Civil Procedure & Federal Courts Blog

Issacharoff & Miller on Rule 12(b)(6)

Professors Samuel Issacharoff & Geoffrey Miller (NYU) have posted on SSRN a draft of their article, An Information-Forcing Approach to the Motion to Dismiss. Here’s the abstract:

This article proposes a new approach to the 12(b)(6) motion to dismiss. The idea works as follows. Defendant moves to dismiss exactly as under current practice. Plaintiff either responds to the motion, thus submitting the matter for decision, or files an affidavit proposing a plan of targeted discovery. After receiving defendant’s response, the court approves, rejects, or revises the proposed discovery plan. If the judge allows discovery, defendant either withdraws the motion or produces the information. If defendant withdraws the motion, the litigation proceeds in the usual way. If defendant continues the motion the parties engage in targeted discovery. The court then reviews the motion taking account of information which either party brings to the court’s attention, including information produced in discovery. If the court grants the motion, the case is dismissed and plaintiff pays defendant’s reasonable fees and costs associated with the motion and associated discovery. If the court denies the motion, the case continues and defendant pays plaintiff’s reasonable fees and costs. Our proposal would incentivize both parties to reveal information pertinent to the court’s decision. It promises to improve the operation of the motion to dismiss regardless of the substantive standard used to evaluate the sufficiency of the claims for relief.

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SCOTUS Per Curiam Opinion in Arbitration Case: Nitro-Lift v. Howard

Yesterday the Supreme Court issued a five-page per curiam opinion in Nitro-Lift Technologies L.L.C. v. Howard, granting certiorari and reversing the Oklahoma Supreme Court based on the Federal Arbitration Act. It begins:

State courts rather than federal courts are most frequently called upon to apply the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq., including the Act’s national policy favoring arbitration. It is a matter of great importance, therefore, that state supreme courts adhere to a correct interpretation of the legislation. Here, the Oklahoma Supreme Court failed to do so. By declaring the noncompetition agreements in two employment contracts null and void, rather than leaving that determination to the arbitrator in the first instance, the state court ignored a basic tenet of the Act’s substantive arbitration law. The decision must be vacated.

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WSJ on the Launch of Modria, an Online Small Claims Court

“Modria Launches to Become the Online ‘Small Claims Court for the 21st Century,’” from the WSJ’s Venture Capital Dispatch Blog.

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(Hat Tip: Suja Thomas)

Pfander on Why Judges Leave (Reviewing Burbank, Plager & Ablavsky)

Now available on the Courts Law section of JOTWELL is an essay by Prof. Jim Pfander (Northwestern) entitled Why Judges Leave the Bench. It reviews Stephen Burbank, S. Jay Plager, and Greg Ablavsky's recent article, Leaving the Bench. Jim's essay begins:

Law review articles have both texts and subtexts, messages that come through loud and clear and more subtle hints and suggestions that lurk in the article’s structure or methodology or footnotes.  A recent paper by Stephen Burbank, S. Jay Plager, and Greg Ablavsky nicely illustrates the idea.  In Leaving the Bench, the three co-authors offer a careful assessment of the many factors that shape the decisions of federal judges to step down from their jobs as active members of the Article III judiciary.  In the text of the piece, the authors explore the consequences of various forms of judicial departure and make a persuasive case that the institutional judiciary depends heavily on the contributions of senior status judges.  In the subtext, the authors provide a subtle reminder that judicial behavior, like all human behavior, resists simplistic modeling and one-dimensional explanation.

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Meier on the Summary Judgment Standard

Professor Luke Meier of Baylor University has posted on SSRN his new article, "Probability, Confidence, and the 'Reasonable Jury' Standard."

Abstract:

The modern summary judgment standard requires that a judge consider how a "reasonable jury" would resolve a particular dispute. By creating the impression that a judge's analysis at summary judgment replicates that of a jury at trial, the "reasonable jury" standard masks a component of the judge's summary judgment analysis. To appreciate this concept, it is necessary to distinguish between the concepts of probability and confidence. Whereas a jury primarily -- if not exclusively -- engages in a probability analysis, a judge performs both a probability and confidence analysis. This article discusses the dual nature of a judge's summary judgment inquiry through a reconsideration of Professor Tribe's "blue bus" hypothetical. In addition, this article demonstrates how the "reasonable jury" standard makes it difficult to identify the confidence concept as a component of federal procedure.

PM

Number of Consumer Credit Lawsuits in Federal Courts Declining

The Transactional Records Access Clearinghouse (TRAC), Syracuse University, reports that the "latest available data from the federal courts" (September 2012) show that consumer credit civil filings are down 8.8 percent from last month and are down 5.6 percent from the level seen in FY 2011.

PM   

This Week's SCOTUS Oral Arguments: Mootness, Class Actions, And FRCP 54(d) (Oh My!)

The Supreme Court heard oral argument in several interesting cases this week. Below are some links…

Already LLC v. Nike Inc., No. 11-982 (Article III & mootness)

• Oral argument transcript
• PatentlyO (Megan La Belle)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Lyle Denniston)

Amgen Inc. v. Connecticut Retirement Plans, No. 11-1085 (class actions)

• Oral argument transcript
• Jurist (Julia Zebley)
• N.Y. Times (Adam Liptak)
• Point of Law (Ted Frank)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Steven Kaufhold)

Comcast v. Behrend, No. 11-864 (class actions)

• Oral argument transcript
• Jurist (Julia Zebley)
• N.Y. Times (Adam Liptak)
• Reuters (Jonathan Stempel)
• SCOTUSblog (Sergio Campos)
• Wall Street Journal (Brent Kendall)
  

Marx v. General Revenue Corp., No. 11-1175 (Rule 54(d))

• Oral argument transcript
• Consumer Financial Services Blog (Don Maurice)

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AO Statistics Show Bankruptcy Filings Down in FY 2012

The Third Branch News reports, "Bankruptcy cases filed in federal courts for fiscal year 2012, the 12-month period ending September 30, 2012, totaled 1,261,140, down 14 percent from the 1,467,221 bankruptcy cases filed in FY 2011, according to statistics released today by the Administrative Office of the U.S. Courts."  In addition, "[f]or the 12-month period ending September 30, 2012, business bankruptcy filings—those where the debtor is a corporation or partnership, or the debt is predominantly related to the operation of a business—totaled 42,008, down 16 percent from the 49,895 business filings reported in the 12-month period ending September 30, 2011."  Filings decreased for every bankruptcy chapter (7, 11, 12, and 13). 

The link above contains further links to detailed statistics.

PM

Nerve Center Test in Drug/Device Cases

The folks over at Drug and Device Law Blog have a post on some recent cases applying the Hertz v. Friend nerve center test to pharmaceutical litigation.

From the post: 

That was the one of the central questions in Moore v. Johnson & Johnson, No. 12-490, slip op. (E.D. Pa. Nov. 1, 2012). It’s a Tylenol case and the Tylenol in question was produced by a subsidiary of Johnson & Johnson, McNeil-PPC, Inc. (also a defendant) at a Pennsylvania facility.  Plaintiff also sued two J&J executives and Costco (where plaintiff bought the Tylenol). Plaintiff is from Washington state but brought her suit in Pennsylvania.  Defendants removed and plaintiffs filed a motion to remand arguing in part that McNeil-PPC is a citizen of Pennsylvania and therefore barred from removing a Pennsylvania state court action.  Slip op. at 2.  Plaintiff contended that McNeil’s “nerve center” was in Pennsylvania because three out of four of its highest-ranking officers are based in Pennsylvania.  Id. at 5.   

            Defendant, on the other hand, claimed McNeil’s principal place of business was in New Jersey.  The basis for this position is that McNeil’s Pennsylvania-based officers’ “actual management responsibilities are limited to that division.”  Id. at 6.  Meanwhile, defendants argued that

The bulk of the management functions for McNeil-PPC and other J&J subsidiaries . . . are carried out by executives associated with J&J’s Family of Consumer Companies (“FCC”). . . overseen by a Group Operating Committee (“GOC”) that exercises high-level direction for the corporate entities within its sector. 

Id.  And that the GOC and FCC are made of people who work in Skillman, New Jersey.  Id. at 6-7.   However, with the exception of one, “none of the senior executives running operations for the FCC are officers of McNeil-PPC, nor are they employees of that particular corporation.  They are employed by other J&J entities.” Id. at 7.  So, to agree with defendants – which the court did -- it had to “consider activities of executives outside a party’s corporate structure.”  Id. at 17.  That sounds a lot like piercing the corporate veil – something corporate defendants usually vehemently oppose.  So, while defendants got the result they wanted in this case – remand denied -- we actually aren’t sure how to feel about this decision.

RJE

Veljanovski on Third Party Litigation Funding in Europe

Cento Veljanovski of Case Associates, Institute of Economic Affairs, and Centre for Regulation and Market Analysis, has published in the Journal of Law, Economics and Policy, Vol 8, 2012, an article entitled “Third Party Litigation Funding in Europe.”  The article is posted on SSRN.

Abstract:

Based on interviews of all UK based third party litigation funders the paper provides new empirical evidence on the nature, extent and type of third party funding of litigation. It also examines the emergence of new group or class action third party funders in Europe focused primarily on follow-on cartel damage claims. The discussion is then expanded to the broader issues such as the justification for third party funding, its impact and a critical assessment of the arguments against such funding.

PM

Campos on the SCOTUS argument in Comcast v. Behrend

Sergio Campos has a great post up on SCOTUSblog about the argument in Comcast v. Behrend concerning determinations of class certification.

RJE