Civil Procedure & Federal Courts Blog

Hoffheimer on Goodyear

A lot of folks may have already seen this paper by Prof. Michael J. Hoffheimer, but if not, and if you're interested in the state of general jurisdiction post-Goodyear, check it out.  (Hat tip: Kevin Clermont.)

--Brendan Maher

Diversity as Simulation

One way to think about diversity is as federal "simulation" of state law.  In cases of straightforward diversity jurisdiction – where federal courts hear state law disputes between citizens of different states, e.g., P-Cal sues D-Tex under state law claim X for $100k – federal courts are supposed to pretend to be state courts, and thus accurately apply the substantive law of the state, as the highest court of the state would apply such law.  In that sense, federal courts sitting in diversity are supposed to be merely providing different tribunals – free of the biases against out-of-staters that allegedly afflict state courts – rather than different law.

Courts, of course, do two things: they resolve disputes and make law, i.e., precedent.  A federal court sitting in diversity, however, cannot make state law; state courts are not bound by a federal decision regarding pure state law.  A federal appellate court sitting in diversity can only make law that binds lower federal courts, as in “The Second Circuit declared in Decision X that the law of Connecticut, until the Connecticut Supremes say otherwise, is A.” District courts sitting in the Second Circuit would be bound by the Second Circuit’s view of Connecticut law.

To the extent the view of the Second Circuit differs from the view of Connecticut’s intermediate courts on what the law of Connecticut is, there is the opportunity for forum shopping.  That is, the “different tribunals” of federal diversity jurisdiction have in fact created a body of law different than the body of law declared by Connecticut’s intermediate courts.  An out-of-state plaintiff might be tempted to sue an in-state plaintiff in federal rather than state court, or vice versa, depending on which law was more favorable.

A possible way to avoid this would be if the Second Circuit (for example) were to declare as a jurisprudential rule of the circuit that its views of the law of New York, Connecticut, and Vermont are non-precedential and do not bind lower *federal* courts in the circuit, as to the content of state law.  In this sense, the federal appeals court would be saying, formally, “All we are doing in diversity cases is resolving disputes –offering different tribunals – rather than making law.”  Certainly the prestige of an appellate court opinion could de facto render, by persuasive force, the applicable law in federal court different than the law in state court.  And clearly there are downsides to converting federal diversity courts into non-hierarchical state simulators, but still: does simulation need hierarchy to be effective?  It very well may -- I've only thought about it briefly, in connection with this post, but decided it was a fun topic to ponder.  Thoughts?

--Brendan Maher

The Mystery of the Withdrawn Opinion

A favorite blog of mine -- California Appellate Report, written by USD's Shaun Martin -- notes the unusual circumstances regarding a withdrawn opinion in the Ninth Circuit.  Possible explanations -- preferably ones involving sinister and far-reaching conspiracies -- welcome.

--Brendan Maher

ABA Questionnaire for this year will not include more detailed jobs reporting

The National Law Journal reports the story here.

--PHM

Conference announcement: Legal Fees in Complex Litigation and Transactions

From the National Law Journal:  See more here.

GW Law Conference on Legal Fees in Complex Litigation and Transactions: Guidance for In-House Legal Departments on the 'Reasonable Fee' and Ethical Legal Spend Control Strategies

Thursday, October 13, 2011
8:30 am - 6 pm
The George Washington University Law School
2000 H Street NW | Washington, DC  20052

GW Law invites you to a timely discussion of complex litigation and transactional matters, focusing on legal fees and related ethical matters of special interest to in-house legal departments. Renowned faculty and practitioners will headline discussions, and audience participation will be welcome. This daylong event will feature a luncheon and keynote address, as well as a closing cocktail reception.

--PHM

Decision of Interest on Standing: Second Circuit Denies En Banc Review in Amnesty Int'l v. Clapper

We covered earlier the Second Circuit’s decision in Amnesty International v. Clapper, 638 F.3d 118 (2d Cir. 2011), which held that the plaintiffs -- various attorneys, journalists, and labor, legal, media, and human rights organizations -- had standing to challenge federal wiretapping procedures.

Yesterday the full Second Circuit refused to rehear the case, evenly dividing in a 6-6 vote. The order denying rehearing was accompanied by five separate opinions.

For additional coverage see N.Y. Times (Eric Lichtblau) and Volokh Conspiracy (Orin Kerr).

--A

Forum Non Conveniens Dismissal of BP Oil Spill Shareholder Suit

Last week Judge Ellison of the U.S. District Court for the Southern District of Texas issued an order dismissing on forum non conveniens grounds a shareholder derivative suit against BP arising out of the Deepwater Horizon explosion and oil spill. See In re BP Shareholder Derivative Litigation, 2011 WL 4345209, MDL No. 10-md-2185 (S.D. Tex. Sept. 15, 2011). From the opinion (citations omitted):

The Court concludes that England, as the focal point of this litigation, is the far more appropriate forum. Because this derivative lawsuit involves the internal governance of an English corporation, the convenience of the parties and the interests of justice favor England as a more convenient forum. This case is unique because it is a derivative lawsuit involving the internal affairs of a foreign corporation. Indeed, because Plaintiffs are just a handful of the thousands of potential shareholders that could sue the individual defendants on behalf of BP, their choice of forum is accorded less deference than the typical home forum plaintiff in a traditional two party lawsuit. Moreover, because this lawsuit calls for an inquiry into the knowledge and actions of BP's Board of Directors, the lion's share of the relevant documents and the majority of the individual defendants are located in England. Given the decreased deference accorded to Plaintiffs' choice of an American forum, the private interest factors weigh slightly in favor of dismissal.

It is the public interest factors, however, that most strongly favor England as the appropriate forum in which to proceed with this case. These factors persuade the Court that this action should be dismissed. The primary concern of this derivative litigation is the internal affairs of an English corporation, and the suit seeks to recover damages for the benefit of BP only. Accordingly, England has a greater interest in the resolution of this dispute. Moreover, English law governs this dispute and will determine whether the individual defendants breached their fiduciary duties and harmed BP in the process. Thus, English law would predominate and, if the case were to continue here, the Court would be faced with the formidable exercise of interpreting and applying a still nascent and evolving body of foreign law. The Court would be saddled with not only the ordinary task of adjudication, but also the additional administrative tasks characteristic of derivative actions articulated in Koster. Dismissing this case would relieve this Court of the substantial burdens of such undertakings. Finally, the citizens of Louisiana should not be burdened, as factfinders, with the exercise of applying complex English law to determine whether the individual defendants harmed an English company through unlawful acts and inadequate oversight. As these public interest considerations counsel strongly in favor of dismissal, Defendants' Motion is hereby GRANTED.

--A

(Hat Tip: Marc Poirier)

Decision of Interest: Ninth Circuit Applies Wal-Mart v. Dukes to Costco Class Action

Last week the Ninth Circuit issued its decision in Ellis v. Costco Wholesale Corp., No. 07-15838, ___ F.3d ___, 2011 WL 4336668 (9th Cir. Sept. 16, 2011). From the opinion by Judge N. Randy Smith:

This complicated case requires us to consider a number of issues relating to class certification. Several of these issues have recently been clarified by the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011). Given this new precedent altering existing case law, we must remand to the district court. Specifically, we take the following actions: (1) Because at least one named Plaintiff (Sasaki) alleges a concrete injury that is both directly traceable to Costco’s allegedly discriminatory practices and is redressable by both injunctive relief and monetary damages, we affirm the district court’s ruling on standing. (2) We vacate and remand the district court’s ruling as to “commonality” under Rule 23(a) of the Federal Rules of Civil Procedure. The district court failed to conduct the required “rigorous analysis” to determine whether there were common questions of law or fact among the class members’ claims. Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982). Instead it relied on the admissibility of Plaintiffs’ evidence to reach its conclusion on commonality. (3) We vacate the district court’s ruling as to “typicality” under Rule 23(a), because the district court failed to consider the effect that defenses unique to the named Plaintiffs’ claims have on that question.  (4) We affirm the district court’s ruling that Sasaki is an adequate class representative under Rule 23(a). As a current employee who continues to be denied promotion, Sasaki has incentive to vigorously pursue injunctive relief as well as monetary damages on behalf of all the class members. However, we vacate the district court’s finding that Ellis and Horstman could adequately represent the class, because they were former employees and had no incentive to pursue injunctive relief. (5) In light of Wal-Mart’s rejection of the “predominance” test, 131 S. Ct. at 2557-59, the district court must consider whether the claims for various forms of monetary relief will require individual determinations and are therefore only appropriate for a Rule 23(b)(3) class. Thus, we vacate the district court’s certification of the class under Rule 23(b)(2).

Hat Tip: Howard Bashman (How Appealing). Additional Coverage at Reuters, SCOTUSblog, Wall Street Journal.

--A

O'Connor & Ribstein on Preemption

Professors Erin O'Hara O'Connor (Vanderbilt) and Larry Ribstein (Illinois) have posted on SSRN a draft of their article Preemption and Choice-of-Law Coordination. Here’s the abstract:

The scope of federal preemption of state law has been plagued by uncertainty and confusion. The courts have applied a set of presumptions on an ad hoc and conflicting basis. Part of the problem is that the courts purport to be interpreting legislative intent while actually making unarticulated substantive policy judgments about the outcome of specific cases. This approach frustrates development of coherent preemption doctrine. Courts should consider a conceptually obvious but as yet unexplored factor in their decisions. Specifically, where Congressional intent is unclear, preemption determinations should consider whether the states have effectively allocated sovereign authority among themselves through choice-of-law rules. Where states have achieved such "horizontal coordination," Congress often has little need to usurp the states' role as laboratories for experimenting with potentially diverse substantive laws. Our novel approach preserves both the benefits of local and state sovereignty and Congress's role of coordinating US laws where necessary. It also provides a coherent policy for guiding preemption decisions where Congressional intent is unclear.

--A

(Hat Tip: Larry Solum)

Change for Women at Wal-Mart?

Today's New York Times investigates the changes the Wal-Mart has said that they are making to create a better work environment for women.  An interesting public relations response to the dialogue about women's role in large retail operations that has occured since the Supreme Court handed down Wal-Mart v. Dukes.

RJE

Is the end of class actions upon us?

That’s the title of this contribution by Professor Brian Fitzpatrick (Vanderbilt) to SCOTUSblog’s arbitration symposium. The other contributions are worth a look too.

SCOTUSblog’s symposium on arbitration comes on the heels of its class action symposium (covered earlier here).

--A

Announcement and Call for Papers: 4th Annual Junior Faculty Federal Courts Workshop

Florida International University College of Law is hosting the Fourth Annual Junior Faculty Federal Courts Workshop in Miami on February 2 - 4, 2012. From the announcement:

The workshop pairs a senior scholar with a panel of junior scholars presenting works-in-progress. Five senior scholars have confirmed participation this year: Susan Bandes (University of Miami), Lee Epstein (USC), Theodore Eisenberg (Cornell University), Martin Redish (Northwestern University), and Suzanna Sherry (Vanderbilt University). . . .

The workshop is open to non-tenured and recently tenured academics who teach and write in Federal Courts, Civil Rights Litigation, and associated topics. Those who do not currently hold a faculty appointment but expect to do so beginning in fall 2012 are welcome. The program is also open to scholars wanting to attend, read, and comment on papers but not present. There is no registration fee. . . .

Those wishing to present a paper must submit an Abstract by November 15. Papers will be selected by a committee of past participants; presenters will be notified by December 10. Those planning to attend must register by January 10, 2012. The program is also open to non-presenters who want to attend, read and comment on papers, and participate in the discussion.

More details available at PrawfsBlawg.

--A

(Hat Tip: Howard Wasserman)

TX Judge Chastised for Issuing "Cute" Orders

Some of you might have been following the orders of Judge Sam Sparks in Texas recently.  His orders, chastising parties for their behavior, have made several national blogs, including an order in which he accused the lawyers of acting like a "kindergarten party."

Now Judge Sparks is under the microscope for his own behavior in these matters.  Edith Jones, Chief Judge of the Fifth Circuit sent him an email with the following reprimand: "Frankly, this kind of rhetoric is not funny. In fact, it is so caustic, demeaning, and gratuitous that it casts more disrespect on the judiciary than on the now-besmirched reputation of the counsel."

More coverage (and the full text of the email) at The Texas Lawyer.

RJE

Nicastro

Personal jurisdiction (for defendants without the state, at least) requires minimum contacts and a judicial assessment that the assertion of personal jurisdiction be reasonable.  The absence of the latter is the thing upon which Asahi was resolved; it was unreasonable to hale Asahi into California state court.

Yet, in the recent Nicastro case, as Howard Wasserman pointed out, neither Justice Kennedy (writing for the plurality) nor Justice Breyer (writing a concurrence with Justice Alito) mentioned the reasonableness prong of the modern PJ test.  And that's a bit puzzling, because both cited hypos (if memory serves -- Florida farmers, Appalachian potters, Kenyan coffee makers) where the reasonableness part of the PJ test would have been very relevant in determining PJ.  Speculations as to why reasonableness went unmentioned by Kennedy and Breyer?

--Brendan Maher

Faculty Hiring Announcement: Charlotte

The Faculty Lounge has posted a hiring announcement from the Charlotte School of Law. One area of need is civil procedure.

--A 

Ryan, Meier, and Counseller on Appellate Review of Orders Denying Remand

Professors Rory Ryan, Luke Meier, and William Counseller (Baylor) have posted on SSRN a draft of their article, Interlocutory Review of Orders Denying Remand Motions. Here’s the abstract:

When can an appellate court review a district court’s denial of a remand motion before a final judgment? Surprisingly little has been written on this topic, especially compared to how much has been written on the review of a district court’s grant of a remand motion. But recent developments in the Fifth Circuit, including a case in which we participated as amicus, provide a fine case study for addressing these questions. Our goal here is to guide judges and lawyers in answering the opening question. Our short answer is that a remand denial is not inherently different than the typical interlocutory ruling, and therefore a party must follow the ordinary appellate methods prescribed by Congress: either await final judgment or obtain certification under 28 U.S.C. § 1292(b). Mandamus review is generally unavailable because the petitioner has an adequate remedy by appeal. Neither the time, hassle and expense of enduring trial, nor the possibility that the appeal might ultimately prove unsuccessful, render the appellate remedy inadequate.

--A

Faculty Hiring Announcement: Drexel

The Faculty Lounge has posted a hiring announcement from Drexel University Earle Mack School of Law. One area of need is Civil Procedure.

--A 

Widgets and Snowflakes

Widgets are identical; snowflakes are unique.   Quick: are lawsuits widgets or snowflakes?   I'd be interested to hear people's immediate, visceral answers; I’m betting the answers would be, in order of frequency: (1) "both," (2) "snowflakes," and (3) "widgets."

One's immediate answer no doubt depends on what aspects of lawsuits quickly came to mind.  Lawsuits, clearly, have both widget-like and snowflake-like qualities.  Procedure can perhaps be thought of as an ongoing attempt to widgetize the parts of disputes that can sensibly be widgetized.  Of course, what can be sensibly widgetized, and how, is no easy question.  (An alternate title for this post might have been "Willy Wonka on Procedure.")

The metaphor is far from perfect and a bit silly, but I raise it because the first few classes of civil procedure with 1Ls always remind me that many if not most incoming students think of lawsuits and judging as almost purely snowflake enterprises.  Some students have literally no conception of what civil procedure is; they have a sense that civil judges are essentially justice-givers empowered to resolve disputes through whatever processes are just.  My pet theory for why this is -- a theory I've caringly nurtured by doing absolutely nothing to seek evidence confirming or refuting it -- is that people do not think naturally think of process, and in fact resist doing so, for a whole host of reasons.  This disinclination remains even though most people are quite aware that throughout their lives much of what they have done has been mediated by some sort of externally-imposed process.  And so -- comes now the point -- one of the pleasures of teaching civil procedure is seeing students slowly learn the importance of process.  While still appreciating snowflakes.

--Brendan Maher

Healthcare Mandate Litigation: 4th Cir Holds That It Lacks Jx to Hear Challenges

The Fourth Circuit has held that it will not hear a challenge to the constitutionality of the individual mandate because it lacks jurisdiction under the Anti-Injunction Act.   In a companion case, the court held that the state of Virginia lacks standing to sue to challenge the mandate. opinion is here courtesy of the BNA.  More summaries of coverage to follow.

RJE

Decision of Interest: Circuit Split on Diversity Jurisdiction and National Banks

Yesterday a panel of the U.S. Court of Appeals for the Eighth Circuit issued a 2-1 decision that appears to create (or at least deepen) a circuit split over the citizenship of national banks for purposes of diversity jurisdiction. The case is Wells Fargo Bank, N.A. v. WMR e-PIN LLC, No. 09-3800, 2011 WL 3862589 (Sept. 2, 2011).

Here’s some background: Under 28 U.S.C. § 1348, “[a]ll national banking associations shall . . . be deemed citizens of the States in which they are respectively located.” In Wachovia Bank v. Schmidt, 546 U.S. 303 (2006), the Supreme Court rejected the notion that such a national bank is “located” in every state where it has a branch office, holding instead that a “a national bank, for § 1348 purposes, is a citizen of the State in which its main office, as set forth in its articles of association, is located.” Id. at 307.

The Wachovia decision acknowledged but did not directly confront the question of whether, for purposes of diversity jurisdiction, a national bank is also a citizen of the state where it has its principal place of business (PPB). See id.at 317 n.9. That question could be significant if the bank’s PPB is in a different state than the “main office” listed in its article of association. That’s precisely the issue in Wells Fargo. The party opposite Wells Fargo was a California citizen, and it argued that diversity jurisdiction was lacking because Wells Fargo’s PPB is in California, even though the “main office” set forth in its articles of association is in South Dakota.

The majority opinion in Wells Fargo, authored by Judge Wollman, concludes that a national bank is not a citizen of the state where it’s PPB is located for purposes of diversity jurisdiction. Judge Wollman acknowledges that this holding is contrary to decisions from other circuits such as Horton v. Bank One, 387 F.3d 426 (5th Cir. 2004), and Firstar Bank v. Faul, 253 F.3d 982 (7th Cir.2001), although he asserts that the Seventh Circuit changed course on this issue in Hicklin Engineering v Bartell, 439 F.3d 346 (7th Cir. 2006).

Judge Murphy dissents, arguing that a national bank like Wells Fargo can be a citizen of two states: the state of its PPB and the state where its main office, as listed in its articles of association, is located.

--A

(Hat Tip: How Appealing)