“Small Claims Flash Mob.”  That’s what the LA Times is calling an enterprising Californian’s efforts to dissuade class members from settling their class claims with Honda.  A 2007 class action complaint alleges that Honda falsely advertised the fuel economy of Civic Hybrids (5:07-CV-00287). The class action settlement notice (pdf) offers rebates for as little as $100 towards the purchase of a new car.  Instead, Heather Peters is urging other Honda owners to take their individual claims to small claims courts, especially in California where the legislature recently raised the jurisdictional amount from $7,500 to $10,00.  See CA Civ Pro 116.221, amended by Senate bill 221.

The LA Times notes that,

If she’s successful in getting others to follow her example, Peters could inspire a whole new litigation strategy in the auto industry and other businesses. Working together but filing lawsuits independently, consumers could force companies to go mano a mano with individual plaintiffs in far-flung courtrooms nationwide.

Interestingly, there might be precedent for the flash mob strategy in California. Even if the cases were to be consolidated, the small claims court might maintain jurisdiction (thus, no attorneys allowed pursuant to CA Civ Pro 116.530.) California Jurisprudence notes that the small claims division was established to provide a forum to resolve  “minor” civil disputes.  The word “minor”

… refers to the financial value of the claim to the individual plaintiff. The jurisdictional amount limitations apply to each plaintiff’s individual claim, and the fact that on consolidation of the claims of several individual plaintiffs the aggregate amount is greater than the limit is immaterial. Thus, the small claims court had jurisdiction to hear 183 consolidated claims against a city alleging that city airport noise constituted a continuing nuisance causing damages to each claimant in the maximum jurisdictional amount for each claimant, even though the claims raised complex issues.

CAJUR COURTS § 227, discussing City and County of San Francisco v. Small Claims Court, 141 Cal. App. 3d 470, 190 Cal. Rptr. 340 (1st Dist. 1983).

RESEARCH REFERENCES

For related filings, try: (fuel /3 economy ) & TI(honda) in CA-FILING-ALL

Recommending a simple search for news and alerts.  Try, honda and fuel-economy and small-claims in ALLNEWS.

Note that the settlement notice cites 5 related cases:

The Supreme Court’s reinterpretation of F.R.C.P. 8 in Bell Atlantic Corp v. Twombly, 550 U.S. 544 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009) revolutionized pleading practice and created a tsunami of case law concerning the level of specificity required in complaints.  But, plaintiff’s counsel are not the only lawyers having to rethink pleading practice in the wake of Twombly and Iqbal — defense counsel are also scrambling.  The number of motions brought to strike affirmative defenses under F.R.C.P 12(f) for being “insufficient” appears to be rising dramatically over the last four years and, since 2007, there have been no fewer than 80 district court decisions offering up conflicting conclusions to this question: do the higher pleading standards of Twombly apply to affirmative defenses, or only complaints?*

In the last two months alone, at least ten district courts have ruled on the issue, most finding that pleading standards for complaints did not apply to defenses asserted by a party responding to a complaint.  See, e.g.,  Reimer v. Chase Bank (2011 WL 2110242),  Schlief v. Nu-Source (2011 WL 1560672), and Tyco v. Victaulic (2011 WL 1399847).   But in many other recent decisions, courts reached the opposite conclusion – that Twombly and Iqbal should be applied to affirmative defenses.  See, e.g., Hayn v. Green Ford Sales (263 F.R.D. 647), Castillo v. Roche Labs (2010 WL 3027726).  To date, no appellate court has ruled on the issue.

The Kansas District Court’s decision last month in Fally v. Friends Univ. (2011 WL 1429956) is representative of those decisions refusing to apply Twombly.  As its primary justification, the court noted that the burdens associated with pleading claims under Rule 8(a)(2) which provides for “a short and plain statement of the claim” should be read independent of Rule 8(c)(1) which only concern affirmative defenses:  

The differences between the Rule 8 requirements … are significant to the court. Under the plain language of Rule 8, a party making a claim for relief in a complaint must plead allegations showing that such party is entitled to relief. No such requirement appears in subsection (b) or (c) governing defenses. To the contrary, a responding party must state defenses in short and plain terms. Fed.R.Civ.P. 8(b)(1)(A). And, arguably, a responding party asserting affirmative defenses is required to do no more than “affirmatively state” such affirmative defense. 

Falley v. Friends Univ., CIV.A. 10-1423-CM, 2011 WL 1429956 (D. Kan. Apr. 14, 2011)

The court went on to find that Twombly’s higher standard — which requires that claims “raise a right to relief above the speculative level” — should apply only to claims assertion under 8(a) and has no relationship to subsection (b) or (c) — “where the pleading party bears no burden of showing an entitlement to relief.” 

To bolster its decision, the Falley court also concluded that maintaining higher pleading standard for complaints makes sense because plaintiffs may take years to investigate a complaint (limited only by the statute of limitations), but once the complaint is served, a defendant has only 21 days in which to serve an answer.  Accordingly, it makes better sense to require more factual description of a plaintiff than a defendant.  In addition, the court noted that applying the Twombly standards to answers would result in increased motion practice with little practical impact – defendants are often allowed leave to amend as a remedy. 

Conversely, courts finding Twombly applicable to affirmative defenses reason that the interpretation of Rule 8(a) in Twombly applies to all pleadings not just to complaints.  They also tend to find that the practical purposes underlying Twombly – the weeding out of unnecessary claims and the prevention of unnecessary costs – should apply equally to affirmative defenses.  Examples of this type of reasoning can be found in Shinew v. Wszola (2009 WL 1076279) and United States v. Quadrini (2007 WL 4303213).

Back in the day of notice pleading, bare-bones affirmative defenses were accepted practice.  Today, however, the lack of clarity among the courts on whether the Twombly standards extend to responsive pleadings, creates a bit of a conundrum for defense practitioners and for court houses.  If defense counsel files a thinly worded response believing an affirmative defense might apply, but they have not yet fully fleshed out evidence to support that defense, they now run the risk of inviting a 12(f) motion under Twombly (thus, creating work for the judge and clogging dockets).   On the other hand, it hardly seems fair to require defense counsel to come up with detailed defenses given short federal response times.  Certainly, in the days following the filing of a lawsuit, defendants often lack the factual information that would enable them to meet the higher pleading standard.

Until the appellate courts sound off on the issue, defense counsel should be aware the some district courts are inclined to hold the pleading of affirmative defenses to a higher standard and prepare their responses accordingly.

*   My search (below) in FED-FILING-ALL for the four years prior to Twombly, delivers just 730 motions and supporting memorandum seeking removal of affirmative defenses.  In the four years since Twombly, the Westlaw database contains  nearly double the number of filings – 1326.

 PR((MOTION +3 DISMISS STRIKE) /30 “AFFIRMATIVE DEFENSE”) & 12(F) & da(aft 6/2003 & bef 6/2007) % PR(REPLY RESPONSE OPPOSITION)

 To pull primary law, try running a plain language search in WestlawNext for “application of twombly to affirmative defenses.”  The search will also pull up a growing body of secondary source materials addressing the topic.

[Editor's Notes: A Word version of this post is available here: affirmativedefenses if you care to cite check this document.  While this document certainly does not purport to include a comprehensive list of the relevant case law, you might find updating this document with WestCheck helpful.  The web version of Westcheck is here:  www.westcheck.com.

For appeals, set up docket alerts using party names or, on occassion, try the the following search in the DOCK-CTA database:

ptn((Reimer and Case) (Tyco and Victaulic)  (Hayn and "Green Ford") (Castillo and Roche) (Fally and Friends) (Shinew and Wszola) (Quadrini)) ]

Rarely a day goes by that a Reference Attorney isn’t asked to jump into the thick of discovery practice, searching for cases to cement a motion to compel or justify the imposition of sanctions. Most seek florid federal circuit court language finding abuse of discretion for imposing or failing to impose sanctions or which drives home what so very few circuit opinions will do – find that lawyers who don’t follow the rules should (or should not) be punished in the strongest manner possible.

That there are so few helpful circuit level opinions concerning discovery abuse is no great secret; these decisions are interlocutory. Further, circuit courts are loath to mediate smaller discovery battles preferring to reserve their energies for ultimate issues. On the other hand, while district courts are certainly in the best position to observe (suffer) conduct and are granted considerable discretion in these matters, they tend to shy away from the harshest of sanctions – dismissal or default judgment  - opting instead to verbally dispense discovery rulings and/or find a path to the merits. The end result is a very shallow pool of federal case law on dismissal as an appropriate sanction for discovery abuses.*

Enter Judge Gorsuch from the Tenth Circuit. With his decision this month in Lee v. Max International, LLC (2011 WL 1651640), U.S. Judge Gorsuch has provided front line discovery warriors language to sink their teeth into:

“How many times can a litigant ignore his discovery obligations before his misconduct catches up with him? The plaintiffs in this case failed to produce documents in response to a discovery request. Then they proceeded to violate not one but two judicial orders compelling production of the requested materials. After patiently affording the plaintiffs chance after chance, the district court eventually found the intransigence intolerable and dismissed the case as sanction. We affirm. Our justice system has a strong preference for resolving cases on their merits whenever possible, but no one, we hold, should count on more than three chances to make good a discovery obligation.”

Lee v. Max Int’l, LLC, 10-4129, 2011 WL 1651640 (10th Cir. May 3, 2011).

Upholding dismissal as a sanction, Judge Gorsuch explains in very specific terms when enough is enough and warns of the consequences of bad “discovery karma”:

Plaintiffs in this case were given no fewer than three chances … When a party feels at liberty to disobey not just a discovery request but two court orders compelling production of the same material in its control, weeks or months (as in this case) pass without progress in the litigation. Hours, days, weeks of lawyers’ time are consumed at great expense. Focus shifts from the merits to the collateral and needless. This is not speedy, inexpensive, or just. Just the opposite. And no doubt tolerating such behavior would encourage only more of it. But there is such thing as discovery karma. Discovery misconduct often may be seen as tactically advantageous at first. But just as our good and bad deeds eventually tend to catch up with us, so do discovery machinations. Or at least that’s what Rule 37 seeks to ensure.

Lee v. Max Int’l, LLC, 10-4129, 2011 WL 1651640 (10th Cir. May 3, 2011)

In the age of e-Discovery, where discovery maneuvering to gain tactical advantage and the resultant fights are becoming increasingly intense, lawyers seeking to shore their dismissal appeals will no doubt draw on Judge Gorsuch’s “three chances” language. Indeed, if you are up for another primer on what not to do in a discovery battle, check out this (2011 WL 1770468)  recent (and entertaining) bench-slapping out of the DC Circuit which quotes the Lee decision throughout.

*But, try these ideas. Circuit opinions concerning dismissal as a discovery sanction can be found by running the following search in federal circuit decisions (CTA):

DI(170AK1636 and DISMISS!)

The KeyNumber is for sanctions for failure to reply to discovery requests.  Try a more targeted search:

170AK1636 /P REPEAT! REGULAR! +3 COMPL! NON-COMPL! VIOLAT! REFUS! FAIL!

I recently returned from the annual Expo of the International Association of Amusement Parks and Attractions (IAAPA) held in Orlando. One of the important issues discussed in several class seminars was the new Americans with Disabilities Act Accessibility Guidelines (ADAAG).  While the amusement industry strives to put smiles on people’s faces and to appeal to the broadest spectrum of the population as possible, safety of all guests is a prominent concern to the industry.  Operators are constantly striving to have a good working knowledge of the A.D.A. requirements and how they impact operations.  Such knowledge becomes extremely complex when you look at the wide variety of goods and services offered at an amusement facility or traveling show.  The facility or show not only provides amusement rides, but it also provides water attractions, go-karts, miniature golf, indoor theaters, restaurants, games, shopping, camping facilities and restrooms.  Each of these areas has its own nuances and requirements under the ADAAGs.

On September 15th of this year, the Civil Rights Division of the Department of Justice promulgated a final rule amending its ADA Title III regulation, which covers nondiscrimination on the basis of disability by public accommodations and in commercial facilities.  The final rule can be found on Westlaw at 75 FR 56164. For earlier versions of the rule, you can use the Regulation Identification Number (RIN), 1190-AA46, as your search term in the FR database.  (A very common research question is, ‘I have the notice of proposed rule making, has the agency adopted the final rule?’ Most agencies, but not all, use RINs.  If you’ve got one, run it as your search term to find related proposed, amended and final rules.)

The final rule adopts the 2004 ADAAG and makes them operable six (6) months after publication or on March 15, 2011; while the 2010 Standards (ADAAG) will become enforceable eighteen (18) months after publication or March 15, 2012.  With the promulgation of 2010 Standards, amusement operators will be looking at ways to better accommodate hearing-impaired and sight-impaired guests.  Keep your eyes open for future discussions on this topic.

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[Editor's Note:  This is first in a brief series of posts relating to pre-trial research including an interview with West author Jay Grenig on eDiscovery.] 

Meeting deadlines is stressful enough.  Determining what those deadlines might be shouldn’t add greys.  In May, Cher Estrin of the Organization of Legal Professionals noted:  

Most common sources of stress for legal professionals are undefined deadlines, lack of control over time, difficult clients, escalating intensity, no margin for error – are outside of a paralegal’s personal control.   

On the list of Reference Attorney FAQ’s is, ‘How many days do I have to file this?”  I can’t promise to improve your  mental health but I can recommend one of the most popular Reference Attorneys tools, least known to researchers.   KeyRules distills timing, formatting, and other general pleading and discovery requirements into a single document.  Here’s a simple example of how to use the tool.  Let’s say you’re working pro hac vice in New York.  Your client has been sued in New York County, but you have never litigated there and do not know where, when, and how to file your answer. First, access the KEYRULES-NY database.  The default search method here is the Template.  Select New York Supreme Court (New York County) and Search Pleadings as your Document Type.  You are then given further options based on your Document Type:  We’re looking for rules regarding filing an answer.  So, select Answer, then click Search Westlaw.  You get one result (NY KR Supreme 4), a document created by West editors that summarizes and links to state and local rules relevant to answers.  KeyRules documents are typically organized into the following sections:  The document outlines the relevant deadlines and links you to rules regarding the computation of time.  Also note that at the top of the Timing section, a link to Westlaw Legal Calendaring. Very briefly, Westlaw Legal Calendaring calculates litigation deadlines for you based on state and local court rules.  You can then export the deadlines to your Microsoft Outlook Calendar and use its features to keep track of them. In addition to pleading rules, KeyRules has outlines for state and federal discovery, bankruptcy, and intellectual property. A free KeyRules user guide is available on the Thomson Reuters website. 

Pre-trial research issues have some inherent, built-in challenges.  Typically, pre-trial issues are not litigated to the point where one might find, for example, ‘authority’ that supports a researcher’s particular view of an ugly discovery dispute.  Moreover, e-discovery obligations present new and significant challenges for litigators.  (See our interview with Robert Haig.)  And, rules of procedure aren’t often written to accommodate the calendaring systems of professionals who understand better than anyone else that deadlines matter.

This week, West author and Marquette University Law Professor, Jay Grenig visits Eagan to talk e-Discovery.  Mr. Grenig is author of eDiscovery & Digital Evidence (Westlaw database: EDISCOVERY).  We’re using the event as an opportunity to collect solutions for these pre-trial research challenges.  Specifically,

Mike will highlight available checklists and resources for sample discovery.

Ryan will discuss discovery sanctions.

Savita will provide queries for finding authority regarding discovery objections.

Todd will address timing and calendaring issues.

Finally, we’ll talk with Jay Grenig about eDiscovery, social media, and his ‘lawyer friendly’ approach to practicing law in the digital universe.

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Don’t Ask, Don’t Tell *may* just have been made a thing of the past.

On Tuesday, U.S. District Judge Virginia Phillips issued an immediate injunction against the U.S. government’s further enforcement of its Don’t Ask, Don’t Tell (DADT) policy.  The government was additionally ordered to immediately cease all active discharge proceedings and investigations. The order can be found on Westlaw at 2010 WL 3960791.

Judge Phillips, at the end of a two week trial initiated by the Log Cabin Republicans and Service Members United, ruled the law to be unconstitutional as it violates service members’ free speech rights, due process rights and the right to petition the government for redress of grievances.

All eyes are now on the Obama administration.  Should the administration appeal the ruling, DADT may continue on as a policy.  If not, DADT may be done.  According to Fox News:

If the government does not appeal, the injunction cannot be reversed and would remain in effect. If it does, it can seek a temporary freeze, or stay, of her ruling. An appeal would go to the U.S. Court of Appeals for the 9th Circuit. Either side could then take it to the U.S. Supreme Court.

The administration has 60 days (and no legal obligation) to appeal Phillip’s ruling. If the November elections result in a Republican Congress, the likelihood of Congressional action to end DADT drops significantly,  making Obama’s campaign promise to end DADT unreachable but through his refusal to appeal this ruling. 

The clock is now ticking on the fate of this policy.

UPDATE: According to Reuters, the Obama administration has decided to request the judge stay her ruling pending appeal. //

In a recent order United States Magistrate Judge James L. Cott (Southern District of New York), denied Gucci’s application for a protective order against the disclosure of the privileged communications of Gucci’s Vice-President, Director of Legal and Real Estate Jonathan Moss, on attorney-client grounds.  See entry 125 at 1:09CV04373.  The Court recognized that for the duration of his employment with Gucci, Jonathan Moss was an inactive member of the California State Bar.

The court claims that an essential element of the attorney-client privilege is that an attorney participates in the communication.  The court reasoned that an attorney is one who is “admitted to the bar of a state or federal court.”  In re Rivastigmine Patent Litigat., 237 F.R.D. 428.  Cott cites Wright and Miller’s Federal Practice and Procedure sec. 5480 : “[I]nactive or retired membership that does not permit the member to practice law will not suffice.”  The Order stated that “Moss did not possess the type of bar membership that authorized him to engage in the practice  of law.  California explicitly limits the practice of law to active members.”  Cal. Bus. & Prof. Code Sec. 6125.  Since Moss had no bar membership authorizing him to practice law in any jurisdiction, Gucci’s communications would not satisfy any standard of the attorney-client privilege.

The court’s order continues to look at the federal common law that a client can avail itself of the privilege if the client can demonstrate that it reasonably believes the person (Moss) was authorized to practice law.  In this case, however, Gucci cannot make this claim.  Once Gucci promoted Moss to a legal position, it was obligated to conduct some due diligence to confirm Moss’s professional status as an attorney.  Minimal due diligence includes that Gucci confirm Moss was licensed in some jurisdiction, that the license authorized him to practice law, and that he was not suspended from practicing or faced disciplinary sanctions.

This Memorandum and Order appears to place a burden on corporations, and potentially outside counsel, to check in-house counsel’s bar status before discussing privileged corporate information with that counsel and most certainly before placing any documents involving that counsel on a privilege log in front of opposing counsel.  Corporations can easily confirme in-house attorney licensure by using the appropriate Individual State  ATTYLICENSE-XX  database on Westlaw.

Much has been written about a request by Netflix for rehearing en banc by the Federal Circuit.  Netflix would like to be reheard en banc regarding the recent denial of their request for attorneys fees incurred defending a patent claim (2010 WL 1293379). 

Netflix and BlockBuster among others were sued by Media Queue for supposed patent infringement.  The Northern District of California granted summary judgment for Netflix. 

However the US District Court also denied the request by Netflix for over $1,000,000 in attorneys fees.  Netflix appealed this decision to the Federal Circuit, and after the Federal Circuit at first sided with Media Queue, Netflix has moved for rehearing en banc (672 F.Supp.2d 1022). 

Netflix would like the court to adopt a more liberal standard for awarding attorneys fees, it is hoped that this will act as a deterrent to future baseless patent claims.  Netflix would have the courts apply an “objectively reckless” standard for awarding attorneys fees.

Depending on what the Federal Circuit decides to do with this case, it could end up being very important precedent.  You can set up a Docket Alert to track developments in this case with the docket number 10-1199.

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While it may have been a while since Bernie Madoff was front-page news, his escapades are still a popular research topic for attorneys.  The Reference Attorneys continue to receive a fair number of calls concerning litigation involving Mr. Madoff.

While a DOCK-ALL or ALLNEWS search is probably best (remember to truncate Bernie as bern!)  we’ve also had one or two customers asking if Westlaw has any Madoff-specific databases.  While no such database is currently available for Bernie Madoff, Westlaw does have several databases focused on famous, popular, or otherwise “notable” cases.

 Perhaps the best example of a notable case would be the O.J. Simpson trial, which has a few databases dedicated to it: OJ-COMMENT includes case commentary, while OJ-TRANS is comprised of trial transcripts and other documents.  There are similar databases available for the Unabomber (UBABOMB-TRANS), Timothy McVeigh (MCVEIGH-TRANS and MCVEIGH-DP), and the even the JKF assassination (JFK-TRANS).  If violence isn’t your thing, you can also check out MICROSOFT-TRANS and MICROAPP-DOC, which cover the Microsoft antitrust litigation.

 If you’re ever curious if we have a database specific to a notable trial, try typing the name of the trial’s defendant in Search for a Database.  For example, in the case of Bernie Madoff try entering “Madoff” in Search for a Database.  Westlaw will tell you that you’ve entered an invalid database.  Typing “OJ Simpson,” however, will get you several options to choose from.

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