities Class Actions in State Court, which is forthcoming in the University of Cincinnati Law Review.  Here’s the abstract:

Over the past two decades, Congress has gradually usurped the power of state regulators to enforce state securities laws and the power of state courts to adjudicate securities disputes. This Paper evaluates the impact of Congressional preemption and preclusion upon state court securities class actions. Utilizing a proprietary database, the Paper presents and analyzes a comprehensive dataset of 1500 class actions filed in state courts from 1996-2010. The Paper first examines the permissible space for state securities class actions in light of Congressional preclusion and preemption embodied in the 1998 Securities Litigation Uniform Standards Act (SLUSA) and Class Action Fairness Act of 2005 (CAFA). The Paper then presents the state class action filing data detailing the numbers, classifications, and jurisdictions of state class action cases that now occupy the state forums. First, as expected, the data indicates that there are few traditional stock-drop securities class actions litigated in state court today. Second, in spite of the debate over the impact of SLUSA and CAFA on 1933 Act claims, very few plaintiffs attempt to litigate these matters in state court. Finally, the number of state court class actions involving merger and acquisition (M&A) transactions is skyrocketing and now surpasses such claims filed in federal court. Moreover, various class counsel file their M & A complaints in multiple jurisdictions. The increasingly large number of multi-forum M&A class action suits burden the defendants and their counsel, the judiciary and even plaintiffs’ lawyers themselves. The paper concludes that absent effective state co-ordination, further Congressional preemption is possible, if not likely.

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June 21, 2011 in Class Actions, Recent Scholarship, Subject Matter Jurisdiction | Permalink | Comments (0)

Tuesday, May 24, 2011

Decision of Interest: Fifth Circuit on Mandamus Review of District Court's Refusal to Remand

Last week the U.S. Court of Appeals for the Fifth Circuit issued a decision in In Re Crystal Power Co., Ltd. (No. 11-40115). In March the same panel had issued a writ of mandamus instructing the district court to remand the case to state court (2011 WL 944371). The more recent decision (2011 WL 1833874) withdraws that order and denies the mandamus petition. With some very robust footnotes omitted, Judge Patrick Higginbotham writes:

We are now persuaded that the petition does not meet the stringent demands of the All Writs Act for extraordinary relief. Supreme Court precedent does not ordinarily allow mandamus review of district court decisions that, while not immediately appealable, can be reviewed at some juncture. The Court has instructed that our review of an erroneous refusal to remand must await appeal from a final judgment, even when this forces the parties to submit to proceedings before a tribunal that lacks competent jurisdiction over their dispute. To the same end, the Court has advised that the ordinary costs of trial and appeal are not a sufficient burden to warrant mandamus relief.

Three questions remain. First, whether a zone of review under the All Writs Act remains for cases where post-judgment review of an interlocutory order is an illusion—where the promise of review at some later time is not meaningful. Second, whether mandamus may remain available when delay would cause greater hardship than the normal cost of trying a case to judgment. Third, whether the precedent of this circuit can be defended on these grounds.

Since Crystal Power has not proffered any reason why post-judgment review would be ineffective or why the cost of delay would be atypical, we can leave these questions to another day.

In footnote 5, Judge Higginbotham notes that Supreme Court decisions on the propriety of mandamus relief in this situation "cast a heavy shadow on certain case law of this circuit. See, e.g., In re Hot-Hed, Inc., 477 F.3d 320, 322 (5th Cir. 2007) (granting mandamus where district court’s denial of remand was based on clearly erroneous assertion of federal question jurisdiction); In re Dutile, 935 F.2d 61, 63–64 (5th Cir. 1991) (granting mandamus where district court denied remand on an explicitly non-removable claim). Adding to the confusion, other circuits have held that when a district court denies a motion to dismiss for lack of subject-matter jurisdiction, rather than a motion to remand, mandamus relief may be available. See, e.g., Bell v. Sellevold, 713 F.2d 1396, 1402–05 (8th Cir. 1983); First Jersey Sec., Inc. v. Bergen, 605 F.2d 690, 700–02 (3d Cir. 1979); United States v. Boe, 543 F.2d 151, 157–61 (C.C.P.A. 1976); BancOhio Corp. v. Fox, 516 F.2d 29, 32–33 (6th Cir. 1975); Erie Bank v. U.S. Dist. Ct. for the Dist. of Colo., 362 F.2d 539, 540–41 (10th Cir. 1966)."

Additonal coverage in BNA's U.S. Law Week (79 U.S.L.W. 2566). Six law professors had joined an amicus brief urging rehearing of the Fifth Circuit's earlier ruling.

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May 24, 2011 in Federal Courts, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Monday, March 21, 2011

Decision of Interest: Eighth Circuit on CAFA and 1447(c)'s Remand Deadline

In a decision issued earlier this month, the Eighth Circuit considered the deadline for seeking a remand to state court based on the “Local Controversy” exception to jurisdiction under the Class Action Fairness Act (CAFA). See 28 U.S.C. § 1332(d)(4). The case is Graphic Communications v. CVS Caremark, No. 11-1067 (Mar. 11, 2011), 2011 WL 855672, 2011 U.S. App. LEXIS 4747. The defendant argued that the plaintiffs' remand motion, filed more than three months after removal to federal court, was untimely under 28 U.S.C. § 1447(c), which provides: “A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal.”

The unanimous opinion, authored by Judge Kermit Edward Bye, reasoned that the Local Controversy exception “operates as an abstention doctrine, which does not divest the district court of subject matter jurisdiction.” But the court also held that the applicability of CAFA’s Local Controversy exception “was not a ‘defect’ within the meaning of section 1447(c).” Therefore, § 1447(c)’s 30-day deadline did not apply either.

So what is the deadline? The court explained: “[T]he mere fact that the statutory time limitation on raising motions to remand does not apply does not mean that non-1447(c) remands are necessarily authorized at any time. Indeed, we do not believe the applicable time limitation for the instant motion to remand is equivalent to the anytime-before-judgment (or even on appeal) standard applicable for subject matter jurisdiction.” Instead, a motion to remand based on the local controversy exception must be “brought within a reasonable time frame,” which is the standard “for remands not covered by § 1447(c).” The Eighth Circuit sent the case back to the district court to resolve whether the plaintiffs had filed their remand motion within a “reasonable time frame.”

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(Hat Tip: Scott Dodson)

March 21, 2011 in Class Actions, Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Monday, February 28, 2011

Decision of Interest: More on Removal Deadlines

We covered earlier the Fourth Circuit’s en banc decision in Barbour v. International Union, which perpetuated a circuit split over how to calculate removal deadlines in multiple-defendant cases. That same week, the Ninth Circuit weighed in on the other side of the divide. The decision is Destfino v. Reiswig, 2011 WL 182241, 2011 U.S. App. LEXIS 1375. Per Chief Judge Kozinski:

We adopt the later-served rule as the wiser and more equitable approach. This rule doesn't go so far as to give already-served defendants a new thirty-day period to remove whenever a new defendant is served, as that could give a defendant more than the statutorily prescribed thirty days to remove. See 28 U.S.C. § 1446(b). Rather, we hold that each defendant is entitled to thirty days to exercise his removal rights after being served. Because [the later-served defendant] removed the case within thirty days from when it was served, the removal was timely.

(Hat Tip: Benjamin Roesch)

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February 28, 2011 in Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Tuesday, February 8, 2011

Decision of Interest: En Banc Fourth Circuit Divides Sharply Over Removal Deadline

In its recent decision Barbour v. International Union (2011 WL 242131, 2011 U.S. App. LEXIS 1695), the en banc Fourth Circuit splits 7-5 over how to apply federal removal requirements when faced with “the defendants-served-on-different-days dilemma.” At issue in Barbour are 28 U.S.C. § 1446(b)'s 30-day deadline for removing a state-court case to federal court, and the “rule of unanimity,” which requires that all defendants join in the removal.

The en banc majority in Barbour adopts what it calls the “McKinney Intermediate Rule” (named for an earlier Fourth Circuit decision). From Judge Hamilton's opinion:

“[T]he McKinney Intermediate Rule requires a notice of removal to be filed within the first-served defendant's thirty-day window, but gives later-served defendants thirty days from the date they were served to join the notice of removal.” (emphasis added)

As the Barbour majority acknowledges, this approach conflicts with decisions from several other circuits that use the “Last-Served Defendant Rule,” which allows “each defendant, upon formal service of process, thirty days to file a notice of removal pursuant to § 1446(b).” E.g., Bailey v. Janssen Phramaceutica, Inc., 536 F.3d 1202, 1209 (11th Cir. 2008) (emphasis added). In Barbour, five Fourth Circuit judges (in an opinion authored by Judge Agee) would have followed the Last-Served Defendant Rule.

The Barbour majority recognizes that its rejection of the Last-Served Defendant Rule could deprive later-served defendants of any opportunity to remove a case when an earlier-served defendant misses its 30-day deadline. But it reasons that an earlier-served defendant who fails to remove within the 30-day deadline has, essentially, consented to remain in state court. That consent forecloses removal. As the majority explains: “If the first-served defendant decides not to remove, later-served defendants are not deprived of any rights under § 1446(b), because § 1446(b) does not prevent them from removing the case; rather, it is the rule of unanimity that does.”

So viewed, what later-served defendants are actually losing under the Fourth Circuit approach is “an opportunity to persuade earlier-served defendants to join a notice of removal.” To this point, the majority responds that “it is difficult to believe that Congress intended to protect this power of persuasion when it enacted § 1446(b).”

For additional coverage, see BNA’s U.S. Law Week (79 U.S.L.W. 2013) and How Appealing.

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(Hat Tips: Tom Rowe & Shaun Shaughnessy)

February 8, 2011 in Recent Decisions, Subject Matter Jurisdiction | Permalink | Comments (0)

Monday, January 31, 2011

Walsh on Lack of Subject Matter Jurisdiction over Health Care Reform Challenges

Professor Kevin Walsh (Richmond) has posted on SSRN his essay, The Ghost that Slayed the Mandate. Here’s the abstract:

Virginia v. Sebelius is a federal lawsuit in which Virginia seeks the invalidation of President Obama’s signature legislative initiative of healthcare reform. Virginia seeks declaratory and injunctive relief to vindicate a state statute declaring that no Virginia resident shall be required to buy health insurance. To defend this state law from the preemptive effect of federal law, Virginia contends that the federal legislation’s individual mandate to buy health insurance is unconstitutional. Virginia’s lawsuit is one of the most closely followed and politically salient federal cases in recent times. Yet neither the federal government nor any other legal commentator has previously identified the way in which the very features of the case that contribute to its political salience also require that it be dismissed for lack of statutory subject-matter jurisdiction. The Supreme Court has placed limits on statutory subject-matter jurisdiction over declaratory judgment actions in which a state seeks a declaration that a state statute is not preempted by federal law - precisely the relief sought in Virginia v. Sebelius. These limits insulate federal courts from the strong political forces surrounding lawsuits that seek federal court validation of state nullification statutes. This Essay identifies these heretofore neglected limits, shows why they demand dismissal of Virginia v. Sebelius, and explains why it is appropriate for federal courts to be closed to this type of suit.

(Hat Tip: PrawfsBlawg)

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January 31, 2011 in Federal Courts, Recent Scholarship, Subject Matter Jurisdiction | Permalink | Comments (0)