Institutional practice, procedural uniformity, and as-applied challenges under the Rules Enabling Act.

Author:Struve, Catherine T.

INTRODUCTION I. SHADY GROVE ON As-APPLIED CHALLENGES II. As-APPLIED CHALLENGES AND PRIOR PRACTICE A. Sibbach (and Schlagenhauf) and Hanna B. Sub-Rule As-Applied Review C. State-Specific As-Applied Review 1. Civil Rule 23.1 2. Civil Rule 15(c) 3. Civil Rule 41 4. Other Rules III. BENEFITS AND COSTS OF As-APPLIED REVIEW A. As-Applied Review in Other Contexts B. Possible Benefits C. Possible Costs 1. Uncertainty 2. Difficulty 3. Disuniformity D. Tolerating Disuniformity 1. Federal Court Examples a. Rules that Incorporate State Law b. Rules that Grant Discretion c. Local Federal Rules d. Erie Questions Not Controlled by a Federal Provision 2. State Court Examples a. Reverse-Erie b. Independent and Adequate State Law Grounds CONCLUSION INTRODUCTION

As others have observed, the Supreme Court's decision last Term in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co. (1) settles little with respect to the Erie (2) doctrine. (3) For the purposes of diversity actions in federal courts, the Court held, Federal Rule of Civil Procedure 23 trumps a New York state statute--New York Civil Practice Law and Rules section 901 (b)--barring the use of class actions "to recover a penalty, or minimum measure of recovery created or imposed by statute." (4) But beyond that, members of the Court agreed only at a high level of generality about how to interpret the federal Rule. And there is no majority opinion explaining why Rule 23, construed to govern the question in Shady Grove, is valid.

If the Shady Grove opinions settled little, they raised a host of interesting questions. Like Professor Ides, (5) I will focus in this Article on the debate between the plurality and Justice Stevens concerning the availability of as-applied challenges to the validity of rules promulgated under the Rules Enabling Act. (6) And like Professor Ides, I will argue that Justice Stevens has the better of the argument. Having had the benefit of reading a draft of Professor Ides's article after I researched this Article but before I drafted it, I will try to minimize the extent to which I duplicate his insightful and persuasive arguments.

Part I of this Article frames the question by describing the dispute, in Shady Grove, over facial and as-applied challenges under the Rules Enabling Act. Part II reviews existing evidence for the possibility of as-applied Enabling Act challenges. Although the Supreme Court, famously, has never invalidated a rule under the Enabling Act, some statements by rulemakers and by Justices support the possibility of as-applied challenges to rule validity, and both the Court and lower federal courts have occasionally entertained such challenges. Parts I and II introduce a distinction between two sorts of as-applied review, which I will call (respectively) sub-rule as-applied review and state-specific as-applied review. The crux of the dispute in Shady Grove concerned the legitimacy of state-specific as-applied review; sub-rule as-applied review, by contrast, seems less controversial.

Part III sets out to assess the costs and benefits of as-applied Enabling Act review, with a particular focus on state-specific as-applied review. Subpart III.A sets the stage by briefly reviewing discussions of facial and as-applied challenges in other contexts. The choice among facial review, as-applied review, and a combination of the two appears to depend on both the institutional context and the nature of the constraint that forms the basis for the review. In subparts III.B and C, I focus on the benefits and costs of as-applied review in the particular context of Enabling Act review of federal rules. Subpart Part III.B suggests that though the rulemakers are attentive to the limits imposed by the Enabling Act, they may not always be able to foresee a rule's future effects on substantive rights. Admitting the possibility of the occasional as-applied challenge to a rule's validity permits questions of a rule's effect on substantive tights to develop in the context of concrete cases, before judges who are likely to have some familiarity with the relevant substantive law concerns. The information developed in such litigation can inform both a court's evaluation of the rule's application in the case before it and future deliberations of the rulemakers.

Subpart III.C considers the Shady Grove plurality's arguments against permitting state-specific as-applied challenges to federal rules. As Justice Scalia pointed out, such challenges can cause uncertainty, can be difficult to resolve, and can impair the nationally uniform application of the federal rules. But--cognizant of Justice Stevens's proposal that the threshold for an as-applied challenge be high--subpart III.C also considers the extent to which the costs of state-specific as-applied review could be controlled by requiting a strong showing before finding a rule invalid as applied. Subpart III.D places the disuniformity uniformity argument in context by observing other features of federal court practice that currently produce significant interstate procedural variation, and by noting ways in which the federal system asks state courts to tolerate similar disuniformity in state procedure. Balancing out the costs and benefits of state-specific as-applied review, I conclude--as Professor Ides does--that Justice Stevens's proposed approach strikes a reasonable balance: state-specific as-applied invalidation of a federal rule should be permissible but rare. (7)

I should note two limits of the analysis that I undertake here. First, because this Article focuses on the Shady Grove debate over as-applied review, and because that debate, in turn, focuses in large part on the interstate variation that can result from such review, most of my discussion will concern the federalism implications of the Rules Enabling Act scope limitations. Those limitations, in fact, have their roots in separation of powers concerns, and should impose constraints in federal question cases as well as diversity cases. (8) It is possible to conceive of a debate over as-applied review, in the federal question context, that would very roughly parallel the debate on which this Article focuses. In the federal question context, the issue would be whether a federal rule might prove to be invalid as applied to the adjudication of a particular type of federal claim. The costs and benefits of that sort of substance-specific as-applied review would differ from those on which I focus in Part III, and in the light of space constraints, I have chosen to focus my discussion on state-specific as-applied review.

Second, I focus here on the methodological question of the appropriateness of as-applied review. The choice between facial and as-applied review inevitably implicates choices concerning the content of the limitation that the review seeks to enforce. But the Enabling Act's constraints have not heretofore been defined with specificity, (9) and I do not attempt a specific definition here. So long as the reader is willing to concede that the separation of powers thrust of the Enabling Act limitations is properly supplemented--in diversity cases--by federalism values, we can address the appropriateness of as-applied Enabling Act review without attempting a more precise articulation of those limitations. (10) Similarly, in illustrating my discussion of as-applied review I discuss a number of instances where the validity of a rule's application has been questioned. In order not to distend further an Article that is already overlong, I do not attempt to assess the merits of those questions. My focus throughout will be on the nature of the method of review rather than on the answer that should be produced by applying that method in a particular case.


    It is worth noting, at the outset, that the petitioner in Shady Grove conceded the general propriety of as-applied Enabling Act challenges. (11) Thus, one might argue that Justice Scalia's decision to question the practice falls within a venerable Erie tradition of deciding questions not raised by the parties. (12) Justice Scalia, for the Shady Grove plurality, attacked the practice of as-applied validity review, while Justice Stevens guardedly defended it and the dissenting Justices ignored the question. I will argue in this Part that the crux of the disagreement between Justices Scalia and Stevens concerns not all methods of as-applied review, but in particular what I will call state-specific as-applied review.

    Justice Scalia, joined by the Chief Justice and Justices Thomas and Sotomayor, argued in Shady Grove that the sole test for a Rule's validity under the Enabling Act is whether the Rule "really regulat[es] procedure" (13) and "not whether the rule affects a litigant's substantive rights; most procedural rules do." (14) After asserting (in a passage that others have understandably criticized as formalist (15)) that the availability of class treatment is a mere "incidental effect" that "leaves the parties' legal rights and duties intact and the rules of decision unchanged," the plurality went on to reject the respondent's argument that the New York statute was either substantive in its own right or enacted to serve substantive purposes:

    The fundamental difficulty with both these arguments is that the substantive nature of New York's law, or its substantive purpose, makes no difference. A Federal Rule of Procedure is not valid in some jurisdictions and invalid in others--or valid in some cases and invalid in others--depending upon whether its effect is to frustrate a state substantive law (or a state procedural law enacted for substantive purposes). (16) After citing Sibbach v. Wilson & Co. (17) for this proposition, (18) the plurality continued:

    Hanna unmistakably expressed the same understanding that compliance of a Federal Rule with the Enabling Act is to be assessed by consulting the Rule itself, and not its effects in...

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