Thursday, August 22, 2013
Alan Trammell (Brooklyn Law School) has posted Jurisdictional Sequencing to SSRN.
This Article offers a critical re-assessment of subject matter jurisdiction, arguably the most fundamental constraint on federal courts. The project examines the nature and purposes of subject matter jurisdiction through the lens of jurisdictional sequencing, a practice that allows a federal court to decide certain issues — and even dismiss cases — before it has verified subject matter jurisdiction.
Despite many scholars’ antipathy toward jurisdictional sequencing, it is a legitimate practice that reveals a nuanced understanding of jurisdiction’s unique structural role in protecting federalism and separation of powers. Specifically, elected institutions have principal responsibility for crafting conduct rules that regulate people’s primary activities. Federal courts may interpret and apply conduct rules — and thus in a meaningful sense “make law” — only when they have verified their subject matter jurisdiction. By contrast, federal adjudication does not implicate the structural concerns at the heart of subject matter jurisdiction when courts dismiss cases based on other rules (what I term allocative rules). Re-imagining the precise role of subject matter jurisdiction reveals how federal courts can decide cases more efficiently and also respect essential constraints on the allocation of powers.
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).
Friday, June 28, 2013
This week the Supreme Court issued its much-anticipated decisions in Windsor v. United States (on the federal Defense of Marriage Act) and Hollingsworth v. Perry (on California’s Prop. 8). Both cases presented significant questions with respect to Article III jurisdiction and standing, which were excellently summarized earlier this year by Marty Lederman’s seven-part series for SCOTUSblog.
In Windsor, a five-Justice majority opinion authored by Justice Kennedy (joined by Ginsburg, Breyer, Sotomayor, and Kagan) found that Article III jurisdiction was proper and that the Court should not invoke prudential grounds to refrain from exercising jurisdiction; the majority then concluded that DOMA was unconstitutional.
In Perry, a five-Justice majority opinion authored by Chief Justice Roberts concluded that the intervenors who supported Proposition 8 lacked Article III standing to challenge the district court’s order declaring Prop. 8 unconstitutional and enjoining California officials from enforcing it. Perry was a particularly interesting 5-4 split: The Chief was joined by Scalia, Ginsburg, Breyer, and Kagan. Justice Kennedy dissented, joined by Thomas, Alito, and Sotomayor.
From a jurisdictional standpoint, one crucial difference was that in Windsor, the federal government enforced DOMA (by denying Windsor the requested refund) and then proceeded to seek review of both the district court and appellate court rulings that DOMA was unconstitutional. As Kennedy puts it: “It would be a different case if the Executive had taken the further step of paying Windsor the refund to which she was entitled under the District Court’s ruling.” In Perry, on the other hand, the California government did not appeal the district court’s order and injunction. Perhaps the standing inquiry in Perry would have come out differently if the California government had adopted a litigation strategy similar to the one the U.S. government took in Windsor.
For anyone counting heads, here’s how each Justice came down on the Article III issues in both cases:
- Kennedy, Alito and Sotomayor supported exercising jurisdiction in both Windsor and Perry. (Alito is somewhat unique as to Windsor, because he argued that the U.S. government “clearly is not a proper petitioner” given its position that DOMA was unconstitutional; he argued instead that jurisdiction was proper because the House of Representatives’ Bipartisan Legal Advisory Group had standing as intervenors.)
- Roberts and Scalia opposed exercising jurisdiction in both Windsor and Perry.
- Ginsburg, Breyer and Kagan supported jurisdiction in Windsor and opposed jurisdiction in Perry.
- Thomas supported jurisdiction in Perry and opposed jurisdiction in Windsor.
Saturday, June 8, 2013
In an absurdly lengthy opinion, which I must admit to only skimming, the Third Circuit has held that a ten-by-ten foot subleased office makes Delaware the principal place of business of a GlaxoSmithKline holding company, and thus upheld diversity jurisdiction over a personal injury action involving thalilomide. (Yes, thalilomide, the anti-nausea-in-pregnancy drug from the late 50's and early 60's that caused birth defects.) Plaintiffs claim to have discovered new evidence showing that defendants were aware of the drug's defects while marketing it. Johnson v. SmithKline Beecham Corp., No. 12-2561 (3d Cir. June 7, 2013.)
The plaintiffs are Pennsylvania citizens and they claimed that four defendants were also Pennsylvania citizens. So when defendants removed the action from Pennsylvania state court, plaintiffs moved to remand. That motion was denied and the issue certified for interlocutory appeal. Apparently the issue of these companies' citizenship for diversity purposes has come up in several other cases and the district court rulings have conflicted.
As a naive law student, I concluded that any corporate structure that I could not understand was up to no good, and I have found no reason to change my mind about this well into middle age. Three of the four defendants that plaintiffs claimed were Pennsylvania citizens are entities affiliated with GlaxoSmithKline plc, the British entity that is the "global head" of the GlaxoSmithKline group of companies. Defendant SmithKline Beecham Corp. was once a Pennsylvania corporation, but it converted in 2009 to a Delaware LLC. As far as I understood, the purpose of the conversion was to avoid "unnecessary tax liability." (Wish I could convert myself to a Delaware LLC!) SmithKline Beecham then dissolved. The court thus held that SmithKline Beecham was not a Pennsylvania citizen because it had converted itself into a new entity, defendant GSK LLC.
GSK LLC operates the US division of GlaxoSmithKline plc. Its headquarters is still in Philadelphia, "where it occupies 650,000 square feet of office space and employs 1,800 people" – the same as when it was still SmithKline Beecham. SmithKline Beecham's board of directors became GSK LLC's "board of managers." Does that mean GSK LLC's principal place of business is still Pennsylvania?
No. As an LLC, GSK LLC's citizenship for diversity purposes is derivative of its owner's (or "member's") citizenship. Its sole member is GSK Holdings, a Delaware corporation with its principal place of business in (according to the Third Circuit) Delaware. GSK Holdings subleases a ten-by-ten foot office in Delaware. It has one employee who works about 20 hours per year. Its three directors hold quarterly 15-30 minute meetings in Delaware (at least one of the directors is usually physically present at the meetings) to discuss GSK Holdings' investments.
As for the fourth defendant at issue, Avantor, it evidently moved its principal place of business to Pennsylvania five days after the removal, so the court held that it was still a New Jersey citizen at the time of removal.
Tuesday, May 28, 2013
Whether a state’s parens patriae action is removable as a “mass action” under the Class Action Fairness Act when the state is the sole plaintiff, the claims arise under state law, and the state attorney general possesses statutory and common-law authority to assert all claims in the complaint.
You can find a link to the Fifth Circuit’s decision below and the cert-stage briefing at SCOTUSblog’s case file.
It will be the second Supreme Court case to interpret CAFA in as many Terms, following the decision this March in Standard Fire Insurance Co. v. Knowles.
Wednesday, April 17, 2013
Today the Supreme Court decided Kiobel v. Royal Dutch Petroleum Co. (No. 10-1491), a long-pending case involving the Alien Tort Statute (ATS). Although the Court is unanimous that the ATS does not provide jurisdiction in this particular case, there is a 5-4 split on the reasoning.
Chief Justice Roberts authors the majority opinion, joined by Scalia, Kennedy, Thomas, and Alito. In addition, Justice Kennedy files a concurring opinion, and Justice Alito files a concurring opinion that Thomas joins.
Justice Breyer authors an opinion concurring in judgment, joined by Ginsburg, Sotomayor, and Kagan.
Friday, March 29, 2013
This week the U.S. Court of Military Commission Review denied petitions for writs of mandamus filed by the ACLU (order here) and a group of several media outlets (order here) in connection with the military commission trials at Guantanamo Bay, Cuba. The petitions were filed under the All Writs Act [28 U.S.C. § 1651(a)], and challenged a protective order issued by the Military Commission Judge. Among other things, the protective order authorizes automatic closure of proceedings and sealing of records whenever classified information is disclosed, even if the information is publicly known, and prohibits personal testimony by the defendants about their experiences while in U.S. custody.
The Court’s order does not address the merits of the petitioners’ arguments, or whether the All Writs Act is properly invoked in this context. Rather, it concludes that the case “is not ripe for our review.” From the order regarding the media petitioners:
This controversy is not ripe for our review. The judge has issued a protective order in accordance with Military Commission Act (MCA) Sec. 949p-3, 10 U.S.C. §949p-3. Petitioners have not alleged a single instance where the Military Commission Judge has improperly applied Amended Protective Order #1 to deny Petitioners access to information, sufficient to warrant the sort of extraordinary relief petitioners seek. See MCA Sec. 949d(c). See generally Clapper v. Amnesty International, 133 S. Ct. 1138 (2013); Cheney v. United States, 542 U.S. 367 (2004); Am. Civil Liberties Union v. U.S. Dep’t of Def., 628 F.3d 612 (D.C. Cir. 2011) (discussing classified information and Freedom of Information Act).
We emphasize the limited scope of our holding. We are not ruling on the merits of the parties claim that there is writ jurisdiction under the All Writs Act, 28 U.S.C. § 1651(a).
Judge Silliman authored a concurring opinion urging the Court to address whether it has jurisdiction under the All Writs Act and arguing that 28 U.S.C. § 2241(e)(2) “explicitly stripped our Court of such jurisdiction.”
Steve Vladeck (American University) has more coverage at Lawfare.
Wednesday, March 27, 2013
As covered earlier (e.g., here, here, and here), Windsor presents some interesting issues relating to jurisdiction and Article III standing, to which the Court devoted the first half (almost an hour's worth) of the oral argument .
Tuesday, March 26, 2013
Tuesday, March 19, 2013
Today the Supreme Court issued a unanimous decision in Standard Fire Insurance Co. v. Knowles (No. 11-1450), covered earlier here. The Court concludes that removal under the Class Action Fairness Act (CAFA) is proper even if the named plaintiff in a state court class action stipulates that the class will not seek aggregate damages in excess of CAFA’s $5 million threshold.
Justice Breyer’s opinion (a quick read at 7 pages) emphasizes that—prior to class certification—the named plaintiff’s stipulation is not binding on the other class members:
[A] plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified. See Smith v. Bayer Corp., 564 U. S. ___, ___ (2011)…. Because his precertification stipulation does not bind anyone but himself, Knowles has not reduced the value of the putative class members’ claims. For jurisdictional purposes, our inquiry is limited to examining the case “as of the time it was filed in state court,” Wisconsin Dept. of Corrections v. Schacht, 524 U. S. 381, 390 (1998). At that point, Knowles lacked the authority to concede the amount-in-controversy issue for the absent class members. [Slip Op. 4]
Justice Breyer is more sympathetic to a different argument against CAFA jurisdiction. He writes:
The strongest counterargument, we believe, takes a syllogistic form: First, this complaint contains a presently nonbinding stipulation that the class will seek damages that amount to less than $5 million. Second, if the state court eventually certifies that class, the stipulation will bind those who choose to remain as class members. Third, if the state court eventually insists upon modification of the stipulation (thereby permitting class members to obtain more than $5 million), it will have in effect created a new, different case. Fourth, CAFA, however, permits the federal court to consider only the complaint that the plaintiff has filed, i.e., this complaint, not a new, modified (or amended) complaint that might eventually emerge. [Slip Op. 5-6]
But he is ultimately unpersuaded:
Our problem with this argument lies in its conclusion. We do not agree that CAFA forbids the federal court to consider, for purposes of determining the amount in controversy, the very real possibility that a nonbinding, amount-limiting, stipulation may not survive the class certification process. This potential outcome does not result in the creation of a new case not now before the federal court. To hold otherwise would, for CAFA jurisdictional purposes, treat a nonbinding stipulation as if it were binding, exalt form over substance, and run directly counter to CAFA’s primary objective: ensuring “Federal court consideration of interstate cases of national importance.” §2(b)(2), 119 Stat. 5. It would also have the effect of allowing the subdivision of a $100 million action into 21 just-below-$5-million state-court actions simply by including nonbinding stipulations; such an outcome would squarely conflict with the statute’s objective. [Slip Op. 6]
Wednesday, March 6, 2013
Professor Simona Grossi (Loyola Los Angeles) has posted on SSRN a draft of her article, Federal Question Jurisdiction: The Compass, the Maze and the Trap. Here’s the abstract:
On February 20, 2013, the Supreme Court announced its decision in Gunn v. Minton. There the Court revisited the scope of statutory “arising under” jurisdiction in the context of a legal malpractice suit premised on alleged attorney errors committed in a prior patent litigation. The significance of the decision transcends the specific context in which it arose. Although Gunn involved patent law arising under jurisdiction, 28 U.S.C. §1338, that jurisdictional standard is interpreted in precisely the same manner as the identically worded §1331 standard. Hence, the decision in Gunn applies to a full range of federal question cases in which a federal issue is embedded in a state-law claim. In addition, Gunn provides insight into the ongoing clash between principle and docket-management concerns that has become so characteristic of Supreme Court decisions in the realm of procedure.
The Gunn opinion was much anticipated by the legal community since prior decisions by the Court had generated considerable confusion as to the scope of arising under jurisdiction in so-called “federal-ingredient” cases. Some commentators hoped that the Court would adopt the creation test as the exclusive measure of jurisdiction. Others hoped for a clarification of the federal-ingredient test. Still others, like this author, hoped that the Court would redirect the jurisdictional analysis to the traditional fundamental principles that once animated federal question jurisdiction. As I explain in my article, everyone will be disappointed by the result.
Monday, February 25, 2013
Here’s some more coverage of last week’s Supreme Court decision in Gunn v. Minton, which addresses Grable and federal question jurisdiction:
- Prof. Josh Blackman (South Texas)
- Prof. Rodger Citron (Touro), Justia
- Prof. Ronald Mann (Columbia), SCOTUSblog
Wednesday, February 20, 2013
Today the Supreme Court issued a unanimous opinion in Gunn v. Minton, covered earlier here and here. The case revisits the recurring problem of when a federal law ingredient in a state law cause of action is sufficient for federal question jurisdiction (cases "arising under" federal law). It's a pretty quick turnaround--oral argument was on January 16.
Chief Justice Roberts authors the opinion, which endorses and applies the test developed eight years ago in Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308 (2005). Here’s one colorful passage on Grable [Slip Op. 6], which the Chief distills into a four-part test:
[E]ven where a claim finds its origins in state rather than federal law—as Minton’s legal malpractice claim indisputably does—we have identified a “special and small category” of cases in which arising under jurisdiction still lies. Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U. S. 677, 699 (2006). In outlining the contours of this slim category, we do not paint on a blank canvas. Unfortunately, the canvas looks like one that Jackson Pollock got to first. See 13D C. Wright, A. Miller, E. Cooper, & R. Freer, Federal Practice and Procedure §3562, pp. 175–176 (3d ed. 2008) (reviewing general confusion on question).
In an effort to bring some order to this unruly doctrine several Terms ago, we condensed our prior cases into the following inquiry: Does the “state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities”? Grable, 545 U. S., at 314. That is, federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress. Where all four of these requirements are met, we held, jurisdiction is proper because there is a “serious federal interest in claiming the advantages thought to be inherent in a federal forum,” which can be vindicated without disrupting Congress’s intended division of labor between state and federal courts. Id., at 313–314.
Wednesday, January 16, 2013
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.
Tuesday, January 8, 2013
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:
- Associated Press (Mark Sherman)
- Bloomberg (Greg Stohr)
- How Appealing (Howard Bashman)
- National Law Journal (Tony Mauro)
- N.Y. Times (Adam Liptak)
- Reuters (Jonathan Stempel)
- SCOTUSblog (Prof. Debra Lyn Bassett, Southwestern Law School)
- @SCOTUSHUMOR (Prof. Jay Wexler, Boston University)
Tuesday, December 11, 2012
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).
Monday, October 8, 2012
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.
Friday, August 31, 2012
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.
Monday, June 25, 2012
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.
Friday, March 9, 2012
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.