Monday, September 12, 2011

Fiore v. Walden (9th Cir. - Sept. 12, 2011)

I'm going to have to agree with no one here.

Let me take Judge Ikuta's dissent first.  I disagree.  Plaintiffs here did indeed plead that defendant committed a deliberate act -- the filing of a false affidavit against them -- that led to the seizure of their money.  That's a tort.  Federal court has notice pleading.  You don't have to label your causes of action -- we plead facts, not labels -- so the fact that the complaint doesn't contain a separate "claim" for "state law fraud" doesn't matter. The facts are there.  So the majority's not making up a claim that doesn't exist.

Moreover, though it's doctrinally irrelevant, it sounds like the plaintiffs actually have a pretty good claim in this regard.  Plaintiffs had a lot of money in their carry-on bag.  But that's what professional gamblers do, and the fact that they were in transit from San Juan to Vegas -- and had oodles of proof that they were gamblers -- does indeed suggest that the federal government shouldn't have seized this cash on their stopover in Atlanta.  And it sounds like the agents did indeed leave out tons of stuff in their affidavit that would have established no probable cause to initiate a forfeiture action.  In short, I don't think the majority is stretching at all, either doctrinally or factually, in an attempt to fabricate a claim that doesn't exist.

So Judge Ikuta doesn't think plaintiffs can legitimately make the argument that the majority accepts.  I don't agree.  It seems fairly presented to me.

On the other hand, I disagree with the majority's disposition of this claim.  Judge Berzon (joined by Judge Goodwin) says that there's personal jurisdiction in Nevada -- even though the funds were taken in Georgia -- under the Calder effects test.  That test basically says that if you deliberately engage in a tort directed at the forum state, there's personal jurisdiction there.  Judge Berzon's opinion is very detailed, and goes through the various factors and precedent on this issue pretty exhaustively.  So it's not that I disgree with her mode of analysis, or think she's sloppy.

I just think she gets it wrong.

That's not a huge slam.  The precedent here is confusing and partially contradictory, even at the Supreme Court level.  And Ninth Circuit precdent only makes things worse.  There's no real coherent way to justify these assorted cases, depending as they do so much on both their facts and upon the individual views of the particular judges on the panel.

But I still think Judge Berzon's wrong.  The effects test requires a degree of intentionality and direction that is simply not present here.  The defendant did what he did in Georgia.  When he took the money, he had little idea that the plaintiffs were from Nevada; indeed, they showed him California driver's licenses.  Moreover, when he allegedly filed the false affidavit, sure, at that point he might have had an inkling of the connection of Nevada to the various disputes.  But what he did still wasn't intentionally targeting the forum state in the way the Calder effects test properly requires.  He was justifying the seizure of money that took place in an Atlanta airport by a Georgia citizen.  The fact that he might reasonably anticipate this conduct would have an effect in Nevada is insufficient.

I'm being somewhat skimpy in my analysis because it's a complicated issue, and you could write -- and people have -- entire law review articles on the topic.  But this is a good example of why it's important to have a broad diversity of types of people on the bench; and by "diversity," I mean that in its largest possible sense.  Prosecutors and defense attorneys have unique perspectives, and add value.  So do big- and small-firm lawyers.  Each brings something different to the table.  Even adding a politician or two to the mix might be a good addition.  They know about the workings of the Legislature and the political elements to various things.  And, of course, elevating district and state court judges makes sense too, and you can often double-dip (since these judges obviously had a prior history having been lawyers, having presumably not been born in black robes).

Law school professors add value too.  Think, for example, Judges Bybee and Willie Fletcher.  The good thing about a full-time academic gig is that you get the time and space to really think about complicated issues in depth.  Including but not limited to this one.  The Calder effects test, for example, is something that many civil procedure professors (including me) teach year-after-year to first-year law students.  And when you're teaching or writing about something for decades, not surprisingly, you get to have a little depth in the field.  A depth that's not quite the same as focusing on the topic -- as smart as you (and the underlying lawyers and briefs might be -- for one of your dozen different oral arguments that week.  My own view on this topic has changed (or "evolved") over time.  For the better, hopefully.  With a more sophisticated understanding than perhaps I had at the outset.

Here's also an area where the Ninth Circuit -- and appellate courts in general -- can do some legitimate good.  The Supreme Court's taken only a couple of cases on this topic.  They set general contours, but otherwise aren't especially helpful.  It's up to the Court of Appeals to work out the kinks, and to set the relevant principles.  Often, they do so haphazardly and in case-specific adjudications that simply make a mess.  Both for litigants and for future panels.  That create real transaction costs and that don't coherently establish or apply a set of fundamental principles.  It's not that they always get the wrong result, mind you.  The problem is that they may well get the wrong result, and that even when they get it right, they do so in ways that don't help develop, establish or properly apply the law.

This, in my view, is one of those opinions.  Which is unfortunate.

I think there are coherent ways to interpret the effects test to make sense.  To apply the intentionality requirement in a way that makes purposeful availment -- which is the touchtone of minimum contacts -- meaningful.  That's something the panel here could have done.  Or if they thought that circuit precedent was inherently confusing and self-contradictory (which it somewhat it), to have suggested a set of principles that would rationalize the majority of these cases even if it would require an en banc court to actually adopt.  A way that other circuits might then sign onto -- or would at least be forced to consider -- and that might thus create a consistent national rule or, at a minimum, give the Supreme Court food for thought.

But neither the dissent nor the majority here does that.  Which is too bad.

I taught the effects test to my Civil Procedure I class just last week.  When I started reading this opinion, I was initially very excited.  It looked like it was sufficiently detailed and erudite to perhaps assign as optional reading for my students; to say:  "Here's a pretty good exegisis from the circuit in which you'll likely practice on what the effects test entails."

But I can't.  Not because the majority gets it wrong -- it does, but that's no matter, since students can learn a lot from even erroneous opinions.  Rather, because although the majority accurately sets forth all the various tests and steps that arise from precedent, it doesn't rationalize these cases or make actual sense of the body of law that it applies.  Yes, it says:  "Here are the prior cases, and we think ours is more like X than Y."  But it doesn't make sense of either X or Y, or really grapple with the difficult central issues here.

Which is too bad.  Because particularly in areas that arise in numerous cases and yet rarely are the subject of appeals (e.g., interlocutory personal jurisdiction issues), we could use some clarity.  Clarity which this case had the potential to bring.  But, in the end, the Ninth Circuit's opinion only makes the issue more, rather than less, opaque.

There was, in my mind, no personal jurisdiction over this defendant in Nevada.  The case should be litigated in Georgia.  Defendant didn't "reach out" in the relevant manner to purposefully avail himself of the benefits of Nevada.  He shouldn't be forced to litigate, or even object to (or move for a transfer of) venue.  The Ninth Circuit's holding to the contrary isn't bizarre, but it's not one that advances the ball.  Nor does the dissent.