Civil Procedure & Federal Courts Blog

AALS 2014 Annual Meeting (January 2-5, NYC)

The 2014 Association of American Law Schools annual meeting is happening in New York City this week. Links to the full schedule are here and here. Below are some sessions that may be of interest (although a number of them overlap):

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District Court Filings Remain Near Last Year's Level

The Federal Court Management Statistics for fiscal year 2013 (ending September 30, 2013) are posted here.

District court filings were 391,652 in FY 2013, up 1% from 386,664 in 2012 but less than filings in 2011 or 2010.

The annual report for FY 2013 is not yet available. 

Hubbard on A Theory of Pleading, Litigation, and Settlement

William H. J. Hubbard (University of Chicago) has posted A Theory of Pleading, Litigation, and Settlement to SSRN.

Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal are the most important cases on pleading in fifty years. A large literature argues that these cases have raised pleading standards, empowered federal judges as the gatekeepers to federal court, and undermined the “liberal ethos” of the Federal Rules of Civil Procedure. This understanding of pleading doctrine has in turn led to predictions of dramatic effects on dismissal rates, particularly for claims, such as employment discrimination claims, where plaintiffs often lack knowledge of the defendant’s intent at the outset of the case. The accumulating empirical evidence, however, confounds these predictions. Why have the most significant pleading cases in 50 years had virtually no statistically significant effects? Why, in an era of heightened pleading, do defendants file motions to dismiss in only 6 percent of cases? Why have employment discrimination cases been largely unaffected by Twombly and Iqbal? To explain these puzzles, I develop a new theory of pleading, in which pleading practices are not driven by pleading rules and doctrine, but by litigation strategy, and in particular the use of detailed pleadings to precipitate early settlement. I argue that even in a world with no motions to dismiss, we should expect detailed, plausible pleadings to be the norm. I conclude by arguing that Twombly and Iqbal advance rather than weaken the “liberal ethos” of the Federal Rules. Viewed in this light, Twombly and Iqbal point us to a crucial margin on which they may — or may not — have had a hard-to-detect but potentially important effect: with respect to a small, but disproportionately expensive, set of cases.

RJE

Members of Civil Rules Advisory Committee Explain and Defend Proposed FRCP Amendments

An ABA Webinar cast earlier this afternoon entitled "The Proposed Revisions to the Federal Rules of Civil Procedure" featured three members of the Civil Rules Advisory Committee, John M. Barkett (moderator), Judge John Koetl, and Judge Paul Grimm. 

I will not repeat the bulk of the presentations, as the Advisory Committee transmittal memorandum and notes on the proposed amendments cover much of what was said. 

Judge Koetl stated that the major themes that emerged at the 2010 Duke Conference (out of which the proposed amendments grew) to reduce the "cost and delay" of civil litigation were proportionality of discovery, cooperation among lawyers, and early and active judicial case management.  

In the category of early and effective judicial case management, the proposals include (among others) suggesting the addition of new topics to the scheduling order, such as a provision that the court can direct that before moving for discovery the parties must have a conference with the court.

This last point was interesting, because Judge Koetl stated that "about a third of the federal judges in the country do that now," and that those judges who do have found that it eliminates most discovery motions.  He stated that there was talk of making this requirement mandatory, but "because most judges don't do it, we only encouraged it." 

Turning to the proposals dealing with "proportionality" in discovery, Judge Koetl stated that the scope of discovery under Rule 26(b)(1) is changed in three main ways:

1. It is limited to matter that is relevant to a party's claim or defense.  The current provision allowing the ordering of discovery "relevant to the subject matter" for "good cause" should be deleted.

2.  The current statement of proportionality is "effectively buried" in Rule 26(b)(2)(C)(iii), so it should be moved to be within Rule 26(b)(1).

3.  The current provision that says relevant information need not be admissible in evidence, if the discovery is reasonably calculated to lead to the discovery of admissible evidence, should be changed.  That provision was intended, Judge Koetl asserted, to be an answer to something like a hearsay objection at a deposition; instead, that language has been used in some cases to expand the scope of discovery beyond its original intent.  The proposed revision says information within the (proposed revised) scope of discovery need not be admissible in evidence to be discoverable. 

Every listener who posed a question to the panel was at least somewhat critical of the proposed amendments.  One listener argued that there was no empirical support for the proposition that there is no "proportionality" in discovery currently, and believed that the proposals were "punishing the innocent majority for the malfeasance of the minority."  Judge Koetl responded that the studies that were conducted for Duke both by the FJC and others reflected measurable dissatisfaction "by a significant number of lawyers for plaintiffs and defendants with respect to discovery being disproportional with respect to the stakes in the case."  It was not a majority who found costs disproportional, but it was "a significant number of cases." 

Judge Koetl also briefly covered the reduction in presumptive limits on certain discovery devices (for example, the reduction from 10 to 5 depositions), and the proposed revision to Rule 1 to remind lawyers of their duty to cooperate.  Judge Grimm covered the proposed amendments to Rule 37 on preservation and spoliation standards.

Mr. Barkett reminded listeners that upcoming hearings were January 9 in Phoenix and February 7 in Dallas.  The public comment period closes Feb. 15, 2014.  See Adam Steinman's earlier post here.

ABA Webinar Tomorrow on Proposed FRCP Amendments, Free to Litigation Section Members

If you are a member of the ABA's Litigation section, you might want to check out this webinar tomorrow, Tuesday, December 17, 2013, at 1:00 pm EST on The Proposed Revisions to the Federal Rules of Civil Procedure.  Registration is free to Litigation section members, $100 to ABA members, and $130 to the general public.

The panel includes:

Hon. John Koeltl, Member, Advisory Committee on Civil Rules, Judge, U.S. District Court for the Southern District of New York, New York, NY

Hon. Paul Grimm, Member, Advisory Committee on Civil Rules, Judge, U.S. District Court for the District of Maryland, Baltimore, MD

John M. Barkett (Moderator), Member, Advisory Committee on Civil Rules, Partner, Shook, Hardy & Bacon, Miami, FL

Hon. John Koeltl, Member, Advisory Committee on Civil Rules, Judge, U.S. District Court for the Southern District of New York, New York, NY

Hon. Paul Grimm, Member, Advisory Committee on Civil Rules, Judge, U.S. District Court for the District of Maryland, Baltimore, MD

John M. Barkett (Moderator), Member, Advisory Committee on Civil Rules, Partner, Shook, Hardy & Bacon, Miami, FL

- See more at: http://apps.americanbar.org/cle/programs/l13rcp1.html?sc_cid=CEL3RCP-C#sthash.M4UUGA8Y.dpuf

Hon. John Koeltl, Member, Advisory Committee on Civil Rules, Judge, U.S. District Court for the Southern District of New York, New York, NY

Hon. Paul Grimm, Member, Advisory Committee on Civil Rules, Judge, U.S. District Court for the District of Maryland, Baltimore, MD

John M. Barkett (Moderator), Member, Advisory Committee on Civil Rules, Partner, Shook, Hardy & Bacon, Miami, FL

- See more at: http://apps.americanbar.org/cle/programs/l13rcp1.html?sc_cid=CEL3RCP-C#sthash.M4UUGA8Y.dpuf

Decision of Interest on the Federal Arbitration Act

Professors Charlie Sullivan and Tim Glynn (Seton Hall) have uncovered what appears to be a draft Supreme Court opinion in Pasquinade v. Quillet Enterprises, Inc. Or not. Here’s the abstract:

The opinion reproduced below was delivered to us anonymously, with a cover note stating that it had been found on a photocopy machine in the Supreme Court of the United States. Efforts to identify the source of the note have been unsuccessful; further, we have been unable to confirm that a case denominated Pasquinade v. Quillet Enterprises, Inc., was ever filed in that Court or in any other federal court.

In light of its unverified origins, the Pasquinade opinion should not be cited as authority. Nevertheless, it contains a few points of interest, and, who knows, could represent a kind of trial run by the Justice who supposedly authored it, complete with reaction to anticipated dissent. We express no opinion on the matter and merely offer Pasquinade “for what it’s worth.”

 

Federal Courts Celebrate 25 Years of PACER and CM/ECF

The Third Branch News reports "25 Years Later, PACER, Electronic Filing Continue to Change Courts."

Apparently without irony, Third Branch notes,  "Lawyers speak of reduced stress at a workday’s end, knowing they can electronically file a document until midnight, without fear that the courthouse doors will close on them."

Court Implicitly Upholds Document Request Seeking Bitcoin Transaction Information

Okay, I've succombed to bitcoin madness.  A search today of the ALLCASES library in the Westlaw database yielded three cases with the word "Bitcoin" in them.  The only one of any recency was the following.

In Entrepreneur Media, Inc. v. Smith, No. 2:10–mc–55–JAM–EFB (E.D. Cal. Nov. 26, 2013), a judgment creditor/plaintiff moved to compel the production of documents sought in aid of enforcement of its judgment against the judgment debtor/defendant.  The document request included, "Any and all books, letters, papers, files, or documents . . . which show any wire transfer, electronic distribution and/or transmission of funds, purchase of debit cards, acquisition and use of any online digital banking services, such as Bitcoin, and/or any and all other papers which show any account in YOUR name, and moreover, any account by any entity, including any digital entity, for the TIME PERIOD."  Without addressing any issue that might have been presented by the inclusion of Bitcoin transactions in the document request, the court granted the motion to compel this particular request (although it denied the motion as to other requests).

Sood on Motivated Cognition in Legal Judgments

Avani Mehta Sood (Berkeley) has posted on SSRN the article "Motivated Cognition in Legal Judgments: An Analytic Review," Annual Review of Law and Social Science, Vol. 9, pp. 307-325 (2013).

Abstract:     

How and when do legal decision makers' preferred outcomes inadvertently drive their judgments? This psychological phenomenon, known as motivated cognition or motivated reasoning, has become an important topic of investigation among scholars conducting experimental research at the intersection of law and psychology. This article presents an overview of that literature, discusses some of its legal applications and implications, highlights areas that require further investigation, and considers some potential ways to curtail the covert operation of motivated cognition in the legal arena.

SCOTUS Decision in Atlantic Marine: Forum-Selection Clauses and Venue Transfer

Today the Supreme Court issued a unanimous decision in Atlantic Marine Constr. Co. v. United States Dist. Court for Western Dist. of Tex. (No. 12-929), which considers the proper procedural vehicle for enforcing a contractual forum-selection clause when the plaintiff files in a federal district that violates that clause. A few highlights from the opinion by Justice Alito:

• Motions under Federal Rule of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a) are not appropriate in this situation. A forum-selection clause does not make a venue “improper” for purposes of Rule 12(b)(3) or “wrong” for purposes of § 1406(a). [See pp. 4-8]
• A motion to transfer under 28 U.S.C. § 1404(a) is appropriate in this situation. Section 1404(a) “provides a mechanism for enforcement of forum-selection clauses that point to a particular federal district.” [p.9]
• “[T]he appropriate way to enforce a forum-selection clause pointing to a state or foreign forum is through the doctrine of forum non conveniens.” [pp.9-10]
• It remains an open question whether a forum-selection clause could be enforced through other vehicles, such as a Rule 12(b)(6) motion. This possibility had been urged by Professor Stephen Sachs in amicus brief, but the Court did not address it because the parties themselves did not raise it. Justice Alito adds: “Even if a defendant could use Rule 12(b)(6) to enforce a forum-selection clause, that would not change our conclusions that § 1406(a) and Rule 12(b)(3) are not proper mechanisms to enforce a forum-­selection clause and that §1404(a) and the forum non conveniens doctrine provide appropriate enforcement mechanisms.” [p.11]

The opinion then addresses how a court should decide a § 1404(a) motion to enforce a forum-selection clause. Justice Alito writes: 

“When the parties have agreed to a valid forum-selection clause, a district court should ordinarily transfer the case to the forum specified in that clause.⁵ Only under extraordinary circumstances unrelated to the convenience of the parties should a §1404(a) motion be denied.” [p.11]

(Footnote 5 makes clear that the Court’s analysis “presupposes a contractually valid forum-selection clause,” which leaves open the possibility that such a clause could be challenged as contractually invalid.) Justice Alito then explains: “The presence of a valid forum-selection clause requires district courts to adjust their usual §1404(a) analysis in three ways.” [p.12] They are:

• “First, the plaintiff ’s choice of forum merits no weight. Rather, as the party defying the forum-selection clause, the plaintiff bears the burden of establishing that transfer to the forum for which the parties bargained is unwarranted.” [p.13]
• “Second, a court evaluating a defendant’s § 1404(a) mo­tion to transfer based on a forum-selection clause should not consider arguments about the parties’ private inter­ests…. As a consequence, a district court may consider argu­ments about public-interest factors only.” [pp.13-14]
• “Third, when a party bound by a forum-selection clause flouts its contractual obligation and files suit in a different forum, a § 1404(a) transfer of venue will not carry with it the original venue’s choice-of-law rules.” [p.14]

Footnote 8 states that “the same standards should apply to should apply to motions to dismiss for forum non conveniens in cases involving valid forum-selection clauses pointing to state or foreign forums.”

The Court ultimately reverses the Fifth Circuit, but it remands for further proceedings: “Although no public-interest factors that might support the denial of Atlantic Marine’s motion to transfer are apparent on the record before us, we remand the case for the courts below to decide that question.” [p.17]

Erie, Semtek, Rule 41(a), and the Preclusive Effect of Voluntary Dismissals

See how the Supreme Court of Tennessee addresses these issues in Cooper v. Glasser, __ S.W.3d __, 2013 WL 6174469 (Tenn. Nov. 26, 2013). The opinion is here. It begins:

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Welcome to your new FRCPs 37 & 45

The recent amendments to Federal Rules of Civil Procedure 37 and 45—which the Supreme Court approved last Spring—came into effect today.