Thursday, April 15, 2010

An old lawyer trick bites the dust

The Mississippi Supreme Court unanimously reversed in State v. Bayer Corp. today -- not a surprising vote count, in view of the oral argument. This was part of the State's litigation over Average Wholesale Pricing in the pharma industry -- essentially a scam to defraud Medicaid, says the State. The chancery court had held that, because Bayer had settled similar claims about particular drugs in 2001, the investigation at that time surely would have turned up any similar claims about other drugs -- this on a 12(b)(6) motion. Yes, really.

A bit curiously perhaps, the Court takes up the issue of whether Bayer's motion to dismiss was improperly converted to a Rule 56 motion when it considered the 2001 settlement agreement and alleged facts pertaining thereto. I say "curiously" because, IIRC, Bayer's counsel expressly disavowed any such conversion at oral argument. Possibly the Court went en banc in part to lay this issue to rest, and wasn't going to be deterred by any trifling admissions.

Anyway, it seems to me that we now have a bright-line rule, though the Court could be a bit less coy about it:
Notwithstanding this Court’s longstanding application of Rule 12(b), Bayer relies on Sennett v. United States Fidelity and Guaranty Company, 757 So. 2d 206 (Miss. 2000), asserting that a trial court may consider matters outside the pleadings when ruling on a Rule 12(b)(6) motion. In Sennett, the core issue was whether the trial court had erred in granting a dismissal pursuant to the defendant’s Rule 12(b)(6) motion after considering an insurance policy that was attached to the defendant’s motion. Id. at 209. This Court joined the ranks of several federal courts of appeal in holding that, in rare circumstances, a trial court may consider documents attached to a defendant’s Rule 12(b)(6) motion to dismiss without converting the motion to dismiss to a Rule 56 motion for summary judgment, as long as the “plaintiff has actual notice of all of the information in the movant’s papers and has relied upon these documents in framing the complaint.” * * *

However, rather than adhering to the reasoning in Sennett, this Court has affirmed its allegiance to the rule limiting review of a Rule 12(b)(6) motion to the face of the complaint. In Wilbourn, 998 So. 2d 430 (Miss. 2008), the trial judge granted the defendant’s Rule 12(b)(6) motion after considering the effect of a whole-life insurance policy on the plaintiff’s complaint. Upon review, this Court held that Rule 12(b) expressly notes that when “matters outside the pleading are presented . . . the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56.” Id. (quoting M.R.C.P. 12(b)). * * * Similarly, in Sullivan v. Tullos, 19 So. 3d 1271 (Miss. 2009), this Court held that failure to give a party ten days’ notice after a Rule 12(b)(6) motion has been converted into a Rule 56 motion will result in a reversal of the judgment by this Court. Id. at 1276.

Here, as in Wilbourn and Tullos, the trial court considered matters outside the pleadings when it took into account the 2001 Settlement Agreement. Having done so, the trial court was required to convert Bayer’s Rule 12(b)(6) motion into a Rule 56 motion for summary judgment. The record shows that the trial court failed to do so, depriving the State of actual notice of its intent to rule on the matter as a motion for summary judgment. This Court’s recent interpretation of Rule 12(b)(6) and Rule 9(b) in Wilbourn and Tullos and a plain reading of Rule 12(b) establish this as error.
They don't come out and say Sennett is overruled, but that seems to be the only plausible reading. That reading is bolstered by a concurrence in which Waller and Dickinson argue that Sennett is good law, but that the lower court's consideration of alleged facts about the pre-settlement investigation is what brought the case under Rule 56 and required notice of conversion.

Attaching docs to a motion to dismiss and having it magically turn into a motion for summary judgment is a favorite old lawyer trick, so the bright-line rule is probably best. "Actual notice" means that the court actually has to tell the parties what it's doing, I think, as opposed to "constructive notice," where the parties are supposedly able to figure out what's happening with their own sweet little heads.

... Bardwell has the best post title I'll see in a while: "Ronnie Musgrove, Bayer Slayer." In comments, Bardwell disagrees that Sennett is effectively overruled, which just goes to show that the MSSC is going to have this question back on its plate sooner or later.


  1. A bogus trick is what it is.

    About 25 years ago, a Supreme Court clerk told me (and the justice he worked for confirmed) that there were paperwork requirements when they overruled a case; to avoid the paperwork, they would just try to kill the "bad" case without using the dreaded word "overrule."

  2. Interesting; I didn't hear about that when I clerked more recently, but I will have to think whether we "overruled" anything.

    At least Sennett would now seem to merit a "Called into doubt by ..." flag on Westlaw.

  3. Westlaw will "called into doubt" flag a case where a federal district court in Iowa says something odd about a Circuit Court case from the 2nd Circuit. Their pretending that casecite works remotely like Shepards is probably the biggest sham put forth by Thomson West.

  4. Yeah, KeyCite has always been like that. And then they don't flag stuff they should flag. I've e-mailed them before to tell them "hey, this point of law is no good any more."

    Lexis uses Shepards, right? I haven't used it since clerking; my main objection was just that the interface was so damn ugly, frivolous soul that I am.

  5. Yes, Shepards is one of two reasons I'd consider using Lexis (both don't add up to sufficient-- the other is that Lexis is not a West product).

    I just read the Bayer opinion, and think Waller's opinion makes clear they are overruling Sennett-- he says "I don't agree, because I think Sennett is good law and this case doesn't meet the exception it states." If the majority isn't overruling it, there's no difference between majority and concurrence.

    And, really, given JUST HOW LITTLE WORK IS REQUIRED to follow the rule for converting a 12b6 motion to a 56 motion, the issue here (to me) is about not wanting to reverse cases, period. "Well, it's just a little rule. We don't want to go reversing cases, particularly where it's a defense verdict, over these little nitpicking rules. Bad precedent. People could start expecting us to do it even in criminal cases."