High Court Should Not “DIG” Dart Cherokee Basin Case

supreme courtDart Cherokee Basin Operating Co. v. Owens, which raises right-of-removal issues under the Class Action Fairness Act (CAFA), is among the more important civil justice cases being heard by the Supreme Court this term. Legal commentators are virtually unanimous in concluding that the trial court adopted an overly restrictive standard governing removal of cases from state to federal court. Yet, as Columbia Law Professor Ronald Mann noted in a recent column for ScotusBlog, questioning during the October 7 oral argument revealed that the Court may be reluctant to decide the case at all. Every question posed to counsel for Petitioner focused on “vehicle” issues, not on the merits of his CAFA arguments. Several justices even suggested that the case might be dismissed as improvidently granted—which would be a terrible mistake.

On closer examination, the procedural posture issues that troubled the Court at oral argument turn out to be insubstantial; they should not dissuade the Court from addressing the Question Presented by the petition. Moreover, as explained in Washington Legal Foundation’s amicus brief, it is critical that the Court retain jurisdiction in this case to unwind the judicially created doctrine that motivated the mistake below in the first place. Dart Cherokee provides the Court an ideal opportunity to end the rule of construction whereby federal courts continue to narrowly construe federal removal statutes against the party seeking removal, contrary to Supreme Court precedent and despite the utter lack of any textual basis for doing so. Continue reading

A Blow to Legal Ethics from an Unlikely Source

scales of justiceMark Chenoweth is General Counsel of Washington Legal Foundation

I cannot recall for sure when I first heard about the American Judicature Society (AJS), but it was probably about 20 years ago when my work-study job in college included re-shelving volumes of Judicature at the campus law library. There was a time when AJS was a pillar of the American legal establishment, led by the likes of the late Chief Justice and former Secretary of State Charles Evans Hughes, but that time has long since passed.

So, I was not surprised to hear that AJS decided to close its doors last month. After 101 years in the business of “promot[ing] fair and impartial courts through research, publications, education, and advocacy for judicial reform,” the AJS board has concluded that it can’t keep going.

There are always multiple reasons for the failure of a non-profit organization, but a primary factor is invariably the lack of revenue. And indeed AJS President Tom Leighton issued a statement suggesting that AJS’s “membership model has become more challenging” in recent years and that “new nonprofit entities with organizational and financial structures more suited to the times have joined AJS in the fight” for a fair and impartial justice system.

I had not seen anything about AJS or even thought about it for years when I heard the news of its demise, but I decided to visit its website to see what the group has been up to lately. I was shocked to discover that one source of revenue AJS has been seeking—I don’t know for how long—is money from judicial cy près awards. When an organization ostensibly devoted to fair and impartial justice, one whose slogan is “Advocating Integrity in American Justice,” resorts to hitting up judges for cy près funds, it has truly outlived its usefulness.

By all appearances, AJS does not seem to be the least bit embarrassed by this fundraising tactic. There is a prominent “Key Link” on the homepage to “Cy Pres.” I actually clicked on it thinking that AJS might have posted an eloquent explanation that I had missed about the ethical minefield represented by cy près awards. Instead, the link takes one to a page that says the following:

If you are a Federal Judge you can donate to AJS by giving Cy Pres damages amounts that were unclaimed in class action lawsuits. Simply fill in the information below to make your donation today!

And then there is a short form to fill out, though how exactly the short form suffices to accomplish a donation is not obvious. Perhaps AJS just views the form as a shorthand way of letting the organization know that cy près award funds are on the way.

In case you are not aware, cy près is highly controversial because it infects the settlement process with perverse incentives having nothing to do with the best interests of class members. An organization like AJS, which spends a significant share of its time and resources advocating for judicial ethics, should really know better than to tout such a discredited practice—let alone encourage judges to engage in it to AJS’s own benefit! At a bare minimum, AJS should counsel judges to consider carefully the ethical ramifications of awarding cy près funds to AJS before doing so. The ethical disconnect here astounds, though I trust that AJS’s hitting hard financial times has nothing to do with the oversight.

Meanwhile, in our own efforts to support fair and impartial justice, Washington Legal Foundation recently published a Working Paper by James Beck and Rachel Weil entitled “Cy Pres” Awards: Is the End Near for a Legal Remedy with No Basis in Law? In it they explain further the problems with cy près (including ethical conflicts of interest) and discuss several recent court opinions casting doubt on the practice. Rather than summarize the article here, I will simply recommend that you click on the link to check it out for yourself.

As it happens, at least once in the past year WLF itself was contacted as the designated recipient of cy près funds, but we figured out pretty quickly that the caller was looking for the Legal Foundation of Washington. Just to be clear, WLF does not accept cy près funds. So, if you are judge, please do not award us any leftover class action funds. Do, however, check out the Beck and Weil paper for a thoughtful discussion of the legal, constitutional, and ethical concerns with cy près awards in the class action litigation context.

Also published by Forbes.com at its WLF contributor site

White House Boosts Fictional “Food Addiction” Concept to School Kids

BSFriesAs we’ve discussed numerous times here, some nutrition nanny activists, regulators, and plaintiffs’ lawyers have embraced and promoted the concept that food can be “addictive.” The term grabs people’s attention, conjuring up disturbing mental images of helplessness and withdrawal. It’s no wonder, then, that the notion of “food addiction” is often invoked in the context of greater government regulation, taxes, and advertising restrictions designed to redirect our dietary choices.

On September 26, the concept received its highest profile reference yet, from First Lady Michelle Obama, during an interview broadcast to millions of students on the in-school “Channel One News.” When asked about the criticism the federal government’s new school lunch rules have faced, the First Lady responded:

It’s natural. Change is hard. And the thing about highly processed, sugary, salty foods is that you get addicted to it. I don’t want to just settle because it’s hard. I don’t want to give up because it’s expensive. I don’t want that to be the excuse.

The interview appears to have been very carefully scripted, so her mention of “addiction” was hardly spontaneous or casual, nor was her referencing it in the context of “highly processed, sugary, salty foods.” Federal government regulation is taking direct aim at those demonized products and their ingredients.

For instance, the Department of Agriculture has proposed banning the sale of certain foods in public schools that don’t meet “Smart Snacks” guidelines, as well as banning advertising of those products in schools. Also, as part of its update of the Nutrition Facts label affixed to all packaged foods, the Food and Drug Administration (FDA) is proposing a new “added sugars” item. FDA is pursuing this mandate even though the agency acknowledges that no chemical difference exists between naturally occurring and added sugars in food. The “added sugars” mandate would also expose federal regulators to constitutional challenges under the First and Fourth Amendments, as leading food regulation attorneys Richard Frank and Bruce Silverglade argue in a September 26 WLF Legal Backgrounder.

The First Lady’s reference to “food addiction” was ill-advised, especially considering the age and maturity level of her captive audience on Channel One News. The concept of addiction has been significantly dumbed down and politicized over the past few decades to the point where it has almost lost any objective meaning. Reputable scientists have questioned not only the methodology behind “food addiction” studies, but also the researchers’ motivation.

The “Let’s Move” effort led by the First Lady advances the indisputably worthy goal of a healthier America, but that goal cannot be met by fomenting faulty food addiction concerns. Such a concept creates a serious moral hazard—people struggling to lose weight may throw up their hands because they believe addiction to (insert high-calorie product) has taken hold. Talk of addiction, and the choice-restrictive public policies it fuels, also diverts attention and resources from actual solutions to obesity in America.

Also published by Forbes.com at WLF’s contributor page

Jurisdiction Still on Target for Supreme Court “Dart” Case

supreme courtAlthough the Supreme Court is scheduled to hear oral arguments on October 7 in a case addressing the scope of removal jurisdiction under the Class Action Fairness Act (CAFA)—Dart Cherokee Basin Operating Co. v. Owens—Public Citizen has urged the Court to dismiss the case as improvidently granted based on what it views as procedural roadblocks to reaching the merits. Last Friday, Columbia Law Professor Ronald Mann’s column for SCOTUSblog spotlighted Public Citizen’s amicus argument and stated, “[M]y sense is that the jurisdictional question [raised by Public Citizen] will seem a lot more contestable to the Justices than the issue on the merits,” adding that the Court might even consider dismissing the petition. Mann is probably correct that the Court is likely to be unimpressed by the lower courts’ merits decision—that a removal petition is deficient unless accompanied by documentary evidence supporting the petition’s allegations that the prerequisites for removal have been met. But the Court is likely to be equally unimpressed by Public Citizen’s “jurisdictional” argument, which has not been raised by the parties at any stage of these proceedings.

Public Citizen bases its argument on the fact that the Tenth Circuit did not directly address the district court’s decision to remand a case removed from state court by the Petitioners under CAFA. CAFA permits defendants in class actions to appeal remand decisions, but they first must petition the appeals court for an order accepting the appeal. In this case, the Tenth Circuit (by an equally divided 4-4 vote) denied the defendants’ petition for permission to appeal. Public Citizen contends that the only issue properly before the Supreme Court is whether the Tenth Circuit abused its discretion in denying permission for an appeal, not whether the district court erred in remanding the case.

That contention is without merit. First, the issue raised by Public Citizen cannot even remotely be deemed “jurisdictional” in nature. The Supreme Court has appellate jurisdiction over any case that has come before a federal appeals court, whether “before or after rendition of judgment or decree.” 28 U.S.C. § 1254(1). Supreme Court jurisdiction does not depend on whether the appeals court has rendered a judgment on the merits of the trial court’s determination. Because this appeal came before the Tenth Circuit, the Supreme Court has jurisdiction to review it. Continue reading

WLF Web Seminar to Address Lessons of “Stage-Managed” Litigation in Ecuador Vs. Chevron

PodiumPic1Tomorrow morning from 10:00 a.m. to 11:00 a.m., Washington Legal Foundation will be broadcasting a live Web Seminar program entitled Aguinda v. Chevron: The Remarkable Rise and Fall of a Stage-Managed Litigation & PR Crusade. You can register for free viewing by clicking on the program title.

Our speakers will be Paul M. Barrett, Assistant Managing Editor of Bloomberg BusinessWeek and author of the just-released book Law of the Jungle; and Eric G. Lasker, a partner with the Hollingsworth LLP law firm.

Even though the litigation accusing Chevron of environmental harm in Ecuador has been going on for over two decades, the case itself, and Chevron’s counter-litigation alleging the plaintiffs’ lawyers committed fraud, remain unresolved. The U.S. Court of Appeals for the Second Circuit will soon hear the plaintiffs’ lawyers’ appeal of Federal District Court Judge Lewis Kaplan’s RICO ruling. And just yesterday, the U.S. Court of Appeals for the Fourth Circuit affirmed a lower court’s order that two lawyers affiliated with lead plaintiffs’ lawyer Steven Donziger provide documents and computer drives Chevron sought in support of its RICO charges. Paul Barrett’s coverage of that Fourth Circuit ruling can be read here.

Missouri Supreme Court Invalidates State’s Legislative Cap on Punitive Damages

Behrens_MGuest Commentary

by Mark A. Behrens, Shook, Hardy & Bacon L.L.P.*

On September 9, the Supreme Court of Missouri struck down the state’s legislative limit on the amount of punitive damages that can be imposed on defendants. Under the cap, punitive damages could not exceed the greater of $500,000 or five times the net amount of the judgment. Lewellen v. Franklin arose from an unremarkable fraudulent misrepresentation and unlawful merchandising suit. In finding that the statutory damages cap violated Lewellen’s right to a jury trial, the Court followed a 2012 decision invalidating the state’s cap on non-economic damages in medical liability cases, Watts v. Lester E. Cox Medical Centers.

This holding is an extreme outlier.  Virtually every other state court that has considered the constitutionality of punitive damages caps has held that such laws do not violate the jury trial right because the jury’s fact-finding function is preserved.  The jury continues to resolve disputed facts with respect to liability and assessment of legally available remedies.  Once the jury has decided these issues, the constitutional mandate is met—or at least is virtually every other state in the country.  Nationally, both state and federal courts consistently have upheld the constitutionality of punitive damages caps. Continue reading

A Swing and a Miss by the Missouri Supreme Court

Tortfeasor?

Tortfeasor?

Have you ever been to a sporting event where the mascot and other cheerleaders shoot t-shirts and toss hot dogs into the crowd during lulls in the action? Fun for the whole family, right? Well thanks to a ruling from the Missouri Supreme Court, don’t be surprised if this tradition becomes a thing of the past.

In a unanimous ruling last month overturning a local jury’s verdict in favor of my hometown Kansas City Royals, Judge Paul C. Wilson and his Missouri Supreme Court colleagues decided, as a matter of law, that the risk of being injured by a hot dog toss is not one of the risks inherent in watching a Royals home game at Kauffman Stadium. John Coomer v. Kansas City Royals Baseball Corporation.

You’ve got to be kidding me. Baseball and hot dogs go together like mom and apple pie. At a professional baseball game where balls, broken bats, and even fielders fly into the stands, and patrons must be alert at all times to avoid injury, the risk of being injured by a flying hot dog is somehow excluded?   That decision defies logic and common sense.

A baseball game is not merely about what happens during the contest. It is a full-scale entertainment experience. For the prices that major league teams charge for games these days, they have to offer more entertainment than just the action between the lines—however thrilling this season is for long-suffering Royals fans. In the (hot) dog days of summer, baseball fans assume the risk of the sideshow right along with the main event.

Frequent spectator John Coomer allegedly suffered a detached retina when he failed to see a free hot dog coming his way. That is no laughing matter. And so he sued. But the antics of Sluggerrr, the adorable lion mascot who was not around when I was a kid—including his tossing free hot dogs to fans in the stands—is very much a part of today’s entertainment package. Continue reading