Second Circuit Rules on Scope of Arbitrators' Subpoena Power Re Non-parties to Arbitration Proceeding

Section 7 of the Federal Arbitration Act, 9 U.S.C. § 7, “does not enable arbitrators to issue pre-hearing document subpoenas to entities not parties to the arbitration proceeding.”

Life Receivables Trust v. Syndicate 102 at Lloyd’s of London, 07-1197-cv (2d Cir. Nov. 25, 2008)

"Romanette": I didn't know either Mr. Chief Justice

From Legal Times:

November 10, 2008

Assistant to SG Teaches Chief Justice a New Word

Today's oral argument in United States v. Hayes was dense with debate over rules of grammar and statutory interpretation, all aimed at figuring out what Congress meant when it passed a statute in 1996 that expanded the scope of a law that makes it a crime for those convicted of felonies to possess a firearm. Just how far the new law went to include those convicted of domestic violence misdemeanors was the subject of the day, and by the end of the hour it was harder to predict the outcome than it was at the beginning.

One bright spot in the colloquy came during Assistant to the Solicitor General Nicole Saharsky's defense of an expansive view of the law. In discussing the statute at issue, 18 U.S.C. 922 (a)(33)(A)(i) and (ii), justices had been referring, awkwardly, to sections "little eye" and "little eye eye." But Saharsky had a far better way. She called them "Romanette one and two," using an obscure but self-explaining and almost whimsical term for a lower-case Roman numeral.

"Romanette?" asked Chief Justice John Roberts quizzically.

"Oh, little Roman numeral," Saharsky replied offhandedly. No biggie.

"I've never heard that before!" said Roberts. "That's ... Romanette."

In all his days in the solicitor general's office and in private practice, Roberts had apparently never run across the term. The audience laughed -- including many, to be sure, who had never heard the word before themselves. Chief justices, along with everyone else, can learn something new every day.

Posted by Tony Mauro on November 10, 2008 at 03:42 PM in Supreme Court | Permalink

http://legaltimes.typepad.com/blt/2008/11/assistant-to-sg-teaches-chief-justice-a-new-word.html

VSC: When defendant appears, Superior Court may not enter judgment by default w/o holding a hearing

In Housing Foundation, Inc. v. Beagle, No. 2007-474 (unpublished entry order by three-justice panel), the Vermont Supreme Court reversed a default judgment entered by the superior court. The Court ruled that since defendant had “appeared” in the case, default judgment was available only after a hearing. Since the superior court did not hold a hearing, the court abused its discretion by entering judgment by default.

V.R.C.P. 55(b)(4) provides “if the party against whom judgment by default is sought has appeared in the action judgment may be entered after hearing, upon at least 3 days’ written notice served by the clerk.” Plaintiff did not dispute that defendant appeared in the case. The Supreme Court agreed that by filing an answer (albeit one day late), and subsequent other motions and responses, the defendant had “appeared” for purposes of Rule 55(b)(4). The Supreme Court ruled that under Rule 55(b)(4), a hearing was mandatory, not merely discretionary. The superior court, therefore, abused its discretion by entering default judgment without a hearing.

In concluding that the defendant had appeared in the case, the Supreme Court cited out-of-state authority. But it did not cite V.R.C.P. 79.1(b), which provides “[A]n attorney’s signature to a pleading shall constitute an appearance.” Although defendant may not have been represented by an attorney, her signature on an answer arguably constituted an appearance under this rule. An answer to a complaint is a “pleading” for purposes of the Vermont Rules of Civil Procedure. See V.R.C.P. 7(a) (specifying “pleadings” under the Rules). As used in the Vermont Rules of Civil Procedure, “The term ‘plaintiff's attorney’ or ‘defendant’s attorney’ or any like term shall include the party appearing without counsel.” Thus, a pro se defendant’s signature on an answer arguably constitutes an appearance within the meaning of Rule 79.1(b).

VSC: superior court may enter SJ w/o written decision; court did not err in refusing to issue findings of fact

In Pietrangelo v. AMI-Burlington Inc. No. 2008-115 (unpublished), the Court stated:

On appeal, plaintiff first argues that the superior court erred in granting defendants summary judgment without issuing an opinion with findings of fact and conclusions of law. We conclude there was no procedural error in the court’s decision. Rule 56 allows the court to enter “judgment as a matter of law” on behalf of a party when the record demonstrates that “there is no genuine issue as to any material fact”; however, the Rule does not require the court to issue a written decision. V.R.C.P. 56(c)(3). Indeed, we have explained that “[w]hile a trial court’s recitation of the undisputed facts is often helpful for appellate review of a grant of summary judgment, they are not necessary.” Blake v. Nationwide Ins. Co., 2006 VT 48, ¶ 21, 180 Vt. 14.

We are not persuaded by plaintiff’s argument that his request for findings required the court to issue written findings. Rule 52 states:

In all determinations of motions in which (a) the decision of the court is based upon a contested issue of fact, (b) the decision is or could be dispositive of a claim or action, and (c) a party has, within five days of the notice of decision, requested findings of fact and conclusions of law, the court shall, on the record or in writing, find the facts and state its conclusions of law.

V.R.C.P. 52(a)(3). Although plaintiff requested findings and the decision on summary judgment was dispositive of plaintiff’s claims, a motion for summary judgment is not a decision “based upon a contested issue of fact.” Id. “It is not the function of the trial court to find facts on a motion for summary judgment, even if the record appears to lean strongly in one direction.” Fritzeen v. Trudell Consulting Eng’rs, Inc., 170 Vt. 632, 633 (2000). Thus, we conclude that the court did not err in issuing its decision on summary judgment without findings.

VSC: Vermont adopts "Time on the Risk" in Long-Tail Cases

Environmental Claims

8/25/2008 8:54:29 PM EST

Vermont Joins Other Northeastern States, Adopts “Time on the Risk” Approach in Long-Tail Cases

Posted by Michael Aylward

See http://law.lexisnexis.com/practiceareas/Insurance-Law-Blog/Insurance/Vermont-Joins-Other-Northeastern-States-Adopts-Time-on-the-Risk-Approach-in-Long-Tail-Cases

VSC: VT Commissioner of Labor may enforce WC law of other states

The Vermont Supreme Court yesterday decided Letourneau v. A.N. Deringer 2008 VT 106:

“This appeal asks us to determine whether Neal Letourneau has a right to transfer his workers’ compensation case from the New York workers’ compensation system to Vermont’s Department of Labor under 21 V.S.A. § 620. We hold that Letourneau is not entitled to transfer his case to Vermont under § 620 for the purpose of claiming Vermont workers’ compensation benefits. However, Letourneau is entitled to transfer his case to Vermont under § 620 for the purpose of enforcing his entitlement to New York benefits here if his rights under New York law can be reasonably determined and dealt with by the Commissioner and the courts in this state. In their rulings on Letourneau’s transfer request, neither the Commissioner nor the superior court addressed the issue of whether Letourneau’s rights under New York law could reasonably be determined and dealt with here. We remand so that the Commissioner can decide that question in the first instance.”

2nd Cir defines when plaintiff may sue under psuedonym

The Court wrote:

We agree that the interests of both the public and the opposing party should be considered when determining whether to grant an application to proceed under a pseudonym. Accordingly, we endorse the Ninth Circuit’s formulation and hold that when determining whether a plaintiff may be allowed to maintain an action under a pseudonym, the plaintiff’s interest in anonymity must be balanced against both the public interest in disclosure and any prejudice to the defendant.

This balancing of interests entails the consideration of several factors that have been identified by our sister Circuits and the district courts in this Circuit. We note with approval the following factors, with the caution that this list is non-exhaustive and district courts should take into account other factors relevant to the particular case under consideration: (1) whether the litigation involves matters that are “highly sensitive and [of a] personal nature”; (2) “whether identification poses a risk of retaliatory physical or mental harm to the . . . party [seeking to proceed anonymously] or even more critically, to innocent non-parties”; (3) whether identification presents other harms and the likely severity of those harms, including whether “the injury litigated against would be incurred as a result of the disclosure of the plaintiff’s identity”; (4) whether the plaintiff is particularly vulnerable to the possible harms of disclosure, particularly in light of his age; (5) whether the suit is challenging the actions of the government or that of private parties; (6) whether the defendant is prejudiced by allowing the plaintiff to press his claims anonymously, whether the nature of that prejudice (if any) differs at any particular stage of the litigation, and whether any prejudice can be mitigated by the district court; (7) whether the plaintiff’s identity has thus far been kept confidential; (8) whether the public’s interest in the litigation is furthered by requiring the plaintiff to disclose his identity; (9) “whether, because of the purely legal nature of the issues presented or otherwise, there is an atypically weak public interest in knowing the litigants’ identities”; and (10) whether there are any alternative mechanisms for protecting the confidentiality of the plaintiff.

Sealed Plaintiff v. Sealed Defendant #1 Docket No. 06-1590-cv (Aug. 12, 2008) (citations omitted)

Bad drafting of judicial opinion due to oversight? Or does it reflect judicial philosophy?

A recent case before the Vermont Supreme Court asks whether a warrantless search by police of a closed container, “was permissible under Article 11 [of the Vermont Constitution] absent a factual showing of exigent circumstances.” One would think that the first step in the Court’s analysis would be to identify the specific language of Article 11 that the defendant claims the search violated. If not the first step, one would think that at some point in the decision the Court would quote Article 11 and address whether the text of Article 11 prohibited the search at issue in the case. But the Court concludes that the search violated Article 11 without ever telling the reader what Article 11 says.

I’ll save you the trouble of looking it up. Article 11 says “Mary Had a Little Lamb.” See State v. Kirchoff, 156 Vt. 1, 32, 587 A.2d 988, 1006 (Peck, J., dissenting) (quoting State v. Brunelle, 148 Vt. 347, 365, 534 A.2d 198, 210 (1987) (Peck, J., dissenting) (“If . . . constitutions, state and federal, mean whatever the highest courts having jurisdiction say they mean, and that power of interpretation is not exercised with restraint, we may as well adopt ‘Mary had a Little Lamb’ for constitutional purposes.”)).

VSC: Spraying pesticides not shown to be trespass

Larkin, Inc. v. Marceau 2008 VT 61 (Johnson, J.)

Real estate developers, who sued a neighboring landowner for trespass based on the neighbor’s spraying of pesticides in his apple orchard, appeal the superior court’s decision rejecting their trespass theory. Because the developers failed to make a showing sufficient to survive the neighbor’s motion for summary judgment, we affirm the court’s judgment in favor of the neighbor.

Marceau moved for summary judgment, arguing that Larkin was in fact making a nuisance claim but couching the complaint in terms of trespass to circumvent the right-to-farm law. Concluding that Larkin’s suit actually sounded in nuisance rather than trespass, the superior court stated it would not allow Larkin to evade the Legislature’s plain intent to offer heightened protection to agricultural activities with respect to claims of this nature. The parties later stipulated to dismissal of Larkin’s claims to the extent that they sounded in nuisance, and the superior court entered a final judgment against Larkin.

On appeal, Larkin argues that the superior court erred by recharacterizing its trespass action as a nuisance action subject to the right-to-farm law and thus effectively dismissing its trespass claim. Without question, there are situations in which both trespass and nuisance—two distinct actions that are not mutually exclusive—will be cognizable in the same lawsuit. This is not such a case, however. We leave for another day the question of whether the intrusion of airborne particulates may ever be a trespass, and, if so, what impact is required to sustain such an action.

Here, absent a demonstrated physical impact on Larkin’s property resulting from the airborne particulates, the superior court did not err in granting summary judgment to Marceau. When particles enter the ambient environment without any demonstrated impact on the land, we fail to see how a trespass has occurred. Larkin makes only a bald assertion that it has been ousted from its property because of the presumed detectable level of pesticides landing on the property, Larkin neither conducted depositions nor offered any expert testimony. Nor did Larkin proffer evidence indicating the extent of the dispersion of pesticides on its property or any potential safety or health concerns related to the pesticide use. In short, Larkin’s trespass claim relies exclusively on the fact that Marceau wanted a buffer zone to reduce the potential conflict of uses. That fact does not support Larkin’s claim of an ouster or its trespass action.

VSC: We're not bound by "heightened" pleading standard adopted by SCOTUS in Bell Atlantic v Twombly

Vermont has long followed the standard set forth in Conley v. Gibson, 355 U.S. 41, 47 (1957), for deciding a motion to dismiss under Rule 12(b)(6): courts must take the factual allegations in the complaint as true, and consider whether “it appears beyond doubt that there exist no facts or circumstances that would entitle the plaintiff to relief.” Alger v. Dep’t of Labor & Indus., 2006 VT 115, ¶ 12, ___ Vt. ___, 917 A.2d 508 (quotations omitted). See Levinsky v. Diamond, 140 Vt. 595, 600-01, 442 A.2d 1277, 1280-81 (1982) (citing Conley, 355 U.S. at 45-46).

In Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1959 (2007), the Court “retired” the “no set of facts” language of Conley, finding that it had been misunderstood. Instead, the Twombly Court held, a complaint that does not state a “plausible” claim as measured by the substantive law fails to state a claim. In Colby v. Umbrella, Inc., 2008 VT 20 ¶ 5 n. 1, the Vermont Supreme Court rejected what it characterized as Twombly’s adoption of a “heightened” pleading standard. “[W]e have relied on the Conley standard for over twenty years, and are in no way bound by federal jurisprudence in interpreting our state pleading rules. We recently reaffirmed our minimal notice pleading standard in Alger, 2006 VT 115, ¶ 12, and are unpersuaded by the dissent’s argument that we should now abandon it for a heightened standard.”

VSC: No pro se suit by executor when there are other beneficiaries

Yesterday the Vermont Supreme Court dismissed an appeal brought by a non-attorney executor on behalf of an estate that had several beneficiaries. The Court explained its ruling as follows: “The authorization to appear pro se is limited to representing one’s personal interest. It does not permit the representative of an estate to bring a suit pro se when there are other beneficiaries.” All 5 justices signed the order dismissing the appeal. It will not be published in the Vermont Reports.

Puppolo v. CSR Corp., No. 2007-354 (Mar. 5, 2007)

US Dist Ct: Vt Workers' Compensation Act provision re death benefits does not violate Vt Constitution's Common Benefits clause

Vermont’s Workers’ Compensation Act provides benefits for the dependents of workers who die as a result of injuries sustained on the job. But non-dependent next of kin receive nothing, 21 V.S.A. § 634, and are barred from suing the employer. 12 V.S.A. § 622. In Samaha v. Scott’s Construction, No. 2:05-cv-315, 2008 WL 516417 (D.Vt. Feb. 22, 2008) (Sessions, Chief Judge), the Court ruled that the Act’s distinction between dependents and non-dependent next of kin does not violate the Common Benefits clause of Vermont’s Constitution, Ch. I, Art. 7.

Second Circuit: Fair Debt Collection Practices Act ruling

In Jacobson v Healthcare Financial Services Inc. No. 06-3147-cv, the US Court of Appeals for the Second Circuit held that a letter sent by a debt collector to a debtor stating, “IF YOUR PAYMENT OR NOTICE OF DISPUTE IS NOT RECEIVED IN THIS OFFICE WITHIN 30 DAYS, WE SHALL RECOMMEND FURTHER ACTION BE TAKEN AGAINST YOU TO COLLECT THIS OUTSTANDING BALANCE,” violated the federal Fair Debt Collection Practices Act (“the Act”). The Court held that the recipient of a debt collection letter covered by the Act validly invokes the right to have the debt verified whenever she mails a notice of dispute within 30 days of receiving a communication from the debt collector. Contrary to the debt collector’s letter, the debtor’s notice of dispute need not be received by the debt collector within 30 days.

The Act requires a debt collector to provide the debtor with a “validation notice” informing the debtor of his or her right to request verification of the debt. The debt collector’s duty is not merely to convey information, but to convey it so it will be clear to the “least sophisticated consumer.” The Court has “held repeatedly that a debt collector violates [the Act], even if the collector includes an accurate validation notice, if that notice is overshadowed or contradicted by other language in communications to the debtor.”

In addition to the language quoted above, the letter at issue in Jacobson included a validation notice, which the plaintiff conceded was sufficient under the Act when viewed in isolation. Plaintiff argued, and the Court agreed, that the above-quoted language contradicted the validation notice, and thus violated the Act. The Court reached that conclusion after construing the relevant provisions of the Act as giving the debtor 30 days to send a request to have the debt verified. The Court looked past the text of the statute because it is ambiguous (it could be read to be consistent with the above-quoted language or inconsistent with it). The legislative history provided no help. So the Court focused on the underlying purposes of the statute – providing the debtor with a period to decide what to do and establishing a clear time period so the debtor does not have to guess when his response is required.

The Court’s holding and explanation raise an interesting question: According to the Court, the Act requires the debt collector to convey information clearly. But the Act is not clear – it is ambiguous according to the Court – on the question of when the debtor must act to meet the 30-day deadline. So does a validation notice that merely repeats the relevant language of the Act violate the Act by failing to communicate clearly? The plaintiff in Jacobson conceded that the validation notice standing alone – which mirrored the language of the Act – complied with the Act. Thus, the Court did not address this issue. The Court focused on the effect of “other language” in communications to the debtor that overshadows or contradicts an “accurate” validation notice. If a so-called “accurate” validation notice is itself ambiguous – as the Court appears to be saying – should the careful debt collector explicitly incorporate the Court’s holding in communications with the debtor so the debtor will clearly understand the deadline for responding to the notice? That is, should a careful debt collector inform the debtor that the debtor may provide notice of dispute by mailing it within 30 days of the debtor’s receipt of the communication containing the validation notice?