Category: Civil Procedure

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Remedies 101

Based on the comments coming out of this morning’s oral argument in Perry, it appears that there are only two possible outcomes:

1.  Petitioners have no standing.  The Ninth Circuit opinion is vacated.

2.  The writ of certiorari is dismissed as improvidently granted.  The Ninth Circuit opinion stands.

Now here’s my question.  Can a concurring opinion that does the latter count as a “controlling opinion” of the Court for purposes of ascertaining the holding?  I guess it does, though arguably it does not because it is not really an opinion at all.  Any precedent on that?

4

Supreme Court Appellate Jurisdiction over Facts

Here’s a question.  Article III, Section Two of the Constitution states that “the Supreme Court shall have appellate jurisdiction, both as to law and fact . . . .” The power of factual review was given largely because in maritime cases factual disputes were often critical and resolved on appeal (at least that’s what people said in the 1780s).

What I’m wondering is when was the last time the Justices formally reversed or vacated an opinion because its factual findings were clearly erroneous?  This probably happened with some regularity before certiorari jurisdiction was firmly established in the 1920s, but I’m not sure.  Any thoughts?

1

The Securities Class Action, Not So Special?

In a 6-3 decision authored by Justice Ginsburg (who taught and wrote about civil procedure as a professor at Columbia Law School), the Supreme Court held last week that plaintiffs in securities fraud class actions do not have to prove materiality at the class certification stage.  A class of plaintiff shareholders (Connecticut Retirement Funds) alleged that Amgen and its executives misled investors about the safety and efficacy of two drugs in violation of Section 10(b) and Rule 10b-5. One of the alleged material misstatements involved the company’s public statement that the FDA would not be addressing one of its drug’s safety at a particular meeting when in fact it was.  Plaintiff’s class action asserted the fraud-on-the-market theory, which creates a rebuttable presumption that securities purchasers relied on publicly available information in purchasing stock in an efficient market.  During class certification, Amgen argued that Rule 23(b)(3) required that plaintiffs needed to do more than plausibly plead that a misrepresentation materially affected the stock price.  Amgen insisted that plaintiff needed to prove materiality to ensure that the questions of law or fact common to the class will “predominate over any questions affecting only individual members.”  Both the district court and the Ninth Circuit Court of Appeals rejected Amgen’s argument.

The Supreme Court affirmed the Court of Appeal’s judgment, holding that proof of materiality is not a prerequisite to class certification in securities fraud cases.  The majority noted that Rule 23(b)(3) “requires a showing that questions common to the class predominate, not that those questions will be answered, on the merits, in favor the class.”  The Court held that plaintiffs need not prove materiality to ensure that questions of law or fact common to the class will predominate for two reasons. The first related to the objective nature of the materiality question.  As Justice Ginsburg explained, because materiality is judged according to an objective standard, it can be proved through evidence common to the class.  Thus, materiality is a “common question for purposes of Rule 23(b)(3).”  For the second, the Court reasoned that failure of proof on the common question of materiality posed no risk that individual questions will predominate. Quite the contrary, explained Justice Ginsburg.  Because materiality is an essential element of a 10b-5 claim, a failure of proof on this claim will “end the case for one and all.”  The Court determined that to make the plaintiffs prove materiality at the certification stage would effectively be “putting the cart before the horse.”  The Court noted,

Although we have cautioned that a court’s class-certification analysis must be “rigorous” and may “entail some overlap with the merits of the plaintiff’s underlying claim,” Wal-Mart Stores, Inc. v. Dukes, 564 U. S. ___, ___ (2011) (slip op., at 10) (internal quotation marks omitted), Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage. Merits questions may be considered to the extent—but only to the extent—that they are relevant to determining whether the Rule 23 prerequisites for class certification are satisfied. See id., at ___, n. 6 (slip op., at 10, n. 6) (a district court has no “‘authority to conduct a preliminary inquiry into the merits of a suit’” at class certification unless it is necessary “to determine the propriety of certi­ fication”); Advisory Committee’s 2003 Note on subd. (c)(1) of Fed. Rule Civ. Proc. 23, 28 U. S. C. App., p. 144 (“[A]n evaluation of the probable outcome on the merits is not properly part of the certification decision.”).

Amgen suggests that securities fraud class actions are not special vis-a-vis other kinds of classes.  It does not appear that they have additional prerequisites than what is already required in certifying other types of class actions.  To be sure, securities fraud class action are special but in the way that Congress required in the Private Securities Litigation Reform Act with its heightened pleading requirements, limits on damages, mandatory sanctions for frivolous litigation, etc.  In citing Professor Richard Nagreda’s NYU Law Review piece on aggregate litigation (which Justice Scalia relied on in Walmart to flesh out commonality of 23(a)(2)), Justice Ginsburg seemed to reminding us, as she did in the dissent in Walmart, that Professor Nagreda’s point about common injuries and common reasons for them pertained to Rule 23(b)(3), as in Amgen, not the commonality question of 23(a) (as the Walmart majority invoked it for its finding).  I’m not sure if Amgen signals a ratcheting back of the common question/common answer inquiry in 23(a)(2), but it may be worth watching and waiting.

4

Why Is Privatized Procedure So Rare?

For some time, I’ve been mulling over how closely parties can tailor the rules of civil procedure to their own purposes. That is: can parties write enforceable contract terms which state that if they sue each other, the ordinary procedural rules won’t apply? Do such contracts exist? For example, parties might contract to be able to take 5 depositions in a case instead of the default 10. Or they might dispose of the rules of hearsay.  The literature on this topic of private procedure arguably started with the Scott/Triantis piece, Anticipating Litigation in Contract Design, and has gotten new momentum from Bone, Kapeliuk/Klement, Dodge, and Drahozal/Rutledge. My contribution, freshly up on SSRN, ended up being slightly more empirical than I’d expected — though I guess this won’t surprise any of our long-time readers.  In Why Is Privatized Procedure So Rare?, I try to explain why there is actually so little private procedure in places we’d expect to see it:

“Increasingly we hear that civil procedure lurks in the shadow of private law. Scholars suggest that the civil rules are mere defaults, applying if the parties fail to contract around them. When judges confront terms modifying court procedures — a trend said to be explosive — they seem all-too-willing to surrender to the inevitable logic of private and efficient private ordering.

How concerned should we be? This Article casts a wide net to find examples of private contracts governing procedure, and finds a decided absence of evidence. I search a large database of agreements entered into by public firms, and a hand-coded set of credit card contracts. In both databases, clauses that craft private procedural rules are rare. This is a surprising finding given recent claims about the prevalence of these clauses, and the economic logic which makes them so compelling.

A developing literature about contract innovation helps to explain this puzzle. Parties are not rationally ignorant of the possibility of privatized procedure, nor are they simply afraid that such terms are unenforceable. Rather, evolution in the market for private procedure, like innovation in contracting generally, is subject to a familiar cycle of product innovation. Further developments in this field will not be linear, uniform and progressive; they will be punctuated, particularized and contingent.”

Download it here. I’d love your comments. It’s out in the scrum, but I’m intending to continue to revise it as data continues to come in.

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The Stanford Law Review Online: Defending DOMA in Court

Stanford Law Review

The Stanford Law Review Online has just published an Essay by Matthew I. Hall entitled How Congress Could Defend DOMA in Court (and Why the BLAG Cannot). Professor Hall argues that the Bipartisan Legal Advisory Group lacks standing to defend DOMA:

In one of the most closely watched litigation matters in recent years, the Supreme Court will soon consider Edith Windsor’s challenge to the Defense of Marriage Act (DOMA). The Court surprised many observers by granting certiorari, not only on the merits of Windsor’s equal protection and due process claims, but also on the question whether the defendants—the United States and the Bipartisan Legal Advisory Group of the House of Representatives (the BLAG)—have Article III standing to defend DOMA. The United States has agreed with plaintiffs that DOMA is unconstitutional, prompting the BLAG to intervene for the purpose of defending DOMA’s constitutionality. No lower court has yet addressed whether the BLAG has standing, so the Supreme Court will have the first crack at the issue. But it turns out that the answer is straightforward: Under settled precedent, the BLAG lacks authority to represent either the United States or Congress, and having claimed no interest of its own, it therefore lacks Article III standing.

He concludes:

Congress could solve these problems by statute or resolution, but until it does so the BLAG is a mere bystander, with no stake in defending DOMA. This lack of standing may play a decisive role in the Windsor litigation. Both the BLAG and the executive branch defendants appealed the District Court’s judgment to the Second Circuit, and petitioned the Supreme Court for certiorari. If the BLAG lacks standing, however, then it had no authority to appeal or to seek Supreme Court review, and the Court’s jurisdiction must turn on whether the United States, which has agreed with the plaintiff that DOMA is unconstitutional, has standing to proceed with the case. Interestingly, the BLAG itself has argued that no such standing exists—a controversial position that is beyond the scope of this short piece. But if the BLAG is correct, then there is no case or controversy before the Court, and the Court will have to dismiss for lack of jurisdiction. The widespread expectation that Windsor will be a significant decision appears to be well-founded. But it remains to be seen whether its significance will lie in the area of individual rights or in the areas of federal court jurisdiction and the separation of powers.

Read the full article, How Congress Could Defend DOMA in Court (and Why the BLAG Cannot) at the Stanford Law Review Online.

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Suing Lance Armstrong for Lying in His Books: the Hurdle of Specificity and Plausibility under FRCP Pleading Rules?

The lawsuit filed against Lance Armstrong for lying in his books: a gift to civil procedure professors working through heightened pleading requirements of FRCP 9(b) and Twombly-Iqbal.  This morning, NPR’s Only a Game show featured a “lawsuit of the week” segment.  With some laughter, the host talked about how two individuals filed a class action suit against Lance Armstrong and his publisher.  The complaint alleges that defendants defrauded the class into buying Armstrong’s books and seek remedy for being tricked into believing he was a champion.  The lawsuit alleges that the plaintiff class would not have bought the book had they known it contained lies about Armstrong’s doping.

This case sounds a whole lot like litigation brought against Three Cups of Tea author Greg Mortenson, his co-author, their publisher, and marketing consultants after plaintiffs discovered that the book lied about Mortenson’s humanitarian efforts in Afghanistan. Long story short, the complaint alleged that Mortenson tricked readers into thinking he was a hero and he really wasn’t.  As the federal district court Judge Hannon explained in his opinion and order on defendants’ motion to dismiss:

Plaintiffs contended they purchased one or more of Mortenson’s books for approximately $15 each.  They claim that the books should not be categorized as nonfiction, as a number of misstatements relating to their contents have surfaced, and that Mortenson, Relin, MC, CAI, and Penguin entered into a fraudulent scheme to falsely portray Mortenson as a hero in order to boost book sales.

The complaint asserted claims for RICO, fraud, breach of contract, implied contract, unjust enrichment, among others.  Plaintiffs had amended their complaint three times before defendants moved to dismiss.  As the motion was pending, the court allowed plaintiffs to amend the complaint for a fourth time.  Defendants moved to dismiss on the grounds that the complaint failed “(1) to plead fraudulent activity with particularity, (2) meet plausibility standards, (3) plead necessary elements, and (4) allege cognizable injuries.” Read More

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Professor Sherrilyn Ifill on Fisher v. University of Texas: Still Litigation Without Minority Representation

My colleague Sherrilyn Ifill has generously offered to share her insights on the Fisher case.  Professor Ifill is a nationally recognized expert on civil rights litigation: we are lucky to have her aboard as a guest commentator.  Here is Professor Ifill’s post:

Since the Bakke v. California case, higher education affirmative action cases have largely been litigated between white applicants who claim they were excluded from university admissions as a result of affirmative action, and historically white universities who have in the last 30 years sought to diversify their student bodies.  Minority students, whose interests are deeply affected by the litigation in these cases, are often relegated to the sidelines.

This troubling phenomenon was first the result of the federal court’s interpretation of intervention of a right under Rule 24 of the Federal Rules of Civil Procedure. A year after the Bakke case, Professor Emma Coleman Jordan (nee Jones)  wrote powerfully about the refusal of the federal trial court in that case to allow black students to intervene in her Harvard Civil Rights-Civil Liberties Law Review article Litigation Without Representation:  The Need for Intervention to Affirm Affirmative Action.

Post-Grutter, the exclusion of minority students as parties at trial may be even more firmly fixed. By grounding affirmative action’s constitutionality in the First Amendment rights of universities, the Court saved affirmative action in higher education, but may also have further reinforced the redundancy of minority student participation as full litigants in these cases.

 The result is that the Fisher v. University of Texas case was litigated at trial almost entirely between white applicants and a majority white public university.  No lawyer arguing the case in the Supreme Court represents the interests of minority students.  Certainly it’s true that civil right litigators at the NAACP Legal Defense & Educational Fund were permitted to file briefs and to present oral argument in the Court of Appeals in the Fisher case. But the real issue is the refusal of courts to allow minority students party status at trial.

The exception was the University of Michigan case, Grutter v. Bollinger, where black, Latino, Asian-American and Arab-American students were permitted to intervene at the trial phase of the case.  Their robust defense of the school’s affirmative action policy included strong and direct testimony and evidence about the school’s history of discrimination against blacks.  Strikingly, in contrast to the law school’s defense, the minority students challenged the University’s over-reliance on the LSAT in its admissions decisions, to the detriment of minority students, describing the LSAT as providing a “sharp, undeserved, disadvantage for minority LSAT-takers, and a sharp unearned advantage for white LSAT-takers.”

The participation of minority students as parties at trial is important because we can only expect universities like Michigan and Texas to defend their affirmative action initiatives in the furtherance of their own interests and goals.  Thus, the University of Michigan was unlikely, in the Grutter case, to explore its strong reliance on applicant LSAT scores in admissions.  Nor does the brief filed by Texas lay out in detail the history of discrimination at the University of Texas, and the ongoing alienation experienced by black students at the state’s flagship university, as set out in a recent article co-authored by Professor Lani Guinier.

Although some of the most compelling arguments advanced in this case are contained within the amicus briefs filed in the Fisher case, including one filed by the NAACP Legal Defense & Educational Fund, Inc. on behalf of black students, another by the Advancement Project highlighting the history of discrimination by the University of Texas, and still another filed by the family of the man who challenged and defeated segregation at UT 60 years ago, amicus status is no substitute for party status at the trial phase.  All good litigators know that the ability to shape and develop a cause of action at trial, first by the allegations advanced in the complaint, then by the information sought on discovery and finally by the theory of the case advanced at trial – determines the substantive scope of the findings ultimately made in the case.  Thus, party standing in these cases is particularly important.

In fact, the trial judge in Fisher permitted the League of United Latin American Citizens (LULAC) and the NAACP to submit amicus briefs at trial “in lieu of intervention,” and expressly denied permission to LULAC to submit any evidence in the case.

It’s certainly true that despite the party status of minority students in Grutter, the Supreme Court in its majority opinion appeared to ignore the students’ contribution to the case, not even mentioning the intervenors’ participation in the  recitation of the procedural history of the case. Some suggest that this demonstrates that even when intervention is permitted, courts may ignore the presentation made by minority students. But the mere fact that an appellate court fails to acknowledge the contribution of intervenors, is not evidence that those intervenors did not play an important role in shaping the record to which the appellate court was bound for its review.

There’s something deeply disquieting about higher education affirmative action cases in which blacks and Latinos are virtually litigation bystanders.  More than thirty years after the Bakke case, affirmative action in higher education has survived and may yet survive this latest challenge in Fisher, but the voice of racial minorities in shaping the presentation of these issues is at a low ebb.

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Volume 59, Issue 5 (June 2012)

Volume 59, Issue 5 (June 2012)


Articles

Implicit Bias in the Courtroom Jerry Kang et al. 1124
The Supreme Court’s Regulation of Civil Procedure: Lessons From Administrative Law Lumen N. Mulligan & Glen Staszewski 1188


Comments

Techniques for Mitigating Cognitive Biases in Fingerprint Identification Elizabeth J. Reese 1252
Credit CARD Act II: Expanding Credit Card Reform by Targeting Behavioral Biases Jonathan Slowik 1292
Shocking the Conscience: What Police Tasers and Weapon Technology Reveal About Excessive Force Law Aaron Sussman 1342
0

A Taxonomy of Litigation II: Eight Typical Clusters of Causes of Action

As I explored in a previous post, some terrific co-authors and I have written a paper which taxonomizes federal complaints- that is, we find patterns in the kinds of causes of action that attorneys plead.  In this post, I’m going to explore those patterns in some more detail.

In our data, spectral clustering revealed eight clusters of causes of action.  Each grouping organizes together causes of action that are more likely to be pled together than they are to be pled with others.  (This eight-cluster finding is probably not generalizable to all litigation – the paper goes into some detail about the kinds of cases that we included and excluded from our dataset.)  When you think about it, that there will be some patterns from this kind of exercise is obvious — there are only a limited number of legally cognizable fact patterns that can cause injury, and attorneys often follow form books/precedent when pleading.  Still, we didn’t know what the patterns would be before completing the analysis.

The Figure below provides the most common two or three causes of action per cluster:

This illustrates how, for example, intellectual property claims (like trademark infringement) often travel together with consumer protection claims; civil rights claims (like 1983 allegations) accompany state law torts; and tort claims often fit with contract and fraud claims. This should be old news to anyone who has ever practiced law.  Moreover, the Figure doesn’t give us a good handle on how alike or unlike each pattern is from another.  Follow me after the jump for the Figure that tries to accomplish just that.

Read More