Sunday, October 31, 2010

E.D. Va. Denies Remand in Diversity Case Removed More than 1 Year after Commencement of Action

Senior Judge Payne (E.D. Va.) recently issued an opinion in a case that was removed from state court based on diversity more than one year after the case was filed in state court, notwithstanding section 1446(b)'s seeming prohibition on such removals. His rationale was that 1446(b) only applies when the removed action was initially non-removable, and that in this case the action was initially removable based on diversity. Because the complaint was not served until more than one year after filing, and the defendants then removed the case within 30 days, the removal was proper and remand was denied. The case, Pair v. Welco-CGI Gas Technologies, Inc. may be downloaded at

Tuesday, October 26, 2010

Prof. Spencer Posts Article on Pre-Litigation Preservation Obligation on SSRN

Professor A. Benjamin Spencer (W&L) has recently posted an article entitled The Preservation Obligation: Regulating and Sanctioning Pre-Litigation Spoliation in Federal Court on SSRN. Here is the abstract:

The issue of discovery misconduct, specifically as it pertains to the pre-litigation duty to preserve and sanctions for spoliation, has garnered much attention in the wake of decisions by two prominent jurists whose voices carry great weight in this area. In Pension Committee of University of Montreal Pension Plan v. Bank of America Securities, Judge Shira Scheindlin - of the Zubulake e-discovery cases - penned a scholarly and thorough opinion setting forth her views regarding the triggering of the duty to preserve potentially relevant information pending litigation and the standards for determining the appropriate sanctions for various breaches of that duty. Not long afterwards, Judge Lee Rosenthal - Chair of the Judicial Conference Committee on the Rules of Practice and Procedure (the Standing Committee) and former Chair of the Civil Rules Advisory Committee - issued an opinion (Rimkus Consulting Group, Inc. v. Cammarata ) describing her understanding of many of the same issues touched on in Pension Committee. Both of these opinions have come at a time when the legal community is looking for better and more consistent guidance regarding the preservation obligations attendant to prospective litigation in the federal courts. Unfortunately, although other courts may draw some guidance from these two opinions, the fact is that variation among district courts and among the circuits will persist as long as policing pre-litigation preservation obligations remains largely the product of common law regulation via the inherent power of the courts.

Given this state of affairs, the time is ripe for a uniform federal approach to the pre-litigation duty to preserve and sanctions for spoliation. After reviewing the existing frameworks for determining the duty to pre-serve and imposing sanctions that prevail among the federal courts, this Article will explore how the Federal Rules of Civil Procedure might be amended to define and enforce pre-action preservation obligations more effectively and consistently across jurisdictions.

This article may be downloaded at

Tuesday, October 19, 2010

The Seventh Circuit Notes Rejection of Zippo Approach to Personal Jurisdiction in the Internet Context

Per Illinois v. Hemi Group LLC, --- F.3d ----, 2010 WL 3547647, (7th Cir.Sept. 14, 2010):

We wish to point out that we have done the entire minimum contacts analysis without resorting to the sliding scale approach first developed in Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D.Pa.1997). This was not by mistake. Although several other circuits have explicitly adopted the sliding scale approach, see Tamburo v. Dworkin, 601 F.3d 693, 703 n. 7 (7th Cir.2010) (collecting cases), our court has expressly declined to do so. In Tamburo, we said that we were hesitant “to fashion a special jurisdictional test for Internet-based cases.” Id. That case dealt specifically with an intentional tort (defamation) committed over the Internet and through e-mail. Long before the Internet became a medium for defamation, the Supreme Court in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), had decided the relevant jurisdictional standard for intentional torts that cross state lines. We concluded that “the principles articulated [in Calder ] can be applied to cases involving tortious conduct committed over the Internet.” Tamburo, 601 F.3d at 703.

We reach the same conclusion here. Zippo's sliding scale was always just short-hand for determining whether a defendant had established sufficient minimum contacts with a forum to justify exercising personal jurisdiction over him in the forum state. But we think that the traditional due process inquiry described earlier is not so difficult to apply to cases involving Internet contacts that courts need some sort of easier-to-apply categorical test. See Jennings v. AC Hydraulic A/S, 383 F.3d 546, 550 (7th Cir.2004) (“[A]lthough technological advances may alter the analysis of personal jurisdiction, those advances may not eviscerate the constitutional limits on a state's power to exercise jurisdiction over nonresident defendants.”).

Prof. Nagareda Posts Article on Litigation-Arbitration Dichotomy

UPDATE: I was unaware at the time of this post that Professor Nagareda recently passed away. This is a tragic loss for the legal academy and all proceduralists. He made significant and lasting contributions to civil procedure and complex litigation and will be sorely missed.

Professor Richard Nagareda recently posted an article entitled The Litigation-Arbitration Dichotomy Meets the Class Action on SSRN. Here is the abstract:

Courts and commentators often conceive of litigation and arbitration as dichotomous regimes for civil dispute resolution. Two new decisions from the Supreme Court provide the occasion to rethink this conventional view. In Shady Grove v. Allstate Insurance, the Court acknowledges that a class action often alters dramatically the incidence of claiming but, for purposes of the Rules Enabling Act, the Court deems this effect to be merely “incidental.” In Stolt-Nielsen v. AnimalFeeds, however, the Court deems the use of class-wide arbitration to be such a “fundamental” change as to lie outside the authority of arbitrators in the face of contractual silence as to class treatment.

This Article – for the annual Federal Courts, Practice & Procedure issue of the Notre Dame Law Review – urges a more synthetic understanding of litigation and arbitration. For all their differences, the Court’s accounts of class treatment under the Rules Enabling Act and the Federal Arbitration Act (FAA) evidence a deep, but undertheorized, convergence. Shady Grove is the latest of the Court’s efforts to map the proper relationship between federal and state law under the Erie and Hanna doctrines. This Article explains how the Court’s arbitration jurisprudence has come to replicate key structural features of the Erie and Hanna doctrines in litigation. The Article then underscores the transnational dimensions of arbitration in our modern world of globalized commerce – one that frames in a new light the holding in Stolt-Nielsen within the context of the Court’s thinking about extraterritoriality and transnational recognition of judgments in litigation.

The Article then turns to a case now before the Court – AT&T Mobility v. Concepcion – concerning an arbitration clause that would waive the opportunity for consumers to participate in either a class action or a class arbitration. The Article explains how the approach of the lower courts in Concepcion presents the Supreme Court with the counterpart, in the arbitration setting, to the mistaken application of state law rightly overturned in Shady Grove under the Hanna doctrine. Such a view nonetheless would afford ample latitude for contextual, Erie-like analysis of other arbitration clauses with class waivers tantamount to exculpatory clauses. The Article concludes by situating its synthetic conception of litigation and arbitration within ongoing debate over the proposed Arbitration Fairness Act.

The article may be downloaded by visiting

Eleventh Circuit Reverses Its Previous (Erroneous and Widely Criticized) Interpretation of CAFA

Per Cappuccitti v. DirecTV, Inc., --- F.3d ----, 2010 WL 4027719 (11th Cir. Oct. 15, 2010):

“On July 19, 2010, we issued an opinion in this case. Cappuccitti v. DirecTV, Inc., No. 09-14107, slip op. (11th Cir. July 19, 2010). We based our decision on our interpretation of the jurisdictional requirements of the Class Action Fairness Act of 2005 (“CAFA”), Pub.L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.), which we have elsewhere called a “statutory labyrinth.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1199 (11th Cir.2007). Subsequent reflection has led us to conclude that our interpretation was incorrect. Specifically, CAFA's text does not require at least one plaintiff in a class action to meet the amount in controversy requirement of 28 U.S.C. § 1332(a). Accordingly, we construe both parties' petitions for rehearing en banc to include petitions for panel rehearing, FN1 vacate our earlier opinion, and replace it with this one.” Cappucciti v. DirecTV, Inc., 2010 WL 4027719 (11th Cir. Oct. 15, 2010).

Thursday, October 14, 2010

Prof. Reinert Posts Article on Costs of Heightened Pleading

Professor Alex Reinert (Cardozo-Yeshiva) has posted an article entitled The Costs of Heightened Pleading on SSRN. Here is the abstract:

In Conley v. Gibson, 355 U. S. 41 (1957), the Supreme Court announced its commitment to a liberal pleading regime in federal civil cases, and for decades thereafter was steadfast in resisting ad hoc heightened pleading rules adopted by lower courts. Thus, from 1957 until a few years ago, most litigants could count on surviving a motion to dismiss a complaint for failure to state a claim so long as their pleading provided some minimal notice to the defendant of the nature of their claim. Enter Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). Iqbal and Twombly, on many accounts, two-stepped the Court from notice to heightened “plausibility” pleading for all civil cases. And it garnered applause and withering criticism. No one seems willing to defend the process that the Court used to abandon fifty years of pleading law — shorn as it was of any attention to the procedures contemplated by the Rules Enabling Act — but as a substantive matter, heightened pleading has many adherents. For heightened pleading advocates, it promises to reduce crowded dockets, make discovery available only to worthy litigants, and generally improve the quality of litigation to which attorneys and federal courts devote their attention. And at the bottom of it all lies a fundamental assumption — notice pleading lets in too many worthless cases and heightened pleading will keep them out. Despite this assumption, however, there has been almost no empirical analysis of the connection between merit and pleading.

This Article critically intervenes in this discussion by providing empirical data to question the widespread assumption about the benefits and costs of heightened pleading. The data reported here show that pleadings that would get by under a notice pleading standard but not a heightened pleading standard — what I refer to as “thin” pleadings — are just as likely to be successful as those cases that would survive heightened pleading. Indeed, the research summarized in this Article, gathered through a novel retrospective analysis of appellate and trial court decisions from 1990-1999, suggest that there is no correlation between the heft of a pleading and the ultimate success of a case.

This Article certainly does not end the debate, but it is better to begin on solid empirical footing than on supposition alone. Although there are limitations to the data reported here, they are more than we have had before, and they call attention to the costs of heightened pleading even as they suggest avenues for further research. As Congress, the judiciary, and the academy are engaged in a critical discussion as to how to respond to the Supreme Court’s most recent alteration of pleading jurisprudence, relevant empirical data should be part of the conversation.

The full version of the article may be downloaded by visiting