News

CCL Argues Personal Jurisdiction Issue Before En Banc Proceeding in the Fifth Circuit

September 21st, 2021

     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 Amicus Brief for Local Government Groups Supports Baltimore in Fourth Circuit

September 14th, 2021

    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 Files Local Government Groups' Amicus Brief in First Circuit

September 3rd, 2021

     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 Files Amicus Brief for Local Government Groups in Eighth Circuit Climate Change Case

August 25th, 2021

     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.

CCL Files En Banc Brief Arguing to Overturn 2016 Decision

August 2nd, 2021

     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.

Seventh Circuit Vacates Magnuson-Moss Decision, Opens Door to State Court Filing

July 29th, 2021

     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.

Fifth Circuit Grants CCL Petition for Rehearing En Banc in Important Personal Jurisdiction Case

July 2nd, 2021

     The U.S. Court of Appeals for the Fifth Circuit has granted a petition, filed by CCL, for rehearing en banc on the application of Federal Rule of Civil Procedure 4(k)(2) to a foreign defendant in an admiralty case. 

     The survivors and family of U.S. Navy seamen had sued a Japanese corporation over a collision at sea that killed seven sailors on a the U.S.S. Fitzgerald and injured forty others. A federal court in New Orleans had thrown the case out, holding that personal jurisdiction was not available in the U.S. courts over the defendant because it is not "at home" in the U.S. On appeal, CCL's Robert S. Peck argued that the decision effectively rendered the rule, approved for precisely these situations, unconstitutional in all its applications because it also requires that any defendant subject to the rule not be within the personal jurisdictional reach of any state court. That provision cancels out the one imposed by the district court as a matter of due process, effectively voiding the rule, which was promulgated at the request of the U.S. Supreme Court.

     A panel of three judges in the Fifth Circuit agreed with Peck's argument, but said that their hands were tied because of a 2016 precedent in the circuit that they believed was wrongly decided. They urged the entire Fifth Circuit to take up the matter in order to overrule the precedent. Peck's petition for rehearing en banc provided the vehicle for that rehearing, while the Japanese defendant opposed rehearing and insisted that the prior precedent was correctly decided. Today's order vacated the panel's decision, set a new briefing schedule, and put the case on the September oral argument calendar.

CCL Files Supplemental Brief in Warranty Action Against Best Buy

June 18th, 2021

     In response to an order from the U.S. Court of Appeals for the Seventh Circuit, CCL and counsel for Best Buy filed simultaneous supplemental briefs addressing whether the Court had subject-matter jurisdiction to hear an appeal in a putative class action over the Geek Squad Protection Plan that was argued by CCL's Robert S. Peck in January.

     In the case, the plaintiffs allege that Best Buy represents to consumers that its plan is a warranty and uses that descriptor in marketing the plan. The district court in the case, however, held that it is not a warranty but a repair plan based on the notion that a purchaser pays extra for the coverage. The plaintiffs contend that the extra payment does not change the nature of the offering, particularly when a discount on the product is offered in conjunction with the plan's purchase. If a warranty, then Best Buy's more limited coverage for a product that cannot be repaired violates the Magnuson-Moss Warranty Act. If not a warranty, no redress can be afforded. 

    The subject-matter jurisdiction issue arises because the Act requires that 100 plaintiffs be named in the complaint to hear the lawsuit in federal, rather than state, court. However, this case was filed in federal court on the basis of diversity jurisdiction over another defendant, Samsung, the manufacturer of the purchased television set, on a state-based consumer protection claim. The Seventh Circuit has long recognized that, in cases like that, it has supplemental jurisdiction over the Magnuson-Moss claim, which is what the CCL brief argued.

Peck Presents at AAJ Personal Jurisdiction Webinar

May 19th, 2021

     CCL President Robert S. Peck made a co-presentation with attorney Deepak Gupta on the results and meaning of the U.S. Supreme Court's latest personal jurisdiction decision, Ford Motor Co. v. Montana Eighth Judicial Dist. Court. The case, both lawyers agreed, was a marked and welcome departure from the past decade of decisions that had substantially narrowed state-court authority over out-of-state defendants.

     Gupta had argued the case before the U.S. Supreme Court and described his strategy of demonstrating the importance of allowing state courts to hear these cases in which the defendant did regular business for the product that had injured the plaintiffs in the state where they resided. He had also recruited amicus support from state attorneys general and small businesses to demonstrate the breadth of interests affected. Peck had written an amicus brief on behalf of the American Association for Justice. In it, he demonstrated that Ford had maintained a relationship both with the owner of used cars, regardless of the state where the vehicle was first purchased and with the vehicle itself through recalls and other notices. He noted that Ford extensively advertised to car owners to use original manufacturer parts, whether the vehicle was self-serviced, serviced at a dealership, or at an independent car shop, under the slogan, "Keep Your Ford a Ford." The unanimous opinion from the Court, written by Justice Kagan, picked that up from Peck's brief, reciting the slogan in the decision's second paragraph.

Fifth Circuit Orders Opponents' Response in Personal Jurisdiction Case

May 17th, 2021

     In what seems like record time, the U.S. Court of Appeals for the Fifth Circuit ordered a Japanese corporate defendant to respond to the petition for rehearing en banc filed by CCL on behalf of U.S. Navy sailors injured or killed when a container ship operated by the defendant struck the U.S.S. Fitzgerald, on which the sailors served. The petition was filed Friday, and the order of a response came only after the weekend passed.

     The Fifth Circuit warns attorneys and parties that rehearing en banc is disfavored because it saps judicial resources and is rarely granted. However, in this case, the panel that decided the issue made plain that rehearing was in order because the judges in the case felt boxed in by in-circuit precedent that only the entire court, hearing a case en banc, could overturn. The precedent, under what is called the "rule of orderliness," required a ruling against the plaintiffs, but the judges indicated their agreement with the plaintiffs' arguments on why personal jurisdiction under Rule 4(k)(2) of the Federal Rules of Civil Procedure should allow the courts to entertain lawsuits against foreign defendants with substantial and continuous contacts with the United States over a matter related to those contacts, rather than require the foreign defendants also be "at home" in the United States.