Consent To Trial Before Magistrate Judge May Be Implied

The U.S. Supreme Court has relaxed the requirement that consent to trial before a Magistrate Judge under 28 U.S.C. § 636(c) and Fed. R. Civ. P. 73(b) must be in writing. In Roell v. Withrow, 538 U.S. 580 (Apr. 29, 2003), the Court held that the consent necessary for jurisdiction before a full-time Magistrate Judge may be inferred where the litigant was aware of the need for consent and the right to refuse it, but voluntarily appeared and tried the case before the Magistrate Judge. This decision overrules circuit decisions which had required written consent.

Supplemental Jurisdiction Tolling Provision Is Constitutional

If a federal court declines to exercise its supplemental jurisdiction over state claims, the plaintiff may refile those claims in state court. To prevent the expiration of statutes of limitations governing such claims while pending in federal court, 28 U.S.C. § 1367(d) requires state courts to toll the local limitations period. In Jinks v. Richland County, South Carolina, 538 U.S. 456 (Apr. 22, 2003), the U.S. Supreme Court rejected the argument that the statute was an unconstitutional intrusion into states’ powers.

Foreign Sovereign Removal Limited To Direct Majority Ownership

Civil actions may be removed under 28 U.S.C. § 1441(d) if a defendant is an instrumentality of a foreign state, defined as an entity “a majority of whose shares” are “owned by a foreign state.” In Dole Food Co. v. Patrickson, 538 U.S. 468 (Apr. 22, 2003), the U.S. Supreme Court clarified that the foreign state must directly own a majority of the defendant’s shares, and that indirect ownership through subsidiaries is insufficient. The Court broadly described veil-piercing as a “rare exception,” stressing that “[i]n issues of corporate law structure often matters.”

Federal Rules Changes Approved, Effective 12/1/2003

The U.S. Supreme Court has approved and sent to Congress amendments to Federal Rule of Civil Procedure 23, relating to class actions. The amendments spell out requirements for the contents of notice to a Rule 23(b)(3) class, describe procedures for settlement approval, establish standards for the appointment of class counsel, and set procedures for fee petitions in class actions. Unless the subject of a legislative veto, the amendments will take effect December 1, 2003.

In addition, the U.S. Supreme Court also has approved changes to rules of civil procedure and evidence governing jury instructions and the use of masters. These amended rules are Fed.R.Civ.P. 51, 53, 54 and 74A, and Fed.R.Evid. 608(b). Absent Congressional action, all of these changes will take effect on December 1, 2003 in pending cases, unless not “just and practicable,” as well as in all new cases.

Click here to see the changes to the Federal Rules of Civil Procedure in non-redline and redline form with commentary, and here to see the changes to the Federal Rules of Evidence in non-redline and redline form with commentary.

Punitive Damages Exceeding Single-Digit Multiplier Likely Excessive

In State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408 (Apr. 7, 2003), the U.S. Supreme Court revisited the issue of when an award of punitive damages is unconstitutionally excessive, and, among other things, limited the types of reprehensible conduct that may be considered in calculating a punitive damages award. Amplifying its decision in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), the Court held that while a punitive damage award is to be based on the degree of reprehensibility of the defendant’s conduct, the disparity between the actual or potential harm and the punitive damage award, and the difference between the punitive damage award and available civil penalties, a court may not consider dissimilar acts or punish a defendant for conduct directed at another person in another state unless that other plaintiff is joined and an appropriate choice of law analysis applied. The Court also reiterated that “few [punitive] damage awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” State Farm Mutual, 538 U.S. at 425.