Civil Procedure & Federal Courts Blog

Drahozal and Rutledge on Contract and Procedure

Christopher Drahozal (University of Kansas) and Peter Rutledge (University of Georgia) have posted Contract and Procedure to SSRN.

Abstract:      
This paper examines both the theoretical underpinnings and empirical picture of procedural contracts. Procedural contracts may be understood as contracts in which parties regulate not merely their commercial relations but also the procedures by which disputes over those relations will be resolved. Those procedural contracts regulate not simply the forum in which disputes will be resolved (arbitration vs litigation) but also the applicable procedural framework (discovery, class action waivers, remedies limitations, etc.). At a theoretical level, this paper explores both the limits on parties' ability to regulate procedure by contract (at issue in the Supreme Court's recent Rent-A-Center decision) and the scope of an arbitrator's ability to fill gaps in parties' procedural contracts (at issue in the Supreme Court's recent Stolt-Nielsen decision). At an empirical level, this paper taps a largely unexplored database of credit card contracts available at the Federal Reserve in order to examine actual practices in the use of procedural contracts.

RJE

Drahozal and Rutledge on Contract and Procedure

Christopher Drahozal (University of Kansas) and Peter Rutledge (University of Georgia) have posted Contract and Procedure to SSRN.

Abstract:      
This paper examines both the theoretical underpinnings and empirical picture of procedural contracts. Procedural contracts may be understood as contracts in which parties regulate not merely their commercial relations but also the procedures by which disputes over those relations will be resolved. Those procedural contracts regulate not simply the forum in which disputes will be resolved (arbitration vs litigation) but also the applicable procedural framework (discovery, class action waivers, remedies limitations, etc.). At a theoretical level, this paper explores both the limits on parties' ability to regulate procedure by contract (at issue in the Supreme Court's recent Rent-A-Center decision) and the scope of an arbitrator's ability to fill gaps in parties' procedural contracts (at issue in the Supreme Court's recent Stolt-Nielsen decision). At an empirical level, this paper taps a largely unexplored database of credit card contracts available at the Federal Reserve in order to examine actual practices in the use of procedural contracts.

RJE

Decision of Interest: More on Removal Deadlines

We covered earlier the Fourth Circuit’s en banc decision in Barbour v. International Union, which perpetuated a circuit split over how to calculate removal deadlines in multiple-defendant cases. That same week, the Ninth Circuit weighed in on the other side of the divide. The decision is Destfino v. Reiswig, 2011 WL 182241, 2011 U.S. App. LEXIS 1375. Per Chief Judge Kozinski:

We adopt the later-served rule as the wiser and more equitable approach. This rule doesn't go so far as to give already-served defendants a new thirty-day period to remove whenever a new defendant is served, as that could give a defendant more than the statutorily prescribed thirty days to remove. See 28 U.S.C. § 1446(b). Rather, we hold that each defendant is entitled to thirty days to exercise his removal rights after being served. Because [the later-served defendant] removed the case within thirty days from when it was served, the removal was timely.

(Hat Tip: Benjamin Roesch)

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SCOTUS Cert Grant of Interest: Stok & Associates v. Citibank

The Supreme Court granted certiorari this week in Stok & Associates v. Citibank (No. 10-514), which presents the question: 

Under the Federal Arbitration Act (“FAA”), should a party be required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable?

SCOTUSblog’s case file is available here, which contains links to the Eleventh Circuit’s opinion below and the cert-stage briefs.

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SCOTUS Oral Argument in Bond v. United States

Yesterday the Supreme Court heard oral argument in Bond v. United States, covered earlier here, which presents the question: 

Whether a criminal defendant convicted under a federal statute has standing to challenge her conviction on grounds that, as applied to her, the statute is beyond the federal government’s enumerated powers and inconsistent with the Tenth Amendment.

Here are links to the oral argument transcript, a story about the case by Adam Liptak in today’s New York Times, and Dahlia Lithwick's story on Slate entitled "The Case of the Poisoned Lover: The Supreme Court gets its sexiest case ever, but all it wants to talk about is standing," which begins:

When the Lifetime Channel casts the movie version of Bond v. U.S., it will doubtless pit someone Valerie Bertinelli-ish against someone Judith Light-like and leave all the good 10th Amendment stuff on the cutting room floor.

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PS: For readers interested more in the “Civil Procedure” rather than the “Federal Courts” side of our ledger (not to mention casting options for a potential made-for-TV movie), there’s a reference to Twombly, Conley, and pleading standards on p.16 of the oral argument transcript. Petitioner's counsel was asked how the Court should treat some language in an earlier opinion (Tennessee Electric Power v. TVA) indicating that only states, not individuals, have standing to raise this sort of constitutional challenge. Counsel responded: “[I]f you ask me what you should do with it, you should do what you did in Twombly, with some language in an opinion that had continued to cause trouble in the 50 years since. You should just say that's no longer good law because it's not.”

Today's SCOTUS Decision in Williamson v. Mazda: More on Federal Preemption of State Tort Claims

Following up on yesterday’s decision in Bruesewitz v. Wyeth, the Supreme Court issued another decision on preemption today: Williamson v. Mazda (covered earlier here). Justice Breyer wrote the Opinion of the Court, which begins:

Federal Motor Vehicle Safety Standard 208 (1989 version) requires, among other things, that auto manufacturers install seatbelts on the rear seats of passenger vehicles. They must install lap-and-shoulder belts on seats next to a vehicle's doors or frames. But they have a choice about what to install on rear inner seats (say, middle seats or those next to a minivan's aisle). There they can install either (1) simple lap belts or (2) lap-and-shoulder belts.

The question presented here is whether this federal regulation pre-empts a state tort suit that, if successful, would deny manufacturers a choice of belts for rear inner seats by imposing tort liability upon those who choose to install a simple lap belt. We conclude that providing manufacturers with this seatbelt choice is not a significant objective of the federal regulation. Consequently, the regulation does not pre-empt the state tort suit.

The Court distinguished Geier v. American Honda Motor, 529 U.S. 861 (2000), which had held that a similar regulation preempted state tort law: “In Geier, . . . the regulation’s history, the agency’s contemporaneous explanation, and its consistently held interpretive views indicated that the regulation sought to maintain manufacturer choice in order to further significant regulatory objectives. Here, these same considerations indicate the contrary.”

Justice Sotomayor joined Justice Breyer’s opinion but also wrote a separate concurrence “to emphasize the Court's rejection of an overreading of Geier that has developed since that opinion was issued.”

Justice Thomas did not join Justice Breyer’s opinion but concurred in the judgment. His concurring opinion begins: “The Court concludes that the National Traffic and Motor Vehicle Safety Act of 1966 (Safety Act) and Federal Motor Vehicle Safety Standard 208 (FMVSS 208) do not pre-empt the Williamsons' state tort lawsuit. I agree. But I reach this result by a more direct route: the Safety Act's saving clause, which speaks directly to this question and answers it.” In reaching this conclusion, Justice Thomas reiterated his view that “[p]urposes-and-objectives pre-emption -- which by design roams beyond statutory or regulatory text -- is . . . wholly illegitimate.”

Justice Kagan took no part in the case.

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Today's SCOTUS Decision in Bruesewitz v. Wyeth: Preemption of State Tort Claims by National Childhood Vaccine Injury Act

The Supreme Court issued its decision today in Bruesewitz v. Wyeth (covered earlier here), which presents the question “whether a preemption provision enacted in the National Childhood Vaccine Injury Act of 1986 (NCVIA) bars state-law design-defect claims against vaccine manufacturers.” Splitting 6-2, the Court held that the claims were preempted. Justice Scalia wrote the majority opinion, and Justice Sotomayor wrote a dissent that was joined by Justice Ginsburg. Justice Breyer joined the majority opinion but wrote a separate concurrence. Justice Kagan took no part in the case.

From Justice Scalia’s majority opinion: 

We set forth again the statutory text at issue: “No vaccine manufacturer shall be liable in a civil action for damages arising from a vaccine-related injury or death associated with the administration of a vaccine after October 1, 1988, if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings.”
 
The “even though” clause clarifies the word that precedes it. It delineates the preventative measures that a vaccine manufacturer must have taken for a side-effect to be considered “unavoidable” under the statute. Provided that there was proper manufacture and warning, any remaining side effects, including those resulting from design defects, are deemed to have been unavoidable. State-law design-defect claims are therefore preempted.

If a manufacturer could be held liable for failure to use a different design, the word “unavoidable” would do no work. A side effect of a vaccine could always have been avoidable by use of a differently designed vaccine not containing the harmful element. The language of the provision thus suggests that the design of the vaccine is a given, not subject to question in the tort action. What the statute establishes as a complete defense must be unavoidability (given safe manufacture and warning) with respect to the particular design. Which plainly implies that the design itself is not open to question.

Justice Sotomayor’s dissenting opinion, joined by Justice Ginsburg, begins:

Vaccine manufacturers have long been subject to a legal duty, rooted in basic principles of products liability law, to improve the designs of their vaccines in light of advances in science and technology. Until today, that duty was enforceable through a traditional state-law tort action for defective design. In holding that §22(b)(1) of the National Childhood Vaccine Injury Act of 1986 pre-empts all design defect claims for injuries stemming from vaccines covered under the Act, the Court imposes its own bare policy preference over the considered judgment of Congress. In doing so, the Court excises 13 words from the statutory text, misconstrues the Act’s legislative history, and disturbs the careful balance Congress struck between compensating vaccine-injured children and stabilizing the childhood vaccine market. Its decision leaves a regulatory vacuum in which no one ensures that vaccine manufacturers adequately take account of scientific and technological advancements when designing or distributing their products. Because nothing in the text, structure, or legislative history of the Vaccine Act remotely suggests that Congress intended such a result, I respectfully dissent.

Justice Breyer’s concurring opinion begins:

I join the Court’s judgment and opinion. In my view, the Court has the better of the purely textual argument. But the textual question considered alone is a close one. Hence, like the dissent, I would look to other sources, including legislative history, statutory purpose, and the views of the federal administrative agency, here supported by expert medical opinion. Unlike the dissent, however, I believe these other sources reinforce the Court’s conclusion.

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Childress on the Erie Doctrine and International Law

Professor Donald Earl Childress III (Pepperdine) has posted on SSRN a draft of his article When Erie Goes International, which will be published in the Northwestern University Law Review. Here's the abstract:

This Article challenges the widely held belief that the Erie doctrine automatically applies in private international law cases – namely, cases where a United States federal court is asked by private litigants to apply foreign, non-United States law. Under the conventional understanding, the Erie doctrine not only requires federal courts to apply the law of the state in which the court sits but also to apply that state’s conflict-of-laws rules, even when those rules direct the court to apply the law of a foreign country. This Article argues that courts should question the mechanistic application of a doctrine announced in the 1930s (and updated to conflict of laws in the 1940s and 1970s) to the realities of private international litigation today, especially in light of more recent Supreme Court cases concerning constitutional constraints on choice of law. Among other findings, the Article provides empirical evidence uncovering a previously unrecognized connection in the scholarly literature: internationalizing the Erie doctrine may in part explain the increased use of the forum non conveniens doctrine by federal district courts. The Article also reframes the ongoing and contested scholarly debate between Professors Curtis Bradley, Jack Goldsmith, Harold Koh, and others regarding the application of Erie to customary international law in light of Erie’s application in private international law cases. The Article not only provides a new empirical and scholarly lens through which to view the international application of the Erie doctrine but also offers a suggested approach to be employed by courts when faced with such cases.

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$7.2 Billion Law Suit for "Abusive Law Enforcement"

It's only marginally about civil procedure, but I am very amused by this whole lawsuit: R. Allen Stanford who is accused of running a "mini-Madoff" Ponzi scheme has filed a $7.2 billion lawsuit against a number of government officials for their behavior in investigating him.

Wondering what they did and why it's worth $7.2 billion?  AmLaw Daily reports here.

RJE

Shapiro and Schmidt on Oral Dissenting on the Supreme Court

Carolyn Shapiro (Chicago Kent) and Christopher Schmidt (Chicago Kent) have posted Oral Dissenting on the Supreme Court to SSRN.

Abstract:      
In this Article we offer the first comprehensive evaluation of oral dissenting on the Supreme Court. We examine the practice in both historical and contemporary perspective, take stock of the emerging academic literature on the subject, and suggest a new framework for analysis of oral dissenting. Specifically, we put forth several claims. Contrary to the common assumption of scholarship and media coverage, oral dissents are nothing new. Oral dissenting has a long tradition, and its history provides valuable lessons for understanding the potential and limits of oral dissents today. Furthermore, not all oral dissents are alike. Dissenting Justices may have different reasons for deciding to announce their opinions, and the reception and potential influence of an oral dissent varies according to the situation. Recent scholarly efforts to identify a set of factors for predicting the likelihood of an oral dissent thus may miss the forest for the trees. The more interesting question, we suggest, is not necessarily why a Justice might decide to announce a dissent, but why certain oral dissents seem to reverberate while others (perhaps most) are ignored and forgotten. We therefore seek to recenter the discussion of oral dissents, moving to an empirical and analytical discussion of the role that oral dissents actually play in the dynamic relationship between the Court and the American people.

RJE

Ewing & Kysar on Climate Change, Courts, and the Common Law

Benjamin Ewing and Professor Douglas Kysar (Yale) have posted on SSRN a draft of their article, Climate Change, Courts, and the Common Law. Here’s the abstract:

Not just a system of checks and balances ideally tuned to constrain collective political action, the constitutional separation of powers also may be seen as a system of “prods and pleas” in which distinct governmental branches and actors can push each other to entertain collective political action when necessary. Though an inversion of the assumed direction of checks and balances, such prods and pleas are not a radical reconfiguration of the basic structure and principles of American government. Rather, they are limited government’s failsafe: a latent capacity inherent to a system of divided authority that does and should activate when the external pressures of a changing world threaten the sustainability of disaggregated governance. By understanding and embracing their role in the shadow logic of prods and pleas, judges and other public officials can protect limited government by, when necessary, counteracting its potential to over-prefer passivity.

Through the case study of climate change nuisance litigation - particularly American Electric Power v. Connecticut, a case pending in the Supreme Court of the United States - we examine how three potential obstacles to merits adjudication - political question doctrine, standing, and preemption - should be evaluated in recognition of the significance of prods and pleas. We conclude that federal and state tort law provide an important defense mechanism that can help limited government sustain itself in the face of climate change and other dramatic twenty-first century threats, where the nature of the threat is, in large part, a function of limited government itself. As a residual locus for the airing of grievances when no other government actor is responsive to societal need, the common law of tort is a - and perhaps the - paradigmatic vehicle for the expression of prods and pleas. Although climate change plaintiffs still face long odds on the actual merits of their claims, judges would sell short their institutional role if they dismissed such claims as categorically beyond the proper domain of the courts and the common law. They would duck and weave when they should prod and plea.

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Coming Soon To A House Subcommittee Near You?

From David Ingram at Blog of the Legal Times comes the story New Group in Congress Pushes to Change Legal System. Initiated by six members of the House of Representatives, the newly-formed Congressional Civil Justice Caucus will be promoting “an array of changes to the civil justice system, including proposals related to medical malpractice reform, venue and federal pleading standards.”

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SDNY Blocks Enforcement of Ecuadorian Judgment Against Chevron

In the ongoing litigation between Chevron and plaintiffs in Ecuador, Judge Kaplan of the SDNY has already blocked enforcement of the Ecuadorian judgment in the U.S.  The New York Law Journal reports here on a host of interesting issues: restraining orders, enforcement of judgments, and the use of an internal law firm memo as the basis of the action.

RJE

Decision of Interest: En Banc Fourth Circuit Divides Sharply Over Removal Deadline

In its recent decision Barbour v. International Union (2011 WL 242131, 2011 U.S. App. LEXIS 1695), the en banc Fourth Circuit splits 7-5 over how to apply federal removal requirements when faced with “the defendants-served-on-different-days dilemma.” At issue in Barbour are 28 U.S.C. § 1446(b)'s 30-day deadline for removing a state-court case to federal court, and the “rule of unanimity,” which requires that all defendants join in the removal.

The en banc majority in Barbour adopts what it calls the “McKinney Intermediate Rule” (named for an earlier Fourth Circuit decision). From Judge Hamilton's opinion:

“[T]he McKinney Intermediate Rule requires a notice of removal to be filed within the first-served defendant's thirty-day window, but gives later-served defendants thirty days from the date they were served to join the notice of removal.” (emphasis added)

As the Barbour majority acknowledges, this approach conflicts with decisions from several other circuits that use the “Last-Served Defendant Rule,” which allows “each defendant, upon formal service of process, thirty days to file a notice of removal pursuant to § 1446(b).” E.g., Bailey v. Janssen Phramaceutica, Inc., 536 F.3d 1202, 1209 (11th Cir. 2008) (emphasis added). In Barbour, five Fourth Circuit judges (in an opinion authored by Judge Agee) would have followed the Last-Served Defendant Rule.

The Barbour majority recognizes that its rejection of the Last-Served Defendant Rule could deprive later-served defendants of any opportunity to remove a case when an earlier-served defendant misses its 30-day deadline. But it reasons that an earlier-served defendant who fails to remove within the 30-day deadline has, essentially, consented to remain in state court. That consent forecloses removal. As the majority explains: “If the first-served defendant decides not to remove, later-served defendants are not deprived of any rights under § 1446(b), because § 1446(b) does not prevent them from removing the case; rather, it is the rule of unanimity that does.”

So viewed, what later-served defendants are actually losing under the Fourth Circuit approach is “an opportunity to persuade earlier-served defendants to join a notice of removal.” To this point, the majority responds that “it is difficult to believe that Congress intended to protect this power of persuasion when it enacted § 1446(b).”

For additional coverage, see BNA’s U.S. Law Week (79 U.S.L.W. 2013) and How Appealing.

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(Hat Tips: Tom Rowe & Shaun Shaughnessy)

Conference this Week at the University of Texas: Federalism and Its Future

This week the University of Texas School of Law is hosting a conference entitled “Federalism and Its Future,” which runs from Thursday, February 10 through Saturday, February 12. The conference website states: “The UT faculty and administration welcome nationally and internationally acclaimed academics and lawyers to discuss scholarship on the topic of federalism, both in the United States and abroad.”

Here are links to the schedule, bios of the participants, and the papers to be presented.

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(Hat Tip: Legal Theory Blog)

SCOTUS Litigant Extraordinaire Anna Nicole Smith Now Has an Opera

For those of us who teach the very important Anna Nicole Smith cases, such as Marshall v. Marshall, we can add another teaching arrow to our quiver.

The London Telegraph reports that an Anna Nicole Smith opera will be opening next month at Covent Garden. 

Now we know for sure what opera and the Supreme Court have in common.

RJE

Symposium on Originalism and the Jury

Now in print in the Ohio State Law Journal is a symposium issue on Originalism and the Jury. The symposium was sponsored by The Ohio State University and the University of Illinois. Contributions, available here, include:

Suja A. Thomas, Foreword, 71 Ohio St. L.J. 883 (2010).

Douglas A. Berman, Making the Framers’ Case, and a Modern Case, For Jury Involvement in Habeas Adjudication, 71 Ohio St. L.J. 887 (2010).

Brian T. Fitzpatrick, Originalism and Summary Judgment, 71 Ohio St. L.J. 919 (2010).

Judge Nancy Gertner, Juries and Originalism: Giving “Intelligible Content” to the Right to a Jury Trial, 71 Ohio St. L.J. 935 (2010).

Joan L. Larsen, Ancient Juries and Modern Judges: Originalism’s Uneasy Relationship with the Jury, 71 Ohio St. L.J. 959 (2010).

William E. Nelson, The Lawfinding Power of Colonial American Juries, 71 Ohio St. L.J. 1003 (2010).

James Oldham, On the Question of a Complexity Exception to the Seventh Amendment Guarantee of Trial by Jury, 71 Ohio St. L.J. 1031 (2010).

Gene Schaerr and Jed Brinton, Business and Jury Trials: The Framers’ Vision Versus Modern Reality, 71 Ohio St. L.J. 1055 (2010).

Suja A. Thomas, A Limitation on Congress: “In Suits at common law”, 71 Ohio St. L.J. 1071 (2010).

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