Results matching “Iqbal”

Around the web, March 10 - PointOfLaw Forum

[compiled: W.O., posted: C.W.]

My last post showed some of the major legislative efforts that trial lawyers have successfully pushed through Congress in the last 2 years. But as Carter's post last month on the trial lawyers' legislative "agenda" shows, they're hardly slowing down. Trial Lawyers, Inc.: K Street focuses on five of the most significant efforts currently underway to increase the litigation industry's profits: loosening pleading standards, expanding securities litigation, rolling back federal preemption, limiting private arbitration, and cutting taxes on plaintiffs' litigation.

  • Pleading standards. Point of Law readers are already familiar with the Supreme Court's recent decisions to limit the outer boundary of notice pleadings in Ashcroft v. Iqbal (2008) and Bell Atlantic v. Twombly (2006) (see postings for each, here and here, respectively), as well as the Congressional effort to reverse the two decisions. What's most important to keep in mind about the legislation purportedly designed to overturn Twombly and Iqbal (S. 1505, H.R. 4115) is that it would do far more; as the K Street report notes, it "would likely interfere with statutory pleading requirements well beyond the scope of the Court's recent decisions." (See also Michael Dorf's comments here; Gregory Garre's testimony here).
  • Securities litigation. In another bill designed to overturn a Supreme Court decision, Arlen Specter's Liability for Aiding and Abetting Securities Violations Act (S. 1551) would undo the Supreme Court's 2007 decision in Stoneridge v. Scientific-Atlanta. In Stoneridge, as our readers will recall, the Supreme Court considered a class action lawsuit filed by a cable company's shareholders against other companies that had done business with their own and thus, the shareholders alleged, "aided and abetted" the company's accounting frauds. Finding no evidence of Congressional intent to authorize third-party securities through private rights of action, the Court determined that to do so would "expose a new class of defendants," raise "the costs of doing business," deter "[o]verseas firms . . . from doing business here," "raise the cost of being a publicly traded company under our law," and "shift securities offerings away from domestic capital markets." Senator Specter's bill would do just that.
  • Federal preemption. A fourth Supreme Court decision in the trial-lawyer lobby's crosshairs is Riegel v Medtronic (2008), in which the Court, by a vote of 8 to 1, determined that the 1976 Medical Devices Amendments to the Food, Drug & Cosmetic Act expressly preempted state tort lawsuits for Class III medical devices that had gone through the FDA's extensive premarket approval process. (For an extensive discussion of the preemption issues in this and related cases, see this report that I authored with my Manhattan Institute colleage Paul Howard last spring.) As the K Street report notes, the proposed legislation (H.R. 1346, S. 540) would "permit suits to proceed that stem from injuries that originated long before the law's effective date, if otherwise valid under state law."
  • Private arbitration. As I noted in my last post, discussing the Franken amendment, the trial lawyers are doing their best to push federal legislation that broadly bars private arbitration agreements in hosts of contexts. Pro-litigation legislators have introduced bills that would limit or eliminate arbitration clauses in nursing home agreements (The Fairness in Nursing Home Arbitration Act, H.R. 1237, S. 512), for mortgage loans or home-equity lines of credit (The Mortgage Reform and Anti-Predatory Lending Act, H.R. 1728), for payday loans (The Payday Loan Reform Act, H.R. 1214), for tax-refund loans (The Taxpayer Abuse Prevention Act, S. 585), in consumer contracts (The Consumer Fairness Act, H.R. 991), and in all employer, franchise, and consumer contracts (The Arbitration Fairness Act, H.R. 1020, S. 931).

  • Contingent-litigation taxation. Finally, Senator Specter has also introduced a bill (S. 437) that would give contingent-fee lawyers a $1.6 billion tax break. Traditional prohibitions against champerty and maintenance precluded what today is commonplace -- trial lawyers fronting their clients' expenses. As the K Street report explains, "the personal-injury bar's financing structure -- the 'contingent fee,' the share of the proceeds that a winning client pays his attorney, who has fronted the cost of the litigation -- runs afoul of the historical understanding of champerty. Therefore, expenses in contingent-fee cases have been treated by courts not as support of litigation per se but rather as loans to clients, to be repaid upon a winning lawsuit's resolution." Senator Specter's legislation would, for federal taxation purposes, change the status of contingent-fee litigation costs from loans to expenses -- thus allowing plaintiffs' lawyers working on contingency an immediate deduction of all costs against their taxes. Specter argues, in essence, that lawyers should be treated no different than any other business (a telling statement on the evolution of the legal "profession" into an industry). However one views this question as a theoretical matter, there's no question that Specter's legislation would pour lots of new money into the trial bar's coffers -- and lots of new lawsuits onto judges' dockets.

Those keeping count will note that the above legislation includes efforts to overturn four different Supreme Court decisions (Iqbal, Twombly, Stoneridge, and Riegel). A fifth piece of legislation (H.R. 1478), mentioned only briefly in the K Street report, would overturn a 60-year-old Supreme Court decision, Feres v. United States, 340 U.S. 135 (1950) (holding that the United States is immune from liability suits by active duty personnel under sovereign immunity principles). And of course, two of the recent bills already signed into law also reversed recent Supreme Court decisions (The Lilly Ledbetter Act, overturning Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007); and the Fraud Enforcement and Recovery Act, overturning Allison Engine Co. v. United States, 128 S. Ct. 2123 (2008)).

Specter responds - PointOfLaw Forum

Speaking of Sen. Arlen Specter (R-turned-D, Penn.), my Wall Street Journal op-ed seems to have gotten under his skin. Apparently, to the Senator's keen legal mind, my differing with him over the merits of his proposed legislation amounts to defamation. The good Senator writes in to the Journal:

I read with some dismay James R. Copland's op-ed of Feb. 9, "How the Plaintiffs Bar Bought the Senate." A responsible lawyer wouldn't descend to defamation, especially when wrong on the facts.

When the Supreme Court's decision in Ashcroft v. Iqbal (2009) changed decades of case law, I introduced legislation to reinstate notice pleading. It was hardly to allow "legal fishing expeditions . . . for filing baseless claims." When aiders and abettors are criminally liable under federal law for fraud in securities law violations, it stands to reason such misconduct should make them liable for civil damages. It is absurd to label that a "shakedown."

The U.S. Court of Appeals for the Ninth Circuit correctly allows lawyers to expense advancing litigation costs. Making such deductions allowable in other federal circuits would put those lawyers on an equal footing with other taxpayers who can deduct similar expenditures in the year when made.

A little civility in journalism would be helpful, as well as in Congress.

Sen. Arlen Specter (D-PA) has been a boon ally of the American Association for Justice this session of Congress, introducing several priority pieces of legislation for the trial lawyers, including S. 437, to allow the deduction of attorney-advanced expenses and court costs in contingency fee cases, and S. 1504, the Notice Pleadings Restoration Act, to return federal pleadings to the pre-Iqbal and Twombly standards.

No surprise, then, the AAJ's political action committee contributed $4,000 to Sen. Specter's re-election campaign in 2009 ($1,500 on May 13 and $2,500 on August. 5.) You stick by your friends...

All your friends, apparently, even when they're fighting one another. The American Association for Justice PAC also contributed $5,000 to Specter's Democratic primary opponent, Rep. Joe Sestak.

Granted, half of that amount was given before Sestak announced his challenge of Specter (Feb. 23 and March 23), but half was also given in June (here and here) after Sestak had announced his Senate candidacy.

Contributing to both candidates is not that unusual of a maneuver for political action committees, but we doubt Specter appreciates the sentiment: Thanks, Senator. If you have to lose, we hope it's to Sestak.

And in fact, now that we look at December reports, we see that the AAJ PAC kicked in another $5,000 to Specter, this time identified for the Senator's general election campaign. So, total $9,000.

Drop in the bucket, in any case. According to Federal Election Commission records, AAJ PAC raised $2,558,746 in 2009 and gave $1,810,500 to campaign committees. The Center for Responsive Politics reports that 95 percent of the contributions went to Democrats in the current election cycle. (Another $1 million plus change went to pay principal and interest on a loan from Private Bank and Trust of Chicago, for what we don't know.)

UPDATE (Saturday): Digging a little deeper, we see that the AAJ, ne ATLA, has previously taken out and repaid major loans from the Chicago bank. (See 2003-04 summary from Open Secrets and the 2005-2006 summary.) Campaigns do this sort of borrowing to manage cash flows, in our experience.

Around the web, February 4 - PointOfLaw Forum

Sean Wajert looks at the cases.

The American Association of Justice sponsored a media briefing today to outline its 2010 legislative agenda. The headline on the news release, "2010 Dawning of New 'Decade of Corporate Accountability'."

Judging by President Anthony Tarricone's quote, the AAJ is still campaigning against the Bush Administration: "During the last decade, we saw a dismantling of regulations and our legal system for the benefit of big corporations and to the severe detriment of patients and consumers." More hyperbole follows. The goals highlighted:

  • A restoration of notice pleadings, i.e., legislation to reverse the Iqbal and Twombly decisions.
  • Passage of the Medical Device Safety Act to expand litigation against FDA-approved devices to state courts.
  • Elimination of arbitration clauses in consumer contracts.
  • "Protecting patients injured by medical negligence," or as we'd put it, no medical liability reform.
  • Passage of the Foreign Manufacturers Legal Accountability Act (S. 1606) to provide more effective procedures for bringing overseas companies into U.S. courts.

The only coverage we've seen of the event comes from the Blog of the Legal Times, which focuses on the arbitration angle, "Next Target for Plaintiffs Bar: Nursing Homes?"

UPDATE (Tuesday): Also covering the event was The Hill, "Trial bar tries to end 'forced arbitration'." The Chamber-backed Legal Newsline wrote, "Trial bar seeks to expand liability, end arbitration clauses."

James Beck (assisted by Mark Herrmann) goes up against liberal proceduralist Stephen Burbank in a multi-round debate (PDF) at Penn Law's PENNumbra, and survives to tell the tale. A brief excerpt from their first post (most citations omitted):

...In 1955, the Advisory Committee rejected an amendment to Rule 8(a)(2) that would have required plaintiffs to state "facts constituting a cause of action." It did so not to endorse fact-free pleading, but rather because the Committee already viewed existing Rule 8(a)(2) as requiring "the pleader to disclose adequate information as the basis of his claim for relief as distinguished from a bare averment that he wants relief and is entitled to it."

In 1957, the Supreme Court weighed in, offering in Conley v. Gibson, 355 U.S. 41 (1957), an extremely liberal interpretation of Rule 8. Conley contained dictum that a complaint should not be dismissed "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." This phrasing invited abuse, since hypothetical "set[s] of facts" not even pleaded could prevent dismissal. Taken literally, the Conley dictum could make it impossible for a defendant to win a motion to dismiss, thus rendering Federal Rule of Civil Procedure 12 a nullity.

Some courts declined to read Conley literally and continued to hold "that legal conclusions need not be accepted as true on 12(b)(6) motions" and "that pleaders are not entitled to unreasonable factual inferences." Edward A. Hartnett, Taming Twombly, 158 U. Pa. L. Rev. (forthcoming 2010) (manuscript at 16), available at They continued to dismiss complaints that plainly lacked merit. ...

They cite the bone screw mass tort litigation as one in which parallel actions were brought before two federal judges, one of whom dismissed the action as based upon implausible pleadings, the other of whom waved it forward. The second case inflicted millions of dollars in costs on defendants who included blameless doctors and their families before eventually being dismissed on summary judgment.

Around the web, December 29 - PointOfLaw Forum

Around the web, December 28 - PointOfLaw Forum

  • Everyone unanimous around here: NYT editorially urges Congress to overturn Iqbal, then runs letters to the editor from lawyers agreeing with its stand;
  • Yet more "Top Ten of 2009" lists, including employment law and cyberlaw [Ambrogi, Legal Blog Watch] "The Year in Great Big California Verdicts" [Cal Biz Lit] Best (for defense) pharmaceutical cases [Beck]
  • Legal Ethics Forum is generating a list of "Top Legal Ethics Stories of the Decade" and you can help;
  • Video of MI's Jim Copland debating ATLA/AAJ's Ken Suggs on liability reform [Bing; requires Microsoft plugin]
  • "Tort reform is the key to a healthier New Jersey" [Marcus Rayner, NLJRA, Trenton Times]
  • "California Vioxx class action slides into the sea" [economic damages; Beck]

The House Judiciary Committee Subcommittee on Courts and Competition Policy has a hearing scheduled for Wednesday, Dec. 16, on H.R. 4115, the Open Access to the Courts Act. Sponsored by Rep. Jerrold Nadler (D-NY) the bill would restore the notice pleadings standard in federal courts.

Also in Congress this week, the Senate Commerce Committee has already scheduled a confirmation hearing Tuesday for David Strickland to head the National Highway Traffic Safety Administration (NHTSA). As we wrote last week, Strickland is a former lobbyist for the American Association for Justice who has been general counsel of Commerce's consumer protection subcommittee, whence he brought the world the Consumer Product Safety Improvement Act. Committees tend to treat their own quite well in the nomination process.

Strickland is also President Obama's second nominee for the post. The first, Charles Hurley, CEO of Mothers Against Drunk Driving, withdrew his nomination after environmentalists howled about his questioning the wisdom of higher CAFE standards.

UPDATE (Wednesday): Strickland's opening statement at his hearing is here. It's short and sweet and makes sure to pay allegiance to CAFE standards. A committee vote is scheduled for Thursday.

Iqbal, notice pleading and national security - PointOfLaw Forum

Sen. Arlen Specter vs. Sen. Jeff Sessions, in the WSJ letters column.

Gregory Garre, who as U.S. Solicitor General argued the Ashcroft v. Iqbal case before the U.S. Supreme Court (transcript), testified Wednesday at the Senate Judiciary Commitee's hearing, "Has the Supreme Court Limited Americans' Access to Courts?" His 41-page prepared statement is an excellent discussion of pleadings standards and the implications of the Iqbal and Twombly cases.

Also, as a former government official himself, Garre seems especially concerned about the effect of proposed legislation -- such as Sen. Arlen Specter's S. 1504 -- of the use of permissive pleadings to undermine or evade qualified immunity. His conclusion:

There is no reason for Congress to override the time-honored judicial rulemaking process when it comes to evaluating or addressing the Twombly and Iqbal decisions. Indeed, the threshold nature of pleading standards and the interaction between Rule 8 of the Federal Rules of Civil Procedure and other rules (e.g., Rule 12(b)(6) and Rule 15) make this an issue that is particularly well-suited for the expertise and deliberative attention of the Judicial Conference of the United States in carrying out its statutory duty to engage in "a continuous study of the operation and effect of the general rules of practice and procedure." 28 U.S.C. ยง 331.

Also testifying were two critics of the Iqbal decision, John Payton of the NAACP Legal Defense Fund (statement), and Stephen Burbank of the University of Pennsylvania Law School. Chairman Patrick Leahy and Sen. Russell Feingold also had prepared statements (here and here, respectively).

Earlier Point of Law posts here.

Around the web, December 2 - PointOfLaw Forum

Congress keeps up pressure on Iqbal, Twombly - PointOfLaw Forum

The Senate Judiciary Committee holds a hearing Wednesday, Dec. 2, "Has the Supreme Court Limited Americans' Access to Courts?," which we take to be another opportunity to attack the Supreme Court decisions -- Ashcroft v. Iqbal and Bell Atlantic v. Twombly -- that limited notice pleadings by requiring specific factual allegations. On the witness list is Gregory Garre, who as U.S. Solicitor General argued before the U.S. Supreme Court in the Iqbal case on Dec. 10, 2008. (Transcript of oral arguments.) The American Lawyer spoke briefly with Garre, now at Latham & Watkins, in October:

Garre told us that, contrary to reports that called Iqbal a Supreme Court sleeper, "we perceived it to be a very important case all along," not just because the named defendants were former U.S. Attorney General John Ashcroft and former FBI Director Robert Mueller. Garre and his team understood that their case had the potential to establish whether the Court's ruling in Twombly applied only to antitrust cases or constituted a broader interpretation of the Federal Rules of Civil Procedure.

And because the Court's Iqbal opinion specifically addressed the old pleading standard established in a case called Conley, he said, "it was significant in clarifying standards in evaluating the sufficiency of pleading."

Also scheduled to testify at the Judiciary hearing are two critics of the Iqbal decision, John Payton of the NAACP Legal Defense Fund, and Stephen Burbank of the University of Pennsylvania Law School, noted for his writings on federal court rulemaking. (See Tony Mauro, National Law Journal, "Plaintiffs Groups Mount Effort to Undo 'Iqbal.'")

On the Judiciary Committee is Sen. Arlen Specter (D-PA), who has introduced S. 1504 to return the law to a pre-Iqbal standard on pleadings. Last week, Rep. Jerrold Nadler (D-NY)  introduced H.R. 4115, the Open Access to Courts Act of 2009, hailed by the American Association for Justice. (See Mass Tort Defense blog, "Anti-Iqbal legislation update.") Earlier Point of Law posts here.

In Congress, promoting the return of notice pleadings - PointOfLaw Forum

Rep. Jerrold Nadler (D-NY) has introduced H.R. 4115, the Open Access to Courts Act of 2009, to restore notice pleadings, i.e., the status quo ante Twombly and Iqbal.

Nadler's news release announced the bill, "Nadler, Johnson, and Conyers Introduce Bill to Overturn Supreme Court Decision And Restore Access to Courts." The list of supporting organizations is an impressive roster of litigation-minded activists and grievance groups.

American Association for Justice had its news release teed up, "AAJ Calls on Congress to Restore Americans' Basic Legal Protections," which claims the Supreme Court decisions "irrationally raised the bar for Americans seeking justice in employment, discrimination, and other civil cases." Irrationally? A serious question: Why does AAJ think it advances its cause to insult people's intelligence?

In a July post, "Back to the bad old days on pleading?," Walter summarized what's at stake: "Make no mistake: the Supreme Court's recent rulings in Twombly and Iqbal offer the best hope in years for curtailing ill-founded litigation and reducing the scope of needless combat in what remains (by focusing and narrowing issues at an early stage and heading off discovery 'fishing expeditions')." For more, see these posts.

Sen. Arlen Specter (D-PA) had previously introduced S. 1504, the Notice Pleadings Restoration Act.

H.R. 4115 is a short bill, so we've put the entire text in the extended entry.

Around the web, November 18 - PointOfLaw Forum

  • Lynne Stewart ordered to jail with tougher resentencing [WSJ Law Blog, McCarthy/NRO, Steele, our earlier coverage]
  • "What should we do instead of the Obama health reform bill?" [Tyler Cowen]
  • As EFCA sputters, unions push laws for easier organizing in Oregon and other states [WSJ]
  • Des Moines lawyer Roxanne Conlin, of fame, confirms she'll challenge Grassley for Iowa Senate seat; blames voter sexism, not tax embarrassment, for '82 defeat [DMR, Quad City Times]
  • Joseph Falcone and Morghan Richardson (Chadbourne & Parke) on Notice Pleading Restoration Act in Congress to overturn Twombly/Iqbal []
  • Mini-roundup on the Foreign Corrupt Practices Act, all from Mike Koehler at FCPA Professor: "The FCPA As A Foreign Policy Stick"; the recent Frederic Bourke case; "Holder to Corrupt Foreign Officials - We Are Coming After Your Money"; or maybe not, if you're a big enough fish. More: WSJ Law Blog ("biggest ramp up of FCPA prosecutions since the measure was enacted in the 1970s", feds vow to pursue forfeiture).

Rep. Hank Johnson (D-GA) gave an opening statement at the House Judiciary subcommittee hearing, "Access to Justice Denied - Ashcroft v. Iqbal," stating his intention to cosponsor Rep. Nadler's bill to overturn the Supreme Court's Iqbal and Twombly decisions. (See post below.) Johnson is chairman of the Judiciary Committee's Subcommittee on Courts and Competition Policy, and he said he would quickly move to mark up the bill. Full Committee Chairman John Conyers is also on board.

Johnson's wandering statement included an unpleasant suggestion that federal judges might dismiss civil suits so they could land lucrative private sector jobs. At least that's how we read it:

It seems this measure penalizes plaintiffs as opposed to defendants, particularly in discrimination cases where you cannot uncover the wrongdoing without doing some basic discovery. And this decision would do away with that possibility because judges would be in the position to use their subjective wisdom, if you will, or perhaps even their desire to get a high-paying job in the future in the public sec...I mean the private sector, could be jeopardized if, - or it could be enhanced, I'll put it like that - by their ruling on a motion to dismiss based on inadequacy of the pleadings.


Transcribed from the hearing video.

In his opening statement Tuesday at a House Judiciary subcommittee hearing, "Access to Justice Denied - Ashcroft v. Iqbal," Chairman Jerrold Nadler (D-NY) said he would soon introduce legislation to restore the pleadings standards in federal civil cases to those prior to the Supreme Court's decisions in Iqbal and Bell Atlantic Corp. v. Twombly. The legislation will be the House version of Sen. Arlen Specter's S. 1504.

From Nadler's release and opening statement:

This is another wholly invented new rule, overturning 50 years of precedent, designed to close the courthouse doors. This combines with tightened standing rules, and cramped readings of existing remedies, to implement this conservative Court's agenda to deny access to the courts to people victimized by corporate or government misconduct. This is judicial activism at its worst - judicial usurpation of the procedures set forth for amendment the Federal Rules of Civil Procedure.

Ranking Member Jim Sensenbrenner (R-WI) disagreed, saying the Supreme Court merely reiterated longstanding pleading principles applied by lower courts since the 1950s. He added: "If the Iqbal decision is overridden by statute, lawyers would of course save money because their complaints would simply have to list the names of the people sued with no supporting facts. But it would be immensely costly to the cause of justice, the innocent, and to our national security."

From the witness testimony, we highlight the statement of former Assistant U.S. Attorney General Gregory G. Katsas, returning to Jones Day as a partner in November. He concluded:

In short, the Act would do nothing less than create a cloud of uncertainty over five decades of pleading jurisprudence, as developed between Conley in 1957 and Twombly in 2007. That is a recipe for a vast increase in litigation, which would impose huge costs on parties as well as on the already-overburdened federal courts.

The American Association of Justice issued a news release, with the sub-hed describing the argument succinctly: "Hearing today on Ashcroft v. Iqbal decision shows yet another avenue for corporations to evade accountability." The AAJ listed other groups supporting a return to notice pleadings, a who's who of aggrieved activists:

House hearing on Iqbal/Twombly - PointOfLaw Forum

Sounds as if they didn't invite Beck or Herrmann to testify at the hearing today, which is a shame, since they've provided the best coverage on why the Supreme Court's recent jurisprudence on pleadings deserves to be defended rather than steamrollered by a plaintiff's-bar-friendly Congress.

P.S. The hearing page lists only Prof. Arthur Miller's NYU affiliation, not his Milberg affiliation.

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