Federal Civil Practice Bulletin

Judge Rosenthal Reviews Pleading Standards after Iqbal

2009-06-30T08:57:00.001-04:00

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

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

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

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

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

Hessick Posts Article on Federal Question Jurisdiciton on SSRN

2009-06-16T00:07:00.000-04:00

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

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

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

Prof. Sherman Posts Article on MDL Process on SSRN

2009-06-12T10:27:00.002-04:00

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

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

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

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

2009-06-11T11:37:00.001-04:00

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

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

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

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

2009-06-10T11:35:00.000-04:00

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

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

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

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

2009-06-09T10:58:00.003-04:00

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

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

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

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

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

2009-06-05T22:37:00.004-04:00

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

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

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

Supreme Court to hear Vioxx fraud case

2009-05-27T09:59:00.001-04:00

Jurist reports:

The US Supreme Court on Tuesday granted certiorari in Merck & Co. v. Reynolds [docket; cert. petition], in which the Court will decide when the statute of limitations begins to run in a securities fraud case under th "inquiry notice" standard. Investors brought a class action suit against the drug maker Merck & Co. in November 2003, alleging that it had deliberately concealed information about the safety record of its painkiller Vioxx . The case was dismissed by US District Court Judge Stanley Chester in April 2007 after he determined that investors were on "inquiry notice" of the alleged fraud in September 2001 when the Food and Drug Administration (FDA) released a warning letter about the painkiller. The Third Circuit Court of Appeals reinstated the case in September 2008, finding that Chester had "acted prematurely in finding as a matter of law that [the investors] were on inquiry notice of the alleged fraud."

SCOTUS Invalidates NY Law that Strips Trial Courts of Jurisdiction over Suits against State Correctional Officers

2009-05-26T12:31:00.003-04:00

The Supreme Court decided the following case today (per BNA's U.S. Law Week - Supreme Court Today):

Haywood v. Drown, No. 07-10374. A New York law that strips the state's trial courts of jurisdiction to hear suits for damages, including federal civil rights actions under 42 U.S.C. § 1983, brought against state correctional officers, but not similar actions against other state officials, violates the supremacy clause of the Constitution. The New York statute does not qualify as a neutral rule of judicial administration that would be permissible and states do not have authority to nullify a federal right or cause of action they find inconsistent with their local policies.

Download the opinion from Cornell's LII here.

Fourth Circuit: Court May Hear Appeals Filed Outside 10-Day Window

2009-05-25T06:47:00.002-04:00

Per U.S. v. Urutyan, No. 08-4295 (May 7, 2009):

Urutyan was convicted by a jury on all counts. Judgment was entered against him on January 22, 2008. Urutyan filed a notice of appeal with the district court March 4, 2008. The notice was not timely. Appellate Rule 4(b)(1)(A) imposes a ten-day deadline on the filing of a notice of appeal in criminal cases, and Urutyan never requested an extension of that deadline.

. . .

[I]n light of the Supreme Court’s holding that "[i]t is axiomatic that court-prescribed rules of practice and procedure, as opposed to statutory time limits, do not create or withdraw federal
jurisdiction," Kontrick, 540 U.S. at 370, we conclude that the non-statutory time limits in Appellate Rule 4(b) do not affect subject-matter jurisdiction.

WSJ BLog: Why Defense Lawyers Are Lovin’ the Iqbal Decision

2009-05-22T06:32:00.002-04:00

Check out this blog post by Ashby Jones on the Wall Street Journal's Law Blog: Why Defense Lawyers Are Lovin’ the Iqbal Decision.

Professors Posting about Iqbal

2009-05-20T13:46:00.002-04:00

See posts by professor Dorf, Wasserman (and here), and Dodson on Ashcroft v. Iqbal.

Iqbal Court: Twombly Applies Beyond Antitrust Context

2009-05-18T21:30:00.002-04:00

One debate that has persisted among some scholars regarding the import of Twombly has been settled by the Supreme Court in Monday's decision in Ashcroft v. Iqbal: whether the Twombly standard can be limited to antitrust cases:

"Respondent first says that our decision in Twombly should be limited to pleadings made in the context of an antitrust dispute. This argument is not supported by Twombly and is incompatible with the Federal Rules of Civil Procedure. Though Twombly determined the sufficiency of a complaint sounding in antitrust, the decision was based on our interpretation and application of Rule 8. 550 U. S., at 554. That Rule in turn governs the pleading standard “in all civil actions and proceedings in the United States district courts.” Fed. Rule Civ. Proc. 1. Our decision in Twombly expounded the pleading stan-dard for “all civil actions,” ibid., and it applies to antitrust and discrimination suits alike. See 550 U. S., at 555-556, and n. 3."

SCOTUS Decides Ashcroft v. Iqbal

2009-05-18T11:47:00.002-04:00

The Supreme Court has issued its opinion in Ashcroft v. Iqbal, deciding that Iqbal's complaint failed to plead sufficient facts to state a claim for purposeful and unlawful discrimination by government officials. Here is an excerpt from the Syllabus:

"Iqbal’s pleadings do not comply with Rule 8 under Twombly. Several of his allegations—that petitioners agreed to subject him to harsh conditions as a matter of policy, solely on account of discriminatory factors and for no legitimate penological interest; that Ashcroft was that policy’s “principal architect”; and that Mueller was “instrumental” in its adoption and execution—are conclusory and not entitled to be assumed true. Moreover, the factual allegations that the FBI, under Mueller, arrested and detained thousands of Arab Muslim men, and that he and Ashcroft approved the detention policy, do not plausibly suggest that petitioners purposefully discriminated on prohibited grounds."

The Court's opinion and the dissents by Justice Souter and Justice Breyer can be viewed at http://www.law.cornell.edu/supct/html/07-1015.ZS.html.

Supreme Court Limits Federal Jurisdiction to Compel Arbitration

2009-05-13T10:02:00.002-04:00

ABA's Litigation News has a story on the Supreme Court's recent decision in Vaden v. Discover Bank. Here is an excerpt:

Federal court jurisdiction to enforce arbitration agreements is not as broad as one may have thought, according to a recent U.S. Supreme Court decision. Vaden v. Discover Bank.

In Vaden, the Supreme Court has held that a federal district court may exercise jurisdiction over a petition to compel arbitration of litigation pending in state court only where the complaint, and not the counterclaim, in the state action establishes a basis for federal jurisdiction. Where a complaint rests on state law only, a federal law counterclaim is not sufficient to vest jurisdiction in the district court.

Read the entire article by clicking here.

Eisenberg, Heise, and Wells Post Punitive Damages Article on SSRN

2009-05-11T20:44:00.003-04:00

Professors Theodore Eisenberg, Michael Heise, and Martin T. Wells (all of Cornell) have recently posted an Article entitled Variability in Punitive Damages: An Empirical Assessment of the U.S. Supreme Court’s Decision in Exxon Shipping Co. v. Baker. Here is the Abstract:

Exxon Shipping Co. v. Baker acknowledged what virtually all methodologically sound punitive damages research shows. The Supreme Court relied in part on an article by the present authors and others to state that empirical studies undercut the most audible criticism of punitive damages and that no mass of runaway punitive awards existed. Paradoxically, the Court simultaneously expressed concern about jury predictability based on a high mean and standard deviation in the punitive-compensatory ratio published in our article. The Court therefore reduced a $2.5 billion punitive award relating to the Exxon Valdez oil spill to $500 million to implement a 1:1 punitive-compensatory ratio and stated that “the constitutional outer limit may well be 1:1.” This article shows that our empirical findings relied on by the Court do not support the unpredictability concern or widely applying the limiting ratio. The high mean and standard deviation are artifacts of not accounting for the key variable that explains punitive awards - the compensatory award. Stratifying the mean and standard deviation of the punitive-compensatory ratio by the level of the compensatory award shows that the ratio is reasonably stable in high award cases and significantly and explicably more variable in low award cases. Basing doctrine on summary statistics that combine these heterogenous distributions is not statistically supportable. The award reduction in Exxon Shipping may have promoted consistency with other high compensatory award cases but the 1:1 principle the case hints at is not statistically supportable across the broad range of compensatory awards, and could contribute to an inability to tailor punitive awards to the facts and circumstances of particular cases.

This Article may be downloaded by visiting http://ssrn.com/abstract=1392438.

SCOTS Decides Case Addressing Reviewability of Post-Removal Remand Order

2009-05-05T11:52:00.003-04:00

Yesterday the Supreme Court issued its decision in Carlsbad Technology, Inc. v. HIF Bio, Inc., a case that addressed the reviewability of a post-removal remand order. Here is the Syllabus:

Respondents filed a state-court suit alleging that petitioner had violated state and federal law in connection with a patent dispute. After removing the case to Federal District Court under 28 U. S. C. §1441(c), which allows removal if the case includes at least one claim over which the federal court has original jurisdiction, petitioner moved to dismiss the suit’s only federal claim, which arose under the Racketeer Influenced and Corrupt Organizations Act (RICO). Agreeing that respondents had failed to state a RICO claim upon which relief could be granted, the District Court dismissed the claim; declined to exercise supplemental jurisdiction over the remaining state-law claims under §1367(c)(3), which allows such a course if the court “has dismissed all claims over which it has original jurisdiction”; and remanded the case to state court. The Federal Circuit dismissed petitioner’s appeal, finding that the remand order could be colorably characterized as based on a “lack of subject matter jurisdiction” over the state-law claims, §1447(c), and was therefore “not reviewable on appeal,” §1447(d).

Held: A district court’s order remanding a case to state court after declining to exercise supplemental jurisdiction over state-law claims is not a remand for lack of subject-matter jurisdiction for which appellate review is barred by §§1447(c) and (d). With respect to supplemental jurisdiction, a federal court has subject-matter jurisdiction over specified state-law claims, see §§1367(a), (c), and its decision whether to exercise that jurisdiction after dismissing every claim over which it had original jurisdiction is purely discretionary, see, e.g., Osborn v. Haley, 549 U. S. 225 . It is undisputed that when this case was removed, the District Court had original jurisdiction over the federal RICO claim under §1331 and supplemental jurisdiction over the state-law claims, which were “so related to claims … within such original jurisdiction that they form[ed] part of the same case or controversy,” §1367(a). On dismissing the RICO claim, the court retained its statutory supplemental jurisdiction over the state-law claims. Its decision not to exercise that statutory authority was not based on a jurisdictional defect, but on its discretionary choice. See Chicago v. International College of Surgeons, 522 U. S. 156 . Pp. 3–6.

508 F. 3d 659, reversed and remanded.

Thomas, J., delivered the opinion for a unanimous Court. Stevens, J., and Scalia, J., filed concurring opinions. Breyer, J., filed a concurring opinion, in which Souter, J., joined.

Souter retiring from Supreme Court

2009-04-30T23:47:00.000-04:00

Per CNN.com: Supreme Court Justice David Souter is retiring after more than 18 years on the nation's highest court, a source close to Souter told CNN. Souter will leave after the current court term recesses in June, the source said. Filling Souter's seat would be President Obama's first Supreme Court appointment -- and the first since George W. Bush's picks of Samuel Alito in 2006 and Chief Justice John Roberts in 2005

Advisory Committee Takes Final Action on Rule 26 and 56 Proposed Amendments

2009-04-23T00:03:00.000-04:00

Professor Steven Gensler has shared the following report on the Civil Rules Advisory Committee Meeting that recently took place:

I thought I’d give a quick update on the Advisory Committee’s meeting from earlier this week. The Committee took final action on two proposals – Rule 26 expert discovery and Rule 56 – that I know quite a few of you have been following.

The Committee voted to approve the Rule 26 proposal substantially as published. It makes four principal changes. First, for experts that are not subject to the formal report requirement, it requires disclosures stating the subject matter on which the witness is expected to present expert evidence and a summary of the facts and opinions to which the expert is expected to testify. Second, it amends the text of Rule 26(a)(2)(B) to link the disclosures in the expert report to “the facts or data” considered by the expert instead of “the data or other information” considered by the expert. Third, it extends Rule 26(b)(3) work-product protection to draft reports. And fourth, it extends Rule 26(b)(3) work-product protection to attorney-expert communications except in three defined areas.

The bench and bar overwhelmingly supported the Rule 26 proposals. While they will limit expert discovery, the consensus was that the current system of very open expert discovery imposed substantial costs and yielded little of any use, since the lawyers and experts just found ways not to generate anything that would be subject to discovery. There was opposition by a group of very respected law professors who thought the proposal failed to properly value the need to ensure that experts are independent and not just paid mouthpieces for the attorneys who hire them. While those concerns are legitimate, the Committee believed, unanimously, that the proposal struck the right balance (recall that discovery is allowed in three areas, and of course the expert still must defend his or her opinion on the merits).

The Committee voted to approve the Rule 56 proposal but with one big change. As published, the proposal would have established a nationally-uniform procedure for making and briefing summary judgment motions. The procedure was informally referred to as “point-counterpoint,” and it was modeled after procedures currently in place in a number of districts. In written comments and at hearings, the Committee heard from many people who thought either that point-counterpoint was a bad procedure or that, good or bad, there was no need to impose it nationally. Ultimately, the Committee concluded that it lacked a sufficient basis for mandating point-counterpoint in light of the continuing debate over whether it was or was not “best practice” and the fact that (unlike, for example, the summary judgment standard), there is need for a nationally-uniform summary judgment processing rule.

The Committee also voted to reinstate the word “shall” into Rule 56. During the Style Project, “shall” was translated to “should” under the generally-applicable style conventions. The Committee note to the 2007 amendment that made this change reinforced that, while should reflected a reservoir of discretion, there would be few occasions not to grant SJ when the standard had been met. The Rule 56 proposal as published continued to use should. We received many, many comments saying that the proper translation of shall is must, and asking us to make that change now. The Committee voted to revert to shall on the basis that neither should nor must truly capture the subtleties that have developed in this area.

As for the Rule 56 proposal generally, the purpose from the beginning was to bring the rule up to date without changing the standard for when summary judgment was available. Anyone who has read the text of Rule 56 recently knows that the text of the rule bears little relation to practice. Some of the updating included (1) creating text-based authority for partial summary judgments; (2) clarifying what the court may do when a party fails to respond to (or properly respond to) a summary judgment motion; and (3) clarifying the court’s power to grant summary judgment for a nonmovant, on grounds not raised, or sua sponte. And overall, Rule 56 was reorganized to flow more logically.

With these votes, the Rule 26 and Rule 56 proposals now go to the Standing Committee for their consideration. From there, they would go to the Judicial Conference, the Supreme Court, and Congress respectively. By my math, if the proposals continue to receive approval and proceed along that path, then these proposals would take effect on December 1, 2010.

SCOTUS Rules on Appropriate Analysis Federal Circuit Must Apply to Review Veterans' Appeals Court Errors

2009-04-22T01:45:00.003-04:00

Yesterday the U.S. Supreme Court decided Shinseki v. Sanders, No. 07-1209. Here is the BNA U.S. Law Week summary of the holding:

In reviewing veterans' claims on appeal from the Court of Appeals for Veterans' Claims where the Department of Veterans Affairs has failed to provide a veteran with a certain kind of statutorily required notice, the Federal Circuit is required by 38 U.S.C. §7671(b)(2) to rely on the kind of "harmless error" analysis that is usually applied in civil cases, rather than an overly complex and rigid framework of presumptions and evidentiary burdens.

Prof. Dodson Posts Article on Comparative Pleading Standards

2009-04-15T16:35:00.002-04:00

Professor Scott Dodson (Arkansas) recently posted an Article entitled Comparative Convergences in Pleading Standards on SSRN. Here is the Abstract:

Comparative civil procedure has had little influence in American jurisprudence and commentary, in part because of American procedure's deep and widespread exceptionalism. But this may be changing, at least in certain areas. The American notice pleading standard, for example, which has long been considered exceptional, shows signs of trending toward the fact pleading models of foreign countries. Congressional experimentation with heightened pleading in statutes such as the Private Securities Litigation Reform Act and the Supreme Court's recent pronouncement in Bell Atlantic v. Twombly suggest that American pleading jurisprudence is moving away from its traditionally exceptionalist corner and towards a regime focused on facts that is more akin to the global norm. If so, then this trend may allow for more meaningful transnational dialogue between the U.S. and foreign systems, more valuable comparative analyses in the U.S., and the potential to harmonize civil procedure across national boundaries.

This Article may be downloaded by visiting http://ssrn.com/abstract=1351994.

Attorney Disbarred for Yelling at Federal Magistrate's Law Clerk

2009-04-10T13:33:00.002-04:00

Per Legal Blog Watch, April 10, 2009:

Be kind to a judge's law clerk. That is the moral of a 5th U.S. Circuit Court of Appeals decision this week upholding the one-year disbarment from federal court of a lawyer who did not take kindly to the law clerk's phone call. As the lawyer grew increasingly angry during the call, the law clerk duly wrote it all down, later reporting it to Mildred Methvin, the federal magistrate judge for whom she worked in the Western District of Louisiana. Magistrate Judge Methvin passed it on to U.S. District Judge Tucker Melancon, all of which set in motion the path to the lawyer's disbarment.

For more information and links to the opinion click here.

Seventh Circuit Rules on Conflict between CAFA and the Securities Act

2009-04-08T00:55:00.000-04:00

The ABA's Litigation News is reporting on a Seventh Circuit decision that speaks to the seemingly conflicting removal provisions of the Class Action Fairness Act and the Securities Act:

The Seventh Circuit’s recent decision in Katz v. Gerardi [PDF], regarding the removal of class action Securities Act claims brought in state court, has raised questions about the intersection between Section 22(a) of the Securities Act of 1933 and the Class Action Fairness Act of 2005 (CAFA) (28 U.S. § 1332(d)(2)).

The dispute in Katz arose from a real estate investment trust merger. The issue was “whether §22(a) insulates all claims under the 1933 Act from removal under the 2005 Act.”

The Seventh Circuit found that “Section 22(a) and the 2005 Act are incompatible; one or the other must yield,” and it held that Section 22 of the 1933 Act does not prevent removal when the requirements of CAFA are met. Instead, “securities class actions covered by the 2005 Act are removable, subject to exceptions in §1332(d)(9) and §1453(d).”

The full article is available here.

6th Cir. Cites Twombly as Requiring "Facts Sufficient to Support More than a Speculative Injury to Competition" in Antitrust Case

2009-04-07T08:41:00.002-04:00

Per CBC Companies, Inc. v. Equifax, Inc., --- F.3d ----, 2009 WL 860225 (6th Cir. Apr. 2, 2009):

CBC's complaint contains only conclusory allegations, and not facts sufficient to support more than a speculative injury to competition. See Twombly, 550 U.S. at 555. CBC suggests that Equifax is: (1) diminishing the competitive advantage of reissues over tri-merged reports; (2) restricting competition between its own reseller subsidiary, Equifax Mortgage, and other resellers; and (3) increasing reissue costs and decreasing options for mortgage lenders. In effect, CBC argues injury in the form of “higher costs [for reissues] and loss of market share in the Mortgage Lender Market.”

But CBC's complaint fails to allege key facts to substantiate an antitrust injury-that is, that competition in the Mortgage Lender Market decreased due to Equifax's Reseller Agreement. Although the complaint contends that “CBC Innovis and other Resellers are the principal victims of Equifax's unlawful actions,” CBC never identifies any of these other resellers, and never establishes whether any of these resellers signed a contract similar to the Reseller Agreement. See Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 437 (6th Cir.2008) (“Without an explanation of the other insurance companies involved, and their products and services, the court cannot determine the boundaries of the relevant product market and must dismiss the case for failure to state a claim.”). Moreover, although CBC filed its amended complaint in August 2007, several months after signing the Reseller Agreement, the complaint fails to allege any specific increases in costs for its reissues or lost market sales in the Mortgage Lender Market. CBC's complaint offers generalized allegations of antitrust injury, but the Supreme Court requires more than “naked assertion[s]” to establish antitrust standing. See NicSand, 507 F.3d at 451 (quoting Twombly, 550 U.S. at 557). As the Twombly Court pronounced, “a naked assertion ... gets the complaint close to stating a claim, but without some further factual enhancement it stops short of the line between possibility and plausibility.” 550 U.S. at 557.

Several Non-Time Computation Amendments to FRCP Included among Changes Approved by the Supreme Court

2009-04-06T11:11:00.003-04:00

The Supreme Court approved amendments to the Federal Rules of Civil Procedure on March 26, 2009. Although it is well known that those amendments included the so-called time computation amendments, there were also several non-time computation amendments that were approved, including the following:

- Rule 13(f) was abrogated.
- Rule 15(a) will be amended to permit amendment as a matter of course within 21 days of service of a motion under Rule 12(b), (e), or (f) or 21 days after a responsive pleading has been filed, whichever is earlier. Thus, the right to amend will no longer be extinguished upon the filing of a responsive pleading.
- Rule 48 was amended to add jury polling.
- Rule 81 was amended, inter alia, to expand the definition of the term "state" to include any commonwealth or territory of the United States.

The amendments also propose creating a new rule, FRCP Rule 62.1, that adopts a procedure for dealing with motions that a district court lacks the authority to grant due to a pending appeal.

Visit http://www.uscourts.gov/rules/index2.html#supct0309 for the full text of these and all of the approved rule changes.