Civil Procedure & Federal Courts Blog

Juries, Voir Dire, Batson, and Beyond: Achieving Fairness in Civil Jury Trials (Pound Civil Justice Institute Webcast, 7/17/2021)

The Pound Civil Justice Institute’s 2021 Forum for State Appellate Court Judges will be held by webcast on Saturday, July 17 (11:00 am – 5:30 pm EDT). The topic is “Juries, Voir Dire, Batson, and Beyond: Achieving Fairness in Civil Jury Trials,” and it will feature papers by Valerie Hans and Shari Diamond.

Academics who wish to attend can register here (deadline: July 8). Here is the full program:

Download 2021 Forum Agenda

 

 

 

 

Facebook's Newest Friends: Twombly & Iqbal

Yesterday’s decision dismissing the FTC’s complaint against Facebook is a high-profile example of the Twombly/Iqbal pleading framework in action. From District Judge Boasberg’s introduction:

Although the Court does not agree with all of Facebook’s contentions here, it ultimately concurs that the agency’s Complaint is legally insufficient and must therefore be dismissed. The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services. The Complaint contains nothing on that score save the naked allegation that the company has had and still has a “dominant share of th[at] market (in excess of 60%).” Redacted Compl., ¶ 64

Judge Boasberg did, however, give the FTC 30 days to file an amended complaint.

 

 

 

Reminder: Summer 2021 Civil Procedure Workshop Works-In-Progress Series

Just a quick reminder that the first of two online civil procedure works-in-progress sessions will be happening on July 15. If you’d like to present, the deadline to upload your paper is this Thursday, July 1. Here’s the form to do so.

(H/T: Pam Bookman, Brooke Coleman & Dave Marcus)

 

 

 

SCOTUS Decision on Article III Standing: TransUnion v. Ramirez

Today the Supreme Court issued its decision in TransUnion LLC v. Ramirez (covered earlier here). It’s 5-4, with Justice Kavanaugh writing the majority opinion joined by Chief Justice Roberts and Justices Alito, Gorsuch, and Barrett. Justice Thomas writes one dissent, which is joined by Justices Breyer, Sotomayor, and Kagan. And Justice Kagan writes another dissent, which is joined by Justices Breyer and Sotomayor.

The case is a class action bringing claims under the federal Fair Credit Reporting Act (FCRA), and the key issue in the case is Article III standing. The majority finds that Article III was satisfied for some class members and claims, but was not satisfied for others. From the majority’s introduction:

In this case, a class of 8,185 individuals sued TransUnion, a credit reporting agency, in federal court under the Fair Credit Reporting Act. The plaintiffs claimed that TransUnion failed to use reasonable procedures to ensure the accuracy of their credit files, as maintained internally by TransUnion. For 1,853 of the class members, TransUnion provided misleading credit reports to third-party businesses. We conclude that those 1,853 class members have demonstrated concrete reputational harm and thus have Article III standing to sue on the reasonable-procedures claim. The internal credit files of the other 6,332 class members were not provided to third-party businesses during the relevant time period. We conclude that those 6,332 class members have not demonstrated concrete harm and thus lack Article III standing to sue on the reasonable-procedures claim.

In two other claims, all 8,185 class members complained about formatting defects in certain mailings sent to them by TransUnion. But the class members other than the named plaintiff Sergio Ramirez have not demonstrated that the alleged formatting errors caused them any concrete harm. Therefore, except for Ramirez, the class members do not have standing as to those two claims.

This was not the result that we urged in this legal scholars amicus brief, which was joined by myself, Tommy Bennett, Erwin Chemerinsky, Heather Elliott, Steve Vladeck, and Howard Wasserman. We had argued in favor of Article III standing for the entire class as to all of the claims they proved at trial. One point that we made, however, found some purchase in Justice Thomas’s dissenting opinion—that rejecting Article III standing in federal court would not necessarily stop these same federal claims from being pursued by these same plaintiffs in state court. Here’s footnote 9 from the Thomas dissent:

Today’s decision might actually be a pyrrhic victory for TransUnion. The Court does not prohibit Congress from creating statutory rights for consumers; it simply holds that federal courts lack jurisdiction to hear some of these cases. That combination may leave state courts—which “are not bound by the limitations of a case or controversy or other federal rules of justiciability even when they address issues of federal law,” ASARCO Inc. v. Kadish, 490 U. S. 605, 617 (1989)—as the sole forum for such cases, with defendants unable to seek removal to federal court. See also Bennett, The Paradox of Exclusive State-Court Jurisdiction Over Federal Claims, 105 Minn. L. Rev. 1211 (2021). By declaring that federal courts lack jurisdiction, the Court has thus ensured that state courts will exercise exclusive jurisdiction over these sorts of class actions.

As to Article III standing generally, Justice Thomas’s final paragraph is notable:

Ultimately, the majority seems to pose to the reader a single rhetorical question: Who could possibly think that a person is harmed when he requests and is sent an incomplete credit report, or is sent a suspicious notice informing him that he may be a designated drug trafficker or terrorist, or is not sent anything informing him of how to remove this inaccurate red flag? The answer is, of course, legion: Congress, the President, the jury, the District Court, the Ninth Circuit, and four Members of this Court.

In addition to Article III standing, TransUnion presented a question regarding whether the class action satisfied Rule 23(a)’s typicality requirement. The Court did not address that question, however: “In light of our conclusion about Article III standing, we need not decide whether Ramirez’s claims were typical of the claims of the class under Rule 23. On remand, the Ninth Circuit may consider in the first instance whether class certification is appropriate in light of our conclusion about standing.”

 

 

 

 

 

 

Wasserman on Crocker on Immunities and Constitutional-Tort Litigation

Today on the Courts Law section of JOTWELL is Howard Wasserman’s essay, The Paths to Comprehensive Entity Liability in Constitutional Litigation. Howard reviews two recent articles by Katherine Mims Crocker, Reconsidering Section 1983’s Nonabrogation of Sovereign Immunity, 73 Fla. L. Rev. (forthcoming 2021), and Qualified Immunity, Sovereign Immunity, and Systemic Reform, 71 Duke L.J. (forthcoming 2022).

 

 

SCOTUS Decision in Goldman Sachs: Class Certification in Securities-Fraud Cases

Today the Supreme Court issued its decision in Goldman Sachs Group, Inc. v. Arkansas Teacher Retirement System. Justice Barrett writes the opinion, which is unanimous as to some parts and a majority opinion as to the rest. Here’s the full breakdown:

BARRETT, J., delivered the opinion of the Court, in which ROBERTS, C. J., and BREYER, KAGAN, and KAVANAUGH, JJ., joined in full; in which THOMAS, ALITO, and GORSUCH, JJ., joined as to Parts I and II–A; and in which SOTOMAYOR, J., joined as to Parts I, II–A–1, and II–B. SOTOMAYOR, J., filed an opinion concurring in part and dissenting in part. GORSUCH, J., filed an opinion concurring in part and dissenting in part, in which THOMAS and ALITO, JJ., joined.

The case involves a securities-fraud class action against Goldman Sachs. The district court certified the class and the Second Circuit affirmed class certification. Here’s how Justice Barrett summarizes the decision:

In this Court, Goldman argues that the Second Circuit erred twice: first, by holding that the generic nature of its alleged misrepresentations is irrelevant to the price impact inquiry; and second, by assigning Goldman the burden of persuasion to prove a lack of price impact.

On the first question, the parties now agree, as do we, that the generic nature of a misrepresentation often is important evidence of price impact that courts should consider at class certification. Because we conclude that the Second Circuit may not have properly considered the generic nature of Goldman’s alleged misrepresentations, we vacate and remand for the Court of Appeals to reassess the District Court’s price impact determination. On the second question, we agree with the Second Circuit that our precedents require defendants to bear the burden of persuasion to prove a lack of price impact by a preponderance of the evidence. We emphasize, though, that the burden of persuasion should rarely be outcome determinative.

 

 

 

SCOTUS Decision in Nestle v. Doe: More on the Alien Tort Statute

Today the Supreme Court issued its decision in Nestlé USA, Inc. v. Doe (covered earlier here). The plaintiffs brought claims under the Alien Tort Statute (ATS) against two American companies—Nestlé USA and Cargill—that “purchase, process, and sell cocoa. They did not own or operate farms in Ivory Coast. But they did buy cocoa from farms located there. They also provided those farms with technical and financial resources—such as training, fertilizer, tools, and cash—in exchange for the exclusive right to purchase cocoa.” The plaintiffs “are six individuals from Mali who allege that they were trafficked into Ivory Coast as child slaves to produce cocoa” and that the defendants’ arrangements with those cocoa farms aided and abetted child slavery. 

The Supreme Court concludes that the plaintiffs “improperly seek extraterritorial application of the ATS.” It’s quite a fractured opinion, however:

THOMAS, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I and II, in which ROBERTS, C. J., and BREYER, SOTOMAYOR, KAGAN, GORSUCH, KAVANAUGH, and BARRETT, JJ., joined, and an opinion with respect to Part III, in which GORSUCH and KAVANAUGH, JJ., joined. GORSUCH, J., filed a concurring opinion, in which ALITO, J., joined as to Part I, and in which KAVANAUGH, J., joined as to Part II. SOTOMAYOR, J., filed an opinion concurring in part and concurring in the judgment, in which BREYER and KAGAN, JJ., joined. ALITO, J., filed a dissenting opinion.

A majority of the Court joins Part II of Justice Thomas’s opinion, which recognizes based on the Court’s earlier case law that courts “cannot give ‘extraterritorial reach’ to any cause of action judicially created under the ATS.” Therefore, ATS plaintiffs “must establish that ‘conduct relevant to the statute’s focus occurred in the United States.’” The plaintiffs here did not satisfy this requirement:

Nearly all the conduct that they say aided and abetted forced labor—providing training, fertilizer, tools, and cash to overseas farms—occurred in Ivory Coast. The Ninth Circuit nonetheless let this suit proceed because respondents pleaded as a general matter that “every major operational decision by both companies is made in or approved in the U. S.” App. 314. But allegations of general corporate activity—like decisionmaking—cannot alone establish domestic application of the ATS.

As we made clear in Kiobel, a plaintiff does not plead facts sufficient to support domestic application of the ATS simply by alleging “mere corporate presence” of a defendant. 569 U. S., at 125. Pleading general corporate activity is no better. Because making “operational decisions” is an activity common to most corporations, generic allegations of this sort do not draw a sufficient connection between the cause of action respondents seek—aiding and abetting forced labor overseas—and domestic conduct.

Beyond this holding, here’s a quick headcount on where the justices come out on other issues relating to the ATS:

Justices Thomas, Gorsuch, and Kavanaugh argue that the federal judiciary lacks the authority even to recognize a cause of action for the kind of claim asserted here. Justices Breyer, Sotomayor, and Kagan argue against this position.

Justices Breyer, Alito, Sotomayor, Kagan, Gorsuch, and Kavanaugh all agree that domestic corporations are not categorically immune from suit under the ATS.

Justice Alito indicates some sympathy with the Thomas/Gorsuch/Kavanaugh view about the judiciary’s authority to recognize new ATS claims (“To be sure, Part III of JUSTICE THOMAS’s opinion and Part II of JUSTICE GORSUCH’s opinion make strong arguments that federal courts should never recognize new claims under the ATS”), but he states that “this issue was not raised by petitioners’ counsel, and I would not reach it here.” Justice Alito also disagrees with the Court deciding the case on extraterritoriality grounds, stating instead that he would “reject petitioners’ argument on the question of corporate immunity, vacate the judgment below, and remand these cases for further proceedings.”

 

 

 

 

Malveaux on Spaulding on Ideal and Actual Due Process

Today on the Courts Law section of JOTWELL is Suzette Malveaux’s essay, Getting Real About Procedure: Changing How We Think, Write and Teach About American Civil Procedure. Suzette reviews Norman Spaulding’s recent article, The Ideal and the Actual in Procedural Due Process, 48 Hastings Const. L.Q. 261 (2021).