Wednesday, August 31, 2011
We are very pleased to welcome Professor Brendan Maher as a guest-blogger for the month of September. Brendan is an Assistant Professor of Law at Oklahoma City University School of Law (and not to be confused with the famous Irish hurler).
Great to have you on board, Brendan!
Tuesday, August 30, 2011
Beginning today, SCOTUSblog is hosting a symposium on the future of class action lawsuits. From the introductory post:
In the wake of several recent decisions from the Court – such as Wal-Mart v. Dukes, AT&T Mobility v. Concepcion, and Smith v. Bayer– involving class actions, SCOTUSblog has solicited posts from experts in the field to the effects that these decisions (as well as others relating to class actions) will have on cases that are currently pending in the lower courts, as well as the future of class action lawsuits more generally.
We are grateful to our contributors, who are listed below, for their hard work:
- Sergio Campos, University of Miami School of Law
- Sarah Crawford, National Partnership for Women and Families
- Scott Dodson, William & Mary Law School
- Allen Erbsen, University of Minnesota Law School
- Ted Frank, Center for Class Action Fairness, LLC
- J. Russell Jackson, Skadden, Arps, Slate, Meagher & Flom LLP
- Paul Karlsgodt, Baker Hostetler
- Charles Silver, University of Texas Law School
- Andrew J. Trask, McGuire Woods
Links to the symposium posts will be available here.
Monday, August 29, 2011
The Section of Antitrust Law of the ABA will present a webinar on September 7, 2011, from 12:00 - 1:30 p.m. entitled, "OMG! Has Twombly been Over-Turned?: the 7th Circuit's Text Messaging Case." The flyer states that "Judge Posner . . . has clarified that a plaintiff alleging an antitrust conspiracy need merely establish a 'non-negligible probability' that the claim is valid."
The full flyer and registration for the teleconference can be accessed here.
--Patricia Hatamyar Moore
Rodrick Hills (NYU) has posted Preemption Doctrine in the Roberts Court: Constitutional Dual Federalism By Another Name? to SSRN.
This paper argues that the Roberts Court’s preemption decisions suggest a pattern of deferring to state laws in “regulatory” contexts while presumptively preempting them in “commercial” contexts. As I use these terms, “commercial” contexts involve federal and state laws having the purpose of defining the rules for bargaining and remedies for breach of bargains, while “regulatory” contexts involve state and federal laws defining the baseline entitlements over which the parties bargain. The “mailbox rule” defining when a contract is accepted is an example of a “commercial” law, while a prohibition on filling a wetlands or building a cement plant in a residential zone are examples of “regulatory” laws. I suggest that, in “commercial” contexts so defined, the Court’s decisions seem to favor preemption. In “regulatory” contexts, the decisions lean against preemption. In both contexts, the Court enforces the independence of each level of government from the other, striking blows for states’ control over their own property and personnel by refusing to give federal agencies exclusive control over the enforcement of state law in Cuomo v. Clearing House Association. The flip side of state autonomy is federal supremacy: Despite the exhortations of some scholars, the Court seems to have continued to resist the idea that state law can be justified by its utility in reforming federal administrative processes.
Put simply, the Roberts Court’s decisions seem to follow a traditional script of dual federalism – that is, carving out separate spheres for state and federal governments and enforcing norms of mutual non-interference between these spheres. The paper concludes with speculation about whether there might be any normative justification for this pattern. One might argue that preemption is less costly when the state and federal rules in question define the framework for bargaining as opposed to the assignment of entitlements. By contrast, preemption of state laws defining entitlements to health, safety, bodily integrity, and property more generally tend to raise culturally and politically divisive issues that are best handled subnationally in a federal regime.
Saturday, August 27, 2011
In re Taylor provides a fascinating look into a high-volume foreclosure firm’s relationship with its client, HSBC, and its implications for Rule 11 sanctions. 2011 WL 3692440 (3d Cir. Aug. 24, 2011). I quote extensively from the case:
The Taylors filed for a Chapter 13 bankruptcy in September 2007. They listed the bank HSBC, which held the mortgage on their house, as a creditor. In turn, HSBC filed a proof of claim with the bankruptcy court.
At the time of the bankruptcy proceeding, the Taylors were also involved in a payment dispute with HSBC [over a $180/month flood insurance cost for the property]. The Taylors disputed HSBC's position [that additional insurance was necessary] and continued to pay their regular mortgage payment, without the additional insurance costs.
Because of the Taylors' withheld insurance payments, HSBC's records indicated that they were delinquent. Thus, in January 2008, HSBC retained the Udren Firm [of which Mr. Udren was the only partner] to seek relief from the [bankruptcy] stay.
Ms. Doyle, who appeared for the Udren Firm in the Taylors' case, is a managing attorney at the firm, with twenty-seven years of experience. HSBC does not deign to communicate directly with the firms it employs in its high-volume foreclosure work; rather, it uses a computerized system called NewTrak (provided by a third party, LPS) to assign individual firms discrete assignments and provide the limited data the system deems relevant to each assignment. The firms are selected and the instructions generated without any direct human involvement. The firms so chosen generally do not have the capacity to check the data (such as the amount of mortgage payment or time in arrears) provided to them by NewTrak and are not expected to communicate with other firms that may have done related work on the matter. Although it is technically possible for a firm hired through NewTrak to contact HSBC to discuss the matter on which it has been retained, it is clear from the record that this was discouraged and that some attorneys, including at least one Udren Firm attorney, did not believe it to be permitted.
. . . .
In the Taylors' case, NewTrak provided the Udren Firm with only the loan number, the Taylors' name and address, payment amounts, late fees, and amounts past due. It did not provide any correspondence with the Taylors concerning the flood insurance dispute.
. . . .
[Ms.] Doyle filed the motion for relief from the stay. This motion was prepared by non-attorney employees of the Udren Firm, relying exclusively on the information provided by NewTrak. The motion said that the debtor “has failed to discharge arrearages on said mortgage or has failed to make the current monthly payments on said mortgage since” the filing of the bankruptcy petition. . . . It stated that the Taylors had “inconsequential or no equity” in the property. The motion never mentioned the flood insurance dispute.
Doyle did nothing to verify the information in the motion for relief from stay besides check it against “screen prints” of the NewTrak information. She did not even access NewTrak herself. In effect, she simply proofread the document. It does not appear that NewTrak provided the Udren Firm with any information concerning the Taylors' equity in their home, so Doyle could not have verified her statement in the motion concerning the lack of equity in any way, even against a “screen print.”
The Taylors filed responses indicating that they had paid the amount of the mortgage minus the disputed insurance portion. Nonetheless, HSBC went forward with a hearing on its motion for relief from stay and its claim.
HSBC was represented at the hearing by a junior associate at the Udren Firm, Mr. Fitzgibbon. At that hearing, Fitzgibbon ultimately admitted that, at the time the motion for relief from the stay was filed, HSBC had received a mortgage payment for November 2007, [despite pleadings filed by HSBC that] stated otherwise. Despite this, Fitzgibbon urged the court to grant the relief from stay [because of the Taylors’ failure to answer Requests For Admission]. . . . It appears from the record that Fitzgibbon initially sought to have the RFAs admitted as evidence even though he knew they contained falsehoods.
After the hearing, the bankruptcy court directed the Udren Firm to obtain an accounting from HSBC of the Taylors' prepetition payments so that the arrearage on the mortgage could be determined correctly. At the next hearing, in June 2008, Fitzgibbon stated that he could not obtain an accounting from HSBC, though he had repeatedly placed requests via NewTrak. He told the court that he was literally unable to contact HSBC—his firm's client—directly to verify information which his firm had already represented to the court that it believed to be true.
[After what amounted to a show-cause order,] [t]he bankruptcy court held four hearings over several days, making in-depth inquiries into the communications between HSBC and its lawyers in this case, as well as the general capabilities and limitations of a system like NewTrak. Ultimately, it found that the following had violated Rule 9011 [the bankruptcy rules equivalent of FRCP 11]: Fitzgibbon, for pressing the motion for relief based on claims he knew to be untrue; Doyle, for failing to make reasonable inquiry concerning the representations she made in the motion for relief from stay and the response to the claim objection; Udren and the Udren Firm itself, for the conduct of its attorneys; and HSBC, for practices which caused the failure to adhere to Rule 9011.
Because of his inexperience, the court did not sanction Fitzgibbon. However, it required Doyle to take 3 CLE credits in professional responsibility; Udren himself to be trained in the use of NewTrak and to spend a day observing his employees handling NewTrak; and both Doyle and Udren to conduct a training session for the firm's relevant lawyers in the requirements of Rule 9011 and procedures for esca-lating inquiries on NewTrak. The court also required HSBC to send a copy of its opinion to all the law firms it uses in bankruptcy proceedings, along with a letter explaining that direct contact with HSBC concerning matters relating to HSBC's case was permissible.
The district court reversed the bankruptcy court’s decision in its entirety, including the sanctions on HSBC, which had not even been appealed.
The Third Circuit reversed the district court in part, upholding the bankruptcy court’s imposition of sanctions on Ms. Doyle and the Udren firm, and holding that the district court lacked jurisdiction to reverse the sanctions against HSBC because HSBC had not appealed.
In so holding, the Third Circuit stated:
As an initial matter, the appellees' insistence that Doyle's and Fitzgibbon's statements were “literally true” should not exculpate them from Rule 9011 sanctions. First, it should be noted that several of these claims were not, in fact, accurate. There was no literal truth to the statement in the request for relief from stay that the Taylors had no equity in their home. Doyle admitted that she made that statement simply as “part of the form pleading,” and “acknowledged having no knowledge of the value of the property and having made no inquiry on this subject.” Similarly, the statement in the claim objection response that the figures in the original proof of claim were correct was false.
Just as importantly, appellees cite no authority, and we are aware of none, which permits statements under Rule 9011 that are literally true but actually misleading. If the reasonably foreseeable effect of Doyle's or Fitzgibbon's representations to the bankruptcy court was to mislead the court, they cannot be said to have complied with Rule 9011. . . .
. . . [T]he [bankruptcy] court was told only that the Taylors had “failed to make regular mortgage payments” from November 1, 2007 to January 15, 2008 . . . A court could only reasonably interpret this to mean that the Taylors simply had not made payments for the period specified. As the bankruptcy court found, “[f]or at best a $540 dispute, the Udren Firm mechanically prosecuted a motion averring a $4,367[ ] post-petition obligation, the aim of which was to allow HSBC to foreclose on [the Taylors'] house.” Therefore, Doyle's and Fitzgibbon's statements in question were either false or misleading. . . .
We must, therefore, determine the reasonableness of the appellees' inquiry before they made their false representations. . . .
Central to this case . . . is the degree to which an attorney may reasonably rely on representations from her client. An attorney certainly “is not always foreclosed from relying on information from other persons.” In making statements to the court, lawyers constantly and appropriately rely on information provided by their clients, especially when the facts are contained in a client's computerized records. It is difficult to imagine how attorneys might function were they required to conduct an independent investigation of every factual representation made by a client before it could be included in a court filing. While Rule 9011 “does not recognize a ‘pure heart and empty head’ defense,” a lawyer need not routinely assume the duplicity or gross incompetence of her client in order to meet the requirements of Rule 9011. It is therefore usually reasonable for a lawyer to rely on information provided by a client, especially where that information is superficially plausible and the client provides its own records which appear to confirm the information.
However, Doyle's behavior was unreasonable, both as a matter of her general practice and in ways specific to this case. First, reasonable reliance on a client's representations assumes a reasonable attempt at eliciting them by the attorney. That is, an attorney must, in her independent professional judgment, make a reasonable effort to determine what facts are likely to be relevant to a particular court filing and to seek those facts from the client. She cannot simply settle for the information her client determines in advance—by means of an automated system, no less—that she should be provided with.
Yet that is precisely what happened here. “[I]t appears,” the bankruptcy court observed, “that Doyle, the manager of the Udren Firm bankruptcy department, had no relationship with the client, HSBC.” By working solely with NewTrak, a system which no one at the Udren Firm seems to have understood, much less had any influence over, Doyle permitted HSBC to define—perilously narrowly—the information she had about the Taylors' matter. . . .
. . . .
With respect to the Taylors' case in particular, Doyle ignored clear warning signs as to the accuracy of the data that she did receive. In responding to the motion for relief from stay, the Taylors submitted documentation indicating that they had already made at least partial payments for some of the months in question. . . . .
. . . In her relationship with HSBC, Doyle essentially abdicated her professional judgment to a black box.
. . . This was not a matter of extreme complexity, nor of extraordinary deadline pressure. Although the initial data the Udren Firm received was not, in itself, wildly implausible, it was facially inadequate. In short, then, we find that Doyle's inquiry before making her representations to the bankruptcy court was unreasonable.
In making this finding, we, of course, do not mean to suggest that the use of computerized databases is inherently inappropriate. However, the NewTrak system, as it was being used at the time of this case, permits parties at every level of the filing process to disclaim responsibility for inaccuracies. . . . It cannot be that all the parties involved can insulate themselves from responsibility by the use of such a system. In the end, we must hold responsible the attorneys who have certified to the court that the representations they are making are “well-grounded in law and fact.”
We also find that it was appropriate to extend sanctions to the Udren Firm itself. Rule 11 explicitly allows the imposition of sanctions against law firms. In this instance, the bankruptcy court found that the misrepresentations in the case arose not simply from the irresponsibility of individual attorneys, but from the system put in place at the Udren Firm, which emphasized high-volume, high-speed processing of foreclosures to such an extent that it led to violations of Rule 9011.
However, we do not find that responsibility for these failures extends specifically to [Mr.] Udren, whose involvement in this matter was limited to his role as sole shareholder of the firm.
--Patricia Hatamyar Moore
Friday, August 26, 2011
On September 16, 2011, Seattle University School of Law will host the 25th Anniversary Summary Judgment Trilogy Colloquium. Festivities will kick off the preceding afternoon with a lecture by U.S. District Court Judge Lee H. Rosenthal (chair of the Judicial Conference Committee on the Rules of Practice and Procedure, and former Chair of the Civil Rules Committee) entitled "The Summary Judgment Rule Changes that Aren’t?"
(Hat Tip: Brooke Coleman)
Thursday, August 25, 2011
Wednesday, August 24, 2011
Tuesday, August 23, 2011
Vanderbilt Law School and the Cecil D. Branstetter Litigation & Dispute Resolution Program announce the 2012 New Voices in Civil Justice Scholarship Workshop to be held at Vanderbilt on April 20, 2012, and invite submissions for the workshop.
The Branstetter Litigation & Dispute Resolution Program draws on a multimillion-dollar endowment to support research and curriculum in civil litigation and dispute resolution. The idea for the Branstetter “New Voices” workshop is to draw together scholars on civil justice issues who are in the first seven years of their academic careers. Four to six scholars will be chosen by anonymous review of the submitted papers. The audience will include invited junior scholars, Vanderbilt faculty, and invited guests. Previous participants include Nora Freeman Engstrom (Stanford), Maria Glover (Harvard), Margaret Lemos (Cardozo), Jonathan Mitchell (George Mason), Myriam Gilles (Cardozo), Donna Shestowsky (UC Davis), Benjamin Spencer (Washington & Lee), Amanda Tyler (George Washington), and Tobias Wolff (Pennsylvania).
The format for the workshop is designed to maximize collegial interaction and feedback. All participants will have read the selected papers. A senior faculty member will provide a brief overview and commentary on the paper, and then we are off and running with interactive discussion. Paper authors thus do not deliver prepared “presentations” as such. Rather, the overwhelming majority of each session is devoted to collective discussion of the paper involved.
- Subject matter. Submitted papers should address an aspect of civil justice. Subject areas may include, but are not limited to, civil procedure, complex litigation, evidence, federal courts, judicial decisionmaking, alternative dispute resolution, remedies, and conflict of laws. In keeping with the intellectual breadth of the Branstetter Program faculty, we are very receptive to the full range of scholarly methodologies, from traditional doctrinal analysis to quantitative or experimental approaches.
- Author qualifications. To be eligible to submit a paper, scholars must currently hold a permanent faculty position. In addition, scholars may not have held a position at assistant professor or higher (including visiting assistant professor) prior to 2004.
- Format. Papers may be sent in either Microsoft Word or Adobe Acrobat format. To maintain the anonymity of the process, please remove any self-identifying information from the submission.
- Deadline. Submissions should be e-mailed to Branstetter.Program@vanderbilt.edu no later than January 13, 2011. Please include your name, current position, and contact information in the e-mail accompanying the submission. We will contact you with our decision by February 15.
The Branstetter Program will pay all reasonable travel expenses within the United States for invited participants. If you have any questions, please email Professor Tracey George, Branstetter Program Director, at Branstetter.Program@vanderbilt.edu.
Professors Christopher Whytock (UC-Irvine) and Cassandra Burke Robertson (Case Western) have posted on SSRN a draft of their article, Forum Non Conveniens and the Enforcement of Foreign Judgments, which is forthcoming in the Columbia Law Review. Here is the abstract:
When citizens of Ecuador sued Texaco, Inc. in a U.S. court seeking damages for oil contamination in the Amazon, Texaco successfully moved to dismiss the suit in favor of Ecuador based on the forum non conveniens doctrine, arguing – as that doctrine requires – that Ecuador was an adequate alternative forum and more appropriate than the United States for hearing the suit. The plaintiffs then refiled the suit in Ecuador, and a court there entered a multi-billion dollar judgment against Chevron Corporation, which had merged with Texaco. Chevron now argues that the Ecuadorian legal system suffers from deficiencies that should render the judgment unenforceable.
Recently, other defendants have also been experiencing this type of “forum shopper’s remorse.” Having obtained what they wished for – a forum non-conveniens dismissal in favor of a foreign judiciary with a supposedly more pro-defendant legal environment than the United States – they are encountering unexpectedly pro-plaintiff outcomes, including substantial judgments against them. And, like Chevron, they are then arguing that the foreign judiciary suffers from inadequacies that should preclude enforcement of a judgment obtained there by the plaintiff – an argument seemingly at odds with the earlier forum non conveniens argument that the same foreign judiciary was adequate and more appropriate.
This Article shows that under current doctrine, these seemingly inconsistent arguments are not necessarily inconsistent at all. The forum non conveniens doctrine’s foreign judicial adequacy standard is lenient, plaintiff-focused and ex ante, whereas the judgment enforcement doctrine’s standard is relatively strict, defendant-focused, and ex post. Therefore, the same foreign judiciary may be adequate for a forum non conveniens dismissal, but inadequate for purposes of enforcing an ensuing foreign judgment. The result can be a transnational access-to-justice gap: A plaintiff may be denied both court access in the United States and a remedy based on a foreign court judgment. This Article argues that this gap should be closed, and it proposes doctrinal changes to accomplish this.
Monday, August 22, 2011
(1) AALS. This is a copy of an e-mail sent by Thom Main on August 6 regarding the Call for Papers from the AALS Section on Civil Procedure:
The Executive Committee of the AALS Section on Civil Procedure invites the submission of papers for presentation at the Annual Meeting of the AALS January 4-8, 2012, in Washington, D.C.
The topic of our panel will be "Procedural Reform: Rulemaking v. Legislation." Procedural reform has enjoyed (or suffered from, depending on one’s point of view) considerable attention in recent years. Procedural topics are in the mainstream media. Supreme Court cases have reformed bedrock principles. Rulemakers regularly debate amendments to an ever-expanding corpus of rules. And the legislative branch seeks to undo some reforms while initiating still others.
Papers presented by the panel will put this constellation of procedural reforms into a broader perspective. The debate about whether procedural reform is more properly the province of rulemakers or lawmakers is neither new nor, perhaps, even resolvable. Yet it remains relevant-urgent, even, given the stakes. We invite the submission of papers that address this topic in whole or in part. Papers that address the topic in whole might, for example, consider the use of empirical evidence as an engine for procedural reform. Or institutional choice theory might be applied to the procedural landscape. Even if your work addresses the topic only in part, we encourage you to submit it; we will be selecting papers so that the panel, considered as a whole, will generate a dialogue to explore the broader issues.
Drafts of the papers submitted for consideration must be received by September 1, 2011. Submissions should be sent to email@example.com. Papers already accepted for publication will be considered.
(2) Southeastern Association of Law Schools (SEALS) call for panel proposals: deadline November 1, 2011
The announcement is here.
--Patricia Hatamyar Moore
I have posted my article The Shadow Rules of Joinder to SSRN.
The Federal Rules of Civil Procedure provide litigants with procedural devices for joining claims and parties. Several of these rules demand that the claims or parties share a baseline of commonality, either in the form of the same “transaction or occurrence” or a “common question of law or fact.” Both phrases have proved notoriously tricky in application. Commentators from the academy and the judiciary have attributed these difficulties to the context-specific and discretionary nature of the rules.
This Article challenges that wisdom by suggesting that the doctrinal confusion can be attributed to deeper theoretical divisions in the judiciary, particularly with regard to the role of the ontological categories of “fact” and “law.” These theoretical divisions have led lower court judges to craft shadow rules of joinder. “Redescription” is the rule by which judges utilize a perceived law/fact distinction to characterize a set of facts as falling inside or outside a definition of commonality. “Implied predominance” is the rule in which judges have taken the Rule 23(b)(3) class action standard that common questions predominate over individual issues and applied it to other rules of joinder that do not have this express requirement.
After demonstrating the instability of the shadow rules, this Article suggests that the rules drafters move away from a commonalities approach to joinder and toward a system in which each joinder directive contains criteria that stress the unique purpose of each joinder device and that account for the different managerial challenges that judges face in granting or denying joinder under each device. Such rules would not remove the delicate context-specific determinations from judges, but would result in greater transparency and consistency of joinder decisions.
Friday, August 19, 2011
Seth W. Greenfest (University of Washington, Department of Political Science) has posted The Dynamics of Standing: How Congress and the Supreme Court Determine Access to the Federal Courts to SSRN.
Rules of access, including whether litigants will have standing to sue, are determined by judges during the legal process and by legislators during the legislative process. Open access encourages litigation while closed access discourages litigation. Standing has changed over time in response to decisions made by lawmakers and judges. Conceptions of judicial power should account for legislatively-created opportunities for courts to participate in the policy-making process. To demonstrate the Dynamics of Standing, this paper traces the development of standing between 1921 and 2006 and examines decisions made by the Supreme Court and Congress regarding access to the courts.
Four months ago, AT&T won a closely-watched Supreme Court case involving mandatory arbitration provisions that forbid classwide arbitration proceedings. The Court in AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011), held that the Federal Arbitration Act compelled enforcement of a contract that required “arbitration of all disputes between the parties, but required that claims be brought in the parties’ ‘individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.’” Id. at 1744.
In light of Concepcion, AT&T customers wishing to challenge AT&T’s pending merger with T-Mobile on antitrust grounds have done so via individual demands for arbitration. AT&T has now filed multiple lawsuits in federal court seeking to enjoin those arbitrations. AT&T’s argument seems to be that these arbitrations are really classwide arbitrations (and hence forbidden under the arbitration agreement) even though each arbitration demand is initiated separately by an individual customer.
AT&T’s complaint in one of its recent lawsuits [AT&T Mobility LLC v. Gonnello, 11-CV-5636 (S.D.N.Y.)] puts it this way: “Although styled as a request for arbitration on an individual basis, each Demand is actually a representative action.” [¶ 33]. In particular, each customer seeks “an injunction flatly prohibiting the merger or, alternatively, imposing global restrictions on the merger.” [¶ 34]. Thus, “the relief sought by each [customer] bears all of the characteristics of a representative action: it would affect a broad class . . . and even if just one of the [customers] prevails, the interest of the entire class would be affected.” [¶ 36].
For recent coverage see:
- ABA Journal (After Supreme Court Win Forcing Customers to Arbitrate, AT&T Now Sues to Stop the Arbitration)
- Reuters (AT&T sues customers seeking to block T-Mobile deal)
Judge Barbier in the Eastern District of Louisiana held a monthly status conference on August 12, 2011. The minute order entered thereafter hints at a plethora of civil procedure issues going on in the cases. At one point, without further explanation, the court “reminded parties of the public website for MDL 2179.”
--Patricia Hatamyar Moore
Thursday, August 18, 2011
We covered earlier last year’s Supreme Court’s decision in Reed Elsevier, Inc. v. Muchnick, which rejected the argument that a failure to comply with 17 U.S.C. § 411(a)’s registration requirement deprived a federal court of subject-matter jurisdiction over copyright infringement claims. That opened the door for the Second Circuit to consider the certification and settlement of a class action based on the unauthorized electronic reproduction of work by freelance authors.
Yesterday, the Second Circuit reversed the district court’s certification of the class and approval of the settlement. The case is In re: Literary Works in Electronic Databases Copyright Litigation, 2011 WL 3606725, and Judge Walker’s majority opinion begins:
Plaintiffs in this consolidated class action allege copyright infringements arising from defendant publishers’ unauthorized electronic reproductions of plaintiff authors’ written works. The United States District Court for the Southern District of New York (George B. Daniels, Judge) certified the class for settlement purposes and approved a settlement agreement (“Settlement”) over the objection of ten class members (“objectors”). In this appeal, objectors contend that (1) approval of the Settlement was impermissible because it released claims beyond the factual predicate of the case, (2) class certification was improper because subgroups within the class have conflicting interests, and (3) the district court committed procedural errors in certifying the class and approving the Settlement. Although we reject objectors’ arguments regarding the release, we conclude that the district court abused its discretion in certifying the class and approving the Settlement, because the named plaintiffs failed to adequately represent the interests of all class members. We do not reach the procedural challenges, which are moot in light of our class certification holding.
Judge Straub issued a partial dissent, which begins:
The majority observes that the Settlement in this case “was the product of an intense, protracted, adversarial mediation” with “highly respected and capable” mediators that provided assurance that the “‘proceedings were free of collusion and undue pressure.’” Maj. Op. at [22-23] (quoting D’Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir. 2001)). While conceding this point, however, as well as that the Settlement offered “some ‘structural assurance of fair and adequate representation,’” Maj. Op. at  (quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 627 (1997)), the majority holds that the District Court abused its discretion in certifying the class because not “enough” was done to “satisfy [Federal] Rule [of Civil Procedure] 23(a)(4),” Maj. Op. at . I disagree. I respectfully dissent because it is my view that the named plaintiffs adequately represent the interests of all class members as required by Rule 23(a)(4) and that the District Court was well within its discretion to certify the class and approve the Settlement. I do concur with the majority that the Settlement’s release provision is permissible.
(Hat Tip: Howard Bashman)
I have finally finished my revisions made after the March 2011 Federal Judicial Center study, and, with some trepidation, just posted the revised manuscript on SSRN.
Any and all comments and criticisms gratefully accepted.
--Patricia Hatamyar Moore