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Wednesday, August 04, 2021

Defamation procedure II

Devins Nunes is not the only new defamation action raising interesting procedural issues. Alan Dershowitz sued Netflix and others for defamation over the documentary Jeffrey Epstein: Filthy Rich. Defendants answered yesterday; here is Netflix's Answer.

Netflix has good lawyers (the firm of Davis Wright Tremaine). But the Answer does many of the things that are inconsistent with the FRCP, that I try to teach students not to follow, but that are common in practice because no one--not plaintiffs, not defendants, and not judges (since Milton Shadur died)--cares about the content of the Answer. This would make a good final exam next spring.

Here are some problems:

    • Netflix responds to numerous allegations as it "lacks information sufficient to form a belief as to the truth or falsity of the
allegations and "on that basis, denies each and every allegation in" the paragraph. This is wrong. FRCP 8(b)(5) allows a party to "state" that it "lacks knowledge or information sufficient to form a belief about the truth of an allegation," which has the "effect of a denial." That is, a defendant can respond to an allegation by saying "I don't know" and the court will treat that as a denial. But Netflix said "I don't know and therefore I deny." That is not logically possible and not what FRCP 8(b)(5) authorizes. This might reflect a disconnect between FRCP 8(b)(5) and FRCP 11(b)(4), which requires a defendant to certify that denials "specifically so identified, are reasonably based on belief or a lack of information." But if 11(b)(4) allows a denial based on lack of knowledge, 8(b)(5) is superfluous.

    • This is one I had not seen before: After responding to 138 numbered paragraphs, the Answer has a subject-heading "General Denial" and states:

Each numbered paragraph in this Answer responds to the identically numbered paragraph in the Amended Complaint. Netflix denies all allegations, declarations, claims, or assertions in the Amended Complaint that are not specifically admitted in this Answer. To the extent the headings contained in the Amended Complaint constitute allegations, such allegations are denied.

        This is unnecessary. FRCP 8(b)(3) allows general denials of the entire complaint or a general denial of everything not admitted. But the Answer admitted and denied facts paragraph-by-paragraph. This blanket statement is unnecessary.

    • The Answer asserts 24 affirmative defenses. But most of these are not affirmative defenses--where the defendant admits the allegations in the complaint but raises new facts and law that cause those facts not to have their ordinary effect. These are expressly stated failure-of-proof defenses--defendant arguing that the plaintiff cannot prove the truth of the allegations in the complaint. For example, the sixth defense is that Dershowitz is a public figure and cannot prove actual malice by clear-and-convincing evidence. That is a failure-of-proof defense--Dershowitz will fail to prove his claim because he cannot carry his burden of persuasion on an element. The defendant is not required to plead the absence of malice. The twenty-third defense is that Dershowitz's reliance in his fraud claim was not reasonable. Again, this argues that Dershowitz cannot prevail on an element on which he bears the burden of proof--the reasonableness of any reliance. The defendant does not have to prove unreasonableness.

            Again, this is common. If the complaint alleges the plaintiff spoke with actual malice, denying the allegation is equivalent to saying  "we did not act with actual malice," which puts the plaintiff to the task of proving the disputed fact of the defendant's state of mind. If the complaint alleges the plaintiff reasonably relied on false statements, denying the allegation is equivalent to saying "his reliance was not reasonable," which puts the plaintiff to the task of proving the disputed fact of the reasonableness of his reliance. But defendants are afraid that will be lost to whomever reads the pleading. So they affirmatively state the failure of the element, even though that is not what the rules imagine.

    • The Answer includes a counterclaim under New York's new Anti-SLAPP law. I have written before about how the procedural defenses of anti-SLAPP laws should not apply in federal court. But New York's law creates a counterclaim that the claim is a SLAPP (as defined), allowing for recovery of attorney's fees and compensatory and punitive damages. It functions something like the tort of abuse of process, often raised as an affirmative defense to a questionable tort claim. This is a nice example of how one legal rule can be an affirmative defense and a counterclaim and the different roles each plays. The SLAPP issues will not defeat Dershowitz's claims (that will happen under New York Times), but they provide basis for Netflix to recover money apart from the resolution of the original claim. By establishing a new claim, New York found a way to allow federal defendants to pursue anti-SLAPP arguments and recover anti-SLAPP remedies, in a slightly different posture.

    • Netflix alleged supplemental jurisdiction over the counterclaim because Dershowitz's claims arise from the same set of facts. This is a legal and strategic mistake, although another common one.

        Why not allege diversity jurisdiction? That is the basis for jurisdiction over Dershowitz's original claims (defamation, fraud, and other torts) over the defendants. If there is diversity over the claims Dershowitz and all defendants, there must be diversity over counterclaims between the same parties. The fees and damages sought almost certainly will exceed $ 75,000. So § 1332(a)(1) is satisfied. Supplemental jurisdiction is supposed to be limited to cases in which there is no "independent" basis for jurisdiction. My guess is this practice derives from habit established in the paradigm case--plaintiff brings federal claims against non-diverse defendants and the defendants assert state counterclaims; supplemental jurisdiction is necessary in those cases. But it is not necessary when the basis for original jurisdiction is diversity and the same parties are involved in claims and counterclaims.

        There is a second problem--there may not be supplemental jurisdiction here. The best conclusion is that the SLAPP counterclaim is permissive rather than compulsory, because it does not arise out of the same transaction or occurrence as the claim. This case reflects a common posture--defendant does something to injure plaintiff, plaintiff seeks a remedy for the injury, defendant alleges that plaintiff's remedial efforts violate defendant's rights, defendant brings counterclaim based on those injuries. For example, courts generally hold that an abuse-of-process counterclaim is not compulsory to an original tort claim--the tort claim is based on the real-world events that caused the injury to the plaintiff, while the counterclaim is based on the action of filing the lawsuit. Or take Jones v. Ford Motor Credit. Plaintiffs believed the terms of their auto loans were racially discriminatory and brought ECOA claims while also stopping payment on the loans, prompting counterclaims to recover the money owed on the loans; the court said the counterclaims were permissive because the claims were based on the mark-ups in the loan agreement while the counterclaims were based on subsequent non-payment. Dershowitz's claims arise out of the documentary, while the counterclaim arises out of Dershowitz's subsequent lawsuit itself seeking a remedy for that injury; these are distinct real-world facts and events. There is a but-for connection--but-for the false statements in the doc, Dershowitz would not have sued, which would not have caused the alleged injury to Netflix. But such a but-for connection is generally insufficient.

        That matters because most courts treat "same transaction or occurrence" in FRCP 13(a)(1)(A) as meaning the same thing as "same case or controversy" (which courts interpret to mean "common nucleus of operative fact") in § 1367. That is, a counterclaim that is not sufficiently related to satisfy 13(a)(1)(A) is not sufficiently related to satisfy § 1367. That is why it makes sense for defendants to plead diversity jurisdiction when they can--it provides a basis for jurisdiction over the counterclaim independent of the original claim, jurisdiction that the district cannot decline to exercise. Some courts, including the Second Circuit in Jones, treat "same case or controversy" as broader than "same transaction or occurrence," allowing jurisdiction over a non-compulsory counterclaim where there is a "loose factual connection" among claims, including the sort of but-for connection we see here. At least to this point, however, the Eleventh Circuit has not treated them differently.

None of this matters, of course. Dershowitz is not going to push back on improper responses or bad affirmative defenses and I doubt he will both moving to dismiss the counterclaim for lack of SMJ (since Netflix can replead to establish diversity). Any errors  are harmless because the court and the parties treat them as such. The FRCP often is observed in the breach in the name of moving forward, for better or for worse.

Posted by Howard Wasserman on August 4, 2021 at 02:10 PM in Civil Procedure, Constitutional thoughts, First Amendment, Howard Wasserman, Judicial Process | Permalink | Comments (0)

Defamation procedure I

Yesterday saw developments in two stupid defamation lawsuits brought by two stupid people, but with some procedural fun thrown in.

First, Devin Nunes filed another defamation suit (how many is this?), this one against NBC Universal in the Eastern District of Texas over packages Nunes received from a Russian agent. This has the usual problems for a Nunes defamation suit--some of the challenged statements are opinion and rhetoric and there are no allegations showing actual malice. But as always, I am here for the procedure:

    • What the hell is the case doing in Texas? Nunes is from California and works in D.C; NBC Universal is a Delaware LLC with its PPB in New York. There is no connection between these statements and Texas, other than that they were heard in Texas along with every other place in the United States where MSNBC telecasts and Maddow tweets can be heard. The statements are not "about" Texas, Texas people, or Texas activities. Weird forum choice has been a common feature of Nunes' lawsuits; the first suit (against Twitter, Liz Mair, and Devin Nunes' Cow) went into state court in a remote spot of Virginia. But Virginia made some sense, since Mair lives there and it is close to D.C. Texas just seems random. Keeton v. Hustler is still out there (and the complaint, which for reasons of bad lawyering shifts into making legal arguments, cites it). But the recent jurisdictional trend in defamation cases is that there must be more of a connection between the statements and the forum, even for nationally distributed publications.

    • ¶ 10 states "MSNBC is at home in Texas and is subject to general personal jurisdiction in Texas," a statement which does not reflect the law as it has been for at least seven years and should be sanctionable. If that is the hook Nunes' lawyer plans to use, this should be over quickly.

    • Even if jurisdiction (and therefore venue) is proper, this case again seems ripe for transfer. No one and nothing central to this case occurred or is located in Texas. NBC has a good argument that its witnesses and evidence are located in New York, where it engaged in its reporting and broadcasting activities.

Posted by Howard Wasserman on August 4, 2021 at 01:46 PM in Civil Procedure, Constitutional thoughts, First Amendment, Howard Wasserman, Judicial Process | Permalink | Comments (1)

August Guests: Joseph Kearney and Thomas Merrill on "Lakefront"

We are pleased to welcome Joseph Kearney (Dean, Marquette) and Thomas Merrill (Columbia) to blog about their excellent new book Lakefront: Public Trust and Private Rights in Chicago (Cornell University Press).

This is their third stop on a blogging book tour.

Posts at Volokh Conspiracy here:

Posts at Faculty Lounger here:

They will begin posting on Thursday.

Posted by Howard Wasserman on August 4, 2021 at 12:31 PM in Books, Howard Wasserman | Permalink | Comments (0)

Tuesday, August 03, 2021

FIFA as state actor and other bad arguments

Another entry in the "Bad § 1983 Takes" File: Siasia v. FIFA in the Southern District of New York. Samson Siasia is a U.S. citizen and international soccer coach who got caught up with a match-fixer while trying to land a coaching job in Australia; FIFA imposed a lifetime ban from coaching, which the Court for Arbitration of Sport in June reduced to five years, backdated to 2019. The Complaint alleges a due process violation in the FIFA proceedings and that FIFA acted under color by performing the traditional and exclusive government function of investigating and adjudicating bribery and imposing a sanction (the complain says "punishment" over and over).

This fails on so many levels.

First, FIFA is a Swiss association with its PPB in Switzerland, so it does not seem possible for it to act under color of the law of any state of the United States; it does not act in or as a replacement for any one state. The U.S. Soccer Federation is one of the 200+ national federations that comprise FIFA, providing a U.S. hook. But USSF is not a defendant (and was not involved in the Siasia case). Getting at FIFA through USSF runs afoul of Tarkanian v. NCAA, where SCOTUS said the NCAA did not act under color of law of any state when it was comprised of schools from multiple states.

Second, private entities can make internal decisions concerning the enforcement administration of internal rules, including by investigating alleged violations and rendering decisions through adjudicative processes. Sometimes the conduct violating those internal rules also violates a society's criminal laws. A private entity does not become a state actor when enforcing its internal rules and imposing internal sanctions, where it imposes no societal consequences (conviction and imprisonment). If it did, no private organization could maintain and enforce internal rules for conduct that also could be criminal. Under this theory, MLB is a state actor with respect to the investigation and suspension of Dodgers pitcher Trevor Bauer for sexual assault, because sexual assault is a crime.

The Complaint argues that FIFA should have followed the NCAA as to former basketball coach Lamont Evans. Having received information that Evans was accepting bribes to route players towards certain financial advisers, the NCAA turned the information to the federal government, which prosecuted Evans. The NCAA punished Evans with a 10-year ban after Evans had been convicted and sentenced in the federal criminal proceeding. But the distinction is incoherent, at least as it affects becoming a state actor. The NCAA cooperated with the government to allow it to prosecute and jail the person, something FIFA chose not to do. But the NCAA and FIFA otherwise engaged in identical conduct--imposing internal sanctions on someone for conduct that also violated a criminal law. The decision to also assist the government in having the person convicted and jailed should not affect the nature of the organization's internal proceedings and thus of the organization.

Alternatively, the argument means that a private entity cannot enforce internal rules and impose internal sanctions if the government declines to press criminal charges or if the person is acquitted. This has never been how the law requires private organizations to operate.

Third, I am not sure FIFA is subject to the 14th Amendment (or the 5th Amendment, as the complaint also cites for no reason) or to U.S. due process requirements for proceedings in Switzerland, even as they apply to a U.S. citizen. A U.S. citizen subject to foreign proceedings must abide by the rules of the foreign proceeding. At best, he might limit the domestic effects of those proceedings.

State action aside, there are some fun jurisdiction and venue issues here. Siasia is a Georgia citizen, while FIFA is a Swiss citizen. The Complaint alleges that venue is proper in the Southern District because FIFA is "an alien corporation and has significant contact in this District and is currently organizing the 2026 FIFA World Cup in this District." The Complaint does not cite the correct provision, but I believe it is basing venue on § 1391(b)(1) (where any defendant resides) as developed in (c)(2) (association resides where it is subject to personal jurisdiction) and (d) (in states with multiple districts, determine jurisdiction in the district as if it were a state).

Is FIFA subject to personal jurisdiction in the Southern District as if it were a state? The "significant contacts" language sounds in the pre-Daimler/pre-Good Year general jurisdiction, which no longer exists; FIFA is neither created in nor has its PPB in the Southern District, so is not subject to general jurisdiction there. Organizing the 2026 World Cup in the Southern District* and other contacts with the district have nothing to do with Siasia or his suspension, at least as indicated in the complaint; the complaint does not allege that anything related to Siasia occurred in New York or the Southern District. The Court of Arbitration for Sport has a location in New York City, so that might have been where Siasia appealed the FIFA decision; the complaint does not say. I doubt that is enough, since the alleged violation is the FIFA proceeding, not Siasia's partially successful appeal.

[*] A separate question is whether the 2026 World Cup will be in the Southern District as to be a contact. One of the eleven U.S. cities under consideration is "New York/New Jersey." Games would be played at Met Life Stadium in New Jersey (in a different district), although FIFA will pitch people to stay in and visit New York while in town for the games. What is the relevant place for jurisdiction based on FIFA's "organizing" activities--where the game is played or all the places that fans and teams will use?

Based on the complaint, there is specific jurisdiction in Georgia under Walden and Calder. The emails that formed the basis for the alleged bribery were sent to Siasia while he lived in Georgia. The emails notifying Siasia of the charges against him (which he alleges he never received, part of the due process violation) and of his sanctions were sent to his emails in Georgia. FIFA investigated a Georgia citizen about actions taken in Georgia, thereby directing its actions at Georgia. Because Siasia is an Atlanta citizen, venue is proper in the Northern District of Georgia.

Even if SDNY is proper, there is a good argument that NDGa is better and a § 1404(a) transfer is in order. Siasia does not reside in SDNY, so he cannot claim venue privilege. The relevant acts as to Siasia, to the extent they occurred in the United States, took place in NDGa, which is where the one relevant witness--Siasia--is located. Other than Siasia's lawyer being from Connecticut and barred in SDNY, I am not sure why the suit was filed there.

Alternatively, FIFA could try to get the case out of the U.S. and to Switzerland on forum non conveniens grounds. FIFA's actions in initiating and holding the proceedings and suspending Siasia's license occurred in Switzerland, so that would be the situs of the actions and location of witnesses and evidence concerning the propriety of the proceedings.

Fun stuff.

Posted by Howard Wasserman on August 3, 2021 at 12:19 PM in Civil Procedure, Constitutional thoughts, Howard Wasserman, Judicial Process, Sports | Permalink | Comments (0)

Terms limits and judicial reputations

At last week's hybrid SEALS, I moderated an excellent discussion group on court reform. Tom Metzloff (Duke) raised an issue for term-limits proponents--what do we lose or gain by cutting long-serving Justices' careers in half. Among historically great or significant Justices who served way more than 18 years, how much of their greatness or significance occurred within the first 18 years and how much in the back end of their tenure? Alternatively, how much did their later years add or detract from their achievements in those first 18 years?

Tom plans to do more with this, but I wanted to muse on a few names in skeletal fashion; there is a lot more to say in a lot more detail. Two observations. First, how we remember any Justice depends in part on historical vagaries and how those changes alter that Justice's role on the Court. Second, politics and partisan preferences affect whether we see those latter-half achievements or actions as good or bad.

Justice Brennan (1956-90; would have retired in 1974): Brennan's 34-year career divides almost cleanly in half. Until 1969, he was Warren's consigliere on a liberal (later overwhelmingly liberal) Court; for the last 20 years, he was the most influential (and beginning in 1975 senior-most) Justice in a liberal minority. How would we remember Brennan if he only had that first half as the intellectual leader of the liberal majority rather than the second half as great dissenter? This split is historically contingent--had Johnson succeeded in replacing Warren and/or had Fortas not been forced to resign, the Court would not have shifted as much as it did in the first three years of Nixon, leaving Brennan more in the Court's majority for at least a few more years.

Justice Stevens (1975-2010; would have retired in 1993): His first eighteen years were largely non-descript, mostly part of a large middle with an occasional individual voice. His final 15 years were among the longest periods as senior-most Justice in the minority of an evenly divided Court, which is the role for which history will remember him.

Justice Holmes (1902-32; would have retired in 1920): Retires the year after his Abrams dissent. He loses 12 years of continued First Amendment dissents, as well as Buck v. Bell, which remains a stain on his record.

Justice Thomas (1991-Present; would have retired in 2009): Thomas's last twelve years (and counting) have been a more confident and aggressive version of his first 18--solo opinions staking out iconclastic positions, unbound by precedent, and willing to challenge many jurisprudential sacred cows. Is he doing this more than he did prior to 2009? Again, how you feel about this depends on how you feel about the positions Thomas stakes out.

Chief Justice Rehnquist (1972-86; 1986-2005; would have retired in 199o): Like Brennan, Rehnquist enjoyed two quite distinct careers of almost equal length--Most conservative member of the Burger Court authoring many separate opinions and influential Chief Justice. Probably never gets the latter job, because Reagan would not have elevated him if he was four years from retirement.

Chief Justice Taney (1836-64; would have retired in 1854): Off the Court three years before Dred Scott.

We can play this game with a lot of Justices who served 25+ years and this is only intended as an outline. I think Tom is onto something good.

Posted by Howard Wasserman on August 3, 2021 at 09:31 AM in Howard Wasserman, Judicial Process, Law and Politics | Permalink | Comments (0)

Monday, August 02, 2021

SB8, racist speech, and partisan presumptions

Concerns about the process of SB8--privatizing enforcement, preempting offensive pre-enforcement litigation, and pushing rights-holders into a defensive posture--come from the left. So do fears that this could catch on. In urging the invalidity of this enforcement framework, the Whole Women's Health Complaint argues:

18.The answer to that question must be no. Otherwise, states and localities across the country would have free rein to target federal rights they disfavor. Today it is abortion providers and those who assist them; tomorrow it might be gun buyers who face liability for every purchase. Churches could be hauled into far-flung courts to defend their religious practices because someone somewhere disagrees with them. Same-sex couples could be sued by neighbors for obtaining a marriage license. And Black families could face lawsuits for enrolling their children in public schools. It is not hard to imagine how states and municipalities bent on defying federal law and the federal judiciary could override constitutional rights if S.B. 8 is permitted to take effect.

But is this limited to conservative attacks on liberal rights-holders, as the complaint offers (other than the gun-rights example)? Could liberals use private enforcement and would the political alignments and arguments flip?

Imagine a state wants to eliminate racist speech. It prohibits the oral, written, non-verbal, or symbolic expression degrading or dehumanizing a person based on race and creates a private tort action for damages and attorney's fees for "any person" offended or bothered by such expression. This law violates the freedom of speech as currently judicially interpreted to the same degree that SB8 violates the right to reproductive freedom. But a would-be racist speaker (e.g., someone who wants to burn a cross on his own lawn or  display a "White Lives Matter" sign or stand on the corner and shout that only white people should be allowed to vote) could not bring an offensive action to declare the law invalid or stop its enforcement. As with SB8 actions, there is no one causing the racist speaker an injury, no one to sue, and no one for the court to enjoin. Such a racist speaker must continue to engage in his racist speech, get sued by that random "any person," and raise the First Amendment as a defense. Or he will refrain from speaking from fear of suit and liability. Either way, the point of the law is to chill or sue racist speakers into silence.

Would those on the left objecting to SB8 object to this strategy of silencing racists and racist speech? If not, is the reason that liberals favor the right to reproductive freedom affected by SB8 while opposing or wanting to limit the right to engage in racist speech? And can that be an acceptable distinction?

Posted by Howard Wasserman on August 2, 2021 at 09:31 AM in Civil Procedure, Constitutional thoughts, First Amendment, Howard Wasserman, Judicial Process, Law and Politics | Permalink | Comments (0)