 The Federal Judicial Center presents Supreme Court 1998-99, The Term and Review, an FJTN program for judges, staff attorneys, and law clerks. Now from the television studios of the Federal Judicial Center in Washington, D.C., your moderator, Russell Wheeler. Welcome back to this third and final part of the Federal Judicial Center's review of the 1998-99 Supreme Court term. This part of our review will last about 40 minutes. We'll review cases involving jurisdiction and standing and two areas that have become staples in the court's docket in recent years, habeas and federalism. Another area that the court has revisited several times is expert evidence and the trial judge's responsibility to ensure its relevance and its reliability. Let's start with a special focus segment we prepared on the sumho tire versus Carmichael, decided last March. When a tire blew out on Patrick Carmichael's minivan, the accident killed one passenger and severely injured several others. The Carmichael's filed a diversity action in the Southern District of Alabama, alleging that the tire was defective. The case rested heavily on the deposition testimony of a tire expert, but District Judge Butler excluded the expert's evidence based on the Supreme Court's 1993 decision in Daubert Meryl Dau Pharmaceuticals. What is the federal trial judge's gatekeeping obligation in the wake of Daubert? More specifically, does Daubert, which involves scientific testimony, extend a testimony of experts who are not scientists to testimonies such as that of the tire expert to which Judge Butler applied Daubert? And what is the standard of review? Last year, in GEV Joiner, the Supreme Court held that the Court of Appeals must apply an abuse of discretion standard when reviewing the district court's decision to admit or exclude expert scientific testimony. Does that standard apply to non-scientific expert testimony? In CUMO, in an essential unanimous opinion by Justice Breyer, the court said, first, federal rule of evidence 702 imposes a special obligation for trial judges to assess the evidentiary reliability of all expert testimony. In other words, 702 does not distinguish between scientific knowledge and what the rule calls technical or other specialized knowledge. Therefore, Daubert's general principles apply to all expert testimony. Second, the Court of Appeals must apply an abuse of discretion standard when reviewing all district court decisions on admissibility of expert testimony. What does CUMO mean for trial judges? We've asked Joe Cecil, who directs the Center of Science and Technology Project, to help us understand the case and its implications. Welcome, Joe. I'm glad to be here. Joe, at the center's workshop for district judges, there was a session on evidence, a plenary session. Almost all the questions were about CUMO, though. What's the message for district judges in this opinion? Well, CUMO expands the gatekeeping role for district judges to all expert testimony. Now judges must assess the underlying reliability of expert testimony that's based on technical and specialized knowledge, as well as scientific knowledge. Daubert, of course, as all judges know, set forth these four factors that judges might use in assessing scientific evidence. Has it been suggested to peer review? Is it accepted within the scientific community? Has it been tested? Is there an error rate? Now, are the judges going to have to take those standards and take them over to this other area of testimony that CUMO brings within Daubert? Well, not necessarily. CUMO allows judges a great deal of flexibility in deciding which factors are appropriate in specific cases. Some judges may choose to adapt the Daubert factors to evidence that is not traditionally considered scientific. For example? Well, I think accounting is a good example. Prior to CUMO, a number of courts chose not to apply the Daubert factors to accounting. Now those courts may wish to adapt some of these factors in considering accounting evidence. For example, I think factors such as general acceptance and peer review can easily be interpreted to support measuring accounting testimony against the conventions and standards of accounting practice. But some of the evidence that the CUMO decision was about, you don't think are susceptible to Daubert's traditional analysis? Well, I think that's right. And in these cases, the general lesson of CUMO is that judges should look to the intellectual rigor of the opinion, and the opinion should be tested against the standards and practices. What are some examples of these areas that... Well, I think medical testimony is a good example. This is very common in federal courts. Prior to CUMO, a number of the courts chose, well, they would inquire in different degrees to a physician's testimony when the testimony was based on traditional medical practice. Now those courts may require more support. Another example? Well, I think forensic evidence is another example. Some areas of forensic evidence such as handwriting analysis, bite mark analysis, ballistics, these are not well grounded in the conventional practices of scientific methodology, and they may be vulnerable to challenge under these emerging standards. So you say here that the basic rule is bring the... Make sure the expert brings the same intellectual rigor that he or she would have outside the courtroom into the courtroom. That leaves me to ask a question about the opinion of Justice Breyer, the opinion itself. It is replete with lessons about tires and the expert's testimony in this case. Do you know why he did that? Well, I think he used this extraordinary level of detail to illustrate that the tire expert in CUMO did not provide expert testimony to permit the standards of intellectual rigor that are appropriate for experts outside the courtroom, tire experts or tire engineers who are practicing in industry. I don't know that every decision will require this level of detail, but it is appropriate to include sufficient detail to permit the expert testimony to be measured against the standards of professionals who are working outside the courtroom. Would you say for... Why don't you say that what Justice Breyer offers is an example of what may be necessary in some cases, but not a standard judges have to apply in all cases? Well, I think that's right. Judges have a great deal of discretion in the standards they choose to apply. Remember, the judges' decision is going to be tested against an abusive discretion standard, and this permits a judge a great deal of latitude in deciding what factors are appropriate to the individual case. Is the abusive discretion standard going to mean that we'll have different standards of admissibility over the country, even within circuits? Well, it may. It may decide to use different factors in considering very similar evidence, and it's not clear the extent to which the courts of appeals, even under an abusive discretion standard, will permit similar evidence to be treated in dissimilar ways. One other thing. The discretion we're talking about here, of course, is not a total discretion. You'll recall Justice Scalia filed one paragraph concurrence in which he said it's not discretion to abandon the gatekeeping function, or he said even to perform it inadequately, and I think that's worth keeping in mind. Joe, Justice Breyer's opinion contains some discussion of the procedures courts might use under Kumo. Could you say a little bit about the procedures? I think judges should expect to see more motions and lemony challenging expert testimony, and judges will then have to decide how to respond to these motions. In the opinion, Justice Breyer noted that in cases involving complex evidence or novel evidence, it may be necessary to hold a separate hearing to adequately explore the basis of the testimony. But in most cases, these issues should be resolved based on the affidavits and other materials presented with the motions. Judges may also want to encourage stipulations in areas where the evidence doesn't appear to be problematic. I want to ask you a question about Rule of Evidence 702 and the changes that the Advisory Committee was working on before Kumo. Where do those changes stand now? Well, on June 15th, the Standing Committee approved the proposed amendments and forwarded them onto the Judicial Conference. They'll be considered by the Judicial Conference at its fall meeting. If the amendments go forward without change, they should take effect in December of the year 2000. And assuming they do take effect, assuming Congress imposes no objection to the Supreme Court, can district judges expect a different life under the new Rule 702? Well, they shouldn't expect great changes out of the rules. The purpose of the rule is to bring the standards into compliance, to bring the rules into compliance with the standards that have grown up since Dalbert. I see. One final question, if I may. I want to ask you about the Center's Reference Manual on Scientific Evidence. The first edition came out in 1994. I know you're working on the second edition. What can we expect and when can we expect to see it? The new edition of the Reference Manual will be available at the end of the year. Justice Breyer is writing an introduction to the manual. He agreed to write this before the Kumo opinion. We also include a chapter on the issues that remain unresolved in the wake of Kumo. We'll have updated reference guides, along with new reference guides, on medical testimony and engineering testimony. Okay, we'll look forward to that towards the end of 1999. That's correct. Thanks very much, Joe. Let's turn now to this term's cases on Jurisdiction and Standing. Joining me for a discussion of these cases are Susanna Sherry of the University of Minnesota Law School and John Yu of the University of California at Berkeley, Bolt Hall School of Law. Welcome back, both of you. John, the last 20 years we've seen a lot of discussion in federal courts about the bar about discovery, abuse, whether it exists, and the extent of sanctions that are appropriate. This case of Cunningham versus Hamilton County, Ohio involved an immediate appealability issue of a discovery sanction. How did that come out? This is a pretty easy case for the court. 9-0, Justice Thomas writing, saying that discovery sanctions orders cannot be immediately appealed under the collateral order doctrine, which allows certain types of orders, usually ones that are separate from the merits, and finally decided as to that particular issue to be appealed immediately. Instead here, the court said that because discovery sanctions orders are so tied into the merits of the case itself that you have to wait for a final judgment before they can be appealed. John, this is consistent with the Supreme Court's recent trend in finding fewer and fewer things to be collateral orders. What effect will it have on district courts? I think this will give district courts even more freedom to manage discovery and it probably therefore will lead to more efficient discovery practice and procedures in the district courts. Thanks very much, John. Susanna, two cases involving the removal provision on the federal civil rules. Rourgas versus Marathon seem to raise again an issue we've seen in earlier terms, and that is the court's reconciling loyalty to jurisdiction rules with interest of judicial efficiency. How did this one come out? Well, in this case, efficiency one. Rourgas involved a case that had been removed from state court and the federal district court dismissed it for lack of personal jurisdiction without ruling on a much more difficult issue of subject matter jurisdiction and the Supreme Court approved that and said that the court did have the flexibility to decide the personal jurisdiction issue without deciding the subject matter jurisdiction issue. Susanna, do you think this case is consistent with the case a few terms ago, Caterpillar versus Lewis? Yes, it's very much in keeping with Caterpillar. In that case, as you recall, the case should have been remanded for a defect in subject matter jurisdiction but by the time of the trial the defect had been cured and the Supreme Court said that that was all right, that they didn't have to reverse at that point. It could be a little inconsistent with a case from last term, the steel company versus citizens for a better environment case in which the court rejected the doctrine of hypothetical jurisdiction and said that courts could not reach the merits without first addressing all issues of jurisdiction. The court distinguished that in the Rourgas case by saying that steel company involved the merits and this case involves two different questions of jurisdiction. And then there's the case of Murphy Brothers versus Machete. This was another case involving the removal of state cases to federal courts. How did that come out? Well, this was another case that started in state court and in this case the plaintiff had served the defendant with a courtesy copy of the complaint before actually serving the summons and then the defendant removed to federal court more than 30 days after receiving the courtesy copy but less than 30 days after receiving the summons and the question was whether there was jurisdiction. It's the section 1446 30 day period does not begin to run until the defendant has both the summons and the complaint and then they saw in this case the jurisdiction was proper and then they ran through some permutations depending on state law and they said that were both the summons and the complaint need to be served together. That's when the period starts running where the complaint doesn't have to be served until after the summons the period does not begin to run until the complaint has also been served and a few states where the complaint need not be served at all but only filed then the period starts to run after the summons has been served and the complaint has been filed and is therefore available so the basic rule is the defendant has to have both the complaint and the summons before the period starts to run. And Justice Ginsburg laid all this out in the opinion now it's clear for all the circuits. I think she answered basically all of the questions. Thanks Susanna. John, we had this case of Ortiz versus Fiberboard and this is asbestos class action is back in the court again it's a terribly complex case. Could you summarize the essence of it and what Justice Souter said for the court here? Sure unlike Susanna's cases here the court is not drawing bright lines they're going to solve everything for the future. Here this is a case between 45,000 claims represented by plaintiffs lawyers involving asbestos and the Fiberboard Corporation and its insurance companies and the two parties come to a settlement where Fiberboard agrees to create a sum of $1.5 billion to be used to pay out for all these asbestos claims and ask for the district court to certify it as a mandatory class action under what's called a limited fund theory under federal rule 23 B1B. Here the court holds 7 to 2 Justice Souter writing that this does not qualify for a 23 B1B treatment and so sends it back to the district court. Is this really just a settlement fund called a limited fund? Is that the way you see it? Right in fact the reason the court rejects this is because it says this doesn't come close to meeting what a limited fund is supposed to be a limited fund is usually a fund with a fixed limit that cannot pay all the claims out but which can give out a distribution on some kind of pro rata share based on a common theory of liability. Here the problem was that the plaintiffs and the defendants had settled as to the amount of the fund rather than the district court finding what the fund's extent actually was. You still had in the opinions the majority opinion by Justice Souter and a concurring opinion by the Chief Justice and on knees about this and really a pleading for Congress to take some action and then Justice Breyer descended saying I think well Congress isn't going to take any action it's for the appellate courts to provide district judges as much leeway as that continuing. How do you think this case is going to come out as going back to the district? Unfortunately I don't think this case really solves a whole lot in terms of asbestos because what will happen will go back and the plaintiffs lawyers and the fiber work corporation will come to some kind new settlement and this time ask the district court judge to actually make a fact finding as to the size of the fund and that will meet the Supreme Court's test here so then it will go back up to the Supreme Court next year in a couple of years. Thanks John and thank you Susanna. We'll turn next to the major habeas case decided this term and we'll look briefly at an important case to be cited next term in the habeas area. There were far fewer habeas cases this term than last term. We'll review one of them and then we'll preview a habeas case the court recently granted certiori on. Evan Sen Lee and Jordan Stiker return to tell us about these cases welcome back to both of you. The habeas case we're going to talk about Evan is O'Sullivan versus Borel which came from the 7th Circuit. The Supreme Court wanted to make sure that state supreme courts had a shot at state petitioners complaining about proceedings in the state courts. What happened here was the defendant asserted six constitutional claims before the Illinois trial court same six constitutional claims before the intermediate appellate court and then when he went to the Illinois Supreme Court he asserted the constitutional claims. The Illinois Supreme Court denied hearing. He went to the federal district court to petition for habeas and asserted the original six claims. Federal district court felt it had no choice but to declare that he had procedurally defaulted the three claims that he had not brought before the Illinois Supreme Court. Well writing for a six to three majority justice O'Connor characterized the issue as whether the exhaustion doctrine requires petitioners to ask for hearing in the state supreme court which of course has discretionary jurisdiction and the court held yes that the exhaustion doctrine does require such a petition. What about the south carolina rule the justice suitor pointed to where the south carolina supreme court says explicitly you don't have to come here to exhaust your state remedies. Well the court noted that states can protect their supreme courts from any flood of petitions simply by making relief unavailable in the state supreme court. I think justice suitor's concurrence is an attempt to soften the majority's language on that by suggesting that maybe state supreme courts don't have to go so far as to make relief completely unavailable it might be enough if state supreme courts say that it is not necessary for petitioners to come to the state supreme court in order to exhaust. And in this case is nominally about exhaustion but does it really affect procedural default doctrine? I think it does because until now the rule has always been that at least in the first instance what constitutes a procedural default is a matter of state law the federal courts have never treated something as a procedural default if the states themselves wouldn't have treated it as a procedural default. But that is what happened in this case. So we'll have to see. Thanks very much Evin Jordan you call our attention to Williams v. Taylor this is not a case the court decided it's a case in which they grant a certiorary but you think it has pregnant with implications for the habeas act. Yeah this could be an extraordinarily important case it's really going to be construing the heart of the 1996 Anti-Terrorism and Effective Death Penalty Act. The core question in this case is how much deference the federal court a state court decision construing federal law. The language of the AEDPA says that a federal court should not overturn a state court judgment unless the decision was contrary to or an unreasonable application of clearly established federal law as measured by the Supreme Court. That language has obviously a number of terms that need fleshing out the circuits have disagreed tremendously on the meaning of each of those portions of that language and so this case really gives the Supreme Court an opportunity a much anticipated and much needed opportunity to shed some light on the core AEDPA provision. Well we'll watch for that case next term and perhaps be discussing it here in a year. Thanks very much Jordan. I want to summarize three other cases in the civil area two orisa cases but more important I think the case that we thought would say whether a new value exception to the absolute priority rule survived the 1978 bankruptcy code. In 1994 it appeared that the bank court case would answer that question but bank court went off on jurisdictional grounds. This term Bank of America versus LaSalle Street partnership. An 8-1 decision, opinion by Justice Souter for five other members of the court appeared to be the vehicle for setting the new value exception one way or the other but again the court did not reach the matter. Now some background. The LaSalle Street partnership defaulted on a $93 million loan it had from the bank and filed for Chapter 11 reorganization. Its proposed plan eventually approved by the bankruptcy court would pay off the bank's secured claim of $55 million and discharge the rest of the debt at 16%. The plan also gave former partners an opportunity, an exclusive opportunity to contribute $6 million in new money in exchange for ownership of the reorganized debtor. The bank objected to a crammed down, citing section 1129's absolute priority rule. That rule says that when prior claimants aren't paid in full, junior interest holders can't receive property on account of their interest. The partner said the bank received property because of their status as prior interest holders. No said the partners. We received ownership on account of the new value the $6 million that we put up to keep the reorganized debtor afloat. Now the circuits are split on whether the absolute priority rule includes an exception to accommodate such offers of new value. But just a suitor would only say that that rule may include such an exception. There was no need to decide the question because the bank's objection required rejecting the plan regardless. Why? Because the plan provided former partners with property on account of their prior interest. What property? Not the ownership of the reorganized debtor, for which they put up new money, but rather the exclusive opportunity to obtain that ownership. That is to say the judge approved the plan without considering completing plans or even competing bids. That exclusivity meant that the partners obtained property on account of their old equity position. Now the court declined to tell judges how to ensure a market test of a proposed contribution of value. All it said was don't approve plans that provide opportunities free from competition and without benefit of market valuation. The two orisa cases were both unanimous, both from the Ninth Circuit, one grounded in California state law. Let me summarize them very briefly and then of course refer you to the decisions for a full idea of what the court did. Hughes Aircraft versus Jenkinson grew out of a dispute between beneficiaries of a Hughes retirement plan covered by Orissa and Hughes. Hughes after the market had pushed the plane's assets substantially higher than the value of accrued benefits amended the plan in various ways. A class action suit claimed various Orissa violations. In a point by point opinion just as Thomas said, first in a defined benefit plan as opposed to a defined contribution plan a beneficiaries interest is not diluted and Orissa is not violated by amendments to the plan that do not affect the vested interest of the beneficiary. Second, it's irrelevant for Orissa purposes that the employer may have benefited from employee contributions that were part of a pot that created a surplus as a result of an investment gain. It's irrelevant that is if as here employee benefits are not impaired. Third and finally the plan can be implemented only as provided in the Orissa statute and not implicitly in accordance with any common law trust rule of wasting trusts. Now Unum Life Insurance Company v. Ward is another in the long line of cases involving Orissa's preemption cause. The question here concerns the savings cause within Orissa's preemption cause the savings cause that exempts from preemption any state law that regulates insurance. Does the suggestion of California case law its so-called notice prejudice rule that subjects an insurer to liability even with a late claim unless the insurer can show prejudice from the delay in filing? Yes, California's notice prejudice rule is firmly grounded in what Justice Ginsburg called policy concerns specific to the insurance industry and that fact saves it from Orissa preemption. Now preemption of course is but one facet of many elements that collectively constitute the relations between nation and state federalism. This term like recent terms had its share of important federalism cases and we'll turn to those next. The boundaries of federalism have become one of the abiding interests of this court. We'll end our program with a review of the three big federalism cases this term. Some thoughts from our faculty on how the court's recent cases have changed the legal landscape and a look at some upcoming cases as well. With us for one last time are Susanna Sherry, Katherine Urbana and John Yu. Susanna, these three cases they all came down the same day, the last day of the term they were all five four cases with the same lineup in each of the cases and they all built one way or the other on the 1996 Seminole tribe case. Let's start off with the two cases that came out of a single litigation involving college savings bank in New Jersey and an agency of the state of Florida which came to the court from the third circuit and from the federal circuit. Can you put those cases together and tell us what the court said? Yes, the college savings bank sued the Florida prepaid post-secondary education expense board for both patent infringement and false and misleading advertising under the Lanham Act and the court held in both cases that the state agency was immune from suit despite Congress's attempt to abrogate that immunity in both lawsuits. Now the first thing the court did was to get rid of the doctrine of constructive waiver so that doctrine is now gone and then the court analyzed the cases under Seminole tribe and the city of Bernie versus Flores case determining what Congress's powers are under section five. The Lanham Act case was the easier case, the court held that there is no constitutional right to be free from misleading advertising and so of course Congress was not exercising its section five powers and therefore to abrogate according to Seminole tribe. The patent act case was a little more difficult because a patent is of course a property interest and the court recognized that but here's where the court elaborated on city of Bernie. They said that in order for Congress to be acting under section five it has to first identify a constitutional violation and then adopt a proportionate remedy for that violation. The problem with the patent act was Congress had no evidence of state violation of patents no infringement pattern and therefore no power to abrogate. Susanna, how is the court's assessment of Congress's record in finding no section five power for the lack of a sufficient record going to affect how federal courts view other federal statutes? I think it's very important for the cases that are wending their way through the federal courts right now cases on the Family and Medical Leave Act the Age Discrimination and Employment Act and the Americans with Disabilities Act in each of those cases in order to uphold the congressional abrogation plaintiffs will now have to show and of course courts will have to find that in enacting the abrogation Congress was remedying a pattern of constitutional violations by the state and not merely statutory violations. What are Congress's options after this case? Well in this case and in Alden which John will talk about in a moment the court cited Dolby South Dakota and said that although Congress can't abrogate the immunity they can condition funding on a state's waiver of the immunity and in a sense bribe the states into waiving their immunity. Thank you Susanna and as you mentioned we're going to ask you John to take up the last case Alden v. Maine as I said decided the same day this involved Congress's effort to authorize suits in state courts. In this case the same five for a majority as in the Florida cases Justice County writing holds that the Congress using its Article 1 powers states to suit in their own courts for damage actions. What does this case do beyond seminal tribe? This case is really quite an advance on seminal tribe in that for the first time the court really makes clear that state sovereign immunity is not linked to the Texas 11th Amendment which only applies to federal court rather state sovereign immunity is a structural principle in the Constitution itself further the court makes clear that to subject states unconsenting states of damages actions would allow the federal government to essentially hold state's hostages financially to federal policy. Can these suits go forward in other ways? I think that this case doesn't mean that federal law is going to be going unenforce throughout the country there are a number of options the court discusses in its opinion as to allow the execution law's powers still there and can be used to convince states to file federal law or to convince them to waive their sovereign immunity court. Second you can still file declaratory and injunctive relief cases against states third you can still file suits against cities, counties and other forms of sub-state governments. You can also file against individual state officers in their individual capacities for money damages. Well I think John there might be a problem in some cases not every statute necessarily authorizes a suit against the individual officers. For example the Fair Labor Standards Act which was at issue in the Alden case probably doesn't run against the individual officers. Thanks very much Susanna and John and thanks Kathy let me ask this question of all of you what's ahead in federalism what are we talking about next year that the Supreme Court's already granted third on in the 11th Amendment area and we'll probably talk about those one is Kimmel v. Florida Board of Regents involving the Age Discrimination and Employment Act and the other is Vermont v. U.S. X-Rail Stevens which involves key TAM actions. Well those are both 11th Amendment cases Susanna and as you know the court has also been moving in the area of enumerated powers of Congress how far do those go I wonder if those will also produce what we all already have before it the court has granted third on the case of the Fourth Circuit Condon v. Reno which deals with the Drivers Privacy Protection Act and there the court is going to revisit the question of Congress's power under the Commerce Clause and under Section 5 and the court may perhaps grant cert in one of the cases dealing with the Violence Against Women Act which also raises the same two issues Commerce Clause power under Article 1 and Section 5 power as well. So we'll be watching for all of those in the third and final part of this program on the 1998-99 Supreme Court term. We hope you have found this review helpful. Many thanks to the faculty for their summary and analysis and thanks to you not only for joining us but also for completing the evaluation forms that help tell us how we might improve future programs. One final note in preparing this program we have operated under the leadership of one of this country's leading federal judges Ria Zobel she now returns to Boston to resume her duties as a judge on the District of Massachusetts. She goes with the gratitude and best wishes of all of us at the Federal Judicial Center. Good day.