Let me first tell you a bit about the Levitt suit against Yelp.  Plaintiffs, [...]]]> I’m just at the start of my pleadings journey with my Civil Procedure II students, which has got me reading lots of terrific scholarship on the regrettable impact of Twombly and Iqbal.  Federal district court Judge Chen’s recent dismissal of the third amended complaint in Levitt v. Yelp, 2011 WL 5079526, seems a perfect example of why Twombly and Iqbal’s insistence upon factual plausibility before discovery transforms FRCP 12(b)(6) motions into something far different from sussing out “fair notice” and more like summary judgment as Suja Thomas astutely suggests.  (Scott Dodson and Adam Steinman also have insightful pieces on Twombly and Iqbal — New Pleading, New Discovery” and “The Pleading Problem,” respectively).

Let me first tell you a bit about the Levitt suit against Yelp.  Plaintiffs, two subclasses of business owners, alleged that Yelp unlawfully manipulated its business review pages to induce them to pay for advertising in violation of California’s civil extortion statute.  In a previous ruling, the court dismissed the complaint with leave to amend because it lacked factual allegations from which a threat might be plausibly inferred.  The Third Amended Complaint (TAC) added allegations concerning Yelp’s dealing with plaintiff Wheel Techniques (WT) in late 2008 and early 2009.  According to the TAC, soon after WT noticed negative reviews on its Yelp page that did not correspond with its actual customers, it received calls from Yelp representatives seeking advertisements.  Plaintiffs alleged that Yelp created false reviews to induce WT to advertise with it and that “200 Yelp employees or individuals acting on their behalf have written reviews of businesses on Yelp.” Plaintiffs alleged that when Wheel Techniques contacted Yelp to ask why a competitor had a high rating on Yelp, the Yelp representative told him the competitor advertised and “we work with your reviews if you advertise with us.” Id. ¶ 78. On March 8, 2010, Wheel Techniques was again contacted to purchase advertising. Upon declining, Plaintiffs allege that a 1–star review was moved to the top of the business page “within minutes” as a threat to induce Wheel Techniques to advertise. Id. ¶¶ 79–81. Plaintiffs allege that Wheel Techniques owner John Mercurio was told several Yelp employees had been fired and computers had been frozen “as a result of scamming related to advertising.” Id. ¶ 82.

The district court ran through the Twombly-Iqbal standard, with a few tweaks.  It explained that a complaint may be dismissed for failure to state a claim if it lacks a cognizable legal theory or sufficient facts alleged under a cognizable legal theory.  Citing Twombly, the court noted that a motion to dismiss should be granted if a plaintiff fails to plead “enough facts to state a claim to relief that is plausible on its face.” “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”  The court stated that “allegations of material fact are taken as true and construed in the light most favorable to the non-moving party.”  (The “construed in the light most favorable” to the non-movant language was absent in Iqbal).  Citing Iqbal, the court said that: it “need not, however, accept as true pleadings that are no more than legal conclusions or the ‘formulaic recitation of the elements’ of a cause of action.   Determining whether a complaint states a plausible claim for relief … [is] a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.”  The court dismissed the complaint for failure to state a claim.  Here’s the court’s explanation:

The TAC, like the SAC, fails to allege facts sufficient to support a conclusion that Yelp created any content. Plaintiffs have added an allegation that “approximately 200 Yelp employees or individuals acting on behalf of Yelp have written reviews of businesses on Yelp,” TAC 37, and that “Yelp has paid users to write reviews,” id. ¶ 38. Despite these allegations, however, it remains “entirely speculative that Yelp manufactures its own negative reviews or deliberately manipulates reviews to the detriment of businesses who refuse to purchase advertising,” and “[t]he [TAC] provides no basis from which to infer that Yelp authored or manipulated the content of the negative reviews complained of by plaintiffs,” Order Dismissing SAC at 17.  That Yelp employees have written reviews, even for pay, does not raise more than a mere possibility that Yelp has authored or manipulated content related to Plaintiffs in furtherance of an attempt to “extort” advertising revenues. See Iqbal, 129 S.Ct. at 1950 (“[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not ‘show[n]‘-‘that the pleader is entitled to relief.’ ”) (quoting Fed.R.Civ.P. 8(a)(2)). Similarly, that Wheel Techniques noticed negative reviews of its business that did not match its customer records does not support the logical leap that Yelp created those reviews. See TAC ¶¶ 74–75. Nor does an allegation that Mr. Mercurio (Wheel Techniques’ owner) “was told” by an unnamed source “that a former Yelp employee stated that Yelp, upon information and belief, terminated a group of sales employees … as a result of scamming related to advertising” and that “the computers of sales employees were, at one point, frozen to prohibit employees from being able to change reviews” raise more than a speculative possibility that Yelp employees created or substantively manipulated the content of Plaintiffs’ reviews in this case. See TAC ¶ 82. “Scamming related to advertising” could have referred to a host of practices not involving manufacturing of false reviews.

Despite the court’s claim that it would draw all inferences in plaintiffs’ favor, it seemed to do the opposite.  The plaintiffs provided a factually plausible account of extortion: that Yelp employees write reviews; that after WT notice negative reviews that did not accord with its customer records, a Yelp representative called seeking advertising; that a Yelp employee told WT that it works with customers that advertise with it; that as soon as WT refused Yelp’s advertising solicitation, a one-star rating appeared at the top of its Yelp page; and that WT’s owner learned that Yelp employees had been fired due to scamming related to advertising.  Nonetheless, the court reads the allegations seemingly in the light most favorable to defendant movant, reasoning that scamming related to advertising could have referred to a host of practices not involving false reviews and that even if Yelp hired people to write reviews it does not raise more than a mere possibility that it manipulated content regarding WT to extort advertising revenues.  The court seemingly ignores the allegations related to the solicitation calls and the subsequent negative review appearing on WT’s page after it declined Yelp’s second advertising solicitation.  It’s difficult to imagine what more plaintiffs could have alleged at this stage in the game.  Taking a cue from Scott Dodson’s article “New Pleading, New Discovery,” plaintiffs need discovery to figure out if Yelp employees did what the circumstances suggest–manipulate reviews to bully WT and other plaintiffs into buying advertising.  In the end, Suja Thomas has it right.  This whole endeavor sounds a lot more like a summary judgment motion than a motion to dismiss.

Speaking of exciting developments, it appears that the Stop Online Piracy Act (SOPA) is dead, at least for now. House Majority Leader Eric Cantor has said that the bill will not move forward until there is a consensus position on it, which is to say, never. Media sources credit the Obama administration’s opposition to some of the more noxious parts of SOPA, such as its DNSSEC-killing filtering provisions, and also the tech community’s efforts to raise awareness. (Techdirt’s Mike Masnick has been working overtime in reporting on SOPA; Wikipedia and Reddit are adopting a blackout to draw attention; even the New York City techies are holding a demonstration in front of the offices of Senators [...]]]> Thanks to Danielle and the CoOp crew for having me! I’m excited.

Speaking of exciting developments, it appears that the Stop Online Piracy Act (SOPA) is dead, at least for now. House Majority Leader Eric Cantor has said that the bill will not move forward until there is a consensus position on it, which is to say, never. Media sources credit the Obama administration’s opposition to some of the more noxious parts of SOPA, such as its DNSSEC-killing filtering provisions, and also the tech community’s efforts to raise awareness. (Techdirt’s Mike Masnick has been working overtime in reporting on SOPA; Wikipedia and Reddit are adopting a blackout to draw attention; even the New York City techies are holding a demonstration in front of the offices of Senators Kirstin Gillibrand and Charles Schumer. Schumer has been bailing water on the SOPA front after one of his staffers told a local entrepreneur that the senator supports Internet censorship. Props for candor.) I think the Obama administration’s lack of enthusiasm for the bill is important, but I suspect that a crowded legislative calendar is also playing a significant role.

Of course, the PROTECT IP Act is still floating around the Senate. It’s less worse than SOPA, in the same way that Transformers 2 is less worse than Transformers 3. (You still might want to see what else Netflix has available.) And sponsor Senator Patrick Leahy has suggested that the DNS filtering provisions of the bill be studied – after the legislation is passed. It’s much more efficient, legislatively, to regulate first and then see if it will be effective. A more cynical view is that Senator Leahy’s move is a public relations tactic designed to undercut the opposition, but no one wants to say so to his face.

I am not opposed to Internet censorship in all situations, which means I am often lonely at tech-related events. But these bills have significant flaws. They threaten to badly weaken cybersecurity, an area that is purportedly a national priority (and has been for 15 years). They claim to address a major threat to IP rightsholders despite the complete lack of data that the threat is anything other than chimerical. They provide scant procedural protections for accused infringers, and confer extraordinary power on private rightsholders – power that will, inevitably, be abused. And they reflect a significant public choice imbalance in how IP and Internet policy is made in the United States.

Surprisingly, the Obama administration has it about right: we shouldn’t reject Internet censorship as a regulatory mechanism out of hand, but we should be wary of it. This isn’t the last stage of this debate – like Wesley in The Princess Bride, SOPA-like legislation is only mostly dead. (And, if you don’t like the Obama administration’s position today, just wait a day or two.)

Cross-posted at Info/Law.

“This paper provides the first comprehensive assessment of the Federal Judicial Center’s long-anticipated study of motions to dismiss for failure to state a claim after Iqbal v. Ashcroft. Three primary assessments are made of the FJC’s study. First, there are reasons to be concerned that the study may be providing an incomplete picture of actual Rule 12(b)(6) activity. Even if [...]]]> Several months ago, the FJC put out a well-publicized study assessing the results of Twombly-Iqbal on motions practice.  It concluded that there was little reason, overall, for concern that the Supreme Court’s new pleadings jurisprudence had worked a revolutionary change down below.  Lonny Hoffman (Houston) has just released an important new paper which questions the methods and conclusions of the FJC’s work.  He pulls no punches:

“This paper provides the first comprehensive assessment of the Federal Judicial Center’s long-anticipated study of motions to dismiss for failure to state a claim after Iqbal v. Ashcroft. Three primary assessments are made of the FJC’s study. First, there are reasons to be concerned that the study may be providing an incomplete picture of actual Rule 12(b)(6) activity. Even if the failure to capture all relevant motion activity was a non-biased error, the inclusiveness problem is consequential. Because the study was designed to compare over time the filing and grant rate of Rule 12(b)(6) motions, the size of the effect of the Court’s cases turns on the amount of activity found. Second, even if concerns are set aside that the collected data may be incomplete, it misreads of the FJC’s findings to conclude that the Court’s decisions are having no effect on dismissal practice. The FJC found that after Iqbal, a plaintiff is twice as likely to face a motion to dismiss. This sizeable increase in rate of Rule 12(b)(6) motion activity represents a marked departure from the steady filing rate observed over the last several decades and means, among other consequences, added costs for plaintiffs who have to defend more frequently against these motions. The data regarding orders resolving dismissal motions even more dramatically shows the consequential impacts of the Court’s cases. There were more orders granting dismissal with and without leave to amend, and for every case category examined. Moreover, the data show that after Iqbal it was much more likely that a motion to dismiss would be granted with leave to amend (as compared to being denied) both overall and in the three largest case categories examined (Civil Rights, Financial Instruments and Other). Employment Discrimination, Contract and Torts all show a trend of increasing grant rates. In sum, in every case type studied there was a higher likelihood after Iqbal that a motion to dismiss would be granted. Third, because of inherent limitations in doing empirical work of this nature, the cases may be having effects that the FJC researchers were unable to detect. Comparing how many motions were filed and granted pre-Twombly to post-Iqbal cannot tell us whether the Court’s cases are deterring some claims from being brought, whether they have increased dismissals of complaints on factual sufficiency grounds, or how many meritorious cases have been dismissed as a result of the Court’s stricter pleading filter. Ultimately, perhaps the most important lesson to take away from this last assessment of the FJC’s report is that empirical study cannot resolve all of the policy questions that Twombly and Iqbal raise.”

I should disclose that I provided Lonny comments on an earlier draft, and overall I think he’s done an incredible (and generally very fair) job.  One thing to think about, as always when evaluating litigation data, is the degree to which we would expect to see any results at all given case selection effects.  That Lonny does observe such substantively significant changes notwithstanding selection tells us something about how dramatic the Twiqbal decisions really were.

As a recent article in the NYTimes describes, however, many of the estimated 80,000 married same-sex couples are finding it difficult to divorce if and when the need arises. As I explain in forthcoming article in the Boston University Law Review, this difficulty is “the result of the confluence of two factors.” First, many same-sex couples are unable to get [...]]]> Later this month, New York will join six other jurisdictions in permitting same-sex couples to marry. The other six jurisdictions are Connecticut, Iowa, Massachusetts, New Hampshire, Vermont, and the District of Columbia. When the marriages begin, same-sex couples from all over the United States will be able to marryin New York, because New York (like the other jurisdictions listed above) has no residency requirement for marriage.

As a recent article in the NYTimes describes, however, many of the estimated 80,000 married same-sex couples are finding it difficult to divorce if and when the need arises. As I explain in forthcoming article in the Boston University Law Review, this difficulty is “the result of the confluence of two factors.” First, many same-sex couples are unable to get divorced in their home states because they live in states with statutory and/or constitutional provisions stating that the jurisdiction will not recognize marriages between two people of the same sex. Second, they may be unable to divorce somewhere other than their home state because “it is widely understood that for a court to have the power to grant a divorce, one of the spouses must be domiciled in the forum[.]”

Being unable to get divorced is not simply a theoretical problem. During the time in which the parties remain married (despite their efforts to the contrary), the parties continue to accrue rights and responsibilities vis-à-vis each other. They may, for example, continue to accrue rights to marital property and obligations for debt incurred during the continued relationship.

My Article, Modernizing Divorce Jurisdiction: Same-Sex Couples and Minimum Contacts, considers why this anomalous jurisdictional rule arose in the first instance, why it has persisted over time, and whether it can be squared with contemporary principles of personal jurisdiction. Previously, divorce jurisdiction and the domicile rule were subjects of significant interest to the courts and to legal scholars. Likely to the surprise of many today, the Supreme Court decided a number of cases involving these issues in the middle of the last century. More recently, however, (with a few notable exceptions) there has been little contemporary judicial or scholarly engagement with the issue. Instead, the domicile rule is generally accepted today as an example of family law exceptionalism.

In my piece, I resist the myth of family law exceptionalism by critically considering whether the domicile rule can be reconciled with general principles of state court jurisdiction. Ultimately, as others including Rhonda Wasserman have done, I argue that the domicile rule should be abandoned. Instead, actions to terminate a marriage should be governed by the usual rules of personal jurisdiction. While this change alone would help many of the “wedlocked” same-sex couples (to borrow an apt phrase from Mary Pat Byrn and Morgan Holcomb), some may still be stranded. Accordingly, I conclude the Article by offering a set of normative proposals to ensure that all spouses have at least one forum in which to divorce.

Pennoyer rests at ”Riverview Cemetery … located just south of Portland overlooking the Willamette river.”  RIP, Sylvester.

The Delaware Court of Chancery recently suggested one way for corporations to protect themselves from these practices. Last [...]]]> Corporate litigation has long followed a predictable pattern. When a corporation announces a restatement or similar bad news, shareholders race to the courtroom, filing nearly identical complaints in multiple courts. Congress sought to halt this practice in federal securities cases through the Private Securities Litigation Reform Act, but the practice continues unabated in state law cases. The Delaware Court of Chancery has been the clear loser of this filing strategy. Empirical evidence suggests that shareholder lawsuits are leaving Delaware in droves. Defense lawyers even claim that plaintiffs now use an “Anywhere but Chancery” approach when filing state law class actions and derivative suits.

The Delaware Court of Chancery recently suggested one way for corporations to protect themselves from these practices. Last summer, Vice Chancellor Laster stated in dicta that “if boards of directors and stockholders believe that a particular forum would provide an efficient and value-promoting locus for dispute resolution,” these corporations should adopt a charter provision selecting this forum as the exclusive venue for shareholder lawsuits.  This idea was not unprecedented—a small number of companies had already included such provisions in their governing documents—but it was the first time (to my knowledge) that the concept received judicial approval.  The defense bar quickly picked up the charge, with Wachtell, Lipton, Rosen & Katz recommending to its corporate clients that they adopt a charter amendment requiring that the Delaware Court of Chancery be the “sole and exclusive forum” for any breach of fiduciary duty suit filed against the company or its officers, directors, or shareholders. A recent memorandum by Latham & Watkins reports that more than 70 companies have included these provisions in their bylaws or charters.

This development raises intriguing questions about how much control corporations should have when it comes to lawsuits filed by their shareholders. If corporations can choose the venue of these suits, can they also control other aspects of the litigation? As just one example, could a corporation adopt a charter provision limiting who can file a shareholder derivative suit on its behalf? Under current state law, any shareholder can file a shareholder derivative suit on behalf of a corporation. The law imposes minimal adequacy requirements, but otherwise a shareholder who owns as little as a single share of stock in a given corporation can file a multi-million dollar lawsuit on the corporation’s behalf. This power is unprecedented in the corporate world—shareholders generally do not have any individual power unless they own a majority of the corporation’s shares. The few exceptions to this rule, such as proxy access rules, require shareholders to own a certain percentage of shares (usually 5 percent). Given the problems in many shareholder lawsuits, I imagine that standing limitations might be appealing to many corporate boards.

Alternatively, could a corporation adopt a charter or bylaw provision requiring that shareholder claims be subject to arbitration? Part of the risk in a shareholder lawsuit is the uncertainty over how the claims will fare before a judge or jury. Corporations might try to alter the settlement dynamics by mandating that these claims be decided in arbitration.

I am not sure if provisions of this type would pass judicial muster, but I would not be surprised to see corporations test these limits over the next several years. The law does offer some general guideposts that might help corporate lawyers think about these questions. First, corporations should include these provisions in corporate charters, not bylaws. Charter amendments must be approved by the board and a majority of the shareholders; bylaw amendments, in contrast, can be approved by the board acting alone in most instances. It is one thing if the shareholders approve limitations on the board’s liability. It is obviously more problematic if the board limits its own liability. The Northern District of California recognized this point last year, invalidating a bylaw provision that purported to establish Delaware as the sole venue for certain corporate lawsuits (as discussed here).

Second, corporations likely cannot alter the substantive law at issue in the lawsuit. Some corporations might not be content tinkering with the procedural rules and might try to limit substantive fiduciary duties. Given recent judicial decisions, I cannot imagine that courts would allow such limitations. Nor do I think courts would allow procedural restrictions that have the substantive effect of eliminating shareholder lawsuits. For example, a corporation might adopt a provision stating that no shareholder can file a derivative suit on its behalf unless the shareholder owns at least twenty percent of the corporation’s stock. In most large public corporations, this restriction would have the practical effect of eliminating shareholder derivative suits, making it impossible to enforce the board’s fiduciary duties.

Third, any provision should only apply to conduct that occurs after the provision is adopted. A board should not be allowed to breach its duties and then adopt procedural protections that help shield it from liability.

Beyond these restrictions, my own view is that companies should be allowed to alter the procedural rules in shareholder litigation, at least in certain respects. But I would be interested in hearing the thoughts of others. Is there some obvious dividing line between venue provisions and standing rules, for example, that I am missing?

I’m a legal services attorney in Boston. My employer, Massachusetts Law Reform Institute (MLRI), has as one of its primary tasks to connect the state’s field programs, where individual client representation occurs, with larger political bodies, including legislatures and administrative agencies, where the systemic changes affecting our clients most often take place. (The legal services programs in many states include organizations comparable to MLRI; we are sometimes known by the somewhat infelicitous name “backup centers.”) Among the programs with which MLRI is in communication is the Harvard Legal Assistance Bureau, and I would take this moment to acknowledge the high regard in which I and my colleagues regard their work.

The substantive area [...]]]> Thanks for the invitation to participate in this interesting and provocative symposium.

I’m a legal services attorney in Boston. My employer, Massachusetts Law Reform Institute (MLRI), has as one of its primary tasks to connect the state’s field programs, where individual client representation occurs, with larger political bodies, including legislatures and administrative agencies, where the systemic changes affecting our clients most often take place. (The legal services programs in many states include organizations comparable to MLRI; we are sometimes known by the somewhat infelicitous name “backup centers.”) Among the programs with which MLRI is in communication is the Harvard Legal Assistance Bureau, and I would take this moment to acknowledge the high regard in which I and my colleagues regard their work.

The substantive area of my work is employment law. It is no surprise that during the past three years of our country’s Great Recession, the importance of the unemployment insurance system for our clients has increased enormously and, consequently, it has occupied a greater portion of my time than might otherwise have been the case.

I’m not a statistician nor do I work in a field program representing individual clients, so my comments will not address in any detail the validity of the HLAB study or the conclusions that may properly be drawn from it. As one member of the community of Massachusetts legal services attorneys, however, I have an obvious interest in the way the study portrays us: we are variously described as self-protective, emotional, distrustful of being evaluated, and reluctant to the point of perverseness in participating in randomized studies of the kind the authors wish to conduct. Our resistance in this regard has itself already been the subject of comment here. Happily, it is not often that one looks into what seems to be a mirror and sees the personage looking back wearing a black hat and a snarl. But when it does happen, it’s hard to look away without some effort at clarification. So I will devote my contribution to the symposium to the topic of the perceived reluctance of the legal services community to cooperate in randomized trials. It goes without saying, but the following thoughts are those of only one member of a larger community.

My understanding is that in the HLAB study, no significant case evaluation occurred prior to randomization. Many of us in legal services view with trepidation the idea of ceding control over case selection to the randomization process. Others have more sanguine views, either because they assume that randomization is already taking place or that it ought to be. For example, in his comments from a few months ago, Dave Hoffman was working under the assumption that to randomize client selection would not change an agency’s representation practices at all, and on that basis, he criticized resistance to randomized control trials as “trying to prevent research from happening.”

The authors of the study are enthusiastic about randomization not only because of its scientific value in statistical research but also because it can help to solve one of the thorniest problems facing legal services programs – the scarcity of resources as compared to the demand. As long as the demand for legal assistance outstrips the supply, Professor Greiner has said, randomization – a roll of the dice or the flip of a coin — is an easy and appropriate way to decide who gets representation and who does not.

I believe it’s erroneous to assume that randomization would not change representation practices, at least in the area of legal services in which I work. I also acknowledge that it is possible, at least theoretically, for all the cases in a randomized control trial to have met the provider’s standards for representation. This would provide some measure of reassurance. However, in one area of law, immigration asylum cases, the authors have concluded that time constraints make such an effort unworkable.

Moreover, to many of us allowing the attorney-client relationship to be the product of random selection rather than conscious choice would mean not only that clients with meritorious claims are being denied representation (the familiar problem of scarcity), but also that clients with unmeritorious claims are receiving representation in the furtherance of scientific experimentation. This latter outcome would almost certainly raise issues of ethics and professional responsibility. To take just one example, a lawyer whose client was assigned blindly rather than selected after at least some case evaluation could easily find himself or herself risking a lack of candor to the tribunal in order to afford the zealous representation the law requires or withdrawing from representation altogether. Neither of those results, it seems to me, would further the interests of justice or the efficient use of legal resources.

Of course we in legal services do not find it easy to make decisions about which clients to represent. Demand swamps supply, making triage (even choosing principles for triage) difficult. It is similarly difficult to allocate resources between individual representation and systemic advocacy. Among the balancing acts in which we in legal services are perpetually engaged is to attempt to meet both these important goals. Shall we spend our resources advocating for a systemic change that is necessarily speculative but potentially of great significance, or shall we focus on the representation of an individual client, a matter of less sweeping significance, but one with a frequently higher probability of success and one that might also shine a useful light on the proper direction of our systemic work? Notwithstanding the difficulties and uncertainties, it seems to me that it is our obligation to choose our clients and our priorities and not to consign the job to a coin flip, even in the face of overwhelming demand. The fact that we will make some wrong choices does not relieve us of the burden of making them.

As is the case with the study’s authors, I regard the improvement of the legal services delivery system as part of our systemic advocacy. If randomized control trials can inform us about what works and what does not and can do so without interfering with our professional responsibility as lawyers, I would welcome them.

Volume 58, Issue 3 (February 2011)

Articles

Comments

While lawsuits can serve to redress victims for these harms, they also risk compounding the severity of these privacy [...]]]> Cyber harassment often invades victims’ privacy by exposing their sensitive personal information, revealing photographs, and the like.  Because search engines reproduce information cached online, time’s passage cannot alleviate their reputational, emotional, and physical damage.  Unlike newspapers, which were once only easily accessible in libraries after their publication, search engines now index all content on the web, and can produce it instantaneously.  Victims must live with digital privacy invasions that are deeply humiliating, reputation-harming, and potentially dangerous, as well as searchable and accessible from anywhere, and by anyone, in the world.  Often, the information is taken out of context, producing a distorted and damaging view of the person.

While lawsuits can serve to redress victims for these harms, they also risk compounding the severity of these privacy problems.  Law often permits victims to sue perpetrators for intentional infliction of emotional distress, invasion of privacy, and defamation.  But victims typically must bring such civil lawsuits in their own names.  As a result, the complaints, which are available to the press and interested individuals, further publicize the cyber harassment, exacerbating the privacy harms suffered by victims.  In turn, victims may refrain from pursuing their harassers in court not because they lack legitimate claims but because they fear exposing themselves to further privacy invasions.

Hawaii’s proposed Senate Bill 288, if enacted, could be invoked to combat this problem when the online harassment occurs in domestic abuse cases.  The bill would permit pseudonymous papers “in cases of alleged domestic abuse where the alleged victim has already received an order of protection, temporary restraining order, or protective order against the accused party.”  The bill covers cases where pseudonymous filing is “reasonably necessary to protect the privacy of the alleged victim and will not unduly prejudice the prosecution of the defense.”  The proposed legislation permits victims of domestic abuse, including cases involving online harassment, to bring law’s coercive power to bear against perpetrators.  Because the bill allows courts to weigh the victim’s interest in privacy against the public’s interest in disclosure, it aims to protect privacy and transparency.  Disappointingly, however, the bill only covers cases involving domestic abuse, thus failing to reach instances of online harassment involving privacy invasions where victims may refuse to sue their attackers for fear of publicity.

For the Cultural Cognition Project, the way that we talk about legal decisions – and decisionmakers [...]]]> The partisanship and bad faith of judges who disagree with us has never been more obvious, or more pernicious. For many, the most irritating personality flaw of judicial politicos (and their fellow-travelers) isn’t the bottom-line results of the opinions themselves, it is that judges refuse to acknowledge their own biases, though it’s evident that they aren’t neutral umpires, but rather players in the game.  Indeed, almost every decision you read about these days comes accompanied by a reference  to the political party of the appointing President – as if you needed the help!  As Orin Kerr has brilliantly pointed out, “people who disagree with me are just arguing in bad faith.”

For the Cultural Cognition Project, the way that we talk about legal decisions – and decisionmakers – is a subject of study and concern.  We decided to take a careful look at this topic — which we’ve previously touched on in work like Whose Eyes Are You Going To Believe. Our motivation was to investigate how constitutional norms requiring neutrality in fact finding interact with individuals’ tendencies to perceive facts and risks in ways congenial to their group identities.  Building on Hastorf/Cantril’s social psychology classic, They Saw a Game: A Case Study, we’ve written a new piece about how motivated cognition can de-stabilize constitutional doctrine, render legal fact-finders blind to their own biases, and inflame the culture wars. Our resulting paper, “They Saw a Protest”: Cognitive Illiberalism and the Speech-Conduct Distinction, results from my collaboration with Dan Kahan, Don Braman, Danieli Evans, and Jeff Rachlinski.  The paper is just up on SSRN, and I figured to jump-start the conversation by using this post to talk about our experimental approach and findings.  (I think that Kahan is blogging on Balkinization later in the week about the normative upshot of Protest.)

Setup:

Protest’s experimental strategy was simple.  We first collected information about the cultural worldviews of a nationally representative sample of subjects, organized through Polimetrix.  We then described for these subjects the background of a lawsuit by political protestors against individual police officers and the police department.  We showed the subjects a video that we described as the major piece of evidence in the case, and which both parties advanced in support of their point of view.  In one condition of the experiment, the protestors in the video were described  as “members of a group that opposes permitting doctors and nurses to perform abortions at the request of pregnant women” [the abortion condition]; in another, as “members of a group that opposes the ban on allowing openly gay and lesbian citizens to join the military” [the recruitment condition].  The protestors’ complaint, the vignette stated, alleged that the police had “violated their rights by ordering them to end their protest at” either “an abortion clinic” or “a college campus recruitment center the day the Army was scheduled to interview students who were considering enlisting.”  Subjects were told that the defendants claimed halting the protest was justified by a law entitled the “Freedom to Exercise Reproductive Rights Law,” in the abortion condition, or the “Freedom to Serve with Honor Law,” in recruitment condition. That law made it illegal for  “any person to intentionally (1) interfere with, (2) obstruct, (3) intimidate, or (4) threaten any person who is seeking to enter, exit, or remain lawfully on premises of” either “any hospital or medical clinic that is licensed to perform abortions” or “any facility in which the U.S. military is engaged in recruitment activity.” We told the subjects (acting as jurors) that they were to decide a series of factual queries about this standard, and then tell us whether they thought the police were liable.  [If you like, check out the abortion and recruitment videos.  You will observe, if you are a HLS graduate, some familiar sites.  But come back!]

We had several hypotheses, which essentially predicted that subjects’ worldviews would be various threatened and affirmed by the underlying activity (recruitment, abortion) and behavior antagonistic to it.  As per usual with our work, we employed scales that characterized the worldviews along two dimensions. The first, Hierarchy-Egalitarianism, measures the subjects’ orientations toward social orderings that either feature or eschew stratified roles and forms of authority. The second, Individualism-Communitarianism, measures their orientations toward orderings that emphasize individual autonomy and self-sufficiency, on the one hand, and those that emphasize collective responsibilities and prerogatives, on the other. Combining the two scales generates four sets of worldviews—“hierarchy individualism,” “hierarchy communitarianism,” “egalitarian individualism” and “egalitarian communitarianism,” to which individuals’ affinities can be measured with continuous worldview scores.  Two major hypotheses were that (1) egalitarian individualist subjects would form anti-demonstrator fact perceptions in the abortion condition but pro-demonstrator perceptions in the recruitment center condition; and (2) hierarchical and communitarian subjects, by contrast, would form pro-demonstrator fact perceptions in the abortion condition but anti-demonstrator perceptions in the recruitment center condition.

Results:

Main Effects

Subjects were closely divided in both conditions.  Considered apart from the experimental manipulation, moreover, cultural worldviews likewise appear to have no meaningful effect on reactions to the video.  There was no evidence, then, that being inclined either toward hierarchy or egalitarianism, toward individualism or communitarianism, or toward any combination of the two disposes individuals toward pro- or anti-demonstrator reactions irrespective of what subjects believed about the political cause of the demonstrators.

For purposes of these estimates, the values for the cultural worldview predictors were both set one standard deviation from their means in the directions necessary to form the specified worldview combinations.

However, when we control for condition, we find dramatic differences.  In the abortion-clinic condition, 70% of the Hierarchical Communitarians found that the police had violated the demonstrators’ rights. Yet in the recruitment-center condition, only 16% did. Matters were the other way around for Egalitarian Individualists: 76% of them concluded that the police had violated the rights of the protestors in the military-recruitment condition, yet only 28% of them took that position in the abortion-clinic condition.  We can generalize to create scales reflecting our subjects’ responses to multiple fact and outcome items into a single “pro demonstrator” or “pro police” orientation.  The figure to the left plots the relationship between cultural orientations and judgments.

As you can see (perhaps more clearly if you click on the figure), the estimated scores for Egalitarian Individualists and for Hierarchical Communitarians scales flip.It is also evident from the estimates that Egalitarian Communitarians became significantly more pro-demonstrator,and  Hierarchical Individualists significantly more anti-demonstrator, in the recruitment-center condition as opposed to the abortion-center condition. Whereas the difference between Egalitarian Individualists and Hierarchical Communitarians is significant in both conditions, the difference between Egalitarian Communitarians and Hierarchical Individualists is significant only in the recruitment center condition.

As one would expect, these differences in case-disposition judgments are mirrored in the subjects’ responses to the fact-perception items. Whereas only 39% of the Hierarchical Communitarians perceived that the protestors were blocking the pedestrians in the abortion-clinic condition, for example, 74% of them saw blocking in the recruitment-center condition. Only 45% of Egalitarian Individualists, in contrast, saw blocking in the recruitment-center condition, whereas in the recruitment-center condition 76% of them did. Fully 83% of Hierarchical Individualists saw blocking in the military recruitment-center condition, up from 62% in the abortion-clinic condition; a 56% majority of Egalitarian Communitarians saw blocking in that condition, yet only 35% saw such conduct in the recruitment-center condition. Responses on other items—such as whether the protestors “screamed in the face” of pedestrians and whether the protestors intended only to persuade or instead to threaten—displayed similar patterns.

In summary, motivated cognition not only polarized individuals of diverse cultural outlooks but also generated contradictions in what subjects of a shared orientation reported seeing. Relatively hierarchical and communitarian subjects rejected the proposition, credited by relatively egalitarian and individualistic ones, that demonstrators were blocking access to a facility represented to be an abortion clinic; yet when hierarchical communitarians understood the demonstrators to be objecting to the exclusion of openly gay and lesbian citizens from the military, they agreed the protestors were blocking access to the same building—a claim that egalitarian individualists now overwhelmingly dismissed. Subjects subscribing to a hierarchical individualistic outlook as well as those adhering to an egalitarian communitarian one exhibited similar shifts in perception.

If you want to know how we think these experimental findings influence constitutional fact-finding, and judicial rhetoric, you’ll have to either read the paper, read Kahan on Balkinization, or come back for more here later in the week.

We “shouldn’t be bitching about a little bailout” of the banks, Berkshire Hathaway Inc. Vice Chairman Charles Munger told students at the University of Michigan on Sept. 14. . . . Munger feels the bank bailouts were “required to save your civilization.” He suggested that burdening the economy with bank failures would have results similar to the economic collapse in Germany after World War I and led to the rise of Adolf Hitler. Meanwhile, “the culture dies” if you bail out individuals. People in economic distress should “suck it up and cope.”

Via Yves Smith & Mother Jones magazine, there are reports that Florida courts are doing their best to make Munger’s [...]]]> Recently billionaire Charlie Munger offered this vision of financial justice in a bailout era:

We “shouldn’t be bitching about a little bailout” of the banks, Berkshire Hathaway Inc. Vice Chairman Charles Munger told students at the University of Michigan on Sept. 14. . . . Munger feels the bank bailouts were “required to save your civilization.” He suggested that burdening the economy with bank failures would have results similar to the economic collapse in Germany after World War I and led to the rise of Adolf Hitler. Meanwhile, “the culture dies” if you bail out individuals. People in economic distress should “suck it up and cope.”

Via Yves Smith & Mother Jones magazine, there are reports that Florida courts are doing their best to make Munger’s vision a reality. According to an account of one judge’s speech to his court:

[He] says that if the bank is foreclosing, he’s not going to consider any evidence that the foreclosure is in error (servicing errors, plaintiff can’t provide proof it owns the note, which means it might not be the right party and procedurally, means it lacks standing to take action). He says he has already heard everything, there is a lot of unemployment in the area; he is going to schedule a court date, but that is merely a deadline for negotiation. In other words, he makes it abundantly clear he has no interest in hearing evidence. When he gets to seeing a defendant after his speech to the court, he rubber stamps what the bank wants without even considering the evidence. And apparently his entire day went like that.

Citing other sources, Smith says “There is actually much more of the same, multiple instances with particulars, with the judge clearly operating from the presumption that the borrowers were all deadbeats and the sale would go forward.” In other words, “suck it up and cope.” The “sanctity of contract” is for AIG (and perhaps other counterparties of Goldman, which Munger’s firm has a big stake in)—not for you.

PS: Now is as good a time as ever to support the University of Miami’s foreclosure defense group.

What I am more curious about, though, is whether after the decision any attorneys used the following sneaky trick : [...]]]> You will be forgiven if you did not pay attention to the Supreme Court’s decision in Hertz Corp v. Friend last year — indeed unless you are a Civ Pro junkie, paying attention might be the less foregivable act.  The case resolved a piece of perennial low-hanging fruit on Civ Pro exams as to what is the test under diversity subject matter jurisdiction for the citizenship of a corporation, which turns on where it has its principal place of business. The Court resolved that the “Nerve Center” is the test, ending a circuit split where the “corporate activities/operating assets” and “hybrid” tests were also contenders.

What I am more curious about, though, is whether after the decision any attorneys used the following sneaky trick : If they had lost the case in district court, and diversity jurisdiction was proper on one of the other tests that governed in the Circuit pre-Hertz, but not the nerve center test, did they on appeal ask the Circuit court to vacate the decision for lack of subject matter jurisdiction? If not, were Circuit courts making independent subject matter jurisdiction assessments in light of Hertz and dismissing cases with district court decisions in these circumstances? After all, as that old 1804 chestnut Capron v. Van Noorden, 6 U.S. (2 Cranch) 126 (the case that Arthur Miller, who it appears still retains a larger than life grip on his students’ imaginations now that he is at NYU, terrorized us with on Day 1 one of Civ Pro) suggests, Subject Matter Jurisdiction objections can be raised at any time, and the Court has an independent obligation to determine if it has jurisdiction over the case.

Did these post-Hertz dismissals actually materialize? I don’t see why they shouldn’t have.  After all the court did not suggest it was making a new rule for subject matter jurisdiction (it claims this was always the right reading of the statute), nor did it suggest the rule was non-retroactive. I have not seen any discussion of such dismissals, but that just may mean they are off the law professoriate radar, or maybe I am missing something preventing litigators or courts from behaving in the way I suggested? I am curious if others have seen anything like this or have thoughts, I thought this might be a nice way to teach the otherwise somewhat rote rules of diversity jurisdiction to my first-year Civ Pro class this year….

With over 200 federal civil lawsuits already filed, today’s Wall Street Journal outlines the battle shaping up among lawyers over where these cases will be heard, and most importantly, who will hear them.  Arguments on potential consolidation will be heard in one hour next week before a panel of seven judges in Boise, Idaho.  Pay attention, [...]]]> When I was a young law firm associate, we had tobacco, diet drugs, and Jeep rollovers.  These big money-making mass tort cases were known for sucking the life out of young attorneys, who could spend years of their lives in windowless rooms conducting document review tasks that could be performed by highly paid monkeys.  Next year’s class of monkeys will have a whole new nemesis: the Gulf oil spill litigation.

With over 200 federal civil lawsuits already filed, today’s Wall Street Journal outlines the battle shaping up among lawyers over where these cases will be heard, and most importantly, who will hear them.  Arguments on potential consolidation will be heard in one hour next week before a panel of seven judges in Boise, Idaho.  Pay attention, young associates!!  These decisions could determine your future residence, even if you thought you were signing onto a law firm so that you could live in New York.

Plaintiffs include fishermen and injured rig workers; their attorneys, of course, would love to be heard in the Big Easy, where they’re likely to find a sympathetic jury.  Defense attorneys prefer Houston, the self-professed “Oil Capital of the World“, for obvious reasons.  Other suggestions include Lafayette, Louisiana, which is relatively close to witnesses and evidence but whose residents may not be quite as upset with BP as New Orleanians.  Another is to bring an out-of-state judge to New Orleans to hear the case; perhaps unsurprisingly, most federal district judges in NOLA have recused themselves, including one judge with great expertise in mass torts whose son-in-law is a plaintiffs’ attorney in the oil spill litigation.  And of course, the cases might be split between several judges and venues.  For those of you teaching Civil Procedure this fall, I can’t imagine a better set-up to discuss the importance of procedural decisions and the reasons why procedural battles are so hard-fought.

This is a big case as the first point addresses the issue SCOTUS will hear next term in AT&T v. Concepcion, where AT&T claims the FAA preempts California law because it discriminates against arbitration clauses compared to other kinds of contracts. The second point, [...]]]> In a victory for access to justice, the Second Circuit held Monday that a student loan agreement forbidding a borrower to make claims on a class-wide basis in arbitration or litigation was unconscionable under California law and that California’s law was not preempted by the Federal Arbitration Act. It also said the agreement’s severability clause didn’t open the way to compellling class arbitration because, once the other clauses were out, the agreement was silent on dispute resolution, so it couldn’t order class  arbitration.

This is a big case as the first point addresses the issue SCOTUS will hear next term in AT&T v. Concepcion, where AT&T claims the FAA preempts California law because it discriminates against arbitration clauses compared to other kinds of contracts. The second point, on severability, takes up lessons SCOTUS articulated in last term’s Stolt-Nielsen case. It’s important as a broad and convincing contribution to intense national disputes over dispute resolution.

 The substantive objection in the case, Fensterstock v. Education Finance Partners, concerns how the lender allocated monthly loan repayments between interest and principal, using a squirrely provision allocating to interest all payments except those received exactly on the monthly payment due date. The borrower says that’s a hidden fee, stretching out loan amortization, and makes substantive claims for breach of contract and unfair trade practices. The agreement also contained a dispute resolution clause, limiting both sides to individual arbitration—not class arbitration or class litigation or any kind of litigation. It named California as governing law.

The lender wanted to compel arbitration, citing the FAA, requiring courts to do that for any arbitration clause in a contract involving interstate commerce, except those found invalid under general contract law principles. The borrower, a lawyer three years out of law school when he consolidated $52,000 in student loans, claimed the clause was unconscionable under California law and the court agreed, throwing out the clause and opening up a class action lawsuit.

The opinion is meticulous in extracting extensive block quotations from dozens of California cases on point, including the pivotal Discover Bank case. Drawing on a state statute making void contracts exculpating one from fraud, that case finds that some dispute resolution clauses in consumer contracts trip over it, being against law, public policy, and unconscionable. The statute and policy target enterprises who overcharge large numbers of ordinary people small amounts, then insulate themselves from liability using non-negotiable contracts preventing the small stakes from being accumulated to make a case worth pursuing.

Clauses doing that can be unconscionable both procedurally, because adhesive, prolix and peddled by one in a stronger bargaining position, and substantively, for facilitating such a scam. California statutory and common law unconscionabilty doctrine apply equally to clauses waiving rights to pursue class actions in litigation or class arbitration. They can be void whether part of an arbitration clause or otherwise. That equal application is important because the Federal Arbitration Act preempts any state law, statutory or judicial, that discriminates against arbitration clauses. The Second Circuit finds California law immune from preemptive attack under the FAA. That’s the broad issue facing SCOTUS in AT&T next term.

California law is also clear that not all class action waivers or class arbitration waivers are unconscionable, as not all are offered adhesively nor designed to insulate fraudulent conduct from proper review. But this clause was unconscionable, striking out in California’s three-part test: (1) a standardized consumer contract of adhesion drafted by a party with superior bargaining power; (2) the disputes about allocating payments between principal and interest involve small amounts of damages; and (3) the borrower alleged that the lender’s plan is to cheat large numbers of people out of small sums of money.

The lender thought the contract’s severability clause would enable compelling  class arbitration, but the court disagreed.  The clause claims to rescue all provisions not stricken when others are stricken as unconscionable. But after striking the clauses forbidding class actions in courts or arbitration, there was nothing valid on dispute resolution to enforce.  Striking a clause prohibiting class arbitration doesn’t authorize compelling it.  As the Supreme Court recently held in Stolt-Nielsen, the court’s job under the FAA is to enforce valid arbitration clauses, not promote arbitration. 

PS:  An annoying thing I’ve found amid proliferation of boilerplate in adhesion contracts lately is how they put vital clauses in ALL CAPITAL LETTERS. Drafters must think that will lead people, including judges after the fact, to think they were conspicuous and attracted requisite attention and understanding. In fact, PRINT WRITTEN IN ALL CAPITAL LETTERS IS MUCH MORE DIFFICULT FOR PEOPLE TO READ OR UNDERSTAND than words written in regular case, though putting them in bold may help. Just a thought.

Hat Tip: Ed Labaton