At 7th Circuit, unseen judicial mechanics drive decisions: new paper

December 3, 2014

Are judges in the 7th U.S. Circuit Court of Appeals quietly taking advantage of their unusual assignment system to effect particular results?

Last week, for example, three 7th Circuit judges ruled that Motorola Mobility may not bring antitrust claims against manufacturers of liquid crystal display screens that sold parts to Motorola’s foreign subsidiaries, despite Motorola’s arguments that the supposedly overpriced screens ended up in phones sold in the United States. The 7th Circuit opinion, written by Judge Richard Posner for a panel that also included Judges Michael Kanne and Ilana Rovner, concluded that (to simplify ruthlessly) Motorola’s foreign subsidiaries were allegedly injured in foreign commerce outside the reach of U.S. antitrust laws.

The composition of the panel provided a pretty good indicator of that outcome. This wasn’t a first pass at the Motorola case for Judges Posner, Kanne and Rovner. As you may recall, the same three judges originally affirmed the dismissal of Motorola’s antitrust claims last March – when the only briefing they’d seen in the case addressed Motorola’s motion for leave to appeal the dismissal, not the merits of the appeal. That decision led to strange confrontations between Judge Posner and the Justice Department, which supported Motorola’s request for rehearing by the entire 7th Circuit; and between the Posner motions panel and Motorola, which argued that the judges had disrupted the rules of federal appellate procedure by deciding the merits of a case that was only before them on a motion for leave to appeal. Eventually, the Posner motions panel agreed to vacate its ruling and schedule the Motorola case for a full hearing on the merits.

The merits case was not, however, randomly assigned to a new panel of appellate judges as it would be in most federal circuits. Posner, Kanne and Rovner – the same three judges who had previously dismissed Motorola’s case based just on motions briefing – opted to retain authority over Motorola’s merits appeal.

That procedural oddity, as well as other concerns about 7th Circuit motions panels, prompted Edward Whelan, a former U.S. Supreme Court clerk and president of the Ethics and Public Policy Center, to ask a series of questions about the circuit’s assignment procedures on Monday at the National Review’s Bench Memos blog. Whelan received detailed answers from the 7th Circuit’s two most recent chief judges, Judge Diane Wood, who is now the top judge in the circuit, and her predecessor as chief, Judge Frank Easterbrook.

Judges Wood and Easterbrook both said that in the 7th Circuit, motions panels have almost complete discretion to decide whether they will also hear the merits of appeals they have allowed to go forward. “The principal consideration is whether the panel has gotten deeply enough into the merits that it would be sensible to continue, rather than require three other judges to learn the case from scratch,” Easterbrook wrote to Whelan. “This isn’t written in any rule or operating procedure, but it has been the court’s practice since I was appointed in 1985.”

Chief Judge Wood said she couldn’t recall a single instance in which a chief judge overruled motions panel judges who said they also wanted to hear the merits appeal. In fact, according to Easterbrook, the chief judge gets involved only in those rare instances when panel judges can’t reach consensus about whether to keep the merits case.

Whelan’s original Bench Memos post asked whether 7th Circuit judges were “seizing” merits appeals via motions panels. Easterbrook and Wood implied that the 7th Circuit’s system is not about seizing control but all about efficiency. If judges who are already familiar with an appeal from motions briefing want to stay on the case, the judges said, they’ll save other judges’ time and produce a quicker result. Easterbrook specifically told Whelan that neither lawyers nor judges can manipulate the system because motions panel assignments are made public less than a week in advance, and the panel that first receives a motion sticks with it until the motion is decided. “Effectively locking a case to a panel by the date the motion is filed means that the process produces a random distribution of assignments over the year,” Easterbrook said.

But in a new working paper for a forthcoming issue of the U.C. Davis Law Review, a law professor at the University of Georgia contends that 7th Circuit judges can indeed manipulate the circuit’s unusual assignment system to set precedent in areas they want to influence. In “Superstar Judges as Entrepreneurs: The Untold Story of Fraud-on-the-Market,” the professor, Margaret Sachs, examines how Judges Posner and Easterbrook set precedent on class certification in securities class actions, especially after Rule 23 of the Federal Rules of Civil Procedure was changed to permit interlocutory appeal of class certification decisions from trial courts. All 17 of the 7th Circuit’s first reported opinions on interlocutory class certification appeals, according to Sachs, were written by Judge Posner or Judge Easterbrook. She says that dominance is anything but a coincidence.

Sachs argues that the two judges were able to shape precedent in part by retaining merits appeals of cases they agreed to hear as motions judges. Eleven of the 7th Circuit’s first 17 opinions on interlocutory class certification, she said, came in cases in which either Posner or Easterbrook served on a motions panel and went on to hear the merits of the case. In any federal circuit except the 7th, Sachs said, that would not have been possible. “If the motions panels had instead surrendered the appeals for reassignment to merits panels, the prevailing pattern in every other circuit, some percentage of the merits panels would almost certainly not have included Judge Easterbrook or Judge Posner,” she wrote.

Sachs calls Posner and Easterbrook superstars, but she nonetheless finds “worrisome” their apparent exploitation of the assignment system. “Judges Easterbrook and Posner typically presented an efficiency rationale,” she wrote. “While plausible as far as it goes, this rationale fails to take account of the arguable appearance of impropriety that the retention creates. Indeed, when deciding to grant a petition, the motions panel may develop a view about how the appeal should be resolved. Retaining the appeal for decision enables the motions panel to make that resolution the law of the circuit.”

There’s no federal policy against the self-selection that 7th Circuit motions panels can engage in, Sachs says, but all of the other circuits and considerable academic research support the entrenched practice of selecting appellate merits panels randomly.

I emailed Sachs’ working paper to Judges Posner and Easterbrook. Judge Easterbrook emailed me back to reiterate some of what he said to Ed Whelan: “Every judge … has an equal opportunity to handle cases in which a litigant seeks interlocutory review and an equal opportunity to decide whether a given case should be retained for resolution on the merits,” he wrote.

Judge Easterbrook said he has not read Sachs’ article and does not plan to respond to it. “Judges allow their decisions to speak for themselves,” he wrote. “I’m happy to describe the court’s procedures, which I did for the NRO blog (and have done in response to several scholarly inquiries), but do not think it appropriate to discuss particular decisions or legal doctrines.” Professor Sachs, he added, “did not ask me for a description of the court’s procedures, and a quick glance at the article suggests that she did not appreciate the role that the motions judge, rather than the panel’s most-senior judge, plays in CA7 motions practice.”

Judge Posner emailed to say he had “nothing to add to Judge Easterbrook’s post in the Bench Memos blog.”

(This post has been updated to add comment from Judge Posner.)

(This post has been corrected. A previous version misspelled Edward Whelan’s name.)

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