Civil Procedure & Federal Courts Blog

No really, short and plain is enough

There are many reasons a plaintiff's pleading might contain detailed factual allegations and be organized by the elements of the relevant legal theories.  But of course, it doesn't have to do either. Or does it? Fairly recently, the Seventh Circuit provided two concise and helpful descriptions of what is, and what is not, required:

It is enough to name the plaintiff and the defendant, state the nature of the grievance, and give a few tidbits (such as the date) that will let the defendant investigate.  A full narrative is unnecessary. Kolupa v. Roselle Park Dist., 438 F.3d 713, 714 (2006).

This treatment went wrong at the first step: the belief that complaints must lay out facts corresponding to every “element” of a legal theory. That is a code-pleading approach, which the Federal Rules of Civil Procedure reject. One pleads “claims” (which is to say, grievances) rather than legal theories and factual specifics.  The Supreme Court drove the point home in Swierkiewicz v. Sorema N.A., holding that plaintiffs need not allege either the factual or legal “elements” of a prima facie case under the employment-discrimination laws. That conclusion is equally applicable to every other federal claim. It is why “[a]ny district judge (for that matter, any defendant) tempted to write ‘this complaint is deficient because it does not contain...’ should stop and think: What rule of law requires a complaint to contain that allegation?”  It is also why “[a]ny decision declaring ‘this complaint is deficient because it does not allege X’ is a candidate for summary reversal, unless X is on the list in Fed.R.Civ.P. 9(b).” *** Simpson's grievance was set out clearly enough to put the defendants on notice; no more is required. Simpson v. Nickel, 450 F.3d 303 (2006). 

Although these are two of the more recent and forceful descriptions of the pleading obligation, the principles they contain were stated often before 2003, when Professor Christopher Fairman wrote:

Notwithstanding its foundation in the Federal Rules and repeated Supreme Court imprimatur, notice pleading is a myth. From antitrust to environmental litigation, conspiracy to copyright, substance specific areas of law are riddled with requirements of particularized fact-based pleading. To be sure, federal courts recite the mantra of notice pleading with amazing regularity. However, their rhetoric does not match the reality of federal pleading practice. Sometimes subtle, other times overt, federal courts in every circuit impose non-Rule-based heightened pleading in direct contravention of notice pleading doctrine. The Myth of Notice Pleading 45 Ariz. L. Rev. 987 (2003).

Is notice pleading a myth?

--RR

The Thursday Interview

Click the link at the bottom of this post to listen to this week's installment of the Thursday Interview.  This week's interview is with Howard Wasserman at FIU about his most recent article, Jurisdiction, Merits, and Non-Extant Rights.  Thanks to Howard for a great interview.

--Counseller

Download wasserman_interview.mp3

Again

Apparently the US News Rankings have leaked again.   Find  the list here.  Find more discussion here and here.  Those heres have many more heres. I'm kinda new to this blogging thing, but from what I can gather, the standard protocol after a US News leak seems to be to leave a comment about indifference to the rankings while frantically opening another browser window to find the list and confirm its validity. --RR

Declining the Exercise of Supplemental Jurisdiction

The Seventh Circuit, via Posner, issued a short but interesting supplemental jurisdiction opinion earlier this month, Williams Elec. Games, Inc. v. Garrity.  The case went to trial on both federal and state-law claims, but by the time the case went to the jury, the district court had dismissed all federal claims.  In an earlier opinion, the Seventh Circuit granted the plaintiff a new trial because of errors in the state law fraud instructions to the jury.  On remand, rather than conducting the new trial, the district court relinquished jurisdiction over the lone remaining state-law claim and dismissed the case under 1367(c). 

The Seventh Circuit affirmed the dismissal, but said that it was "troubled" by the district judge's invocation of a "presumption" in favor of dismissal. Section 1367(c)(3) allows a district court to decline to exercise supplemental jurisdiction when all claims over which it has original jurisdiction have been dismissed.  The court noted that district courts are to presume that, "if the federal claims drop out before trial, the district court should relinquish jurisdiction over the state-law claims," but the court said that the presumption was inapplicable here:

For while some of the federal claims (the Sherman Act claim and some of the RICO claims) did fall out of the case before trial, other RICO claims were tried, along with some of the state-law claims, though they were dismissed mid-way in the trial on the defendants' motion for directed verdict.

Of course, what the court says here is true about the first trial, but only a state-law claim remained for the second trial.  I suppose the lesson we take from Garrity is that, where there is more than one trial, courts should only presume dismissal when it dismisses all federal claims before the first trial.

The Seventh Circuit affirmed the district courts dismissal, however, because the district court would have reached the same result "on proper grounds"--namely, section 1367(c)(1) ("the claim raises a novel or compex issue of State law").  If the state-law claim raised novel or complex issues of state law requiring dismissal after remand, didn't it raise those same novel and complex state-law issues before the first trial and appeal?  If so, should the district court have declined the exercise of supplemental jurisdiction before the first trial?

--Counseller      

Federal-court discovery and international tribunals

An interesting case from the 11th Circuit in an area I don't encounter often.  After the defendant failed to satisfy a judgment secured by  NoName corporation in a Panamanian court, NoName filed a post-judgment petition in the judgment-rendering Panamanian court.  Following Panamanian procedures, NoName sought post-judgment discovery and suggested that, since the defendant resided in Florida, the court obtain the evidence through a letter rogatory.   The court issued a letter rogatory to the Judicial Authorities for the City of Miami.  The United States then filed an ex parte application in the United States District Court for the Southern District of Florida, pursuant to 28 U.S.C. s 1782, for an order appointing an Asst. U.S. Attorney as a commissioner for the purpose of obtaining the evidence requested by the Panamanian Court.  The issue was whether and when a federal district court can assist in the production of evidence for use in a foreign court, and specifically whether a district court can do so when the judgment has not been domesticated.  Ultimately, the 11th Circuit affirmed the district court's decision to grant the application for judicial assistance to foreign tribunals under s1782. --RR

 

In case you missed it

Items of interest this week:

• Howard Wasserman posts his third paper in a series attempting to disentangle the substantive merits of federal law and subject matter jurisdiction. The paper, titled Jurisdiction, Merits, and Non-Extant Rights, appears here

• Over at Scotusblog, David Stras describes his forthcoming article,  Are Senior Judges and Justices Unconstitutional, an article he coauthored with Ryan W. Scott.   The article will appear in this month's issue of the Cornell Law Review.

• Amanda Frost posts an article asking whether courts should consider Certifying Questions to Congress.

• Another Supreme Court Update from Aaron Streett appears at Prawfsblawg.

• In resolving a trademark dispute, the Seventh Circuit notes "Somewhat to our surprise, it turns out that there is a niche market for farting dolls, and it is quite lucrative." Howard Bashman covers the case here and here.

The Thursday Interview

Listen to this week's installment of the Thursday Interview by clicking the link at the bottom of this post.  This week's interview is with Gil Seinfeld of the University of Michigan Law School about his most recent article, The Puzzle of Complete Preemption, published in the Pennsylvania Law Review.  His article was the subject of a post earlier this week, but it certainly warrants additional discussion.  Thanks to Gil for a great interview.

--Counseller

Download seinfeld_preemption_interview.mp3

Law Review Articles Irrelevant?

Many of you probably have already read the article in the NY Times about the decreasing significance of law review articles to judges.  The folks over at Law School Innovation have linked to much commentary on the topic here.   Mark Osler tiptoes gingerly around the issue elsewhere, writing:   

Here are the dumb things law professors are doing to make sure that their work has no impact on the broader society, solves no problems, and avoids relevance to anyone save those in the legal academy:

1) Too many articles are obsessed with topics which lack any realistic nexus to a real-life problem. For a while, many top academics were fascinated by "shaming" punishments, while many ignored the sentencing guidelines and state practices. Shaming was never going to come back; meanwhile injustice permeates much of the sentencing structure in many jurisdictions and no one cares much.

2) There is no dialogue betweeen the legal academy and decision-makers. Many professors send their articles to other professors, but few send them to judges, congressmen, and practitioners. Their audience is not anyone with power to create change, but a handful of other law professors.

3) Law articles are far too long. That is one reason so few people read them. It simply isn't true that an article under 100 pages isn't "serious."

4) The fervency for substantiation is silly. 800 footnotes to other law reviews does not make an article more true-- it just means someone else made a similar small point previously. The text should be more important than the footnotes, because that is how people read.

5) The cycle of writing to publication of an article is one to two years, making it impossible to address an issue which moves fast.

Rule 4 v. Rule 5 Service

At the risk of being deemed a heretic, I must admit that FRCP 5 (Serving and Filing Pleadings and Other Papers) doesn't typically get my juices flowing. The Ninth Circuit issued an opinion on Friday--Employee Painter's Trust v. Ethan Enterp. Inc.--in which it discussed service under Rules 4 and 5 and affirmed the district court's entry of a $1 million default judgment.  Sound sexy?  Well, Rory and I actually spent quite a bit of time discussing the case this morning and concluded it might be a good teaching tool to highlight the basic difference between service under Rules 4 and 5.

Several trusts filed suit against a floor covering company and some of its officers seeking delinquent contributions.  The defendants generally appeared, but two months later their attorney withdrew.  The defendants did not replace their attorney.  The failure to do so violated a local rule requiring corporations to be represented by counsel at all times, and the local rule permitted the entry of a default judgment for failure to comply.  Three days after the defendant's attorney withdrew, the trust's motion to amend their complaint was granted.  The trusts attempted service on the defendants by mail and in person and ultimately were permitted to attempt service by publication.  The defendants failed to respond and the district court entered a default judgment against the defendants.  Weeks later, the defendants filed a Rule 60(b) motion seeking to set aside the default judgment.  The district court denied the motion.   

On appeal, the defendants relied primarily on alleged deficiencies in service to overturn the default judgment.  The court held that service of the amended complaint was governed by Rule 5 (not Rule 4) and that, therefore, the trust's service of the amended complaint by mail was adequate.  Rule 5 governed, the court said, because the amended complaint was a "pleading subsequent to the original complaint."  Rule 5(a) only requires service of an amended complaint according to Rule 4 where a party is in default for failure to appear and the pleading asserts new or additional claims for relief.  Because the defendants had already generally appeared, the defendants were not in default and, therefore, were subject to service under Rule 5's service by mail provision. 

A local rule for the Western District of Washington raises a potentially interesting wrinkle that the court did not discuss.  The local rule states:

[a corporation's] failure to obtain a replacement counsel by the date the withdrawal is effective may result in dismissal of the corporation's claims for failure to prosecute and/or entry of default against the corporation as to any claims of other parties."

The defendants did not obtain replacement counsel by the time their initial attorney withdrew.  Does the failure to do so place the defendants in default requiring service of an amended complaint under Rule 4?  Or, even if they are in "default" for not having an attorney under the local rule, are the defendants "in default for failure to appear" as required by Rule 5(a) before service of an amended complaint under Rule 4 is required? --Counseller

The Puzzle of Complete Preemption

Gil Seinfeld recently published The Puzzle of Complete Preemption in the Pennsylvania Law Review.  It's helpful, concise, and thoughtful.  Below is an excerpt from the introduction:

One can imagine a jurisdictional doctrine that treats preemption cases specially on the ground that the interest in uniformity features prominently when such statutes are at issue. When Congress preempts state law, one effect of its doing so is to homogenize the rule with which regulated entities are expected to comply. And we might want to make it particularly easy for cases calling for the interpretation of such statutes to get into the federal system, where they will be decided by courts that are thought most likely to interpret the law uniformly, thereby helping to secure the homogeneity Congress means to provide.

But the Court has declined to connect the doctrine of complete preemption to the basic policies relevant to the existence and scope of federal question jurisdiction, including the interest in a uniform interpretation of federal law. Indeed, the complete preemption cases offer nothing in the way of systematic thinking about the uniformity interest and how it relates to federal jurisdiction. Complete preemption doctrine thus presents a puzzle: how and why has the Court come to afford the covered cases special jurisdictional treatment, and why is a doctrine that appears to call for justification by reference to foundational jurisdictional policies--the uniformity interest in particular--seemingly disconnected from them? This Article offers a close analysis of this unusual rule of federal jurisdiction in an effort to answer these questions. It makes the case that, due to its neglect of the core values underlying the vesting of federal question jurisdiction in the federal courts, the Court has established a doctrine that is unstable and unsound. This Article argues, further, that the doctrine might be satisfyingly remodeled by shaping it around the interest in a uniform interpretation of federal law.

Trevor Morrison's response to the article can be found here. -- RR

In case you missed it

Some items of interest this week:

• Howard Erichson reports on the jury awards of compensatory and punitive damages in the NJ Vioxx case, which was the second trial on this matter following the trial judge's decision to vacate a previous verdict for Merck based on newly discovered evidence.

• The Loyola Law Review publishes a volume dedicated to the CAFA.  Benjamin Spencer lists the contents here.

• The Texas Supreme Court held that exercising jurisdiction over an out-of state rafting company violated due process although the company's promotional activities in Texas constituted purposeful contacts.  Noting that the US Supreme Court has "given relatively little guidance as to how closely related a cause of action must be to the defendant's forum activities," the Texas Supreme Court adopted a "substantial connection" test and held that the rafting company's contacts were "simply too attenuated to satisfy specific jurisdiction's due-process concerns." Would our Thursday interviewee approve?

--RR

The Thursday Interview

Click the link at the bottom of this post to listen to this week's installment of the Thursday interview. This week's interview is with Linda Sandstrom Simard of Suffolk University Law School about her article Meeting Expectations: Two Profiles for Specific Jurisdiction.  The Indiana Law Review published the article in 2005, but it came to our attention when it was recently posted on SSRN.  In the article, Prof. Simard proposes a new approach to the specific jurisdiction relatedness requirement.  Here's the abstract:

Personal jurisdiction doctrine is based upon the notion that the exercise of authority over a defendant is fair if the defendant has the ability to predict and control its jurisdictional exposure. Yet, the Supreme Court has neglected to clearly define the criteria by which courts are to define the scope of either general or specific personal jurisdiction, leading to a blurring of the concepts and disagreement among courts and scholars as to the appropriate contours of both types of jurisdiction. This Article focuses on defining the scope of specific jurisdiction to accurately reflect the purpose of the doctrine and suggests that it is a mistake to assume that all assertions of specific jurisdiction may be defined according to a single set of criteria. Rather, the purpose of specific jurisdiction is best achieved by creating two profiles of specific jurisdiction, episodic specific jurisdiction and systematic specific jurisdiction. These profiles would share the basic characteristics of specific jurisdiction (conferring limited jurisdictional authority) while also recognizing that the scope of specific jurisdiction should depend upon whether the defendant expects its forum conduct to be of a finite nature (which would confer a narrower scope of specific jurisdiction) or whether the defendant intends to create an ongoing, systematic relationship with the forum (which would create a broader scope of specific jurisdiction, but one that is still less expansive than general jurisdiction).

Thanks to Prof. Simard for a great interview.

Download simard_jursdiction_interview.mp3

The Ninth Circuit and CAFA

The Class Action Fairness Act kept the Ninth Circuit busy in the early part of this month.  On March 2, in Lowdermilk v. U.S. Bank Nat'l Assoc., the Ninth Circuit determined that, where a plaintiff pleads damages below CAFA's jurisdictional amount, a defendant must prove to a "legal certainty" that the jurisdictional amount is met in order to remove the case to federal court. 

Just four days later, the court issued its opinion in Progressive West Ins. Co. v. Preciado.  In Progressive, the plaintiff insurance company filed a breach of contract suit in California state court against one of its insureds, and its insured filed a "cross-complaint" against Progressive alleging violations of California's unfair competition laws.  Both the original complaint and the cross-complaint were filed before the February 18, 2005 effective date of CAFA. 

In August of 2005, the insured filed an amended cross-complaint to properly allege the elements of a class action.  The insurance company then removed the action to federal court, arguing the existence of federal jurisdiction under CAFA.  The insurance company argued that, under California's relation-back doctrine, the insured commenced a new action after CAFA's effective date.  The Ninth Circuit rejected this argument, saying:

California's relation-back doctrine does not apply in this context.  Because [the insured] commenced his class action lawsuit for purposes of CAFA on February 17, 2005 (the time of the filing of the original cross-complaint), one day before CAFA became effective, [the insurance company] cannot invoke CAFA's removal provisions.

But the Ninth Circuit did not stop at this relatively narrow holding.  It also said:

We must conclude CAFA does not alter the longstanding rule announced in Shamrock that precludes plaintiff/cross-defendants from removing class actions to federal court.  For this reason, [the insurance company] would lack statutory authority to remove the action pursuant to CAFA even if the action had commenced after CAFA's effective date.

Do you think we'll see plaintiffs pleading more cases below the jurisdictional amount to defeat removal of class actions?  Or are there ways to bait would-be class action defendants into first filing suit against the would-be plaintiffs/class representatives?

--Counseller

Resource for the E-Discovery Amendments

For those who haven't seen it, the Yale Law Journal Pocket Part contains a 7-part series covering the electronic discovery amendments to the Federal Rules of Civil Procedure.  The Editor's Note provides:

On December 1, 2006, electronic discovery amendments to the Federal Rules of Civil Procedure go into effect. In this seven-part series, Judge Lee H. Rosenthal, chair of the Judicial Conference's Advisory Committee on Civil Rules, offers an introduction to the new amendments and describes challenges they present for lawyers, litigants, and judges.

Judge Rosenthal's introduction follows:

The last time the Federal Rules of Civil Procedure were amended to acknowledge computers was 1970, when the words “data and data compilations” were added to Rule 34. Thirty-six years later, long after the computer has become both ubiquitous and essential, it is time to do much more. On December 1, amendments will go into effect to make the discovery rules better able to accommodate the vast changes in information technology that have already occurred and that will inevitably continue.

The need for the guidance the e-discovery rule amendments provide is reflected in the fact that courts have been applying the new rules since they were proposed, years before their effective date. Because the amendments have to be flexible enough to apply to all federal cases that could involve electronic discovery and general enough to accommodate the inevitable changes in information technology, there are a number of issues the new rules do not address. Instead, the rules present procedures and guidelines targeted at the distinctive features of electronically stored information, to help resolve those issues when they arise. In this seven-part series, I discuss a few issues likely to arise under the new rules and the challenges they may present, not only for lawyers and litigants, but for judges.

--RR

A reasonable basis to certify

Badon v. RJR Nabisco is one of my favorite cases to teach to show the proper scope of the traditional fraudulent-joinder inquiry.  (The following factual description is simplified for readability.) 

Plaintiff was a smoker who sued diverse cigarette manufacturers.  She also joined nondiverse cigarette wholesalers.  The manufacturers removed, arguing that the plaintiff had fraudulently joined the wholesalers because she could not state a valid cause of action against them.   The plaintiff moved to remand, arguing that she had alleged valid causes of action against the wholesalers, namely redhibition and breach of warranty under Louisiana law.  The district court denied the motion to remand, and the plaintiffs appealed under 1292(b).

The Badon case linked above is the 5th Circuit's second decision concerning the correctness of the district court's denial of the motion to remand.   What happened the first time?  The first time, the Fifth Circuit noted there were no clear controlling precedents resolving whether the plaintiff had stated valid causes of action against the wholesalers.  So, the court certified questions to the Louisiana Supreme Court regarding whether the plaintiff had stated valid causes of action against the wholesalers.   The Louisiana Supreme Court declined to answer.

Now, having received no answer from the La. Sup. Ct., the Fifth Circuit turned back to the correctness of the district court's denial of the remand motion.  In this type of fraudulent-joinder case, the court noted,  the district court can only ask whether there is a "reasonable basis to predict that the plaintiff might recover" against the nondiverse defendant.  It's not a full-scale Erie guess; the court can only find fraudulent joinder if there is no reasonable basis. Having received no definitive answer from the state's high court, the Fifth Circuit concluded that there was arguably a reasonable basis to predict the plaintiff might recover against the wholesalers, and thus the district court erred by not remanding.  So, many years later, the lawsuit can begin in state court.

At this point, I stop and ask the students, what is wrong with this picture. Eventually the lights start going on.   --RR

 

In case you missed it

Items of interest this week:

• The Supreme Court decided Sinochem,  unanimously holding that forum non conveniens, like other threshold nonmerits issues, may be resolved before difficult issues of jurisdiction (both of the subject matter and the person).

• Benjamin Spencer posts a provocative article challenging some basic assumptions about the allocation of power between Congress and the courts. 

• The 10th Circuit holds that the district court "essentially ceded its duty to conduct factfinding to the advisory jury. As we have held, 'the findings of such a jury are, of course, merely advisory; the trial court must . . . make its own findings and ‘review on appeal is of the findings of the court as if there had been no verdict from an advisory jury.'"

The Thursday Interview

Click the link at the bottom of this post to listen to this week's installment of the Thursday interview.  This week's interview is with Prof. Suja Thomas of the University of Cincinnati College of Law about her two most recent articles, "The PSLRA's Seventh Amendment Problem" and "Why Summary Judgment is Unconstitutional." 

[Update:  take a look at Anne W. Reed's recent review of Prof. Thomas's "Summary Judgment" article]

Here's the abstract for "PSLRA":

This Article is the first to examine the proper role of the jury in private securities fraud litigation. In the Private Securities Litigation Reform Act, Congress required that a securities fraud complaint plead "a strong inference" of scienter. The courts have disagreed on the standard that satisfies this requirement, and likewise, the involved parties disagree. Defendant corporations argue for a stringent standard that would result in the dismissal of many claims, while plaintiff investors support a flexible standard that would allow more claims to go forward. Indeed, the Supreme Court's resolution of this issue may have an impact beyond securities litigation. If a stringent standard is adopted, special pleading may be permitted in other types of cases, including employment discrimination cases. Thus these cases may be dismissed before any discovery has been conducted. In the present context, securities law experts have not addressed the constitutional issue posed by the special pleading requirement; whether this requirement violates the Seventh Amendment right to a jury trial. The Supreme Court has held that a modern procedure must satisfy the substance of the English common law jury trial in 1791 to be constitutional under the Seventh Amendment. Accordingly, the special pleading rules developed in 21st century securities litigation must be viewed through an 18th century common law lens. This Article argues that the scienter standards developed by the courts in securities cases do not comport with substance of the common law jury trial and thus are constitutionally problematic. Contrary to the common law, the courts improperly engage in one or more steps of assessing the reasonableness of facts and corresponding inferences pled by the plaintiffs. This Article also acknowledges the possible constitutional infirmity posed by the PSLRA's "strong inference" standard itself and the heightened pleading requirements and proposes an alternative standard to dismiss a securities fraud claim that comports with the Seventh Amendment.

Here's the abstract for "Summary Judgment":

Summary judgment is cited as a significant reason for the dramatic decline in the number of jury trials in civil cases in federal court. Judges extensively use the device to clear the federal docket of cases deemed meritless. Recent scholarship even has called for the mandatory use of summary judgment prior to settlement. While other scholars question the use of summary judgment in certain types of cases (for example, civil rights cases), all scholars and judges assume away a critical question: whether summary judgment is constitutional. The conventional wisdom is that the Supreme Court settled the issue a century ago in Fidelity & Deposit Co. v. United States. But a review of that case reveals that the conventional wisdom is wrong: the constitutionality of summary judgment has never been resolved by the Supreme Court. This Essay is the first to examine the question and takes the seemingly heretical position that summary judgment is unconstitutional. The question is governed by the Seventh Amendment which provides that “[i]n Suits at common law, . . . the right of trial by jury shall be preserved, and no fact tried by jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.” The Supreme Court has held that “common law” in the Seventh Amendment refers to the English common law in 1791. This Essay demonstrates that no procedure similar to summary judgment existed under the English common law and also reveals that summary judgment violates the core principles or “substance” of the English common law. The Essay concludes that, despite the uniform acceptance of the device, summary judgment is unconstitutional. The Essay then responds to likely objections, including that the federal courts cannot function properly without summary judgment. By describing the burden that the procedure of summary judgment imposes upon the courts, the Essay argues that summary judgment may not be necessary to the judicial system but rather, by contrast, imposes significant costs upon the system.

A big thank you to Prof. Thomas for the interview.

Download suja_thomas_interview.mp3

A Sinochem Concern

I agree with the Supreme Court's decision in Sinochem.  I am concerned, however, that an unintended consequence of the opinion will be federal courts dismissing cases on forum non conveniens ("FNC") grounds where there is an obvious lack of subject matter jurisdiction. 

I am particularly concerned about this possibility in the removal context.  If district courts do not read Sinochem carefully, I predict we will see them ignoring remand motions in cases involving simple jurisdictional issues and issuing dismissals that are based on an FNC doctrine the state court would not have applied and that will not usually preclude the plaintiff from refiling in state court.   Although such a result may seem justified by some of the categorical language early in the opinion, it flies in the face of Sinochem's facts, the language late in the opinion limiting the holding, and the Court's desire for effecient resolution of threshold, non-merits issues. 

If district courts want wide latitude in choosing among the threshold issues they will first resolve, Sinochem, at least in its early parts, seems to give it to them.  Writing for a unanimous court, Justice Ginsburg says in the first paragraph of the opinion:

We hold that a district court has discretion to respond at once to a defendant's forum non conveniens plea, and need not take up first any other threshold objection. In particular, a court need not resolve whether it has authority to adjudicate the cause (subject-matter jurisdiction) or personal jurisdiction over the defendant if it determines that, in any event, a foreign tribunal is plainly the more suitable arbiter of the merits of the case.

The emphasis on the words "at once" and "any" are mine, not the Court's.  I add it because that's what defendants will emphasize in their motions to dismiss, and district courts, eager to clear their dockets, may find it difficult to resist the following interpretation:  if a district court is faced with more than one threshold, non-merits issue, it may choose which one it will first resolve without considering the relative complexity of the issues.

Consider the typical removal scenario.  Where diversity jurisdiction is at issue, it is unlikely that the face of the complaint will demonstrate complete diversity of citizenship.   Plaintiffs who prefer state court don't just file suit there and hope the defendant doesn't remove.  Instead, they sue a diversity destroying and/or home state defendant.  Plaintiffs employ this tactic not with high hopes the defendant won't remove; but in hopes of winning a motion to remand, which usually involves the issue of fraudulent joinder.  The defendant will move to dismiss using the expansive language in Sinochem to convince the district court that it need not concern itself with the fraudulent joinder/subject matter jurisdiction issue raised in plaintiff's remand motion (whether simple or complex) so long as it is comfortable dismissing for forum non conveniens.   

In the removal context, this result is particularly undesirable for two reasons.  First, by removing a case wherein FNC is an issue, the defendant has ensured application of the federal FNC doctrine, as opposed to the state doctrine or statute.  In my experience, where state FNC differs from federal FNC, it is generally more plaintiff-friendly than the federal doctrine.  Misconstruing Sinochem, the district court will often reach a different outcome than the state court would have reached, and, in far too many cases, the district court will do so despite an obvious lack of subject matter jurisdiction. 

Secondly, under Chick Kam Choo, the district court's FNC dismissal does not necessarily have preclusive effect in state court.  A plaintiff could refile the same suit in state court and relitigate the FNC issue under state law.  (What if the defendant removes again?) Consequently, a district court's decision to ignore a simple jurisdictional issue to dismiss the case on FNC grounds does not advance Sinochem's efficiency concern. 

To avoid this result, district courts must keep in mind that the Sinochem facts are a far cry from the run-of-the-mill FNC case.  Sinochem involved a subject matter jurisdiction issue of first impression in the Third Circuit, and the jurisdiction of the alternative forum (a Chinese Admiralty court) had already been "raised, determined, and affirmed on appeal."  The Court leaves open the possibility that the district court's approach in Sinochem--ignoring the subject matter jurisdiction issue to resolve the FNC issue--would be inappropriate in a case where a conditional dismissal was necessary to pave the way for litigation in the foreign forum.  The Court says:

We therefore need not decide whether a court conditioning a forum non conveniens dismissal on the waiver of jurisdictional or limitations defenses in the foreign forum must first determine its own authority to adjudicate the case.

The language at the end of the opinion is also critical to an accurate understanding of the Sinochem holding because it narrows what the Court might be understood to say earlier in the opinion.  Quoting Ruhrgas, the court says:

If, however, a court can readily determine that it lacks jurisdiction over the cause or the defendant, the proper course would be to dismiss on that ground. In the mine run of cases, jurisdiction “will involve no arduous inquiry” and both judicial economy and the consideration ordinarily accorded the plaintiff's choice of forum “should impel the federal court to dispose of [those] issue[s] first.”

Sinochem does not stand for the proposition that a federal district court may resolve a threshold forum non conveniens issue over any and all issues of subject matter jurisdiction.  Instead, Sinochem merely permits a federal district court to resolve a relatively simple forum non conveniens issue without first resolving a complex jurisdictional issue.

For my part, I hope district courts avoid an expansive reading of Sinochem and are slow to find a jurisdictional issue whose complexity warrants ignoring it to dismiss a case on FNC grounds.  In particular, I certainly hope district courts don't believe that a defendant's mere allegation of fraudulent joinder constitutes the kind of "arduous inquiry" that justifies skipping over the jurisdictional issue altogether.

--Counseller 

Rooker-Feldman

This month marks the second anniversary of the Supreme Court's unanimous decision in Exxon Mobile Corp. v. Saudi Basic Indus. Corp. There, confronting expansive interpretation of the doctrine from some lower courts, the Court narrowed the doctrine nearly to point of nonexistence.  To the extent the doctrine still applies, its overlap with preclusion makes it, to put it generously, of mild significance.

After Saudi Basic, lower courts have found occasion to dismiss federal court actions under Rooker-Feldman,   e.g., Industrial Comm. & Elect. Inc. v. Monroe County 2005 WL 1253881 (11th Cir):; Federacion de Maestros v. Junta de Relaciones del Trabajo (1st Cir); McCormick V. Braverman (6th Cir.), but it seems accurate to generalize that most lower courts are reading the decision correctly and denying requests to dismiss under Rooker-Feldman. 

The Supreme Court's tone sends a clear enough message: enough with Rooker-Feldman, it's almost never going to apply, preclusion is the answer to many of these questions, and there's no bar to parallel litigation. Yet the doctrine continues to be litigated frequently, and appears routinely in cases involving preclusion issues.  Even though preclusion defenses would dispose of most cases that even ostensibly implicate Rooker-Feldman, courts cannot skip the Rooker-Feldman question to resolve the preclusion defense under the hypothetical jurisdiction doctrine.The Rooker-Feldman doctrine limits the court's subject-matter jurisdiction, while preclusion is a merits-based defense. 

If the Court wants to kill the Rooker-Feldman discussion, it is going to have to fire a bullet that directly hits the doctrine in the areas where it continues to overlap with preclusion.  It might hold, for example, that the Rooker-Feldman doctrine only prevents a party from suing a judge or state tribunal for injuries caused by a decision.  Otherwise, preclusion principles control.   

--RR and Counseller

USSCT decides Sinochem

Today in Sinochem, the Supreme Court unanimously held that forum non conveniens, like other threshold nonmerits issues, may be resolved before difficult issues of jurisdiction (both of the subject matter and the person).  While the Court's earlier rejection of hypothetical jurisdiction forbids a court from assuming its own power to decide the merits of a case, choosing among threshold nonmerits grounds does not entail an ultra vires assumption of substantive, law-declaring power.

-RR