Civil Procedure & Federal Courts Blog

Wasserman on Ascertainability and Class Actions

Rhonda Wasserman has posted on SSRN her article, Ascertainability: Prose, Policy, and Process, 50 Conn. L. Rev. 695 (2018). Here’s the abstract:

One of the most hotly contested issues in class action practice today is ascertainability – when and how the identities of individual class members must be ascertained. The courts of appeals are split on the issue, with courts in different circuits imposing dramatically different burdens on putative class representatives. Courts adopting a strict approach require the class representative to prove that there is an administratively feasible means of determining whether class members are part of the class. This burden may be insurmountable in consumer class actions because people tend not to save receipts for purchases of low-cost consumer goods, like soft drinks and snacks and have no other objective proof of their membership in the class. Thus, in circuits adopting the strict approach, class certification may be denied, whereas in other circuits, the same class may be certified. Notwithstanding the circuit split on this critical issue, the Supreme Court has denied several petitions for writs of certiorari raising the issue; the Senate has failed to act on a bill passed by the House to address it; and the Advisory Committee has placed the issue on hold. Given the current state of disuniformity and the resultant inequitable administration of the laws, the time is ripe to address the issue.

Ascertainability is not only of great practical importance, but it is interesting on three different levels. First, there is a question of prose – whether the text of the Rule supports the implication of the strict ascertainability requirement. Second, there is a question of policy – whether concern for the class action defendant, the absent class members, or the trial court overseeing the action justifies imposition of the strict requirement, notwithstanding its harsh impact on consumer class actions. Third, there is a process question: which governmental actor – the lower courts, the Supreme Court, the Advisory Committee on Civil Rules, or Congress – has the greatest institutional competency to resolve the policy issue and establish a uniform approach to ascertainability. This Article addresses each of these questions in turn.

 

 

 

 

 

Pfander on Sutton on the States’ Role in Making Constitutional Law

Today on the Courts Law section of JOTWELL is Jim Pfander’s essay, Enhancing the Role of States in Making Constitutional Law. Jim reviews Judge Jeffrey Sutton’s recent book, 51 Imperfect Solutions: States and the Making of American Constitutional Law (2018).

 

 

Burbank & Wolff on American Pipe, Class Actions & Federal Common Law

Steve Burbank and Tobias Wolff have published Class Actions, Statutes of Limitations and Repose, and Federal Common Law, 167 U. Pa. L. Rev. 1 (2018). Here’s the abstract:

After more than three decades during which it gave the issue scant attention, the Supreme Court has again made the American Pipe doctrine an active part of its docket. American Pipe addresses the tolling of statutes of limitations in federal class action litigation. When plaintiffs file a putative class action in federal court and class certification is denied, absent members of the putative class may wish to pursue their claims in some kind of further proceeding. If the statute of limitations would otherwise have expired while the class certification issue was being resolved, these claimants may need the benefit of a tolling rule. The same need can arise for those who wish to opt out of a certified class action. American Pipe and its progeny provide such a tolling rule in some circumstances, but many unanswered questions remain about when the doctrine is available.

In June 2017, the Court decided CalPERS v. ANZ Securities, holding that American Pipe tolling was foreclosed to a class member who opted out of a certified class in an action brought to enforce a federal statute (the Securities Act of 1933) that contained what the Court labeled a “statute of repose.” In June 2018, the Court decided Resh v. China Agritech, which held that American Pipe tolling is not available when absent members of a putative class file another class action following the denial of certification in the first action rather than pursuing their claims individually in subsequent proceedings.

In this Article we develop a comprehensive theoretical and doctrinal framework for the American Pipe doctrine. Building on earlier work, we demonstrate that American Pipe tolling is a federal common-law rule that aims to carry into effect the provisions and policies of Federal Rule of Civil Procedure 23, the federal class action device. Contrary to the Court’s assertion in CalPERS, American Pipe is not an “equitable tolling doctrine.” Neither is it the product of a direct mandate in Rule 23, which is the source of authority, not the source of the rule. Having clarified the status of American Pipe tolling as federal common law, we explain the basis on which the doctrine operates across jurisdictions, binding subsequent actions in both federal and state court. We argue that the doctrine applies whether the initial action in federal court was based on a federal or state cause of action—a question that has produced disagreement among the lower federal courts. And we situate American Pipe within the framework of the Court’s Erie jurisprudence, explaining how the doctrine should operate when the putative class action was in federal court based on diversity jurisdiction and the courts of the state in which it was filed would apply a different rule. Finally, we discuss how CalPERS should have been decided if the Court had recognized the true nature of the American Pipe rule and if it had engaged the legislative history of the Securities Act rather than relying on labels.

 

 

 

 

Bookman on Sinnar on Procedural Innovations in National Security Litigation

Today on the Courts Law section of JOTWELL is Pamela Bookman’s essay, Procedural Innovations to Address the Secrecy Problem in National Security Litigation. Pam reviews Shirin Sinnar’s recent article, Procedural Experimentation and National Security in the Courts, 106 Cal. L. Rev. 991 (2018).

 

 

 

 

Another Unanimous SCOTUS Decision on Arbitration: New Prime Inc. v. Oliveira

Today the Supreme Court issued an 8-0 decision in New Prime Inc. v. Oliveira. Justice Gorsuch authors the opinion (Justice Kavanaugh did not participate).

The case involves § 1 of the Federal Arbitration Act, which provides that “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” This provision 

The Court addresses two questions. The first is: “When a contract delegates questions of arbitrability to an arbitrator, must a court leave disputes over the application of §1’s exception for the arbitrator to resolve?” [Op. at 1] The answer is no. “Given the statute’s terms and sequencing, we agree with the First Circuit that a court should decide for itself whether §1’s ‘contracts of employment’ exclusion applies before ordering arbitration.” [Op. at 4 (emphasis added)]

The second question is: “[D]oes the term ‘contracts of employment’ refer only to contracts between employers and employees, or does it also reach contracts with independent contractors?” [Op. at 1] The answer is that contracts with independent contractors can also be excluded from the FAA. Justice Gorsuch reasoned that “Congress used the term ‘contracts of employment’ in a broad sense to capture any contract for the performance of work by workers,” [Op. at 10 (emphasis in original)], and that the term ‘workers’ “easily embraces independent contractors.” [Op. at 10]

This part of Justice Gorsuch’s opinion emphasizes that statutory terms “generally should be interpreted as taking their ordinary meaning at the time Congress enacted the statute.” [Op. at 6 (citation omitted)]. Justice Ginsburg writes a brief concurring opinion to stress that there may be some exceptions to this interpretive principle, because Congress “may design legislation to govern changing times and circumstances” [Ginsburg Op. at 1]. Her opinion notes that “sometimes, words in statutes can enlarge or contract their scope as other changes, in law or in the world, require their application to new instances or make old applications anachronistic.” [Ginsburg Op. at 2 (citation omitted)]

 

SCOTUS cert grant on whether Title VII’s administrative exhaustion requirement is jurisdictional

Today the Supreme Court granted certiorari in Fort Bend County, Texas v. Davis. Here is the question presented:

Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., requires plaintiffs to exhaust claims of employment discrimination with the EEOC before filing suit in federal court. Id. § 2000e-5(b), (f)(1).

The question presented is: Whether Title VII’s administrative exhaustion requirement is a jurisdictional prerequisite to suit, as three Circuits have held, or a waivable claim-processing rule, as eight Circuits have held.

You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog and at the Supreme Court website.

 

Today’s SCOTUS Decision on Arbitration: Henry Schein, Inc. v. Archer & White Sales, Inc.

Today the Supreme Court issued a unanimous decision in Henry Schein, Inc. v. Archer & White Sales, Inc. Justice Kavanaugh’s opinion—his first on the Supreme Court—begins:

Under the Federal Arbitration Act, parties to a contract may agree that an arbitrator rather than a court will resolve disputes arising out of the contract. When a dispute arises, the parties sometimes may disagree not only about the merits of the dispute but also about the threshold arbitrability question—that is, whether their arbitration agreement applies to the particular dispute. Who decides that threshold arbitrability question? Under the Act and this Court’s cases, the question of who decides arbitrability is itself a question of contract. The Act allows parties to agree by contract that an arbitrator, rather than a court, will resolve threshold arbitrability questions as well as underlying merits disputes. Rent-A-Center, West, Inc. v. Jackson, 561 U. S. 63, 68−70 (2010); First Options of Chicago, Inc. v. Kaplan, 514 U. S. 938, 943−944 (1995).

Even when a contract delegates the arbitrability question to an arbitrator, some federal courts nonetheless will short-circuit the process and decide the arbitrability question themselves if the argument that the arbitration agreement applies to the particular dispute is “wholly groundless.” The question presented in this case is whether the “wholly groundless” exception is consistent with the Federal Arbitration Act. We conclude that it is not. The Act does not contain a “wholly groundless” exception, and we are not at liberty to rewrite the statute passed by Congress and signed by the President. When the parties’ contract delegates the arbitrability question to an arbitrator, the courts must respect the parties’ decision as embodied in the contract.

Download Henry Schein (17-1272)

 

 

The Chief Justice’s Year-End Report

Earlier this week, Chief Justice Roberts released his 2018 Year-End Report on the Federal Judiciary. It focuses on the report and recommendations issued by The Federal Judiciary Workplace Conduct Working Group earlier this year, and the steps the judiciary has taken toward implementing those recommendations.