The States' Interest in Federal Procedure.

AuthorZambrano, Diego A.
PositionThemed Issue on Federalism

Introduction I. The Recent History of Procedural Changes II. The States' Attempts to Influence Federal Procedure A. State Amicus Briefs B. State Legislation, Court Decisions, and Policy Statements III. Typology of State Interests in Federal Procedure A. The Private Enforcement of State Law in Federal Court B. Institutional Competition: State Power and Litigation Market Share 1. Federal-state institutional competition in theory 2. Evidence of federal-state institutional competition 3. Procedural retrenchment and the states C. Two-Sided Repeat Players: State Governments as Federal Litigants D. Political Ideology IV. The States' Voice in Federal Procedure A. Federal Courts Should Pay Deference to the States' Views 1. The states as databases 2. The states' democratic values 3. The states' concerns about judicial power B. Concerns About the States' Involvement C. How Federal Institutions Should Accommodate the States' Views Conclusion Appendix A Appendix B Appendix C Introduction

Developments in the law of federal procedure have rarely been more important than in the past decade. Recent rulings by the U.S. Supreme Court have circumscribed access to justice and the role of litigation in enforcing social norms. In the wake of the 2014 decision in Daimler AG v. Bauman, (1) for example, companies gained a new defense against jurisdiction in U.S. courts, placing in jeopardy thousands of cases spanning fields as varied as terror finance, breach of contract, mass torts, and intellectual property. (2) Similarly, 2007's Bell Atlantic Corp. v. Twomhly (3) and 2009's Ashcroft v. Iqbal (4) led to significant doctrinal changes to the motion to dismiss standard and a different calculation for all putative plaintiffs. (5) Extending this pattern, Wal-Mart Stores, Inc. v. Dukes (6) and AT&T Mobility LLC v. Concepcion (7) (both decided in 2011) made it more difficult for class action cases to survive in state and federal court. (8) These procedural changes have been powerful--upsetting all areas of substantive law and granting or denying justice based on what some would call technicalities. (9)

Scholars have addressed this procedural retrenchment from many angles, (10) but they have largely overlooked one key stakeholder: the states. That is not unexpected. The states have no official role in federal procedure and, intuitively, seem to deserve none. After all, federal procedure governs mostly the technical rules of federal, not state, litigation. Because the states are sovereigns with their own court systems and can promulgate their own local procedural rules, we might expect them to be as interested in federal procedure as the United States is interested in French procedure. The states do not participate on the Advisory Committee on the Rules of Civil Procedure. Nor are state attorneys general (AGs) urged (as is the U.S. Solicitor General) to file amicus briefs before the Supreme Court in important procedure cases. (11) Indeed, legal scholars often assume that the states are uninterested in federal procedural developments and focus solely on how the federal branches shape procedure--consigning the states, and federalism concerns, to irrelevance in this context. (12)

Yet a review of major federal procedure cases decided since 2007 reveals a surprising fact: Large coalitions of states have written forceful amicus briefs in most of these cases; some state legislatures have introduced legislation aimed specifically at rejecting federal procedural retrenchment; and state judges have created workarounds to avoid it. There are countless examples spanning from procedural doctrines that directly affect the power of state courts to those that seemingly have no impact on state courts whatsoever. Why exactly are the states so interested in federal procedure?

This Article presents the first comprehensive study of the relationship between the states and federal procedure. It offers three contributions: First, it catalogs the states' wide array of interventions into federal procedure to show that the states have a strong interest in recent procedural changes. Second, it builds a typology that explores the multifaceted ways in which federal procedure affects the states. This typology provides a reconceptualization of procedure and its multilayered consequences for both federalism and the states. Finally, it argues that the states ought to have an institutionalized role in the development of federal procedure.

This Article first demonstrates that the states' interest in federal procedure is broad and deep. The states have participated as amici in twelve out of the eighteen major Supreme Court procedure cases decided since 2007. (13) For example, sixteen states wrote an amicus brief in Twombly asking the Court to increase the burden of federal pleading standards, and forty-six states wrote in Mississippi ex rel. Hood v. AU Optronics Corp. (14) urging a narrow reading of the Class Action Fairness Act (CAFA) of 2005. (15) Beyond amicus briefs, state AGs have submitted policy letters and public comments to proposed changes to the Federal Rules of Civil Procedure and have even testified in congressional hearings. (16) State courts have also systematically rejected federal procedural changes, refusing to emulate the new class action and pleading standards in their state court rules. (17) Even state legislatures have played a role: The New York State Assembly introduced a bill to effectively reverse Bauman's tightening of general jurisdiction, (18) and the California and New Jersey legislatures attempted to skirt Concepcion's attack on class action litigation. (19) These developments necessitate an explanatory theoretical framework.

After documenting the states' interest, this Article then deconstructs the states' interactions with federal courts and procedure. (20) That inquiry requires a new typology that identifies the wide array of connections and cross-currents between federal procedure and the states. I propose four broad theoretical and descriptive categories, placing the states as (i) consumers of federal court services (through the private enforcement of state law); (ii) competitors (as court providers) in the litigation market; (iii) two-sided repeat players in federal litigation; and (iv) political entities. The bulk of this Article defines and defends this typology, but a brief explanation of the four categories demonstrates why the present inquiry is especially useful and timely.

First, the states have shown deep concern with federal efforts to block private litigants' access to court. This anxiety is rooted in a state-level enforcement gap: Underfunded state administrative agencies and state AGs depend heavily on private litigants for the enforcement of state statutory provisions not only in state courts but also in federal courts. In other words, the states rely on private federal litigation to enforce state law. For decades, private litigants have been a key enforcement vehicle for states in areas as varied as wage-and-hour, environmental, and consumer protection law (21) To the extent procedural retrenchment threatens private litigants' access to federal court, the states have sought to halt that process.

Second, among the most important and underexplored sources of state interest in federal procedure is the litigation market. Litigation operates like a market because plaintiffs--and to some extent, defendants--demand dispute resolution tribunals, and courts supply those tribunals. I extend this theoretical market-based model of litigation to place the states (as court providers) in competition with federal courts for business litigation and its positive spillover effects. These economic incentives are strengthened by broader federal-state competition for institutional power, a crucial aspect of the Framers' federalist vision. (22) This theoretical insight predicts that the states will oppose federal changes that come at the expense of their litigation market share. I then review recent developments that seem to validate this account: More than twenty states have recently created state specialty business courts with the purpose of "generating litigation business for local lawyers" (23) and "curtailing] the increased use of the federal judicial system and alternative dispute resolution by business litigants." (24) State judges have also sought to keep important cases in state court to enhance their national status and prestige. (25) Making these motivations explicit, a Philadelphia Court of Common Pleas judge recently stated that "'the court's budgetary woes could be helped by reviving Philadelphia's role as the premier mass torts center in the country,' that 'we're taking business away from other courts,' and that 'lawyers are an economic engine for Philadelphia.'" (26) This impulse to keep certain cases in state court is sometimes in tension with the states' attempts to improve access to federal court for state law claims.

Third, the states are two-sided repeat players in federal litigation, as defendants and as plaintiffs. Although at first blush the states might favor procedural barriers to prevent vexatious litigation against state governments--and various studies have documented the barrage of federal lawsuits states face on a yearly basis (27)--I discuss how they are also heavily interested in promoting access to federal court for a particularly powerful party: state pension funds. These funds have over $2 trillion invested in the securities market and are heavily involved in federal securities litigation. (28) Vindicating the interests of these funds may have pushed the states to favor broader federal discovery, flexible class action requirements, and low pleading standards in the securities litigation context. (29) This may explain one of this Article's counterintuitive findings: While many scholars view the states as serving business interests, (30) this Article shows that states have disagreed with the U.S...

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