Seventh Circuit Restates Its "Notice Pleading" Interpretation of Twombly

Per Moore v. F.B.I., Slip Copy, 2008 WL 2521089 (7th Cir. June 25, 2008):

Even after the Supreme Court's decision in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007), complaints in federal courts still are subject to the notice-pleading standard of Federal Rule of Civil Procedure 8(a). Limestone Dev't Corp. v. Village of Lemont, 520 F.3d 797, 803 (7th Cir.2008); Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663, 667 (7th Cir.2007). Notice pleading requires only that a complaint contain”enough facts to state a claim that is plausible on its face .” Bell Atlantic, 127 S.Ct. at 1974; accord Limestone, 520 F.3d at 803. In other words, Moore's complaint must provide enough detail to give fair notice of what his claim is and the grounds upon which it rests, so that the FBI may respond. See George v. Smith, 507 F.3d 605, 608 (7th Cir.2007); Airborne Beepers, 499 F.3d at 667.

Seventh Circuit Reverses Dismissal of Civil Rights Claim

Per Radunz v. Von Haden, Slip Copy, 2008 WL 2463868 (7th Cir. June 19, 2008):

We review § 1915A dismissals de novo, applying the same standard used for evaluating dismissals as under Federal Rule of Civil Procedure 12(b)(6). Westefer, 422 F.3d at 574. To satisfy the notice-pleading requirements of Federal Rule of Civil Procedure 8(a)(2), a complaint need only include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); see Bell Atl. Corp. v. Twombly, 127 S.Ct. 1955, 1964 (2007). A plaintiff must “provide the grounds of his entitlement to relief” by saying enough to “raise a right to relief above the speculative level,” Twombly, 127 S.Ct. at 1964-65 (internal quotation marks, brackets, and citation omitted), though “[s]pecific facts are not necessary,” Erickson v. Pardus, 127 S.Ct. 2197, 2200 (2007). See Tamayo v. Blagojevich, 526 F.3d 1074, 2008 WL 2168638 at *5-6 (7th Cir.2008); Airborne Beepers & Video, Inc. v. AT & T Mobility LLC, 499 F.3d 663, 667 (7th Cir.2007). Pro se complaints are construed liberally and held to less-exacting standards than those drafted by counsel. Alvarado v. Litscher, 267 F.3d 648, 651 (7th Cir.2001).

The district court erred. A plaintiff states a claim under 42 U.S.C. § 1983 by alleging that a person acting under color of state law deprived him of a federal right. Christensen v. County of Boone, 483 F.3d 454, 459 (7th Cir.2007); Lekas v. Briley, 405 F.3d 602, 606 (7th Cir.2005). Radunz does this, and while further factual development may doom his lawsuit, we cannot conclude on the basis of his complaint that he has no entitlement to recovery.

The district court apparently thought it dispositive that Gemoll and not Von Haden was the one who retrieved the guns, but the state-action element is met whenever the plaintiff can show “sufficient state involvement in the action in question to trigger constitutional protections.” Cunningham v. Southlake Ctr. for Mental Health, Inc., 924 F.2d 106, 107 (7th Cir.1991). There is state action, for example, when the “state effectively directs, controls, or encourages the actions of a private party,” Wade v. Byles, 83 F.3d 902, 905 (7th Cir.1996), or when, in the Fourth Amendment context, a private party acts as an instrument or agent of the state, see United States v. Hall, 142 F.3d 988, 993 (7th Cir .1998). And that is the situation if, as happened here, a government official induced the private party to act. See United States v. Shahid, 117 F.3d 322, 325-26 (7th Cir.1997); United States v. Koenig, 856 F.2d 843, 849-50 (7th Cir.1988). Radunz alleges that Von Haden asked Gemoll to get the guns from the barn and instructed him to transport the weapons safely, and Von Haden's own report and the transcript of his interview with Gemoll, both of which are attached to the complaint, support Radunz's allegations. Von Haden proposed the search and thus obviously anticipated that Gemoll would conduct it, and Gemoll's very purpose was to help Von Haden, which suggests beyond a speculative level that Gemoll was acting under color of state law.

SCOTUS Grants Cert. In Foreign Property Attachment Case

The Supreme Court has granted cert. in Ministry of Defense and Support for Armed Forces of Islamic Republic of Iran v. Elahi, No. 07-615. Here is the BNA's summary:

In a dispute involving the Iranian Ministry of Defense and holders of U.S. default judgments against Iran seeking to execute those judgments or attach against property found in the United States, is an attachment against foreign sovereign property permissible when that property is "at issue in claims against the United States before an international tribunal," and the property is not a "blocked asset," under the terms of the 2000 Victims of Trafficking and Violence Protection Act and 2002 Terrorism Risk Insurance Act?

Prof. Oldfather Posts Article on De Novo Review on SSRN

Professor Chad M. Oldfather (Marquette) has recently posted an Article entitled Universal De Novo Review on SSRN. Here is the Abstract:

This article takes up the question of why appellate courts always review questions of law pursuant to the de novo standard of review. Put another way, it examines the familiar idea that appellate courts owe no deference to the legal rulings of trial judges. They must instead engage in what I refer to as universal de novo review - a practice pursuant to which appellate courts faced with legal questions always enjoy the authority to engage in plenary review, and never have the responsibility (or even the option) to defer to their trial-level counterparts. Despite - or perhaps because of - its familiarity and prevalence, universal de novo review has gone relatively unexamined by legal scholars. The article looks to fulfill that gap by undertaking a comprehensive analysis of its possible justifications. I also consider the appropriateness of a regime incorporating deference - something of a Chevron doctrine for trial courts - and outline some of the factors that should guide the exercise of such deference.

A full-text version of the Article may be downloaded at http://ssrn.com/abstract=1139864.

Sixth Circuit Permits Consideration of Legislative Record without Converting a 12(c) Motion to a Summary Judgment Motion

Per Sensations, Inc. v. City of Grand Rapids, 526 F.3d 291 (6th Cir. May 20, 2008)

Plaintiffs-Appellants argue that by considering the legislative record attached to Defendants' motion the district judge improperly converted a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) into a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. Federal Rule of Civil Procedure 10(c) provides that “[a] copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.” We have previously held that a district court converts a Rule 12(c) motion into a Rule 56 motion when the district judge merely “fail[s] to exclude presented outside evidence.” Max Arnold & Sons, LLC v. W.L. Hailey & Co., 452 F.3d 494, 503 (6th Cir.2006). Thus the question before us is whether the legislative record comes within the scope of Rule 10(c) or is “outside evidence” under Max Arnold.

In the instant case, we hold that the district court did not convert Defendants' Rule 12(c) motion into a Rule 56 motion. Certainly, the district judge accepted as evidence of secondary effects the legislative record, which Defendants attached to their motion for judgment on the pleadings. Were the legislative record to constitute a document outside the pleadings, then the district judge would have converted a motion for judgment on the pleadings into a motion for summary judgment. The legislative record did not constitute such an external document, however. Sensations attached a copy of the Ordinance to its complaint as Exhibit A; under Rule 10(c), therefore, we treat the Ordinance as part of the pleadings. The Ordinance, in turn, states that “[t]he City hereby adopts and incorporates herein its stated findings and legislative record related to the adverse secondary effects of sexually oriented businesses, including the judicial opinions and reports related to such secondary effects.” By attaching the Ordinance to the complaint, therefore, Sensations also incorporated the legislative record into the pleadings. Because Sensations had notice via its own actions that the legislative record formed part of the pleadings, the district judge acted fairly when he considered the Ordinance and legislative record as part of the pleadings. . . .

Colorado Issues Metadata Opinion

Per Legalethics.com:

Colorado has addressed whether lawyers can review metadata sent by opposing counsel outside the context of discovery. The summary states:

A Sending Lawyer who transmits electronic documents or files has a duty to use reasonable care to guard against the disclosure of metadata containing Confidential Information. What constitutes reasonable care will depend on the facts and circumstances. The duty to provide competent representation requires a Sending Lawyer to ensure that he or she is reasonably informed about the types of metadata that may be included in an electronic document or file and the steps that can be taken to remove metadata if necessary. Within a law firm, a supervising lawyer has a duty to ensure that appropriate systems are in place so that the supervising lawyer, any subordinate lawyers, and any nonlawyer assistants are able to control the transmission of metadata.

A Receiving Lawyer who receives electronic documents or files generally may search for and review metadata. If a Receiving Lawyer knows or reasonably should know that the metadata contain or constitute Confidential Information, the Receiving Lawyer should assume that the Confidential Information was transmitted inadvertently, unless the Receiving Lawyer knows that confidentiality has been waived. The Receiving Lawyer must promptly notify the Sending Lawyer. Once the Receiving Lawyer has notified the Sending Lawyer, the lawyers may, as a matter of professionalism, discuss whether a waiver of privilege or confidentiality has occurred. In some instances, the lawyers may be able to agree on how to handle the matter. If this is not possible, then the Sending Lawyer or the Receiving Lawyer may seek a determination from a court or other tribunal as to the proper disposition of the electronic documents or files, based on the substantive law of waiver.

If, before examining metadata in an electronic document or file, the Receiving Lawyer receives notice from the sender that Confidential Information was inadvertently included in metadata in that electronic document or file, the Receiving Lawyer must not examine the metadata and must abide by the sender’s instructions regarding the disposition of the metadata.

The full opinion, No. 119 (May 17, 2008) is here.

SCOTUS Grants Cert. In Case Involving Interpretation of Bell Atlantic Corp. v. Twombly

On Monday the Supreme Court granted the petition for certiorari in the case of Ashcroft v. Iqbal, --- S.Ct. ----, 2008 WL 336310 (Mem) (June 16, 2008). This case will involve the review of Iqbal v. Hasty, 490 F.3d 143 (2d Cir. June 14, 2007), a case in which the Second Circuit opined on the meaning of the Court's 2007 pleading case, Bell Atlantic Corp. v. Twombly, --- U.S. ----, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). It is unclear whether the Court will take the opportunity to clarify its opinion in Twombly given the questions presented in the Government's petition for certiorari:

1. Whether a conclusory allegation that a cabinet-level officer or other high-ranking official knew of, condoned, or agreed to subject a plaintiff to allegedly unconstitutional acts purportedly committed by subordinate officials is sufficient to state individual-capacity claims against those officials under Bivens.

2. Whether a cabinet-level officer or other high-ranking official may be held personally liable for the allegedly unconstitutional acts of subordinate officials on the ground that, as high-level supervisors, they had constructive notice of the discrimination allegedly carried out by such subordinate officials.

ABA Litigation Update Discusses Derivative Claims Standing

Here is an excerpt from a story in the ABA Litigation Update, June 2008 edition, entitled Derivative Claims: They’re Not Just for Shareholders Anymore:

Determining whether a claim for corporate wrongdoing is direct or derivative can be a complicated question. Recent court decisions highlight yet another analytical puzzle: Who has standing to bring derivative claims? Not just shareholders but also former shareholders, board members, and creditors have brought actions as putative corporate champions, achieving mixed results.

This year, the California Supreme Court concluded that a former shareholder lacked standing to bring a derivative action, even though he was disenfranchised during the action by a merger to which he did not consent. Grosset v. Wenaas. The continuous ownership rule requires that derivative plaintiffs own shares at the time of the challenged conduct and for the duration of the litigation, on the ground that the plaintiff should have a personal stake in the potential recovery.

The rule also recognizes that the directors normally manage the company. Shareholders who have been involuntarily disenfranchised commonly enjoy appraisal rights and, thus, can ask the court to determine the fair value of their shares.

Click here for the full story.

E.D. Pa. Finds Discriminatory Discipline Claim Inadequately Pleaded under Twombly

Per George v. American Baptist Churches USA, Slip Copy, 2008 WL 2265281 (E.D. Pa. May 30, 2008):

In her Answer to Defendant's Motion for Summary Judgment, plaintiff asserts that her claim is not time-barred because the scope of her Complaint is broader than failure to hire and includes a claim for disparate treatment during her employment with defendant. (Pl.'s Mem. of Law in Opp. 10.) Specifically, plaintiff asserts that the four-year statute of limitations of 28 U.S.C. § 1658 applies to this case because plaintiff “complains about more than defendant's failure to rehire her,” also contending “that she was subjected to discriminatory discipline by Roy Medley [defendant's General Secretary] and Wendy Rothenberger [defendant's Director of Human Resources] regarding her attendance.” ( Id. at 2, 10.)

The only paragraph in the Complaint which could possibly be read to encompass a claim of discriminatory discipline is paragraph 16, which reads:

Defendant discriminated against [plaintiff] by denying her the same rights as are enjoyed by White employees with respect to the terms and conditions of her employment relationship with defendant and to the enjoyment of all benefits, privileges, terms, and conditions of that relationship, in violation of the Civil Rights Act of 1866, 42 U.S.C. § 1981, as amended.

(Compl.¶ 16.) However, this paragraph is inadequate to allege a claim for disparate treatment under § 1981 as it simply states the legal standard and provides no factual detail. As stated by the Third Circuit, a complaint must contain “enough factual matter (taken as true) to suggest” the elements of the claims asserted. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir.2008) (quoting Bell Atl. Corp. v. Twombly, --- U.S. ----, ----, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007)); cf. 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, 235-236 (3d ed. 2004) (“[T]he pleading must contain something more ... than ... a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.”) (quoted in Twombly, 127 S.Ct. at 1965). Plaintiff has set forth no details of any alleged disparate treatment-no facts at all-and thus she fails to meet this standard.

Prof. Eisenberg & Atty. Charlotte Lanvers Post Article on Summary Judgment Rates

Professor Theodore Eisenberg (Cornell) along with Charlotte Lanvers of the Disability Education & Defense Fund have recently posted an Article entitled Summary Judgment Rates Over Time, Across Case Categories, and Across Districts: An Empirical Study of Three Large Federal Districts. Here is the Abstract:

Prior research on summary judgment hypothesizes a substantial increase in summary judgment rates after a trilogy of Supreme Court cases in 1986 and a disproportionate adverse effect of summary judgment on civil rights cases. This article analyzes summary judgment rates in the Eastern District of Pennsylvania (EDPA) and the Northern District of Georgia (NDGA), for two time periods, 1980-81 and 2001-02. It also analyzes summary judgment rates for the Central District of California (CDCA) for 1980-81 and for other civil rights cases in the CDCA in 1975-76. The combined sample consists of over 5,000 cases. The three-district sample for 1980-81 had an overall summary judgment rate of 4.5%. The summary judgment rate increased from 6.5% to7.0% in the two-district EDPA and NDGA sample from 1980-81 to 2001-02, a statistically insignificant difference. The pattern was inconsistent across case categories. For contract, tort, and a residual category of other noncivil rights cases, there was no evidence of a significant increase in summary judgment rates over time. Interdistrict differences were not dramatic in these three areas except that NDGA had a higher rate of summary judgment in tort and contract cases than did EDPA. The most striking effect was the approximate doubling - to almost 25% - of the NDGA summary judgment rate in employment discrimination cases and a substantial increase in the NDGA summary judgment rate in other civil rights cases. Subject to the limitation that both time periods studied are removed in time from the Supreme Court's 1986 summary judgment trilogy, the only strong evidence in this study of a post-trilogy increase is in NDGA employment discrimination cases. Civil rights cases had consistently higher summary judgment rates than noncivil rights cases and summary judgment rates were modest in noncivil rights cases.

A full-text version of the Article may be downloaded by visiting http://ssrn.com/abstract=1138373.

Sixth Circuit Grants En Banc Review in Case to Determine Whether State or Federal Law Governs Spoliation of Evidence

The Sixth Circuit has granted en banc review in a case in which a panel of the court noted that the Circuit's rule applying state law to determine spoliation of evidence issues was out of step with the approach taken in other circuits. Here is an excerpt from the panel opinion in Adkins v. Wolever, 520 F.3d 585 (6th Cir. Mar. 21, 2008):

Under the law as it currently stands in our Court, we cannot say that the district court abused its discretion in failing to provide relief for third-party spoliation of evidence. At present, the rules that apply to spoliation of evidence require the application of state law in federal question cases such as this one. See Beck v. Haik, 377 F.3d 624, 641 (6th Cir.2004); Welsh v. United States, 844 F.2d 1239, 1245 (6th Cir.1988). We are bound by these decisions, correct or not. See Salmi v. Sec'y of Health & Human Servs., 774 F.2d 685, 689 (6th Cir.1985); 6th CIR. R. 206(c) ( “Reported panel opinions are binding on subsequent panels.”). The decisions are not without contrary precedent, however. See Beil v. Lakewood Engineering and Mfg. Co., 15 F.3d 546, 552 (6th Cir.1994). In Beil, we stated that although evidence destroyed during the course of a lawsuit in our Court is subject to Federal Rule 37 sanctions, the availability of sanctions for pre-litigation destruction “must be found in the substantive law of the case.” Id. Because the conduct for which Adkins seeks sanctions arose before litigation, and because Adkins's lawsuit arises under 42 U.S.C. § 1983, federal law arguably could apply. Indeed, every other circuit to directly address the issue of spoliation of evidence and appropriate sanctions applies federal law, and does so even in diversity cases. See Davison v. Cole Sewell Corp., 231 Fed.Appx. 444, 452 n. 4 (6th Cir.2007).

Applying federal law in this evidentiary realm makes good sense. Federal courts generally apply their own evidentiary rules in both diversity and federal question matters, and therefore federal law should govern whether a district court abused its discretion in declining to apply spoliation sanctions. See King v. Ill. Central R.R., 337 F.3d 550, 556 (5th Cir.2003); Hodge v. Wal-Mart Stores, Inc., 360 F.3d 446, 449-50 (4th Cir.2004). Quite simply, imposition of sanctions for spoliation is an inherent power of federal courts, and therefore the decision to impose them should be governed by federal law.

Fifth Circuit Notes Split Re Proper Privity Analysis in Context of EPA-Negotiated Consent Decree on a Prior CWA Suit

Per Environmental Conservation Organization v. City of Dallas, --- F.3d ----, 2008 WL 2174066 (5th Cir. May 27, 2008):

We recognize that, in some limited instances, “a federal court has leeway to choose among threshold grounds for denying audience to a case on the merits.” Sinochem, 127 S.Ct. at 1191 (internal quotation marks omitted). However, we do not think this is one of those instances. In this case, the res judicata analysis is no less burdensome than the standing inquiry. ECO argues that the common law doctrine of res judicata cannot be applied to CWA citizen suits, and there is some precedent to that effect. See Sierra Club v. Coca-Cola Corp., 673 F.Supp. 1555 (M.D.Fla.1987). The City points to later authority that disagrees. See EPA v. City of Green Forest, 921 F.2d 1394, 1404 (8th Cir.1990). Even were we to resolve that argument in the City's favor, we would still face an apparent circuit split regarding the proper “privity” analysis in the context of determining the preclusive effect of an EPA-negotiated consent decree on a prior-filed CWA citizen suit. Compare Friends of Milwaukee's Rivers v. Milwaukee Metro. Sewerage Dist., 382 F.3d 743 (7th Cir.2004) (satisfaction of res judicata “privity” element requires showing of “diligent prosecution”) with City of Green Forest, 921 F.2d at 1394 (applying res judicata without any discussion of “diligent prosecution”); see Ellis v. Gallatin Steel Co., 390 F.3d 461, 473 (6th Cir.2004) (expressly rejecting “diligent prosecution” requirement when applying res judicata to a prior-filed Clean Air Act citizen suit).

Prof. Spencer Posts Article on Pleading Civil Rights Claims

Professor A. Benjamin Spencer (W&L) has just posted an Article entitled Pleading Civil Rights Claims in the Post-Conley Era. Here is the Abstract:

Much has been made of the Supreme Court's recent pronouncements on federal civil pleading standards during the latter half of the 2006-2007 Term. Specifically, what will be the fallout from the Court's decision in Bell Atlantic Corp. v. Twombly, a case that abrogated Conley v. Gibson's famous "no set of facts" formulation and supplanted it with a new plausibility pleading standard? This Article attempts to examine and distill the impact of Twombly on the pleading standards that lower federal courts are applying when scrutinizing civil rights claims. Two main approaches emerge: that of courts that choose to continue to apply a notice pleading standard and that of courts requiring factual substantiation of claims at the pleading stage. The aims of this Article are to clarify the pleading standards that civil rights claimants must now satisfy across the circuits, to assess what impact Twombly has had on shaping those standards, and to evaluate from a policy perspective whether any changes wrought by Twombly in this area are welcome or troubling. This Article was prepared for inclusion in the forthcoming Howard Law Journal Symposium issue entitled "Civil Rights and Civil Procedure: The Legacy of Conley v. Gibson."

A full-text version of this Article may be downloaded by visiting http://ssrn.com/abstract=1138638.