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Category: Civil Procedure

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Hertz, Appellate Review, and Sneaky Tricks

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….

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Litigating Toward Settlement

What is the relationship between litigation and settlement?  In a new working paper, Christina Boyd and I explore that question using data from federal trial dockets.  Our basic intuition is that motion practice propels cases toward faster settlements, as it unlocks information about the facts, the parties’ strategies, the resources they will spend on the case, and (sometimes) what the judge thinks of the merits.  Our results essentially support such hypotheses: the mere filing of a motion speeds case settlement. Moreover, “motions which are granted are more immediately important to the settlement rate than motions denied, plaintiff victories are more important than defendant victories, motions about unclear areas of law are more important than motions about settled law, and motions later in cases are more important that motions earlier in cases.”  These findings are suggestive.  Though motion practice is often thought of as parasitic, driven by agency costs, and part the problem of litigation, our results imply that it has significant pro-social consequences.  Indeed, paying homage to Gilson, why not re-imagine lawyers as canny litigation costs engineers?

We also found some nifty case effects.  Women judges were on average (as Boyd had previously established) better at encouraging settlement than men: “the likelihood of a case settling in any given month is, on average, 25% larger when a female judge presides than when a male judge does.” Also, imbalance between the size of the firms representing the plaintiff and the defendant had a significant influence on compromise’s timing, as the figure below illustrates:

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Where, Oh Where Shall They Sue?

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.

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Victory for Justice in Fensterstock

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.

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VICTIMS’ UNDERSTANDINGS AND MOTIVATIONS IN PROCESSING HUMAN RIGHTS VIOLATIONS CASES IN THE GLOBAL SOUTH

The proliferation of international human rights treaties, committees and courts over the last sixty years represents enormous achievement. International human rights laws are now asserted throughout the world by individuals of many cultures and traditions. Yet, at the same time human rights ideas and principles continue to have difficulty in establishing their relevance in the daily lives of those who are geographically and culturally distant from international institutions (Stacy, 2009). In my forthcoming piece in Human Rights Quarterly, I argue that notwithstanding the fact that giving voice to those oppressed is a main function of the international human rights movement (Baxi, 2009), and that the meaning of human rights must be grounded in local culture at grassroots levels, relatively little scholarship bases its analyses on the discourse of those actually involved in human rights violations cases in the Global South. What are victims’ conceptions and expectations of human rights and their agendas and experiences in formal and informal justice systems processing their cases? This knowledge is critical to enable greater understanding of victims’ needs, epistemologies and micro-realities in order to innovatively engage the controversies in international human rights theory and practice and to effect realizable change for the subjects of human rights in the Global South.

I provide some such data in my forthcoming book based on my empirical research in India, detailed in my earlier post. This includes voices of female victims of violence discussing their comprehensions, objectives, and practices in processing their cases (74 interviews with victims, and 24 with their family members). I link victims’ discourse to norm diffusion theory in international relations (Risse et al. 1999) and to vernacularization theory in law and anthropology (Merry, 2006), which engage the issue of permeation of human rights standards to grassroots levels.

In terms of female victims of violence in India where CEDAW was ratified in 1993, I show that notwithstanding State enactments of laws in line with international human rights obligations, and the dissemination of human rights concepts by transnational activists and domestic NGOs who work to make them meaningful within particular societies, the subjectivities of victims of violence in two major cities (Delhi, Bangalore) as illustrated in their discourse on their motivations and aims in approaching formal courts and informal justice mechanisms suggest little if any human rights emancipation. Those with little education had either never heard of human rights or lacked an understanding of their meaning. More educated victims who had a general sense of human rights concepts knew little of specifics. Moreover, both groups generally felt that fundamental human rights ideas, though something positive, were primarily of use on an inspirational level.

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Paradoxes in Formal Courts versus Informal Justice / Quasi-Legal Processing of Human Rights Cases in India

Continuing from my previous post, I will elaborate here on some of the initial arguments from my forthcoming book, INTERNATIONAL HUMAN RIGHTS AND VIOLENCE AGAINST WOMEN: THEORY, GLOBAL STANDARDS AND SOUTHERN ACTORS’ PRAXIS based on the empirical research I conducted throughout India, which I described earlier. Some of these issues are discussed in my forthcoming article, International Human Rights and Southern Realities, 112 HUMAN RIGHTS QUARTERLY (2010), HTTP://PAPERS.SSRN.COM/SOL3/PAPERS.CFM?ABSTRACT_ID=1592042 . There, I argue that on the basis that a culturally plural universalism in human rights is an acceptable aim, we are in dire need of a new integrated analytical framework, one that is grounded not only in the understandings and perceptions of Southern actors (i.e. individuals from the Global South), but that simultaneously imbeds their perspectives within the realities of human rights case processing in the legally pluralistic Global South. This involves not only formal courts but also informal justice or quasi-legal non-state mechanisms processing human rights cases.

PARADOXES IN FORMAL COURTS VERSUS INFORMAL JUSTICE / QUASI-LEGAL MECHANISMS IN INDIA - Paradoxically, the data suggest that the bulk of lawyer advocates and judges working in the lower criminal and civil courts, as well as court-linked ‘lok adalats’ (mediations)–who process great numbers of cases involving serious violence against women involving food deprivation as a means of punishment, physical and mental torture, and rape–utilize international human rights principles to a far lesser extent, if at all, in dealing with these cases than do some informal justice / quasi-legal mechanisms processing the very same type cases. In contrast, the non-lawyer mediators/arbitrators in the informal justice mechanisms studied—who  were not only not formally legally trained, but many of whom had poor literacy skills—were far more geared towards resolving cases utilizing principles of international human rights law and CEDAW in particular (e.g. equality, autonomy).

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INTERNATIONAL HUMAN RIGHTS AND VIOLENCE AGAINST WOMEN: THEORY, GLOBAL STANDARDS AND SOUTHERN ACTORS’ PRAXIS – Some highlights from a forthcoming book

My second book is entitled INTERNATIONAL HUMAN RIGHTS AND VIOLENCE AGAINST WOMEN: THEORY, GLOBAL STANDARDS AND SOUTHERN ACTORS’ PRAXIS (forthcoming). It is based on data I collected over three years in eight states of India and in seven languages while I was a postdoctoral research fellow at Columbia Law School and the LSE (London School of Economics, Dept. of Law, where I continue to be a research fellow). This data was collected with the help of eight teams of about 200 research assistants throughout India. The United Nations Development Program (Delhi), 11 law school Deans, domestic judges, state legal services authorities, local district and high courts, NGO’s and human rights/public interest lawyers throughout India were also involved in the project. The dataset comprises 400 semi-structured depth interviews and questionnaires from victims, accused, lawyers, judges, arbitrators and mediators in 193 cases involving human rights violations of serious violence against women. It also includes case hearing observations in lower formal courts, court-linked mediations known as “lok adalats” and non-state, quasi-legal women’s arbitrations known as “mahila panchayats” and “nari adalats” (British Academy Award PDF/2006-09/64).

Similar to my first book, the South Asian research analyzes legal and lay actors’ understandings, objectives and experiences during case processing. However, the South Asian research builds on and takes in new directions the theories and conceptual arguments I developed in PERCEPTIONS IN LITIGATION AND MEDIATION . In particular, it focuses on local, Southern actors’ perspectives (i.e. individuals from the Global South) on the permeation and perceived relevance of international human rights laws and norms in formal courts and non-state informal justice mechanisms.

Drawing on interdisciplinary scholarship (international relations, law & anthropology, law & development, and victimology literatures), the book questions how the current proliferation of international human rights has shaped case processing systems at grassroots levels. Expanding on my North American findings, Southern legal and lay actors provide local perspectives on non-western models of formal courts and informal justice processes as forms of legal pluralism. I examine how, if at all, international human rights laws and norms (e.g. CEDAW 1979, ICCPR 1976, UN Declaration on Basic Principles of Justice for Victims of Crime and Abuse of Power 1985) have permeated the processing of these cases, comparing how receptive the different spaces of lower courts versus quasi-legal regimes are to claims made from the international sphere. I further examine the theoretical ideas informing these processes (including norm diffusion theory, universalism versus cultural relativism, restorative justice, and feminist critiques of mainstream human rights paradigms) and how these ideas are understood by those on the ground. The research also highlights the interdependence of all human rights and the link between human rights, women’s rights and development, which has been the subject of much debate. Finally, the findings provide a critique on the boundaries created both between formal and informal justice, as well as between ratified international law and the permeation of international human rights norms in case processing at grass roots levels.

Interestingly, depending on arbitrary factors including parties’ geographic and/or socioeconomic positions within India, the same type cases might be heard in either criminal or civil lower courts (magistrates/sessions/district) or in the above-mentioned court-linked or non-state quasi-legal mediations or arbitrations. The dataset additionally comprises “in-chambers mediations”, which are newly exported forms of American justice to India. These are case management tools that include ADR and plea bargaining methods, which have been and are being taught to Indian judges and advocates by a number of Californian judges and US Department of Justice representatives with the aim of deflecting cases from the overburdened Indian courts where trial waits of 10 years or more are not uncommon. This is being done predominantly for US commercial interests. However, these case management tools also affect the processing of violence against women cases.

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Some data from PERCEPTIONS IN LITIGATION AND MEDIATION: LAWYERS, DEFENDANTS, PLAINTIFFS AND GENDERED PARTIES (Cambridge University Press, New York, 2009)

I want to provide some support for the claims made in my previous post, summarizing the main findings of my book Perceptions in Litigation and Mediation. Below are two of the many areas that support the “parallel worlds” theme relating to the different understandings of legal case processing and case resolution as between legal actors and lay litigants.

CHAPTER 2 EXCERPTS ON UNDERSTANDINGS OF WHAT PLAINTIFFS WANT:

Chapter 2 explores and attempts to make sense of an issue fundamental to litigation in general as well as mediation in particular: What do plaintiffs want? Why plaintiffs sue, and their consequent litigation aims should have a marked impact on their objectives and experiences in litigation and litigation-linked mediations. Likewise, attorneys’ objectives, approaches to their cases and conduct throughout litigation and mediation are affected by their basic understandings of what those who commence these suits want; that is, what the cases are about. Little is known about what litigants really want from the civil justice system and what they aim to achieve. Consequently we have little knowledge of whether litigants’ real objectives are met by the realities of civil litigation including litigation–linked processes such as mediation.

PHYSICIAN LAWYERS: IT’S ONLY ABOUT MONEY

Virtually all physician lawyers were of the strong belief that plaintiffs had sued for financial compensation alone. Even the two who mentioned that non-fiscal objectives might also have been involved put much emphasis on claimants’ primary monetary aims.

The following excerpts are typical of defense physician lawyers in answering the global question, ‘WHAT IN YOUR VIEW WERE THE PLAINTIFF’S AIMS IN LITIGATING?’

‘My view is the issue was money, to compensate for the pain associated with the deterioration, and to compensate for lost income associated with the surgery that was necessary. SO IT WAS MONEY ALONE? I believe so.’ Male attorney-50’s-prescription alleged to have destroyed bone tissue, resulting in 40-year-old plaintiff undergoing hip replacement surgery-litigating several months

‘To settle it. Their assumption was that this would never go to trial; that they would get money out of this beforehand. SO, YOU FEEL IT IS SOLELY AN ISSUE OF OBTAINING FINANCIAL COMPENSATION Yes, but I also think that they are of the view that if they obtain financial compensation it will make…them feel better. I think they’re misguided on that.’ Female attorney-30’s-abdomen not left intact after surgery litigating several months

‘I think in virtually all cases it’s directly driven by their desire for compensation…The sole aim, you know, in most of the cases it is to be financially compensated for the wrong. And I would say that’s in 99% of the cases I do, that’s what plaintiffs want.’ male attorney-30’s-child fatality case-litigating 4 years Read More

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What are we missing when we think about case processing in litigation and mediation?

Hi everyone. I am delighted to be here. I would like talk today about epistemological differences between lawyers and litigants involved in case processing, resulting in frequently conflicting comprehensions, perceptions, needs and objectives for case resolution. This has been the main finding in my recently published book, Perceptions in Litigation and Mediation: Lawyers, Defendants, Plaintiffs and Gendered Parties (New York, Cambridge University Press, 2009). I would like to set out the main framework of the research findings in this post, and will provide you with particular examples including charts and quotes in my next post.

The book explores the question ‘How do professional, lay and gendered actors understand and experience case processing in formal courts and quasi-legal regimes including mediation?’ I use a novel methodological framework of juxtaposing all sides’ views (plaintiffs, defendants, lawyers on all sides, judges, mediators/arbitrators) on the same issues within the same cases heard in formal courts or mediations. Therefore, actors’ perceptions and agendas act as lens to map, theorize, and critically analyze the phenomenon of legal case processing. By injecting actors’ understandings, praxis and experiences into the analyses, the data offer a unique look into the diversity of prevalent realities, illuminating important paradoxes inherent in legal policy initiatives related to case resolution. I compare perceptions of justice, understandings of the purpose of the justice system, comprehensions of victims/plaintiffs’ motivations in approaching the legal system, case resolution objectives, and experiences during hearings. The findings reveal significant and disturbing discontinuities in terms of interests, language and agendas. The book demonstrates through lawyers’ and parties’ own voices that professional and lay actors occupy largely parallel worlds of understanding, affecting how conflict and its resolution are perceived. Stark similarities in the discourse of plaintiffs and defendants on the one hand (operating from an extralegal/therapeutic/communicatory paradigm), and lawyers of all camps on the other notwithstanding whom they are representing (and functioning through a strategic/tactical framework) reveal unlikely conceptual alignments. There is some evidence that mediation experience leads lawyers to reconceptualize their cases and their roles in terms of addressing disputants’ intrinsic, often overriding extralegal needs. The findings additionally suggest that gender influences the way attorneys and parties understand and experience conflict, case processing and case resolution. Nevertheless, in juxtaposing actors’ perspectives on all sides of the same or similar cases, the data reveal inherent problems with the core workings of the civil justice system. This is something that is not being adequately captured in current debates, perhaps because of monumental access problems in acquiring this type of data, particularly relating to confidentiality issues.

Three themes are recurrent throughout the chapters, each of which examines a different step within case processing (e.g. Why did you sue vs. why do you think the plaintiff sued?(ch.2); What were your aims in resolving the case (ch.5))? The three recurrent themes are: (1) the parallel worlds of understanding and meaning inhabited by legal actors versus lay disputants, reflecting materially divergent comprehensions and functions ascribed to legal case processing and how cases should be resolved (2) lawyers’ ‘reconceptualization’ pertaining to mediation’s role in the transformation of legal actors’ conceptions of their cases and their roles within them, evidencing a move away from conventional legal thought to increasingly include extralegal considerations outside the traditional province of the law. This represents part of a shift in what lawyers ‘are’ and how they present themselves, and (3) A gender theme, which provides evidence to suggest that gender affects the way conflict and resolution are perceived and experienced, both for legal actors (e.g. female lawyers’ tendency for greater extralegal sensitivity during case processing versus males’ more tactical focus) and lay disputants (e.g. gender disempowerment).

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Eight Months of Iqbal: Part 3

In this last of three posts on Twombly and Iqbal, I want to talk about the bills now pending in Congress (one in the House and one in the Senate) to overturn these two decisions. 

The Notice Pleading Restoration Act (S. 1504) would provide:

Except as otherwise expressly provided by an Act of Congress or by an amendment to the Federal Rules of Civil Procedure which takes effect after the date of enactment of this Act, a Federal court shall not dismiss a complaint under rule 12(b)(6) or (e) of the Federal Rules of Civil Procedure, except under the standards set forth by the Supreme Court of the United States in Conley v. Gibson, 355 U.S. 41 (1957).

The Open Access to Courts Act (H.R. 4115) would provide:

A court shall not dismiss a complaint under subdivision (b)(6), (c) or (e) of Rule 12 of the Federal Rules of Civil Procedure unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief. A court shall not dismiss a complaint under one of those subdivisions on the basis of a determination by the judge that the factual contents of the complaint do not show the plaintiff’s claim to be plausible or are insufficient to warrant a reasonable inference that the defendant is liable for the misconduct alleged.

Legislation along these lines would certainly be valuable to the extent that it would foreclose some common misreadings of Twombly and Iqbal that would indeed result in a much stricter pleading standard. As I explain in my earlier post, however, Twombly and Iqbal should not be read as allowing courts to disregard allegations for lack of “plausibility.” What was fatal in Twombly and Iqbal was the fact that allegations necessary to establish a claim for relief were, in the Court’s eyes, presented as “mere legal conclusions.” The plausibility inquiry (which, as H.R. 4115 suggests, assesses whether the nonconclusory allegations are sufficient to raise an inference of liability) is actually a method to save complaints that otherwise rest on mere conclusory allegations.

Nor should Twombly and Iqbal be read to overturn longstanding notice-pleading precedents like Conley. Read correctly, the framework established by Twombly and Iqbal is not inconsistent with (to quote S. 1504) “the standards set forth by the Supreme Court of the United States in Conley v. Gibson.” Admittedly, Twombly set aside Conley‘s “beyond doubt . . . no set of facts” language (which H.R. 4115 would explicitly reinstate). But what Twombly “retire[d]” was merely what it called a “focused and literal reading” of this phrase that would have precluded dismissal “whenever the pleadings left open the possibility that a plaintiff might later establish some set of undisclosed facts to support recovery.” The Supreme Court had never read Conley this way. If it had, a complaint that alleged nothing more than “The planet Earth is round” would survive, because any number of actionable facts might be consistent with the Earth being round.

Properly understood, Conley did not preclude dismissal as long as any set of facts would entitle the plaintiff to relief. It precluded dismissal unless “the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” This merely confirms that speculation about the provability of a claim is not a proper inquiry at the pleadings phase; provability is relevant only when it appears “beyond doubt” that the plaintiff cannot prove her claim. But the Twombly majority itself endorsed this idea; it wrote that “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely.” The dispositive question is — and always has been — what makes something a “well-pleaded complaint”? Conley and Twombly provide the same answer: “all the Rules require is ‘a short and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests.”

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