I have a post at SCOTUSBlog recapping yesterday’s decision in Daimler Chrysler AG v. Bauman. It begins:
Readers of the Supreme Court’s decision yesterday in Daimler Chrysler v. Bauman may have learned two things: First, it is increasingly difficult to establish general jurisdiction over a corporation for conduct unrelated to the forum; second, the Court ultimately resolves the issue it wants to, which may not be the one the parties focused on. . . .
As promised, here is the brief submitted by a second group of professors, together with former SEC Commissioners, in Halliburton Inc. v. Erica P. John Fund, Inc.
It argues that the Court “need not wade into the complex and highly technical debate over the efficient markets hypothesis to answer the question presented here. Instead, the Court can, and should, decide this case by applying well-established principles of statutory construction.” It argues that, to infer how the 1934 Congress would have addressed the issues had the 10b–5 action been included as an express provision in the 1934 Act, the Court should consult the express causes of action in the securities laws, and borrow from the most analogous one. The brief argues that
that “most analogous” provision is Section 18(a) of the Securities Exchange Act of 1934. Section 18(a) is the only express right of action in existence in 1934 that authorizes damages actions for misrepresentations or omissions that affect secondary, aftermarket trading. It is the only express right that provides a cause of action for damages in favor of openmarket purchasers and sellers against those (such as issuers or their executives) who allegedly made false or misleading statements, but did not transact with the plaintiffs—the quintessential Section 10(b) class claim today.
Section 18(a) explicitly states that plaintiffs must demonstrate that they transacted “in reliance upon such [false or misleading] statement[s].” 15 U.S.C. § 78r(a). They must, in other words, demonstrate actual, “eyeball” reliance.14 Section 18(a)’s legislative history, moreover, underscores the need for plaintiffs to demonstrate actual reliance for aftermarket fraud. As originally drafted, Section 18(a) contained no reliance requirement, but Congress rejected that no reliance version in the face of a torrent of criticism. As enacted, Section 18(a) thus prohibits recovery “unless the buyer bought the security with knowledge of
It’s been a busy enough week that I haven’t yet been able to post on the brief that colleagues and I filed on behalf of law professors Adam Pritchard and Todd Henderson in Halliburton Co. v. Erica P. John Fund, Inc., involving the continuing validity of Basic Inc. v. Levinson. Below is a short summary of the argument.
Basic’s view of capital market efficiency was unrealistic. Rather than being totally “efficient” or “inefficient,” securities markets enjoy varying degrees of efficiency, and incorporate information at varying rates. Although some well-developed markets incorporate most information into prices relatively quickly, research conducted since Basic suggests that even the most open markets are not completely efficient and incorporate some information slowly (if at all). Accordingly, Basic’s understanding that a particular alleged fraud will necessarily be incorporated into the stock price is no longer sound.
Moreover, lower courts’ attempts to estimate efficiency have been inconsistent and empirically inaccurate. Faced with the difficult task of determining whether a market is “efficient,” courts have resorted to examining proxies for efficiency. Many such proxies are highly correlated with each other (and therefore redundant), while others have little empirical relationship with efficiency, and there is confusion about how to weigh the various factors. The result is a doctrinal and empirical muddle for both courts and litigants.
The brief argues that “[i]n light of the difficulties in evaluating efficiency, the Court should shift the focus of fraud on the market inquiries from a market’s overall efficiency to the question whether the alleged fraud affected market price.”
The most novel aspect of the argument is our contention that the conventional measure of damages “should be limited to cases in which the plaintiff can show actual reliance or that a material misstatement has distorted the market price for […]
The newest issue of the NYU Journal of Law and Liberty is available online. It contains their special Supreme Court Review-Preview, which in turn contains my short article, Interstate Recognition of Same-Sex Marriage after Windsor, which I’ve mentioned here before. It begins:
Last June, the headlines said that the Supreme Court’s decision in United States v. Windsor struck down the Defense of Marriage Act. But that is only half true. The Defense of Marriage Act had two important provisions. Section Three defined “marriage” for purposes of federal law as being limited to the union of one man and one woman. It was invalidated in Windsor. But the Act’s other section, Section Two, says that states are not required to recognize one another’s same-sex marriages. Section Two was not invalidated, but it may be soon.
The Review-Preview also contains interesting-looking articles by Fernando Teson, Barry Friedman, Ilya Shapiro, Peter Shane, and by co-bloggers David Bernstein and Nick Rosenkranz. Richard Epstein wrote the introduction.
(I haven’t yet figured out how to download a PDF from the journal website, but the final version of mine is also on my SSRN page.) […]
This morning the Supreme Court granted Utah’s application for a stay of the district court’s injunction requiring state officials to recognize same-sex marriage within the state. The stay application was initially submitted to Justice Sonia Sotomayor, who referred it to the entire court. As Lyle Denniston observes, there is no indication that any member of the Court objected to the stay. The stay is to remain in place until the resolution of Utah’s appeal before the U.S. Court of Appeals for the Tenth Circuit. Rick Hasen has more. […]
In his Brown v. Allen concurrence, Justice Robert Jackson famously said of the Supreme Court “We are not final because we are infallible, but we are infallible only because we are final.” The Supreme Court inevitably makes mistakes and reaches the wrong result in some non-trivial number of cases. Accordingly, for the past two years I have included the following question on the exam in my First Amendment constitutional law course:
As Justice Jackson observed, the Supreme Court does not necessarily arrive at the correct conclusion in every case, and even when the Supreme Court does reach the proper result, it may not always do so on the best grounds. Accordingly, please identify a Supreme Court decision covered in this course that you believe was in error, explain your reasons for believing it was wrongly decided, and either a) explain what you believe the Court should have done instead and the rule or interpretation it should have adopted or b) propose a constitutional amendment to correct the Court’s error. Be sure to identify possible objections to your recommended outcome or proposed amendment and explain how you would address such concerns. So, for example, it is important to consider how overturning one decision would or would not affect other cases and other parts of First Amendment doctrine.
As one might expect, many students write on highly controversial decisions, such as Citizens United, Lee v. Weisman, Locke v. Davey, or Holder v. Humanitarian Law Project. Interestingly enough, however, in each of the last two years more students have chosen to address Marsh v. Chambers than any other decision. The numbers aren’t large — 4 of 26 chose Marsh last year, 7 of 35 this year — but it’s interesting nonetheless. One question I have is whether students write about Marsh […]
Last night, before heading to Times Square for the New Year’s festivities, Justice Sonia Sotomayor granted a request for a stay of enforcement of the “contraception mandate” against several Catholic organizations. Here’s the order and more from SCOTUSBlog and the AP. In other pending cases, injunctions pending appeal were granted by split panels of the D.C. Circuit and the Sixth Circuit (see also here). The U.S. Supreme Court will hear two challenges to the “contraception mandate” later this term. […]
In his 2013 Year-End Report on the Federal Judiciary, Chief Justice John Roberts comments on the negative effects of the sequester on the operation of the judicial branch.
By its own initiative, the Judiciary had already achieved significant cost reductions when the sequester provisions of the Budget Control Act of 2011 went into effect on March 1, 2013. The five percent across-the-board sequestration cut reduced Judiciary funding by nearly $350 million in fiscal year 2013—a reduction on top of the cost savings that the courts had already achieved. The impact of the sequester was more significant on the courts than elsewhere in the government, because virtually all of their core functions are constitutionally and statutorily required. Unlike most Executive Branch agencies, the courts do not have discretionary programs they can eliminate or postpone in response to budget cuts. The courts must resolve all criminal, civil, and bankruptcy cases that fall within their jurisdiction, often under tight time constraints. And because many of the Judiciary’s expenditures, such as rent and judicial salaries, must be paid regardless of sequestration, the five percent cut that was intended to apply “across-the-board” translated into even larger cuts in discretionary components of the Judiciary’s budget.
The Executive Committee of the Judicial Conference—the judicial body responsible for funding allocations—responded to the sequester by adopting a number of emergency measures. Among its actions, the Executive Committee imposed a 10 percent reduction on funding allocations to court units, which resulted in further staffing losses in the courts. The combined effects since July 2011 of flat budgets followed by sequestration reduced on-board court staffing levels by 3,100 (14 percent) to about 19,000 employees—the lowest staffing level since 1997, despite significant workload increases over that same period—and reduced federal defender offices staffing by 11 percent in fiscal year 2013 alone.
Around 12:50pm EST I’ll appear on HuffPost Live to discuss legal cases to watch in 2014, with a focus on the Supreme Court. Mike Sacks is the host and the other guests are Carrie Severino of the Judicial Crisis Network and Georgia State University law professor Eric Segall. I’ll post a link to the segment after it airs.
The U.S. Court of Appeals for the Tenth Circuit’s refusal to stay a district court decision invalidating Utah’s ban on same-sex marriage is sending the issue back to the Supreme Court less than six months after last summer’s the Windsor and Perry decisions. Adam Liptak reports:
The question for the Supreme Court in the short term will be whether to block Judge Shelby’s ruling while appeals proceed. The state’s request will initially be directed to Justice Sonia Sotomayor, the member of the court responsible for overseeing the Tenth Circuit, but she will almost certainly refer the matter to the full court. It is likely to act within several days.
The Supreme Court will face difficult calculations, ones it did not have to confront in reviewing decisions from federal courts in California striking down Proposition 8, the state’s ban on same-sex marriage. In that case, the United States Court of Appeals for the Ninth Circuit, in San Francisco, stayed both the trial judge’s ruling and its own as appeals went ahead.
The ultimate argument for a stay would be to preserve the status quo while the underlying legal issues are resolved. Were Judge Shelby’s decision to be overturned, courts would face the choice of invalidating those same-sex marriages conducted in the interim, or rewarding those who raced to the courthouse in the wake of the initial decision. Yet, as Rick Hasen notes, that will not buy the Court all that much time. It may be too late for a decision on the merits of this issue this term, but the Supreme Court may have little choice to decide whether there is a constitutional right to same-sex marriage as soon as 2015.
UPDATE: According to Andrew Koppelman, the Utah AG’s “goof” is the reason there was no stay in the […]
The Green Bag has picked, as an example of “exemplary legal writing,” Professor Stephen Sachs’s amicus brief in Atlantic Marine v. U.S. District Court (previously discussed here).
This reminds me that I didn’t have a chance to write a post when the Supreme Court decided Atlantic Marine a few weeks ago. The decision was unanimous and it did not adopt the Sachs position. However, the Court also went out of its way to leave open the possibility that the Sachs position could be adopted in a future case where it was properly preserved and raised:
An amicus before the Court argues that a defendant in a breach-of-contract action should be able to obtain dismissal under Rule 12(b)(6) if the plaintiff files suit in a district other than the one specified [*9] in a valid forum-selection clause. See Brief for Stephen E. Sachs as Amicus Curiae. Petitioner, however, did not file a motion under Rule 12(b)(6), and the parties did not brief the Rule’s application to this case at any stage of this litigation. We therefore will not consider it. Even if a defendant could use Rule 12(b)(6) to enforce a forum-selection clause, that would not change our conclusions that §1406(a) and Rule 12(b)(3) are not proper mechanisms to enforce a forum-selection clause and that §1404(a) and the forum non conveniens doctrine provide appropriate enforcement mechanisms. [FN]
[FN:] We observe, moreover, that a motion under Rule 12(b)(6), unlike a motion under §1404(a) or the forum non conveniens doctrine, may lead to a jury trial on venue if issues of material fact relating to the validity of the forum-selection clause arise. Even if Professor Sachs is ultimately correct, therefore, defendants would have sensible reasons to invoke §1404(a) or the forum non conveniens doctrine in addition to Rule 12(b)(6).
It’s easy to […]
To me, today’s decision of the United States District Court for the District of Utah in Brown v. Buhman is much clearer and carefully-reasoned that Orin finds it to be. There may be plenty of blogging on the case, and Eugene’s analysis next week, after he’s had a chance to analyze it, will provide the perspective of the guy who actually did write the textbook on the First Amendment. I have merely taught the First Amendment, using his textbook (and taught the 14th Amendment using Randy’s textbook).
I’m no fan of the collected works of Edward Said, but I thought the Court’s use of Said entirely defensible. As the Court details, 19th-century hostility to polygamy was based, in part, on polygamy’s association with non-white races. As the U.S. Supreme Court wrote in Reynolds v. United States, “Polygamy has always been odious among the northern and western nations of Europe, and, until the establishment of the Mormon Church, was almost exclusively a feature of the life of Asiatic and of African people.” 98 U.S. 145, 164 (1879). Thus, Said’s theories of “Orientalism” and the “other” are useful tools for explaining the situation. The historical analysis is necessary to the case, because part of the Opinion requires an analysis of the 1894 “Irrevocable Ordinance” in the Utah Constitution outlawing polygamy. That constitutional provision was part of the price that Utah paid for admission to the Union.
Utah’s anti-bigamy ordinance has a normal provision, and an unusual provision: “A person is guilty of bigamy when, knowing he has a husband or wife or knowing the other person has a husband or wife, the person purports to marry another person or cohabits with another person.” Utah Code Ann. § 76-7-101(1) (2013).
Judge Waddoups upholds the first part, about marrying a second person, as […]
Robert Barnes’ piece in the Washington Post today recounts a hypothetical from Justice Breyer at yesterday’s argument in Lozano v. Alvarez, involving the tolling of the statute of limitations under the 1980 Hague Convention on the Civil Aspects of International Child Abduction. Following up on Justice Sotomayor’s hypothetical about the effect of a parent taking a child and concealing them in Peoria, Illinois, Justice Breyer asked (see p.33) about a circumstance where a “mother kidnaps the child” and they “live in a grain elevator, a nicely refurbished grain elevator, in Peoria for a year.”
Because Peoria is my (much-loved) hometown, I happen to have a photo of “a nicely refurbished grain elevator” just outside Peoria. Peoria is more industrial than agricultural, so there’s many more refurbished warehouses than grain elevators; indeed, this is the only one I know of, which why it warranted a photo.
I hasten to add that the question is very much a hypothetical in the most relevant sense, in that there is no reason whatever to believe that anyone is living there in violation of a custody order.
Justice Scalia’s opinion today in United States v. Woods is a minor loss for the taxpayer bar, overturning a longstanding Fifth Circuit doctrine that made it harder for the government to impose exorbitant penalties when it successfully invalidated a transaction as a tax shelter. [Full disclosure: In private practice, I worked on Bemont v. United States, which is expressly abrogated by today’s decision.]
But Woods may be more noteworthy for a minor formatting innovation. [BUT SEE UPDATE BELOW.] As Professor James Duane noted last year to the Green Bag, a legal writing book co-written by Justice Scalia advocates using descriptive headings made of actual words, rather than mere numbers and letters. But as Justice, Scalia had followed this advice only once, in a solo dissent in Gonzalez v. Thaler. Duane wrote:
Justice Scalia’s readers were inspired to hope that his tantalizing dissent in Gonzalez might be a sign that he had finally come around to agreeing with his co-author, and a sign of things to come. But it was not meant to be, at least not yet. Since Gonzalez was decided, Justice Scalia has authored several more opinions, but not one of them follows the novel format of that historic dissent. Is his opinion in Gonzalez a precursor of a bold new writing style we can expect to see from Justice Scalia from time to time in other cases? Or was it merely a device that he thought would somehow be especially appropriate for that case? Only time will tell. In the meantime, those of us who read Supreme Court opinions for a living can only wait and hope.
Well the wait is over. In Woods, the captioned headings have returned! (“I. The Facts” etc.) And this time, in an opinion for a unanimous Court, not a solo […]
My article on Kiobel v. Royal Dutch Petroleum is up on SSRN. It is forthcoming in the Notre Dame Law Review‘s Federal Courts Issue.
Here is the abstract; comments on the article are welcome:
The unanimous ruling in Kiobel v. Royal Dutch Petroleum blind-sided the legal academy. The case involved one of the most contentious and dynamic aspects of U.S. foreign relations law, the Alien Tort Statute (ATS). Yet the Court surprised observers by deciding the case on grounds almost entirely ignored by the academy – the presumption against extraterritoriality.
Amazingly, despite an extensive academic literature on the ATS, the winning issue in Kiobel had never been examined in a law review until a 2003 student note. No court ruled on it until 2010. Indeed, the issue had not even been part of the litigation in Kiobel until the Court sua sponte raised it during oral argument. Finally, the Court’s unanimous endorsement of an extraterritoriality limitation came as yet another surprise to most observers, who predicted a split along more ideological lines.
The story of the extraterritoriality issue in ATS litigation is a case study in the path dependence of legal doctrine and of agenda-setting by the Supreme Court and the Justice Department. This Article examines the intellectual history of extraterritoriality arguments in ATS litigation, while placing Kiobel in a broader context of international trends in universal jurisdiction. The Article also considers possible reasons for this academic oversight. While normative approval of ATS litigation no doubted contributed to the neglect of the issue in the exciting early years of ATS litigation, its longstanding omission must also be attributed to broader intellectual factors. It demonstrates the power of sub silentio decisions: while courts had never dealt with presumption in ATS cases, most observers assumed the issue to have been