Judge Rosenthal Reviews Pleading Standards after Iqbal

Per Golden v. Austin County Sheriff's Dept., Slip Copy, 2009 WL 1835448 (S.D. Tex. June 26, 2009):

Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief may be granted.” Fed. R. Civ. P. 12(b) (6). The Supreme Court recently overruled the part of Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) holding that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Id. at 45-46. In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1968-69, 167 L.Ed.2d 929 (2007), the Court held that a complaint fails to comply with Rule 8 if it does not plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 127 S.Ct. at 1974.

In Ashcroft v. Iqbal, --- S.Ct. ----, No. 07-1015, --- U.S. ----, 129 S.Ct. 1937, --- L.Ed.2d ----, 2009 WL 1361536 (May 18, 2009), the Supreme Court elaborated on the pleading standards discussed in Twombly. The Court explained that “the pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Id. at *12 (citing Twombly, 550 U.S. at 555). Iqbal explained that “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556).

In accordance with the pleading principles described in Twombly and Iqbal, a “complaint must allege ‘more than labels and conclusions,’ ” and “ ‘a formulaic recitation of the elements of a cause of action will not do’ ....” Norris v. Hearst Trust, 500 F.3d 454, 464 (5th Cir.2007) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1965, 167 L.Ed.2d 929); see also Iqbal, --- U.S. ----, at ----, 129 S.Ct. 1937, --- L.Ed.2d ----, at ----, 2009 WL 1361536, at *12 (quoting Twombly, 550 U.S. at 555). “Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ ” Iqbal, --- U.S. ----, at ----, 129 S.Ct. 1937, ---L.Ed.2d ----, at ----, 2009 WL 1361536, at *12 (quoting Twombly, 550 U.S. at 557). “ ‘Rule 8(a)(2) ... requires a showing, rather than a blanket assertion, of entitlement to relief. Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds' on which the claim rests.’ ” Dark v. Potter, 293 F. App'x 254, 258 (5th Cir.2008) (unpublished) (per curiam) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1965 n. 3, 167 L.Ed.2d 929).

“To survive a Rule 12(b)(6) motion to dismiss, a complaint ‘does not need detailed factual allegations,’ but must provide the plaintiff's grounds for entitlement to relief-including factual allegations that when assumed to be true ‘raise a right to relief above the speculative level.’ ” Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir.2007) (footnote omitted) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1964-65, 167 L.Ed.2d 929); see also In re S. Scrap Material Co., 541 F.3d 584, 587 (5th Cir.2008) (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1965, 167 L.Ed.2d 929), cert. denied, S. Scrap Material Co. v. United States, --- U.S. ----, 129 S.Ct. 1669, ---L.Ed.2d ---- (2009). “Conversely, ‘when the allegations in a complaint, however true, could not raise a claim of entitlement to relief, ‘this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.’ ' ” Cuvillier, 503 F.3d at 401 (quoting Twombly, 550 U.S. 544, 127 S.Ct. at 1966, 167 L.Ed.2d 929).

Hessick Posts Article on Federal Question Jurisdiciton on SSRN

F. Andrew Hessick III (Visiting Associate Professor, Arizona) has recently published an Article entitled The Common Law of Federal Question Jurisdiction on SSRN. Here is the Abstract:

The Supreme Court has repeatedly stressed that the role of the judiciary interpreting statutes is to declare the law as intended by Congress. But the Court historically has not followed that practice in interpreting the statute conferring federal question jurisdiction. The most notorious example is the well pleaded complaint rule, which the Court developed based on its own policy determinations about the appropriate role of the federal courts. In recent terms, the Court has developed various new doctrines expanding and contracting federal question jurisdiction without regard to Congressional intent. This Article contends that these recent developments reflect that, contrary to its statements about the proper role of the judiciary, the Court increasingly perceives itself as the primary regulator of federal question jurisdiction. The Article also contends that this practice has resulted in a highly manipulable and unstable law of federal question jurisdiction.

The Article may be downloaded by visiting http://ssrn.com/abstract=1408170.

Prof. Sherman Posts Article on MDL Process on SSRN

Prof. Edward Sherman recently posted an Article entitled The MDL Model for Resolving Complex Litigation if a Class Action is Not Possible on SSRN. Here is the Abstract:

This article reviews the origins and development of multidistrict litigation before proceeding to examine its ability to take the place of class actions for the resolution of complex litigation. After noting that class actions are increasingly unavailable, particularly in pharmaceutical products liability cases, the article explores the management of the In re Vioxx Products Liability Litigation MDL. The article concludes that the MDL model can allow for the efficient resolution of complex litigation where a class action is not available, but creative management by the MDL transferee court is crucial. Highlighted are the use bellwether trials and the global settlement across jurisdictional lines, crafted by counsel in both federal and state courts and blessed and overseen in its execution by the MDL court. Professional ethics issues regarding requiring opting-in plaintifff’s attorneys to urge their clients to participate in the global settlement and, if not, to withdraw, are discussed. The growing use of multidistrict transfers of discreet litigation to a single court in various states is examined. Finally, the article calls for Congress to enhance the powers of MDL courts and to learn from the experience of the states and district courts that have experimented, often on an ad hoc basis, with the MDL model.

The full-text version of the Article may be downloaded by visiting http://ssrn.com/abstract=1407588.

Saddam Hussein's U.S. Torture Victims in Persian Gulf War Thwarted by Bush From Suing Iraq for Damages in Federal Court

Per BNA's U.S. Law Week, June 9, 2009:

Victims of Saddam Hussein's abuse during and after the 1991 Persian Gulf War may not pursue tort claims against Iraq, the U.S. Supreme Court rules unanimously. President Bush validly exercised his statutory authority to shield Iraq from such claims, the court holds.

The plaintiffs invoked an exception in the Foreign Sovereign Immunities Act that lifts foreign states' general immunity with respect to damages claims when plaintiffs bring torture-related claims against designated state sponsors of terrorism. But the court says that Bush properly invoked provisions enacted in 2003 and 2008 to bar that exception's application to claims against Iraq, and thus deprive federal courts of subject matter jurisdiction.

Supreme Court Says Due Process Required West Virginia Justice To Recuse Himself From Case Involving Big Donor to His Campaign

Per BNA's U.S. Law Week, June 9, 2009:

A justice of the West Virginia Supreme Court of Appeals should have recused himself from a case because the biggest donor to his judicial election campaign was one of the parties in the case, the U.S. Supreme Court holds. The case has a $50 million verdict hanging in the balance, and the court says that the probability of bias was so extreme that due process required the justice's recusal.

The court notes that not every campaign contribution will require recusal, but says that “there is a serious risk of actual bias—based on objectively reasonable perceptions—when a person with a personal stake in a particular case had a significant and disproportionate influence in placing the judge on the case by raising funds or directing the judge's election campaign when the case was pending or imminent.” Supporters of the ruling say that it will put faith back in the judicial system, while detractors are saying that the new standard is “murky” and “ominous."

SCOTUS Grants Cert in Case that Will Determine Corporation's Principal Place of Business for Diversity Purposes

On June 8, 2009, the Supreme Court granted certiorari in Hertz Corp. v. Friend, No. 08-1120. Here is the summary of the issues presented by BNA's U.S. Law Week's Supreme Court Today:

Ruling Below: (9th Cir., 297 Fed. Appx. 690)

Summary of Ruling Below: Defendant corporation's relevant business activities are significantly larger in California than in its next largest state, and thus, because California is litigant's principal place of business under "place of operations" test, nerve center test will not be applied to determine corporation's state citizenship for purposes of diversity jurisdiction; district court's order remanding to state court class action filed by, and exclusively on behalf of, California residents is affirmed.

Question(s) Presented: For purposes of determining principal place of business for diversity jurisdiction citizenship under 28 U.S.C. § 1332, can court disregard location of nationwide corporation's headquarters--i.e., its nerve center?

Eight Circuit Refuses to Excuse Untimely Appeal Based on Lawyer's Claim of Failing to Received Electronic Notice

The Eighth Circuit recently issued an opinion that refused to excuse an untimely appeal based on the excuse that the attorney failed to receive electronic notice of the district court's decision via the court's CM/ECF system:

The appellants (“American Boat”) brought this negligence action against the United States for failing to maintain the navigable channel of the lower Mississippi River. After the district court granted summary judgment for the United States, American Boat filed a Motion to Amend Judgment, or in the Alternative for Reconsideration. The district court denied this motion, and the time for appeal expired without any action by American Boat. Four months later, American Boat filed a Motion to Reopen the Time to File an Appeal, claiming it did not receive notice of the denial of its Motion to Amend. The district court denied the Motion to Reopen, finding that American Boat received timely electronic notice. American Boat appealed, and we reversed the district court’s judgment and remanded for an evidentiary hearing to determine whether American Boat should be permitted to reopen the time to file an appeal.1 After conducting an evidentiary hearing, the district court again denied American Boat’s Motion to Reopen. We now affirm.

The opinion can be viewed here. Thanks to How Appealing.