Tag Archives: Jurisdictional Issues

Seventh Circuit Weighs in on Offers of Judgment

View David Wright's Complete Bio at robinsonbradshaw.comIn this space, we concentrate on class action decisions in the Carolinas, as well as Fourth Circuit and United States Supreme Court precedent. Occasionally, though, we venture beyond these jurisdictions to highlight issues of particular note, including those where courts are divided. We’ve previously reported here how offers of judgment interact with mootness. In Campbell-Ewald Co. v. Gomez, the United States Supreme Court held that an unaccepted settlement offer, even if it offers all relief sought in the case, does not render a case moot when the affected party seeks relief on behalf of a class. Last Friday, the Seventh Circuit considered a question not resolved by Gomez: What happens when the named representative accepts a Rule 68 offer of judgment? Can he still appeal the denial of class certification? Like the question of appellate standing upon which the Supreme Court accepted certiorari in Microsoft, the answer is significant.

In Wright v. Calumet City, Illinois, No. 14-cv-10351 (7th Cir. Feb. 17, 2017), the Seventh Circuit acknowledged a split of authority on this question: “Where the Rule 68 offer is accepted but by its terms exempts the class certification issue, courts are divided as to whether the plaintiff retains a concrete interest sufficient to meet the case or controversy requirement of Article III.” The Seventh Circuit noted that Wright’s claim to standing was particularly strained because he accepted the Rule 68 offer without reservation, and he preserved no interest in receiving an incentive award. Wright argued that he had a sufficient interest in the case because his offer of judgment did not include attorney’s fees for the class claim (as opposed to his individual claim), but – as the Seventh Circuit observed – Lewis v. Continental Bank Corp.,  494 U.S. 472, 480 (1990) holds that “an interest in attorneys’ fees is, of course, insufficient to create an Article III case or controversy where none exists.” The court noted that there is some tension between Lewis and Deposit Guaranty National Bank v. Roper, 445 U.S. 326 (1980), in which the Supreme Court allowed plaintiffs, whose individual claims had been satisfied, to appeal the denial of class certification based on their asserted interest in shifting attorney’s fees to the class members. But the court distinguished Wright’s case from Roper on the ground that Wright had accepted the Rule 68 offer “as satisfaction of all of the relief that he sought in the district court.” In Roper, by contrast, the district court entered judgment for the plaintiffs in the amount tendered by the defendant, even though the plaintiffs had refused that offer. Thus, even under Roper, Wright’s claims are moot.

There will likely be more permutations on the Rule 68/mootness issues, so stay tuned.

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North Carolina Joins the Tsunami Wave of Volkswagen Litigation

View Amanda Pickens’ Complete Bio at RBH.com
Vinson v. Volkswagen Group of America, Inc., No. 1:15-cv-00213 (W.D.N.C. September 23, 2015), a case filed this Wednesday in the Western District of North Carolina, is one of at least twenty-five class actions filed against Volkswagen in courts across the country this week. In addition, at least 27 state attorneys general have launched a multi-state investigation into the German automaker’s 2.0-liter diesel vehicles.

The Plaintiffs in the WDNC case, as in the other actions, allege that Volkswagen intentionally defrauded the EPA and consumers by installing a “defeat device” on its diesel vehicles. The device can detect when an automobile is undergoing official emissions testing. The device switches on emissions controls during the testing to ensure the vehicle passes the emissions test. During normal usage of the cars, however, the emissions controls are turned off and the vehicles emit nitrogen oxide at levels up to 40 times the standard permitted under the Clean Air Act.

The flood of lawsuits began last week after Volkswagen acknowledged rigging emissions technology on its diesel vehicles to pass air-quality tests. During the launch of one of its newest vehicles, Volkswagen’s CEO, Michael Horn, admitted that Volkswagen “was dishonest with the EPA and the California Air Resources Board and with all of you” and “in my German words, we have totally screwed up.” According to German automaker, as many as 11 million cars worldwide may be affected.

The Judicial Panel on Multidistrict Litigation is likely to transfer these cases to a single judge for pretrial proceedings.

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Airline Price-Fixing Litigation Arrives in the MDNC

View Adam Doerr's Complete Bio at RBH.comCone v. American Airlines Group, Inc., a case filed this Thursday in the Middle District of North Carolina, is one of dozens of antitrust suits filed against the major U.S. airlines in courts across the country in recent weeks. With the addition of North Carolina, suits are now pending in at least seven states and the District of Columbia. Terry Maxon, who blogs about the airline business for the Dallas Morning News, has identified at least 75 such cases.

The Plaintiffs in the MDNC case, as in the other actions, allege that the major domestic airlines conspired to raise the price of airline tickets by limiting the routes and seats available to passengers. The basic theory is that the airlines unlawfully cooperated to maintain high ticket prices by artificially constraining capacity. According to the Plaintiffs, the combination of capacity constraints and declining fuel prices enabled the airlines to generate “record-breaking supracompetitive profits.”

The cases all arise from Civil Investigation Demands that the Department of Justice sent to the major domestic airlines (American, Delta, Southwest, and United) asking the airlines to produce communications with each other, Wall Street, and major shareholders about their future plans for passenger capacity. The flood of lawsuits began in July, when news of the investigation broke in stories like “US probing possible airline collusion that kept fares high”.

The Judicial Panel on Multidistrict Litigation is likely to transfer these cases to a single judge for pretrial proceedings. The panel will hear argument on motions to transfer for MDL proceedings on October 1, 2015.

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Notice of Removal: Short and Plain Statement, Not Proof of Jurisdictional Facts, Required

View Sinéad O’Doherty’s Complete Bio at RBH.comLast May, we introduced you to the Dart Cherokee Basin Operating Co., LLC v. Owens case and the interesting possibilities it presented for Supreme Court review. On Monday, a divided Supreme Court issued its decision in this matter, and it did not disappoint. To briefly recap, this case arose from the attempted removal of a putative class action to federal court under the Class Action Fairness Act (the “CAFA”). In their notice of removal, the defendants (collectively, “Dart Cherokee”) asserted that the amount in controversy was $8.2 million, satisfying CAFA’s $5 million threshold. The plaintiff, Brandon Owens, sought to remand the case on the grounds that the removal notice was legally defective because it did not contain admissible evidence proving that the amount in controversy had been met. In response to Owens’ remand motion, Dart Cherokee provided an affidavit supporting its damages calculation. Relying on Tenth Circuit precedent and the “presumption” against removal, the district court remanded the case to state court. Dart Cherokee sought leave to appeal the remand order to the Tenth Circuit. See 28 U.S.C. § 1453(c)(1) (providing that “a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action”). After a divided Tenth Circuit denied Dart Cherokee’s request for appellate review, the Supreme Court granted certiorari to determine if a notice of removal must include jurisdictional evidence.

The Supreme Court quickly disposed of this question: “The answer, we hold, is supplied by the removal statute itself. A statement ‘short and plain’ need not contain evidentiary submissions.” Dart Cherokee Basin Operating Co. v. Owens, No. 13-719, slip op. at 2, 574 U.S. ___ (2014). In reaching this conclusion, the Supreme Court noted that the removal statute tracks the pleading requirements of Federal Rule of Civil Procedure 8(a) and emphasized that the “notice of removal need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold,” Dart Cherokee, slip op. at 7. As for the district court’s reliance on the “purported ‘presumption’ against removal,” the Supreme Court concluded, “[i]t suffices to point out that no antiremoval presumption attends cases invoking CAFA.” Id. In so ruling, the Supreme Court has brought some clarity to the removal process under CAFA.

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If you are one of our readers who enjoys more esoteric issues, you’ll want to keep reading. The Dart Cherokee case provoked two dissenting opinions, but the dissenting justices appear to agree with the majority’s answer to the question of whether jurisdictional evidence is required with a notice of removal. See Dart Cherokee, slip op. at 1-2 (Scalia, J., dissenting) (“Eager to correct what we suspected was the District Court’s (and the Tenth Circuit’s) erroneous interpretation of § 1446(a), we granted certiorari to decide whether notices of removal must contain evidence supporting federal jurisdiction.”). Where the justices split, however, was on the propriety of reviewing the merits of an order remanding a class action to state court when the court of appeals denies leave to appeal under Section 1453(c)(1). In last year’s Standard Fire Insurance Co. v. Knowles decision, a unanimous Supreme Court considered the merits of a case in precisely that procedural posture: the Eighth Circuit had denied a defendant’s request for leave to appeal a remand order under Section 1453(c)(1). Unlike in Knowles, an amicus brief in this case argued that because Section 1453(c)(1) provides for discretionary appellate review, the only issue before the Supreme Court was whether the Tenth Circuit abused its discretion in denying Dart Cherokee’s leave-to-appeal application. The dissenting justices agreed with this argument and concluded that, because they could not determine the reasons why the Tenth Circuit denied Dart Cherokee’s request, the case should have been dismissed as improvidently granted. Failing that, most of the dissenting justices would have affirmed the Tenth Circuit’s ruling. Justice Thomas, however, would have dismissed the case for lack of jurisdiction under 28 U.S.C. § 1254. According to Justice Thomas, because the Tenth Circuit denied Dart Cherokee’s application for leave to appeal, “no ‘case’ ever arrived ‘in the court of appeals’” for the Supreme Court to review. Dart Cherokee, slip op. at 2 (Thomas, J., dissenting). By contrast, the majority concluded that jurisdiction was proper under Section 1254, explaining, “The case was ‘in’ the Court of Appeals because of Dart’s leave-to-appeal application, and we have jurisdiction to review what the Court of Appeals did with that application.” Id. at 8 (majority opinion). The majority further concluded that, “[f]rom all signals one can discern…, the Tenth Circuit’s denial of Dart ’s request for review of the remand order was infected by legal error.” Id. at 11. In the majority’s opinion, whether the Tenth Circuit erred in denying review and whether the district court erred in remanding the case “depends on the answer to the very same question: What must the removal notice contain?” Id. at 13.

Given this division among the justices, it will be interesting to see how the Supreme Court resolves the next case where a defendant seeks review of a remand order after the Court of Appeals denies leave to appeal under Section 1453(c)(1).

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No Second Bite of the Appellate Apple

View David Wright's Complete Bio at RBH.comRule 23(f) provides an important exception to the “final judgment rule,” and allows interlocutory appeal of class certification decisions. When the district court makes only one “class certification” decision, the application of Rule 23(f) is fairly straightforward. But what happens when the district court – after making an initial class certification ruling – rules on a motion to decertify the class? Is the denial of that motion also appealable? Most courts have said “no,” and you can understand why: motions to decertify and Rule 23(f) applications could go on endlessly. In a recent order, Judge Gregory wrote that “the time for appeal [under Rule 23(f)] will not reset when a court rules on certification motions filed subsequent to the original motion so long as the later rulings do not alter the original ruling.” So, in the Fourth Circuit, unless the new ruling changes or adjusts in some respect the original ruling on class certification, a litigant does not get to reset the 14-day interlocutory appeals clock under Rule 23(f).

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