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IX

'85

SOUTH TEXAs LAw REVIEW WINTER

2014

VOL. 56

No. 2

ARTICLES CHALLENGING CLASS CERTIFICATION AT THE PLEADING STAGE: WHAT RULE SHOULD GOVERN AND WHAT STANDARD

SHOULD APPLY? . . . . . . . . . . . . . . . . . . . . . . . . . .

To

Timothy A. Daniels 241

QUOTE OR NOT TO QUOTE:

MAKING THE CASE FOR TEACHING LAw STUDENTS THE ART OF EFFECTIVE QUOTATION IN LEGAL MEMORANDA .......

Maureen Johnson 283

LAw FIRM COPYING AND FAIR USE:

AN

EXAMINATION OF DIFFERENT

PURPOSE AND FAIR USE MARKETS

................

D.R. Jones 313

COMMENTS WHEN PRODUCTS SELF-DESTRUCT: MAKING THE CASE FOR THE PRODUCT-LESS PLAINTIFF USING RES IPSA LOQUITUR, THE MALFUNCTION DOCTRINE, AND §

FCPA

3 ..........

Ashley Menage 349

ENFORCEMENT AND THE NEED

FOR JUDICIAL INTERVENTION ..................

Sonila Themeli

387

THE LUCK OF THE DRAW: INCONSISTENCIES OF BLOOD DRAWS IN DWI INVESTIGATIONS, AND THE SMALL ODDS MISSOURI V. MCNEELY RESOLVED THE CONFLICT......................Kendall

xi

Valenti 423

CHALLENGING CLASS CERTIFICATION AT THE PLEADING STAGE: WHAT RULE SHOULD GOVERN AND WHAT STANDARD SHOULD APPLY? TIMOTHY I. II.

A.

DANIELS*

242 INTRODUCTION ...............................................

CURRENT APPROACHES TO CHALLENGES TO CLASS .............. 245 CERTIFICATION AT THE PLEADING STAGE ......

A. B. C. D. E. F. G. H. I. J. K. III.

First Circuit .......................................

246 Second Circuit......................... ....... 247 Third Circuit ............................ ..... 248 Fourth Circuit ........................... ..... 250 Fifth Circuit .......................................

252 Sixth Circuit ........................................

254 Seventh Circuit ....................... ............ 255 Eighth Circuit ....................................

256 Ninth Circuit ............................ ..... 258 Tenth Circuit ........................................

260 Eleventh Circuit..........................................261 RULE 23 SHOULD GOVERN ALL DECISIONS REGARDING CLASS CERTIFICATION.

...........................................

Rule 12 Is Not an AppropriateProceduralDevice to Challenge Class Certification ......................

1. Rule 12() Should Not Be Used to Challenge Class Allegations. ................................

2. Rule 12(b)(6) Has Only Limited Applicability in Challenging Class Allegations...................

B. Class-CertificationDecisionsShould Be Decided Exclusively Under Rule 23........... ................

C. Appropriate Standardto Determine a Defendant's Motion to Deny Class Certification...........................

1. What Is Being Decided Under Rule 23 .............................

262

A.

263 263 265 269 271 271

* Partner with the law firm of Figari & Davenport, LLP in Dallas, Texas. I would like to thank my colleagues who provided invaluable input and advice, in particular my partners Don Colleluori and Amanda Sotak, as well as Carol Cooper, retired from General Motors' legal department, who took the time to provide their unvarnished thoughts and opinions throughout the drafting process. The ultimate conclusions herein are my own, but were shaped and sharpened by Carol, Don, and Amanda.

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2. AppropriateStandard Under Rule 23......... ....... ..... ..................

3. Application of Standard a. The District Court Should Not Be Limited to the Facts Alleged in the Complaint .......... ..... b. The District Court Should Consider Other Decisions Addressing Class Certification ..................

IV.

CONCLUSION

..................................................

I.

273 275 275 279 281

INTRODUCTION

It has become increasingly common in class cases pending in federal court for defendants to challenge class certification at the pleading stage by arguing that the proposed class fails one or more of the explicit or implicit requirements of Federal Rule of Civil Procedure 23.1 The practice appears to be related to developments in several areas of the law and is bolstered by early class decisions holding that in some cases very limited or no discovery is needed to decide the certification issue. First, federal courts have progressively tightened the standards for determining whether a case can be properly certified as a class action. 2 The most recent examples from the Supreme Court are Wal-Mart v. Dukes3 and Comcast v. Behrend.4 Second, the Class Action Fairness Act (CAFA) liberalized the requirements for federal court diversity jurisdiction over class actions, and correspondingly the requirements for the removal of such cases to federal court.5 Defendants and plaintiffs have taken advantage of CAFA, and

1. See, e.g., John v. Nat'1 Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007); Simer v. Rios, 661 F.2d 655, 669 (7th Cir. 1981). This Article catalogs numerous recent cases where a defendant challenged class certification at the pleading stage. See infra Part II; see also Thomas Kayes, An Ounce of Prevention: Early Motions Attaching Class Certification, 80 DEF. COUNS. J. 164 (Apr. 2013); Charlotte E. Thomas, Trending in 3rd Circ.: Motions to Strike Class Allegations, LAW360 (Dec. 22, 2014, 11:24 AM ET), http://www.1aw360.com/articles/605802/trending-in-3rdcirc-motions-to-strike-class-allegations. In this Article, "explicit" refers to the certification requirements set out in Rule 23(a) and (b), and "implicit" refers to certification requirements courts have inferred, such as the necessity of an ascertainable class. In re Yasmin & Yaz Mktg., Case Nos. 3:09-cv-20001-DRH-PMF, 3:09-md-02100-DRH-PMF, MDL No. 2100, 2012 U.S. Dist. LEXIS 33183, at *57 (S.D. Ill. Mar. 13, 2012) ("[A]lthough Rule 23 is silent on the matter, it implicitly requires that the plaintiff establish the existence of a definable class." (emphasis omitted)).

2. See, e.g., In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 308-09 (3d Cir. 2008); Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 675-76 (7th Cir. 2001); Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1005-06 (11th Cir. 1997); Castano v. Am. Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996).

3.

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2550-51 (2011).

4. Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1433 (2013).

5. See 28 U.S.C. § 1332(d)(2) (2012). See generally Steven M. Puiszis, Developing Trends with the Class Action Fairness Act of 2005, 40 J. MARSHALL L. REV. 115, 147 (2006) (providing more analysis of CAFA's expansion of federal jurisdiction); Stephen J. Shapiro,

2014]

CHALLENGING CLASS CERTIFICA TION

243

federal courts now hear more diversity class cases. 6 Third, the Supreme Court imposed stricter pleading requirements in Bell Atlantic v. Twombly' and Ashcroft v. Iqbal.8 Several early class decisions held that certification could, in the right circumstances, be denied with little or no discovery. 9 For example, in the 1975 case Kamm v. California City Development Corp., the Ninth Circuit held that whether discovery should be permitted in connection with a motion for class certification "lies within the sound discretion of the trial court," and that the district court did not abuse its discretion in granting a motion to strike class allegations without allowing discovery.' 0 In 1982, the court in Stewart v. Winter held that in at least some situations "the decision on certification of the class action can properly be made upon the

Applying the JurisdictionalProvisions of the Class Action FairnessAct of 2005: In Search of a Sensible JudicialApproach, 59 BAYLOR L. REV. 77 (2007) (providing similar analysis).

6.

See Emery G. Lee III & Thomas E. Willging, The Impact of the Class Action Fairness Act on the Federal Courts: An Empirical Analysis of Filings and Removals, 156 U. PA. L. REV. 1723, 1734 (2008); EMERY G. LEE Ill & THOMAS E. WILLGING, THE IMPACT OF THE CLASS ACTION FAIRNESS ACT OF 2005 ON THE FEDERAL COURTS: FOURTH INTERIM REPORT TO THE JUDICIAL CONFERENCE ADVISORY COMMITTEE ON CIVIL RULES 1 (2008), available at

https://bulk.resource.org/courts.gov/fjc/cafa04O8.pdf (reporting filing and removal data through June 30, 2007, and finding both removals and original filings of diversity jurisdiction class cases increased after enactment of CAFA).

7.

Bell AtI. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

8.

Ashcroft v. lqbal, 556 U.S. 662, 678-79 (2009). Prior to Twombly and Iqbal, the standard was "that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957), overruled in part by Bell AtI. Corp. v. Twombly, 550 U.S. 544 (2007), and abrogatedin part by Ashcroft v. Iqbal, 556 U.S. 662 (2009). Twombly rejected this formulation, and instead held that a complaint's allegations must support a "plausible," not merely a "conceivable," inference rising above a "speculative level" that facts exist to support the claim. Twombly, 550 U.S. at 555, 570. In Iqbal, the Supreme Court made clear that the new pleading standard applied to all civil actions pending in federal court. Iqbal, 556 U.S. at 684. Prior to Iqbal, there was some confusion as to the scope of Twombly. See A. Benjamin Spencer, UnderstandingPleading Doctrine, 108 MICH. L. REV. 1, 1 (2009) ("The ... general pleading standards in . . . Twombly has not left courts and litigants with a clear or precise understanding of what it takes to state a claim that can survive a motion to dismiss." (emphasis omitted)).

9.

E.g., Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982) ("Sometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiffs claim. . . ."); see also Baum v. Great W. Cities, Inc., of N.M., 703 F.2d 1197, 1210 (10th Cir. 1983) (affirming the district court's dismissal of class allegations); Galloway v. Am. Brands, Inc., 81 F.R.D. 580, 587 (E.D.N.C. 1978) (granting the defendants' motion to deny class certification despite plaintiffs argument that additional discovery was needed).

10.

Kamm v. Cal. City Dev. Co., 509 F.2d 205, 209-10 (9th Cir. 1975). The specific issue addressed on certification was whether, given a pending state court action filed by the California Attorney General, a class action addressing the same issues was "the superior method for resolving the alleged controversy." Id. at 207.

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information afforded by the pleadings."" Stewart went on to hold that the district court did not abuse its discretion in denying certification without allowing discovery since the complaint established that no common questions existed for the proposed class. 12 These early decisions supported the appropriateness of challenging class certification at the pleading stage, although some cases recognized that often some discovery would be necessary. 13 Unfortunately, the courts did not explore or address either the proper procedural mechanism to make such a challenge or the standards to be applied in deciding the issue. 14 Given the lack of clear direction, defendants have opted to bring motions to dispose of class allegations at the pleading stage under a variety of procedural rules, and courts have applied varying standards to address these challenges. A review of the reported decisions shows defendants have utilized one or a combination of the following procedures: (1) motions to strike pursuant to Rule 12(f); (2) motions to dismiss pursuant to Rule 12(b)(6); (3) motions to strike pursuant to Rule 23(d)(1)(D); and (4) motions to deny class certification pursuant to Rule 23(c)(1)(A).'

Presented with these varying procedural devices, courts have been less than consistent in articulating the standard to be applied in determining whether class allegations are sufficient to move forward with discovery or should be dismissed or stricken. Regardless of the procedural rule used, however, courts tend to fall back on the familiar Rule 12(b)(6) standards. For example, in one relatively early case, a district court noted that "[a]lthough

11.

Stewart v. Winter, 669 F.2d 328, 332 (5th Cir. 1982).

12.

Id. at 333.

13.

See id. at 332; Kamm, 509 F.2d at 209-10; see also Falcon, 457 U.S. at 160 ("[S]ometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question.").

14.

In Stewart, at the request of the defendant, the district court set a hearing on the plaintiffs motion for certification, filed at the same time as the complaint, and also stayed discovery. Stewart, 669 F.2d at 331. Although not specifically addressed, presumably the burden was on the plaintiff to establish certification was appropriate. In Kamm, the defendant filed a motion to dismiss and strike class allegations pursuant to Rule 23(c) and (d), along with an affidavit in support. Kamm, 509 F.2d at 207, 209. Although concerned by the inclusion of material outside the complaint, even though the motion was not filed pursuant to Rule 12(b)(6), the Ninth Circuit found that the district court's decision was based on matters of public record, although it also noted that plaintiffs relied on certain matters not of public record set out in the affidavit. Id. at 209 n.8, 210. The Kamm court did not state which party had the burden on the motion, but it appears the burden was placed on the defendant.

15.

See infra Part 11; see also Kayes, supra note 1. Rule 23(d)(1)(D) refers to the current portion of Rule 23 that provides that a court may "require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly." FED. R. Civ. P. 23(d)(1)(D). Rule 23 has always contained this language, although the subsection has changed. This Article will use the current subsection throughout unless quoting earlier cases that refer to the prior subsection.

2014]

245

CHALLENGING CLASS CERTIFICA TION

Rule 23 outlines the substantive requirements needed to establish a class, the rule does not provide a standard of review to determine the sufficiency of any allegations at particular phases of litigation."' 6 The court ultimately decided to employ a Rule 12(b)(6) standard to decide a motion to strike class allegations filed prior to discovery.17 This Article will review the approaches taken by courts to the question of how to resolve a challenge to class certification prior to discovery. Since the approach varies among the circuits, and sometimes within a circuit, each circuit will be addressed separately. Next, this Article will evaluate the procedural rules used, and argue that Rule 12(f) is not an appropriate mechanism to challenge class allegations, and Rule 12(b)(6) is applicable only in very limited circumstances. Among other reasons, neither rule was intended to address-nor by their terms do they address-the propriety of class certification. This Article will then explain why Rule 23 is the most appropriate mechanism to challenge class certification at the pleading stage.

While Rule 23(d)(1)(D) has been considered an appropriate basis to strike class allegations, it is not clear that the drafters of Rule 23 envisioned the use of this provision to challenge class certification at the pleading stage.' 8 A motion to deny class certification under Rule 23(c)(1)(A), however, has been recognized as proper at all stages of a proposed class suit, and is the most appropriate vehicle to challenge certification at the pleading stage.' 9 Finally, this Article will explain how use of the proper procedure will allow courts the flexibility to develop and apply an appropriate standard for early Rule 23 determinations, particularly in light of the discretion that the rule affords district courts.

II.

CURRENT APPROACHES TO CHALLENGES TO CLASS CERTIFICATION AT

THE PLEADING STAGE Not surprisingly, courts in circuits that handle more class actions have addressed challenges to class certification at the pleading stage on more occasions, although courts in every circuit have addressed the issue. 20

However, there is significant variability in the approach taken in deciding 16.

Bessette v. Avco Fin. Servs., Inc., 279 BR. 442, 450 (D.R.I. 2002) (addressing motion to strike class allegations filed by the defendant).

17.

Id. 18.

See FED. R. Civ. P. 23 advisory committee notes. See generally 7B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE

§

1795

(3d ed. 2005) (discussing how subdivision (d)(4) may be used to strike class allegations at the pleading stage).

19.

See infra Part III.B. 20.

The Third, Fifth, and Ninth Circuits have addressed the issue more often than the other circuits. See infra Parts II.C, II.E, 11.1.

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such challenges, both among the circuits and in some instances within the circuits.

A.

FirstCircuit

In Manning v. Boston Medical, the First Circuit addressed challenges to class certification at the pleading stage.2 1 In Manning, the court held that if the pleadings established that the Rule 23 requirements could not be met, district courts may strike class allegations pursuant to Rule 12(f). 22 The court reversed the district court's order granting the motion to strike, however, finding (1) Rule 12(f) motions are disfavored, and (2) generally a court should "await the development of a factual record before" deciding the certification question.23 Earlier district court decisions in the First Circuit took a different approach. In Bessette v. Avco Financial Services, the defendant filed a motion to strike class allegations, arguing that the Rule 23 determination did not require discovery and that the plaintiff would be unable to meet the requirements of class certification as a matter of law. 2 4 The court recognized that class allegations could be challenged at the pleading stage, but was unsure what standard to apply.25 Ultimately, the court held that "[fjor purposes of a motion to strike class allegations, asserted prior to any discovery on the matter," it will "review[ ] th[e] motion as if it were a

21.

Manning v. Boston Med. Ctr. Corp., 725 F.3d 34, 59 (1st Cir. 2013). The First Circuit had previously declined to address the issue. See Yaffe v. Powers, 454 F.2d 1362, 1367 (1st Cir. 1972), overruled by Gardner v. Westinghouse Broad. Co., 437 U.S. 478 (1978). In Yaffe, the district court denied certification in connection with determining the proper scope of discovery. Id. at 1364. The First Circuit reversed, stating "[t]o pronounce finally, prior to allowing any discovery, the non-existence of a class or set of subclasses, when their existence may depend on information wholly within defendants' ken, seems precipitate and contrary to the pragmatic spirit of Rule 23." Id. at 1366. However, it does not appear that the defendant affirmatively moved to strike or dismiss the class allegations.

22.

Manning, 725 F.3d at 59 (citing Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011)). However, Pilgrim did not identify Rule 12(f) as the basis for striking class allegations. In fact, neither the Sixth Circuit nor the district court cited any rule in deciding the generic motion to strike. Pilgrim, 660 F.3d at 949; Pilgrim v. Universal Health Card, LLC, Case No. 5:09CV879, 2010 U.S. Dist. LEXIS 28298, at *12-13 (N.D. Ohio Mar. 25, 2010), affd, 660 F.3d 943 (6th Cir. 2011). However, the motion ruled on by the district court in Pilgrim cited Rule 23(c)(1) and 23(d)(1)(D) as the procedural basis for the relief sought. See Defendant Universal Health Card, LLC's Motion to Strike Class Allegations Pursuant to Fed. R. Civ. P. 23(d)(1)(D) at 1, Pilgrim v. Universal Health Card, LLC, Case No. 5:09CV879 (N.D. Ohio Mar. 25, 2010), ECF No. 29.

23.

Manning, 725 F.3d at 59-60.

24.

Bessette v. Avco Fin. Servs., Inc., 279 B.R. 442, 449-50 (D.R.I. 2002). The court did not specify under what rule the motion to strike was made.

25.

See id. at 450.

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motion to dismiss." 2 6 Accordingly, the court relied solely on the factual allegations contained in the complaint, finding them sufficient to satisfy the liberal pleading requirements of Rule 8.27 Similarly, the district court in Manning used a Rule 12(b)(6) standard to determine whether class allegations should be stricken.28 The court applied Iqbal and Twombly, holding that in order to proceed with a proposed class, a plaintiff must allege a factual basis establishing "that common issues of fact ... predominate." 29 Whether the Rule 12(b)(6) approach taken by district courts within the First Circuit is still viable is an open question, given the First Circuit's explicit reliance on Rule 12(f) in vacating the district court's decision in Manning.3 0 B.

Second Circuit

District courts in the Second Circuit have taken a dim view of attempts to challenge class certification at the pleading stage. Typically, the issue has been raised through a motion to strike class allegations under either Rule

12(f) or Rule 23(d)(1)(D). 3 ' Second Circuit courts begin with the proposition that "[miotions to strike are generally looked upon with disfavor[, and a] motion to strike class allegations ... is even more disfavored" because the courts are required to make a determination of the class certification question before a plaintiff has an opportunity to conduct discovery. 32 In almost every case, therefore, district courts in the Second Circuit find that a motion to strike class allegations is premature unless the motion to strike addresses issues "separate and apart from the issues that

26.

Id. (citing 7A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE,

FEDERAL PRACTICE AND PROCEDURE § 1759 (2d ed. 1986)). Similarly, the court in In re Walls noted that a motion to deny class certification prior to discovery was "the functional equivalent of a motion to dismiss." Walls v. Wells Fargo Bank, N.A. (In re Walls), 262 B.R. 519, 529 (Bankr.

E.D. Cal. 2001).

27.

See Bessette, 279 B.R. at 451-52.

28.

Manning v. Boston Med. Ctr. Corp., Civil Action No. 09-l1463-RWZ, 2012 U.S. Dist.

LEXIS 54692, at *4 (D. Mass. Apr. 18, 2012), aff'd in part, vacated in part, 725 F.3d 34 (1st Cir. 2013) ("A motion to strike class allegations is also analyzed under the 12(b)(6) standard." (emphasis omitted)).

29.

Id. at *8.

30.

See Manning, 725 F.3d at 59.

31.

See, e.g., Blagman v. Apple Inc., No. 12 Civ. 5453 (ALC) (JCF), 2013 U.S. Dist.

LEXIS 71280, at *2-3 (S.D.N.Y. May 20, 2013); Calibuso v. Bank ofAm. Corp., 893 F. Supp. 2d 374, 383 (E.D.N.Y. 2012).

32.

See, e.g., Chenensky v. N.Y. Life Ins. Co., No. 07 Civ. 11504 (WHP), 2011 U.S. Dist.

LEXIS 48199, at *3-4 (S.D.N.Y. Apr. 27, 2011) (third alteration in original) (citations omitted) (quoting Ironforge.com v. Paychex, Inc., 747 F. Supp. 2d 384, 404 (W.D.N.Y. 2010)); Chen-Oster v. Goldman, Sachs & Co., 877 F. Supp. 2d 113, 117 (S.D.N.Y. 2012) (citing Chenensky, 2011 U.S. Dist. LEXIS 48199, at *3-4).

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will be decided on a class certification motion." 3 3 For example, Kassman v.

KPMG noted that district courts in the Second Circuit have consistently found that a motion arguing that a plaintiffs allegations are insufficient under Rule 23(a), (b)(2), or (b)(3) is premature because the same issues would be decided in the context of a motion for class certification. 3 4 However, a challenge to the named plaintiffs' standing to bring the claims could be considered at the pleading stage since that is an issue independent of the Rule 23 certification requirements. It is unclear under this standard what other issues are separate and apart from Rule 23 issues such that a challenge to class certification at the pleading stage would be appropriate.

C.

Third Circuit

For the most part, district courts in the Third Circuit reject challenges to class certification prior to discovery, regardless of the procedure used.

Recent cases almost uniformly hold that a motion to dismiss or strike class allegations pursuant to Rule 12(b)(6), Rule 12(f), or Rule 23 is premature since it would preempt any class certification motion. 3 6 The justification for this rule was set out in Korman v. The Walking Co. 3 7 In addressing a motion to strike class allegations under Rule 23(d)(1)(D), the court stated that the motion was identical to what would be expected in opposition to a motion for class certification.38 The court reasoned that "[i]t would be improper to allow [d]efendants to slip through the backdoor what is essentially an opposition to a motion for class certification before [p]laintiffs have made such a motion and when discovery on the issue is still on-going." 3 9 The

33.

See Calibuso, 893 F. Supp. 2d at 383 (quoting Chen-Oster, 877 F. Supp. 2d at 117).

34.

Kassman v. KPMG LLP, 925 F. Supp. 2d 453, 464 (S.D.N.Y. 2013) ("[A]t least in this Circuit, a motion to strike class claims is considered premature if the issues raised are 'the same ones that would be decided in connection with determining the appropriateness of class certification under Rules 23(a) and 23(b)."' (quoting Rahman v. Smith & Wollensky Rest. Grp., Inc., No. 06 Civ. 6198(LAK)(JCF), 2008 WL 161230, at *3 (S.D.N.Y. Jan. 16, 2008))).

35.

See id. at 465.

36.

See, e.g., Luppino v. Mercedes-Benz USA, LLC, Civil Action No. 09-CV-5582 (DMC) (JBC), 2013 U.S. Dist. LEXIS 161689, at *20-21 (D.N.J. Nov. 12, 2013); Feldman v. MercedesBenz U.S., LLC, Civ. No. 2:11-cv-00984 (WJM), 2012 U.S. Dist. LEXIS 178924, at *36 (D.N.J. Dec. 18, 2012) (holding that a motion to strike class allegations under Rule 12(f) was premature); Haggart v. Endogastric Solutions, Inc., Civil Action No. 10-0346, 2011 U.S. Dist. LEXIS 11289, at *13 (W.D. Pa. Feb. 4, 2011) (citing numerous cases in the Third Circuit so holding). See generally Thomas, supra note I ("Prior to Landsman, district courts routinely-although not exclusively-declined to strike class allegations as premature because of the similarity between motions to strike and class certification issues." (emphasis added)).

37.

Korman v. Walking Co., 503 F. Supp. 2d 755, 762-63 (E.D. Pa. 2007).

38.

Id. at 762.

Id. (quoting Beauperthuy v. 24 Hour Fitness USA, Inc., No. 06-017 SC, 2006 U.S. Dist.

39.

LEXIS 88988, at *10--11 (N.D. Cal. Nov. 28, 2006)).

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court further noted that Rule 23(d)(1)(D) was generally employed to strike class allegations after a motion for certification had been denied.40 Although the Third Circuit has not directly addressed the issue, district courts have relied on Landsman & Funk PC v. Skinder-Strauss Assocs. for the proposition that discovery should be allowed before a class determination is made. 4 ' In Landsman, the Third Circuit emphasized the need for discovery in order to make a class-certification decision, suggesting that the rigorous analysis required by Rule 23 cannot be made in the absence of discovery.42 Although district courts recognize that Landsman did not specifically address a motion challenging class allegations,43 the case is nevertheless cited for the proposition that discovery is almost always essential in order to make a class-certification decision.44 However, a few district courts in the Third Circuit have taken a different approach.45 In addressing motions to dismiss and motions to strike class allegations in several consolidated actions, one court elected to exercise its authority to oversee the actions and ordered additional briefing on specific issues relevant to class certification.4 6 The court made clear that it doubted the plaintiffs could ever satisfy the requirements of Rule 23.4 40.

Id. ("Rule 23(d)(4) is the procedural mechanism for striking class allegations from the complaint once the [c]ourt determines that maintenance of the action as a class is inappropriate.").

41.

See Landsman & Funk PC v. Skinder-Strauss Assocs., 640 F.3d 72, 93-94 (3d Cir.), vacated en banc, 650 F.3d 311 (3d Cir. 2011), and vacated en banc, Nos. 09-3105/09-3532/093793, 2012 U.S. App. LEXIS 11946 (3d Cir. Apr. 17, 2012).

42.

Id. 43.

See, e.g., Martin v. Ford Motor Co., 765 F. Supp. 2d 673, 680 (E.D. Pa. 2011).

44.

See, e.g., Vlachos v. Choice One Cmty. Fed. Credit Union, Civil Action No. 3:11 -CV57, 2011 U.S. Dist. LEXIS 84403, at *8-9 (M.D. Pa. May 16, 2011) (citing Landsman & Funk PC, 640 F.3d at 93).

45.

See, e.g., Semenko v. Wendy's Int'l, Inc., No. 2: 12-cv-0836, 2013 U.S. Dist. LEXIS 52582, at *32-33 (W.D. Pa. Apr. 12, 2013) ("[T]he [clourt concludes that this is one of those rare cases in which no amount of discovery will demonstrate that the class can be maintained."); Smith v. Merial Ltd., Civ. Nos. 10-439, 10-442, 10-1050, 10-1391, 10-6372, 11-6976, 2012 U.S. Dist.

LEXIS 78220, at *23-24 (D.N.J. June 5, 2012) (requiring additional briefing on class-certification issues).

46.

Smith, 2012 U.S. Dist. LEXIS 78220, at *7 ("[Tlhe trial court... possesses broad discretion to control proceedings and frame [class certification] issues . . . ." (second & third alterations in original) (quoting In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 310 (3d Cir. 2008))); see also id. ("[l]f actions before the court involve a common question of law or fact, the court may . .. issue any other orders to avoid unnecessary costs or delay." (second alteration in original) (quoting FED. R. Civ. P. 42(a)(3))). The district court did not identify the procedural rule on which the motions to strike were based.

47.

Id. at *15. The court noted that certification under Rule 23(b)(2) would not be appropriate since the relief sought was primarily monetary, and certification under 23(b)(3) "seem[ed] unlikely because the variances in the states' laws governing [the] claims create[d] manageability concerns." Id. at *16.

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Although the court recognized its authority to strike the class allegations, it also acknowledged its "responsibility to thoroughly scrutinize whether the requirements of Rule 23 are satisfied." 4 8 The court therefore ordered additional briefing on how the choice-of-law issues would affect certification under Rule 23(b)(3). 4 9 Another district court, relying on Rule 23(d)(1)(D), ordered the plaintiff to remove class allegations from the complaint.o After analyzing the requirements of the claim asserted, the court found that the commonality and typicality elements could not be met, nor could the proposed class meet any of the criteria for Rule 23(b)." The court held that the case was a rare one "in which no amount of discovery will demonstrate that the class can be maintained." 52 The approach taken by these courts in addressing challenges to class certification at the pleading stage is significantly different than that taken by most courts in the Third Circuit.

D.

Fourth Circuit

Only a few cases in the Fourth Circuit address challenges to class certification at the pleading stage, but the courts have taken a consistent approach to deciding the issue. 53 For example, Ross-Randolph v. Allstate Insurance addressed a motion to strike class allegations for failure to establish several requirements of Rule 23. The court noted that Rule 23(c)(1) required that the class-certification decision be made "[a]s soon as practical after commencement of [the] action." 55 The court reasoned that a

48.

Id. at *22 (citing In re Hydrogen Peroxide Antitrust Litig., 552 F.3d at 316 n.15; Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 162 (3d Cir. 2001)).

49. Id. at *24-25. The court also required the parties to provide information on discovery that had been conducted in related actions, suggesting that the court believed sufficient relevant discovery may have already occurred. See id.

50.

Semenko, 2013 U.S. Dist. LEXIS 52582, at *33. The defendant moved to strike under Rules 12(f), 23(c)(1)(A), and 23(d)(1)(D). Id. at *3. It appears the court did not believe Rule 12(f) was the appropriate procedure to address the class allegations since, after setting out the Rule 12(f) standards, the court never mentioned the rule again. See id. at *3-4.

51.

Id. at *33.

52.

Id. 53.

See Stanley v. Cent. Garden & Pet Corp., 891 F. Supp. 2d 757, 769 (D. Md. 2012) (analyzing Rule 23 requirements before class certification); Morris v. City of Charlottesville, Civil Action No. 3:00CV00029, 2001 U.S. Dist. LEXIS 9094, at *8-9 (W.D. Va. July 3, 2001) (addressing a motion opposing class certification, although no motion for certification was filed); Ross-Randolph v. Allstate Ins., Civil Action No. DKC 99-3344, 2001 U.S. Dist. LEXIS 25645, at *2 (D. Md. May 11, 2001) (holding that plaintiffs failed to satisfy Rule 23 before class certification).

54.

Ross-Randolph, 2001 U.S. Dist. LEXIS 25645, at *2. In deciding the issue, the court failed to identify the procedural rule on which the motion to strike was based.

55.

Id. at *11.

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class-certification decision could be made before a motion by the plaintiff, and a defendant could move for denial of class certification.56 The court then analyzed the legal requirements for recovery under the proposed class claims to determine if the Rule 23 standards could be met. 7 Based on the individual issues inherent in the legal requirements of the proposed class claims, the court found that plaintiffs failed to meet the commonality prong of Rule 23(a)(2) and the predominance requirement of Rule 23(b)(3), and thus granted the motion.58 Stanley v. Central Garden, a more recent decision, took a similar approach in deciding a motion to strike class allegations, relying in part on Ross-Randolph.59 Stanley started with the proposition that "[i]f a plaintiff fails to allege sufficient facts to meet the requirements of Rule 23," then the court can strike the class allegations pursuant to Rule 23(d)(4).60 The court granted the motion to strike with respect to a proposed Rule 23(b)(2) class since (1) the primary relief sought was monetary, and (2) a proposed claim for breach of implied warranty under Maryland law required notification by each class member of the alleged breach, which was an individual issue. 6 1 The court denied the motion to strike the fraud and consumer-protection claims, despite noting that those claims are often inappropriate for certification.6 2 In deciding the motion to strike, the Stanley court did not cite Twombly, Iqbal, or any other case addressing the standards for determining a motion to dismiss. Rather, the court addressed the motion to

56.

Id. at *14 (citing Cook Cnty. Coll. Teachers Union, Local 1600 v. Byrd, 456 F.2d 882,

885 (7th Cir. 1972); 7B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1798 (3d ed. 1986)).

57.

See id. at *17-30.

58.

See id. at *24-25, *29-30. One proposed claim required a determination with respect to each potential class member of "whether a particular medical procedure is necessary and an individual claimant's charges derived therefrom are reasonable." Id. at *21. Another claim required individual proof of reliance, which the court noted made the claim inappropriate for class certification. Id. at *22-23 (citing Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 342 (4th Cir. 1998)).

59.

Stanley v. Cent. Garden & Pet Corp., 891 F. Supp. 2d 757, 769 (D. Md. 2012) (citing Ross-Randolph, 2001 U.S. Dist. LEXIS 25645, at *2).

60.

Id. 61.

Id.at771-72.

62.

Id. ("The Fourth Circuit has indicated that the fact-intensive individualized inquiry required to maintain a fraud claim will often preclude class certification, absent grounds for a presumption of reliance." (citing Gunnells v. Healthplan Servs., Inc., 348 F.3d 417, 435-46 (4th Cir. 2003))). While acknowledging that the defendants might ultimately prevail in opposing any motion for class certification, the court stated that "[gliven the reduced number of claims and damages, and the withdrawal of a request to certify a nationwide class, [the court] prefer[s] to permit some discovery before considering the class issues further." Id. at 772. Interestingly, the court suggested "some" discovery, clearly implying that discovery would be limited. See id.

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strike based on Rule 23, cases interpreting its requirements, and the elements of the proposed class claims.

E.

Fifth Circuit

There are numerous reported cases in the Fifth Circuit addressing challenges to class allegations at the pleading stage. As discussed above, the Fifth Circuit in Stewart v. Winter held that it may be appropriate to deny class certification based on the pleadings alone. 6 3 Similarly, in John v.

National Security Fire & Casualty Co., the Fifth Circuit reaffirmed that dismissal of class allegations based on the pleadings can be proper. 64 The district court in John dismissed the class allegations pursuant to Rule 12(b)(6) based on the plaintiffs' failure to plead an ascertainable class, and the Fifth Circuit recognized that the district court's action was permissible.

Based on Stewart and John, district courts in the Fifth Circuit have shown a willingness to address challenges to class certification at the pleading stage.66 However, these district courts are inconsistent with respect to the procedure used and the standard applied. For example, in Shafer v.

State Farm, the district court addressed a motion to dismiss class allegations and applied a strict Rule 12(b)(6) analysis. 67 The court stated,

63.

See supra note 11 and accompanying text; Stewart v. Winter, 669 F.2d 328, 332 (5th Cir. 1982).

64.

John v. Nat'l Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007).

65.

Id. Because of the unique procedural posture of the case, the Fifth Circuit did not decide whether the district court was correct in its assessment that an ascertainable class had not been pled since the plaintiff argued on appeal that the district court should have certified two separate classes not set forth in the complaint. Id. The Fifth Circuit therefore affirmed the district court on the basis that the plaintiff did not challenge the district court's ruling on the live pleading.

Id. Rule 12(b)(6) may be the appropriate procedure to address failure to plead an ascertainable class, even if that rule should not be used to test the explicit requirements of Rule 23. See infra Part Ill.A.2.

66.

See, e.g., In re Vioxx Prods. Liab. Litig., Case No. 09-3713, MDL No. 1657, Section: L, 2012 U.S. Dist. LEXIS 78954, at *2 (E.D. La. June 6, 2012); Pfeffer v. Three Star Venture, Inc., Civil Action No. SA-l1-CV-966-XR, 2012 U.S. Dist. LEXIS 11707, at *2-3, *6-7 (W.D. Tex. Jan. 31, 2012); Bevrotte v. Caesars Entm't Corp., Civil Action No. 11-543 Section: R, 2011 U.S. Dist. LEXIS 114463, at *2-3 (E.D. La. Oct. 4, 2011); Williams v. Chesapeake La., Inc., Civil Action No. 10-1906, 2011 U.S. Dist. LEXIS 52249, at *2 (W.D. La. May 13, 2011); Lang v.

DirecTV, Inc., 735 F. Supp. 2d 421, 425 (E.D. La. 2010); Schafer v. State Farm & Fire Cas. Co., Civil Action No. 06-8262 Section "K"(2), 2008 U.S. Dist. LEXIS 45844, at *1 (E.D. La. June 11, 2008); Henry v. Allstate Ins. Co., Civil Action No. 07-1738 Section "F," 2007 U.S. Dist. LEXIS 57822, at *4-5 (E.D. La. Aug. 8, 2007); Aguilar v. Allstate Fire & Cas. Ins. Co., Civil Action No. 06-4660 Section "F," 2007 U.S. Dist. LEXIS 16073, at *3--4 (E.D. La. Mar. 5, 2007).

67.

Schafer, 2008 U.S. Dist. LEXIS 45844, at *6-8; see also Pitre v. Yamaha Motor Co., Civil Action No. 13-5327, 2014 WL 4926318, at *18-19 (E.D. La. Sept. 30, 2014) (applying Rule 12(b)(6) standard to motion to dismiss class).

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'

"To follow [the defendant's] position, this [c]ourt would have to consider matters outside the pleadings to decide the present motion, but '[i]f the district court considers information outside the pleadings, the court must treat the motion as a motion for summary judgment."' 6 Ultimately, the court denied the motion to dismiss class allegations.69 The court in Pfeffer v. Three Star Ventures, Inc. took a similar approach to a motion to dismiss, finding that the defendant's contentions consisted of arguments opposing certification and declining to address the arguments until presented in response to a motion for class certification.70 In any case, the court held that the complaint met the "minimal notice pleading standards" required by Rule 8 and therefore survived the motion to dismiss. 7 On the other hand, in Bevrotte v. Caesars Entertainment Corp., the district court granted a motion to strike class allegations under Rule 23, but stated that an alternative motion to dismiss class allegations under Rule 12 was moot and did not appear to apply a Rule 12 standard at any point.72 Similarly, in Aguilar v. Allstate Fire & Casualty Insurance Co., the district court granted a motion to strike class allegations pursuant to Rule 23(d)(4), and never mentioned Rule 12 in its analysis of the class allegations.7 3 The court simply stated that "[a] court may strike class allegations under Rule 23(d)(4) where a complaint fails to plead the minimum facts necessary to establish the existence of a class satisfying Rule 23's mandate."7 4 The Aguilar court focused on whether the plaintiffs, given the nature of the claims asserted, could ever satisfy the predominance requirement of Rule

68.

Schafer, 2008 U.S. Dist. LEXIS 45844, at *12 (third alteration in original) (quoting Kennedy v. Chase Manhattan Bank USA, NA, 369 F.3d 833, 839 (5th Cir. 2004)). The court went on to say that it did "not find summary judgment treatment appropriate" given the "difference of opinion concerning the propriety of class treatment." Id. The court did not explain how a summary-judgment procedure could, or should under any circumstances, be applied to a decision on class certification.

69.

Id. at *16. It is interesting to note that the plaintiffs motion for class certification was denied, after what appeared to be significant discovery, for essentially the same reasons argued by State Farm in its motion to dismiss class allegations. See Schafer v. State Farm Fire & Cas. Co., Civil Action No. 06-8262 Section "K"(5), 2009 U.S. Dist. LEXIS 71940, at *26-27 (E.D. La. Aug. 3, 2009).

70.

Pfeffer, 2012 U.S. Dist. LEXIS 11707, at *7.

71.

Id. at *7-8.

72.

Bevrotte v. Caesars Entm't Corp., Civil Action No. 11-543 Section: R, 2011 U.S. Dist.

LEXIS 114463, at *17 (E.D. La. Oct. 4,2011).

73.

Aguilar v. Allstate Fire & Cas. Ins. Co., Civil Action No. 06-4660 Section "F," 2007 U.S. Dist. LEXIS 16073, at *3-5 (E.D. La. Mar. 5, 2007); see also Henry v. Allstate Ins. Co., Civil Action No. 07-1738 Section "F," 2007 U.S. Dist. LEXIS 57822, at *1, *4 (E.D. La. Aug. 8, 2007) (granting a motion to strike pursuant to Rule 23(d)(4) without mentioning Rule 12 with regard to its class-allegations analysis).

74.

Aguilar, 2007 U.S. Dist. LEXIS 16073, at *4 (citing Hedgepeth v. Blue Cross & Blue Shield, No. 1:05CV142-D-A, 2006 U.S. Dist. LEXIS 3177, at *4 (N.D. Miss. Jan. 18, 2006)).

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23(b)(3). 75 The court ultimately held that based on the face of the pleading, it was clear that individual issues would overwhelm any common issues, making class treatment inappropriate.76 Sixth Circuit

F.

In Pilgrim v. Universal Health Card, the Sixth Circuit recognized that a defendant can challenge class certification at the pleading stage.n Pilgrim addressed a district court's grant of a motion to strike class allegations and held that the district court was correct both procedurally and substantively. 78 The plaintiffs argued that the motion to strike was premature because it was filed before a motion to certify the class.79 The

'

court rejected that argument by noting that "nothing in [Rule 23] says that the court must await a motion by the plaintiffs," and that "'[e]ither plaintiff or defendant may move for a determination of whether the action may be certified under Rule 23(c)(1)."'so The court also upheld the ruling striking the class allegations, stating that the proposed "claims are governed by different [s]tates' laws, a largely legal determination, and no proffered or potential factual development offers any hope of altering that conclusion, one that will generally preclude class certification." 8 Prior to Pilgrim, at least one district court applied a Rule 12(b)(6) standard to a motion to dismiss or, in the alternative, to strike class-action allegations. 82 After Pilgrim, district courts in the Sixth Circuit have decided such motions without reference to Rule 12(b)(6). 83 For example, in Loreto 75.

See id. at *5-7.

76.

Id. at *7 (citing Pollet v. Travelers Prop. Cas. Ins. Co., Civil Action No. 01-863 Section

"N," 2001 U.S. Dist. LEXIS 19673, at *6-7 (E.D. La. Nov. 16, 2001)).

77. Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011).

78. Id. at 946, 949-50. Neither the Sixth Circuit nor the district court identified the procedural rule that was the basis of the motion to strike. However, the motion filed in the district court was based on Rule 23(c)(1) and 23(d)(1)(D). See supra note 22 and accompanying text.

79. Pilgrim, 660 F.3d at 949.

80. Id. (quoting 7AA CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1785 (3d ed. 2005)) (citing Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 941-44 (9th Cir. 2009); Cook Cnty. Coll. Teachers Union, Local 1600 v. Byrd, 456 F.2d 882, 884-85 (7th Cir. 1972)).

81.

Id.

82.

Delahunt v. Cytodyne Techs., 241 F. Supp. 2d 827, 827, 831 (S.D. Ohio 2003).

83. See Sauter v. CVS Pharmacy, Inc., No. 2:13-cv-846, 2014 WL 1814076, at *2-3 (S.D. Ohio May 7, 2014) (recognizing motion to strike as appropriate for challenging class allegations); Loreto v. Procter & Gamble Co., Case No. 1:09-cv-815, 2013 U.S. Dist. LEXIS 162752, at *17 (S.D. Ohio Nov. 15, 2013) (denying class action for lack of standing); Cowit v. Citimortgage, Inc., Case No. 1:12-cv-869, 2013 U.S. Dist. LEXIS 32219, at *5-7 (S.D. Ohio Mar. 8, 2013) (striking class allegations pursuant to Rule 23); Rikos v. Procter & Gamble Co., Case No. 1:11 -cv-226, 2012 U.S. Dist. LEXIS 25104, at *6-7 (S.D. Ohio Feb. 28, 2012) (analyzing the case under a Rule 23 standard). The Sixth Circuit also appears to reject Rule 12(f) as a basis for striking class claims.

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v. Procter & Gamble, the district court recently granted a motion to strike class allegations under Rule 23 without mentioning Rule 12 or the standards for dismissing claims under Rule 12.84 The court relied on evidence submitted by the defendant showing that an alleged false statement never appeared in any of its advertisements for the products at issue, and that the statement only appeared on a website for a short period along with various other general health and wellness tips.85 Since the allegedly false statement was not uniformly communicated to the proposed class, the court found that the proposed class "lack[ed] Article III standing, [was] overbroad, fail[ed] to meet the Rule 23(a) prerequisites, and individual inquiries predominate[d]." The district court also rejected the plaintiffs' argument that discovery should be allowed, stating that the plaintiffs failed to identify any discovery that could change the certification analysis.87 The approach taken by the court in Loreto is obviously inconsistent with a Rule 12 analysis.

G.

Seventh Circuit

In Kasalo v. Harris& Harris, Ltd., the Seventh Circuit recognized the ability of a district court to address class certification at any stage of the proceeding.8 8 Kasalo found that "the court may deny class certification even before the plaintiff files a motion requesting certification," and does not "need [to] delay a ruling on certification if it thinks that additional discovery would not be useful in resolving the class determination." 89 Even prior to Kasalo, district courts in the Seventh Circuit held that a motion to strike class allegations pursuant to Rule 23(d)(1)(D) was "an appropriate device to determine whether the case will proceed as a class action." 9 0 After See Cowit, 2013 U.S. Dist. LEXIS 32219, at *4-5 n.1 (holding that a motion to strike class

allegations was brought under Rule 23(d)(1)(D), and therefore any limitations on the time for filing a Rule 12(f) motion were inapplicable).

84.

Loreto, 2013 U.S. Dist. LEXIS 162752, at *17 (holding that the class action could not be maintained under Rule 23 without discussing Rule 12 standards).

85.

Id. at *6-8.

86.

Id. at *17.

87.

Id. at *8-10.

88.

See Kasalo v. Harris & Harris, Ltd., 656 F.3d 557, 563 (7th Cir. 2011). The court made its observations in connection with analyzing a district court's dismissal for want of prosecution, so it did not address the appropriate procedure for a defendant to challenge certification prior to discovery.

89.

Id. (citing Cook Cnty. Coll. Teachers Union, Local 1600 v. Byrd, 456 F.2d 882, 884-85 (7th Cir. 1972); WRIGHT ET AL., supra note 80, § 1785.3).

90.

E.g., Wright v. Family Dollar, Inc., No. 10 C 4410, 2010 U.S. Dist. LEXIS 126643, at *3 (N.D. 111. Nov. 30, 2010) (citing Muehlbauer v. Gen. Motors Corp., 431 F. Supp. 2d 847, 870 (N.D. 111. 2006)); Cornette v. Jenny Garton Ins. Agency, Inc., Civil Action No. 2:10-CV-60, 2010 U.S. Dist. LEXIS 52809, at *4 (N.D. W. Va. May 27, 2010).

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Kasalo, most district courts in the Seventh Circuit have continued to address motions to strike class allegations without regard to Rule 12(b)(6). 9 1 One court relied on Rule 12(f) and articulated the standard for striking class claims as "whether the class allegations in the complaint are facially and inherently defective to establish a class action." 92 Another court, however, specifically found that "courts in this district ... evaluate motions to strike class allegations under Rule 23, not Rule 12(f)," but nevertheless articulated the same "facially and inherently defective" standard. 93 At least one district court relied on evidence filed by the defendant in granting a motion to strike class allegations. 9 4 However, a district court recently found that a challenge to class certification prior to discovery should have been decided under a Rule 12(b)(6) standard. 95 H.

Eighth Circuit

The Eighth Circuit in McCrary v. Stifel recently held that "class claims that fail to meet the requirements of Rule 23 may be properly dismissed by granting a Rule 12(b)(6) motion."96 McCrary rejected the plaintiffs' argument that it was improper to address the issue of class certification before examining the merits of the individual claims.9 7 The Eighth Circuit upheld the district court's ruling that the individualized nature of the claims asserted "rendered [the] [p]laintiffs' class claims insufficient under Rule 23(b)(3)." 9 ' In an earlier case, the Eighth Circuit suggested that class certification could be determined on the pleadings alone, but noted that it would "seldom" be proper to do so.9

91.

See, e.g., Hill v. Wells Fargo Bank, N.A., 946 F. Supp. 2d 817, 829-33 (N.D. Ill. 2013) (analyzing the issue under Rule 23); Arango v. Work & Well, Inc., No. II C 1525, 2012 U.S. Dist. LEXIS 102411, at *6-7 (N.D. Ill. July 24, 2012) (quoting Wright, 2010 U.S. Dist. LEXIS

126643, at *4).

92. Wolfkiel v. Intersections Ins. Serv. Inc., Case No. 13 C 7133, 2014 WL 866979, at *4 (N.D. Ill. Mar. 5, 2014).

93. Buonomo v. Optimum Outcomes, Inc., 301 F.R.D. 292, 295 (N.D. Ill. 2014).

94. See Wright, 2010 U.S. Dist. LEXIS 126643, at *6 n.l (referencing an affidavit provided by the defendant regarding promotions made within a store where the plaintiff worked).

95. Ladik v. Wal-Mart Stores, Inc., 291 F.R.D. 263, 269 (W.D. Wis. 2013) ("[I]f the defendant moves to dismiss the class allegations before discovery, the court must evaluate the motion using a standard similar to that of Fed.R.Civ.P. 12(b)(6)." (citing Sjoblom v. Charter Commc'ns, LLC, No. 3:07-cv-0451-bbc, 2007 WL 4560541, at *6 (W.D. Wis. Dec. 19, 2007))).

McCrary v. Stifel, Nicolaus & Co., 687 F.3d 1052, 1059 (8th Cir. 2012).

96.

97. Id. at 1058-59.

98. Id. at 1059. The claims were based on assertions of unauthorized trading, churning, and misrepresentation. Id. 99. Walker v. World Tire Corp., 563 F.2d 918, 921 (8th Cir. 1977) (citing Jones v.

Diamond, 519 F.2d 1090, 1099 (5th Cir. 1975), overruled by Gardner v. Westinghouse Broad.

Co., 437 U.S. 478 (1978); Weathers v. Peters Realty Corp., 499 F.2d 1197, 1200 (6th Cir. 1974);

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Given the above, district courts in the Eighth Circuit have used a Rule 12(b)(6) standard when addressing motions to dismiss or, in the alternative, motions to strike class allegations. 00 Generally, district courts have applied a strict standard in deciding such motions. For example, in Nobles v. State Farm Mutual Automobile Insurance Co., the court stated that "the weight of authority indicates that courts should meet motions to dismiss class allegations at the 12(b)(6) stage with a great deal of skepticism."o1 The court further stated that "under the more forgiving standards of Rule 12(b)(6), any doubt as to whether the class action requirements will be met must be construed in favor of the plaintiffs."1 0 2 Applying this standard, the Nobles court rejected the defendants' argument that the plaintiffs' complaint, which alleged thirty-two separate claims under the laws of nineteen different states, made the plaintiffs' proposed class unmanageable as a matter of law.' 03 Similarly, in denying a motion to dismiss or strike class allegations, the court in St. Louis Heart Center v. Forest Pharmaceuticalsnoted that "[t]he Eighth Circuit views [Rule 12(f) motions to strike] with disfavor," and discovery on class issues is generally necessary.104 However, in Hagler v. True Manufacturing Co., another district court granted a motion to dismiss class allegations, finding that a plaintiffs complaint-which proposed to include all employees of the defendant who allegedly had their rights violated under the Family and

Huff v. N.D. Cass. Co. of Ala., 485 F.2d 710, 713 (5th Cir. 1973)). Given that the district court had ruled sua sponte on the class certification issues, the Eighth Circuit did not have occasion to discuss the appropriate procedure to address class allegations in a complaint. See id. The court did note that "[w]here . .. the pleadings themselves do not conclusively show whether the Rule 23 requirements are met, the parties must be afforded the opportunity to discover and present documentary evidence on the issue." Id. 100.

See, e.g., Sherrard v. Boeing Co., Case No. 4:13-CV-1015 (CEJ), 2013 U.S. Dist.

LEXIS 154125, at *7 (E.D. Mo. Oct. 28, 2013) ("When a defendant moves to dismiss class allegations prior to discovery, the court should evaluate the motion under a standard similar to that of Fed.R.Civ.P. 12(b)(6)." (emphasis omitted) (citing Ladik, 291 F.R.D. at 269)); St. Louis Heart Ctr., Inc. v. Forest Pharm., Inc., Case No. 4:12-CV-02224, 2013 U.S. Dist. LEXIS 35563, at *1422 (E.D. Mo. Mar. 13, 2013); Nobles v. State Farm Mut. Auto. Ins. Co., Case No. 10-04175-CVC-NKL, 2012 U.S. Dist. LEXIS 132318, at *2 (W.D. Mo. Sept. 17, 2012); Hagler v. True Mfg. Co., Case No. 4:12CV328MLM, 2012 U.S. Dist. LEXIS 40719, at *1, *15 (E.D. Mo. Mar. 26, 2012); In re Saturn L-Series Timing Chain Prods. Liab. Litig., MDL No. 1920, 8:07cv298, 8:08cv79, 2008 U.S. Dist. LEXIS 109978, at *2 (D. Neb. Nov. 7, 2008).

101.

Nobles, 2012 U.S. Dist. LEXIS 132318, at *6 n.l (emphasis omitted) (citing Ginardi v.

Frontier Gas Servs. LLC, No. 4:1I CV00420-BRW, 2011 WL 3493125, at *4 (E.D. Ark. Aug. 10, 2011)). The statement was made in the context of addressing whether the defendant needed to establish that class certification would be "impossible," or merely "implausible." Id. The court did not answer this question, however.

102.

Id. at *8 (emphasis omitted) (citing Walker, 563 F.2d at 921).

103.

Id. at *10-ll.

104.

St. Louis Heart Ctr., Inc., 2013 U.S. Dist. LEXIS 35563, at *15 n.4, *18 (citing Stanbury Law Firm, P.A. v. IRS, 221 F.3d 1059, 1063 (8th Cir. 2000) (per curiam)).

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Medical Leave Act during the three years prior to the lawsuit's filing-did not satisfy the commonality requirements for Rule 23(a)(2). 0 5 I.

Ninth Circuit

The Ninth Circuit has long recognized that class certification can, in some instances, be decided on the pleadings alone. 06 Recently, the Ninth Circuit specifically rejected the argument that a defendant's motion to deny class certification brought before a plaintiff files a motion for certification is always procedurally improper.' 07 Vinole v. Countrywide Home Loans, Inc. held that "Rule 23 does not preclude a defendant from bringing a 'preemptive' motion to deny certification."' 08 However, the court did not address the standard to be used in determining whether class allegations are sufficient since the plaintiff had an opportunity to conduct some discovery prior to the defendant's motion.1 09 While typically recognizing that class allegations could be dismissed without discovery, district courts in the Ninth Circuit rarely do so." 0 The district courts have taken this approach regardless of whether the challenge is made in a motion to dismiss pursuant to Rule 12(b)(6), motion to strike pursuant to Rule 23(d)(1)(D), or motion to strike pursuant to Rule 12(f)."'

105.

Hagler, 2012 U.S. Dist. LEXIS 40719, at *15 (citing Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011); Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009); Bell Ati. Corp. v.

Twombly, 550 U.S. 544, 555 (2007)).

106.

See, e.g., Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1312-13 (9th Cir. 1977); Kamm v. Cal. City Dev. Co., 509 F.2d 205, 209-10 (9th Cir. 1975).

107.

Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 939 (9th Cir. 2009).

108.

Id. 109.

See id. at 938-39. But see Edwards v. First Am. Corp., 385 F. App'x 629, 631 (9th Cir. 2010) (finding that "the district court abused its discretion in denying nationwide discovery" since the plaintiff must be allowed to obtain evidence as to whether the proposed class action is maintainable).

110.

See, e.g., In re Land Rover LR3 Tire Wear Prods. Liab. Litig., No. MDL 09-2008 AG, 2012 U.S. Dist. LEXIS 163852, at *5 (C.D. Cal. Oct. 24, 2012) ("[T]he granting of [motions to dismiss] is rare before class certification." (citing Cholakyan v. Mercedes-Benz USA, LLC, 796 F. Supp. 2d 1220, 1245 (C.D. Cal. 2011))); In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F. Supp. 2d 609, 615 (N.D. Cal. 2007) ("[T]he granting of motions to dismiss class allegations before discovery has commenced is rare."). Additionally, another district court within the Ninth Circuit has stated that there is at least some authority that "compliance with Rule 23 is not to be tested by a motion to dismiss for failure to state a claim." Paikai v. Gen. Motors Corp., No. Civ. S07-892 FCD GGH, 2009 U.S. Dist. LEXIS 8538, at *36 (E.D. Cal. Feb. 4, 2009) (emphasis omitted) (quoting Gillibeau v. City of Richmond, 417 F.2d 426, 432 (9th Cir. 1969)).

Ill. See, e.g., Clark v. LG Elecs. U.S.A., Inc., Case No. 13-cv-485 JM (JMA), 2013 U.S. Dist. LEXIS 155179, at *51 (S.D. Cal. Oct. 29, 2013) (addressing a motion to strike under Rule 12(f)); Kristensen v. Credit Payment Servs., Case No. 2:12-CV-00528-KJD-PAL, 2013 U.S. Dist.

LEXIS 25210, at *2-3 (D. Nev. Feb. 22, 2013) (addressing a motion to dismiss class allegations); Roberts v. Wyndham Int'l, Inc., Case Nos. 12-CV-5180-PSG, 12-CV-5083-PSG, 2012 U.S. Dist.

LEXIS 170719, at *10-11 (N.D. Cal. Nov. 29, 2012) (addressing a motion to strike under Rule

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While various district courts have accepted Rule 12(f) as an appropriate vehicle to challenge class allegations, at least one district court specifically rejected a Rule 12(f) challenge, described the defendants' reliance on the rule as a "procedural misstep,"' 1 2 and applied Rule 12(b)(6). Nevertheless, as in the Third Circuit," 3 district courts in the Ninth Circuit have suggested that motions to strike or dismiss class allegations are premature, if the defendant is actually seeking a determination of the class certification issue.11 4 Indeed, one district court simply found that a challenge to class certification was not proper outside an "opposition to a motion for class certification.""'5 In addition, at least two district courts have held that in order to obtain discovery on the class-certification issues, the complaint need only make a prima facie showing under Rule 23(a), not Rule 23(b).116 However, at least one court in the Ninth Circuit granted a motion to deny class certification using a Rule 12(b)(6) standard.' '7 The court first noted that Rule 23 does not disallow a defendant to move for the denial of class certification."'8 The court further reasoned that if such a motion were filed before any discovery, it should be decided based on the legal standards

23(d)(1)(D)); Kas v. Mercedes-Benz USA, LLC, No. CV 1-1032-GHK (PJWx), 2011 U.S. Dist.

LEXIS 127581, at *9-10 (C.D. Cal. Oct. 31, 2011) (addressing a motion to strike filed pursuant to Rule 12(f)).

112.

Compare Tasion Commc'ns, Inc. v. Ubiquiti Networks, Inc., No. C-13-1803 EMC, 2014 WL 1048710, at *3 (N.D. Cal. Mar. 14, 2014) ("Notwithstanding Defendants' procedural misstep, the Court will consider Defendants' arguments regarding the class action allegations under Count 12 in connection with their pending motion to dismiss , . . ."), with Ott v. Mortg.

Investors Corp. of Ohio, Inc., Case No. 14-cv-00645 ST, 2014 WL 6851964, at *11 (D. Or. Dec. 3, 2014) (addressing Rule 12(f) motion); Montemayor v. GC Servs. LP, Civil No. 13cvl 959 JAH (KSC), 2014 WL 5088221, at *6-7 (S.D. Cal. Sept. 29, 2014) (same).

113.

See discussion supra Part II.C; see also Shaw v. Experian Information Solutions, Inc., Case No. 13-CV-1295 JLS (BLM), 2014 WL 4824720, at *6 (S.D. Cal. Sept. 29, 2014).

114.

See Kristensen, 2013 U.S. Dist. LEXIS 25210, at *5 ("Defendant's arguments regarding failure to appropriately plead class action allegations are not properly brought in a motion to dismiss. Challenges to class allegations are properly brought in opposition to a motion for class certification." (citing Clerkin v. MyLife.com, Inc., No. C 11-00527 CW, 2011 U.S. Dist.

LEXIS 96735, at *9-11 (N.D. Cal. Aug. 29, 2011))); Roberts, 2012 U.S. Dist. LEXIS 170719, at *21 ("Defendants' papers highlight that they really seek an early class certification determination, rather than merely striking class allegations.").

115.

Kristensen, 2013 U.S. Dist. LEXIS 25210, at *5 (citing Clerkin, 2011 U.S. Dist. LEXIS 96735, at *9-11).

116.

See Coleman v. Jenny Craig, Inc., Civil No. I 1-cv-1301-MMA (DHB), 2013 U.S. Dist.

LEXIS 82815, at *20 n.7 (S.D. Cal. June 12, 2013) (citing Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1313 (9th Cir. 1977)); Algee v. Nordstrom, Inc., No. C 11-301 CW (MEJ), 2012 U.S. Dist. LEXIS 62232, at *5 (N.D. Cal. May 3, 2012) (citing Mantolete v. Bolger, 767 F.2d 1416, 1424 (9th Cir. 1985)).

117.

Picus v. Wal-Mart Stores, Inc., 256 F.R.D. 651, 655 (D. Nev. 2009) (citing Walls v.

Wells Fargo Bank, N.A. (In re Walls), 262 B.R. 519, 524 (Bankr. E.D. Cal. 2001)).

Id. at 655 n.1.

118.

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of a Rule 12(b)(6) motion." 9 After analyzing the requirements of the statelaw claims asserted in the complaint, the court found that "individual issues of reliance and damages predominate."' 20 Because of this and other problems with the class alleged in the complaint, the court held that the proposed class could not be certified as a matter of law.121 J.

Tenth Circuit

The Tenth Circuit has long recognized that it may be appropriate to dismiss class allegations at the pleading stage.1 2 2 However, only a few district courts in the Tenth Circuit have addressed early challenges to class certification.123 Hull v. Viega, Inc. considered a motion to strike class allegations under Rule 23(d)(1)(D) and found that the motion was expressly allowed by Rule 23.124 The plaintiffs argued that a motion to strike was premature, "that they should be permitted to engage in class discovery and move for class certification," and that the defendants could then respond with the arguments that were raised in their motion to strike.1 25 The Hull court rejected the plaintiffs' arguments, stating "that a motion to strike [was] procedurally permissible," and that "there [did] not appear to be any amount of discovery that could remedy the choice of law problems identified by [the d]efendants." 2 6 Nevertheless, the court requested additional briefing since the plaintiffs only addressed the timing of the motion to strike, "not the substance of [the d]efendants' motion." 27 Similarly, the court in Dollison v. American National Insurance Co. treated a Rule 12(f) motion to strike class allegations as a motion under Rule

119.

Id. at 655 (citing In re Walls, 262 B.R. at 524; Blihovde v. St. Croix Cnty., Wis., 219 F.R.D. 607, 614 (W.D. Wis. 2003)).

120.

Id. at 659.

121.

Id. 122.

See, e.g., Baum v. Great W. Cities, Inc., of N.M., 703 F.2d 1197, 1210 (10th Cir. 1983) (affirming the district court's dismissal of class allegations as it was not an abuse of discretion).

123.

See, e.g., Dollison v. Am. Nat'l Ins. Co., Case No. 13-CV-0100-CVE-FHM, 2013 U.S. Dist. LEXIS 67279, at *1-2, *26-28 (N.D. Okla. May 9, 2013) (deciding class certification on the pleadings); Hull v. Viega, Inc., Case No. 12-2086-JAR-DJW, 2013 U.S. Dist. LEXIS 26729, at *1 1-17 (D. Kan. Feb. 27, 2013) (denying the defendants' motion to strike at the pleadings stage); Stubbs v. McDonald's Corp., 224 F.R.D. 668, 674-76 (D. Kan. 2004) (granting in part and denying in part a motion to strike class allegations on the pleadings).

124.

Hull, 2013 U.S. Dist. LEXIS 26729, at *11.

125.

Id. at *17.

126.

Id. 127.

Id The court cited with approval Smith v. Merial, Ltd., which similarly ordered additional briefing on the choice-of-law issue. See id. at *17 n.16 (citing Smith v. Merial Ltd., Civ. Nos. 10-439, 10-442, 10-1050, 10-1391, 10-6372, 11-6976, 2012 U.S. Dist. LEXIS 78220, at *21-24 (D.N.J. June 5, 2012)).

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23(d)(1)(D).1 2 8 The court struck the class allegations, finding that the plaintiff failed the typicality and adequacy of representation requirements of Rule 23.129 In addressing the motions to strike, neither Dollison nor Hull referenced Rule 12(b)(6).

K.

Eleventh Circuit

'

The Eleventh Circuit recognizes that class certification can be determined, in some instances, from the face of the pleadings.1 30 However, courts in the Eleventh Circuit have not clearly addressed the proper procedure to challenge class allegations, or the standard to address such a challenge. For example, in Mills v. Foremost Insurance Co., the Eleventh Circuit reversed the district court's dismissal of class allegations pursuant to a Rule 12(b)(6) motion.' 3 ' The court noted that "[n]either party filed a motion regarding class certification under. . . [Rule 23]."132 Further, Mills did not appear to apply a Rule 12 analysis in evaluating the district court's dismissal of the class allegations.1 33 Rather, Mills relied on Rule 23, recognizing that it instructs district courts to determine class certification at an early, practical time, but holding that the district court's certification ruling was premature.1 3 4 The court stated that the parties' pleadings often do not establish the propriety of certification, and "the district court will need to go beyond the pleadings and permit some discovery and/or an evidentiary hearing to determine whether [the] class may be certified."

128.

Dollison, 2013 U.S. Dist. LEXIS 67279, at *26 (citing Hovsepian v. Apple, Inc., Case No. 08-5788 JF (PVT), 2009 U.S. Dist. LEXIS 117562, at *5 (N.D. Cal. Dec. 17, 2009)).

129.

Id. at *27-28. The district court did not have to conduct this analysis since the court had already dismissed the plaintiffs individual claims, which were the basis of the class action. See id.

130.

See, e.g., Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1006 (11th Cir. 1997) (concluding that the Rule 23(b)(3) predominance requirement could not be satisfied after simply reading the complaint).

131.

Mills v. Foremost Ins. Co., 511 F.3d 1300, 1302, 1311 (11th Cir. 2008).

132.

Id. at 1302. Whether or not intended, the statement leads one to the conclusion that the court did not believe Rule 12(b)(6) was the appropriate procedural mechanism to challenge certification.

133.

See id. at 1307-11. For example, the court never used Rule 12 as the standard when analyzing the district court's certification decision and, when setting out the standard of review, the court stated that "decisions regarding class action suitability are reviewed for abuse of discretion." Id. at 1303 (citing De Leon-Granados v. Eller & Sons Trees, Inc., 497 F.3d 1214, 1218 (11th Cir. 2007)). The abuse of discretion standard is inapplicable to the review of a Rule 12(b)(6) dismissal. See id. (stating that the standard of review for a 12(b)(6) motion to dismiss is de novo).

134.

Id. at 1309.

135.

Id. (citing Gen. Tel. Co. ofSw. v. Falcon, 457 U.S. 147, 160 (1982); Huffv. N.D. Cass Co. of Ala., 485 F.2d 710, 713 (5th Cir. 1973) (en banc)). Following remand from the Eleventh Circuit, the district court ultimately denied certification after analyzing the evidence submitted by

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After Mills, some district courts in the Eleventh Circuit have continued to apply Rule 12(b)(6) and have not been receptive to challenges to class certification at the pleading stage.1 For example, in Smith v. Rainey, the district court categorically stated that "compliance with Rule 23 is not to be tested by a motion to dismiss for failure to state a claim."' 37 Other district courts, apparently based on the defendants' moving papers, have addressed challenges to class allegations under Rule 12(f). 13 8 In addressing such a motion, the court in Gill-Samuel recognized that sometimes defendants move to dismiss class allegations under Rule 12(b)(6), but that when defendants move under Rule 12(f), the Rule 23 requirements should be viewed "through the lens of the Rule 12(f) standard for motions to strike." 39 In other words, the motion could be granted only if the classaction allegations are "redundant, immaterial, impertinent, or scandalous." 1 40 III. RULE 23 SHOULD GOVERN ALL DECISIONS REGARDING CLASS CERTIFICATION

This review of existing case law demonstrates that courts have taken inconsistent approaches to a challenge to class certification at the pleading stage. Different procedural rules have been used, leading to an application of different standards to the same question: how to resolve a defendant's early challenge to class certification. This Article will now evaluate which procedural rule should be used to determine an early challenge to class certification.

the parties for essentially the same reasons it dismissed the class claims initially. See Mills v.

Foremost Ins. Co., 269 F.R.D. 663, 673, 682 (M.D. Fla. 2010).

136.

See, e.g., Wagner v. CLC Resorts and Devs., Inc., Case No. 6:14-cv-281-Orl-31GJK, 2014 WL 3809130, at *4 (M.D. Fla. Aug. 1, 2014); Moore v. Walter Coke, Inc., 294 F.R.D. 620,

630 (N.D. Ala. 2013).

137.

Smith v. Rainey, Case No. 8:-09-cv-1628-T-27MAP, 2011 U.S. Dist. LEXIS 105286, at *10-11 (M.D. Fla. Sept. 15, 2011) (citing Gillibeau v. City of Richmond, 417 F.2d 426, 432 (9th Cir. 1969)).

138.

See Gill-Samuel v. Nova Biomedical Corp., 298 F.R.D. 693, 698-700 (S.D. Fla. 2014); Shamblin v. Obama for Am., No. 8:13-cv-2428-T-33TBM, 2014 WL 631931 (M.D. Fla. Feb. 18, 2014).

139. Gill-Samuel, 298 F.R.D. at 699.

140. Id.

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Rule 12 Is Not an AppropriateProceduralDevice to Challenge Class Certification

Courts have identified both Rule 12(f) and Rule 12(b)(6) as an appropriate means to challenge class-certification allegations. 14 1 Further, some courts have employed Rule 12, particularly 12(b)(6), when deciding challenges to class certification at the pleading stage, even if faced with a motion to strike or a motion to deny class certification brought pursuant to Rule 23.142 While it is understandable why courts and litigants would be drawn to Rule 12, given its familiarity and use in addressing pleading deficiencies, most courts have failed to provide any real analysis of why or how this rule applies to class-certification decisions. Moreover, the courts ignore that the terms of Rule 12(f) and 12(b)(6) do not encompass a challenge to the propriety of class certification. 143 Further, given the purpose of Rule 12, the standards for deciding a Rule 12(f) or 12(b)(6) motion are inconsistent with the discretion provided to district courts in deciding class certification under Rule 23.

1.

Rule 12() Should Not Be Used to Challenge Class Allegations.

Rule 12(f) provides as follows: The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. The court may act: (1) on its own; or

141.

The First Circuit identified Rule 12(f) as an appropriate means to test class allegations, although the district court decision under review used Rule 12(b)(6). See Manning v. Boston Med. Ctr. Corp., 725 F.3d 34, 59-60 (1st Cir. 2013); Wagner, 2014 WL 3809130, at *4 (discussing how using Rule 12(f) to strike class allegations is premature and disfavored in its circuit); Smith v.

Wash. Post Co., 962 F. Supp. 2d 79, 84-85 (D.D.C. 2013) (same); Schafer v. State Farm & Fire Cas. Co., Civil Action No. 06-8262 Section "K"(2), 2008 U.S. Dist. LEXIS 45844, at *8 (E.D. La. June 11, 2008) (using Rule 12(b)(6) in addressing motion to dismiss class allegations).

142.

See, e.g., Luppino v. Mercedes-Benz USA, LLC, Civil Action No. 09-CV-5582 (DMC) (JBC), 2013 U.S. Dist. LEXIS 161689, at *8-9 (D.N.J. Nov. 12, 2013) (citing Korman v. Walking Co., 503 F. Supp. 2d 755, 762-63 (E.D. Pa. 2007)) (addressing a motion to strike); Nobles v. State Farm Mut. Auto. Ins. Co., Case No. 10-04175-CV-C-NKL, 2012 U.S. Dist. LEXIS 132318, at *89 (W.D. Mo. Sept. 17, 2012) (citing Walker v. World Tire Corp., 563 F.2d 918, 921 (8th Cir. 1977)) (applying a 12(b)(6) standard to a motion to strike filed pursuant to Rule 23); Bessette v.

Avco Fin. Servs., Inc., 279 B.R. 442, 450 (D.R.I. 2002) (citing Walls v. Wells Fargo Bank, N.A. (In re Walls), 262 B.R. 519, 524 (Bankr. E.D. Cal. 2001)) (same).

143.

One noted commentator has stated that "[c]ompliance with the Rule 23 prerequisites theoretically should not be tested by a motion to dismiss for failure to state a claim or by a summary-judgment motion." WRIGHT ET AL., supra note 18, § 1798. However, no detailed explanation is provided in support of this statement. This Article attempts to more fully explore the reasons the statement is correct.

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(2) on motion made by a party either before responding to the pleading or, if a response is not allowed, within 21 days after being served with the pleading.1 4 4 Why this rule should apply to a motion challenging class allegations is not readily apparent. A complaint seeking class certification certainly does not raise an "insufficient defense," nor does it typically contain "redundant," "impertinent," or "scandalous" matters.1 45 At best, it could be tenuously argued that class allegations may be "immaterial" if a class cannot be certified.1 4 6 If Rule 12(f) were applied according to its terms, and particularly in light of the case law interpreting it, a motion to strike class allegations pursuant to Rule 12(f) should, except in the most extraordinary of circumstances, be summarily denied.1 47 Even courts that recognize Rule 12(f) as a basis to challenge class allegations do not rely on the text of the rule or cases decided thereunder to decide the motion, except to generally note that motions to strike under Rule 12(f) are highly disfavored. 148 144.

FED. R. Civ. P. 12.

145.

See Gill-Samuel, 298 F.R.D. at 699 (finding nothing redundant, immaterial, impertinent, or scandalous about class allegations); Herron v. Best Buy Stores, LP, No. 12-cv02103-GEB-JFM, 2013 U.S. Dist. LEXIS 116625, at *7, *14--15 (E.D. Cal. Aug. 15, 2013) (citing Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973-74 (9th Cir. 2010)) (noting that class allegations do not fall within matters that may be stricken under Rule 12(f)); Simpson v. Vantage Hospitality Grp., Case No. 12-cv-4814-YGR, 2012 U.S. Dist. LEXIS 172157, at *23-24 (N.D. Cal. Dec. 4, 2012) ("Defendant has failed to show that any of the class allegations are redundant, immaterial, impertinent, or scandalous under Fed. R. Civ. P. 12(f). For these reasons, [d]efendant's [m]otion to [d]ismiss and alternative request to strike class allegations are [denied]." (emphasis omitted)); see also 5C CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1382 (3d ed. 2004) ("[T]here appears to be general judicial agreement, as reflected in the extensive case law on the subject, that [Rule 12(f) motions] should be denied unless the challenged allegations have no possible relation or logical connection to the subject matter of the controversy." (footnote omitted)).

146.

This interpretation stretches Rule 12(f) beyond its intended scope. See, e.g., Cairns v.

Franklin Mint Co., 24 F. Supp. 2d 1013, 1037 (C.D. Cal. 1998) ("'Immaterial matter' [for purposes of a motion to strike] is that which has no essential or important relationship to the claim for relief or the defenses being pleaded."), aff'd sub nom. in an unpublished table decision, Diana Princess of Wales Mem'l Fund v. Franklin Mint Co., 216 F.3d 1082 (9th Cir. 1999). Moreover, no case was uncovered where a court relied on this portion of the rule in deciding a motion to strike class allegations.

147.

See, e.g., Herron, 2013 U.S. Dist. LEXIS 116625, at *15 ("[I]t has not been shown that Rule 12(f) is an 'authorized' or 'proper' vehicle for the relief sought." (quoting Yamamoto v.

Omiya, 564 F.2d 1319, 1327 (9th Cir. 1977))); see also Burma-Bibas, Inc. v. Excelled Leather Coat Corp., 584 F. Supp. 1214, 1218 (S.D.N.Y. 1984) (denying a defendant's motion to strike because they failed to allege that the "challenged words and paragraphs [were] ... redundant, immaterial, impertinent or scandalous"), abrogated by Ballet Makers, Inc. v. U.S. Shoe Corp., 633 F. Supp. 1328 (S.D.N.Y. 1986).

148.

See, e.g., Manning v. Boston Med. Ctr. Corp., 725 F.3d 34, 59 (1st Cir. 2013) ("[Rule 12(f)] motions are narrow in scope, disfavored in practice, and not calculated readily to invoke the court's discretion." (quoting Boreri v. Fiat S.P.A., 763 F.2d 17, 23 (1st Cir. 1985))); Smith v.

Wash. Post Co., 962 F. Supp. 2d 79, 84 (D.D.C. 2013) (quoting Uzlyan v. Solis, 706 F. Supp. 2d

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Instead, the courts proceed to analyze a 12(f) motion as either a motion under 12(b)(6) or a motion to strike or deny class certification under Rule 23.149 Given the disfavored status of the rule and its highly tenuous applicability, it is difficult to understand why a defendant would ever move to dismiss class allegations under Rule 12(f). 5 o While Rule 12(f) has always been a minor player in challenges to class certification at the pleading stage (despite the First Circuit's recent endorsement), its use in the future should be discontinued both by courts and litigants.

2.

Rule 12(b) (6) Has Only Limited Applicability in ChallengingClass Allegations Rule 12(b)(6) provides, in pertinent part, as follows: How to Present Defenses. Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required. But a party may assert the following defenses by motion: (6) failure to state a claim upon which relief can be granted ....

A motion asserting any of these defenses must be made before pleading if a responsive pleading is allowed.15 1

Again, it is difficult to fit a motion challenging class certification at the pleading stage within the express terms of Rule 12(b)(6). An allegation in a complaint that a class action should be certified is not a "claim for relief' as that term is generally understood or is used in the Federal Rules of Civil Procedure.1 52 The "claim" in a complaint is the set of underlying operative

44, 51 (D.D.C. 2010)); St. Louis Heart Ctr., Inc. v. Forest Pharm., Inc., Case No. 4:12-CV-02224, 2013 U.S. Dist. LEXIS 35563, at *15 n.4 (E.D. Mo. Mar. 13, 2013) (citing Stanbury Law Firm, P.A. v. IRS, 221 F.3d 1059, 1063 (8th Cir. 2000)); Roberts v. Wyndham Int'l, Inc., Case Nos, 12CV-5180-PSG, 12-CV-5083-PSG, 2012 U.S. Dist. LEXIS 170719, at *9 (N.D. Cal. Nov. 29, 2012) ("Any doubt concerning the import of the allegations to be stricken weighs in favor of denying the motion to strike." (quoting In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F. Supp. 2d 609, 614 (N.D. Cal. 2007))).

149.

See, e.g., Tasion Commc'ns, Inc. v. Ubiquiti Networks, Inc., No. C-13-1803 EMC, 2014 WL 1048710, at *3 (N.D. Cal. Mar. 14, 2014) (treating motion to strike under Rule 12(f) as a motion to dismiss); Bilhovde v. St. Croix. Cnty., Wis., 219 F.R.D. 607, 612-13 (W.D. Wis. 2003) (construing a motion to strike class allegations under Rule 12(f) as a motion to deny certification under Rule 23).

150.

In using Rule 12(f) to address class allegations, one can only assume that litigants and courts have simply followed prior cases that used the rule without any real analysis. Indeed, no case was uncovered that explained how the terms of the rule applied to a challenge to class certification at the pleading stage.

151.

FED. R. Civ. P. 12(b)(6).

152.

See id. A "claim" is defined as "[a]n interest or remedy recognized at law; the means by which a person can obtain a privilege, possession, or enjoyment of a right or thing." BLACK'S

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facts that support the legal basis upon which the plaintiff asserts the defendant is liable to it and any putative class.1 53 Underscoring this conclusion, the Supreme Court has made clear that Rule 23 does not create a claim or substantive right, but rather is merely a procedural rule addressing the propriety of joining claims of multiple parties in a single action.1 54 For the same reason, a challenge to the propriety of class certification cannot be a "defense" as contemplated by Rule 12.15' A "defense" is directed at the "claim for relief' in the complaint, not at a request that a procedural joinder rule be applied. 5 6 In short, the terms of Rule 12(b)(6) simply do not cover a motion challenging class certification at the pleading stage.' 57 Unlike Rule 12(f), however, it is understandable why courts and litigants have relied on Rule 12(b)(6). First, a challenge to class certification at the pleading stage appears facially similar to a motion to dismiss for failure to state a claim. Second, because of its wide use, courts are familiar with Rule 12(b)(6) and the standards for deciding such a motion. Third, in some limited circumstances the rule appears to be applicable. For example,

LAW DICTIONARY 240 (7th ed. 1999); see also Samaad v. City of Dallas, 940 F.2d 925, 931 (5th Cir. 1991) ("[I]t is clear that a claimant who presents a number of alternative legal theories, but whose recovery is limited to only one of them, has only a single claim of relief for purposes of Rule 54(b)." (quoting Page v. Preisser, 585 F.2d 336, 339 (8th Cir. 1978))), overruled by Rosedale Missionary Baptist Church v. New Orleans City, 641 F.3d 86 (5th Cir. 2011); Willoughby v.

Sinclair Oil & Gas Co., 188 F.2d 902, 905 (10th Cir. 1951) (noting that a claim is "the aggregate of operative facts" showing that the pleader is entitled to relief (quoting Original Ballet Russe, Ltd. v. Ballet Theatre, Inc., 133 F.2d 187, 189 (2d Cir. 1943))); Birnbaum v. Birrell, 9 F.R.D. 72, 74 (S.D.N.Y. 1948) ("[T]he word 'claim' in the Rules 'is used to denote the aggregate of operative facts which give rise to a right enforceable in the courts . . . .' (quoting OriginalBallet Russe, Ltd., 133 F.2d at 189)). If a request that a class be certified was a claim for relief, then the denial of certification could conceivably form the basis for entry of judgment pursuant to Rule 54(b), which allows for a final judgment in certain circumstances when a district court disposes of only some of the claims for relief in a suit.

See Willoughby, 188 F.2d at 905 (quoting Original Ballet Russe, Ltd., 133 F.2d at 153.

189)).

154.

See Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431, 1443 (2010). The Supreme Court held that "[a] class action, no less than traditional joinder (of which it is a species), merely enables a federal court to adjudicate claims of multiple parties at once, instead of in separate suits. And like traditional joinder, it leaves the parties' legal rights and duties intact and the rules of decision unchanged." Id.; see also Deposit Guar. Nat'l Bank of Jackson, Miss. v. Roper, 445 U.S. 326, 336 (1980) ("We view the denial of class certification as an example of a procedural ruling, collateral to the merits of a litigation . . . ."); Garcia v. Gloor, 618 F.2d 264, 267 (5th Cir. 1980) (noting that class certification is a procedural decision).

155.

See FED. R. Civ. P. 12.

156. See id.

157. See Robin J. Effron, The PlaintiffNeutrality Principle:PleadingComplex Litigation in the Era of Twombly and lqbal, 51 WM. & MARY L. REV. 1997, 2002 (2010) (arguing that Rule 12(b)(6) does not apply to pleading a class action, and that no rule requires that a class complaint plead facts showing that the Rule 23 requirements can be satisfied).

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the Fifth Circuit held that "[w]here it is facially apparent from the pleadings that there is no ascertainable class, a district court may dismiss the class allegation on the pleadings."' 58 Finally, defendants have been drawn to Rule 12(b)(6) given the apparent heightened pleading requirements established by Twombly and Iqbal and the perceived benefit of not having to file an answer until the motion is resolved. 5 9 However, the benefits of using Rule 12(b)(6) to address a challenge to class certification are outweighed by the problems of stretching the rule to address a situation it was not intended to, and by its terms does not, cover.

Dismissal of claims pursuant to Rule 12(b)(6) traditionally has not been a favored procedure.' 6 0 The rule effectively acts as the first hurdle a plaintiff must overcome to proceed with a claim in federal court, since granting a Rule 12(b)(6) motion will require the plaintiff to replead (if possible) or have some or all of the claims dismissed with prejudice. 6' A dismissal of a claim at the pleading stage is disfavored for several reasons.

First, the court alone determines the viability of a plaintiff s claims, and any possibility that a jury-the traditional and in some cases constitutionally mandated fact finder-will be able to address the claims has been

158.

John v. Nat'l Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007). While the Fifth Circuit never articulated why Rule 12(b)(6) was applicable, one possibility is that the "implicit" requirement of an ascertainable class is subject to the requirements of Rule 8. See FED. R. Civ. P. 8. In this regard, a defendant is entitled to know who proposes to assert a claim against it, and a class that is not ascertainable fails to provide such notice. See id. In addition, since proposed class members can obtain the benefit of the tolling of limitations while the class allegations are pending, it seems appropriate that a defendant move to dismiss the class allegations if the parties to whom tolling is to be applicable cannot be ascertained.

159.

See, e.g., Charles B. Campbell, Elementary Pleading, 73 LA. L. REV. 325, 357 (2013) (describing a study finding that motions to dismiss on the pleadings have increased since Iqbal).

Whether Twombly and Iqbal significantly altered pleading requirements is a matter hotly debated.

See, e.g., id. at 358-59 (reviewing reaction to empirical studies on the effect of Twombly and Iqbal). At least one commentator has suggested Twombly and Iqbal should be interpreted to require heightened pleading requirements for class actions. Matthew J.B. Lawrence, Courts Should Apply a Relatively More Stringent Pleading Threshold to Class Actions, 81 U. CIN. L. REV. 1225, 1250 (2013).

160.

See, e.g., Maez v. Mountain States Tel. & Tel., Inc., 54 F.3d 1488, 1496 (10th Cir. 1995) ("[T]he Federal Rules of Civil Procedure erect a powerful presumption against rejecting pleadings for failure to state a claim." (quoting Morgan v. City of Rawlins, 792 F.2d 975, 978 (10th Cir. 1986))); see also 5B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL

PRACTICE AND PROCEDURE § 1357 (3d ed. 2004) ("For many years after the promulgation of the Federal Rules of Civil Procedure the motion to dismiss for failure to state a claim was viewed with disfavor and was rarely granted; in many cases and in many courts, that restrained approach to the use of the motion continues to be the norm.").

161.

See generally Robert G. Bone, Twombly, PleadingRules, and the Regulation of Court Access, 94 IOWA L. REV. 873 (2009) (arguing that pleading rules are better understood as courtaccess rules designed to make an early determination of whether a case should proceed).

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removed.1 6 2 Second, dismissal precludes the plaintiff from engaging in discovery to buttress the allegations in the complaint.' 63 Finally, if amendment opportunities are exhausted or not allowed, the complaint is dismissed with prejudice and the plaintiff is precluded by res judicata from ever bringing the claim again, even if additional facts are uncovered at a later date.16 Accordingly, a district court has no discretion in ruling on a 12(b)(6) motion. In other words, the decision must be made as a matter of law, and on appeal the decision is reviewed de novo.' 65 Given the potentially draconian effects of dismissal on a plaintiffs substantive legal rights, strict procedures are imposed in making a Rule 12(b)(6) decision. Since a Rule 12(b)(6) motion addresses the sufficiency of the pleading under Rule 8(a)(2),1 6 6 a complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief' in order to survive dismissal. 67 This phrase has been interpreted to mean that the complaint must merely "give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests." 68 A district court must assume the facts pled in the complaint are true and construe the facts liberally in the light most favorable to the pleader.' 6 9 If "under any reasonable reading of the complaint, the plaintiff may be entitled to relief," then the district court must deny a motion to dismiss. 170 Further, if evidence outside the complaint is considered, "the motion must be treated as one for

162.

See generally Suja A. Thomas, Why the Motion to Dismiss Is Now Unconstitutional, 92 MINN. L. REv. 1851 (2008) (arguing that the motion to dismiss standard established by Twombly violates the Seventh Amendment right to a jury trial).

Nader v. McAuliffe, 593 F. Supp. 2d 95, 98 (D.D.C. 2009) (noting that a Rule 12(b)(6) 163. motion "tests the legal sufficiency of a complaint").

164.

Id. at 100 (dismissing complaint on res judicata grounds because the claims had been dismissed pursuant to Rule 12(b)(6) in a prior action).

165.

See, e.g., Land v. IBM, Inc., 485 F. App'x 830, 833 (7th Cir. 2012) (stating that the standard of review of a lower court's dismissal under Rule 12(b)(6) is de novo); Mills v. Foremost Ins. Co., 511 F.3d 1300, 1303 (11th Cir. 2008) (quoting Castro v. Sec'y of Homeland Sec., 472 F.3d 1334, 1336 (1 Ith Cir. 2006) (per curiam)).

166.

See FED. R. Civ. P. 12(b).

167.

FED. R. Civ. P. 8.

168.

Conley v. Gibson, 355 U.S. 41, 47 (1957), overruled in part by Bell Atl. Corp. v.

Twombly, 550 U.S. 544 (2007), andabrogatedin partby Ashcroft v. lqbal, 556 U.S. 662 (2009).

169.

See Davis ex. rel. LaShonda D. v. Monroe Cnty. Bd. of Educ., 526 U.S. 629, 633 (1999); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other grounds by Wood v.

Strickland, 420 U.S. 308 (1975).

170.

See Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002) (citing Colburn v. Upper Darby Twp., 838 F.2d 663, 665-66 (3d Cir. 1988), overruled on other grounds

by Leatherman v. Tarrant Cnty. Narcotics Intelligence and Coordination Unit, 507 U.S. 163 (1993)); Drake v. Hyundai Rotem U.S., Corp., Civil Action No. 13-0868, 2013 U.S. Dist. LEXIS 122393, at *7 (E.D. Pa. Aug. 28, 2013) (quoting Pinker, 292 F.3d at 374 n.7).

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summary judgment.""' In short, a district court must follow strict procedures in addressing a Rule 12(b)(6) motion, and the case law suggests that even after Twombly and Iqbal, the pleader should be given the benefit of any reasonable doubt.1 72 Applying this framework-which was designed to protect a plaintiffs legal and constitutional rights-to a classcertification decision under Rule 23-which is a procedural decision made in every instance by the district court-is simply inappropriate. Rather, as discussed below, the procedure and standard for challenging class certification at the pleading stage should be derived solely from Rule 23.

B.

Class-CertificationDecisions Should Be Decided Exclusively Under Rule 23

Rule 23 is self-contained, yet it does not contain any pleading requirements. 7 3 Specifically, Rule 8 does not apply to a request for certification under Rule 23 since such a request is not a "claim for relief' that is encompassed by Rule 8.174 A reasonable reading of Rule 8, however, supports a requirement that a plaintiff must allege in the complaint the composition of the proposed class and the factual basis of proposed-class claims since the plaintiff is seeking to pursue on behalf of putative class members "claims for relief' against a defendant."' However, nothing in Rule 8, or Rule 23 for that matter, requires that a plaintiff plead sufficient facts to suggest that it is "plausible" that the Rule 23 requirements for certification can be met.1 7 6 Nevertheless, as a matter of course, plaintiffs 171.

FED. R. Civ. P. 12(d). Converting a challenge to class certification into a motion for summary judgment makes no sense given the procedural nature of Rule 23 decisions. Like Rule 12, Rule 56 sets forth a procedure to dispose of claims and defenses without a trial. See FED. R. Civ. P. 56(a).

172.

See, e.g., Khalik v. United Air Lines, 671 F.3d 1188, 1191 (10th Cir. 2012); Drake, 2013 U.S. Dist. LEXIS 122393, at *6-7 ("Notwithstanding [Twombly and Iqbal], the basic tenets of the Rule 12(b)(6) standard of review have remained static." (citing Spence v. Brownsville Area Sch. Dist., No. 02:08cv0626, 2008 U.S. Dist. LEXIS 55026, at *6 (W.D. Pa. July 15, 2008))).

See Effron, supra note 157, at 2019. It could also be argued that Rule 12 is inapplicable 173. for this reason as well since there is no affirmative requirement to plead facts showing Rule 23 is applicable. See id.; cf Manning v. Boston Med. Ctr. Corp., 725 F.3d 34, 59 n.16 (1st Cir. 2013) (acknowledging the argument that the Fair Labor Standards Act "does not expressly require that [a] complaint plead the requirements of a collective action," but finding the argument had been waived).

See supra note 154 and accompanying text.

174.

175.

See FED. R. Civ. P. 8. For this reason, whether the plaintiff has pled an ascertainable class and whether the proposed class claims are factually and legally viable are appropriately challenged under Rule 12(b)(6). See discussion supra Part Ill.A.2.

176.

See discussion supra Part III.A.2. It could be argued that Rule 12(e) might provide a mechanism for a defendant to seek a more definite statement if a plaintiff failed to plead facts showing the requirements of Rule 23 were met. However, it is difficult to conceive of a situation where a complaint could be so vague or ambiguous regarding the requirements for certification

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typically do plead at least some facts showing that the Rule 23 requirements can be met, and courts will often require such allegations in a complaint."17 This requirement is best understood not as emanating from Rule 8, but from the well-recognized responsibility of a court to supervise proposed class actions.178 Similarly, challenges to certification at the pleading stage should be evaluated under Rule 23.

Focusing on Rule 23, two provisions are potentially applicable to a defendant's early challenge to class certification: 23(c)(1)(A) and 23(d)(1)(D).1 79 Courts and commentators have recognized that Rule 23(c)(1)(A) governs the timing of the class-certification decision, which includes (1) who can raise the issue, and (2) when the issue can be raised. 80 Rule 23(c)(1)(A) thus provides authority for the plaintiff, the defendant, or the district court itself to raise the propriety of class certification at any time. It is inherent in this directive that the district court has the discretion to decide when it is practicable to determine class certification."' On the other hand, Rule 23(d)(1)(D), which is under the heading "Conducting the Action," has been interpreted to apply after a district court has decided to deny class certification.1 82 If such a determination is made, the class that the defendant could not reasonably prepare a response to the claims for relief asserted in the complaint.

177.

See Moore v. Walter Coke, Inc., 294 F.R.D. 620, 631 (N.D. Ala. 2013) (quoting Peak v.

Topeka Hous. Auth., 78 F.R.D. 78, 81-83 (D. Kan. 1978)). Further, local rules in some districts may impose pleading requirements for a proposed class action. See, e.g., Smith v. Wash. Post Co., 962 F. Supp. 2d 79, 90 (D.D.C. 2013) (noting that the local rules require a plaintiff to identify the subsection of Rule 23 under which class certification is sought). No attempt was made to determine the extent to which such local rules exist.

178.

See Peak, 78 F.R.D. at 83-85 (noting general reasons why a court cannot manage a

proposed class action-particularly with respect to scope of discovery-without allegations outlining how the Rule 23 requirements can be met).

179.

Rule 23(c)(1)(A) provides, in pertinent part, "At an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action." FED. R. Civ. P. 23(c)(1)(A). Rule 23(d)(1)(D) provides, in pertinent part, "In conducting an action under this rule, the court may issue orders that: . . . require that the pleadings be amended to eliminate allegations about representation of absent persons and that the action proceed accordingly." FED. R. Civ. P. 23(d)(1)(D).

180.

See, e.g., Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011) (holding that Rule 23(c)(1) allows either the plaintiff or the defendant to move for a certification decision); Kasalo v. Harris & Harris, Ltd., 656 F.3d 557, 563 (7th Cir. 2011) (citing Cook Cnty.

Coll. Teachers Union, Local 1600 v. Byrd, 456 F.2d 882, 884-85 (7th Cir. 1972)) (holding that certification can be decided before plaintiff requests certification); Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 937 (9th Cir. 2009) (holding that defendant may seek denial of certification before a plaintiff moves for certification).

181. See Boyce v. Wachovia Sec., LLC, No. 5:09-CV-263-FL, 2010 U.S. Dist. LEXIS 30128, at *22-23 (E.D.N.C. Feb. 17, 2010) (quoting Jiron v. Sperry Rand Corp. (Sperry-Univac), 423 F. Supp. 155, 167 (D. Utah 1975)); WRIGHT ET AL., supra note 80, § 1785.3.

182. See FED. R. Civ. P. 23 advisory committee notes. The notes make it clear that if a district court determines that a suit is not maintainable as a class action, "the action should be

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allegations should be stricken from the complaint for practical reasons, such as to make it clear when the tolling of the statute of limitations ceases with respect to putative class members' claims. 83 Since the two subdivisions of Rule 23 were meant to work together, the appropriate procedure for a defendant to challenge class certification is by a motion to deny class certification under 23(c)(1)(A), coupled with a motion to strike under 23(d)(1)(D) should the motion to deny class certification be granted. While Rule 23 provides the appropriate procedure to challenge class certification at the pleading stage, as elaborated below, use of Rule 23 also allows for the development of an appropriate standard to address such a motion.

C.

AppropriateStandard to Determine a Defendant's Motion to Deny Class Certification

1.

What Is Being Decided UnderRule 23

It is important to identify what is being decided under Rule 23 to fornulate an appropriate standard. Commentators and courts recognize that granting or denying class certification may have a significant impact on the plaintiff, defendant, and proposed class members. 184 However, the decision is ultimately a procedural determination of whether the claims of putative class members can be adjudicated together in one trial.' 85 By its nature, the class-certification decision cannot affect the merits of any claim or

stripped of its character as a class action." Id. As support, the notes reference subdivision (d)(4), which is the current subdivision (d)(1)(D). P.V. v. Sch. Dist. of Phila., Civil Action No. 2:11 -cv4027, 2011 U.S. Dist. LEXIS 125370, at *8-9 (E.D. Pa. Oct. 31, 2011).

183. See WRIGHT ET AL., supra note 18, § 1795.

184.

See, e.g., In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1299 (7th Cir. 1995) (explaining that class actions force defendants to settle due to fears of exorbitant judgments on nonmeritorious claims). Even the Supreme Court has acknowledged that there is a "risk of 'in terrorem' settlements" in class actions. AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1752 (2011) (quoting Kohen v. Pac. Inv. Mgmt. Co., 571 F.3d 672, 677-78 (7th Cir. 2009)). On the other hand, in Carnegiev. Household International, Inc., the court noted that the alternative to a class action may be that the defendant would often face no liability "as only a lunatic or a fanatic sues for $30." Carnegie v. Household Int'l, Inc., 376 F.3d 656, 661 (7th Cir. 2004). The fact that Rule 23 was amended to provide an avenue to appeal the grant or denial of certification reflects the importance of the determination for all parties, as the commentary to Rule 23 makes clear by recognizing: (1) the burden on the plaintiff of proceeding with only an individual claim that "standing alone, is far smaller than the costs of litigation"; and (2) that a defendant might be forced to settle "rather than incur the costs of defending a class action and run the risk of potentially ruinous liability." See FED. R. Civ. P. 23 advisory committee notes.

185.

See supra note 154 and accompanying text.

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defense.' 86 Indeed, a district court cannot base a certification decision on its assessment of the merit, or lack thereof, of the claim being asserted.1 87 It is also important to recognize that a decision to deny class certification, unlike a decision granting class certification, does not affect the substantive rights of the plaintiff, defendant, or putative class members.

Until a class is certified, the lawsuit is between the named plaintiff and the defendant; therefore, the rights of putative class members cannot be impacted.188 A decision to grant class certification adds unnamed class members as parties whose rights will be adjudicated, generally without their active participation in the litigation.' 89 As a result, these unnamed class members have due process rights to (1) appropriate notice, (2) an opportunity to "opt-out" of the suit, and (3) adequate representation.1 9 0 Class certification, if improperly granted, may also affect the defendant's substantive rights by requiring the defense of multiple claims in the aggregate without the ability to obtain discovery and present evidence regarding factual and legal defenses applicable to individual class members.' 9' It is for these reasons the Supreme Court has made clear that a class may only be certified after a "rigorous analysis," which generally requires development of the underlying factual basis of the claim

See infra note 193 and accompanying text.

186.

187.

Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974) ("We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action.").

This is not to say, however, that an analysis of the nature and basis of the proposed class claims should not be undertaken in connection with deciding certification. See generally Richard Marcus, Reviving Judicial Gatekeeping ofAggregation: Scrutinizing the Merits on Class Certification, 79 GEO. WASH. L. REV. 324, 326 (2011) (discussing the trial judge's role in analyzing the merits of the case in the context of class certification).

188.

See Standard Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1349 (2013); see also Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979) ("[Rule 23 is] an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.").

189.

See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 810-12 (1985) ("[A]n absent classaction plaintiff is not required to do anything. He may sit back and allow the litigation to run its course. . . .").

190.

Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2558 (2011). The notice and opt-out rights generally relate to a Rule 23(b)(3) class. See id. at 2558-59; Eisen, 417 U.S. at 173.

However, adequate representation is a requirement of all class actions, and notice may, in some situations, be necessary even if not mandated by Rule 23. See, e.g., Simer v. Rios, 661 F.2d 655, 664-67 (7th Cir. 1981).

191.

Pursuant to the Rules Enabling Act, federal procedural rules "shall not abridge, enlarge or modify any substantive right." 28 U.S.C. § 2072(b) (2012). The certification of a class that deprives a defendant of the right to assert defenses to individual class members' claims would violate this mandate. Cf Sw. Ref. Co. v. Bernal, 22 S.W.3d 425, 435 (Tex. 2000) ("[Class actions] must not unduly restrict a party from presenting viable claims or defenses without that party's consent.").

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asserted.1 9 2 The denial of class certification, on the other hand, carries none of these ramifications. In fact, except for the named plaintiff, a decision denying certification does not even create any substantive or procedural bar to putative class members seeking certification of the same claim in another suit. 193

2.

AppropriateStandard Under Rule 23

Rule 23 presents a familiar framework for making the certification decision: the requirements of 23(a) and one section of 23(b) must be satisfied before a class can be certified.1 94 In other words, a plaintiff seeking class certification has the burden of establishing that all the requirements of Rule 23 have been satisfied.1 9 5 Conversely, if any one of the requirements of Rule 23 is not or cannot be met, then certification is not appropriate.

Therefore, a motion to deny class certification need not address all the requirements of Rule 23, but rather must merely show that one of the requirements is not or cannot be satisfied.

It is well recognized that a district court has broad discretion to manage a class case, including the discretion to determine the most appropriate point in the proceedings to address the class-certification question.1 9 6 The district court has the discretion to determine what, if any, discovery is necessary in order to make the class-certification decision.' 9 7 Ultimately, the district court is granted discretion in determining whether to certify a class. 198 For example, the Sixth Circuit has articulated the standard

192.

Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160-61 (1982). In Falcon, the Supreme Court stated that granting certification is proper only "if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied," and that "the class determination generally involves considerations that are 'enmeshed in the factual and legal issues comprising the plaintiffs cause of action."' Id. (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 (1978)). The Supreme Court has never addressed the issue of the appropriate standard in

denying class certification.

193. See StandardFire, 133 S. Ct. at 1349 ("[A] plaintiff who files a proposed class action cannot legally bind members of the proposed class before the class is certified." (citing Smith v.

Bayer Corp., 131 S. Ct. 2368, 2380 (2011))).

194. FED. R. Civ. P. 23(a)-(b). An ascertainable class is an implicit requirement for class certification that must also be met. See supra note I and accompanying text.

195.

Wal-Mart Stores, Inc., 131 S. Ct. at 2551.

196. See Boyce v. Wachovia Sec., LLC, No. 5:09-CV-263-FL, 2010 U.S. Dist. LEXIS 30128, at *23 (E.D.N.C. Feb. 17, 2010) (citing Jiron v. Sperry Rand Corp. (Sperry-Univac), 423 F. Supp. 155, 167 (D. Utah 1975)).

197. See, e.g., Pilgrim v. Universal Health Card, LLC, 660 F.3d 943, 949 (6th Cir. 2011) (noting that a district court can decide if additional discovery is needed to analyze the classcertification question); Kamm v. Cal. City Dev. Co., 509 F.2d 205, 210 (9th Cir. 1975).

198. See Pilgrim, 660 F.3d at 946; Baum v. Great W. Cities, Inc., of N.M., 703 F.2d 1197, 1210 (10th Cir. 1983) ("[C]ertification of a class is within the discretionary powers of the trial

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as follows: "A district court's class-certification decision calls for an exercise of judgment; its use of the proper legal framework does not. So long as the district court applies the correct framework, we review its decision for an abuse of discretion." 1 99 Given the discretion granted to district courts, the question then becomes: how should this discretion be exercised when a defendant files a motion to deny class certification?

It should make no difference whether the motion to deny class certification is filed before discovery or after limited discovery but before the time for class-certification discovery has passed. 200 The justification for an early class-certification decision is that any or additional certification discovery would be "a waste of the parties' resources and judicial resources." 201 A motion to deny certification therefore should set forth the legal and factual reasons why a plaintiff will be unable to satisfy one or more requirements of Rule 23, even with discovery. Any or all of the Rule 23 requirements should be subject to attack. The plaintiff must then show that either the contested requirement is met or that additional specified discovery is needed to address the question properly.202 In other words, as one district court noted: "The plaintiff bears the burden of advancing a prima facie showing that the class action requirements of Federal Rule of Civil Procedure 23 are satisfied or that discovery is likely to produce substantiation of the class allegations."203 court 'and its determination will not be disturbed absent a showing of abuse of discretion."' (quoting Rex v. Owens ex rel. Okla., 585 F.2d432, 436 (10th Cir. 1978))).

199. Pilgrim, 660 F.3d at 946 (affirming a district court's denial of class certification prior to discovery).

200. Based on the author's experience, district courts generally set deadlines for the completion of class discovery and the filing of a motion for class certification. If the period for class discovery has passed, a defendant ordinarily would not move for denial of certification, but rather would wait for a plaintiffs motion for certification.

201. See Boyce, 2010 U.S. Dist. LEXIS 30128, at *24 (quoting Walls v. Wells Fargo Bank, N.A. (In re Walls), 262 B.R. 519, 523 (Bankr. E.D. Cal. 2001)). While beyond the scope of this Article, numerous commentators have addressed the perceived unreasonable costs of discovery.

See, e.g., Kevin J. Lynch, When Staying Discovery Stays Justice: Analyzing Motions to Stay Discovery When a Motion to Dismiss Is Pending, 47 WAKE FOREST L. REv. 71, 74-75 (2012).

202. While not a perfect analogy, the situation is similar to a district court deciding whether a ruling on a motion for summary judgment should be deferred based on the nonmovant's showing under Rule 56(d) that essential facts to respond to the motion are unavailable. The author would add that the analogy becomes closer if there has been no jury demand, and the district court will be the ultimate fact finder at trial. That situation is more analogous since the district court in every instance will make the certification decision, and therefore has more discretion in deciding if additional information will be useful in resolving factual disputes. See, e.g., Compagnie Mar. Marfret v. San Juan Bay Pilots Corp., 532 F. Supp. 2d 369, 375-376 (D.P.R. 2008) (cataloging cases that recognize a district court has discretion in deciding a Rule 56 motion when the district court will also be the ultimate fact finder at trial).

203.

Semenko v. Wendy's Int'l, Inc., No. 2: 12-cv-0836, 2013 U.S. Dist. LEXIS 52582, at *6 (W.D. Pa. Apr. 12, 2013) (emphasis omitted).

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Several courts have similarly noted that a district court faced with an early challenge to class certification must determine whether it is likely that additional facts developed through discovery might change the certification analysis.2 04 If a determination is made that additional discovery would not be helpful, then the district court should decide the motion. If a determination is made that additional discovery is necessary, the district court can defer ruling and order that discovery on the relevant issues proceed.

3.

Application of Standard

The easiest case for an early certification decision is one in which a legal impediment to certification exists, e.g., a proposed multistate class asserting state-law claims where there are material differences in state law.205 Harder cases are ones where a defendant's challenge to certification requires an analysis of the underlying factual basis for the proposed claims.

However, unlike the approach taken by several courts, early class determination may be appropriate even if the decision is not based entirely on a legal impediment. Given the broad discretion granted, the question becomes what may and, perhaps as importantly, should a district court consider when ruling on a motion to deny class certification. a. The District Court Should Not Be Limited to the Facts Alleged in the Complaint As a consequence of reliance on Rule 12 to address a defendant's early challenge to certification, most courts have strictly limited their analysis to the facts alleged in the complaint, giving every benefit of the doubt to the pleader. 206 However, as set forth above, Rule 12 does not provide the

204.

See, e.g., Pilgrim, 660 F.3d at 949. In Pilgrim, the court held that the district court's denial of class certification was based on a legal determination, and that "no proffered or potential factual development offer[ed] any hope of altering that conclusion." Id.; see also Kasalo v. Harris & Harris, Ltd., 656 F.3d 557, 563 (7th Cir. 2011) ("[A district court] need not delay a ruling on certification if it thinks that additional discovery would not be useful in resolving the class determination." (citing WRIGHT ET AL., supra note 80, § 1785.3)). Similarly, in Doninger, the court held that the denial of class certification without discovery is proper where the plaintiff could not show that discovery was "likely to produce persuasive information substantiating the class action allegations." Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1313 (9th Cir. 1997) (citing Hatfield v. Williams, 64 F.R.D. 71, 75 (N.D. Iowa 1974)).

205.

See, e.g., Pilgrim, 660 F.3d at 944-45. Not all courts agree, however, that even this legal issue can be addressed prior to discovery and a motion for certification filed by the plaintiff.

See Nobles v. State Farm Mut. Auto. Ins. Co., Case No. 10-04175-CV-C-NKL, 2012 U.S. Dist.

LEXIS 132318, at *10-11 (W.D. Mo. Sept. 17, 2012).

206.

See, e.g., Graves v. Sw. & Pac. Specialty Fin., Inc., Case No. C 13-1159 SBA, 2013 U.S. Dist. LEXIS 158512, at *12 (N.D. Cal. Nov. 4, 2013) ("The grounds for a motion to strike

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standard to determine whether class certification is appropriate.20 7 Under Rule 23, a district court has the discretion to consider affidavits or documentary evidence submitted by either the plaintiff or the defendant.208 In some circumstances, consideration of evidence outside the pleadings is appropriate even before discovery, as is evidenced by the cases discussed below.

In Wright v. Family Dollar, the district court addressed prediscovery whether a proposed employment class was "permeated by conflicts of interest," and considered an affidavit submitted by the defendant establishing that some putative class members held both managerial and nonmanagerial positions during the proposed class period. 2 09 Given the nature of the plaintiffs allegations, any proposed class member who reported to another class member during the class period would be accusing the latter of unlawful conduct. 2 10 The district court found, therefore, that a conflict of interest among the proposed class precluded certification.211 In Loreto v. Procter & Gamble Co., another district court considered evidence submitted by the defendant showing that an alleged misleading statement about a product did not appear in any of the labeling or advertisements for the product.2 12 Although the plaintiffs argued that discovery would allow them to refute the defendant's evidence in a motion for class certification, the court rejected this contention, stating that the "[p]laintiffs d[id] not

must be readily apparent from the face of the pleading or from materials that may be judicially noticed." (citing In re Toyota Motor Corp., 790 F. Supp. 2d 1152, 1170 (C.D. Cal. 2011))); Nobles, 2012 U.S. Dist. LEXIS 132318, at *4--9; Schafer v. State Farm Fire & Cas. Co., Civil Action No. 06-8262 Section "K"(2), 2008 U.S. Dist. LEXIS 45844, at *8-10 (E.D. La. June I1, 2008) (applying a Rule 12(b)(6) analysis).

207.

See discussionsupra Part Ill.A. 208.

See, e.g., Woodard v. FedEx Freight E., Inc., 250 F.R.D. 178, 182 (M.D. Pa. 2008) ("[A] district court will strike class allegations without permitting discovery or waiting for a certification motion where the complaint and any affidavits clearly demonstrate that the plaintiff cannot meet the requirements for a class action."). Further, there is no requirement that a district court hold a class certification hearing; the only requirement is that the district court receive enough evidence, e.g., by affidavits, documents, or testimony, to make the necessary determinations. See generally WRIGHT ET AL., supra note80, § 1785 (discussing the courts' independent obligation to make a class determination, regardless of whether one of the parties moves for a ruling); Edwards v. Publishers Circulation Fulfillment, Inc., 268 F.R.D. 181, 185 n.l1I (S.D.N.Y. 2010) (citing Marcera v. Chinlund, 565 F.2d 253, 255 (2d Cir. 1977) (per curiam), vacated sub nom. Lombard v. Marcera, 442 U.S. 915 (1979)) (recognizing that Rule 23 does not require an evidentiary hearing).

209.

Wright v. Family Dollar, Inc., No. 10 C 4410, 2010 U.S. Dist. LEXIS 126643, at *6 (N.D. Ill. Nov. 30, 2010).

210.

See id. at *6-7.

211.

Id. at *6.

212.

Loreto v. Procter & Gamble Co., Case No. 1:09-cv-815, 2013 U.S. Dist. LEXIS 162752, at *6-8 (S.D. Ohio Nov. 15, 2013). The alleged statement only appeared on one website for a short period, among numerous other "tips" for staying healthy. Id.

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contest or dispute the facts in evidence or identify any further discovery that could alter" the facts presented by the defendant.2 13 The court found that "further discovery and briefing on the certification issue would simply postpone the inevitable conclusion that the putative class [could not] be certified" because, among other reasons, "there [was] no actionable representation that was uniformly communicated to all or most putative class members."2 14 These courts' consideration of evidence outside the complaint is consistent with the discretion granted to district courts and appears to have led to an early and correct certification determination.

Another case, taking a different approach, highlights why evidence submitted by the defendant should be considered when deciding early challenges to class certification. In Graves v. Southwestern & Pacific Specialty Finance, Inc., the defendant submitted a declaration establishing that all putative class members, other than the named plaintiffs and four unnamed class members, had contracts with the defendant that contained an arbitration clause.215 Based on this evidence, the defendant argued that several Rule 23 requirements, such as numerosity and typicality, could not be met.2 16 The district court refused to consider the declaration, stating that "[tlhe grounds for a motion to strike must be readily apparent from the face of the pleadings or from materials that may be judicially noticed." 2 17 Since the defendant could not support the motion based solely on the allegations in the complaint, the court denied the motion to strike the class allegations, but permitted the defendant to reurge the argument "at the close of discovery or after a motion for certification ha[d] been filed." 2 18 Under Rule 23, this approach is wrong for several reasons. First, the district court apparently felt constrained by the procedural restrictions on a Rule 12 motion and would only consider the allegations in the complaint.2 1 9 Second, the evidence offered by the defendant was basic and highly relevant to the certification decision. If only a handful of potential class members had a contract that did not contain an arbitration clause, the defendant's argument that numerosity and typicality could not be met was well taken. Finally, an alternative and more practical approach would have 213.

Id. at *8-9.

214. Id. at *9-10, *14.

215. Graves v. Sw. & Pac. Specialty Fin., Inc., No. C 13-1159 SBA, 2013 U.S. Dist. LEXIS 158512, at *11 (N.D. Cal. Nov. 4, 2013).

216.

Id. at *11-12.

217.

Id. at *12 (citing In re Toyota Motor Corp., 790 F. Supp. 2d 1152, 1170 (C.D. Cal. 2011); SEC v. Sands, 902 F. Supp. 1149, 1165 (C.D. Cal. 1995), affd sub nom. SEC v. First Pac. Bancorp, 142 F.3d 1186 (9th Cir. 1998)). The district court was addressing a Rule 12(f) motion.

Id. at *6.

218.

Id. at *15.

219.

See id. at *6-8, *12-13.

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been for the district court to allow discovery on the issue of the prevalence of the arbitration provision in the contracts, an issue that would have been straightforward and dispositive on the certification question. Instead, the district court held that even though the "[d]efendant's arguments may ultimately prove to be persuasive," it would have to wait until class discovery was completed to assert the arguments. 2 20 This result was not required by Rule 23 and appeared inconsistent with the mandate that the Federal Rules of Civil Procedure "be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding." 2 2 1 There are other situations in which the consideration of evidence outside the pleadings would be appropriate. In a proposed class action alleging breach of contract, a key consideration is whether the dispute relates to contractual terms that are the same or similar with respect to all proposed class members.222 A defendant should be allowed to present evidence early in a case that the contracts of the proposed class members differ in material respects, and it would be appropriate for the district court to consider the various forms of the contract at issue in making an early determination about whether class certification was possible. Similarly, in a proposed class involving fraud or consumer-protection claims based upon an alleged misrepresentation, the uniformity of the alleged misrepresentation is in most instances an essential requirement for class certification. 223 In such a case, it would be appropriate for a district court, when deciding a motion to deny class certification, to consider evidence

220.

See id. at *14-15.

221.

FED. R. CIv. P. 1.

See, e.g., Sacred Heart Health Sys. v. Humana Mil. Healthcare Servs., Inc., 601 F.3d 222.

1159, 1171 (1Ith Cir. 2010) ("In the first place, claims for breach of contract are peculiarly driven by the terms of the parties' agreement, and common questions rarely will predominate if the relevant terms vary in substance among the contracts."); Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 340, 352 (4th Cir. 1998) (reversing class certification of a breach-ofcontract claim where the class members' contracts contained "materially different contract language").

223.

See FED. R. Civ. P. 23 cmt. subdiv. (b)(3) ("[A] fraud case may be unsuited for treatment as a class action if there was material variation in the representations made or in the kinds or degrees of reliance by the persons to whom they were addressed." (citing Oppenheimer v.

F.J. Young & Co., 144 F.2d 387, 388 (2d Cir. 1944); Miller v. Nat'l City Bank of N.Y., 166 F.2d 723 (2d Cir. 1948))); see also In re LifeUSA Holding Inc., 242 F.3d 136, 150 (3d Cir. 2001) (reversing class certification where claims depended on different representations made to different class members); Sprague v. Gen. Motors Corp., 133 F.3d 388, 399 (6th Cir. 1998) (en banc) (reaching the same conclusion as In re LifeUSA); Bradberry v. John Hancock Mut. Life Ins. Co., 222 F.R.D. 568, 571 (W.D. Tenn. 2004) (listing numerous cases in agreement with the proposition from In re LifeUSA).

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submitted by a defendant regarding what information and materials were actually disseminated to proposed class members.

In many instances, plaintiffs will undoubtedly argue that discovery is needed to verify the accuracy of the information submitted by the defendant. Further, if the defendant is attempting to rely on incomplete or vague assertions of fact, a plaintiff should be entitled to discovery to, for example, obtain evidence as to how many of the proffered form contracts were used or how the alleged false information was disseminated.22 4 However, even in such situations, if the district court found the arguments and initial evidence of the defendant persuasive, it should order only limited discovery to verify the accuracy and completeness of the information supplied by the defendant, or otherwise address reasonable concerns raised by the plaintiff. In this way, a defendant's early motion to deny certification, supported by evidence, can act as a means to focus the court on the key legal and factual issues involved in the proposed class, and provide a road map to limit discovery of the issues critical to certification. b. The District Court Should Consider Other Decisions Addressing Class Certification It would seem obvious that in deciding legal questions, a district court should consider prior opinions addressing similar legal issues. However, in deciding a defendant's challenge to certification prior to discovery, several courts have discounted or refused to consider decisions addressing class certification that were decided based on a plaintiffs motion for class certification filed after discovery.2 25 Such an approach is difficult to understand. If the decisions are based on legal determinations, there is no justification for disregarding such cases. Further, even decisions that were based to some extent on the factual record provide insight into the reason why particular claims can or cannot be certified.

Loreto v. Procter& Gamble Co. is an example of a case where a district court rejected 224. a plaintiffs argument for discovery to rebut evidence submitted by a defendant, apparently because the district court was impressed by the amount and specificity of the evidence offered by that defendant. Loreto v. Procter & Gamble Co., Case No. 1:09-cv-815, 2013 U.S. Dist. LEXIS 162752, at *6-8 (S.D. Ohio Nov. 15, 2013).

225.

See, e.g., Kaminske v. JP Morgan Chase Bank N.A., No. SACV 09-00918 (RNBx), 2010 U.S. Dist. LEXIS 141514, at *14 n.3 (C.D. Cal. May 21, 2010). The court stated that it would be "particularly unfair" to prohibit discovery based on an argument that the case could not be certified, when that argument had been made in cases where "the plaintiffs . .. were given the opportunity to conduct discovery with respect to class certification issues before the district court considered certification." Id.; see also Roberts v. Wyndham Int'l, Inc., Case Nos. 12-CV-5180PSG, 12-CV-5083-PSG, 2012 U.S. Dist. LEXIS 170719, at *21 n.70 (N.D. Cal. Nov. 29, 2012) (distinguishing cases cited by the defendant because they were decided on a motion for certification).

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For example, a defendant can challenge class certification based on the nature of proposed class claims. As noted above, numerous courts have found that a multistate class action asserting state-law claims cannot be certified because the differences in relevant state law make the class unmanageable.226 More broadly, a defendant may argue that the elements of the proposed class claim necessarily require individual evidence from each putative class member.227 An accepted test to determine whether certification is appropriate entails an analysis of the substantive elements of the proposed class claims, the proof necessary to establish those elements, and whether those elements can be tried in a common fashion.22 8 Certification decisions, whether made before or after class discovery, that address the same or similar claims as those in a proposed class action certainly provide useful, and in some instances dispositive, guidance.

A decision by a district court in the Third Circuit provides a good example of how an analysis of the legal requirements of a claim can lead to an early denial of class certification. 229 In Semenko v. Wendy's International, Inc., the plaintiff asserted proposed class claims under the Americans with Disabilities Act (ADA) and the Pennsylvania Human Relations Act (PHRA), arguing that the defendant denied employment and failed to accommodate based on disability. 230 The defendant filed a motion to strike the class allegations, which the district court treated as a motion to deny class certification, arguing that the claims would necessarily require individualized evidence as to "whether [proposed] class members are 'qualified' under the ADA [and PHRA.]" 2 3 1 The district court agreed and based its analysis on other cases in which certification under the ADA was addressed.232 The district court noted that several courts had denied class certification of ADA claims "when the class is defined so broadly that all persons with any disabilities, regardless of requested accommodation or modifications, are included." 233 The district court further noted that in cases 226.

See supra note 81 and accompanying text. But see In re Land Rover LR3 Tire Wear Prods. Liab. Litig., No. MDL 09-2008 AG, 2012 U.S. Dist. LEXIS 163852, at *10-11 (C.D. Cal. Oct. 24, 2012) (refusing to strike nationwide class allegations because the motion was premature).

227.

See, e.g., Ross-Randolf v. Allstate Ins., Civil Action No. DKC 99-3344, 2001 U.S. Dist.

LEXIS 25645, at *21-23 (D. Md. May 11, 2001) (finding that the proposed claims required evidence from each proposed class member).

228.

See Simer v. Rios, 661 F.2d 655, 672 (7th Cir. 1981); In re Yasmin & Yaz Mktg., Case Nos. 3:09-cv-20001-DRH-PMF, 3:09-md-02100-DRH-PMF, MDL No. 2100, 2012 U.S. Dist.

LEXIS 33183, at *69 (S.D. Ill. Mar. 13, 2012).

229.

See Semenko v. Wendy's Int'l, Inc., No. 2: 12-cv-0836, 2013 U.S. Dist. LEXIS 52582, at *29-33 (W.D. Pa. Apr. 12, 2013).

230.

Id. at *1-2.

231.

Id. at *2-3 (second alteration in original).

232.

Id. at *16-23.

233.

Id. at *21-22 (citing Burkett v. USPS, 175 F.R.D. 220, 223-24 (N.D. W. Va. 1997)).

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where ADA claims were certified, there were limitations to the proposed class, such as a common disability or requested accommodation that made certification possible.234 The district court ultimately found that the proposed class could not be certified based on the guidance derived from 235 prior cases.

Consideration of other certification decisions is particularly relevant given the increasing number of class-certification decisions relating to specific types of legal and factual claims. A district court faced with a proposed class action should not consider the case a "clean slate," particularly when a defendant challenges class certification based on legal issues or discrete factual issues gleaned from the existing case law. Rather, the better approach is to determine if the proposed class action is subject to the same problems that led other courts to deny class certification, regardless of the stage of the case when the decision was made. Moreover, prior decisions assist in determining what discovery, if any, may be needed to resolve a defendant's argument that certification is not appropriate.

IV. CONCLUSION The circuit courts generally agree that the propriety of class certification can, in some situations, be addressed at the pleading stage.236 What has been lacking is a consensus on the appropriate procedure to raise such a challenge, and on the standard to use to decide the issue. A review of the cases establishes that the procedure chosen often impacts the legal standard applied. The first step, therefore, is to identify the proper procedure. While many courts have applied Rule 12 to certification challenges at the pleading stage, except in limited circumstances the rule is not applicable. By its terms and application, Rule 12 is designed to address the viability of substantive claims. However, class certification is a procedural determination of whether the requirements of Rule 23 have been met so that multiple parties' claims for relief can be properly combined in one suit. This procedural determination should be made pursuant to Rule 23, which allows for a standard that recognizes the discretion granted to district courts to decide certification. Hopefully, such a procedure will lead to a more consistent approach by federal courts in addressing this issue.

234.

235.

236.

Id. at *22-23 (citing Perdue v. Murphy, 915 N.E.2d 498, 510 (Ind. Ct. App. 2009)).

Id. at *23 (citing Perdue, 915 N.E.2d at 510).

See discussion supra Part 11.

To QUOTE OR NOT TO QUOTE: MAKING THE CASE FOR TEACHING LAW STUDENTS THE ART OF EFFECTIVE QUOTATION IN LEGAL MEMORANDA MAUREEN JOHNSON* I. II.

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Effective Quotation 1. The Merged Quote...........................

300 301 302 302

Maureen Johnson is an Associate Clinical Professor at Loyola Law School, Los * Angeles. Prior to beginning teaching, the author practiced law at Mayer Brown LLP and Kaye Scholer LLP. The author would like to thank all of her colleagues in the skills department at Loyola Law School, Los Angeles, particularly including Assistant Dean Jean Boylan, Director of Legal Writing and Lawyering Skills Professor Cindy Archer, Professor Susan Bakhshian, Professor Robert Brain, and Adjunct Professor Stephanie Williams.

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304 2. The Block Quote................................ ..... 306 3. Avoiding Unnecessary Quotes ..............

D.

Now It's Your Turn! Switching Sides: Challenging Students to Use Quotation to Effectively Present the Law in a Client-FriendlyManner ................. ...... 307

V.

THE NEXT STEP: INTEGRATING EFFECTIVE QUOTATION INTO ...... 308 .....................

THE LEGAL WRITING CURRICULUM

VI.

CONCLUSION

........................................

I.

..... 311

INTRODUCTION

The message is clear. Textbooks, law professors, and even those who don the black robes in our hallowed halls of justice uniformly instruct that lawyers should use quotes "sparingly," if at all. However, even a cursory look at today's briefs-at both the appellate and trial court level-reveals that our top legal scribes do just the opposite. Such scribes rely heavily on quotation when presenting precedential law. This contradiction leaves law students and junior practitioners stuck squarely in the middle. Do they follow what they have been taught in law school? Or do they instead emulate the successful legal writers who have recognized the disconnect between what is taught in law school and how things are done in real life?

There is no reason that our law students or junior practitioners should be placed in that quandary. The message-which is indeed not at all clearneeds to change.

Part II of this Article begins by discussing the historical background giving rise to the current problem. In the dark ages-before notebooks, laptops, or even those newfangled "personal computers"-writing a brief was far different than it is today. A client's future hinged on the thousand or so words that could be banged out on an ancient device called a "typewriter." If a brief was edited, it had to be retyped. The same was true for court opinions. Given these practicalities, both types of legal documents were short, and quotations were sparse.

Part II then fast-forwards to the twenty-first century. Because of Westlaw, LexisNexis, and other online legal research providers, associates writing a brief have countless cases literally at their fingertips. Their research might even be completely in the "cloud"-the online folders available to sort and store retrieved documents. And the judicial clerks tasked with drafting tentative judicial opinions are afforded the same luxury. No longer does a clerk have to trudge off to the library to pull an official reporter off a dusty top shelf. In fact, the use of pinpoint citations and quotes permits judicial clerks to find the exact passage cited in a brief immediately. Once the cited case is found, other embedded links provide a

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portal to a myriad of related material, including both case law and secondary sources.

Not surprisingly, the length, substance, and quality of both briefs and court opinions grew exponentially in the wake of online research. Both litigators and the authors of court opinions began heavily using woven quotes to present the law. Why? Because they could. And because effective use of quotes is far more persuasive than simply saying a legal proposition is so.

Part III of this Article tackles the reasons why many legal educators have not yet changed their pedagogical goals to mirror real life by teaching students to use quotations effectively when explaining precedential law. It is particularly disturbing that some students leave law school without even realizing that the manner they have been taught to write a legal brief differs substantially from what will be expected of them in practice. If it is undisputed that today's top briefs and legal opinions are packed with quotations, and that the art of effective quotation is a carefully honed skilled that is essential to becoming a top legal advocate, why are legal writing professors not teaching that skill as part of our legal writing curriculum? As the great Bard himself, William Shakespeare, might jest: "That is the question."'

Three main causes of this problem are also discussed in Part 1II. The first reason is, as noted above, the standard first-year texts plainly direct that students should either not use quotes or, if quotes are used, they should be used "sparingly." Articles on this topic are largely in accord.2 The second reason-often pointed out in the existing legal texts-is that ineffective use of quotes can detract from a brief by making it seem like the writer is lazy and has simply duplicated (i.e., duped) blocks of scattered law from the online databases. True. But this is a bit like saying apples have no place in a healthy diet because apples could be used to make apple pie. The third reason is that there is a dearth of authority on exactly how legal writing professors should teach students how to use quotes effectively. To bridge this gap, Part IV of this Article sets forth several concrete exercises and techniques to teach effective quotation.

Part V of this Article addresses where to go from here. More particularly, this Part begins the discussion of exactly when and how legal 1.

WILLIAM SHAKESPEARE, HAMLET, act 3, sc. I (emphasis added).

2.

See, e.g., Rebekah Hanley, Notes on Quotes: When and How to Borrow Language, OR. ST. B. BULL., Feb.-Mar. 2011, at 13, 13 ("Legal readers dislike quotations-especially long quotations-so much that they often merely skim them and they sometimes skip them entirely.").

But see Naomi Kogan Dein, And I Quote, CBA REC., Oct. 2006, at 63, 63 (noting that sometimes a quote can "be so dramatic and hard-hitting" that paraphrasing would "not only [be] impotent but also foolhardy"). Notably, Dein is listed as a practitioner, not a law professor. See id.

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writing professors should teach law school students the art of effective quotation. There are two basic approaches. Teaching quotation could be integrated into the traditional first-year legal writing program through baby steps, using the exercises outlined in Part IV. Alternately, first-year writing assignments could be modified to immediately require students to begin reading and analyzing stellar briefs and deconstructing how these briefs effectively use quotation. Under this approach, students would be encouraged to use quotes in even their very first assignments.

II. HISTORICAL BACKGROUND VERSUS PRESENT DAY: THE DRASTIC DIFFERENCE BETWEEN How BRIEFS WERE WRITTEN IN DAYS OF OLD AND How BRIEFS ARE WRITTEN Now

Judge Learned Hand wouldn't just turn over in his grave; he would bolt upright and head straight to the nearest Apple store. The modern day courtroom is a virtual library. This is beyond empowering. Gone are the days when judges had to defer to an advocate's credibility at oral argument.

While there might not be a book in sight, both judges and lawyers stand ready to locate a case on a laptop or an iPad in a split second. One can only imagine a favorite trial court judge talking into a smartwatch and asking: "Siri, what is the most recent case construing the jury instruction for the rule against perpetuities?" But, of course, that is not how it always has been.

Lawyers have always written, but the manner has always been limited by the available instruments. The first persuasive legal memorandums and court opinions were written by a quill pen. 3 Understandably, these documents were very short. Then came the printing press.4 The printing press enabled official reporters to compile and organize legal precedent. In America, official reporters began in 1790 with the Dallas's Reports, which was devoted to United States Supreme Court opinions.' Lawyers soon would be banging out arguments on classic steel-rimmed Remington See John 0. McGinnis & Russell G. Pearce, The Great Disruption: How Machine 3.

Intelligence Will Transform the Role of Lawyers in the Delivery of Legal Services, 82 FORDHAM [for L. REV. 3041, 3056 (2014) ("[L]awyers have always adapted to technological change ... example,] typewriters replaced quill pens .... .").

4.

Johannes Gutenberg is widely credited for the invention of movable type in 1450. See Zack Kertcher & Ainat N. Margalit, Challenges to Authority, Burdens of Legitimization: The Printing Press and the Internet, 8 YALE J.L. & TECH. 1, 16 & n.77 (2005). In terms of communication, it likely was as important an invention to those times as the Internet was to the modem era. As noted by Walter Isaccson, "Gutenberg's printing press . . . cut the cost of transmitting information by a factor of a thousand." WALTER ISAACSON, AMERICAN SKETCHES: GREAT LEADERS, CREATIVE THINKERS, AND HEROES OF A HURRICANE 199 (2009).

5.

See BRIEF MAKING AND THE USE OF LAW BOOKS ed. 1926) [hereinafter BRIEF MAKING].

§ 3,

at 28 (Roger W. Cooley ed., 5th

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keyboards. 6 Later inventions, such as carbon paper, permitted lawyers to make duplicates of their work easily and serve their opponents.'

Ultimately, electronic typewriters with correctable ink and Xerox copiers brought legal advocacy into the early stages of the modern era.8 For purposes of this Article, that modem era began in the 1960s.9 Because of numerous other technological advances, it became routine for both courthouses and law firms to have expansive law libraries that housed all of the official reporters likely to be relevant to the cases litigated.1 0 Still, research was cumbersome. Relevant case law often was found by first consulting legal encyclopedias, treatises, or an annotated version of a statute or code section." The cited authorities would then be retrieved and manually Shephardized.1 2 This rather tedious procedure served to both ensure that the case was still good law and to determine whether the case had been referenced in any subsequent cases.' 3 During the 1950s and 1960s, legal briefs-and court opinions-began to be less brief.1 4 This was likely due, in part, to widespread dissemination of publications by legal legends, such as Bernard Witkin, who were

6.

In America, a patent for a "typographer" was granted to William A. Burt in 1829.

William G. Le Duc, Genesis ofthe Typewriter, I MINN. HIST. BULL. 264, 267 n.I (1916). In 1874, Remington & Sons began mass production of the classic "Sholes & Glidden" typewriter. See MICHAEL H. ADLER, THE WRITING MACHINE: A HISTORY OF THE TYPEWRITER 172 (1973); PAUL LIPPMAN, AMERICAN TYPEWRITERS: A COLLECTOR'S ENCYCLOPEDIA 184 (1992). By at

least 1926, "most states" required that briefs be typewritten. See BRIEF MAKING, supra note 5, § 11, at 446.

7.

See William T. Braithwaite, How Is Technology Affecting the Practice and Profession ofLaw?, 22 TEX. TECH L. REV. 1113, 1120 (1991).

8.

The Xerox 914, the first plain paper copier, revolutionized the business world when it was released in 1959. See EVA HEMMUNGS WIRTtN, No TRESPASSING: AUTHORSHIP, INTELLECTUAL PROPERTY RIGHTS, AND THE BOUNDARIES OF GLOBALIZATION 61-63 (2004).

Significantly, "[tlhe number of copies made annually in the U.S. went from some 20 million in the mid-1950s, to 9.5 billion in 1964, and 14 billion two years later." Id. at 64 (emphasis added).

9.

This time frame is chosen because of the author's ability to conduct minimal online research of opinions and briefs.

10.

See Alvin M. Podboy, The Shifting Sands of Legal Research: Power to the People, 31 TEX. TECH L. REV. 1167, 1192 (2000); see also Ellie Margolis & Kristen E. Murray, Say Goodbye to the Books: Information Literacy as the New Legal Research Paradigm,38 U. DAYTON L. REV. 117, 117-18 (2012). See generally Podboy, supra (giving a comprehensive discussion of how legal research has changed in the modem era).

11.

See Podboy,supra note 10, at 1170, 1178.

12.

See id. at 1170.

13.

Id.; see also HERBERT MONTE LEVY, HOW TO HANDLE AN APPEAL

§

6.21, at 605-06

(1968) (describing the "large law office" approach to researching issues for an appellate brief, which could entail an army ofjunior associates reviewing discrete issues).

Ultimately, in 1980, the Supreme Court would place page limitations on briefs.

14.

STEPHEN M. SHAPIRO ET AL., SUPREME COURT PRACTICE

§

6.14(a), at 419 (10th ed. 2013). In

2007, page limitations were replaced by word count limitations. Id. infra note 22 and accompanying text.

§ 6.14(c),

at 420-21; see also

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dedicated to truly mining all of the available case law and then setting forth the applicable law in treatises or encyclopedias.' 5 Lawyers eagerly relied upon such legal stalwarts like Witkin, who had essentially done their research for them. While the amount of authorities listed in these secondary sources paled in comparison to the authorities that can be found today, 16 they still were far in excess of the number of cases that were commonly known as relevant to a particular legal proposition in prior decades.'

Additionally, using the Shepardizing method discussed above,' 8 diligent lawyers could find even more case law for potential inclusion in their legal memorandums.19 Still, during this time lawyers were hog-tied by modem standards in terms of the available means to draft a legal brief. While correctable ink and electronic typewriters certainly lightened this chore, it was still difficult to edit a brief in the manner that we are familiar with today. In large firms, briefs were often dictated and then marked up by hand for manual revision by a word processing department.20 If a lawyer wanted to quote from a case, the lawyer physically had to pull the official reporter from the library.2 If a lawyer wanted to quote from a variety of cases, the lawyer's desk would be piled high with numerous volumes of official reporters or Xerox copies of cases that had been manually printed. As a practical matter, given the shared use of libraries, the particular volume needed was not always available. Judicial clerks faced these same hurdles. Accordingly, it is not surprising that both briefs and court opinions during this early era were relatively short in length and use of quotation.22

15.

See Adam Badawi, Introduction to the Bernard Witkin Oral History, 4 CAL. SUP. CT. HIST. SoC'y Y.B. 95, 102-03 (1998-1999). Notably, Witkin's famous summaries of the law initially only set forth "one case citation for each point of law." Id. Coverage was greatly expanded in later editions. Id. In fact, as Badavi notes, the "telltale sign of Witkin disagreeing with a line of precedent was a string of citations to contrary opinions." Id. at 100. Ultimately, Witkin published several different sets of treatises covering various areas of California law. Id. at 103 ("Sections of the original summary which Witkin dealt with in twenty pages now became exploded into thousand-page-plus works, continuously updated by Witkin to take account of relevant appellate decisions."). So revered was Witkin that he became known as the "Blackstone of Berkeley." Id. 16.

See Podboy, supra note 10, at 1192.

See Badawi, supra note 15, at 103.

17.

18.

See supra text accompanying notes 11-12.

19.

See Tobe Liebert, Shepard's & KeyCite: The New Generation of Citators, EXPERIENCE, Fall 1999, at 28, 28. Manual Shepardizing has since been replaced by automatic online performance of such tasks, such as that done through Westlaw's KeyCite. See id.

See Braithwaite,supra note 7, at 1132, 1150.

20.

21.

Seeid.at1119.

22.

From 1950 until 1971, the median word length of Supreme Court opinions largely hovered around the 2,500 mark. See Ryan C. Black & James F. Spriggs II, An EmpiricalAnalysis of the Length of US. Supreme Court Opinions,45 Hous. L. REv. 621, 640 fig.4 (2008). A cursory

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Everything changed with the click of a mouse through the introduction of the personal computer. Soon word processing software was specifically designed for drafting legal pleadings.2 3 WordPerfect, which featured automatic line numbering, debuted in 1986.24 Text was both movable and storable. Law firms quickly amassed databases for legal briefs and research memorandums.25 In terms of quotation, a writer could potentially set forth a variety of quotations and then merge them together with the writer's own words until they fit perfectly. Editing was a breeze. Even at the trial court level, practitioners could potentially copy the style of an eloquently written appellate opinion. Legal documents that would have taken several painstaking days to create now took only hours.

And then came the Internet. Thanks to Steve Jobs and Bill Gates, among others, lawyers could transmit their work to others online. Law firms with multiple offices could easily share their databases and resources, including databases dedicated to legal briefs and research memorandums. 2 6 It was not long until legal research itself could easily be done online.27 Even in the early days, Westlaw and LexisNexis permitted users to browse thousands of cases in numerous jurisdictions, filtered by Boolean terms and connectors searches. 2 8 Both Westlaw and LexisNexis began offering dial-up access for legal research in the early-to-mid 1970s. 2 9 Research was done at

review of this era's briefs that are available online certainly suggests they are far shorter than those filed today. Notably, in 1960, a leading treatise strongly urged practitioners to err on the side of brevity in drafting petitions for review. See ROBERT L. STERN & EUGENE GRESSMAN, SUPREME COURT PRACTICE 181 (1950). As plainly put by Stern and Gressman: "THE MOST IMPORTANT THING TO REMEMBER IS TO KEEP THE PETITION ...

SHORT ...

In some cases, a petition less than ten pages long (excluding appendix) is sufficient. In most cases, no more than twenty pages should be enough. Rarely should thirty pages be exceeded." Id. In a footnote, this treatise further noted that the instruction to keep the petition short was "put in capital letters at

the suggestion of several Justices of the Supreme Court." Id. at 181 n.21. A second footnote set forth a handful of cases where the Supreme Court had "denied petitions because they were too long." Id. at 181 & n.22 (citing Zap v. United States, 326 U.S. 777, 802 (1945), vacated 326 U.S. 802 (1946); Kennemer v. Billington, 323 U.S. 709, 709 (1944); Humble Oil & Ref, Co. v.

Campbell, 292 U.S. 648, 648 (1934); Tiger v. Lozier, 275 U.S. 496, 496 (1927) (per curiam); Brown v. Krietmeyer, 275 U.S. 496, 496-97 (1927) (per curiam); Kunglig Jamvagsstyrelsen v.

Nat'l City Bank of N.Y., 275 U.S. 497, 497-98 (1927) (per curiam) (noting that the brief filed was 196 pages long, including a thirty-six-page statement of facts)).

23.

See Braithwaite, supra note 7, at 1123.

24.

See Donald S. Higgins, Line Numberingfor IBM DisplayWrite 3 Legal Documents, 12

ACM SIGSMALL/PC NOTES, Nov. 1986, at 27, 27-28.

See Braithwaite,supra note 7, at 1143.

25.

26.

See Ezra Dodd Church, Note, Technological Conservatism: How Information Technology Preventsthe Lawfrom Changing, 83 TEX. L. REv. 561, 585-86 (2004).

27.

28.

29.

See id. at 588.

See Podboy, supra note 10, at 1174.

Id at 1171.

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dedicated terminals. 30 By September 1997, access to LexisNexis could be 31 made from personal computers connected to the Internet. Widespread use of these online legal research providers took hold no later than the early 2000S 3 2 when Internet access became readily available through broadband service.33 In time, Westlaw and LexisNexis became compatible with word processing software, which made it possible to simply cut and paste passages from court opinions.34 Law firms and courts handsomely paid for the use of these online services. 35 There can be no doubt that the Internet has heavily impacted the manner in which briefs and opinions are written at both the appellate and trial court level. In the mid-1970s, after dial-up service through dedicated terminals became available, the average length of a majority opinion from the U.S. Supreme Court dramatically rose from a previous and steady high of approximately 2,500 words to a whopping 5,000 words.3 6 This likely was fueled in part both by the availability of online research and by the fact that there simply were far more cases and secondary sources available from which to draw legal arguments. Even at the trial court level, judicial opinions seemed to become longer, more complex, and more reliant on quotes. Perhaps sparked by the widespread availability of unpublished opinions, federal appellate court rules were modified to ensure that all judicial opinions were citable, even if the opinion was not certified for publication in an official reporter.3 ' Nor can it be doubted that stellar briefs 30.

See Ronald D. Coleman, Bloggers, Journalists, Reporting, and Privilege,N.Y. ST. B.A. J., Nov.-Dec. 2013, at 18, 19.

31.

Company History, LEXISNEXIS, http://www.lexisnexis.com/presscenter/mediakit/histo ry.asp (last visited Feb. 2, 2015).

32.

See Richard A. Danner, Contemporary and Future Directions in American Legal Research: Responding to the Threat of the Available, 31 INT'L J. LEGAL INFO. 179, 181 (2003) (discussing the Internet as the primary means of accessing LexisNexis and Westlaw by late 2002).

See JED KOLKO, PUB. POLICY INST. OF CAL, DOES BROADBAND BOOST LOCAL 33.

ECONOMIC DEVELOPMENT 14 (2010).

See Church, supra note 26, at 585.

34.

35.

See id. at 584.

36.

See Black & Spriggs, supra note 22, at 640 fig.4. There are other purported causes for the upsurge, including the theory that this was caused by the Supreme Court Justices' increased reliance on law clerks. Id. at 638 & n.51. Notably, Black and Spriggs could not confirm that theory due in large part to a "host of other factors that changed in tandem with the Justices' use of law clerks." Id. at 640-41. These other factors specifically included "changes in technology (such as electronic access to cases and word processing programs)." Id. at 641. It certainly can and should be assumed that law clerks naturally gravitated toward computer technology, specifically including the ability to pull cases from online services.

37.

See id. at 641-42. But see Robert Gardner, Toward Shorter Opinions, 55 CAL. ST. B.J. 240, 240 (1980) (exclaiming "Balderdash!" at the well-accepted argument that longer court opinions are a result of greater complexity of law).

38.

See Lawrence Friedman, The Supreme Court Recognizes the Availability of Unpublished Decisions, BOSTON B.J., Jan.-Feb. 2007, at 12, 12.

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at both the trial and appellate levels now heavily use quotations to explain broader principles of law. This can easily be seen by even a quick stroll through either the Westlaw or LexisNexis appellate or trial court databases.39 As noted in Part II, the use of quotes in both legal briefs and judicial opinions is on the rise for one very simple reason: legal scribes are now fully armed with the tools to do so. 4 0 Given the importance of stare decisis, there simply is no reason not to include a quote that makes it clear that the court must rule in your favor. Put simply, there is no better way to convey to a reader that a case truly supports your position than to let the case speak for itself.

In the future, the use of quotations may be even more important than it is today. Currently, judges typically have a computer of some sort at their bench while hearing oral argument or presiding over a trial. 4 ' This empowers a judge to look up key cases and see exactly what they say. The use of quotes and pinpoint citations assists in this process as a judge can potentially perform a "Control F" search to arrive at the exact passage cited in a brief. Of course, because this method still takes longer than a nanosecond, it can interrupt the flow of an oral argument. Presumably, not all judges will take the time to retrieve the cited authority. But it does not have to take more than a nanosecond, and likely will not in the future.

Although not yet commonplace, more and more courts in all jurisdictions require electronic submission of briefs.42 Notably, nearly all

See, e.g., Brief for Respondents, Hollingsworth v. Perry, 133 S. Ct. 2652 (2013) (No. 39.

12-144) (filing made by David Boies (Boies, Schiller & Flexner LLP) and Theodore B. Olson (Gibson, Dunn & Crutcher LLP)); Brief for Petitioners, Adoptive Couple v. Baby Girl, 133 S. Ct. 2552 (2013) (No. 12-399) (filing made by Mark Fiddler (Fiddler Law Office, P.A.) and Lisa S. Blatt (Arnold & Porter LLP)); Brief for Petitioner, AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (No. 09-893) (filing made by Donald Falk (Mayer Brown LLP)); Memorandum of Law in Support of Plaintiff's Motion for Summary Judgment, Windsor v. United States, 833 F. Supp. 2d 394 (S.D.N.Y.) (No. 10 Civ. 8435 (BSJ) (JCF)) (filing made by Roberta A. Kaplan and Andrew J. Ehrlich (Paul, Weiss, Rifkind, Wharton & Garrison LLP)), aff'd, 669 F.3d 169 (2d. Cir. 2012), af'd, 133 S. Ct. 2675 (2013).

40.

See supra Part II. 41.

See, e.g., Hon. Herbert B. Dixon, Jr., The Evolution of a High-Technology Courtroom, NAT'L CTR. FOR STATE COURTS (2011), http://www.ncsc.org/sitecore/content/microsites/futuretrends-201 1/home/Technology/1-4-Evolution-of-high-tech-courtroom.aspx.

42.

See Molly Barker Gilligan, Creating Digital Paper with PDFManipulation Software, 28 ME. B.J. 184, 184 (2013) (predicting that the expansion of electronic submissions will require all attorneys to work with PDFs). Note also that even those courts that have yet done so can still be availed of electronic versions by manually scanning briefs in a readable PDF format. See Maria Perez Crist, The E-Brief Legal Writing for an Online World, 33 N.M. L. REv. 49, 61 (2003) (discussing both the evolution of e-submissions and the advantage of including hyperlinks).

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federal courts require electronic submission. 43 In this author's experience, electronic submission enables the judge to have a dual monitor or split screen setup that displays each of the competing briefs. If the briefs contain embedded hyperlinks to Westlaw or LexisNexis, a judge can click on the hyperlink and instantly pull up the case. In fact, the hyperlinks are set up to take the reader to the exact page of a pinpoint cite. It is likely that Westlaw and LexisNexis will further fine-tune these hyperlinks to permit a jump that goes directly to the quoted text. Armed with this technology, a judge proficient in Westlaw or LexisNexis could easily check citing references and perform any number of other quick searches for related content.

Even if it takes awhile for all judges to cozy up to the idea of "surfing the net" in open court, this author's understanding is that clicking on hyperlinks in competing briefs is exactly how such briefs are read by the judicial clerks drafting tentative opinions. That certainly is not going to change. Given that reality, it would be foolish for a lawyer to miss the opportunity to use a quote that instantly brings the clerk to the exact passage the lawyer believes supports a legal argument. It should be noted that this can enable clerks to easily check whether an attorney has omitted a key phrase or cited a quote out of context. But that does not detract from the extraordinary advantage given to a skilled lawyer who knows how to accurately and persuasively use quotations to ground and support legal arguments. Effective use of quotes in a brief also enables the clerk to cut and paste from a brief directly into the tentative opinion the clerk is drafting for the court. Of course, no one would ever call out a court for having done so. 44 Nor can it likely be said that this practice is new. It is just made profoundly easier in the modem era.

As noted above, if it is undisputed that mastering the art of effective quotation is essential to becoming a top legal advocate, why are legal writing professors not teaching that skill as part of their legal writing courses? 45 As discussed below, there are three main reasons why effective 43.

JUDGE DAVID HITTNER, RUTTER PRACTICE GROUP GUIDE: FEDERAL CIVIL PROCEDURE BEFORE TRIAL-5TH CIRCUIT EDITION §§ 12:87.5-7, at 12-32 (William A. Rutter et

al. eds., 2011).

44. This unwritten rule occasionally is broken, such as when Professor Stephen Bainbridge commented on the Supreme Court's ruling in United States v. O'Hagan, 521 U.S. 642 (1997). See Rodney D. Chrisman, Stoneridge v. Scientific-Atlanta: Do Section 10(b) and Rule l0b-5 Require a Misstatement or Omission?, 26 QUINNIPIAC L. REV. 839, 898 n.343 (2008). Professor Bainbridge purportedly described the decision "as a cut and paste pot job, where [Justice Ginsburg] clipped out key provisions of the . . . solicitor general's brief, reworded a few of them, but for the most part quoted it." Id. (alterations in original) (internal quotation marks omitted).

Professor Bainbridge purportedly further quipped, "I assume one of the clerks called up the [Solicitor General's] office and said, 'it's very nice to have this printed brief, but we need the word doc copy, you know, so we can do some cutting and pasting."' Id. 45. See supra Part I.

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quotation has not yet made its way into the typical legal writing curriculum. 46 III. IF IT AIN'T BROKE, DON'T Fix IT: UNDERSTANDING THE REASONS LEGAL WRITING PROFESSORS TYPICALLY Do NOT TEACH EFFECTIVE QUOTATION AS PART OF THEIR LEGAL WRITING CURRICULUM

The inclusion of practical skills courses in law school curricula has one very practical purpose: preparing students for practice. Implicit in this concept is that students will be ready to practice in today's world, not the world that existed over a half century ago. Why, then, do legal writing professors balk at the idea of teaching students how to write in the style of a modem-day practitioner? In part, the resistance to change can be summed up by the pop culture phrase: "If it ain't broke, don't fix it." 4 7 The naysayers have a point. Law schools have been churning out students for decades who go on to write stellar trial and appellate briefs, albeit in a style far different from the style they learned in law school.

Cream rises to the top. Students figure out the art of effective quotation on their own. And once they are hired at a law firm, this skill will either be taught or honed by a supervising attorney. Why should anything change?

There are several obvious problems with reliance on the "if it ain't broke, don't fix it" model. Take the ninety-three-year-old water pipe that recently burst in Los Angeles during one of the worst droughts in decades.

Millions of gallons of water were lost. 49 UCLA was literally under water and Sunset Boulevard, a major traffic artery, was shut down for days.so In hindsight, the wise move would have been to replace the antiquated piping prior to it causing chaos and millions of dollars in damages. In other words, even if it technically was not "broke," it should have been "fixed."

46.

See infra Part Il.A-C. 47.

The popular phrase is attributed to the late Bert Lance, who served as an advisor under President Jimmy Carter. Robert D. Hershey, Jr., Bert Lance, CarterAdvisor, Dies at 82, N.Y. TIMES, Aug. 15, 2013, http://www.nytimes.com/2013/08/16/us/politics/bert-lance-carter-adviserdies-at-82.html. The late Heath Ledger uttered a cousin of this quote in Brokeback Mountain: "If you can't fix it . . you gotta stand it." See BROKEBACK MOUNTAIN (River Road Features & Good Machine 2005). Of course, as this Article postulates, the problem certainly can be fixed.

48.

Holly Yan & Steve Almasy, Los Angeles Water Main Break Floods Sunset Boulevard, UCLA Campus, CNN, http://www.cnn.con2014/07/29/us/california-ucla-water-mainbreak/index.html. Substantial damage was done to a recent $132 million renovation to UCLA's "iconic" Pauley Pavilion athletic center (last updated July 30, 2014, 10:35 AM EDT). See Chris Woodyard, Water, Water Everywhere: UCLA Cleans Upfrom Main Break, USA TODAY (July 30, 2014, 12:36 PM EDT), http://www.usatoday.com/story/news/nation/2014/07/29/water-mainbreak-ucla/13342473.

49.

Yan & Almasy, supra note 48.

50.

Id.

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Nor can it be ignored that a problem apparently already exists with the manner legal writing professors teach students how to write briefs. It is confusing to send a mixed message to students in skills classes about what is expected of them in private practice. Unless students have learned effective quotation on their own, students will leave law school ill-equipped at a core skill. This is particularly troublesome in a weak job market. Many law firms are no longer willing to spend countless hours teaching recent graduates how to write a brief.5 1 These law firms want to hire graduates who are practice ready.52 It is equally important that law schools prepare solo practitioners to write in a professional style in order for them to effectively compete with briefs written by their adversaries.

To address this problem, this Part discusses the three main reasons why legal writing professors do not yet teach effective quotation in their legal writing curriculum. 3 Part IV then sets forth concrete examples of exercises and teaching techniques that could change all of this.54 A.

Cause Number One: The Textbooks Availablefor First-Year Writing Courses Uniformly Direct that Students Do Not Use Quotes, or Do So Only "Sparingly"

Book adoptions are one of the most important decisions legal writing professors make. What venerable text will they place in the hands of the next generation of lawyers? Which authors can be trusted to impart the secrets of success in both the real world and academia? The big names instantly jump to mind: Coughlin, Enquist, Neumann, Shapo, and Sirico, among others. There are so many choices, but not when it comes to teaching how to use quotations effectively. Many professors commonly used texts that bash the use of quotations. Quotations are characterized as distasteful as putting ketchup on ice cream. Students are empathically directed to stay away. They either should not use quotations or-if they must-they should do so sparingly. 16

51.

See Aliza B. Kaplan & Kathleen Darvil, Think [and Practice] Like a Lawyer: Legal Researchfor the New Millennials, 8 LEGAL COMM. & RHETORIC: JAWLD 153, 157 (2011).

52.

See id.

53.

See infra Part IlA-C. 54.

See infra Part IV.A-D. 55.

See Legal Writing & Drafting Books, SUNY BUFFALO L. SCH., http://lawlib.buffalo.libguides.com/content.php?pid=l19945&sid=1032848 (last updated Jan. 23, 2015) (listing texts dealing with legal writing). The authors of these books have been listed alphabetically. Listing off these names is not intended to imply that there are not numerous others who have authored significant texts used in first-year legal writing programs.

56.

See, e.g., RICHARD K. NEUMANN, JR. & SHEILA SIMON, LEGAL WRITING

(2d ed. 2011).

§

24.2, at 181

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By way of example, in Writing and Analysis in the Law, a first-year writing text used in law schools since its first publication in 1989, a bolded heading plainly states: "Use Quotations Sparingly." 57 A Lawyer Writes 58 A follows suit with a bolded heading that reads: "Quote sparingly." similar bolded heading appears in Legal Writing: "Quote Sparingly or Not at All." 59 Although a bit less ironclad than the above, The Legal Writing Handbook, includes a bolded heading that directs: "Don't Overuse Quotations." 60 Similarly, the famed legal text Legal Writing and Other Lawyering Skills states: "Avoid the Use of Too Many Quotations From Legal Authorities."' While each of these texts permits limited direct quotations from statutes, 62 each of these texts makes clear that there should 63 be at most only very limited use of quotations from judicial opinions.

Articles are largely in accord.M This Article does not fault any of the great masters in our legal writing profession. Let's face it, whether you are a professor or a practitioner, teaching legal writing to a novice is not easy. Many of the traditional legal writing texts have indeed effectively taught the basics to first-year law students for decades. The point this Article makes is that unless and until the available texts end their condemnation of the use of quotations, legal writing professors using such texts are going to refrain from teaching effective quotation in their legal writing classes.

Put simply, legal writing professors instinctively are not going to want to contradict their main texts by directing that students do the exact opposite of what the main text instructs. It is therefore not surprising that effective quotation generally is not currently taught in first-year or even upper-division writing courses. As set forth below, there are at least two additional reasons why legal writing professors, in general, have not changed their pedagogical goals to better prepare students for practice by teaching such students effective quotation. 65

57.

58.

HELENE S. SHAPO ET AL., WRITING AND ANALYSIS IN THE LAW 178 (4th ed. 1999).

CHRISTINE COUGHLIN ET AL., A LAWYER WRITES: A PRACTICAL GUIDE TO LEGAL

ANALYSIS 99 (2d ed. 2013).

NEUMANN & SIMON,, supra note 56, at 181-82.

59.

60.

LAUREL CURRIE OATES ET AL., THE LEGAL WRITING HANDBOOK:

RESEARCH,

ANALYSIS, AND WRITING § 23.2.3, at 648 (1993). While Oates and Enquist follow the pack in cautioning against quotes, these authors do recognize there is room for disagreement. See id. § 23.2.3, at 650. Still, the instruction given to students implies that there should be no more than a few quotations to case law. See id.

61.

NANCY L. SCHULTZ & LOUIS J. SIRICO, JR., LEGAL WRITING AND OTHER LAWYERING

SKILLS 178 (4th ed. 2004).

E.g., OATES ET AL., supra note 60, at 649.

62.

E.g., COUGHLIN ET AL., supra note 58, at 99.

63.

See sources cited supra note 2.

64.

See infra Part 111.B-C. 65.

296 B.

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Cause Number Two: Poor Use of Quotes Disrupts the Flow of a Brief and Can Signal that the Writer Is Lazy

It is the climactic scene in the Hollywood classic, A Few Good Men. Tom Cruise squares off against a taut-faced Jack Nicholson in a military courtroom. The young JAG attorney pushes for an admission that two lowranking soldiers were ordered to give another soldier a "Code Red" assault that resulted in that soldier's death. The tension escalates. The two men furiously begin screaming at each other. Nicholson cracks. As his face contorts in anger, he bellows: "You want answers? . .

You want answers? . . . You can't handle the truth!"66 Later that night, the scene plays out again in your dreams. But instead of Cruise and Nicholson, it's a legal writing professor in her legal writing classroom. She is surrounded by her first-year students who have pulled a dozen or so very well-written briefs penned by her old law firm. They confront her with the fact that each of the briefs heavily uses quotations.

Why has she taught them to do just the opposite? In a passion-fueled burst worthy of an Academy Award, she shouts out: "You want to quote? You want to quote? You can't handle the quotation!"

You wake up in a cold sweat. After thanking your lucky asteroids that this was all a dream, you think back to the ending of A Few Good Men. Jack Nicholson gets hauled away by the military police, presumably to a penitentiary.67 It turns out the world certainly can-and should-handle the truth. Your mind wanders back to those students in your dream who innocently inquired as to why they were told to avoid quotation when that simply is not how it works in real life. Could these students handle effective quotation? Could that process begin now?

A certain number of traditional first-year writing texts seems to answer this question by pointing to the many pitfalls of ineffective use of quotation.

In particular, there are two main reasons proffered as to why students should not use quotations. These texts caution that poor use of quotations not only tend to interrupt the flow of the read but also can signal that the writer has not quite done her homework. 8 As put by Shapo, Walter, and 66.

A FEw GOOD MEN (Castle Rock Entertainment 1992). A Few Good Men is a 1992 film starring Tom Cruise as Lt. Daniel Kaffee and Jack Nicholson as Colonel Nathan R. Jessup. Id. Nicholson was nominated for an Academy Award for "Actor in a Supporting Role." The 65th Academy Awards, 1993, OSCARS, http://www.oscars.org/oscars/ceremonies/1993 (last visited Feb. 28, 2015). The film was also nominated in the "Best Picture" category. Id. A Few Good Men also took 14th place on the American Bar Association's list of the Top 25 Greatest Legal Movies of all time. Richard Brust, The Top 25 Greatest Legal Movies: Tales of Lawyers We've Loved and Loathed, A.B.A. J., Aug. 2008, at 38, 43.

67.

See A FEW GOOD MEN, supra note 66.

68.

See, e.g., SHAPO ET AL., supra note 57, at 178.

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Fajans: "[H]eavy reliance on quotations is frequently a signal of adequate research but inadequate analysis." 69 Coughlin, Rocklin, and Patrick similarly caution that "[t]oo many quotations imply that either the writer either did not understand the law well enough, or worse, the writer was too lazy or timid to explain it well." 7 0 The result often can be a "disjointed" presentation of the law.n This author does not disagree with the above observations regarding ineffective use of quotation. In fact, this author both agrees and expands upon that argument. Students and practitioners can and do "dupe and dump" from Westlaw or LexisNexis. 72 A telltale sign is when the writer fails to clean up the formatting from the online databases. This certainly creates the impression that the writer simply does not care. Even wellintentioned students can have difficulties. One example is when a student falls in love with a particularly eloquent quote, but does not quite know how to weave the quote into the wording of a brief.73 The result is akin to trying to fit a square peg into a round hole. Other students might fall into the trap of cutting into quotes too early or overusing brackets to the point where a sentence becomes hard to read.74 No doubt, there are countless ways where use of quotations can go wrong. But isn't that the exact reason why legal writing professors should teach law students how to do it right?

As noted in Part I, directing that students should not use quotation because some students do so poorly is a bit like saying that apples are bad because some people will use apples to make apple pie. The caveat is

69.

Id. 70.

COUGHLIN ET AL., supra note 58, at 99.

71.

SHAPO ET AL., supra note 57, at 178. One author, Linda H. Edwards, offers another reason for instructing first-year students not to use quotes in working drafts. In her book, Legal Writing and Analysis, Edwards explains that the prohibition is to ensure that students learn to analyze legal authority, as opposed to simply copying the authority into a legal memorandum.

LINDA H. EDWARDS, LEGAL WRITING AND ANALYSIs 268 (3d ed. 2011). However, in terms of editing the final product, Edwards again advises that students should "minimize" the use of quotation. Id. 72.

"Dupe and dumps" are discussed below in Part IV, as are all of the other examples set forth in this paragraph, such as "trying to fit a square peg into a round hole." See discussion infra Part IV.C. 73.

See Quotation Incorporation, KENT http://www.kentlaw.edu/academics/lrw/grinker/LwtaQuotationIncorporation.htm (last visited Feb. 27, 2015) (discussing the preferred practice of combining paraphrasing with a quotation, rather than letting the quote stand as its own sentence).

74.

See David Marsh, We Know Who [Johnny] Depp Is, Thank You: How to Use Square Brackets, and How Not to [Over] Use Them, GUARDIAN (Nov. 11, 2011, 9:46 EST), http://www.theguardian.com/media/mind-your-language/20 11/nov/1I/mind-your-languagesquare-brackets (highlighting the difficulty in reading a sentence with too many brackets).

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overinclusive." Apples are good for you. And effective quotation is the stuff that makes for a good brief.

Of course, this begs the question: Where does a legal writing professor find the resources to teach students effective quotation? That leads to a third reason why law professors are reluctant to include effective quotation in their legal writing playbook. Perhaps because use of quotations has been so strongly condemned, there simply is a dearth of authority in this area.

CauseNumber Three: There Is a Dearth ofAuthority ExplainingHow to Teach Effective Quotation to Law Students or JuniorPractitioners

C.

The Art of Effective Quotation, by Judge Chamberlain Haller. A Stepby-Step Guide to Teaching Law Students How to Quote Like a Top Legal Scribe, by Constance Riley. Quoting Your Way to Victory, by Vincent L. Gambini. What do these three texts have in common? They do not exist.76 A review of the titles currently offered by the major publishing houses demonstrates that there is not a single title referencing effective quotation in legal writing. In fact, so uncovered is this area of legal writing that this author could not even find a YouTube video or a Wikipedia article on the subject. Now that is a dearth of authority.

In terms of other legal texts, including those aimed at practitioners, there is one that offers a few practical tips regarding quotation. Point Made,

by Ross Guberman, has five small chapters, together totaling fifteen pages, which present tips for including quotes in legal briefs.7 Notably, Point Made largely uses examples from actual briefs filed in different courts to illustrate points about legal writing.78 Thus, it is not surprising that quotes do not quite get the same bad rap in this book as they do in traditional legal texts. In fact, many of the examples regarding the presentation of the law that are set forth in Point Made do indeed contain heavy-but effectiveuse of quotation.79 Point Made also makes an excellent point regarding the

75.

See supra Part 1.

76.

There is one other commonality. Each of the purported authors is a character in the 1992 classic legal comedy, My Cousin Vinny. MY COUSIN VINNY (20th Century Fox, Palo Vista Productions & Peter V. Miller Investment Corp. 1992). My Cousin Vinny took third place on the American Bar Association's list of the top 25 legal movies, beaten out only by 12 Angry Men and To Kill A Mockingbird. Brust, supra note 66, at 51, 39-40.

77.

See Ross GUBERMAN,

POINT MADE: How TO WRITE LIKE THE NATION'S TOP

ADVOCATES 133-34, 171-79, 303-06 (2d ed. 2014).

78.

See, e.g., id. at 171 (quoting Brief of Amicus Curiae, Products Liability Advisory Council, Inc. in Support of Appellant at 5-6, Jimenez v. DaimlerChrysler Corp., 269 F.3d 439 (4th Cir. 2001) (No. 00-1021)) (illustrating a specific technique of legal writing by looking at a brief written by Paul Clement).

79.

See, e.g., id. at 133-34 (examining various briefs that use quotations to explain the applicable law).

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'

usual advice to stay away from the ever-maligned "block" quotation.so As aptly put by Guberman: "[A]ll this hostility aside, rare is the motion or brief that doesn't contain at least one block quotation, and yes, sometimes dozens." 8 Still, the fact remains that there is little to choose from in terms of available texts for teaching effective quotation. It is not difficult to see how this phenomenon could disincentivize legal writing professors from doing so, especially for their first-year students. Of course, it does not have to be that way. As discussed below, there are several techniques and methods that 82 As further can easily be incorporated into a legal writing curriculum. change to a major require not necessarily this would V, in Part discussed 83 the traditional first-year legal writing program. Effective quotation could be taught in baby steps and in conjunction with the traditional first-year texts and core assignments. Alternately, a more aggressive approach could be taken to immediately acclimate law students to effective use of quotations in both law firm memorandums and legal briefs.

IV. THE TRICK TO TEACHING AND LEARNING EFFECTIVE QUOTATION: DECONSTRUCT. DECONSTRUCT. DECONSTRUCT.

Jane First-Year Associate walks into the managing partner's office.

She hands over her pride and joy, her first discovery motion, drafted precisely in the manner she was instructed at law school. The partner beams, but that smile quickly turns into a scowl as the pages are perused.

"There's not a single quotation in here," exclaims the partner. "Do you really think that's persuasive?" Jane stands horrified as the partner tosses back her masterpiece. She musters up the courage to ask for direction. None is forthcoming. "Just fix it," growls the partner. "Get me a draft by Monday morning."

This type of "sink or swim" challenge is quite possibly how countless associates learn to effectively use quotation. 84 Jane likely spent the weekend pouring through her firm's database, pulling as many motions as she could to glean how others had met this challenge. Maybe she got lucky and another associate pointed her toward specific examples that were particularly illustrative. At some point-whether it was that weekend or See id. at 175-76.

80.

Id. at 176. Point Made is discussed again in Part IV, which pertains to techniques and 81. methods for teaching quotation in law schools and other settings. See infra Part IV.C. See infra Part IV.A-D. 82.

See infra Part V. 83.

84.

See Legal Reasoning, Research, and Writing Program, W. VA. U. COLL. L. 10, http://law.wvu.edu/r/download/148848 (last visited Feb. 28, 2015) (describing the "sink or swim experience" many first-year attorneys face due to a lack of formal training).

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later-she read enough good briefs for it all to click. The key to learning effective quotation from reading good briefs: Deconstruct. Deconstruct.

Deconstruct.

As Part IV demonstrates, deconstructing legal briefs can be done just as easily in a law school setting as in private practice. In fact, teaching this skill in a classroom is easier. The process is simple. For starters, legal writing professors can be frank about the fact that effective quotation certainly has a place in any good brief There also are numerous assignments that students can be given to develop this talent, specifically including assignments that require students to read strong briefs from both trial and appellate courts throughout the nation. An additional benefit is that this provides a platform to teach several other elements of a good brief, such as introductions, point headings, and development of legal arguments.

Four categories of concrete exercises are set forth below.

The Battle of the Briefs: Learningfrom the Best of the Best

A.

This exercise requires students to read really good briefs-more particularly, those filed with the U.S. Supreme Court. This exercise also affords law professors the opportunity to provide one-on-one mentorship in a small group setting.

Students work in two- or four-person teams to analyze two recent Supreme Court briefs, one on each side the issue (e.g., the petitioner's opening brief on the merits and the respondent's brief). Each student takes primary responsibility for analyzing one of the briefs, but they also must read the opposing brief and, of course, the Supreme Court opinion. The idea is not to analyze the legal question but to instead analyze the persuasiveness of the briefs and the effect on the outcome of the Supreme Court case. In other words, the idea is to determine which brief was better written given the hurdles presented by the facts and controlling law. Students are given a handout that lists several specific items to consider, including structure, point headings, the emotional and intellectual appeal, and, of course, effective use of quotation. Students are also prodded to identify how they might have drafted the briefs differently, and how they will incorporate what they have learned into their own writing. Students then write up their own analysis.

In preparing the written portion of this assignment, team members are encouraged to work together to compare the effectiveness of the two briefs.

Once the team members have completed their written analysis, the team members can then meet with their legal writing professor for a "Battle of 85.

See infra Part IV.A-D.

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the Briefs" session. This allows the professor to discuss specific topics, including effective quotation, and to point to specific illustrations in the briefs. It also allows for a comparison between the language used in the briefs and the language used in the Supreme Court opinion. Often, this comparison demonstrates that the Supreme Court has heavily borrowed from the language set forth in the submitted briefs. This exercise also promotes critical thinking as students naturally will constructively criticize the weaker brief and articulate manners in which both briefs could be improved. Ultimately, one of the two briefs is crowned the winner of the Battle of the Briefs.

B.

Find Your FavoriteLaw Firm, Find Your FavoriteBrief Mastering the Maze of the Online Databasesto Find Stellar Trial Court or Appellate Briefs

This exercise is designed to make students aware of the thousands of fantastic trial and appellate briefs available to them through the online databases. Why are students not accessing such briefs now? One of the problems is that a common search will yield upwards of 10,000 search results.8 6 Additionally, students may not know how to distinguish between briefs that are written well and those that are not. This exercise is designed to teach students to find a way to maneuver their way through this maze to identify stellar briefs at either the trial or appellate level.

Students are first taught both how to access trial court and appellate databases on Westlaw and LexisNexis, and how to use the filters that are available to limit their searches. Students are then given one additional trick to increase substantially the likelihood of locating well-written briefs.

Students are directed to refine their search by limiting their results to those drafted by their favorite top law firm by using terms and connectors. For example, to limit the search on Westlaw to those briefs filed by top law firm Mayer Brown, the students can enter: "Mayer /2 Brown." This has the added advantage of making students aware of the existence and efficiency 86.

Paradoxically, while students feel very at home on the Internet-and typically believe themselves to be far more proficient than anyone born before the Internet boom-the present generation of students often falls short in terms of truly searching the available information that can be found. See Kristin Purcell et al., How Teens Do Research in the Digital World, PEW RES. CTR. (Nov. 1, 2012), http://www.pewinternet.org/2012/11/01/how-teens-do-research-in-thedigital-world/ ("[S]tudents rely mainly on search engines to conduct research, in lieu of other resources, such as online databases . . . ."). In other words, if a natural language search does not immediately retrieve the desired information, they are lost. See Ian Gallacher, Forty-Two: The Hitchhiker's Guide to Teaching Legal Research to the Google Generation, 39 AKRON L. REV. 151, 167 (2006) ("[T]he Internet has made it so easy to find information that students often do not know how to search for it." (quoting Thomas Keefe, Teaching Legal Research from the Inside Out, 97 LAW LIBR. J. 117, 122 (2005))).

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of Boolean searches. Alternately, students can select a top law firm whose name contains an uncommon term, such as Skadden, Arps, Slate, Meagher & Flom. To limit the search results to briefs written by this firm, a student need only enter "Skadden." Once students become familiar with this process, they may even identify a particular attorney at a firm whose writing style they would like to emulate. They can then search directly for briefs written by this attorney under the "attorney" filter. This enables students to develop a go-to list to search for stellar trial and appellate briefs.

Once students have become masters at using the filters and other limiting tools to increase the chances of finding good briefs, they are then asked to identify well-written briefs on a particular topic. For example, students could be directed to locate five well-written summary judgment briefs about unconscionability under California law. Specific criteria should be provided, including effective use of quotation. Students then nominate one such brief to be the "top brief' found by the class. This selection process could also be performed in small groups. The benefit of this exercise is that it encourages critical thinking in the same manner as the Battle of the Briefs team exercise. Students have to critique well-written briefs objectively and articulate specific reasons as to each briefs weaknesses and strengths. Ultimately, the legal writing professor selects one or more top briefs and can then use them to illustrate the use of effective quotation.

Potpourri:Specific Techniques and Exercises PromotingEffective Quotation

C.

As discussed above, the existing texts and commentary are replete with cautions about quotation gone badly. 8 7 The "potpourri" bundle of exercises is designed to teach students specific techniques to effectively incorporate quotations into their presentation of the law. Students also learn to distinguish between effective and ineffective use of quotation. These exercises-which heavily rely upon examples gleaned from well-written briefs--can be used either before or after the previously described exercises.

1.

The Merged Quote

The first technique taught involves merging quotations with a writer's own words. A good writer often uses effective quotes from a variety of

87.

See supra Part III.A-C.

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cases to create a client-friendly presentation of the applicable law.88 There are countless examples that can be found in the Westlaw or LexisNexis trial and appellate databases. 89 This technique is a bit like editing a movie. The idea is to create powerful sound bites that both explain the law in the best light for the client and hammer home the fact that the quotes used were penned by the judiciary. The trick is weaving this language into a seamless and flowing presentation of the applicable law. The result should be natural, not choppy. As the great Bard might instruct, the words should flow as if spoken "trippingly on the tongue." 90 As part of this process, students should be presented with examples of properly merged quotes from well-written briefs. They further should be directed to focus on how the writer selected and organized the quotes. In terms of organization, the students should be taught that this technique works best when the law is explained first in terms of the broad-stroke principles. The writer can then move to more specific details that support the client's position. 9 ' Students also should learn to minimize use of brackets and other devices. This can be done by cutting into the quote at a later point and weaving the quote with the writer's own words.

Furthermore, students should learn that it generally is best to cut into a quote at a point where the words matter. In other words, it is not always necessary to include introductory language in a quotation that sets up the legal point. The key is identifying the portion of a quote that the writer really wants to make sure the reader knows was articulated by the judiciary.

Students should be challenged to deconstruct positive examples of effective quotation to determine whether they follow the criteria discussed above. One exercise that can be used is a "remove the quotation marks" exercise to see whether the language flows. This can be done on a PowerPoint slide. When the quotations are put back in, this exercise demonstrates that effective use of quotations does not detract from the read, but instead signals to the reader the precedential and persuasive value of the

88.

See, e.g., Quotation Incorporation,supra note 73 (giving an example of multiple quotes woven into paraphrasing to explain the applicable law).

89.

See cases cited supra note 39; see also Newlead Holdings Ltd. v. Ironridge Global IV Ltd., No. 14cv3945, 2014 WL 2619588, at *3-6 (S.D.N.Y. June 11, 2014). This trial court brief, which was filed by Skadden, Arps, Slate, Meagher & Flom, sets forth multiple standards in a client-friendly manner that heavily relies upon quotes. See id.Such passages pertain to the standards for exercising general and specific personal jurisdiction and issuing specific injunctions.

Id. It is fairly easy to recognize what appears to be the Skadden "brand" for setting forth the applicable law.

90.

WILLIAM SHAKESPEARE, HAMLET, act 3, sc. 2 (footnote omitted).

91.

The general rule to explain the law in broad strokes and then move to more discrete points is set forth in existing texts. See, e.g., COUGHLIN ET AL., supra note 58, at 89-90.

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chosen words. Students can easily see that it is far more powerful to set forth a direct quote than it is to simply cite to a court opinion.

Examples of effective quotation can also be contrasted with examples of poor quotation. For example, as noted above, sometimes a writer will fall in love with a particularly eloquent quote, but fail miserably in terms of weaving the quotation into the writer's presentation of the law. 9 2 There are many causes for this, including inconsistency in tense. As also noted above, the result is akin to fitting a square peg into a round hole. 93 Students should be taught to identify these mismatches. Using the above teaching technique of removing the quotations can do this. Put colloquially, if it doesn't flow, it has to go. Students can then be asked to remedy the mismatch by better weaving the quote into the presentation of law.

Another exercise is to present students with three examples of effective quotation on the same subject, which students then rate as "good, better or best." The legal writing professor guides the discussion by asking students to deconstruct the examples and articulate exactly why each passage was given the particular rating. This promotes critical thinking by again prodding the students into constructive criticism of well-written briefs.

2.

The Block Quote

The second main type of quotation is the oft-maligned block quote. As Jon Bon Jovi could belt out: "You give [quotation] a bad name." 94 Almost every commentator on the subject unequivocally cautions never, never, never use a block quotation in a legal brief. 95 However, as Guberman notes in Point Made, almost every top brief includes "at least one block quot[e]," and occasionally many dozens. 9 6 Put simply, if a block quote makes it

abundantly clear that your client wins, why would any practitioner fail to include such a passage front and center?

Students must learn the reasons why block quotes are discouraged to understand how to use them effectively in their own work. One major reason is that a poorly chosen block quote makes it appear that the writer is lazy.97 In other words, it looks like the writer has performed a dupe and

92.

See supra Part Ill.B. 93.

See supra Part Ill.B. 94.

The actual lyrics to this 1986 classic rock anthem are: "You give love a bad name."

BON Jovi, You Give Love a Bad Name, on SLIPPERY WHEN WET (Mercury Records 1986).

95.

See, e.g., NEUMANN & SIMON, supra note 56, at 182.

96.

GUBERMAN, supra note 77, at 176. The full quote is set forth in supra Part III.C and repeated here for convenience. In defending block quotes against what would appear universal disdain, Guberman states: "Yet all this hostility aside, rare is the motion or brief that doesn't contain at least one block quotation, and yes, sometimes dozens." Id. 97.

COUGHLIN ET AL., supra note 58, at 99; see also discussion supra Part Ill.B.

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dump from Westlaw or LexisNexis. Another fear is that a reader will simply skim over the quote or fail to read it altogether.9 8 Of course, both of these concerns can easily be avoided if a block quote is wisely chosen and effectively presented.

The first step is teaching students when to use a block quote. It certainly should not be used to present a broad overview of the law. No doubt, many block quotes that could be pulled from judicial opinions do just that. But simply using a block quote for this purpose certainly looks like the classic dupe and dump. Judges expect practitioners to take the time to carefully craft their presentation of the law with merged quotes and stand-alone, single sentence quotes. Block quotes should be reserved for making very specific arguments that the block quote strongly supports. Put differently, block quotes should be selected because of the powerful and persuasive impact of the passage as a whole. 99 The block quote should essentially cry out: You must accept this point of law because no reasonable minds could differ as to the interpretation of this passage.

In this author's experience, once it is determined that a block quote is appropriate, there are two major techniques that should be learned in order to properly present the quote. The first technique pertains to the introduction of a block quote. The reader needs to be informed of the quote's significance. The writer should make the legal point in the writer's own words in the sentence or paragraph just above the quotation. This tees up the block quote, which then hammers home the fact that the advocate's legal proposition is supported by unequivocal case law. 00 Not only is this technique persuasive, it also destroys the perception that the block quote is nothing more than a dupe and dump by a lazy writer.

The second technique to ensure the block quote is not ignored is to use emphasis to highlight the key words and phrases that the writer wants to make sure the reader does not miss. Students need to be taught that this does not mean just highlighting the legal terms of art, such as preponderance of the evidence. Judges already know these terms, and emphasis will likely add little to the persuasiveness of the passage. Rather, emphasis-including escalating emphasis-should be given to the precise words that hammer home the advocate's point. When this is done effectively, not only will the reader quickly pick up the key points for 98.

NEUMANN & SIMON, supra note 56, § 24.2, at 182.

99.

See, e.g., Quotation Incorporation, supra note 73 (showing examples of block quotes with powerful messages).

100.

This is also discussed in Point Made where Guberman sets forth four short examples of this technique. See GUBERMAN, supra note 77, at 177-79 (examining briefs written by Steven Shapiro and the ACLU; Walter Dellinger; Carter Phillips and Virginia Seitz; and Judy Clarke).

Other examples can easily be found on Westlaw and LexisNexis.

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which the block quote is used, the reader naturally will want to read the entire passage.

Along these same lines, students should be taught to edit block quotes in a reader-friendly manner. Eliminating unnecessary words tightens the read. Of course, omitted words can also signal that the quote is taken out of context, meaning that it may not truly support the legal proposition the advocate is advancing. 10' Students and junior practitioners must be taught to never omit words or phrases that substantively affect the context or that even create the impression that those words have been eliminated. As necessary, one way to give the reader comfort that the quote has not been deceptively edited is to provide the full quote in a footnote. Alternately, the writer can identify and explain the omitted text. This is a common technique for editing long statutory provisions. 1 02 One beginning exercise is to provide examples of block quotes in legal briefs and ask students to decide whether the block quote is effective or whether it appears to be a dupe and dump. This can be easily done with compare and contrast PowerPoint slides. 10 3 Other advanced exercises include drafting an introductory paragraph or sentence for a block quote, editing long block quotes in a manner that does not create the impression that the edits are substantive, and selecting text for emphasis. Here, too, legal writing professors can use exercises where students are asked to rate block quotes as good, better, or best.

3.

Avoiding Unnecessary Quotes

To avoid overuse of quotes, students also need to learn when not to use quotes. While heavy use of quotes is commonplace in broad overviews of the law, lesser use of quotes is appropriate in case illustrations where the writer explains the facts, holding, and reasoning of specific cases.104 In that circumstance, use of quotes-or nonuse-can be discussed in terms of two general categories. The first is to quote the key legal term of art, as this

See Ann Enquist, To Quote or Not to Quote, PERSPECTIVES: TEACHING LEGAL 101.

RESEARCH & WRITING, Fall 2005, at 16, 18.

102.

As part of this instruction, students and practitioners should also be taught how to use brackets to substitute words that would otherwise be confusing to the reader. This typically occurs

when the case refers to a person or entity by name, such as a reference to a specific litigant or nonparty. These references can be replaced by reference to role.

103. A catchy name for this exercise might be: "Block In?" or "Block Out?" 104.

See SHAPO ET AL., supra note 57, at 178. See COUGHLIN ET AL., supra note 58, at 103-

09, for a nice discussion of the different aspects of case illustration, including the role, parts, necessity, and use of case illustration. Case illustrations should begin with a "hook" that demonstrates the precise significance of the case to the issue. Id. at 103-04. The hook is then followed by the "trigger facts," which are the key facts that impacted the court's ruling. Id. at 105.

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orientates the reader to those terms.1os However, it is not necessary to use quotations to set forth the basic facts of the case unless doing so is particularly persuasive. For example, if the legal issue is the construction of a contract, and the writer is citing to a court opinion that analyzes a contract provision almost identical to the contract provision at issue, then it certainly would make sense to quote the exact language in the judicial opinion. In fact, because of the similarity in language, it should be emphasized and directly compared to the exact language of the contract at issue. The same rationale applies to quoting the court's reasoning. Quotation should be used only if the precise words truly matter.

One exercise that can be used to determine whether specific detail is effective in case illustrations is a reprise of the "remove the quotation marks" exercise. In this context, the inquiry is twofold. First, does unnecessary detail bog down the reader? Even assuming the wording flows, the second question is whether the use of quotation is persuasive. In other words, does quoting the exact words from the judicial opinion truly add power? If it does not, it is generally better not to use a quotation. Instead, the reader should succinctly paraphrase. This especially pertains to quoting the underlying facts. When quotes are used in the facts, this incorrectly suggests to the reader that the specific detail has some significance.

Each of the exercises discussed so far focuses on teaching students to read good briefs and distinguish between good and bad use of quotation. It is now time to discuss an exercise that challenges students to use quotation in their own writing.

D.

Now It's Your Turn! Switching Sides: ChallengingStudents to Use Quotation to Effectively Presentthe Law in a Client-FriendlyManner

Once students and junior practitioners learn to deconstruct effective use of quotation in well-written legal briefs, it is time to put this knowledge to work. One very easy exercise to do this is to have students prepare clientfriendly presentations of a particular legal standard, such as the standard for granting a motion for summary judgment. This can be done either as an inclass writing exercise or as a take-home assignment.

This exercise begins by providing students with a universe of cases concerning the particular legal standard chosen. Inevitably, these cases will contain a variety of quotes that favor one side or another. For example, one case might emphasize that summary judgment is rarely granted because of the important value of resolving cases on the merits at trial. Another case might speak to the efficiency of using summary judgment to dispose of 105.

See COUGHLIN ET AL., supra note 58, at 99.

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nonmeritorius cases. Students are then told whether they represent the plaintiff or the defendant. Underlying details of a hypothetical case could be provided, but are not necessary. The students then read the universe of cases and draft their presentation of the law in a client-friendly manner. More specifically, the students must set forth the legal standard in a manner that fairly apprises the court of the applicable law by emphasizing the quotations in the cases that best serve the students' side. Once this is done, the exercise can be reversed, requiring students to articulate the standard in a manner that is most beneficial to the other side.

The exercise ends by allowing the students to compare their drafts with real-life examples of well-written briefs that use the same cases provided to the students. This enables students to size up their writing to the standard that applies in real life. Students can identify weaknesses and strengths in their own briefs, while appreciating the distinction of how the explanation of a legal standard changes depending on whether an attorney represents the plaintiff or the defendant.

There likely are numerous other exercises legal writing professors can develop that focus students on effective quotation. This raises the final question of exactly how teaching effective quotation should be integrated into the legal writing curriculum.

V. THE NEXT STEP: INTEGRATING EFFECTIVE QUOTATION INTO THE LEGAL WRITING CURRICULUM We have identified the problem: failure to teach effective quotation leaves law students ill-prepared to draft briefs in the style they will be expected to follow in practice. We have even identified the core component to remedying the problem: a series of concrete exercises designed to teach students both to identify good exemplars of effective quotation and to integrate that skill into their own writing. That leads us to the final frontier: How should law school professors implement such exercises into their legal writing curriculum?

It has been said that the one constant in life is change.1 0 6 Recently, transmission of television signals in the U.S. switched from analog to digital.1 07 It took years to implement this change, including extraordinary efforts to publicize the transition and to even provide consumers with

106.

Though many have explored this concept, its origin often is attributed to pre-Socratic Greek philosopher Heraclitus. See CHARLES H. KAHN, THE ART AND THOUGHT OF HERACLITUS: AN EDITION OF THE FRAGMENTS WITH TRANSLATION AND COMMENTARY 147 (1979).

107.

See Joshua T. Block, Regulating the Transition from Analog to Digital Television Broadcastingin North America: A Comparisonof the Canadian, U.S., and Mexican Experiences, 17 MEDIA L. & POL'Y 19, 19 (2008).

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coupons for digital convertors.o We are not facing those circumstances here. Integrating effective quotation does not have to drastically change the manner in which legal writing is taught in a first-year legal writing program. Or it could.

As noted in Part I, it would seem there are two basic manners to integrate effective quotation into a legal writing curriculum.1 09 Currently, the typical first-year writing program includes one or two beginning assignments where students write a predictive memo for a hypothetical law firm based upon a client file and a selected library of cases."o This is capped off by a final assignment to draft a legal brief."' Typically, legal writing professors engage in one-on-one mentorship to review drafts of all such assignments.112 Under a pragmatic approach, effective quotation could be taught in baby steps, while keeping in place this traditional model for teaching first-year legal writing students.

For example, even for the beginning assignments, students could be taught to use quotes for key "buzzwords" or legal phrases that are set forth in the cases in their library. Once students master this basic task, the exercises discussed in Part IV would be employed to enable students to advance to more complex use of quotation.11 3 Students would be encouraged to identify favorable quotes for their client's position and would ultimately be prodded to experiment with use of quotation in their final assignment-drafting a legal brief. By the time students complete this assignment, they will have grasped the basics of effective quotation. That skill can then be further developed in upper-division writing courses.

A second approach would be to shakeup the traditional first-year writing assignments to immediately get students on the path of effective quotation. Instead of writing a predictive memo directed to a partner or senior associate in a hypothetical law firm, the students would instead write a predictive memo for a hypothetical judge.114 The students would

&

108.

Id. at 27-28.

109.

See supra Part 1.

110.

See Jo Anne Durako et al., From Product to Process: Evolution of a Legal Writing Program, 58 U. PITT. L. REv. 719, 726 (1997); Julie M. Spanbauer, Teaching First-Semester Students that Objective Analysis Persuades, 5 LEGAL WRITING: J. LEGAL WRITING INST. 1 67, 168 n.3 (1999).

111.

See Durako et al., supra note I10 at 726; see also Spanbauer, supra note I10, at 167 n.1, 168 n.3.

112.

See Durako et al., supra note 110, at 726.

113.

See supra Part IV.A-D. Though rare, some law schools do diverge from the standard first-year legal writing 114. curriculum. See Jessica Wherry Clark & Kristen E. Murray, The Theoretical and Practical Underpinnings of Teaching Scholarly Legal Writing, I TEX. A&M L. REV. 523, 525 (2014) ("Though there is significant variation among law schools in how first-year legal writing programs

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recommend how the judge should rule on a particular motion, for example, a discovery motion or a motion for preliminary injunction. Instead of being presented with a client file, the students would be presented with wellwritten briefs drafted by the hypothetical litigants. These briefs would, of course, include effective use of quotation. The traditional "library" would consist of the cases cited in the litigant's briefs. The students also would be given an example of the judge's preferred style of writing judicial orders.

The legal analysis could and should follow the standard IRAC model."s The difference between this memo assignment and the traditional memo assignment for a hypothetical law firm-besides the obvious difference in the materials provided-is that students would be specifically instructed to use quotation in their memorandum and to draft their legal discussion in a manner that would permit inclusion of their discussion in the judge's ruling.

This first assignment could be followed by a second, more demanding, assignment where the students would draft an actual tentative order on a more complex motion, for example, a summary-judgment motion. Again, the students would be presented with another round of well-drafted legal briefs, which would rely on effective quotation, and the students would be expected to review the cited cases and make a decision as to how the judge should rule. They would be given an example of the judge's preferred style for tentative orders-which would include effective use of quotationalong with specific instructions as to how the tentative order should be drafted. In this second assignment, students could even be encouraged to find and use cases other than those cited in the briefs.

Ultimately, and staying in line with the traditional model for first-year legal writing programs, students would write a legal brief as the climactic final assignment of their first-year legal research and writing program.

Having already studied several well-written briefs, students certainly should be well versed in presenting legal arguments-including effectively using quotation-when they start drafting their brief. With the heavy emphasis on one-on-one mentoring that typically is provided at this point, students should be able to strengthen this skill by the time they finish their final assignment. This is especially so if the exercises discussed in Part IV are used from the onset of their training. 116 This approach also could accommodate traditionalists who cannot envision a law school writing program that does not require students to write at least one predictive office memorandum. Many law schools end are organized . . . for the most part first-year writing programs take a similar pedagogical approach.").

115.

See, for example, COUGHLIN ET AL., supra note 58, at 82-83, for a discussion of IRAC and two spinoffs: CREAC and CRRPAP. See supra Part IV.A-D. 116.

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their curriculum with one or more "transition to law practice" classes, which are intended to prepare students for their first real-life stint as a law clerk." 7 While these courses are typically offered in the final year of students' legal education,"'8 relevant portions could be incorporated into the end of the first-year writing program. Although students should be told that every law firm has its own expectations as to how to draft an office memorandum, they can be taught the basics of this task through use of the traditional format outlined in existing texts. Students would easily see that the format is very similar to the format they used to prepare their first predictive memorandum that they drafted for their hypothetical judge.

Students could then convert that memorandum into a predictive office memorandum for one (or both) of the hypothetical law firms that drafted the briefs that the students received. Alternately, some legal writing professors might choose to use this conversion exercise just after students turn in their first assignment. This would ensure that students have a traditional writing sample prior to the end of the first year.

Under either of these approaches, students will emerge from their first year of law school with a concrete understanding of the importance of effective quotation in legal briefs. They will also have the ability to incorporate effective quotation in their own writing. Students taught the first approach would continue to receive the traditional training that already is reflected in existing texts. Students taught the second approach would have the advantage of having a predictive judicial memo as a writing sample, which could assist these students in obtaining judicial clerkships.

This approach would also ensure that students have a clear view of the process by which judicial decisions are made. This certainly would assist in their appreciation of what it takes to write an effective, winning brief.

VI. CONCLUSION

The manner in which legal briefs are written has changed drastically over the last fifty years. But the manner in which legal students are instructed regarding effective quotation has not. There is no excuse for this disconnect between theory and practice. It is this author's intent to initiate the conversation about how to remedy this problem. At a minimum, students should no longer be kept in the dark. Students must be informed of the importance of effective quotation and the plain reality that this skill must be developed if they wish to succeed in practice. The exercises and 117.

See, e.g., Gregory M. Duhl, Equipping Our Lawyers: Mitchell's Outcomes-Based Approach to Legal Education, 38 WM. MITCHELL L. REv. 906, 924-25 (2012) (describing William Mitchell College of Law's keystone courses).

118.

See, e.g., id.

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techniques set forth in this Article demonstrate that it certainly is possibleand even easy-to include teaching effective quotation in a legal writing curriculum. Given the strong demand for graduates who are practice ready, this process can, and should, begin immediately to the benefit of new attorneys, those hiring them, and to the clients they will represent.

LAW FIRM COPYING AND FAIR USE: AN EXAMINATION OF DIFFERENT PURPOSE AND FAIR USE MARKETS D.R. JONES* I. II.

INTRODUCTION THE CASES

A. B.

III.

....................................... ................................................

......

Proceduraland FactualBackground ........... ......

The Decisions in Schwegman and Winstead ...... ................................

1. First Factor ..............................

2. Second Factor 3. Third Factor ....................................

4. Fourth Factor .................... ..... ......

313 315

315 317 319 322 322 323

AN EXAMINATION OF THE DEFENDANT'S PURPOSE IN FAIR USE

ANALYSIS

.................................................

324

A.

Evolution of Transformative Use: A Focus on Different Purpose ..........................................

324 B. Purpose as Predictive ....................................

329 C. Purpose and FourthFactorAnalysis............ ..... 333 D. Fair Use Markets .......................................

339 1. Definition of a FairUse Market........... ...... 339 2. Determinationof a Fair Use Market .............. 341 a. Considerations in the Immediate Context................... 343 b. Considerations in the Broader Context..... ..... 345 c. Summary: Determination of a Fair Use Market ......... 347 IV.

CONCLUSION

..............................................

I.

347

INTRODUCTION

The legal industry took note when publishers sued patent law firms for copyright infringement. These lawsuits focused on the law firms' alleged use of unlicensed copies of scholarly articles in patent application filings, * Assistant Professor of Law, the University of Memphis Cecil C. Humphreys School of Law. Thanks to the participants in the 2014 Works-in-Progress Intellectual Property Colloquium at Santa Clara University School of Law and participants in the 2014 Intellectual Property Scholars' Conference at UC Berkeley School of Law for their comments on earlier versions of this Article. Thanks to Rebecca Closner for her excellent research. Thanks also to Kate Schaffzin and Demetria Frank for their advice regarding evidence.

313

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including the use of copies for clients or internal review. The plaintiffs claimed the loss of licensing fees due to the defendants' copying. The defendants successfully argued that the use of the copies in connection with the patent application process was fair use, even though there was a means of collecting fees for the use.

The doctrine of fair use is a powerful exception to the rights of copyright holders. Under this exception, copyrighted works can be used without the copyright holder's permission. Section 107 codifies the fair use doctrine.' Fair use analysis primarily focuses on the four factors listed in that section.2 The first factor, the "purpose and character of the use," is a critical part of overall fair use analysis. This Article uses the patent application cases as a vehicle to review the use of purpose in fair use analysis. It advocates that the study of the character and purpose of a use should include a deeper examination of the policies and societal interests underlying the use. This broader consideration is especially important if a plaintiff asserts the presence of a ready market for the payment of fees for use of a copyrighted work.

Part II of this Article summarizes the decisions in two patent application cases in which judges rendered opinions. Part III examines the focus on the defendant's purpose in fair use analysis. It uses the decisions in the lawsuits against the patent firms as a vehicle for this examination. It describes how these decisions fit well into a line of cases in which the determination of transformative use based on different purpose has evolved from the Campbell v. Acuff-Rose Music, Inc.4 decision over twenty years ago to more recent court decisions. Part II also notes the continuing uncertainty in the identification of transformative use. It suggests that a more predictable outcome is available if a defendant can identify that a use is within a category of uses that courts regularly determine support fair use.

As an example, the patent application cases fit within the favored category of uses of copyrighted works in quasi-judicial and judicial proceedings.

This categorization of a use, however, may not be adequate to address market effect if the plaintiff claims the loss of licensing fees.

Scholars have expressed concerns that the availability of a ready market for licensing eclipses fair use analysis under the fourth factor. Part III explores the determination of a fair use market as a way to support the unlicensed use of copyrighted works, although a ready market exists for the payment of fees. The patent application cases and the larger category of use

1.

2.

3.

4.

17 U.S.C. § 107 (2012).

See infra text accompanying notes 30-37. § 107(1).

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).

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of copyrighted works in legal proceedings offer an excellent illustration of the analysis necessary to determine a fair use market. This analysis builds on Professor Wendy Gordon's discussion and refinement of the concept of fair use markets.5 This concept provides a unique means of identifying when a defendant can use a copyrighted work without permission, even though there is a method available for fee payments.

II.

A.

THE CASES

Proceduraland FactualBackground

In 2012, publishers filed lawsuits alleging copyright infringement against four law firms.6 In their initial complaints, the plaintiffs argued that the law firms had not obtained their permission before filing copies of copyrighted articles in patent applications.7 The plaintiffs voluntarily dismissed the case against one of the firms after that case settled.8 The defendants in the remaining three lawsuits denied the allegations of infringement and raised several defenses, including fair use. 9 The United States Patent and Trademark Office (PTO) intervened as a defendant in these three lawsuits.'o

&

5.

See infra text accompanying notes 190-203.

6.

The plaintiff-publishers were the American Institute of Physics and John Wiley Sons, Ltd. (the plaintiffs). The four defendant law firms were as follows: McDonnell Boehnen Hulbert & Berghoff LLP (Chicago, Illinois); Winstead PC (Dallas, Texas); Hovey Williams LLP (Topeka, Kansas); and Schwegman Lundberg & Woessner, P.A. (Minneapolis, Minnesota) (the defendants). All four law firms engage in patent prosecution.

7.

Plaintiffs Original Complaint at 1, 3, 4, Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-CV-1230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3, 2013) [hereinafter Winstead Complaint]; Complaint at 1, 3, 4, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013) [hereinafter Schwegman Complaint]; Complaint at 1, 3, 4, John Wiley & Sons, Inc. v. Hovey Williams LLP, 5:12-cv-04041-RDR-KGS (D. Kan. Apr. 20, 2012) [hereinafter Hovey Williams Complaint]; Complaint at 1, 3, 4, John Wiley & Sons, Ltd. v. McDonnell Boehnen Hulbert & Berghoff LLP, No. 1:12-cv-01446 (N.D. Ill. Feb. 29, 2012) [hereinafter Boehnen Complaint]. The plaintiffs also alleged that the defendants had made infringing "internal" copies of copyrighted articles in connection with the patent application filings. Winstead Complaint, supra, at 4; Schwegman Complaint, supra, at 4; Hovey Williams Complaint, supra, at 4; Boehnen Complaint, supra, at 4.

8.

Notice of Voluntary Dismissal at 1, John Wiley & Sons, Inc. v. Hovey Williams LLP, No. 5:12-cv-04041-RDR-KGS (D. Kan. June 22, 2012).

9.

Answer at 1, 4, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013); Answer at 3, 9, John Wiley & Sons, Ltd. v. McDonnell Boehnen Hulbert & Berghoff LLP, No. 1:12-cv-01446 (N.D. 11. Apr. 12, 2012); see Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-CV-1230-M, 2013 WL 6242843, at *1 (N.D. Tex. Dec. 3, 2013).

10.

Motion to Intervene at 1, Am. Inst. of Physics v. Winstead PC, No. 3:12-CV-1230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3, 2013); Motion to Intervene at 1, Am. Inst. of Physics v.

Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D.

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These cases were brought in the context of the patent application process. An inventor may obtain a patent by submitting a patent application to the PTO." The PTO's examination process includes a determination of the patentability of the invention.' 2 As part of this process, the examiner considers "prior art."' 3 Prior art can include scholarly scientific and technical articles (i.e., non-patent literature (NPL)), as well as previously issued patents.1 4 An examiner searches for prior art as part of the review," but an applicant also provides prior art.16 A patent applicant has "a duty to disclose . . all information known to that individual to be material to patentability."' 7 To comply with this duty of disclosure, the defendants filed scholarly articles as part of the patent applications.' 8 The plaintiffs initially alleged Minn. Aug. 30, 2013); Motion to Intervene at 1, John Wiley & Sons, Ltd. v. McDonnell Boehnen Hulbert & Berghoff LLP, No. 1:12-cv-01446 (N.D. Ill. June 12, 2012). The PTO intervened because of the possible effects a decision could have on the patent process. It asserted that the copying and use of articles in patent proceedings constituted fair use. Memorandum of Law in Support of USPTO's Motion for Judgment on the Pleadings or Partial Summary Judgment on Its Fair Use Defense & Counterclaim at 6-7, Am. Inst. of Physics v. Winstead PC, No. 3:12-CV01230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3, 2013); Memorandum of Law in Support of USPTO's Motion for Summary Judgment on Its Fair Use Defense & Counterclaim at 2, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013). In January 2012, the PTO issued a memorandum discussing the application of fair use in the patent examination process. Memorandum from Bernard J. Knight, Jr., Gen. Counsel, U.S. Patent & Trademark Office, at 2 (Jan. 19, 2012).

35 U.S.C. §§ 101, Ill (2012). Under Article 1, Section 8 of the United States 11.

Constitution, Congress has the power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Pursuant to this power, Congress has promulgated patent laws that are codified in 35 U.S.C. §§ 1-390. Rules and regulations governing patents are set forth in title 37 of the Code of Federal Regulations.

12.

37 C.F.R. § 1.104(a) (2013); see also 35 U.S.C. §§ 102-103 (setting forth the conditions for patentability).

13.

37 C.F.R. § 1.104(a)(1).

14.

See 35 U.S.C. § 102(a)(1).

37 C.F.R. § 1.104(a)(1).

15.

16.

The applicant can provide an information disclosure statement along with the application. This statement includes copies of any information submitted for consideration. See 37 C.F.R. § 1.98(d). The PTO encourages applicants "to file ... information disclosure statement[s]."

Id. § 1.51(d). In addition to the information disclosure statement, the applicant must file copies of publications that are material to the claim of patentability. See id. § 1.98(a)(2)(ii), (iv).

17.

Id. This disclosure helps the PTO become "aware of and evaluate[] the teachings of all information material to patentability." Id. This disclosure is part of a "duty of candor and good faith." Id. The applicant's attorneys and any other "individual associated with the filing and prosecution of a patent application" also have this duty. Id. § 1.56(a).

18.

See Winstead's Reply in Support of Motion to Dismiss Amended Complaint at 3, Am. Inst. of Physics v. Winstead PC, No. 3:12-CV-01230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3, 2013); Schwegman Lundberg & Woessner, P.A.'s Memorandum of Law in Support of Its Motion for Summary Judgment at 4, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

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that the filing of NPL without permission constituted infringement.19 The plaintiffs later amended their complaints to exclude the filed NPL, as well as one copy for archival purposes. 2 0 The amended complaints focused on other copies, such as copies provided to clients.2 1 While the plaintiffs' amended complaints excluded filings with the PTO and archival copies, the judges in Schwegman and Winstead still considered these copies in their review of the issues. 2 2 The Schwegman and Winstead lawsuits resulted in district court decisions for the defendants.23 The plaintiffs filed an appeal in the 242 Schwegman case,2 but later dismissed the appeal.25 They also filed a stipulated motion for dismissal with prejudice in the Winstead case.26 In addition, the plaintiffs filed for dismissal in the third case, which was still in the discovery phase. 27 This Article focuses on the Schwegman and Winstead cases.

B.

The Decisions in Schwegman and Winstead

In Schwegman and Winstead, both judgeS 28 determined that the defendants' copying constituted fair use as a matter of law and granted

&

&

19.

Winstead Complaint, supra note 7, at 1; Schwegman Complaint, supra note 7, at 1; Boehnen Complaint, supra note 7, at 1.

20.

See Plaintiffs' Amended Complaint at 1, Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-CV-01230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3, 2013) [hereinafter Winstead Amended Complaint]; Plaintiffs' Amended Complaint at 1-2, Am. Inst. of Physics v.

Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013) [hereinafter Schwegman Amended Complaint]; Amended Complaint at 1-2, John Wiley & Sons, Ltd. v. McDonnell Boehnen Hulbert & Berghoff LLP, No. 1:12-cv-01446 (N.D. Ill. July 13, 2012) [hereinafter Boehnen Amended Complaint].

21.

Winstead Amended Complaint, supra note 20, at 1, 4; Schwegman Amended Complaint, supra note 20, at 1, 5; Boehnen Amended Complaint, supra note 20, at 1, 5.

22.

See infra note 29.

23.

Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *14 (N.D. Tex. Dec. 3, 2013); Am. Inst. of Physics v. Schwegman Lundberg Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 2 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

24.

Letter from the Clerk of the Court at 1, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., No. 13-3351 (8th Cir. Oct. 28, 2013), ECF No. 1.

25.

Stipulation of Parties to Dismiss Appeal Pursuant to FED. R. APP. P. 42(a) at 1-2, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

26.

Stipulated Motion for Dismissal with Prejudice at 1, Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-CV-1230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3,2013).

27.

Plaintiffs' Motion for Voluntary Dismissal with Prejudice Pursuant to Federal Rule of Civil Procedure 41(A)(2) at 1, John Wiley & Sons, Ltd. v. McDonnell Boehnen Hulbert Berghoff LLP, No. 1:1 2-cv-01446 (N.D. Ill. Mar. 5, 2014).

28.

The judge in Schwegman was Magistrate Judge Jeffrey J. Keyes. Am. Inst. of Physics v. Schwegman Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), at I (D. Minn. July 30,

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summary judgment for the defendants.2 9 Subpart II(B) of this Article reviews the judges' fair use analysis in Schwegman and Winstead. Under the 1976 Copyright Act, 3 0 copyright holders have numerous rights, including the right "to reproduce the copyrighted work in copies or phonorecords." 3 ' "[F]air use is an affirmative defense" to infringement of a copyright holder's rights in a work. 32 Congress codified the long-standing judicial doctrine of fair use33 in § 107 of the Copyright Act of 1976.34 A court's determination of fair use "calls for [a] case-by-case analysis." 35 In its analysis, the court must consider and "weigh[ ] together" 36 the nonexclusive four factors listed in § 107.

2013), adopted by 2013 WL4666330 (D. Minn. Aug. 30, 2013). The judge in Winstead was Judge Barbara M.G. Lynn. Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *1 (N.D. Tex. Dec. 3, 2013).

29.

Winstead, 2013 WL 6242843, at *14; Schwegman, at 2. In Schwegman, the district court adopted the magistrate judge's report and recommendation after a de novo review. Am. Inst. of Physics v. Schwegman Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330, at *1-2 (D. Minn. Aug. 30, 2013). In their amended complaints, the plaintiffs in these cases dropped allegations concerning copies that the law firms had filed with the PTO and copies made for archival purposes. Winstead, 2013 WL 6242843, at *2; Schwegman, at 4-5.

In Schwegman, Judge Keyes discussed the disagreement as to whether the plaintiffs had conceded that the making of these copies was fair use. Schwegman, at 5-6 n.3. He concluded the plaintiffs had not conceded this fact. Id. at 6 n.3. Even though the plaintiffs had dropped their claims relating to the copies for the PTO filing and archival purposes, the defendants' use of copies in the patent application process was still relevant. See id. They could not "dissociate" the copying from the law firm's patent prosecution practice. Id. In Winstead, however, Judge Lynn stated the plaintiffs had admitted that the making of the copies for the PTO filing and archival purposes was fair use. Winstead, 2013 WL 6242843, at *6.

30.

Copyright Act of 1976, Pub. L. 94-553, 90 Stat. 2541.

17 U.S.C. § 106(1) (2012).

31.

32.

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994).

33.

See 4 WILLIAM F. PATRY, PATRY ON COPYRIGHT § 10:2, at 10-12 (2007); see also H.R. REP. NO. 94-1476, at 65 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5678 ("The judicial doctrine of fair use [is] one of the most important and well-established limitations on the exclusive right of copyright owners . . . .").

34.

17 U.S.C. § 107. Section 107 provides that "the fair use of a copyrighted work . . . is not an infringement of copyright." Id. 35.

Campbell, 510 U.S. at 577; see also H.R. REP. NO. 94-1476, at 66 ("Beyond a very broad statutory explanation of what fair use is and some of the criteria applicable to it, the courts must be free to adapt the doctrine to particular situations on a case-by-case basis.").

36.

Campbell, 510 U.S. at 578.

37.

The four factors listed in § 107 are as follows: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C. § 107(1)-(4).

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FirstFactor

The judges in both Schwegman and Winstead determined that the first factor favored fair use. 3 8 The first factor focuses on "the purpose and character of the use."39 The Supreme Court in Campbell v. Acuff-Rose Music, Inc. established that under the first factor, a court determines whether the defendant's work is "transformative" by "add[ing] something new, with a further purpose or different character," or whether it "merely supersede[s] ... the original." 4 0 The transformative nature of a work can diminish the importance of countervailing factors. 4 1 Both judges concluded that the defendants' copying constituted a "transformative use" of the articles, 42 even though the defendants made exact copies. 4 3 Judge Keyes noted in Schwegman that the "lack of alteration may make the label 'transformative use' a messy fit," but a finding of fair use would still be appropriate if "the use's purpose and character differs from the object of the original."44 The judges determined in each case that the defendants used the copies for a different intrinsic purpose than the original-namely, to review the articles for information relevant to patentability and to provide that information as evidence in the context of the patent application process.45 In contrast, the original purpose for the publication of the articles was to provide the scientific community with information about current developments.46 Judge Lynn in Winstead noted that the defendants were not reading the articles to learn, but rather to identify and provide evidence of the existence of the information in order to obtain "a quasi-judicial decision." 4 7 Judge Keyes in Schwegman discussed cases in which the courts had determined that the use of copyrighted materials as evidence in judicial

&

38.

Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *9 (N.D. Tex. Dec. 3, 2013); Am. Inst. of Physics v. Schwegman Lundberg Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 30 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

39.

17 U.S.C. § 107(1).

40.

Campbell, 510 U.S. at 578-79 (second alteration in original) (quoting Folsom v. Marsh, 9 F. Cas. 342, 348 (Cir. Ct. D. Mass. 1849)) (internal quotation marks omitted).

41.

See id.

42.

See Winstead, 2013 WL 6242843, at *11; Schwegman, at 23-24, 27.

43.

Winstead, 2013 WL 6242843, at *10; Schwegman, at 30.

44.

Schwegman, at 24-25; see also 17 U.S.C. § 107.

45.

Winstead, 2013 WL 6242843, at *5; Schwegman, at 22-23, 26-27.

46.

Winstead, 2013 WL 6242843, at *5; Schwegman, at 23. Judge Keyes in Schwegman also discussed that the defendants were a different audience for the articles than the audience for the articles at the time of publication. Schwegman, at 10-12. This difference indicated how the defendants' usage of the articles differed from the usage of original readers of the articles. Id. 47.

Winstead, 2013 WL 6242843, at *5.

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proceedings constituted fair use. 48 He equated the defendants' use of the articles as evidence in the patent process with the use of copyrighted 49 materials in those cases.

Judge Keyes determined that the defendants' use of internal copies fit within "determining how best to represent . . clients' interests in quasijudicial proceedings."so Judge Lynn also determined that internal copies made for attorneys to review for filing with the PTO and copies of articles attached to PTO filings and sent to clients were "indistinguishable" from copies filed with the PTO and therefore covered as a fair use.

The analysis of the "purpose and character of the use" includes a determination of "whether such [a] use is of a commercial nature or is for nonprofit educational purposes." 52 The plaintiffs in the Schwegman and Winstead cases argued that the defendant law firms were for-profit businesses that were obtaining a commercial benefit from the copied articles. 5 3 Relying on American Geophysical Union v. Texaco Inc.,5 the plaintiffs contended that the defendants' commercial use of the articles negated a finding of fair use under the first factor.55 Rejecting the plaintiffs'

&

48.

Schwegman, at 25-26.

49.

Id. at 26.

50.

Id. 51.

Winstead, 2013 WL 6242843, at *6. In footnote four of her opinion, Judge Lynn described some of the copies that the defendants made. Copies of articles included the following: [O]ne email from a Winstead legal assistant to three client contacts, a Winstead attorney and a Winstead in-firm patent agent, forwarding a USPTO non-final office action on a patent as to which the article was included as an attachment; four emails forwarding the previous e-mail; one email from a Winstead in-firm patent agent to three clients and a Winstead attorney containing a draft submission to the USPTO to which the article was attached.

Id. at *2 n.4 (emphasis added).

52.

17 U.S.C. § 107(l) (2012).

53.

Winstead Amended Complaint, supra note 20, at 4; Schwegman Amended Complaint, supra note 20, at 5.

54.

Am. Geophysical Union v. Texaco Inc., 60 F.3d 913 (2d Cir. 1994). In Texaco, the plaintiff-publisher claimed that Texaco infringed the publisher's copyrights when Texaco scientists made copies of scholarly articles for personal files. Id. at 914. The scientists copied the articles for possible later use in their research. Texaco claimed that the copying constituted fair use. Id. at 914-15. The Second Circuit rejected the fair use defense. Id. at 931. The court of appeals determined that the weight of the first factor was against the defendant since researchers were making use of the copied articles for the same purpose as the original. See id. at 919-20. The researchers were maintaining copies in their personal libraries in lieu of the company purchasing additional subscriptions. Id. at 919.

55.

Memorandum of Plaintiffs in Opposition to the Motion of Defendant Schwegman, Lundberg & Woessner, P.A. to Dismiss the Complaint at 1, Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), 2013 WL 4666330 (D. Minn. Aug. 30, 2013); see Winstead, 2013 WL 6242843, at *7; Am. Inst. of Physics v. Schwegman Lundberg Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 28 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

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argument, Judge Keyes in Schwegman simply stated: "This case is not Texaco."5 6 Judge Lynn in Winstead similarly stated that "Texaco [is] inapposite." 5 7 Both judges distinguished the facts of Texaco. Judge Keyes noted there was no evidence that the defendants were "superseding the original purpose of the [a]rticles" by "maintaining mini-research libraries" in lieu of paying for subscriptions. Judge Lynn also determined that the defendants in Winstead did not maintain mini-libraries.5 9 Furthermore, she noted that the defendants' purpose in using the articles was different from the original, unlike the scientists' use of articles in Texaco.60 Judge Lynn rejected the plaintiffs' contention that since the defendants charged an hourly rate for reading the articles, they had gained a commercial benefit from those articles. 6 ' The Winstead opinion also addressed the plaintiffs' argument that the law firm was a "commercial enterprise" that was reaping a profit by charging clients for making copies.62 Judge Lynn determined that the law firm, if it charged clients for copies, charged only enough to recoup costs and did not make a profit.63 Judge Lynn concluded that "[t]he commercialism inquiry does not disfavor [d]efendants' fair use defense." 64

56.

Schwegman, at 29.

57.

Winstead, 2013 WL 6242843, at *7.

58.

Schwegman, at 29-30. Judge Keyes, in a footnote, distinguished the situation in which a law firm was making copies of a copyrighted work and distributing them to each lawyer in the firm. Id. at 30 n.10. In that case, the firm would be "systematically avoiding paying licensing fees by multiplying copies for its employees to use copyrighted materials exactly how they were intended to be used." Id. 59.

Winstead, 2013 WL 6242843, at *7 ("Unlike Texaco, Defendants do not maintain a library of copyrighted works or save copies of NPL to individual hard drives, but instead isolate NPL to individual client files, and keep NPL photocopies or digital copies solely in client files.

There is no way to search for previously used NPL in Winstead's computer network, nor is there a physical library of NPL articles.").

60.

Id. 61.

Id. The court specified that the defendants were charging for the time spent and were not obtaining a commercial benefit from the copies themselves. Id. ("The Court finds Texaco inapplicable here, where the monetary gain received by the Defendants for reading an article is generated from the use of the attorneys' own time and not the content of the article itself.").

62.

Id. Judge Lynn distinguished this situation from Princeton University Press v.

Michigan Document Services, Inc., 99 F.3d 1381 (6th Cir. 1996) (en banc), in which the defendant made a profit from selling copies and was therefore unable to maintain a fair use defense.

Winstead, 2013 WL 6242843, at *7 (citing Princeton Univ. Press,99 F.3d at 1383).

63.

Winstead, 2013 WL 6242843, at *7. It was not relevant that companies in the business of making copies could charge lower rates, thus suggesting that the firm's charges resulted in a profit. See id.

64.

Id. at *8. "Even if [the d]efendants' use of [the p]laintiffs' works did occur in a commercial context, that fact is not determinative." Id. (citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 584 (1994)).

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Second Factor

In each case, the judge quickly determined that the second factor-the "nature of the copyrighted work" 6 5-favored fair use.66 In Winstead, Judge Lynn agreed with the defendants that the copied articles contained "factual and scientific information" that was subject to less protection. Although the copied articles contained "protectable, expressive content," Judge Lynn distinguished those articles from works such as poems or stories, which "are less likely to fall under the fair use defense." 68 The second factor in Winstead therefore favored a finding of fair use. 69 Likewise, Judge Keyes in Schwegman characterized the copied articles as "factual or informational."7 o He concluded that the copied works fell "a bit farther from the core of intended copyright protection than do other, more 'creative' works," and thus the second factor favored fair use.

3.

Third Factor

Both judges linked the amount of permitted copying under the third factor to the "purpose and character of the use." 72 The third factor focuses on "the amount and substantiality of the portion [of the work] used in relation to the copyrighted work as a whole." 73 In both cases, the defendants copied entire articles.74 Judge Keyes noted the "new and different purpose" that the defendants' copying served and concluded that the third factor

65.

17 U.S.C. § 107(2) (2012).

66.

One scholar has noted that "[d]espite the confusion surrounding its sister factors, courts address [the second] factor with remarkable efficiency and frugality." Robert Kasunic, Is That All There Is? Reflections on the Nature ofthe Second Fair Use Factor,31 COLUM. J.L. & ARTS 529, 529 (2008).

67.

Winstead, 2013 WL 6242843, at *9. Judge Lynn noted that "[t]he law generally recognizes a greater need to disseminate factual works than works of fiction or fantasy." Id. (quoting Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 563 (1985)).

68.

Id. 69.

Id. 70.

Am. Inst. of Physics v. Schwegman Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 37 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013). Judge Keyes noted that "[t]he scope of fair use is greater when 'informational' as opposed to more 'creative' works are involved." Id. at 36 (quoting Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1153-54 (9th Cir. 1986)).

71.

Id. at 37.

72.

Both judges noted that the amount of permitted copying under the third factor depends on the "purpose and character of the use." Winstead, 2013 WL 6242843, at *10 (quoting Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 586-87 (1994)); Schwegman, at 37-38 (quoting Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 144 (2d Cir. 1998)).

73.

17 U.S.C. § 107(3) (2012).

74.

Winstead, 2013 WL 6242843, at *10 ("Defendants copy NPL in their entirety."); Schwegman, at 38 ("There is no dispute that [defendant] copied the [a]rticles in their entirety.").

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favored fair use." Copying entire articles "was essential" because the defendants needed to review the entire articles for relevant information that they had to disclose in the application process. 7 6 Judge Lynn also determined that the defendants' need to fulfill ethical obligations under the PTO's disclosure requirements mitigated the negative impact of copying entire works.77 She was less willing, however, to declare the third factor in favor of fair use. Instead, she concluded that "the third factor [was] neutral or weigh[ed] only slightly against a finding of fair use."

4.

Fourth Factor

The judges in both Schwegman and Winstead determined that the fourth factor79 weighed in favor of fair use.80 Both judges concluded that the defendants' copying did not usurp or adversely affect the market for the original articles.i Judge Keyes observed there was no evidence that the defendants' failure to pay a fee for use of the articles would "disincentivize the authors . .. from creating the work in the first place and distributing it to the traditional audience for the work or that this use would reduce demand for the original work." 82 The plaintiffs argued that they had lost licensing revenues from the copies.83 Judge Keyes acknowledged that the plaintiffs might have lost revenue if the defendants did not obtain licenses. 84 He held, however, that "the fact that the [plaintiffs] may have lost licensing revenue . . . is not

determinative and does not create a fact issue for trial."8 He again distinguished the facts of Texaco by reiterating that the defendants' use of the copies in Schwegman did not supersede the original use of the articles, 75.

Schwegman, at 38.

Id. 76.

77.

Winstead, 2013 WL 6242843, at *10.

78.

Id. 79.

The fourth factor focuses on "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107(4) (2012).

80.

Winstead, 2013 WL 6242843, at *10; Schwegman, at 36; see also text accompanying notes 182-189 and 239-242 infra for additional discussion.

81.

Winstead, 2013 WL 6242843, at *11 ("[Defendants'] actions have no significant impact on the market for Plaintiffs' original articles."); Schwegman, at 31 ("[Plaintiffs] present no evidence that the patent lawyers' use of the scientific [aIrticles to meet their obligations to disclose prior art to the PTO adversely affects the traditional target market for these [a]rticles . . . ."). Judge Lynn noted that most of the articles were older articles with a diminished value and copies were not distributed to the public. Winstead, 2013 WL 6242843, at *1 l.

82. Schwegnan, at 31; see also id. at 40-41.

83.

Id. at 31-32. The plaintiffs noted that licensing was available and other law firms had obtained licenses. Id. at 32.

84.

Id. at 32.

85.

Id. at 33.

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which was the case in Texaco.86 In Winstead, Judge Lynn also rejected the plaintiffs' argument that their loss of licensing fees supported a denial of fair use.8 Judge Lynn stated that the public benefit of "minimiz[ing] excessive costs in patent applications and maximiz[ing] the accuracy of the patent process" outweighed any gain to the plaintiffs from potential fees. 88 III. AN EXAMINATION OF THE DEFENDANT'S PURPOSE IN FAIR USE ANALYSIS

Part III of this Article examines the role of purpose in fair use analysis, the need for an enhanced analysis of purpose, and the application of an enhanced analysis of purpose in addressing market effect. While the lawsuits against the patent law firms have ended, these cases provide a vehicle for an examination of the key role the defendant's purpose plays in fair use analysis. The defendant's purpose for using a work is critical in determining the transformativeness of a defendant's use. Certain types of uses regularly support findings of fair use due to their special underlying purposes. Ultimately, a defendant's purpose influences the four-factor analysis of the market effect of the defendant's use and the outcome of a determination of fair use.

The examination of purpose in this Part focuses on how the underlying reasoning for a defendant's use can support a finding of fair use. This deeper analysis goes beyond simply identifying a defendant's purpose and categorizing that purpose; it can be a critical influence in the ultimate determination of fair use.

A.

Evolution of Transformative Use: A Focus on Different Purpose

The determinations of transformative use in Schwegman and Winstead fit within an evolving focus on and interpretation of transformative use that has developed over the twenty years since the Supreme Court's decision in Campbell. This focus concentrates on the defendant's purpose in using the work. The Supreme Court's 1994 adoption of Judge Pierre Leval's transformative use analysis 89 altered courts' overall treatment of § 107's

86.

Id. 87.

Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *11 (N.D. Tex. Dec. 3, 2013).

88.

Id. at *12.

89.

In Campbell, the Supreme Court quoted Judge Leval's influential article, Toward a Fair Use Standard, in its discussion. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994) (quoting Pierre N. Leval, Toward a Fair Use Standard, 103 HARV. L. REV. 1105, 1111 (1990)). The Court stated that in addressing the first factor, the "central purpose" is to determine "whether the new work merely 'supersede[s] the objects' of the original creation, or instead adds

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four factors in fair use cases. 90 Studies of fair use decisions have determined that transformative use "overwhelmingly drives fair use analysis in the courts today." 9 ' The Court's discussion of transformative use did not provide a clear definition, 9 2 leaving the task to interpretation in future cases.

Studies focused on courts' application of transformative use analysis have determined that in later cases, courts have predominately focused on the purpose of the defendant's work rather than the content. 93 It is a different purpose, "not new expressive content," that is crucial. 9 4 Further, there are a significant number of cases finding a transformative use when the defendant copied the entire work without alteration and used it for a different 95

purpose.

Recent Second Circuit cases demonstrate the continuing focus on the defendant's purpose as a key part of the transformative use analysis. In something new, with a further purpose or different character, altering the first with new expression, meaning, or message; . . . in other words, whether and to what extent the new work is 'transformative."' Id. (citations omitted) (quoting Leval, supra, at 1111).

90.

See Neil Weinstock Netanel, Making Sense of Fair Use, 15 LEWIS & CLARK L. REV. 715, 719 (2011).

91.

Id. at 734, 736, 746; see also Michael D. Murray, What Is Transformative? An Explanatory Synthesis of the Convergence of Transformation and Predominant Purpose in Copyright Fair Use Law, II CHI.-KENT J. INTELL. PROP. 260, 261 (2012) ("The transformative test . . . has become the defining standard for fair use."); Matthew Sag, PredictingFair Use, 73 OHIO ST. L.J. 47, 84 (2012) ("[E]vidence . . . confirms the centrality of transformative use."). This dominance arose after 2005. Netanel, supra note 90, at 734. Initially, commentators grappled with the lack of clarity in decisions following Campbell that applied the transformative use analysis.

Matthew D. Bunker, Transforming the News: Copyright and Fair Use in News-Related Contexts, 52 J. COPYRIGHT Soc'Y U.S.A. 309, 326 (2005) ("Criteria for transformativeness seem underdeveloped, if not absent."); Diane Leenheer Zimmerman, The More Things Change, the Less They Seem "Transformed": Some Reflections on Fair Use, 46 J. COPYRIGHT Soc'Y U.S.A. 251, 251 (1998) ("[T]he use of the term [transformative] seemed governed by no set meaning, and the conclusions reached about transformativeness-its presence or absence-were wildly divergent.").

Commentators on overall fair use analysis also found that decisions were unpredictable.

David Nimmer, "Fairestof Them All" and Other Fairy Tales of Fair Use, 66 LAW & CONTEMP. PROBS., 263, 280 (2003) ("[H]ad Congress legislated a dartboard rather than the particular four fair use factors . . . it appears that the upshot would be the same."). Later empirical studies demonstrated that fair use analysis is not "arbitrary and ad hoc." Netanel, supra note 90, at 718.

These later studies were: (1) Barton Beebe, An Empirical Study of U.S. Copyright Fair Use Opinions, 1978-2005, 156 U. PENN. L. REV. 549 (2008); (2) Netanel, supra note 90; (3) Sag, supra; and (4) Paula Samuelson, Unbundling Fair Uses, 77 FORDHAM L. REv. 2537 (2009).

92.

Netanel, supra note 90, at 746. In particular, it was unclear whether to be transformative, a work should have a different purpose from the original, a different character, or both. See id. at 746-47; Rebecca Tushnet, Copy This Essay: How Fair Use Doctrine Harms Free Speech and How Copying Serves It, 114 YALE L.J. 535, 546 (2004) (expressing concerns that transformative use required "new, critical meaning").

93.

See Murray, supra note 91, at 261; Netanel, supra note 90, at 747; R. Anthony Reese, Transformativeness and the Derivative Work Right, 31 COLUM. J.L. & ARTS 467, 485 (2008).

Netanel, supra note 90, at 747.

94.

95.

See id.; Reese, supra note 93, at 485.

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'

2014, the Second Circuit held, in two very different cases, that the defendant's use of an unaltered work was transformative because the use served a different purpose from the original use. In Swatch Group Management Services, Ltd. v. Bloomberg, L.P. ,96 Bloomberg distributed to its subscribers an unauthorized copy of a recorded Swatch conference call involving company executives and investment analysts. 97 Bloomberg distributed an exact copy of the recording without any added commentary or alterations.98 The Second Circuit determined that Bloomberg's use and distribution of the recording were fair use. 99 The focus of the court's firstfactor analysis was on the different message and purpose of Bloomberg's dissemination. 00 The court decided that Bloomberg's use of the work was transformative without changes or added commentary solely due to its different purpose.' 0 Later in 2014 the Second Circuit again focused on the defendant's purpose in a case involving a very different type of use than that in Swatch Group v. Bloomberg. In Authors Guild, Inc. v. HathiTrust, the Second Circuit ruled that the copying of copyrighted works for a searchable, fulltext database and for providing digital access to the "print disabled" 0 2 constituted fair use. 0 3 In its first-factor analysis, the court emphasized that 96.

Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P. (Swatch Grp. II), 756 F.3d 73 (2d Cir.), amending and superseding (Swatch Grp. 1), 742 F.3d 17 (2d Cir. 2014). In the earlier opinion, the court noted that uses may not be transformative but can still be fair use, Swatch Grp. 1, 742 F.3d at 28. The court in Swatch Grp. I did not discuss a different purpose as a basis for determining transformative use. See id. at 28-30. The May 30th opinion contains substantial additional discussion of the defendant's purpose and the transformativeness of this purpose. See Swatch Grp. 1!, 756 F.3d at 84-86.

97.

Swatch Grp. II, 756 F.3d at 78-79. The call was to discuss company earnings and was by invitation only. Swatch Grp. I, 742 F.3d at 22. Media representatives were not invited to join

the call. Id. at 22.

98.

Swatch Grp. II, 756 F.3d at 78, 83.

99.

Id. at 92.

100. Id. at 84-85. Bloomberg disseminated the recording to evidence "newsworthy information of what Swatch Group executives had said." Id. at 85. Swatch Group used the call to assure analysts of the reliability of its previously announced earnings. Id. The Second Circuit contrasted Bloomberg's message ("This is what they said") with Swatch's message ("This is what you should believe"). Id. Bloomberg's different purpose gave its "use at least an arguably transformative character." Id. The court also noted that Bloomberg's use of the recording was "in the nature of news reporting" and "served the important public purpose" of circulating valuable financial information. Id. at 82, 92.

101. Id. at 84. The court of appeals cited A. V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 639 (4th Cir. 2009), and Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1165 (9th Cir. 2007). The courts in these decisions determined that the defendants' uses were transformative despite the lack of alteration of the work. See infra discussion accompanying notes I17-122.

102. "Print disabled" is a term that refers to individuals with "any disability that prevents [them] from effectively reading printed material." Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 91 (2d Cir. 2014).

103. Id. at 105.

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"a transformative work is one that serves a new and different function from the original work and is not a substitute for it." 04 The court determined that the creation of the database was a "quintessentially transformative use.", '0 The defendants' purpose was to create a searchable database while the authors' purpose was to provide access to the content of the works.' 06 The court concluded that "the full-text search function does not 'supersede[ ] the objects [or purposes] of the original creation.'" 0 7 Notably, the court added "or purposes" to the quote from Campbell that focuses on substitution for the work itself. 08 While the court found that the creation of the full-text database was a "transformative use," it rejected the district court's decision that providing access to the print disabled was transformative.' 09 The Second Circuit's reasoned that providing access to the print disabled simply expanded the number of possible users for the same purpose that the authors created the original works." 0 Converting text to a more accessible format did not change the purpose. Although providing access to the print disabled was not a transformative use, it was still a valid purpose that favored fair use."' The Second Circuit found the defendants' purpose to be a critical element in its first-factor analysis.112 In Swatch Group and HathiTrust, the Second Circuit affirmed that a use could be transformative without any changes in the original work if the defendant's purpose is different from the original purpose. In both cases the court grounded its analysis in its previous decisions and other circuit court opinions. One of the decisions it cited was Bill GrahamArchives v. Dorling 104.

Id. at 96. The court of appeals disagreed with the district court that simply providing "[a]dded value or utility" would constitute a transformative use. Id. Id. at 97.

105.

106.

See id. The defendants scanned entire works to build a searchable database. Id. at 9092. Although the entire work was in the database, HathiTrust's search engine did not provide any access to the text of a work unless the copyright holder had given permission. Id. at 91. There was no evidence that the authors created the works for "the purpose of enabling text searches." Id. at 97. The district court had determined that the purpose of the database was "entirely different" from the original purpose for the authors' works. Authors Guild, Inc. v. HathiTrust, 902 F. Supp.

2d 445, 460 (S.D.N.Y. 2012), affd in part, vacated in part, 755 F.3d 87 (2d Cir. 2014) ("[T]he purpose [was] superior search capabilities rather than actual access to copyrighted material.").

107.

Authors Guild, 755 F.3d at 97 (alterations in original) (quoting Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994)).

108.

See id. The Supreme Court in Campbell was quoting Folsom v. Marsh, 9 F. Cas. 342, 348 (Cir. Ct. D. Mass. 1841). Campbell, 510 U.S. at 579.

Authors Guild, 755 F.3d at 101.

109.

110.

Id. 111.

Id. at 102. The court of appeals noted that the legislative history of § 107 expressly identified the making of free copies for the print disabled as an example of fair use. Id. (citing H.R. REP. No. 94-1476, at 73 (1976), reprintedin 1976 U.S.C.C.A.N. 5659, 5686)).

Id. at 97. While the defendants did not change the original works, the court of appeals 112. noted that the search capabilities in the database added "something new" with a different purpose and character. Id. The focus of the decision, however, was on the defendants' purpose.

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Kindersley Ltd."' In that case, the Second Circuit held that the use of miniaturized, unaltered images of posters in a biographical work was "separate and distinct from the original . . purpose for which the images were created."ll 4 This "transformatively different" use supported a finding of fair use under the first-factor analysis." 5 The Second Circuit in Swatch Group and HathiTrust also enumerated cases in other circuits that had followed this transformative use analysis." 6 These references show the continuing development and support for finding transformative use based solely on a different purpose.

All of the cases that the Second Circuit referenced in Swatch Group and HathiTrust rely on the transformative use analysis in Campbell,"' but further clarify its application. The Fourth Circuit summarized the analysis in A. V. ex rel. Vanderhye v. iParadigms, LLC this way: "The use of a copyrighted work need not alter or augment the work to be transformative in nature. Rather, it can be transformative in function or purpose without altering or actually adding to the original work.""'8 The Ninth Circuit relied on this same analysis in finding transformative use in two cases. Perfect 10, Inc. v. Amazon.com, Inc. and Kelly v. Arriba Soft Corp., both involved the use of low-resolution thumbnail versions of copyrighted images as Internet search tools."' The Ninth Circuit held in both cases that the use of the images was transformative, even though there were no alterations in those images.1 20 In Kelly, the Ninth Circuit held that the defendant's use was transformative because the defendant had "created a different purpose for the images" and was "not superseding" the plaintiffs use.121 In Perfect 10, 113.

Id. at 97-100; Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006).

114. Bill Graham Archives, 448 F.3d at 610.

115.

Id. at 612.

116.

Authors Guild, 755 F.3d at 97-98; Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P. (Swatch Grp. 11), 756 F.3d 73, 84(2d Cir.), amending and superseding (Swatch Grp. 1), 742 F.3d 17 (2d Cir. 2014).

117.

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).

118.

A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 639 (4th Cir. 2009). In iParadigms,the defendant used the full text of student papers to create a searchable database for determining plagiarism. Id. at 641-42. There was no alteration in the papers. Id. at 639. Users of the database could not see the papers themselves but could see matches with language in works they submitted for comparison. See id. at 634. The court determined that the defendant's use of the works was transformative because it "had an entirely different function and purpose than the original works." Id. at 639-40.

119.

Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1165 (9th Cir. 2007); Kelly v.

Arriba Soft Corp., 336 F.3d 811, 819 (9th Cir. 2003).

120.

Perfect 10, 508 F.3d at 1165; Kelly, 336 F.3d at 819.

121.

Kelly, 336 F.3d at 819. The defendant's use of the image was to "improve access to [information] on the [I]ntemet." Id. at 818. The plaintiffs purpose was "artistic expression." Id. at 819.

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the Ninth Circuit followed its reasoning in Kelly, reiterating that "even making an exact copy of a work may be transformative so long as the copy serves a different function than the original work." 22 Courts within the Second Circuit as well as other circuit courts have consistently demonstrated the willingness to designate use of unaltered works as transformative when the defendant's purpose is different from the original.1 23 These cases substantiate the trend identified in studies by Professor Reese and Professor Netanel that the key factor in determining transformative use is "whether the use is for a different purpose than that for which the copyrighted work was created," not the addition of "new expressive content."l 24 B.

Purpose as Predictive

Commentators have suggested that there needs to be further guidance as to whether a particular purpose will qualify as transformative in order to support a finding of fair use under the first factor. 125 The goal is greater 122.

Perfect 10, 508 F.3d at 1165 (citing Kelly, 336 F.3d at 818-19). In Kelly and Perfect 10, the Ninth Circuit relied on a First Circuit case, Ntuiiez v. CaribbeanInt'l News Corp., 235 F.3d 18 (I st Cir. 2000). In Nuk$ez, the defendant used unaltered photos of a female model as the focus of a newspaper story about the photos. Id. at 21. The First Circuit determined that the use of the photos was transformative because the defendant's use (print photos in newspaper) was different from the original purpose for the photos (use in a modeling portfolio). Id. at 23. The Second Circuit cited Nuliez in both Swatch Group and Authors Guild. Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P. (Swatch Grp. 11), 756 F.3d 73, 84 (2d Cir.) (citing Nuifiez, 235 F.3d at 22-23), amending and superseding (Swatch Grp. 1), 742 F.3d 17 (2d Cir. 2014); Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 95 (2d Cir. 2014) (citing Nuifez, 235 F.3d at 25).

123.

Two additional decisions fit with these cases, although they include more discussion of additions to the copied works. The U.S. District Court for the Southern District of New York found transformative use in two cases in which the defendants had a different purpose for their use and also added "something new" to the copied works. In Authors Guild, Inc. v. Google Inc., the district court held that Google's digitization of entire books to create a search tool was "highly transformative." Authors Guild, Inc. v. Google Inc., 954 F. Supp. 2d 282, 291 (S.D.N.Y. 2013).

Google's use of these unaltered works was to create "pointers" to direct users to books. Id. This was a different purpose than the purpose for the creation of the original works. Id. The court cited Perfect 10, Kelly and Bill GrahamArchives in its discussion of transformative use. Id. In another case, the U.S. District Court for the Southern District of New York determined that the inclusion of digitized legal briefs, memoranda, and documents in searchable databases was fair use. White v. West Publ'g Corp., No. 12 CIV. 1340 JSR, 2014 WL 3057885, at *1, *4 (S.D.N.Y. July 3, 2014). The court determined that the database providers' use of the digitized documents was transformative. Id. at *2. The database providers used the documents to provide "an interactive legal research tool." Id. This purpose was different from the reason for the original creation of the documents, which was to provide legal services. Id. The defendants also "'add[ed] something new"' to the documents through coding, linking, and other modifications. Id. 124.

Netanel, supra note 90, at 747; Reese, supra note 93, at 485. Professor Netanel notes that adding or modifying expressive content can be helpful, but it is a different purpose that is critical to the determination of transformative use. Netanel, supra note 90, at 747.

Netanel, supra note 90, at 749-50; Reese, supra note 93, at 494-95.

125.

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predictability regarding the applicability of fair use in a given situation. 12 6 Reliance on the designation of a use as transformative and basing this designation on a difference in purpose can be problematic. In some cases, there remains a difference between a transformative use that requires an alteration in the work and a use that is simply different. Despite the focus on purpose and the acceptance of fair use, in the absence of alteration there remains an impression that a defendant's use of a work should involve some change in the original. 2 7 Professor Netanel discussed that determining whether a use is transformative requires comparing the plaintiffs purpose for the original work and the defendant's purpose in using the work. 128 He submits that the focus should be on the difference in purpose and not on the nature "of the defendant's use in and of itself." 29 Yet, as he notes, "there seem to be certain types of uses that correlate positively with a finding of fair use."l 30 This correlation indicates that the specific nature of the defendant's use is relevant to predicting a court's analysis in a fair use case. Professor 126.

See Netanel, supra note 90, at 718. Greater predictability could help reduce what Professor Gibson refers to as "doctrinal feedback." James Gibson, Risk Aversion and Rights Accretion in Intellectual Property Law, 116 YALE L.J. 882, 898-900 (2007). Continuing uncertainty as to whether certain uses of copyrighted works would qualify as fair use can result in risk-averse users paying for licenses they do not need. See id. at 899-900.

127.

See, e.g., Images Audio Visual Prods., Inc. v. Perini Bldg. Co., 91 F. Supp. 2d 1075, 1081 (E.D. Mich. 2000) (determining that the use of a work was not transformative and then discussing whether the defendant used the work for a different purpose). Some courts seem hesitant about applying the transformative label to a use involving no alteration or addition. In Schwegman, Judge Keyes maintained that the first factor favors fair use because of the defendants' different purpose for using the works, even though the "lack of alteration may make the label 'transformative use' a messy fit . .. since the 'transformative use' label is most apt when a secondary work . . . actually alters the content." Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 24 (D. Minn. July 30, 2013) (emphasis added), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013). The word "transform" suggests a change in character of the work rather than use. In Swatch Group v. Bloomberg, the Second Circuit discussed that the defendant's unaltered use had "at least an arguably transformative character" and concluded that the use was fair "regardless of how transformative" it was. Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P. (Swatch Grp. II), 756 F.3d 73, 85 (2d Cir.), amending and superseding(Swatch Grp. 1), 742 F.3d 17 (2d Cir. 2014). This ambivalent language indicates a hesitancy to designate as transformative those uses that do not include an alteration of a work.

Netanel, supra note 90, at 749-50.

128.

129.

Id. 130.

Id. at 750. A closer look at the defendants' purposes in the transformative use cases validates the observation that certain purposes favor a finding of fair use. For example, HathiTrust,Perfect 10, Kelly, iParadigms,Authors Guild v. Google, and White v. West Publishing involved digitizing copyrighted works to create searchable databases. See discussion supra notes 119, 123 and accompanying text; A.V. ex rel. Vanderhye v. iParadigms, LLC, 562 F.3d 630, 63435 (4th Cir. 2009); Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1157 (9th Cir. 2007); Kelly v. Arriba Soft Corp., 336 F.3d 811, 815, 815-16 (9th Cir. 2003). The Second Circuit concluded in HathiTrust that "the creation of a full-text searchable database is a quintessentially transformative use." Authors Guild, Inc. v. HathiTrust, 755 F.3d 87, 97 (2d Cir. 2014).

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Samuelson classified specific uses into "policy-relevant clusters"131 and

determined that "it is generally possible to predict whether a use is . . . fair or unfair" by analyzing the use "in light of cases previously decided in the same policy cluster." 32 Identifying a defendant's use as part of a common category of uses can, at the least, support an argument that a court should treat the defendant's use the same.' 3 3 This categorization could also help overcome uncertainty regarding whether a use involving no alterations in the work is transformative.' 3 4 As an illustration of fair use and categorization, in Schwegman and Winstead, the defendants' use fit within a recognized category meriting fair use treatment. The judges in those cases determined that the defendants' use of the copyrighted works was for the purpose of providing evidence in a quasi-judicial proceeding.' 3 1 Courts have consistently recognized fair use when defendants used copyrighted works without permission in connection with judicial and quasi-judicial proceedings.' 3 6 This usage includes 131.

Samuelson, supra note 91, at 2541. See id. at 2544-46 for a summary of the clusters.

132.

Id. at 2542. In discussing the clusters, Professor Samuelson identified "policies underlying modem fair use law" that support the uses within each policy cluster. Id. at 2541-42.

133.

Paul Goldstein, Fair Use in Context, 31 COLUM. J.L. & ARTS 433, 442-43 (2008); see also Michael J. Madison, A Pattern-OrientedApproach to Fair Use, 45 WM. & MARY L. REV. 1525, 1667 (2004).

134.

Professor Samuelson refers to use of a work without an alteration in the work as an "orthogonal use[]" and separates these uses from truly transformative uses. Samuelson, supra note 91, at 2544 n.40, 2593. Professor Samuelson suggests that "[a]lthough Campbell defines 'transformative' in a way that encompasses uses for different purposes, copyright law will be more comprehensible and coherent if iterative copying for orthogonal purposes is distinguished from truly transformative uses of prior works." Id. at 2557.

135.

See discussion supra notes 45-50 and accompanying text.

136.

Netanel, supra note 90, at 750; Samuelson, supra note 91, at 2592-94; see also Madison, supra note 133, at 1659 (offering examples of uses "in the context of rules regulating litigation and trial" that were recognized as fair). Congress identified the "reproduction of a work in .. .judicial proceedings" as an example of "the sort of activities the courts might regard as fair use under the circumstances." H.R. REP. No. 94-1476, at 65 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5678; see also ALAN LATMAN, COPYRIGHT LAw REVISION, STUDIES PREPARED FOR THE SUBCOMM. ON PATENTS, TRADEMARKS, & COPYRIGHTS OF THE S. COMM. ON THE JUDICIARY, 86TH CONG., STUDY NO. 14: FAIR USE OF COPYRIGHTED WORKS 13 (Comm.

Print 1960) ("It would seem that great latitude would be accorded [use of copyrighted material in connection with pending litigation]."); 4 MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT § 13.05[D][2], at 13-230.14 (2014) ("Works are customarily reproduced in various types of judicial proceedings . . . and it seems inconceivable that any court would hold such reproduction to constitute infringement either by the government or by the individual parties responsible for offering the work in evidence.").

The exceptions to this recognition occur when the defendant uses a copyrighted work that the plaintiff prepared for the litigation. E.g., Images Audio Visual Prods., Inc. v. Perini Bldg.

Co., 91 F. Supp. 2d 1075, 1083 (E.D. Mich. 2000) (noting that the defendant made extra copies of photographs that the plaintiff created specifically for arbitration proceedings). In these situations, the purpose is no longer different because the plaintiff created the original work for the same purpose as the defendant's use: to serve as evidence.

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submitting a copyrighted work as evidence1 37 and using a copyrighted work for trial-related purposes. 138 Many of the cases do not provide analysis but simply state, with little or no citation, that the defendant's unauthorized use of a work in a judicial proceeding is fair use.' 3 9 The opinions that provide fair use analysis in these cases focus on the purpose for the use of the copyrighted works in proceedings. 4 0 The defendant's use of the works in these cases is evidentiary.14' The courts focus on how this use differs from the original use for the work.1 42 These cases illustrate how establishing that a defendant's use is within a recognized category can greatly strengthen a finding of fair use, even if

&

137.

E.g., Bond v. Blum, 317 F.3d 385, 389-90 (4th Cir. 2003) (involving a manuscript of biographical work submitted in child-custody proceeding as evidence regarding author's fitness for custody); Jartech, Inc. v. Clancy, 666 F.2d 403, 405, 407 (9th Cir. 1982) (involving surreptitiously obtained excerpts of films used as evidence in nuisance proceeding).

138.

E.g., Religious Tech. Ctr. v. Wollersheim, 971 F.2d 364, 367 (9th Cir. 1992) (per curiam) (involving an attorney who used copied documents to prepare witnesses); Sturgis v.

Hurst, No. 07-11301, 2007 WL 4247634, at *2 (E.D. Mich. Dec. 4, 2007) (involving a defendant who used excerpts from plaintiffs work for cross-examination); Healthcare Advocates, Inc. v.

Harding, Earley, Follmer & Frailey, 497 F. Supp. 2d 627, 636, 639 (E.D. Pa. 2007) (involving copies of archived screenshots of earlier version of website at issue in litigation used to prepare for trial); Lucent Info. Mgmt., Inc. v. Lucent Techs., Inc., 5 F. Supp. 2d 238, 242-43 (D. Del. 1998) (involving use of copyrighted letter to conduct surveys regarding possible trademark confusion), aff'd, 186 F.3d 311 (3d Cir. 1999).

139.

E.g., Stephens v. Hayes, 374 F. App'x 620, 624 (6th Cir. 2010); Religious Tech Ctr., 971 F.2d at 367.

E.g., Bond, 317 F.3d at 394-395; Jartech, Inc., 666 F.2d at 406; Sturgis, 2007 WL 140.

4247634, at *2.

141.

See infra text accompanying notes 206-241 for a discussion of the use of copyrighted works as evidence in quasi-judicial and judicial proceedings. Professor Samuelson categorizes the use of copyrighted works in quasi-judicial and judicial proceedings as one of several "foreseeable uses" that Congress identified could merit fair use protection. Samuelson, supra note 91, at 258788. The policies that underlie this use are "truth telling" and "truth-seeking." Id. at 2546.

142.

The judges in Schwegman and Winstead discussed the defendants' use of the works as transformative use. Am. Inst. of Physics v. Winstead PC, No. 3:12-cv-1230-M, 2013 WL 6242843, at *5 (N.D. Tex. Dec. 3, 2013); Am. Inst. of Physics v. Schwegman, Lundberg Woessner, P.A., No. 12-528 (RHK/JJK), at 24-25 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013). This discussion is not typical in cases involving use of copyrighted works in quasi-judicial and judicial proceedings. While judges discuss the fair use factors in these cases, they often do not discuss transformative use. See, e.g., Bond, 317 F.3d at 394-95; Jartech, Inc., 666 F.2d at 406-07; Sturgis, 2007 WL 4247634, at *2. Some decisions were issued before Campbell, but the decisions after Campbell also fall into this category. See, e.g., Bond, 317 F.3d at 394-95 (discussing factors only and decided after Campbell); Jartech, Inc., 666 F.2d at 406-07 (discussing factors only and decided before Campbell). The opinions, however, do discuss the purpose for the use. See, e.g., Bond, 317 F.3d at 394-95; Jartech, Inc., 666 F.2d at 406-07; Sturgis, 2007 WL 4247634, at *2. In these cases, the defendants have not altered the original work. See, e.g., Bond, 317 F.3d at 396; Jartech, Inc., 666 F.2d at 406-07; Sturgis, 2007 WL 4247634, at *2. Most decisions focus on the strong support for the use of works in judicial proceedings and do not consider the lack of alteration. See infra text accompanying notes 219-242.

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the transformativeness of the use is unclear. Many of these cases, however, hinge simply on the identification of purpose and not on a deeper analysis of that purpose. Determining whether the defendant's purpose fits within an identified group of uses that have supported fair use in the past can bolster a claim for fair use. It is essential, however, to do more than just identify whether a purpose fits within a group and whether it is different from the plaintiffs purpose. Identifying a use within a "policy cluster," to use Professor Samuelson's categorization, is a start.143 Delving deeper into the underlying reasoning and policy for a purpose and why that purpose is within a policy cluster "provides another dimension" that "sharpens awareness" of how to analyze the statutory factors in a particular case.114 This analysis focuses on policy and the societal benefits of the use rather than simply on a categorical fit or a designation of transformativeness. 145 C.

Purposeand FourthFactorAnalysis

An understanding of the underlying policy and social benefits of a use can become critical when considering the fourth factor, particularly if a court determines that the use is not "transformative" due to a lack of alteration in the work. Identifying a purpose that courts often recognize as fair use may be inadequate once a court considers the fourth-factor analysis.

While Judge Leval referred to the first factor as "the soul of fair use,"l 4 6 he also noted "the close interdependence of the first and fourth factors."l 47 The fourth factor addresses "the effect of the use upon the potential market for or value of the copyrighted work."1 48 This evaluation focuses on whether the defendant's use substitutes for the original work and "usurps the market of the original." 4 9 The first factor, in Judge Leval's view, focuses on whether the defendant's use transforms the "material into a new purpose or message, distinct from [the] purposes of the original." 5 0 The more that the secondary use is "for new transformed purposes, the less

143.

Samuelson, supra note 91, at 2542.

144.

Id. 145.

Professor Loren has emphasized that courts should focus on how a use promotes the goals of copyright rather than on whether the use is transformative or nontransformative. Lydia Pallas Loren, Redefining the Market Failure Approach to Fair Use in an Era of Copyright PermissionSystems, 5 J. INTELL. PROP. L. 1, 31-32 (1997).

146.

Leval, supra note 89, at 1116.

147.

Pierre N. Leval, Campbell v. Acuff-Rose: Justice Souter 's Rescue of Fair Use, 13 CARDOZO ARTS & ENT. L.J. 19, 22 (1994).

148.

17 U.S.C. § 107(4) (2012).

149.

NXIVM Corp. v. Ross Inst., 364 F.3d 471, 481-82 (2d Cir. 2004) (citing Campbell v.

Acuff-Rose Music, Inc., 510 U.S. 569, 593 (1994)).

150.

Leval, supra note 147, at 22.

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15 likely it is that appropriative use will be a substitute for the original."s 152 There would then be less of an impact on the market for the original.

Whether the defendant's use of the copyrighted work results in a substitution for the original requires a review of the defendant's purpose. In some cases, the court needs to conduct very little additional review of the defendant's purpose beyond the initial analysis under the first factor because there is a lack of market impact. The use of copyrighted works in quasi-judicial and judicial proceedings is a good example of when courts have needed to conduct only limited additional analysis of purpose. In most cases in which defendants used copyrighted works for judicial or quasijudicial proceedings, the fourth factor favored the defendants. 153 The use of the work in these cases had little or no effect on the market for the work, 154 if a market even existed.155 In the Schwegman and Winstead cases, the

151.

Id. at 22-23 (emphasis omitted).

152.

Id. 153.

See Samuelson, supra note 91, at 2596. Professor Samuelson notes that "[i]nvestigatory and litigation uses are, moreover, generally unlikely to harm the market for a work. In view of this, courts should probably presume that investigation and litigation uses of works are fair." Id. The use of copyrighted works for judicial and quasi-judicial proceedings is for a different purpose unrelated to the original use. Images Audio Visual Prods., Inc. v. Perini Bldg. Co. Inc., 91 F. Supp. 2d 1075, 1081-82 (E.D. Mich. 2000) (citing NIMMER & NIMMER, supra note 136, § 13.05[D][2], at 13-230.14). The exception is when the work was prepared specifically for litigation purposes. See id. at 1082, 1085-86. In that situation, the use is the same and competes in the same market. See id.

154.

E.g., Jartech, Inc. v. Clancy, 666 F.2d 403, 407 (9th Cir. 1982). In that case, an investigator surreptitiously recorded parts of films shown in a movie theater. Id. at 405. The plaintiffs held the copyright for the films. Id. The clips were later used as evidence in a nuisanceabatement proceeding. Id. While there was a market for the films, the use of the clips in no way substituted for the original films or affected the market. Id. at 407.

155.

Several cases illustrate the lack of a market for the original work. For example, Denison v. Larkin, 1:14-cv-01470, 2014 U.S. Dist. LEXIS 111902 (N.D. Ill. Aug. 13, 2014) involved the use of copies of portions of an attorney's blog in a disciplinary proceeding. The court, in finding fair use, discussed that the use of the copies was for litigation. Id. at *14. There was no evidence of a market and no effect on "any perceived market." Id. at * 19.

In Scott v. WorldStarHipHop, Inc., No. 10 Civ 9538(PKC)(RLE), 2011 WL 5082410 (S.D.N.Y. Oct. 25, 2011), the plaintiff, a student, engaged in an altercation in a classroom with two fellow students. Id. at *1. Another student videotaped the altercation on a cell phone. Id. The plaintiff purchased, for one dollar, a copy of the cell phone video recording from the person who made the recording. Id. at *8. The plaintiff registered the video and then claimed copyright infringement when the defendants used a copy of the recording as evidence in a disciplinary proceeding. Id. at *2. The court found that there was likely no market for the video. Id. at *8. In Bond v. Blum, 317 F.3d 385 (4th Cir. 2003), the defendants intended to introduce the plaintiffs unpublished manuscript as evidence in a child-custody proceeding. Id. at 393. The plaintiff registered the work for the purpose of prohibiting its use in the proceeding. Id. at 391. There was no evidence that the introduction of the manuscript into evidence would affect its marketability.

Id. at 396. The district court noted that the use might perversely increase the value of the work. Id. at 396-97.

These last two cases also illustrate the use of copyright as a tool to control the use of a work in litigation or other proceedings. The primary concern of the plaintiff is not the effect on the

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judges found that the defendants' use of the articles had no effect on the market for the original articles or journals in which they appeared.' 56 There was also no effect on the incentive of the authors to produce articles.' 5 7 As in other cases involving the use of copyrighted works as evidence, the lack of effect on the market for the original work favored fair use. For most cases involving the use of a copyrighted work as evidence, the inquiry into market effect ends with an assessment that there is no substitution for the original work or usurpation of the market. The basic identification of the defendant's purpose as the use of the work in connection with a quasijudicial or judicial proceeding is enough for the limited fourth-factor analysis.

In Schwegman and Winstead, however, the plaintiffs also argued that they lost fee revenue when the defendants made copies of the articles.' 58 The plaintiffs noted that other patent firms were purchasing licenses through the Copyright Clearance Center, and inferred that the purchases were in connection with patent applications.' 59 The plaintiffs argued that there was "a ready market or means to pay for the use" and that this evidence should weigh "heavily against fair use." 6 0 In Texaco, the court noted the existence of a "workable market for institutional users to obtain licenses" to produce copies of articles.1 6' Since there was a "ready market," the court determined that Texaco's use was "less fair" and ultimately that plaintiffs had sustained substantial harm due to lost revenue. 62 The plaintiffs in Schwegman also referenced Princeton University Press v. market for the work but on stopping the use of the work in a proceeding. See Wendy J. Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and [is Predecessors, 82 COLUM. L. REV. 1600, 1634-35 (1982) (discussing market failure when a person's refusal to allow use of a copyright work is for reasons not related to the goals of copyright); see also Stephen McIntyre, PrivateRights and Public Wrongs: Fair Use as a Remedy for Private Censorship,48 GONz. L. REV. 61, 75-76 (2012).

156.

Am. Inst. of Physics v. Winstead PC, No. 3:12-cv-1230-M, 2013 WL 6242843, at *11 (N.D. Tex. Dec. 3, 2013); Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 31 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn.

Aug. 30, 2013).

157.

Schwegman, at 31.

158.

Winstead, 2013 WL 6242843, at *11; Schwegman, at 31-32.

159.

Plaintiffs' Objections Pursuant to Fed. R. Civ. P. 72(A) and Local Rule 72.2(B) to the Magistrate Judge's Report and Recommendation Entered July 30, 2013, at 13 (Aug. 13, 2013), Am. Inst. of Physics v. Schwegman, Lundberg & Woessner, P.A., Civil No. 12-528 (RHK/JJK) (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013) [hereinafter Schwegman Plaintiffs' Objections].

160. Id. (quoting Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 931 (2d Cir. 1994)).

161.

Texaco, 60 F.3d at 930. The court also referred to a "viable market for licensing." Id. 162.

Id. at 931. Particularly after Texaco, courts have considered not only the effect of the use on the market for the original work but also the loss of potential licensing fees. See Mark A. Lemley, Should a Licensing Market Require Licensing?, 70 LAW & CONTEMP. PROBS. 185, 189 (2007).

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Michigan Document Services, Inc. 163 in support of the proposition that the existence of a licensing market and "the potential for destruction of this market by widespread circumvention of the plaintiffs' permission fee system [was] enough .

.

. to negate fair use."1

In Schwegman and Winstead, the plaintiffs' reliance on the availability of a ready license system with current users to negate fair use demonstrates a continuing effort to focus the fourth-factor analysis primarily, or even solely, on the copyright holder's incentives and rewards. Their focus is on whether the use can be paid for, without considering whether the use should be paid for. 165 Scholars have challenged this view, arguing that fair use can apply even when there is a licensing market available.1 66 Courts have also scrutinized the ready market argument more closely and refused in some cases to weigh the fourth factor against defendants even when licensing was available.1 6 7 Still, copyright holders persist in developing and promoting licensing systemsl 68 and arguing for recognition of these systems in fair use 163.

Princeton Univ. Press v. Mich. Document Servs., Inc., 99 F.3d 1381 (6th Cir. 1996) (en banc).

164.

Schwegman Plaintiffs' Objections, supra note 159, at 13-15 (quoting Princeton Univ.

Press, 99 F.3d at 1388) (internal quotation marks omitted).

165.

This statement is based on Matthew Africa's description of the differing approaches taken by the majority and dissent in Texaco: "In effect, the majority asked, 'Can the use be paid for?' By contrast, the dissent asked, 'Should the use be paid for?"' Matthew Africa, Comment, The Misuse of Licensing Evidence in FairUse Analysis: New Technologies, New Markets, and the Courts, 88 CALIF. L. REV. 1145, 1162 (2000).

166.

Wendy J. Gordon, Fair Use Markets: On Weighing Potential License Fees, 79 GEO. WASH. L. REV. 1814, 1820 (2011) ("[lIt is perfectly possible within the rhetoric of markets to make the case for fair use even when licensing revenues for the contested use are physically available . . . ."); Wendy J. Gordon & Daniel Bahls, The Public's Right to Fair Use: Amending Section 107 to Avoid the "FaredUse" Fallacy, 2007 UTAH L. REV. 619, 620 (2007) ("Copyright law needs to make clear that any reproduction . . . can potentially need and deserve fair use, despite the presence of an owner willing to license."); Loren, supra note 145, at 50 ("The fact that a copyright owner has been able to convince others to pay the fee demanded and therefore now can claim to have a 'workable' permission system should not change the analysis."); Africa, supra note 165, at 1148-49 ("[1]t is a mistake to think that just because a use could have been licensed it should have been licensed.").

167.

See, e.g., Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 614-15 (2d Cir. 2006); see also Samuelson, supra note 91, at 2620 (discussing courts' willingness to scrutinize claims for licensing fees).

168.

Licensing possibilities include conveniently linked services, such as linking interlibrary loan services with obtaining a license for a copy of an article. See JAMES S. HELLER, PAUL HELLYER & BENJAMIN J. KEELE, THE LIBRARIAN'S COPYRIGHT COMPANION 86 (2d ed. 2012)

(discussing concerns about the Copyright Clearance Center's "Get It Now" service, which links licensing with an interlibrary loan service used by many libraries). With digital works, the technology exists to track and potentially charge for use on a granular level or per view. See D.R. Jones, Locked Collections: Copyright and the Future of Research Support, 105 LAw LIBR. J. 425, 439-40 (2013) (discussing pay-per-view and other means publishers use to charge for the use of digital works); Loren, supra note 145, at 47-48 n.190 ("Computers give copyright owners the tools to know when someone has accessed a chapter, a page, a paragraph, a sentence, or even a

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analysis. This continuing persistence fosters uncertainty among users and encourages risk-averse behavior.' 69 If a court fails to find that a use is transformative, then the ready market argument is more viable. Still, the court could find that there is not a means of licensing the defendant's type of use and could determine that the use is a fair use even if it is not transformative. Even if in a particular case a court finds there is no licensing for the defendant's type of use, however, there is the suggestion that if a means of licensing became available, the plaintiff may prevail in a future case. So a use that qualifies as a fair use at one time may no longer be a fair use in the future if licensing becomes available. For example, in Cambridge University Press v. Becker, the plaintiff-publishers argued that there was a licensing system available for excerpts of works that university professors placed for students in an electronic reserves system.1 70 The defendants argued that use of the excerpts was fair use.' 7 ' After a bench trial, the district court determined that the defendants' use was for non-profit educational purposes, but was non-transformative.1 7 2 In discussing the fourth factor and the plaintiffs' argument that a means to pay license fees was available, the court favorably quoted Texaco regarding the effect of the

phrase. Computers also allow copyright owners to create systems to monitor those uses and charge the user for increasingly smaller percentages of works."); Alexandra Alter, Your E-Book Is Reading You, WALL ST. J., http://www.wsj.com/articles/SBl000142405270230487030457749095 0051438304 (last updated July 19, 2012, 3:24 PM ET) (describing the kinds of tracking available for e-books).

169.

For a discussion of this user behavior, see Christina Bohannan & Herbert Hovenkamp, IP and Antitrust: Reformation and Harm, 51 B.C. L. REv. 905, 973-74 (2010); Africa, supra note 165, at 1172-73; see also Gibson, supra note 126, at 884; Loren, supra note 145, at 43. Lawsuits can affect the behavior of not only the defendant but also other similarly situated users. As Professor Loren notes, initial settlements and victories can create uncertainty and fear. Loren, supra note 145, at 43. When news of the publisher lawsuits against patent law firms first appeared, commentators speculated that the publishers were "making a test-run.... If the firms fold[ed] their cards and settle[d]," the publisher would bring lawsuits against larger firms. Jeff John Roberts, John Wiley, Physicists Sue PatentLawyers over Journals, GIGAOM (Mar. 1, 2012, 4:21 PM), http://gigaom.com/2012/03/01/419-john-wiley-physicists-sue-patent-lawyers-over-journals/.

One firm did settle, and the Copyright Clearance Center announced the firm signed a license agreement. Press Release, Copyright Clearance Center, Hovey Williams LLP Signs Copyright Clearance Center's Annual Copyright License (June 28, 2012) (the case terminated on June 25, 2012). After the fair use decisions in two of the cases, however, the publishers dismissed all actions. See supra notes 25-27 and accompanying text.

170.

See Cambridge Univ. Press v. Becker, 863 F. Supp. 2d 1190, 1237 (N.D. Ga. 2012), rev'd in part, vacated in part sub nom. Cambridge Univ. Press v. Patton, 769 F.3d 1232 (11th Cir. 2014).

171.

Id. at 1203, 1223.

172.

Id. at 1224-25, 1232. The district court relied on a statement in a footnote of the Campbell case to determine that the use was nontransformative. Id. at 1225 (quoting Campbell v.

Acuff Rose Music, Inc., 510 U.S. 569, 579 n. 11 (1994)).

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availability of a "ready market" on the determination of fair use. 173 The court noted that the plaintiff-publishers' "right, as owners of the copyrights, to collect fees for use of excerpts from their books . .. is a powerful argument countering fair use, which counsels against [the d]efendants' position when excerpts are readily available, in a convenient format, for a reasonable fee, and the fees are not paid." 1 74 In reviewing each of the allegedly infringing uses, the court determined that for some of the uses there was "a ready market" for licensing the use.'17 This fact resulted in the fourth factor analysis "strongly" favoring the plaintiffs in those situations. 176 The Eleventh Circuit, in reviewing the district court's decision, agreed that the defendants' use was not transformative.1 77 The court also determined that the district court appropriately considered license availability. 7 8 The court, however, determined that the district court erred in not giving the fourth factor analysis more weight because "[d]efendants' copying was nontransformative and the threat of market substitution was therefore serious."

79

The discussions of the fourth factor in the district court and Eleventh Circuit opinions in this case suggest that the "right . .. to collect fees" can overpower other factors, such as educational and nonprofit use of works, particularly if the court finds that the use is nontransformative.s 0 In predicting possible fair use outcomes, simply focusing on the purpose of the defendant's use may not be enough to overcome the plaintiffs proof of a licensing market. The defendants should urge the court to apply an analysis

173.

Id. at 1237 (quoting Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 931 (2d Cir. 1994)).

174.

Id. at 1239.

175.

See, e.g., id. at 1258-59 (analyzing the use of THE SAGE HANDBOOK OF QUALITATIVE RESEARCH (Norman K. Denzin & Yvonna S. Lincoln eds., 3d ed. 2005)); id. at 1361-63 (analyzing the use of MICHAEL QUINN PATTON, UTILIZATION-FOCUSED EVALUATION (4th ed.

2008)); see also id. at 1239 (discussing the impact of the availability of licenses on the fourth factor analysis).

176.

Id. at 1259, 1362.

177.

Cambridge Univ. Press v. Patton, 769 F.3d 1232, 1262 (11 th Cir. 2014).

178.

Id. at 1279.

179.

Id. at 1281. The Eleventh Circuit found that the district court conducted a mechanistic review of the four factors, giving each factor equal weight. Id. at 1260, 1283. For this and other reasons, the Eleventh Circuit reversed and remanded the district court's decision. Id. at 1283-84.

180.

Professor Jaszi proposes that educational institutions should focus on describing the transformativeness of educational uses. Peter Jaszi, Fair Use and Education: The Way Forward, 25 L. & LIT. 33, 40, 45 (2013). This is solid advice, since a determination that a use is transformative changes a court's fair use analysis. If a court finds a use not to be transformative, the question is how can a defendant defeat an argument that there is a ready market and means to collect fees.

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of the fourth factor that considers not just whether there is a way to pay for the use, but whether the defendant should pay.'8 1 In Schwegman and Winstead, the judges rejected the plaintiffs' ready market argument that the loss of licensing fees supported a denial of fair use.182 Both judges considered the defendants' purpose in analyzing the fourth factor. In Schwegman, Judge Keyes, relying on Bill Graham Archives v. DorlingKindersley Ltd., 83 provided a lengthy discussion of the close relationship between the defendants' purpose and the fourth factor.184 As in Bill Graham Archives, the availability of licensing did not dictate that the defendants had to pay.' 85 Also, since the defendants' use was within a "transformative market," the loss of any fees did not result in market harm to the plaintiffs.' 86 In his summary analysis of the four factors, Judge Keyes noted that the defendants' use provided a public benefit that promoted the progress of science and useful arts.'1 8 While Judge Lynn in Winstead also discussed the defendants' transformative purpose in analyzing the fourth factor, she found that "[lt]he determinative issue, however, [was] the public benefit associated with [the] defendants' use of NPL copies."' This benefit outweighed any potential gain to the plaintiffs from fees.' 8 9 D.

FairUse Markets

1.

Definition of a FairUse Market

The types of fourth-factor analysis, considerations, and results in cases like Schwegman and Winstead evoke Professor Gordon's discussion of the concept of "fair use markets."l 90 This concept provides a means to consider whether a defendant should pay a fee if a licensing system exists."' The Second Circuit stated the concept in Castle Rock Entertainment, Inc. v.

&

181.

See discussion infra Part Ill.D. 182.

Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *12 (N.D. Tex. Dec. 3, 2013); Am. Inst. of Physics v. Schwegman, Lundberg Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 31-33 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

183.

Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006).

184.

Schwegman, at 33-34.

185.

Id. at 34.

186.

Id. at 33-34.

187.

Id. at 41-42.

188.

Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *12 (N.D. Tex. Dec. 3, 2013).

189.

Id. 190.

See Gordon, supra note 166, at 1816.

191.

See id. at 1820 n.37.

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CarolPublishing Group, Inc.,' 92 and applied it in Bill Graham Archives.19 3 A fair use market is one in which the availability of licensing will not preclude fair use. 9 4 Further, in some circumstances a court might not consider the availability of licensing at all in determining the fourth factor.'" The Second Circuit in Bill Graham Archives focused on transformative use as the criterion for a fair use market.' 96 Professor Gordon finds this criterion "problematic" and "incomplete" due to the continuing lack of clarity and definition of the term transformative and its application.1 97 She redefines a fair use market as "a market in which we cannot rely on the decisions of copyright holders to take into account all the relevant values and interests, or as a setting where available nonmarket interactions and institutions are likely to do a better job in advancing [p]rogress."l 98 This definition covers transformative and nontransformative uses.1 99 The removal of transformativeness as a criterion is important because it forces a deeper analysis and review of the defendant's use. The transformative label is not intended to offer a shield, but its absence is no longer a determinant of the strength of the defendant's fair use argument.200 The analysis to determine the existence of a fair use market requires a review of the defendant's purpose, not just whether the purpose is different or even whether it adds something new. The review focuses on the values,

&

192. See Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 145 n.l I (2d Cir. 1998).

193. See Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 614-15 (2d Cir. 2006). The court stated that "a copyright holder cannot prevent others from entering fair use markets merely 'by developing or licensing a market for parody, news reporting, educational or other transformative uses of its own creative work. . . . [C]opyright owners may not preempt exploitation of transformative markets."' Id. (second & third alteration in original) (quoting Castle Rock Entm't, Inc., 150 F.3d at 145 n. 11). The district court in its opinion in Bill Graham Archives also quoted Castle Rock. Bill Graham Archives, LLC v. Dorling Kindersley Ltd., 386 F. Supp. 2d 324, 328, 330, 332 (S.D.N.Y. 2005), affd sub nom. Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006) (quoting Castle Rock Entm't Inc., 150 F.3d at 136, 142, 145 n. 11). The district court elaborated that the reasoning supporting the Second Circuit's statement was that otherwise "a copyright holder could prevent the fourth factor from ever supporting fair use by licensing parodies, criticisms, or other uses and arguing that any such use that is not licensed invades on a 'traditional' market." Bill GrahamArchives, LLC, 386 F. Supp. 2d at 332.

194. Gordon, supra note 166, at 1841.

195. Id. at 1841 (discussing the Second Circuit's holdings in Bill Graham Archives).

196. See id. at 1842.

197. Id. at 1831 n.98, 1842.

198. Id. at 1842 (footnote omitted) (internal quotation marks omitted).

199. Id.; see also id. at 1831 n.98 ("[Tiransformativeness is incomplete as a criterion for disregarding foregone license fees, whether understood as alteration of content, or as alteration of purpose. I suggest that there are some bases for disregarding license fees that have nothing to do with transformativeness under either definition.").

200. A determination of whether a non-altering use is transformative can still be uncertain.

See Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg L.P., 742 F.3d 17, 28 (2d Cir.), amended and supersededby 756 F.3d 73 (2nd Cir. 2014). See discussion of the Swatch opinions supra note 96.

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'

policies, and reasoning underlying the use. This deeper analysis addresses the calls of scholars for a broader, more balanced analysis of the fourth factor.20 2.

Determination of a Fair Use Market

The determination of a fair use market is part of the fourth-factor analysis. The need for this determination arises if the plaintiff claims the loss of fees from licensing. Professor Gordon offers examples of uses that 202 could fit within her definition of a fair use market.

Uses of copyrighted works in quasi-judicial and judicial proceedings epitomize uses that should be within a fair use market. These uses "employ copyrighted works as factual evidence," which is one of Professor Gordon's examples.203 The use of copyrighted works in the patent application process fits within these uses.

An analysis of the use of copyrighted works in legal proceedings, including the patent application process, illustrates the determination of a fair use market.204 As part of any fair use analysis, the court identifies the defendant's use and "the purpose and character of the use."205 A review of the defendant's use of a copyrighted work is a key part of the analysis to determine a fair use market. The court will build upon this identification to determine if the context for this use possesses the characteristics of a fair use market.

Copyrighted works in legal proceedings may be used as factual evidence. While the character of the work as originally used was expressive, the character of the use in a legal proceeding is factual.206 The use of the work is solely for the "evidentiary value of its content." 207 The purpose of using the work as evidence in a legal proceeding is to provide relevant information to the fact finder in the proceeding. 208 In the patent application process, submitted articles and other documents are for the PTO's use. The character of the use of copyrighted works in the patent application process is also factual rather than expressive. The PTO uses the 201.

See, e.g., Loren, supra note 145, at 56.

202.

Gordon, supra note 166, at 1843-44.

203.

See id. at 1843-44.

204.

While Professor Gordon identifies these examples, she does not provide an analysis of them. This illustration provides the details of the analysis for one example.

17 U.S.C. § 107(l) (2012).

205.

206.

See Wendy Gordon, Reality as Artifact: From Feist to Fair Use, LAW & CONTEMP. PROBS. 93, 96-98 (1992) (discussing the use of expressive copyrighted works as facts); see also Gordon, supra note 166, at 1852 n.209 (noting how the use of a copyrighted work in a legal proceeding is as a fact rather than an expressive work).

207.

E.g., Bond v. Blum, 317 F.3d 385, 395 (4th Cir. 2003).

208.

See, e.g., id.

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submitted works "not for their expressive content, but as evidence relating to the factual question of whether an invention is novel or non-obvious in view of the prior art as of a certain date." 209 In Winstead, Judge Lynn adopted an analogy the PTO had used in its brief, likening the defendant law firm's use of the articles to the use of hearsay. 2 10 The defendants were not interested in the truth of the information in the articles; they were instead interested in the existence and disclosure of the information at the time of publication, regardless of whether it was true or not.2 11 In the patent application process, patent applicants have a duty to disclose "all information known to that individual to be material to patentability." 2 12 The filing of this material information relates directly to the patent examiner's determination of patentability. 2 13 In cases involving the use of copyrighted works in legal proceedings and the use of copyrighted works in the patent application process, the defendant's use is different in character and purpose from the plaintiff's.

2 14

Identifying this different character and purpose supports a finding of fair use under the first factor. The finding of this different character and purpose also favors a finding under the fourth factor that there is no substitute for the original work and little or no impact on the market for the original work (if one exists).2 15 In Winstead and Schwegman, however, the plaintiffs claimed the loss of fee revenue due to the defendants' failure to pay when there was an existing payment system available for the defendants' type of use. 216 If future plaintiffs make this claim, the court needs to perform a

&

Memorandum from Bernard J. Knight, Jr., Gen. Counsel, U.S. Patent & Trademark 209.

Office, at 3 (Jan. 19, 2012). The focus on the availability of the article as of a certain date highlights the importance of the fact of the prior existence of the article at a certain time. See Gordon, supra note 206, at 97 & n.22 (discussing that in the use of an expressive copyrighted work as fact, the prior existence of the work "in a particular context" is an essential part of the secondary user's message).

Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 210.

6242843, at *5 (N.D. Tex. Dec. 3, 2013).

211.

Id.; see Gordon, supra note 206, at 98-99 n.26 (comparing the factual use of copyrighted works with the use of hearsay).

212.

37 C.F.R. § 1.56(a) (2013).

213.

Christopher A. Cotropia, Modernizing Patent Law's Inequitable Conduct Doctrine, 24 BERKELEY TECH. L.J. 723, 752 (2009).

214.

For example, copied excerpts from films that city officials presented in a nuisanceabatement proceeding were not used for entertainment (i.e., the original purpose) but as factual evidence that the showing of the films violated a city ordinance. Jartech, Inc. v. Clancy, 666 F.2d 403, 407 (9th Cir. 1982) 215.

See supra notes 154-155.

216.

Winstead, 2013 WL 6242843, at *5; Am. Inst. of Physics v. Schwegman, Lundberg Woessner, P.A., Civil No. 12-528 (R-HKIJJK), at 31-32 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

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deeper examination of the purpose (reason) for the defendant's use.217 The analysis extends to consider the broader context of the defendant's use, and whether the market would take into account societal values and benefits relating to the defendant's use. 2 18 The goal is to determine if this use is within a fair use market. If it is, then the court can find fair use despite the existence of a ready market for the payment of usage fees. a.

Considerations in the Immediate Context

In determining a fair use market, the first consideration is the effects on the immediate proceeding if the copyright holder withholds or limits access to a copyrighted work. A copyright holder has the right to require consent (including payment) for use of a work and may refuse consent for use of a work.2 19 While the copyright holder has this right, the refusal or limitation of access in the context of a legal proceeding could result in the inability to provide all relevant information to the fact finder. The copyright holder may have the only copy of the work or may control all available copies. The party who needs to use the work as evidence could have no alternative means to obtain a copy of the work. In a particular proceeding, allowing a copyright holder to exercise control over a work could thwart the ability of the fact finder to make an accurate determination due to lack of access to relevant evidence. As Professor Weinstein emphasized, "The fundamental condition for enhancing the possibility of accurate fact finding is that as much of the available relevant information as possible be placed before the trier." 2 20 Parties in a legal proceeding require the ability to

217.

Analysis in cases involving the use of copyrighted works in legal proceedings do not usually go beyond noting that this type of use generally favors fair use. Additional analysis notes that the purpose of the use is for evidence. See supra notes 138-139 and accompanying text. The suggested analysis in this Article explores the principles underlying the purpose for the use to determine whether the use is within a fair use market.

Under the Second Circuit's application of the fair use market concept, the 218. transformativeness of the defendant's use provides the basis for the fair use market. Judge Keyes in Schwegman relied on Bill Graham Archives to determine that the plaintiffs could not show impairment to a "traditional, as opposed to a transformative market" and could therefore not claim licensing fees even though they had identified a payment system. See Schwegman, at 34 (citing Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 614 (2d Cir. 2006)). Under Professor Gordon's analysis, the "transformative" label would not be determinative of whether there is a fair use market. Gordon, supra note 166, at 1842. The analysis would extend to consider the broader context for the defendant's use and whether the market would take into account societal values and benefits relating to the defendant's use. Id. at 1843-44.

See Gordon, supra note 155, at 1634 ("[M]arkets can function only if owners have a 219. right to say 'no' as well as 'yes."').

Jack B. Weinstein, Some Difficulties in Devising Rules for Determining Truth in 220.

Judicial Trials, 66 CoLUM. L. REv. 223, 243 (1966).

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review and present evidence. 2 2 1 There is also the concern that a copyright holder may deny consent in order to block or control the use of the work for its evidentiary value rather than out of any monetary concerns.222 Allowing a copyright holder to control the use of a work in a legal proceeding raises concerns about the diminished ability to reach a fair determination in the proceeding. This situation suggests that society should not rely on the decisions of copyright holders to determine whether the defendant can use the work. 223

In the patent application process, copyright holders also have the right to control the use of a work by requiring a fee or denying access. Allowing the copyright holder to control the use of a work in this process, however, can thwart the ability of a patent examiner to review a complete record. The presented materials possess a unique evidentiary value for the determination of patentability. Patent examiners may not have access to these works, and if the applicants are stymied in providing the relevant materials, the examiners will have no alternative method to review these works. 22 4 Additionally, the examiner will probably not have the time to seek this information.225 Examiners rely on the applicants to provide the relevant information since the applicants have the best knowledge of the invention and can better identify prior ar226 The applicants also have a duty to 221. See Images Audio Visual Prods., Inc. v. Perini Bldg. Co., 91 F. Supp. 2d 1075, 1081, 1086 (E.D. Mich. 2000) ("[C]opyright protection must yield to the need to present a complete evidentiary record."). This need extends to the review and use of materials in connection with legal proceedings even though they are not used as evidence. See, e.g., cases cited supra note 138.

222. The case of Grundbergv. Upjohn Co. illustrates how a copyright holder could attempt to block the use of copyrighted works to limit or prevent use in a legal proceeding rather than to protect a market interest. Grundberg v. Upjohn Co., 137 F.R.D. 372, 388 (D. Utah 1991). In Grundberg, a products liability case, the defendant company attempted to block the use of company documents by registering a copyright for those documents. Id. The documents had been marked confidential, but the plaintiffs sought to remove the confidentiality. Id. at 378. The company sued the plaintiffs for copyright infringement. Id. The court noted that the company was attempting "to thwart accessibility to the public of information contained in documents which may be offered and admitted into evidence in court proceedings." Id. at 388. The court held that the company could not assert a copyright interest "to impede or prevent the free use and accessibility of such documents in the context of this litigation." Id. For other examples of attempts to prevent the use of copyrighted works in a legal proceeding, see cases cited supra note 155.

223. An example of other situations in which copyright holders might attempt to suppress or control use of copyrighted works for nonmonetary reasons is when the defendant uses the work for criticism or parody. These situations also raise concerns about deferring to the copyright holder. See Gordon, supra note 155, at 1632-57; Wendy J. Gordon, Excuse and Justification in the Law of Fair Use: Transaction Costs Have Always Been Only Part of the Story, 50 J. COPYRIGHT SOC'Y U.S.A. 149, 186 (2003); Wendy J. Gordon, Toward a Jurisprudence of Benefits: The Norms of Copyright and the Problem of Private Censorship, 57 U. CHI. L. REV. 1009, 1042-43 (1990).

224.

225.

226.

Cotropia, supra note 213, at 753-54.

Id. at 750.

Id. at 753-54.

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present all material documentation, and requiring these applicants to identify copyright holders and obtain permissions can interfere with fulfilling this duty.227 b.

Considerations in the Broader Context

The determination of a fair use market also considers how allowing a copyright holder to control copyrighted works affects societal values and interests in a broader context for the use. A copyright holder's control over the use of a work in a legal proceeding has a wider impact than just on the immediate proceeding. The use of copyrighted works as evidence supports the policies of "truth telling" and "truth seeking." 228 There is an "important societal interest in having evidence before the [finder of fact]." 2 29 This societal interest in litigation is not just concern for the resolution of individual disputes. Litigation is conducted for the ultimate benefit of society in supporting "the cause of justice." 230 Limitations on the availability of evidence could create barriers that ultimately jeopardize this policy. 2 3 1 The self-interest of a copyright holder in withholding access to a copyrighted work or seeking remuneration does not account for this societal value. Professor Loren emphasized that courts often focus their economic analysis only on the effects on the parties to a lawsuit. 2 32 They fail to acknowledge external and nonmonetizable societal benefits.233 Reducing barriers to the presentation of relevant evidence promotes not only truth finding but also confidence in the legal system.234 In cases involving the use

227.

See Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *2 (N.D. Tex. Dec. 3, 2013).

228.

Samuelson, supra note 91, at 2546, 2595 (quoting Images Audio Visual Prods., Inc. v.

Perini Bldg. Co., 91 F. Supp. 2d 1075, 1086 (E.D. Mich. 2000)). The court in Perini noted "that copyright protection must yield to the need to present a complete evidentiary record." Perini, 91 F. Supp. 2d at 1086; see also FED. R. EvID. 102 (noting that the rules of evidence, which provide for the submission of relevant information, facilitate "ascertaining the truth and securing a just determination"); Weinstein, supra note 220, at 243 ("Truth finding must be a central purpose whatever the tribunal.").

229.

Bond v. Blum, 317 F.3d 385, 396 (4th Cir. 2003).

Charles Frederic Chamberlayne, The Modern Law of Evidence and Its Purpose, 42 AM. 230.

L. REV. 757, 765 (1908).

231.

Id. at 772 ("Society has a transcendent interest in the ascertainment of truth and should remove all barriers across the path of its tribunals in reaching it ....

232.

Loren, supra note 145, at 53-54.

233.

Id. 234.

See David P. Leonard, The Use of Character to Prove Conduct: Rationality and Catharsisin the Law of Evidence, 58 U. COLO. L. REv. 1, 39 (1986); Weinstein, supra note 220, at 241.

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of copyrighted works as evidence, the market cannot be relied upon to take into account these important, nonmonetizable values.235 In the patent application process, plaintiffs seek fees for use of copies and are not trying to manipulate the system. Deferring to these plaintiffs' interests, however, would affect the public interest in the patent system. 23 6 In both Schwegman and Winstead, the judges discussed the importance of supporting the patent system and how ceding to licensing demands could affect its ability to function properly.237 In analyzing the fourth factor, both judges recognized the importance of a public benefit and refused to let the plaintiffs' ready market argument support a denial of fair use.238 Judge Keyes in Schwegman noted that the defendants' copying of articles and use of the copies "facilitate[d] the complete disclosure required in the patentapplication process, assist[ed] patent examiners in determining whether applications for patent protection should be granted, and, consequently, fulfill[ed] the very same purpose of promoting science and the arts that the Copyright Act was intended to accomplish." 23 9 He discussed the use of copies in patent applications fulfilled a public benefit much like the use of copyrighted materials in the activities listed in the preamble to § 107.240 Judge Lynn in Winstead stated that the determinative issue in the fourthfactor analysis was the public benefit in the form of "minimiz[ing] excessive costs in patent applications and maximiz[ing] the accuracy of the patent process." 24 1 This benefit outweighed any potential gain to the

plaintiffs from fees.242 235.

Loren, supra note 145, at 26 (citing Gordon, supra note 155, at 1630-31). While the use of evidence in legal proceedings may not necessarily further creativity, copyright law can support other important societal values. The copyright monopoly cannot override important

&

policies such as those that support our judicial system. Fair use supports more than new creations; it supports policies and systems of societal value. Id. 236. Professor Gordon discussed how copyright holders can legitimately refuse to allow the use of works to protect their monetary interests. Gordon, supra note 155, at 1634. Addressing external or nonmonetizable interests, however, can outweigh this right. See id. at 1634-35, 1634 n.192 (identifying Time, Inc. v. Bernard Geis Assocs., 293 F. Supp. 130 (S.D.N.Y. 1968) as a case involving external or nonmonetizable interests that outweighed a plaintiffs legitimate monetary interest).

237. Am. Inst. of Physics v. Winstead PC, Civil Action No. 3:12-cv-1230-M, 2013 WL 6242843, at *10-12 (N.D. Tex. Dec. 3, 2013); Am. Inst. of Physics v. Schwegman, Lundberg Woessner, P.A., Civil No. 12-528 (RHK/JJK), at 41-42 (D. Minn. July 30, 2013), adopted by 2013 WL 4666330 (D. Minn. Aug. 30, 2013).

238.

Winstead, 2013 WL 6242843, at *12; Schwegman, at 41-42.

239.

Schwegman, at 41-42.

240. Id. at 41; see also Loren, supra note 145, at 49 (noting that the uses listed in the preamble to § 107 support external societal benefits).

241.

Winstead, 2013 WL 6242843, at *12. As part of her analysis of the first factor, Judge Lynn also considered the public benefit of the defendants' copying. Id at *4, *8 (citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578 (1994); Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1523 (9th Cir. 1992) ("Public benefit need not be direct or tangible, but may arise

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Summary: Determination of a Fair Use Market

An examination of the use of copyrighted works in legal proceedings, including the patent application process, demonstrates how a closer and more in-depth analysis of the purpose and character of a defendant's use can result in the identification of a fair use market. The negative effects of granting copyright holders control in both the immediate and broader context of these uses raise concerns that the market cannot address all relevant values and interests. Identification of a fair use market supports strong underlying societal interests. The further analysis of the use in these cases also demonstrates that it is possible to establish the existence of a fair use market without relying on a "transformative" label for the use. 24 3 The determination that the defendant's use is within a fair use market allows for the coexistence of fair use with a ready market for the payment of fees.244 IV. CONCLUSION The recent decisions in the Schwegman and Winstead cases affirm the fair use of copies of non-altered copyrighted works as part of the patent application process, including copies for clients and internal use. The judges in these cases determined that this use was transformative without any alteration in content due to the different purpose for the use.24 5 These decisions follow the trend in fair use analysis to identify non-altered use of copyrighted works as transformative if the purpose for the use is different from the original. Despite this trend, there is still uncertainty in the

because the challenged use serves a public interest.")). Judge Lynn determined that the filing of NPL in patent cases assists the PTO examiners in "more efficiently" determining patentability.

Winstead, 2013 WL 6242843, at *9 (citing Memorandum in Support of Motion to Intervene of the United States Patent and Trademark Office at 13, Am. Inst. of Physics v. Winstead, No. 3:12-cv01230-M, 2013 WL 6242843 (N.D. Tex. Dec. 3, 2013)). Requiring attorneys to get a license for every article they need to review would "slow[] down the patent application process" and could result in "erroneous patentability decisions." Id. 242.

Winstead, 2013 WL 6242843, at *11-12.

243. If the use in Schwegman and Winstead had not been transformative, it still would have been possible to demonstrate the existence of a fair use market. See discussion supra Part lll.D.2.b.

244. The court still takes into consideration the existence of foregone license fees and the availability of a means to make payments. Under the holding in Bill Graham Archives, a court can also refrain from considering foregone licensing fees in the fourth-factor analysis if a fair use market exists for certain kinds of uses. See Gordon, supra note 166, at 1841, 1844-54 (discussing this holding in Bill Graham Archives and identifying uses that might merit such treatment). The use of copyrighted works as factual evidence in legal proceedings could also fit into this category.

See id. at 1852 n.209, 1853 (nonmonetizable interests). A discussion of this possibility is beyond the scope of the current Article.

245.

Winstead, 2013 WL 6242843, at *6; Schwegman, at 33-34.

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interpretation of "transformative." Anyone seeking predictability in fair use analysis should not rely solely on a determination of transformative use.

Users seeking fair use treatment should consider how their use fits into identified groups or clusters of similar cases. Professor Samuelson's clusters are useful for guidance. 2 4 6 These clusters represent groups of uses that have a common character and purpose, and that courts have regularly identified as fair use. 247 The identified policy clusters also offer underlying policy and reasoning for the use. 2 48 Readiness to discuss the underlying policy and benefits of a use is essential when a plaintiff asserts that there is a ready market to collect fees for use.

The fair use market concept provides an excellent means of identifying when a defendant can use a copyrighted work without permission, even though there is a system available for the payment of fees to the copyright holder. The use of copyrighted works in legal proceedings, including the patent application process, offers a model for the determination of a fair use market. In this model, based on Professor Gordon's definition of a fair use market, the determination of a fair use market must involve a deeper analysis of the use and its character and purpose. This inquiry explores the underlying effects of copyright-holder control in both the immediate and broader context of the use. This deeper analysis also considers societal benefits of the use. Under this approach, a court can find fair use even if it determines that the use is not transformative. As the model illustrates, the determination of a fair use market can provide recognition of when a user should not pay for the use, even if there is a means to pay.

246.

247.

248.

See Samuelson, supra note 91, at 2544-45.

Id. at 2542.

Id.

WHEN PRODUCTS SELF-DESTRUCT: MAKING THE CASE FOR THE PRODUCTLESS PLAINTIFF USING RES IPSA LOQUITUR, THE MALFUNCTION DOCTRINE, AND § 3 ........................................... .............................................

INTRODUCTION FOUNDATION

I. II.

A. B. III.

A Short History of Strict ProductsLiability...........................

CircumstantialEvidence .........................

MAKING THE CASE

A. B. C.

D.

........................................

349 352

352 355 357

Jurisdictions Without an EstablishedDoctrine.... ...... 358 Res Ipsa Loquitur. ..............................

362 Section 3 of the Restatement (Third) of Torts: Products Liability....................................

372 1. The "Incident ....................... ....... 373 2. Negating Other Reasonable Causes.... ................

374 3. The Absence ofDirect Evidence ............ ..... 374 4. Adoption .......................................

376 The Malfunction Theory (aka the Malfunction Doctrine)...... 378 1. The Product'sMalfunction ................ ..... 379 2. EliminatingMisuse and OtherReasonable Secondary Causes ..................... .............. 380 3. The Inferences Earned... ................................

382

IV. CONCLUSION .............................................

APPENDIX: CASES BY JURISDICTION .........................

I.

383

383

INTRODUCTION

Self-destructing products have been the subject of litigation across the country for decades. From defective toasters, heating pads and coffee pots, to at least one imploding thermos,1 American jurisprudence has played host to a large number of cases concerning a wide variety of products. 2 Some of 1.

1984).

2.

E.g., Virgil v. "Kash N' Karry" Serv. Corp., 484 A.2d 652, 654 (Md. Ct. Spec. App. See David G. Owen, ManufacturingDefects, 53 S.C. L. REv. 851, 875-78 (2002).

[T]he [malfunction] doctrine has been applied to a wide range of products, as when a bottle of soda pop, a glass baby bottle, an aerosol can of paint, a transformer, a gas grill, a propane fuel canister, or an oxygen tank's glass humidifier explodes; an automatic coffee maker's glass carafe, a bottle of ketchup, a jar of peanuts, or a silicone breast implant breaks apart; a television, a clothes dryer, a portable heater, or an electric blanket catches fire; a crutch, a grain auger, a football helmet, or a ladder collapses; a crane drops a load; the blade guard of a power circular saw fails to close; a staple gun fires a staple; a winch cable snaps; and many other situations in which products have inexplicably malfunctioned.

349

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these self-destructing property owners have attempted to recover from the product's manufacturer. As any direct evidence of the defect likely went up in flames with the rest of the product, plaintiffs are hard pressed to prove that the injurious product was defective without the physical product itself.3 An injured plaintiff must show that the product was defectivegenerally by proving that it was unreasonably dangerous-before recovery is viable.4 When a defective product is available for examination, pointing to a particular defect can be simple.' However, when the product cannot be inspected because it was destroyed as a result of its malfunction, a plaintiff must rely on circumstantial evidence and the inferences it provides to establish strict liability. 6 This inquiry is fact specific, and courts have

struggled to determine how much and what kind of circumstantial evidence is appropriate to hold the manufacturer of a now nonexistent defect strictly liable.' Over time, each jurisdiction has developed its own understanding of the nuances of products-liability law; invariably, this involved a determination of how plaintiffs could satisfy the burden of proving a product defective without being able to point to a specific defect in the now-destroyed product.8 Id. at 876-78.

3.

See Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 25 A.3d 571, 575-76 (Conn. 2011) (discussing the "malfunction theory," which allows a plaintiff to prove her case based on circumstantial evidence). But see Browder v. Pettigrew, 541 S.W.2d 402, 405-06 (Tenn. 1976) (discussing the plaintiffs reliance on expert testimony and direct evidence to prove the existence of a manufacturing defect and the causal relationship between the defect and the plaintiff s harm)

(citing Scanlon v. Gen. Motors Corp., 326 A.2d 673, 677-78 (N.J. 1974)).

4. The definition of "defective" can vary between states. For example, in Texas, "[a] manufacturing defect exists when a product deviates, in its construction or quality, from the specifications or planned output in a manner that renders it unreasonably dangerous." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). However, in Tennessee, "[a] product is in a 'defective condition' if it is 'unsafe for normal or anticipatable handling and consumption."'

Brown v. Crown Equip. Corp., 181 S.W.3d 268, 281 (Tenn. 2005) (quoting TENN. CODE ANN. § 29-28-102(2) (1980)).

5.

In one case, for example, the plaintiff, "after drinking from the bottle a portion of the contents thereof, and noticing that it did not taste right, discovered the skeleton of a mouse in the beverage yet remaining in the bottle." Eisenbeiss v. Payne, 25 P.2d 162, 164 (Ariz. 1933).

6. See, e.g., State Farm Fire & Cas. Corp. v. Chrysler Corp., 523 N.E.2d 489, 491 (Ohio 1988).

7. See, e.g., Coca Cola Bottling Co. of Hous. v. Hobart, 423 S.W.2d 118, 124 (Tex. Civ. App.-Houston [14th Dist.] 1967, writ ref'd n.r.e.) ("The difficult questions are those of circumstantial evidence and inferences from the facts.").

See, e.g., Marathon Battery Co. v. Kilpatrick, 418 P.2d 900, 915 (Okla. 1965) ("The 8.

California [c]ourt explicitly held it was sufficient to establish . . . that plaintiff, while using the machine involved in the way it was intended to be used, was injured as a result of a defect . . . the plaintiff was unaware [of]."); cf Elliott v. Lachance, 256 A.2d 153, 156 (N.H. 1969) (stating that "the mere fact that the plaintiff suffered injury" was not "sufficient circumstantial evidence to establish unfitness or causal defect" in a case concerning shampoo that allegedly caused the plaintiffs hair to fall out).

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Some jurisdictions take the most basic approach, treating the circumstantial evidence of a product-less plaintiff (a plaintiff whose product is destroyed as a result of the alleged defect) as they would the evidence of plaintiffs who are actually able to examine the defective product postaccident. 9 In these jurisdictions, product-less plaintiffs must prove the existence of a defect that they cannot point to using purely circumstantial evidence and with no recognized inferences to assist them-a task that can prove insurmountable. 10 Cross-applying a well-accepted negligence concept, other states employ the doctrine of res ipsa loquitur in these situations." A third category of states developed a theory that recognized the malfunction of the defective product as enhanced circumstantial evidence of the defect itself, a theory known as the malfunction doctrine.1 2 Contributing to the confusion, a final category of states has adopted the Restatement (Third) of Torts: Products Liability § 3, which molds res ipsa loquitur into a less restrictive, products-liability-friendly form.1 3 In the interest of protecting injured consumers, states have complicated what should have been a simple application of circumstantial evidence and inferences to the elements of a strict products liability claim. Because each state's tort laws are unique, there is no one "right way" to handle the problem of the product-less plaintiff. This Comment will attempt to clear the waters by identifying and distinguishing each state's process for the product-less plaintiff. Part II provides a quick look back at the foundation, birth, and growth of American strict products liability law. Part II also supplies a foundation for understanding the challenges a plaintiff who must prove an indeterminate defect faces by discussing circumstantial evidence and the bias it faces in the courthouse. Part III progresses by distinguishing different jurisdictional treatments of indeterminate defects.

When injuries occur due to the malfunction of a product, and that product is destroyed, reliance on circumstantial evidence is often the only way a plaintiff can be made whole using strict products liability.14

Knowledge of the distinctions between jurisdictional approaches to this problem can help courts clarify future decisions; moreover, such knowledge is an important asset for those involved in products-liability litigation.

9.

See infra Part Ill.A. 10.

See, e.g., McClellon v. Thermo King Corp., No. 1:11-cv-01337-SEB-MJD, 2013 WL 6571946, at *7 (S.D. Ind. Dec. 13, 2013) (stating that while Indiana generally does not allow application of res ipsa loquitur to products liability cases, in limited cases certain forms of circumstantial evidence similar to res ipsa loquitur may satisfy the plaintiffs burden of proof).

11.

See infra Part III.B. 12.

See Raskin v. Ford Motor Co., 837 A.2d 518, 523 (Pa. Super. Ct. 2003) (citing Rogers v. Johnson & Johnson Prods., Inc., 565 A.2d 751, 754 (Pa. 1989)).

13. See infra Part Ill.C. 14.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB.

§3

cmt. b (1998).

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FOUNDATION

A Short History ofStrict ProductsLiability

The roots of strict liability against a seller of defective goods stretch at least to Roman law and arguably as far back as ancient Babylon.15 More recognizable forms of strict products liability have been present in common law at least since the mid-thirteenth century when brewers, butchers, and cooks in England were criminally liable for defective goods.16 However, these guild-created regulations criminalized selling defective products to keep citizens from being cheated, not injured.17 This practice slowly evolved, and strict liability for injury-causing products began as early as the late 1800s. 18

Modem American strict products liability law began in earnest in the early 1960s.' 9 At that time, courts across the country were struggling to identify the characteristics, boundaries, and most effective applications of holding manufacturers liable without a showing of fault, also known as strict products liability. 20 Strict products liability began with a contractual concept-specifically, the breach of an implied warranty. 21 However, because contract law requires privity,2 2 limiting a manufacturer's duty to create safe products to only those in privity with it prevented many injured parties from recovering.23 Desperate to create a concept that could be widely used and would allow injured consumers without privity to recover, 15.

David G. Owen, The Evolution of Products Liability Law, 26 REV. LITIG. 955, 956 (2007).

16.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § I cmt. a (1998); see also Owen, supra note 15, at 957-58.

17.

See Owen, supra note 15, at 957-58.

18.

See id. at 959-60.

Greenman v. Yuba Power Products is the first state supreme court case recognizing a 19. manufacturer's strict liability in tort for a defective product. Karen A. Jordan, Note, Delimiting the Manufacturer's Liability: An Examination of Loss of Consortium Recovery in Strict Products Liability Actions Under Section 402A of the Restatement (Second) of Torts, 22 IND. L. REV. 821 (1989) (discussing Greenman v. Yuba Power Prods., Inc., 377 P.2d 897 (Cal. 1963) (in bank)).

20.

David G. Owen, The Graying of Products Liability Law: Paths Taken and Untaken in the New Restatement, 61 TENN. L. REv. 1241, 1243 (1994).

See William L. Prosser, The Fall of the Citadel (Strict Liability to the Consumer), 50 21.

MINN. L. REV. 791, 800 (1966). Black's Law Dictionary defines implied warranty as "[a]n obligation imposed by the law when there has been no representation or promise." BLACK'S LAW DICTIONARY 1822 (10th ed. 2014).

22.

Privity is "[t]he connection or relationship between two parties, each having a legally recognized interest in the same subject matter (such as a transaction, proceeding, or piece of property)." BLACK'S LAW DICTIONARY, supra note 21, at 1394.

23.

A seller's duty not to sell a defective product no longer depended on privity between the seller and injured party beginning with MacPherson v. Buick Motor Co. MacPherson v. Buick Motor Co., Il1 N.E. 1050, 1053 (N.Y. 1916).

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the American Law Institute (ALI) 24 adopted a solution that imposed strict liability for defective products without using the word "warranty." 2 5 By taking the concept of an implied warranty of merchantability and extending it from contract law to tort law, the contractual requirement of privity was released.2 6 As a result, the injured party did not have to be in privity with the seller (like in contract law) or establish negligence (like in tort law).2 7 Elements of these two fields of law joined together to create strict products liability. 28 This was the birth of § 402A of the Restatement (Second) of Torts.29 A man many consider to be the father of American tort law, Dean William Prosser, led the crafting of the Restatement (Second) of Torts as an ALI Reporter on the project.30 Section 402A recognized that a product is either "too dangerous, i.e., 'defective,' or safe enough, i.e., 'nondefective."' 3 1 Spurred on by a large number of injured but eager

24.

ALI Overview, AM. L. INST., https://www.ali org/index.cfm?fuseaction=about.overview (last visited Apr. 10, 2014).

The American Law Institute is the leading independent organization in the United States producing scholarly work to clarify, modernize, and otherwise improve the law.

The Institute (made up of 4000 lawyers, judges, and law professors of the highest qualifications) drafts, discusses, revises, and publishes Restatements of the Law, model statutes, and principles of law that are enormously influential in the courts and legislatures, as well as in legal scholarship and education.

Id. 25.

See Prosser,supra note 21, at 802.

26.

MacPherson, 111 N.E. at 1053.

We have put aside the notion that the duty to safeguard life and limb, when the consequences of negligence may be foreseen, grows out of contract and nothing else.

We have put the source of the obligation where it ought to be. We have put its source in the law.

Id. 27.

28.

29.

See Prosser, supra note 21, at 800-01.

See id. at 802. "[Section 402A] marked the first recognition by the Institute of privity-free strict

liability for sellers of defective products." RESTATEMENT (THIRD) OF TORTS: intro. (1998) (discussing RESTATEMENT (SECOND) OF TORTS § 402A (1965)).

PRODS. LIAB.

§3

30.

"Section 402A was one of the most important and visionary sections of Restatement (Second). William L. Prosser (1898-1972), the preeminent scholar in American tort law who served as sole Reporter for most of the work on Restatement (Second), inspired and helped codify this strict liability section." Godoy ex rel. Gramling v. E.I. du Pont de Nemours & Co., 768 N.W.2d 674, 694 (Wis. 2009); see also Christopher J. Robinette, The Prosser Notebook: Classroom as Biography and Intellectual History, 2010 U. ILL. L. REv. 577, 582-86 (2010) (providing an account of Prosser's life, accomplishments, and contribution to the law in the twentieth century).

31.

See Owen, supra note 20, at 1243. Not all dangerous products are defective, but all products that cause injury are dangerous. For example, a hot air balloon is dangerous but generally is not defective. Strict liability only holds manufacturers liable for products that are defective. Put another way, "[D]angerousness is a factual attribute.... [D]efectiveness is a legal conclusion that the manufacturer is responsible for the injury." Ellen Wertheimer, The Biter Bit: Unknowable

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consumers, strict products liability developed in a frenzy, without the benefit of many years of judicial development through court decisions.32 This haste was beneficial for many plaintiffs who were able to recover while spending significantly less time and money than was previously required to litigate warranty actions.

If the practice of holding manufacturers liable for their defective products is "the first pillar of modem products liability law," 34 then perhaps § 402A could be considered the second. The majority of states have adopted either § 402A or something that closely resembles it.35 However, the law is a living thing, and as § 402A began to percolate through the judicial system, courts found the need to tailor this general rule further.36 The Restatement (Second) of Torts provided a singular conceptualization of product defects; however, as courts began to recognize that a product can be defective in its manufacture, warning, or its design, it created case law to address these distinctions.

American law's natural evolution eventually required the ALI to give § 402A a substantial makeover. Hence, the Restatement (Third) of Torts: Products Liability was born. 39 With the publication of the Restatement

Dangers, The Third Restatement, and the Reinstatement of Liability Without Fault, 70 BROOK. L. REV. 889, 894-95 (2005).

32.

See Prosser, supra note 21, at 793-94 (characterizing courts' willingness to put negligence aside and embrace strict products liability in the early 1960s as "the most rapid and altogether spectacular overturn of an established rule in the entire history of the law of torts").

33.

See id. at 799.

34.

Owen, supra note 2, at 905.

35.

Jurisdictions that have never adopted strict products liability in tort require plaintiffs to rely on warranty or negligence claims. These jurisdictions include the following: Delaware (Miley v. Harmony Mill Ltd. P'ship, 803 F. Supp. 965, 967-68 (D. Del. 1992), aff'd in an unpublished table decision, 22 F.3d 302 (3d Cir. 1994)); Massachusetts (Vassallo v. Baxter Healthcare Corp., 696 N.E.2d 909, 923 (Mass. 1998) ("We have stated that liability under the implied warranty of merchantability in Massachusetts is 'congruent in nearly all respects with the principles expressed in Restatement (Second) of Torts § 402A."' (quoting Commonwealth v. Johnson Insulation, 682 N.E.2d 1323, 1326 (Mass. 1997)))); Michigan (Beaver v. Howard Miller Clock Co., 852 F. Supp.

631, 639 (W.D. Mich. 1994) ("[S]trict liability is not available under Michigan law.")); North Carolina (N.C. GEN. STAT § 99B-1.1 (2010)); and Virginia (Harris v. T.I., Inc., 413 S.E.2d 605,

609-10 (Va. 1992)).

36. See RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § I cmt. a (1998) ("Imposition of liability for design defects and for defects based on inadequate instructions or warnings was relatively infrequent until the late 1960s and early 1970s.").

37.

See id.

38. "Anyone familiar with the law of products liability knows that section 402A is out of date and requires revision." James A. Henderson, Jr. & Aaron D. Twerski, A ProposedRevision of Section 402A of the Restatement (Second) of Torts, 77 CORNELL L. REV. 1512, 1546 (1992).

39.

"The principal concern with [sJection 402A today is that it is outdated and no longer

reflects the complexities that have developed in products liability law over the past 45 years."

Godoy ex rel. Gramling v. E.I. du Pont de Nemours & Co., 768 N.W.2d 674, 694 (Wis. 2009).

WHEN PRODUCTS SELF-DESTRUCT

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(Third) of Torts: Products Liability in 1998, the ALI repealed § 402A.

0

'

While it took many years and drafts to reach its published state, the Restatement (Third) attempts to reflect the status of modem products liability law.4 CircumstantialEvidence

B.

"Direct evidence, if accepted, proves a material fact without the mediation of a deductive process. Circumstantial evidence, in contrast, even if accepted, requires an additionalmental step of inference in order to determine whether the materialfact did or did not exist." 42 Cookie crumbs are a fun illustration of circumstantial evidence. 43 This well-worn example of circumstantial evidence is used in courtrooms across the country. Litigators and prosecutors often customize this story and share it with potential jurors during voir dire to help them conceptualize circumstantial evidence. The story generally goes something like this:44 Imagine a batch of your grandmother's chocolate chunk cookies in the oven. The timer's buzz signals their completion, and you carefully remove the cookie sheet from the oven and place it on the kitchen counter to cool.

Your two children, Jane and Jack, follow their noses to the sweet treats and immediately start to beg for a cookie. The doorbell rings, and you give Jane and Jack strict orders to not touch the cookies until you return. Five minutes later, you return to the kitchen to find-surprise!-a cookie is missing. Jack appears just as you left him. Jane, on the other hand, has a smattering of crumbs around her feet and chocolate smeared on her fingers and face.

Despite the fact that her mouth is full, you can hear Jane declare: "Jack ate it!" Where do you think the missing cookie went?

The chocolate, the crumbs, and the guilty look on Jane's face are all circumstantial evidence that Jane was the cookie snatcher.45 In contrast,

40.

See RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. intro. (1998); Owen, supra note

20, at 1263.

41.

For example, comment a of the Restatement (Third) § 1 illustrates the progress in the legal community's common understanding of products liability law by acknowledging and defining each of the three categories of product defects that are used to establish strict liability.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 1 cmt. a (1998).

Eyal Zamir et al., Seeing Is Believing: The Anti-Inference Bias, 89 IND. L.J. 195, 19742.

98 (2014) (emphasis added).

43. "[C]ircumstantial evidence ... is nothing more than one or more inferences which may be said to arise reasonably from a series of proven facts." Jones v. Hotchkiss, 305 P.2d 129, 132 (Cal. Dist. Ct. App. 1956).

The inspiration for this particular story came from a seaside evidence class taught by 44.

Professor Gerald Powell at Baylor Law School's Academy of the Advocate at Saint Andrews.

"Circumstantial evidence, strictly speaking, consists of a number of disconnected and 45. independent facts, which converge towards the fact at issue as a common center." Hearnsberger v.

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Jane's muffled testimony incriminating her brother is direct evidence because Jane is claiming she has personal knowledge that Jack ate the cookie.4 6 This story simplifies and illustrates the distinctions between circumstantial and direct evidence. It also illuminates the fact that one type of evidence is not necessarily better than the other.

Putting this story into context, direct evidence of a specific defect in a product would be an expert's testimony that she inspected the product and found it to be defective.4 7 Circumstantial evidence of a defect runs a wide gamut, from the newness of the product to the events leading up to the product's untimely demise.4 8 The federal court system recognizes that direct and circumstantial evidence are "intrinsically no different." 49 Additionally, legal scholarship supports "the view that circumstantial evidence is actually not intrinsically less probative than direct evidence." 50 As many as half of the states that have considered the issue agree. 1 Indeed, some scholars have opined that circumstantial evidence is, in fact, superior to direct evidence.5 2 Despite this support, however, there is a cognizable bias against circumstantial evidence

McGaughey, 239 S.W.2d 17, 21 (Ark. 1951) (quoting a jury charge given by Judge Robert P. Dick in a case before the U.S. District Court for the Western District of North Carolina).

46.

"Direct evidence is that evidence which directly proves any matter by sworn testimony from witnesses who have actual knowledge of the existence of certain evidence, as experienced by their senses." MICHAEL H. BOYER,

PROPERTY INVESTIGATION CHECKLISTS: UNCOVERING

INSURANCE FRAUD § 2:14 (9th ed. 2006).

47.

See, e.g., Friedman v. Gen. Motors Corp., 331 N.E.2d 702, 708 (Ohio 1975) (Stern, J., dissenting).

48.

See Paul D. Rheingold, Proofof Defect in Product Liability Cases, 38 TENN. L. REV. 325, 331-32 (1971).

49.

See Holland v. United States, 348 U.S. 121, 140 (1954).

50.

Richard K. Greenstein, Determining Facts: The Myth of Direct Evidence, 45 HOUS. L. REV. 1801, 1803 (2009); see also DAVID A. BINDER & PAUL BERGMAN, FACT INVESTIGATION:

FROM HYPOTHESIS TO PROOF 80 (1984) ("Although there is a logical distinction between direct and circumstantial evidence, the law does not value one more highly than the other.").

51.

Greenstein, supra note 50, at 1803 & n.7 (citing Des Jardins v. State, 551 P.2d 181, 184 (Alaska 1976); State v. Harvill, 476 P.2d 841, 846 (Ariz. 1970) (in banc); Henry v. State, 298 A.2d 327, 330 (Del. 1972); State v. Bush, 569 P.2d 349, 351 (Haw. 1977) (per curiam); Gilmore v. State, 415 N.E.2d 70, 75 (Ind. 1981); State v. Morton, 638 P.2d 928, 933 (Kan. 1982); State v.

Cowperthwaite, 354 A.2d 173, 179 (Me. 1976); Finke v. State, 468 A.2d 353, 362 (Md. Ct. Spec.

App. 1983); People v. Johnson, 381 N.W.2d 740, 742 (Mich. Ct. App. 1985); State v. Buchanan, 312 N.W.2d 684, 688 (Neb. 1981); State v. Jones, 279 S.E.2d 835, 838 (N.C. 1981); State v.

Jenks, 574 N.E.2d 492, 501 (Ohio 1991); State v. Stokes, 386 S.E.2d 241, 241 (S.C. 1989)).

52.

A "concurrence of well-authenticated circumstances composes a stronger ground of assurance, than positive testimony, unconfirmed by circumstances, usually affords. Circumstances cannot lie." I WILLIAM PALEY, THE PRINCIPLES OF MORAL AND POLITICAL PHILOSOPHY 551 (1785).

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in the courthouse. 53 This same bias carries over to the circumstantial evidence used in products liability settings5 4 and can be an obstacle to the product-less plaintiffs recovery.

Circumstantial evidence undoubtedly has a place in strict products liability actions. Courts regularly hold that a defect can be proven by either direct or circumstantial evidence in strict products liability actions.56 Nevertheless, direct evidence is considered the most convincing.57 Winning any case using circumstantial evidence has traditionally been difficult,5 8 and

products liability cases are no exception.

III. MAKING THE CASE

"Few would question the use of circumstantial evidence to prove products liability in appropriatecases. The hard issue is not whether it can be done, but when and how. "59 A traditional strict products liability case requires a plaintiff to prove by a preponderance of the evidence "that a product was defective, that the product contained the defect when it left the defendant's control, and that the defect proximately caused the plaintiffs harm." 60 If a plaintiff can provide the defective product for examination by the court or an expert and the defect is identifiable, the plaintiff is identifying a specific defect using direct evidence. 6 1 The challenge, however, occurs when a plaintiff must rely on circumstantial evidence to prove the existence of an unknown defect 53.

"There are grounds to believe that judicial fact finders treat direct and circumstantial evidence differently and are more reluctant to impose liability on the basis of circumstantial evidence alone." Zamir et al., supra note 42, at 196; see also Greenstein, supra note 50, at 1805.

54.

Owen, supra note 2, at 881 (describing the permissible inference accompanying the malfunction doctrine as vague and "ephemeral").

Reader v. Gen. Motors Corp., 483 P.2d 1388, 1393-94 (1971) (in banc) ("There will 55. seldom be a case based upon strict liability where a person will be able to testify from his personal knowledge that a particular product was sold in a certain defective condition. A requirement of direct evidence would effectively deny the theory of recovery [in strict liability.]").

56.

E.g., Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004) ("Both direct and circumstantial evidence may be used to establish any material fact."). "(T]he most convincing evidence [in products liability cases] is an expert's pinpointing 57. the defect and giving his opinion on the precise cause of the accident after a thorough inspection."

Wakabayashi v. Hertz Corp., 660 P.2d 1309, 1313 (Haw. 1983) (second alteration in original) (quoting Stewart v. Budget Rent-A-Car Corp., 470 P.2d 240, 243 (Haw. 1970)) (internal quotation marks omitted).

58. "[Jlurors routinely undervalue circumstantial evidence . . . and overvalue direct evidence . . . when making verdict choices . . . ." Kevin Jon Heller, The Cognitive Psychology of CircumstantialEvidence, 105 MICH. L. REV. 241, 241 (2006) (emphasis omitted).

Ridgway, 135 S.W.3d at 603 (Hecht, J., concurring).

59.

Fallon v. Matworks, 918 A.2d 1067, 1075 (Conn. Super. Ct. 2007) (quoting Owen, 60. supra note 2, at 871).

See Ocean Barge Transp. Co. v. Hess Oil V.I. Corp., 726 F.2d 121, 124 (3d Cir. 1984).

61.

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because she has no direct evidence. 6 2 Since there is no direct evidence of the defect, the defect cannot be positively identified, making the defect an indeterminate defect.63 Finding strict liability for an indeterminate defect requires multiple inferences, including the existence of the defect, the existence of the defect when it left the manufacturer's control, and causation. 4 Jurisdictions are split as to what kind of inferences the fact finder is encouraged to draw in this situation and what effect those inferences will have.

A.

Jurisdictions Without an EstablishedDoctrine

In its most basic form, the analysis of an indeterminate defect applies circumstantial evidence in the traditional manner.6 ' Any time circumstantial evidence is used, the fact finder must draw an inference to get from A to C. 6 6 Each case's distinct factual scenario makes creating broad rules difficult. Jurisdictions without an established indeterminate-defect doctrine have chosen to analyze each products liability case in isolation, requiring plaintiffs to argue the inferences necessary to make their case. This is a minority practice among jurisdictions.67 Hawaii is one such state employing this method. 68 In the mid-1980s, Hawaii's highest court affirmed a recovery in strict products liability despite the fact that the defect was indeterminate. 69 In Wakabayashi v.

62.

See, e.g., id. ("[A] defect, like any other fact, may be proven entirely by circumstantial evidence.") (citing Barris v. Bob's Drag Chutes & Safety Equip., Inc., 685 F.2d 94, 101 (3d Cir. 1982); Famer v. Paccar, Inc., 562 F.2d 518, 522 (8th Cir. 1977); Stewart v. Ford Motor Co., 553 F.2d 130, 137 (D.C. Cir. 1977)).

63.

See DeWitt v. Eveready Battery Co., 565 S.E.2d 140, 149 (N.C. 2002). Unknown defects are also referred to as "general or unspecific defect[s]." Corcoran v. Gen. Motors Corp., 81 F. Supp. 2d 55, 65 (D.D.C. 2000).

64.

Fallon, 918 A.2d at 1075.

65.

See supra Part II.B; see, e.g., Dieker v. Case Corp., 73 P.3d 133, 145 (Kan. 2003).

66.

"Circumstantial evidence, in contrast, even if accepted, requires an additional mental step of inference in order to determine whether the material fact did or did not exist." Zamir et al., supra note 42, at 197-98.

67.

Ten states do not carve out a special form of circumstantial evidence application in products liability cases. See infra notes 68, 76, 86-87, 94-100.

68.

Hawaii is a minority jurisdiction in multiple aspects of products liability law. For example, the consumer expectations test is applied as an independent test for design defects in Hawaii. Ontai v. Straub Clinic & Hosp., Inc., 659 P.2d 734, 739 (Haw. 1983); see also RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 2 reporters' note II.D (1998) (listing Hawaii as one of few states that employ the consumer expectations test as an independent test for design defects). Additionally, Hawaii considers state-of-the-art evidence to be irrelevant to the issue of design defect. In re Haw. Fed. Asbestos Cases, 699 F. Supp. 233, 235-36 (D. Haw. 1988), affd, 960 F.2d 806 (9th Cir. 1992); see also RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 2 reporters' note IV.B (1988) (listing Hawaii as one of a minority ofjurisdictions that deems stateof-the-art evidence irrelevant with regard to the existence of a product defect).

69.

Wakabayashi v. Hertz Corp., 660 P.2d 1309, 1311, 1313 (Haw. 1983).

WHEN PRODUCTS SELF-DESTRUCT

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Hertz Corp., the plaintiff rented a car from Hertz while attending a convention in Honolulu. 70 En route to his hotel's parking garage, the plaintiffs rented Chevelle took on a life of its own and rocketed down the garage's entrance ramp. When the plaintiff attempted to brake, he felt resistance in the brake pedal, but the car did not stop.7 2 With a pedestrian in the car's projected path, the plaintiff slammed it into a concrete pillar. The court heard the plaintiffs testimony about the "bizarre accident," as well as statements from the Chevelle's passengers and "the testimony of the parking attendant at the hotel garage who observed that the car's rear brake lights were on as it raced down the entrance ramp into the basement garage." 7 4 The court found this evidence "sufficient to yield an inference that there was a defective condition which caused the accident." 75 In summary, Hawaii evaluated the available circumstantial evidence and drew inferences as appropriate for this particular case.

Like Hawaii, Indiana courts permit a strict products liability claim to reach the jury using circumstantial evidence in* "limited*,76 circumstances."

To prove a defect, "[a] plaintiff may introduce direct evidence from an eyewitness of the malfunction, supported by expert testimony explaining the possible causes of the defective condition." 7 7 "Plaintiffs may also 'introduce inferential evidence by negating other possible causes."' 78 In a recent federal district court case applying Indiana law, a chilly plaintiff turned up the heater next to his bed on an early October morning.7 9 Although the heater made noises suggesting it was operating, the plaintiffs cabin remained cold. 0 Upon standing, the plaintiff suddenly felt pressure on his left foot and looked down to find that his foot looked as if it was "boiling," although in reality the bubbles were large, moving blisters.81 The plaintiff guessed that his foot had been hit by a blast of exceptionally hot air and described the event as "a spiritual thing .... [The heater sounded] like it was possessed." 8 2 Id. at 1311.

70.

71.

Id. 72.

Id. 73.

Id. 74.

Id. at 1313.

75.

Id. (quoting Stewart v. Budget Rent-A-Car Corp., 470 P.2d 240, 244 (Haw. 1970)).

76.

McClellon v. Thermo King Corp., No. 1:11-cv-01337-SEB-MJD, 2013 WL 6571946, at *7 (S.D. Ind. Dec. 13, 2013).

77.

Id. (alteration in original) (quoting Whitted v. Gen. Motors Corp., 58 F.3d 1200, 1207 (7th Cir. 1995)).

78.

Id. (quoting Whitted, 58 F.3d at 1207).

79.

Id. at *1.

80.

81.

82.

Id. Id. Id.

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A maintenance manager and an accounts manager for the heater's manufacturer examined the heating component but found no evidence or 83 explanation of a malfunction. No expert could identify a defect in the system. 84 This proved fatal to the plaintiffs claim. Because the court held that it would be too large an inferential leap to conclude that the heater was defective, it granted the defendants' motions for summary judgment.85 The court found this was not one of the "limited circumstances" in which circumstantial evidence could create a fact issue sufficient to prevent summary judgment.

The Sunflower State gives circumstantial evidence kinder treatment. A Kansas court permitted a little bit of the right kind of circumstantial evidence to carry the plaintiff a long way in Dieker v. Case Corp.87 In Dieker, the plaintiff had only one expert to opine the cause of a stove's unprovoked self-ignition.8 A jury found for the plaintiff; however, the court of appeals found the plaintiff s sole expert unqualified and, as a result, reversed the jury's decision.89 The Kansas Supreme Court disagreed with the court of appeals and found, first, that the expert's qualifications supported the jury's reliance on his opinion. 90 Second, and pertinent to this discussion, the court noted: [T]he elements of a product liability action: "may be proved by circumstantial evidence .

. .

. It is quite

proper to use expert testimony to prove the cause of a fire provided the opinion of the expert is based upon adequate facts and is not based upon evidence which is too uncertain or speculative."

Circumstantial evidence can serve as proof of the elements of a theory of liability by a preponderance of the evidence even though other reasonable theories are not excluded by such evidence. 91 Notably, this decision gave the plaintiffs circumstantial case exceptionally favorable treatment. The court affirmed the plaintiffs recovery despite the fact that the expert had not excluded other reasonable theories. 92 This is an interesting deviation from the practices of other courts,

83.

Id. at *6.

84.

Id. 85.

Id. at *9, *11.

86.

Id. at *7-8.

87.

Dieker v. Case Corp., 73 P.3d 133 (Kan. 2003).

88.

Id. at 142.

89.

Id. at 141.

90.

Id. at 146.

91.

Id. at 145-46 (citation omitted) (quoting Farmers Ins. Co. v. Smith, 549 P.2d 1026, 1033 (Kan. 1976)).

92.

Id. at 146.

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which overwhelmingly require plaintiffs to eliminate other reasonable causes of the incident if the case is to successfully stand on circumstantial evidence alone. 9 3 Comparing the courts' treatments of Dieker's stove, Wakabayashi's rental car, and McClellon's heater illustrates the variations in how circumstantial evidence is applied to various facts in different jurisdictions.

Kentucky, 94 New Mexico, 95 Rhode Island, 96 South Dakota,97 Tennessee," Texas, 9 9 and Vermont' 00 join Hawaii, Indiana, and Kansas in the category of states that recognize circumstantial evidence's ability to prove a prima facie case of products liability but do not offer an established inference to be made from circumstantial evidence.

This minority approach is subject to criticism. Product-less plaintiffs start off in the less-than-advantageous position of being short on

93.

For a discussion concerning the requirement of eliminating reasonable secondary causes of the product's malfunction in circumstantial products liability cases, see infra Part I1.D.2.

94. The indeterminate defect issue in Kentucky has only been recently litigated and only in federal court applying Kentucky law. See Siegel v. Dynamic Cooking Sys., Inc., 501 F. App'x 397, 402-03 (6th Cir. 2012) (quoting Kiser v. Bryant Electric (In re Beverly Hills Fire Litig.), 695 F.2d 207, 219 (6th Cir. 1982)).

95. Lovington Cattle Feeders, Inc. v. Abbott Labs., 642 P.2d 167, 171 (N.M. 1982) ("Under the circumstantial evidence rule, if the facts and circumstances, together with the reasonable inferences therefrom, indicate with reasonable certainty that the product was defective and caused plaintiff's damages, then plaintiff should prevail.").

96. Olshansky v. Rehrig Int'l, 872 A.2d 282, 287 (R.I. 2005) (per curiam) ("A plaintiff is permitted to draw inferences of fact based on circumstantial evidence; however, simply establishing that use of the product resulted in injury will not satisfy the burden."), overruled in part by Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446 (R.I. 2013).

97. Shaffer v. Honeywell, Inc., 249 N.W.2d 251, 256 (S.D. 1976) ("No specific defect need be shown if the evidence, direct or circumstantial, permits the inference that the accident was caused by a defect. . . . Causation may be established by circumstantial evidence where that evidence establishes by a preponderance, the probability that the accident was caused by a defect."), overruled in part on other grounds by First Premier Bank v. Kolcraft Enter., Inc., 686 N.W.2d 430 (S.D. 2004).

98. Browder v. Pettigrew, 541 S.W.2d 402, 405 (Tenn. 1976) ("[A] defect in a product, as well as any other material fact, may be proven by direct evidence, circumstantial evidence, or a combination of direct and circumstantial evidence.").

Kia Motors Corp. v. Ruiz, 432 S.W.3d 865, 878 (Tex. 2014) (permitting recovery for 99. an indeterminate defect in a design defect case); Ford Motor Co. v. Ledesma, 242 S.W.3d 32, 42 (Tex. 2007) (requiring a plaintiff claiming a manufacturing defect to show deviation from the manufacturer's design; in turn, requiring identification of a specific defect using competent evidence).

100. Travelers Ins. Cos. v. Demarle, Inc., USA, 878 A.2d 267, 272 (Vt. 2005) ("[C]ausation in a products liability or warranty case can be proved through circumstantial evidence . . . ."). But see Allstate Ins. v. Hamilton Beach/Proctor Silex, Inc., 473 F.3d 450, 455 (2d Cir. 2007) (predicting that the Vermont Supreme Court would follow RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3 (1998)).

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evidence.10 1 Because strict products liability was created, in part, to protect the public, it should be readily available. 102 Having an available avenue for recovery but making that avenue difficult for a select group of consumers is counter to the core of strict products liability. A plaintiff who is injured by a defective product and is foreclosed from recovery due to that same product's self-destruction is twice injured.

On the other side of the coin, doctrines that provide assistance to product-less plaintiffs have been subject to criticism in the scholastic realm.

The absence of evidence does not make a fact more probable but merely lightens the plaintiffs evidentiary burden despite the fact that the missing evidence might well have gone either way; ... this rationale is too often subject to misapplication by courts in situations in which evidence actually is available. When courts permit an indeterminate defect [claim] to go to the jury simply because the most critical piece of evidence is missing, they are often engaging in a result-oriented, rather than a logical, analysis. 3 This concern that circumstantial evidence doctrines are too plaintifffriendly has been echoed in courts as well. 104 Nevertheless, the majority approach provides the product-less plaintiff with at least some inferential structure in which to make a claim.

B.

Res Ipsa Loquitur

Before strict liability, courts evaluated liability for self-destructing products using the negligence doctrine of res ipsa loquitur. Res ipsa loquitur, Latin for "the thing speaks for itself," is a rule of evidence that allows a plaintiff to use the circumstantial evidence surrounding an injury to support a plaintiffs claim.105 This doctrine has an established place in 101. "[W]hen the product unit involved in the harm-causing incident is lost or destroyed in the accident, direct evidence of specific defect may not be available." RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3 cmt. b (1998).

102. "[M]any believe that consumers who benefit from products without suffering harm should share, through increases in the prices charged for those products, the burden of unavoidable injury costs that result from manufacturing defects." RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 2 cmt. a (1998).

103. Jonathan M. Hoffman, Res Ipsa Loquitur and IndeterminateProduct Defects: If They Speak for Themselves, What Are They Saying?, 36 S. TEX. L. REv. 353, 362 (1995) (footnote omitted).

104.

See, e.g., Roselli v. Gen. Elec. Co., 599 A.2d 685, 687-88 (Pa. Super. Ct. 1991) (quoting Martin v. Volkswagen of Am., Inc., CIV. A. No. 88-8261, 1989 WL 81296, at *2 (E.D.

Pa. July 13, 1989)).

105.

G. Gregg Webb, Note, The Law of Falling Objects: Byrne v. Boadle and the Birth of Res Ipsa Loquitur, 59 STAN. L. REV. 1065, 1065 (2007). For an extensive discussion on the history of res ipsa loquitur, see id.

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American negligence law; however, the idea originated in the English Court of Exchequer.' 06 In England in 1863, a barrel of flour rolled out of the second floor of a barn, struck a passerby walking underneath, and, as William Prosser said, rolled "into the lives of all tort lawyers."

Faced with this wayward barrel, the English court crafted the now-famous tort doctrine of res ipsa loquitur. The court held that the peculiar circumstances of the accident generated a presumption of negligence, allowing recovery even though the plaintiff could not prove negligence directly. 0 7 The U.S. Supreme Court introduced American law to res ipsa loquitur in 1913.108 The doctrine was later recognized in the Restatement (Second) of Torts § 328D and adopted in one form or another in the vast majority of states. 109 Res ipsa loquitur cases can be referred to as circumstantial evidence cases. "o Although this is a fair representation, it is not entirely accurate, as bundling res ipsa loquitur cases with circumstantial evidence cases misses the core of the doctrine. Without the application of res ipsa loquitur, a plaintiff must identify the defendant's specific negligent conduct. Res ipsa loquitur is distinguishable because it assists the plaintiff by providing a 106.

Byrne v. Boadle, (1863) 159 Eng. Rep. 299, 299-300 (Exch.).

107.

Matthew R. Johnson, Note, Rolling the "Barrel"a Little Further: Allowing Res Ipsa Loquitur to Assist in Proving Strict Liability in Tort Manufacturing Defects, 38 WM. & MARY L. REV. 197, 1197 (1997) (footnotes omitted) (citing Byrne, 159 Eng. Rep. at 300-01).

108.

See Sweeney v. Erving, 228 U.S. 233, 240 (1913).

[R]es ipsa loquitur means that the facts of the occurrence warrant the inference of negligence, not that they compel such an inference; that they furnish circumstantial evidence of negligence where direct evidence of it may be lacking, but it is evidence to be weighed, not necessarily to be accepted as sufficient; that they call for explanation or rebuttal, not necessarily that they require it; that they make a case to be decided by the jury, not that they forestall the verdict.

Id. 109.

See DAVID G. OWEN & MARY J. DAVIS, OWEN & DAVIS ON PRODUCTS LIABILITY

§

2:27 (4th ed. 2014) ("Res ipsa loquitur ('res ipsa') is an established doctrine of circumstantial evidence, applied by name in nearly every state . . . . (footnote omitted)); RESTATEMENT (SECOND) OF TORTS § 328D (1965).

(1) It may be inferred that harm suffered by the plaintiff is caused by negligence of the defendant when (a) the event is of a kind which ordinarily does not occur in the absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff.

RESTATEMENT (SECOND) OF TORTS § 328D (1965).

110.

See FRANK L. MARAIST & THOMAS C. GALLIGAN, JR., LOUISIANA TORT LAW

8.06[4] (2d ed. 2005).

§

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strong inference of negligence without the need for the plaintiff to identify any particular misconduct by the defendant."' Byrne's wayward barrel illustrates this distinction.

When the injured passerby in Byrne v. Boadle brought his case to court, he was not required to prove that the barrel was precariously stored on a window ledge." 2 The plaintiff did not need to point to any specific facts showing the defendant's negligence." 3 The defendant was almost magically held responsible for acts no one will ever know. While all of the evidence in Byrne was circumstantial in nature, it was not the quality or quantity of circumstantial evidence that would be necessary to prove a circumstantial evidence case without the assistance of res ipsa loquitur.

Res ipsa loquitur made its most famous American appearance as applied to liability for a defective product in Escola v. Coca Cola Bottling Co. 114 Escola tells a story set in the summer of 1941, when a waitress named Ms. Gladys Escola was working a dinner shift at Tiny's Waffle Shop in California." 5 As Ms. Escola was restocking Tiny's refrigerator with bottles of Coca-Cola, one bottle exploded, slicing the waitress's hand.' In an attempt to recover against Coca-Cola, Ms. Escola hired a trial attorney who is now known as the "King of Torts," Mr. Melvin Belli."' Mr. Belli pronounced in his opening statement: "We are going to rest our case completely on the doctrine we call res ipsa loquitur: The thing speaks for itself. Our theory of the case is that we have no way of showing any specific act of negligence."" 8 Mr. Belli's argument won the day for Ms. Escola and sealed his place in decades' worth of American tort law textbooks." 9 At the most basic level, a court applying res ipsa loquitur resolves the litigants' dispute via circumstantial evidence.' 20 However, the quality and quantity of circumstantial evidence sufficient to satisfy res ipsa loquitur is 111.

112.

113.

114. bank).

115. in TORTS 116.

117.

See Sweeney, 228 U.S. at 240.

See Byrne, 159 Eng. Rep. at 30(M1.

See Johnson, supra note 107, at 1201.

See Escola v. Coca Cola Bottling Co. of Fresno, 150 P.2d 436, 437-38 (Cal. 1944) (in Mark Geistfeld, Escola v. Coca Cola Bottling Co.: Strict ProductsLiability Unbound, STORIES 229, 229 (Robert L. Rabin & Stephen D. Sugarman eds., 2003).

Escola, 150 P.2d at 437-38.

Geistfeld, supra note 115, at 230 & n.3. Melvin Belli received the moniker "King of

Torts" in a 1954 Life Magazine article. Id. at 230 n.3. As a side note, he is also the attorney who represented Jack Ruby, the man who killed John F. Kennedy's assassin, Lee Harvey Oswald. Id. 118.

Id. at 230.

Escola, 150 P.2d at 440; see, e.g., RUSSELL L. WEAVER ET AL., TORTS: CASES, PROBLEMS AND EXERCISES (2d ed. 2005).

119.

120.

See FRANK L. MARAIST & THOMAS C. GALLIGAN, Jr., LOUISIANA TORT LAW

8.06[4] (perm. ed., rev. vol. 2013).

§

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particular to the res ipsa doctrine. Because of the inferences provided by the application of res ipsa loquitur, the plaintiff needs less evidence to carry her burden than a traditional circumstantial evidence case requires. To illustrate the windfall res ipsa provides, once again consider Ms. Gladys Escola's situation. 121 Ms. Escola convinced the finder of fact that Coca-Cola negligently manufactured the soda bottle simply by showing that the only reasonable explanation for the incident was Coca-Cola's unspecified lack of due care.12 She was not required to prove the bottle, which was charged with gas to create the drink's carbonation, suffered excessive internal pressures.1 23 She did not have to demonstrate that the bottle's manufacturing process made the green glass more susceptible to defects and thus more likely to shatter.1 24 The court simply deemed Coca-Cola negligent for unidentified yet allegedly unreasonable acts. 125 Escola was decided in 1941, well before America's development of strict products liability in the 1960s. Accordingly, Ms. Escola recovered against Coca-Cola under a negligent manufacturing cause of action.1 26 Res ipsa loquitur is a presumption of negligence and Escola is representative of

.

121.

See Escola, 150 P.2d at 437-38.

Id. at 440.

122.

123.

Id. at 439.

124.

Ms. Escola's proof consisted of testimony "that when the bottle exploded, '[i]t made a sound similar to an electric light bulb that would have dropped. It made a loud pop."' Id. at 438. A representative of Tiny's Waffle Shop told the court, "'I was about twenty feet from where it actually happened and I heard the explosion."' Id. Another employee who had been standing on the customer's side of the diner's counter testified that Ms. Escola "had the bottle, I should judge, waist high, and I know that it didn't bang either the case or the door or another bottle . . . when it popped. It sounded just like a fruit jar would blow up . . . ." Id. (alterations in original) (internal quotation marks omitted). Additionally, a Coca-Cola delivery driver "testified that he had seen other bottles of Coca Cola in the past explode and had found broken bottles in the warehouse when he took the cases out, but that he did not know what made them blow up." Id. 125.

"Although it is not clear in this case whether the explosion was caused by an excessive charge or a defect in the glass, there is a sufficient showing that neither cause would ordinarily have been present if due care had been used." Id. at 440. For a similar illustration of the "mysterious" power of res ipsa loquitor applied to Byrne's wayward barrel, see DAN B. DOBBS, THE LAW OF TORTS 372 (1st ed. 2000).

126.

Escola, 150 P.2d at 440. See generally Birmingham Coca-Cola Bottling Co. v. Sellers, 39 So. 2d 706, 707 (Ala. Ct. App. 1949) ("[Plaintiff] . . . charg[ed] negligence in the bottling and selling of a beverage known as Coca-Cola containing a deleterious substance, i.e., a cockroach or bug of some kind."); Eisenbeiss v. Payne, 25 P.2d 162, 164 (Ariz. 1933) ("[P]laintiff . . purchased . .. a bottle of Coca-Cola ... and after drinking from the bottle a portion of the contents thereof, and noticing that it did not taste right, discovered the skeleton of a mouse in the beverage yet remaining in the bottle."); Pillars v. R. J. Reynolds Tobacco Co., 78 So. 365, 366 (Miss. 1918) ("We can imagine no reason why, with ordinary care, human toes could not be left out of chewing tobacco, and if toes are found in chewing tobacco, it seems to us that somebody has been very careless.").

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its application.127 However, as time went on, plaintiffs attempted to use this same doctrine not to demonstrate the manufacturer's negligence, but to prove the manufacturer's liability under strict products liability-a creative, yet widely rejected tactic. 128 While res ipsa loquitur is alive and well today in various forms, many states have expressly rejected the application of res ipsa loquitur to a strict products liability claim. 129 Their reasoning is varied. One common theme is the courts' unwillingness to apply a negligence doctrine to a concept, which, by definition, does not require a plaintiff to prove negligence.i"o Another recurring justification for the rejection of res ipsa loquitur in strict products liability is that it has two alternate procedural effects in modern-day jurisdictions,'"' one of which is considered highly incompatible with strict products liability. 13 2 Res ipsa loquitur only creates a permissible inference of negligence in the majority of states, 13 3 which means the fact finder may choose to use the known facts to bridge the gap of the unknown to find the defendant negligent.1 34 The plaintiff carries the burden of proof

127. Compare Escola, 150 P.2d at 437 ("Plaintiff, a waitress in a restaurant, was injured when a bottle of Coca Cola broke in her hand."), with RESTATEMENT (SECOND) OF TORTS § 328D cmt. c (1965) ("The first requirement for the application of the rule stated in this [s]ection is a basis of past experience which reasonably permits the conclusion that such events do not ordinarily occur unless someone has been negligent.").

128. See, e.g., Welge v. Planters Lifesavers Co., 17 F.3d 209, 211 (7th Cir. 1994) ("The doctrine is not strictly applicable to a products liability case because unlike an ordinary accident case the defendant in a products case has parted with possession and control of the harmful object before the accident occurs.").

129. See, e.g., Brooks v. Colonial Chevrolet-Buick, Inc., 579 So. 2d 1328, 1333 (Ala. 1991); Barrett v. Atlas Powder Co., 150 Cal. Rptr. 339, 342 (Ct. App. 1978); Eisenmenger v. Ethicon, Inc., 871 P.2d 1313, 1317 (Mont. 1994); Browder v. Pettigrew, 541 S.W.2d 402, 404 (Tenn.

1976).

130. See, e.g., State Auto Mut. Ins. Co. v. Chrysler Corp., 304 N.E.2d 891, 894 (Ohio 1973) ("In cases involving strict liability, the theory of plaintiffs case, proof of negligence is not required, and the doctrine of res ipsa loquitur is applicable only insofar as it allows a jury to infer negligence once a plaintiff has met his burden of proof.").

131.

DAVID G. OWEN, M. STUART MADDEN & MARY J. DAVIS, MADDEN & OWEN ON

PRODUCTS LIABILITY

§ 7.9 (3d

ed. 2000).

132. See Jenkins v. Whittaker Corp., 785 F.2d 720, 732-33 (9th Cir. 1986).

133. Inference is defined as "[a] conclusion reached by considering other facts and deducing a logical consequence from them." BLACK'S LAW DICTIONARY, supra note 21, at 897. ...

134.

See Read v. S. Pine Elec. Power Ass'n, 515 So. 2d 916, 920 (Miss. 1987) ("Thejury is not bound to make the inference.").

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and must convince the fact finder to apply the inference.' 35 When a fact finder chooses to do so, the plaintiffs burden is met.136 A minority of jurisdictions recognize res ipsa loquitur as creating a presumption'3 7 of negligence,13 1 which requires the defendant to put on evidence to rebut its liability.' 39 If the defendant fails to show sufficient negating evidence, the jury must find the defendant liable of negligence.1 4 0 In these jurisdictions, the application of res ipsa loquitur to strict products liability actions can be exceptionally harsh to manufacturers, as it forces the defendant to rebut an inference without the assistance of direct evidence and holds the defendant strictly liable if it fails to do so.141 Wisconsin added to the unfairness by implying that it would apply res ipsa loquitor to strict products liability.1 42 In Volden v. OKK Corp., the jury Myrlak v. Port Auth., 723 A.2d 45, 51 (N.J. 1999) ("Ordinarily, negligence is . . . 'a 135. fact which must be proved and which will never be presumed,' and the burden of proving negligence in any particular case is on the plaintiff." (citation omitted) (quoting Meny v. Carlson, 77 A.2d 245, 249 (N.J. 1950))).

"In the words of another eminent, but exasperated, scholar, res ipsa loquitur 'is used in 136. different senses[;] . . . it means inference, it means presumption, it means no one thing-in short it means nothing."' Webb, supra note 105, at 1066 (alterations in original).

Presumption is defined as follows: 137.

A legal inference or assumption that a fact exists because of the known or proven existence of some other fact or group of facts. Most presumptions are rules of evidence calling for a certain result in a given case unless the adversely affected party overcomes it with other evidence. A presumption shifts the burden of production or persuasion to the opposing party, who can then attempt to overcome the presumption.

BLACK'S LAw DICTIONARY, supra note 21, at 1376.

See, e.g., Stone's Farm Supply, Inc. v. Deacon, 805 P.2d 1109, 1114 (Colo. 1991) (en 138. banc) ("Res ipsa loquitur is a rule of evidence, and as such gives rise to a rebuttable presumption of the defendant's negligence . . . ." (citing Graf v. Tracy, 568 P.2d 467 (Colo. 1977))).

See Brown v. Poway Unified Sch. Dist., 843 P.2d 624, 627 (Cal. 1993) (in bank); 139.

Anderson v. Orscheln Bros. Truck Lines, Inc., 393 S.W.2d 452, 457 (Mo. 1965); Shadkhoo v.

Shilo E. Farms, Inc., 399 S.E.2d 319, 321 (N.C. 1991); Jackson v. Okla. Mem'I Hosp., 909 P.2d 765, 770 (Okla. 1995).

See Deacon, 805 P.2d at 1114.

140.

After finding . . . that the farmers had met the requirements for the use of res ipsa loquitur, the trial court required [the defendant] to come forward with exculpatory evidence and to rebut the presumption of negligence. [The defendant] did not rebut the presumption of negligence and was held liable for the damage to the farmers' potato crops ....

Id. As applied to products liability, at least one court has recognized the uncomfortable 141. position a defendant manufacturer is placed in if the burden of proof is shifted to the manufacturer. See Jenkins v. Whittaker Corp., 785 F.2d 720, 732-33 (9th Cir. 1986) (comparing the appropriateness of the applicability of res ipsa loquitur to strict products liability in Hawaii, where res ipsa loquitur is merely an inference, with California, where res ipsa loquitur shifts the burden of proof to the defendant).

"Wisconsin has long been the lone star state in our products liability law, marching to 142. its own, sometimes quite peculiar, drummer." Godoy ex rel. Gramling v. E.I. du Pont de Nemours & Co., 768 N.W.2d 674, 700 (Wis. 2009) (quoting James A. Henderson, Jr. & Aaron D. Twerski,

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found for the plaintiff under both negligence and strict products liability.143 The trial judge granted the defendant judgment notwithstanding the verdict on the products liability claim on the ground that the plaintiffs expert relied on a res-ipsa-loquitor-type argument but did not provide enough evidence to support the inference.1 4 4 The appellate court reversed the trial court and reinstated the jury's finding of strict products liability. 14 5 One dissenting judge agreed with the trial court and compared it to an "instructive" case with similar facts. 14 6 The instructive case successfully applied res ipsa loquitor under a negligence cause of action.1 4 7 The dissenting judge suggested that if the plaintiff had, in his strict products liability case, matched the evidence in the instructive case, then the dissent would have agreed with the jury's strict liability finding. 148 An alternate approach to products liability based on res ipsa loquitur is to partially apply the doctrine. Washington, D.C. has adopted a strict products liability practice similar to the second and third elements of res ipsa loquitur without adopting the term itself.1 4 9 First, "[a] plaintiff [can] establish a manufacturing defect by presenting . .. evidence tending to negate causes for the accident other than a defect,"150 which reflects res ipsa loquitur's second element-eliminating reasonable secondary causes.

Second, Washington, D.C. requires "evidence tending to show that the defendant-manufacturer introduced into the [product] whatever defect might have existed,"' 5 ' which reflects the control element of res ipsa loquitur.

A Fictional Tale of Unintended Consequences: A Response to Professor Wertheimer, 70 BROOK. L. REV. 939, 940 (2005)).

143.

Volden v. OKK Corp., 632 N.W.2d 123, 2001 WL 650703, at *1 (Wis. Ct. App. 2001) (unpublished table decision).

144.

"The jury could only speculate that the window material utilized did not meet minimum standards and therefore created an unreasonably dangerous machine." Id. at *6 (Brown, J., dissenting).

145.

Id. at *5 (majority opinion).

146.

Id. at *6 (Brown, J., dissenting).

147.

Id. at *6 (citing Lee v. Milwaukee Gas Light Co., 122 N.W.2d 374 (Wis. 1963)).

148.

Id. at *7.

149.

See Pappas v. Ford Motor Co., 7 F. Supp. 2d 22, 26 (D.D.C. 1998).

150.

Id. (second alteration in original) (quoting McFarlane v. Caterpillar, Inc., 974 F.2d 176, 179 (D.C. Cir. 1992)).

151.

Id. (quoting McFarlane, 974 F.2d at 179). Similarly, Wisconsin has held that "a res ipsa type of inference is enough to establish a defect if the plaintiff can show that he was properly using the product and can negative other possible causes of the product failure since it left the manufacturer's control." Rennick v. Fruehauf Corp., 264 N.W.2d 264, 267 (Wis. 1978). The Ninth Circuit, applying Hawaii law, has found that "nothing bars application of the res ipsa loquitur theory to strict liability." Jenkins v. Whittaker Corp., 785 F.2d 720, 733 (9th Cir. 1986).

However, Hawaii's high court has not addressed this issue since Jenkins.

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One state stands alone in expressly refusing to join the antiproductsliability-res-ipsa bandwagon-Louisiana.1 5 2 Questions arise concerning Louisiana's application of res ipsa loquitur in the negligence arena, specifically concerning the effect Louisiana jurisprudence gives to a successful application of the doctrine. It is unclear whether Louisiana is in the majority of states that recognize res ipsa loquitur as a permissible inference or in the minority that allows it to burden-shift.1 54 Either way, Louisiana applies res ipsa loquitur to products liability.155 An additional argument against res ipsa loquitur's application in strict products liability is the negligence-based requirement that the defendant have exclusive control of the mechanism of injury before res ipsa loquitur applies.1 56 Jurisdictions inconsistently require plaintiffs relying on res ipsa loquitur to establish that the defendant had exclusive control over the instrument of injury. 157 Modified res ipsa loquitur jurisdictions have

152.

See Lawson v. Mitsubishi Motor Sales of Am., Inc., 938 So. 2d 35, 49 (La. 2006) ("Traditionally, the evidentiary doctrine of res ipsa loquiturhas been used in tort actions to establish negligence on the part of a defendant; however, we conclude that this evidentiary doctrine may also be utilized in the context of a products liability action.").

153.

See id. at 44. If reasonable minds could differ as to all three criteria, then the law permits the use of res ipsa loquitur to allow the jury to infer negligence if it chooses to do so from all the circumstances presented, including the incident itself. Id. 154.

See id. at 49 ("This inference merely shifts the burden of proof to the defendantmanufacturer, such that the manufacturer must prove that the product was not defective when it left the manufacturer's control.").

155.

Generally, three criteria must be present for the doctrine to be applicable: 1) the facts must indicate that the plaintiffs injuries would not have occurred in the absence of negligence; 2) the plaintiff must establish that the defendant's negligence falls within his scope of duty to plaintiff; and 3) the evidence should sufficiently exclude inference of the plaintiffs own responsibility or the responsibility of others besides defendant in causing the accident.

Id. at 50 (emphasis omitted).

156.

This element is not found in the Restatement (Second) of Torts § 328D, but state courts have added this element (and have enforced it with various levels of severity) to help reduce the likelihood that someone or something other than the defendant committed the negligent act. See, e.g., Brown v. Poway Unified Sch. Dist., 843 P.2d 624, 627 (Cal. 1993) (in bank); James v.

Wormuth, 997 N.E.2d 133, 137-38 (N.Y. 2013); Darrah v. Bryan Mem'l Hosp., 571 N.W.2d 783, 787 (Neb. 1998); Curtis v. Lein, 239 P.3d 1078, 1082 (Wash. 2010) (en banc).

157.

This requirement is the distinction between traditional res ipsa loquitur and modified res ipsa loquitur. For a discussion about the requirements and arguments for and against the alternating theories, see Rhode Island's confusing line of precedent. The Rhode Island Supreme Court initially eliminated the necessity of proving exclusive control in res ipsa loquitur cases.

Parrillo v. Giroux Co., 426 A.2d 1313, 1320 (R.I. 1981). Twelve years later, the court suggested in a memorandum opinion that exclusive control is an element of a successful res ipsa loquitur case.

Voyer v. New England Chemical Co., 634 A.2d 1175, 1176 (R.I. 1993), overruled in part by Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446 (R.I. 2013). Only five years passed before the court then recognized that its precedent did not require a showing of exclusive control. Errico v.

LaMountain, 713 A.2d 791, 796 (R.I. 1998) (recognizing the court's precedent "part[ed]

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interpreted the control element as necessitating proof that the defendant had control of the injurious instrument when the negligent act happened, not when the injury occurred.' Jurisdictions that hold true to the traditional res ipsa loquitur standard of control refuse to apply the doctrine to strict products liability because the product was in the control of the injured Either way, plaintiff, not the manufacturer, when it did its damage. inferring the existence of a defect and its contribution to the plaintiffs injury is more speculative in products liability than in negligence, lending further support to the argument against its use in indeterminate defect cases. 1o Whether to use res ipsa loquitur in indeterminate defect cases is not a meaningless debate.' 6 ' While some believe that "the doctrine [of res ipsa loquitur] merely instantiates the broader principle, which is as applicable to a products case as to any other tort case, that an accident can itself be

company" with the need to show exclusive control). One year later, the court changed its position again. Lauro v. Knowles, 739 A.2d 1183, 1185 (R.I. 1999) (per curiam), overruled in part by Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446 (R.I. 2013). Six years later, the court resurrected the exclusive control requirement. Olshansky v. Rehrig Int'l, 872 A.2d 282, 288-89 (R.I. 2005) (per curiam), overruled in part by Cruz v. DaimlerChrysler Motors Corp., 66 A.3d 446 (R.I. 2013). Most recently, the court declared that "the critical inquiry is not control, but whether a particular defendant is the responsible cause of the [plaintiffs] injury." Cruz, 66 A.3d at 452.

See, e.g., Wilson v. Cooke, 26 P.3d 822, 826 (Or. Ct. App. 2001) (citing Pattle v.

158.

Wildish Constr. Co., 529 P.2d 924 (Or. 1974)).

[T]he requirement of control by the defendant under the doctrine of res ipsa loquitur does not mean that the defendant must have had exclusive physical possession of the injury-producing instrumentality. Rather, the requirement is that it must appear from the evidence that the negligence of which the thing speaks is probably that of defendant and not of another.

Id. See, e.g., Cassisi v. Maytag Co., 396 So. 2d 1140, 1151-52 (Fla. Dist. Ct. App. 1981) 159. ("Before res ipsa may be applied, the injured plaintiff must prove the product causing his injury was under the exclusive control of the defendant. In a strict liability action, the fact that the defendant was not in control of the product when the injury occurred is obviously not a bar to the application of the product defectiveness inference . . . ." (footnote omitted)).

160.

When the product is out of the control of the manufacturer, the likelihood of other potential causes of the accident that are not attributable to the manufacturer necessarily increases. Additionally, product accidents often occur for a variety of reasons that do not indicate the existence of a defect. For these reasons, an inference that an accident involving a product resulted from something attributable to the manufacturer is much more speculative than an inference of negligence by the defendant in res ipsa cases, in which the instrumentality is, by definition, within the control of the defendant.

Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 25 A.3d 571, 582 (Conn. 2011) (footnote omitted) (citations omitted).

Contra Lawson v. Mitsubishi Motor Sales of Am., Inc., 938 So. 2d 35, 48 (La. 2006) 161. ("There is a certain amount of perhaps meaningless debate over whether res ipsa loquiturapplies in strict product liability cases." (citing MARAIST & GALLIGAN, supra note 110, § 8.06[4])).

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evidence of liability," 6 2 this is not the message plaintiffs are receiving. The danger in applying res ipsa loquitur to products liability cases involving indeterminate defects is the confusion that stems from the improper label.

This has muddied the products liability waters and made recovery confusing for the product-less plaintiff.

Bielskis v. Louisville Ladders, Inc. exemplifies the confusing precedent.' 63 Mr. Bielskis was injured when an allegedly defective stud caused the wheel of the scaffolding he was standing on to break.16 The plaintiff threw every available dart at the liability bullseye, bringing claims of manufacturing defect, design defect, warning defect (all products liability claims), and res ipsa loquitur.1 6 5 The plaintiff, thinking he was correctly pleading res ipsa loquitur, alleged that "the threaded stud at the caster of the scaffold ...

would not have broken . .. in the absence of negligence,

rendering the product unreasonably dangerous when it left the control of the manufacturer." 6 6 The U.S. District Court for the Northern District of Illinois agreed with the plaintiff, holding that "res-ipsa's circumstantialevidence-based method of proving liability applies in both the negligence and strict liability contexts" and confusingly adopted a "strict liability variant of res ipsa."l6 7 The court is in for a sticky time when the next similar issue surfaces. Granted, res ipsa loquitur can be a helpful jurisprudential guide, but blending the term of art with a separate, newly created doctrine may be more confusing than helpful. 6 8

Welge v. Planters Lifesavers Co., 17 F.3d 209, 211 (7th Cir. 1994).

162.

163.

Bielskis v. Louisville Ladders, Inc., No. 07 c 1411, 2007 WL 2088583 (N.D. Ill. July 18, 2007).

Id. at *1.

164.

165.

Id. Id. at *3 (alterations in original).

166.

Id. at *2-3 ("[T]he strict liability variant of res ipsa has two elements: (1) that the case 167. present 'the kind of accident that would not have occurred but for a defect in the product,' and that (2) 'it [be] reasonably plain that the defect was not introduced after the product was sold." (second alteration in original) (quoting Welge, 17 F.3d at 211)).

See Crump v. Versa Prods., Inc., 400 F.3d 1104, 1109 (8th Cir. 2005) ("In both [the 168. prior res ipsa loquitur case] and this case, the challenged instruction, in context, requires more than an injured party in order to impose liability. The instructions in [the prior res ipsa loquitur case] required that the jury find negligence, while here, the instructions require the jury find the ladder 'unreasonably dangerous."'); Stewart v. Ford Motor Co., 553 F.2d 130, 138 (D.C. Cir. 1977) ("Under District law res ipsa simply allows a case to go to the jury; it raises no presumptions and it does not shift the burden of proof. We think, therefore, that plaintiffs' theory [about circumstantial evidence in the products liability context] should similarly be treated as a procedural rule of evidence and not a rule of pleading." (citation omitted) (internal quotation marks omitted)); Pappas v. Ford Motor Co., 7 F. Supp. 2d 22, 26 (D.D.C. 1998) (discussing the proof requirement in an "unspecified defect" case).

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Section 3 of the Restatement (Third) of Torts: Products Liability

The Restatement (Third) of Torts: Products Liability is the ALI's current position on indeterminate defects.' 6 9 Section 3 closely resembles Restatement (Second) of Torts § 328D.' 70 Restatement (Third) § 3 It may be inferred that the harm sustained by the plaintiff was caused by a product defect existing at the time of sale or distribution, without proof of a specific defect, when the incident that harmed the plaintiff(a) was of a kind that ordinarily occurs as a result of product defect; and (b) was not, in the particular case, solely the result of causes other than product defect existing at the time of sale or distribution.

1Restatement (Second) § 328D It may be inferred that harm suffered by the plaintiff is caused by negligence of the defendant when (a) the event is of a kind which ordinarily does not occur in the absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff.1 72

This similarity was intentional, as ALI members felt that res ipsa loquitur was easily recognizable.1 7 3 In creating this restatement of the law of indeterminate product defects, the ALI referenced cases from across the country.174 According to the ALI, while indeterminate product defect cases "are only a small number of cases, they are an important number of cases, and as matters of fairness they must be able to be preserved because of the 169.

See RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. intro. (1998).

170.

Compare RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. RESTATEMENT (SECOND) OF TORTS 328D (1965).

171.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3 (1998).

172.

RESTATEMENT (SECOND) OF TORTS § 328D (1965).

§ 3 (1998),

with

173.

See AM. L. INST. 72ND ANNUAL MEETING PROCEEDINGS 239 (1995) ("[R]es ipsa is a doctrine which has a well-defined niche in the law of torts. . . . It deals with a special class of cases, and we place them in classic res ipsa language to permit commonsense inferences to be made.").

174.

Id. at 250.

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inherent destructibility of some products."l 7 5 To understand the distinguishing factors of § 3, it is necessary to dive into its requirements.

1.

The "Incident"

Section 3 looks to "the incident that harmed the plaintiff' to define the elements of a § 3 defect. 76 There is an important distinction in the way § 3 defines a products liability incident. Section 3 only requires that the incident be the kind that "ordinarily occurs as a result of [a] product defect." 77 In contrast, a stricter interpretation of this element requires that the incident be of the kind that "would not have occurred in the absence of a [product] defect."' 78 To illustrate, imagine a toaster is suddenly engulfed in flames leading to a house fire. Because this is certainly the kind of incident that would result if the toaster were defective, it would meet § 3's requirements of an incident that ordinarily occurs as a result of a product defect. However, one can imagine many reasons why a toaster might be the catalyst of a house fire in the absence of a defect, such as an electrical problem with the home or a piece of burned toast. From this perspective, burning toasters are the kind of thing that would have occurred in the absence of a product defect, and the stricter standard would not be met. It has been suggested that § 3's loose interpretation of the incident is "not very helpful."' 79 Regardless, § 3's definition of an incident allows it to be applied like any other inference-that is, an inference is only as strong as the facts that support it-and the stronger the facts, the more helpful § 3 will be.'s 0

175.

Id. at 240.

176.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB.

§3

(1998).

177.

Id. (emphasis added).

178.

See Williams v. Smart Chevrolet Co., 730 S.W.2d 479, 482 (Ark. 1987) (emphasis added) ("The plaintiff is not required to prove a specific defect when common experience tells us that the accident would not have occurred in the absence of a defect."); see also Stewart v. Budget Rent-A-Car Corp., 470 P.2d 240, 244 n.5 (Haw. 1970); Mohammad v. Toyota Motor Sales, U.S.A., Inc., 947 A.2d 598, 612 (Md. Ct. Spec. App. 2008); Beatty v. Ford Motor Co., 574 S.E.2d 803, 807 (W. Va. 2002) (per curiam); Anderson v. Chrysler Corp., 403 S.E.2d 189, 193 (W. Va. 1991) (finding that a fire that was started under the dashboard of a new car whose components were serviced for electrical problems the day before the fire began would not occur in the absence

of some defect).

179. "'It may be inferred' really means 'it is sometimes proper to infer,' but while this reading makes the rule stated in section 3 accurate, it also makes the rule not very helpful." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 603 (Tex. 2004).

180.

AM. L. INST., supra note 173, at 242.

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Negating Other Reasonable Causes

Section 3 demands that the incident "was not, in the particular case, solely the result of causes other than product defect existing at the time of sale or distribution.""' This requirement supports the inference of causation and is often found in case law discussing indeterminate defects. 18 2 The comments to § 3 suggest that while courts traditionally demand products liability plaintiffs present evidence to eliminate alternate causation theories, some courts interpret this requirement more strictly than others."'

"Typically, in cases where courts hold that a plaintiff failed to negate other causes . . . the plaintiffs either fail to submit any such negating evidence or their submissions are woefully inadequate." 8 4 An example of a loose interpretation of this requirement is found in Moores v. Sunbeam Products, Inc.185 Multiple experts agreed that the fire that destroyed Mrs. Moores's home started on the seat cushion of her divan.' 86 Mrs. Moores, a heavy smoker, admitted she occasionally smoked cigarettes while sitting on her divan.' 8 7 She testified that on the evening of the fire, she only smoked cigarettes in the kitchen but left a Sunbeam heating pad sitting on her divan.' 88 Mrs. Moores's self-serving testimony negating the secondary cause of a cigarette as the fire's source allowed her claim to evade summary judgment. 18 9 Moores nicely illustrates the first element of § 3 and is one of the few cases to date to apply § 3.190 The Absence ofDirect Evidence

3.

One of the most frequent debates surrounding indeterminate defects is whether the assistance provided to product-less plaintiffs should be constrained to those plaintiffs who have, at no fault of their own, been denied direct evidence of a defect. 19 ' Some have argued that a proper

181.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB.

§3

(1998).

182.

See, e.g., Cassisi v. Maytag Co., 396 So. 2d 1140, 1150 (Fla. Dist. Ct. App. 1981).

183.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3, reporters' note to cmt. d (1998).

184.

Hirschbeck v. Wright Med. Tech., Inc., No. CV055000410S, 2011 WL 1086942, at *8 (Conn. Super. Ct. Feb. 18, 2011).

185.

Moores v. Sunbeam Prods., Inc., 425 F. Supp. 2d 151 (D. Me. 2006).

186.

Id. at 154.

187.

See id. at 153.

188.

Id. at 153-54.

189.

Id. at 157.

190.

This is unsurprising, as only two states have officially adopted § 3. See infra Part III.C.4.

191.

For a full discussion of this debate, see Chad E. Wallace & Andrew T. Wampler, Comment, Skimming the Trout from the Milk: Using CircumstantialEvidence to Prove Product Defects Under the Restatement (Third) of Torts: Products Liability Section 3, Tennessee and Beyond, 68 TENN. L. REv. 647, 681-85 (2001).

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reading of § 3 requires that the product be lost or destroyed in the accident.1 92 Plaintiff would ordinarily not elect an indeterminate defect theory if a better alternative [were] available. Proof of a specific defect, no manner how tenuous, is almost invariably stronger than a claim of indeterminate defect. Whether the cases explicitly have recognized it or not, the type of liability encompassed in [§] 3 is logically based upon claims of defects of indeterminate origin: It follows that whenever the claim is not indeterminate, the section should not apply.'

In line with this logic, some courts have required a plaintiff relying on an indeterminate defect claim to show the product (and therefore its defect) was self-consumed, causing the plaintiffs lack of direct evidence, or that the product is otherwise unavailable through no fault of the plaintiff.1 94 This appears to grow from the understanding that the doctrine of res ipsa loquitur requires an absence of direct evidence; therefore, courts have held that it should apply in products liability cases involving circumstantial evidence as well. 195

Section 3's comment b dances around addressing this requirement, stating, "[W]hen the product unit involved in the harm-causing incident is lost or destroyed in the accident, direct evidence of specific defect may not be available. Under that circumstance, this [s]ection may offer the plaintiff the only fair opportunity to recover."' 9 6 This is the only position the section takes on this issue. Res ipsa loquitur is applicable even if there is evidence of specific acts of negligence because those specific acts are not necessarily inconsistent with the inference created by the application of res ipsa loquitur.19 7 By comparing the section to res ipsa loquitur, the section does not appear to require the absence of direct evidence.

Spoliation, however, is a different issue. Spoliation is the "intentional destruction, mutilation, alteration, or concealment of evidence."" Because courts assume that "a party who deliberately destroys evidence does so 192.

See, e.g., Allstate Ins. Co. v. Ford Motor Co., No. CV-08-2276-PHX-NVW, 2010 WL 1654145, at *16 (D. Ariz. Apr. 21, 2010).

193.

Hoffman, supra note 103, at 383-84.

194.

See, e.g., McCorvey v. Baxter Healthcare Corp., 298 F.3d 1253, 1258-59 (1lth Cir. 2002) (granting the plaintiff an inference of product defect, despite the fact that the product was not destroyed but rather was discarded by a third party); Allstate Ins. Co., 2010 WL 1654145, at *16; Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 25 A.3d 571, 580 (Conn. 2011); Lawson v.

Mitsubishi Motor Sales of Am., Inc., 938 So. 2d 35, 51 (La. 2006).

195.

See, e.g., Lawson, 938 So. 2d at 49.

196.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB.

§

3 cmt. b (1998).

197.

J. Gregory Marks, Determining the IndeterminateDefect, 36 ST. MARY'S L.J. 237, 262 n.159 (2005) (citing Mobil Chem. Co., v. Bell, 517 S.W.2d 245, 254 (Tex. 1974)).

198.

BLACK'S LAW DICTIONARY, supra note 21, at 1620.

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because it is unfavorable to the party's case," they allow the nonspoliating party to use this inference to balance the scales.1 99 Section 3's comment b suggests that if a party handles spoliating evidence, then § 3's inference should not be available to the spoliating plaintiff.200 Although it is not a § 3 case, a good example interweaving the spoliation and indeterminate defect inferences is Torres v. Matsushita Electric Corp.20 1 In that case, the plaintiffs six-year-old vacuum cleaner caught fire, injuring the plaintiff.202 After the fire, the plaintiff took photos of the vacuum and gave it to a "safety specialist" who, after examining the vacuum, delivered it to the plaintiff's lawyer who stored it in his garage until it was thrown out with the trash.203 The plaintiff tried to rely on Florida's version of the malfunction doctrine to uphold her claim. 2 04 The court did not let the plaintiff use the inference because it was her actions that denied the defendant the opportunity to find evidence to rebut the inference. 205 In summary, the plaintiffs spoliation barred her from benefiting from the indeterminate defect inference.20 6 4.

Adoption

Maine and New Jersey have expressly adopted § 3.207 Vermont, Kentucky, Iowa, and Minnesota have discussed § 3 and may not be far behind.208

199.

See Brookshire Bros. v. Aldridge, 438 S.W.3d 9, 19 (Tex. 2014).

200.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB.

§3

cmt. b (1998).

201.

Torres v. Matsushita Elec. Corp., 762 So. 2d 1014 (Fla. Dist. Ct. App. 2000) (en banc) (per curiam).

202.

Id. at 1014-15.

203.

Id. at 1014.

204.

Id. at 1016. Florida's version of this doctrine is referred to as the Greco inference or the Cassisi inference. Greco v. Bucciconi Eng'g Co., 283 F. Supp. 978 (W.D. Pa. 1967), affd, 407 F.2d 87 (3d Cir. 1969); Cassisi v. Maytag Co., 396 So. 2d 1140 (Fla. Dist. Ct. App. 1981).

Torres, 762 So. 2d at 1017.

205.

But see DiCosolo v. Janssen Pharm., Inc., 951 N.E.2d 1238, 1244 (Ill. App. Ct. 2011) 206. (holding that a plaintiff who threw away an allegedly defective product was not precluded from a

finding of strict liability). See Owen, supra note 2, at 874 n.127, for more discussion of the malfunction doctrine and spoliation.

207.

Estate of Pinkham v. Cargill, Inc., 55 A.3d 1, 8 (Me. 2012); Myrlak v. Port Auth., 723 A.2d 45, 48 (N.J. 1999).

208.

Siegel v. Dynamic Cooking Sys., Inc., 501 F. App'x 397, 402 (6th Cir. 2012) (using § 3 to support its decision under Kentucky law); Allstate Ins. Co. v. Hamilton Beach/Proctor Silex, Inc., 473 F.3d 450, 456-57 n.3 (2d Cir. 2007) (predicting Vermont would adopt § 3); Martin v.

Apex Tool Grp., LLC, 961 F. Supp. 2d 954, 963 (N.D. Iowa 2013) (predicting Iowa would adopt § 3); Schafer v. JLC Food Sys., Inc., 695 N.W.2d 570, 576 (Minn. 2005) ("Permitting the use of circumstantial evidence in such cases is consistent with our jurisprudence . . . [and] the approach taken by the Restatement.").

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Because of the complexity and variations in each state's jurisprudence, some products-liability laws are incompatible with the Restatement (Third). 2 09 For this reason, Texas suggested that it would reject § 3 if given the right facts.210 Ford Motor Co. v. Ridgway was a suit brought by Mr. Ridgway, who, while driving home from work, glanced in his rearview mirror and saw flames surrounding his Ford truck.2 1' Mr. Ridgway survived the fire and sued Ford, asserting strict products liability for a manufacturing defect.212 Despite his inspection of the truck, Mr. Ridgway's expert could not determine the actual cause of the fire.213 The Texas Supreme Court rendered a take-nothing judgment against Mr. Ridgway, pointing to Mr. Ridgway's lack of direct evidence and referring to his circumstantial evidence as "not exceed[ing] a scintilla." 2 14 In his concurrence, Justice Hecht noted § 3's resemblance to res ipsa loquitur. 2 15 He then pointed to Texas's understanding of res ipsa loquitur, which interprets the control element as requiring that the injury not have occurred but for negligence. 2 16 Justice Hecht further stated that while § 3(a) "requires only that an injurycausing incident be the kind of thing that ordinarily results from a product defect," it did not accurately reflect Texas's understanding of res ipsa loquitur's control element.217 The ALI had hoped that § 3 would "put products liability in the same classic mode as res ipsa so that the trial judge [would] treat[] the inference with the respect that the inference deserves depending on its factual strength." 2 18 Time will tell whether American jurisprudence will follow.

209.

See, e.g., Godoy ex rel. Gramling v. E.l. du Pont de Nemours & Co., 768 N.W.2d 674, 692 (Wis. 2009) (Prosser, J., concurring).

The lead opinion chastises the court of appeals for citing Restatement (Third) and it tries to put as much distance between Restatement (Third) and Wisconsin products liability law as possible. The purpose behind this criticism of Restatement (Third) is evident in Justice Bradley's concurring opinion. Justice Bradley does not want to consider Restatement (Third); she wishes to bury it.

Id. (citations omitted).

210.

Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601-02 (Tex. 2004).

211.

Id. at 599-600.

212.

Id. at 600. Texas products liability law defines a manufacturing defect as a deviation from the manufacturer's intended design in a way that is unreasonably dangerous. Id. (citing Torrington Co. v. Stutzman, 46 S.W.3d 829, 844 (Tex. 2000); Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 434 (Tex. 1997) ("[A] manufacturing defect claim [exists] when a finished product deviates, in terms of its construction or quality, from the specifications or planned output in a manner that renders it unreasonably dangerous.")).

Ridgway, 135 S.W.3d at 600.

213.

214.

Id. at 601-02.

Id. at 603 (Hecht, J., concurring).

215.

216.

Id. at 604.

217.

Id. at 603-04; see supra IlI.CI. 218.

AM. L. INST., supra note 173, at 242.

D.

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378

The Malfunction Theory (aka the Malfunction Doctrine)

Malfunction Theory/Doctrine

Restatement (Third) §3

Restatement (Second) 4 328D(1)

It may be inferred that the harm sustained by the plaintiff was (2) The product was caused by a product being properly used defect existing at the during the malfunction. or of sale time without distribution, (3) The product was not proof of a specific altered or misused in a defect, the when way that likely caused incident that harmed the malfunction. the plaintiff:

It may be inferred that harm suffered by the plaintiff is caused by negligence of the defendant when

(a) was of a kind that ordinarily occurs as a result of product

(b) other responsible causes, including the of the conduct plaintiff and third persons, are sufficiently eliminated by the evidence; and

A

(1)

malfunction

occurred in the product.

defect; and

(b) was not, in the particular case, solely the result of causes than product other defect existing at the sale or of time distribution.2 19

(a) the event is of a kind which ordinarily does not occur in the of absence negligence;

indicated (c) the negligence is within the scope of the defendant's duty to the plaintiff. 220

A final category for the treatment of indeterminate defects is the malfunction doctrine. The general understanding of modem courts' malfunction doctrine consists of three elements.22 1 Using circumstantial evidence, the plaintiff must first prove that the product malfunctioned.222 Second, the plaintiff must establish that the malfunction occurred during

219.

220.

221.

222.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3 (1998).

RESTATEMENT (SECOND) OF TORTS § 328D(1) (1965).

Owen, supra note 2, at 873.

Id.

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379

proper use of the product.223 Third, it must be shown that the product was not altered or misused in a way that likely caused the malfunction.224 Pennsylvania is the birthplace of the malfunction doctrine, 225 although many states have followed Pennsylvania's lead.

1.

The Product'sMalfunction

The states that have adopted the malfunction doctrine agree that the mere fact of an accident does not, in and of itself, establish the existence of a defect. 22 6 Instead, the malfunction doctrine gives extra weight to the product's malfunction as circumstantial evidence of the product's defect.

While a product's malfunction is a starting point for analyzing a manufacturer's liability, no U.S. courtroom will provide relief to a plaintiff solely based on the injury and the malfunction without additional circumstantial evidence to support the claim. 22 7 However, some courts require little more to admit a plaintiff. In Washington, an accident alone, while generally not enough to prove a defect, may be sufficient proof if "common experience dictates that a particular accident would not occur absent a defect in the product." 2 28 However, in most cases the mere fact of the malfunction is likely insufficient without something more than the plaintiff's testimony.229 As the name suggests, looking to the product's malfunction is the defining characteristic of this doctrine. When a product malfunctions, it by definition performs in a way that does not meet consumer expectations.230 Id. 223.

Id. "The malfunction doctrine may be described less formally as providing that a 224. plaintiff need not establish that a specific defect caused an accident if circumstantial evidence permits an inference that the product, in one way or another, probably was defective." Id. at 87374.

Phillip Earl Wilson, Jr., Comment, Doctrinal Malfunction-Spoliation and Products 225.

Liability Law in Pennsylvania, 69 TEMP. L. REV. 899, 903 (1996).

226.

E.g., Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 25 A.3d 571, 582 (Conn. 2011) ("To allow such a speculative inference solely from the fact of an accident, when manufacturers and sellers no longer have exclusive control of the product, would essentially convert them into insurers of their products . . . .").

227. "[I]f evidence of a malfunction were to be given such probative force that it raised the presumption of a defect . . . [manufacturers] would be made insurers." Metro. Prop., 25 A.3d at 582 (quoting O'Connor v. Gen. Motors Corp., 21 Conn. L. Rptr. 151, 152-53 (Conn. Super. Ct. 1997)) (internal quotation marks omitted).

Holland v. Evenflo Corp., 46 F.3d 1141, 1995 WL 49304, at *2 (9th Cir. 1995) 228. (unpublished table decision).

229.

E.g., McFarlane v. Caterpillar, Inc., 974 F.2d 176, 180 (D.C. Cir. 1992). But see Garrett v. Nobles, 630 P.2d 656, 659 (Idaho 1981) ("Testimony of the user or operator of the product as to the circumstances of the event complained of is sufficient to establish the alleged malfunction.").

BLACK'S LAW "[M]alfunction[:] A fault in the way something works . . . ..

230.

DICTIONARY, supra note 21, at I 100.

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Consumer expectations are also reflected in the Restatement (Second)'s § 402A.231 As most states have adopted § 402A in some fashion, the malfunction doctrine's resemblance to § 402A may be the reason some form of the malfunction doctrine is the most prominent practice in state courts.23 2

Interestingly, the first drafts of § 3 referred to the product's malfunction.233 Subsequently, the ALI decided to go in a different direction by requiring that the incident of the product's failure be the kind that normally does not happen absent a defect. 2 34 The fact that the malfunction doctrine reflects the structure of § 402A and the Restatement (Third) of Torts: Products Liability but specifically invalidates § 402A likely explains the ALI's decision to modify this language.

2.

EliminatingMisuse and Other Reasonable Secondary Causes

A plaintiff who wishes to obtain the benefits of the malfunction doctrine must eliminate other reasonable causes of the malfunction, including misuse and alteration.2 35 Courts almost always require a plaintiff to show that the product malfunctioned during normal use or operation. 23 6 This element can be established or denied with evidence as simple as the testimony of the plaintiff. 237 For example, in Cannioto v. Louisville Ladder, Inc., the plaintiff set up his ladder at too steep of an angle and did not secure the ladder.2 38 This failure to "subject the ladder to a normal

231.

Section 402A provides for the strict liability of sellers of defective products.

RESTATEMENT (SECOND) OF TORTS § 402A (1965). It holds manufacturers liable for products in a condition not contemplated by the seller. RESTATEMENT (SECOND) OF TORTS § 402A cmt. g.

232. "While reminiscent of the logic of a res ipsa loquitur case, the malfunction theory requirements correlate with the three elements of a standard 402A claim." Barnish v. KWI Bldg.

Co., 980 A.2d 535, 541 (Pa. 2009); see also, e.g., Hurtado v. Land O'Lakes, Inc., 278 P.3d 415, 420-21 (Idaho 2012).

233. Tentative Draft No. I and Council Drafts Nos. 1A and 2 called these claims of "malfunction." RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3 (Tentative Draft No. 1, 1994); RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 3 (Council Draft No. IA, 1994); RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. § 6 (Council Draft No. 2, 1994).

234.

RESTATEMENT (THIRD) OF TORTS: PRODS. LIAB. §3 (1998).

235. See, e.g., Virgil v. "Kash N' Karry" Serv. Corp., 484 A.2d 652, 656 (Md. Ct. Spec.

App. 1984); Red Hill Hosiery Mill, Inc. v. Magnetek, Inc., 530 S.E.2d 321, 326 (N.C. Ct. App. 2000).

236. E.g., United Fire & Cas. Co. v. Whirlpool Corp., 704 F.3d 1338, 1343 (11 th Cir. 2013) (per curiam); Ojeda v. Louisville Ladder Inc., 410 F. App'x 213, 215 (11th Cir. 2010) (per curiam).

237. See Wiggins v. Synthes (U.S.A.), 29 A.3d 9, 17 (Pa. Super. Ct. 2011) ("In a malfunction theory case, there is no requirement that evidence regarding the absence of abnormal use be presented by expert testimony.").

238. Cannioto v. Louisville Ladder, Inc., 449 F. App'x 797, 798 (11th Cir. 2011) (per curiam).

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WHEN PRODUCTS SELF-DESTRUCT

38 1

operation" was a contributing factor to the court's decision to affirm 239 summary judgment in favor of the defendant manufacturer.

Conversely, a plaintiffs claim that she put the product to proper use can be rebutted with expert testimony, as in Brill v. Systems Resources, Inc.240 In Brill, the plaintiff was injured when the back of the plaintiffs chair broke as the plaintiff leaned back. 24 ' The defendant's expert witness, who did not observe the plaintiffs accident, testified that the chair could not have broken without abnormal use.242 The court decided that the conflicting statements of the plaintiff and the expert witness created a sufficient factual question for the jury to decide.24 3 Similarly, the malfunction doctrine requires an absence of evidence that the plaintiff altered the allegedly defective product.2 44 This prerequisite stems from the common-law requirement that "the plaintiff must establish that the product in question was intended to and did reach the ultimate consumer without substantial change in condition." 24 5 However, some courts have held that evidence that a plaintiff altered the allegedly defective product does not relieve the manufacturer of liability unless it relates to the essential features and safety of the product, thereby constituting a significant, unforeseen change that is an intervening cause of the injury.246 Alternatively, a minority of courts allow the substantial change of a product to operate as an affirmative defense, placing the burden of proof on the defense. 2 47 In this same vein, parts that are generally inaccessible and do not often require repairs, such as car parts in enclosed systems, create an easier inference that the product is unaltered.248 The malfunction doctrine analysis generally requires the plaintiff to negate only other reasonable causes of its failure. 24 9A plaintiffs negation of other reasonable causes of the malfunction typically does not include excluding all possible causes, only those that reasonably could have

239. Id. at 798-99.

240. Brill v. Sys. Res., Inc., 592 A.2d 1377, 1379 (Pa. Super. Ct. 1991).

241. Id. 242. Id. 243. Id. 244. See Canning v. Broan-Nutone, LLC, 480 F. Supp. 2d 392, 407 (D. Me. 2007).

245. Potter v. Chi. Pneumatic Tool Co., 694 A.2d 1319, 1338, 1340 (Conn. 1997) (citing Rossignol v. Danbury Sch. of Aeronautics, Inc., 154 Conn. 549, 562 (1967)).

246. E.g., Canning,480 F. Supp. 2d at 407-09.

247. Id. at 1341 n.28; Placencio v. Allied Indus. Int'l, Inc., 724 S.W.2d 20, 22 (Tex. 1987) (citing Gen. Motors Corp. v. Hopkins, 548 S.W.2d 344, 351 (Tex. 1977)).

248. Chambers v. Gen. Motors Corp., 333 N.W.2d 9, 10 (Mich. Ct. App. 1982) (per curiam).

Moores v. Sunbeam Prods., Inc., 425 F. Supp. 2d 151, 158 (D. Me. 2006); see also 249.

Martin v. E-Z Mart Stores, Inc., 464 F.3d 827, 830 (8th Cir. 2006); McFarlane v. Caterpillar, Inc., 974 F.2d 176, 180 (D.C. Cir. 1992); Yaccarino v. Motor Coach Indus., Inc., No. CV-034527(CPS), 2006 WL 3257220, at *3 (E.D.N.Y. Nov. 9, 2006).

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[Vol. 56:349

occurred. 25 0 This element simply supports the inference of causation and redefines it as an element of the doctrine. However, a defendant's pretrial presentation of a reasonable secondary cause does not necessarily entitle the defendant to summary judgment. 2 5 1 In Rogers v. Johnson & Johnson Products, Inc., the plaintiff brought suit against the manufacturer of a medical device, and the manufacturer responded by presenting the possibility of medical malpractice as the cause of the plaintiff's injury.252 While the medical malpractice theory was a reasonable secondary cause, because the conflicting evidence created a factual issue that was more appropriate for the jury, the order granting the defendant summary judgment was reversed.2 53 The Pennsylvania Supreme Court reasoned that requiring the plaintiff to fully negate a secondary cause of his injury would "essentially mandate[] the grant of a directed verdict" to the defendant anytime it could create the possibility of a reasonable secondary cause-a precedent the Pennsylvania Supreme Court was unwilling to set. 25 4 3.

The Inferences Earned

When applied successfully, the malfunction doctrine allows the fact finder to infer that (1) a defect was the most likely explanation of the malfunction, and (2) the defect was present at the time it left the manufacturer.2 55 These inferences meet § 402A's requirements and, if adopted by the fact finder, successfully establish a traditional strict products liability claim.256 By way of its earned inference, the malfunction doctrine gifts a product-less plaintiff with the key to recovery.

250.

Rogers v. Johnson & Johnson Prods., Inc., 565 A.2d 751, 754 (Pa. 1989).

Elves may have played ninepins with the jar of peanuts while Welge and Godfrey were sleeping; but elves could remove a jar of peanuts from a locked cupboard. The plaintiff in a products liability suit is not required to exclude every possibility, however fantastic or remote, that the defect [that] led to the accident was caused by someone other than one of the defendants.

Welge v. Planters Lifesavers Co., 17 F.3d 209, 211 (7th Cir. 1994).

251.

But see Chambers, 333 N.W.2d at 10 (finding two equally plausible causes of the plaintiffs injury appropriate for a directed verdict because any jury decision would be based on mere conjecture).

252.

Rogers, 565 A.2d at 752-53.

253.

Id. at 755.

254.

Id. at 754.

255.

See Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 25 A.3d 571, 582 (Conn. 2011) (citing Myrak v. Port Auth., 723 A.2d 45, 55 (N.J. 1999)).

256.

Garrett v. Nobles, 630 P.2d 656, 659 (Idaho 1981) ("[A] prima facie case of product liability may be proved by direct or circumstantial evidence of a malfunction of the product and the absence of evidence of abnormal use and reasonable secondary causes which would eliminate the defendant's liability." (citing Farmer v. Int'l Harvester Co., 553 P.2d 1306, 1311 (Idaho 1976))).

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IV. CONCLUSION

Our jurisprudential system recognizes that product-less plaintiffs begin in a compromised situation. Without the availability of direct evidence, these plaintiffs face an uphill battle in trying to recover against the manufacturers of the defective products that caused their injuries. Courts have responded to this special segment of plaintiffs in a variety of ways.

While there are similarities in the various doctrines created to address indeterminate defects, each doctrine has unique requirements and, depending on the jurisdiction, unique effects. A solid understanding of the various ways indeterminate defects are treated across the country is a necessary skill for products-liability litigators.

Ashley Menage* APPENDIX: CASES BY JURISDICTION

Jurisdiction Alabama Alaska Arizona

Arkansas California Colorado

Connecticut

Term ofArt Recent IndeterminateDefect Case Rudd v. Gen. Motors Corp., 127 F. Supp. 2d 1330, 1346 (M.D. Ala. 2001).

Alaska Rent-A-Car, Inc. v. Ford Motor Co., 526 P.2d 1136 (Alaska 1974).

Allstate Ins. Co. v. Ford Motor Co., No. CV-08-2276-PHX-NVW, 2010 WL 1654145 (D. Ariz. Apr. 21, 2010).

Pilcher v. Suttle Equip. Co., 223 S.W.3d 789 (Ark. 2006).

Notmeyer v. Stryker Corp., 502 F. Supp. 2d 1051 (N.D. Cal. 2007).

U.S. Aviation Underwriters, Inc. v.

Pilatus Bus. Aircraft, Ltd., 358 F. Supp.

2d 1021 (D, Col0. 2005).

Metro. Prop. & Cas. Ins. Co. v. Deere Malfunction & Co., 25 A.3d 571 (Conn. 2011).

Doctrine/Theory

* Associate Attorney at Donato, Minx, Brown & Pool, P.C.; LD., May 2014, South Texas College of Law. The ideas above were largely inspired by Judge Posner's consideration of elves bowling on peanut jars. Thank you to Professor Vanessa Browne-Barbour for introducing me to those elfish musings, to Professor Pappy Papadakis for providing the encouragement to write about them, and to Professor Amanda Peters for bringing excitement to the process of legal research and writing. This Comment is dedicated to my mother, Sharon Gustavsson, who encouraged and provided for my childhood book-gulping habit, and my husband, Nick Menage, whose patience, love, and unwavering support played an integral role in making my dream of a legal career come true.

384

Delaware

Florida

Joseph v. Jamesway Corp., No. Civ.A. 93C-12-182-JO, 1997 WL 524126 (Del. Super. Ct. July 9, 1997) (breach of warranty).

In re Standard Jury Instructions in Civil Cases-Report No. 09-10 (Prods.

Liab.), 91 So. 3d 785 (Fla. 2012) (per curiam).

In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Practices, Products Liab. Litig., 978 F. Supp. 2d 1053 (C.D. Cal. 2013).

Jenkins v. Whittaker Corp., 785 F.2d 720 (9th Cir. 1986).

Hurtado v. Land O'Lakes, Inc., 278 P.3d 415 (Idaho 2012).

Allstate Ins. Co. v. Menard, Inc., No. 10 CV 365, 2012 WL 3245959 (N.D. Ill. Aug. 7, 2012).

McClellon v. Thermo King Corp., No. 1:11-cv-01337-SEB-MJD, 2013 WL 6571946 (S.D. Ind. Dec. 13, 2013).

Martin v. Apex Tool Grp., LLC, 961 F. Supp. 2d 954, 963 (N.D. Iowa 2013).

Kechi Twp. v. Freightliner, LLC, CIVIL ACTION No. 10-1051, 2011 WL 3439749 (D. Kan. Aug. 5, 2011).

Siegel v. Dynamic Cooking Sys., Inc., 501 F. App'x 397 (6th Cir. 2012).

Lawson v. Mitsubishi Motor Sales of Am., Inc., 938 So. 2d 35 (La. 2006).

Estate of Pinkham v. Cargill, Inc., 55 A.3d 1 (Me. 2012).

Mohammad v. Toyota Motor Sales, U.S.A., Inc., 947 A.2d 598 (Md. Ct. Spec. App. 2008). &

Georgia

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SOUTH TEXAS LAW REVIEW

Hawaii Idaho Illinois

Indiana

Iowa Kansas

Kentucky Louisiana Maine Maryland

Massachusetts

Mass. Prop. Ins. Underwriting Ass'n v.

LG Elecs. U.S.A., Inc., 902 F. Supp. 2d 173 (D. Mass. 2012).

Malfunction Doctrine/Theory

Cassisi Inference

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Michigan

Minnesota Mississippi

Missouri Montana

Nebraska Nevada

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WHEN PRODUCTS SELF-DESTRUCT

Hastings Mut. Ins. ex rel. Lalonde v.

Gen. Motors Corp., No. 252427, 2005 WL 711767 (Mich. Ct. App. Mar. 29, 2005) (per curiam).

Schafer v. JLC Food Sys., Inc., 695 N.W.2d 570 (Minn. 2005).

McKee v. Bowers Window & Door Co., 64 So. 3d 926 (Miss. 2011) (en banc).

Russell v. Whirlpool Corp., 702 F.3d 450 (8th Cir. 2012).

Buxbaum v. Bd. of Trs., Ind. Univ., Cause No. BDV 2000-30, 2001 Mont.

Dist. LEXIS 1821 (Mont. Dist. Ct. July 27, 2001).

Genetti v. Caterpillar, Inc., 621 N.W.2d 529 (Neb. 2001).

Michelin N. Am., Inc. v. Deal, Nos. 54472, 55863, 2012 WL 1929336 (Nev. May 23, 2012).

Ricci v. Alt. Energy, Inc., 211 F.3d 157

Hampshire

(1st Cir. 2000).

New Jersey

Myrlak v. Port Auth., 723 A.2d 45 (N.J. 1999), Bustos v. Hyundai Motor Co., 243 P.3d 440 (N.M. Ct. App. 2010).

Nationwide Mut. Fire Ins. Co. v.

Sunbeam Prods., Inc., Nos. 12 Civ. 6594 (AT), 13 Civ. 5966 (AT), 2014 WL 3875844 (S.D.N.Y. July 17, 2014).

Dewitt v. Eveready Battery Co., 565 S.E.2d 140 (N.C. 2002).

Endresen v. Scheels Hardware & Sports Shop, 560 N.W.2d 225 (N.D. 1997).

Turker v. Ford Motor Co., No. 87890, 2007 WL 701046 (Ohio Ct. App. Mar. 8, 2007).

New Mexico New York

North Carolina North Dakota Ohio

Oklahoma

Dutsch v. Sea Ray Boats, Inc., 845 P.2d 187 (Okla. 1992).

385

386

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SOUTH TEXAS LAW REVIEW

Oregon

Hall v. Gen. Motors Corp., 8 F.3d (9th Cir. 1993) (unpublished table decision).

General/ Indeterminate Defect Theory

Pennsylvania

Wiggins v. Synthes (U.S.A.), 29 A.3d 9 (Pa. Super. Ct. 2011).

Olshansky v. Rehrig Int'l, 872 A.2d

Malfunction Doctrine/Theory

Rhode Island

282 (R.I. 2005) (per curiam), overruled in part by Cruz v. DaimlerChrysler

South Dakota

White v. Cooper Indus., Inc., No. CIV.

Tennessee

06-4272-KES, 2009 WL 234347 (D. S.D. Jan. 29, 2009).

Langford v. Gatlinburg Real Estate Rental, Inc., 499 F. Supp. 2d 1042 (E.D. Tenn. 2007).

Texas

Kia Motors Corp. v. Ruiz, 432 S.W.3d

Utah

865 (Tex. 2014).

Burns v. Cannondale Bicycle Co., 876 P.2d 415 (Utah Ct. App. 1994).

Vermont

Virginia

&

South Carolina

Motors Corp., 66 A.3d 446 (R.I. 2013).

Watson v. Ford Motor Co., 699 S.E.2d 169 (S.C. 2010).

General Defect

v.

Hamilton Ins. Co. Allstate Beach/Proctor Silex, Inc., 473 F.3d 450

(2d Cir. 2007).

Bussey v. E.S.C. Rests., Inc., 620 S.E.2d 764 (Va. 2005).

Washington

Langston v. Nw. Alloys, Inc., No. 23916-1-III, 2007 WL 858748 (Wash.

Ct. App. Mar. 22, 2007).

West Virginia

Bennett v. Asco Servs., Inc., 621 S.E.2d 710 (W. Va. 2005) (per curiam).

Wisconsin

Godoy ex rel. Gramling v. E.I. du Pont de Nemours & Co., 768 N.W.2d 674 (Wis. 2009).

Wyoming

Rohde v. Smiths Med., 165 P.3d 433 (Wyo. 2007).

Washington, D.C.

Pappas v. Ford Motor Co., 7 F. Supp.

2d 22 (D. D.C. 1998).

Malfunction Theory

Unspecified Defect Case

FCPA ENFORCEMENT AND THE NEED FOR JUDICIAL INTERVENTION I. II.

388 ............................................

INTRODUCTION 390 ....................................

BACKGROUND 390 ..........................

A. The Scope of the FCPA ........ 390 1. The Anti-Bribery Provisionsof the Act ........ ..... 393 2. The Accounting Provisions ................ ...... 394 3. FCPA Exceptions and Defenses ...........

394 a. Facilitating Payments ...................... ..... 394 .................... b. Lawful Payments ...... 394 c. No De Minimis Exception ............. ...... 395 B. Enforcement of the FCPA ................. ..... 395 ................

1. The Enforcement Agencies ..... 396 ..................

2. Enforcement Procedures

III.

CONSEQUENCES OF FOR REFORM

397

..... 397 Consequences ofFCPA Enforcement ............

397 .........................................

1. Individuals ...... 398 .....................

2. Impact on Business. ............. 398 ................ a. Increased Costs

B.

Propositionsfor Reform by the U.S. Chamber of 400 ..... ..............................

Commerce ....... 400 1. Adding a Compliance Defense ............ ........ 402 2. Limiting Successor CriminalLiability .........

3. Adding a "Willfulness" Requirementfor Corporate ........ 404 CriminalLiability...................

4. Limiting a ParentCompany's Liabilityfor Acts of a 406 ....................................

Subsidiary.. .......... 408 5. Statutory Definition of "ForeignOfficial" a. UnitedStates v. Aguilar.......................... 409 .......... 411 b. UnitedStates v. Esquenazi............ c. Amending the Definition or Judicial Review? ...... . .. . . 414

Collateral Litigation.................................

399

416

THE NEED FOR JUDICIAL INTERVENTION .....................

A. B.

V.

.............................................

A.

b.

IV.

FCPA ENFORCEMENT AND PROPOSITIONS

...... 417 .....................

Diversion Agreements 418 ................................

ProsecutorialOverreach ............ 418 1. United States v. Aguilar.............. .......... 419 2. The Africa Sting Cases ................ ............... 420 3. United States v. John O'Shea........

CONCLUSION

.......................................

......

421

387

388

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INTRODUCTION

In a global economy, bribes move fast and far. Each year businesses pay a shockingly high amount of bribes to public officials throughout the world. Bribery is more prevalent in countries where rules against corruption are lax, or in countries where such laws exist on paper but are rarely enforced. A 2009 report published by Transparency International states that of polled business executives, two out of five had been asked to pay bribes when dealing with public institutions, and that these bribes have raised the cost of doing business by 10%.' The amount of bribe payments received by government officials in developing countries alone is estimated to be between $20 and $40 billion annually, which is "the equivalent of some 20 to 40 per cent of official development assistance." 2 The negative consequences of corruption on private businesses are troubling.

Unfortunately, the costs of corruption are measurable, above all, in human lives, as corruption leads to exploited workers, illegal lodging conditions, unsafe medicines, and "poorly constructed buildings .. . that collapse with deadly consequences." 3 It is these consequences that the Foreign Corrupt Practices Act (FCPA) aims to prevent.

The FCPA was enacted in 1977 during the Carter Administration in response to the Watergate scandal.4 The FCPA was amended first in 1988 and again in 1998 during the Clinton Administration to implement the Organisation for Economic Co-operation and Development's Anti-Bribery Convention (OECD Convention).' The OECD Convention was signed in Paris in 19976 and was the first multinational attempt to attack the "'supply side' of the bribery transaction." 7 It prohibited the payment of bribes to foreign public officials in international business transactions.! The OECD Convention was a breakthrough internationally but was of particular

1.

TRANSPARENCY INT'L ET AL., GLOBAL CORRUPTION REPORT 2009: CORRUPTION AND THE PRIVATE SECTOR xxv (2009).

2.

Id. 3.

Id. 4.

Cortney C. Thomas, Note, The Foreign Corrupt Practices Act: A Decade of Rapid Expansion Explained, Defended, andJustified, 29 REV. LITIG. 439, 442-43 (2010).

5.

Amy Deen Westbrook, Enthusiastic Enforcement, Informal Legislation: The Unruly Expansion ofthe Foreign CorruptPracticesAct, 45 GA. L. REV. 489, 502 (2011).

6.

Philip Fitzgerald, For Clues About Global Enforcement Today, Look to Anti-Corruption History, FCPA BLOG (Mar. 6, 2013, 1:08 AM), http://www.fcpablog.com/blog/2013/3/6/forclues-about-global-enforcement-today-look-to-anti-corrup.html.

7.

OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, OECD, http://www.oecd.org/corruption/oecdantibriberyconvention.htm (last visited Sept. 26, 2014).

8.

OECD, CONVENTION ON COMBATING BRIBERY OF FOREIGN PUBLIC OFFICIALS IN INTERNATIONAL BUSINESS TRANSACTIONS AND RELATED DOCUMENTS 7 (2011).

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importance to the United States, which, until then, had fought a lonely battle against foreign corruption. 9 For years the FCPA was left relatively dormant, with only "sporadic" enforcement actions.' 0 However, during the last decade's increased scrutiny of corporate affairs, the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), the two government agencies entrusted with enforcement of the FCPA, embarked on extensive FCPA enforcement." The recent enforcement efforts of the DOJ and SEC have resulted in exorbitant penalties and disgorgement of profits' 2 imposed on companies, in addition to a rapid increase in the number of personal prosecutions. In 2013 alone, "twelve companies paid $731.1 million to resolve FCPA" enforcement actions.' 3 In 2012, the total payout was $259.4 million, in 2011, $508.6 million, and in 2010, $1.8 billion.1 4 In 2012, prison sentences ranged from four months for Stuart Carson of Control Components Incorporated to nine years for Jean Rene Duperval of Telecommunications D'Haiti S.A.M. '5 The recent aggressive enforcement of the FCPA, the high fines paid by companies found in violation of the FCPA, and the long prison sentences imposed on individuals convicted under the FCPA have also resulted in unprecedented panic and anger in the business world. The U.S. Chamber of Commerce (Chamber) and many critics of the FCPA have called for clarity and guidance from the DOJ and SEC, and even for reform of the FCPA itself.' 6 In its 2010 brief, Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act, the Chamber presented five proposals for potential reforms to the FCPA, arguing that if implemented, these proposals would provide the necessary certainty to the business community and promote efficiency in the enforcement of the FCPA.17 However, implementing the Chamber's proposals would result in a much narrower scope of the FCPA and, because of the present political climate and global 9.

Fitzgerald, supra note 6.

10.

Tor Krever, Curbing Corruption? The Efficacy of the Foreign Corrupt Practices Act, 33 N.C. J. INT'L L. & CoM. REG. 83, 93 (2007).

11.

Cherie 0. Taylor, The Foreign Corrupt PracticesAct: A Primer, 17 CURRENTS: INT'L TRADE L.J. 3, 3 (2008).

12.

Id. 13.

Richard L. Cassin, 2013 FCPA Enforcement Index, FCPA BLOG (Jan. 2, 2014, 7:28 AM), http://www.fcpablog.com/blog/2014/1/2/2013-fcpa-enforcement-index.html.

14.

Richard L. Cassin, 2012 Enforcement Index, FCPA BLOG (Jan. 2, 2013, 4:32 AM), http://www.fcpablog.com/blog/2013/1/2/2012-enforcement-index.html.

15.

Id. 16.

ANDREW WEISSMANN & ALIXANDRA SMITH, U.S. CHAMBER INST. LEGAL REFORM, RESTORING BALANCE: PROPOSED AMENDMENTS TO THE FOREIGN CORRUPT PRACTICES ACT 1

(2010).

17.

Id. at 7, 11.

390

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"

fight against corruption, it is highly unlikely that the FCPA will be amended to integrate these proposals.

In November 2012, in response to repeated calls for guidance, the SEC and DOJ released a comprehensive joint Resource Guide on the FCPA. While the guide indeed provides companies and compliance lawyers with some clarity as to the government's interpretation of the FCPA, it nonetheless constitutes only the government's position regarding the FCPA. The government has consistently argued and applied a very broad interpretation of the FCPA, and its position is rarely challenged. In fact, most FCPA actions are resolved in deferred prosecution agreements or nonprosecution agreements, and very few FCPA cases have gone to trial.

Thus, the FCPA body of law is itself unsettled, and the certainty normally provided by judicial review is absent.

This Comment will discuss the five proposals for reform propounded by the Chamber, and it will argue that in the face of recent developments, a reform of the FCPA that will have the effect of restricting its scope is highly unlikely and not the best solution. Part II will offer a brief background of the FCPA, including its requirements, defenses, exceptions, scope, enforcement authorities, and enforcement procedures. Part III will discuss some of the consequences of FCPA enforcement on businesses and individuals, and the proposals of the Chamber. Part IV concludes with the proposition that because reforming the FCPA to narrow its scope is highly unlikely, judicial review of the FCPA is the best answer to the business community's calls for clarity and guidance. This Comment argues that judicial supervision is necessary to subject the government's interpretation of the FCPA to scrutiny, clarify the appropriate limits of the FCPA, set boundaries to the DOJ's enforcement powers, and curb abuses in FCPA enforcement actions.

II.

BACKGROUND

A.

The Scope of the FCPA

1.

The Anti-Bribery Provisions of the Act

The FCPA has a very broad jurisdictional scope. In 1998, Congress extended the FCPA's jurisdiction to conduct taking place outside the United States and expanded its liability provisions to include foreign individuals

18.

See Office of Pub. Affairs, The Department ofJustice and the Securities and Exchange Commission Release FCPA Resource Guide, U.S. DEP'T JUST. (Nov. 14, 2012),

http://www.justice.gov/opa/pr/2012/November/12-crm-1 354.html.

2014]

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and corporations that violate the FCPA while in U.S. territory.19 The 1998 amendments also implemented the provisions of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business.2 0 As it stands today, the FCPA applies to "any issuer," "any domestic concern," and "any person" engaged in conduct prohibited by the FCPA. 2 1 An "issuer" is a company "which has a class of securities registered" in the United States or is required to file periodic reports with the SEC, as well as "any officer, director, employee, or agent ... or any stockholder acting on behalf' of the company.22 A "domestic concern" includes individuals who are either United States citizens or residents, and companies with their "principal place of business in the United States, or which [are] organized under the laws of' the United States or one of its states or territories. 23 Any "person," on the other hand, is defined as any non-U.S. citizen, non-U.S. resident, or a company "organized under the law[s]" of any foreign 24 country.

Issuers and domestic concerns are subject to liability for violations of the FCPA for acts that take place in both the U.S. and abroad. 25 However, non-U.S. citizens, non-U.S. residents, and entities not organized under the laws of the United States-or any of its states or territories-are subject to liability under the FCPA only for actions performed while in U.S. territory.2 6 The FCPA criminalizes the use of mail and any means or instrumentality of interstate commerce to offer, promise, or make bribe payments to foreign officials or foreign political parties for the purpose of obtaining or retaining a business advantage. 27 All individuals or entities to which the FCPA applies-issuers, domestic concerns, and any personmay violate the FCPA if the conduct is committed "knowingly." 2 8 The mental state of knowing includes awareness or a firm belief that a violation of the FCPA is substantially certain to occur as a result of the conduct.2 9 Another requirement of the FCPA is that the recipient of the payment, promise, or offer to pay be a "foreign official." 30 The statute defines U.S. DEP'T JUST. & SEC. & EXCH. COMM'N ENFORCEMENT Div., FCPA: A RESOURCE 19.

GUIDE TO THE U.S. FOREIGN CORRUPT PRACTICES ACT 11-12 (2012), available at

http://wwwjustice.gov/criminal/fraud/fcpa/guidance/guide.pdf.

See id. at 21, 25-26.

20.

See 15 U.S.C. §§ 78dd-1 to -2 (2012).

21.

Id. § 78dd-l(a).

22.

Id. § 78dd-2(h).

23.

Id. § 78dd-3(f).

24.

Id. §§ 78dd-l(a), (g), 78dd-2(a), (i).

25.

Id. § 78dd-3(a).

26.

27.

Id. §§ 78dd-l(a), 78dd-2(a), 78dd-3(a).

28.

Id. §§ 78dd-1(a)(3), 78dd-2(a)(3), 78dd-3(a)(3).

Id. §§ 78dd-l(f)(2)(A), 78dd-2(h)(3)(A), 78dd-3(f)(3)(A).

29.

30.

Id. §§ 78dd-l(a), 78dd-2(a), 78dd-3(a).

392

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"foreign official" as "any officer or employee of a foreign government or any department, agency, or instrumentality thereof." 3 ' The meaning of "instrumentality," as a subset of the definition of foreign official, is not defined in the statute. The interpretation of this term has caused substantial controversy and has been the main issue in some of the few litigated FCPA cases. 3 2 For example, the definition of instrumentality was the principal issue in United States v. Aguilar33 and in United States v. Esquenazi,34 the most recent appellate decision regarding the interpretation of the FCPA. Both courts held that instrumentality under the FCPA includes employees of government-run companies. 36 The statute does not require that the illicit payments be made directly

by U.S. companies. 37 In fact, most cases involve payments made indirectly through a third party, such as sales agents, consultants, foreign lawyers, distributors, or other third parties. As an example, Panalpina World Transport Holding involved allegations that Panalpina, a Swiss freightforwarding company with subsidiaries in many countries, paid bribes to foreign customs and tax officials on behalf of its clients, many of whom 39 were U.S. companies. Panalpina itself settled with the SEC and DOJ for a total of $70,560,000.40 Six of Panalpina's clients, on whose behalf the payments had been made, also settled their cases for a total of $236.5 - - 41 nillion.

Furthermore, issuers, domestic concerns, and any persons must act "corruptly" in order to be held liable under the FCPA.42 This term is not defined in the statute either, but courts have held that "an act is 'corruptly' done if done voluntarily [a]nd intentionally, and with a bad purpose of

31.

Id. §§ 78dd-l(f)(1)(A), 78dd-2(h)(2)(A), 78dd-3(f)(2)(A).

32.

See, e.g., United States v. Esquenazi, 752 F.3d 912, 920 (1Ith Cir.), cert. denied, 135 S. Ct. 293 (2014); United States v. Aguilar (Aguilar 1), 783 F. Supp. 2d 1108, 1112-13 (C.D. Cal. 2011).

Aguilar I, 783 F. Supp. 2d at 1120-21.

33.

Esquenazi, 752 F.3d at 920.

34.

35.

This case was decided United States Court of Appeals for the Eleventh Circuit on May 16, 2014. Id. at 912.

36.

Esquenazi, 752 F.3d at 912, 920; Aguilar 1, 783 F. Supp. 2d at 1120-21.

37.

Russell G. Ryan & Laura K. Bennett, Seven Common False Comforts, Misconceptions About FCPA Risk, BNA INSIGHTS (Jan. 6, 2012).

38.

Id. 39.

Information at 5, United States v. Panalpina World Transp. (Holding) Ltd., No. 10-769 (S.D. Tex. Dec. 6, 2013) [hereinafter PanalpinaWorld Information].

40.

Deferred Prosecution Agreement at 12, United States v. Panalpina World Transp.

(Holding) Ltd., No. 10-769 (S.D. Tex. Dec. 6, 2013).

41.

Ryan & Bennett, supra note 37.

42.

See 15 U.S.C. §§ 78dd-l(a), 78dd-2(a), 78dd-3(a) (2012).

FCPA ENFORCEMENT

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accomplishing either an unlawful end or result, or a lawful end or result by ",43 some unlawful method or means.

2.

The Accounting Provisions

In addition to its anti-bribery provisions, the FCPA requires corporations with securities listed in the U.S. to file reports with the SEC and "make and keep books, records and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer." 44 This is known as the "books and records" provision. 4 5 The statute does not define what an "accurate[]" report is, stating only that it must "fairly reflect the transactions and dispositions of the assets of the issuer." 46 In contrast, "reasonable detail" is defined as "such level of detail and degree of assurance as would satisfy prudent officials in the conduct of their own affairs."4 7 Further, these entities are required to "devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that ... transactions are executed" with proper authorization from management, that financial statements are prepared in accordance with proper accounting principles, and that the company "maintain[s] accountability for assets." 48 This is known as the "internal controls" provision. 4 9 A company is criminally liable under these provisions only when the payments are made knowingly. 5 However, since the statute does not require the government to prove that a corrupt payment was actually made or even contemplated, these provisions are used by the SEC and DOJ to prosecute or settle cases where the payments are suspected to have taken place but are difficult to prove.

Thus, the FCPA attacks foreign bribery on two fronts: on the one hand, it criminalizes and punishes corrupt conduct through the anti-bribery provisions; on the other, it provides for the detection and prevention of corrupt conduct through the accounting and internal controls provisions.52

43. original).

44.

45.

46.

47.

48.

49.

50.

51.

52.

E.g., United States v. Liebo, 923 F.2d 1308, 1312 (8th Cir. 1991) (alteration in 15 U.S.C. § 78m(b)(2)(A).

WEISSMANN & SMITH, supra note 16, at 9.

See § 78m(b)(2)(A).

Id. § 78m(b)(7).

Id. § 78m(b)(2)(B)(i)-(ii); see also WEISSMANN & SMITH, supra note 16, at 9.

WEISSMANN & SMITH, supra note 16, at 9.

Id. Id. Id. at 1-2.

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FCPA Exceptions and Defenses Facilitating Payments

The 1988 amendments "added affirmative defenses to [the] FCPA" and "narrowed the knowledge requirement." 5 3 However, the only exception to the FCPA's prohibition on bribery of foreign officials is for "facilitating" payments made to "expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official."5 4 The statute provides a list of examples of what constitutes a "routine governmental action," which is defined as "an action which is ordinarily and commonly performed by a foreign official." 5 5 "The term 'routine governmental action,' however, does not extend to decisions by a foreign official to award new business or continue business with a particular contractor." 5 6 Thus, a payment intended to influence government officials to award new business are not payments made to "facilitate" a routine governmental action. b.

Lawful Payments

The FCPA also provides an affirmative defense where the payments were "lawful under the written laws and regulations of the foreign official's . . . country."5 s However, the defense does not apply to acts committed by a government official, or even the leader of that country, when they do not constitute public action lawful under the laws of that country.59 c.

No De Minimis Exception

The FCPA does not provide for a de minimis exception.6 0 Thus, even bribes of very small amounts made to acquire a business advantage could result in a violation of the FCPA, in addition to civil and criminal penalties for both the company and the individuals that made or approved such payments. 6 1 The amount of the payment may affect the government's willingness to prosecute such violations, as well as "the sanctions ultimately 53.

Westbrook, supra note 5, at 502.

15 U.S.C. § 78dd-l(b) (2012).

54.

55.

Id. § 78dd-1(f)(3)(A).

56.

United States v. Giffen, 326 F. Supp. 2d 497, 501 (S.D.N.Y. 2004); see also 15 U.S.C § 78dd-2(h)(4)(B); United States v. Kay, 359 F.3d 738, 751 (5th Cir, 2004).

57.

See Gifen, 326 F. Supp. 2d at 501; see also Kay, 359 F.3d at 750-51, 754.

58. § 78dd-2(c)(1).

59.

See Giffen, 326 F.Supp.2d at 503; United States v. Noriega, 746 F. Supp. 1506, 152122 (S.D. Fla. 1990).

Ryan & Bennett, supra note 37.

60.

61.

See id.

FCPA ENFORCEMENT

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imposed, but not whether the law was violated." 6 2 For example, in 2010, the SEC filed a complaint with the U.S. District Court for the Southern District of California alleging that Veraz Networks, Inc., a California telecommunications company, had violated "the books and records and internal controls provisions of the [FCPA]."63 According to the complaint, from 2007-2008 Veraz engaged a consultant in China who made improper gifts of about $4,500 to officials of government telecommunications companies in China and Vietnam, and offered to make a payment of $35,000 to the same officials.6M The gifts and payments were made to secure a business contract valued at $233,000.65 However, Veraz abandoned the deal when it discovered the improper payments and that the $35,000 was never paid.66 Veraz settled the case and consented to the entry of a final judgment requiring payment of a $300,000 penalty. 67 While $300,000 is peanuts compared to penalties imposed in other FCPA cases, "the investigation itself cost the company $2.5 million." 68 As this case shows, the government has pursued violations of the FCPA, even where the improper payments consist of relatively insignificant amounts. Thus, companies and their employees should not operate under the assumption that small gifts shield them from civil penalties or other legal or internal investigation expenses.

B.

Enforcement of the FCPA

1.

The Enforcement Agencies

The FCPA, which is enforced by the SEC and DOJ, provides for civil and criminal penalties. The SEC conducts all civil investigations of violations of the FCPA by publicly traded companies. 6 9 However, the SEC can only bring an injunctive action. 70 After compiling sufficient evidence for a criminal action, the SEC refers the case to the DOJ for criminal prosecution. 7 ' The DOJ handles all criminal investigations and criminal prosecutions of domestic concerns outside the jurisdiction of the SEC.72 62.

Id. 63.

Complaint at 1, SEC v. Veraz Networks, Inc., No. CV-10-2849 (N.D. Cal. June 29, 2010) [hereinafter Veraz Networks Complaint].

64.

Id. at 1, 3.

65.

66.

67.

Id. at 3.

Id.; Ryan & Bennett, supra note 37.

Ryan & Bennett, supra note 37.

68.

Id.

69.

S. REP. No. 95-114, at 11-12 (1977).

70.

71.

72.

Id. at 11.

Id. at 12.

Id.

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Fines for FCPA violations committed by companies may reach $2,000,000, whereas individuals can be fined up to $100,000, sentenced to not more than five years in prison, or both. Courts, however, are not limited to these amounts, and under the Alternative Fines Act, can impose much higher fines than the ones provided by the FCPA.74 The court may impose a fine "up to twice the benefit that the defendant" sought to obtain by making the bribes.

2.

Enforcement Procedures

Companies that have been found in violation of the FCPA pay very high fines and penalties. Many companies pay these significant sums willingly, factoring them into the cost of doing business in a foreign country.77 Lindsey Manufacturing is the only company that has so far litigated the charges and gone to trial. All of the other companies appear to have decided to resort to out-of-court enforcement methods.79 The primary vehicles for the government to resolve FCPA enforcement actions are deferred prosecution agreements (DPAs) and nonprosecution agreements (NPAs), "collectively known as 'diversion agreements."' 8 0 "[T]he U.S. government's forceful engagement in DPAs and NPAs has created a system that encourages prosecutorial abuse and deters corporate behavior originally intended by Congress in 1977 to be permissible."8 1 Thus, DPAs and NPAs allow the government to avoid the high cost of litigation, hold companies liable, and extort exorbitant penalties without entering the courtroom.

The DPAs and NPAs are privately negotiated contracts between the U.S. government and the corporations charged with violating the FCPA. 82 In the case of a DPA, the DOJ files the indictment with the court, but the prosecution is deferred unless the terms of the DPA are not fulfilled.8 3 73.

74.

15 U.S.C. §§ 78dd-2(g), 78dd-3(e) (2012).

18 U.S.C. § 3571(d) (2012).

75.

U.S. DEP'T JUST. & SEC. & EXCH. COMM'N ENFORCEMENT Div., supra note 19, at 68.

76.

Joel Androphy, Ashley Gargour & Kathryn E. Nelson, The Intersection of the DoddFrank Act and the Foreign Corrupt Practices Act: What All Practitioners, Whistleblowers, Defendants, and CorporationsNeed to Know, ADVOCATE, Summer 2012, at 19, 22.

77.

Id. 78.

See United States v. Aguilar (Aguilar II), 831 F. Supp. 2d 1180, 1182-83 (C.D. Cal. 2011) (stating that this is the first FCPA criminal case to go to a jury trial).

79.

See id. at 1182; Androphy, Gargour & Nelson, supra note 76 at 22.

80.

Pete J. Georgis, Comment, Settling with Your Hands Tied: Why Judicial Intervention Is Needed to Curb an Expanding Interpretation of the Foreign Corrupt PracticesAct, 42 GOLDEN GATE U. L. REV. 243, 268 (2012); see also Androphy, Gargour & Nelson, supra note 76, at 22.

81.

Georgis, supra note 80, at 268.

82.

Id. at 269.

83.

U.S. DEP'T JUST. & SEC. & EXCH. COMM'N ENFORCEMENT Div., supra note 19, at 74.

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Under the terms of a DPA, the defendant is typically required to pay a monetary penalty, cooperate with the government, admit to wrongdoing, implement a compliance monitonng program, waive attorney-client privilege, disclose employees' private documents and data, terminate legal support for certain employees, or terminate employment of employees who do not cooperate with the government. 84 By contrast, in an NPA, the government does not file charges, but it retains the right to do so if the terms of the NPA are not followed. Instead of being filed with the court, NPAs are maintained by the parties and include similar terms to DPAs. 6 Often, businesses agree to enter into diversion agreements because the alternative-that is, litigating the charges-appears far more dreadful.

III. CONSEQUENCES OF FCPA ENFORCEMENT AND PROPOSITIONS FOR REFORM A.

Consequences of FCPA Enforcement

1.

Individuals

After years of sporadic efforts to enforce the FCPA, the SEC and DOJ ramped up their enforcement efforts. Initially, the FCPA was enforced through fines imposed on companies. Recently, however, the number of individuals prosecuted and sentenced for violations of the FCPA has increased significantly.8 8 The reason for this is that although the FCPA targets the payment of bribes by companies engaged in international business, only individuals can actually pay bribes. 89 Furthermore, "[i]ndividual liability . .. catches the attention of senior executives as no $559 million fine ever could."90 In other words, the deterrent effect of the FCPA is believed to be much higher if individuals go to prison. 9 1 Mark Mendelsohn, who spearheaded the recent growth in FCPA enforcement during his tenure in the DOJ's Fraud Section, made this shift in focus clear in public statements earlier this year: "If you look at who we're prosecuting, we're prosecuting mid-level to 84.

Id.; Androphy, Gargour & Nelson, supra note 76, at 22.

85.

U.S. DEP'T JUST. & SEC. & EXCH. COMM'N ENFORCEMENT Div., supra note 19, at 75.

86.

Id.

87.

Westbrook, supra note 5, at 526.

88.

See id. at 530.

89.

J. Thomas Rosch, U.S. Enforcement of the Foreign Corrupt Practices Act of 1977: Some Observations and Thoughts, FED. TRADE COMM'N 11 (Sept. 13, 2012), http://www.ftc.gov/sites/default/files/documents/public-statements/u.s.enforcement-foreigncorrupt-practices-act-1977-some-observations-and-thoughts/120913fcpaenforcement.pdf.

90.

Westbrook, supra note 5, at 526 (internal quotation marks omitted).

91.

Id.

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senior level corporate officers and employees, CEOs, CFOs, [and] heads of international sales." 9 2 The prospects of facing a trial on FCPA charges are daunting, especially for individuals whose freedom is at stake. In fact, the majority of individuals charged under the FCPA enter plea agreements in exchange for lesser charges and shorter sentences. 93 However, unlike companies, individuals are more likely to challenge the government and proceed to trial and, as some of the recent cases have shown, the government has not always been successful.

2. a.

Impact on Business Increased Costs

Recently, the frequency of FCPA enforcement against businesses and the costs they shoulder as a result have increased exponentially. 94 Companies facing an FCPA probe spend millions in legal fees, forensic accounting, and other investigative costs followed by large fines and penalties. 95 One notable example is Siemens, which "paid $1.6 billion in 2008 to settle FCPA charges after a two-year internal investigation" that involved subsidiaries in thirty countries and "cost the company $850 million."9 6 One reason for this increase is that the government has shifted the heavy financial burden of uncovering FCPA violations to businesses themselves by requiring extensive internal investigations.9 7 Businesses have to bear this cost even when charges are "based solely on allegations of wrongdoing and, if violations are found," there is no "guarantee that the business will receive cooperation credit for conducting an investigation." 98

92.

WEISSMANN & SMITH, supra note 16, at 2.

93.

See Androphy, Gargour & Nelson, supra note 76, at 23 (discussing how many individual defendants charged under the FCPA plead guilty to avoid prison sentences).

94.

GREYSON BRYAN ET AL., O'MELVENY & MYERS LLP, FOREIGN CORRUPT PRACTICES

ACT: AN O'MELVENY HANDBOOK 2, 7 tbls. FCPA cases against companies & Highest settlements (6th ed. 2009).

95.

See Melissa Klein Aguilar, How to Size Up, and Manage, FCPA Investigation Costs, COMPLIANCE WK. (Aug. 17, 2010), http://www.complianceweek.com/news/news-bulletin/howto-size-up-and-manage-fcpa-investigation-costs.

96.

Id. 97.

See WEISSMANN & SMITH, supra note 16, at 5 & n.21; see also Lanny A. Breuer, Assistant Attorney Gen., U.S. Dep't of Justice, Prepared Address at the 22nd National Forum on the Foreign Corrupt Practices Act (Nov. 17, 2009) ("We recognize the issues of costs to companies to implement robust compliance programs, to hire outside counsel to conduct in-depth internal investigations, and to forego certain business opportunities that are tainted with corruption. Those costs are significant and we are very aware of that fact. The cost of not being FCPA compliant, however, can be far higher.").

98. WEISSMANN & SMITH, supra note 16, at 6.

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Many have also argued that the current FCPA enforcement efforts have rendered U.S. businesses less competitive in the global market compared to other foreign companies that do not face the same exposure to civil or criminal liability.9 9 Furthermore, the ambiguous areas of the statute "have had a chilling effect on U.S. business because many companies have ceased foreign operations rather than face the uncertainties of FCPA enforcement."' 00 b.

Collateral Litigation

Another almost certain consequence of an internal or government FCPA investigation is collateral litigation filed by shareholders. Despite its very broad scope, the FCPA does not create a private right of action against companies that have violated the FCPA.' 0' Nonetheless, aggrieved investors and their attorneys have transposed FCPA violations into other substantive law contexts. Some of the most common FCPA follow-on causes of action involve securities fraud, shareholder derivative actions, employee whistleblower litigation, civil Racketeer Influenced and Corrupt Organizations Act (RICO) actions alleging racketeering activity, and class actions under ERISA against the company and directors for breach of fiduciary duties owed to the company and beneficiaries.' 0 2 Plaintiffs have been very successful in these follow-on actions. In a 2010 study, twenty-six out of the thirty-seven FCPA collateral suits reviewed resulted in settlements.'o 3 The amounts paid out to plaintiffs are also very high-in some cases, even higher than the fines imposed by the government.' 0 4 Collateral litigation usually follows an FCPA investigation, but it can also go the other way. For example, in a case against Alcoa, Inc., the government began an FCPA investigation after a lawsuit was filed against Alcoa for alleged violations of RICO for bribing senior government officials of Bahrain. 0 5 As discussed in Part II, the primary vehicles of resolving FCPA enforcement actions are diversion agreements,1 06 in which businesses agree

99.

Id.

100.

Id. &

101.

Michael Volkov, FCPA Violations and Collateral Litigation, CORRUPTION, CRIME COMPLIANCE (Jan. 4, 2012), http://corruptioncrimecompliance.com/2012/01/fcpa-violations-andcollateral-litigation/.

102.

Id. 103.

George H. Brown, Debra Wong Yang & Matthew S. Kahn, Strategies for Mitigating Civil Liability Consequences of FCPA Investigations & Enforcement Actions, 9 SEC. LITIG. REP., Apr. 2012 (reprint at 1).

104.

Id. 105.

Id. 106. See supra Part ll.B.2.

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to pay very high penalties and implement costly compliance programs to avoid the cost and humiliation of litigating corruption charges. In 2011, Lindsey Manufacturing was the first company to proceed to trial rather than settle,'0o although it is doubtful that other companies will follow suit. It is against this backdrop that many critics of the FCPA, specifically the Chamber, have argued for more clarity and guidance in the form of amendments to the FCPA. B.

Propositionsfor Reform by the U.S. Chamberof Commerce

In its 2010 brief, Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act, the Chamber presented five proposals to amend the FCPA. 0 8 It argued that these proposals, if implemented, would promote efficiency in the FCPA's enforcement and provide more certainty to the business community.' 09 Both sides disagree about the extent to which the proposals will increase the efficiency of FCPA enforcement actions; however, it is certain that all the proposed amendments, if passed, would result in an FCPA that is narrower in scope. Because of this narrowing effect, and considering the present climate of global anti-corruption efforts, it is highly unlikely that Congress will adopt the proposed changes to the FCPA. 1.

Adding a Compliance Defense

Unlike the Bribery Act passed by the British Parliament in 2010 (U.K. Bribery Act), the FCPA does not provide for a compliance defense.I 0 Thus, even though a company may have instituted adequate FCPA compliance measures to detect and deter violations of the FCPA, it will still be subject to prosecution and imposition of criminal liability for FCPA violations if some of its employees or agents circumvent its compliance measures.

The Chamber proposed that Congress add an affirmative defense of compliance to the FCPA.11 2 Currently, the existence of a compliance program is taken into account by the SEC and DOJ at the charging stage, at sentencing, and on whether to enter into DPAs or NPAs with the

107.

See United States v. Aguilar (Aguilar 11), 831 F. Supp. 2d 1180 (C.D. Cal. 2011); United States v. Aguilar (Aguilar 1), 783 F. Supp. 2d 1108 (C.D. Cal. 2011).

WEISSMANN & SMITH, supra note 16, at 7, 11.

108.

109.

Id. 110.

Id. 111.

Id

112.

Id. at 11-14.

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company." 3 However, the Chamber argued that this is insufficient because "such benefits are subject to unlimited prosecutorial discretion," and the existence of adequate compliance measures should be taken into account at the liability stage as well.1 4 Such an amendment to the FCPA would bring it in line with the U.K. Bribery Act and Italian anti-corruption laws.'1 5 It would also provide companies with a stronger incentive to increase compliance with the FCPA by deterring, identifying, and self-reporting existing or potential violations."1 6 And it would protect the company from employees who violate the FCPA "despite [the] corporation's diligence."" 7 To a certain extent, it would guard corporations from prosecutors who can use violations "of a single, low-level rogue employee-to force corporations into [DPAs]." 1t8 The current law provides few incentives for a corporation to establish a strong and effective compliance program, and the high costs associated with such programs do not justify the returns. Many scholars and practitioners have also criticized the current regime." 9 The government, while recognizing that no compliance program, regardless of how strong it is, will ever prevent all violations, argued that implementing compliance measures is not sufficient for a corporation to escape liability.1 2 0 It further maintained that "the commission of such crimes in the face of a compliance program may suggest that the corporate management is not adequately enforcing its program."l21 Another argument against adding a compliance defense to the FCPA is that such a defense is logically inconsistent with the "knowingly" and "corruptly" requirements of the FCPA.1 22 As discussed above, for an act to be in violation of the FCPA, it must be committed knowingly, which includes "actual knowledge or a conscious disregard or deliberate ignorance of known circumstances and 113.

Id. at 11; see also Paul J. McNulty, Principles of Federal Prosecution of Business Organizations, U.S. DEP'T JUST. (2007), http://www.justice.gov/sites/default/files/dag/legacy/2007/07/05/mcnulty-memo.pdf.

WEISSMANN & SMITH, supra note 16, at 11.

114.

115.

See Bribery Act, 2010, c. 23, § 7(2) (U.K.) (providing a specific defense to liability if a corporation can show that it has "adequate procedures" in place to detect improper conduct); Decreto Legislativo 8 giugno 2001, n. 231 (It.). The Italian Legislative Decree provides for direct liability of legal entities, companies, and associations for listed crimes, which include corruption and money laundering committed by their representatives. D.Lgs. n.231/2001 (It.). However, the law exonerates companies of criminal liability if they have adopted an adequate organizational, managerial, and control structure. See id.

supra note 16, at 13.

116.

WEISSMANN & SMITH,

117.

118.

119.

120.

121.

Id. Id. See id. at 14 n.46.

McNulty, supra note 113, at 12-14.

Id. at 12-13.

122. DAVID KENNEDY & DAN DANIELSEN, OPEN Soc'Y FOUNDS., BUSTING BRIBERY: SUSTAINING THE GLOBAL MOMENTUM OF THE FOREIGN CORRUPT PRACTICES ACT 29-30 (2011).

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[with] the requisite corrupt intent." 2 3 It is argued that a "compliance program that knowingly permitted, facilitated, or consciously or deliberately turned a blind eye to corrupt, intentional violations of the FCPA must be either per se inadequate or not undertaken in good faith." 24 This statement, while true, misses the mark since this is not what the Chamber is proposing.

Instead, the Chamber supports a compliance defense in situations where a corporation has diligently and in good faith enforced its compliance measures, but violations occurred nonetheless. Further, the Chamber's proposal referred to the U.K. Bribery Act and similar Italian anti-bribery laws for potential factors to be considered in deciding whether a program was effectively designed and rigorously implemented.1 2 5 Also, similar factors are already being taken into consideration by the government in some of the stages of prosecution; thus, they would not be a completely new addition to the current enforcement procedures of the FCPA.1 26 Such factors could be refined through litigation as the courts consider and apply them to the facts of each specific case. The Chamber's proposal is not for a "'fig leaf compliance program to insulate companies from knowing and intentional wrong-doing." 27 The Chamber's compliance defense, while not fully developed in its report, will provide protection to corporations and their employees and shareholders from employees who act only for their personal benefit. The adoption of this defense with rigorous standards in place will not send a message that the U.S. is backing down in its fight against corruption nor cause it to lose its leadership role, since a similar compliance defense is part of the anti-corruption laws of other U.S. partners.

2.

Limiting Successor CriminalLiability

Another important proposal presented by the Chamber adds clear and definite guidelines that would limit a company's liability for the prior acts of a company it has acquired.1 2 8 In fact, the FCPA can have wide-ranging consequences for companies in the merger and acquisition context.

Currently, a company is subject to civil and criminal liability for violations of the FCPA committed by a company it acquires or merges with, even if such violations occurred well before the acquisition or merger.1 29 Further, it

123.

124.

125.

126.

127.

128.

129.

Id. at 30 (internal quotation marks omitted).

Id. WEISSMANN & SMITH, supra note 16, at 12.

Id. at 13.

KENNEDY & DANIELSEN, supra note 122, at 31.

WEISSMANN & SMITH, supra note 16, at 19-20.

Id. at 14.

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is not a defense for the acquiring company to conduct due diligence prior to the acquisition or merger and promptly report any discovered violations.' 3 0 The DOJ may consider due diligence in deciding whether to prosecute an acquiring company; however, because this is purely a matter of governmental discretion, the acquiring company can still be held liable for undetected, preacquisition violations of the FCPA committed by the target company.131 "[T]he government has continually reiterated that the one way companies can appeal to the government to exercise its discretion not" to impute premerger or preacquisition successor FCPA liability is if the company conducted "rigorous due diligence accompanied by disclosure of any violations." 132 However, there are no clear guidelines as to what constitutes "rigorous due diligence" for a company to follow and potentially avoid successor liability.' 33 The lack of clear guidelines and the very high risk of potential successor liability have had a "chilling effect on mergers and acquisitions" with companies that have subsidiaries or operations overseas.134 Imposition of successor liability is an important tool in preventing companies from avoiding liability through restructuring. Companies should not be immune to criminal prosecution where the company chooses not to investigate violations of the FCPA by the target company just to reduce merger-related costs. Premerger or preacquisition investigations certainly raise the cost of the transaction, but they mitigate the company's long-term future liability. Planning and investigation allow companies to factor the heightened cost of potential FCPA liability into the deal before the transaction closes.135 They also allow the acquiring company to integrate timely the target company into its compliance program.' 36 Nevertheless, successor liability is inappropriate when a company has conducted its due diligence premerger or preacquisition and had no knowledge of FCPA violations. Additionally, "[c]lear parameters need to be placed on successor liability in the FCPA context."l 37 This area is akin to the need for a

130.

131.

132.

Remarks

See id. at 15.

See id.

Id.; see also Alice S. Fisher, Assistant Attorney Gen., U.S. Dep't of Justice, Prepared at the American Bar Association National Institute on the Foreign Corrupt Practices Act

(Oct. 16, 2006).

133.

WEISSMANN & SMITH, supra note 16, at 15.

134.

Id.; see also SEC v. Titan Corp., Litigation Release No. 19107, Accounting and Auditing Enforcement Release No. 05-0411 (Mar. 1, 2005).

135. Justin Connor & Michael Volkov, Buying an FCPA Violation: The Danger of Successor Liability, ASS'N CORP. COUNS., http://www.acc.com/legalresources/quickcounsel/bfvdsl.cfm (last visited Jan. 8, 2015).

136.

Id. 137.

WEISSMANN & SMITH, supra note 16, at 19.

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compliance defense because imposing criminal liability to the current company for the criminal acts of another company's employees further expands the "already vast bounds" of respondeat superior.1 38 This is another area of the FCPA that requires additional transparency, especially since there is no federal law governing successor liability, so federal courts must apply state statutory law and consider each case on its own facts. Furthermore, because no case to date has been brought under an FCPA successor liability theory, the only available guide comes from the opinions released by the DOJ and SEC. Once more, the FCPA means what the government says it does, and the courts will continue to be kept out until the government is forced to prove that criminal successor liability and its enforcement methods are appropriate in the FCPA context.

3.

Adding a "Willfulness" Requirementfor CorporateCriminalLiability

The current FCPA statute limits individual liability to "willful" violations; however, such limitation is not afforded to corporations. 39 The statute provides that the action in furtherance of the improper payment must be "corrupt[]" to violate the FCPA.1 4 0 This requirement applies to both companies and individuals. 141 However, adding a requirement that the conduct be willful would add another layer to the mens rea that the government must prove against individual defendants. "Corrupt" is not defined in the statute, but courts have defined it as "an act . . done voluntarily [a]nd intentionally, and with a bad purpose of accomplishing either an unlawful end or result, or a lawful end or result by some unlawful method or means."l 4 2 However, "to establish a 'willful' violation of a statute, 'the [g]overnment must prove that the defendant acted with knowledge that his conduct was unlawful."'" 43 The Chamber argued that the omission of willfulness for companies extends the scope of their criminal liability beyond that of an individual to cases where the company and its representatives or employees charged with violating the FCPA did not know that their acts were unlawful.1 4 4 This is seen as extremely unfair to corporations and "tantamount to strict liability."1 45 Thus, the Chamber

138.

139.

Id. at 20.

15 U.S.C.

140.

Id.

§ 78dd-l(a)

(2012).

141.

Id. 142.

E g., United States v. Liebo, 923 F.2d 1308, 1312 (8th Cir. 1991).

143.

Bryan v. United States, 524 U.S. 184, 191-92 (1998) (quoting Ratzlaf v. United States, 510 U.S. 135, 137 (1994), supersededby statute, Riegle Community Development and Regulatory Improvement Act of 1994 § 411, Pub. L. No. 103-325, 108 Stat. 2160, 2253).

144. WEISSMANN & SMITH, supra note 16, at 20.

145.

Id. at 20-21.

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proposed adding a willfulness requirement to corporate liability. 14 6 Such an

addition would also limit a corporation's liability for the acts of its subsidiaries that had no knowledge of violating the FCPA.1 4 7 The lack of a willfulness requirement enables the government to hold a corporation liable for acts that have only a "tangential connection to the United States." 48 This extends the already broad jurisdiction of the FCPA to situations where the company did not know the payments were in violation of the FCPA, or even that the FCPA applied at all. 149 For example, in 2008 Siemens Bangladesh Ltd., a subsidiary of Siemens (which is a German corporation listed on the NYSE), was charged separately with conspiracy to violate the books and records provisions of the FCPA for bribes paid outside the U.S. involving only foreign entities.so The only basis for jurisdiction in the U.S. that the government had was that "at least one" of the improper payments had passed through U.S. banks."' In 2005, the government charged DPC (Tianjin) Co., Ltd., a Chinese subsidiary of Diagnostic Products Corporation (DPC), which is an American manufacturer of medical products, with violations of the FCPA for improper payments made to laboratory personnel and doctors employed in state-owned hospitals in China.1 5 2 All the payments were made in China, but financial reports that referred to such payments as "commission payments" were e-mailed to the parent company in the U.S.

53

In both the

Siemens and DPC cases, the government held the parent company liable for the acts of the subsidiaries.1 54 The Siemens and DPC cases are another example of the extremely broad reach of the FCPA as interpreted by the government. Extending the willfulness requirement for companies, at least to the anti-bribery provisions of the FCPA, will certainly rein in some of these cases by forcing the DOJ to prove that the company knew of the improper acts, that its agents committed such acts with knowledge that American laws applied, and that the acts were unlawful. However, adding a willfulness requirement before finding companies liable under the FCPA will also dramatically

146.

Id. at 21.

147. Id. 148.

Id. 149. Id. 150.

Id.; see also Information at 5-6, United States v. Siemens Bangladesh Ltd., No. 1:0800369-RJL (D.D.C. Jan. 6, 2009) [hereinafter Siemens Bangladesh Information].

151. Siemens Bangladesh Information, supra note 150, at 5-6.

152. Criminal Information at 1-3, United States v. DPC (Tianjin) Co., No. 2:05-00482-DSF (C.D. Cal. Jun. 23, 2005) [hereinafter DPC Criminal Information].

153. Id. at 3-4.

154.

WEISSMANN & SMITH, supra note 16, at 21 & n.67.

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narrow the scope of the FCPA, and in light of the current political climate, it is highly unlikely that the FCPA will be amended in this manner.

4.

Limiting a Parent Company's Liabilityfor Acts of a Subsidiary

The Chamber's proposal to limit a company's liability for the acts of a subsidiary addresses, in particular, the concerns of American companies with foreign subsidiaries. The books and records provision of the FCPA imposes liability on the parent company for failure to institute proper control measures over its subsidiaries.155 However, the statute does not lay out when a parent company may be held liable for its subsidiary's violations of the FCPA's anti-bribery provisions.'1 6 The situation is complicated by the fact that the DOJ and SEC do not seem always to agree on this matter. The DOJ previously had taken the position that a parent company "may be held liable for the acts of [a] foreign subsidiar[y only] where they authorized, directed, or controlled the activity in question."1 5 7 However, in the case of Ralph Lauren Corporation (RLC), the DOJ charged RLC with violating the anti-bribery provisions of the FCPA for bribes paid to customs officials in Argentina by the RLC's Argentinean subsidiary over a five-year period.' 5 8 Neither the DOJ nor the SEC alleged that the payments were made pursuant to any "authorization, direction, or control

by RLC of its subsidiary" or with its knowledge of such payments.159 The SEC, on the other hand, has consistently operated under the theory that a company can be held civilly liable for its foreign subsidiary's violations of the anti-bribery provisions even though it was itself totally unaware of such violations.1 6 0 For example, in 2009 the SEC charged United Industrial Corporation (UIC) with violations of both the books and records and the anti-bribery provisions of the FCPA.' 6 1 The charges of violating the anti-bribery provisions were based on allegedly improper payments made in 2002 by a UIC subsidiary, ACL Technologies, to its foreign agents in connection with the building of a military aircraft depot 155.

See id. at 23.

See id.

157. A Layperson's Guide to the FCPA, U.S. DEP'T JUST., http://insct.syr.edu/wpcontent/uploads/2013/02/lay-persons-guide.pdf (last visited Jan. 31, 2015).

158.

Office of Pub. Affairs, Ralph Lauren CorporationResolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $882,000 Monetary Penalty, U.S. DEP'T JUST. (Apr. 22, 2013), http://www.justice.gov/opalpr/2013/April/I 3-crm-456.html.

159.

Philip Urofsky, The Ralph Lauren FCPA Case: Are There Any Limits to Parent Corporation Liability?, BLOOMBERG L. (May 13, 2013), http://www.bna.com/the-ralph-laurenfcpa-case-are-there-any-limits-to-parent-corporation-liability/.

160.

See WEISSMANN & SMITH, supra note 16, at 22.

161.

In re United Indus. Corp., Exchange Act Release No. 60005, Accounting and Auditing Enforcement Release No. 2981, at 10 (May 29, 2009).

156.

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for the Egyptian Air Force in Cairo, Egypt.162 Because of such payments, ACL allegedly was "awarded a Contract Engineering Technical Services ("CETS") contract with gross revenues ... of approximately $5.3 million" and a net profit of $267,571. 163 The complaint, however, did not allege that UIC had direct knowledge of such payments. Regardless of the lack of knowledge of the improper payment, UIC was ordered to pay the U.S. Treasury "disgorgement of $267,571.00 and prejudgment interest of $70,108.42" pursuant to a SEC cease-and-desist order.164 Another example of the SEC's unspoken theory of imposing liability on the parent company for its subsidiary's violations is that of DPC, which was charged with violating the anti-bribery provisions of the FCPA for allegedly improper payments made by its Chinese subsidiary, DePu. 1 65 The SEC alleged that from 1991 through 2002, DePu representatives made improper payments totaling $1.6 million to doctors and laboratory employees in charge of purchasing decisions at state-owned hospitals in China. 166 However, the SEC did not allege that DPC knew such payments were being made. Instead, the complaint stated that DPC only learned of the payments in November 2002, that it immediately ordered DePu to stop the payments, and that it subsequently implemented an FCPA compliance program.1 67 In spite of its lack of knowledge and its immediate remedial measures, DPC was ordered to pay disgorgement and prejudgment interest

of $2,788,622.

168

The facts of these cases and others show that the DOJ and SEC have gradually come to establish a prosecution theory that has no basis in the statute itself or its legislative history. In fact, "[t]his approach is contrary to the statutory language," which requires both "knowledge and intent for liability" to attach. 16 9 Further, the statute's legislative history indicates the drafters intended not to extend FCPA liability to an issuer or domestic concern for the violations of a foreign subsidiary unless the issuer or domestic concern acted "through" the foreign subsidiary. 70The government's approach bluntly disregards corporate structure and "approximate[s] strict criminal and civil liability of parent corporations for

162.

163.

164.

165.

Auditing 166.

167.

168.

169.

170.

Id. at 2.

Id. Id. at 11.

In re Diagnostic Prods. Corp., Exchange Act Release No. 51724, Accounting and Enforcement Release No. 2249, at 3 (May 20, 2005).

Id. at 2.

Id. Id. at 5.

WEISSMANN & SMITH, supra note 16, at 22.

See H.R. REP. No. 95-831, at 14 (1977) (Conf. Rep.).

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their subsidiaries' corrupt acts." 1 7 1 So far, no company has challenged these agencies' prosecution theory and until that happens, they both will continue to solidify their aggressive expansion of corporate liability. This will remain a significant concern, especially for companies with foreign subsidiaries.

5.

Statutory Definition of "Foreign Official"

A penal statute must define a criminal offense with such "sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." 72 However, the aggressive enforcement of the FCPA and the scant judicial review of FCPA cases have resulted in uncertainty as to the nature of the acts that the FCPA actually prohibits. The phrase "foreign official," which is one of the required elements for liability to attach under the anti-bribery provisions of the FCPA,17 3 seems to violate the constitutional requirement of definiteness. The most recent debate surrounding the FCPA has been over the scope of the term "instrumentality" found within the statute.' 74 The statute defines "foreign official" as follows: [A]ny officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, 7 5 or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.1 7 6 While the other terms are clearly defined under the statute, "instrumentality" has not been defined and, as a result, the term is extremely vague.' 77 It seems to be the catch-all term encompassing foreign individuals not within the FCPA's other definitions. Because instrumentality is undefined, uncertainty and speculation have arisen regarding the types of entities to which the term applies, even though the government has consistently argued for the broadest interpretation possible. 178 171.

Urofsky, supranote 159.

172.

Kolender v. Lawson, 461 U.S. 352, 357 (1983).

173.

See 15 U.S.C. § 78dd-l(a) (2012).

Id. § 78dd-1(f)(1)(A).

174.

175.

A public international organization is "(i) an organization that is designated by Executive order pursuant to section 288 of title 22; or (ii) any other international organization that is designated by the President by Executive order for the purposes of this section, effective as of the date of publication of such order in the Federal Register." Id. § 78dd-l(f)(1)(B).

176.

Id. § 78dd-l(f)(1)(A).

177.

See WEISSMANN & SMITH, supra note 16, at 24.

178.

Id. at 24-25.

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Congress did not specifically include state-owned corporations within the scope of the FCPA. However, both the SEC and DOJ have consistently taken an expansive view, regarding state-owned corporations and their representatives or employees as within the scope of a foreign official.' 79 In the government's view, foreign official applies not only to officials or employees of government departments or agencies but also to employees of corporations wholly or partially owned by the government. Furthermore, it has been the government's position that doctors, nurses, and administrators employed at state-owned hospitals are also foreign officials for purposes of the FCPA. so For example, in 2011 the SEC charged Johnson & Johnson (J&J) with violating the FCPA by paying bribes to public hospital doctors and administrators in Romania, Greece, and Poland in order to select J&J surgical implants or prescribe J&J pharmaceutical products. 8 ' J&J settled the charges and agreed to pay more than $48.6 million in disgorgement and prejudgment interest in addition to $21.4 million to settle criminal charges filed by the DOJ.1 82 The meaning of the term "instrumentality" is one of the few provisions of the FCPA that has been tested by at least several lower federal courts.' 83 Whether or not an employee of a state-owned company falls within the purview of instrumentality, and thus is a foreign official under the FCPA, was the main issue in two recent cases: United States v. Aguilarl8 4 and United States v. Esquenazi. In both cases, the defendants were charged with violating the FCPA because of alleged bribes paid to employees of government-owned companies.' 86 The courts in each case held that stateowned companies and their employees or agents can be foreign officials. a.

United States v. Aguilar

In United States v. Aguilar, Lindsey Manufacturing Company (LMC), its president, and other defendants (the Lindsey defendants) were charged with conspiracy to violate the FCPA and substantive violations of the

179.

See id. at 25.

180.

See, e.g., DPC Criminal Information, supra note 152, at 2-3.

181.

Complaint at 1-2, SEC v. Johnson & Johnson, No. 1:11-CV-00686 (D.D.C. Apr. 13, 2011) [hereinafter Johnson & Johnson Complaint].

182.

SEC Charges Johnson & Johnson with Foreign Bribery, U.S. SEC. & ExCH. COMM'N (Apr. 7, 2011), http://www.sec.gov/news/press/2011/2011-87.htm.

183.

United States v. Esquenazi, 752 F.3d 912, 920-22 (1lth Cir.), cert. denied, 135 S. Ct. 293 (2014); e.g., United States v. Aguilar (Aguilar 1), 783 F. Supp. 2d 1108, 1110 (C.D. Cal. 2011).

184.

Aguilar I, 783 F. Supp. 2d at 1110.

Esquenazi, 752 F.3d at 920-25.

185.

186.

Id. at 917; Aguilar 1, 783 F. Supp. 2d at 1109.

187.

Esquenazi, 752 F.3d at 936; Aguilar I, 783 F. Supp. 2d at 1109.

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FCPA.188 The government alleged that the defendants "paid bribes to two high-ranking employees of the Comisi6n Federal de Electricidad ("CFE"), an electric utility company wholly-owned by the Mexican Government." 89 According to the indictment, the bribes were funneled to the two CFE officials by making payments to Grupo International, a company owned and operated by Enrique Aguilar and his wife, who served as LMC's sales representative in Mexico.1 90 Allegedly, LMC paid Grupo 30% of its revenue on all goods and services LMC sold to CFE, knowing that large portions of those payments would be used to bribe the CFE officials in exchange for CFE awarding contracts to LMC.' 91 The defendants moved to dismiss the charges, arguing that "as a matter of law no state-owned corporation is an 'instrumentality,"' and thus "no CFE employee is a 'foreign official' under the FCPA."l 92 The defendants' position was that the specific characteristics of the CFE were not relevant and that this was a purely legal question.193 The defendants defined instrumentality to include government branches, departments, or agencies, but not state-owned corporations because "[u]nlike agencies and departments, corporations can take myriad forms and are created and operated in innumerable ways and for infinitely variable purposes."1 94 They further argued that departments and agencies do not share any characteristics with corporations because [fjoreign government agencies and departments exist only when created by governments, and are always funded solely by governments or by exercise of their power to enforce government policies and laws. They always and only exist to execute, administer[,] and enforce government policies.... In contrast, corporations, even corporations in which governments have an interest, are not always created by governments[,] . . . are not always funded solely by governments[, and] ... do more than execute policy.195 However, the court pointed out that the defendants' interpretation of instrumentality was inherently flawed. 19 6 Their argument implied that at least some, if not all, state-owned corporations do share several of the

188.

189.

190.

191.

192.

193.

194.

195.

196.

United States v. Aguilar (Aguilar 11), 831 F. Supp. 2d 1180, 1182-83 (C.D. Cal. 2011).

Id. at 1183.

Id. Id at 1186.

AguilarI, 783 F. Supp. 2d at 1112.

Id. at 1112-13.

Id. at 1114.

Id. (second alteration in original).

Id.atlll5.

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characteristics of government agencies and departments, and CFE could have been one of them.1 97 As expected, the government countered with a very broad construction of instrumentality. First, the government argued that the FCPA should be read consistently with the OECD so as not to conflict with its definition of "foreign public official."' 98 The OECD Convention defines foreign public official "to include 'any person exercising a public function for a foreign country, including for a public agency or public enterprise."' 99 And public enterprise is defined "to include 'any enterprise, regardless of its legal form, over which a government, or governments, may, directly or indirectly, exercise a dominant influence."' 2 00 Thus, under the government's position, if the FCPA's construction is consistent with the OECD, any individual performing a public function within a corporation that may be controlled, either directly or indirectly, by a government would constitute a foreign official under the FCPA. This interpretation would certainly bring the two high-ranking CFE officials within the scope of the FCPA. However, the court did not find this argument persuasive, and it disagreed with the defendants' categorical exclusion of all state-owned corporations from the purview of the FCPA. 20 1 The court concluded that "[t]he structure, object, and purpose of the FCPA ... [were] consistent with a definition of 'instrumentality' that includes at least some state-owned corporations."202 b.

UnitedStates v. Esquenazi

Another case in which the definition of instrumentality was central is United States v. Esquenazi, sometimes referred to as the Haiti Teleco case. 20 3 This case "is the largest in FCPA history in terms of [the number ofi defendants charged."204 Thirteen individuals were charged with FCPA and other related offenses.205 Joel Esquenazi and Carlos Rodriguez "owned Terra Telecommunications Corporation ('Terra'), a Florida corporation that purchased telephone time from vendors in other countries and resold the

197.

See id.

198.

Id. at I 116.

199.

Id. (alteration in original) (quoting OECD, supranote 8, at 7).

200.

Id. (citing OECD, supra note 8, at 15).

201.

Id.atll7.

202.

Id. 203.

Mark Koehler, Haiti Teleco Roundup, FCPA PROFESSOR http://www.fcpaprofessor.coni/haiti-teleco-roundup.

204.

Id. 205.

Id.

(Mar.

22,

2012),

412

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minutes on a wholesale basis or in the form of calling cards."206 Allegedly, the two Terra ex-executives bribed two former directors of international relations for Haiti's state-owned telecommunications company, Haiti Teleco-Robert Antoine and Jean Ren6 Duperval-in exchange for "reducing Terra's overdue bills and the charged rate per minute." 2 07 The alleged bribes, amounting to $900,000, were paid through intermediaries and were represented as comnissions or consulting fees.2 0 8 Esquenazi and Rodriguez were found guilty of seven counts of violating the FCPA, one count of conspiracy to violate the FCPA, and other money laundering and wire fraud offenses.2 09 Esquenazi was sentenced to 15 years in prison, and Rodriguez was sentenced to 12 years. 21 0 They were also held "jointly and severally liable for restitution payments totaling $2.2 million and ordered . . to forfeit" over $3 million.21 1 The FCPA charges against both Esquenazi and Rodriguez "were based on the theory that Haiti Teleco was an 'instrumentality' of the Haitian 2 12 government" and that Antoine and Duperval "were 'foreign officials."'

Both Esquenazi and Rodriguez appealed their convictions to the Eleventh Circuit.213 The central question in both appeals was whether Haiti Teleco performed a government function and thus was an instrumentality under the FCPA, and whether Antoine and Duperval were foreign officials.2 14 The appeals were historic because it was the first time that this prosecution theory, so widely used and often abused by the government, came before an appellate court.

The government's argument that Teleco was an instrumentality under the FCPA was based on the fact that Haiti's National Bank owned 97% of Teleco and that its board of directors and general director were appointed through an executive order issued by the Haitian President and signed by the Haitian Prime Minister, the Minister of Public Works, and the Minister of Economy and Finance. 2 15 Further, the government argued that Teleco was "recognized . . as a state-owned company" under Haitian law, and that 206.

Brief for the United States at 3, United States v. Esquenazi, 752 F.3d 912 (11 th Cir.) (No. I l-15331-C), cert. denied, 135 S. Ct. 293 (2014).

207.

Id. at 4.

208.

Id. 209.

Id. at 3.

210.

Id. 211.

Id. 212.

Mike Koehler, Haiti Teleco "Foreign Official" Says He Was Not a "Foreign Official" - Files Appeal on This and Other Issues, FCPA PROFESSOR (Feb. 8, 2013),

http://www.fcpaprofessor.com/haiti-teleco-foreign-official-says-he-was-not-a-foreign-officialfiles-appeal-on-this-and-other-issues.

213. Brief for the United States, supra note 206, at 1.

214. See id. at 19-21.

215. Id. at 7, 19.

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it "enjoyed the [financial] benefits of a state-owned corporation."216 The government maintained that as employees of a state-owned company, Antoine and Duperval were both foreign officials within the meaning of the 211 21 FCPA.217 The jury instructions were also based on the same theory.

The defendants argued in their appellate briefs that "Haiti Teleco [was] not a department or agency of the Haitian government," and that a stateowned enterprise that does not perform a governmental function is not an instrumentality under the FCPA.21 9 The district court, however, adopted the government's position, stating: [T]he plain language of [the FCPA] and the plain meaning of [instrumentality] show that as the facts are alleged in the indictment Haiti Teleco could be an instrumentality of the Haitian government and that the indictment sufficiently alleged that Antoine and Duperval were foreign officials by alleging that these individuals were directors in the state-owned Haiti Teleco.220 The Eleventh Circuit affirmed the district court's judgment and upheld the long sentences imposed for these FCPA violations.221 It held that for an entity to qualify as an instrumentality under the FCPA, it "must be under the control or dominion of the government" and it must "perform a function the government treats as its own." 2 22 Under the first prong, the court discussed several factors that courts and juries should consider when deciding whether an entity is controlled by the government.22 3 These factors include whether the government has a majority interest in the entity; the government's ability to hire and fire the entity's principals; the extent to which the entity's profits, if any, go directly into the government fisc[;] ... the extent to which the government funds the entity if it fails to break even; and the length of time these indicia have existed.224

216.

Id. at 7.

217.

Brief of Appellant at 26, United States v. Esquenazi, 752 F.3d 912 (1Ith Cir.) (No. 1115331-C), cert. denied, 135 S. Ct. 293 (2014).

218.

Id. 219.

Id. at 26-27; see also United States v. Carson, No. SACR 09-00077-JVS, 2011 WL 5101701, at *5 (C.D. Cal. May 18, 2011) (limiting instrumentality to state-owned entities that perform governmental functions).

220.

Brief for the United States, supra note 206, at 27 (alterations in original) (internal quotation marks omitted).

United States v. Esquenazi, 752 F.3d 912, 939 (11th Cir.), cert. denied, 135 S. Ct. 293 221.

(2014).

222.

Id. at 922, 929.

223.

Id. at 925.

224.

Id.

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The court further reasoned that the 1998 amendments of the FCPA were "enacted to ensure the United States was in compliance with its [OECD] obligations."2 25 Therefore, the interpretation of foreign official under the FCPA must be consistent with its definition under the OECD.2 26 The court further explained that Congress did not redefine foreign official in the 1998 amendments because it considered the preexisting definition to cover the OECD Convention's definition.22 7 In August 2014, Esquenazi and Rodriguez petitioned the U.S. Supreme Court to review their convictions. 2 2 8 The certiorari petition is believed to be the first substantive FCPA petition in FCPA history and was supported by many amicus briefs.229 Indeed, the U.S. Supreme Court has never addressed a substantive issue of the FCPA. 2 30 Nonetheless, it declined to hear the petition.231 Denial of certiorari means that the Eleventh Circuit's decision is binding in that circuit until the Supreme Court decides to rule differently on the issue. It does not mean, however, that the Supreme Court agreed with the Eleventh Circuit's decision. c.

Amending the Definition or Judicial Review?

The Eleventh Circuit's decision was a victory for the government because it sanctioned an expansive interpretation of foreign official. But the reactions from FCPA lawyers have been mixed. Some think the decision will be helpful to compliance officers in explaining the compliance programs to employees.232 The majority, however, thinks that the standard

225.

Id. at 923.

226.

Id. The OECD defines "foreign public official" as "any person exercising a public function for a foreign country, including for a . . . public enterprise.... A 'public enterprise' is any enterprise, regardless of its legal form, over which a government, or governments, may, directly or indirectly, exercise a dominant influence." Id. (quoting OECD, supra note 8, at 7, 15) (first alteration in original). Further, "[a]n official of a public enterprise shall be deemed to perform a public function unless the enterprise operates on a normal commercial basis in the relevant market, i.e., on a basis which is substantially equivalent to that of a private enterprise, without preferential subsidies or other privileges." Id. (emphasis omitted) (quoting OECD, supra note 8, at 15).

227.

Id. 228.

See Esquenazi v. United States, 135 S. Ct. 293, 293 (2014).

229.

Mike Koehler, "Foreign Official" Cert Petition Filed in Supreme Court, FCPA PROFESSOR (Aug. 15, 2014), http://www.fcpaprofessor.com/foreign-official-cert-petition-filed-insupreme-court.

230.

Id. 231.

Esquenazi, 135 S. Ct. at 293.

232.

Samuel Rubenfeld, 'Instrumentality' Definition Leads FCPA Bar to Discuss Its 21, 2014, 5:30 AM ET), WALL ST. J., (May, Meaning, http://blogs.wsj.com/riskandcompliance/2014/05/21/instrumentality-definition-leads-fcpa-bar-todiscuss-its-meaning.

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set forth by the Esquenazi court was very uncertain and that "the ruling raised as many questions as it answered."233 The enormous confusion surrounding how far the statute reaches remains, and the Chamber's proposal is still very relevant. Given the ambiguous definition of foreign official in the statute and the vast number of entities that would fit within the government's interpretation of instrumentality (whether the entities are directly or indirectly, or wholly or partially, owned or controlled by a foreign government), the Chamber proposed that the FCPA be modified to include a clear definition of foreign official.234 The Chamber proposed several more concrete ways in which the FCPA should be amended to clarify these terms, including the percentage of ownership by the foreign government that would qualify a company as an instrumentality, whether the official should be of a certain rank in the company, and the extent to which control by the government would qualify a company and its officials as an instrumentality.235 An amendment to the FCPA clarifying the definition of instrumentality would certainly dispel much of the confusion and debate surrounding the term. But such an amendment would also narrow the application of the statute to the specific instances stated in the FCPA. Such a narrow approach is highly unlikely in the near future. Another argument against a more specific statutory definition is that it could be both underinclusive and overinclusive.236 A clear statutory definition that encompasses all the different contexts in which commercial enterprises are controlled by governments around the world is impossible.23 7 In fact, the broad definition of foreign official under the FCPA is similar to that of multilateral anticorruption treaties and other countries' statutes, whether they focus "on the nature of the entity to whom corrupt payments are made," or more directly on the function being performed.2 38 They "all define 'foreign official' broadly enough to permit appropriate administrative and prosecutorial discretion aimed at implementing the larger purpose of the legislation: prohibiting corrupt and illegal payments by people and organizations intended to improperly influence foreign government decision-making." 2 39

Id. (internal quotation marks omitted).

233.

WEISSMANN & SMITH, supra note 16, at 26-27.

234.

235.

Id. at 27.

KENNEDY & DANIELSEN, supra note 122, at 50.

236.

237.

Id. 238.

Id. at 49 ("The United Kingdom focuses more directly on the function being performed than on the nature of the entity concerned, defining a foreign official in terms of the exercise of a 'public function' on behalf of a country or territory outside the UK, a public agency, public enterprise, or public international organization, including 'officers exercising public functions in state-owned enterprises."' (footnote omitted)).

239.

Id.

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Nonetheless, such a broad, vague definition leaves the door open to an everexpanding interpretation of the FCPA and prosecutorial overreach. The only solution is judicial review of the relevant cases to give companies and the government guidance about which entities are covered by the FCPA. Judicial review will also place boundaries on the government's broad interpretation of the statute and limit prosecutorial overreach.

However, even judges need some guidance in their application of the statute and exercise of discretion. The courts' analysis should continue a regime under which questions of liability turn on the nature of the details of the relationships between the person receiving the payments, the entity she is employed by or represents, and the government of that country. 240 I United States v. Aguilar, the instrumentality was the CFE, the entity responsible for supplying electricity to the whole country except for Mexico City. 2 4 1 Under Mexican law, "the supply of electricity is solely a government function . . [and] CFE is defined as 'a decentralized public entity with legal personality and its own patrimony."' 24 2 The governing board of CFE is comprised of several of Mexico's secretaries of state, and Mexico's president must appoint the Director General of the company.2 4 3 Furthermore, "CFE is described as a governmental 'agency' on its website" and as "a company created and owned by the Mexican government." 24 4 Thus, the facts regarding the status of the CFE in Aguilar I were fairly clear. But there are other cases that may not be so clear, such as the J&J case concerning the alleged payments to doctors in public hospitals. 245 Therefore, judicial review is needed to provide a clearer test for at least certain enumerated relationships. Such a test will mitigate to some degree the need to examine the details of particular relationships in the course of investigating suspected violations of the FCPA. As it now stands, the FCPA does not give fair notice as to when, in advance of a payment, a violation of the FCPA occurs, and in the absence of a statutory clarification, the issue is past ripe for judicial interpretation.

IV. THE NEED FOR JUDICIAL INTERVENTION

The proposals advanced by the Chamber, while very reasonable and well grounded in fact and law, are not likely to be implemented in the current political climate and while international efforts to fight corruption

240.

241.

242.

243.

244.

245.

Id. United States v. Aguilar (Aguilar 1), 783 F. Supp. 2d 1108, 1110 (C.D. Cal. 2011).

Id. at 1112.

Id. Id. See Johnson & Johnson Complaint, supra note 181, at 1-2.

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are expanding. All of the Chamber's proposals will have the effect of narrowing the scope of the FCPA and lessening its impact-effects not particularly desirable by the current political community. What is left, then, is judicial intervention, either through litigation or oversight of NPAs and DPAs. A.

Diversion Agreements

As discussed in Part II, NPAs and DPAs are the main methods of resolving corporate FCPA violations, although they are not always the appropriate answer for the corporation charged with, or suspected of, violating the FCPA.246 A corporation has very little leverage in negotiating a diversion agreement and faces a series of obstacles in defending an FCPA action. Such obstacles "include obtaining records from foreign countries, hiring experts on foreign law, and gathering related opinions from foreign courts or government agencies regarding the alleged conduct."24 7 Thus, central to the decision of whether to enter into a diversion agreement is the cost of litigation, which is likely prohibitive. This is especially a concern in cases concerning individual defendants. A corporation's forced willingness to enter a diversion agreement is exacerbated by the fact that NPAs and DPAs are negotiated and implemented without any judicial oversight.24 8 Courts have thus far approved all DPAs and NPAs without any modifications even though they lack legal foundation and contain mainly legal conclusions. 24 9 These agreements largely recite the defendant's conduct, thereby failing to prove all the elements of the FCPA, and do not provide proper legal precedent that establishes the defendant's guilt. 25 0 Furthermore, "because of the government's averseness to negotiation and its propensity to quickly withdraw from a settlement," corporations have little to "no say in [negotiating] the terms of a diversion agreement." 25 1 This immense, unchecked power allows the government to apply a very broad reading of the FCPA and "foster[s] an environment in which prosecutors abuse their discretion." 2 52 As long as FCPA defendants, whether individuals or corporations, continue to enter DPAs and NPAs in these conditions, "the government will continue to build its arsenal of 'prosecutorial common law' to support its aggressive and slanted

246.

247.

248.

249.

250.

251.

See supra Part II.B.2.

Androphy, Gargour & Nelson, supra note 76, at 23.

Georgis, supra note 80, at 274.

Id. at 276.

Id. Id. at 274.

252.

Id. at 270-71.

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interpretation of the FCPA."2 53 The judiciary should thus intervene and not just rubber-stamp government-drawn diversion agreements. The courts, not the government, should act as the final authority of what the FCPA requires. Under 18 U.S.C. § 3161(h)(2), courts have the authority to review NPAs and DPAs.254 Courts should exercise this authority to ensure that the defendant's alleged criminal conduct satisfies all the elements of the FCPA, and that the prosecution has been transparent in its interpretation of the FCPA, the terms of the agreement, and the punishment imposed.

B.

ProsecutorialOverreach

Judicial oversight, whether by scrutinizing DPAs and NPAs or during litigation, is imperative to ensure that the prosecution has not stepped outside of its already wide bounds. Several cases have shown that prosecutorial overreach in FCPA enforcement is not a speculative fear but a reality.

1.

United States v. Aguilar

In United States v. Aguilar, after trial but before sentencing, Lindsey Manufacturing, Keith Lindsey, and Steve Lee moved to dismiss the indictments on the basis of prosecutorial misconduct.25 5 After a hearing, the court found that the government had allowed a key FBI agent to testify untruthfully before the grand jury, inserted material falsehoods into affidavits submitted to magistrate judges in support of applications for search warrants and seizure warrants, improperly reviewed e-mail communications between one [d]efendant and her lawyer, recklessly failed to comply with its discovery obligations, posed questions to certain witnesses in violation of the [c]ourt's rulings, engaged in questionable behavior during closing argument[,] and even made misrepresentations to the [c]ourt. 2 56 The court granted the defendants' motion. 2 57 "The government filed a notice of appeal to the Ninth Circuit that same day" but withdrew it the next 258 year.28 Judge A. Howard Matz, the presiding judge at trial, said that "[t]he

253. Androphy, Gargour & Nelson, supra note 76, at 23.

254. Georgis, supra note 80, at 276 & n.218.

255.

United States v. Aguilar (AguilarII), 831 F. Supp. 2d 1180, 1182 (C.D. Cal. 2011).

256.

Id. 257.

Id. 258.

U.S. v.

Noriega et al., SHEARMAN & STERLING, LLP, http://fcpa.shearman.com/?s-matter&mode=form&id=364&tab=core&tabmode=list (last visited

Oct. 4, 2014).

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[g]overnment ha[d] acknowledged making many 'mistakes,' as it characterize[d] them." 2 59 The judge went on: 'Many' indeed. So many in fact, and so varied, and occurring over so lengthy a period ... that they add up to an unusual and extreme picture of a prosecution gone badly awry." 260 "As enumerated by Judge Matz, the prosecutorial misconduct included Brady violations the impact of which suppressed the fact that the defendants had never heard of, knew of, or paid any" of the alleged bribes. 2 61 The government knew that other individuals had made the payments.26 2 Misrepresentations in the affidavits to obtain search warrants "went on to taint further affidavits" and testimony to the grand jury.263 During closing argument, the prosecution recited to the jury a charge that had been excluded by the court.264 The impact of this sloppy, overzealous prosecution was devastating to the defendants. The financial and emotional costs of facing prosecution and litigating the case were immense; 265 however, the decision to litigate instead of entering a DPA with the government made all the difference in this case. It was because of the vigorous work of defense counsel and judicial intervention that the prosecution's misconduct was discovered and punished.

2.

The Africa Sting Cases

What is known as the Africa Sting caseS266 stemmed from a series of indictments returned in the U.S. District Court for the District of Columbia involving over twenty defendants arrested after a 2010 sting operation in Las Vegas.267 Posing as officials and representatives of the government of Gabon at an annual trade show for military and law enforcement equipment companies, FBI agents sought "bribes to share with Gabon's minister of defense." 26 8 The operation was presented by Assistant Attorney General Lanny Breuer, head of the DOJ Criminal Division at the time, as "the largest action ever undertaken by the Justice Department against individuals

Aguilar 11, 831 F. Supp. 2d at 1185.

259.

260.

Id. 261.

Lin Solomon, Individual Liability and the Foreign Corrupt Practices Act, N.J. LAW., Feb. 2013, at 33, 35-36 (footnote omitted).

262.

Id. at 36.

263.

Id. Id. 264.

265.

Id. See id. at 34.

266.

267.

Richard L. Cassin, Feds Drop Case Against Final Africa Sting Defendants, FCPA BLOG (Mar. 27, 2012, 1:41 PM), http://www.fcpablog.com/blog/2012/3/27/feds-drop-caseagainst-final-africa-sting-defendants.html.

268.

Solomon, supra note 261, at 34.

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for FCPA violations." 26 9 The government used enormous resources investigating the individuals charged, "all [of whom were] executives of U.S., U.K. and Israeli arms manufacturers." 2 70 However, after two mistrials, all the charges were dismissed with prejudice, including the charges against seven defendants who were granted mistrial, three who were acquitted, and three who had pleaded guilty and were not facing trials. 2 7 1 One of the defense attorneys referred to the entire African Sting prosecution as a "made-up fantasy." 272 In dismissing the charges, the presiding judge, Judge Richard Leon, called it "a long and sad chapter in the annals of white collar criminal enforcement." 273 He also added that he had expressed concerns "regarding the way this case [had] been charge[d] and ... prosecuted," and that he had "specifically commented .. . regarding the government's very, very aggressive conspiracy theory that was pushing its already generous elasticity to its outer limits. Of course, in the second trial that elastic snapped in the absence of the necessary evidence to sustain it." 274 3.

United States v. John O'Shea

In November 2009, John Joseph O'Shea, former General Manager of ABB Inc., was indicted "for his alleged role in a conspiracy to bribe Mexican government officials to secure contracts with the [CFE]."2 75 In January 2012, at the close of the government's case, Judge Lynn Hughes of the U.S. District Court for the Southern District of Texas granted O'Shea's motion for acquittal on all FCPA charges, and a month later he dismissed all charges of conspiracy, money laundering, and obstruction.2 76 Judge Hughes had found the testimony of the government's main witness-who had pleaded guilty to conspiracy charges-"abstract and vague, generally relating [to] gossip" and unable to tie Mr. O'Shea to the alleged crime.277 Among other things, Judge Hughes also stated, "The problem here is that

269.

Id. 270.

Id. 271. Cassin, supra note 267.

272.

Richard L. Cassin, Sting Case Is a DOJ 'Fantasy,'Lawyer Says, FCPA BLOG (Jan. 31, 2012, 9:02 PM), http://www.fcpablog.comI/blog/2012/1/31/sting-case-is-a-doj-fantasy-lawyersays.html.

273. Mike Koehler, Africa Sting - In the Words ofJudge Leon, FCPA PROFESSOR (Feb. 23, 2012), http://www.fcpaprofessor.com/africa-sting-in-the-words-of-judge-leon 274.

Id. 275. Office of Pub. Affairs, Former General Manager of Texas Business Arrestedfor Role in Alleged Scheme to Bribe Officials at Mexican State-Owned ElectricalUtility, U.S. DEP'T JUST. (Nov. 23, 2009), http://wwwjustice.gov/opa/pr/2009/November/09-crm- I 265.html.

276.

Mike Koehler, O'Shea Not Guilty of Substantive FCPA Charges, FCPA PROFESSOR (Jan. 17, 2012), http://www.fcpaprofessor.conoshea-not-guilty-of-substantive-fcpa-charges.

277.

Solomon, supra note 261, at 36.

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the principal witness against Mr. O'Shea .. . knows almost nothing.

. .

. The

government should have been prepared before they brought the charges to the [g]rand [j]ury.... You shouldn't indict people on stuff you can't prove." 278 Although this case was not dismissed on the basis of prosecutorial misconduct, the charges were brought on allegations the government could not prove and on the testimony of unreliable witnesses.

These cases demonstrate that the problem of prosecutorial overreach is not an illusory one. But they also show that with the help of resourceful and relentless counsel, people wrongfully accused of violating the FCPA can fight the charges, put the government to its burden, and win. Through litigation, courts are offered the opportunity to intervene.

V.

CONCLUSION

The FCPA was enacted for the purpose of making it unlawful for businesses and their employees or agents to bribe foreign government officials to obtain or retain a business advantage. The U.S. has been the global leader in the fight against corruption, and many other countries have passed legislation mirrored after the FCPA. While the statute has a noble purpose, it has also become a burden on U.S. businesses operating abroad.

Because of its broad scope and uncertain provisions, enforcement of the FCPA has given the government almost unlimited power and has created a fertile ground for prosecutorial abuse. Most of the FCPA actions are resolved through diversion agreements and very few cases go to trial.

Therefore, the enforcement of the FCPA is done outside the courts and with little, if any, judicial supervision. As a result, case law interpreting the FCPA is very limited.

Over the years, excessive penalties and expansive government powers have crept into the FCPA enforcement and have now become the norm. It is certainly important for the government to have a strong enforcement authority able to impose meaningful penalties for criminal conduct; however, high, unlimited penalties are not reasonable or necessary to achieve the goals of the FCPA. The Chamber and others have advanced several reform proposals for amending the FCPA. Nonetheless, all of the proposals, if enacted, would restrict the scope of the FCPA. While this is not necessarily a negative result, it is highly unlikely that these proposals will be implemented, given the current political climate and the expanding global fight against corruption. Judicial intervention, whether through litigation or court supervision of diversion agreements, is the only solution

278.

Mike Koehler, Friday Roundup, FCPA PROFESSOR http://www.fcpaprofessor.com/fiday-roundup-76 (alterations in original).

(Apr.

26,

2013),

422

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to the current FCPA problems. Judicial intervention and supervision provide protection against overzealous enforcement of the FCPA and prosecutorial abuse. Furthermore, it will offer the necessary guidance and clarity that businesses need in implementing their compliance programs and conducting business overseas. High fines and long prison sentences are not the answer.

Sonila Themeli*

Associate Attorney at Shook, Hardy & Bacon, L.L.P.; J.D., summa cum laude, South Texas College of Law, 2014.

THE LUCK OF THE DRAw: INCONSISTENCIES OF BLOOD DRAWS IN DWI INVESTIGATIONS, AND THE SMALL ODDS MISSOURI V. MCNEELYRESOLVED THE CONFLICT I. II. III.

INTRODUCTION ..................................... ...... 423 MISSOURI V. MCNEELY AND THE LIMITED APPLICATION OF ITS 425 HOLDING .................................................

INCONSISTENT APPLICATION UNDER THE TEXAS IMPLIED CONSENT PROVISION......................................

427

A. B. IV.

Differing Standardsof What Constitutes a "Qualified Technician" and a "SanitaryPlace" Depending on Whether Blood is Drawn Pursuantto a Warrant.... ..... 429 The Court is not Likely to Suppress Wrongfully Obtained Evidence Taken Pursuantto Section 724.012(b)(3) (B) .......... 433

INCONSISTENT REQUIREMENTS FOR A PROPER WARRANT IN TEXAS...................................................

436 Telephonic Warrants:No CorporealPresence Requirement ............................. ..... 437 B. The Oath, Signature, or Lack ThereofRequirement............... 439 C. Specificity ofFacts that Support a ProbableCause Determination .................................... 439 D. PersonalFamiliarityBetween the Affiant and the Magistrate .......................................

441 E. The JurisdictionalRequirement: Different Geographic Sizes and Availability ofManpower ............ ...... 443 A.

V. VI. VII.

CONSTITUTIONAL IMPLICATIONS BEYOND THE FOURTH AMENDMENT .............................................

444 RECOMMENDATION FOR MORE CONSISTENT APPLICATION..........446 CONCLUSION .............................................

449 I.INTRODUCTION

Drunk driving is undoubtedly one of the biggest problems in our nation. The number of those injured, or even killed, in accidents involving drunk drivers remains staggering each year.' For this reason many states began using blood evidence to bolster conviction rates, but at the cost of whittling away many individuals' constitutional rights.

I. In the United States, there are around 10,000 fatalities involving drunk driving each year. See Nat'1 Highway Traffic Safety Admin., Traffic Safety Facts: Alcohol-Impaired Driving, U.S. DEP'T TRANSP. 1-2 (Dec. 2013), http://www-nrd.nhtsa.dot.gov/Pubs/811870.pdf.

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In Missouri v. McNeely, the United States Supreme Court answered the question of whether dissipation of alcohol in the blood, alone, was sufficient to create an "exigent circumstance" to justify a nonconsensual, warrantless blood draw from a person arrested for driving while intoxicated. 2 The Court held that the natural dissipation of alcohol in the blood could support a finding of exigency in a specific case, but it did not do so categorically. 3 Before McNeely, it was fairly unclear where Texas stood on the issue of whether dissipation of blood alcohol created an exigent circumstance that would always justify a warrantless blood draw. Dicta in case law suggested that the dissipation would be sufficient to justify a warrantless blood draw; 4 however, McNeely's holding has now clearly foreclosed that suggestion.

What remains unclear is how McNeely will affect the implied consent provision of the Texas Transportation Code5 when officers are required to take a sample of a suspect's blood without a warrant.6 While McNeely may have drawn the constitutional line when blood draws are taken without a warrant, it failed to address where the line should be drawn when blood evidence is seized with a warrant. The Texas Court of Criminal Appeals has made clear that no exigency is required when a blood draw is performed with a warrant, stating, "[S]earches conducted pursuant to a warrant will rarely require any deep inquiry into reasonableness." 7 This broad discretion given to a peace officer once a warrant has been obtained has resulted in inconsistent outcomes for similar cases. The source of the inconsistency depends on which officers sought a warrant to obtain a blood sample, which officers employed the correct means to obtain the warrant,

2.

3.

Missouri v. McNeely, 133 S. Ct. 1552, 1556, 1560 (2013).

Id. at 1563.

4. See, e.g., Skinner v. State, No. 12-05-00093-CR, 2006 WL 1420388, at *1 (Tex. App.-Tyler May 24, 2006, pet. refd) (mem. op., not designated for publication) (citing Schmerber v. California, 384 U.S. 757, 770-71 (1966)); State v. Laird, 38 S.W.3d 707, 713 (Tex. App.-Austin 2000, pet. ref d); see also Aliff v. State, 627 S.W.2d 166, 170 (Tex. Crim. App. 1982).

5.

TEX. TRANSP. CODE ANN. § 724.012 (West 2011).

6. The Texas Court of Criminal Appeals recently answered this question in State v.

Villarreal, No. PD-0306-14, 2014 WL 6734178 (Tex. Crim. App.-Nov. 26, 2014). While the opinion suggested that a warrant must still be issued when blood draws are required under the Transportation Code, the court granted a rehearing on February 25, 2015. Id. at *1. Accordingly, how McNeely affects the implied consent provision in Texas remains unanswered.

7. Beeman v. State, 86 S.W.3d 613, 615 (Tex. Crim. App. 2002) (en banc) (quoting United States v. Leon, 468 U.S. 897, 922 (1984)) (internal quotation marks omitted).

8. See, e.g., Sanchez v. State, 365 S.W.3d 681, 686-87 (Tex. Crim. App. 2012) (holding that a judge in Montgomery County lacked authority to issue a search warrant in Harris County and therefore the blood draw pursuant to that warrant was improper); Farhat v. State, 337 S.W.3d 302, 309-10 (Tex. App.-Fort Worth 2011, pet. ref'd) (holding that officer's affidavit did not

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and which officers believed a blood sample could be taken without a warrant. 9 Part II of this Comment explains the holding of Missouri v. McNeely and its limited application to blood draws without a warrant. Regarding the implied consent provision of the Transportation Code, Part III of this Comment reveals the incongruity between the strict requirements that officers, after making a determination that a sufficient exigency exists under McNeely, must follow when conducting warrantless blood draws, and the minimal safeguards protecting individuals whose blood is drawn pursuant to a warrant. Part IV of this Comment illustrates inconsistent warrant requirements in Texas ranging from: (1) the sufficiency of telephonic oaths; (2) the sufficiency of the signature and oath, or lack thereof; (3) the level of specificity of facts necessary to support a finding of probable cause; (4) the existence of personal familiarity between the officer and issuing magistrate; and (5) the jurisdictional requirements that leave smaller counties with fewer options in implementing blood draw programs. These inconsistencies show that the use of blood evidence against a person depends in large part on the discretion and the knowledge of the officer who happens to stop the person. Part V of this Comment illustrates how the United States Supreme Court's characterization of blood as nontestimonial in Schmerber v.

Californiao is being broken down by the Court's more recent Confrontation Clause decisions, and suggests that in the future the Court may find that blood draws implicate more than just the Fourth Amendment.

Because the narrow holding in McNeely fails to fully resolve conflicts and inconsistencies in the law or properly instruct officers when a warrant needs to be obtained, Part VI of this Comment suggests how law enforcement efforts can still combat the growing problem of DWIs while maintaining individuals' fundamental rights under both the United States and Texas Constitutions through more consistently applied rules.

II.

MISSOURI V. MCNEELY AND THE LIMITED APPLICATION OF ITS HOLDING

In State v. McNeely, the Missouri Supreme Court held that the natural dissipation of alcohol in the blood, alone, was not a sufficient exigency to justify a warrantless seizure of blood evidence, and explained its holding as

provide the magistrate with a substantial basis for issuing a search warrant and therefore the blood draw was improper).

9.

See, e.g., Knisley v. State, 81 S.W.3d 478, 483 (Tex. App.-Dallas 2002, pet. ref d).

10.

Schmerber v. California, 384 U.S. 757 (1966).

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being within the precedent of Schmerber v. California." In Schmerber, the U.S. Supreme Court held that the nonconsensual, warrantless taking of the defendant's blood did not violate his Fourth Amendment rights because "special facts" existed.12 These special facts included a two-hour delay between the time of the accident and the defendant's arrest at the hospital, and the long amount of time that was necessary for police officers to investigate the scene of the accident where the defendant's car had skidded off the road into a tree. 3 In McNeely, however, the Missouri Supreme Court held that where no similar special facts exist, a warrant must be obtained before such intrusive evidence may be gathered.14 The U.S. Supreme Court affirmed the Missouri Supreme Court's judgment.1 5 The Court refused to create a per se exigency based solely on the dissipation of alcohol in the blood, and instead adopted a case-by-case approach.1 6 The Court noted that such a rule was "hardly unique within [the Court's] Fourth Amendment jurisprudence."

The Court, however, was not clear which special facts or factors officers should consider when determining whether a warrantless blood draw would be justified in a particular DWI case.' 8 This is because the Court certified the State of Missouri's appeal solely to determine whether dissipation of alcohol in the blood created a per se exigency.1 9 Accordingly, in an our-hands-are-tied-to-consider-this-further fashion, the Court noted that a warrantless blood draw could be justified even when no Schmerberlike special facts were present, and that the dissipation of alcohol and inability to secure a warrant in time before evidence was destroyed was one such factor that officers could consider to determine whether a warrant would be necessary.20 Therefore, the Court declined to draw a clear line on what special facts or factors must be present, but did make clear that the dissipation of alcohol alone in every case was not enough. 2 1 McNeely answered the question that had divided state courts. For instance, in the pre-McNeely case of State v. Fletcher, a North Carolina appellate court held that "probable cause and the destruction of evidence

11.

State v. McNeely, 358 S.W.3d 65, 74-75 (Mo. 2012) (en banc) (per curiam) (citing Schmerber, 384 U.S. at 770-71), aff'd, 133 S. Ct. 1552 (2013).

12.

Schmerber, 384 U.S. at 771-72.

13.

Id. at 757, 770-71.

14.

McNeely, 358 S.W.3d at 74.

15.

Missouri v. McNeely, 133 S. Ct. 1552, 1568 (2013).

16.

Id. at 1563.

17.

Id. at 1564.

18.

Id. at 1568.

19.

Id 20.

See id.

21.

See id.

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caused by the body's diminution of alcohol in the bloodstream together meet the Fourth Amendment's requirements for a reasonable . .. search of the person," even without a warrant.22 Other states, such as Utah, have held that the "destruction of evidence brought on by the involuntary metabolic processes of the human body presents a less compelling case for exigency." 2 3 The Supreme Court of Utah therefore held in State v.

Rodriguez that dissipation of alcohol in the blood alone was not a sufficient exigency. 24 The court was also troubled by the law enforcement officials' failure to consider obtaining a warrant before taking the sample of the defendant's blood.25 That court, however, looked at the totality of the circumstances-most importantly that the defendant was faced with the serious charge of automobile homicide for the death of her passenger-and ruled that in that case, probable cause and sufficient exigent circumstances justified the warrantless blood draw.2 6 Nevertheless, Rodriquez was a case the United States Supreme Court relied upon in McNeely in determining that a warrantless blood draw would not be proper in every DWI case. 27 III. INCONSISTENT APPLICATION UNDER THE TEXAS IMPLIED CONSENT PROVISION

Before McNeely, the implied consent provision of the Texas Transportation Code did not require a consideration of the totality of the circumstances before an officer took a warrantless blood draw. The Transportation Code makes blood draws mandatory when: (1) the DWI suspect operated a vehicle that was in an accident and the officer reasonably believes that either (a) a person died or is going to die, (b) that someone other than the DWI suspect sustained serious bodily harm, or (c) someone other than the DWI suspect has been taken to a medical facility or hospital to treat sustained bodily harm; (2) the suspected DWI was committed with a passenger under the age of fifteen in the vehicle; and (3) the officer obtains reliable information that the DWI suspect has either (a) been previously found guilty or given probation for a DWI with a child passenger, intoxicated assault, or intoxicated manslaughter, or (b) been previously 22.

State v. Fletcher, 688 S.E.2d 94, 97-98 (N.C. Ct. App. 2010) (citing Schmerber California, 384 U.S. 757, 767-71 (1966)) (internal quotations marks omitted); see also State Shriner, 751 N.W.2d 538, 549-50 (Minn. 2008) (holding that the rapid dissipation of alcohol the bloodstream can create a single-factor exigent circumstance), abrogated by Missouri McNeely, 133 S. Ct. 1552 (2013).

23.

State v. Rodriguez, 156 P.3d 771, 780 (Utah 2007).

Id. at 782.

24.

25.

26.

27.

Id. at 781.

Id. at 782.

See McNeely, 133 S. Ct. at 1563.

v. v. in v.

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found guilty or given probation for DWI-or a similar offense in another state-two or more times. 28 This statute was previously construed as conclusively foreclosing the need to obtain a warrant. In Aviles v. Texas, the San Antonio Court of Appeals held that blood evidence was admissible pursuant to the Transportation Code when the defendant had two prior DWI convictions that made the blood draw mandatory.29 However, the U.S. Supreme Court recently vacated and remanded this opinion for further consideration in light of McNeely.30 On reconsideration, the San Antonio court held that section 724.012(b) of the Transportation Code alone is not a valid exception to the warrant requirement. ' It now appears that the Transportation Code is no longer an exception to the Fourth Amendment warrant requirement, and officers must still consider the totality of the circumstances and determine whether factors that create an exigency are present before blood is taken without a warrant. 32 Despite its now more limited applicability, the statute sets forth many careful requirements that must be met before blood evidence may be used against a defendant. For instance, blood samples can only be obtained by a physician, qualified technician, registered professional nurse, licensed vocational nurse, or a licensed or certified emergency medical technician (EMT), and the samples must be taken in a sanitary place.3 4 The Transportation Code also provides that when an officer believes a blood draw is mandatory because a suspect has been previously convicted of DWI with a child passenger, intoxication assault or manslaughter, or DWI on two or more occasions, the information the officer relies on in making this determination must be reliable information from a credible source. 35 These rigid requirements have led to challenges questioning what constitutes a "qualified technician" and a "sanitary place," and whether information

28.

See TEX. TRANSP. CODE ANN. § 724.012(b)(l)-(3) (West 2011).

29.

Aviles v. State, 385 S.W.3d 110, 116 (Tex. App.-San Antonio 2012, pet. refd), vacated, 134 S. Ct. 902 (2014).

30.

Aviles v. State, 134 S. Ct. 902 (2014).

31.

Aviles v. State, 443 S.W.3d 291, 294 (Tex. App.-San Antonio 2014, pet. filed).

32.

See, e.g. id. at 294; Sutherland v. State, 436 S.W.3d 28, 39-41 (Tex. App.-Amarillo 2014, no pet.) ("In consideration of the United States Supreme Court's remand of Aviles for consideration in light of its opinion in McNeely, we see ourselves obligated to undertake an analysis of the totality of the circumstances . . . .").

33.

See TEX. TRANSP. CODE ANN. § 724.017 (West 2011 & Supp. 2014); McGruder v.

State, No. 10-13-00109-CR, 2014 WL 3973089, at *4 (Tex. App.-Waco Aug. 14, 2014, pet. granted) (holding the mandatory draw provision of the Transportation Code did not violate the Fourth Amendment and upholding blood draw taken pursuant to it).

34.

TRANSP. § 724.017(a)-(a-1).

35.

TEX. TRANSP. CODE ANN. § 724.012(b)(3) (West 2011).

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relied upon can still be considered reliable information from a credible source when it later turns out to be false.

A.

Differing Standardsof What Constitutes a "Qualified Technician" and a "SanitaryPlace"Depending on Whether Blood is Drawn Pursuantto a Warrant

In Krause v. State, an EMT at a hospital took the defendant's blood pursuant to a mandatory, involuntary blood draw. 37 However, the defendant argued that his motion to suppress the blood evidence should have been granted because the EMT was not a qualified technician under the Transportation Code.

The Fourteenth Court of Appeals in Houston mentioned the legislative history behind the Transportation Code provision requiring mandatory blood draws, but did not decide the case on these grounds. 3 9 The bill analysis the court considered states, "If emergency medical services personnel (EMS) ... are included as qualified technicians, . . . it could be argued that an ambulance is a 'sanitary place,"' allowing for the possibility of blood draws taken on the side of highways.40 However, contrary to the state's argument, the court believed that the legislature intended to categorically exclude EMS personnel rather than exclude blood draws on the side of highways. 4 1 Accordingly, the court held that EMS personnel were not qualified technicians under the then current Transportation Code.4 2 These rigid requirements led the Austin Court of Appeals in State v.

Laird to find blood evidence inadmissible when the sample was taken without a warrant, in violation of section 724.017 of the Transportation Code.43 The defendant in Laird was faced with serious charges of intoxication manslaughter and felony failure to stop and render aid.4 The defendant refused to allow a physician at the hospital to draw his blood, so officers took the defendant to a nearby fire station where a licensed paramedic forcefully took the blood sample.45 The trial court suppressed the evidence and the court of appeals likewise read the plain meaning of the

36.

See Krause v. State, 368 S.W.3d 863, 869 (Tex. App.-Houston [14th Dist.] 2012), rev'd, 405 S.W.3d 82 (Tex. Crim. App. 2013).

37.

Id. at 864.

38.

Id. 39.

See id. at 869.

40.

See id.

41.

Id. 42.

Id. at 869-70.

43.

State v. Laird, 38 S.W.3d 707, 715 (Tex. App.-Austin 2000, pet. ref'd).

44.

Id. at 710.

45.

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46

statute, at that time, to explicitly exclude EMS personnel from those qualified to draw a suspect's blood and excluded the blood sample from evidence. 47 Therefore, the court affirmed the trial court's suppression of the evidence.4 8 However, in State v. Johnston, the Texas Court of Criminal Appeals found it reasonable for a police officer, who had previously received EMT training, to obtain a sample of the defendant's blood in a police station because the police officer had obtained a warrant. 4 9 The defendant in that case was being charged with a simple DWI that did not involve any accident or any injuries.50 The court found the blood evidence admissible because section 724.017 of the Transportation Code was inapplicable.s' This was because the evidence was obtained under the cloak of a warrant and therefore lowered the threshold of reasonableness under the Fourth Amendment. 52 Accordingly, the court found that the blood test was performed in a reasonable place by reasonable means despite the fact that the blood was obtained forcibly in a police station by an officer.

Therefore, the implied consent provision allows for the possibility of more protection for the drunk driver who commits the egregious offense of manslaughter than the drunk driver who merely commits the misdemeanor offense of DWI. Indeed, the Texas Court of Criminal Appeals recently reviewed one case that led to such a counterintuitive outcome, Krause v.

State. 54

In Krause, the court reversed the Fourteenth Court of Appeals' decision that the plain language of the statute excluded a phlebotomist even though her job title was "EMT"-a title that at the time was excluded from drawing blood under the statute-answering the question of who the legislature had in mind when it required a qualified technician to make a warrantless blood draw.55 The court considered the fact that two courts of appeals had already concluded that phlebotomists were qualified 46.

The Transportation Code was subsequently amended in 2013 by H.B. 434 to include EMTs that are authorized by a medical doctor to take blood specimens. Tex. H.B. 434, 83rd Leg., R.S. (2013); TEX. TRANSP. CODE ANN. § 724.017 (a)(5) (West 2011 & Supp. 2014).

47.

Laird, 38 S.W.3d at 712. But see Krause v. State, 405 S.W.3d 82, 87 (Tex. Crim. App. 2013) (stating Laird's conclusion that a paramedic in a hospital could not be a qualified technician was merely dicta).

48.

Laird, 38 S.W.3d at 715.

49.

See State v. Johnston, 336 S.W.3d 649, 661-62 (Tex. Crim. App. 2011).

50.

Id. at 652; State v. Johnston, 305 S.W.3d 746, 748 (Tex. App.-Fort Worth 2009), rev'd, 336 S.W.3d 649 (Tex. Crim. App. 2011).

51.

Johnston, 336 S.W.3d at 661.

Id. (citing Beeman v. State, 86 S.W.3d 613, 616 (Tex. Crim. App. 2002) (en banc)).

52.

53.

Id. at 662-64.

54.

Krause v. State, 405 S.W.3d 82 (Tex. Crim. App. 2013).

55.

Id. at 83.

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43 1

technicians.56 The court also noted the phlebotomist's qualification and work duties-she had worked at the hospital for six years, her primary duty was drawing blood, she had been trained to do so, and she conducted anywhere from 50-100 blood draws per day-and held that phlebotomists who did not function as EMS personnel, despite their job title, were not excluded from the statute as those qualified to draw blood.

Although the court noted that Laird was not controlling, it also explained why it was not applicable in Krause.8 The court brushed off, as dicta, Laird's suggestion that a paramedic taking a blood draw in a hospital would not be allowed under the statute, and focused more on the distinguishing fact that the blood draw in that case took place on the floor of a fire station. 59 The court noted that the fire station floor was "a place so obviously not sanitary within the meaning of the statute that it would need little discussion to conclude that the statute was not complied with." 6 0 This is unlike the blood draw in Krause that took place in a hospital, which is arguably a sufficiently sanitary place. This distinction-between blood draws taken in ambulances versus hospitals-becomes somewhat illusory when one considers whether a blood draw taken in an ambulance is in fact any less sanitary than a blood draw taken in an emergency room, where the need for prompt, efficient treatment of patients is hardly distinguishable.

This may be the reason Judge Alcala suggested a bright-line rule in her concurring opinion in Krause that would invalidate blood draws taken in "pre-hospital, non-office settings . . because individuals in those settings typically are . . [EMS] personnel," while favoring blood draws taken in a hospital office rather than an emergency room.6 1 Judge Alcala's concern was that in emergency situations or pre-office settings, those individuals drawing blood were typically firefighters or ambulance workers who should not be permitted to do so. 62 However, blood draws taken by individuals outside of emergency rooms for the specific purpose of drawing blood should be permitted, as was the case with the phlebotomist here.63 The legislature appears to have taken the majority's decision and Judge Alcala's concurrence into consideration in amending section 724.017(a) of the Transportation Code.M The provision now explicitly 56.

Id. at 85-86 (discussing Torres v. State, 109 S.W.3d 602 (Tex. App.-Fort Worth, 2003, no pet.) and State v. Bingham, 921 S.W.2d 494 (Tex. App.-Waco 1996, pet. ref d)).

57.

58.

59.

60.

Id. at 86.

Id. at 86-87.

Id. at 87.

Id.

61.

Id. at 90-91 (Alcala, J., concurring) (internal quotation marks omitted).

62.

63.

Id. at 90.

Id. See TEX. TRANSP. CODE ANN.

64.

§ 724.017(a)(5) (West 2011 & Supp. 2014).

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includes emergency medical technicians-intermediates and emergency medical technicians-paramedics that are licensed or certified and that are authorized by a doctor to take blood specimens for their employer.65 This illustrates that the EMT the legislature had in mind is more akin to the phlebotomist who was held to be a qualified technician in Krause. She had received training and schooling to perform blood draws, was employed by a hospital and supervised by medical doctors, and was not involved in emergencies, and therefore, was more likely to be working in sanitary office-like settings. 66 Despite the amendment to the Transportation Code, it appears that the police officer who obtained a number of hours of EMT training in Johnston would still not be qualified to draw blood under the implied consent provision of the Transportation Code.67 The Krause holding and the legislature's response can be seen as an effort to offer more protection to suspects whose blood may be drawn without a warrant under the Transportation Code, ensuring that those authorized to draw blood are qualified and will do so in a safe and sanitary manner. However, this still leaves unanswered why blood draws taken pursuant to a warrant are permissible when taken by unqualified people in unsanitary places.6 8 This raises two pertinent questions. First, does a police or fire station become more sanitary once a magistrate judge has signed off on a warrant to take the blood there, rather than when an officer makes her own determination that the implied consent provision applies and there are sufficient exigent circumstances to justify a warrantless blood draw? And second, does an officer become more qualified as a medical technician once the officer obtains a warrant to conduct a blood draw? 69 These unanswered questions illustrate that inconsistent standards still exist, and that the appropriate standard to apply depends solely on whether the investigating officer has procured a search warrant-a task that has become much easier in recent years in light of technological advancements. 70 The limited holding in Krause did not directly address the issue of what standards are permissible when an officer obtains a blood sample under the cloak of a warrant as the officer did in Johnston, likely leaving those arrested for 65.

Id. § 724.017(c).

66.

See Krause, 405 S.W.3d at 88-89 (Alcala, J., concurring).

67.

See State v. Johnston, 336 S.W.3d 649, 651-52 (Tex. Crim. App. 2011); see also TRANSP. § 724.017(a).

68.

See, e.g., Warren Diepraam, Anatomy of a DWI "No-Refusal Weekend," PROSECUTOR (Sept.-Oct. 2007), http://www.tdcaa.com/node/l 141 (noting that the Harris County no-refusal program involves nurses on hand at the Houston Police Department Central Intoxilyzer Facility to conduct blood draws after a judge signs off on a warrant).

69.

See Johnston, 336 S.W.3d at 651-52.

70.

See H. Morley Swingle & Lane P. Thomasson, Beam Me Up: Upgrading Search Warrants with Technology, 69 J. Mo. B. 16, 16 (2013).

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simple DWIs at the mercy of the arresting officer at a police station with needle in hand.7 1 B.

The Court is not Likely to Suppress Wrongfully ObtainedEvidence Taken Pursuantto Section 724.012(b)(3) (B)

Under section 724.012(b)(3)(B) of the Transportation Code, an officer is required to collect a sample of a suspect's blood when the officer arrests a person for a DWI offense under chapter 49 of the Penal Code, the person subsequently refuses to give the officer a sample, and at the time of the arrest the officer possesses or receives reliable information from a credible source that the person had been previously convicted of DWI on two or more occasions. 72 It may seem that in today's world of speedy technology and instant information, it would be fairly easy for an officer to acquire a suspect's criminal history and determine whether it is necessary to obtain a mandatory blood sample without a warrant. However, mistakes still arise either from an officer's inability to correctly interpret a suspect's criminal record or from an officer relying on a completely incorrect record.74 Alarmingly, courts will still allow blood samples taken in these situations to be used against DWI defendants.

Courts have reached this conclusion by refusing to admit that there had been a violation of the Transportation Code, and finding instead that the officer depended on reliable information from a credible source even though the information later turned out to be incorrect.76 The most recent case to reach this conclusion is State v. Terrazas. There, the officer contacted the El Paso District Attorney's office after the suspect refused to submit to a breath or blood sample, and an unidentified clerk who relied on the District Attorney's Information Management System informed the officer that the suspect had two prior DWI offenses. 78 Upon receiving this information, the officer made no attempt to verify the prior DWI offenses and transported the suspect to a medical center for a mandatory blood

71.

Compare Krause, 405 S.W.3d at 83 (holding that an EMT was a qualified techinician), with Johnston, 336 S.W.3d at 661-62 (holding that a police officer that had "specific training and experience as an EMT" was qualified to draw blood).

72.

TEX. TRANSP. CODE ANN. § 724.012(b)(3)(B) (West 2011).

73.

E.g., Comperry v. State, 375 S.W.3d 508, 511 (Tex. App.-Houston [14th Dist.] 2012, no pet.).

74.

E.g., State v. Flores, 392 S.W.3d 229, 237 (Tex. App.-San Antonio 2012, pet. ref'd).

75.

See, e.g., Comperry, 375 S.W.3d at 518.

76.

See, e.g., Flores, 392 S.W.3d at 237 ("[I]nformation can turn out to be false but still be considered reliable.").

77.

State v. Terrazas, 406 S.W.3d 689, 694 & n.5 (Tex. App.-El Paso 2013, no pet.).

78.

Id at 690 & n.1.

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draw.7 9 When the officer proceeded to take the suspect to the police station, he learned that the information received from the clerk was incorrect because one of the suspect's apparent DWI offenses had been dropped down to a lesser-included offense.80 The trial court granted the defendant's motion to suppress, finding that the information received by the officer was neither credible nor reliable because the officer merely assumed that the previous conviction was correct, and the error was easily detectable. 8 ' The El Paso Court of Appeals disagreed, finding that the officer was not required to take any further steps to determine that the criminal history report was correct, or that the clerk who relayed this information was qualified to do so. 8 2 Therefore, relying primarily on two other decisions from the courts of appeals, the court reversed the suppression of the evidence. 83 The first case relied on by the Terrazas court was Comperry v. State.

In Comperry, the Fourteenth District Court of Appeals in Houston reached the same conclusion where an officer personally received and reviewed the suspect's information from the Texas Crime Information Center (TCIC) database, but misinterpreted one of the suspect's "event cycles" as resulting in a DWI conviction when in actuality it merely resulted in a lesserincluded offense, similar to the suspect in Terrazas.8 4 The trial court denied the defendant's motion to suppress, finding that although the report may have been "confusing and possibly incorrect in the way it [was] displayed," the officer was reasonable in his belief that a mandatory blood draw was necessary.85 The court of appeals affirmed the trial court's refusal to suppress the evidence, rejecting the defendant's argument that the trial court substituted a "reasonable belief' standard for the statutorily required "reliable and credible" standard. 86 The court of appeals held that the officer indeed relied on reliable information from a credible source. 87 The court stated that "there was no reason for [the officer] to question the reliability of the report," and no duty for the officer to investigate further, even after the defendant informed him he had only been convicted of one previous DWI.88

79.

80.

81.

82.

83.

84. pet.). An 85.

86.

87.

88.

Id. at 690.

Id. Id. at 691-92.

Id. at 694.

Id. at 693-95.

Comperry v. State, 375 S.W.3d 508, 511 (Tex. App.-Houston [14th Dist.] 2012, no event cycle is an incident displayed on a suspect's criminal history report. Id. at 510.

Id. Id. at 513-16, 518.

Id. at 518.

Id.

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The other case that Terrazas cited was State v. Flores. In Flores, the

officer also relied on a TCIC database report relayed to him through a dispatch operator.89 However, the report given to the officer was likely of the wrong person entirely-a different person with the same name as the defendant. 90 The San Antonio Court of Appeals held that it was the defendant's burden to prove that there had been a violation of section 724.012(b)(3)(B), and concluded that he failed to show that the information the officer relied upon was unreliable for the sole reason that it ultimately turned out to be false. 9' In acknowledging that the defendant had a common name, the court concluded that that alone did not require the officer to take steps to investigate further in order to corroborate the information he received from dispatch, nor was it evidence that the information the officer received was unreliable. 92 Therefore, the court reversed the trial court's suppression of the defendant's blood evidence. 93 These cases illustrate that an officer's determination of whether section 724.012(b)(3)(B) applies is given extreme deference and is not likely to be questioned by a court even when it turns out to be totally inaccurate. They also beg the question of why a court wholeheartedly accepts the information the officer receives as reliable when the officer is not even sure who he is speaking to, as was the case in Terrazas and Flores.

At first glance it seems unjust that a court would uphold evidence taken pursuant to section 724.012(b)(3)(B), even when the defendant had no previous DWI convictions at all, as was the case in Flores. Luckily the instances of these questionable results should decrease after the U.S Supreme Court vacated a San Antonio Court of Appeals case to make clear that relying on section 724.012(b)(3)(B) alone is no longer justified in light of McNeely. 9 4 However, it is interesting to note that the suspects in these cases were taken to medical centers for the apparently mandatory blood draw.95 Accordingly, although these people convicted of DWI were not afforded the protection of a warrant issuing before they were subjected to a search and seizure of evidence to be found inside their bodies, they were, at least arguably, afforded more protection than those whose constitutional 89.

State v. Flores, 392 S.W.3d 229, 234 (Tex. App.-San Antonio 2012, pet. ref'd).

90.

Id. at 238.

91.

Id. 92.

Id. 93.

Id. at 239.

94.

See Aviles v. Texas, 385 S.W.3d 110 (Tex. App.-San Antonio 2012, pet. ref'd), vacated, 134 S. Ct. 902 (2014).

95.

E.g., State v. Terrazas, 406 S.W.3d 689, 690 (Tex. App.-El Paso 2013, no pet.) (noting that the officer transported the defendant to a medical center for a mandatory blood draw); Flores, 392 S.W.3d at 231 (noting that the deputy took the defendant to a medical center so that a mandatory blood sample could be taken).

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rights are "respected" with a warrant. The blood draws they were subjected to took place in a sanitary environment by a person qualified to do so rather than in a drunk tank by a police officer, as is often the case in blood draws taken pursuant to a warrant.

IV. INCONSISTENT REQUIREMENTS FOR A PROPER WARRANT IN TEXAS

Generally, a warrant will offer a person more protection from an unlawful search and seizure than a warrantless one. However, because of inconsistencies in the warrant application process, it is doubtful if this proposition is always true. In Texas, if any person suspected of DWI refuses to submit a breath sample, an officer may request a search warrant to obtain a sample of the suspect's blood. 96 The search warrant is not valid unless an officer submits a sworn affidavit setting forth sufficient facts that establish probable cause, including: (1) that a specific offense that has been committed, (2) that the specifically described property or items that are to be searched for or seized constitute evidence of that offense or evidence that a particular person committed that offense, and (3) that the property or items constituting evidence to be searched for or seized are located at or on the particular person, place, or thing to be searched. 9 7 Texas courts have pronounced their preference for searches by the command of a warrant under the Fourth Amendment because it requires "that those inferences [drawn by the investigating officer also] be drawn by a neutral and detached magistrate instead of being judged by the officer engaged in the often competitive enterprise of ferreting out crime."98 However, inconsistencies still arise as courts determine whether the methods officers take in obtaining the warrant are proper. For instance, issues that have arisen include whether the affidavit presented to the magistrate must be presented in person, 99 what constitutes an oath or the act of swearing before the magistrate, 1oo and what level of factual specificity

must be presented to support a probable cause determination.'

Also,

courts have consistently justified their preference for searches and seizures pursuant to a warrant because of the extra level of protection citizens receive when a probable cause determination is not only made by a police 96.

TEX. CODE CRIM. PROC. ANN. art. 18.01(j)(2) (West 2005 & Supp. 2014).

97.

Id. art. 18.01(c).

98.

Rodriguez v. State, 232 S.W.3d 55, 59 (Tex. Crim. App. 2007).

99.

Clay v. State, 391 S.W.3d 94, 96 (Tex. Crim. App. 2013).

100.

Smith v. State, 207 S.W.3d 787, 792 (Tex. Crim. App. 2006); Hughes v. State, 334 S.W.3d 379, 388 (Tex. App.-Amarillo 2011, no pet.).

101.

Farhat v. State, 337 S.W.3d 302, 309 (Tex. App.-Forth Worth 2011, pet. ref d).

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officer but also by a neutral and detached magistrate.' 0 2 However, this rationale is undermined when courts rely on the personal familiarity between the officer and the magistrate to justify their determination that the warrant procedure was proper.' 3 There will also be inconsistent outcomes in determining which warrants are proper because of the jurisdictional limitations of statutory county court judges. 104 A.

Telephonic Warrants: No CorporealPresenceRequirement

In Clay v. State, the Texas Court of Criminal Appeals resolved a split among the appellate courts of Texas and held that the Fourth Amendment did not contain a face-to-face or physical presence requirement between the affiant and the person administering the oath under the facts of that case. os Relying much on its previous holding in Smith v. State, which held that the officer's failure to sign the warrant did not render it invalid, 0' 6 the court held that administering the oath telephonically also did not render the warrant invalid.' 07 In Aylor v. State, the Tyler Court of Appeals had reached the opposite conclusion, finding that because Article 18.01 of the Texas Code of Criminal Procedure contained a physical presence requirement, the warrant was improper and resulted in suppression of the blood evidence against the defendant.' 09 The court found that dicta by the Court of Criminal Appeals in Smith required physical, personal presence before either a magistrate or a person authorized to administer oaths." 0 However, Clay laid this dispute to rest and made clear that warrants obtained via telephone could satisfy the "presented" requirement of Article 18.01.1" Looking at the particular language of the Code, the Texas Court of Criminal Appeals concluded that Article 18.01(b) does not always require that the affidavit be presented to the magistrate." 2 Rather, the court found that when sufficient care is taken to preserve the same or an equivalent Rodriguez, 232 S.W.3d at 59.

102.

103.

See Swenson v. State, No. 05-09-00607-CR, 2010 WL 924124, at *3 (Tex. App.Dallas Mar. 16, 2010, no pet.) (mem. op., not designated for publication).

104.

See Sanchez v. State, 365 S.W.3d 681, 686-87 (Tex. Crim. App. 2012).

105.

Clay v. State, 391 S.W.3d 94, 100 (Tex. Crim. App. 2013).

106.

Smith v. State, 207 S.W.3d 787, 792-93 (Tex. Crim. App. 2006).

107.

Clay, 391 S.W.3d at 103-04.

108.

TEX. CODE CRIM. PROC. ANN. art. 18.01(a) (West 2005 & Supp. 2014).

109.

Aylor v. State, No. 12-09-00460-CR, 2011 WL 1659887, at *4 (Tex. App.-Tyler Apr. 29, 2011, pet. ref'd) (mem. op., not designated for publication), overruled by Clay v. State 391 S.W.3d 94 (Tex. Crim. App. 2013).

110.

Id. 111.

Clay, 391 S.W.3d at 103-04.

112.

Id. at 103.

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solemnizing function of the corporal presence requirement, and sufficient facts are presented to show probable cause exists, a magistrate may issue a warrant.' 13 The court, therefore, concluded that the facts could be presented to the magistrate in any way, including over the phone, as long as they were done so "under the official purview of that issuing magistrate."1 1 4 The court also relied substantially on Smith to reach this decision, as well as the fact that Rule 41 of the Federal Rules of Criminal Procedure (recodified in Federal Rule of Criminal Procedure 4.1(a)) expressly allows obtaining warrants via telephone.115 In Smith, the Texas Court of Criminal Appeals upheld a search warrant supported by an affidavit that lacked a signature because there was other evidence that the officer did indeed take an oath.1 16 The court in Clay rejected the defendant's argument that this holding nevertheless required that the affidavit be presented "before the issuing magistrate," because "before" means in the corporal presence of another.1 17 Although the court agreed with the defendant that a broad recognition of the validity of telephonic oaths should be left to the legislature, the court nonetheless concluded that as the statute currently read, it did not necessarily require corporal presence.118 Following Smith's call for flexibility in the face of technological advances, the court asked whether, "[i]n the name of flexibility," it could reasonably be said that an oath administered over the phone satisfied the requirements of the Code and answered in the affirmative.11 9 In Clay, however, the court cautioned that search warrants sworn over the phone may not always be proper, noting that "[u]nder these circumstances," the oath administered over the telephone was proper.120 The court was careful to point out that because the officer and the judge recognized each other's voices when the oath was made, the warrant application was "properly solemnized," and because it was subsequently reduced to writing, it was "properly memorialized."l 2 1 However, by emphasizing this point, the court suggested that there could be situations where warrants sworn telephonically were not proper.

113.

Id. 114.

Id. (internal quotation marks omitted).

115.

See id. at 97-98 & n.4.

116.

Smith v. State, 207 S.W.3d 787, 792-93 (Tex. Crim. App. 2006).

117.

Clay, 391 S.W.3d at 98-99, 103 (quoting Smith, 207 S.W.3d at 792) (internal quotation marks removed).

118.

Id. at 98, 103-04.

119.

Id. at 98-99.

Id. at 104.

120.

Id. 121.

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The Oath, Signature, or Lack ThereofRequirement

In Smith, the Texas Court of Criminal Appeals upheld a search warrant supported by an affidavit that lacked a signature because the court reasoned that it was the act of swearing and the taking of the oath that was essential to the validity of the affidavit, and neither Article 18.01 nor the Constitution specifically required a signature.1 22 However, as already indicated by the Texas Court of Criminal Appeals's most recent decision in Clay, other courts of appeals have interpreted Smith's holding to allow oaths to be administered in a variety of ways. 12 3 For instance, the Amarillo Court of Appeals in Hughes v. State denied the defendant's challenge to a warrant issued after being sworn in front of a notary public rather than in front of the magistrate. 124 Although the defendant also attempted to challenge the oath as being sworn over the phone, the court avoided the issuel2 and quickly disposed of it because it lacked support in the record. 126 The court held that an affidavit was sworn under oath when a fellow officer, acting in the capacity of a notary public, administered the oath to the affiant officer. 127 In light of this holding, and with knowledge of how relatively simple it is to become a notary public, there is a substantial chance that the purpose of swearing an oath-to solemnize the submission of the affidavit, which ensures that the officer respects her moral duty so the magistrate can rely on the validity of facts the officer presents in reaching a probable cause be broken down. While appellate courts have determination1 2 8 -will understood that their "duty is not to act as a rubber stamp for the magistrate or the trial court," 29 it is less likely that police officers, acting as notary publics, will understand that their duty is not to act as a rubber stamp for what their fellow affiant officer swears to.

C.

Specificity ofFacts that Support a Probable Cause Determination

One place where defendants have been successful in challenging search warrants is in the sufficiency of facts set forth in the warrant. In

122.

Smith v. State, 207 S.W.3d 787, 792 (Tex. Crim. App. 2006).

See, e.g., discussion supra Part IV.A. 123.

Hughes v. State, 334 S.W.3d 379, 388-89 (Tex. App.-Amarillo 2011, no pet.).

124.

125.

The court's avoidance was perhaps because it was uncertain if affidavits sworn over the phone would be valid in light of the conflict between the Aylor and Clay courts when this opinion was decided.

126.

Hughes, 334 S.W.3d at 388.

127.

Id. at 388-89.

See Clay v. State, 391 S.W.3d 94, 99-100 (Tex. Crim. App. 2013).

128.

129.

Id. at 385 (citing Flores v. State, 319 S.W.3d 697, 702 (Tex. Crim. App. 2010)).

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these cases, the officers either laid out facts without sufficient specificity to support a probable cause finding' 30 or mistakenly left out a particular fact, such as the date or time.131 In either case, there are still inconsistencies concerning what courts consider to be reasonable inferences that support the magistrate's probable cause finding and inferences that amount to reading facts into the affidavit.

In Farhatv. State, the Forth Worth Court of Appeals held that the only way to make inferences that would support a probable cause finding was to read additional facts into the affidavit.' 3 2 After the defendant in that case had been stopped for minor traffic violations and driving somewhat suspiciously, the officer asked him to step out of his car for a field sobriety test.1 33 The defendant refused and was arrested. 134 The officer then obtained a search warrant based on the following facts: the defendant committed minor traffic violations, such as driving too slowly, driving in the wrong lane for a short period, and using the wrong turn signal; the officer saw two pill bottles in the console; and the defendant refused the sobriety tests.135 The court concluded that the affidavit, devoid of any of the officer's specific personal observations, could not support a reasonable inference that the defendant committed the offense of DWI or that evidence of intoxication existed in his blood.1 3 6 Accordingly, the search warrant was invalid, and the court granted the defendant's motion to suppress. 137 In Criderv. State, the Texas Court of Criminal Appeals also refused to make such a strained inference to support a probable cause finding when the officer failed to include the time in which he stopped the defendant.' 38 In this case, the court considered whether the facts supporting the search warrant had become stale because of the time that elapsed between the occurrence of the events set out in the affidavit and the time the search warrant was issued.1 39 The officer established in the affidavit that he stopped the defendant on June 6, 2008, but failed to indicate a specific time or any other general indication of the time of day.1 40 The magistrate nonetheless issued a warrant to take a sample of the defendant's blood at

130.

131.

132.

133.

134.

135.

136.

137.

138.

139.

140.

E.g., Farhat v. State, 337 S.W.3d 302, 309 (Tex. App.-Fort Worth 2011, pet. ref'd).

E.g., Crider v. State, 352 S.W.3d 704, 705-06 (Tex. Crim. App. 2011).

Farhat,337 S.W.3d at 309.

Id. at 305.

Id. Id. at 306-07.

Id. at 307.

Id. at 310.

Crider v. State, 352 S.W.3d 704, 705 (Tex. Crim. App. 2011).

Id. at 707.

Id. at 706.

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1:07 a.m. on June 7, 2008.141 After considering the amount of time alcohol will remain in an average person's blood,1 4 2 the court concluded that "[t]he longer the time gap between the initial stop and the eventual signing of the warrant, the less likely that evidence of intoxication would still be found in [the defendant's] blood."1 4 3 Accordingly, because the gap was at least an hour, but could have been as much as twenty-five hours, the court held that the four corners of the affidavit failed to contain sufficient facts to support a probable cause determination that evidence of intoxication would still be found in the defendant's blood. 144 These decisions illustrate a contrast between when courts follow the mandate to review the magistrate's decision to issue a warrant using a highly deferential, common-sense manner' 45 and when courts refuse to make such common-sense assumptions. It seems as though the linchpin is the level of specificity of details contained in the affidavit--courts are unwilling to infer that a pill bottle contained pills, or that a stop happened at night rather than in the morning, without even infinitesimal facts to support such findings.1 4 6 Accordingly, two similarly situated DWI suspects may receive different outcomes in their cases depending on whether the officer involved included sufficient facts in the affidavit to support a magistrate's probable cause determination that a sample of a suspect's blood will reveal evidence of intoxication. This determination requires that the facts stated in the affidavit must be sufficient to establish a fair probability that evidence of a crime will be found without distorting common sense or reading additional facts into the affidavit.147 D.

PersonalFamiliarityBetween the Affiant and the Magistrate

One reason for the presumption of constitutionality for searches obtained through a warrant is because it allows for informed and deliberate determinations to be made by a neutral magistrate rather than the hurried

141.

Id. 142.

The court stated that it takes the average person at least four hours for a blood-alcohol level of 0.08% to drop to zero. Id. at 708-09. But see Gerard J. Donnellan, Comment, Driving with 0.10% Blood Alcohol: Can the State Prove It?, 16 U.S.F. L. REV. 817, 823 (1982) (arguing that the commonly used elimination rate of 0.015% to 0.020% BAC per hour may be incorrect).

143.

Crider, 352 S.W.3d at 710.

144.

Id. at 710-l1.

145.

See Rodriguez v. State, 232 S.W.3d 55, 59 (Tex. Crim. App. 2007).

146.

But see State v. Jordan, 342 S.W.3d 565, 571 (Tex. Crim. App. 2011). The Jordancourt upheld the issuance of the search warrant, even though the officer failed to write a time of the offense, on the ground that the affidavit stated that the defendant committed the offense on the same day the warrant was issued. Id. In doing so, the court noted that the warrant was issued at 3:54 a.m., meaning that less than four hours could have elapsed since the offense. Id. See Rodriguez, 232 S.W.3d at 64.

147.

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'

actions of zealous officers engaged in the "competitive enterprise of ferreting out crime." 1 4 8 However, courts have consistently overlooked this reasoning as they factor not neutrality, but rather familiarity between the officers and the magistrates, into their determinations of the validity of the warrant.

In Clay, the Texas Court of Criminal Appeals held that the telephonic oath was valid because the officer and judge recognized each other's voices.1 49 This provided "strong indicia of truthfulness, trustworthiness, and reliability" in that it called on the officer's "sense of moral duty to tell the truth and instill[ed] in him a sense of seriousness and responsibility."s0 However, the court failed to consider how this personal familiarity diminished the neutral role of the magistrate in making the probable cause determination and how personal familiarity made it more likely that the magistrate would be merely ratifying "the bare conclusions of others."1 5 When officers and judges share this level of familiarity, the ratification that courts have cautioned against is much more likely to occur.

Further, in Swenson v. State, a case decided before Clay that similarly avoided the telephonic-oath question, the Dallas Court of Appeals upheld, under the "good faith exception," an affidavit in support of a search warrant that was sworn to over the phone. 5 2 Again, the court relied on the magistrate's recognition of the officer's voice in concluding that the officer acted in good faith reliance on the magistrate's probable cause determination. 5 3 However, here, the court did at least point out that the defendant failed to question the integrity and neutrality of the magistrate issuing the warrant, 5 4 which is perhaps the reason that the court chose not to raise the issue. This statement by the court suggests that the aspect of familiarity may at times make the probable cause determination more questionable rather than more reliable. Furthermore, the ability to rely on personal familiarity will also vary depending on the size of the police force or the number of magistrates available in the jurisdiction in which the suspect is stopped. For example, it may be easier to obtain a warrant for blood evidence in lightly populated jurisdictions where personal familiarity between judges and officers is more likely than in large cities.

148.

Id. at 59 (quoting Johnson v. United States, 333 U.S. 10, 13-14 (1948)).

149.

Clay v. State, 391 S.W.3d 94, 103 (Tex. Crim. App. 2013).

150.

Id. (citing Smith v. State, 207 S.W.3d 787, 790 (Tex. Crim. App. 2006)).

151.

See Rodriguez, 232 S.W.3d at 61 (quoting Johnson v. State, 803 S.W.2d 272, 288 (Tex. Crim. App. 1990) (en banc), overruled en banc by Heitman v. State, 815 S.W.2d 681 (Tex. Crim.

App. 1991)); see also Illinois v. Gates, 462 U.S. 213, 239 (1983).

152.

Swenson v. State, No. 05-09-00607-CR, 2010 WL 924124, at *2 (Tex. App.-Dallas Mar. 16, 2010, no pet.) (mem. op., not designated for publication).

153.

Id. at *3.

154.

Id. at *4.

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The JurisdictionalRequirement: Different GeographicSizes and Availability ofManpower

Jurisdiction will not only play a role in the likelihood of personal familiarity between the arresting officer and the issuing magistrate but it will also play a role in determining the validity of the warrant on its face. In Sanchez v. State, the Texas Court of Criminal Appeals held that a statutory county court from Montgomery County lacked jurisdiction to issue a search warrant for an individual "to be found in Harris County," and therefore was invalid. "' While this holding may not impede efforts to continue the practice of obtaining warrants for blood in counties as big as Harris or Tarrant, the effect in smaller counties may be more substantial. Officers conducting investigations in smaller counties with fewer qualified magistrates to approve search warrant affidavits will most likely not go through the trouble of obtaining a warrant before obtaining a blood sample for their DWI investigations. 156 For instance, in a smaller community there is likely only to be one judge that serves two or more counties, making it difficult to obtain a warrant due to the slow turnaround time for warrant applications. 15 7 This also makes it less likely that small counties will have "No-Refusal" programs similar to those in large counties.158 Further, in small counties where No-Refusal programs are not implemented, and it is more difficult to obtain a warrant quickly, the U.S. Supreme Court may allow officers to dispense with a warrant altogether.1 5 9 The court noted in McNeely that there may be times when a warrantless blood draw is justified-for instance, in a rural area where obtaining a speedy warrant is not possible.' 60 However, this possibility may be read as mere dicta rather than part of McNeely's central holding.

Sanchez v. State, 365 S.W.3d 681, 686 (Tex. Crim. App. 2012).

155.

Zack Wavrusa, Not a Single Blood Search Warrant, PROSECUTOR (Mar.-Apr. 2012), 156. http://www.tdcaa.com/joumal/not-single-blood-search-warrant.

Jamie Balagia, Knowledge Is Power: What Today's DWI Defense Attorneys Need to 157.

Know to Win Trials Tomorrow, in STRATEGIES FOR DEFENDING DW1 CASES IN TEXAS: LEADING LAWYERS ON UNDERSTANDING DW1 AND DUI CHARGES, ANALYZING TEST RESULTS, AND

DEVELOPING NEGOTIATION STRATEGIES 53 (2014 ed. 2013), available at 2013 WL 6142743, at *2.

158.

See id.; Wavrusa, supra note 156 (discussing the necessity of pulling together the efforts of few prosecutors and judges for small county No-Refusal programs).

See Missouri v. McNeely, 133 S. Ct. 1552, 1568 (2013) (noting that an ordinary traffic 159. stop may present factors making a warrantless blood draw justified, including whether police officers are able to obtain a warrant expeditiously if there are no warrant procedures in place or magistrates available).

Id. 160.

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For all of these reasons, whether people suspected of DWI in Texas will have blood evidence used against them pursuant to a lawfully executed warrant will vary depending on the particular officer who stops them and the particular place in which they are stopped.

V.

CONSTITUTIONAL IMPLICATIONS BEYOND THE FOURTH AMENDMENT

Blood draws potentially implicate constitutional rights other than the Fourth Amendment's protection against unreasonable search and seizure. It has been argued that they also implicate the Fifth Amendment right against self-incrimination and the Sixth Amendment right to confront witnesses. In Schmerber, the U.S. Supreme Court held that withdrawing the defendant's blood and admitting the blood analysis into evidence did not violate the defendant's Fifth Amendment privilege against self-incrimination. 16 ' In that case, the defendant sustained injuries in an automobile accident and was transported to a hospital.1 6 2 The officer investigating the accident directed a physician at the hospital to obtain a sample of the defendant's blood. 163 The Court held that the blood draw did not compel the defendant to be a witness against himself because the evidence was not considered "testimonial" and was not evidence relating to any communicative act or writing by the defendant.1 64 However, in the recent decision of Bullcoming v. New Mexico, the Supreme Court held that blood evidence, when presented through an analyst's report, was testimonial.1 6 5 The suspect's blood was taken pursuant to a warrant, and the sample was then sent to the Scientific Laboratory Division of the New Mexico Department of Health.1 66 A blood analyst completed a report that was admitted against the defendant in his trial for aggravated driving while intoxicated.167 However, this particular analyst who completed the report of defendant's blood had been placed on unpaid leave and was unavailable to testify.1 68 The defendant objected to the admission of this evidence as a violation of the Confrontation Clause-a right to confront adversarial witnesses guaranteed by the Sixth Amendment.' 69 After a series of appeals through the New Mexico courts, the U.S. Supreme Court reiterated its prior 161.

162.

163.

164.

165.

166.

167.

168.

169.

Schmerber v. California, 384 U.S. 757, 767, 771 (1966).

Id. at 758.

Id. Id. at 765.

Bullcoming v. New Mexico, 131 S. Ct. 2705, 2710, 2716 (2011).

Id. at 2710.

Id. at 2712.

Id. at 2711-12.

Id. at 2712.

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determination 7 e that forensic reports available for use at trial are testimonial statements and the certifying analyst is a witness for purposes of the Sixth Amendment. "' Therefore, the defendant's blood evidence was inadmissible since the analyst was unavailable, and the defendant had no prior opportunity to cross-examine that witness. 17 2 This holding is another opportunity for inconsistent treatment for the same offense of DWI because introduction of blood evidence will largely depend on the prosecution's ability to procure the in-court testimony of the particular blood analyst who performed the report. While the Supreme Court rejected the contention that this would unduly burden prosecutors since most DWI cases are resolved through guilty pleas," 3 there is a possibility that for the small percentage of DWI defendants who choose to take their case to trial, there will be inconsistent outcomes depending on whether the blood evidence passes the test under the Confrontation Clause.

This holding also seems to conflict with Schmerber, where the Court held that the Fifth Amendment is not implicated in blood searches because blood is of a nontestimonial character.' 74 If there is no way to introduce blood evidence other than through the testimonial forensic report, then it follows that a blood draw will always amount to self-incriminating testimony compelled from the defendant in violation of the Fifth Amendment. Interestingly, the Court in Bullcoming reached its conclusion that the report-rather than the blood evidence itself-was testimonial without any reference whatsoever to the Court's earlier characterization of blood evidence in Schmerber.'"5 However, it is evident that the Court has drawn a very thin line between the Fifth and Sixth Amendments, and this not-so-bright line is likely to be challenged in the future.

Other constitutional challenges are also likely as No-Refusal programs continue to grow.1 7 6 For large counties such as Harris County, No-Refusal is not limited to specific weekends or holidays such as Labor Day and New Year's Eve. Since 2009, officers have been able to obtain a warrant to 170.

In the prior case of Melendez-Diaz v. Massachusetts, the Supreme Court held that the forensic reports at issue were "testimonial statements." Melendez-Diaz v. Massachusetts, 557 U.S. 305, 308-10 (2009).

Bullcoming, 131 S. Ct. at 2717 (quoting Melendez-Diaz, 557 U.S. at 311).

171.

Id. at 2710-11.

172.

Id. at 2718-19; see also Richard D. Friedman, Confrontationand Forensic Laboratory 173.

Reports, Round Four, 45 TEX. TECH L. REV. 51, 77 (2012) (arguing that the additional cost of requiring lab analysts to testify does not significantly impede prosecutors' ability to introduce evidence).

See Schmerber v. California, 384 U.S. 757, 764-65 (1966).

174.

175.

See Bullcoming, 131 S. Ct. at 2717.

176.

See Kiah Collier, DWI Offenders Could Face the Bill for Blood Tests, Hous. CHRON.,

http://www.houstonchronicle.com/news/politics/houston/article/DWl-offenders-could-face-billfor-blood-tests-5136983.php (last updated Jan. 12, 2014, 9:19 PM).

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failure to do so. In State v. Johnston, for instance, the Texas Court of Criminal Appeals upheld the forcible blood draw by a police officer at a police station despite the fact that he failed to question the DWI suspect about her medical history, or whether she was taking any medications or blood thinners.' 8 9 The courts should take this failure into serious consideration because of the detrimental consequences it could have for a citizen suspected of DWI. Instructing officers to determine whether a blood draw is appropriate by asking suspects about their medical history before proceeding with the draw is a minimally burdensome task. This minimally burdensome task should be taken every time an officer takes a blood sample pursuant to a warrant because it can protect citizens in those rare circumstances where forcing a needle into their arm will be much more than minimally invasive.

Moreover, under the approach suggested by Judge Alcala, limiting blood draws to hospital-office settings would make it more likely that they would be performed by medically qualified technicians who have already been trained to ask questions about patients' medical history.

Beyond the consistency necessary to establish the qualifications of blood-draw technicians. and the location in which such blood draws are permissible, there is a further need for consistency in the process of obtaining a warrant. This objective should answer questions that still arise, such as when must an officer request a warrant; if an officer must apply for a warrant, what oaths or affirmations are acceptable; which inferences will be acceptable as common-sense determinations and which will amount to impermissibly writing in facts; whether judges should recuse themselves when they are personally familiar with the arresting officer or suspect; and which types of judges in which jurisdictions are authorized to sign off on warrants?

One issue that is easily resolved is the problem of personal familiarity between the magistrate and investigating officer. The Texas Code of Judicial Conduct should clearly state that a magistrate who issues a warrant based on personal familiarity with the investigating officer violates the judicial rules of ethics. Canon Three of the Texas Code of Judicial Conduct already provides that judges should execute their duties impartially and diligently.1 90 It further provides that judges should recuse or disqualify themselves as appropriate, although it does not seem that most magistrate judges have adhered to this rule in the cases considered by the Texas

189.

State v. Johnston, 336 S.W.3d 649, 651-52, 654-55, 664 (Tex. Crim. App. 2011).

190.

TEX. CODE JUD. CONDUCT, Canon 3, reprinted in TEX. GOv'T CODE ANN., tit. 2, subtit. G., app. B (West 2013).

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appellate courts. Indeed, the failure to take such action has not been questioned by these courts.

However, if it became common practice for magistrates to recuse when their impartiality may reasonably be called into question, the whole system of No-Refusal weekends with rubber-stamped warrants would be within the bounds of what the Fourth Amendment intended and would return some solemnity to the process.'91 It is difficult to honor what the Fourth Amendment intended-the duty to administer warrants seriously and respectfully' 9 2-in today's fast-paced, technologically advanced world.

However, only magistrates have the power to retain utmost impartiality and respect in performing their duties, and only they have the power to ensure that individuals' constitutional rights are protected while at the same time protecting the public from the growing problem of DWI. VII. CONCLUSION The U.S. Supreme Court's ruling in Missouri v. McNeely addressed the narrow issue of warrantless blood draws but left a lot of questions unanswered. As this Comment illustrates, the opportunity for inconsistent application of the law in Texas is widespread when "special facts" exist that justify a warrantless blood draw under the Texas Transportation Code,1 93 and even when blood samples are obtained pursuant to a warrant. As the law currently stands, the outcome for a driver arrested for DWI will ultimately be the luck of the draw, putting every driver's fate in the hands of the arresting officer, the magistrate who signs or refuses to sign the warrant, the analyst who draws the blood and writes a report, and the prosecutors and their ability to locate that analyst.1 94 Everyone should be equal in the eyes of the law, but as DWI currently law stands in Texas, that is simply not the case.

Kendall Valenti*

191.

See, e.g., Esther Robards-Forbes, Records Show San Marcos Attorney Released After Warrant Declined Had PriorDWI Arrest, AUSTIN AM.-STATESMAN, Sept. 12, 2013, 7:23 PM,

http://www.mystatesman.com/news/news/local/records-show-san-marcos-attorney-released-afterwa/nZwGF/.

192.

Clay v. State, 391 S.W.3d 94, 100 (Tex. Crim. App. 2013).

193.

But cf Douds v. State, 434 S.W.3d 842, 850-51 (Tex. App.-Houston [14th Dist.]

2014, pet. granted) (en banc) (finding that the blood draw taken pursuant to the Transportation Code did violate the Fourth Amendment because no emergency justified taking the sample without a warrant even though the prerequisites for a mandatory blood draw were met).

194. See supra Parts II-IV. * Judicial Law Clerk at the Texas Supreme Court; J.D., summa cum laude, South Texas College of Law, May 2014.