I. CIVIL PROCEDURE IN CONTEXT
The Federal Rules of Civil Procedure
(See Supplement pp. 147-49, 150-57;
see also Casebook pp. 15-17)
• Under the Rules Enabling Act, Congress granted the Supreme Court the power to promulgate “rules of practice and procedure” for cases in federal court, and the Supreme Court has delegated that power to committees of the Judicial Conference.
• Revisions promulgated by Supreme Court; Rules restyled in 2007.
• Multiple layers of comment and revision, with Congress getting 6 mos. to reject proposed revisions.
– Present structure makes it hard to create sweeping changes.
– Allows continued attention to procedural problems, not just response to crises.
• Federal Rules widely adopted by 35 states, including Michigan – but some states (CA, NY, IL) use Codes (i.e., legislation that controls procedure).
Incentives to litigate: Types of Remedies
· Common law, revenue-generating money damages
o Compensatory (make whole) damages
o Liquidated and Statutory Damages
o Punitive Damages (punishment)
· Equiable, other relief
o Specific Performance
§ Except ejectment and replevin (these were available in common law courts NOT courts of equity.
· Temporary/Provisional Remedies
o Injunctions, orders, etc.
Rule 1. SCOPE & PURPOSE
These rules govern all procedure, except as stated in Rule 81.
Meant to secure just, speedy, and inexpensive determination of every action and proceeding.
Rule 2. ONE FORM OF ACTION
Collapsed law and equity courts. There is one form of action – the civil action.
Litigation in Court
Privately agreed-upon substantive law, procedural rules, and remedies generally making arbitration relatively more confidential, quicker and cheaper without:
punitive remedies; or
Publicly established substantive law, procedural rules, and remedies generally making litigation in court relatively less confidential, slower and costlier with:
punitive remedies; or
Neutral, private decision-maker and fact-finder
Neutral, public decision-maker and fact-finder (including juries in some cases)
No appeal except in extraordinarily limited cases:
exceeded power/violation of public policy
Limited appeal in all cases:
generally, after final judgment
narrow scope of review
1. Federal Policy Favors Enforcement of Agreements to Arbitrate
• Agreements to arbitrate are enforceable in federal district court under the Federal Arbitration Act of 1925, 9 U.S.C. §1 et.seq. (“Arbitration Act”)
• 9 U.S.C. §2 declares it to be federal policy to enforce agreements to arbitrate a controversy arising out of a contract or transaction involving commerce
• and 9 U.S.C. §3 requires a federal judge, upon application of a party, to stay a lawsuit brought in federal court pending arbitration of any issue referable to arbitration
• and 9 U.S.C. §4 permits a federal judge to order arbitration of claims covered by an enforceable arbitration agreement
• but 9 U.S.C. §1 excludes from the scope of the Arbitration Act “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
2. Federal Arbitration Act Preempts Hostile State Anti-arbitration Statutes
3. Arbitration of Individual Employment Law Claims
• Ferguson v. Countrywide Credit Industries, Inc., 298 F.2d 778 (9th Cir. 2002) – Countrywide’s arbitration agreement was unenforceable on grounds that agreement was unconscionable (under California law) and, therefore, district court’s denial of Countrywide’s petition to compel arbitration of sexual harassment claims affirmed
• Carter v. Countrywide Credit Industries, Inc., 362 F3d. 294 (5th Cir. 2004)(“there is a strong presumption in favor of arbitration and a party seeking to invalidate an arbitration agreement bears the burden of establishing its invalidity.”) Countrywide’s arbitration agreement was enforceable on grounds that not unconscionable (under Texas law) and, therefore, district court’s order compelling arbitration of FSLA claims affirmed
4. Agreements to arbitrate are enforced under general, state substantive contracts law
5. Rogers, “The Procedural Differences Between Litigating in Court and Arbitration: Who Benefits?
“Court procedures simply do not provide an efficient mechanism for resolving disputes. … [And] there often is nothing fair to any party about employment litigation in court.”
pleading far more lenient in arbitration
discovery and pre-trial
– disclosure of documents equal to or greater in arbitration
– fewer depositions in arbitration offset by relaxed rules of evidence
– ABA due process protocol (award of attorney’s fees)
– D.C. Circuit Cole v. Burns (employer pay costs)
– fewer dispositive motions granted in arbitration
– relaxed evidentiary rules, less need for lawyer in arbitration
– no juries in arbitration
– appeal even more limited in arbitration
in general, arbitration is: faster; cheaper; more private
6. Estreicher, “Saturns for Rickshaws: The Stakes in the Debate over Pre-dispute Employment Arbitration Agreements.”
• “The unspoken (yet undeniable) truth is that most claims filed by employees do not attract the attention of private lawyers because the stakes are too small and outcomes too uncertain to warrant the investment of lawyer time and resources. … A properly designed arbitration system, I submit, can do a better job of delivering accessible justice for average claimants than a litigation-based approach.”
• FAA preempts state anti-arbitration laws [except to the extent state contract law, generally, recognizes broad grounds – such as unconscionability – for revoking contracts] • If Circuit City v. Adams had not affirmed the preemption of the FAA over state law, the result would have been (1) increased litigation over the enforceability of agreements to arbitrate and (2) employers would have abandoned their existing ADR schemes
• As lawyers we should care about increasing access to justice (“improving the quality of justice in our society”) and with reducing the load on overburdened courts
• To be enforceable, arbitration agreements must be fairly designed so that employees are waiving only procedural rights, not substantive rights
– arbitrator must be competent and authorized to apply statutory law
– award statutory remedies and attorney’s fees (if provided by statute)
– reasonable opportunity for discovery
– issue written opinion
– employer-paid costs
7. AAA National Rules for Resolution of Employment Disputes
– Initiation of Arbitration
a. The parties may submit a joint request for arbitration.
b. In the absence of a joint request for arbitration:
i. The initiating party (hereinafter “Claimant[s]”) shall:
1. File a written notice (hereinafter “Demand”) of its intention to arbitrate at any office of the AAA, within the time limit established by the applicable statute of limitations. Any dispute over the timeliness of the demand shall be referred to the arbitrator. The filing shall be made in duplicate, and each copy shall include the applicable arbitration agreement. The Demand shall set forth the names, addresses, and telephone numbers of the parties; a brief statement of the nature of the dispute; the amount in controversy, if any; the remedy sought; and requested hearing location.
2. Simultaneously provide a copy of the Demand to the other party (hereinafter “Respondent[s]”).
3. Include with its Demand the applicable filing fee, unless the parties agree to some other method of fee advancement.
ii. The Respondent(s) may file an Answer with the AAA within 15 days after the date of the letter from the AAA acknowledging receipt of the Demand. The Answer shall provide the Respondent’s brief response to the claim and the issues presented. The Respondent(s) shall make its filing in duplicate with the AAA, and simultaneously shall send a copy of t
An arbitrator or other person authorized by law to subpoena witnesses or documents may do so upon the request of any party or independently. The arbitrator shall be the judge of the relevance and materiality of the evidence offered, and conformity to legal rules of evidence shall not be necessary. The arbitrator may in his or her discretion direct the order of proof, bifurcate proceedings, exclude cumulative or irrelevant testimony or other evidence, and direct the parties to focus their presentations on issues the decision of which could dispose of all or part of the case. All evidence shall be taken in the presence of all of the arbitrators and all of the parties, except where any party is absent, in default, or has waived the right to be present.
If the parties agree or the arbitrator directs that documents or other evidence may be submitted to the arbitrator after the hearing, the documents or other evidence shall be filed with the AAA for transmission to the arbitrator, unless the parties agree to a different method of distribution. All parties shall be afforded an opportunity to examine such documents or other evidence and to lodge appropriate objections, if any.
II. COMMENCING & RESPONDING TO A LAWSUIT – PLEADINGS
Rule 8. GENERAL RULES OF PLEADING: Did you give notice and state a claim for relief?
1. No requirement of evidence in the complaint.
2. You may amend complaint to add more claims that arise out of the same transaction. (thus, they involve the same witnesses, and documents, etc.)
a. Larson v. American
3. (a) Claim for Relief. A pleading that states a claim for relief must contain:
i. a short and plain statement of the claim showing that the pleader is entitled to relief; and
– Notice pleading—generally only have to put the other side on notice by including enough information to give Δ a fair chance to respond
– Rule 9(b)—must plead in detail under circumstances of fraud and mistake; must be particularized
– Rule 9(g)—must plead with specificity if you seek relief for special damages (those that do not normally flow from an event)
ii. a demand for the relief sought.
Conley v. Gibson OLD RULE “A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove NO SET OF FACTS in support of his claim which would entitled him to relief….All the Rules require is a ‘short and plain statement of the claim that will give the defendant fair notice of what the plaintiff’s claim is and that grounds upon which it rests…The Federal Rules…accept the principle that the purpose of pleading is to facilitate a proper decision on the merits.
Bell Atlantic Corp. v. Twombly: NEW RULE NO factual context alleged. Complaint needs enough facts to state a claim to relief that is plausible on its face.
Sherman Act: forbids price fixing, restraint of trade or “non-competing” by agreement or conspiracy (inferred by “parallel conduct” + some other circumstances or facts that lead to an inference of an unlawful agreement). These required elements were not present in Pl.’s complaint.
Consequences: “no set of facts” language in Conley v. Gibson is gone. “Plausibility” language likely to cause problems.
Dissent: Pl. alleged an agreement. The “plausibility” of an allegation is not a legally acceptable reason for permitting dismissal of the complaint. Practical concerns drove the majority’s decision (i.e. expensive discovery in anti-trust cases and the risk of jury confusion), which can be solved by: (1