Civil Procedure & Federal Courts Blog

Erie and the History of the One True Federalism

Susan A. Bandes has posted Erie and the History of the One True Federalism on SSRN, which reviews Ed Purcell's book, Brandeis and the Progressive Constitution: Erie, the Judicial Power, and the Politics of the Federal Courts in Twentieth-Century America (New Haven: Yale University Press, 2000).--Counseller

Fraudulent Joinder: Right versus Obligation to Remove

Fraudulent joinder is a familiar removal tool for defendants.  The doctrine establishes a right to remove by disregarding a jurisdictional spoiler's citizenship.  And 30 days is a familiar removal deadline for defendants: the removal statute's 30-day clock starts ticking from particular occurrences.  The interrelationship between the right to remove and the obligation (in the clock-ticking sense) is not always clear.   For example, an amended pleading clarifying that the amount in controversy exceeds the jurisdictional minimum starts the 30-day clock, but defendants need not wait for that amended pleading if they choose to remove and attempt to prove the amount by a preponderance of the evidence.  The clock starts ticking, generally, when a court paper makes it obvious, but the right to remove does not depend upon obviousness in the state-court record.  When does the 30-day clock start ticking in fraudulent-joinder cases?   What if the state court petition reveals an obviously bogus claim against the state-court spoiler?  Does this trigger the 30-day clock?  Recently, Judge Martinez didn't quite answer this question, but he did remand a case because "by not clearly stating when they learned of the alleged fraudulent joinder, Defendants have created both ambiguity and doubt in their Notice of Removal,and as a result the court finds that they did not properly remove the action."  Heads up, removers: Download Ayres.pdf   --RR

City of Cleveland v. Deutsche Bank Trust Co.

"For procedural jocks, life don't get much better than this," say Beck and Herrmann yesterday, reporting on a recent removal/remand decision.  Click here to read their summary and find a link to the decision, which addresses everything from the timing and medium of the consent needed for unanimity to who can give that consent.  --RR   

A new comment to an old post

Back in June, Prof. Counseller wrote about a personal-jurisdiction case styled Phillips v. Prarie Eye Center from the First Circuit.    We recently received the following comment and thought we should bump it to the top in case folks want to respond:

So, I am the Dr. Phillips in the above lawsuit. I am also an attorney. We are preparing an appeal regarding this case to the Supreme Court. I was hoping that someone would be so kind as to share their opinions regarding issues that can be brought up in the brief that will decrease the liklihood that the SC will deny cert. We will certainly include an argument that e-mail should be treated no different than any other from of communication (in person or otherwise). We will also include arguments that I cannot be considered to have reached out in Illinois and all other 50 states by posting my resume on a passive website and that, in fact, Prairie reached out by initating contact with me through an e-mail directed specifically to me. What other strong points do you see?

--RR

Standing Committee Requests Comments on Proposed Rules' Amendments

Ben Spencer reports here.

Cross-Jurisdictional Class-Action Tolling Scorecard

Does filing an unsuccessful class action in one jurisdiction toll the limitations periods for potential plaintiffs in another jurisdiction?  Beck and Herrmann have done the research for you -- and have posted a "scorecard."  --RR

Class-Action Reading

Blum v. General Electric contains an interesting blend of procedure and contract law.  There, some class members had earlier entered into a "Stipulation of Dismissal of Certain Plaintiffs' Claims Without Prejudice."  In that earlier litigation, the parties agreed to the following stipulation:"In the event that the Court should deny the motion for class certification  ... Plaintiffs may refile their claims against Defendants . . . within thirty days after such a ruling, or be barred from doing so."   The Court did deny certification, and the dismissed plaintiffs refiled -- but more than thirty days after the denial.  After the plaintiffs refiled, Defendants moved to dismiss because the refiling was late under the stipulation.  The Court held the stipulation unenforceable for lack of consideration.   Download Blum.pdf   For more class-action reading, click here to download a recent SSRN piece advocating against cost-benefit analyses in class-certification decisions.    --RR

E-Discovery Symposium - Call for Papers

FYI:

Chase College of Law

Northern Kentucky University Law Review

Call for Papers and Panelists

E-discovery Symposium – Saturday, February 28, 2009

 

           Chase College of Law’s Northern Kentucky University Law Review welcomes proposals of both articles and panel presentations for its spring 2009 symposium on E-discovery.  The symposium will be held Saturday, February 28, 2009.  CLE approval will be sought for Kentucky, Ohio and Indiana.  Drafts of the articles would need to be submitted by January 1, 2009, with an expected publication date of spring 2009.  Travel expenses for panelists will be covered.  Please complete the below form and submit it by Friday, September 26, 2008 to Associate Professor Jennifer Anglim Kreder at [email protected].

 

Name: ______________________________________________________________________________

 

Title: _______________________________________________________________________________

 

Law School or Office Affiliation: __________________________________________________________

 

E-mail & Phone: ______________________________________________________________________

 

Address: ____________________________________________________________________________

 

Title of Submission: ___________________________________________________________________

 

____________________________________________________________________________________

 

Submitting: ____ Article Only (approx. ____ pages in Word format);  ____ Presentation Only; ____ Both

 

Description or abstract (max 250 words):

 

Two cases on sanctions

Two recent Seventh Circuit cases involving sanctions deserve a read:

In de Manez v. Bridgeston, in the context of forum non conveniens, the parties fought about whether Mexican courts were an available alternative forum.  "The evidence showed that plaintiffs' U.S. lawyers ... had hired Mexican lawyers on a contingent-fee basis ... for the express purpose of filing a deficient complaint in an improper Mexican court." The idea, of course, was to use the dismissal to convince the federal court that Mexico was not an available adequate forum.  Despite this evidence, the Seventh Circuit vacated and remanded because the party being sanctioned did not receive constitutionally adequate notice and an opportunity to be heard.  Download manez.pdf

In Banco Del Atlantico v. Woods, the sanction of dismissal stuck.  The court held:

The question before us on the plaintiffs’ appeal is whether Judge McKinney abused his discretion in putting an end to this case. We have cautioned that a sanction of dismissal is a last resort which can only be employed in rare cases.  It is a “draconian” remedy which should be applied only in extreme situations, when there is a clear record of delay or contumacious conduct, or when other less drastic sanctions have proven unavailing. That doesn’t mean, however, that it can never be used. Even Draco got it right every once in awhile, and today, when district courts have several hundred cases on their dockets, there are times when the “draconian” remedy is appropos. And that time was reached in this case.

On appeal, the plaintiffs argue, among other things, that“there was no finding or record of delay, contumacious conduct, willfulness, bad faith or fault . . . .” The argument is—if nothing else—audacious. There is, in fact, little else in the record. (citations omitted).

Download Banco.pdf

--RR

Speaking of the Second Branch

This week, yet another court remanded a case to state court because Grable was not satisfied.  In Singh v. Duane Morris LLP, the Fifth Circuit held that second-branch jurisdiction did not extend to plaintiff's malpractice claim.  Suit one was a federal trademark suit that plaintiff lost because he did not produce evidence of secondary meaning.  In suit two, plaintiff sued his lawyer from suit one, arguing that the lawyer messed up by not proving secondary meaning.  Because of the suit-within-a-suit requirement of a malpractice claim, plaintiff's claim, though created by state law, involved an embedded federal issue.  Cue Grable, the second branch, and the article I posted yesterday.    Using the Grable vocabulary, the court persuasively explained how exercising jurisdiction over such a malpractice claim would be "disruptive."  (Its substantiality discussion was less than artful.) The case is notable because it reaches a different result than did the Federal Circuit in a similar case.  In the Air Measurement Case (which we covered here) the court held that second-branch jurisdiction did extend to a malpractice action when the suit within the suit involved patent infringement.    --RR

   

Comments Appreciated

For those interested, I've posted a revised draft on SSRN of my most recent article: It's Just Not Worth Searching for Welcome Mats with a Kaleidoscope and a Broken Compass.   If you have comments, please do e-mail them. The abstract follows:

Justice Holmes construed the words "arising under" to mean something simple and ascertainable - a case arises under the law that creates the cause of action. By rejecting the bright-line Holmes test as the exclusive test, the Supreme Court created a second branch of federal-question jurisdiction, which applies to state-created claims with embedded federal issues, and which is governed by a flexible and elusive standard. While eschewing the bright-line Holmes rule as too rigid, champions of the second branch have both praised its flexibility and predicted that clear-enough boundaries will develop. They have not and will not. Long ago, Justice Cardozo acknowledged that the second branch requires an "accommodation of judgment to...kaleidoscopic situations." Then armed with kaleidoscopes, the Court and Academy tried to locate the boundaries. Professor Cohen then informed us, in his landmark article, that the arising under compass was still broken. The Court tried to fix the compass in the Merrell-Dow case, but that just created a 3-way circuit split. Finally, in the recent Grable case, the Court explained that Merrell-Dow caused confusion because we should have had our kaleidoscopes and compasses set on finding welcome mats. 85 years of trying is enough.

I make three assertions in the article: (1) The second branch should be eliminated (2) by Congress (3) by defining "arising under" solely for purposes of 28 U.S.C. § 1331. Simple may not always, or even often, be better. But in this context it is. Viewed in light of the state, federal, and systemic interests, the costs of retaining the second branch outweigh the benefits. A limited sample group of opinion-generating second-branch removal cases indicates that for every removed case that satisfies Grable about eight more are remanded after an average delay of about six months - cases remanded without opinion almost surely skew the numbers more. The class of delay-prone cases will remain large because most colorably removable cases are removed, and the nature of the second-branch casts a wide net of colorability. As for the change coming by amendment, Justice Thomas recently invited original-intent arguments to justify returning to the Holmes test, and I agree with him in part. We should look for the Holmes test, but to today's Congress, not the Congress of 1875. The article concludes by considering issues surrounding the amendment of a major general grant of jurisdiction and ultimately recommending that Congress should define "arising under" solely for purposes of § 1331. This approach will allow Congress to retain the second branch in areas of exclusive jurisdiction, will eliminate Grable's new disruptiveness prong, and will ultimately facilitate a transition where once again cases construing the jurisdictional statute will resemble statutory-construction cases.

--RR