Like many of you, I suspect, I began law school with something called Pennoyer v. Neff, followed shortly thereafter by something called a “progeny.” Not being a lawyer at the time, the whole thing made very little sense to me. While it seemed logical to ask whether the parties or events had a sufficient connection to a state before its courts could exercise jurisdiction over the controversy, why would that matter when you were talking about the jurisdiction of a federal court? Wouldn’t the question be whether the parties or events had a sufficient connection to the United States? The whole concept seemed extremely outdated.
If we still lived in the horse-and-buggy days, I could see the unfairness of forcing a dairy farmer in Wisconsin to defend himself or herself in the faraway and foreign lands of Georgia. But now we have airplanes and telephones and fax machines. (And, as a practical matter, the typical defendant is generally insured by a relatively small group of companies, which is usually located in a different state or even a different country, and will hire a local lawyer wherever the case is filed and assume primary responsibility for the defense.) Is it really still such a burden?
In the twenty-or-so years that I have been in practice, the world has gotten only smaller. The economy has gotten more global. Law firms have merged and expanded. Digital networks have connected us. And, most importantly for these purposes, the adoption of electronic filing systems has effectively allowed a case to be litigated from anywhere by anyone who has access to the Internet.
Yet, curiously, the personal jurisdiction inquiry has not relaxed, as one might have expected. If anything, rather, it has become more restrictive. We lawyers, of course, tend to look at these types of things differently. But does it really make sense to ask whether a foreign company that profits by shipping its products to the U.S. specifically directed its marketing or promotional efforts to the residents of a particular state? Does it really make sense to insulate multinational conglomerates from suit in a particular jurisdiction because the company does most of its business through a series of wholly-owned subsidiaries?
Another trend that we have witnessed is the exponential expansion of disputes that are subject to arbitration. For most of its history, the FAA was viewed by the courts as a limited procedural remedy, affecting the jurisdiction to hear purely contractual matters in Federal Court. Over the past three decades, however, standard-form, small print, take-it-or-leave-it clauses in everything from inscrutable cellphone contracts to online I-accept-these-terms clicks to cereal box tops have been used to preclude litigation of even statutory rights and protections, even in state court.
Judges, in many cases working with the community’s input and participation in the form of a jury, enforce fundamental rights and interests, under an open and transparent process, predicated on evidentiary standards, discovery, fact-finding, application of law, and appellate review. Arbitrators, by contrast, work largely in secret, without any guarantee that public policy interests are being taken into account, or that the parties are being treated fairly and equally before the law.
In recent years, moreover, the insertion of a binding arbitration provision has been recognized as an effective way of preventing collective actions in cases where individual lawsuits are not economically viable. Companies, therefore, lose much of the disincentive that would otherwise encourage them to act responsibly – even with respect to conduct that Congress or the Louisiana Legislature has specifically deemed important to address.
Hence, a fundamentally democratic process has been largely replaced by a system of private justice, (which may or may not be “just”), and, in many cases, widespread economic harms have become effectively immunized where arbitration is simply cost-prohibitive to pursue on a case-by-case basis.
Alongside preemption under the FAA, preemption generally of state law has been a trend over the past few decades, even as states’ rights have resurged in other areas. From auto safety, to drug safety, to railroad safety, to environmental safety, to banking and consumer protections and concerns, state law tort actions have been preempted repeatedly, even in cases where the legislation was specifically intended to provide greater protections to consumers, and even where the statute itself included a savings provision.
As Judge Pickering once noted in the context of ERISA, enacted by Congress in 1974 to protect employees and their beneficiaries: employees have less protection today than they had before the act was passed. He said the results of preemption:
… remind one of the words of Welsh poet Dylan Thomas when he was describing the awesome problems created by the signature and decree of a certain monarch who had imposed great hardship upon many people. He concluded “great is the hand that holds dominion over man by a scribbled name.” In many respects the judicial interpretation of ERISA has accomplished the same thing. It has preempted from application to most group health insurance policies a volume of state laws and remedies developed over many years of experience that protected insureds….
“But don’t forget,” Clark Gable reminds Marilyn Monroe in The Misfits, (and Alabama Worley later reminds Clarence in True Romance), sometimes “it goes the other way, too.”
Every once in a while, there is cause to celebrate.
In addition to rejecting the argument that Congress intended people to go without health insurance under the Affordable Care Act in states that refused to set up an exchange, the U.S. Supreme Court handed down the long-awaited decision in Obergefell v. Hodges, recognizing same-sex marriage.
While different people have understandably differing personal, religious, and political feelings and views about the institution of marriage, the separation of powers, the will of the people, and the principles of judicial review or restraint, no one can reject the fundamental desire to recognize the dignity and grace that lies in each and every one of us, as human beings. Controversial today, this decision will, in time, be seen as a step in what Martin Luther King called the long arc of history, bending towards justice.
In Louisiana, we had another recent landmark victory. The workers’ compensation system, premised on an illusory “quid pro quo” that may or may not have been actually agreed to a hundred years ago, has seen almost all independent and judicial fairness and fact-finding exported to the executive branch, in the service of largely pre-determined interests and agendas. But on June 24th after a long-fought battle, the district court issued a preliminary injunction enjoining the application and enforcement of the process under which the OWC medical director, appointed by the governor, decides certain claims for medical benefits without any right to a hearing.
As the arc of our civil justice system seems to bend towards the rich and powerful, please take a few minutes to appreciate the courage of lawyers and judges who toil in the vineyards, hoping that justice will be done.