Cases by Issue - Federal Rules of Civil Procedure

Krupski v. Costa Crociere, S.p.A. - Oral Argument

Sun, 19 Dec 2010 15:33:59 +0000

Case:

Krupski v. Costa Crociere, S.p.A.

Media File:

09-337_20100421-argument.mp3

Related Transcript:

09-337_20100421-argument.xml

Transcript:

ORAL ARGUMENT OF MARK R. BENDURE ON BEHALF OF THE PETITIONER

Chief Justice John G. Roberts: We'll hear argument this morning in Case 09-337, Krupski v. Costa Crociere, S. p. A. Mr. Bendure.

Mr. Bendure: Mr. Chief Justice, and may it please the Court: This case revolves around Rule 15(c)(1)(C) of the Federal Rules of Civil Procedure.

In pertinent part, if two subsections are -- are satisfied, the rule permits relation back of an amendment adding a new defendant after expiration of the limitations period.

The courts below found, and Respondent does not question, that we satisfied the first subsection: Notice and no prejudice.

That arose from the service of the original complaint upon Costa Cruise, the agent and corporate affiliate represented by the same attorney as Respondent Costa Crociere.

Justice Ruth Bader Ginsburg: Do you know, Mr. Bendure, what exactly the corporate relationship was between the two?

Mr. Bendure: No, Your Honor, not the corporate relation.

The functional relationship as described in the affidavit is that Costa Cruise is the booking agent for Costa Crociere.

And for the notice procedure, according to the affidavit of Mr. Klutz, Costa Cruise engaged the IRSI adjustment service to resolve claims arising on the ship.

So in that respect it was also, in our view, an agent of Costa Crociere.

But the specific corporate relationship is not known.

Justice Ruth Bader Ginsburg: Thank you.

Mr. Bendure: Because of that timely service on Costa Cruise, we satisfied the first subsection.

And as this Court noted in Schiavone, timely service on one defendant may serve to give imputed notice to a related defendant, which is what we have here.

Chief Justice John G. Roberts: Counsel, your -- your client tripped over the cable, right?

Mr. Bendure: Correct.

Chief Justice John G. Roberts: What if the case were there were two people behind her and she was pushed?

And she didn't know which one pushed her, Jones or Smith.

So she sues Jones, and Smith knows all about it because, of course, he's a key witness or whatever.

Can he be substituted later on because he was the person she should have sued?

Mr. Bendure: If you're talking about a lack of knowledge of the real name, probably--

Chief Justice John G. Roberts: Not just the real name.

It's not that Jones pushed her, but his real name is Johnson.

It's that Jones -- whoever pushed her; I forget -- but one guy--

[Laughter]

One of the people pushed her, and she named that -- she named the other person.

She made a mistake about who pushed her.

Can they have substitution in that case?

Mr. Bendure: --I would say yes, because -- again, assuming that all of the other criteria are satisfied.

Chief Justice John G. Roberts: Yes.

The non-pusher has notice--

Mr. Bendure: Yes.

Chief Justice John G. Roberts: --and everything else.

But there's no relationship between the two of them.

Mr. Bendure: It's -- it's obviously a slightly different and more difficult case from our perspective, but what I think is critical is the status that's involved.

In this particular case, the suit was filed against the vessel operator, and that vessel operator was identified as Costa Cruise, when we know that the actual identity was Costa Crociere.

Justice Ruth Bader Ginsburg: What was the first -- when was your first notice of that?

I mean, it was on the first page of the ticket, but the answer came after the statute of limitations.

Was that your first notice that there was this different entity, or did you know that earlier?

Mr. Bendure: It was -- we say that was the first notice.

Now, the circuit court used an imputed knowledge rationale to suggest that the inclusion of the name "Costa Crociere" within the definitions section gave us what I would call constructive notice.

But in terms of actual knowledge that -- that we had sued the wrong party, it was the answer which was filed after--

Justice Antonin Scalia: Well, you don't -- I didn't understand you to deny that the ticket made it very clear who operated the ship.

Mr. Bendure: --I'm not sure--

Justice Antonin Scalia: Do you contest that?

Mr. Bendure: --I contest that it makes it very clear, but I don't contest that one could conclude that that provided constructive notice, that if read carefully one might infer.

Justice Antonin Scalia: Well, why not?

Don't you read the contract carefully before you bring a lawsuit?

Mr. Bendure: Well, actually it was under definitions.

And according to the definitions, Costa Crociere fell within the same definition of "carrier" as the steward, the ship itself, any--

Justice Antonin Scalia: So you are -- you either are contesting or you're not contesting that it's clear from the ticket.

I had assumed it was clear from the ticket.

Mr. Bendure: --I'm not -- I am not agreeing that it's clear.

I am agreeing that it provides constructive notice from which one might infer that.

Not clear, but discernible.

Justice Antonin Scalia: So you had -- so then you had notice even before the suit was filed.

It was on the -- it was on the ticket.

Mr. Bendure: We had what the circuit court referred to as "imputed knowledge".

Now, I think there's a--

Justice Ruth Bader Ginsburg: Did the -- did the name show up any place other than page 1 of the general conditions of passage?

Mr. Bendure: --I don't believe so, Your Honor.

Justice Ruth Bader Ginsburg: That's -- and this is what?

An 11-page, very small print--

Mr. Bendure: It's an 11-page, small print document.

And one thing that bears mention is that reference is under the designation "Definitions", because Respondent makes some hay out of the fact that we complied with other requirements which are under a different heading which says "Limitations of liability".

But what we also had was that we purchased the ticket from Costa Cruise; it was sent by Costa Cruise.

We had the pre-suit notice sent to Costa Cruise, responded by the -- the gentleman under the heading "Costa" that says "claims administrator for Costa Cruise".

So there was certainly what I would call conflicting information at best about which was the name of the actual vessel operator--

Justice Antonin Scalia: Not -- not if you read the definitions on page 1.

And if you are not going to read all 11 pages before you file suit, I would think you would at least read page 1.

And that, it seems to me, made it clear.

Mr. Bendure: --Well, it -- well, under the same definition, the steward would be a carrier every bit as much as Costa Crociere, S. p. A. So it seems to me by that reasoning you could conclude that the steward or the janitor is the vessel operator because they are likewise defined as the carrier in that definitional section.

And, in fact, it also includes the vessel itself within the definition.

So let's assume that my client had, instead of suing Costa Cruise, sued Costa Magica, the name of the vessel itself.

Most of the cases would say that an amendment like that to add the actual name, once you have identified the status of the defendant you seek to sue, falls within the subsection (ii), which is addressed primarily to the constructive notice of the defendant, that they knew or should have known that they would have been brought in the suit but for a mistake concerning the proper party's identity.

But the general focus of that second subsection, I think, is to look to whether this defendant knew or should have known that it was the intended target.

Justice Anthony Kennedy: Let me -- I've been thinking about the Chief Justice's question where the two people are pushed and you don't know which person -- or two people fired the shotgun, and there's only one pellet, and you don't know which gun the pellet came from.

In that case, I think we could stipulate that even by reasonable inquiry, you wouldn't know.

In your case, I think the -- and I think the difference in the case is that "reasonable inquiry" means you should have known.

So now we have a rule that excuses something you should have known but doesn't excuse something you -- you couldn't have known, which seems odd.

And because it's odd, therefore, maybe that's why it only applies to clerical errors.

Mr. Bendure: Well, actually when it talks of mistake, it seems to me that the very notion of mistake connotes error.

I looked at a couple of definitions, dictionary definitions.

Merriam Webster's defines a mistake as, quote, "a wrong judgment" or, quote,

"a wrong action or statement proceeding from faulty judgment, inadequate knowledge, or inattention. "

So, at least in that colloquial sense, the very nature of mistake implies some measure of blameworthiness.

And, indeed, it's hard to conceive of a mistake that couldn't be avoided.

And I think that's the problem with looking to the ticket, because what the definition on the ticket essentially says is: With due diligence, you might have avoided the mistake.

But in my view, and I think in the view of the language of the rule, that doesn't change the very nature of it as being a mistake.

Justice Sonia Sotomayor: Counsel--

Mr. Bendure: Certainly.

Justice Sonia Sotomayor: --assume I accept your argument, and I am the cruise operator -- the cruise owner, cruise ship owner, and I look at the complaint, and I say: I think they really meant me, but -- I think.

Now, within the 4(m) period, which is the period in which I am supposed to reasonably know that I would have been named absent a mistake, here an answer is filed, and you are told there is a mistake, and you don't correct the mistake.

What conclusion would a reasonable person at that second juncture make about whether you made a mistake or not?

Mr. Bendure: I think--

Justice Sonia Sotomayor: And I think that's what the issue is here, which is, assuming the complaint could be read as a mistake during the 4(m) period, wasn't that mistake corrected, and you refused or failed to act?

Mr. Bendure: --Let me respond both legally and factually.

Legally, I submit that it doesn't make a difference because under the text of the rule if during that 4(m) period they had the knowledge that you're suggesting and which would be suggested by the Respondent when they say, I think, if you had filed the amended complaint and served it a month after the answer, it would have been timely, we would have done it.

That acknowledges that there was a mistake, and once there is a mistake, if during that 120-day period they knew or should have known that it would have been brought against them but for the mistake, that knowledge doesn't evaporate by later events, as long as there is knowledge during that period.

Justice Sonia Sotomayor: That makes so little sense to me.

Here I think -- and for the following reason: You seriously I don't think could contend that if you had sought to amend a year later, that that would have been timely, correct?

Mr. Bendure: Correct.

Justice Sonia Sotomayor: All right.

But putting aside prejudice--

Mr. Bendure: Okay.

Justice Sonia Sotomayor: --what the lower court said was because your delay speaks to a choice, that that's the only thing a reasonable defendant would have assumed, that having been told that you sued the wrong party and you continued in that action, that that's what you intended to do, to sue that wrong party.

Mr. Bendure: Let me point out factually -- and I did not stress it in my brief.

The answer was filed on February 25th.

Twenty-three days later, on March 20th, the court entered a scheduling order which said: You have until the end of June to amend your complaint to add parties.

So it seems to me that a defendant faced with a court order that says the time for amendment extends till the end of June would not be drawing any conclusions that the plaintiff's state of mind had changed.

And one difficulty with trying to look at different points during the 120-day period is that it seems to me you'd have a constantly moving target.

If you say that we satisfied 120(m) at one point in time but somehow that's not enough and at a later point in time maybe they didn't know it any more, and then perhaps I guess in theory you could have them again -- if we had sent them a letter even after that and said, you know, we really did mean it, and then for some reason they concluded otherwise, you'd have a constantly moving target.

And that's--

Justice Ruth Bader Ginsburg: --Mr. Bendure, would you explain one factual matter to me?

I might have gotten this wrong, but I thought the answer was filed after the 1 year had run.

Mr. Bendure: --It had.

It had.

Justice Ruth Bader Ginsburg: So when the answer was filed it was too late for you to come within the statute of limitations.

Mr. Bendure: Absolutely true.

Justice Ruth Bader Ginsburg: And I thought that would be the answer that you would give to Justice Sotomayor, because when you got the answer -- which was filed after how many days?

Mr. Bendure: It was filed I think 24 days after the complaint.

Justice Ruth Bader Ginsburg: If you had gotten that a few days earlier, you could have amended, and then we wouldn't be here.

Mr. Bendure: That's certainly true, Your Honor.

And I think it also--

Justice Sonia Sotomayor: I'm sorry.

You have 120 days to amend, don't you, from the filing of the complaint?

Mr. Bendure: --No, Your Honor.

The 120 days is the time frame for the notice to the defendant.

Justice Sonia Sotomayor: Right.

Mr. Bendure: It -- 120 days after the amended complaint is our time for service of the amended--

Justice Sonia Sotomayor: Complaint.

Mr. Bendure: --complaint on the new defendant.

But I think the point that is raised by Justice Ginsburg is this: Once we find out and the limitation period has already expired, school's out.

If we tried to amend immediately thereafter -- if we hadn't made a mistake -- we couldn't amend 1 day after expiration of the limitation period.

So if we had acted immediately, we still don't get relation back unless we've satisfied the two criteria of the subsections.

But if we do satisfy those within the 120-day period, then we fall in the safe haven provided by the rule whether the amendment itself occurs 1 week, 3 weeks, or 7 weeks afterwards.

That--

Justice Ruth Bader Ginsburg: But the basic point is the answer didn't come in until you were already out under the statute of limitations.

Mr. Bendure: --Correct.

Justice Ruth Bader Ginsburg: So from their point of view, nothing else matters; you were out when they filed their answer, and you could do nothing to cure that.

Mr. Bendure: We could do nothing to, as a matter of right, file within the limitation period.

Justice Anthony Kennedy: Did your amended complaint contain any new and material allegations other than the name correction?

Mr. Bendure: It actually was a second count, but it was the same allegations against Costa Crociere that had been made against Costa Cruise.

We did not amend the theories of liability.

And, again, getting back to the question of status and theories, I think that's the critical distinction between this case and the cases they rely upon, Ish Yerushalayim and things like that, where you're changing from an individual defendant to an institutional defendant or vice versa on a different theory.

And, of course, you couldn't mistake an individual for an institution.

And that I think is the line of demarcation that we're asking the Court to draw, and it explains why in the lower courts the decisions which present our paradigm all or virtually all allow relation back; whereas, those that seek to amend a change from an individual to a corporation or vice versa often don't permit relation back--

Justice Antonin Scalia: I thought that the only condition was that it had to arise out of the same event or transaction, which would give you much more running room than -- than what you assert.

Mr. Bendure: --Only if you're amending against the same defendant.

If you are adding a new defendant, you have to satisfy (i) and (ii), which look to the notice and reason to know of the new defendant.

Justice Ruth Bader Ginsburg: Mr. Bendure, in addition to the mailing of the ticket -- the mailing of the ticket came; it said "Costa Cruise" -- were there any other connections between the plaintiff passenger and Costa Cruise beyond the ticket coming in an envelope that says "Costa Cruise"?

Mr. Bendure: There was the -- the pre-suit claims notice which was sent to Costa Cruise at the Florida address, in attempted compliance with the provision of the ticket which says you must file notice to the carrier before filing suit.

And you have to do that within 185 days.

So we not only got the ticket from Costa Cruise -- we bought it from Costa Cruise -- the ticket itself, if you look at I think it's 25a of the appendix to the petition for certiorari, there is a prominent page which says "Costa Cruise, cruise company" next to a picture of the vessel.

So we have that.

Then when we filed the notice, we sent it to Costa Cruise, we get a letter back from a person who claims to be in a position to resolve the liability of the vessel over -- owner, signed by him as claims administrator for Costa Cruise.

Those are the things -- oh, and then we have, prior to the commencement of suit, the Internet investigation about which Florida company is registered to do business in the State of Michigan, and we look at the Costa Cruise Web site, which says:

"Costa Crociere with several offices in several countries, United States office, Costa Cruise, Florida. "

So those are some of the things which give rise to the mistake--

Justice Antonin Scalia: Mr. Bendure, can -- can I come back to your -- I'm not sure why it matters, but it seems to me you're giving too narrow an interpretation, and I would not like our opinion to read any more narrowly than the statute allows.

It seems to me that if you assert a different claim arising out of the same transaction, you would be able to amend.

If you will look at (c)(1)(C), which is what you're asserting here, right?

(C)(1)(C) says,

"the amendment changes the party or the naming of party against whom the claim is asserted, if Rule 15(c)(1)(B) is satisfied. "

Then you go back to (1)(B) and it says,

"the amendment asserts a claim or defense that arose out of the conduct, transaction, or occurrence set out. "

It doesn't say it has to be the same claim.

Mr. Bendure: --There's no question we satisfy that.

Everybody agrees.

Justice Antonin Scalia: I understand that.

That's why I don't understand why you're arguing a more narrow -- a more narrow interpretation.

Mr. Bendure: Because I'm forced to--

Justice Antonin Scalia: It seems to me you're home free with (B).

Mr. Bendure: --Unfortunately, (C) then goes on and says:

"And if, within the period provided. "

(i) and (ii).

So--

Justice Antonin Scalia: Oh, yes, but -- but those are the only things we -- we have to argue about.

Mr. Bendure: --That's correct.

Justice Antonin Scalia: There's no doubt that you are asserting -- even if you were asserting a different claim, it certainly arose out of the same transaction or event, didn't it?

Mr. Bendure: Certainly.

No question about that.

Justice Antonin Scalia: Okay.

Mr. Bendure: If the Court doesn't have any additional questions at this time, I'd like to reserve the remainder of my time for rebuttal.

Chief Justice John G. Roberts: Thank you, counsel.

Mr. Glazier.

ORAL ARGUMENT OF ROBERT S. GLAZIER ON BEHALF OF THE RESPONDENT

Mr. Glazier: Mr. Chief Justice, and may it please the Court: There are, we suggest, two issues before the Court: The first is the legal question of whether a plaintiff's knowledge about the identity of the proper party can preclude a finding that there was a mistake concerning the identity of the proper party.

That, we suggest, is in some ways the easier issue, because there are -- there's abundant authority from the circuit courts of appeal and from this Court in Nelson v. Adams USA, where the Court said the rule requires a mistake.

In that case, there was no mistake.

Justice Ruth Bader Ginsburg: Mr. Glazier--

Justice Stephen G. Breyer: It's no mistake if you happen to know it, if you happen to know who the right party is?

Mr. Glazier: Correct.

And--

Justice Stephen G. Breyer: Ever?

Mr. Glazier: --Yes.

Justice Stephen G. Breyer: Have you ever driven a car where your wife has said turn left and you've turned right?

[Laughter]

Has that ever happened to you?

Mr. Glazier: Yes.

Justice Stephen G. Breyer: Was there anything you didn't know?

Mr. Glazier: What the facts are here, Your Honor--

Justice Stephen G. Breyer: No, I'm asking about this question, my hypothetical.

Mr. Glazier: --You know--

[Laughter]

Justice Stephen G. Breyer: Was there anything you didn't know?

Mr. Glazier: There is nothing that you did not know.

Justice Stephen G. Breyer: Correct.

Did you do it by mistake?

Yes, of course, you did.

It's happened to every human being.

There are millions of instances in which people do things by mistake where, in fact--

Justice Antonin Scalia: I think your wife made a mistake.

I don't think you made a mistake.

[Laughter]

Justice Stephen G. Breyer: --No, my wife does not make mistakes.

[Laughter]

Mr. Glazier: I think--

Justice Stephen G. Breyer: I make mistakes, and sometimes I make mistakes knowing all the facts, and so do you and so does everybody else.

So I never heard of this thing that you can't make a mistake knowing all the facts.

But anyway, here we have a person who didn't know all the facts.

What the judge says is he should have known all the facts.

Where in the record does he say he did know all the facts?

Mr. Glazier: --Where -- in three different times the plaintiff was informed of the facts.

But let me say on the--

Justice Stephen G. Breyer: That's a different matter.

My wife told me to turn left and I turned right, okay?

But I didn't take it in.

Mr. Glazier: --Well--

Justice Stephen G. Breyer: So that's a different matter.

Where does it say that he did know the facts as opposed to he should have known the facts?

Mr. Glazier: --The circuit court refers -- talks about imputed knowledge.

We disavow that.

There was no need for imputed knowledge in this case.

What imputes knowledge is someone who does not have knowledge.

Courts and lawyers make that up.

If you don't have knowledge--

Justice Stephen G. Breyer: I just want the citations to the page.

I wasn't challenging you.

I just wanted the citations to the page--

Mr. Glazier: --There are--

Justice Stephen G. Breyer: --where there's a finding that, in fact, he knew that this company called "Costa Cruise" in Italian is the same as the company called "Costa Cruise" in English?

I take it "Crociere" means "cruise".

Mr. Glazier: --They are -- they're separate corporations.

Justice Stephen G. Breyer: Yes, yes.

One is called "Costa Cruise" in Italian and one is called "Costa Cruise" in English.

And I just want to know where it says in the record that the client or he, the lawyer, actually knew, actually knew that he should have sued the one that spells its name in Italian?

Mr. Glazier: They are separate corporations.

There's nothing in the record that says--

Justice Stephen G. Breyer: I didn't ask you that question.

I'm asking for a record citation as to where there is a finding that this particular plaintiff knew that the Italian company called "Costa Cruise" was in fact the one he should have sued?

Mr. Glazier: --There is a finding--

Justice Stephen G. Breyer: I'll write them down and look at them later.

Mr. Glazier: --The finding on page 19a of the district court opinion says--

Justice Antonin Scalia: 19a of the petition?

Mr. Glazier: --19a of the cert petition says

"Her failure to timely naming Costa Crociere, S. p. A. as defendant. "

Justice Stephen G. Breyer: I thought what the district court said was "impute" the knowledge.

Mr. Glazier: No.

No, the district court did not impute knowledge, and this is an important point.

The circuit court imputed knowledge, and--

Justice Stephen G. Breyer: Where does it say that?

Where does it say that on 19a?

Mr. Glazier: --19a -- it's not precisely it, but it says,

"Her failure to timely named Costa Crociere as defendant was not the result of a mistake. "

It does not specifically say--

Justice Stephen G. Breyer: Well, I -- I know.

I would say in reading this, that both courts have made the most elementary mistake of the English language in thinking that when a person doesn't know something but should have known it, that that's inconsistent with a mistake.

That's the very definition of a mistake.

Mr. Glazier: --Your Honor--

Justice Stephen G. Breyer: Now, all I want is some citation from you that shows that isn't what they thought.

Mr. Glazier: --Well, the best I can do is the conclusion that there is not a mistake.

But I -- I need to--

Justice Stephen G. Breyer: Well, that's the conclusion, and when I read two sentences down, it said they may have had constructive knowledge.

The word "constructive" to me, when I hear I want to run out the door, because what the word "constructive" to me means is not knowledge.

Mr. Glazier: --I'd like to--

Justice Antonin Scalia: I'm sorry.

I -- I am not following it.

Where -- where -- where--

Justice Stephen G. Breyer: I'm on page 19a.

Justice Antonin Scalia: --Yes.

But he's talking about constructive notice--

Justice Stephen G. Breyer: Constructive notice.

Justice Antonin Scalia: --by -- by the defendant, not constructive knowledge by the--

Justice Stephen G. Breyer: All right.

Then what is -- where is the page that it says that the plaintiff had actual, as opposed to imputed, knowledge?

Mr. Glazier: --The -- there -- there is not that sentence--

Justice Stephen G. Breyer: Okay.

Mr. Glazier: --in the opinion.

What there is, is the plaintiff made a conscious choice.

The facts of the case are, first of all, before the lawsuit is filed the plaintiff has the ticket.

There is no doubt, no doubt whatsoever, that the plaintiff or her attorney read--

Justice Ruth Bader Ginsburg: --Is there any other than that one page on the ticket, that against the mailing envelopes that she got that say "Costa Cruise" -- is there anything in the entire record other than that definition page that includes carrier, that includes steward, anything else that tips her off that this is a different corporation?

Mr. Glazier: --There are three different pieces of evidence.

The first is the ticket.

The ticket defines carrier as Costa Crociere.

It is the only entity stated by name--

Justice Antonin Scalia: --It says it includes stewards.

What do you -- what do you say to that?

Mr. Glazier: --I'm sorry.

I didn't--

Justice Antonin Scalia: It includes the stewards on the boat, according to your -- your friend.

Mr. Glazier: --It lists one entity by name, Costa Crociere, and lists others by role.

Now, there may be some dispute over whether--

Justice Sonia Sotomayor: So why can't Costa Cruise be perceived to hold one of those roles?

Mr. Glazier: --Well, one might argue that there might be a number of different entities that might be a carrier, but there is only one entity which is clearly the carrier, indisputably a carrier--

Justice Ruth Bader Ginsburg: What is the relationship between those corporations?

Mr. Glazier: --Costa Crociere is, I believe, one level removed an owner of Costa Cruise Lines.

Costa Crociere operates around the world.

They have different companies that operate as sales and marketing agents in different regions--

Justice Ruth Bader Ginsburg: But are they -- are they sister corporations, a parent-sub--

Mr. Glazier: --No.

Justice Ruth Bader Ginsburg: --or what?

Mr. Glazier: Costa Crociere is parent, and I believe there's a corporation below them, and then that corporation owns Costa Cruise Lines.

Justice Anthony Kennedy: When it's below them, you mean it owns all the shares in its -- in its subsidiary company?

Mr. Glazier: Yes.

Chief Justice John G. Roberts: You know, the -- the definition of carrier includes independent contractors.

I mean -- I -- I would -- other than that they are more closely related, I can see someone thinking, well, Costa Cruise is at least an independent contractor with which Costa Crociere does business.

Mr. Glazier: There might be more than one carrier, but there is one carrier identified by name.

It is the first -- it is the first person listed.

Costa Crociere is the carrier.

I -- I suggest that if one reads the first page of the ticket, one might have questions about whether there might be some other entities that are carriers, but there is simply no doubt that Costa Crociere is the carrier.

Justice Ruth Bader Ginsburg: And if you went to--

Mr. Glazier: Now, there is no--

Justice Ruth Bader Ginsburg: --If you went to the Web site, which was mentioned, for Costa Cruise, there would be a tab that says "Our ships" "Our ships" -- and one of those ships is Costa Magica, whatever.

Mr. Glazier: --Yes.

Justice Ruth Bader Ginsburg: "Our ships", and it identifies Costa Cruise as the cruise operator.

That's the information that's given to passengers in the United States who are going to book on these ships.

It says Costa Cruise, our ships, Costa Cruise is the operator.

That's what was being put forth to the public.

Mr. Glazier: What -- what -- the relationship between the parties was governed by the ticket.

The ticket says, for example, the claim against the carrier has to be filed within the Southern District of Florida.

This claim was filed in Southern District of Florida, but they did not sue the carrier as identified on the ticket.

And the question is was there a mistake concerning the identity of the proper party--

Justice Ruth Bader Ginsburg: So it shouldn't matter that this confusion was caused in large part by this entity that advertises in English under the name "Costa Cruise" and identifies Costa Cruise as the operator.

"The largest European cruise operator" is how Costa Cruise is -- is identified in -- in the advertising.

Mr. Glazier: --We -- we believe that the ticket is clear, and that governs.

But even if one would disagree with that, then we move forward.

If there were any confusion, there's an answer filed.

Costa Cruise Lines is sued.

Costa Cruise Lines denies that it can be held liable, says it wasn't the carrier, it wasn't--

Justice Ruth Bader Ginsburg: And the answer is filed conveniently after the 1-year period has run.

Mr. Glazier: --The answer is filed, but the question of whether the defendant knew or should have known that there -- it -- it would have been sued but for a mistake, the inquiry there is not within the limitations period.

It was until the 1991 amendment, which followed the Schiavone case.

Chief Justice John G. Roberts: Well, but I don't -- I mean, there's some sharp practice going on here.

Paragraph 10 of their complaint sues Costa Cruise Lines because -- saying they owned, operated, managed, supervised, and controlled the ocean-going passenger vessel.

And it's the same lawyer for Costa Cruise as for Costa Crociere, right?

Mr. Glazier: Yes.

Chief Justice John G. Roberts: Okay.

So that lawyer looks at this and says: Aha, they made a mistake; they named the cruise line rather than the name in Italian.

So I'm going to wait until the statute of limitations runs, and then a couple of days after, I'm going to say aha.

Mr. Glazier: The statute of limitations is not the measuring period.

It was before the 1991 amendment.

Now, what happened here is the answer is filed, which makes clear the defendant -- the defendant Costa Cruise Lines denies it was involved with the ownership, operation, or management.

That's Joint Appendix 30.

Joint Appendix--

Justice Ruth Bader Ginsburg: Did the answer say the statute -- the 1-year period has run?

Was that raised as a defense in the answer?

Mr. Glazier: --It was not raised in the -- in the defense -- it was not raised as defense in the answer.

It -- it was not.

Justice Ruth Bader Ginsburg: When was it raised as a defense?

Mr. Glazier: It was raised 10 weeks later in a motion for summary judgment, which was still within the Rule 4(m) period, and that is the crucial period.

If upon reading the answer, which says the--

Justice Ruth Bader Ginsburg: But that -- the Rule 4(m) period concerns when you can serve.

It doesn't say that the statute of limitations is any more than what was the term of the -- of the passage, was 1 year.

Mr. Glazier: --Well, the Rule 4(m) period is awfully important because Rule 15(c) turns on, since 1991, on the Rule (4)(m) period.

If during the Rule 4(m) service period, the -- it became clear to Costa Crociere that it was an intended defendant, that it would have been sued but for a mistake, then the complaint against Costa Crociere would relate back, even though it was not timely filed.

Justice Antonin Scalia: Now, that -- that assumes -- that assumes -- when, what is it, 1(C)(ii), 4(m).

Now, in the early part of that period, at -- at one point in the period you should have known.

And at another point, because the answer was filed, you shouldn't have known.

Mr. Glazier: Well--

Justice Antonin Scalia: And you're relying on the fact that they filed an answer which -- I'm sorry -- that -- that you filed an answer which made it very clear to them what the situation was.

But was there any point, any -- and all it takes I think is any point within that 4(m) period -- when you -- you knew or should have known?

Mr. Glazier: --The answer, we submit, is no.

When they filed the complaint, the complaint indicated a couple of things.

First of all, they were suing Costa Cruise Lines, but they had read -- the complaint made clear that they had read the ticket.

They specifically relied on the venue provision of the ticket.

So we knew that they had read the ticket, which clearly identifies Costa Crociere as being the carrier, yet they still--

Justice Ruth Bader Ginsburg: Where -- where is the defense -- I mean, the ticket says suit must be filed within 1 year of the date of any alleged injury.

And where is the -- that defense stated?

You said it comes up 10 weeks--

Mr. Glazier: --In the motion for summary judgment, which -- which is not in the joint appendix.

It's docket entry 19.

The affidavit which is -- was filed with the motion for summary judgment is in the -- the Joint Appendix at Joint Appendix 33.

And the motion -- the answer made clear that Costa Crociere is the carrier which could be liable, not Costa Cruise Lines--

Justice John Paul Stevens: Yes, but--

Mr. Glazier: --but there was no change.

Justice John Paul Stevens: --being realistic about it, as I understand it you're relying entirely on the condition, general conditions of passage in the ticket, the fine print describing the term "carrier".

That's -- but do you take into account that the cover of the ticket, which is what the passenger would look at, uses "Costa Cruises", blah, blah, blah -- "Costa Cruise Lines" and so -- and doesn't even mention the carrier?

Mr. Glazier: The--

Justice John Paul Stevens: Don't you think, looking at that ticket, if you were a passenger you would think you were doing business with Costa Cruise?

Mr. Glazier: --Well, Your Honor--

Justice John Paul Stevens: Just looking at the cover?

Mr. Glazier: --If what--

Justice John Paul Stevens: Am I correct that on the cover of the ticket, the Italian name isn't used at all?

Mr. Glazier: --On the cover, the Italian name is not used.

The ticketing agent's name--

Justice John Paul Stevens: And isn't that what the--

Mr. Glazier: --is Costa Cruise Lines.

Justice John Paul Stevens: --what the passenger would normally look at, understand who he is doing business with?

Mr. Glazier: If one were to not read the ticket, which on page 1--

Justice Antonin Scalia: Assuming -- assuming the lawyer would just look at the cover before he files a lawsuit?

Mr. Glazier: --We know -- if this were a question of uncertainty whether the lawyer read the ticket, that would be one thing, but we know that the lawyer read the ticket.

Justice Stephen G. Breyer: Well, I don't understand what the lawyer reading the ticket has to do with this question.

Justice John Paul Stevens: Because the question is whether the lawyer made a mistake.

Isn't that the question?

Mr. Glazier: Well--

Justice John Paul Stevens: And he did make a mistake.

Mr. Glazier: --The principle is if one knows what the true facts are -- if one knows what the true facts are and proceeds in any event, then there's no mistake concerning the--

Justice Stephen G. Breyer: That isn't true, is it?

In the English language, it's not true?

I mean, that's why I was giving you some examples.

I don't know; maybe there's some special legal language somewhere written in Blackstone, or maybe it's Lord Coke, I don't know, that says when you use the word "mistake" don't use it in English, use -- use it in Italian.

0 [laugshter.]

But I mean, if we're going to use it in English, there -- it's not hard to find instances where a person would know, but he'd still make a mistake.

Mr. Glazier: --Well--

Justice Stephen G. Breyer: And there's even a fortiori--

Mr. Glazier: --Your Honor--

Justice Stephen G. Breyer: --if he doesn't know, even if he should.

Mr. Glazier: --We have--

Justice Stephen G. Breyer: Isn't that true?

Mr. Glazier: --What we have up front is the -- the ticket.

If we move past that, it's sort of a test case.

All right, did this plaintiff really not--

Justice Stephen G. Breyer: What possible reason is there that somebody who is hurt on a ship and has a lawyer, and she has a broken leg, and she'd like to get recovery, would deliberately sue the wrong person?

Mr. Glazier: --The plaintiff--

Justice Stephen G. Breyer: Is there such a reason?

Mr. Glazier: --The evidence in the record is that the plaintiff's lawyer looked at the Web site and chose a United States corporation instead of--

Justice Stephen G. Breyer: And I'm just saying, did he do it by mistake?

If you were representing this person, would you want to sue the company that could give you some money if they are liable?

Or would you rather sue the Bank of America that has nothing to do with it?

[Laughter]

Mr. Glazier: --Well, if it were -- if I had to sue Costa Crociere through the Hague Convention in Genoa, maybe a lawyer--

Justice Stephen G. Breyer: Well, I want to ask you about that, because in your brief you refer in your footnote on page 6 to requirements of the Federal Government 44101-44103.

So I looked those up.

I discovered that 44103 says that it is a requirement, and you say you follow these requirements, that you shall establish under regulations of the FMC financial responsibility.

And those regulations tell you that, at least as best I could read them, that you must furnish a written designation of a person in the United States as a legal agent for service of process, and they are referring to instances in which somebody on a ship suffered an accident.

So since you say that you are complying with that, I would like to know the name and address of that person in the United States for whom you must send legal process, because if obviously that had been on the ticket, that is precisely the man to whom this plaintiff would have sent the notice.

Mr. Glazier: --I cannot answer the question now.

Justice Stephen G. Breyer: Well then, were you correct when you said in your -- in your brief that this company which you represent does comply with 44103?

Mr. Glazier: My understanding is the answer is yes, but I cannot address the specific question.

I submit--

Justice Stephen G. Breyer: It is relevant, I think, because it adds to the confusion if they are under a legal requirement to have a service -- an agent to receive service, and then they not only don't do it, but they don't have it printed on the ticket.

And they get everybody mixed up by having the same name in English, or a very similar one, and announcing someone you're supposed to serve, and then it turns out to be not that person you're supposed to serve.

It's a mysterious person that you can't find.

Mr. Glazier: --But the question, though--

Justice Stephen G. Breyer: It seems odd.

I'd like to know what the explanation is of this.

Mr. Glazier: --Well, the question is not a more generalized blame explanation, but under the rule, the language of the rule, whether Costa Crociere knew or should have known that the action would have been brought against it but for a mistake concerning the proper party's identity.

And the most problematic case -- part of the case for the plaintiff is why, when they were told in the answer that they had not sued the proper party, that Costa Cruise Lines was not the carrier, was not the operator, but Costa Crociere is, why did the plaintiff not do anything?

Justice Ruth Bader Ginsburg: --But we -- let's clarify that point now.

I am looking at 3a, which is the court of appeals opinion, and it says that

"Costa Crociere moved to dismiss, arguing that it had been sued after the 1-year ticket period allowed for claims set forth. "

--as set forth in the ticket.

Then the rule tells us that you have this much time to serve, and then the complaint will -- the -- the amendment will relate back to the date of the original filing.

It doesn't change your statement, your defense.

The 1-year statute of limitations isn't affected.

What is affected is the complaint will relate back if there's an amendment filed.

But the 1-year statute of limitations remains, and you didn't bother to answer until the -- that time had run.

Mr. Glazier: But if -- if, during the 120-day period -- you know, the Rule 15(c) happens to rely upon the measuring point, but service is not the crucial point.

Within that 120-day period, if the plaintiff had done anything, anything at all, to indicate that she had not sued Costa Crociere because of a mistake, then the complaint would have related back, a very easy case--

Justice Ruth Bader Ginsburg: Yes, but the relation back is different from the point at which the statute has run.

The statute runs after 1 year.

Then, if she does what the rules say, it can relate back to the date of the original filing.

The fact remains that you didn't file your answer until after the limitation period had run.

Mr. Glazier: --Yes.

Yes, we did not file the answer.

They filed the lawsuit on the eve of the--

Justice Samuel Alito: Why does that even matter?

I'm not really sure I'm following this argument.

Let's say that the answer was filed during the limitations period, and the lawyer -- the plaintiff's lawyer is a solo practitioner, and he or she is out of the office because the lawyer's on a cruise--

[Laughter]

--and doesn't come back for 2 weeks.

And by that time, the limitations period has run.

It's still a mistake.

Mr. Glazier: --If--

Justice Samuel Alito: Where do you see in -- the question on which cert was granted has to do with imputed knowledge.

Where do you see in the text of this rule anything that picks up the concept of either imputed knowledge or actual knowledge?

It just talks about a mistake.

Mr. Glazier: --We do not rely at all upon imputed knowledge.

The Court granted review, but we don't think there is imputed knowledge here.

Justice Samuel Alito: Well, where -- just -- where do you -- where in the rule is there anything that relates to the reasonableness of the mistake?

What if it is the most foolish, negligent mistake you can possibly imagine?

Is it not still a mistake?

Mr. Glazier: The rule contemplates by its structure that the mistake will be the cause of the reason why the -- the plaintiff did not sue the parties.

Justice Sonia Sotomayor: That's not what the rule says.

That's not what the rule says.

The rule doesn't talk about what kind of mistake or why.

The rule says what the defendant should have known.

And so, when you read this complaint, it's very clear you know you're the carrier.

Mr. Glazier: Yes.

Justice Sonia Sotomayor: You know cruise -- the other line, the sales agent, can't be the carrier, correct?

Mr. Glazier: We--

Justice Sonia Sotomayor: So it's either a factual or a legal mistake.

There is no other way to read that other than that there is a mistake.

Mr. Glazier: --And then--

Justice Sonia Sotomayor: Because -- then have you to answer Justice Breyer's question, which is: What conceivable reason that is not either negligence or unintentional or inadvertent or just plain stupidity, however you want to define it, that someone who is injured would want to name a party who wasn't responsible for the injury?

Mr. Glazier: --The most powerful evidence is simply when they were informed of the claimed mistake, they did nothing for 95 days to indicate in any manner whatsoever that it was a mistake.

They had--

Justice Samuel Alito: Well, that's evidence from which the absence of a mistake might be inferred.

I agree with that, but that doesn't establish that it wasn't -- it wasn't a mistake.

Mr. Glazier: --Well, this -- whether something is a mistake ultimately is a factual issue.

There's a legal question of whether a plaintiff's knowledge of the identity of a proper party can preclude a finding of mistake.

But once we get past that--

Justice Sonia Sotomayor: But, counsel, don't -- what you're really talking about is whether once the answer was filed, they were dilatory in making their motion.

I don't understand how you can argue that the day you received this complaint, you didn't understand that some sort of mistake had been made.

The day that the answer came in, you might start to have a doubt because of their delay in the motion to amend, but doesn't that go to a 15(a) question, whether the judge should have given leave to amend because of dilatory tactics?

Isn't that a 15(a) question, not a 15(c) question?

Mr. Glazier: --Well, delay in moving to amend via 15(a).

But 15(c) requires the judge to determine whether there was a mistake.

And here, in essence, we have a test case: Well, the plaintiff is claiming that the reason why she did not sue Costa Crociere--

Justice Sonia Sotomayor: Is there anything in the face of the complaint that would suggest anything but a mistake?

Now, forget -- I'm being very specific.

On the face of the complaint.

You read that.

Mr. Glazier: --Yes, I believe there is.

The complaint specifically makes clear that the plaintiff's lawyer read the ticket.

Justice Sonia Sotomayor: Where does it say that?

Where does it say:

"I know that the carrier is Costa Crociere? "

Where does it say that?

Mr. Glazier: The complaint certainly does not say that.

What--

Justice Sonia Sotomayor: What the complaint says is that Costa Cruise, the operator of the vessel, injured me, correct?

Mr. Glazier: --It says that the--

Justice Sonia Sotomayor: And is that an accurate statement of fact?

Mr. Glazier: --That -- it's not an accurate statement of fact.

Justice Sonia Sotomayor: So--

Chief Justice John G. Roberts: No, I would have said the previous paragraph, 9, says:

"The plaintiff has complied with all the pre-suit requirements of the passenger ticket. "

So you know they read the ticket.

Mr. Glazier: Right.

And in the paragraph before, venue is proper in Broward County; defendant's passenger ticket contains a forum selection.

So we know when Costa -- Costa Cruise Lines, or Costa Crociere learns of this, we know that the plaintiff decided--

Chief Justice John G. Roberts: Now, which is it?

Is that a Freudian slip?

[Laughter]

Mr. Glazier: --No.

No, because we're -- because we're not disputing--

Chief Justice John G. Roberts: Just a mistake.

[Laughter]

Mr. Glazier: --We're not -- we are not disputing the notice issue.

What -- what is clear is they have read the ticket, and despite that--

Justice John Paul Stevens: Despite that, they made a mistake.

Mr. Glazier: --they have decided to sue Costa Cruise Lines.

Justice John Paul Stevens: They made a mistake, right?

They read the ticket, and despite that, they made a mistake.

Mr. Glazier: No.

Justice John Paul Stevens: What?

Mr. Glazier: We don't think so.

Justice John Paul Stevens: Why isn't -- why doesn't the rule cover it?

Mr. Glazier: But, again, if we move past--

Justice Antonin Scalia: I object to your relying upon the -- the answer as -- as establishing compliance with (C)(ii), because (C), in the prologue, says

"is satisfied, if within the period provided by Rule 4(m). "

And there is at least some point within that period before the answer was filed.

And if, within that period before the answer, you knew or should have known that it was a mistake, it seems to me you lose.

Do you understand what I'm saying?

Mr. Glazier: --I understand what you're saying, but there's nothing in -- just the point--

Justice Antonin Scalia: And the -- the only thing you could rely on for that short period before the answer is filed is simply the ticket, right?

Mr. Glazier: --There's nothing in the rule -- the ticket and the complaint -- there's nothing in the rule that says that only events up to point of the running of the limitations period or the service of the answer are relevant.

It is throughout the certain -- within the period--

Justice Antonin Scalia: Well, you are reading "within the period" to mean "throughout the period".

It doesn't say "throughout the period".

It says "if within the period".

Mr. Glazier: --Well, the district court, which is serving as the fact-finder there, looked at all the evidence.

And the powerful evidence is the service of the answer, which identifies the party--

Justice Antonin Scalia: I think it's an important issue with respect to the statute.

I don't think we can treat cavalierly whether "within the period" means "throughout the period".

That's one of the issues here.

Justice Anthony Kennedy: I have one -- one question about the face of the ticket, the one with the picture on it.

Is it Costa Cruise or Costa Crociere that got this big award for B.E.S.T. 4> ["]?

Mr. Glazier: --I -- I don't know the answer to that.

Justice Anthony Kennedy: Pardon me.

Mr. Glazier: I don't know the answer at this time.

Justice Anthony Kennedy: I -- I make the assumption that it's the cruise line, Crociere, that got the award.

So the ticket itself confuses the two companies.

Is that a mistake, incidentally?

[Laughter]

If I am right, is that a mistake?

Mr. Glazier: I -- Your Honor -- clearly, as you said, Costa Crociere is the vessel operator.

The ticket makes it clear on the next page, the very next page--

Justice Anthony Kennedy: How many -- if you have a 1,000-page ticket, how many pages do you have to read?

Mr. Glazier: --Here, you only have to read one.

Justice Anthony Kennedy: But this is the first one.

Mr. Glazier: Well, this is--

Justice Anthony Kennedy: The one I pointed out to you with the mistake, that's the first one.

Mr. Glazier: --It's -- it's on the cover.

The ticketing agent here, Costa Cruise Lines, adds the cover.

The first page of the provisions say Costa Crociere is the -- is the vessel operator.

But, again, if one looks at the answer, there's no response.

No response, and then a motion for summary judgment.

Still nothing.

If the plaintiff had merely said in an e-mail or a phone call, hey, I made a mistake, then it would be clear.

An easy case.

But they did not act despite being informed.

Despite being informed in the answer of the identity of the proper party and in the motion for summary judgment.

The trial court, serving as the trier of fact here on this issue, had to make that decision.

Maybe the court with another--

Justice John Paul Stevens: I'm still puzzled, because Rule (C) just requires -- describes the state of mind of the defendant, correct?

C(i) and (ii); isn't that right?

Mr. Glazier: --Yes.

Justice John Paul Stevens: And is it not true that under (i), the defendant did receive such notice of the action, would not be prejudiced?

That's clear, isn't it?

Mr. Glazier: Yes.

Justice John Paul Stevens: And is it also true that at the time they received the complaint, they knew or should have known that the action would have been brought against the carrier instead of the broker?

Mr. Glazier: The answer--

Justice John Paul Stevens: I just don't understand how you get around the plain language.

Mr. Glazier: --Our answer is no, and especially considering, within the events, they don't show that there's--

Justice John Paul Stevens: You don't think -- you don't think that the agent didn't realize that they would have sued the carrier if they had known the identity of the right party?

Mr. Glazier: --What is known is that they had the ticket.

They still decided--

Justice John Paul Stevens: I understand all that.

Mr. Glazier: --to sue Costa Cruise Lines--

Justice John Paul Stevens: But we're talking about the -- about mindset of the defendant, and to say that they wouldn't have sued -- they would have sued the broker instead of this carrier?

It's absurd.

Mr. Glazier: --Well, the events played a role and demonstrated that even after the plaintiff was informed of the identity of the proper party, they continued to pursue the claim against the ticketing agent.

Chief Justice John G. Roberts: Thank you, counsel.

Mr. Bendure, you have 9 minutes remaining.

REBUTTAL ARGUMENT OF MARK R. BENDURE ON BEHALF OF THE PETITIONER

Mr. Bendure: Thank you, Mr. Chief Justice.

Obviously, from the questions, the Court has a good grasp of the facts and the issues in our arguments.

I'd just like to clarify a couple of factual points.

The district court ruling didn't rely on the ticket at all.

What the district court said was: I adopt the legal premise that if you knew before the filing of -- before the running of the statute of limitations but didn't sue, that would not be a mistake.

And here, says the district court judge, they filed their answer after the statute of limitations, and that's why you lose under a rule that requires that notice before the statute of limitations expires.

That was the district court rationale.

The circuit court was the one who relied upon the imputed knowledge notion that is now, I think, disavowed by Respondent himself.

With regard to the--

Justice Antonin Scalia: This is sort of an equitable rule, isn't it, this mistake?

We're going to, you know -- equity takes account of such things.

It seems to me very reasonable to say: If the mistake is egregious, it doesn't apply.

Mr. Bendure: --I think now one gets into a wonderful process of trying to identify mistakes on a scale of egregiousness.

Like, how many points of egregiousness would it take?

And I think that's beyond the statute, or the court rule itself, which just uses the plain language "mistake".

Chief Justice John G. Roberts: I would have thought your answer would have been: This has nothing to do with equity at all.

It's just the interpretation of a legal rule.

Mr. Bendure: Certainly.

And the rule itself -- I understood Justice Scalia's point to be that the interpretation of the rule is designed to be liberal in its application to avoid the forfeiture of potentially meritorious causes of action over technical mistakes which have nothing to do with the merits.

I thought that was the sense in which you used the word "equitable".

The other point I'd like to make, even though it's, in my view, legally insignificant, is their argument regarding the nature of the delay.

Their motion for summary judgment was filed on May 6th.

Two days later, the court erroneously dismissed the lawsuit for a period of approximately a month.

It was then reinstated on June 5th, and our response, which sought relation back, was filed on June 13th.

So in addition to the scheduling order, there is a 1-month period of time in which the case was erroneously dismissed.

So if it were significant, we could say there's not significant delay.

But the ultimate point is it's legally beside the point.

If the Court has no further questions, I'll--

Justice Stephen G. Breyer: This might be tangential, but is there a reason to suggest the Federal Maritime Commission look into this?

Because I read the regs.

I don't understand quite what's going on, because it seems to me they have a rule that is designed to prevent this situation.

Mr. Bendure: --It may well--

Justice Stephen G. Breyer: Is that true, what I'm suggesting or not?

You know the area better.

Mr. Bendure: --I don't know.

I'm not a maritime lawyer, Your Honor.

But I think certainly if the Court's opinion were to note it, the Maritime Commission might well take a hint from the opinion and look into it.

Chief Justice John G. Roberts: Thank you, counsel.

Mr. Bendure: Thank you.

Chief Justice John G. Roberts: The case is submitted.

Featured:

Gonzalez v. Crosby - Oral Argument

Fri, 09 Jan 2009 14:49:02 +0000

Case:

Gonzalez v. Crosby

Media File:

04-6432_20050425-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Paul M. Rashkind

Chief Justice Rehnquist: We'll hear argument now in Aurelio Gonzalez v. James Crosby.

Mr. Rashkind.

Mr. Rashkind: Mr. Chief Justice, and may it please the Court:

We confront today the Eleventh Circuit's categorical and jurisdictional prohibition of rule 60(b) in habeas corpus cases absent fraud.

That is a rule that has been rejected by nearly all of the other circuits and, in fact, has been rejected by the United States in its amicus brief filed in this case.

We urge the Court to adopt instead the approach of the other nine circuits that have commented on this issue, the functional approach, in which a court is deemed to examine each motion individually to determine whether or not the motion comports with both rule 60(b) and AEDPA.

I think the test we proposed here is a fairly simple one, although I'm not sure in the briefing it comes across as being as simple as it really is, but the test we are proposing, as opposed to the test proposed by the United States, is the one being used in nearly all of the other circuits and it has percolated through the system as one that seems to work very well.

It's a two-part test and it's very simple I think.

First, does the motion that's filed challenge the Federal judgment on a ground cognizable under one of the six prongs of rule 60(b)?

If not, if it's really a new claim, if it is not within one of the six prongs of rule 60(b), then simply the district court denies it.

If, on the other hand, the motion is a true 60(b) motion, as ours was in this case, then the court goes to step two, which is to examine which is the six prongs is implicated, what is the jurisprudence regarding the six... that particular prong, and how would it apply in this particular case.

That's the functional approach that most of the circuits have been using.

Justice Kennedy: At that point when the court makes that examination under your rule and it comes to point six--

Mr. Rashkind: Yes.

Justice Kennedy: --does it refer at any point or in any circumstance to AEDPA?

Mr. Rashkind: It does not but... but point six has been cabined by jurisprudence.

Although point six appears to be a wide-open door for any motion to be filed and granted, the courts, even before AEDPA, have treated category six as one that requires extraordinary circumstances.

We have been able to quantify.

Both an amicus who filed on behalf of the petitioner and the United States and the respondent have quantified the number of cases that have gone through the rule 60(b) process.

There have only been, since AEDPA was passed, 28 successful motions that we can quantify, that are published in any way.

And we would like to think, at least, that if the State or the Federal Government thought there was an inappropriate application, it would have been raised on appeal and we'd have that statistic.

28 in the 9-year history of the statute means fewer than 3 per year... or slightly more than 3 per year for the whole country, a fraction for circuits.

Justice O'Connor: Well, if we were to make clear that 60(b) is widely available, even category six, don't you think... and as a result the AEDPA restrictions don't apply, don't you think that number would increase rather dramatically?

Mr. Rashkind: I do not.

And I do not because at this point apparently nine circuits are following the rule we propose, and so the statistics that both the respondent that we bring to you are that small, are that infinitesimal because the courts have always treated 60(b) as a last ditch, extraordinary circumstances required.

One can go through each of the six prongs and easily hypothesize examples that are appropriate, (b)(1), (b)(2)--

Justice O'Connor: Well, there's no language in category six referring to extraordinary circumstances, any other reason justifying relief.

Mr. Rashkind: --The Court in the Ackermann decision... there were two early decisions construing 60(b).

The first was the Klapprott decision in which the Court recognized that 60(b) is intended to correct the kind of errors that might occur that are important.

The Ackermann decision followed a year later and said, however, this is not a wide-open door.

Extraordinary circumstances are required.

Chief Justice Rehnquist: But it's still very vague.

Mr. Rashkind: It is but it isn't.

It's vague in terms of reading the simple rule, but it's not vague if one considers the jurisprudence that surrounds the rule.

One cannot ignore a half-century of... of decisions, which have rejected 60(b)(6) and other 60(b)--

Justice Breyer: All that is true, but I think that the court below and the other parties say... almost everybody is on your side.

However, they also note a problem, and the problem is that given the very rigid structure of AEDPA and the imagination of lawyers, that if 60(b) hasn't proved an escape hatch for getting around the AEDPA restriction, it will, and that what the lawyers will do is they will reconstruct what they'd like as a second habeas and put it in the form of a 60(b).

And so I can accept everything you say, but if that in the back of my mind is a concern running around Congress in this way, what form of words could you put in to restrict 60(b) to its domain which is the domain in which it's been used so far?

Now, the Criminal Justice Legal Foundation filed a brief in which they tried to do that.

I thought that was a constructive effort.

So what's your opinion--

Mr. Rashkind: --Well, I would--

Justice Breyer: --about how best to do that?

Mr. Rashkind: --I would prefer to rely upon the Court's principles in this regard.

Justice Breyer: No, but that's--

Mr. Rashkind: Rhines... Rhines v. Weber is of good help here.

Rhines v. Weber, that the Court delivered just very recently, considered the interaction of a rule and of AEDPA, and I thought it very clearly set forth three principles which work well within the test here.

First, that there has to be good cause and good cause, of course, is clear in the jurisprudence here, that we're talking about extraordinary circumstances, not a simple legal error.

In this case, for example, the extraordinary circumstance is that, for all intents and purposes, my client has been denied his first petition of right because the court foreclosed the issues erroneously.

So good cause is the first thing that I learned from Rhines.

Secondly, that there have to be potentially meritorious underlying issues.

Now, that's going to filter out a lot of the cases because you can't come into court with another issue that might not be good, it mightn't be an unexhausted issue, it might be--

Justice Scalia: It's pretty flabby.

Mr. Rashkind: --one procedurally defaulted.

Justice Scalia: It's pretty flabby.

Potentially meritorious?

Not probably, potentially.

Mr. Rashkind: Well, it is... it is the terminology used in Rhines.

And what I'm trying to do here for the Court is to draw upon your own authority, the words you've spoken, as opposed to the test proposed by the Criminal Justice Foundation and by the United States, which are interesting tests but in no way depend upon the Court's own jurisprudence.

I'm trying to offer the Court its own tests that have worked.

Chief Justice Rehnquist: But this is going to be taken up by some 800 district judges and a couple hundred appellate judges, and they're the ones who have the final say in most of these cases just because we decide so few.

Mr. Rashkind: And I think that's why this test works.

The third point would be that there be timeliness.

Justice O'Connor: Well, aren't we dealing here with a time bar issue?

Mr. Rashkind: We are.

Justice O'Connor: I mean, there... there was not a determination below, but an extraordinary amount of time expired before the application was made.

Why would that count as some extraordinary circumstance?

Why shouldn't the petitioner be stuck with the time bar?

I don't see how this fits even under your proposed rule.

Justice Kennedy: I was going to ask the same question.

It's about as pedestrian an issue as you could get.

It comes up all the time.

I mean, this is not a cosmic legal issue.

Mr. Rashkind: It really isn't as pedestrian as it may have seemed.

We underwent a change in the law, in AEDPA, that the Court has recognized is not fully clear.

And so this was one provision the Court had to clarify in Artuz v. Bennett, and there was a very small number of cases.

I think we totaled eight in which relief was granted because district courts had incorrectly barred a petitioner from the first petition because it really wasn't a violation of... of the statute of limitations.

Justice Ginsburg: Why... why did Florida deny relief in... in the post-conviction?

I mean, one reason that looks like it might apply is that Florida had a 2 year statute of limitations and this was brought up 14 years later.

Mr. Rashkind: Well, it wasn't a 2-year statute of limitations, Your Honor.

In fact, it was slightly different from the Federal statute of limitations as well.

There is a provision that allows for newly discovered evidence to bypass the standard 2-year statute of limitations, which by the way, the Florida statute of limitations wasn't even adopted until well after my client was convicted.

As you know, he says that he was told at his sentencing proceeding, you'll serve 13 years, thereabouts, on a 99-year sentence, and that induced his plea of guilty in this case.

And when 13 years came about, he inquired what's happening and they said, no, that's not going to happen.

You have a release date of 2057.

And as I think the Court knows from its decision in Linz v. Mathis, Florida... Florida statutes really changed in that way.

Gain time was reduced gradually and then much more quickly so that someone who might have served 13 years in 1982 is really looking at serving the 99.

Justice Ginsburg: Are you saying that counsel... what... what he alleges counsel told him was, in fact, accurate at the time counsel said it, that somebody who got a 99-year sentence wouldn't have to serve more than 13 years?

Mr. Rashkind: To be clear... and... and I want to be clear about his allegation is... because he does not speak English... that the interpreter told him this, and this was not during a plea colloquy.

This was during discussions between the lawyer and the client through an interpreter in advance of the plea itself.

And so his allegation has consistently been that that's what the interpreter told him his lawyer said.

Justice O'Connor: But has that been determined--

Mr. Rashkind: No.

Justice O'Connor: --by some court?

That's the allegation--

Mr. Rashkind: Correct.

Justice O'Connor: --pure and simple--

Mr. Rashkind: Correct.

Justice O'Connor: --yet to be determined.

Mr. Rashkind: And it's never been.

Justice O'Connor: And so we have to know how the time bar element folds in here, and in an ordinary civil case, a time bar would be an adjudication on the merits.

I mean, that... that would end the case, and why would it be a different, more liberal rule in habeas?

Mr. Rashkind: It is because that's the way the Court has treated it.

The Court has always--

Justice Kennedy: But you're... you're saying it is extraordinary.

Mr. Rashkind: --In a different sense I'm saying it.

In terms of computing whether a time bar is on the merits, the Court has not used that concept, which does relate to some sort of civil proceedings.

Plaut would make it appear first to money judgment type cases.

But the Court has not used that standard, for example, in Martinez-Villareal, has not used it in Slack v. McDaniel.

Instead, the Court has not looked at the nomenclature of the order that dismissed the case or denied this case.

Instead, the Court looks to did the... the court below address the claims of the petitioner.

And of course, a claim of statute of limitations is not a claim of a petitioner.

That's an affirmative defense of the State.

Justice Souter: Okay.

Counsel, what... that... that brings me to a question that I don't understand about your argument.

It seems to me you're biting off more than you have to bite off here.

Would you win on the following argument?

And I will tell you in advance that it looks to me as though you would.

But maybe there's some reason you're not making it.

Number one, your statute of limitations claim is not the kind of claim that AEDPA is concerned with when it deals with limits on second and successive petitions.

Number two, although a statute of limitations issue is on the merits, it is not on the merits in the second or successive petition category.

In this case, you don't have to worry about making a... an... an AEDPA end run so far as second or successive goes, and therefore, 60(b) can be used simply not as a wide-open door, but as a door that could be opened when your claim is a claim about a rule that barred you from getting into Federal court, which is what the statute of limitations rule does.

That's all you're asking for.

Mr. Rashkind: That's right.

Justice Souter: And finally, you have an extraordinary situation here because you have a later determination in Artuz which declared the law not as a change in the law, but as what the law presumably meant from day one.

As I understand it, if we accepted that argument, you would win.

Do you agree?

Mr. Rashkind: Yes, sir.

Justice Souter: Then why don't you make that argument?

Mr. Rashkind: I do make that argument, and to the extent... and... and I make that argument, but that argument was rejected in the court below which addressed it with a completely different approach.

And so I begin in this Court by having to address where I was in the Eleventh Circuit Court of Appeals.

Justice Ginsburg: Can you go back to the district court before the Eleventh Circuit?

You've now told me that the ground on which the Florida court denied relief was not based on the statute of limitations.

Right?

Mr. Rashkind: Correct.

Justice Ginsburg: In the Federal court, what is the ground on which relief was denied and how would Artuz affect that decision?

Mr. Rashkind: In the Federal court, the district judge said that the tolling provision would not apply here because it was the district court's determination that it was untimely when filed in the State court.

That was not, however, the position of the Florida courts.

Justice Souter: No, but your... your immediate concern is how do I get into a Federal court.

Whether you win or lose once you get in there is another problem, but I... as I understand it, that's not what we're dealing with here.

And... and the... you... you were kept out of the district court on a statute of limitations issue.

If you can say... if you argue all I've got in front of you, us, is a statute of limitations issue, that's all I want under... to raise under 60(b) and I have an extraordinary claim here because of the subsequent Artuz decision, that will get you into Federal court, if we accept that argument.

Whether... whether you win or lose, once you get there, I don't know, and I don't know that that's before us.

Mr. Rashkind: And it is not clear.

I wish it were because that's precisely what my pro se client wrote in his rule 60(b) motion.

He said I have been denied my right to a first petition because of an incorrect determination on the statute of limitations, that the Artuz decision makes clear that I was entitled to a tolling period that I was not awarded, and I would like judgment modified or reopened.

And that's as clear as a pro se litigant can make that claim.

That's what the claim has been from the very beginning, long before I was ever counsel.

Justice Breyer: --You... you had a question.

Remember my... you were giving me the three principles to prevent the end run.

Mr. Rashkind: Yes.

Justice Breyer: And the first was good cause.

The second was potentially meritorious underlying issues, and the third is?

Mr. Rashkind: No indication of dilatory tactics by the plaintiff.

Justice Breyer: Thank you.

Mr. Rashkind: And this is very helpful I think because it gives those three rules, which the Court has given us in Rhines, helped us and helped the district court to sort out the things that shouldn't be stopping or reopening proceedings.

Justice Stevens: May... may I ask you a question that may be a little bit collateral?

There was disagreement on the court of appeals, as I remember it, as to whether or not a COA requirement applies to a denial of a 60(b) motion.

What is your view on that issue?

Mr. Rashkind: Well, I actually argued and I do believe that it shouldn't require a COA.

And the reason is because... part of the reason is because this case began before Slack v. McDaniel and continued after.

And I think that's where Judge Tjoflat's opinion came from.

How can someone whose case is dismissed procedurally ever get a COA?

It's impossible because there's never going to be a constitutional issue.

By virtue of the procedural ruling, the constitutional was not addressed.

And Judge Tjoflat continued that dissenting position through the en banc decision, and I share the view that it is virtually impossible, if not completely impossible, in the typical case of a procedural resolution of the case, to ever get a COA.

In this case, the majority would point to the fact the my client did receive a certificate of appealability, but I don't think there are many others who will every get it because the question presented was, is a rule 60(b) still viable post AEDPA?

And that question won't recur, certainly not after the Court rules here.

And I think the very genuine concern that Judge Tjoflat had was and that he... that he articulated is it's virtually impossible to get appellate review.

One of the things we know about habeas corpus is--

Chief Justice Rehnquist: Well, we're not talking about ordinary appellate review.

We're talking about an appeal from an adverse decision by a Federal habeas court.

Mr. Rashkind: --Correct.

Chief Justice Rehnquist: So that wasn't quite as strange as you make it sound.

Mr. Rashkind: It is for this reason, Mr. Chief Justice.

Before, you could file successive applications.

In the early days of habeas corpus, you could file successive applications.

And the reason given was there was no appeal.

And so you could go from one judge to the next judge because there were no appeals.

Then, of course, we had appeals, and the reason for having successive petitions would diminish.

But what has happened to the appeal in a habeas corpus case is it has become so constrained that in many respects it doesn't exist, and that's what happened here.

Here's my client who faces a situation in which he has clearly been thrown out of court improperly, and he goes to the court of appeals to have that decision reviewed and can't get past the gateway of the certificate of appealability.

And so he has no opportunity to really have an appellate review.

He has none.

Chief Justice Rehnquist: Well, but maybe that's what Congress wanted.

Mr. Rashkind: I don't think Congress did intend that.

When we looked--

Justice O'Connor: But why isn't that always the case if it's time-barred?

Mr. Rashkind: --If it is time--

Justice O'Connor: If it's time-barred, you never have your chance to have the merits argued.

Mr. Rashkind: --Well, that's one of the ways in which a case could be dismissed procedurally, but it's not time-barred if the court rules it was erroneously.

And that's the concern that I think my client has here.

Chief Justice Rehnquist: Do we bring this all to a halt?

I mean, there's always one more argument to make that the last court to rule against me was wrong.

Mr. Rashkind: One of the nice things about rule 60(b) is it really is a disciplined approach to a court examining its own mistakes.

It isn't a wide-open door in any respect.

It is a disciplined approach.

There are six specific grounds, and even though the sixth one looks like it's wide-open, it certainly isn't under the jurisprudence of the Court.

And so what this does is provide a very important opportunity for a judge to be able to look at an intervening decision from the Supreme Court of the United States and say, I have denied this person what Congress wanted them to have.

There's no question.

One reads AEDPA and one thing is very clear.

They... Congress intended for a person who has exhausted claims, not procedurally defaulted them in State court, and has filed a timely petition, that person under 2254 is entitled to have the claim entertained.

And when a court makes a mistake, a procedural mistake, that forgoes or eliminates the opportunity for review, and that fairly reviewable on appeal, depending on how the certificate of appealability may be phrased... and often these folks are pro se... I think what happens is 2254 has failed and what Congress intended to happen isn't going to happen.

The person was entitled to one petition, one bite at the apple and never receives that bite at the apple.

Justice O'Connor: Well, now, the Federal Government has a different proposed rule than yours.

Are you going to comment on their proposal?

Mr. Rashkind: I will.

With due deference to my colleagues, it's 177 words long, over two pages.

And that's why I thought that the approach that we brought to the Court from the other nine circuits is a simpler... what I would call a simple two-step.

Their approach actually can be read, as we did in our reply brief, to fit within our own rule, but I think the problem with the Government's rule is it is so broad and it does not rely upon any of the Court's precedents in... in its writing.

And so what you do, if you adopt a rule like that, first of all, is create confusion.

And secondly, what you do is you make a whole new set of rules that are separate and apart from what you... the Court has previously done in its AEDPA jurisprudence.

To be able to touch upon Slack v. McDaniel, to be able to draw upon Martinez-Villareal, to be able to take from Rhines v. Weber, create a formula and a package that's familiar to the courts, to take a rule that's 177 words long that the Government puts together that I interpret as being favorable to my client and they interpret as being unfavorable to my client, I think just puts the kind of difficulty in the courts that this case should try to avoid.

So my comment on it is that it may well, if it's read as we did in our reply brief, be the same thing that we're saying and what I refer to as a simple two-step test.

And if not, it's just going to be a source of great confusion.

Justice Ginsburg: What about the... you... you said 60(b) fits this like a glove because it's the district court correcting its own errors.

But it isn't usually... 60(b) was framed with the idea of the district court being the very first instance court.

And here you will have the district court as the third going up the ladder.

So... and... and given that the habeas rules say that... that civil rules are applicable but have to be modified to be compatible with habeas jurisdiction.

Mr. Rashkind: I think it's very important to realize that both rule 81 of the Federal Rules of Federal Procedure and rule 11 of the rules of habeas procedure, which the State would have us use as a constraint, really are the first things that tell us that there's supposed to be a functional approach.

Both of those rules tell us that the rules apply to the extent that they're compatible, and so that's certainly not a categorical approach.

That is a functional approach.

Justice Breyer: But the... the Government, by the way, seems a broader rule than yours.

The only thing it rules out is new legal claims or new evidence.

I don't see anything in your... tell me if I'm wrong, but I don't see anywhere where you say we should be able to bring a 60(b) motion based on new legal claims or new evidence.

Mr. Rashkind: New legal... this is the part that I think we have to look both at 60(b) and the statute.

New claims... new claims... are brought under 2244(b)(2).

Same claims are either going to be barred by (b)(1) or, if heard at all, under 60(b).

Justice Breyer: That's what I said.

I don't see how the Government hurts you.

I think... I think if you the Government's, you're even better off.

Mr. Rashkind: Well, I think that they're--

Justice Breyer: I mean, it's even... but I want to know why... why... there's some reason you don't like the Government, and... and... other than fact that they must hurt you in some way.

I don't see how it hurts you.

Mr. Rashkind: --Well, I don't think it does, but they do.

So that troubles me.

[Laughter]

Justice Breyer: --make us--

Mr. Rashkind: They make an argument that under their test, my client should not prevail.

I can make an argument under our test my client prevails.

Justice Breyer: --And under their test too, you say it's applying the same rule of... it's not a new claim.

It's the same claim as... as... just that they... shows that the district judge got it wrong.

Mr. Rashkind: I think the heart of the Government's position is it requires a much more radical departure from general procedure than a simple change of law.

But I don't think it's a simple change of law, for example, when it is an intervening decision that interprets a statute that was in effect and that the mistake of not interpreting correctly is to effectively bar the first bite at the habeas apple.

Now, the Government does not give that ground in their test, and I think it's important that the Court leave that door open.

And that's why I think our test is better and theirs in inadequate.

I think ultimately we come down to three issues that support the position that we're taking.

Chief Judge Edmonson made note of this in his concurring and dissenting opinion.

He was troubled that we were not giving effect to both laws that Congress had approved, 60(b) and AEDPA.

By virtue of the majority rule, 60(b) had been categorically eliminated.

And I think the position we take before the Court today is that the Court should honor both provisions that Congress has adopted.

May I reserve the balance of my time?

Chief Justice Rehnquist: Very well, Mr. Rashkind.

Mr. Rashkind: Thank you.

Argument of Christopher M. Kise

Chief Justice Rehnquist: Mr. Kise, we'll hear from you.

Mr. Kise: Thank you, Mr. Chief Justice, and may it please the Court:

This case presents a fundamental inconsistency to this Court.

Congress said through AEDPA that a habeas petitioner is to take all their claims, put them in one basket, bring them to court within 1 year, and a sovereign State is going to defend that judgment in Federal court one time.

Rule 60(b) says, petitioner, use as many baskets as you need, take as long as you like, and the State, you're going to have to keep coming back over and over and over again.

And this case here presents that... that very problem.

Justice Ginsburg: Isn't that an exaggeration of how 60(b) works in practice?

It isn't that every civil judgment can come back and back again with 60(b) motions.

The district courts have been rather disciplined in handling 60(b) motions.

So I think you have exaggerated what 60(b) does in the ordinary civil rules context.

Mr. Kise: Well, respectfully, Justice Ginsburg, I... I would disagree with that in this sense.

I would disagree with it in the sense that as Justice O'Connor pointed out, if this Court were to open that door, I think you would see that sort of abuse.

I think you would see that sort of manipulation of the process.

I think you would see that sort of--

Justice Stevens: But have we seen it in the... there are other circuits who do adopt that rule, aren't there?

And have we seen the abuse you're describing?

Mr. Kise: --We have not yet, but I would submit to Your Honor that that is because there is still this uncertainty because this case is here before this Court, and... and because this has not yet been approved.

If this is approved by this Court, then you're going to see sovereign States like Florida dragged back in here nearly 25 years later--

Justice Souter: Well, that depends--

Justice Kennedy: Well, I had the same comment or the same reaction as Justice Ginsburg.

Forget about the habeas area.

Just in... with general civil judgments, have there been Law Review articles saying that rule 60(b) undermines finality?

People kept going back, back, and back.

I... I thought quite the opposite, that we were living very well with rule 60(b).

Mr. Kise: --Well, in... in the ordinary civil context, that's perhaps correct, Your Honor, but... but this isn't the ordinary civil context.

This is the habeas context.

And Congress has said that this is the structure that we want to take.

This is the rule that we want to take.

And as this Court has recognized that... that AEDPA was passed with... with this enduring respect for finality, this respect for the sovereignty of States.

State, you're only going to have to come back here one time.

You're only supposed to litigate one time, one... all the claims in one basket.

They're brought within 1 year, and the State is to defend its judgment one time because--

Justice Souter: --Okay.

But his... his whole argument is you, State, get exactly what you're entitled to if I win on 60(b) because what I was entitled to and what you were entitled to was the 1-year statute but subject to the rule in Artuz.

That's all you get, State.

And what he is saying is, I want to get back into court so that I can have the statute of limitations... the benefit of the statute of limitations as Artuz construed it.

That means you, State, get what you want and I get my one chance.

How is that an open door to the abuse that you're talking about?

Mr. Kise: --Well, Your Honor, again, there... there has to be some finality to the process, and... and here what the petitioner got was at the time a perceptively correct view of the law.

Justice Souter: He got what Artuz said was an erroneous view of the statute of limitations.

Mr. Kise: 2 years after the district judge made his ruling in this particular case.

And it... it was in this particular case 2 years.

It could be 10 years.

It could be 15 years, and that's the problem that we see is that if--

Justice Souter: And do you... do you think that there is... that there is this... this sort of tidal wave of... of erroneous statute of limitations determinations that, if Artuz is applied, will suddenly be coming 5, 10, and 20 years into Federal court?

I mean, it... it... your argument, in relation to his particular claim seems exaggerated.

Mr. Kise: --Well, Your Honor, it's not exaggerated when you look at it from the standpoint that... that Congress intended us to be in court one time to defend this judgment in Federal court.

We were there.

He received a--

Justice Souter: You... you were there for the purpose of getting him booted out.

I mean, you didn't... you didn't get into the merits of anything.

Mr. Kise: --Well, he received a... a final disposition on the non-technical procedural basis which was the applicable law at the time.

He received that adjudication and--

Justice Stevens: Well, it was not the applicable law at the time.

The decision related back to before that hearing.

Mr. Kise: --Well, Your Honor, then that would, respectfully, eviscerate any... any notion of... of the statute of limitations--

Justice Stevens: No.

Sometimes there are law changing decisions, but this was not a law-changing decision.

It's a decision interpreting what the law was from the date of its enactment.

Mr. Kise: --But based on that, Your Honor, then there would be no statute of limitations.

If... if that decision came out 10 years from now, we would then be back in this Court on a 60(b) motion, which I would submit is fundamentally inconsistent with what Congress intended.

Justice Souter: If there had been an Artuz violation and not every statute of limitations determination implicates Artuz.

Mr. Kise: That's correct, Your Honor.

But at the same time, there may be some other mistake or some other excusable neglect or some other issue that comes up.

I mean, what Congress intended to prevent is not just the successful filing of a 60(b) or the successful revisiting, if you will, of the judgment.

It... it intended to prevent the actual attempt itself.

I mean, the idea is... is that once this judgment is adjudicated, once we've had this adjudication, you are not to come back.

You are not to--

Justice Souter: Well, what... what Congress was principally concerned with... Congress was concerned with two things.

It was concerned with second and successive.

That's not what is before us.

Congress was also concerned with a 1-year statute of limitations.

What is before us on that point is that this guy did not get the benefit of the statute of limitations that he had a right to get the benefit of, that there was a flat mistake of law.

So by... by recognizing his statute of limitations claim, we do not open the door to second and successive litigation.

We open the door simply to Artuz problems on statute of limitations rulings and that's a pretty narrow category it seems to me.

Mr. Kise: --But I would... I would respectfully disagree with Your Honor's premise that... that he... he's not seeking to revisit an adjudicated petition.

He did... he is seeking, as... as we see it, to--

Justice Souter: Sure.

Sure, he does.

And if it's second and successive, he's going to get thrown out again.

Mr. Kise: --And we would submit that it is second and successive because it's seeking to revisit that adjudication, an adjudication that was had on a non technical procedural basis.

Justice Breyer: So that's the--

Justice Souter: You may... you may be right, but that's what district courts are there for.

Mr. Kise: But... but the Congress intended to take that discretion away from the district courts.

2244(b)(1) says you will not look at it again, and 2244(b)(3) says, in fact, that when you do go back to potentially revisit an issue, when you do go back to potentially look at a second or successive, that it's not even the same district judge that makes that determination.

As in 60(b), you go back to the same judge.

2244(b)(3) says, no, a three-judge panel of a circuit court of appeals must first determine whether or not you even have a right to get in--

Justice Breyer: --That's also true of (b)(3).

Mr. Kise: --Yes, Your Honor--

Justice Breyer: And not even the Eleventh Circuit said (b)(3).

And therefore, you want to say absolute, or are we really talking about which 60(b) motions escape the strictures of AEDPA?

Mr. Kise: --Well, I... I think we're talking about which 60(b)(3) motions... or 60(b) motions do escape the strictures of AEDPA.

Justice Breyer: And you're prepared to defend the... the Eleventh Circuit.

Mr. Kise: I... I am, Your Honor.

Justice Breyer: Correct, though you're alone on that because even the Government doesn't and nor does the Criminal Justice.

But if you're prepared to defend them, I guess you'd say why is it that they will allow (b)(3), fraud on the court by the adverse party, to escape, but should your own witness turn out to have been committing his own fraud for whatever set of reasons, you can't.

Mr. Kise: Well, I would... I would say why fraud... to answer your question, Your Honor, why fraud... let me back up first to the premise that... that our position and the Government's position are not far apart.

I would respectfully say that... that we are not that far apart.

I do not see that much light between the positions, although I know their brief leaves some room--

Justice Breyer: Well, under I guess the Government, you can bring everything under 60(b).

By the way, if they do bring a motion to reopen under 60(b) because of change of law, they're almost bound to lose.

There are hardly any cases which find that an adequate ground under 60(b).

But they let you do anything under 60(b), I take it, as long as the claims presented do not... as long as they are not trying to obtain relief on the basis of new legal claims or new evidence.

Now, I just noticed there's another one here.

Do not support habeas relief.

Maybe that's the problem.

Mr. Kise: --Perhaps I--

Justice Breyer: You explain.

I... I thought when I first read this, that this was quite broad, but I may not have read it--

Mr. Kise: --Well, and I don't want to pretend to speak for the United States because... because that... that might cause me to misspeak.

But to answer your question about why fraud is different, I... I have three bases for why fraud is different and why we think that that exception is the right exception.

One, this Court has said in the past that fraud is different than other things.

In the Hazel case that's cited in Calderon, this Court has said that tampering with the administration of justice through fraud involves more than an injury to a single litigant.

It is a wrong against the very institutions designed to safeguard the public, institutions that cannot tolerate fraud.

Justice Breyer: --So is that also true if his own witness has committed the fraud?

Mr. Kise: Well, I... I would... our fraud exception that... that we... we are delineating here is material, intentional conduct that subverts the process.

And it can't be just anyone, Your Honor.

Justice Breyer: Yes.

Mr. Kise: It needs to be someone in a position to subvert the process for... for a purpose like the Government or the court if you... if... a judge that's been bribed in the unusual example of that, or... or the... the subornation of perjury in the Hazel sense.

Those examples... that would be fraud that I think is what this Court was talking about in Hazel--

Chief Justice Rehnquist: What about a claim that a witness perjured himself, a witness for the government, during trial?

Mr. Kise: --Well, a witness for... a... a claim that a witness for the government perjured himself during the trial would certainly implicate material, intentional conduct designed to subvert the process.

And one of the advantages to using fraud is... is that it is a familiar bright line, workable standard for district courts.

And with fraud, you have to plead a little bit more particularly, and so you would avoid in some respects some of the question marks that would come up--

Justice Breyer: And all I'm saying is exactly whatever criteria is met, but it happens to be his own witness, and sometimes your own witnesses do have their little games, you know, with prisoners, and so it's the same thing.

Mr. Kise: --Well--

Justice Breyer: Does that not count too?

Mr. Kise: --Well, Your Honor, I think that would leave so much room for mischief, it would not be possible to contain the potential for... for appeals.

I mean, if every jailhouse snitch were... were subject to... to the... the 60(b) exception that we're... we're articulating here, if every... every petitioner could simply say, well, my own witness that I put up on the stand... that... that witness perjured himself or herself, then... then the opportunity for mischief would abound, and we would be back in the same position that we would be in general with... with States having to respond again.

Justice Ginsburg: Mr. Kise, this may be important.

Do you agree with Mr. Rashkind that in the Florida court the dismissal or the denial of relief was not on the Florida statute of limitations--

Mr. Kise: No, Your Honor.

We... we would submit that it is on the statute of limitations, that... that rule 3.850 provided the petitioner with 2 years within which to apply, and both of his petitions were dismissed on statute of limitations grounds.

And I don't know that that matters--

Justice Ginsburg: --But it's not... not clear from--

Mr. Kise: --to the end result here, but... but that... that's our position.

Justice Ginsburg: --That's not what the... this is... the... the form of dismissal in the Florida Supreme Court doesn't tell us that.

It just says something about allegations contained therein do not constitute legal grounds for granting the new trial.

Mr. Kise: Your Honor may be referring to the second 3.850 dismissal, and that second 3.850 didn't meet the requirements of the successive rule.

There... there was a first--

Justice Ginsburg: The first one was on the statute of limitations?

Mr. Kise: --Yes, Your Honor, and then the second one was also on the statute of limitations in addition to the fact that it did not meet the requirements of... of the successive rule because it was essentially the same claim raised again.

He raised the same claim a second time.

Justice Ginsburg: Do we have that anyplace in... in the papers before us, the first... the first dismissal in the Florida... in the Florida trial court?

Mr. Kise: I'm not sure exactly where it is in the appendix, Your Honor.

Let me see.

I... I don't know that we do.

I know we have reference to it, but I don't know that we have the actual language.

Justice Ginsburg: But you said--

Mr. Kise: It is... it is in the Eleventh Circuit opinion, I believe, Your Honor.

Justice Ginsburg: --that it was based on the Florida 2-year statute of limitations.

Mr. Kise: Yes.

I believe... when I said opinion, I'm sorry.

The Eleventh Circuit record, Your Honor.

It is in the Eleventh Circuit record, the... the decision of the Florida court.

But it is not in the appendix before this Court.

But returning again to Justice Breyer, because I don't think I finished my three reasons.

The first was because this Court said and says fraud is different.

The second is because there never was a first review in that sense.

I mean, they never obtained the first review that they... they were seeking.

And the third is... is the State's finality interest, which this Court has... has recognized as... as near paramount under certain circumstances, must yield where you have the presence of fraud.

And... and so that's why Florida maintains that this is the correct and... and only exception.

And... and there are several reasons that we maintain that this is the correct and only exception.

The first and... and most important, and... and as I started this presentation, is that this is the only exception that preserves congressional intent.

The second is... is that AEDPA and rule 60(b) cannot coexist except in very narrow circumstances because they address the same subject matter in fundamentally different ways.

And the third is, as I mentioned before, because the court--

Justice Stevens: But is it correct that they address the same subject matter?

Isn't 60(b) directed at the integrity of the habeas proceeding, whereas AEDPA is directed at the integrity of the original conviction?

Mr. Kise: --Well, I... I would respectfully disagree with Your Honor because 2244(b)(1) does deal with the... the revisiting of the Federal habeas petition.

The 2244(b)(1) specifically applies to the revisitation of the Federal habeas petition.

And in... in terms of how they deal with the same subject matter in different ways, as I began, AEDPA's whole purpose is to provide one basket of claims within 1 year so the State has to defend one time, and 60(b) allows for the potential... and... and I would submit to you more than just the potential if this Court were to approve a standard... for... for repetitive claims, many baskets, many... many years, and... and many times that the State has to come back.

And as I say, in this case the... the principle of finality is all but abolished in this case and all be eviscerated simply by the fact that nearly 25 years later Florida is still in this Court defending this judgment that was based on a guilty plea, not even a... a conviction.

And... and as this Court recognized, albeit not as part of the holding, but... but mentioned in... in Calderon with respect to the enduring respect for finality, this is something that has survived both direct and post-conviction review in the State court system.

I mean, this is... this is Federal review of a sovereign State's determination as to the application of its criminal laws, and Congress has made a policy determination that... that that Federal review must be limited because State... State exercise of its... of its police power and... and the enforcement of its judgments is something that needs to be respected.

And Congress... because the power to grant habeas is given by written law, Congress has the power to make that policy determination.

And while the petitioner argues that 60(b) somehow strikes a balance, I would submit to this Court that Congress has already struck that balance.

Congress has already made that determination.

There isn't another balance to be struck by the use of 60(b), but that a balance has already been struck by Congress and Congress has made a determination that in most circumstances finality is going to trump.

And this isn't a perfect system.

There are going to be exceptions with any bright line rule.

With any bright line rule that this Court has ever carved out--

Justice Ginsburg: Didn't Congress rule... rule out 60(b) in... in death cases?

Mr. Kise: --I'm sorry, Your Honor.

Specifically rule out 60(b)--

Justice Ginsburg: Yes, yes.

Mr. Kise: --in... in capital cases.

Justice Ginsburg: Yes.

Mr. Kise: I don't know... under the statute?

Justice Ginsburg: Yes.

I may be wrong about having--

Mr. Kise: I'm not certain.

We... we're submitting that the Congress under... under AEDPA ruled out 60(b) in all cases with the exception of... of the fraud.

Justice Ginsburg: --I thought there was a special provision for capital cases.

Mr. Kise: I don't believe so, Your Honor.

But with respect to the bright line rule that... that we submit is necessary to effectuate congressional intent, as I was saying, that it's not a perfect system.

And the petitioner can come up with all manner of examples that... that seem to implicate various policy determinations about what should or should not happen in a given situation.

But... but our position... and we believe the position of the Eleventh Circuit is... is that Congress has already weighed that now.

Congress has already made that determination.

Congress has already told us where the line is going to be drawn and it's going to be drawn on the side of finality and it's going to be drawn on the side of respect for State sovereignty.

And I would... would also submit that... that the Sixth Circuit test and the functional equivalent approach test that's advanced by the petitioner ignores really both the statute and it ignores reality.

It ignores the statute because AEDPA tells us you can't revisit an adjudicated habeas petition unless there are certain limited circumstances that are met.

And it ignores reality because the only reason to revisit a habeas petition is to ultimately revisit the underlying State court judgment.

And the only purpose for being there is to ultimately get at that State court conviction that is... that is under siege.

With respect to the coexistence, the petitioner made a point about this case is somehow like the Rhines case that was decided recently by this Court.

But in the Rhines case, this Court was balancing the exhaustion requirements with the statute of limitations provisions.

Here there's nothing to balance.

Here this is just simply a prohibition.

Congress says you cannot revisit except in these isolated, limited circumstances.

And so rule 81, habeas rule 11, and this Court's decision in Pitchess all say that 60(b) does not trump if the habeas statute holds differently.

And finally, the courts do need a bright line that's not subject to variance, as I mentioned earlier.

This is a workable standard.

They're familiar with fraud.

It's well defined in the case law.

It requires more particularized pleading which makes less room for mischief, and it... it gives the courts an easily identifiable standard by which they can effectuate that congressional policy, that congressional policy of one basket of claims within 1 year and the State will come into this Federal court one time to defend its sovereign judgment.

If there are no further questions, thank you.

Argument of Patricia A. Millett

Chief Justice Rehnquist: Thank you, Mr. Kise.

Ms. Millett, we'll hear from you.

Ms Millett: Mr. Chief Justice, and may it please the Court:

Justice Breyer, let me assure you that our position is, if not as strict, only marginally less strict than the State of Florida's.

Justice Breyer: On page 24, I read the or wrong.

Ms Millett: Okay.

Justice Breyer: It's... you meant the things on both sides of the or.

Ms Millett: It's very--

Justice Breyer: And I was thinking the first side you'd allow, the second side you wouldn't.

But if it's very, very strict, which now I understand it, because I read the or correctly when I went back.

Ms Millett: --All right.

I wanted to make sure--

Justice Breyer: My question would be why.

Ms Millett: --Yes.

And... and if you want a shorter statement... I mean, a brief is a brief... a short statement of what our test is, Justice Breyer, it's quite simple, and that is a rule 60(b) motion that seeks to set aside a denial of habeas relief on the grounds that it was incorrectly decided is barred.

That is the territory that AEDPA occupies.

That includes, Justice Souter, not just determinations on the--

Justice O'Connor: Would you say that again?

Ms Millett: --A rule 60(b) motion that seeks to set aside a final judgment denying Federal habeas relief on the grounds that it was incorrectly decided is a second or successive petition under AEDPA.

It can proceed only under AEDPA's terms, which change not only the standards for a second decision, but the decision-maker, the gatekeeper.

Justice Souter--

Justice Stevens: Is that a statement of when it's not available?

I want to be sure I... are you stating it positively or negatively?

Ms Millett: --It--

Justice Stevens: It is not available in the circumstance you described.

Right?

Ms Millett: --That's right.

It is... it is--

Justice Stevens: Now, would you state... tell us when it is available?

Ms Millett: --Okay.

The flip side of that, if I can... the... the title of section 2244 is finality of determination.

If you are seeking to upset a final determination, you are governed by 2244 not 60(b).

If you are not seeking to upset a final determination, let me give you the two... the two circumstances that come to mind right away.

One is the fraud exception recognized by the court of appeals, and there could be similar errors like that... and this is what we talk about in our brief... that essentially vitiate the existence of a determination in the first place.

They are that profound and that rudimentary.

Then you are not upsetting what our system recognizes to be a determination and what Congress wanted you to have.

The other exception is essentially 60(a), clerical... you're not... errors.

You're not really upsetting anything.

You're actually trying to implement or effectuate the actual ruling by the court of appeals.

The only gap... I'm not sure it's a gap at all after the argument here... is that we don't limit it to fraud.

We recognize that there are some other foundational, rudimentary, fundamental errors that conceivably could occur.

I'm not aware of them happening, but something like a biased judge addressed by this Court in Toomey v. Ohio.

Justice Breyer: But now you're into... I mean, you can use a tone of voice.

You know, it sounds very strong.

But I thought 60(b)(6) is weird things happen, and 60(b)(1) is there are all kinds of mistakes.

You know, some of them can just be accidental.

The lawyer was hit by a trolley.

And in fact, all of 60(b) is meant to capture that kind of thing.

So it sounds like what you're saying is, sure, follow 60(b), maybe not the evidentiary, maybe not the new evidence part, follow it, but be sure you do so strictly.

Are you saying more than that?

Ms Millett: I am saying a lot more than that, and that is, first of all, because the vast majority of things that are covered by 60(b) do not qualify as tantamount to fraud or a biased judge.

And... and the second incredibly important thing is that Congress changed the decision-maker.

Under 60(b), you have 645 individual district court judges applying the historic equity power to... to overturn final judgments.

Justice Kennedy: Where... where do you disagree with Judge Carnes?

Ms Millett: With Judge?

Justice Kennedy: With... with the majority of... in... in the Eleventh Circuit.

Ms Millett: If that opinion is read... and I think fairly it has to be... as saying only fraud and not errors of similar magnitude like a biased judge or some other complete breakdown so that our system doesn't recognize that to be a judgment... it's not what Congress thought it was giving you... then that would be... I can't tell you there's cases where this happens, but that... but the... the rationale for including fraud would exclude... include some other similar errors of magnitude.

That's our only--

Justice O'Connor: Now, how do you apply it in this case, the Artuz problem?

Ms Millett: --In... in this case, the Artuz problem is only an argument, and I... we're not even accepting that it's accurate, but only an argument that the court made a mistake of law.

A mistake of law is not a fundamental breakdown in our system.

It does not mean the court didn't act as a court.

This Court reverses in... or vacates in about 75 of its cases.

It doesn't mean all the lower courts were not operating as courts since we recognize them as at the same level of fraud.

It's routine to have mistakes of law--

Justice Breyer: Well, suppose Artuz had been decided and it was in the mail and the judge forgot to open his advance sheets that day.

And so he goes back to his office, says, oh, my God.

You know, I mean, a weird thing like that.

And of course, he says nobody has been hurt yet.

I'll reopen it.

Okay?

Is that all right?

Ms Millett: --If he does it within 10 days under rule--

Justice Breyer: Well, it's 10 days and a half.

Ms Millett: --10--

[Laughter]

Then, Justice Breyer, the nature of lines is somebody falls on the other side sometimes.

There's an appeal process to deal with exactly that.

Justice Breyer: And the reason that it's happened is because all the lawyers were hit by four trolleys.

[Laughter]

I mean, you see what I'm doing?

I'm simply trying to find cases that fit within the language, but they're very weird and justice cries out for a reopening.

Now, that's what it seems to me one is about.

Two is about.

Three doesn't really.

Three you agree applies.

Two may not apply.

Three you agree applies.

Four I think you probably agree applies or not at all.

Five doesn't apply at all, and six is anything under the sun.

Ms Millett: Justice Breyer, the problem is... and... and Justice Souter, you referenced this.

There have been many references to this, that 60(b) is not a problem.

It's already cabined out there.

In fact, it's not.

It's abuse of discretion review in courts of appeals.

We cite a case, Hamilton v. Newland, from the Ninth Circuit where they used 60(b)(6).

The... the petitioner filed his claims.

They were clearly barred by the statute of limitations, not an Artuz problem.

So he said, all right, I'm going back to Federal court with a 60(b)(6) claim.

I'm actually innocent.

That puts me in 60(b)(6).

I admit actual innocence.

It's... it's a very weak claim.

I can't been get relief on it.

But the district court said, come on in.

I'm going to decide your claims.

Justice Souter: Well, maybe--

Ms Millett: And the... and the--

Justice Souter: --maybe the district court shouldn't have done that, but whatever... whatever was wrong there, it was merely a classic application of... of review of a statute of limitations point.

There... there was much else involved and maybe it was improper.

My question, I guess, is why do you say that the... why do you assume that the policy animating applying 60(b) to a gatekeeping issue like statute of limitations, where there is an unusual circumstance as in Artuz, should be the same policy that animates applying 60(b), let's say, when there is an attempt to... to make an end run around the second and successive rules?

The latter I think we can all understand pretty readily.

I mean, it's very important.

You've got the... the... AEDPA if you allow that.

With respect to this kind of a statute of limitations problem, what the guy is asking for is what he was entitled to under AEDPA as a matter of timing and gatekeeping.

Why is the policy under 60(b) the same in those two cases?

Ms Millett: --Justice Souter, there's two answers to that.

The first is that this won't be... it will be hard to limit this to a statute of limitations because the next argument is going to be procedural default, and the next argument is going to be misapplication of Teague's non-retroactivity principle, and the next one is going to be mistake in applying adequate, independent State grounds.

The... a bulk... a huge percentage of Federal court decision-making in habeas cases is procedural rules because Federal habeas is not a roving commission for error correction.

You have to... at... in the same breath that you establish a constitutional violation, you have to show it's proper for Federal courts to act.

Procedural default and statute of limitations are as much your job to show to have Federal relief as it is to show that something went wrong under the Constitution.

It's a... there's a dual character to Federal habeas relief.

So this, in fact, is exactly part of the habeas... this is part of the second or successive determinations that... applications that Congress wanted to bar.

And we have to step back and think about what would happen here.

What we have is the State of Florida coming up 23 years after a guilty plea not because to defend... once again, it's judgment.

It's conviction not because of anything they did in the conduct of the trial, not because the guy claims to be actually innocent, but because almost 2 decades after the plea, a Federal court allegedly made a mistake of law that wasn't cleared up through the appellate process.

That's not the point of Federal habeas corpus.

That's not what it's supposed to be about.

But if we open the door, if we let the camel's nose in the tent, a camel is going to come behind it, and it's going to be procedural default, non-retroactivity of Teague, and all of the multiple other grounds on which Federal habeas decisions are made by courts.

Justice Ginsburg: Did the Federal court make a mistake of... of law if the... if the Florida court dismissed under the Florida 2-year statute of limitations?

Ms Millett: Did... did the Florida make a mistake of what--

Justice Ginsburg: No, no.

Did the Federal court.

And suppose that the--

Ms Millett: --No.

I guess... I think this Court is going to tell us.

I think the... the Pace v. DiGuglielmo case that this Court heard... I think it was last month--

Justice Ginsburg: --It's sub judice, before us now.

Ms Millett: --Right.

Justice Ginsburg: But do you agree with Mr. Kise that the first dismissal in the Florida court, the first denial was on the Florida 2-year statute of limitations?

Ms Millett: My... the order from the court, my understanding, simply denied it on the grounds of legal insufficiency, and it didn't give a further explanation.

It doesn't say what exact grounds was, but if you look to what was argued by Florida, they were arguing on timeliness.

Thank you.

Rebuttal of Paul M. Rashkind

Chief Justice Rehnquist: Thank you, Ms. Millett.

Mr. Rashkind, you have 4 minutes left.

Mr. Rashkind: Thank you, Your Honor.

If I may begin by correcting what I think are two inadvertent mistakes, but important ones.

Justice Ginsburg, in answer to your question about the first State habeas, these are... these documents are contained in... in your record.

They're noted at joint appendix 2-5.

The first State habeas was dismissed because it was not notarized.

That's the sole basis for its dismissal: it was not notarized.

The second one was brought and denied, and the court specifically notes, as we note in the yellow brief, footnote 7 on page 12, it set forth the... the court's grounds.

It says the motion does not state grounds for relief.

At no point does Florida ever adopt the State's position that either of the petitions was untimely.

The State court addressed them directly on the merits.

Justice Breyer, if I may, I can actually hypothesize several examples under subsection (5), of subsection (4), and perhaps even subsection (2) of rule 60(b), which would be permissible.

For example, under (5), a judgment that should no longer have continuing effect might be that the district court entered an alternative writ of habeas corpus, tried the defendant within 60 days or 90 days, or set him free.

And when everyone gets back to State court, it becomes plainly apparent that can't be done within 60 days, and either the State or the defendant might go back and say, please, amend that order out of time.

It's a final order.

Please amend it to make it 180 days.

We can come up with examples, I think, for each of the provisions, and I think that's really what's interesting about this rule.

It is written in a way that's durable against AEDPA, and it conforms nicely with AEDPA.

And it does not take a lot of extra thought, it does not take a lot more than adopting the Court's previous holdings for us to be able to make it workable within AEDPA.

The fact that this case is now in its 25th year is a result of law and not of delay.

Mr. Gonzalez alleges... and no one has ever been able to say otherwise because we've never had a hearing... that it took him 13 years to find out about the newly discovered evidence.

He exhausted his claims for 4 years.

He was only in Federal court for 1 year before the State raised a bar, a statute of limitations bar, which turns out to be incorrect.

In the last 7 years, there's been litigation both in the court of appeals and now before this Court caused by the State's argument that the case should have been dismissed on the statute of limitations.

My client is not responsible for the fact that it's the 25th year, but what we do know about this case is he has approximately 76 years remaining on his 99-year sentence.

And unless he gets one bite at the habeas apple, he has not gotten what Congress directed he receive.

Congress made one thing clear in AEDPA, and I think it's a good thing, and that is, if a defendant goes through and does what he's supposed to do in State court, he does not procedurally default the issues, he exhausts fully, and he timely files a petition, that was the candidate Congress wanted to have to get habeas review.

In this case Aurelio Gonzalez did all of those things, and he sits on the outside, having been told you get no bite at the apple, it's too late.

And that's just plain wrong.

And there's something wrong about that, and that's why there's rule 60(b).

60(b) is nothing but a coalescence of many great writs that were designed for one purpose and one purpose alone and that was to correct mistakes in extraordinary circumstances.

There can be no more extraordinary circumstance than that a person is denied their right to habeas review, and that's what's happened here.

And we respectfully submit that rule 60(b) is the only and best tool to remedy the error made within the discretion of the district court, and we ask for that result.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. Rashkind.

The case is submitted.

Attribution:

The Oyez Project

Featured:

Devlin v. Scardelletti - Oral Argument

Fri, 09 Jan 2009 14:50:22 +0000

Case:

Devlin v. Scardelletti

Media File:

01-417_20020326-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Thomas C. Goldstein

Chief Justice Rehnquist: Mr. Goldstein.

Mr. Goldstein: Mr. Chief Justice and may it please the Court: This is a case about the right to take an appeal.

Over Petitioner's objections, the district court confirmed a class action settlement that substantially reduces Petitioner's individual pension.

The Fourth Circuit held that Petitioner nonetheless may not appeal to argue that the district court abused its discretion in rejecting his objections.

Our principal submission is that, as Justice Kennedy explained in oral argument in the Felzen case, Rule 23 class members such as Petitioner are bound by the district court's judgment and thus are parties to that judgment with the right to appeal from it.

Because the Government, although seated at the opposite side of the table, actually agrees with us that class members are bound by the judgment, that objector appeals identify important legal errors, and that they also deter collusive settlements, I will leave to the Solicitor General's representative any arguments to the contrary that my friend Mr. Gold may make.

Justice Scalia: Can I test your thesis that u are bound by a judgment, you are a party to it?

I mean, there are cases where someone who has allied with a party and has used the same attorney and has maybe had some input into trial strategy, that that person will be bound by the judgment, but as far as I know, we have never allowed, no court that I know of has ever allowed such a person to take an appeal on the ground that well, since you would have been bound, you are a party.

Mr. Goldstein: Justice Scalia, I think it depends on what we mean by bound.

There are different, more expansive notions of collateral estoppel and res judicata.

What I'm talking about here is that the judgment operates directly upon the class member.

And let me be clear that our position is not to move beyond that.

Our position is not that it's sufficient to be a party, but that it is a necessary condition.

It is also necessary, and this is an important point for the distinction between appealing from an approved settlement and for appealing a litigated judgment.

Chief Justice Rehnquist: You say that the judgment operates directly upon the class member, as if we are talking about some sort of physical thing, but how is that operation on the class member different from, say, what might be res judicata or collateral estoppel in some other case?

Mr. Goldstein: Mr. Chief Justice, the difference is that while you can have an application of collateral estoppel or res judicata that extinguishes a right to pursue an action, what I'm talking about here and let me put it in very practical terms.

The Petitioner had a pension and that pension went down 40 percent when the district court in this case approved a settlement that said the COLA provisions of the pension plan are null and void, and that's the kind of direct operation I'm talking about.

Now, there is an unsettled area of the law stretching to precedents dating from the 1850s, the so-called quasi-party cases.

We don't think it's necessary to apply those here because unlike a Rule 23.1 class member in the context of a derivative action, we are directly bound by the action.

We are not talking about extinguishing a right of ours, for example, to sue on behalf of a corporation.

Justice Ginsburg: You are bound because a judge determined that you had an adequate representative.

I agree with you that every person in that class is equally affected and indeed there is no opt out of this class that we are dealing with.

But the determination has been made that you are represented by someone who is an adequate representative of all members of the class who will fairly and adequately represent the class.

So as long as the representative will fairly and adequately represent the class, why isn't it the end of it?

Mr. Goldstein: Well, that's a good entry into the purpose and function of Rule 23(e).

What happens is that at the point that it's acknowledged by the Respondents here that at the point settlement is agreed to, the class representative and be opposing named parties joined forces to oppose objections, and that continued at the stage of the case where you have to decide whether or not to take an appeal.

Chief Justice Rehnquist: Well, Rule 23 what?

Mr. Goldstein: 23(e).

Chief Justice Rehnquist: And where do we find that?

Mr. Goldstein: That would be in the appendix of the Council of Institutional Investors, Mr. Chief Justice.

Chief Justice Rehnquist: It's not in your brief?

Mr. Goldstein: No, Mr. Chief Justice.

Chief Justice Rehnquist: Whereabouts in the Constitution of Institutional Investors?

Mr. Goldstein: (A)(4) of the appendix to that brief.

Chief Justice Rehnquist: Thank you.

Mr. Goldstein: And I'll read it very briefly for the Court's benefit.

A class action shall not be dismissed or compromised without the approval of the court and notice of the proposed dismissal or compromise shall be given to all members of the class in such manner as the court directs.

Now, let me detour for just a moment.

The Court will notice it noticed in the Felzen case that this rule doesn't actually explicitly provide for objections.

The advisory committee notes make clear that that was the intent of this provision, and in fact amended Rule 23(e) which will go into effect next year explicitly provides for the right to state objections.

To return to Justice Ginsburg's question, what happens is that this rule recognizes that the class representative is not speaking on behalf of the objectors at the point an objection is taken.

They in fact litigate actively for the settlement.

Mr. Gold here is on behalf of the class representative in this case and goodness knows, he will argue that we have no right to take an appeal.

The rule, 23(e), provides an opportunity for us to come in, advise the district court of a problem with the settlement.

Our point is that nothing in these rules contemplates that the objector's role would be extinguished at the district court, that someone uniquely in the context of a class action, who is bound directly by the judgment and participates as of right in the district court, would only participate at the district court.

Chief Justice Rehnquist: But do you agree that you must intervene in the district court, or do you say you don't even do that?

Mr. Goldstein: Mr. Chief Justice, we say we do not have to do that, that there is nothing about this Court's precedents--

Justice Breyer: Why not?

That is, if this is open under the language, it seems to me there is no real difference between the parties as a practical matter, except you want to say the person all the time, no matter what, can bring an appeal, and they want to say what you should do is intervene and that gives the district judge a chance to act in an unusual situation as a kind of safeguard to make sure that it is fair.

I mean, this person could be anybody under the sun.

It could muck up the litigation for everybody else.

The extra time involved might be important, and it might be totally unfair, given the prior history, to allow this individual to bring the appeal.

So all they are saying is that the judge should have a chance as a gatekeeper to make that determination.

Now why not, if it's open under the language, say there is a little more conservative position, gives us a chance to not get things mixed up?

Mr. Goldstein: --Well, let me, there are two parts to the question.

The first is, is it open under the rules and second, why wouldn't it be a good idea to adopt it if it were?

As to the first, it is not open under the rules, and let me take you again to the particular rule in question.

That would be, it's suggested, rule 23(d)(2), and this rule says that the district court may in appropriate circumstances--

Chief Justice Rehnquist: Where are you reading, where are you reading from?

Mr. Goldstein: --I'm going to read from (a)(3) in the carryover to (a)(4) of the same appendix of the Council--

Chief Justice Rehnquist: And where are you starting on (a)(3)?

Mr. Goldstein: --At the bottom of the page D, orders and conduct of actions.

Your Honors, it says in the conduct of actions to which this rule applies, the court may make appropriate orders and then I'm going to jump to 2.

This is the suggestion of the other side: requiring for the protection of the members of a class or otherwise for fair conduct of the action that notice be given.

So there is a suggestion, where it follows, notice be given, and then there is a class that says... I'll just continue to read it: In such matters the court may direct to some or all members, of any step in the action or of the proposed extent of the judgment, or of... and this becomes critical... the opportunity of members to signify whether they consider the representation fair and adequate.

And then the clause: to intervene and present claims or defenses or otherwise come into the action.

Our point is as follows, or is several fold.

The first is that this is a different notice from the 23(e) notice.

This is a discretionary notice that courts can employ in some cases, and I think it deserves to be emphasized that in the 35 years since 1966, not a single court has read this provision in the way that's suggested by the other side, that it's mandatory that there be an intervention for a screening function.

The particular reason is that this (d)(2) notice refers to intervening to present claims or defenses, and that the not what an objector seeks to do.

An objector says there is a settlement on the table, I have a legal objection to it, it's either unlawful, as in Amchem, or it's unfair as in this case, and so it's a different kind of intervention.

So I don't think it's open and no court has ever suggested that it's how the rule should be interpreted.

Now, assume the Court disagrees with me, Justice Breyer, why isn't it a good idea?

It doesn't accomplish anything.

What happens is this.

You move to intervene, the intervention motion is denied, so you appeal that, so you haven't really gained anything.

What you have done is turn the objection into the application of the abuse of discretion standard.

You just added another layer on top of it because then the court of appeals has to decide well, did the judge get the intervention motion wrong?

If that was an abuse of discretion, then we'll reach the merits.

Chief Justice Rehnquist: What if the court grants your motion to intervene?

Mr. Goldstein: Mr. Chief Justice, then you haven't accomplished anything either.

All you have done is permitted an appeal that under our theory would be permitted anyway.

Justice Ginsburg: Could we, could we go back just one step.

You don't have to intervene to be an objector.

That's very clear, isn't it?

Mr. Goldstein: Yes.

Justice Ginsburg: And I thought that your basic argument was whatever your status is in the district court, that's what your status is on appeal.

If you can go into a district court, which is extraordinary, usually the district court doesn't let anybody come in without having intervened, but to object to a settlement, you don't have to do anything except say judge, I'm an objector.

You don't have to be an intervenor.

And I thought that your basic argument was whatever status you have in the district court, that you can come in and object, then you have that same status on appeal.

Mr. Goldstein: Yes.

I had taken an implicit premise to Justice Breyer's question that I'll come back to.

This case will illustrate your point, Justice Ginsburg.

In this case, we objected to the settlement.

We moved to intervene.

That intervention was denied.

It is perfectly clear that if that intervention is properly denied, and as to our attempt to come in and take discovery, disqualify class counsel, that's not within the question presented.

It's not here at the court.

We would not have that power as an objector.

As an objector, we have only the right to pursue our individual objections, which is the distinction I take it you are drawing.

Justice Breyer, I took the implicit premise of his question to be well, why don't we intervene for that limited purpose?

And that's I think what I took Justice Breyer to be getting at.

He is saying what's the big deal.

Can't the district judge maybe help us out in some cases where we might have a lot of different objectors and give you a limited intervention right.

That is akin to the rule that is applied by the Seventh Circuit, and that is preserved by the question presented within the petition.

Now, the Government adds a patina on top of that that Justice Breyer referred to, and that is don't merely have pro forma intervention, but allow the district judge to actually do something and screen out the people we don't want appealing.

So I came back to Justice Breyer and I said I don't think it will actually--

Justice Breyer: You have gained something.

I mean, normally the judge would grant it, but let's say he didn't.

It would be some pretty good reason.

Maybe it would be very unfair, etcetera and you say well, he will just appeal that.

That's true.

But it's quite a different matter as an appellate court to decide whether the judge abused his discretion there than to have to go through what could be 15 years' worth of litigation to figure out whether this settlement nor the circumstances is a fair one.

Mr. Goldstein: --Justice Breyer, let me draw a distinction.

My point is not that in an extraordinary case, that a district judge is faced with dozens upon dozens of objectors; the case has become completely unmanageable; this is an important settlement to implement immediately; that a district court couldn't in that case exercise discretion under the broad language of subsection 23(d).

My point is that in the mine run of class actions, in every case, we don't need to be doing this.

Chief Justice Rehnquist: Well, what discretion would the district court have if your theory is right, Mr. Goldstein, that an objector doesn't even have to intervene?

I mean, in a very complicated case the objector simply says I object, I'm not a party.

What can the district court judge do?

Mr. Goldstein: Well, I believe that under the language of the rule--

Chief Justice Rehnquist: Of what rule?

Mr. Goldstein: --Of subsection D, and let me return to the introductory clause, Mr. Chief Justice.

There is a, sort of the broad phrasing because we have all kinds of class actions.

Justice Ginsburg pointed out we don't have opt outs here but in D 3 cases we might.

Just in the broad phrasing in the conduct of actions to which the rule applies, the court may make appropriate orders.

And I think the court of appeals would be very sympathetic to a district judge faced with an extraordinary circumstance of lots of adverse objectors.

But I think--

Chief Justice Rehnquist: So you are saying that I am reaching out and bringing you into the case in spite of the fact you haven't moved to intervene?

Mr. Goldstein: --I apologize, Mr. Chief Justice.

No.

What I'm reacting to is Justice Breyer's suggestion that if there are actually a lot of objectors in the case, and it's become a mess, we have a district judge who says look, what in the world is going to happen with this case on appeal.

I'm going to try and help the court of appeals out.

My point is that I do believe that the district judge in that circumstance would have the discretion to say to the intervenors... excuse me, the objectors, say to the objectors, look, if you all are going to take an appeal, we are going to have to handle this here and try and create some organization.

Chief Justice Rehnquist: How does he give jurisdiction over people that are simply on the outside; they are not parties; all they are doing is objecting?

Mr. Goldstein: I apologize, Mr. Chief Justice.

They are parties.

This is a rule 23 class action under Sosna vs. Iowa.

At the point of class certification, they have come, they are both bound by the judgment and they have availed themselves of the court by appearing and making an objection.

Justice Souter: Okay.

Let's assume we agree with you.

What does the judge then do?

Does he say I'm going to let X and Y speak for the rest of you, and I will not hear separate objections from the others?

Mr. Goldstein: Well, no.

I think the judge clearly is going to hear objections from everyone.

The question is is the district judge going to exercise some gatekeeping determination about who goes up on appeal.

But Justice Souter, I could not agree more.

Justice Souter: How... how can... I'm lost.

How does he exercise gatekeeping on who appeals?

Mr. Goldstein: Justice Souter, that is our fundamental point, is that, let me just distinguish again with the Court whose position is what.

We don't agree with this suggestion.

It wasn't employed here.

We think it's entirely unnecessary.

I'm trying to achieve--

Justice Souter: No, but you are suggesting it as an alternative to Justice Breyer's suggestion that maybe to avoid chaos, you ought to have discretionary intervention, permissive intervention, and if you've got to avoid the chaos, then I assume the judge has got to be able in effect to limit what some parties objecting can do in favor of what other parties, letting other parties objecting speak.

Mr. Goldstein: --Justice Souter, I agree with you.

I don't know exactly how this is supposed to work.

It has never come up in 35 years since the rule was amended fundamentally in 1966.

So far as we can tell, neither a federal district judge for a state trial court decided that he or she was presented with such an extraordinary case.

I don't endorse this proposal--

Justice Ginsburg: Mr. Goldstein, I was very surprised to hear you say you agree with Justice Souter when he used the word permissive intervention.

I mean, even the Government agrees with you that if you must intervene, you would be an intervenor of right, not a mere "permissive", because you are bound by the judgment.

Mr. Goldstein: --Justice Ginsburg, I didn't focus on that word in Justice Souter's question.

Justice Souter: I retract my adjective.

Mr. Goldstein: And so that's quite right.

Now, let me just put on the table, Your Honors, the fact that we, here at the Supreme Court, the brief suggests oh, this will be so easy.

District judges will always allow these sorts of interventions.

This Court's opinion in Crown, Cork & Seal makes quite clear that isn't true.

This judge said look, here's what's happening.

And this is Chief Judge Motz in our case, said, I'm not going to let you intervene but if I'm wrong in rejecting your objections, you have got an appeal.

That's how it has worked in several circuits without any difficulty at all, with the court of appeals having been confronted with any need for the district judges to act as a gatekeeper.

And let me pick up, Justice Souter, if I might, on the specific problem that you identified and that is the district judge picking out one appellant versus another.

There is the grave difficulty that in one appellant goes up and the others are not permitted to intervene in appeal, what happens when that person dismisses their appeal?

This is an entirely untested rule.

Chief Justice Rehnquist: Under your theory, any objector can appeal, I take it.

Mr. Goldstein: Yes, Mr. Chief Justice.

Chief Justice Rehnquist: And no matter how complicated the case in the district court, they don't have to intervene.

You are going to have 15 or 20 appeals.

Mr. Goldstein: But it has never happened.

The courts... that there would be that many separate briefs, for example, or separate appeals.

Let me tell you how the courts of appeals deal with this problem.

They deal with it here like they do in all multiparty litigation.

They require consolidation.

For example, in the Second Circuit, there can only be one appellant's brief.

The people have to get together.

In addition, the Rules Advisory Committee has made a very specific point that I would like to draw to the Court's attention with respect to the amended rule 23(e) that will come into place in 2003, and the court says that once... and I apologize: The advisory committee note, Mr. Chief Justice, this isn't reproduced anywhere, because it's a new rule that will come into play next year.

But the advisory committee writes, once an objector appeals, control of the proceeding lies in the court of appeals.

The court of appeals may undertake review and approval of a settlement with the objector perhaps as part of the appeal settlement procedures or may remand to the district court to take advantage of the district court's familiarity with the action in the settlement.

There is a great deal of flexibility built into the process.

Justice Ginsburg: How, in the Second and Third Circuits has, has the procedure been you can object, everybody lets you object, but you can then appeal without having intervened?

Mr. Goldstein: In excess of several decades, Your Honor, and it stretches in the Ninth Circuit back to 1979, for example.

And so let me point to the Court the language that is quoted against us from another court of appeals is the Guthrie decision from the Eleventh Circuit, 1985, in which that court predicted that there would be administrative difficulties, Mr. Chief Justice, with a system that allowed objectors to appeal.

But it has been the rule in those other courts that Justice Ginsburg identified for several decades, and they have not complained a whit about this.

Justice Kennedy: Will your rule hold for certiorari petitions as well, so if, let's say, a named class member takes an appeal, but then the class petitions for certiorari, that any non-named class member can petition for certiorari?

Mr. Goldstein: No, Justice Kennedy.

This court's rule as I understand it is that you had to have been a party in the court of appeal, and so the failure to pursue your individual objection in the court of appeals would require, would mean that you drop out.

Justice Kennedy: Well, but your rule is that you are a party.

Mr. Goldstein: You are a party to the case, to the district court's judgment.

That's correct.

But this Court's cert proceedings turn on not whether you are a party in the district court but whether you are a party in the court of appeals, and I can--

Justice Kennedy: But under your philosophy you are a party to the court of appeals because you are bound by the judgment.

Mr. Goldstein: --No, Justice Kennedy.

Our point is this.

When you appeal as an objector, as opposed to the class representative, you appeal in your individual capacity to pursue your individual objections.

That is our position why the Fourth Circuit had it wrong in saying that we were going to take over the case, usurp the role of the class representative.

That's not correct.

We come into the court of appeals, Mr. Devlin does, on behalf of himself and when his, he is the only objector appellant that was in the court.

It is true that he represents an organization, but his individual objections are the only ones that are in the court of appeals.

Justice Souter: What you are saying then is not that he ceases to be a party, that the nonobjecting class member ceases to be a party in the court of appeals, but the nonobjecting class member has waived the right to be separately represented by himself, isn't it?

Mr. Goldstein: Yes.

Justice Souter: Yes.

Justice Ginsburg: And the objection, of course he couldn't petition for cert because all he can do, he can't question anything else in the case except his objections to the settlement.

That's all he can pursue.

Mr. Goldstein: That's right.

That's what rule 23 sets up.

It gives him a formal and important role in the process.

And it's important not to let go of the reason that exists, and that is that the Rules Advisory Committee notes that, and, understood that these objections are an important part of the process of identifying legal errors as in Amchem; deterring collusive settlements is another important role that they further.

Let me identify an additional difficulty and a reason why you should not have an intervention rule, and it applies, I'm trying to advise the court about rules that intersect its decision and rules that are going to come into place in 2003.

In 2003, assuming the rules as proposed to be amended are actually implemented, there is going to be a real problem with the Respondent's suggestion and opt-outs.

Right now, in a (b)(3) class action, we don't have the right to opt out, which I think is a point in our favor, as Justice Ginsburg noted, but in a (b)(3) class action you can opt out at the point of class certification.

Under the amended rule, there is going to be a second opt-out opportunity at the point of settlement.

Our concern is that if you tell an objector, your role in the case may be cut off, if the district judge makes a terrible legal error, and the district judge then is a screen and gets to decide whether or not you are going to get to appeal, all that person is going to do is get out of the case and go litigate on their own by opting out.

The one thing this Court I would hope doesn't want is to spread out all the parties.

The point really is to keep everybody within the individual judgment.

The premise of the Respondent's position, it seems to me, is fundamentally that we want a class action to be settled and over with, just the way a lawsuit of me against another person would be over.

With respect, I think that asks too much of rule 23.

We, this is a case involving hundreds upon hundreds upon hundreds of people, and it's not surprising that it can't just be settled by one person or another.

Justice Ginsburg: Well, what's wrong with the Government's position, which is you have the right to intervene for purposes of appeal?

Indeed you don't even have to file your motion to intervene until after the settlement has been entered as a judgment of the court.

Just to make it clear that you are not someone who isn't even a part of this class, isn't even legitimately part of this class, you are not just somebody that walked in off the street.

Why isn't that a problem?

Mr. Goldstein: Because the judge already knows that.

The only people contemplated by the Government's intervention proposal and screening function are those who have already stated objections at the fairness hearing, and we know who those people are.

If they weren't members of the class and they weren't proper appellants, we would argue no.

My point about all the different hypotheticals spun in a couple of pages in the government's brief where it discusses the screening function is that it doesn't actually add value and it does create collateral litigation.

There will be a motion to intervene; there will be mandatory disclosures; there will be the opposition to the motion to intervene; it will be litigated and then it will appeal.

I could see, if the courts of appeals were actually experiencing a problem, that the advisory committee would revisit this issue and would interpose the district judges as a screen, but that hasn't happened.

Justice Breyer: The advisory committee could solve this either way, couldn't they, the Rules Committee?

Mr. Goldstein: It actually could.

And it hasn't.

The amended rule the advisory committee notes, note the circuit split, and suggest--

Justice Breyer: Well, why hasn't it?

Why hasn't it decided this?

Mr. Goldstein: --I think there is one good reason and that is that the advisory committee goes through, in cycles, of course, it revisits particular rules.

Rule 23, rule 24.

Rule 23 we believe has no role to play, as Justice Souter suggested, in screening appellants.

That's the rules of appellate procedure and so it's not surprising in amended rule 23 that they didn't take this on.

If I could reserve the balance of my time.

Argument of Laurence E. Gold

Chief Justice Rehnquist: Very well, Mr. Goldstein.

Mr. Goldstein: Mr. Gold, we'll hear from you.

Mr. Gold: Mr. Chief Justice and may it please the Court: The well settled rule that we begin from and that the Petitioners accept is that only parties to a lawsuit or those that properly become parties may appeal an adverse judgment.

The basic point of the Petitioners, the point from which everything else springs, is that the unnamed class members are parties to a class action suit.

That premise is wrong.

In a rule 23 case, the only litigating persons before the court are the persons who initiate and prosecute the case as parties opposing the class, the persons who are served with process and defend the lawsuit as representative parties, and the persons who move to intervene and are granted intervention.

The very point of the class action is to provide for representative party suits where the class is so numerous that joinder of all the unnamed class members is impractical.

Justice Ginsburg: But couldn't any member of the class say judge, you looked like a representative.

I'm not adequately represented and at the point at which I'm not adequately represented, I have the right to come in and speak for myself.

And isn't that exactly what's going on here?

A representative of my class is fine, until the representative is together in a deal with the other side, and at that point, when I object to the deal, I'm not adequately represented.

Mr. Gold: The... to the extent that that is your point, and you move to intervene to replace the representative party, that's a motion that has to be dealt with.

The, the "fairness hearing" and the process of the district court--

Justice Ginsburg: Mr. Gold, may I go back to the statement, you said something, you moved to intervene.

If you have seen class actions in the Seventh Circuit and the Third Circuit, you can come in and object without intervening.

Mr. Gold: --But that wasn't--

Justice Ginsburg: And that, you come in and object and you say I object to the settlement.

This representative is not adequate to represent me to the extent of the settlement.

Mr. Gold: --Well, but you are not saying that the representative is not adequate to represent you for purposes of the settlement.

Your objection is that the settlement is not fair, proper and adequate.

Justice Ginsburg: Well, then let me put it in your terms, and I'm reading from page 30 of your brief.

Once a proposed settlement is reached, it is axiomatic that the named representative party who has negotiated the settlement does not adequately represent either the interests or the viewpoint of those class members opposed to the settlement.

You say it's axiomatic and I was just saying well, you said yourself it's axiomatic that they, the representative at that point does not adequately represent the class member who is opposed to the settlement.

Mr. Gold: In... in the sense, Your Honor, what we are saying is not that the class representative in fact has not properly and adequately represented the class.

It is that the individual can, has a proper argument for intervention on that theory.

It isn't that the, the individual in making objections is necessarily challenging the propriety and adequacy of representation.

Justice Stevens: But Mr. Gold, if he is challenging the representative's fee, I think he is, which often is what the minority member of the class objects to, the large fee that the class representatives, the lawyers get.

You can't say there is not a conflict there.

Mr. Gold: I'm not arguing that there is not a "difference of opinion" or conflict.

If--

Justice Stevens: Well, you are certainly not arguing that the lawyer adequately represents the person who is objecting to his fee either, are you?

Mr. Gold: --No.

I am not.

No.

But I am arguing that the making of objections, whether it is by a class member or the, a nonclass member who is interested and affected by the class action and the class action settlement, as was the case in Marino, by making an objection is not entering the case and litigating in the case.

That is, as a party.

That is the very point of the court's opinion in Marino vs. Ortiz.

Justice Ginsburg: That was somebody who was not a member of the class, right?

Mr. Gold: That is correct.

Justice Ginsburg: Here you are talking about members of the class and even in this case, people who are made to be members of the class even if they don't want to be because they can't opt out.

Mr. Gold: Well, they are the members of the class but they are not parties to the lawsuit.

That is the whole--

Justice Ginsburg: They don't want to be.

All they want to do is to say, as Justice Stevens suggests, you made the settlement deal and the lawyers are getting the lion's share of it and I want to object to that, why can't they say that?

Mr. Gold: --There is no argument here that you made a deal and the lawyers are getting the lion's share.

Here the lawyers were paid on--

Justice Ginsburg: But we're are not dealing with the merits of it.

We are dealing with first you have a right to come in and object, and you have agreed that you do have a right to come in and object.

Now, the question is, what more?

And what I took to be the principal difference between your position and the Government's is the Government is very clear that there is a right to intervene.

The objector would have a right to intervene for the limited purpose of pursuing the appeal.

You seem to hedge on it.

First you say it's axiomatic that there is a, no longer an identity of interest, but then I can't tell, and maybe you can tell me.

The Government says of course they have a right to intervene, but we want them to be orderly so they make a motion, which must be granted.

What is your view?

Mr. Gold: --I don't understand the Government to argue that the motion must be granted, and I'll--

Justice Ginsburg: Do you understand the Government to say it is intervention of right, not permissive intervention?

Mr. Gold: --It's intervention of, of right, but not automatic.

Intervention of right is not a, a motion that has to be granted without a showing.

Intervention of right is intervention of, to file, to participate in the litigation by doing something.

And it's our view that since we are talking about a status to take an appeal in a representative action, it's a motion to press a case into court, into the court of appeals and to litigate the case in the court of appeals as, for the class and unnecessarily on behalf of the class.

The point of appeal--

Justice Ginsburg: I'm sorry.

I'm sorry, Mr. Gold, I really don't understand what you are trying to convey because there are two kinds of intervention, intervention of right and permissive intervention.

Intervention of right if you meet the terms, and in this case it would be when you claim an interest, which is the subject matter of the action, and you're so situated that the disposition of the action may as a practical matter impaired your ability to protect your own interests.

So I give you one example is, well, this case.

I will lose... my pension is going to be, the COLA is going to be dead and gone, so I want to protect that interest, which the settlement takes away.

Isn't that, wouldn't that be, whether I have a good case on the merits is another question, but wouldn't I have a right to intervene?

Mr. Gold: --You would, you have a right to intervene, but your... what you are doing if you seek to intervene to take an appeal is to proceed on behalf of the class and to invalidate and have vacated the, the settlement agreement which is not an agreement which either cuts your COLA, the trust, having acted--

Justice Ginsburg: The, the Government as I understand it says yes you have a right to intervene and you have a right to appeal to the limited extent that you are contesting the settlement.

That's the Government's position.

And you are saying that's a wrong position.

Is that--

Mr. Gold: --No.

I am not saying that that is a wrong position.

I am saying that it is our view first of all that it is a right position.

And secondly, we would suggest that the, the standard for showing intervention is not simply that you are a class member, and that you have objections to the settlement, but also, a showing that you have colorable objections and that in, in pressing those objections, you are going to do so for and on behalf of the interests of the class.

Now, that's our view of the proper standard for the proper showing on behalf of the intervention.

We think that that standard is exactly the correct standard for maintaining the integrity of the class action.

Justice Stevens: --Mr. Gold, that's not the standard that applies to the right of a class member to participate in the district court proceeding, is it?

Mr. Gold: It isn't... it is; it would be the standard for a class member to intervene as--

Justice Stevens: To intervene.

I'm just asking to participate in the district court objecting to the settlement.

Don't he have an absolute right to do that?

Mr. Gold: --He has an absolute right to participate in the, in the fairness hearing.

But that is not a litigating right.

He is, objectors advise the court on their views of why the settlement is--

Justice Stevens: But he has that right, whether or not the district court may view his objections as colorable or frivolous.

Mr. Gold: --That is true, Your Honor.

But the making of objections is not coming into the action to litigate, but as if your objection is a motion, which the court passes on or not.

The court is considering a question posed by the litigating parties, whether the settlement agreement is fair and proper in order to be approved.

Objectors have the right to state their views for the court's consideration.

The courts also--

Justice Stevens: And to have the court rule on the objection.

Mr. Gold: --No.

Not to have the court rule on the objection.

Justice Stevens: Oh, you don't think that, they can file an objection, the court doesn't have to rule on?

Mr. Gold: No.

The court rules overall, having considered--

Justice Stevens: Even approving the settlement in the face of an objection is the ruling that the objection is without merit.

It seems to me.

I don't know.

Maybe you know something--

Mr. Gold: --No.

The objections can be of all shapes and sizes, Justice Stevens.

They can be that the settlement doesn't provide enough for the X or Y class and the judge doesn't say that that's precisely what the X or Y class ought to get, and I reject that as an objection.

The judge's role is, is the settlement fair, proper and adequate?

And the point is, our basic point is if a class member wishes to go further and take the case to another stage where he is litigating on behalf of the class, he ought to be an intervenor and a party, not simply someone who is not a party.

We think that that's proper, whatever the right standard on intervention is, and we believe that the standard I have articulated makes sense in the class action.

Justice Ginsburg: --You disagree with anything the government said in its brief about the objector has a right to intervene, he can do so even after judgment within the time allowed?

Mr. Gold: We think definitely that an objector or even a class member who hasn't participated in the objection process can intervene to take an appeal and to forward the objections made in the objection process by anyone, but we think that--

Justice Ginsburg: Then you are disagreeing with the Seventh Circuit.

Seventh Circuit, as I understand it, says you have a right to intervene, but you must exercise it when you know about the settlement, and it's too late after judgment.

So you are disagreeing with that?

Mr. Gold: --Well, the Government... neither, I don't believe the Seventh Circuit has passed on the, the propriety of intervention after judgment.

Our only point is--

Justice Ginsburg: It has.

It has.

It--

Mr. Gold: --that only parties can... no, they said that you can intervene after.

Justice Ginsburg: --No.

The Seventh Circuit has said; it has dismissed.

It said you have a right to be here, but you should have intervened when you knew that you were objecting to the settlement.

It's too late to do so after the judgment.

Mr. Gold: Well, the Government doesn't take that position.

We don't take that position.

Argument of Patricia A. Millett

Chief Justice Rehnquist: Thank you, Mr. Gold.

Ms. Millett, we'll hear from you.

Ms Millett: Mr. Chief Justice, and may it please the Court.

We agree with Petitioners that objectors who have expressed objections to settlement agreements have important interests and often should be allowed to appeal.

Our disagreement is on the mechanism by which someone gets to the court of appeals.

Justice Kennedy: Is that a purely formal disagreement, or are there some distinct practical advantages that you can tell us to your rule so that the district judge, I assume, can give some shape and direction to the appeal?

Is that the point?

Ms Millett: There is a practical significance to this process.

I think it's important to keep in mind that class actions can come in many forms and shapes and can involve up to, as this Court knows from the asbestos cases, tens of thousands of people, any one of whom can express an objection.

And it is actually incorrect and we disagree with the argument that you will know at the objection stage whether in fact that person even really is a member of the class action, who has a live claim that is covered by the class.

So what the intervention motion process allows is, we don't think a merits determination on the value of the objection, but we think it allows a district court in the first instance to make a record and address whether someone is a member of the class.

I mean, you could have a class action that's not as discrete as this one here, but the definition of the class is everyone employed by X corporation for a period of 10 years.

Justice Kennedy: Beyond the determination that they are members of the class, are there any further purposes served by the intervention rule you propose?

Ms Millett: Whether or not there is stale claim.

But it, you could have objections that really simply don't have any relevance to the issue that will be presented on appeal.

For example, in this case, I think as Mr. Gold said, objections come in many shapes and sizes.

And if I could refer the Court to Joint Appendix page 125, we have an objection that says please consider this letter my objection.

That's it.

It gives no elucidation to anyone on the basis for appeal. Now, how the court can deal with this, this deprives the district court of any opportunity to address this concern as a part of the settlement.

Chief Justice Rehnquist: You think under Petitioner's view that person would be able to appeal?

Ms Millett: That's my understanding of Petitioner's view, without having given the district court any opportunity, or the attorneys who are representing that person at that point, to address this concern is part of the fairness hearing.

Justice Souter: Well, what is the practical difference?

I mean, you take the position that intervention is of right, is that correct?

Ms Millett: Yes.

Justice Souter: All right.

Then the practical difference is that if they move to intervene, they simply have to come physically before the court, so the court can flush out the objection, as opposed to merely filing an objection saying I object in which case the court may not see them?

Is that the difference?

Ms Millett: They don't have to be there physically, in person, but there is motions practice in district courts, and a district court would decide whether or not they want someone there in person or not.

But intervention rights--

Justice Souter: Well, why cannot the same thing be accomplished by saying flush out your objection?

Ms Millett: --There is two answers to that.

First of all, intervention of right doesn't mean the district court doesn't have some final say.

But when we need to understand, objections are coming before a settlement has been approved, and it may well be even if this objection is very vague, I have got enough other objections that in fact would capture what that person is concerned about without them having told me.

And if they object... the objection process, the fairness hearing is very flexible and informal at this point and allows the district court to gather information and make a decision whether to approve the settlement agreement.

It would be very unworkable, and I think unwise to adopt a rule that turns the fairness hearing, which is supposed to focus on the settlement agreement and dealing with serious objections, I think that's what courts want to do, into a fairness hearing/qualifications for appeal, where I have got to spend all my time not just deciding whether I should approve this settlement agreement or not, so that you would even be aggrieved, but in advance I have to decide whether you are part of the class and someone who could--

Justice Ginsburg: Ms. Millett, I would be very impressed with the argument you are making now about having the thing run neat and tidy, but for two things.

Are you aware of any experience in the Second or Third Circuit that creates these, this pandemonium that you are now describing?

And second, when did the Government find out about the pandemonium?

Because in Felzen, as I recall, you took the position that the objector can come in, object to the settlement, and can appeal for the limited purpose of challenging the settlement without intervening.

What happened between Felzen and this case, and are you basing your prediction of pandemonium on any experience in the Second and Third Circuit that allowed objectors to appeal for years?

Ms Millett: --Concrete evidence of pandemonium, no, there is no concrete evidence that intervention is a difficult barrier in the five circuits that have required... in fact, the seven circuits that require this intervention motion.

So our position is based on analysis of the rules.

We have an established mechanism in the rules for dealing with deciding who will be a litigating party, not one of the 10,000 on the sideline, but a litigating party in a case.

Now at the time of Felzen, we didn't have as much experience with the limited intervention option for purposes of appeal.

And it seems that now when we focus on the--

Justice Ginsburg: When was Felzen?

How long ago was it?

Ms Millett: --It was... I'm sorry.

I don't know.

About seven years.

But in the intervening time, there have been some decisions from the Seventh Circuit that have propounded this notion, in particular, Seventh Circuit, that have propounded, and the Eighth Circuit, too, that have propounded this notion of limited intervention for purposes of appeal.

And I have to say we have also just reviewed and reconsidered our position, and looking at the text of the rules, we have an answer to this problem.

Chief Justice Rehnquist: Felzen was three years ago.

I was--

Ms Millett: I'm sorry.

But the point is that we have an answer, our position is that there is an answer in the rules to this problem and it's limited intervention for purposes of appeal.

And the alternative is to make up an ad hoc rule cut out of out of whole cloth.

That seems to collect a variety of factors that happen to have been present in this case--

Justice Ginsburg: --May I ask you, because your time is so limited, could you tell us what is the difference between your view of this case and Mr. Gold's view of this case?

Ms Millett: --I think, well, putting aside, we think there is more, we don't think that the objectors are parties but we are somewhat more sympathetic to the notion that they have the same interests as quasi parties, I think, than Mr. Gold is.

Secondly, and I don't want to put words in his mouth, but my understanding of their brief and argument here is that they would have some more rigid scrutiny of the intervention as a right motion, and in fact would require the person to demonstrate that they can represent the interests of the class.

Justice Stevens: May I ask you under your view of the requirement of an intervention for purposes of appeal, could the district judge in this case, in response to the intervention motion that was actually filed, have granted that relief?

Ms Millett: The intervention for purposes of appeal?

Justice Stevens: Yes.

Ms Millett: Could it have, I guess the district court would have had the power contingently to reserve judgment.

Because, remember that motion was made before the settlement was even distributed and notice was given, so it would have been odd to grant intervention for a settlement judgment that had not yet been entered and the judge hadn't heard objections or had a fairness hearing.

I mean district court can only say I'll reserve judgment and I will renew or revisit this question for limited purposes of appeal after I have judgment, if you are still interested, if your concerns are not addressed.

In this case, the intervention was, again, before the settlement was even distributed to members of the class, and it was joined with a motion that asked to strike class counsel for preliminary injunction.

And so I think, and it hasn't been contested that the district court was well within its discretion to deny.

Justice Ginsburg: But you could deny it in court.

You could say to the extent that they wanted to intervene to contest the settlement, fine, to the extent that they want to take discovery, it's not fine.

But to say that because they asked for too much they are not entitled to anything, is, I would think the Government would say the judge was right to say they can't engage in discovery.

The judge was right to say they are not entitled to an injunction.

But to say that they can't intervene--

Ms Millett: The district court never said that they can't intervene for purposes of appeal because they were never--

Justice Ginsburg: --It denied the motion to intervene, which had many parts.

Ms Millett: --Well, it just said to intervene.

The motion itself just says to intervene and then was accompanied with this, other motions asking--

Justice Ginsburg: So, should not the proper ruling have been yes, you can intervene, but only for this limited purpose, instead of saying motion denied?

Ms Millett: --Well, I think if this Court would adopt the rule and recognize that limited intervention for purposes of appeal is appropriate in this context, district courts will know that that's an option and be able to address it or raise it with attorneys.

But the important thing here is I think--

Justice Ginsburg: This district judge certainly thought that his wording on the objection, he twice said if you don't agree, appeal it.

And the "it" was his appeal of the settlement.

Ms Millett: --He said that.

He also twice told him that he wasn't a party to the case, as well.

I think... the point is, you may have thought he would ask, but our interest in this case is less the particular, we gave the court our best judgment of how the record--

Justice Ginsburg: Do you disagree with the Seventh Circuit, which would require the motion to intervene to be made prejudgment?

Ms Millett: --If that's how one reads... I assume you are talking about the Navigant opinion?

Justice Ginsburg: Yes.

Ms Millett: I think there is a prior opinion and I'm sorry, the name, escapes me from, which Judge Easterbrook also wrote, which we think adopted our position.

Rebuttal of Thomas C. Goldstein

Chief Justice Rehnquist: Thank you, Ms. Millett.

Ms Millett: Thank you.

Mr. Goldstein: Mr. Goldstein, you have five minutes remaining.

Thank you, Mr. Chief Justice.

If I could make four points, please, about the Government's proposal starting with its applications to this case, because Justice Stevens and Justice Ginsburg wanted to know whether we do here, assuming what happened in the district court, assuming we were going to adopt the Government's position, the Government does not press, so far as I understand, any further whether or not it's presented in this court.

We have the cert petition identifying the motion to intervene, the discussion of the Seventh Circuit's position.

The question is what we did in the district court.

The argument, as I understand it, the textual basis for the Government's rule is that under subsection (d)(2) of rule 23 you move to intervene, and the language of the rule is that the district court can condition your right to intervene.

And Justice Ginsburg, if you would adopt the Government's suggestion, I think that's what you would have to say was the appropriate result in this case, that the district judge should have seen our intervention motion and because he clearly did believe we had the right to take an appeal, he should have conditioned it.

So my principal point is that whatever the Court does in terms of its rule, we prevail.

Justice Scalia: Is that still before us, I mean, the denial of the intervention motion?

Chief Justice Rehnquist: I don't think that was properly raised.

Mr. Goldstein: Mr. Chief Justice, let me explain why I disagree.

There are, the cert petition, and I need to distinguish between intervention for all purposes and intervention for purposes of taking an appeal.

In the cert petition, the question presented flags the fact that we move to intervene and discusses at some length the Seventh Circuit's role which we are discussing here both in the petition and in the required brief, and to that extent it clearly--

Justice Kennedy: But that's not, I don't think a fair interpretation of the question that you have presented.

The question is whether you have standing to appeal.

Mr. Goldstein: --Justice Kennedy, the reason we used that formulation is because it's the formulation that the Fourth Circuit used.

It's just picked up from the court of--

Chief Justice Rehnquist: Well, we'll decide that another time.

Mr. Goldstein: --I understand.

The only other point, I would make, Mr. Chief Justice, about what's fairly included in the question presented is I ask the court to look at the question as the Government frames it, which it only could do if it believed our position was--

Chief Justice Rehnquist: Well, we take it the question you presented and your petition for certiorari, that's what we granted.

Mr. Goldstein: --Yes, Mr. Chief Justice.

Now, the second is, I'd like to address, Justice Ginsburg, with respect, I don't think that you got a comforting answer on the question of whether or not this has been a problem in the Second or Third circuits, i.e., is there a problem out there that requires the rules to be construed--

Justice Breyer: Why is it, has there been a problem the other way?

The seventh circuits that have gone the other way?

Mr. Goldstein: --But they don't, Justice Breyer.

Our point is that no circuit applies the Government's rule.

It's a little unfair to say that I can't identify a problem with their rule, since no court has ever adopted or even suggested it.

Now, it is a problem to the extent that there are circuits that require full party intervention.

That you have to come in, you have to be a litigant in order to take an appeal.

The problem is not an administrative one so much as that it cuts off appeals, appeals that are perfectly legitimate.

The rule as we understand it under this Court's precedents is not that only named parties can take an appeal.

That's why someone who sanctions can appeal and that's why it's uncontested that the denial of our motion to intervene gives us a right to appeal.

It is persons who are directly affected by the judgment, directly bound by something that the district court did, and then what they can do is they can appeal to the extent that the arguments that they properly presented to the district court.

Now, someday, will there be unusual class actions that require a further screen?

Perhaps.

Our point is that in an appropriate case a district court could employ the Government's suggestion, but why we would want to add the burden of this intervention requirement in every single class action in order to avoid the hypothetical possibility, that again has never been suggested by any court, State or Federal, so far as we or the Government have been able to identify.

The other point I would like to make, just to, although again we believe we prevail under the Government's suggestion, is to take you back to the text that's supposed to require this intervention, and I think a fair reading of the text is otherwise.

There are two different provisions for notice that we are talking about.

The one is the D provision that I quoted midway through the argument, and the other is E, which is the settlement notice.

The point to recognize is that under (d)(2), which talks about intervening to present claims or defenses, there is no intervention requirement when it comes to presenting objections.

And we are not intervening to present any claims or defenses.

There is just no textual hook here.

To the extent the Court did want to look at subsection D, with respect, we think it's the end of that clause that says intervene to present claims or defenses or otherwise to come into the case.

There is nothing in the text of the rule, there is nothing in the advisory committee notes that indicates that anyone contemplated the intervention to appeal.

Chief Justice Rehnquist: Thank you, Mr. Goldstein.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Ortiz v. Fibreboard Corp. - Oral Argument

Fri, 09 Jan 2009 14:50:13 +0000

Case:

Ortiz v. Fibreboard Corp.

Media File:

97-1704_19981208-argument.mp3

Related Transcript:

1998_97_1704_argument.xml

Transcript:

Argument of Laurence H. Tribe

Chief Justice Rehnquist: We'll hear argument first this morning in Number 97-1704, Esteban Ortiz v. The Fibreboard Corporation.

Mr. Tribe.

Mr. Tribe: Mr. Chief Justice, and may it please the Court:

The Fifth Circuit does not deny that this class is just as noncohesive and riven with conflict as the one in Amchem, and it even admits, in its words, that a class action... I'm reading from footnote 8 of the opinion... class action requesting individual damages for a global class of asbestos claimants would not satisfy the typicality requirements.

Now, since that is this case, the first mystery, I think, to be addressed is how the Fifth Circuit and the respondents imagine that they can get past Rule 23(a) here.

I think a fair version of their answer is that one should focus on how the settlements would operate and not on what the complaints sought, and if you do that, you're told you will see that the settlement in Amchem would have ended up, in their words, awarding damages to class members based on the severity of their injuries, while this settlement, according to them, just sets up an equitable distribution process that leaves intact each claimants, and I now quote them again, absolute right to exit into the tort system to litigate his claims in court.

Now, that answer is fallacious from top to bottom.

Amchem held, among other things, that one cannot rely entirely on the operation of the settlement to dissolve divisions that preclude class certification, and their description, both of the settlement in Amchem and of the settlement in this case, are flatly wrong.

The Amchem settlement, as this Court noted, did not preordain the amounts to be awarded to each claimant, just as this settlement doesn't, and this settlement certainly does not simply add a fund from which damages can be paid to plaintiffs.

It does not preserve the absolute right to exit, as I'll explain in just a moment.

It extinguishes individual rights to sue and substitutes access to a trust distribution process rather akin to Worker's Compensation.

The reason I say that it does not preserve a right to exit is that first of all no exit is possible till one has exhausted mediation, arbitration, and other ADR mechanisms, and even then the plaintiff who does exit remains subject to all of the settlement's strict limits, $ 1/2 million as a cap on compensatory damages, no punitive damages, no prejudgment interest, no post judgment interest, no joint and several liability.

And finally, anyone who does exit is penalized for exercising the right recognized I guess most recently in Wright v. Universal Maritime Service Corporation, right of going to court, penalized because payments can then be deferred for up to 10 years without interest as compared with 3 years if someone opts not to exit and remains within the trust system.

Now...

Justice Ginsburg: Mr. Tribe, I thought that the Fifth Circuit on remand said the big difference was that Amchem was certified under (b)(3), and this was a nonopt-out (b)(1)(B).

Mr. Tribe: Yes, Justice Ginsburg, they certainly did, and what I would like to show in a moment is that, if that's the difference, it cuts very much against class certification here.

It cuts against class certification partly because, as I'll try to show, it's impossible to squeeze this into that category of a mandatory class, but in any event, that can't solve the problems under (a), the problems of cohesion and of the absence of conflict.

And in particular, if you focus on the absence of conflict, what's crucial to note is that the equitable distribution process in this case embodies allocational decisions, decisions to limit damage payments from the trust.

Chief Justice Rehnquist: Well, Mr. Tribe, you talk about how badly these people are going to fare under the... but how well are they going to fare if they just keep fighting their individual lawsuits?

Mr. Tribe: Well, Mr. Chief Justice, I'm not talking about how good or bad in terms of ultimate fairness the settlement is, only the question of whether it was proper to certify it in the first instance.

Chief Justice Rehnquist: Well, but you pointed out that the people are left... even when they finally go to court it's a cap on damages and that sort of thing, but don't you have to compare that with what their fate would be if they simply keep suing Fiberboard and it ends up in bankruptcy?

Mr. Tribe: Well, Mr. Chief Justice, if we were talking about whether it's a good settlement, if that's the reason I was mentioning the caps, I guess we would.

I'm mentioning them only to make clear that as in Amchem this is not simply a favor that they are doing to the people who have been victimized by asbestos.

It is a substitution of their old rights with a set of equitable rights, and it's a substitution that makes some allocational decisions with respect to which there's a deep division, a conflict.

Those who are presently injured have, as in Amchem, an interest in maximizing payments early.

Those who are merely exposed have an interest in preserving money for the future, and there was no attempt to create subclasses here.

If subclasses with separate representation had been created, no one can really guess exactly how the ultimate settlement would look.

There's no reason to suppose that it couldn't have been done, and no reason, therefore, to suppose that the only alternative is an endless stream of individual lawsuits.

In fact, 99 percent of asbestos litigation settles in any event.

Justice Stevens: Mr. Tribe, would you help me out on one thing?

I couldn't tell from your brief whom you actually represent.

Who are your clients, and where do they fit in the whole picture?

Mr. Tribe: They are objectors...

Justice Breyer: And how many of them are there?

Mr. Tribe: They are individual objectors who were exposed to asbestos, and who do not want to be members of this class, and who were allowed...

Justice Stevens: They are all people who were exposed?

Mr. Tribe: Yes.

Justice Stevens: So they're not members of those who are not exposed...

Mr. Tribe: That's correct.

They were exposed, and they were allowed to intervene for purposes of expressing objection both to the nonopt-out nature of the class, and to the certification as a unitary class.

Justice O'Connor: How many of them are there?

Justice Stevens: How many intervened?

Mr. Tribe: I think there are five.

Justice Stevens: Five intervenors, and are they people who question the jurisdiction, also, or are they...

Mr. Tribe: Well, three of them do.

The ones that are not from Texas also under Shutts question personal jurisdiction.

Justice Stevens: Where are they from?

Mr. Tribe: I believe Alabama... I guess they're all from Alabama.

I thought one had been from Missouri.

The others are from Alabama.

Justice Kennedy: Mr. Tribe, you indicated that assuming there was adequate representation you thought that a class action might well be possible here.

Mr. Tribe: Well... no.

I think ultimately, because of the justiciability problems and the notice problems, it would have to be cut down to a manageable size.

Those who are merely exposed, some of whom don't even exist yet, who haven't been born, who are future spouses of people exposed, we think couldn't possibly be included in a class, but at least it's not inconceivable that a somewhat more modest effort could work, as long as there were subclasses so that subgroups with distinct interests were separately represented.

Justice Ginsburg: Under (b)(1)(B), then I'm confused, because I thought it was your position, no matter how fair the settlement, no matter how good it is for the greatest number, (b)(1)(B) simply is not available for a mass tort action which consolidates or, in your words, collectivizes many injured and potentially injured people.

I thought your position was that's not the office of (b)(1)(B).

Mr. Tribe: That's right.

Justice Ginsburg, we think that if this could have been certified at all, it would have been under (b)(3) with subclasses and with a more modest scope.

Maybe I should turn to why I think (b)(1)(B) is of really no help.

Justice Breyer: I want to ask you on the first question, you're basically saying that the lawyers shouldn't have represented their own existing clients and also the class of futures.

Mr. Tribe: That's separate, Justice Breyer.

There are two huge conflicts.

One is, as you say, that they represented their own 45,000, but they opted out en masse from this nonopt-out class.

The other is that within the class itself, the gerrymandered class, within that class they should not simultaneously have represented the presently injured and the merely exposed, and also the pre and post...

Justice Breyer: So in respect to both, I take it Judge Parker, who's a pretty experienced trial judge, looked at it and said, we have to act fairly quickly.

These lawyers are very experienced.

We have to get this particular group of lawyers or we won't be able to do the job, and I look at both sides of this and I make a balance here, and my balance is that they ought to go ahead with this.

Mr. Tribe: Well...

Justice Breyer: Now, what are we supposed to do?

Mr. Tribe: Justice Breyer...

Justice Breyer: Are we supposed to go and read the whole record in this and...

Mr. Tribe: I don't... I don't think...

Justice Breyer: say Judge Parker was wrong, or what?

Mr. Tribe: As a matter of law, I think he was wrong.

It's not that we're asking you to review some factual determination about how capable and ethical these lawyers are, but with respect to the idea that because there was so little time between August 9, 1993 and August 27, 18 days, that it therefore follows that, since subclassing might, in his view, throw a monkey wrench into a well-oiled machine, that therefore he had no choice, that's wrong as a matter of law.

For one thing, the relevant time is not August 1993.

It's 1990, when Fiberboard approached counsel to arrive at a global settlement.

That's when these various conflicts were...

Justice Breyer: My problem is, not having read your briefs on this and the other side, I don't see how I could make a judgment as to whether Judge Parker was right or wrong in his weighing of several factors to come to the conclusion that the representation was okay, without familiarizing myself in great depth with the details of this case.

Mr. Tribe: Well...

Justice Breyer: If you see an easier way... maybe I'm supposed to do that.

Mr. Tribe: I do.

I...

Justice Breyer: Yes.

Justice Scalia: Maybe I'm supposed...

Mr. Tribe: If one takes Amchem as binding precedent, then the fact that one might have regarded the whole thing as a much more nuanced balance is no longer on the table.

It seems to me that the principle of Amchem is that unconflicted representation as a matter of law can be judged de novo by this Court.

Chief Justice Rehnquist: Are you talking about representation in terms of attorneys, or in terms of class members?

Mr. Tribe: Both, primarily...

Chief Justice Rehnquist: The rule...

Mr. Tribe: We know that...

Chief Justice Rehnquist: Rule 23 says nothing about attorneys.

Mr. Tribe: Well, it... the focus on adequacy of representation has been interpreted by this Court to mean that not only must the class representatives meaningfully speak for the groups in question, but that the attorneys must have the ability meaningfully to represent them, since, as this Court knows, it's the attorneys that are making this deal.

Here, the class representatives were added as an afterthought, after the deal was structured.

Justice Ginsburg: Mr. Tribe, I would, because your time is running, like you to get to the point of...

Mr. Tribe: (b)(1)(B).

Justice Ginsburg: Yes, because...

Mr. Tribe: I'd love to.

Justice Ginsburg: if you can't certify under (b)(1)(B), all the rest of it is beside the point.

Mr. Tribe: It seems to me that the reason you can't certify under (b)(1)(B) is primarily that there is nothing in this case that remotely resembles a limited fund.

That is, a preexisting, finite asset or res that would be more than exhausted by competing claims.

The limit here of...

Justice O'Connor: Well, what if the corporate assets, the bulk of them were put into the mix, and there it is.

That's all there is, folks.

Mr. Tribe: Well, here...

Justice O'Connor: Could that not meet the rather loose language of (b)(1)(B)?

Mr. Tribe: Several points, Justice O'Connor.

First of all, in this case 2/10ths of 1 percent of the corporate assets were put in, not quite the whole thing.

Justice O'Connor: I know.

I'm just asking you whether you can envision a situation where substantially all the assets of the company are put into it and here it is.

That's all there is.

Mr. Tribe: Well, if it's in bankruptcy, and then you have a res...

Justice O'Connor: Not yet in bankruptcy.

No.

Mr. Tribe: Right.

Justice O'Connor: Maybe there's...

Mr. Tribe: Well, no court...

Justice O'Connor: the will that remains so that the company could somehow string it out and stay in business.

Mr. Tribe: Well, if there were not, as there is in this case, a potentially unlimited insurance fund, which I do want to turn to, and if, therefore, when we're in that category of cases where you can predict insolvency from a stream of liability judgments arising from a mass tort, then, if you look at the position that the author of the rule, Benjamin Kaplan, took, and we quote him in the brief, and the advisory committee, it appears... and no court has yet disagreed with this... that that is not the office of this rule.

That is, it is not the purpose of this rule to provide a kind of jump start on bankruptcy without all of the protections of bankruptcy for treating creditors equally.

Justice O'Connor: But the language of the rule doesn't seem to foreclose that notion.

Mr. Tribe: Well, the language in fact is broader than anything about a limited fund.

It talks about the question of whether separate adjudic... separate lawsuits would create a risk.

Justice Souter: Do you think that...

Mr. Tribe: But you can't squeeze that within this language, because in this case what creates the risk is the chance of a lawsuit involving insurers in California coming out the wrong way, not separate suits by individuals.

Given Parklane Hosiery, those suits are not a threat.

Justice Kennedy: Would you recognize the possibility that in personam rights could be determined under a (b)(1)(B) settlement?

Mr. Tribe: Well, I'm dubious.

It seems to me that unless... unless you have something which is already essentially reduced to equitable rights in an in rem situation, using (b)(1)(B) is already dubious, but the most important point I want to make about (b)(1)(B)...

Justice Kennedy: You could use it for beneficiaries of a trust fund, I take it.

Mr. Tribe: Yes.

But the most important point of (b)(1)(B) is the question of causality and the direction of timed error, basically.

Keep in mind how, in this case, when you put in some part of the assets of the corporation and put in also the money from the insurance companies, you get to this limit of $ 1.53 billion.

That limit did not come from some pre-existing exogenous variable.

The testimony in this case, when Mr. Inselbuch, for example, specifically asked counsel for the insurance company, Continental, whether there was any limit, the counsel responded, no, it is not... it is not a capped amount of money.

That's at page 281a of the joint appendix... and the ethics expert on their side, Professor Hazard, said that for practical purposes this amount is without limit.

The limit is the amount they were willing to pay in order to move class counsel from a (b)(3) class, which was their initial preference, with opt-outs, to a (b)(1)(B) class, and it would be the height of inversion and irony to say that an amount of money that grew in order for it to squeeze into (b)(1)(B) is now somehow limited.

Justice Ginsburg: Mr. Tribe, may I...

Mr. Tribe: That is, the limit has to come...

Justice Ginsburg: May I... do I understand correctly that your position on (b)(1)(B) is that you simply cannot have in any case where the stand-alone claim would be for tort damages, you cannot have a (b)(1)(B) action, maybe (b)(3), but are there any circumstances in which tortfeasors... a tortfeasor could gather together injured and potentially injured people whose stand-alone claims would be for tort damages and place them in a (b)(1)(B)?

Is there any such claim?

Mr. Tribe: Prior to bankruptcy or receivership I can think of no such case, because the rule that bothers them, first come, first served, is part and parcel of the legal right that these individuals claim when they want to sue.

Justice Kennedy: Suppose an insurance company paid the full amounts of its policy and say, we're paying the full amount in, we'll walk away, could that be subject to a (b)(1)(B)?

Mr. Tribe: I'm sorry, Justice Kennedy, I don't see how...

Justice Kennedy: The insurance company pays the full limits of the policy.

They say, we want out of this, and we paid into a fund, and subject to class action disposition under (b)(1)(B).

Mr. Tribe: Well, I can imagine a different kind of suit, the one that they would like to think this is, against the insurance companies in which one seeks...

Justice Kennedy: No, I'm just testing the limits of (b)(1)(B).

Could... suppose the insurance company pays the full limits.

That's all there is.

The money's there.

Mr. Tribe: But the insurance company isn't the defendant.

Justice Kennedy: But in my hypothetical that's all the money there is.

Mr. Tribe: And they're perhaps interpleaded?

Justice Kennedy: Yes.

Mr. Tribe: It still seems to me that making a (b)(1)(B) class out of is problematic.

Justice Kennedy: Because there are individual tort rights that are in personam, not in rem?

Mr. Tribe: That's right, and because of the Rules Enabling Act, which in effect says that you can't take one of these rules like (b)(1)(B) and use it to create a limit that was not independently there.

Justice Souter: We wouldn't have to go that far for you to win, though...

Mr. Tribe: No, that's right.

Justice Souter: I take it, in this case.

Mr. Tribe: That's right.

That is, in this case one needn't go that far, but I thought that Justice Ginsburg wanted to press the theory, and...

Justice Ginsburg: You pointed out that it's not against the insurance company.

Fibreboard is the defendant.

Well, suppose there should be a bankruptcy.

How do these claims play out in bankruptcy.

You said that there's legislation on... what would happen to these future claims that don't yet exist, or...

Mr. Tribe: Well, under the 1994 amendments to the bankruptcy law which codified a preexisting practice, a trust would be set up, and its details would be negotiated, and that trust would be used to distribute over time the remaining proceeds, whatever they were, among all creditor classes, including the asbestos plaintiffs for whom the amendments were particularly designed, and...

Justice Ginsburg: Is that like the Johns-Manville...

Mr. Tribe: Very much like that, and in particular the national commission which looked at all of this concluded that the protection in that context for plaintiffs who have been exposed but not yet injured is greater than what they imagined would exist in class actions.

Here, notice what happens when you allow the circumvention of the Federal bankruptcy procedure.

By telling Fibreboard that if it prefers not to put its assets on the line and go into bankruptcy, and can just put really pennies on the line, $ 1/2 million to get rid of billions of dollars of liability, it's not only that Fibreboard is getting away with a great deal.

It's also that all of the other creditors, real prop... people who were injured in real property terms with respect to asbestos, and trade creditors, none of them are crammed down in the way that this one group of victims is, and to allow that where the bankruptcy laws would be far more equitable as a kind of home-made version of bankruptcy...

Justice Breyer: Why equitable?

I mean, from that perspective you have... if you have thousands and thousands of people who are hurt, and the only apparent way to get those people compensated is to have a system where you get a fund so that it's equitably distributed across everyone who's hurt, rather than a few people running off with most of it, why do you have to force a company into bankruptcy in order to get that result?

Mr. Tribe: Well, for one thing it's not clear to me that you have to force them into bankruptcy.

Justice Breyer: Well, you're saying the only way that could happen is bankruptcy, but in fact, it wouldn't have to happen in bankruptcy if what we were going against was a trust, or what we were going against was a ship, and so why, if we can go against a ship and we can go against a trust and get this equitable result, why can't we go against this fund as long as it complies with the literal words of the rule?

Mr. Tribe: But it's not a fund.

The fund was created.

It's not as though you had a fund, and people are now fighting over it.

It would not comply with the literal words of the rule.

It turns it upside down to say that in the settlement you can create a fund.

It could have been $ 3 billion or $ 4 billion, but because the bargaining posture caps it at $ 1.5 billion, that is all that people can fight over.

In a situation of this sort, if I'm right that (b)(1)(B) is unavailable, (b)(3), with opt-outs, is an option if you have subclasses.

Justice Breyer: I agree with you that this is not your normal situation.

It's an unusual one.

I agree with you about that.

But is there some basic or fundamental principle of fairness or underlying law that this violates because of its unusual nature when it complies with the words?

Mr. Tribe: I think the fundamental principle that it violates is that the parties who are at the bargaining table ought not to be able, by mutual contrivance, to create a situation in which others who are not represented, some of whom are sick and others who will get sick, are simply told, fait accompli, because they weren't willing to put more money on the table you'll have to take a pro rata share as though you were a kind of equity stakeholder when the State law under which you claim gives you a legal right.

Justice Scalia: Mr. Tribe...

Justice Kennedy: Assume...

Justice Scalia: I thought the fundamental principle of fairness it violated was first come, first served.

Why do you accept that that's not fair?

That's the general rule we've always applied in the common law.

Mr. Tribe: Right.

Justice Scalia: Whoever sues first and gets his judgment first gets his money, and someone who sues later doesn't get money, and you accept that that is unfair?

Mr. Tribe: No.

I think it's a function of the State law, and I agree with you, under the way the States define these rights...

Justice Scalia: It's the way we've always done things, and unless these rules allow us to do it differently I don't know that we can...

Mr. Tribe: Right.

I think...

Justice Scalia: pronounce that that is unfair and can therefore be avoided.

Mr. Tribe: I think, though, without having some metatheory of fairness, one looks at the State law.

The State law defines that as part and parcel of the right.

One can't use these rules to simply transmogrify by some alchemy the content of these rights, and so I very much...

Justice Ginsburg: But there's one part of it that you seem to agree can be done, and I believe that Justice Breyer wrote an opinion in Metro North sometime ago that said that people who are merely exposed do not have a claim under the FELA, and cited in support of that the common law of many States.

Well, if that's right, then these future people who have been exposed but not yet afflicted in any way, simply don't have any claim yet.

Mr. Tribe: And maybe not even an Article III case or controversy yet.

Justice Ginsburg: But you didn't object, then... yes, well...

Mr. Tribe: We do maintain that, but the Court needn't reach that.

Justice Breyer: I thought they do have a claim under California law.

First they may have a claim that they could sue the insurance company directly because of their exposure...

Mr. Tribe: No...

Justice Breyer: and, second, they may have a claim because of their exposure alone under California law.

Mr. Tribe: Justice Breyer, under California law, and we point this out in our a footnote in our reply brief, they do not have the ability to bring the kind of imaginary suit that they're now talking about, because it is only those who are already injured under California law who can sue to establish status as third party beneficiaries of an insurance contract.

So what they're really asking, they're really, I think... when push comes to shove they're saying, well, this doesn't really, if you look at the formalities, look like a lawsuit that could fit (b)(1)(B) or that can comply with 23(a), but let's rewrite it.

Let's do what this Court didn't let the Sierra Club do when it came to hiking and biking.

Rewrite the complaint.

Imagine that we sued not Fibreboard, but the insurance companies.

Imagine that we claimed, not asbestos torts, but insurance coverage.

Imagine that this were a different kind of case.

Imagine that we have the right set of plaintiffs, including the 45,000 who would logically be included if that were the lawsuit.

If you can imagine all of that, including the inclusion of these nonripe claims that don't satisfy California law or Article III, then maybe we can prevail.

But it seems to me that that is not even remotely this case, and that to try to sort of transform this class action into a suit about insurance coverage, because that's the big disaster that they face, that the insurance coverage is gone.

Everyone recognizes there's a problem.

In effect, they accuse us of worrying about arranging the deck chairs on the Titanic.

They say that the ship is going to hit an iceberg, and you guys are playing around worrying about what they call trivial sideshows, special interests, like I guess the people who are very, very sick.

Well, the fact is, it's when you're about to hit an iceberg that you should worry about who gets access to the lifeboats, and the fact that you've got to have various safeguards to try to prevent a collision doesn't mean that you can forget safeguards for the separate subclasses of passengers that are affected.

I'd like to save the balance of my time.

Argument of Elihu Inselbuch

Chief Justice Rehnquist: Very well, Mr. Tribe.

Mr. Inselbuch, we'll hear from you.

Mr. Inselbuch: Mr. Chief Justice and may it please the Court:

No matter how he protests, this is not the Amchem case.

Though he says all of the facts are imaginary, they're not imaginary.

The principle issue, the one common issue that needed to be resolved here, was whether or not there would be any insurance proceeds at all.

Justice Ginsburg: I can understand, Mr. Inselbuch, Fibreboard being very concerned about having insurance coverage.

But I'd first like you to help me over my first part where, at least according to this Court's decision, there are many States that say people who are merely exposed, having suffered any physical, any affliction yet, simply do not have a claim.

Mr. Inselbuch: They certainly would have standing to find out whether or not there would be coverage if, but for their presence, the coverage issue would be decided without them.

That's the teaching of the Shapiro case in California.

Now, it would be ironic, I submit, that if the very trigger issue...

Justice Ginsburg: You mean if I say I may some day be ill and it may be caused by X, so I can sue X's insurer to say that if I should become ill I would be covered?

Mr. Inselbuch: I think that if you are a potential claimant against an insurance company and if there is an ongoing issue about whether or not there will be coverage and if but for that coverage there is no other alternative for your recovery, and if that issue is going to be decided in any event, with you or without you, it would turn standing on its head and it would turn due process on its head to say, you cannot come here and participate in that resolution.

Justice Ginsburg: Mr. Inselbuch, maybe... and I don't know of any case of that allows somebody who is not yet but may be and maybe not be to do what you say.

Justice Scalia: But even...

I think that the way we normally handle the problem... it is a problem... is simply to say you cannot affect the rights of such a person.

You're absolutely right, it would be terribly unfair.

But the normal way we've handled it is not to allow a person to come in when he hasn't been injured at all, you don't know he's ever going to be a claimant at all.

We've simply said such a person's rights cannot now be affected.

Mr. Inselbuch: But that's why you have Rule 23(b)(1)(B) when there is a risk as a practical matter that they will be or their interests will no longer be available to them to protect.

Think of the Duke Power case, where all you had at Duke Power was exposure to radiation, but you let people still challenge, challenge whether or not their rights to collect if they got sick later would be available.

Justice Ginsburg: Mr. Inselbuch, when you say that's why we have it, it's true that there are many people who today will take words and say, oh, this fits the words.

But if we go back to when Rule 23 was on the books and we go back to the '66 amendments, which is when all this came in, nobody had even the wildest dream that you could bring a mass tort action even under (b)(3), no less (b)(1).

And then Kaplan was very clear to calm the people who were worried.

He said, no, you can't use this statute that way.

This thing is, he said,.

o it wasn't what (b)(1)(B) was meant to be.

I think the best you can say is, well, maybe it wasn't meant to be that, but the words fit it.

Mr. Inselbuch: With all due respect, this is not a mass tort case.

It is a resolution of the issue of whether or not these people will ever get paid under one policy, with one set of facts and one body of law applicable equally to all of them.

And that's what the rule is there designed, because sooner or later that issue would be litigated by... either in the insurance case in part in California or by individual members of this class who would test whether or not there was coverage notwithstanding the claim by the insurance company that the assignment program Fibreboard entered into vitiated coverage.

Sooner or later.

Justice Ginsburg: I thought the insurance litigation was in California and this is... these are personal injury claims against Fibreboard in Texas.

Mr. Inselbuch: The class members all had claims, potential claims for personal injuries against Fibreboard.

Fibreboard and its insurance company were in a death struggle over whether there was coverage.

If there was no coverage, these class members would recover nothing at all.

Justice Ginsburg: Are these class members suing the insurance company?

Mr. Inselbuch: The class members' pleading was against Fibreboard.

Simultaneous with the filing of that pleading, the insurers intervened on the coverage issues, so that all the pleadings presented all of the issues.

My learned opponent...

Justice Ginsburg: I thought there were no coverage issues in Texas; the coverage issues were in California.

What was presented to the court in Texas was, this is what we're willing to do.

But there was no litigation over coverage in Texas, was there?

Mr. Inselbuch: There was pending litigation over coverage in the same district court between Fibreboard and a group of prior settled asbestos claimants and its insurance companies.

There were two cases pending that were testing both whether there was ability by Fibreboard to assign coverage and whether or not it could obtain coverage from one of the insurance companies and free another insurer from a claim over for equitable contribution.

But all of those coverage cases did not really plead yet, did not really bring the last issue before any court, which some class member would sooner or later bring when it brought a judgment, as Justice Scalia says, to the insurer, of whether or not the conduct engaged in by Fibreboard vitiated the coverage.

Sooner or later, sooner or later, one or another of these cases would have decided all of these insurance coverage issues, and if the class members weren't there they would have been at some risk that as a practical matter, as the rule says, the issues would be decided, they would not be able to protect their interests.

That's what this case is about.

This is not a mass tort case, this is not an end run around Amchem, and it has nothing to do with Amchem.

That's what this case is about.

Now, to get there...

Justice Ginsburg: If this case had been brought as a (b)(3) action, then it would have been out the window under Amchem.

Mr. Inselbuch: This case could not have been brought as a (b)(3) action.

There was a common issue that required a unitary resolution, the very reason why (b)(1)(A), (b)(2), (b)(1)(B), and (b)(2) came out of the common law, out of equity pleading.

Justice Ginsburg: So a defendant could always in this situation, facing massive tort liability, it's really a defendant's option to say: I want to get this cleaned up under (b)(1)(B), I don't want to give anybody an opportunity to opt out

Is there any mass toxic tort that could not be handled this way at the option of defendant and defendant's insurers?

Mr. Inselbuch: It has nothing to do with the defendant's desires or the insurer's desires.

It has to do with the position the class was in.

If you have a situation as unique as this is, where without coverage, there is no opportunity for coverage and there is a real...

Justice Ginsburg: But you must reconstruct it for me, because I thought that the driving force for this litigation was Fibreboard and its insurers, and not some preexisting... there were the plaintiffs who had what they called the inventory claims, but didn't this all get started, this idea of a global settlement... wasn't the global settlement the idea of the insurers and Fibreboard, and then we had the plaintiffs?

Mr. Inselbuch: Fibreboard was in litigation since 1979 over this insurance issue with its insurers.

Until approximately 1989 or 1990, that dispute didn't reach the radar screen of the plaintiffs because Fibreboard had other insurance and was paying its claims.

Once that issue reached the radar screen, the discussions began of how to get this matter resolved.

Justice Ginsburg: And of the live plaintiffs at that time, all of their claims were settled outside this.

Mr. Inselbuch: Plaintiffs' claims in asbestos are like an unrolling carpet.

At any moment in time some are filed, some are resolved, and some are yet to come.

It's an accident of history where you happen to be when you make a resolution.

In fact, when you got to August 27th of 1993, when this settlement was reached, the prior claims had already been settled as between Fibreboard and the insurer and the plaintiffs on the basis where they would be paid, they were paid 50 percent in advance, and they would get the rest if there was a coverage case success, if there was a bilateral resolution between Fibreboard and its insurers, or if there was a global like this.

That was gone.

But there is no artificial way you can talk about the past and the present and the future plaintiffs.

There is no fine line to divide that.

As Judge Higginbotham advised the counsel who were trying to negotiate this: Do the best you can

You're trying to resolve too difficult a problem.

Carve it up into pieces.

Settle the present ones first because they involve present people with existing lawyers in existing tort cases.

Justice Ginsburg: Suppose I'm an asbestos person who didn't file suit before the cutoff and I say: Well, I have a claim for tort damages against Fibreboard

I thought that the common law, the State tort law, gave me this claim.

Why don't I have it?

Mr. Inselbuch: The reason why the settlement was entered into was to resolve the insurance dispute.

No matter how many times Mr. Tribe will tell you that this is the Amchem case and no matter how many times I am asked about it...

Justice Ginsburg: I don't think that's answering my question.

I'm talking about...

Mr. Inselbuch: I beg your pardon.

Then I don't understand the question.

Justice Ginsburg: I have a plain... all these claims are in their essential nature personal injury damage claims.

They get... they become something else in the course of this global settlement.

So I am trying to understand how what is an ordinary garden variety tort claim in an individual's hand becomes this fair, equitable... and I'll accept that all this was a wonderful settlement.

How does that happen under the heading of a Federal rule, not even an act of Congress?

That's what I...

Mr. Inselbuch: Let me try it this way.

But for this settlement, but for any settlement here, each one of these class members as his case or her case unfolded would bring a tort case, a tort case for personal injuries against Fibreboard.

And if they were successful in that case, then they would be entitled under the theories presented to pursue the insurance litigation individually to see whether or not there would be any payment for the tort judgment that they received.

Now, yes, they would have a right to do that.

But sooner or later that insurance case would be decided one way or the other.

Now, if they were successful that would be fine.

Then there would be effectively, within the limits of the policy itself, coverage over the years for all of these tort victims.

But if it were decided against them and that decision ultimately were decided by the Supreme Court of California, the rest of these tort victims, while they might still have retained their entitlement to bring these individual tort cases in the system, would have had a futile act to bring.

Because there would have had no coverage, that interest they would have had in securing coverage in the insurance dispute would have been taken from them.

That would have been decided.

Their interest would be gone.

And that's what this case is about.

This case is about whether or not a class of people facing a common risk, a common interest in an insurance dispute, can bind together in order to assert their interests in the resolution of that dispute.

Justice O'Connor: But this is including people who are as yet unborn and people who have not yet been injured, as others have pointed out, and who may well not have been represented or represented adequately within the meaning of the rule.

And it also appears that the whole effort to create the class, the mandatory class, was an effort made by Fibreboard and the insurance companies rather than by the class itself.

It was Fibreboard that went out and got some lawyers together to bring them in and say: Gee, let's solve this problem

And maybe it's ultimately a good solution, but it's hard to shoehorn it in under Rule 23, isn't it?

Mr. Inselbuch: I think you've asked me several questions.

Justice Scalia: Yes.

Mr. Inselbuch: Let me try them one at a time.

First, yes, members of this class may yet be unborn, but if I am correct, if I am correct that there was a need to resolve a common issue on a unitary basis, that doesn't preclude the inclusion in the class and binding through the class action mechanism of futures.

This Court has on a number of occasions approved such certifications.

The Murray case in 1989, the class was all present and future Virginia death row inmates who cannot afford lawyers.

Well, some of those inmates haven't even committed their crimes yet.

Yet they were going to be included in the class and bound.

Justice Ginsburg: Was that a class for monetary relief?

Sure there's all kinds of injunction relief where the court says, defendant, you do this, and the defendant has to act the same way to everybody in the class, like the warden has to act the same way.

Those injunctive relief claims are a horse of an entirely different color.

Mr. Inselbuch: I submit that they come from the same evolution of the Bill of Peace.

And if you want to think of tort damage claims resolved unilaterally against the whole class, although it doesn't meet Justice O'Connor's point of unborns or futures, think of the Mullane case.

The Mullane case was a case, was a classic Bill of Peace, where a bank that ran common trust funds sought in one court to stay or stop or cut off any claims for negligence, fraud, waste, against all beneficiaries of these trusts based on the same set of facts and the same operative law.

In Mullane there were no opt-outs.

Justice Ginsburg: Mullane was a common trust fund.

It was a kind of an animal that all these small investors could come together.

Of necessity there had to be periodic accounting so the trustee could get a clean bill of health.

Mr. Inselbuch: Yes.

Justice Ginsburg: I think Justice Jackson made it perfectly plain that there was in that case kind of a jurisdiction by necessity, plus that most of these people were going to get at least mail notice, they all had the same kind of small little claims, and there would be a few that were left out.

But here most of the people who will be affected don't even know that they're going to be affected and may not yet be persons in being.

Mr. Inselbuch: Well, first of all, the issue in Mullane was not whether I have an interest in collecting a small amount from a common fund.

It was a test of whether or not the people who managed the fund had committed negligent torts.

Justice Ginsburg: Yes, and there had to be periodic accountings.

Mr. Inselbuch: Yes.

Justice Ginsburg: And if you didn't have periodic accountings, you couldn't have this.

Mr. Inselbuch: Right.

And if you don't have a decision under one insurance policy about whether there's coverage, you won't have any payment for any of these claims.

Now, how can that be any different?

Surely when there are common claims involved there has to be some nexus for there to be common claims.

Justice Stevens: Mr. Inselbuch, what is your response to the remainder of Justice O'Connor's question, particularly her asking you about the fact that the case was generated from the defense side rather than the plaintiff side?

Mr. Inselbuch: Well, I was there and I think, as the record reflects, surely Fibreboard had an interest in getting the case resolved.

The genesis of the discussions were here in Washington at the Dolly Madison House, as the record reflects, where were gathered plaintiffs' lawyers, defendants' lawyers, insurance company lawyers, to discuss what to do about asbestos litigation.

Those lawyers met together and out of that discussion the lawyers for Fibreboard picked up the phone and called some of the plaintiffs' lawyers that they had talked to at that meeting and said: Let's talk about this problem

Does it really matter who made the first phone call?

We struggled with this problem on behalf of the victims on the one side, Fibreboard's lawyers on the other side, the insurance companies' lawyers finally on the third side.

I'd like to respond to what I regard to be an unfair comment that Mr. Tribe has made about how the plaintiffs' lawyers were willing to go to a (b)(1)(B) class when there was more money on the table.

When we were negotiating with just Fibreboard, with just Fibreboard and before Amchem had been decided, what we contemplated was a settlement, a mass tort settlement on an assignment basis, with just Fibreboard.

Justice Scalia: Who is thenow, the insurers for Fibreboard?

Mr. Inselbuch: The plaintiffs, the plaintiffs... no, the plaintiffs and Fibreboard.

The two years of negotiations before the insurance companies came to the table were all premised on the notion that we would have a mass tort (b)(3) settlement assigning Fibreboard's interest in the policy from the insurance company.

The insurance company wasn't at the table.

There was no unitary issue to resolve.

We weren't resolving or discussing resolving the insurance issues.

But once the insurance company came to the table, as my colleague Mr. Kazan said, and brought their checkbook, yes.

Now we were there to resolve a unitary issue, whether or not there was coverage, whether we could settle that question.

Justice Scalia: But that wasn't the only issue in the case.

I mean, you describe the case as involving only that.

If it involved only that, it'd be, yes, a classic case for a class action.

But that's not the only issue that all of these claims involve.

It may have been the most crucial issue financially to your clients, but to say that each of these cases centers around that issue it seems to me is to misdescribe it.

Mr. Inselbuch: Well, getting paid seems to be the most important overriding issue to any plaintiff.

Justice Scalia: Sure it is.

But each plaintiff is going to have to make a separate showing about exposure and about the amount of injury, and to lump them all together in one class just because they're all interested in getting money from the insurance company seems to me to go beyond what the rule provides.

Mr. Inselbuch: The rule, the language of the rule, the text of the rule, talks about a common interest where you're going to put at risk as a practical matter the individuals' ability to protect their interests.

I submit, Justice Scalia, that the most important interest that these class members had was whether or not they would get paid.

Justice Scalia: That's not how the rule reads.

If the most important question is in common.

Mr. Inselbuch: It doesn't even... the rule doesn't even require that, you're quite correct.

It just says where there is a risk as a practical matter that the prosecution of separate actions will be dispositive of the interests of the class members or substantially impair or impede their ability to protect their interests.

That's what the rule says, and that certainly was the fact here, because if the litigation had continued and the insurance issues were decided then the remainder of the class members would not have been able to protect what had to have been their most important interest, their interest in getting paid.

Surely there were differences among, among their claims, and we did our best once we resolved the insurance issue in crafting a settlement that left each of the individual class members with the ability to resolve those on an individual basis.

Justice Breyer: Is there authority... if we think of a classic limited fund, not this case but say a trust which for some reason says it has allegedly engaged in some kind of securities fraud and generated hundreds of millions of dollars of claims and they only have 10 million left in the trust.

The claims differ a little bit among different plaintiffs.

Or a ship sinks or has toxic fumes and tens of thousands of different plaintiffs, or thousands from different States.

They have somewhat similar, somewhat different claims, but a classic limited fund.

Is there authority that you can proceed under this rule and cut off claims by those plaintiffs, say, all your claims, even though you're from different States and even though some of you don't know yet that you'll actually suffer injury, still in the classic limited fund you must be...

Mr. Inselbuch: Yes.

Yes, the Manville case for example, in the Second Circuit.

You wouldn't be cutting off the claims.

Justice Breyer: No, no.

Mr. Inselbuch: You would require that they all take an equal hair cut.

Justice Breyer: In other words, you can compel a person who's from California to come to New York and assert his claim in this single proceeding against a single trust, even though he may just be an exposure person or he may just have a slightly different claim?

Mr. Inselbuch: I think where you have a true limited fund you have in rem jurisdiction and you have a res to deal with, I don't think these issues would arise.

I think... but this is... of course, we don't argue that this is a limited fund.

We argue that we are quite within the rule because of the risk of the individual litigations or the risk that they would bring to bear to the rest of the class.

Justice Breyer: So your exact response to the claim, since this isn't quite the same thing, that in bringing the person from California and saying you have to assert the claim, let's say, in New York and that you overcome the due process objection and the fact that that person doesn't want to bring her claim yet, you overcome it by...

Mr. Inselbuch: Well, the history of the Bill of Peace, of the representative lawsuits that grew out of the Bill of Peace, was that you have to balance, that the courts have to balance different interests.

Certainly at common law and in the jurisprudence of this country, there is an interest that only those before the court and properly before the court, where the court has jurisdiction over them, can be bound by the decree of the court.

But what we learned in the eighteenth century and what Justice Story reports in his treatise and what Professor Chaffee recounts is that where there was the fact that either through numerocity or because people were not subject to the jurisdiction of the court, you couldn't bring all the parties before the court, but yet if you didn't resolve the issue you would create difficulties or burdens or problems or penalties or unfairness, then in a proper case where a court would balance those issues, then you would have a class action or what they called a Bill of Peace or a common action or whatever the names were for it then, and in fact if you had adequate representatives they would bind all of the members of the class irrespective of where they were.

Justice Ginsburg: Mr. Inselbuch, Chaffee, who you quote, said:

"It is a cardinal principle of such class suits that the omitted members must be interested in the subject matter of the controversy in the same way as their representatives. "

"If the unjoined persons have special claims or liabilities, their rights are personal and cannot be concluded in their absence. "

So I'm still left with the question of how a personal right without one's consent, no matter how good a deal it may be, gets taken away.

Mr. Inselbuch: It's not a question of how good the deal is.

It's a question of whether or not... which is the dog and which is the tail.

The dog here was the issue of whether or not there was insurance coverage.

Now, in any... even in the common fund case, the individual shares may differ or the rights to individual shares might differ.

But the need to create the haircut in the common fund case for every claimant is needed.

Here there was a need to resolve whether or not there would be any money for these people, and they were all interested in having that resolved.

Justice Ginsburg: As far as the insurance, do I understand the fact background that the Fibreboard had won in the first instance in California, it was on appeal when they decided that they would settle it, Fibreboard and the insurance company... companies...

Mr. Inselbuch: No, they did not.

They did not settle it.

It was only when the class stepped and there was a three-way settlement that any settlement ever eventuated, this settlement.

There was never a settlement first between Fibreboard and its insurers.

Justice Ginsburg: No, that's not what I meant to say.

I meant to say, wasn't it Fibreboard had won against its insurer that case without any plaintiffs in it, injured, was going to the Court of Appeals.

It got stayed when Fibreboard, the insurers, and I don't know who...

Mr. Inselbuch: The class.

Justice Ginsburg: sat down at the Dolly Madison, right?

Mr. Inselbuch: No.

That litigation wasn't stayed as with respect to the Fibreboard issues until this settlement was reached and was spread on the record in the district court in Texas, at which point the parties wrote to the court in California.

Justice Ginsburg: Do I understand that with the other insurers who were in the same, that Fibreboard... that most of the rulings, final rulings, were in favor of Fibreboard in the insurance litigation?

Mr. Inselbuch: Ultimately, the decisions on trigger and scope, which we were terrified would be reversed by the Supreme Court of California, were affirmed by the California appellate court.

Justice Ginsburg: So if everything had played out with the insurance company, then Fibreboard would have had its coverage against the insurers?

Mr. Inselbuch: No, not necessarily, because there was still a very important question that the insurance companies raise about whether Fibreboard's practice of settling cases with plaintiffs, billions of dollars worth of settlements with plaintiffs, on an assignment basis under the policy was in breach of the policy, which an intermediate court in California, incidentally, after the settlement was reached, held that it was.

What were the consequences of that?

The insurer would argue next that vitiated the very coverage that the Court of Appeals approved.

And those issues were yet to be litigated and were percolating along, and if all of these insurance issues had not been resolved in this unitary way sooner or later they would have been resolved in one case or another on a litigated basis.

An that litigated basis, as the testimony showed in the district court, put these people at an enormous risk that it would be resolved against them in some substantive way and the result then would have been that, yes, they would have had their individual tort claims, but they never would have been able to recover any damages.

In my remaining minutes, let me talk just a bit about the common law, because Professor Tribe suggests that under the old cases you had to have an in rem, a res of some kind, and that is not what those cases stand for.

If you go back and look at cases like Lee against Thomas in 1751, Chancey against May in 1722, where there was a Bill of Peace, a representative Bill of Peace to recover for embezzlement damages, the Adair case, whether a rent charge on the profits would bear an assessment or would not bear an assessment, these were not cases where the litigants were seeking an interest in a res or in a common property.

What developed in equity was not just related to equitable claims, but people came to the court in equity and said: We have all of these cases, some of them may be at law, some of them may be in equity, but we don't need to proliferate all of these cases

We're being buried by them.

Let's resolve them all in one place.

The Bill of Peace started not on a representative basis, but to bind all the members of the so-called, according to Professor Chaffee, the multitude.

Justice Souter: Well, in order to do that in the eighteenth century cases was there any finding necessary that in effect the fund that was created was the best possible deal?

Was there a kind of fairness hearing, if you will?

Mr. Inselbuch: In our case?

Justice Souter: No, no.

In the eighteenth century cases that you're relying on.

In other words, I am guessing that those cases did not proceed on the premise that the individuals who wanted peace could simply come up with any figure and say, let's settle, as it were, everything on this figure and bind everybody else.

I presume, I'm guessing, and I want to know if my guess is right, that there was some kind of a finding that the fund created, the settlement amount, if you will, was the best deal for the global class.

Justice Breyer: Is that so?

Mr. Inselbuch: In the older cases...

Justice Scalia: Yes.

Mr. Inselbuch: that I've read, I don't see descriptions of settlements.

They're litigated solutions and reported in the law books.

I have not... I don't recall anyone that discusses a settlement.

Rebuttal of Laurence H. Tribe

Chief Justice Rehnquist: Thank you, Mr. Inselbuch.

Mr. Tribe, you have five minutes remaining.

Mr. Tribe: Thank you, Mr. Chief Justice.

When Mr. Inselbuch says that they do not argue that this is a limited fund, I understand that's now their position.

But just to get the history straight, throughout the history of this case and in the Fifth Circuit that was apparently the theory on which (b)(1)(B) was applicable.

I do want to say a word about bills of peace because I think that has caused some confusion here.

They did not bind absent class members.

We discussed that in footnote 20 of our reply brief.

They were really like permissive joinders and they don't provide any precedent for what's happening here.

I think if you ask what is happening here, it's most dramatically put in a question that I think both in one way or another Justice Ginsburg and Justice O'Connor were asking, and that is just take the ordinary garden variety tort claim by somebody who in fact has been injured, not just exposed but is experiencing injury, who didn't happen to file by the magic turn into a pumpkin date of August 27, 1993.

By what alchemy is it, by what edict of Congress, or by what inherent judicial authority without Congress, is it that that ordinary claim gets transmuted into not a first come, first served right to be paid, but some intangible chunk of a fund whose limits are established from the defense side.

I mean, I don't think there has really been an answer to that question.

This is not, after all, a case where, for example, the insurance policies have relevant ceilings on coverage.

Here the aggregate is unlimited, which is why there was no limit to the fund.

But if there were a ceiling on coverage of the relevant policy, I can imagine that creating a preexisting limited fund, so that under (b)(1)(B) you might have direct claims against the insurance company, but it wouldn't discharge the defendant.

Justice Scalia: Well, you still wouldn't know how much money the company is going to have, would you?

Mr. Tribe: No.

Justice Scalia: Unless and until the company is bankrupt and goes out of business, you have no idea how much money the company's going to have when these later suits are brought.

Justice Stevens: That's right.

Mr. Tribe: It may discover a gold mine or something.

Justice Scalia: And certainly the company would not be discharged.

Justice Stevens: But didn't they hire an expert in this case to figure out how much money was available from the company?

Mr. Tribe: I'm sorry?

Justice Stevens: Didn't they hire an expert in this case to make the very calculation that Justice Scalia says could not have been made?

Mr. Tribe: But they may not have been right.

They were bought for over half a billion dollars by OCS.

Justice Scalia: But they were calculating what the company was worth today.

But some of these cases were going to come up years from now, people who are not yet even born.

You have know idea how much, how rich the company was going to be at that point.

Mr. Tribe: The crystal ball is clouded.

Justice Stevens: But do you really challenge the fact that they would have gone bankrupt if this whole thing had fallen apart?

Mr. Tribe: If there had been no insurance money available, I think that it would be unrealistic of me to say they wouldn't have gone into Chapter 11.

I think they would have gone.

Justice Breyer: But suppose it was limited.

Suppose all those objections are gone.

Suppose we knew for sure it's absolutely limited.

Are you still saying still you couldn't settle, still you couldn't do it, because there's a woman in Massachusetts or California or someplace whose personal claim would be determined by this settlement, who doesn't want to join?

Mr. Tribe: Well, still you couldn't do a mandatory class that resolves it against the company, as opposed to a specific...

Justice Breyer: No, no.

I'm just taking you back where you just were a second ago in your argument.

You kept saying but it's unlimited, you know.

Suppose it was limited.

I'm thinking of the...

Mr. Tribe: Suppose the insurance had an aggregate limit...

Justice Breyer: Yes, suppose...

Mr. Tribe: of $ 10 million.

Justice Breyer: Whatever it is, total no more than.

Mr. Tribe: You still would have to... you could not in my view...

Justice Breyer: So your argument basically is that you can't bring any of these classes period if there's one person who objects?

Mr. Tribe: Well, but that overstates it.

You can't bring a (b)(1)(B) class when normal legal rights are at stake.

And I don't think that the Respondents are really disagreeing.

If you listen to what Mr. Inselbuch says, he says that this case is unique, which I doubt because there are others around the country waiting in the wings, I know about a number of them, to see if this limited fund theory will fly.

What makes it, he says, unique is that it had to be done.

There was a death struggle over insurance.

It had to be done this way in order to resolve insurance coverage.

That is demonstrably false.

What he has simply forgotten about, I guess, is the trilateral agreement which was negotiated between the two insurers and Fibreboard, putting $ 3.35 billion on the table, and it's there right now without taking any rights away from any of the plaintiffs.

Justice Breyer: What I'm driving at, though, is taking those special features out of it, is your argument that if we have an insurance fund that's absolutely limited, no trilateral agreement, but we're trying to set up a process to bring in everyone who has similar claims, if there is even one person from a different state who objects it's no good?

Mr. Tribe: Well, you have to go from the Dolly Madison to Congress to get a solution to that one, it seems to me.

Chief Justice Rehnquist: Thank you, Mr. Tribe.

The case is submitted.

Attribution:

The Oyez Project

Featured:

Kumho Tire Co. Ltd. v. Carmichael - Oral Argument

Fri, 09 Jan 2009 14:50:10 +0000

Case:

Kumho Tire Co. Ltd. v. Carmichael

Media File:

97-1709_19981207-argument.mp3

Related Transcript:

1998_97_1709_argument.xml

Transcript:

Argument of Joseph P. H. Babington

Chief Justice Rehnquist: We'll hear argument first this morning in Number 97-1709, the Kumho Tire Company v. Patrick Carmichael.

Mr. Babington.

Mr. Babington: Mr. Chief Justice, and may it please the Court:

We are here today because the circuit court unduly restricted the district court's evaluation of the reliability of certain expert testimony offered by respondents.

The Eleventh Circuit barred the district court from considering the reliability factors set forth in this Court's decision in Daubert v. Merrell Dow.

If permitted to stand, the Eleventh Circuit's decision would allow experts to escape scrutiny under the reliability factors merely by invoking experience in some broad sense as a basis for testimony.

Justice Kennedy: At some point during your argument... I just am troubled by this, and wish you would address it.

It sounded to me as if your expert, the defense expert, used just about the same methodology as the plaintiff's expert.

He talked about over-deflected operation because of severe beading, groove compressions, the discoloration on the side, and I don't know if it's waiver, or estoppel, or stipulation, but it seems to me that this is what your expert was talking about, too, and I'm troubled by it.

Just during the course of your argument, if you could mention that.

Mr. Babington: Justice Kennedy, we disagree with that interpretation of the record.

First, the... it it is clear that the petitioners' expert physically examined the tire before he issued his report.

The respondents' expert, by contrast, issued his report containing his conclusion before conducting any physical examination of the tire.

In addition, there was a completely different methodology that was used, and that's what troubled, most troubled the district court.

The methodology used by the respondents' expert was a process of elimination, rule of thumb methodology that we pointed out in our briefs, and by contrast, our expert used a methodology that asked very broadly, what are the causes, why did this tire come out of service, and in asking that looked at all of the evidence and did not limit his consideration of the evidence just to eliminating certain factors of abuse.

Justice Kennedy: The principal attack in the briefs, as I understood it, on the plaintiff's expert was that he had these four factors.

Now, I recognize that he said, if there are four and any two are present, then I'll make one conclusion, and you may argue about that, but so far as the factors that he uses, i.e., the discoloration, the beading, et cetera, they were the same, were they not, as your own expert?

Mr. Babington: They looked for the same evidence on the tire in some respects.

The respondents' expert, of course, limited his consideration, did not look for particularly affirmative evidence of defect.

But the major difference was the way that they... the method that they applied to get from what they saw on the tire to their ultimate conclusion in the case, and our point is that a district court, in evaluating the reliability of expert testimony offered by parties before a court should not be prohibited from considering the logical, common sense questions that flow out of this Court's Daubert factors, broadly understood.

The lower courts have applied and understood the Daubert factors in a flexible, broad manner, as this Court intended.

Justice O'Connor: Well now, let me ask you something.

The Eleventh Circuit apparently reviewed the decision of the trial court to apply the Daubert standard de novo.

The Eleventh Circuit looked at that de novo, said it was a question of law and it would look at it de novo, but I think acknowledged that the ultimate decision of the district court whether to exclude the evidence should be reviewed on an abuse of discretion standard.

Now, I'm a little confused.

What is the standard we should apply to this question that you present us with here?

Do we look at it de novo, or do we look at it under an abuse of discretion standard?

Mr. Babington: The standard of review of the Eleventh Circuit's holdings that were the basis for its decision should be reviewed de novo.

The Eleventh Circuit made two errors of law.

First, it crafted this experience exception that I was discussing, which is that if an expert invokes experience...

Justice O'Connor: Well, let me back up, then.

What standard of review should the Eleventh Circuit have applied, abuse of discretion, or some de novo review, or a combination of the two?

Mr. Babington: Well, I think it would be a combination.

Certainly as to the standard that should be applied, that's a question of law.

Our point is that the Eleventh Circuit erred in how it interpreted this Court's Daubert decision.

In footnote 8 in Daubert, this Court said, our discussion is limited to the scientific context, because that was what was before the Court.

Justice O'Connor: Well, certainly Daubert itself indicated that it was dealing there with some kind of scientific evidence, and it didn't purport to establish some global principles of the four factors in every case, did it?

Mr. Babington: Well, the... what we contend the Court did in Daubert was to set forth general, broad, common sense criteria that courts can use to determine the reliability of a broad range of expert testimony.

Justice O'Connor: Well, there's a lot of discussion about whether we should look to a standard that directs the trial judge's attention to indicia of reliability in the field at issue.

I mean, what is it regarding this issue in the field that is recognized as legitimate for an inquiry?

Now, is there anything in this record to show that the district court made any findings on the indicia of reliability that prevail in the tire manufacturing field?

Mr. Babington: Yes.

If you look at the district court's opinion on reconsideration, I think it's specifically discussed in the joint appendix at pages 91 and 92.

The district court considered the respondents' argument that the respondents' expert did the same thing as the petitioners' expert, and that there was evidence in the record that supported the view that what the respondents' expert did was commonly accepted.

Everyone did it this way.

And the district court specifically rejected that, saying that the evidence before the court did not establish that.

At most, all it established was that the two experts used the same method of... or technique of gathering data, and that's really not that surprising.

You should look first to the product in question to gather your data.

What most troubled the district court was the methodology, how the experts got from the information on which they were basing their opinion to their ultimate conclusion, and as this Court pointed out in Joiner, the ipse dixit of the expert is insufficient to support the ultimate conclusion.

There must be some objective validation or criteria that the district court can look to.

How does the district court otherwise know that the expert's not just making it up, and that's really the point of our argument, that the district court, in answering that central question, should be allowed to ask the logical, common sense questions that flow out of this Court's Daubert criteria.

Justice O'Connor: Well, does the record show the district court looked at anything other than the four Daubert factors?

Mr. Babington: Absolutely.

What the district court did was consider the fact, the logical flaws in the respondents' expert's approach.

For example, that even though he had a methodology, he didn't even apply the methodology in this case.

Instead of physically examining the tire first, he looked at photographs of the tire, and he admitted that he didn't know whether his past analyses of failed tires had ever been correct.

Justice Ginsburg: Mr. Babington, there's circulating now a proposed revision of Rule 702, and that is set forth in the appendix to the respondents' brief.

It says there are three things to look at, 1) the reliability of the facts, the reliability of the principles and method, and finally the reliability of the application.

Would you think that that's an adequate statement?

You tell us that the Eleventh Circuit is no good because they removed all of the standards.

Daubert, on the other hand, has these four factors, and the district court did organize its decision under those.

But suppose we had, instead... suppose the district court or the Eleventh Circuit had said, Daubert is too rigid, we like these standards, would that be acceptable?

Mr. Babington: Well, we think that the proposed rule merely is an attempt to put down more clearly the existing law, is what I understand that the advisory committee is attempting to do.

It is a mere proposal.

It hasn't been acted on yet.

But that standard is an effort by the advisory committee to put down in the rules what the lower courts have thought about how they should assess reliability of expert testimony following this Court's landmark Daubert decision, and under the new rule, or under the... so to answer your question, the answer really wouldn't be any different.

The Daubert criteria, broadly understood and flexibly applied, lead to exactly the type of questions that the district court asked of this expert to determine if his testimony was more than just his say-so, more than just guesswork or speculation.

Chief Justice Rehnquist: What you are saying, Mr. Babington, I take it, is that the Daubert opinion dealt with kind of scientific peer review type of evidence, but that the gatekeeper function extends beyond that to anything covered by Rule 702 when it's dealing with expert evidence.

Mr. Babington: That's correct, Mr. Chief Justice.

We are saying that it's clear that the gatekeeper function applies to any expert offered under Rule 702.

The respondents agree with that.

The Solicitor General agrees with that.

I don't think any of the amici seriously question that.

That's very clear.

Justice Scalia: Well, you're contending more than that.

You're contending, as well, that the Daubert factors can be applied to any expert testimony.

Mr. Babington: What we're...

Justice Scalia: Are broadly applicable to any expert testimony, not exclusive, but broadly applicable.

Mr. Babington: That's correct, Justice Scalia.

What we are saying is that the gatekeeper function definitely applies to all experts, and then in how the judge exercises his gatekeeper function to determine whether there is a reliable foundation for the expert testimony that's been proffered involves his asking of questions such as those that logically flow out of the Daubert factors.

Chief Justice Rehnquist: Not all.

Justice Breyer: Not all would do that.

I mean, wouldn't it depend on whether the shoe fits?

I mean, why couldn't you have an expert in painting, a great expert, and he looks at that and says, this is deep magenta.

I don't even know what magenta is.

Unidentified Justice: [Laughter]

Justice Breyer: And you say, how do you know?

How do you know?

He says, I've looked at 50,000 paintings.

Believe me, I work for the Philadelphia Museum of Art, I've looked at so many, I know.

I recognize it.

You wouldn't apply Daubert factors in such a case.

I mean, isn't it Daubert factors where they belong, when you're trying a general theory, and some other thing where it's not?

Mr. Babington: Justice Breyer...

Justice Breyer: Is that right, or not?

Mr. Babington: Justice Breyer, we agree that the Daubert factors can be flexibly applied...

Justice Breyer: No, flexibly... what in my deep magenta case... you know, the Daubert factors are whether the technique or theory used could be tested or refuted, whether it's been a subject of peer review, the rate of error.

I mean, think of my artist, my artist expert.

He says, I've seen 50 million paintings.

Believe me, I know deep magenta when I see it.

The Daubert factors have no bearing there, do they?

Mr. Babington: We agree that in certain cases it may be appropriate not to apply...

Justice Scalia: All right.

Justice Breyer: Then if that's so, why did you answer Justice O'Connor the way you did?

Why wouldn't it be whether the shoe fits, i.e., whether the Daubert factor applies here or not, is a matter for the district judge, subject to review for abuse of discretion?

Mr. Babington: Well, the district... our point is that the district judge should be allowed to ask the logical, common sense questions.

Justice Breyer: I'm asking my question.

My question is, why did you reply to Justice O'Connor by saying... why didn't you say... I want you to have a chance... whether you apply the Daubert factors or whether you apply my deep magenta, which is experience, depends on the circumstance.

The circumstance is up to the district judge, reviewable for abuse of discretion in the court of appeals.

Now, you either agree with that, or you don't.

I want to know if you agree with it and, if you don't, why not?

Mr. Babington: We think that the broad...

Justice Breyer: Do you agree with what I said or not?

Mr. Babington: We think that the broad standard should be that... reviewable as for... under... as I understood, Justice O'Connor's question was, what was the standard of review, and the standard is a matter of law.

Now, how that standard is applied is for abuse of discretion.

Justice Breyer: I'm sorry, I still want to know if you agree with the way I put it.

You don't have to agree by any means, but I'd really like to know.

I... do you want me to repeat it again, or not?

Mr. Babington: No.

I think I understand the question, which is that in certain cases, would a district court be wrong, or would he err in not applying the Daubert factors.

Is that the...

Justice Kennedy: No.

Justice Breyer: My question is whether the shoe fits, whether you apply Daubert factors to an expert or something else, like deep magenta, experience, whether you do one or the other depends on whether the shoe fits in the particular case.

It's up to the district judge, reviewable for abuse of discretion.

Whether our case is a case involving a general, testable theory, or our case is a case involving reliance upon the expert's personal experience, whether it's the one or the other is up to... you see what I'm saying?

Am I clear?

Mr. Babington: I think, you know, we're arguing over semantics.

Where I'm having trouble with your question is, I think that the standard is a legal standard, reviewable de novo, but how that standard is applied in a particular case is reviewable by abuse of discretion.

Justice Scalia: I thought your... are you going back on your brief?

I thought your brief's position was, it's always okay to use the Daubert standards, and even in the deep magenta case, is it relevant that his estimation of what is deep magenta is not susceptible to testing or falsification?

Suppose you have another witness who says, yes, I've also examined 100, and I have had my judgment tested by one methodology or another.

Isn't it relevant whether it's subject to testing or falsification?

Mr. Babington: Exactly.

Our point is that the district court should be allowed to ask these questions as appropriate...

Justice Kennedy: It's never wrong...

Mr. Babington: in every case.

Justice Scalia: It's never wrong to ask those questions.

Mr. Babington: Right.

If...

Justice Kennedy: Isn't that your position?

Mr. Babington: Yes.

If the proponent of the evidence, Justice Scalia, comes forward and says, this factor should not be given much weight in this case, then, of course, the court can say, as this Court noted in Daubert, that perhaps peer review isn't something that would be applicable in every case, and it should be given little or no weight, and the...

Justice Scalia: Isn't it applicable in every case?

If you have two witnesses, and one of them comes up with a magenta kind of stuff, and the other one comes up with something that seems equivalently fuzzy but he says, and by the way, my judgment as to these 1,000 paintings was subjected to peer review, and the entire artistic community agreed with me, wouldn't that make his testimony more reliable?

Mr. Babington: That's exactly our point.

It should be based on the evidence that's before the court.

It may be that in a particular case the expert can't trace from the facts to the conclusion by...

Justice Scalia: Questions are always relevant.

Aren't the questions always relevant?

Mr. Babington: The questions are always relevant, absolutely.

That's our point.

Justice Ginsburg: How about the beehive keeper that the Eleventh Circuit fastened on as an example of somebody who has great expertise based on constant observation, but the Daubert factors don't seem to fit that kind of expert.

Mr. Babington: Our point, Justice Ginsburg, is that it's... the district court should be allowed to ask those questions and have the expert explain why the particular question flowing out of one of the Daubert criteria doesn't apply to that particular expert, but we believe the beekeeper can be adequately reviewed under the Daubert factors.

I think one of our amici, the Product Liability Advisory Council, in fact, in their footnote 12 in their brief, pointed out that there are studies dealing with beekeepers that actually speak to the issue that's mentioned in that analogy.

I would like to reserve the...

Justice Souter: May I ask you one last...

Chief Justice Rehnquist: Just one...

Justice Souter: Justice Stevens.

Justice Stevens: I just wanted... you didn't really have much chance to respond to Justice Kennedy's beginning question.

You did point out that the man who testified had not looked at the tire.

It is your view, though, is it not, that even if Edwards had been the witness, his testimony would also have been inadmissible.

Mr. Babington: That's correct.

Justice Stevens: So it isn't a matter of not having looked at the tire.

Mr. Babington: That's correct.

We'd like to reserve the balance of my...

Justice Souter: I have one last question I'd like to ask you.

Do I understand you correctly that your position is that the Daubert factors are always relevant, that the four Daubert questions may always properly be asked, but there are some cases in which an expert might flunk on all four Daubert factors and nonetheless properly be admitted to testify.

Is that...

Mr. Babington: That's correct, if there was some objective, other objective support that the expert could put forth to show that his testimony was based on good grounds on proper validation.

I'd like to reserve the balance.

Justice Kennedy: Thank you, Mr. Babington.

Argument of Jeffrey P. Minear

Chief Justice Rehnquist: Mr. Minear, we'll hear from you.

Mr. Minear: Mr. Chief Justice, and may it please the Court:

The United States submits that the court of appeals erred in holding that expert testimony based on experience is categorically exempt from the reliability analysis that this Court described in Daubert.

Daubert makes clear that a trial judge must ensure that expert testimony, whatever its subject matter, rests on a reliable foundation and is relevant to the task at hand.

This Court did not draw distinctions in that respect between expert testimony that rests on scientific principles and expert testimony that rests on experience, nor did it lay down iron-clad rules governing what reliability factors a trial judge may properly consider.

Instead, the court recognized that the reliability inquiry is a flexible one, and that a trial judge should be able to call upon the full range of relevant considerations in determining whether the expert testimony is sufficiently reliable to assist the trier of fact.

The Daubert decision did identify four general factors that a court may find useful in assessing an expert's methodology.

Justice O'Connor: Mr. Minear, do you agree that as a general matter the trial court judge should exercise the gatekeeping function...

Mr. Minear: Certainly.

Justice O'Connor: of 702 by looking to the indicia of reliability prevailing in the relevant discipline?

Mr. Minear: We think...

Justice O'Connor: Is that what they do?

Mr. Minear: We think that is a relevant consideration and, in fact, broadly speaking, that is reflected in one of the Daubert factors, whether there's general acceptance of the opinion that's expressed, but we also believe that that's only one factor, and...

Justice Scalia: What if there's no standard of... I mean, what if there's no standard of reliability in the relevant discipline?

I mean, what if there is a whole cadre of tire examiners out there, all of which use, you know, witchcraft science?

Unidentified Justice: [Laughter]

Justice Scalia: Do you have to say, well, since there are no standards of reliability in this field, we have to let any expert testify?

Mr. Minear: Certainly not.

We think the ultimate responsibility for the trial judge is to make a rational determination of whether the evidence is sufficiently reliable to assist the trier of fact.

If there is no indicia of reliability whatsoever, if the field is simply raft with odd theories that cannot be reconciled and have never been tested, and we think that's an important consideration for the trial judge to take into account, and would most likely exclude that type of evidence.

Now, the Court did identify those four factors...

Justice O'Connor: Do you think that in this case the district court's decision not to admit the testimony should have been affirmed?

Mr. Minear: Yes, we do, Your Honor.

We believe that the trial court here did not abuse its discretion in determining that Mr. Carlson's methodology was not sufficiently reliable.

Justice O'Connor: And you think that the court of appeals should review it on an abuse of discretion standard, that we don't have some issue of law here?

Mr. Minear: That is correct, although there is an issue of law here, based on what the court of appeals said.

The court of appeals established as a matter of law, so it said on page 104 of the joint appendix, that Daubert does not apply to this type of expert.

In a sense, it created a categorical exemption for this type of evidence, and...

And the district court, I assume, on your theory would have committed an error of law if it had said, the four Daubert factors are the only things we ever consider and if, in fact, one flunks the four Daubert factors, that as a matter of law precludes the testimony, that would have been a legal error, too...

That would have been a legal error...

Justice Souter: taken to the other extreme.

Mr. Minear: Yes.

I agree with that, Justice...

Justice Scalia: Indeed, that would have been a legal error even with regard to the most scientific of scientific testimony, wouldn't it?

Mr. Minear: I think that's right.

An example, perhaps, to explain that would be a statistician who offers a theory that... Bayes' theory on statistics, and he attempts to validate that theory simply by a logical proof, and he goes step by step and proves that that statistical theory is accurate.

That's sufficient basis for it to be admitted without testing, without peer review, without the other requirements.

Justice Kennedy: In this case, would it have been error to admit the expert's testimony?

Mr. Minear: Would... it would have been... would it have been error to admit... I think under these circumstances we would think that it would have been an abuse of discretion.

Justice Kennedy: Would not?

Mr. Minear: Would have.

Justice Ginsburg: Would have.

Mr. Minear: It affirmatively would have been an abuse of discretion.

Justice Kennedy: And is that because there was nothing to link the experience with the conclusion that he was ready to offer?

Mr. Minear: That's correct.

If Mr. Carlson was simply testifying on his own visual examination of the standards of abuse on the tire, we don't think that that would necessarily be an abuse of discretion.

The problem with Mr. Carlson's testimony here was there was nothing to support his ultimate conclusion that there must be a defect.

His... there was no way in which the trial court... this is what concerned the trial court.

There was no way it could validate his opinion that because there are only marginal signs of abuse, there must be a defect, and that's where his focus was.

Justice Kennedy: It would be as if in Justice Breyer's hypothetical he said, this is magenta, and therefore it must have been based... it must have been painted over a canvas that had been sprayed with dye.

Mr. Minear: That's correct.

In other words, you're drawing is an analytical leap, to use the language that was set forth in Joiner, that simply was not justified on a rational basis alone, and that's why the court here thought it necessary to make a further inquiry.

Now, all four of the inquiries it made were highly pertinent to that question.

If Mr. Carlson's testimony was, in fact, accurate, if his methodology was accurate, then it should be susceptible to testing.

What was really concerning the trial court here was that there was no testing that was done here, and there was no way to know whether any of Mr. Carlson's projections or predictions with respect to defects had ever been proved.

Now...

Justice Stevens: May I ask, if there had been... the plaintiffs had gotten some expert testimony, would the respondent's expert witness testimony have been admissible?

Mr. Minear: We think the... excuse me, the respondents' expert?

Justice Stevens: I mean... I'm sorry, I got it backwards, the petitioners' expert.

The defendants' expert.

Would that testimony have been admissible had it been necessary to reach, you know, a conflict in the evidence?

Mr. Minear: Yes, I think so, and what we had here, what we could have had here would simply be a dispute over whether or not the tire was abused, in which case the petitioners' expert and respondents' expert did use similar methodology with regard to examining the tire, saying what they found and what they concluded from that with regard to abuse.

The problem in this case is that respondents have to prove that there is a defect.

They had no affirmative evidence of a defect, and they relied on this process of elimination theory to reach that conclusion, and that's where the trial court said there was simply too far of an analytical leap simply to say that, well, we've looked at the tire and there's only marginal signs of abuse, so there must be a defect, even though there was no evidence of a defect and the expert was unable to prove that whenever this situation occurs there in fact is a defect.

There was never any controlled laboratory test to establish the veracity or corroborate that conclusion.

Justice Scalia: Well, you would agree... I mean, depending on how broadly you mean the word abuse... would a road hazard be an abuse?

I mean, you know, you non-negligently run over a nail in the road.

You consider that abuse?

Mr. Minear: Yes, if...

Justice Breyer: Okay.

Mr. Minear: If abuse is read broadly enough.

Justice Scalia: Is read broadly.

Now, is it a rational proposition that if a tire has not been subject to abuse and fails, it must have been because of a manufacturing defect?

Mr. Minear: No, I don't think that necessarily follows.

Justice Scalia: Well, what else could it be due to?

Mr. Minear: The tire could simply wear out.

In this case, 90 percent...

Justice Scalia: Oh, okay.

Mr. Minear: of the tread was gone.

The tire was bald.

Justice Scalia: Well, you're not defining abuse broadly enough, then.

Mr. Minear: Yes.

I don't believe that Mr. Carlson defined abuse that broadly.

I mean, he did do it in the context of the service life of the tire, so I think that it depends if... the problem with the process of elimination...

Justice Scalia: He didn't say there was no abuse.

He said there was no evidence of abuse.

That was the real logical flaw in his analysis, wasn't it?

Since I cannot find evidence of abuse, it must have been a manufacturing defect.

I might have gone along with him if he had said, since there... since I can testify for sure there was no abuse, reading abuse broadly, including running the tire too long, running over a nail and everything else.

Mr. Minear: Well, I think even he agreed that there were some signs of abuse, although he discounted them based on his experience and the like, so I don't think that he testified that there was no evidence of abuse.

I think actually his testimony was that oh, yes, there is shoulder wear on the tire, but I ascribe that to causes other than abuse.

But the real problem here was that leap that, well, simply because I only see these signs of abuse, the tire must be defective.

The problem with the process of elimination approach is, you must make sure that you've eliminated all of the possible causes, and certainly there are many tabloids that reported flying saucers based on a flawed process of elimination technology.

Many magic tricks turn on a flawed process of elimination basis to trick the viewer.

And that's why I think the trial court was rightly skeptical of the application of a process of elimination theory without any sort of supporting corroboration that would indicate that that process was, in fact, valid, and that again was what I think really concerned the trial court.

If there are no further questions, thank you.

Argument of Sidney W. Jackson III

Chief Justice Rehnquist: Thank you, Mr. Minear.

Mr. Jackson, we'll hear from you.

Mr. Jackson: Thank you, Mr. Chief Justice Rehnquist, and may it please the Court:

First, to set the record straight about what the trial court said about applicable Alabama law in this diversity case, on page 36 of the joint appendix the Court discounted the attack on a process of elimination form of proof.

Despite defendants' exhortations to the contrary, the court perceives no inherent flaw in a process of elimination form of proof per se, as long as the underlying methodology is scientifically valid.

Under Alabama law...

Justice Breyer: Excuse me.

Justice Scalia: You say this is 36 you were just reading from?

Justice Kennedy: I can't find where you're...

Mr. Jackson: Footnote 7.

Justice Scalia: Of the joint appendix, you said?

Mr. Jackson: Yes, sir, of the joint appendix, Your Honor, page 37, footnote 7 in the court's first order.

Justice Scalia: 36, footnote 7.

Mr. Jackson: I'm sorry, judge... justice... Mr. Justice Scalia, page 36, yes, sir, and that flows from the Hillhaven Farms v. Sears case, which interpreted Alabama law in a tire failure case where the plaintiff did not rule out abuse, and the case was sent back in order that the plaintiff could do such... put on such proof.

Chief Justice Rehnquist: Well, how much of this, Mr. Jackson, is controlled by Alabama law and how much by the Federal law of evidence?

Mr. Jackson: Your Honor, the substantive Alabama law would be applied to see whether or not we have presented sufficient proof to let a defect go to the jury.

Justice Scalia: Yes.

Mr. Jackson: The Federal Rules of Evidence, of course, will apply on what evidence comes in and what evidence does not come in, so it would be the Federal Rules of Evidence who make procedural...

Chief Justice Rehnquist: So then, what is the relevance of Alabama law to this particular case and this question we have before us now?

Mr. Jackson: Your Honor, the relevance of Alabama law deals directly with the reliability and relevance of what Mr. Carlson was going to do in this case.

Chief Justice Rehnquist: Well, if you say... but that... what Mr. Carlson was trying to do was to qualify himself as an expert, was he not?

Mr. Jackson: Yes, sir, and his qualifications...

Chief Justice Rehnquist: Why would Alabama law control whether or not the district court should admit his testimony under Rule 702?

Mr. Jackson: It would not, Mr. Chief Justice.

Chief Justice Rehnquist: Then why are you saying what you are?

Mr. Jackson: Because the petitioners take the point, or take the standpoint in their briefs and down below that this type of expert testimony cannot lead anywhere in the context of the facts of this case, and certainly his testimony, his proffer can, because we know that if abuse is ruled out as the cause of the Carmichaels' tire failure, then whether or not the tire failed due to a defect is properly an issue for the jury.

It's a question of fact.

And here, Mr. Carlson was going to take the tire, he was going to take it in front of the jury, he was going to explain that, based on his years of experience at Michelin in watching thousands of tires fail and examining the carcass of those tires, that there would be four signs, objective indicia of abuse, and he would show where those signs should be, and he would point to the sidewall deterioration and show...

Justice Scalia: I did not understand that he was going to say that there could be no abuse unless he found signs of abuse.

Was he willing to say that, that he could guarantee the jury that if there was any abuse, I would have seen signs of abuse?

Mr. Jackson: No, Your Honor, he could not guarantee the jury that.

Justice Scalia: Well, if he can't do that, then he can't eliminate abuse, and if you can't eliminate abuse, you cannot make the assumption that there must have been a manufacturing defect.

Mr. Jackson: Well...

Justice Scalia: He can just say, I didn't see any signs of abuse.

Mr. Jackson: Well, Justice Scalia...

Justice Scalia: But there may have been abuse that I... that didn't produce any signs, and as long as there's that gap, it seems to me you never get to the conclusion.

Mr. Jackson: Yes, Your Honor, but this is not a production burden issue.

The issue here is whether or not this testimony should be admitted to begin with, and what factors the court should or should not look at in determining that threshold of reliability in order to allow him to testify, because what Mr. Carlson is going to do is to take a fairly mundane object, a tire, and he is going to assist the jury in reading that tire.

Justice Scalia: I understand what you're saying, if he was being introduced to the jury simply to prove the point that there were no objective indicia of abuse, but that isn't what he testified.

He testified to the jury, there was a manufacturing defect in this tire, and he could not testify to that unless he could testify that if there had been abuse, I would have seen some objective indicia of it, and you say he didn't testify that and couldn't testify that.

Mr. Jackson: Justice Scalia, I believe the record will show that Mr. Carlson, the expert, candidly stated that he cannot point to the specific defect.

That is next to impossible in a tire failure case.

But what he can do is, is he knows to look for certain types of objective indicia to rule out abuse and the Eleventh Circuit cited the...

Justice Scalia: He couldn't rule out abuse.

I thought you answered my question...

Mr. Jackson: Then I misspoke.

Justice Scalia: that he never testified that if there was abuse, I would certainly have seen indicia of it.

Did he say that?

Mr. Jackson: Well, he stated that if there is abuse, there are four common signs that are apparent in most all tires that fail due to abuse, and most tires do fail due to abuse, and he would rule those out.

In essence, he would show a negative to determine whether or not this...

Justice Scalia: I think all he could have testified to was, I saw no signs of abuse.

Now, maybe that expert testimony could go to the jury.

Mr. Jackson: I believe that is sufficient, Your Honor.

Justice Scalia: But he wanted to testify to more than that.

He wanted to testify to the jury, ladies and gentlemen of the jury, this tire was defectively manufactured, and he had no basis, scientifically or otherwise, for that conclusion.

Mr. Jackson: Well, his basis would be, based on his experience, that if you do not see those signs of abuse, then the only conclusion is that it failed due to a defect, and at least that should be sufficient, with the other evidence we have, to determine whether or not there is a proper question for the jury.

Justice Scalia: Unless there was abuse that left no signs.

Mr. Jackson: Well, we propose, Justice Scalia, that would go to the weight and not the admissibility, and if that were a consideration, I believe Mr. Dodson, the expert for the tire industry, would have said, no, these signs are totally off the wall.

That doesn't mean anything.

The methodology is incorrect.

Justice Scalia: I don't think it goes to the weight at all.

I think it goes to the conclusion.

I think it is logically impossible to testify that there was a manufacturing defect unless you can say, if there had been abuse, I would have seen signs of it, and you tell me he couldn't testify to that.

He could testify that normally, usually when there is abuse, some sign is there.

Mr. Jackson: There are four signs.

Justice Scalia: But he couldn't say... he couldn't say that there was always a sign.

Mr. Jackson: Well, but again, the calculus that has to be invoked here is Alabama substantive law.

We do not have to prove a specific defect.

To do so, we would have to go back to Korea and depose the people that made the tire on a specific day, and do it that way.

Under Alabama law, the negligence is placing a defective product in the stream of commerce that reaches the end user in a dangerously defective condition.

It lightens up the burden of having to go prove a specific defect, and this case, along with a lot of cases cited by the Government in their brief, is perfect area of testimony for experienced-based testimony.

Justice Breyer: But how... yes.

You've put your finger on just the question that's bothering me.

In this case, I take it he said, if you don't find the abuse factors, then, he says, it's probably a bad tire.

Mr. Jackson: Probably a bad tire...

Chief Justice Rehnquist: Yes.

Justice Kennedy: Now...

Mr. Jackson: but you have to look.

Justice Breyer: Yes, but the look is out of this.

that wasn't what was... that's a different issue.

I don't think look, except in... he says, these are the factors.

Tread wear, sidewall deterioration, something called beading, and something on a flange.

And the judge is thinking to himself, now, wait a minute, here.

I have a tire that's gone perhaps 100,000 miles, it's bald in places, it's had a nail driven into it, the nail hole seems not... what do you mean, if those four factors aren't there there's only abuse.

I mean, it has to be a defect.

There are all kinds of other things here.

So he says to the expert, expert, you mean to say even in a tire like this one, in the absence of those four factors there had to be a defect?

What about the nail?

What about the bald spot?

What about all that stuff?

And the expert says, no, in my experience if those four factors aren't there, there's a manufacturing defect, and at that point the judge is thinking, my goodness, what kind of a theory is that?

Is there any other expert who believes that?

And that is what it seems to me is in front of us.

Has the judge abused his discretion in that circumstance to say, if there's some theory that without those beading problems, it's a manufacturing defect, and nails don't count, and 100,000 miles doesn't count, if there's scientific theory like that, you'd better tell us what it is, because you couldn't have had that much experience.

Now, that's... I'd like to hear your response.

Mr. Jackson: To answer your question on the abuse of discretion from a factual standpoint...

Chief Justice Rehnquist: Uh-huh, yes.

Mr. Jackson: first, Mr. Carlson did rule out other causes such as cuts, puncture holes.

He did look at those, and so that one goes to weight and not the admissibility.

The age of the tire is a problem.

This was not a brand new tire, but it was not an illegal tire.

It had enough tread to make it legal under the Alabama standards.

Justice Scalia: Your witness thought it was 10 years older than it was, as I recall.

Mr. Jackson: Yes, Your Honor.

Justice Scalia: That's what he said, initially.

Mr. Jackson: They don't know the exact date, but the tire was made in 1988, yes, sir.

Justice Scalia: Yes, and he said '78 in his initial...

Mr. Jackson: I believe that was a typographical error in the report.

Justice Scalia: Which he repeated in the later deposition as well.

Mr. Jackson: Yes, sir, that's correct.

Justice Kennedy: I thought where you were going when you began your argument was to say, the only thing relevant so far as this expert's testimony is concerned, was whether there had been signs of abuse.

After that, Alabama law would take care of it.

But that was not my understanding of his affidavit.

I thought he went on to say that because of my examination with reference to abuse, I find that it was due to a defect.

Now, that's a big difference.

Mr. Jackson: He does make that conclusion, Justice Kennedy, and that is in his affidavit.

As far as proof at trial, which we haven't gotten there yet...

Justice Kennedy: Well then, it isn't just abuse that we're talking about.

Mr. Jackson: Well, I believe ruling out abuse...

Justice Kennedy: It's this very, very critical leap, or inference from the finding of no abuse, okay, expert testimony on that is... it's subject to expert testimony, Daubert evaluation.

Maybe he makes... maybe he makes it through the Daubert gate, but then he goes on to say, and because there was no abuse, it was a defect.

Mr. Jackson: I don't believe this expert will ever make it through the Daubert gate, because he is experience... he has experience-based...

Chief Justice Rehnquist: Well...

Mr. Jackson: testimony.

He will fit in the fourth criteria, I believe, if it is not limited to the scientific community.

Chief Justice Rehnquist: Mr. Jackson, looking for perhaps the larger implications of this case, do you defend the Eleventh Circuit's splitting off expert testimony into scientific testimony and nonscientific testimony to be treated quite differently in light of the gatekeeper function?

Mr. Jackson: Mr. Chief Justice Rehnquist, I believe what the Eleventh Circuit did is, they made a distinction without a difference.

They distinguished between scientific and nonscientific.

You know the old saying, there's more than one way to skin a cat.

That was an easy way to do it, because this expert's testimony was so far removed from a teratologist that the criteria in Daubert just had no place at all, but we think the better approach, as Professors Berger, Imwinkelried, and Salzburg said, is, you look at the intellectual rigor used in the field in question, and the first thing...

Chief Justice Rehnquist: So you don't really defend the Ninth... the Eleventh Circuit's reasoning here.

Mr. Jackson: I do not disagree with the reasoning.

I think they ruled that under U.S. v. Koon, the sentencing guideline case where the judge deviated from the sentencing guidelines, that this was an absolute error of law to incorrectly interpret Daubert and incorrectly apply rule 702, and the Eleventh Circuit has again recently spoken on that in City of Tuscaloosa v. Harsco...

Justice Ginsburg: But Mr. Jackson, the division of the world into scientific versus nonscientific... we have two neat boxes, Daubert for scientific, and everything else nonscience.

I think it was convincingly argued that the world is not that simple, that there are shades.

Mr. Jackson: Yes, Your Honor.

Justice Ginsburg: Then there's a scale from highly scientific, and then going down to pure observation.

Mr. Jackson: Yes, Your Honor.

Justice Ginsburg: So it seems to me that the Eleventh Circuit was looking for an easy categorization that just doesn't conform to reality.

Mr. Jackson: Well, I believe in the Eleventh Circuit, using the beekeeper analogy, they kind of drew a spectrum, beekeepers on one end, teratologists on the other, and said, this tire failure analysis, who gets his hands dirty showing the jury what's there and what's not there is more like a beekeeper who has a lot of experience.

Justice Ginsburg: But he had a test.

He said, here's my method, I've got these four factors.

Going back to Justice Breyer's question, isn't it at least appropriate to ask, do the other experts agree with this four-factor test, and if you don't find two, whatever his method was.

And on that point, is there anything that attests to the reliability of his method, that four-factor method?

Mr. Jackson: Justice Ginsburg, there is no test known of by any expert in the field that we have come across that can test a failed tire.

It's like...

Justice Scalia: And if there were, you think it would have been irrelevant.

Mr. Jackson: No, Your Honor.

Justice Scalia: Well then, you think the Daubert factors are relevant.

Let's take factor number 3, the known or potential error rate.

Mr. Jackson: There's no...

Justice Scalia: Suppose your witness, your expert witness had been able to come to the court and tell the judge, my observations have been... have been tested by later experts and I have been found to be accurate 95 percent of the time.

You think that would have been irrelevant.

Justice Breyer: Or, suppose...

Mr. Jackson: No, Your Honor.

I don't believe it would be irrelevant.

Justice Scalia: Suppose he came in and said, my methodology has been reported in Tire Testing Journal and has been approved by... you know.

That would have been irrelevant?

Mr. Jackson: I do not believe that would be irrelevant, but it just does not exist in this field.

That is like checking a cadaver for reflexes.

A failed tire does not have the testability that a tire before it fails does.

Justice Scalia: Merely because your answer to a question is no does not mean that the question is irrelevant.

Mr. Jackson: I understand, Your Honor.

Justice Scalia: The answer might have been yes, so the question is relevant, and that's all we're talking about, whether the Daubert factors are relevant.

Mr. Jackson: Yes, Your Honor, but the point I'm not very eloquently making is, you need to look at the field to see if those questions are relevant, not just apply the questions in a one-size-fits-all wooden, rigorous approach that the trial court did here.

Look at what...

Justice Scalia: Well, you have to look to the field to see whether you should have expected a yes answer, perhaps.

Mr. Jackson: Well...

Justice Scalia: It seems to me the questions can always be asked.

Mr. Jackson: They can always be asked, and there's flexibility in Daubert, we agree, but in the field of tire failure analysis, handwriting analysis, trace evidence analysis, finger printing analysis, you never really know if you're correct, so to do what the petitioners want is to have a... to have a... there must be some validation by objective criteria is not in Rule 702.

Justice Souter: No, I don't think that's what he's arguing at all.

He said in response to my question that all four Daubert factors may properly be applied.

They are always relevant, but one might flunk every single one of them and yet nonetheless produce admissible testimony because there would be other good reasons to let it in, and there would be good reasons to discount the failure to meet the Daubert factors.

That's all he's saying.

Mr. Jackson: We agree with that proposition.

Justice Souter: You accept that proposition?

Mr. Jackson: Yes, sir.

Justice Souter: Then don't you necessarily have to accept the position that the Eleventh Circuit was wrong in making this categorical exclusion of relevance based on drawing a line between what is in some pure sense scientific and what is not?

Wasn't that at least an error of law on the circuit's part...

Mr. Jackson: Your Honor...

Justice Souter: to draw that categorical distinction?

Mr. Jackson: I don't believe that was an error of law, Your Honor.

The result is correct, and they determined that woodenly, rigidly applying Daubert is an error of law.

They used a distinction between scientific and nonscientific like the Sixth Circuit did in City of Detroit, but when they...

Justice Souter: Didn't they do so in order to exclude the four considerations as distinct from saying the four considerations are always relevant but may be of little or no weight?

Isn't that the... the failure to draw that distinction I think may be attributed to the circuit.

Mr. Jackson: Yes, Your Honor.

Justice Souter: And wasn't that failure an error of law?

Mr. Jackson: Well, I still don't believe that was an error of law.

They remanded saying that the Daubert factors may be applied by the district court, but that the district court should not put himself in the place of the jury or in the adversarial system.

Chief Justice Rehnquist: Well, of course, our Joiner opinion says the court of appeals shouldn't place itself in the place of the district court, either, that they're supposed to review a question of admissibility like this on an abuse of discretion standard, which the court of appeals certainly didn't do here.

Mr. Jackson: That's correct, Mr. Chief Justice Rehnquist, but this is not a Joiner case.

In Joiner, the parties argued over what methodology was proper in trying to find out whether PCB's caused lung cancer, and there were tests on mice where they would inject things in the stomach, and then they would develop one type of cancer, and the parties never agreed on this is the correct methodology.

Here, the record evidence, the only record evidence below is that this protocol, this methodology, I gather the information, I study it, I look for abuse, I make a conclusion, is the exact methodology used by Mr. Carlson and Mr. Dodson, and it is what is validated by the marketplace for this information.

Chief Justice Rehnquist: That wasn't the reason in the court of appeals.

Mr. Jackson: It... no, Your Honor, and as we said, the court of appeals, their opinion did not leave much guidance on what the court should do below.

But recently they have cleared that up in City of Tuscaloosa v. Harsco, where ironically they reversed a judge kicking out a statistician saying he did not fit under Daubert by saying, you must look at the field in issue.

You must look at the reliable indicators for a statistician, and the court said that man, that statistician can testify, and I think increasingly in the lower courts they are not woodenly and rigidly applying Daubert because it's a useless task in a lot of...

Justice Breyer: So is that... maybe we... there's a kind of general agreement here, I don't know, but at least with the Solicitor General, and is it the case that you agree... in your experience as a trial lawyer... you're experienced with the... the object is to let the district court do its job, and its job is a gatekeeping job with all these experts.

Are you with... you agree with that?

Mr. Jackson: I agree with that.

Justice Breyer: All right, and then you'd also agree that there isn't a rigid categorization as between science or not where you could say the Daubert test is or is not useful.

The answer is both within and outside something that the Harvard University would call science or something.

I mean, sometimes within that, sometimes outside of it the Daubert's helpful, sometimes it's not helpful.

Mr. Jackson: I agree.

Justice Breyer: All right.

So that should be up to the district... to the trial judge to say which is which.

Reviewable for abuse of discretion in the court of appeals?

Mr. Jackson: Let me answer you this way.

I agree with the Solicitor General saying that a flexible approach is appropriate.

Where we disagree is saying that this trial judge or any district court judge can select the wrong criteria, and that be only an abuse of discretion.

Justice Breyer: I don't know...

Mr. Jackson: That's an error of law based on a misinterpretation of Rule 702, which 702 does not say you've got to have objective validation.

It does not say you've got to have peer review and publication.

Chief Justice Rehnquist: But that converts the abuse of discretion standard into almost a de novo standard if you pick out something that the district court did and say, well, this was an error of law and therefore we're not going to use abuse of discretion.

Certainly just because the court of appeals disagrees with the district court as to its use of a particular factor, that's not an error of law.

Mr. Jackson: Mr. Chief Justice Rehnquist, I believe again the Joiner case is a good example where the district court judge had to make a judgment call on what criteria is appropriate to this health case based on exposure, and that should be reviewed for abuse of discretion.

I believe that will be a fairly rare case.

You take a tire failure expert, these gentlemen basically do the same thing, and if the court, the trial court makes the inquiry initially to the parties, what's this expert about, what is this testimony about, he's probably going to get fairly similar criteria, and that can be borne out in the record.

Like in this case, there's no evidence saying this protocol is not proper.

In fact, I don't think they can.

Justice Breyer: But they're not saying that this... I would guess, let's see what you respond, that the hardest... maybe you could win even under an abuse of discretion standard.

Justice Souter: I don't know.

Mr. Jackson: Depends on which way the judge rules.

[Laughter]

Justice Breyer: Well, the hardest... but imagine you're in the Eleventh Circuit applying abuse of discretion standard.

I guess the... in my mind, anyway, I think the hardest question for you would be, you'd say, well, look, there is a theory going on here that in the absence of these four specific factors, not any kind of abuse but four kinds, beading, flange, whitewall discoloration, and some other thing, that your expert seems to say, in the absence of those four things, it must have been defect.

And immediately a common sense person thinks, what?

You mean nails couldn't be an abuse?

You mean, it's bald couldn't be an abuse?

And the expert says... if the expert then says, well, I have a lot of experience at this, you say, wait a minute.

You couldn't have seen hundreds or thousands of tires that have had two nails... you know, two nails driven into them, and they're bald, and they've gone 100,000, and you've found the absence of this stuff, and yet you still... that's impossible.

You're going on some theory, and if you're going on some theory, you tell me who else believes that theory.

Do you see what I'm saying?

I'm saying you'd have to deal with that question, and your response to that question would be?

Mr. Jackson: My response to that question would be, the two nail holes, it's being run a long time, it's not the best tire on earth, that goes to the weight and not the admissibility of this testimony, and this testimony is certainly reliable, because this expert did consider the nail holes, he did consider the bald spot, and he had an answer for that.

It may not be an answer that the jury believes, but it's based on reliable experience with the leader in the tire industry, namely, Michelin.

They paid for that type of work for 10 years while he was at Michelin, and that goes to the soul of 702, knowledge.

And it didn't say knowledge based on joining a science club or something like that.

Knowledge can be based on knowledge, under Rule 702.

It can be based on experience, or skill, or training, or education, and those factors go to the inquiry of the relevancy.

And then does his testimony fit?

Well, certainly it fits, because he saw this same thing happen, so he says, at Michelin, and again, if that's not good enough for the jury, that's fine, but 702 is to enable the jury to hear all of this testimony and then the judge should determine, have we sustained our burden, producing enough evidence to get it to the jury.

That's all we ask to do.

Justice Scalia: Why don't we say the same for other experts, then?

Justice Breyer: I mean...

Mr. Jackson: I'm sorry, Your Honor.

Justice Scalia: Just dump it all before the jury.

Ladies and gentlemen, this is an expert.

He has this cockamamie theory...

Unidentified Justice: [Laughter]

Justice Scalia: that contradicts common sense.

That goes to the weight of whether you should believe him.

Unidentified Justice: [Laughter]

Justice Scalia: But all of this junk science can come into court.

It just goes to the weight.

Mr. Jackson: Well, Your Honor, this is not junk engineering.

It is based on valid, reliable, experience-based testimony.

If there is not a creditable link...

Justice Scalia: I'm not talking about this case.

Mr. Jackson: I understand.

Justice Scalia: I'm talking about your theory that it just goes to the weight.

I mean, that's just not an adequate explanation, if you believe that it's the role of the judge to stop some cases from going to the jury because there's simply not enough real evidence to justify a verdict for the plaintiff.

Mr. Jackson: I don't have a problem with judges stopping some experts from going to the jury, but the judge should not have to be an amateur scientist or an amateur engineer on Tuesday and a statistician on Wednesday.

They're just not equipped.

And we... we believe that the correct approach, as set out in the amici, is to let the judge ask the parties, what is this field here.

Justice Scalia: But that doesn't square with your answer to Justice Breyer.

You don't have to be an amateur rocket scientist to know that when two nails have been driven into a tire and it's bald, the absence of four other abuse factors does not suggest that there's a manufacturing defect, and your only response to that is, that goes to its weight and it should come before the jury.

Mr. Jackson: That is a wonderful cross-examination, but this expert considered those factors, and I think any expert would, and an expert can be ruled out of court if he fails to rule out a crucial test.

On the same page where the judge said he didn't like our analytical leap from the evidence to the conclusion, he cited the Diviero case.

In Diviero a tire expert was kicked out of court because he did not do exactly what Mr. Carlson did here.

He did not rule out abuse, tire cracking, sidewall deterioration, and they said... and that was based on testimony from the tire industry that unless you rule out abuse, you cannot prove defect.

So in essence what Mr. Carlson did here is something that's been approved by the industry.

There's no doubt that the judge should make there be a threshold status of reliability before an expert testifies, but the burden is not as high as petitioners want it.

If the burden is, you've got to fit within the Daubert factors, then all of this experience-based testimony, which is by and large used by law enforcement, is in danger.

Justice Ginsburg: But it wasn't just experience-based.

He gave a method, and that's... it seems to me makes him closer to the aeronautical engineer than the beehive keeper, because he said, now, here's my theory.

Here are these four things, and if I find two, then it's one way, and if I don't, then it's another way.

That's not just, now, I look at this and based on my experience reach this conclusion.

Mr. Jackson: Well, I believe that method, so to speak, is to give the tire the benefit of the doubt, because this is not an exact science, and this is subjective, and there's subjectivity involved, and this expert knows he's going to get cross-examined about the weaknesses in his testimony.

But I believe the trial judge saw the word, methodology, and immediately leaped into Daubert, and when he could not see an objective test, or objective validation, then he had a big problem with this testimony.

He just did not like it.

But when...

Justice Scalia: He didn't stop there.

He went on to see if there were any other justifications, explanations and so forth.

Mr. Jackson: Your Honor...

Justice Scalia: He went on to say, you know, it is... it seems to me illogical, he said.

It isn't just that there are no scientific journals that support it.

It's not just that there's no testing or verification.

It seemed to him illogical.

I mean, that's a bit different from just saying, you know, you fail the four Daubert tests and you're out of here.

Mr. Jackson: Well, from the get-go he applied the four factors and we flunked him.

He was asked to apply other criteria, which is referenced in footnote 8 of Daubert, and said those were of dubious merit because the Supreme Court, U.S. Supreme Court did not approve of them explicitly.

Those factors give litigants and courts other criteria to use that may fit the particular field at issue, and again will give judges basis to look at the intellectual rigor, or lack of intellectual rigor, whatever you have, in that field, just like the magenta example.

For an experience-based expert not to be able to give his opinion on something that he has learned in his experience, or in his lifetime, just tears 702 up, which is supposed to be a rule of inclusion.

Rebuttal of Joseph P. H. Babington

Chief Justice Rehnquist: Thank you, Mr. Jackson.

Mr. Babington, you have 2 minutes remaining.

Mr. Babington: Mr. Chief Justice, and may it please the Court:

Respondents have offered no defense of the Eleventh Circuit's holding.

This Court should reverse the Eleventh Circuit, because its decision was based on two errors of law.

It's wrong to take away from the district court the logical, common sense questions that flow from this Court's Daubert factors.

These questions should be always available to be asked, and the proponent of the evidence can explain why in a particular case they may be inapplicable or entitled to less weight.

We urge the Court to go further and affirm the district court's holding, because the district court got it right here.

It did not abuse its discretion.

The district court considered the respondent's primary argument before this Court on page 93 in the joint appendix in its opinion on reconsideration, and it said there that the plaintiffs contend that Mr. Carlson's testimony reveals that the methodology and principles adopted by Carlson are widely accepted in the relevant community.

The court declines to make such a leap.

So the district court has already considered the respondent's primary argument and rejected it, and for these reasons we believe it should be affirmed.

If there are no further questions...

Chief Justice Rehnquist: Thank you, Mr. Babbitt.

The case is submitted.

Attribution:

The Oyez Project

Featured:

GE v. Joiner - Oral Argument

Fri, 09 Jan 2009 14:50:01 +0000

Case:

GE v. Joiner

Media File:

96-188_19971014-argument.mp3

Related Transcript:

1997_96_188_argument.xml

Transcript:

Argument of Steven R. Kuney

Chief Justice Rehnquist: We'll hear argument now in No. 96-188, the General Electric Company v. Robert K. Joiner.

Mr. Kuney.

Mr. Kuney: Mr. Chief Justice, and may it please the Court:

This case arises out of a holding by the court of appeals that a particularly stringent standard of review, and not abuse of discretion or manifest error, should govern appellate review of district court decisions, excluding expert testimony under Rule 702 and this Court's Daubert opinion.

The factors that this Court has considered in its recent standard of review decisions all point to abuse of discretion as the appropriate standard here: the broad discretion given to trial courts under Federal Rules of Evidence 104(a) and 702, the consistent practice before the adoption of the Federal Rules of deferential appellate review of decisions admitting expert testimony, and the clear functional advantages of the trial courts in making these intensely fact-bound determinations.

Indeed, the conclusion that abuse of discretion is the appropriate standard for review of 702 decisions has been reached by no less than 10 courts of appeals.

Notwithstanding all these considerations, the court below embraced what it called particularly stringent review for decisions excluding, but not admitting, expert testimony, citing as authority its reading of this Court's Daubert opinion and the Third Circuit's opinion in Paoli, which had called for a, quote, hard look at exclusions of expert testimony that rejul... result in summary judgment.

In so doing, the court below articulated an expressly one-sided standard of review, whose precise scope and meaning are not clear and whose likely and perhaps intended effect seems to be to discourage the exercise of the discretion inherent in the gatekeeping function this Court outlined in Daubert.

Unknown Speaker: Mr. Kuney, even if you're correct, that the abuse of discretion is the standard of review, the Respondents tell us that we still would have to affirm under an abuse of discretion standard, and it doesn't make any difference in this case.

Are you going to address that argument?

Mr. Kuney: Yes, Justice O'Connor, I will.

I think it makes a difference for a variety of reasons.

I think that part of Respondents' argument, as I understand it, is that the court was merely ruling on a matter of law, and never had occasion to apply its novel standard of review.

I think if one looks at the text of the opinion of the court below, particularly at 10a and 11a of the... of the appendix to our cert petition, and takes a look at the section that deals with the reliability of expert testimony, what one sees is the court really--

Unknown Speaker: 10a and 11a----

Mr. Kuney: --Yes, of the--

Unknown Speaker: --of the petition?

Mr. Kuney: --petition to the... the... the appendix to the cert petition.

That's where we attach the opinion of the court below.

Unknown Speaker: Mmm-hmm.

Mr. Kuney: And the section really begins at the bottom of 10.

Unknown Speaker: Mmm-hmm.

Mr. Kuney: What one sees in the court of appeals opinion is nothing that looks like abuse of discretion review.

Rather, the court simply proceeds on its own to undertake its analysis; indeed, to declare in the first paragraph that the methods and procedures used by these experts were in fact reliable.

The court then proceeds to basically disagree with what the district court had done with respect to animal studies and epidemiolog... epidemiological data, but never to declare or find that the court abused its discretion in making the decisions that it had made.

Unknown Speaker: When... when you say abuse of discretion, as opposed to perhaps de novo review, Mr. Kuney, I take it that means that a... a properly acting district court might have reached different... different conclusions on the same evidence, and both would be affirmed on appeal?

Mr. Kuney: Mr. chief Justice, I believe that could happen, although I don't believe that could have happened in this case.

I think, on the record here, there... there would have... there should have been only one possible ruling by the district court.

But, as a general matter, it is absolutely correct that abuse of discretion suggests a range of decisions that district courts could reach.

Unknown Speaker: And I suppose if you say it's de novo review on an evidentiary point, there would be a lot more reversals in courts of appeals, not just in any one kind of case, but across the board.

Mr. Kuney: I... I believe that's the intention of those who articulated this standard... in fact, was to invite greater appellate reversal of district court decisions.

Unknown Speaker: On evidentiary points.

Mr. Kuney: On these evidentiary points.

I think, in particular, if you look at Judge Becker's explanation in the Paoli case, of why he embraced this hard look, he expresses the concern that district judges are going to get it wrong, and really calls for the necessity of greater appellate intervention for this... with respect to this gatekeeping function.

Unknown Speaker: Mr. Kuney, the... the court of appeals... the nub of... of one of the court of appeals' points was that the district court had focused on the soundness of the results reached by the various studies in question rather than the methodology and the general acceptance of that methodology.

If... and you may want to comment on whether this is so or not... but if the district court did not make it clear from its own exposition whether it was focusing on results rather than methodology... if there is an ambiguity there... would you agree that the court of appeals may resolve that ambiguity in, in effect, any reasonable way, and that the resolution of that ambiguity, in deciding whether the... the lower court opinion should be read as focusing on result or on method, is... is something that we should accept, so long as either resolution was... was reasonable?

That itself would not be subject to an abuse of discretion standard, would it?

Mr. Kuney: Justice Souter, I don't believe this Court is obliged to accept the court of appeals' interpretation of what the district court was doing.

In response to the first part of your question--

Unknown Speaker: Though, of course, we wouldn't have taken the case just to review that.

Mr. Kuney: --what... what courts of appeals often do in... in situations where there is abuse of discretion review, and they find that the record does not provide what the court of appeals believes is an adequate explanation of how the district judge exercised his or her discretion, then a remand for a better explanation from the trial court is often done.

Unknown Speaker: Because there are... there are... there are two inadequacies that might be in question.

One inadequacy might be the court of... the district court didn't make it clear which prong, as it were, it was focusing on.

The second inadequacy might be that, assuming it focused on the correct prong, the methodological one, it... it simply did not do an adequate job of justifying its... its position.

And... and you're saying, I guess, that there should be an abuse of discretion standard when the court of appeals reviews each of those two different kinds of questions?

Mr. Kuney: Yes, that's correct.

That's correct.

I think, in... in a number of cases, what this Court has said is that abuse of discretion as the standard of review really allows the appellate court full rein to do whatever is necessary.

It can always correct errors of law under an abuse of discretion, and it provides the appropriate deference--

Unknown Speaker: Mr. Kuney, the... the 11th Circuit said that the standard of review it was applying was abuse of discretion.

And then it went on... this is on page 4a of your appendix... a district court's ruling on the admissibility of evidence is reviewed for abuse of discretion.

And then it gave two reasons for a heightened abuse of discretion.

And one of them was the showstopper argument; that this is summary judgment, that you're out of court.

This is not just that you... you missed this piece of evidence, but you're out of court.

Now, isn't that just across the board, so that courts will look more closely at a ruling that puts a plaintiff out of court than one that... that leads to summary judgment... than one that is maybe a question of does a particular piece of evidence come in or out?

Mr. Kuney: --I think courts of appeals inevitably make judgments about how much of their time and attention to give to any particular question.

I think the problem here, though, is that by suggesting... by using language that suggests, in fact, some new standard, the 11th Circuit is suggesting, really, a different task for appellate courts.

It, on the one hand, does embrace, as you pointed out, abuse of discretion, but then proceeds to say, we really need to do more than that.

Unknown Speaker: But isn't it true, leaving... leaving the field of expert testimony, as a general rule, that a court will look more closely... a court of appeals... at a district court ruling that ends a case than one that merely means that a particular piece of evidence won't come in?

Mr. Kuney: I... I think the courts of appeals have not allowed that to lead to an altered standard of review.

I think there are a variety of evidentiary decisions that can--

Unknown Speaker: I thought that, in general, when you're faced with a summary judgment motion, the court... both the district court and the court of appeals, look at it from the vantage point most favorable to the opponent of the motion.

Mr. Kuney: --The summary judgment motion is reviewed de novo.

There's no question about that.

But when there are subsidiary evidentiary rulings that precede summary judgment, those, without regard to what rule of evidence may be implicated, are reviewed for abuse of discretion.

Then, once the summary judgment record is established, then there's de novo review by the court of appeals of whether summary judgment was a... was appropriate.

Unknown Speaker: And all disputed issues of fact are taken in favor of... of... of the moving party?

Mr. Kuney: Once you're beyond... yes, Justice Kennedy.

Once you're beyond the evidentiary issue and to the summary judgment point, then there's de novo review if the--

Unknown Speaker: Against the moving party in the court of appeals, yes.

But while you have the... the appendix handy, could you look at Judge Birch's decision?

It's at page 16a.

And he has the first three or four sentences.

He says: The role of the trial court, following Daubert, is to ensure that the conclusions reached by the scientific experts have some minimal level of reliability and probative value.

I take it you have no argument with that?

Mr. Kuney: --That's correct.

Unknown Speaker: Then... then... then he says: This determination is accomplished by establishing that the predicate principles and methodology relied upon by the experts are valid and that they can be applied to the facts at issue.

And it seems to me that that is also in accord with your position?

Mr. Kuney: Yes.

Unknown Speaker: And then he says: The sufficiency of the evidence and the weight of the evidence, however, are beyond the scope of the Daubert analysis.

Is... is he mixing apples and oranges there, or... or... or is he correct in that statement, as... as well?

And it was his concern, I... I think, that this was a sufficiency problem... I assume, because that... that's why he concurred.

Mr. Kuney: That's how I would read that, Your Honor... that... that he thought that perhaps what the district court had done was to slide from admissibility into sufficiency without clearly articulating that.

Unknown Speaker: But... but there's an element of sufficiency in the calculus that you want the district judge to apply, is there not?

Mr. Kuney: Well, you could use the word "sufficiency" if you want to.

But I believe what this Court said is that there are minimum thresholds of reliability and relevance that have to be met before the testimony is admissible.

And... and I--

Unknown Speaker: But... so we would say that "weight" and "sufficiency", as used here, are just terms of art, and in the sense that we usually use them, they do not apply to the district judge's determination?

Mr. Kuney: --That's how I read Judge Birch... Birch's concurrence; that he was recognizing two separate issues, and perhaps suggesting that there had been some confusion between the two.

Unknown Speaker: Well, certainly, after... after Daubert, the trial judge, the district court, is given authority to exclude evidence on the basis that it doesn't comply with the standards laid down in Daubert, I guess?

Mr. Kuney: Correct.

Correct.

And the court still has the ability, even if it determines that the evidence is admissible, to find it insufficient to avoid summary judgment.

And that, I believe, is part of what this Court... Court pointed out in Daubert... was that the admissibility determination was not necessarily the end of the case.

Unknown Speaker: Let... let... let's assume that... that perfectly reliable scientific methodology was used, but that the issue is whether, given that methodology, what has been proven is sufficiently relevant to this case.

That is, whether it comes close enough to establishing evidence of what the plaintiff wants to prove.

The district court could simply exclude that evidence, I suppose, if he thinks it isn't relevant enough.

Mr. Kuney: I believe that's correct, under the... under the "fit" prong.

Unknown Speaker: In which case you say... in which case you say he'd be reviewed on an abuse of discretion standard.

Mr. Kuney: Correct.

Unknown Speaker: He could, on the other hand, let it in, and... and simply grant summary judgment to the defendant on the ground that not sufficiently relevant evidence has been produced to overcome the initial burden that the plaintiff has.

Mr. Kuney: Correct.

Unknown Speaker: And that decision would not be reviewed on an abuse of discretion standard.

Mr. Kuney: That's correct.

Unknown Speaker: But it's the same... it's the same question.

Mr. Kuney: I... I believe it's not the same question.

I believe the standards that you have set... this Court has set forth under Rule 702, for determining admissibility, are not identical to the standards that govern a sufficiency determination.

Unknown Speaker: Well, relevance has... has... has... I don't see how that can be.

Whether... whether what has been medically proven is relevant enough goes to both the... the... the Daubert determination and to the summary judgment determination.

Mr. Kuney: I would... I would agree that it's pertinent to both.

But I don't think it's clearly the case that the standard that a district court ought to use in making those decisions... either decision... is the same.

I believe that the "fit" prong under Daubert does come very close conceptually to what sufficiency of the evidence seems to be about.

I certainly would concede that.

And I... I believe that's, in effect, what you're pointing out--

Unknown Speaker: Yeah, but that... that's what troubles me about... about this case.

It seems to me things are getting unduly complicated, when... when we have what is virtually the same determinations of two different standards of review, depending upon which rubric the district court chooses to use.

Mr. Kuney: --I think that's really no different here than in any other area that... where an evidentiary ruling leads to summary judgment.

In... inevitably, you're left with, if the district court decides the evidentiary ruling adverse to the Plaintiff, and then the summary judgment decision really is nothing other than the... the cupboard is bare, because there is no admissible evidence, then there is de novo review of summary judgment.

And that, admittedly, is not a very intensive exercise.

But I think that's not a problem unique to the admissibility of expert testimony.

Unknown Speaker: Is... is it fairly common in... in cases now to have these evidentiary questions of admissibility of expert testimony thrashed out in limine or be... before the case goes to trial, and then have a motion for summary judgment based on the court's decision?

Mr. Kuney: Absolutely.

The courts have... have really developed a variety of procedural vehicles.

In some circuits, they virtually require an evidentiary hearing.

In other cases, it's simply done by motion.

But, increasingly, judges are resolving these issues in advance of trial, both to decide whether summary judgment is appropriate and so that before the trial unfolds, the parties will know what evidence is going to be before the factfinder and what evidence is not.

Unknown Speaker: And in that process... in that process, do they consider conflicting expert testimony, so the defense experts advise the judge of why they think the methodology is flawed, et cetera?

Mr. Kuney: The procedure typically involves a motion in limine to exclude and a motion for summary judgment.

And in the course of that motion in limine to exclude, the party seeking the exclusion will put on whatever contrary evidence it has that it believes identifies the methodological flaws.

Unknown Speaker: The Respondents said that the methodology that their experts used and that was rejected was the same methodology that your experts used.

Is... is the answer to that, that that may be true, but the methodology lead your experts to conclude that there was no cau... causal link or... I mean, I'm not quite... quite sure how to respond to that--

Mr. Kuney: Justice Kennedy, I think the answer to that is no, the methodology used was not the same.

There was testimony in the record before the district court from the defense experts about appropriate methodology with respect to interpretation of animal studies, about a recognized set of criteria that can be applied to a variety of epidemiological data to assess causation, and there is no overlap with respect to that methodology between the methodology that Defendants put forward and the methodology of Plaintiffs' experts.

Mr. Chief Justice, I'd like to reserve any remaining time for rebuttal.

Unknown Speaker: --Very well, Mr. Kuney.

Mr. Wallace.

Argument of Lawrence G. Wallace

Mr. Wallace: Thank you, Mr. Chief Justice, and may it please the Court:

The gatekeeper role that this Court prescribed in Daubert, as we understand it and as the terms of Rule 702 suggest, applies to the testimony of the expert and whether that testimony should be allowed, not just to the question of what studies the expert can advert to... and usually these are studies done by others, not by himself... but what he can say about those studies.

Part of the scientific methodology is scientific reasoning, what conclusions are scien... scientifically, can be said to follow, or at least arguably to follow, from the premises one has.

Many scientists could be found who could describe published studies conducted by others, but the experts are selected by the parties on the basis of what's important in the case, what inferences they're willing to draw from the published studies, and how they're willing to relate those inferences to the case.

And what... what counts in these cases, in the gatekeeping function, is to separate what is scientific reasoning and worthy of consideration under Rule 702 from what is not supported by scientific reasoning and relating published studies to the issues in the case, and therefore should not be submitted to the jury.

That is a question based on what is proper scientific reasoning rather than quite the same legal question that Justice Scalia was adverting to in what is sufficient evidence to support a judgement.

And this, as Respondents concede, is a very contextual, fact-intensive question.

We point out in foot... footnote 8, on page 18 of our brief, that there are legal situations in which the question before the court is whether there is a risk to public health or a danger to the environment, including a danger to animal habitats, which would make certain studies relevant in inferences that can be drawn through scientific reasoning to the ultimate issue in the case; quite a different ultimate issue from what's involved here, which is not preventing conduct that may be harmful in a general sense, but trying to determine whether it is more probable than not that a particular person's injury was caused by the defendant.

Unknown Speaker: Mr. Wallace, when you say more probable than not... and we... we have... we do have a Seventh Amendment, we do have questions of fact that go to a jury... so this gatekeeping function has to be on the law side, otherwise it trenches on the Seventh Amendment.

So, now, when you talk more probable than not, that sounds like fact territory to me.

Mr. Wallace: Well, I... I... I'm not saying that... that that is the question for the judge to decide in... in determining admissibility.

That is... but that is the... the question that is before the jury, if the case goes to the jury.

And, therefore, in deciding whether there is a sufficient link between the foundation... the premises on which the expert is to draw and the inferences that he is willing to draw from them and... and put before the jury, one has to keep in mind what it is that scientific reasoning has to relate to.

And--

Unknown Speaker: Yes, but that goes to the summary judgment determination and not to the determination of whether it's properly admissible.

I assume it is properly admissible if it... if it goes even that far, even a little bit, to render... to render the conclusion more probable than not.

Mr. Wallace: --Well, the... the--

Unknown Speaker: And if it does that, it's admitted.

But I... I really don't understand your position that... that somehow environmental cases are a favored class of cases and junk science is okay for environmental cases, but not for... not for an ordinary tort suit.

Mr. Wallace: --Well--

Unknown Speaker: I mean, if it's good for one, it's good for both, it seems to me.

Mr. Wallace: --Well, we're not... I... I wouldn't consider what I was referring to as junk science.

It... it... it is whether there is a sufficient indication that a... a danger to the public health should not be risked.

That is quite a different question--

Unknown Speaker: It's a summary judgment question, not the admissibility or inadmissibility question.

Mr. Wallace: --Well, the... but the logical extension of that is that so long as a study can be said to have been published and conducted so far as appears, according to scientific methodology, any study can be admitted in any case, as long as you can find a qualified expert who is willing to say that I would draw a conclusion from this study that relates to this... to the issue before this case.

There's... there would be no gatekeeping at all to exclude studies.

And... and Daubert would be, essentially, overruled.

The... the process of scientific reasoning in drawing inferences from studies and whether there is too great an analytical gap between the premises and the conclusions that that expert is going to testify to has to be part of the gatekeeping if it's to be meaningful.

Unknown Speaker: Any other categories of cases besides public health cases and environmental cases... they're one category... and... and private tort cases are another.

Mr. Wallace: No, not at all.

But it... it--

Unknown Speaker: Are there a third, fourth and fifth categories?

Mr. Wallace: --That's only part of the context.

One could pose a... a hypothetical in a tort case where there had been an epidemiological study that provided a basis for linking, in a... in a... the cause here to a human injury, and then these very same animal studies could be adverted to in the testimony.

One could... the counsel could ask the expert, well, do you know of any other studies relating to this substance?

And he can... could... re... refer to the animal studies, and then explain why he thinks the results are consistent with the conclusion that he draws from the epidemiological studies.

It might not be very important evidence, but it would be... but he couldn't draw the inference that the district court found not to be supported--

Unknown Speaker: I... I--

Mr. Wallace: --that these particular animal studies showed something about cause of a... of a disease in humans.

Unknown Speaker: --May I ask--

--I--

--Well, go... go--

--I'll just take... your last point was that a particular study might show, out of 2.2 million people who die every year, a thousand die of chem... cancer caused by chemical X.

That's the EPA study.

That would be perhaps ground for limiting it.

It wouldn't be ground for saying that this person, 1 of 500,000 to die of cancer, died of chemical X.

Is that the point?

Mr. Wallace: That... that... that... that very well could be the point.

You have to--

Unknown Speaker: Well, it could not be the point.

He is... he is putting the summary judgment question.

You are saying this is not the summary judgment question; it is the admissibility question.

You would admit that... that evidence in one case and you would not admit it in the other.

Isn't... isn't that what you're saying?

And it seems to me, the... the evidence is just as solid scientific evidence in both cases.

But it isn't helpful to the jury.

Mr. Wallace: --Yes, it has to be evidence that would assist the jury, under the terms of Rule 702--

Unknown Speaker: Well, but let me... let me... let me ask another question--

Mr. Wallace: --with the question that is before them.

It's not just a question of whether it's scientific.

Unknown Speaker: --Supposing the... the scientist test... is willing to testify that exposure to PCP's for an hour is... that 1 out of a thousand people will get cancer from that.

Is... that would be admissible under your view in the environmental case; would it be admissible in the causation case?

Mr. Wallace: Well, I... I... I think that's a hard question to answer.

Unknown Speaker: Well, I do, too.

Mr. Wallace: That... that... and... and certainly a much closer question than what was before the district court here, which was testifying about possible effects on humans from animal studies involving higher doses than... than would have been involved in this case.

There has to be some threshold--

Unknown Speaker: But... but if... if... if it's--

Mr. Wallace: --where--

Unknown Speaker: --well, is the threshold that there is... there is no... no probability that there is some causal connection or that the probability is... is so re... so remote, 1 out of 100,000 cases, then it doesn't come in, but for 1 out of a thousand it does; is that what you're saying?

Mr. Wallace: --I would say that that, too, is a contextual question that has to be answered in light of the evidence.

We happen to be dealing with a case here--

Unknown Speaker: Well, I'm giving you the--

Mr. Wallace: --in which there was strong evidence of other causative factors.

And if you try to add in testimony about a particular chemical, where it's only 1 in--

Unknown Speaker: --You're suggesting, if there had been no evidence in this record that the man smoked or had any family history of cancer, then it might have been admissible?

Mr. Wallace: --Well, certainly, a lower threshold would be appropriate there than where you've got a slim chance that the chemical caused it, and... and a lot of evidence of other things.

Unknown Speaker: Thank you, Mr. Wallace.

Mr. Gottesman.

Argument of Michael H. Gottesman

Mr. Gottesman: Mr. Chief Justice, may it please the Court:

There are certainly some serious disagreements between the parties here, but there are a number of areas of agreement.

And I'd like to begin with those, because I think they may narrow the focus of the very questions the Court has been asking.

First of all, I... I do want to make it clear, it's only a piece of the court of appeals reversal that is here.

That is, the Plaintiffs contended that the Plaintiff was exposed to three chemicals.

The court of appeals held as a triable issue a fact on that.

That was not an iss... a ruling that turned on the admissibility of scientific evidence.

And, indeed, as Respondents acknowledge at page 20... I'm sorry... as Petitioners acknowledge at page 20 of their reply brief, the district court has not ruled the expert testimony inadmissible with respect to all three chemicals.

So--

Unknown Speaker: I wondered about that.

What I read the district court saying was... he said, at a point in his opinion, assuming that Plaintiffs' experts have not made unfounded assumptions about furans and dioxins... that, I take it, is on the assumption that he thought there were furans, that they thought there were... you know, that there were furans and dioxins... Defendants still persuade the court that Plaintiffs' expert testimony would not be admissible.

Now, he doesn't say some of it.

He... he says the expert testimony... the experts who are going to testify about particular things.

He says, assuming I'm wrong, says the judge, about furans and dioxins, still it would not be admissible.

I take him to mean what he said.

Mr. Gottesman: --No, I don't think, Your Honor, respectfully, that that is what he meant.

What he said was the experts assumed that all three chemicals were present and that Plaintiff was exposed to them.

But assuming that I accepted their testimony as testimony about PCB alone, it would not be acceptable.

That's--

Unknown Speaker: But I didn't see any... any words.

Mr. Gottesman: --Well--

Unknown Speaker: I just... oh, the only words that I found relevant were the words that I read to you.

Mr. Gottesman: --Yes.

Unknown Speaker: Now, are there some other words there that are relevant?

Mr. Gottesman: Well, let me make clear, the... the Defendants did not move to deny the expert's testimony on all three substances.

Indeed, their very reason for arguing that you can't claim cau... that... that there is a promotion of cancer by PCB alone is that the studies the experts were relying on included people who were exposed to furans and dioxins.

And said they... therefore, if we're right, that this Plaintiff was not exposed to furans and dioxins, then that testimony is not--

Unknown Speaker: I'll go back and look again.

I looked through the record.

Mr. Gottesman: --Yes.

But I... I ask Your Honor--

Unknown Speaker: And I just found a motion for summary judgment, a motion to exclude testimony, some answers to it, and I didn't see all these fine distinctions being made in those papers.

Mr. Gottesman: --Well, I think, if you--

Unknown Speaker: But I'll go back and read them again.

Mr. Gottesman: --if Your Honor will just look at page 20 of Respond... of Petitioner's reply brief, they expressly say the district court did not rule on the admissibility of the testimony with respect to three chemicals.

And I tell you--

Unknown Speaker: Well... well, is there something to be... to go the jury still?

Mr. Gottesman: --Pardon... well, absolutely.

Because now the court of appeals has found there's a triable--

Unknown Speaker: No, no, no.

If... if the court of appeals is reversed, and if the district judge's order is upheld, are there now issues to go to the jury?

Mr. Gottesman: --Yes, indeed.

Well, that's the point that I started out wanting to make.

The portion of the court of appeals opinion that said that there is a triable issue, that the... that Mr. Joiner was exposed to dioxins and furans, is not here.

Respondent acknowledges that at page 20 of his brief.

That's not here because that had nothing to do with it.

Unknown Speaker: Well, but if... if you can't show causation, why... why go to the jury?

I mean, you have to exposure, plus causation.

And if he rules--

Mr. Gottesman: Well, of course--

Unknown Speaker: --that you cannot show causation based on this testimony, isn't that the end of the case?

Mr. Gottesman: --But the district court has not ruled that the scientist's testimony is inadmissible if it is assumed that Mr. Joiner was exposed to all three chemicals.

The district court--

Unknown Speaker: The district... the district court did grant summary judgment.

Mr. Gottesman: --Yes.

Unknown Speaker: And so there would have to be some sort of reversal by the court of appeals that would leave something left for the jury?

Mr. Gottesman: Of course.

Yes, Your Honor.

Unknown Speaker: And what is it on page 20 that... of the Petitioner's brief that you say is... where they agree with your position?

Mr. Gottesman: On their reply brief.

They say... this is in the first full paragraph... the court of appeals added that it... in its view, there was a genuine factual dispute over whether furans and dioxins could have been present in the fluid to which Mr. Joiner was exposed.

It never reached the question of whether opinions of causation by furans or dioxins would be admissible, because the district court had not done so.

Unknown Speaker: That doesn't strike me as crystal clear, but per... perhaps, in context, it--

Mr. Gottesman: Well, let... let me back up for a minute, because this is just terribly important to us, obviously.

They moved for summary judgment and they made two points.

Contrary to the claims of the Plaintiffs, Mr. Joiner was not exposed to furans and dioxins.

Therefore, they said, he was only exposed to PCB's.

And the testimony of Plaintiffs' experts wou... is not admissible on the basis of PCB exposure alone.

They never said that if Mr. Joiner was exposed to all three chemicals that the testimony would not be admissible.

Unknown Speaker: --But, I mean, normally, as a... as a reviewing judge in a court of appeals, I'd look at the summary judgment, I'd look at what the motions were below, I'd look at what they actually argued.

So if you want me, I'll go back and do that.

I'm just saying, when I did it briefly, I didn't notice these fine distinctions being made.

Mr. Gottesman: Well, Your Honor--

Unknown Speaker: And... where, in other words, they're saying... you... you believe, if I look at those papers again, I'll find that they say, oh, no matter even if we win this in the court of appeals, we concede that we still have to go back and have a trial on the furans and dioxins; that they said that in those papers?

Mr. Gottesman: --That the court of appeals expressly--

Unknown Speaker: I don't know the court of appeals.

I'm not talking about that.

But I'm saying whether or not... you're saying now that somehow this case, given the summary judgment, et cetera, they're conceding that they have to go back and have a trial on furans and dioxins, is that right?

Mr. Gottesman: --That's correct.

Unknown Speaker: All right.

And I'll find that in their papers before the court of appeals?

Mr. Gottesman: Yes.

Well, you'll find it--

Unknown Speaker: I haven't so far.

Mr. Gottesman: --in their papers here.

Unknown Speaker: And I... I still find that hard to square with the language that I believe Justice Breyer quote... quoted to you.

And it's at the top of 58a of the appendix.

Mr. Gottesman: Yes.

Unknown Speaker: It said, Defendants still persuade the court that Plaintiffs' expert testimony would not be admissible.

Mr. Gottesman: Yes.

Unknown Speaker: Can you proceed to the trial without this expert testimony?

Mr. Gottesman: No.

No.

Unknown Speaker: But you're saying they... they're conceding that it would be admissible in respect to furans and dioxins if there's an issue there, but not... I mean, this is a fine distinction; that's why I looked at the papers... and you're going to tell me now... perhaps you have the citation... where this was all argued before the court of appeals on this kind of hypothesis.

Isn't it even narrower than that... that the district judge has not yet ruled on whether the testimony would be admissible if the record showed all three chem... chemicals?

Mr. Gottesman: That's correct, Your Honor.

Unknown Speaker: So we don't know what ruling he might make.

Mr. Gottesman: Exactly.

There is nothing--

Unknown Speaker: So they haven't conceded you go to trial; they concede there need to be further proceedings in the district court.

Mr. Gottesman: --Yes.

That's--

Unknown Speaker: Well, when I used to be on the court of appeals, if there was this complicated thing, the parties had to point it out.

That's why, normally, I would just take the issue of unadmissibility to be it's inadmissible.

Mr. Gottesman: --Well--

Unknown Speaker: Now, if there is this distinction made, I want to be sure I focus on it in the court of appeals.

Mr. Gottesman: --Well, Your Honor, as they acknowledged, the district court never ruled on the admissibility.

Unknown Speaker: Did someone ask--

--Do you object to summary judgment, then?

I mean, if... if--

Mr. Gottesman: Of course.

And--

Unknown Speaker: --On that ground?

Mr. Gottesman: --Yes.

Unknown Speaker: That... that even assuming that the district court was right about the exclusion, that summary judgment still should not have been granted?

Mr. Gottesman: Yes.

Unknown Speaker: In other words, you asked the judge this, the district judge--

Mr. Gottesman: I'm sorry--

Unknown Speaker: --and he didn't make a ruling on it, even though he was asked to make a ruling on it?

Mr. Gottesman: --He was not asked to make a ruling, because they did not contend it was not admissible.

Unknown Speaker: If he... if he... he granted summary judgment.

Mr. Gottesman: Yes.

Unknown Speaker: He made a ruling of inadmissibility.

That, I would think, would be the end of it normally.

I don't hypothesize what... what he would have done on something that nobody asked him to do.

Mr. Gottesman: That's... well, he was... he did not... it's a she... the district judge did not answer the question of whether the testimony with respect to all three chemicals was admissible.

Unknown Speaker: Mr. Gottesman, I think... tell me if my understanding is correct.

She said this man wasn't exposed to furans and dioxins.

Mr. Gottesman: Yes.

Unknown Speaker: Was exposed to PCB, but not furans and dioxins.

And that was her ruling and that's why she looked at the admission only with respect to PCB.

Mr. Gottesman: That's correct.

Unknown Speaker: Then, on appeal, you got her reversed twice.

You got her reversed for saying there wasn't enough evidence of the furans and dioxins.

Mr. Gottesman: Correct.

Unknown Speaker: And then you got her reversed on the admissibility... the threshold admissibility question.

Mr. Gottesman: That's right.

Unknown Speaker: So you lost before her on the dioxins and furans.

Mr. Gottesman: Correct.

Unknown Speaker: You appealed that and you prevailed on that.

Mr. Gottesman: Correct.

Unknown Speaker: And that's the piece of this case that isn't before us, right?

Mr. Gottesman: That's correct, Your Honor.

As is the testimony of the experts that exposure to those chemicals promoted the cancer that Mr. Joiner experienced... a point that the district court had never itself ruled on.

Unknown Speaker: But the district court, on remand, might say, all right, I was wrong about the Plaintiff not having been exposed to furans and dioxins; nonetheless, considering all three chemicals together, I still conclude that the expert testimony should not be admitted.

Mr. Gottesman: Well, that is a possibility.

Of course, the Defendants have never argued to the district court that it would be inadmissible, assuming all three were there.

But if they made such an argument and if the district court were willing to entertain a second motion, that would be possible there.

But the ruling that is up here is the portion of the court of appeals ruling that says, even if the Plaintiff was only exposed to PCB's; that is, even if the jury ultimately determined--

Unknown Speaker: Yeah, but isn't--

Mr. Gottesman: --that the Plaintiff was... was exposed.

Unknown Speaker: --Mr. Gottesman, getting back to what is really the main of... of the petition and your response, I guess, if you... if you look again at 4a of the petition, where the district... which has been referred to by my... some of my colleagues, the... the court of appeals says, towards the bottom, because the Federal Rules of Evidence governing expert testimony display a preference for admissibility, we apply a particularly stringent standard of review to the trial judge's exclusion of expert testimony.

Do you agree with that statement?

Mr. Gottesman: Not as it is precisely stated.

And I want... that's part of where I said there is some agreement between the parties that will narrow the issues.

We do not contend that there are two different tiers of abuse of discretion review.

There is one standard of review; it is abuse of discretion.

We also do not believe that it is a one-way factor whether a court takes a close look at a case.

Just as Judge Becker and this Court have said, that when evidence in a Daubert-type proceeding is excluded, we ought to take a close look, Judges Higginbotham, in the Fifth Circuit, Judge Buckley in the D.C. Circuit, and a third court, as well, have said, because these are such important rulings, these rulings inevitably decide the fate of a case when it's a toxic tort case; because expert testimony is crucial to the existence or nonexistence of the case.

These are not just ordinary rulings.

These are really important rulings.

They deserve more careful attention.

And what we argue for is the formulation not of the sentence as stated by the majority, but actually the sentence as it is stated by the dissenting judge in this case, who, on this point, I'm not sure was disagreeing with the majority.

What Judge Smith was saying... and it's on page 18 of the appendix to the cert petition... and I'll quote it, because this is all that we contend for as to the appropriate role of appellate courts: In applying a particularly stringent--

Unknown Speaker: Whereabouts on the page are you, Mr. Gottesman?

Mr. Gottesman: --Pardon?

Unknown Speaker: Whereabouts on the page are you?

Mr. Gottesman: I'm sorry.

This is the last paragraph on page 18a.

It begins the paragraph.

And on this point, we think Judge Smith is really just explaining.

He says he's explaining what the standard is that the majority has asserted.

In applying a particularly stringent review, we do not change the threshold of review, but conduct a searching review of the record... that is, take a hard look... while maintaining the proper standard of review.

Unknown Speaker: Well, now, isn't that a certain amount of gobbledy-goop?

[Laughter]

Mr. Gottesman: I don't think so, Your Honor.

I think what it is, is saying is there are some cases where we are going to devote more resources to analyzing the claim that a party has brought to us; that there has been an abuse of discretion--

Unknown Speaker: But... but you think, nonetheless, Judge Smith's view and the majority's view is that perhaps the... the district court could have ruled either way and still be affirmed?

That's, to me, what abuse of discretion means.

Mr. Gottesman: --Well, in appropriate cases, that may be true.

Unknown Speaker: Yes.

Not always certainly.

Mr. Gottesman: But... and, indeed, the court said this is not such a case.

And I want to get to that for a moment.

Unknown Speaker: But Judge Smith, of course, although you say you agree with the standard of review he espoused, said he would have affirmed the decision.

Mr. Gottesman: That's correct.

And, obviously, we don't agree with that portion of the decision.

[Laughter]

Unknown Speaker: The phrase D.C. Circuit cases involving review of administrative determinations which are supposed to be made on an arbitrary or capricious basis, equivalent to abuse of discretion probably.

Mr. Gottesman: Right.

Unknown Speaker: And it was generally agreed among administrative law pra... practitioners that "hard luck" meant not arbitrary and capricious, but... but, indeed, a different standard.

Mr. Gottesman: Well, we are--

Unknown Speaker: You almost never won the hard luck cases.

Mr. Gottesman: --Okay.

We... we think that that is... that... that... we think this and only this: that this Court ought not to tell the appellate courts at this stage of the development of Daubert and its application that you should not look carefully at cases where these things come to you.

We think it's important that they do look carefully.

Unknown Speaker: Well, is this... you're arguing... arguing for a standard that is somewhat different than the ordinary review of a trial court's evidentiary rulings, aren't you?

Mr. Gottesman: Well, as the Chief Justice--

Unknown Speaker: I mean, a trial judge has to sit on the bench and make numerous rulings on the admissibility of evidence--

Mr. Gottesman: --Of course.

Unknown Speaker: --as a trial proceeds.

Mr. Gottesman: Indeed.

Unknown Speaker: And in the normal case, we apply an abuse of discretion standard to reviewing those judgments and decisions, which have to be made very quickly and--

Mr. Gottesman: Indeed.

Unknown Speaker: --it's a tough deal for the trial judge.

And I think, in general, appellate courts have recognized that difficulty and have tended not to upset those rulings unless it's... it's clearly an abuse of discretion.

But you want some more searching review applied to the exclusion of expert testimony.

Mr. Gottesman: The exclusion or the admission when the admission also means that a trial will go forward that otherwise would not.

Unknown Speaker: Right.

Right.

Mr. Gottesman: That is--

Unknown Speaker: Well, when you say "more searching review"... when you say "devote more resources", would it comply with that if the judges on the appellate panel simply say, well, I'm really going to go over this record, you know, and I'm going to read it twice, perhaps--

[Laughter]

--and then simply apply the abuse of discretion standard?

Mr. Gottesman: --That's all we're contending for, Your Honor.

Unknown Speaker: Abuse of discretion, with teeth.

[Laughter]

Mr. Gottesman: Well, I would say, with eyes, but yes.

[Laughter]

Unknown Speaker: And so we... we could have hard luck cases and lick and a promise cases, right?

[Laughter]

Mr. Gottesman: Well, I think, realistically, Your Honor--

Unknown Speaker: I mean, this... this... this assumes that in other cases judges just sort of flip through the record, you know, fan the pages.

[Laughter]

Mr. Gottesman: --Well, Your... Your Honor--

Unknown Speaker: Shouldn't... shouldn't we take a hard look in all cases?

Why... why limit a hard luck to... to just these cases?

Mr. Gottesman: --Well--

Unknown Speaker: It seems to me one should be very careful in every case.

Mr. Gottesman: --Well, and... and we wrote that in our brief, Your Honor.

Unknown Speaker: Good.

Mr. Gottesman: And we said, in an ideal world, that's what appellate courts would do.

But as--

Unknown Speaker: We live in an ideal world here.

Mr. Gottesman: --But as--

[Laughter]

An ideal world, with limited resources, Your Honor.

As Justice O'Connor said, judges make a myriad of decisions every day, and they have to make them on the spot.

And, understandably, courts of appeals are going to be quite deferential to those rulings.

But this kind of a ruling is not made that way.

This kind of a ruling is made on an elaborate record.

Now, the judge, to be sure, did not hold a hearing here or even receive an argument from the lawyers, but the judge had very extended papers and wrote a full opinion.

And this was something which was not just one of those snap decisions that judges have to make.

Unknown Speaker: Mr. Gottesman, as you understand the hard look, it works for the defendants and the plaintiffs equally, whether it's admission or exclusion.

But that's not the way I read Judge Marquette's opinion.

She... she relies on the... the presumption in favor of admissibility in the... in her opinion.

Mr. Gottesman: Yes, I agree with that, Your Honor.

And so we are not defending the notion that it should be limited to--

Unknown Speaker: I see.

So you don't defend her reason for the hard look?

Mr. Gottesman: --No.

We would put together the... the views of Judge Becker on the Third Circuit and Judge Marquette, which is that when you exclude it in a case like this, it deserves the hard look--

Unknown Speaker: And--

Mr. Gottesman: --with the views of Judge Higginbotham and Judge Buckley and others that when you admit it in a case where it makes the whole difference between a trial or not, we should look at it more closely.

Unknown Speaker: --Oh, well, wait just a minute.

Well--

--You do--

--a... a hard look... it... it's... your hard look, then, is limited to summary judgment proceedings?

Mr. Gottesman: It's limited to evidentiary rulings which have a profound impact on the case.

The most--

Unknown Speaker: Well, what if... what if it... it... it could have profound impact, I take it, even though... supposing that the trial judge excludes important evidentiary testimony.

Now, that doesn't result in his granting a judgment for the defendant at the end of the trial, but it has a significant effect on what you can argue to the jury.

Does that kind of a ruling deserve a hard look?

Mr. Gottesman: --I would think not.

Certainly, it is not as strong a case for one as one where the judge says this case is over and it's over now; I'm granting summary judgment because of the ruling that I make.

And I also think the fact that Daubert is a new and difficult enterprise for courts suggests some more room for appellate observation of what's happening and... and elaboration.

And let me--

Unknown Speaker: That's... that's... that's... I'd just like to follow up on the Chief Justice's question, because that's what I wasn't certain about.

Are you saying that a decision to exclude evidence or to admit evidence or a certain sort, an appellate court does the same job with it all the time, whether it's plaintiff's or defendant's, whether it's admitted or excluded prior to trial or after trial, whether summary judgment is at stake or de novo is at stake, are all those to be the same in your mind, or are you saying that it's different, depending upon whether the trial would take place or the trial was over?

Mr. Gottesman: --I think that I am saying something that's in between those.

That is, that appellate courts should be free, when they feel a really... a ruling was really important to the outcome of the case, to look closely at the claims of the parties.

Unknown Speaker: All right.

So that... but there is not... that's... that you're saying is true whether there was a trial or wasn't a trial.

Mr. Gottesman: That's right.

Unknown Speaker: It has nothing to do with summary judgment.

Mr. Gottesman: That's right.

Unknown Speaker: It's just a fact of judicial mentality--

Mr. Gottesman: Exactly.

Unknown Speaker: --and not a rule of law.

Mr. Gottesman: What we are articulating is not a legal principle; it is a... an observation about the allocation of appellate resources, which judges now, on five circuits, have felt it important to articulate.

Unknown Speaker: Oh, well, that's the part I don't know about.

Because once you articulate it in a rule of evidence or an opinion, it becomes a rule of law.

And I don't know how you'd write such a thing into a rule of law.

How... do you have an idea for that?

Mr. Gottesman: I'm not sure that it should be written as a rule of law.

That is, I think that these courts of appeal should be allowed to say this, and that you should not be offended that they say it.

Unknown Speaker: Kind of harmless error?

Mr. Gottesman: Harmless error.

[Laughter]

Not error.

Harmless non-error, Your Honor.

Now, what I'd like to do--

Unknown Speaker: It sounds like you want an abuse of discretion standard for our review of court of appeals decisions reviewing abuse of discretion at the trial level.

[Laughter]

Mr. Gottesman: --Well, let me address, Your Honor, the application in this case... what it is that the court of appeals actually complained about that the district court did, which we believe is a ruling of legal error and, thus, not affected by that sentence.

And the Solicitor General, in... in his brief, also said that the court of appeals believed that it had found a legal error.

To understand it, I have to spend 1 minute setting out what the methodology is that the experts were employing in this case, and then how the district court decided the case.

The experts were applying a methodology which is well established in the scientific method.

It is known as the weight of evidence methodology.

That is, in areas where science has not arrived at absolute certainty, how do we make probablistic estimates of whether something is causing or contributing to an injury or not?

And there are well-established protocols for this.

They were developed initially by scientists at the EPA, and were then peer reviewed by university and industry scientists and, ultimately, published as the EPA's guidelines.

There are similar guidelines for the World Health Organization, also developed by scientists.

And there is a prescribed protocol that one uses in going about a weight of the evidence methodology.

If you look at the district court's opinion... and this is what the court of appeals said about it... nowhere does the district court acknowledge that the methodology being used here is weight of the evidence methodology.

Nowhere does the district court said, it's wrong to use that methodology here.

Nowhere does the district court said, well, it was right to use that methodology, but you didn't apply it properly here.

Instead, all that the district court did was say, bring on your individual pieces of evidence one at a time.

I will look at each one under the microscope.

I will decide whether you can go to a jury on a claim that this piece of evidence causes or promotes lung cancer in smokers.

And if you look, for example, she started with the evidence of animal studies.

And she discussed that at pages 58 to 62 in the appendix.

And then she says, no, you can't find it from the animal studies, and she sweeps them off the table.

We never hear about them again.

Then she starts with the epidemiological studies, the human epidemiological studies, at least two of which found statistically significant evidence of an increase of lung cancer from exposure to PCB's, and others of which found accelerated incidence of lung cancer, even though the sample sizes weren't large enough to find statistical significance.

She critiques each of those, pushes it aside.

She ignores entirely other aspects of what the weight of evidence methodology requires.

Unknown Speaker: But... excuse me, before you go... are you saying that if you have five studies that do not show a statistically significant difference, you can admit all five, although each one would not be admitted?

Is that what the weight of evid--

Mr. Gottesman: Yes.

And the weight of evidence methodology contemplates that.

Statistical significance requires confidence at an extraordinarily high level.

It does not correlate with the likelier than not burden of proof, which is what the law requires.

And so, scientists have written extensively... we have a footnote in our brief, where we cite--

Unknown Speaker: --Well, and I take it the... you presented all this argument to the district court, the... the weight of the evidence and that sort of thing--

Mr. Gottesman: --Yes.

Unknown Speaker: --that the... the whole equals more than the sum of its parts, I take it?

Mr. Gottesman: Exactly.

Exactly.

But the district court never acknowledges that that's even what's going on here.

The district judge just goes through, one after another, the individual items of evidence.

And then, at the end, says, the studies simply do not support the expert's position that PCB's, more probably than not--

Unknown Speaker: All right.

It sounds as if he's saying the studies... I mean, I've written things like that myself a lot.

You go through seven pieces of evidence and you say the evidence doesn't support it.

It means individually or... individually or taken together.

Mr. Gottesman: --Well, but that's a ruling on the sufficiency.

Unknown Speaker: So the question would be, has he abused his discretion in saying, taken together, I don't think these studies will help the jury?

That's what he said.

Mr. Gottesman: Well--

Unknown Speaker: I don't think they'll help the jury enough to award... to admit them.

Mr. Gottesman: --Okay.

Here's... the court of appeals said two things about that.

These were its rulings about how the district court proceeded.

And, incidentally, the district court ignored much of the evidence that went into the weight of evidence thing, including, for example, that PCB's are ingested and the place in the body where they locate themselves is the lungs.

That is where... the lung tissue is where PCB's de... deposit themselves.

And that other chemicals that are similar to PCB's have been found to have high incidence of lung cancer.

The dis... the district court ends with this statement that I just read.

The court of appeals said two things about that.

Number one, said the court of appeals, you've just made a statement about the sufficiency of the evidence.

You have not said that science... the... the scientific methodology is improper.

You have not cited anything that suggests that scientists are not allowed to take this body of evidence and get to this conclusion.

You've just said that you don't think you can get from this body of evidence to this conclusion.

And, indeed, that is exactly what did happen.

Because the Defendants introduced no scientist who said that the Plaintiffs have taken steps, that it is impermissible, applying the proper scientific method, to take.

Unknown Speaker: Well, was the... was this a methodological conclusion or a relevance conclusion?

Maybe the district court was saying the methodology is fine for what it purports to do.

But it does not provide a sufficient predicate for use in reasoning to a conclusion about cause in humans.

Maybe that's what the district court was doing.

And if it was doing that, it seems to me, number one, that was not committing any legal error.

And, number two, it was making a judgment, ultimately, about what the jury could find helpful that should be subject to abuse of discretion review.

Would you agree?

Mr. Gottesman: I think not, Your Honor.

And let me suggest why.

I think there are two problems with that.

If the district court says there is scientific disapproval of this step.

That is, the scientific methodology does not permit this step from these premises to that conclusion.

That might be a... a consideration of methodology.

But the district court did not say that and could not say that, because there was no record made that suggested that this was not permissible scientific methodology.

Unknown Speaker: That's fine.

That... that... that shows that the district court was relying on relevance rather than methodology.

Mr. Gottesman: The district court was relying on sufficiency.

The district court was saying, you can put your evidence on, but I don't believe it.

Unknown Speaker: Well, do you--

--Well--

--do you agree that the... do you agree that the district court must inquire both as to the adequacy, the soundness of the methodology, its predictability, and the relation of that methodology to the issues before the jury?

Mr. Gottesman: Yes.

Unknown Speaker: All right.

And the experts have to show that link by their studies, do they not?

Mr. Gottesman: Yes.

Unknown Speaker: And isn't all the district judge did here was to find that there was no link?

Mr. Gottesman: Well, the district court said there is no link; yes.

But the district court did not--

Unknown Speaker: And... and that's within the purview of the district... of the district court, if the district court is... is... is correct.

If he... he abuses his discretion, or her discretion, then we reverse.

But that's within the discretion of the trial court, is it not?

Mr. Gottesman: --That is where we would disagree, Your Honor.

And that is where the court of appeals disagreed.

The court of appeals said, as Daubert makes clear, the district court may not decide whether the experts' opinions are correct, but merely whether the bases supporting the conclusion are reliable.

Unknown Speaker: But, Mr. Gottesman, it seems to me that... that maybe the methodology prong is just a red herring.

But if the weight of the evidence is an accepted methodology, it would always be passed that threshold if the expert just said, I considered everything and came to this conclusion.

Mr. Gottesman: Well, I... we believe, Your Honor, that it can be encompassed within the methodology inquiry for the defendant to come forward with scientific evidence that says you can't get from A to B... not just that I, the competing scientist, disagree... because scientists disagree all the time... but that the range of permissible scientific methodology, that which is regarded as good science, does not allow you to go from A to B.

Unknown Speaker: But is there really much difference between the first and second position that you just described?

Mr. Gottesman: Yes.

And let me give you one very good example of that.

They point, in their reply brief, to the... the testimony of some of their witnesses... none of whom addressed the Plaintiffs' witnesses' testimony... and say, see, this shows your methodology is bad.

And they... several of the examples, on page 12 of their reply brief, are the testimony of Dr. Waddell at deposition.

Dr. Waddell was asked at that definition with respect to the very testimony they're citing: Is the view that you're stating here widely accepted in the scientific community?

This is on page 269 of the joint appendix.

And his response was: There are a number of senior scientists who see it the same way I do.

They probably, number-wise, are in the minority.

Now, that's their testimony: The view I'm expressing here is probably in the minority.

That's what they're citing to show that our scientists were not following the scientific method.

Unknown Speaker: Thank you, Mr. Gottesman.

Mr. Kuney, you have 3 minutes remaining.

Would you mind telling us if there's something left here to be tried when it goes back and whether the district court has to then make a determination whether to admit expert testimony if it is found that furans and dioxides were part of the expos... exposure?

Rebuttal of Steven R. Kuney

Mr. Kuney: Yes, Justice O'Connor, I believe it is technically correct that in the motion for summary judgment, the only argument Defendants put forward about furans and dioxins was that there had been no exposure.

So the district judge was not asked to rule upon whether opinions that accepted that exposure could meet the scientific requirements of Rule 702.

So that issue is left before the district court.

And then, if there is a trial, if the district court decides that there are admissible opinions that go to that point, it will be a very different trial than would otherwise take place.

Because the Plaintiffs would essentially have to win in front of the factfinder the furans and dioxins exposure point or the case would be over.

Unknown Speaker: Then are we... we're supposed to assume for argument's sakes that there is inadmissible... because one of the points you raised is that the court of appeals is wrong on its furans point... there isn't any evidence here that... that there were furans and dioxins.

Mr. Kuney: And... and--

Unknown Speaker: We're supposed to assume, for purposes of this case, that the court of appeals is right on that point.

So the bottom line, in... in your opinion, is we assume they're right, we remand to the court of appeals, and we ask the court of appeals to remand to the district court for consideration of furans and dioxins; is that the bottom line?

Mr. Kuney: --That's correct.

You... you could in... instruct the court of appeals that under of an abuse of discretion standard, which it should have applied, the district court's exclusion of the PCB opinions was clearly within the district court's discretion.

And so there's a reversal, and that... that opinion of the district court ought to be reinstated.

Since we did not technically challenge the furans and dioxins exposure point, that would still be a matter appropriate for further proceedings.

Unknown Speaker: I didn't see any evidence here on furans and dioxins on either side--

Mr. Kuney: Well, the... the--

Unknown Speaker: --except whether they were there.

Mr. Kuney: --the... the... the complication, Justice Breyer, is that the opinions of the experts, in fact, were necessary to the conclusions about whether there was exposure to furans and dioxins.

Unknown Speaker: Mmm-hmm.

Mr. Kuney: That's part of what really was left up for grabs when and if the parties return to the district court.

Unknown Speaker: I see.

Mr. Kuney: Let me just address a couple of points very briefly.

First, the notion that we need a modified standard of review to tell courts of appeals when to pay attention.

It... I believe it does con... convey the suggestion that somehow, under normal abuse of discretion, courts of appeals are not doing their job.

We already have Federal Rule of Evidence 103, which, in effect, says that there are certain evidentiary rulings that don't have a... an impact on a substantial right of the parties.

And those ought not be the grounds for error.

It seems that that's sufficient, and that what this Court does not want to do is endorse the notion of the court of appeals that some kind of extra language or extra message needs to be given to courts of appeals in this area.

You con... this Court considered, really, a very similar suggestion--

Chief Justice Rehnquist: Thank you, Mr. Kuney.

Mr. Kuney: --Thank you, Your Honor.

Chief Justice Rehnquist: The case is submitted.

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Amchem Products, Inc. v. Windsor - Oral Argument

Fri, 09 Jan 2009 14:50:10 +0000

Case:

Amchem Products, Inc. v. Windsor

Media File:

96-270_19970218-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Stephen M. Shapiro

Chief Justice Rehnquist: We'll hear argument next in Number 96-270, Amchem Products, Inc. v. George Windsor.

Mr. Shapiro.

Mr. Shapiro: Thank you, Mr. Chief Justice, and may it please the Court:

We're here today to contend that the Third Circuit was in error when it held that Rule 23 must be applied with a blind eye toward the settlement reached in this case.

In colorful language, the Third Circuit accused the district court and the proponents of the settlement of crafting a legislative solution to the asbestos crisis.

In fact, it was the Third Circuit that fashioned a new restriction on class actions that has no basis in the text of Rule 23.

The court declared broadly that Rule 23 must be applied without reference to settlement, and that settlement is an impermissible consideration, but the Third Circuit cited nothing in Rule 23 that says that the court lacks authority to consider settlement, and even some of the respondents now concede that the settlement should not be ignored.

We are not, of course, asking for any relaxation of the protections or the standards of Rule 23.

Unknown Speaker: Well, how about the limitations that are imposed by the Rules Enabling Act?

Mr. Shapiro: That no substantive changes should be made in the law.

Unknown Speaker: Yes, and that basically the rules have to be rules of procedure in a contemplated lawsuit.

Mr. Shapiro: Your Honor, this, of course, was a lawsuit, but there is no requirement in Rule 23 that the lawsuit has to be determined to be triable.

The rule uses generic language about issues being in common, about claims, but it doesn't say that the action has to be determined to be triable before the case can be certified for settlement and, indeed, we've had 30 years of practice now in the various courts of appeals where class actions settled... cases certified for settlement have been accepted by--

Unknown Speaker: Mr. Shapiro, has there been anything like this... I'm not aware that there has been, and particularly this case comes up because of an antisuit injunction that stops every court in the country, State and Federal, I take it, from dealing with any of these claims.

We have one group I think from California saying we could do much better on our own.

How can you say that it doesn't affect substantive rights?

Mr. Shapiro: --These people, of course, have the opportunity to opt out of the class.

Unknown Speaker: Well, that's a question.

Did they?

Mr. Shapiro: Yes, we believe they did.

The court found that they had been given notification that satisfied due process standards and, indeed, it was one of the most massive notifications in history.

Seven hundred thousand people received personal notifications through the mail, some 6 million people received notifications through union publications, there was television programming that included this warning, there was targeted newspaper coverage--

Unknown Speaker: Now that, what you're describing, may fit a common fraud where each person is affected to a small degree, but here you have a personal injury suit where the normal rule is, I can go it alone, and when a restriction is made on that and says no, you have to travel with all these other people, I really don't understand how that doesn't involve substantive rights.

Mr. Shapiro: --Well, Your Honor, there have been many cases, class action settlements, where injunctions have been entered after the case was settled to prevent splintering off, challenges to the class action settlement, provided that due process is satisfied in giving notification.

Unknown Speaker: Can you give me an example of a personal injury lawsuit where 20 defendants are saved from every court in the country continuing litigation?

I've seen that in the bankruptcy context, but I don't know of it outside that--

Mr. Shapiro: The Agent Orange case is an example like that, from the Second Circuit, where the manufacturers settled with a nationwide class of veterans from the Vietnam War, all of whom had been exposed.

Some had diseases, some did not, and the court protected that settlement with injunctive orders that prohibited relitigation of the issues settled in the class.

Unknown Speaker: --It enjoined every court in the country, as this antisuit injunction did?

Mr. Shapiro: Well, it entered ancillary injunctions against those that attempted to splinter off and relitigate.

Ever since this Court's decision in Supreme Tribe of Ben Hur v. Cobble it's been clear that if there's a class action settlement that satisfies due process the Court--

Unknown Speaker: Well, that's a big question.

The question is whether this notice... and other categories, it seems to me, are not quite as sprawling, and you don't have the problem of people who don't even know they're in the class, or if the impossibility for you, in fact, to identify someone who worked around asbestos, then went off to some other occupation, is no longer a member of a union that might give notice--

Mr. Shapiro: --Well, this, Your Honor, was what the witnesses described as the most massive notification campaign ever undertaken until this time, and it specifically identified the people who were in the class... occupational exposure to asbestos... and it was carried on for 3 months.

Unknown Speaker: --Does the class include people who do not now know that they were exposed?

Mr. Shapiro: It includes everybody who has occupational exposure.

Unknown Speaker: Whether they know about it now or not.

Mr. Shapiro: That's correct.

The court found--

Unknown Speaker: Now, how could any notice be adequate to those people?

I don't know I've been exposed, so you know, I... let's say I see a full page ad in the New York Times that says those who have been exposed to... you know, have to join this lawsuit, or pull out now, or forever hold your peace.

I don't even know that I've been exposed.

Mr. Shapiro: --The district court found that substantially everybody who has had occupational exposure knows it, because since 1972 OSHA's been requiring--

Unknown Speaker: Substantially is what, 80 percent?

Mr. Shapiro: --We think it's virtually everybody who's--

Unknown Speaker: Virtually everybody who's had occupational exposure knows it?

Mr. Shapiro: --There are, of course, exceptions, and--

Unknown Speaker: And what about those exceptions?

Have they had due process?

Mr. Shapiro: --Those persons do have due process, because the rule requires the best notice practicable.

Those persons are protected by adequate representation--

Unknown Speaker: That's assuming... that's assuming that you can... maybe the problem of notice reflects on the impropriety of proceeding in this case at all, as this massive class action.

Maybe you see that there can't be such a class, because one... reflecting back from how can you possibly give notice to some of the widows who have brought suits and have been told, you can't maintain your suit?

Mr. Shapiro: --Your Honor, we submit that the exceptional case shouldn't determine whether the notification for the class itself meets constitutional standards.

There are protections such as Rule 60(b) that Your Honor referred to in the Epstein case.

If there's some individual who has a truly exceptional situation, explaining we didn't really know that we had been exposed to asbestos and we couldn't be expected to know that--

Unknown Speaker: Well, let's start from the very--

Mr. Shapiro: --there could be an exception for such a person.

Unknown Speaker: --Let's start from the very basic premise, and you tell me if I'm wrong about this, but it was my understanding that there is a right for one to litigate one's own claim, and that's the basic rule, and if that's going to be displaced, there has to be a good reason for it, and that good reason, I assume, is not for the courts to make up in the guise of procedure.

Mr. Shapiro: Well, there is a superiority requirement which supplies the good reason.

Judge Reed made elaborate findings of fact that this was superior to relegating people to a tort system where two-thirds of the dollars are spent on lawyer's fees where the capricious results, many years of delay, AFL-CIO endorsed this settlement--

Unknown Speaker: I am... counsel, I am willing to accept that that is true, that it's superior.

It would seem to me also a superior way to proceed for New York City to say, you know, we know we're going to have 500 slip-and-fall claims.

Why give all the money to the attorneys?

We'll just have a class action for everybody that might have a slip-and-fall claim, and we'll adopt a Workman's Comp schedule of injuries, so much for an arm, so much for a leg, so much for a broken hip, and we'll just have a class action.

That's far superior.

But I don't see the substantive source of law that the court can and ought to look to in order to determine what is fair, and on page 14 of your brief you say, the questions that remain in the case were common to class members, whether it's fair and reasonable to compromise tort claims for asbestos-related injuries with high transaction costs, et cetera, in exchange for the specific compensation system established by the settlement.

If I were the district judge I'd say, this is marvelously superior, but that is a substantive determination that you are going to displace existing law with a new, different, substantive regime, and I don't think the rules allow you to do that.

Mr. Shapiro: --Well, Justice Kennedy, this body of litigation is unique in the sense that this is the most mature body of mass tort litigation in the country.

There's 30 years of experience here in settling these cases.

The disease categories are very well-known, and one can assign values to these categories with a great deal of confidence.

Many other cases don't fit that description, and so the court would have a great deal of difficulty in--

Unknown Speaker: I think slip-and-fall is much more well-established.

Do you--

[Laughter]

Could New York City do what I supposed?

This is a much more intelligent way to proceed than having... spending a lot money on legal fees, from many policy perspectives.

Mr. Shapiro: --There would be real difficulties in doing that, because in slip-and-fall accidents the variety of injuries and the variety of claims for harm are not just three or four, as there are in this--

Unknown Speaker: Suppose it was comparable?

Suppose that in fact you did have... the water mains overflowed through negligence, and you had 500,000 people who over the course of a week due to New York City's negligence slipped and fell.

I guess you would say there are 500,000 people in that category.

They were exposed to the ice.

They fell, and we want to have a class action.

We'll settle the cases.

Would there be a problem with that?

Mr. Shapiro: --Well, I think if you're talking about people who haven't had their exposures, haven't had any slip and fall--

Unknown Speaker: They've all fallen.

Mr. Shapiro: --They've all--

Unknown Speaker: Some people are going to... 3 years from now are going to develop whip lashes, and others won't--

[Laughter]

--and various things will happen.

Mr. Shapiro: --If there was an attempt to settle in one proceeding all the past injury cases and you could really find typical and adequate class representatives for that huge array of injuries, it's not inconceivable, but not many cases really are manageable in the sense that this one is.

This one is truly unique because of the maturity of the litigation.

There are only four disease categories here, and people know with a great deal of certainty about what value attaches to them.

We're talking about people who have been injured in the past through exposure but who haven't filed suit, or people who are actually sick at the moment.

We're not talking about injuries that will occur in the future.

Now, we don't generalize and say that this settlement regime would work in all situations.

You do have to apply the Rule 23 criteria.

You don't just look to the fairness of the settlement, or some abstract--

Unknown Speaker: But isn't the fairness of the settlement swallowing... isn't this sort of the point of what the Third Circuit was saying, and that is that the fairness inquiry in effect is swallowing all the preceding steps that are normally assumed when the moment comes to look at fairness?

Take this as an example.

If I understand what the district court did, and if I understand what you're arguing, you're saying there is no disparity of interest.

There is no conflict as within the various subclasses here which should present... which should prevent a certification, and the reason for that is, here they all are.

They've got the settlement, and they like it, and yet... and you say there really couldn't be any unfairness... or, I'm sorry, there really couldn't be any true disparity of interest unless we were dealing with a limited fund in which whatever A gets, B doesn't get.

Mr. Shapiro: --That's--

Unknown Speaker: And yet it seems to me the reality is that there is, in a way, a kind of limited fund unless you assume that the defendants in these cases are simply standing in court saying, we'll pay anything they want.

The sky is the limit.

If the sky is not the limit, then there really is a conflict among these subclasses, and the only way it seems to get around that conflict is to say, well, there isn't one any more, because here they all are, and they like what they're getting.

And isn't that the vise that the Third Circuit was getting at, that your fairness inquiry after the fact of settlement is displacing all of the criteria that normally have to be applied in order to satisfy just judicial standards before you even get to looking at fairness?

Isn't that what the Third Circuit was concerned--

Mr. Shapiro: --That's the critical issue, and Professor Tribe has caricatured our position as amounting to that, but it certainly is not our submission.

We don't think that the fairness inquiry wipes out the other inquiries under Rule 23.

The adequacy inquiry is still central.

The typicality inquiry is central.

The superiority inquiry is central.

But we say that these standards need to be focused on the negotiation history and the actual results--

Unknown Speaker: --But the predominance--

Mr. Shapiro: --as well as the--

Unknown Speaker: --The predominance--

Mr. Shapiro: --of the parties.

Unknown Speaker: --The predominance inquiry, which is central, I think, in (b)(3), certainly changes, and if you look at this going in you'd say, my goodness, these are people who are suffering from any number of diseases accrued at different times involving different manufacturers.

There's no way that, looking at these as discrete claims, one could say that a common question predominates.

You have different State laws involved, California very generous, Maine less generous.

You look at it and say, my goodness, this is just a hodge-podge, I think was the word Judge Becker used.

So going in with a case, looking at the complaint, one would conclude no, there's no... common questions don't predominate, and then you look to the rules, and I guess that's what is bothering me most about this.

You go back to 1966, when we first got (b)(3) class actions, and you've got the Rules Advisory Committee telling this Court and also Congress that you couldn't even have mass accident cases under (b)(3).

That's not what it was meant for.

And then it suddenly gets changed to be something so much vaster than was ever intended.

Mr. Shapiro: I was struck by the comment of the Rules Committee current draft of the change in Rule 23 that said that our position is law everywhere in the United States except in the Third Circuit.

Thirty-nine percent of all the cases that are certified today are certified for settlement purposes only.

This is really no change.

This is--

Unknown Speaker: Well--

--Well, but the... I'm sorry.

As I think most of the parties agree, the Third Circuit spoke too extremely when it said you can't take... nobody says you can't take settlement into account, you can't have a settlement class.

But what's key in this opinion, as I read it, is that... just what Justice Souter said, that 23(e) does not swallow up everything that went before.

Mr. Shapiro: --We completely agree with that, Justice Ginsburg, and when you look to these other factors and you consider the settlement, it makes them so much more meaningful and... as opposed to speculating in the abstract, as this Court said--

Unknown Speaker: Well, but let me suggest one change in Judge Becker's opinion that I think would leave us right where we are, but perhaps I'm wrong.

What if Judge Becker had said, look, the vise here is that the settlement is being used as a sufficient basis in and of itself to answer these various preceding inquiries, to satisfy these various preceding conditions for class certification.

If he had put in that word sufficiency, wouldn't everything else in the Third Circuit's opinion basically be just as appropriate, or inappropriate, as the case may be, as it is the way the Third Circuit actually phrased it?

Mr. Shapiro: --I don't think the Third Circuit could have modified the opinion that way, because Judge Reed looked at a host of other things in addition to the settlement.

He didn't look just to the settlement.

He looked to the alignment of the representatives; he looked at their incentives; he looked at the negotiation history to see if these conflicts were reality or just fiction, and in that sense the inquiry is really a much-improved inquiry.

If you just look at the complaint, you can't begin to tell if you're going to get adequate representation, or if you're going to get typicality, if you're going to get superiority.

Unknown Speaker: But you would in fact have a very different inquiry, as you yourself argue, if there were not already a settlement on the table and, in fact, there is a good argument, as Justice Ginsburg just suggested, for coming out quite differently depending on whether you were looking at it before the settlement and after the settlement.

Mr. Shapiro: Oh, absolutely--

Unknown Speaker: And the question is one of degree, and it seems to me the suggestion in her question and the suggestion in mine is that the degree is so great that the only way to make sense, I think, of the certification which the district court made was by saying, the district court was treating the settlement as sufficient as opposed merely to one source of information.

Mr. Shapiro: --I think that would be a mischaracterization of what Judge Reed did, because he looked at a host of factors pertaining to the alignment and the incentives and the vigor of the negotiation, the changes that were made in this deal, whether or not the AFL-CIO endorsed it... he was looking to an entire array of relevant facts.

Unknown Speaker: Well, I'll take that on, Mr. Shapiro.

Let's just talk about using the settlement as a significant factor in deciding how broad the class can be.

I am concerned about the incentives that that creates for the class action counsel.

We all know that these class actions don't come out of the woods.

The plaintiffs don't suddenly collect together.

They are put together by counsel, who has something to earn by putting them together.

Now, if he knows that by achieving a settlement he can expand the size of the class on behalf of which he's suing, will he not have an incentive to settle at substantially less than he might otherwise settle?

Mr. Shapiro: There--

Unknown Speaker: Doesn't it place him in a real conflict with regard to his clients in the class that could get in without a settlement, in the class that would be a certifiable class without the settlement?

Mr. Shapiro: --Well, there are conflicts in cases that have been certified for settlement and in cases that are certified for trial, and the district courts have to use the tools that are given them to examine, to see if what was achieved was a vigorous, adversarial attempt to maximize the amount of money from--

Unknown Speaker: This is a massive incentive to bring in other people who really wouldn't be in there if you didn't have a settlement, but then you strike a settlement that gives everybody less than they might get had he just gone in without a settlement.

Mr. Shapiro: --We have lots of indications here, factual indications that that isn't true, and I suggest this is a factual question where deferential review is appropriate.

Recall that it was the Federal judiciary, Judge Weiner, the MDL panel, the Federal Judicial Center that urged these global negotiations for a global resolution.

Unknown Speaker: They have some self-interest, too.

Mr. Shapiro: Well, and the--

[Laughter]

The lawyers that were--

Unknown Speaker: Mr. Shapiro--

Mr. Shapiro: --picked to do this--

Unknown Speaker: --Mr. Shapiro... Mr. Shapiro... Mr. Shapiro, you mentioned the MDL, and so I'd like you to straighten me out on one thing.

I thought when the multidistrict panel sent all of these cases to Judge Weiner to be consolidated he was talking about settling those cases.

The multidistrict panel was talking about settling those cases, not creating this vast exposure-only litigation that never existed.

Mr. Shapiro: --Your Honor, the transcript from Mr. Fitzpatrick demonstrates that Judge Weiner asked for a global resolution, wanted the parties to attend to that.

Unknown Speaker: Judge Weiner.

But did the multidistrict panel say, when we're sending all these cases to be consolidated for pretrial in the Eastern District of Pennsylvania, that the court was to settle not only those cases but cases that hadn't been instituted yet?

Mr. Shapiro: They asked specifically that after the transfer that the prospects for global negotiation be considered, and that's just what the Federal Judicial Center had said in two major conferences.

This was done at the instance of the judges who are on the firing line in this litigation, and Judge Reed--

Unknown Speaker: Do you have a reference to where the multidistrict panel said settle other cases than these that were consolidated?

Mr. Shapiro: --The 1991 opinion itself does refer to that as one of the possible outcomes of the transfers, that perhaps a global settlement could be achieved in this litigation, which is what the other judges had been suggesting, too.

They told the lawyers, you've got to do better.

You cannot simply rely on this system where transaction costs eat up $2 out of $3, where years and years go by and the courts are clogged and flooded, and that's what the lawyers did here.

Unknown Speaker: We have many cases, and it's sometimes a question of the degree of the difference between substance and procedure, but it seems to me that by using the term fairness the district court here imported and made choices between substantive chances of recovery, of liability, of measure of damages, and it seems to me that that's not the intent of the rule, and that it exceeds the authority of the courts under the rule.

Mr. Shapiro: Well, if this--

Unknown Speaker: Fairness becomes... fairness, which is an infinitely acceptable concept, is the basis for legislation.

Mr. Shapiro: --If this were a litigated matter I would agree with that, that you couldn't override State law differences, but the parties can settle, and often do settle in a way that varies from a particular body of State law, and here the settlement does incorporate reference to State law, but the amount of money is geared in part to State law standards, but it's the settlement that's critical.

If an adjudication attempted to override State law standards, then we'd have the substantive law problem that you mentioned, but the parties can settle on any terms that the judge determines to be reasonable--

Unknown Speaker: The parties are then conferring a new regime, a new substantive regime of law upon the court that the court adopts.

It's like asking the court to be an arbitrator.

Mr. Shapiro: --Many settlements have such features.

Unknown Speaker: It's like--

Mr. Shapiro: Many settlements have such features, where the parties will resolve an array of disputes under an ADR system, and there's nothing wrong with that.

Unknown Speaker: --I can understand what you're saying, Mr. Shapiro, with respect to one plaintiff and one defendant settling contrary to some principle of State law, but here I get the impression it's the tail wagging the dog, almost.

None of these individuals have much to say about what... the settlements made.

It's the attorneys, and their incentives may be different.

Mr. Shapiro: Well, I think Judge Reed found that there was a very important safeguard here from the AFL-CIO's participation.

They negotiated changes in this agreement to make it satisfactory to them, substantive and procedural.

Unknown Speaker: How did the AFL-CIO... was it a party to this?

Mr. Shapiro: Well, the named plaintiff, Mr. Carlo, and then Mr. Georgine, were both officers in the AFL-CIO.

One was a union president, the other was head of the building trades department of the AFL-CIO, so--

Unknown Speaker: Well, what if the Benevolent Protective Order of Elks had participated--

[Laughter]

--because they were both Elks?

Mr. Shapiro: --Well, when we talk about adequate representation, this is a group that, of course, has members in every disease category.

Most of the people that fall into this class are labor union members, AFL-CIO members, so if there's a problem, this is a group that's in a position to say so.

We also had 14 class representatives--

Unknown Speaker: This seems to me even more of a legislative cast to what the court does.

The court said, I've looked at what the National Association of Manufacturers have said, the AFL-CIO, is it, and this is what is fair and good and reasonable.

That is not a standard that has been delegated to the courts by the legislature.

It actually exceeds the bounds of the case or controversy.

Mr. Shapiro: --Well, many settlements, of course, differ from what would happen if the matter were litigated under State law principles, and the settlement here, of course, did that.

It departed from what would happen in a piece of litigation, and this is not, of course, unprecedented.

The Agent Orange case is quite similar to this.

There have been many cases like this where you have people--

Unknown Speaker: Is the Agent Orange the closest one that you can imagine--

Mr. Shapiro: --The Second Circuit's Agent Orange, the Ivy case, and then the Agent Orange case that preceded that, and obviously--

Unknown Speaker: --Mr. Shapiro, turning... I have some problem with the prospect of two parties who are not in disagreement as to what one should pay and what the other should accept coming to a court and saying that there is a case or controversy between them.

I mean, I gather that can happen afterwards, after there's a case or controversy brought before the court, but here are two parties coming before the court, and one says, you know, I think I owe you $200, and I'm willing to pay that, and the other one says, you know, I think you owe me $200, and I'm willing to accept that, and they bring this to a court, and this is a case or controversy?

Mr. Shapiro: --Well, this is--

Unknown Speaker: I mean, I'm simplifying it, but that... isn't that what you have here?

Mr. Shapiro: --The 14 class representatives all allege personal injury, and they demanded valuable relief--

Unknown Speaker: Yes.

Mr. Shapiro: --and they included in their class people who were in the same situation.

Unknown Speaker: And the defendants say, you're right, you deserve relief, and I'm willing to pay $2 million, and the plaintiffs say, I'm willing to take $2 million.

Where's the case or controversy?

Mr. Shapiro: It's a case or controversy because the court has to approve the settlement and issue an injunction.

This case depended on the issuance of an injunction.

It's just like an SEC case--

Unknown Speaker: Well, the court has to approve the settlement if it's a justiciable controversy.

I mean, you're... that's circular.

Mr. Shapiro: --Well, this case is indistinguishable from the SEC and antitrust division cases where the parties come before the court with a complaint, and an answer, and a settlement, and the answer has always been in these cases that because a judicial act is needed and an injunction is needed there still is a live case or controversy.

We rely on that body of cases.

Unknown Speaker: Has that body of cases been here?

Has it been in our Court?

Mr. Shapiro: Oh, yes.

In United States v. Swift the Court reached that same conclusion.

Unknown Speaker: They all involve Federal agencies though, don't they?

Mr. Shapiro: Well, there are private cases where the same concept has been raised.

One is In Re Asbestos Litigation from the Fifth Circuit.

They're--

Unknown Speaker: Not here, though.

Mr. Shapiro: --Not here.

If I may reserve a moment for rebuttal.

Unknown Speaker: Very well, Mr. Shapiro.

Mr. Tribe, we'll hear from you.

Argument of Laurence H. Tribe

Mr. Tribe: Mr. Chief Justice, and may it please the Court:

I think I might begin with the question of whether the judicial power was being exercised at all in this case before perhaps turning to Rule 23, because, like Justice Kennedy, I do think that what the district court did, though judicial in form, yes, it was an injunction, yes, it had all the trappings, was legislative in substance, very clearly in violation, I think, of Article III as well as the Rules Enabling Act.

And let me say why this is wholly unlike Swift and the other decree cases.

Of course it is permissible under Article III for people who are actually at one another's throats, including an agency that says you better do the following.

Unless you agree, I'm going to get an injunction.

Well, then one can get an agreement.

But here, what is very clear is that the only reason for going to court was not for one party to force the other to submit.

It was for the two parties to take what would otherwise have been a private deal involving, as Justice Scalia suggests, a much smaller class, not all of the exposure-onlys, and transform it into a nationwide revision of tort law binding throughout the country--

Unknown Speaker: Mr.... how--

Mr. Tribe: --on anyone who might sue the CCR defendants.

Unknown Speaker: --How does it... I mean, we used to have in Boston very complicated settlements in civil rights cases.

Mr. Tribe: Mm-hmm.

Unknown Speaker: Running... the whole fire-fighters, I mean, all kinds of things--

Mr. Tribe: Sure.

Unknown Speaker: --Enormously complicated provisions, entered through settlement of thousands of people, and those decrees would be there.

We would normally administer the settlement, and they appealed, frequently.

Mr. Tribe: Mm-hmm.

Unknown Speaker: And the way this differs from that, you're saying, is that the parties here who are members of the class don't really have a fight with the defendants?

Mr. Tribe: Well, the named representatives here have all testified beyond dispute that--

Unknown Speaker: Right, but I mean, is... I know the testimony.

Mr. Tribe: --Yes.

Unknown Speaker: Is that the distinction, or are there other distinctions?

In other words, unlike others, perhaps, on... I'm not concerned particularly with the fact that it's complicated, that it differs from State tort law, because I've just seen so many consent decrees where that is so growing out of settlements, particularly in the civil rights area, so if that isn't the problem, the complexity, or the fact that a lot of State laws rights they're giving up, what exactly is the problem?

Mr. Tribe: Well, there are, Justice Breyer, many different problems.

Unknown Speaker: Yes.

Mr. Tribe: Under the Rules Enabling Act the problem is that there are substantive changes being made in State law in a way that, of course, two private parties agreeing together could do, but that this makes binding on millions of people.

Unknown Speaker: What is one such change?

Mr. Tribe: Oh, in California, for example, an asbestos company cannot make any reference to whether or not the plaintiff smoked.

In some other States there can be some--

Unknown Speaker: I know that they are giving up... each member of the class is giving up a legal right to sue that he might have under the laws of many different States.

That's so in any settlement.

Mr. Tribe: --Yes, but--

Unknown Speaker: So what's different about this one?

Mr. Tribe: --What's different, Justice Breyer, just for example, is that in many States people are not allowed to give up in advance of the illness occurring through a general release the right to sue, like the woman in this morning's decision who didn't know until her husband died various of the relevant facts.

Unknown Speaker: But I thought they were bringing Metro-North kinds of actions.

A Metro-North kind of action, if it exists--

Mr. Tribe: No, but what's being extinguished--

Unknown Speaker: --and can win... yes.

Mr. Tribe: --What's being extinguished is not just the Metro North actions.

That is, the kinds of actions, for example, that the widow in this morning's case involving Ingallls Shipbuilding brought.

Her claims, since probably some CCR defendants made some of the stuff that killed her husband in that shipyard, her claim not just for exposure, but she's the widow of someone who got cancer, is extinguished by this settlement.

Unknown Speaker: I've seen many such actions in civil rights cases again where a person says, I will give up and compromise my present claim for $50,000 and, in addition, I promise never to bring another action growing out of the same incident.

Mr. Tribe: Yes.

If--

Unknown Speaker: That is fairly common.

Mr. Tribe: --First, some States do not allow people who have not yet experienced something to bind themselves that far into the future.

Second, the most important point is, many members of this class haven't been born yet.

Others haven't married into the class yet.

Many, as Justice Ginsburg pointed out, have no clue that they were exposed.

It's not as though you're having a tete-a-tete with particular individuals.

Unknown Speaker: How do those factors help answer the question put by Justice Breyer as to why this is different from the fire-fighters?

Is the difference... and I'm not sure of how to best articulate it, but--

Mr. Tribe: Right.

Unknown Speaker: --but is the difference that in the fire-fighters case, civil rights case, there was an imminent litigable dispute--

Mr. Tribe: No question--

Unknown Speaker: --and here there is not, or does that--

Mr. Tribe: --Well--

Unknown Speaker: --Is that sufficient?

Mr. Tribe: --There was an argument about future alleged misconduct.

It was not only imminently litigable, it was, as the Chief Justice referred to it, a contemplated lawsuit.

It would have been a lawsuit had there not been this settlement.

In this case there would have been, and this is undisputed, no suit on behalf of millions of merely exposed individuals--

Unknown Speaker: Yes, but there would have been suits on behalf of some of them.

Mr. Tribe: --Well, there had never been--

Unknown Speaker: There's a case or controversy as to some people, wouldn't you agree?

Mr. Tribe: --Oh, in some States, as to some of them there might have been a case, but--

Unknown Speaker: Might have been a case?

You don't think any of these plaintiffs would be litigating--

Mr. Tribe: --Yes.

Unknown Speaker: --if there weren't this settlement?

Mr. Tribe: Well, I do know--

Unknown Speaker: I think probably hundreds would.

Mr. Tribe: --Well, I do know that class counsel had never brought, and this is undisputed, a claim on behalf of someone merely exposed.

CCR--

Unknown Speaker: You're talking about the fringes of the class.

Maybe the class is too big.

I'm not--

Mr. Tribe: --It's not--

Unknown Speaker: --but you're saying there's no case or controversy here, not even as to those who have cancer and wanted to sue for millions of dollars, if I understand--

Mr. Tribe: --Justice Stevens, I'm sorry.

I certainly believe that as to those who are dying of cancer and many of the others there's a case or controversy.

Unknown Speaker: --Okay.

Mr. Tribe: But this Court's jurisprudence requires in a class action that there be an injury in fact by everyone, and the absence of a case or controversy here arises from the fact that the entire--

Unknown Speaker: It's the absence of a case or controversy as to some members of the class.

Mr. Tribe: --Well--

Unknown Speaker: Is that what you're claiming--

Mr. Tribe: --No.

Unknown Speaker: --or entirely no case or controversy?

Mr. Tribe: I'm saying no injury in fact as to some members, but (b), more important, no case or controversy as to the entire phony complaint which was filed, admittedly, solely for the purpose of getting the court to put in place this--

Unknown Speaker: Well, you're saying the class is too big, yes.

How do you--

Mr. Tribe: --Could I--

Unknown Speaker: --Go ahead.

Do you want to finish your--

Mr. Tribe: --I just want to answer--

Unknown Speaker: --Sure.

Mr. Tribe: --The fact that it's too big, too diverse can't possibly be certified without, as Justice Souter suggested, making the mere settlement somehow the sufficient answer to all of the questions under Rule 23 is a different matter.

The absence of a genuine controversy arises from the fact that the entire case... and this has never really been denied... was brought not to obtain the relief the complaint requested, money for monitoring, money for mere exposure, money for increased risk, it was brought solely for the purpose of enabling the court, giving it supposedly jurisdiction to issue a nationwide injunction--

Unknown Speaker: How do you distinguish, then, the cases that Mr. Shapiro cites which we read about in the papers, and probably some are participating, where it is announced that the Justice Department is bringing an action and that X pleads nolo contendere, and that a consent decree has been entered?

Mr. Tribe: --Well, the rights of third parties are not sacrificed in those cases, Mr. Chief Justice.

What's happening is that the agency, the Department of Justice, is saying that instead of taking you to court and, if you insist, we will take you to court, we will agree to desist from that if you will agree to--

Unknown Speaker: But the plaintiffs in the class action are saying if you disagree we'll take you to court just as much, aren't they?

Mr. Tribe: --There is this difference.

They can only take the defendants to court with the defendants' consent here, because in this case it is recognized that this class could not be certified for litigation so that, unlike litigable matters of the sort to which you referred in which the plaintiff has some leverage, this is in the unusual circumstance where, since absent the defendant's agreement there's no settlement, and since absent a settlement there could be no conceivable finding, even a pretense of a finding that the Rule 23 factors are satisfied, it means that the defendant really holds all the cards.

It is not a case where the plaintiff has some meaningful leverage and then they compromise and the court in enforcing the compromise issues an injunction.

Here, the injunction has the effect of replacing a system of tort law that one might find fault with with an administrative scheme.

The court would have had no power whatsoever to do that ordinarily, and what Mr. Shapiro says is, the reason it has power to do that here is because this is not an adjudication.

Well, of course, the only power that a Federal Article III court has is the power to adjudicate, and when... I'm sorry, Justice Breyer.

Unknown Speaker: I didn't want to interrupt you, but maybe I'll... the... what's obviously... what's actually motivating my question partly is the analogy to what I've seen is a lot of settled cases in the civil rights area where it seems to me the power to accept settlement is fairly broad, and to extinguish State law claims, and I grant you you're right that this is in the far... pushing that.

There's no question about that.

But the reason the district judge says that they've gotten into this thing is that they're trying to settle millions of claims, and the reason that they're trying to do that, he says the victims are not receiving speedy and reasonably inexpensive resolution of their claims.

These are millions of people who actually do have cancer.

Now, I take it that this is an effort to use Rule 23 in order to get that problem solved.

Now, that's what's moving me in part, and that's why I'm interested in whether there isn't the power here to bring about what the district court says he's aiming at.

Mr. Tribe: With subclasses, Justice Breyer, perhaps.

Unknown Speaker: And how does that work, subclasses?

Mr. Tribe: Well, the way... under the rule, one can identify a subgroup that is more homo... relatively homogeneous, so that one could get a set of typical representatives who could adequately advance the interests of those, for example, with advanced mesothelioma, or those with pleural thickening.

Those subgroups... and this was going on before this case happened.

Ninety-nine point eight percent of the cases against CCR were being settled by CCR.

Various subgroups can be managed.

What causes the problem here is the fact that the understandable desire by these 20 companies to get what they might have gotten from the Congress of the United States, namely protection into the indefinite future... they don't in fact say the sky's the limit.

They don't want to spend an infinite amount.

They want to limit their exposure.

That's what creates the inherent tradeoffs within the class.

Congress is where those tradeoffs could be resolved.

If they went to Congress, one could then imagine a legislative solution.

Or if, instead, subgroups formed classes... that is, there might be a class of people with cancer--

Unknown Speaker: Mr. Tribe, this discussion has been certainly quite wide-ranging, and I certainly have contributed.

If you look at the question presented in the petition for certiorari, it's whether the district court has to ignore the existence of the settlement in determining whether class certification is appropriate under Rule 23.

Now, that's really quite a different question than the ones we've been arguing... hearing and discussing, I think.

Mr. Tribe: --Yes, it is, Mr. Chief Justice.

The Third Circuit, of course, did not ignore the existence of the settlement.

It went on at some length to show how the settlement shed light on the conflicts involved here.

There was no inflation adjustment, which wouldn't have mattered much to people who had a life expectancy of 5 years from cancer, but would have mattered a great deal to people who might get sick, if at all, only in 25 years.

All of the consortium claims were resolved at zero.

That would matter a lot more to the widows than it would to people who lived alone.

So he looked at the settlement, and though perhaps, as Justice Souter and others may have suggested, there's some rhetoric in Judge Becker's opinion that suggests that the settlement doesn't matter, his own holding makes clear that he looked at it, he paid attention to it.

But what he did say was this, and I think this is clearly right, and very important.

The settlement can't in itself suffice because there is no objective test for what the right tradeoff is unless the groups with different interests are adequately represented.

Unknown Speaker: Let me ask you, Mr.--

Mr. Tribe: It doesn't matter whether the settlement looks reasonable.

Unknown Speaker: --Mr. Tribe, may I just ask you, do you agree with this sentence out of Judge Becker's opinion:

We held in GM Trucks that, although class actions may be certified for settlement purposes only, Rule 23(a)'s requirements must be satisfied as if the case were going to be litigated.

Do you think that's a correct statement of law?

Mr. Tribe: Well, Justice Stevens, I think when he says, as if it were going to be litigated, if I interpreted that to mean what Mr. Shapiro does, namely, we must be blind to the settlement in figuring out whether the criteria of Rule 23 are met, I think it would be wrong, because things like management of a complex case might shed a lot of light on that by looking at the settlement, but you don't have to read it that way.

I would interpret that to mean that we must avoid a search... we must avoid looking at this as though the questions were no longer those of typicality, predominance, superiority, and adequate representation, but merely the fairness of the settlement.

Unknown Speaker: Well, does that mean that--

Mr. Tribe: And I think in that respect he's right.

Unknown Speaker: --Is it conceivable that there are class actions that have come to the court in a settlement posture which the trial court could say, well, if this were going to be tried, I really couldn't prove the class certification but, given the settlement, I think I will approve it?

is that ever possible, in your view?

Mr. Tribe: Well, Justice Stevens, I wanted to be able to say yes to that because I thought I could come up with managerial examples in which that would be possible, but I think there are three reasons why the answer really ought to be no, and they're very fundamental.

They relate to the text of Rule 23 and whether it can possibly be stretched to confer judicial power to impose a binding order on an entire class where the class representatives could not be deputized to litigate it, and with Article III and due process problems.

Let me just say a word about each.

As far as the text of the rule is concerned, it talks constantly about circumstances in which people may "sue as representative parties" and, most importantly, there's no language in the rule that confers affirmative power to impose a binding settlement on the class.

It's a negative thing.

Rule 23(e) limits.

It says that you cannot dismiss or compromise a class action without judicial approval.

I think you have to twist those words out of shape to infer from them a power to judicially impose a settlement where you concede that there could not have been a class action.

I also think that there's an intrinsic Article III problem, just apart from the facts of this case, in construing any rule of procedure to create circumstances where an Article III court may bind nonparties, but only so long as the parties who seek such an order have settled all of the disputes between them and have therefore put no controversy before the court.

I mean, that's what it would come down to.

It would basically say the one precondition of getting the court to exercise its judicial power is that you guys don't disagree.

I think that stands Article III on its head.

I think there is a third problem, and it goes to Justice Scalia's question about incentive structures.

I mean, apart from the incentive to load up the class with additional people, which may be bad for a number of reasons, I think there's a fundamental point, and that is that representative parties, as the rule calls them, who concededly cannot carry on adversary class litigation against a defendant... which is your hypothetical, Justice Stevens, right +/?

are necessarily hobbled inherently in negotiating with that defendant and thereby playing the role that due process and rule 23(a)(4) demands, namely, fairly and adequately protecting the interests of the class, because by definition... by definition, representative parties in that situation need the defendant's cooperation to get the class off the ground at all.

Unknown Speaker: Well, what about... are you then... is the implication of what you're saying that imagine a big company, or several of them, that have a history of employment discrimination, and they work out a settlement that is going to cover millions of people into the future, or toxic torts of all kinds... you know, there are thousands of them, and now it would be impermissible to put anybody in the settlement class, anybody... anybody who might work for this company in the future, unless in the absence of that settlement his position is similar enough to the others in the class that he'd be in it anyway.

That proposition of law seems to have, to me, a lot of implications as to all kinds of decrees all over the place in ways that would inhibit settlements that might be highly desirable.

Mr. Tribe: Justice Breyer, I don't think it's an implication of my position that one apple of the wrong flavor spoils the barrel.

The question--

Unknown Speaker: Well, no, but that apple would be out of it.

Mr. Tribe: --Well, maybe--

Unknown Speaker: You see, that apple would be out of the class, and that apple being out of the class would mean that the company wouldn't know what was going to happen, and therefore, who knows?

Or, when you get to the point of enforcing the decree, the company claims, oh, that's one of the apples, or the apple says it's the apple.

Mr. Tribe: --Well--

Unknown Speaker: You see... do you see the problem?

I mean, that... and I don't see anything in the rule that requires that result.

Mr. Tribe: --Well, I guess I don't see anything in the rule that makes it possible for a nonlitigable case to give rise to a binding decree.

Maybe you're saying that the rule should be changed to make that possible.

I'm talking about the rule as it is.

But I'm also suggesting that any change in the rule that makes the power of an Article III court to bind millions of people dependent on the complete agreement of those before it is troublesome at a minimum under Article III--

Unknown Speaker: Mr. Tribe, are you saying--

Mr. Tribe: --and under Rule 82 you wouldn't read the rules that way.

Unknown Speaker: --Are you saying, then, that even a back end opt-out would not save this class?

I take it that's what you're saying.

Mr. Tribe: I think because a back end opt-out, Justice Ginsburg, would have to have preconditions that the court would set.

That is that in the heart valve and other cases a back end opt-out helps a great deal on the issue of notice, on the issue of meaningful choice, so that, for example, the widow in this morning's case might have been in a position to make certain decisions after her husband died that she wasn't before.

But a back end opt-out does not prevent this from being a binding exercise of Federal judicial power, otherwise... I mean, if they didn't need that they would include it in their inventory settlements that they settled on the side at quite a premium, and therefore I think that although the superiority determination under 23(b)(3) might come out differently with a back end opt out, I don't think the Article III problem or the textual problem would be solved, nor would the leverage problem.

That is, the fundamental problem of any deal, even if it looks good or better because people don't have to make the kinds of impossible choices that this settlement imposes on them 30 years before they come down with a terrible disease, even though it would be improved, if it turns out to be the case that the heterogeneity of class, or the inability of the representative plaintiffs adequately to represent the whole class or anything else brings the situation to the posture Justice Stevens put, namely, but for the settlement I simply could not certify this class, that gives such leverage to the defendant that in effect you are handing to the adversary power over the State law claims of absent members of this class in a way that changes their substance, the substance of those State law rights in violation of the Rules Enabling Act, and also in a way that violates I think both Hansberry v. Lee and Richards v. Jefferson County.

That is, the point about both your opinion, I think, in Richards v. Jefferson County, Justice Stevens, and Hansberry v. Lee many years earlier, was that the people who speak, even in the negotiation process, as you stressed in Matsushita, the people who speak for others have to be in a position in terms of an alignment of interest to fairly represent them.

Unknown Speaker: We've got district court findings that they were.

Mr. Tribe: Well, the findings--

Unknown Speaker: You think... you don't agree with them, of course.

Mr. Tribe: --No, that's... not quite, Justice Stevens.

I think that the court was extremely careful... at page 49a of the appendix to the cert petition you see how careful Judge Becker was to avoid disturbing findings of historical or empirical fact, so that there were no findings--

Unknown Speaker: Well then, do we take the case as though the representation was adequate or inadequate?

Mr. Tribe: --There are two different concepts of representation.

The word representation in 23(a) talks about the ability of the representative plaintiffs.

Unknown Speaker: I understand.

Mr. Tribe: And he... as to that, what did he find as to their ability?

It was in his conclusions of law section to begin with, and what he said as to adequate representation was--

Unknown Speaker: This was Judge Weiner?

Mr. Tribe: --Yes.

This is... No, Judge Reed, I'm sorry.

Unknown Speaker: Judge Reed.

Mr. Tribe: Judge Reed said, and it's at pages 229a to 230a of the certiorari appendix, that so long as all class members are united in asserting a common right, such as achieving the maximum possible recovery, there's adequate representation.

Now, that's a conclusion of law.

It's an obviously incorrect conclusion of law.

As to predominance he said the only--

Unknown Speaker: He was quoting from a Third Circuit case there... yes.

Mr. Tribe: --Well--

[Laughter]

But not from a decision of this Court.

[Laughter]

Unknown Speaker: Which would be right if we had said that, right?

[Laughter]

Mr. Tribe: If you'd said it recently enough.

[Laughter]

Take predominance at 226a of the certiorari appendix.

The predominant question he identifies is whether the settlement is fair, reasonable, and adequate for the class, and far from caricaturing petitioner's position, as Mr. Shapiro says I'm doing, let me simply just turn to his brief.

He says at, I guess page 42 of the blue brief, says, right in the middle, the legal and factual questions that remain now that we have a proposed settlement therefore relate solely... solely... to the fairness of the settlement as the district court concluded, and in their reply brief at page 14 he says, the questions that remain were common to class members.

Is the deal fair and reasonable?

This kind of reverse engineering, you know, trying to figure out if the incommensurable and conflicting interests of people who are perfectly well, who won't get sick until perhaps, if ever, the year 2030, and others, an effort to figure out if the incommensurable tradeoffs among them was made in a way that fairly represented their interests, as though you could apply some objective scale backwards, won't work.

That's why giving the kind of weight to this fairness inquiry, which is really just a way of looking when the dust has settled at whether the thing looks really gross, giving so much weight to the fairness inquiry and essentially displacing the inquiry that is indispensable if due process is to be protected and the integrity of class action law is to be preserved, is wholly indefensible.

Unknown Speaker: But you do not go so far as to say that a requisite premise is that the case must be capable of being litigated.

You do not go that far.

Mr. Tribe: Well--

Unknown Speaker: Because the Chief Justice... we talked about the question that was presented, and--

Mr. Tribe: --I think whichever way the question that was presented is answered, the judgment here would be, I think, affirmed because the basis--

Unknown Speaker: --What is your position?

Mr. Tribe: --My position is that it would be wrong... that under Rule 23, the existence of a settlement should not be ignored when it is relevant to answering the questions put in Rule 23.

Unknown Speaker: And--

Mr. Tribe: And it often is.

Unknown Speaker: --Can a district court certify a case that clearly could not be certified for litigation for--

Mr. Tribe: I think not.

Unknown Speaker: --Oh?

Mr. Tribe: Mr. Chief Justice, I think the answer to that ought to be no, but that's not--

Unknown Speaker: Don't ignore it, but it doesn't make any difference, right?

[Laughter]

Mr. Tribe: --No, no--

[Laughter]

Unknown Speaker: I think that's what you're saying.

It can't make any difference--

Mr. Tribe: No.

It can--

Unknown Speaker: --but don't ignore it.

Mr. Tribe: --It can inform you of a lot of things.

That is, it--

Unknown Speaker: But if were smart enough you'd figure them out anyway.

Mr. Tribe: --No, because--

[Laughter]

--no one has a crystal ball.

The settlement in this case... for example, I do think that in this case the degree to which Judge Becker looked at the settlement to reveal how the tradeoffs worked might have been unnecessary.

That might have been obvious in the... to begin with, no settlement could have cured the intractable problems of the heterogeneity of this class, but it might be the case when you looked at the settlement, no matter how smart you were, that it pointed something out to you that you hadn't realized about the situation that would enable you to see that what appeared to be a divergence in the class really wasn't.

That didn't happen here, but it sure can't be said--

Unknown Speaker: Can I give you a little different... supposing the trial judge made a finding that really there ought to be 18 subclasses because there's heterogeneity, but if I look at this settlement I think that each one of those 18 subclasses got the best deal it could have gotten if they had 18 separate representatives.

Would it be permissible on those facts to certify the class?

Mr. Tribe: --If other... if the other requirements of the rule were met or were not met?

Unknown Speaker: If they would be met as to each 18 subclass, clearly, but the problem is you've got 18 subclasses, but yet you look through it all and you say, well, I think each of those 18 subclasses got at least as good if not a better deal in the total settlement as if they'd had 18 subclasses.

Mr. Tribe: I think if they were all separately represented in putting the deal together, I think that sounds like a perfectly reasonable--

Unknown Speaker: And if he finds that they got the same benefit that they would have gotten that way... because the main difficulty that he foresaw was there wasn't enough money to go around, and that's what creates the major controversy, but here he found there was enough money to go around.

Mr. Tribe: --Well, enough money to go around suggests that there's some pie in the sky whose size--

Unknown Speaker: Right.

Mr. Tribe: --we know.

The fact is, if in your hypothetical these 18 subclasses were all represented by the same two guys, and not separately represented, I think no one is smart enough to look at that and say, oh, I can tell that even though their interests are in conflict, they got as good a deal as they would have gotten otherwise, because there isn't any as good a deal out there.

The question is, there are a lot of different ways of carving up this pie.

Maybe, as was suggested in the earlier argument, the right thing is to reserve most of the money for the people who get very, very sick, and not to worry so much about medical monitoring, but that's not an inevitable view.

Somebody might say, if they really were into preventive medicine, no, you really ought to reserve more money for the medical monitoring so that less of them will get sick in the future.

Unknown Speaker: So you're really saying you can't make an intelligent fairness determination after the fact without knowing the process by which the determination was made, and that's... I mean, that's your--

Mr. Tribe: That's exactly right, Justice Souter--

Unknown Speaker: --Yes.

Mr. Tribe: --and that no determination about the result will quite do.

I mean, you know, the proof of the pudding is in the eating.

Well, in this case proof is unavailable.

There is no QED.

There's no objective test, and you know, what might please me might poison someone else.

There are inherent--

Unknown Speaker: I think your time has expired--

Mr. Tribe: --Oh, I'm sorry.

Unknown Speaker: --Mr. Tribe.

Mr. Tribe: Thank you, Mr. Chief Justice.

Unknown Speaker: Mr. Shapiro, you have 3 minutes remaining.

Rebuttal of Stephen M. Shapiro

Mr. Shapiro: Thank you, Mr. Chief Justice.

I'd like to begin with the point Professor Tribe left, that there's no proof of adequacy here.

In fact, there was voluminous evidence on adequacy of representation.

The district court looked in great detail at what these lawyers and what these class representatives had done for each medical category.

This is a factual issue, and the district court's determination on these factual points is subject to deferential review.

Now, Professor Tribe's--

Unknown Speaker: I thought he was talking not about adequacy of representation, but rather about the question whether the settlement achieved gave each class the maximum that it could have gotten.

Mr. Shapiro: --And I think his point was you can't just look at the end result.

Unknown Speaker: Right.

Mr. Shapiro: You have to look at other things.

We agree with that.

You don't just look at the end result.

You have to look at the alignment of interests of the representatives and the vigor of negotiation, the changes that were made, and that's what the district court did.

This is a factual issue which the district court was best positioned to consider.

Unknown Speaker: Do you think there would be any difference if we were to hold hypothetically that there had to be four lawyers, one for the people who brought suit before, one for the people who have the disease already, one for the people who have the thickening, and one for the people who have nothing?

Mr. Shapiro: There--

Unknown Speaker: Would that lead to a practical difference in this case?

Mr. Shapiro: --There's be no difference.

That's what Judge Reed found, that there would be no... there's no practical need for these subclasses.

Unknown Speaker: So in other words, if this Court were to say the thing that was wrong with this is that there wasn't those four separate lawyers, and it went back, it would reach the same result, in your view?

Mr. Shapiro: Well, the same result would be reached at greater expense, because the district court found here that there were no conflicts among these subclasses.

Unknown Speaker: You're willing to leave it to one district judge to decide nationwide what is fairness as to all of these different plaintiffs, some who haven't gotten the disease, some who know that they have it, some... I mean, I can understand how a legislature might feel--

Mr. Shapiro: This is merely an option, Justice Scalia, for people who want the option, and it is found to be a preferable option.

Those that don't want it--

Unknown Speaker: --Yes, but so many of them--

Mr. Shapiro: --can opt out.

Unknown Speaker: --So many of them will never see this notice.

Many who do won't understand it.

Let me ask you a question similar to the one I asked Ms. Birnbaum in the preceding argument.

If her position is right, and it applies not only to FELA but the common law generally, then the huge bulk of these people don't have any current claim at all.

They don't have any injury.

And so you're taking people who don't even have any claim now and saying they're giving up nothing because they have no claim to settle some claim that they might have in the future.

Mr. Shapiro: Well--

Unknown Speaker: If they have no claim, then doesn't... isn't that another reason why this has to fall apart?

Mr. Shapiro: --They do have a claim.

They have Article III standing under this Court's precedents.

Our research shows that there are 15 States--

Unknown Speaker: But if they have no 12(b)... they couldn't survive a 12(b)(6).

They do not have a claim for relief because they haven't been injured yet.

Mr. Shapiro: --Under the legal certainty test, Your Honor, there are 15 States that recognize this cause of action.

No State supreme court has rejected it.

There are also claims here for intentional misconduct which we heard counsel say would present a different circumstance.

There can be no legal certainty--

Unknown Speaker: But then in most States, since we're dealing with a global thing, most of these people wouldn't have any claim if Ms. Birnbaum is right, and if... you said the number's only 15.

Mr. Shapiro: --Well, there's no State that has rejected this cause of action.

There are 15 that have by our count, and so the Court, looking at jurisdiction, could not say with a legal certainty that anyone in this class does not have a valid cause of action.

Chief Justice Rehnquist: Thank you, Mr. Shapiro.

The case is submitted.

Unknown Speaker: The Honorable Court is now adjourned until tommorow at ten o'clock.

Attribution:

The OYEZ Project

Featured:

Ingalls Shipbuilding v. Office of Worker's Comp. Prog. - Oral Argument

Fri, 09 Jan 2009 14:50:08 +0000

Case:

Ingalls Shipbuilding v. Office of Worker's Comp. Prog.

Media File:

95-1081_19961112-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Richard P. Salloum

Chief Justice Rehnquist: We'll hear argument next in No. 95-1081, Ingalls Shipbuilding, Inc. v. Director, Office of Workers' Compensation Programs, Department of Labor.

Mr. Salloum, you may proceed whenever you're ready.

Mr. Salloum: Mr. Chief Justice, and may it please the Court:

If the opinion and judgment of the Fifth Circuit in this case is allowed to stand, it would defeat the purpose that Congress enacted section 33(g) of the Longshoremen and Harbor Workers' Compensation Act which was to protect an employer from increased compensation liability when a worker, or those claiming through him, settle a third party case for less than the compensation they would be entitled under the Longshore Act.

It would also defeat the purpose for which Congress passed section 33(f) of the Longshore Act which is the give an employer credit to the extent of net third party recoveries received by a worker or those claiming through him.

The facts of this case are that Jefferson Yates, between 1953 and 1967, worked as a ship fitter for Ingalls Shipyard.

He left Ingalls in 1967 and worked several land-based jobs for other employers.

14 years after he left Ingalls, he was diagnosed with asbestosis in March of 1981.

In April of 1981, he filed a claim against Ingalls for compensation and medical benefits under the Longshore Act.

In May of 1981, his lawyers, who are the same lawyers that represent him in the compensation claim against Ingalls, filed a products liability suit in Federal court in Biloxi, Mississippi, seeking $6 million in actual and punitive damages against 23 asbestos manufacturers who he claimed made the asbestos to which he was exposed at Ingalls.

Less than a year after his compensation claim was filed against Ingalls, Ingalls wrote the district director for the Sixth Compensation District and accepted his claim, voluntarily accepted his claim, under the Longshore Act and agreed to pay him medical benefits and tendered to him all benefits under the Longshore Act.

In May of--

Unknown Speaker: Mr. Salloum, may I get you to... Salloum, may I get you to clarify for me how the employer is injured here?

Now, I assume the employer could file suit against those third parties who were at fault for the employee's injuries to recover payments that you... the employer made... may have made.

Mr. Salloum: --If a Burnside action was filed separate and apart from the Longshore Act, the employer would be faced... if the employer sued the 23 asbestos manufacturers directly, the employer would be faced with certain common law defenses in the Burnside tort action, tort indemnity action, that the employer would not be faced in a direct action by the worker against those defendants under the Longshore Act.

For example, if the employer filed a direct suit outside the Longshore Act under the Burnside tort indemnity theory, the defendants, the asbestos manufacturers, could assert certain contributory negligence features of coworkers of Mr. Yates which would serve to reduce Ingalls' recovery against those asbestos manufacturers.

More important than that... and this Court made it clear in Bloomer... that an employer is entitled to receive back 100 percent of his compensation and medical benefits plus its attorney's fees.

That's provided by Congress under section 933 of the Longshore Act.

If an employer is required, because of some wrongful act of a worker, to file a separate Burnside tort indemnity lawsuit, the employer, in addition to being faced with common law defenses which would reduce its recovery in the Burnside action, would also be faced with having to bear its own attorney's fees and cost in the Burnside action which Congress has made it clear in section 933(e), as interpreted by this Court in Bloomer, that the employer has its inviolate right to have 100 percent of its compensation and medical benefits--

Unknown Speaker: So, you say you might not be made whole or as whole as you would be otherwise.

How about recovering monies that you pay to Mrs. Yates out of the post-death settlements?

Yes, ma'am.

Your Honor, Ingalls approved the post-death settlements.

And I think the classic example of that and why section 933(g) and section 933(f) are so important is that after Ingalls accepted Mr. Yates' claim in June of 1992 and agreed to pay him lifetime benefits under the Longshore Act, Mr. Yates and Mrs. Yates between 1982, when Ingalls accepted the claim, and 1986 when he died, entered into four settlements with asbestos manufacturers in that third party case which Mrs. Yates released her wrongful death claims for Mr. Yates during his lifetime.

A classic example of that is that those four settlements that were entered into between the time Ingalls accepted the claim and the time Mr. Yates died where she released her wrongful death claims totaled $30,000, which were much less--

--And that money is not recoverable by the employer.

Mr. Salloum: --That's correct, Your Honor.

But... that's exactly right, Your Honor, but the comparison that I'm making... and the reason why Congress felt it so important for an employer to have a right to consent to a third party settlement is that after Mr. Yates died, Mrs. Yates and her adult children... the next three settlements that they entered into after Mr. Yates died were for $105,000.

Unknown Speaker: Well, you know, what you're basically saying is that the rule should kick in once the employer starts making payments, but that's not... it's not consistent with our holding in Estate of Cowart which said a person satisfies the prerequisites attached to the right and thus becomes a person entitled to compensation at the moment the right to recovery is vested, that is, at the time of the injury.

Mr. Salloum: Your Honor, that's exactly what we're saying.

Unknown Speaker: But I think we've kind of decided Cowart and relatively recently.

Are you asking us to reverse that?

Mr. Salloum: No, I'm not, Your Honor.

I'm asking this Court to follow Cowart.

I'm asking this Court to find--

Unknown Speaker: Well, I would think if we followed Cowart, we would have to say that Mrs. Yates was not entitled or qualified for a benefit until her husband's death.

Mr. Salloum: --That I think, Your Honor, is a source of confusion for the Fifth Circuit.

What this Court, as I understand Cowart, said was the right of Mr. Cowart to recover compensation arose at the time of his injury, not at the time that the employer acknowledged liability under the act and not at the time that he was found entitled to adjudication under the act.

This Court found in Cowart, as I understand Cowart, that his right to recover compensation arose when his injury arose.

And we are simply saying that that principle should hold true for those claiming through Mr. Cowart, that the right of the worker and the right of those claiming through the worker arising... arises at the time of the worker's injury.

Unknown Speaker: But do you think that Cowart would make Mrs. Yates a person entitled to compensation as soon as he knew he had been exposed to asbestos?

Mr. Salloum: I am, Your Honor.

Unknown Speaker: Because they might divorce.

She might predecease him.

I didn't think that was consistent with Cowart, but you think it is.

Mr. Salloum: I think it's very consistent with Cowart, Your Honor.

I think what's... what the argument that the Director has posed in the courts below and I think the source of confusion is to take the vesting language out of Cowart, take it in vacuo, and ignore this Court's holding that Mr. Cowart became a person entitled to compensation at the time of his injury.

The fact that a wife of a worker may divorce, the fact that a wife of a worker may die before her husband becomes an irrelevant fact, if that happens, insofar as the employer is concerned because if the wife divorces or if the wife predeceases the husband, then her unapproved third party settlements for less than a compensation she would be entitled against the employer would not prejudice the employer because she would not have a claim against that employer.

But the fact of the matter here is that Mrs. Yates entered into these unauthorized third party settlements.

Unknown Speaker: Yes, but the question that... I'm still not sure I understand your answer because the question is, when did she become a person entitled to compensation?

Mr. Salloum: Your Honor, she became a person entitled to compensation at the same time that her husband became a person entitled to compensation.

Unknown Speaker: Even if the next day she died.

Mr. Salloum: Yes, Your Honor, because the prejudice to the employer would not be there if she died.

She would not have the death claim against the employer.

Her third party--

Unknown Speaker: She would... there would be no prejudice to the employer unless she later became a person entitled to compensation.

Mr. Salloum: --No, sir.

There would be no prejudice to the employer until she claimed compensation by virtue of the occupational disease to her husband.

She became a person entitled to compensation at the same time as her husband when he was diagnosed with an occupational disease.

Unknown Speaker: No, but supposing she did get a settlement of her contingent claim later on and then she died before he did but she had that money, you know, tucked away.

She got a settlement with the third party.

Would the employer be prejudiced at all in that circumstance?

Mr. Salloum: No, that's exactly right, Your Honor, because--

Unknown Speaker: She wasn't a person entitled to compensation.

Mr. Salloum: --Well, the purpose... if these questions are asked without consideration to the reason that 33(g) was enacted by Congress--

Unknown Speaker: You sound like you're arguing the dissent in Cowart.

Mr. Salloum: --No, Your Honor.

I'm arguing the majority opinion in Cowart and that is--

Unknown Speaker: It's a very plain language, strictly literal interpretation.

Mr. Salloum: --That is the plain language.

The plain language that was... I believe the Court was referring to in Cowart was not the phrase, person entitled to compensation.

The plain language that the Court was referring to in Cowart, as I understand Cowart, was the 1984 amendments where they... where Congress added the language that if you don't... if a worker does not receive an employer's consent to a third party settlement, then he is bound by the forfeiture provisions of 33(g) regardless of whether or not the employer has paid compensation or whether or not the employer has acknowledged liability.

Unknown Speaker: Well, but the operative clause there was again a person entitled to compensation.

Mr. Salloum: That operative clause I believe was considered by this Court in the context of the addition by Congress in 1984 that they are barred regardless of whether the employer makes the payments or acknowledges liability.

Unknown Speaker: Let me ask you something about the Burnside action or actions like that.

If the employer... if there's a settlement with a third party, and the employer then sues the third party, does the employer have a cause of action on the grounds that the settlement was somehow inadequate, or is it it just seeks indemnity based on the fault of the--

Mr. Salloum: Your Honor, I believe it would be strictly based on tort indemnity.

Unknown Speaker: --And that's a State law cause of action?

Mr. Salloum: It's a State law cause of action, Your Honor.

It's been recognized by the Federal courts in Burnside to be a tort indemnity.

Unknown Speaker: In other words, the third party has no duty to make an adequate settlement, no duty that runs to the employer?

It's just a strict indemnity.

Mr. Salloum: That's correct, as I understand it, Your Honor.

Unknown Speaker: There's no breech by entering into a settlement that deprives the employer of--

Mr. Salloum: I think that representing a third party asbestos manufacturer that settles out from under an employer without that employer's consent runs the risk of paying twice.

Unknown Speaker: --Well, but if that's true, then the act does have a policing mechanism.

It's not without teeth.

Mr. Salloum: Well, but, Your Honor, I believe the policing mechanism would be the Burnside--

Unknown Speaker: And the policing will be I guess the third party.

The third party would be well advised to seek approval.

Mr. Salloum: --The third party and the worker would be well advised to seek approval.

That's correct, Your Honor.

I--

Unknown Speaker: Mr. Salloum, I'll ask what may be an embarrassing question but it goes to the reason that I'm not following your argument.

You say that the... in effect, for purposes of the statute, the wife becomes entitled or the spouse becomes entitled at the same time as the injured party, and you say that's the moment of injury.

I thought the distinction was that, in essence, the claim of the immediately injured party arises because the injury is physical, whereas the claim of the spouse arises later because the injury is economic and it does not occur until the support or the right to support is eliminated in this case by the death.

Am I... do I misunderstand the nature of the spousal claim here?

Mr. Salloum: --Your Honor, I believe you're absolutely right on the nature of the spousal claim, but I believe that you will see under the Longshore Act that a claim for disability by a worker is purely economic.

He can have an occupational disease that's progressive in nature and continue to work where that disease does not--

Unknown Speaker: I see.

So, you're saying if one economic injury arises at the moment of physical injury, the other one does too.

Mr. Salloum: --That's correct, Your Honor.

Unknown Speaker: I see.

Mr. Salloum: That's correct.

And the Ninth Circuit in Cretan found just that.

They recognized that the phrase, quote, person entitled to compensation, was not defined by Congress in the Longshore Act.

They recognized that person entitled to compensation was capable of several different interpretations, but the interpretation that the courts must give to the phrase is in the context of the reason that the statute is there in the first place.

Unknown Speaker: All right.

With that in mind, what if... taking the earlier example in which the spouse dies or is divorced before the injured party's date... the primary injured party's date of death, if the injured party marries again, does the new spouse have any claim following death?

Mr. Salloum: No, Your Honor, and that's a very important point.

That's why we say that the rights of both the worker and those claiming through the worker arises at the time of his injury.

Unknown Speaker: What's your authority for that answer?

Mr. Salloum: It's section... it's the dependency provision of the Longshore Act that says that it's only the dependents of the worker at the time of his injury--

Unknown Speaker: At the time.

Mr. Salloum: --that are entitled to recover under the Longshore Act.

And that's why the Longshore Act is all based on the... all rights of the injured worker and his family, as well as all liabilities of the employer, begin at the moment of the injury not when he's... the worker is adjudicated entitled to compensation and not when he dies before his wife.

The Longshore Act states that the worker's rights and his average weekly wage upon which his compensation is based occurs at the time of his injury.

It says that all questions of dependency, that is, those who are ultimately entitled to recover under the Longshore Act in the event the worker dies from an employment-related problem... those rights of dependencies are determined at the time of his injury not at the time of his death.

Unknown Speaker: But they have to be dependent at both times, don't they?

Mr. Salloum: That's correct.

That's correct.

They have to be primarily... well, solely.

The operative part is dependent at the time of his injury.

If he were to die and he had other dependents that were not dependents of his at the time of the injury... for example, if he divorced his existing wife at the time of the injury and then remarried immediately prior to his death, that wife, that surviving wife, would not be entitled to benefits under the Longshore Act.

Unknown Speaker: Neither spouse would benefit.

Mr. Salloum: That's correct, Your Honor.

Unknown Speaker: Now, is your answer or is the dispositive character of your answer affected by the fact that the claim against the third party is not or need not be purely economic?

Or let me put it this way.

The claim... if the harbor worker brought a claim against the third party, it would not be limited to economic.

Mr. Salloum: That's exactly right.

Unknown Speaker: Whereas if the spouse later brings one, it would be limited to economic.

And is the... does the statute... when the statute refers to entitlement, is it talking about entitlement as against the third party as opposed to entitlement as against the employer?

Mr. Salloum: You know, last night, Your Honor, I was thinking about that, and looking at the purpose for which that statute is there, that same thought occurred to me because Congress could well... Congress speaks in terms of 933(a) which says a person entitled to compensation need not elect his remedy.

He can sue both in tort and he can seek compensation benefits provided those benefits, those compensation benefits, are for more than what he's recovered under the third party.

Unknown Speaker: But if the entitlement refers to, in effect, a general tort law entitlement, then your argument would fail, wouldn't it?

Mr. Salloum: Well, no, Your Honor.

I think, as I read the statute, as I understand the statute, the person entitled to compensation... the status of a person entitled to compensation under the Longshore Act would make that person responsible for meeting the employer approval requirements of section 933(g).

Unknown Speaker: Well, that's right, but if entitlement to compensation is really... or if the entitlement that the statute speaks of is making reference to the tort liability, then there would be no entitlement on the part of the spouse prior to the death of the harbor worker.

And therefore, you would lose.

Mr. Salloum: Well, I'm really... I'm not sure I follow you, Your Honor.

It may be just because I've lost your question, but I think--

Unknown Speaker: Well, you said you were thinking the same thing--

Mr. Salloum: --Well, I was thinking the same thing in the context that a person entitled to compensation... I think Congress was looking at it in the context--

Unknown Speaker: --You don't mean... when you refer to the person entitled to compensation, you mean just compensation under the act, not compensation in a tort action.

Isn't that what you mean?

Mr. Salloum: --Well, I mean the section 933(g) speaks in terms of a person entitled to compensation having to comply with the employer approval requirement.

Unknown Speaker: I know, but what does a person entitled to compensation mean?

Does it mean a person entitled to compensation under the act, or does it mean a person entitled to compensation in a separate tort action?

Mr. Salloum: It means a person entitled to compensation under the act.

Unknown Speaker: I think that's clear, isn't it, from 933(a) which says... which distinguishes between compensation and damages?

It ends... is liable... he need not elect whether to receive such compensation or to recover damages against such persons.

Mr. Salloum: It is clear, Your Honor, and you're correct.

And I believe that if the Court... the Court has to apply the same interpretation to a person entitled to compensation under 933(a), 933(g), and 933(f).

Unknown Speaker: Can I ask you a couple of technical, very general questions that are... probably have a clear answer?

Is it... suppose you're a covered employer and I'm a covered employee and I'm exposed to a cancer-causing substance that might or might not cause cancer 10 years hence.

Now, if I leave your employ later on and I do get the cancer, I'm covered.

Right?

From you, not from some other person.

Mr. Salloum: That's correct, Your Honor.

If it is shown--

Unknown Speaker: Thank you.

My second question is that in the language in question, I would have thought reading it naturally, though I don't... this I guess is decided... that it seems to apply to an employer who is paying out to an employee some money under this statute and they have 6 months, the employee, to go and sue, and then thereafter you have 90 days to bring your own lawsuit if I don't.

And it says as to... and I'm trying to get an idea of the purpose of that under that incorrect interpretation.

But that being so, the purpose of... why do I have to go to the employer to get his approval because, after all, if I settle for $1, what difference does it make?

You, the employer, can go bring you own lawsuit against the third party and get all the money back that you had to pay me, can't you?

Mr. Salloum: --No, sir.

Unknown Speaker: Or is that your answer to Justice O'Connor?

Mr. Salloum: That's correct, Your Honor.

Unknown Speaker: Okay, I got that one.

All right.

Now, then the next thing that... and I take it you're arguing this, that once we reject the interpretation of the natural reading of the words, that we're thinking of the pay-out case.

Then I can't find any basis hypothetically... I'm not saying really... but I can't... what is the basis for distinguishing between everybody in the world who might be hurt working for you?

That is, why does a person... what's the... how would you interpret these words?

Once you say the person entitled to compensation is not the person who has passed the starting gate, i.e., the starting gate when you start to pay me, then is it your view that then covers anyone who ever will be, will be, or is now entitled to compensation?

Mr. Salloum: That's correct, Your Honor.

Unknown Speaker: And you're saying your view is there's no way of drawing a line short of that.

The dissent in Cowart, which was I take it the position I said wasn't the law, which I take it... is that right, the dissent in Cowart is focusing on those people who are the people you're actually beginning to pay?

Mr. Salloum: That was the dissent in Cowart.

Unknown Speaker: Yes.

Mr. Salloum: That's correct, Your Honor.

Unknown Speaker: And once you're past that position, once you're saying that's no good anymore, then it must encompass anybody who's hurt--

Mr. Salloum: It must encompass--

Unknown Speaker: --working for you I mean, you know, who might eventually be entitled to compensation.

Mr. Salloum: --If the purpose of section 33 is to be accepted by this Court, 33(g) would apply to every worker and those claiming through that worker who file a claim for compensation under the Longshore Act, if they settle for less than the compensation they're entitled third party without the consent of the employer, they come within the requirements and allegations of section 33(g).

Unknown Speaker: Mr. Salloum, your petition for certiorari presented two questions, and the second of them was, does the Director of the Office of Workmen's Compensation Programs have standing to respond in the court of appeals in opposition to a private party?

Are you going touch on that in your argument?

Mr. Salloum: Thank you, Your Honor.

I was.

Unknown Speaker: Before you do, could I ask one other question?

Mr. Salloum: Sure.

Unknown Speaker: In a pre... when the wife settles before the husband dies and asks for approval of the settlement, how does... how do you decide whether she must ask for approval?

Because it's only if the settlement is for less than the amount she's entitled to, right?

Mr. Salloum: That's correct, Your Honor.

Unknown Speaker: How can you say that she's entitled to anything more than zero at that time when she asks for the settlement to be approved?

Mr. Salloum: Well... I'm sorry, Your Honor?

Unknown Speaker: I mean, how... what is the standard by which you know the duty to ask for approval of the settlement arises?

In other words, it's less than she's entitled to.

Mr. Salloum: Well, if it... the effect would be the same if it's... I guess the criteria would be based upon her age, her husband's age, his average weekly wage, other factors that enter into the compensation liability for both the husband and the wife.

When it's all said and done, when the injury to the worker occurs, that employer's compensation liability is fixed at that point.

Unknown Speaker: Even to... even as to the wife.

Mr. Salloum: Even as to the wife.

That's correct.

The only difference is is that when the husband dies, the payments to him stop and the employer starts paying the wife.

I mean, that's the only change that's occurred.

There's some difference in the amount that's paid, but the employer's obligations is fixed at the time.

Unknown Speaker: But the difference is that the wife gets less than the husband?

Mr. Salloum: Yes, depending on the number of children that there are.

That's correct, Your Honor.

Unknown Speaker: What if she's... it seems to me there are variables in there.

Well, anyway, I don't want to prevent you from addressing the other issue.

Mr. Salloum: Thank you, Your Honor.

Unknown Speaker: But I'm very much puzzled by that, exactly what is the standard that determines her duty to seek approval of a settlement that arguably is less than she might become entitled to.

Mr. Salloum: Yes.

There are different factors such as age, the compensation rate that's being paid, the number of children she has, that sort of thing.

Very quickly... and I'd like to reserve the balance of my time for rebuttal.

Very quickly, the second issue upon which certiorari was granted.

It was our position, in follow-up to this Court's opinion in the Newport News case, is that the Director of Office of Workers' Compensation Programs has no standing to participate actively in this appeal.

We would submit that section 921(c) of the Longshore Act only vests into persons who are adversely affected or aggrieved by a decision the right to appeal a case to the United States courts of appeals.

Congress has defined person in the Longshore Act as not to include the Director or the Secretary of Labor.

The Director and Secretary of Labor have no financial stake in this case.

There is no regulation of the Director... there's no function of the Director that's at issue in this case.

It's strictly a private dispute involving a private compensation claim between a worker and his family and the employer.

If there are no further questions at this time, I'd like to reserve the balance of my time for rebuttal.

Unknown Speaker: Very well, Mr. Salloum.

Ms. Brinkmann, we'll hear from you.

Argument of Beth S. Brinkmann

Mr. Brinkmann: Mr. Chief Justice, and may it please the Court:

Two questions are before the Court in this case.

We believe that the first question concerning the correct interpretation of section 33(g) is answered by the text and this Court's interpretation of that text in the Estate of Cowart case.

The Court there held that under the plain language of section 33(g), the term person entitled to compensation means a person who satisfies the prerequisites attached to the right to Longshore Act compensation.

Unknown Speaker: Ms. Brinkmann, just last week we had a case involving the word employee in which the Government was arguing that the word employee sometimes in the statute can mean current employees and sometimes can mean current or past employees.

Now, why can't that principle be applied here, that in some provisions here, the person entitled to such compensation means the worker who was injured, but in other provisions where it makes eminent sense, it can mean him or a person who will later be entitled to compensation, not the person now, but the one who may later be entitled to it?

Mr. Brinkmann: Well, Your Honor, we believe that in this particular case, when you look at the structure of 33(g), there are many reasons why this cannot be interpreted to someone who has a potential entitlement.

First of all, there are many prerequisites that Mrs. Yates would have to meet in order to become eligible.

And I think this is what Justice Stevens was getting at.

This is one of the reasons that a person who's actually entitled to compensation is in a very different situation than Mrs. Yates for example.

In order to determine whether or not she would be entitled, not only would her husband have to die, she would have to outlive him, they would still have to be married at that time, and his death would have to be caused by the work-related injury.

Unknown Speaker: And will the timing of his death affect the amount of her entitlement?

Mr. Brinkmann: Yes.

They--

Unknown Speaker: Which is what I think Justice Stevens was getting at.

How could we figure it?

Mr. Brinkmann: --Exactly.

In fact, when you project out a... what a person entitled to... what a person would be entitled to under the act, you can project out on an actuarial table the life expectancy of the worker, but for someone not yet entitled, you would also have to find some way to project the likelihood of the employee's death resulting from the work-related injury, the likelihood--

Unknown Speaker: Ms. Brinkmann, if we said, or may be entitled to compensation, she would fit in that category.

If we... if the words meant person now or in the future, that would be a finite group because, as just was brought out in the colloquy, you must be a dependent at the time of the death, otherwise you're out.

So, everyone who's a dependent at the time of death is one who may be entitled.

Right?

Mr. Brinkmann: --Actually, the widow... the wife does not have to be dependent in fact if she's married and living with--

Unknown Speaker: Yes, but she does have to be the wife at that time.

Mr. Brinkmann: --That's correct.

Unknown Speaker: So, we know all... the entire universe of people who may be entitled we know at the time of injury.

Mr. Brinkmann: No, Your Honor.

I'd have to say no, and I really want to correct I think a premise that was underlined in the earlier argument.

The worker's right to entitlement is based on disability, not injury.

So, at the time of the injury, that is not a person entitled to compensation.

It's only when that injury becomes disabling, it affects the worker's urge--

Unknown Speaker: Wage earning.

Mr. Brinkmann: --wage earning... thank you... capacity does that person become entitled to compensation.

So, under that interpretation, any employee that was ever injured might be entitled to compensation if they're eventually disabled by that.

I think that there are--

Unknown Speaker: I was just making the point that we're talking about derivative liability and all the people who are derivative of the worker are known.

So, we're not dealing with the question of, well, you really can't tell until death who those dependents might be or who the spouse might be.

Mr. Brinkmann: --At the time of death, you would be able to tell whether or not she was the spouse at the time of death.

Unknown Speaker: And the children presumably are not beneficiaries if they have reached majority at the time of death?

Mr. Brinkmann: That's correct.

Unknown Speaker: So, you wouldn't know at the time of exposure to asbestos whether the children would ever be eligible.

Is that right?

Mr. Brinkmann: I believe that's right, Your Honor.

Also--

Unknown Speaker: Excuse me.

Had you finished your answer?

Mr. Brinkmann: --Yes.

Unknown Speaker: May I?

What about the case in which the worker becomes entitled to compensation either because it's clear the injury is disabling or you fix the point of disability and he marries someone later?

Does that later-acquired wife possibly get widow's benefits?

Mr. Brinkmann: Yes, I believe so if that is the fact at the time of death.

Unknown Speaker: But then you wouldn't know... you wouldn't be able to identify the universe of people later entitled to compensation even at the time of injury.

Mr. Brinkmann: That's correct.

There are actually myriad examples, adopted children, children that are in utero.

There are a multitude, and that's why the words person entitled to compensation have a fixed meaning we believe.

And we believe it would be... we have every reason to believe that Congress would have wanted to distinguish people who were actually entitled to compensation from those who were not for two... at least three reasons.

One is because of the calculus of the comparison of the amount of entitlement to the settlement.

It's just an incredibly complex and very speculative determination.

But in addition, the person settling the case is in a different position.

If the person is entitled to compensation, they have an option and a right to file a claim for disability benefits under the act, and what section 933 addresses is a person who, on account of a disability or death, has a right to payment of some compensation under the act.

And it addressed whether or not that person had to choose between the options.

This person at the time of the settlement, Mrs. Yates, had no right to file a claim and indeed may never have one.

Unknown Speaker: Why is it that she could?

If... suppose 33(f) and (g) don't apply because she's not a person entitled to compensation.

Then how does she get any money?

She just gets it directly under 7, 8, and 9... 907, 8, and 9, the basic requirement?

Is that how she gets it?

Mr. Brinkmann: Yes, under that--

Unknown Speaker: Why is she entitled to that, whereas the worker who... let's say the ordinary case.

The worker is hurt.

He's paid out his paycheck.

Within 6 months, he wants to file a lawsuit.

The classic, ordinary case.

He goes to the employer.

The employer says I'm not going to approve this settlement.

Why is that worker not entitled to the basic compensation?

The statute says if the worker won't approve the settlement under (g), that he's not entitled to the (f) compensation.

It doesn't say a word about the basic compensation.

So, that's what I... do you see... I'm having trouble understanding if we hold with you on this, are we certain these people are going to be compensated at all?

And if they're compensated, why isn't the ordinary person compensated when the employer refuses to approve the settlement?

Mr. Brinkmann: --Your Honor, I think if I'm understanding you correctly, my answer is that the person entitled to compensation does recover.

Either they settle and get the settlement amount or they don't settle and they have their entitlement to rights under the act.

Unknown Speaker: So, everyone whom... if an employer refuses to sign, the employer has to pay the full amount of compensation anyway.

Mr. Brinkmann: Yes, they have to pay the compensation that the person is entitled to under the act.

Unknown Speaker: Anyway, and that's with an ordinary worker who is hurt and they're paying out paychecks... paying out compensation checks.

Mr. Brinkmann: Based on disability.

Unknown Speaker: Based on disability.

They have to... either they sign and they get the reduction of 933, or they don't sign and they have to pay the full thing.

That's the employer's choice.

Mr. Brinkmann: There are many other choices, as people have already mentioned.

There's, of course, the Burnside action that the employer can recover from a third party also.

And I think it's important, Your Honor brings up the other point that I wanted to make about why it would be reasonable for Congress to have differentiated between these two situations.

In the situation where the person is entitled compensation and pursues an action against the third party, the employer has a subrogation lien that this Court has recognized under Bloomer and other cases, and that then makes sense for that employer to have notice to be able to intervene in that action, to be able to have some input because they have a vested liability and a vested right to recoup.

Unknown Speaker: Can I ask you one final question and that is this.

Given your answers to what I've asked, then what harm is done if you in fact interpret the statute the way your opponents want if you say it applies to everybody once they're hurt and could become entitled to compensation?

Because then those people, whenever they sue, go and try to enter into a settlement.

If the employer approves the settlement, the woman or man is fine.

If the employer doesn't approve the settlement, the woman or man eventually will get their full compensation when the disability turns up and hurts them.

So, what harm is done?

And the good would be it makes sense administratively, you know, and so forth.

Mr. Brinkmann: Mrs. Yates may never have gotten benefits.

She may have been trying to enter into a settlement at a particular time before.

For example, an employer was insolvent.

Or she may have been trying to enter into a settlement for loss of consortium at a wrong... potential wrongful death action which she then is not entitled to any compensation because she divorces her husband or she predeceases her husband.

But she doesn't have that option.

Unknown Speaker: What harm is done?

I... what harm is done?

That's what I don't understand.

Mr. Brinkmann: She--

Unknown Speaker: The only harm I can see that's being done is that you're requiring her to go to the employer whereas in some situations that will be a vain act because she won't end up being the widow.

But apart from that, how is she prejudiced?

Mr. Brinkmann: --It's part of the problem I think, Your Honor, with what Congress looked at when they eventually decided to not require workers to elect remedies anymore.

She's put in a situation of either taking a settlement that will forever preclude her from future potential compensation which she doesn't know if she's entitled to yet or being left... and being left empty-handed.

But she's being forced into a choice at the time of the settlement that she can't make.

Unknown Speaker: Then I didn't understand your answer to my question.

I don't understand.

If she goes and tries to get the settlement, like any other worker, if the employer approves it, she gets the settlement.

No problem.

Suppose the employer disapproves it.

At that point I thought you said that he or she or anyone would be entitled to ordinary compensation under 906, 7, 8, and 9, the rest of the act.

Is that not so or is it so?

Mr. Brinkmann: A person who's entitled to compensation would be because they have an entitlement, but if she is not yet entitled, she cannot go and file a claim, no.

She only becomes entitled to compensation after her husband dies, and that's--

Unknown Speaker: You know, that position is inconsistent, is it not, with the rule that was promulgated after the '84 amendments?

Didn't the Director take the position at that time that coverage of a death claim does not turn on when death is sustained?

Mr. Brinkmann: --No, Your Honor.

We addressed that point I believe and it was raised in amicus briefs and in our brief.

What the Director said was interpreting which employer would be liable for the compensation benefits, and under that it's the employer who was the employer at the time of the death or the injury.

But that doesn't mean that the--

Unknown Speaker: At the time of the injury.

Mr. Brinkmann: --That doesn't mean that the person... Mrs. Yates' entitlement to compensation vested at that time.

There was all the other prerequisites that would have to occur before she could become entitled to it.

Unknown Speaker: Is it clear that if we rule, as you suggest, and the wife in this case is not a person entitled to compensation at the time she makes the settlement... is it true that when she does become a person entitled to compensation and brings a suit against the employer, that the employer cannot offset under 33(f)?

We don't have to decide that here, but it seems to me that that's at least an open question.

Mr. Brinkmann: You don't have to decide that, Your Honor, and we do think that that's an open question.

I should say that once Mrs. Yates became entitled to compensation after her husband's death, she did obtain prior written approval from the employer for--

Unknown Speaker: But I was talking about offset for the previous--

Mr. Brinkmann: --Yes.

That's not before the Court in this case.

Petitioners do not seek an offset in this case, and it--

Unknown Speaker: --But you did take a position in your brief on it.

You said that they should... the words should be interpreted the same way in both sections.

Mr. Brinkmann: --Yes, Your Honor, we did.

We think in light of the Court's holding in Cowart, that that is required.

Unknown Speaker: Let me ask you a very simpleminded question.

It was one that was brought up in the brief on the other side, and that is, if you try to envision what Congress was doing here, why would Congress want to say to the widow or the potential widow who settles shortly before the death, you can, in effect, recover twice, but to the one who settles after the husband dies, you can recover only once?

What rationality is there to such a scheme?

Mr. Brinkmann: I think that it would be reasonable for Congress to have distinguished between someone who already has a vested right to compensation, a known alternative remedy, vis-a-vis a person who only has a potential, perhaps entitlement at a later point in time.

And weighing that against an employer in the first situation which also has a vested liability and a vested lien and entitlement to recoup, giving that employer a right to prevent a settlement or to participate in that settlement, as opposed to in the latter situation where the employer has no liability nor lien at that point in time.

And we also think again because of the very different nature of the determinations of what compensation the person would be entitled to under the act, in the one instance, when the person is entitled, it's a reasonably, generally knowable calculation that may involve actuarial tables, but in the other situation, it involves much more than actuarial tables, a lot of eventualities about outliving another person that... expectancy of the duration of a marriage.

If I could, Your Honor, I'd like to turn to the second question presented, whether or not the Director is entitled to participate as a party respondent in a court of appeals.

We believe that the Director is entitled to participate under rule 15(a) of the Federal Rules of Appellate Procedure which states that in each case the agency must be named respondent.

The Secretary--

Unknown Speaker: That's simply a procedural rule, isn't it, almost a pro forma type of rule?

Mr. Brinkmann: --That's correct, Your Honor.

I think that would be--

Unknown Speaker: Why would that control the outcome of something like this?

Mr. Brinkmann: --Because Federal Rule of Appellate Procedure 15 addresses specifically the situation where courts of appeals are reviewing agency actions, and that rule envisioned that someone from that agency would be in the court of appeals as a party respondent.

It's different than Article III standing, Your Honor.

It--

Unknown Speaker: Well, do you think that, say, the rules... a rule could confer standing on a respondent party such as the Director here even though Congress had not... had indicated not?

Mr. Brinkmann: --It's not standing, Your Honor.

I think it's just like a rule about intervention.

There are rules for parties to intervene and the Federal rules permit that.

That's to bring someone who isn't a party.

But that's not giving somebody a right to petition or Article III standing to seek judicial review.

That's a very different scenario.

I would also point out--

Unknown Speaker: Excuse me.

You can intervene when you don't have standing?

Mr. Brinkmann: --Under... in the district court, under Federal Rule of Civil Procedure 24, there are different provisions... situations--

Unknown Speaker: Surely you can't intervene in a suit unless you have standing.

Mr. Brinkmann: --I guess it depends on how you describe standing, Your Honor.

I think in the sense of Article III standing that you're bringing a case to the court where there's a case of controversy, I don't think that's required for intervention.

A intervenor has to show an interest in the--

Unknown Speaker: You don't think Article III standing is required for... on the part of the intervenor?

Mr. Brinkmann: --I think under the Federal Rules of Civil Procedure, it depends.

There's varying levels of interest and it may be that one person is entitled to intervene as of a right because there's a particular--

Unknown Speaker: Well, surely the Rules of Civil Procedure can't confer standing in the face of the Article III requirement.

Mr. Brinkmann: --We agree with that, Your Honor.

That's correct.

But we think here the idea of having the Federal agency before the court of appeals when an agency action is being reviewed makes eminent sense.

And in the Court's opinion in Caputto, it talked about when it did not reach expressly this issue... it talked about the lower court opinion in that case.

And Judge Friendly's opinion there had pointed out that it would be a novel form of review of an agency action which did not include the Government as a party in the court of appeals.

Unknown Speaker: Well, what about the Newport News case?

It surely points in the other direction.

Mr. Brinkmann: Newport News addressed the question of whether or not within the statutory definition of a person adversely affected or aggrieved.

The Director in that particular case came within that.

I think that all the parties in that case agreed, in fact, and the Court reserved the question.

Even under that definition, the Director could well have Article III standing to petition for review under some situations.

Unknown Speaker: Is the Tax Court... when we get cases that originated in the Tax Court, is the Tax Court a party before us?

Mr. Brinkmann: I don't--

Unknown Speaker: I mean, surely it's different when the agency is set up as an adjudicator.

I mean, if you have a legislative court, an Article I court, is that court a party to any proceeding of the private parties who then come before us to challenge what that Article I court did?

Mr. Brinkmann: --Your Honor, we believe that the board, for example, would not be an appropriate party for that very reason.

The board does not have a vested right to defend it.

The situation here in that the Department of Labor is very unusual.

It is not a unitary scheme as is the normal scheme under most agencies where rulemaking, adjudication, and policymaking are all in the same entity.

Unknown Speaker: But it is the decree of the board... of... it is not the decree of the Labor Department, is it--

Mr. Brinkmann: No.

Unknown Speaker: --that entitles this person to compensation?

It's the decree of essentially an Article I court.

Mr. Brinkmann: Under section 921(c), Your Honor, the Longshore Act itself makes clear that the court of appeals under that provision, once the Benefits Review Board opinion is petitioned to the court of appeals, the court of appeals has the authority and power to modify, reverse, to act on that board's opinion.

We think that's why it supports our view that it's not the board but the Director that is named the agency under Federal Rule of Appellate Procedure 15.

Prior to the change in '72 where the structure of the appellate review changed, it used to be into the district court, and then the Director could of course participate.

In '72 when it changed, it no longer identified who should be the respondent.

It identified a court.

Several courts have pointed out that they believe in light of the Federal Rules of Appellate Procedure enactment, it was no longer necessary to identify the respondent.

Unknown Speaker: Thank you, Ms. Brinkmann.

Mr. Clark, we'll hear from you.

Argument of Wynn E. Clark

Mr. Clark: Mr. Chief Justice, and may it please the Court:

I am asking the Court to follow Cowart, a decision decided 4 short years ago, which we submit teaches us three things.

One, in the words of Cowart, there's a basic and unexceptional rule that when a statute speaks clearly to a subject, judicial inquiry is no longer warranted, and that statute, section 33--

Unknown Speaker: But judicial inquiry is warranted as to what the statute says I take it.

Mr. Clark: --Yes, sir, but interpretation beyond the clear meaning of the statute is what I'm referring to.

Cowart teaches us two other things, and it's right there on page 2594 of the Supreme Court Reporter and page 2595.

Cowart teaches us that a... the person entitled to compensation status must be measured at the time of the third party settlements, and in this case we're talking about settlements made before Mrs. Yates became a widow, at the time she had no right to invoke the administrative machinery of the Longshore Act to file a Longshore and Harbor Workers' Compensation claim for death benefits.

Cowart teaches us a third thing, and it says this on page 2595.

It says that person entitled to the compensation means this, that the person satisfies the prerequisites for the right.

There are a couple of misstatements that I believe are just simply wrong that have made--

Unknown Speaker: Mr. Wynn... Mr. Clark, one thing I think perhaps you can teach us, although if you think it's not relevant, let us know.

Why wasn't approval sought?

We had one person who was clearly a person entitled to compensation.

The settlement wasn't approved for the worker or for his potential widow.

Why not?

Mr. Clark: --With respect to the pre-death settlements, all parties were then operating under the Dorsey and O'Leary cases out of the Benefits Review Board, and they're cited in Cowart.

And those cases said, which is something that Cowart made short work of, was that you have to be receiving compensation at the time in order to be a person entitled to compensation.

That's why there was no problem at that time.

I might add too--

Unknown Speaker: All of these settlements were... I thought... then I'm confused.

I thought one of the other counsels said that some of these settlements were made after the worker was... yes, I think that... was it... Mr. Salloum said that.

Mr. Clark: --Yes, but they're still under the category of pre-death settlements, settlements made during the lifetime of Mr. Cowart, the traumatically injured worker... excuse me... occupationally injured worker.

Unknown Speaker: Yes, but there were... none of the settlements were approved although--

Mr. Clark: None of the pre-death settlements were approved.

Unknown Speaker: --Yes, although some of those settlements postdated the time when the worker himself began to receive benefits.

Mr. Clark: That's correct.

Unknown Speaker: And no approval was sought for those.

Mr. Clark: No approval was sought, and may I add that no--

Unknown Speaker: Why not?

Mr. Clark: --No approval was required, and it's right there in the petitioners' appendix to the petition for certiorari, pages 49 and 48 and 62 and 63, is because 33(g)(1) only applies when the, quote, person entitled to compensation, end of quote, settles for an amount less than the compensation to which he was entitled.

There was a section 8(i) settlement in May, May 5, 1983, which determined that the petitioner Ingalls paid Mr. Cowart... excuse me... Mr. Yates $15,000 and kept his medical benefits open.

At that point he knew... every... all the parties knew... what he was entitled to under the act.

The third party settlements... and we're talking about the pre-death settlements... netted $18,000 plus, and correctly the Benefits Review Board in the... at the pages I cite in the appendix noted that approval wasn't even required from Mr. Yates, much less Mrs. Yates who could never have invoked the administrative machinery of the act during the lifetime of her husband on--

Unknown Speaker: You have to make that evaluation at the time that the settlement is entered into.

Right?

And if it turns out that actuarially you were wrong and that in fact the worker gets more... was entitled to more from the employer, it's too bad.

You just look to the time of the settlement to determine that issue?

Mr. Clark: --Justice Scalia, you look at the time of the settlement under Cowart to determine person entitled to compensation status.

To determine actuarial--

Unknown Speaker: Yes.

Mr. Clark: --To determine actuarial for the claim that Mrs. Yates is advancing, which is a mix and match approach for the petitioners, you do it after the husband has died and she at that time files a claim for compensation.

Unknown Speaker: I hope we're talking about the same thing.

I want to know what time you look to for purposes of determining whether the settlement is indeed less than what the person would be entitled to under this chapter.

Mr. Clark: You look at it when the person entitled to compensation makes a third party settlement.

Unknown Speaker: At the time of the settlement.

So, you have to do actuarial calculations.

Mr. Clark: Correct, yes, sir.

You have to be a person entitled to compensation first.

Then there's the third party settlement, and then you look actuarial.

And in this case--

Unknown Speaker: What happens if your actuarial calculations are wrong and the employer is in fact liable for more than what the settlement was?

Does he end up coughing it up?

Mr. Clark: --Well, he... both the party... the actuarial determination would have to be made by the administrative judge in the formal hearing and if either party... yes, they can appeal.

Unknown Speaker: No, no.

But it turns... in the event it is wrong, he lives longer and therefore is entitled to more money than we had guessed at the time of the settlement, what happens?

The employer has to pay that additional amount.

Right?

Mr. Clark: Yes.

Unknown Speaker: The risk is on the employer.

Mr. Clark: Yes, sir.

Unknown Speaker: Why... if there had never been a settlement, she was... would have been entitled to compensation under some provision of the act other than 933(f).

Right?

Mr. Clark: I don't I think I follow your question.

Unknown Speaker: If there had never been any settlement at all, there never was a settlement offer, your client would have been entitled to compensation under the act, but not 933, some other provisions of the act.

Mr. Clark: My client would have been entitled to compensation under section 9 of the Longshore Act for death benefits.

Unknown Speaker: Yes, but not 933(f), some other thing.

Mr. Clark: Of course, not.

Unknown Speaker: Yes, of course, not.

Mr. Clark: Yes.

Unknown Speaker: Now, if there is a settlement and it requires approval--

Mr. Clark: Yes, sir.

Unknown Speaker: --and she didn't get it.

Mr. Clark: It requires--

Unknown Speaker: Suppose it did.

Suppose you lost on that.

Mr. Clark: --May I be precise?

It requires approval if settlement is less for the compensation--

Unknown Speaker: Yes, correct.

Mr. Clark: --for which she--

Unknown Speaker: Suppose that applied and she didn't get it.

Why isn't she still entitled to compensation under those same other provisions since (g) only blocks compensation under (f)?

(g) only applies to not getting compensation under (f).

It doesn't apply to not getting compensation at all.

So, why isn't she still entitled to compensation under all the other provisions?

That's what I've been unable to figure out, and for whatever reasons I won't go into that would help me to understand that how the statute works.

Mr. Clark: --I believe the shorthand answer to that is, one is that section 33(g)(2) says that failure to obtain a prior written consent from the employer and carrier terminates or forfeits your rights to compensation and medical benefits.

And number two, the answer is that Cowart decided that issue adversely to the position that I think the situation you're addressing.

Unknown Speaker: Thank you.

Mr. Clark: Basically in the dissent.

The point is, if you look in... and it's right there in our briefs, pages 12 through 18.

It basically says this, that even the Ninth Circuit in the Witthuhn case cited in our brief says... and they use the words vest... that a widow's claim for death benefits under section 9 vest at the time of the death of the worker on whom she is dependent.

And to address Justice Ginsburg's question a moment ago with some of the other counsel, it is possible... and it's on page 21 of the Director's brief.

It is possible for a wife to be living separate and apart under section 9 from her husband at the time of death as long as it's not due to her fault and not be dependent and still be entitled to section 9 benefits.

Think of the things that could have prevented Mrs. Yates from ever being entitled to compensation: death.

She may have predeceased Mr. Yates, and Mrs. Yates today is 88 years old.

Unknown Speaker: That can be figured out actuarially just as when he is going to die can be figured out actuarially.

So, you could compute that into the calculation, couldn't you?

No?

Mr. Clark: Yes, sir, you could.

But what I'm referring to now is why, consistent with the cases cited in my brief on page 12 though 18, which go directly opposing... opposed to what the petitioner is advancing here.

As I understood it, they said that her entitlement... entitlement... arose at the same time as Mr. Yates' diagnosis with asbestosis, which is--

Unknown Speaker: Thank you, Mr. Clark.

Mr. Salloum, you have 3 minutes remaining.

Rebuttal of Richard P. Salloum

Mr. Salloum: Thank you, Mr. Chief Justice.

I think it's very important--

Unknown Speaker: Mr. Salloum, Mrs. Brinkmann gave a different answer to the question about is... who is a potentially qualifying widow.

She seemed to suggest that somebody who came into the picture after the injury could be a qualifying widow.

Mr. Salloum: --Your Honor, that's the first thing I was going to address.

I don't believe that's correct.

The act provides that it's the wife of the worker at the time of his injury that is entitled to compensation at his death.

If he was not married at the time of his injury or if he changed wives at the time... before the time of his death, that wife that married the worker after his injury would not be entitled to compensation.

Only the wife married to him at the time of the injury would be entitled to compensation.

If the Court holds, as the Government and as the respondents want the Court to hold, it would mean that no employer would be entitled to any credit for any third party recoveries made by a wife when she releases her wrongful death claims during the lifetime of her husband.

They would not be entitled to any credit--

Unknown Speaker: Of course, that was the rule for 12 years prior to Cowart, wasn't it?

Mr. Salloum: --I'm sorry, Your Honor?

Unknown Speaker: That was the rule that was generally applied for 12 years prior to Cowart, wasn't it, by the Benefit Review Board?

Mr. Salloum: Yes, that's correct, Your Honor.

And the Benefits Review Board since 1991 have changed their position on a person entitled to compensation four times: one in Force v. Director, one before the Fifth Circuit in Cowart.

They again changed their position before this Court after certiorari was granted in Cowart, and now they change their position for the fourth time in this case.

We think it's very important to call to the Court's attention, as we did in the briefing, that the Director has passed a regulation which is section 20 C.F.R. 702.281 that says that the employer approval requirements of section 33(g) and the employer credit entitlements under section 33(f) shall apply to every person claiming benefits under this act.

Unknown Speaker: Why can't the employer just say no?

If the employer says, no, I won't approve the settlement... he says, no... then the woman never gets any money?

Mr. Salloum: No, that's not correct, Your Honor.

If the employer says, I won't approve the settlement, she is guaranteed compensation from the employer under the Longshore Act.

Unknown Speaker: That... if the employer says, no, I won't approve the settlement, the employer has to pay the whole thing.

Mr. Salloum: The whole thing.

Unknown Speaker: Okay.

So, if she notifies the employer, she just notifies the employer, and at that point the employer says, no, she gets all the money.

Mr. Salloum: That's not correct, Your Honor.

Unknown Speaker: If the employer says, no, she gets ordinary compensation.

Mr. Salloum: No, Your Honor.

If she notifies the employer and says I have a third party settlement for less than the compensation I'm entitled, and the employer says no, and she settles regardless, under 33(g) she would be barred.

But if she says, okay, I won't accept the third party settlement, then the very least she would get would be her full compensation under the Longshore Act.

That's the least she would get.

All they have to do is come to the employer and say, I have a third party settlement.

It may be for more, it may be for less.

Will you approve it?

If the employer does not approve it and she does not accept the third party settlement, the very minimum she would get--

Unknown Speaker: Thank you, Mr. Salloum.

Mr. Salloum: --Thank you, Your Honor.

Chief Justice Rehnquist: The case is submitted.

Attribution:

The OYEZ Project

Featured:

Henderson v. United States - Oral Argument

Fri, 09 Jan 2009 14:49:48 +0000

Case:

Henderson v. United States

Media File:

95-232_19960319-argument.mp3

Related Transcript:

1995_95_232_argument.xml

Transcript:

Argument of Richard A. Sheehy

Chief Justice Rehnquist: We'll hear argument next in Number 95-232, Henderson v. United States.

Mr. Sheehy, you may proceed.

Mr. Sheehy: Thank you, Mr. Chief Justice, good morning, members of the Court:

The Court has granted review in this case on two issues.

First, does the 120-day service requirement of Rule 4 of the Federal Rules of Civil Procedure supersede the forthwith service requirement of the Suits in Admiralty Act?

Number 2, if not, does the district court have authority to extend the time for service provided under the Suits in Admiralty Act under appropriate circumstances?

Petitioner Henderson submits to the Court that the answers to both questions are in the affirmative, and would request this Court to reverse the judgments of the lower courts and remand this case for trial on the merits.

First, the 120-day requirement in Rule 4 supersedes the forthwith service requirement of the Suits in Admiralty Act.

There are three basic reasons for this conclusion.

Number 1, the forthwith service requirement is procedural, so it was invalidated by the Rules Enabling Act when Rule 4 was amended in 1966 and 1982.

Second, a holding that the forthwith requirement prevails would violate and frustrate congressional intent and the policies underlying the act and the Federal Rules of Civil Procedure.

Finally, even if the forthwith service requirement is not procedural, the 1982 amendments to the Federal rules were done by direct legislative action, so they would invalidate the forthwith requirement.

Unknown Speaker: Well, the Rule 4(j) as I read it, Mr. Sheehy, simply says that if a complaint is not... if service is not made on a defendant within 120 days it shall be dismissed.

It doesn't say you invariably have 120 days in which to serve a complaint.

Mr. Sheehy: Mr. Chief Justice, I think that the legislative history and the comments made by the advisory committee, et al. indicate that the 120 rules, there is no exception to it, and that in fact the parties have 120 days to serve--

Unknown Speaker: Well, and to what extent are we... do we defer to legislative history in this area?

Mr. Sheehy: --Your Honor, because in 1982 this particular rule was reviewed to great extent by Congress, as the Court is aware, the submission by the Court was not adopted in total by the Congress, and there was a review by the Congress and this very issue was discussed, namely, under what provisions would the 120 days be put into the rule.

Unknown Speaker: It was discussed by whom?

Mr. Sheehy: There is a... Professor Siegel in his analysis of the rules, the advisory committee, and the judicial conference.

The original submission by this Court to Congress for the 120-day rule, the 120 days was there.

There was a suggestion by this Court about service by mail, which eventually was changed, and there was also no submission by this Court of a good cause extension.

What happened is, Congress, upon suggestions by lawyers, particularly in California, concerned about the certified mail provision and also about the fact that there was an absolute 120-day shall-be-dismissed provision, and the... there were suggestions made that were discussed by Professor Siegel--

Unknown Speaker: Well, how does that bear on how we read a written rule?

Mr. Sheehy: --Well, my point exactly is that the rule itself says, and I think the Government has conceded in its brief on page 20 that there's a clear implication that a party has 120 days to serve under Rule 4, that there are no exceptions for it, it's not a guideline, it's not a suggestion, but a party has 120 days, and I think--

Unknown Speaker: Well, but there certainly is room for another statute, which we have here in the Suits in Admiralty Act, to have a different requirement, and you can read both statutes and give effect to both, that for a suit in admiralty it has to be served forthwith, and if it's not a suit under that act, then you might have a longer time.

I mean, that is the argument the Government makes, and it certainly is one that is plausible, isn't it?

Mr. Sheehy: --With all respect, Your Honor, I disagree.

Let us assume for a moment, just to make it a little bit clearer, that instead of forthwith, the act would have said 50 days, or a particular number, so it becomes clear.

So in effect, we have one statute that says the Government can be sued in 50 days in admiralty, the Government in all cases can be sued in 120 days.

In effect--

Unknown Speaker: But that's not what 4(j) says.

Mr. Sheehy: --Your Honor--

Unknown Speaker: What it says is that if a service is not made on a defendant within 120 days, it shall be dismissed.

It doesn't say you invariably have 120 days.

Mr. Sheehy: --With all respect, Your Honor, I understand the Court's position.

I think that the legislative history of this, the discussions that were going forward, indicate that there was an attempt to have a bright line rule and to make uniform service in terms of time upon all defendants.

Unknown Speaker: But they just weren't able to put it into words, I gather.

Mr. Sheehy: Well, Your Honor, with all respect, I think that they did.

I think the way that the statute reads leaves the clear implication, if not expressly, that a party has 120 days before the Court will dismiss the case, and the way that I think that--

Unknown Speaker: If we disagree with you on the reading, then what are you going to argue?

Mr. Sheehy: --Well, if you find there is no conflict, then the Rules Enabling Act probably does not apply.

Now--

Unknown Speaker: But then that would be a question of first view for us, because the... as I understand it, the district court and the court of appeals threw it out because they said it doesn't matter what Rule 4 means, service must be made forthwith.

It's only if you're wrong on your first point.

If Rule 4 takes over all service against the United States, then we have an argument about what 4, Rule 4 means.

But the first question, I thought the only question before us is, is the admiralty statute, does it survive Rule 4?

May there be more than one way, one time limit for serving the United States, or was Rule 4 meant to cover all service on the United States?

Is there any other instance besides this admiralty provision where there's an instruction for serving the United States other than Rule 4?

Mr. Sheehy: --Your Honor, I am not aware of any.

I am not aware of any.

And my point in the enactment of Rule 4 and the history of Rule 4, especially in the 1982 amendments, is that because the marshalls were being taken out of the process and prior to 1982 it was more or less a due diligence standard under Rule 4, governed, of course, by the parameters of the statute of limitations and also motions to dismiss for want of prosecution, this issue really did not arise very often.

In 1982, when the marshalls were taken out of the process to a large extent, there was then a suggestion that we have a time limit in order to make sure that there was not undue delay, and I think that it is clear in the discussions in the various committees that there was a search for a bright line test and also a search for a time that would take the discretion out of the hands of the district court.

And, in fact, there was a discussion and a comment by a Member of Congress, and it's cited in the brief, having to do with the fact that we want to avoid extended and protracted litigation over the ambiguity of the time frames of Rule 4.

Unknown Speaker: But I've got a question about your case that perhaps you can explain to me.

Could you not have said, we don't want to get into this whole problem that time has run so long and there have been snafus with the clerk's office, we're still safe under the 2-year statute of limitations, we'll just dump that first complaint, file a new complaint, serve it forthwith, and we're still under the 2-year limit.

Why wasn't... could you have done that?

Mr. Sheehy: I think the trial counsel probably could have as a technical matter.

I suspect... two comments.

Number 1, the statute of limitations was close to running, because the statute in fact ran at about the time that the Government was served, that is, the Attorney General was served.

Number 2--

Unknown Speaker: But you could have in August of '93.

Mr. Sheehy: --Well, the statute of limitations--

Unknown Speaker: It hadn't run yet, had it?

Mr. Sheehy: --Well, the statute of limitation would have run August 27 of 1993, so therefore, it was--

Unknown Speaker: Right.

Mr. Sheehy: --It was very close.

Unknown Speaker: So on August 1 you could have done this.

Mr. Sheehy: Probably so.

Trial counsel I suspect believed that he had 120 days in which to serve, and therefore there was no need to dismiss and to refile.

But Your Honor is correct, and I think it's available to most litigants in this situation, you can dismiss and assuming that the statute of limitations hasn't run, start all over again.

But the Attorney General had received notice by mail pursuant to the statute back in May.

It was the United States Attorney for the Southern District of Texas that created the problem, and if the Court will recall, there was a problem with getting the proper seals from the district court.

A motion to effectively extend time was filed, which was granted by the trial court at that point in time, and again, I was not trial counsel, but I suspect that what happened is, once the trial judge granted that extension, there was no reason for counsel to believe that he had to file the suit all over again.

Unknown Speaker: Well, it would have been safer if he had.

Mr. Sheehy: Certainly the duplicate effort would have been safer.

We probably would not have been here.

Unknown Speaker: There was something else about why this was filed in Galveston rather than Houston.

What was that all--

Mr. Sheehy: Your Honor, I don't think it's in the record, but if I can make a couple of comments.

First, Galveston is the port city for Houston.

The Galveston court generally handles, and are very experienced in admiralty law.

The particular Federal judge there, Judge Kent, was a lawyer who practiced admiralty in the trial court.

I don't think there is any prohibition between filing it in Galveston versus filing it in Houston.

They are both part of the Southern District of Texas.

But certainly, with all respect to the judges in the Houston Division, Judge Kent is extremely familiar with admiralty cases.

Secondly... I hesitate to raise this in light of the issue that we're here on, but also the docket is much quicker in Galveston than it is in Houston, in large part because of the criminal docket in Houston, in the Federal courts there.

Thirdly, the operator of the vessel was Lykes Brothers, and they are located or have an office in Galveston.

And again, I did not make the decision, but those are explanations as to why, and I think rational reasons why, the case was filed in the Galveston Division rather than the Houston Division, although I think as a matter of law it really doesn't matter much, because they are both part of the Southern District of Texas.

Unknown Speaker: --Are there cases from this Court where we have held that the Federal rules supersede a statute?

Mr. Sheehy: Yes, Your--

Unknown Speaker: Or is this the first... would this be the first case?

Mr. Sheehy: --This is the first case of which I'm aware that reaches this specific issue about where you have a Federal statute dealing with service and the Rule 4 after the 1982 amendments.

I think Hanna v. Plumer certainly deals with the issue about whether Federal statutes, Federal rules supersede State law in diversity cases and I think, Justice Kennedy, certainly we can look to those cases for some guidance.

Unknown Speaker: But what about other rules, the Federal rules of Appellate Procedure, Federal Rules of Criminal Procedure, have any of those been deemed... or the Federal Rules of Civil Procedure, because it contains the supersession provision.

Have we ever interpreted those rules to supersede a statute?

Mr. Sheehy: Well, in the class action case, and it was the American Pipe & Construction v. Utah where the Court was interpreting Rule 23, having to do with class actions, there was a question as to whether the class certification process would toll the statute of limitations of a Federal statute.

And in that case this Court held that, in fact, the procedures and policies underlying Rule 23 were such that the Court did have the authority to toll the statute under Rule 23, the class action.

That is, that class, people who would be members of the putative class, would have the right to sue dating back to the filing of the original class certification action.

So in that particular case, the Court held that Rule 23 allowed that tolling even though the petitioner had argued in that case that it should not because the remedy and the statute of limitations were contained within the same statute.

In addition, not exactly directly on point to Your Honor's question, but in the Sibbach case there was a question about Rule 35 having to do with physical examinations, and there was an argument in that case that the rule dealing with physical examinations was not permissible because, in fact, it was such a fundamental matter... that is, the examination of the body... and the Court held that in fact it was a proper rule under the Rule Enabling Act.

Unknown Speaker: I'll look again at American Pipe.

Did it say that the statute was superseded, or that the rules would just be used to elaborate on the tolling doctrine that's always available under a statute of limitations?

Mr. Sheehy: Well, with all respect, it probably held... did not hold that there was a direct conflict.

Unknown Speaker: Yes.

Mr. Sheehy: The Government... I'm sorry, the American Pipe had argued that, in fact, the statute required one thing, and the rule could not be used to circumvent that.

In truth, I think what happened was the Court held that there is no direct conflict and, therefore, Rule 23 could be used and the court was not bound by the legislative intent in that case 'cos it was not clear, because it was not clear.

To answer Your Honor directly, this particular issue dealing with the forthwith requirement or a requirement in a Federal statute and Rule 4 to my knowledge has not been directly addressed by this Court, and I think it is a result of several things.

Number 1, most of the Federal statutes do not have this type of provision in them, and Number 2, that Rule 4, since it was amended in 1982, has the 120-day rule requirement.

The fundamental premise, and I agree it is--

Unknown Speaker: Counsel, may I go back to the colloquy you were just having?

There is certainly within the contemplation of Congress that there could be laws that would be displaced by the rules.

That's what 2072(b) says.

It says, the rules can't deal with substance, but all laws in conflict with the rules, or laws governing procedure in conflict with the rules shall be of no further force and effect once the rules take place, so it was Congress saying, if there are any laws governing procedure, those are displaced by the rules.

Mr. Sheehy: --Yes, Your Honor.

Unknown Speaker: If there's a conflict.

Mr. Sheehy: Yes, and that was going to be my next followup response to Justice Kennedy.

The reasons, I suspect, this has not come up is because the Rule Enabling Act is clear in this area, that if there is a conflict between a prior procedural statute and a rule, the rule is going to prevail and, in this particular case, it is our position that the forthwith requirement is clearly procedural.

It has to do with the way that a party is brought into litigation, and I am not aware of any situation where a method or timing of service could be considered anything other than procedural.

Once we get to that conclusion, that is, that the rule is procedural, and we get to the conclusion that there is a conflict, which I believe is clearly supported by the legislative history and the committee reports underlying the 1982 amendments to the Federal rules, then it is our position that the Rule Enabling Act in effect gives the priority to Rule 4.

Unknown Speaker: Well, may I ask, if we got that far, and I don't know that we do, section 2072 of the Rules Enabling Act refers to adoption of rules by the Supreme Court.

This was not a rule adopted by the Supreme Court, so presumably subsection (b) doesn't apply here.

Mr. Sheehy: Your Honor, there are two ways we can go at this.

First, our third point is that, in fact, this was done by direct legislative action, so therefore we need not get into the situation about whether it's procedural, or substantive, or jurisdictional, because if, in fact, it was done by Congress as direct legislative action, that act would have equal priority with the Rule Enabling Act and the Suits in Admiralty Act, and therefore this Court can decide--

Unknown Speaker: Well, of course, normally we try to give effect to all laws passed by Congress and, as the Solicitor General argues in its brief, it is possible to interpret and apply both the Suits in Admiralty provision and the Rule 4(j) adopted by Congress.

Mr. Sheehy: --And I think--

Unknown Speaker: In theory they can work, both be in effect at the same time.

Mr. Sheehy: --But I think they only can be in theory is if the Court rules out or determines that the 120-day requirement is effectively irrelevant.

As the Fifth Circuit held in this particular case, there are two timeliness requirements in this stat... that the plaintiff faced.

Number 1, the forthwith requirement in the Suits in Admiralty Act, and Number 2, the 12-day requirement in Rule 4.

My--

Unknown Speaker: Well, that just gets back to the earlier part of your argument--

Mr. Sheehy: --Right.

Unknown Speaker: --where we expressed some disagreement with your reading of 4(j).

Mr. Sheehy: Yes, Your Honor, that's correct, and... but I think that the... that it is in my view, anyway, in the view of petitioner, it is clear that what was intended in 1982 was to have a bright line test, and there is no exception in Rule 4 for admiralty cases.

There is no indication of any type that Congress intended to except admiralty cases from the provision of Rule 4.

Now, certainly--

Unknown Speaker: But you know, we use a lot of different principles in trying to reconcile two statutes.

Let's assume that we're dealing with two statutes.

First of all, we do have a principle that repeal by implication is not favored.

This would be a repeal by implication.

Secondly, we could certainly interpret, apply the rule that where you have an apparent conflict the more specific governs the more general.

Here you have one rule governing all filings, and another rule governing just a filing in the suits against the United States situation.

Why wouldn't we apply that?

Mr. Sheehy: --Your Honor, especially in the second, in terms of the specific versus general, if a later act covers the subject matter of the earlier act and is intended as a substitute, then that rule does not apply, and our position here--

Unknown Speaker: Well, I know, but we're arguing about whether it is intended as a substitute.

Mr. Sheehy: --That's right.

Unknown Speaker: I mean, that's the conclusion that we're driving towards, and one way we reconcile conflicting statutes is to say, well, when there are two, the more specific governs.

Don't you think that the admiralty statute, or the statute dealing with suits against the United States, covers a much more specific situation than the general Rule 4?

Mr. Sheehy: Yes, it does in terms of service, but my problem is, and our position is, is that Congress by... and subsequently by this Court, that by the enactment of Rule 4 and the 120-day service requirement and the specific methods by which service is allowed upon the Government, that there was a clear intent to have a uniform and comprehensive way of serving the Government, and I think that was intended to supersede any prior statutes, and I think we believe that is not only a reasonable but a compelling conclusion in light of the other policies and the other congressional intent that we have.

And I understand the Court's position, Justice Scalia's position with respect to general versus specific, et cetera, but we also have a number of principles having to do with legislative history and legislative intent.

Unknown Speaker: We've got a very peculiar situation in a way created by 2072(b), I take it, because if we assume there's a conflict, if this were a rule within the meaning of 2072(b), and it's procedural, then the rule is going to prevail, whereas if it's not a 2072(b) rule, and we're going to treat it as a congressional statute, we'd say that it wouldn't prevail, and that would be very odd to say that if it's a mere rule of this Court it prevails over the statute, but a specific act of Congress wouldn't.

Mr. Sheehy: I never would designate rules by this Court as mere rules--

Unknown Speaker: No, I don't--

Mr. Sheehy: --but I think either way--

Unknown Speaker: --I'll take care of the adjectives.

Mr. Sheehy: --Either way, though, I think the petitioner prevails.

Unknown Speaker: But it would be very strange if we said that a rule of this Court would prevail over the statute by virtue of 2071(b), but an intentionally enacted rule by Congress, i.e., one having kind of prime statutory force, wouldn't.

That would be strange.

Yes, take that.

He's helping you.

Yes.

He's... take it.

Mr. Sheehy: Yes, sir.

[Laughter]

I'll take it.

Yes, sir.

But I think, getting back to Justice O'Connor and Mr. Chief Justice, some of the comments you've made, and I want to talk for a second about this congressional intent, because I think it is important, because I think the Court has to view the whole question in terms of congressional intent.

What we know from the congressional history is, there was an intent to treat--

Unknown Speaker: When you're talking about congressional history, would you be very precise about what written documents you're relying on?

Mr. Sheehy: --Yes, sir.

First, there is clearly an intent to treat the United States in these cases in the same way as private parties.

Unknown Speaker: Now, where do... how do we deduce that?

Mr. Sheehy: I think that comes from the language of section--

Unknown Speaker: From--

Mr. Sheehy: --743 of the statute.

Unknown Speaker: --From the language of the statute itself.

Mr. Sheehy: Yes, sir, the Suits in Admiralty Act, and I think I would also point out that this Court has addressed at length the history of the Suits in Admiralty Act, the Shipping Act back in 1916 in prior court opinions, and so I'm not going to go through those in any great detail, but the Court has discussed all of these histories together, because issues having to do with the Public Vessels Act, et cetera, has arisen before the Court.

But clearly, because it is set forth in the statute itself, there is that intent to treat the United States as private parties, both in rules of procedure and in rules of substantive law, and that is in the statute, in section 743 of title 46.

Secondly, there is an intent to have cases decided on the merits.

Of course, this is included in the legislative history of the 1960 amendments to the Suits in Admiralty Act which was passed in order to broaden the scope of the maritime law.

Unknown Speaker: But that didn't change the forthwith requirement.

Mr. Sheehy: No, sir, it didn't.

It did not--

Unknown Speaker: Are you suggesting that the forthwith requirement, it tends not to have suits decided on the merits?

Mr. Sheehy: --Yes, sir, I do.

Unknown Speaker: Well then, why do you rely on something that was enacted in 1960 that conceivably... that, really, demonstrably did not change the forthwith requirement, to say we want suits decided on the merits?

That didn't have the effect of displacing the forthwith requirement.

Mr. Sheehy: No, Your Honor, but I think it is clear... I think that is an intent of Congress that has not changed, and I don't think it's an intent of this Court that has changed.

That is, that we want cases decided on the merits--

Unknown Speaker: Well, what do you think the--

Mr. Sheehy: --rather than technical aspects.

Unknown Speaker: --What was the intent of Congress when it passed the forthwith requirement?

Mr. Sheehy: Your Honor, I think it is very unclear as to what it was.

It is contained in about three lines of the legislative history which is cited, I think verbatim on page 5 of the Government's brief, where the question--

Unknown Speaker: Well, you would agree, I take it, that that tends to... in fact, your argument is that that tends to determine that suits won't be decided on their merits.

Mr. Sheehy: --Yes, sir.

Unknown Speaker: So we have one act of Congress that says suits won't be decided on their merits.

Mr. Sheehy: I think we have a provision of an act of Congress that was passed in 1920 that does cast doubt on whether cases will be decided on the merits.

I think we have got a rule that was suggested by this Court and adopted by Congress with some legislative changes in 1982 that make it clear that we want cases decided on the merits.

The trouble with the forthwith requirement, there are two problems.

The first problem is that we don't know how many days is forthwith.

There's no clear understanding, clear rule.

We know that--

Unknown Speaker: It didn't come out of the blue.

I mean, this forthwith requirement came in the law long before there were any Federal rules, and so it was the rule for admiralty so you didn't have to conform to the State procedure, you had something, the forthwith requirement.

Then the Federal rules come in and provide rules about service of process, so I don't think there was a decision that we didn't want to get to cases on the merits when the forthwith provision was made.

Mr. Sheehy: --But I think as a natural result of the forthwith requirement there was a recognition that the forthwith requirement gave rise to situations where the cases were dismissed short of the merits because of an uncertainty as to what forthwith meant, and there is a... the second half of this is, there is a disagreement and a misunderstanding as to the very definition of forthwith.

We have a disagreement between the Eleventh Circuit and the Fifth Circuit as to exactly what it means, and it's... and so not only do we have an ambiguity in the text itself of forthwith, or the meaning of forthwith, we have an ambiguity as to how many days does it mean.

And I don't think there's any question that because of that ambiguity and the lack of a bright line test, there is a situation where lawyers representing parties in admiralty do not know exactly if something has, if a case has been filed forthwith, and it gives rise to a situation where cases are not decided on the merits, or the whole forthwith issue is then litigated at great expense to the parties.

Unknown Speaker: Well, that's just saying that it's a bad statute, I mean, I guess, isn't it?

I don't... what does that have to do with our decision?

Mr. Sheehy: Because I believe--

Unknown Speaker: The decision is whether the earlier statute prevails or the later rule, and to say that the earlier statute is a bad statute doesn't affect me as to whether it should prevail.

However bad it is, it will prevail if it should.

Mr. Sheehy: --Leaving aside, and agreeing, perhaps, with the implicit understanding that it's a bad statute, that is not our position, that simply because it's bad this Court has the authority or the right to overturn it.

Our position is, is that in fact the Federal Rules of Civil Procedure have preempted it to the Rules Enabling Act.

It has nothing to do, really, with whether the statute is good or bad, although I certainly think the Court can consider the ramifications of the forthwith requirement in light of legislative history, in light of the purposes behind Rule 182, in reaching its decision that the Federal Rules of Civil Procedure were intended to and, in fact, did preempt the forthwith requirement.

Unknown Speaker: At what point in time, because the admiralty rules didn't come under the civil rules until relatively recently.

Mr. Sheehy: I think the safest position for petitioner is, it would have been after 1982, because we have not only the 1966 amendments, which unified admiralty and the civil rules, but then in 1982, for the first time we have, in our view, an express time limitation on service of process on the Government, which is 120 days.

With the permission of the Court, I will reserve further time for rebuttal.

Unknown Speaker: Very well, Mr. Sheehy.

Mr. Stewart.

Argument of Malcolm L. Stewart

Mr. Stewart: Mr. Chief Justice, and may it please the Court:

The requirement that the complaint in a Suits in Admiralty Act action be served forthwith upon the United States Attorney and the Attorney General appears in the same code section upon which petitioner relied as the basis for his suit against the Government.

That provision has not been expressly repealed, and petitioner's argument is that a repeal by implication has taken place.

Unknown Speaker: Well, now, is service of process a matter of procedure, do you suppose?

Mr. Stewart: In think as a general matter service of process would be more procedural than substantive.

The sub--

Unknown Speaker: What about the requirement, for instance, in Suits in Admiralty Act 742, that a copy must be sent by registered mail to the Attorney General as opposed to the Rule 4 provision that it can be by registered or certified mail.

Mr. Stewart: --We would say that that's a provision as to which we think certified mail would be acceptable in this day and age.

Certified--

Unknown Speaker: And you would say that that's a matter of procedure and that the Rule 4 supersedes there, or what?

Mr. Stewart: --Well, we would say it's a matter of procedure.

I--

Unknown Speaker: How do we get there?

Mr. Stewart: --I think the analysis is a little bit more complicated.

That is, first of all we have to decide whether there's a conflict, and we don't believe that there's a conflict between the forthwith service requirement and 4(j).

Unknown Speaker: All right, but let's focus for a minute on the registered mail or certified mail, where you can see a conflict.

Mr. Stewart: And the next question would be whether the application of the Federal rule to an action against the Government would have the effect of abridging or enlarging substantive rights or expanding or diminishing the jurisdiction of the district court, and we think that in this day and age, certified and registered mail are practical equivalents for the purposes for which this requirement was designed.

Certified mail didn't exist when the Suits in Admiralty Act was passed.

It didn't come into existence until--

Unknown Speaker: Well, would you look to section 2072 of the Rules Enabling Act to say that the rule prevails?

Mr. Stewart: --I think we would.

That is, even though this rule--

Unknown Speaker: Even though it wasn't adopted by the court.

Mr. Stewart: --That's correct.

Even though this rule was enacted by act of Congress rather than promulgated by the court, we think that section 20729(b) provides the best indication of congressional intent.

Unknown Speaker: Well, if that's the case, then how about the time for notifying the United States?

Is that not procedural as well?

Mr. Stewart: I think it is procedural, but again, the first question is whether there's a conflict, and in saying that 2072(b) in our view governs the interpretation of these statutes, we want to make clear that we regard this as a concession rather than an affirmative claim.

That is, if 2072(b) were out of the picture, if all we had was section 42 and Rule 4(g), we would be prepared to make very vigorously the argument that Justice Scalia was outlining to the effect that, even if there is a clear and irreconcilable conflict, the specific statute would prevail over the general.

We believe that 2072(b), by stating that a law in conflict with a Federal rule is of no further force and effect makes it difficult for us to make that argument, so... but we still believe that 2072(b) and its requirement that laws be superseded only if they're in conflict with the Federal rules governs the proper construction of--

Unknown Speaker: Mr. Stewart, let me ask you about the Government's contention that there is no conflict here.

Your position is that all that Rule 4 says is that it will be dismissed after 120 days, not that it can't be dismissed before that.

Mr. Stewart: --That's correct.

Unknown Speaker: Is that correct?

I take it, then, that the Government believes that under Rule 83, a district court could enact a provision requiring... requiring service to be made sooner than 120 days.

Mr. Stewart: Well, the district courts have local rulemaking authority under 2071... 28 U.S.C. 2071, which says that the district courts may make local rules not inconsistent with the--

Unknown Speaker: That's right.

Mr. Stewart: --the Federal rules.

Unknown Speaker: And you say that such a rule requiring service to be made within 30 days, for example, instead of 120 is not inconsistent with rule--

Mr. Stewart: Well, we would say it's not in conflict with.

I think the meaning of the phrase, not inconsistent with, may be a little bit different, but even if we assume that they are the same thing, I think we'd have a different situation if a district court had made a local rule that purported to govern all Federal civil actions.

That is, the test we've enunciated for determining whether the rules are in conflict is first, is compliance with both possible, and second--

Unknown Speaker: --But Mr. Stewart, if we go on that, it seems to me you're just saying Hanna & Plumer is not at all relevant here.

I mean, you could have service under the Federal rules and in-hand service as well, you could meet the State requirement and the Federal requirement, but there, this Court has said very clearly the extra requirement of State law does not apply, Rule 4 governs, because this is a procedural matter and it isn't substantive.

Why shouldn't the same apply to a Federal statute as applied to the Massachusetts law in the diversity context?

Mr. Stewart: --Well, first of all, the Court in Hanna v. Plumer didn't rely on the language which says that laws in conflict with the Federal rules are of no further force and effect and, indeed, it didn't frame the inquiry as whether a rule that--

Unknown Speaker: Well, of course it couldn't because it was dealing with a State law, not a Federal law.

Mr. Stewart: --That's correct, and I think the inquiry--

Unknown Speaker: So the question was, is it a procedural question or a substantive question, and the court's position I thought was, if the rule covers it, it governs procedure in the Federal courts.

Mr. Stewart: --Well, I think the question whether a particular State rule should be incorporated into Federal practice is a fundamentally different one from the question of whether a Federal statute passed by Congress specifically intended to regulate the filing... the service of complaints in the Federal courts should be of no further force and effect.

It's a serious thing to reach the conclusion that an act of Congress has been impliedly repealed, more serious than to say that a State rule which is primarily intended for State court actions will not be incorporated into Federal practice.

Unknown Speaker: Mr.--

--Is there... there's another instance,... it's the question that I had asked counsel for the petitioner.

I don't know of any other instance where there's a separate instruction for how you serve United States where the Rule 4 on service is not the instruction.

Is there another statute, other than this admiralty statute, that says something different from what Rule 4 says?

Mr. Stewart: No.

Unknown Speaker: So it is one of a kind.

Mr. Stewart: That's correct.

Unknown Speaker: Mr. Stewart, do you know of any cases in the district courts or the courts of appeals in which the 120-day requirement has been read as you have read it, as being merely an outer limit rather than as establishing a right?

Mr. Stewart: Well, there... I remember reading one district court case in which the plaintiff raised both title VII and State law claims, and the complaint was served within 120 days, but the district court held that it had not been served... the plaintiff had not exercised diligence in filing the suit as promptly as it could have... in serving the complaint as promptly as it could have been filed, and held that the lack of diligence was dispositive as to dismissal of the State law claim but not as to the Federal law claim.

Unknown Speaker: Leaving a State law claim aside, then, I take it your theory has never recommended itself to any lower court.

Mr. Stewart: Well, the lower court simply haven't passed on this question one way or the other.

Unknown Speaker: But why would it be?

I mean, if you tell your children, if you don't make your room tidy by bedtime, no television.

So then they clean up their room, and you say, no television.

I didn't say what would happen if you did.

You try that one.

[Laughter]

I mean, that's why I say, what conceivable reason could there be for the... what reason would there be when you have a set of rules which say at the heading, statutes to the contrary, laws to the contrary are to be wiped out, and you also have a specific congressional statute here, don't we at least have to have some reason, some theory why Congress would have wanted this to survive, and I can't think of one.

I mean, as far as my knowledge of this is concerned, the reason that they had this forthwith at the beginning was because at that time the marshalls served after you filed the complaint, and so it was always forthwith, and they didn't want that rule to govern because it happened the particular admiralty rules required you to arrest the defendant, and that wouldn't be very happy when the U.S. was the defendant, and therefore they wrote this word into a statute at a time when it made sense.

Now it makes no sense, and so, unless it makes some sense, why wouldn't we assume that Congress wanted this new statute that they passed with uniform rules to apply?

So what sense is it, what reason could Congress have had for not wanting to get rid of this now out-of-date requirement?

Mr. Stewart: Well, it was certainly the case in 1920, and I think it is still to some extent the case, though not as greatly, that admiralty cases are different in the sense that the witnesses are ordinarily likely to be seamen, they may be transient, they may take off at a moment's notice, it's a little bit more difficult to put your case together after the fact, and Congress had that evidence before it in 1920, and the question of whether changes in the modern world have made that notion superfluous is really one for Congress rather than for--

Unknown Speaker: Well, is there any indication that their reason for passing this word forthwith was other than what I said?

That is, is there any reason to think that their reason for putting forthwith in the statute related to the fact that sailors might leave port, as opposed to the fact of what I'd said, that the normal practice was, the marshall made the service, it always happened forthwith, the admiralty rules which had the libelant make the service didn't really seem to work because of the arresting requirement, and therefore we'll write the rule forthwith, because that's what always seems to happen.

That's one theory.

The other theory is the sailors are going to run back to England or something.

Mr. Stewart: --Well--

Unknown Speaker: What's your view of it?

Mr. Stewart: --Under the old rules, it did not follow automatically upon service of a libel in personam in admiralty, that the person would be arrested.

That was discretionary and it depended on various factors set forth in the rule.

Second, as to what Congress had within its contemplation, we know that Congress was informed during the consideration of the Suits in Admiralty Act that it was particularly important to have admiralty suits promptly disposed of because of the possibility of sailor witnesses disappearing.

We don't know whether that had anything to do with Congress' decision to enact the forthwith service requirement.

The forthwith service requirement was inserted earlier on, pursuant to a brief colloquy between the proctor in admiralty and the committee.

As to why it still might make sense, we do think there is still a need on the part of the Government, albeit a lessened need, to have service as promptly as possible both in order to accumulate evidence and in order to assess as accurately as possible the scope of its contingent liability.

Unknown Speaker: I was going to ask you if the Justice Department had ever recommended that Congress put the courts out of their misery by repealing this statute.

I take it from your answer that that wouldn't necessarily be your recommendation.

Mr. Stewart: Well, I don't know that we've made a recommendation one way or the other.

I do know in--

Unknown Speaker: It is a trap for the attorneys.

There's no--

Mr. Stewart: --Well, we would disagree with that.

First of all, the requirement that the complaint be served forthwith is not buried in an obscure provision of the code.

It's in section 742, the same section that petitioner's trial counsel had to read in order to know that he had a waiver of sovereign immunity.

Unknown Speaker: --Well, Mr. Stewart, would you answer my question, since I think it is relevant to whether it is a trap or not, suppose on August 1st, counsel said, I see I'm running into this technical problem.

They have actual notice, because the notice got to the U.S. Attorney and they're arguing in court about this, so I'm going to withdraw this complaint, start a new one, I'm still under the 2-year limit, serve forthwith.

That could have been done, couldn't it?

Mr. Stewart: That could have been done.

Unknown Speaker: So this is... it's not a case about actual notice, because there was timely notice to the Attorney General, right, so it's only the local U.S. Attorney.

Mr. Stewart: That's correct.

Unknown Speaker: When did the United States have actual notice of this lawsuit?

Mr. Stewart: Well, I suppose you would say that when the Attorney General's Office received the complaint, that the Government as a Government had notice, and that was in May of 1993.

Unknown Speaker: So we're not talking about actual notice to the U.S. We're talking about something that could have been cured by withdrawing one complaint and filing another, no substantive difference, and yet the United States is insisting that this is somehow under subject matter jurisdiction.

It really is very strange.

Mr. Stewart: Well, again, part of your question, in essence, goes to the wisdom of requiring plaintiffs in suits against the United States to serve both the United States and the Attorney General, and a plausible argument could be made that service on the Attorney General should be good enough.

The Congress that passed the Suits in Admiralty Act didn't believe that to be the case, and the Federal rules require--

Unknown Speaker: I wasn't questioning that.

I was just saying, we look at this whole picture, and we say, it was imperfect service, certainly, but there was actual notice, yes.

Service could have been perfected very easily.

And then we have Federal rules that say, you can amend, and that relates back... I'm just wondering in this case why we couldn't say, gee, we should treat it as though that lawyer had filed a fresh complaint.

He still... as long as he would have been under the wire with the statute of limitations.

Mr. Stewart: --I mean, that is not the way it's done even under... where Federal Rule 4(j), or now 4(m), is the only requirement.

That is, it may often be the case that a suit is filed way before the statute of limitations is going to expire, and the person may delay for more than 120 days without good cause and may have his suit dismissed even though he could have dismissed on his own and moved for leave to refile.

That's not an anomaly that's unique to the Suits in Admiralty Act.

I think our basic point is that in the individual case the Government gained something from immediate service.

In any particular--

Unknown Speaker: Well, what does the Government gain that a private party wouldn't gain?

I was going to ask you that question anyway.

Why is the Government's interest in forthwith service somehow different from that which a private defending party would have?

Mr. Stewart: --I think in part it's the idea that, because it's the Government, there are an enormous number of potential suits filed against us, and consequently an increased desire for expeditious resolution of each one, but I think--

Unknown Speaker: But I mean, why?

Why does it matter whether these enormous number of suits first come to your attention within 10 days or 120 days?

I mean, I just don't see the point.

Mr. Stewart: --And I think... I think perhaps the stronger argument for making a different rule for the United States would be that every, potential maritime defendant has this interest to some degree, but as to suits against private parties, it may often be impracticable to locate a defendant immediately.

Unknown Speaker: Yes, but of course, the United States has the same interest in all the litigation against it.

It really doesn't differentiate the Federal tort claims.

Let me ask you another question that--

Mr. Stewart: I mean--

Unknown Speaker: --Justice O'Connor... may I just get this one out first.

I just want to be clear.

How is it that you can say the requirement of... the permission to make service on the Attorney General by certified mail does not conflict with the statute, where as the time question does?

That's the one thing I just don't understand your position on.

Mr. Stewart: --We didn't say it wouldn't conflict.

We would... in fact, we say the reverse.

We say that the time provision in the SAA does not conflict with the Federal rule.

Unknown Speaker: But the certified doesn't, either, because that's just a broader permission in the same way that 120 days is.

Mr. Stewart: Well, the certified mail I think is a closer question.

The--

Unknown Speaker: I don't see how you can reconcile your inconsistent positions here.

Mr. Stewart: --The provision in the Federal Rules of Civil Procedure say... says that the Attorney General shall be served by registered or certified mail, and I think we could plausibly read that as conferring--

Unknown Speaker: Well, it also says they shall be served within 120 days.

They both use shall.

Mr. Stewart: --No, actually the Federal rule... Rule 4(j) doesn't say the complaint shall be served within 120 days.

It says, a complaint that is not served with 120 days shall be dismissed.

It really doesn't, by its terms, address at all--

Unknown Speaker: It certainly requires service within 120 days.

Mr. Stewart: --It certainly provi--

Unknown Speaker: So that if the earlier statute had said, you can serve in 130 days, it clearly would have been in conflict.

Mr. Stewart: --That's exactly right, and when petitioner's counsel, Mr. Sheehy, says that Rule 4(j) admits of no exceptions for particular categories of cases, we quite agree.

That is, there is no statutory provision that permits a suit to go forward when the complaint has been served more than 120 days after filing without a showing of good cause.

As to the prior question about why has this... why has our view not been accepted by the district courts, I think it hasn't either been accepted or rejected by the district courts simply because in the vast majority of cases there are no other statutes that would require the complaint to be served within a shorter period of time.

There are two senses in which a rule could be said to be exclusive.

It could be exclusive if... I'm sorry, Justice Stevens.

Unknown Speaker: I just also want to be clear, is a complaint served within 20 days served forthwith?

Mr. Stewart: I think there is no categorical answer to that question.

Our view is that--

Unknown Speaker: It clearly is under... the plain language, certainly forthwith doesn't mean 20 days, does it?

Mr. Stewart: --I would agree.

That is--

Unknown Speaker: It has to be within 48 hours--

Mr. Stewart: --Well, we would say that forthwith means as quickly as practicable, and--

Unknown Speaker: --Well, certainly you can always do it the same day.

Mr. Stewart: --Certainly almost always.

There may--

Unknown Speaker: So those cases that have allowed 30 days, or 40 days, they're all wrong.

Mr. Stewart: --Well, we think that they... there are not--

Unknown Speaker: They were not faithful to the rule.

Mr. Stewart: --There are not a lot of cases.

There are a couple of them that have allowed delays on the order of 18 to 24 days.

We think that as an initial matter, that's longer than the plaintiff's counsel should take.

As a practical matter--

Unknown Speaker: Not what they should take, what they are required by the plain language of a statute to take... forthwith.

Mr. Stewart: --No, I agree that as an initial matter we would say in virtually every case it would be practicable for plaintiff's counsel to serve the complaint in far less than 20 days from the date of filing.

As a practical matter, in terms of construing the statute 75 years after its enactment, it may be that the cumulative experience of district courts have in some sense contributed a climate in which something that would not otherwise be reasonable may now be deemed reasonable.

Unknown Speaker: But once you acknowledge that, why couldn't the climate be, well, we ought to treat all Federal cases the same?

One hundred and twenty days is forthwith if 30 days is.

Why couldn't you read it that way?

Mr. Stewart: Well, I think the requirement that the complaint be served forthwith... clearly, Congress was trying to do something in enacting the SAA.

It could have allowed time for service simply to be governed by the background principles governing private parties, and it required that the complaint be served--

Unknown Speaker: What were those before the Federal rules?

Mr. Stewart: --The admiralty rules of 1844 and then of 1920 would have governed the question of service upon the United States Attorney.

Because the admiralty rules provided for marshall's service, timing--

Unknown Speaker: Well, tell me what the period was.

We have a statute in 19-whatever that says forthwith.

What was it before there was that statute?

Mr. Stewart: --All the admiralty rule said that when the libel is filed with the court, the summons is given to the marshall, and the marshall serves it.

It didn't state a time period.

As a practical matter, timing, even had there been no requirement of forthwith service, because you had marshall's service upon the United States Attorney, timing questions would have been unlikely to arise.

There would still have been a separate question of mailing to the Attorney General, which would still have been the plaintiff's responsibility.

Timing questions could have arisen then had the plaintiff been dilatory, and probably those would have been resolved by incorporation of State law.

That was the way district courts tended to approach procedural questions in admiralty cases that were not directly addressed by the admiralty rules.

Unknown Speaker: Mr. Stewart, would you tell me again why it is that it doesn't have to be by registered mail, even though the provision you say governs requires that?

Mr. Stewart: I think the way we would spin it out, and certainly either link in our chain is not infallible, we would say first the question is, are they in conflict, and we would say, we would interpret the current provision of the Federal rules that permits either registered or certified mail upon the United States Attorney, or upon the Attorney General, to confer an affirmative right to use either method, equivalent to a rule that says plaintiff may serve by either registered or certified mail.

Second, we would say that application of that rule to a Suits in Admiralty Act action would not have the effect of expanding or diminishing substantive rights, because for all practical purposes registered and certified mails are now equivalent.

The reason you see the reference to registered mail only in the Suits in Admiralty Act was simply that certified mail did not exist at that time.

It didn't come into being until 1955.

Unknown Speaker: Well, you could say the same thing about E-mail.

Are you going to allow them to do it by E-mail, too?

Mr. Stewart: Well, if it was done by E-mail it would be in prohibition of the Federal rules as well as--

Unknown Speaker: Well, that's only because E-mail didn't exist when the Federal rule was written.

I really find that an extraordinary way to interpret a statute, that since the technology did not exist at the time, you don't have to use the technology that's set forth in the statute.

Mr. Stewart: --Well, it wouldn't be an interpretation of the statute alone.

That is, it would be an interpretation of the statute in conjunction with the Federal rule, in conjunction with the Rules Enabling Act, which says, all laws in conflict with the Federal rules shall be of no further force and effect unless the effect is to expand or diminish substantive rights.

So I think we would be doing a fine analysis under the Rules Enabling Act.

It wouldn't be that we were saying the SAA itself has been amended.

We would be saying that the SAA can be superseded.

Unknown Speaker: Wouldn't it help you out of this problem you have if you simply thought that later enacted statutes of Congress which specifically say that they're overturning laws to the contrary, or imply it because of the rule, do overturn laws to the contrary, and unless there is some good reason why this earlier law would be thought to survive, it doesn't.

Mr. Stewart: We have no problem with that formulation.

Unknown Speaker: All right, and then the only... the reason that you've come up with for thinking that it is meant to survive is because it had to deal in part with the disappearing seamen witnesses, although that wasn't a strong enough reason for the rules makers to deal similarly with private people whom the SAA was designed to treat the Government similarly to.

Mr. Stewart: Well, the reason we think it survives is that first, it's in the statute and hasn't been repealed.

Unknown Speaker: Yes, but it's a later rule that says the later... well, you see the point.

Mr. Stewart: I see your point, but in our view the Suits in Admiralty Act requirement simply is not in conflict with the Federal rule, and we have to presume that Congress used that phrase for a reason.

That is, Congress could have said in the Rules Enabling Act, all laws governing procedure in the Federal courts or all laws governing the subject matter covered by these rules shall be of no further force and effect.

It could have invoked notions of field preemption.

Unknown Speaker: If they are in conflict, then what's the answer?

Mr. Stewart: If they are in conflict, then the old statute is superseded except to the extent that application of the Federal rule would expand or diminish the jurisdiction of the district court.

Unknown Speaker: Doesn't the Government have a longer time to answer a complaint than a private litigant?

Mr. Stewart: That's correct.

We have 60 days to answer a complaint.

Unknown Speaker: Sixty days instead of 30?

Mr. Stewart: That's correct, and you... the fact... Congress has seen fit to propound a special rule for Government defendants in admiralty cases.

It has not--

Unknown Speaker: But Mr. Stewart, that was done before there were Federal rules, and one can understand why there are no other laws in conflict, because when the rulemakers first came up with the Federal rules, the admiralty rules were separate, so the civil rules saw that there was no other way of serving the United States.

It was all in Rule 4.

Then it seems somebody wasn't looking in 1982 when the admiralty rules were made part of the Federal rules.

I don't understand why there would be this special provision only for admiralty.

They're not the same... the Federal Tort Claims Act is no different, and if we're concerned about sailors who might flee to some foreign country, isn't that more so of a private libel, where there might be a foreign sailor... these are U.S. vessels, right?

Mr. Stewart: --Well--

Unknown Speaker: We don't employ too many foreign sailors.

Mr. Stewart: --Well, in this case and the case of the Maritime Administration generally, they're cargo ships, and in fact the MarAd's needs as to staffing levels fluctuate greatly depending upon national emergencies or need for transport generally, so it's not the case that people employed by MarAd typically stay employed by MarAd for long periods of time.

The one point we do want to stress is that to say that these two provisions are in conflict, and to state that as a general proposition, would, we think, have highly disruptive effects on other areas of law, both in terms of conflicts between Federal statutes and in terms of Federal preemption of State law.

That is, if it were the case that whenever Federal and State law generally govern the same subject matter, and the Federal law prohibited... permitted something that the State law prohibited, the State law was thereby preempted because the two were in conflict.

Unknown Speaker: No, but that's not--

--We already have that in Hanna & Plumer.

We have exactly that, and the State law was... did have to be set aside.

Mr. Stewart: Well, the holding in Hanna v. Plumer was that the State law would be... would not be incorporated into Federal practice, not that it was of--

Unknown Speaker: It meant that the Massachusetts requirement of in-hand service would not apply.

They would have been out of court if Massachusetts law applied.

It was a provision that governed service, and it didn't apply.

It seems to me that the two cases are very close.

Mr. Stewart: --Well, I think the crucial difference between them is that the court there was dealing with the question of whether to incorporate a State procedural rule that was intended for... primarily for use in the State courts but might also be applied in Federal courts or in diversity actions.

Unknown Speaker: Wasn't the consequence that the case would be out of court as untimely, if you had to follow the State procedure--

Mr. Stewart: That's correct.

Unknown Speaker: --say it was timely, and the same thing here.

Mr. Stewart: The same thing is true here, except that here the consequence of petitioner's argument is that a Federal statute passed by Congress specifically to regulate service of process in the Federal courts in this particular class of cases will be held to be impliedly repealed, and we think that the Court has repeatedly cautioned that implied repeals are disfavored.

The Court should not--

Unknown Speaker: Repealed it except for the service by registered mail.

That's why it's been impliedly repealed--

Mr. Stewart: --Again, we think--

Unknown Speaker: --to test that one... yes.

Mr. Stewart: --The point is, we get to that... the Court could disagree with our treatment of certified mail.

We get to that by saying that the rule--

Unknown Speaker: It seems to me the Court must disagree with it in order to come out the way you want us to on the other issue.

Mr. Stewart: --No.

Because of the way that the rules are worded... that is, the rule governing registered or certified mail says, shall be served by--

Unknown Speaker: If we disagree with you on whether there's a conflict we would certainly have to disagree with you on the registered mail point.

Mr. Stewart: --Well, I think even if you disagreed with us as to whether there was a conflict, it would still be plausible to say that the difference between... to permit certified mail in addition to registered mail would not have the effect of enlarging or diminishing the substantive rights of the parties because those two are functional equivalents for present purposes, whereas to permit a suit to go forward when the time limitation that Congress deemed important enough to include in the suits in Admiralty Act to begin with has not been complied with would have the effect of both increasing the jurisdiction of the district courts and enlarging the substantive rights of the--

Unknown Speaker: But then you're just backing off from your concession that it's procedural.

Mr. Stewart: --No, I don't--

Unknown Speaker: I thought you conceded that it was.

Mr. Stewart: --I don't think we're... we're not backing off from the concession that it's procedural.

2072(b) doesn't speak in terms of whether the rule to be superseded is procedural.

It says that these rules... meaning the Federal rules... shall not expand or diminish substantive rights, and it can be--

Unknown Speaker: I think within the context of the rule that's what procedural means.

It's something that does not--

Mr. Stewart: --Well, it--

Unknown Speaker: --and I guess I was just misled by your use earlier in speaking of it as concededly procedural.

You didn't mean to say that.

Mr. Stewart: --I think we would analo... we would say it's procedural in the sense that it deals with the filing of documents rather than the--

Unknown Speaker: But in terms of what counts for the decision of this case, it's not procedural, it is substantive.

Mr. Stewart: --In terms of what counts for the decision of this case, nonapplication of the forthwith service requirement would have the effect--

Unknown Speaker: It would.

Mr. Stewart: --of expanding or diminishing substantive rights, and the court has repeatedly stated--

Unknown Speaker: So on that proposition you disagree totally with Judge Friendly in--

Mr. Stewart: --We do disagree with Judge Friendly as to that proposition, yes.

Unknown Speaker: --Thank you, Mr. Stewart.

Mr. Sheehy, you have 2 minutes remaining.

Rebuttal of Richard A. Sheehy

Mr. Sheehy: Thank you, Mr. Chief Justice.

Two quick points.

Number 1, the concession by the Government that the certified versus registered mail analysis that in effect it does not matter in this procedure is also important to another argument that the Government made both in its brief and at the beginning here.

One of the arguments by the courts that have discussed this issue is the location of the forthwith requirement being in section 2 of the act.

The argument is, is that procedure is in section 3, substance is in section 2.

The concession that the certified mail and registered mail is, in fact, procedural, falls into section 2 and therefore casts great doubt on the argument that there should be a distinction based on the location of the forthwith requirement in the statute.

Number 2, the point that Justice Souter was talking about, namely, a reason why the Government should be treated differently in admiralty, something about locating sailors, et cetera, three quick points.

Number 1, no reason to treat the Government differently than private parties in that context, because all parties have that problem.

Number 2, there is no reason to treat the Government differently in admiralty cases versus any other cases that the Government may be involved in.

And Number 3, recall that there's a statute of limitations of 2 years.

If there's going to be problems with somehow locating witnesses, and that's the reason why we have a forthwith requirement, the statute of limitations of 2 years is going to cause a problem far beyond any service requirement.

For the reasons we have stated in the brief and in the argument, we would request that the Court reverse the judgments of the courts below.

Thank you.

Chief Justice Rehnquist: Thank you, Mr Sheehy.

The case is submitted.

Unknown Speaker: The honorable court is now adjourned until tomorrow at ten o'clock.

Attribution:

The OYEZ Project

Featured:

Jaffee v. Redmond - Oral Argument

Fri, 09 Jan 2009 14:49:46 +0000

Case:

Jaffee v. Redmond

Media File:

95-266_19960226-argument.mp3

Related Transcript:

1995_95_266_argument.xml

Transcript:

Argument of Kenneth N. Flaxman

Chief Justice Rehnquist: We'll hear argument first this morning in Number 95-266, Carrie Jaffee v. Marylu Redmond.

Mr. Flaxman.

Mr. Flaxman: Mr. Chief Justice, and may it please the Court:

In Rule 501 of the Federal Rules of Evidence Congress delegated to this Court the power to recognize new evidentiary privileges consistent with the principles of the common law as interpreted in the light of reason and experience.

Even before Rule 501, when this Court had full common law power to recognize privileges, the Court was very parsimonious in the privileges that it would recognize.

The Court recognized a common law privilege for trade secrets, a common law privilege for informants, a common law privilege for military secrets.

The Court rejected a news gatherer's privilege, and an accountant's privilege.

Following the adoption of the Federal Rules of Evidence, the Court has continued to be very reluctant to establish new privileges.

The Court rejected an editorialist privilege, a State legislator's privilege, an accountant's work product privilege, and an academic peer review privilege.

Unknown Speaker: When were the Federal Rules of Evidence adopted, Mr. Flaxman?

Mr. Flaxman: 1973, I believe.

Unknown Speaker: Thank you.

Mr. Flaxman: And the Court limited spousal privileges.

The respondents in this case ask the Court to fashion a new, broad privilege that would apply to any mental health professional engaged in psychotherapy or counseling.

The number of persons engaged in these professions is countless, and the number of conversations that would be protected by this new privilege are countless.

Unknown Speaker: Well, it's not countless if they're licensed and we confine the privilege to those who are licensed.

I assume you could go to every State and count how many licenses there are.

Mr. Flaxman: Well, except the States are each day creating new counselor status positions.

I think California, there's now somebody who, after 2 years of an associate's degree, becomes a certified alcoholic counselor.

Unknown Speaker: But are they licensed, or they have some State certification, or is there some document?

Mr. Flaxman: Yes.

They receive a State license, and they're--

Unknown Speaker: Well then, I assume they could be counted.

Mr. Flaxman: --They can be counted, but it would be... it would be a very large number.

Unknown Speaker: And Mr. Flaxman, they would be counted in a diversity case, is that not right?

Mr. Flaxman: That's absolutely correct.

In a diversity case, the Rules of Evidence require the Federal courts to apply State law in determining privileges.

This was not a diversity case, this case.

There was a Federal civil rights claim.

Unknown Speaker: Wasn't there one State claim?

In addition, there was a wrongful death claim under State law?

Mr. Flaxman: There was a supplemental claim brought under State law.

The principle that was applied by the district court that was not questioned by the district court is that when there is a State law claim and a Federal claim, that the Federal... and there is no Federal privilege, the rule would be to admit the... admit evidence.

Unknown Speaker: Is there precedent that holds that the State--

Mr. Flaxman: There's precedent among... that principle is recognized, I think uniformly within the circuits.

It's consistent with the legislative history.

I don't think it's been ruled on by this Court.

It was not challenged by the respondents in the court of appeals, and I don't believe it's within the questions that are presented in the petition for certiorari.

I think the question here is that the agreed question is whether there should be a Federal privilege for this kind of evidence, and this kind of evidence that we're focusing on is not confidential communications about dreams or feelings.

Unknown Speaker: --Well, is it different in kind from the kind of evidence that would be privileged under the clinical... under a privilege for clinical psychologists?

Does the social worker here learn something different in sort of standard counseling--

Mr. Flaxman: Well--

Unknown Speaker: --from what a clinical psychologist learns and hears?

Mr. Flaxman: --Well, we don't know, on this record, what kind of therapy was actually being administered.

As a general rule, I think a legislature could make a rational distinction between social workers and clinical psychologists and psychiatrists.

Unknown Speaker: Because?

Mr. Flaxman: Because they'd be different kinds of therapy.

Unknown Speaker: Well, what is the difference?

Mr. Flaxman: Well, I think as a rational distinction a legislature could say that a psychiatrist and a clinical psychologist are going to be more concerned with psychic reality, and a social worker would be more concerned with helping somebody deal with their... the problems that they're facing.

We... in the record--

Unknown Speaker: I mean, that sounds very sensible just based on the language we're using.

As a matter of positive knowledge, is that correct?

Mr. Flaxman: --It's--

Unknown Speaker: It sounds like a reasonable answer, but is it true, I guess is what I'm saying.

[Laughter]

Mr. Flaxman: --That's... unlike the number of people who are licensed, that's an answer... that's a question that can't really be ascertained.

It can be debated by scholars.

It can be debated by interest groups.

Unknown Speaker: Well--

--Well--

--can we say that there simply are no clear, standard cases on which we can answer that question?

In other words, psychiatric social workers do all sorts of things.

Who knows what they're doing, is that sort of what you're saying?

Mr. Flaxman: That's correct.

Our approach.

Unknown Speaker: Well, Mr. Flaxman--

--The brief of the American Psychiatric Association I take it, correct me if I'm wrong, supports the Respondent here, and they don't ask that we draw the line that you're suggesting in this colloquy with Justice Souter.

Mr. Flaxman: That brief--

Unknown Speaker: Or am I incorrect?

Mr. Flaxman: --No, I think you're absolutely correct, but I think they're incorrect in reading the record in this case.

The record in this case doesn't support the claim that there was psychoanalytic counseling going on with the social worker and respondent Redmond.

The record in this case doesn't reflect anything about the type of therapy--

Unknown Speaker: Well, but I infer from their position that formal psychiatric or psychoanalytic sessions are not necessarily different in their objectives than clinical counseling in the more ordinary sense, assuming there's an aura of confidentiality about it, where the confidentiality is expected on both sides.

Mr. Flaxman: --No, I think, and I... perhaps I'm misreading their brief, but I think they make a distinction between psychoanalysis and counseling.

Psychoanalysis is dealing with psychic truth.

Not with what really happened, but with a person's feelings and emotions and dreams about what happened, and about someone's childhood.

Unknown Speaker: Well, Mr. Flaxman, I take it you would not extend in a Federal case a privilege to a psychiatrist.

Mr. Flaxman: That's correct.

Our primary position is that there should not be any privilege.

Unknown Speaker: Right.

Mr. Flaxman: That when there are confidential interests, and we--

Unknown Speaker: Regardless of what differences there might be--

Mr. Flaxman: --Right.

Unknown Speaker: --in the therapy or the nature of the questions.

Mr. Flaxman: That's our primary position, is that the confidential interest... and we concede that there are confidential interests in counseling and therapy.

Unknown Speaker: And yet all 50 States recognize some form of privilege in this area.

Mr. Flaxman: Well, some of the... they recognize some form of privilege.

Some of those privileges amount to nothing more than the balancing test, the district judge's, the trial judge's discretion that we're seeking in this case, and the States have made different exceptions, and many States--

Unknown Speaker: Now, the court below didn't adopt a clear rule of, there is a privilege and that's that.

It went on to balance the need for the evidence?

Mr. Flaxman: --Well, the court below adopted a very unconventional definition of cumulative.

It said, I think, that because there were four witnesses who were family members of the deceased, and one police officer on the other side in the civil rights case, our learning what the police officer told the social worker, our learning that the police officer had had memory problems, would be cumulative.

Unknown Speaker: In the area of privileged communications, do the Federal courts typically engage in a balancing in determining whether to apply the privilege or not?

Mr. Flaxman: The one circuit that has recog... the Second Circuit has expressly adopted a balancing test, and describes the privilege that it was adopting as nothing more than a requirement that the district judge balance the privacy interest with the opponent's need to know.

Unknown Speaker: Well, that's really not much of a privilege, is it, because if everything is going to be balanced at the time the evidence is sought to be admitted... the time the privilege is supposed to work is when the person either feels free or does not feel free to confide to the professional therapist.

Mr. Flaxman: Well, we're not seeking disclosures about confidences about feelings or about dreams.

We want to know what the client... what the respondent told the social worker about the incident.

That's... the district judge said that's all we can get.

Unknown Speaker: Well, but that may be a very difficult line to draw.

You say you don't want the person's mental reflections and that sort of thing, but it's not always easy to separate those from an account of what happened.

Mr. Flaxman: Well, it... the district judge and the magistrate judge who supervised the deposition of the respondent didn't have any trouble dealing with that.

It was very clear that we could ask, what did you say about the incident, and when we tried--

Unknown Speaker: Mr. Flaxman, correct me if I'm wrong about this, but I thought that part of what you were asking did involve mental impressions to the extent that you were asking for the notes of the social worker.

Mr. Flaxman: --The notes of the social worker only came up after the respondent testified that she could not recall any of her conversations with the social worker.

Unknown Speaker: Are you now conceding that mental impressions of the social worker, mental impressions reflected in her notes, are things to which you do not have access?

Mr. Flaxman: As a matter of relevancy, that's correct, and the district judge said that we could not get her notes when he was ruling on the relevancy question.

The district judge said we could get notes that relate to conversations about the incident.

It was after--

Unknown Speaker: But the conversations, the notes, mix in, as lawyer's notes do, the social worker's own mental impressions with things that the patient or client said about what happened.

Mr. Flaxman: --Well, we were given three pages of heavily redacted notes which made clear the things that the client had said about the incident.

One of those things is that in November of 199--

Unknown Speaker: But I... please just straighten me out on what your position is.

Do you say... I thought you were objecting to the redactions.

Mr. Flaxman: --Well--

Unknown Speaker: I thought you were saying, we want her notes, without the editing.

Mr. Flaxman: --We objected to that.

The district judge ruled against us, and we agree with the... we're not challenging the district judge's ruling on that, and we've never challenged the district judge's ruling on the redactions.

The district judge held a hearing to inquire about these I don't recall, these 15 I don't recalls that came from respondent Redmond when she was asked about the contents of conversations with the social worker.

After hearing and observing the character and demeanor of the witness, the district judge said, these denials, these I don't recalls are wholly incredible, and the only way to refresh her recollection is to review all of the notes, and the review just for counsel's eyes only.

That order about production of the notes wasn't about a privilege or about confidentiality, it was to help us cross-examine her.

It was sanctioned for this meeting.

Unknown Speaker: The propriety of that particular resolution I'm not sure is before us, or that the Court is interested in, but it seems to me very odd.

It's standard for you to ask a witness, have you talked to your attorney, and the unprepared witnesses will say, oh, no.

Well, everybody knows that that's incredible, but if the witness responds in that incredible way, that isn't an open door to then inquire about all the conversations with the attorney.

Mr. Flaxman: That's correct.

The attorney client--

Unknown Speaker: And it seems to me that if this is any kind of a privilege, that the same rule should apply here.

If she makes a statement that's incredible that she didn't go to a social worker or that she didn't discuss the event, I don't think that necessarily opens the door under the trial judge's ruling to explore everything that was said under any conventional privilege.

Now, if you want to have some different sort of privilege here, I suppose that's something altogether separate.

Mr. Flaxman: --Well, there's a vast difference between conferring with an attorney who is an officer of the court, who is interested in following the law and not helping somebody change their recollections of an incident, to going into therapy.

Unknown Speaker: Mr. Flaxman--

--You say an attorney isn't always interested in changing someone's recollections of an incident?

[Laughter]

Mr. Flaxman: An attorney should not be helping somebody change their recollections and commit perjury, and if an attorney does that, then the attorney is subject to sanctions.

If a therapist does that, and helps somebody sleep at night after they did a horrible thing, then the therapist has succeeded.

The goals of therapy are quite different than the goals of an attorney.

An attorney is ultimately answerable to the court as an officer--

Unknown Speaker: Mr. Flaxman, you said earlier that the privilege recognized by some States, which amounts to a balancing of the importance of the information versus the... I guess, what, the confidentiality of it, that that isn't much different from what would be applied anyway in the absence of a privilege.

Mr. Flaxman: --In some States there is a judicial override.

There's a privilege, there are exceptions to the privilege, then there's a final exception that provided, however, the trial court may in the exercise of its discretion--

Unknown Speaker: Allow it in.

Mr. Flaxman: --Or allow it to be disclosed.

Unknown Speaker: Yes, but that still is a privilege of sorts, isn't it?

Mr. Flaxman: It's a privilege--

Unknown Speaker: I mean, it's different from the rule which would be applied otherwise.

Mr. Flaxman: --That's correct.

It's like the Second Circuit's privilege that they're... just a balancing test.

Unknown Speaker: Now, any of these privileges that exist in other States, has any of them been adopted judicially, as a matter of common law?

Are they all legislated?

Mr. Flaxman: The Alaska supreme court adopted in State v. Allred, and the Arizona supreme court.

Other than that, all of the privileges have been adopted by legislative action.

Unknown Speaker: What is the nature of the Alaska and the Arizona privilege adopted--

Mr. Flaxman: The Alaska privilege applied to psychologists and psychiatrists did not extend to social workers, and the Arizona--

Unknown Speaker: --Absolute?

Mr. Flaxman: --That's correct.

Unknown Speaker: It's an absolute privilege.

Mr. Flaxman: No.

Well, I think all of the privileges have been limited with the duty to disclose that someone is dangerous, or that there's a child abuse admission.

There are no absolute privileges in psychotherapy in any State in this--

Unknown Speaker: And that includes Alaska and Arizona?

Mr. Flaxman: --That's correct.

There are always instances where a therapist has to... is required by law to make disclosures, and so there can't be this guarantee of absolute privilege which the American Psychiatric Association would urge and would seek.

Unknown Speaker: You asked us to recognize a line between statements about fact and statements about feeling, and I confess that I'm skeptical that we could do that.

What if somebody says to the social worker or the psychologist,

"I feel bad about killing somebody. "

Does that... is that on one side of the line or the other?

Mr. Flaxman: I think that's on the side that we don't get.

I feel bad is--

Unknown Speaker: Even though there's an admission in it, that implicit admission in it?

Mr. Flaxman: --That's right.

I think that invades the--

Unknown Speaker: Why isn't

"I feel bad, feeling about killing somebody. "

fact?

I mean, I--

Mr. Flaxman: --Because the district judge could say that kind of response is the response that anybody would feel, even if it was justifiable, and the probative value of that statement that I feel bad--

Unknown Speaker: --What if he says, "I didn't do it"?

Mr. Flaxman: --The statement, I didn't--

Unknown Speaker: "I didn't kill anybody".

That's his defense.

"I did not kill anybody".

Mr. Flaxman: --"I didn't kill anybody" is a statement about the incident.

That should be disclosed.

Unknown Speaker: No, but that's... no, I'm saying that's his legal position.

"I did not kill the decedent that I am accused of killing. "

Go back to our statement.

"I feel bad about killing somebody. "

Is it subject to the privilege?

Would it be subject to a privilege or not?

Mr. Flaxman: I would... well, I would say that a district judge would require that that denial which... would have to be disclosed, that it wouldn't be privileged, but it would be... that's a... that should not be hidden from the Government in a criminal case, or from a plaintiff in a civil case.

Unknown Speaker: So you really can't... there's no analytical distinction, then--

Mr. Flaxman: Well--

Unknown Speaker: --between the fact and the feeling.

Mr. Flaxman: --That's why we believe this should be a question for the district judge, who can balance all of these factors.

In your hypothetical--

Unknown Speaker: Yes, but even on your balancing theory I thought the judge was supposed to draw... maybe I misunderstood you.

I thought the judge was supposed to draw a line between fact and feeling, and what he was supposed to be balancing--

Mr. Flaxman: --No, I--

Unknown Speaker: --was the appropriateness of admitting the fact as against other interests.

Mr. Flaxman: --I think that's one of the things that the trial judge could be balancing, whether it's fact or feeling, but also the need for the evidence.

If we had a hypothetical where the--

Unknown Speaker: I don't understand that, the need for the evidence?

You... you come here saying there is no privilege, but you're going to let the court balance the need for the evidence?

Mr. Flaxman: --With the confidentiality interests that are involved in therapy.

Unknown Speaker: Oh, okay, so you're not denying there ought to be a privilege.

Mr. Flaxman: I--

Unknown Speaker: We're just arguing about what the scope of it ought to be.

Mr. Flaxman: --No, I am denying there should be... if there's a privilege, then--

Unknown Speaker: You see, I thought you were arguing on the basis of relevance before.

I thought you were saying, the facts come in because they're relevant, the feelings don't come in because they're not, because they aren't relevant.

Mr. Flaxman: --That's--

Unknown Speaker: There's no balancing there at all.

There's a determination of what's fact and what's feeling.

Mr. Flaxman: --Well--

Unknown Speaker: But now you say there is a balancing, so you're willing to acknowledge that some stuff doesn't get in because it's subject to--

Mr. Flaxman: --No, what I'm willing to say is that in an appropriate case the district judge could say that these feelings have so little probative value, even if they are relevant they should not come in.

If there was a case where there were five police officers who each say that the officer who shot, shot because the man had a knife and was about to plunge it into the back of another man.

The therapy admissions or therapy statements of that fifth police officer who did the shooting would have so little probative value that the confidentiality should not be invaded.

Unknown Speaker: --That really isn't much of a privilege at all.

Mr. Flaxman: We are saying that there should not be a privilege, that the district judge should determine... should consider relevancy, should consider the confidential interests, should consider the impact of disclosure on the person who's in therapy--

Unknown Speaker: Why?

Why... yes.

Mr. Flaxman: --Because there are confidential interests involved in therapy.

Unknown Speaker: Privilege.

Mr. Flaxman: Not privilege, just--

Unknown Speaker: No, not a privilege, just confidential interests.

You want us just to call it a confidential interest instead of a privilege, is that it?

Mr. Flaxman: --If there is a privilege, then the burden shifts of who has to pierce the privilege.

In this case, what happened is that the respondent came forward and said, I don't have to demonstrate that it was... we were having psychotherapy.

I don't have to demonstrate that there was a promise of confidentiality.

I don't have to demonstrate that disclosure would interfere with the counseling relationship.

All I have to do is to say, I saw a social worker and discussed things with her.

Unknown Speaker: If you wouldn't have to say that, why, in fact, are you saying that there should not be a privilege?

I'm not interested in the semantics.

I'm interested in this.

If a woman goes to a doctor and has a physical problem, there is a privilege for confidential communications between the patient and her doctor made for the purposes of diagnosis or treatment if the doctor is licensed by the State to perform that diagnosis or treatment.

Why should there not be precisely the same privilege where the doctor is engaged in diagnosis or treatment of a mental or emotional condition?

Why should there be a distinction--

Mr. Flaxman: Well--

Unknown Speaker: --between a doctor who diagnoses a... or treats a mental or emotional condition and a doctor who treats a physical condition, provided that the State licenses the individual to engage in that diagnostic or treatment profession?

Mr. Flaxman: --The lower Federal courts, and this Court has never reached the question, have--

Unknown Speaker: I'm not saying what the lower--

Mr. Flaxman: --Have--

Unknown Speaker: --I'm saying what reason is there--

Mr. Flaxman: --Well--

Unknown Speaker: --in logic or policy that would make that distinction?

Mr. Flaxman: --There is no reason for a physician-patient privilege, and that privilege is not recognized in the Federal courts.

Unknown Speaker: No, look, I'm asking why... if a person goes to a doctor and the person has cancer, or the person has a skin disease, or the person has an itch, there is a privilege for statements made for purposes of diagnosis or treatment.

Why is it any different where, instead of seeing the doctor for purposes of diagnosis or treatment of your itch, or cancer, or worse, you see that doctor or psychologist or social worker licensed to engage in psychotherapy because you have a very serious, or less serious, mental or emotional problem?

Why in reason or logic or policy should one try to make such a distinction?

Mr. Flaxman: Well, the distinction... there are many distinctions that can be made, but the fundamental difference that... the fundamental reason why there's no need to make that distinction is because there is no privilege for when you go to a doctor and say I've a broken foot.

Unknown Speaker: I'll try once more.

I'm not saying what there is.

I'm asking what there should be.

Mr. Flaxman: Well--

Unknown Speaker: And what I'm asking is... it's only me who's interested, perhaps, but I am interested.

I'm interested in, is there any reason in logic, in policy, is there any reason, other than what ten courts have held?

I'm not interested, for this question, what courts have held in the past.

I'm interested in whether there is a reason in logic or policy for drawing the line that I just referred to.

Mr. Flaxman: --There's no reason for drawing the line.

If the respondent had gone to a physician and in the course of getting treatment for a broken finger said, I can't remember pulling the trigger, that statement should be admissible in the Federal--

Unknown Speaker: Am I not being clear?

I'm saying, what is the difference whether you go to a physician to diagnose your cancer, skin disease or whatever, or if you go to a licensed psychologist or psychotherapist or psychiatrist for diagnosis or treatment of a mental or emotional condition?

That's why I... that's the line I'm talking about.

What's the reason for drawing that line?

Mr. Flaxman: --If the Court is willing to recognize a privilege for physician-patient discussions, then the Court should recognize a psychotherapist privilege.

The Court has never recognized the doctor-patient privilege, and the Court should not recognize the psychotherapist-client privilege.

The... in United States... in Upjohn v. United States, the Chief Justice, then Justice, wrote that the Court doesn't lay down broad rules but decides only the cases before it.

Unknown Speaker: I suppose if we did recognize a doctor's privilege, which we haven't, it would be a lot less expensive, wouldn't it?

Very few people go to a doctor in order to get treatment and say, "I just killed somebody", whereas a lot of people go to psychiatrists and say,

"I just killed somebody; I feel really bad about it. "

Mr. Flaxman: I don't think that--

Unknown Speaker: I mean, don't you think the cost of the psychiatrist privilege would be a lot higher than the cost of the medical doctor's privilege?

Mr. Flaxman: --Oh, it would be, especially in a case like this, where we've had the disclosures made in November of 1991, which is 5 or 6 months after the incident, that respondent Redmond was unable to recall pulling the trigger.

That kind of information, which is relevant to her believability and her ability to come into court and recall and recount what happened, is the kind of information that would be shielded from us by the broad privilege that's sought in this case.

Unknown Speaker: How many States have a physician's privilege, by the way?

Mr. Flaxman: Virtually all States.

Unknown Speaker: Virtually all of them, and yet we don't in Federal courts.

Mr. Flaxman: That's correct.

Unknown Speaker: Is it... has this Court affirmatively disavowed a medical doctor's privilege, or has it just never passed on it?

Mr. Flaxman: The Court has never passed on it, and--

Unknown Speaker: And how about the circuits?

Mr. Flaxman: --The circuits have uniformly rejected a physician privilege.

The circuits have generally recognized a clergyperson privilege, and this Court has in dicta suggested that there should be such a privilege, and that privilege is quite different than the privilege with the therapist.

If somebody goes to a clergyperson and talks about having done a horrible thing, the clergyperson probably will not engage in 50 or 75 therapy sessions to help the memory.

Unknown Speaker: Suppose the clergyperson is also a licensed social worker?

Mr. Flaxman: The question then is whether the sessions were clerical in nature or counseling in nature.

My understanding of clerical--

Unknown Speaker: Suppose the answer is both?

Mr. Flaxman: --That would be a difficult question for the district judge to balance.

[Laughter]

If the clergyperson was doing therapy and was helping somebody recall memories, or get a sharper recollection of what happened, then it would not be what the organized religion probably would recognize as clerical... clerical-penitent counseling, and I think that it's more likely that a clerical person who's confronted with someone who's confessing to a horrible thing would encourage that person to go turn him or herself in, rather than helping them process it in their mind so they remember it differently.

I'd like to reserve the rest of my time.

Unknown Speaker: Very well, Mr. Flaxman.

Mr. Rogus.

Argument of Gregory E. Rogus

Mr. Rogus: Mr. Chief Justice, and may it please the Court:

In enacting Rule 501, Congress declared that the Federal courts are to look to reason and experience in determining evidentiary privileges.

The intent behind the rule as evidenced both in the legislative history and as acknowledged by this Court in the Trammel decision was not to freeze the law of privilege as it existed but to allow the courts flexibility to develop rules of privilege, once again in line with reason and experience.

Now, it is true, as Mr. Flaxman has mentioned, that decisions of this Court have counseled caution in terms of the recognition of privilege.

However, this Court has also stated that when a privilege promotes sufficiently important interests to outweigh the need for probative evidence, recognition and implementation of a privilege is proper.

Now, in this case the Seventh Circuit acted consistent with its authority under Rule 501 and consistent with this Court's directive in Trammel, and determined that reason and experience justified a recognition--

Unknown Speaker: Mr. Rogus, did the court also balance the need for the evidence with its notion of the privilege?

Mr. Rogus: --The court did engage in balancing.

Unknown Speaker: Is that the way that Federal courts normally approach the exercise of a privilege?

Mr. Rogus: That is a technique and approach that is used, was mentioned by the Second Circuit in the Doe case.

In actuality, what's at work here--

Unknown Speaker: Do you defend that as an appropriate approach?

Mr. Rogus: --The need for balancing is appropriate particularly with respect to determining when an exception to a privilege should come into play.

Unknown Speaker: Well, would that be the approach in the case of an attorney-client privilege, for example?

You balance the need?

Mr. Rogus: Well, I think that has been done in the sense of the recognition of the privilege, for example, in the crime fraud exception.

While the attorney-client privilege is recognized, and there are no exceptions that come to mind immediately, the crime fraud exception--

Unknown Speaker: But that's not balancing.

That's a boundary to the privilege.

It prevents the abuse of the privilege.

It has nothing to do with the requirements or the exigencies of, and the necessities of producing the information in a particular case, and I'm quite surprised that you support the balancing idea.

I should have thought you would say the privilege either should be granted or it shouldn't.

Mr. Rogus: --Well, the privilege, the underlying privilege should be granted.

The balancing that we refer to is the balancing of the important interests that are served by recognition of the privilege against the need for probative--

Unknown Speaker: Is that a case-by-case balancing?

Mr. Rogus: --No, not a case-by-case balancing.

It's a balancing at the policy level weighing the interests, the important interests against the need for probative evidence.

Unknown Speaker: Well, is it possible--

--You mean, it wouldn't matter if it's the only source of this evidence available in this particular case?

That wouldn't be taken... I had thought that some of the State courts that do balancing would consider that thing, that this thing couldn't be obtained from any other source, it's crucial to the defense or the plaintiff's--

Mr. Rogus: If it were the only evidence available on a material element of the cause of action, that would certainly affect the balancing.

Unknown Speaker: --Well, I'd consider that case-by-case, myself.

If you subscribe to what Justice Scalia just said, the purpose of the privilege is to enable the attorney or the doctor, whoever, to tell a person, I suppose, that what you say here is confidential, and if instead he has to say, what you say here may be confidential, depending on how some future court may balance the need for your testimony, that's much less disposed to get people to confide.

Mr. Rogus: Well, in this instance, psychotherapists do need to tell their patients... patients do need to know that their communications are confidential.

Unknown Speaker: So you're in effect starting with a presumption of confidentiality subject to case-by-case balancing on the issue of exception?

Mr. Rogus: A presumption of confidentiality, yes.

Unknown Speaker: Okay.

Mr. Rogus: In this--

Unknown Speaker: That's a much weaker sense of privilege, then, than the sort of classic privileges.

Mr. Rogus: --We did not and we are not asking for recognition of an absolute privilege.

Unknown Speaker: Okay.

Do--

--Well, how does it stack up with the doctor?

That's what I'm... I'm thinking now about the other side.

They're saying, well, it should be the same as the doctor who is diagnosing you for cancer and so forth.

Mr. Rogus: If--

Unknown Speaker: Where I'm confused, and don't really understand it too well, is the status of the doctor and client.

Suppose I have a physical injury in a court.

Are you asking for a psychiatric privilege where the doctor with the physical injury wouldn't have one?

Are you saying treat both alike?

How... what is the relationship?

Mr. Rogus: --I'm saying if anything the psychotherapy... the psychotherapist-patient privilege should be recognized more readily than the doctor-patient because of, once again, the nature of the privacy interests involved, the types of things that people go to see psychotherapists for, the types of things that people discuss with psychotherapists that touch upon very... not always, but very frequently very highly private personal concerns, so if anything there's more reason to recognize the psychotherapist--

Unknown Speaker: And you think that the doctor doesn't receive communications of a very private nature from a patient?

Mr. Rogus: --I am not saying that a doctor does not.

Unknown Speaker: Do you concede that there is no doctor-patient privilege recognized in the Federal courts?

Mr. Rogus: I believe that it has not been recognized, but that is not--

Unknown Speaker: And that that is the general rule in the courts, in the circuits?

Mr. Rogus: --I believe that is correct.

Unknown Speaker: So what are we supposed to do about that?

That's what I mean.

Are we supposed to say that just a psychiatrist and psychoanalyst have it, that doctors in general, what are we supposed to do about that?

Mr. Rogus: Psychotherapists should have the privilege.

We are looking at a function, psychotherapy, which does not always coincide with medical practice.

There is some overlap, but it does not always coincide.

We are zeroing in on the function of psychotherapy, the treatment and diagnosis of mental and emotional conditions and disorders.

Unknown Speaker: You keep speaking of the function, and if you speak in terms of the function, then there's never any question as to whether, if a privilege for psychotherapy is recognized, it would cover social workers, as in this case.

Let's assume that I agree that there ought to be a privilege so far as communications back and forth between the patient and a psychiatrist are concerned and the patient and a clinical psychologist are concerned.

Is there a difference between what the clinical psychologist does in the kind of standard case and what the psychiatric social worker does?

Mr. Rogus: My understanding, based upon what was developed in the record, and the research, and the information provided by the amici, is that the training, the education, and the functioning of clinical social workers approaches if not equates to what clinical psychologists do in terms of performing the psychotherapeutic function, of doing psychotherapy.

Unknown Speaker: But they don't have the advanced degree.

That's the only clearly standardized difference.

Mr. Rogus: Well, there is... I wouldn't say that one degree is more advanced than another.

There are a lot of Ph Ds, for example, in the clinical social work field, just as there are Ph D advanced degrees in psychology.

Much of the training, the clinical experience, as I believe was developed in the record with respect to Ms. Beyer, who... the clinical social worker who was involved in this particular case, demonstrates the amount of experience, the quality, the type of experience she had, much of which overlapped with that which a clinical psychologist--

Unknown Speaker: But I suppose--

--The method... I'm sorry.

I take it, in line with Justice Souter's questioning, that most States license clinical social workers and they pass some sort of an examination.

Mr. Rogus: --It is our understanding that of the 50 States that recognize privileges, 44 of them do, in fact, extend that privilege to clinical social workers.

Unknown Speaker: And do those persons who hold that privilege have a duty of confidentiality under their own professional ethical standards?

Mr. Rogus: Yes, they do.

I believe that that's set forth--

Unknown Speaker: But you're saying that the courts should not recognize what is generally understood as a duty of confidentiality, even in the patient-client, patient-doctor relation, much less this.

Mr. Rogus: --If that is what my previous remarks sounded like, that is not what I meant to say.

They should recognize privilege.

Unknown Speaker: I suppose I have a duty of confidentiality.

If somebody comes up to me and says, let's say my nephew comes up to me and says, you know, Unc, I want to tell you something in strictest confidence, and I say yes, you tell me that, I promise you I won't tell this to anybody.

I mean, is that enough that I've undertaken a duty of confidentiality to justify the creation of a privilege?

Mr. Rogus: But you are not engaging, under the facts as you've laid them out, in a psychotherapeutic.

Unknown Speaker: No, I understand that, but I just don't see the relevance of the fact that there is a duty of confidentiality.

There are duties of confidentiality in a lot of situations which we've simply, utterly ignored.

Parent-child, there's no parent-child privilege, for Pete's sake.

That's certainly a very confidential relationship.

Mr. Rogus: This arises in the setting of a professional approach to psychotherapy and the importance and value that society puts in--

Unknown Speaker: Yes, but--

Mr. Rogus: --having and maintaining such a profession for the purpose of aiding members of society, and in this particular--

Unknown Speaker: --That allows us--

--The fact that a client expects that his communications to an attorney are going to be confidential is relevant in our creation of the privilege, is it not?

Mr. Rogus: --It certainly is, an expectation of confidentiality, and there is an expectation of confidentiality and the protection of private communications when a patient engages in a psychotherapeutic--

Unknown Speaker: Okay, so we can draw the line simply by saying the line's got to be drawn somewhere, and we're going to draw it at the point at which the person receiving the communication is licensed by the State.

But in principle, apart from that line-drawing methodology, there's no reason to draw it there, is there?

I have had law clerks tell me things in confidence, and I presume they felt better after telling me.

[Laughter]

I assume there was some value to it, but you would not recognize the privilege in that case, but there's no reason in principle why you shouldn't, is there?

Mr. Rogus: --Once again, we are talking about a particular function here.

Unknown Speaker: Well, the function is feeling better, and I don't denigrate that, by telling somebody something, and so the function is being performed... talk about poor man's psychiatrist, but the function is being performed when they tell me, but... and so it seems to me there's no reason in principle why I shouldn't be able to claim the privilege.

And your... I think your answer is, well, we've got to draw the line somewhere, judge.

Mr. Rogus: And the difference would be once again, not only what... how the person feels when they have talked to you, brought to you whatever their... what's on their mind, what they're feeling, et cetera, but what you, in turn, can tell them and help them.

Unknown Speaker: What can the psychiatrist tell... even the full-dress psychiatrist, if we grant the sort of privilege that you want us to grant?

What can he tell the patient?

Mr. Rogus: Well, my--

Unknown Speaker: What you tell me will, what, probably, most likely, be held in confidence?

Mr. Rogus: --What you will tell me will be held in confidence.

Unknown Speaker: He can't say that.

You acknowledge... you acknowledge exceptions.

Mr. Rogus: There are some exceptions that have been noted by the courts based on--

Unknown Speaker: Is there any State that has no exceptions?

Mr. Rogus: --No.

I believe they all have at least one exception.

Unknown Speaker: And some have very broad exceptions.

If it's important enough, you can get it in, right?

Mr. Rogus: That would be correct.

Unknown Speaker: Well, what could a psychistrist possibly comfort his patient with, what kind of assurance could he possibly comfort his patient with in that kind of a State?

Mr. Rogus: Because the exception should be--

Unknown Speaker: Very little.

Mr. Rogus: --very narrowly and... there should be very few exceptions, and they should be very narrowly drawn to fit only certain categorical situations.

For--

Unknown Speaker: If--

Mr. Rogus: --For example, I think one of the instances that was referred to during Mr. Flaxman's argument was if something should be mentioned in terms of a definite threat of harm to a specifically identified individual, if a person goes in, talks to their therapist and says, I'm going to kill Joe Smith, and there is no reason for the clinician to doubt that that person is in fact capable of and will, and would carry out that specific threat to Joe Smith.

In that instance, most of the States I believe have recognized a very narrowly drawn privilege, once again, arising out of the fact that that very specific threat to that one very specific individual is there.

Unknown Speaker: --But I take it even on your scheme if Smith is dead, and an admission has been made to a psychiatric social worker and to no one else, and a case cannot be proven without that beyond a reasonable doubt, without that admission, you would let the admission in, wouldn't you?

Mr. Rogus: Under the... if it were the only evidence--

Unknown Speaker: Right.

My hypo.

Mr. Rogus: --Then I--

Unknown Speaker: You'd let it in.

Mr. Rogus: --There have been cases that allow that testimony in under--

Unknown Speaker: So whatever the value of being able to assure the patient of confidentiality may be, on your theory that value would be absent, because the social worker, the psychiatrist, the psychologist could not say, what you tell me is in confidence.

All he could say is, what you tell me will be kept confidential unless they need it badly enough.

Mr. Rogus: --Yes, in a sense.

Unknown Speaker: All right.

Mr. Rogus: Based on--

Unknown Speaker: Now, what about a case like this, in which there is a claim that memory enhancement may be involved?

Memory enhancement is a lot like the... given the possibility that the memory enhancement in fact is memory change, I would suppose that that kind of evidence could be just as crucial as the unique evidence of guilt.

Why shouldn't the... why shouldn't an exception be recognized for cases in which there is a colorable claim that memory enhancement went on?

Mr. Rogus: --Several points in response to that.

First of all, the record does not give any indication whatsoever that there was such enhancement.

Secondly, as the Court--

Unknown Speaker: But there are grounds for some suspicion.

Would State law in this case have allowed an exception for this evidence to come in?

Mr. Rogus: --Whether the law of the State of Illinois... no, I believe it would have been privileged.

Unknown Speaker: And you don't rely, apparently, in giving your responses, on what State law allows or doesn't allow?

You're going to have us decide it on the basis of whether it would be needed or not?

Mr. Rogus: As the Court indicated in Trammel, we certainly, in terms of formulating the Federal rule, can look to State law for guidance, but inasmuch as there was a Federal question involved in this case, and under the language of 501, we can look to State law for guidance, but State law as State law would not control the question.

Unknown Speaker: All right.

Well, what does 501 tell us?

It tells us that the privilege of a witness shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.

Now, what do you think the common law provides?

Mr. Rogus: At the common law prior to the early seventies there was no vast body of case law indicating one way or the other whether there was a psychotherapist patient-privilege or not.

There were courts that were starting to entertain the notion of a psychotherapist patient-privilege.

Based on the analysis provided by many of the commentators, it was at about that same time that many of the courts were getting involved in addressing that issue that many of the legislatures simultaneously also began to take action in terms of not only looking at, for example, the social work profession and stepping up the amount of State regulation of the profession itself, but also enacting provisions providing for privilege.

Unknown Speaker: What do we look to for the... determining what the principles of the common law are here?

Mr. Rogus: The principles of the common law would... basically we would look to the development of the law through cases and court decisions, that is correct, and as of the time 501 was enacted, once again, no, there was not a--

Unknown Speaker: Mr. Rogus, do you know if there are any States that recognize a psychotherapist privilege and do not recognize a doctor-patient privilege?

Mr. Rogus: --Off-hand I do not know the answer to that question.

Unknown Speaker: Mr. Rogus, Mr. Flaxman said there were two States that had this privilege by virtue of court decisions.

You've just explained that the development was, courts were active, legislatures were responding with kind of a dialogue.

Do you know how many... in how many States the privilege notion began in the courts, that there was first a court declaration and then there was legislative codification?

Mr. Rogus: I do not know specifically how many.

It was very few.

Very few.

My understanding is, just a handful of States where that is the case.

Unknown Speaker: Why shouldn't we do the same?

I mean, I have no doubt we have the power to pronounce a common law rule, but the variety of rules in the States is so diverse.

Mr. Rogus: And in that--

Unknown Speaker: I wouldn't know which common law rule to adopt.

Why shouldn't we say, you know, it looks like pretty much a policy call that different States have done different ways, and I don't know why we should pick one of these infinite varieties of laws and impose them on the Federal courts.

Mr. Rogus: But the basic thrust of what has been going on in the States is to recognize the privilege and, given once again that--

Unknown Speaker: It doesn't get you anywhere.

You don't even know what privilege means.

I mean, as you've described to us, in some States it means very little.

It means only, we'll think about whether it's important enough, and if it is, you can't... if it isn't important enough, you can't get it.

It... I don't view this as a solid basis for saying yes, the common law has developed in a certain way.

Mr. Rogus: --Thank you.

Unknown Speaker: Thank you, Mr. Rogus.

Mr. Feldman.

Argument of James A. Feldman

Mr. Feldman: Mr. Chief Justice, and may it please the Court.

Rule 501 provides that the privilege of a witness shall be governed by the principles... not the specific privileges, but the principles of the common law as interpreted by the courts of the United States in the light of reason and experience.

In our view, the most significant feature to look to in determining what reason and experience tells us here is the fact that all 50 States have recognized the privilege in one form or--

Unknown Speaker: Well, they recognize something.

I mean, your brother was just saying that, I think, that what we should recognize is a presumption of confidentiality subject to exception by weighing.

If we go no further than to do that, is it even worth the trouble?

Mr. Feldman: --I--

Unknown Speaker: Why bother?

Mr. Feldman: --Well, I... actually, we... it's not our position that that's what the Court ought to do.

Unknown Speaker: Well, what's your position--

Mr. Feldman: Our--

Unknown Speaker: --on the value of a... of the kind of presumption that he was arguing for?

Is that worth the trouble?

Mr. Feldman: --I think it would have some value in, some incremental value in increasing the confidence of patients that their communications would be confidential, but I don't think it would have the kind of value that the States generally have recognized when they've adopted--

Unknown Speaker: If that's all we did, should we do it at all?

Mr. Feldman: --Yes.

I think that that would be something useful to do.

It's not our position that that's what the courts ought to do.

I think under Rule 501, the Federal courts ought to take a cautious view towards the recognition of privileges.

It ought to be sure to recognize the general policy of the Federal rules in favor of the admissibility of evidence, but where a privilege is justified, and especially where the 50 States have so... have at least uniformly recognized the important interests that are at stake in a case like this, I think the Federal courts should do likewise.

The fact that all 50 States have recognized it I think shows that they recognize the importance of psychotherapy in the relief of mental and psychological distress for people.

I think they've recognized the need for confidentiality, the very strong need for confidentiality.

Unknown Speaker: Mr. Feldman, how could you justify a psychologist-social worker privilege without recognizing a medical doctor privilege?

Mr. Feldman: There has been... in our view the case for medical doctor privilege has not yet been compellingly enough made, and I'll tell you why.

First, there are fewer States that recognize it.

Second, if you look at the way the States recognize it, they generally... it generally has even more exceptions, and there's even... there's less of it than with respect to a psychotherapist-patient privilege.

As the advisory committee on the proposed rules in 1973, or around there, recognized, if you look at their commentary on the psychotherapist-patient privilege, which was in those proposed rules, and the doctor-patient privilege was not, they noted that confidential communications are even more important for the successful practice of psychotherapy than for the successful practice of medicine.

Unknown Speaker: Well, that's just exactly... what can I read to find out about this?

I mean, I'm used to, as many of us, having diversity cases, where, of course, there is the privilege you're arguing for and also a medical doctor privilege.

That's the normal case we find it in.

I've never had a case, I don't think, where it came out of the Federal system and a medical doctor, but Mr. Flaxman seems to agree... I agree with him.

I don't know how you distinguish between a patient who comes in with a gunshot wound, and the doctor's got to find out what happened, and a psychiatric social worker who says, I'd like you to tell me what your problem was in this case, or some other.

How can you do the one without the other, and what were the objections to the doctor privilege?

Why wasn't a rule written on that?

Where do I... what do I read to find out about this?

It didn't seem to me very fully developed in the briefs.

Mr. Feldman: In the advisory committee notes on Rule... proposed Rule 504, they do specifically go into that question, and they cite a previous paper that was issued by the Group for the Advancement of Psychology... I don't recall the exact name... that explored the subject more fully.

There's also been a number of other things that are cited throughout the amicus briefs about it.

But the general point, and the general reason why the States have seen fit to recognize one to a greater extent than the other is that, although confidentiality is no doubt important for the practice of medicine, it's important for the practice of many things.

It's probably important for accountants.

It's important... it's generally an important value, but the extraordinary level of confidentiality that a privilege involves, that step should only be taken where it's clearly justified.

Unknown Speaker: Mr. Feldman, why... let's assume that the consultation occurs in a State that has the very negligible... under State law, the very negligible privilege that you said it's worth adopting, but it won't do a whole lot of good, so all that that person can tell the client is, you know, under State law, you have very little assurance of confidentiality.

Why should a Federal court accord to that social worker or psychiatrist a greater degree of confidentiality than the State itself?

Shouldn't the maximum Federal protection be where the consultation has occurred in State X, we will accord whatever confidentiality the courts of State X accord?

I can't see any Federal justification for going further than that, or any use, for that matter.

Mr. Feldman: It would certainly be a possible rule to set the Federal ceiling at the State floor.

Unknown Speaker: Well, wonderful, but can we do that under the Federal rule?

It seems to me the Federal rule has to be uniform, so isn't this eminently an area that we should leave to legislation?

Mr. Feldman: I think that... I've two answers.

I think... first of all, I think Congress has made it quite clear and the Court has said in its opinions that this is something that the courts have to grapple with one way or the other.

A decision one way or the other... a decision not to recognize a privilege in a State that has a very strong privilege, for example, is going to do some damage to that State's policies, and what that State has recognized as necessary for the advancement of... or for--

Unknown Speaker: Well, it's not just that State's policy.

It's according to the licentiature system, the licensing system of the State, more dignity than the State itself gives--

Mr. Feldman: --But--

Unknown Speaker: --and I have the same trouble as Justice Scalia does.

I'm not sure how to handle that.

Mr. Feldman: --I wanted to get to the second point, which was that in our brief we suggest that the key question is whether a confidential relationship is formed, and that question, since States are the primary level of government that governs the relationships of psychotherapists and patients, as with most other professions, the question of whether a confidential relationship, a highly confidential, an extraordinarily confidential relationship is formed, I think it's reasonable to look to State law for that.

Unknown Speaker: So you look to licensing, plus the extent of privilege, State by State?

Mr. Feldman: I think you'd look to the question of whether the privilege extends to this kind of a relationship.

As far as the specific narrow exceptions to the State--

Unknown Speaker: Under the rubric of whether or not there's a reasonable justification to believe that the communication is confidential?

Mr. Feldman: --Under the rubric of, if there's... the Federal privilege... a necessity for the application of any privilege is that a confidential relationship is formed.

In attorney-client privilege, if you're not a member of the bar in a given State... the State gets to determine who's a member of the bar.

If you're not a member of the bar, there's no question that you don't have a privilege in Federal court, and similarly with the marital privilege and other kinds of privilege.

In the same way, it's up to the State to determine whether a confidential relationship has been formed, and that's a prerequisite for the application of the Federal privilege.

Once you have that, I think the exceptions in the States follow enough of a pattern that--

Unknown Speaker: Mr. Feldman, in this case would Illinois have recognized a privilege for what's at issue here?

Mr. Feldman: --Yes.

The Seventh Circuit so held, in fact.

Unknown Speaker: I was unclear on your answer a moment ago.

Are you still arguing for a uniform Federal rule on privilege?

Mr. Feldman: Yes.

Unknown Speaker: Or are you arguing... so you're not arguing for a rule that would vary from State to State.

Mr. Feldman: It would... no more--

Unknown Speaker: Okay.

But the reason I... let me tell you why I ask the question.

Part of the premise of your argument is, the value of recognizing the privilege depends upon the value of the confidentiality in the relationship.

Now, we can't tell what the value of the confidentiality in the relationship is unless we go State-by-State and find out which States have strong privileges, which States have just weak privileges.

And so I guess what we would have to do is to say well, if majority of the States have really strong privileges, that would probably justify our recognition of the strong privilege, but if a majority of the States have a weak privilege, it wouldn't do any good for us, at least in those States, to recognize a strong privilege because it would have no effect on the relationship.

The social worker would have to say, I can't guarantee much.

Is that what we should do, is sort of do a nose count and find out whether we're going to get much for our privilege or a little for our privilege?

Mr. Feldman: --I think not quite.

What the Federal court should do is look to see whether the State recognizes, for instance, a relationship between a psychiatric social worker and a client as being one that's entitled to a very high confidentiality protection and accords it a privilege.

If in that State the State has said, social workers in this State... you can go to see a social worker, but we're not going to accord it any privilege at all, it's just not that confidential a relationship, you don't have a reasonable expectation that a confid... it would be like going to see somebody about a legal problem who's not a lawyer.

You can do it, I suppose, but you can't... it's not going to be privileged.

Unknown Speaker: Yes, but on your understanding, if there were 45 States that recognized a social worker's privilege and 5 that didn't, you would say we ought to recognize it, right?

Mr. Feldman: I think--

Unknown Speaker: As a uniform Federal rule.

Mr. Feldman: --No.

I think--

Unknown Speaker: No.

Mr. Feldman: --The Federal rule should be that where the State recognizes a confidential relationship, recognizes a privilege with respect to a given category of provider, that in those cases I think there's enough uniformity in the States to say that a Federal privilege is also warranted.

Unknown Speaker: Thank you, Mr. Feldman.

Mr. Flaxman, you have 3 minutes remaining.

Rebuttal of Kenneth N. Flaxman

Mr. Flaxman: Thank you.

I have always been tantalized by the idea that if you tell someone, you tell this to me I'll keep it a secret, that that could be a privilege, that the court should enforce that kind of promise, and as a matter of fact, that used to be the law.

It used to be called the gentleman's privilege.

I think in about the 18th Century to 17th Century, courts stopped enforcing that privilege.

In Branzburg v. Hayes, this Court explicitly recognized that that used to be the law and it is no longer the law.

The question of whether the confidential communication should be recognized by... protected by a privilege or protected by case-by-case balancing I think should be answered in favor of case-by-case balancing.

Unknown Speaker: Could I ask a question about State law?

I assume that even in Illinois, the Illinois psychiatrist or social worker could not give assurance that even a State law action would not require... it would depend upon where the action came up.

I assume that an Indiana court would apply Indiana's rules; isn't that right?

So that if the lawsuit were in Indiana, the Illinois social worker, by reason of being an Illinois social worker, wouldn't have a special privilege in Indiana.

Mr. Flaxman: That's what I believe the Court should do.

The question about--

Unknown Speaker: No, I'm not saying what it should do, but isn't that the way things work?

These are forum rules, so that Illinois can only assure that an Illinois social worker will not be compelled to testify in an Illinois forum.

Mr. Flaxman: --That's correct, but Illinois can't even make that assurance, because the common law trend of courts has not been to create privileges, it's been to create exceptions to broad statutory privileges.

We've seen that in Illinois, where there aren't exceptions, or evidence that might be relevant in a criminal case, where courts have created an exception.

Unknown Speaker: Do you agree that this communication would be privileged in the Illinois courts?

You don't, do you?

Mr. Flaxman: I agree that we don't know, and we wouldn't know unless we litigated it in the Illinois courts.

There was just a recent amendment to the Illinois statute which says that the social worker could reveal confidential communications to her employer, and if this was in State court we would argue that this exception and all the other exceptions require the courts, when the evidence is crucial, as we would argue it is crucial in this case, should fashion yet another exception, and courts in other States--

Unknown Speaker: And is it true that the rule they apply is governed... in the State law cases is governed by the law in the State where the conversation occurred, rather than where the case is being tried?

Mr. Flaxman: --I think it's the conversation where the case is being tried, rather than where it occurred.

But these questions have not arisen--

Unknown Speaker: Why has it never arisen, where someone in... you've practiced a lot in 1983 cases.

Has no one ever tried to subpoena medical records from a hospital or a doctor's private... you know, medical doctor's private records?

Why have we never had to face the problem of the gunshot wound or... the medical doctor, who's dealing with physical problems?

Mr. Flaxman: --We don't face that problem because the district judges uniformly say there's no privilege.

If it's relevant--

Unknown Speaker: But wouldn't you think some doctor somewhere or a hospital somewhere would have faced a subpoena for some confidential patient records and would have asked us?

Mr. Flaxman: --That hasn't happened, and I don't think it... it's just routinely accepted.

Chief Justice Rehnquist: Thank you, Mr. Flaxman.

The case is submitted.

Attribution:

The Oyez Project

Featured:

Willy v. Coastal Corp. - Oral Argument

Fri, 09 Jan 2009 14:49:33 +0000

Case:

Willy v. Coastal Corp.

Media File:

90-1150_19911203-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Michael A. Maness

Chief Justice Rehnquist: We'll hear argument next in No. 90-1150, Donald J. Willy v. Coastal Corporation.

Mr. Maness, you may proceed.

Mr. Maness: Thank you Mr. Chief Justice, and may it please the Court:

The second section of article III of the Constitution limits the judicial power of the United States to nine carefully defined kinds of cases and controversies and none others.

The question presented in this case is whether the United States District Court violated that constitutional limitation by awarding attorney's fees to Coastal and the other defendants as a sanction from Mr. Willy's asserted bad faith litigation, even though the Federal court never possessed article III subject matter jurisdiction over the controversy following the defendant's wrongful removal of the case from a State court, and even though Mr. Willy did not impede, obstruct, or delay the Federal court's resolution of any jurisdictional question, but instead correctly and repeatedly, and eventually successfully, contested the Federal court's unconstitutional exercise of the Federal judicial power over the case.

We believe that this case is controlled by the court's decision in United States Catholic Conference against Abortion Rights Mobilization, Incorporated, that the district court's sanction order violated article III, and that that order and the judgment of the United States Court of Appeals for the Fifth Circuit mistakenly affirming it are unconstitutional and therefore should be reversed.

Unknown Speaker: Did you just refer, Mr. Maness, to one of our cases in saying that it was controlled by that case?

Mr. Maness: Yes, sir.

Unknown Speaker: What case was that?

Mr. Maness: United States Catholic Conference against Abortion Rights Mobilization, Incorporated.

Unknown Speaker: And when was... do you have a citation for that or what?

Mr. Maness: Yes, Your Honor, I do.

It's cited in our blue brief.

Unknown Speaker: Okay.

That's fine.

Thank you.

Mr. Maness: Catholic Conference was a 1988 decision of this Court.

I would like to state very briefly and very quickly some relevant facts which are for the most part entirely uncontradicted.

Donald Willy worked as an in-house environmental attorney for the a subsidiary of Coastal Corporation in Houston from 1981 until 1984 when the company fired him.

In 1985, represented by another Houston lawyer, George Young, Mr. Willy filed a State court lawsuit against Coastal and other defendants alleging a number of exclusively State law causes of action.

The principal one of these arose under a Texas supreme court decision, Sabine Pilot Service Company against Hauck, which recognizes a remedy in Texas for those whose employment is wrongly terminated solely because of their refusal to violate the law.

Mr. Young's petition on Mr. Willy's behalf alleged that Coastal had fired him because of his refusal to falsify environmental reports or to participate in the company's ongoing violations of State and Federal environmental laws at several of its facilities.

Coastal and the other defendants wrongly removed the case to the United States District Court in Houston on December 30, 1985, almost 6 years ago.

Unknown Speaker: What was the basis for it?

Mr. Maness: I think, certainly the court of appeals felt that there was more than an arguable basis for the removal and characterized it as having been undertaken in good faith.

We don't, Justice White, dispute that characterization.

Unknown Speaker: If there weren't any legitimate basis for removal, do you suppose the Federal district court would have the power to sanction the party removing the case wrongfully?

Mr. Maness: No.

No.

It would not.

I think, Justice O'Connor, what is implicit in this case and something I would like to touch on--

Unknown Speaker: Even under the court's inherent authority?

Mr. Maness: --That's correct.

Our view is that the court's article III power over a case or controversy isn't determined by how clear or how difficult the jurisdictional question is.

Our view is that the court either has the power to act under article III of the Constitution or it does not.

And if it does not have the power, then no complexity of the jurisdictional issue or no good faith or, for that matter, bad faith be it with the parties or the judge can affect the outcome of the decision.

Unknown Speaker: Well, do you think that would be true for criminal contempt sanctions for someone who wrongfully removed the case, but then has an outburst in the courtroom and insults the judge and the judge imposes a criminal sanction?

Mr. Maness: No, I think our position straightforwardly draws a distinction between criminal contempt penalties--

Unknown Speaker: And what is the article III power there?

Mr. Maness: --Basically it's that criminal contempt sanctions implicitly or explicitly are cases that involve the United States.

Cases to which the United States is party are specifically mentioned in the second section of article III.

And, of course, as I think the court--

Unknown Speaker: Well, what if the United States were not a party, but there is a suit between private parties and there is a wrongful removal and there is some outburst in court?

Mr. Maness: --I think in those circumstances, Your Honor, the court would have a criminal contempt power that is--

Unknown Speaker: Some kind of inherent power to protect its own dignity.

Mr. Maness: --I'm not sure, quite honestly, that it should be characterized as an inherent power, given the fact that since the Judiciary Act of 1789 there has always been a statute that authorizes Federal courts to impose criminal contempt sanctions.

The present statute, as Your Honor knows, is title XVIII, section 401.

So it seems to me in the existing environment in which we operate, it's more appropriate to say in the event of such an outburst that the Federal court could punish it under the criminal contempt power conferred by article III, which Congress has implemented under title XVIII, section 401.

Unknown Speaker: Why, why do you choose to read that as applying to cases in which the court has jurisdiction and does not have jurisdiction both, whereas the other statutory authorities that exist you insist must be interpreted to apply only to cases where the court has jurisdiction?

I mean, they don't say that, but you say that's the only reasonable way to read them.

Why--

Mr. Maness: Yes.

Unknown Speaker: --Why is that reasonable for the civil, but not for the criminal sanctions?

Mr. Maness: I think, I think perhaps the best way to answer that, if I can do it directly, is that that's the distinction that the Mine Workers case brought.

The Mine Workers case holds that there is implicit in this entire area a meaningful, principal distinction between vindications of judicial authority by criminal contempt sanctions and equivalent efforts to vindicate, in that instance, court orders, by civil contempt sanctions.

It seems to me that that's logical and makes a great deal of sense when one undertakes to analyze what's at stake here.

What's at stake is the authority of the court, the ability to undertake the functions consigned to it by Congress in article III.

Unknown Speaker: Do you think criminal sanctions, criminal contempt sanctions could have been imposed here if the court, if the court regarded what was being done as contemptuous, as an obstruction of its procedures?

Mr. Maness: I think if the court had reached that conclusion and it were supported by the evidence, and of course, if Mr. Willy and Mr. Young had been accorded the procedural protections that criminal contempt implicates, yes, I think that would have been an instance in which criminal contempt sanctions could have been imposed.

Unknown Speaker: Excuse me, Mr. Maness, your opponent cites the case of Chicot County Valley Drainage District, the opinion by Chief Justice Hughes, in which this Court held that even though a grant of Federal jurisdiction was unconstitutional, nonetheless a lot of consequences flowed from something having been acted on under that grant.

What's your... how do you distinguish that case?

Mr. Maness: I think that case and such cases as Stoll against Gottlieb indicate clearly that notwithstanding the fundamental importance of the article III power, and the fact that a court in order to act has to have that power under both article III and ordinarily a statutory grant of jurisdiction from Congress, but nonetheless, there are also countervailing considerations that sometimes can override that.

And the example, of course, of res judicata, collateral estoppel, similar sorts of administrative devices that are simply more important constitutionally than allowing, for example, absence of subject matter jurisdiction to be raised long after the judgment is entered and long after the case has otherwise been closed.

Unknown Speaker: So it isn't just a totally clear line between black and white.

There has to be some evaluation of for what the claim is.

Mr. Maness: I think so.

But I'm troubled if the Court were to extend that principle to going back to what I think was soundly repudiated in Catholic Conference.

And that's the idea that there's something called colorable jurisdiction.

I was perviewing the transcript of the argument in Catholic Conference yesterday.

I recall the question coming up that the Court was interested in knowing what is colorable jurisdiction.

And counsel for the parties were unable to define it.

Then the question was asked, what did the Second Circuit mean when it used the term colorable jurisdiction.

And I think there was still some question.

I think the Court in Catholic Conference decisively and soundly repudiated the idea that because a Federal court looks like it has the constitutional power to act, that that's the functional equivalent of its having the constitutional power to act.

I think we've also pointed out in our brief that there's an observation in Szabo Food, which was quoted in Cooter & Gell, a very important case that I would like to turn to in a moment, Judge Easterbrook suggested that if a district court elects to proceed forward with the case and to supervise discovery under rule 16 and to conduct a trial and to enter a judgment, and then discovers at the end that the court doesn't have article III subject matter jurisdiction, it can nonetheless treat any derelictions by counsel of the parties that occurs during that period as appropriately sanctionable, either under rule 11 or under an inherent power.

But we think that's flatly mistaken.

I had thought since Capron against Van Noorden that jurisdictional issues have to be decided at the first of the case, not at the end.

And I had thought that at least since Turner against the President and Directors of the Bank of North America, a case decided by this Court in 1799, that if it's a tossup, if the judge says to herself, gee, I don't know whether I have jurisdiction or not, it's equally balanced, the presumption is the court doesn't have jurisdiction unless promptly dismissed or remand the case.

We've also pointed to some 12 decisions--

Unknown Speaker: What if the, what if the case goes up to the appellate court, there's never been any jurisdictional question raised, but the appellate, the court of appeals, like it should, raises a jurisdictional issue and says there's no, never has been any jurisdiction in the lower court.

I suppose that you would take the same position.

Mr. Maness: --Absolutely.

I want to make it plain, Justice White, that, the fact that Mr. Willy and his counsel raised the absence of constitutional power from the get-go is just icing on the cake for us.

The result would be exactly the same even if they had never raised it, even if it had never been raised in the court of appeals, even if it had not even been raised in the petition for certiorari, but the court had suddenly said, wait a minute, there's no article III power.

Unknown Speaker: Mr. Maness, you acknowledge that this thing is not black and white and that sometimes we allow consequences even when there's no jurisdiction.

Why isn't a very logical line to draw, and one that would put the Catholic Bishops case on the right side of the line, the line between the litigant who submits himself to the allegedly wrongful jurisdiction of the court, voluntarily goes ahead with litigation.

In Catholic Bishops, as I recall, it was contended from the outset by the Catholic bishops that the court had no part of that and had no jurisdiction over them.

And we would not allow them to be punished by the court's contempt power.

But where you come and willingly litigate, why can't we treat that differently and do no damage to the Catholic Bishops case?

Mr. Maness: Well, oddly enough I attempted all the way through to persuade both the district court and the court of appeals that that was a logical and sensible accomodation--

Unknown Speaker: Because that's your... your client is in that position.

Mr. Maness: --Exactly.

But I also want to state that--

Unknown Speaker: But you went ahead with the litigation.

You went ahead with the litigation and filed a whole batch of documents that were just ridiculous.

By--

Mr. Maness: --I didn't do them.

My predecessor--

[Laughter]

Unknown Speaker: --Right.

I'm sorry.

But the point is you did not stand on your refusal.

You did not stand on your refusal.

Mr. Maness: That's correct.

Unknown Speaker: Which the bishops did.

They just refused to turn over the stuff.

Mr. Maness: That's correct.

Unknown Speaker: Now why can't I put you to that choice?

Mr. Maness: It seems to me first of all that that would entail Mr. Willy simply refusing to go forward.

What... as I understand it, he's supposed to say, I'm so sure that the court lacks article III subject matter jurisdiction that I'm going to not do anything, I'm not going to prosecute the case, I'm not going to attend the first rule 16 scheduling conference, I'm just going to go home.

Unknown Speaker: Foreign sovereigns do, they don't even show up.

Mr. Maness: And I think first of all, and I don't mean to be rhetorical when I say this, but I think it's an answer to your question is, where do you find that in the Constitution?

It seems to me that the Constitution, both simultaneously extends the judicial power in the second section of article III and limits it.

Unknown Speaker: See, I don't find the gray in the Constitution.

I only find the black and the white in the Constitution.

We've passed that once you acknowledge that there are some grays.

We're just arguing over whether this is one of the shades of gray permitted.

Mr. Maness: But it seems to me that's an unworkable and untenable distinction.

Unknown Speaker: But you, you would also, I suppose, say that the, if people are, a lot of times litigate over jurisdiction.

And if it turns out that the court doesn't have any jurisdiction, is the court without power to sanction attorneys who should be sanctioned in litigating jurisdiction?

Mr. Maness: First of all, we've made it, I think, clear in light of the Court's decision in Catholic Conference that interferences with or obstructions with jurisdictional determinations are as sanctionable as any other case in which the court does have--

Unknown Speaker: I know, but I would think you're, I would think if you accept that you have to accept some other things.

Mr. Maness: --Well, we certainly conceded that in terms of, when we talk of sanctions, this case involves an award of attorney's fees as a sanction.

But we've conceded and indeed maintained that misconduct by an attorney or a litigant--

Unknown Speaker: Well, you concede then that courts have the jurisdiction to determine their own jurisdiction.

Mr. Maness: --Absolutely.

Unknown Speaker: Well, in this district court, it thought it had jurisdiction.

It determined it.

And there you were, you were stuck until you got to the court of appeals.

Mr. Maness: I saw that thought Justice White expressed in the transcript in the argument in Catholic Conference.

And all I can say is as I understand the Constitution, it is that the court at the time it entertains the suit from the very beginning either has the jurisdiction or it doesn't.

And if it mistakenly thinks it does but really doesn't, it doesn't somehow by virtue of having made that mistake empower itself to act.

This is certainly a very strange constitutional power for which Coastal contends.

It's one that can only be exercised if the district court has booted the jurisdictional determination.

Unknown Speaker: And you don't think that the attorney could have been held in contempt?

Mr. Maness: Oh, yes, I do.

Absolutely.

If in fact the attorney's conduct was criminally contumacious--

Unknown Speaker: I didn't say criminal.

Mr. Maness: --Civil contempt?

Unknown Speaker: Yes.

Mr. Maness: Oh, no.

I wouldn't say the civil contempt sanctions were imposable on the basis of the Mine Workers.

Unknown Speaker: But criminal?

Mr. Maness: Criminal contempt could be, yes.

That is assuming that sanctions were imposed in accordance with Federal Criminal Rule 41.

Unknown Speaker: Yes, but, you're arguing... I'm sorry.

I was going to say, do you think that sanctions here are more akin to criminal or civil?

Mr. Maness: I think the Court has already answered that question in Chambers against NASCO last June when it quoted Hutto against Finney and said that they're more equivalent to civil penalties rather than criminal.

And if they're more equivalent to criminal penalties, why aren't they in the Federal Criminal Rules?

Why don't we have a Federal Criminal Rule 11(a) that authorizes the imposition of something equivalent to or functionally equivalent to criminal contempt penalties via an amended rule 11(a) that would award attorney's fees perhaps as a fine.

We've also pointed out in our brief that apart from the fact that Mr. Willy and Mr. Young weren't accorded any of the procedural protections that a criminal prosecution for criminal contempt would entail, if these sanctions are like criminal contempt, then Coastal's counsel should not be here, because interested parties under Young against Vuitton can't prosecute a criminal contempt proceeding.

And indeed, if under Providence Journal, Mr. Beatty couldn't be here, but we should have General Starr instead.

And I suggest that General Starr would not touch this case with a 10-foot pole.

Unknown Speaker: Your position is that in Catholic Conference the bishops, in addition to contesting jurisdiction, filed fraudulent and misleading documents, purportedly in response to the subpoena... the only sanction available to the court is a criminal sanction?

Mr. Maness: No.

The lawyers responsible for that misconduct would be sanctionable by suspension or disbarment.

Unknown Speaker: But not under rule 11.

Mr. Maness: Not under rule 11.

And the reason I suggest that that must be true and I say must as if it's an inevitable consequence, and I know it is not, is the alternative argument that Coastal makes, it says basically that the courts, apart from the inherent power argument has power, under rule 11, even in the absence of subject matter jurisdiction.

I've read Catholic--

Unknown Speaker: But don't lawyers have a special obligation under rule 11 quite without reference to jurisdiction?

Mr. Maness: --Certainly.

I believe that rule 11, as Cooter & Gell makes plain, entails a very significant obligation for lawyers who sign pleadings.

Unknown Speaker: In this case, were the lawyers and the client both sanctioned?

Mr. Maness: Yes.

One lawyer, one client.

Unknown Speaker: All right.

So do you take the position that the lawyer can be sanctioned?

Mr. Maness: Certainly the lawyer could have been suspended or disbarred assuming he--

Unknown Speaker: But can he be sanctioned under rule 11?

Mr. Maness: --No, not in the absence of article III subject matter jurisdiction.

And in fact--

Unknown Speaker: Well, but disbarment is not a criminal penalty.

Mr. Maness: --Certainly it's not.

But it also doesn't involve the adjudication of a case or controversy that's not within the second section of article III, either.

Unknown Speaker: Well, I'm not sure that it doesn't if the unprofessional conduct takes place in the course of the proceeding.

Mr. Maness: Well, conceivably, arguably, it is.

But at least it's an alternative remedy, an alternative mechanism that the court can use apart from awarding attorney's fees to the people who have wrongly invoked--

Unknown Speaker: Because it seems to me here that the gravamen of the injury to the court was the misfeasance of the attorney.

Mr. Maness: --Yes.

Unknown Speaker: And the court has a special authority over attorneys under rule 11.

It seems to me that that quite distinguishes this case from Catholic Conference.

Mr. Maness: And of course, I don't represent the attorney.

I represent the litigant who was also himself an attorney and who presumably the court of law--

Unknown Speaker: Well, that leads to the next point.

Isn't the litigant's liability derivative of the attorney in a sense?

Mr. Maness: --I don't think so.

I guess there's an argument to be made that when the litigant is herself or himself an attorney that the attorney/litigant should be held to a higher standard.

Unknown Speaker: Was there a finding here that the client conspired with the attorney or was an accessory with the attorney in the perpetration of the violation?

Mr. Maness: There was no specific finding of that.

There was no--

Unknown Speaker: I take it's implicit.

Mr. Maness: --I certainly think that's true.

In fact, so implicit that both the district court and the court of appeals used a technique in their order and opinion of saying plaintiff or Willy when they actually were referring to actions that had occurred and the records revealed were undertaken by Mr. Young, the attorney.

Unknown Speaker: Because the whole point of rule 11 is to control the conduct of attorneys.

Mr. Maness: Exactly.

But of course, the whole point of article III is to restrain excessive uses of judicial power.

When the Constitution limits the judiciary as it does the political branches--

Unknown Speaker: Yes, but it seems to me that the point of the sanction against your client is to discourage him and others from permitting their attorneys to engage in this sort of conduct.

Mr. Maness: --I think that's certainly true.

Unknown Speaker: Don't you have to take it, then, a further step that the object of doing that is essentially to protect the other party.

And by the same reasoning that we accept the court's authority to impose criminal contempt sanctions for the purpose of protecting the court, why doesn't this essentially the same reasoning extend to allowing these civil sanctions whether it be under rule 11 or inherent power to protect the other parties once they are accepted by the court as being before them?

Mr. Maness: I think, Justice Souter, that that, that that argument and that reasoning could, in fact, be used in this case if the Court were prepared to say that exigency and necessity are a substitute for the article III judicial power.

Unknown Speaker: What have we said in criminal contempt?

Mr. Maness: Well, I think you, and I may be mistaken here, I think the Court has said in the Mine Workers case that the court in that case did have the article III judicial powers, a case to which the United States was a party, a case in which the court was entertaining a Federal question, a very real question as to whether or not the court has the authority to impose a specific remedy, the injunction.

Unknown Speaker: But don't you, don't you concede, I mean, you have conceded in this case that there would be a criminal contempt power.

Mr. Maness: I conceded, Your Honor, that that conceivably if the evidence were sufficient to overcome the presumption of innocence, for example, that Mr. Willy would have enjoyed had he known that he was going to be accused of criminal--

Unknown Speaker: But, I mean, right, but that essentially goes to the factual basis of the action as opposed to the jurisdiction of the court to engage in it.

And why doesn't the protective justification for that concession go as far as conceding the issue here as well?

Mr. Maness: --Because at least, since what, Michaelson and I suspect probably in a number of other criminal contempt proceedings, the Court has said that criminal contempt, even if it arises in a civil lawsuit, is a separate case.

It's a different proceeding.

It's designed not to adjudicate the rights of the parties, but to vindicate the authority of the court.

Unknown Speaker: I don't want to be impatient, but, I mean, that's kind of the analytical structure of the Court's answer.

But the ultimate reason for engaging in that kind of analytical exercise was a protective reason, wasn't it?

Mr. Maness: Certainly.

Unknown Speaker: And why doesn't the same protective reason argue just as persuasively here?

Mr. Maness: Well, Justice Souter, if the Court were to accept that reason, it would essentially be saying that even in the absence of article III subject matter jurisdiction, a United States district court that mistakenly undertakes to hear and decide a case over which it lacks the judicial power nonetheless has a form of judicial power.

Unknown Speaker: And isn't, isn't, isn't one rationale for that that although the court may lack article III subject matter jurisdiction as finally adjudicated, the court has an article III obligation to the parties before it while they are before it, and isn't that sufficient?

Mr. Maness: Yes.

But the answer, I think, is the parties should not before the court if it lacks article III subject matter jurisdiction.

They should be dismissed or remanded.

Unknown Speaker: You wanted--

Mr. Maness: Yes, I'm asking the Court to hold district judges as accountable as we are under rule 11.

Absolutely.

Unknown Speaker: --I suppose you think personal jurisdiction is another matter?

Mr. Maness: Yes, absolutely, under Insurance Corporation of Ireland.

Unknown Speaker: Well, what if, what if the reason, what if the reason you don't have personal jurisdiction is because the Constitution forbids it?

Mr. Maness: I think that then would presumably implicate article III subject matter jurisdiction and would be in our case then.

Unknown Speaker: So if some court is wrong in thinking it has long-arm jurisdiction and wrong because the Constitution says it's wrong, then you would be making the same argument.

Mr. Maness: I don't think so, because the Insurance Corporation of Ireland draws a very clear line between personal jurisdiction that can be, for example, established by rule 37 sanction and article III subject matter jurisdiction.

Before I reserve, with the Court's permission, a few moments for rebuttal, I would like to suggest that Cooter & Gell, which is the linchpin of Coastal's arguments, really doesn't control this case.

It's not a constitutional decision.

The Court wasn't confronted with an article III issue in that case.

And perhaps most significantly, the Court in Cooter & Gell specifically adverted to the district court's article III subject matter jurisdiction as the source of its authority, both for considering the merits of the case and for imposing sanctions.

With the Court's permission, I will reserve just a few moments.

Unknown Speaker: Very well, Mr. Maness.

Mr. Beatty.

Is it Beatty or Beatty?

Argument of Michael L. Beatty

Mr. Beatty: Beatty.

Mr. Chief Justice, and may it please the Court:

Just as opposing counsel has already acknowledged, there are two bases upon which we believe that the court has jurisdiction in this case.

The first is the inherent power and manifestations of that inherent power represent both the inherent power to police proceedings as well as the inherent power to determine jurisdiction.

As a separate and independent basis, however, we suggest to the Court that the necessary and proper cause through which the Rules Enabling Act was passed and rule 11 was promulgated also provides a sufficient constitutional basis which is the question presented.

That is the constitutional basis for rule 11 sanctions in this case.

Now, opposing counsel is willing to concede that inherent power certainly exists.

Inherent power exists outside of article III, section 2 subject matter jurisdiction.

And once this concession is made, it becomes extremely difficult, indeed, I would suggest impossible, to reconcile the position of the petitioner in this case.

Unknown Speaker: Except for, except for the Catholic Conference of Bishops case.

Why wouldn't that have come out the other way if it's inherent power that you argue for, exists in this context.

Mr. Beatty: What we had in Catholic Conference was a situation in which the bishops did exactly what Mr. Willy could have done.

The bishops had a situation where they were held in civil contempt.

They then sought an immediate interlocutory appeal.

And they said, we are not going to participate in this proceeding any longer because we believe that you do not have jurisdiction in the underlying case, and as a result we must respectfully decline to tender any documents or to honor the subpoena.

As a result, that case went up.

Justice Stevens has already pointed out if the Catholic bishops' attorneys had said we believe that there is no jurisdiction, but we want to brief the issue on the merits, we would like to address the merits of this case and in the context of that, what they did was they cited misleading citations, rules of evidence that didn't exist, tendered documents to the court with affidavits that were wholly inadequate to establish them, 1,200 pages, and said, oh, and read this by the way, then I submit that Catholic Conference would say, first of all that this was a civil contempt matter and what happens is there's no jurisdiction, but the court will retain jurisdiction on the rule 11 issue and will sanction and should sanction attorneys when their misbehavior reaches a--

Unknown Speaker: So you would draw the line between standing on your rights and refusing to proceed further and that cannot be the subject of a sanction.

But if you do proceed even while protesting all the time that there is no jurisdiction, then you're subject.

Mr. Beatty: --Certainly.

I think, I was trying, I'm trying to go through all the hypotheticals that I could imagine in my mind.

Unknown Speaker: Instead of a hypothetical, what about this very case?

What is the plaintiff supposed to do?

The plaintiff has filed the lawsuit in a State court, got removed to the Federal court, he says I won't go ahead, he goes ahead and files another lawsuit in the State court, gets removed again.

How is he ever going to get his rights vindicated if he keeps getting removed to the Federal court?

Mr. Beatty: Well, the short answer, Your Honor, is that he can behave.

That is what--

Unknown Speaker: Well, of course.

But I don't see how your line works in this case.

If there's no contempt, you got no problem.

And you can also punish him by criminal contempt.

Your opponent agrees to that.

But I don't understand the line you draw as applied to this fact situation.

Mr. Beatty: --I'm sorry, perhaps I didn't understand your fact situation.

If what happened is there was a removal and he believed that there was not appropriate subject matter jurisdiction in the case--

Unknown Speaker: Right.

Mr. Beatty: --and he simply refused to respond, then what would happen is a judgment would be entered against him and he would then have the opportunity to appeal the lack of subject matter jurisdiction to the Fifth Circuit.

Unknown Speaker: Oh, I see.

But he's not in effect, he continues, he litigates the jurisdictional issue.

Mr. Beatty: Certainly he litigates the jurisdictional issue because it's even conceded by petitioner that the Federal court has the jurisdiction to determine jurisdiction.

He can't escape that fact.

And he would willingly submit to that.

He would also say, I would behave in that circumstance.

So he has a choice.

Unknown Speaker: Well, but did he do any more than contest the jurisdictional issue in this case?

Mr. Beatty: Certainly, Your Honor.

Absolutely, he did.

What happened, what happened after the case, after the motion to remand was denied, a motion to dismiss was filed and a motion for partial summary judgment was filed by Willy, by the petitioner in this case, a motion for partial summary judgment on the merits.

What then happened was misleading citations which were discussed in the brief as though the omitted portion was not omitted, what happened was citations to rules of evidence that did not exist, all of those happened in the context of the motion for summary judgment.

Unknown Speaker: Let me just be sure I get the procedure.

You're suggesting he had to take an adverse judgment on the merits and then appeal the jurisdictional issue because he couldn't have appealed the--

Mr. Beatty: No.

He did have, again, he did have that one other alternative.

It's a dichotomy, I agree.

One is that he can say, I'll take a judgment against me and appeal jurisdiction.

The other thing he could do is say I will litigate the merits and I'll behave.

Unknown Speaker: --Oh, right.

Right.

Mr. Beatty: I hope and I would submit that that's not a hard, that shouldn't be that difficult a choice for a litigant to take.

Unknown Speaker: Well, it's a little different choice, though, than the choice of the subpoenaed party in the Catholic Bishops case.

That's the point I'm making.

Mr. Beatty: Yes.

Yes.

I would concur.

And as a result what happens is once we begin to say that there is inherent power both to determine jurisdiction and inherent power that exists within the court to police its own proceedings, then there must be the ability to sanction someone who does the kind of activity which is at stake in this particular case.

Really, as a constitutional matter, the only thing that petitioner can raise is the fact that somehow attorney's fees might not be applicable.

And yet that argument has been rejected.

The Court has held that attorney's fees certainly can be imposed either under rule 11 or under the court's inherent power.

Unknown Speaker: Well, our, our cases in Chambers against NASCO and Hutto against Finney suggests that fee shifting sanctions are analogous to civil contempt.

And perhaps that answers the question.

Mr. Beatty: If I might, Your Honor, address both that issue of Hutto v. Finney as well as the issue of attorney fee shifting.

It was pointed out both in the majority by Justice White that the reason that fee shifting is of concern is because of concern for the American rule.

Now I submit that that is not a constitutional impediment, that is, a court could take, act further.

The Court has just elected to stop short of that and say, on fee shifting we're going to honor what we believe, what Justice Scalia referred to in his dissent as deeply rooted history and congressional policy.

And so for that reason, there's a slight rub, but it's not a constitutional rub at the attorney's fee level.

And then with regard to Hutto v. Finney, if you look at that, recall that that case was the prison case dealing with a situation in Arkansas in which Arkansas had repeatedly been told, please take action.

It was more than an exhortation of please, it was a take action.

And that that had not been done in order to clarify, in order to remedy the problems in their prison system.

And therefore, the Court imposed a $ 20, 000 attorney's fee sanctions, but said in that case we hope that will incline them to behave in the future and hope that they... and that was civil contempt.

Here, and I would refer to your decisions over and over in Business Guides as well as your decision in Cooter & Gell.

Unknown Speaker: I don't think they help you because there there was article III jurisdiction at one point in those cases.

I don't see how that helps you.

Mr. Beatty: I don't raise it for that position.

I raise it for the position that it was repeatedly said rule 11 sanctions are designed to punish.

Rule 11 sanctions are designed to deter misconduct.

Rule 11 sanctions are designed to curb abuses of the judicial process.

The language that's used.

And therefore, in Cooter & Gell you can get the results where even though the case was dismissed and no longer present before the court, the court could say, I nonetheless wish to sanction this conduct because that's not the kind of behavior we wish to condone, just as in this case either through the inherent power or through the use of rule 11 sanctions, the court should be able to say exactly the same thing.

You may certainly contest jurisdiction if you wish.

You may be here and contest the merits if you wish to do that.

But the one thing the court has a right to demand of all litigants is that they follow the rules.

If I might, simply because it would appear that from an attorney's fees standpoint, there certainly is not a problem, a constitutional limitation, I would submit also that there is not a problem with regard to the inherent power operating outside of article III, section 2.

Gompers is an example of that situation, albeit Gompers was a situation in which criminal contempt was ultimately used as the sanction.

In Gompers v. Buck's Stove, what happened was after the case had been litigated but was on appeal, there was a settlement.

As a result, the court noted in its last paragraph this case is now moot, but, said, we retained jurisdiction in order to see whether or not there was a contempt which should be punished.

And it's because of that, the court's ability to go back and look and punish activities which does take place within the court's proper and justiciable sphere.

Unknown Speaker: But your argument on punishment, I'm not sure he disagrees with, with the distinction he emphasized from United Mine Workers between civil and criminal.

Mr. Beatty: But... I understand that.

Rule 11 is not, is more like.

And I think that's the best way to describe it.

Unknown Speaker: You think it's more like criminal.

Mr. Beatty: It's more like criminal.

Unknown Speaker: But, wait a minute on it.

Two questions.

One, are the procedures adequate for criminal contempt?

And secondly, who gets the money?

Is it paid to the court or paid to the opposite party?

Mr. Beatty: It is, in rule 11, in this situation, it is paid to the opposite party.

Unknown Speaker: And is that typical of criminal situations?

Mr. Beatty: In a criminal contempt situation it might be, but normally is not done.

And certainly there are additional constitutional safeguards.

However, in the inherent, in the use of the inherent power what has happened, and I would like to quote if I might Justice White, when he refers in Chambers v. NASCO to the parties and to Hutto, he says the imposition of sanctions in this instance transcends a court's equitable power concerning relations between the parties and reaches the court's inherent power to police itself, thus serving the dual purpose of vindicating judicial authority without resort to the more drastic sanctions available for contempt of court and making the prevailing party whole for expenses caused by his opponent's obstinacy.

That's the inherent power as noted in the majority opinion, gave the court the opportunity to do something less than criminal contempt.

Unknown Speaker: But have we ever described that kind of inherent power in a case over which the court has no jurisdiction?

Mr. Beatty: The Court has not dealt with this particular situation before, inherent power in this particular situation where subsequently--

Unknown Speaker: Inherent power when they've got no power at all.

Mr. Beatty: --I beg your pardon?

Unknown Speaker: Inherent power, when we have no power at all.

Mr. Beatty: Oh, but no--

Unknown Speaker: We have power to, now the criminal contempt power, that's easy.

That's settled and so forth.

But is there any case, do you have any case that's really held that in a case of where there's no jurisdiction you can impose a sanction on an adverse party to pay, you know, to pay to your opponent in litigation?

Mr. Beatty: --No.

I cannot cite you--

Unknown Speaker: But in Hutto against Finney, I may be fuzzy about it, but that was really a statutory case.

That was enforcement of the civil rights attorney's fee award action.

Mr. Beatty: --Yes, but the argument that was raised was a rule 11 case because it was, Arkansas was arguing that there couldn't be an imposition of attorney's fees against them because it would interfere with their position--

Unknown Speaker: The Eleventh Amendment, yes.

But that wasn't the sole grounds for rejecting that.

Mr. Beatty: --I apologize.

That's the reason this case is here.

But once you say that the court has this inherent power to govern proceedings... let me, for example, turn to jurisdiction to determine jurisdiction.

If what happens is, let's assume just by way of assumption that what happens is that you have an environmental case in which a standing issue is raised regarding someone in Sri Lanka.

It could be entirely possible that that case could be litigated a significant way down the road without having a jurisdictional determination made.

Indeed, it could be possible that the jurisdictional circumstance could change.

For example, the litigant could die.

The case could thereby become moot.

We couldn't even solve the problem by overruling Catland v. United States in saying before anything else will happen, before anything else will happen, we must make certain that we have subject matter jurisdiction.

You take the case from the district court to the court of appeals to the Supreme Court and then you would say you have jurisdiction, go back to the district court.

It can be raised at any time.

It may well happen that circumstances change such that all of a sudden the court is divested of jurisdiction.

And what the argument of petitioner seems to suggest is that during that entire preceding period there would be no opportunity to impose rule 11 sanctions on a litigant in a case.

And that's what's so troublesome.

I come here--

Unknown Speaker: Since we got along without rule 11 for a long time, that wouldn't be the end of the world.

[Laughter]

Mr. Beatty: --Your Honor, I--

Unknown Speaker: And the question is really that, whether it isn't enough to protect the court's integrity against these assaults to have the criminal sanctions available, which you call, you call the rule 11 lesser sanctions, but in one respect they're greater.

You don't have the kind of safeguard, the kind of protections that I think the contumacy can be less probably under rule 11 than is needed for criminal sanctions.

Mr. Beatty: --The importance of the case I don't underestimate.

However, it's important to note, remember that the 1983 amendment indicated that what happened was that they needed to change the sanctions in order, for example, to establish an objective test as opposed to a subjective test.

The advisor said, we need to be able to get at this conduct.

I come to you as a person who practices primarily in front of the district courts.

We all know the problems that are existing down there.

I would suggest that even though we may have gotten along well for 200 years, primarily we've gotten along well for 200 years because people have obeyed the rules and do believe that rule 11 would apply.

That's what the majority of the lower courts have always suggested is that the rules would apply.

Certainly, the plain language of the rule applied and no one argues with it.

The rules apply in every case.

And this is the judicial standard that has always been used, utilized, which if you look at the plain language of the rule, and no one questions that it applies in all civil cases, it applies by rule 81(c) in all cases which are removed.

Unknown Speaker: Yes, but counsel, you're talking about the relatively narrow category of cases.

And they really are very... they're a fair number, but they're comparatively small in which it turns out there was no jurisdiction to start with.

And defeating your position would in effect impose on lawyers a very careful obligation to be darn sure about jurisdiction before they file rule 11 motions or anything else.

And your client booted it on that issue.

Mr. Beatty: Of course, my suggestion with regard to my client is that, and I've had, we've had a couple of cases come up like this.

You get up and all of a sudden the Supreme Court makes a decision like Merrell-Dow and all of a sudden everybody says, whoops, let's go back and look at subject matter jurisdiction.

Or for example--

Unknown Speaker: Yes, but that isn't this kind of case.

That isn't this case.

Mr. Beatty: --Well, this is this case.

This is what happened on the jurisdiction issue.

It's the Merrell-Dow which says positively, ultimately if the Fifth Circuit Court of Appeals on the jurisdictional issue.

It's also true of Carden v. Arkoma Associates.

And neither things were all of a sudden, here, we're questioning whether or not limited partnerships can meet the diversity jurisdiction.

Parties litigate and go through the process and then all of a sudden find out that what they were doing was not proper.

But that doesn't mean that litigants shouldn't behave once they're in front of a courtroom and in the courtroom, once these issues have been decided and can properly be brought up on appeal.

All we're asking is that rule 11 sanctions be available so that people will behave.

As a constitutional matter--

Unknown Speaker: It's certainly a reasonable position.

Maybe there should be a statute like that.

Mr. Beatty: --Well, but, my argument, of course, would be that there is, that there is the equivalent of a statute on that.

What we have is, we have the necessary and proper cause as the constitutional issue.

What we secondly have is we have the Rules Enabling Act.

And certainly 27(b)(2)(b) says it should not abridge, enlarge, or modify substantive rights.

But here, I want to emphasize that Mr. Willy's substantive rights are absolutely intact.

His case on the merits proceeds in the district court in the State of Texas today.

It has not been affected one iota, unlike many of the other cases in which we're looking at procedural rules and we're asking about the impact on a litigant and he may well lose his case on the merits as a result of the impact of the Federal rule.

Here there has been no impact whatsoever.

And again, that would point out the point that, what I think is a very important issue which is it would seem that either from the standpoint of separation of powers or from the standpoint of Federalism, that there's not a competing interest on the other side.

Unknown Speaker: Wouldn't that argument about, you know, that Federal rules don't affect substantive rights, wouldn't that have, again, produced a different result in the Conference of Catholic Bishops case?

I mean, that's what stands between you and what you want to do, it seems to me.

That case comes out differently if we accept your argument.

Mr. Beatty: No, Your Honor, again, and frankly, because I accept the argument that you have, or the distinguishing factor that you already made, which is that that was a civil contempt case by a nonparty who all of a sudden, who had that right, that immediate right of an interlocutory appeal.

He was able to bring that up.

Here what we have is we have the Court consistently said we don't want to have piecemeal litigation.

Catland v. United States says raise your jurisdictional issue, let's go through and litigate the merits and take it on up.

Unknown Speaker: My only point is that distinction is not in rule 11.

If you're going a constitutional route, if you're going in an inherent power route, I think you can make that distinction.

But I'm not sure that you can make it in rule 11.

Mr. Beatty: Well, Your Honor--

Unknown Speaker: If your argument is no substantive rights are affected, rule 11 simply covers this.

It's an easy case.

Then Catholic Bishops was a hard case and you got it wrong.

Mr. Beatty: --Well, except, Your Honor, to the extent that you say that the rules, the rules themselves, recognize the jurisdiction of a court to its inherent power.

So what happens, all that does, all that does is that just circles that.

If what happens is the rules apply where the courts have jurisdiction and the courts have jurisdiction everywhere under article III, section 2.

Unknown Speaker: If that's all you mean by your rule 11 argument, it just falls back onto the constitutional inherent power argument, I'm sure.

Mr. Beatty: But, Your Honor--

Unknown Speaker: It doesn't get you very far.

Let's just talk about inherent power then and forget about rule 11.

Mr. Beatty: --Except, Your Honor, the thing that is important to note there is the question presented to the Court is a constitutional one and if the issue is does the necessary and proper clause support the legislature that the Congress, in this instant, is passing legislation which would get at this type of behavior.

And the answer is yes.

And that's the reason I say there are two separate... and a constitutional basis for this.

Unknown Speaker: Was the bishops' case a constitutional case in your view?

Mr. Beatty: No, Your Honor.

Let me finally conclude that it would seem to me that one ultimately has to come out with, yes, there is inherent power, yes, that inherent power may well be shaped, not only by Congress, but the inherent power is reserved to the courts and the Court could use that since the beginning of the republic, either of those constitutionally to support the sanctions of rule 11 in this case.

Thank you very much.

Unknown Speaker: Thank you, Mr. Beatty.

Mr. Maness, you have 3 minutes remaining.

Rebuttal of Michael A. Maness

Mr. Maness: Mr. Chief Justice, the Court stated in Catholic Conference that a court, Federal district court's subpoena power under Federal Civil Rule 45 cannot be greater than its article III subject matter jurisdiction.

I suggest exactly the same principle compels the holding that a court's sanction power under rule 11 cannot be greater than its article III subject matter jurisdiction.

I would have thought at least since Sibbach against Wilson & Co. and in light of the express provisions of Federal Rule 82, that this isn't a rule 11 case because rule 11 can't enlarge the jurisdiction of the Federal district court.

And we're talking here about jurisdiction in a most fundamental sense, the power of a court to do something.

Another distinction, and I think it's crucial in light of the discussions we've had this morning is that in Catholic Conference the civil contempt sanctions were imposed against a nonparty and therefore were immediately appealable.

In this case, by contrast, we were stuck to the fly paper.

And conceivably, if the district court had not granted Coastal's motion to dismiss, we might have been in the Federal district court much longer than we were.

Finally, I would like to leave the Court with this hypothetical.

What makes Coastal's argument somewhat compelling is the assumption, and I think it's an appropriate assumption, that the district court acted in good faith.

But suppose the district court acted in bad faith, suppose from the beginning it said, look, I realize I don't have article III subject matter jurisdiction, but I've got to decide this case anyway since it's very important question of State law.

And if I leave it to the State courts, they're probably going to botch it.

Is it conceivably arguable then if the district court proceeds to hear and preside the case over a period of years that the court could then attempt to award attorney's fees to the party wrongly moving the case?

And if the Court is going to draw a distinction between good faith exercises of colorable article III power and bad faith exercises, then it's right back where it was at Catholic Conference.

And seven members of the Court, seven members of the present Court, rejected that argument fairly conclusively and fairly persuasively.

We think the Federal judicial power under article III doesn't depend on subjective mental processes of judges or litigants.

It depends upon the Constitution of the United States.

The sanctions order in this case violated the second section of article III and should be reversed.

Chief Justice Rehnquist: Thank you, Mr. Maness.

The case is submitted.

Attribution:

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