Tuesday, September 18, 2018

Freestream Aircraft v. Aero Law Group (9th Cir. - Sept. 18, 2018)

It's nice when the Ninth Circuit writes an opinion that explains and cleans up an area that's full of sloppy circuit precedent.  Which is exactly what Judge Nguyen does here.  Different Ninth Circuit opinions have done different things to decide whether there's personal jurisdiction when someone commits a tortious act that has an effect in the forum state.  Some cases have directly found personal jurisdiction whereas some have applied the Calder effects test.  Judge Nguyen's careful opinion goes through these cases and explains -- correctly -- that the right test depends on whether the defendant has engaged in the relevant conduct in the forum state.  If so, the usual "purposeful availment" lines of precedent apply.  If not, the Calder effects test applies.  The Ninth Circuit has previously mixed that up, albeit typically in dicta and/or sloppy language.  This opinion helpfully sets things straight.

With two caveats.

First, a totally minor one.  In the second footnote, Judge Nguyen cites the Supreme Court's recent (2014) opinion in Bauman.  Fair enough.  But the case is now four years old.  It's in the United States Reports; e.g., has a "U.S." citation.  No reason to use the old citation in the Supreme Court Reporter (i.e., the S.Ct. cite).

Second, the substantive one.  As I said, I think that Judge Nguyen is correct on the merits and in how she analyzes and rationalizes prior circuit precedent.  But the discussion in section I.C. of the opinion is a bit off.  There, Judge Nguyen discusses at some length the Ninth Circuit's recent (2017) opinion in Morrill -- an opinion that typifies the use of the effects test even when the defendant engaged in conduct inside the forum state.  But Judge Nguyen says that this opinion doesn't really stand for that proposition because the relevant conduct (filing suit) actually transpired outside the forum state, and hence that the effects test was properly employed there.

Fair enough.  Some of the conduct at issue did indeed occur outside the forum state.

But some of it undeniably occurred inside the forum state.  Making the effects test (under Judge Nguyen's own view) inappropriate.

Judge Nguyen responds by asserting that the actionable conduct nonetheless occurred outside the forum state.  But that's not actually true.  Yes, the filing of the original (allegedly wrongful) action occurred elsewhere.  But the complaint in Morrill definitely sought relief for allegedly abusive and wrongful conduct that transpired inside the forum state; e.g., filing an action to enforce a summons for a (purportedly wrongful) deposition of the other side's lawyers inside the forum state.

Judge Nguyen admits that "at first blush" that might seem to be at odds with her interpretation of circuit precedent, but says it's not really, since the allegedly actionable conduct inside the forum state was "required" (Judge Nguyen's emphasis) by the litigation outside the forum state.  But, as a factual matter, that's just not true.  Nothing in the original litigation required the party there to notice and attempt to take the allegedly wrongful depositions of the other side's lawyers.  That was optional, and outside the state.  They did so.  In that state.  So the right test for that should not be the effects test.  Yet that's what the court applied.  Judge Nguyen's purported description of the case isn't, in my mind, accurate, or consistent with her worldview about what the underlying cases "really" hold.

Moreover, Judge Kleinfeld made exactly the same points that Judge Nguyen is making here in his dissent in Morrill.  Yet the majority disagreed.  It's not particularly persuasive to say that a case really stands for X when the dissent says that X is the law and the majority says otherwise.

It's not that I'm not sympathetic to what Judge Nguyen is doing here.  I am.  There's a bad case, and it makes bad (or at least doctrinally inaccurate) law, so you want to narrow it.  But you're not allowed to say that the case is simply wrong; for that, you need an en banc panel.

So you distinguish it.  Say it actually is founded on X.  Something that's consistent with what you think is actually the law.

The only problem is that it's not actually true.  And you gotta be honest, I think.  Say:  Yeah, in truth, I have no doubt that the panel thought that Y applies, even on Z facts, but actually, they're wrong.  If that means you gotta go en banc, so be it.  Hopefully your fellow Ninth Circuit judges will agree.

Nor do I think it much matters that the (inaccurate) distinction that Judge Nguyen advances is one that the panel itself might well have also (erroneously) advanced.  There are portions of the opinion in Morrill that say, as Judge Nguyen does, that what the party did in Arizona was "required" by the underlying litigation in Arizona.  But, again, that's not true.  What was legally required in Arizona (i.e., asking for a sister state subpoena) was indeed procedurally required, but only if you wanted to engage in the purportedly tortious conduct at issue -- i.e., to set the optional and tortious depositions of the opposing party's lawyer.  Since the other-state litigation didn't require that tort, that's not a distinction.

And you can't rely on a distinction when you're "rationalizing" circuit precedent when that distinction doesn't in fact make sense.  To take an obvious example:  Let's say the prior panel said "Well, yeah, he did something directly in the forum state, but the effects test applies even in those situations if the defendant's last name begins with 'M'."  When you make sense of competing prior circuit precedent to hold (as Judge Nguyen helpfully does here) that the effects test doesn't apply when the defendant did something directly the forum state, you can't then just say "Yeah, there's one case that holds the other way, but in that case, the defendant's last name began with an M."  If the distinction is wrong or does not make doctrinal sense, you can't use it.  Particularly when, as here, the dissent's making the same doctrinal point that you purport to make -- a point that the majority opinion rejects.

So bravo for Judge Nguyen trying to make sense of a jumble.  The opinion's well-written and for the most part right.

But sometimes there's that sole, super pesky case on the other side.  At which point you gotta deal with it on the merits.  Which sometimes requires that you just forthrightly admit that that opinion was wrongly decided.

Whatever consequences that brings.