E.D. Mich. Notes Split re Constitutionality of Use of a Criminal Defendant's Post-Arrest, Pre-Miranda Silence as Substantive Evidence

Per McNally v. Lafler, Slip Copy, 2006 WL 156322 (E.D. Mich. Jan. 20, 2006):

In the present case, the United States Supreme Court has not spoken dispositively on the issue of whether the use of a criminal defendant's post-arrest, pre-Miranda silence as substantive evidence violates the Fifth or Fourteenth Amendments. In fact, there appears to be a split in the circuits on this issue. A number of circuits have held that it is permissible for a prosecutor to use a criminal defendant's silence after he or she is arrested, but before Miranda warnings have been given, as substantive evidence. See United States v. Frazier, 408 F.3d 1102, 1111 (8th Cir.2005) (holding that when no governmental action induced post-arrest, pre- Miranda silence, it could be introduced as evidence of guilt); United States v. Rivera, 944 F.2d 1563, 1568 (11th Cir.1991) (prosecution may comment on a defendant's post-arrest silence prior to Miranda warnings being given); United States v. Love, 767 F.2d 1052, 1063 (4th Cir.1985)(same); Compare United States v. Moore, 104 F.3d 377, 385 (D.C.Cir.1997)(introduction of defendant's pre- Miranda custodial silence violates the Fifth Amendment); United States v. Whitehead 200 F.3d 634, 638 (9th Cir.2000)(same).


First Circuit Discusses Split re Recognition of Citizenship of Power of Attorney Holder for Diversity Purposes

Per PRAMCO, LLC, ON BEHALF OF CFSC CONSORTIUM, LLC, Plaintiff, Appellant, v. SAN JUAN, --- F.3d ----, 2006 WL 133977 (1st Cir. Jan 19, 2006):

In its Rule 26.1 disclosure statement filed on appeal, Pramco stated that it has two members and CFSC has three. According to the complaint, Pramco held a power of attorney to collect loans purchased by CFSC. The record, however, does not disclose the citizenship of the members of either Pramco or CFSC. It also does not fully disclose the nature of the arrangement between CFSC and Pramco, which could be relevant to a decision as to whose citizenship-the members of CFSC or the members of Pramco-should be considered in the diversity calculus.

In addition, there may be a circuit split on the issue of whether the sort of arrangement entered into here-whether it involved an assignment of the debt itself or merely the granting of a power of attorney to litigate the case-would suffice to make Pramco, rather than CFSC, the party whose citizenship matters for diversity purposes. Some circuits have held that "the citizenship of an agent who merely sues on behalf of the real parties must be ignored" for diversity purposes. Associated Ins. Mgmt. Corp. v. Ark. Gen. Agency, Inc., 149 F.3d 794, 796 (8th Cir.1998); see also Airlines Reporting Corp. v. S & N Travel, Inc., 58 F.3d 857, 862 (2d Cir.1995). In the Second Circuit, for example, the court asks whether the named plaintiff is more than "a mere conduit for a remedy owing to others, advancing no specific interests of its own." Airlines Reporting Corp., 58 F.3d at 862.

The Third Circuit, by contrast, has adopted a rule that accepts the citizenship of the named plaintiff as the relevant citizenship for diversity jurisdiction purposes in any case where that plaintiff has "capacity to sue" under state law. See Fallat v. Gouran, 220 F.2d 325, 236-27 (3d Cir.1955); see also 6A Charles Alan Wright et al., Federal Practice and Procedure: Civil 2d § 1556, at 426-28 (1990). It subsequently qualified its rule by holding that any attempt to "manufacture" diversity jurisdiction, by appointing a representative "solely to create diversity jurisdiction," offends 28 U.S.C. § 1359 (2000) and so is ineffective to create federal jurisdiction. See McSparran v. Weist, 402 F.2d 867, 875-76 (3d Cir.1968); cf. Pallazola v. Rucker, 797 F.2d 1116, 1126-27 (1st Cir.1986). Yet even with this qualification, one could still see how the Third Circuit's approach could result in contrary results in cases such as Airlines Reporting Corp.Because we cannot on this record determine whether complete diversity exists, we remand to the district court. The district court shall determine whether all of Pramco's and CFSC's members are diverse from San Juan, in which case diversity exists; if either Pramco or CFSC has members who are not diverse, the court must determine whether the nondiverse party's citizenship matters for jurisdictional purposes; to that end, the court will need to make appropriate findings of fact concerning the relationship of Pramco and CFSC and entertain briefs from the parties. So far as we can tell, the problem is a matter of first impression in this circuit.


M.D. Fla. on Split Re Owner Liability for Unseaworthiness Claim by Third Party

Per Lovette v. HAPPY HOOKER II, Slip Copy, 2006 WL 66722 (M.D. Fla. Jan. 11, 2006):

Defendants Plath and Salt Water Adventures contend that the Vessel Lease Agreement between Salt Water Adventures and Wicburg constitutes a bareboat charter, that the vessel was delivered to Wicburg in seaworthy condition, and that therefore as a matter of law the vessel owner Salt Water Adventures cannot be held liable for the unseaworthiness claim. Lovette responds that neither the express terms of the Vessel Lease Agreement nor the actions of the chartering parties show that the parties entered into a bareboat charter. Lovette further argues that the vessel owner remains liable for the vessel's unseaworthiness even if there is a bareboat charter.

The issue of whether an owner who delivers a vessel in seaworthy condition to a charterer pursuant to a bareboat charter is liable for an unseaworthiness claim by a third party has split the circuits. The Fifth Circuit stated: “A bareboat or demise charter (hereinafter called a bareboat charter), whereby the charter assumes ‘full possession and control of the vessel,”··· constitutes the only form of charter that purports to invest temporary powers of ownership in the charterer and, therefore, constitutes the only conceivable basis on which the vessel owner could seek to escape liability for the unseaworthiness of his vessel.” Baker v. Raymond Int'l, Inc., 656 F.2d 173, 181-82 (5th Cir.1981)(internal citations omitted). However, the Fifth Circuit in Baker found that, even in the case of a bareboat charter, the owner remains liable for the unseaworthiness condition at the time of the charter. See id. Contrary to the Fifth Circuit, other circuits have found that a demise charterer is the liable party for the unseaworthiness condition of the vessel, and the vessel owner is absolved from such liability. See Matute v. Lloyd Berm. Lines, Ltd., 931 F.2d 231, 235 n. 2 (3d Cir.1991), overruled on other grounds, Neely v. Club Med Mgmt. Servs., 63 F.3d 166, 178 (3d Cir.1995); see also McAleer v. Smith, 57 F.3d 109, 112 (1st Cir.1995). This issue remains unresolved in the Eleventh Circuit. The Court finds it unnecessary to resolve this legal issue because there are material issues of disputed facts as to whether a bareboat charter existed in this case.


Tenth Circuit Declines to Weigh in on Split Re Impact of 1991 amendments to § 1981

Per the Tenth Circuit in Maldonado v. City of Altus, --- F.3d ----, 2006 WL 52805 (10th Cir. Jan. 11, 2006):

In Burns v. Bd. of County Comm'rs, 330 F.3d 1275, 1288 n. 10 (10th Cir.2003), we recognized a circuit split over whether the 1991 amendments to § 1981 overruled Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701, 733, 109 S.Ct. 2702, 105 L.Ed.2d 598 (1989), which held that “the express cause of action for damages created by § 1983 constitutes the exclusive federal remedy for violation of the rights guaranteed in § 1981 by state governmental units.” Burns did not resolve the issue for this circuit, nor will we. Because we affirm qualified immunity for the individual defendants on the § 1981 and § 1983 claims and because the City did not raise this argument, we do not address this issue.


N.D. Ind. Discusses Split Re Availability of Employment Discrimination Claim against a Governmental Entity under Title II of the ADA

Per the district court in Brettler v. Purdue University, --- F.Supp.2d ----, 2006 WL 52755 (N.D. Ind. Jan. 10, 2006):

The Federal Courts of Appeals are divided as to whether a claim for employment discrimination against a governmental entity is authorized under Title II, in light of the express establishment of a cause of action for disability discrimination in employment against such entities under Title I. Compare Bledsoe v. Palm Beach County Soil & Water Conservation Dist., 133 F.3d 816, 820 (11th Cir.) (holding that Title II covers employment discrimination), cert. denied525 U.S. 826, 119 S.Ct. 72, 142 L.Ed.2d 57 (1998),FN5 with Zimmerman v. Oregon Dep't of Justice, 170 F.3d 1169, 1173 (9th Cir.1999) (holding that a public employee cannot bring a claim of employment discrimination under Title II).FN6 See also Garrett, 531 U.S. at 360 n. 1 (recognizing the split between Bledsoe and Zimmerman and declining to address the issue of “whether Title II of the ADA, dealing with the ‘services, programs, or activities of a public entity,’ 42 U.S.C. § 12132, is available for claims of employment discrimination when Title I of the ADA expressly deals with that subject”).The Seventh Circuit has not addressed this issue but has acknowledged the split in authority among the circuits. See Staats v. County of Sawyer, 220 F.3d 511, 518 (7th Cir.2000).FN7 District courts within the Seventh Circuit are also divided on this issue. Compare Silk v. City of Chi., No. 95 C 0143, 1996 WL 312074, *12 (N.D.Ill. June 7, 1996) (holding that Title II applies to claims of employment discrimination primarily based on the regulations promulgated by the Attorney General, specifically 28 C.F .R. § 35.140); Dertz v. City of Chi., 912 F.Supp. 319, 323-24, 325 (N.D.Ill.1995) (applying Title II to an employment claim brought against a public entity for denial of disability benefits, finding that disability benefits are a “program” under Title II); Doe v. County of Milwaukee, 871 F.Supp. 1072, 1074-75 (E.D.Wis.1995) (relying on 28 C.F.R. § 35.140 to find that Title II applies to employment); and Petersen v. University of Wis. Bd. of Regents, 818 F.Supp. 1276, 1278 (W.D.Wis.1993) (declining to find that Title II does not apply to employment discrimination because the defendant did not clearly address the issue and based on the absence of any language prohibiting such a claim and on the Department of Justice regulation found at 28 C.F.R. § 35.140 referencing employment discrimination), with Clark v. City of Chi., No. 97 C 4820, 2000 WL 875422, *6 (N.D.Ill. June 28, 2000) (holding that Title II does not cover claims of employment discrimination against a public employer); and Patterson v. Illinois Dep't of Corr., 35 F.Supp.2d 1103, 1109-10 (C.D.Ill.1999) (same).


Eleventh Circuit Notes Split Re Burden of Proof re Whether Contractual Jury Waiver Was Knowing & Voluntary

Per the Eleventh Circuit in Bakrac, Inc. v. Villager Franchise Systems, Inc., Slip Copy, 2006 WL 41282 (11th Cir. Jan. 06, 2006):

The circuits are split as to which party has the burden of proving whether a contractual jury trial waiver, such as the one here, was knowing and voluntary. See Pierce v. Atchison Topeka & Santa Fe Ry. Co., 110 F.3d 431, 435 n. 4 (7th Cir.1997) (collecting cases). Although this Circuit has not ruled on the matter, the district court put the burden on VFS. The district court's approach is consistent with the approach used in Luis Acosta, Inc. v. Citibank, N.A., 920 F.Supp. 15, 18 (D.P.R.1996) (party seeking to enforce the waiver bears the burden). We need not determine whether this is the correct approach. VFS prevails regardless of who has the burden.

D.N.D. Weighs in on Circuit Split re Burden of Proof on Remand under CAFA

The court in Ongstad v. Piper Jaffray & Co., --- F.Supp.2d ----, 2006 WL 14399 (D.N.D. Jan. 04, 2006), has rejected an argument that CAFA shifts the burden of proof on a motion to remand to the plaintiff. Here is an extended exerpt from the case that discusses this issue:

Following removal of a case to federal court, a plaintiff can seek remand of the action back to state court. See28 U.S.C. 1447(c). Removal statutes are strictly construed in favor of state court jurisdiction and federal district courts must resolve all doubts concerning removal in favor of remand. The removing party bears the burden of showing that removal was proper. Although CAFA does not address the issue, courts are currently split on whether the new Class Action Fairness Act of 2005 shifts that burden of proof to the party seeking remand.

Several courts have held that CAFA shifts the burden to the party seeking remand. See Harvey v. Blockbuster, Inc., 384 F.Supp.2d 749, 752 (D.N.J.2005); In re Textainer Partnership Sec. Litigation, No. C 05-0969 MMC, 2005 WL 1791559, *3 (N.D.Cal. Jul.27, 2005); Waitt v. Merck & Co., Inc., No. C05-0759L, 2005 WL 1799740, *2 (W.D.Wash. Jul.27, 2005); Yeroushalmi v. Blockbuster, Inc., No. CV 05-225-AHM(RCX), 2005 WL 2083008, *3 (C.D.Cal. Jul. 11, 2005); Berry v. Am. Express Pub., Corp., 381 F.Supp.2d 1118, 1122-23 (C.D.Cal.2005). In doing so, most point to the legislative history of CAFA. An oft-quoted Senate Judiciary Committee report reads, in relevant part, as follows: “If a purported class action is removed pursuant to these jurisdictional provisions, the named plaintiff(s) should bear the burden of demonstrating that the removal was improvident (i.e., that the applicable jurisdictional requirements are not satisfied).” S. Rep. 14, 109th Cong. 1st Sess. 42 (2005). Under such a framework, the plaintiff would bear the burden of establishing the lack of federal jurisdiction. Conversely, other courts have held that CAFA does nothing to alter the traditional rule of law that the party opposing remand bears the burden of establishing federal jurisdiction. See Plummer v. Farmers Group, Inc., 388 F.Supp.2d 1310, 1317-18 (E.D.Okla.2005); Judy v. Pfizer, Inc., No. 4:05CV1208RWS, 2005 WL 2240088, *2 (E.D.Mo. Sep.14, 2005); Schwartz v. Comcast, Corp., No. Civ .A. 05-2340, 2005 WL 1799414, *4 (E.D.Pa. Jul.28, 2005); In re Expedia Hotel Taxes and Fees Litigation, 377 F.Supp.2d 904, 905 (W.D.Wash.2005); Sneddon v. Hotwire, Inc., No. C 05-0951 SI, C 05-0952 SI, C 05-0953 SI, 2005 WL 1593593, *1 (N.D.Cal. Jun.29, 2005). Most notably, the Seventh Circuit has so concluded. See Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir.2005).

The United States Supreme Court and the Eighth Circuit Court of Appeals have not yet addressed this issue. Despite the absence of binding precedent, Piper Jaffray urges the Court to adopt the burden-shifting approach requiring the Plaintiffs to establish federal court jurisdiction. Piper Jaffray points to the legislative history of CAFA, as well as the trend of bringing securities-related litigation within federal jurisdiction.As it stands, the removing party bears the burden of establishing federal jurisdiction. See In re Business Men's Assur. Co. of America, 992 F.2d 181, 183 (8th Cir.1993). The express language of CAFA does nothing to disrupt that maxim, nor should its legislative history. A recent decision out of the Eastern District of Missouri accurately summarizes the reason that is so.[A]lthough the CAFA is silent about the burden of proof in cases removed under the Act, a Committee Report, S.Rep. No. 109-14, at 44 (2005), contemplates the shifting of the burden to the plaintiff seeking remand. See Berry v. American Express Pub., Corp. ., 2005 WL 1941151, *3 (C.D.Cal. June 15, 2005).

At the time of the enactment of the CAFA, Congress was presumed to be aware of the well settled case law regarding the burden of proof in removed actions. Contract Freighters, Inc. v. Secretary of U.S. Dept. of Transp., 260 F.3d 858, 861 (8th Cir.2001) (Congress is presumed to know the legal background in which it is legislating). A court may resort to legislative history to interpret a statute when it contains an ambiguity. Absent some ambiguity in the statute, there is no occasion to look to legislative history. Neosho R-V School Dist. v. Clark, 315 F.3d 1022, 1032 (8th Cir.2003). The omission of a burden of proof standard in the CAFA does not create an ambiguity inviting courts to scour its legislative history to decide the point. By failing to specifically address the burden of proof in the Act, especially in light of discussing the issue in a Committee Report, Congress is deemed to have not intended to change the settled case law on that issue. Had Congress wished to change which party bears the burden of proof in a removal action under the CAFA it could have explicitly done so.Judy v. Pfizer, Inc., No. 4:05CV1208RWS, 2005 WL 2240088, *1-2 (E.D.Mo. Sep.14, 2005). The Seventh Circuit also endorsed such an approach.

Countrywide maintains that the Class Action Fairness Act reassigns that burden to the proponent of remand. It does not rely on any of the Act's language, for none is even arguably relevant. Instead it points to this language in the report of the Senate Judiciary Committee: “If a purported class action is removed pursuant to these jurisdictional provisions, the named plaintiff(s) should bear the burden of demonstrating that the removal was improvident (i.e., that the applicable jurisdictional provisions are not satisfied).” S. Rep. 14 109th Cong. 1st Sess. 42 (2005). This passage does not concern any text in the bill that eventually became law. When a law sensibly could be read in multiple ways, legislative history may help a court understand which of these received the political branches' imprimatur. But when the legislative history stands by itself, as a naked expression of “intent” unconnected to any enacted text, it has no more force than a poll of legislators less, really, as it speaks for fewer. Thirteen Senators signed this report and five voted not to send the proposal to floor. Another 82 Senators did not express themselves on the question; likewise 435 Members of the House and one President kept their silence.We recognized that a dozen or so district judges have treated this passage as equivalent to a statute and reassigned the risk of non-persuasion accordingly. See e.g., Berry v. American Express Publishing, Corp., 381 F.Supp.2d 1118 (C.D.Cal.2005); Natale v. Pfizer, Inc., 379 F.Supp.2d 161 (D.Mass.2005), affirmed on other grounds, 424 F.3d 43 (C.A.1 (Mass.) 2005). But naked legislative history has no legal effect, as the Supreme Court held in Pierce v. Underwood, 487 U.S. 552, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988). A Committee of Congress attempted to alter an established legal rule by a forceful declaration in a report; the Justices concluded, however, that because the declaration did not correspond to any new statutory language that would change the rule, it was ineffectual. Just so here. The rule that the proponent of federal jurisdiction bears the risk of non-persuasion has been around for a long time. To change such a rule, Congress must enact a statute with the President's signature (or by a two-thirds majority to override a veto). A declaration by 13 Senators will not serve.

This Court is persuaded by the holdings in Judy and Brill. The Court will decline Piper Jaffray's invitation to break from the well-established rule of law that the removing party bears the burden of establishing federal subject-matter jurisdiction. There is simply nothing in CAFA that contemplates such a change.


Third Circuit Speaks on Split re Ripening of Premature Appeals

Per the Third Circuit in Adapt of Philadelphia v. Philadelphia Housing Authority,--- F.3d ----, 2006 WL 39071 (3d Cir. Jan. 09, 2006):

Our decision in Cape May Greene, Inc. v. Warren, 698 F.2d 179 (3d Cir.1983), provides the analytical point of departure for examining the appealability of the six instant appeals. In Cape May Greene, this court held that a premature notice of appeal, filed after disposition of some of the claims before a district court, but before entry of final judgment, will ripen upon the court's disposal of the remaining claims. See id. at 184-85. There, the district court granted summary judgment against the plaintiff and in favor of the defendants. The plaintiff thereupon filed a notice of appeal from the district court's order granting summary judgment. However, the defendants had filed a cross-claim, which had not been adjudicated at the time the notice of appeal was filed. As a result, the judgment of the district court was not final. SeeFed.R.Civ.P. 54(b). This court upheld its jurisdiction to review the grant of summary judgment against the plaintiff. It did so because the cross-claim, although not disposed of before the notice of appeal was filed, was adjudicated after the notice of appeal was filed, thereby achieving finality as to all claims. Id. at 184.

The so-called Cape May Greene rule-and its expansive view of appellate jurisdiction-has been reaffirmed by this court on multiple occasions. Some courts of appeals, however, have not adhered to such a rule. See, e.g., United States v. Hansen, 795 F.2d 35, 37-38 (7th Cir.1986) (discussing circuit split on the issue and rejecting Cape May Greene rule). Still other courts of appeals that have followed a rule similar to Cape May Greene have restricted finality in premature cases in light of the Supreme Court's decision in FirsTier, which, as discussed below, called into question broader understandings of when premature appeals may ripen upon entry of final judgment. See Outlaw v. Airtech Air Conditioning and Heating, Inc., 412 F.3d 156, 160 (D.C.Cir.2005) (“We agree with decisions concluding that those prior lines of precedent must be limited in light of FirsTier.” ); United States v. Cooper, 135 F.3d 960, 963 (5th Cir.1998) (“[W]e recognize that in light of FirsTier, this expansive view of appellate jurisdiction cannot survive”); Serine v. Peterson, 989 F.2d 371, 372 (9th Cir.1993).

But while other jurisdictions have narrowed their holdings involving premature appeals in light of FirsTier, we have declined thus far to do the same, holding that the Cape May Greene rule has not been overruled by FirsTier. See Lazy Oil, 166 F.3d at 587.

SCOTUS Denies Review in Case to Resolve Split Re Standard of Review over Arbitration Award

The High Court yesterday denied review in Metromedia Energy Inc. v. Enserch Energy Services Inc., where the question presented was as follows: Should court grant certiorari to resolve conflict of authority among courts of appeals over standard of review applicable to arbitration award when party claims that arbitration panel exceeded its authority by straying beyond scope of parties' arbitration agreement and their submission of issues for arbitration?

BNA summarizes the ruling below as follows: "Courts confronted with allegation that arbitrator exceeded his authority by resolving issue beyond scope of arbitration agreement, or by resolving issue that parties did not intend to submit to arbitration, will review arbitrator's assessment of scope of his authority under highly deferential standard, focusing on record as whole in determining whether arbitrator manifestly exceeded his authority in interpreting scope of parties' submissions; when such allegation is based on language of written opinion in support of arbitration panel's award, reviewing court should presume that arbitrator acted within scope of his authority, and such presumption may not be rebutted by ambiguity in written opinion, but court may conclude that arbitrator exceeded his authority when it is obvious from written opinion."

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