Kagan gets an endorsement from superstar conservative appellate litigator and Bush II appellate nominee (also my old boss) Miguel Estrada here (see last paragraph).

Plus, Stuart Taylor says Kagan’s nomination could mean a more conservative Court:

Commentators on the left . . . complain that Kagan never compiled much of a record of aggressively championing liberal causes during her years as a law professor. Some say she was too friendly as dean of Harvard Law School to conservatives and did not recruit as many women and minorities for the faculty as diversitycrats desired.

Speaking as a moderate independent, I like everything about Kagan that the left dislikes. To borrow from my friend Harvey Silverglate, a leading Boston lawyer who champions both civil liberties and an old-fashioned liberal’s brand of political incorrectness, ‘they want people who look different but think alike.’

Kagan seems to be a woman who thinks for herself.

Taylor also highlights what many libertarians will find most troubling about her record (other than strong hints of her lack of sympathy, albeit predictable for a Democratic nominee, with the litigation interests of the business community): her apparent endorsement of the Bush administration’s legal framework for detention of enemy combatants.

Estrada and Taylor on Kagan is a post from Cato @ Liberty - Cato Institute Blog

Elena Kagan has been getting a lot of flak  from the right for her position on military recruitment at Harvard. While the military’s don’t ask don’t tell policy is unjust, Harvard’s position on recruitment was also misplaced—and, were the question ever presented to my faculty, I’d vote against barring the military from recruiting at my law school for the same reasons as Ilya Somin.

But, although Harvard made the wrong call on recruitment (albeit one that, in fairness, is not attributable just to Kagan, but, reportedly, to an overwhelming majority of the Harvard law faculty), Kagan’s opposition to the Solomon Amendment, which conditioned federal funding on JAG recruiters’ access to campus, has much to recommend it from a libertarian standpoint, for the reasons put forward in Cato’s amicus brief  in Rumsfeld v. FAIR, the case challenging the Solomon Amendment (which you can download here). (Disclosure: I co-wrote the brief when I was at Cato. As I recall, this was a controversial position within Cato, and I’d guess that remains true today. Cato’s current legal shop might well take a different view were the question presented to it now.)

True, the Supreme Court rejected our position 8-0. But it’s not the first time, and will be not be the last, that the Court musters eight votes for what some libertarians think is a questionable outcome.

And for the record, my view on Kagan—while she’s, as Kagan would say, “not my people,” she’s a top-notch scholar, a great Dean (who was very fair to faculty conservatives and libertarians), by all accounts an outstanding teacher, and likely to fall somewhere on the liberal continuum to the left of Breyer and to the right of Stevens.  Could be worse!

Kagan on Military Recruitment is a post from Cato @ Liberty - Cato Institute Blog

My new article, Procedure’s Ambiguity (now up on SSRN and also available here) is a rare bird in the world legal scholarship: it defends the Supreme Court’s much-reviled pleading decisions, Bell Atlantic v. Twombly and Ashcroft v. Iqbal.

It is, in fact, a rare bird even in the small world of articles defending Twombly and Iqbal. Others claim these cases, by directing lower courts to dismiss implausible claims, will deter frivolous suits, save judicial resources, and the like. I find these defenses, while plausible, too speculative and take a very different tack–one that builds on the growing literature on so-called “pluralist” approaches to interpretation. Judicial pluralists favor interpreting ambiguous statutes in ways that mimic approaches to which interest groups would, hypothetically, agree. And Twombly and Iqbal, I argue, are cases after judicial pluralists’ own hearts: They reflect a fair compromise—one, I argue, that mimics the bargain different groups with a stake in procedural rulemaking would, if given the chance, reach among themselves.

A Contrarian Cheer for Twombly is a post from Cato @ Liberty - Cato Institute Blog

The Ninth Circuit has issued its long-awaited en banc decision in Dukes v. Wal-Mart, a pathbreaking class action seeking relief from Wal-Mart for alleged gender discrimination on behalf of somewhere between 500,000 and 1.5 million women. The upshot: a 6-5 partial affirmance of one of the most questionable class certification approvals in recent memory.

The case is sparking considerable commentary: see here, here, and here, for starters. Cataloguing all the myriad questionable parts of the 135+ page decision, which range from the standard for admitting expert testimony in support of certification, to the permissibility of so-called “issue classes,” to due process restraints on award of class-wide punitive damages, would take a blog post rivaling the length of the Ninth Circuit’s own monster-of-an-opinion.

Here, though, are a few problems that pop out on first reading.

First, the Ninth Circuit’s certification decision depends on an exceedingly questionable understanding of federal civil rights law. As Richard Nagareda has written, the case is premised on “a bold, new conception of prohibited discrimination under Title VII – a notion that the scholarly literature encapsulates in the term ‘structural discrimination.’” The idea is that a corporation can violate federal antidiscrimination laws by structuring the workplace in a way that enables unconscious discrimination by frontline managers.

Wal-Mart is said to have engaged in this sort of scheme because it permits its managers to engage in highly subjective decision-making about pay and promotion, rather than imposing uniform objective criteria. In effect, the idea is that Wal-Mart’s laissez faire approach to personnel management masks a conscious effort to use its managers, and their unconscious biases, as a conduit for the company’s own unstated policy of gender discrimination.

As Nagareda points out, the theory of structural discrimination “has enjoyed a run in academic discourse out of line with its meager acceptance as a matter of actual doctrine.” Indeed, as he notes, “one broadly shared starting point in the literature” is that structural discrimination is not consistent with current law. Yet, the viability of this suit turns on this theory. And the trial court and the original Ninth Circuit panel in turn authorized a class without ever squarely deciding whether Title VII does, in fact, embrace this theory.

The en banc panel appears to make some (meager) effort to rectify this problem. But its elliptical treatment of the structural discrimination theory, spanning a couple of paragraphs buried deep in the belly of the mammoth opinion, is ephemeral—a far cry from Nagareda’s suggestion that the panel first “resolve the meaning of the statute squarely and forthrightly” before undertaking class certification analysis. One senses the often-reversed Ninth Circuit, fearful of the Roberts Court peering over its shoulder, is trying to bury the lede.

Second, a more technical problem: the en banc decision exacerbates an already troublesome circuit split over the conditions for approving a class under Rule 23(b)(2). This is a popular vehicle for class actions among plaintiffs’ lawyers for two reasons: first, assuming a class qualifies for treatment under it, class members are not entitled to an automatic right to exit the class (or “opt out”) and, second, Rule 23(b)(2), in addition, imposes less stringent requirements for class certification. In their advisory notes, the drafters of the federal class action rule suggest a class qualifies for treatment under Rule 23(b)(2) if injunctive relief “predominates” over monetary relief. And one might think that in a suit, such as this, seeking massive punitive damages on behalf of an veritable army of women, certification under Rule 23(b)(2) is therefore obviously inappropriate. But rather than squarely so hold, the Ninth Circuit now stakes out an entirely new, multi-factored balancing test for determining when injunctive or monetary relief predominates—creating a three-way circuit split about the meaning of Rule 23(b)(2)’s predominance test.

Another more fundamental problem: The text and structure of the Civil Rights Act also strongly suggest that in suits seeking backpay and punitive damages, defendants must have a chance to present affirmative, individualized evidence, on a case by case basis, rebutting claims they have discriminated. In addition, the Supreme Court’s due process cases also strongly suggest punitive damages should be awarded based on an individualized determination of fault. Yet, although the ultimate trial plan remains in flux, the en banc panel greenlights jettisoning the defendant’s right to present this kind of affirmative, individualized, case-by-case rebuttal evidence. It has done so, of course, in the service of facilitating the class action: if a case-by-case opportunity to affirmatively rebut discrimination is mandated by Congress, or the Fifth Amendment, in hundreds of thousands of suits seeking back pay and punitive damages, its hard to avoid concluding that those claims predominate over the request for injunctive relief, disqualifying them from Rule 23(b)(2) treatment even under the Ninth Circuit’s new “third way” test . . . . and raising serious concerns about whether the claims for monetary relief are certifiable at all.

Class action practice is, alas, one area where the Supreme Court has been, largely, AWOL. The result—an ever-lengthening array of circuit splits on key questions that affect when a class action can be green-lighted. Dukes—a decision chock full of questionable, boundary-pushing decisions—is the inevitable result. Some suggest Supreme Court review of this decision is close to a sure thing. Let’s hope that’s right.

The Ninth Circuit’s Controversial New Class Action Decision is a post from Cato @ Liberty - Cato Institute Blog

In Bell Atlantic v. Twombly (2007) and Ashcroft v. Iqbal (2009), the Supreme Court gave trial courts more latitude to dismiss a lawsuit at a very early stage, before the parties have had a chance to engage in discovery (the often lengthy and expensive fact-finding stage of civil litigation), if judges think the suit is not founded on “plausible” allegations of wrongdoing. 

There’s a rich, angry debate about the effect the decisions will have on dismissal rates of meritorious suits in lower courts. But the consensus among academics seems to be that both decisions will trigger a sea-change in lower court practice—one deeply unfavorable to plaintiffs.

We won’t know the real effect of these decisions for many years to come. But a 2007 study by the Federal Judicial Center on the effect of a trio of similarly controversial 1986 Supreme Court decisions (known as the “Celotex trilogy”) raises questions about dire claims that Twombly or Iqbal will dramatically change lower court practice.

The debate over the Celotex trilogy in the 1980s is eerily similar to today’s debate over Twombly and Iqbal. Responding to concerns that juries award arbitrarily large judgments against corporate defendants, the Celotex trilogy gave lower courts more latitude to grant summary judgment—that is, to toss lawsuits at the end of discovery, before a case gets to a jury, when the judge thinks there is insufficient evidence to justify a jury trial. Many academics complained that the cases would result in a radical sea change in lower court practice—one that benefited corporate defendants at the expense of plaintiffs.

The FJC’s 2007 study is the most comprehensive study of the effect of the decisions to date. Based on data drawn from 15,000 docket sheets in randomly sampled terminated cases in six district courts, the FJC found (as expected) that, before and after the trilogy, summary judgment filing and disposition rates vary significantly from circuit to circuit and between types of cases. After controlling for differences in filing rates across circuits and for changes over time in the types of cases filed, the authors found that “the likelihood that a case contained one or more motions for summary judgment increased before the Supreme Court trilogy, from approximately 12% in 1975 to 17% in 1986, and has remained fairly steady, at approximately 19% since that time.” Moreover, between 1975 and 2000, “no statistically significant changes over time were found in the outcome of defendants’ or plaintiffs’ summary judgment motions, after controlling for differences across courts and types of cases.” Indeed, despite anecdotal claims that Celotex prompted a significant increase in summary judgment in civil rights cases, the authors found “no evidence that the likelihood of a summary judgment motion or termination by summary judgment has increased” in civil rights cases since 1986.

It’s easy to overstate the FJC’s findings. (The data tell us nothing about the quality of summary judgment decisions before or after Celotex, and shed no light on disposition rates at a micro-level, i.e. in product liability actions, as opposed to other tort actions, or Title VII actions, as opposed to other civil rights actions, for example.) The study nonetheless lends some plausibility to the view that Celotex was less a catalyst for change than a ratification of preexisting lower court practice that had evolved largely in spite of the Supreme Court and which the Court was, and is, largely powerless to control.

It’s easy to think of reasons why trial courts’ summary judgment practice might evolve independently of the Supreme Court. A surprisingly large number of trial court decisions, including grants of partial summary judgment, are not immediately appealable—and the pervasiveness of settlement means many of these decisions are never appealed. Intermediate appellate courts, moreover, affirm trial court decisions at an incredibly high rate. And the Supreme Court, which takes only about 80 appeals a year, has dramatically limited capacity to police the innumerable summary judgment dispositions made daily throughout the federal court system. The upshot is that trial courts, as a practical matter, have long had wide discretion to decide even pivotal motions, like summary judgment, with relatively light appellate oversight.

Are Twombly and Iqbal a replay of the Celotex trilogy? Only time will tell. But what we know, to date, about the Celotex trilogy suggests that, whatever you think about Twombly or Iqbal, strong claims about the influence of either decision may well overstate the Supreme Court’s power and influence over trial court practice.

Twombly and Iqbal: Reality Check is a post from Cato @ Liberty - Cato Institute Blog

Marie Gryphon, of the Manhattan Institute (and a Cato adjunct scholar), has a terrific new paper advocating a “loser pays” system to deter frivolous lawsuits. Here are excerpts from the executive summary:

This study argues that loser pays could be an important part of a larger effort to reduce litigation costs, better compensate prevailing litigants, and better align tort law with its goal of deterring socially harmful conduct. A loser-pays rule would discourage meritless lawsuits, but because any such rule should also ensure plaintiffs of modest means but strong legal cases access to justice, our proposal calls for:

1. A robust litigation insurance industry similar to those that now exist in other loser-pays countries; and
2. A cap on recoverable fees to eliminate the incentive that large litigants might have to attempt to “buy a verdict” under loser pays.

This study explores in depth how a loser-pays rule would change litigation in America. It includes key findings about the likely effects of loser-pays reform and evaluates previous experiments with loser pays in America.

The Status Quo

This study delves into the available evidence about how the legal marketplace works, which lawyers file low-merit lawsuits, and how they stay in business:

• The subgroup of lawyers that file most nuisance lawsuits works to obtain settlements in weak legal cases before its members ever see a courtroom.
• The American system facilitates nuisance lawsuits, since the high cost of defending against weak cases gives defendants a strong incentive to settle.
• In contrast to nuisance suits, low-merit mass torts and class-action suits are able to attract some of the best lawyers in the United States because the potential damages stemming from these suits make them very lucrative, even when they are settled for a small fraction of the amounts demanded.

Effects of Loser Pays

This paper infers from its examination of the scholarly literature how loser pays would affect the American legal system:

• Almost every economist who has studied loser pays predicts that it would, if adopted, reduce the number of low-merit lawsuits.
• A loser-pays rule would encourage business owners and other potential defendants to try harder to comply with the law. Doing so should produce fewer injuries.
• Loser pays would deter ordinary low-merit suits, but it would not discourage low-merit class actions to the same extent because the risk of enormous losses, rather than the costs of legal defense, is the primary source of pressure on defendants to settle.

Marie Gryphon on “Loser Pays” is a post from Cato @ Liberty - Cato Institute Blog

David Boaz once suggested that the Class Action Fairness Act—an important statute that federalizes lots of abusive lawsuits traditionally confined to states—gives federal courts power they shouldn’t have.  In this article, I marshal new evidence of the Constitution’s original meaning that supports David.

In a nutshell:  the evidence confirms an interpretation of the Constitution’s text advanced by (gasp!) Public Citizen’s litigation director Brian Wolfman.  CAFA pins federal jurisdiction over state-filed class actions on the fact that many classes include members who are citizens of different states than the defendant.  Congress, in turn, assumed these suits fall within federal courts’ jurisdiction over “controversies between citizens of different states.” 

However, in congressional testimony on CAFA, Wolfman argued that proposed members of a class are not parties to a constitutional “controversy.”   For reasons too technical to go into here, if Wolfman’s right that would punch a big gaping hole in CAFA, allowing plaintiffs’ lawyers to easily evade federal jurisdiction in lots of cases. 

My evidence suggests Wolfman is correct—although Congress has the power to rewrite CAFA in a way that would make it constitutional.  Unfortunately, as the article explains, a “fix” for CAFA is probably not politically feasible, at least in the forseeable future.

For more on the argument, which involves some pretty technical points of federal jurisdiction and class action law, see the abstract, posted here, and a longer excerpt from the article posted by Professor Larry Solum on his Legal Theory Blog here.

The bottom line:  Tort reformers who are faithful to the original meaning of the Constitution must confront the uncomfortable fact that the Constitution takes key provisions of CAFA, the tort reform movement’s greatest legislative achievement, off the table.

Originalism vs. Class Action Reform is a post from Cato @ Liberty - Cato Institute Blog

Will the Supreme Court be more, or less, of a check on the president during an Obama administration?

My guess:  Less.

First, as Gene Healy notes, Barack Obama has every incentive to preserve and enhance the power of the president.  His “Yes we can!” Justice Department will not be filing briefs with the Court telling it to take the president’s power away.

Second, the judges rumored to be on Obama’s short list for the Supreme Court, like Harvard Law Dean Elena Kagan, are hardly unfriendly to the presidency.  As a scholar, Kagan is perhaps best known for her smart, nuanced 2001 law review article, Presidential Administration, which — while differing in many nuanced respects from Bush era legal framework for thinking about executive power — celebrates the president’s power to “jolt” bureaucrats “into action . . . [for] a distinctly activist and pro-regulatory governing agenda.”  She argues that federal courts should interpret the president’s statutory authority in ways that facilitate and enhance, rather than limit, the president’s powers.  Look for judicial appointments with similar views.

Third, my guess is that the Supreme Court as a whole, no matter who is on it, is likely to prove more congenial to Obama than it was to Bush.  As Neal Katyal argued in the Cato Supreme Court Review, Jody Freeman and Adrian Vermeule expand in the non-Cato Supreme Court Review, and Jack Goldsmith suggests in The Terror Presidency, the Supreme Court’s pushback against the Bush administration is at least partly a response to the Bush administration’s tin-eared and sweeping claims in favor of “inherent” executive power.  Even Bush’s Solicitor General, Ted Olson, is rumored to have advised this legal strategy would backfire by alienating the Court.

The Obama administration is likely to be smarter, by inviting the court to uphold various exercises of executive power on a case-by-case basis, rather than based on sweeping claims that the court must cede vasts swaths of decision making to the executive.  The court likes the former kind of argument for obvious reasons — it requires the president to check back with the court on an ongoing basis. But don’t fall into the Bush administration’s mindset.  A president who presents the court with smart, modest legal arguments for upholding his power don’t have less power.  He probably will have more.  As Katyal and others argue, the court may be more willing to give the President what he wants when the request is presented in a more modest fashion.

Fourth, remember that Justice Kennedy, the swing vote on the current court, famously votes his politics.  My guess is he is likely to side more often with an administration he likes and trusts — and that he will have an affinity for fellow cosmopolitan Obama’s, at least on the foreign affairs and national security front.

I’m guessing, for all these reasons, that those expecting the Supreme Court to continue to act as a drag on the centralization of power in the presidency, as it generally has in the Bush years, are likely to be disappointed in the Age of Obama.

SCOTUS Hearts Obama? is a post from Cato @ Liberty - Cato Institute Blog

I’ve got a short Regulation Magazine piece on the notorious (or glorious, depending on your perspective) Dukes v. Wal-Mart case–a gender discrimination class action composed of as many as 2 million women, according to some estimates. You can read more about the case here and download my Regulation piece here.

Many believe the case is headed to the Supreme Court–if not this upcoming term, then the next. If it does, and if the Court takes up Wal-Mart’s constitutional arguments against certification, then, I argue, it might just set the stage for some far-reaching, and overdue, conceptual changes in the way we think about the constitutional rights of class action defendants. My piece uses Dukes as a springboard for sketching some of these defenses–admittedly quite adventurous–which just might become a bit less exotic if Wal-Mart succeeds.

Save Wal-Mart, Save Class Action Law? is a post from Cato @ Liberty - Cato Institute Blog

Below, Sigrid posts Walter Murphy’s much-blogged about claim that he has been watch-listed because of a speech he gave criticizing Bush’s constitutional record. Those interested in the story should also read the skeptical questions raised by Wired‘s Ryan Singel, a Watch List critic, about Murphy’s story, which are available here:

Woe be it for this blog to defend the country’s foolish watchlist system, but after having spent more than four years reporting on watchlists, filing Freedom of Information Act requests, and talking with persons flagged by the lists, I have never seen a single case of a person being put on the list for activities protected by the First Amendment. …

I’m not even certain that in this case Murphy’s name matched or was similar to a name on the list – which is what has snagged nearly every David Nelson in the country and what got Senator Ted Kennedy a dose of handheld wanding.

In this case, I would guess that Murphy was singled out randomly. He himself says he wasn’t flagged on the way back, which he almost certainly would have been if he were on the ‘selectee’ list. (The ‘selectee’ list directs airlines to single out that person for extra screening, while a related list, the ‘no-fly’ list directs airlines to keep a person off a plane.)

I’m open to any evidence that the government has watchlisted American citizens for exercising their Constitutional rights, but I’ve never seen it.

The left wants to believe it is living in some version of Orwell’s 1984. … Around these parts, we prefer to see the world through a Kafka and Gilliam kaleidescope.

Enemy of the People … ? is a post from Cato @ Liberty - Cato Institute Blog

ScotusBlog hosted a discussion of the Court’s environmental decisions this week, in which I participated. If you are interested in more legal analysis of these cases, you can access all of the ScotusBlog posts, pro and con, here. I also summarize my contributions to the discussion in a short podcast here.

More on Mass. v. EPA is a post from Cato @ Liberty - Cato Institute Blog

Lots of news outlets have been describing the Supreme Court’s opinion in Massachusetts v. EPA along the following lines: “Supreme Court says global warming is bad; tells EPA to fix the problem.”

Is that right? Not really.

In fact, if you read between the lines of the majority’s decision, its not clear that it will alter EPA policy one jot or tittle.

“Regulation,” under the Clean Air Act, can take a number of forms: It can take the form of declaring aspirational emission standards. Or it can take more draconian forms, such as looming technology mandates and imminent implementation deadlines, backed by tough civil and criminal penalties.

Even assuming that, after the Court’s decision yesterday, the EPA has to “regulate” in the sense of promulgating some GHG emission standards, the Court’s decision leaves the EPA with ample room to argue that it can defer deciding when and how to implement those standards in light of the potentially high and uncertain costs of implementation.

Its true, of course, that some parts of the Clean Air Act prohibit the EPA from undertaking this sort of cost-benefit analysis. The parts of the CAA governing auto emission standards are, however, different. There, the EPA retains considerable discretion weigh costs and-benefits—particularly when it comes to the “when” and “how” of implementing emission controls. For example, as Justice Stevens notes, section 202(a)(2) of the CAA gives the EPA broad discretion to delay implementation of pollution controls to the extent that “the Administrator finds necessary to permit the development and application of the requisite [pollution control] technology, giving appropriate consideration to the cost of compliance within such period.” Put in plain English, that means that if the “costs” of developing effective pollution-reducing technologies are very large, and the pay off of this R&D is in the far-distant future, the CAA doesn’t require the EPA to implement its standards right away.

The Court’s opinion also reaffirms the great deference owed to the EPA’s decision not to enforce any standards that it might promulgate. In the words of Justice Stevens yesterday, an “agency has broad discretion to choose how best to marshal its limited resources and personnel to carry out its delegated responsibilities.” Given the breadth of discretion granted the agency to defer implementation under provisions like section 202(a)(2), and the costs and uncertainties associated with implementation, that deference may give the EPA very substantial room to defer—perhaps for a very long time—implementation of a federal GHG enforcement regime, freeing the EPA to deal with more immediate and pressing environmental problems.

Nor is analysis of the EPA’s leeway to delay implementation much different if, as some assume, the Court’s decision means that GHG emissions are also “pollutants” under CAA provisions dealing with “national ambient air quality standards.” True, in Whitman v. American Trucking Association, the Court held that the EPA must set NAAQS without regard to the costs of implementation. But in his concurrence in that case, Justice Breyer suggested that even CAA requirements governing national ambient air quality standards permit some modified cost-benefit analysis. He emphasized, for example, that when setting NAAQS, the EPA doesn’t have to eliminate “any health risk, however slight, at any economic cost, however great.” It is only required to eliminate “unacceptable” risks, defined as those that the public is not willing to tolerate at any cost.

New American car emissions count for only 6% of worldwide carbon dioxide emissions. Eliminating these emissions wouldn’t necessarily reverse global warming or even appreciably slow it—particularly given the dynamic nature of emissions in developing countries. Thus, its far from evident that the added global warming risks created by new American car emissions are “unacceptable” in the sense suggested by Justice Breyer.  On the face of the record, its also far from clear that the risks posed by other GHG-omitting sources in the U.S., such as stationary sources, are any more publicly “unacceptable” in the sense meant by Breyer, given uncertainty about the payoff of unilateral American remediation and given the cost and current feasibility of GHG control technology.

Ultimately, then, the key flaw with the EPA’s decision may not have been the outcome of that decision, or even the overarching reasons given by the EPA for its decision. The fatal flaw may have been only the conclusory nature of the reasons given by the EPA for its decision. For example, the EPA said that it wouldn’t act now because effective GHG-reducing technologies weren’t feasible at present and wouldn’t be feasible in the near future. But the EPA didn’t make any effort to quantify, or otherwise support with evidence, that feasibility assessment. Instead, it offered its conclusions as facts that courts must accept at face value—something five justices weren’t willing to do. But if the EPA can supplement its feasibility conclusions with at least some evidence, it may be able to pull at least one or two justices—most likely Breyer or Kennedy–into the dissenters’ orbit.

(This post is cross-posted at ScotusBlog).

Supreme Court to EPA: Hurry Up and Wait? is a post from Cato @ Liberty - Cato Institute Blog

In Slate, Doug Kmiec criticizes the Court’s decision in Philip Morris v. Williams for its lack of unanimity and argues, echoing the fashionable arguments of Chief Justice Roberts, that unamimity helps promote “clear rules” because judges must “work out their disagreements before they write their opinions.”

I’ve previously suggested (here) that this is backwards. Unanimous decisions are, on balance, likely to be less clear than 5-4 decisions: 

It’s not clear that Roberts’ prediction (that consensus on the Court yields clarity, precision, and narrowness) is right. Consensus-building in Congress, another multi-member voting body, is purchased at the price of legal fuzziness. The more amorphous and open-ended the statute — the more the statute defers tough questions — the more members of Congress agree to add their names to it. 

While consensus building on the Supreme Court is a simpler prospect, there’s no reason to think the same basic dynamic won’t apply here too: Supreme Court justices will purchase broad agreement at the price of clarity, harming the rule of law. 

In a very good post, Ilya Somin makes a similar point, writing in response to Kmiec, here:

Many of the complex balancing tests and complicated exceptions to rules that legal commentators like to make fun of in Supreme Court opinions are the result of the need to “count to five” — corral the five votes needed to create a binding Supreme Court decisons. Counting to nine is usually likely to require more compromise — and thus more complicated balancing tests and exceptions — than counting to five.

A Pox on Unanimity is a post from Cato @ Liberty - Cato Institute Blog

Yesterday, the Supreme Court decided–five to four–to strike down a punitive damage judgment against Philip Morris under the Due Process Clause.  (Cato, for the record, filed this brief in the case, written by deterrence theorists Steven Shavell and A. Mitchell Polinsky). For commentary on the case, see here and here.  You can watch me talk about the case on CNBC here.

For my money, the most interesting, and potentially far-reaching, implication of the decision is for class actions seeking punitive damages.  

On page 5 of the slip opinion, the Court says that “the Due Process Clause” prohibits a State from punishing an individual “without first providing that individual with ‘an opportunity to present every available defense.’”

That quoted language (from a non-punitives decision, Lindsey v. Normet) hasn’t appeared in the Supreme Court’s other punitive damage cases.  Its appearance here is significant, because Lindsey’s broad, bright-line language is often invoked by defendants in very large class actions, even those that don’t involve punitive damages.  Their argument goes like this:  When courts ”certify” (authorize) a very large class action, they violate due process if the very scale of the suit prevents defendants from raising individualized defenses that are otherwise available under the statute.  Expect Williams to be cited extensively by class action defendants, particularly in class actions seeking punitive damages.

It’s fairly easy to see why Williams is such a boost for these defendants by looking at the Ninth Circuit’s recent decision in Dukes v. Wal-Mart–which upholds a trial court order certifying 1.5 million gender discrimination claims, seeking $11.5 billion in punitive damages and lost pay. 

As the trial court acknowledged, individualized hearings on employees’ claims—the usual practice in later stages of Title VII cases—were impractical in a class action of the mammoth scale envisioned.  The trial court therefore allowed liability and remedies to be proven based on statistical evidence and formulas, barring defendants from making individualized showings that particular employees weren’t discriminated against in fact.   

Wal-Mart, in turn, argued its due process rights had been violated, because it had been deprived of defenses to which it was entitled.  ”In an individual case,” said Wal-Mart, it could present individualized evidence “to establish a complete defense to liability or preclude the entry of a backpay or punitive damage award.” The Rules Enabling Act guarantees the availability of that kind of defense in a class action to the same extent it is available in an individual case.  Given the punitive damage request, Wal-Mart argued, due process prohibited the court from depriving Wal-Mart of its entitlement to raise such individualized defenses.

Williams gives Wal-Mart much more ammunition than past punitive cases to argue this point on appeal to the Supreme Court.  To be sure, the Court’s aside that “it may be appropriate to consider the reasonableness of a punitive damages award in light of the potential harm the defendant’s conduct could have caused” (emphasis added) throws a possible lifeline to the Dukes plaintiffs.  That allows them to argue that a “rough” statistical measure of the harm that “could have been caused” to individual class members is all the proof necessary to anchor punitive damages in large antidiscrimination classes.  Indeed, the trial court in Dukes envisions exactly such a probabilistic measure at the remedies stage of the trial:  “[O]nly those class members who can make a showing that they were either actually harmed by the discriminatory policy or were at least ‘a potential victim of the proved discrimination’ are eligible to recover [lost pay and, therefore, punitive damages].”

This expansive reading of “potential harm” is, however, inconsistent with the Supreme Court’s careful caveat in BMW v. Gore.  There, the Court said that “potential harm” that can anchor a punitive damages award is confined to additional harm to persons who have actually been injured – for example, added harm that was “likely to result” if a defendant’s wrongful scheme hadn’t been prematurely interrupted.  That’s quite a bit narrower than the expansive concept of “potential harm” used in Dukes, which embraces guesstimates about whether any injury occurred at all.

As a result, Willliams, read in the context of previous cases, scores trouble for large-scale punitive damage classes.

Philip Morris v. Williams and Class Actions is a post from Cato @ Liberty - Cato Institute Blog

Based on the DOJ briefing regarding the NSA surveillance about-face, it appears that the Foreign Intelligence Surveillance Court (FISC) is not approving surveillance on a program-wide basis.  Instead, it is issuing individualized surveillance orders against particularized targets.  It remains unclear, though, how exactly the FISA orders have changed to permit more “speed and agility” and, because so much is taking place within the dark, all suggestions are pure, unadulterated guess-work.

One compelling theory is Orin Kerr’s:  namely, that the FISA court is issuing anticipatory warrants (warrants based on a finding that there is probable cause to search when a future triggering condition appears.)  As Kerr notes, that’s consistent the one bit of evidence we can glean:  that the FISA court is limiting the approval orders to a 90 day period, rather than the full statutory one year period permitted under FISA.  Shorter review is consistent with ensuring that the triggering condition for the search and the probable cause requirement mesh.  It also helps explain the timing, since the Supreme Court approved anticipatory warrants in United States v. Grubbs last term.  (For more on Grubbs, read Professor David Moran’s article on last term’s Fourth Amendment cases, The End of the Exclusionary Rule, Among Other Things, in the latest Cato Supreme Court Review.)

Kerr’s theory, however, doesn’t explain one part of the puzzle:  multiple sources’ statements to the Washington Post that the orders touch on ”programmatic” issues.  What might this mean, if FISC is approving orders on a case-by-case, rather than program-level, basis?

One possibility is that DOJ has adopted a streamlined internal approval process for emergency FISA applications within the executive branch, and that FISC has approved it.  FISA imposes some internal pre-approval requirements for emergency applications–including review by the AG and a cabinet level official with foreign affairs responsibility.  In February testimony last year, Gonzales complained at length that this statutory approval process had become overly cumbersome:

To be sure, FISA allows the government to begin electronic surveillance without a court order for up to 72 hours in emergency situations or circumstances. 

But before that emergency provision can be used, the attorney general must make a determination that all of the requirements of the FISA statute are met in advance. 

This requirement can be cumbersome and burdensome.  Intelligence officials at NSA first have to assess that they have identified a legitimate target. After that, lawyers at NSA have to review the request to make sure it meets all the requirements of the statute. And then lawyers at the Justice Department must also review the request and reach the same judgment or insist on additional information before processing the emergency application.  Finally I, as attorney general, must review the request and make the determination that all of the requirements of FISA are met.  

But even this is not the end of the story. 

Each emergency authorization must be followed by a detailed formal application to the FISA courts within three days. The government must prepare legal documents laying out all of the relevant facts and law and obtain the approval of a Cabinet-level officer as well as a certification from a senior official with mass security responsibility, such as the director of the FBI. 

Finally, a judge must review, consider and approve the application.  All of these steps take time. Al Qaida, however, does not wait.  . . . Just as we can’t demand that our soldiers bring lawyers onto the battlefield, let alone get the permission of the attorney general or a court before taking action, we can’t afford to impose layers of lawyers on top of career intelligence officers who are striving valiantly to provide a first line of defense by tracking secretive Al Qaida operatives in real time.  

In the briefing on the new FISA process, however, the administration noted that one change that made compliance with FISA possible was a change in executive branch “infrastructure”:

[O]ne thing that did change was — authorization earlier this year, last year, the National Security Division, which is a new agency in the Department of Justice, which will — be coordinating with the FISA Court on all kinds of matters including this one. So we’re now equipped in a way we weren’t before to handle this work.

One way to read this is that the new FISC order finds that new streamlined executive branch procedures for internal review of emergency applications accords with FISA.  Its hard, unfortunately, to guess exactly what such procedures might be, but it almost certainly includes eliminating duplicative layers of legal oversight within the executive.

More on Bush’s Surveillance Flip-Flop is a post from Cato @ Liberty - Cato Institute Blog

The DOJ announced today it has reached a double super-secret deal with the FISA court which allows it to bring the administration’s NSA surveillance program within the statutory FISA framework governing surveillance warrants. What deal, you ask? The DOJ’s letter to Senators Leahy and Specter provides few details, except to say that it is based on a FISA court order that establishes “innovative” and “complex” warrant procedures that allow the administration to act with “speed and agility.”

Absent further information, its hard to tell whether this is a good development, although as Marty Lederman notes, it is “difficult to imagine that the FISA court would roll over and approve an ‘innovative’ legal theory if it were dubious — especially not in this context, where DOJ has many incentives to get the FISA court on-board and where the congressional and public spotlight is shining so brightly.”

The administration’s about face underscores what I argued in this piece: that the administration’s claims that it was simply too cumbersome to comply with FISA held absolutely no water.

Lederman also notes that the threat of losses in ongoing multi-district litigation involving the state secrets privilege as well as the threat of congressional subpoenas, and possible litigation over executive privilege, may well have prompted the administration to give up its go it alone stance. I’ve previously argued that such threats had the potential to rein in the administration, without involving a winner-takes-all show down with the Supreme Court, here.

Goodbye Warrantless NSA Surveillance? is a post from Cato @ Liberty - Cato Institute Blog

In a recent radio interview, Deputy Secretary of Defense for Detainee Affairs Cully Stimson threatened top American law firms that have done pro bono work for Guantanamo detainees.  And, he suggested, Vito Corleone-style, that the corporations that bankroll these firms should think twice, if they know, eh-hem, what’s good for them: 

“I think, quite honestly, when corporate CEOs see that those firms are representing the very terrorists who hit their bottom line back in 2001, those CEOs are going to make those law firms choose between representing terrorists or representing reputable firms, and I think that is going to have major play in the next few weeks. And we want to watch that play out.”

A chorus of criticism has followed, which President Reagan’s Solicitor General, Charles Fried, has now joined in today’s Wall Street Journal (available here).  The money quote:

“It may just be that Mr. Stimson is annoyed that his overstretched staff lawyers are opposed by highly trained and motivated elite lawyers working in fancy offices with art work in the corridors and free lunch laid on in sumptuous cafeterias. But it has ever been so; it is the American way. The right to representation does not usually mean representation by the best, brightest and sleekest. That in this case it does is just an irony — one to savor, not deplore.

It is no surprise that firms like Wilmer Hale (which represents both Big Pharma and Tobacco Free Kids), Covington and Burling (which represents both Big Tobacco and Guantanamo detainees), and the other firms on Mr. Stimson’s hit list, are among the most sought-after by law school graduates, and retain the loyalty and enthusiasm of their partners. They offer their lawyers the profession at its best, and help assure that the rule of law is not just a slogan but a satisfying way of life.”

As a big-firm alumnus, I might quibble a bit with Fried’s claim that big firm practice offers a “satisfying way of life”–but he’s absolutely right that the participation of corporate-funded defense firms on detainees’ behalf is something that’s particularly praiseworthy about the American legal system.
 

Civil Liberty (Paid for by Philip Morris USA Inc.) is a post from Cato @ Liberty - Cato Institute Blog

The 99.6% final version of my latest law review article, Class Action Lawmaking: An Administrative Law Model, is now posted on SSRN (here). The article is forthcoming in the next edition of the Texas Review of Law and Politics. An early draft was posted some months ago, but it has been significantly revised in response to helpful comments at two faculty workshops. Here is the abstract:

This Article considers how courts should interpret federal statutes when the interpretive question affects the scope or availability of class certification. When faced with such a question, many courts are tempted to interpret the statute in a way that enables class certification, enhancing the chance that the parties will settle.

I argue that the debate over this practice can be conceptualized as a debate about delegation. Those who argue that courts act illegitimately when they “adapt” statutes to “fit” the class device assume Congress has delegated courts a narrow range of discretion to promote certification and settlement under federal statutes. By contrast, those who argue courts have great leeway to certify statutory claims, even at the price of “distorting” the statute, assume courts have been delegated a great degree of such discretion.

The Chevron doctrine of administrative law provides an unexpected solution to this debate, if we treat Chevron as a “starting-point” measure of Congress’s intent to delegate authority to “adapt” federal statutes to new circumstances. This proposal is roughly similar to Nicholas Quinn Rosenkranz’s suggestion that Chevron might be treated as a “constitutional starting-point rule” for defining permissible delegations of “dynamic interpretive power.”

My argument, however, is pragmatic rather than constitutional: in the absence of clear information about Congress’s desires in the class context, and in light of the complex trade-offs implicated by class actions, an off-the-rack approximation of Congress’s intent to delegate dynamic interpretive power to courts in the class context is needed. I suggest that Chevron is the best available “starting point” measure, in this pragmatic sense. In other words, pending further instruction from Congress, we might ask courts in the class context to start by “thinking about statutory interpretation and statutory discretion as they would want an agency to think.”

In the process, I show that the obvious objection to using Chevron in this fashion—that federal courts, unlike agencies, are not democratically accountable—doesn’t withstand close scrutiny. Put bluntly, courts interpreting statutes that affect the scope of their power to certify claims exempt themselves from the restraint they demand of agencies. Asking courts to consciously parallel the restraint they expect of agencies therefore reins in courts’ interpretive discretion—promoting, in the process, more democratic control over class action lawmaking.

Incidentally, I found Nicholas Quinn Rosenkranz’s article, Federal Rules of Statutory Interpretation, very helpful. You can access his paper, which I rely on in this latest draft and reference in the abstract, here.

The Final Version of My Latest Paper is Now on SSRN is a post from Cato @ Liberty - Cato Institute Blog

Seventh Circuit Judge Richard Posner’s “avatar” recently engaged in an online discussion in “Second Life,” a virtual online world.  A transcript is now available at New World Notes here. 

For those of you who aren’t familiar with Posner, he is perhaps the most influential, and certainly the most prolific, federal judge alive.  For those of you who aren’t familiar with avatars or virtual worlds–and, to be quite honest, I fall in this camp, having only heard about this phenomenon secondhand (in Larry Lessig’s great book, Code and Other Laws of Cyberspace)–see these descriptions. 

Here’s a taste of the sometimes surreal discussion (“JRP” is Posner, SL stands–I think–for “Second Life”):

Ludwig Swain: Copyright question: would you consider the “cloning” of a copyrighted real world architectural work into SL to be infringement or fair use?

Ben Solomon: No fair. That’s Bill Patry’s question…

JRP: I think Patry is in here somewhere– maybe he’s the raccoon.

Basman Kepler: I believe Patry has described his avatar as looking like Swiper the Fox from the Dora cartoons.

JRP:  Great question on cloning a copyrighted real world architectural work into SL– probably infringement, on the theory that the SL counterpart is a derivative work, hence the property of the copyright holder.  These are excellent questions!

Say what you will about Posner, he has a sense of humor.

Posner’s “Avatar” Talks Law is a post from Cato @ Liberty - Cato Institute Blog

On Monday, I participated in a panel discussion at the Brookings Institution on the Massachusetts v. EPA case. Other participants were Stuart Taylor; David Doniger of the Natural Resources Defense Council; David Sandalow of Brookings; science journalist Gregg Easterbrook; and environmental transaction lawyer Robert Reynolds (of Alston Bird). A transcript (uncorrected) of the discussion is available here. The discussion turned out to focus less on law, my particular expertise, than on environmental policy, but I found it worthwhile nonetheless. Note there is a discussion of Pat Michaels’ climatologist amicus brief for the EPA at the very end of the transcript, during the Q&A period: the “speakers” in the brief exchange over that brief are David Doniger and me.

Brookings Panel on SCOTUS and Global Warming is a post from Cato @ Liberty - Cato Institute Blog