Prof. Hoffman Post Article on Judicial Power over Pleading

Prof. Lonny Hoffman recently posted an article entitled Burn Up the Chaff with Unquenchable Fire: What Two Doctrinal Intersections Can Teach Us About Judicial Power Over Pleadings on SSRN. Here is the Abstract:

This paper addresses the most talked about "new" tool for managing the burdens of modern litigation: judicial power to dismiss a case at the pleading stage, before an opportunity for discovery has been afforded. The issue has generated an astonishing amount of recent attention in courts and academic circles, in large part due to the Supreme Court's decisions in 2005 in Dura Pharms. Inc. v. Broudo and subsequent decisions in the early summer of 2007 in Bell Atlantic v. Twombly and Tellabs, Inc. v. Makor Issues & Rights, Ltd. In this paper, I advance the novel argument that any coherent account of judicial pleading power requires going beyond the law of pleading. I argue that bringing awareness to doctrinal linkages with pleading practice can inform normative thinking about the appropriate limits of judicial power to dismiss a case at the pleading stage, before an opportunity for discovery has been afforded. To be more specific, I argue that we can profitably focus attention on two doctrinal intersections with pleading practice: one obvious; the other less so, at least at first blush. The first and most significant point of intersection is with summary judgment. The second intersection, between Rule 8 and removal, though of less central importance than the linkage with summary judgment, can also help order thinking about appropriate limits on judicial power to enforce pleading norms. The subject of this work lies at the core of the most predominant thematic tension running through procedural law: balancing access to justice against efficiency. Ultimately, how and where we mark the scope of judicial pleading power will matter more to prospective claimants (and prospective defendants) than just about any other debate over procedural justice with which courts, rulemakers and theorists have been engaged. See Phillips v. County of Allegheny, F.3d, 2008 WL 305025 (3d. Cir., Feb. 5, 2008) ("Few issues in civil procedure jurisprudence are more significant than pleading standards, which are the key that opens access to courts.").

The full-text version of the article can be downloaded at http://ssrn.com/abstract=1097895.

Prof. Dodson Posts Article on Mandatory Rules

Prof. Dodson has recently posted an article entitled Mandatory Rules on SSRN. Here is the Abstract:

Whether a limitation is jurisdictional or not is an important but often obscure question. In an Article I recently published in Northwestern University Law Review, I proposed a framework for courts to resolve the issue in a principled way, but I left open the next logical question: what does it mean if a rule is characterized as nonjurisdictional? Jurisdictional rules generally have a clearly defined set of traits: they are not subject to equitable exceptions, consent, waiver, or forfeiture; they can be raised at any time; and they can be raised by any party or the court sua sponte. This jurisdictional rigidity has led courts and commentators to overlook the fact that nonjurisdictional rules need not be the mirror inverse but may instead have some of these attributes of jurisdictionality. A nonjurisdictional rule might, for example, be mandatory, meaning that it is subject to waiver or forfeiture, but if properly raised by the party for whose benefit it lies, it has the jurisdictional-like attribute of being immune to equitable exceptions. This Article is the first to take a hard look at nonjurisdictional rules and, particularly, mandatory rules. It first argues that they have an important normative role to play in our procedural system. It then shows that, in practice, mandatory but nonjurisdictional characterizations may help explain a number of perplexing doctrines. As an example, the Article demonstrates how such a characterization can help reconcile the otherwise maddeningly inconsistent doctrine of state sovereign immunity. Ultimately, the Article suggests that a greater appreciation for mandatory rules both can benefit the procedural system and can broaden our view of what salutary roles nonjurisdictional rules can play.

The full version of the Article can be downloaded by visiting http://ssrn.com/abstract=1095352.

Prof. Pfander Posts Article on Protective Jurisdiction

Prof. James Pfander has recently posted an article entitled Protective Jurisdiction, Aggregate Litigation, and the Limits of Article III on SSRN. Here is the Abstract:

Although the Supreme Court has yet to define precisely how far Congress may go in conferring protective jurisdiction on the federal courts, recent decisions cast some doubt on the viability of this expansive conception of federal jurisdiction. At the same time, Congress has shown a renewed interest in the use of minimal diversity jurisdiction as a tool of jurisdictional expansion. Both in the Multi-party, Multiforum Trial Jurisdiction Act of 2002 and in the Class Action Fairness Act of 2005, Congress treated the existence of any minimal diversity of citizenship between opposing plaintiffs and defendants as a jurisdictional predicate for shifting complex, multi-party litigation into the federal court system. Most observers presume that the Court will uphold the constitutionality of these expansive uses of minimal diversity, based on such decisions as State Farm v. Tashire, 386 U.S. 523 (1967).

This Article identifies a tension between the Court's reluctance to embrace protective jurisdiction and its presumptive willingness to approve the use of jurisdiction on the basis of minimal diversity. While the two jurisdictional constructs differ in theory, they can produce quite similar results in practice - they shift multi-party claims to federal court for resolution in accordance with state law. Thus, the Article shows that many of the testing cases of protective jurisdiction would easily satisfy a broad conception of minimal diversity and would thus challenge the notion that Article III imposes some sort of limit on how far Congress can go in expanding federal jurisdiction. The Article explores ways of reducing the tension, suggesting that the Court might revive limits on the breadth of minimal diversity or re-think its apparent hostility to protective jurisdiction.

The full article can be downloaded at http://ssrn.com/abstract=1090538.

Prof. Burbank Posts CAFA Article on SSRN

Prof. Stephen Burbank has posted an article entitled The Class Action Fairness Act of 2005 in Historical Context: A Preliminary View on SSRN. Here is the Abstract:

This article sets CAFA in the contexts of the history of federal diversity of citizenship litigation in general and, within that larger story, the history of diversity class actions in federal court. I consider whether changes in the litigation landscape since 1958, when Congress formally embraced corporate citizenship, might be thought to justify the changes in the balance of power in forum selection that CAFA brings about. Critical to my views in that regard are the failures of the Supreme Court effectively to police interstate forum shopping through constitutional control of personal jurisdiction or choice of law and the steroidal effect of the modern (post-1966) class action on the incentives that drive forum choice. I conclude that it was not unreasonable for Congress to assert a federal interest in regulating the process by which and the forums in which nationwide and multistate class action decisions are made. To be sure, the interest in question bears little relation to the historic account of diversity jurisdiction with which we are familiar. But, as Section IV demonstrates, it is consistent with the policy that the Supreme Court in fact pursued when umpiring ordinary diversity litigation in the late nineteenth and early twentieth centuries, and consistent as well with the policy that Congress pursued in its 1958 amendments to the diversity statute.

I reach a very different conclusion with respect to the numerous class actions within CAFA's reach that are not in any meaningful sense "multistate." The 1958 Congress left in place (if it did not enhance) the instruments of countervailing power for plaintiffs that had developed in the system and that made the fictions of corporate citizenship tolerable. The 2005 Congress dismantled those instruments in order to open federal courts to multistate class actions. It conveniently forgot them when it came time to fashion exceptions. In the process, Congress neglected the critical role they played in equilibrating not just plaintiffs' and defendants', but federal and state, interests. Ultimately, a combination of special interest overreaching, abetted by the fictions of corporate citizenship, and confusion about legislative aims, abetted by the institutional federal judiciary's schizophrenia regarding overlapping class actions, led Congress to lose sight of its duty, when fashioning CAFA's exceptions, to preserve the "happy relation of States to Nation."

The article can be downloaded at http://ssrn.com/abstract=1083785

Law Student Posts Note Studying Impact of Twombly

Kendall W. Hannon, a student at Notre Dame Law School (and reportedly the incoming Editor-in-Chief of the law review there) has recently posted a Note entitled Much Ado About Twombly? A Study on the Impact of Bell Atlantic Corp. v. Twombly on 12(B)(6) Motions on SSRN. Here is the Abstract:

Bell Atlantic Corp. v. Twombly has resulted in discussion and debate both in academic writings and in the courts. There exists a broad range of opinions as to what exactly this decision means for notice pleading and motions to dismiss in federal courts. This Note seeks to contribute to this ongoing debate by injecting empirical data.

This empirical study is built around reported federal district court cases. Every district court case citing Twombly in the context of a 12(b)(6) motion to dismiss was read and the disposition of the motion recorded. The rates of dismissal were then compared to numerous control groups- cases that cited Conley v. Gibson in the context of a 12(b)(6) motion to dismiss.

The conclusions suggest that Bell Atlantic may not be having a major impact on most areas of substantive law. However, it appears that Bell Atlantic is having a disproportionate impact on civil rights cases. These cases appear to be dismissed at a statistically higher rate under Bell Atlantic than they were under Conley. This Note proceeds in four parts. Part I provides context for the study by examining the important Supreme Court precedents both before and after Bell Atlantic as well as the response to Bell Atlantic in the legal literature. Part II discusses the methodology of the empirical study, while Part III presents the findings of the study in a variety of ways. Finally, Part IV seeks to advance various hypotheses that could each serve to explain the findings encountered in the study.

The Note may be downloaded by visiting http://ssrn.com/abstract=1091246.

Iowa Law Review Announces Upcoming Symposium on Summary Judgment and other Topics

The Iowa Law Review will host its 2008 symposium, Procedural Justice: Perspectives on Summary Judgment, Peremptory Challenges, and the Exclusionary Rule, on February 29. The event will include a panel debating the constitutionality of summary judgment. Professors Suja Thomas, Edward Brunet, and William E. Nelson will sit on that panel, and the Honorable Lavenski R. Smith of the U.S. Court of Appeals for the Eighth Circuit will moderate. A brief description of their positions is pasted below. The resulting manuscripts will be published in Volume 93, Issue 5 of the Iowa Law Review. In addition to her positional paper, Professor Thomas will also publish a formal response to Professors Brunet and Nelson.

Questions should be directed to Alison K. Guernsey, Editor in Chief of the Iowa Law Review via telephone at (319) 335-9054. For more information on the symposium generally, visit their website at http://lawreview.law.uiowa.edu, and click on the symposium link.

Cornell's LII Bulletin Previews SCOTUS Argument in Maritime Punitive Damages Case

MARITIME LAW, PUNITIVE DAMAGES, VICARIOUS LIABILITY

Exxon Shipping Co. v. Baker (07-219)
Oral argument: Feb. 27, 2008

In 1989 the oil tanker Exxon Valdez ran aground on Bligh Reef, off the Alaska coast, spilling millions of gallons of oil into Prince William Sound. In the years following the spill, Exxon would pay millions of dollars in private claims and over a billion dollars to settle government suits under environmental laws such as the Clean Water Act ("CWA"). An additional class action suit by private parties sought compensatory damages for economic harm, as well as punitive damages (a civil penalty for particularly egregious conduct). In the final suit, an Alaska district court awarded roughly $20 million in compensatory damages against Exxon—and $5 billion in punitive damages. The Ninth Circuit eventually reduced the punitive damages award to $2.5 billion but upheld the decision to award such damages. Exxon now asks the United States Supreme Court to strike down the award of punitive damages or reduce its amount. In addressing Exxon's petition, the Court must set maritime law standards for punitive damage awards against a ship's owner for acts of the ship's master. The Court will also consider whether Congress meant penalties under the CWA to be the full punishment for a spill, excluding punitive damages under maritime law.

Continues: http://www.law.cornell.edu/supct/cert/07-219.html

S.D.N.Y. Awards Attorneys' Fees to Plaintiff after Defendant Unreasonably Sought Removal to Federal Court

Per Alicea v. Circuit City Stores, Inc., --- F.Supp.2d ----, 2008 WL 344695 (S.D.N.Y. Feb. 08, 2008):

On January 22, 2008, this Court granted plaintiff's motion to remand on the ground that when defendant Circuit City Stores, Inc. (“Circuit City”) removed this case from state court, it failed to satisfy the $5 million amount-in-controversy requirement under the Class Action Fairness Act of 2005 (“CAFA”). The Court also directed Circuit City to respond to plaintiff's request for attorneys' fees pursuant to 28 U.S.C. § 1447(c). . . .

Circuit City submits that it had a reasonably objective basis for removal for three reasons: (1) it was “unclear to defendant whether plaintiff was seeking treble damages”, (2) “at the time of removal, it objectively appeared that plaintiff's claims were not limited to New York State consumers”, and (3) “the costs of compliance would extend in perpetuity,” and thus “CAFA's jurisdictional limits would have been easily met”. . . .

In light of the wording of plaintiff's complaint and the law-both of which were clear that plaintiff was not seeking and could not seek treble damages-Circuit City did not have a reasonably objective basis to assume that plaintiff was seeking treble damages to reach the $5 million amount-in-controversy requirement. . . . [P]laintiff could not have sought a nationwide class action against an out-of-state corporation based on New York law. Accordingly, Circuit City did not have a reasonably objective basis to believe that plaintiff was seeking a nationwide class action. . . .Circuit City's post-removal argument that costs of compliance may be counted to meet the jurisdictional requirement also is not objectively reasonable because the Second Circuit had held, prior to the filing of this lawsuit, that the value of the claims is measured from the plaintiff's perspective. DiTolla v. Doral Dental IPA of New York, 469 F.3d 271 (2d Cir.2006). . . .

For the reasons stated above, plaintiff's motion for attorneys' fees is granted. The Court is imposing fees not because Circuit City incorrectly removed this case. Rather, the Court is imposing fees because the removal was not objectively reasonable. If Circuit City had conducted a reasonable investigation of the facts, it would have been apparent, under well-settled law, that the amount in controversy did not exceed $5 million.

Senate Judiciary Committee Passes Evidence Rule 502

On January 31, 2008, the Senate Judiciary Committee approved without amendment S. 2450, a bill adding new Evidence Rule 502 to the Federal Rules of Evidence. See:

http://thomas.loc.gov/cgi-bin/bdquery/z?d110:SN02450:@@@L&summ2=m&.

The legislation addresses waiver of the attorney-client privilege and work product protection and is identical to proposed Evidence Rule 502, which was approved by the Judicial Conference of the United States and transmitted to Congress for its consideration in September 2007.

Unlike other amendments to the federal rules of practice and procedure that take effect unless Congress acts affirmatively to modify, defer, or reject it, "[a]ny such rule creating, abolishing, or modifying an evidentiary privilege shall have no force or effect unless approved by Act of Congress." See 28 U.S.C. § 2074(b).

Class Action Lawyer Bill Lerach Sentenced to Two Years in Prison

As reported by the Wall Street Journal's Law Blog:

"Famed plaintiffs lawyer Bill Lerach received a two-year sentence today for his role in the alleged kickback scheme at Milberg Weiss. Lerach, 61, was also sentenced to two years probation, fined $250,000 and ordered to complete 1,000 hours of community service. . . . Lerach pleaded guilty last fall to a felony count of conspiring to obstruct justice and to submit false testimony in federal judicial proceedings. To recap, prosecutors have claimed that Milberg shared legal fees with clients to induce them to quickly file securities class actions. Lerach has acknowledged making secret payments to former client Steven Cooperman."

Other sources report that Mr. Lerach has also agreed to forfeit $7.75 million in profits from his enterprise.

Prof. Sherry Posts Essay on CAFA's Impact on Erie Doctrine

Professor Suzanna Sherry has posted her essay Overruling Erie: Nationwide Class Actions and National Common Law on SSRN. Here is the Abstract:

In this essay, part of a symposium on the Class Action Fairness Act, I argue that CAFA should be read as having overruled Erie Railroad Co. v. Tompkins as applied to the nationwide class actions that fall within CAFA's jurisdictional grant. In the principal paper on which this essay comments, Linda Silberman suggests that Congress should overrule Klaxon v. Stentor Electric Mfg. Co. That suggestion, I propose, amounts to swimming halfway across a river. One of Congress's stated goals in enacting CAFA was to restore the intent of the founding generation. Examining the history and purposes of both diversity jurisdiction and the Rules of Decision Act demonstrates that unless CAFA is read to overrule Erie, it has achieved only half its goal.

The full-text version of the article can be downloaded at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1087435.

N.D. W.Va. Mentions Twombly and Finds that Complaint Satisfies Plausibility Pleading Standard

Per Herman Strauss, Inc. v. Esmark Inc., Slip Copy, 2008 WL 313857 (N.D. W.Va. Feb. 04, 2008).

In the wake of Twombly, uncertainty exists regarding the level of pleading required to satisfy Rule 8, which prior to Twombly was understood as requiring pure notice pleading in all manner of cases except those identified in Rule 9. See Anderson v. Sara Lee Corp., 508 F.3d 181, 188 n. 7 (4th Cir.2007) (“courts and commentators have been grappling with the decision's meaning and reach”); Iqbal v. Hasty, 490 F.3d 143 (2d Cir.2007) ( “[c]onsiderable uncertainty concerning the standard for assessing the adequacy of pleadings has recently been created by the Supreme Court's decision in [ Twombly ]”). Specifically, it is unclear whether Twombly alters the pleading standard only for complex antitrust cases or whether it has a broader application. The United States Court of Appeals for the Fourth Circuit has not yet offered guidance regarding the reach of Twombly. In disposing of Esmark's motion to dismiss, however, it is unnecessary for this Court to resolve the question. Even assuming, as Esmark argues, that Twombly requires courts to use a plausibility standard in all cases, HSI's complaint does not fail to meet that standard.

A review of the complaint reveals that HSI has met its obligation to “provide the ‘grounds' of [its] ‘entitlement to relief’ “ by setting forth “more than labels and conclusions, and a formulaic recitation of the elements....” Twombly, 127 S.Ct. 1965. The plaintiff alleges that HSI and Wheeling Pitt entered into certain contractual agreements for the supply of scrap metal (Pl.'s Compl. ¶ 13) and that Esmark intentionally interfered with the contractual relationship by obtaining a written agreement from one or more scrap companies to replace HSI as Wheeling Pitt's scrap supplier, by publically announcing its intention to restructure Wheeling Pitt's scrap supply relationship, and by inducing Wheeling Pitt to breach the Agreements (Pl.'s Compl. ¶¶ 19-21). The plaintiff also alleges that the alleged acts of interference caused Wheeling Pitt to breach and ultimately terminate the Agreements (Pl's Compl. ¶¶ 23, 27-35) and that HSI suffered $ 18, 400, 638.56 in damages (Pl's Compl. ¶¶ 36-37). These allegations set forth sufficient facts to state a claim for tortious interference that is plausible on its face. See Torbett v. Wheeling Dollar Savings & Trust Co., 314 S.E.2d 166, 173 (W.Va.1984)(setting forth elements for claim of tortious interference).

W.D. Okla. Dismisses Sec. 1983 Claim against Jail Due to the Naming of Wrong Entity

Per Daugomah v. Kay County Jail, Slip Copy, 2008 WL 281553 (W.D. Okla. Jan. 31, 2008):

Defendant Kay County Jail moves to dismiss Plaintiff's 42 U.S.C. § 1983 action against it on the basis that the jail is not a separate legal entity subject to suit. . . . Rule 17(b), Federal Rules of Civil Procedure, provides that a non-corporate entity's capacity to be sued is determined by the law of the state in which the district court is located. In Oklahoma, each organized county can sue and be sued. Okla. Stat. tit. 19, § 1. The authority of each Oklahoma county is exercised by its board of county commissioners, Okla. Stat. tit. 19, § 3, and a lawsuit brought against a county must be filed against the board of county commissioners of the relevant county. Okla. Stat. tit. 19, § 4. A county jail in Oklahoma, as a subdivision of the county in which it is located, has no separate legal identity under Oklahoma law, and therefore Defendant Kay County Jail correctly posits that it cannot be sued in this Court. See Aston v. Cunningham, No. 99-4156, 2000 WL 796086, *4 n. 3 (10th Cir. June 21, 2000) (unpublished op.)(affirming dismissal of county jail as defendant in prisoner's § 1983 action on basis that “a detention facility is not a person or legally created entity capable of being sued”). Accordingly, Defendant Kay County Jail's Motion to Dismiss the cause of action against it pursuant to Fed.R.Civ.P. 12(b)(6) should be granted, and the cause of action against Defendant Kay County Jail should be dismissed with prejudice for failure to state a claim upon which relief may be granted.

D.D.C. Holds that Complaints May Be Dismissed for Failure to Exhaust Administrative Remedies, Even Though Such Defect Is an Affirmative Defense

Per Lykens v. U.S. Government, 523 F.Supp.2d 26 (D.D.C. Dec. 10, 2008)

Plaintiffs next contend that complaints can no longer be dismissed for failure to exhaust administrative remedies after Jones v. Bock, --- U.S. ----, 127 S.Ct. 910, 166 L.Ed.2d 798 (2007), which plaintiffs characterize as foreclosing consideration of an exhaustion defect through a motion to dismiss, insofar as Jones categorizes it as an affirmative defense. Jones does contain the observation that “the usual practice under the Federal Rules [of Civil Procedure] is to regard exhaustion as an affirmative defense.” See 127 S.Ct. at 919. But Jones also recognizes that dismissal for failure to state a claim may be appropriate if the complaint somehow indicates that the defense is applicable. Id. at 921 (“[w]hether a particular ground for opposing a claim may be the basis for dismissal for failure to state a claim depends on whether the allegations in the complaint suffice to establish that ground, not on the nature of the ground in the abstract”). Thus, this Circuit has observed that, “even when failure to exhaust is treated as an affirmative defense, it may be invoked in a Rule 12(b)(6) motion if the complaint somehow reveals the exhaustion defense on its face.” See Thompson v. Drug Enforcement Admin., 492 F.3d 428, 438 (D.C.Cir.2007); see also Romashko v. United States, No. 05-2209, 2007 WL 2908754, at * 7 (D.D.C. Sept.30, 2007). *29 Here, plaintiffs' complaint indicated that they regarded exhaustion as futile and not applicable to their situation, thus indicating the applicability of the defense. Compl. at 4-5. In their subsequent briefs, plaintiffs did not dispute that they failed to comply with the exhaustion requirement set forth in 26 C.F.R. § 301.7433-1. Thus, resolution of the issue of failure to exhaust administrative remedies pursuant to a Rule 12(b)(6) motion to dismiss was appropriate and fully consistent with Jones v. Bock.