- DoJ reverses Obama predecessors’ stance on whether NLRA rights to collective action bar individual-arbitration clauses in employment contracts [BNA via Indisputably; consolidated trio of Murphy Oil, Ernst & Young, Epic Systems Corp. cases] Ninth Circuit OKs California end-run around Supreme Court’s jurisprudence on workplace arbitration class actions, time for review [WLF on Bloomingdales, Inc. v. Vitolo; update on cert denial: Deborah LaFetra, PLF]
- Roberts joins liberals to hold 5-3 that cities can sue alleging Fair Housing Act violations; damages theories are to be constrained, though [Josh Blackman, SCOTUSBlog roundup on Bank of America v. Miami, earlier here and here]
- How much deference should appellate courts give district courts in ruling on subpoenas issued by EEOC? [Ross Runkel and Federalist Society podcast with Karen Harned on McLane Co. v. EEOC]
- Court unanimously disallows stratagem by which class action lawyers voluntarily dismiss individual claim so as to secure immediate appeal of certification denial [Howard Wasserman, James Freije on Microsoft v. Baker]
- Chevron used racketeering law to fend off giant foreign judgment in Ecuador saga, losing side would like Supreme Court relief from that [Paul Barrett, Business Week on Donziger v. Chevron] Update Monday morning: Court will not hear;
- “To Be Liable for Fraud, You Have to Have Actually Defrauded Someone” [Ilya Shapiro and Thomas Berry on Cato cert amicus in SGE Management v. Torres]
The Litigation Lobby may despise arbitration that is contractually agreed to before a dispute, editorialists may denounce it, and legal academics may deprecate it, but the U.S. Supreme Court shows no signs of cooperating in plans to snuff it out. In Kindred Nursing Centers Limited Partnership v. Clark, the latest of several cases in which it has state supreme courts that strayed from its guidance, the high court struck down a legal interpretation by the Kentucky courts “under which a general power of attorney, valid to authorize the execution of contracts generally, would not validly authorize execution of an arbitration agreement unless the power of attorney explicitly addressed that topic.” [Ronald Mann, SCOTUSBlog]
For me, the 7-1 vote was the most salient thing about this decision. All of the participating justices agreed except for Justice Clarence Thomas, who could not endorse the outcome based on his longstanding view that the FAA does not apply in state courts. By contrast, the vote last year in the quite similar case of Imburgia was 6-3. Perhaps the justices were motivated here less by their views about the FAA than by their views about the proper response to insincere state supreme courts.
“Typical medical malpractice reform efforts are aimed at lowering costs for physicians, but what if many problems associated with medical malpractice could be handled via contract?” In a new Cato Podcast with interviewer Caleb Brown, I discuss that subject and go on to talk about issues in malpractice reform, including arbitration and the “nod to federalism” in this year’s Republican medical liability proposal in Congress. Related: reasons why Cato adjunct scholar Jeffrey Singer is skeptical of federal reform.
- A workplace hazard? Push in Britain to “make it illegal for a company to require women to wear high heels at work.” [Elizabeth Nolan Brown, Reason]
- Service dogs on planes: “a ‘credible verbal assurance’ books Fido a trip to San Francisco for the weekend” [David Post, Volokh Conspiracy] Australia, too, sees trend toward exotic service and emotional-support animals [Workplace Prof; earlier]
- Trial lawyers would like Supreme Court to squash the arbitration alternative, but few signs Judge Gorsuch is on board with that plan [Edith Roberts, SCOTUSBlog]
- New York radical lawyer Lynne Stewart, not a favorite in these columns, dead at 77 [Scott Johnson, PowerLine, earlier]
- Baltimore police scandal, “yes means yes” bill for MoCo schools, homicide rap for overdose suppliers?, school wi-fi scare, Tom Perez, and more in my Maryland policy roundup [Free State Notes]
- Suing so soon over White House regulatory reform, Public Citizen, and with so little show of injury? [Brian Mannix, Law and Liberty]
- Recent easing of lawsuit crisis in U.S. owes much to rise of arbitration. Now organized litigation lobby is intent on taking that down, and Obama administration has helped with steps in labor law, consumer finance, and nursing-home care [James Copland, Manhattan Institute, related op-ed]
- SCOTUS should grant certiorari to clarify lawyers’ obligation to clients in class settlement, argues Lester Brickman [amicus brief courtesy SCOTUSBlog; earlier on Blackman v. Gascho]
- St. Louis, California, NYC asbestos litigation, south Florida and the Florida Supreme Court, and New Jersey are top five “winners” in latest annual “Judicial Hellholes” report, which also includes a focus on qui tam/whistleblower suits [American Tort Reform Association, report and executive summary]
- Deep pocket lawsuits remain systemic problem in America for political branches to address [David Freddoso, Washington Examiner investigation]
- Florida insurers struggle with secondhand suits under assignment of benefits doctrine [Insurance Journal]
- Storm lawsuits in Texas: “All Hail Breaks Loose” [Mark Pulliam, City Journal]
- “Big Bucks and Local Lawyers: The Increasing Use of Contingency Fee Lawyers by Local Governments” [Michael Maddigan, U.S. Chamber Institute for Legal Reform]
- Class actions: “The New Rule 23 Is Available for Public Comment,” comment period ends Feb. 15 [Andrew Trask]
- Aircraft Owners and Pilots Association urges Supreme Court to review Third Circuit case approving liability for FAA-approved part design [AOPA, Sikkelee v. Precision Airmotive Corp.]
- “An FCC ban on arbitration of privacy claims would be the anti-consumer-protection approach” [Geoffrey Manne & Kristian Stout, Truth on the Market]
- Montana case could bypass Daimler limits on state-court jurisdiction in cases under the Federal Employers’ Liability Act, Washington Legal Foundation urges certiorari [BNSF v. Tyrrell]
- Insurers brace for new tilt of adverse doctrine as American Law Institute mulls Restatement of the Law of Liability Insurance [Nicholas Malfitano, Legal Newsline/Forbes]
- “Judge Says He’s Had Enough Of Weeding Through Baseless Lawsuits, Threatens Sanctions” [Daniel Fisher; M. D. Georgia judge on vaginal mesh cases]
- More on pricey regulated generics [Scott Gottlieb/WSJ, earlier on EpiPen, more on latter from Joel Zinberg/City Journal]
- Feds ban pre-dispute arbitration agreements in nursing home care [McKnights]
- How Ronald Reagan’s FDA responded to the AIDS crisis — and it’s probably not the story you’ve heard [Peter Huber, City Journal; see also from Carl Cannon in 2014]
- FDA regs likely to winnow smaller, distinctive makers from the cigar business, recalling a Somerset Maugham story [James M. Patterson] Debunking the “Helena miracle,” once more: no link between local smoking bans and short-term drops in heart attacks [Jacob Sullum, earlier here and here]
- “Ethicists make the case for bone marrow transplantation markets” [Ilya Somin]
Hello, AP? The relevant “wanting” here is done by lawyers, not consumers. (“When consumers want to create or join a class-action lawsuit…”) And that’s kind of emblematic of how you miss the point on the Consumer Finance Protection Board’s big announcement of a rule yesterday rescuing many class action lawyers from the arbitration clauses to which their putative clients would otherwise have given legal consent.
The industry reaction was swift, with Wall Street and its advocates warning of unintended consequences of the rule within hours of the CFPB proposing it on Thursday.
The change likely will result in higher litigation costs for banks, which they will offset either by raising the costs of consumer-loan products or reducing services, said Nessa Feddis, senior vice president for consumer protection and payments at the American Bankers Association, an industry group.
House Financial Services Committee Chairman Jeb Hensarling (R., Texas) called the proposed rule “a big, wet kiss to trial attorneys.”
And: Omri Ben-Shahar, Forbes:
While the overall effect on consumers depends on the balance between meritorious and frivolous class actions, one prediction can be made with confidence. Firms will now take greater care in drafting even longer fine print agreements, where everything is fully “disclosed.” Since many class actions allege violations that can often be corrected through more comprehensive legal disclosures and warnings, firms will lawyer up and write longer and even less readable boilerplate. The “asterisk” will be the winner — the routine disclaimers that accompany advertisements, as in: “Footlong is an average; reasonable variations may apply.” In the end, the CFPB’s proposed regulation will not improve the value of financial services to consumers. It will instead lavish upon people even longer and more excruciating small print.
In a case involving Murphy Oil, the National Labor Relations Board contends that “a mandatory arbitration provision violates the National Labor Relations Act. That has been the position of the NLRB for some time now, notwithstanding almost universal rejection by the courts.” The Fifth Circuit, unsurprisingly, joined other precedent and upheld the employer. Until just a short time ago, given a Supreme Court on which Justice Antonin Scalia had penned strong opinions in favor of freedom to contract in favor of arbitration as a choice, “employers would not have been terribly concerned if the NLRB had appealed.” But now? [Michael Fox, Jottings By an Employer’s Lawyer]
In its long-running campaign against arbitration as a contractually chosen alternative to its own services, the Litigation Lobby recently scored a coup in the form of a New York Times series intensely negative on the practice. I joined radio host Bob Zadek recently for a discussion of the issue.
More on arbitration recently from Jim Copland in the Wall Street Journal, from Daniel Fisher (“New York Times Cites The Wrong Case To Support Class Actions”) and Greg Herbers, Washington Legal Foundation (“Rebuffed Twice in Texas, the NLRB Takes its Crusade Against [Class-Action] Arbitration [Agreements] to California”).