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Monday, January 21, 2019

SCOTUS does Civ Pro, confusedly

I just listened to last week's argument in Home Depot v. Jackson, which showed how confused the Justices get about Civ Pro. The issue is whether a third-party claim brought under CAFA can be removed by the third-party defendant. In the case, Citibank brought a debt-collection against against Jackson in state court; Jackson filed a counterclaim and impleaded Home Depot on an unfair trade practices class action. Home Depot wanted to remove the third-party claim under CAFA, which allows for removal of class actions with an amount-in-controversy over $ 5m on minimal diversity. The Court has held that a counterclaim defendant (otherwise known as the original plaintiff) cannot remove; the question is whether that is true of a third-party defendant.

Some thoughts:

• There was a lot of confusion about the distinction among counterclaims, cross claims, and third-party claims, even among the advocates. That confusion affected the question of whether Home Depot is a "defendant" or a "third-party defendant" and whether there is a difference between those two things. Does "any defendant" in § 1453(b) include third-party defendants as well as original defendants? Or, to put it in dueling metaphors, is a third-party defendant a black rabbit compared with all other defendant/rabbits? Or is a defendant a rabbit and a third-party defendant a weasel.

• Jackson's lawyer made what I think should be the key point, although I am not sure the Justices saw it this way (Justice Breyer hinted at the point in his own unknowing way). If Home Depot can remove here, then any third-party defendant can remove if he is diverse from the defendant/third-party plaintiff. (He gave an example of a generic tort action against a corporation, with the corporation then impleading its diverse insurer, which then removes). I do not see a relevant difference between CAFA removal of a class action and § 1441 removal of that, or any other, individual action. I did not hear Home Depot's counsel or any Justice suggest one. So if a third-party defendant is a defendant, then all third-party claims must be removable, not only those removable under CAFA.

• I kept thinking that it also would allow removal of a federal claim brought as a third-party complaint. There was some discussion about that being limited by the Well Pleaded Complaint rule, which applies to § 1331 but not § 1332. But I always have understood the WPC as implicitly applying to § 1332, as well, by placing the focus on the identities of the parties and claims named in the WPC--we determine diversity by looking at the parties named and the amount sought in the complaint. The point being that unless Congress says otherwise (as in America Invents), the "civil action" removable under § 1441 is the one established in the complaint and removal cannot be based on additional claims filed by different parties against anyone.

• Justice Alito came across as disrespectful of advocates who urge positions he disagrees with and law reviews. Consider this exchange

JUSTICE ALITO: . . . somebody came up with this idea of using this sort of proceeding as a way of getting around CAFA. And there's a law review article that actually says, after CAFA, well, look, we found a way to get around CAFA so thatwe can keep these things in state court. Is that not correct?

PAUL BLAND:  . . .There was a law review article by an advocate. It's not really a law review article and a peer-reviewed article. I think it's more like a blog. But, anyhow, a guy writes an article saying -

* * *

JUSTICE ALITO: Since when are law review articles peer reviewed?

MR. BLAND: You know, that's a good point.

JUSTICE ALITO: Who are they reviewed by?



You're totally right. I-- I'm so sorry. I -- I should never have said that, you're right.

JUSTICE ALITO: They should be -- maybe they should be peer reviewed.

MR. BLAND: Law review articles are student reviewed, they're not peer reviewed. I -- I -- I withdraw. That was --

JUSTICE BREYER: I'm fine on law review articles.

The law review stuff is a funny exchange. But the underlying premise is that Jackson's argument to keep the case in state court is somehow illegitimate because it originated on the pages of law reviews. This is troubling for a couple of reasons. Justice Alito does not express similar concerns with the creative, scholar-driven theories urged (and continuing to be urged) against the Affordable Care Act. If you believe Chief Justice Roberts, the problem with legal scholarship is that it is not sufficiently helpful to lawyers and courts. Now, an idea urged in court is somehow questionable because it was presented in scholarship as a way to convince lawyers and courts on an issue. This is not the first time that Justice Alito has cast aspersions on advocates urging positions towards a legal goal--he similarly questions death-penalty abolitionists for their advocacy.

Posted by Howard Wasserman on January 21, 2019 at 01:26 PM in Civil Procedure, Howard Wasserman, Judicial Process | Permalink


"I think the suggestion is that it's illegitimate because it was intended as a workaround around a statute."

Alito put it in similar terms. But I don't see why this is different than saying the "zero tax is not a constitutional tax" argument not similarly a workaround around ACA and the decision in Sebelius upholding the statute. Both involve creative legal arguments to achieve desired results.

Posted by: Howard Wasserman | Jan 21, 2019 7:42:21 PM

I suppose the admittedly weak distinction would be that 1332 creates original jurisdiction over certain "class actions," and while a third-party class claim may not be, in a technical sense, a "civil action," which is an element of 1332(d)'s definition of "class action," it's also true that it is, in an ordinary sense, a class action, and that it would be unnatural to say that it's not and is only a third-party class claim. On Kagan's line of reasoning, which I take you to be endorsing, the third-party claim that Jackson brought technically isn't a class action as 1332(d) uses the term, and that does seem a little odd. Whereas I don't think that there's any ordinary-language intuition that other sorts of third party claims are "civil actions."

I don't think that Alito was suggesting that the argument is illegitimate because it came from a law review; I think the suggestion is that it's illegitimate because it was intended as a workaround around a statute. Now, this actually suggests a sort of purposivist attitude about statutory interpretation; the argument that Congress intended to achieve a goal and some idea frustrates it and is therefore illegitimate doesn't make much sense if you're a textualist, as then you should only care if the statute textually contains the loophole that allows a clever lawyer to frustrate its supposed goals or not. But I don't think that Alito particularly cares that the idea was published in a law review, as opposed to any other place. He'd probably feel the same way if a district judge who was frankly opposed to CAFA pioneered it in an opinion.

Posted by: Asher Steinberg | Jan 21, 2019 3:30:07 PM

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Posted by: El roam | Jan 21, 2019 2:59:45 PM

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