Legal knowledge | Higher education » The Nature of Complex Litigation

Source: http://www.doksinet CHAPTER I: THE NATURE OF COMPLEX LITIGATION 4 Characteristics of “complex” cases: 1. Substantive difficult or novel legal and factual issues 2. Number of parties / claims involved 3. Amount of money involved 4. Existence of overlapping or common issues amongst a number of cases (e.g, mass product liability) Overarching Themes: 1. Aggregation 2. What is procedure for? Efficiency and fairness. and maybe party participation? a. Efficiency: We want a reasonably accurate outcome as quickly as possible b. Due process and parties’ participation in decisions that affect their lives 3. What are the courts for? a. Resolving private disputes? b. Instruments of social change? 4. Who should control litigation? a. Traditionally, π is master of her complaint b. However, πs have lost much of their control, to other plaintiffs through aggregation devices, and to the judges who now manage a lot more (e.g, discovery) c. πs are also losing a lot of control to their

own attorneys 5. The relationship between substance & procedure a. How does substance affect procedure? i. Trans-substantive procedure: Eg, If you file a case in federal court where notice pleading only requires a short & plain stmt of the claim for relief, you are held to the same simple standard whether you’re filing a diversity action for a slip-and-fall, or whether you’re filing a claim for securities fraud against a huge company. b. How does procedure affect substance? i. Erie provides the possible argument that federal procedure is changing/modifying your state substantive rights. Eg, Class Action Rule, which tends to iron out differences between cases, may affect what liabilities Δ has to pay if found liable. This means the amount Δ has to pay is affected by whether or not the suit becomes a class action. A. THE METAMORPHOSIS OF LITIGATION 1. 2. 3. What caused the litigation “boom?” a. Congressional creation of new rights on which to sue b. Court creation

of new types of suit, esp constitutional claims & expanded notions of product liability c. Some argue that it is undue litigiousness by Americans treating the court system like a slot machine Significant shift in the type of litigation being filed a. Public law cases tending to involve more complex forms of litigation b. Constitutional cases seeking reform of public institutions (jails, schools, hospitals, etc) c. Cases based on rights derived from legislation & administrative regulations d. Environmental cases e. Business cases Traditional Model versus Public Law Model a. Chayes, The Role of the Judge in Public Law Litigation (1976): The traditional model of litigation is being replaced with a new, emerging model, which Chayes terms the “Public Law Litigation” model. b. Traditional Model i. Bipolar: a contest between adversaries decided on a winner-takes-all basis ii. Retrospective: events and consequences are completed iii. Right & remedy are interdependent: Scope of

relief depends on the substantive violation 1 Source: http://www.doksinet 4. 5. iv. Self-contained episode: Impact of the judgment affects on the parties at hand, and entry of the judgment ends the court’s involvement v. Party-initiated and/or party-controlled: Responsibility for the organization and development of the case falls to the parties. c. Public Law Model i. “Sprawling and amorphous” party structure ii. Not necessarily adversary; much mediation and negotiation iii. Judge is dominant in organizing and guiding the case iv. Judge became the creator and manager of “complex forms of ongoing relief” that affect people outside the scope of the lawsuit and require the court’s continued involvement (e.g, school desegregation, prisoner rights, employment discrimination) Mass Tort Litigation a. Chayes’ model suited the 1960’s and 1970’s, but was outdated by the 80’s and 90’s when modern mass tort litigation began to arise. b. Made possible by the procedural

reforms of 1938, which introduced joinder devices c. Class action rule was amended in 1966 allowing for injunctive and declaratory relief Rule 23(b)(3) a. Is the goal efficiency, to allow courts and parties to handle many similar legal claims without requiring each individual bring his own suit? b. Is the goal enabling, to allow suits not possible on an individual basis to pursue social goals? c. Rand Institute for Civil Justice (2000) argues that it is inherently both: “Any change in court processes that provides more efficient means of litigating is likely to enable more litigation.” RIfCJ also argues that Rule 23 is inherently an enabling mechanism, even with its efficiencies. d. Business representatives claim class actions benefit the attorneys more than the plaintiffs, and that consumers end up paying for the increased litigation through increased product costs. e. Manufacturers claim that mass-product defect suits are often based on weak evidence and basically force a

settlement because of the huge financial risks associated with litigation. f. Consumer advocates claim that the mass suits serve a regulatory purpose, a check on business practices, but that they sometimes produce bad outcomes that benefit the attorneys more than the plaintiffs. CHAPTER II: JOINDER AND STRUCTURE OF SUIT IN A UNITARY FEDERAL FORUM Aggregation Devices to be looked at: (1) Joinder (2) Transfer (3) Consolidation (once all cases are transferred to a single district) (4) Class Action PERMISSIVE PARTY JOINDER Permissive Joinder: Rule 20. Those who may be joined 1. The claims arise from the same transaction / occurrence; AND 2. Raise at least one common question or law or fact 3. Consolidation: Rule 42. Where actions involving a common question of law or fact are pending before the same court, the court may order the actions to be consolidated into one action. Mosely v. General Motors Corp (1974): Permissive joinder requirements were met in a gender & race discrimination

case: 1. Transaction/Occurrence: A company policy that discriminated against blacks created a “system” of transactions/occurrences through which the individual πs were harmed. 2. Question of law/fact: Right to relief depends on whether each π was harmed by racial discrimination. Thus, Δ’s discriminatory conduct is a shared question of fact. The fact that the conduct may have affected each π in different ways is immaterial. What makes the case complex? The number and types of plaintiffs involved. 2 Source: http://www.doksinet All involved parties thought joinder was essential. Defense filed a motion for misjoinder, showing their concern for the scope of the case, and πs took an interlocutory appeal, showing their concern for the issue. The judge was clearly concerned as well, because the district judge has to essentially certify that it’s worth delaying litigation to get a ruling on that appeal. As the judge, when you’re deciding joinder issues, you have in front of

you only the pleadings. Should you require proof of meeting the Rule 20 requirements to allow a case to proceed? The evidence necessary to prove that may be in the hands of the other side. The dilemma is that it’s very hard to see at the outset whether the π’s offered structure of the case will actually work, and yet, procedurally, that’s precisely when you must decide. What should the injunction look like at the end of the case? If an injunction is meant to address a systemic problem of the company, does it not suggest that the current/other employees of GM are indispensable parties, since it is their work environment/relationship that will be affected by that injunction? Why did πs include the Union as a defendant? Because without the Union, you can’t get an injunctive change that will really restructure GM. Strategically, here is an example of a π’s lawyer shaping a lawsuit in relation to the relief they were after. That’s why π joined mulitple πs together and chose

to include the Union as Δ. You also see how the substance of the legal theory involved in the case drives the procedure involved in the case. Stanford v. Tennessee Valley Authority (1955): Basic Facts: π sued two separate companies for damages resulting by fluorine gas fumes emitted from Δs’ plants. Δ requested a misjoider ruling, or severance. Issue: The question becomes whether you can characterize the emission of fluorine gas from two separate plants as a single transaction or occurrence. In TN state court, these Δs couldn’t be bound together, but because there’s a federal rule on point (Rule 20) π can bind them. But judge has to apply TN substantive law, which says there is no theory of joint liability. Rule 42: Case not dismissed, because Rule 42 permits consolidation if a common question of law/fact is to be considered. Examples of such questions: (1) Is it a permanent or temporary nuisance?; (2) Are the fumes capable of and did they actually produce the damage

claimed?; and (3) Could Δ have used a device or different production methods to curb the production of the fumes? Order: Claims are severed EXCEPT that they will be tried before the same jury: separate complaints must be filed, separate pleadings, motions, verdicts and judgments. Will preserve for each Δ procedural advantages of separate trials, including the right to peremptory juror challenges. This is actually probably worse for Δs, since they are separate for the pretrial proceedings (don’t have access to each other’s discovery materials or depositions, for instance) but they have to be tried together, making it harder for them to point fingers at each other. What is Mosley was reversed, and a big company wants to sue a bunch of “little guys”? Cable company tries to sue everyone that had been getting illegal pay-per-view, for example. Court refused to allow them to meet the transaction test. Is that in conflict with Mosley? - Probably not, since it’s unlikely that the

cable-stealers were part of some organization or group that had a systematic policy of cable-stealing. Hall v. EI Du Pont Nemours & Co, Inc and Chance v EI Du Pont Nemours & Co, Inc (1972): Chance: Problem: πs cannot identify the manufacturer of the cap that injured their child. Apply Rule 20: (1) same transaction/occurrence, PLUS (2) common issue of law/fact. Joint Liability: Δs could be held responsible as a group under several theories of joint liability, including (1) concert of action creating dangerous circumstance; (2) enterprise liability; and (3) Summers v. Tice alternative liability. [Notes also mention (4) market share liability theory] Interplay of Substance & Procedure: You see Judge Weinstein reading the procedure very broadly to effectuate the substantive goals of the tort law. You see the judge in Mosley reading very broadly to effectuate the substance of the employment discrimination laws. Common Question of Law: Cannot be determined, as Judge required

briefs regarding NY’s choice of law statutes. For now, he assumes all the states will agree on their applicable tort law Common Question of Fact: YES. For example, whether Δ exercised joint control over labeling, whether Δs operated as joint enterprise with regard to labeling. 3 Source: http://www.doksinet Outcome: Permit πs to litigate the issue of joint activity in this court, then transfer the questions which turn on the particular facts of each accident to the federal districts in which accidents occured. Hall: Joint Liability: Not present here. Unlike Chance, the families here were not each suing all of the manufacturers. Rather, the Judge found that it was just “happenstance” that three families happened to be suing two of the same manufacturers. Unlike Chance, each π was claiming only against the manufacturer of the particular cap involved with their injury. Common Question of Law/Fact: Not present. Recovery will turn on questions of negligence and strict

liability, using specific evidence related to the separate circumstances of each instance. COMPULSORY PARTY JOINDER Rule 19: Necessary & Indispensable Parties: 1. Under Rule 19(a), the party is necessary if: a. No complete relief is available to current parties without the outsider, OR b. Outside party has an interest in the lawsuit that may be practically impaired (not legally impaired) by outcome of the lawsuit, OR c. Current party would be subject to multiple or inconsistent liabilities unless the outsider is joined 2. Is joinder feasible? a. Does the court have personal jurisdiction over the person? b. Does joinder destroy diversity? c. Improper venue? 3. If joinder is not feasible, go to Rule 19(b) to determine whether case should proceed without the outsider, or should be dismissed (“whether in equity and good conscience” the case can go forward without the outsider). a. Defendant’s Interest: Might Δ be subject to multiple or inconsistent liability? b. Outsider’s

Interest: To what extent might a judgment in the person’s absence be prejudicial to the outsider or other party? To what extent can prejudice be lessened or avoided? c. Plaintiff’s Interest: Will π have an adequate remedy (other forum where all parties may be sued) if the case is dismissed? Will judgment in the person’s absence be adequate? d. Society, etc’s Interest: Will dismissal or continuance impede the efficiency and functioning of the court? 4. Rule 12(b)(7) is a dismissal for failure to join an outsider under this Rule. π can usually file the suit elsewhere if it is dismissed under Rule 12(b)(7). Eldredge v. Carpenters 46 Northern California Counties JATC (1981): Basics: πs sued JATC, organization in charge of sending out the potential apprentices to potential employers. JATC was using a “hunting license” system, in which the apprentice had to find an employer willing to hire you, then go to the Union hall and get on the apprenticeship list and the official

apprenticeship program begins. πs contended these employers were not hiring women. Why did πs sue only JATC? Easier to sue the one body, rather than trying to sue 4,500 different employers. What is Δs strategy? JATC wanted all employers joined. JATC doesn’t make the hiring decisions; the employers do, so for π to get complete relief, the employers should be bound to a judgment. Besides Δ knows suing 4500 employers is difficult and cost-prohibitive, and would probably result in suit failure. Judge’s Perspective: The employers can dump JATC if they want; an injunction against JATC would be pointless. Thus, no complete relief can be accorded without the employers. Furthermore, the employers have a practical interest in the outcome of the injunction. The 19(b) Aspect: [The appellate court finds that 19(a) is not met, so they do not address 19(b).] INTERVENTION Intervention: Rule 24. Outsider puts himself into the litigation 1. Policy Issues: a. Do not want repeat litigation, BUT

b. Original litigants have a right to keep their litigations uncluttered 4 Source: http://www.doksinet 2. 3. 4. Intervention as Right: Rule 24(a). a. Must have direct, legally-protectable interest in the lawsuit, AND b. Must show that their interest will be practically impaired if intervention is refused, AND c. Must show that their interests are not already adequately represented by a current party Permissive Intervention: Rule 24(b). a. Only has to have a claim or defense with at least one common question of law or fact b. Highly discretionary Miscellaneous a. Strategically You should argue for Intervention as of Rightmakes a stronger argument at district level, and if the judge turns you down when you ask for permissive intervention, it is highly unlikely that the Court of Appeals will overturn that decision. You may pursue both versions of intervention at the same time. b. Timing The later you are in the lawsuit, the less likely a judge is to let an outsider intervene c. The

Catch-22 The outsider often doesn’t know that he needs to “get in” on the lawsuit until he sees the remedy and realize the remedy affects him. d. In diversity case, cannot intervene as π with someone from the same state If the intervener cannot enter the lawsuit without destroying diversity, then must look to Rule 19(b) to see if they must be joined and whether the suit should be dismissed or continued. e. Intervention gives persons all the rights as a party f. Intervention is the only joinder device where the outsider asks to be let in g. Courts read the “interest” requirement for Intervention more broadly than for compulsory joinder because they’d rather see a “volunteer” join a suit than someone be forced to do so. h. If an intervener who does not have standing wants to appeal a judgment where the parties do not wish to appeal, that intervener must show standing to pursue the appeal. Planned Parenthood v. Citizens for Community Action (1977): St. Paul City Council

voted 5 -2 in favor of an ordinance that created a moratorium on zoning for abortion facilities Planned Parenthood then files to enjoin the ordinance, and the action group of concerned citizens seeks to intervene. District Judge denied intervention Issue on appeal is whether the citizens were Interveners as of Right. (1) Direct, legally-protectable interest in the suit? Homeowners assert a property interest, that their property values will be affected by the abortion facility. (2) Practical impairment: economic interest will be impaired. (3) No adequate representation: city council is elected to represent the citizens. However, the interests with the municipality may conflict with the private homeowners’ interests. (Courts are pretty liberal with the “no adequate representation” prong.) Differences in strategy approaches and goals will be enough to say the current party is not an adequate representative. Martin v. Wilks (1989): 1st Lawsuit: NAACP & 7 individuals filed actions

against city and personnel board for violating Title VII by racially discriminating in hiring practices. Entered into 2 consent decrees Mayor essentially bargains away the prospective hiring methods (to enact affirmative action) in order to save the city a lot of money in back pay claims. White firefighters move to intervene prior to judicial approval of the claim, and court denies the motion because it was not timely. 2d Lawsuit: Enjoin implementation of the consent decreejudge refused. Court dismisses it by saying that if these guys are affected by the consent decrees, they could file a lawsuit under Title VII later, after they suffer the harm. 3d Lawsuit: The second group of white firefighters. The problem in the affirmative action plan turned out to be promotions: said blacks should be promoted on an equal level and no one less qualified should be promoted over someone more qualified. Wilks’ theory in the 3d lawsuit: Title VII. Wilks contended that he is not being promoted

because of his race; the fact that he is white means he receives disparate treatment. But disparate treatment claims require that you prove intent. The city gives, as a defense, that they are just complying with the terms of the consent decree, meaning they haven’t formed the intent necessary to uphold a disparate treatment case. 5 Source: http://www.doksinet Wilks responds to that defense by saying that he cannot be bound by that consent decree because he wasn’t a party to it. The key question is whether Wilks is rightis he being bound by the consent decree, or is he just being practically affected by it? The majority believes that under the “impermissible collateral attack” doctrine, Wilks would be bound by the consent decree, and it is impermissible to bind a non-party. The plaintiff, the initial architect of the lawsuit, has to structure the suit in such a way that all parties interested are joined in the initial suit, otherwise you run the risk that someone on down the

line will reopen the suit. Court says there is never a duty to intervene The burden of joining parties is on the current parties to structure the suit to avoid these kinds of problems. The court kind of expresses a preference for Rule 19 over Rule 24. What about the Eldredge case (above)? This case suggests all those male apprentices were necessary parties because they could later essentially reopen the judgment later by filing a Title VII suit. Stevens (author of dissent) doesn’t disagree with the majority on the duty to intervene business, but he is just saying that the white firefighters weren’t legally bound by the prior suit; they just had substantive rights affected. If they were legally bound, then they couldn’t bring a lawsuit under Title VII later on, because it’d be barred by preclusion. The effect of the consent decree gave the city a valid defense to the charge of the white firefighters they were being discriminated against. The decree is the substantive defense

against the white firefighters The only issues open for trial are whether the city really was using the consent decree when they did not promote Wilks, or if they were just using it as a pretext. Stevens says Wilks could prove that the consent decree was a fraud. If Wilks could show that the parties to the consent decree were colluding to deprive outsiders of their rights, then the consent decree would be thrown out. In other words, they could attack the consent decree, but only on very limited grounds. The problem, according to Rehnquist, is the nature of the remedy sought. In order to remedy past discrimination, they must put into effect an aggressive affirmative action program. That inherently affects others, many of whom are not at all the ones who were guilty of committing the discrimination to begin with. If in fact the city is responsible for the discrimination, then maybe the city has to enact an affirmative action policy to remedy that. But then if Wilks doesn’t get promoted

because of that policy, then perhaps the city would have to pay Wilks backpay because of that discrimination. Thus, it sets the city up for multiple liability The implications of the case: (1) Is it constitutionally-based? No. The court couches the decision in terms of the FRCP and the interaction between Rules 19 and 24. The scheme of the Rules is to place on the current parties through Rule 19 the duty to join all necessary parties. (2) Congress came back the year after this case and passed an Amendment to Title VII that was meant to overrule Wilks, but it applies only in employment discrimination. See page 99 Amendment says a party cannot challenge an employment practice that is the result of a litigated or consent judgment if they had notice of the litigation or if there was someone representing their interests in the suit. a. Is it fair to bind people in this way? What about the “falling constitutional ceiling” business? As a procedural matter, should the binding effect of the

judgment of a case be affected by later changes in the law? The law changed: The court used to be far more accepting of affirmative action plans than it is now. The court is more strict about what plan violate equality themselves. Does this mean we should not treat as final the judgments entered under the prior state of the law? FEDERAL JURISDICTION Two main types of federal cases: federal question (75% of federal docket) & diversity (25%) Congress created the lower courts immediately but did not confer federal question jurisdiction in the lower courts until 1875 when the multitude of post-war state legislation arose, and the federal government no longer trusted the state courts, in the wake of such rampant post-war discrimination, to make the decisions on federal questions. 6 Source: http://www.doksinet Three policy justifications for having federal question jurisdiction: (1) Uniformity. The federal law shouldn’t mean one thing in Mississippi and another in New York (2)

Expertise. Federal judges will develop an expertise in federal law (3) Hostility to federal rights. In an 1824 case (Osbourne), Chief Justice Marshall interpreted the arising under language to mean that the federal court would have power as long as the federal issue was an ingredient anywhere in the case. This defines what the Supreme Court can take by way of review. Congress drafts § 1331 when they confer federal question jurisdiction to the lower courts, and they use the same language: “arising under” the federal law, constitution and treaties. Even though the language is the same, the § 1331 language has been read much more narrowly than the “arising under” language of the Constitution. This means the cases that can be started in federal district court are a narrower class of cases than what can potentially be heard by the Supreme Court by way of review. How is it narrower? Some rules have been read into the statute. (1) Well-pleaded complaint rule of Mottley: in order to

invoke federal question jurisdiction at district court level, the federal issue has to be part of Plaintiff’s claim as revealed by the well-pleaded complaint. It cannot come up solely by way of defense. (2) “The creation test” promulgated by Oliver Wendell Holmes: if federal law creates the right to sue and the remedy, then federal question jurisdiction exists. The hard cases are when the federal issue is a statecreated right incorporating a federal element Plaintiffs would rather be in State court, and defendants would rather be in Federal court. Merrell Dow Pharmaceuticals, Inc. v Thompson (1986): Smith says that when a state-created claim requires a decision about whether or not a federal statute is constitutional, there is federal question jurisdiction. In Smith, the corp defendant bought federal bonds issued pursuant to federal statute that was charged as unconstitutional. Whether the corporate fiduciary violated his duty under state law depended on whether the bonds were

good, which turned on whether the statute creating them was constitutional. Moore: The state law said there was no assumption of risk if the employer violated a federal safety standard by its conduct. The court had to determine whether an employer violated a federal safety standard in order to determine whether an employer had a defense to a state-created negligence claim. No federal jurisdiction  Did Merrell Dow resolve the tension between these two cases? Home Court Advantage. Note Δ cannot remove to federal court based on diversity, because of the home court advantage. If you sue the Δ in his home-state court, then Δ cannot complain about out of state bias, and therefore cannot remove. Facts & Background. π allege Δ was negligent because they did not comply with federal labelling requirements Δs removed on FQJ grounds and then argued for forum non conveniens dismissal. Court with proper jurisdiction can dismiss the case if there’s an alternative forum that is much

more convenient. The federal district judge dismissed on those grounds and instructed πs to go back to Canada and Scotland. πs appeal Appellate court reversed, but for the wrong reason. 6th Cir said that πs case did not invoke FQJ because it did not necessarily depend on the federal issue because that count was only one amongst 6 counts, and it’s possible to prove negligence without the federal element. BOTH SUPREME COURT majority & dissent reject the circuit court’s reasoning! Majority Holding: A complaint alleging violation of federal statute as element of a state cause of action does not arise under federal law under § 1331 when Congress has determined that there should be no private federal cause of action for the violation of that statute. If Congress hasn’t created the right for private parties to sue under the statute, then that means private parties shouldn’t be able to sue on a state law theory and get into federal court via FQJ. Smith involved the

constitutionality of a federal statute. Moore involved borrowing a federal statute for use in a state-law claim. We aren’t quite so concerned with whether a state court misinterprets a federal safety statute, but we are worried that the federal interest at stake in Smith, which is the possible declaration by a state court that a federal statute was unconstitutional. Merrell Dow is akin to Moore Therefore, because there was no FQJ in Moore, there is no FQJ in Merrell Dow. The majority says the reason we know the federal interest is not substantial is that Congress did not create the right to sue. 7 Source: http://www.doksinet Commentators have read into this the notion that this is another rule being read into § 1331: where states create the cause of action, falling outside the Holmes creation test, and it incorporates the federal element, then it must be determined whether the federal interest is substantial. It will be substantial if it involves determining the

constitutionality of a federal statute (Smith) but is not substantial if it is just borrowing the federal safety statute for a state claim (Moore). Dissent: Dislikes the substantiality test, because it’s too vague. It’s a post hoc judgment as to what’s substantial Smith & Moore cannot be reconciled. A vague test like substantiality allows anything to be reconciled Smith should be applied and there should be FQJ. Diversity Jurisdiction § 1332: Two Requirements (1) Complete diversity (everyone lined up as π must be from different state as everyone lined up as Δ) (2) Amount in Controversy = $75,000 To figure out where people are from for diversity purposes: Individuals = state of domicile (presence + intent to remain indefinitely) Corporations = state of incorporation and their principal place of business To get to the amount minimum, you cannot aggregate claims among co-parties. (One party can aggregate his own claims, but multiple parties cannot pool theirs together.)

Supplemental Jurisdiction § 1367 If there is an anchor claim that got you to federal court through diversity or FQJ, then you can bring with that anchor claim to federal court all other claims connected to it through a common nucleus of operative fact. CNOF Test (Gibbs): Means same thing as the “transaction test” from the joinder rules. You’re looking for factual connections between the two claims, such as overlapping evidence, overlapping issues, whether or not res judicata would prevent π from splitting the claims, and a logical relation between claims. Where the anchor claim is a federal question, then the supplemental claims will also have FQJ. But if the anchor claim is a diversity claim, § 1367(b) forbids claims by plaintiffs when doing so is inconsistent with the requirements of the diversity statute. Circuits split on whether there is supplemental jurisdiction over the claims of class members that are not individually worth more than the diversity minimum. The question

on which they are split is: Can you use the diversity statute to get the anchor claim in (which has a claim of over $75,000) and then use supplemental jurisdiction to get the other claims, which do not individually meet the minimum amount, in to federal court as well? With class actions, the way you figure out diversity jurisdiction is to look at the state of the named representative. Only the named representative must be from a different state as the defendant. That goes back to a 1928 case and is the traditional rule. With the amount in controversy, though, there’s a case called Zahn decided in the 70s, which said the claims of each class member have to exceed the jurisdictional minimum to meet diversity jurisdiction. Note they’ve kind of divided up the requirements on one hand, only the named plaintiff need be “diverse,” yet each individual claimant must meet the minimum amount. In the Class Action Fairness Act, which was filibustered last term, the requirement would be only

minimal diversity, meaning that as long as any plaintiff was diverse from any defendant, the case could be removed to federal court. Because nearly all defendants want to be in federal court, this would basically federalize mass suits Abbott Laboratories: Plaintiffs trying to keep their claim in State court. Δs remove the case and πs petition for a remand back to state court. Note federal court decides whether or not to remand without certifying the class; it treats it as a putitive class. A potential statutory problem: Removal statutes say when a federal court remands a case to state court for lack of subject matter jurisdiction, there is no appeal of that. Fifth Circ says remand was based on abstention (the Colorado River case) rather than on SMJ and therefore the bar for appeal does not apply. Jurisdictional Issue: State anti-trust statute that created the action provides for trebel damages, which would be about $20,000 per plaintiff. At the time, $50,000 was the jurisdictional

minimum So it looks like, as to actual damages, none of the class members met the minimum. Defendants say, though, that in Louisiana the Code says a class representative is entitled to attorney’s fees, which would be way more than $30,000, rendering it above the minimum amount. Plaintiffs, on the other hand, argue that is money that the Plaintiffs will never see, 8 Source: http://www.doksinet never get a part of, and therefore should be treated as pro-rated amongst all the class members. Doing it that way leaves all the class members below the jurisdictional minimum. The 5th Cir. says under the plain language, the attorney’s fees money goes to the named representative The effect of that is to attribute the attorney fees recovery to the named representative which puts them over $50,000. That means the named representatives have claims that meet the diversity requirements and are therefore properly in federal court. This has been a similar problem with punitive damages, which

aren’t meant to compensate any one person in particular but meant to punish someoneso who do those damages get attributed to, or do they get prorated among class members? Many states have laws dictating who the punitives get attributed to. So what about the unnamed class members? They do not meet the amount in controversy requirement, so they cannot get to federal court on diversity jurisdiction. Can they get there on supplemental jurisdiction? § 1367(a) creates a rule that all claims connected by a common nucleus of operative fact to the anchor claim are within the court’s jurisdiction. If you have a federal question anywhere in the case, then all other claims connected by a CNOF are automatically within the court’s jurisdiction. § 1367(b) carves out an exception to the rule established in (a) which only applies in diversity cases. The exception does not list Rule 23, which is the class action rule, as one to which the exception applies. Zahn said the claims of each class

member have to be worth more than the jurisdictional minimum, BUT the supplemental jurisdiction statute appears to create jurisdiction over claims connected by a CNOF, and apparently the (b) subsection does not apply. So here’s the deal: Do you read the plain language of the statute to overrule Zahn, or do you listen to the drafters of the statute that say directly they meant to preserve Zahn even though they forgot to put Rule 23 in the statute? Of course, the circuits are split. The 4th, 5th, 7th and 9th Circuits all believe that because there’s no ambiguity or absurdity in the plain language of the statute, they cannot look beyond the plain language. This has the effect of sending more class actions to federal court. [The Supreme Court has taken Cert on this so we’ll have a decision by the end of the term.] § 1367(c) uses the word “may”, unlike (a) and (b) which use “shall.” Thus, (c) creates discretion in the federal district court to decline to exercise supplemental

jurisdiction if one of the listed factors is true. You can tell from the opinion that courts don’t treat the discretionary space very broadly. There has to be a good reason for them to not exercise supplemental jurisdiction. The 5th Cir. said the lower court abused discretion by not taking the case because it would result in piecemeal litigation. In general when federal courts have jurisdiction they have an obligation to exercise it. So when either FQJ or diversity jurisdiction or supplemental jurisdiction there is a “virtually unflagging obligation” to exercise it. The Supreme Court can do that, but none of the lower courts. But there are some exceptions: the abstention doctrines. But those doctrines require a really good reason for abstention! Basically, the court in Abbott is saying the district court doesn’t have a good reason not to decide the named representative’s claims, and if you can’t decline the named representative’s claims, you cannot use the discretion

under (c) to refuse to hear the absent members’ claims either. JUSTICIABILITY & STANDING Standing, ripeness & mootness are functions of the “case and controversy” requirement from Article III, § 2. Why did the constitutional framers want to make sure the federal courts would hear only live cases and controversies? Separation of powers. We don’t want courts to make opinion proclamations or advisory opinions. That means these standing issues tend to be a problem more in public law cases, like where a bystander wants to affect government behavior. (In the normal tort case it’s an injured party bringing a claim so standing isn’t usually very tough to figure out.) The idea is the plaintiff must show a direct injury, not just a general interest that would be shared with all other members of the public, and must have a personal stake in the outcome of the case. Otherwise the courts would become just another political branch This interest does not have be economic.

Standing Three-Part Test: Plaintiff bears the burden of proof to demonstrate: (1) Injury in fact. a. Concrete 9 Source: http://www.doksinet b. Particularized c. Imminent (not speculative) (2) Causation: injury identified in (1) must be fairly traceable to the conduct of the defendant (3) Redressability. Must be likely that the injury would be redressed by the relief sought in the lawsuit (A plaintiff must show standing as to each form of relief sought.) Organizational Standing: When can an organization have standing to bring a lawsuit? (1) Members would otherwise have standing in their own right (2) Organization is asserting interests germane to its own purpose (3) No need for individual parties / members to participate. Prudential Considerations (1) Zone of interest. The plaintiffs must be in the zone of interest meant to be helped under the law (2) No Generalized Grievances. Court won’t hear general grievances shared by large classes of citizens (3) No third-party standing.

Plaintiff must usually assert its own legal interest rather than those of third parties Friends of the Earth, Inc. v Laidlaw: Plaintiffs are FoE, who are joined with the Sierra Club. They’re arguing Δs dumping mercury into water πs representing interests of those who use that water area for recreational purposes. Suing under the Clean Water Act. Defendants’ strategy: Get state to file preemptive lawsuit. What did they do to fight the ongoing FoE lawsuit? Said they had no standing to bring it and were barred by the other suit being filed first. Judge: Denied motion to deny based on standing. Not barred by first lawsuit because that one was collusive, not diligently prosecuted. What relief is ultimately ordered in the district court? No injunction, just civil penalties. The deterrent effect of the civil penalty, which is paid to the government, plus the attorneys fees Laidlaw had to pay πs, was enough to avoid needing an injunction. Note that the violations continued after the

filing of the suit but by the end of the district court case Laidlaw had come into substantial compliance. On appeal of the civil penalty it goes to the circuit court. At Supreme Court level let’s check the standing. Injury In Fact. Problem is district court found despite the numerous permit violations there was no actual injury to the environment. But the majority says it is not the test of whether the environment was injured but whether the plaintiff was injured. The plaintiffs claimed they would go camping, fishing, etc if the mercury was not being dumped there. Causation. Not a problem if you buy into the injury in fact claimed Redressability. An injunction would redress their issue But how does a civil penalty paid to the government redress their injury? The majority view is that the civil penalty has a deterrent effect on the violator. Relationship between Standing & Mootness. Three differences between standing & mootness: (1) burden of proof on standing is on πs, but

for mootness the burden is on Δs; (2) there is an exception to the mootness doctrine for actions capable of repetition yet evading review, but no such exception exists for standing; (3) policy: with standing, part of what you’re worried about is needing a concrete dispute warranting the expenditure of federal judicial resources, but with mootness, typically a lot of federal resources have already been usedthis is the “sunk cost” problem, the idea being the court will be hesitate to dismiss a case for mootness once it has a bunch of time and money invested in it. Ripeness Usually works that government has passed a law and a citizen believes it’s unconstitutional, but the law hasn’t been enforced against him yet. For example, you want to run an adult bookstore and your local zoning authority passes an ordinance saying that you cannot run an adult bookstore. The strategic dilemma for you is that if you sue to have that ordinance declared unconstitutional, the court may say

it’s not ripe yet because it hasn’t been enforced. But if you open your store and wait to be prosecuted, then if you try to file a federal lawsuit, you’ll run into an abstention doctrine that the federal government won’t interfere with the criminal state proceedings. Of course, that’s only a strategic dilemma if you want to have access to the federal forum on the issue of whether or not the state ordinance is constitutionalif you don’t mind being in state court then you just wait to be prosecuted and bring it up as part of your defense. 10 Source: http://www.doksinet Test for Determining Whether a Pre-Enforcement Constitutional Challenge is Ripe: (1) Likelihood that the disobedience will occur (2) Certainty that the disobedience will take a particular form. The idea is that we want a concrete, definite dispute, to avoid making the court discuss hypothetical abstracts. (3) Any present injury caused by the prospective enforcement. (4) Likelihood that the enforcement will

actually happen. There would be a difference, for example, between a law that had been on the books 100 years ago without ever being used and a brand new law just passed. Also: whether issue is fit for judicial resolution, and whether there would be hardship to the parties if they had to wait. San Francisco Voters v. Supreme Court: Voters want to be able to put their names in political pamphlets as endorsing a particular candidate, and the CA constitution says that a party cannot endorse a candidate for a non-partisan election, and that all city, county, judicial and school elections are non-partisan. The plaintiffs are individual voters, some of whom are also members of Republic and Democratic committees. Note that neither the Committees themselves nor the candidates are the plaintiffs. The defendants are the city employees who redacted the names / endorsements from the pamphlets. Plaintiffs argued that their ability to hear information about whether parties had endorsed particular

candidates is chilled because of this redaction. Court initially notes standing problems: (1) 3d party standing: the plaintiffs here are asserting the rights of the candidates to include endorsements rather than the candidates themselves asserting that right. On the other hand, it may be direct if there is indeed a right to receive information rather than just a right to give it. (2) Redressability. CA also has a statute that basically says the same thing as the state constitution So even if the case is successful and the constitutional provision is declared unconstitutional, it will still be possible for the redactions to continue because of that state statute. (3) 3d party standing again. These plaintiffs don’t have standing to assert the rights of the committees Court says there is no current live dispute. The future elections are too iffy The elections that are over are moot What about the exception: capable of repetition yet evading review? Why doesn’t that work? The

plaintiffs waited until the elections were over before they filed suit. That exception does not revive a case that was moot at the moment the case was filed. Plaintiffs failed to allege that there was any current infringement on their rights. Court says that postponement of the suit would not create hardship to anyone. Stevens’ concurrence said that the case would be ripe if it were brought by the candidate or committee. Then we get to the dispute between White, Marshall and Blackmun. White wants to treat it as an as-applied challenge, and Marshall & Blackmun see it as an overbreadth problem. If π’s complaint can be seen as a challenge to the face of the provision, then it may survive the problem of “future elections being too hypothetical.” Political Question Doctrine If you break down the six factors from Baker, they work out to be three basic concerns: (1) Constitutional. Captured by the Nixon language that if there’s a demonstrable textual commitment to another

branch of government, the court shouldn’t hear it. (2) Functional. Courts can only deal with cases that are concrete and where there is some sort of clear standard by which to decide it. (3) Prudential. Respect for the other branches of government and the separation of powers There is nothing in the constitution that says courts cannot hear political questions. So from where does their power to refuse those questions? The structure of the constitution. It’s also weird because we know there’s judicial review of Congressional actions, so it cannot be the case that whatever task is delegated to another branch of government is “off-limits.” Nixon v. Supreme Court of the US: Federal judge convicted of accepting gratuity. Refuses to give up his judgeship He is impeached, meaning House presented articles of impeachment and the Senate then has the sole authority to try the case. Senate appoints the committee to assemble and hear the evidence, and then it is presented to the whole

Senate who votes to convict. 11 Source: http://www.doksinet Nixon files suit saying his right to be tried by the Senate was not carried out because the whole Senate did not hear his evidence. The issue is whether this is a justiciable question in the federal courts given that the constitution confers sole authority to the Senate to try impeachment cases. Court focuses on constitution’s use of the word sole. Court focuses on the constitutional language Dissenters say the word gets taken out of context; that the purpose of the word sole is to clearly divide the charging function, which goes to the House, from the trying function, which goes to the Senate. DISPOSITION OF DUPLICATIVE OR RELATED LITIGATION Repetitive Form 1: π v. Δ things don’t go well for π, so he goes to another forum and refiles Reactive: Forum 1: π v. Δ Forum 2: Δ or X v. π Overlapping Class Action: π1 v. Δ π2 v. Δ etc. Three basic methods to commandeer litigation into the court of your choice: (1)

Stay / Abstention. Go to the court where you don’t want things to continue, and ask for a stay In the case of federal / state litigation, you can ask the feds for an abstention. (2) Injunction. Addressed to the court where you do want things to continue Ask for an injunction to stop the case from proceeding in the other court. Of course, courts don’t really like to enjoin each other, but you can get injunctions against the parties. If it’s federal / federal, it’s just the injunctive standard If it’s federal / state, you’ll have to overcome the injunction act. (3) Transfer / Consolidation. Directed to court where you don’t want things to continue Consolidation Rule 42 requiring a common issue of law or fact. The cases must be pending in the same federal district in order to be consolidated. In order to get them into the same federal district, you transfer We’ll talk about three transfer statutes: general §1404, 1406, and multi-district litigation § 1407. Notice that in

addition to figuring out which tool you’ll use, you have to make sure you choose which court you’re going to address it toyou must be careful to address it to the court that will be the most responsive. Because the “first in time rule” is not an absolute, not all judges will use it in the same way. Federal / Federal Dual Pending Cases: Gluckin v. Playtex (2d Cir 1969): Playtex is upset because they say their bra patent is being infringed by Gluckin, who was manufacturing bras for sale at Woolworth. So they sue Woolworth for selling the allegedly-infringing bra Strategy 1: Why go after the retailer when your real beef is with the manufacturer? If you can cut off your competitor’s market then you get a win without having to deal directly with the competitor on whether or not they’re actually infringing. Woolworth is likely to just settle and stop selling the infringing bra, since they don’t care about whether Gluckin stays in business. Strategy 2: Playtex sues in Georgia

even though they are located in NY and the manufacturing is happening in NY. Playtex had three of its mills in GA and the jury pool there, because they wanted to keep those jobs in GA, would be more favorable to Playtex. This is reactive litigation: Playtex v. Woolworth in GA, and then reactive is Gluckin v Playtex in NY Gluckin asks the NY court to enjoin the GA court. The issue on appeal was whether the NY court properly issued the injunction against the GA court. The general rule is First in Time Rulethe case filed first is usually the one that gets to go forward. Exceptions: (1) Customer Suit Exception. If the first-filed suit is by the patent-holder vs retailer, and the second suit is patent-holder vs. manufacturer, the 2d suit is the real one and should go forward (2) Blatant Forum Shopping. 12 Source: http://www.doksinet What other options would Woolworth or Gluckin have had? All the reasons the court gives for reasons to grant the injunction would also be a great argument

for transferring to NY. Could also make a 12(b)(7) motion to get Gluckin involved in the litigation. Semmes Motors, Inc. v Ford Motor Co (1970): Suit 1: Semmes v. Ford in NJ state court, which is removed to federal Suit 2: Semmes v. Ford in NY where judge issues injunction Ford then terminates Semmes’ license as a Ford dealership. Ford goes ahead and files an Answer and Counterclaim in the NJ suit. This is important b/c if they hadn’t filed that Countersuit, Semmes could have voluntarily dismissed their lawsuit in NJ. Once that counterclaim is filed, Semmes cannot unilaterally dismiss that whole lawsuit. TRANSFER STATUTES § 1404(a) Case may be transferred from federal district to federal district, to a place where it could have been brought. This means the transferee district must be one where π could have filed originally. It must therefore have proper personal jurisdiction and venue. Even though Δ can waive objection to personal jurisdiction, they cannot move to transfer to

somewhere where they would have had to waive objection because the π couldn’t have actually filed there. The standard is, for the convenience of the parties (private and public interest) and in the interests of justice. This is supposed to embrace the same standard as the common law notion of forum non conveniens. Private interests include where the parties and evidence are located, whether witnesses will be available, how easy it is to litigate there. Public interests include how difficult the choice of law issues will be, whether there is enough of a connection to justify imposing jury duty on the local community, etc. How does the common law fit with the statute? The statute supercedes the common law whenever the alternative forum is another federal district within the United States. Thus, all that’s left of the common law doctrine are those situations where the alternative forums are outside the U.S In order to bring a motion for forum non conveniens, you must first show that

there is an adequate alternative forum outside the country. Then you must look at the private interest factors and the public interest factors, and it is a very ad hoc, discretionary decision. Both the statute and common law doctrine are highly discretionary. You use § 1404 when the transferor court has proper venue. The question is whether there is another place that also has proper venue where litigation would be more convenient. When a case is transferred under § 1404, transferor law applies. That is, even after it is transferred, the law of the place that transferred it applies. That is true even when the transfer is initiated by the plaintiff § 1406 A federal district court that lacks proper venue can either dismiss the case or, if it be in the interests of justice, can transfer to a federal district that would have proper venue. In an old case (Goldlawr), the Supreme Court interpreted this to mean that if the transferor forum lacks personal jurisdiction, it could transfer.

This is odd, because the case says that a court that lacks power over a party can transfer the case to somewhere that does have power. The big difference between transferring under 1404 and 1406: Under § 1406, the transferee law applies. What if court has proper venue but lacks personal jurisdiction? Which statute should apply then? Perhaps if the initial-filed place lacks personal jurisdiction, you shouldn’t be able to lock in that place’s law by transferring under § 1404. § 1407 Ginsey Industries, Inc. v ITK Plastics, Inc: There are two different transactions here, unlike Semmes Still dismissed, though, with the possibility of consolidation weighing heavily in favor of transfer. De Melo v. Lederle Laboratories (1986): Brazilian π files suit in MN (where her attorney lived & where Δ company was licensed to do business). Δ moves to remove to Brazil. District judge dismissed on forum non conveniens 13 Source: http://www.doksinet Appellate court draws on Supreme Court

precedent in ruling that just because the alternative forum is less favorable to Plaintiff, the alternative isn’t necessarily an inadequate forum. Multidistrict Litigation Act: Permits cases that share a common factual issue to be consolidated to one federal district for pretrial procedure. Should you read the MLA to mean we want to coordinate discovery, or should it be about everything that happens pretrial including all the dispositive motions? That is the intellectual debate. Multidistrict Litigation Panel: There’s a panel of 7 judges, no two of which are from the same circuit. These are judges who also have duties in their own courts, appointed by the Chief Justice. They have a clerk in Washington, D.C, where papers are filed Panel will only hold a hearing if there are objections to the transfer If they hold hearings, they do so at various places around the country, and will appoint spokespersons for both sides. The vast majority of cases referred to the panel wind up getting

transferred. The panel must answer (1) whether to transfer (common question of fact) and (2) where (or to whom) to transfer. Once they decide a piece of litigation should be sent to a particular place, then any other cases filed anywhere else in the country are automatically transferred to that district and are called “tag along” cases. There is no appellate review of the decision not to transfer. It is possible to get the review for the decision to transfer by applying for a Writ of Mandamus to the court that oversees the transferee court. Cases are supposed to go back to their home districts for trial. But statistically, fewer than 5% ever do Why? Most cases settle before trial. Summary judgment takes a lot of cases out before trial. The MDL Judge frequently would transfer the cases to himself under § 1404 for trial. The Supreme Court struck down that practice in the Lexecon case in 1998 because the Statute says the cases shall be remanded to their home districts for trial; it

is not discretionary on the part of the judge. A bill passed the House last year (2004) to reverse Lexecon and allow an MDL judge to transfer cases to himself. But there is no companion bill pending in the Senate. Meanwhile, the panel sent a memo to the MDL judges saying they could accomplish this in other ways: Get parties to consent to dismissal in their home districts and refilling in the other district. Form a class. It’d have to be a mandatory class Try a “bellweather” casepick one case and try it in the home district and then let the other cases decide whether they want to litigate there. Get the home court judges to transfer the cases. In re Factor VIII or IX Concentrate Blood Products Litigation (ND Ill. 1996): Δ wants 137 experts which, for πs, makes it difficult because of the financial outlay that would require. FRCP Rule 16: (Specifically subsection c, e) Discussing pre-trial conferences. The Choice of Law Problem under § 1407 & Multidistrict Litigation: Law of

the transferor court must apply if the parties are in federal court only on diversity. If it is a federal question case, and it gets transferred under MDL, there is a split in the circuits as to what to do when there’s a split in the circuits! Federal/State Transfers Abstention: Set of common law doctrines. SC said it is a “general framework” of the federal court being sensitive to the state court-federal court relations. Four Types of Abstention Doctrines: (1) Pullman a. Used when a federal court is dealing with a case where (1) there is an uncertain or ambiguous, unsettled issue of state law, and (2) when that ambiguity is cleared up, the federal constitutional issue may go away, thereby avoiding an unnecessary federal constitutional decision. 14 Source: http://www.doksinet b. c. d. e. f. g. h. i. This might be applied when (1) there is an uncertain or ambiguous, unsettled issue of state law, and (2) a very important state interest at stake. Eg, an eminent domain case

that implicates an unclear issue of state law. This is a species of the Con Law issue that courts will avoid making constitutional holdings if they are at all able. This is a stay, rather than a dismissal, so that the parties can go to state court and get the ambiguity cleared up, and then return to federal court if the live issue still exists. If you use Pullman, typically it’ll be a situation where someone’s come to federal court and said “This state practice is unconstitutional” but there’s something unclear about the state law and it’s possible that the state could interpret its law that avoids the constitutional question. So the idea is to take the case to state court and clear up the ambiguity. If it turns out there really still is some unclear part of state law, the parties can come back to federal court. England ReservationEssentially removes the res judicata bar to returning to federal court. You’re reserving your right to return to the federal forum after the

ambiguity has been cleared up by the state court. i. There is a rule that plaintiffs must bring all their claims that arise out of a single occurrence in one lawsuit, and if they do not, then they lose the right to bring those claims. You cannot “split” claims If there’s been a Pullman abstention at a federal level, then the parties have to litigate in state court, and traditional rules would then dictate that was the parties’ “bite at the apple” and wouldn’t give them another bite at it in the federal forum later. ii. This allows the parties to litigate state issues in state court, and federal issues in federal court. iii. HOWEVER, even though claim preclusion won’t be a factor, issue preclusion may kick in. Whatever fact issues are decided at the state court level and are also relevant to the federal claim will be given preclusive effect at the federal court. Certification. Many states (but not all) have a statute that allows federal courts to certify questions

typically to the state supreme court to clear up any ambiguity, and that procedure is preferable because it does not require a formal stay of the federal case, and you don’t have to start all over in the state trial system. This is supposed to be a more efficient procedure, but in reality, there is still usually a considerable delay. The problem of exclusive federal jurisdiction. What if the unclear state law issue arises relative to the federal anti-trust law, or another law exclusively within the purview of the federal courts? Should the federal court abstain if it has exclusive jurisdiction? i. Depends on what you think exclusive jurisdiction is for If you think it’s just for getting the expertise of a federal judge in applying federal law, then waiting for the state court to render a decision is not a problem. But if it’s to have a federal forum for the whole caseincluding the fact-finding, then it would be problem, because of the issue preclusion. ii. Courts have said that

there should be no abstention where the federal court has exclusive jurisdiction. EXCEPTIONS: i. Time is of the essence This demonstrates that the Pullman abstention is discretionary If it were mandatory, then time wouldn’t matter. ii. State court procedures are clearly inadequate (2) Burford a. Typically a dismissal of a case by a federal court when the federal court declines to act so as to avoid interfering with a complex state regulatory scheme. b. Burford dismissal will happen when the federal relief sought is injunctive If the plaintiff in federal court is seeking damages, then there is no Burford dismissal. Issuing an injunction is more of an interference by the feds into state schemes than the feds just handing down a damage award. c. Certain subjects are peculiarly within the province of a state: controlling oil & gas leases, eminent domain, schools, etc. The idea is that we don’t want the federal courts enjoining the states in a way that undermines their regulatory

scheme. The court isn’t just “staying its hand” to see what the court will do as with Pullman; with Burford, the court is staying out of it entirely. 15 Source: http://www.doksinet d. e. f. Burford was a case dealing with who gets to control the leases for drilling for oil and gas. The suit was because they were mad at the commission for giving a lease to their competitors. If the federal court were to grant an injunction telling the state commission that they have to give a lease to the plaintiff, that would undermine the state scheme for deciding who gets leases and when. Argument as to whether Burford should ever be invoked if there is a federal question implicated, and the consensus is that Burford should be invoked when it’s of important interest to the state, there is a complex regulatory scheme, and the conflict cannot be resolved without the federal court immersing itself in the state scheme. Burford is rare. (3) Younger (equitable) a. Bar to federal court

interference with ongoing state proceedings Look for a pending state proceeding where the state is a party or the state has an important interest at stake (usually the state’s interesting the integrity of its own procedures, esp. enforcement) b. Federalism Used when the federal court abstains in deference to states’ criminal, quasi-criminal (e.g, zoningadult bookstore), civil cases in which the state itself is a party, or purely private state cases with an important state interest involved (e.g, enforcement proceedings (see (f), below). We don’t want feds poking their nose into state affairs, particularly state criminal affairs c. The idea: Probably every criminal Δ thinks the state, at some point in the process, violates his rights, be in at arrest, search and seizure, etc. You cannot have a situation where every state criminal Δ files a federal lawsuit at the same time their state case is going on because it would cripple the system. d. When there is an ongoing state criminal

proceeding, a federal court will not interfere; instead, the person aggrieved (the criminal Δ) should raise their federal constitutional claims in the state proceedings. e. The Younger doctrine insulates the ongoing state criminal process from any federal review except for the Supreme Court. f. Younger has been expanded beyond criminal proceedings to also apply to: i. Quasi-Criminal Zoning, for instance, where an adult bookstore comes to town in violation of a zoning ordinance, and the owner is prosecuted. ii. Enforcement of Contempt Feds should abstain, forcing the parties to litigate the federal claims about the procedure in the contempt proceedings. g. EXCEPTIONS: i. If the state has acted in bad faith to harass someone State keeps bringing the charges and then dropping them so as to bother you without ever giving you your day in court. ii. If the state statute involved is flagrantly unconstitutional iii. If there are unusual circumstances such that the state decisionmaker was

obviously biased. h. The idea is that courts of equity won’t act when there is an adequate remedy at law That is, there is an adequate remedy at law available through the state system. We don’t want the courts issuing injunctions (equity), but what about damages? That’s an unresolved issue: whether a federal court in a case seeking damages must abstain in deference to an ongoing state proceeding. Many lower courts have said that the federal proceedings should be stayed until the state proceedings are completed. i. TIMING: STEFFEL GAP Younger is not applicable unless there is pending state proceedings, meaning if there is no pending state proceeding yet, a litigant may seek an injunction and/or declaratory relief in federal court. If you think you’re going to be prosecuted under an unconstitutional state ordinance and you want to sue for a declaration that it’s unconstitutional and an injunction to stop them from prosecuting you, you have to wait until it’s ripeuntil

imminent or actual prosecution. But then if you wait for the prosecution to commence, you’re in Younger territory. So the Steffel Gap is when the state prosecution is imminent but has not yet actually started. i. You want to run an adult bookstore and the state passes an ordinance to prevent that from happening. You go to federal court before they actually do prosecute you and file a case that it violates your rights under the constitution. The next day the DA files charges against you in state court. Younger or no? 16 Source: http://www.doksinet 1. 2. Fed court must abstain under Younger unless it has already begun proceedings with substance. So you have to try to get an injunction (showing likelihood of success on the merits and that substantial harm will occur in the absence of the injunction) before the state files its case. OR you avoid doing the thing that will put you in violation of the state law (opening the adult bookstore, for instance) until your federal case is

complete. (4) Colorado River a. A stay in the exercise of wise judicial administration to avoid duplicative litigation b. On one hand, if the federal court has jurisdiction it has a “virtually unflagging obligation to exercise it.” On the other hand, the court wants to avoid piecemeal litigation and inconsistent results and should defer to state litigation to accomplish that. c. Has less to do with federalism than with efficiency concerns d. Supreme Court has not given us a clear test for this, but it has laid out factors: i. Order in which proceedings were filed ii. Whether there is any property over which either court has taken control (if it is an in rem case) iii. Which, if either, forum is more convenient iv. Avoiding piecemeal litigation v. If there is a federal question involved, that should weigh against abstention e. This is not a strict first-in-time rule; the court is to examine what has happened in each case thus far (has one court put in much more procedure and effort

than the other). f. In general it is okay to have parallel in personam proceedings going on in state and federal court, even between the same parties, and on the same topic. It must be exceptional circumstances in order to justify abstention. g. This becomes a race to judgment, as issue preclusion will kick in from one state to another So whatever court you’re doing well in is the court you’ll be trying to speed along to judgment (and, of course, your opponent will be trying to slow down the proceedings in that case). h. TWO CAVEATS TO COLORADO RIVER: i. If the federal case is a declaratory judgment action, the Supreme Court has said there is more discretion to abstain. ii. Exclusive federal jurisdiction issue what if there’s duplicative litigation but the federal jurisdiction is exclusive? The 9th Cir. said there is an absolute rule against the federal court abstaining under Colorado River if it has exclusive jurisdiction. If there is anything to discern from abstention, as

least as to the top 3 categories, it’s that there are times when the feds just shouldn’t be sticking their noses in the states’ business. Colorado River is more about process and efficiency. Court says these categories aren’t rigid “pigeonholes” but are more a tapestry of ideas. That means that your case doesn’t have to fit perfectly into any one of these categories; you can make some analogous arguments using them as a guide. The court is not to make this sort of argument sua sponte because by the time you get to abstention, you’ve already established that the federal court has subject matter jurisdiction, and the court isn’t otherwise supposed to “pick and choose” its cases to hear. The argument can be made that it is a violation of the Congressional conference of power on the courts to hear the cases when the cases choose to not exercise their jurisdiction. The flipside to that argument is federalism: the court is only abstaining in cases where the state is

doing something with it. BT Investment Managers, Inc. v Lewis: Pullman: Even if it is a state regulation that has never been interpreted, if there is no genuine ambiguity, then there is no reason to invoke a Pullman abstention. The possibility that a statute might be struck down under the state constitution does not warrant Pullman abstention. It doesn’t negate the need to invoke the federal forum Just because it’s possible the state might strike down a statute, that doesn’t warrant a Pullman abstention. 17 Source: http://www.doksinet Burford: There is a simple statutory provision at work; there is no “elaborate scheme.” The statute is clearly separable from the elaborate banking regulations of the state. Striking down this one statute will not undermine the rest of the banking scheme. Pennzoil Co. v Texaco Inc: Pennzoil (P) sued in Texas state court, P’s home turf, for tortious interference with contract. The jury came back with a huuuuuuge verdict in favor of P

against Texaco (T). So T files suit against P in New York federal court, T’s home turf, challenging the constitutionality of the Texas procedures. T claims Texas’ execution procedures violate the Constitution The Rooker-Feldman Doctrine. The lower federal courts may not be used as courts of appeals of state judgments There is a difference in this case, as an example, because T was not arguing that the verdict was wrong, but that the execution procedures violate the Constitution. It’s a different claim In Texas, you had to put up a bond to keep the judgment liens from going forward. In this case, the bond was so huge, T couldn’t even meet it. T argued that essentially its right to appeal in Texas is contingent on this bond, and they aren’t able to meet the bond, rendering them unable to appeal. The federal district judge in NY sides with Texaco and enjoins execution of the judgment. It comes up to the U.S Supreme Court, who decides to abstain, citing to Younger Prior to this

case in order to abstain per Younger there had to be an overriding state interest at stake, and the state was often a party. For the Court to decide there is a Younger abstention here, it has to find a state interest at stake. What was it? The state has an interest in the integrity of its court system and allowing its judgments to be enforced. So how far can you take this idea? Any time there’s a pending civil proceeding in state court, do the feds have to abstain? Because, after all, the states will always have an interest in their own proceedings. It’s probably more just that after the case has come to judgment, and their enforcement procedures are in jeopardy, does this notion come into effect. When the proceedings in state court are disciplinary in nature, and the target of the proceedings tries to go to federal court to challenge the disciplinary procedure, the feds will abstain. This is similar to quasi-criminal proceedings. It’s the situation where it’s private party

versus private party that gets confusing Life-Link International, Inc. v Lalla: Suit 1: State court, Lalla v. Life-Link Suit 2: Federal court, Life-Link v. Lalla (including Nena) No venue in the case if Nena was involved in Suit 1. We don’t know why Life-Link didn’t remove in Suit 1 You’re a Δ sued in your home state court where diversity exists. You cannot remove because you’re in your home state. But you really want to be in federal court, so you file a reactive suit against π in federal court Should the federal court abstain? NOThe attempt to remove is forum shopping, clearly, and the state action was filed first. To allow the federal case to go forward undermines the removal rule that prohibits home-state removal. Anti-Injunction Act Federal courts may not enjoin “state proceedings in a state court”. You cannot get around the AIA by enjoining the parties rather than the state courts directly, because that has the same effect. You cannot get around the AIA by just

issuing a declaratory judgment either, according to most lower courts. Court-ordered arbitration has been found to count by some lower courts. Three exceptions to the AIA: (1) As expressly authorized by an Act of Congress. a. Interpleader statute specifically says the federal court has the power to enjoin state actions that may interfere with the interpleader. Otherwise, the stakeholder would start the interpleader, and then an individual π could run off to state court and hope their claim got judgment first. b. Bankruptcy All of the debtors assets are put together in a pool and divided amongst all creditors All other proceedings involving any of those assets in any other court are stayed. c. § 1983 Because, by its terms, it is about the feds controlling the behavior of the state, it could not be effectuated unless you allowed the feds to enjoin state action. To give it its intended scope it is 18 Source: http://www.doksinet read to be an express authorization of injunctions

which therefore makes it an exception to the AIA. But here’s what is weird about ittry to put that together with Younger This, by definition, is a proceeding with state interest. This and Younger are inconsistent Even though §1983 is an express exception to the AIA you’d still have to come within an exception to Younger to get the federal court to issue an injunction. Younger is a separate constraint on what the federal court can do. d. FRCP 13(a) doesn’t count (that’s the compulsory counterclaim rule) That means π can sue Δ in federal court, and Δ can sue π in state court, and the federal court cannot enjoin the state action. So it becomes a race to judgment. (2) Where necessary in aid of its jurisdiction. a. Traditionally applied only where there is in rem jurisdiction, or something like it If federal court has taken power over a piece of property, it cannot have competing state judgments that would compete with that. i. People who want to get federal court injunctions

argue that your case is like an in rem case in that the court has invested so much in negotiating or bringing to judgment a complicated class action or multi-district litigation, that allowing a state case to continue and mess that up would be a huge problem and waste of resources. b. To effectuate removal π sues Δ in state court There are grounds for removal Δ removes to federal court. The state is to cease doing anything in that case, but if the state court keeps proceeding, the federal court can enjoin the state from proceeding. That doesn’t happen very often. (3) To protect or effectuate a federal court judgment. Standard Microsystems Corp. v Texas Instruments, Inc (1990): SMC π sued TI Δ in NY federal court. Obtained TRO against TI to preserve the status quo of their business relationship pending the outcome of the case. TRO granted on Friday TI sued SMC in Texas state court that following Monday. (Note these claims are clearly arising out of the same series of transactions

as the first case, so they’d be compulsory counterclaims in the first casebut there’s no rule that allows the feds to seize control of those.) SMC requests a preliminary injunction against the state court proceeding and the federal court grants it. TI appeals TI’s argument is that the preliminary injunction violates the AIA because it does not fit any of the exceptions. They’re right. SMC wants to make a timing argument, that they filed their case first and got the TRO. But just filing your case first doesn’t get you an advantage under the AIA but if you get the federal injunction before the state court starts its proceedings then the AIA doesn’t apply. What’s wrong with SMC’s timing argument? The TRO only was to forbid TI from licensing or something like that, it wasn’t to stop a state claim from happening. That injunction wasn’t requested until after the state court claim was filed. Let’s say that SMC files a case on Friday and makes a motion on Friday for

preliminary injunction to forbid TI from filing any case in state court against it, but the court does not rule. On Monday TI files a state case against SMC. The question is, does the fact that SMC has applied / made a motion for the injunction before the state court case began, take us out of the AIA territory? SPLIT IN THE CIRCUITS. ALL WRITS ACT Fed cout may issue all writs necessary or appropriate in aid of their jurisdiction. Even though the AWA doesn’t include the AIA exceptions, federal courts will usually interpret it as having those exceptions. If the suit has not yet been filed in state court, the AWA may be used. The AIA on the other hand, may only come into effect after the state suit has been filed. In re Baldwin-United Corp. (2d Cir Ct App 1985): Huge class of plaintiffs with lots of claimsincluding state actions. Settlement was negotiated for 18 of 26 defendants. The class members will not be able to pursue their state actions as part of the MDL negotiation for

settlement. 19 Source: http://www.doksinet State Attorney Generals not members of the litigation start making noises that they don’t think the federallybrokered deal is good and they want to file state suits. The district judge issues an injunction against these states and all other persons having actual knowledge, from commencing any action or proceeding against any defendant on behalf of any plaintiff or class member. The judge is tyring to commandeer all litigation into the MDL suit. ISSUE: Is that okay under the AWA? Why would the district judge want to do this? The defendants won’t settle federally if they’re going to wind up being susceptible to state litigation. Court of Appeals allows this under AWA. There is no authority under Rule 23 of FRCP (class action rule) to enter an injunction to control litigation, so any authority that exists must come from AWA. Once the fed cases come to judgment, it is clear the judge has power under the AWA to enjoin states from

interfering with that judgment. The court tells us that in general we tolerate parallel in personam proceedings, but there should be an exception for situations where fed court needs to preserve its jurisdiction because there is something like a res involved. What is the res here? Court says it’s the settlements that the majority of defendants had agreed to. As it turned out, those settlements were approved and became final judgments. Court says the success of the federal settlement negotiations depends upon the court’s power to halt any state proceedings from ensuing which may threaten those negotiations. Does it bother you that through a federal settlement, the stronger protection of state law gets lost? Class Action Fairness Act basically allows the removal of class actions based on minimal diversity. Currently, it is only the named representative that is examined for diversity purpose. The CAFA says that if there is diversity between defendants and any member of the class, the

action may be removed. This would have the effect of moving most class actions to federal court. The Act passed the House easily in the last Congress and was filibustered in the Senate. Now, after the election, it passed easily through the Senate is expected to pass the House this week. How do you commandeer litigation when there are overlapping actions? HYPO: There is a controversy over oil lease price fixing. Under federal antitrust law, it’s exclusively federal There is a class action filed in federal court concentrated by MDL in one district. A different group of plaintiffs’ attorneys files an overlapping class action in state court in state antitrust law. They quickly announce a settlement in state court. That settlement would release all claims, including those within the exclusive federal jurisdiction A settlement releasing claims that becomes a final judgment is entitled to full faith & credit. If it has been announced but not yet entered into judgment, can the MDL

issue an injunction to stop the state court proceedings? The 5th Circuit approved it. If you’re the defendant in the federal case, what might you do? You decide what the lowest settlement is you want, shop it around and find a plaintiff’s attorney willing to take it, and file the global settlement. But there has to be a pretty exacting review from the judge to make sure the settlement was fair, reasonable and adequate that may stifle some of that particular strategy. Under full faith & credit, you always have to give the same credit to the judgment as the rendering court would give. You have to look to the law of the rendering state court, even when it is releasing exclusively federal claims. CHAPTER IV: CLASS ACTIONS United States Code Annotated Currentness Federal Rules of Civil Procedure for the United States District Courts (Refs & Annos) IV. Parties Rule 23. Class Actions (a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as

representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. 20 Source: http://www.doksinet (b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition: (1) the prosecution of separate actions by or against individual members of the class would create a risk of (A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or (B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests

of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or (3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the

litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action. (c) Determining by Order Whether to Certify a Class Action; Appointing Class Counsel; Notice and Membership in Class; Judgment; Multiple Classes and Subclasses. (1)(A) When a person sues or is sued as a representative of a class, the court must--at an early practicable time-determine by order whether to certify the action as a class action. (B) An order certifying a class action must define the class and the class claims, issues, or defenses, and must appoint class counsel under Rule 23(g). (C) An order under Rule 23(c)(1) may be altered or amended before final judgment. (2)(A) For any class certified under Rule 23(b)(1) or (2), the court may direct appropriate notice to the class. (B) For any class certified under Rule 23(b)(3), the court must direct to class members the best notice practicable under the circumstances, including individual notice to all

members who can be identified through reasonable effort. The notice must concisely and clearly state in plain, easily understood language: • the nature of the action, • the definition of the class certified, • the class claims, issues, or defenses, • that a class member may enter an appearance through counsel if the member so desires, • that the court will exclude from the class any member who requests exclusion, stating when and how members may elect to be excluded, and • the binding effect of a class judgment on class members under Rule 23(c)(3). (3) The judgment in an action maintained as a class action under subdivision (b)(1) or (b)(2), whether or not favorable to the class, shall include and describe those whom the court finds to be members of the class. The judgment in an action maintained as a class action under subdivision (b)(3), whether or not favorable to the class, shall include and specify or describe those to whom the notice provided in subdivision (c)(2) was

directed, and who have not requested exclusion, and whom the court finds to be members of the class. (4) When appropriate (A) an action may be brought or maintained as a class action with respect to particular issues, or (B) a class may be divided into subclasses and each subclass treated as a class, and the provisions of this rule shall then be construed and applied accordingly. (d) Orders in Conduct of Actions. In the conduct of actions to which this rule applies, the court may make appropriate orders: (1) determining the course of proceedings or prescribing measures to prevent undue repetition or complication in the presentation of evidence or argument; (2) requiring, for the protection of the members of the class or otherwise for the fair conduct of the action, that notice be given in such manner as the court may direct to some or all of the members of any step in the action, or of the proposed extent of the judgment, or of the opportunity of members to signify whether they

consider the representation fair and adequate, to intervene and present claims or defenses, or otherwise to come into the action; (3) imposing conditions on the representative parties or on 21 Source: http://www.doksinet intervenors; (4) requiring that the pleadings be amended to eliminate therefrom allegations as to representation of absent persons, and that the action proceed accordingly; (5) dealing with similar procedural matters. The orders may be combined with an order under Rule 16, and may be altered or amended as may be desirable from time to time. (e) Settlement, Voluntary Dismissal, or Compromise. (1)(A) The court must approve any settlement, voluntary dismissal, or compromise of the claims, issues, or defenses of a certified class. (B) The court must direct notice in a reasonable manner to all class members who would be bound by a proposed settlement, voluntary dismissal, or compromise. (C) The court may approve a settlement, voluntary dismissal, or compromise that

would bind class members only after a hearing and on finding that the settlement, voluntary dismissal, or compromise is fair, reasonable, and adequate. (2) The parties seeking approval of a settlement, voluntary dismissal, or compromise under Rule 23(e)(1) must file a statement identifying any agreement made in connection with the proposed settlement, voluntary dismissal, or compromise. (3) In an action previously certified as a class action under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so. (4)(A) Any class member may object to a proposed settlement, voluntary dismissal, or compromise that requires court approval under Rule 23(e)(1)(A). (B) An objection made under Rule 23(e)(4)(A) may be withdrawn only with the courts approval. (f) Appeals. A court of appeals may in its discretion permit an appeal from an order of a

district court granting or denying class action certification under this rule if application is made to it within ten days after entry of the order. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders. (g) Class Counsel. (1) Appointing Class Counsel. (A) Unless a statute provides otherwise, a court that certifies a class must appoint class counsel. (B) An attorney appointed to serve as class counsel must fairly and adequately represent the interests of the class. (C) In appointing class counsel, the court (i) must consider: • the work counsel has done in identifying or investigating potential claims in the action, • counsels experience in handling class actions, other complex litigation, and claims of the type asserted in the action, • counsels knowledge of the applicable law, and • the resources counsel will commit to representing the class; (ii) may consider any other matter pertinent to counsels ability to

fairly and adequately represent the interests of the class; (iii) may direct potential class counsel to provide information on any subject pertinent to the appointment and to propose terms for attorney fees and nontaxable costs; and (iv) may make further orders in connection with the appointment. (2) Appointment Procedure. (A) The court may designate interim counsel to act on behalf of the putative class before determining whether to certify the action as a class action. (B) When there is one applicant for appointment as class counsel, the court may appoint that applicant only if the applicant is adequate under Rule 23(g)(1)(B) and (C). If more than one adequate applicant seeks appointment as class counsel, the court must appoint the applicant best able to represent the interests of the class. (C) The order appointing class counsel may include provisions about the award of attorney fees or nontaxable costs under Rule 23(h). 22 Source: http://www.doksinet (h) Attorney Fees Award. In

an action certified as a class action, the court may award reasonable attorney fees and nontaxable costs authorized by law or by agreement of the parties as follows: (1) Motion for Award of Attorney Fees. A claim for an award of attorney fees and nontaxable costs must be made by motion under Rule 54(d)(2), subject to the provisions of this subdivision, at a time set by the court. Notice of the motion must be served on all parties and, for motions by class counsel, directed to class members in a reasonable manner. (2) Objections to Motion. A class member, or a party from whom payment is sought, may object to the motion (3) Hearing and Findings. The court may hold a hearing and must find the facts and state its conclusions of law on the motion under Rule 52(a). (4) Reference to Special Master or Magistrate Judge. The court may refer issues related to the amount of the award to a special master or to a magistrate judge as provided in Rule 54(d)(2)(D). Subsection (a) applies to all

classes and all requirements must be met. (1) Numerousity (big enough you wouldn’t expect people to sue on their own, joinder impracticable) (2) commonality, typiciality (claims of rep parties tyicl of rest of class) and adequate representation. 2d two go to whether the representative is the right person to represent the class. Subsection b identifies three or four types of classes that may be certified. Incompatible Standards Class: (b)(1)(A). The prosecution of separate actions by or against individual members of the class would create a risk of inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class. Usually injunctive. Limited Fund Class: (b)(1)(B): The prosecution of separate actions by or against individual members of the class would create a risk of adjudications with respect to individual members of the class which would as a practical matter be dispositive

of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests. Basic idea is that there is a limited fund. Injunctive Class: (b)(2) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole The primary relief you’re seeking must be injunctive but it is possible to get corresponding damages only if those damages flow mechanically from the injunction. Some sort of rate schedule, for example, in a utility schedule. (b)(3) The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include:

(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action. Must also show predominance and superiority, in addition to the requirements of subsection (a). Voluntary Class. (b)(1) and (b)(2) are mandatory classes: if a person is within the class definition they are stuck in the class and cannot get out. (b)(3) is a voluntary class (sometimes called a “damages class”) in which there is a right to notice and a right to opt out. Rule forces the court to be much more hands-on and specific in issuing orders determining the class is appropriate, that the attorney is appropriate and above-board, and that the settlements

are fair. 23 Source: http://www.doksinet (c) requires judge define the class and appoint class counsel. For (b)(3) classes, notice has to be sent, and it specifies what must be included in the notice. For (b)(1) and (b)(2) classes, the court may direct notice to the classes, but it is optional. Talks about the effect of a judgment on a class action (d) is some of the orders a judge can enter (e) In an individual case, if you’re a plaintiff who decides to settle, you file a dismissal and your case is over. But in a class action, the court must approve any settlement. Court must also direct notice to any class members who would be bound by such settlement. (e)(1)(C) sets out a standard to be used when deciding whether or not to approve a settlement. (e)(2) addresses what was happening especially in asbestos cases, where the defendant would make a side deal with the named representative to get him to agree to the settlementnow those side deals must be disclosed. (e)(3) gives a

second opt-out opportunity for (b)(3) classes (e)(4)(B) states that if you’re an absent class member who finds out about a settlement you feel is unfair and you object to it and then you later withdraw your objection, you must get court approval to withdraw your objection, to prevent buy-offs of objectors. (f) is there because in general there is a rule against interlocutory appeals, and decision to certify or not certify a class is done pretrial. The statute on interlocutory appeals allows a rare issue to go up but only if the federal judge certifies it. The difference with this section is that the Court of Appeals has the power to decide whether the interlocutory appeal goes up, rather than the district judge. (g) Class Counsel. Gives court elaborate instructions on how to figure out who’s the appropriate class counsel, and makes clear that counsel owes a duty to the class as a whole, not to individual class members. Kline v. Coldwell Banker (9th Cir Ct App 1974): If the Klines

were to sue individually, it would be maybe $6,000. But suing on behalf of 400,000 class members, then it’s a huge case. As Plaintiff’s attorney, you don’t take that case unless you can turn it into a class action So for the Klines, they’re stuck in small claims court or they never recover. GETTING THE CLASS CERTIFIED Adequate Definition of the Class. Who controls the definition of the class? The plaintiffs’ attorney, usually. If you’re a plaintiffs’ attorney, what strategic considerations go in to the way you’re defining your class? (1) Manageable. Must make the size and scope of the case manageable and affordable, since you’ll be fronting the suit’s costs. (2) Choice of law. Having plaintiffs from different states in a case where state law is going to apply makes it difficult to know what state’s law to use. So you may divide the class by state Why does the class have to be defined so early in the process? (1) Figure out the notice when notice is required (it is

required for 23(b)(3) classes which can opt out) so you know how to frame the relief and distribute it. (2) Defendant is entitled to know for res judicata purposes who is bound by the decision. If Defendant wins, and is later sued by a class member, Δ obviously wants to defend based on res judicata. (3) Even if the Plaintiff is only after an injunction, you have to know who is entitled to enforce that injunction, so absent class members would have standing to enforce, but non-class members wouldn’t. When you’re the plaintiff’s attorney deciding how big or small to make the class, probably the primary thing you’re considering is what kind of relief you’re after. If your primary goal is to get money damages, then you’re going to have to have a far more specific and definite idea of who is in the class. But if you are primarily after injunctive relief then it might not be as important to specifically define the class, because presumable the injunctive relief inures to the

benefit of the class members whether they know it or notbut you’re not going to have to seek out each person and actually distribute some award. How do you get notice to a nationwide class? The language is very close to the constitutional standard for notice. If you don’t have any way of knowing individualssuch as a suit when the class consists of purchasers of a particular productyou have much more leeway in notice. Using magazines with nationwide circulation is one example. Simer v. Rios (7th Cir Ct App 1981): Plaintiffs are Grey Panthers of Chicago, a NFP organization. They’re suing because the energy conservation services program Chicago had determined whether or not to pay based on if you’d received a shut-off notice 24 Source: http://www.doksinet from the company. The problem was the administrators were requiring a shut-off notice when the regulations dictated they were not supposed to do that. Each plaintiff was only looking for a couple hundred bucks. How do you

define the class? All those who either were turned down when they applied or who were discouraged from applying because of the policy requiring a shut-off notice. Defense: It is hard to find the people who were discouraged by this because it turns on people’s state of mind. It’s not so hard to find people who were actually turned down, but how do you know who was “discouraged?” What if you figured out some sort of noticepostersand you put them in community centers, churches, welfare centers, places where the poor people were likely to see them? Couldn’t you have a deal where you force people to file affidavits saying they were, indeed, discouraged? The real question becomes whether or not it is worth it. The judge in this case says it is not worth it; it is a huge financial burden and by the time it was accomplished, the program would be another 2 years into it. Judge Swygert said that it makes no sense for the city to send the money back to the US Treasury; the city should

at least try to find the people in the city that could claim it and distribute it to them instead. Initially it was a (b)(2) class because they sought an injunction and $250 per plaintiff. The city of Chicago obviated the injunctive relief by ceasing the practice that would have been subject to the injunction (requiring the shutoff notice), giving rise to the argument that because there is no injunctive claim necessary and it renders the class a (b)(3) class, because it is just for damages, and thus turns the notice into a more specific requirement. Swygert says “once a (b)(2) always a (b)(2)” even when the defendant voluntary ceases the action which prompted the injunctive claim. Fluid Recovery: Equitable notion that we’ll do the best we can to get recovery to the right people, but it won’t be perfect. For example, in the taxi cab case, people don’t really keep record of who the passengers are, so the taxi cab companies had to undercharge by the same amount for the same

amount of time on the theory that you’ll get a fair enough number of repeat customers to get relief to many of the right people. KNOW: Who controls the class definition initially, and take into account resources, manageability and relief being sought, which impacts the specificity of the class definition. THE REQUIREMENTS OF RULE 23(a) Numerosity The way the rule is worded, it says “joinder of all members is impracticable.” So you’re after a situation where you wouldn’t expect the parties to file individual claims, but if they would, it would overwhelm the system. In general, fewer than 50 will be hard to certify in the absence of special circumstances, because the system could handle that number of cases without having to form a class. If it is more than 100, that is usually numerous enough, though you might find some contrary examples. The range between 50 and 100, the cases are just all over the place. What sorts of factors are considered? (1) Geography. Where are the

parties located? Particularly if the parties are in a discreet geographic location and they are not too numerous, then there are ways other than class action the federal court can handle the litigation (e.g, consolidation) allowing the benefits of a class action without wresting control from the hands of the plaintiffs’ individual attorneys. (2) Amount at stake. a. If for example the amount at stake is minimal, then you would not expect people to pursue those claims on their own because their costs of litigation would outweigh the costs of recovery. But there would have to be a federal question involved, because if all the claims are too small that one person would not be expected to pursue it on their own, then it would not meet the diversity amount-in-controversy requirement. b. When there is a lot at stake for each individual, the courts are sometimes reluctant to force those people into a class action because we think plaintiff should be master of their complaint. (3) Special

Cases. a. 17 black teachers allowed to form a class because they would be reluctant to pursue their claims individually because of fear of retaliation. Ark Educ Assoc v Bd of Educ (1971) 25 Source: http://www.doksinet b. c. Numerosity was satisfied on the basis of an “informal” survey showing that 70 women per month from the area in question were forced to go outside the state to seek abortions. Doe v Charleston Area Medical Ctr. (1975) Numerosity was met by figures showing the number of resident aliens in Illinois and the number of Civil Service positions in the state, because you couldn’t really show who of them “desired” to seek those jobs. Vergara v Hampton (1978) HYPO: Let’s say you define a class for injunctive purposes as everyone who lives in the Chicago Housing Authority Housing Projects, and you’re seeking an injunction to prevent police from doing warrantless sweeps looking for drugs and drug dealing. No right to opt-out because it’s an injunctive

class under (b)(2) Some residents are happy the police are going through and sweeping for drugs because they don’t want gangs and drugs around their homes. So how is a judge supposed to figure out the numbers of the people who support this lawsuit versus the numbers of those that do not support it? The state of mind is completely hidden here; the class should be everyone who lives in a CHA project AND objects to the police’s sweeps. Unless an objector shows up the judge would have no way of knowing how many people object. A majority of the people actually supported what the police were doing and the Court ultimately decertified the class for that reason. Commonality Commonality is required for all class actions under (a)(2). But it is very broad “There must be questions of law or fact common to the class.” BUT, when you certify a (b)(3) class, there is a special requirement of predominancethat common issues must predominate over individual ones. There is very little litigation

over the commonality requirement of (a)(2) but lots of litigation over the predominance requirement of (b)(3). Blackie v. Barrack (9th Cir Ct App 1975): People who purchased securities during the 27 months when there was alleged misrepresentations about Ampex Corp.’s financial viability So class definition is all purchasers in this 27-month period. So if the highest officers of Ampex Corp also purchased stocks during the period, are they members of the class against themselves? The way it’s usually handled is that you include an exclusion in the class definition: “excluding any directors or officers of Ampex” or “excluding any defendants.” What is the argument for finding a common question amongst all these purchasers who purchased at different times and places in an open market? Under 10(b), these fraudulent misrepresentations were contained in the financial reports and press releases. There were 45 documents in total Where is the commonality? The main interest in the

misrepresentationthe fraud on the market theory. Defendants are saying there are inherent conflicts built in to the class that basically ruin any argument for commonality and if anything makes the claims highly individualistic. What is the conflict? If you bought very early on in the 27-month period and sold before the disclosures started to come out about the losses at Ampex, you’re in a very different position than the person who bought your stock and kept it until the nosedive occurred. Some of the class members may actually have gained from the misrepresentations How can the court get past this obvious conflict to meet the test that common issues must predominate? The judge is looking to see whether there is enough commonality that he can accomplish a lot by trying this as a class. He is determining whether or not it makes sense to deal with the claims collectively rather than individually. Predominance is not a matter of numbers of common issues versus numbers of individual

issues and whichever one has more triumphs the judge is wondering whether the resolution of the litigation will be advanced by trying the claims in a class format. GET OUT OF THIS: When defining your class, you must think like a judge. Will the judge buy this as a practical and manageable thing to do? And be prepared to suggest plans by which the judge can manage your proposed class. The Problem of Issue Subclassing and People Subclassing Courts sometimes under (c)(4) certify an “Issues Class” where they are certifying a class just to try certain issues of the cases. The idea is to try these issues common to all parties, see how that goes, then force a settlement after you see how those issues come out. 26 Source: http://www.doksinet If the judge can just form issue classes, then how do you figure out predominance? Isn’t there by definition predominance of common issues in issue classes? Can a judge avoid a predominance problem by just breaking the case into bits and

certifying the common issues, and is that a legitimate use of the rule? There is no “right answer” to this. Some courts have said before you can sub-class you have to have decided in a (b)(3) situation that the predominance requirement is met. In other words you do predominance first, and if there is predominance, then it is okay to sub-class for efficient trial and hope for settlement. If there is a trial on the global issue of liability for misrepresentation that comes out in plaintiff’s favor then you have to try the damages issue, you might need to form sub-classes at that point, and you’d have to have a separate class representative for each sub-class and treat each as its own class. People subclassing is when you have to divide the class into groups because of conflicts within the larger class, and the court has the flexibility under (c)(4) to do both those things. An Erie Problem of a Different Face The court in Blackie talks about the conflict and says it only exists if

the measure of damages is seen as “out of pocket.” But the judge might be able to work out rescission, where everyone undoes the dealgets the price of the stock plus interest, for example. If what the court is saying is that we’re going to vary the substantive law and the way we measure damages because it’s being treated like a class action, then as a defendant, what argument does that give rise to? If the substantive law that applies to you changes because the suit is a class action, it is kind of an Erie problem in a different form. The FRCP are not supposed to change anyone’s substantive rights But in the scenario described above, isn’t Rule 23 essentially changing your rights? It is doubtful that the out of pocket measure and the rescission remedies will work out to be the same dollar amount. So either the defendant is paying out differently, or the remedy is being distributed to plaintiffs differently. This could be a Rules Enabling Act problem, that the application of

Rule 23 is changing your substantive rights. Smilow v Southwestern Bell Mobile Systems: Class is everyone within a specified geographic area who received incoming calls. Sued under 2 state law theories: common law and statute. Under the state statute, damages were measured by statutory damages of $25 or the actual damages, whichever was greater. Because there were statutory damages in a specific amount, that gets rid of individual differences in measuring damages and quashes Defendant’s argument that figuring damages is too individualistic to allow a class certification. They also had a claim under Federal consumer law. They were in federal court under a federal question; the amount in controversy wouldn’t be enough for diversity. They got the other claims into federal court then on supplemental jurisdiction. But then they abandoned their federal claim on appeal. Supplemental jurisdiction sticks, though the district court has the discretion to dismiss when the federal question goes

away. Is there really a federal interest in this case that ends up turning on basically just state law? The government may not have interest in a claim for $25 between diverse parties, but when you multiply that by hundreds of people, you get a much larger claim amount. Does the federal interest in interstate commerce kick in when many thousands of dollars are at stake with a business entity? Case turns on commonality. Also, there was an immediate appeal on the issue of decertifying the class at the district level; Rule 23(f) says if you file within 10 days after a certification (or decertification) decision, it’s within the appellate court’s discretion whether or not to take that interlocutory appeal. Important to plaintiffs in small stakes litigation because decertifying that case kills the case and it’s not worth bringing individually. Important to defendants in “bet the company” cases where class certification is the key decision, more important than the merits, because

once a class is certified the company’s exposure is more than its assets. WHAT TO KNOW ABOUT COMMONALITY: Easy to meet under Rule 23(a) so is almost never an issue. When you define a class you do so in terms of its commonality so it is tough to come up with a class definition without getting a commonality. The emphasis is on the predominance, in a 23(b)(3) class, which requires that common issues predominate over individual issues. No brightline rule. Cases will say things like “If resolving the common issues is a substantial step toward disposition of the case, then common issues predominate.” The judge will usually use a “functional” test It’s 27 Source: http://www.doksinet frequently true that liability issues will be common and damages issues will be individual, but if liability issues are the important ones and will go a long way toward disposition, then there is probably predominance. It is possible to subclass under (c)(4). One way of doing that is picking out

issues and treating those as a class action. That’s an “Issue Class” Then you save the individual issues for individual trial Of course, you hope that either defendants will be absolved on that one question, or that they’re found liable and work out a settlement schedule. Where the tension comes in, is if you separate issues out for individual treatment, don’t you eventually eviscerate the predominance requirement? So some courts say you have to look at cases as a whole, in total, before you separate any subclasses. For example, in asbestos, some courts say you cannot just pick out one issue and form a subclass on it; you have to look at the cases all together as a whole to justify subclassing it. Typicality Numerosity & commonality focus on whether there should be a class. Typicality and Representativeness focus on whether the class rep is the right person to represent the class. General Telephone Company of the Southwest v. Falcon (US 1982): Falcon = named rep, didn’t

receive promotion at company because he was Mexican American. He received two prior promotions, rejected a third, and goes after a fourth, which is refused in favor of several other less qualified white individuals. He complains that he personally was not promoted, which is a disparate treatment claim. Class he seeks to represent= 23(b)(2) essentially all Mex Ams. that was employed or could be employed Wants to represent all Mex Ams that were treated differently in hiring or promoting by the company. Class representative’s claim must fairly encompass the class claims. Some conflict embedded: if more Mexican Americans were hired, there would be more competition for the jobs he’s seeking. Embodiment of class for fact-finder: Named Representative should “embody the class.” They are the physical representation of the class, who is sitting at the counsel table, who will testify at trial, etc. From the POV of decisionmaker, you want that representative to embody the class so that

there is no misconception. Check on Plaintiff’s Attorney: The representative is a “check” on the plaintiff’s attorney during the process, and if they have conflicts with members of the class, then there is a concern that the representative (and his attorney) won’t be functioning as appropriately on behalf of all those absent class members. GET OUT OF THIS: Typicality does serve a separate function than commonality. Representative should coincide in interest and be a fair embodiment of the class. As a result of Falcon, it’s easier to certify disparate impact classes, because the proof for everybody is pretty uniform. But in a disparate impact case, it is going to be harder because everyone’s case will look a bit different. Adequate Representation Rule 23(g) requires the court to choose an appropriate and adequate class attorney. So now we are just looking at whether the class representative is adequate. Make sure that representative has no significant conflicts with the

class. Hansberry v. Lee: Cornerstone for class actions. There had been a previous lawsuit in which the Homeowners as a class in Illinois State Court sued to evict an earlier black resident, and the Homeowners won. So the holding in the Illinois courts was that Hansberry is bound by the result in the earlier case because as a homeowner, he was a member of that earlier class and bound by res judicata. ISSUE: Are you bound as a class member by a class action judgment in which you were not adequately represented? HELD: It is a violation of due process to bind an absent class member to a judgment in a case where they were not adequately represented. Why wasn’t Hansberry adequately represented? Being represented by someone who purports to do the exact opposite of what you want just inherently means you’re not being adequately represented. Direct attack = same case, going to appellate court to undo what was done in the courts below. 28 Source: http://www.doksinet Collateral attack =

separate case try to undo judgment in other case for some reason. IMPLICATIONS wow. Almost every class will encompass some parties who were unhappy with what happened in the case. Does that mean none of these cases can be allowed to stand? Now, before a class is certified, court must find that there is adequate representation. So now, the argument exists that there shouldn’t be any collateral attack on adequate representation grounds because there was a separate finding on that. MAIN RULE FROM HANSBERRY: In order to bind absent class members to a decision, they must have been adequately represented in that action. How would you bind all parties to the lawsuit through a class action?  Make a plaintiff class and a defendant class. That way, no matter which side you’re on you’re adequately represented.  Is there a state of mind issue here though? Isn’t this essentially who “wants” it and who does not “want” it? You only have to fit into any one of the categories

under Rule 23(b), but you have to meet the requirements of 23(a) every time. Depending on your strategy, you may want to argue “in the alternative” for more than one (b) class. In practice, remember that in the mandatory classes (b1a, b1b and b2), the absent class members are essentially “hostages.” In theory, the class representative should have their interests at heart, but that isn’t always the case in reality. So the court has to oversee the class to some extent to make sure things operate fairly (b)(1)(A) “Incompatible Standards” To apply (b)(1)(a), you want to look for the situation where without class treatment, the Defendant may face inconsistent or incompatible orders from different courts. Usually looking at injunctive relief in a (b)(1)(A) class, which means you can usually package it as a (b)(1)(2) class. These classes are fairly rare, since the times when you’ll have genuinely incompatible relief is rare. If you wanted to package a mass tort case into a

(b)(1)(A) format, could you do it, and what would you argue?  You could argue that having some of the plaintiffs win damages, and the other group of plaintiffs don’t, that in and of itself is inconsistent and sends conflicting signals to the defendant about what it should do.  The counter to that argument is that the defendant would not necessarily see having to pay damages to one group and being relieved of that obligation to another as incompatible to their interests.  Most courts would say you’re trying to repackage a (b)(3) as a mandatory class.  Then you’d argue that you’re also after medical monitoring, which is a form of injunctive relief, and that has been somewhat successful. (b)(1)(B) “Limited Fund” Form a class when disposition of one claimant’s claim could have negative impact on a later claimant’s claim. If there’s only a finite fund, and early feeders at the trough exhaust it, you are essentially freezing out later claimants. You’d have

more equitable distribution amongst claimants if you can bring all of them in together There’s Interpleader, the same basic idea. The difference is interpleader is usually initiated by the stakeholder The claimants usually initiate the formation of the class, but more often than not, the driving force behind the (b)(1)(B) class is the defendants, not the plaintiff. So the difference between Interpleader and a (b)(1)(B) class may not be so great after all. There’s Bankruptcy too that’s a whole separate, special procedure with Article I judges presiding in a reorganization plan. (b)(1)(B) is like a step before bankruptcy, and that is exactly how it has functioned. What limits the fund?  Limited by law. • Sometimes there are statutory limits on what is paid out. • Punitive Overkill or Limited Generosity Theory. There should not be repeated awards of punitive damages; once the party is punished or deterred, it is “overkill” to keep doing that. If you buy this theory, then

you see why it isn’t fair to let the first “feeders at the trough” take all the punitive damage award and everyone after that gets nothing because punitives are no longer appropriate.  Limited in fact. • Assets available are less than the aggregate of the claims. 29 Source: http://www.doksinet Ortiz v. Fibreboard Corp (US 1999): How do you figure out whether the funds are limited? Supreme Court has a three-part holding for when there is contested certification; must show: (1) Genuinely limited fund, meaning that it is limited by something more than the agreements of the parties. a. Look at the total of the aggregated liquidated claims and the assets/fund available to satisfy those claims, with both figures set at their maximum, and determine whether the claims exceed the assets/fund available. b. Aggregated liquidated claims: It is tough but maybe not impossible to calculate c. Assets available (2) The whole of the inadequate fund must be used. (3) Claimants within the

class have to be treated equitably. Extra Caution in Settlement Class: Lack of Adversariness. Remember this is a settlement class; no one expected when the class was formed that there would be a trial. The class was formed in order to work out a settlement What’s the difference? There’s no adversariness anymore; it can raise suspicion about the deal struck when both sides approach it without the concern of trial. Three “Requirements?” Majority says that traditionally limited fund class treatment has been approved when each of these features is present. So we know these three conditions are sufficient to form a (b)(1)(B) class but Court leaves open the question of whether they are necessary and decides to treat them as presumptively necessary. The Court was trying to “leave the door open” to the possibility that someday they might allow a certification without these factors.  In other words, if you’re trying to get a court to approve a (b)(1)(B) limited fund mandatory

class settlement, you have to show that these three “requirements” are at least presumptively true. Dissent says you cannot measure this class action against the “Perfect World” class action; you have to measure it against the reality of the situation. This deal may not be perfect, but it goes a long way to getting the money to the right people and avoiding more transaction costs. You should discount the amount of the claims by the transaction costs implicit in forcing all class members to bring their own, separate claims. Congress having now passed CAFA, has on the agenda asbestos reform. Creating a bill that would create something like the 911 fund for asbestos claimants. Is it better for Congress to be doing that, or for the courts to be doing it? Constitutional arguments to defeat class certification: (1) 7th Amendment. A plaintiff forced into a mandatory class is essentially denied his right to a jury trial On the other hand, this right is relinquished frequently,

including with mandatory arbitration or class injunctive relief. (2) Due Process. Cite to Hansberry, which looks to potential conflicts between the class representatives and the absent class members. Due process is denied to absent class members where the representative class members have some inherent and legally significant conflicts with the absent members. (b)(2) Class: The Injunctive Class Because it’s mandatory, the parties may have strong incentives to try to package money damage kinds of claims into a (b)(2) format by including a claim for injunctive relief. There is one textual thing to note about 23(b)(2): It says you can certify it “when a party opposing a class has refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” In response to this language of the rule, the 7th Circuit said because it talks about the party opposing the class, you

cannot have a (b)(2) defendant class. It really overlaps with (b)(1)(A), the Incompatible Standards class, where absent class treatment, a defendant might face conflicting orders. That would almost always involve an injunction, so why would you need a separate (b)(2) provision? Remember this rule was written in 1966, Civil Rights Act passed a few years earlier, and (b)(2) was seen as being used in public law litigation. The key to understanding it is that the relief being sought should be injunctive or declaratory. The advisory committee said that it is not appropriate where the relief relates exclusively or predominately to money damages. The predominant relief in (b)(2) cases must be injunctive/declaratory Thus, you’re looking for the “prime” relief or “predominant” relief sought and its connection to the claim. In re Monumental Life Ins. Co (5th Cir 2004): 30 Source: http://www.doksinet Π: § 1981 and § 1982 claim by group of African Americans, challenging dual rates

and dual plans: they were either paying the same and getting fewer benefits, or getting the same benefits and paying more. Δ had voluntarily undertaken to correct most of this: if they voluntarily ceased the “evil practice,” do you really need an injunction, or do you seek it for other reasons? Here, they were seeking the injunction so they could attach damages to it and make a mandatory class. The concern is that people will put a “sham” injunctive claim into their Complaint in order to invoke (b)(2) status when what they’re really after are money damages. By packaging it as a (b)(2) class it becomes mandatory and you’re “corralling” all those absent class members into whatever deal the class makes. The district court had said that there should be no certification because money was really what the plaintiffs were after, but the 5th Circuit reversed that decision. Traditionally, a court would allow money claims in a (b)(2) case where the money claims were considered

“equitable.” When you had mixed legal claims for money damages with a claim for injunctive relief, as long as those money damage claims were seen as “equitable” it could still fall within a (b)(2) category. The classic example up through 1991 was Title VII backpay, which was considered equitable, because it was just restitution. If you’re calculating backpay based on the use of a discriminatory practice, it was not difficult to figure out when they suffered that practice, what the pay scale was, etc. The money damages flowed mechanically from the injunction and do not require subjective testimony because they’re based on objective evidence. In 1991, Congress amended Title VII and included the possibility of giving consequential damages for claims, which are legal in character and highly individual. This made it much tougher to form those classes SO: In a (b)(2) class, money damages must flow mechanically from objective evidence related to the injunction. To determine

whether it’s really money damages a class is seeking, ask yourself, “Would an individual plaintiff likely seek this injunctive relief?” If not, then it’s probably money damages that are at the core of the claim, not the injunction. If an individual could bring a case and seek an injunction that would stop the offending practice, why do you need a class? (1) Enforcement. If an individual Π gets an injunction, that’s the only party that can enforce it If it is granted to a class, then any of the class members can enforce it. (2) Scope. In an individual case, some circuits will say the relief granted cannot be broader than necessary to remedy the harm to that person. In the example of a discriminatory hiring test, the court would rule that the test could not be used for that one individual, but would not strike down that test itself. Thus, bringing it as a mandatory class would enlarge the scope to all affected parties. (b)(3): Usually where Monetary Damage Claims Fall Two

additional requirements: (1) Predominance of common issues (2) Superiority of class actions to other methods of handling the litigation (i.e, separate actions) The judge will consider manageability as part of this analysis. The judge has lots of discretion, meaning that whether you get class certification largely depends on who the judge is. Circuits vary in their attitudes regarding when classes are appropriate under (b)(3), especially with mass tort and mass liability cases. For instance, it is certainly true that when the Rules were first drafted in the 60s, the advisory committee never dreamed it would be used for mass tort cases; but now, we think it should be used that way. Jenkins v. Raymark Industries, Inc (5th Cir 1986): 10 Πs out of 1000 pending in the E.D of Texas Moved to certify a class to try the “state of the art” defense (Judge could also use consolidation, but the class action device is a little cleaner because of all the due process protections built in to the

process.) This is what we’d call an issue class because the litigation plan was to try the state of the art defense, and then bifurcate all the damage trials. This became common: to try the common issues jointly in a class format, and if defendants won, the case was over without having to do all the separate trials for individuals’ damages. If plaintiffs won, then the judge intended to sort out the plaintiffs based on how sick they were and do “mini trials” of about 7 to 10 plaintiffs each. Defendant on appeal makes 3 classes of arguments: 31 Source: http://www.doksinet (1) Rule-Based or Statutory Requirements. Class fails to meet the requirements of Rule 23 a. Predominancenot a very strong argument in an issue class; sort of avoided it by picking out the common issues for an “issues class.” Predominance is inherent in an issues class But when you’re talking about a mass tort, it’s frequently true that the individual issues will be more important, more time

consuming, more dominant, than the common issues. (That varies depending on the tortif it’s an airline crash, then causation is consistent and common. But when you’ve got asbestos exposure, the commonality decreases.) Single-event mass tort cases are much easier to get certified for that reason. b. SuperiorityThere are other (better) established methods for dealing with these claims, such as arbitration or individual cases. (2) Erie Requirements. The use of federal procedures is modifying substantive state law; Plaintiff’s substantive rights are being changed by the procedural use of the class action. Remember the Rules Enabling Act states that the Rules shall not be construed to enlarge, modify or abridge any substantive rights. So if the amount a defendant has to pay changes because a case is being treated as a class, then their substantive rights under state law are being affected. a. For example, in this case, Texas substantive law does not allow bifurcation of actual damages

and punitive damages, but the judge’s plan, which isolated punitive damages for class treatment, did bifurcate those issues. The punitive damages would end up being divorced from the actual damages. Think about the jury: if the punitive damages are supposed to be calibrated to actual damages, and you have a group of plaintiffs who haven’t yet proven actual damages, how can you figure out the punitive damages? b. Under CAFA, you get into federal court so long as there’s minimal diversity, most of these lawsuits are going to wind up federalized, but they’re still going to be based in state law. These Erie objections will probably become much more prominent now that CAFA’s been passed because there will be that many more opportunities for state-based claims to wind up in federal court. (3) Constitutional. 7th Amendment and due process If you don’t have a class action, and Π1 sues asbestos company, and in the course of that case factfinder decides asbestos is unreasonably

dangerous product, Π2 through infinity can come to court and argue issue preclusion (non-mutual collateral estoppel). If it’s true that Π2 through infinity can get the advantage of Π1’s win on the issue, why not just do it that way, rather than going through the rigmarole of getting a class certified in Case 1? Why not just use collateral estoppel rather than class action to handle a repeat defendant? The defendant can avoid collateral estoppel in later cases (in mass tort actions) by stating the decided issue narrowly. The jury would essentially be making a decision on the basis of one individual defendant that would end up being used over and over again in later cases, which may or may not be fair. Castano v. The American Tobacco Co (5th Cir 1996): District court refused a mandatory (b)(2) class but agreed to certify under (b)(3). Tobacco company hired Ken Starr to argue their side before the 5th Circuit, and won. Class includes all nicotine dependent persons in the United

States from 1943 forward, living and deceased, current and former. Someone who’s been told by their doctor to quit smoking but has been unable to do so is considered “nicotine dependent.” But that’s basically every person who has ever smoked, and it’s clear that they intended this to be that inclusive, a nation-wide class of all smokers. The big theory they were pursuing was the addiction was the injury, hence why the class focused on addicted persons. Π class was seeking compensatory, punitive, and equitable relief Trial plan = 4 phase plan. 1st phase, jury would determine what the common issues of core liability were and notice of the trial verdict and claim forms sent to all members. 2nd phase, then jury would determine compensatory damages in sample cases and would establish a ratio of compensatory damages to punitives. 3rd phase, determine compensatory damages for each individual class member. The plan sounds complex, but it’s not much different than what was going to

be done in Jenkins. Why was the same circuit some years later unwilling to adopt this trial plan in tobacco, when they were so willing to adopt it in asbestos? 32 Source: http://www.doksinet There was no experience as there was with the asbestos cases in Jenkins. Here, there was an immature tort, a novel, cutting-edge theory in which we don’t know how the evidence will look or how the trial will play out. Choice of law difficulties. You have plaintiffs from all 50 states, whereas in Jenkins all plaintiffs were from Texas. The plaintiffs’ attorneys that want to get certification better do their homework ahead of time. They can do it one of two ways: Supertort law. Say the tort laws aren’t all that different amongst the states and a “super-tort law” can be created. Subclasses. Say there are differences in tort law, but it’s possible to categorize them For instance, some have comparative negligence, others don’t. You can basically create subclasses based on those

categories. What are some of the defense’s arguments? No superiority of class actions. Immature tort action. Class certification may magnify the strength of unmeritorious claimsthe weak cases are being swept along by the strong ones and treated the same. Judicial crisis argument. Essentially saying that because of the number of Πs involved, you can deal with them all at once for efficiency, but the problem is that you have to consider what each Π would gain by having their own day in court. If it is not a negative value suit, then each Π has incentive to sue separately; it’s not as though these claims are unlikely to be brought individually. Catch-22. Πs want to argue on one hand that these cases would swamp the courts like the asbestos cases swamped the court. But on the other hand, Πs also argue that individual litigation puts Πs at such a severe disadvantage because of the paucity of their resources compared to big tobacco so as to make their representation ineffective. So

individual litigation doesn’t work; only collective litigation would allow Πs to counter the power of Big Tobacco. Court doesn’t buy either of those arguments After Castano, the Π attorneys adopted the strategy of going state-by-state to avoid the choice of law problem with class certification. Those cases were met with mild success If the Δ perceives that the Πs claims are weak on the merits, aren’t they better off doing a 12(b)(6) motion to dismiss to get an early decision on the merits than going through the procedure of getting a class certification? The language “as early as practicable” indicates the judge may decide other dispositive motions before deciding on classification if needed. Certification doesn’t always have to take priority over everything else The judge mayand usually has tolook beyond the pleadings in evaluating numerosity, typicality, adequacy, etc. in deciding in whether or not to certify a class. Thillens, Inc. v Community Currency Exchange

Association of Illinois (ND Ill 1983): Some Δs are government agencies, others are the guy’s competitors, who the guy says conspired with the government officials to deny him his business permits and such. With defendants, they’re sort of inherently part of litigation not by their own choice. So in defendant classes, there’s no one with a lot of incentive to be class representative. So the Π nominates a representative for the defendant class, but it’s the court that ultimately decides who will serve as defendant class representative. The Judge says the class certification was properly done, even though the CCEAI didn’t want to be the representative. It has the strongest incentive to adequately represent the class because if its members are found liable in the case, it has to indemnify them anyway. This is a (b)(3) class, which means there is a notice and a right to opt-out. But why wouldn’t all the defendants just opt out if they don’t want to be there anyway? They’d

have to calculate the odds of being sued separately; if those odds are strong, then they might prefer to have the trade association represent them and just get it over with when there’s a chance to “spread the judgment” out to other defendants. It may also be less work to just stay in the class, since the trade association is the one who’ll be mounting the defense anyway. Juridical link: You have to be careful to make sure that each member of the plaintiff class is injured by each member of the defendant class, otherwise you have a gap in “live case and controversy” between parties. In this particular case, there is a single plaintiff suing a group of defendants and arguing conspiracy. Conspiracy is the link under substantive law that connects all the defendant class members together. 23(b)(1) may be used with the incompatible standards kind of argument. Could you argue that you could use (b)(1)(B) for Δ classes because disposition of one class member’s claim will

effectively dispose of everyone 33 Source: http://www.doksinet else’s? If Π sues Δ1 and gets a finding that Δ1 has behaved wrongly, there would be a case on the books showing the behavior of Δ1 is illegal, and if that’s the same issue with Δ2 and so on, then there’s stare decisis. Generally, the courts won’t apply that reasoning. So Δ classes are generally left with (b)(1)(A)(Incompatible Standards) or (b)(2) if the circuit isn’t concerned with that language about the parties opposing the class. 23(f) Without 23(f) class certification appeals would be interlocutory, which aren’t allowed. That meant appellate court weren’t getting a crack at these class certification cases until after they’d been disposed of somehow at the trial level. 23(f) shifts the power to the Court of Appeals on the interlocutory appeal question. 10 days after the certification decision or denial the party has to apply to the court of appeals. Because the appellate courts have discretion

as to whether to grant the interlocutory certification appeal, they are developing criteria for when they should accept an interlocutory certification appeal. The two big situations you see are: On the plaintiff’s side, the notion of the “death knell” of the case: from plaintiff’s perspective, if class certification denial would kill the case altogether, that’s a good a reason to take the appeal. That’s the negative value case where individually it wouldn’t be worth it to pursue the case. On the defense perspective, the court looks for the “bet the company case,” meaning a case where the stakes are so high for the defendant because of certification approval that the pressure to settle will be irresistible. Settlement Class Actions Amchem Products, Inc. v Windsor (US 1997): MDL process sent all the pending federal asbestos cases to ED of PA under Judge Weinert. There had been a custom of the Defendants (particularly the CCR) of doing what they called inventory

settlements with prominent plaintiff’s lawyers with cases in the MDL. The attorney would reach a lump-sum settlement with CCR who would pay the lawyer to settle his “inventory” of all his asbestos claims pending. Customs developed regarding how much lung cancer was worth, how much mesothelioma was worth, etc. The defendants thought that by doing these lump sum settlements they’d eventually exhaust the plaintiffs and it would stop, but as we know now, that didn’t happen. The CCR defendants finally said they wouldn’t settle any more pending claims until they were given some control over the future claims. Under the auspices of the MDL the judge appoints this law firm to negotiate on behalf of future claimantspeople who had not yet filed any case at all as of January 15, 1993, an arbitrary date. You are a member of that class no matter how sick you are The judge basically transferred claims that don’t even exist! But without that, the CCR weren’t going to play anymore. The

plaintiffs’ attorneys who negotiated this deal had no attorney-client relationship with these people, these future claimants. After they agreed to bargain out this deal, they went out and found some people to represent the class. CCR had consortium of 20 asbestos manufacturers. Πs in this case were the ones who suffered injuries for asbestos claims, and future claimants, who were represented by 11 plaintiffs and their families. The deal: The CCR agreed with plaintiffs to a certain dollar amount for all the current and future claims together, and all future suits were forbidden. The settlement and the class action were one and the same deal. The class action is filed purely to make a settlement worka settlement that has already been negotiated. Normally in litigation, there is an adversary process Defendants with settlement classes can essentially “shop around” for a plaintiff’s attorney willing to settle at the best cost to the defendantthe plaintiff’s attorney has a huge

incentive to form a class and settle the claims of all these absent, faceless people they’ve never met. In Ortiz they tried to do a (b)(1)(B) mandatory class of plaintiffs against one particular asbestos manufacturer. In Amchem, they form a (b)(3) voluntary opt-out class against different manufacturers. Who’s going to opt-out of the class? Probably, the people who already have separate lawyers would be the ones to opt-out. They probably figured they wouldn’t get too much of an objection from absent class members, because anyone upset with it can just opt-out. What motivates the objectors and why don’t they just opt-out? The guess is that it was competing plaintiffs’ attorneys who didn’t want unknown future asbestos clients to be swept up in this class and thus removed from the market. It’s gotta be either that or altruism 34 Source: http://www.doksinet Article II Violations? Lacked standing, some cases were not yet ripe. How would someone who is not yet injured have

standing to sue? Rule 23 Issues? Whether a settlement could even be considered when forming a class. The 3d circuit had said that when a settlement class is filed you have to evaluate certification without regard to the settlementbut the Supreme Court doesn’t agree with that Circuit. The Court says the fact of settlement should enter into a court’s evaluation of whether a class should be certified. So when should it matter, and in what direction should it point, according to the text of Rule 23? Where it’s going to matter the most is in (b)(3) cases on the manageability point. Remember how (b)(3) requires tha tin order for a class to be certified, it must be shown a predominance of common issues and the class action format is superior. Manageability is part of the superiority prong The Court says it’s okay for the judge to say, “We don’t have to have a trial, we’ve got a settlementthus, the manageability concerns are dissipated.” The fact of settlement makes

manageability issues go away, which is positive toward certification. The fact of settlement figures in potentially negatively in the 23(a) issuescourts should be even more sensitive to the 23(a) issues in a settlement class than in an adversary class. In a settlement class, more caution must be used in making sure the class rep is typical and adequate than in a litigated case. In a settlement situation, you don’t have the checks and balances of the adversary process to work out the settlement process. The fear of collusion is stronger In what way do we have adequate representation problems here? Rule 23(g) has all sorts of special rules about the judge evaluating class counsel. 23(e) requires disclosure of side deals being made by class counsel, so that the court can evaluate whether those side deals impact the fairness of the settlement for the class. The problem is that it’s a Catch-22. If the court’s saying that any asbestos plaintiffs’ attorney who has other clients for

whom they’ve negotiated is disqualified from being the class attorney for fear of “side deals,” then how would you ever get an experienced class attorney who knows what he’s doing in asbestos cases? You need that kind of experience to represent the class, yet if you have that experience, we worry you might be selling out the class. Class representatives and typicality. The class is all people exposed occupationally to asbestos and have not filed a claim by the set date. What are the conflicts within that class? If you’ve got mesothelioma, you’re not similarly situated to someone that has pleural markers on their lungs. The sick plaintiffs need the money up front, whereas the less sick person wants the money preserved for later on and wants medical monitoring and such. Even though the plaintiffs attorney tried to get by that by having 9 different class representatives, it just isn’t possible for a mesothelioma sufferer to be a typical representative of someone who isn’t

sick yet. How to solve this? Could have divided them into subclasses where there would be coherence within the class. The parties opposing the class said the division in the subclasses would create too diverse of issues. Besides, they wouldn’t have agreed to this dealyou cannot have the sturdy rights in the future and the big payouts now; those are mutually exclusive. The big message to get out of it, besides all the incentive issues, is to say that settlement does factor in, and in that regard the Supreme Court corrects the 3d Circuit: it makes manageability issues easier, it makes 23(a) issues of typicality and representation harder. Take a look at 23(e) The Dist. Court found the settlement fair, reasonable and adequate So by definition, we are adequate representatives if the settlement has been proven adequate and fair and reasonable. Supreme Court rejects that argument. Supreme Court says 23(e) does not supersede 23(a); finding the settlement fair, reasonable and adequate does

not obviate the need for the court to separately determine that the representative is adequate. Remedies “Cy Pres”means “as near as possible.” The idea is that if you cannot get perfect recovery to each class member, we’ll do “as near as possible” to get the money to the right people. The classic case is the 1960s taxi cab case where customers were being overcharged, and in the class action the remedy was to order the cab company to undercharge the same amount for the same amount of time, and at least force the company to disgorge its ill-gotten gain. All kinds of issues that could be raised about this notion of “fluid remedies”. Does this exceed the power of the federal court under the Rules Enabling Act? If doing a fluid remedy means that I pay more in total damages than if I had to pay if I was sued by each individual class member and lost, then isn’t Erie implicated because my substantive rights are being altered? Simer v. Rios: 35 Source: http://www.doksinet

Court gives factors it examines to determine whether it should be opposed to fluid remedies: Deterrence, disgorgement, and compensation. These factors are not exclusive, but they do show up whenever the court discusses this notion. The notion is even if we can’t get the exact amount of money to each class member, do we need to use this remedy to deter this behavior in the future? Fluid recovery is typically used in consumer-type cases, where consumers have been “ripped off.” For example, the Blockbuster case where people were overcharged on late fees. What about in employment discrimination cases. Let’s say a class of women proves there was discrimination in promotion at their company, and there are 80 women in the class and there would have been 10 promotions but for the discrimination. Not all 80 women could have gotten the promotions, so a remedy like backpay raises the question of to whom it should go. If you cannot figure out to whom it should go, does that mean the

company doesn’t have to pay? You come up with a settlement deal that will be $X and class members must file claims to get their amount. Not all class members file their claims and at the end of the time period there’s money left in the pot. What do you do with that money? Some courts gave it back to the defendant, unless he’s disgorging ill-gotten gain. Some courts have the money given to a public-interest program. Overlapping Class Actions In re Diet Drugs (3d Cir. 2002) (Phen-phen case): Get all the federal cases to the same district using MDL and then consolidate them. But what about the state cases? With the passage of CAFA, those cases will essentially be federalized and then they can be included in the MDL. State Case: The Gonzalez class was filed in Texas, suing under Texas state law consumer protection statute that awards treble damages plus return of purchase price if you prove the drug was marketed in a deceptive way. So if you’ve taken phen-phen but you’re not

sick, so all you’re entitled to is a refund of your purchase price, you’re better off in the Texas lawsuit than you would be in the federal lawsuit. Defendants American Home Products do what with the case? Remove to federal court using the removal theory of diversity. This was before CAFA, so plaintiffs would use the strategy of joining a non-diverse proper defendant to defeat removal. The plaintiffs would join the local drugstore to the case, who sold the drug, to prevent removal. Plaintiffs also said because we’re suing on behalf of the purchase price, no one will have an amount in controversy high enough to warrant federal treatment. So it gets remanded back to state court After remand, plaintiffs drop the non-diverse defendant and make a claim for attorney’s fees. Federal Case: The Brown Class: National class is certified for everyone and their families and it is a settlement class, meaning they’ve brokered the settlement deal at the same time they’re filing for class

certification. Texas class of plaintiffs tries to do a state-wide opt-out. Defendants go to the federal judge, teaming up with the Brown Class plaintiffs’ lawyers, and claim the Texas Class shouldn’t’ be allowed to opt-out. They are granted a TRO AHP removes again the Texas case to the federal court in Texas, which then transfers it to the MDL in Pennsylvania. Plaintiffs drop the remand strategy (since they must) and are stuck in federal court The Brown class then gets a permanent injunction enjoining the Gonzalez plaintiff attorneys from opting the Texas class out of the National Class, and the Texas Order purporting to opt those plaintiffs out of the National Class is null and void. You’ve got a federal judge declaring that a state court order is null and void! Why does this not violate the Anti-Injunction Act? Sufficient interference threatened by a parallel state court action warrants injunction against the state court. Sufficient interference is evidenced by three factors:

(1) Nature of the federal action to determine what kinds of state court actions would sufficiently impair it; (2) Nature of the state court action to determine if it presents a sufficient threat; (3) Consider federalism and commity. Applying that here: (1) Nature of federal action: The litigation was so far advanced with the national class that it was akin to a res over which the federal court had jurisdiction. How would the proceeding in Texas interfere with this national class, a (b)(3) class that allows opt-out? AHP negotiated its own opt-out, saying if too many class members opted out, they wouldn’t agree to the settlement. The argument becomes that if you opt-out all of the Texas class, that’s a significant number of people, and could derail the federal settlement. The federal court overseeing the national class should be able to control what parties are before it. The Texas order interferes with the federal court’s ability to manage its own case because it opts out some of

the parties that would otherwise be before the federal court. 36 Source: http://www.doksinet P. 399: Full Faith & Credit: requires courts to give the same credit as the rendering court would give. Gonzalez plaintiffs tried to argue the federal court had to give credit to the Texas court’s order. Rooker-Feldman Doctrine: Lower federal courts should not serve as courts of appeals reviewing what state courts do. Gonzalez plaintiffs argued that in the part of the injunction declaring state order null and void, that’s like an appellate court reversing a lower court’s actions. Page 405 In Bridgestone-Firestone, the 7th Cir. decides there can be no national class, so they do not certify the class Then they issue an injunction against the putative class members saying that they’re not allowed to go to any other court to certify a national class certification. Court declared that they were all issue precluded on the matter of class certification. Problems of Jurisdiction &

Choice of Law Phillips Petroleum Co. v Shutts (US 1985): Tells you under what circumstances states can apply their own law in a conflicts of law situation: a set of restrictions emanates from the full faith & credit clause, and a set emanating from the due process clause meant to protect the parties. In order to apply its own law, the state has to have contacts with the litigation that create a state interest in applying its own law. Contacts may be with plaintiffs, with defendants, with what happened there, etc. It is not enough, as Shutts says, for the state to just say, “We’re hosting a nationwide class” On remand, the court either had to go claimant-by-claimant to determine whether they had contacts with Kansas sufficient to support the application of Kansas law (time consuming!) or must find that there is no significant conflict between KS law and other state laws. Phillips pays the leaseholders of the land from which it extracts its gas. The rate they pay is set by a

federal regulatory commission. They’re allowed to increase their rate under certain circumstances with federal approval. Phillips had use of money for the period of time between when they started charging a higher price and when the price hike was approved by the feds. The leaseholders want the money plus interest due to them during that time. Individually, the leaseholders are owed only about $100/person But collectively, there’s a lot of money on the line. Plaintiff’s strategy is to sue in Kansas State Court because there was a previous case in KS that established the rule under KS Oil & Gas Law that there was liability for that royalty withholding, plus KS had a very high statutory interest rate. Plaintiffs were definitely forum shopping to get the stare decisis and higher interest rate Formed an opt-out national class. Plaintiffs win in the KS state court Goes up to the Supreme Court on a threshold issue plus two substantive issues: (1) Whether the court has to have

personal jurisdiction over absent plaintiff class members in order to render a judgment [No], and (2) Whether it was constitutional for KS to apply its own law to the claims of all 28,000 class members against Phillips. The threshold issue is, who is going to raise these claims? Not the plaintiffs’ attorneys, who have no incentive to bring those claims. Defendant has the incentive to bring these claims. So Defendant is standing in the shoes of the absent plaintiff class members, and the Court says the Defendant has the right to know the binding effect of this judgment, as they would be greatly disadvantaged by them (the Defendant) being bound by the judgment if the absent class members aren’t also bound. Personal Jurisdiction: Do all the absent plaintiff class members have to have minimum contacts with the jurisdiction in order for the judgment to be binding on them? Not according to Shutts. Defendants stand to lose and plaintiffs stand to gain, so the Pennoyer rule is about making

sure a court has power over a Defendant since they’re at risk of loss. But absent plaintiff class members don’t stand to lose anything by virtue of the litigation, they only stand to gain. But if you look at the legal claim as something that can be lost, then all those plaintiffs do stand to lose something in the form of their right to bring a claim. It’s not that there is no due process right for those absent class members, it’s just that the due process right does not manifest itself as the requirement of minimum contacts; there are other due process protections in place. The court lists four due process protections that must be afforded the absent class members in order to bind them [at least in (b)(3) classes; these remain open questions for other classes, see below]: 1. Notice 2. Right to opt out 3. Right to participate if desired 4. Adequate representation 37 Source: http://www.doksinet a. Built into Rule 23, which requires that there be adequate representation for

every class formed Lower courts have struggled on how to deal with this holding, since Protections #2 and 3 are only guaranteed by (b)(3) classes, not others. So do those constitutional requirements now apply in mandatory classes? What about a Defendant class? Should we require full minimum contacts of all class members, or are these protections sufficient for those classes too? When you have significant money damages in a case, even if it is categorized as a (b)(1) or (b)(2) class, you ought to afford these due process protections. Choice of Law: A multi-state contacts case brought in IL (plaintiff from IN, defendant in IL, accident in Michigan). First thing IL court figures out is whose substantive law should apply: IN, IL or MI. All have contacts with the dispute The law might be the same, but it may vary on significant issues, including strict liability, measuring damages, etc. Every state has developed its own choice of law rules. There was a time when everyone followed the First

Restatement, which said that in tort cases you apply the law of the place of the injury. That system rendered some very arbitrary results, and courts began to develop other ways to choose a law to apply to a particular case, based on what states have an interest in having their law applied. In modern choice of law regimes, several approaches developed, and then the Second Restatement was passed. For our purposes, every state has its own choice of law rules that tell it how to choose what substantive law will apply in the case. When a case is filed in federal court, the judge must apply the choice of law rules of the state in which it sits, under Erie. What those choice of law rules are vary from state to state. Some of these choice of law regimes are “out there.” The constitution comes in: it’s not as though the state can choose any law it wants. In the above example, Illinois couldn’t’ apply the law of Hawaii, which has no connection. The constitution imposes constraints on

which law a state can choose The choice of law regimes, which vary from place to place, have to conform to constitutional requirements, and those come from two places: The Due Process Clause and the Full Faith & Credit Clause. On the Due Process side, the basic idea that’s developed from the constitutional cases is that you cannot choose a law that will unfairly surprise the parties. Due Process in general is always focused on the parties A law should not apply to you unless you would have a “reasonable expectation” that it would. Very similar to the minimum contacts test. The Full Faith and Credit side of things is focused on the relationships between the states, and each state respecting the sovereignty of its sister states. If, for example, and Indiana judge wants to apply IN law to every single case before him, he’d essentially be disrespecting the laws of all the sister states. In order for a state law to apply, that state must have some contact that creates an

interest in having its law apply. In order for an application of a state’s law not to violate full faith and credit, the state must have a connection the parties or the dispute that warrants the application. This is a very loose test though The idea is that as long as there is some connection between the situation and the law applied, that is sufficient. In the above example, all three states have some interest sufficient for their laws to apply. In Shutts, Kansas law was applied to all leases, whether or not that particular person’s lease was in Kansas. All 33,000 class members got KS law applied, even though the vast majority of them had no connection to KS. Supreme Court said that violated the choice of law discretion. When KS applied its own law to the claims of absent class members who had no connection to KS it violated the constitution under both Due Process and Full Faith & Credit. If those absent class members brought their own case, there would be no reason for KS law

to apply. If I’m a TX leaseholder with a lease in TX, I could get general personal jurisdiction over Philips Petroleum in Kansas. However, it would not be constitutional for Kansas to apply its own law in that case The Due Process Clause test asks whether it would cause “undue surprise.” In this example, no one has any reason to expect KS law to apply and it would be “unduly surprising.” The Full Faith & Credit examines whether KS has an interest in a dispute between a TX party and an Oklahoma party, and it wouldn’t really. The forum state can always apply its own procedural law, including statute of limitations, even though it has to apply substantive law of somewhere else. In Re Bridgestone / Firestone, Inc. (7th Cir 2002): Firestone Tires experienced certain failure rates in the late 1990s. MDL panel transferred all cases to S.D of Indiana, and that judge didn’t want all these cases to be sent back for separate trials, so she wants to form a class to prevent the

suits from being sent back to their home districts. Thus, judge Dist. Ct certified 2 nationwide classes, one defined by ownership of Ford Explorer and one defined by ownership of a certain model of Ford tires. This definition includes everyone who owned either the tires or the Ford Explorers that had the tires. This seems to include everyone who had injuries and everyone else, but 38 Source: http://www.doksinet Easterbrook sees that anyone who’s actually had injury because of it would just opt-out of the class and that the class is thus basically just those people who hadn’t yet experienced any actual tire failure and injury. Easterbrook also says that no class action is proper unless all participants are based on the same legal rules, but that is not actually a prior decision or part of Rule 23. Easterbrook just is sort of “winging it” with this idea Easterbrook advocates the market model theory as opposed to the central planning theory. The market model theory says that

repeated cases and various verdicts across the nation will sort of develop a fair “price” for this situation, whereas the central planning theory would allow one jury in one nationwide class to set one price for the situation of having an unexploded Firestone tire. Easterbrook assumes that you’ll get a better “price-set” using the market model than using the central planning theory. Indiana uses the choice of law theory that the law of the place of injury governs in tort cases, and law of the place of the contract governs in contract cases. So if you go by place of injury, what’s the problem? All 50 state laws would potentially apply. Plaintiffs respond by saying this is a contract case, not a tort case, because those persons with serious tort cases will opt-out. There is more of a warranty / consumer-fraud case in existence Thus, the law of the place of the contract should apply. District court bought that. But Easterbrook says it’s the place where the consumer was

located, which raises the same problem of having to deal with all 50 states’ laws. What the district judge tried to do is apply the law of the headquarters of Ford and Firestone. If you did that, do you see potential problems in terms of the influences of the place of the law? Wouldn’t you worry about always applying the law of the Defendant’s home state? The court made its decision that no nationwide class could be certified “stick” by issuing an injunction against all the absent class membersa class which the court refused to certify, making these folks putative class memberspreventing them from seeking certification of a nationwide class in any other court. Prejudgment Notice to Class Members Eisen v. Carlisle & Jacquelin (US 1974): Involves everyone who traded “odd lots of shares” on the NYSE between 1962 and 1966, of which 2.2 million plaintiffs could be identified at a cost of $225,000. Each claim is worth only about $70 The Dist. Ct created a plan costing about

$22,000 involving individual notice to those plaintiffs who made 10 or more odd lots during the time as well as other individuals selected at random, and then doing notice by publication for everyone else. The Dist Ct ordered the Defendants to pay for this cost of notice Two questions here: (1) Whether this proposed notice method is adequate given that it does not give actual notice to all identified class members, and (2) Who has to pay for this method? Is the method okay? NOPE. Mullane requires the “best notice practical under the circumstances to all identifiable class members.” The question is, why? Is it because Rule 23 says so? Or does the fact they cite to Mullane, which is a constitutional case, indicate that this is a constitutional decision? Mullane dictates that due process requires notice “reasonably calculated” to apprise the parties of the action. Basically, this is a statutory case dealing with Rule 23 but the Court is couching its language in terms of a

constitutional decision. If it is a constitutional holding, then you’d have to worry about applying this to (b)(1) and (b)(2) classes as well as (b)(3). Why is this so important that (b)(3) absent class members have notice? If the notice is to facilitate opt-out, then it’s important that every single individual get it. But if that’s the case, why are they not more worried about the 4 million un-identifiable class members? With Mullane and Eisen, there is a doctrine of necessity going: you do the best you can in the circumstances. Plaintiff must pay for the cost of notice. It is possible to get the Defendant to help you with notice If Δ routinely corresponds with class members (such as a utility company doing regular billing) you may be able to include notice in the bills, but you’ll still have to pay to have the notice printed. Intervention & Opt-Out Woolen v. Surtran Taxicabs, Inc (5th Cir 1982): Within the Plaintiffs class you have two warring groups of Plaintiffs

because the Dist. judge certified the class as a (b)(2) so the disgruntled class members couldn’t opt-out. Thus, the disgruntled Plaintiffs file a Motion to Intervene so they can be more closely involved. In order to Intervene as of right you have to show (1) an interest in the subject matter of the litigation, (2) a practical impairment of that interest will be suffered if you are not let in, and (3) you are not already adequately 39 Source: http://www.doksinet represented in the lawsuit. You must argue you are not adequately represented to intervene, but in order for a class to be certified Rule 23(a), the judge must have found that there is adequate representation. Does adequacy for Rule 23 certification mean the same for non-adequacy for intervention as of right? The court says it is a lower threshold for interventionyou should be able to intervene as a class member. Doesn’t that seem backwards? In a Rule 23 situation, if you’re an absent class member you’re going to be

bound by res judicata by judgment in the case, so you’d think the adequacy requirement should be higher under Rule 23, whereas Rule 24 only requires an interest but not that you’re bound. But the court holds the other way around Bottom line: Court read Rule 24 more liberally so it was possible to intervene as an absent class member without decertifying the class. You could be inadequately represented enough to intervene without having the entire class derailed. If you object to a settlement as an absent class member, without intervening, and you lose, can you appeal? Class member objectors have standing to appeal even if they are not formally allowed to intervene. Judicial Control of Settlement Federal Jurisdiction Normally in a regular non-class action case, if you settle, you enter a Rule 41 voluntary dismissal of your case. That works also in class action litigation although once they’re certified, settlements must be approved by the Court. Once a case is settled and there’s

been a 41 voluntary dismissal, then if later there is a violation of the settlement agreement and you want to come back to federal court to enforce the settlement you might have a problem because the Supreme Court held there is no federal subject matter jurisdiction to enforce a settlement agreement because settlements are just contracts, and it results in a state breach of contract action. Post-CAFA, that might change a bit. For now to avoid that problem, if you want the federal court to be involved in enforcing the settlement, get the federal judge to reserve jurisdiction explicitly in the dismissal Order. The Problem of Class Action Settlements Rule 23(e) requires the judge to approve class action settlements. Keep in mind that AmChem case about settlement classes, because there’s a chicken & the egg problem. In order to certify a class court must find all requirements of 23(a) & (b) are met. Does that mean that once the court has found all those thing sto be true that any

settlement that an adequate, typical representative would agree to must be fair reasonable & adequate? Or conversely, can you say that if the settlement is fair, reasonable and adequate, whoever made that settlement must be a fair & adequate representative? Court sometimes assume the deal the representative struck must be okay, or that they must be an adequate representation if they struck a good deal. AmChem reminds us to be careful to meet all the requirements of 23(a) and (b) and separately consider whether the settlement deal is fair, reasonable, and adequate. In general, individual members of a class can settle their own individual claims if they want to. What if the class representative wants to settle her individual claim? Should she be able to do that? Π rep files a class action on behalf of 100 absent class members. Δ approaches attorney and offers a sweet deal to Π rep if she’ll drop the class action. Should she privately be able to make that settlement without

telling the judge about it, if the class hasn’t been certified yet? The new version of Rule 23 says you need court approval of a class settlement only after class certification, leaving the class rep free to settle her claim without court approval as long as the class has not yet been certified. The individual can settle up to the point of certification The process of post-certification settlement approval There are three tiers or stages to the process: 1. The proponents of the settlement will come ot the judge and get preliminary approval If you get past that, then: 2. 23(e) requires that notice be given to the absent class members “The court must direct notice in a reasonable member to all class members who would be bound to the propsed settlement.” What that means specifically is not spelled out. Publication might be enough in a (b)(1) or (b)(2) since there’s no opt-out right anyway. With (b)(3) court may refuse settlement unless it gives a second opt-out opportunity

facilitated by notice. 3. Then the court holds a fairness hearing where all interested parties have a chance to give their opinion on the deal, including objectors. 40 Source: http://www.doksinet Think about what an uphill battle the objectors have. By the time they get to the corut, it has already been preliminarily approved by the court. The attorneys who conducted the deal are far more familiar with the details of the case than the objector. They must, without much information at his disposal, convince a judge that the settlement is unfair when the judge had already been persuaded once earlier that the settlement was fair and reasonable. Objectors may be the people safeguarding the interest of the absent class members. Or they may be the “bottom feeders” just looking to cause trouble or exact attacks by trying to work a side deal themselves. Rule 23(e)(4) has tried to address that: says a class member objector can withdraw his objection only with the court’s approval. This

is to try to prevent a defendant from buying out an objector with a sweeter deal than the rest of the class is getting. Sidenote: The 7th Cir. said if you opt-out of a class action to bring your own suit, you cannot use offensive collateral estoppel in your own case; you cannot be a “wait and see” class member. This is to reduce the incentive to opt-out of cases. Not all circuits use that method to “tax” opting out What standards should the court use to figure out whether or not the settlement is Fair, Reasonable & Adequate? The kinds of things a court would worry about are: 1. Looking at the information available at the time the deal was negotiated you want to make sure the deal is struck by relatively sophisticated negotiators. If the deal is struck very early prior to any discovery being done, there is suspicion because discovery would reveal how strong the case really is. Court considers informal and formal discovery methods. 2. Figure out how the case would be valued

if it went to trial and compare it to the settlement deal To do this, look for the likely recovery discounted by the risk of losing. Must figure out what plaintiff is likely to get out of a litigated judgment, discounted by the risk plaintiff won’t get anything. 3. Other risk factors: Judge’s gut reaction How popular is this deal amongst the class membershow many have opted out, how many have objected? Would defendant be able to pay a higher judgment? Parker v. Anderson Bell helicopter was sued by 7 employment discrimination suits brought by 11 Plaintiffs. It was a 23(b)(2) class and all P’s who were drunk at a settlement meeting, rejected the settlement, but the settlement went forward and it was approved. P are mad and claim that they had inadequate representation It is possible for the DC to approve settlement over the objection of the P. Class attorney ultimately gets control with the approval of the court. In the class context, the judge tells you what is good for you

Plaintiffs’ attorney’s role changes. The court looks at likely recovery During the settlement fairness hearings, Plaintiffs’ attorney must do the opposite of what they normally would. He must show the court how weak their case is, and how risky it would to go to trial because of the risk of loss. Once the named representatives show themselves to be unhappy with the deal, the court then decides the representatives are being unreasonable, but that the settlement deal is still good. In an individual action you can be as unreasonable as you want to be in your settlement dealing. This becomes a “headless lawsuit” because the representatives are severed from the rest of the action, but the class attorney is left because you cannot fire a class attorney even if you fire him as your individual lawyer. Settlement Strategies Three that go on fairly routinely, one that is illegal but goes on routinely anyway: 1. Log Rolling: If you’ve got multiple Δs, a Π strategy of log rolling

would be to settle with whoever is willing to settle early at a discount (you offer 1 Δ what in your mind is a discounted settlement) to build your war-chest (money to finance litigation) and mounts the pressure on the later holdouts. You’d raise your price for the next settlement and so onthe Δ would see it’s better to get in on the deal early to get the cheaper settlement. It doesn’t work in states where there is contribution from various tortfeasors because the holdout Δ could end up impleading the earlier settlers back into the case. 2. Most Favored Nation (MFN) Status: From Π’s perspective if you make a deal with a Δ in which Δ agrees that if they give a later Π a better deal, the initial Π will get the benefit of the better deal as well. Just like the MFN status in trade where your trading partner won’t give another country a better deal than you’re getting without also giving that deal to you. It is argued that this gives the incentive to settle earlier 3.

Mary Carter Agreement: Names comes from 1967 Florida case Π settles with some, but not all, Δs initially in an amount that varies in inverse proportion to the amount Π gets later from non-settling Δs. You 41 Source: http://www.doksinet 4. 5. can make the price go down by getting more out of the non-settling Δs. If you think about it, that gives the incentive to the settling Δ to help Π, because Δ gets a better deal if Π recovers more from their former codefendants. For example, products liability suit, a chainsaw, you can sue the retailer, distributor and manufacturer. The retailer settles with you early in a Mary Carter agreement The more you get against the manufacturer, the less the retailer has to pay you under the structured agreement you’ve made. These are void in some states. Other states require that such agreement be disclosed to the jury or fact-finder in the trial against the non-settling defendants. Unethical: Δs sometimes try to get Π attorneys to agree

to not represent any future Πs against that Δ. That violates the Model Rule 5.6(b) because it creates a conflict between your present conflict and your future one, and violates the overall norm that people should have access to legal representation of their choice. Ethically Suspect: “Futures deals” where as part of an agreement settling Case 1 for Π, you agree to the extent that future Πs come into your office you’ll settle their claims on the same terms. The ABA declares this unethical. In Re Prudential Insurance Co. Sales Practices Litigation (3d Cir 1998): Suit against Prudential, 8 million claimants throughout country challenging sales tactics. Settlement reached which had 2 different elements: ADR process and relief award. Prudential agreed to make additional payments for attorney’s fees and compensatory damages. There are about 300 objectors, and only about 2% of the claimants opted out. NOTE: This is a settlement class so the AmChem concerns kick in, manageability

at trial not a big issue but the requirements of 23(a) and (b) must be fairly considered. Compare the attitude of the 7th Cir. in Bridgestone where they said there should not be nationwide classes: the court here says some cases may require national jurisdiction. Defendant initiated the settlement. Think about information: how much information did the parties have when they negotiated the settlement? There had been some pretrial activityhow much discovery? Not a lot of formal discovery, but some significant informal discovery. Why could that be an issue? If Π attorney has done no discovery before the deal is struck, about what might you be concerned? An unsophisticated litigant without access to relevant information will strike a deal that is not as good as someone more informed and sophisticated. Also concerned about reverse auction where Δ shops around the cheapest settlement deal to the group of Π attorneys willing to settle to squeeze out all the other potential Πs. Apply the

fourth section of Girsh fairness factors, as below, to ADR Plan: If you had a claim of being victim of evil sales practices, you’d file it and it’d be reviewed by Prudential employees, independent auditors, then Prudential appeals personnel, then independent personnel, then you get number assigned. 3 = choose method of compensation. 2 = discount your compensation by 50% Is this justifiable by the “Factors of Satisfaction” transaction costs consideration? As someone who receives a “2”, then your proof probably wasn’t as good as someone who was assigned a “3” and you’d have that much more trouble in an individual case proving that you’re a victim of evil sales practices and you’d have to pay an attorney that much more to do discovery and such. Essentially, we’re saying that 50% discount in the settlement deal is worth the savings in transaction costs for those individuals that receive a “2”. Girsh Fairness Factors for Evaluating Settlement Fairness: [Don’t

have to memorize but have an idea of the kind of things looked for and why.] Four categories of Factors: Factors of Risk: Corresponds to the category discussed earlier: the likely range of recovery discounted by the risk of losing. The court here talks about risks of establishing liability (holes in Π’s case), risk of establishing damages, risks of maintaining class action through trial (goes to the manageability point; if it’s a settlement class AmChem tells us court doesn’t have to worry too much about it, but conversely, if the risk of decertification is a factor, how should it weigh?); range of reasonableness of settlement, range of reasonableness discounted by risk of litigation. Factor of Knowledge: Stage of proceedings and amount of discovery completed; knowledge set available to negotiators at time the deal is struck Factors of Efficiency: Complexity, expense & likely duration of the possible litigation (goes to the judge’s incentives more than the parties &

further demonstrates objectors’ uphill battle when the judge himself has an incentive in the settlement) 42 Source: http://www.doksinet Factors of Satisfaction: Satisfaction in terms of reaction of class to settlement (but can you judge that by the number of opt-outs and objectors?); ability of defendants to withstand a greater judgment and/or transaction costs (if individual litigation is not likely to produce better results for the class because Δ will run out of money or because transaction costs will outweigh recovery, that argues in favor of settlement) NEXT: On Tuesday we’ll do Protective Orders, pages 571-594. We’ll skip the E-Discovery stuff because there’s a set of amendments pending that would change that anyway. It’s important to get through the res judicata and appellate sections before we do the discovery stuff. Thursday we’ll do 803-841 Discovery Confidentiality and Protective Orders The default rule on discovery materials in federal courts: You can do

whatever you want to with it subject to the usual torts, like defamation or invasion of privacy. Absent a protective order, you can do almost whatever you want to with the discovery information: you can share it with other plaintiff lawyers, sell it to The Enquirer, etc. Thus, people almost always seek a protective order, which is governed in federal court by Rule 26(c) to resist turning the information over, or to control what happens to it once it is turned over. Rule 26(c) requires that you show good cause and that the dissemination of the information would annoy, embarrass, oppress, or cause undue burden or expense. You should also demonstrate that you have tried to work it out with the other side. 26(c)(7), that a trade secret or other confidential research, development, or commercial information not be revealed or revealed only in a designated way, is often seen in complex litigation. You must also show that the information you want kept secret really is kept secret and is not

generally available through any source outsiders can access. You must show the dissemination of information would cause you harm Basically any information that could embarrass a company so as to damage it financially has been deemed possible of causing harm. The potential for other plaintiffs finding out and bringing their own claims is also a potential for harm. This goes back to the notion of what courts are supposed to do. If they’re just arbiters of the cause of action between the parties currently before them, then a protective order hiding this information is fine because outsiders aren’t considered. But if you think courts are agents of the government and should uncover information that impacts the public well-being, then you may be concerned about a system that allows information to be kept secret that relates to public health and safety issues. So what does a protective order do, especially under Rule 26(c)(7)? Is this not a prior restraint on speech? What about the First

Amendment? Is the First amendment implicated by a 26(c) protective order, and if so, what is the test? Seattle Times Co. v Rhinehart (US 1984): The Seattle Times published several stories about Rhinehart, a purported spiritual leader who engaged some rather “interesting” and off-beat “spiritual” practices. He sued Seattle Times for defamation Rhine hart wanted a protective order to protect disclosure of his financial and donor records. The litigant involved here, notice, is a newspaper. The effect of the protective order is to tell the Seattle Times that it cannot publish information, specifically the information it gathers through the discovery process in the case. Unsurprisingly the Seattle Times says it has a First Amendment right to publish that information. Usually when the government seeks to suppress speech, they must show a compelling state interest and the least restrictive means used to justify it. The Supreme Court rules on the relationship between Rule 26 and the

First Amendment. They say it’s a different standard when the courts are involved because there isn’t a First Amendment right to the discovery materials of a case. Pretrial depositions and interrogatories are not public components of a trial Thus the court first distinguishes what happens pre-trial with what happens at trial because of the long tradition of the importance of public access to trials. [See Firestone, below] Then the court says because this is not normally a public area, we don’t use strict scrutiny. Rule 26(c) basically does the work for us Because Rule 26(c) furthers an important and substantial government interest unrelated to the suppression of information, if the requirements of Rule 26(c) are met there is no First Amendment problem. What is the substantial government interest served by Rule 26(c)? Think about the purpose of discovery, which is to prepare information for tiral. The government acting through the federal district judge or the state judge has to

police and manage that process so it goes smoothly so the government can achieve its goal of having a well- 43 Source: http://www.doksinet functioning court system. It is important for the judge to have power to protect the system from abuse and to protect the privacy of the parties who want to participate in a case. In a footnote, the Court notes that the Washington lower court noted the protection of litigant privacy is important to protect their access to the courts. In other words if people feared everything that came out in a lawsuit would be made public then they would be hesitant to access the court system, and access to the courts is also a fundamental right. The bottom line is that a protective order entered showing good cause under Rule 26(c) meets constitutional scrutiny. Umbrella Protective Order The custom is to enter, before trial, an umbrella protective order to ward off, at the beginning, any disputes about confidentiality and privacy. They are usually stipulated

but are sometimes imposed on the parties by the court Notice the handout shows that parties are allowed to define, at least initially, what is covered by the protective order, by stamping “Confidential” on those materials they want to protect. The court gets involved then only when there is a dispute as to whether a certain item is actually subject to the order. In subsection (c) it is meant to be not-too-broad by covering what they call trade secrets, but a little farther down that paragraph where it says “Alternative for an MDL relating to product liability” it is pretty broad. Look at subsection (f), the last sentence. The burden of proof is on the party seeking to keep the information secret BUT, the burden of production is shifted in that everything is presumptively covered until someone complains that something should not be covered by the protective order. The one objecting to the confidential status of a piece of material is the one who has to disturb the status quo and

tick the judge off by requesting he get involved in a discovery matter, which judges loathe. Think now about the Seattle Times First Amendment rule. How is this umbrella protective order constitutional under Seattle Times? If the parties consent to the order, they waive any First Amendment objection they may have. However, what about third parties? You cannot consent away other third party rights. But if the pretrial documents are not public records, then the third party wouldn’t have access to them anyway, even without the protective order. What about discovery materials filed with the court? As to those, there is a public right of access. What if they are subject to the umbrella protective order? How is that constitutional? The argument for constitutionality is that it goes back to manageability: the government’s interest in the smooth, manageable pretrial process is substantial enough to justify this restraint on information. The Supreme Court has never directly addressed the

relationship between the First Amendment and umbrella protective orders. The problem is that umbrella protective orders, by definition, are not covered by the “good cause” requirement of Rule 26(c). So the litmus test for constitutionality used in Seattle Times, meeting the requirements of Rule 26(c), is not present with umbrella protective orders. Chicago Tribune Co. v Bridgestone / Firestone, Inc (11th Cir 2001): Parents of 18 yr old killed in an Explorer allegedly due to the design of the tires sued company. Press wanted the documents unsealed. Case settled only after Δs lost summary judgment motion. During that motion some of the documents produced with confidentiality stamps on them were filed with the court. [Rule 5(d) says that you do not file discovery with the court unless you need to in conjunction with another motion being filed.] In this case there was a summary judgment motion and some 15 confidential documents were filed by Πs to resist the summary judgment. They

successfully resisted the information This suggests that sealed information is damaging to the defendant. The Δ objects to 9 confidential documents and 10 redacted court filings that were referencing things the Δ considered “trade secrets.” The press shows up and uses intervention to try to get at these documents It was the LA Times, Washington Post, CBS, Chicago Tribuneheavy-hitters in the media. The district court grants their motion to intervene and agrees to unseal the documents. Δ gets emergency stay of that order and eventually the 11th Circuit reverses. Why? 11th Circuit says the district court applied too high a standard requiring Firestone to show a compelling interest; it should have been a good cause basis. 44 Source: http://www.doksinet The press had cited to 2 sources, one constitutional and one common law, for right of access. Court says the constitutional right of access equals whatever protections are allotted under Rule 26 for pretrial. We want criminal

trials to be open to police that the trial is fair and efficient; the trials have been open for all of America’s history and we want to maintain that. There is also a line of cases that sort of acts as a check on that, saying a judge can impose constraints to avoid contaminating the jury pool, with gag orders and the like. Is it important for the public to have access to what’s going on with pretrial discovery in civil cases to assess whether the process is fair and efficient, or to legitimate the system? Common law right of access extends to discovery material filed with pretrial motions that require judicial resolution of the merits. But the court goes on to say that even so, because they were subject to a pre-existing discovery order, there must be a good-cause balancing: on one hand the interest in access against the other hand issue of keeping the information confidential. Subsection(e) [of the Confidentiality Order handout] says you can use the information in other cases.

This tries to allow parties to share information across different cases, which is a big step forward from the plaintiff bar point of view. But should there be public dissemination for the people who may not even be aware of the danger to which they’re being exposed? Some states have experimented with requiring a judge to consider public safety in making these determinations. Florida is one such example with the Sunshine in Litigation Act saying no court could enter an order that would conceal a public hazard or information concerning a public hazard or information that would allow the public to protect themselves from such a hazard. Where public safety is implicated, the court must at least have a hearing before it decides to enter a confidentiality order. Would this provision apply to a case where someone’s HIV status comes out during discovery? REMEMBER: If you’re in federal court, use Rule 26(c). It trumps state law! Next we’ll do res judicata. For Thursday, read pages on

claim preclusion, pages 803-841 RES JUDICATA / CLAIM PRECLUSION Claim preclusion, a claim is barred by judgment in an earlier suit, requires: 1. Prior judgment: Prior case has come to a judgment that is a. final (the majority defines this as final at the trial court level) i. One thing is whether it matters to you whether the judgment is litigated through the adversary system, or if it is settled. In class actions, a judge must approve a settlement and enter a judgment, so you can have a final judgment without having a full trial. b. valid (the rendering court must have had proper jurisdiction), AND c. on the merits (if the prior case was dismissed on some procedural point, then the case can be restarted on the merits) 2. Parties Same or in Privity: Parties in Suit #2 are the same or are in privity with the parties from Suit #1 Privity is a body of law extremely technical and archane, but the kinds of relationship that create this sort of privity are usually either a. if the nonparty

had control over the litigation in Suit #1 (as is sometimes true in insurance contracts) b. nonparty who was [adequately] represented by a party in Suit #1 (eg, someone was judged incompetent and their guardian brings suit on their behalfthis is also how absent class members are often characterized), or c. a successor in interest to a party (eg, when someone sells his claim to a debt collection agency) 3. Claim within Scope of Judgment: Claim asserted in the later case has to be within the scope of the judgment in Suit #1. This is a transaction test You are not allowed to “split” your claim by suing again based on the same transaction under a different legal theory. Rule 23(c)(3): When the court enters a judgment under (b)(1) or (b)(2), the court must identify who is in the class. When it is a (b)(3) class the court must identify who has gotten notice and chosen not to opt out. The purpose of this provision is so you can tell who is bound in a class action. 45 Source:

http://www.doksinet Tolling of Statutes of Limitations: When a class action has been filed, even if the class is not yet certified, the statute of limitations is tolled with regard to all putative class members. We do this because we don’t want people to feel they must intervene until the class is certified. If the class is not certified, then the statute of limitations starts running again on the date of denial of certification. Matsushita Elec. Indus Co v Epstein (US 1996): Tender offer Matsushita made for MCA. In state court in Delaware they brought state claims, before the tender offer was ever made. What they don’t like about the deal is that the CEO and COO of MCA got sweet side deals. They amended the complaint, did not add federal claims, but added liability based on the violation of federal laws. Federal case filed in California under security laws, which are exclusively federal. Plaintiffs want to proceed in both areas. Key Strategic Error the Federal Plaintiffs Made:

The Delaware state case is a (b)(3) class. They should have opted out, and then they would not have had to make any arguments about preclusion. In Delaware, they try to settle. The judge denies the settlement the first time, but accepts it the second time Why were the defendants so anxious to settle the state case? The chancellor declared the state claims were very weak when he denied the first settlement attempt. The district court first refuses to certify the class and also issues a ruling on the merits of the case. In Delaware, the chancellor has said the settlement offered was no good because it purports to release important claims under federal securities law in exchange for a poison pill which is worthless to the plaintiffs. Then, the federal claims get dismissed. Now the second settlement comes to the Delaware chancellor, and that deal required $2 mil. deposited into a settlement fund distributed pro rata, and the attorney fees get cut to $250,000 (down from $1 million). The

chancellor finds this settlement fair and adequate. The deal he approves is that in exchange for the $2 million fund and the limited attorney fees the class members release all claims they have arising out of this merger expressly and including the federal claims. The Chancellor at this point says the reason the deal is okay is that the federal claims don’t seem to be worth much anymore because they were dismissed by the federal district judge. The procedure of approving the settlement: Chancellor preliminarily approves it and sets it for a fairness hearing. There are some objectors, but the federal plaintiffs do not show up to object. The settlement is ultimately then approved by the court. ISSUE: So we go back out to California at the 9th Circuit, where the question is whether the 9th circuit must give full faith & credit to a Delaware state judgment purporting to release claims within exclusively federal jurisdiction. HELD: Yes. Under the full faith & credit statute, the

firs step is to check the law of the rendering state to figure out the preclusive effect of the judgment. (This is true for all full faith & credit situations because the court has to give the same faith & credit as the rendering state.) The majority & dissent agree on that step The majority tells us what Delaware law says about it, and the dissent thinks it should be remanded. Does a state court have occasion to determine the effects of its own judgment on exclusively federal issues? No. So how does the court manage this? The court says, “Because the Chancellor explicitly said ‘This settlement releases all claims, including the ones pending in California’” The second step is to figure out whether there is an exception to the full faith & credit statute in this instance. If Congress meant in the security & exchange act where they created exclusive federal jurisdiction for securities claims that those claims could not be released in state proceedings, then

that appears to be a conflict with full faith & credit statute which says federal courts must respect the judgments of the state courts. There’s a subject matter jurisdiction exception to claim preclusion. Why couldn’t plaintiffs successfully argue here that it was just invalid for the Delaware court to purport to release claims over which they did not have subject matter jurisdiction? The court says Delaware had proper SMJ over the case before ita state fiduciary duty claim. If during the negotiation of that case the parties privately agree to release other claims between them, so be it. So long as the court had SMJ over the claims pending before it, then claim preclusion still kicks in. Everything we’ve said in terms of binding the absent class members really depends on whether they were adequately represented. Your right to be adequately represented in a class action comes from due process in the constitution. If there is an argument the absent class members were not

adequately represented, they should be allowed to collaterally attack on those grounds. Ginsburg says that the issue of adequate representation is open on remand; when it goes back to the 9th Circuit they must determine whether the absent class members were 46 Source: http://www.doksinet adequately represented by the Delaware class representatives who released those federal claims. But what actually happened on remand was the 9th Circuit flip-flopped. The first panel said the issue of representation was open but the second panel says that as a matter of issue preclusion, essentially, because the issue of adequate representation had to have been fully litigated in the Delaware proceedings, that issue is closed to them for review. Other Circuits have treated it differently Whenever you certify a class under Rule 23(a) the court must find the representative is adequate. After that case comes to judgment, if a disgruntled class member wants to collaterally attack the class judgment,

their constitutional source to do that under the due process clause is to say, “I wasn’t adequately represented.” That’s what happened in Hansberry. If the argument is that once the court has determined representation is adequate then that issue has been fully litigated, decided, and necessary to the judgment, and therefore cannot be reopened as a matter of collateral attack. Should disgruntled class members be able to attack a class judgment through collateral attack? Stephenson v. Dow Chemical Co (7th Cir 2001): Case 1: Settlement structured so that people who manifested injury before 1994 would be compensated at around $3,000. People who were not yet injured would be able to receive services Case 2: Ivy case, Vietnam vets in TX file case saying their injury manifested itself after Case 1’s settlement was reached, and therefore they were not represented and they had no knowledge that they should opt out. Court says they were injured but just didn’t know it, and they are

bound to the judgment. Case 3 is Stephenson. These guys manifested injury after the 1994 cut-off date so they get nothing under settlement They argue they should be able to sue because they were not adequately represented. Supreme Court decided two cases favorable to them: AmChem and Ortiz. What aspect of those two cases is relevant? The class representatives had very diverse medical conditions from the later objectors. The conflict is between those persons who are currently injured and have an interest in getting a lot of money very soon, and those persons who have not yet manifested injury and want money to be set up for years down the road. You’d have to set up different “camps” of parties, one for each situation, but then settlement probably wouldn’t happen. Why is Stevenson not bound by the claim in suit 1? Failed 2d prong. He was not a party who was not represented; he was like Hasnberry. Causation Issue: Remember the original Agent Orange case was a (b)(3) opt-out class.

Those opt-out cases, when tried before Weinstein, were handed Summary Judgments in favor of the defendant. HYPO: Let’s say there hadn’t been a deal brokered before trial in Case 1. Goes to trial and Weinstein directs verdict against Plaintiffs on causation. In that situation, would Isaacson and Stephenson be bound by the judgment? There’s no reason why they wouldn’t be bound if on the merits the class had lost. But because it was a settled judgment, the whole issue of adequate representation and conflicts within the class becomes a basis on which to attack. Next class: We still have to do Cooper and then we’ll do collateral estoppel. 854-857, 864-877, and 787-802 After that we’ll go to handouts to do appeal and certiorari and that fun stuff. We won’t get to judicial management stuff on the syllabus. Cooper v. Federal Reserve Bank of Richmond (US 1984): Are members of the class bound by the class judgment that there is no class-wide discrimination such that they can no

longer bring individual claims of discrimination? NO, they are not. Most class actions just aggregate individual claims of class members. They are not claim precluded, but they are issue precluded: In their individual cases they will not be able to put on evidence of “pattern and practice” of the employers, because they are issue-precluded on that point because of the class action. Here’s what’s weird: If the class won on the issue of class-wide discrimination and the class members have to prove up their damages, they are not at that point allowed to bring separate cases. Employment discrimination class claims are important to distinguish from individual claims. But should this rule be exported to other areas besides employment discrimination? 47 Source: http://www.doksinet Special Preclusion Rules for Class Actions: 1. A class member is precluded from pursuing in a later suit only those claims that were or could have been asserted on behalf of the class as a whole.

Conversely, individual claims for relief that are based on grounds not generally applicable to the class survive the judgment in the class action. a. So, with employment discrimination, if I say I was individually discriminated against as a woman, that does not make a class claim. It’s based on my group membership in the group of women, but I’m not saying the whole class was discriminated against, just me. Conversely, if as a member of a class of women that sue my employer for sex discrimination based on the pattern of discriminating against women, I will be bound on the issues within that claim that are litigated, but my individual claim for personal sex discrimination will survive. b. In what other situations might this apply? Skywalks disaster case; the Hyatt Regency Skywalk collapsed. Judge certified a class for punitive damages purposes for the rescuers on the scene If that case goes to judgment on the punitive damages claim, does that mean no individual can bring a claim for

compensatory damages regarding the skywalk? No, because those individual compensatory claims are not class-wide claims. c. Any circumstance where individual clams can be separated from class-wide claims lends itself to a Cooper argument, that it is a fairness issue (you shouldn’t bind someone on their individual claims based on what happens in a class claim) and an efficiency issue (you don’t really want all the individuals intervening on their individual claims). 2. A class member cannot be bound by a judgment on class claims in a case in which she was not adequately represented. 3. Unless the issue of adequate representation was litigated and actually decided by the court in the first case, the class member may challenge adequate representation in a later collateral attack. a. So here’s the deal, the cornerstone of due process in class actions is adequate representation because you’re getting your day in court through that adequate representation. So if you’re not

adequately represented you’re not bound. But if the issue of adequate representation has been fully litigated and decided in the first case, then you cannot collaterally attack it in the second case. b. The idea is that you don’t want a representative who was once adequate but then later sold you out. Theoretically, you can litigate it to infinitiy but wher eyou’re really focused is when the case goes to settlement, and your representative has to essentially discuss the weaknesses of your case to get a settlement. ISSUE PRECLUSION Test for Issue Preclusion 1. Prior Judgment which is final [at the trial court level] and valid [in that the court had proper jurisdiction] 2. Issue in the later case must be the same as the issue in the prior case How you characterize the issue makes all the difference in the world. a. Because we’re taking issues decided in one case and exporting them to later cases, we want to make sure they were rightly decided, so as to prevent exporting an error.

We tolerate imperfect judgments in individual cases, but we don’t want them exported to other cases. We want to make sure the issue got enough attention in suit 1 to reduce the risk that it was erroneous, before we export it to suit 2. b. Make sure the issue was actually litigated Unlike claim preclusion which precludes issues that could have been litigated but weren’t, issue preclusion only precludes issues that were actually litigated. Actual litigated in the sense that evidence was presented to a factfinder Summary judgments, therefore, count. It does not cover stipulations, but you can use them as evidence c. Issue must be actually decided, and necessary to the judgment in the prior suit If the prior case has an opinion, then the opinion will tell you their findings of fact and conclusions of law. Where it gets difficult is when it’s a jury verdict and the jury just uses a general verdict, even with special interrogatories. 3. The party to be bound (or precluded) had full and

fair litigation the first time around (or a full and fair chance to litigate). Collateral estoppel is a one-way street; only the party to be bound must have been in the suit OR a. ORthe party was in privity with a party to the prior suit 48 Source: http://www.doksinet These are the necessary requirements to invoke issue preclusion / collateral estoppel. You must show EACH of them is true. But the opponent can argue against issue preclusion based on fairness factors: 1. Prior inconsistent verdicts Even if all the requirements are met you can argue there should be no collateral estoppel because there are prior inconsistent verdicts on the books. This is an effective argument because it points out the greater risk of exporting an error. 2. Foreseeability If your exposure in case 1 is limited and you cannot foresee the findings in that case could be used against you in cases where your exposure would be much greater, it is not fair to export that issue. 3. Wait-and-See Plaintiff: We

shouldn’t allow a sideline sitter to use collateral estoppel in the later case because if you’re a sideline sitter you have no risk of being bound by Suit 1, but if someone wins in Suit 1 and you can use that in Suit 2 as Offensive Non-Mutual Collateral Estoppel, then you’ve gotten the windfall without the risk of loss. a. This is similar to the 7th Cir rule that says if Case 1 is a class action versus Δ1 and C is a member of the class and opts out of the suit, C should not be able to use the class’ win against Δ1 in a later suit. Non-Mutual collateral estoppel exists where a party uses it in a later case when that party was not involved in the first case and is binding a party that was. Think about who the “Repeat Player” is and who is the “New Guy.” It’s Offensive when Plaintiffs are the “New Guy” using it against a prior Defendant. It’s Defensive when Defendants are the “New Guy” using it against a prior Plaintiff. Hardy v. Johns-Manville Sales Corp

(5th Cir 1982): District Judge who was trying to do the collateral estoppel in the E.D of Texas was famous for trying to streamline asbestos cases. He outlined what Π had to prove, and what he tried to do with his omnibus order is say that because of the prior case in which we fully litigated the issue of whether asbestos is dangerous and whether it causes mesothelioma, we should not have to relitigate those issues over and over, so Judge wants to issue the order that certain elements of Π’s case are foreclosed to the Δs by collateral estoppel. In other words, Πs after the omnibus order did not have to prove two of the elements of their claim. One set of Δs were not actually joined to the prior case. Why shouldn’t they be bound? They did not have the opportunity to fairly and fully litigate in the prior suit because they had nothing to do with the suit and they were not in privity with anyone in the suit. Πs say that because those Δs are asbestos manufacturers and as such

are in the exact same position as the previous parties in the previous case. But that isn’t bindingthere is still due process and the need for a personal day in court! Judge in Texas was using a market-share liability theory for the prior case. If you cannot bind some of the members of the industry because they weren’t parties, but you can bind those who were parties, what might future Πs do? Just file against those against whom they can get collateral estoppel. Other set of Δs deals with whether the parties to the prior case can be bound. There was a prior judgment that was final and valid. Do we have the same issue in Hardy as in Burrell? Δs say the problem is that, because the prior judgment was a jury trial, it is hard to say precisely what was actually decided and necessary to the judgment. Δs characterize the precise issue decided by Burrell very narrowly to apply only to Burrell personally. To the extent you characterize it more generally, then they run up against the

problem that they can’t tell whether the jury decided that issue; too much ambiguity. Then Δs also make 2 other arguments about why even it were the same issue it would be unfair to apply collateral estoppel to them. These are the fairness factors [see above] The Settlement Strategy: If you’re representing a Defendant who is a repeat player in a bunch of lawsuits, your big fear is that one of the cases will come to judgment for Plaintiff and all the other Πs will use it against you in collateral estoppel. So you settle all the good cases so that there is no “actual litigation” and you litigate all the cases that are weak for Plaintiff in hopes of getting collateral estoppel against Π. Should you as Δ be able to do the following: Litigate a case to a verdict, let’s say at a jury trial, but before a court enters a judgment, settle to seal the record so that the jury’s verdict cannot be used against you as collateral estoppel in a later case. (See p 881-882) The courts are

kind of all over the place on it For Thursday, we will do the Cox case. Next week we’ll do Jefferson and Michigan vs Long 49 Source: http://www.doksinet [Start of Notes from when I was absent] April 21, 2005 Ties v. Chamel – Is it possible to bind a non party who was virtually represented by a party in a prior case? Case 1: Brought by 5 black aldermen in St. Louis and a group called the AAVR against the City of St Louis This was a voting rights case where districts were redrawn. D moved for summary judgment; D submitted 4 affidavits P files back with 1 affidavit. Aldermen disagree and moved to be dismissed without prejudice Case 2: Same black Alderman and additional P (Miller P, other elected black officials). File this separate case on the exact same claims. City gets Summary Judgment in Case 1 and there is a motion to dismiss on res judciata The Court grants Summary Judgment on claim 2 b/c of res judicata. 8th Circuit agrees, but did not think that it was a claim preclusion

case, it was an issue preclusion problem. What about the Miller P who were not parties in Suit 1? Issues of privities: 1. control 2. successor in interest 3. adequate representation 8th Cir. Said in case 1 there was privity because the aldermen and AAVR were virtual P giving the Miller’s adequate representation. It was never a class action and there was never an issue of adequate representation in case 1 Court says that if one of the parties of the prior suit is so closely aligned to the interests of the parties of the subsequent suit, it can be considered the virtual representatives. How do you tell if they are virtual representatives? Two views on this: 1. Equitable view – No clear test for this, but there are guiding principles: a. Identity of interests – b. Close relationship in terms of participation or an acquiesce, or there was tactical maneuvering going on. The fact that they had the same attorney that they had in suit one as suit two, makes it look as though there was

strategy going on. c. Adequate representation – said it is satisfied as long as the party in suit one had incentive to litigate. d. Have to look at the nature of the issue – in public law cases it the court is more willing to find virtual representation instead of private suits. Absence some concept of virtual representation, you encourage wait and see litigation. 2. Technical view – there has to be an express or implied relationship that creates privity There is a preexisting relationship Notice – it was clear that the Miller P knew about Case 1 and may have even participated in the events. What about Martin v. Wilks (black/white firefighters) that would have caused problems here Coopers – When case come from the federal system, appellate courts will not take the case from lower court until that case has come to final judgment at lower court level. Final judgment: a judgment is final when it is rendered on the merits so that all that remains in ministerial. Four exceptions

to the final judgment rule as it applies to federal district court to federal appellate courts: 1. Section 1292 (handout) – There are two ways to get interlocutory appeals: a. Appeals as to injunctions – it is an appeal as of right b. 1292(b) if district judge certifies that one of its orders involves a controlling question of law as to which there is a substantial ground of difference of option and that an immediate appeal of the order would materially advance the ultimate termination of the litigation, he shall so state in writing in such order. Court of Appeals also has discretion to take the appeal 50 Source: http://www.doksinet 2. 3. 4. Can get a Writ of Mandamus (in federal court, under the Federal Writs Act) – when you get an order from the higher court to get lower courts to do something. The courts will only use this under extraordinary circumstances. You apply directly to appellate court for writ and you would have convince appellate court that there are

extraordinary circumstances with abuse of discretion. In Rule 23(f) – Says that when a class action, a request to certify a class action is denied or granted you can apply for review with court of appeals within 10 days. Court of appeals has discretion to take appeals Collateral order doctrine – applies when the lower court decision that a. conclusively determines a disputed question b. of an issue completely separate from the merits c. that would otherwise be unbelievable on appeal d. Example of this would be: Eisen paying for notice in a class action case Coopers and Liebrum – Decided before 23(f) was added in 1998. Before 23(f) you could not appeal certification unless you could get the district judge to certify your appeal or ague that decision to certify would have to fall under the Collateral Order Doctrine. What are the factors for the court of appeals: 1. If not certifying the class will kill the case Negative values case 2. Posner argument that “betting the company”

where certifying the class would put the company at risk for going out of business. For CAFA know the minimal diversity and complete diversity. Don’t worry about it beyond that handout Mass actions will not be on there. April 26, 2005 Case has to come to final judgment before it can be appealed. Supreme court does not want to reach in an have the state court do that. What is interesting, as it turns out, the final judgment rule is firmer than it is as to state courts To treat judgment’s as finals and it is really not? What is the function of the Supreme Court: 1. Ultimate interpreter of US constitution and federal law – important to make uniform law If this is the case, then you want a system where the functions are filled in. State courts are the ultimate arbiter of state law. The supreme court is almost in complete control of its own docket; Appeals are mandatory, cert is not. Power of the court comes from Art. III and Congress has some say in it There are three ways to get to

the Supremes: 1. Some cases can be started in the Supreme Court – Original and exclusive Jurisdiction – between States 2. Review of final judgments of the US courts of appeals (section 1254) – a. Have to have four votes to take cert b. Denying cert has no presidential value c. Federal Appeals court can certify questions to the Supremes, but it has happened 3 times in the last 40 years. d. If there is another case where they can consolidate it, they will take the cases and argue them together. e. Under section 1253, they Supremes have to take direct appeals from three judge district courts f. Can you argue that supreme court requires a final judgment unless irreparable harm will occur unless the court intervenes? What about having a court that would resolve circuit splits? Do we like the idea that we have regional differences between the courts. 3. Review of final judgments of state courts (section 1257) Cox Broadcasting Corp. v Cohn – reporter sees rape victims name in court,

and the victims family is suing Cox under Georgia law because it is a crime to publish name of rape victim. Georgia supreme court says that this is a violation of privacy that creates a public policy of Georgia that protects the names of rape victims. This issue went through Georgia interlocutory appeals Has to be the highest court in the state where the decision could be had; does not mean state supreme court. Has to be a final judgment. 51 Source: http://www.doksinet Supremes IDs 4 situations where it is willing to take cert from a state court despite the fact that there are further proceedings in the state court and they are just more than ministerial. 1. When there is no doubt as to the outcome of further proceedings in state court 2. When the federal law issue will survive the further state proceedings and will warrant review no matter what the outcome. 3. Now or never – Later federal review won’t be possible This happens when someone will lose their right to appeal. 4.

Cox itself: a. Party seeking review might prevail on state law grounds at trial which would prevent later review AND b. Decision now might end the case AND c. There is an important federal issue involved Jefferson – Jefferson’s family claims that ms. Jefferson was not saved in a fire because she was black Under 1983 you can only bring a claim if there is a state survival statutes. Damages are limited to punitive, with the supreme court case that you can’t get damages from putative. Supremes say that judgment is not final [End of Notes from when I was absent] Doctrine of Adequate & Independent State Grounds: The United States Supreme Court will not hear a case if a decision of the state’s highest court is supported by a state law rationale that is independent of federal law and of adequate sustain the result. SC should show respect to the state b/c state is the ultimate interpreter of its own law. This is also to avoid the unnecessary constitutional decisions. Avoids

hypothetical opinions. If the SC decision won’t change the result because it rests separately on state court grounds then whatever SC says about federal law will be essentially advisory. Seems to be a function of the case & controversy requirement. You’ll find this where reversal won’t change the decision. Example: State SC finds that a state statute violates both the state constitution and the federal constitution. Can the Court review that case? NO, because even if the SC disagrees with the state court about whether the statute violates the federal constitution and therefore reverses on that ground, it won’t matter, b/c state court also found that it violates the state constitution. Example: State SC finds that a state statute does not violate either the state const. or the fed const, can the SC take review? YES, because it’s possible for the SC to change the result in that case by finding the statute does violate the U.S Constitution. Michigan v. Long (US 1983): Did

the seizure of marijuana violate the 4th Amendment rights? Trial court said it didn’t; State SC said it did. The executive branch of MI is appealing to the US SC to change what its judiciary has done with regard to the 4th Amendment. There may be a separation of powers problem State SC cites twice to the provision of the MI constitution that is parallel to the US 4th Amendment. They ultimately hold that it violates the 4th Amendment and Michigan constitution. But the references to the MI constitution are casual. If it was clear the state SC was relying on the state constitution to find the search illegal, then there would be an adequate state basisbut it’s not clear that the grounds were independent. The problem is that the state wasn’t clear on whether they were reversing the trial court’s decision based just on the 4th Amendment, or if they were doing so in reliance on the state constitution. Before MI v. Long there were 4 ways to handle it when there was ambiguity as to

whether it rested on state or federal grounds: 52 Source: http://www.doksinet 1. 2. 3. 4. Ask state court to clear it up (similar to Pullman abstention or certification) Supreme Court ascertains what state law is to try to make a guess as to the basis of the lower court’s decision Presume that it rests on state law Presume that it rests on federal law After Michigan v. Long, the Court adopts a bright-line rule of presuming that it rests on federal law The holding of MI v. Long is that when there is ambiguity about whether the state court decisions rests on state or federal grounds, the Supreme Court will presume that it rests on federal grounds rather than on independent and adequate state grounds. This creates the plain statement rule. State courts now know that if they wish to insulate their opinion from US SC review (as long as there’s a legitimate basis of state law to do so) should explicitly state that in their opinion. If the independent & adequate doctrine is a

matter of jurisdiction, shouldn’t the Court presume that the decision rests on state grounds? It’s reversed; we presume that federal jurisdiction exists unless a state court grabs it back through the explicit language of the opinion. Stevens says in MI v. Long: Say the Finnish authorities arrest an American & try him and turn him loose on an erroneous interpretation of American law. Why should we care? Where is the harm? If MI grants to one of its own citizens a higher degree of protection under the federal constitution, why should we care? We should only care about the cases where states are giving less protection to citizens that we would give. 53