Civil Procedure & Federal Courts Blog

2015 FRCP Amendments Feature Prominently in Chief Justice’s Year-End Report

As if New Year’s Eve wasn’t exciting enough, Chief Justice Roberts has released his 2015 Year-End Report on the Federal Judiciary. He emphasizes the recent amendments to the Federal Rules of Civil Procedure (prefaced by a two-page wind-up about 19th-century dueling practices).

 

Ten New Articles on Personal Jurisdiction

Lewis & Clark Law Review has just published a symposium on personal jurisdiction that contains ten articles and essays;

PERSONAL JURISDICTION SYMPOSIUM: AN INTRODUCTION

Philip Thoennes

19 Lewis & Clark L. Rev. 593 (2015)

ARTICLES

RETHINKING PERSONAL JURISDICTION AFTER BAUMAN AND WALDEN

John T. Parry

19 Lewis & Clark L. Rev. 607 (2015)

A SHIFTING EQUILIBRIUM: PERSONAL JURISDICTION, TRANSNATIONAL LITIGATION, AND THE PROBLEM OF NONPARTIES

Cassandra Burke Robertson and Charles W. “Rocky” Rhodes

19 Lewis & Clark L. Rev. 643 (2015)

THE END OF ANOTHER ERA: REFLECTIONS ON DAIMLER AND ITS IMPLICATIONS FOR JUDICIAL JURISDICTION IN THE UNITED STATES

Linda J. Silberman

19 Lewis & Clark L. Rev. 675 (2015)

CORPORATE LAW AND THE REACH OF COURTS

Verity Winship

19 Lewis & Clark L. Rev. 693 (2015)

WALDEN v. FIORE AND THE FEDERAL COURTS: RETHINKING FRCP 4(k)(1)(A) ANDSTAFFORD v. BRIGGS

Daniel Klerman

19 Lewis & Clark L. Rev. 713 (2015)

PERSONAL JURISDICTION FOR ALLEGED INTENTIONAL OR NEGLIGENT EFFECTS, MATCHED TO FORUM REGULATORY INTEREST

Stanley E. Cox

19 Lewis & Clark L. Rev. 725 (2015)

THE ONLINE-CONTACTS GAMBLE AFTER WALDEN v. FIORE

Julie Cromer Young

19 Lewis & Clark L. Rev. 753 (2015)

REORIENTING PERSONAL JURISDICTION DOCTRINE AROUND HORIZONTAL FEDERALISM RATHER THAN LIBERTY AFTER WALDEN v. FIORE

Allan Erbsen

19 Lewis & Clark L. Rev. 769 (2015)

 

ESSAYS

PERSONAL JURISDICTION: AN ARCHITECTURAL PROBLEM?

Ruth Miller

19 Lewis & Clark L. Rev. 791 (2015)

THE OTHER SIDE OF THE RABBIT HOLE: RECONCILING RECENT SUPREME COURT PERSONAL JURISDICTION JURISPRUDENCE WITH JURISDICTION TO TERMINATE PARENTAL RIGHTS

Joan M. Shaughnessy

19 Lewis & Clark L. Rev. 811 (2015)

 

Hat tip: John Parry

Call for Submissions: Veterans Law Review

The Veterans Law Review, an online journal publishing in the area of Veterans’ law and jurisprudence, is now accepting submissions for consideration of publication in Volume 8. The submissions cycle for Volume 8 will close on January 31, 2016; until that date, writings may be submitted through Scholastica or ExpressO, or may be sent directly to the Editorial Board via the email below. The Veterans Law Review actively encourages Veterans’ service organizations, Veterans, and those working on Veterans’ issues to submit original legal writings for consideration for publication. Manuscripts should be typed and double-spaced in Microsoft Word, Times New Roman 12-point font, and should conform to the current edition of the Blue Book: A Uniform System of Citation. The editors review each manuscript for scholarly merit, clarity, and accuracy and will notify authors of any substantive changes. Authors are invited to discuss potential submissions with the current Veterans Law Review Editorial Board via email at [email protected].

AALS Annual Meeting 2016: Programs Relating to Civil Procedure

The Annual Meeting of the Association of American Law Schools will be held Wednesday, January 6 to Sunday, January 10, 2016 at the New York Hilton Midtown and Sheraton New York Times Square Hotel, New York City.

Programs sponsored by the Civil Procedure Section and/or the Litigation Section are:

Date	Time	Topic
Friday, January 8, 2016	10:30 to 12:15	Discussion of Potential Class Action Reforms with the Advisory Committee on Civil Rules.
Friday, January 8, 2016	1:30 to 3:15	The Pedagogy of Procedure: Using Civil Procedure to Showcase Innovative Teaching Methods.
Saturday, January 9, 2016	10:30 to 12:15	Reforming the Hearsay Rule and Its Exceptions
Saturday, January 9, 2016	1:30 to 3:15	Does Evidence Still Matter?

For more information, see the program schedule.

CAFA Governs Attorneys’ Fees in Class Settlement Involving Michaels’ Vouchers

          An interesting opinion by U.S. District Judge William G. Young:

• provides a definition of “coupons” as used in the Class Action Fairness Act;
• makes sense of the “poorly drafted” CAFA provision regulating attorneys’ fees in so-called coupon settlements; and
• incidentally speculates on the relationship between MDL case assignment, the potential loss of judgeships in a district, and the strictness of a district judge’s scrutiny of attorneys’ fees in class action settlements.

Tyler v. Michaels Stores, Inc., No. CV 11-10920-WGY, 2015 WL 8484421 (D. Mass. Dec. 9, 2015).

            This class action, based on Massachusetts consumer law, alleged that Michaels “asked customers for their zip codes as part of credit card transactions to reverse engineer those customers' addresses using commercially available databases, and then used those addresses to carry out aggressive and unwanted marketing campaigns.”  [Internal quotation marks omitted.]  After Michaels moved to dismiss, the federal court certified legal questions to the Supreme Judicial Court of Massachusetts, which held plaintiffs’ allegations sufficient under state law. 

            After discovery, the parties settled and the court approved the settlement, reserving a ruling on class counsel’s request for fees.  Under the settlement, class members were to receive a $10.00 or $25.00 “voucher” to be used on any merchandise in Michaels’ physical stores, with certain restrictions on use.  The face value of the vouchers was $418,000.00.  The value of the vouchers actually redeemed by class members was $138,620.00.

            Class counsel requested fees and costs of $425,000.00, asserting that Massachusetts law, not CAFA, governed the fees request because the vouchers were not “coupons” as used in CAFA, 28 U.S.C. § 1712, which applies to settlements that “provide[] for a recovery of coupons to a class member.”  Surprisingly, CAFA does not define “coupon.”  Surveying other cases, the Court “essay[ed] such a definition: when class members must transact business with the defendant to obtain the benefit of the settlement, the settlement ‘provides for a recovery of coupons’ under section 1712. In other words, coupons must be redeemed; conversely, if an award must be redeemed, it is a coupon.”  Under that definition, the Michaels vouchers were coupons, and section 1712 applied to the fees request.

            That didn’t settle the matter, however, because section 1712 is bewilderingly drafted.  (I won’t reprint it here: just read subsections (a), (b), and (c), if you dare, and see if you can decipher them.)  Again after surveying other cases, the Court held that even in a coupon-only settlement, section 1712 “vests the Court with the discretion to choose between using a percentage-of-coupons-redeemed method, or the lodestar method.” 

          Here, the Court chose the lodestar method (attorney hours worked times hourly fee) for two reasons:  “[f]irst, class counsel vindicated the important public policy goals of Massachusetts' consumer protection statute,” and “[s]econd, and most importantly, they obtained binding precedent from the Supreme Judicial Court that will influence conduct far beyond that of Michaels.”  However, the Court warned:

Given the hostility to disproportionately large fee awards to class counsel evident in the legislative history -- at least insofar as fees generated from obtaining coupon settlements were concerned -- counsel may reasonably expect that this Court will generally award attorneys' fees based on a percentage of the actual value of the coupons redeemed by class members, absent the groundbreaking nature of this case.

[Footnotes omitted.]

            The Court found that the requested hourly fee of $650.00 for partners was unreasonable, and cut it to $350.00.  This yielded a lodestar of $312,895.00 in attorneys’ fees, which was awarded along with $14,005.30 in costs.

            In other words, the fees award, even though reduced from what was requested, still ended up being more than twice as much as the value of the vouchers actually redeemed by class members.  Personally, I have no problem with that: in my opinion, the primary purpose of the consumer class action is not to compensate the plaintiff class, but to hold the defendant accountable for violating the law.  Others obviously disagree.   

            Here’s where the Court’s two-page footnote 29 comes in.  The Court’s point appears to be this: at least one pro-business advocacy group has argued to the Judicial Panel on Multidistrict Litigation that the Panel’s decision where to send an MDL should “rest on a district judge’s strict scrutiny of claims for attorneys’ fees in class action settlements.”  In other words, business interests have argued that the more strictly a district judge scrutinizes fees requests, the more that judge should be favored as the transferee court in an MDL.  But why should judges want to be the transferee court in an MDL?  Because all of those transferred cases will now be counted as part of that judge’s, and that district’s, civil caseload.  (When a civil case is filed in one district, and transferred to another district for whatever reason, including MDL, it is counted as a filing in both the transferor and the transferee court.  So, for example, if the Panel transfers 5,000 MDL cases to another district, the transferee district gets 5,000 cases added to its total filings.)  This accrual of cases “tend[s] to immunize that court against the potential loss of a judgeship,” because recommendations by the Judicial Conference to add or subtract authorized district court judgeships are based in part on the number of case filings that district has.

            So the Court in Tyler candidly “confess[ed] that, when awarding attorneys' fees in this case, it contemplated -- but rejected as wholly inappropriate -- an additional consideration: the views of the Judicial Panel on Multidistrict Litigation.”       

Institute for Law Teaching and Learning: Call for Proposals

The Institute for Law Teaching and Learning (of the law schools of Gonzaga, Washburn, and Arkansas-Little Rock) has issued a Call for Presentation Proposals for its Summer 2016 conference on Real-World Readiness.

The conference will take place at Washburn University School of Law in Topeka, Kansas, from June 9-11, 2016.  Further information is available on the website.

SCOTUS Decision in DIRECTV v. Imburgia: Federal Arbitration Act Overrides State Contract Law (Again)

Today the Supreme Court issued its decision in DIRECTV, Inc. v. Imburgia. The vote was 6-3, with Justice Breyer writing the majority opinion. Justice Thomas writes a dissenting opinion, and Justice Ginsburg writes a dissenting opinion joined by Justice Sotomayor.

As covered earlier here and here, Imburgia is another case involving the Federal Arbitration Act (FAA). The particular issue is whether the FAA allows California to construe an arbitration provision referring to California state law (the “law of your state”) to mean state law as it existed prior to the U.S. Supreme Court invalidating certain aspects of California contract law in its 2011 decision in AT&T Mobility LLC v. Concepcion. That was how the California Court of Appeal construed the arbitration agreement in Imburgia, but Justice Breyer’s majority opinion disagrees, concluding instead that such a construction itself violates the FAA by failing to “place arbitration contracts on equal footing with all other contracts.”

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Recent Scholarship: Patent Litigation; Supreme Court Justice Loyalty; “Litigation Trolls”

Three new articles recently posted on SSRN:

1. Christopher Beauchamp (Brooklyn Law School) has posted The First Patent Litigation Explosion, forthcoming in Yale Law Journal.

Abstract:

The twenty-first century “patent litigation explosion” is not unprecedented. In fact, the nineteenth century saw an even bigger surge of patent cases. During that era, the most prolific patent enforcers brought hundreds or even thousands of suits, dwarfing the efforts of today’s leading “trolls.” In 1850, New York City and Philadelphia alone had ten times more patent litigation, per U.S. patent in force, than the entire United States in 2013. Even the absolute quantity of late-nineteenth-century patent cases bears comparison to the numbers filed in recent years: the Southern District of New York in 1880 would have ranked third on the list of districts with the most patent infringement suits filed in 2014 and would have headed the list as recently as 2010.

This Article reveals the forgotten history of the first patent litigation explosion. It first describes the rise of large-scale patent enforcement in the middle of the nineteenth century. It then draws on new data from the archives of two leading federal courts to trace the development of patent litigation from 1840 to 1910 and to outline the scale, composition, and leading causes of the litigation boom. Finally, the Article explores the consequences of this phenomenon for the law and politics of the patent system. The effects of the litigation explosion were profound. The rise of large-scale patent assertion provides a new explanation for patent law’s crucial shift from common law to equity decision making in the middle of the nineteenth century. And at its height, the litigation explosion produced a political backlash that threatened to sweep away the patent system as we know it. Recovering the history of patent law during this formative and turbulent era offers fresh perspectives on the patent reform debates of today.

2. Lee Epstein (Washington University in St. Louis School of Law) and Eric A. Posner (University of Chicago Law School) have posted Supreme Court Justices' Loyalty to the President.

Abstract:

A statistical analysis of voting by Supreme Court justices from 1937-2014 provides evidence of a “loyalty effect”—justices more frequently vote for the government when the president who appointed them is in office than when subsequent presidents lead the government. This effect exists even when subsequent presidents are of the same party as the justices in question. However, the loyalty effect is much stronger for Democratic justices than for Republican justices. This may be because Republican presidents are more ideologically committed than Democratic justices are, leaving less room for demonstrations of loyalty.

 

3. Bradley Wendel (Cornell University School of Law) has posted Litigation Trolls (NYU Law School Center on Civil Justice Symposium on "Litigation Funding: The Basics and Beyond").

Abstract:     

Third-party financing of litigation has been described with a variety of unflattering metaphors. Litigation financers have been likened to gamblers in the courtroom casino, loan sharks, vultures, Wild West outlaws, and busybodies mucking about in the private affairs of others. Now Judge Richard Posner has referred to third-party financers as litigation trolls, an undeniably unflattering comparison to patent trolls. But what it is, if anything, that makes third-party financers “trolls”? Legal claims are, for the most part, freely assignable, the proceeds of claims are assignable, and various strangers to the underlying lawsuit, including liability insurers and plaintiffs’ contingency-fee counsel, are permitted to have an economic interest in the outcome of the litigation. On one view, therefore, third-party litigation investment is just another innovative financial product that enables risk to be carved up and allocated more efficiently. Life insurance, attorney contingent fees, and derivative contracts on exchange-traded commodities were all formerly regarded with extreme suspicion, but are now widely accepted. But people still hate patent trolls. So whether litigation funding is some kind of conceptual anomaly is an important question because, as it happens, Posner’s dictum coincides with a public-relations campaign by the U.S. Chamber of Commerce to stigmatize third-party litigation financing and saddle the industry with new and burdensome regulations. This short paper evaluates the conceptual critique of litigation financing by comparison with two other areas in which it is claimed that some form of financing “just doesn’t sit right” in light of the nature and function of the legal system – patent trolling and contributions to judicial election campaigns.

New Study of State Court Litigation by the National Center for State Courts

Paula Hannaford Agor, Scott E. Graves, and Shelley Spacek Miller, all of the National Center for State Courts, have published on SSRN their study, The Landscape of Civil Litigation in State Courts.

Abstract:

The Landscape of Civil Litigation of State Courts examined case characteristics and outcomes for civil cases disposed during a one-year interval from all courts exercising jurisdiction over civil cases in 10 urban counties in the United States. This report is the first significant multi-jurisdiction study of civil caseloads since the 1992 Civil Justice Survey of State Courts, and is more comprehensive than the 1992 study insofar that it examined the entire civil caseload rather than just cases filed in general jurisdiction courts. The Landscape dataset consisted of 925,344 cases, which reflects approximately 5% of civil caseloads nationally.

Key findings: more than half of the Landscape cases were low-value debt collection, landlord/tenant, and small claims cases; three-quarters of the judgments entered in the Landscape cases were $5,200 or less; most cases were resolved through an administrative process rather than an adversarial proceeding; and at least one party was self-represented in more than three-quarters of the cases. These findings offer a dramatically changed picture of civil caseloads compared to two decades ago and to perceptions held by many civil trial lawyers and judges.

July 2016 Bar Exam Would Be Earliest to Test on 2015 FRCP Amendments

Over at PrawfsBlawg, Jessica Berch reported on the announcement by the National Conference of Bar Examiners that the earliest that the latest FRCP amendments would be tested would be the July 2016 Multistate Bar Examination and Multistate Essay Examinations.

 

More on the Duke Law Center and the New Discovery Proportionality Rule

To mark the effective date of the latest FRCP amendments, the American Constitution Society's blog posted a short piece by Professor Suja A. Thomas entitled Duke Law and the New Discovery Proportionality Rule.     

The piece describes the controversy surrounding the Duke Center for Judicial Studies’ so-called "Guidelines and Suggested Practices for Implementing the 2015 Discovery Amendments to Achieve Proportionality," which we covered earlier here.

Reinert on Measuring the Impact of Plausibility Pleading

Professor Alexander Reinert's empirical study of Iqbal, entitled Measuring the Impact of Plausibility Pleading, has now been published in 101 Va. L. Rev. 2117 (2015).  Professor Reinert earlier posted the article on SSRN.

Abstract:

In the United States, modern civil procedure began in 1938 with the promulgation of the Federal Rules of Civil Procedure. From then, until very recently, the notice pleading standard – emphasizing simplicity and brevity in pleadings over technicality – was held up as an example of the Rule’s commitment to adjudicating the merits of every claim and avoiding premature and wasteful disputes that often had little to do with merits. In Bell Atlantic v. Twombly and Ashcroft v. Iqbal, announced in 2007 and 2009, the United States Supreme Court revisited the notice pleading standard, announcing that “plausibility pleading” must now be the standard for assessing whether a complaint’s allegations are sufficient to justify moving to discovery and merits adjudication. This Article offers a comprehensive analysis of the impact of the plausibility pleading standard on resolutions of motions to dismiss in almost 4200 cases from 15 different judicial districts, representing all 12 general jurisdiction circuit courts of appeal. Relying on data obtained from all published and unpublished opinions in these districts for the years 2006 and 2010, this study provides the most detailed analysis to date of the impact that plausibility pleading and other variables have had on the resolutions of motions to dismiss in civil cases.

The data reported here suggest that many prior studies have failed adequately to capture the full impact of Iqbal and Twombly on the resolution of motions to dismiss in federal court. First, this Article provides data showing that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal. These results remained significant even after controlling for potential confounding factors. Second, the data also suggest that certain factors interact with the plausibility standard to influence the resolution of a motion to dismiss, including perhaps most importantly the institutional status of the plaintiff and defendant. Individuals have fared poorly under the plausibility regime, at least when compared to corporate and governmental agents and entities. These effects remained significant even after controlling for several potentially confounding variables. Finally, by analyzing data on the progress of cases after a motion to dismiss has been adjudicated, this Article shows that the advent of heightened pleading has not resulted in higher quality claims.

Along with providing an important descriptive account of the impact that plausibility pleading has had on the course of federal litigation, this Article suggests two heretofore unexplored bases for questioning the wisdom of the transition initiated by Twombly and solidified by Iqbal. First, while one should not be shocked by the observation that civil rights and employment discrimination claims suffer under the plausibility pleading regime, one should still be troubled by it given the historical role that federal courts have played in such cases. Second, to the extent that the plausibility regime has exacerbated inequality in the courts between individual litigants on one hand and corporate and governmental entities on the other, without increasing overall case quality, there should be wider agreement that such a change is to be lamented.

Today's SCOTUS Decision on the Foreign Sovereign Immunities Act

Today the Supreme Court issued its first opinion in an argued case this Term: OBB Personenverkehr AG v. Sachs. In an opinion by Chief Justice Roberts, the Court unanimously held that a lawsuit against the Austrian state-owned railway was barred by Foreign Sovereign Immunities Act. From the opinion:

Respondent Carol Sachs is a resident of California who purchased in the United States a Eurail pass for rail travel in Europe. She suffered traumatic personal injuries when she fell onto the tracks at the Innsbruck, Austria, train station while attempting to board a train operated by the Austrian state-owned railway. She sued the railway in Federal District Court, arguing that her suit was not barred by sovereign immunity because it is “based upon” the railway’s sale of the pass to her in the United States. We disagree and conclude that her action is instead “based upon” the railway’s conduct in Innsbruck. We therefore hold that her suit falls outside the commercial activity exception and is barred by sovereign immunity. 

Our earlier coverage is here.

 

 

December 1, 2015: FRCP Amendments Now In Effect

The recent batch of amendments to the Federal Rules of Civil Procedure, which the Supreme Court adopted in April, are in effect as of today. Some of our earlier coverage is here and here.