D. Arizona Grants Class Certification After Four-Year Delay Due to Unusual Procedural Posture and Lack of Prejudice

Per Arnold v. Arizona Dept. of Public Safety, 233 F.R.D. 537 (D.Ariz., Oct. 18, 2005) regarding Rule 23:

The Court must next determine whether that part of Plaintiffs' Motion seeking class certification should be denied as untimely filed. Plaintiffs commenced this action over four years ago and delayed in seeking class certification. Plaintiffs explain that such delay was the result of the complexity of the issues, the volume of discovery, the loss or destruction of critical evidence which prevented Plaintiffs from establishing the factors which Fed.R.Civ.P. 23 requires for class certification, the intervening appeal, and the parties' decision to participate in mediation. (document # 66 at 8) Defendants do not oppose class certification despite the significant delay in moving the Court to do so.

When Plaintiffs filed suit in 2001, Fed.R.Civ.P. 23 required a court to determine whether to certify a class “ as soon as practicable after commencement of an action.” Id. (Emphasis added). In 2003, while this case was pending in district court, Congress amended Federal Rule of Civil Procedure 23(c)(1)(A) to give federal courts more flexibility by permitting the court to consider class certification “ at an early practicable time.” Fed.R.Civ.P. 23 (2003). The amendment to Rule 23 accounts for the judicial practice of ruling on pretrial motions, including motions for summary judgment, before determining whether to certify a class. Managing Class Action Litigation: A Pocket Guide for Judges, Barbara J. Rothstein & Thomas E. Willging, FJC (2005). The advisory notes to Rule 23 provide that the more relaxed standard provides the parties and the court with the time necessary to gather information relevant to the certification decision. Advisory Committee Notes to Rule 23, Federal Rules of Civil Procedure, Rev. Ed., p. 129, Thomson/West (2004). In addition, the court may need to determine how the case will be tried, consider pretrial motions, and explore the designation of counsel before deciding whether to certify a class. Id. The Advisory Committee Notes, however, warn that the court should ensure that the certification decision is not “unjustifiably delayed.” Id. Unlike some districts, the District of Arizona has no Local Rule on timeliness for seeking class action certification.

Courts applying Rule 23, as amended, do not deny class certification based on timeliness unless the delay has prejudiced a defendant. In re Spring Ford Indus., 2004 WL 231010 (Bankr.E.D.Pa.2004). In addition, courts, including the Ninth Circuit, have held that so long as no prejudice results, it is permissible to proceed on the merits before class certification. Wright v. Schock, 742 F.2d 541, 543 (9th Cir.1984); Evans v. Taco Bell Corp., 2005 WL 2333841, *3 n. 6 (D.N.H.2005) (stating that “[i]t is well settled that, absent prejudice to the plaintiff, a court may decide a defendant's motion for summary judgment in a putative class action before taking up the issue of class certification.”).

In view of the flexibility now permitted in amended Rule 23, the unusual procedural posture of this case which contributed to the delay in seeking class certification, the Defendants' concurrence in the request for class certification, the apparent absence of any prejudice to any of the parties, and class certification would protect a larger group of people and enhance the public policy against the unlawful discriminatory practice of racial profiling, the Court finds that the motion for class certification is timely and should be considered on the merits. The Court, however, declines to rule on the merits of that motion at this time.

Seventh Circuit Holds that Exhaustion Not Required for Unnamed ERISA Class Members

BNA’s Class Action Litigation (Volume 07 Number 06, Fri., Mar. 24, 2006, Page 183, ISSN 1529-8000) is reporting on In re Household Int’l Tax Reduction Plan, --- F.3d ----, 2006 WL 688969 (7th Cir. Mar. 20, 2006): "Unnamed class members in an Employee Retirement Income Security Act class action are not required to exhaust their administrative remedies before the case can be certified as a class action. . . ."

In its opinion the Circuit Court stated:

If the complaint or subsequent filings adequately identify the class members' claims and demonstrate that they are indeed very similar to those of the named plaintiff, the defendant knows what he is facing and can make efforts to settle the full array of claims. In such a case, requiring exhaustion by the individual class members would merely produce an avalanche of duplicative proceedings and accidental forfeitures, and so is not required.

This is emphatically the case when dealing with class actions under ERISA, where, there being no statutory requirement of exhaustion, the district court has discretion to require no exhaustion by anyone. Powell v. A.T. & T. Communications, Inc., 938 F.2d 823, 825 (7th Cir.1991); Gallegos v. Mount Sinai Medical Center, supra, 210 F.3d at 808.

BNA has a full discussion of the case, which is available to BNA subscribers by clicking here.

Fifth Circuit Holds 60-Day Period for Ruling on Merits of CAFA Appeal Begins with Order Granting Leave to Appeal

Per Patterson v. Dean Morris, L.L.P., --- F.3d ----, 2006 WL 711445 (5th Cir. Mar. 22, 2006):

This appeal come to us under the Class Action Fairness Act of 2005 (“CAFA”), Pub.L. 109-2, 119 Stat. 4 (2005). We have motions to decide before briefing is completed on the merits. Because of CAFA's limitations on the period of time in which we must rule on the merits of the appeal, we need to determine whether that period begins with the filing of the petition for leave to appeal or, instead, with our order granting leave to appeal. We conclude that the time runs from the order.

. . .

The plain language of § 1453(c)(1) and (2) is that a court of appeals has the option to “accept” an appeal that is sought under CAFA from an order granting or denying a motion to remand to state court. Naturally this indicates the appeal is discretionary with the court of appeals, which may reject it by denying the petition for permission to appeal, in which case there is (and never was) an appeal in the usual sense.

By this easy reading, a requested appeal under CAFA is subject to Federal Rule of Appellate Procedure 5, which governs (and is entitled) “Appeal by Permission.” Importantly, rule 5(d)(2) says that “[a] notice of appeal need not be filed. The date when the order granting permission to appeal is entered serves as the date of the notice of appeal for calculating time under these rules.”

This subsection leads us to the conclusion that it is the order granting leave to appeal that triggers the sixty-day period for a court of appeals to enter judgment. That is the result reached in a recent, careful opinion, on which the dissent also relies, in Amalgamated Transit Union Local 1309, AFL-CIO v. Laidlaw Transit Servs., Inc., 435 F.3d 1140 (9th Cir.2006). That court persuasively concluded that “in enacting § 1453(c)(1) Congress intended to mirror the procedures for taking an appeal pursuant to [28 U.S.C.] § 1292(b).” Id. at 1145. As that court reasoned, it follows that “a party seeking to appeal under § 1453(c)(1) must comply with the requirements of [rule] 5.” Id.

By reference to § 1292(b) and rule 5, the Ninth Circuit observed that “Congress chose in the language of the statute to require the filing of an ‘application,’ the same word used in § 1292(b), not a ‘notice of appeal.’ ” Id. The distinction is important: When a party files a notice of appeal, there is, at that very point in time, an appeal, albeit one that may later be subject to dismissal for jurisdictional or procedural insufficiency. Where, however, a party “applies” for leave to appeal, or “seeks permission” to do so, there is logically no appeal until the court vested with the authority to grant or deny leave has done so.

One objection the dissent raises to recognizing the order granting leave to appeal as the trigger for counting the sixty days is that by delaying a decision on whether to grant leave to appeal, a court of appeals might be able to extend its “consideration” of the case indefinitely. One device for so doing would be to entertain full merits briefing (and maybe even oral argument), then issuing an opinion or order that either (1) denies leave to appeal based on an evaluation of the merits of the class certification issue or (2) grants leave to appeal and, in the same order or opinion, rules on the merits. Such a procedure arguably would circumvent the evident will of Congress to have CAFA appeals on remand issues decided on an exceptionally tight schedule.

The fact is, however, that abuse can occur under either interpretation of the sixty-day limit. If the period begins with the filing of the motion for permission to appeal, a court of appeals might choose just to “sit” on the motion without ever ruling, content in the knowledge that after sixty days, the appeal will disappear by operation of law, and the court will never have to consider the merits.

The better view is to trust the integrity of the courts of appeals to recognize the Congressional directive to handle CAFA appeals expeditiously and in good faith. The reading we adopt allows 60 days (or 70 or more, if extended) for the court to consider the actual merits of the certification question, aside from the issue of whether an appeal is justified in the first place as a discretionary matter.

This reading of the statute provides enough time for the orderly filing of the briefs, albeit on a schedule much shorter than that normally used in federal appeals. It also allows, where appropriate, time for oral argument. It is not unreasonable to assume that Congress intended to permit at least this amount of time to ensure thorough review of remand issues.

. . .

In summary, we conclude that in a CAFA appeal under § 1453, the sixty-day period (or any extended period) in which the court of appeals must render judgment runs from the date of entry by the court of appeals of an order granting permission to appeal.

SCOTUS Denies Cert in Case Challenging Multi-State Settlement Class Certification

Yesterday the Supreme Court denied review in King v. Gadson, U.S., No. 05-921. The Questions Presented in the case were as follows:

(1) Can state court, in approving class action settlement, consistent with basic principles of federalism and due process clause of 14th Amendment, exercise jurisdiction over unnamed class members and their claims when: (a) class representative has no standing to assert claims that are common or typical to members of class; (b) named class representative is not member of class, is not entitled to any relief proposed in settlement, and could not herself opt out of class, thus marking her inadequate to represent class; (c) counsel for class plaintiff and class defendants conspired and colluded to compromise claims of real class members; and (d) class definition was switched after certification without informing court and notice of change was never mailed to any member of subject class?

(2) Can state court, in multi-state class action, consistent with due process clause of 14th Amendment and full faith and credit clause of Article IV, Section 1 of Constitution, ignore substantive law of another state whose citizens are included in class when transactions giving rise to nonresidents' claims occurred in non-forum state to which forum state has no connection and whose law governing claims of nonresidents is expressly shown to be substantially different than law of forum state?

SCOTUS Holds SLUSA Preempts Class Action Fraud Suits Brought by Investors Who Merely Held Securities

BNA’s Class Action Litigation (Volume 07 Number 06, Fri., Mar. 24, 2006, Page 194, ISSN 1529-8000) is reporting on Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, --- S. Ct. ---, 2006 WL 694137 (Mar. 21, 2006):

The 1998 Securities Litigation Uniform Standards Act preempts class securities fraud suits not only by purchasers and sellers, but by investors who held on to covered securities, the U.S. Supreme Court concluded . . .. the high court vacated a contrary ruling by the U.S. Court of Appeals for the Second Circuit.

Here's an excerpt from the Syllabus:

(c) Both the class and the securities here are “covered” within SLUSA’s meaning, and the complaint alleges misrepresentations and omissions of material facts. The only disputed issue is whether the alleged wrongdoing was “in connection with the purchase or sale” of securities. Dabit’s narrow reading would pre-empt only those actions in which Blue Chip Stamps’ purchaser-seller requirement is met. Insofar as that argument assumes that the Blue Chip Stamps rule stems from Rule 10b–5’s text, it must be rejected, for the Court relied on “policy considerations” in adopting that limitation, and it purported to define the scope of a private right of action under Rule 10b–5, not to define “in connection with the purchase or sale.” When this Court has sought to give meaning to that phrase in the §10(b) and Rule 10b–5 context, it has broadly required that the alleged fraud “coincide” with a securities transaction, an interpretation that comports with the SEC’s longstanding views. Congress can hardly have been unaware of this broad construction when it imported the phrase into SLUSA. Where judicial interpretations have settled a statutory provision’s meaning, repeating the same language in a new statute indicates the intent to incorporate the judicial interpretations as well. That presumption is particularly apt here, because Congress not only used §10(b)’s and Rule 10b–5’s words, but used them in another provision appearing in the same statute as §10(b). The presumption that Congress envisioned a broad construction also follows from the particular concerns that culminated in SLUSA’s enactment, viz., preventing state private securities class-action suits from frustrating the Reform Act’s objectives. A narrow construction also would give rise to wasteful, duplicative litigation in state and federal courts. The presumption that “Congress does not cavalierly pre-empt state-law causes of action,” Medtronic, Inc. v. Lohr, 518 U. S. 470 , has less force here because SLUSA does not pre-empt any cause of action. It simply denies the use of the class-action device to vindicate certain claims. Moreover, tailored exceptions to SLUSA’s pre-emptive command—for, e.g., state agency enforcement proceedings—demonstrate that Congress did not act cavalierly. Finally, federal, not state, law has long been the principal vehicle for asserting class-action securities fraud claims. Pp. 10–16.

(d) Dabit’s holder class action is distinguishable from a typical Rule 10b–5 class action only in that it is brought by holders rather than sellers or purchasers. That distinction is irrelevant for SLUSA pre-emption purposes. The plaintiffs’ identity does not determine whether the complaint alleges the requisite fraud, and the alleged misconduct here—fraudulent manipulation of stock prices—unquestionably qualifies as a fraud “in connection with the purchase or sale” of securities as the phrase is defined in SEC v. Zandford, 535 U. S. 813 , and United States v. O’Hagan, 521 U. S. 642 . Pp. 16–17.

The full discussion is available to BNA subscribers by clicking here.

D.D.C. Explains Meaning of “Control” in FRCP 34(a)

Per A.S.P.C.A. v. Ringling Brothers, 233 F.R.D. 209 (D.D.C. Feb. 23, 2006) regarding Rule 34:

Rule 34 of the Federal Rules of Civil Procedure permits any party to request the production of documents within the scope of Rule 26(b) and in the “possession, custody or control of the party upon whom the request is served.” Fed.R.Civ.P. 34(a). Control includes documents that a party has the legal right to obtain on demand. Alexander v. FBI, 198 F.R.D. 306, 312 (D.D.C.2000); Tavoulareas v. Piro, 93 F.R.D. 11, 20 (D.D.C.1981). Because a client has the right, and the ready ability, to obtain copies of documents gathered or created by its attorneys pursuant to their representation of that client, such documents are clearly within the client's control. See, e.g., Poole ex rel. Elliott v. Textron, Inc., 192 F.R.D. 494, 501 (D.Md.2000); Poppino v. Jones Store Co., 1 F.R.D. 215, 219 (W.D.Mo.1940) (“It is quite true that if an attorney for a party comes into possession of a document as attorney for that party his possession of the document is the possession of the party.”). Plaintiffs argue that the documents gathered by defendants' counsel for the purpose of cross-examining Rider are in defendants' “control” and, therefore, must be produced. Mot. to Compel at 18. Defendants argue that the documents at issue are not within their control because such documents are work product and the work product privilege belongs to the attorney as well as the client. Memorandum in Opposition to Plaintiffs' Motion to Compel Defendants' Compliance with Plaintiffs' Discovery Requests (“Defs.Opp'n”) at 23. Because defendants have the legal right and the ready ability to access documents generated and collected by their attorneys in the course of this litigation, I find that the documents are within defendants' control for Rule 34 purposes. Accordingly, defendants cannot object to the production of documents assembled by their counsel to impeach Rider on the ground that they were not in defendants' control.

D.D.C. Defines “Relevance” for Rule 26(b)(1) as “Showing of Need"

Per Anton v. Prospect Cafe Milano, Inc., 233 F.R.D. 216 (D.D.C. Feb. 27, 2006) regarding Rule 26(b)(1):

Rule 26(b)(1) authorizes discovery “regarding any matter, not privileged, that is relevant to the claim or defense of any party.” Fed.R.Civ.P. 26(b)(1). The term “relevance” is broadly construed, and “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Id.; Food Lion, Inc. v. United Food & Comm'l Workers Int'l Union, 103 F.3d 1007, 1012 (D.C.Cir.1997); see also Smith v. Schlesinger, 513 F.2d 462, 473 n. 37 (D.C.Cir.1975) (noting that “a party may discover information which is not admissible at trial if such information will have some probable effect on the organization and presentation of the moving party's case”). Put another way, “[a] showing of relevance can be viewed as a showing of need[, as] for the purpose of prosecuting or defending a specific pending civil action, one is presumed to have no need of a matter not relevant to the subject matter involved in the pending action.” Friedman v. Bache Halsey Stuart Shields, Inc., 738 F.2d 1336, 1341 (D.C.Cir.1984). That said, relevancy does not encompass discovery of information with “no conceivable bearing on the case.” Id. (citing 8 Fed. Prac. & Proc.2d § 2008). A trial court enjoys considerable discretion over discovery matters. Id.; United States v. Krizek, 192 F.3d 1024, 1029 (D.C.Cir.1999).

Columbia Law Review Publishes Article on the "Supervisory Power" of the Supreme Court

The Columbia Law Review has just published an Article by Professor Amy Coney Barrett entitled, The Supervisory Power of the Supreme Court, 106 Colum. L. Rev. 324 (2006). Here is the Abstract:

Relying on something it calls "supervisory power" or "supervisory authority," the Supreme Court regularly prescribes rules of procedure and evidence for inferior courts. Both scholars and the Court have treated the Court's exercises of this authority as unexceptional exercises of the inherent authority that Article III grants every federal court to regulate procedure in the course of adjudication. Article III's grant of inherent authority, however, is conventionally understood as permitting a federal court to regulate its own proceedings. When the Supreme Court exercises supervisory power, it regulates the proceedings of other federal courts. More than a reference to every court's inherent authority, therefore, is required to justify the Court's action. If the Supreme Court possesses a unique ability to regulate federal court procedure, it must be because of some unique attribute of the Supreme Court.

This Article explores a justification that may well animate the Court's assertions of supervisory power: the notion that the Court possesses supervisory power by virtue of its constitutional supremacy. Analyzing this justification requires pursuit of two questions that are wholly unexplored in the literature and case law. Does Article III's distinction between supreme and inferior courts operate only as a limit on the way that Congress can structure the judicial department, or does it also operate as a source of inherent authority for the Supreme Court? And assuming that the Court's supremacy grants it inherent authority over inferior courts, is supervisory power over procedure part of the authority granted?

Fifth Circuit Panel Awards Summary Judgment for Non-Moving Party

Per: Robinson v. Aetna Life Ins. Co., --- F.3d ----, 2006 WL 620707 (5th Cir. Mar. 14, 2006):

Although Robinson did not move for summary judgment in the district court, we have the authority to grant judgment in his favor. See Black Warrior Elec. Membership Corp. v. Mississippi Power, 413 F.2d 1221, 1226 (5th Cir.1969); Matter of Continental Airlines, 981 F.2d 1450, 1458 (5th Cir.1993) (“This court has the power to render summary judgment for a nonmoving party ····”) Awarding judgment to a party that did not move for summary judgment below is proper where (1) there is no genuine issue of material fact and (2) the opposing party has had a full opportunity to (a) brief the legal issues and (b) develop a record. See Monumental Life Ins. v. Hayes-Jenkins, 403 F.3d 304, 315 n. 21 (5th Cir.2005).

First, there is no genuine issue of material fact here. We have concluded both that Aetna failed to substantially comply with ERISA procedures and that Aetna abused its discretion by terminating Robinson's benefits. Second, Aetna was required to develop its factual record at the administrative level. See Vega, 188 F.3d at 302. Lastly, Aetna fully briefed the relevant legal issues both before this Court and below. . . .

EDNY Vacates Default Entered against Defendant Who Failed to Answer Amended Complaint that Mooted Defendant's Motion to Dismiss

Per S.E.C. v. Apolant, 411 F.Supp.2d 271 (E.D.N.Y. Jan. 31, 2006):

Rule 55(c) provides, “For good cause shown, the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b).” Fed.R.Civ.P. 55(c). Rule 60(b) authorizes a court to vacate the entry of default on the basis of, among other things, “mistake, inadvertence, surprise or excusable neglect ··· [or if] the judgment is void.” Fed.R.Civ.P. 60(b)(1), (4). Whether to grant a motion to vacate a default is within the sound discretion of the district court. State Street Bank and Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 158 (2d Cir.2004).

In this case the Defendant's failure to answer the amended complaint does not appear to be willful. Instead of filing an answer or renewing the motion to dismiss to address the amended complaint, the Defendant filed a reply brief and argued that the amended complaint failed to cure any defects raised by the motion to dismiss. The procedural tactic that the Defendant employed has support in the law. As explained by a learned treatise, when faced with an amended pleading in response to a motion to dismiss, the Court may either consider the earlier motion as against the amended complaint, or deny the motion if the Court finds that the amendments to the complaint cured the deficiencies raised by the motion. See Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure, § 1476 (2d ed.2005).

Here, the Court took the latter approach and denied the motion to dismiss. Technically, this placed the Defendant in default for failing to properly respond to the Plaintiff's amended complaint. However, the Defendant timely filed a reply to the motion and has continued to expeditiously defend the action. To hold the Defendant in default at this point “would be to exalt form over substance.” Id. Accordingly, for good cause shown, the Court vacates the default and will address the merits of Apolant's latest motion to dismiss.

LA Lawyer Publishes "The Unfairness of the Class Action Fairness Act"

This month's Los Angeles Lawyer has an opinion piece by Jerome Ringler entitled The Unfairness of the Class Action Fairness Act, 29-MAR LALAW 52. The piece is highly critical of the Class Action Fairness Act, which just celebrated its one-year anniversary last month. Here's an excerpt:

FEBRUARY 18, 2005, IS A LEGAL MILESTONE that, years hence, may be remembered for various acts of political folly, misconceptions, and targeted hostility toward select members of the legal profession. That date marks the enactment of the Class Action Fairness Act of 2005 (CAFA), a statute heralded by President Bush and Congress as an antidote to that enemy within, that culprit responsible for all that is purportedly wrong with America--trial lawyers. This legislation owes its origins, in part, to the prevailing assumption that plaintiffs' attorneys, myself included, exert an unnecessary cost on corporations, that we routinely initiate "frivolous" lawsuits against innocent defendants, and that we must be stopped. I understand this misplaced rage, but I also know this particular piece of legislation is unwise and unnecessary. The act complicates things, leaves a number of serious legal issues unanswered, forces both sides to reconsider certain tactics, and may actually leave the court system with even more cases to adjudicate.

Westlaw subcribers can access the piece by clicking here.

Eleventh Circuit Holds that Amendments May Be Made as a Matter of Course Until All Defendants Have Filed Responsive Pleadings

Per Williams v. Board of Regents of University System of Georgia, --- F.3d ----, 2006 WL 561815 (11th Cir. Mar. 9, 2006):

Federal Rule of Civil Procedure 15(a) states that "[a] party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served." Fed.R.Civ.P. 15(a). For purposes of this Rule, a motion to dismiss is not a responsive pleading. Chilivis v. SEC, 673 F.2d 1205, 1209 (11th Cir.1982). If the case has more than one defendant, and not all have filed responsive pleadings, the plaintiff may amend the complaint as a matter of course with regard to those defendants that have yet to answer. Brewer-Giorgio v. Producers Video, Inc., 216 F.3d 1281, 1284 (11th Cir.2000).

. . .

The district court erred in failing to allow Williams to file her first amended complaint as a matter of course. When Williams attempted to file her first amended complaint, Thomas was the only defendant who had filed a responsive pleading. Williams's first amended complaint included additional claims against UGA, the Board of Regents, and UGAA, none of whom had filed a responsive pleading. Therefore, Williams had the right to amend her complaint as a matter of course.

N.D. Cal. Holds That State-Law Based Opt-Out Class Action Not Preempted by FLSA

BNA’s Class Action Litigation (Volume 07 Number 05, Fri., Mar. 10, 2006, Page 148, ISSN 1529-8000) is reporting on Bahramipour v. Citigroup Global Markets, Inc., 2006 WL 449132 (N.D.Cal. Feb 22, 2006):

The Fair Labor Standards Act does not preempt securities brokers from pursuing an opt-out overtime class action under state law even though they are alleging FLSA violations, a federal court in California ruled Feb. 22. . . .

Finding an opt-out class available under the California Unfair Competition Law (UCL)--which prohibits "unlawful, unfair or fraudulent" practices, including those covered by the FLSA . . . the Northern District of California said the congressional intentions of the FLSA collective action were not undermined by permitting a class action applying state law.

BNA Subscribers may read the full article on the case by clicking here.

WD La. Holds that Determining "Significant Relief" for CAFA's Local Controversy Exception Requires Comparison with Relief Sought From Other Defendants

Per Robinson v. Cheetah Transp. 2006 WL 468820 (W.D. La. Feb. 27, 2006):

Plaintiff, Betty Robinson ("Robinson"), originally filed this action in state court on November 28, 2005, as the putative class representative for a class consisting of all persons and businesses that resided or worked in Caldwell Parish on October 7, 2004, and were affected by the closure of the Columbia bridge. The bridge's closure occurred when John E. Gaston, a truck driver and employee of Cheetah Transportation, struck the bridge with a tractor-trailer owned by Kenworth of Jackson. The tractor-trailer's payload consisted of a yellow crane owned by defendant, Union Pacific. Robinson claims that she and the individuals she is suing on behalf of suffered lost income, physical pain and suffering, mental anguish, inconvenience, lost wages, and loss of earning capacity.

. . .

The central dispute in this case involves the second requirement of the "Local Controversy" exception: at least one defendant is a defendant from whom members of the putative class seek significant relief and who is a citizen of the state in which the action is filed. While Liberty contends that the relevant defendant, Gaston, is not a Louisiana citizen, its primary argument is that the putative class does not seek significant relief from him. The undersigned agrees.

Although no case law appears to address the meaning of "significant relief" and the role it plays in determining whether to retain jurisdiction over class actions, CAFA's legislative history, namely the Senate Report, sheds some light on what Congress intended. Liberty cites two sentences of the report stating that a significant defendant must be a defendant "from whom significant relief would be sought by the plaintiff class viewed as a whole." S.Rep. No. 109- 14, at 40 (2005), as reprinted in 2005 U.S.C.C.A.N. 3, 38. A careful reading of the section of the report containing these quotes, however, reveals that they relate more to whether only a subset of the class seeks relief from the defendant, rather than to the actual amount of relief the class as whole, seeks from an in-state defendant. See id. Insight on the latter issue is found in an example the Senate used to illustrate when the "Local Controversy" exception would not apply. See id. at 41. There, the Senate described a products liability class action suit on behalf of Florida residents against an out-of-state automobile manufacturer and a few in-state dealers. In finding that this case did not involve an in-state defendant from whom significant relief was sought, the Senate stated, "Even if the plaintiffs are truly seeking relief from the dealers, the relief is just small change compared to what they are seeking from the manufacturers." Id. As this statement makes clear, whether a putative class seeks significant relief from an in-state defendant includes not only an assessment of how many members of the class were harmed by the defendant's actions, but also a comparison of the relief sought between all defendants and each defendant's ability to pay a potential judgment.

Under the inquiry described above, Gaston, the driver of the tractor-trailer, is not a defendant from whom significant relief is sought. As Liberty notes, Gaston is the only individual named as a defendant in this suit; the other defendants are the following out-of-state national companies: Cheetah Transportation, a corporation engaged in the trucking industry; Union Pacific Railroad, a major railroad corporation; Kenworth of Jackson, a tractor-trailer dealer; and Liberty, a prominent insurance company. Gaston is, as the Senate stated in its report, "just small change" in comparison to what the putative class is seeking from the other defendants. As the driver of the tractor-trailer, Gaston's alleged negligence may have substantially contributed to the class members' damages; however, it does not follow that the class members seek significant relief from him. With an amount in controversy of at least $5,000,000, the plaintiffs will seek most of that relief from those who are capable of paying it: the corporate defendants. Furthermore, the class members' failure to execute service of process on Gaston as of the date of this ruling is additional circumstantial evidence that they do not seek significant relief from him. See Document No. 3. As the party with the burden of proof at this point, Robinson, the putative class representative, has failed to provide any evidence that significant relief is sought from Gatson. Therefore, the "Local Controversy" exception to this Court's jurisdiction under CAFA does not apply, and the plaintiff's Motion to Remand is DENIED.

N.D. Ill. Requires Individual Notice to Potential Class Members to Eliminate Confusion Arising from Existence of a Related Action

BNA’s Class Action Litigation (Volume 07 Number 05, Fri., Mar. 10, 2006, Page 149, ISSN 1529-8000) is reporting on In re Sears, Roebuck & Co. ERISA Litigation, No. 02 C 8324 (N.D. Ill. Feb. 5, 2006):

Potential class members in a suit challenging the Sears, Roebuck & Co. 401(k) plan must receive individual notices about the pending action, a federal court in Illinois held Feb. 15 (In re Sears, Roebuck & Co. ERISA Litigation, N.D. Ill., No. 02 C 8324, 2/15/06). . . even though the cost of such notice "would be complex and expensive."

. . .

The court agreed to require individual class notice because a class notice had already been disseminated in a related securities case against Sears. According to the court, class members needed to be informed of the distinct nature of the ERISA litigation so as to eliminate any confusion regarding the class members' retirement account losses in the two cases.

BNA Subscribers may read the full article on the case by clicking here

EDNY Holds CAFA Action Commences with New Complaint When Court Lacked Jurisdiction over Original Case; Addresses Claim Splitting & Abstention As Well

Per Steinberg v. Nationwide Mut. Ins. Co., --- F.Supp.2d ----, 2006 WL 538553 (Mar. 7, 2006 E.D.N.Y.,2006):

The Plaintiff commenced a class action against Nationwide nearly identical to the instant action on October 13, 1999, in the Supreme Court of the State of New York, Suffolk County. On November 24, 1999, Nationwide removed the action to this Court pursuant to 28 U.S .C. §§ 1441 and 1446.

. . .

Following this Court's certification of the class action, Nationwide filed a petition under Fed.R.Civ.P. 23(f) for leave to appeal the order as to class certification to the Second Circuit. The Second Circuit elected not to hear the appeal. Instead, on December 30, 2004, it ruled, sua sponte, that there was no federal subject matter jurisdiction. . . . On March 16, 2005, following the Second Circuit's instructions, this Court remanded the case to the state court and dismissed the pending federal case. At the present time, that action ("Steinberg I") remains pending in New York Supreme Court.
On July 15, 2005, the Plaintiff filed the instant action, which is parallel to the pending state court action in form and in substance, in that it is based on the same transactions and occurrences; alleges identical claims; and seeks identical relief. However, Steinberg asserts that in this action, contrary to the original case for which there was no federal court jurisdiction, the new case was properly filed in federal court pursuant to the Class Action Fairness Act of 2005

. . .

[A. The Commencement Issue]

. . . Nationwide concedes that the present complaint was filed in federal court after the enactment of CAFA. Nationwide argues, however, that this action concerns the same parties, claims, and relief at issue in Steinberg I, so that the action "must be deemed to have commenced on the date Steinberg I was first filed in state court." Nationwide asserts that any other interpretation of CAFA would contravene the clear and unambiguous statutory language establishing CAFA as prospective in effect. Nationwide also contends that if the re-filing of pending state court cases in federal court was sufficient to invoke federal subject matter jurisdiction under CAFA, countless class actions initiated in the months and years prior to the enactment of CAFA could suddenly be introduced into the federal court system.

A similar issue was encountered in Price v. Berkeley Nutraceuticals, Inc. No. 05-73169, 2005 WL 2649205 (E.D.Mich. Oct.17, 2005). In that case, the plaintiffs filed a class action suit in Michigan state court in 2004, claiming that the defendants misrepresented the efficacy of their products and engaged in unauthorized billing. Id., at *1. The defendants timely removed the case to federal court based on case law that was subsequently overturned. Id., at *2. Apparently becoming unhappy with the federal litigation arena, the defendant sought a remand to state court. Id. Instead of opposing removal, the plaintiffs voluntarily dismissed their case on April 8, 2005, based on their belief that the recently enacted CAFA would provide them with federal jurisdiction in a renewed action. The next day, on April 9, 2005, the plaintiffs filed a new complaint containing virtually all of the same factual allegations as the complaint in the prior dismissed case, and asserting diversity jurisdiction under CAFA. Id. at *4. In moving to dismiss the second action, the defendant Berkeley asserted identical arguments to the ones raised by Nationwide in the instant case, namely that the plaintiffs newly filed action should be deemed commenced when the plaintiffs filed the first case in state court in 2004. Id. The court rejected this argument, stating that the date of the new complaint must control, particularly under the circumstances "where the original case should not have been in federal court in the first place." Id.

The court finds the reasoning in Price to be persuasive. Under Rule 3 of the Federal Rules of Civil Procedure, "A civil action is commenced by filing a complaint with the court." Id. Here, the Plaintiff properly "commenced" a new and independent action on July 15, 2005. The Court finds no compelling reason under CAFA, or any other federal law, to dismiss the Plaintiff's action solely based on the similar action pending in state court. The mere fact that the plaintiffs have a similar suit pending in state court may be grounds, based on principles of comity, for this Court to refrain from proceeding or to dismiss the action based on the doctrine of abstention, but it is not a separate ground for dismissal, either under CAFA or for lack of subject matter jurisdiction. The court therefore finds that, for the purposes of CAFA, the present suit was "commenced" on July 15, 2005, and this court has diversity jurisdiction over the action under 28 U.S.C. § 1332(d)(2).

. . .

With the principle of separate jurisdictional sovereignty and comity in mind, the Court finds that the existence of a parallel state action is not a ground to dismiss the Plaintiff's suit, which was properly commenced under CAFA. As in Price, the real issue is whether the case should be stayed under the principles of comity due to the parallel proceeding in the New York State Supreme Court. See Associated Dry Goods Corp. v. Towers Financial Corp., 920 F.2d 1121, 1126 (2d Cir.1990). Accordingly, the Defendant's motion to dismiss for lack of subject matter jurisdiction is denied.

B. As to Claim Splitting

Nationwide characterizes the Plaintiffs' complaint in this case as impermissible claim splitting because it is nearly identical to the complaint in the pending state court action. The argument misinterprets the rule against claim splitting. The rule "prohibits a plaintiff from prosecuting its case piecemeal, and requires that all claims arising out of a single wrong be presented in one action." Coleman v. B.G. Sulzle, Inc., 402 F.Supp.2d 403 (N.D.N.Y.2005). However, claim splitting does not apply to parallel state and federal actions. Courts have consistently declared that "[w]here there is concurrent jurisdiction, however, it is permissible for a plaintiff to file parallel state and federal actions simultaneously." Rutledge v. Arizona Board of Regents, 859 F.2d 732, 736 (9th Cir.1988), quoting Attwood v. Mendocino Coast Dist. Hospital, 886 F.2d 241, 245 (9th Cir.1989). Rather, the claim splitting doctrine applies to an attempt to "maintain two actions on the same subject in the same court, against the same defendant at the same time." Coleman, 402 F.Supp.2d at 403. Accordingly, the proper question in a case involving parallel state and federal actions is whether abstention under Colorado River is appropriate.

C. As to Abstention

. . .

In Colorado River, the Supreme Court held that in "exceptional" circumstances, a federal district court may stay or dismiss an action solely because of the pendency of similar litigation in state court, given fundamental principles of "[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation." 424 U.S. at 817,96 S.Ct. 1236, 47 L.Ed.2d 483; see Sheerbonnet Ltd. v. American Express Bank Ltd., 17 F.3d 46 (2d Cir.1994); Alliance of American Insurers v. Cuomo, 871 F.2d 591, 603 (2d Cir.1989). "Before the Colorado River doctrine can be applied, the court must first determine that the concurrent state and federal actions are actually parallel." Price, 2005 WL 2649205, at *5; see also Crawley v. Hamilton County Comm'rs, 744 F.2d 28 (6th Cir.1984); Bernstein, 850 F.Supp. at 182.

In this case, as discussed above, it is clear that the state and federal complaints are nearly identical. Moreover, both parties have identified the actions as "parallel actions" throughout their motion papers. Having found that the actions are parallel, the Court must carefully balance several factors in order to determine whether to abstain in this case. The relevant factors to be considered in determining whether federal abstention is appropriate in light of parallel state litigation include the following: "(1) assumption by federal or state court of jurisdiction over any res or property; (2) whether the federal forum is any less convenient to the parties than the state forum; (3) whether there is danger of piecemeal litigation; (4) the order of the two suits; (5) whether federal law provides the rule of decision on the merits; and (6) whether the state court is inadequate to protect the plaintiff's rights." Bernstein v. Hosiery Mfg. Co. of Morganton, Inc., 850 F.Supp. 176, 182 (E.D.N.Y.1994) (quoting Moses A. Cone Memorial Hospital v. Mercury Constitution. Corp., 460 U.S. 1, 14, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983)); see also Arkwright-Boston Mfrs. Mut. Ins. Co. v. City of New York, 762 F.2d 205, 210 (2d Cir.1985). Courts may also consider "the vexatious and reactive nature of either the federal or state litigation" as part of its analysis. Bernstein, 850 F.Supp. at 185.

The "burden of persuasion rest[s] on the party opposing the exercise of federal jurisdiction." Arkwright-Boston, 762 F.2d at 210. And "[o]nly the clearest of justifications, constituting 'exceptional' circumstances, will warrant ..." Colorado River abstention. Colorado River, 424 U.S. at 813; see Alliance of American Insurers, 871 F.2d at 603; Sheerbonnet, 17 F.3d at 49.

. . .

In weighing the Colorado River factors, the Court finds that there exists no "exceptional" circumstances that warrant the Court's dismissal of this case under Colorado River. The
Defendant's motion to abstain is therefore denied.

N.D. Tex. Rejects Attempt to Convert Suit to Limited-fund Class Action Due to Inadequate Claim and Fund Valuations

BNA’s Class Action Litigation (Volume 07 Number 05, Fri., Mar. 10, 2006, Page 147, ISSN 1529-8000) is reporting on Klein v. O'Neal, Inc.,2006 WL 325766 (N.D.Tex. Feb 13, 2006):

Opt-out class plaintiffs in an action over a vitamin E solution given to premature babies during the 1980s may not convert the suit into a limited-fund class action, a federal trial court ruled Feb. 13. . . .

The plaintiffs failed to establish the requisites for limited-fund certification under Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999). . . . Specifically, they could not reliably value the unliquidated claims, and could not establish the value of the fund.

BNA Subscribers may read the full article on the case by clicking here.

E.D. Pa. Holds That Dismissal of Party Who Removed Under CAFA Does Not Permit Remand

BNA’s Class Action Litigation (Volume 07 Number 05, Fri., Mar. 10, 2006, Page 147, ISSN 1529-8000) is reporting on Robinson v. Holiday Universal, Inc., 2006 WL 470592 (E.D.Pa. Feb. 23, 2006):

Plaintiffs' dismissal of the defendant that removed a suit to federal court does not entitle them to a remand order, a federal court in Pennsylvania said Feb. 23. . . .

Whether to remand is determined by the status of the case at the time the removal petition is filed, and is not reassessed if the removing defendant is dismissed. . . . [The Court] declined to remand a consumer case removed under the Class Action Fairness Act.

BNA Subscribers may read the full article on the case by clicking here.

Second Circuit Finds No Subject Matter Jurisdiction over Claims against Republic of Poland re Mistreatment of Jews

Per Garb v. Republic of Poland, --- F.3d ----, 2006 WL 515500 (2d Cir. Mar. 3, 2006):

Plaintiffs appeal from a judgment of the United States District Court for the Eastern District of New York (Edward R. Korman, Chief Judge ) dismissing their claims against the Republic of Poland and the Ministry of the Treasury of Poland for lack of subject matter jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(1). See Garb v. Republic of Poland, 207 F.Supp.2d 16 (E.D.N.Y.2002). Plaintiffs' claims, which at the pleadings stage we accept as true in all respects, see, e.g., Hallode v. Bonner, 387 F.3d 147, 150 (2d Cir.2004), arise from the mistreatment of Jews in Poland after the Second World War--mistreatment that Chief Judge Korman properly described as "horrendous" Garb, 207 F.Supp.2d at 17. In particular, plaintiffs challenge the Polish Government's expropriation of their property following the asserted enactment of post-war legislation designed for that purpose. Id. at 18.

. . . Despite the severe injuries asserted by plaintiffs, the capacity of United States courts to exercise jurisdiction over plaintiffs' claims hinges on a legal inquiry narrowly circumscribed by statute. It is well settled that the only source of subject matter jurisdiction over a foreign sovereign in the courts of the United States is the Foreign Sovereign Immunities Act of 1976 ("FSIA"), 28 U.S.C. §§ 1330, 1602-1611, which codifies several exceptions to the long-established doctrine of foreign sovereign immunity.

. . . [T]he question of the FSIA's retroactivity has been resolved in the affirmative, see Republic of Austria v. Altmann, 541 U.S. 677, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004). Accordingly, we now apply the FSIA retroactively to claims arising from events that took place prior to that statute's 1976 enactment.

We hold that none of the FSIA's exceptions to foreign sovereign immunity applies here and that subject matter jurisdiction is therefore lacking. First, we hold that plaintiffs have not satisfied the "commercial activity" exception of the FSIA, 28 U.S.C. § 1605(a)(2), because (a) a state's confiscation of property within its borders is not a "commercial" act, (b) the subsequent commercial treatment of expropriated property is not sufficiently "in connection with" the prior expropriation to satisfy the "commercial activity" exception, and (c) we decline to credit plaintiffs' recharacterization of what are in essence "takings" claims as "commercial activity" claims. Second, we hold that plaintiffs have not satisfied the "takings" exception of the FSIA, 28 U.S.C. § 1605(a)(3), because (a) plaintiffs seek to recover property that is not "present in the United States," (b) in such circumstances, plaintiffs must show that the property "is owned or operated by an agency or instrumentality of the foreign state," (c) plaintiffs allege that the property is "owned by" the Ministry of the Treasury of Poland, Appellants' Br at 15, and (d) the Ministry of the Treasury of Poland is not an "agency or instrumentality" of the Republic of Poland because its "core function" is governmental rather than commercial.

Eleventh Circuit Holds that Claim Must Be Alleged in Complaint; Discussion in Deposition Insufficient

Per Brown v. Snow, --- F.3d ----, 2006 WL 431721 (11th Cir. Feb. 24, 2006) regarding Rule 8(a):

Brown's second claim of retaliation by termination was not properly before the district court. Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Brown's complaint did not allege that Brown was terminated in retaliation for his sexual harassment charges filed with the EEOC. Although Brown had not been fired when he filed his complaint, Brown never amended his complaint to include a claim of retaliation based on his termination. Brown argues that he discussed his claim of retaliation based on his termination extensively in his deposition testimony, but the discussion of a potential claim in a deposition does not satisfy the requirement of Rule 8(a). Coon v. Ga. Pac. Corp., 829 F.2d 1563, 1568 (11th Cir.1987). The district court correctly refused to address this allegation of retaliation.

Second Circuit Discusses Difference between Waiver and Forfeiture; Declines to Consider Forfeited SOL Defense

Per Patterson v. Balsamico, --- F.3d ----, 2006 WL 459260 (2d Cir. Feb. 27, 2006) regarding Rule 8(c):

Balsamico contends that Patterson's state law claim for intentional infliction of emotional distress, on which virtually all of the compensatory damages were awarded, should have been dismissed as time barred. . . .

Patterson responds that this defense was never raised in the district court and was therefore waived. See Nat'l Mkt. Share, Inc. v. Sterling Nat'l Bank, 392 F.3d 520, 526 (2d Cir.2004) (if an affirmative defense required to be pleaded under Fed.R.Civ.P. 8(c) is neither pleaded nor tried with the parties consent, the defense is usually waived). As Balsamico notes, however, the defense was raised in the Answer and in Paragraph 10 of Gorman's Affidavit dated August 29, 2002 in support of the defendants' original motion for summary judgment. This defense was therefore not “waived,” because “the term ‘waiver’ is best reserved for a litigant's intentional relinquishment of a known right.” Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 61 (2d Cir.1999).

We conclude, however, that this defense was forfeited by Balsamico's failure to pursue it during the earlier appeal or after remand. “Forfeiture” is the failure to make the timely assertion of a right. Id.“Where a litigant's action or inaction is deemed to incur the consequence of loss of a right, or, as here a defense, the term ‘forfeiture’ [rather than waiver] is more appropriate.” Id.Although the issue of the statute of limitations was raised as a basis for dismissing the intentional infliction of emotional distress claim in the initial motion for summary judgment, the district court never reached that defense. Having dismissed all of the federal claims, the district court declined to exercise supplemental jurisdiction over the state law claims and dismissed them without prejudice. . . . Balsamico concedes that, although the district court had not ruled upon it, his trial attorney, Diodati, never raised the issue before the district court after the case was remanded. (Appellant Br. at 24.). . . .

Until this appeal, therefore, the defense was last raised in Gorman's August 29, 2002 affidavit, before the prior appeal. Although ample opportunity existed to reassert the limitations defense throughout the pre-trial activity in the case, the trial itself, and litigation of the post-trial motions, no reference was made to it. Balsamico therefore asks this Court to pass on an affirmative defense that was never determined in the trial court. Due to the extensive opportunities to litigate the statute of limitations issue that were foregone, we conclude that Balsamico abandoned this defense to Patterson's intentional infliction of emotional distress claim. Hamilton, 197 F.3d at 61.

. . . In this case, however, we decline to reach the statue of limitations issue because we conclude that there is no justification for the failure to pursue it after remand, at a time when the issue could have been resolved. We also cannot say that the jury would have, in the absence of this state law claim, awarded only nominal damages on Patterson's civil rights claims. . . . Because of this uncertainty, vacating the judgment on the intentional infliction of emotional distress claim would present a substantial “ ‘risk of prejudice to” 'Patterson. Krumme, 238 F.3d at 142 (quoting Amcel Corp. v. Int'l Exec. Sales, 170 F.3d 32, 36 (1st Cir.1999)). This risk of prejudice is a sufficient basis to decline to consider this forfeited defense.

Foreign Intelligence Surveillance Act (FISA) Court Rules Take Effect

The rules governing all proceedings in the Foreign Intelligence Surveillance Court took effect on February 17, 2006. The rules may be accessed by clicking the link, http://www.uscourts.gov/rules/FISC_Final_Rules_Feb_2006.pdf.

Fourth Circuit Holds that SOL Defense Requires Individual Determinations that Prevent Class Certification

BNA’s Class Action Litigation (volume 07 Number 04, Fri., Feb. 24, 2006, Page 114, ISSN 1529-8000) is reporting on Thorn v. Jefferson-Pilot Life Ins., Co., --- F.3d ----, 2006 WL 335892 (4th Cir. Feb. 15, 2006):

A suit alleging an insurance company over a 60-year period charged more than 1 million black policyholders higher premiums than white policyholders for similar life insurance policies cannot be maintained as a class action, the U.S. Court of Appeals for the Fourth Circuit held Feb. 15. . . .

The insurer's statute of limitations defense requires individual determinations that cannot be resolved on a classwide basis under Fed. R. Civ. P. 23(b)(3), Judge Karen J. Williams explained. The court also held that the insureds' request for equitable relief in the form of restitution cannot be certified for class treatment under Rule 23(b)(2).

S.D. Texas Holds that Amended Complaint Adding New Defendant Does Not "Commence" New Suit Under CAFA

BNA’s Class Action Litigation Report (Volume 07 Number 04, Friday, Feb. 24, 2006, Page 119 ISSN 1529-8000) is reporting on Werner v. KPMG, LLP, --- F.Supp.2d ----, 2006 WL 295394 (S.D. Tx. Feb. 7, 2006):

An amended complaint adding new defendants to a class action did not commence a new suit for Class Action Fairness Act purposes because the new parties had already involved themselves in the litigation, a federal court in Texas said Feb. 7. . . .

[The Court interpreted] commencement under a complex Texas law allowing designation of "responsible third parties" [per Tex. Civ. Prac. & Rem. Code Ann. § 33.004, holding] the new defendants had become parties to the case prior to both the plaintiffs' amended pleading filed March 7, 2005, and the Feb. 18, 2005, enactment of CAFA.

Subscribers may view the full article by clicking here.

Thomas Posts Article Challenging the Constitutionality of Summary Judgment

Professor Suja A. Thomas has recently posted her article entitled Why Summary Judgment is Unconstitutional on SSRN. Here is an excerpt from the Introduction:

Summary judgment is unconstitutional. I understand that this assertion will face resistance from many, including the numerous federal judges and defense lawyers who have come to rely on the device. The procedure is well-entrenched in our federal courts through its ubiquity and lengthy history. Nevertheless, I will show that summary judgment fails to preserve a civil litigant’s right to a jury trial under the Seventh Amendment.

Those interested in reading this article may download it from SSRN by clicking http://papers.ssrn.com/sol3/papers.cfm?abstract_id=886363.

Second Circuit Requires COA For Appeals of Denied Rule 59(e) Motion When Underlying Judgment Denies Habeas Corpus Petition

Per Jackson v. Albany Appeal Bureau Unit, --- F.3d ----, 2006 WL 406309 (2d Cir. Feb. 8, 2006):

Does Jackson require a [certificate of appealability (COA)], pursuant to § 2253(c)(1), in order to appeal from the denial of his Rule 59(e) motion to alter or amend the judgment dismissing his § 2254 petition? In Kellogg v. Strack, we held that the COA requirement of § 2253(c)(1) applies to an appeal from the denial of a Rule 60(b) motion seeking relief from a judgment denying a habeas petition. 269 F.3d 100, 103 (2d Cir.2001). The Kellogg court reasoned that the evident Congressional intent of § 2253(c)(1) is to weed out unmeritorious appeals taken from denials of habeas petitions; that “it would be rather anomalous for Congress” to have intended that appeals be allowed from the denial of Rule 60(b) motions without the same scrutiny; and that the interest served by the COA requirement-relieving the state and the court system of the burdens resulting from the litigation of insubstantial appeals-is served by the application of that requirement to appeals from orders denying post-judgment relief. Id.

These rationales apply with equal force to Rule 59(e) motions. We therefore conclude that the § 2253(c)(1) COA requirement applies to appeals from an order denying a Rule 59(e) motion when the underlying judgment is a denial of a § 2254 petition.