After Hours of Debate Between Members of the House Judiciary Committee, the Lawsuit Abuse Reduction Act of 2017 (H.R. 720) Advances to the House Floor

–by Anna Pinchuk

Citations:

https://judiciary.house.gov/wp-content/uploads/2017/01/2.02.17-Transcript.pdf

http://docs.house.gov/meetings/JU/JU00/20170202/105522/BILLS-115HR720ih.pdf

http://www.americanbar.org/content/dam/aba/uncategorized/GAO/2017feb1_lara_l.authcheckdam.pdf

http://www.businesswire.com/news/home/20170202006132/en/U.S.-Chamber-Applauds-House-Judiciary-Committee-Passage

Abstract: H.R. 720, the Lawsuit Abuse Reduction Act, amends Rule 11 of the Federal Rules of Civil Procedure. The Act requires judges to impose mandatory sanctions on attorneys who file frivolous claims and eliminates the 21-day “safe harbor” provision. After approval by the House Judiciary Committee, it advanced to Congress.

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On January 30, 2017, H.R. 720, the Lawsuit Abuse Reduction Act of 2017 (LARA), sponsored by Rep. Lamar Smith (R-TX), was introduced in Congress and referred to the House Judiciary Committee. LARA amends Rule 11 of the Federal Rules of Civil Procedure. First, it requires judges to impose mandatory, instead of discretionary, sanctions on attorneys who file frivolous claims, defenses, or other legal contentions. Second, the Act strikes down the provision of Rule 11 that allows attorneys to avoid sanctions by withdrawing claims or defenses within 21 days.

Currently, Rule 11 allows judges to use their discretion in imposing sanctions. For example, a judge may impose sanctions on attorneys if they file claims for an improper purpose or their claims are not warranted by the existing law or an extension of the law. The Rule also contains a 21-day “safe harbor” provision which allows attorneys to withdraw their claims without the imposition of sanctions.

On February 2, 2017, the House Judiciary Committee approved LARA on a 17-6 vote. During the markup, Chairman of the Judiciary Committee Bob Goodlatte (R-VA) expressed support for the Act because it “would finally provide light at the end of the tunnel for the victims of frivolous lawsuits.” According to Congressman Goodlatte, current lack of mandatory sanctions leads to regular filings of baseless lawsuits and forces victims to settle cases in order to avoid litigating in court. The U.S. Chamber Institute for Legal Reform applauded the Judiciary Committee for the Act, saying, “These bills will discourage plaintiffs’ lawyers from gaming America’s justice system to their advantage.”

Representative John Conyers, Jr. (D-MI), the ranking member of the Judiciary Committee, expressed strong opposition to LARA because “it will chill the advancement of civil rights claims and increase exponentially the volume and cost of litigation in the Federal courts.” According to Representative Conyers, the version of mandatory sanctions of Rule 11 that LARA restores had already failed when it was in effect from 1983 to 1993. Representative Conyers highlighted that civil rights cases often involve novel legal arguments which may be especially susceptible to new sanctions. For example, in 1983, Rule 11 motions were higher in civil rights cases than in any other type of cases. Additionally, Representative Conyers was concerned that by eliminating the “safe harbor” provision, the modified version of the Rule will increase the amount, costs, and intensity of civil litigation, creating more ground for unnecessary delay and harassment. As a result, Representative Conyers proposed an amendment that would exclude cases brought under the Constitution or under any civil rights laws from the application of the Rule. However, the majority of the House Judiciary Committee rejected this amendment, along with other amendments from democratic representatives.

The American Bar Association (ABA) also expressed opposition to LARA. The ABA opposed LARA because Congress had already established procedures for amending the Federal Rules of Civil Procedure that are not being followed by proponents of LARA. Additionally, there is no evidence to support the contention that current Rule 11 sanctions are inadequate. The ABA is concerned that modifying Rule 11 will encourage additional litigation and increase court delays and costs.

Since 1995, bills like LARA that would toughen Rule 11 sanctions have been regularly introduced in both the House and Senate. To this day none have been successfully enacted. Last September, similar legislation passed the House on a 241-185 vote, but was not passed in the Senate. Similarly, this year, the Republican Party’s control of the House will make LARA’s passage more likely in the House. However, its passage in the Senate is not as certain.

New York Court of Appeals Holds That Skin Color Is a Cognizable Class Under Batson Analysis

–by Robert Carpenter

Citation: People v. Bridgeforth, 2016 N.Y. Lexis 3859 (Dec. 22, 2016) (internal citations omitted).

Abstract: In a matter of first impression, the New York Court of Appeals held that skin color was a cognizable class for Batson based challenges to peremptory strikes.

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On December 22, 2016, the New York Court of Appeals held that a trial court had committed reversible error by not seating a juror. In so doing, the Court established skin color as a classification upon which a challenge to peremptory strikes could be successfully based.

The defendant in the case was charged with multiple counts of robbery. During voir dire, the prosecutor used peremptory challenges to exclude multiple potential jurors. Defense counsel alleged that the prosecutor lacked valid reasons for the strikes, other than the fact that all those excluded were “dark-skinned women.” The record indicates that the excluded group included African-American women, Guyanese women, and “a dark complexioned Indian-American woman.” The prosecutor immediately supplied reasons for the challenges for all those excluded except for the Indian-American woman. Even with no reason for the challenge, the Indian-American woman was not seated as a juror.

The Court began by reviewing how New York analyzes challenges to peremptory strikes. The Court noted that New York has adopted the framework used by the Supreme Court case Batson v. Kentucky, 476 U.S. 79 (1986). The Batson framework requires the movant to establish a prima facie case of peremptory strikes being used to discriminate. After that the non-moving party must put forth a non-discriminatory reason for the strike. Finally, the Court decides whether the stated reason was legitimate or a pretext for discrimination.

The Court then considered whether skin color implicated equal protection concerns. For guidance, the Court looked to the New York Constitution’s equal protection clause, which prevents discrimination against “race, color, creed or religion.” The Court concluded that the distinction between “race” and “color” meant that the two concepts were unique. The Court also cited several academic articles that had found the existence of “colorism.” With all of these factors in mind, the Court found that Batson should be extended to include challenges based on skin color.

After finding skin color to be a cognizable classification for Batson, the Court noted that this decision did not conflict with past decisions that found Batson challenges could not be based on the exclusion of minorities. The Court stated that skin color required only a narrow showing while minority status could include a varied group of people.

In applying the new Batson classification to the case, the Court first held that the trial court did not reach an ultimate conclusion on the prima facie case of discrimination necessary under Batson analysis. This meant that the issue was not moot and reviewable on appeal. The Court then concluded that the defendant had successfully established a prima facie case of discrimination based on skin color.

The Court then considered whether the prosecutor had put forth a non-discriminatory reason for the strike. The Court cited several cases showing that failing to recall a non-discriminatory reason is insufficient under the second stage of Batson analysis. After finding that the defendant had succeeded in establishing a prima facie case of discrimination and that the prosecutor had failed to put forth a non-discriminatory reason, the Court held that the trial court committed reversible error by not seating the juror.

One Judge concurred that the trial court committed reversible error by not seating the juror but believed the court erred in establishing a new Batson classification.

The concurring judge argued that the majority had misapplied New York mootness doctrine. Where the majority concluded that the issue of Batson analysis was not moot because the trial judge never made a final ruling on the classification, the concurring judge disagreed. The judge noted that the prosecutor articulated non-discriminatory reasons for four of the five excluded persons before the trial judge made a ruling on the prima facie case of discrimination. The judge concluded that the immediate response by the prosecutor mooted the issue. The judge would have held that it was error to exclude the one juror for which no reason was articulated but would not have addressed the Batson argument.

The concurring judge also criticized the majority’s conclusion that the judge did not make an ultimate decision. The judge argued that by not seating the juror, the judge made an ultimate decision even if it was not stated on the record.

After Two Years of Efforts to Bring Uber Upstate, 2017 May be the Year It Happens

–by Karianne Polimeni

Citations:

Ben Axelton, Cuomo to Reveal Plan to bring Uber, Lyft to Upstate New York, New York Upstate, (Jan. 8, 2017, 11:23 AM), http://www.newyorkupstate.com/news/2017/01/cuomo_to_reveal_plan_to_bring_uber_lyft_to_upstate_new_york.html; Kevin B. Knott, The Facts Behind Buffalo’s Uber Situation, The Buffalo Scene (2016), http://thebuffaloscene.com/2016/08/22/buffalos-uber-situation/; Jack O’Brien, Uber’s Fight for New York, The Legislative Gazette, (Dec. 27, 2016), http://legislativegazette.com/archives/4182; Jared Meyer, New York’s Dumb War on Uber, Reason.com, (Jan. 11,2017), http://reason.com/archives/2017/01/11/new-yorks-dumb-war-on-uber.

Abstract: Since Uber’s launch in 2014, New York State citizens have been pushing for Uber to be allowed in New York. Despite Assembly opposition, Uber has made its way to New York City and has been nothing but successful. Now, Upstate New York citizens are left wondering when the rest of the state will be allowed to enjoy the cheap, safe ride-sharing company the rest of the nation and even people overseas have come to love.

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Since its launch in 2014, Uber has done nothing but grow. As of today, Uber operates in 45 states and has even expanded rapidly overseas. Although allowed in New York City, Uber has yet to make its way to the rest of New York State (“NYS”). This is not for lack of trying or for lack of demand. This past Thanksgiving-eve alone, more than 40,000 people in Upstate New York launched their Uber app only to find that it does not exist anywhere in the state other than New York City.

Starting in early 2015, there has been a huge push to get Uber and Lyft into Upstate New York. With its demand growing every day, many senators and representatives have been overwhelmed by the letters, phone calls, and petitions that end up on their desks daily from NYS citizens. Citizens are not the only ones pushing for its expansion. In 2016 alone, Uber spent over $750,000 lobbying for its allowance in NYS. In addition, Uber has even teamed up with the Buffalo Bills and the Buffalo Sabres for special rates on transportation to and from games, and free rides for players on the teams. Currently, Buffalo is the largest city in the nation without Uber or Lyft operating in it and is the only city with an NFL team without it. In fact, Buffalo is one of the five largest cities in the world that does not have Uber or Lyft operating within it. In Buffalo alone, more than 2,000 people launch the app daily. Statewide, 60,000 people try to use the app daily.

Governor Andrew Cuomo is even behind the efforts. “Uber is one of these great inventions, startups, of this new economy and it’s taking off like fire to dry grass and it’s giving people jobs. I don’t think the government should be in the business of trying to restrict job growth.” Bringing Uber to the rest of NYS would create an estimated 13,000 jobs. Many worry, however, that these jobs would be at the cost of other jobs, such as taxi drivers or those in other transportations services. This worry is one of the reasons why there is opposition to its expansion.

Another reason it has yet to expand to Upstate NY is that many want every driver to submit to a fingerprint background check. NYS Senate Bill S4108D made its way through the Senate, but stopped in the Assembly, with this being one of the major cited reasons for its opposition. If the Assembly were to get its way and mandate fingerprint background checks for every driver, it would be the only state in the nation to do so. With safety being the Assembly’s concern, many are worried that a regular background check is not enough. Opponents to the fingerprint background check acknowledge the Assembly’s concerns, but point out that fingerprint background checks are only as good as the company that updates them–citing cases where DUI’s and other traffic safety violations often do not show up on the check. Further, they point out, many of the few safety issues that have occurred through ride-sharing companies come from someone posing as a driver, and not an actual hired driver.

Insurance is another reason for its opposition. Having a ride-sharing company in NYS would require a certain group insurance policy that NYS does not currently have. Insurance companies have lobbied with taxi companies in opposition to Uber expanding to the rest of NYS because of it. In light of this opposition, the Assembly has proposed its own bill (A08195) that would require the insurance increase to come from the Uber Drivers. Uber claims that this increase in insurance would make the expansion impossible for its company, so this bill, too, has been halted.

Despite all of the bumps in the road, many are hopeful that Uber will make its way to the rest of New York soon. In 2017, Governor Cuomo has addressed the issue at his State of the State Address and says he has a plan in the works. “It defies logic that ride-sharing isn’t available to New Yorkers who live outside of New York City. My message is Upstate New York matters and it’s not right or fair that Upstate doesn’t have this new innovation that spurs the economy, can save money and save lives.”

Georgia Court of Appeals Reverses Trial Court Denial of Transgender Name Change

–by Joseph Railey

Citations: In re Feldhaus, __S.E.2d__ , 2017 WL 253649 (Ga. Ct. App. 2017)

Abstract: The Georgia Court of Appeals reversed a denial of two name change petitions from Columbia County Superior Court. Petitioners in both cases were transgender males who sought to change their names to reflect their gender identity. The trial court noted that doing so would be a fraud against the state and would “offend the sensibilities and mores of . . . the citizens of the state.” Finding that there was an abuse of discretion, the Court of Appeals unanimously reversed the trial court and granted the name changes.

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Two transgender males, Rowan Elijah Feldhaus and Andrew Norman Baumert each appealed a decision from the same trial court judge who denied their request to change their legal names. As transgender males, both Mr. Feldhaus and Mr. Baumert were determined to be female at birth, however, each identifies as a male. Both individuals sought to change their name to reflect their gender identity.

Under Georgia state law, any individual may change a name by “present[ing] a petition to the superior court of the county of his residence, setting forth fully and particularly the reasons why the change is asked, which petition shall be verified by the petitioner.” Both Mr. Feldhaus and Mr. Baumert complied with this standard when they filed their respective petitions in Columbia County. At their hearing, each petitioner was unopposed in their request to change their name.

Despite the clear statute and unopposed petitions, the superior court rejected both petitions. The court noted that a transgender individual’s desire to change their name from a name that is associated with their sex assigned at birth to one associated with their gender identity “presents problems for the person and the general public.” The court continued that “his or her assumed name could ‘confuse and mislead’ . . . emergency personnel, actuaries, insurance underwriters, and other businesses and relationships where the sex of an individual is relevant.” The court allowed both petitioners to change their name to a “gender neutral” name but determined that “Rowan Elijah” and “Andrew Norman” as traditionally masculine names could confuse and mislead the public. The court concluded each hearing by noting that “[n]ame changes which allow a person to assume the role of a person of the opposite sex are, in effect, a type of fraud on the general public” and that these changes “offend the sensibilities and mores of a substantial portion of the citizens of [Georgia].” Based on these reasons, the court denied both petitioners’ valid petitions to change their name.

On appeal, the Court of Appeals (the intermediate appellate court in Georgia) noted that the proper standard of review for a petition to change a name is “the exercise of a sound legal discretion.” Therefore, absent an abuse of discretion, the court cannot disturb the decision. Noting that neither petitioner’s application was opposed (in fact both Mr. Feldhaus and Mr. Baumert presented evidence in support of their desired name change) and neither was seeking to commit a fraud against the state, the court determined that there was an abuse of discretion.

In the past, the court denied name change petitions when there was evidence that the petitioner sought to change their name in order to commit a fraud, embarrass another, seek to escape some negative history, or otherwise display an improper motive. As an example, the court cited In re Mullinix, 152 Ga. App. 215 (1979), where the court reversed a trial court order preventing a married woman to restore her maiden name as the trial court felt that the name change might “confuse and embarrass” the mother’s child. Here, the court examined this same “confuse or embarrass” standard by determining that the standard was not a proper basis for the trial court to deny a name change. While Mr. Baumert and Mr. Feldhaus each raised constitutionality arguments in their appeal, the court did not consider these arguments as the court held that the trial court abused its discretion.

Absent any evidence of fraud or improper motive, and as each petitioner lived their lives as males, the Court of Appeals unanimously reversed the trial court and ordered that the petitions to change names be granted.

Consumer Alleges Deceit; Court Rules that Reasonable Consumers Account for the Ice

–by Erin Shea

Source: Galanis v. Starbucks Corporation, No. 16-C-4705, 2016 WL 6037962 (N.D. Ill. 2016) (all internal citations omitted).

Abstract:  The Northern District of Illinois concluded that a reasonable customer understands the term “fluid ounces” to indicate the volume of a container and not the contents.

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Starbucks customer Steven Galanis was recently disappointed with his iced Starbucks beverage. Galanis’ disappointment rose to such a level that he filed a lawsuit, alleging that Starbucks deceives its customers by “misrepresenting the volume of its cold drinks because much of the volume is taken up by ice.” Galanis argued that Starbucks was deceiving the customer by advertising the size of its cups rather than the amount of liquid that a customer receives with the order of an iced beverage. For example, Starbucks advertises that an iced drink has twenty-four fluid ounces. Galanis believes that drink should have twenty-four fluid ounces of beverage before the ice is added.

Galanis filed suit in the Northern District of Illinois and argued that this misrepresentation constituted (1) breach of express warranty; (2) breach of implied warranty of merchantability; (3) negligent misrepresentation; (4) unjust enrichment; (5) fraud; (6) a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act; and (7) a violation of the Illinois Uniform Deceptive Trade Practices Act. In response, Starbucks filed a motion to dismiss for failure to state a claim.

In order to succeed on a cause of action under the Consumer Fraud Act, Galanis needed to prove that (1) Starbucks engaged in a deceptive act or practice; (2) Starbucks intended that consumers rely on the deception; (3) this deception involved trade or commerce; (4) the deception caused actual damage to the consumer; and (5) Starbucks’ deception proximately caused the damage to the consumer. A statement will be considered deceptive if it “creates a likelihood of deception,” and “misled a reasonable consumer,” in the totality of the circumstances. A court may dismiss a claim under this theory if the statement was not misleading as a matter of law.

The court sided with Starbucks and concluded that a reasonable consumers knows that the measurement of fluid ounces refers to volume, not content, and “if the consumer chooses an ‘iced’ drink, the reasonable consumer knows that the container (whatever its volume) will be filled with both solid ice and fluid beverage.” The court stated that the mere fact the volume of the drink is measured using a phrase that contains the word “fluid,” does not mean all the contents need to be fluid. A reasonable consumer would expect there to be ice in the iced drink.

The court supported its finding of reasonableness by relying in part on a recent California district court decision that stated, “children have figured out that including ice in a cold beverage decreases the amount of liquid they will receive.” The court noted that sellers do not normally list the fluid ounces available, and simply demonstrate by display the size choices available to the customer. The reasonable consumer understands that even though Starbucks displays its cups and lists the fluid ounces, the ounces indicate the volume of the container, not the contents of the container. The court finished by stating, “including ice, which of course is not fluid (as the parties ‘helpfully’ point out . . . ), in an iced drink does not make a menu listing the size of the drink in terms of ‘fluid ounces’ a deceptive statement.” Since all of Galanis’ claims required a misleading statement, and the court did not find that one existed, the court granted Starbucks’ motion to dismiss on all counts.