Wednesday, November 10, 2010
The New York Times Sunday Magazine has a feature by Douglas McCollam about the lawyers suing BP. You can find it here: The Other Oil Cleanup. More analysis later.
The Supreme Court heard oral arguments yesterday in AT&T Mobility, LLC v. Vincent Concepcion, a case that will determine whether states can require businesses to include certain procedures (like class-wide arbitration) in their arbitration agreements. The "plain English" translation by SCOTUSblog is: "Does the Federal Arbitration Act prohibit states from mandating that class arbitration be available as part of every arbitration agreement?"
Monday, November 8, 2010
Although the following pieces are not specifically aimed at mass torts, they do bear on procedure more broadly and might be of interest:
Cathy Struve (Penn) has posted her article, "Institutional Practice, Procedural Uniformity, and As-Applied Challenges under the Rules Enabling Act," on SSRN. Here's the abstract:
Addressing the Supreme Court’s decision last Term in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., this symposium essay focuses on the debate between the plurality and Justice Stevens concerning the availability of as-applied challenges to the validity of rules promulgated under the Rules Enabling Act. Agreeing with Professor Allan Ides’ article in the same symposium, this essay argues that Justice Stevens’ proposed approach strikes a reasonable balance: State-specific as-applied invalidation of a federal rule should be permissible but rare.
A survey of debates over facial and as-applied review in other contexts shows that the choice among facial review, as-applied review, and a combination of the two depends on both the institutional setting and the nature of the constraint that forms the basis for the review. In the context of Enabling Act review of federal rules, as-applied review is not unprecedented, and it has a role to play. Though the rulemakers are attentive to the limits imposed by the Enabling Act, they may not always be able to foresee a rule’s future effects on substantive rights. Admitting the possibility of the occasional as-applied challenge to a rule’s validity permits questions of a rule’s effect on substantive rights to develop in the context of concrete cases, before judges who are likely to have some familiarity with the relevant substantive-law concerns. The information developed in such litigation can inform both a court’s evaluation of the rule’s application in the case before it and future deliberations of the rulemakers.
As-applied challenges can cause uncertainty, can be difficult to resolve, and can impair the nationally uniform application of the federal rules. But the costs of state-specific as-applied review could be controlled by requiring a strong showing before finding a rule invalid as applied. There already exist other features of federal court practice that currently produce significant inter-state procedural variation. And the federal system asks state courts to tolerate similar disuniformity in state procedure.
Adam Steinman (Seton Hall) has posted his article, "Our Class Action Federalism and the Rules Enabling Act after Shady Grove," on SSRN. Here's the abstract:
The intersection of federalism and class-action litigation has been an area of significant controversy in recent years. With the 2005 Class Action Fairness Act placing more high-stakes class actions into federal court, an especially crucial question is the extent to which the Erie doctrine and the Rules Enabling Act (REA) require federal courts to follow state class-action law. The Supreme Court’s decision in Shady Grove Orthopedic Associates v. Allstate Insurance Co. begins to confront this issue, but many unanswered questions remain. Under several lines of argument that were neither made nor considered in Shady Grove, the Erie doctrine and the REA would require federal courts to apply state class-action law, whether state law is more tolerant or less tolerant of class actions than the prevailing federal approach. In particular, Shady Grove leaves open the possibility that state class-action law may influence a federal court’s application of Rule 23’s certification requirements, as well as other matters - available remedies, statutes of limitations, and the preclusive effect of the ultimate judgment - that can arise during the course of a putative class action. This article identifies these important unresolved issues, and then suggests a more precise doctrinal framework for addressing them (and Erie/REA issues more generally).
Joseph Bauer (Notre Dame) has posted his article, "Shedding Light on Shady Grove: Furhter Reflections on the Erie Doctrine from a Conflicts Perspective," on SSRN. Here's the abstract:
This Article, a contribution to the Notre Dame Law Review symposium issue on the Supreme Court’s recent Shady Grove decision, is a follow-up to an article published in the same journal eleven years ago, in which I suggested that the Erie doctrine could be usefully informed by drawing on caselaw and jurisprudence from the horizontal choice of law setting. Shady Grove addressed the question of whether a New York state law, barring the assertion of claims for statutory damages, was binding in an action brought in the federal courts, or whether Federal Rule 23, which does not contain a similar prohibition, controlled exclusively. In a 5-4 decision, the Court applied its “familiar framework,” first articulated in Hanna v. Plumer, to find that the language of Rule 23 was “unambiguous,” that the Rule addressed the same questions as the state law, that it satisfied the standards of validity contained in the Rules Enabling Act (REA) as a “rule of ... procedure,” and that any incidental effects on the outcome of the litigation or encouragement of forum shopping were irrelevant.
In this Article, I argue that the Court got it wrong, and that application of the learning from horizontal analysis would have led to a sounder result. Choice of law jurisprudence seeks to avoid unnecessary conflicts, in part by giving the law of one or the other jurisdiction a more limited reading. Justice Ginsburg’s dissent in Shady Grove adopted that approach, quoting from the title of an article by California Supreme Court Chief Justice Roger Traynor, to ask “Is this Conflict Really Necessary?” By contrast, although the majority cited a canon of construction which would have recognized and deferred to the important goals and interests of New York, it chose to give Rule 23 an unnecessarily broad reading. After explaining why the dissent’s analysis was preferable, I then discuss in detail the majority’s conclusion that the Rule passed muster under the REA, again arguing that horizontal choice of law jurisprudence would have been instructive in defining and distinguishing “substance” and “procedure.”
Suja Thomas (Illinois) has posted her article, "Oddball Iqbal and Twombly and Employment Discrimination" on SSRN. Here's the abstract:
This brief Essay argues that Bell Atlantic Corp. v. Twombly was an oddball case, a massive antitrust action with significant costs, much different than the vast majority of cases in the federal courts. While the Supreme Court and some scholars including Professor Richard Epstein have largely justified the new plausibility standard in Twombly on the basis of these costs, they have not shown why the new standard should apply transsubstantively to cases without these same costs, including typical employment discrimination cases. This Essay further argues that Ashcroft v. Iqbal like Twombly was also an oddball case, though with different types of costs than Twombly. Finally, contrary to Professor Epstein, this Essay argues that the standard under Iqbal and Twombly is likely to be procedurally revolutionary in employment discrimination cases. Indeed, the new standard could lead to a revolution due to the convergence of the new motion to dismiss standard with summary judgment and the effective death of Swierkiewicz v. Sorema N.A.
Last week, the Seventh Circuit issued an opinion concerning the All Writs Act in Thorogood v. Sears, Roebuck and Company (No. 10-2407). Suit 1 involved plaintiff Thorogood, who sued in the state court of Illinois. Sears, the defendant, removed to federal court, and the federal district judge, Judge Leinenweber, certified the class action. Plaintiff alleged that Sears engaged in deceptive advertising because its Kenmore-brand clothes dryer was not made entirely of stainless steel; the front part of the drum is made of a ceramic-coated mild steel, which isn’t stainless steel. Sears appealed Judge Leinenweber’s decision to certify the class and, on appeal, the Seventh Circuit decertified, calling the case “a notably weak candidate for class treatment.” (Thorogood Opinion at 5.) In particular, the Seventh Circuit held that common issues didn’t predominate because it was inconceivable that class members had a shared understanding of the advertisments. After decertification, Sears made a Rule 68 offer of judgment for $20,000 (even though the maximum damages Thorogood could recover under Tennessee law were $3,000). When the plaintiff refused, Judge Leinenweber dismissed the case since the offer exceeded the amount in controversy and mooted the case. Thorogood appealed and the Seventh Circuit affirmed the district court’s denial of attorneys’ fees and the dismissal of the suit.
Thorogood’s counsel (Clinton Krislov) found another plaintiff (Murray) and filed another, similar putative class action suit against Sears in California state court, which Sears promptly removed and argued was barred by issue preclusion. In particular, Sears argued that the issue of whether the class could be certified had already been litigated and determined in the Illinois action. The district court judge in California, Judge Claudia Wilken, initially agreed. Plaintiffs’ counsel then amended the complaint and, according to Judge Wilken, sufficiently differentiated it from the complaint in Thorogood “to avoid the application of collateral estoppel.” (Murray v. Sears, Roebuck and Co., 2010 WL 3490214, at *4 (N.D. Cal. Sept. 3, 2010)).
Sears returned to the court in the Northern District of Illinois and asked Judge Leinenweber to enjoin the federal court in California from proceeding under the All Writs Act, 28 U.S.C. 1651(a). Judge Leinenweber, however, ruled that Sears could obtain adequate relief by pleading collateral estoppel in the California action. In a harshly worded opinion by Judge Posner, the Seventh Circuit reversed and enjoined class members and class counsel from further pursuing similar class action suits. Because the issue that was precluded was whether the action could be maintained as a class action, the ruling did not prevent class members from pursuing an individual suit.
The result in this case isn’t surprising given Judge Easterbrook’s statement in In re Bridgestone/Firestone:
[W]hen federal litigation is followed by many duplicative state suits, it is sensible to handle the preclusive issue once and for all in the original case, rather than put the parties and state judges through an unproductive exercise. That these suits are multiplying suggests that some lawyers have adopted a strategy of filing in as many courts as necessary until a nationwide class comes into being and persists. (333 F.3d at 766)
Easterbrook’s statements here and Posner’s statements in Thorogood suggest that collateral estoppel doesn’t always do the trick. Even though issue preclusion should be determined by looking to the law that governed the issue in the first lawsuit (here federal law since the issue in question is whether to certify a class under FRCP 23), courts can come to different conclusions as to whether the issue in question is in fact the “same issue” (as did Judge Wilken in Murray).
These tactics were used somewhat more successfully before CAFA when state court cases couldn’t be removed to federal courts and the states could apply their own versions of Rule 23, which were often more forgiving than the federal version. When federal courts are faced with enjoining state courts, they’re restricted by the Anti-Injunction statute, which prohibits injunctions against state proceedings “except as expressly authorized by an Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” Historically, these exceptions have been narrowly construed.
Smith v. Bayer Corp., which is currently pending before the U.S. Supreme Court, might affect the scope of the Thorogood injunction, though it wouldn’t change the result that Murray’s case cannot proceed. Smith v. Bayer Corp. deals with the more classic injunction scenario of whether Baycol plaintiffs can bring a class action in West Virginia state court after the federal judge in the MDL action denied class certification on similar issues. In other words, Smith v. Bayer Corp. addresses whether a federal court can enjoin a state court, not whether a federal court can enjoin another federal court (the primary question in Thorogood). As Posner indicates, Smith may change the scope of the Thorogood injunction, which currently prevents copycat suits in state and federal courts.