It was the best of times, it was the worst of times Tuesday morning when the Court heard arguments in Dart Cherokee Basin Operating Co. v. Owens. It was the best of times for the attorneys at Public Citizen who filed an amicus brief in support of the respondent (class-action plaintiffs) seeking to preserve the plaintiff’s victory in the court of appeals by pointing out a hitherto-unnoticed jurisdictional flaw in the petition. It was the worst of times for the law clerk from the previous Term who wrote a pool memo without noticing that defect.
This is another in a continuing series of cases the Court has been hearing under the Class Action Fairness Act (the “CAFA”), which allows defendants to remove class actions to federal courts if they involve at least 100 putative class members and at least $5 million in controversy. In this particular case, the defendants, removing the case, stated in their notice that the amount in controversy exceeded $5 million. Having attended law school, however, they did not attach evidence to the complaint, but only provided a “short and plain” allegation of the amount in controversy. Although it seems to be undisputed that the amount in controversy in fact exceeds $5 million, the district court nevertheless dismissed the case to state court, reasoning that Tenth Circuit precedent requires that the evidence establishing the amount in controversy be attached to the notice of removal.
Ordinarily, however bizarre the ruling, that would be the end of the matter, because decisions to remand cases to state court are not appealable. But Congress, ever solicitous in protecting class-action defendants from state courts, added to the Class Action Fairness Act a special rule providing that “a court of appeals may accept an appeal from an order granting” a motion to remand a CAFA case to state court. The defendants asked for such an appeal, but the Tenth Circuit declined to accept it and the Supreme Court granted review, presumably motivated by the unprecedented pleading requirement reflected in the district court’s decision.
The parties briefed the matter on the merits, but Public Citizen took a different tactic, seeking to avoid the question presented, on which the class-action plaintiffs seemed to have little chance of prevailing. Specifically, Public Citizen filed an amicus brief arguing that the remand issue was not properly before the Court, and pointing out what previously had gone unnoticed – that the case was never “in” the court of appeals as a technical matter, because it did not accept the appeal. And if the only matter “in” the court of appeals was a request for an appeal, then the only thing the Court should be reviewing was the decision not to accept the appeal.
That might sound like a technicality, but from the opening moments of the argument it was plain that the Justices took it seriously. Discussion of the jurisdictional point consumed every second of the defendants’ argument after his opening sentences. And with the exception of Justice Thomas, each of the Justices at one point or another suggested that Public Citizen’s argument had persuaded them that the only question properly before the Court was the propriety of the Tenth Circuit’s decision not to accept the appeal. Indeed, Justice Ginsburg went so far as to call out Public Citizen by name as the source of the point!
So, for example, Justice Scalia repeatedly admonished Nowell Berreth (arguing for Dart, the class-action defendant) that “[y]our job is to argue that that was an abuse of discretion, . . . right? . . . Is it always an abuse of discretion for the court of appeals to let an erroneous decision stand,” and Justice Kagan weighed in that an “abuse of discretion standard would go to . . . the decision to take it.”
Several of the Justices were taken with the analogy to the Court’s authority to deny cert. petitions. Thus, at one point, Justice Scalia explained with uncharacteristic humility:
It seems to me the statute gives the power to the court of appeals. It says the court of appeals may decline to take it. We can’t override their judgment not to take it unless there is something unlawful about that judgment. You give us too much credit, you know, we don’t have total power to make decisions the courts of appeals are supposed to make.
In the same vein, Justice Kagan commented, “we know from everything we do every day that when a court decides to take something or not to take something, they are not just making a merits evaluation. They are doing a thousand other things as well about how they think it’s best to arrange their docket.” Sticking with the point, Justice Scalia (perhaps thinking of the Court’s order list of the previous day) then quipped: “I guess it’s an abuse of discretion whenever we fail to correct a clear error of law on a petition for certiorari. Right? And I’m not going to mention any names, but is that the case? It’s an abuse of discretion? I thought we just had the power to say we don’t feel like taking it.”
Justice Ginsburg seized on a different analogy, a certificate of appealability (in collateral review of habeas corpus cases). In that situation, “the only thing that you can review is the certificate of appealability. You can’t use that handle to get to the merits. So the only question is whether the certificate was improperly denied and not the merits.” When Berreth tried to argue that the merits nevertheless were before the Court, Justice Kennedy flatly stated that his point was “contrary to” the existing precedent, “as Justice Ginsburg has just indicated.”
The basic problem that the Justices face is that the Tenth Circuit did not explain its decision not to accept the appeal. That of course is understandable; presumably courts of appeals explain their decisions not to accept appeals about as often as the Justices explain their decisions to deny review by certiorari. So the Justices can’t easily insist that the courts of appeals explain each decision not to accept an appeal. But in the absence of any explanation, it is all but impossible for the Court to understand (and thus review) the reason that the court of appeals has refused the appeal.
The problem with simply dismissing review on the procedural ground is that several (if not most) of the Justices plainly think that the decision was incorrect, which makes them reluctant, now that the case has been briefed and argued, to let it go without providing some indication of that perspective. The most likely course out of the conundrum became clear in an extraordinary exchange between Justice Kagan and the Chief Justice late in Berreth’s argument. She started by explaining to Berreth that she “sympathize[s]” with him, and that “the next half-hour is going to reveal that, actually, most of us agree with you on the merits.” When Justice Alito commented that her comment “may be a little premature,” she continued: “All right, I will limit it. I agree with you on the merits. . . . But I just don’t see how to get around this.”
She then suggested that the Court dismiss the writ of certiorari because the Court has no way of knowing the basis of the decision below. Offering from the bench a first draft of an opinion dismissing the writ, she suggested that the opinion might also mention in the order of dismissal that “if and to the extent that the Tenth Circuit wants in the next case to make a decision on the merits, . . . it should say so, so as not to insulate that decision from review. That seems like a fair thing to say to the Tenth Circuit. Don’t insulate your merits decision from review. But it also seems to . . . reflect what is true about this case, which is that we don’t know whether it made a merits decision.” When the Chief Justice asked her if it was “appropriate for this Court to dismiss certiorari and then opine on the merits of the case,” she emphasized that she didn’t contemplate an opinion on the merits, but simply a suggestion that the Tenth Circuit explain itself in the next similar case.
After that comment, the second half of the argument was wholly anticlimactic. The Justices consumed almost all of the argument of Rex Sharp (arguing on behalf of the class-action plaintiffs), debating whether the Court had no authority at all to review a decision to decline an appeal or instead some limited authority to review a decision to decline an appeal if it is plain that the decision rested on an impermissible reason.
When Sharp suggested that the Court was wholly barred from review, Justice Alito thought he had gone too far: “So what if the court of appeals says, we are not taking this because we just don’t like the Class Action Fairness Act. We think it’s bad public policy; we are never going to take one of these. That’s okay?” Eventually, after extended colloquy, it became clear that the Justices, if not Sharp, were settled on the view that the Court could review such an order in the kinds of narrow circumstances Justice Alito suggested.
So this is a case in which we can expect a ruling sometime in the next few weeks. Presumably it is just an unfortunate coincidence that a dismissal of the petition in Dart would mean that the Court had lost two cases from its October session despite adoption last year of the “wait-another-week” before granting policy. The dismissal in Indy Mac was based on a settlement and so could not have been prevented. But Dart Cherokee is different. The problem, albeit obscure, is one that somebody could (and should) have noticed – after all, the lawyers at Public Citizen found it!
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