Hello Lawyerist readers! Apparently a recent post there referenced this blog as a Trial Practice Blog Worth Bookmarking. I’m honored.

The link at Lawyerist pointed to this category page, which hasn’t been directly updated since March 2011 because this blog is in the (very long) process of transitioning to new blogging software. That’s why there are way too many category pages on the right sidebar and why this category hasn’t been updated since March. There are plenty of posts since then, though, just click the Litigation & Trial logo at the top.

If you’re looking for law practice advice, you might want to check my Business of Law category, which has recent posts like Young Lawyer’s Guide To Legal Marketing (And Snark Mentoring). Or you can try skimming the old Trial category for posts geared more directly towards trial law.

You might also like some recent posts like Never Take A Judge’s Advice On How To Write A Brief and Panda Blogging Is The New Legal Treatise. Or posts like Young Lawyers: Be Careful Emulating Great Trial Lawyers and Always Draft Angry Briefs. Never File Them and Philosophy Explains How Legal Ethics Turn Lawyers Into Liars. There’s also some nuts and bolts of litigation posts like The Scary New World Of E-Discovery Artificial Intelligence In Big Lawsuits.

As you’ve probably already read (see, e.g., WSJ Law Blog), yesterday the Supreme Court held in Synder v. Phelps that the First Amendment precluded Synder, father of deceased soldier Matthew Synder, from suing Fred Phelps, a hate-monger who protests funeral’s soldiers with a variety of bigoted and incoherent slogans, for intentional infliction of emotional distress.

I know what I’m supposed to write. I, like most attorneys I know, am a strong defender of the First Amendment. Free speech is essential to a free democracy. I’m suppose to cheer the opinion and pat myself on the back for being so tolerant that I want odious, malicious, and incoherent speech to have the same protections as genuine contributions to society. Most of the major newspapers already did that, as did most legal bloggers.

But I read the opinion with a sense of dread. The Supreme Court didn’t affirm the importance of free speech and didn’t strengthen protections for writers, activists, speakers, or even legitimate protests on public issues; instead, it merely gutted civil accountability for those who target private citizens for their own amusement and marketing purposes.

The Supreme Court claimed that its holding was “narrow.” Slip op., 14. It’s "narrow" in terms of the First Amendment, since it does nothing to enhance public debate and creates no new protections in favor of when and where a person may speak, but isn’t narrow in terms of destroying civil torts like intentional infliction of emotional distress. If a line is not drawn here — at deliberately targeting the grieving parents of a soldier while they buried their son — then there is no line. Malicious speech and conduct that would for hundreds of years result in liability for intentional infliction of emotional distress becomes, as Justice Alito described in his dissent, "immunized simply because it is interspersed with speech that is protected." Dissent, 9.

That’s the take-home message from the Supreme Court’s opinion, which reversed a jury trial in favor of Synder and precluded any further factual hearing: all speech, no matter how empty or malicious, no matter the subject, no matter the audience, is protected. For example, the Supreme Court found it very important that the Westboro church protesters were on a public space next to a public road:

Simply put, the church members had the right to be where they were.  Westboro alerted local authorities to its  funeral protest and fully complied with police guidance on where the picketing could be staged.  The picketing was conducted  under police supervision some 1,000 feet from the church, out of the sight of those at the church.  The protest was not unruly; there was no shouting, profanity, or violence. … 

So what? Can an ex-boyfriend stand on the sidewalk outside of his ex-girlfriend’s place of business and calmly defame her so long as he makes a trivial effort to make derogatory remarks about women in general and thus cloak himself in the veil of free speech by claiming he’s commenting on gender relations? Can a bigot stand in a park across the street from the place of worship and politely damn everyone who goes in to hell and blame them for all the ills of the world and the deaths of their loved ones because, on some shallow level, he’s expressing his religious beliefs? Can the deranged threaten others with death so long as they toss in a few words about the marginal tax rate?

I’ve noticed that most children’s athletic fields are on public land, next to public roads. Can I manufacture some media attention and troll the public with offensive, sexually-descriptive signs condemning the kids to hellfire as long as I later claim I was expressing my preference for soccer over baseball or vice versa? Apparently, if I do, there will be nothing anyone can do about it.

Truth is, as Justice Alito aptly noted, Westboro could have protested almost anywhere in America:

They could have  picketed the United States Capitol, the White House, the Supreme Court, the Pentagon, or any of the more than 5,600 military recruiting stations in this country.  They could have returned to the Maryland State House or the United States Naval  Academy, where they had been the day before.  They  could have selected any public road where pedestrians are allowed.  (There are more than 4,000,000 miles of public roads in the United States.) They could have staged their protest in a public park. 

They chose not to. They chose not to go where people would listen to their message. Instead, Westboro chose to "speak" in a manner calmly and maliciously calculated a means to ensure the ideas would be offensive and pointless; indeed, their primary defense at trial was that the people at the funeral couldn’t even hear or see them. Westboro freely admitted that they had no intention or expectation that the “audience” of their “free speech” — the grieving family members — would consider or accept their message.

That alone disqualifies them from First Amendment protection under Supreme Court precedent. The purported “audience” here — that is, the reason we grant the speech First Amendment protection at all, since we presume the speech is given to further democracy — was actually a targeted victim. There being no real audience, there is no free speech protection. Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc., 472 U. S. 749, 762 (1985)(speech solely for individual’s purposes with no public audience is not protected by First Amendment).

Far from contributing to the public discourse, the sole purpose Westboro had in protesting the funeral was to manufacture outrage for publicity. And that is what the tort of intentional infliction of emotional distress is meant to cover: situations in which a person intentionally injured another through outrageous conduct. As summarized by Justice Alito:

This is a very narrow tort with requirements that “are rigorous, and difficult to satisfy.”  W. Keeton, D. Dobbs, R.  Keeton, & D. Owen, Prosser and Keeton on Law of Torts  §12, p. 61 (5th ed. 1984).  To recover, a plaintiff must show that the conduct at issue caused harm  that was truly  severe.  See Figueiredo-Torres v. Nickel, 321 Md. 642, 653,  584 A. 2d 69, 75 (1991) (“[R]ecovery  will be meted out sparingly, its balm reserved for  those wounds that are truly severe and incapable of healing themselves” (internal quotation marks omitted));  Harris v.  Jones, 281 Md. 560, 571, 380 A. 2d 611, 616 (1977) (the distress must be“ ‘so severe that no reasonable man could be expected to endure it’ ” (quoting Restatement (Second) of Torts §46, Comment j (1963–1964))). 

A plaintiff must also establish  that the defendant’s conduct was  “ ‘so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized  community.’ ”  Id., at  567, 380 A. 2d, at 614 (quoting Restatement (Second) of Torts §46, Comment d).

Alito was right. The majority of the Supreme Court here, however, said that it didn’t matter if Westboro admittedly had nothing to offer the public debate, and instead was merely trying to generate free publicity and laugh to themselves over a cruel joke by maliciously causing emotional distress to wholly innocent victims. In essence, the Supreme Court held: if you are not otherwise breaking the law, then you are free to say and do whatever you want, without criminal or civil responsibility for the damage you cause.

So let’s have a toast to the trolls, the liars, the stalkers, the bigots, and any other people who admittedly have nothing to offer society except malice for PR purposes: the Supreme Court doesn’t think we have a right to enforcement of court orders, only sometimes thinks we should have the right not to be entrapped and needlessly killed by police, but is darned certain that you have the right to manufacture outrage by tormenting the families of dead soldiers for publicity.


I first blogged about the Lycoming Engines class action case back in April 2009, when the Third Circuit reversed Judge Savage’s order granting certification on plaintiffs’ unjust enrichment and implied warranty of merchantability claims. As I wrote then:

A model of efficiency, class actions are not.

I don’t have an easy answer for how class actions should be prosecuted and evaluated. Judge Savage and the Appellate Judges (Ambro, Weis and Van Antwerpen) clearly did the best they could; fact is, class actions are complicated, time-consuming, expensive and just plain hard to litigate and to decide. It’s not uncommon to bounce back and forth between the trial court and the appellate court several times prior to even beginning discovery, much less trial. Then comes the "real" post-trial appeal from a final order.

Plaintiff’s complaint was filed July 10, 2006, more than two-and-a-half years ago. Plaintiff and his lawyers have gone essentially nowhere since then, and still have years of litigation ahead, all at substantial time and expense to the plaintiff’s counsel, who likely represents plaintiff on a contingent fee, a fee that will depend not only on winning, but on the judge’s own evaluation of whether the claimed fee is fair and reasonable. All years down the road.

The plaintiffs alleged that their airplane engines were manufactured by Lycoming Engines with defective crankshafts that can cause a total loss of engine power and in-flight engine failures, and that Lycoming knew of and concealed the defect that prevents the crankshafts from functioning as intended. The Third Circuit reversed

Here we are, almost two years later, and Judge Savage has finally finished the Herculean task given to him by the Third Circuit of surveying the laws of all fifty states with regard to unjust enrichment and breach of the implied warranty of merchantability, determining whether there were actual or real conflicts between those laws, where there was such a conflict, assess which state has the greater interest in the application of its law to determining the liability for defective aircraft crankshafts that were allegedly more vulnerable to stresses in their ordinary and foreseeable use, and considering whether applying that law to all plaintiffs and class members violates the Due Process and Full Faith and Credit Clauses through individualized scrutiny of the claims asserted by each member of the plaintiff class.

The class action attorneys representing the plaintiffs saw the writing on the wall, so voluntarily dropped their unjust enrichment claims. Unjust enrichment is a strange claim even within one state, much less across all fifty.

As I noted back in my original post, I thought that the implied warranty of merchantability claims would survive the second trip through the District Court. After all, as the Court noted last week,

All states, except Louisiana, have adopted § 2-314 of the Uniform Commercial Code (‘U.C.C.’), which provides that unless excluded or modified, a warranty that the goods are merchantable is implied in a contract for sale. 10 U.C.C. § 2-314 (2003). There are, nevertheless, significant differences among the states regarding the application of implied warranty of merchantability law. The most significant is the privity requirement. 11 Thirty-one states, including Pennsylvania, and the District of Columbia, do not require privity of contract to recover for breach of the implied warranty of merchantability where only economic damages are involved. 12 Eighteen states require privity between the parties in cases involving purely economic loss. 13 Thus, we must analyze whether this conflict between the laws of the privity states and Pennsylvania   is true or false.

FOOTNOTES …11 In addition to privity, there are differences among the states regarding the application of implied warranty of merchantability law with respect to disclaimer requirements, limitation of liability and available defenses. We address these differences in the later section discussing manageability of this case as a class action.

Powers v. Lycoming Engines, 2011 U.S. Dist. LEXIS 12946, at *14–16 (E.D. Pa. Feb. 9, 2011)(some footnotes omitted).

There are differences, sure, but not irreconcilable ones, except for the privity states, since the plaintiffs here weren’t in privity with the defendant, a manufacturer of aircraft parts rather than the actual seller of the airplanes. The plaintiffs tried to deal with that by recommending the Court split the case into privity and non-privity classes.

But the District Court thought otherwise:

Dividing the plaintiffs into two subclasses, one for plaintiffs from privity states and another for those from non-privity states, does not solve the problem. There are various differences among the states’ laws affecting entitlement to disclaim the warranty, the extent of the warranty, limitation of liability defenses and damages. Thus, the need for individual inquiry will remain.

For example, class members who purchased the aircraft or engines in states requiring notice of breach as a prerequisite to suit must establish that they provided notice to Lycoming. Even though most states require notice, what suffices as notice is not the same among the states. For instance, those who   purchased their planes in Alaska and Arizona will satisfy the notice requirement by the filing of the complaint. Those who purchased their planes in Alabama, Arkansas and Illinois must establish notice by informing the manufacturer of the defect by writing a letter or calling its place of business or corporate headquarters because later filing a complaint will not suffice.

There are multiple defenses, such as assumption of the risk, hindrance of the contract, misuse of the product, and the validity of the warnings, that exist in some states and not others. In some cases, these defenses will be available to Lycoming. In others, they will not. Because not all the states recognize the same defenses, determining whether the defense applies to a particular class member and whether the defense bars the class member’s action is necessarily individualized.

Even though we know little about the individual named plaintiffs, we can be certain that there are factual circumstances and legal differences among them and the putative class members that preclude a finding of predominance. The plaintiffs in these cases share the same law with some class members who purchased their planes or engines in states   with similar merchantability laws, but do not share the law with those class members who bought their planes or engines in states that have conflicting laws.

In short, there are a multitude of legal standards that must be applied to each class member. Factual differences are innumerable. Where each putative class member resides is not known. Where they purchased the aircraft or engine is not known. Thus, without engaging in an individual fact-finding inquiry, we cannot determine which state’s law applies to each putative class member.

Powers v. Lycoming Engines, 2011 U.S. Dist. LEXIS 12946, at *33–35 (E.D. Pa. Feb. 9, 2011). Certification of class action status thus denied.

Nearly five years after it was filed, and after a trip up to and down from the appellate court, the case is effectively over, without a dime to the plaintiffs’ attorneys and without even beginning an investigation into the merits of plaintiffs’ claims. Maybe a handful of aircraft owners will bring direct claims, but that’s doubtful: given the six figures or more it would take to prosecute the case, it’s likely not worth bringing the case at all.

I suppose the plaintiffs’ attorneys could appeal — and I think the District Court gave plaintiffs the short shrift in discussing those "multitude of legal standards" that supposedly would apply — but the odds of that winning are virtually nil. It’s usually a one-way street to the appellate court: they’ll happily reverse a district court granting certification, but rarely reverse a district court denying it.


Like I’ve written before, we have a lot of consumer protection laws on the books, but outside California they’re often hollow promises, since they’re unenforceable.

Becoming a doctor is not easy, cheap or quick. Work hard in college, four years of medical school, and then you’re shuttled through a blatantly illegal* residency matching program into an apprenticeship with long hours and low pay. If you’re lucky, three years of that apprenticeship and you’re out. If you’re not, hang on for four, five, six, seven, or eight more years.

(* Why “blatantly illegal?” Because the residency matching program is a flagrant violation of antitrust laws. Once trial lawyers realized that and started suing on behalf of medical students and residents, hospitals had Congress pass a specific antitrust exemption for residency programs.)

Unlike law school — increasingly revealed to be a losing proposition for most, with exploding admissions and imploding jobs — slogging it through seven to twelve years of medical school and residency tends to work out in the end. As the Bureau of Labor Statistics notes, “physicians practicing primary care had total median annual compensation of $186,044, and physicians practicing in medical specialties earned total median annual compensation of $339,738.” That latter number is so high because of “cartel barriers” imposed by the specialists’ organizations; it’s good to be self-regulating.

But it’s still a tough slog getting there, and a poorly paying one, too. Medical residents earn $30k–$60k annually. That’s not poverty (statistically it’s middle class, since the median household income for the United States is around $50k), but it’s also a bruising job: 60 to 80 hours (often more, though the hospitals fudge the records to deny it) a week, often on irregular schedules, and always at the whim of notoriously unsympathetic attending physicians and hospital administrators.

Hospitals, though, can’t get enough of them. Medical residents are like legal associates: cash cows which, through the joys of leverage, permit a single attending/partner to delegate profitable work for a half-dozen or more residents/associates. The best part for hospitals? Medicaid pays hospitals $9.5 billion annually to train residents. Free labor that can be billed at premium prices.

But nobody, not the hospital, the attending physicians, or the resident thinks of them as being “employees” but rather “students,” or more properly apprentices. They’re supervised at all times and are deliberately rotated through unusual tasks for the purpose of training.

Which raises a question: should medical residents pay payroll taxes like “employees” or should they be exempt like “students?” As the Supreme Court described on Monday in Mayo Foundation for Medical Education and Research v. United States:

Congress funds Social Security by taxing both employers and employees under FICA on the wages employees earn. … Congress has, however, exempted certain categories of service and individuals from FICA’s demands. As relevant here, Congress has excluded from taxation “service performed in the employ of . . . a school, college, or university . . . if such service is performed by a student who is enrolled and regularly attending classes at such school, college, or university.” §3121(b)(10) (2006 ed.).

It’s unfortunately a truism that, when Congress passes a law, that law will raise more questions than it answers. Medical residents are nominally in their jobs for educational, not employment, reasons — which is why we pay hospitals $9.5 billion a year to educate them, right? — and it sure seems that medical residents are “enrolled and regularly” attending their residency programs and that they are paid for a “service performed in the employ of . . . a school, college, or university.” If they’re not they’re to learn, why are we paying for them to be there?

The Department of the Treasury disagreed:

On December 21, 2004, the Department adopted an amended rule prescribing that an employee’s service is “incident” to his studies only when “[t]he educational aspect of the relationship between the employer and the employee, as compared to the service aspect of the relationship, [is] predominant.” Id., at 76408; Treas. Reg.§31.3121(b)(10)–2(d)(3)(i), 26 CFR §31.3121(b)(10)–2(d)(3)(i) (2005). The rule categorically provides that “[t]he services of a full-time employee”—as defined by the employer’s policies, but in any event including any employee normally scheduled to work 40 hours or more per week—“are not incident to and for the purpose of pursuing a course of study.” 69 Fed. Reg. 76408; Treas. Reg.§31.3121(b)(10)–2(d)(3)(iii), 26 CFR §31.3121(b)(10)–2(d)(3)(iii) (the full-time employee rule). The amended provision clarifies that the Department’s analysis “is not affected by the fact that the services performed . . . may have an educational, instructional, or training aspect.” Ibid.

Medical residents typically “work 40 hours or more per week,” but the very nature of what they do is — at least according to residents themselves, the hospitals which use them, and the government which subsidies them — more “educational” than it is “service.”

In any event, it sure seems like an issue worth investigating. The Treasury Department didn’t care; 40 hours a week and you’re an “employee,” regardless of the nature of the work, no apprenticeship about it.

The Mayo Clinic sued, arguing:

Mayo objects, however, to the Department’s conclusion that residents who work more than 40 hours per week categorically cannot satisfy that requirement. Because residents’ employment is itself educational, Mayo argues, the hours a resident spends working make him “more of a student, not less of one.” Reply Brief for Petitioners 15, n. 3 (emphasis deleted). Mayo contends that the Treasury Department should be required to engage in a case-by-case inquiry into “what [each] employee does [in his service] and why” he does it. Id., at 7. Mayo also objects that the Department has drawn an arbitrary distinction between “hands-on training” and “classroom instruction.” Brief for Petitioners 35.

And that’s where the Supreme Court has a chance to teach the Mayo Clinic something.

See, non-lawyers, law students, and even some lawyers are under the misapprehension that a court, particularly the Supreme Court, is under some obligation to care about the cases that come before it, that, if presented with a compelling enough argument, those courts will at least consider the argument and respond in depth.

Not so:

We disagree. Regulation, like legislation, often requires drawing lines. Mayo does not dispute that the Treasury Department reasonably sought a way to distinguish be-tween workers who study and students who work, see IRS Letter Ruling 9332005 (May 3, 1993). Focusing on the hours an individual works and the hours he spends in studies is a perfectly sensible way of accomplishing that goal. The Department explained that an individual’s service and his “course of study are separate and distinct activities” in “the vast majority of cases,” and reasoned that “[e]mployees who are working enough hours to be considered full-time employees . . . have filled the conventional measure of available time with work, and not study.” 69 Fed. Reg. 8607. The Department thus did not distinguish classroom education from clinical training but rather education from service. The Department reasonably concluded that its full-time employee rule would “improve administrability,” id., at 76405, and it thereby “has avoided the wasteful litigation and continuing uncertainty that would inevitably accompany any purely case-by-case approach” like the one Mayo advocates, United States v. Correll, 389 U. S. 299, 302 (1967).

Litigators, appellate lawyers, and trial lawyers have all been there. You spend a lot of time thinking through and researching an issue, spend years fighting the case up and down on an issue that not only seems simple, but obvious — after all, other than medical residents, what category of students work 40 hours or more per week for their schools? It seems like a “rule” designed solely to tax medical residents — just to have a court, sometimes a Supreme Court, brush you aside in a paragraph brimming with ponderous assertions like “The Department thus did not distinguish classroom education from clinical training but rather education from service” that mask the real complexity of the underlying issues and the disparate nature of the rule.

Plenty of humanities and science PhD students spend more than 40 hours a week as workhorses filling in the teaching and publishing duties of their tenured advisers, but there aren’t any customers around to see it, so it’s never considered “work” even though much of it has less educational value than a medical residency.

I thought the Mayo v. U.S. opinion might some value to lawyers going forward, since it purports to clarify that court deference to an agency interpretation of a statute is governed by Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) rather than National Muffler Dealers Assn., Inc. v. United States, 440 U.S. 472 (1979). In short, under National Muffler, it matters when and why an agency interpreted the statute a particular way (and if the agency had been taking inconsistent positions in the past), whereas under Chevron neither of those issues matter. But the Supreme Court didn’t even squarely say which one was right, it just implied that Chevron seemed closer to the mark:

Although we have not thus far distinguished between National Muffler and Chevron, they call for different analyses of an ambiguous statute. Under National Muffler, for example, a court might view an agency’s interpretation of a statute with heightened skepticism when it has not been consistent over time, when it was promulgated years after the relevant statute was enacted, or because of the way in which the regulation evolved. … 

Under Chevron, in contrast, deference to an agency’s interpretation of an ambiguous statute does not turn on such considerations. We have repeatedly held that “[a]gency inconsistency is not a basis for declining to analyze the agency’s interpretation under the Chevron framework.” National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 981 (2005); accord, Eurodif S. A., supra, at ___ (slip op., at 10). We have instructed that “neither antiquity nor contemporaneity with [a] statute is a condition of [a regulation’s] validity.” Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 740 (1996). And we have found it immaterial to our analysis that a “regulation was prompted by litigation.” Id., at 741. Indeed, in United Dominion Industries, Inc. v. United States, 532 U. S. 822, 838 (2001), we expressly invited the Treasury Department to “amend itsregulations” if troubled by the consequences of our resolution of the case.

None of that, though, is inconsistent with the actual analysis National Muffler:

In determining whether a particular regulation carries out the congressional mandate in a proper manner, we look to see whether the regulation harmonizes with the plain language of the statute, its origin, and its purpose. A regulation may have particular force if it is a substantially contemporaneous construction of the statute by those presumed to have been aware of congressional intent. If the regulation dates from a later period, the manner in which it evolved merits inquiry. Other relevant considerations are the length of time the regulation has been in effect, the reliance placed on it, the consistency of the Commissioner’s interpretation, and the degree of scrutiny Congress has devoted to the regulation during subsequent re-enactments of the statute.

Which makes me wonder why the Supreme Court considered the case at all. The government had won in the Court of Appeals on the exact same grounds, grounds the Supreme Court merely affirmed 8–0 in a terse, uninformative opinion that unsettled a largely settled question about agency deference. Like I asked before, Do Lawyers And Judges Still Look To The Supreme Court For Guidance?

It seems like Supreme Court is trying to make the answer “no.”


If you’re a reader of this blog, you’re undoubtedly familiar with Bell Atlantic v. Twombly and Ashcroft v. Iqbal, a pair of Supreme Court cases which altered the pleading standards applicable to civil cases filed in federal court.

Defense lawyers have jumped all over those two opinions in an attempt to dismiss lawsuits — particularly complex commercial class actions, like antitrust cases — before any discovery can be taken. Every lawsuit, they claim, no matter how detailed and compelling, is "implausible" under Twombly and Iqbal. I taught CLEs to help other trial lawyers defeat those arguments.

Back when the Iqbal opinion first came out, I wasn’t impressed. Sure, the Supreme Court added the word "plausible" to the Rule 8 standard, but frankly I didn’t think Twombly or Iqbal would make Rule 8 and Rule 12(b)(6) any more dispositive than they already were. Before either of those cases were decided, if a judge read a plaintiff’s complaint and thought that the claim was "implausible," they would dismiss it under Fed.R.Civ.P. 12(b)(6) for failing to state a claim upon which relief could be granted. Twombly and Iqbal simply codified a practice that was already widespread in the federal judiciary.

That’s not to say I think the opinions do nothing — by way of their vague, ambiguous and amorphous language, they confuse a lot of judges into arbitrarily deeming certain allegations to be "conclusions" instead of "facts" (and even Judge Posner can’t figure out the "plausibility v. probability" distinction) — but the underlying legal principles are the same.

I said as much at the time. Time has proven me correct.

Almost exactly a year ago I posted Second Circuit Revives Digital Music Price-Fixing Case, Takes A Bite Out Of Twombly, noting a Second Circuit opinion which held:

Although the Twombly court acknowledged that for purposes of summary judgment a plaintiff must present evidence that tends to exclude the possibility of independent action, 550 U.S. at 554, and that the district court below had held that plaintiffs must allege additional facts that tended to exclude independent self-interested conduct, id. at 552, it specifically held that, to survive a motion to dismiss, plaintiffs need only “enough factual matter (taken as true) to suggest that an agreement was made,” id. at 556; see also 2 Areeda & Hovenkamp § 307d1 (3d ed. 2007) (“[T]he Supreme Court did not hold that the same standard applies to a complaint and a discovery record . . . . The ‘plausibly suggesting’ threshold for a conspiracy complaint remains considerably less than the ‘tends to rule out the possibility’ standard for summary judgment.”).

Defendants next argue that Twombly requires that a plaintiff identify the specific time, place, or person related to each conspiracy allegation. This is also incorrect. The Twombly court noted, in dicta, that had the claim of agreement in that case not rested on the parallel conduct described in the complaint, “we doubt that the . . . references to an agreement among the [Baby Bells] would have given the notice required by Rule 8 . . [because] the pleadings mentioned no specific time, place, or person involved in the alleged conspiracies.” 550 at 565 n.10. In this case, as in Twombly, the claim of agreement rests on the parallel conduct described in the complaint. Therefore, plaintiffs were not required to mention a specific time, place or person involved in each conspiracy allegation. 

The Second Circuit’s opinion was significant. The case was right up Twombly‘s alley — an allegation of an illegal agreement in violation of antitrust laws, the details of which were still known only to the defendants — and so the Second Circuit’s reinstatement of the case dealt a powerful blow to the defense lawyers who had been arguing that Twombly and Iqbal had slammed the courthouse shut on plaintiffs who couldn’t prove their whole case before even filing it.

The record companies in that case weren’t inclined to throw in the towel, so they filed a petition for certiorari to the Supreme Court arguing, as you would imagine, that the Second Circuit failed to follow Twombly and Iqbal.

A funny thing happened yesterday. Tucked in among pages and pages of summary orders at the Supreme Court was this:

The petition for a writ of certiorari is denied. The Chief Justice and Justice Sotomayor took no part in the consideration or decision of this petition.

The Second Circuit’s opinion thus stands firm. Even after Twombly and Iqbal, all a plaintiff needs to allege, even in a complex antitrust case, is “enough factual matter (taken as true) to suggest" the elements of the claim.

That’s the same as the Third Circuit recently held in In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 314 (3d Cir. 2010) and later applied to all cases, including complex cases, in W. Penn Allegheny Health Sys. v. UPMC, No. 09-4468, (3d Cir. November 29, 2010)(precedential).

In short, the Circuit Courts have taken a hard look at Twombly and Iqbal and have rejected the numerous attempts by big corporations to slam the courthouse doors shut on meritorious cases, and the Supreme Court hasn’t stopped those Courts from setting the record straight.

In celebration, below the fold are some plaintiff-friendly precedential opinions over the last year in various Courts of Appeals (in addition to the Second Circuit and Third Circuit opinions above). 

Continue Reading Another Twombly/Iqbal Victory for Plaintiffs: SCOTUS Denies Certiorari for Digital Music Price-Fixing Case

At Blawgletter:

The U.S. Supreme Court today granted review of a Ninth Circuit ruling that allowed a class of California women to pursue sex discrimination claims against Walmart. 

Of course, if you’re reading this legal blog, you probably already knew that. So let’s dive a bit deeper, per Blawgletter:

The Court both limited and expanded review.  Walmart’s petition presented two questions, only the first of which the Court will address:

I.  Whether claims for monetary relief can be certified under Federal Rule of Civil Procedures 23(b)(2) — which by its terms is limited to injunctive or corresponding declaratory relief — and, if so, under what circumstances.

II.  Whether the certification order conforms to the requirements of Title VII, the Due Process Claus, the Seventh Amendment, the Rules Enabling Act, and Federal Rule of Civil Procedure 23.

The Court added the following question:  "Whether the class certification ordered under Rule 23(b)(2) is consistent with Rule 23(a)."

You can see Walmart’s cert petition here, courtesy of Scotusblog.com.

The Court’s ruling in Dukes will likely settle a split in the courts of appeals over whether and when courts may certify class actions that seek money together with injunctive or declaratory relief.  Some circuit courts, such as the Second and the Ninth, tend to hold that even a claim for big monetary relief can fit within the Rule 23(b)(2) framework so long as the class also seeks serious injunctive and declaratory relief.  Other circuits, notably the Fifth, almost categorically disallow classes where the plaintiffs ask for any cash other than as purely incidental relief.

Drug and Device Law has a long explanation of the Rule 23(b)(2) "equity" versus "law" issue. I recommend you read their post, too.

As a general matter, plaintiffs’ lawyers do not like to see the Supreme Court grant certiorari of Ninth Circuit orders, particularly not those orders which affirmed certification of a class action. Four members of the Supreme Court are outright hostile to the rights of employees and consumers; all they need is one Justice on their side (typically Justice Kennedy) and they can dramatically shaped the law to deny relief.

So we’re not excited about this development, though I’m sure the Drug and Device Law folks are, since they represent big businesses, typically pharmaceutical manufacturers.

But there’s some hope here. Note this part of Drug and Device Law’s argument:

This section of Rule 23 is relatively old, dating from 1966, so it frames the injunctive vs. money distinction somewhat archaicly in terms of the distinction between "law" and "equity."  In the olden days, almost a century ago, there were two different sets of courts, one for telling people what they could and couldn’t do, and the other for telling them what they had to pay, if anything.  The first courts were "equity" and the second set was "law."

I must respectfully dissent; some form of money damages are indeed "equitable." Let me give you an example.

For years, the Supreme Court has struggled with a part of the Employee Retirement Income Security Act (ERISA) which allows for equitable damages. § 502(a)(3) of ERISA states, in pertinent parts:

Persons empowered to bring a civil action. A civil action may be brought … by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this title or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this title or the terms of the plan;

The Supreme Court has twice affirmed that “the term ‘equitable relief’ in § 502(a)(3) must refer to ‘those categories of relief that were typically available in equity.’” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 210 (2002)(quoting Mertens v. Hewitt Associates, 508 U.S. 248, 256 (1993), emphasis in Mertens).

But what was "typically" available in equity? Consider Sereboff v. Mid Atlantic Medical Services, 547 U.S. 356 (2006):


In Mertens v. Hewitt Associates, 508 U. S. 248 (1993), we construed the provision to authorize only "those categories of relief that were typically available in equity," and thus rejected a claim that we found sought "nothing other than compensatory damages." Id., at 256, 255. We elaborated on this construction of § 502(a)(3)(B) in 362*362 Great-West Life & Annuity Ins. Co. v. Knudson, 534 U. S. 204 (2002), which involved facts similar to those in this case. Much like the "Acts of Third Parties" provision in the Sereboffs’ plan, the plan in Knudson reserved "`a first lien upon any recovery, whether by settlement, judgment or otherwise,’ that the beneficiary receives from [a] third party." Id., at 207. After Knudson was involved in a car accident, Great-West paid medical bills on her behalf and, when she recovered in tort from a third party for her injuries, Great-West sought to collect from her for the medical bills it had paid. Id., at 207-209.

In response to the argument that Great-West’s claim in Knudson was for "restitution" and thus equitable under § 502(a)(3)(B) and Mertens, we noted that "not all relief falling under the rubric of restitution [was] available in equity." 534 U. S., at 212. To decide whether the restitutionary relief sought by Great-West was equitable or legal, we examined cases and secondary legal materials to determine if the relief would have been equitable "[i]n the days of the divided bench." Ibid. We explained that one feature of equitable restitution was that it sought to impose a constructive trust or equitable lien on "particular funds or property in the defendant’s possession." Id., at 213. That requirement was not met in Knudson, because "the funds to which petitioners claim[ed] an entitlement" were not in Knudson’s possession, but had instead been placed in a "Special Needs Trust" under California law. Id., at 214, 207. The kind of relief Great-West sought, therefore, was "not equitable—the imposition of a constructive trust or equitable lien on particular property—but legal—the imposition of personal liability for the benefits that [Great-West] conferred upon [Knudson]." Id., at 214. We accordingly determined that the suit could not proceed under § 502(a)(3). Ibid.

That impediment to characterizing the relief in Knudson as equitable is not present here. As the Fourth Circuit explained below, in this case Mid Atlantic sought "specifically 363*363 identifiable" funds that were "within the possession and control of the Sereboffs"—that portion of the tort settlement due Mid Atlantic under the terms of the ERISA plan, set aside and "preserved [in the Sereboffs’] investment accounts." 407 F. 3d, at 218. Unlike Great-West, Mid Atlantic did not simply seek "to impose personal liability . . . for a contractual obligation to pay money." Knudson, 534 U. S., at 210. It alleged breach of contract and sought money, to be sure, but it sought its recovery through a constructive trust or equitable lien on a specifically identified fund, not from the Sereboffs’ assets generally, as would be the case with a contract action at law. ERISA provides for equitable remedies to enforce plan terms, so the fact that the action involves a breach of contract can hardly be enough to prove relief is not equitable; that would make § 502(a)(3)(B)(ii) an empty promise.


(Emphasis added). As the Third Circuit interpreted that, although “some forms of equitable relief — such as constructive trusts, equitable liens, or accounting for the profits derived from wrongly held property — include the payment of money . . ., these forms of relief are available in limited circumstances.” Eichorn v. AT&T Corp., 484 F.3d 644, 655 n.6 (3d Cir. 2007).

In short, If the plaintiff can show an equitable basis for the payment of money damages — such as by showing an entitlement to a constructive trust, equitable lien, or accounting for wrongfully gained profits — then they can compel the payment of money damages in equity.

Could the Dukes plaintiffs show an equitable basis for money damages against Wal-Mart? 

I don’t know — that’s a heck of a complicated question — but it’s surely a possibility if the Supreme Court applies to Rule 23(b)(2) the same analysis as it has applied in the ERISA context.  That would be a good thing for employees and consumers nationwide.

Via How Appealing, the Seventh Circuit has a new opinion (Nightingale Home Healthcare v. Anodyne Therapy) by Judge Posner on when a Court may award attorneys’ fees in Lanham Act (i.e., trademark infringement, trademark dilution, and false advertising) cases.

The Lanham Act itself doesn’t give much guidance on when attorneys fees may be awarded: "The court in exceptional cases may award reasonable attorney fees to the prevailing party." 15 USC § 1117(a).

So what the heck does that mean?

First, a little history as to why the statute is there at all. Per the opinion:

[I]n Fleischmann Distilling Corp. v. Maier Brewing Co., 386 U.S. 714, 719-20 (1967), decided eight years before the fee provision was added to the Lanham Act, the Supreme Court held that attorneys’ fees could not be awarded in cases under the Act; it was that decision which prompted Congress to add the fee-shifting provision. Fleischmann rejected the proposition that courts could award fees in cases under the Act without explicit statutory authorization. “The recognized exceptions to the general rule [of no fee shifting] were not . . . developed in the context of statutory causes of action for which the legislature had prescribed intricate remedies . . . . [I]n the Lanham Act, Congress meticulously detailed the remedies available to a plaintiff who proves that his valid trademark has been infringed. It provided not only for injunctive relief, but also for compensatory recovery measured by the profits that accrued to the defendant by virtue of his infringement, the costs of the action, and damages which may be trebled in appropriate circumstances . . . . When a cause of action has been created by a statute which expressly provides the remedies for vindication of the cause, other remedies should not readily be implied.” Id. 

So Congress fixed the Lanham Act, but it never explained what an "exceptional" case was.

The Circuits have tried to figure it out on their own, with, shall we say, mixed results:

The Fourth, Sixth, Tenth, and D.C. Circuits apply different tests of exceptionality depending on whether it was the plaintiff or the defendant who prevailed. In the Fourth and D.C. Circuits a prevailing plaintiff is entitled to an award of attorneys’ fees if the defendant’s infringement (most cases under the Lanham Act charge trademark infringement) was willful or in bad faith (these terms being regarded as synonyms), while a prevailing defendant “can qualify for an award of attorney fees upon a showing of ‘something less than bad faith’ by the plaintiff,” such as “economic coercion, groundless arguments, and failure to cite controlling law.” Retail Services Inc. v. Freebies Publishing, 364 F.3d 535, 550 (4th Cir. 2004); Reader’s Digest Ass’n, Inc. v. Conservative Digest, Inc., 821 F.2d 800, 808-09 (D.C. Cir. 1987).

In the Tenth Circuit the prevailing plaintiff has to prove that the defendant acted in bad faith, while the prevailing defendant need only show “(1) . . . lack of any foundation [of the lawsuit], (2) the plaintiff’s bad faith in bringing the suit, (3) the unusually vexatious and oppressive manner in which it is prosecuted, or (4) perhaps for other reasons as well.” National Ass’n of Professional Baseball Leagues, Inc. v. Very Minor Leagues, Inc., 223 F.3d 1143, 1147 (10th Cir. 2000). Given the fourth item in this list, the Tenth Circuit can hardly be said to have a test.

The Sixth Circuit asks in the case of a prevailing plaintiff whether the defendant’s infringement of the plaintiff’s trademark was “malicious, fraudulent, willful, or deliberate,” and in the case of a prevailing defendant whether the plaintiff’s suit was “oppressive.” Eagles, Ltd. v. American Eagle Foundation, 356 F.3d 724, 728 (6th Cir. 2004). As factors indicating oppressiveness, Eagles quotes the Tenth Circuit’s list but states in the alternative, quoting (see id. at 729) our opinion in S Industries, Inc. v. Centra 2000, Inc., 249 F.3d 625, 627 (7th Cir. 2001), that “a suit is oppressive if it lacked merit, had elements of an abuse of process claim, and plaintiff’s conduct unreasonably increased the cost of defending against the suit.”

The Second, Fifth, and Eleventh Circuits require prevailing defendants, as well as prevailing plaintiffs, to prove that their opponent litigated in bad faith, or (when the defendant is the prevailing party) that the suit was a fraud. Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 221-22 (2d Cir. 2003); Procter & Gamble Co. v. Amway Corp., 280 F.3d 519, 527-28 (5th Cir. 2002); Lipscher v. LRP Publications, Inc., 266 F.3d 1305, 1320 (11th Cir. 2001); Tire Kingdom, Inc. v. Morgan Tire & Auto, Inc., 253 F.3d 1332, 1335-36 (11th Cir. 2001) (per curiam).

The Fifth Circuit adds that a court considering a prevailing defendant’s application for an award of attorneys’ fees should “consider the merits and substance of the civil action when examining the plaintiffs’ good or bad faith.” Procter & Gamble Co. v. Amway Corp., supra, 280 F.3d at 528.

The First, Third, Eighth, and Ninth Circuits, like the Second and the Eleventh, do not distinguish between prevailing plaintiffs and prevailing defendants; neither do they require a showing of bad faith. Tamko Roofing Products, Inc. v. Ideal Roofing Co., 282 F.3d 23, 32 (1st Cir. 2002) (“willfulness short of bad faith or fraud will suffice when equitable considerations justify an award and the district court supportably finds the case exceptional”); Securacomm Consulting, Inc. v. Securacom Inc., 224 F.3d 273, 280 (3d Cir. 2000) (“culpable conduct on the part of the losing party” is required but “comes in a variety of forms and may vary depending on the circumstances of a particular case”); Stephen W. Boney, Inc. v. Boney Services, Inc., 127 F.3d 821, 827 (9th Cir. 1997) (“a finding that the losing party has acted in bad faith may provide evidence that the case is exceptional” but “other exceptional circumstances may [also] warrant a fee award”); Hartman v. Hallmark Cards, Inc., 833 F.2d 117, 123 (8th Cir. 1987) (“bad faith is not a prerequisite” to an award). Yet a later Ninth Circuit decision interprets “exceptional” to mean “the defendant acted maliciously, fraudulently, deliberately, or willfully” (note the echo of the Sixth Circuit’s Eagles decision) or the plaintiff’s case was “groundless, unreasonable, vexatious, or pursued in bad faith.” Love v. Associated Newspapers, Ltd., 611 F.3d 601, 615 (9th Cir. 2010). 

Yikes. As Posner observes:

"It is surprising to find so many different standards for awarding attorneys’ fees in Lanham Act cases. The failure to converge may be an illustration of “circuit drift”: the heavy caseloads and large accumulations of precedent in each circuit induce courts of appeals to rely on their own “circuit law,” as if each circuit were a separate jurisdiction rather than all being part of a single national judiciary enforcing a uniform body of federal law."

For largely pragmatic reasons, the Seventh Circuit settles on an "abuse of process" standard:

We conclude that a case under the Lanham Act is “exceptional,” in the sense of warranting an award of reasonable attorneys’ fees to the winning party, if the losing party was the plaintiff and was guilty of abuse of process in suing, or if the losing party was the defendant and had no defense yet persisted in the trademark infringement or false advertising for which he was being sued, in order to impose costs on his opponent. 

It’s a fair conclusion, but not the only rational conclusion. As Posner notes, there’s already two separate means by which a party can recover for conduct which amounts to an abuse of process. First,

[C]ases such as Chambers v. NASCO, Inc., 501 U.S. 32, 45-46 (1991), state that one of the inherent powers of a federal court is to “assess attorney’s fees when a party has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.” For similar formulations, see, e.g., Mach v. Will County Sheriff, 580 F.3d 495, 501 (7th Cir. 2009); Mañez v. Bridgestone Firestone North American Tire, LLC, 533 F.3d 578, 585, 591- 92 (7th Cir. 2008). That sounds a lot like the abuse of process test that we think best describes the exceptional case that merits an award of attorneys’ fees under the Lanham Act. But if we are right about our interpretation of “exceptional case,” the question arises why Congress bothered to include a fee-shifting provision in the Act; for didn’t the courts already have inherent power to award fees for abuse of process in Lanham Act cases?


Abuse of process is the name of a tort. A tort is proved in a tort suit. But a proceeding for an award of attorneys’ fees is not a suit; it is a tail dangling from a suit. 

Posner resolves the first problem by saying that Congress was amending the Lanham Act to deal with the Fleischmann Distilling Corp. opinion, and then largely avoids the second problem.

Yet, if Congress had wanted courts to apply an abuse of process standard in assessing attorneys fees under the Lanham Act (or under other statutes that provide for fees in "exceptional" cases, like in patent infringement cases), then it would have said so, and would have amended the Act to provide for attorneys fees where the losing party was guilty of abuse of process in suing or defending the claim.

But that is not what Congress did. Instead, Congress, in its wisdom, used the term "exceptional cases." "Exceptional" meaning "unusual" or "not typical." Congress thus provided for attorneys’ fees in cases in which the losing side’s prosecution or defense of the case was merely unusual or atypical when judged against ordinary or typical cases, a far lower bar than amounting to an "abuse of process."

Imagine the world of Lanham Act cases as a Bell Curve, with wholly frivolous claims on the left and wholly frivolous defenses on the right.

Congress wanted "exceptional" cases to result in fee-shifting. What’s "exceptional" mean? Well, assuming a normal distribution, then 68% of cases fall within one standard deviation of the mean — and if we use that as our definition of "usual" or "typical," then it means Congress meant for fee-shifting to happen in 32% of cases.

"Abuse of process" though, is a much higher bar. I think most lawyers would agree that far fewer than 32% of claims and defenses represent an abuse of process.

So moving from a mere "exceptional" standard to an "abuse of process" standard tells lower courts that a a case being a mere single deviation from the mean — i.e., being an exceptional case — isn’t enough to award fees. Rather, fees are awarded only in the most egregious of cases, in which the parties had absolutely no basis for their position, just like they would be liable for the tort of abuse of process.

While there might be merits to that policy, and it does not seem to be the policy that Congress adopted: instead, Congress permitted courts to order fee-shifting in cases that went beyond your ordinary litigation, that is, one standard deviation from the mean. 

There are two components of every court opinion: first, the “holding,” which is what the court did — dismiss the case, uphold the jury verdict, remand for a new trial, overturn a sentence, et cetera — and, second, the “reasoning,” where the court explains why it did what it did. For the parties to the case, the most important part is the holding: it tells the parties who won this round, sometimes who won the fight. For everyone else, the holding is meaningless: we want to know the reasoning which will guide future courts in deciding future cases.

The Supreme Court decides very few cases; in a a small number of those very few cases, the holding has a big impact on the nation (just ask Al Gore), but most of the time it’s their reasoning that matters. As the New York Times reported last week (Justices Are Long on Words but Short on Guidance), though, it seems their reasoning has room for improvement:

The Supreme Court under the leadership of Chief Justice John G. Roberts Jr. is often criticized for issuing sweeping and politically polarized decisions. But there is an emerging parallel critique as well, this one concerned with the quality of the court’s judicial craftsmanship.

In decisions on questions great and small, the court often provides only limited or ambiguous guidance to lower courts.

And it increasingly does so at enormous length.

Brown v. Board of Education, the towering 1954 decision that held segregated public schools unconstitutional, managed to do its work in fewer than 4,000 words. When the Roberts court returned to just an aspect of the issue in 2007 in Parents Involved v. Seattle, it published some 47,000 words, enough to rival a short novel. In more routine cases, too, the court has been setting records. The median length of majority opinions reached an all-time high in the last term.

Critics of the court’s work are not primarily focused on the quality of the justices’ writing, though it is often flabby and flat. Instead, they point to reasoning that fails to provide clear guidance to lower courts, sometimes seemingly driven by a desire for unanimity that can lead to fuzzy, unwieldy rulings.

If you’re still reading this post, then you should read the article. To summarize it here would be a disservice to the many issues addressed and the wealth of links provided.

So let’s move to the big question: considering how “fuzzy” and “unwieldy” the Supreme Court’s reasoning can be, do lawyers and courts still rely on their opinions?

At first blush, the answer to that question is obvious: of course everyone does. When the Supreme Court says that a corporation’s principle place of business is its nerve center, or that Fed. Rule Civ. Proc. 23 trumps state restrictions on class actions, or that people have no right to police enforcement of restraining orders, then that’s the law. We all follow it.

But those are holdings. What about the reasoning?

That’s where things get tricky. Consider Bilski v. Kappos. Can you patent a business method or not? The Supreme Court said: maybe you can in theory, but we’ve never seen one worthy of patenting.

What’s that mean going forward? Nobody knows. It’s up to the USPTO, the District Courts, and the Federal Circuit to figure it out until the Supreme Court gives us a better answer.

Fact is, in the day-to-day operation of the law, even federal courts rarely look to the Supreme Court’s reasoning to decide cases. Most of the time — like in the trial court opinions and unpublished appellate opinions that resolve the bulk of cases — courts don’t even address the Supreme Court’s reasoning, much less use that reasoning as a means of deciding the case at hand.

Tellingly, even in published Court of Appeal decisions, the most important opinions short of the Supreme Court, the Supreme Court’s reasoning is typically not worth more than a passing reference.  Consider two published opinions from the Courts of Appeal on the same day the article was published.

The Sixth Circuit examined whether an insurer had arbitrarily and capriciously denied long-term disability coverage. After citing mostly their own opinions, the Sixth Circuit tried to figure out what a 2008 Supreme Court opinion meant:

Guardian, after all, is both the payor of any long-term disability benefits and the administrator vested with discretion to determine his eligibility for those benefits. Indeed, such an inherent conflict of interest is “one factor” that must be considered when evaluating a plan administrator’s decision to deny benefits under ERISA. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S. Ct. 2343, 2351 (2008); Firestone Tire & Rubber Co. v. Burch, 552 U.S.101, 115 (1989). But there are many other factors a reviewing judge must consider as well. Glenn, 128 S. Ct. at 2351. In its opinion below, the district court acknowledged Guardian’s conflict of interest, but concluded, based on the record as a whole, that its decision to terminate Schwalm’s benefits was nevertheless supported by substantial evidence. The district court’s consideration of the inherent conflict of interest was proper.

The Supreme Court made clear in Glenn that such a conflict is a red flag that may trigger a somewhat more searching review of a plan administrator’s decision, but the arbitrary and capricious standard remains in place. Glenn, 128 S. Ct. at 2350.

In other words, the Supreme Court’s opinion in Glenn meant that a conflict of interest is “one factor” that “may trigger a somewhat more searching review.” Sure seems “fuzzy” and “unwieldy” to me — and apparently seemed that way to the Sixth Circuit, since they ignored it for the rest of the opinion.

The Eleventh Circuit tried to figure out the extent to which past bad behavior can be used to enhance a sentence for child pornography. To answer the question, the Court ignored the Supreme Court and looked solely to other Circuits:

The five circuits that have addressed this question have consistently concluded that the plain language of § 2G2.2(b)(5) does not place a time limit on past instances of sexual abuse or exploitation a court may consider in finding a pattern of activity.  See United States v. Olfano, 503 F.3d 240, 243 (3d Cir. 2007) (involving convictions approximately 16 and 13 years old); United States v. Garner, 490 F.3d 739, 742-43 (9th Cir. 2007) (involving sexual abuse occurring “at least 35 years earlier”); United States v. Gawthrop, 310 F.3d 405, 412-14 (6th Cir. 2002) (involving an 11-year-old conviction); United States v. Woodward, 277 F.3d 87, 90-92 (1st Cir. 2002) (involving multiple convictions between 22 and 27 years old); United States v. Lovaas, 241 F.3d 900, 903-04 (7th Cir. 2001) (involving sexual abuse that occurred 26 years earlier).

First, Third, Sixth, Seventh, and Ninth Circuits — but no Supreme Court.

If you have a case in federal court, odds are that the holdings of the Supreme Court will generally dictate its course, the way a compass generally guides a sailor, but the reasoning of the Supreme Court won’t enter the picture. The specific direction of your case will be decided on the basis of your local Court of Appeal’s reasoning and how other District Courts in that Circuit have interpreted that reasoning; failing that, your case will likely be decided on the reasoning of other Circuit Courts, but not the Supreme Court.

That said, let’s play Devil’s Advocate.

The Supreme Court doesn’t decide appeals; that’s the Court of Appeals job. The Supreme Court picks and chooses its docket through the grant or denial or certiorari, and presumably chooses cases not because they’re easy but because they’re hard. Typically, the Supreme Court grants certiorari either where Courts of Appeal (and/or State Supreme Courts) have answered a single question in different ways or where a case raises an issue of national significance.

Consider Bruesewitz v. Wyeth. The Georgia Supreme Court came down one way on vaccine product liability preemption and the Third Circuit came down another. The question raised is neither obvious nor simple to answer; if it was, the courts would have both come to that same obvious and simple answer.

It wouldn’t be surprising if, in deciding Bruesewitz in a way that was meant to give guidance to other courts in future issues, the Supreme Court ended up with some abstract, obtuse reasoning. Some issues are just plain messy and prone to misinterpretation; if these questions were easy, we wouldn’t need all these levels of appeal to decide them.

But being the devil’s lawyer only gets us so far; there’s really no excuse for some of the gibberish that has come out of the court as of late. Prof. Arthur Miller is quite right that Twombly and Iqbal are “shadowy at best,” causing “confusion and disarray among judges and lawyers.” The Supreme Court took a long-standing, well-understood rule about complaints and apparently (at least this is what defense lawyers claim) reinterpreted it to allow courts to determine, at their subjective discretion, if allegations were “facts” or “conclusions” and if the “facts” were “plausible,” whatever that means — the Supreme Court didn’t bother to explain any further than that.

Maybe the problem has to do, as Liptak noted, with the increasing length of opinions or, as Judge Posner argued, with excessive delegation to inexperienced law clerks. I think the problem goes a bit deeper than that: some of the opinions are not based on principled legal reasoning but upon politics. It’s no surprise that cases decided on the basis of judicial activism don’t have the best reasoning underlying the holding — if appropriate legal reasoning had been used, they would have reached a different conclusion.

Unfortunately, there’s no easy cure for that. We just have to wait them out and pick better Justices next time.

Bormes v. U.S., 2009-1546 (Fed. Cir. November 16, 2010), isn’t the type of suit you see every day:

On August 9, 2008, Bormes, an attorney, filed a law-suit on behalf of one of his clients in the U.S. District Court for the Northern District of Illinois using its online document filing system. Bormes paid the filing fee using his credit card, and the transaction was processed through the government’s pay.gov system. The govern-ment then provided Bormes with a confirmation webpage that appeared on Bormes’ computer screen. The confir-mation page contained the expiration date of Bormes’ credit card.

That’s a problem. 15 U.S.C. § 1681c(g)(1), part of the Fair Credit Reporting Act, provides:

Except as otherwise provided in this subsection, no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.

Thus, Bormes filed suit, just as he could against any other vendor which disclosed too much information on a receipt:

Alleging that the display of his and similarly situated plaintiffs’ credit card information violated section 1681c(g)(1) of FCRA, Bormes filed a class action lawsuit against the government. Bormes seeks, among other things, statutory damages, attorney’s fees, and costs.

But there’s a problem: the United States government isn’t just any other vendor. It’s the sovereign, so you have to come up with some specific basis authorization for suing it:

In his complaint, Bormes alleged jurisdiction under both 28 U.S.C. § 1346(a)(2), commonly referred to as the Little Tucker Act, and FCRA’s own jurisdictional provision, 15 U.S.C. § 1681p.

The District Court dismissed, on the ground that FCRA did not waive the federal government’s sovereign immunity, and so jurisdiction under the Little Tucker Act was moot.

Normally, claims against the United States have to be filed in the United States Court of Federal Claims, but that’s quite a lot of work for people who have modest claims. The Little Tucker Act is, in essence, small claims court for claims against the United States:

The Little Tucker Act, 28 U.S.C. § 1346, gives the district courts jurisdiction, concurrent with the Court of Federal Claims, over “any other [than tax refund] civil action or claim against the United States, not exceeding $10,000 in amount, founded . . . upon any Act of Congress.” The Little Tucker Act is therefore a jurisdictional provision that also operates “to waive sovereign immunity for claims premised on other sources of law (e.g., statutes or contracts).” United States v. Navajo Nation, 129 S. Ct. 1547, 1551 (2009).

Which brings us to the issue at hand:

Because the Little Tucker Act operates to waive sovereign immunity, the district court erred in dismissing Bormes’ case without considering whether the Little Tucker Act provided an alternative basis for jurisdiction. If the Little Tucker Act authorizes the district court to hear this case, it also provides the waiver of sovereign immunity that the trial court found lacking in the FCRA itself. See United States v. Mitchell, 463 U.S. 206, 216 (1983) (“If a claim falls within the terms of the Tucker Act, the United States has presumptively consented to suit.”).

To support jurisdiction under the Little Tucker Act, the substantive law that provides the basis for the plaintiff’s claims must be “money-mandating.” Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005). A source of law is money-mandating if it “can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.” United States v. White Mountain Apache Tribe, 537 U.S. 465, 472 (2003) (quotation omitted). This “fair interpretation” rule demands a showing “demonstrably lower” than the initial waiver of sovereign immunity: “It is enough . . . that a statute creating a Tucker Act right be reasonably amenable to the reading that it mandates a right of recovery in damages. While the premise to a Tucker Act claim will not be ‘lightly inferred,’ . . . a fair inference will do.” Id.

And, indeed, the FCRP is about as money-mandating as it gets; the FRCP “unquestionably provides for money damages” and “expressly defines the term ‘person’ to include ‘any . . . government.'”

You don’t need anything more than that to establish the waiver of sovereign immunity and jurisdiction under the Little Tucker Act. Dismissal vacated and remanded back to the District Court.

[UPDATE: The Supreme Court has since granted certiorari on the case, which should be interesting. Based on my understanding of how many government jobs work, this could present a big problem if the United States is exposed to, for example, liability for illegal background checks.]

[UPDATE: the District Court dismissed the charges mid-trial, as explained by the Compliance and Enforcement Register, which has a copy of the order. Subsequent reporting indicates there was considerable doubt within the US Attorney’s office over prosecuting the case.]

One of the benefits of being a contingent-fee plaintiffs’ lawyer is that I get to pick and choose my cases. The likelihood of winning isn’t the only issue — we take some cases because they should be brought, even if the bottom-line disagrees — but we have the liberty of rejecting cases of dubious merit and cases that present other problems.

The worst “other problem” of all? The lying client. If a client lies to me, or tries to get me to lie for them, I’ll drop their case like a bag of bricks. There’s no need to be black or white about it; if we get into a gray area, that’s enough for me to get out.

But it’s easy for me to say that. I only get paid if my clients win, and, well, liars never win and winners never lie.

It’s not so easy for in-house counsel — who has one client upon whom they depend for their livelihood — to do that. They don’t get to choose their battles. They don’t get paid to say “no” when trouble comes knocking.

They get fired.

I couldn’t help reflecting upon that when I saw what Corporate Counsel reported Wednesday:

Federal prosecutors on Tuesday indicted (pdf) Lauren Stevens, the former associate general counsel of GlaxoSmithKline LLC, on charges of obstruction and making false statements about off-label uses of a drug.

“There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts, in a statement. “Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts.”

The indictment states that in October 2002, the FDA asked for information as part of an inquiry into whether the company was promoting a prescription drug for non-approved uses such as weight loss.

Prosecutors allege that Stevens signed a series of letters from the company to the FDA that falsely denied that the company had promoted the drug for off-label uses, even though she knew that it had.

Denying, on behalf of your client, that the client did something wrong isn’t unethical, much less criminal. Defense lawyers routinely do it, but they do it for one of two reasons: first, because the client has denied doing anything wrong and the lawyer believes them or, second, because the client denied doing anything wrong.

These two situations aren’t one and the same; in the first, the lawyer genuinely believes the client’s story, whereas, in the second, the lawyer doesn’t think one way or another about the client’s story. The client gave a story and the lawyer — who doesn’t know the facts one way or the other — is advocating on behalf of the client.

Obviously it’s ethically easier to be in the first situation, to stand up righteously for an innocent defendant who did nothing wrong. But the second situation is not just permitted, but is expected by the rules governing lawyers conduct — the lawyer is obligated to zealously advocate, with unfettered loyalty, on behalf of their client. The only lawyer who has a duty to “do justice” is a prosecutor; criminal defense attorneys have only duties to their clients. Same goes for civil attorneys, despite a century-old debate between practitioners (who believe loyalty to one’s client comes first) and academics (who believe the truth and social justice come first).

There is, naturally, a big gray area when a lawyer is in this second situation. They can suspect their client is lying — consider when the coaching scene in Anatomy of a Murder, the ethics of which are still debated today — but they can’t know, and they certainly can’t help the client lie.

Which brings us back around to Lauren Stevens. Her problem, if the indictment is to be believed, was that she went one step further. She didn’t believe her client was innocent. She didn’t stay on the sidelines and remain in the dark as to whether her client was innocent. She investigated her client’s alleged wrongdoing, as the FDA asked her to, and then reported back to the FDA only a small piece of what she had learned, keeping the most incriminating parts to herself. She and other lawyers even came up with the “pros” and “cons” of producing the incriminating parts and then decided, well, you know, it’d be a whole lot easier if we just kept that to ourselves.

And that’s the one step too far.

The case has the potential to be a “teaching moment,” shall we say, for the ethics of representing the guilty, particularly guilty corporations, given what The AmLawDaily reported about it:

“Lauren Stevens is an utterly decent and honorable woman. She is not guilty of obstruction or of making false statements,” Stevens’s lawyers said in a statement to The Am Law Daily. “Everything she did in this case was consistent with ethical lawyering and the advice provided her by a nationally prominent law firm retained by her employer specifically because of its experience in working with the FDA. She looks forward to the day when a judge and jury can hear the true facts in the case, which will show that she has done absolutely nothing wrong.”

Emphasis mine. That sure sounds like an “advice of counsel” defense to me, which would amount to a waiver of attorney-client privilege. Consider Rhone-Poulenc Rorer Inc. v. Home Indem. Co., 32 F.3d 851, 863 (3rd Cir. 1994):

There is authority for the proposition that a party can waive the attorney client privilege by asserting claims or defenses that put his or her attorney’s advice in issue in the litigation. For example, a client may waive the privilege as to certain communications with a lawyer by filing a malpractice action against the lawyer. A defendant may also waive the privilege by asserting reliance on the advice of counsel as an affirmative defense. …

In these cases, the client has made the decision and taken the affirmative step in the litigation to place the advice of the attorney in issue. Courts have found that by placing the advice in issue, the client has opened to examination facts relating to that advice. Advice is not in issue merely because it is relevant, and does not necessarily become in issue merely because the attorney’s advice might affect the client’s state of mind in a relevant manner. The advice of counsel is placed in issue where the client asserts a claim or defense, and attempts to prove that claim or defense by disclosing or describing an attorney client communication.

As an initial matter, Stevens wasn’t the client, GlaxoSmithKline was, but given how deep they’re in it I doubt they’re going to hang their former VP out to dry and make themselves look worse in the process.

I don’t know what the U.S. Attorney’s were thinking, or if they expect to win, but this sure looks like a case that needed to be brought. A line has to be drawn somewhere; on which side Lauren Stevens and GlaxoSmithKline fall is a question that will need to be hashed out by the courts.