Civil Procedure & Federal Courts Blog

Mulligan on Jurisdiction by Cross-Reference

Lumen Mulligan (University of Kansas Law School) has posted Jurisdiction by Cross-Reference to SSRN.

Abstract:     
State and federal law often cross-reference each other to provide a rule of decision. The difficulties attendant to these cross-referenced schemes are brought to the fore most clearly when a federal court must determine whether such bodies of law create federal question jurisdiction. Indeed, the federal courts have issued scores of seemingly inconsistent opinions on these cross-referential cases. In this article, I offer an ordering principle for these apparently varied, cross-referential, jurisdictional cases. I argue that the federal courts only take federal question jurisdiction over cross-referenced claims when they, from a departmental perspective, maintain declaratory authority over the cross-referenced law. I defend this thesis by extensively exploring cross-referenced regimes in numerous modes. I also contend that this cross-referential ordering principle offers significant insights into the nature of federal-question claims more generally. Namely, I assert that, contrary to the predominant view, the federal courts do not stand ready to hear cases in which the judiciary as a whole is deployed merely as a fact-finding forum under federal question jurisdiction. Further, I contend that this view of federal question jurisdiction comports with the original understanding of the that font of jurisdiction as well as principles of judicial independence. And that the Court’s tendency to vest federal question jurisdiction upon mere formal distinctions in these contexts often leads to separation of powers difficulties. As such, I advocate that jurisdiction over all cross-referenced regimes proceed on functionalist lines.

RJE

Walsh on Lack of Subject Matter Jurisdiction over Health Care Reform Challenges

Professor Kevin Walsh (Richmond) has posted on SSRN his essay, The Ghost that Slayed the Mandate. Here’s the abstract:

Virginia v. Sebelius is a federal lawsuit in which Virginia seeks the invalidation of President Obama’s signature legislative initiative of healthcare reform. Virginia seeks declaratory and injunctive relief to vindicate a state statute declaring that no Virginia resident shall be required to buy health insurance. To defend this state law from the preemptive effect of federal law, Virginia contends that the federal legislation’s individual mandate to buy health insurance is unconstitutional. Virginia’s lawsuit is one of the most closely followed and politically salient federal cases in recent times. Yet neither the federal government nor any other legal commentator has previously identified the way in which the very features of the case that contribute to its political salience also require that it be dismissed for lack of statutory subject-matter jurisdiction. The Supreme Court has placed limits on statutory subject-matter jurisdiction over declaratory judgment actions in which a state seeks a declaration that a state statute is not preempted by federal law - precisely the relief sought in Virginia v. Sebelius. These limits insulate federal courts from the strong political forces surrounding lawsuits that seek federal court validation of state nullification statutes. This Essay identifies these heretofore neglected limits, shows why they demand dismissal of Virginia v. Sebelius, and explains why it is appropriate for federal courts to be closed to this type of suit.

(Hat Tip: PrawfsBlawg)

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Wasserman on 'Drive-By Jurisdictional Rulings'

Professor Howard Wasserman (Florida International) has posted on SSRN his essay, The Demise of ‘Drive-By Jurisdictional Rulings’, 105 Northwestern University Law Review Colloquy 184 (2011). Here's the abstract:

This essay analyzes and comments on four decisions from the Supreme Court’s October 2009 Term considering the line and divide between jurisdictional and non-jurisdictional issues. of particular note are Reed Elsevier, Inc. v. Mushkin and Morrison v. Nat’l Australia Bank. In these and the other two cases, the Court unanimously rejected a jurisdictional characterization of the challenged legal rule, concluding that the rule either went to the substantive merits of the plaintiff’s claim of right or to ordinary procedure, without limiting the court’s root structural adjudicative authority. These are the latest cases in the justices’ consistent recent effort to eliminate “drive-by jurisdictional rulings,” in which a legal rule is labeled as jurisdictional only through “unrefined” analysis and without rigorous consideration of the label’s meaning or consequence. These four cases illustrate the Court continued, and welcome, retreat from its admitted “profligate” and “less than meticulous” use of the term. Instead, the Court has sought to define and maintain sharp and clean lines between judicial subject-matter jurisdiction and other, non-jurisdictional issues.

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Burbank & Subrin on Restoring Trials

Professors Stephen Burbank (Pennsylvania) and Stephen Subrin (Northeastern) have posted on SSRN their essay, Litigation and Democracy: Restoring a Realistic Prospect of Trial, which is forthcoming in the Harvard Civil Rights – Civil Liberties Law Review. Here’s the abstract:

In this essay we review some of the evidence confirming, and some of the reasons underlying, the phenomenon of the vanishing trial in federal civil cases and examine some of the costs of that phenomenon for democratic values, including in particular democratic values represented by the right to a jury trial under the Seventh Amendment. We discuss the Supreme Court’s recent pleading decisions in Twombly and Iqbal as examples of procedural attacks on democracy in four dimensions: (1) they put the right to jury trial in jeopardy; (2) they undercut the effectiveness of congressional statutes designed to compensate citizens for injury and/or to enable implementation of important social norms through private enforcement; (3) they side-step not only congressional review but the entire rulemaking process that Congress prescribed, including multiple steps designed to facilitate broad public participation, and (4) they reward the lawlessness of lower courts that had ignored prior Court precedent proscribing fact-pleading requirements imposed by judicial decision with comparable lawlessness (and reportedly have spurred another cycle of lawlessness in district courts that have ignored them). We then suggest some remedial measures that might restore a realistic prospect of trial, a number of which would depart from the norm of trans-substantive procedure. We propose that the rulemakers develop a separate track for simple cases – a category that would not include cases for which there is objective evidence of congressional reliance on private enforcement -- that would employ bright-line rules permitting very limited discovery and virtually no case management. Recognizing that document discovery presents the most difficult reform challenge, we suggest a rule requiring that document requests in simple cases be specific. For discovery in complex cases, we stress the need for empirical study, particularly in light of the recent Federal Rule amendments concerning electronic discovery. We also suggest the development of discovery protocols by the stakeholders in substantive law litigation areas believed (or, in the event of additional empirical work, found) to involve disproportionate discovery. Finally, doubting that rule amendments could fix what is wrong with summary judgment today, we argue that courts should be given the resources necessary to allow judges to do what judges used to do. Believing that the current state of destructive friction between civil litigation and democracy is a product not just of inadequate resources, but also of the triumph of institutional and professional self-interest and both legislative and judicial politics, we contend that our citizens deserve better. The aspirations of our founders for trials in open court and jury trials are not obsolete, and neither is the duty of the judiciary, within constitutional limits, to respect clearly articulated statutory norms and clearly articulated legislative policy.

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Rep. Kucinich: My Lawsuit Allegations Are Private!

Representative Dennis Kucinich is suing the House of Representatives cafeteria over an olive pit in a sandwich.  He alleges that biting into the sandwich resulted in extensive dental damage.

Although it's not really a civ pro matter, I couldn't help but chuckle at the response of his spokesman: "It truly is a private matter."  That might have been the case, but perhaps he's learned a lesson in the joys of the public record.

RJE

Decision of Interest: Seventh Circuit on Twombly/Iqbal & 1292(b) Appeals

Last month, the Seventh Circuit decided an appeal of a district court’s refusal to grant a defendant’s motion to dismiss an antitrust complaint. The case is In re Text Messaging Antitrust Litigation (No. 10-8037), ___ F.3d ___, 2010 WL 5367383, 2010 U.S. App. LEXIS 26299 (Dec. 29, 2010), and Judge Posner’s opinion addresses both pleading standards under Twombly/Iqbal, and whether 28 U.S.C. § 1292(b) allows an immediate appeal of a district court’s denial of a Twombly/Iqbal-based motion to dismiss. The court concludes that 1292(b) is a proper means for appellate review, and then affirms the district court’s conclusion that the complaint passed muster. Detailed excerpts from the opinion (which include a reference to Paradise Lost, a discussion of child-run lemonade stands, and a recognition that "pleading standards in federal litigation are in ferment after Twombly and Iqbal") follow after the jump.

Continue reading

Decision of Interest: 5th Circuit Rejects Katrina Flood Settlement

The Fifth Circuit rejected the $21 million settlement of a class action over damage caused by the levee breaches on the grounds that it did not grapple with the fairness of dispersal of funds and instead "punted" that job to the special master.

The BNA reports here at U.S. Law Week.  The opinion is available here.

RJE

Today's SCOTUS Decision in Ortiz v. Jordan

The Supreme Court issued a unanimous decision today in Ortiz v. Jordan (covered earlier here and here). Justice Ginsburg delivered the opinion of the Court. From the opinion:

We granted review to decide a threshold question on which the Circuits are split: May a party, as the Sixth Circuit believed, appeal an order denying summary judgment after a full trial on the merits? Our answer is no. The order retains its interlocutory character as simply a step along the route to final judgment. See Cohen v. Beneficial Industrial Loan Corp., 337 U. S. 541, 546 (1949). Once the case proceeds to trial, the full record developed in court supersedes the record existing at the time of the summary judgment motion. …

When summary judgment is sought on a qualified immunity defense, the court inquires whether the party opposing the motion has raised any triable issue barring summary adjudication. “[O]nce trial has been had,” however, “the availability of official immunity should be determined by the trial record, not the pleadings nor the summary judgment record.” 15A C. Wright, A. Miller, & E. Cooper, Federal Practice & Procedure §3914.10, p. 684 (2d ed. 1992 and Supp. 2010). After trial, if defendants continue to urge qualified immunity, the decisive question, ordinarily, is whether the evidence favoring the party seeking relief is legally sufficient to overcome the defense. See Fed. Rule Civ. Proc. 50(a), (b) (stating conditions on which judgment may be granted as a matter of law).

In the case before us, the Court of Appeals, although purporting to review the District Court’s denial of the prison officials’ pretrial summary-judgment motion, several times pointed to evidence presented only at the trial stage of the proceedings, The appeals court erred, but not fatally, by incorrectly placing its ruling under a summary judgment headline. Its judgment was infirm, however, because Jordan's and Bright's failure to renew their motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b) left the appellate forum with no warrant to reject the appraisal of the evidence by “the judge who saw and heard the witnesses and ha[d] the feel of the case which no appellate printed transcript can impart.” Cone v. West Virginia Pulp & Paper Co., 330 U. S. 212, 216 (1947).

As Justice Ginsburg writes later in the opinion:

Nor did [defendants] avail themselves of Rule 50(b), which permits the entry, postverdict, of judgment for the verdict loser if the court finds that the evidence was legally insufficient to sustain the verdict. See Fed. Rule Civ. Proc. 50(a), (b). Absent such a motion, we have repeatedly held, an appellate court is "powerless" to review the sufficiency of the evidence after trial. Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc., 546 U. S. 394, 405 (2006).

Justice Thomas authored a concurring opinion, joined by Justices Scalia and Kennedy:

We granted certiorari to decide the narrow question whether a party may appeal an order denying summary judgment after a full trial on the merits. I agree with the Court that the answer is no. The Court also reaches beyond that question, however, to address the effect of Jordan and Bright’s failure to renew their motion for judgment as a matter of law under Federal Rule of Civil Procedure 50(b). I would limit our decision to the question presented and remand for consideration of any additional issues.

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Strong on Jurisdictional Discovery in Transnational Litigation

Professor S.I. Strong (Missouri) has posted on SSRN her article, Jurisdictional Discovery in Transnational Litigation: Extraterritorial Effects of United States Federal Practice, which is forthcoming in the Journal of Private International Law. Here’s the abstract:

Jurisdictional discovery is a largely unknown, uniquely American device that combines two of the more internationally problematic aspects of United States civil procedure, namely an exceptionally broad view of extraterritorial jurisdiction and an expansive approach to pre-trial discovery. The mechanism – which is widely available and often used in cases where the defendant challenges the jurisdiction of the court – comes into play before the court’s jurisdiction over the defendant is even established and allows plaintiffs to ask defendants to produce a vast array of documents and information that can be used to justify the plaintiff’s claim that jurisdiction in this court is proper. This article describes the device in detail, distinguishing it both practically and theoretically from methods used in other common law systems to establish jurisdiction, and discusses how recent US Supreme Court precedent provides international actors with the means of limiting or avoiding this potentially burdensome procedure.

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9/11 Litigation: Cantor Fitzgerald Overclaims for Damages

Judge Hellerstein (SDNY) has issued an opinion stating that under New York law, Cantor Fitzgerald cannot recover economic losses from the loss of its employees.

Further coverage here at the New York Law Journal.

RJE

SCOTUS Oral Argument Transcript in Astra USA v. Santa Clara County

As covered earlier, the Supreme Court heard oral argument today in Astra USA, Inc. v. Santa Clara County. Here's the oral argument transcript.

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SCOTUS Oral Argument in Astra USA v. Santa Clara County

We covered earlier the Supreme Court’s grant of certiorari in Astra USA, Inc. v. Santa Clara County (09-1273), which presents the question:

Whether, in the absence of a private right of action to enforce a statute, federal courts have the federal common law authority to confer a private right of action simply because the statutory requirement sought to be enforced is embodied in a contract.

The Court hears oral argument today. Check back for links to the oral argument transcript when it’s available.

Professor Linda Mullenix (Texas) has a preview of the case here.

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SCOTUS Oral Argument Transcript in Stern v. Marshall

As covered earlier, the Supreme Court heard oral argument today in Stern v. Marshall. The argument transcript is available here.

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SCOTUS Oral Argument Transcript in Smith v. Bayer Corp.

As covered earlier here, the Supreme Court heard oral argument today in Smith v. Bayer Corp., which presents the questions: 

(1) Whether, under the re-litigation exception of the Anti-Injunction Act, a district court can enjoin parties from seeking class certification in state court under state procedural rules when the district court had previously denied certification of a similar class under federal procedural rules but neither the parties sought to be estopped nor the issues to be presented in state court are identical as those presented to the district court.

(2) Whether a district court that previously denied class certification nonetheless has personal jurisdiction over the absent putative class members such that it may enjoin them from seeking class certification in state court.

The argument transcript is available here.

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SCOTUS Cert. Grants of Interest: Three Cases on Private Causes of Action under the Supremacy Clause

The Supreme Court granted certiorari today in three cases: Maxwell-Jolly v. Independent Living Ctr. (09-958); Maxwell-Jolly v. California Pharmacists Ass’n (09-1158); and Maxwell-Jolly v. Santa Rosa Memorial Hospital(10-283). The Court consolidated the cases and granted certiorari only on the first question presented:

“Whether Medicaid providers may maintain a cause of action under the Supremacy Clause to enforce § 1396a(a)(30)(A) by asserting that the provision preempts a state law that reduces reimbursement rates.”

SCOTUSblog’s casefiles (which contain links to the lower court opinions and the cert-stage briefs) are available here, here, and here.

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SCOTUS Oral Arguments in Smith v. Bayer; Stern v. Marshall

We covered earlier the Supreme Court’s grants of certiorari in Smith v. Bayer Corp. and Stern v. Marshall. The Court hears oral argument in both cases today. Check back for links to the oral argument transcripts once they’re available.

Smith v. Bayer Corp. (09-1205) presents the questions:

(1) Whether, under the re-litigation exception of the Anti-Injunction Act, a district court can enjoin parties from seeking class certification in state court under state procedural rules when the district court had previously denied certification of a similar class under federal procedural rules but neither the parties sought to be estopped nor the issues to be presented in state court are identical as those presented to the district court.

(2) Whether a district court that previously denied class certification nonetheless has personal jurisdiction over the absent putative class members such that it may enjoin them from seeking class certification in state court.

Stern v. Marshall (No. 10-179) presents the questions:

(1) Whether the Ninth Circuit’s interpretation of 28 U.S.C. § 157(b)(2)(C) contravenes congressional intent;

(2) Whether Congress may authorize core jurisdiction over debtors’ compulsory counterclaims to proofs of claim;

(3) Whether the Ninth Circuit contravened Supreme Court precedent and created a circuit split by holding that Congress cannot constitutionally authorize non-Article III bankruptcy judges to enter final judgment on all compulsory counterclaims to proofs of claim.

Here are links to SCOTUSblog’s casefiles, where you can find the briefs in these cases:

Smith v. Bayer Corp.
Stern v. Marshall

Parenthetically, Stern v. Marshall concerns ongoing litigation (which has already generated one SCOTUS decision: Marshall v. Marshall, 547 U.S. 293 (2006)) over the estate of J. Howard Marshall, Jr., the late husband of the late model, actress, and reality TV star Vickie Lynn Marshall (perhaps better known to our readers as Anna Nicole Smith). Anna Nicole Smith's estate is the petitioner in the case being argued today.

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Eisenberg and Heise on Punitive Damage Awards

Theodore Eisenberg (Cornell Law School) and Michael Heise (Cornell Law School) have posted Judge-Jury Difference in Punitive Damages Awards: Who Listens to the Supreme Court? to SSRN.

Abstract:     
We analyze thousands of trials from a substantial fraction of the nation’s most populous counties as well as a smaller sample of less populous counties. Evidence from four major Civil Justice Survey data sets spanning more than a decade establishes that: (1) compensatory awards are strongly associated with punitive awards and (2) the punitive-compensatory relation has not materially changed over time. But (3) 2005 data suggest, for the first time, systematic differences between judges and juries in the punitive-compensatory relation. Despite claims that the Supreme Court’s State Farm decision changed the punitive-compensatory relation, we present evidence that the 2005 shift is not attributable to the State Farm case or to other possibly relevant likely factors such as the relative flow of personal injury cases to judges and juries, inclusion of 110 small counties in the 2005 data, or changes in the 2005 data coding. The judge-jury difference more likely turns on unobserved factors driving the selection of cases for adjudication before judges and jurors.

RJE

Symeonides on 2010 Choice of Law Cases in American Courts

Dean Symeon Symeonides (Willamette) has posted on SSRN his Twenty-Fourth Annual Survey of American Choice of Law Cases, which will be published in the American Journal of Comparative Law. Here’s the abstract:

This is the Twenty-Fourth Annual Survey of American Choice-of-Law Cases. It is written at the request of the Association of American Law Schools Section on Conflict of Laws, and is intended as a service to fellow teachers and students of conflicts law, both within and outside the United States.

The Survey covers cases decided by American state and federal appellate courts from January 1 to December 31, 2010. Of the 1,271 appellate conflicts cases decided during this period, the Survey focuses on those cases that may contribute something new to the development or understanding of conflicts law - and, particularly, choice of law.

This has been an unusually rich year in choice-of-law developments. Some of the highlights include: Four decisions by the U.S. Supreme Court (on extraterritoriality, sovereign immunity, class actions, and the Hague Convention on International Child Abduction, respectively), and several circuit court decisions on the extraterritorial reach of federal laws; a constitutional amendment in Oklahoma purporting to prohibit its courts from using international law, foreign law, and Sharia law; three cases involving efforts to recover art lost during the Nazi era and also implicating federal affairs questions; several cases affirming class certification in consumer protection cases and one case holding that the application of one state's consumer credit law to soliciting out-of-state lenders was unconstitutional under the dormant Commerce Clause; a major decision by the California Supreme Court refining its comparative impairment approach and a richer than usual assortment of cases involving tort, contract, product liability and insurance conflicts, as well as domestic relations conflicts; and several opinions written by Judge Posner in his always interesting style, including one questioning the value of using foreign-law experts.

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Fitzpatrick on Class Action Settlements and Fee Awards

Prof. Brian Fitzpatrick (Vanderbilt) has posted on SSRN his article, An Empirical Study of Class Action Settlements and Their Fee Awards, 7 Journal of Empirical Studies 811 (2010). Here’s the abstract:

This article is a comprehensive empirical study of class action settlements in federal court. Although there have been prior empirical studies of federal class action settlements, these studies have either been confined to securities cases or have been based on samples of cases that were not intended to be representative of the whole (such as those settlements approved in published opinions). By contrast, in this article, I attempt to study every federal class action settlement from the years 2006 and 2007. As far as I am aware, this study is the first attempt to collect a complete set of federal class action settlements for any given year. I find that district court judges approved 688 class action settlements over this two-year period, involving nearly $33 billion. Of this $33 billion, roughly $5 billion was awarded to class action lawyers, or about 15 percent of the total. Most judges chose to award fees by using the highly discretionary percentage-of-the-settlement method, and the fees awarded according to this method varied over a broad range, with a mean and median around 25 percent. Fee percentages were strongly and inversely associated with the size of the settlement. The age of the case at settlement was positively associated with fee percentages. There was some variation in fee percentages depending on the subject matter of the litigation and the geographic circuit in which the district court was located, with lower percentages in securities cases and in settlements from the Second and Ninth Circuits. There was no evidence that fee percentages were associated with whether the class action was certified as a settlement class or with the political affiliation of the judge who made the award.

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Seiner on Twombly/Iqbal and Affirmative Defenses

Prof. Joseph Seiner (South Carolina) has posted on SSRN a draft of his article, Twombly, Iqbal, and the Affirmative Defense. Here’s the abstract:

In Twombly v. Bell Atlantic Corp., 550 U.S. 644 (2007), and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Supreme Court announced a new plausibility standard for a plaintiff’s allegations. The decisions may have even broader implications, however, as many federal district courts have already applied this pleading standard to a defendant’s affirmative defenses. This Article attempts – for the first time in the legal literature – to make sense of Twombly and Iqbal in the context of the affirmative defense.

This Article addresses the two possible readings of Twombly and Iqbal for a defendant’s responsive pleadings. The first reading is a narrow case-specific approach, and concludes that the decisions are inapplicable to defendants and must be limited to a plaintiff’s civil complaint. The second approach is much broader, and concludes that a defendant must comply with the Supreme Court’s plausibility standard by pleading enough facts to sufficiently state an affirmative defense. This Article explains why a close textual review of the Federal Rules of Civil Procedure, combined with numerous policy and practical considerations, support the broader second reading of Twombly and Iqbal for affirmative defenses.

What it actually means to plausibly plead a defense is a much more complicated question. This paper closely examines this issue through the lens of one of the most complex and important defenses in all civil case law – the affirmative defense to a claim of sexual harassment. By way of this example, this Article explains how the plausibility standard would apply more broadly to defendants in all civil cases. This Article does not attempt to answer the normative question of whether the plausibility standard was properly established by the Supreme Court. Instead, this Article assumes the validity of the Court’s approach, and describes what this standard would look like if applied to the affirmative defense. The question of whether the plausibility standard should apply to defendants – and if so how it should apply – is likely to create significant controversy in the coming years. This paper establishes a foundation for that debate, and fills the current void in the academic scholarship on this issue.

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