Second Circuit: Unrepresented non-attorney may not sue on behalf of another

The Second Circuit ruled today that under federal law an unrepresented non-attorney may not sue on behalf of another person as guardian ad litem. But the Court vacated a district court ruling dismissing sua sponte the claim brought by the purported guardian on behalf of the other person because the other person was not properly represented. That is, a district court may not rule on the merits of a claim brought on behalf of someone by a non-attorney until an opportunity has been provided to the plaintiff to retain an attorney to represent the party on whose behalf the action was brought.

The case is Berrios v. NYC Housing Authority, No. 08-4832-cv (2d Cir. Apr. 23, 2009)

federal District Court for VT remands removed diversity case

A defendant may remove a case from state court based on diversity of citizenship only if the complaint, notice of removal, or other evidence in the record provides “concrete information” that “the potential value of Plaintiff's claims” exceeds the amount in controversy required by 28 U.S.C. § 1332. Palmermo v. Fidelity & Guar. Ins. Co., 2009 WL 88340 (D.Vt. Jan. 12, 2009). This was a bad faith claim against a workers’ compensation insurer. Since the insurer failed to provide the required evidence re: amount in controversy, the court remanded the case to the state court in which plaintiff filed it.

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)

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)

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?

2nd Cir: personal jurisdiction; Zippo

a website's interactivity may be useful for analyzing personal jurisdiction under section 302(a)(1), but only insofar as it helps to decide whether the defendant "transacts any business" in New York--that is, whether the defendant, through the website, "purposefully avail[ed] himself of the privilege of conducting activities within New York, thus invoking the benefits and protections of its laws."

* * *

fn. 13 The spectrum [established by Zippo may also be helpful in analyzing whether jurisdiction is permissible under due process principles. We note that the court in Zippo and most, if not all, of the courts that subsequently adopted the Zippo sliding scale were evaluating whether jurisdiction in those cases comported with due process, under state long-arm statutes that recognized jurisdiction coterminous with the extent allowed by the federal Constitution. See, e.g., Young, 315 F.3d at 261. We make no comment at this point on the relevance of the Zippo sliding scale in New York in evaluating whether the exercise of jurisdiction would be consistent with due process.

Best Van Lines, Inc. v. Walker 2007 WL 1815511, *11 (2d Cir. 2007)

2nd Cir: Attempt to clarify calculation of attys' fees under fee shifting statutes

The meaning of the term "lodestar" has shifted over time, and its value as a metaphor has deteriorated to the point of unhelpfulness. This opinion abandons its use.FN4 We think the better course-and the one most consistent with attorney's fees jurisprudence-is for the district court, in exercising its considerable discretion, to bear in mind all of the case-specific variables that we and other courts have identified as relevant to the reasonableness of attorney's fees in setting a reasonable hourly rate. The reasonable hourly rate is the rate a paying client would be willing to pay. In determining what rate a paying client would be willing to pay, the district court should consider, among others, the Johnson factors; it should also bear in mind that a reasonable, paying client wishes to spend the minimum necessary to litigate the case effectively. The district court should also consider that such an individual might be able to negotiate with his or her attorneys, using their desire to obtain the reputational benefits that might accrue from being associated with the case. The district court should then use that reasonable hourly rate to calculate what can properly be termed the "presumptively reasonable fee."
FN4. While we do not purport to require future panels of this court to abandon the term-it is too well entrenched-this panel believes that it is a term whose time has come.
Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 2007 WL 2004106, *7 (2d Cir. 2007)

SCOTUS:Clarifies pleading standards; Will VT courts follow suit?

UPDATE (3/24/2008): See more recent post

Thursday, May 24, 2007
Is Twombly the Death-Knell for Notice Pleading?
Posted by Marty Lederman at 09:16 AM
In its decision Monday in the antirtust case of Bell Atlantic v. Twombly <http://supremecourtus.gov/opinions/06pdf/05-1126.pdf> , the Court expressly (and sua sponte) rejected the half-century-old nostrum from Conley v. Gibson that "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 entitle him to relief." Id., at 45-46. The complaint in Twombly alleged a Sherman Act conspiracy (that the petitioners "agreed not to compete with one another"), but did not specifically allege any facts that would establish such an agreement -- and the Court therefore held that the complaint should be dismissed for failure to state a claim. (See Mark Botti's helpful summary here <http://www.scotusblog.com/movabletype/archives/2007/05/commentary_mond.html> .)
The Twombly opinion not surprisingly has caused quite a stir in civil procedure circles. Does it signal the rejection of notice pleading and, if so, how can it be reconciled with the Court's decisions in Swierkiewicz (2002) and Leatherman (1993)? Can its holding somehow be limited to certain sorts of Sherman Act allegations, or does it have much broader implications for pleading practice?
It looks as though these questions will be hotly debated in the academy <http://lawprofessors.typepad.com/civpro/> and lower courts in the near future. Michael Dorf has a very helpful initial take <http://michaeldorf.org/2007/05/end-of-notice-pleading.html> on the alternative readings of Twombly that are already framing that debate. See also Scott Dodson's reading here <http://lawprofessors.typepad.com/civpro/2007/05/prof_scott_dods.html> . By contrast, Einer Elhauge <http://volokh.com/archives/archive_2007_05_20-2007_05_26.shtml> calls the case "quite insignificant," not to mention unhelpful for resolving longstadning questions with respect to antitrust complaints.
In general, keep your eyes on the Civil Procedure Prof Blog <http://lawprofessors.typepad.com/civpro/> , where the issue is sure to continue to receive a lot of attention..

Comments
Twombly does not turn away from notice pleading, as Footnote 10 makes clear. Rather, the Court held that an allegation of a conspiracy does not provide adequate notice to the defendants, in the absence of such details as the "specific time, place, or person involved in the alleged conspiracy." The Court contrasted Twombly's allegation to that set forth in model Form 9: the defendant struck the plaintiff with his car while the plaintiff was crossing a particular highway at a specified date and time. The latter allegation is sufficient under Rule 8, because (unlike the Twombly complaint) it provides sufficient notice of the alleged misconduct.
But even though it does not abandon notice pleading, Twombly is nonetheless an important decision. Particularly when the defendant is a corporation, tort complaints very often are fuzzy regarding who committed the allegedly act and when they did it. Twombly will, and should, cause complaints raising a variety of claims to be dismissed under Rule 12(b)(6). In the employment discrimination area, complaints in cases like Swierkiewicz are unassailable because they focus on a specific employment decision (e.g., a discharge decision) and thus provide the notice that a defendant needs to prepare a defense. But in cases raising more generalized discrimination claims (e.g., that the plaintiff was subject to a work environment that was racially harrassing in nature, or that the corporation maintained a company-wide personnel "policy" that tolerated sex discrimination in individual employment decisions), the complaint will need to recite specific facts supporting those claims in order to survive a motion to dismiss.
Many complaints filed under the Alien Tort Statute may also be ripe for 12(b)(6) dismissal. ATS plaintiffs often point to human rights abuses by a foreign government, and then allege that a corporation doing business in that foreign country aided and abetted the abuses -- based solely on factual allegations that the corporation provided various types of material and logistical support to the foreign government. Twombly suggests that those types of complaints should be dismissed (for reasons quite apart from the separate issue of whether aiding and abetting claims are actionable under the ATS), in the absence of an allegation of specific decisions to aid the human rights violations.
Posted by: Richard Samp <http://rsamp@wlf.org> <http://profile.typekey.com/Richard%20Samp> at May 24, 2007 11:31 AM