Reply Brief — Signet Bank/Virginia v. Yu

Supi ne Court Uwe.

FILED

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|

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No. 99-341 } «OCT 8 1999

pee #8 THE CLERK

In The

Supreme Court of the United States

*

SIGNET BANK/VIRGINIA, a Virginia corporation,

CAPITAL ONE BANK, a Virginia corporation,

and DOES 2-100,

Petitioners,

VS.

WILLIAM YU and DARLENE YU, individually

and on behalf of others similarly situated,

Respondents.

7 —

On Petition For Writ Of Certiorari To The

Court Of Appeal For The State Of

California First Appellate District

.

REPLY TO BRIEF IN OPPOSITION

+

Drew S. Days, III

| Counsel of Record

for Petitioners

Morrison & Foerster LLP

2000 Pennsylvania

Avenue, NW

Suite 5500

Washington, D.C. 20006

Telephone (202) 887-1500

James F. McCase

James R. McGuire

Morrison & Foerster LLP

425 Market Street

San Francisco, California

94105

Telephone (415) 268-7000

SHIRLEY M. HuFsTEDLER

Morrison & Foerster LLP

555 West Fifth Street,

Suite 3500

Los Angeles, California

90013

Telephone (213) 892-5200

Counsel for Petitioners Signet Bank/Virginia

and Capital One Bank

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

Page

SAR OP AUTRES once tsccvesveccucssacces ii

i pe it a RO ES oO Es ot ee a a ee 1

I. THIS CASE MEETS THE FINALITY CRITERIA IN

THE FOURTH COX BROADCASTING CATE-

1 AMAR 5 ESE | Rope Pian 5b SORE 2

A. Decisions on the Constitutional Questions

Here Have Been Finally Rendered by the

Highest Court of a State in which a Decision

8 ERE te a ae 2

B. Further Proceedings Following the Court of

Appeal’s Remand Will Not Require the Decision

of Additional Federal Questions That Might

Later Require Review By This Court.......... 3

C. The Court of Appeal’s Decision Erodes

important Federal Policies and Therefore

Requires This Court’s Review .............. 4

ii

TABLE OF AUTHORITIES

Page

Cases

Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977) ..... 2

California v. Trombetta, 467 U.S. 479 (1984)............ 2

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

tf Peer err err err rr re cry errs ot ae Se ee

Cox Broadcasting Corp. v. Cohn, 200 S.E.2d 127 (Ga.

| nan era ne nee pert neni Nine iit evan 5

Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46 (1989) ..... 3

Goodyear Atomic Corp. v. Miller, 486 U.S. 174 (1988) ...4, 5

Local No. 438 Construction & Laborers’ Union v.

Carry, S73 US. SES (ISG) be kisnescsvesaresssns vee. 6

Perry v. Thomas, 462 U.S. 463 (1967) occ ccccsnvecoeacss 2

Southland Corp. v. Keating, 465 U.S. 1 (1984).......... 4

STATUTES

Be ets Ee ebcceeseee: Set tninkeeane ene tere 1, 6

Be Oras OE Se inn 60 ea eae e eee eee 2

MISCELLANEOUS

Erwin Chemerinsky, Federal Jurisdiction, § 10.4 (2d

O60, TORE a occn ce cdccvieresnnedeereeeeenreeeeeins 1

Robert L. Stern, Eugene Gressman, Stephen M.

Shapiro and Kenneth S. Geller, Supreme Court

Potties (7s GR Tete xo 0a ccvsesun eins centers 1

INTRODUCTION

Respondents’ opposing brief is primarily an attack on

this Court’s jurisdiction.! Respondents argue that the

court of appeal’s judgment cannot be “final” within the

meaning of 28 U.S.C. § 1257 because the case was

remanded for further proceedings after the constitutional

questions were decided. In Cox Broadcasting Corp. v. Cohn,

420 U.S. 469, 479-486 (1975), however, this Court

described four non-exclusive categories of cases which

are deemed final for the purpose of section 1257, even

though further proceedings in lower state courts

remained when certiorari was sought.2 The Court

explained:

In most, if not all, of the cases in these catego-

ries, these additional proceedings would not

require the decision of other federal questions

that might also require review by the Court at a

later date, and immediate rather than delayed

review would be the best way to avoid “the

mischief of economic waste and of delayed jus-

tice,” Radio Station WOW, Inc. v. Johnson, [326

1 Petitioners did not receive Respondents’ Brief in

Opposition until October 1, 1999.

2 Although Respondents repeatedly refer to the four

categories of cases described in Cox Broadcasting as “exceptions”

to the requirement of finality, see Opposition at 8, those classes

are properly described “as situations in which [this Court] finds

there to be sufficient finality even though there are further

proceedings on the merits of the case in state court.” Erwin

Chemerinsky, Federal Jurisdiction, § 10.4, at 598 (2d ed. 1994). See

also Robert L. Stern, Eugene Gressman, Stephen M. Shapiro and

Kenneth S. Geller, Supreme Court Practice, at 94-96 (7th ed. 1993)

(discussing “literal and pragmatic concepts of finality”).

U.S. 120, 124 (1945)], as well as precipitate inter-

ference with state litigation.

Id. at 477-78.

In the third and fourth Cox Broadcasting categories,

“the federal issue would be mooted if the petitioner or

appellant seeking to bring the action here prevailed on

the merits in the later state-court proceedings, but there is

nevertheless sufficient justification for immediate review

of the federal question finally determined in the state

courts.” Id. at 478-79.

This case falls neatly within the fourth category of

Cox Broadcasting. Petitioners here might prevail on the

merits on nonfederal grounds, thus obviating the need

for this Court to review the federal issues presented.

Reversal of the court of appeal would preclude further

litigation, whereas a refusal to review the matter imme-

diately could lead to the serious erosion of federal policy.

See id. at 482-83.

I. THIS CASE MEETS THE FINALITY CRITERIA IN

THE FOURTH COX BROADCASTING CATEGORY.

A. Decisions on the Constitutional Questions Here

Have Been Finally Rendered by the Highest

Court of a State in which a Decision Could Be

Had.

Because Petitioners sought and were denied review

by the California Supreme Court (App. at 32), they have

met the first prong of the 28 U.S.C. § 1257(a) finality test.

Perry v. Thomas, 482 U.S. 483, 489 & n7 (1987); Abood v.

Detroit Bd. of Educ., 431 U.S. 209, 216 (1977); cf. California

v. Trombetta, 467 U.S. 479, 484 (1984).

B. Further Proceedings Following the Court of

Appeal’s Remand Will Not Require the Decision

of Additional Federal Questions That Might

Later Require Review By This Court.

As Respondents correctly concede, to prevail on their

state law claims, Respondents must still carry their bur-

den of convincing the trier of fact that they are entitled to

judgment on either of their remaining novel state law

claims. Apart from the constitutional questions presented

to this Court, Petitioners have asserted only state law

defenses to those claims. Immediate review is the best

way to avoid ” ‘the mischief of economic waste and of

delayed justice.’ ” Cox Broadcasting, 420 U.S. at 478.

If Petitioners prevail either because Respondents fail

to carry their burden of proof or because Petitioners’ own

state affirmative defenses prevail, this Court’s ability to

review the constitutional questions presented today will

vanish. Petitioners are thus situated similarly to those in

Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 55-56 (1989),

in which the Court granted review when defendants

could have prevailed on non-federal grounds at their

trial, thereby preventing appeal of the constitutionality of

the application of state RICO law to obscenity.

If this Court grants certiorari and reverses because

proper application of the Full Faith and Credit Clause

prohibits California from entertaining actions for dam-

ages predicated on a collateral attack upon the final and

fully executed judgment of Virginia, or if the Court

decides that California consumers are not a protected

class entitled to elevated due process protections, this

litigation would end because this Court’s judgment

“would be preclusive of any further litigation on the

relevant cause of action.” Cox Broadcasting, 420 U.S. at

482-83. See also Southland Corp. v. Keating, 465 U.S. 1, 6-8

(1984) (the California Supreme Court decision was

reviewable under the Cox Broadcasting fourth category for

“reversal of a state-court judgment in this setting will

terminate litigation oi the merits of this dispute”).

C. The Court of Appeal’s Decision Erodes Impor-

tant Federal Policies and Therefore Requires

This Court’s Review.

For the reasons explicitly stated in the Petition, the

decision below significantly erodes full faith and due

process principles established by this Court over a period

of many decades. See Cox Broadcasting, 420 U.S. at 485-86;

Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 178-80 (1988)

(the lower court’s “decision [had] important implications

for the regulation of federally owned nuclear production

facilities” and review of Ohio Supreme Court’s decision

was thereby final enough although further proceedings

were pending in Ohio courts).

This case is procedurally indistinguishable from Cox

Broadcasting itself in which the Court granted review to

decide “whether, consistently with the First and Four-

teenth Amendments, a State may extend a cause of action

for damages for invasion of privacy.” 420 U.S. at 471.

Petitioners seek review to determine whether, consis-

tently with the Full Faith and Credit Clause and the

Fourteenth Amendment, California may “extend a cause

of action” for abuse of process which requires California

courts to collaterally attack a final and fully executed

judgment of a Virginia court. In Cox Broadcasting Corp. v.

Cohn, like the court below, the Georgia court had rejected

petitioner’s constitutional challenges to state law and

remanded the case for trial. 200 S.E. 2d 127, 131, 133 (Ga.

1973). The Court held that the Georgia Supreme Court's

judgment was final on the federal issues and subject to

review:

Appellants . . . may prevail at trial on non-

federal grounds, it is true, but if the Georgia

court erroneously upheld the statute, there

should be no trial at all. Moreover, even if

appellants prevailed at trial and made unnecess-

ary further consideration of the constitutional

question, there would remain in effect the unre-

viewed decision of the State Supreme Court that

[the First and Fourteenth Amendments did not

prohibit the action]. .. . On the other hand, if we

now hold that the First and Fourteenth Amend-

ments bar civil liability .. . , this litigation ends.

Given these factors . . . we find that reaching the

merits is consistent with the pragmatic approach

that we have followed in the past in determin-

ing finality.

420 U.S. at 485-86.

Here, as in Cox Broadcasting, even if Petitioners

should prevail at trial on state law grounds, the court of

appeal’s decision on federal constitutional grounds will

remain effectively unreviewed and unreviewable. See also,

Goodyear Atomic Corp., 486 U.S. at 179 (“even if appellant

prevails . . . on nonfederal grounds... the unreviewed

decision of the Ohio Supreme Court might seriously

erode federal policy”). In Local No. 438 Construction &

Laborers’ Union v. Curry, 371 U.S. 542 (1963), this Court

heard petitioner’s claim that the NLRB had exclusive

jurisdiction over the controversy after the Georgia

Supreme Court had reversed a trial court’s refusal to

enter a temporary injunction against picketing. Although

further proceedings were pending following the Georgia

Supreme Court’s remand, this Court asserted its power

with respect to “a judgment of the [state] court finally

and erroneously asserting its jurisdiction to deal with a

controversy which is beyond its power,” holding that the

judgment satisfied the requisites of section 1257. Id. at

548.

The judgment below has the practical finality

required to invoke the jurisdiction of this Court pursuant

to section 1257. The questions raised are vital to the

constitutional strength of the Full Faith and Credit and

Due Process Clauses of the Constitution. The issues are

ripe, and they merit review now to foster judicial econ-

omy and to prevent the loss of review if the case follow-

ing remand were decided on state grounds only.

WHEREFORE, Petitioners Signet Bank/Virginia and

Capital One Bank respectfully pray that this Petition be

granted.

Dated: October 8, 1999

Respectfully submitted,

Drew S. Days, III James F. McCase

Counsel of Record James R. McGuire

Morrison & Foerster LLP Morrison & Foerster LLP

2000 Pennsylvania 425 Market Street

Avenue, NW San Francisco, California

Suite 5500 94105

Washington, D.C. 20006 Telephone (415) 268-7000

Telephone (202) 887-1500 SHIRLEY M. HursTEDLER

Morrison & Foerster LLP

555 West Fifth Street

Suite 3500

Los Angeles, California

90013

Telephone (213) 892-5200

Counsel for Petitioners

Signet Bank/Virginia and

Capital One Bank