Civil Procedure & Federal Courts Blog

Objectors to DeBeers Diamond Antitrust Settlement Petition for Certiorari

We reported in December 2011 [http://lawprofessors.typepad.com/civpro/2011/12/third-circuit-upholds-295-million-settlement-class-in-de-beers-diamond-antitrust-suits.html] about the Third Circuit’s en banc approval of the settlement in the DeBeers Diamond antitrust litigation, Sullivan v. DB Investments.

Two objecting class members have filed a cert petition in the U.S. Supreme Court, listing the Questions Presented as:

1. May a court certify for settlement purposes a class that includes both class members who can state a claim against the defendant and class members who cannot state any claim whatsoever?

2. May a court approve a class action settlement that provides the same compensation both to class members who can state valid claims against the defendant and class members who cannot state any valid claim whatsoever?

They further state, “Petitioners are indirect purchaser class members who reside in the Commonwealth of Massachusetts (Murray) and Hawaii (Luke), jurisdictions that permit indirect purchasers to maintain a claim for antitrust violations. Each of the Petitioners filed in the district
court a timely objection to the proposed allocation that treats each class member the same, regardless of whether the class member can state a claim for damages against De Beers. The district court overruled those objections, and the Petitioners appealed to the Court of Appeals [which ultimately affirmed].”

PM

ACA Oral Arguments Begin Today

Starting today, the Supreme Court will here three days of oral arguments in the Affordable Care Act cases. There has been extensive media and blog coverage of the cases, the various issues, and the possible outcomes.  For a small sample:

Over at Prawfsblawg, Steve Vladeck has an excellent summary of the SEIU brief.  At SCOTUSBlog, Lyle Denniston is providing daily previews of the arguments and SCOTUSblog has full coverage here.

Professors Bryan Camp (Texas Tech) and Jordan Barry (University of San Diego) have posted a short and helpful article devoted to the Anti-Injunction Act issues on SSRN.

RJE

Call for Proposals: Collective Redress in the Cross-Border Context

Stacie Strong (Missouri) is organizing the following conference in The Hague: 

Large-scale international legal injuries are becoming increasingly prevalent in today’s globalized economy, whether they arise in the context of consumer, commercial, contract, tort or securities law, and countries are struggling to find appropriate means of providing collective redress, particularly in the cross-border context.  The Hague Institute for the Internationalisation of Law (HiiL), along with the Netherlands Institute for Advanced Study in the Humanities and Social Sciences (NIAS), will be responding to this new and developing challenge by convening a two-day event on the theme “Collective Redress in the Cross-Border Context:  Arbitration, Litigation, Settlement and Beyond.”  The event includes two different elements – a workshop on June 21-22, 2012, comprised of invited speakers from all over the world as well as a works-in-progress conference on June 20-21, 2012, designed to allow practitioners and scholars who are interested in the area of collective redress to discuss their work and ideas in the company of other experts in the field.  Both events are organized by the Henry G. Schermers Fellow for 2012, Professor S.I. Strong of the University of Missouri School of Law.

 

Persons interested in being considered as presenters for the works-in-progress conference should submit an abstract of no more than 500 words to Professor S.I. Strong at [email protected] on or before May 1, 2012.  Decisions regarding accepted proposals will be made in early May, and those whose proposals are accepted for the works-in-progress conference will need to submit a draft paper by June 4, 2012, for discussion at the conference.  All works-in-progress submissions should explore one or more of the various means of resolving collective injuries, including class and collective arbitration, mass arbitration and mass claims processes, class and collective litigation, and large-scale settlement and mediation, preferably in a cross-border context.  Junior scholars in particular are encouraged to submit proposals for consideration. 

 

Persons presenting at the works-in-progress conference will have to bear their own costs, since there is no funding available to assist with travel and other expenses.  The works-in-progress conference will be held on June 20 and 21, 2012, at NIAS, Meijboomlaan 1, 2242 PR Wassenaar, The Netherlands.  Wassenaar is approximately 20 minutes from The Hague by car.  The workshop of invited speakers will be held on June 21 and 22, 2012, also at NIAS.

 

Both the Schermers workshop and the works-in-progress conference are open to the public, although advance registration is required.  More information on both events is available at the HiiL website (www.hiil.org) or from Professor Strong at [email protected].

 

Contact:  Prof. S.I. Strong at [email protected]

Deadline for proposals:  May 1, 2012

 

For more on the Henry G. Schermers Fellowship at HiiL/NIAS, see:  http://www.hiil.org/organ-bios/prof-s-i-strong

 RJE

Author of FJC’s Study of 12(b)(6) Motions Posts Response to Academic Criticism

Joe S. Cecil, the primary author of the Federal Judicial Center’s empirical study of the impact of Iqbal, just posted (on SSRN) a response to concerns expressed about that study (including criticisms by Professors Lonny Hoffman, Ray Brescia, Jonah Gelbach, and me).  I have not had the opportunity to read it closely, having just received it, but it appears to be a thoughtful and gracious response.  The abstract reads:

This paper responds to comments regarding the Federal Judicial Center’s recent studies of the resolution of motions to dismiss for failure to state a claim. Those studies, undertaken at the request of the Judicial Conference Advisory Committee on Civil Rules, found a statistically significant increase in the rate at which defendants file motions to dismiss following the Supreme Court decisions in Bell Atlantic v. Twombly and Ashcroft v. Iqbal. The studies also found no statistically significant increase in the rate of grants of motions to dismiss without leave to amend, except in cases involving challenges to financial instruments such as mortgages, and no statistically significant increase in cases terminated by such motions. Several scholars have expressed reservations regarding these findings and raised a number of specific issues regarding the research. This paper responds to the following issues:
• Professor Hoffman’s concerns about our use of statistical analysis in general, and the use of multinomial statistical models in particular;
• Professor Moore’s concerns about the exclusion from our study of pro se cases and cases asserting affirmative defenses, and the findings of her most recent study of the outcome of motions to dismiss;
• Professor Brescia’s recent study finding an increase in grant rate of motions to dismiss in employment and housing discrimination cases; and
• Professor Gelbach’s incorporation of our findings into an economic model of pretrial litigation that attempts to estimate the overall effect on settlement and access to discovery.
I continue to believe that our findings represent the most accurate statement of the federal district courts’ response to these Supreme Court decisions, but acknowledge that this response has continued to evolve since we conducted our study. I propose a study of all dispositive motions that will, among other things, examine the interaction between motions to dismiss for failure to state a claim and motions for summary judgment.

Mr. Cecil and I had numerous communications back and forth in which we clarified our respective positions.  Some of his points on my study are well-taken, although I do not agree with them all.  For me, the bottom line is that the FJC has taken the concerns about its study very seriously, and I am glad to have participated in this debate. 

As noted in the abstract, Mr. Cecil anticipates that the FJC will soon launch another empirical study dealing with dispositive motion practice generally.  A very rough timeline envisions a report by 2013.        

PM    

House Republicans Link Bipartisan “IPAB Repeal” Bill with Partisan “Tort Reform” Bill

You can never be too rich or too thin, and apparently you can never get enough “tort reform,” either.
And if you keep repeating over and over that damages caps lower malpractice premiums, maybe it will someday be true despite all empirical evidence to the contrary.

A bill to repeal a portion of “Obamacare” dealing with the Independent Payment Advisory Board (H.R. 452) had bipartisan support until House Republicans linked it with the Orwellian “Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011” (H.R. 5). The resulting bill, (http://docs.house.gov/billsthisweek/20120319/CPRT-112-HPRT-RU00-HR5Floor.xml) now called the “Protecting Access to Healthcare Act,” provides in its findings:

(1) EFFECT ON HEALTH CARE ACCESS AND COSTS.—Congress finds
that our current civil justice system is adversely affecting patient access to
health care services, better patient care, and cost-efficient health care, in
that the health care liability system is a costly and ineffective mechanism for
resolving claims of health care liability and compensating injured patients,
and is a deterrent to the sharing of information among health care
professionals which impedes efforts to improve patient safety and quality of
care.

(2) EFFECT ON INTERSTATE COMMERCE.—Congress finds that the
health care and insurance industries are industries affecting interstate
commerce and the health care liability litigation systems existing throughout
the United States are activities that affect interstate commerce by
contributing to the high costs of health care and premiums for health care
liability insurance purchased by health care system providers.

Same old rhetoric, same old provisions -- $250,000 cap on noneconomic damages, 3-year-statute of limitations, elimination of joint and several liability, court review and serious reduction of plaintiff’s attorneys’ contingent fees, and limitations on punitive damages (including the prohibition of pleading such damages initially).

Politico (http://www.politico.com/news/stories/0312/73957.html) reports that the IPAB bill was expected to go to the floor of the House for a vote later this month, but now “[i]It’s unclear exactly how Republicans plan to move the two bills, but both should clear the House relatively easily.”

PM

Motion to Dismiss Age Discrimination Suit against Georgetown Law School in Faculty Hiring Denied

The March 13, 2012 opinion by Judge Huvelle of the District of District of Columbia in Spaeth v. Georgetown University is available here.

As an aside, the court seems to be backing off Twiqbal:

The notice pleading rules are “not meant to impose a great burden on a plaintiff,” Dura Pharmaceuticals, Incorporated v. Broudo, 544 U.S. 336, 347 (2005) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513–515 (2002)), and “detailed factual allegations” are not necessary to withstand a Rule 12(b)(6) motion. Twombly, 550 U.S. at 555 (citing Conley, 355 U.S. at 47).

 PM

Hall on Standing of Intervenor-Defendants in Public Law Litigation

Matthew Hall (University of Georgia) has posted Standing of Intervenor-Defendants in Public Law Litigation to SSRN.

Unless the plaintiff has a personal stake in the outcome, Article III of the United States Constitution requires federal courts to dismiss a plaintiff’s claim for lack of standing. That much is clearly established by decades of precedent. Less understood, however, is the degree to which Article III also requires defendants to possess a personal stake. The significance of defendant standing often goes unnoticed in case law and scholarship, because the standing of the defendant in most lawsuits is readily apparent:any defendant against whom the plaintiff seeks a remedy has a personal interest in defending against the plaintiff’s claim.

But the issue of standing to defend takes on outsized importance when third parties who are not targeted by the plaintiff’s requested remedy seek leave to intervene in order to oppose the plaintiff’s claim for relief. In cases featuring intervenor-defendants — often cases that concern important issues of public law — the personal-stake requirement becomes a real and not merely theoretical concern for the defendant. The problem is well illustrated by pending cases that address the constitutionality of California’s Proposition 8 and the federal Defense of Marriage Act. In each case, the executive branch officials named as defendants declined to defend the challenged law, prompting a nonparty with a questionable personal stake to seek to intervene to defend against a plaintiff’s claim. The prevailing plaintiff-centered model of standing does not lend itself readily to assessing whether such volunteer defendants have an interest sufficient to create a case or controversy.

This Article develops a model of defendant standing based on the functions that standing doctrine is intended to serve, and derived from the cases in which the U.S. Supreme Court has considered the personal stake of defendants under Article III. Under this model, absent a traditional injury in fact, intervenor standing to defend in public law litigation is appropriate only where state or federal law confers on the intervenor the authority to represent the government’s interest. This Article then illustrates the application of that model in the Proposition 8 and DOMA cases, and concludes that the intervenors in the Proposition 8 litigation do have standing to defend, while the intervenors in the DOMA litigation do not.

RJE

Ninth Circuit Holds Parens Patriae Suit Not Removable Under CAFA

In State of Nevada v. Bank of America, No. 12-15005 (Mar. 2, 2012), the Ninth Circuit held that the district court did not have subject matter jurisdiction under either the Class Action Fairness Act or Section 1331 (under Grable & Sons):

The State of Nevada . . .filed this parens patriae lawsuit against Bank of America . . . in Clark County [Nevada] District Court. Nevada alleges that Bank of America misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of the Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. §§ 598.0903-.0999. Nevada also alleges that Bank of America violated an existing consent judgment (“Consent Judgment”) in a prior case between Nevada and several of Bank of America’s subsidiaries, entered in Clark County District Court.

Bank of America removed this action to federal district court, asserting federal subject matter jurisdiction as either a “class action” or “mass action” under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), and as arising under federal law, 28 U.S.C. § 1331. Denying Nevada’s motion to remand, the federal district court concluded that it has jurisdiction over this action as a CAFA “class action,” but not as a “mass action,” and that it also has federal question jurisdiction because resolving the state claims will require an interpretation of federal law.

We granted Nevada’s request for leave to appeal the district court’s denial of its motion to remand pursuant to 28 U.S.C. § 1453(c)(1). We conclude that because parens patriae actions are not removable under CAFA, and the action does not otherwise satisfy CAFA’s “mass action” requirements, the district court lacks jurisdiction under CAFA. We also exercise our interlocutory appellate jurisdiction under 28 U.S.C. § 1453(c) to review the district court’s determination that it has federal question jurisdiction because the complaint references the federal Home Affordable Mortgage Program and the Fair Debt Collection Practices Act. We conclude that the district court lacks federal question jurisdiction [citing Grable & Sons]. Because there is no basis for federal subject matter jurisdiction, this case must be remanded to Nevada state court.

PM

SCOTUS Order for Supplemental Briefing and Reargument in Kiobel

Today the Supreme Court ordered that Kiobel v. Royal Dutch Petroleum be reargued, and that the parties submit supplemental briefs on the following issue:

“Whether and under what circumstances the Alien Tort Statute, 28 U.S.C. § 1350, allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States.”

More coverage at SCOTUSblog.

(Hat Tip: Sarah Cleveland)

--A

BP Oil Spill Settlement

A settlement has been reached in the Gulf Oil Spill Litigation, which was set to begin trial in Louisiana federal court on Monday. Story from the New Orleans Times-Picayune here.

--A

Mulligan on Mims v. Arrow Financial Services and the Holmes Test

Lumen Mulligan (University of Kansas Law School) has posted You Can't Go Holmes Again to SSRN.

Under the standard interpretation of 28 U.S.C. § 1331, the so-called Holmes Test, pleading a federal cause of action constitutes a sufficient condition for finding federal question jurisdiction. In January 2012, the Supreme Court, in Mims v. Arrow Financial Services, LLC, re-characterized this standard test for § 1331 jurisdiction as one that considers whether “federal law creates [both] a private right of action and furnishes the substantive rules of decision.” In this first piece to address the Mims Court’s significant change to the § 1331 canon, I applaud its rights-inclusive holding. I contend that this right-inclusive view rests upon a firmer jurisprudential framework than does the Holmes test, as the latter is intertwined with an anachronistic pairing of causes of action and rights and Justice Holmes’ overall “bad man” jurisprudential position. I argue further that Mims’ rights-inclusive approach more accurately describes § 1331 doctrine as a whole, helping to illuminate that — contrary to the Holmes test — merely pleading a federal cause of action is neither necessary nor sufficient for taking statutory federal question jurisdiction. I also demonstrate that this rights-inclusive view is more solicitous of the intent of the 1875 Congress, which passed § 1331, and of the intentions of later-in-time Congresses, which pass legislation against the presumption that federal rights provide grounds for taking federal question jurisdiction, than is the Holmes test.

RJE