Summary Judgment and Rule 56(d)

courthouse_louisville
The Gene Snyder U.S. Courthouse and Custom House in Louisville, Kentucky

Federal Rule of Civil Procedure 56 allows you to file a summary judgment motion at any time until 30 days after discovery closes. But if you’re feeling lucky (or better, well-prepared) the rule lets you file any time before then. The risk with moving for summary judgment before discovery’s closed is that the other lawyer has an easy way to defeat your motion—a way spelled out in Rule 56(d).

Rule 56(d) allows a party to defeat a motion for summary judgment by showing that “for specified reasons[] it cannot present facts essential to justify its opposition . . . .” You may show this by “affidavit or declaration.” The judge can then defer or deny the motion, allow further discovery or “issue any other appropriate order.”

It’s easy to see why Rule 56(d) can be useful when defending against summary judgment. But for the rule to be useful, you have to use it correctly. The Sixth Circuit recently ruled in a case that serves as an example of how to lose Rule 56(d)’s usefulness.

Rama and Mohana Arla sued their insurance company after the company refused to pay the full amount of their insurance policy when fire destroyed the Arlas’ home. The Western District of Kentucky bifurcated the case based on two sets of issues, then issued two summary judgments in favor of the insurance company. The Sixth Circuit affirmed in a short per curiam opinion that adopted the district court’s opinion.

But a third issue remained: the Arlas’ claim that the district court should have allowed more discovery before issuing one of the summary judgment orders. The Arlas’ opposition to the final motion for summary judgment argued that they would “be able to provide additional evidence through discovery and at trial” that would defeat summary judgment. The Sixth Circuit held the Arlas had waived their Rule 56(d) argument.

Even though the Arlas never filed a formal “affidavit or declaration,” they still could have preserved the objection. The court of appeals noted that even “if a party does not satisfy Rule 56(d)’s technical requirements” of an affidavit or declaration, they can still make the argument as long as they “at least affirmatively demonstrate that the discovery sought would enable [them] to adequately oppose the motion for summary judgment.”

But the Arlas had “twice asserted that they could defeat the motion with the evidence they had in hand.” On top of that, the Arlas had never explained what evidence they hoped to get or why they were unable to get it—after their lawyer agreed to a deadline for the summary judgment motion then “did nothing to accomplish, or demand additional time for, discovery in that interim period.” The Sixth Circuit held that the trial court did not abuse its discretion when it granted the summary judgment motion without additional discovery.

So if you think you need evidence to defeat a summary judgment motion, tell the trial court. Better yet, tell the trial court and request that evidence. (And it probably wouldn’t hurt to prepare an affidavit for your Rule 56(d) opposition either.)

The Sixth Circuit’s opinion is here.

Looking for the final judgment: When judgment is “constructively entered” for deadline to appeal

Ninth Cir. San Fran.
The James R. Browning U.S. Court of Appeals Building, the Ninth Circuit’s home in San Francisco

Federal district court judgments can appear a bit metaphysically fuzzy, at least when you’re looking at the docket to figure out if your appeal is due. Of course, you already know that your notice of appeal is due 30 days after judgment is entered. And Federal Rule of Civil Procedure 58(a) requires a jury-verdict judgment to be entered “in a separate document.”

But what if that separate document hasn’t appeared? Where—or rather, when—is your final judgment? Well Rule 58(c) states that “if a separate document is required” judgment is entered on the day that “the judgment is entered in the civil docket . . . and the earlier of these events occurs: (A) it is set out in a separate document; or (B) 150 days have run from the entry in the civil docket.” And if all that seems relatively straightforward, the Ninth Circuit Court of Appeals agrees.

Harrison Orr was pulled over by the California Highway Patrol after his car veered halfway into the next lane. Orr passed a breathalyzer test but agreed to come down to the highway patrol station for drug testing as long as he wasn’t handcuffed. One of the officers used force to get the handcuffs on Orr. Orr passed the drug test, the DA dropped a resisting arrest charge, and Orr sued the state, the Highway Patrol, and the two officers.

On June 17th, 2015, the jury returned a special verdict awarding Orr $125,000 in damages against one of the officers, Terrence Plumb. The clerk entered the special verdict on the docket that day, with a minute order stating “verdict returned, read and filed in favor of plaintiff.” Plumb filed a motion for judgment notwithstanding the verdict, which the district court denied on July 8th, 2015. On January 4th, 2016, Plumb filed a notice of appeal of the special verdict.

The Ninth Circuit denied the special verdict appeal as untimely (over Judge Rawlinson’s dissent). Because there was never any separate document setting out the judgment, the 150-day clock in Rule 58(c) started running the day the clerk entered the jury verdict on the docket. Plumb’s appeal was due December 2015, and he filed the appeal in January 2016.

Plumb argued that the clerk’s docket note couldn’t have triggered the 150-day period “because the district court didn’t approve its form and the clerk didn’t enter it on a separate document as required by Rule 58(b)(2).” The Ninth Circuit rejected this argument because Rule 58(c) allows a judgment to be “constructively entered” even if the separate document hasn’t been issued. (Judge Rawlinson’s dissent would have held the appeal deadline doesn’t start to run until the separate document has been issued.)

Read the Ninth Circuit’s decision (and Judge Rawlinson’s dissent) here.

Injury enough for Article III: Ninth Circuit holds risk of identity-theft gives standing

Zappos HQ (old city hall)
Zappos’ Las Vegas Headquarters (and the old Las Vegas City Hall)

Breach Level Index reports that an average of 59 personal data records are stolen or lost every second. But not every data breach shows up on the credit card bill next month. So when is a breach enough to support a federal case? The Ninth Circuit recently confirmed that the risk of identity theft alone is enough.

Several years ago, Zappos.com (an online shoe and clothing retailer owned by Amazon) was hacked. The hackers stole personal information from more than 24 million customers, including credit card numbers. Some of those customers filed class-action lawsuits. Several cases were consolidated in the District of Nevada, where Zappos is based. One class of plaintiffs alleged that the breach had exposed them to a greater risk of identity theft. The district court dismissed these claims for lack of standing because these plaintiffs had not alleged any financial harm as a result of that increased risk of identity theft.

The Ninth Circuit reversed, noting that an earlier lawsuit against Starbucks had found that the risk of identity theft was injury enough for Article III. The plaintiffs had alleged the same injury in the suit against Zappos: The information stolen from Zappos “gave hackers the means to commit fraud or identity theft . . . .” The court also noted that Congress had singled out credit card numbers for protection, banning retailers from printing them on receipts “specifically to reduce the risk of identity theft.” Because the personal nature of that information created a risk of identity theft the plaintiffs had standing to sue.

The Ninth Circuit also rejected Zappos’ argument that too much time had passed since the breach for any harm to be imminent. The court noted that when looking at the requirements of standing the only relevant time period is the time when the action was brought. And the “initial complaint against Zappos was filed on the same day that Zappos provided notice of the breach.”

The Ninth Circuit is in step with the other circuits on Article III and the risk of identity theft. The Sixth Circuit, for example, delivered a similar ruling in a claim against Nationwide in 2016, citing the Ninth Circuit’s decision in the Starbucks case—although the Sixth Circuit also noted that the plaintiffs were going to have to spend time and money on credit-monitoring.

You can read the Ninth Circuit’s opinion here and the Sixth Circuit’s opinion here.