Tuesday, October 31, 2006

Third Circuit Joins Ninth, Tenth and Eleventh Circuits in Finding that “Not Less than Seven Days” Language in CAFA is Typographical Error

BNA’s U.S. Law Week, Vol. 75, No. 15 (Oct. 24, 2006) reported on the recent Third Circuit case Morgan v. Gay, --- F.3d ---, 2006 WL 2938309 (3d. Cir. Oct. 16, 2006). Here is an excerpt from Judge Smith’s opinion:

The issue that we now address is whether 28 U.S.C. § 1453(c)(1), which states that a federal appellate court "may accept an appeal" from a remand order "if application is made to the court of appeals not less than 7 days after entry of the order," should be interpreted by this Court to mean "not more than 7 days after entry of the order." Because the uncontested legislative intent behind § 1453(c) was to impose a seven-day deadline for appeals, we conclude that the statute as written contains a typographical error and should be read to mean "not more than 7 days."

. . .

For the vast majority of ambiguous statutory provisions . . . relying on legislative history to discern legislative intent should be done with caution, if at all. This principle becomes even stronger when the judiciary seeks to read an unambiguous statutory term as its own antonym. See United States v. One "Piper" Aztec "F" De Luxe Model 250 PA 23 Aircraft Bearing Serial No. 27-7654057, 321 F.3d 355, 359 (3d Cir.2003) (stating that "[o]ur task is to give effect to the will of Congress, and where its will has been expressed in reasonably plain terms, that language must ordinarily be regarded as conclusive") (quoting Negonsott v. Samuels, 507 U.S. 99, 104, 113 S.Ct. 1119, 122 L.Ed.2d 457 (1993)). However, in that rare instance where it is uncontested that legislative intent is at odds with the literal terms of the statute, then a court's primary role is to effectuate the intent of Congress even if a word in the statute instructs otherwise.

Section 1453(c)(1) is one such rare instance. . . . [see] S. Rep. 109-14, at 49 (2005). This intention to prevent undue delay can be seen not only in the statute's legislative history, but also in § 1453(c)(2), which instructs an appellate court that it must dispose of the appeal within 60 days.

In addition to legislative history, the deleterious implications of applying § 1453(c)(1) as written also provides evidence of a typographical error by Congress. As written, § 1453(c)(1) would grant plaintiffs and defendants the ability to potentially abuse the litigation process because the party who loses on the district court's remand ruling could strategically wait to appeal the remand decision at any time pre-trial. Because the pre-trial stage of class action cases usually lasts many months or even years, and because many pre-trial rulings set the stage for how the trial will play out, extending the § 1453(c)(1) appeal through this entire process contravenes the uncontested intent of the statute.

The Eleventh Circuit in Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir.2006), makes a similar point. If the statute is applied as written, "there would be a front-end waiting period (an application filed 6 days after entry of a remand order would be premature), but there would be no back-end limit (an application filed 600 days after entry of a remand order would not be untimely)." Id. at 1326. See also Amalgamated Transit Union Local 1309, AFL-CIO v. Laidlaw Transit Servs., Inc., 435 F.3d 1140, 1146 (9th Cir.2006) (stating that the result would be "entirely illogical" if a court "requir[ed] a party to wait seven days before seeking to appeal an order granting or denying a motion to remand, and then allow[ed] that party to seek appellate review at any time in the future after the period has passed").

It should come as no surprise that all three circuits to have examined this question have also found that § 1453(c)(1) should not be literally applied. See Amalgamated, 435 F.3d at 1146; Miedema, 450 F.3d at 1326; Pritchett v. Office Depot, Inc., 420 F.3d 1090, 1093 n. 2 (10th Cir.2005) ( "Given Congress' stated intent to impose time limits on appeals of class action remand orders and the limited availability of appeals prior to the statute's enactment, we can think of no plausible reason why the text of [the] Act would instead impose a seven-day waiting period followed by a limitless window for appeal."). . . . We therefore read "not less than" as "not more than" in accord with the intent of Congress.

Monday, October 30, 2006

LII Bulletin Previews Jones v. Michigan Dept. of Corrections & Williams v. Overton Consolidated Oral Argument to Occur Before Supreme Court October 30

Cornell’s LII Bulletin has posted the following preview of the consolidated oral argument slated to take place in Jones v. Michigan Dept. of Corrections (05-7058) and Williams v. Overton (05-7142) before the Supreme Court:


Jones v. Michigan Dept. of Corrections (05-593)
Williams v. Overton (05-7142)
Oral Argument Date: October 30, 2006

Lorenzo Jones and Timothy Williams both filed suit against the Michigan Department of Corrections on the grounds that the treatment they received in jail violated their Constitutional civil rights. The Circuit Court held that neither plaintiff fulfilled their requirements to totally exhaust available administrative remedies under 42. U.S.C. § 1997e of the PLRA. The Circuit Court held that Jones failed the exhaustion requirement because he failed to either describe or attach proof of how he exhausted administrative remedies in his complaint. See Jones v. Bock, 135 Fed at 839. Although Williams did attach proof of exhaustion to his complaint, the Circuit Court held that he still failed the PLRA’s exhaustion requirement because he did not specifically name the defendant in his initial grievance filings with prison officials. See Williams v. Overton, 136 Fed at 862. In these consolidated cases, Petitioners argue that the Circuit Court's holdings amount to judicially-created pleading requirements that are inconsistent with the PLRA’s text, the Federal Rules of Civil Procedure, and judicial norms. Respondents maintain that the PLRA instituted a “new regime” for inmate Civil Rights Act suits and that the text and structure of the PLRA require the Circuit Court’s heightened pleading requirements. See Brief for Respondents at 27-28. How the Supreme Court decides these condensed cases will reflect its view of the correct balance of burden between inmate plaintiffs and the judiciary. These cases will either require prisoners to be more vigilant in asserting their own civil rights or require the judiciary to be more active in defending prisoners’ rights.

The full preview is available here.

Friday, October 27, 2006

LII Bulletin Previews Osborn v. Haley Oral Argument to Occur Before the Supreme Court October 30th

Cornell’s LII Bulletin has posted the following preview of the oral argument slated to take place in Osborn v. Haley (05-593) before the Supreme Court:


Osborn v. Haley (05-593)
Oral Argument Date: October 30, 2006

Pat Osborn sued Barry Haley, a United States Forest Service manager, in state court, alleging that Haley had influenced her employer, Land Between the Lakes Association, to fire her and that, in so doing, Haley had acted outside the scope of his employment. Pursuant to the Westfall Act, the United States Attorney General certified that Haley was acting within the scope of his employment and successfully removed the case to federal district court. Once there, the United States denied that Haley had interfered with Osborn’s employment and proposed to substitute itself for Haley. The district court, however, assumed the veracity of Osborn’s allegations and refused substitution, remanding the action to state court. The Sixth Circuit Court of Appeals subsequently reversed, ruling that the lower court must resolve the factual disputes underlying the scope question and that the Westfall Act forecloses remand to the state court. The Supreme Court’s decision in this case will have significant implications for plaintiffs seeking to bring suit against federal employees and will likewise affect the way that the federal government and its employees respond to such suits.

The full preview is available here.

Thursday, October 26, 2006

Second Circuit Applies Younger Abstention Doctrine in Affirming Dismissal of Vexatious Litigant's Sanctions Appeal

Per Kaufman v. Kaye, --- F.3d ---, 2006 WL 2873043 (2d Cir. Oct. 10, 2006):

. . . Kaufman . . . notes that a $10,000 sanction was imposed on him by the Second Department for pursuing a frivolous appeal. This fine was imposed, according to Kaufman, "because the panel was not neutral and was biased against [him]."

Kaufman's complaint sought: (i) a declaration that the system for assigning cases among panels of judges in the Second Department of the Appellate Division violates the Due Process and Equal Protection Clauses of the Fourteenth Amendment; (ii) an injunction requiring the New York state legislature to establish a new system of assigning appeals in the Second Department; (iii) vacatur of a number of Second Department decisions adverse to Kaufman; and (iv) vacatur of sanctions the Second Department has imposed on him.

Judge Trager granted appellees' motion to dismiss the complaint. He held that Kaufman's request for reversal of previously rendered decisions of the Second Department was barred by the Rooker-Feldman doctrine, see District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923), and that his challenge to the Second Department's procedures failed because the federal Due Process Clause does not require random assignment of judges. Judge Trager also noted that, if the cases were purposely assigned to particular justices, doing so was reasonable because "the justices know the underlying factors of the cases and can more quickly dispose of a plaintiff's motion." Kaufman v. Kaye, 2005 WL 1923561 at *4 (E.D.N.Y.2005).

Kaufman brought the present appeal. Counsel for Kaufman explained at oral argument that he now seeks only a declaratory judgment that the non-transparent, non-random assignment procedures in the Second Department violate the Due Process and Equal Protection Clauses of the Fourteenth Amendment and an injunction requiring the State of New York to establish a new system for assigning appeals in the Second Department.

Even the relief now sought by Kaufman would be so intrusive in the administration of the New York court system that we must, based on applicable precedent, abstain. Under a controlling decision of the Supreme Court, federal courts may not entertain actions, like the present one, that seek to impose "an ongoing federal audit of state ... proceedings." O'Shea v. Littleton, 414 U.S. 488, 500, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974). In O'Shea, the plaintiffs sought injunctive relief against the allegedly racially discriminatory administration of the criminal justice system in an Illinois county. Id. at 491-92. The Court held in part that "an injunction aimed at controlling or preventing the occurrence of specific events that might take place in the course of future state criminal trials" would lead to the precise federal interference in state judicial proceedings that Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), was designed to prevent. 414 U.S. at 500.


We see little difference between the relief sought here and that sought in O'Shea . . . . To be sure, as appellant argues, the relief he now seeks in the federal courts would, if granted, leave "the state judiciary . . . free to craft a remedy in the first instance." Appellant's Reply Br. At 27. However, any remedy fashioned by the state would then be subject to further challenges in the district court. Appellant--or any state court litigant dissatisfied with the panel of judges assigned to his or her appeal--could raise compliance issues under the putative federal injunction claiming that the state court's chosen remedy violated the Constitution or the terms of that injunction. Such challenges would inevitably lead to precisely the kind of "piecemeal interruptions of ... state proceedings" condemned in O'Shea. In short, we cannot resolve the issues raised here as to present assignment procedures without committing to resolving the same issues as to the remedy chosen by the state and as to the subsequent case-by-case implementation of the assignment procedures in the Second Department. This is exactly what O'Shea forbids.

Wednesday, October 25, 2006

LII Bulletin Previews Philip Morris USA Inc. v. Williams Oral Argument to Occur Before the Supreme Court October 31st

Cornell’s LII Bulletin has posted the following preview of the oral argument slated to take place in Philip Morris USA Inc. v. Williams (05-1256) before the Supreme Court:


Philip Morris USA Inc. v. Williams (05-1256)
Oral Argument Date: October 31, 2006

Mayola Williams brought suit against Philip Morris U.S.A. alleging that Philip Morris fraudulently and negligently caused the death of her husband, who smoked Philip Morris cigarettes for over forty years. The Oregon Supreme Court affirmed a trial jury’s punitive damages award of $79.5 million. Philip Morris contends that the punitive damages award was unconstitutionally excessive because it was not reasonably related to Mr. Williams’ injuries. Williams argues that the Oregon Supreme Court was within its discretion to affirm the trial jury’s punitive damages award because the award conformed with many of the guidelines for determining reasonable damages, and those guidelines are the most important factor. This decision will impact punitive damages calculation in product liability and other tort cases.

The full preview is available here.

Tuesday, October 24, 2006

D. Delaware Bankruptcy Court Discusses Permissive Abstention Under 28 U.S.C. § 1334(c)(1); Declines to Abstain

Per In re RNI Wind Down Corp., 348 B.R. 286 (D. Del. Aug. 23, 2006):

This controversy arises from a series of derivative suits that were filed between August 2002 and March 2004 in the Superior Court of California and the United States District Court for the Northern District of California (the "District Court") against Riverstone Networks, Inc. ("RNI") and its directors and officers.

[T]his Court has authority under 28 U.S.C. § 1334(c)(1) in the interest of justice to abstain from hearing a particular proceeding arising under title 11 or arising or related to a case under title 11. Thus, notwithstanding that the principle of comity is not applicable in this case, the Court will consider whether it should abstain from considering the 9019 Motion. "Permissive abstention from core proceedings under 28 U.S.C. § 1334(c)(1) is left to the bankruptcy court's discretion." Luan Inv. S.E. v. Franklin 145 Corp. (In re Petrie Retail, Inc.), 304 F.3d 223, 232 (2d Cir.2002). Bankruptcy courts consider twelve nonexclusive factors to determine whether permissive abstention is appropriate . . . In re Sun Healthcare Group, 267 B.R. 673, 678-79 (Bankr.D.Del.2000). "Evaluating the twelve factors is not a mathematical formula." Id. at 679.

In this case, factors (2), (3) and (8) do not apply as they pertain to issues of state law and comity with state courts that are simply not present in this case. Factor (5) does not apply because this Court's subject-matter jurisdiction arises under 28 U.S.C. § 1334. In addition, factors (9), (10) and (11) are inapplicable because this Court's docket is not burdened, there is no evidence of forum shopping and there is no right to a jury trial, respectively. This leaves factors (1), (4), (6), (7), and (12) as the relevant factors for this Court to consider in determining whether it will abstain from considering the 9019 Motion. (1) The effect or lack thereof on the efficient administration of the estate. . . .Any further delay in resolving the issues raised by the 9019 Motion would have an adverse effect on the timely administration of this case. Therefore, this factor does not favor abstention. (4) The presence of a related proceeding commenced in state court or other non-bankruptcy court. Both proceedings arise from the settlement of the claims asserted in the derivative actions, however, the issues before each court are separate and distinct. . . . While the approval of the 9019 Motion alters the underlying facts of the Ninth Circuit Appeal, it does not change or determine any of the legal issues that were raised on appeal. Therefore, this factor does not favor abstention. (6) The degree of relatedness or remoteness of the proceeding to the main bankruptcy case. Consideration of the Amended Settlement through the 9019 Motion is a core proceeding and therefore related to the main bankruptcy case. This factor does not favor abstention. (7) The substance rather than the form of an asserted "core" proceeding. This is a core proceeding. This factor does not favor abstention. (12) The presence in the proceeding of nondebtor parties. While Mr. Grimes is a party to the appeal in the Ninth Circuit, his participation is not necessary for the Amended Settlement. This factor does not favor abstention.

All of the relevant factors considered by bankruptcy courts in determining whether to abstain under 28 U.S.C. § 1334(c)(1) do not favor abstention. Thus, it would not be in the interest of justice for this Court to abstain from considering the 9019 Motion and this Court will not do so.

Monday, October 23, 2006

2d Circuit Invokes "Virtually Unflagging Obligation" to Exercise Jurisdiction Where District Court Dismissed Suit on Int'l Comity Abstention Grounds

Per Royal and Sun Alliance Ins. Co. of Canada v. Century International Arms, Inc., --- F.3d ---, 2006 WL 2873046 (2d Cir. Oct. 10, 2006):

Plaintiff-appellant Royal and Sun Alliance Insurance Company of Canada ("RSA") seeks damages from defendants-appellees Century International Arms, Inc. and Century Arms, Inc. (collectively "Century America") for the reimbursement of defense expenses and the payment of deductibles it claims to be owed under various insurance policies. Century America moved to dismiss the complaint in deference to a pending action previously filed by RSA in Canada against Century America's Canadian affiliate, Century International Arms Ltd. ("Century Canada"), based on the same insurance policies and the same factual allegations. The United States District Court for the Southern District of New York (Deborah A. Batts, Judge), granted defendants' motion, concluding that considerations of comity warranted dismissal of RSA's action against Century America.

. . .

Often, a party invoking the doctrine of international comity seeks the recognition of a foreign judgment. In this case, however, Century America argues that concerns of comity favor the recognition of a pending foreign proceeding that has yet to reach final judgment, and that proper deference to that proceeding requires abstention in domestic courts. . .

Generally, concurrent jurisdiction in United States courts and the courts of a foreign sovereign does not result in conflict. China Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 36 (2d Cir.1987). Rather, " '[p]arallel proceedings in the same in personam claim should ordinarily be allowed to proceed simultaneously, at least until a judgment is reached in one which can be pled as res judicata in the other.' " Id., quoting Laker Airways, Ltd. v. Sabena Belgian World Airlines, 731 F.2d 909, 926-27 (D.C.Cir.1984), citing Colorado River, 424 U.S. at 817. The mere existence of parallel foreign proceedings does not negate the district courts' "virtually unflagging obligation ... to exercise the jurisdiction given them." Colorado River, 424 U.S. at 817. . . .
The Supreme Court has recognized that a decision to abstain from exercising jurisdiction based on the existence of parallel litigation "does not rest on a mechanical checklist, but on a careful balancing of the important factors ... as they apply in a given case, with the balance heavily weighted in favor of the exercise of jurisdiction." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 16 (1983) "No one factor is necessarily determinative; a carefully considered judgment taking into account both the obligation to exercise jurisdiction and the combination of factors counselling against that exercise is required." Colorado River, 424 U.S. 818-19, citing Landis v. N. Am. Co., 299 U.S. 248, 254-55 (1936); see also Moses H. Cone, 460 U.S. at 15 (stating that Colorado River did not "prescribe a hard-and-fast rule for dismissals of this type, but instead described some of the factors relevant to the decision").

In the context of parallel proceedings in a foreign court, a district court should be guided by the principles upon which international comity is based: the proper respect for litigation in and the courts of a sovereign nation, fairness to litigants, and judicial efficiency. . .

The existence of a parallel action in an adequate foreign jurisdiction must be the beginning, not the end, of a district court's determination of whether abstention is appropriate. As we explained above, circumstances that routinely exist in connection with parallel litigation cannot reasonably be considered exceptional circumstances, and therefore the mere existence of an adequate parallel action, by itself, does not justify the dismissal of a case on grounds of international comity abstention. Rather, additional circumstances must be present--such as a foreign nation's interest in uniform bankruptcy proceedings--that outweigh the district court's general obligation to exercise its jurisdiction. The district court did not identify any such special circumstances.

. . .

The factors relied upon by the district court in granting Appellee's motion to dismiss are not sufficient to overcome the virtually unflagging obligation of a district court to exercise the jurisdiction conferred on it by Congress. The record contains no evidence of any exceptional circumstances that would justify abstention from jurisdiction. Accordingly, we hold that the district court abused its discretion by dismissing the action.

Friday, October 20, 2006

How Appealling Reports on Seventh Circuit CAFA Case

Yesterday the following post concerning a decision this week from the Seventh Circuit dealing with the Class Action Fairness Act appeared on How Appealing:

U.S. Court of Appeals for the Seventh Circuit: The Class Action Fairness Act of 2005 expanded the jurisdiction of federal district courts over class action lawsuits seeking in the aggregate a large amount of damages. One issue that has been frequently litigated in the aftermath of that law's enactment is whether, and if so under what circumstances, cases pending in state court before CAFA became law could be removed to federal court once the law took effect. The added wrinkle in the decision that the Seventh Circuit issued today is that the removal of a case from California state court to a California federal court was originally upheld by a federal district judge in California, and the plaintiffs failed to appeal to the Ninth Circuit. Thereafter, the federal Multidistrict Litigation Panel ordered the case transferred to a federal court in Chicago, where the plaintiffs renewed their challenge to the case's removal to federal court. The federal district judge assigned to hear the case in Chicago agreed that the case had been wrongfully removed and ordered it remanded. Today, the Seventh Circuit affirms, while simultaneously rejecting "the plaintiffs' argument that an erroneous refusal to remand a case under the Class Action Fairness Act is a jurisdictional error, which must therefore remain corrigible until the litigation becomes final by issuance of a final judgment and exhaustion of appellate remedies." Circuit Judge Richard A. Posner issued the decision on behalf of a unanimous three-judge panel.

Fourth Circuit Analyzes the Use of Pendent Appellate Jurisdiction; Declines to Exercise

Per Rux v. Republic of Sudan, 461 F.3d 461 (4th Cir. Sept. 1, 2006):

In this action for damages brought against it by relatives of American sailors killed in the terrorist bombing of the U.S.S. Cole ("Plaintiffs"), the Republic of Sudan ("Sudan") appeals an order of the district court. . . Sudan argues . . . that this court should exercise pendent appellate jurisdiction over, and reverse, the district court's denial of its motion to dismiss for lack of personal jurisdiction and improper venue. Sudan also argues that this court should exercise pendent appellate jurisdiction over and consider for the first time its motion to dismiss for lack of standing . . . . [W]e find . . . that there is no basis to exercise pendent appellate jurisdiction over the remaining issues, we . . . dismiss the remainder of Sudan's appeal.

Sudan . . . argues that we should review this issue under pendent appellate jurisdiction, a judicially-created, discretionary exception to the final judgment requirement. Under this exception, we retain the discretion to review issues that are not otherwise subject to immediate appeal when such issues are so interconnected with immediately appealable issues that they warrant concurrent review. See Taylor, 81 F.3d at 437. Pendent appellate jurisdiction is an exception of limited and narrow application driven by considerations of need, rather than of efficiency. See Montano v. City of Chicago, 375 F.3d 593, 599 (7th Cir.2004); Taylor, 81 F.3d at 437. In Swint, the Supreme Court suggested that pendent appellate jurisdiction is available only (1) when an issue is "inextricably intertwined" with a question that is the proper subject of an immediate appeal; or (2) when review of a jurisdictionally insufficient issue is "necessary to ensure meaningful review" of an immediately appealable issue. Swint v. Chambers County Comm'n, 514 U.S. 35 50-51, (1949).

We are constrained by the language of the Supreme Court as well as our own precedent from recognizing efficiency considerations as a basis for the exercise of pendent appellate jurisdiction. Sudan next argues that we should exercise pendent appellate jurisdiction over its claim that Plaintiffs lack standing based on the Death on the High Seas Act ("DOHSA"), 46 U.S.C. app. §§ 761-767 (West 1975 & Supp.2006). The standing issue and the FSIA issue are not sufficiently interconnected to justify pendent appellate jurisdiction. Under the elements of Swint, jurisdiction is appropriate where issues are (1) "so intertwined that we must decide the pendent issue in order to review the claims properly raised on interlocutory appeal or [ (2) ] resolution of the issue properly raised on interlocutory appeal necessarily resolves the pendent issue." Cunningham v. Gates, 229 F.3d 1271, 1285 (9th Cir.2000) (citations omitted); see also Berrey v. Asarco, Inc., 439 F.3d 636, 647 (10th Cir.2006). Neither situation exists here. Resolution of Sudan's FSIA argument neither required us first to decide nor necessarily decides the issue of standing under DOHSA. In fact, our analysis of the FSIA issue did not address, or even refer to, the issue of standing. Each issue involves a distinct legal concept that does not affect analysis of the other. Accordingly, we find no basis to exercise pendent appellate jurisdiction over the issue of standing.

Thursday, October 19, 2006

First Circuit Discusses Admiralty Jurisdiction and Doctrine of Laches

Per Puerto Rico Ports Authority v. Umpierre-Solares, 456 F.3d 220 (1st Cir. July 27, 2006):

We must decide whether the district court had admiralty jurisdiction over this matter and, if so, whether the district court correctly ruled that the relief sought by the Puerto Rico Ports Authority ("PRPA") was barred by the doctrine of laches. The PRPA argues that the district court lacked admiralty jurisdiction over the removed action because La Isla Nena was a "dead ship." Under the dead ship doctrine, a ship loses its status as a vessel subject to admiralty jurisdiction "when its function is so changed that it has no further navigation function." Mullane v. Chambers, 333 F.3d 322, 328 (1st Cir.2003). We agree with Defendants that the Contract was maritime in nature and, therefore, within the admiralty jurisdiction of the district court.

Section 1333(1) of Title 28 U.S.C. provides that federal district courts shall have jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction." . . . "[T]he fundamental interest giving rise to maritime jurisdiction is the protection of maritime commerce." Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 608, (1991). [W]e focus our inquiry on "whether the nature of the transaction was maritime," id. at 611, that is, whether the contract "relate[s] to the navigation, business or commerce of the sea." Cunningham v. Director, Office of Workers' Compensation Programs, 377 F.3d 98, 109 n. 11 (1st Cir.2004) [citations omitted]. Whether La Isla Nena was "live" or "dead" when it was lying at the bottom of San Juan Harbor, obstructing navigation, is of no consequence to our jurisdictional inquiry. What matters is that La Isla Nena was lying at the bottom of San Juan Harbor, obstructing navigation, and that the Contract related to the removal of this obstruction.

Having concluded that the district court had admiralty jurisdiction over this action, we now turn to whether the district court erred in holding that the PRPA's breach-of-contract action was barred by laches. The district court so held because the PRPA waited more than eleven years to file its claim. "In an admiralty case, maritime law and the equitable doctrine of laches"--not federal or state statutes of limitations--"govern the time to sue." TAG/ICIB Servs., Inc. v. Pan American Grain Co., Inc., 215 F.3d 172, 175 (1st Cir.2000). [T]he focus of our inquiry is "whether the plaintiff's delay in bringing suit was unreasonable and whether defendant was prejudiced by the delay." TAG/ICIB Servs., Inc., 215 F.3d at 175.

. . . [A]s noted by the district court, "the record is devoid of any evidence to show plaintiffs made any extra-judicial or judicial effort during the eleven (11) year-period to request from defendants the specific performance of the contract." In light of this undisputed evidence of inaction on the part of the PRPA, and the absence of any reasonable explanation for such inaction, we agree with the district court that the PRPA's eleven-year delay in bringing this action was unreasonable.

Wednesday, October 18, 2006

N.D. Georgia Denies Motion for Attorney's Fees and Costs in Patent Case

Per Merial Limited v. Intervet, Inc., 437 F. Supp. 2d 1332 (N.D. Ga. July 10, 2006):

The defendant, Intervet, Inc., now seeks approximately $300,000.00 in attorney's fees and costs [Doc. No. 51] pursuant to 35 U.S.C. § 285, 28 U.S.C. § 1927, and the inherent power of the court. Generally, patent infringement suits are governed by the same rules that govern other federal litigation; each party bears its own expenses. Congress, however, has carved out two statutory exceptions to the general rule for patent infringement cases: 35 U.S.C. § 285 and 28 U.S.C. § 1927.

"A determination of whether a case is eligible for attorney's fees under § 285 is a two-step process." MEMC Electronic Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1382 (Fed.Cir.2005). First, the court must determine whether the case is exceptional. Id. Second, the court must determine whether attorney's fees are appropriate. Id. Exceptional cases include those involving misconduct during litigation, vexatious, unjustified, or bad faith litigation, or the failure to adequately investigate before filing suit. See Epcon Gas Systems, Inc. v. Bauer Compressors, Inc., 279 F.3d 1022, 1034 (Fed.Cir.2002). In addition to awarding attorney's fees pursuant to § 285, the court may impose sanctions upon any attorney who unreasonably and vexatiously multiplies the proceedings. 28 U.S.C. § 1927. Section 1927, however, is "not a 'catch all' provision . . . Peterson v. BMI Refractories, 124 F.3d 1386, 1395 (11th Cir.1997). Instead, "the statute was designed to sanction attorneys who 'willfully abuse the judicial process by conduct tantamount to bad faith.' " Schwartz v. Millon Air, Inc., 341 F.3d 1220, 1225 (11th Cir.2003) [citation omitted].

[T]he applicable standards are not satisfied in this case for an award of attorney's fees under either 35 U.S.C. § 285 or 28 U.S.C. § 1927. Intervet has not established by clear and convincing evidence that this is an exceptional case under § 285. Merial and its counsel also did not unreasonably and vexatiously multiply the proceedings or otherwise act in bad faith.

Tuesday, October 17, 2006

SCOTUS Denies Review in Several Federal Practice & Procedure Cases

Here is a listing of some of the cases denied review by the Supreme Court October 2nd touching on civil procedure topics as reported by BNA’s Supreme Court Today:

Bevill v. Spring Communications Co., 163 Fed. Appx. 6 (1st Cir.) (Standing)
Review Denied: 10/02/2006 (75 U.S.L.W. 3035)
Questions Presented: (1) Does corporation's sole shareholder have standing to assert fraud, as individual, in separate and distinct cause of action? (2) Is res judicata no longer relevant in this matter?
Summary: Court affirms district court decision (i) that sole shareholder lacks standing to assert in his individual capacity claims that belong to corporate entity, and (ii) that even if complaint were amended to assert claims in corporate capacity, claims would be barred by collateral estoppel and res judicata.

B. Braun Medical Inc. v. Rogers, 163 Fed. Appx. 500 (9th Cir.) (Remedy for failure to offer new trial in lieu of remittitur)
Review Denied: 1002/2006 (75 U.S.L.W. 3164)
Question Presented: Did Ninth Circuit violate fundamental principles of appellate review, and create conflict with five other courts of appeals, by holding that proper remedy for failure to offer new trial in lieu of remittitur (as required by Seventh Amendment) is to reinstate jury award, thereby imposing very award district court had found to be unlawfully excessive?
Summary: Amount awarded by jury as compensatory damages but reduced by district court as excessive is reinstated as remedy for district court's failure, in violation of Seventh Amendment, to afford prevailing party option of new trial in lieu of reduction of award.

Danial v. Daniels, (5th Cir.) (Jurisdictional amount in controversy)
Review Denied: 10/02/2006 (75 U.S.L.W. 3164)
Question Presented: May interest be included in determining jurisdictional amount in controversy for purpose of 28 U.S.C. § 1332(a), and if so, to what extent?
Summary: In determining whether minimum amount in controversy required by 28 U.S.C. § 1332 for federal diversity jurisdiction--$75,000--has been satisfied, interest may be considered only when it is basis for suit itself.

Mitzi International Handbag & Accessories Ltd. v. Romag Fasteners Inc., 168 Fed. Appx. 425 (Fed. Cir.) (Judgment as a matter of law—Post-verdict motion)
Review Denied: 10/02/2006 (75 U.S.L.W. 3164)
Question Presented: When basis for moving for judgment as matter of law pursuant to Fed.R.Civ.P. 50 arises after close of evidence and after Rule 50(a) motions have been taken and decided by district court, is party precluded from bringing post-verdict motion for judgment as matter of law on that basis pursuant to Rule 50(b)?
Summary: District court judgment denying defendant's motion for judgment as matter of law or, alternatively, new trial, following jury verdict that defendant had willfully infringed plaintiff's patent, is affirmed without comment, district court having reasoned that defendant having failed to move for judgment as matter of law at close of all evidence, it may not do so following entry of judgment.

Oden v. Northern Marianas College, 440 F.3d 1085 (9th Cir.) (Effect of expiration of 15-year appeal period)
Review Denied: 10/02/2006 (75 U.S.L.W. 3164)
Question Presented: Upon expiration of 15-year appeal period provided for in 48 U.S.C. § 1824(a) for appeal from decisions of Supreme Court of Commonwealth of Northern Mariana Islands to Ninth Circuit, does that court automatically lose jurisdiction of timely filed appeal pending in Ninth Circuit?
Summary: Under federal law conferring jurisdiction on Ninth Circuit over appeals from highest court of Northern Mariana Islands for only 15 years, after which such appeals may be heard only by U.S. Supreme Court, 48 U.S.C. § 1824, Ninth Circuit's jurisdiction, which expired May 1, 2004, extends only to appeals that were completed before May 1, 2004, and does not encompass appeals filed prior to May 1, 2004, that remained pending afterwards.

Readers may visit http://pubs.bna.com/ip/bna/lwt.nsf/StatusCasesDeniedRev?OpenView&Start= for a full listing of cases denied review.

Monday, October 16, 2006

D. Delaware Discusses Requirements of Declaratory Judgment Act in Patent Cases

Per Czarnik v. Illumina, Inc., 437 F. Supp. 2d 252 (D. Del. July 13, 2006):

Plaintiff contends that the Court should issue a declaratory judgment that Defendant's U.S. patents and pending patent applications are unenforceable due to inequitable conduct. The Court concludes, however, that it lacks jurisdiction to consider Plaintiff's claims for declaratory judgments of unenforceability. The Declaratory Judgment Act "requires an actual controversy between the parties before a federal court may exercise jurisdiction." 28 U.S.C. § 2201(a); EMC Corp. v. Norand Corp., 89 F.3d 807, 810 (Fed.Cir.1996). In patent cases, an actual controversy exists when there is both "(1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory judgment plaintiff that it will face an infringement suit and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity." Gen-Probe, Inc. v. Vysis, Inc., 359 F.3d 1376, 1380 (Fed.Cir.2004) [internal citation omitted]. Plaintiff lacks any reasonable apprehension of being sued. Furthermore, Plaintiff has not alleged that he is participating in any activity that could be considered infringement. Accordingly, the Court concludes that there is no actual controversy relating to Plaintiff's claims for declaratory judgment of unenforceability. [A] judgment that a future patent was invalid or not infringed would be hypothetical and would have no legal effect or meaning. GAF Bldg., Materials Corp. v. Elk Corp., 90 F.3d 482 (Fed.Cir.1996). For all the reasons discussed above, the Court will dismiss all of Plaintiff's claims for declaratory judgments of unenforceability.

Friday, October 13, 2006

Second Circuit Discusses the Collateral Order Doctrine and Pendent Jurisdiction

Per Papineau v. Parmley, ---F.3d----, 2006 WL 2828506 (2nd Cir. Oct. 4, 2006):

On October 7, 2005, this Court denied plaintiffs' motion to dismiss this appeal, which had contended that the order appealed from was a non-final denial of a motion for summary judgment. We held that although the district court's rejection of the defendants' motion for summary judgment on qualified immunity grounds was based on the court's determination that there were genuine issues of material fact still to be resolved, this appeal could go forward because defendants had stipulated to plaintiffs' facts for the purposes of this appeal.

The denial of a motion for summary judgment is normally not "immediately appealable because such a decision is not a final judgment." O'Bert ex rel. Estate of O'Bert v. Vargo, 331 F.3d 29, 38 (2d Cir.2003) (citing 28 U.S.C. § 1291). "Under the collateral order doctrine, however, the denial of a qualified-immunity-based motion for summary judgment is immediately appealable to the extent that the district court has denied the motion as a matter of law, although not to the extent that the defense turns solely on the resolution of questions of fact." Id . (citing Behrens v. Pelletier, 516 U.S. 299, 313 (1996)). Indeed, where, as here, defendants have accepted the plaintiffs' version of the facts for purposes of the appeal, they may challenge the district court's rejection of a qualified-immunity-based motion for summary judgment by arguing that the facts asserted by the plaintiffs "entitle [them] to the defense of qualified immunity as a matter of law." Salim v. Proulx, 93 F.3d 86, 91 (2d Cir.1996). We accordingly have appellate jurisdiction over the limited question of law presented by defendants' appeal.

. . .

Having dealt with the merits of defendants' appeal, we turn now to plaintiffs' cross-appeal. Plaintiffs ask this Court to exercise pendent jurisdiction over a number of claims . . . . Under the collateral order doctrine, "a district court's denial of a claim of qualified immunity, to the extent that it turns on an issue of law [and not of fact], is an appealable 'final decision' within the meaning of 28 U.S.C. § 1291 notwithstanding the absence of a final judgment." Mitchell v. Forsyth, 472 U.S. 511, 530 (1985). When we take such an appeal, we may exercise pendent jurisdiction over other issues that are not ordinarily subject to interlocutory review only when: (1) they are "inextricably intertwined" with the determination of qualified immunity; or (2) their resolution is "necessary to ensure meaningful review" of the district court's ruling on qualified immunity. Swint v. Chambers County Comm'n, 514 U.S. 35, 51 (1995). . . . Finally, we are mindful that "[p]endent appellate jurisdiction is a procedural device that rarely should be used because of the danger of abuse" and that accordingly, we must exercise such jurisdiction "[o]nly in exceptional circumstances." Natale v. Town ofRidgefield, 927 F.2d 101, 104 (2d Cir.1991) (citation omitted). Each finding on which plaintiffs seek to cross appeal involves issues entirely separate and distinct from the qualified immunity analysis at issue here. . . . Thus, we have no jurisdiction over plaintiffs' cross-appeal because there are no issues before us "inextricably intertwined" with our qualified immunity analysis.

Thursday, October 12, 2006

S.D. Ohio Holds That When Defendant Removes a Case Pursuant to CAFA, Defendant Does Not Concede that Plaintiff has Alleged Appropriate Damages

Per Key v. DSW Inc., --- F. Supp. 2d ---, 2006 WL 2794930 (S.D. Ohio Sept. 27, 2006):

Between November 2004 and March 2005, Defendant, DSW, collected and maintained credit card, debit card, and checking account numbers and other confidential personal financial information of approximately 1.5 million consumers who purchased merchandise at DSW retail outlets. (Doc. # 14 ¶ 1.) Because of DSW's alleged improper retention and failure to secure this information, on or about March 2005 unauthorized persons obtained access to and acquired the information of approximately 96,000 customers. Id. As a result, Plaintiff's Amended Complaint alleges several tort and contract claims against DSW. (Doc. # 14 ¶¶ 47, 55, 60, 67, 78 .)

Plaintiff argues that Defendant has conceded that Plaintiff alleged cognizable damages when it removed the case to federal court pursuant to the Class Action Fairness Act, which permits removal of class actions when the aggregate matter in controversy exceeds $5,000,000. (Doc. # 10 at 13.) As mentioned earlier, by dismissing all of the Plaintiff's claims for lack of standing, by implication the Court has found that the Plaintiff has not alleged cognizable damages sufficient to state a contract, negligence, conversion, or fiduciary duty claim. Furthermore, despite Plaintiff's contentions, the fact that Defendant removed the case does not mean that Defendant concedes that Plaintiff has adequately alleged appropriate damages. See, e.g., Johnson v. Wattenbarger, 361 F.3d 991, 993-994 (7th Cir.2004); Loque v. Allstate Ins. Co., 314 F.3d 776, 783 (5th Cir.2003). This Court's exercise of subject matter jurisdiction over Plaintiff's claims does not automatically imply that Plaintiff has stated a claim upon which the Court can grant relief. See id. Thus, Plaintiff argues inaccurately when she attempts to conflate jurisdictional standards with standards of review under Rule 12(b)(6).

Wednesday, October 11, 2006

D. Kansas Discusses Ability of Defendant Joined after CAFA to Remove a Suit Filed Prior to CAFA

Per Prime Care of Northeast Kan., LLC v. Blue Cross & Blue Shield of Kan. City, 2006 WL 2734469 (D. Kan. Sept. 25, 2006):

Plaintiffs filed suit before the effective date of CAFA and at this juncture, the issue is whether defendants are nonetheless entitled to remove it because plaintiffs did not join them until after the effective date. In its previous order, the Court held that the new defendants could not remove because the case had commenced when plaintiffs filed the original petition, prior to CAFA . See Memorandum And Order (Doc. # 150) at 9-11. The Tenth Circuit disagreed, finding that the new defendants' right to remove depended on whether the amendment which added them as defendants related back to the date of a pre-CAFA pleading. See Prime Care of Northeast Kan., LLC v. Humana Ins. Co., 447 F.3d 1284, 1289 (10th Cir. 2006). Under the Tenth Circuit ruling, if the amendment relates back, plaintiffs commenced suit against the new defendants before the effective date of CAFA, and the Court lacks subject matter jurisdiction and must remand. If the amendment does not relate back, plaintiffs commenced suit against the new defendants after the effective date of CAFA and, subject to any potential exceptions to jurisdiction, the action is properly before the Court.

Defendants bear the burden to show federal jurisdiction, i.e. that plaintiffs commenced this case against them after CAFA became effective. [S]ee Werner v. KPMG LLP, 415 F.Supp.2d 688, 695 (S.D.Tex.2006). In other words, defendants must show that the amendments which added them do not relate back to the original petition. If defendants are correct, i.e. plaintiffs failed to name them in the original petition for reasons other than mistake, the amendment which added them as defendants would not relate back; the claims against them would be deemed to have been commenced after the effective date of CAFA and absent some express statutory exception to removal jurisdiction, removal would be proper.

On this record, the Court concludes that the amendment which added the removing defendants relates back to the date of the original petition under K.S.A. § 60-215(c). See, e.g., Fry v. Waste Mgmt., Inc., No. 94-6865, 1995 WL 481478, at *2 (E.D.Pa. Aug. 11, 1995) (courts generally allow broad reading of mistake element, especially where original and added party have close corporate relation); Franklin v. Norfolk & W. Ry. Co., 694 F.Supp. 196, 198 (S.D.W.Va.1988) (amendment adding subsidiary related back where same lawyers represented both companies and were fully aware of confusion over ownership of locomotive which injured plaintiff). As to these defendants, the case therefore commenced before the effective date of CAFA and must be remanded to state court.

Tuesday, October 10, 2006

Eleventh Circuit Upholds Bankruptcy Court's Use of Inherent Powers to Assess Sanctions Upon a Finding of Bad Faith

Per In re Sunshine Jr. Stores, Inc., 456 F.3d 1291 (11th Cir. July 18, 2006):

Federal courts have the inherent power to impose sanctions on parties, lawyers, or both. Byrne v. Nezhat, 261 F.3d 1075, 1121 (11th Cir.2001). "This power is derived from the court's need 'to manage [its] own affairs so as to achieve the orderly and expeditious disposition of cases.' " Byrne, 261 F.3d at 1106 [internal citations omitted]. As we have stated elsewhere, " '[t]he key to unlocking a court's inherent power is a finding of bad faith.'" Byrne, 261 F.3d at 1106. We . . . find that the bankruptcy court did not abuse its discretion in applying its inherent powers. Under appropriate circumstances, it is within a court's discretion to assess attorney's fees on a party, or even to dismiss its lawsuit, for actions taken in bad faith. Chambers v. NASCO, Inc., 501 U.S. 32, 45(1991). In this case, the bankruptcy court sanctioned BONY for what reduces to two classes of conduct. First, BONY failed to obey or otherwise respond to the court's orders over an extended period of time. Second, BONY refused to comply with the court's January 29 Order, which directed BONY to provide the Debtor with information on the interest BONY had earned on the Prepayment Funds between April 1996 and October 2001.

Monday, October 09, 2006

SCOTUS Denies Review in Several Federal Practice & Procedure Cases

Here is a listing of some of the cases denied review by the Supreme Court last week touching on civil procedure topics as reported by BNA's Supreme Court Today:

Pulliam v. Ohio Casualty Insurance Co., 161 Fed. Appx. 494 (6th Cir.) (Fed.R.Civ.P. 60(b))
Review Denied: 10/02/2006 (75 U.S.L.W. 3165)
Question Presented: Did filing of documents known to be inaccurate constitute "fraud upon court"?
Summary: Alleged misstatements of bank's losses did not establish fraud upon court in light of parties' settlement of disputed sum for much smaller amount, and thus district court's denial of Fed.R.Civ.P. 60(b) motion for relief from judgment is affirmed.

Safeguard International Fund LP v. IFC Interconsult AG, 438 F.3d 298 (3rd Cir.) (Ancillary jurisdiction over garnishment proceeding)
Review Denied: 10/02/2006 (75 U.S.L.W. 3164)
Question Presented: Does a federal court have ancillary jurisdiction over garnishment proceeding brought under Fed.R.Civ.P. 69 against entity that was not party to original action but has indemnification agreement with judgment debtor, when there is no overlap at all between issues adjudicated in original action and issues adjudicated in garnishment proceeding?
Summary of Ruling Below: Federal district court has ancillary jurisdiction to adjudicate garnishment action by judgment creditor against nonparty to original lawsuit that is alleged to be derivatively liable to garnishor based on contractual obligation to indemnify judgment debtor.

ScripSolutions v. Eufaula Drugs Inc., (11th Cir. 12/27/05, unpublished) (Relation back to filing of original complaint)
Review Denied: 10/02/2006 (75 U.S.L.W. 3164)
Question Presented: Under CAFA, does addition of new defendant to state court action meeting requirements of statute after statute's effective date constitute commencement of action against defendant according it right to remove action to federal court under terms of CAFA statute?
Summary of Ruling Below: Defendant has presented no meritorious claim of legal error in district court's application of relation-back doctrine, under which district court determined (i) that plaintiff's amended and restated class action complaint, filed April 8, 2005 against "ScripSolutions" and various fictitious defendants, related back to filing of its original complaint on Feb. 14, 2005 against "ScriptSolutions" and various fictitious parties, and (ii) that therefore Class Action Fairness Act, which did not become effective until Feb. 18, 2005 and is not retroactive, did not apply; because 28 U.S.C. § 1447(d) bars appellate review of district court's order unless CAFA applies, appeal is dismissed.

Waugh v. Horton, (Horton v. Conklin, 8th Cir., 431 F.3d 602) (Federal jurisdiction--Forum defendant rule—Waiver)
Review Denied: 10/02/2006 (75 U.S.L.W. 3164)
Question Presented: Was Eighth Circuit correct to hold, in conflict with other circuits, that violation of "forum defendant rule" of 28 U.S.C. § 1441(b) is jurisdictional defect requiring remand, rather than defect "other than lack of subject matter jurisdiction" that is waived if not raised in timely motion to remand case?
Summary of Ruling Below: Violation of "forum defendant rule" of 28 U.S.C. § 1441(b), under which non-federal question case may be removed from state to federal court "only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought," is jurisdictional defect, rather than procedural irregularity that may be waived, and thus, because federal court of appeals lacks jurisdiction to review remand order based on jurisdictional defect raised at any time before final judgment, district court order remanding case to state court, based on violation of forum defendant rule, is not reviewable on appeal.

Readers may visit http://pubs.bna.com/ip/bna/lwt.nsf/StatusCasesDeniedRev?OpenView for a full listing of cases denied review.

Friday, October 06, 2006

D. Maine Holds it Has Jurisdiction to Order Parties to Clean Up Lands Owned by Non-Party to Case

Per City of Bangor v. Citizens Communications Co., 437 F.Supp.2d 180 (D.Me. Jun 27, 2006):

This matter came before the Court for the first phase of a bifurcated trial on Plaintiff City of Bangor's ("City") claims under both the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6972(a)(1)(B), and the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9607.

At the close of trial, the Court initially raised the question of standing and was especially concerned about the basis for ordering Citizens and/or the City to essentially cleanup property owned by the State of Maine (which is not a party to this particular case). (Tr. 2398-99.) The parties obliged the Court's request for briefing on this standing issue.

Having reviewed all of the helpful cases cited and discussed in the parties' briefs, the Court is satisfied that the City does, in fact, have standing to pursue a RCRA claim. Specifically, the Court is satisfied that the City has shown that it has an injury in fact, which is fairly traceable to imminent and substantial endangerment caused by PAH contamination in the Cove. Further, a RCRA injunction will redress this injury. See Osediacz v. City of Cranston, 414 F.3d 136, 139 (1st Cir.2005) (describing this "tripartite showing" as the "constitutional core of standing") (citations omitted).

Admittedly, the Court's standing concerns have been allayed in part by its findings that only particular portions of the Cove may present an imminent and substantial endangerment to health or the environment. As it turns out, the affected portions in some cases fall within the intertidal zone now owned by the City and, in most other cases, abut these City-owned areas. In those areas not currently owned by the City, the evidence suggests that blebbing and sheening may present an imminent and substantial risk that PAH contamination will move onto or otherwise adversely impact portions of the Cove owned by the City. Given this connection between the City and the contamination subject to the RCRA cleanup, there is no doubt that the City has standing to pursue a RCRA claim. See, e.g., Covington v. Jefferson County, 358 F.3d 626, 638- 40 (9th Cir.2004) (concluding that a plaintiff who lived across the street from a landfill had standing to bring a RCRA claim against the operator of the landfill); Maine People's Alliance v. Holtrachem Manuf. Co., LLC, 211 F.Supp.2d 237, 252-54 (D.Me.2002).