Wednesday, October 31, 2007

Seventh Circuit Finds Standing where Plaintiff's Data Had Been Compromised but not yet Misused

Per Pisciotta v. Old Nat. Bancorp, 499 F.3d 629 (7th Cir. Aug. 23, 2007):

The district court granted ONB's motion for judgment on the pleadings and denied the plaintiffs' motion for class certification as moot. Specifically, the district court concluded that the plaintiffs' claims failed as a matter of law because “they have not alleged that ONB's conduct caused them cognizable injury.”

* * *

The district court looked to five cases from other district courts across the Country that had rejected claims for “the cost of credit monitoring as an alternative *633 award for what would otherwise be speculative and unrecoverable damages.” Id. Finding their reasoning persuasive, the district court concluded that “[t]he expenditure of money to monitor one's credit is not the result of any present injury, but rather the anticipation of future injury that has not yet materialized.”

* * *

We have, of course, an independent responsibility to examine our subject matter jurisdiction. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998). As we have noted, in reaching the conclusion that dismissal was appropriate, the district court in this case relied on several cases from other district courts throughout the Country. Many of those cases have concluded that the federal courts lack jurisdiction because plaintiffs whose data has been compromised, but not yet misused, have not suffered an injury-in-fact sufficient to confer Article III standing. We are not persuaded by the reasoning of these cases. As many of our sister circuits have noted, the injury-in-fact requirement can be satisfied by a threat of future harm or by an act which harms the plaintiff only by increasing the risk of future harm that the plaintiff would have otherwise faced, absent the defendant's actions. We concur in this view. Once the plaintiffs' allegations establish at least this level of injury, the fact that the plaintiffs anticipate that some greater potential harm might follow the defendant's act does not affect the standing inquiry.

Tuesday, October 30, 2007

SCOTUS Grants Cert in Punitive Damages Case

The U.S. Supreme Court has agreed to review the $2.5 billion punitive damages award in Exxon Shipping Co. v. Baker, a case arising out of the Exxon Valdez oil spill. Here are the questions presented in the case:

(1) May punitive damages be imposed under maritime law against shipowner (as Ninth Circuit held, contrary to decisions of First, Fifth, Sixth, and Seventh Circuits) for conduct of ship's master at sea, absent finding that owner directed, countenanced, or participated in that conduct, and even when conduct was contrary to policies established and enforced by owner?

(2) When Congress has specified criminal and civil penalties for maritime conduct in controlling statute, here Clean Water Act, but has not provided for punitive damages, may judge-made federal maritime law (as Ninth Circuit held, contrary to decisions of First, Second, Fifth, and Sixth Circuits) expand penalties Congress provided by adding punitive damages remedy?

(3) Is $2.5 billion punitive damages award in this case, which is larger than total of all punitive damages awards affirmed by all federal appellate courts in our history, within limits allowed by federal maritime law?

Monday, October 29, 2007

Prov. Effron Posts Article on Lessons from the September 11th Litigation

Professor Robin Effron has posted an article entitled "Event Jurisdiction and Protective Coordination: Lessons from the September 11th Litigation" on SSRN. Here is the Abstract:

Shortly after the tragic events of September 11, 2001, Congress passed the Air Transportation Safety and System Stabilization Act (ATSSSA). The September 11th Victim Compensation Fund (VCF) was the centerpiece of the statute and provided a source of no-fault compensation to the tragedy's victims and victims' families. The ATSSSA also allowed victims to elect to pursue traditional litigation instead.

The ATSSSA contains three jurisdictional features that have shaped the path of the litigation. The Act created a federal cause of action �for damages arising out of� the terrorist related aircraft crashes; it gave the Southern District of New York original and exclusive jurisdiction over all actions �resulting from or relating to the terrorist-related aircraft crashes.� Finally, it implemented a liability cap by limiting recovery in all actions to the defendants' available liability insurance. These jurisdictional aspects of the �traditional� litigation option under the ATSSSA contain unusual and practically unprecedented elements, yet they have received almost no scholarly attention. This Article attempts to fill that gap by telling the story of the course of the September 11th litigation, tracking the challenges and issues that have arisen as a result of the ATSSSA coordination mandate, and exploring the relationship between federalization of forum and aggregation of claims.

The jurisdictional puzzles seen in the September 11th litigation call for two new labels. �Event jurisdiction� refers to Congress's choice to give the federal courts subject matter jurisdiction over an �event� of perceived national importance, rather than locating subject matter jurisdiction over a certain class of cases or type of claim. The second phenomenon deserves the label �protective coordination� because, like protective jurisdiction, it evinces a congressional desire to protect certain real or perceived federal interests by manipulating the shape and direction of certain classes of lawsuits. The Article concludes by suggesting how Congress might better evaluate post-disaster litigation legislation in the future.

The full article, which will be published in the Southern California Law Review, can be downloaded at

Tuesday, October 23, 2007

11th Circuit Denies Standing to AT&T Mobility on Grounds NASCAR Did Not Invade a Legally Protected Right in Sponsorship Contract Dispute

Per AT&T Mobility, LLC v. National Ass'n for Stock Car Auto Racing, Inc., 494 F.3d 1356 (11th Cir.(Ga.) Aug 13, 2007) (NO. 07-12299):

Standing, however, "is a threshold jurisdictional question which must be addressed prior to and independent of the merits of a party's claims." Dillard v. Baldwin County Comm'rs, 225 F.3d 1271, 1275 (11th Cir.2000); EF Hutton & Co., Inc. v. Hadley, 901 F.2d 979, 983 (11th Cir.1990). In fact, we are obliged to consider standing sua sponte even if the parties have not raised the issue because an appellate court "must satisfy itself not only of its own jurisdiction, but also of that of the lower courts in a cause under review." Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir.2005); see also Florida Ass'n of Med. Equip. Dealers v. Apfel, 194 F.3d 1227, 1230 (11th Cir.1999) (stating that "every court has an independent duty to review standing as a basis for jurisdiction at any time, for every case it adjudicates."). As with all jurisdictional issues, this Court reviews standing de novo. See, e.g., McKusick v. City of Melbourne, Fla., 96 F.3d 478, 482 (11th Cir.1996); Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 408 (11th Cir.1999).

For AT&T Mobility to have standing to challenge NASCAR's decision under the RCR Agreement to prohibit the display of the AT&T logo on the # 31 Car, it must establish that it has suffered an injury in fact. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992). To establish injury in fact, AT&T Mobility must first demonstrate that NASCAR has invaded a "legally protected interest" derived by AT&T Mobility from the RCR Agreement between NASCAR and RCR. See Dillard, 225 F.3d at 1275 (11th Cir.2000) ( quoting Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130).

. . .

The mere fact that RCR has opted to exercise its right to retain Cingular as its sponsor does not convert that option into a "legally protected right" for Cingular or AT&T Mobility under NASCAR's agreement with RCR. RCR's absolute discretion under the RCR Agreement to retain Cingular as its sponsor, and NASCAR's lack of a role in RCR's decision, foreclose the possibility that Cingular or AT&T Mobility is a third party beneficiary of such agreement. It is well settled that a "plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975); see also Miccosukee Tribe of Indians of Florida v. Florida State Athletic Com'n, 226 F.3d 1226, 1230 (11th Cir.2000) ( "Absent exceptional circumstances, a third party does not have standing to challenge injury to another party.").

Because Cingular (now AT&T Mobility) was neither a party to nor an intended beneficiary of the RCR Agreement, it has not itself suffered a legally cognizable injury as a result of NASCAR's interpretation of the Addendum to the RCR Agreement. Thus, even though it might benefit collaterally from an interpretation of the RCR Agreement that is inconsistent with NASCAR's position, AT&T Mobility lacks standing to enforce its interpretation of the RCR Agreement.

Friday, October 19, 2007

11th Circuit Notes Split Re Whether an Intervenor Must Demonstrate Standing in Addition to Requirements of Rule 24(a)

Per Dillard v. Chilton County Com'n, --- F.3d ----, 2007 WL 2350246 (11th Cir.(Ala.) Aug 20, 2007) (NO. 06-14950):

So long as an original party on the intervenor's side remains party to the action and maintains an adversarial litigating position vis-a-vis the opposing parties, at least in this circuit an intervenor need not make an independent showing that he or she meets the standing condition of Article III. Chiles, 865 F.2d at 1213; see also Diamond, 476 U.S. at 68-69, 106 S.Ct. 1697 (leaving undecided the question whether every intervenor must demonstrate standing in addition to the requirements of Fed.R.Civ.P. 24(a)). FN10

FN10. Other circuit courts have split in answering the question that the Supreme Court left open in Diamond. The Second, Fifth, Sixth, Ninth, and Tenth Circuits have joined this circuit's general rule that proposed intervenors need not demonstrate standing to intervene in an ongoing controversy. See San Juan County v. United States, 420 F.3d 1197, 1204-05 (10th Cir.2005) (permitting intervention without an independent showing of standing); United States v. Tennessee, 260 F.3d 587, 595 (6th Cir.2001) (same); Ruiz v. Estelle, 161 F.3d 814, 829-30 (5th Cir.1998) (same); Yniguez v. Arizona, 939 F.2d 727, 731 (9th Cir.1991) (same); U.S. Postal Serv. v. Brennan, 579 F.2d 188, 190 (2d Cir.1978) (same). The Seventh, Eighth, and D.C. Circuits, on the other hand, require a demonstration of intervenor standing in all cases. See Jones v. Prince George's County, 348 F.3d 1014, 1017 (D.C.Cir.2003) (requiring intervenors demonstrate standing in addition to Rule 24 requirements); South Dakota v. Ubbelohde, 330 F.3d 1014, 1023 (8th Cir.2003) (same); Solid Waste Agency v. U.S. Army Corps of Eng'rs, 101 F.3d 503, 507 (7th Cir.1996) (same).

Thursday, October 18, 2007

Prof. Smith Posts Article on Federal Jurisdiction and Textualism

Prof. Peter Smith of the George Washington University Law School has posted an article entitled "Jurisdiction and Textualism" on SSRN. Here is the abstract:

Recent legislation has reinvigorated the scholarly debate over the proper relationship between Congress and the federal courts in matters of federal-court jurisdiction. The traditional view of jurisdiction-stripping is that Congress has virtually plenary power to determine the jurisdiction of the federal courts. Others have argued that there are substantial limits on Congress's authority to deprive the federal courts of jurisdiction over certain matters. A similar debate has raged over the obligation of federal courts to exercise jurisdiction that Congress ostensibly has conferred. Since the debate over Congress's role in crafting a jurisdictional regime last flared in full force, textualism has been ascendant as a methodology for interpreting statutes, and has had a profound impact on the way that judges - textualists and non-textualists alike - read statutes. The rise of textualism provides an important opportunity to update the long-standing debate over the proper roles of Congress and the courts in matters of federal-court jurisdiction.

Like the debate over congressional control of the federal jurisdictional regime, textualism is largely about the judicial role in a democracy. Textualists argue that their methodology recognizes the properly limited judicial role, and they insist that judges must be faithful agents of the legislature, guided by the plain meaning of statutory text. To the extent that textualism has had a significant impact on judicial decision-making, particularly by the Supreme Court, we might expect to see a move towards strict interpretation of jurisdictional statutes, and a vindication, at least as a descriptive matter, for the strong congressional-control models. After all, if the textualist judge is supposed to act as a faithful agent of Congress, following the plain meaning of statutory text, then when Congress plainly withdraws jurisdiction, faithfully textualist judges can be expected to decline to exercise authority; and if Congress confers jurisdiction without qualification, then we might expect textualist judges to eschew arguments for implicit exceptions to the exercise of jurisdiction. In practice, however, textualism has been applied somewhat unevenly to jurisdictional statutes. Although the Court's textualists have strictly read statutes that purport to divest the federal courts of jurisdiction, they have not been as consistent in applying textualism to statutes that appear, based on their plain language, to confer expansive grants of jurisdiction.

Textualism's goal to limit the judicial role in a democratic society is advanced by strict interpretations of statutes purporting to divest the courts of jurisdiction. But when Congress appears to confer broad grants of authority - such as in the general federal-question statute - being a truly faithful agent based on statutory language will result in a more robust judicial role than some textualists might otherwise prefer. The treatment by the Court's textualists of jurisdictional statutes suggests that the textualists' urge to constrain judicial power has sometimes trumped the textualists' demand that courts act as faithful agents of Congress by considering only the plain meaning of statutory language in deciphering Congress's instructions.

This has implications both for textualism and for the larger question of the proper relationship between Congress and the courts in crafting a jurisdictional regime. It should force textualists to defend their approach more explicitly as a device for constraining judicial authority, and perhaps less as the optimal means for implementing a theory of faithful agency in statutory interpretation. And it suggests that, at least as a positive matter, the strong congressional-control models of federal jurisdiction have not yet fully prevailed, at least with respect to the question of the courts' authority to decline to exercise jurisdiction that Congress ostensibly has granted.

You may download the full text version of the article by visiting

Wednesday, October 17, 2007

5th Circuit Determines African-American Appellants' 2003 Motion to Intervene was Untimely because Desegregation Case Began in 1966

Per U.S. v. Covington County School Dist., --- F.3d ----, 2007 WL 2483368 (5th Cir.(Miss.) Sep 05, 2007) (NO. 06-60799):

To determine whether a motion to intervene is timely, courts must consider the totality of the circumstances. Jones v. Caddo Parish Sch. Bd., 735 F.2d 923, 927 (5th Cir.1984) (en banc). In Stallworth v. Monsanto Co., we found that there are four factors to consider in determining whether a motion to intervene is timely: (1) the length of time the applicants knew or should have known of their interest in the case; (2) prejudice to existing parties caused by the applicants' delay; (3) prejudice to the applicants if their motion is denied; and (4) any unusual circumstances. 558 F.2d 257, 264-66 (5th Cir.1977). The district court's determination as to timeliness is reviewed only for abuse of discretion. Caddo Parish, 735 F.2d at 926.

We find that the district court did not abuse its discretion when it found that Appellants' motion was untimely. This desegregation case began decades before in 1966, and the United States filed its Motion for Further Relief in 2003. The possibility that the United States and the District might settle was well-publicized for more than six months before the consent decree was entered. While Appellants claim that, before the consent decree was entered, they believed the United States would be pressing for their position, there is no evidence that the United States gave them any explicit assurances that it would not compromise to settle the case. Moreover, Appellants waited nearly 15 weeks after the district court entered the consent decree before seeking to intervene. Given these circumstances, Appellants reasonably should have known of their interests in the case at least months before it actually filed its motion to intervene.

Allowing Appellants to intervene also would prejudice the United States and the District. It would waste the efforts of six months of settlement negotiations, and negotiations would have to begin anew. While Appellants also may suffer prejudice if precluded from intervening, Appellants have the burden to plead and prove such prejudice. Appellants failed to do so here.

Finally, Appellants have not alleged any unusual circumstances that explain their delay. Appellants contend that they needed nearly 15 weeks to find adequate counsel and for counsel to "familiarize themselves with the case." But if Appellants simply needed more time, they could have filed a motion to intervene along with a motion for an extension. S.D. Miss. R. 7.2(D). Instead, because of Appellants' delay, both the court and the parties proceeded for more than three months as if the settlement was final.

Because we find that the district court did not abuse its discretion when it found that Appellants' motion to intervene was untimely, we need not reach the issue of whether the United States adequately represented their interests.

Friday, October 12, 2007

Federal Judge Certifies Blind Shopper Class in Suit Over Target Web Site

BNA's Class Action Litigation Report is reporting that a federal judge in the Northern District of California has certified "a nationwide class of blind shoppers who allege they were blocked from accessing Target Corp.'s Web site in violation of state and federal disability law." The case is National Federation of the Blind v. Target Corp., N.D. Cal., No. 3:06-cv-01802. BNA subscribers can read the full story by clicking here.

Thursday, October 11, 2007

Prof. Ides Posts Bell Atlantic v. Twombly Article on SSRN

Prof. Allan Ides of the Loyola Law School of Los Angeles has just posted on SSRN a new article entitled, Bell Atlantic and the Principle of Substantive Sufficiency Under Federal Rule of Civil Procedure 8(a)(2): Toward a Structured Approach to Federal Pleading Practice. Here is the abstract:

In late May and early June of 2007, the Supreme Court decided two cases construing and applying Federal Rule of Civil Procedure 8(a)(2): Bell Atlantic Corp. v. Twombly and Erickson v. Pardus. Bell Atlantic involved the adequacy of a complaint filed under §1 of the Sherman Act (conspiracy in restraint of trade). The Court ruled that the complaint failed to state a claim on which relief could be granted due to the absence of factual allegations supportive of the charged conspiracy. The dissent accused the majority of adopting a heightened pleading standard; the majority denied that this was the case. Confusion over the import of the Bell Atlantic holding quickly surfaced in lower court opinions and in the blogosphere. In the words of the Second Circuit, “Considerable uncertainty concerning the standard for assessing the adequacy of pleadings has recently been created by the Supreme Court's decision in Bell Atlantic v. Twombly.”

In Erickson, the Court rejected the judicial imposition of a heightened pleading requirement in a pro se prisoner case. At least at a surface level, Bell Atlantic and Erickson appear to be in some tension with one another, each pulling in opposite directions on what might be perceived as the pleading continuum between notice/simplified and heightened pleading standards. On the other hand, one could read Erickson as an assurance that Bell Atlantic did not alter the pleading playing field and that it represents nothing more than a specialized application of the standard pleading model applied in a particular context.

Part of the difficulty in assessing these new opinions arises from the fact that problems of pleading under Rule 8(a)(2) are all too often lumped together under a single rubric such as “notice pleading” or as involving a bright line distinction between a liberal standard of “fair notice” and stricter standard of “heightened pleading,” when, in reality, there are a range of pleading issues that do not fit comfortably within such narrow compartments or comparisons. In addition, the jurisprudence of pleading under Rule 8(a)(2) has been complicated by overgeneralizations of what is permitted or not permitted under the rule. Assertions that the rule does not require the pleading of facts, or its converse that the rule does not countenance the pleading of conclusions, are both oft stated and both demonstrably false, at least in terms of the underlying principles of Rule 8(a)(2). Unfortunately, those pleading principles are as often ignored as they are honored.

As a partial remedy to the increasingly opaque waters of pleading practice, this article proposes a pleading template premised on three distinct but somewhat overlapping perspectives on pleading: Transactional Sufficiency, Procedural Sufficiency and Substantive Sufficiency. The purpose is to provide a systematic method through which to examine and differentiate among three types of pleading issues and to avoid treating all pleading issues as if they can be resolved under a single standard. The article uses this framework as method through which to examine and critique the Bell Atlantic and Erickson opinions.

You can download the article by visiting

Monday, October 08, 2007

D. Delaware Holds Advice of Counsel in Copyright Infringement Case is Not a True or Mandatory Affirmative Defense Under Rule 8(c)

Per LG Philips LCD Co., Inc. v. Tatung Co., --- F.R.D. ----, 2007 WL 2027334 (D.Del., July 13, 2007) (NO. CIV.A. 04-343-JJF):

The primary question presented by Defendants' Objections is whether advice of counsel needs to be pled in an answer as an affirmative defense under Federal Rule of Civil Procedure 8(c). The Special Master recognized that courts have referred to the advice of counsel defense as an affirmative defense and concluded that he could not ignore such characterizations despite Defendants' arguments to the contrary. (D.I. 658 at 10). The Court, however, does not feel similarly constrained, particularly in light of the fact that those courts who have used the affirmative defense characterization have not engaged in an analysis under Federal Rule of Civil Procedure 8(c) for determination of what constitutes an affirmative defense. See e.g., Glenmede Trust Co. v. Thompson, 56 F.3d 476, 486 (3d Cir.1995) (non-patent case); Johns Hopkins University v. Cellpro, 160 F.R.D. 30, 34 (D.Del.1995) (McKelvie, J .) (referring to the "current convention in patent litigation strategy" as including, among others, the following steps: "the patent owner opens with a claim for willful infringement; [and] the alleged infringer answers by denying willful infringement and asserts good faith reliance on advice of counsel as an affirmative defense ...")

Rule 8(c) enumerates specific affirmative defenses that must be raised in the pleadings and includes a "catchall provision" which provides for "any other matter constituting an avoidance or affirmative defense." Fed.R.Civ.P. 8(c). When controlling precedent concerning the nature of a particular defense is lacking, there are two approaches which may be taken to determine whether a defense must be pleaded affirmatively: (1) "whether a particular issue arises by logical inference from the well-pleaded allegations in the complaint relating to a necessary or intrinsic element of the plaintiff's claim," or (2) whether considerations of policy, fairness, and in some cases probability weigh in favor of requiring the matter to be pled affirmatively. 5 Charles A, Wright & Arthur R. Miller, Federal Practice and Procedure 3d. § 1271. The utility of the first approach has been questioned because "determining what matters are part of the plaintiff's case is the very thing to be ascertained by deciding whether a certain issue is or is not an affirmative defense." Id. In the Court's view, the more helpful inquiry examines the policy and fairness considerations implicated by the defense, considerations which are particularly acute in the context of the advice of counsel defense.

Most significantly, the decision to assert the advice of counsel defense in response to a claim of willful infringement results in a waiver of the attorney-client privilege as to all communications regarding the same subject matter. See In re EchoStar Communications Corp., 448 F.3d 1294, 1299 (Fed.Cir.2006). The Federal Circuit has recognized the magnitude of this decision and the resultant dilemmas faced by accused infringers making this decision:

Proper resolution of the dilemma of an accused infringer who must choose between the lawful assertion of the attorney-client privilege and avoidance of a willfulness finding if infringement is found, is of great importance not only to the parties but to the fundamental values sought to be preserved by the attorney-client privilege. An accused infringer, therefore, should not, without the trial court's careful consideration, be forced to choose between waiving the privilege in order to protect itself from a willfulness finding, in which case it may risk prejudicing itself on the question of liability, and maintaining the privilege, in which case it may risk being found to be a willful infringer if liability is found.

Quantum Corp. v. Tandon Corp., 940 f.2D 642, 643-644 (Fed.Cir.1991). While it is true that the Federal Circuit has lessened the burden on accused infringers by abolishing all adverse inferences formerly drawn against them from the failure to obtain the advice of counsel or the decision to withhold the advice of counsel under the attorney-client privilege, the threshold decision of whether to advance the advice of counsel defense remains momentous because "once a party announces that it will rely on advice of counsel ... the attorney-client privilege is waived." Echostar, 448 F.3d at 1299. Thus, the question of timing-of when to assert the advice of counsel defense and bear the burden of the attendant waiver of the attorney-client privilege that follows-becomes crucial to an accused infringer. This concern must, of course, be counterbalanced by the concern of fairness to the party asserting a claim for willful infringement because, as the Special Master recognized, that party becomes entitled to timely discovery concerning the advice of counsel.

In determining the manner in which to balance these concerns, the Court is foremost guided by the substantive law concerning willful infringement. Whether an accused infringer acted willfully is a question of fact determined in light of the totality of the circumstances concerning the alleged infringer's state of mind. In re MediaTek, Inc., 2007 WL 1046900 (Fed.Cir.2007). Reliance on the competent advice of counsel as a means of showing a party's good faith is but one factor relevant to this determination, and the Federal Circuit has not deemed the advice of counsel to be dispositive of a plaintiff's claim of willfulness. Machinery Corp. of America v. Gullfiber AB, 774 F.2d 467, 472 (Fed.Cir.1985) ("There is no per se rule that an opinion letter from patent counsel will necessarily preclude a finding of willful infringement ..., nor is there a per se rule that the lack of such a letter necessarily requires a finding of willfulness."). In contrast, a genuine affirmative defense has been defined as "[a] defendant's assertion raising new facts and arguments that, if true, will defeat the plaintiff's or prosecution's claim, even if all allegations in the complaint are true." Saks v. Franklin Covey Co., 316 F.3d 337, 350 (2d Cir., 2003) (citing Black's Law Dictionary 430 (7th ed.1999)); Reis Robotics USA, Inc. v. Concept Industries, Inc., 462 F.Supp.2d 897, 906 (N.D.Ill.2006). A defense which "merely negates some element of plaintiff's prima facie case is not truly an affirmative defense and need not be pleaded." Sanden v. Mayo Clinic, 495 F.2d 221, 224 (8th Cir.1974). The defense of advice of counsel does not entail admitting the allegations of the plaintiff's complaint and does not alone overcome a plaintiff's claim of willful infringement. Rather, the advice of counsel is only one of several factors to be considered in mitigation of a claim of willfulness. Accordingly, the Court concludes that advice of counsel is only an "affirmative defense" in the sense that it must be introduced into the litigation by the accused infringer in mitigation of a claim of willfulness; it is not a "true" or "mandatory" affirmative defense under Rule 8(c) that must be pled in the answer.

In the Court's view, this conclusion best harmonizes the policy considerations invoked by advice of counsel, including allowing the accused infringer, who is the holder of the attorney-client privilege, some choice in determining when to waive that privilege. That being said, however, the Court also notes that an accused infringer does not have an unfettered right to determine when to raise the advice of counsel defense, and there is a point in litigation when it becomes too late to raise the defense. In deciding when the defense must be offered considerations of fairness, notice and/or surprise to the plaintiff claiming willful infringement may begin to weigh more heavily than the attorney-client privilege policy considerations which typically favor the accused infringer. In any event, these intricate timing questions are best left to a case by case determination.

Friday, October 05, 2007

Prof. Parker Posts Article on Postponing the FRCP Restyling Amendments

Prof. Jeffrey S. Parker of George Mason University School of Law has just posted an article entitled Postponing the 2007 'Restyling' Amendments to the Federal Rules of Civil Procedure. Here is the abstract:

I write to urge the Members of the House and the Senateto enact legislation postponing the effectiveness of pendingamendments to the Federal Rules of Civil Procedure. Withoutintervening Congressional action, these amendments will takeeffect on December 1 of this year pursuant to 28 U.S.C. § 2074(a). I recognize that this is an extraordinary request, butthis year's pending amendments also are extraordinary, as theywill completely re-write each and every provision of the CivilRules for the first time in their 70-year history. Morefundamentally, they adopt a novel concept of rule interpretation--what one of the proponents calls "clarity without change"--that is antithetical to our jurisprudence and likely to produce disarray in the procedural system.

There is a substantial body of opinion, in which I join, that theproposed amendments are likely to produce a material degradationof civil justice in our federal courts by imposing enormousburdens of transitional cost, in exchange for little or nobenefit. Perhaps more importantly, there is no indication thatthe judicial rulemaking committees have fully considered thepotential consequences of these sweeping changes. For thesereasons, the Congress should provide itself the opportunity tostudy these proposed rules--and the process and concepts thatproduced them--before they take effect.

Wednesday, October 03, 2007

Prof. Cox Posts Article on Courts' Exercise of Jurisdiction Based on Uninvoked Grounds

Prof. Jeannette Cox of the University of Dayton School of Law has posted an article entitled Removed Cases and Uninvoked Jurisdictional Grounds (to be published in the North Carolina Law Review) on SSRN. Here is the abstract:

Traditionally understood, a congressional grant of federal subject matter jurisdiction alone does not confer authority on a federal court to hear a case; a party to the case must also affirmatively invoke the applicable jurisdictional ground. In a sharp break from this traditional understanding, federal courts have recently begun to exercise jurisdiction over cases based on jurisdictional grounds no party has invoked. Courts adopting this practice have concluded that a district court must retain removed cases that meet the requirements of a congressionally-authorized ground of subject matter jurisdiction even when an arguably antecedent requirement — party invocation of that jurisdictional ground — has not occurred. This article identifies and examines this development, coining the phrase “mandatory retention” to describe federal courts' decision to exercise jurisdiction over cases based on jurisdictional grounds no party has invoked. Although the article concludes that mandatory retention is a doctrinal misstep that should be abandoned, it posits that the emergence of mandatory retention may serve two useful functions. First, mandatory retention prompts reexamination of the respective roles played by courts and litigants in the process of invoking federal subject matter jurisdiction. Second, and more narrowly, mandatory retention invites examination of the origins and continued justification of the long-held doctrine that denies defendants the opportunities to amend jurisdictional allegations that plaintiffs routinely enjoy.

Those interested in downloading the full version of this article may do so by visiting

Tuesday, October 02, 2007

S.D.N.Y. Holds Plaintiffs Meet Requirements for Class Certification Under Rule 23(b)(2) in Gender Discrimination Suit

Per Velez v. Novartis Pharmaceuticals Corp. , --- F.R.D. ----, 2007 WL 2197800 (S.D.N.Y., July 31, 2007) (NO. 04 CIV 9194 GEL):

Certification under Rule 23(b)(2) is appropriate where "(1) the positive weight or value to the plaintiffs of the injunctive or declaratory relief sought is predominant even though compensatory or punitive damages are also claimed, and (2) class treatment would be efficient and manageable, thereby achieving an appreciable measure of judicial economy." Robinson, 267 F.3d at 164 (internal alteration, citation and quotation marks omitted). When a case involves claims for both injunctive relief and non-incidental monetary damages, courts must assess "the relative importance of the remedies sought, given all of the facts and circumstances of the case." Id., quoting Hoffman, 191 F.R.D. at 536.

Although the assessment of whether injunctive or declaratory relief predominates will require an ad hoc balancing that will vary from case to case, before allowing (b)(2) certification a district court should, at a minimum, satisfy itself of the following: (1) even in the absence of a possible monetary recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or declaratory relief sought; and (2) the injunctive or declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits. Insignificant or sham requests for injunctive relief should not provide cover for (b)(2) certification of claims that are brought essentially for monetary recovery. Id.

In this case, there can be little question that reasonable plaintiffs would sue to obtain the injunctive relief sought. The central goal of this lawsuit is to alter practices at NPC that plaintiffs believe are discriminatory. If plaintiffs prevail on the merits, that injunctive relief will be appropriate and reasonably necessary, because it would serve little purpose to award money damages for discrimination without addressing the institutional structure that perpetuates it. Defendants are alleged to have acted on grounds generally applicable to the class, and "[p]laintiffs seek to reform defendants' practices to provide for equitable employment opportunities and compensation for women." Hnot I, 228 F.R.D. at 486.

Defendants' argument against class certification is that plaintiffs have "fail[ed] to show the existence of any class-wide discriminatory practice in need of injunctive relief." (D. Mem. 50 .) Plaintiff have not yet been asked to prove any such thing. This is a class certification motion, not a trial, and if plaintiffs fail to prove the existence of class-wide discriminatory practices, no injunctive relief will be awarded. For now, the court need only determine whether such relief would be appropriate and necessary "were the plaintiffs to succeed on the merits," Robinson, 267 F.3d at 14, and it clearly would be.

Thus, the requirements of Rule 23(b)(2) are satisfied and the class will be certified under that provision. Because the Court finds that plaintiffs meet the requirements of Rule 23(b)(2), it is unnecessary at this point to determine whether class certification under Rule 23(b)(3) would also be warranted. See Hnot I at 486. Additionally, Title VII civil rights cases may be divided into liability and remedial phases. Id. Therefore, the issue of whether plaintiffs meet the requirements of Rule 23(b)(3) is deferred until after the liability phase of this action.