News

     The U.S. Court of Appeals for the Ninth Circuit granted CCL's motion for a stay of its mandate in City of Oakland v. Wells Fargo & Co. 

      The case originated in 2015 when Oakland sued Wells Fargo for allegedly giving minority borrowers more expensive and riskier loans than it provided to non-minority borrowers with similar credit characteristics. Oakland, represented by CCL and other lawyers, successfully staved off a motion to dismiss on standing grounds. In 2017, the Supreme Court, in a case argued by CCL President Robert S. Peck on behalf of a similar lawsuit brought by Miami, also held that cities have standing under the Fair Housing Act to bring suits for lost property taxes and increased municipal spending due to discriminatory lending practices. 

      The Court, however, left open the question of what must be pleaded to meet proximate cause and whether Miami's complaint satisfied that standard. Wells Fargo then brought a motion to dismiss in Oakland, arguing that the city failed to sufficiently plead proximate cause. The federal district court found that the Bank was correct as to the damages Oakland claimed from municipal expenditures because the city offered no statistical analysis that might support the claim, but found the regression analyses Oakland included in its complaint sufficient to meet proximate-cause requirements for its lost property-tax claim. 

      Wells Fargo appealed, and in 2020, a three-judge court unanimously held that Oakland had indeed met the proximate-cause standard in its claim for lost property taxes. Wells Fargo then petitioned for rehearing en banc with the Ninth Circuit, and the case was reheard by an 11-judge court. This time, however, the court unanimously held that Oakland could never meet the proximate cause standard that applied because the FHA was only available to direct borrowers, the federal government, and some advocacy organizations as a vehicle for challenging discrimination, a position that seemed at odds with the Supreme Court's 2017 ruling in the Miami case. 

     CCL, on behalf of Oakland, sought a stay of the mandate, which ordered the district court to dismiss the case with prejudice. Today, the Ninth Circuit granted that stay, over Wells Fargo's objection, so Oakland could seek further review in the Supreme Court.

     On a luncheon panel sponsored by the RAND Institute for Civil Justice and the Feinberg Center Risk Management and Compensation, CCL President Robert Peck suggested that new procedural rules for cases assigned by the Judicial Panel on Multidistrict Litigation were not needed, but that some rethinking of the system would help.

     Peck was joined on the panel by University of Connecticut law professor Alexandra Lahav, experienced plaintiffs' MDL attorney Christopher Seegar, Bayer general counsel Scott Partridge, and U.S. District Court Judge Brian Martinotti.

     The panel was organized around the theme of when is an MDL too big. MDLs now constitute more than half the federal docket, in large measure filling a void left by new decisions that discourage the use of class actions. Recent MDLs in the news include lawsuits over opioids, Roundup weed killer, and the BP oil spill.

     While Partridge bemoaned the size of the cases, calling it "bet-the-company" litigation, Seegar advocated allowing some creativity in reaching solutions, giving the example of his work in the NFL concussion litigation. Peck suggested greater use of subclasses and additional judges when MDLs get bogged down due to size and a single presiding judge, as well as recognition of opportunities to allow individualized justice in the context of the aggregation of cases.

     The MDL system was originally intended to clear out common pretrial issues efficiently, but has developed into a means of disposing of the mass of litigation through settlement. Professor Lahav said this was a function of the concept that, if you build it, they will come.

     In a case in which CCL assisted the Levin Perconti law firm, a federal judge in Illinois granted the plaintiffs' motion to remand the case to state court where the defendant nursing home had removed it to federal court. Martin v. Petersen Health was brought on behalf of a nursing home resident who died as a result of exposure to COVID-19. The defendant removed the case to federal court, claiming that it was acting on behalf of the federal government and that the federal PREP Act completely preempted the cause of action.

     In rejecting both claims, the federal court found that nursing homes were highly regulated but under Supreme Court precedent the homes cannot claim to be operating at the direction of a federal officer by complying with regulations. It further held that the PREP Act provides an exclusive remedy in federal court in Washington, DC for lawsuits based on the administration or use of approved countermeasures during a national health emergency. However, it does not provide a defense for the non-use of those countermeasures, as plaintiffs had pleaded. The court ordered the case returned to state court, where the defendant was free to assert any federal defenses it might have.

     CCL President Robert S. Peck told an en banc panel of 17 judges in the Fifth Circuit that the application of an "at-home" requirement as a matter of due process renders Federal Rule of Civil Procedure 4(k)(2) a nullity and unconstitutional in all its applications during oral argument in Douglass v. NYK Line. A federal district court in New Orleans had thrown the case out because it held that a 2016 precedent in that circuit had added the "at-home" requirement. After a panel upheld the ruling based on that precedent but urging the Court to rehear the case to reconsider the 2016 ruling, the court granted a petition to rehear en banc to do just that.

     The case arose after a larger container ship operated by a Japanese company struck a U.S. Navy destroyer in the Sea of Japan, resulting in the deaths of seven U.S. sailors and injuries to 40 others. Representing the injured parties, along with the Koonz McKinney law firm of Washington, DC, Peck explained that Rule 4(k)(2) was adopted, with the agreement of the Supreme Court and the Congress, to address precisely these situations. It provides federal personal jurisdiction over defendants in federal causes of action where no state court can assert jurisdiction over the parties. To satisfy due process, all that is required are sufficient continuous and substantial contacts on a national basis, Peck said. However, no defendant can be "at home" in the United States and still not be subject to state-court jurisdiction.

    Peck further argued that the rule has especially important application in admiralty cases, like this one, where U.S. courts have exercised jurisdiction over the course of more than two centuries as a function of international law applicable to maritime nations. 

    The case now is under advisement, awaiting decision by the 17-judge court.

    CCL filed an amicus brief arguing that cities, no less than any other plaintiff, have a right to choose their causes of action and litigate in state court without being removed to federal court. The case, Mayor and City Council of Baltimore v. BP, is currently before the U.S. Court of Appeals for the Fourth Circuit on remand from the U.S. Supreme Court. The issue is whether any of the remaining grounds asserted by the defendant oil companies constitute a federal cause of action that should be heard in federal, rather than state, court. The Fourth Circuit had previously held that one ground, that the oil companies were acting at the direction of the federal government when they allegedly created a public nuisance and deceived the public about the climate-changing properties of fossil fuels, did not justify removing the case from state court. It further held that the statute that permitted that appeal, restricted the appeal to that issue.

     Subsequently, the Supreme Court ruled that all grounds for removal were subject to appeal when an order covers both federal officer removal justifications and other ones. 

     In its brief on behalf of the National League of Cities, U.S. Conference of Mayors, and International Municipal Lawyers Association, CCL argued that the oil companies were wrong to claim that the state law causes of action were a disguised form of federal common law, that the federal Clean Air Act explicitly did away with federal common law in this field and opened the door to state lawsuits seeking to remedy localized harms, and that the lawsuit did not seek to remedy climate change, but instead sought compensation for distinct effects that Baltimore suffered.

    The defendant oil companies will have an opportunity to file a reply to Baltimore's brief and all amicus briefs supporting it before the case is scheduled for oral argument.

     CCL President wrote and filed a brief arguing that no conception of federal common law justified removal of the State of Rhode Island's case against major oil producers for the in-state consequences of their misrepresentations about fossil fuels. The State had sued the companies on grounds of misrepresentations in state court on state causes of action, but the defendants had removed the case to federal court.

     In this second visit to the First Circuit, which originally held that the oil companies had no claim to federal jurisdiction by asserting that they had done what they were accused of at the direction of the federal government, the appellate court is reviewing other claimed bases for federal-court jurisdiction. This time around, the defendants rely heavily on a claim that because climate change is a global issue, it requires the courts to apply federal common law, rather than state law.

     The amicus brief filed today on behalf of the National League of Cities, the U.S. Conference of Mayors, and the International Municipal Lawyers Association, argued that whatever federal common law may have once existed was displaced by the Clean Air Act, which gives the states a role in combating the local effects of air pollution. States, it further argues, have a right to bring state causes of action in state court, just as any other plaintiff does, subject to the defendants' claims of ordinary preemption, which provides no right to remove a case to federal court.

     CCL urged the Supreme Court to revive a civil-rights lawsuit filed on behalf of a disabled person that had been dismissed because the plaintiff only suffered emotional-distress damages. CCL's amicus brief was filed on behalf of the American Association for Justice in Cummings v. Premier Rehab Keller, which the Court will take up in the coming term.

     Under the Rehabilitation Act, recipients of federal funds are obligated not to discriminate against persons with disabilities. In this case, a woman who needed a sign language interpreter sought physical therapy from the defendant, a recipient of federal funding, but was turned away because of the request for an interpreter. She tried going to another physical therapy provider, but found it ineffective. The defendant was the only local provider capable of what she needed. When she returned and was again refused service, she sued. 

     The federal district court found that she had no cognizable damages, having only sued for the emotional distress she suffered. It likened emotional distress damages to punitive damages, which the Supreme Court had held were unavailable for statutes like the Rehabilitation Act, which could only provide remedies similar to those available in contract cases because the federal funding created a contract-like obligation. The U.S. Court of Appeals for Fifth Circuit affirmed, but lodged its reasoning in the rarity with which emotional-distress damages are awarded in contract cases and because those scarce instances would not have provided defendants with notice of these damages being a consequence of its discriminatory act.

    While the plaintiff, remedies scholars, and the U.S. government all focused briefs on the long tradition of emotional-distress damages being available in contract cases, particularly where the breach of contract was likely to cause distress, CCL's brief demonstrated that the underlying bias against emotional-distress damages was ill-taken. It showed that empirical studies demonstrate that juries do a good job assessing the damages, align closely with the severity of the injury, and largely duplicate the assessments that are made by judges in bench trials. It said that the assumption held by the lower courts and by the defendant that emotional-distress damages are unbounded because they have no discernible market value was wrong in practice and should not influence the legal determination before the Court.

     Arguing that state and local governments have the same rights as other plaintiffs to choose state, rather than federal court, a CCL amicus brief asserted that there was no legitimate basis for oil companies to remove a climate-change lawsuit brought by the State of Minnesota to federal court. The brief, on behalf of the National League of Cities, the U.S. Conference of Mayors, and the International Municipal Lawyers Association, focuses most heavily on the oil industries' argument that federal common law completely displaced the state causes of action asserted in the case. 

     In June, the U.S. Supreme Court held that a similar action brought by the City of Baltimore required lower courts to review all the claimed bases for federal-court jurisdiction when a defendant asserts that it was acting at the direction of a federal officer, even if that assertion fails as a matter of law. In the Minnesota case, the oil company defendants made that argument but did not seriously pursue it on appeal, emphasizing the other grounds that would permit it to be in federal, rather than state, court. 

     As for the "federal common law" argument, the amicus brief argued that the Clean Air Act displaced any federal common law and explicitly opened the door to state causes of action, such as the ones filed by Minnesota. The amicus brief was filed with the Law Offices of William Rossbach.

     In a supplemental brief filed in the U.S. Court of Appeals for the Fifth Circuit, CCL's Robert S. Peck asked the court to overturn a 2016 decision on personal jurisdiction that stands in the way of litigating seven deaths and 40 injuries to U.S. Navy personnel when a container ship struck the U.S.S. Fitzgerald, a U.S. Navy destroyer in 2017 in the Sea of Japan. 

      The case was originally dismissed in federal district court in New Orleans because the judge ruled that the Japanese company operating the container ship was not subject to personal jurisdiction in the United States because it is not "at home" in this country. On appeal, Peck argued that the "at-home" requirement essentially rendered a federal rule of civil procedure unconstitutional as a product of due process, effectively saying that the Supreme Court and Congress got it wrong when Rule 4(k)(2) was promulgated. A panel of the Fifth Circuit agreed with him, but found that a 2016 precedent was an obstacle to ruling in the sailors' favor under the rule of orderliness. 

     Peck petitioned the Fifth Circuit to take up the matter en banc, where it would have the authority to overrule the errant precedent. The court agreed to do so, and today's filing was a supplemental brief in support of why the precedent should be overruled. Oral argument before the 17 members of the Court is scheduled for September 21. The case is Douglass v. Nippon Yusen Kabishiski Kusen.

     In an opinion issued today, the Seventh Circuit held that both it and the district court lacked subject-matter jurisdiction in a putative class action that was filed against Best Buy's Geek Squad Protection Plan (GSPP). 

      The case began when a couple purchased an expensive television set from Best Buy that utilized the now-abandoned plasma technology. Best Buy urged them to purchase the GSPP as an extended warranty and offered a discount on the television set if they did. The couple purchased the GSPP. When the television set failed, Best Buy was unable to repair it, offering instead a refund of the depreciated value of the television or a much cheaper replacement, informing the couple that the GSPP is a service plan, not a warranty as their advertising states.

      The district court dismissed the action, holding that under federal regulations, a warranty cannot require extra payment, and the purchase of the GSPP prevented it from being considered a warranty under the Magnuson-Moss Warranty Act. On appeal, CCL argued for the couple that the regulation had no basis in the statute and allowed Best Buy to misrepresent its service contract as a warranty, precisely the evil that the Magnuson-Moss Act was designed to prevent.

      The Seventh Circuit's decision in Ware v. Best Buy did not address the substance of the arguments, but found that subject-matter jurisdiction was lacking, even though neither party nor the lower court raised the issue. Under Magnuson-Moss, jurisdiction lies in federal court only if a purported class action actually names 100 individual plaintiffs. That was lacking in the complaint. Recognizing the possibility of dismissal on jurisdictional grounds, CCL filed a supplemental brief for the plaintiffs, suggesting both other ways that jurisdiction could be asserted, as well as a request that the adverse district court decision be vacated so the Wares could refile in state courts. The Seventh Circuit took the latter approach.