Justia Civil Procedure Opinion Summaries

Under the Civil Service Reform Act, the Merit Systems Protection Board (MSPB) has the power to review certain personnel actions against federal employees. If an employee asserts rights under the CSRA only, MSPB decisions are subject to judicial review exclusively in the Federal Circuit, 5 U.S.C. 7703(b)(1). If the employee invokes only federal antidiscrimination law, the proper forum is federal district court. An employee who complains of a serious adverse employment action and attributes the action, in whole or in part, to bias based on race, gender, age, or disability brings a “mixed case.” When the MSPB dismisses a mixed case on the merits or on procedural grounds, review authority lies in district court, not the Federal Circuit. Perry received notice that he would be terminated from his Census Bureau employment for spotty attendance. Perry agreed to early retirement. The settlement required Perry to dismiss discrimination claims he had filed separately with the EEOC. After retiring, Perry appealed to the MSPB, alleging discrimination based on race, age, and disability, and retaliation for his discrimination complaints. He claimed the settlement had been coerced. Presuming Perry’s retirement to be voluntary, an ALJ dismissed his case for lack of jurisdiction. The MSPB affirmed, stating that Perry could seek review in the Federal Circuit. Perry instead sought review in the D.C. Circuit, which transferred the case to the Federal Circuit. The Supreme Court reversed. The proper review forum when the MSPB dismisses a mixed case on jurisdictional grounds is district court. A nonfrivolous claim that an agency action appealable to the MSPB violates an antidiscrimination statute listed in section 7702(a)(1) suffices to establish district court jurisdiction. Had Congress wanted to bifurcate judicial review, sending merits and procedural decisions to district court and jurisdictional dismissals to the Federal Circuit, it could have said so. View "Perry v. Merit Systems Protection Board" on Justia Law

Plaintiffs, most of whom are not California residents, sued BMS in California state court, alleging that the pharmaceutical company’s drug Plavix had damaged their health. BMS is incorporated in Delaware and headquartered in New York; it maintains substantial operations in New York and New Jersey. BMS engages in business activities in California and sells Plavix there, but did not develop, create a marketing strategy for, manufacture, label, package, or work on the regulatory approval for Plavix in California. The nonresident plaintiffs did not allege that they obtained Plavix from a California source, that they were injured in California, or that they were treated for their injuries in California. The California Superior Court found that it had general jurisdiction. The state supreme court found that BMS’s “wide-ranging” contacts with the state supported a finding of specific jurisdiction over the nonresident plaintiffs’ claims. The Supreme Court reversed. For general jurisdiction, the “paradigm forum” is an “individual’s domicile,” or, for corporations, “an equivalent place, one in which the corporation is fairly regarded as at home.” Specific jurisdiction requires the suit to “aris[e] out of or relat[e] to the defendant’s contacts with the forum.” The primary concern is the burden on the defendant. The California Supreme Court found specific jurisdiction without identifying any adequate link between the state and the nonresidents’ claims. It is not relevant that BMS conducted research in California on matters unrelated to Plavix. BMS’s decision to contract with a California company to distribute Plavix nationally does not provide a sufficient basis for personal jurisdiction. View "Bristol-Myers Squibb Co. v. Superior Court of California" on Justia Law

The owners of Microsoft’s videogame console, Xbox 360, filed a putative class action alleging a design defect. The district court struck class allegations from the complaint. The Ninth Circuit denied permission to appeal that order under FRCP 23(f), which authorizes permissive interlocutory appeal of class certification orders. Instead of pursuing their individual claims, plaintiffs stipulated to a voluntary dismissal, then appealed, challenging only the interlocutory order striking their class allegations. The Ninth Circuit held it had jurisdiction to entertain the appeal under 28 U.S.C. 1291, applicable to “final decisions of the district courts,” and that the rationale for striking the class allegations was impermissible. The Supreme Court reversed. Federal courts of appeals lack jurisdiction under section 1291 to review an order denying class certification (or an order striking class allegations) after the named plaintiffs have voluntarily dismissed their claims with prejudice. Section 1291’s final-judgment rule preserves the proper balance between trial and appellate courts, minimizes the harassment and delay that would result from repeated interlocutory appeals, and promotes the efficient administration of justice. Under plaintiffs’ theory, plaintiffs alone could determine whether and when to appeal an adverse certification ruling, allowing indiscriminate appellate review of interlocutory orders. Plaintiffs in putative class actions cannot transform interlocutory orders into section 1291 final judgments simply by dismissing their claims with prejudice. Finality “is not a technical concept of temporal or physical termination.” View "Microsoft Corp. v. Baker" on Justia Law

Sherman paid $2.7 million for land in Chester, New York, then sought approval of his development plan. Years later, he filed a regulatory takings suit. Laroe moved to intervene under FRCP 24(a)(2), which requires a court to permit intervention by a litigant that “claims an interest related to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” Laroe alleged that it had paid Sherman $2.5 million in relation to the project, that its resulting equitable interest would be impaired if it could not intervene, and that Sherman would not adequately represent its interest. A unanimous Supreme Court held that a litigant seeking to intervene as of right under Rule 24(a)(2) must meet Article III standing requirements if the intervenor seeks relief not requested by a plaintiff. To establish Article III standing, a plaintiff seeking compensatory relief must have suffered an injury-in-fact, that is fairly traceable to the defendant's challenged conduct, and that is likely to be redressed by a favorable judicial decision. An intervenor-of-right must demonstrate Article III standing when it seeks relief beyond that requested by the plaintiff. The Second Circuit must address, on remand, whether Laroe seeks different relief than Sherman. If Laroe wants only a money judgment of its own running directly against the town, then it seeks damages different from those sought by Sherman and must establish its own standing to intervene. View "Town of Chester v. Laroe Estates, Inc. " on Justia Law

In the 1970s, federal district courts began ordering disgorgement in Securities and Exchange Commission enforcement proceedings. The Commission may also seek monetary civil penalties; 28 U.S.C. 2462 establishes a five-year limitations period for “an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture.” In 2009, the Commission brought an enforcement action against Kokesh for concealing the misappropriation of $34.9 million from business development companies, seeking monetary civil penalties, disgorgement, and an injunction. A jury found that Kokesh’s actions violated securities laws. The district court determined that section 2462’s limitations period applied to the monetary civil penalties but did not apply to the $34.9 million disgorgement judgment. The Tenth Circuit affirmed. A unanimous Supreme Court reversed. SEC disgorgement operates as a penalty under section 2462. It is imposed by the courts as a consequence for violating public laws, i.e., a violation committed against the United States rather than an aggrieved individual, and is imposed for punitive purposes. SEC disgorgement is often not compensatory. Disgorged profits are paid to the courts, which have discretion to determine how the money will be distributed. When an individual is made to pay a noncompensatory sanction to the government as a consequence of a legal violation, the payment is a penalty. Although disgorgement may sometimes serve compensatory goals, “sanctions frequently serve more than one purpose.” View "Kokesh v. Securities and Exchange Commission" on Justia Law