The blog in a nutshell

The blog in a nutshell

Saturday, October 17, 2015

Another problem with Campbell-Ewald: Dual Sovereignty

I want to point out another problem with a complete victory for the Defendant-Petitioner in Campbell-Ewald.  Before I do, let me be clear:  I think such a result is unlikely.  I do not think the Court will get it “correct” (to me, correct is either to accept the Kagan dissent wholesale in Genesis Healthcare, or at least to rule that the existence of a claim for attorneys’ fees eliminates any possibility of mootness).  But I think either Gomez will win on lesser grounds, or Campbell-Ewald will win on the basis of the concession he may or may not have made.

Okay, let’s say that the Court rules that an offer of complete relief moots Gomez’s claim.  That means there’s no “case or controversy” and thus no jurisdiction.  The case must be dismissed…..

….from federal court.  But state courts can hear federal claims too.  There is no “case or controversy” requirement in *state* courts.  Now, granted, some states hold there is an equivalent requirement for access to their own state courts.  And yet, some states don’t.  Even for those states that do, they are not required to follow the Campbell-Ewald decision, and may hold the offer did not moot anything.  So, at least in some states, the case can proceed in state court – even in a case based solely on a federal statute such as the one in Campbell-Ewald.

Right?  Maybe.  The Class Action Fairness Act provides statutory jurisdiction for most class actions, and the federal question jurisdiction statute provides statutory jurisdiction for any case with a federal claim.  But statutory jurisdiction is invalid if there is no Article III jurisdiction, and these statutes are irrelevant.  However, the CAFA and the general laws also provides “removal” from a state court in the same circumstances.  The federal question jurisdiction removal statute requires “original jurisdiction,” so that likely means the case stays in state court (for now.  See below.)  The CAFA is a little more vague, and it is possible to read it as requiring removal regardless of jurisdiction, in which it is possible the cases may just disappear and cannot be brought anywhere.  I do think that reading is a little strained, and, in any event, not all class actions – even ones with federal questions – will be covered by CAFA itself.  (The drafters of CAFA probably did not consider the possibility of a federal claim that did not have federal jurisdiction!)

So, the claim is brought in state court.  It can be removed at any time to federal court…until there’s a Campbell-Ewald offer.  Then the claim must go back to state court, which can proceed with it as it likes.  But if the case is still proceeding, is there now a case or controversy? Who knows!  If there is, does the case get stuck in a permanent loop?  The case starts in state court, gets removed to federal court, gets remanded due to lack of case or controversy, then goes back to state court, where it proceeds and is thus removed to federal court, where it gets remanded due to lack of case or controversy….it’s a bad computer programming loop.

And certainly once the case gets certified, there’s now other claims that have not been “settled,” so there’s a case and controversy.  The case can be removed again, right?  Can the federal Court review the certification question?  And if it reverses, does the case go back to state court due to a lack of case or controversy…who can then re-certify…so it gets removed to federal court, who de-certifies, and thus remands to state court….who can then re-certify….

There are two potential "solutions" the Court may take to resolve this problem.

The first is essentially to ignore it.  In Genesis Healthcare, the District Court dismissed that case "with prejudice."  There's no independent rule here.  This is simply shorthand, an informal way to say "you can't bring the case again."  But, for some reason, courts tend to treat this as a legal category instead of shorthand.

It makes sense to dismiss a claim for mootness "with prejudice" only to the extent that means "don't come back to federal court claiming federal jurisdiction again."  But that decision should not be given any weight as "res judicata" (settled) in state court, for the reasons I mention above.  After all, the case was not actually decided by the Court, indeed, they have no jurisdiction to decide the case, and therefore to affect the parties' rights in any way whatsover.   Still, there's a concern-one with no actual legal basis, as far as I can tell-that federal courts will dismiss "with prejudice" and state courts will abide by the "result" of the federal litigation.

The second solution was actually discussed at oral argument, and I think that if the Court is going to rule for Campbell-Ewald without relying on the concession theory, this will be it.  This solution is, instead of dismissing the case for lack of jurisdiction, to grant judgment for the plaintiff.  That solves the dual sovereignty problem, since the Court takes jurisdiction of the case and resolves it on the merits (sort of).  The problem with this result is that granting judgment is not a constitutionally mandated obligation of the Court.  It is, instead, based on statutory-ish requirements (the Federal Rules of Civil Procedure), and the Court's own discretion (which, presumably, can be trumped by Congress's will),

And this poses three concerns.  The first is that the relevant precedents the Court is relying on, and have discussed this and similar problems with, focused on mootness, not judgment.  Such an abrupt switch in the source of claim avoidance exposes the process-oriented nature of what the Court would be doing.  That's not to say they haven't been this nakedly outcome-oriented in the past, but the Court tries to hide what it is doing in legalese, and switching the basis makes this considerably harder.  The second is that the Federal Rules don't appear to contemplate these forced "settlement" judgments.   (Kagan discussed this in detail in her Genesis dissent). The third is that, while prudential reasons should be read to require judgment to be granted to the plaintiff when he indeed gets everything he asked for, and only continues for illogical or unethical reasons, prudential grounds really feel inappropriate when they have the effect of overturning the will of Congress that parties can bring these class actions.  

This wouldn't be the first time, or even the most obvious time, the Supreme Court came up with policy reasons to ignore or trump the will of Congress, ahem, Shelby County, but usually the Supreme Court tries to tie their analysis to a constitutional provision (or instead claims that it is just faithfully doing Congress's expressed will, a concept that does not really work here, since this prudential discretion isn't based on statute).  But it can't do that here unless it sticks to a jurisdictional concept such as mootness.  (Such a decision might also, of course, be subject to reversal by Congress, who *might* be able to statutorily require the Court to not enter judgment in this way.  In any event, I do not think Congress would pass such legislation anytime soon.)

Our multi-sovereign system simply is not programmed to receive a decision in favor of the Defendant-Petitioners in Campbell-Ewald.  That should be a good hint that such a decision is incorrect.

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