Effective Appellate Advocacy: Issue Framing

by Kirsten E. Small

In my inbox this morning was a great blog post by Kendall Gray, writing about the Supreme Court's decision this week in J. McIntyre Machinery v. Nicastro. He pointed out two wonderful examples of issue framing by Justice Kennedy, writing for the majority, and Justice Ginsburg, writing for the dissent.

See the magic for yourself, after the jump.

There Is A Need To Cross All Of The “T”s And Dot All Of The “I”s

by Stephen P. Groves, Sr.

Boyd v. Metropolitan Life Insurance Company, ___ F.3d ___ (4th Cir 2011)

(Case No. 10-1702, filed 31 March 2011) (http://pacer.ca4.uscourts.gov/dailyopinions/opinion.pdf/101702.P.pdf)

While this case is essentially directed to all of the Family Court practitioners out there, the basic premises apply to all attorneys. Make sure all of the “T”s are crossed and the “I”s are dotted. When your client or their opposition waives a right to something, such as insurance benefits, pension benefits, etc., make sure everyone who should know about the waiver does know – especially the plan administrator.


Emma Boyd lived in Charleston, South Carolina and worked for Delta Airlines. She participated in Delta’s ERISA-governed life insurance program administered by Metropolitan Life Insurance Company. Emma was married to Robert Alsager and he was her designated primary insurance beneficiary. Emma’s mother, Mary Boyd, was the contingent beneficiary. Sometime in 2007 or so Emma and Robert separated and, in April 2008, the Charleston County Family Court approved their separation and property settlement agreement. As part of the settlement, both Emma and Robert agreed to waive any of their respective rights to the other’s estate and/or property, including specifically any rights to life insurance proceeds. Emma did not, however, notify MetLife to change the policy beneficiary from Robert to either Mary or someone else.

Unfortunately, on November 8, 2008, Emma passed away suddenly. Mary Boyd and others filed a claim with MetLife for the insurance proceeds, noting Robert had previously waived any claim thereto, notwithstanding the settlement agreement. Robert also filed a claim with MetLife. Based upon the plan documents, MetLife determined Robert was entitled to the proceeds and ultimately paid the benefits to him.

Mary sent a letter to MetLife appealing the claim determination on the basis Robert had specifically waived his right to recover any of Emma’s insurance benefits. After the claim decision was upheld, Mary sued MetLife in Federal Court in Charleston. Senior United States District Judge C. Weston Houck granted MetLife’s motion to dismiss “concluding that MetLife had carried out its statutory obligations by disbursing benefits in accordance with the beneficiary designation form on file with the plan. (Slip Op., pp.4-5). Mary appealed to the Fourth Circuit.

Relying on Kennedy v. Plan Administrator for DuPont Savings & Investment Plans, ___ U.S. ___, 129 S.Ct. 865 (2009), the United States Court of Appeals for the Fourth Circuit affirmed the District Court. In Kennedy, the Supreme Court had concluded that ERISA required the plan administrator to disburse benefits “ ‘in accordance with the documents and instruments governing the plan.’ ” (Slip Op., p.5) (quoting 29 U.S.C. § 1132(a)(1)(D)). Furthermore, the Kenney Court concluded that “ ‘ERISA’s statutory scheme ‘is built around reliance on the face of written plan documents.’ ” (Slip Op., p.5) (quoting Kennedy, ___ U.S. ___, ___, 129 S.Ct. 865, 875) (quoting Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83 (1995)).

In Kennedy, a case similar to this one, the ex-wife was a party to a divorce decree which divested her of any proceeds to her ex-husband’s retirement and/or pension benefits, but remained as the designated beneficiary on the plan documents for one of his pension benefit plans. After Mr. Kennedy passed, his estate’s executrix claimed the pension benefits for the estate based on the ex-wife’s benefit’s waiver. The Court rejected the argument and determined the plan administrator was statutorily required to pay benefits pursuant to the plan documents on file, regardless of any alleged waiver. Stated otherwise, “even though [the] ex-wife’s waiver was clear, the [Supreme] Court concluded it could not trump the plan documents.” (Slip Op., p.7) (citing Kennedy, ___ U.S. ___, ___, 129 S.Ct. 865, 874-875). See also Matschiner v. Hartford Life & Accident Insurance Co., 622 F.3d 885 (8th Cir. 2010) (similar case holding).

While this may seem a harsh result given Robert’s clear waiver of Emma’s insurance benefits in the settlement agreement, Emma’s (or her attorney’s) failure to actually have MetLife change the beneficiary is the real problem. To require a plan administrator to honor a beneficiary’s waiver as opposed to simply following the plan documents would clearly open the door to questions of whether the waiver was “voluntary”, “knowing”, “based upon adequate consideration”, and so on. This would be very time consuming, likely to engender significant litigation, and plainly unnecessary. A plan participant, like Emma, could easily avoid all of these machinations by changing the beneficiary designation to another person once the original primary beneficiary, like Robert, has waived his rights to the proceeds.

"May it please the Co--" (Or, making the most of limited argument time).

By Kirsten Small

I ran across an interesting article by Tony Mauro of the National Law Journal. Mr. Mauro notes that while Chief Justice Rehnquist was a stickler for keeping attorneys to their alloted argument time, Chief Justice Roberts is more flexible, allowing lawyers to finish their thought and event allowing additional time when necessary.

Does this mean the Chief has turned the henhouse over to the foxes? Hardly. While my experience has been that there is often a vast difference between the amount of time an appellate lawyer thinks he needs to argue his case, and the amount of time that he actually needs, it is also true that quite often, the time alloted (30 minutes per side in the Supreme Court, 20 minutes per side in the Fourth Circuit, with some exceptions) is insufficient for counsel to address all of the issues on his agenda and to respond to issues from the court. When this happens,the presiding judge must decide whether to allow additional argument time.

Appellate advocates should take this into account when preparing for oral argument. Triage your arguments--or have a disinterested colleague do it for you--and focus only on those that (a) have the best chance of prevailing, and/or (b) are likely to need explaining beyond what is already in your brief. Bear in mind that you do not need to argue a point just because it is in your brief--indeed, more than one lawyer has snatched defeat from the jaws of victory by failing to leave well enough alone.

Accommodating the time limitations of appellate argument requires an agility that comes from knowing your case and the law inside out. If the court grills you on issue C, such that you are short on time for issues A and B, you are going to need to jettison one or the other, or truncate both, on the fly. Having a plan in mind before you step to the podium will make this an easier decision. Plus, the court's questions may indicate to you a particular area of concern that needs to be addressed, and you should be sufficiently knowledgeable and flexible to do so.

Machiavelli* once wrote, "I am writing you a long letter because I do not have the time to write you a short one." So it is with oral argument--the ability to be brief requires intense, time consuming preparation. The best advocates recognize the value of this investment of time.

*Actually, I have seen this statement attributed to numerous people. Since I first heard it attributed to Machiavelli, that's what I'm going with here.

Congressional Reaction to Citizens United

by Gary L. Beaver

Democrats in Congress, led by Senator Chuck Schumer and Representative Chris Van Hollen, are pushing for rapid action to pass legislation intended to create new requirements for corporations spending money on political speech in light of the Citizens United v. FEC decision by the U.S. Supreme Court on January 21, 2010. The Citizens United Court held that there was no distinction between corporations and individuals with respect to political speech and struck down certain statutory limitations placed on corporate political speech. These Congressman believe that the Citizens United decision will open the floodgates to organizations spending money on political speech to influence election outcomes.

If publicized descriptions of the proposed new requirements are accurate, most appear to be reasonable. They would apply to corporations (including S-corporations) and labor unions and would require detailed disclosures to the FEC of who is funding the political speech, including requiring almost contemporaneous posting of information about the spending on the company's website. In addition, companies that are more than 20% owned by foreign interests or whose board of directors is more than half foreigners and companies receiving TARP money would be banned from spending on political speech (reportedly the ban on the TARP recipients would be lifted if the TARP money was already repaid). There is reportedly some language similarly banning political speech by companies receiving money through federal contracts. The scope of that provision will have to be closely examined. There is already a statute barring federal contractors from engaging in political activities (2 U.S.C. Section 441c) so adding this provision must be for some other purpose such as expanding the scope of the prohibitions in the existing statute. Perhaps it is intended to expand the ban from what is currently defined as the federal contractor to other companies that may be parents, subsidiaries, or affiliates of the contractor in order to add restrict additional corporations from political speech as many large corporations have subsidiaries receiving at least a small amount of revenue from federal contracts. In addition, there is one restriction being floated that is plainly biased against corporations. Some representatives, including Barney Frank, are pushing for language requiring publicly traded companies to receive shareholder approval before spending on political speech. That restriction, which apparently does not require unions to obtain member approval, appears to be unduly restrictive as it would be difficult to impossible to timely obtain such approval for political speech that may have to be shaped and aired quickly in the last days of a campaign. Another interesting requirement is for the CEOs of the companies paying for the ads to appear on camera to say that they stand by the ad similar to the "stand by your ad" requirements for politicians in the ads they run. Finally, a controversial provision would require candidates and political parties to be given the lowest unit rate for advertising to counter corporate and union advertising. Giving one speaker a leg up on another does not appear to be required by the First Amendment so the viability of that provision is questionable.

The pols are on the right track with the disclosure requirements and foreign investment restrictions which appear to be reasonable and appropriate. There are rational bases for restricting foreign interests in the amount of influence they can have on American elections and one would hope that the Supreme Court will agree. Likewise, there are good reasons for requiring timely and complete disclosures so that voters know exactly who or what is backing a candidate and those requirements would not restrict political speech but rather would enhance it by providing information about who is making the speech. Such requirements should easily withstand judicial scrutiny. However, I predict political fights over some of the other provisions which appear to place barriers designed to stifle corporate political speech and, if they are enacted, their ultimate demise in the courts for unduly restricting political speech.

U.S. Supreme Court Erases Bar to Funding Political Attack Ads

by Gary Beaver

If you think you have seen dirty political campaigns in the past, I opine that “you ain’t seen nothing yet.” On January 21, 2010, in the case of Citizens United v. Federal Election Commission (FEC), the U.S. Supreme Court changed the rules that restricted corporations (profit and non-profit) and unions from funding political ads. The change is likely to result in more money being spent on political advertising, which, in turn, is likely to result in more negative advertising.

Under § 203 of the Bipartisan Campaign Reform Act of 2002 (2 U.S.C. § 441b), corporations and unions were barred from using their general treasury funds to pay for an “electioneering communication” or speech that expressly advocates the election or defeat of a candidate, through any form of media. “Electioneering communications” included any broadcast that referred to a clearly identified candidate for federal office and was made within 30 days of a primary or 60 days of a general election. They could provide funds indirectly through political action groups (“PACs”) but funds into PACs had to come from donations from stockholders or employees of the corporation or members of the union.

The case involved efforts in the 2008 presidential campaign by Citizens United (a conservative non-profit) to distribute a movie entitled “Hillary: The Movie” more widely by offering it through a free video-on-demand channel called “Elections “08.” The 90-minute movie painted an unflattering picture of Hillary Clinton. Citizens United feared running afoul of 2 U.S.C. § 441b and sought declaratory and injunctive relief arguing that the law was unconstitutional as applied to the movie and ads promoting the movie. The District Court denied Citizens United relief and, instead, granted summary judgment to the FEC. The Supreme Court agreed that the movie and ads were “electioneering communications” but applied the First Amendment to invalidate 2 U.S.C. § 441b and hold that corporations and unions are free to spend as much as they want on such speech. Importantly, corporations and unions remain required to identify themselves as the sources of funding the advertisements and to include disclaimers in the ad, and remain barred from making direct contributions to the candidates. In making its holding, the Court overruled Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), that political speech may be banned based on the speaker’s corporate identity.

The internet was immediately filled with the howls of many, mostly from the left and the public interest advocates, who fear that corporations will greatly outspend the unions and, thereby, influence voters to choose candidates who are business-friendly and not necessarily worker- and consumer-friendly. For example: Ralph Nader called for a constitutional amendment to prevent corporate campaign contributions (note: he also called for a similar restriction on union funds); Senator Leahy (D-Vt. and chair of the Senate Judiciary Committee) blasted the decision in a press release calling the decision a victory for Wall Street at the expense of Main Street; and, President Obama criticized the decision and announced that his administration would work with Congress to pass legislation to vitiate the holding. In contrast, conservative groups praised the decision (e.g., U.S. Chamber of Commerce, Cato Institute). Not surprisingly, the U.S. Supreme Court followed that same pattern in its 5-4 vote in the case with the more conservative judges in the majority. Justice Stevens was especially incensed by the decision and wrote a 90-page dissent.

Another criticism of the decision seen frequently on the internet is that foreign corporations, individuals, and governments can own corporations in the U.S. and use them as vehicles to influence American politics and government.

Obviously, many observers believe (or at least say) that this decision will profoundly affect future political races. We shall see. I am reminded of what happened in the 2008 senatorial campaign in North Carolina when Ms. Dole used an unseemly ad attacking the religious beliefs of Ms. Hagan. The backfire was heard round the country. Perhaps liberal and public interest observers are not giving the voters enough credit for being able to evaluate political speech and determine what constitutes valid positions and arguments and what is unfair or inaccurate criticism. If voters are inundated with heavy-handed advertising campaigns funded by corporations for one candidate or by unions for another, such advertising may have the opposite of its intended effect. American voters do not like to be told what to think, do not like bullying, and may react negatively to a candidate receiving too much support from a particular group, whether corporation or union. American voters are likely to find particularly repugnant political ads from corporations owned by non-Americans. The voters’ political sophistication and ability to look behind canned messages grows with each day the Internet exists. The difficulty remains in gleaning the truth from the many assertions on the Web.

U.S. Supreme Court allows Duke Energy and Catawba River Water Supply Project to intervene in South Carolina v. North Carolina

by Manton Grier, Jr.

This past Wednesday, the United States Supreme Court granted motions to intervene filed by Duke Energy and Catawba River Water Supply in South Carolina v. North Carolina, No. 138, an original action filed by South Carolina seeking an equitable apportionment of the Catawba River waters. The opinion was written by Justice Alito for a five-justice majority; the Chief Justice concurred in the judgment in part and dissented in part.

In intra-state disputes brought in the original jurisdiction of the Supreme Court, the Court demands a “compelling interest” before allowing a non-state party to intervene in what is otherwise a sovereign dispute between two states. The Court held, however, that “any equitable apportionment of the river will need to take into account the amount of water that Duke Energy needs to sustain its operations and provide electricity to the region, thus giving Duke Energy a strong interest in the outcome of this litigation.” As to Catawba River Water Supply Project, the Court held that it had unique interests because half of its customers are North Carolina residents and half South Carolina residents. The Project also relies on authority granted by both states to draw water from the Catawba River. The Court rejected the motion to intervene of the City of Charlotte, North Carolina, reasoning that its interest was not sufficiently unique that it could not be effectively represented by North Carolina.

The Chief Justice concurred in the denial of Charlotte's motion to intervene but dissented from the grant of intervention to Duke Energy and the CRWSP on the basis that the Court has never before granted intervention to a non-sovereign entity in an original action for equitable enforcement of water rights.

Fourth Circuit applies Iqbal to affirm dismissal of another complaint

By Gary Beaver

On December 29, 2009, in Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., the Fourth Circuit again applied the heightened standard for adjudicating a Rule 12(b)(6) motion to dismiss set forth by the United States Supreme Court in Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009). In Nemet, the defendant was a website that allowed consumers to comment on the quality of businesses, goods, and services. Plaintiff Nemet took offense to 20 of the comments posted on the website and sued Consumeraffairs.com for defamation and tortious interference with a business expectancy. Consumeraffairs.com countered that the complaint was barred by § 230 of the Communications Decency Act of 1996 (“CDA”), which protected interactive computer service providers liable for the publication of information created and developed by others.

Nemet asserted that the defendant was not protected by the CDA immunity because it was also an “information content provider.” The court reviewed the plaintiff’s complaint to decide whether the allegations plausibly showed that the defendant was an “information content provider.” Nemet alleged that Consumeraffairs.com was involved in creating or developing the posts in four ways: (1) through the structure and design of the website as found in Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157, 1174 (9th Cir. 2008); (2) by asking the consumer questions about the complaint; (3) by helping the consumer draft or revise the complaint; and (4) by drafting 8 of the 20 posts itself.

The Fourth Circuit distinguished the Roommates.com case by holding that Consumeraffairs.com had not encouraged illegal content and not required consumers to input illegal content. In Roommates.com, the court had adopted a definition of “development” that included “materially contributing” to a piece of posted information’s “alleged unlawfulness. 521 F.3d at 1167-68.

Next, the Court noted that asking questions of the consumer did nothing to “develop” or “create” the posts on the website so those allegations were insufficient. As to the third category, the court held that Nemet had “not pled what Consumeraffairs.com ostensibly revised or redrafted or how such affected the post,” i.e., the allegations were “threadbare and conclusory.” In addition, under Zeran v. America Online, Inc., 129 F.3d 327, (4th Cir. 1997), Nemet was required to, but did not, plead facts to show that alleged drafting or revision was more than the usual editing that website operator performs.

The Fourth Circuit found the last allegation – that Consumeraffairs.com had itself fabricated 8 of the 20 complaints – to be merely Nemet’s speculation because the sole basis for the allegation was that Nemet could not identify the author of those 8 posts. Nemet wanted to take discovery prior to a dismissal but the Fourth Circuit quoted Iqbal in holding that Rule 8 requires “more than conclusions” to “unlock the doors of discovery for a plaintiff.”

This case comes on the heels of the Fourth Circuit’s application, on December 3, 2009, of Iqbal’s heightened pleading standard to affirm dismissal of the complaint in Francis v. Giacomelli. These decisions should make it easier to obtain dismissals of speculative claims – at least in the federal courts of the Fourth Circuit.

Mohawk Industries-U.S. Supreme Court prohibits interlocutory appeals of discovery orders piercing attorney-client privilege

By Gary Beaver

On December 8, 2009, in Mohawk Industries, Inc. v. Carpenter, the U.S. Supreme Court (in Justice Sotomayor's first opinion) restricted the methods by which an appellant could have the federal appellate courts immediately review a discovery order through which a federal district court overrules the appellant's claim of attorney-client privilege as a basis for withholding discovery information and orders the production of such information. The appeal in Mohawk was taken under the collateral order doctrine of 28 U.S.C. Section 1291 -- an avenue that is now unavailable for interlocutory appeal of such prejudgment discovery orders. In essence, the Mohawk Court held that discovery orders piercing the attorney-client privilege would not imperil "a substantial public interest" or "some particular value of a high order" -- the usual tests for allowing interlocutory appeal of a collateral order. The Court noted that there are other methods of making an interlocutory appeal of a discovery order including: (1) obtaining the district court's certification and appellate court's acceptance of a "controlling question of law" the prompt resolution of which "may materially advance the ultimate termination of the litigation;" (2)petitioning for a writ of mandamus; (3) defying the order and being held in contempt as contempt orders are immediately appealable if the level of a criminal punishment; and (4) defying the order and having your pleadings or defenses stricken. Big dice to roll in using those last two methods.

It is not clear what, if any, impact the ruling will have on state courts as the Mohawk appeal was taken under a federal statute. However, the logic of the Court likely could be applied by state appellate courts. The question of "would be applied" is more difficult to answer. In North Carolina, the Court of Appeals has not shown any reluctance to dismiss appeals of decisions on discovery issues because they are interlocutory and do not deprive an appellant of a substantial right that would be lost unless immediately reviewed. However, there is a line of precedents holding that interlocutory discovery orders like that in Mohawk requiring a party to produce to the opposing party material purportedly protected by attorney-client privilege and/or attorney work product immunity are immediately appealable. The N.C. Court of Appeals rarely dismisses such an appeal. It dismissed such an appeal in Stevenson v. Long, 558 S.E.2d 215 (2002) but only because it concerned refusing to answer deposition questions and the appellant failed to provide the questions to the lower court for review and a decision on the application of the claimed privilege, i.e., the appellant did not carry its burden of showing the privilege applied. I would not expect the NC appellate courts to reject that line of cases and follow the Mohawk Court's lead any time soon.