Civil Procedure & Federal Courts Blog

Fifth Circuit Rules on the Citizenship of a LLC for Purposes of Diversity Jurisdiction:

As noted on Federal Civil Practice Bulletin, the Fifth Circuit in Harvey v. Grey Wolf Drilling Co., --- F.3d ----, 2008 WL 4194538 (5th Cir. Sept. 15, 2008) joined the First, Second, Fourth, Sixth, Seventh, Eighth, Ninth, and Eleventh Circuits in holding that, for the purposes of diversity jurisdiction, the citizenship of an LLC is determined by the citizenship of all of its members.  Click here to read the Fifth Circuit’s opinion and here to read to post on Federal Civil Practice Bulletin.--Counseller/JM   

Recent Scholarship

The following two articles might interest our readers:

• Prof. Paul Lund, Federally-Chartered Corporations and Federal Jurisdiction
• Prof. Austen Parrish, Sovereignty, Not Due Process:  Personal Jurisdiction Over Nonresident, Alien Defendants

--RR

Regulatory Competition, Venue and Delaware's Stake in Corporate Law

Delaware has a near monopoly on desirability for incorporation. However, this monopoly might be faltering with the increase in the fight over venue. Faith Stevelman posted Regulatory Competition, Venue and Delaware's Stake in Corporate Law on SSRN.com looking at the increased fight over venue and the possible negative effects of this litigation.--Counseller

Sponge Bob to the Rescue

Hurricane Ike has significantly damaged the Texas coast, including the city of Houston, home to law firm Vinson & Elkins.  Many of Houston's millions of residents are still without power and other basic services.  To help lawyers cope with problem, V & E allowed their Houston lawyers (still without childcare) to bring their children to work with them.  V & E treated the kids to snacks and a Sponge Bob marathon in one of their mock courtrooms.  Read more here over at the ABA Journal.--Counseller

Preservice Removals and Appellate Review

While we've occasionally posted about preservice removals, Beck and Herrmann have done the heavy lifting.  In today's installment, they ask for appellate guidance.  Lower courts are split on whether a case can be removed when it contains a forum-state-citizen defendant who has not been served with process before removal. (see 28 U.S.C. s1441(b)).   A remand on this ground is unreviewable on appeal, and a denied remand motion is interlocutory.  So, they "urge some court to deny a motion to remand and then certify the jurisdictional question for interlocutory appeal, which would let an appellate court weigh in on the question and give trial judges (and litigants) some much-needed guidance." --RR

Balancing the Pleading Equation

Paul J. Stancil posted Balancing the Pleading Equation on SSRN, which explores the asymmetries of cost and information in the pleading system and how to strike the right balance between these considerations.--Counseller

"To the extent it is correct"

Recently, the Sixth Circuit decided In re Hamilton, a case involving interesting questions of preclusion, Rooker-Feldman, the Anti-Injunction Act, and discharge in bankruptcy.  Essentially, the bankruptcy court declared some debts discharged.  Later, a state court decided against tthe debtor, interpreting the discharge order to exclude a debt.  The state appellate court affirmed.  After some more procedural wrangling, the debtor returned to ask the bankruptcy court to enjoin execution of the state-court judgment. 

Generally, when there's an alleged exception to the Anti-Injunction Act based on the effect of a federal judgment, the party seeking a federal-court injunction must ask the federal court for the injunction before the state court rules on the issue.  The injunction seeker generally has two options, not three-- (1) she CAN litigate the issue in state court and appeal any adverse ruling (theoretically to the USSCT because the effect of a federal judgment is a federal-enough issue for s1257 jurisdiction); (2) she CAN seek an injunction in federal court under an AIA exception before the state court rules on the effect of the allegedly preclusion/effective federal judgment; (3) but she CANNOT have two bites at the apple by arguing the effect in state court and then resorting to a constructive appeal in federal court if the state court does not buy the preclusion (or effectiveness) argument.

In In re Hamilton, the Sixth Circuit decided that two bites at the apple are available in this context:  "A bankruptcy court can find that a postpetition state court judgment is void despite the full faith and credit normally given to state court judgments."  Although I am admittedly not a bankruptcy scholar, I must tentatively disagree with any "exception" based on the following reasoning:

[A]lthough state courts have unbridled authority to determine the dischargeability of debts, state courts have the authority to interpret a bankruptcy courts discharge order only to the extent that the state court's interpretation is correct.

--RR

OK, Discovery’s a Problem, But What Can Be Done About It?

Martha Neil has written a piece titled OK, Discovery’s a Problem, But What Can Be Done About It? on abajournal.com. The piece looks at the problems facing the discovery process and explores various possible solutions.--Counseller

'U Can't Touch This' Litigation Hold

Check out 'U Can't Touch This' Litigation Hold by Stanley P. Jaskiewicz over at LAW.com.  The piece explores the IT litigation hold and how the Federal Rules of Civil Procedure deal with the problem of litigation holds and ever expanding electronic data.--Counseller

"A Unified Theory of 28 U.S.C. s1331 Jurisdiction"

Click here to download A Unified Theory of 28 U.S.C. s1331 Jurisdiction, which Michigan State Law Prof Lou Mulligan recently posted on SSRN.  The abstract follows:

Title 28, section 1331 of the United States Code provides the jurisdictional grounding for the majority of cases heard in the federal courts, yet it is not well understood. The predominant view holds that section 1331 doctrine both lacks a focus upon congressional intent and is internally inconsistent. I seek to counter both these assumptions by re-contextualizing the Court's section 1331 jurisprudence in terms of the contemporary judicial usage of right (i.e., clear, mandatory obligations capable of judicial enforcement) and cause of action (i.e., permission to vindicate a right in court). In conducting this reinterpretation, I argue that section 1331 jurisdiction is best understood as a function of the federal right and cause of action plaintiff asserts. Under my view, these two concepts, when weighed against each other, offer strong evidence of congressional intent to vest the federal courts with jurisdiction and form the foundational elements for the federal question jurisdictional analysis. This principle underlies three standards which offer both a better explanation of the Court's past section 1331 cases and better guides for future decisions than the Holmes test. Under the first standard, section 1331 jurisdiction lies when a plaintiff makes an assertion of a non-judicially created federal cause of action and a mere colorable assertion to a federal right. Under the second standard, section 1331 lies when a plaintiff alleges a state-law cause of action and asserts a more weighty substantial federal right. Finally, under the third standard, section 1331 jurisdiction lies when plaintiff asserts a cause of action created as a matter of federal common law and plaintiff asserts a substantial federal common law right coupled with a sufficient showing to support the right

--RR

Court or Arbitrator - Who Decides Whether Res Judicata Bars Subsequent Arbitration Under the Federal Arbitration Act?

Jarrod Wong posted Court or Arbitrator - Who Decides Whether Res Judicata Bars Subsequent Arbitration Under the Federal Arbitration Act? on SSRN, which looks at the Federal Arbitration Act and examines whether courts or arbitrators determine the impact of the res judicata doctrine.--Counseller