Standing Rules Committee Approved Proposed Rules Amendments

At its January 12-13, 2009, meeting, the Committee on Rules of Practice and Procedure adopted the recommendation of the Advisory Committee on Appellate Rules and approved the following proposed amendment:

• Appellate Rule 40(a)(1) (clarifies the time to seek rehearing in cases where a United States officer or employee is a party).

The Committee will now transmit the proposed amendment to the Judicial Conference with a recommendation that it be approved and transmitted to the Supreme Court.

The Committee also adopted the recommendations of the Advisory Committees on Bankruptcy and Evidence Rules and approved publishing for public comment the following proposed rules amendments:

• Bankruptcy Rule 6003 (the proposed amendment would clarify that the requirement of a 21-day waiting period before a bankruptcy court can enter certain orders at the beginning of a case – including an order approving employment of counsel – does not prevent the court from specifying that the order is effective on an earlier date. The proposed amendment also makes clear that the rule restricts only the issuance of orders granting the specified relief, and not the entry of all orders that may relate in some way to the specified motions or applications); and

• Restyled Evidence Rules 501-706 (restyled Evidence Rules 101-415 were approved for publication in June 2008. Publication of restyled Rules 501-706 will be deferred until entire Federal Rules of Evidence has been approved for publication).

The proposed amendment to Bankruptcy Rule 6003, which is expected to be published in August 2009, will be posted at http://www.uscourts.gov/rules/newrules1.htm. The agenda materials for this meeting are posted at http://www.uscourts.gov/rules/Agenda_Books.htm.

Prof. Suja Thomas Posts Article on Dispositive Procedure

Prof. Suja Thomas (Illinois) recently posted an Article entitled The Fallacy of Dispositive Procedure on SSRN. Here is the Abstract:

I have another seemingly heretical proposition - that dispositive procedure is fatally flawed. The Supreme Court has held that a judge can dismiss a case before, during, or after trial if he decides a reasonable jury could not find for the plaintiff. The Court has also held that a judge cannot dismiss a case based on his own view of the sufficiency of the evidence. I contend, however, that judges do exactly that. Judges dismiss cases based simply on their own views of the evidence, not based on how a reasonable jury could view the evidence. This phenomenon can be seen in the decisions dismissing cases. Judges describe how they perceive the evidence, interchangeably use the terminology of reasonable jury, reasonable juror, rational juror, and rational fact-finder among others although very different in meaning, and indeed, disagree among themselves on what the evidence shows. I further argue that the reasonable jury standard involves several layers of legal fiction. Those fictions include the current substitution of a judge's views for a reasonable jury's views, the speculative determination by a judge of whether a reasonable jury could find for the plaintiff, the assumption that disagreement among judges on the sufficiency of the evidence does not show a reasonable jury could find for the plaintiff, and the assumption that disagreement among judges on the sufficiency of the evidence demonstrates unreasonableness on the part of some of the judges. These legal fictions, which underlie the reasonable jury standard, show that the basis of dispositive procedure is fatally flawed.

This Article may be downloaded by visiting http://ssrn.com/abstract=1323484.

Oklahoma Law Review Publishes 2008 AALS Civil Procedure Papers

The papers presented at the 2008 AALS Civil Procedure Section's annual meeting program were just published in the Summer 2008 edition of the Oklahoma Law Review and are now available online at http://adams.law.ou.edu/olr. The topic of the program was "The Revolution of 1938 Revisited: The Role and Future of the Federal Rules." Papers are by Debbie Bassett (Alabama) & Rex Perschbacher (UC Davis), Rick Marcus (UC Hastings), and Bob Bone (BU), with an introduction by Steven Gensler.

Profs. Lewis and Eaton Post Article on Rule 68.1

Professors Harold S. Lewis Jr. (Mercer) and Thomas A. Eaton (Georgia) have recently posted an Article entitled The Contours of a New FRCP, Rule 68.1: A Proposed Two-Way Offer of Settlement Provision for Federal Fee-Shifting Cases on SSRN. Here is the Abstract

Our research began with interviews of experienced attorneys who prosecute and defend civil rights and employment discrimination cases. We set out to determine the extent to which offers of judgment under Federal Rule of Civil Procedure 68 ("FRCP 68" or "Rule 68") are made in these type of cases and the reasons why that Rule is or is not used. We focused on civil rights and employment discrimination litigation because it is in those cases where Rule 68 has the greatest potential to stimulate an early resolution of the dispute. Rule 68 provides the offeror greater leverage in civil rights and employment discrimination cases than in most other types of civil litigation, because the potential sanction to the prevailing offeree who turns down and fails to improve upon the offer includes the forfeiture of post-offer statutory attorneys' fees. And in these cases, fees often constitute the greater part of a plaintiff's recovery.

In this, our second report, we discuss how Rule 68 might be amended to make it a more effective tool for stimulating the prompt and fair resolution of civil rights and employment discrimination actions. Our suggested potential amendments are drawn largely, but not entirely, from two sources: the comments and suggestions made by the attorneys we interviewed, and the practices that have evolved in states that have similar provisions in their respective rules of civil procedure. In very broad terms, we discuss (1) having a separately numbered subdivision of the Rule for cases arising under federal fee-shifting statutes; (2) modifying the terminology of Rule 68 to describe more explicitly the mechanics and sanctions of the Rule; (3) allowing plaintiffs, not just defendants, to initiate offers under a "two-way" rule; (4) devising a set of incentives and sanctions calculated to promote the timely and fair resolution of disputes without unduly threatening either party; and (5) incorporating time frames for making and responding to offers.

This Article may be downloaded by visiting http://ssrn.com/abstract=1318251.

Prof. Burch Posts Article on Nonclass Aggregation & Procedural Justice

Professor Elizabeth Chamblee Burch (Fla. State) recently posted an Article entitled Procedural Justice in Nonclass Aggregation on SSRN. Here is the Abstract:

Nonclass aggregate litigation is risky for plaintiffs: it falls into the gray area between individual litigation and certified class actions. Although scholars have formulated procedural protections for both extremes, the unique danger and allure posed by nonclass aggregation has been undertheorized, leaving mass tort claimants with inadequate safeguards. When hallmark features of mass torts include attenuated attorney-client relationships, numerous litigants, and the demise of adversarial legalism, the attorney-client relationship itself becomes another bargaining chip in the exchange of rights. This Article thus takes the initial steps toward advancing a cohesive theory of procedural justice in nonclass aggregation by exposing the problem itself, discerning the principal disparities between litigant preference and mass tort practice, and identifying the main obstacles to implementing procedural preferences. In so doing, it observes that procedural justice is context-dependent and thus a matter of perspective. Claimants' perspectives and procedural preferences vary depending on whether they view themselves as part of a group or a collective. Accordingly, this Article introduces a continuum for evaluating group cohesion and designates two new points along that continuum - "individuals-within-the-collective" and "group-oriented-individuals". It concludes by sketching some preliminary observations about tailoring process to meet the needs of these different plaintiffs and the inherent barriers to implementing procedural justice.

This Article may be downloaded by visiting http://ssrn.com/abstract=1280385.

SCOTUS Denies Cert. in Case Holding that Subsequent Favorable Change in Law Insufficient Grounds for Reopening Case under Rule 60

U.S. Law Week's Supreme Court Today is reporting that the Supreme Court denied review today in 94 cases, 7 of which are classified under civil procedure. The denial in one case, Silvas v. Remington Oil and Gas Corp., 08-647, let stand the Fifth Circuit's holding that a subsequent favorable change in the law is insufficient to justify allowing a litigant to reopen its case under Rule 60, even if the litigant would prevail under the current state of the law.

For the complete list of cert. denials, BNA subscribers may visit http://pubs.bna.com/ip/bna/lwt.nsf/StatusCasesDeniedRev.

Prof. Issacharoff Posts Article on Private Claims and Aggregate Rights on SSRN

Prof. Samuel Issacharoff (NYU) recently posted an Article entitled Private Claims, Aggregate Rights on SSRN. Here is the Abstract:

In an odd set of procedure opinions last Term, the Supreme Court found itself confronted with the inadequacy of the federal rules for dealing with the sprawling array of aggregate disputes that currently engage the courts. Taken on their own terms, the three cases - Sprint Communications Co., L.P. v APCC Services, Inc, Republic of the Philippines v Pimentel, and Taylor v Sturgell - broke little new ground. Even the topics presented - real parties in interest, required parties, and non-party preclusion - are hardly the stuff of future debates over potential Supreme Court nominees.

Nonetheless, each of these cases presented privately held legal claims that could not be litigated to resolution absent aggregation with the claims of other parties. In each case, the formal workings of the procedural system were inadequate to the task. This Article contrasts the formalism of federal court procedural doctrines to the flexibility of bankruptcy workouts for asbestos claims and court-supervised private settlements, as in the recent Vioxx settlement. In the latter examples, courts have used more flexible principles of equity to oversee privately-ordered mass settlements. The article explores both the benefits and the limits of such private ordering in order to highlight the limitations on court-administration of mass harm litigation.

This Article may be downloaded by visiting http://ssrn.com/abstract=1289505.

Eisenberg & Lanvers Post Settlement Study on SSRN

Professor Theodore Eisenberg (Cornell) and Charlotte Lanvers (Disability Rights Education & Defense Fund) have recently posted What is the Settlement Rate and Why Should We Care? on SSRN. Here is the Abstract:

After establishing the importance of knowledge of settlement rates, this article first shows that different research questions can yield different settlement rates. Using data gathered from about 3,300 federal cases in the Eastern District of Pennsylvania (EDPA) and the Northern District of Georgia (NDGA), differing measures of settlement emerge depending on whether one is interested in (1) settlement as a proxy for plaintiffs' litigation success, or (2) settlement as a measure of litigated disputes resolved without final adjudication. Using settlement as a proxy for plaintiff success, we estimate the aggregate settlement rate across case categories in the two districts to have been 66.9% in 2001-02. Regardless of the method of computing settlement rates, no reasonable estimate of settlement rates supports an aggregate rate of over 90% of filed cases, despite frequent references to 90% or higher settlement rates. The aggregate rate for the EDPA alone was 71.6% and for the NDGA alone was 57.8%, suggesting significant interdistrict variation, which persists even within case categories. We report separate settlement rates for employment discrimination, constitutional tort, contract, and tort cases in the two districts. The highest settlement rate was 87.2% for tort cases in the EDPA and the lowest was 27.3% for constitutional tort cases in the NDGA. Our results suggest a hierarchy of settlement rates. Of major case categories, tort cases tend to have the highest settlement rates, then contract cases, then employment discrimination cases, followed by constitutional tort cases. Attorney fee structure and the nature of the parties may explain settlement rate variation. Our findings provide no evidence of a material change in aggregate settlement rates over time.

This Article may be downloaded by visiting http://ssrn.com/abstract=1276383.

First Circuit Holds that the Wild and Scenic Rivers Act Does not Preempt State Law

Per Fitzgerald v. Harris, 549 F.3d 46 (1st Cir. Dec. 5, 2008):

This case raises the issue of whether a Maine statute governing the management of a state-administered river, the Allagash Wilderness Waterway (“AWW”), Me.Rev.Stat. Ann. tit. 12, § 1882, is preempted by certain sections of a federal statute, the Wild and Scenic Rivers Act (“WSRA”), 16 U.S.C. § 1271 et seq.

. . .

The WSRA does address preemption, but in ways distinctly unhelpful to FitzGerald. Specific provisions of the WSRA limit any federal displacement of a state's authority over its section 2(a)(ii) rivers. Even on federally-administered rivers (unless within a national park or monument), state jurisdiction over hunting and fishing laws is unaffected by the WSRA. Id. § 1284(a). With respect to state water rights, the WSRA is neither a claim nor denial on the part of the federal government of state jurisdiction over the waters of any included river. Id. § 1284(d). Moreover, the WSRA expressly disclaims preemption of a state's right to access the beds of component rivers. Id. § 1284(f). And the WSRA specifically prohibits federal condemnation of state-owned lands. Id. § 1277(a)(1). The WSRA's overarching respect for a state's authority over its own designated rivers refutes FitzGerald's claim of conflict preemption.

Third Circuit Affirm Dismissal of Prisoner's Denial of Court Access Claim

Per Caldwell v. Beard, Slip Copy, 2008 WL 5397645 (3d Cir.Dec. 29, 2008):

Prisoners have a right of access to the courts. See Lewis v. Casey, 518 U.S. 343 (1996). Importantly, however, where an inmate does not allege an actual injury to his ability to litigate a claim, his constitutional right of access to the courts has not been violated. See id. at 352-53. An actual injury is shown only where a nonfrivolous, arguable claim is lost. See Christopher v. Harbury, 536 U.S. 403, 415 (2002). Caldwell's access to the courts claim is based on alleged interference with his ability to respond to an order of the Philadelphia County Court of Common Pleas, filed on November 20, 2006. That order directed Caldwell to file within 14 days a Statement of Matters complained of on Appeal in connection with his second Post Conviction Relief Act petition. See Pennsylvania Rule of Appellate Procedure 1925(b). Caldwell claimed that the Department of Corrections' policy of not delivering mail on Saturdays delayed his receipt of the order until November 28, 2006. He also asserted that he was prevented from using the law library on December 1, 2006, and was “[s]topped ... from mailing out the Documents of Matters Complained of on Appeal” on December 3, 2006. Importantly, however, nowhere in his original complaint, his amended complaint, or his objections to the Report and Recommendation did Caldwell allege that he was prevented from mailing his Rule 1925(b) statement on Monday, December 4, 2006, which presumably would have constituted a timely response. See Smith v. Pennsylvania Bd. of Probation and Parole, 683 A.2d 278, 281 (Pa.1996) (applying prisoner mailbox rule to “ pro se prisoners in our Commonwealth.”). Accordingly, Caldwell failed to state a claim for denial of access to the courts.

Eighth Circuit Holds that Law Firm Shareholder Lacks Standing to Sue for Refund of Penalty Paid by Law Firm

Per Jewell v. U.S., 548 F.3d 1168 (8th Cir. Dec. 10, 2008):

Jewell was a shareholder in the law firm of Jewell, Moser, Fletcher & Holleman, P.A. (“JMFH”). JMFH sponsored four prototype retirement plans, which its clients, mostly small businesses, relied upon to create individual retirement plans. As the plans' sponsor, JMFH had an obligation to ensure that (1) its prototype plans complied with federal law and (2) its clients amended their individual plans to comply with changes in federal law. See Rev. Proc.2000-20, § 3.07.

. . .

In May 2003, the IRS determined that more than sixty of the individual plans sponsored by JMFH were not timely amended to comply with changes in federal law. The IRS proposed that JMFH enter into an umbrella closing agreement, in which it would deem the plans timely amended and JMFH would pay a penalty. . . . Later that month, Moser and Fletcher agreed that JMFH would pay $26,800-almost one third of the IRS's initial settlement offer-to settle with the IRS.

. . .

After unsuccessfully filing a claim for a refund with the IRS, Jewell filed this action in June 2006 against the IRS, seeking a refund of $8,933.33, his pro rata share of JMFH's payment under the closing agreement. Jewell argued that the IRS had obtained the closing agreement through fraud, malfeasance, or misrepresentation of fact. The IRS moved to dismiss on the ground that Jewell lacked standing. The district court denied the motion, holding that because JMFH had stopped operating and Jewell had paid the sanction out of personal funds, Jewell had incurred direct harm and thus had standing to sue.

. . .

Even though Jewell ultimately contributed personal funds to JMFH's effort to pay the tax sanction, Jewel cites no authority for the proposition that this fact, standing alone, gives him standing to sue. We agree with the IRS that “the fact that each of the principals of JMFH agreed to contribute 1/3 of the sanction is simply irrelevant here.” To the extent that any party was entitled to sue, JMFH is the appropriate party to raise its alleged injury as a result of the IRS's conduct.^FN2 And the record contains no evidence that Jewell obtained JMFH's causes of action as part of the distribution of the firm's assets. Because Jewell was not the taxpayer from *1173 whom the tax was collected, he cannot raise the rights of JMFH against the IRS. Accordingly, he lacks standing to sue the IRS for a refund. See Murray, 686 F.2d at 1325 n. 8; cf. 20A Fed. Proc., L.Ed. § 48:1345 (“A shareholder cannot bring a refund suit for taxes paid on behalf of a corporation if the shareholder is not legally or contractually obligated to pay the corporate taxes.”).