Saturday, July 31, 2010
Professor Thomas V. Burch (Florida State University College of Law) has posted "Manifest Disregard and the Imperfect Procedural Justice of Arbitration" on SSRN. It will be published in the Kansas Law Review.
The abstract states:
Friday, July 30, 2010
Yesterday the U.S. Judicial Panel on Multidistrict Litigation (JPML) heard argument on various motions to centralize litigation relating to the BP Oil Spill. Orders relevant to the hearing are available on the JPML website here.
Thursday, July 29, 2010
The National Law Journal reports a decision from the Seventh Circuit holding that the insurers of sellers of baby products had no duty to defend the insured in a class action lawsuit that sought only economic damages.
Wednesday, July 28, 2010
Tuesday, July 27, 2010
Howard Wasserman (Florida International) has posted on SSRN his paper, Civil Rights and Federal Courts: Creating a Two-Course Sequence, 54 St. Louis Univ. L.J. 821 (2010). Here’s the abstract:
This paper discusses the details of an independent course on § 1983/constitutional litigation as an off-shoot of the traditional Federal Courts course and how to create a two-court upper-level course sequence. The paper was published as part of the St. Louis University Law Journal's symposium on "Teaching Civil Rights."
Monday, July 26, 2010
Courtesy of the Drug and Device Law Blog comes this post about Franklin v. Medtronic, Inc., 2010 U.S. Dist. LEXIS 71069 (D. Col. May 12, 2010). The court dismissed a claim that an implantable defibrillator malfunctioned and caused an injury using Twombly, and preemption and causation doctrines. The post reflects the delight of our honorable Drug and Device Law Blog colleague, but also provides a good summary of the opinion.
Last week the Eleventh Circuit issued a very significant (though a bit puzzling) decision on the 2005 Class Action Fairness Act (CAFA). The case is Cappuccitti v. DirecTV, Inc., No. 09-14107, ___ F.3d ___, 2010 U.S. App. LEXIS 14724, 2010 WL 2803093 (11th Cir. July 19, 2010), covered earlier here. One of CAFA’s most significant changes was an amendment to the diversity jurisdiction statute, codified at 28 U.S.C. § 1332(d), to authorize federal diversity jurisdiction over class actions for which there is (a) minimal diversity between the parties, and (b) an aggregate amount in controversy in excess of $5,000,000. Neither party in Cappuccitti disputed that federal subject matter jurisdiction was proper under § 1332(d); DirecTV's appeal challenged only the district court’s refusal to compel arbitration. But the Eleventh Circuit raised the jurisdictional issue sua sponte and dismissed the case entirely. It held that even if a class action’s aggregate amount-in-controversy exceeds $5,000,000, CAFA jurisdiction applies only if at least one class member’s claim exceeds the $75,000 threshold that applies for ordinary diversity jurisdiction under 28 U.S.C. § 1332(a).
It is difficult to see how this result follows from CAFA’s text. CAFA’s § 1332(d) created a new category of diversity jurisdiction over class actions that is distinct from the general form of diversity jurisdiction set forth in § 1332(a). The only situation where the two overlap is for so-called “mass actions” -- cases that are not class actions but nonetheless include more than 100 plaintiffs with related claims. Section 1332(d)(11) provides that such “mass actions” can trigger CAFA jurisdiction, but only for plaintiffs whose claims exceed § 1332(a)’s $75,000 threshold. See 28 U.S.C. § 1332(d)(11)(B)(i). Cappuccitti, however, is a true class action brought pursuant to Federal Rule of Civil Procedure 23. So § 1332(d)(11)’s provisions for “mass actions” don’t apply, leaving no textual basis for incorporating § 1332(a)’s $75,000 threshold into § 1332(d).
Thus, § 1332(d)’s plain text provides that as long as a class action’s aggregate amount in controversy exceeds $5 million, it doesn’t matter whether any individual class member’s claim exceeds $75,000 (or any other amount). CAFA’s legislative history confirms that this was exactly what Congress intended. According to the Senate Judiciary Committee’s report (S. Rep. 109-14), CAFA responded to “the nonsensical result under which a citizen can bring a ‘federal case’ by claiming $75,001 in damages for a simple slip-and-fall case against a party from another state, while a class action involving 25 million people living in all fifty states and alleging claims against a manufacturer that are collectively worth $15 billion must usually be heard in state court (because each individual class member's claim is for less than $75,000).” [S. Rep. 109-14, at p.11 (emphasis added)]. In further critiquing the pre-CAFA approach to diversity jurisdiction over class actions, the Senate Report explained [at p.69]:
[T]he process of assessing whether a class action complies with the current jurisdictional amount requirement is also often “an expensive and time consuming process,” requiring discovery on the nature and value of the named plaintiffs' claims. As noted previously, in some federal Circuits, the jurisdictional amount requirement in a class action is satisfied by showing that any member of the proposed class is asserting damages in excess of $75,000, and in other Circuits, the question is whether each and every member of the putative class has individually an amount in controversy exceeding $75,000. Again, this time-consuming issue, often requiring significant amounts of record review and fact-finding, is litigated very frequently in the many class actions that are removed to federal court under current law. [CAFA] will make the resolution of class action jurisdictional issues easier -- not harder. . . . [I]t will be much easier to determine whether the amount in controversy presented by a purported class as a whole (that is, in the aggregate) exceeds $5 million than it is to assess the value of the claim presented by each and every individual class member, as is required by the current diversity jurisdictional statute.
[S. Rep. 109-14, at p.11 (emphasis added)].
My purpose here is not to defend CAFA. One can certainly question whether, as a policy matter, federal diversity jurisdiction should have been expanded to cover these kinds of class actions. And CAFA does contain several instances of problematic drafting (see, e.g., here and here). But the issue addressed in Cappuccitti is not one of them. The court’s holding is very hard to square with CAFA’s text and purpose.
Sunday, July 25, 2010
Ronen Perry (University of Haifa) has posted Economic Loss, Punitive Damages, and the Exxon Valdez Litigation to SSRN.
On March 24, 1989, an Exxon supertanker ran aground on Bligh Reef off the Alaskan coast, spilling millions of gallons of crude oil into Prince William Sound. The spill was probably the worst environmental disaster in American history, and sparked unusually extensive and complex litigation, as well as a vast academic literature. But the natural focus on concrete legal and procedural questions has left at least one abstract juridical puzzle unsolved - one that goes to the very foundation of tort liability.
The article uncovers a fundamental yet unnoticed inconsistency in American land-based and maritime tort law that surfaced following the unprecedented spill. The understandable emphasis on the award of punitive damages in recent literature has overshadowed an extremely important part of the Exxon Valdez litigation, namely the wholesale rejection of numerous claims for purely economic loss by the federal district court in the early 1990s. Thus, on the one hand, liability for economic loss was strictly limited under the renowned Robins Dry Dock v. Flint, leaving dozens of thousands of victims uncompensated. On the other hand, liability was expanded through an award of punitive damages to relatively few successful claimants. While these two components of the legal saga might not seem incompatible from a simple doctrinal perspective, they are inconsistent on a deeper - justificatory - level. This inconsistency transcends the Exxon Valdez litigation: It is a troubling trait of land-based and maritime tort law, which happened to surface when the Exxon oil submerged.
The first two parts introduce the clashing rules and their underlying rationales: Part I discusses the origins of the exclusionary (economic loss) rule, its scope of application, and most importantly - its main justifications in American case law and academic literature. Part II provides a short history of punitive damages, and discusses the common justifications for this private law anomaly. Next, Part III shows how the two rules were applied through the Exxon Valdez litigation, and explains why their in tandem application gives rise to incoherence on the justificatory level. After delineating the contours of the stark incongruity, the article proposes a conceptual framework for resolution. Generally, it holds that if courts believe liability must be expanded beyond the limits set by the exclusionary rule in order to obtain certain levels of deterrence and retribution, relaxing the exclusionary rule and allowing more victims to recover is a more defensible path than awarding punitive damages to the already compensated few. The former simply extends the application of two general principles of tort law, whereas the latter is based on problematic exceptions to these universal principles and generates severe distributive injustice.
Through this analysis, the article not only sheds new light on the particular proceedings and on the common law of torts, but also lays the foundation for a more holistic approach to legal reasoning: a transition from fragmentation to integration. “Can two walk together, except they be agreed?” the biblical prophet rhetorically inquires. The Exxon Valdez litigation shows that they can, but this article concludes that they should not.
Saturday, July 24, 2010
Since some of the provisions of Arizona Senate Bill 1070 (the controversial Arizona immigration statute) implicate federalism issues, you might find "Arizona Senate Bill 1070: A Preliminary Report" of interest. It has been posted on SSRN by its authors: Professors Gabriel J. Chin (University of Arizona James E. Rogers College of Law; University of Arizona School of Government and Public Policy), Carissa Byrne Hessick (Arizona State University Sandra Day O'Connor College of Law), Toni M. Massaro (University of Arizona James E. Rogers College of Law), and Marc L. Miller (University of Arizona James E. Rogers College of Law).
The abstract states:
Friday, July 23, 2010
Samuel Bray (Stanford Law School) has posted Preventative Adjudication to SSRN.
This Article identifies, justifies, and explains the parameters of a largely ignored but important category of cases - what is here called “preventive adjudication.” In this category of cases, courts offer opinions without any “command” to the parties, and these opinions are meant to avoid future harm, not remedy past harm. Despite receiving little attention in the legal literature, preventive adjudication is pervasive throughout law. It happens in declaratory judgment actions about wills, patents, and unconstitutionally vague statutes; in paternity and maternity petitions; in petitions to have missing persons declared dead; in boundary disputes; in actions to quiet title. This Article explains what preventive adjudication is and how it should and should not be used.
Preventive adjudication is intuitively appealing, because it helps people avoid harm and clarifies the law. But there are downsides to deciding cases in advance instead of waiting for remedial adjudication. The argument for preventive adjudication is therefore a qualified one. This Article identifies not only the merits of preventive adjudication but also the crucial limiting principles. One limiting principle is administrative and error costs; another is the adequacy of discounting, i.e., taking into account the uncertainty of future events. People discount for many kinds of uncertainty, and discounting is usually adequate for uncertainty caused by law. But discounting is inadequate when the law causes uncertainty about inescapable threshold questions for human behavior, such as legal parenthood, citizenship, marital status, or death. Discounting is also inadequate for uncertainty about property rights, because uncertainty undermines the policy reasons for having property rules in the first place. Where discounting is inadequate, preventive adjudication is especially valuable.
This Article also shows how this normative understanding of preventive adjudication can be translated into the actual practice of courts in the United States. Legal systems in the United States have two ways of determining which cases should be decided by preventive adjudication: sometimes they rely on judicial discretion to decide if preventive adjudication is appropriate in each case (“retail sorting”); and sometimes they specify categories of cases in which preventive adjudication is available (“wholesale sorting”). An analysis of both approaches shows that wholesale sorting - which is common in state courts but almost unknown in federal courts - better aligns the actual practice of preventive adjudication with the cases in which it is justifiable.
This week the Eleventh Circuit issued a decision interpreting 28 U.S.C. § 1332(d), the new form of diversity jurisdiction created by the 2005 Class Action Fairness Act (CAFA). In Cappuccitti v. DirecTV, Inc., No. 09-14107, ___ F.3d ___, 2010 WL 2803093, 2010 U.S. App. LEXIS 14724 (11th Cir. July 19, 2010), the court holds that even if the class action’s aggregate amount-in-controversy exceeds § 1332(d)’s $5,000,000 requirement, CAFA diversity jurisdiction is available only if at least one class member’s claim exceeds the $75,000 threshold required for ordinary diversity jurisdiction under 28 U.S.C. § 1332(a). From the opinion:
We hold that in a CAFA action originally filed in federal court, at least one of the plaintiffs must allege an amount in controversy that satisfies the current congressional requirement for diversity jurisdiction provided in 28 U.S.C. § 1332(a). . . . If we held that § 1332(a)'s $75,000 requirement for an individual defendant did not apply to § 1332(d)(2) cases, we would be expanding federal court jurisdiction beyond Congress's authorization. We would essentially transform federal courts hearing originally-filed CAFA cases into small claims courts, where plaintiffs could bring five-dollar claims by alleging gargantuan class sizes to meet the $5,000,000 aggregate amount requirement. While Congress intended to expand federal jurisdiction over class actions when it enacted CAFA, surely this could not have been the result it intended.
(Hat Tip: Jay Tidmarsh)
Thursday, July 22, 2010
Professor James Maxeiner (Baltimore) has posted on SSRN his article, Pleading and Access to Civil Procedure: Historical and Comparative Reflections on Iqbal, a Day in Court and a Decision According to Law, 114 Penn State L. Rev. ___ (forthcoming 2010). Here’s the abstract:
The Iqbal decision confirms the breakdown of contemporary American civil procedure. We know what civil procedure should do, and we know that our civil procedure is not doing it. Civil procedure should facilitate determining rights according to law. It should help courts and parties apply law to facts accurately, fairly, expeditiously and efficiently. This article reflects on three historic American system failures and reports a foreign success story.
Pleadings can help courts do what we know courts should do: decide case on the merits, accurately, fairly, expeditiously and efficiently. Pleadings facilitate a day in court when focused on deciding according to law. Pleadings are, however, only part of the process of determining rights and of applying law to facts. They cannot do it all. Their utility is limited by the interdependent nature of determining law and finding facts to apply law to facts.
The United States has had three principal systems of civil procedure; all three have failed. The United States has used three principal forms of pleading - common law pleading, fact pleading, and notice pleading; all three have proven in-adequate. None has achieved both accuracy and expedition; none has managed both fairness and efficiency. Although wildly different in what they have required of pleading, all three systems of civil procedure have shared common flaws: they have expected too much of lawyers and not enough of judges. They have allowed issue deciding to substitute for law applying.
Since 1877 Germany has had only one system of civil procedure; that system has worked well. It has stood the test of time. Its unchallenged and unchanged basic principle is that parties provide facts and courts apply law. Da mihi factum, dabo tibi jus. Parties and courts cooperate. Pleading is only the beginning of that cooperation. Pleading leads directly to a day in court. Pleading directs the court down the path to a decision according to law.
U.S. Appeals Court Tells State Department to Provide More Due Process to Alleged Foreign Terrorist Organizations
Professor Cindy Galway Buys (Southern Illinois University School of Law) posted this on the International Law Prof Blog:
On Friday, the U.S. Court of Appeals for the District of Columbia Circuit issued a ruling in which it ordered the U.S. State Department to provide more process to an organization, the Mojahedin-e Khalq Organization (MEK) (also called the People’s Mojahedin Organization of Iran (PMOI)), which is designated as a foreign terrorist organization (FTO) with the meaning of the Anti-Terrorism and Effective Death Penalty Act of 1996 (AEDPA), as amended. Under AEDPA, the Secretary of State may designate an entity as an FTO if she determines that (A) the entity is foreign, (B) it engages in “terrorist activity” or “terrorism” and (C) the terrorist activity threatens the security of the United States or its nationals. 8 U.S.C. § 1189(a)(1). “Terrorist activity” is defined in section 1182(a)(3)(B)(iii) of the Act and includes hijacking, sabotage, kidnapping, assassination and the use of explosives, firearms, or biological, chemical or nuclear weapons with intent to endanger people or property, or a threat or conspiracy to do any of the foregoing. To “engage in terrorist activity” involves, among other acts, soliciting funds or affording material support for terrorist activities, id. § 1182(a)(3)(B)(iv), while “terrorism” means “premeditated, politically motivated violence perpetrated against noncombatant targets by subnational groups or clandestine agents,” 22 U.S.C. § 2656f(d)(2). Being designated an FTO means that the assets of the organization may be frozen, its members barred from entering the U.S., and its supporters criminally prosecuted.
PMOI challenged its designation as an FTO claiming that it had renounced violence, had handed over its weapons to U.S. authorities in Iran, and had provided extensive information and other cooperation to the U.S. authorities there. The Secretary of State rejected PMOI's request to be removed from the FTO list on the basis of both classified and unclassified information, but did not provide PMOI with access to any of the information or an opportunity to rebut the allegations prior to making the determination. PMOI claimed that the Secretary violated due process for failure to provide it with copies of at least the unclassified information upon which the decision was based and an opportunity to rebut that information. PMOI also challenged the Secretary of State's determination on the basis that it lacked substantial support in the record, but the Court did not reach that issue, deciding instead to remand the case to the lower court on the due process issue. The Court held that PMOI was entitled to access to the unclassfied documents and an opportunity to rebut the information before the Secretary's decision was finalized and made public.
While this decision is a victory for an organization seeking to revoke its designation as an FTO and for the rule of law generally, the Court was careful to emphasize its deference to the Executive Branch in many respects. It reiterated that the determination of what activities constitute a threat to the United States is a political question that is not judicially reviewable. The Court also stated that it would not second guess the Secretary's determinations with respect to the credibility of particular sources.
Wednesday, July 21, 2010
Discovery Order in Toyota MDL incorporates elements of parallel state and federal administrative investigations
The National Law Journal reports that the California federal judges hearing the Toyota MDLs has approved a new joint discovery plan.
Of interest to civ pro folks is the fact that the plan takes advantage of discovery and facts already prepared for cases pending in other states and from a federal administrative investigation:
In their joint discovery plan, the parties submitted 21 topics to be covered in depositions, including the location and access to documents and people associated with the electronic throttle control systems in Toyota vehicles -- specifically, documents in two state court cases in Michigan and California.
Discovery will include information about customer complaints and internal studies of sudden unintended acceleration, the whereabouts of electronic data recorders and Toyota's advertising, sales and public relations materials. Toyota must provide nonprivileged documents that it produced earlier this year to the National Highway Traffic Safety Administration, Congress and state attorneys general.
Professor Niels J. Philipsen (Maastricht University Faculty of Law, Metro) and Professor Michael G. Faure (University of Maastricht Faculty of Law, Metro; Erasmus University Rotterdam School of Law) have posted "Fees for Claim Settlement in the Field of Personal Injury: Empirical Evidence from the Netherlands" on SSRN. It will be published in the Journal of European Tort Law.
The abstract states:
Monday, July 19, 2010
With a hat tip to the Current Index of Legal Periodicals, here are some recently published articles that might be of interest:
Casey R. Fronk, The cost of judicial citation: an empirical investigation of citation practices in the federal appellate courts, 2010 U. Ill. J.L. Tech. & Pol'y 51
Erin B. Kaheny, The nature of circuit court gatekeeping decisions, 44 Law & Soc'y Rev. 129 (2010)
Thomas O. Main, The procedural foundation of substantive law, 87 Wash. U. L. Rev. 801 (2010)
Tanya J. Monestier, Personal jurisdiction over non-resident class members: have we gone down the wrong road? 45 Tex. Int'l L.J. 537 (2010)
Peter Robinson, Settlement conference judge--legal lion or problem solving lamb: an empirical documentation of judicial settlement conference practices and techniques, 33 Am. J. Trial Advoc. 113 (2009)
Otto Sandrock, The choice between forum selection, mediation and arbitration clauses: European perspectives, 20 Am. Rev. Int'l Arb. 7 (2009)
Catherine M. Sharkey, Federal incursions and state defiance: punitive damages in the wake of Philip Morris v. Williams, 46 Willamette L. Rev. 449 (2010)
Steven Shavell, On the design of the appeals process: the optimal use of discretionary review versus direct appeal, 39 J. Legal Stud. 63 (2010)
Dawinder S. Sidhu, First Korematsu and now Ashcroft v. Iqbal: the latest chapter in the wartime Supreme Court's disregard for claims of discrimination, 58 Buff. L. Rev. 419 (2010)
Note, The Pakistani lawyers' movement and the popular currency of judicial power, 123 Harv. L. Rev. 1705 (2010)
Brandon M. Kimura, & Eric K. Yamamoto, Note, Electronic discovery: a call for new rules for the Hawai'i courts, 32 U. Haw. L. Rev. 153 (2009)
Professor Martin H. Redish (Northwestern University School of Law) and Professor Colleen McNamara (Northwestern University School of Law) have posted "Back to the Future: Discovery Cost Allocation and Modern Procedural Theory" on SSRN.
The abstract states:
Thursday, July 15, 2010
Prof. Alan Rau (Texas) has posted on SSRN his article, Understanding (and Misunderstanding) 'Primary Jurisdiction', which is forthcoming in the American Review of International Arbitration. Here’s the abstract:
In our “Westphalian” regime of international arbitration, conflict and competition between national jurisdictions, with overlapping and yet plausible claims to supervise the process, become inevitable. The conventional starting point for any discussion - the fulcrum around which the entire arbitral enterprise pivots - has been the supposed dichotomy between the state of the “seat” - where the arbitration finds its juridical “home,” and whose jurisdiction over the process is therefore “primary” - and all other states whose jurisdiction must therefore be deemed only “secondary.” Both legislation and Convention envisage an exclusive role for the former in setting the process in motion - for example, by appointing the arbitrators - and above all in monitoring compliance with the agreement - for example, by annulling or vacating the resulting award.
That the “seat” is the privileged starting point with respect to any allocation of judicial authority has traditionally been a simple reflection of the power of any sovereign over acts taking place within its “territory”; an alternative and perhaps more robust explanation would be somewhat more “contractualist,” giving priority to the parties’ exercise of autonomy in the very act of selecting the place of arbitration - and to the intuition that, by extension, they have presumptively chosen to subject themselves both to a certain body of “arbitration law,” and to the supervisory jurisdiction of the courts charged with applying that law.
I begin by canvassing the various fact patterns in which the traditional allocation of international competence on the basis of “primary” and “secondary” jurisdiction might possibly be thought useful: It has become, for example, the heuristic of choice to test the extraterritorial effect of an award, in circumstances where the agreement of the parties has subjected the arbitral process to a particular legal system whose own courts have found it lacking in legitimacy. All this is much controverted, but generally well understood.
The inevitable problem, though, is that none of this is a universal solvent - the world can after all be understood and patterned and divided up in all sorts of ways. What may have begun as a rough attempt to allocate responsibility over the unfolding of the process, has often been unthinkingly applied to all sorts of new and unexpected and inappropriate contexts.
Where, for example, a party has asked a court to enjoin an arbitration against him that has been threatened or initiated - perhaps on the fundamental ground that he has never even given his assent - American courts will increasingly hold that, whatever power they might have to enjoin a “local” arbitration, it would be “inconsistent with the purpose of the New York Convention” to enjoin arbitral proceedings in a state of “secondary jurisdiction” - and thus they “lack jurisdiction” to do so. Where a party has claimed that a foreign award has been obtained by bribery and corruption, and wishes to institute a “collateral attack” in this country through a RICO action, it may equally be held that the court lacks “subject matter jurisdiction” to reassess an award rendered in a state of “primary jurisdiction”; “under the framework of the New York Convention, the proper method of obtaining this relief is by moving to set aside or modify the award in a court of primary jurisdiction.”
American courts thus seem curiously mesmerized, when asked to deploy familiar procedural devices in aid of their nationals, by a rhetoric invented for quite different purposes. What purports in cases like these to be a commendable solicitude for the needs of international arbitration, takes the form of an abdication of any decision making power whatever, in favor of the courts of the seat. To invoke a putative lack of “power” based upon absolute prohibitions that supposedly emanate from the Convention seems a crude and clumsy and overbroad and irresponsible way of responding; even a legal system quite committed, for example, to the proposition that attempts to evade the arbitral process are likely to be quite without merit - or for that matter to the proposition that international neutrals cannot possibly be corrupt - need not shrink, on the prophylactic grounds of lack of jurisdiction, from testing any challenges.