Civil Procedure Prof Blog

Fifth Circuit Rules on the Citizenship of a LLC for Purposes of Diversity Jurisdiction:

As noted on Federal Civil Practice Bulletin, the Fifth Circuit in Harvey v. Grey Wolf Drilling Co., --- F.3d ----, 2008 WL 4194538 (5th Cir. Sept. 15, 2008) joined the First, Second, Fourth, Sixth, Seventh, Eighth, Ninth, and Eleventh Circuits in holding that, for the purposes of diversity jurisdiction, the citizenship of an LLC is determined by the citizenship of all of its members.  Click here to read the Fifth Circuit’s opinion and here to read to post on Federal Civil Practice Bulletin.--Counseller/JM   

Recent Scholarship

The following two articles might interest our readers:

• Prof. Paul Lund, Federally-Chartered Corporations and Federal Jurisdiction
• Prof. Austen Parrish, Sovereignty, Not Due Process:  Personal Jurisdiction Over Nonresident, Alien Defendants

--RR

Regulatory Competition, Venue and Delaware's Stake in Corporate Law

Delaware has a near monopoly on desirability for incorporation. However, this monopoly might be faltering with the increase in the fight over venue. Faith Stevelman posted Regulatory Competition, Venue and Delaware's Stake in Corporate Law on SSRN.com looking at the increased fight over venue and the possible negative effects of this litigation.--Counseller

Sponge Bob to the Rescue

Hurricane Ike has significantly damaged the Texas coast, including the city of Houston, home to law firm Vinson & Elkins.  Many of Houston's millions of residents are still without power and other basic services.  To help lawyers cope with problem, V & E allowed their Houston lawyers (still without childcare) to bring their children to work with them.  V & E treated the kids to snacks and a Sponge Bob marathon in one of their mock courtrooms.  Read more here over at the ABA Journal.--Counseller

Preservice Removals and Appellate Review

While we've occasionally posted about preservice removals, Beck and Herrmann have done the heavy lifting.  In today's installment, they ask for appellate guidance.  Lower courts are split on whether a case can be removed when it contains a forum-state-citizen defendant who has not been served with process before removal. (see 28 U.S.C. s1441(b)).   A remand on this ground is unreviewable on appeal, and a denied remand motion is interlocutory.  So, they "urge some court to deny a motion to remand and then certify the jurisdictional question for interlocutory appeal, which would let an appellate court weigh in on the question and give trial judges (and litigants) some much-needed guidance." --RR

Balancing the Pleading Equation

Paul J. Stancil posted Balancing the Pleading Equation on SSRN, which explores the asymmetries of cost and information in the pleading system and how to strike the right balance between these considerations.--Counseller

"To the extent it is correct"

Recently, the Sixth Circuit decided In re Hamilton, a case involving interesting questions of preclusion, Rooker-Feldman, the Anti-Injunction Act, and discharge in bankruptcy.  Essentially, the bankruptcy court declared some debts discharged.  Later, a state court decided against tthe debtor, interpreting the discharge order to exclude a debt.  The state appellate court affirmed.  After some more procedural wrangling, the debtor returned to ask the bankruptcy court to enjoin execution of the state-court judgment. 

Generally, when there's an alleged exception to the Anti-Injunction Act based on the effect of a federal judgment, the party seeking a federal-court injunction must ask the federal court for the injunction before the state court rules on the issue.  The injunction seeker generally has two options, not three-- (1) she CAN litigate the issue in state court and appeal any adverse ruling (theoretically to the USSCT because the effect of a federal judgment is a federal-enough issue for s1257 jurisdiction); (2) she CAN seek an injunction in federal court under an AIA exception before the state court rules on the effect of the allegedly preclusion/effective federal judgment; (3) but she CANNOT have two bites at the apple by arguing the effect in state court and then resorting to a constructive appeal in federal court if the state court does not buy the preclusion (or effectiveness) argument.

In In re Hamilton, the Sixth Circuit decided that two bites at the apple are available in this context:  "A bankruptcy court can find that a postpetition state court judgment is void despite the full faith and credit normally given to state court judgments."  Although I am admittedly not a bankruptcy scholar, I must tentatively disagree with any "exception" based on the following reasoning:

[A]lthough state courts have unbridled authority to determine the dischargeability of debts, state courts have the authority to interpret a bankruptcy courts discharge order only to the extent that the state court's interpretation is correct.

--RR

OK, Discovery’s a Problem, But What Can Be Done About It?

Martha Neil has written a piece titled OK, Discovery’s a Problem, But What Can Be Done About It? on abajournal.com. The piece looks at the problems facing the discovery process and explores various possible solutions.--Counseller

'U Can't Touch This' Litigation Hold

Check out 'U Can't Touch This' Litigation Hold by Stanley P. Jaskiewicz over at LAW.com.  The piece explores the IT litigation hold and how the Federal Rules of Civil Procedure deal with the problem of litigation holds and ever expanding electronic data.--Counseller

"A Unified Theory of 28 U.S.C. s1331 Jurisdiction"

Click here to download A Unified Theory of 28 U.S.C. s1331 Jurisdiction, which Michigan State Law Prof Lou Mulligan recently posted on SSRN.  The abstract follows:

Title 28, section 1331 of the United States Code provides the jurisdictional grounding for the majority of cases heard in the federal courts, yet it is not well understood. The predominant view holds that section 1331 doctrine both lacks a focus upon congressional intent and is internally inconsistent. I seek to counter both these assumptions by re-contextualizing the Court's section 1331 jurisprudence in terms of the contemporary judicial usage of right (i.e., clear, mandatory obligations capable of judicial enforcement) and cause of action (i.e., permission to vindicate a right in court). In conducting this reinterpretation, I argue that section 1331 jurisdiction is best understood as a function of the federal right and cause of action plaintiff asserts. Under my view, these two concepts, when weighed against each other, offer strong evidence of congressional intent to vest the federal courts with jurisdiction and form the foundational elements for the federal question jurisdictional analysis. This principle underlies three standards which offer both a better explanation of the Court's past section 1331 cases and better guides for future decisions than the Holmes test. Under the first standard, section 1331 jurisdiction lies when a plaintiff makes an assertion of a non-judicially created federal cause of action and a mere colorable assertion to a federal right. Under the second standard, section 1331 lies when a plaintiff alleges a state-law cause of action and asserts a more weighty substantial federal right. Finally, under the third standard, section 1331 jurisdiction lies when plaintiff asserts a cause of action created as a matter of federal common law and plaintiff asserts a substantial federal common law right coupled with a sufficient showing to support the right

--RR

Court or Arbitrator - Who Decides Whether Res Judicata Bars Subsequent Arbitration Under the Federal Arbitration Act?

Jarrod Wong posted Court or Arbitrator - Who Decides Whether Res Judicata Bars Subsequent Arbitration Under the Federal Arbitration Act? on SSRN, which looks at the Federal Arbitration Act and examines whether courts or arbitrators determine the impact of the res judicata doctrine.--Counseller

Erie and the History of the One True Federalism

Susan A. Bandes has posted Erie and the History of the One True Federalism on SSRN, which reviews Ed Purcell's book, Brandeis and the Progressive Constitution: Erie, the Judicial Power, and the Politics of the Federal Courts in Twentieth-Century America (New Haven: Yale University Press, 2000).--Counseller

Fraudulent Joinder: Right versus Obligation to Remove

Fraudulent joinder is a familiar removal tool for defendants.  The doctrine establishes a right to remove by disregarding a jurisdictional spoiler's citizenship.  And 30 days is a familiar removal deadline for defendants: the removal statute's 30-day clock starts ticking from particular occurrences.  The interrelationship between the right to remove and the obligation (in the clock-ticking sense) is not always clear.   For example, an amended pleading clarifying that the amount in controversy exceeds the jurisdictional minimum starts the 30-day clock, but defendants need not wait for that amended pleading if they choose to remove and attempt to prove the amount by a preponderance of the evidence.  The clock starts ticking, generally, when a court paper makes it obvious, but the right to remove does not depend upon obviousness in the state-court record.  When does the 30-day clock start ticking in fraudulent-joinder cases?   What if the state court petition reveals an obviously bogus claim against the state-court spoiler?  Does this trigger the 30-day clock?  Recently, Judge Martinez didn't quite answer this question, but he did remand a case because "by not clearly stating when they learned of the alleged fraudulent joinder, Defendants have created both ambiguity and doubt in their Notice of Removal,and as a result the court finds that they did not properly remove the action."  Heads up, removers: Download Ayres.pdf   --RR

City of Cleveland v. Deutsche Bank Trust Co.

"For procedural jocks, life don't get much better than this," say Beck and Herrmann yesterday, reporting on a recent removal/remand decision.  Click here to read their summary and find a link to the decision, which addresses everything from the timing and medium of the consent needed for unanimity to who can give that consent.  --RR   

A new comment to an old post

Back in June, Prof. Counseller wrote about a personal-jurisdiction case styled Phillips v. Prarie Eye Center from the First Circuit.    We recently received the following comment and thought we should bump it to the top in case folks want to respond:

So, I am the Dr. Phillips in the above lawsuit. I am also an attorney. We are preparing an appeal regarding this case to the Supreme Court. I was hoping that someone would be so kind as to share their opinions regarding issues that can be brought up in the brief that will decrease the liklihood that the SC will deny cert. We will certainly include an argument that e-mail should be treated no different than any other from of communication (in person or otherwise). We will also include arguments that I cannot be considered to have reached out in Illinois and all other 50 states by posting my resume on a passive website and that, in fact, Prairie reached out by initating contact with me through an e-mail directed specifically to me. What other strong points do you see?

--RR

Standing Committee Requests Comments on Proposed Rules' Amendments

Ben Spencer reports here.

Cross-Jurisdictional Class-Action Tolling Scorecard

Does filing an unsuccessful class action in one jurisdiction toll the limitations periods for potential plaintiffs in another jurisdiction?  Beck and Herrmann have done the research for you -- and have posted a "scorecard."  --RR

Class-Action Reading

Blum v. General Electric contains an interesting blend of procedure and contract law.  There, some class members had earlier entered into a "Stipulation of Dismissal of Certain Plaintiffs' Claims Without Prejudice."  In that earlier litigation, the parties agreed to the following stipulation:"In the event that the Court should deny the motion for class certification  ... Plaintiffs may refile their claims against Defendants . . . within thirty days after such a ruling, or be barred from doing so."   The Court did deny certification, and the dismissed plaintiffs refiled -- but more than thirty days after the denial.  After the plaintiffs refiled, Defendants moved to dismiss because the refiling was late under the stipulation.  The Court held the stipulation unenforceable for lack of consideration.   Download Blum.pdf   For more class-action reading, click here to download a recent SSRN piece advocating against cost-benefit analyses in class-certification decisions.    --RR

E-Discovery Symposium - Call for Papers

FYI:

Chase College of Law

Northern Kentucky University Law Review

Call for Papers and Panelists

E-discovery Symposium – Saturday, February 28, 2009

 

           Chase College of Law’s Northern Kentucky University Law Review welcomes proposals of both articles and panel presentations for its spring 2009 symposium on E-discovery.  The symposium will be held Saturday, February 28, 2009.  CLE approval will be sought for Kentucky, Ohio and Indiana.  Drafts of the articles would need to be submitted by January 1, 2009, with an expected publication date of spring 2009.  Travel expenses for panelists will be covered.  Please complete the below form and submit it by Friday, September 26, 2008 to Associate Professor Jennifer Anglim Kreder at krederj1@nku.edu.

 

Name: ______________________________________________________________________________

 

Title: _______________________________________________________________________________

 

Law School or Office Affiliation: __________________________________________________________

 

E-mail & Phone: ______________________________________________________________________

 

Address: ____________________________________________________________________________

 

Title of Submission: ___________________________________________________________________

 

____________________________________________________________________________________

 

Submitting: ____ Article Only (approx. ____ pages in Word format);  ____ Presentation Only; ____ Both

 

Description or abstract (max 250 words):

 

Two cases on sanctions

Two recent Seventh Circuit cases involving sanctions deserve a read:

In de Manez v. Bridgeston, in the context of forum non conveniens, the parties fought about whether Mexican courts were an available alternative forum.  "The evidence showed that plaintiffs' U.S. lawyers ... had hired Mexican lawyers on a contingent-fee basis ... for the express purpose of filing a deficient complaint in an improper Mexican court." The idea, of course, was to use the dismissal to convince the federal court that Mexico was not an available adequate forum.  Despite this evidence, the Seventh Circuit vacated and remanded because the party being sanctioned did not receive constitutionally adequate notice and an opportunity to be heard.  Download manez.pdf

In Banco Del Atlantico v. Woods, the sanction of dismissal stuck.  The court held:

The question before us on the plaintiffs’ appeal is whether Judge McKinney abused his discretion in putting an end to this case. We have cautioned that a sanction of dismissal is a last resort which can only be employed in rare cases.  It is a “draconian” remedy which should be applied only in extreme situations, when there is a clear record of delay or contumacious conduct, or when other less drastic sanctions have proven unavailing. That doesn’t mean, however, that it can never be used. Even Draco got it right every once in awhile, and today, when district courts have several hundred cases on their dockets, there are times when the “draconian” remedy is appropos. And that time was reached in this case.

On appeal, the plaintiffs argue, among other things, that“there was no finding or record of delay, contumacious conduct, willfulness, bad faith or fault . . . .” The argument is—if nothing else—audacious. There is, in fact, little else in the record. (citations omitted).

Download Banco.pdf

--RR