Wednesday, May 27, 2009

Supreme Court to hear Vioxx fraud case

Jurist reports:

The US Supreme Court on Tuesday granted certiorari in Merck & Co. v. Reynolds [docket; cert. petition], in which the Court will decide when the statute of limitations begins to run in a securities fraud case under th "inquiry notice" standard. Investors brought a class action suit against the drug maker Merck & Co. in November 2003, alleging that it had deliberately concealed information about the safety record of its painkiller Vioxx . The case was dismissed by US District Court Judge Stanley Chester in April 2007 after he determined that investors were on "inquiry notice" of the alleged fraud in September 2001 when the Food and Drug Administration (FDA) released a warning letter about the painkiller. The Third Circuit Court of Appeals reinstated the case in September 2008, finding that Chester had "acted prematurely in finding as a matter of law that [the investors] were on inquiry notice of the alleged fraud."

Tuesday, May 26, 2009

SCOTUS Invalidates NY Law that Strips Trial Courts of Jurisdiction over Suits against State Correctional Officers

The Supreme Court decided the following case today (per BNA's U.S. Law Week - Supreme Court Today):

Haywood v. Drown, No. 07-10374. A New York law that strips the state's trial courts of jurisdiction to hear suits for damages, including federal civil rights actions under 42 U.S.C. § 1983, brought against state correctional officers, but not similar actions against other state officials, violates the supremacy clause of the Constitution. The New York statute does not qualify as a neutral rule of judicial administration that would be permissible and states do not have authority to nullify a federal right or cause of action they find inconsistent with their local policies.

Download the opinion from Cornell's LII here.

Monday, May 25, 2009

Fourth Circuit: Court May Hear Appeals Filed Outside 10-Day Window

Per U.S. v. Urutyan, No. 08-4295 (May 7, 2009):

Urutyan was convicted by a jury on all counts. Judgment was entered against him on January 22, 2008. Urutyan filed a notice of appeal with the district court March 4, 2008. The notice was not timely. Appellate Rule 4(b)(1)(A) imposes a ten-day deadline on the filing of a notice of appeal in criminal cases, and Urutyan never requested an extension of that deadline.

. . .

[I]n light of the Supreme Court’s holding that "[i]t is axiomatic that court-prescribed rules of practice and procedure, as opposed to statutory time limits, do not create or withdraw federal
jurisdiction," Kontrick, 540 U.S. at 370, we conclude that the non-statutory time limits in Appellate Rule 4(b) do not affect subject-matter jurisdiction.

Friday, May 22, 2009

WSJ BLog: Why Defense Lawyers Are Lovin’ the Iqbal Decision

Check out this blog post by Ashby Jones on the Wall Street Journal's Law Blog: Why Defense Lawyers Are Lovin’ the Iqbal Decision.

Wednesday, May 20, 2009

Professors Posting about Iqbal

See posts by professor Dorf, Wasserman (and here), and Dodson on Ashcroft v. Iqbal.

Monday, May 18, 2009

Iqbal Court: Twombly Applies Beyond Antitrust Context

One debate that has persisted among some scholars regarding the import of Twombly has been settled by the Supreme Court in Monday's decision in Ashcroft v. Iqbal: whether the Twombly standard can be limited to antitrust cases:

"Respondent first says that our decision in Twombly should be limited to pleadings made in the context of an antitrust dispute. This argument is not supported by Twombly and is incompatible with the Federal Rules of Civil Procedure. Though Twombly determined the sufficiency of a complaint sounding in antitrust, the decision was based on our interpretation and application of Rule 8. 550 U. S., at 554. That Rule in turn governs the pleading standard “in all civil actions and proceedings in the United States district courts.” Fed. Rule Civ. Proc. 1. Our decision in Twombly expounded the pleading stan-dard for “all civil actions,” ibid., and it applies to antitrust and discrimination suits alike. See 550 U. S., at 555-556, and n. 3."

SCOTUS Decides Ashcroft v. Iqbal

The Supreme Court has issued its opinion in Ashcroft v. Iqbal, deciding that Iqbal's complaint failed to plead sufficient facts to state a claim for purposeful and unlawful discrimination by government officials. Here is an excerpt from the Syllabus:

"Iqbal’s pleadings do not comply with Rule 8 under Twombly. Several of his allegations—that petitioners agreed to subject him to harsh conditions as a matter of policy, solely on account of discriminatory factors and for no legitimate penological interest; that Ashcroft was that policy’s “principal architect”; and that Mueller was “instrumental” in its adoption and execution—are conclusory and not entitled to be assumed true. Moreover, the factual allegations that the FBI, under Mueller, arrested and detained thousands of Arab Muslim men, and that he and Ashcroft approved the detention policy, do not plausibly suggest that petitioners purposefully discriminated on prohibited grounds."

The Court's opinion and the dissents by Justice Souter and Justice Breyer can be viewed at

Wednesday, May 13, 2009

Supreme Court Limits Federal Jurisdiction to Compel Arbitration

ABA's Litigation News has a story on the Supreme Court's recent decision in Vaden v. Discover Bank. Here is an excerpt:

Federal court jurisdiction to enforce arbitration agreements is not as broad as one may have thought, according to a recent U.S. Supreme Court decision. Vaden v. Discover Bank.

In Vaden, the Supreme Court has held that a federal district court may exercise jurisdiction over a petition to compel arbitration of litigation pending in state court only where the complaint, and not the counterclaim, in the state action establishes a basis for federal jurisdiction. Where a complaint rests on state law only, a federal law counterclaim is not sufficient to vest jurisdiction in the district court.

Read the entire article by clicking here.

Monday, May 11, 2009

Eisenberg, Heise, and Wells Post Punitive Damages Article on SSRN

Professors Theodore Eisenberg, Michael Heise, and Martin T. Wells (all of Cornell) have recently posted an Article entitled Variability in Punitive Damages: An Empirical Assessment of the U.S. Supreme Court’s Decision in Exxon Shipping Co. v. Baker. Here is the Abstract:

Exxon Shipping Co. v. Baker acknowledged what virtually all methodologically sound punitive damages research shows. The Supreme Court relied in part on an article by the present authors and others to state that empirical studies undercut the most audible criticism of punitive damages and that no mass of runaway punitive awards existed. Paradoxically, the Court simultaneously expressed concern about jury predictability based on a high mean and standard deviation in the punitive-compensatory ratio published in our article. The Court therefore reduced a $2.5 billion punitive award relating to the Exxon Valdez oil spill to $500 million to implement a 1:1 punitive-compensatory ratio and stated that “the constitutional outer limit may well be 1:1.” This article shows that our empirical findings relied on by the Court do not support the unpredictability concern or widely applying the limiting ratio. The high mean and standard deviation are artifacts of not accounting for the key variable that explains punitive awards - the compensatory award. Stratifying the mean and standard deviation of the punitive-compensatory ratio by the level of the compensatory award shows that the ratio is reasonably stable in high award cases and significantly and explicably more variable in low award cases. Basing doctrine on summary statistics that combine these heterogenous distributions is not statistically supportable. The award reduction in Exxon Shipping may have promoted consistency with other high compensatory award cases but the 1:1 principle the case hints at is not statistically supportable across the broad range of compensatory awards, and could contribute to an inability to tailor punitive awards to the facts and circumstances of particular cases.

This Article may be downloaded by visiting

Tuesday, May 05, 2009

SCOTS Decides Case Addressing Reviewability of Post-Removal Remand Order

Yesterday the Supreme Court issued its decision in Carlsbad Technology, Inc. v. HIF Bio, Inc., a case that addressed the reviewability of a post-removal remand order. Here is the Syllabus:

Respondents filed a state-court suit alleging that petitioner had violated state and federal law in connection with a patent dispute. After removing the case to Federal District Court under 28 U. S. C. §1441(c), which allows removal if the case includes at least one claim over which the federal court has original jurisdiction, petitioner moved to dismiss the suit’s only federal claim, which arose under the Racketeer Influenced and Corrupt Organizations Act (RICO). Agreeing that respondents had failed to state a RICO claim upon which relief could be granted, the District Court dismissed the claim; declined to exercise supplemental jurisdiction over the remaining state-law claims under §1367(c)(3), which allows such a course if the court “has dismissed all claims over which it has original jurisdiction”; and remanded the case to state court. The Federal Circuit dismissed petitioner’s appeal, finding that the remand order could be colorably characterized as based on a “lack of subject matter jurisdiction” over the state-law claims, §1447(c), and was therefore “not reviewable on appeal,” §1447(d).

Held: A district court’s order remanding a case to state court after declining to exercise supplemental jurisdiction over state-law claims is not a remand for lack of subject-matter jurisdiction for which appellate review is barred by §§1447(c) and (d). With respect to supplemental jurisdiction, a federal court has subject-matter jurisdiction over specified state-law claims, see §§1367(a), (c), and its decision whether to exercise that jurisdiction after dismissing every claim over which it had original jurisdiction is purely discretionary, see, e.g., Osborn v. Haley, 549 U. S. 225 . It is undisputed that when this case was removed, the District Court had original jurisdiction over the federal RICO claim under §1331 and supplemental jurisdiction over the state-law claims, which were “so related to claims … within such original jurisdiction that they form[ed] part of the same case or controversy,” §1367(a). On dismissing the RICO claim, the court retained its statutory supplemental jurisdiction over the state-law claims. Its decision not to exercise that statutory authority was not based on a jurisdictional defect, but on its discretionary choice. See Chicago v. International College of Surgeons, 522 U. S. 156 . Pp. 3–6.

508 F. 3d 659, reversed and remanded.

Thomas, J., delivered the opinion for a unanimous Court. Stevens, J., and Scalia, J., filed concurring opinions. Breyer, J., filed a concurring opinion, in which Souter, J., joined.