Appellate Law & Practice

A different kind of Supreme Court Speculation

On the eve of John Roberts' nomination as (Associate) Justice of the Supreme Court, I gave you all (via Slate) an alternative short-list that included Second Circuit Judges Walker, Raggi, and Parker, as well as some of my own musings about Judge Wesley.

So, as the President prepares to make another SCOTUS nomination, I give you a different short-list, this one from the People for the American Way.  According to the AP, the PFAW have a list of four:  Ann (not Karen) Williams, Edward Prado, and Second Circuit Judges Sonia Sotomayor and Jose Cabranes.  (Hat tip:  Confirm Them). 

I feel safe in saying that none of the four is a likely pick from this President, although it is worth noting that Judge Cabranes was apparently on short lists maintained by Presidents Clinton and Bush I and was also rumored to be a potential pick by Al Gore.  The CA2 hasn't had a judge elevated to the Supreme Court since Thurgood Marshall in 1967, and even he wasn't sitting at the time -- Justice Marshall resigned from the CA2 in 1965 to serve as Solicitor General.   (John Marshall Harlan, in 1957, was the last CA2 judge directly elevated to the Supreme Court). 

So it's about time.

Scope of Judicial Review of Mandatory Arbitration Agreements

U.S. Court of Appeals for the Ninth Circuit is set to issue an opinion with potentially far-reaching implications for contractual arbitration.  The question before the en banc 9th Circuit in Nagrampa v. Mailcoups is who decides the question of whether an agreement to arbitration is unenforceable because it is a part of a contract of adhesion - the courts or the abitrator.

Earlier this year, the three-judge panel of the 9th Circuit held that the question is to be resolved by the arbitrator,  Nagrampa v. Mailcoups, Inc., 401 F.3d 1029 (9th Cir. 2005).  The Court (O'Scannlain, Bea, and Cowen) relied on lesser-known Warren era precedent, Prima Paint Corp. v. Flood & Conclin Mfg. Co., 388 U.S. 395 (1967), which held that pursuant to the Federal Arbitration Act, federal courts can only adjudicate challenges to the validity of the specific arbitration clause.   Any challenge to the general validity of the contract itself is to be resolved by the arbitrator.  Applying that principle, the Nagrampa court held that the plaintiff's claim that the entire contract (including the arb. provision) was an uneforceable contract of adhesion was not a challenge to the validity of the arbitration clause, and thus could not be decided by the courts.  The enbanc court has now de-published this opinion.

Law.com reports that based on the questions at oral argument by the en banc panel, the Court appears to be leaning toward a conclusion that judges are still ultimate arbiters of whether a mandatory arbitration agreement is fair.  In my opinion, while such a conclusion would probably be a corrrect interpretation of the Arbitration Act, it could not be squared with Prima Paint. 

To be sure, Prima Paint majority  seems to be a poor interpretation of the Arbitration Act.  Section 4 of the Act allows the courts to hear cases in which making of the agreement for arbitration is not an issue.  The Prima Paint majority narrowly interprets this provision as limited to making of the arbitration clause.  To me, this makes no sense: on what basis did the Court sever an arbitration clause from the rest of the agreement?  Similarly, it makes no sense to have judges decide one aspect of unconsionability, and arbitrators another.  Also, allowing arbitrators to rule on contract formation fairness issues would do nothing to take advantages of what arbitrators do best: provide expertise in day-to-day performance of contract and quickly resolve cases.  Instead, arbitrators would be required to decide legal issues on which they are hardly better experts than judges.  Finally, to have an arbitrator decide the issue of whether a mandatory arbitration agrement is fair raises due process concerns -- an arbitrator would hardly be a neutral arbiter in that situation.

In light of these apparent problems, it is not surprising that as pointed out by Justice Black's dissent in Prima Paint, the congressional intent in enacting the Arbitration Act was to have the courts enforce agreements to arbitrate "unless the court, not the arbitrator, finds grounds in law or in equity for the revocation of any contract."  (388 U.S. at p. 412.)   Indeed, if there is no valid contract, there is nothing to arbitrate.

But despite its many problems, Prima Paint remains good law and I do not see how 9th Circuit could get around it.  If the court has no jurisdiction to hear that the entire contract was fraudulently induced, by logical implication, it cannot hear a challenge that the entire contract is a contract of adhesion.  As I read the Nagrampa opinion, the contract of adhesion challenge is directed at the entire agreement, not just the arbitration clause.

So, one way or the other, the case might well end up before the U.S. Supreme Court.  It would not surprise me to see the high court abandon Prima Paint severability approach and hold that the courts should decide all challenges to fairness of the mandatory arbitration agreement (whether directed to the arbitration clause or the entire contract). 

As usual, thanks to How Appealing for the tip about this interesting case.

UPDATE:  here is the post at the Aribtration Blog about this case, along with the link to the audio transcript for en banc oral argument.

CA9: Judicial Misconduct

The Ninth Circuit posts In Re Complaint of Judicial Misconduct,03-89037, which is notable for the angry dissents and tawdry (and perhaps abominable) details.  The underlying facts are available in In Re Canter, 299 F.3d 1150 (9th Cir. 2002).   The judge, by the way, is Manuel L. Real (see here).

Third Circuit Blog

The Third Circuit Blog has some interesting posts. Third Circuit...

• grants 2254 relief ... for Sixth Amendment violation -- trial court denied counsel's request for continuance and defendant proceeded to trial pro se
• Remands to Decide if Officer Deliberately Violated Miranda Before Getting Mirandized Statement
• expounds on definition of “testimonial” in ruling that admission of out-of-court statement was harmless error
• holds that Federal courts lack authority to review state court retroactivity decisions

CA2 (9.28-29.05)

Decisions from yesterday and today:

1.  Grand River Enterprises Six Rivers, Ltd. v. Pryor (Walker, Sack, Raggi):  This is an opinion on a range of subjects -- certification pursuant to Fed. R. Civ. P. 54(b), personal jurisdiction, and substantive claims under the commerce clause, the privileges and immunities clause, substantive due process, etc. -- challenging various state statutes enacted pursuant to a global settlement between 46 states and various tabacco companies.  Frankly, it didn't hold my interest.  I hope I haven't disappointed you.

2.  Billing v. Credit Suisse First Boston (Oakes, Katzmann, Wesley):  This case was known in the district court as In re Initial Public Offering Antitrust Litigation, a case alleging "an epic Wall Street Conspiracy."  The core allegation is that investment banks rigged the IPO process to inflate the price of securities and unfairly extract large profits from investors who were left in the dark.  As Judge Wesley observes at the opening of the opinion, these allegations fit logically under the securities laws, and indeed, as I reported in July (the second half of that post is worth re-reading on the eve of a new Supreme Court nomination, too), the companion securities suit is currently on interlocutory appeal to the CA2 after the district court certified a class action.  But this case arises under the antitrust laws; the district court dismissed it, holding that the securities laws preempted the field and created a so-called "applied immunity" under the antitrust laws. 

Anyway, the CA2 held that the "heart of the alleged anticompetitive behavior finds no shelter in the securities laws," and so vacated and remanded.  The opinion is a good primer on the IPO underwriting process, which is a mystery to me, so I instead refer you to yesterday's write-up in the New York Law Journal.

3. Cerra v. Pawling Central School District (Calabresi, Parker, Michael B. Mukasey (S.D.N.Y.)):  In this case raising questions under the Individuals with Disabilities in Education Act (IDEA), the CA2 reversed the district court's grant of summary judgment and full tuition to the plaintiff, holding that the district court erred in concluding that the School District failed to comply with IDEA’s procedural requirements, and in substituting its own judgment for that of the administrative decision-makers on substantive questions of educational methodology and practice.

4.  Braham v. Clancy (Pooler, Parker, P. Kevin Castel (S.D.N.Y.)):  The CA2 vacated and remanded this case brought by a pro se prisoner against his jailers for reconsideration in light of a series of cases decided by the CA2 explaining the exhaustion of administrative remedies requirement of the Prison Litigation Reform Act.

5.  Williams v. Comstock (Miner, Wesley, Jed S. Rakoff (S.D.N.Y.)) (per curiam):  In this case, on the other hand, the CA2 affimed the dismissal of a PLRA case for failure to exhaust the inmate's administrative remedies because he waited two years to file his institutional grievance, for no apparent reason.

6.  And in news from the Second Circuit, the Honorable Constance Baker Motley of the Southern District of New York passed away yesterday at the age of 84.  Judge Motley, the nation's first black female federal judge, was a crusader as a lawyer and a model jurist in nearly 40 years on the bench. 

7.  As reported widely, the Supreme Court granted cert. in the Vermont campaign finance case out of the CA2.  I leave the comment on this one to the experts, but I thought it was worth reminding you all that at least four CA2 judges felt that "[t]he Act at issue in this case is as unconstitutional as if Vermont were to create a dukedom, apply the thumbscrew, or tax Wisconsin cheese."  (In case you couldn't tell, that was Judge Jacobs, joined by Chief Judge Walker and Judges Cabranes and Wesley).  [Follow the links back for a few posts on the case].

CA1: nothing

they must not love me

CA5 - Obscenity

United States v. Ragsdale (Stewart, J.)

This opinion describes the contents of several extremely violent and purportedly non-consensual pornographic videotapes. Read at your own risk. The videotapes were being sold over the internet by Garry Ragsdale, a former Fort Worth police officer. He and his wife were charged with conspiracy and mailing obscene materials. As a quick reminder, the First Amendment test for obscenity as stated in Miller v. California, 413 U.S. 15 (1973), is: 1) the average person applying contemporary community standards would find that the work taken as a whole appeals to the prurient interest; 2) the work depicts specifically defined sexual acts in a patently offensive way; and 3) the work taken as a whole lacks literary, artistic, political, or scientific value.

1) Applying the Miller test for obscenity, the court affirms the convictions. The court notes that whether the sex depicted on the tapes was consensual or non-consensual is irrelevant to whether the videotapes are obscene, but it cites no authority for this proposition. It seems an interesting question that the opinion doesn’t devote much time to. Also of interest is the defendants’ claim that the tapes had scientific value because they are used to treat sex offenders and train police officers. I’ve never been to the police academy, but this seems doubtful to me.

The court holds that the prosecution need not present expert testimony to prove the elements of the Miller test. Nor need it present evidence to rebut the defendant’s expert testimony that the tapes are not obscene. The court also rejects the defendants’ argument that the prosecution must identify the particular deviant group that the tape would appeal to. The Fifth Circuit distinguishes a few Second Circuit cases and holds that this is only so where the tapes are so bizarre that the jury could not adequately judge whether it would appeal to anybody’s prurient interest without expert testimony.

2) The court rejects the defendants’ argument that the dialogue on the tape, which was in Japanese and Dutch, must be translated into English. Although the dialogue could provide context to the pictures and thereby render them not obscene in some cases, and translation is advised in future cases, the court has little trouble rejecting the defendants’ argument given the sparse dialogue and the nature of the video. It was not as if they were reciting Shakespeare, after all.

3) The Fifth Circuit rejects the defendants’ argument that the trial court improperly excluded other porno tapes purchased at neighborhood stores. The defendant wanted to show that rape tapes were widely available, and therefore did not fall below community standards. The court holds that the trial court did not abuse its discretion in excluding these tapes pursuant to Rule 403 because a jury could rely on its own knowledge of community standards.

4) The trial court did not err in excluding evidence that other juries in similar obscenity cases acquitted defendants. Jury verdicts are not evidence of community standards.

5) The trial court excluded evidence that the defendants acted after being advised by a business partner that a lawyer had advised him that their tapes were protected by the First Amendment. The court holds that this ruling is correct because knowledge that a tape was obscene is not an element of the offense.

6) The district court need not instruct the jury that it must find that a community standard exists.

7) As required by the First Amendment, the panel watched all the tapes and made an independent judgment that they were obscene. The court relies on the fact that the tapes purport to depict violent, unconsensual sex acts to find that they are patently offensive.

8) The court rejects a number of challenges to the defendants’ sentence. They are mostly run of the mill arguments. The only interesting one is that one of the defendants argues that his sentence should be lower because Texas punishes obscenity less harshly than the federal Guidelines. He argues that because obscenity is determined by community standards, the local community punishment should control. The defendant argues that the longer federal sentence violates due process. Although the court properly rejects the argument, the defendant would have a strong post-Booker argument that the disparity between the punishment he would have received in state court and the punishment he received in federal court should be taken into account in crafting a reasonable sentence. Several post-Booker courts have held that state court v. federal court sentencing disparity is a relevant consideration. The defendant in this case did not frame his argument in that way, so I don’t read the Fifth Circuit as rejecting this reasoning.

CA2 (9.28.05)

1.  United States v. Barrero (Sack, Katzmann, Parker):  The CA2 rejected the defendant-appellant's argument that the Sentencing Guidelines and the reference to them in 18 U.S.C. s. 3553(f)(1) -- the so-called "safety valve" provision -- should be considered advisory with respect to determining his eligibility for safety valve relief and that therefore the district court erred in finding him ineligible for such relief.

2.  KLC, Inc. v. Traynor (Walker, Cardamone, Richard Owen (S.D.N.Y.)):  The district court in this case entered a default judgment and a judgment of strict foreclosure (KLC held a lien on property owned by Traynor as a result of an early state-court judgment; KLC was trying to execute on the property to satisfy the debt).  On appeal, the CA2 upheld the default judgment but held that any foreclosure would violate Connecticut's homestead exemption.

3.  SEC v. Kern (Walker, Pooler, Wesley):  The defendants in this case engaged in the sale of unregistered securities, in violation of certain provisions of the Securities Act of 1933, 15 U.S.C. s. 77e.  Today's opinion concerns whether those sales fell into either an exemption created by 15 U.S.C. s. 77d(1) or a safe harbor under 17 C.F.R. s. 230.144.  The district court and CA2 agreed that they didn't.

4.  United States v. Myers (Sotomayor, Raggi, Hall):  A criminal defendant convicted of charges relating to child pornography appealed the imposition of a special condition of supervised relief prohibiting him from spending time alone with his son without prior approval from the Probation Department.  The CA2 held that the record was insufficient to assess the validity of the condition, and so remanded.

CA1: Younger abstention dismissals and 60(b)(6)

Chalupowski v. Berry, No. 05-1193 (unpublished), affirms a denial of FRCP 60(b)(6) motion (catch-all provision for vacating judgments).  The court concludes, “Even if the appellants had received notice of the motion to dismiss, their official capacity suit for injunctive and declaratory relief would have been properly dismissed...”  The case was dismissed on Younger abstention principles, because “Appellants asked the federal court to order the defendant, a state court appellate judge before whom a motion for contempt was then the only pending matter, to recuse herself ‘from further hearing in this matter.’ This the court could not do.”  For some reason, the District Court dismissed with prejudice, but I thought everyone knew that Younger Abstention dismissals were without prejudice. 

So, amazingly, the plaintiffs were able to use 60(b)(6) to modify the tenor of the dismissal.

Finally, in case you are interested, here is a Wikipedia article on the various flavors of abstention.  If you are interviewing for certain clerkships there will be  aquiz on this.

CA1: Town Politics and retaliation -- Maine Style

Tripp v. Cole, No. 04-2588.  Taking a break from Puerto Rican retaliation claims, the First tackles a Maine one.  Read on’ suckas !