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Civil Procedure Outline

Table of Contents The Power of the Courts__________________________________________________________________________________________4 Due Process, Cost-Benefit Analysis, and Justice ______________________________________________________________7
Application ________________________________________________________________________________________________________________ 7 Access to Lawyers and to the Legal System _________________________________________________________________________ 11 Personal Jurisdiction___________________________________________________________________________________________________ 16 Categories of Personal Jurisdiction ___________________________________________________________________________________17 Limitations on Personal Jurisdiction ________________________________________________________________________________18

Choosing a Proper Court _______________________________________________________________________________________ 14

1) Constitutional Limitations ________________________________________________________________________________________________ 23 a) Minimum Contacts ____________________________________________________________________________________________________ 24 1) Purposeful Availment_______________________________________________________________________________________________ 24 2) Foreseeability ______________________________________________________________________________________________________ 27 b) Fairness and Substantial Justice ____________________________________________________________________________________ 28 c) Notice and a Right to be Heard ________________________________________________________________________________________ 28 2) Statutory Limitations ______________________________________________________________________________________________________ 31 State Long-Arm Statutes __________________________________________________________________________________________________ 33 3) Personal Jurisdiction in Federal Courts __________________________________________________________________________________ 34

General Jurisdiction ____________________________________________________________________________________________________35 In Rem Jurisdiction ___________________________________________________________________________________________________35 Quasi in Rem Jurisdiction ______________________________________________________________________________________________36 Challenging Personal Jurisdiction _____________________________________________________________________________________38 Case Log _________________________________________________________________________________________________________________40 Subject-Matter Jurisdiction ___________________________________________________________________________________________ 59 Federal Question Jurisdiction _________________________________________________________________________________________59
1) 2) 3) 4) 5)

Diversity Jurisdiction __________________________________________________________________________________________________64

The Federal Question Must Appear in the Complaint __________________________________________________________________ 60 Implied Federal Right of Action __________________________________________________________________________________________ 61 Federal Corporations _____________________________________________________________________________________________________ 61 Cases _______________________________________________________________________________________________________________________ 61 Specific Statutory Grants of Federal SMJ ________________________________________________________________________________ 62

Diversity Among the Parties ___________________________________________________________________________________________________ 65 1) Complete Diversity When Action Is Commenced _________________________________________________________________ 65 2) Citizenship _______________________________________________________________________________________________________________ 66 3) Collusion and Devices to Create or Defeat Diversity ____________________________________________________________ 67 4) Realignment According to Interest __________________________________________________________________________________ 68 Jurisdictional Amount: In Excess of $75,000 _______________________________________________________________________________ 68 1) What Is "In Controversy"? _____________________________________________________________________________________________ 69 2) Aggregation of Separate Claims ______________________________________________________________________________________ 70 Exceptions to Diversity of Citizenship Jurisdiction __________________________________________________________________________ 71 Multiparty, Multiforum Trial Jurisdiction Act 28 U.S.C. 1369 ___________________________________________________________ 71 Class Action Fairness Act 28 U.S.C. 1332(d) ______________________________________________________________________________ 72 Erie Doctrine and the Law Applied Under Diversity Jurisdiction ___________________________________________________________ 73 Cases _________________________________________________________________________________________________________________________ 81

Supplemental Jurisdiction Over State Claims ______________________________________________________________________86

1) Pendent Claims ______________________________________________________________________________________________________________ 87 2) Ancillary Jurisdiction ______________________________________________________________________________________________________ 89 3) Pendent Parties ____________________________________________________________________________________________________________ 90 4) Congressional Clarification: 28 USC 1367 _________________________________________________________________________________ 91 5) Subsequent Addition of Parties ___________________________________________________________________________________________ 94

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6) Supplemental Jurisdiction over Claims Not Exceeding $75,000 in Diversity Cases ____________________________________ 96

Challenging Subject-Matter Jurisdiction ______________________________________________________________________________96 Conflict of Jurisdiction between State and Federal Courts __________________________________________________________96 Venue _____________________________________________________________________________________________________________________ 99 Subject Matter Jurisdiction Distinguished__________________________________________________________________________ 101 General Rules _________________________________________________________________________________________________________ 101 Residence _____________________________________________________________________________________________________________ 102 Venue in Local Action ______________________________________________________________________________________________ 102 Improper Venue May be Waived ____________________________________________________________________________________ 102 Forum Non Conveniens ______________________________________________________________________________________________ 103
Transfer ________________________________________________________________________________________________________________________ 103

Case Examples ________________________________________________________________________________________________________ 104

The Pre-Trial Litigation Process ____________________________________________________________________________ 107

Filing Suit _______________________________________________________________________________________________________________ 111 Commencement of the Action _______________________________________________________________________________________ 111
Pleading Requirements _______________________________________________________________________________________________________ 113 Pleading Rules _________________________________________________________________________________________________________________ 114

Service of Process ____________________________________________________________________________________________________ 121 Securing the Judgment _______________________________________________________________________________________________ 124 Interlocutory Injunctions and Restraining Orders _______________________________________________________________ 126 Real Party in Interest ________________________________________________________________________________________________ 128 Anonymous Plaintiffs ________________________________________________________________________________________________ 129 Extension of Time Periods _________________________________________________________________________________________ 129 The Response __________________________________________________________________________________________________________ 129 Preliminary Motions _________________________________________________________________________________________________ 129 The Answer ___________________________________________________________________________________________________________ 132 Counterclaims and Crossclaims _____________________________________________________________________________________ 135 Amendment and Supplemental Pleadings _________________________________________________________________________ 138 Amendment___________________________________________________________________________________________________________ 138 Supplemental Pleadings _____________________________________________________________________________________________ 140 Rule Summary ________________________________________________________________________________________________________ 140 Cases __________________________________________________________________________________________________________________ 142 Sanctions ________________________________________________________________________________________________________________ 148 Joinder___________________________________________________________________________________________________________________ 154 Joinder of Parties _____________________________________________________________________________________________________ 154
Compulsory Joinder ___________________________________________________________________________________________________________ 154 Cases ________________________________________________________________________________________________________________________ 157 Permissive Joinder ____________________________________________________________________________________________________________ 159 Misjoinder of Parties __________________________________________________________________________________________________________ 159

Joinder of Claims ___________________________________________________________________________________________________ 160 Consolidation _________________________________________________________________________________________________________ 161 Separation ____________________________________________________________________________________________________________ 161 Third-Party Practice __________________________________________________________________________________________________ 163 Impleader _____________________________________________________________________________________________________________ 163 Interpleader __________________________________________________________________________________________________________ 166 Intervention __________________________________________________________________________________________________________ 167 Discovery _______________________________________________________________________________________________________________ 171 Overview ______________________________________________________________________________________________________________ 171 Scope of Discovery ___________________________________________________________________________________________________ 172 Rule 26(f) Conference of Parties-Planning for Discovery _________________________________________________________ 179 Disclosure Requirements __________________________________________________________________________________________ 180 Methods of Discovery ________________________________________________________________________________________________ 182
Production of Documents and Things ________________________________________________________________________________________ 182 Rules and Cases ________________________________________________________________________________________________________________ 174

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Discovery of Electronically Stored Data _____________________________________________________________________________ 183 Depositions_____________________________________________________________________________________________________________________ 185 Pre-Action Depositions __________________________________________________________________________________________________ 185 Oral Deposition of a Witness ____________________________________________________________________________________________ 186 Deposition of Witnesses on Written Questions ______________________________________________________________________ 187 Use of Depositions at Trial or Hearing _______________________________________________________________________________ 187 Errors and Irregularities in Depositions ____________________________________________________________________________ 188 Written Interrogatories to the Parties _______________________________________________________________________________________ 188 Requests for Admissions ______________________________________________________________________________________________________ 189 Informal Discovery ____________________________________________________________________________________________________________ 190 Motion to Compel Disclosures and Discovery _______________________________________________________________________________ 190 Immediate Sanction ___________________________________________________________________________________________________________ 191 Automatic Sanction __________________________________________________________________________________________________________ 191

Enforcing Disclosure and Discovery ______________________________________________________________________________ 190

Pretrial Conferences __________________________________________________________________________________________________ 191

Trial _____________________________________________________________________________________________________________ 194

Right to a Jury Trial ___________________________________________________________________________________________________ 194 Jury Instructions _____________________________________________________________________________________________________ 197 Jury Verdicts __________________________________________________________________________________________________________ 197 Juror Misconduct _____________________________________________________________________________________________________ 198 Dismissals_______________________________________________________________________________________________________________ 201 Voluntary Dismissals_________________________________________________________________________________________________ 201 Involuntary Dismissals ______________________________________________________________________________________________ 201 Bifurcation and Trifurcation _________________________________________________________________________________________ 202 Summary Judgment ___________________________________________________________________________________________________ 204 Rule and Cases ________________________________________________________________________________________________________ 205
The Trilogy Cases: Celotex; Anderson; Matsushita __________________________________________________________________________ 208

Motion for Judgment as a Matter of Law (Formerly Directed Verdict) ________________________________________ 213 Judgment on Partial Findings _______________________________________________________________________________________ 214

Judgment _______________________________________________________________________________________________________ 214

Final Relief ______________________________________________________________________________________________________________ 217 Equitable Relief_______________________________________________________________________________________________________ 217 Declaratory Relief ____________________________________________________________________________________________________ 218 Damages (Legal Relief) ______________________________________________________________________________________________ 219 Attorneys Fees _________________________________________________________________________________________________________ 221 Contempt ________________________________________________________________________________________________________________ 226 Renewed Motion for Judgment as a Matter of Law (JNOV) ______________________________________________________ 229 Motion for a New Trial ________________________________________________________________________________________________ 230 Effect of Failure to Move for a Renewed Judgment as a Matter of Law or for a New Trial __________________ 232 Motion to Vacate Judgment __________________________________________________________________________________________ 233 Standard ________________________________________________________________________________________________________________ 236 Time for Appeals_______________________________________________________________________________________________________ 236 Reviewable Orders ____________________________________________________________________________________________________ 236 Interlocutory Orders as of Right ____________________________________________________________________________________ 236 Interlocutory Appeals Act ___________________________________________________________________________________________ 237 Collateral Order Rule _________________________________________________________________________________________________ 237 Orders Made Appealable (or Nonappealable) by Writ __________________________________________________________ 237 Certification of Class Actions_________________________________________________________________________________________ 238 Stay Pending Appeal __________________________________________________________________________________________________ 238 Supreme Court Jurisdiction __________________________________________________________________________________________ 238

Attacking the Judgment ______________________________________________________________________________________ 229

Appeals _________________________________________________________________________________________________________ 236

4 Finality __________________________________________________________________________________________________________ 240

Res Judicata (Claim Preclusion) _____________________________________________________________________________________ 242 Collateral Estoppel (Issue Preclusion) _____________________________________________________________________________ 248 Res Judicata and Collateral Estoppel in Special Situations ______________________________________________________ 250 Who is Bound? _________________________________________________________________________________________________________ 250 Choice of Law ___________________________________________________________________________________________________________ 254

Civil Rights Statutes ___________________________________________________________________________________________ 255 Class Action lawsuit ___________________________________________________________________________________________ 257 Supplemental Charts _________________________________________________________________________________________ 264 EXAM APPROACH______________________________________________________________________________________________ 270
ERIE ISSUES _____________________________________________________________________________________________________________ 270 Class Action Cases _____________________________________________________________________________________________________ 261

The Power of the Courts

1. Courts must be able to protect their ability to render judgments a. United States v. Hall (5th Cir. 1972) (pg. 13) (contempt power) i. In this instance, holding a non-party in contempt for violating a court order is appropriate because Halls actions threatened both Ps right and Ds duty as adjudicated in earlier litigation 1. Mims Memorandum Opinion Judgment/ruling of the court signed by district court judge and entered into the docket a. Required integration of historically black Ribault and historically white Raines b. Court retained jurisdiction in order to ensure that its ruling was implemented ii. Rule 65(d) intended to codify/embody rather than limit the courts power (U.S. v. Hall) iii. Rule 65(d)(2)(C): other persons who are in active concert or participation with the parties or the parties officers, agents, employees, etc. iv. Injunction A court requiring a party to do or refrain from doing specific action(s) 1. Product of equity system Not an action involving money, b/c no damages sought, other form of relief is needed equity jurisdiction v. Preliminary injunction issued before a dispute is resolved WITH notice, ex parte vi. TRO issued on an emergency basis W/O notice, expedited hearing 1. Need a sworn affidavit tried to get hold of other party 2. 14 day sunset provision should then move to preliminary injunction b. Courts role is limited to remedying deprivations between parties, not for drafting rules applicable to the general public i. Planned Parenthood Golden Gate v. Garibaldi (Ct. App. 2003) (pg. 18) (injunction against protesters): Actual notice provision of injunction invalid b/c cant apply to world at large 2. Standards of Review (appellate courts reviewing lower court decisions) a. Factual conclusions: clear error b. Granting/denying motion: abuse of discretion

5 c. Interpretation of FRCP: plenary (unqualified; absolute) i. Ex: when reviewing lower court that has ruled on an FRCP motion, appellate court will independently interpret the rule, but review the lower courts decision for abuse of discretion

Due Process, Cost-Benefit Analysis, and Justice

14th Amendment Section 1 All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. 5th Amendment No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. Two Key Questions: 1. Is liberty / property/life at stake? 2. What process is due? Joint Anti-Fascist Refugee Committee v. McGrath (US 1951) (p.21): Majority Opinion: due process required organization opportunity to be heard and present their own evidence before being labeled pejoratively as subversives by the Attorney General. Justice Frankfurter (Concurring Opinion): due process cannot be imprisoned within the treacherous limits of any formula no rote, mechanical test o Right to be heard at a meaningful time and in a meaningful manner when deprivation can still be prevented gold standard Two reasons for notice and hearing: o Arriving at Truth: No better instrument has been devised for arriving at truth than to give a person in jeopardy of a serious loss notice of the case against him and opportunity to meet it. o Generating a Feeling of Justice: Nor has a better way been found for generating the feeling, so important to a popular government, that justice has been done. Due process is essential to preserving the citizens faith in the legal system

Application
1) Is there life, liberty, or property right at stake? a. Goldberg v. Kelly (US 1970) (Justice Brennan) (p. 28): i. Facts: Class Action under Rule 23. New York did not require prior notice or hearing of any kind before termination of Social Security benefits under its Home Relief Program. 1. Constitutional issue: whether the Due Process Clause requires that the recipient be afforded an evidentiary hearing before the termination of benefits. ii. Balancing of Government Function and the Private Interest: What procedures due process may require under any given set of circumstances must begin with a

8 determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action. 1. SS provides for essential goods: food, housing, clothing, etc. 2. Someone cannot suffer a grievous loss without the right to be heard (golden rule for due process) 3. The point of the SS program is to provide human being with dignity, which outweigh govts costs iii. Pre-Termination Evidentiary Hearing: When welfare is discontinued, only a pretermination evidentiary hearing provides the recipient with procedural due process . Counsel is not required, but should be permitted as an option. Must be oral. And there must be notice. iv. Rudimentary Due Process: However, the form of the hearing need not be judicial or even quasi-judicial, but only a fair hearing. The Court recognizes the importance of not imposing upon the States or the Federal Government any procedural requirements beyond those demanded by rudimentary due process. 1. Only need to give basic procedural safeguards (due notice, right to confront orally in front of a neutral arbiter written submission is inefficient recipients often dont have the education required to provide strong written argument) v. Justice Black (Dissenting Opinion): Highlights the administrative costs of such process, and the possibility that the courts delve into the powers of the legislature. b. Fuentes v. Shevin (U.S. 1972) (pg. 96) (writ of replevin without a prior hearing) i. Facts 1. Florida and Pennsylvania state laws authorized seizure of possessions by a plaintiff who posts a security bond under a writ of replevin w/o prior notice 2. In Florida, all a person had to do was to file a complaint, fill out the appropriate form, and post a bond worth twice the value of the property in question 3. Courts are allowed to issue writs summarily w/o evidentiary hearing 4. D receives no notice and no opportunity to challenge writ, has 3 days to post their own security bond, otherwise property is transferred to P ii. Legal rules 1. Armstrong v. Manzo Procedural due process requires that parties whose rights are to be affected are entitled to be heard at a meaningful time in order to enjoy that right, they must be notified 2. Joint AFRC v. McGrath fairness can rarely be obtained by secret, one-sided determination of the facts 3. Sniadach v. Family Finance Corp. temporary deprivation still deprivation iii. Significance 1. There must be a hearing before seizure for prejudgment replevin 2. Finds in U.S. v. James Daniel Real Good Property that b/c real estate property cant be moved, less rational for emergency replevin absent prior hearing 3. Should someone be evicted from public housing if they are suspected of illicit drug trafficking? a. Current rules do allow for eviction c. Ashcroft v. ACLU (2004) i. Issue

9 1. Is the Child Online Protections Act (COPA) requirement that web publishers prevent children from accessing harmful material likely to violate 1st Amendment by restricting too much free speech and using a method that is not the least restrictive available? ii. Facts 1. Congress passed COPA to protect children from pornography 2. Reaction to previous SCOTUS ruling in Reno finding predecessor statute overbroad and therefore unconstitutional iii. Ruled that the statute is likely overbroad based on community standards language SCOTUS rejected and remanded to CA for further review 1. Found PI lawful b/c COPA not narrowly tailored to serve compelling govt interest iv. Legal rules 1. RAV v. St. Paul constitution demands that content-based restrictions on free speech be presumed invalid 2. U.S. v. Playboy Govt bears burden for demonstrating constitutionality least restrictive alternative 3. Reno a statute that effectively suppresses a large amount of free speech that adults have a constitutional right to is unacceptable if there are viable, less restrictive alternatives that would be at least as effective a. Court assumes that certain protected speech can be regulated and finds the least restrictive alternative to achieve that goal speech is restricted no further than necessary 4. Doran v. Salem In order to issue a PI, a court must determine that P is likely to succeed on merits of the case and that PI wont create irreparable harm, i.e. harm that cant be fixed by final judgment a. If you wait until hearing, you wont be able to protect property 2) What process is due? a. Contextual Nature of Due Process: Due Process is not a technical conception with a fixed content unrelated to time, place, and circumstances. See Cafeteria Workers v. McElroy (US 1961). i. Due Process is a contextual, fact-dependent evaluation ii. E.g., in Arnett v. Kennedy, SCOTUS held that for federal dismissal actions, giving the employee a copy of the charge w/rationale as well as time to file a response was sufficient; evidentiary hearing could come post-termination b. Matthews v. Eldridge Balancing Test: weigh/compare, (U.S. 1976) (pg. 39) Mathews is the Secretary of Health, Education, and Welfare. Eldridges disability benefits were terminated. Eldridge is seeking, on top of the pre-existing procedure, a pre-termination hearing. This decision reaffirms the centrality of fiscal and administrative considerations in determining what is due process and the meaningful opportunity to be heard. 1. Private interest thats affected by not having additional process 2. Government interest in not providing additional process a. Qs of what the function of the government agency is, or b. Cost of having more process 3. Marginal decrease in risk of erroneous deprivation (risk of error) a. Will adding process help secure a more accurate result?

10 ii. Tripartite Analysis: DISCUSS: How these are affected 1. Private Interest: The private interest that will be affected by the official action. 2. Risk and Value: Consider: Fairness and reliability of procedures currently used vs. the probable value, if any, of additional or substitute procedural safeguards. 3. Government Interest: The governments interest: function, fiscal and administrative burdens. e.g. national security, keeping secrets, financial costs of new process etc. Also, how many groups sought judicial review under current procedure and would costs simply shift from pre-designation to postdesignation? a. Financial cost alone is not a controlling weight. But the Governments interest in conserving scare fiscal and administrative resources is a factor that must be weighted. iii. Holding Lower court rulings over-turned, HHS process sufficient 1. Unlike welfare recipients, disability recipients are not confronted with an imperative, overwhelming need primary factor in Goldberg decision (exception, not the rule) a. Have access to other forms of support if things get really bad b. Less need for an evidentiary hearing 2. Current procedures are adequate, additional safeguards would be too burdensome a. Medical evaluation is comprehensive and unbiased b. Less risk of error in written reports 3. Person is given notice of case against him and opportunity to meet it iv. Brennan Dissent 1. Court cant properly evaluate extent of deprivation pure speculation 2. Eldridge faced real-life penury as a result of losing disability benefits c. A citizen-detainee challenging classification as enemy combatant must receive notice of reasons for classification, and fair opportunity to rebut the govts factual assertions in front of a neutral decision maker i. Hamdi v. Rumsfeld (US 2004): The Court balances Hamdis private interest (liberty) and the governments interest (national security). The Court holds that the risk of erroneous deprivation is unacceptably high under the governments procedures. However, the Court does not go so far as to suggest that all the procedures mentioned by the District Court would be necessary. Rather, there must be notice, opportunity to present evidence, and the opportunity to rebut before a neutral decision-maker. 1. Application of Eldridge standard a. Private interest being free from arbitrary detention is the crux of personal liberty i. Korematsu want to avoid repeating shameful history of Japanese internment b. Govt interest keep people from returning to war, dont want to be distracted by litigation c. Likelihood of wrongful imprisonment high given that hearsay evidence is used but defendant doesnt have right to challenge 2. SCOTUS wants to provide notice and an opportunity to be heard crux of due process

11 a. Must receive notice of the factual basis for detention and a fair opportunity to rebut governments evidence in front of a neutral decision-maker 3. However, SCOTUS allowed for more flexible standards than those normally relied upon in a court of law a. Hearsay b. Presumption of guilt c. Can have ex post facto process away from battlefield 4. Dissenting Opinion (Justice Scalia): U.S. citizen has a right to habeas unless a trial is quickly brought or Congress suspends habeas a. SCOTUS shouldnt apply Matthews modality, normal criminal procedure should prevail i. Constitution provides strict standards through writ of habeas corpus b. Mr. Fix-It-Mentality is inappropriate given that the constitution specifies strict standards c. Bill of attainder i. Congress cant restrict criminality to one individual habeas must be suspended for everyone 5. Dissenting Opinion (Justice Thomas): Thomas objects to the balancing approach of Mathews. But even if it were to be applied, he suggests that the governments interest in national security is so overwhelming that it supports the limited process that the government has put in place. d. Due process is not part of self-help remedies (Flagg Brothers, Inc. v. Brooks) (U.S. 1978) (pg. 102) (no official involvement when creditor threatens to repossess goods to satisfy debt) i. Generally, look at kind of property to be attached; notice; issue of bonds ii. 14th Amendment only implicated when a state has taken action to depriver person of life, liberty, or property iii. If state actor, requires notice and opportunity to be heard when deprivation can still be prevented (Fuentes) iv. If both sides in dispute have real interest in property, then no prior notice is OK because one interest doesnt outweigh the other (Mitchell v. W.T. Grant Co) (U.S. 1974) (pg. 102) (upheld sequestration procedure despite failure to ensure notice before P seized Ds property) v. Look at grounds for getting prejudgment remedy (what party is required to show) (Connecticut v. Doehr) (U.S. 1991) (pg. 103) (state statute allowing prejudgment attachment of real estate without prior notice or hearing, or showing of extraordinary circumstances, or monetary bond, violated due process) vi. Moveable property requires less notice than seizing immovable property (Calero-Toldeo v. Pearson Yacht Leasing Co.) (U.S. 1974) (pg. 103) (seizure of yacht) 1. Govt must afford notice and meaningful opportunity to be heard before seizing property used in drug-related crime (U.S. v. James Daniel Good Read Property) (U.S. 1993) (pg. 103)

Access to Lawyers and to the Legal System

1) Right to Access to the Courts

12 a. State procedures for commencement of litigation that effectively prevents welfare recipients from getting divorced denies due process rights by denying opportunity to be heard (Boddie v. Connecticut) (US 1971) (pg. 68) i. Facts 1. Plaintiffs are welfare recipients who were unable to the $60 service fees (filing, service of process, etc.) required to initiate divorce proceedings under Section 52-259 of the Connecticut General Statutes 2. SCOTUS states that it is undeniable that they could not afford fees, plaintiffs could barely afford ordinary cost of living 3. CT court returned Ps papers b/c they did not provide payment, Court would not provide waiver lack of ability to file was due to their indigency ii. Holding 1. SCOTUS rules for the plaintiffs Appellate court judgment reversed 2. None of the states countervailing arguments override Ps interests a. In terms of resource allocation, SCOTUS invokes Griffin v. Illinois, which held unconstitutional a requirement that an indigent person provide a transcript that was beyond their means in order to get court access clearly the same rational applies here 3. The court finds that given the basic position of marriage in Americas hierarchy of values and the states monopolization of the means for leg ally dissolving a relationship, due process does prohibit the state from denying citizens access to the courts solely based on their inability to pay rule of law a. The court-enforced dispute settlement process is the only available form for divorce proceedings parties have no other alternative 4. Limited holding only applies to divorce rulings a. SCOTUS does not hold that due process requires that all individuals should have free access to the courts in all circumstance 2) Right to a Lawyer: When must a lawyer be appointed for someone? b. Presumption that there is a right to appointed counsel only where an indigent risks deprivation of physical liberty 2. Whether such a right extends to parental custody hearings depends on the situation and result of Matthews balancing test; issue left up to trial courts (Lassiter v. Dept of Social Services of Durham Country, NC) (US 1981) (pg. 74) a. Facts i. Ps infant son was taken from her custody in 1975 and placed under the supervision of D after a court found that she had not provided him with proper medical care ii. In 1976, P was convicted on an unrelated second-degree murder charge and sentenced to 25-40 years of imprisonment. iii. In 1978, D petitioned a court to terminate Ps parental rights because she had had no contact with her son and had made no effort to improve the conditions which had led to his removal iv. P did not ask of her criminal attorney to represent her in the custody proceedings, and the court found that she had had ample opportunity to retain counsel but chose not to

13 b. Rules i. Generally speaking, courts have held the an indigent only has a right to court-appointed counsel if he is at risk of losing his physical liberty (Argersinger v. Hamlin, In re Gault, Vitek v. Jones) ii. As a litigants interest in personal liberty diminishes, so does his right to court-appointed counsel 1. Morrissey v. Brewer revocation of parole only denies conditional liberty dependent on observance of certain conditions, absolute liberty not at risk no right to counsel 2. Scott v. Illinois actual imprisonment is the line defining the constitutional right to court-appointed counsel vii. All states have since adopted statutes that direct or permit judges to appoint counsel for parents or children when state seeks to terminate parental rights

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Choosing a Proper Court

Selecting the Court in Which to Bring Suit The following factors influence the parties choice of forum for litigating a given matter: (1) there must be sufficient contacts between the defendant and the forum state to exercise personal jurisdiction over the defendant (see Chapter 2); (2) the court must possess subject matter jurisdiction over the controversy (see Chapter 4); (3) where a case is originally brought in state court but may be subject to the jurisdiction of the federal court as well, the defendant will consider opportunities for removal to federal court (see Chapter 2); (4) concerns of judicial efficiency and convenience of parties and witnesses will influence the appropriate venue within a specific court system in which to try the case (see Chapter 5); (5) various tactical factors such as: reputation of judges presiding in specific courts, court calendars, and procedural differences influencing, for example, availability of a jury trial, required level of agreement for verdicts, applicable rules of evidence or availability of appellate review (see Chapters 12, 13); (6) client characteristics; (7) where suit can be brought in more than one jurisdiction, differences in substantive law will be evaluated so that the law most favorable to a partys claim may be applied (see Chapter 6).

A. PERSONAL JURISDICTIONPersonal jurisdiction refers to the ability of a court to exercise power over a particular defendant or item of property. It may be categorized as in personam, in rem, or quasi in rem. The primary limitations on a court's power to exercise personal jurisdiction are found in the United States Constitution and state statutes. B. SUBJECT-MATTER JURISDICTIONThe subject matter jurisdiction of the federal courts is limited to that authorized by the Constitution as implemented by federal statute and decisional law. In general, it may be categorized as follows: a) Diversity of Citizenship JurisdictionDiversity of citizenship jurisdiction under 28 U.S.C. section 1332 is grounded historicallyin the desire to protect out-of-state parties from local prejudice. Its main requirement is that there be complete diversity between opposing parties. Each plaintiff must be of diverse citizenship from each defendant. Also, the amount in controversy must exceed $75,000. Federal Question JurisdictionFederal question jurisdiction under section 1331 presents fewer specific difficulties. The principal problem in this area is to determine when an action "arises under" federal law. A secondary problem is to know what types of actions are within the exclusive jurisdiction of the federal courts under other specific statutes. Removal JurisdictionRemoval jurisdiction allows defendants to remove an action brought in a state court to a federal court if the federal court would have had original jurisdiction over the action.

b)

c)

15 d) Supplemental JurisdictionThe doctrine of supplemental jurisdiction is codified under section 1367 and includes, under a single name, the concepts of "ancillary" and "pendent" jurisdiction. In any form, supplemental jurisdiction allows a federal court to entertain certain claims over which it would have no independent basis of subject matter jurisdiction, i.e., claims that do not satisfy diversity or federal question jurisdiction requirements. It is important to note that supplemental jurisdiction operates only after a claim has invoked federal subject matter jurisdiction, after the case is properly in federal court. Supplemental jurisdiction operates to bring additional claims into that case that arise from the same transaction or occurrence as the original claim, but it cannot be used to get the case into federal court in the first instance. C. VENUEVenue is the designation of the proper district in which to bring an action. Venue will depend on the nature of the jurisdiction (i.e., whether federal question or diversity of citizenship), and on the nature of the parties (i.e., whether corporate or natural persons).

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Personal Jurisdiction
Ever since the landmark case of Pennoyevr v. Neff, 95 U.S. 714 (1877), the Supreme Court has consistently held that plaintiffs are not free to bring suit wherever they choose. o The Fourteenth Amendment to the United States Constitution forbids the states from "depriv[ing] any person of life, liberty or property, without due process of law." o A state would violate this guarantee if its courts entered judgments against defendants without following a fair judicial procedure, and fair procedure includes appropriate limits on the places where a defendant can be required to defend a lawsuit. Reflection of geographical limitations on the judicial power of sovereign states o Full faith and credit clause in the constitution states required to enforce VALID judgments against their citizens rendered by courts of other states o If judgment was invalid due to a lack of PJ, state does NOT have to enforce it The due process clause of the Fourteenth Amendment to the Constitution imposes fundamental limitations on the power of state courts to exercise personal jurisdiction over defendants in civil suits. o Under that clause states may only assert jurisdiction over defendants who have established a significant relationship to the forum state, such as domicile, in-state presence, continuous and substantial business within the state, consent to suit in that state, or minimum contacts with the state that gave rise to the claim in suit. o If the defendant is not subject to personal jurisdiction within the forum state on one of these limited bases, the court will be unable to adjudicate the plaintiffs claim. Summary o Plaintiff: Simply by virtue of the filing of the lawsuit court has authority over plaintiff (consent). o Defendant: Simple ways: resides in or is personally served in state, consents, waives PJ and/or Venue challenges (cant waive SMJ). Where the plaintiff is not from the forum state, often the only basis for personal jurisdiction will be the minimum contacts test developed in International Shoe. Can consent to PJ (but not SMJ) Initial Steps o First, look to long-arm statute does claim fall under statute? o Second, Due Process Inquiry: Minimum contacts: Are they continuous or sporadic? Did the defendant purposefully avail himself? Idea is that D should have foreseen being hailed to court there, and/or derived benefit from that forum. Fairness factors: The burden and inconvenience on the defendant (must have opportunity to be fully heard). The forum states interest in adjudicating the dispute. Plaintiffs interest in obtaining convenient and effective relief. Interstate judicial systems interest in obtain the efficient resolution of controversies. Shared interest of states in furthering fundamental substantive social problems.
First, the defendant's act(s) must fall within the ambit of the long-arm statute. That is a question of statutory interpretation. Second, the exercise of jurisdiction under the long-arm statute must comply with the constitutional

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requirements of due process (the minimum contacts test). Only when both steps are satisfied may the court exercise jurisdiction.

Home State: A defendant is subject to the personal jurisdiction of his/her/its home state. Home state may be defined by residence, citizenship and domicile. Domicile: Persons true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom. Mas v. Perry (5th Cir. 1974). Current residence is not sufficient, there must be an intention to remain indefinitely. o In Twentieth Century-Fox Film Corporation v. Taylor and Burton (SDNY 1965), Elizabeth Taylor was treated as if she was not a citizen of any sate, as she was domiciled abroad. o Residence: Some courts allow PJ based on maintaining a residence even though the defendant is absent from the state at the time. Millkien v. Meyer (1940). May maintain multiple residences. Corporations: For purposes of PJ, a domestic corporation is deemed a citizen of the state in which it is incorporated and the state where it has it principal place of business. 28 USC 1332(c). o Nerve Center Test: Identified the state in which the corporation performs its executive functions as the principal place of business.

Categories of Personal Jurisdiction 1. In Personam Jurisdiction a. In personam jurisdiction exists when the forum has power over the person of a particular defendant. i. Jurisdiction over a plaintiff is generally not an issue because the plaintiff accedes to the court's jurisdiction by bringing suit in that court. ii. In these cases, the court may render a money judgment against the defendant or may order the defendant to perform acts or refrain from acting (injunctions) 2. In rem jurisdiction: In rem jurisdiction exists when the court has power to adjudicate the rights of all persons in the world with respect to a particular item of property. a. This jurisdiction is limited to situations where the property is located within the physical borders of the state and where it is necessary for the state to be able to bind all persons regarding the property's ownership and use. This occurs with respect to actions for condemnation (eminent domain cases), forfeiture of property to the state (e.g., when the property is used for the unlawful transportation of narcotics), and settlement of decedents' estates. b. Rule 4(n) limits use of attachment jurisdiction in federal actions: consistent with statute, plus needs notice. 3. Quasi in rem jurisdiction: based on presence of Ds property (real or personal) w/in the forum state that permits court to attach property and then enter monetary judgment not exceeding the value of that property a. The basis of a court's power to exercise quasi in rem jurisdiction is the property w/in the state. The judgment does not bind D personally and cannot be enforced against any other property belonging to the defendant.

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Limitations on Personal Jurisdiction Limitations on a court's personal jurisdiction arise from two sources: state statutes and the United States Constitution. An exercise of personal jurisdiction must not exceed the limitations of either source. 1) The Due Process Clause: a) In PENNOYER v. NEFF, the U.S. Supreme Court held that an improper assertion of personal jurisdiction over a defendant violates the defendant's federal Due Process (14th Amendment) rights. Any judgment rendered by a court in violation of the Due Process Clause of the U.S. Constitution is invalid and unenforceable. The following are the permissible bases - under the Due Process Clause - for the assertion of personal jurisdiction: i) Personal service: On the defendant while physically present in the territory of the forum state: Under the Territoriality Rule, adopted by the U.S. Supreme Court in PENNOYER v. NEFF, every state possesses exclusive power and sovereignty over persons and property located within its territory and may assert that power over any defendant, resident or non-resident, by personally serving him with a summons while he is present in the forum state, no matter how briefly. Conversely, a state may not acquire personal jurisdiction by service of process outside the forum state on a non-resident defendant (to "seize" a non-resident defendant in another state would offend that state's sovereignty). In-state service of process on a non-resident defendant who is only briefly in the forum state was confirmed by the U.S. Supreme Court as a constitutionally permissible basis for personal jurisdiction in BURNHAM v. SUPERIOR COURT (1990). In BURNHAM, defendant's wife personally served defendant, a New Jersey citizen, with a California court summons in a divorce action while he was temporarily in California to conduct business. Even though the divorce cause of action was unrelated to defendant's business in California, a plurality of the court upheld personal jurisdiction under the Territoriality Rule. Thus, service of process accomplished in an airplane passing through the state's air space appears to be valid. (However, another plurality upheld personal jurisdiction under the Minimum Contacts rule) ii) Domicile: Service of process on a domiciliary (citizen) of the forum state even while he is outside the forum state is constitutional. iii) Consent: A defendant may waive his rights under the Due Process Clause and "consent" to personal jurisdiction. "Waiver" may occur, either before or after he is sued, in the following ways: (1) Waiver through failure by the defendant properly to raise the objection to personal jurisdiction: (a) "General appearance" in state court, if the defendant defends himself on the merits of the action: (In a "special appearance", the defendant must strictly limit his objections to jurisdictional issues.) (b) In federal court, a defendant may waive an objection to personal jurisdiction by failure timely to assert it. See F.R.C.P. Rule 12(h) (defendant must raise it by pre-answer motion or in the answer, if he makes no pre-answer motion) (2) Express consent (a) Express consent provision in a contract: A defendant may consent in advance to personal jurisdiction in an otherwise valid contract, or to the appointment on behalf of the defendant of an agent for service of process who may be served in the forum state. NATL EQUIPMENT RENTAL LTD. v. SZUKHENT

19 (b) Express consent by operation of law: Example: As a condition to being licensed to do business in a particular state, that state may require defendant to consent to the appointment of an agent empowered to accept service of process on behalf of defendant. (3) Implied consent (legal fiction): Before INTERNATIONAL SHOE, this legal fiction was used to uphold the constitutionality of state "implied consent" statutes which authorized state courts to assert personal jurisdiction over non-resident corporations (who were "doing business" in the forum state) and over non-resident individuals who committed torts within the forum state. The implied consent fiction was limited to corporate defendants or, with respect to individual defendants, to situations where the state had a strong regulatory interest (e.g., dangerous activities). Example: IN HESS v. PAWLOSKI (1927), the U.S. Supreme Court used the "implied consent" fiction to uphold the constitutionality of a state non-resident motor vehicle statute which stated that a non-resident motorist using the state's highways was deemed to have appointed a state official as the motorist's agent to accept service of process in any action stemming from the use of his automobile within the state. iv) The "Minimum Contacts" rule [INTERNATIONAL SHOE COMPANY v. WASHINGTON (1945)]: This rule was formulated to expand the reach of state courts over non-resident defendants, under the Due Process Clause, beyond the narrow confines of the Territoriality Rule. The rule states: "[Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice]. The federal district courts also adhere to the minimum contacts rule. Application of the "minimum contacts" rule involves a two-step analysis: (1) Purposeful availment (Step 1): In HANSON v. DENCKLA (1958) and WORLD-WIDE VOLKSWAGEN CORPORATION v. WOODSON (1980), the U.S. Supreme Court declared that only purposeful acts or conduct (purposeful contacts) directed by the non-resident defendant at the forum state could support personal jurisdiction under the Due Process Clause. Contacts which exist only through the "unilateral acts" of third parties (e.g., the car buyer in Volkswagen) are insufficient. Purposeful availment is an essential requirement; if it does not exist, the forum state cannot assert personal jurisdiction, even if it were the most convenient court to try the suit and there would be minimal burden on the defendant. RATIONALE: The rationale for the purposeful availment requirement is that it is unfair to the non-resident defendant to force him to defend in a particular forum state unless, given his purposeful activities, he should reasonably expect or anticipate being haled into the forum state's court. EXAM APPROACH: In assessing the question whether defendant has purposefully availed himself of the forum state's laws, focus on the contacts (activities) of the defendant directed at the forum state and: Assess whether these contacts are purposeful or deliberate acts of the defendant directed at the forum state. Example 1: In HANSON v. DENCKLA, the U.S. Supreme Court held that the Florida court could not assert personal jurisdiction over the Delaware trustee because there was no purposeful activity directed by the trustee at the Florida market; its contacts with Florida were generated through the "unilateral" acts of third parties. The court stated that it was essential that "there

20 be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protection of its laws." Example 2: In WORLD-WIDE VOLKSWAGEN v. WOODSON, the U.S. Supreme Court held that the Oklahoma court could not constitutionally exercise personal jurisdiction over Seaway or the tristate dealer because they did nothing to solicit business in Oklahoma and, therefore, did not intend to serve the Oklahoma market. Mere foreseeability that the car could travel to Oklahoma and cause injury there is insufficient to support personal jurisdiction. Example 3: Where the defendant's contact with the forum state is the act of entering into a contract with a citizen of the forum state, the court must assess the circumstances surrounding the contract to determine whether defendant purposefully availed himself of (i.e., "reached into") the forum state. In BURGER KING v. RUDEWICZ, the U.S. Supreme Court enumerated the following factors: prior negotiations, the duration of the contract relationship, the place of performance, the terms of the contract, the parties' actual course of dealing. Example 4: A non-resident defendant, in a commercial context, may purposefully avail himself of the forum state by indirectly serving the forum state's market through the use of middlemen distributors or, depending on the circumstances, through the sale of component parts to a manufacturer who incorporates them in its products which it then deliberately sells to the forum state's market. c) In WORLD-WIDE VOLKSWAGEN, supra, the U.S. Supreme Court, in dictum, approved the exercise of personal jurisdiction by the Oklahoma court over the German manufacturer and the American importer (the two other defendants in that case), even though they did not directly sell Audi cars in Oklahoma, because they intended to serve the U.S. market (which includes Oklahoma) by act of setting up a chain of distribution of Audi cars throughout the U.S. d) In GRAY v. AMERICAN RADIATOR & STANDARD SANITARY CORP., the Illinois Supreme Court upheld the assertion of personal jurisdiction over an Ohio valve manufacturer ("Titan") who sold its valves to a Pennsylvania manufacturer ("American Radiator") for incorporation as a component in its radiators which American Radiator sold to the Illinois market. This case can be reconciled with Volkswagen on the theory that the court perceived Titan as deliberately using American Radiator as a distributor of Titan's valves to the market which American Radiator served, which included Illinois. e) In ASAHI METAL INDUSTRY v. SUPERIOR COURT (1987), another component parts case, the U.S. Supreme Court split on whether a Japanese tire stem manufacturer (ASAHI), who sold its stems to a Taiwanese tire tube manufacturer (CHENG SHIN) purposefully availed itself (indirectly) of the California market merely because Asahi was "aware" that Cheng Shin marketed its tire tubes in CA. A plurality opinion written by Justice OConnor reaffirmed the view of purposeful availment in DENCKLA and WORLD-WIDE VOLKSWAGEN that the defendant must perform some act or conduct by which he purposefully directs the product towards the forum state's market; mere awareness that the product will be sold in the forum state is not sufficient. (stream of commerce - plus) Another plurality opinion written by Justice Brennan argued that injecting goods into the stream of commerce is sufficient to satisfy purposeful availment. (I cannot join the pluralitys determination that Asahis regular and extensive sales of component parts to a manufacturer it knew was making regular sales of the final product in CA is insufficient to establish minimum contacts with CA.)

21 Assess the frequency and regularity of defendant's purposeful contacts. The more frequent and regular defendant's activities with the forum state, the more likely it is that the court will find that defendant should have reasonably expected to be sued there and, thus, find "purposeful availment". Note, however, that even a single contact, or isolated or occasional contacts could satisfy the "purposeful availment" requirement if the "nature and quality" of the contacts have a sufficiently strong impact on the forum state (and the cause of action arises directly out of that contact). Example 1: In McGEE v. INTERNATIONAL LIFE INSURANCE COMPANY, the U.S. Supreme Court upheld personal jurisdiction stating: "it is sufficient for purposes of due process that the suit was based on a contract which had substantial connection with the state's [i.e., California's] courts." The nature and quality of this single contact - a life insurance contract - were strong since the insurance industry is heavily regulated to protect the public. Example 2: A New York motorist drives to California and causes an accident in California. Before the plaintiff can serve the New Yorker with a summons, he drives out of the State and returns to New York. Plaintiff serves the defendant in New York, invoking the state's Long Arm statute. Based upon this single contact, the assertion of personal jurisdiction by a California court over the New York defendant would not violate the due process clause. On the other end of the "frequency" spectrum, if the defendant engages in "continuous and systematic" activity with the forum state which is "so substantial" and of such a strong "nature and quality", the forum state's court may assert personal jurisdiction even if the cause of action does not relate to that activity. This kind of personal jurisdiction is known as "general jurisdiction". Example: A New Yorker who buys a General Motors car in New York can sue GM in California even though the cause of action did not arise from GM's efforts to serve the California market. Assess the "nature and quality" of defendant's contacts with the forum state. This is especially important where the frequency of the contacts are "isolated or occasional" and, also, where the plaintiff is attempting to assert "general jurisdiction". Assess the relationship between plaintiff's cause of action and defendant's contacts with the forum state (NEXUS TEST). Where defendant's contacts are merely "isolated or occasional", or even "continuous and systematic" - but not substantially so - plaintiff's cause of action must arise out of, or be sufficiently related to, those contacts. (2) "Fair play and substantial justice" (Step 2): Once the court has determined that it is "fair" to assert personal jurisdiction over the defendant because his purposeful contacts with the forum state are such that he should reasonably expect to be sued in that state's courts, the court must then proceed to the second step of the "minimum contacts" analysis: to determine whether, in all other respects, it is fair and reasonable to assert personal jurisdiction. This "second step" focuses on the forum chosen by the plaintiff and requires the court to consider those factors which relate to the appropriateness of this particular forum to litigate plaintiff's suit ("litigation" fairness). If it is "unfair" to require the defendant to defend himself in this forum, the court could find that the Due Process Clause prohibits the

22 court from asserting personal jurisdiction, even though the defendant has purposefully availed himself of the forum state. The fairness factors include: 1. The relative convenience of the forum to the plaintiff and defendant. For example, if the burden on the non-resident defendant is too great, it may violate defendant's due process rights to require him to defend in the forum state. Factors relevant to inconvenience include the relative financial resources of the plaintiff and defendant and the location of evidence. 2. The interest of the forum state in adjudicating this suit in its own courts. One relevant factor would be the interest of the forum state in regulating the type of activity in which the defendant has engaged in the forum state. For example, a state has a strong interest in regulating the insurance business or activity on its highways. 3. The interest of the forum state in providing a local forum for its own citizens to enforce their rights. Hence, it is relevant whether or not the plaintiff is a citizen of the forum state. 4. The ease of access to an alternative forum In BRYANT v. FINNISH NATIONAL AIRLINE, the New York Court of Appeal upheld personal jurisdiction over a foreign defendant in a suit by a New York resident on a cause of action unrelated to defendant's slight contacts with New York because the only alternative forum was in Finland which would effectively bar plaintiff from relief in a U.S. court. 5. The avoidance of multiple lawsuits and conflicting adjudications v) The relationship between "purposeful availment" and "fair play and substantial justice" (a) A strong showing of "fair play and substantial justice" can sometimes outweigh weak showing of "purposeful availment": (i) McGEE v. INTERNATIONAL LIFE INSURANCE COMPANY, supra. (b) A weak showing of "fair play and substantial justice" can sometimes outweigh a showing of "purposeful availment" which might otherwise be sufficient: ASAHI METAL INDUSTRY v. SUPERIOR COURT, supra. 2) There Must Be A State Statute That Authorizes The Forum State's Court To Assert Personal Jurisdiction (e.g., Long Arm statute): Assuming there is a permissible basis under the Due Process Clause for a state court to assert personal jurisdiction, the state court must also be authorized by a state jurisdictional statute to assert personal jurisdiction. If the state legislature chooses not to take advantage of a permissible basis recognized by case-law under the Due Process Clause, the state court does not have the power to do so. For example, virtually every state has a statute authorizing the assertion of personal jurisdiction by personal service of process within the state. Long Arm Statutes: There are two types of long arm statutes: (a) Specific act long arm statutes, which base the assertion of personal jurisdiction over nonresidents upon the commission of certain acts by the defendant in the forum state and (b) Non-specific long arm statutes, like California's, which authorizes state courts to assert personal jurisdiction to the full extent allowed under the Due Process Clause. NOTE: The federal courts are also bound, under F.R.C.P. 4, by the long arm statute of the state in which the district court sits." Rule 4 also authorizes nationwide service of process of a summons in federal court where specifically authorized by federal statute, e.g. Federal Interpleader Act. Rule 4(k) (2), creates a

23 special long arm provision, applicable only in federal court, which allows a federal district court to assert personal jurisdiction over a defendant (typically an alien) who is not amenable to service of process under any state's long arm statute (because the defendant's contacts with any single state are not sufficient to support personal jurisdiction). The amendment requires, however, that the defendant's contacts with the United States as a whole must be sufficient under the 5th Amendment to support personal jurisdiction. Amended Rule 4 (k) (2) applies even in the absence of a federal statute authorizing nationwide service of process." EXAM TIP: The exam will usually state the terms of the state's long arm statute. If the exam gives you a "specific act" long arm statute, then you will have to apply the specific terms of the statute to the facts relating to defendant's contacts with the forum. If the exam does not give you a long arm statute, then assume that one exists and that its terms would allow the court to assert personal jurisdiction. Then, analyze the issue whether the Due Process Clause allows the state to assert personal jurisdiction. General approach 1. Does the particular act or conduct of the defendant fall within the scope of the long arm statute? a. A given long arm statute may permit personal jurisdiction only where the defendant commits a tortious act within the forum state. If the plaintiff seeks to assert personal jurisdiction under this particular provision, the court will have to consult state case-law interpreting the term "tortious act within the state". A liberal jurisdiction may interpret this term to include the place where the injury occurs as well as where the negligent act occurred, whereas a more conservative jurisdiction may restrict the meaning of this term to the place where the negligent act occurred 2. Assuming the statute applies, is it constitutional under the Due Process Clause for the court to assert personal jurisdiction?

1) Constitutional Limitations The Due Process Clause of the Constitution places three restrictions on the exercise of personal jurisdiction. a. Minimum Contacts b. Fairness and substantial justice c. Notice and an Opportunity to Be Heard First, the defendant must have such contacts with the forum state that the exercise of jurisdiction would be fair and reasonable. Traditional Rule: Physical Power Traditionally, jurisdiction over a person (or res) was a consequence of the state's physical power to carry out its judgment; i.e., it was based on the power to arrest the person to force compliance with a judgment. Accordingly, the Supreme Court upheld exercises of jurisdiction whenever the defendant was served with process within the forum state. [See Pennoyer v. Neff, 95 U.S. 714 (1878)] The Court later expanded the states' physical power to extend not only to those defendants who were served within the state, but also to those defendants who consented to the state's power or who were domiciled in the state, regardless of where

24 they were served. Modern Due Process Standard: Contact and Fairness The concept of power by which a state could enforce Its Judgments was greatly expanded by the Supreme Court in International Shoe Co. v. Washington, 326U.S. 310 (1945). No longer was power controlled solely by whether one of the traditional bases of presence, residence, or consent was present. Instead, the focus became what sufficient minimum contacts exist between the defendant and the forum so that maintenance of the suit against the defendant does not offend traditional notions of fair play and substantial justice." a) Minimum Contacts International Shoe requires that the defendant have "such minimum contacts with the forum that the exercise of jurisdiction would be fair and reasonable. In considering whether there are such contacts, a court will look to two factors: purposeful availment and foreseeability. 1) Purposeful Availment Defendant's contact with the forum must result from her purposeful availment with that forum. The contacts cannot be accidental. Defendant must reachto the forum in some way, such as to make money there or to use the roads there. The court must find that through these contacts the defendant purposefully availed herself "of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws,"[ Hanson!, Denckla, 357 U.S. 235 (1958)] Examples: 1. Burger King v. Rudzewicz, 471 U.S. 462 (1985) Defendants, Michigan residents, entered into a franchise contract with a Florida corporation. The agreement required, among other things, that fees be sent to the franchisor's home office in Florida, and provided that Florida law would govern any dispute. The Court held that the defendants could be sued in Florida; their contact with Florida resulted from their purposeful availment of that state. 2. Kulko v. Superior Court, 436 U.S. 84 (1978) Father, in New York, agreed to give up custody of Daughter to Mother in California. Mother sued Father in California for additional support. Father's only contact with California was letting Daughter go there. The Court held that California could not obtain in personam jurisdiction over Father because in acting in the interest of family harmony, Father could not be said to have purposefully availed himself of the benefits and protections of California laws. 3. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) Defendant, a New York car dealer, was sued in Oklahoma based on an injury that Plaintiff received from an accident in Oklahoma. The only basis for jurisdiction over Defendant was the sale of the allegedly defective car in New York by Defendant, who knew no more than that any vehicle sold might be driven elsewhere. The Court found that there was no purposeful availment of the privileges or protections of Oklahoma. "Stream of Commerce" Cases There is great difficulty, however, in assessing purposeful availment in a "stream of commerce" case-e.g., Defendant manufactures valves in State A and sells them to a

25 heater manufacturer in State B. The heater manufacturer incorporates Defendant's valves into its heaters and sells them to customers in States C, D, and E. If a valve explodes and injures Plaintiff in State E, can it be said that Defendant (who acted in State A and sold only to State B) purposefully availed itself of State E? The Supreme Court faced this type of fact pattern in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), and failed to resolve it definitively. Four justices opined that placing the item in the streamof commerce, with the knowledge that it would end up in a particular forum, constituted purposeful availment. Four other justices opined that there would also have to be a showing that the defendant took some additional step to avail itself of the forum. Not surprisingly, lower courts have reached varying conclusions on such fact patterns. o OConnor (4 plurality agreement) no jurisdiction Stream of commerce is NOT enough (VW precedent) Additional conduct Designing the product for forum state-market Advertising Establishing channels distribution/sales marketing schemes w/in forum state Distributing scheme o Brennan (4 plurality agreement) no jurisdiction Regular, anticipated flow of products marketed in forum state WILL be good enough E.g. Coca-Cola good enough for Brennan but NOT for OConnor still need purposeful targeting at a SPECIFIC forum state Application o Apply OConnor AND Brennan test If OConnor test satisfied Brennan test will be satisfied If conduct satisfies Brennan but NOT OConner, resolution is uncertain make an argument one way another

Nicastro

Facts o 1994/95 D (UK) attends trade show in Las Vegas uses MMA to ship product to NJ Instructions mentions both U.S. standards and UK standards P sues D in NJ reasonable foreseeability Not the test in VW or Asahi Asahi application o OConnor Stream of commerce new products would be distributed in the U.S. Additional conduct Instructions Distribution Trade show (Las Vegas) try to tap into as many resources possible Only 4 pieces in NJ number of clients It doesnt look like the additional conduct was specifically directed at NJ definitely more than Asahi, but is it enough to establish PJ in NJ?

26 Gives us reason to pause maybe we should reconsider precedents in light an increasingly globalized economy Brennan Up to 4 machines in NJ comparison to flow of products to other states Regular, anticipated flow OR trivial, ephemeral currents or eddies? Holding Kennedy (4) o Deliberately entering U.S. market is NOT sufficient D must purposefully avail itself of the SPECIFIC state Foreseeability cant be controlling criterion anyone who sells to a distributor could be held liable anywhere where the products ended up Concurrence Breyer (2) o If D targets the world through its web site and uses an intermediary, should they not be held liable? o Leave the door open for situations where going to a distributor, new tech advancements would allow for PJ Takeaway o Make policy arguments regarding expansion of doctrine to cover cases of first impression o Number of judges agreeing with opinion gives relative weight to competing interpretations Internet Cases The Supreme Court has not set out a specific test or standard for assessing purposeful availment based on the defendant's Internet activity. Many courts will look at the degree of Internet activity to determine whether the defendant is subject to personal jurisdiction; e.g., does defendant have a passive website that only allows people to view content, an active website that allows people to order and download products, or something in between? ii. The maintenance of a website for only informational purposes, without more activity in the forum, is probably insufficient to exercise jurisdiction over the defendant for all causes of action i.e., general jurisdiction), but it probably is sufficient for a claim arising from the maintenance of the website itself and brought underthe state's long arm statute (thus invoking specific jurisdiction) if the defendant is specifically targeting readers in the forum. iii. On the other hand, maintenance of an active website alone is probably sufficienteven for an exercise of general jurisdiction (i.e., a claim unrelated to the website activities) if the defendant is conducting significant business in the jurisdiction. iv. For defendants with websites in between the two extremes (e.g., a defendant with a website that allows the user to submit and request information and place orders but does not have downloads) courts will closely scrutinize the level of business activity to determine if the defendant should be deemed "present" in the forum for all causes of action. A with passive sites, specific jurisdiction hinges on whether the defendant was purposefully directing his activities to the forum. (See, e.g., Snowney v. Harrah's Entertainment, Inc., 35 Cal. 4th 1054 (2006 v. Sliding Scale and Categories of Electronic Contacts (one factor to take

27 into account in purposeful availment inquiry): 1. Interactive E-Commerce - probably will have minimum contacts 2. Passive information posting - Probably will not have minimum contacts vi. Adaptation of the Calder Effects Test: The Court concludes that a state may exercise personal jurisdiction when a person: 1. Directs electronic activity into the state. 2. With the manifested intent of engaging in business or other interactions within the state. 3. That the activity creates a potential cause of action. 2) Foreseeability In addition to purposeful availment, the contact requirement of International Shoe requires that it be foreseeable that the defendant's activities make her amenable to suit in the forum. The defendant must know or reasonably anticipate that her activities in the forum render it foreseeable that she may be "haled into court" there. Example: (Keeton v. Hustler Magazine, 465 U.S. 770 (1984); Calder v. Jones, 465 U.S. 783 (1984)] A national magazine is probably subject to in personam jurisdiction for libel cases in every state in which the magazine is marketed. Its publishers may reasonably anticipate causing injury in every state in which the magazine is sold, and thus should reasonably anticipate being haled into court in each state.

~ g -

8
i
Extent of Contacts Jurisdictional Consequences

Decreasing Contacts No Jurisdiction No Jurisdiction Specific Jurisdiction

o c:

'i

No Contacts

s
The Jurisdictional Spectrum of Minimum Contacts Causal or Isolated Single Act Continuous but Limited Continuous and Systematic Increasing contacts Specific Jurisdiction General Jurisdiction

28
Cases VW Asahi (no directed stream) McGee v. International Life Ins. International Shoe Perkins v. Benguet Consolidated Mining Co.

Note that these requirements are the outer limits to which a state may reach in exercising jurisdiction over a person. A state statute cannot exceed these constitutional boundaries, but is not required to exercise the full limit of constitutional power. Thus, in evaluating jurisdiction over a person, both constitutional and statutory limitations b) Fairness and Substantial Justice In addition to the defendant's having relevant contacts with the forum, International Shoe requires that the exercise of jurisdiction not offend "traditional notions of fair play and substantial justice." The Court has listed several factors relevantto assessing whether jurisdiction would be fair. It is possible that an especially strong showing of fairness might make up for a lesser amount of contact (although minimum contacts are always required). The burden and inconvenience on the defendant (must have opportunity to be fully heard). The forum states interest in adjudicating the dispute. Plaintiffs interest in obtaining convenient and effective relief. Interstate judicial systems interest in obtaining the efficient resolution of controversies. Shared interest of states in furthering fundamental substantive social problems. 1) ConvenienceA defendant will often complain that the forum is inconvenient. The Supreme Court has emphasized, however, that the Constitution does not require that the forum be the best of several alternatives. The forum is constitutionally acceptable unless it is "so gravely difficult and inconvenient that a party is unfairly put at a severe disadvantage in comparison to his opponent." [Burger King v. Rudzewicz, supra] This is a very difficult standard to meet, and the defendant usually will not be able to meet it simply by showing that the plaintiff has superior economic resources. 2) Forum State's InterestThe forum may have a legitimate interest in providing redress for its residents. Example: 1) McGee v. International Insurance Co., 355 U.S. 220 (1957)] Decedent, a California resident, purchased a life insurance policy by mail from a Texas company. Decedent regularly mailed his premiums from California to the Texas company, which had no other contacts with California. In a suit brought by the beneficiary of the life insurance policy, the Supreme Court held that California had personal jurisdiction over the Texas company. Among other things, the Court noted that California had a strong interest in protecting its citizens from alleged misfeasance by insurance companies. c) Notice and a Right to be Heard In addition to the requirement that the defendant have such minimum contacts with the forum to render the exercise of jurisdiction there fair and reasonable, due process also requires that a reasonable method be used to notify the defendant of a pending lawsuit so that she may have an opportunity to appear and be heard. Due

29 process requires that notice be "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." [Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)] Due Process: Parties must be given prior notice and an opportunity to participate (be heard). Notice that satisfies due process may be found from proper service of process or other recognized alternatives. Reasonably Calculated: Proper notice must be reasonably calculated to give actual notice, and if so it is adequate, regardless of whether the defendant learns of the suit (see Mullane below). Pre-Trial Remedy and Opportunity to be Heard: when the court uses provisional relief to secure the judgment, three factors to be weighed: (see also Provisional Relief > Maintaining the Status Quo > American Hospital) o Degree of harm to D from granting o Risk that granting will be in error o Benefit to P of granting 1) Traditional Methods of Personal Service Satisfy Due Process Notice Requirements Any of the traditional methods of personal service satisfy due process notice requirements. These include: a. personal delivery to the defendant; b. leaving papers with a responsible person at the defendant's residence or place of business; c. delivery to an agent appointed to accept service; or d. delivery by registered mail, return receipt requested. 2) Requirement that Agent Notify Defendant If an agent is appointed by contract, in a case where the plaintiff chose the agent for his own benefit, or the agent is appointed by operation of law (as under a nonresident motor vehicle statute), the failure of the agent to notify the defendant will prohibit jurisdiction since the defendant will in fact be deprived of an opportunity to be heard. (This IS not true when the defendant voluntarily selects his own agent, since any failure of the agent can and will be attributed to the principal.) 3) Requirements for Cases Involving Multiple Parties or Unknown Parties In Mullane v. Central Hanover Bank & Trust Co., supra, an action was brought against a number of trust beneficiaries scattered throughout the world. The Supreme Court held that the Constitution did not require personal service on each beneficiary since the cost would have been prohibitive . However, every beneficiary had to be notified by the best practical means available. Thus, those whose addresses were known or could reason ably be ascertained had to be notified by ordinary mail, while those whose names or addresses were unknown could be notified by publication. Such methods of notice are valid only if all defendants have substantially identical interests. 4) Transient Jurisdiction: Transient jurisdiction is based on service within the forum of a nonresident defendant passing through the state, and has been upheld by the Supreme Court in Burnham v. Superior Court of California (1990) (Justice Scalia) Note that service must occur in line with Rule 4. Justice Scalia: Personal service in state ipso facto satisfies the requirement of due process. How do we know what due process is? We look to tradition. And he essentially equates traditional with due process. Brennans Concurrence: He reasons that history, though not dispositive of the question of due process, is an important indicator that the defendant has been given notice that he will be subject

30 to suit if he is physically enters the forum. All rules of jurisdiction, according to Brennan, even the ancient ones, must satisfy the requirements of due process. And he goes into the minimum contacts analysis thereafter. Tag Jurisdiction: See Grace v. MacArthur (E.D. Ark 1959), where the court upheld jurisdiction based on service when a U.S. Marshall served a defendant while we was on a nonstop flight at the time when the plane was directly above Arkansas. Procedure for Service of Process: FRCP 4 sets forth the methods for effectuating service in federal trials. Specific procedures are outlined for various parties. o In federal actions, a plaintiff may give adequate notice to an individual, corporation or association by: Personal Service: Delivering the summons and complaint to the individual personally; Corporations: Service upon designated corporate officials, or an officer, managing or general agent or any other authorized agent Substitute Service: Leaving the summons and complaint at the individual's dwelling or usual place of abode with a person of suitable age and discretion; Delivering the summons and complaint to an agent authorized by appointment or by law to receive service of process. By registered or certified mail if out-of-state, or in some cases first class mail if in-state and defendant has consented to a waiver (see Service) As a last resort, notice can be made by newspaper (see Mullane)

o Actual Notice Doesnt Count: Even if the defendant receives actual notice of the case, but it was not appropriate under the statute etc. it will not count as adequate notice. o Constructive Notice: Mullane v. Central Hanover Bank & Trust Co. (US Supreme Ct. 1950) (Justice Jackson) (p. 671): Constructive notice, such as newspaper publication, may satisfy due process if individual members cannot be found without impracticable and extended searches. Guiding Principle: Notice must be reasonably calculated to apprise interested parties of the action. Process which is a mere gesture is not due process. Rationale: The court applies a balancing test, concluding that the costs of individual notice will sometimes be outweighed by the interest of a class. The party seeking to bypass individual notice should demonstrate that: the suit is in the interest of the absentees, they will be adequately represented by one before the court, and the value of their individual interests is not too great. Limitation: Where the identities and parties can be reasonably ascertained, however, individual notice is required. Rule 4. Summons (k) Territorial Limits of Effective Service. (1) Service of a summons or filing a waiver of service is effective to establish jurisdiction over the person of a defendant (A) who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located, or (B) who is a party joined under Rule 14 or Rule 19 and is served at a place within a judicial district of the United States and not more than 100 miles from the place from which the summons issues, or (C) who is subject to the federal interpleader jurisdiction under 28 U.S.C. 1335, or (D) when authorized by a statute of the United States.

31 (2) If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state. 2) Statutory Limitations States have the power to decide over whom their courts may exercise jurisdiction. Therefore, the first place to look to determine whether the court has properly exercised personal jurisdiction is state law. If no state statute grants the court the power over the parties before the court, then the court lacks personal jurisdiction. On the other hand, an exercise of jurisdiction will not be proper merely because it comports with a state statute; it must also be within the limitations set by the Constitution . a) Even if it is constitutionally permissible for a court to exercise personal jurisdiction in a case, that court may still lack the power to call the defendant before it. The due process clause does not actually confer any jurisdiction on state courts; it only defines the outer bounds of permissible jurisdictional power. That is, it says to the state legislatures: "When you authorize your courts to exercise jurisdiction, you may not go any further than this." It is up to the legislature of each state to actually grant the power to its courts to exercise personal jurisdiction, through jurisdictional statutes. Thus, every personal jurisdiction issue involves a two-step analysis. 1. First, the court must ask whether there is a state statute that authorizes it to exercise personal jurisdiction under the circumstances 2. Second, if there is, the court must ask whether it would be constitutional under the due process clause to do so. b) Most states have statutes granting their courts in personam jurisdiction in the following four situations: 1. Where the defendant is present in the forum state and is personally served with process; i. Most states grant their courts in personam jurisdiction over any defendant who can be served, with process within the borders of the state, no matter how long he was present. ii. The Supreme Court has upheld this type of jurisdiction, allowing a transient defendant to be served with process for a cause of action unrelated to his brief presence in the state. [Burnham v. Superior Court, 495 U.S. 604 (1990)] iii. State Law Exceptions to Traditional Rule 1. Even though jurisdiction through presence at the time of service has been upheld under the Constitution, state statutes and court decisions have limited the power of their courts in certain situations. a. Service by Fraud or Force InvalidIf a plaintiff brings a defendant into a state by fraud or force to serve process, most courts will find the service invalid. [See, e.g., Copas v. Anglo-American Provision Co., 73 Mich. 541 (1889)] b. Immunity of Parties and Witnesses Most states likewise grant immunity from personal jurisdiction to nonresidents who are present in the state solely to take part in a judicial proceeding, or who are passing through the state on their way to a judicial proceeding elsewhere. 2. Where the defendant is domiciled in the forum State;

32 i. Most states grant their courts in personam jurisdiction over persons who are domiciliaries of the state, even when the defendant is not physically within the state when served with process. 1. Defined Domicile refers to the place where a person maintains her permanent home. If a person has legal capacity, her domicile is the place she has chosen through presence (even for a moment), coupled with the intention to make that place her home. If a person lacks capacity, domicile is determined by law (e.g., infant is domiciliary of custodial parent's home state). 2. Citizenship A United States citizen, even though domiciled abroad, is subject to personal jurisdiction in the United States. The scope of this basis for jurisdiction is unclear, because states have never attempted to enact laws or rules enabling their courts to obtain jurisdiction solely on the basis of citizenship. However, the power of federal courts to subpoena a United States citizen domiciled abroad to return to the United States to give testimony has been upheld by the Supreme Court. 3. Where the defendant consents to jurisdiction; i. Virtually every state provides for in personam jurisdiction through the defendant's consent. Such consent may be express or implied or through the making of a general appearance. 1. Express Consent A party's express consent to the jurisdiction of local courts, whether given before or after suit is commenced, serves as a sufficient basis for in personam jurisdiction. a) By Contract A person can, by contract, give advance consent to jurisdiction in the event a suit is brought against him. b) Appointment Required by State. When the state heavily regulates a type of business to protect its citizens, it can require a nonresident engaged in that business to appoint an agent for service of process in the state 2. Implied Consent When the state has substantial reason to regulate the in-state activity of a nonresident of the state, it may provide that by engaging in such activity, the nonresident thereby appoints a designated state official as his agent for service of process. Thus, for example: the Supreme Court has upheld statutes that use such implied consent to subject a nonresident motorist to jurisdiction in any state in which he has an accident. [Hess v. Pawloski, 274 U.S. 352 (1927)] 3. Voluntary Appearance A defendant may consent to jurisdiction by a voluntary appearance, i.e., by contesting the case without challenging personal jurisdiction 4. Where the defendant has committed acts bringing him within the forum state's long arm statutes.

33 State Long-Arm Statutes In response to International Shoe, most states have enacted long-arm statutes, authorizing out-of-state service on defendants who otherwise could not be served. Long-arm statutes vary greatly from state to state, but there are two basic types: a) Blanket Statutes: To the full extent permitted by the Constitution (14th Amendment right to due process). 4 a. California's statute, for example, authorizes its courts to exercise jurisdiction "on any basis not inconsistent with the Constitution of this state or of the United States." Cal.Civ. Proc. Code 41 0.1 O. 2. Statutory Umits on Personal Jurisdiction i. In states with statutes like California's, the two inquiries are collapsed into one: If the court has the constitutional power to assert jurisdiction, it automatically has the statutory power to do so as well.
Constitutional scope of jurisdiction under the due process cla_

k-----

Statutory power to exerciIe

iurildictioo

under California Civil Procedure Code

410.10 (same as coDJtilUtiooallCOpc)

Figure 2-1.

b) Enumerated Statutes: Listing specific instances under which the state can exercise jurisdiction (sometimes called enumerated or laundry list) of the case. Second,if there is, the court must ask whether it would be Common instances: constitutional under the due process clause to do so. a. Driving a car in the state State legislatures are free to grant their courts the power to exercise b. Committing a tortious act in-state (or with in-state consequences, usually w/ corporations) personal jurisdiction to the limits of the due process clause or to confer c. Ownership of property within the state part married of the constitutionally permissible jurisdiction. In Somestates the d.only Getting in or living while married in the state legislature granted the courts full scope of personal jurisdiction i. Allhas states provide that when the a married couple last lived together in the state and one permissible under the due process clause. California's statute, for example, spouse then abandons the other, the remaining spouse may obtain personal jurisdiction authorizes its courts to exercise jurisdiction "on any basis not inconsistent over the absent spouse for divorce or legal separation proceedings. States vary on wrth the whether Constitution of this spouse state ormust of the United States." Cal.Civ. Proc. of abandonment (or the plaintiff be living in the state at the time Code 41other 0.1 O. cause In states with statutes like California's, the two inquiries are whenever the for dissolution) or whether jurisdiction may be acquired collapsed plaintiff into one: the court has in the power to assert has If acquired domicile theconstitutional state.
jurisdiction, it automatically has the statutory power to do so as well. Visually the relationship may (somevvhat portrayed(or omitting) an act is c) Arising Out Of Tortious Acts: Usually, be for purposes of a simplistically) long-arm, committing in of Figure 2-1. One advantage not of the such expansive provisions isGray that they are the act selling or manufacturing, actual harm is caused. In v. American Radiator "self-adjusting"; that is, if the courts reinterpret the due process clause however, an Illinois court concluded that a manufacturer of a part later used in a water heater made to allow the exercise was of personal instates additional circumstances. by another manufacturer, within thejurisdiction reach of their long-arm (which allowed jurisdiction

statutes automatically the courts the state to exercise over these a defendant who commits anauthorize in-state tortious act).of This was despite no minimum contacts on jurisdiction in such cases. See K. Beyler, The Illinois Long-ArmStatute: the part of the defendant, not even awareness that its goods would be sent there (see Asahi), because Background, Meaning Needed Repairs, 12 S.and Ill. this 1.]. 293, 319, 320Never overruled but the court found the plaintiffsand injury had occurred in-state, was enough. (1988). considered fuzzy law b/c though the long-arm may have authorized jurisdiction, due process and the

"ENUMERATED ACT" LONG-ARM STATUTES

34 Constitution do not. a. Uniform Act: Usually long-arm statues will have language like 1) causing tortious injury by an in-state act or omission or 2) causing tortious injury in this state by an out-of-state act or omission if there are minimum contacts b. **Be on the look out for obscure tortious harm like wrongful death and emotional harm** 3) Personal Jurisdiction in Federal Courts The main jurisdictional problem in state courts arises when the defendant over whom power is sought lives in another state. Since the federal borders encompass all states,one might expect that federal courts would encounter problems of personal jurisdiction only when the defendants were foreign nationals. c. However, Rule 4 of the Federal Rules provides that, absent some special federal provision, each federal court must analyze personal jurisdiction as if it were a court of the state in which it is located. Thus, in nearly every case, the assessment of whether the court has personal jurisdiction over the defendant will be exactly the same in federal court as it is in state court. i. Must be in Territory for Service: For both diversity and federal question actions, service must be made within the territorial limits of the state in which the District Court resides, or anywhere permitted by local state law (i.e. anywhere the state court would have PJ). 100 mile bulge rule applies. ii. Nationwide Service of Process: In some cases (suits against federal agents and/or agencies, or based on statutory interpleader) Congress has allowed nationwide service. Rule 4(k)(1)(A): Incorporates state long arm statutes as a constraint on federal court jurisdiction (for federal court to have PJ, state where fed court is located must have PJ) Rule 4(k) Exceptions to general rule for PJ in federal courts, allowing service or filing waiver of service to establish PJ over D: iii. 4(k)(1)(B): 100-mile bulge rule authorizes jurisdiction over impleaded (Rule 14 of 19) party not otherwise w/in courts reach if served within 100 miles of the court (tag jurisdiction) iv. 4(k)(1)(C): When authorized by federal statute (ex: interpleader) v. 4(k)(2): For a federal claim, service or waiver of service establishes PJ over D if: (A) D is not subject to jurisdiction in any states courts of general jurisdiction and (B) exercising jurisdiction is consistent with U.S. Constitution and laws 1. Use for foreign-national / corp. when: a. claim arises under fed law b. D is beyond jurisdictional reach of any state court; and c. there are sufficient aggregate contacts with the U.S. as a whole to satisfy 5th Amendments Due Process clause. 2. U.S. v. Swiss American Bank, Ltd. (1st Cir. 2001) (pg. 638): Govt sued under RICO Act to recover illegal drug proceeds. First two requirements were met, but third was lacking b/c insufficient ties to the U.S. (no physical presence and only intermittent contacts, like advertisement in magazine). Also, bank had not solicited depositors business in the U.S. 3. ISI International, Inc. v. Borden Ladner Gervais LLP (7th Cir. 2001) (pg. 638): Canadian law firm had sufficient contacts with several states to be sued in federal court on claims of malpractice and breach of fiduciary duty.

35 4. Graduate Management Admission Council v. Raju (E.D. Va. 2003) (pg. 638): Indian web site operator could be sued for copyright and trademark infringement when he specifically targeted U.S. customers. General Jurisdiction If the defendant engages in systematic and continuous activity in the forum state, the court could find this activity a sufficient basis for exercising in personam jurisdiction for any cause of action against the defendant, whether the cause of action arose from the in-state activity or from activity outside the state; i.e., the court will have "general jurisdiction." However, casual, occasional, or indirect activities in the state are not sufficient bases for this general in personam jurisdiction. a. Individuals: Domicile or citizenship b. Corporations: State of incorporation or primary place of business c. Systematic & continuous contacts (attempted, but failed in Helicopteros) i. Is business routinely transacted there? ii. Does D own property there? iii. Does D maintain office / business records physically in that state? iv. Do workers for corp. live there? Examples: 1) Statutes that grant in personam jurisdiction on the defendant's mere domicile, residence, or doing of business in the state would generally be valid since these constitute systematic and continuous activity in the forum. 2) Helicopteros Nacionales de Colombia v. Hall, 466 u.s.408 (1984) Due process requirements for personal jurisdiction were not satisfied in Texas in a wrongful death case against a Colombian corporation whose contacts with the forum state consisted of only one trip to Texas by the corporation's chief executive officer to negotiate a contract, acceptance of checks drawn on a Texas bank, and purchases of helicopters and equipment from a Texas manufacturer and related helicopter training trips. The claims were not related to the defendant's activities in Texas, and defendant's contacts with Texas were not so continuous and systematic as to justify general jurisdiction. In Rem Jurisdiction In rem actions adjudicate rights of all persons with respect to property located in the state. An in rem judgment does not bind the parties personally, but is binding as to the disposition of the property in the state. 1) Constitutional Limitations In in rem actions the basis of jurisdiction is the presence of the property in the state. The state has a great interest in adjudicating the rights of all the world regarding this property. Therefore, the presence of the property in the state is constitutionally sufficient for the exercise of jurisdiction over the property. a) No Jurisdiction If Property Not Located in State A court has no in rem power over property outside the state; e.g., in settling a decedent's estate, the court has no in rem power over property in other jurisdictions. b) No Jurisdiction If Property Brought in by Fraud or Force

36 The exercise of in rem power is prohibited when the property is brought into the state by fraud or force. 2) Statutory Limitations Most states have statutes providing for in rem jurisdiction in actions for condemnation, title registration, confiscation of property (such as vehicles used to transport narcotics), forfeiture of a vessel, distribution of the assets of an estate, and a grant of divorce when only the complaining spouse is present and subject to personal jurisdiction. In the last case, the "property" is the marital status of the complainant. 3) Notice The early view held that attachment of property, when supplemented by publication of notice in a local newspaper or by posting of notice on the property, would give all interested persons sufficient notice of the action. However, such procedures are no longer adequate, and the requirements of Mullane v. Central Hanover Bank & Trust Co., supra, apply to in rem actions. Thus, persons whose interest are affected and whose addresses are known must at least be notified by ordinary mail. [Walker v.City of Hutchinson, 352 U.S. 112 (1956)]

Quasi in Rem Jurisdiction Quasi in rem jurisdiction permits a court without in personam jurisdiction to determine certain disputes between a plaintiff and defendant regarding property when the property is located in the forum state. Quasi in rem jurisdiction is another method for exercising jurisdiction over a defendant, albeit in a limited manner, based on the defendants property located within the forum. Quasi in rem jurisdiction can be used to adjudicate personal obligations, not merely rights in the res. However, it binds the defendant only with respect to his interest in the res upon which jurisdiction is based, and thus, the value of a quasi in rem judgment cannot exceed the value of the res. Must be Minimum Contacts: Shaffer has broad language abolishing quasi in rem, but may have been limited to specific facts (Delawares strange situs rule). According to concurring opinions, gap may exist (see Limited in Usefulness below). No res judicata: If D loses on a quasi in rem suit in one state, that judgment will not apply to another suit in a different state. The issue must be retried on the merits. o Possible Exception: Some courts hold that if D makes a limited (not special) appearance and fully litigates certain issues, res judicata will apply to those issues. Limited in Usefulness: The minimum contacts now needed for quasi in rem could just as easily invoke in personam jurisdiction, so why would anyone use quasi in rem? One case where it would still be useful is where minimum contacts are present, but the state long-arm would not allow in personam jurisdiction (and D has property in the state that can be attached). o Debt and Insurance Co.s Dont Work: Attachment of an out-of-state defendants debt to an in-state debtor (i.e. Harris v. Balk) no longer works b/c out-of-state D has no minimum contacts. The same goes for an insurance co. obligated to defend and pay judgments for the defendant. Even if the insurance co. has minimum contacts, this will not matter as long as D does not. Limited Appearance

37 In an in rem or quasi in rem suit, defendant contests the issue on its merits, but liability is limited only to the property attached or debt garnished. Not the same as special appearance (see PJ generally above) Federal Courts o Allow Limited Appearance If: The local state law allows limited appearance. o Allow Quasi In Rem If: Local state law allows it, and P cannot obtain in personam jurisdiction (see limited in usefulness above) Amount in Controversy: When quasi in rem is allowed, courts are split as to whether the value of the property or the value of the claim is used to determine the $75,000 requirement 1) Constitutional Limitations Before 1977, a state clearly had power over all persons and property found within its borders. A defendant with no other connections with the state could be sued in the state for any dispute simply because he owned property there. However, in 1977, the Supreme Court held that the minimum contacts standard is applicable to every exercise of jurisdiction. The Court further found that the mere presence of property within a state is not itself sufficient to permit a court to exercise quasi in rem jurisdiction over property in a quasi in rem action. [Shaffer v. Heitner, 433 U.S. 186 (1977)-quasi in rem jurisdiction is proper only when minimum contacts exist making exercise of jurisdiction fair and just] a) Quasi In Rem Type I Thus, when the dispute involves the rights of the parties in the property itself (quasi in rem type I), jurisdiction based upon the presence of the property in the state is proper. The close connection between the litigation and the property provides the necessary minimum contacts. b) Quasi In Rem Type II When the dispute is unrelated to the ownership of property (quasi in rem type II), jurisdiction cannot be based solely on the presence of property in the forum state; there must be minimum contacts between the defendant and the forum. However, if the defendant has minimum contacts with the forum, it is also likely that a court could exercise in personam jurisdiction over a defendant under the forum's long arm statute, thus removing the limit on recovery to the defendant's in-state property. As a result, use of quasi in rem jurisdiction type II will be rare. Example: A, a Maine resident, flies to Ohio and enters into a contract with B, an Ohio resident. All performance is to occur in Ohio. A flies home. B breaches. A does not want to fly to Ohio to sue B, but he discovers that B has a boat docked in Maine. Traditionally, A could have sued on his contract claim in Maine by attaching the boat (his remedy being limited by the value of the boat). Today, he would have to show minimum contacts between B and Maine. 2) Statutory Limitations Most states provide for two types of quasi in rem jurisdiction. The first type (type I) involves disputes between parties over their rights in property within the state. The second type (type II) involves disputes unrelated to the in-state property and has been severely limited by the Supreme Court. In quasi in rem cases, the plaintiff is unable to obtain personal jurisdiction over the defendant, but the defendant has property in the state that the plaintiff attaches. The court then

38 adjudicates the dispute between the parties on the basis of its power over the property. Since the court's sole basis of jurisdiction is the property, any judgment against the defendant can be satisfied only out of that property. 3) Notice As in in rem cases, quasi in rem cases require the best practical notice. Therefore, posting of notice or notice by publication will be insufficient where the addresses of persons affected by the action are known or reasonably ascertainable. Challenging Personal Jurisdiction 1. Special Appearance: D appears expressly to challenge personal jurisdiction a. May Later Appeal: Most courts allow D to then defend on the merits if he loses on jurisdiction, without losing his right to later appeal the jurisdictional issue. i. The defendant who files a special appearance must exercise extreme care not to raise any other issue: If she raises any objection or argument that the Court can construe as a defense on the merits, the court may conclude that she has waived her jurisdictional objection. For example, in Koplinv. Saul Lerner Co., 20] N.E.2d 763 (Ill. App. 1964), the defendant entered a special appearance to object to the court's jurisdiction and also moved to strike the complaint for vagueness. b. Not in Federal Court: Fed. Cts. have abolished special appearances. Instead D may make a direct attack (i.e. a 12(b)(2) motion) under this more liberal scheme, a D can raise other objections at the same time W/O waiving PJ c. In most states a defendant who challenges jurisdiction at the beginning of the suit and loses may defend the merits of the suit without waiving her objection to the court's jurisdictional ruling. If she loses the suit on the merits, she may appeal to an appellate court in the rendering state, claiming that the trial court's conclusion that it had personal jurisdiction was wrong. 2. Collateral Attack: A defendant who defaults in an action by NOT appearing may subsequently bring a collateral attack against the judgment. Risky b/c if you lose on jurisdiction defense, you can no longer defend on the merits. a. The Full Faith and Credit Clause of the United States Constitution (Article IV, I) requites the courts of each state to honor the judgments of other states by entering judgments upon them (domesticating the judgment) b. However, an important exception to a state's duty to give full faith and credit to a judgment of another state: The enforcing court may always inquire as to whether the rendering state had jurisdiction in the original action and refuse enforcement if it did not. i. HOWEVER, D IS NOT ALLOWED TO CHALLENGE THE UNDERLYING MERITS OF THE CASE 3. Defense of Fraud or Duress: A court may, at its discretion, exercise jurisdiction over a defendant found within the forum state due to plaintiffs fraud or duress. It may however, choose to decline to exercise jurisdiction under these circumstances. 4. Immunity: Usually non-residents are immune from service if they are in-state to attend a trial, whether they are witness, party or attorney. Most states also grant immunity for trial-related activities such as depositions. Applies to Fed. Ct. suits, whether by diversity or federal question.

39 5. Waiver: When a nonresident defendant objects to a states personal jurisdiction over him/her on due process grounds, he/she must preserve such objection or risk waiving it. Waiver need not be express. It is enough that a party act in a way which is incompatible with the partys argument that the forum lacks a basis for asserting personal jurisdiction over him/her. a. Failure to Raise the Matter: Defendant will waive his/her challenge to personal jurisdiction if he/she either fails to include it in a motion to dismiss made on other grounds, or fails to otherwise raise the matter by motion or pleading. Note FRCP 12(h) for the issue of waiver. 6. Consent: A defendant may consent to the courts personal jurisdiction in advance of suit, and such consent, if expressly made, functions to cure any jurisdictional defects that might otherwise exist. Examples of express consent include: a. Consent documents filed by foreign corporations with state authorities as a condition for doing business in the forum. b. Forum-selection clauses in contracts. i. Carnival Cruise Lines, Inc. v. Shute (US Supreme Ct. 1991) (Justice Blackmun) (p. 655): The Court upheld the enforcement of a forum-selection clause, finding that it was reasonable and consistent with fundamental fairness. ii. Factors to Consider: 1. Does the clause dispel confusion? 2. Is it designed to give unfair advantage? iii. Dissenting Opinion (Justice Stevens): Denies the reasonableness of the forumselection cause, point out that it was a contract of adhesion and the terms were printed in small typeface and were not seen until receipt, and non-refundable

other but not to resurrect it after it has been fully litigated and decided. While the explanation of these principles is lengthy, their application is fairly straightforward. The following examples should help. See also Figure 3-1, which illustrates the various possibilities. Please assume that all
Defendant's Response to the Original Suit Action in the Rendering Court Action in the Enforcing Court

40

D appears, defends on

Enters judgment for P

merits, and loses

Must enforce the rendering court's Judgment, even if D challenges the rendering court's jurisdiction: 0 has waived his objection If original suit dismissed, there will be no judgment to enforce. However, P may file a new suit in a court that has jurisdiction over the defenda nt Must enforce judgment because 0 already litigated the rendering court's jurisdiction and lost If jurisdiction upheld on appeal, or objection waived by defense on merits, must enforce the rendering court's judgment Enforcing court may decide whether rendering court had jurisdiction; if it finds it did not, it refuses enforcement. If it finds that it did, it must enforce the judgment Enforces the judgment, full faith and credit clause precludes reexamination of merits, which are settled by default

D makes special appearance or 12(b)(2) motion; court agrees that it lacks jurisdiction

In most cases. dismisses action for lack of jurisdiction; in some, may order proper service to cure jurisdictional defect Enters judgment for P

D makes special appear-

ance or 12(b)(2) motion; court upholds Jurisdiction; D defaults

D loses on objection to jurisdiction; defends action on the merits; loses; appeals

In most states, appellate

court may review deci-

sian that jurisdiction was proper; a few may treat defense on merits as a waiver of the jurisdictional objection Enters default Judgment for P, unless lack of jurisdiction is clear from the complaint

D defaults, contests jurisdiction in enforcing court

D defaults, denies liability

on merits in the enforci ng court

Enters default judgment for P, unless lack of jurisdiction is clear from the complaint

Case Log

Figure 3-1. Challenges

to

personal jurisdiction:

some common scenarios.

S3 SPECIFIC JURISDICTION & MINIMUM CONTACTS Case-by-cause approach

Year 1877

Case Pennoyer v. Neff (U.S.) (pg. 612)

PJ? No

Facts; dispositive factors PERSONAL SERVICE & TERRITORIAL LIMITS Facts: Attorney Mitchell sued non-resident Neff in Oregon for legal fees. Neff provided w/ constructive service of summons by publication, and failed to appear, leading to default judgment and sale of Neffs land to Pennoyer. Neff sought to

41 recover his land from Pennoyer. Outcome depended on validity of judgment in first action. Dispositive Factors: Judgment is void bc no PJ bc no personal service of process, no appearance, not an in rem action, and property not attached. Authority of courts is restrained by their territorial limits: jurisdiction over residents and property within the state. Rule: Two ways to get jurisdiction: 1) by personal service of process; 2) by in rem proceeding for property within the courts jurisdiction. For a quasi in rem proceeding, once property is attached, you can use service by publication (constructive notice). For in personam proceedings, you must have personal service w/in the forum state or voluntary appearance by the defendant to obtain jurisdiction. Where the entire object of the action is to determine the personal rights and obligations of D (in personam), constructive service is impermissible Facts: Harris (NC) owed Balk (NC) $180. Balk owed Epstein (MD) $300. While D was temporarily in MD, Epstein brought suit (direct service) and had issued a writ of attachment for Ds debt to P D did not contest this garnishment. D paid $180 to Epstein. P later sued D in NC for the $180 Harris answered with Epsteins recovery in MD Dispositive Factors: MD had PJ over Harris due to personal service of process. He subjected himself to PJ once he was served and then defaulted. Harris never contested PJ over him, but consented. Rule: If state law provides for the attachment of a debt, and the garnishee is found in that state and personally served while there, then the court can acquire jurisdiction over him, and can garnish the debt from him. Legal fiction: Individuals debt follows him everywhere Facts: D (PA) drove to MA and struck D. No personal service and no property attached. Dispositive Factors: Constructive notice here was adequate to serve as actual service bc MA law provided that registrar constitutes an agent for D. Due to states power to regulate use of highways by nonresidents, state may appoint an official to be served for causes of action arising from use of highways. Public policy rationale: interests of state to protect residents on highways; nonresident motorists subject themselves to privileges and responsibilities of the state by using state highways. Law puts residents and nonresidents on same footing no discrimination Literal and precise equality is not necessary

1905

Harris v. Balk (U.S.) (pg. 620)

Yes

1927

Hess v. Pawloski (U.S.) (pg. 623)

Yes

42 Rule: There must be actual service in the state, not just notice to D. Law that appoints an official to receive service of process in this manner is constitutional for policy reasons. Trend: Focus moving away from in-state service to in-state activities of D (moving toward Intl Shoe separation of jurisdiction and notice) MINIMUM CONTACTS, TRADITIONAL NOTIONS OF FAIR PLAY AND SUBSTANTIAL JUSTICE, a fact-based inquiry Facts: DE corporation, primary place of business in Missouri, does business in several states. No offices in WA, but employs 13 shoe salesmen residing in WA, who exhibit samples and gain prospective buyers. Salesmen dont distribute the shoes, but place the orders. WA sues for contributions to unemployment fund required by statute. Dispositive Factors: The cause of action arose out of Ds activities as corp. employed salesmen who resided and did business on behalf of the corp. in WA. The corp.s presence in the state was manifested by its activities there, and solicitation of orders was sufficient for minimum contacts. Obligation arises from corp. benefiting from state laws. Service upon salesman was sufficient to provide notice to corp. bc corp. identity is a legal fiction. Rule: D must now have minimum contacts with the state to fulfill jurisdiction. Presence is manifested by Ds activities within the PJ (including activities carried out on behalf of corp.). Casual presence, or isolated conduct, is not enough to subject D to suit on cause of action unconnected with activities in PJ. Compare quality and nature of activity with privileges and obligations that arise out of that activity, the nature of the contacts and whether suit arises out of those contacts. o New rule: due process requires only that in order to subject D to a judgment in personam, he must have certain minimum contacts with the state such that maintenance of the suit does not offend traditional notions of fair play and justice Fair play equitable notion that persons must deal w/each other fairly and justly Minimum contacts minimum degree of contact necessary in order to sustain a cause of action w/in a particular forum consistent w/due process o Corporate personality is a fiction unlike a person, its presence in a state can be manifested through the activities of its authorized agents Presence is the standard by which courts will analyze Ds activities to determine whether they are sufficient to

1945

International Shoe Co. v. State of Washington (U.S.) (pg. 625)

Yes

43 satisfy the demands of due process sufficient contacts within state that make it reasonable for D to defend against a suit brought there Demands of having D defend a case so far from its HQ can be used as a defense

o Specific jurisdiction requires that Ps claim arise out of Ds particular act w/in that state Bell In most cases, P has to have had contact with Ds operations in that state to sue D in that state In CA, however, as long as there is a substantial nexus btwn Ps claim and Ds forum activities, P can bring claim in that forum 1957 McGee v. International Life Insurance Co. (U.S.) (pg. 634) Yes SPECIFIC JURISDICTION (applications of minimum contacts) Facts: Suit in CA by beneficiary on a life insurance policy owned by her son. The only contact on record was this one policy sold through the mail. Insurance co. (TX) had no office or agent in forum state, and no other evidence of soliciting or doing business there. Dispositive factors: The claim arose out of the policy that the insurance co. mailed to the forum state. Trend of expansion of scope of jurisdiction over nonresidents attributed to fundamental transformation of the national economy. Modern communication and transportation has made it much less burdensome to defend suit in another state. This shows the high-water mark of specific jurisdiction. Court supported this with: (1) Individual claimants could usually not afford going to another forum to bring suit (P is CA resident); (2) Crucial witnesses often found in insureds locality; (3) Activity is not unilateral (later incorporated in purposeful availment test, Hanson) Rule: Even if only a single contact with forum state, PJ is sufficient via specific jurisdiction if claim arises out of that contact, which is not unilateral. Facts: Ps alleged rape resulted from negligent security at Barbados hotel, filed suit in MA. She booked the room through a travel agency in MA and Hilton had advertised the hotel in MA. Dispositive factors: Its not sufficient that the D conduct business in the state. Ps claim must arise out of this activity. Here, connection was too remote. (ex. of PJ under long arm statute but not under due process analysis) Rule: Even if there is connection between D, Ds activities in

1992

Crocker v. Hilton International Barbados, Ltd. (1st Cir.) (pg. 633)

No

44 the forum state, and P, that may not be sufficient for specific PJ if the connection between the claim and the activity is too remote look at connection between Ps claim and Ds activity. Facts: Ps filed suit in Missouri seeking damages for personal injuries suffered at D hotel in Nevada. Ds only contact with Missouri was that its web site was accessible there, but it was not used to book the reservation, and no claim that Ps even viewed it. Dispositive factors: Bc no causal link between Ps accident and Ds only forum contact, there cant be specific personal jurisdiction. Rule: For PJ, must be link between the Ps claim and Ds contact with forum state. The fact that a web site can be viewed in the forum state is not sufficient when it is unrelated to the claim. Facts: CA residents consumer class action against Nevada hotel claimed D failed to notify guests of energy surcharge imposed at checkout. Hotels web site quoted room rates, permitted visitors to make reservations, and didnt inform of surcharge. INTERNET Dispositive factors: CA Supreme Court applied more relaxed standard for relatedness requirement. Ps cause of action was premised on alleged omissions during transactions with CA residents and in CA advertisements. Bc harm alleged relates directly to content of Ds promotional activities in CA, there is inherent relationship between Ps claims and Ds contacts with CA. Rule: More relaxed relatedness standard in CA, where Ds promotional activities in the forum and Ps allegations are related. PURPOSEFUL AVAILMENT Facts: Mother establishes trust with DE co. while residing in PA, then moves to FL, where she receives income and designates beneficiaries. Daughters sue DE trustee in FL court challenging disposition of the trust. Dispositive factors: D has no office and transacts/solicits no business in FL and cause of action does not arise out of transaction in forum state (unlike McGee). Unilateral activity is not sufficient for minimum contacts. D must purposefully avail itself of the privilege of conducting activities within the forum State. Rule: If only unilateral activity and D has not purposefully

2001

Bell v. Imperial Palace No Hotel / Casino, Inc. (E.D. Mo.) (pg. 635)

2005

Snowney v. Harrahs Entertainment, Inc. (CA) (pg. 636)

Yes

1958

Hanson v. Denckla (U.S.) No (pg. 639)

45 availed himself to privileges of the state, then no minimum contacts. REASONABLY FORESEE BEING HALED TO COURT Facts: Car sold in NY involved in an accident in Oklahoma. P sue nonresident car manufacturer and dealer in Oklahoma. Dispositive factors: Foreseeability here is not the mere likelihood that product will go to forum state, but that Ds conduct and connection w/ forum enable him to reasonably anticipate being haled into court there. (so foreseeability doesnt get around minimum contacts and purposeful availment analysis). Purpose of minimum contacts: (1) protect D from burden of litigating in inconvenient forum; (2) ensure state dont reach beyond constitutionally imposed PJ limits. Unilateral activity is not sufficient. Policy: so Ds can structure its business and prepare for liability risks. Economic benefits arent sufficient when they dont stem from minimum contacts with state. Ds had no independent contacts, ties, or relations to Oklahoma. No evidence that any of Ds cars are sold outside tristate area Financial benefits accrued by D from a collateral relation to the forum state will not support PJ if they dont stem from constitutionally cognizable contact with that state Brennans Dissent: Cars function is to be mobile. Trial can proceed perhaps most efficiently in OK. State has interest in making highways safe (rebuttal: but that is true for all states, so seems unreasonable in this instance to submit all car dealers to PJ in all states) Marshalls Dissent: D deliberately and purposefully chose to become part of global network for marketing and servicing automobiles. Ds profit by selling cars to ppl knowing they can drive the car elsewhere (rebuttal: that is true of all states; Ps agency brought car into state). Rule: Whether Ds contacts with forum state are such that make it reasonably foreseeable for him to expect to be hauled into court. PUBLICATIONS & DEFAMATION CASES Facts: Jones (TV actress), resident of CA, brings libel suit in CA against National Enquirer, distribution co., and reporter and president and editor (FL). Reporter and president/editor contest PJ. Dispositive factors: CA is both the focal point of the story and of the harm suffered conduct was specifically/intentionally aimed at CA. Article drawn from CA sources, targeted to CA,

1980

World-Wide Volkswagen v. Woodson (U.S.) (pg. 641)

No

1984

Calder v. Jones (U.S.) (pg. 654)

Yes

46 magazines largest circulation is in CA, and Ds knew harm would be in CA. Rule: When effects of conduct are felt within the forum state, but activity doesnt literally take place there, D may be subject to PJ if he has intentionally aimed his conduct toward that state. Intentional torts allow courts to assert PJ over a person in the state where the tort was committed o Where a person intentionally acts to impact a person in the forum state, a court could assert PJ Facts: NY resident brings defamation suit in corporate Ds home state of Ohio; dismissed due to SOL, so she files in NH, longer SOL. Magazine had monthly distribution of 10,000-15,000 copies. Dispositive factors: This limited distribution was sufficient purposeful contacts for general jurisdiction bc D had continuously and deliberately exploited NH market. Rule: P can sue for defamation in another state, which neither party is a resident of if there is large circulation, so D can reasonably anticipate being haled into court there. Facts: CA resident sues non-resident newspaper for defamation. Paper sold 13 daily editions and 18 Sunday subscriptions in CA. Dispositive factors: P lived in CA and nature of column would have severe impact on P as an individual. It is reasonable that bulk of harm be felt in Ps domicile. Rule: Small circulation alone wont bar PJ for defamation when P is resident of the state. Facts: P aware of advertisement in France featuring an ad of him smoking, which he campaigned against. P files suit in MA against tobacco co. and French advertising agency. Distribution of 305 magazines w/ the ad in MA. Dispositive factors: Focus on intent in defamation cases. (1) Acts not committed with sufficient purpose to fulfill Calder intent; (2) created for French audience and aimed at French consumer market; (3) co. not aware would reach/effect MA; (4) MA not the focal point since ads appeared in many magazines; (5) size of distribution in MA. Policy: otherwise, PJ would credit isolated and fortuitous contacts and negate reason for purposeful availment test.

1984

Keeton v. Hustler Magazine (U.S.) (pg. 656)

Yes

1996

Gordy v. Daily News (9th Cir.) (pg. 657)

Yes

1998

Noonan v. Winston Co. (1st Cir.) (pg. 657)

No

47 Rule: Small circulation alone isnt sufficient for PJ, but can help establish intentionality. When analyzing defamation case, focus on whether Ds conduct had intent (purposefulness) of reaching/effecting forum state. Injury in forum state is not sufficient. Facts: P (NH), CIA deputy director, sues Washington Post article sources. P forced to resign position. Dispositive factors: Ds knew information would have devastating impact on P, and intent of injury felt in NH, where P has established reputation as businessman and public servant, can be inferred. Rule: Again, focus on intent and whether conduct is aimed at forum. Impact of injury plays a role as well. Even sources are subject to this. 1989 National Assoc. of Real No estate Appraisers, Inc. v. Schaeffer (C.D. Cal.) (pg. 659) Facts: D (RI) got his cat certified by P assoc. (AZ) and publicized it; CA newspaper telephoned D in RI. Story disseminated nation-wide and P sues D in CA. Dispositive factors: Response to unsolicited phone call was not sufficient for minimum contacts b/c Ds conduct was not calculated to cause injury to P in a state where neither of them reside. Rule: Further application of intentionality/purposefulness standard. More difficult to get minimum contacts when neither party is a state resident and when source didnt contact resident periodical. Facts: P (CA) sues D entertainer for making libelous comments while interviewed via telephone in NY. Suit filed in FL, where small number of magazines with story sold. D performed in FL and records sold there, but that was unrelated to claim. Dispositive factors: Giving an interview to reporter is not sufficient for D to anticipate being haled into FL court. D not employed by or in control of magazine (unlike Keeton). Rule: No PJ when person who makes comments has no relation to where comments are circulated and P not domiciled there. DEFAMATION & THE INTERNET Facts: P (AL) brought defamation suit in AL against D, Minn. resident for content D posted Internet newsgroup archaeology web site. Dispositive factors: Mere fact that D knew P lived in AL and postings would affect her there was not sufficient for PJ due to universal reach of the Internet. Nothing suggests posting was

1989

Hugel v. McNell (1st Cir.) (pg. 659)

Yes

1990

Madara v. Hall (11th Cir.) (pg. 659)

2002

Griffis v. Luban (Minn.) (pg. 658)

No

48 expressly aimed at AL or AL audience other than P. (different if web site was for AL community, or AL more closely connected to archaeology). Different from Gordy bc there, D sought subscribers in forum state. Rule: Look at whether there is a close relationship between Ps profession and forum state (Calder v. Griffis). Just bc comments could be read in forum state and P lives there is not sufficient without some stronger connection between Ds conduct and forum state. Facts: P, MA corp. alleged that Ds, Ohio resident and employee of competitor had engaged in campaign of defamation on the Internet. Several hundred messages posted on yahoo message board dedicated to discussion of Abiomed and frequented by MA residents. Dispositive factors: Being haled into MA court was foreseeable, if not inevitable. Rule: Can get PJ when D web site has specific connection to P and forum state (MA was effectively the focal point). STREAM OF COMMERCE Facts: BK franchise attempts to bring Michigan businessman to court in FL bc they fell behind in payments. Governing contract provided that the franchise relationship is established in Miami and governed by FL Dispositive factors: (1) Prior negotiations and contemplated future consequences; (2) Terms of the K and parties actual course of dealings (direct contact). D has had fair warning and has purposefully directed his activities. FAIRNESS FACTORS 1. Burden on D 2. States interest (when P is citizen of forum state) 3. Ps interest in obtaining effective relief a. SOL issue in other forum b. Weight of Ps injury 4. Interstate judicial systems interest in obtaining effective relief 5. Shared interest of states in furthering substantive social policies (catchall for fairness) a. Disparity in bargaining power b. Nations interest in maintaining good relationship with neighbors (Asahi) However, D deliberately reached out beyond MI to establish a contract in FL nature of the contract was such that he would have a long-term, substantial

2005

Abiomed, Inc. v. Turnbull Yes (D. Ma.) (pg. 659)

1985

Burger King v. Rudzewicz (U.S.) (pg. 672)

Yes

49 relationship with P in FL o No random, fortuitous relationship with FL o D was aware that his actions would cause harm in FL o D knew that FL HQ controlled all important decisions made in o D purposefully availed himself of FL laws by entering into a contract that specified that FL law would govern Asserting PJ in this case is fair and reasonable o FL does have an interest in trying this case b/c it involves a corporate citizen o D was not unduly burdened by having to litigate in FL o D was a sophisticated businessman, knew how to read a contract Nevertheless, court rejects uniform principle PJ must still be based on a case-by-case analysis

Rule: If D has minimum contacts, he must show why other considerations should prevent exercise of PJ; Contract alone does not establish minimum contacts no mechanical tests

1987

Asahi Metal Industry Co. v. Superior Court of California, Solano County (U.S.) (pg. 660)

Facts: Zurcher sued in CA for defective product in motorcycle against Cheng Shin, Taiwanese manufacturer. Cheng Shin filed cross-complaint against Japanese co. Asahi, manufacturer of tube valve assembly. Original claim settled, leaving Cheng Shin and Asahi. Dispositive factors: Awareness that goods might reach forum state could not establish minimum contacts (not enough to have stream of commerce). Court addressed fairness standards of Burger King. Court said that the unique burden of defending in a foreign legal system should have significant weight in assessing the reasonableness of asserting PJ. The mere placement of an object into the stream of commerce is not an act purposefully directed at the forum state The substantial connection between D and the forum state necessary for minimum contacts must come about through Ds purposeful action directed at the state Application of fairness factors: (1) Asahi was foreign corp.; (2) claim was a third-party claim for indemnification asserted by another foreign corp.; (3) Asahi manufactured in Japan and shipped to Taiwan, and only after assembly by Cheng Shin did they get to CA.

50 Rule: OConnor: Placing a product within the stream of commerce is not sufficient alone for minimum contacts. D must have additional contacts (something more), like (1) designing product for that particular market, (2) advertising in the forum State, (3) establishing channels for providing regular advice to customers in forum State, (4) marketing product through distributor who has agreed to serve as sales agent in state. Brennan: Stream of commerce is sufficient. (conflict in diff. jurs) o Stream of Commerce Analysis: When in the context of a defendants goods reaching the forum state through the stream of commerce, the purposeful availment analysis takes on a new question: how broad is the stream of commerce? Issue is currently unresolved, no majority on that portion Justice OConnor a More Narrow View of Stream of Commerce: Purposeful Availment by Additional Conduct: Rejected Brennans premise of mere awareness. She concludes that there must be a purposeful availment of the forum State market. Aside from placing a product in the stream of commerce, additional conduct is needed to indicate an intent or purpose to serve the market. Factors to Consider: o Design for the market. o Advertising in the market. o Customer Service. o Marketing. Justice Brennan - a Broad View of the Stream of Commerce: Purposeful Availment by Awareness: Justice Brennan reasoned that as long as a corporation is aware that the final product is being marketed in the forum State, and is benefitting from this, the possibility of a lawsuit there cannot come as a surprise.

1990

In re Perrier Bottled

Yes

Facts: Claim against French corp. deriving from admission that

51 Water Litigation (D. Conn.) (pg. 669) benzene found in its naturally pure water. Dispositive factors: Bottles specifically designed for U.S. market and labeled in ounces rather than metric measures, so PJ was reasonable. I Facts: P brings design defect claim in GA against French auto manufacturer. Dispositive factors: Distinguished from Asahi b/c public and private interests are greater due to different kind of P and different kind of case and facts. Additional conduct of designing product for U.S. market, advertising in U.S., est. channels for customers in U.S. to seek advice about product, and maintained U.S. distribution network. Issue Did D purposefully avail itself of New Jerseys laws such that NJ had PJ over D? Facts P was injured by a metal-shearing machine manufactured by D, a UK-based company, in the UK Ds products were sold in the U.S. by a distributor not under Ds control D attended conventions in the U.S. to advertise its products, but none of them took place in NJ No more than 4 of Ds machined ended up in NJ Dispositive Factors It is the defendants actions and not his expectations that subject him to PJ foreseeability not enough, need active measures to target a specific juridiction o PJ is in the first instance a question of authority and NOT fairness if foreseeability were the only criterion, persons could potentially be sued anywhere o Need personal availment before you can apply a fairness analysis D did not purposefully direct actions at NJ o D has no contacts in NJ save for its 4 products Concurrence Single, isolated sales do not constitute minimum contacts P bears burden of establishing PJ but failed to do so Ds liability to suit does not travel with its product NJs stance would make any manufacturer who submits products to a national distributor liable in any state Dissent D purposefully sought to use U.S as a market and engaged an international distributor to prevent

1993

Vermeulen v. Renault (11th Cir.) (pg. 669)

Yes

2011

J. McIntyre Machinery Ltd. (D) v. Nicastro (P)

No

52 liability o Regular attendance at conventions Court has regressed by holding that D was not subject to PJ D is certainly not subject to general, all-purpose jurisdiction in NJ no continuing, substantial relationship there NJ would not be trampling on other states sovereign rights by asserting PJ PJ depends on due process, not state sovereignty o Fairness and reason are the central criteria NJ is the 4th largest importer and the largest scrap metal market

Significance There may be situations where a foreign corporation directs activity at U.S. as a whole but not at any specific state

2002

ALS Scan v. Digital Service Consultants (4th Cir.) (pg. 687)

No

THE INTERNET Facts: MD co. sues VA ISP after customer displays copyrighted photos on web site. ZIPPO TEST (sliding scale): likelihood that PJ can be exercised is directly proportionate to the nature and quality of commercial activity that an entity conducts over the internet (1) Whether person maintaining web site directs electronic activity towards that state; (2) Whether they manifested intent of engaging in business or other interactions w/in the state; AND (3) Whether activity creates a potential cause of action cognizable in states courts for person in the state. Internet policy concern Holding: The Court emphasized the Supreme Court decisions in Hanson and McGee, which concluded that technology cannot eviscerate the constitutional limits on a States power to exercise jurisdiction over a defendant. The Court rejected exercising jurisdiction in this case. Since the Internet is omnipresent, if a rule were promulgating that the mere act of placing information on the Internet would subject a person to personal jurisdiction in each state where that information is accessed, then that person would effectively be subject to personal jurisdiction in every state.

1977

Shaffer v. Heitner (U.S.)

No

PERSONAL JURISDICTION BASED ON PROPERTY

53 (pg. 695) W/IN STATE Facts: DE long arm statute gives court PJ by sequestering Ds property located in the state. Heitner = 1 share stock holder in Greyhound (incor. DE). Sued Greyhound officers and (non-DE residents) and sequestered their stocks. Quasi in rem proceeding P sued D, alleging that D had violated its duties by engaging in actions that resulted in it incurring $13 million in damages from antitrust suit and criminal contempt D did not offer in best interests of the corporation, shareholder derivative action suit Dispositive factors Property wasnt the subject matter of case. D has no other connection w/ DE. Long arm statute doesnt say that position as officer in DE co. leads to PJ (later changed). Attachment was just to get PJ, not to secure a judgment. Quasi in rem must still pass minimum contacts. Rule If property is unrelated to Ps cause of action, it alone cannot be used to assert PJ still need a minimum contacts analysis o In this class of cases, assertion of in personam jurisdiction would be unconstitutional thus, indirect assertion of in personam jurisdiction through attachment of property is also unconstitutional Powell concurrence o It may be possible that some forms of permanent property whose situs is indisputably and permanently located in a state (e.g. real property) may provide enough minimum contacts to confer PJ to the extent of the value of that property 1990 Burnham v. Superior Court of California (U.S.) (pg. 710) Yes TRANSIENT JURISDICTION is OK Facts: Nonresident personally served for divorce in CA while visiting on business and to visit kids. Dispositive factors: Physical presence in state enables PJ. (tag jurisdiction). Minimum contacts applies to when D is not present in forum state. PJ on these grounds comports with traditions of legal system. Brennan Dissent: Must assess everything under minimum contacts analysis. Rule Presence in a state is enough for in personam jurisdiction EVEN if presence is NOT continuous Burnham only applies to persons and NOT to corporations PJ over corporations must be based on: o Specific act jurisdiction over claims related to in-

54 o o state, minimum contact activities; OR General jurisdiction based on continuous and systematic conduct Corporations cannot be sued merely b/c their agent is passing through a jurisdiction

1959 1992

1995 1991

Grace v. MacArthur (E.D. Ark.) (pg. 723) Wenche Siemer v. Leajet Acquisition Corp. (5th Cir.) (pg. 723) Kadic v. Karadzic (2d. Cir.) (pg. 724) Carnival Cruise Lines, Inc. v. Shute

Yes No

Facts: D personally served on airplane over Arkansas. Facts: No tag PJ for corporations (such in-state service of corp. rep. is not sufficient) Facts: D, Bosnian leader, served in NYC hotel on UN business (doesnt matter that guards knocked papers to floor). FORUM SELECTION CLAUSES - CONSENT Forum-selection clauses in contracts provide express consent to the courts personal jurisdiction in advance of suit, and such consent functions to cure any jurisdictional defects that might otherwise exist. Factors to Consider: Does the clause dispel confusion? Is it designed to give unfair advantage> Issue Was the notice in this case constitutionally adequate? Facts Common trust fund trust fund managed by a financial institution as trustee wherein funds of many estates are comingled for efficient management NY law allowed for this under the NY banking law D established a common trust fund under this law provided notice in accordance with the statute by publication in a local newspaper Name and address of the trust company, etc. D also notified beneficiaries by mail at the time that the first investment was made Holding No, reversed A state may determine the rights of nonresident beneficiaries in the settlement of trust accounts if the notice provided is constitutionally adequate, as it was in this case However, the state law is incompatible with due process requirements as a basis for adjudicating property for persons whose whereabouts are known Rules Publication alone is a reliable means of acquainting interested parties with the fact that their rights are before the courts ONLY with respect to those beneficiaries whose interests or whereabouts could not with due

Yes Yes

1950

Mullane v. Central Hanover Bank & Trust Co.

Yes and No

55 diligence be ascertained. As to known present beneficiaries of known place of residence however, notice by publication stands on a different footing. The notice must be of such a nature as reasonably to convey the requested information and to afford a reasonable time for those interested to make their appearance notice can be crafted to fit requirements of particular recipients

GENERAL JURISDICTION Year 1952 Case Perkins v. Benguet Consolidated Mining Co. (U.S.) (pg. 634) PJ? Yes Facts; dispositive factors; rule CONTINUOUS AND SYSTEMATIC BUSINESS Facts: Philippine mining co. temporarily relocated its president to Ohio. There, president maintained co. files, carried on correspondence, drew salary checks, had a bank account, and held directors meetings. Dispositive factors: President carried on a continuous and systematic supervision ofactivities of the company. Such high level of activity was enough for general jurisdiction, so it didnt matter that claim arose from transactions conducted outside the forum state. Rule: Continuous and systematic activities = general jurisdiction. Facts: Helico: Colombian co. that does business in TX, where helicopters are made and where it buys them. Crash in Peru. Training in TX. o D had a joint-venture with a TX company D officers made trips there, and negotiated contract Contract signed in Peru, residence of all parties will be there, Peruvian courts will have jurisdiction over disputes o D purchased helicopters, spare parts, and accessories from TX sent pilots and D officials there for training and workshops D has no other business in TX and no agent for SOP there, no property or office P was not domiciled there either Dispositive factors: Purchases not enough for general PJ. Needs to be stronger, like in Perkins. Rule: One D officer trip to TX for negotiating a contract is certainly not substantial contact, nor is drawing check on a TX bank unilateral activity by one party (Kulko/Hanson)

1984

Helicopteros Nacionales De Colombia v. Hall (U.S.) (pg. 726)

NO

56 Mere purchases made in forum state, even if they are regular, are insufficient for GJ

2011

Goodyear Dunlop Tires v. Brown

No

Issue Are foreign subs of U.S. companies subject to PJ in U.S. courts for claims unrelated to activities w/in those state? Holding Ds products that reached NC through the stream of commerce was very limited no continuous or substantial contact that established GJ Placing items w/in the stream of interstate commerce does not create GJ Dispositive Factors o D has no place of business in NC and no substantial business not even registered to do business there Tires that did reach NC were not those implicated in the accident o NC conflated SJ stream-of-commerce analysis with GJ o o Stream-of-commerce never supports GJ, ONLY SJ o Also a fair-play violation bringing D to NC would not fulfill traditional notions of substantial justice Place of business refers to where corporations high-level officers manage, direct, and control corporations activities (NOT where the board meets) nerve-center (simple administrative approach) o Statutory interpretation federal diversity statute defines citizenship, need to find place of Ds citizenship to determine whether there is diversity volution of statute P sued D in CA and D tried to remove to federal court on diversity grounds o P challenged, said that D is a citizen of CA o D submitted affidavit to show that its principal place of business if NJ Rule of Law: corporations are citizens of the states where they are incorporated and where they conduct their principal place of business Holding: There is diversity in this case o Even though it could lead to aberrations whereby a company can remove even if it has significant business in a state, court must accept them in interest of a clearer rule Is it unfair to force D with a nation-wide business to defend in states around the country?

2010

Hertz Corp. v. Friend

No

57

58

59

Subject-Matter Jurisdiction
Favored defense Not waivable o Court can raise sua sponte at any time during litigation (including appeal). State courts have general subject matter jurisdiction, whereas federal courts have limited subject matter jurisdiction. Policy rationale for this is that it needs to be an important national interest to be heard in federal court. o However, state and federal courts largely share subject matter concurrent SMJ Diversity (>$75,000) and federal question cases may be heard in either federal or state court o Fed exclusive jurisdiction copyright, bankruptcy, admiralty, etc o Actions that are NOT diversity or federal question can ONLY be heard in state court o Strategic concerns More generous discovery regs may compel P to file in fed court More lenient juries may compel filing in state court Once there has been a final judgment on the merits (and not on appeal), judgment cant be vacated due to lack of subject matter jurisdiction. o Federal courts dont want D to sandbag P with that post -judgment. Basically, after judgment at trial you can appeal SMJ issue, but you cant move to vacate the judgment ( Rule 60).

Article III 2: Extends constitutional parameters of federal judicial power to cases arising under this Constitution, the laws of the U.S., and Treaties made, or between citizens of different States. The Constitution does not grant jurisdiction to federal courts, but only authorizes Congress to do so.

Congress has granted jurisdiction to federal courts in two cases: 1. Claims that raise a federal question 2. Diversity actions between citizens of different states A lawyer seeking to file a lawsuit in federal court must ask two questions in determining whether a suit may be filed there. First, is this case one which constitutionally may be granted to the federal courts, because the power for them to hear it is granted in Article III, s. 2 of the Constitution? And second if the case does fall into one of the categories in Article III, s. 2, has Congress actually conveyed jurisdiction over this type of case in a federal statute? Federal Question Jurisdiction Section 1331: Federal Question The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States. A case arises under federa

60 l law if the plaintiffis alleging a right or interest that is substantially founded on federal law, which consists of federal common law, federal constitutional law, federal statutory law, treaty law, and federal administrative regulations.

1) The Federal Question Must Appear in the Complaint The federal question must appear as part of the plaintiff's cause of action as set out in a well- pleaded complaint. It is therefore sometimes necessary to determine whether certain allegations are proper in pleading the cause of action, and whether the federal element is essential to the plaintiff's case Federal courts only have jurisdiction if the federal issue is necessary to the proof of the plaintiffs claim a) Defendant's Answer or Defense Is Irrelevant The content of the defendant's answer is not relevant; the existence of a defense based on federal law will not give federal question jurisdiction. Likewise, the court may not look to a counterclaim asserted by the defendant to determine whether the plaintiff's complaint states a federal question claim. [Holmes Group, Inc. v. Vornado Air Circulation System, Inc., 535 U.S. 826 (2002)] b) Anticipation of a Defense Similarly, a complaint does not raise a federal question if it does so only in anticipation of some defense.

Example: [Louisville & Nashville Railroad v. Mottley, 211 U.S. 149 (1908)] A sues B for specific performance of a contract and alleges that B's refusal to perform is based on B's erroneous belief that federal law prohibits his performance. No federal question jurisdiction exists because the federal question presented by the plaintiff's complaint is merely in anticipation of B's defense. Mottley rule: Well-pleaded complaint sets forth a basis for SMJ and raises a claim based on a federal question o Under Mottley's "well pleaded complaint" rule, the court, in deciding whether the case "arises under federal law" for purposes of s. 133I, asks whether the plaintiff would have to raise the federal issue in a complaint which includes the elements she needs to prove to establish her claim, and only those elements. Jurisdiction under 28. U.S.c. s. 1331 "must be determined from what necessarily appears in the plaintiff s statement of his own claim in the bill or declaration" (Taylorv. Anderson, 234 U.S. 74, 75-76 (1914)), not from any anticipated defenses the complaint alleges that the defendant will assert. o Holmes Creation Test: A suit arises under the law that creates the cause of action American Well Works v. Layne (1916) Grable Rule: EXCEPTION: a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law Grable & Sons Metal Products Inc. v.

61 Darue Engineering and Manufacturing (SCOTUS 2005) (even though Ps claim rose under state law b/c it involved a traditional property action to quiet title, P could only establish its right to reclaim property by proving proposition of federal law) still faithful to the Motely rule b/c court looks at what P must establish to prove her case o Whether the state-law claim necessarily stated a federal issue o Whether the federal issue is actually disputed and substantial o Whether a federal forum may entertain w/o disturbing federalist balance 2) Implied Federal Right of Action It is not essential that the federal statute expressly provide for a civil cause of action for an alleged violation. Thus, federal question jurisdiction was held to exist in an action involving an alleged violation of the Fourth and Fifth Amendments [Bell v. Hood, 327 U.S. 678 (1946)] and an alleged violation of the Securities Exchange Acts of 1934 [Case v. Borak, 377 U.S. 426 (1964)], although neither the Constitution nor the act involved created a "remedy" for the wrongs complained of. However, not all federal provisions creating duties are held to create an implied private right of action. [Cort v. Ash, 422 U.S. 66 (1975)] 3) Federal Corporations Federal question jurisdiction does not arise merely from the fact that a corporate party was incorporated by an act of Congress unless the United States owns more than one-half of the corporation's capital stock, in which case it is treated as a federal agency that can sue or be sued on that basis in federal court. [28 U.S.c. 1349] 4) Cases WELL-PLEADED COMPLAINT RULE of Mottley Louisville & Nashville R.R. v. Mottley (U.S. 1908) (pg. 765): No subject matter jurisdiction. Facts: P sues railroad for discontinuing lifetime passes that D agreed to give to P in exchange for not suing injuries that D suffered. D breaches K bc of recent Congressional Act forbidding such passes. P argues for SMJ bc: (1) Act doesnt bar passes in these circumstances; (2) Even if it does, that violates the 5 th Amendment Due Process clause. P is anticipating claim that turns on federal question of law. WELL-PLEADED COMPLAINT RULE: For federal question diversity, P must have to raise federal issue in her complaint that only includes the elements she needs to establish her claim. If P pleads well, then the federal issue should be obvious. If court doesnt have power to hear initial complaint, then it doesnt have power to compel the response. Jurisdiction descends from the complaint itself, and P is master of her own cause of action (jurisdiction cant be based on what D may or may not claim). Skelly Oil Co. v. Phillips Petroleum Co. (U.S. 1950): No subject matter jurisdiction Potential D who anticipates getting sued cant seek declaratory judgment for something that arises under federal question jurisdiction. This would effectively be a way to get around the well-pleaded complaint rule by encouraging D to preemptively bring an affirmative defense, and that is not permissible. Allowing artful pleading would contravene the whole trend of jurisdictional legislation by Congress, disregard the effective functioning of the federal judicial system and distort the limited procedural purpose of the Declaratory Judgment Act. Merrell Dow Pharmaceuticals, Inc. v. Thompson (U.S. 1986) (pg. 769): No subject matter jurisdiction

62 Facts: Ps sought damages for birth deformities allegedly caused by Bendectin. Complaint asserted state law claims and violations of FDCA. FDCA violation didnt give rise to an independent action, but constitutes negligence per se under state law all parties agreed that congress did not create an independent cause of action under the FDCA Rule: The vast majority of cases brought under general federal-question jurisdiction are those in which federal law creates the cause of action 5) Specific Statutory Grants of Federal SMJ a) Amount in Controversy There is no amount in controversy requirement in federal question cases, with the narrow exception for cases brought against defendants other than the United States, its agencies, or employees under section 23(a) of the Consumer Product Safety Act. That section authorizes action by any person who sustains injury by reason of a knowing violation of a consumer product safety rule, or any other rule issued by the Commission. In such actions, at least $10,000 must be in controversy. [15 U.S.c. 2072] b) Exclusive Jurisdiction Congress has expressly provided that the jurisdiction of the federal courts shall be exclusive of state courts in: a. Bankruptcy Proceedings [28 U.S.c. 1334] b. Patent and Copyright Cases [28 U.S.c. 1338] c. Many Cases Where United States Is InvolvedCases involving fines, penalties, or forfeitures under the laws of the United States; crimes against the United States; tort suits against the United States; or customs review. (Because of the doctrine of sovereign immunity, there is no jurisdiction in the courts to hear lawsuits against the United States unless the United States has consented to be sued.) d. Cases with Consuls and Vice-Consuls as Defendants [28 U.s.c. 1351J e. Antitrust Cases Although 28 U.S.c. section 1337 does not expressly make federal jurisdiction exclusive in actions arising under laws regulating interstate commerce, the federal antitrust statutes are interpreted to place the remedy exclusively in the federal courts. [Freeman v. Bee Machine Co., 319 U.S. 448 (1943) f. Admiralty Cases-Caveat 28 U.S.C. section 1333 grants exclusive jurisdiction in cases of admiralty and maritime jurisdiction, but since the same section has a clause "saving to suitors in all cases all other remedies," the result is that federal jurisdiction is exclusive only in limitation of liability proceedings and in maritime actions in rem. g. Foreign State-Caveat 8 U.S.c. section 1441(d) permits a foreign state (or agency thereof), if sued in state court, to remove the action to federal court. h. Postal Matters [28 U.S.c. 1339J i. Internal Revenue [28 U.S.c. 1340] j. Securities Exchange Act [15 U.S.c. 78aaJ

63

64 Diversity Jurisdiction The federal courts have been given subject matter jurisdiction over controversies between citizens of different states, even though the controversies do not involve questions of federal substantive law, in order to protect an out-of-state party from possible local bias in state courts. Diversity jurisdiction is more controversial and many critics believe it should be eliminated. Congresss original purpose was to encourage commerce on a national level without troubling national economy with state courts that were believed to be prejudicial. This purpose is not outdated and has lost much of its relevancy. Now, litigators spend a huge proportion of their hours dealing with diversity jurisdiction for their clients, an issue unrelated to the merits of the case. General Rule: Under 28 USC 1332, a federal court has subject matter jurisdiction over a matter where: o There is complete diversity among the parties such that no plaintiff shares citizenship with any defendant; and o The amount in controversy exceeds $75,000

Section 1332: Diversity of Citizenship; Amount in Controversy (a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between: (1) citizens of different States; (2) citizens of a State and citizens or subjects of a foreign state; (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and (4) a foreign state ... as plaintiff and citizens of a State or of different States. For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed to be a citizen of the State in which such alien is domiciled. (c) For the purposes of this section and section 1441 oft his title(1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business .... (2) the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent. (e) The word "States," as used in this section, includes the Territories, the District of Columbia, and the Commonwealth of Puerto Rico.

S. Diversity

Jurisdiction

65

"of--- Scope of possible diversity jurisdiction under Article III, 2 ("the Article III storehouse" )

Il'-,I--

Scope of the diversity jurisdiction conferred by Congress in 28 U.s.c. 1332

In this area lie cases in which some parties are diverse, but there Is not complete diversity. Also casesin which diversity Is complete but the amount in-controversy requirement Is not met.
Figure 51.

Diversity Among the Parties jurisdiction as long as someopposing parties 1) Complete Diversity When Action Is Commenced

to the action are diverse. State

Farm Fire & Casualty v. Tashire, 386 U.S. 523 (1967). As with arising-under jurisdiction, the statutory grant of diversity jurisdiction has historically been narrower than the constitutionalgrant of jurisdiction. See Figure 5-1. Consea) Multiple Parties Complete Diversity Strawbridge v. Curtis, pg. 772) quently, many diversity cases within the "Article III storehouse" may not be Every plaintiff must be of diverse citizenship from every defendant. If one defendant and one plaintiff brought in federal court.

THE

are co-citizens of the same state, there is no diversity jurisdiction. This is the rule of "complete diversity." Example: A, B, and C bring an action against X, Y, and Z. A and B are citizens of New York; X and Yare citizens of Florida; and C and Z are citizens of Texas. Since no MEANING OF STATE CITIZENSHIP diversity exists between C and Z, the requirement of complete diversity is not satisfied, and, as structured, the case cannot be brought in federal court Constitutions establish grand principles but seldom explain exactly how to under diversity jurisdiction.
apply them. In the area of diversity jurisdiction. for example, it has been left to the courts to determine what it means to be "citizen" of a state. For a. But NoteThe rule of complete diversity does not require that every party be of diverse natural persons (that is, human beings), the courts have equated state citizenship from every other party. It requires only that no plaintiff be a co-citizen with any citizenship for diversity purposes with the common law concept of dodefendant. Thus, two plaintiffs who are both citizens of Missouri may invoke diversity of micile. A person's domicile is usually defmed as the state where he has citizenship jurisdiction against three defendants, all three of whom are citizens of Kansas taken up residence with the intent to reside indefinitely. Under this definition, residence is not equivalent to domicile; having a residence in the b. Interpleader Exception state is necessary but not sufficient to establish a domicile for diversity i. Federal Interpleader Statute-Minimal Diversity purposes. If Hawes owns houses in both Missouri and Wyoming and The federal interpleader statute [28 U.S.c. 1335] requires only that among the parties spends a good deal of time in both states, he will still have only one there be "two or more adverse claimants, of diverse citizenship." Thus, "minimal domicile. Which state it is depends on his subjective intent - sometimes diversity" is sufficient to confer jurisdiction under the statute. If there is diversity almost impossible to ascertain - to make one particular state his "home."

between any two of the claimants, all other claimants may be citizens of the same state. (Also, section 1335 only requires that the money or property at issue be valued at $500 91 or more.)

66 ii. Interpleader Under Federal Rules-Complete Diversity Interpleader pursuant to Rule 22 of the Federal Rules, on the other hand, requires the usual diversity between all the plaintiffs (stakeholders) and all the defendants (claimants). b) Diversity When Action Is Commenced Diversity of citizenship (or alienage) must exist as of the time the suit is instituted. [ Grupo Dataflux v. Atlas Global Group, 541 U.S. 567 (2004).] It need not exist at the time the cause of action arose, and it is not defeated if, after commencement of the action, a party later becomes a citizen of the same state as one of his opponents. 2) Citizenship a) State Citizenship of an Individual-Domicile The determination of the state of citizenship of a natural person depends on the permanent home to which he intends to return. The concept is the same, except in name, as domicile. a. A new state citizenship may be established by: i. physical presence in a new place; and ii. the intention to remain there, i.e., no present intent to go elsewhere. 1. This test can be met so long as a party has no definite plans to move elsewhere b. The citizenship of a child is that of her parents. In most cases, the citizenship of a party will be determined by the court, but it may be left to the jury. c. Mas v. Perry (5th Cir. 1974) (pg. 773): Domicile defined as the persons true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent there from. (further application to students in Gordon v. Steele: different if student has a lease and does not intend to return home after school) d. Look at objective facts and statement of intent in context to determine actual residence and intention. (Ochoa v. PV Holding Corp. (E.D. La. 2007) (pg. 774): No SMJ when D previously lived in Louisiana before Hurricane Katrina.) i. Paul Gulley (D) had lived in Orleans Parish, Louisiana, but evacuated to Arlington, Texas, after Hurricane Katrina. ii. While visiting family in Louisiana, Gulley (D) rear- ended the vehicle driven by Angela Ochoa (P), injuring her. 1. Ochoa (P) is a resident of Louisiana. 2. Gulley (D) was driving a. rental car. iii. In ascertaining the parties domiciles, court is not limited to the pleadings can review record evidence, affidavits and other testimony iv. Statement of intent entitled to little weight if it conflicts with objective facts v. The actual fact of residence, and the real intention of remaining there, as disclosed by a persons entire course of conduct, are the controlling factors 1. Exercise of civil and political rights 2. Paying taxes 3. Property ownership, etc. vi. D has burden of showing that removal was proper 1. Factual inquiry 2. Affidavits filed by both parties

67 3. Limited discovery vii. Establishing a new domicile-and demonstrating an intent to establish a new domicile is not difficult under the law. 1. Objective evidence to support a statement of intent to remain in a state might take form in a new driver's license, a new bank account, or a lease on a new apartment b) Citizenship of a Corporation-Possible Multiple Citizenships For diversity purposes, a corporation's citizenship is defined by 28 U.S.C. section 1332. Under this statute, a corporation is deemed to be a citizen of every state in which itis incorporated and the one state in which it has its principal place of business. a. The Supreme Court has held that a corporation's "principal place of business" is the state from which the corporation's high level officers direct, control, and coordinate the corporation's activities (i.e., its "nerve center," which will usually be the corporation's headquarters). [Hertz Corp. v. Friend, 130 S. Ct. !l81 (2010)] b. Thus, many corporations have two citizenships: i. Their state of incorporation; and ii. The state in which their principal place of business is located. c. Although rare, it also is possible for a corporation to have more than two state citizenships because a corporation may be incorporated in more than one state. It is impossible, however, for a corporation to have more than one principal place of business. If an opposing party is a citizen of any of the corporate party's states of citizenship, there is no diversity. i. Special Rule for Direct Actions The rules of corporate citizenship are subject to a special rule in direct action cases. When a plaintiff sues an insurer on a policy or contract of liability insurance, and does not also join the insured, the insurer (whether incorporated or not) is treated as a citizen of all of the following: a) the state in which the insurer is incorporated (if it is) b) the state in which the insurer has its principal place of business, and c) the state of which the insured is a citizen. ii. Corporations Chartered in Foreign Countries A corporation is deemed a citizen of the foreign country of incorporation and is therefore an alien for diversity purposes. All of the circuits that have reached the issue have also held that when a foreign corporation has its principal place of business in this country, it is also a citizen of the state in which that principal place of business is located. [See, e.g., Jerguson v. Blue Dot Investment, Inc., 659 F.2d31 (5th Cir. 1981)] 3) Collusion and Devices to Create or Defeat Diversity The federal court does not have jurisdiction if a party "by assignment or otherwise, has been improperly or collusively made or joined to invoke jurisdiction." [28 US.c. 1359] a) Assignment of Claims The assignment of a claim to another party for collection only is clearly within this section. [Kramer v. Caribbean Mills, Inc., 394 U.S. 823 (1969)] Thus, the assignment would be ignored in determining

68 whether diversity exists. But note: There is no collusion if an absolute assignment of a claim is made and the assignor retains no interest in the assigned claim. b) Class Actions No rule prevents achieving diversity by the adroit selection of named plaintiffs to bring a proper class action on behalf of others. The naming of only members of the class who are not co-citizens of the defendants will create diversity even though other unnamed members of the class are co-citizens who would defeat diversity if named. c) Voluntary Change of State Citizenship A plaintiff can create diversity by changing his state citizenship after the cause of action accrued but before suit is commenced, but the change must be genuine. In other words, a true change of citizenship can create or destroy diversity. The party's motive for changing citizenship is irrelevant. d) Defeating Diversity to Prevent Removal No rule prevents manipulation in choice of a representative or assignment of a claim to defeat diversity (and thus prevent removal from state to federal court). On the other hand, fraudulent joinder of an instate defendant to defeat diversity is no bar to removal. 4) Realignment According to Interest a) May Create or Destroy Diversity In determining whether diversity exists, the court will look beyond the nominal designation of the parties in the pleadings and realign them according to their true interests in the dispute. Thus, realignment may create diversity or destroy it. b) Shareholder Derivative Actions Taking the view that the shareholder's alignment of the corporation as a party plaintiff or defendant is not controlling insofar as diversity jurisdiction is affected by the citizenship of the corporation, the federal courts have established the rule (at least when alignment of the corporation in a shareholder's derivative suit is not specifically provided for by state law) that the corporation is to be aligned as a party defendant. a. Federal diversity jurisdiction is determined in accordance with that alignment when, with respect to the claim sought to be enforced by the shareholder's derivative suit, the corporation is "antagonistic" to the shareholder. [See Smith v. Sperling, 354 U.S. 91 (1957) Jurisdictional Amount: In Excess of $75,000 Actions brought in a federal court under the diversity statute must meet the jurisdictional amount requirement. The matter in controversy must be in excess of $75,000, exclusive of interest and costs. [28 U.S.C. 1332] The amount is determined from what is claimed in the complaint, disregarding potential defenses or counterclaims. Usually, all that is necessary is a good faith allegation that the amount of the damages or injuries in controversy exceeds, exclusive of interest and costs, the sum of $75,000. o Good faith means that there must be a legally tenable possibility that recovery will exceed the jurisdictional amount.

69 o St. Paul Mercury IndemnityCo. v. RedCob Co., 303 U.S. 283 (1938), held that a plaintiff s good faith claim for more than the amount required controls, unless it "appear[s] to a legal certainty that the claim is really for less ... The complaint can be dismissed only if it appears there is no legal possibility of a recovery exceeding the jurisdictional amount. Jurisdiction is not retroactively defeated by the fact that the amount actually recovered is less than the jurisdictional amount.

1) What Is "In Controversy"? a) Collateral Consequences of the Judgment Does the collateral effect of the judgment sought by the plaintiff bring into controversy the value of other claims that may be governed by the judgment? The Supreme Court has held that the collateral effects of a judgment may not be considered. Examples: 1) If an insured asserts a claim for installments due under a disability policy, only the installments due may be considered, even though the judgment may control the insured's rights to payment of future installments. However, if the insurance company sues to cancel the contract for fraud, the value of the entire contract is brought into controversy. 2) If a bondholder sues to collect amounts due on coupons that have matured, only the amount of the coupons is in controversy, even though the judgment will determine the validity of the entire bond issue. However, if the issuer of the bonds seeks a declaratory judgment that the bonds are properly issued, the value of the entire bond issue would be in controversy. b) Interest and Costs The statute excludes interest and costs in determining the jurisdictional amount. However, attorneys' fees that are recoverable by contract or by statute are considered part of the matter in controversy rather than as costs. Similarly, interest that constitutes a part of the claim itself, as distinguished from interest payable by virtue of a delay in payment, is part of the jurisdictional amount. c) Equitable Relief There may be difficulty calculating an amount in controversy for a claim for equitable relief, given that the claimant does not seek money damages. For example, suppose P sues D for an injunction ordering D to remove part of D's house that blocks P's view. What is the value of the injunction and, therefore, the claim? a. Some courts look at the issue from the plaintiff's viewpoint, and ask what the value of the harm caused by the blocked view is. b. Other courts look at the issue from the defendant's viewpoint, and ask what it would cost the defendant to comply with the injunction if it were ordered. c. Some courts conclude that the amount in controversy requirement is satisfied if the amount under either test-plaintiff's viewpoint or defendant's viewpointexceeds $75,000. d) Punitive Damages

70 If a punitive damage claim is permitted under state substantive law, it MAY be used in making the dollar amount requirement because there is "no legal certainty" that the amount will not be recovered. 2) Aggregation of Separate Claims a) One Plaintiff Against One Defendant Rule 18 For purposes of meeting the jurisdictional amount, the plaintiff may aggregate all her claims against a single defendant. This aggregation is permitted regardless of whether the claims are legally or factually related to each other. b) One Plaintiff Against Several Defendants A plaintiff who has an action against several defendants CANNONT aggregate claims based on separate liabilities. Thus, if P had a claim of $50,000 against D-I and a separate claim of $30,000 against D-2, she may NOT aggregate those claims. Note, however, that there is no aggregation problem if plaintiff asserts a joint claim against multiple defendants. With a joint claim, courts look to the total value of the claim. c) Several Plaintiffs Against One Defendant Several plaintiffs can aggregate their claims only where they are seeking "to enforce a single title or fight in which they have a common or undivided interest . . . " a. This rule has special importance in class actions, in which the rule is that the claims of the class members cannot be aggregated if their rights are "separate" rather than "joint" or "common." [Snyder v. Harris, 394 U.S. 332 (1969)] b. However, plaintiffs joined together under Rule 20 or through a class action under Rule 23 have not been permitted to aggregate their claims against a single defendant. There is a circuit split as to whether 28 USC 1367 changes the rule against aggregation among plaintiffs. c. Exxon Mobile Corp. (pg. 778): Interpreting 1367, supplemental jurisdiction permits diversity jurisdiction when some Ps, suing single D, dont satisfy amount in controversy, if: i. at least one P does meet it, ii. complete diversity exists among parties, and iii. all claims are part of the same case / controversy d) Counterclaims A defendant's counterclaim [see Fed. R. Civ. P. 13] CANNOT be combined with the plaintiff's claim to reach the jurisdictional amount; e.g., if the plaintiff claims $20,000, there is no jurisdictional amount even though the defendant counterclaims for $100,000. a) Compulsory Counterclaim Need Not Meet Jurisdictional Amount A compulsory counterclaim (arising out of the same transaction or occurrence) does not need to meet the jurisdictional amount requirement. The court has ancillary (supplemental) jurisdiction over such a counterclaim just as it does over a thirdparty claim under Rule 14impleader. b) Permissive Counterclaim Must Meet Jurisdictional Amount A defendant's permissive counterclaim (arising out of an unrelated transaction) must have an independent jurisdictional basis, and thus must meet the jurisdictional amount requirement.

71 Exceptions to Diversity of Citizenship Jurisdiction For historical reasons, even though the requirements for diversity of citizenship jurisdiction are satisfied, federal courts will not exercise jurisdiction over domestic relations or probate proceedings. 1) Domestic Relations The federal court will not take jurisdiction over actions "involving the issuance of a divorce, alimony or child custody decree." [Akenbrandt v. Richards, 504 U.S. 689 (1992)] Note that this exception is quite narrow. Federal courts may maintain actions upon state court decrees, such as those for alimony. They also may hear cases involving intra-family torts. They refuse only cases involving issuance of decrees of divorce, alimony, or child custody. 2) Probate Proceedings Federal courts will not entertain cases to probate a decedent's estate. To fall within this exception to diversity of citizenship jurisdiction, however, the claim asserted must involve actual probate or annulment of a will or seek to reach property in the custody of a state probate court. [Marshall v. Marshall, 547 U.S. 293 (2006)] Multiparty, Multiforum Trial Jurisdiction Act 28 U.S.C. 1369 The Multiparty, Multiforum Trial Jurisdiction Act applies to accidents meeting the statutory definition. The principal points are these: 1. Requirements a. The Action The Act grants jurisdiction to federal district courts of civil actions that (i) arise "from a single accident, (ii) where at least 75 natural persons have died in the accident (iii) at a discrete location." [28 U.S.c. 1369(a)] b. Minimal Diversity Such jurisdiction attaches based on minimal diversity of citizenship; thus, all that is required is that at least one plaintiff be of diverse citizenship from at least one defendant. c. One Additional Condition In addition, however, one of three other conditions must be satisfied: either (i) a defendant "resides" in a different state from the place where "a substantial part" of the accident took place (even if the defendant also resides where the accident took place); (ii) any two defendants "reside" in different states; OR (iii) substantial parts of the accident took place in different states. 2. Limitations: Court shall abstain from hearing action when: a. Substantial majority of Ps are citizens of same state of which primary Ds are also citizens; and (i) Note: Court in Passa v. Derderian looks at all potential Ps, not just named Ps bcmust look at possible exposure (pg. 779) 1. Facts a. A fire in The Station (D), a Rhode Island nightclub, killed more than 100 people, and injured more than 200. 2. Holding

72 a. Rhode Island residents make up less than 50 percent of the total number of potential plaintiffs, and therefore fail to constitute a simple majority. b. That fact, combined with the fact that the primary defendants are also not all from a single state, allows the conclusion that abstention under 1369(b)is not required. b. Claims asserted will be governed primarily by laws of that state 3. Intervention Anyone "with a claim arising from the accident" is permitted to intervene as a plaintiff, even if she could not have maintained an action in the district where the case is pending. [28 U.S.c. 1369(d)] 4. Service of Process Finally, the Act provides for nationwide service of process. [28 U.S.c. 1697] Class Action Fairness Act 28 U.S.C. 1332(d) Protects Ds from abusive class action suits by expanding federal jurisdiction over class actions to prevent forum shopping. Aggregated amount in controversy MUST BE $5 million or more. 1. Local Controversy Exception: Court shall decline jurisdiction when: a. Greater than 2/3 of all proposed Ps are citizens of state where action was originally filed; and b. At least one D is a D: i. From whom significant relief is sought by P class; ii. Whose alleged conduct forms a significant basis for the claims asserted by the proposed P class; and iii. Who is a citizen of same state as Ps and where action was originally filed; and c. Principle injuries resulting from any Ds conduct were incurred in the state in which action was originally filed; and d. No other class action has been filed for sale or similar facts against any of the Ds in the last three years 2. Home State Exception: Court shall decline jurisdiction when 2/3 or more of members of all proposed Ps and all primary Ds are citizens of state where action was originally filed 3. Discretionary Exception: Court may in the interests of justice and looking at the totality of circumstances, decline to exercise jurisdiction when less than 2/3 but greater than 1/3 of Ps and primary Ds are citizens of state where action was originally filed. Court must consider: a. Whether claims asserted involve matters of national or interstate interest; b. Whether claims asserted will be governed by laws of the State where action originally filed or by laws of other states c. Whether class action has been pleaded in manner that seeks to avoid federal jur d. Whether action was brought in forum with distinct nexus with class members, alleged harm, or the Ds e. Whether Ps are mostly from forum state, and citizenship of other Ps is dispersed among substantial number of states; and f. Whether in the last three years a similar class action has been filed

73 Court uses discretionary exception to remand to state court in Preston v. Tenet Healthsystems (5th Cir. 2007) (pg. 784) (injured hospitalized patients during Hurricane Katrina). Compared to Weems (5th Cir. 2007) (pg. 790), where court denied remand and kept in federal court on similar facts, but claim filed one year after hurricane. o Facts When Hurricane Katrina devastated New Orleans, Louisiana, Preston (P) brought suit for negligence and intentional misconduct by the Tenet Healthsystem Memorial Medical Center (Memorial Medical Center) (D), because of the way patients were treated. o Reasoning Discretionary jurisdiction Establishing the domicile of more than one hundred plaintiffs must be based on practicality and reasonableness. Affidavits from eight class members-including six named plaintiffs-stated that they intended to return to LA when they could, and the court said that that, plus the residency information taken from the emergency contact data of the deceased patients, gave the lower court a reasonable indication as to the citizenship of the unaccounted-for persons. While eight affidavits may constitute a small number of statements outside the unique facts of this case, given the hurricane's widespread devastation, the affidavits support the court's conclusion about the probable citizenship of the proposed class of hospitalized patients (P). CAFA designed to exclude only a narrow category of truly localized controversies In addition, the interest of justice is served by remanding the case for other reasons. The case does not affect national interest, as contemplated under the statute, even though the nation is interested in the topic The claims are governed by Louisiana law; and There is a distinct nexus between the state court and the class members, the harm, and the defendants. No similar class actions were filed three years prior to this suit o Significance Because the MMTJA focuses on a single accident at a discrete location, it does not apply to cases that may involve one defendant, but do not arise in one specific location Remember that even though the two statutes target case consolidation, they are designed to address different problems: MMTJA to correct inefficiencies that arise from duplicative litigation stemming from a single mass tort CAFA to allow the consolidation of cases against corporate defendants. o When deciding which might apply to a jurisdictional question, be sure to consider the act pattern and the statutory intent o Weems failure of evidence to establish citizenship party that is seeking remand has burden of proof

Erie Doctrine and the Law Applied Under Diversity Jurisdiction A federal court, in the exercise of its diversity jurisdiction, is required to apply the substantive law of the state in which it is sitting, including that state's conflict of law rules. [Erie Railroad v.

74 Tompkins, 304 U.S. 64 (1938); Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487 (1941)] However, the federal courts apply federal procedural law in diversity cases. Rules of Decision Act: The Rules of Decision Act, 28 U.S.C. 1652, as interpreted by Erie provides that federal law always takes precedence, where relevant, over all state provisions. However, where there is no United States Constitution provision, other federal law, or treaty on point, federal courts must apply state law. Federal Question Cases: Thus, cases tried in federal court based on a federal question are decided by federal law. Diversity Cases: Because the claim does not arise under federal law (if it did, it would be a federal question case), courts will usually need to apply state law to the substantive issues of the case. However, the distinction between procedural and substantive issues can sometimes be unclear. Rules of Decision Act: 28 U.S.C. 1652 State laws as rules of decision The laws* of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply. Swift v. Tyson (US 1842), interpreted the Rules of Decision Act to require federal courts to apply state constitutional and statutory law but not state common law. The Swift doctrine permitted federal judges to displace state common law with federal general common law in diversity cases. Overturned by Erie. In Story's view, the federal court should examine all the common law authorities-including cases from the state in which it sat, from other states from federal courts, English courts, and the views of respected commentators - to ascertain the proper rule. The federal judge's job, Story believed, was the same as that of any other common law judge: to choose the right rule of consideration, rather than to follow a rule that some other judge deemed to be the right one. Swiftv. Tyson rests on the philosophic premise that a court - specifically a state court-does not make the law but merely finds or declares the law and so its decisions simply constitute evidence of what the law is, which another court is free to reject in favor of better evidence to be found elsewhere. Substance versus Procedure: Erie Railroad Co. v. Tompkins (US 1938)(Justice Brandeis): Erie overturned the idea set forth in Swift that state common law, or judge-made law, did not count for the purposes of RDA. Erie established that in federal diversity cases, matters characterized as substantive would be governed by state law (including common law), and those characterized as procedural would be governed by federal law. Facts: The facts of the case were simple: Tompkins lost an arm when hit by a projection from an Erie Railroad train while walking on a pathway along the tracks. His injury was quite likely the result of negligence; however there was no evidence that the railroad's employees had acted willfully or wantonly in creating the danger, which was the standard for recovery under Pennsylvania law. Procedural history: The federal district court, relying on Swift, concluded that it was not bound by the Pennsylvania decision and instead followed federal decisions, which held that railroads owed a duty of due care to users of lateral pathways along the track. Tompkins recovered in federal district court, though he would have lost if the case had been brought in state court. Holding: In diversity cases federal courts must apply the law that would be applied by the courts of the state in which they sit. They are not free to decide for themselves the "right" rule of consideration, the duty that a railroad owes to a trespasser, or the enforceability of exclusive contracts. Rather than create "general common law," their job in a diversity case is to apply state common law. In those

75 broad areas where the law is largely judge-made, such as contracts, torts, probate, and property, state law reigns supreme because "there can be no other law," Hanna v. Plumer, 380 U.S. 460, 472 (1965). Rationale: Diversity jurisdiction was created to minimize home-field advantage by allowing a case to be settled in a presumably more neutral federal court. The Swift rule however, had given out-of-staters a distinct advantage by having the choice of suing in either state or federal court, and being able to make the decision based on which set of laws would be most favorable to him. o The Swift rule created potential for manipulation of the sort upheld in Black& White Taxicab Co. v. Brown& YellowTaxicabCo., 27 6 U.S. 518 (1928). In that case, the Brown & Yellow Taxicab Company sought to enforce a contract with the railroad, providing it the exclusive right to pick up and discharge passengers at a train station in Kentucky. Aware that the Kentucky state courts did not enforce such contracts, Brown & Yellow reincorporated in Tennessee, thus creating diversity between it and the defendant, Black & White. It then brought suit in federal court - in Kentucky, no less- to enjoin Black & White from interfering with its contract. The Kentucky federal court held, as other federal cases had, that the true rule was that the monopoly contract was enforceable, and enjoined the defendant from interfering with it. Haziness of the Test (Justice Reeds Concurrence): The line between procedural and substantive law is hazy but no one doubt federal power over procedure. **Erie overruled Swift and identified two major themes for doing so: 1. Constitutional theme: comes from the Tenth Amendmentthat state law must govern on matters of general common law 2. Litigant equality: similarly situated persons should be treated alikethat the governing law should not differ upon whether the case is in federal or state courts (POLICY!) 1) Is There a Federal Directive on Point? To determine whether federal law should be applied, the first question to ask is whether there is a federal law (e.g., statute, Federal Rule of Civil Procedure) on point. If there is, the federal law will apply, provided that it is valid. US Constitution vs. State Law: The Constitution is the Supreme Law of the Land pursuant to Article IV Section 2. Its provisions apply whether conflicting with state law on substance or procedure. Federal Statute vs. State Law: Federal statutes are also the Supreme Law of the Land, if they are valid and on point. If there is a conflict with state law, Federal statutes apply, unless congress didnt have the authority to enact the federal statute. Direct conflict analysis is less important here but still done. Hannas Arguably Procedural Test: Hanna holds that congress has the constitutional authority to enact statutes governing procedure in federal courts if, while falling in the uncertain area between substance and procedure, [they] are rationally capable of classification as either. Example:

76 Federal Rule 4 permits substituted service of process. Suppose that state law (of the state in which the federal court sits) does not permit substituted service. The court will apply the Federal Rule, because it is on point and is valid. a. Caution Sometimes it is difficult to determine whether a federal directive is on point. For example, Federal Rule 3 provides that a case is commenced when the complaint is filed. Many people thought that the rule thus was a directive that the statute of limitations would be tolled from the date of filing the complaint. The Supreme Court held, however, that Rule 3 did not address tolling at all, and thus did not constitute a federal directive on the tolling question. [Walker v. Armco Steel, 446 U.S. 740 (1980)] b. Recent Application In Shady Grove Orthopedic Associates v. Allstate Insurance Co., 130 S. Ct. 1431 (2010), a plaintiff brought a diversity jurisdiction class action under a New York law for recovery of interest on claims paid late by insurance companies i. A New York statute would have denied class action status to claims seeking such recovery. ii. A majority of the Court held that Federal Rule 23 governed regarding class action status and refused to apply the New York statute. c. Under the Rules Enabling Act, a Federal Rule is valid if it deals with "practice or procedure" and does not "abridge, enlarge, or modify" a substantive right. A majority in Shady Grove concluded that Rule 23 is valid. Only four Justices concluded, however, that in determining a Rule's validity, the court looks only at the Federal Rule, and not to the state law to be displaced by it. 2) If There Is No Federal Directive on Point, Is the Issue Substance or Procedure? If there is no federal directive on point, can a federal judge refuse to follow state law on a particular issue? The answer depends on whether the law on that issue is substantive or procedural. If it is a matter of substance, the federal judge must follow state law in a diversity case. If it is a matter of procedure, the federal judge may ignore state law. Substance vs. Procedure: The line between procedural and substantive law is hazy but no one doubt federal power over procedure, (Judge Reed). If a matter is procedural, federal law controls, but as Judge Reed said, determining the line between substance and procedure can be difficult. When discussing conflict, try to support with case law and/or articles Example: Scott v. Harris for federal practice in Summary judgment a. Some Situations Are Clearly Established In some instances, the characterization as substance or procedure is well established. i. For example, the Supreme Court has established that statutes of limitations and rules for tolling statutes of limitations are substantive for Erie purposes; therefore, a federal judge in a diversity case must follow state law on those issues. [Guaranty Trust Co. v. York, 326 U.S. 99 (1945)] ii. Choice of law rules are also substantive for Erie purposes, and a federal judge in a diversity case must follow state law on that issue as well. [Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487 (1941)]

77 iii. Finally, of course, elements of a claim or defense are substantive. b. Law Is Unclear in Other Situations Outside these areas, when there is no federal directive on point, it is often difficult to determine whether an issue is substantive or procedural for Erie purposes. The Supreme Court has given different "tests" at different times on this point, and has failed to integrate the tests comprehensively. i. One such test is outcome determination, which holds that an issue is substantive if it substantially affects the outcome of the case. [Guaranty Trust Co. v. York, supra] Outcome Determination Test (Bad Law): Guaranty Trust v. York (US 1945)(Justice Frankfurter): The Intent of Erie and the Outcome Determination Test The intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court. o If the Choice is Outcome Determinative State Law Controls: As to consequences that so intimately affect recovery or non-recovery, a federal court in a diversity case should follow State law. If following a federal practice that differed from state procedure might "significantly affect the result of a litigation" (id.). the court must apply the state rule instead, to prevent diverse parties from gaining unfair advantages simply because they can choose federal court. In York, this "outcome-determinative" test dictated use of the state limitations statute, since the claim was barred under that statute but might have been allowed to proceed under the federal laches doctrine. o Consequences: Pure outcome determination required Fed. Cts. to apply state law as a matter of policy rather than by Constitutional compulsion. Even where federal law could be applied, York said it shouldnt be, to further a policy of uniform outcome in state and federal cases. ii. Another test is balance of interests, in which the court weighs whether the state or federal judicial system has the greater interest in having its rule applied. [Byrd v. Blue Ridge Electric Cooperative, Inc., 356 U.S. 525 (1958)] o Balancing of Governmental Interests Test: Movement Away From Pure Outcome Analysis Countervailing Considerations: In Byrd, the court recognized that the policy of uniform outcome is not the only consideration. There are countervailing federal policies that arise because the federal system is an independent judicial system. Brennan concluded specifically that the function of the jury is an essential factor provided for in the Constitution. Balancing Test: Weighing the states interest in the rule and the federal interest in the rule. In deciding whether to follow state law in matters of "form and mode" (that is, the area in which the court follows state law as a matter of policy rather than

78 constitutional command), the federal court must consider not only the York policy of uniform outcomes in diversity cases, but also any countervailing federal policies that arise from the federal court's status as an independent judicial system. In Byrd, the constitutional right to jury trial under the Seventh Amendment to the Constitution was at least tangentially implicated in making the choice between judge and jury. Given the importance of that right in the administration of federal courts, Justice Brennan concluded that the Erie policy of maximizing uniformity of outcome should yield to the federal policy of broad availability of jury trial

iii. Yet another test is forum shopping deterrence, which directs that the federal judge should follow state law on the issue if failing to do so would cause litigants to flock to federal court. [Hanna v. Plumer, supra] Federal Judicial Practice vs. State Law: Hanna v. Plumer (1965)(Chief Justice Warren) P made service in compliance with FRCP but not state rules. D argued that b/c the case would be dismissed under the state rule, but not under the Fed. rule, it was outcome determinative and therefore the state rule must be applied. The court disagreed with this mechanical litmus test, and said if taken too literally, every rule is outcome determinative. o Hanna Holding: In Hanna, the service of process discrepancy at issue was determined not to be a reason for forum shopping ex ante, nor was it deemed sufficient for the inequitable administration of law. Therefore, the modified outcome determination test did not require the federal court to substitute the state rule for its own.

Do both parts of the analysis equally on a law school exam; however, in the real-world one may be more important than the other in a given situation

o Hanna (Part I): Relatively Unguided Erie Choice: When there is conflict between a federal judicial practice and state law, it should be addressed under a modified outcomedeterminative test: Would the difference be outcome-determinative, keeping in mind the twin aims of Erie: 1) discouraging forum shopping ex ante and 2) avoiding the inequitable administration of the laws. Is it bound up?: Byrd v. Blue Ridge Rural Electric Cooperative, Inc. (1958)(Justice Brennan) Is the state rule bound up with (so essential to) the substantive rights and obligations of the parties? Or is it merely a form and mode of enforcing the conduct of litigation itself? Either way, why? Also, are there countervailing policies (federal interests) that favor applying the fed. policy? Is the federal practice essential? Why? Examples: Federal interest of having its policy followed has been found to be strong where 1) the question is who decides a certain factual issue, judge or jury? and 2) where federal policy requires a unanimous jury verdict, but not 3) in the case of statute of limitations, where the state statute was followed Rationale: 1) Federal interest in judge-jury allocation was strong, and state policy is not bound up in the rights of the parties (Byrd). 2) State policy of lessthan-unanimous jury verdict is more about the form and mode of litigation, and the federal interest in applying fed. practice is strong. 3) States interest is heavily outcome determinative and is bound up with right of parties, while fed. interest is weak, little to be gained from district-to-district uniformity (York) Not a Talisman: Brennan in Byrd >> Every procedural variation is in some way outcome-determinative Outcome determination analysis was never intended to serve as a talisman.

79 Federal Rule of Civil Procedure vs. State Law: FRCP applies if it is valid. Congress has the constitutional power to authorize the Supreme Court to adopt a Federal Rule if it is rationally capable of classification as a procedural regulation. Easy bar to meet, so Federal Rules are valid, unless they abridge, enlarge, or modify a substantive right under the second subsection of the Rules Enabling Act. Hanna v. Plumer (1965)(Chief Justice Warren) o Hanna (Part II): Is the rule a valid use of the Rules Enabling Act (i.e. does it abridge, enlarge or modify any substantive right in this situation? In Burlington Northern Railway v. Woods (1987), the Supreme Court determined that rules which incidentally affect litigants substantive rights do not violate the Rules Enabling Act if reasonably necessary to maintain the integrity of that system of rules. First question >> is it a substantive right? Is it consistent with due process? (almost always yes) If a Federal Rule of Civil Procedure conflicts with state law, the Federal Rule applies if it is valid. Congress has the constitutional power to authorize the Supreme Court to adopt the FRCP, if the Rule is "rationally capable of classification" as a procedural o Limitation: In Walker v. Armco Steel Corp. (1980)(Justice Marshall), FRCP 3 states that the filing of the complaint is the commencement of litigation, but says nothing about the tolling of a statute of limitations. The court found this was beyond the scope of the rule and therefore there was no direct clash. o Direct Clash: Courts are reluctant to find a direct clash, but discuss how and why there is/could be one anyway. The Court limited Hannas analysis to circumstances when there is a direct conflict between a Federal Rule of Civil Procedure and state rule. If there is not a direct clash, the Hanna (Part I) analysis is used. The threshold question is whether the scope of the federal rule is sufficiently broad to directly conflict with the state rule. Sometimes, they can coexist. See also Gasperini v. Center for Humanities, Inc. (1996)(Justice Ginsburg): Found no conflict between FRCP 59 which gives a discretionary standard for granting new trials and the state statute which gave specific standard for reviewing damage awards. Ultimately, the Court finds that the principal state and federal interests can be accommodated. When is there a direct clash?: Where there are contradictory procedures, where federal law provides a discretionary standard and state law requires a particular outcome, and where the federal law was obviously meant to control and/or applying the state law would impair it, among others.

o When does a FRCP abridge, enlarge or modify?: Rarely, if ever; there is a heavy presumption of validity. In Burlington, the court concluded there was only an effect on enforcing litigants rights and not the rights themselves, and this was sufficient. If a rule is arguably procedural it will not abridge, enlarge, etc. No rule has yet been held to violate this test. 3. Statutes Involving Both Substance and Procedure Sometimes, a state statute or rule may be both substantive and procedural. In one case, the state tort reform law relaxed the standard for granting a new trial, making it easier to grant a new trial than under

80 the basic federal standard. Also, the state appellate court was charged with the responsibility to consider whether a new trial should be ordered. In a diversity case under this state law, the standard for granting a new trial was held to be substantive, so the federal court had to apply the state standard for granting a new trial. However, the requirement that the appellate court consider whether a new trial should be ordered was held to be procedural, so a federal trial court would determine whether a new trial should be ordered, using the aforementioned state standard, rather than an appellate court. [Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (l996)-in diversity case, federal trial court applied New York "excessive damages" standard for new trial rather than federal "shock the conscience" standard] 4. Interpreting State Law The federal court is bound to apply the substantive state law that would be applied by the highest court of the state. If the state courts have not decided the issue that is before the federal court, or if the decisions on point are old and no longer current with the decisions of other jurisdictions, the federal court may consider the law of other jurisdictions in reaching its decision. However, the focus of the federal court is to determine what decision the highest court of the state would reach if confronted with the issue. a. De Novo Review of District Court's Decision On appeal, the federal appellate court reviews the federal trial judge's decision as to state law de novo. [See Salve Regina College v. Russell, 499 U.S. 225 (1991)] b. Subsequent State Court Decisions If the highest state court renders a decision on an issue after the federal court has made its determination, the decision of the district court may be changed to conform to the new decision of the highest state court until the disposition of the final federal appeal. [See Thomas v. American Home Products, Inc., 519 U.S. 913 (1996)] Determining What the State Law is: Even where there is no question that state law should be applied, sometimes it can be difficult to figure out what the law or rule of the state is, if there is not clear statute and no State Supreme Court holding on point. The question usually boils down to what would the states highest court decide if the issue were before it today? The judge is not free to make up state law, but he is entitled to make an educated judgment on what rule the state supreme court would apply to the case today, rather than merely parroting what the rule was when the last case on point was decided. The federal court can take several factors into account in making an educated guess: o Lower State Court Decisions: If the states highest court has not considered the issue, but lower courts in that state have, the federal court can simply follow the lower courts decision unless there is reason to believe the highest court would not agree with them. o Other Sources: The court can also look to other federal courts who have attempted to predict the law of the same state, practices of other states, and other authorities such as Restatements and trends in that states legislation. o Highest Courts Decision Obsolete: If the states highest court has decided on the issue, but that decision is outdated and seems to have become obsolete, the federal court is free to conclude that the states highest court would rule differently in the present case and apply a new rule. Rules Governing General Conflict of Laws: Rules governing conflict of laws must come from the state. This is different from a conflict between state and federal laws or rules.

81 o Example: Ps are injured in foreign country X, and sue D in state A. State A allows strict liability whereas country X does not. State As conflict of laws rules must be applied. State A courts would apply these rules to a conflict of laws, and so must the federal court. Burden of Proof: Federal courts must also apply the rules governing the allocation of the burden of proof in the state where the Fed. Ct. is sitting. Certification: The federal court may have an additional option in determining state law. Some states have "certification" procedures, which allow a federal court faced with a thorny state law issue to certify the issue to the state supreme court. When the federal judge certifies the issue, a statement of the issue and the relevant facts is sent to the state court. The case then goes into the regular appellate pipeline: The parties brief and argue the issue before the state court as though it were a regular appeal from a lower state court. Ultimately, the state supreme court issues an opinion, much like that on any other appeal, resolving the issue. Then, armed with the answer to their question, the parties return to the federal court and pick up the litigation there.

Cases Erie Railroad Co. v. Tompkins (SCOTUS 1938) Issue Was the trial court in error in refusing to recognize state case law as the proper rule of decision in deciding the substantive issue of liability? o Should Swift v. Tyson be overturned? Facts Tompkins (P) was walking on a well-worn path parallel to some railroad tracks when an Erie Railroad (D) train came by. o Tompkins (P) was struck and injured by what he would, at trial claim to be an open door extending from one of the railcars. Under Pennsylvania case law(the applicable law since the accident occurred there), state courts would have treated Tompkins (P) as a trespasser in denying him recovery for other tha nwanton or willful misconduct on Erie's (D) part. o Under "general" law, recognized in federal courts, Tompkins (P) would have been regarded as a licensee and would only have been obligated to show ordinary negligence. Procedural history Because Erie (D) was a New York corporation, Tompkins (P) brought suit in a federal district court in New York, where he won a judgment for $30,000. Upon appeal to a federal circuit court, the decision was affirmed. o Because the question was of general law, federal courts are free in the absence of a local statute to exercise their independent judgment Holding Yes, reversed and remanded Reasoning The Court's opinion is in four parts: o (1) Swift v. Tyson,41 U.S. (16 Pet.) 1 (1842), which held that federal courts exercising jurisdiction on the ground of diversity of citizenship need not, in matters of general

82 jurisprudence, apply the unwritten law of the state as declared by its highest court, is overruled. Section 34 of the Federal Judiciary Act of 1789, c. 20, 28 U.S.C. 725, requires that federal courts, in all matters except those where some federal law is controlling, apply as their rules of decision the law of the state, unwritten as well as written. Up to this time, federal courts had assumed the power to make "general law" decisions even though Congress was powerless to enact "general law" statutes. However, scholarship has revealed that the statute WAS intended to force federal courts to apply state statutory AND common law in diversity cases o (2)Swift had numerous political and social defects. The hoped-for uniformity among state courts had not occurred; there was no satisfactory way to distinguish between local and general law. On the other hand, Swift introduced grave discrimination by noncitizens against citizens mischievous results (e.g. Black and White Taxicab) The privilege of selecting the court for resolving disputes rested with the noncitizen who could pick the more favorable forum denial of equal protection The resulting far-reaching discrimination was due to the broad province accorded "general law" in which many matters of seemingly local concern were included. Furthermore, local citizens could move out of the state and bring suit in a federal court if they were disposed to do so; corporations, similarly, could simply reincorporate in another state. More than statutory relief is involved here; the unconstitutionality of Swift is clear. o (3) Except in matters governed by the federal Constitution or by acts of Congress, the law to be applied in any case is the law of the state. There is no federal common law The federal courts have no power derived from the Constitution or by Congress to declare substantive rules of common law applicable in a state whether they be "local" or "general" in nature. Swift rule is an unconstitutional assumption by courts of the United States of discretion properly left to the states o (4) The federal district court was bound to follow the Pennsylvania case law. Significance Erie can fairly be characterized as the most sweeping decision on civil procedure ever handed down by the U.S. Supreme Court. o As interpreted in subsequent decisions, Erie held that while federal courts may apply their own rules of procedure, issues of substantive law must be decided in accord with the applicable state law-usually the state in which the federal court sits. o Note, however, how later Supreme Court decisions have made inroads into the broad doctrine enunciated here Under Swift, a court could reach two entirely different results depending upon which law was used Choice of law courts must identify the state with the most significant relationship to the issue in question and apply its laws Klaxon Co. v. Stentor Eletric Mfg. Co. federal court must apply the same state law that a state court would Rule of Law

83 Although the 1789 Rules of Decision Act left federal courts unfettered to apply their own rules of procedure in common law actions brought in federal court, state law governs substantive issues. State law includes not only statutory law but case law as well. Concurrence Agree with result, but believes that analysis should be limited to statutory interpretation rather than unconstitutional application of the rule

Guaranty Trust Co. (D) v. York (P) (SCOTUS 1945) Issue Where a suit brought in federal court on diversity jurisdiction would be barred by statute if brought in the state court, may the federal court nonetheless hear the case on its merits? Facts York (P) brought suit in federal district court in New York on behalf of a class of persons allegedly damaged by Guaranty Trust Co.'s (D) breach of trust. o The suit was brought in 1942 but complained of transactions occurring in 1931. Procedural history Guaranty Trust (D) was granted a summary judgment on the grounds that the action was barred by the New York statute of limitations and that this suit being heard on diversity jurisdiction was governed by the statute. The court of appeals reversed, stating that suits in equity were not controlled by the state statute of limitations. Holding Yes, reversed and remanded Reasoning In all cases where a federal court is exercising diversity jurisdiction, the outcome of the case should be substantially the same so far as legal rules determine outcome, as it would be if tried in state court. Since this Court's decision in Erie R. Co. v. Tompkins, 304 U.S.64(1938), a considerable amount of divergence has developed over what matters are procedural and what are substantive. o Since these two concepts are fluid and situation controlled in most instances the debate misses the underlying rationale of Erie. o When sitting in diversity jurisdiction, a federal court is but another state court. The controlling factor is whether, by reason of application of differing federal rules, an outcome substantially different would result than if the case were brought in state court. The rules of law applied to the case cannot allow or bar recovery in the federal court where an opposite result would occur in the state court. o To make an exception on the equity side would be to reject Eries policy o Diversity jurisdiction affords nonresidents another tribunal, NOT another law o For that reason, the summary judgment granted by the trial court is sustained. Significance Guaranty Trust, which clarified Erie, may itself be in the process of being slowly eroded by modern courts. o Hanna v. Plumer, 380 U.S.460 (1965), held that where state law conflicts with the Federal Rules of Civil Procedure, the latter prevails regardless of the effect on outcome of the litigation. o And in Byrd II: Blue Ridge Rural Electric Cooperative, Inc., 356 U.S. 525 (1958), the Court suggested that some constitutional doctrines (there, the right to a jury trial in federal

84 court) are so important as to be controlling over state law -once again, the outcome notwithstanding. Rule of Law In all cases where a federal court is exercising diversity jurisdiction, the outcome of the case should be substantially the same, so far as legal rules determine outcome, as it would be if tried in state court.

Byrd v. Blue Ridge Rural Electric Cooperative, Inc. (SCOTUS 1958) Issue Do Erie doctrine considerations require that all state determinations of rights be upheld regardless of their intrusions into federal determinations? o Did the CCA err in directing judgment for D w/o giving P opportunity for further evidence> Yes, new trial to determine whether P was a state employee w/in the meaning of the worker comp statute Facts Byrd (P) was injured while connecting power lines as an employee of a subcontractor of Blue Ridge Rural Electric Cooperative, Inc. (Blue Ridge) (D). o He sued Blue Ridge (D) in federal court on a negligence theory. Because he was a citizen of North Carolina and Blue Ridge (D) was a South Carolina corporation, jurisdiction was grounded in diversity of citizenship. o At trial, Blue Ridge (D) offered an affirmative defense based on a South Carolina law that would limit Byrd (P) to workmen's compensation benefits by defining him as a statutory employee of Blue Ridge (D) as well as the subcontractor (thereby precluding any collateral negligence action). The trial court refused to allow the defense to be offered, but the U.S. Supreme Court reversed and remanded the case to the trial court for a new trial allowing the defense. o Under South Carolina law, however, the issue of immunity from negligence was to be tried by a judge. o P claimed that despite the Erie doctrine, South Carolina law cannot be allowed to preclude his right to a jury. Holding No, reversed and remanded for a jury trial Reasoning The Erie doctrine requires that federal courts in diversity cases must respect the definitions of rights and obligations created by state courts, but state laws cannot alter the essential characteristics and functions of the federal courts, and the jury function is such an essential function (provided for in the Seventh Amendment). o The South Carolina determination here that immunity is a question of law to be tried by a judge is merely a determination of the form and mode of enforcing immunity It does not involve any essential relationship or determination of right created by the state. Of course, the Erie doctrine will reach even such form and mode determinations where no affirmative countervailing considerations can be found. o Here, however, the Seventh Amendment makes the jury function an essential factor in the federal process protected by the Constitution. o On remand, the court must permit a jury trial. Significance This case points up a major retreat by the Court in its interpretation of the Erie doctrine.

85 o The Guaranty Trust case, 326 U.S.99 (1945), had stated that the Erie doctrine required that federal courts not tamper with state remedies for violations of statecreated rights. o In Byrd, the Court retreats, stating that questions of mere "form and mode" of remedy (i.e., trial by jury or judge) are not necessarily the province of the states where essential federal rights (i.e., Seventh Amendment) are involved. Note that the Court does not abandon the Guaranty Trust rationale, however (that the outcome of a case should not be affected by the choice of court in which it is filed). o The Court expresses doubt that the permitting of trial by jury here will make any difference in the final argument here, since the Court first states that trial by jury is an essential right, then states that it is really insignificant after all.

Yes

Apply Federal directive if it is valid (Supremacy clause) Pure substance/"Bound up"

Federal directive on point? Rules of Decision Act analysis

State Law applies

No

Outcome determinatove; "Twin Aims" of Erie "Form and Mode" Not outcome determinative

Apply State Law unless good reason not to do so Federal court may ignore state law (As in Byrd)

Hanna v. Plumer Issue Does the Erie doctrine classification of "substantive law questions" extend to embrace questions involving both substantive and procedural considerations merely be- cause such a question might have an effect on the de- termination of the substantive outcome of the case? Facts Hanna (P), a citizen of Ohio, filed a tort action in federal court in Massachusetts against Plumer (D), the executor of the estate of Louise Plumer Osgood, a Massachusetts citizen. o It was alleged that Mrs. Osgood caused injuries to Hanna (P) in an auto accident in South Carolina. Service on Plumer (D) was accomplished pursuant to Fed. R. Civ. P. 4(d)(I) by leaving copies of the summons with Plumer's (D) wife. o At trial, motion for summary judgment should have been accomplished pursuant to Massachusetts law (by the Erie doctrine), which requires service by hand to the party personally. o On appeal, Hanna (P) contended Rules of Civil Procedure apply to this case. o Plumer (D), however, contended that:

86 (I) a substantive law question under Erie is any question in which permitting application of federal law would alter the outcome of the case (the so-called "outcome determination" test); (2) the application of federal law here (i.e., 4[ d] [I] will necessarily affect the outcome of the case (from a necessary dismissal to litigation); and, so, therefore (3) Erie requires that the state substantive law requirement of service by hand be upheld along with the trial court's summary judgment.

Holding No, reversed Reasoning The Erie doctrine mandates that federal courts are to apply state substantive law and federal procedural law, but, where matters fall roughly between the two and are rationally capable of classification as either, the Constitution grants the federal court system the power to regulate their practice and pleading (procedure). It is well settled that the Enabling Act for the Federal Rules of Civil Procedure requires that a procedural effect of any rule on the outcome of a case be shown to actually "abridge, enlarge or modify" the substantive law in a case for the Erie doctrine to come into play. o Where, as here, the question only goes to procedural requirements (e.g., service of summons; a dismissal for improper service here would not alter the substantive right of Hanna (P) to serve Plumer (D) personally and refile or effect the substantive law of negligence in the case), Article II and the Necessary and Proper Clause provide that the Congress has a right to provide rules for the federal court system such as Fed. R. Civ. P. 4(d)(I) . "Outcome determination analysis was never intended to serve as a talisman" for the Erie doctrine. Significance This case points up a return to the basic rationales of Erie. F o First. the Court asserts that one important consideration in determining how a particular question should be classified (substantive or procedural) is the avoidance of "forum shopping" (the practice of choosing one forum, such as federal, in which to file in order to gain the advantages of that forum). which permits jurisdictions to infringe on the substantive law defining powers of each other. o Second, the Court seeks to avoid inequitable administration of the laws that would result from allowing jurisdictional considerations to determine ~substantive rights. Justice Warren, here, in rejecting the outcome determination" test asserts that any rule must be measured ultimately against the Federal Rules Enabling Act and the Constitution.

Supplemental Jurisdiction Over State Claims Claims asserted by parties other than the plaintiff can invoke supplemental jurisdiction in any case that arises from the same transaction or occurrence as the original claim, whether it got into federal court by diversity of citizenship or federal question jurisdiction. 28 USC 1367(a) Generally: If the district court has original jurisdiction, it shall have supplemental jurisdiction over all claims so related to the same case or controversy under Article III of the Constitution. Includes claims that involve joinder or intervention of additional parties.

87 1) Pendent Claims In some cases, the plaintiff will have both federal and state claims against the defendant. Although there may be no diversity, the federal court has discretion to exercise pendent jurisdiction over the claim based on state law if the two claims "derive from a common nucleus of operative fact" and are such that a plaintiff "would ordinarily be expected to try them all in one judicial proceeding." [United Mine Workers of America v. Gibbs, 383 u.S. 715 (1966)] Applies to Federal Question Cases: Court's jurisdiction to hear and determine closely-related state law claims (over which it would not otherwise have jurisdiction), because the claim arises from the same transaction or occurrence as a Federal claim that is properly before the court. Pendent jurisdiction has now been codified as simply supplemental jurisdiction. o Rationale: This approach is consistent with the Federal Rules of Civil Procedure, which encourages entertaining the broadest possible scope of action consistent with fairness to the parties through joinder of claims, parties, and remedies. o Applies to Third-Parties: If P has a federal question case against D1, he may bring in D2 (and D3 etc.) even if there is no federal question or diversity basis for doing so, if the claim meets the two step test below. Federal Courts Power to Hear the Whole of a Constitutional Case: The Court concludes that a federal court may hear the whole of a constitutional case. See United Mine Workers of America v. Gibbs (1966)(Justice Brennan): Gibbs brought suit in federal court premised on allegations of secondary boycotts under a federal law (the Labor Management Relations Act). Jurisdiction for the state law claim (conspiracy and unlawful boycott) was based upon the doctrine of pendent jurisdiction. o When there are both state and federal claims involved in the same set of facts and the claims are such that the plaintiff would ordinarily be expected to try them all in one judicial proceeding, the federal court has the power to hear both the state and the federal claims. The federal claims must have substance sufficient to confer subject matter jurisdiction on the court pendent jurisdiction. o MATTER OF DISCRETION FOR THE TRIAL COURT o If the state claims are more important than the federal claims, court can dismiss w/o prejudice P can re-file in state court o SOL judge w/equitable discretion could waive SOL

Step 1: 2 requirements: o Common Nucleus of Operative Fact: The state and federal claims must derive from a common nucleus of operative fact. o Substantiality: In addition, the federal claims must be substantial, or, in other words, more than a mere appendage to the body of the case. o Part of the same Constitutional Case?: The overall question, however, is whether these claims form part of the same constitutional case, because the logic of pendent jurisdiction is based upon the fact that Article 3(2) confers upon federal courts the authority to hear cases, not just claims or issues. Step 2:

88 Discretionary Power: Even if a federal court has the constitutional authority to hear the case, a further inquiry is required as to whether it should hear the case or, alternatively, dismiss the case without prejudice. Factors to take into consideration: o Will it cause confusion?: Varying substantive and procedural rules between federal and state courts may yield jury confusion. o Will a Fed. Ct. have to decide State Law?: Try to avoid having federal courts deciding important issues of state law. o Does State Law Claim Substantially Predominate?: If state law claim substantially predominates, may make more sense to leave the case to adjudication in a state court. Includes the comprehensiveness of the relief sought, the evidentiary requirements, and the scope of the issues. At any time: Note that the court can exercise this discretion to dismiss without prejudice at any moment. The issue of whether pendent jurisdiction has been properly assumed is one which remains open throughout the litigation. When the Federal Claim Fails: When the federal claim is dismissed before trial, the district court should generally relinquish jurisdiction over any pendent state law claims unless there is some independent basis for federal jurisdiction. See Maguire v. Marquette University (7th Cir. 1987). o The court may exercise pendent jurisdiction over the state claim even though the federal claim is dismissed on the merits. However, the state claim should probably also be dismissed (without prejudice) if the federal claim is dismissed before trial. o Indeed,the supplemental jurisdiction statute provides that the court may refuse supplemental jurisdiction if the federal claim is dismissed, if the state claims are complex or novel,if the state claims predominate substantially over federal claims. Note also that a federal court may not award relief against a state official based solely on a state law claim. [Pennhurst State School & Hospital v, Halderman, 465 U.S. 89 (1984)] Example: P, a citizen of Arkansas, asserts two claims against D, who is also a citizen of Arkansas, in federal court. Importantly, both claims arise from the same transaction or occurrence. Claim #1 is for violation of a federal statute, and thus invokes federal question jurisdiction. Claim #2 is based on state law, and thus does not invoke federal question jurisdiction (because it is based on state, not federal, law). Also, Claim #2 does not invoke diversity of citizen- ship (because P and D are citizens of the same state). Nonetheless, Claim #2 invokes supplemental jurisdiction because it arises from the same transaction or Occurrence as the claim that invoked federal question jurisdiction. In Moore v. New York Cotton Exchange,270 U.S. 593 (1926) the plaintiff sued the defendant under the federal antitrust laws, and the defendant asserted a compulsory counterclaim against the plaintiff under state law. The Court upheld jurisdiction over the state law counterclaim, even though the parties were not diverse and there was no other basis for independent federal jurisdiction over the counterclaim. The Court's discussion in Moore is terse but it did emphasize that the counterclaim (like all compulsory counterclaims) arose out of the same transaction as the main claim. Thus, the decision appears to turn, as did Gibbs, on the conclusion that the close connection between the original, jurisdictionally proper claim and the added claim made them part of a single "constitutional case."

89 2) Ancillary Jurisdiction Occasionally, a claim may be joined that could not, by itself, invoke federal question jurisdiction or diversity jurisdiction (because, for example, it is a state claim between parties who are citizens of the same state or because it does not involve the requisite amount in controversy). The court may nonetheless entertain such claims under the doctrine of ancillary jurisdiction, now codified under the rubric "supplemental" jurisdiction, if they arise from a common nucleus of operative fact as the claim that invoked federal subject matter jurisdiction. The common nucleus test is usually considered to mean that the claims must arise from the same transaction or occurrence, although there is some authority that it is even broader than that. Overview: Can federal courts exercise jurisdiction over non-diverse parties? Generally, ancillary jurisdiction involves the assertion of a claim by a party other than the plaintiff that is related to the claim made by the plaintiff (in contrast to pendent jurisdiction, which involves the assertion of nonfederal claims by the plaintiff). o Under the doctrine of ancillary jurisdiction, federal courts have been able to hear claims against third-party Ds brought in under an impleader even though the impleader defeated complete diversity also applies to counterclaims, cross-claims, and interventions Fosters judicial efficiency and avoids inconsistent results Owen Equipment and Erection Company v. Kroger (US1978)(Justice Stewart)(p.703) o Background: Kroger filed his claim against OPPD in district court in Nebraska. The basis for subject matter jurisdiction in this part of the case was on diversity jurisdiction under 28 USC 1332, with Kroger as a resident of Iowa and OPPD a Nebraska corporation. OPPD thereafter filed a third-party complaint to implead (under FRCP 14) Owen Equipment and Erection Co. FRCP 14 permits a plaintiff to assert a claim against a third-party defendant, but it does not say whether or not that claim requires an independent basis of federal jurisdiction. Kroger then amends her claim to bring a complaint against Owen. The Court then grants the motion for summary judgment against OPPD, removing them from the trial, and leaving just Kroger and Owen to go to trial. We find that Owen, as a corporate defendant, is effectively a citizen of Iowa, so there is no diversity of citizenship. As such, the problem here is not one of constitutional limitations, but rather statutory limitations under 28 USC 1332. o Congressional Mandate and Complete Diversity of Citizenship: The Court concludes that 28 USC 1332 has consistently been held to require complete diversity of citizenship. This indicates a congressional mandate that diversity jurisdiction is not to be available when any plaintiff is the citizen of the same state as any defendant. In this case, Kroger could not have originally brought suit in federal court naming Owen and ODDP as co-defendants. Yet the identical lawsuit resulted by amending her complain, thereby destroying complete diversity. However, the Kroger Court's discussion suggested that ancillary jurisdiction could be exercised over compulsory counterclaims, cross-claims, and third-party claims. The opinion implied, for example, that jurisdiction over OPPD's claim against Owen would be proper, even though it also abridges the complete diversity requirement. The court emphasized the difference between the claim of a defending party, brought in against its will, and a plaintiff, who presumably had the choice to sue all parties jointly in state court.

original party. The plaintiff. Kroger. then asserted a direct claim against Owen, as Rule 14( a) (I) allows. The configuration of the parties was as follows:
(proper diversity claim)

90

lrotl<r
(Iowa)

OPPD (Ncbraska)

(no

I'"".,.]
Owen ( Ncb,.."" and

Independent basis for subject matter jurisdiction)

Iowa)

The issue posed was whether the court had jurisdiction over Kroger's claim 3) Pendent Parties against Owen. Pendent parties jurisdiction is relevant in cases in which plaintiff sues more than one defendant, there is The KrogerCourt assumed that, underthe the constitutional analysis in federal jurisdiction over the claim against one defendant, and the claim against the second defendant does Gibbs,Kroger's claim against Owen was part of the same "constitutional not invoke federal question or diversity of citizenship jurisdiction. Under the supplemental jurisdiction statute, case" as the main claim against OPPD, since it arose out of the same the claim against the second defendant might invoke supplemental jurisdiction if it arises from the same accident. 437 U.S. at claim 371 against n.lO. However, the Court went on to consider nucleus of common fact as the the first defendant. whether the relevant jurisdictional statute, 28 U.S.c. 1332, indicated intent tojurisdiction grant federal courts ancillary jurisdiction over a congressional Overview: Pendent party involves an intersection between pendent jurisdiction and related claim asserted by plaintiff against a over nondiverse third-party ancillary jurisdiction, where thethe questions is of jurisdiction parties that are not named in any claim defendant. Court held extending ancillary jurisdiction to this claim that has anThe independent basisthat for federal jurisdiction. would be inconsistent with the long-standing interpretation of 1332, requiring Finley v. United States (US 1989)(Justice Scalia)(p.708): Finley brought an action against the US under complete diversity between the parties. Since Mrs. Kroger could the Federal Tort Claims Act. She amended her complaint to include claims against the City and San not have sued OPPD and Owen together originally, it would ignore the Diego Gas and Electric Company, for which noher independent basis forthing federal jurisdiction existed. The statutory limits on jurisdiction to allow to do the same indirectly majority distinguishes the present case from Gibbs, concluding it raises a question of pendent-party after Owen was brought in as a third-party defendant. jurisdiction, that is, jurisdiction over parties not named in any claim that is independently cognizable by However, the Kroger Court's discussion suggested that ancillary juristhe federal court. Efficiency and convenience of a consolidated action will sometimes have to diction could be exercised over compulsory counterclaims, cross-claims, foregone in state and federal courts. and third-party claims. The opinion implied, for example, that jurisdiction over OPPD's claim against Owen would be proper, even though it also Example: abridges the complete diversity requirement. The court emphasized the federal P asserts a federal question claim against D-l and joins a transactionally related state law (not difference between claim a defending party, against question) claim against D-2. P the and D-2 are of citizens of the same state.brought The claimin against D-2 its does not invoke will, and jurisdiction a plaintiff, who itpresumably to sue all parties federal question (because is based upon had state the law) choice and does not invoke diversity of citizenship jurisdiction (because P and D-2 are citizens of the same state). The claim against D-2 invokes supplemental jointly in state court. 437 U.S.at 375-377. jurisdiction, however, because it arises from the same transaction occurrence as the claim that invoked The third important background case, FinleyY. or UnitedStotes,involved federal questionparty jurisdiction and is asserted the plaintiff in a federal case .States pendent jurisdiction. The by plaintiff, Finley, sued question the United under the Federal Tort Claims Act (FTCA). Jurisdiction over this claim was proper under Article III, 2, because the United States was a party. It was also authorized by 28 U.S.c. 1346(b), which gives the federal district

315

statute, 42 U.S.c. 1983. She also asserted a state law claim based on the same incident, against Spokane County. The case looked like this:
(jurisdictionally proper under Aldinger (Washington) _____ 28 USc. 1331 and 1343) --;:-.,.---,--,-: federal claim Slett, __'>, Howard

91

(Washington )

(' C:1aillJ

(no

independent
basis (or subject matter jurisdiction) SpoIwl<

COuney (Washington)

Conversely, pendent parties jurisdiction can arise when multiple plaintiffs assert claims against one defendant. This was an attempt to exercise "pendent party" jurisdiction, that is, to add

a jurisdictionally insufficient claim against defendant to a ajurisdicExample: P-l asserts a federal question claim against D. Inone the same case, P-2 asserts state law claim against D. P-2 and D are citizens of the sameclaim state. The claim by Howard P-2 invokes was supplemental tionally proper claim against the other. The against jurisdiction if it arises from the same transaction or occurrence as the federal question claim by P-l against D. proper, since Aldinger asserted a right to relief under 1983, a federal statute. However, the against the county jurisdiction was based onused state law and,to support a Note: Remember that, in claim a diversity case, supplemental can be by a plaintiff claim that fails to meet the amount in controversy requirement 5. for The diversity of citizenship jurisdiction, but thus, not jurisdictionally proper in itself. Aldingerat Court concluded that supplemental jurisdiction cannot be used to override the complete diversity rule. that even though the claim could be viewed as part of a single constitutional case under the first part of Gibbs, allowing a state law claim against 4) Congressional Clarification: 28 USC 1367 the county would be inconsistent with the apparent intent of Congress ro 28federal U.S.C.A. 1367.rights Supplemental jurisdiction bar civil claims under 1983 against counties" Thus, there (a) Except as in subsection (b) or if court decline, the district courts shall have supplemental jurisdiction over was no statutorygrant of jurisdiction over the pendent party claim. all other claims that are so related to claims in the action within such original jurisdiction that they form part second case, Kroger, involved anofinteresting twist on the Such established of The the same case or controversy under Article III the United States Constitution. supplemental jurisdiction shall include claims that involveIn the joinder tor additional parties. types of supplemental jurisdiction. Kroger, heintervention plaintiff of sued the Oklahoma Public Power District (OPPD), a diverse defendant, which then impleaded (b) In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of Owen, a the corporation. it turned out, jurisdiction was not diverse from either this title, district courts Owen, shall not have supplemental under subsection (a) over claims by
plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.
1. (c) At The the district time AJdingerwas were not considered "persons" subject suit courts may decided, decline tocounties exercise supplemental jurisdiction over a claim under to subsection (a) if-under t983. Pope, 365 or U.S. 167. issue 187-191 (1961). After Aldinger was decided, (1) theMonroev. claim raises a novel complex of State law, the claim substantially predominates over the claim or See claims overv. which the district court has ho,:ever, (2) the Supreme Court overruled this aspect of Monroe. Monell Departmmtof Social original Services, 436 U.S. jurisdiction, 658, 690-69t (1978). (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

92 (d) The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period. (e) As used in this section, the term "State" includes the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States. Overview: The statute effectively eliminates any distinction between pendent and ancillary jurisdiction.28 USC 1367 was drafted by Congress in response to the Supreme Courts decision in Finley (authorizing jurisdiction in a case like Finley). o Federal Question Cases: In federal-question cases, 28 USC 1367 broadly authorizes the district courts to exercise supplemental jurisdiction over additional claims, including claims involving the joinder of additional parties. House Report No. 101-734. o Diversity Cases: In diversity cases, the district courts may exercise supplemental jurisdiction, except where doing so would be inconsistent with the jurisdictional requirements of the diversity statute. House Report No. 101-734. Structure: General Rule: o 1367(a) provides that where a district court has original jurisdiction, it will have supplemental jurisdiction over all the claims that are so related to claims in the action that they form part of the same case or controversy under Article III Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. Inquiry: Would you expect these claims to be heard together? Significant Exception: o Critical Restrictions on the Limitation: This exception applies only to: Diversity cases. Plaintiffs. o 1367(b): any action founded solely on 28 USC 1332 (i.e. diversity jurisdiction), federal district courts will not have supplemental jurisdiction over claims by plaintiffs against persons made parties under Rule 14 (third-party practice), Rule 19 (compulsory joinder), Rule 20 (permissive joinder), or 24 (intervention) of the FRCP when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332. o Key Interpretive Point: In the statute, the reference to plaintiffs refers only to the original plaintiff, not third-party plaintiffs. Its a policy decision, based upon the consideration that the defendant did not choose to go to court, and should be allowed to resolve the dispute in one case. o Logic of the Exception: The exception of 1367(b) is designed to prevent plaintiffs from evading the jurisdiction requirements of 28 USC 1332 simply by naming initially only those defendants who satisfy the requirements and later adding claims against other defendants who have intervened or been joined on a supplemental basis. House Report No. 101-734.

93 o Discretion: 1367(c) highlights the factors that a federal court is to consider in exercising its discretion in hearing a claim under 1367(a). o Compulsory Counterclaim: res judicata may apply or not, Synthesis o First the court must determine whether there is constitutional 0owerunder Article III. 2. to hear the supplemental claim. This analysis has nothing to do with 1367: Congress cannot determine by statute what claims the Constitution authorizes a court to hear. This analysis stems from Gibbs, which held that the constitutional power to hear the related claim exists if there is a proper claim within the jurisdiction of the federal court and the related claim arises from the same nucleus of operative facts. This level of the analysis is no different now than it was before 13 67 was enacted. o Second, the court must determine whether there is a statutory grant of jurisdiction over the related claim. Now, that grant is provided in most cases by 1367 itself . Because 1367 (a) grants jurisdiction over all related claims that are part of the same "case," the answer to the statutory question is much simpler than it was under Kroger and Finley. As long as the federal court has a basis for original jurisdiction over the case, 1367(a) broadly grants statutory authority to hear related state law claims that meet the Gibbs constitutional test. However, under 1367(b), certain claims in diversity cases, which would contradict the limits on jurisdiction in 1332, are excepted. o Third, Congress has codified the second half of the Gibbs analysis in 1367(c). Once the court determines that it has constitutional and statutory authority to hear the related claims, it must decide, based on the various discretionary factors in that section, whether to do so.

Illustrative Cases: o Simple Case: What happens when we have a New York plaintiff bringing an action against New Jersey defendant. A New Jersey defendant can implead a New Jersey individual as a third-party defendant because it does not fall into the exception in 1367(b) (which is limited to claims by plaintiffs). So it falls under 1367(a). The New York plaintiff could then bring a claim against the New Jersey third-party defendant as a simple exercise of jurisdiction under Section 1332 jurisdiction. o Problem Case: New York plaintiff. New Jersey defendant. The NJ defendant impleads a New York third-party defendant. This impleader is valid, under 1332 or 1367. The New York plaintiff cannot amend his or her complaint to bring a claim against the New York third-party defendant because this falls within the exception of 1367(b). o Uncertain Case: New York plaintiff (P). New Jersey defendant (D). New York third-party defendant (X). First, the third-party defendant brings a claim against the original plaintiff, which is valid because the exception of 1367(b) only applies to claims by plaintiffs. But, once that is allowed, can the plaintiff counter-claim against the third-party defendant? There is a circuit split on this point, and it is yet to be resolved by the Supreme Court. Courts usually try to solve the problem by avoiding the waiver of the counter-claim (construing it not to be compulsory). Otherwise, P could have sued D in his home state so judge may say too bad, even if it was removed (couldnt have been removed if he had sued in Ds home state). What court couldnt do is simply hear the claim (b/c there is no SMJ). Ps Counter-claims would not be under supplemental jurisdiction. If P doesnt bring the counter claim whether b/c he forgot or

94 b/c the court lacked SMJ, it is waived. X would say its barred by res judicata (summary judgment motion but would look like a 12(b)(6) motion) if couldnt be construed to not be compulsory, b/c there was a final judgment on the merits of the same transaction/occurrence. \ 5) Subsequent Addition of Parties The Federal Rules permit numerous methods by which additional parties not originally named may become involved in an action. A claim by or against an additional party, like any claim in federal court, must satisfy some basis of federal subject matter jurisdiction, such as diversity of citizenship or federal question. If the claim does not satisfy either of those, andit arises from a common nucleus of operative fact (see above), the party asserting the claim might invoke supplemental jurisdiction. a) Restriction on the Use of Supplemental Jurisdiction in Diversity Cases For cases based solely on diversity, supplemental jurisdiction may NOT be used to support: a. Claims by plaintiffs against persons made parties under Rules 14 (impleader), 19 (compulsory joinder), 20 (permissive joinder), or 24 (intervention); b. Claims by persons proposed to be joined as plaintiffs under Rule 19; and c. Claims by persons seeking to intervene as plaintiffs under Rule 24. [28U.S.c. 1367(b)] b) Intervention of Right Intervention of right is given under Rule 24(a) where the intervenor claims an interest relating to the property or transaction that is the subject of the action and the disposition of the action may adversely affect that interest. Traditionally, intervention of right has not required any showing of independent jurisdiction; the intervenor's claim was considered to be within the court's ancillary jurisdiction if the requirements for inter- vention of right were met. Under the supplemental jurisdiction statute, however, there is no ancillary jurisdiction for claims by or against intervenors. Thus, such a c1airn could proceed only if there were an independent basis of jurisdiction, e.g., diversity or federal question. c) Permissive Intervention Under Rule 24(b), permissive intervention may be permitted in the court's discretion when the intervenor's action and the main action have a claim or defense involving a common question of law or fact. The claim by a permissive intervenor must invoke either diversity of citizenship or federal question jurisdiction. d) Substitution of Parties Substitution under Rule 25 involves changes in parties to a lawsuit necessitated by death, incompetency, etc., of an original party after an action has been commenced. The citizenship of the substituted party is disregarded; that of the original party controls. Substitution should be distinguished from an amendment that allows "replacement"of an original party by the party in whom or against whom the action properly lies. A "replacement" party must be diverse to the party or parties on the opposing side. e) Third-PartyPractice Impleader A third-party claim under Rule 14 is the joinder by the defendant in the original action (who is usually called the third-party plaintiff) of another person not originally a party to the action (who is called the third-party defendant). The impleader claim asserts that the third-party defendant is or may be liable to the defendant for all or part of the plain- tiff's claim against the defendant. In other words, an impleader claim is for indemnity or contribution.

95 a. Under Rule 14, after the third-party defendant is impleaded, he may assert a claim against the plaintiff in the pending case if the claim arises from the same transactionor occurrence as the underlying suit. In addition, under Rule 14, after the third-party defendant is impleaded, the plaintiff may assert a claim against him if it arises from the same transaction or occurrence as the underlying suit. i. Subject Matter Jurisdiction Required Of course, every claim asserted in federal court must have a basis of subject matter jurisdiction. Examples: 1) P, a citizen of Illinois, sues D, a citizen of Wisconsin, asserting a state law claim of more than $75,000. Thus, the case invokes diversity of citizenship jurisdiction and is properly brought in federal court. Now D impleads X, who is also a citizen of Illinois, on an indemnity claim of more than $75,000. That claim invokes diversity of citizenship jurisdiction, because it is asserted by a citizen of Wisconsin (D) against a citizen of Illinois (X) and exceeds $75,000. The fact that P is also a citizen of Illinois is irrelevant; the claim is not by or against her, so her citizenship does not affect the impleader claim. If P wanted to assert a claim against X in this situation, however, there would not be diversity because P and X are co-citizens of Illinois. In addition, the claim would not invoke supplemental jurisdiction, because in diversity of citizenship cases, the supplemental jurisdiction statute cannot be used to override the complete diversity rule (see III.D., infra). Thus, unless the claim by P against X invoked federal question jurisdiction, it could not be asserted in the pending case; it would have to be asserted in state court. 2) P, a citizen of Alabama, sues D, a citizen of Maine, assertinga state law claim of more than $75,000. Thus, the case invokes diversity of citizenship jurisdiction and is properly brought in federal court. Now D impleads X, who is also a citizen of Maine, on a state law contribution claim. The impleader claim does not invoke diversity of citizenship jurisdiction, because it is asserted by a citizen of Maine (D) against another citizen of Maine (X). It does not invoke federal question jurisdiction because it is based on state law. The claim invokes the ancillary form of supplemental jurisdiction, however, because it arises from the same nucleus of common fact as the underlying case and is asserted by the defendant, not the plaintiff, thus avoiding the restriction on the use of supplemental jurisdiction in 28 U.S.C. section 1367(b). f) Cross-Claims Rule 13(g) allows a party to assert a claim in a pending case against a co-party, but only if the claim arises from the same transaction or occurrence as the underlying dispute. So, in a lawsuit of A v. Band C, a claim by B against C (or C against B) that arises from the same transaction or occurrence as the underlying case would be a cross-claim. a. Subject Matter Jurisdiction Required Cross-claims, like all claims in federal court, must invoke subject matter jurisdiction. Therefore, after determining that a cross-claim would be filed, assess whether that claim could invoke diversity of citizenship or federal question jurisdiction.If so, the claim may be asserted in federal court. However, if a cross-claim does not invoke diversity of citizenship or federal

96 question jurisdiction, the cross-claim could nonetheless be asserted in federal court through the ancillary form of supplemental jurisdiction 6) Supplemental Jurisdiction over Claims Not Exceeding $75,000 in Diversity Cases Claims that do not meet the amount in controversy requirement for diversity of citizenship jurisdiction may invoke supplemental jurisdiction if they arise from a common nucleus of operative fact (which includes the concept of the "same transaction or occurrence") as a claim that invoked diversity of citizenship. However, the supplemental jurisdiction cannot be used to override the complete diversity rule. [Exxon Mobil Corp. v. Allapattah Services, 545 U.S. 546 (2005)] Challenging Subject-Matter Jurisdiction Cannot Collaterally Attack SMJ: Unlike personal jurisdiction and notice, the other two constitutional requirements for a valid and enforceable judgment, subject matter jurisdiction generally cannot be challenged by a collateral attack. 3 Narrow Areas Where Collateral Attacks on Subject Matter Jurisdiction is Appropriate (Section 12 of the Restatement (2nd) of Judgments): o Where the lack of jurisdiction is so manifest as to make application of res judicata unjust. o Where the prior judgment would substantially infringe upon the authority of another tribunal or agency. o Where the court lacked the capability to make an adequately informed determination of a question concerning its own jurisdiction. Motion to Dismiss for Lack of Subject Matter Jurisdiction: FRCP 12(b)(1) o Courts Obligation to Raise Issue Sua Sponte: Under FRCP 12(h), if the parties do not raise the motion to dismiss, the court is nonetheless obligated to raise the question, since it lacks the statutory and constitutional authority to hear the case. The Supreme Court in Mottley raised the issue on its own motion, sua sponte: it is the duty of this court to see to it that the jurisdiction of the circuit court, which is defined and limited by statute, is not exceeded. Without subject matter jurisdiction, a court lacks the power to adjudicate the case under constitutional law. Federal courts are courts of limited jurisdiction. o Unlike Motion to Dismiss for Lack of PJ: Contrast this with a motion to dismiss for want of personal jurisdiction under 12(b)(2). Under 12(h), this defense is waived if not raised by the parties in a responsive pleading or an amendment thereof. The logic behind this is that, in respect to personal jurisdiction, it is your due process rights that are protected, and accordingly, you are free to waive those rights. With subject matter jurisdiction, it is a fundamental question about the power of the courts.

Conflict of Jurisdiction between State and Federal Courts FULL FAITH AND CREDIT EXTENDED TO FEDERAL COURTS The Constitution's Full Faith and Credit Clause is applicable only where a state court judgment is sought to be enforced in another state. However, an implementing federal statute provides that this Clause is extended to the federal courts. Therefore, recognition of judgments is required between state and federal courts and between federal courts.

97 INJUNCTIONS AGAINST PENDING STATE PROCEEDINGS Potentially, a case also could be filed in state court by one party and in federal court by the other party. In such a case, federal court is prohibited from enjoining pending state court proceedings unless expressly authorized by statute (e.g., the interpleader provision expressly authorizes injunctions against state court proceedings), or "where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." [28 U.s.C. 2283] The case coming to a final decision first will have preclusive effect on the other. INJUNCTIONS AGAINST THREATENED STATE CRIMINAL PROSECUTIONS Threatened state criminal prosecutions (i.e., where state court proceedings have not already been instituted) will be enjoined only when necessary to prevent irreparable harm which is clear and imminent and where appellate remedies in the criminal case are clearly inadequate to provide relief Such injunctions are almost invariably denied, except where a federal right of free speech or assembly or a federally protected civil right is threatened by the state criminal proceeding, and it is shown that the prosecution is in bad faith or is for the purpose of harassment. Relief by declaratory judgment will ordinarily be denied if an injunction would be denied. THE DOCTRINE OF ABSTENTION Unless the doctrine of abstention applies, nothing prohibits the federal court from hearing a case that is pending in state court. 1. Policy of Abstention Under certain circumstances the federal courts will retain jurisdiction over a suit involving a challenge to the constitutionality of a state law but abstain from deciding the question until a decision has been made by the state courts on the meaning of the state law. A determinative interpretation of the state law may obviate the federal constitutional question. The considerations that have led federal courts to refrain from deciding a challenge to the constitutionality of a state law include: (i) Possible unnecessary friction with the state, particularly when a state regulatory plan based on predominantly local factors is in issue; (ii) Possible error in the construction of an unclear state law; and (iii) Reluctance to decide constitutional questions unnecessarily (where the state court might construe the state statute in such a way that it would be constitutional). Note that in cases where abstention would be proper, the federal courts ordinarily should stay the federal action rather than dismiss it. 2. Federal Intervention in Certain Cases If the challenged state statute is "flagrantly and patently violative of express constitutional prohibitions in every clause, sentence and paragraph, and in whatever manner and against whomever an effort might be made to apply it" [Huffman v. Pursue, Ltd., 420 U.S, 592 (1975)], then "the federal court need not stay its hand in the face of pending state proceedings" [Moore v. Sims, 442 U.S, 415 (1979)], Federal intervention on constitutional grounds may occur if the federal plaintiff can demonstrate: a. Great and immediate irreparable injury; b. Bad faith in the prosecution of the state action; or c. Harassment or other unusual circumstances calling for federal equitable relief.

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Venue
Federal venue rules determine the judicial district in which an action within the jurisdiction of federal courts may be brought. General Principles: Venue refers to the place within a judicial jurisdiction in which a case is to be tried. Venue principles are aimed at the selection of the most convenient and logical court within a given court system. Although venue is determined by statute, but parties can stipulate or contract to an otherwise improper venue. Objections to venue are waived unless timely asserted. If venue is improper, the court will usually transfer rather than dismiss. Venue requirements operate as a further geographical limitation on Ps choice of court administrative funnel to direct cases to those locales w/in the states that have jurisdiction that have a connection to the either the parties or the underlying transaction o States: counties o Federal govt: districts For diversity or federal question SMJ, venue is appropriate if D resides there OR a substantial part of the underlying claims occurred there Fallback provisions: o Federal Question: Case may be filed in any district where a D may be found o Diversity: Any district where D is subject to PJ 12(h)(1) 12(b)(3) objection to venue must be raised in a timely manner or is waived o HOWEVER, proper venues is NOT a constitutional requirement for a valid judgment and cannot be raised by means of a collateral attack o As an alternative to dismissal under 12(b)(3), court can transfer case to a proper venue FORUM NON CONVENIENS An equitable doctrine permitting a court to refrain from hearing and determining a case when the matter may be more properly and fairly heard in another forum

Section 1391: Venue Generally (a) A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in: (i) a judicial district where any defendant resides, if all defendants reside in the same State; (ii) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; OR (iii) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought. (b) A civil action wherein jurisdiction is not founded solely on diversity of citizenship may, except as otherwise provided by law, be brought only in (i) a judicial district where any defendant resides, if all defendants reside in the same State; (ii) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; OR (iii) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought. c) For purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. In a State which has more than one judicial district and in which a defendant that is a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that State within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate State, and, if there is no such district, the corporation shall be deemed to reside in the district within which it has the most significant contacts. (d) An alien may be sued in any district. Section 1392: Defendants or Property in Different Districts in Same State (a) Any civil action, not of a local nature, against defendants residing in different districts in the same State may be brought in any of such districts. Section 1404: Change of Venue (a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. Section 1406: Cure or Waiver of Defects (a) The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

100

101 Subject Matter Jurisdiction Distinguished Subject matter jurisdiction and venue are very often confused. o Subject matter jurisdiction is the power of the court to adjudicate the matter before it question of authority o Venue relates to the proper district in which to bring the action question of convenience Subject matter jurisdiction cannot be conferred by agreement; venue can be. A court can have subject matter jurisdiction without having proper venue. General Rules 1) General Rules for Most Civil Actions a. Venue in civil actions in the federal courts is proper in: i. A judicial district where any defendant resides, if all defendants reside in the same state; Example: Suppose, for example, that Sherman sues Stuart, from the Western District of Virginia, and Lee, from the Eastern District of Virginia, in a diversity case. Venue would be proper in either district, because both are from the state and 13 91 (a) (I) authorizes jurisdiction in such cases in any district in which a defendant resides. ii. A judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; OR iii. Fallback: If there is no district any where in the United States which satisfies (i) or (ii) 1. For actions based solely on diversity, a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced; or 2. For actions not based solely on diversity, a judicial district in which any defendant may be found. 2) Actions Involving Both Diversity and a Federal Question If an action satisfies the jurisdictional requirements for both federal question and diversity jurisdiction, the venue provisions for federal question cases govern, because such a suit is not "based solely on diversity." a. a judicial district where any defendant resides if all defendants reside in the same state b. a judicial district in which a substantial part of the events giving rise to the claim occurred or a substantial part of property that is the Subject of the action is situated; or c. Fallback: a judicial district in which any defendant may be found if there is no district in which the action may otherwise be brought. Both "fallback" provisions only apply if there is no district, anywhere in the United States, in which the case can be brought under the other subsections of the statute. Example: Suppose that Stuart. from California, brings a diversity action against Sheridan, from Colorado, and Hooker, from Ohio, for an accident that took place in Illinois. No district will be a proper venue under 1391(a)(I) because the defendants do not reside in a single state. However, there will be at least one proper venue under 1391 (a)(2): the district within Illinois where the accident occurred, since a substantial part of the events giving rise to the suit took place in that district. Because there is a proper venue under one of the first two subsections, Stuart cannot invoke 1391(a)(3).

102 If Stuart's accident had taken place in Canada, he could try to lay venue under subsection (3), since on these facts there would be no proper venue under either 1391(a)(I) or (a)(2). However, to find a proper venue under subsection (3), he would have to find a district in which either Sheridan or Hooker was subject to personal jurisdiction. 2 3) Special Venue Provisions There are many venue provisions applicable only to specified types of actions. Two worth noting are: a. An alien may be sued in any district [28 U.S.c. 1391(d)]; and b. Where the defendant is the United States or an agency thereof, or an officer, employee, etc., of the United States acting in his official capacity, a civil action may be brought where: i. a defendant resides; ii. a substantial part of the events or omissions giving rise to the action occurred, or a substantial part of property that is the subject of the . action is situated; or iii. the plaintiff resides if no real property is involved in the acncc [28 U.S.c. 1391(e)]. Residence 1) Individuals a. Residence for federal venue purposes is usually determined by a person's domicile. Therefore, a person who maintains two homes usually will be deemed to reside only in the district of his domicile. It is possible, however, for a domiciliary of one state to reside for venue purposes in a different state. 2) Corporate DEFENDANTS a. For purposes of venue, a corporation is deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. b. If a state has more than one judicial district, the corporation is deemed to reside in any district in the state within which the corporation's contacts would be sufficient to subject the corporation to personal jurisdiction if the district were a state; if there is no such district, the corporation is deemed to reside in the district within which it has the most significant contacts. 3) Unincorporated AssociationsFor venue purposes, an unincorporated association "resides" where it does business. [Denver & Rio Grande Western Railroad v. Brotherhood of Railroad Trainmen, 387 U.S. 556 (1967)-union could be sued in Colorado where doing business] Venue in Local Action A "local action" (e.g., an in rem action relating to real property) must be brought in the district where the property that is the subject matter of the action is located. Section 1392(b) provides that where the property is located in more than one district in the same state, venue is proper in any such district. Improper Venue May be Waived Unlike jurisdiction over the subject matter, venue may be waived by the parties. Venue is considered to be waived unless timely objection (in a pre-pleading motion or, where no such motion is made, in the answer) is made to the improper venue.

103 Forum Non Conveniens General Rule: The common law doctrine of forum non conveniens, provides for dismissal on grounds of inconvenience and in anticipation that the plaintiff will recommence the suit in the alternative foreign venue. o To obtain a forum non conveniens dismissal, the defendant must: Demonstrate that an adequate alternative forum is available. Show the Gilbert balancing test weights in its favor. Balancing Test: From Gulf Oil Corp. v. Gilbert (US 1947), cited in Piper: In determining convenience, a court should balance: o The private interests of the litigants: Including the ease of access of sources of proof, capacity to compel the attendance of the unwilling, cost of obtaining attendance by willing witnesses, etc. Unfavorable Change of Law Insufficient Basis for Denial: The possibility of an unfavorable change in law should not, by itself, bar dismissal. Piper Aircraft Co. v. Reyno (US 1981) (Justice Marshall) (p. 679). o The public factors: administrative difficulties flowing from congesion, the local interest in having controversies decided at home, familiarity with the law to be applied, avoidance of the conflict of laws, the unfairness of burdening citizens in an unrelated forum with jury duty. Limitation: There must be some other forum available in which the suit might be brought. Transfer 1) Original Venue ProperSection 1404(a) allows transfer to another district where the action "might have been brought" even though venue has been properly laid in the court before which the motionto transfer is made. The policy behind section 1404 is that while venue may be correct, the parties or the witnesses might be greatly inconvenienced by the trial in the original forum . By balancing the relative convenience offered by the alternative forums, the original court has discretion to transfer the action to a court in which the action "might have been brought" in conformity with the rules governing: (i) subject matter jurisdiction, (ii) in personam jurisdiction over the defendant, and (iii) where venue is proper. a. Effect of Forum Selection Clause The presence of a forum selection clause in a contract, by which the parties have specified a particular forum as the appropriate place for litigation, is a factor to be considered along with convenience and the interest of justice in deciding whether to transfer the case. [Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988)] b. Original Venue ImproperSection 1406(a) is designed for situations where the venue is improper and the alternative to transfer is dismissal of the action. The standard for transfer is "the interest of justice." Transfer is more appropriate than dismissal except in extraordinary circumstances. The transferee forum must have subject matter jurisdiction and in personam jurisdiction over the defendant, and venue must be proper. Some courts have held that section l406(a) applies when the original court is a proper venue but lacks personal jurisdiction over the defendant. This view seems contrary to the language and purpose of the statute.

104 Case Examples Piper Aircraft Co. v. Reyno (U.S. 1981) (pg. 751): Transfer for forum non conveniens allowed. Airplane crash in Scotland; Scottish residents die; Scottish air traffic control; evidence/witnesses in Scotland; plane and propeller manufactured in U.S.; suit in CA for strict products liability (better law). D gets state suit removed to federal court on diversity jurisdiction, so then can use 28 U.S.C. 1404. D couldnt implead 3rd-party Scottish Ds would lead to additional litigation, more efficient to combine cases in Scotland Scotland has a very strong interest in litigation. o The accident occurred in its airspace. o All of the decedents were Scottish o Apart from Piper (D) and Hartzell (D), all potential plaintiffs and defendants are either Scottish or British. 1. Possibility of unfavorable change in law is relevant, but not dispositive a. FNC doctrine is supposed to be flexible cant place inordinate emphasis on any single factor i. If substantive law was given inordinate weight, dismissal based on FNC would rarely be proper choice-of law analysis would be extremely important, exhaustive research required 2. Presumption in favor of Ps forum is less forceful when P is foreign as well a. A plaintiffs choice of forum should rarely be disturbed. However, when an alternative forum has jurisdiction to hear the case, and when trial in the chosen forum would "establish ... oppressiveness and vexation to a defendant ... out of all proportion to plaintiffs convenience," or when the "chosen forum [is] inappropriate because of considerations affecting the court's own administrative and legal problems," the court may, in the exercise of its sound discretion, dismiss the case b. Because the central purpose of any forum non conveniens inquiry is to ensure that the trial is convenient, a foreign plaintiff's choice deserves less deference. 3. PRIVATE INTEREST: a. Inconvenience of litigants (efficiency, cost, fairness) b. Cost of obtaining attendance of witnesses c. Problems of viewing on-location evidence / where evidence is d. Getting service over parties and witnesses (practical problems of litigation) 4. PUBLIC INTEREST: a. Administrative difficulties of court congestion b. Local interest of having localized controversies decided at home c. For diversity case, interest of having case at home with the law that must govern the action d. Avoidance of problems in conflict of laws, or in application of foreign law e. Unfairness of burdening citizens in an unrelated forum with jury duty In Re Union Carbide Corporation Gas Plant Disaster (2d Cir. 1984) (pg. 760): Victims of disaster in India sue chemical company headquartered in NY in federal district court. Court dismissed for forum non conveniens b/c vast majority of evidence and witnesses in India, records almost all in Indian language, and problem of getting service of process and compelling Indian witnesses to testify.

105 Wiwa v. Royal Dutch Petroleum Co. (2d Cir. 2000) (pg. 760): Claims of human rights abuse brought by Nigerian migrs against corps. Court declined to dismiss for forum non convenience due to strong public interest in U.S. hearing human rights cases, which are the business of the court.

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The Pre-Trial Litigation Process

Evolution of a Civil Procedure Case Client brings matter to the attention of his legal counsel o Cognizability whether the law will give relief to a particular grievance o Cause of action the events or circumstances that must have to taken place (or will take place) before a court will grant relief under some applicable substantive law Elements individual criteria that must be satisfied in order to bring a cause of action (prima facie case) If there is at least one provable cause of action, lawyer may take case and discuss fees o Has to decide whether opposing party can be sued personal jurisdiction Forum shopping if a person can be sued in multiple jurisdictions, then a lawyer should select the one that has the most favorable legal standard, juries, trial history, etc. o Has to decide which court to sue in subject-matter jurisdiction, many states have at least one trial court with general SMJ Federal SMJ 28 USC 1330: Federal question and diversity of citizenship Unless Congress grants exclusive jurisdiction to federal courts, then state and federal courts have concurrent jurisdiction even over federal question cases Long-arm statute allowed to sue citizen of one state I another state where the incident took place o Venue geographic location of the court where the incident took place or where the defendant lives o Notice service of process informing D of suit Draft complaint in accordance with local rules o Make sure suit isnt barred by SOL o Determine whether you want a jury trial o Determine whether to file for joinder of claims (multiple causes of action) or joinder of parties (multiple Ds) D may file motion to dismiss based on lack of a cause of action o Well-drafted complaint will rebut this Ds answer o Affirm or deny factual claims and provide affirmative legal defenses if not, risks losing the opportunity to do so o Can bring impleader to request indemnification from employer o Multiple Ds can submit cross-claims against each other Discovery o Procedures by which parties can gain information from each other o Some info subject to mandatory disclosure o Other info can be gleaned through interrogatories and depositions P has burden of proof burden of producing enough evidence to substantiate claims, or else judge can enter judgment as a matter of law (directed verdict) finding a lack of sufficient evidence o Rule 50 directed verdict, reasonable jury standard, motion made any time before case is submitted to a jury Persuasion burden preponderance of evidence -- > 50% that P is right Motion for Summary Judgment by D or P asking judge to render decision based on available evidence

108 Renewed judgment as a matter of law asks judge to ignore verdict and enter de novo decision Must also consider whether there should be a new trial Case management efforts by which court attempts to control scope and progress of trial o Rule 16 Pretrial conferences, scheduling orders, imposition of sanction for failure to attend or participate Appeals follow final judgment Res judicata Ps burdens State a viable cause of action Meet production burden preponderance of evidence Persuasion burden

Motion timeline Complaint 12(b) motions Answer Judgment on the pleadings o 12(c) D could admit all essential elements of Ps case Motions for voluntary/involuntary dismissal o Rule 41(a) criteria for allowing P to voluntarily dismiss complaint Absolute right of dismissal prior to Ds filing of an answer or MSJ Dismissal will be w/o prejudice unless both parties have stipulated to prejudice or P has filed and dismissed the claim once before in federal or state court Prejudice res judicata effect Court can also allow P to dismiss at its discretion Can be subject to certain terms, e.g. prejudice or payment of Ds attorney fees, usually depend on length of litigation, costs imposed o Rule 41(b) involuntary dismissal SMJ and some other MTD have a res judicata/prejudice effect, as do failures to comply with court orders or the Rules Rule 16 scheduling conference and order Discovery Motions to amend Settlement discussion MDJs Rule 16 pretrial conference Trial Motions for directed verdict/judgment as a matter of law o Party with burden of production and persuasion on a given issue has to provide enough evidence to allow a reasonable fact-finder to find for that party o Judge views facts in light most favorable to the nonmoving party o Rule 50 motions for DV can be submitted at any time before case is submitted to a jury, moving party needs to specify facts and the judgment it wants typically sought by D after P rests and then again after all parties rest Does this negate Ps right to a jury trial? Verdict

109 Entry of judgment Motions for JNOV/judgment as a matter of law o Rule 50b Court can set aside jurys verdict and issue a new judgment same test as a directed verdict o Constitutionally problematic in its original form current language has been deemed OK o However D MUST move for DV before case is submitted to a jury in order to move for JNOV after a verdict has been entered o Not filing JNOV may vitiate Ds ability to seek a new trial or have evidence heard on appeal Motions for new trial o Rule 59 must be filed w/in 28 days after judgment has been entered Decision to grant must be based on precedent governing new trial motions May b/c the weight of the evidence was clearly against the jurys verdict rarely granted o 59d judge can order new trial sua sponte May be convinced that he made an error that would make the judgment reversible on appeal Sometimes juries act with extreme prejudice or misconduct However, Federal Rules of Evidence prevent impeachment of jurors by detailed questioning Appeals Motions to vacate judgment Execution of judgment

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Filing Suit
Commencement of the Action Rule 3 provides that an action is commenced by filing a complaint with the court. o Federal courts may adopt local rules to permit filing by fax or other electronic means. o Filing a complaint before the statute of limitations has run will satisfy the statute of limitations in federal question cases and in diversity cases where the state rule is similar. However, the Supreme Court has held that a state rule that an action is commenced for purposes of the statute of limitations only upon service of process must be applied in diversity cases. [Walker v. Armco Steel Corp., 446 U.S. 740 (1980)] Complaint (claim for relief) o Rule 7(a)(1): Definition of complaint as a pleading o Rule 8(a): Claims must have the following elements: (a)(1) Jurisdiction grounds (a)(2) Short and plain statement of the claims (a)(3) Demand for relief sought, including relief in the alternative or different types Relief that is requested does not limit what final relief the court can grant (Rule 54(c): Court can award damages even if they arent requested, except if it is a default judgment) (d)(1): Allegations must be simple, concise, and direct d)(2): Pleading in the alternative Doesnt allege facts for a claim/defense that precludes another claim/def. Ex: negligence and battery; affirmative defense of (1) immunity as a federal officer; (2) wasnt there (d)(3): Inconsistent claims or defenses Party can state as many separate claims/defenses as it has, regardless of consistency (different than alleging facts in pleading that conflict with claim/defense) o Rule 9: Pleading Special Matters 9(a): Capacity or Authority to Sue; Legal Existence Generally, no need to plead 9(b): Fraud or Mistake Must state circumstances with particularity, though conditions of a persons mind may be alleged generally Bower v. Weisman (S.D.N.Y. 1986) (pg. 223) (bad break-up) o FRCP 12(e) motion to dismiss fraud claim was ordered. o Fraud claim normally includes time, place, and content of misrepresentations 9(c): Conditions Precedent o Allege generally o Deny with particularity 9(d): Official Document or Act 9(e): Judgment No need to show jurisdiction 9(f): Time and Place allegation is material for testing pleadings sufficiency 9(g): Special Damages

112 If item of special damage is claimed, it must be specifically stated Ex: P incurred expenses to minimize loss Purpose: to notify D when type of loss is unusual for type of claim being sued upon, so D isnt unfairly surprised o Rule 15: Amended and Supplemental Pleadings 15(a): Amendments prior to trial Amendment as of right: either party may amend his pleading once, as a matter of right if no responsive pleading has been served or, if the original pleading is one to which nonresponsive pleading is permitted (e.g., an answer without a counterclaim), within 20 days after it is served Amendment by leave of court: If the pleading has already been amended as a matter of right, or the time for amending as a matter of right has passed, a party may amend his pleading only by leave of court, and FRCP 25(a) states: leave to amend shall be freely given when justice so requires. Such leave is usually granted unless demonstrable prejudice to the other party is shown. The later into the lawsuit the amendment is sought the more likely a court will find prejudice. (argue exam facts.) 15(b): Amendment to conform to proof at trial A party may seek leave to amend his pleadings to conform to proof presented at trial. Again, such leave is usually given unless demonstrable prejudice to the opposing party can be shown (e.g., surprise which leaves the opposing party unprepared to meet a new claim). Even if leave to amend is not sought, the pleading is deemed to be amended to conform to proof by implied consent of the parties if evidence is introduced by a party which is not relevant to pleaded issues and the opposing party does not object. 15(c):Amendments and the Statute of Limitations - "Relation Back" Rules [ Amendment to add a new claim against the same party after the Statute of Limitations has run: Most states, and the federal courts [under Rule l5(c)], allow an amended pleading which adds a new claim against the same party to "relate back" to the date the original pleading was filed as long as the claim asserted in the amended pleading arose out of the same transaction or occurrence set forth in the original pleading. Amendment to correct a misnomer: Where plaintiff has sued the correct defendant but has merely misspelled his name, amendments to correct such technical errors should be freely granted. Amendment changing a party or the naming of a party after the Statute of Limitations has run: Where plaintiff has made an error as to the identity of the defendant and, therefore, has mistakenly sued the wrong defendant, F.R.C.P. 15(c) permits an amended pleading, which changes the defendant or the naming of a defendant, after the statute of limitations has run, to "relate back" to the filing date of the original pleading if the claim arose out of the same transaction and occurrence and the "right" defendant, within the period required by law Rule 4(m) for service of the summons and complaint (i.e., 120 days), (1) received actual notice of the pendency of the action so that he will not be prejudiced in maintaining a defense and (2) knew or should have known that, but for the mistake concerning the identity of the proper defendant, the action would have been brought against him.

113 o 1) NOTE: The phrase "period required by law" in Rule l5(c) had formerly been interpreted to refer to the statute of limitations period. In 1991, Rule l5(c) was amended to specify that "period required by law" means the 120 day period for serving the summons

Pleading Requirements o The federal pleading rules generally require only that a pleader put the other side on notice of the claim being asserted; detailed assertions of facts underlying the claim generally are not required. However, the Supreme Court in recent years has required that the plaintiff state facts supporting a plausible (not just possible) claim. [Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)] Cause of action the event or incident that gives you a legal claim to pursue a relief in court Constitutional, statutory, or common law claim need a legal basis for complaint There can be multiple causes of action in a single complaint arising from the same or different incidents Elements criteria that must be satisfied in order to demonstrate a cause of action constituent components of a cause of action Theory of the case a partys version of what happened fact pattern Jurisdiction Subject matter legal basis for the courts exercise of its power o Federal courts limited jurisdiction defined by constitution and federal statute o State courts general jurisdiction powers not reserved to the federal government are retained by the states (10th amendment) o Federal and state courts have concurrent jurisdiction unless Congressional statute has granted federal courts exclusive jurisdiction over a certain subject matter (e.g. anti-trust cases) o It cannot be manufactured, waved, or stipulated if a court never had jurisdiction, then the trial never took place Personal jurisdiction power the court has to bring an individual before the court Factual inconsistencies in pleadings are not permissible Where the facts that are necessary to support different claims/defenses are inconsistent, or mutually exclusive (ex: (1) wasnt there; (2) self-defense) Bowers v. Weisman (S.D.N.Y. 1986) (pg. 223) (bad break-up; claims of fraud, trespass, false imprisonment, intentional infliction of emotional distress, private nuisance, breach of K) o False imprisonment claim dismissed (FRCP 12(e) motion) because Ps own factual allegations suggested she was permitted ingress and egress from her home, and thus was not confined o Special Pleading The general rule of pleading is for short and plain statements, but there are certain rules for special circumstances. [See Fed. R. Civ. P. 9]

114 o Note that in some of these situations (notably concerning fraud, mistake, and special damages), the Federal Rules require a party to state more detail than simply a short and plain statement. o These situations requiring greater specificity are narrow, however, and the Supreme Court has emphasized that courts have no power to impose such rigorous pleading requirements outside the areas addressed by Federal Rule or statute. [Swierkiewicz v. Sorema NA, 534 U.S. 506 (2002)-lower court erred by requiring detailed pleading of employment discrimination claim; Leatherman v. Tarrant County, 507 U.S. 163 (1993)-lower court erred by requiring detailed pleading of civil rights case against municipality] Capacity Capacity or authority to sue or be sued need not be alleged. A person wishing to challenge a party's capacity has the duty to raise the issue by specific negative averment, including such particulars as are within his knowledge. Fraud or Mistake Circumstances that establish fraud or mistake must be stated with particularity. By statute (the Private Securities Litigation Reform Act), plaintiffs in federal securities fraud cases must plead with particularity facts relating to the defendant's acting with the required scienter. Conditions of the Mind Malice, intent, knowledge, or other conditions of the mind may be averred generally. Conditions Precedent The performance of conditions precedent may be alleged generally. Denial of performance or occurrence must be made specifically and with particularity. Official Document or Act When dealing with an official document or act, it is sufficient to aver that it was issued or the act was done in compliance with the law. Special Damages Elements of special damages must be specifically stated. Pleading Rules Pre-Twombly: Simple and plain statement in complaint Even if someone cant speak the language well, a simple and plain statement suffices ( Diguardi v. Durning) (2d Cir. 1944) (pg. 197) o Facts P sued D (consignor of goods that P ordered, held bottles of medicine in storage at customs) for conversion Act of depriving an owner of his property w/o permission or justification P was not an attorney and filed a pro se, poorly-written complaint o Rules Rule 8 doesnt require that P provide enough facts to constitute a cause of action only a short and plain statement of the claim showing that P is entitled to relief

115 Complaint is not necessarily an evidentiary statement only a vehicle for conveying a cause of action dont need to present a prima facie case only need to present an acceptable allegation Fed rules rely on discovery procedures to develop the facts

FRCP in general embodies liberal pleading requirement claim only dismissed if under no set of facts can there be a cause of action (Conley v. Gibson) (U.S. 1957) (pg. 199) (black railroad workers want collective bargaining agent to represent them) o Facts P (union members) brought class action against D (their labor union) alleging that, because they were black, the union failed to represent them fairly in negotiations w/ their employer for seniority and other job protection matters o D moved to dismiss on several grounds: 1) Nat'l Railroad Board had exclusive jurisdiction, 2) there was an indispensable party not joined? as a D, and 3) complaint failed to state a claim upon which relief could be given o Holding FRCP simply requires a short and plain statement of the claim that will give D fair notice of the claim and the grounds upon which it rests; Pleading is not a game of skill in which one misstep may be decisive to the outcome o Conley Rule "complaint should not be dismissed for failure to state a claim unless it appears beyond a doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief" Policy rationale for simple rule: o Pleadings come before discovery, which can take much work, time, and money o Pleadings are a wide door at the beginning of litigation that narrows as it proceeds Summary judgment (Rule 56) (post-discovery) allows for resolution before trial o Plaintiff-friendly Heightened pleadings standard should generally be limited to Rule 9 cases; no need to specifically plead facts to support prima facie case (ex: 9(b) Fraud or Mistake) (Leatherman v. Tarrant Country Narcotics Intelligence and Coordination Unit) (5th Cir. 1992) (pg. 202) (police search of home and killing of dogs)

Twombly New Standard (Bell Atlantic Corp. v. Twombly) (S. Ct., 2007) (pg. 205) (ILECs violation of Sherman Act by colluding to not compete?) Facts o P (Twombly) alleged in a complaint that D (local telephone companies - "Baby Bells") were violating anti-trust laws o Alleged that Ds agreed not to compete with each other and to exclude other potential competitors, which allowed monopoly power in the market. o The district court understood parallel business conduct alone not to state a claim, and that the allegations did not raise an inference that D's actions were the result of conspiracy o Lower court dismissed the complaint for failure to state a claim, and the appellate court reversed.

116 Legal rules o Sherman Act Only prohibits restrictions on commerce or trade that stem from contract, combination, or conspiracy therefore, crucial element to a cause of action is whether the challenged behavior stems from a tacit or express agreement (Theater Enterprises) If action stems from independent decision, not illegal under Sherman Act parallel action is admissible circumstantial evidence, but not dispositive Holding o The court reverses, reinstating the d.c.'s dismissal of the complaint, saying P must provide more than labels and conclusions; complaint must contain more than a statement of facts that merely creates the suspicion of a cause of action o There must be enough factual matter (taken as true) to raise a reasonable expectation that discovery? will reveal evidence of an illegal agreement; court cites the potentially enormous costs of discovery as a reason for this P did not provide any evidence to show agreement amongst D entities Circumstantial evidence of parallelism is not evidence of conspiracy need implication or preceding agreement ILECs could be acting purely out of self-interest need evidence of something further Complaint offers no plausible evidence of a prior agreement Simply b/c the heads of the ILECs had opportunity to conclude (mtgs, phone calls) does not meet plausibility standard o In dismissing Conley's "no set of facts" standard, court says judges and commentators have balked at interpreting it literally Literal reading of Conley language would allow any P to bring forth a claim with a facially plausible theory so long as the discovery may lead to a dispositive set of facts Standard is way too broad, would allow meritless claims to proceed Conley does not set out minimum standard for an adequate pleading Anti-trust litigation is expensive trial courts need some specificity before allowing trial to go to discovery Careful case management is not enough to weed out baseless claims shouldnt allow them to proceed to discovery in the first place Dissent o Question as stated by majority was: are allegations of parallel conduct enough to state a violation of the Sherman Anti-Trust Act? o Stevens >> If that were indeed the issue, a summary reversal citing Theatre Enterprises would adequately resolve the case; P alleges an agreement that has long been recognized as a per se violation of the Sherman Act o The relaxed pleading standards of the FRCP were not designed to keep litigants out of court, but rather to keep them in o Stevens >> directing that the case be dismissed without even looking at the evidence marks a fundamental and unjustified change in the character of pretrial practice Swierkiewicz judge ruling on defendants motion to dismiss must accept as true all of the factual allegations in the complaint P alleged conspiracy, judge should have accepted that

117 Conspiracy standard (Zenith case) In order to survive MOD, P must provide evidence that tends to exclude the possibility that D acted independently and the conspiracy is a reasonable inference

Twombly Rule o Must allege some set of facts that plausibly suggest, instead of merely being consistent with, elements of the claim Collective action could be coincidence / independent action rather than collusion; complaint must plead facts that exclude this possibility (policy grounds for courts decision) o Must plead factual elements of cause of action o "we do not require a heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." o Under Twombly: No weight given to legal conclusions (conclusory statements) No dismissal if well-pleaded facts that remain (taken as true) state a plausible claim for relief; court can draw on judicial experience and common sense Policy Rationale for Twombly rule: o Prevent floodgates of litigation and unreasonable discovery o Prevent coerced settlements (when cheaper to settle than go into discovery)

118 Ashcroft (D) v. Iqbal (P) (SCOTUS 2009) Issue Did P plead a factual matter if, taken as true, is sufficient to support the claim that D deprived him of his constitutional right? Did CCA have SMJ to hear Ds appeal of DC rejection of motion to dismiss? Facts P was a Pakistani Muslim who was arrested in the U.S. on criminal fraud charges, detained in a supermax prison b/c he was of special interest, and allegedly abused o Pleaded guilty to fraud charges, was imprisoned and then removed to Pakistan o Claimed that D was responsible for abuse by promulgating tolerant, supportive policies that subjected P to harsh treatment on account of his race religion, or national origin in violation of 1st and 5th amendments o Ashcroft and Mueller were instrumental in policys creation, adoption, an implementation Filed a Bivens complaint against FBI agents who perpetrated abuse conducted discovery to identify them Procedural history DC held that D was not entitled to immunity that Ps complaint satisfied Rule 8 criteria o Pre-Twombley, applied Conley no set of facts standard D filed interlocutory appeal with the 2nd CCA, which upheld ruling o Post-Twombley, applied flexible plausibility standard determined that this was not a context requiring amplification of facts SCOTUS granted cert Legal rules 28 USC 1291 CCA can ordinarily only hear appeals of DC final decisions o Behrens Limited exception for matters too important to deny review and too independent of the cause to defer appellate jurisdiction Federal official immunity o Generally, USG officials are protected from litigation if they were acting in their official capacity o P must demonstrate that they acted in violation of clearly established law Bivens action Implied private right of action for damages against federal officers alleged to have violated a citizens constitutional rights analog to 42 USC 1983 (enforcement of civil rights laws) o However, no respondeant superior P must establish that each USG D is responsible for injury suffered o 1st and 5th amendment claims must prove that D actually intended to discriminate Ps complaint must provide sufficient factual matter to show that D adopted interrogation procedures for the purpose of discrimination Twombley/Papsan P must provided more than naked assertions devoid of other factual enhancements claim must be plausible on its face o Court not bound to accept as true legal conclusions couched as factual allegations o Determining whether MTD should stand is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense Holding No Ps complaint does not cross the conceivability/plausibility line o Twombley applies to all civil cases even if court promises D minimally intrusive discovery o Cant allege discrimination claims generally

119 Yes DCs rejection of Ds qualified immunity claim was a final decision subject to immediate appeal Reasoning Allegations in complaint are nothing more than a formulaic recitation of the claims elements conclusory and not assumed to be true o Complaint doesnt even purport to show that D purposefully housed high interest detainees in a Supermax b/c of discrimination Dissent Supervisory liability is a cognizable claim o D conceded that they could be held liable if they knew of discriminatory conduct and willfully ignored it complaint sufficient under Rule 8 b/c they concede that a certain set of facts could support claim o Theres a spectrum of supervisory liability D could be held liable for a variety of reasons Misapplication of the Twombley standard o Ps complaint did have enough facts to make claims prima facie plausible gives D fair notice of claims against him statements werent conclusory Breyer dissent court can reduce scope of inquiry by using qualified immunity in this case Significance How could P allege that D intended to discriminate? Impossible to characterize their state of mind o Need discovery in order to obtain their state of mind Korematsu Would Plaintiffs have been able to plead under this new standard? Requiring ever more facts to substantiate complaint

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121 Service of Process An elementary and fundamental requirement of due process in any proceeding which is to be accorded formality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullanev. Central Hanover Bank, 339 U.S. 306, 311 (1950). In civil suits, this requirement is fulfilled through service of process. Service of Process service of the initial notice to the defendant of the filing of a lawsuit against him. Service of this initial summons both notifies the defendant that he has been sued and informs him that the court intends to proceed to adjudicate his rights. Rule 4: Service a. 4(m): Time Limit of Service: D must be served within 120 days of the complaint being filed i. If not served within 120 days, then court must dismiss without prejudice, or order service in within a specified time ii. If P shows good cause for failure, then court must extend time b. 4(e): Methods for Serving an Individual with summons and complaint i. 4(e)(1): Under rules of state law where district court is located, or where services is made; or ii. 4(e)(2): (A) Hand delivery; (B) Leaving copies at persons house with someone of suitable age and discretion who resides there; or (C) Delivering copies to individuals lawyer c. 4(c)(2): By Whom: Anyone who is at least 18 yrs old and not a party d. 4(d): Waiving Service: P notifies D of action and asks D to waive service i. 4(d)(2): Failure to Waive: If D fails to waive without good cause, the court must impose (A) later expenses of making service; and (B) reasonable expenses (including atty fees) of any motion to collect service expenses ii. 4(d)(3): Time to Answer After a Waiver: D who accepts gets an extra 40 days (total of 60 days) to serve responsible pleadings (see Rule 12(a)(1)(A)(ii)) 1. Who May Serve Rule 4 authorizes any person who is at least 18 years old and not a party to the action to serve the summons and complaint (together known as "process"). A party may request that service be made by a United States marshal or by another person appointed by the court for that purpose. 2. How Service Is Made Generally, Rule 4 provides that: (i) personal service, (ii) service left at the defendant's usual place of abode with one of suitable age and discretion residing therein, or (iii) service upon an authorized agent of the defendant, is valid. Alternatively, service may be made under state rules or by mail under the waiver of service provision of Rule 4(d). d. Service Under State Rules Rule 4 provides that service may alternatively be made as provided by the rules of the state in which the federal court sits or the state in which service is to be effected, regardless of whether

122 the action is founded on diversity of citizenship jurisdiction. Hence, federal courts can use state long arm provisions. e. Waiver of Service (Service by Mail) The plaintiff may also request the defendant to waive service of process. To request a waiver of service, the plaintiff must mail the defendant certain items, the most important of which are a formal request to waive service (that also informs the defendant of the consequences of failing to waive service), two copies of the waiver form, and a copy of the complaint. The defendant generally has 30 days (60 days if outside the United States) from the date that the request was sent to return the waiver. 1) Effect of Waiver A defendant who waives formal service of process has 60 days (90 days if outside the United States) from the date the request was sent, instead of the usual 21 days (see E.3.b., infra) to answer the complaint. The waiver of service does not waive the defendant's right to object to venue and jurisdiction. 2) Effect of Failure to Waive If the defendant does not waive service of process, the plaintiff must serve him using one of the methods described in 2., supra. However, a defendant who is located in the United States is liable for the cost of such service if he does not have good cause for failing to waive service. Rule 4(d) contains several provisions intended to give defendants an incentive to waive formal service. c. First, Rule 4(d) (1) creates a duty to avoid "unnecessary expenses of serving the summons" presumably by agreeing to waive service. d. Second, under Rule 4(d) (2) (B), the court must impose the costs of service on a defendant who refuses to waive service without good cause. e. Third, Rule 4(d)(3) offers defendants a tempting reward for waiving service: It gives them 60 days, rather than the usual 20, to respond to the complaint. For busy defense counsel, this carrot may be more persuasive than the relatively mild threat of paying the costs of service if they refuse to waive it. 3. Corporation Under Rule 4(h) (1), the available methods parallel the methods for service on individuals under Rule 4(e). f. Service may be made by delivery of a copy of the summons and complaint to an officer, managing or general agent of the defendant, or to an agent authorized to receive service of process. g. Alternatively, service may be made by one of the methods pre-scribed in Rule 4( e) (1), which includes service by a method prescribed by the law of the state where the federal court sits or by a method prescribed by the law of the state in which process is to be served on the defendant. (Presumably, however, this means a method prescribed by the state's law for service on a corporotioni;t does not make methods for service on indi- viduals under state law applicable to corporations.) 4. Parties Served Outside State The court will acquire personal jurisdiction over parties served outside the state:

123 a.Under statute and rules for extraterritorial service of the state in which the federal court sits (domicillaries, long arm jurisdiction, and in rem jurisdiction); b.If they are third-party defendants. [Fed. R. C!v. P. 14] or required to be joined for just adjudication [Fed. R. ClY.P.19], if served within 100 miles from the place where the summons was Issued (but within the United States); c. If out-of-state service is permitted by federal statute (e.g., interpleader); and d. For cases that involve a federal question, when a defendant is served with process (or waiver thereof), provided that the defendant is not subject to general jurisdiction in any state court, that the defendant has sufficient contacts with the United States to warrant the application of federal law, and that the exercise of jurisdiction is not prohibited by statute. 5. Parties Served in Foreign Country Unless a federal law provides differently, a court will acquire personal jurisdiction over a party served in a foreign country: a. As provided in an international agreement; b. In absence of an agreement, as provided by the foreign country's law or as directed by a foreign official in response to a letter of request (but the method must be reasonably calculated to provide notice); c. Unless it is prohibited by the foreign country's law, by personal service or by mail, signed return receipt requested. (However, a corporation may not be served by personal service, and a minor or incompetent person may not be served by either of these methods); or d. Any method the court orders (so long as the method is not prohibited by international agreement). 6. Immunity from Process The federal courts recognize the immunity from service of process of parties, witnesses, and attorneys who enter a state to appear in another action. In addition, if a party was induced by the plaintiff's fraud or deceit to enter a state so that he could be served, the service is invalid and the court does not acquire personal jurisdiction. 7. Challenging Service of Process A challenge to service of process (a motion to dismiss for insufficiency of service of process under Fed. R. Civ. P. 12 (b) (5)) attacks the adequacy of the method used by the plaintiff to give the defendant notice of the action (the subject of this chapter), not the power of the court to exercise personal jurisdiction over him, which would be raised by a motion to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12 (b) (2). Example: Suppose that Drayton is injured when Lovelace, a vacationing Marylander, hits him on the street in Salt Lake City, Utah. He sues Lovelace in Utah and serves process on Lovelace by publishing notice of the suit in a Salt Lake City newspaper. On these facts, the Utah court would have the constitutional power to exercise personal jurisdiction over Lovelace, based on the in-state contact of causing tortious injury in the state. However, service would be improper, since in most cases publication is not a constitutionally adequate means of

124 informing a defendant that he has been sued. In this example, a Rule 12(b) (2) motion would not be granted, but a Rule 12(b)(5) motion would. Securing the Judgment In support: affidavits, role of judicial approval, availability of post-judgment relief, whether the property attached is necessary (see Fuentes) and other considerations that need to be accomplished by the order (what is the underlying purpose of the order?) Rule 64. Seizure of Person or Property At the commencement of and during the course of an action, all remedies providing for seizure of person or property for the purpose of securing satisfaction of the judgment ultimately to be entered in the action are available under the circumstances and in the manner provided by the law of the state in which the district court is held, existing at the time the remedy is sought, subject to the following qualifications: (1) any existing statute of the United States governs to the extent to which it is applicable; (2) the action in which any of the foregoing remedies is used shall be commenced and prosecuted or, if removed from a state court, shall be prosecuted after removal, pursuant to these rules. The remedies thus available include arrest, attachment, garnishment, replevin, sequestration, and other corresponding or equivalent remedies, however designated and regardless of whether by state procedure the remedy is ancillary to an action or must be obtained by an independent action.

Applicability of State Law: Rule 64 indicates that the remedies for securing the judgment are to be limited to those available under the circumstances in the manner provided by the law of the state in which the district court is held , subject to two qualifications (an existing federal statute and effects of removal). Common Forms: Attachment Order: An order, which can involve literally seizing the defendants property (through sequestration) or placing it under a receiver. Sequestration: The process by which property is removed from the possessor pending the outcome of a dispute in which two or more parties contend for it. Process is performed by a public official, such as a sheriff, who either takes defendants private property to a neutral location or order a bank or employer to cut off access to funds or wages. Other Definitions: Lien: A legal right or interest that a creditor has in another's property, until a debt or duty that it secures is satisfied. Typically, the creditor does not take possession of the property on which the lien has been obtained. Garnishment: A judicial proceeding in which a creditor (or potential creditor) asks the court to order a third party who is indebted to or is bailee for the debtor to turn over to the creditor any of the debtor's property (such as wages or bank accounts) held by that third party. Notice of lis pendens: A notice, recorded in the chain of title to real property, required or permitted in some jurisdictions to warn all persons that certain property is the subject matter of litigation, and that any interests acquired during the pendency of the suit are subject to its outcome. Replevin: An action for the repossession of personal property wrongfully taken or detained by the defendant, whereby the plaintiff gives security for and holds the property until the court decides who owns it.

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Dual Purposes of Securing the Judgment: On the one hand, plaintiffs are assured that the defendants resources will be available if they win. On the other hand, it puts intense pressure on the defendant to settle, regardless of the merits of the case. Effect of the Due Process Revolution of the 1960s: Due process guarantees apply to prejudgment contexts. Insufficient procedural protections had been in place at the time. Fuentes v. Shevin (US 1972) (Justice Stewart)(p.86): Facts: Fuentes purchased goods, Firestone retained title, dispute over servicing the stove arose, Firestone instituted an action and obtained a writ of replevin ordering the sheriff to seize the goods. In accordance with Florida procedure, Firestone only had to fill in the blanks on a form and post a bond. Florida law relied on the bare assertion of the party seeking the writ. Fuentes was denied notice and any opportunity to respond. Under the law, the defendant had 3 days to reclaim the property by posting a security bond. Florida procedure required an eventual hearing on the merits, but a similar Pennsylvania law did not require the party to initiate an action (making it a mechanism for abuse). Constitutional Issue: Pre-seizure Evidentiary Hearing: Are the laws constitutionally defective in failing to provide for hearings in a meaningful time? Neither statute provided for notice or the opportunity to be heard prior to the seizure. The Right to be Heard: The constitutional right to be heard is a basic aspect of the duty to follow a fair process of decision making when it acts to deprive a person of his possessions. The purpose of this requirement is to protect his use and possession from arbitrary encroachment to minimize substantively unfair or mistaken deprivations of property Necessity of the Item: Important to the decision was that the stove taken was needed by a poor person. Analysis: Does this fall within the 14th Amendment? Property: The Court reads the concept of property broadly to extend to any significant property interest, thereby circumventing the problem that Fuentes did not actually have title of the property in question. Deprivation: a temporary, nonfinal deprivation of property is nevertheless a depriviation within the terms of the Fourteenth Amendment. 3 Extraordinary Situations where Notice and Opportunity are Not Necessary (Dictum): Discuss HOW these situations are or are not present When the seizure is necessary to secure a governmental or public interest. (discuss, what is the gov or public interest in this case?) When there is a special need for prompt action. When it involves the states monopoly over legitimate force. Why isnt the bond put up by the person seeking a preliminary injunction sufficient?

In Mitchell v. W.T. Grant Co. (Mitchell) (US 1974)(p.91), the Court upheld a sequestration procedure as adequate because it required a verified petition giving specific facts and required judicial involvement and control.

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In North Georgia Finishing Inc. v. Di-Chem, Inc. (Di-Chem) (US 1975)(p.92), the Court rejected a garnishment procedure due to a lack of notice or opportunity for hearing, lack of participation of judicial officer, and the absence if a requirement of a showing of probable cause. In Connecticut v. Doehr (US 1991)(p. 92), a unanimous Supreme Court ruled that without a showing of extraordinary circumstances, a prejudgment attachment of real estate without notice or hearing was unconstitutional.

Extension to the Fifth Amendment: In US v. James Daniel Good Real Property (US, 1993), absent extraordinary circumstances, the Fifth Amendments due process clause required notice and a meaningful opportunity to be heard before seizing property.

Interlocutory Injunctionsand Restraining Orders An interlocutory injunction is an equitable remedy by which a person is ordered to act or to refrain from acting in a specified manner. Interlocutory injunctions are granted to maintain the status quo until a trial on the merits may be held. 1. Preliminary Injunction A preliminary injunction is sought by a party prior to a trial on the merits of the complaint. A preliminary injunction may NOT be issued without notice to the adverse party. [Fed. R. Civ. P. 65(a)] Standard for Issuing a Preliminary Injunction: Whether the Plaintiff Will be Irreparably Harmed if the Injunction is Denied: Irreparable in this context signifies only that the harm cannot be repaired by monetary damages. The Irreparable Harm the Plaintiff Would suffer Outweighs the Irreparable Harm the Defendant would Suffer from Granting an Injunction Erroneously : The dilemma that a court is in when it grants a preliminary injunction is that it simply does not know how the case will turn out on the merits. Plaintiffs Likelihood of Success on the Merits. The Injunction Would Not Disserve the Public Interest. . US v. Hall (5th Cir. 1972)(Circuit Judge Wisdom)(p.16): Introduces a central theme of the course: the law imposes limitation on the power of courts. a. Ex Parte Injunction Said: Anyone having notice who violates the terms shall be subject to arrest, prosecution and punishment. i. The Court ordered the sheriff to serve copies on seven named persons, including Eric Hall. The doctrinal issue is contempt power the question of whether a court has power to hold a non-party in contempt. b. Rule 65(d) and Injunctive Relief: Hall argues that FRCP 65(d) limits whom injunctive orders may bind c. Holding: Judge Wisdom >> courts must have the power to issue orders tailored to the situation and directed to protecting the courts judgment. Wisdom suggests that Rule 65(d) was a codification rather than a limitation of courts common -law powers, FRCP cannot be read to restrict the inherent power of a court to protect its ability to render and binding judgment. i. Wisdom characterizes injunction as TRO rather than injunction; prelim. injunct. would have required notice and an opportunity to be heard

127 American Hospital Supply Corp. v. Hospital Product LTD. Posner offers a simple formula: Grant the motion if: a. (Harm to P of denial) x (Probability that denial is an error) > (Harm to D of granting) x (Probability that granting the motion is an error) b. Adapted from Learned Hands formula from US. V. Carroll Towing Co. for the context of preliminary injunctions i. Must Consider Broader Harm: D is insolvent, and the injunction may drive D into bankruptcy. A preliminary injunction that will or may precipitate a firm into bankruptcy is therefore a source of costs which ought to be considered 1. When considering harm to defendants, consider not only immediate harm, but also the broader harm of granting the injunction 2. Posner broadens the consideration of harm but ultimately concludes bankruptcy not enough to stop the injunction ii. Standard of Review: Posner suggests role of appellate courts is primarily to determine if the trial judge has exceeded his discretion. iii. Dissenting Opinion (Judge Swygert): Objects to the quantitative straitjacket proposed by Posner, believing such a task is impossible. The test must be flexible and discretionary. 2. Temporary Restraining Order A temporary restraining order ("TRO") is granted by a court when it is necessary to prevent irreparable injury to a party, and the injury will result before a preliminary injunction hearing can be held. Requirements for Ex Parte Temporary Restraining Orders Generally, notice of the hearing for the issuance of the TRO must be given before a TRO is issued. However, a court may grant a TRO without notice of the hearing to the adverse party if three requirements are met [Fed. R. Civ. P. 65(b), (c)]:

i. Specific Facts Showing Immediate and Irreparable Injury The moving party must give specific facts in an affidavit or in the verified complaint to establish that immediate and irreparable injury will result to the moving party before the adverse party can be heard in opposition. ii. Efforts to Give Notice The moving party must certify in writing all efforts she made to give notice of the hearing to the adverse party and the reasons why notice should not be required. 1. Notice of Hearing vs. Actual Notice Although a TRO may be issued without notice of the hearing, due process requires that a person must receive actual notice (through service of process or otherwise) of the TRO (or any other injunction for that matter) before he may be held in contempt for violating it. [See Fed. R. Civ. P. 65(d)] 2. The other party may appear and move for dissolution or modification. Must give party who obtained the TRO 2 days notice. c. Discretion of Court Even if the above requirements are met, the court still has discretion whether to issue the TRO. The court may look at the likelihood that the plaintiff will prevail on the merits of the

128 complaint. Also, the court may weigh the injury anticipated by the moving party against the harm caused by issuing the TRO. d. Time Limit The TRO will expire within 14 days unless the restrained party consents to an extension or good cause is shown for an extension. 3. Security The moving party must provide some security, the amount of which is determined by the court, to pay for any costs and damages incurred by the adverse party if he was wrongfully enjoined or restrained. The United States, its officers, and its agencies are not required to give security. 4. Form and Scope of Injunction or Restraining Order. (1) Must: (A) set forth reasons for issuance, (B) be specific in terms; (C) and not by reference to the complaint or other document, the act or acts sought to be restrained; (2) and is binding upon (A) the parties, (B) their officers, agents, servants, employees, and attorneys, and (C) persons in active concert or participation with any of them Real Party in Interest Rule 17(a)(1): An action must be prosecuted in the name of the real party in interest. Plaintiffs who can sue in their own names without joining beneficiaries: (A) an executor; (B) an administrator; (C) a guardian; (D) a bailee; (E) a trustee of an express trust; (F) a party with whom or in whose name a K has been made for anothers benefit; and (G) a party authorized by statute Rule 17(a)(3): Joinder of the Real Party in Interest: The court may not dismiss action for failure to prosecute in the name of the real party in interest until, after objection, a reasonable time has passed for the real party in interest to ratify, join, or be substituted in the action. DM II, Ltd. v. Hospital Corporation of America (N.D. Ga. 1989) (pg. 231) o Claim that one entity in partnership breached fiduciary duties by founding a competing hospital; D seek dismissal b/c Ps failed to prosecute in the name of the real party in interest b/c needed to join all members of partnership o Court decides that under applicable GA law, the action has fulfilled Rule 17(a) bc claims belong to each partner and may be asserted individually or jointly o Breach of fiduciary duties akin to conversion, which is covered under the applicable Georgia partnership statute right of action vested in each individual partner o Significance

129 o P chooses D if theory of liability is incorrect, complaint will be dismissed o Rule 17 analogous standing, person that has real interest is responsible for bringing claim cant bring suit for anothers benefit Anonymous Plaintiffs Rule 10(a): Title of complaint must name all parties (D and P) Doe v. United States Services Life Insurance (S.D.N.Y. 1988) (pg. 233) o Exception to general rule of party identification where anonymity is necessary to protect privacy in very private matter/prevent social stigma P alleging discrimination bc D thought he was homosexual P wants to file as John Doe to protect his privacy / prevent social stigma and seal court records with his actual name and personal information; D moves to dismiss for failure to identify P under Rule 10(a) court allows P to file anonymously o Court should not allow anonymous filing to protect parties professional or economic life not the case here; P concerned about being identified as homosexual, not about how that will affect his work life o D not disadvantaged by anonymous filing bc D knows Ps identity and is only barred from publicizing that information, not barred from discovery o Legal rules Free Market lawsuits are generally public knowledge and public has a legitimate interest in knowing the facts Under special circumstances, names can be withheld to protect privacy in a very private matter Doe v. Weinberger homosexuality is a legitimate privacy concern, especially considering AIDS stigma Other instances when a party may file as Doe: if in physical danger; proceedings involving minors; risk of social stigma / private matters (ex: transsexuality, mental illness, abortion, birth control) Extension of Time Periods Rule 6(b) gives the district court power to extend the period within which actions under the Federal Rules must be performed. However, certain time periods may never be extended. The following motions must be filed, with no extensions, within 28 days after entry of judgment: 1) a renewed motion for judgment as a matter of law, 2) a motion to amend judgment, a motion for a new trial, 3) a motion to amend findings of fact in a nonjury case, and 4) a grant of a new trial on the court's initiative.

The Response
Preliminary Motions Takeaway file all Rule 12 motions at once to avoid unintentional waivers

130 Prior to filing an answer, the defendant may, if he chooses, file a motion and raise any or all of the following Rule 12(b) defenses: (1) Lack of subject matter jurisdiction (FAVORED); (2) Lack of personal jurisdiction (DISFAVORED USE OR LOSE); (3) Improper venue (DISFAVORED USE OR LOSE); (4) Insufficient process (DISFAVORED USE OR LOSE); (5) Insufficient service of process (manner in which complaint was served, DISFAVORED USE OR LOSE); (6) Failure to state a claim upon which relief can be granted (i.e., even if plaintiff's allegations are taken as true, relief could not be granted)(FAVORED); or It may be filed at any time in the proceedings, even at trial. A 12(b)(6) motion alleges that based on the facts alleged in the complaint, there is no legal theory under which plaintiff can obtain relief. The motion is granted if there are not enough facts to state a claim to relief that is plausible on its face. Plaintiffs must nudge their claims across the line from conceivable to plausible or their complaint must be dismissed." Bell Atlantic v. Twombly. If granted, the complaint is typically dismissed without prejudice so that the plaintiff can amend it. Can be used if statute of limitations has run (7) Failure to join a party needed for a just adjudication (includes necessary and indispensable parties FAVORED).

Waiver The first defense may be raised at any time-even for the first time on appeal. The defendant must raise defenses (ii) through (v) at the time he files a motion or his answer-whichever is first (D should be aware of these defects at time the complaint is served or shortly thereafter). If he does not make these motions, the defendant waives these defenses. The last two defenses (if limited to failure to join an "indispensable party") can be made at any time prior to trial or "at trial." Motion Strategy The defendant may choose not to file a motion and instead raise these defenses in his answer. A defendant who moves to dismiss under Rule 12 (b) need not answer the complaint until after the motion is decided. See Rule 12 (a) (4). If she prevails on the motion, she may never have to answer. This can be a strong tactical advantage since filing an answer may require the defendant to admit damaging allegations in the complaint or undertake substantial factual investigation AND it allows court o avoid needless litigation by flushing out procedural problems. Motion for Judgment on the Pleadings Similar to 12(b)(6), except after service of all the pleadings in a case, either side may seek judgment on the pleadings under FRCP 12(c). Upon submission of materials in addition to the pleadings, the motion becomes one for summary judgment. Rule 12(d): If on motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented and not excluded by court, then motion is treated as one for summary judgment under Rule 56. All parties must be given reasonable opportunity to present all materials pertinent to the motion. Motion for More Definite Statement

131 A party may move for a more definite statement before responding (by filing an answer or reply) to a pleading (a complaint) that is so vague or ambiguous that a responsive pleading cannot reasonably be framed. The opposing party has 14 days after notice of an order to obey unless the court fixes a different time. If not obeyed, the court may strike the pleading or issue any other appropriate order . [Fed. R. Civ. P.12(e)] Motion to Strike Before responding to a pleading or, if no responsive pleading is permitted, within 21 days after service of the pleading, a party may move to have stricken any insufficient defense, or any redundant, immaterial, impertinent, or scandalous matter. Such motion may also be made upon the court's initiative at any time. [Fed. R. Civ. P. 12(f)] Bower v. Weisman (SDNY 1986) Issues Is a complaint deficient when it: o Fails to clearly identify which defendant it refers to in a case involving multiple Ds; o Only generally states that D intentionally misrepresented and defrauded without mentioning sufficient facts; or o Fails to set forth facts to support a claim? Facts contracts case P and D had a 15 yr. romantic and business relationship that they terminated P provided valuable business and social assistance to D and D agreed to provide P with economic interest in his affairs and support P and her daughter P claims that D agreed to continue these benefits so long as P remained in U.S. and did not remarry; however, D breached oral and written promises o D attempted to force P from her home Ps claims: o Torts and contracts damages arising from breach of agreement o Fraud, misrepresentations, and deceit in connection with the agreement o Conversion attempt to remove P from her house and repossess her rightful property o Two counts of trespass and false imprisonment in connection with stationing armed guards at the house o Two counts of intentional inflection of emotional distress and private nuisance Ds motions o Rule 12(e) motion for more definite statement of facts b/c: P failed to disclose specific details about the supposed written agreements and which parts have been modified P failed to identify which defendant is charged with each claim, referring to all as defendant o Motion to dismiss for failure to state fraud with particularity o Motion to dismiss for failure to state a cause of action Holding Rule 12(e) motion granted based on second reason o Legal rules: may be granted if a pleading is so vague and ambiguous that the opposing party cannot reasonably be expected to be able to frame a response Boothe: motion shouldnt be granted unless pleading is so unintelligible that it reasonably prejudic es other partys ability to respond

132 o Reasoning: complaint does cogently inform D of the claims against him by clearly identifying the offending acts However, complaint does not adequately define defendant in several paragraphs, so D cant respond adequately essence of a complaint is to inform D as to the cause of action and the incident it arose out of Motion to Dismiss granted vis--vis fraud second claim in complaint dismissed, refile in 30 days o Legal rules: Rule 9(b) requires that in all claims of fraud or mistake, complaint shall state facts pertaining to the fraud with specificity Tension with rule 8 liberal pleadings, the degree of specificity will be dependent on facts of the case Elster: a well-pleaded claim of fraud normally included the time, place, and content of the false representations, as well as nature of detrimental reliance o Reasoning: Complaint only makes sweeping claims of fraud and fails to clarify which alleged agreements for the basis for fraud claim Motion to Dismiss vis--vis cause of action o Generally disfavored and rarely granted Can save time and energy if appellate court has to review on appeal Gibson rule: only if no facts could support the claim, preference to allow rulings based on merits o Trespass MOD denied Legal rule: trespass is an action for injury to possession Rationale: P provided enough facts to allege that she owned the townhouse and that D was there w/o her consent and confiscated property o False imprisonment MOD granted w/o prejudice P must re-file w/in 20 days Legal rule: D intended to confine P, P was conscious of confinement, P did not consent to confinement, confinement was not otherwise privileged Reasoning: Complaint fails to set forth facts which would support the allegation that she was confined not plausible on its face Facts indicate that she was allowed entrance and exit and permitted unrestrained movement o Intentional infliction of emotional distress MOD denied Legal rule: extreme and outrageous act by D, intent to cause sever emotional distress, resulting sever emotional distress, causation by D Reasoning: Complaint provides enough facts to satisfy each element and that D embarked on course of conduct to intimidate P fact-finding should be left to jury o Private nuisance MOD granted, refile in 20 days Legal rule: substantial interference, intentional interference, unreasonable interference, interference with property rights, interference caused by a persons action or failure to act Reasoning: Complaint fail to establish that interference was substantial and unreasonable did not show that value of land was decreased by Ds actions

The Answer Answers contain four types of material: o Admissions and denials to Ps complaint (Rule 8(b)) o 12(b) Defenses o Affirmative defenses (ex: res judicata, collateral estoppel) (Rule 8(c))

133 o Counterclaims and cross-claims (Rule 13) Ds simultaneously consider at time of answer: o Impleader of third parties (Rule 14) or otherwise adding parties o Enlarge case through motion to consolidate (Rule 43(a)) or encourage another to intervene (Rule 24) o Reduce number of parties through motion for misjoinder (Rule 21) o Whether to claim a jury trial Rule 12(a): Time to Serve a Responsive Pleading o (1)(A): D must serve answer to complaint: (i) within 20 days of being served; or (ii) if waived (Rule 4(d)), then within 60 days after request for waiver was sent o (1)(B): 20 days to serve answer to counterclaim or crossclaim after being served with pleading o (2) For U.S. and its agencies, and employees sued in official capacity, 60 days to serve an answer to complaint, counterclaim, or crossclaim o (3) U.S. Employees sued individually get the same 60 days after service on individual or U.S. (whichever is later) if claim is in connection with their duties for the U.S. o (4) Effect of a Motion: Unless court sets different time, (A) If court denies or postpones decision to trial, responsive pleading must be served w/in 14 days after notice of courts action (B) If court grants motion for more definite statement, then responsive pleading must be served w/in 14 days after more definite statement is served Rule 8(b): Defenses; Admissions and Denials o In responsive pleading, party must: 8(b)(1)(A) state in short and plain terms its defenses to each claim against it; and 8(b)(1)(B) admit or deny the allegations o 8(b)(2) A denial must fairly respond to the substance of the allegation o 8(b)(3) A party who intends in good faith to deny all allegations may do so by a general denial. Otherwise, party must specify which are denied. o 8(b)(4) Specify which part of allegation is admitted and which part denied o 8(b)(5) Party that lacks knowledge/info to form belief about truth of allegation must so state, and statement has effect of a denial. If party denies under this rule, but does have knowledge/info, then court can treat it as admitted Does not apply for uncertainty o 8(b)(6) If responsive pleading required and allegation (other than amount of damages) is not denied then it is admitted Rule 8(c): Affirmative Defenses o Responsive pleading must raise any avoidance or affirmative defenses Ex: duress; self-defense; res judicata; statute of limitations; waiver o Generally, failure to raise affirmative defense results in waiver of it o Waiver is less clear when defense is not one of the 19 stated in Rule 8(c) (Proctor v. Fluor Enterprises, Inc.) (11th Cir. 2007) (pg. 245) REPLY (in response to an answer; only if the court orders one) o Rule 12(a)(1)(C): 20 days to serve reply to an answer after being served with order to reply, unless order specifies a different time

Must Contain Denials or Admissions and Any Affirmative Defenses

134 The answer must contain a specific denial or admission of each averment of the complaint, or a general denial with specific admissions to certain averments. Where the defendant is without knowledge or information sufficient to form a belief, a statement to that effect constitutes a denial. A failure to deny constitutes an admission. The answer must also state any affirmative defenses the defendant may have, such as statute of limitations, Statute of Frauds, res judicata, etc. Time Rule 12(a) If no Rule 12 motion is made, a defendant who was formally served with a summons and complaint must present an answer within 21 days after service; a defendant to whom the complaint was mailed and who waives formal service must answer within 60 days after the request for waiver was mailed to her. If a Rule 12 motion is made and the court does not fix another time, the responsive pleading is to be served within 14 days of the court's denial or postponement of the motion. The answer is due within 14 days of service of a more definite statement if the court grants a Rule 12(e) motion (see 2.b., supra.) The same timing rules apply to answers to counterclaims and cross-claims. Effect of Failure to Answer-Default and Default Judgment A default is simply a notation in the case file by the clerk that there has been no answer filed within the time permitted by the rules. A default judgment is a judgment, with the same effect as any other judgment, that is entered because the defendant did not oppose the case. 1) Default If a party against whom a judgment for relief is sought has failed to plead or otherwise defend, and that fact is made to appear by affidavit or otherwise, the clerk must enter the default of that party. Once the default has been entered, the party may not proceed with the action until the default has been set aside by the court. [Fed. R. Civ. P. 55] 2) Default Judgment A defendant against whom a default is entered loses the right to contest liability. However, the amount of damages must still be determined before a default judgment may be entered, and the defaulting party can be heard at the hearing for damages. A default judgment may be entered against a minor or incompetent person only if she has a personal representative who has appeared in the case. a)Default Judgment Entered by the Clerk On request of the plaintiff, supported by an affidavit as to the amount due, the clerk may sign and enter judgment for that amount and costs against the defendant if: (i) the plaintiff's claim against the defaulted defendant is fora sum certain; (ii) the default was entered because the defendant failed to appear; and (iii) the defaulted defendant is not an infant or incompetent person. [Fed. R. Civ. P. 55(b)(1)] 3) Setting Aside a Default or a Default Judgment An entry of default may be set aside for "good cause shown," or a default judgment may be set aside as provided in Rule 60 (b)(relief from judgments) 4) Notice Required

135 The clerk or the party must give notice to all parties who have appeared and to the defaulted party after the entry of a default. In addition, if the defendant has "appeared," even though he has not answered, he must be notified of the request for a default judgment by first-class mail at least seven days before the hearing on the application for a default judgment. Appearance includes any actual formal appearance before the court and any other action that clearly indicates that the defendant intends to contest the case on the merits (e.g., the defendant's continued settlement negotiations). [Fed. R. Civ. P. 55(b)(2)] Reply A reply by the plaintiff to the defendant's answer is required only if the court orders the plaintiff to file one. A plaintiff need not reply to an affirmative defense; he is deemed to deny or avoid the allegation of the defense. [Fed. R. Civ. P. 7, 12] Counterclaims and Crossclaims Discuss whether relates to transaction! Can only cross-claim and counter-claim against those ALREADY parties to the suit. Claims that the defendant may have against the plaintiff may be pleaded in the answer as counterclaims. If a counterclaim arises out of the same transaction or occurrence as one of the plaintiff's claims, it is a compulsory counterclaim and must be pleaded or it will be barred . Any other counterclaim is permissive and may be asserted even though there is no connection at all between it and the plaintiff's claim. (a) Counterclaims: A party may assert a counterclaim against one who previously asserted a claim against him or her. a. Compulsory Counterclaims: FRCP 13(a): Claim that arises out of the same transaction or occurrence as the subject matter of the opposing partys claim must be asserted in the present action or is forever barred, except for the following claims: Claims requiring joinder of parties over whom the court lacks personal jurisdiction, and in rem claims. i. Logical Relationship: Most federal courts interpret arises out of the transaction or occurrence that is the subject matter of the opposing partys claim as being logically related to the underlying claim. ii. Supplemental Jurisdiction: Compulsory counterclaims fall within the courts supplemental jurisdiction and thus require no showing of independent grounds for subject matter jurisdiction. b. Permissive Counterclaims: FRCP 13(b): Any claim against an opponent that does not arise out of the same transaction or occurrence as the opponents claim is permissive in nature. Failure to assert it does not bar its assertion in a subsequent litigation. Generally, permissive counterclaims fall outside the courts supplemental jurisdiction. 1) Four-part Inquiry for determining whether a counterclaim is permissive or compulsive (Banque Indosuez v. Trifinery (S.D.N.Y., 1993) (p. 277)): a. Are the issues of fact and law raised by the claim and counterclaim largely the same? b. Would res judicata bar a subsequent suit on defendants claims absent a compuls ory counterclaim? c. Will substantially the same evidence support or refute the claim and counterclaim? d. Is there any logical relationship between the claim and counterclaim?

136 (b) Cross-Claims: A party may assert a claim against a co-party arising out of the transaction or occurrence that is the subject matter of the original action, counterclaim, or related to property that is the subject matter of the original action. a. Permissive Nature: One may either plead a cross-claim or reserve it for further litigation; crossclaims are never compulsory under FRCP 13(g). Cross-claims are always permissive, consistent with the rationale that parties should not forced to be adverse. b. Supplemental Jurisdiction: Cross-claims are generally within federal courts supplemental jurisdiction. Inconsistent Claims or Defenses A party may set out as many alternative claims or defenses as he may have regardless of consistency. Podhorn v. Paragon Group, Inc. (DMO 1985) Issue Should Court grant Ds MTD based on Ps alleged failure to file compulsory counterclaim? Facts P were tenants at Ds apartment and filed a civil suit alleging, inter alia, false habitability D sued P in state court for rent due arose out of same tenancy that gave rise to the cause of action o State Court ruled for D o P did not file a counterclaim in state court alleging the same wrongdoing that they did in federal court Legal rules Missouri Rule o A party must file a counterclaim it has against the other party at the time of the SOP if it arises out of the same transaction Holding Yes Case dismissed, P was obligated to have filed counterclaim in state court even though the judge could not hear the motion Reasoning Ps claim arose out of the same transaction that gave rise to Ds rent claim o P failed to file counterclaim in state court so their claim cannot be heard now by a federal court o Even though the court could not have heard Ps claim b/c it exceeded $5,000, they still had to file it under the procedural rules judge would have certified it to a competent court

137

138

Amendment and Supplemental Pleadings

Amendment Given human nature, the intense focus of many litigators is not on embryonic cases that are at the pleading stage, but mature ones that are about to go to trial.When the parties do get into the details, through postpleading factual investigation, discovery, preparation of expert witnesses, and legal research on theories of claim and defense, their understanding of their positions may change. They may, in light of their evolving understanding of the case wish to add or change the legal theories in their pleadings. The merits should rule the pleadings, rather than the pleadings constraining the merits. "The thrust of Rule 15 is ... that cases should be tried on their merits rather than the technicalities of pleadings." General Elec. Co. v. Sargen&t Lundy,916 F.2d 1119, 1130 (6th Cir. 1990). Otherwise, in the words of one critic of common law procedural techuicality, "substance [would be] secreted in the interstices of procedure." As a matter of course, a pleading may be amended once within 21 days of serving it or, if the pleading is one to which a responsive pleading is required, 21 days after service of a responsive pleading or a pre-answer motion. Thereafter, a pleading may be amended only by the written consent of the adverse party or by leave of the court upon motion. Leave of the court is "freely given when justice so requires." [Fed. R. Civ. P. 15] At least early in the litigation, there is a presumption in favor of allowing amendments, unless the opposing party provides a substantial reason for denying them. However, if an amendment is sought later in the process, the argument for denial becomes considerably stronger (P should have know of certain claims -- last-minute motion smacks of manipulation - a strategic move to spring a new claim on D at the last minute.) 1) Courts will also deny amendments that assert legally insufficient claims, for example, where the added claim fails to state a claim upon which relief could be granted, or would be barred by the statute of limitations. 2) Amendments may also be denied where there is clear prejudice to the opposing party, due to delay or loss of evidence, or 3) Where the judge has reason to conclude that the party seeking to change the pleading has acted in bad faith, for example, by waiting to add the claim until it will be difficult for the opposing party to hire an expert or prepare to try the issue. 4) Fourth, a judge will consider whether the party has already had opportunities to amend and failed to add an available claim or defense in an earlier amendment. Relation Back 20. When Justice Amendments relate backSo toRequires the date that the original pleading was filed if the conduct, transaction, or occurrence set forth in the amendment was set forth or attempted to be set forth in the original pleading. Amendments also relate back ifclaim relation back isFigure permitted byillustrates the law that fraud claim as a second for relief. 20-1 theprovides sequencethe statute of limitations applicable to the action. [Fed. R. Civ. P. 15(c)] of events.
April3, 2002
I

April1,2005
I

April3, 2005
I

August 9, 2005
I Ernie amends to add fraud theory of
recovery

Sale of
stock

Erniefiles
suit for K breach

Statute of limitations passes

t_--+(

~(E--_t

Amendment relates back to original filing

2. Suppose that Ernie moved to amend his complaint to add the fraud theory, and the judge denied the amendment. Consequently, Ernie flied a separate suit against Violet, on November 14, 2005, asserting a right to recover for the sale of stock on a fraud theory. How would Violet respond, and what would the judge do?

139

This is basically what Rule 15(c)(1)(B) allows. It provides that, once you have sued the defendant for particular conduct, or a certain transaction or occurrence, any amendment to add new claims based on the same conduct, transaction or occurrence will be treated, for statute of limitations purposes, as though it had been in THE REAL KICKER: RELATION BACK OF the original complaint.

AMENDMENTS AGAINST NEW PARTIES

Changing Party Rule changing 15(c)(I)(B) when an of amendment add awhom new claim An amendment the determines party or the naming the party to against a claim is asserted relates back if "relates back" to the date of the original action. Rule 15(c)(I)(C) deterthe amendment concerns the same conduct, transaction, or occurrence as the original pleading and if, within mines when an amendment that adds a new partyto a suit will relate back to 120 days after filing the complaint (and such additional time as the court may order upon showing of good the mtnal.flling, that is, when the amendment will be treated as though it cause), the party to be brought in by amendment:

was filed on the date of the original complaint. Suppose that Clarence sues potter in January 2005 for a breach of (i) Hascontract received such notice of action2002. that she will not prejudiced in maintaining her defense on the that took place inthe February Assume that be Crevins, a business merits; and associate of Potter's, had warned Potter not to do business with Clarence, leading to the breach. In September 2005, Clarence learns of this and (ii) Knew or should have known but defendant, for a mistake concerning the proper decides to add Crevins as that, a second claiming that Crevins in- party's identity, the action with his would tentionally have been interfered brought against her.contract with Potter. (Assume that the statute of15(c)(I)(C)] limitations is three years for both claims.) If Clarence sued [Fed. R. Civ. P. Crevins in a separate action, Crevins would plead the limitations period as a defense get the case dismissed. Can knowledge he instead move to party add Crevins The Supreme Court and has emphasized that it is the of the to beas brought in by amendment an additional defendant to his suit against Potter, and have it "relate back" (not of the plaintiff) that is relevant. [Krupski v. Costa Croci ere S.p.A., 130 S. Ct. 2485 (2010)] to the date of filing of that suit? Here's the scenario: Feb.1,2002
Jan. 10,2005

Feb.1,2005

Sept.19,2005

Events giving rise to claim

Clarence
sues potter

Three-year limitations
period passes on claim v. Crevins

Clarence amends to add claim v. Crevins to his suit v. Potter

+_<---( __
Figure 20-2.

~_t

Clarence argues that claim against Crevins "relates back"to January 10,2005

391 Conform to Evidence A pleading may be amended during or after trial, or even after judgment, to conform to the evidence, reflect an issue actually tried by the express or implied consent of the parties, or permit the raising of new issues at trial. However, a party may not raise a new claim or defense for which the opposing party had no opportunity to prepare and which would result in prejudice in maintaining his action or defense. [Fed. R. Civ. P. 15(b)]

Due Process Limitation Amendments to pleadings must satisfy due process. For example, in Nelson v. Adams U.S.A. Inc., 529 U.S. 460 (2000), the trial court permitted a post-verdict amendment to add a defendant, and simultaneously entered judgment againstthat new defendant. The Supreme Court held that this procedure violated the new defendant's due process rights. The Federal Rules are meant to provide an opportunity for an added defendant to respond to a claim, and do not permit such "swift passage from pleading to judgment in the pleader's favor."

140 Supplemental Pleadings Supplemental pleadings relate to matters occurring after the date of the original pleading. The permission of the court, upon motion, is required. Permission may be granted even though the original pleading is defective in its statement of a claim for relief or defense FRCP 15(d) Rule Summary From less difficult to more difficult to get: a. Rule 15(a): Amendments Before Trial iii. Rule 15(a)(1): Amending as a Matter of Course (one freebie) 1. Party may file as a matter of course (A) Before being served with a responsive pleading [max: 20 days after service, or 60 days if service waived]1; or (B) If responsive pleading not allowed, and trial date not yet scheduled, then within 20 days after serving the pleading iv. Rule 15(a)(2): Other Amendments: If not as a matter of course, then party may amend only with opposing partys written consent or the courts leave (should be given when justice so requires) 1. Court might NOT grant leave to amend a pleading: a. Party has unreasonable delayed raising the issue b. Opposing party has been prejudiced in preparation of the case by the delay c. Party raises the issue in bad faith i. Ex: to cloud the real issues; confuse fact finder; make the other side look bad on a largely irrelevant question d. The new issue is futile so party cant win on it i. May be weak or a legally insufficient claim e. Generally: Amendment becomes more difficult as the case moves closer to trial bc amendment might require opponent to do more discovery v. Rule 15(a)(3): Time to Respond: Required response to amended pleading must be made by original due date, or within 10 days after service of amended pleading (whichever is longer) b. Rule 15(b): Amendments During and After Trial vi. Rule 15(b)(1): Based on an Objection at Trial, when party objects that evidence is not within the issues raised in the pleadings 1. The court should permit amendment when doing so will: a. Aid in presenting the merits, and b. Objecting party fails to persuade that evidence will be prejudicial to its action or defense on the merits 2. Court may grant continuance so objecting party can meet evidence vii. Rule 15(b)(2): For Issues Tried by Consent, but not raised in the pleadings, it is treated as if raised in the pleadings

No need to use one freebie in time in between filing with court and serving complaint to D (you can just withdraw first complaint and re-file unless the action would then be barred under the statute of limitations)

141 1. Strategy: Best to object when opponent raises matter beyond the pleadings, or else lack of objection may be taken to mean implied consent issue is now justiciable 2. The key to treating issues as litigated by consent is that the course of the litigation clearly put all parties on notice that the issue was asserted as a basis for recovery or defense. If that is true, the Rule favors allowing the case to turn on the issue. But if it is not clear that the issue was really being contested at trial, treating it as though it was would prejudice the party who did not clearly understand that the unpIeaded issue was in the case. c. Rule 15(c): Relation Back of Amendments when statute of limitations has expired; amendment relates back to date or original pleading when: viii. 15(c)(1)(A): Law that provides the statute of limitations allows it ix. 15(c)(1)(B): Claim / defense arose out of the same conduct, transaction, or occurrence set out in the original pleading; or 1. Arguments for same transaction or occurrence: a. Overlap of facts or evidence (ex: witnesses) b. Claims are logically related x. 15(c)(1)(C): Addition of parties; the most stringent test: must: 1. Satisfy 15(a)(2): Justice so requires 2. Satisfy 15(c)(1)(B): Transaction or Occurrence test 3. Within 120 days (Rule 4(m))2, the added party: a. 15(c)(1)(C)(i) Received notice of the action, so party wont be prejudiced in defense; and i. Theories to meet notice: Singletary v. PA Dept. of Corrections (3d Cir. 2001) (pg. 250): P suing state personnel for tort and civil rights claims re incarcerated sons suicide; named Unknown Corrections Officers; wants to add psychologist 1. Identity of Interest (same nexus of interest) a. Singletary: D wasnt high up enough (no administrative duties) to have same nexus of interest with employer 2. Shared Attorney (within 120 day period) a. Singletary: Atty did not become atty of Ds during the 120-day period; atty must also actually represent D ii. Issue of prejudice 1. Christopher v. Duffy (Mass. App. Ct. 1990) (pg. 259): Six yrs after cause of action arose, major witness is dead, new parties require extensive discovery and would be unduly prejudiced due to time passage b. 15(c)(1)(C)(ii) Knew or should have known the action wouldve been brought against it, but for a mistake re partys identity i. Courts are split re whether not knowing the identity of D counts as a mistake (Singletary)

If court allows extension of service of process, then that amount of time will be reflected here

142 d. Rule 15(d): Supplemental Pleadings. On motion and reasonable notice, the court may permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented. xi. The court may permit this even though original pleading is defective in stating a claim or defense (new material may cure the defect) xii. Court may order opposing party to plead to supplemental pleading within specified time. xiii. If new claim poses statute of limitations problem, then party will have to relate back amendment under Rule 15(c) Cases Singletary v. PA Dept. of Corrections (3d Cir. 2001) Issue o After the SOL has run, can a new party be added to a suit under the relation back doctrine if it wasnt notified of the original action w/in 120 days after that complaint was filed? Facts o P is mother on an inmate incarcerated in Ds jail who committed suicide while under a course of therapy conducted by Robert Regan and Kevin Burke Originally filed suit in EDPA improper venue, removed to MDPA where defendants live Procedural history o Trial court granted Ds MSJ dismissing 41 USC 1983 civil rights claims against the PADOC and SCI-Rockview (prison where son was incarcerated) and Mazurkiewicz, prison superintendent P appealed MSJ dismissing claim against super o P also sought to add Reagan to the complaint after litigation had begun and SOL had expired almost two years prior Her other claims had foundered, and she disdovered Regans involvement during discovery after he was deposed P tried to have the amendment relate back to the original complaint to overcome SOL defense, but trial court ruled that it failed to meet the notice requirement under 15(c)(A) P appealed Legal rules o Standard of review of decision regarding Rule 15(c) motion clear error o Rule 15(c)(3) 3 conditions must be met Claim must have arisen out of the conduct, transaction, or occurrence set forth in the original pleading P and D agreed to this New party must receive notice of the claim within 120 days (Rule 4(m)) after the complaint was filed AND new party will not be prejudiced in maintaining defense on the merits Varlack Actual SOP not needed, new D must merely hear of the action through any means must be notice of the actual LITIGATION, not merely background events New party knew or should have known about the action w/in the 120 day period absent Ps mistake in properly identifying D Holding o Court upheld MSJ against super

143 Plainly no evidence establishing that he recklessly neglected to give son medical attention or showed deliberate indifference o Court affirmed trial court decision prohibiting addition of Regan Case therefore had no merit and could not proceed Reasoning o Regan did not receive notice of the action w/in 120 days after the complaint was filed P acknowledges that D did not receive actual, formal notice, but argues that he received constructive notice knowledge of a fact that is imputed to an individual who is under a duty to inquire or who should have learned of fact through reasonable prudence Regan shared attorney w/another D attorney should have informed him of the action o Long standing practice upheld by courts o P asserts that Ds attorney must have interviewed Regan as part of investigation into the event notice provided; that Ds attorney defended Regan at deposition o HOWEVER, attorney who represent D and Regan did not become involved in original litigation until after the 120 day threshold Identity of interest Regan shared identity of interest w/D o Parties are so closely related in their business operations that institution of an action against one serves to provide notice of litigation against the other o SCOTUS and other court have held that this is a sufficient standard to provide notice under 15(c)(3) o HOWEVER, Regans positions as a staff counselor did not give him any administrative duties, his interests diverged from the prisons no way for him to know of the litigation o Rule 15(c)(3)(B) not met D argued that P did not make mistake as to Regans identity and that complaint named corrections officers, not psychologists Regan would have had no way of knowing about the litigation Would he have been more cognizant of this possibility if it were a medical malpractice instead of a civil rights suit? Although Varlack allows P to amend John Doe complaints to include Ds real name and still fall w/in Rule 12 criteria, it is debatable whether the standard would apply to this case b/c of corrections officer language o Court ultimately doesnt decide this issue b/c P failed under Rule 12 tests suggest that Rules Committee change the rule due to confused interpretation

Christopher v. Duffy (MA 1990) Issue o Should new parties, previously unconnected with a case, be added to complaint after SOL has run under the relation back doctrine? Facts o P family was exposed to lead poisoning in apt., D was hired to de-lead their apartment P alleges that D was negligent and actually increased risk of lead poisoning P daughter died of infection while in hospital due to diminished immune system resulting from lead exposure o P sued D, owner, and former owner of apt. complex

144 Owner and former owner settled, D dies at a later point o After settlement, P sought to amend complaint to add 5 companies that manufactured lead paint, as well as their trade association wanted to relate back to original complaint New theories of liability: Alleged negligence, breach of warranty, and conspiracy Procedural history o Judge denied amendment mainly on basis that new Ds would be prejudiced in their ability to defend against claims Interlocutory appeal appeal on a collateral issue that is important enough to be decided by itself (may be dispositive), but not central to the issues of the case decided before final judgment on the merits of the case Legal rules o Castellucci amendment should be allowed unless there is a good reason to deny it Ordinarily, allowing new parties w/new liability theory and claims would be allowed w/relation back unless theres a good reason not to It is duty of a court to exercise its discretion to determine what a good reason is Holding o No, affirmed New parties previously unconnected with a case should not be added to a suit after the SOL under the relation back doctrine has run if they would be unduly prejudiced by addition Reasoning o New Ds were served six years after original event Discovery burden to prove or disprove causal links after this much time has passed would be too great D has died Unlikely that new Ds were of litigation or had reason to believe that they would become defendants Judge did not abuse discretion Tolling SOL o Parties can sign an agreement to toll the SOL while they negotiate a settlement

Krupski v. Costa Crociere S.P.A (SCOTUS 2010) Issue If P should have or did know Ds true identity when complaint was filed, can she can add him to the litigation later under the relation back doctrine? Facts P tripped over a cable on a cruise ship and filed suit against D, the cruise company, after returning home o Her ticket stipulated that to hold D liable for an injury, Pm must: Submit written notice of the claim to D w/in 185 days after the injury; File a lawsuit w/in 1 yr. after date of injury; Serve D w/in 120 days following filing of the complaint SDFL specified as forum for federal suit P notified Costa Cruise Lines, subsidiary of D, 4 months after injury o Parties couldnt reach a settlement, so P filed a lawsuit 3 weeks before expiration of 1 yr. deadline and served D 3 days later Prima facie negligence case o P suffered injury

145 o D had a duty of care to keep environment safe b/c P was an invitee o D breached duty o Breach caused injury After SOL expired, Costa Cruise lines mentioned to P 3 times that it was owned by a parent Italian company Procedural history Costa Cruises filed MSJ stating that it wasnt the proper D o P argued that a variety of factors led her to believe that CC was the proper D, asked for limited discovery o P moved to add D under relation back doctrine Rule 15(c) SDFL denied MSJ w/o prejudice and allowed P to amend provided that P serve D 2 months D moved to dismiss under Rule 15 untimely amendment SDFL granted o 3 conditions: Claim against new D must have arisen out of original conduct Yes Claim must have been notified of claim w/in 120 days after complaint was filed and not unfairly prejudiced Yes, constructive notice (same lawyers, same business) P must have been a mistake about Ds identity No, 11th Circuit precedent: mistake doesnt encompass a deliberate decision to sue a party whose identity P knew before SOL expired 11th CCA affirmed MTD o Pointed out that relevant info was on Ps ticket she deliberately chose to sue CC instead of D Legal rules Rule 15 Mistake an error, misconception, or erroneous belief Holding Reversed and remanded Relation back doctrine under Rule 15(c)(1)(C) does not depend upon Ps knowledge or timeliness in seeking to amend complaint Reasoning CCA improperly focused on Ps, instead of Ds, knowledge o Standard is whether D should have or did know during the 120 day period that it would have been the proper defendant absent Ps mistake o Knowledge of Ds existence does not mean that there was no mistake P made a mistake concerning the proper partys identity notwithstanding her knowledge that both parties existed o Doesnt matter whether mistake was reasonable or not or that P made the mistake deliberately Purpose of relation back doctrine/Rule 15 is to balance the interests of D that are protected by the SOL with the Rules preference for resolving disputes on their merits o Repose would be a windfall for a D who understood or should have understood that he would have been sued if P hadnt been a mistake concerning Ds identity o Ds own actions contributed to Ps confusion Amending partys diligence in filing an amendment is not an issue for consideration under relation back Rule 15 presents an exhaustive list of criteria o The speed with which P move to amend her complaint after obtaining leave to do so has no bearing on whether amendment relates back

146

147

148

Sanctions
Rule 11(a): Signature. Every pleading, written motion, and other paper must be signed by at least one attorney of record or by party who is unrepresented. Rule 11(b): Representations to the Court. By present pleading, motion, or other paper/representation, attorney certifies that to the best of his knowledge, information, and belief, formed after a reasonable inquiry under the circumstances: (1) it is not presented for an improper purpose (ex: to harass, cause unnecessary delay, or needlessly increase cost of litigation) (2) the claims/defenses/legal contentions are warranted by existing law or by a non-frivolous argument for changing existing law (3) the factual contentions have, or, if specifically identified, will likely have evidentiary support (4) the denials of factual contentions are warranted on evidence or, if specifically so identified, are reasonably based on belief or lack of information Rule 11(c): Sanctions 11(c)(1): If after notice and a reasonable opportunity to respond, court determines Rule 11(b) violation, then court may impose appropriate sanctions on atty, law firm, or party that violated rule or is responsible for violation. Unless exception circumstances, law firm must be held jointly responsible for violations of attorneys and employees o Sanctions may be imposed for oral representation in court that has a substantial connection to a signed document it has presented 11(c)(2): Motion for Sanctions must be made separately and describe specific conduct that violates Rule 11(b). o Safe Harbor Provision: Must be served (Rule 5) to party, but not filed or presented to court if challenged paper/info is corrected within 21 days after service or within another time the court sets. o Opposing party must have time to correct/withdraw representation to avoid sanctions o Court may award reasonable expenses and attorney fees incurred by motion to prevailing party 11(c)(3): On the Courts Initiative. Court may sua sponte order attorney, law firm, or party to show cause why conduct specifically described in the order does not violate Rule 11(b) o Party gets notice and opportunity to be heard, but safe harbor provision no longer available to let party amend or withdraw 11(c)(4): Nature of a Sanction. To deter repetition of comparable conduct. Sanctions may include: nonmonetary directives; order to pay court; order directing payment to movant of all or part of reasonable fees and expenses directly resulting from the violation (see 11(c)(2)) 11(c)(5): Limitations on Monetary Sanctions. The court must not impose monetary sanction: (A) against a represented party for violating Rule 11(b)(2), or (B) on its own, unless it issued the show-cause order (Rule 11(c)(3)) before voluntary dismissal or settlement 11(c)(6): Order imposing a sanction must describe sanctioned conduct and explain basis for sanction. Rule 11(d): Does not apply to discovery issues (see Rule 37)

149 1993 Amendments to Rule 11: Attachment B to Letter to Hon. Robert E. Keeton from Hon. Sam C. Pointer, Jr., Chair of the Advisory Comm. on Civil Rules (1993) (pg. 284) Safe harbor provision added, weakens Rule 11 Rule 11(d) makes the rule explicitly inapplicable to discovery o Broader scope of who can be sanctioned: not just signatories, but also persons who pursue a previously filed paper o Pleading on information/belief must be preceded by a reasonable inquiry o Pleadings should be taken as a whole. Insignificant aspects of pleadings should not warrant Rule 11 consideration. o Court no longer must order sanctions, but may o Court may but is not obligated to shift costs desire to discourage Rule 11 motions just to get costs; only awarded for costs that directly and unavoidably were caused by the violation o Represented party is protected only from sanctions under Rule 11(b)(2) o Law firms help jointly responsible (Rule 11(c)(1)(A)) o Show-cause order by court treated differently than a partys motion for sanctions: no safe harbor for a show-cause order Chaplin v. Dupont Advance Fiber Systems (E.D. Va. 2004) (pg. 288): Discrimination suit against employer that banned display of Confederate flag o D served Ps with Rule 11 motion and letter requesting they voluntarily dismiss action within 21 days, but they dont, so motion filed with court Rule 11 sanctions should not be used to discourage and punish creative claims. o Although Ps action was eventually dismissed (12(b)(6) motion), the court wont punish them for all counts bc: o The filing was not for an improper purpose, such as harassment, but an attempt to expand Title VII law o Case law opposing this expansion was not binding authority, so no violation of sufficient basis in law standard o Bc P had no sufficient basis in fact for religious and racial discrimination claims, he did violate Rule 11(b)(3), and sanctions granted for those counts Legal argument must have absolutely no chance of success under existing law. o Inartful pleading that would be enough for a D to win a 12(b)(6) motion will not in itself support Rule 11 sanctions, only the lack of any legal or factual basis is sanctionable. Holding Court sanction Ps lawyer Kirk Lyons for $10,000 a. Issue 1 No. i. D claimed that it was clear from case history that claims would go nowhere, so complaint was field to harass D ii. However, Rule 11 is not intended to chill an attorneys enthusiasm or creativity in pursuing novel legal or factual theories 1. Cleveland not supposed to stifle spirit of skilled advocacy 2. Kuntsler court should not sanction counsel for an intention the court does not approve so long as the claim is not taken in bad faith iii. Intent of complaint was not to harass but to expand civil rights jurisprudence b. Issue 2 No. i. Fourth CCA Terrill: Confederate Americans are not protected class ii. Not a published opinion, not binding authority no binding case to the contrary

150 c. Issue 3 Yes. i. Cleveland P was supposed to conduct an investigation before filing complaint to make sure that claims were likely to have evidentiary support ii. No basis for claim of religious discrimination complaint did not provide facts that P had suffered on account of religion iii. No basis for racial discrimination Complaint did not support claim that D policy hurt white people 1. Confederate Americans includes both black and white people d. Counts II and II are so devoid of merit as to support legal sanctions i. Religious and racial discrimination Significance e. NOT a 1st amendment claim only applies to government actors f. Courts also have local rule in addition to the general federal rules i. Foolish for a lawyer to practice in an area where you dont have a daily, established presence g. Different types of sanction i. Monetary punishment may not always be appropriate 1. Appropriate remedy may simply be to dismiss the case ii. Lawyers firms may also be sanctioned under appropriate circumstances h. Satisfaction of Rule 11 criteria: i. Complaint must be filed for a proper purpose ii. Each claim must have a sufficient basis in law iii. Each of the claims must have a sufficient basis in fact i. Sanctions cannot be imposed when the governing case law is alleged to be in an unpublished opinion Certification upon Presenting Paper to Court In federal civil cases, the attorney (or unrepresented party), by presenting to the court a pleading, written motion, or other paper, certifies that to the best of her knowledge, information, and belief formed after an inquiry reasonable under the circumstances: 1) The paper is not presented for any improper purpose (harassment, delay, etc.); 2) The legal contentions therein are warranted by existing law or a nonfrivolous argument for the modification of existing law or the establishment of a new law; 3) The allegations and factual contentions either have, or upon further investigationor discovery are likely to have, evidentiary support; and 4) Denials of factual contentions are warranted on the evidence or, where specified, are reasonably based on a lack of information and belief. The certification applies anew each time an attorney or unrepresented party "later advocates" a position contained in a pleading, motion, etc. Thus, a paper that was not sanctionable when first presented may become sanctionable if the attorney or party later advocating a position contained in the paper has since learned that the position no longer has merit. Sanctions The court has discretion to impose sanctions, "limited to what is sufficient to deter repetition of such conduct," against a party who presents a paper to the court in violation of the above requirements, either

151 on the court's own initiative or on motion of the opposing party. When appropriate, sanctions may be imposed against parties, attorneys, or law firms, and may consist of nonmonetary directives or monetary penalties including payment of expenses and attorneys' fees incurred because of the improper paper. Court's Initiative A court on its own initiative may enter an order describing the matter that appears to violate Rule 11 and direct the proponent to show cause why sanctions should not be imposed. Party's Motion A party who believes that his opponent has presented a paper in violation of Rule 11 may serve a motion for sanctions on the party. If the party does not withdraw or correct the matter within 21 days, the moving party may then file the motion for sanctions with the court. Basic Elements of Rule 11: Continuing Duty to Withdraw Unsupportable Contentions: There is a continuing obligation to comply with Rule 11 (added in 1993). See Rule 11(b)s reference to later advocating. Duty to Conduct Pre-filing Investigation: Rule 11 imposes an objective standard: pleading on information and belief must be preceded by an inquiry reasonable under the circumstances. Protecting Innovative and Novel Claims: In Hunter v. Earthgrains Co. Bakery (4th Cir. 2002), the Court found that for lawyers attempting novel claims, the legal argument must have absolutely no chance of success under the existing precedent (to be sanctionable). Not Applicable to Discovery Documents: Rule 11 is inapplicable to discovery documents. Mandatory Sanctions: The Court retains discretion as to the particular sanction to be imposed, subject to the principle that it is not to be more severe than needed for effective deterrence. Payment of Monetary Sanctions to an Adversary: Although the drafters recognized that costshifting created an incentive for unnecessary Rule 11 motions, they acknowledge there are situation in which cost-shifting may be necessary for effective deterrence. Such cost-shifting, however, should be the exception rather than the rule. Sanctions Against Law Firms: It is often appropriate for a law firm to be held jointly responsible for violations by its partners, associates, and employees. Safe Harbor Provision: Although a procedural technicality, the safe harbor provision has generated a substantial amount of litigation. FRCP 11(c)(1)(A) grants a litigant 21 days between service and filing of a FRCP 11 motion to correct or withdraw the offending paper See Progress Federal Savings Bank v. National West Lenders (E.D. Pa. 1996) (p. 261): After litigation had ended, NatWest filed a rule 11 motion for sanctions on Progress. Without addressing the merits, Progress responded with a motion to strike for failure to comply with the procedural requirements of Rule 11. NatWest did not serve Progress with a motion for sanctions until all of claims had been dismissed and the balance settled. Under the safe harbor provisions, a party cannot delay serving its Rule 11 motion until the conclusion of the case. Motions must be served as soon as practicable. The only case where it does not apply it when a court initiates the motion for sanctions. Formal Procedure for Sanction 11 Motions: First, service must be served upon the party in accordance with Rule 5. The movant must then wait 21 days after service, and only then present the motion to the Court (assuming the complaint or allegation has not been withdrawn).

152 Other Mechanisms: Outside the scope of Rule 11, Rule 37 >> discovery rules. Moreover, 28 USC 1927 permits the court to make attorneys liable for excessive costs, expenses, and attorneys fees reasonable incurred because of such unreasonable and vexatious conduct.

153

154

Joinder
Joinder of Parties Capacity An individual's capacity to sue or be sued is determined by the law of her domicile; the capacity of an organization (e.g., an association or partnership) is determined by the law of the state where the federal court sits, except that a partnership or unincorporated association always has capacity where a substantive federal right is asserted by or against it. Compulsory Joinder Under Rule 19, a party should be joined if: (i) complete relief cannot be given to existing parties in her absence; (ii) disposition in her absence may impair her ability to protect her interest in the controversy; OR o Sometimes, litigation has practical impacts on strangers to the case, even though they are not directly subject to orders entered in the litigation. Rule 19 (a) (1) (B) (i) provides that such absentees should be brought in, so that this collateral effect of the case can be considered or reduced. (iii) her absence would expose existing parties to a substantial risk of double or inconsistent obligations. But NB: The Supreme Court has held that a joint tortfeasor subject to joint and several liability is NOT a person needed for just adjudication. [Temple v. Synthes Corp 1990] 1) Must Be Joined If Feasible (Necessary) When a compulsory party is amenable to process and her joinder will not destroy diversity or venue, she must be joined. There is no supplemental jurisdiction over claims by or against persons joined under Rule 19. 2) When Joinder Is Not Feasible (Indispensable) When joinder is not feasible (i.e., the compulsory party is not subject to process, objects to venue, or would destroy diversity jurisdiction), the court must decide in equity and good conscience whether the action can proceed in the party's absence or must be dismissed. The court must consider these four factors: (i) Whether the judgment in the party's absence would prejudice her or the existing parties; (ii) Whether the prejudice can be reduced in shaping the judgment; (iii) Whether a judgment in the party's absence would be adequate; and (iv) Whether the plaintiff will be deprived of an adequate remedy (e.g. in another court) if the action is dismissed. The cases have shown a preference for dismissal if there is a state forum in which all the parties may be joined in practice as well as in theory. Compulsory Joinder of Parties: FRCP 19

155 o Rule 19(a): Necessary parties: Persons that must be joined if feasible. o Rule 19(b): Indispensable parties: A sub-set of necessary parties. If a necessary party cannot be joined (diversity would be destroyed, venue would be improper or no personal jurisdiction) 19(b) provides a standard by which a court shall determine if a case can proceed without the necessary party (i.e. equity and good conscience). If it cannot proceed, that party is indispensable. Determining Necessary Parties: o Where the plaintiff cannot get relief from the named party (Rule 19(a)(1)). Ex: D is co-owner of property in dispute and cant provide equitable relief without another person (co-obligors) Ps inability to collect on a judgment (ex: if D is judgment-proof) typically wont satisfy this criterion o Where the absentee may be prejudiced by the failure to join (Rule 19(a)(2)(i)). Ex: Claim preclusion/res judicata; privity of interest between current P and potential P in future litigation Lopez v. MLK Jr. Hospital) (C.D. Cal. 1983) (pg. 318): Child was necessary party bc child might later be precluded from bringing claim if CA court found privity Ex: Limited pie cases (trust account) Ex: Multiple Ps claim title to land Public Rights Exception Issues of primarily public concern at stake Many ppl would have to be joined, such that mandatory joinder would be unwieldy or impossible and there is a strong public interest (Sierra Club v. Watt) (U.S. 1940) (pg. 319) o Where the defendant may be prejudiced by the failure to join the absentee (inconsistent obligations) (Rule 19(a)(2)(ii)). Ex: D having to convey land to 2 different Ps Rules of Thumb from Daynard v. Ness, Motley, Loadholdt, Richardson, & Poole, P.A. (D. Mass 2001) (p.826) : o Joint Tortfeasors are not necessary parties (and therefore not indispensable). In Temple v. Synthes Corporation, Ltd. the Supreme Court held not necessary for joint tortfeasors to be named as defendants in a single lawsuit. Instead, merely permissive parties; suit could be brought against the non-party in another suit under a compensation statute. o Co-obligors to a contract may be necessary parties, but generally are not indispensable. o An action to set aside a contract generally requires the joinder of all parties to the contract. Is a Party Necessary?: Rule 19(a)s 3 part inquiry: o 1) Complete Relief: (Rule 19(a)(1)): Can complete relief be given in the parties absence? This has generally been considered a null set, since even if the plaintiff as a practical matter may not be able to obtain complete relief, his inability to collect will not satisfy the complete relief criterion. o 2) Absentees Legally Protected Interests: (Rule 19(a)(2)(i)): Would the disposition of the action impair or impede the absentees ability to protect their interests? Courts typically

156 recognize only legally protected interests. The interest must be more than a mere financial stake. 2 Classic Cases: First, if the litigation would have preclusive effect later. Second, if it is a case involving a limited pie. Necessary Showing of Legal Interest: Courts have disagreed over the extent to which the likelihood of preclusion must be demonstrated. The establishment of a mere persuasive precedent is insufficient. See Janney Montgomery Scott, Inc. v. Shepard Niles Inc. (3rd Cir 1993). o 3) Remaining Parties Risk of Inconsistent Obligations: (Rule 19(a)(2)(ii)): Would the absence of the party leave any of the parties subject to substantial risk of incurring multiple or inconsistent obligations? Inconsistent obligations are not the same as inconsistent verdicts, the latter of which are common and permissible. An inconsistent obligation emerges when one court orders a party to do one thing and another court orders the same party to perform an inconsistent act. Bearing the Whole Loss Insufficient: In Janney Montgomery Scott the Court concluded that the possibility that the defendant may bear the whole loss if it is found liable is not the equivalent of double liability. Inherent in the concept of joint and several liability is that a plaintiff may secure whole judgment against any one of the liable parties. Indispensable to Equity and Good Conscience?: where a necessary party cannot be joined for one of the foregoing reasons, the court must decide whether to dismiss the plaintiffs case or to proceed without a necessary party. In other words, the court must determine whether the absent party is indispensable to proceeding in equity and good conscience. Is a Party Indispensable? Daynard v. Ness, Motley, Loadholdt, Richardson, & Poole, P.A. (D. Mass 2001) (p.826): o Necessary? First, must determine that a party is necessary under Rule 19(a): See above. o Indispensable? Second, if the party is necessary, is it also indispensable under Rule 19(b): Factors: To what extent a judgment rendered in the persons absence may be prejudicial to that person or those already parties. The extent to which protective provision, the shaping of relief, or other measures could lessen or avoid prejudice. Whether judgment in the persons absence would be adequate. Whether the plaintiff would have an adequate remedy if the action were to be dismissed for nonjoinder. Corresponding Factors (From the Supreme Court in Provident Tradesmen Bank & Trust Co v. Patterson (US 1968)): The interest of the outsider whom it would have been desirable to join. Defendants interest in avoiding multiple litigation, inconsistent relief, or sole responsibility for liability it shares with another. The interest of the courts and the public in complete and efficient settlement of controversies. The plaintiffs interest in having a forum.

157 Burden of Persuasion: The burden of showing that the party is indispensable is placed upon the moving party.

Cases Temple v. Synthesis Corp. (SCOTUS 1991) Issue o Are joint tortfeasors necessary and indispensable parties under Rule 19? Facts o P underwent surgery where a metal plate manufactured by D was placed in his back o The plates screws broke off in Ps back, and P sued D in EDLA (PA company diversity jurisdiction) and the doctor and hospital in state court Strategy: trying to maximize possible damages if both are sued in federal court, its likely that a jury will blame one more than another, gross damage award may be less o D filed MTD, claiming that P failed to join a necessary party in the federal suit under Rule 19 didnt implead doctor/hospital b/c D thought that it could simply quash the case Procedural history o EDLA ordered P to join doctor and hospital w/in 20 days or risk dismissal Provident Bank courts have an interest in complete, efficient, and consistent settlement of controversies doesnt want D to subsequently sue doctor and lead to further litigation P failed to join and court dismissed case w/prejudice o 5th CCA affirmed obviously prejudicial to Ds to have separate litigation occurring concurrently Ds might need to file cross-claims against each other alleging that doctor/hospital was negligent or that company was negligent Holding o No reversed and remanded Reasoning o It has long been the role that potential joint tortfeasors are not necessary parties Advisory Notes to Rule 19: tortfeasor w/the usual joint and several liability is merely a permissible party any tortfeasor can be held completely liable for Ps injury Significance o Although the rules have a strong predilection toward efficiency, compulsory joinder is limited o Required parties must be necessary AND indispensable Indispensable is a sub-category of necessary Necessary party has to be subject to SOP AND to courts SMJ (diversity, etc.) AND whose joinder is required to grant complete relief Indispensable necessary party that cant be added to litigation for whatever reason therefore, case must be dismissed o Court notes that they are only potential joint tortfeasors sufficient to decide the case However, D did not deny that they are potential joint tortfeasors Daynard v. Ness (DMA 2001) Issue o Is a jointly and severally liable co-obliger under a verbal contract a necessary and indispensable party? Facts

158 o P was a consultant for D South Carolina law firms, as well as a Mississippi consortium, in their lawsuit against big tobacco o P sued both group of law firms for breach of a verbal contract to pay him a proportion of their awards at trial Why didnt he get a contract? o Miss law firms dismissed for lack of personal jurisdiction o D moved to dismiss for failure to join an indispensable party Rep from one of the Miss. Law firms allegedly shook hands with P confirming oral agreement absence of Miss. Parties would only spawn subsequent lawsuits P says that there was joint and several liability among D and Miss. firms b/c he contracted w/both of them can sue either of them for full damages Legal rules o 12(b)(7) MTD for failure to join an indispensable party can be made at any time before the end of a trial Rule 12 Necessary party: one that should be joined to effect a just adjudication o Joint tortfeasors arent necessary and therefore cant be indispensable o Co-obligers to a contract may be necessary but generally are not indispensable Co-obligees need to be party to the litigation b/c they wouldnt get their cut otherwise o As a general rule, an action to set aside a contract requires joinder of all parties Indispensable party: someone who cant be made a party, and the trial cant proceed w/o them four factors: o Interest of absentee party o Ds interest in avoiding multiple litigation o Court and societys interest in efficiency o Ps interest in being able to have case heard For MTD to succeed, party must be both necessary and indispensable moving party bears burden of proof o Aton: First CCA dismissed a lawsuit b/c the plaintiff was a subsidiary and had failed to join its parent company indispensable party Parent was substantially involved in negotiations and may have rights different from subs could commence new action against seller, better to join and provide complete relief Res judicata could prevent parent from suing impede ability to protect its interests o Janney: parent company in this case was not necessary 19(a): complete relief could be accorded b/c defendants could be jointly and severally liable under contract AND judgment against Ds would not bind the parent no persuasive precedent (a)(2)(ii) risk of inconsistent adjudications is not the same as inconsistent obligations D should protect himself through impleader or other vehicle to collect debt from another party if he thinks that hes owed Absent co-obliger is not a necessary party Holding o No not necessary for P to join Miss. Firms because they are or could be jointly and severally liable co-obligors

159 Reasoning o Unlike Acton, absent party is a co-obligee, not a co-obligor and is not in privity with D Also, indispensable findings in previous cases do not provide much utility beyond their pertinent fact patterns o P can get complete relief from D court cant assume that P had entered into a separate contract with the Miss. Firms Court must favor P and assumed that firms can be held jointly and severally liable o No persuasive precedent standard not enough to prejudice absentee party Ds empty chair defense is fallacious o If D is found liable, it could always sue Miss. firms for a portion of the debt o D is a co-obligor not a co-obligee o Absentee party is not indispensable Significance o Co-obligees are indispensable while co-obligors are usually not even necessary o 19(c) P supposed to advise the court of any parties that should be joined of feasible

Permissive Joinder FRCP 20: Parties may join as plaintiffs or be joined as defendants whenever: Two Step Inquiry: i. 1) Must arise from the same transaction or occurrence. In Kedra v. City of Philadelphia (E.D. Pa., 1978) (p. 300), the court reaffirmed that the joinder provisions of the Federal Rules are very liberal. Moreover, Absolute identity of all events is not necessary. ii. 2) Must be of common question of law or fact. Kedra says that similarity of claims proves common issues of law or fact Additional Requirement for Defendants to be Joined: Must meet the requirements of personal and subject matter jurisdiction, as supplemental jurisdiction does not apply to such claims. Thus, in a diversity action, joinder of additional defendants must not destroy complete diversity among the parties. The jurisdictional amount must also be met by each defendant individually; such claims cannot be aggregated. Persons may be joined as Ds if: (A) Right to relief asserted against Ds arises out of same T/O, or series of T/O (B) A question of law or fact common to all joined Ds will arise in the action (C) Court must have independent personal jurisdiction and subject matter jurisdiction NB: If proper joinder under Rule 20, then Rule 18 joinder of claims goes into effect and all claims between original and joined parties can be litigated in same trial Misjoinder of Parties FRCP 21 makes is clear that misjoinder of parties is not ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or of its own initiative With/without motion, court may at any time, on just terms, add/drop party Court may also sever any claim against a party

160 Joinder of Claims The policy of the Federal Rules is to permit the adjudication of all claims between the parties and all claims arising out of a single transaction. A plaintiff can join any number and type of claims against a defendant; when multiple plaintiffs or multiple defendants are involved, it is essential only that at least one of the claims arise out of a transaction in which all were involved. Rule 18: Permissive Joinder of Claims; (P D (claim 1); P D (claim 2)) (a) Party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party (same party) (b) Party may join contingent claims Requirements: No transaction or occurrence requirement Parties must already be in the suit and be legally adverse Claims must meet subject matter jurisdiction requirements Rule 42(b): Court may order separate trials for claims Res Judicata: Compulsory Joinder of Claims If claims arise out of the same transaction or occurrence, then party must bring all of the claims within the same action, or else party can lose right to bring them later due to res judicata (Rule 8(c)(1) affirmative defense) Successive Claims Rule 18(b) permits the plaintiff to join two claims when success on the first is a prerequisite to the second, such as a claim for money damages and a suit to set aside a conveyance that was fraudulent because of the debt asserted in the first claim. Jurisdiction When jurisdiction is based on the diversity of citizenship between the plaintiff and defendant, the plaintiff may aggregate all claims she has against the defendant to satisfy the jurisdictional amount. When jurisdiction is based on a "federal question" claim, a nonfederal claim can be joined only if it is regarded a part of the same case or controversy as the federal claim, i.e., the "pendent" jurisdiction test of state and federal claims arising from a "common nucleus of operative fact."

13. Sculpting the lawsuit

161
Rule 18(a). like Rule 13, authorizes "a pleader" to assert as many claims as he has against an opponent. This applies not only to the original plaintiff, but also to any party seeking relief against another party, whether on a counterclaim, a cross-claim, or a third-party claim. Suppose, for example, that Volt sues Ellsworth and Wright for negligence, based on the collision at the construction site, and Ellsworth cross-claims against Wright for her damages arising out of the accident. Rule 18(a) authorizes Ellsworth, as a party seeking relief, to add on any claim, related or unrelated, that she may have against Wright:

Volt

----_-<

Ru1e 18(1) (Ulll'Clated

COIItnIl:t m-h)

Wn,ht

Note that Ellsworth could not have asserted this unrelated contract claim as a cross-claim if it were the only claim she had against Wright: Rule 13(g) only allows cross-claims that arise out of the same transaction or occurrence as the main claim. However, once Ellsworth asserts a proper crossclaim against Wright, Rule 18(a) kicks in, allowing her to add on totally unrelated claims as well. A cautionary note is in order here, however. The fact that the Rules authorize joinder of multiple claims, or claims against multiple parties, Consolidation does not confer subject matter jurisdiction on the court to hear those claims.in For every District claim, : subject matter jurisdiction must be analyzed Cases Pending a Single separately; at times, the joinder rules will authorize the joinder cases of a pending claim, FRCP 42(a) authorizes a federal court, at its discretion, to consolidate within the same but the court will not have jurisdiction to hear it. These two requirements judicial district involving a common question of law or fact. The claims need not arise out of the same are compared and distinguished in Chapter 17, entitled "Joinder vs. Jutransaction. risdiction: The Difference between Power and Permission." In puzzling out the following examples, start by identifying the party Multidistrict Litigation : as a plaintiff or defendant and then consider, given the asserting the claim particular posture of the claim, which the rulesto applies. Assume that all 1407 created the In addition to the authority under 28 USC 1404of and 1406 transfer cases, 28 USC suits are brought in federal court. Judicial Panel on Multidistrict Litigation (JPML). The JPLM may order the transfer of multiple cases to

a single forum when civil actions involving one or more common questions of fact are pending in different districts. However, transfer is limited to the coordination and consolidation of pretrial purposes. If the case must be tired, it has to be returned to the original district. 258 Separation Under FRCP 42(b), The Court may separate claims for various reasons: o Convenience. o Avoidance of prejudice. o Expediency

162

163

Third-Party Practice
Impleader Make sure there is a contractual relationship or some other basis for impleader. Example: Two sub-contractors B and C work for Contractor A. A gets sued and impleads B. B probably cannot implead C b/c there is no liability from C to B, only from C to A. Therefore B would only be pointing the finger at C. Additionally, B cannot cross-claim against C unless he is a party to the suit (i.e. A impleads him or P joins him as a defendant). Principal purpose of an impleader An impleader allows a defendant (or plaintiff against whom a counterclaim is asserted) to bring into an action an outsider who is, or may be, liable for all or some of plaintiffs claim against the defendant. Rationale of impleader To save judicial time and resources. Without impleaders, the defendant would have to wait until plaintiff prevailed against him to seek partial or total reimbursement from the third-party defendant. Problems this would create include: Evidence would be duplicated in the second suit Multiple lawsuits might result in inconsistent results Defendant might be seriously prejudiced by the time lag between plaintiffs judgment against him and a judgment in his favor against the third party defendant Whos Who in an Impleader Claim Impleader is accomplished by means of a third-party complaint served on the outsider. The impleaded defendant is called a third-party defendant and the party who impleaded him becomes a third-party plaintiff SPOTTING AN IMPLEADER: Look for situations in which the defendant (or the plaintiff on a counterclaim) brings in an outsider to the original action (usually an outsider whose liability is derivative). Crossclaims and counterclaims, by contrast are brought against parties who are already in the action FOUR PRINCIPAL BASES FOR IMPLEADER: 1. Indemnity a. Right to indemnification can either be express (a contractual provision in which someone agrees to compensate for the damage caused by someone else) or implied (a person without fault is held legally liable for damages caused by anothers fault) 2. Subrogation a. One persons succession to the rights of another, making him a subrogee. Heres a common example. Someone hits your car, and your insurance company pays for repairs under your car insurance policy. The insurance company can seek recovery from the other driver on a subrogation theory to the extent of the companys payment to you. 3. Contribution a. Covers the following situation: A joint tortfeasor is held liable for damages to his victim. The joint tortfeasor can thereafter seek contribution from his fellow joint tortfeasor, to reflect his fair share of the burden 4. Breach of Warranty a. In general, violation of a sellers representation concerning the character of (or title to) a product

164 If it is a diversity case, look for supplemental jurisdiction issues, 28 U.S.C. 1367 Rule 14(a): When a Defending Party May Bring in a Third Party a. (1) D may, as a 3PP, serve a nonparty who is or may be liable to it for all or part of the claim against D (3PD) i. Requirements to Implead New Party: 1. 3PD not already a party 2. 3PP must have a claim against 3PD (not just he did it) (guarantor example) 3. 3PD must be liable for all or party of Ps claim against 3PP (not a valid impleader if 3PP has a claim against 3PD regardless of outcome of Ps claim against 3PP claim must be dependent upon 3PP being found liable to P) a. U.S. v. Olavarrieta (11th Cir. 1987) (pg. 314): P suing D for repayment of student loans. D unsuccessfully attempted to implead law school for breaching of K for not awarding degree. If that were a valid claim, it is not independent from D being found liable to P for student loans. ii. Limited to claims for reimbursement of moneys owed to P (ex: indemnification, subrogation) iii. If filed more than 10 days after serving original answer, then 3PP must get courts permission iv. The rule does not allow defendants to suggest new targets for the plaintiff. Rather, it allows defendants to bring in targets of their own if they may be able to pass on liability (either some of it or all of it) to the impleaded party. Gross v. Hanover Ins. Co. (S.D.N.Y. 1991) (pg. 311): Jewelry robbery; Hanover Ins. Co. allowed to implead owner and employee of 3-R Jewelers bc their negligence makes them liable to D, if D is liable to P for insurance payment (subrogation) 1. Court must balance benefits of settling related matters in one suit v. potential prejudice to P and 3PD 2. 3PDs liability need not automatically be established once 3PPs liability to P has been determined 3. P argues that Ds impleader claims are speculative, but court disagrees: a. P may not be able to attack the merits of impleader claims at this stage of the trial b. Is or may be liable language in Rule 14 makes it clear that impleader is proper even though 3rd partys liability is not automatically established even if D is find liable under Ps claims c. Impleader claims are sufficiently alleged federal and state courts have held that third-party claims can encompass subrogation: substitution of one party for another who assumes original partys rights and obligations (2) 3PDs Claims and Defenses i. (A) Must assert any defense against 3PP (Rule 12) ii. (B) Rule 13 governs third-party practice (more liberal). 3PD: 1. Must assert any Rule 13(a) counterclaim against 3PP 2. May assert any Rule 13(b) counterclaim against 3PP; or 3. May assert any Rule 13(g) crossclaim against another 3PD iii. (C) May assert any defense against Ps claim iv. (D) May assert against P any claim arising out of same T/O of Ps claim against 3PP (3): Ps Claims Against a 3PD (parties then become legally adverse) v. P may assert any claim that arises out of same T/O of Ps claim vi. 3PD must then assert defense (Rule 12), and any compulsory counterclaim (Rule 13(a)) against P

165 vii. 3PD may assert any permissive counterclaim (Rule 13(b)) viii. 3PD may assert any permissive crossclaim (Rule 13(g)) (4) Any party can move to strike or sever third-party claim (5) 3PDs Claim Against a Nonparty: 3PD may proceed against nonparty who is or may be liable to 3PD for all or part of any claim against 3PD Rule 14(b): When claim (ex: counterclaim) asserted against a P, P may bring in third party if Rule 14 would allow a D to do so The impleader claim is treated like an original suit for pleading, service, and other purposes. o The defendant, as "third-party plaintiff," must file a third-party complaint against the impleaded "third-party defendant." o The complaint must comply with the pleading requirements of Rules 8 through 11 and must be served under Rule 4. o The third-party defendant must respond under Rule 12 and has the same options to answer or move to dismiss. o The third-party defendant may also make counterclaims against the third-party plaintiff (Rule 14(a)(2)(B and may implead further parties under Rule l4-(a)(5). o The rule also allows the plaintiff and the third-party defendant to assert claims against each other if they arise out of the same transaction or occurrence as the main claim. See Rule 14( a) (2) (D), (a)(3). Claims for Indemnity or Contribution A defending party may implead a nonparty, but only if the nonparty is or may be liable to her for any part of a judgment that the plaintiff may recover against the original defendant. Usually, such an impleader claim will be for indemnity or contribution. If the indemnity or contribution claim by the defending party against the third-party defendant does not meet the requirement for diversity of citizenship or federal question jurisdiction, it will invoke supplemental (ancillary) jurisdiction, because such claims will meet the "common nucleus of operative fact" requirement of supplemental (ancillary) jurisdiction. Thus, the defending party may assert an indemnity or contribution claim in federal court even if there is no diversity between the defending party and the third-party defendant and the thirdparty claim is based on state law. Furthermore, venue need not be proper for the third-party defendant. Non-Indemnity or Non-Contribution Claims As part of the third-party complaint, the third-party plaintiff (i.e., the original defending party) may join other (non-indemnity or non-contribution) claims she may have against the third-party defendant. If these other claims cannot invoke diversity of citizenship or federal question jurisdiction, they would also need to invoke supplemental (ancillary jurisdiction (see II.A.5., 6.e., supra), although it is less likely that the "common nucleus" test could be met. Severance of Third-Party Claims In any event, even if jurisdiction exists, the court may sever any third-party claim to be tried separately if it is just to do so (e.g., if addition of those claims would lead to unfair prejudice to one of the parties). Response of Impleaded Party

166 After he is joined by the third-party complaint, the third-party defendant may assert defenses to the plaintiff's original claim, as well as defenses to the third- party liability asserted against him. Impleading Insurance Companies In some states, a defendant may not implead its own insurance company, but if the insurance company denies coverage and refuses to defend, then the defendant may implead the company and have that issue decided in the same case Jurisdictional Requirements Subject matter jurisdiction is satisfied because third-party claims fall within the courts supplemental jurisdiction. Personal jurisdiction may be had over a third-party defendant if he can be served within the 100-mile bulge of the courthouse. FRCP 4(K)(1)(B). As a Matter of Right and When Leave is Required If the third party plaintiff files the third party complaint within 10 days after serving the original answer, then it does not need leave. After 10 days, it must obtain leave on motion to the Court upon notice to all parties to the action. Interpleader Rule 22; 28 U.S.C. 1335 o For an individual or corporation who is/may be exposed to double/multiple liability to initiate the joinder of parties who have asserted/could assert such claims. Claims must be demanding the same thing or obligation (same property, prize, proceeds of same insurance policy). o Usually involves insurance disputes o Roy Adams example of insurance company interpleading those alleging rights to proceeds to determine who to pay and to avoid risk of paying twice o Insurance company is the stakeholder. The stake is subject to claims of the adverse claimants. Insurance co. may be both the stakeholder and an adverse claimant if claiming that it is not obligated to pay at all. o Rule 22(a)(1): By a Plaintiff. Outside persons with claims that may expose a P to double or multiple liability may be joined as Ds and required to interplead. (stakeholder is P and adverse claimants are Ds). Joinder for interpleader is proper eve though: o the claims of several claimants, or the titles on which their claims depend, lack a common origin or are adverse and independent rather than identical; or o the P denies liability in whole or in part to any or all of the claimants o Rule 22(a)(2): By a Defendant. A D exposed to similar liability may seek interpleader through a crossclaim or counterclaim. o 28 U.S.C. 1335 o District courts shall have original jurisdiction in interpleader action over anyone who has money/property worth $500 or more, or bond or insurance policy or other instrument worth $500 or more, or providing for delivery or payment or loan of money/property of such value, or being under any obligation to the amount of $500 or more, if o Two or more adverse claimants of diverse citizenship (as defined by subsection (a) and (d) of 1332) are claiming/may claim same money/property/policy, etc.; and if o P has deposited money or property so as to secure the judgment o 28 U.S.C. 1397: Any interpleader action under 1335 may be brought in the judicial district in which one or more of the claimants reside o See also 2361

167 Purpose Is to Avoid Double Liability Interpleader permits a person in the position of a stakeholder to require two or more claimants to litigate among themselves to determine which, if any, has the valid claim where separate actions might result in double liability on a single obligation. Interpleader is available under Rule 22 and under the Federal Interpleader Statute. [28 U.S.c. 1335] Rights of Plaintiff Stakeholder The plaintiff stakeholder does not have to admit liability to any claimant and the claims do not have to have common origin. Once the court has allowed inter- pleader, a trial by jury is available to determine the issues of fact. Jurisdiction a) Rule 22 Interpleader If Rule 22 interpleader is relied on, the normal rules as to subject matter jurisdiction apply. Therefore, there must be either a federal question claim or complete diversity between the stakeholder and the claimants and more than $75,000 in controversy. b) Federal Interpleader Statute Under the Federal Interpleader Statute, on the other hand, the jurisdictional requirements are less restrictive. The federal statute permits jurisdiction where the amount in controversy is $500 or more and where there is diversity between any two contending claimants. Venue lies where any claimant resides, and process may be served anywhere in the United States under the statute (but not under Rule 22). The plaintiff stakeholder must deposit the amount in controversy (or a bond) with the court. Intervention Rule 19 instructs the court to consider whether a person who was not made a party to the initial action should be made a party to it. Rule 24, by contrast, authorizes an absent party who learns of an action to become a party to the litigation. Although it seems unlikely that bystanders would seek to become parties to lawsuits, it actually happens with surprising frequency. Rule 24(a) specifies circumstances in which the absentee has a right to become a party to a case. Rule 24(b) provides for "permissive intervention," that is, situations in which the court may, in its discretion, allow an interested person to become a party. Rule 24(a): Intervention of Right: Court must allow intervention on timely motion to anyone who: o 24(a)(1) has unconditional right to intervene based on federal statute (e.g. USG agency); OR o 24(a)(2) Meets three-pronged test: o Claims interest re: property / transaction that is subject of the action, and o Is so situated that disposing of action may impair or impede the movants ability to protect its interest, AND o Existing parties do not adequately represent that interest Ex: intervenors stake in outcome is greater than either partys Rule 24(b): Permissive Intervention o 24(b)(1): On timely motion court may permit intervention if person: o 24(b)(1)(A) has conditional right to intervene by federal statute, or o 24(b)(1)(B) has claim or defense that shares common question of law or fact with the main action

168 o 24(b)(2): Government officer or agency may intervene on timely motion if a partys claim / defense is based on: o 24(b)(2)(A) a statute or executive order administered by officer or agency, or o 24(b)(2)(B) any regulation, order, requirement, or agreement issued or made under statute or executive order o 24(b)(3): Court must consider whether intervention will unduly delay or prejudice adjudication of original parties rights Rule 24(c): Notice and Pleading Required. A motion for intervention must be served on the parties (Rule 5). The motion must state the grounds for intervention and be accompanied by a pleading setting out the claim/defense for which intervention is sought. U.S. v. Northern Indiana Public Service Co., et. al. (N.D. Ind. 1983) (pg. 329): Save the Dunes Council attempts to intervene in U.S. action to condemn land owned by NIPSCO; P and D enter into stipulation and joint motion to dismiss, but Council still wants to intervene. o Under Rule 24(a)(2), intervenor must show: o Timely application (dependent on circumstances; discretionary) As soon as intervenor knows/has reason to know his interest may be adversely affected by the litigation, he must move promptly to intervene o An interest relating to the property or transaction which is the subject of the action (legally protectable interest intervenor must have some legal right independent of right of existing parties) Council is essentially a private citizen with no legally protectable interest in the land no intervention of right bc not protectable interest that can be impaired/impeded, and no interest that can be inadequately represented o The disposition of the action may as a practical matter impair or impede his ability to protect that interest o The interest is not adequately represented by existing parties o No permissive intervention under Rule 24(b) bc it would unduly delay and prejudice the rights of the original parties (Rule 24(b)(3)) allowing intervention at this point (after four yrs have passed since filing of suit and original parties have submitted stipulated judgment), for party with no legal interest in private property, and whose position is contrary to both of the original parties who want to settle, would only prolong an already lengthy lawsuit Intervention of Right Intervention of right is available whenever the applicant claims an interest in the property or transaction that is the subject matter of the action, and the disposition of the action without her may impair her ability to protect that interest (unless her interest is already represented). The possible stare decisis effect of a judgment may be sufficient "interest" to authorize intervention of right. Traditionally, intervention of right invoked ancillary jurisdiction, so that no independent basis of subject matter jurisdiction was required over claims by or against the intervenor of right. Under the supplemental jurisdiction statute, however, it appears that there is no supplemental (ancillary) jurisdiction over claims by or against one seeking to intervene in a diversity action. The United States has a right of intervention in all cases where the constitutionality of a United States statute is raised. Rule 24(a)(2) does not create an automatic right to intervene if the absentee meets the standard.

169 o First, the motion to intervene must be "timely." Rule 24(a)(2). If a party tries to get in long after it is aware of its interest, or at a time when adding parties will significantly disrupt the litigation, the court has discretion to deny intervention. o The Rule also provides that intervention will be allowed "unless existing parties adequately represent that interest." o The exception gives the court discretion to deny intervention if the absentee is likely to make the same arguments as an original party, or to represent the same interest. o "The applicants must show that they bring something to the litigation that otherwise would be ignored or overlooked if the matter were left to the already-existing parties." Moore's Federal Practice, s. 24.03 [4] [a][i]. Permissive Intervention Permissive intervention is available when the applicant's claim or defense and the main action have a question of fact or law in common; no direct personal or pecuniary interest is required. A claim in permissive intervention must not destroy complete diversity (if it does, intervention will be denied), and must be supported by its own jurisdictional ground. In addition, the court may allow intervention for limited purposes or authorize intervenors to participate in limited ways. o For example, the court might allow an absentee to intervene to litigate only a single claim or defense, or allow the intervenor to file briefs and argue motions, but not to take discovery or present witnesses. o In Stringfellow v. Concerned Neighbors in Action,480 U.S. 370, 373 (1987), the court allowed a citizens group to intervene in a hazardous waste cleanup case, subject to the conditions that it could not (I) assert any claim for relief not already requested by one of the original parties; (2) intervene in the cleanup costs claim; or (3) me motions or conduct its own discovery unless it first conferred with all the original parties and obtained the permission of one of them. Caveat In all cases of intervention, the application must be timely, a matter within the court's discretion.

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171

Discovery
Purpose And Effect: Liberal federal discovery rules are designed to promote adjudication of cases on the merits, rather than through the tactic of "surprise" (i.e., hiding evidence from the adversary). Another purpose is to narrow the issues and to promote settlement (avoiding trial, if possible, thereby promoting "judicial economy"). Facts placed in issue by the pleadings may, after full and open disclosure of the evidence through discovery, not really be in dispute. Hence, discovery may provide a basis for stipulations, settlements and summary judgment. However, because of the nagging problem of continuing abuse of the discovery rules by adversaries who employ these rules as litigation tactics, the Advisory Committee has added F.R.C.P. 26(a) which provides for required disclosure of certain information. "Disclosure" does not replace "Discovery" but is an additional requirement. It calls for automatic exchange of specified categories of basic information by the parties to a federal court lawsuit in three distinct stages corresponding to 26(a)(1), (a)(2) and (a)(3). This automatic "disclosure" obligation is not triggered by a discovery demand. Counsel, as officers of the court, are required to comply with the demands of new Rule 26(a) without awaiting discovery requests. The purpose behind this new "Disclosure" requirement is to cut down on traditional "Discovery", and the interminable motion practice that accompanies it, to save the parties and the court system time and money. Overview Fundamental Process Conducted by the parties through bilateral communications. Court only assists on scheduling discovery and resolving disputes and does NOT participate in the exchanges themselves no micro-managing o However, the devices of discovery, established by court rule and enforceable by the court, give counsel for the parties powerful mechanisms for demanding the production of evidence from those who have it. o Through discovery requests, counsel may force opposing parties and other witnesses to give oral testimony on any issue in the case, and can force opponents to produce even the most damaging "smoking gun" documents lurking in their confidential files. o In most cases, it is effective use of these expansive discovery tools, not trial, that determines the value and the outcome of cases Primary Function: To prevent trial by ambush and permit determination upon the merits of the case. Benefits of Extensive Discovery: Elimination of surprise and trial by ambush, preserving testimony so that it will be available, simplify pleadings (make Rule 12(e) motions unwelcome), increasing effectiveness of summary judgment, focusing the trial on the main points in controversy, permitting each side to assess the strengths and weaknesses of their cases, and frequently making trials unnecessary by promoting settlement. Drawbacks of Extensive Discovery: Delays and expense, intrusions upon privacy, harass other party, get info. for non-legal reason (trade secrets) etc. Evolution of Discovery: In 1980, rules amended to require discovery conferences early in the litigation. In 1983, judges were invited to limit the extent of discovery to make it commensurate with the stakes of the litigation. In 1993, limits on interrogatories and deposition were introduced, along

172 with a new regime requiring mandatory initial disclosures. In 2000, the scope of discovery was narrowed, a presumptive time limit, and great uniformity in mandatory disclosures a. Party-Control and Stipulations: Many of these mandatory initial disclosures can be completely avoided. Cf. Rule 20(a)(1): or to the extend otherwise stipulated or directed by order.... The Rules permit parties to stipulate concerning discovery and gives the court flexibility in determining what is and what is not necessary. Magistrate judges Federal district judges whose authority is based on federal statutes, not Article III powers (28 USC 631-639) Not authorized to enter final judgments make recommendations to Article III judges o Parties can stipulate and allow MJ to decide the case Reduces workload on federal district judges (e.g. supervise discovery)

Scope of Discovery Scope of Discovery: FRCP 26 general guidelines of discovery. All info that is relevant whether or not it would be admissible. A party is entitled to discovery of any matter that: a. Is not privileged: Information, even if relevant, can be outside discovery or privileged. b. Is not unreasonably cumulative or burdensome; and c. Is reasonably calculated: Includes material relevant and admissible at trial, but also information that appears reasonably calculated to lead to the discovery of admissible evidence (non-privileged material relevant to some claim or defense). See FRCP 26(b)(1). i. Under this revised provision, discovery is limited to the issues framed by the parties pleadings. Note: The requirement that the information sought be relevant to a claim or defense is narrower than a previous provision that the information be "relevant to the subject matter involved in the pending action." Henceforth, this broader scope is appropriate only if the court so orders, for good cause shown.

Court Has Discretion to Expand Scope: However, for good cause, the court may order discovery of any matter relevant to the subject matter involved in the action under FRCP 26(b)(1). ii. Rationale: The narrowed scope of discovery was designed to reduce fishing expeditions by counsel. court has the authority to confine discovery to the claims and defenses asserted in the pleadings, and the parties have no entitlement to discovery to develop new claims. Advisory Committee Notes to Rule 26. Although parties may attempt to circumvent this restriction by pleading more claims, they are limited by the constraints of Rule 11 sanctions. Court Must Limit Scope: Rule 26(b)(2)(C) If discovery is too cumulative/duplicative, party has already had ample time to discover, it is unduly burdensome or expensive. iii. Protective Orders: Rule 26(c): If a party believes his or her adversary is seeking information that it should not have, can show good cause to protect trade secrets and other info, prevent inconvenient places of examination, prevent unreasonable conduct during deposition, stop unduly burdensome discovery, or limit the scope of discovery.

173 Privilege: can only be invoked by the person who could assert the privilege at trial. (e.g. at deposition D1 is willing to reveal certain facts. D2 cannot object on grounds that the questions violate D1s privilege against self-incrimination. If D1 wishes to reveal anyway, he may; only he may invoke his privilege.) o Attorney-Client communications: effective representation requires full and fran communications btwn lawyer and client o Work Product Immunity: General policy against invading privacy of an attorneys preparation. o Allowing such discovery would interfere with the confidentiality of trial preparation. Opposing counsel would be able to "psych out" her adversary's strategy by learning through discovery who she had interviewed and what issues she had pursued in those interviews. It would be very difficult to separate factual information in trial preparation materials from the thought processes of the lawyer who developed them; if such discovery were allowed, it could reveal much about an adversary's legal theories, evaluation of witnesses, and plans for trial and settlement. If such discovery were routinely allowed lawyers would become reluctant to keep written records, an approach hardly calculated to improve the quality of representation. Allowing discovery of trial preparation materials would allow lawyers to ride on their adversary's coattails in preparing for trial by letting opposing counsel do all the work, and then obtaining the results through discovery. o Work product of a party or a representative of a party (e.g. a lawyer) made in anticipation of litigation is discoverable ONLY upon showing "substantial need" and "undue hardship" in obtaining materials in an alternative way. If the court orders the disclosure of work product, it must take steps to avoid the disclosure of mental impressions, conclusions, opinions, or legal theories of the disclosing party. However, a party may obtain, without a court order and without showing need and hardship, a copy of any statement previously made by that party. o Draft reports and disclosures of experts identified in required disclosures are work product. Confidential communications between such experts and counsel for the party are generally protected under the lawyer-client privilege, except for communications relating to the expert's compensation or to facts or data the attorney provided to the expert. [Fed. R. Civ. P. 26(b)] o Three categories of AWP First, as to documents prepared in anticipation of litigation that contain information that can reasonably be obtained through other means, discovery is barred. Second, if the requesting party demonstrates that she has a substantial need for materials developed in anticipation of litigation, and that similar information cannot be obtained through other means without substantial hardship, the court may order production of the materials. Qualified Immunity: If the opposing party can show it has substantial need and cannot get the info anywhere else, may be able to get documents. The party seeking discovery of privileged material bears the burden of showing this need. In Hickman v. Taylor, the court read this burden as implicit in the FRCP, but it was later codified in the FRCP in Rule 26(b)(3). Third, opposing counsel's thought process in preparing a case, such as legal theories or litigation strategy (often called "opinion work product"), cannot be discovered under the rule

174 o Must Invoke Privilege: A party must expressly make the claim of privilege or work-product immunity and must reveal the nature of the documents. Cannot simply keep quiet about documents and communications. o Procedure for Claiming Privilege When a party claims that certain discoverable information is privileged trial preparation material, he still must disclose the existence of, but not the content of, the information to the opposing party so that the opposing party may assess the claim of privilege. o Inadvertent Disclosure of Trial Preparation Materials If a party inadvertently discloses trial preparation material to opposing parties, he may still invoke a claim of privilege by notifying the opposing parties of the inadvertent disclosure and the basis for the claim of privilege. Once so notified, the opposing party may not use or disclose the trial preparation material until the claim of privilege is resolved, and he must take reasonable steps to retrieve the material if he disclosed it to others before being notified of the privilege. 1) Experts A party may depose experts who are expected to be called at trial (testifying experts). The opinions of experts who are retained in anticipation of litigation but who are not expected to testify at trial (consulting experts) may be discovered only upon a showing of exceptional circumstances under which it is impracticable to obtain facts or opinions by other means. [Fed. R. Civ. P. 26(b)(4)] 2) Protective Orders Protective orders may be obtained under Rule 26(c) to limit the nature and scope of examination or to terminate examination if discovery is abused. Rules and Cases Rule 26(b): Discovery Scope and Limits 1. 26(b)(1): Scope in General: Parties may obtain discovery on any non-privileged matter that is relevant to any partys claims or defenses. Relevant info need not be admissible at trial if discovery appears reasonably calculated to lead to the discovery of admissible evidence. i. 26(b)(2): Limitations on Frequency and Extent 1. (A) By order, court may alter limits in discovery rules. 2. (B) If party from whom ESI is sought shows that info is not reasonably accessible bc of undue burden or cost, then court has discretion to specify conditions or to not allow discovery. 3. (C) On motion or sua sponte, court must limit frequency/extent of discovery otherwise allowed if: a. (i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from another source that is more convenient, less burdensome, or less expensive; b. (ii) the party seeking discovery has had ample opportunity to obtain info by discovery in the action; or c. (iii) the burden or expense of proposed discovery outweighs its likely benefit. Consider: i. the needs of the case

175 ii. the amount in controversy iii. the parties resources iv. the importance of the issues a stake in the action v. the importance of the discovery in resolving issues d. Objection of overly broad and unduly burdensome (Moss v. Blue Cross and Blue Shield of Kansas, Inc.) (D. Kan. 2007) (pg. 364) ii. 26(b)(3): Trial Preparation Materials 1. (A) Documents and things prepared in anticipation of litigation or for trial by or for another party or its representative is not discoverable unless: a. (i) they are otherwise discoverable under Rule 26(b)(1); and b. (ii) the party shows it has a substantial need for the materials to prepare its case and cannot, without undue hardship, obtain info by other means 2. (B) Protection Against Disclosure. If court orders discovery, it must protect against disclosure of mental impressions, conclusions, opinions, or legal theories of a partys attorney/rep. 3. (C) Previous Statement. Any party may obtain persons own previous statement about the action or its subject matter. If request refused, person may move for a court order and Rule 37(a)(5) award of expenses applies. A previous statement is either: a. (i) a written statement person has signed/adopted/approved, or a recording; or b. (ii) a transcript of statement 4. Hickman v. Taylor (U.S. 1947) (pg. 340): Statements of survivors and witnesses taken in anticipation of litigation were protected under attorney work product rule b/c statements would show attorneys mental impressions. Moreover, those interviewed were available to the Ps to interview, and not providing information would not cause Ps undue hardship or injustice. iii. 26(b)(4): Trial Preparation: Experts 1. (B) When expert retained solely for anticipation of litigation, and not expected to testify at trial, those facts or opinions are not discoverable, unless: a. (i) as provided by Rule 35(b); or b. (ii) on showing of exceptional circumstances making it impracticable for party to obtain facts/opinions on the same subject by other means iv. 26(b)(5): Claiming Privilege or Protecting Trial-Preparation Materials 1. (A) When a party withholds info by claiming it is privileged or subject to protection as trial-preparation material, the party must: a. (i) expressly make the claim; and b. (ii) describe the nature of the info in such a way that doesnt reveal info itself, but will enable other parties to assess the claim 2. (B) Information Produced. If info produced in discovery contains privileged or protected material, then party making the claim may notify any party that received info of claim and basis for it. After notification, party must promptly return, sequester, or destroy the specified info and copes of it; must not use/disclose info until claim is resolved; must take reasonable steps to retrieve info if party has already disclosed it; and may promptly present info to the court under seal for determination of the claim. The producing party must preserve the info until claim is resolved.

176 a. Parties frequently use claw back agreement (codified under this rule) (parties agree to return inadvertently produced privileged/protected info, upon prompt demand); or quick peek agreement (provide un-reviewed materials w/out waiving privilege; requesting party then says what it wants produced (Rule 34); producing party then screens those documents as provided by Rule 25(b)(5)(A)) Hickman v. Taylor (U.S. 1947) (pg. 340): The extent to which work of an attorney in preparation for possible litigation is protected or discoverable by opposing party once litigation does arise. After sinking of the J.M. Taylor tug, counsel for the tug owners took statements privately of survivors and witnesses in anticipation of possible litigation from families of the deceased. Statements were not recorded formally, but rather, attorney took notes. o Interrogatories of Ps asks for statements of surviving crew members. o D refused to provide these b/c they were privileged materials assembled in preparation for litigation that implicated attorney conversations and work product Court rules that Ps have made more than an ordinary request for relevant, non-privileged facts, such that it is an attempt to secure the written statements and mental impressions of the attorney, which is privileged. Moreover, Ps have not shown that not having the information would unduly prejudice the preparation of their case or cause undue hardship or injustice. The witnesses are available for the Ps to interview as well, and counsel only wanted info to prepare for those examinations. o Court: Discovery is not a one-way vehicle for the P can work to his advantage and disadvantage Discovery is supposed to be broad and serve mutual knowledge o Attorneys must be able to work w/in a reasonable sphere of privacy in order to properly advance clients interests w/o interference Work product is protected in order to prevent in efficiency, unfairness, and bad practices in giving legal advice o An attorneys record of a witness statement will always be colored by the lawyers obligation to his client interests o Forcing attorney to write down everything witnesses told him is bound to lead to inaccuracy no purpose P admits that he only wants materials to help inform his own questions o Purpose of discovery is not to let one party steal the work of another It would be demoralizing, create conflict btwn attorneys Lawyers version of the witness statement could be different from witness testimony at trial Cant impeach witness or attorney based on poor recollections

177 Moss v. Blue Cross and Blue Shield (D. Kan. 2007) Issues When discovery sought appears relevant, does the opposing party have the burden of disproving relevance? o Does the opposing party also have the burden of proving that the discovery request would be overly onerous/time-consuming? Facts P claims that D violated the Family and Medical Leave Act by interfering with and denying Ps attempt to exercise her right to protected leave o P missed a few days of work due to depression and D fired her Ps interrogatories o #8 List any employees who have been terminated, disciplined, or suffered any adverse employment action WHATSOEVER in the past 10 years for violating Ds FMLA policy and provide supporting documentation Response: D argues that it is overly broad and unduly burdensome (thousands of employees) and no possibility of leading to admissible evidence o #9 List any employees who have been terminated or disciplined for failing to call in for two consecutive days and provide supporting documentation Response: D argues that it is overly broad and unduly burdensome (thousands of employees, unlimited date range, review of hundreds of files) and no possibility of leading to admissible evidence Ps document requests o #2 Any and all of Ps correspondence in Ds possession Overly broad/irrelevant could include proprietary and confidential information o #3 Any documents bearing Ps name that are in Ds possession Overly broad/irrelevant D has already produced relevant information o #7 Any and all documents from the last 5 years pertaining o legal actions involving P and that pertain to discrimination or FMLA claims Overly broad/irrelevant o #20 Any and all confidential settlement agreements pertaining to discrimination/FMLA claims Overly broad/irrelevant P is not brining discrimination claims, D would have to violate confidentiality agreements Holding Interrogatories o Relevancy P met burden of establishing interrogatories relevancy, Ds objection overruled Legal rules Generally a request for discovery should be considered relevant if there is ANY possibility that the information sought may be relevant to the claim or defense of any party Opposing party has the burden to establish that the discovery request: Does not fall within the scope delineated by Rule 26(b)(1) or (2); or Is of such marginal relevance that the potential harm occasioned by discovery would outweigh the ordinary presumption in favor of broad discovery Reasoning

178 P argues that in employment cases the scope of relevance is traditionally very broad and encompasses an employers general practices in relation to employment violations under the FMLA Court: Yes 10th Circuit has held that testimony by other employees about Ds practices helps to establish discriminatory intent P argues that its requests could identify whether D uniformly applied its FMLA and call-in policies Court: Yes P can establish pretext for discrimination by showing weaknesses, implausibility or inconsistencies in Ds reasons for its actions o Overly broad and unduly burdensome D has failed to provide an affidavit or specific information to substantiate its objections to Ps interrogatories D has not met burden to provide sufficient detail and explanation about the nature of the burden in terms of time, money, and procedure required for document production The mere fact that compliance will cause a great burden or injury to D does not in itself require denial of discovery o Overly broad and unduly burdensome on its face Court directs D to respond to #8 ONLY to the extent that it seeks to obtain information terminated or disciplined in WRITING Court also directs D to provide information on DOCUMENTED instances of employee terminations w/in last 5 years for attendance policy violations Legal rules Ds failure to specify potential burden is not necessarily dispositive if request is unduly burdensome on its face Request could be unduly burdensome on its face if it requires party to conduct mental gymnastic to determine which documents the other party wants Reasoning Court agrees with Ds argument that Ps request for documents pertaining to any type of adverse employment action is overly broad and could encompass difficult-to-obtain anecdotal evidence Court also agrees that lack of time scope in #9 is facially over-broad Documents o Overly broad and unduly burdensome Ds objections to #2, #3, and #7 are sustained Legal rules see above P provided a substitute doc request for #3 however, court can only provide guidance and cannot permit or deny documents prior to their SOP to the opposing party Relating to and regarding has been held to be overly broad in the past o However, attorneys routinely use these during discovery requests

179 o Depends on whether the words are used to target a specific person or subject or used to describe a very broad, general category of information Reasoning Requiring to provide any and all of Ps correspondence is overly broad on its face P had extensive communication with clients during her 5 years of employment at D Ps substitute request excluding documents pertaining to insurance benefits is still overbroad

o Relevancy Ds objection to #7 and #20 are sustained Legal rules Disclosure of confidential settlement agreements o 3-prong test o Strong public policy encouraging settlement o Relevancy issue Incorporates analysis of Interrogatory No. 10 #20: 3 prong test in def. of public policy encouraging settlement, when seeking disclosure of confidential settlement agreements; heightened standard gen FRCP Rule 26 standard compromise: demonstrate relevance DirectTV: need to produce anyway, dont pick This is DIFFERENT (parties previously settled w/not relevant to case) Rationale o P is seeking settlement agreements btwn D and persons who have no interest in this proceeding o Not calculated to lead to the discovery of admissible evidence Significance Interrogatory #8 requested documents should have been a document request under Rule 34 instead of an interrogatory under Rule 33 Rule 26(f) Conference of Parties-Planning for Discovery As soon as practicable, and in any event at least 21 days before a scheduling conference is held or the scheduling order required by Rule 16(b) is due (see below), the parties must confer to consider their claims and defenses, the possibility of settlement, initial disclosures, and a discovery plan. The parties must submit to the court a proposed discovery plan within 14 days after the conference addressing the timing and form of required disclosures, the subjects on which discovery may be needed, the timing of and limitations on discovery, and relevant orders that may be required of the court. Rule 26(f): Conference of the Parties; Planning for Discovery (1) Conference Timing. Parties must confer as soon as practicable, or at least 21 days before a scheduling conference is to be held or a scheduling order is due under Rule 16(b). Exceptions: proceedings exempted from initial disclosures in Rule 26(a)(1)(B) or when court orders otherwise.

180 (2) Conference Content; Parties Responsibilities. Attorneys and unrepresented parties are jointly responsible for conferring, where they must: o Consider the nature and basis of their claims/defenses and possibilities for promptly settling or resolving the case o Make/arrange for required Rule 26(a)(1) initial disclosures o Discuss issues of preserving discoverable info o Develop proposed discovery plan o Then submit to the court within 14 days after conference a written outline of discovery plan (3) Discovery Plan must state parties views and proposals on: o (A) Changes that should be made in timing, form, or requirements for Rule 26(a) disclosures, including when initial disclosures were/will be made; o (B) Subjects on which discovery may be needed, when discovery should be completed, whether discovery should be conducted in phases or limited to or focused on particular issues; o (C) Issues re e-discovery / disclosures, including form(s) in which it should be produced o (D) Issues re claims of privilege or protection of trial-preparation materials, and perhaps procedure for dealing with this o (E) Changes / added limitations that should be made in limitations on discovery imposed under FRCP or local rules o (F) Any other issues the court should issue under Rule 26(c) or Rule 16(b) (scheduling order) and (c) (attendance and matters for consideration at pretrial conference) (4) If necessary to comply with expedited schedule for Rule 16(b) scheduling order conferences, the court may use local rules to shorten deadlines for discovery conference and plan

GENERAL DISCOVERY RULES Rule 26(d): Timing and Sequence of Discovery (1) Timing. A party may not seek discovery from any source before the Rule 26(f) conference, except if a proceeding exempted from initial disclosure under Rule 26(a)(1)(B), other authorized by FRCP, stipulation, or court order (2) Sequence. Unless on motion the court orders otherwise, o (A) methods of discovery may be used in any sequence o (B) discovery by one party doesnt require any other party to delay its discovery Disclosure Requirements Rule 26 requires parties to disclose certain information to other parties without waiting for a discovery request. However, Rule 26 also has provisions allowing stipulation of the parties or court order to modify some disclosure requirements. Types of Disclosure Required Before making her disclosures, a party has an obligation to make a reasonable inquiry into the facts of the case. Rule 26 requires parties to disclose all information "then reasonably available" that is not privileged or protected as work product. A party is not relieved from her obligation to disclose merely because she has failed to complete her investigation or because another party has not made his disclosures or has made inade- quate disclosures. Three types of disclosure are required: initial disclosures, disclosure of expert testimony, and pretrial disclosures. Initial Disclosures Without waiting for a discovery request, a party must provide to other parties (unless stipulation or court order provides otherwise):

181 (i) The names, addresses, and telephone numbers of individuals likely to have discoverable information that the disclosing party may use to support its claims or defenses, unless solely for impeachment; (ii) Copies or descriptions of documents, electronically stored information, and tangible things that are in the disclosing party's possession or control and that the disclosing party may use to support its claims or defenses, unless solely for impeachment; (iii) A computation of damages claimed by the disclosing party and copies of materials upon which the computation is based; and (iv) Copies of insurance agreements under which an insurer might be liable for all or part of any judgment that might be entered. These disclosures must be made within 14 days after the meeting of the parties required by Rule26(f) unless a different time is set by court order or by stipulation. o Exemptions from Initial Disclosure Requirement Initial disclosures are not required in particular types of cases, such as actions to review an administrative record, actions to enforce an arbitration award, pro se litigation brought by prisoners, actions to quash or enforce subpoenas, or habeas corpus petitions. [Fed. R. Civ. P. 26(a)(l)(B)] Disclosure of Expert Testimony A party must also disclose to other parties the identities of expert witnesses expected to be used at trial. This disclosure generally must be accompanied by a report prepared and signed by each expert witness stating her qualifications, the opinions to be expressed, and the basis for those opinions. This disclosure must be made at the time directed by the court or, in the absence of any directions or any stipulations among the parties, at least 90 days before trial; if the evidence is intended solely to rebut another party's disclosure of expert testimony, it must be made within 30 days after disclosure of the evidence being rebutted. o This broad right under the Rules to discovery from testifying experts culminates a long trend toward liberal discovery based on the recognition that experts cannot be effectively crossexamined at trial without the opportunity to conduct discovery concerning their opinions and the bases for those opinions. o Non-testifying experts, however, are treated quite differently. Rule 6(a) does not require disclosure of the identity or opinions of non- testifying experts, and Rule 26(b)(4)(B) provides that a party may only seek discovery concerning non-testifying experts upon a showing of "exceptional circumstances." This protection echoes the similar protection for work product under Rule 26(b)(3, and for similar reasons. Pretrial Disclosures At least 30 days before trial, a party must disclose to the other parties and file with the court a list of the witnesses she expects to call at trial the witnesses she will call if the need arises, the witnesses whose testimony will be presented by means of a deposition and a transcript of pertinent portions of the deposition, and a list of documents or exhibits she expects to offer or might offer if needed. o Within 14 day after this disclosure, a party may serve objections to use of the depositions at trial and to the admissibility of disclosed documents and exhibits. Such objections are

182 waived if not made at this point, except for objections that the evidence is irrelevant, prejudicial, or confusing under Federal Rules of Evidence 402 and 403. Supplementation of Disclosures and Discovery Responses A party must timely supplement required disclosures and prior responses to interrogatories, requests for production, or requests for admissions if she learns that the information disclosed was materially incomplete or incorrect and the new information has not been made known to the other party in discovery or in writing. The duty to supplement also applies to an expert's reports and information from any deposition of an expert. [Fed. R. Civ. P. 26(e)] Rule 26(a): Required Disclosures (1) Initial Disclosures: o (A) A party must, without awaiting a discovery request, provide to the other parties: (i) the name and contact info of individuals likely to have discoverable information that the disclosing party may use to support its claims/defenses, unless only used for impeachment (ii) a copy or description of all documents and things that disclosing party has and may use to support its claims/defenses, unless only used for impeachment (iii) a computation of each category of damages claimed by disclosing party, and make available materials on which computation is based, unless privileged / protected from disclosure (iv) insurance agreements under which insurer may be liable to satisfy all or part of a possible judgment o (B) Proceedings Exempt form Initial Disclosure o (C) Generally, a party must make initial disclosures at/within 14 days after Rule 26(f) conference o (D) A party that is joined/served after Rule 26(f) conference must make the initial disclosures within 30 days after being served / joined o (E) No excuse for not disclosing information bc party has not fully investigated the case or bc it challenges sufficiency of other partys disclosures or other part has not made disclosures. Party must make initial disclosures based on the information then reasonably available. 26(a)(2) Disclosure of Expert Testimony (for experts to use at trial) o (C) A party must make these disclosures either by time stipulated by court, or at least 90 days before date set for trial. If evidence is solely to rebut/contradict the other side, then within 30 days after other partys disclosure Most courts have found that this obligation to disclose does not prevent disclosure of attorneys communications with testifying expert under Rule 26(b)(3), but some courts think that core work product contained within these communications should be protected by work product doctrine. 26(a)(3) Pretrial Disclosures: Information about evidence it may present at trial other than solely for impeachment o (B) Disclosures must be made at least 30 days before trial. Party may object within 14 days after disclosures made. Methods of Discovery Production of Documents and Things Rule 34 provides (i) for the production by a party (or, if accompanied by a subpoena, a nonparty) of physical material, including documents, relevant to the pending action; and (ii) that a party be required to permit entry onto land for relevant testing.

183 Usually used before depositions Advantages of using productions of documents and things: o For document requests, documents is construed widely to include almost any kind of written or electronically stored info o May also include inspection of real or personal property o Allows subpoena of docs/things from a nonparty (Rule 34(c)) Disadvantages of using productions of documents and things: o Difficulty of striking a balance between over- and under-inclusive specificity is required to make sure the right docs/things are delivered, and dont want to be too broad to avoid avalanche of docs Rule 34: Party may request another party to produce documents and things and may then inspect and copy them before returning o Rule 34(b)(1)(A) Request for each item must be stated with reasonable particularity o Rule 34(b)(1)(C) Request may specify form of production for ESI o Rule 34(b)(2)(D) If responding party objects to a requested form of ESI, or if no form was specified in the request, then the party must state form it intends to use. Because the receiving party need only produce documents that are within the scope of the request, parties serving requests for production under Rule 34 tend to draft them broadly to snare as much information as possible. Often, requests will be introduced by a tedious list of definitions, intended to assure that opposing counsel cannot construe the request narrowly to avoid revealing a critical document. o Parties resist document requests by construing them narrowly and by liberally invoking the privileges and other objections discussed in the previous chapter. If such objections are asserted without a substantial basis, the responding party may be sanctioned under Rule 37. In many cases, however, the objections do not so clearly transgress permissible bounds as to court the risk of sanctions.

Discovery of Electronically Stored Data The Rules require parties to discuss the discovery and preservation of electronically stored data and to report to the court on those discussions. Electronically stored information need not be produced if the responding party identifies it as from a source not reasonably accessible because of undue burden or cost. On motion to compel or for a protective order, that party must show to the court's satisfaction that its assertion is justified. Even then, the court may order the information produced for good cause, but it may also impose conditions such as cost-shifting or cost-sharing. [Fed. R. Civ. P.26(b)(2)(B)) Format for Producing Electronic Documents A requesting party may specify the form or forms for producing electronically stored information, and the responding party must use that form unless it objects (but the party must still produce other items to which it has no objections). The court will determine if the objection is valid. If the request does not specify the form for producing electronically stored information, the responding party may use any form in which the information is maintained or a form that is reasonably usable by the requesting party. [Fed. R. Civ. P. 34(b)] Safe Harbor Provision Rule 37(e) creates a safe harbor that would forbid sanctions against parties who lost information in the ordinary course of operating an electronic information system. The party would have to have taken

184 reasonable steps to save the information, however, after it became clear that it would be discoverable in litigation. Rule 37(e): Safe Harbor for Failure to Provide Electronically Stored Information. Absent exceptional circumstances, a court may not impose sanctions on a party for failing to provide electronically stored information lost as a result of routine, good-faith operation of an electronic information system. 1. Standard for what must be preserved is reasonableness. Party has duty to start preserving anything that could be discoverable under Rule 26 as soon as the litigation is reasonably foreseeable. 2. Consequences of spoliation (failure to preserve evidence): (1) Rule 37 sanctions; (2) Court can provide the jury with an adverse inference instruction: that party failed to preserve possibly relevant information that would adverse to the position that party is asserting. 3. Other Applicable Rules: Rule 26(f) discovery conference and plan (pg. _); Rule 34 request for documents & things (pg. _); Rule 26(b)(5) protecting privileged material (pg. _); Rule 26(b)(2)(B) no need to disclose not reasonably accessible ESI due to undue burden or cost (ex: backup takes) (pg. _) Teague v. Target Corp. (W.D.N.C. 2007) (pg. 391) (Court allows adverse inference instruction at trial for Ps spoliation of evidence in claim for wrongful discharge) P threw out her computer, which contained relevant evidence re her job search, after it crashed and her brother attempted but failed to fix it Spoliation Destruction or material alteration of evidence or failure to preserve property for anothers use in pending or reasonably foreseeable litigation Adverse Inference Instruction: Evidence of bad faith or fraudulent intent is not required for this instruction. Three elements should be shown to warrant such an instruction for spoliation: o Party in control of the evidence had an obligation to preserve it when it was destroyed P here had already hired counsel and filed claim when evidence destroyed o Destruction/loss was accompanied by a culpable state of mind Includes bad faith/knowing destruction; gross negligence; ordinary negligence o Evidence was relevant to the claims/defenses of party that sought the discovery of the spoliated evidence Quinby v. WestLB AG (S.D.N.Y. 2006) (pg. 392) (magistrate judge oversees e-discovery issues in gender discrimination and wrongful discharge suit against a large German bank; D asks to shift costs to P for producing e-mails that required restoring data from backup tapes) Applying the Zubulake Factors, magistrate judge grants cost-shifting only for restoring e-mails from one former employee bc D should have foreseen that e-mails from others would be requested Zubalake Factors for determining when e-discovery imposes such an undue burden or expense to allow cost-shifting (pg. 395): o The extent to which the request is specifically tailored to discover relevant information o The availability of such information for other sources o The total costs of production v. amount in controversy o The total costs of production v. resources available to each party o The relative ability of each party to control costs and its incentive to do so o The importance of the issues at stake in the litigation; and o The relative benefits to the parties of obtaining the information

185 Preservation o Doesnt have to preserve all info, but cant destroy unique, crucial information when it is reasonable foreseeable that it will be subject to discovery must put in place a litigation hold for those docs and any new relevant docs o Can choose the method for doing so

Depositions (Rules 27-32) Depositions are widely thought to be the most important step of the formal discovery process Advantages of using oral depositions: o Opportunity to question potential witnesses under oath, in a manner similar to trial (trial prep) o Responses to questions will have a degree of spontaneity not available in other discovery methods o Opportunity to follow up on info revealed in answers and to take questioning in a new direction o Anything recorded in deposition is usually available for use at trial (subject to rules of evidence) o Nonparties may be deposed Disadvantages of using oral depositions: o Expensive Pre-Action Depositions Prior to a lawsuit being filed, or while an appeal is pending, a potential party or party to an appeal may ask the court to order the deposition of any person in order to perpetuate her testimony. To obtain the order prior to trial, the potential party must file a verified petition in the federal court for the judicial district in which any expected adverse party resides. Contents of Petition The request for a court order is included within the petition itself. The petition also must show that, among other things, the petitioner expects to be a party to an action cognizable in a court in the United States but is presently unable to bring it or cause it to be brought. All expected adverse parties must be named. Notice and Appointed Counsel At least 21 days before the hearing date for the court order, the potential party must serve each expected adverse party with a copy of the petition and a notice of hearing. The manner of service is the same as for an original petition. If the expected adverse party cannot be so served, the court must appoint counsel for that party. Court Order If the court finds that ordering a deposition may prevent a failure or delay of justice, it will issue an order that specifies the person being deposed, the subject matter of the deposition, and the manner of the deposition. Rule 27: Depositions to Perpetuate Testimony if person might not be available for trial or appeal. o 27(a) Before an Action is Filed

186 (1) Petition to ask for order authorizing petitioner to depose the named persons in order to perpetuate testimony. Must show: (A) petition expects to be a party to an action in U.S. court, but cannot presently bring it (B) subject matter of the expected action and the petitioners interest (C) facts the petitioner wants to establish and the reasons to perpetuate the testimony (D) the names or a description of persons, and addresses if known, expected to be adverse parties (E) name, address, and expected substance of the testimony of each deponent (4) A deposition to perpetuate testimony may be used under Rule 32(a) in any laterfiled district-court action involving same subject matter

o 27(b) Pending Appeal. (1) Court where judgment has been rendered may, if appeal has been taken or may still be taken, permit party to depose witnesses to perpetuate their testimony. (2) Must show in motion: (A) name, address, and expected substance of testimony of each deponent; and (B) reasons for perpetuating testimony. Oral Deposition of a Witness A common form of discovery is the oral deposition under Rule 30. If the deponent is not available at trial, it may be used in lieu of her appearance as a witness. The deposition may be recorded by sound, sound and visual, or stenographic means. o Depositions may be taken by telephone or through other remote electronic devices. All parties may pose questions to the deponent. A party may not take more than 10 depositions, nor may she depose the same person more than once, without leave of court or stipulation of the parties. A deposition may not exceed "one day of seven hours" absent court order or stipulation to the contrary. Because counsel should have a thorough understanding of her case before taking depositions, the conventional wisdom is that they should come after interrogatories, which reveal general information and positions of the opponent, and after requests for documents, which produce the documents needed to examine the deponent effectively. In addition, because of their expense, it may be wise to postpone depositions until it is clear that trial is likely. Thus, depositions are frequently taken toward the end of the discovery phase. o However, taking an early deposition sometimes makes tactical sense. For example, counsel may wish to pin down an opponent to a version of the facts or a particular legal position before she (or her counsel) have conducted extensive discovery or educated themselves about the case. A deponent's untutored, spontaneous testimony early in the case may be more damaging than it would be after she becomes familiar with contradictory evidence. Compulsory Appearance of Witnesses (1) Subpoena Not Needed for Parties It is not necessary to serve a subpoena on an adverse party or an officer, director, or managing agent of a party to compel appearance; the notice of deposition is sufficient to compel attendance. For organizations, the notice may name the organization and state with "reasonable particularity" the matters to be covered. The organization then designates individuals to testify. [Fed. R. Civ. P. 30(b)(6), 37]

187 (2) Nonparties Should Be Subpoenaed If the witness to be deposed is not a party to the action, he should be subpoenaed. The subpoena may be served by any person who is not a party and is not less than 18 years old. Service is made by delivering a copy of the subpoena with any necessary fees to the person named in the subpoena. A nonparty organization may be required by subpoena to designate individuals to testify, as in (I), supra. [Fed. R. CIv. P. 30(b)(6), 45(b)] 3) Costs When Notifying Party Fails to Attend When the party who notices the deposition does not appear (in person or by an attorney) to take the deposition, and the other party does appear, the latter can obtain his costs of attending, including reasonable attorneys' fees. Rule 30: Depositions by Oral Examination 30(a)(1) Generally, a party may depose any person without leave of the court; o (2) except party must obtain leave of court when (A) parties havent stipulated otherwise AND (i) exceeds 10 depositions; (ii) person has already been deposed; (iii) party seeks deposition before time in Rule 26(d), unless person will be leaving the U.S. and unavailable; or (B) deponent is confined in prison o 30(a)(2)(A): Parties have 10 depositions as a matter of right, but court may allow more (in compliance with Rule 26(b)(2)). 30(d)(1): Each deposition is limited to 1 day of 7 hours, but court may allow additional time (in compliance with Rule 26(b)(2)). 30(b)(2): Producing Documents. Use of duces tecum to order deponent to produce documents/materials at deposition. 30(c)(2): Objections. Must object during deposition to put objection on the record, but deposition proceeds. Deponent may be instructed to not answer only when necessary to protect privilege, to enforce limitation ordered by court, or to present Rule 30(d)(3) motion to terminate or limit (on grounds that it is being conducted in bad faith or unreasonably annoys deponent or party) Deposition of Witnesses on Written Questions Rule 31 provides for written questions to witnesses (including parties) and is designed to facilitate the depositions of witnesses living a great distance from the parties. All parties can pose questions to the deponent. A party may not take more than 10 depositions, nor may she depose the same person more than once, without leave of court or stipulation of the parties. Use of Depositions at Trial or Hearing Subject to the rules of evidence, a deposition may be used (at trial or in a hearing) against any party who was present at the deposition or had notice of it: (i) To impeach the testimony of the deponent as a witness; (ii) For any purpose if the court finds that the deponent (including a party-deponent) is dead, at a distance greater than 100 miles from the place of trial (unless the absence was procured by the party offering the deposition), or unable to testify because of age, sickness, etc.; or

188 (iii) For any purpose if the deponent is an adverse party. [Fed. R. Civ. P. 32]

Errors and Irregularities in Depositions Rule 32 governs the waiver of errors and irregularities in the taking of depositions. As to Notice Errors and irregularities relating to the notice of deposition are waived unless written objection is promptly served on the party giving notice. As to Manner of Taking Errors of any kind which could have been obviated if promptly presented are waived unless seasonable objection is made at the time of taking the deposition (applies to form of questions, oath, conduct of parties, etc.). As to Completion and Return Errors and irregularities as to the completion and return of the deposition are waived unless a motion to suppress is made with reasonable promptness after the error was or should have been discovered (applies to signing, sealing, certification, and transmittal). As to Form of Written Questions Objections to the form of written questions are waived unless served on the party propounding them within the time for serving succeeding questions and within five days after service of the last questions authorized. Written Interrogatories to the Parties Rule 33 provides for written interrogatories to other parties and written answers by the party to whom the interrogatories are directed. The party must respond not only with facts which she herself knows, but also with facts that are available to her. The party may also be asked to give opinions, even on the application of law to facts. Initially, the requesting party may not serve more than 25 interrogatories including subparts without court order or stipulation, and leave may be granted to serve additional ones. (Rule 33) Advantages of using written interrogatories: o Usually the most useful mechanism for obtaining detailed and/or noncontroversial information from the other side o Inexpensive to prepare and to serve upon the opposing party o They are available for use at trial Disadvantages of using written interrogatories: o Typically crafted to contain as little useful info as possible, to avoid embarrassing admissions, and to place the facts in a light favorable to the client. Thus, interrogatories are probably most effective for obtaining basic background information, like the names and addresses of witnesses, the location and nature of records and other evidence the names of treating physicians, itemization of bills, and Similar information. o They are also useful to force an opponent to specify the grounds of the general claims raised in a complaint or answer, through so-called "contention interrogatories."

189 o Many lawyers recommend using interrogatories early in the case, to help develop a plan for further discovery through document requests and depositions. Rule 33(a)(1): Limit of 25 interrogatories unless court allows or parties stipulate otherwise.

Physical and Mental Examinations Order for Examination Rule 35 provides for an independent physical or mental examination of a party when that party's physical or mental condition is in controversy. Such exam is available only if ordered by the court, on showing of good cause. Traditionally, this rule has allowed exams only by "physicians." Now, however, it allows exams by a "suitably licensed or certified examiner," which would include, for example, doctors, dentists, occupational therapists, and any others required to be licensed and qualified to comment on a physical or mental condition. Report of Findings The person examined may request a copy of the examiner's report, but if that person so requests or takes a deposition of the examiner, she waives any privilege and must produce, upon demand, copies of her own doctor's reports of any other examinations of the same condition. (Rule 35) The only discovery tool that the court must approve in advance and party must show good cause for the examination. Applies to narrow group of cases where condition of the examinee is truly in controversy. Requests for Admissions Any party may serve on any other party a written request for admission as to the truth or genuineness of any matter or document described in the request. The matters will be considered admitted UNLESS the party upon whom the request was served returns a sworn statement denying the truth of the matters set forth in the request, or explaining why she cannot admit or deny them. Alternatively, the party upon whom the request was served can file written objections to those requests that she has a legal basis for not answering. A party may be asked to admit matters that are genuine issues for trial. The admission is for the purpose of the pending action only and may not be used against the party in any other proceeding. [Fed. R. Civ. P.36]

(Rule 36) Purposes: Both to reduce trial time: (1) to facilitate proof with respect to issues that cannot be eliminated from the case; (2) the narrow the issues by eliminating those that can be. Advantages of using requests for admissions: o Opportunity to lock in particular admissions or denials of fact that can be taken as true in the pending action o No limitation on number of requests for admission you can make. Use these after some discovery has been done, so you are drawing attention to specific documents and facts (to further explore specific contentions) Disadvantages

190 o If the admitting party has not thoroughly prepared for trial, she may learn later that she had grounds to contest facts previously admitted, and move to withdraw the admissions. Judges will often grant such requests if the admitting party has good ground to contest the facts: Naturally they prefer to see cases resolved on the evidence rather than on mistaken concessions of counsel. 36(a): Scope and Procedure. o (1) A party may serve on any other party a written request to admit, only for the purposes of the pending action, the truth of any matters within the scope of Rule 26(b)(1) relating to: (A) facts, the application of law to fact, or opinions about either; and (B) the genuineness of any described documents o (3) Time to Respond; Effect of Not Responding. A matter is admitted unless, within 30 days after being served, the party serves on the requesting party a written answer or objection re the matter. Shorter or longer time may be ordered by the court or stipulated under Rule 29. o (4) Answer. If not admitted, the answer must specifically deny it or state why the party cant truthfully admit or deny it. Answering party must make a reasonable inquiry to find out information. 36(b): Effect of an Admission; Withdrawing or Amending It. Admission cannot be used against a party in any other proceeding. A matter is admitted unless, on motion, allows withdrawal or amendment. Subject to Rule 16(e), court may allow withdrawal or amendment if: o It would promote the presentation of the merits of the case o It would not prejudice the requesting party in maintaining / defending action on the merits Informal Discovery (not discussed in FRCP) Any extrajudicial research or inquiry that attempts to obtain facts relevant to the case Includes: (1) nonparty interviews; (2) site visits; (3) exchange of information; (4) requests for information from govt agencies; (5) review of public records; (6) private investigation; (7) Internet research Advantages of using informal discovery: o May cost less o Often provides no notice to (nor requires cooperation with) opposing parties Disadvantages of using informal discovery: o Some info may be inaccurate o Be cautious of violating rules of professional ethics Enforcing Disclosure and Discovery Motion to Compel Disclosures and Discovery If a party fails to provide discovery or provides incomplete discovery (including disclosures and answers to interrogatories and deposition questions), the other party may move to compel discovery. A motion to compel must certify that the moving party has made a good faith attempt to obtain the discovery. [Fed. R. Civ. P. 37] o If the motion is granted, the court may order the noncomplying party to pay the moving party's expenses and fees for the motion to compel. Fed.R.Civ.P. 37 (a) (5). The court may also enter protective orders defining the scope of required discovery. Fed. R. Civ. P. 37(a)(5)(C).

191 Sanctions for Violation of Order to Compel If a party fails to comply with an order to provide discovery, the court may: (i) order the matters to be treated as admitted; (ii) prohibit the party from supporting or opposing designated claims or defenses; (iii) strike pleadings, stay or dismiss the action, or render a default judgment; or (iv) hold the delinquent party or witness in contempt (but the contempt sanction may not be used for refusal to submit to a physical or mental examination). The court may also assess reasonable expenses incurred because of the refusal, including attorneys' fees. [Fed. R. b. Civ. P. 37(b)] Immediate Sanction If a party fails to attend his own deposition or fails to provide any answers to interrogatories, a party may move for immediate sanctions (as opposed to moving to compel discovery). The motion must certify that the moving party has made a good faith attempt to obtain the answers. In response to a motion for immediate sanctions, the court may make such orders in regard to the failure as are "just," including: (i) ordering the matters to be treated as admitted; (ii) prohibiting the party from supporting or opposing designated claims or defenses; and (iii) striking pleadings, staying or dismissing the action, or rendering a default judgment. [Fed. R. Civ. P. 37(d)] Automatic Sanction The Rules also provide for an automatic sanction against a party who "without substantial justification" fails to disclose information as required under Rule 26, or who fails to supplement or amend discovery responses under Rule 26(e). Rule 37 provides that the party who fails to make required disclosures will not be permitted to use the information withheld as evidence at trial, at a hearing, or on a motion, unless such failure was "harmless." The court may impose other appropriate sanctions, including: (i) ordering the matters to be treated as admitted; (ii) prohibiting the party from supporting or opposing designated claims or defenses; (iii) striking pleadings, staying or dismissing the action, or rendering a default judgment; and (iv) informing the jury of the failure to make the disclosure. [Fed. R. Civ. P.37(c)] Note: Apparently, the failure to make required disclosures under Rule 26 may result in either a motion to compel or automatic sanctions.

Pretrial Conferences
Rule 26(f) Conference of Parties-Planning for Discovery As soon as practicable, and in any event at least 21 days before a scheduling conference is held or the scheduling order required by Rule 16(b) is due (see below), the parties must confer to consider their claims and defenses, the possibility of settlement, initial disclosures, and a discovery plan. The parties must submit to the court a proposed discovery plan within 14days after the conference addressing the timing and form of required disclosures, the subjects on which discovery may be needed, the timing of and limitations on discovery, and relevant orders that may be required of the court. Rule 16(b) Scheduling Conference

192 The court must (except in classes of cases exempted by local rule) hold a scheduling conference among the parties or counsel. The conference may be held by telephone, mailI, or other suitable means. The court must, within 90 days after the appearance of a defendant and within 120 days after the complaint has been served on a defendant, enter a scheduling order limiting the time for joinder, motions, and discovery. The order may also include dates for pretrial conferences, a trial date, and any other appropriate matters. This schedule cannot be modified except by leave of court upon a showing of good cause. [Fed. R. Civ. P. 16(b)] Pretrial Conferences The court may also hold pretrial conferences as necessary to expedite trial and foster settlement. A final pretrial conference, if any, is held as close to the time of trial as reasonable, and is for the purpose of formulating a plan for the trial, including the admission of evidence. o This conference is to be attended by at least one of the lawyers for each side who will actually be conducting the trial, and by any unrepresented parties. After a pretrial conference, an order must be entered that controls the subsequent course of events in the case. o Thus, the final pretrial conference order is a blueprint for the trial, usually listing witnesses to be called, evidence to be presented, factual and legal issues needing resolution, and like matters. It is thus said to supersede the pleadings and may be modified only for good cause. Sanctions A party or counsel may be sanctioned for failure to attend a conference or obey an order entered pursuant to a conference, for being substantially unprepared to participate in a conference, or for acting in bad faith. The court has a broad range of available sanctions including contempt, striking pleadings, and prohibiting the introduction of evidence. In addition, the court shall require the disobedient party or counsel to pay expenses incurred (including attorneys' fees) by other parties, unless the court finds that circumstances make such an award unjust.

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Trial
Right to a Jury Trial
The Seventh Amendment preserves the right to a jury trial in federal courts of facts in all "suits of common law" where the amount in controversy exceeds $20. The distinction is historical and turns initially on whether the claim or relief was available at law or in equity in 1791.The Supreme Court has demonstrated a clear preference for jury trial in doubtful cases by holding that: 1) If legal and equitable claims are joined in one action involving common fact issues, the legal claim should be tried first to the jury and then the equitable claim to the court (the jury's finding on fact issues will bind the court in the equitable claim) 2) If a procedure formerly available only in equity, such as a class suit, interpleader, or derivative action, is now permitted under the Federal Rules for determining a "legal" claim, a jury should try the fact issues; 3) If damages are claimed as part of an action seeking an injunction, the defendant cannot be denied a jury on the damages issues on the ground that they are "incidental" to the equitable relief; and 4) If a new claim is created that did not exist at common law, a right to a jury trial will exist if the claim is similar to a claim for common law rights and remedies, unless the statute creating the right provides otherwise. [See, e.g., Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340 (l998)-statutory damages under Copyright Act to be tried to jury Arguments in Support of the Jury: Democratic values, legitimizing the larger legal process, curbing arbitrary judicial behavior, inculcating community values, socialization, permitting citizen participation and education, as well as fair dispute resolutions. o Harry Kalven, The Dignity of the Jury (1964): Evidence that most people become highly serious when serving. Empirical data >> judges and juries agree on approximately 79% of cases, with comparable awards. o Valerie P. Hans and Neil Vidmar, Judging the Jury (1986): Trials about justice as well as law, most judges are still white, privileged males. The jury provides a dual legitimizing and socializing function. Arguments Against the Jury: Efficiency arguments, the amateurish nature of lay jurors, the notion that jurors are influenced by prejudice and passion. o Jerome T. Frank, Courts on Trial (1949): Emphasizes what he calls the realistic theory, that jurors are practically incapable of applying the instructions of the court. Jurors determine not the facts, but the legal rights and duties of the parties to the suit. Juries simply do not understand the judges statement of the legal rules. 3 Current Debates: o 1) Size: The Supreme Court has held that civil juries smaller than 12 do not violate the constitution. Empirical data, however, has suggested that a smaller jury increases unpredictability, reduces minority participation, and makes it more difficult for a lone juror to hold out. Proposals to restore 12 member juries under Rule 48 have not been adopted. o 2) Unanimity of the Jury: It is unresolved whether unanimity is required in civil cases. Note that Rule 48 requires a unanimous verdict unless the parties stipulate otherwise.

195 o 3) Complexity: Some have argued that complex cases exceed the practical abilities of lay jurors. May require people with expertise. Proposed Modifications: Allowing notetaking, allowing jurors to ask question, increasing juror fees, reducing juror down time, permitting jurors to have written copies of the instructions, rewriting jury instructions in simpler language.

Jury Trial Problems Rule 38 requires a party who desires a jury trial (on some or all fact issues) to file a written demand with the court and serve it on the parties. (Such demand may be indorsed upon a pleading of the party.) Failure to make such a demand within 14 days after the service of the pleading in which the jury-triable issue arose constitutes a waiver by that party of any right to trial by jury. A court may, within its discretion, order a trial by jury if the plaintiff's waiver was not intentional. o In the absence of compelling reasons to the contrary, a court should grant relief from waiver if the issue is one normally tried by a jury. [Cox v. Masland & Sons, Inc., 607 F.2d 138 (5th Cir. 1979)] A jury demand may be withdrawn only if all parties consent. Rule 38: Right to a Jury Trial; Demand a. 38(a): Right Preserved. Right to a jury trial as declared by statute or the 7th Amendment is preserved. i. Federal statutes: 1. Express right to jury trial 2. Intent of legislature: (a) legislative history; (b) delegation of jurisdiction to administrative agency or special court probably didnt intend right to jury trial; (c) confers public (not if correlates to admin scheme) or private right (not likely to have jury trial); (d) remedies test: equitable v. monetary relief (Chauffers) b. 38(b): Demand. Party may demand right to jury trial by (1) serving parties with a written demand (may be included in pleading) no later than 10 days after the last pleading directed to the issue is served; or (2) filing the demand in accordance with Rule 5(d) i. Note: It is best to do this in the answer or complaint c. 38(d): Waiver; Withdrawal. A party waives a jury trial unless its demand is properly served and filed. A proper demand may be withdrawn only if the parties consent. Jury Trials in Diversity Cases 1) Right to a Jury Trial The federal court must permit a jury trial in any diversity "suit at common law" even though the state court would deny a jury (the Seventh Amendment prevails over Erie); and a federal court will generally follow the federal practice of submitting issues of fact to the jury even though the state law assigns the issue to the court. [Byrd v. Blue Ridge Electric Cooperative, Inc., II.C.2.b., supra] If the state rule requires submission of a fact issue to the jury, the federal court may nonetheless direct a verdict under the usual standards or otherwise follow a federal practice that calls for the court to be the trier of fact. Likewise, state law is disregarded in determining the sufficiency of the evidence to create a jury issue; i.e., the directed verdict standards are always federal.

196 2) Motion for New Trial Based on Excessiveness of Verdict The Supreme Court has required federal trial courts to apply a state standard when considering a motion for a new trial based on excessiveness of the verdict. [Gasperini v. Center for Humanities, Inc., II.C.3., supra] Under the Seventh Amendment, federal appellate review of whether a trial court properly denied a motion to set aside a verdict as excessive is limited to whether the trial court abused its discretion in denying the motion. In contrast, a jury's determination of the amount of a punitive damage award is reviewed de novo on appeal. [Cooper Industries, Inc.v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001)] Jury Size and Composition In federal civil cases, a jury must have at least six and not more than 12 jurors. [Fed.R. Civ. P. 48] o There is no provision for alternate jurors. o A juror may be excused for good cause (e.g., illness) without causing a mistrial, so long as at least six jurors participate in reaching the verdict. The verdict must be unanimous unless the parties agree to the contrary. A race-neutral reason is required in exercising peremptory strikes of potential jury members from the panel. [Edmonson v. Leesville Concrete Co., 500 U.S.614 (1991)] o In cases in which the government is a litigant, peremptory challenges must be used for a gender-neutral reason. [I.E.B. v. Alabama, 511 U.S. 127 (1994)] o Because striking potential jurors significantly involves the state, this holding will undoubtedly be extended to litigation completely between private parties. Procedural Mechanisms i. Voir dire examination to disqualify jurors who cant be impartial and fair; also used to establish a report with jurors 1. Challenge for Cause: A reason to not have person on a jury; unlimited number 2. Peremptory Challenge: Any other reason to get rid of person on a jury; discriminatory exclusion has created much litigation (race, gender) a. Batson v. Kentucky (U.S. 1986) (pg. 457) (use of peremptory challenges by the govt to exclude black jurors violated 14th Amendment Equal Protection rights) i. Test to detect race-based peremptory strikes: 1. Opposing party shows circumstances create prima facie case that strike based on race 2. Burden shifts to proponent to provide a race-neutral reason for strike a. Need not be persuasive or even plausible, just a legitimate reason that doesnt deny equal protection (Purkett v. Elem, pg. 459) 3. Opposing party proves use of strike was motivated by purposeful discrimination b. Powers v. Ohio (U.S. 1991) (pg. 457): Court extended the right to a white criminal D who protested prosecutions exclusion of blacks from the jury i. Jury of ones piers = cross-section of community c. Edmonson v. Leesville Concrete Co. (U.S. 1991): Expanded to include such strikes in civil action (the trial process is being administered by public judicial system)

197 Chauffeurs v. Terry (U.S. 1990) (pg. 442) (relief sought for back pay for unions breach of its duty of fair representation) Held: Employees seeking back pay for unions breach of duty of fair representation has a right to a jury trial bc the remedy sought is legal. Right to a jury trial does not only apply to claims that were possible in 1791 (when 7th Amendment was passed), but rather, there is a right to a jury trial for any claim to determine legal rights (when equitable rights alone arent at issue) Chauffeurs Test for whether legal right is at stake (right to jury trial) o Compare the nature of the claim to 18th century actions: is it legal or equitable? Most comparable to an action by a trust beneficiary against a trustee for breach of fiduciary duty and breach of K issue needs to be proved both equitable and legal issues Other possible, but rejected, analogies: Vacation of arbitration award equitable o Only if the court asked to overrule arbitration award Trust beneficiary v. trustee for breach of fiduciary duty equitable o Best analogy bc union has duty to act for the benefit of the employees, and employees dont have control over the unions actions Attorney-client malpractice legal o Not similar bc client gets to control the atty o Look at remedy sought: is it legal or equitable in nature? (this is most determinative to whether there is a right to a jury trial) Damages (all that is sought here) legal Restitution (back pay in Title VII cases) equitable Damages incidental to / intertwined with injunctive relief may be equitable Where equitable and legal claims are joined in the same action, the legal claims must be tried to a jury before court resolves the equitable issues. Jury Instructions At the close of the evidence, or sooner at the court's direction, a party may file proposed instructions. Objections to giving or failing to give instructions must be made before the jury retires to consider a verdict. [Fed. R. Civ. P. 51] Jury Deliberations Jurors may take into the jury room all papers or exhibits ill evidence and their own notes. Instructions, pleadings, or other matters are generally improper for use in the jury room, except when they are formally admitted into evidence. A jury may not engage in experiments in the jury room, and jurors may not make private studies of documents or items outside of the jury room. Jurors may not view property or places involved in the case, except by court order. Jurors must not communicate with any nonjuror regarding the trial; in fact, any private communication between jurors and counselor parties is serious misconduct that may lead to a new trial. It is error for a juror, in the jury room, to state facts not in evidence; however, jurors are entitled to evaluate evidence presented in light of their general knowledge and experience. Jury Verdicts The trial court has discretion to decide the type of verdict to be used. [Fed. R. Civ..P. 49] Jurors cannot decide a verdict by flipping a coin or averaging (although averaging

198 may be proper as a starting point for discussion). 1) General Verdict In a general verdict, the jury finds for the plaintiff or defendant and gives the amount of damages or relief due. A general verdict implies that all essential issues were found in favor of the prevailing party. 2) Special Verdict In a special verdict, the jury is asked to make a finding on all material conclusions of fact, and the court applies the law. a. The procedure for a special verdict is to submit to the jury a series of questions regarding each ultimate fact. The court then makes legal conclusions based on those facts. b. Each question must deal with a single fact only and must not assume the existence of facts in dispute. c. A party waives objections to the form of the questions if she does not object when they are given. d. If the court fails, on request, to submit an issue to the jury, the case will be reversed unless the omission was harmless. If no request was made, a jury trial on the issue is generally held to be waived, and the court will decide it. [See Fed. R. Civ. P.49] 3) General Verdict with Special Interrogatories In a general verdict with interrogatories, the jury is asked to give a general verdict and also to answer specific questions concerning certain ultimate facts in the case. The purpose is to ensure that the jury properly considered the important issues. Interrogatories must be submitted with the general verdict to test the verdict's validity. [See Fed. R. Civ. P. 49(b)] 4) Erroneous Verdicts Inconsistent determinations are erroneous if they are irreconcilable (e.g., when a verdict is rendered against a person vicariously liable and the principal wrongdoer is exonerated). Additionally, when a verdict shows on its face that the jury failed to follow the court's instructions, the verdict may be set aside, and either the jury will be asked to reconsider its verdict or a new trial will be ordered. Any clear compromise verdict falls within this category, as does any verdict that simply finds for the plaintiff "for actual damages suffered." a. Correctable Errors Correctable errors must be raised by the aggrieved party or they are waived. It is an abuse of discretion for the court to refuse a request that the jury be told to reconsider an improper verdict that can be corrected. A jury may completely change its verdict when redeliberation is ordered. The court may not coerce the jury when ordering redeliberation. Juror Misconduct A new trial is appropriate if the juror gave false testimony on voir dire or concealed material facts relating to his qualifications to serve. A verdict will not be set aside if the alleged misconduct was harmless. Nonjurors may give evidence of misconduct except as to declarations of jurors to them. Under Federal Rule of Evidence 606(b), a juror may not testify as to any matter occurring during deliberations, except on the question of whether extraneous prejudicial information was improperly brought to the jury's attention, or whether any outside influence was brought to bear on any juror.

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Dismissals
Voluntary Dismissals The plaintiff can give up his case voluntarily by way of a voluntary dismissal, either without leave of court or with leave of court. [Fed. R. Civ. P.41(a)] Without Leave of Court If the defendant has not answered or filed a motion for summary judgment, the plaintiff may dismiss her case. She may also voluntarily dismiss on stipulation with the other parties. The plaintiff is charged with costs only if she files the action again after the voluntary dismissal. Furthermore, a voluntary dismissal is without prejudice, unless the plaintiff has previously filed and dismissed a case involving the same claim. Dismissal could be with prejudice, however, if such was a condition of the parties' settlement. With Leave of Court When a voluntary dismissal without leave of court is not available (i. e., there has been an answer, motion, or previous dismissal), the court has discretion to grant dismissal on such terms and conditions as the court deems proper. The dismissal is without prejudice unless the court specifies otherwise. If there is a counterclaim pending in the action, there can be no dismissal over the defendant's objection unless the counterclaim remains pending Rule 41(a)(1) By the P. (A) P may dismiss without a court order by filing (i) notice of dismissal before opposing party serves answer or SJ motion; or (ii) stipulation of dismissal signed by all parties. (B) Unless notice/stipulation states otherwise, dismissal is without prejudice. But, if P has previously dismissed an action based on or including the same claim, then notice of dismissal = adjudication on the merits. (link to res judicata) Rule 41(a)(2) By Court Order. Otherwise, at Ps request, court order can dismiss the action. Unless otherwise stated, dismissal is without prejudice. If D has pleaded a counterclaim before being served with Ps motion to dismiss, then action may only be dismissed over Ds objective if counterclaim can remain independently pending (not dismissed). Rule 41(c): Dismissing a Counterclaim, Crossclaim, or Third-Party Claim. Claimants voluntary dismissal by notice (Rule 41(a)(1)(A)(i)) must be made (1) before responsive pleading; or (2) if no responsive pleading, then before evidence is introduced at hearing or trial. Rule 41(d) If P files action based on or including same claim against same D, then court may shift costs of previously dismissed action.

Involuntary Dismissals On the defendant's motion, a court may order an involuntary dismissal against a plaintiff for failure to: (i) prosecute; (ii) comply with the Federal Rules; or (iii) comply with a court order. [Fed. R. Civ. P. 41(b)] An involuntary dismissal is with prejudice, meaning that it operates as adjudication on the merits, unless the court orders otherwise.

202 Rule 41(b): If P fails to comply with rules or court order, D can move to dismiss. Unless order otherwise states, dismissal = adjudication on the merits, except for lack of jurisdiction, improper venue, or failure to join party under Rule 19. (link to res judicata)

Bifurcation and Trifurcation

Rule 42(b) deals with the power of the court to separate issues into separate trials. Bifurcation and trifurcation allow a claim in one case to be broken into separate trials. A typical mode of bifurcation is to split the issues of liability and damages. Avoidance of Inflammatory Influences: Campolongo v. Celotex Corp. (DNJ 1988) (p. 477): Using bifurcation in order to conduct a trial free of inflammatory influences. The Court does not want the compensation piece to be tainted by evidence presented during the punitive phase. o Bifurcation must meet the goals of: o Simplification of the fact finding process. o Lack of confusion. o Judicial economy. o Fundamental fairness. Arguments in favor of bifurcation and trifurcation: o Efficiency. o Promotion of settlement. o Eliminating or isolating the emotional element from jury consideration. Arguments against bifurcation and trifurcation: o Removes the possibility of the jury making compromises. Jury trials should not be a mere mechanical method of applying law to facts. o Deprives the plaintiffs of their right to place circumstances and atmosphere from the reality of the injury.

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Summary Judgment
The motion for summary judgment under Fed. R. Civ. P. 56 is designed to allow early resolution of cases in which the plaintiff meets the minimal burden to plead the elements of a compensable claim, but cannot prove one or more of those elements. Summary judgment means entry of judgment by the court in favor of either the plaintiff or the defendant without trial. Standard Summary judgment shall be granted if, from the pleadings, affidavits, and discovery materials, it appears that there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. [Fed. R. Civ. P. 56] The court may not decide disputed fact issues on a motion for summary judgment; if there is a disputed material fact, the case must go to trial. Applicable to All Civil Actions Rule 56 applies to all parties and civil actions that are subject to the Federal Rules including actions by and against the United States, and to all types of claims that appear in a civil action (counterclaim, crossclaim, declaratory judgment, injunction, and interpleader). Time UNLESS local rules or court order dictates otherwise, a party may file a motion for summary judgment any time until 30 days after close of all discovery. [Fed. R. CIv.P. 56 (b)] If a motion is premature, the court may defer ruling on it. Partial Summary judgment may be partial (as well as complete). Example: Summary judgment may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages. Support The motion may be supported or opposed with affidavits or other declarations made under penalty of perjury, depositions, pleadings, admissions, answers to interrogatories, or other materials in the record. Affidavits 1) Affidavits or declarations must: (i) be made on personal knowledge; (ii) set forth such facts as would be admissible in evidence; and (iii) show the affiant is competent to testify. 2) A party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence. 3) If a party fails to support an assertion or factor fails properly to address another party's assertion of fact, the court may (i) consider the fact undisputed for purposes of the motion, (ii) grant summary judgment if appropriate, (iii) give an opportunity to address the fact, or (iv) issue any other appropriate order.

205 4) When the party opposing the motion shows by affidavit or declaration that he cannot present facts, he may state the reasons for their unavailability or declarations. The court may then deny the motion, order a continuance to permit affidavits to be obtained or depositions to be taken, or make such other order as is just. 5) When affidavits or declarations are made in bad faith, the court may: a) Order the party using them to reimburse the other party for those expenses that the affidavits caused him, including attorneys' fees. b) Adjudge in contempt the offending party or attorney. Relationship to Motion to Dismiss A motion pursuant to Rule 12(b)(6) to dismiss a complaint for failure to state a claim upon which relief can be granted differs from a motion for summary judgment in that the former is addressed only to the legal sufficiency of the complaint. Differences btwn motions 12(b)(6) MTD made solely based on the allegations in the pleadings Rule 56 MSJ made based on the pleadings and on affidavits and discovery evidence Rule 50 Directed Verdict made based on pleadings, discovery evidence, and evidence presented at trial (testimony, admissions, etc.) o After both sides have presented case but before matter is submitted to the jury for judgment All of these motions tend to favor D To win MSJ or DV, P would have to prove that he had evidence to meet all of the elements in the cause of action production and persuasion burdens Material facts relate directly to the cause of action

Relationship to Motion for Judgment on the Pleadings Similarly, a motion for judgment on the pleadings presents the moving party's contention that on the face of the pleadings, he is entitled to judgment. Theoretically, matters outside the pleadings are irrelevant to a decision on either of these motions. However, a party making such a motion and accompanying it with an affidavit or other matters outside the pleadings may in reality be making a motion for summary Judgment, putting the wrong label on the motion. The court is expressly authorized to treat such a motion as one for summary judgment and to conduct subsequent proceedings thereon in accordance with the rule on summary judgment, giving the parties full opportunity to present material made relevant by that rule. Rule and Cases o Burden of Production: o On the Movant: Cannot just cite the complaint, and may be supported by depositions, interrogatories, affidavits, and any other materials that present facts that would be admissible at trial. Hearsay, speculation, conclusions of law, conclusory ultimate facts, and promises that the necessary evidence will be offered at trial therefore cannot support a motion for summary judgment, even when presented by an otherwise proper affidavit. o 2 Ways to Discharge Burden: What are the 2 ways a movant could discharge its burden in a motion for summary judgment? The Adickes Way: Movant must use affirmative evidence to foreclose the possibility that the claimant could meet the burden of persuasion in her claim. Adickes v. S.H.

206 Kress and Co. (1970) (Justice Harlan; claim was that store conspired with police officer not to serve blacks and whites seated together) The Celotex Way: Movant does not have to produce its own evidence. Celotex Corp v. Catrett (1986) (Justice Rehnquist) Party seeking summary judgment bears the initial responsibility of pointing out to the district court the basis for its motion, and identifying those portions of the pleadings, depositions, etc which it believes demonstrate the absence of a genuine issue of material fact. A conclusory statement is insufficient. o Non-Movant: If the movant meets his burden of production, Rule 56(e) says the opposing party may not rest upon their complaint but must, by affidavits or otherwise provided in rule 56, set forth specific facts showing that there is a genuine issue for trial. Rule 56(f) says the nonmovant can specify reasons in an affidavit why it is currently unable to produce evidence (needs more discovery, etc and be sure to say what they need to discover) and the court can deny the motion or order more depositions and other discovery, depending on the reasonableness of the situation. o Evidence Read in the Light Most Favorable to the Nonmoving Party: The 56(e) evidence is considered in the light most favorable to the nonmoving party. Note how this parallels the standard in the 12(b)(6) motion. Adickes v. S.H. Kress and Co. o Scott v. Harris (2007)(Justice Scalia) Harris was injured when a police officer rammed his car with the police cruiser to stop a high speed chase. Held there was no genuine issue b/c of videotape. Also decided for policy reasons loathe to lay down a rule requiring the police to allow fleeing suspects to get away [when they pose a danger to the public]. It is obvious the perverse incentives such a rule would create. Stevens Dissent: Court.. used it observation of the video as an excuse for replacing the rule of law with its ad hoc judgment, If two groups of judges could disagree so vehemently eminently reasonable that a reasonable juror could disagree with this Court o Strategic Considerations: o Why would a defendant move for summary judgment? Efficiency, cost-savings. Avoid the jury. Pressure for settlement. Force the plaintiff to reveal. o Why shouldnt a defendant move for summary judgment? May reveal to the plaintiff the holes in his or her arguments Rule 56 (post-discovery; pre-trial adjudication w/o a trial) a. Applies to both jury and non-jury cases b. Judge is trying to predict what evidence will have been admitted by the time of a motion for directed verdict, so parties have to provide more than pleadings to show what evidence will be shown at trial. i. Relates to the expanding role of judges and diminishing role of juries as it moves the judge into the fact-finding role, though decision rendered as a matter of law c. Rule 56: Summary Judgment i. 56(a) By a Claiming Party (P) may move for SJ on all or part of a claim, w/ or w/o supporting affidavits. The motion may be filed at any time after: (1) 20 days after commencement of the action; or (2) the opposing party serves a SJ motion

207 ii. 56(b) By a Defending Party (D) may move at any time for SJ w/ or w/o supporting affidavits on all or part of a claim. iii. 56(c)* Serving the Motion; Proceedings. Motion must be served at least 10 days before the hearing. Opposing party may serve opposing affidavits before hearing day. The judgment sought should be rendered if the pleadings, discovery, and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. 1. Genuine issue: something a reasonable jury could disagree with the moving party about 2. Material fact: an outcome-determinative fact 3. Evaluate contextually re who is moving and what they are claiming iv. 56(d) Case Not Fully Adjudicated on the Motion (SJ for part of claim) 1. (1) Est. Facts. Court should determine and specify in the order what facts are not genuinely at issue. 2. (2) Est. Liability. Can make an interlocutory SJ on liability alone, and damages issue can then go to the jury. v. 56(e) Affidavits; Further Testimony. 1. (1) Supporting/opposing affidavit must be made on personal knowledge, set out facts that would be admissible in evidence, and show affiant is competent to testify on matters stated. Court may permit affidavit to be supplemented/opposed by deps, answers to rogs, or additional affidavits. 2. (2) Opposing Partys Obligation to Respond. Opposing party may not rely only on allegations/denials in its own pleading, but rather must by affidavits or otherwise, set out specific facts showing a genuine issue for trial. If no response can lose. vi. 56(f) When Affidavits Are Unavailable. If opposing party shows, by affidavit that, for specified reasons, it cannot present facts essential to justify its opposition, the court may: (1) deny the motion; (2) order a continuance to enable affidavits, deps, or other discovery; (3) issue any other just order. vii. 56(g) Affidavit Submitted in Bad Faith. Then court must order submitting party to pay other partys reasonable expenses, including atty fees, it incurred as a result. Party or atty can also be held in contempt. Adickes v. S.H. Kress & Co. (U.S. 1970) (pg. 466) (1983 claim against store for conspiring with police and discriminating against white teacher w/ black students) Facts o D restaurant refused to serve P, and she was arrested after she left the restaurant on a charge of vagrancy o D did serve 5 black students that were with P o P alleged that D violated her 14th amendment civil right and sought damages under 42 USC 1983 o She was refused service b/c she was a Caucasian in the company of Blacks o Custom of segregation Holding o Ds SJ motion denied bc D didnt carry its burden bc failed to foreclose possibility that policeman in the store had understanding with store employee that P not be served there is a genuine issue of material fact

208 o The moving party has the initial burden of production, and the non-moving party is not obligated under Rule 56(e) to present opposing evidence unless/until the moving party meets that initial burden Court views the evidence in light most favorable to non-moving party Reasoning o Conspiracy btwn a state official and a private employee is clearly sufficient to establish state action essential to establishing a 14th amendment violation REGARDLESS of whether the officials actions were authorized o D relies on affidavits from Ds employees, the police, and Ps own acknowledgment that she had no direct knowledge of any arrangement to argue that there are no material issues of fact However, P had sufficient circumstantial evidence and argued that Ds characterization of the restaurant environment as explosive was inaccurate material issues of fact o D failed to meet his burden Didnt provide enough evidence to definitively prove that there was no communication btwn D and police or that there was no policemen in the store jury could infer that police and D had a meeting of the minds about Ps arbitrary arrest Had to burden to prove that policeman definitely was NOT in the store o B/c D failed to meet his burden, P did not to need to proffer evidence showing that there was a material issue of fact

The Trilogy Cases: Celotex; Anderson; Matsushita Celotex Corp. v. Catrett (U.S. 1986) (pg. 476) (wrongful death claims against several asbestos manufacturers) Facts o Ps husband died and P filed suit against 15 corporations alleging that their asbestos products contributed to his death o D filed MSJ argued that P failed to demonstrate that any of Ds products were the proximate cause of her husbands death o No witnesses who could testify that Ps husband was exposed to Ds products o P produced a few affidavits and letters to demonstrate that there were material issues of fact D argued that they would be inadmissible hearsay Holding The non-moving party must go beyond the pleadings to specify facts showing a genuine issue, but is not required to provide admissible evidence (Rule 56(e)) Effectively overrules Adickes: Moving party need only show that the non-moving party has no evidence to support an essential element (more D-friendly bc no need to produce evidence that negates Ps claim, but just to specifically point to Ps lack of evidence) o If moving party effectively shows no genuine issue of material fact, the non-moving party must then show that there is some evidence to support a genuine issue of material fact has to show their cards, so risk that this is unfair to Ps generally Reasoning o Plain language of Rule 56(c) mandates entry of MSJ if after a reasonable time for discovery has passed, there is insufficient evidence to establish the existence of a key element of the case

209 o Complete failure of proof concerning an essential element necessarily renders all other facts immaterial o No implied or express requirement that moving party provide affidavits or any other supporting materials 56(a) and (b) moving party can file motion with or w/o affidavits o Court can just look at all the evidence produced during discovery, as well as the pleadings o Moving partys burden is to merely show or point out to the court the deficiencies in the non-moving partys case o Non-moving party must then present enough evidence to support a dispositive element for which it bears the burden of proof o MSJ has long been held to be an integral part of securing a just, speedy, and inexpensive determination of every action favored motion under Federal rules o Motions to Dismiss based on the pleadings are rarely granted MSJ therefore have a greater role in protecting defendants from claims that have no factual basis Significance o Courts are more hospitable to MSJ and have equated them to Rule 50 directed verdicts prediction of trial outcome based on available evidence Infringement on jurys prerogative? o Can non-moving party present hearsay evidence to combat MSJ? o Rule 26 can pursue something that leads to admissible infor however, when MSJ is filed, discovery is over, court has to consider admissibility o Evidence doesnt have to be in a FORM that would be admissible at trial, but substance of evidence must still be admissible o If D points to essential element and says that it has not been substantiated, burden is on P to produce dispositive evidence or ask for more time o Mirror image of directed verdict taking the case away from the jury b/c a reasonable jury could only decide the case one way Justice Brennans Dissent: Courts legal analysis is correct, but unclear guidance to what a moving party must actually do/show

Anderson v. Liberty Lobby, Inc. (U.S. 1986) (pg. 484) (P must prove actual malice for libel suit) Moving party must meet the clear and convincing evidence standard to show that the opposing party cant prove their claim/defense (not enough to predict how jury will decide) o This is a higher burden of proof than the more reasonable than not (preponderance of the evidence) standard Dissent: allows judge to inappropriately step into role of the jury; difficult to apply bc requires foreseeing what will be presented at trial, suggesting judge is making a credibility decision Matsushita v. Zenith (U.S. 1986) (pg. 485) (claim that Japanese cos. conspired in violation of Sherman Act to push American cos. out of U.S. market) Where the record taken as a whole could not lead a rationale trier of fact to find for the nonmoving party, there is no genuine issue for trial. Court can weigh expert testimony and grant SJ if nonmoving partys expert is not reasonable or credible, so no genuine issue of material fact (here, opinion was implausible and inconsistent with other evidence) so having an expert will not protect nonmoving party from SJ Dissent: Inappropriate for court to judge quality/value of expert witness; this goes beyond showing no evidence and infringes upon jurys role

210 Scott v. Harris (S. Ct. 2007) (pg. 489) (high-speed car chase) Even highly debatable physical evidence can be used for SJ To determine the reasonableness of the seizure, court balances nature and quality of individuals 4th Amendment interests against importance of the governmental interests that may justify the intrusion o Court looks at culpability of P and the possible lives at risk o Mixed question of law and fact: to determine whether qualified immunity applies (reasonableness of seizure to see whether constitutional violation), must evaluate the facts/evidence Legal rules o Saucier: qualified immunity cases Courts must resolve a threshold question taken in light most favorable to an injured party, do the facts alleged show the officers conduct violated a constitutional right They can then determine whether right was sufficiently established w/in the context of the particular case o Anderson: mere existence of an alleged factual dispute is insufficient there must be ne genuine issue of material fact o Graham: a claim of excessive force in making a seizure is properly analyzed under the 4th amendments objective reasonableness standard Balancing of persons interests against govts interests Dissent: If even judges in Supreme Court and below come to such different decisions, then it suggests that reasonable ppl could arise at different conclusions, so it should go to the jury

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Motion for Judgment as a Matter of Law (Formerly Directed Verdict)

If the judge concludes that the plaintiffs case is so weak that no jury, acting rationally on the evidence before it, could find for her, allowing the case to go to the jury simply invites irrational decision-making based on irrelevant or prejudicial factors method for protecting neutral principles of law from compassion and prejudice Historically, a judge could direct a particular verdict whenever the evidence viewed in the light most favorable to the party against whom the verdict was directed (including legitimate inferences in that party's favor) and without considering the credibility of witnesses was such that reasonable persons could come to only one conclusion. Today, this can be done pursuant to a party's motion for judgment as a matter of law ("J MOL"). o The motion may be made by any party any time before submission of the case to the jury, and the moving party must specify the judgment sought and the law and facts on which it is entitled to judgment. o The motion may be granted only after the nonmoving party "has been fully heard" on the matter. To grant the motion, the court must find that "a reasonable jury would not have a legally sufficient basis to find for the party on that issue." [Fed. R. Civ P.50(a)] Standards o A few state courts hold that a case should go to the jury if there is even "a scintilla" of evidence to support the opposing party's case. Under this test, if the plaintiff has any evidence to support the elements of her claim, she will get to the jury. o Another suggested standard requires the judge to consider only the evidence that supports the case of the nonmoving party (usually the plaintiff). Under this standard, the judge must assume the truth of all evidence offered by the nonmoving party (usually the plaintiff), take all the inferences from the evidence in the light most favorable to that party, and enter judgment as a matter of law only if that evidence would not support a verdict for the nonmoving party. o Court could also consider evidence put forth by the moving party a. Rule 50(a)(1): If party has been fully heard on an issue during jury trial and the court finds a no reasonable jury would have a legally sufficient basis to find for the party on that issue, the court may; ii. (A) resolve the issue against the party; and iii. (B) grant a motion for JMOL against the party on a claim/defense that requires favorable finding on that issue b. Rule 50(a)(2): Motion needs to be made before the issue goes to the jury. c. Judge must view evidence in light most favorable to nonmoving party d. Court is more likely to grant JNOV under Rule 50(b) rather than pre-verdict motion bc if they are reversed on appeal, then there has to be a new trial bc no jury verdict to defer to fairness and judicial economy. Galloway v. U.S. (U.S. 1943) (pg. 510) (insane soldier seeking disability benefits) iv. Lower courts found evidence legally insufficient for Ps case, Supreme Court affirms bc his burden was to prove total and permanent disability was continual during years after discharge (insufficient evidence re a gap of years) o P had to burden to prove total and permanent disability staring on and continuing from May 31, 1919 Court-martial for incidents in France is not dispositive of insanity Other testimony about his instability is speculative

214 No evidence covering 8 year gap if he was insane, there should have been continuously sustained and visible evidence Cant draw favorable inference P should have been able to provide proof, P must have deliberately chosen not to Court cannot allow a jury to substitute inference for evidence nothing to show totality or permanence o 7th amendment doesnt apply to this case Under 1791 common law, citizens did not have a right to a jury trial when bringing claims against the U.S. Right of action under statutory law governing this program Court have repeatedly up hold a judges right to issue a directed verdict practice has been approved in the Federal Rules Judges also weighed evidence and removed some issues from a jurys consideration in the 1790s
24. The Judge and the Jury, Part One

Iii

Judgment on Partial Findings In a nonjury trial, the judge may enter a judgment as a matter of law against a party on any issue whenever there are sufficient facts to resolve the issue, provided that the party has been fully heard on the issue. If the issue is dispositive of a claim or defense, the judge may enter judgment as a matter of law against a party on that claim or defense. The judge may also wait until the close of all evidence to render judgment. Because the judge is acting as the trier of fact, she decides issues of disputed facts, and she may consider the credibility of witnesses. The judgment must be supported by findings of fact and conclusions of law. [Fed. R. Civ. P. 52]

Judgment
Relief that May Be Given Except in default cases, the court is not limited to the demand for relief in the pleadings and may give any relief that is appropriate based on the evidence. Thus, damages may exceed the plaintiff's demand and an injunction may be entered although not requested. Interest on a money judgment is awarded at the rate provided under state law from the date of judgment Judgment on Multiple Claims or Parties When multiple claims or multiple parties are involved in an action, the court may enter a

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215 final judgment as to fewer than all of the claims or parties only upon (i) an express determination that there is no just reason for delay, and (ii) an express direction for the entry of judgment. Unless the trial judge makes such an express determination, the order determining the merits of fewer than all of the claims or dismissing fewer than all of the parties

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Final Relief
Equitable Relief 1) Basic Principle: Equitable Relief is meant to be available only when money damages are inadequate. 2) Forms of Permanent injunctions: a. Single Act injunction. b. Long-term injunction. 3) Standard for Issuing a Permanent Injunction: Whether Damages would be an Inadequate Remedy. a. Harm P Would suffer Outweighs the Harm D would Suffer from Granting an Injunction in Error: The dilemma that a court is in when it grants a preliminary injunction is that it simply does not know how the case will turn out on the merits. b. Plaintiffs Likelihood of Success on the Merits. c. The Injunction Would Not Disserve the Public Interest. Walgreen Co. v. Sara Creek Property Co. (7th Cir., 1992)(Judge Posner)(p. 101): Walgreen seeks a permanent injunction, keeping Sara Creek Property from leasing space in the mall to anyone else who wants to operate a pharmacy. Posner grants the injunction, finding the costs to be outweighed by the benefits. o Inadequacy Requirement: Since damages are the norm, injunctions are not granted as a matter of course, but only when the plaintiffs damages remedy is inadequate. o Balancing Exercise: The choice between remedies requires a balancing of the costs and benefits of the alternatives. o Distinguishing Standard from Preliminary Injunction: When the issue is whether to grant a permanent injunction, the burden is to show that damages are inadequate, not that denial of injunction will work irreparable harm. o Benefits of Injunctions: First, it shifts the burden of determining the cost of the defendants conduct from the courts to the parties. Second, the market is more efficient at making such evaluations. o Benefits of Damages: First, they avoid the cost of continuing supervision. Masters and Monitors: Often, long term injunctions require the court to seek assistance from masters or monitors. See FRCP 53. Consent decree: Here, settlements are negotiated by the parties but approved and enforced by the court, which retains jurisdiction over the dispute. Violation of a consent decree can trigger judicial enforcement through hearings and sanction. Promotes flexibility in settlement, but presents question about the use of judicial resources to enforce a privately constructed settlement. Enforcement of Equitable Relief: o Maintenance of Jurisdiction: With a permanent injunction, the Court retains jurisdiction over the dispute. If a party fails to conform to an injunction, a party could ask the court to hold that party in contempt. The same is not true of damages, where the Court relinquishes jurisdiction upon the entrance of judgment.

218 o Procedure: In order to enforce a judgment of equitable relief, the claimant needs a judgment (see FRCP 58 and FRCP 54(a)). Under FRCP 70, the Court an enforce some decrees by appointing a person to engage in the required behavior at the cost of the disobedient party. Rule 54. Judgments; Costs (a) Definition; Form. "Judgment" as used in these rules includes a decree and any order from which an appeal lies. A judgment shall not contain a recital of pleadings, the report of a master, or the record of prior proceedings. Rule 58. Entry of Judgment (a) Separate Document. (1) Every judgment and amended judgment must be set forth on a separate document, but a separate document is not required for an order disposing of a motion: for certain judgments (see rule) (2) Subject to Rule 54(b): (A) unless the court orders otherwise, the clerk must, without awaiting the court's direction, promptly prepare, sign, and enter the judgment when: Certain verdicts or judgments are given (see rule) Rule 70. Judgment for Specific Acts; Vesting Title If a judgment directs a party to execute a conveyance of land or to deliver deeds or other documents or to perform any specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court and the act when so done has like effect as if done by the party. On application of the party entitled to performance, the clerk shall issue a writ of attachment or sequestration against the property of the disobedient party to compel obedience to the judgment. The court may also in proper cases adjudge the party in contempt. If real or personal property is within the district, the court in lieu of directing a conveyance thereof may enter a judgment divesting the title of any party and vesting it in others and such judgment has the effect of a conveyance executed in due form of law. Declaratory Relief The power of courts to issue clarifications is provided by statute. The difficulty that arises with declaratory relief is that courts cannot act in the absence of a concrete, live controversy under Article III. Accordingly, declaratory relief is only available in the context of real controversies. 28 U.S.C.A. 2201 Creation of remedy (a) In a case of actual controversy within its jurisdiction, except with respect to Federal taxes other than actions brought , or in any civil action involving an antidumping or countervailing duty proceeding regarding a class or kind of merchandise of a free trade area country , as determined by the administering authority, any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such. (b) For limitations on actions brought with respect to drug patents 28 U.S.C. 2202. Further relief

219 Further necessary or proper relief based on a declaratory judgment or decree may be granted, after reasonable notice and hearing, against any adverse party whose rights have been determined by such judgment. Damages (Legal Relief) Overview: The remedy of money damages poses difficult questions of valuation. Legal relief: o Nominal damages. o Compensatory damages. o Punitive damages. o Attorney fees and court costs. 42 U.S.C. 1983: Civil action for deprivation of rights Every person who, under any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia. Carey v. Piphus (US 1978) (Justice Powell) (p. 108): The Court considers the elements for recovery of monetary damages under 42 USC 1983 by two students who were suspended from public schools without procedural due process. The court finds that, in the absence of proof of actual injury, the students are entitled to recover only nominal damages. In short, actual injury by the deprivation of due process is a necessary prerequisite to recovery under Section 1983 for the deprivation of procedural due process. o Actual Injury for Deprivation of Procedural Due Process: Procedural due process rules are meant to protect persons not from the deprivation, but from the mistaken or unjustified deprivation of life, liberty, or property. o Bottom Line: The Court does not rule out the possibility that an individual could recover for distress caused by the denial of procedural due process itself. Such recover, however, must be predicated upon the production of evidence. In short, the Court holds it will not presume actual damages, the plaintiff must meet his or her burden of production. Punitive Damages: o Function: Punitive damages are meant to deter future wrongful conduct and to express public disapproval of the injuring behavior. o Egregious Conduct: A plaintiff seeking a punitive damage award usually must show that the defendant acted egregiously, acting with malice or with reckless or careless indifference. o Judicial Review: Although the Court has rejected claims that the Excessive Fines Clause of the 8th Amendment sets a limit on punitive damages, judicial review continues to be a significant check against arbitrary awards. BMW of North America, Inc. v. Gore (US 1996) (Justice Stevens) (p.115):

220 Grossly Excessive Standard: Only when an award can fairly be categorized as grossly excessive in relation to these interests does it enter the zone of arbitrariness that violates the Due Process Clause of the Fourteenth Amendment. The Court draws upon TXO Production Corp. v. Alliance Resources Corp. (US Supreme Ct. 1993). Three Guideposts: o The degree of reprehensibility of the conduct: punitive damages may not be grossly out of proportion to the severity of the offense. o The ratio between punitive and compensatory damages: There must be a reasonable relationship between the two. And the comparison is made to the harm likely to result, as well as the harm that actually has occurred. There is simple mathematical formula. o Sanctions for misconduct: Courts should give substantial deference to legislative decisions concerning the appropriate sanctions for the conduct at issue.

In Gasperini v. Center for Humanities, Inc. (US 1996), the Supreme Court approved a federal courts application of a New York procedure empowering appellate courts to review jury verdicts under a reasonableness standard.

Enforcement of Damages: o Process: First, the plaintiff must obtain a judgment pursuant to FRCP 58. That judgment must be entered into the docket pursuant to FRCP 79(a). The original judgment does not order payment. Rather, FRCP 69 provides the process for enforcing a judgment for the payment of money. The law of the state in which enforcement is sought will govern. Normally, the plaintiff will obtain a lien on property, garnishment of wages, or a writ of execution.

Rule 69. Execution (of damages) (a) In General. Process to enforce a judgment for the payment of money shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought, except that any statute of the United States governs to the extent that it is applicable. In aid of the judgment or execution, the judgment creditor or a successor in interest when that interest appears of record, may obtain discovery from any person, including the judgment debtor, in the manner provided in these rules or in the manner provided by the practice of the state in which the district court is held. (b) Against Certain Public Officers.

221

Attorneys Fees
Rule 68. Offer of Judgment At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against the defending party for the money or property or to the effect specified in the offer, with costs then accrued. If within 10 days after the service of the offer the adverse party serves written notice that the offer is accepted, either party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the clerk shall enter judgment. An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible except in a proceeding to determine costs. If the judgment finally obtained by the offeree is not more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. The fact that an offer is made but not accepted does not preclude a subsequent offer. When the liability of one party to another has been determined by verdict or order or judgment, but the amount or extent of the liability remains to be determined by further proceedings, the party adjudged liable may make an offer of judgment, which shall have the same effect as an offer made before trial if it is served within a reasonable time not less than 10 days prior to the commencement of hearings to determine the amount or extent of liability. o Purpose of Rule 68: Marek v. Chesney (US 1985) (C.J. Burger) (p. 121): Rule 68 was designed in order to encourage settlement and avoid litigation. The rule prompts both parties to a suit to evaluate the risks and costs of litigation, and to balance them against the likelihood of success upon trial on the merits. The petitioners made a timely offer of judgment including attorneys fees for a sum of $100,000. The respondent did not accept the offer, and at trial ultimately prevailed in the amount of $60,000, but filed a request for $178,692.47 in costs under 42 USC 1988 (above). The petitioners opposed the postoffer costs on the basis of FRCP 68. o Attorneys Fees included as Costs for purposes of Rule 68 Rejection of Appellate argument merely denying civil rights plaintiffs access to post-settlement attorneys fees does not deny them access to the judiciary or significantly deter them from bringing a suit Civil Rights cases werent intended to be treated any differently from other civil cases when it came to reducing docket congestion Applying Rule 68 strictly will actually serve Congresss intent they were aware of the rule when legislation was drafted o Rule 68 is compatible with Section 1988 o Dissenting Opinion (Justice Brennan): Rule 68 gives the plaintiffs only 10 days to accept or reject. The majoritys decision will encourage defendants who know they have violated the law to make low-ball offers before plaintiffs have been able to obtain the information they are entitled to by the way of discovery to asses the strength of their claims. He contends costs should be interpreted in line with 28 USC 1920. SCOTUS decision inconsistent with history of rules and its application to over 100 attorneys fees statutes enacted by Congress Will lead to absurd variations when point of rules is to create uniformity Will seriously undermine purposes behind attorneys fees provisions of civil rights laws Congress is currently debating over whether to bring AF within rule 68, which suggests that they currently are not History demonstrates that costs were actually not meant to include AF 28 USC 1920 taxable expenses, like printing Rule 54 costs can be taxed, again, limited to printing

222 When rules intend to encompass AF, they explicitly do so Plain meaning approach is flawed and would create many other problems Rule should be interpreted to provide uniform incentives Congress intended Court to use reasonableness standard, not create a bright line for denying portions of fees Will encourage D to make low-ball offers to scare P into settlement contrary to Congressional intent SCOTUS doesnt have ability to issue rules which modify substantive rights, including attorneys fees o Significance Defense lawyers should make settlement offers every chance that they get to put greater pressure on P Prevailing standard Buchannon, there must be some sort of judgment entered in Ps favor for P to recover AF Assessing the Value of Legal Services: What is a Reasonable Fee under 42 USC 1988? City of Riverside v. Rivera (US 1986) (Justice Brennan) (p. 131): Plurality Opinion (Justice Brennan): Lodestar as Starting Point: The most useful starting point is the lodestar, the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. Hensley lodestar principle: reasonable rate = number of hours reasonably expended on litigation x reasonable hourly rate (expertise, reputation in the community, quality of work done on case) Distinguish btwn time spent on successful claims and time spent on unsuccessful claims SDCA conducted a rigorous analysis o Found that hours spent by attorneys were reasonable and reflected sound legal judgment o Excellent attorney performance compensated at prevailing market rates o Did not reduce rates just because some claims failed and not all of the defendants were charged facts werent known until after trial began o Just b/c damage award was relatively small doesnt mean that AF award should be small Jurors were prejudiced in favor of police officers P didnt play up injuries o Case advanced public interest Rejects the proportionality approach. Whats the argument against proportionality? The Court found the fee was was not per se unreasonable, since there is a policy interest in encouraging attorneys to take up cases that require expenditures of a substantial amount of time with relatively little pay off. Section 1988 was designed as an incentive. Dissenting Opinions (Chief Justice Burger) (Justice Rehnquist): Both accept the proportionality approach. Chief Justice Burger also points out it is unreasonable to pay lawyers just out of law school such a fee.

223 The Contingency Fee: Overview: The contingency fee is the leading alternative to hourly billing. In Venegas v. Mitchell (US 1990), the Supreme Court asked if a federal fee-shifting statute invalidates contingent-fee contracts, concluding that private fee arrangements may exist alongside statutory fee-shifts. American Rule: Each party pays its own fees o Litigation is more accessible to the poor o Encourages novel claims to be brought (expansion of claims) British Rule: Losers pay all fees o Cuts down on frivolous claims less ppl wrongly sued, and preserves judicial efficiency (accuracy and efficiency) Rule 54(d)(2): Attorneys Fees (Judgment), pg. 133 o Motion for post-judgment attorneys fees (for P or D) o Must be filed no later than 14 days after entry of judgment Fee-shifting statutes o Best to look for fee shifting statute o One-way fee shifting only applies to prevailing Ps recovering fees from D o Policy reasons for such statutes to encourage litigation o 42 U.S.C. 1988: Private Attorneys General Bar Fee shifting statute for civil rights cases Ayeska Pipeline Service Co. v. Wilderness Society Rule 11(c): Sanctions, pg. 34 o 11(c)(4): Sanction may direct payment to movant for reasonable attorneys fees and other expenses directly resulting from the violation Rule 68(d): Paying Costs After an Unaccepted Offer, pg. 148 o Offer of judgment: Gesture that you have done something wrong; parties are less inclined to make this than a settlement offer (no admission of liability) o 68(a): D may make offer of judgment within 10 days of being served; must be more than 10 days before trial begins o If settlement that isnt taken is larger than the judgment, then P pays for all of his own postoffer costs (cant shift to D) o Favors and encourages settlement o Costs do include attorneys fees cuts off fee shifting found in 42 U.S.C. 1988 (Marek v. Chesny, pg. 140) o If underlying statute includes attorney fees as costs, then so does application of Rule 68 Determination of Reasonable Attorney Fees o Reasonable hourly rate (expertise, experience, etc.) x Hours reasonably expended = load star (application of load star in City of Riverside v. Rivera, pg. 152) No fee-shifting without actual judgment or court-approved settlement (P must prevail) (Buckhannon v. WV, pg. 149) Attorneys fees may outweigh damages awarded; no correlation necessary (Riverside: otherwise, would go against intent of 42 U.S.C. 1983 to encourage lawyers to take civil rights cases) Jeff D. Problem: Settlement offer that wont way attorney fees (seemingly subverts purpose fee shifting statute bc discourages atty from taking on other public interest cases) (Evans v. Jeff D., pg. 151)

224 o It doesnt matter how it impacts attys ability to take on future clients; atty has obligation to do what is best for current client, so such a settlement offer is permissible and atty must take it to client o Not appropriate to have client sign K to not give up attorney fees

225

226

Contempt
Walker v. City of Birmingham (US 1967) (Justice Stewart) (p. 142): o Ex Parte Temporary Restraining Order: City of Birmingham filed a bill of complaint for an injunction, claiming there would be irreparable harm if the demonstrations were permitted to go forward. The city filed in state court and obtained the state equivalent of an ex parte temporary restraining order. The Court granted the restraining order on the activities of civil rights leaders. o Failure to Challenge: Despite having 36 hours to challenge the temporary restraining order before it went into effect, the parties made no challenge in the Courts. Order to Show Cause: After the demonstration, the City petitioned the court to hold the civil rights leaders in contempt, applying for an order to show cause (an order asking why they should not be held in contempt). o Collateral Bar Rule: At the ensuing hearing, civil rights leaders attempted to make constitutional arguments (i.e. first amendment and due process violations) at the proceedings. The Court refused to consider the constitutional questions on the basis of the collateral bar rule: if an individual violates a court order, he or she is thereafter barred from challenging it. The collateral bar rule emerged in the common law, to ensure respect for court orders. Doesnt apply to statutes reflects a belief that in the fair administration of justice no man can be judge in his own case, however exalted his station, however righteous his motives, and irrespective of his race, color, politics, or religion. o Philosophy: Justice is Served by Predictable Procedure: The majoritys opinion in Walker reflects a philosophy regarding civil procedure (i.e. that procedure should be predictable). o Dissenting Opinion (Chief Justice Warren): Finds this a gross misuse of the judicial process. Responds by highlighting the fact that people violate statutes all the time, and we do not consider that to be disrespect to the law. Moreover, the majoritys position will more likely lead to less respect for the law, rather than more. In short, he rejects the collateral bar rule. Highlights the fact that the parties promptly submitted themselves to the courts. Philosophy: Procedure is the Servant of Justice: Procedure should bend in the interests of justice. o Dissenting Opinion (Justice Douglas): Douglas places the opinion in its cultural context, suggesting that the court cannot take cover behind the collateral bar rule. Highlights that the petitioners rightly concluded that any further attempts to challenge would be fruitless. Accordingly, he too ascribes to the philosophy that procedure should bend to the interests of justice, even if the result is a less predictable system. o Civil contempt is remedial, to compel an outcome or remedy o Criminal contempt is punitive; higher burden of proof under criminal law o When someone disobeys a statute, usually chance to offer a defense and challenge the law at issue during judicial hearing o Collateral bar rule: Requires obedience to a court order even if it is later found to be unconstitutional; forbids violator from challenging the order in court Exceptions: Order is transparently invalid (frivolous pretense to validity) If court doesnt have jurisdiction over the parties Policy rationale: Protection of courts authority Holds true even when a court order reproduces a law that is probably unconstitutional (Walker v. City of Birmingham, pg. 165)

227 Ordinance was unconstitutional in its application; general fear of social disorder (why exception (1) doesnt apply) Only applies to named parties in the court order (ex: injunction) (Shuttlesworth v. City of Birmingham, pg. 171, may challenge the statute in court, but not a court order that applies to you)

228

229

Attacking the Judgment

Renewed Motion for Judgment as a Matter of Law (JNOV)
Historically, a party against whom judgment was entered could move for JNOV if the judgment was based upon a verdict that reasonable persons could not have reached and if the moving party had sought a directed verdict at the close of all the evidence. Now, the motion for JNOV is called a renewed motion for judgment as a matter of law. o It must be filed no later than 28 days after entry of judgment and the party making the renewed motion must have moved for judgment as a matter of law at some time during the trial. o In theory, a party may raise only those issues raised in the motion for a JMOL. The standard is the same as for the motion for judgment as a matter of law. [Fed. R. Civ. P. 50(b)] o Legal Fiction: The first limitation was historically based on the fact that the 7th amendment says, no fact tried by jury shall be otherwise reexamined in any Court of the United States. A legal fiction arose that if the motion were made before the verdict and then renewed, the judge had simply delayed his decision on it, and was not reexamining the jurys decision. o Modern Policy Reason: When making a motion for JML, the moving party must state their reasons for the motion. By requiring that the motion be made before the verdict, the rule prevents a party from sandbagging and raising defects in his opponents evidence after the jury has deliberated, when it is too late to cure those defects. Policy dictates the party have a chance to cure if they are able, b/c suits are to be determined on the merits, not procedure (Rule 50(b)) o Initial test is identical to that of Rule 50(a) for directed verdict. o Rule 50(b): If court denies motion for judgment as a matter of law (Rule 50(a)), then issue is submitted to the jury. Within 10 days after judgment, movant may file renewed motion for judgment as a matter of law (may include Rule 59 request for new trial). Court may: (1) allow judgment on the verdict; (2) order a new trial; or (3) direct the entry of judgment as a matter of law (judgment notwithstanding the verdict). o Denial of Rule 50(a) motion is technically considered a reservation on deciding the legal issue, so it is not overruling the jury a judicial fiction to overcome Slocum v. NY Life Insurance Co. (U.S. 1913) (pg. 506) decision that found JNOV motions to be unconstitutional. o This is efficient bc if JMOL is later reversed on appeal, doesnt require a new trial (though one may be granted). o Rule 50(c): If court grants 50(b) renewed motion, then must also conditionally rule on motion for new trial in case judgment is later vacated or reversed. o Cant get a new trial bc of insufficiency of other partys evidence unless you file a Rule 50(b) motion. o As a result, moving party will likely also file Rule 59 motion for new trial

25. The Judge and the Jury, Part Two

230
Scenario 2

Scenario 1

D seeks judgment as a matter of law (d.v.) at close of evidence Judge grants the motion, discharges jury, enters judgment for D Pappeals

Appellate court finds evidence legally sufficient to go to the jury, reverses sends back to trial court '

Case must be retried from beginning

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motion

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(j.n.o.v.)
Pappeals

Appellate court finds evidence legally sufficient to go to the jury, reverses Appellate court orders judgment entered on jury verdict (no retrial needed) Figure 25-1.

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Motion for a New Trial trial. Since the jury

never rendered a verdict in the first trial, this will A motion for a new trial must be filed no later than 28 days after judgment is entered. Within that period, then require a wasteful repetition of the entire trial. See scenario I in the court may order a new trial on its own motion. [Fed. R. Civ. P. 59] Figure 25-1. o In passing on the new trial motion, the judge may consider the credibility of the witnesses instead, the withholds decision on the of sufficiency of in the oIf, Compare the judge motion for judgment as a matter law, which, both its incarnations, evidence by denying the motion for judgment as a matter of law (d.v.) at requires the judge to assume the truth of the evidence for the nonmoving party. the oclose of the this scenario can be avoided. In most Thus, the evidence. judge in passing on the motion for a new trialcases, acts to some extent as a where "thirteenth the evidence is weak enough to lead the judge to consider directing juror," making an independent assessment of the evidence. the o verdict, the jury will that is the case is too weak and return verdictirrational but whether the The judgment to agree be made not whether the verdict wasatotally is convinced thatThis it is is sothe strongly suspect that it for the judge moving party anyway. best possible result: It would avoids serve any the ends of justice to have another jury hear the case. apparent intrusion on the right to jury trial, leads to a verdict that the judge

Reasons forfollowed Granting Trial had taken the case from the jury. have if New the judge The court may grant a new trial the because of an error during theparty trial (usually (usuallythe going to If, on the other hand, jury returns a verdict for the the admissibility of evidence or the propriety of the instructions), because the plaintiff) against whom the judge considered directing the verdict, the judge verdict is against the weight of the evidence (limited to cases where the judge finds the verdict can still enter judgment as a matter of law (j.n.o.v.) for the other party. seriously erroneous), because of juror misconduct, or because the verdict is excessive or Here again, the party whose verdict has been taken away will frequently inadequate.
519

finds supportable on the evidence, and avoids the appeal that would likely

231 Errors by the Jury: Jury verdicts may support an order for a new trial if the trial judge concludes that the verdict is excessive, inadequate, or otherwise against the weight of the evidence. Against the Weight of Evidence: The verdict is against the clear weight of the evidence; or Based upon evidence which is false; or Will result in a miscarriage of justice, even though there may be substantial evidence which would prevent direction of a verdict. Aetna Casualty & Surety Co. v. Yeats (4th Cir. 1941). Remittitur If the trial judge believes that the jury's compensatory damages award is so excessive as to "shock the conscience" (or in a diversity case if the award meets the state standard for excessiveness), the judge may order a new trial or may offer the alternative of remittitur. When offered remittitur, the plaintiff is given the choice between accepting an award less than that given her by the jury or submitting to a new trial. Note that the court cannot simply lower the award given by the Jury. It must offer the plaintiff the alternative of a lower award or a new trial. [Hetzel v. Prince Williams County, 523 U.S. 208 (1998)] Additur If the trial judge believes that the jury's compensatory damages are inadequate, she may NOT offer the defendant the choice of accepting a higher award or submitting to a new trial. "Additur" has been held to violate the Seventh Amendment (which is not applicable to the states). However, inadequate damages may be a basis for a new trial. Renewed Motion for Judgment as a Matter of Law with Motion for New Trial When a renewed motion for judgment as a matter of law and a motion for a new trial are made in the alternative and the renewed motion is granted, the court must rule hypothetically on the new trial motion so that no remand is required if the judgment on the merits ruling is subsequently reversed on appeal. Rule 59 o Use this when the jury verdict is clearly wrong (not insufficient evidence standard of JNOV) relates to gross miscarriage of justice o Usually granted for: o Errors by jury (if the verdict is against the weight of the evidence, even though unable to grant directed verdict; or damages are insufficient or excessive (see remittitur and additur)); or o Trial process errors that materially effected outcome of case

232 o Possible reasons to grant: judge thinks he has made reversible error and that new trial will be granted on appeal; jury verdict is so excessive/inadequate that jury has misunderstood their duty or acted with extreme prejudice; jury misconduct relating to deliberative process o Most appellate courts defer to trial courts decision Rule 59(a): After jury or bench trial, any party may move for a new trial on all or some issues. Rule 59(b): Motion for new trial must be made within 10 days after judgment. Rule 59(d): Court may order a new trial sua sponte, or for a reason not stated in the motion. Rule 59(e): Motion to alter or amend the judgment must be filed within 10 days after judgment.
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25. The Judge and the Jury, Part Two

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If a party fails to move for either a renewed judgment as a matter of law or for a new trial on the basis of insufficiency of the evidence, that party is precluded from raising the question of evidentiary sufficiency on appeal, to support either judgment as a matter of law or a new trial. [Unitherm Food Systems, Inc. v. Swift-Eckrich, Inc., 546 U.S. 394 (2006)]

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233

Motion to Vacate Judgment

Usually made after time for JNOV and new trial motions, but may file all three at same time. o Rule 60(a) On motion or on its own, court can correct clerical mistake in the judgment, order, or record. (doesnt vacate judgment, just corrects mistake) o Rule 60(b) Grounds for motion to vacate. Court may vacate the judgment for: (1) Mistake, inadvertence, surprise, or excusable neglect; Ex: Losing party is unable to have any trial due to something like default judgment (Brandon) (2) Newly discovered evidence that couldnt be diligently discovered in time under Rule 59(b) for a new trial motion Usually cant be merely cumulative or impeaching and must relate to facts in existence at time of trial (3) Fraud, misrepresentation, or misconduct by opposing party Consider: opportunities for detection before/during trial; strength of proof of misconduct Can also be a reason for voiding judgment, Rule 64(b)(4) (4) Judgment is void (5) Judgment has been satisfied, released, or discharged; is based on earlier judgment that has been reversed or vacated; or applying prospectively is no longer equitable; or (6) Any other reason that justifies relief If could have been brought under 60(b)(1)-(3), then cant avoid one year limitation by using 60(b)(6) (Brandon) o Rule 60(c): (1) Rule 60(b) motion must be made within a reasonable time, and for (1)-(3) within a year after judgment. (2) Motion doesnt effect finality or suspend operation. Brandon v. Chicago Board of Education (7th Cir. 1998) (pg. 528) (wrong atty getting court papers; default judgment when atty doesnt show up atty files motion to vacate judgment more than one year later) Application of Rule 60(b)(1) mistake where default judgment has been entered, and court wont vacate the judgment bc the year has passed and movant cant get around that by using 60(b)(6) Clerical Mistakes A clerical error is one arising from oversight or omission, and may occur in judgments, orders, or other parts of the record. The court can correct clerical errors on its own motion or the motion of any party. [Fed. R. Civ. P. 60(a)] There is no time limit for the correction of clerical errors, and the court order correcting the error dates back to the time judgment was entered. As a result, the battle over what constitutes a clerical error is acute. Defendant Not Personally Notified A defendant over whom personal jurisdiction was necessary and acquired, but who did not in fact have knowledge of the pendency of the action, may enter an appearance within one year after the final judgment. If the defendant shows reasons justifying relief from the judgment and innocent third persons will not be prejudiced, the court may relieve the defendant from the judgment for which personal jurisdiction was necessary, on payment of costs and on conditions the court deems just. Other Grounds for Relief from Judgment

234 On motion and just terms, the court may relieve a party from a final judgment or order on the following grounds: 1) Mistake, inadvertence, surprise, or excusable neglect; 2) Newly discovered evidence that by due diligence could not have been discovered in time to move for a new trial; 3) Fraud, misrepresentation, or other misconduct of an adverse party; 4) The judgment is void; 5) The judgment has been satisfied, released, or discharged; a prior judgment on which it is based has been reversed or otherwise vacated; or it is no longer equitable that the judgment should have prospective application; or 6) Any other reason justifying relief from the operation of the judgment. For grounds (i), (ii), and (iii), the motion must be made within one year; for the other grounds, the motion must be made within a reasonable time. [Fed. R. Civ. P. 60(b)] Note: Ground (iv) does not apply simply because the judgment was erroneous; such errors are to be remedied on appeal. Ground (iv) applies only if there was a fundamental flaw such as lack of jurisdiction or deprivation of due process by failure to give notice or opportunity to be heard. [United Student Aid Funds, Inc. v. Espinoza, 130 S. Ct. 1367 (2010)] INDEPENDENT ACTION IN EQUITY TO SET ASIDE THE JUDGMENT A court, in its discretion, may entertain an independent action to relieve a party from a judgment or order, to grant relief to a defendant not actually personally notified of the action, or to set aside a judgment for fraud on the court. The plaintiff must show that he is likely to win if a new action is allowed. The only advantage of an independent action is that it will not be barred by the specified time limits outlined in above. However, the aggrieved party must act promptly once he knows or should know of the ground for relief. An independent action will be rejected if a motion to set aside the judgment has been rejected on the merits.

235

236

Appeals
Standard
Abuse of discretion trial court should get the benefit of the doubt, and judgment should only be overturned when it was clearly unreasonable Findings determination of the facts Generally speaking, juries act as fact-finders and reach conclusions about certain questions that judge submits to them In bench trials, judge finds facts Under Rule 52, Appellate courts grant extraordinary deference to trial courts vis--vis fact findings CCAs dont have the capacity to conduct rigorous fact-finding Trial courts can hear witness testimony and review document submissions Standard: Appellate court will only overturn findings of fact if they are clearly erroneous no basis in the record for a fact-finding Abuse of discretion applies to conclusions of law, clearly erroneous standard applies to fact-findings

Time for Appeals

Under Rules 3 and 4 of the Federal Rules of Appellate Procedure, an appeal may be taken by filing a notice of appeal with the district court within 30 days from the entry of the judgment appealed from (60 days where the United States is a party to the action). o However, if a timely renewed motion for judgment as a matter of law (formerly a motion for JNOV) or motion for new trial is made, or if a motion to set aside or amend the judgment is made within 28 days of judgment, the running of the 30 days is terminated. o Upon the entry of an order based on such post-trial motions, a new 30-day period begins to run. o However, a notice of appeal filed during the pendency of such a post-trial motion will become effective on final disposition of the motion by the trial court. o Upon a showing of excusable neglect, made within 30 days after the time to appeal has expired, the district court may extend the time for filing a notice of appeal by 30 days from the time it would otherwise have run, or14 days from the date of the order granting the extension, whichever is later.

Reviewable Orders
Generally, only final orders are reviewable on appeal. A final order is one that disposes of the whole case on its merits, by rendering final judgment not only as to all the parties but as to all causes of action involved. [Cunningham v. Hamilton County, 527 U.S. 198 (1999)-order imposing sanctions on attorney is not a final order even when the attorney no longer represents a party to the case] However, certain interlocutory orders are also reviewable: Interlocutory Orders as of Right 1. Injunction A party may appeal as of right any order granting, continuing, modifying, refusing dissolving, or refusing to dissolve or modify an injunction. 2. Receivers A party may appeal as of right any order appointing a receiver, or refusing to wind

237 up or take steps to accomplish purposes of receiverships (e.g., directing sales or other disposals of property). 3. Admiralty An order finding liability but leaving damages to be assessed later in admiralty cases may be appealed. 4. Patent Infringement A patent infringement order where only an accounting is wanting ma 5. Property Possession A party may appeal as of right any order whereby possession of property is changed or affected, such as orders dissolving writs of attachment and the like. Interlocutory Appeals Act Review under the Interlocutory Appeals Act [28 U.S.C. 1292] is discretionary and may be available when: (i) the trial judge certifies that the interlocutory order involves a controlling question of law, as to which there is substantial ground for difference of opinion, and immediate appeal from the order may materially advance the ultimate termination of the litigation; and (ii) the court of appeals then agrees to a)low the appeal. A party obtaining such a certificate from the trial judge must, within 10 days, apply to the court of appeal. where two out of three judges must agree with the trial judge. A party obtaining such a certificate from the trial judge must, within 10 days, apply to the court of appeals, where two out of three judges must agree with the trial judge.

Collateral Order Rule

If the claim or issue is separable from and collateral to the main suit and is too important to require deferring appellate review, it may be classified as a judgment in a separate. ("collateral") proceeding and thus be appealable. [Puerto Rico Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc., 506 U.S. 139 (l993)-governmental entity's claim of Eleventh Amendment immunity from suit denied; issue appealable immediately under collateral order rule because failure to permit interlocutory appeal would effectively eviscerate Eleventh Amendment immunity from suit in federal court by requiring entity to litigate to final judgment before appealing]

Orders Made Appealable (or Nonappealable) by Writ

In exceptional cases, nearly all jurisdictions allow some circumvention of the final judgment rule through the appellate writs of mandamus and prohibition. Mandamus commands a trial judge to act, and prohibition commands the judge to refrain from acting. The writs are available only if an appeal will be insufficient to correct a problem and the trial court's actions constitute a serious abuse of power that must be immediately corrected.

238

Certification of Class Actions

A district court's order granting or denying certification of a class action can be appealed within 14 days of entry of the order. [Fed. R. Civ. P. 23(f)] The court of appeals has complete discretion in deciding whether to hear the appeal. If the court decides to hear the appeal, proceedings are not stayed at the district court unless the district court or court of appeals so orders.

Stay Pending Appeal

Stays are governed generally by Rule 62. Execution No execution on judgments is allowed for 14 days after entry except injunctions or receiverships, which are not held up unless otherwise ordered by a Court. Injunction Order Power of Trial Court When appeal is taken from an interlocutory or final judgment granting, dissolving, or denying an injunction, the court may suspend, modify, restore, or grant an injunction during the pendency of the appeal upon such bond as it considers proper for the security of the adverse party. Power of Appellate Court An appellate court has similar power to grant a stay or injunction pending appeal, or to vacate one granted by the trial court, or to make any order appropriate to preserve the status quo or the effectiveness of the judgment subsequently to be entered. Ordinarily such a stay or injunction pending appeal must be sought in the trial court before the appellate court will entertain it.

Supreme Court Jurisdiction

The Supreme Court has direct appeal jurisdiction from any order granting or denying an injunction in any proceeding required to be heard by a three-judge court. [28 U.S.C. 1253] Court of Appeals Cases Cases in the courts of appeals may be reviewed by the Supreme Court: (i) By certiorari granted upon petition of any party to any civil or criminal case, before or after rendition of judgment or decree; or (ii) By certification by the court of appeals of any question of law in any civil or criminal case as to which it desires instructions. Upon such certification, the Supreme Court may give binding instructions or may require the entire record to be sent to it for decision of the entire case. [28 U.S.c. 1254] Cases from Highest State Court Final judgments rendered by the highest court of a state in which decision could be had may be reviewed by the Supreme Court by certiorari in the following circumstances: o Where the validity of a treaty or federal statute is drawn into question; or o Where the validity of a state statute is drawn into question on the ground that it is o repugnant to the federal Constitution or to a treaty or federal statute; or

239 o Where any title, right, privilege, or immunity is claimed under the federal Constitutionor treaty or federal statute. [28 U.S.c. 1257] Only the Supreme Court may hear appeals coming from the state court system.

240

Finality
Restatement 2 of Judgments, 17 Effects of Former Adjudication -- General Rules A valid and final personal judgment is conclusive between the parties, except on appeal or other direct review, to the following extent: (1) If the judgment is in favor of the plaintiff, the claim is extinguished and merged in the judgment and a new claim may arise on the judgment; (2) If the judgment is in favor of the defendant, the claim is extinguished and the judgment bars a subsequent action on that claim; (3) A judgment in favor of either the plaintiff or the defendant is conclusive, in a subsequent action between them on the same or a different claim, with respect to any issue actually litigated and determined if its determination was essential to that judgment. Comment: d. Erroneous judgment. The general rules stated in this Section are applicable to a valid and final judgment, even if it is erroneous and subject to reversal.
nd

Distinguishing Concepts: Do not confuse the doctrines of claim preclusion and issue preclusion with the principle of stare decisis. Similarly, do not confuse them with the law of the case whic h dictates that an issue of law, once determined, cannot be relitigated in subsequent stages of the same lawsuit.

(1) When a valid and final judgment rendered in an action extinguishes the plaintiff's claim pursuant to the rule of merger or bar * * * the claim extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. (2) What factual grouping constitutes a "transaction," and what groupings constitute a "series," are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage. Restatement (Second) of Judgments 24 (1982).

Cross-Jurisdictional Preclusion 1. State State. Full faith and credit clause of the Constitution mandates that a court in State B accord a judgment from State A the same preclusive effect the judgment would have in State A. 2. State Federal. The same full faith and credit obligation is imposed on federal courts with regard to judgments of an state court. 28 U.S.C. 1738 imposes this. 3. Federal State. When a judgment is entered in a federal question case ( 1331), it is accorded the preclusive effect that federal common law provides. For diversity case judgments ( 1332), federal common law incorporates the preclusion rules of the state in which judgment is rendered. This avoids forum shopping. (Semtek) Stare Decisis: Courts usually tend to follow past precedent, though precedents arent sacrosanct Law of the Case: dictates that once an issue has been determined in a case, it generally cant be re -litigated in subsequent stages of the same suit *Make summary judgment motion (Rule 56) when second claim or issue is brought up to preclude it. Policies Supporting Claim and Issue Preclusion: 1. Finality: At some point, litigation must be declared finished. It is not productive for the parties or for society to allow serial relitigation of a claim already asserted or an issue already decided by a competent court. 2. Repose: At some point the defendant has a right to repose, to know that he cannot be sued repeatedly on the same claim

241
3. Consistency: If the same issue were to be relitigated several times, there is a chance that it would be resolved differently in different cases. Such inconsistency may erode the publics confidence in the judicial system by making that system seem more like a lottery than an orderly mechanism for resolving disputes. 4. Efficiency: The community has a legitimate interest in efficiency. Litigation is publicly funded dispute resolution, and the public has a right to expect that the resources of the judicial system not be wasted.

242

Res Judicata (Claim Preclusion)

Definition Res judicata precludes claim-splitting and mandates that, once a cause of action has been adjudicated on the merits, it cannot be relitigated between the same parties. Both those issues that could have been raised and those that were raised are precluded. (Res judicata may also apply to litigated cases that end in settlement) WHOS PRECLUDED: only the parties and their privies (e.g., trustee/beneficiary, successors in interest). In sum, claim preclusion operates to bar relitigation of claims between the same or closely related parties if the current claim is identical to or transactionally related to the earlier claim and the prior action resulted in a final judgment on the merits. Terminology Used to Describe Effect-"Merger" and "Bar" When the claimant wins the earlier lawsuit, the cause of action is said to have been "merged" into the judgment. When the defendant wins, the claimant is said to be "barred" by the earlier adverse judgment. Both terms simply mean that the claimant cannot sue again on the same cause. When the claimant prevailed in the first action, res judicata mandates that his second claim be merged into the first judgment, if he lost, the second action is barred by the first judgment Claim preclusion (res judicata) must be pled as an affirmative defense under Rule 8(c), to estop the other party from trying to litigate the same claim between the same parties again. Claims arising out of the original transaction are not actually required (Ruled 18), but a party that doesnt bring those claims are estopped from litigating them again in this situation. Contrary to this, opposing parties must bring compulsory counterclaims (Rule 13(a)). In general, res judicata encourages the bringing of claims in one suit, and is thus supported by Rules 13 (counterclaims and cross-claims), Rule 15 (amending claims), Rule 18 (joinder of claims). If a D does not assert a compulsory counterclaim under Rule 13(a), he cannot bring a separate action (even though it is technically a different claim). If in federal court, P should assert supplemental state law claims as well to avoid being barred by res judicata later. Requirements for "Merger" and "Bar" Before merger or bar apply, it must be shown that (i) the earlier judgment is a valid, final judgment "on the merits"; (ii) the cases are brought by the same claimant against the same defendant; and (iii) the same "cause of action" (or "claim") is involved in the later lawsuit. Valid, Final Judgment "On the Merits" Res judicata (claim preclusion) flows from the entry in an earlier case of a valid, final judgment "on the merits." A judgment is valid as long as it is not void (e.g., for lack of subject matter jurisdiction). Whether a judgment is final for these purposes is generally the same as whether it is final for purposes of taking an appeal.

243 Usually, the more difficult issue is whether the valid, final judgment is considered "on the merits" for res judicata purposes. o Often, a judgment will be based on actual litigation between the parties, but it can also be a default judgment entered as a penalty against a party (such as a dismissal for willful violation of discovery orders) or an involuntary dismissal closely related to the merits (such as for failure to state a claim upon which relief may be granted). o In contrast, other involuntary dismissals not involving the merits (such as those based on lack of jurisdiction, improper venue, or failure to join an indispensable party) are not a judgment on the merits and do not have claim preclusive effect. o Although Federal Rule 41(b) indicates that all dismissals are to operate "as an adjudication on the merits" unless based on jurisdiction, improper venue, or failure to join an indispensable party, the Supreme Court has held that Rule 41(b) does not govern whether the judgment is "on the merits" for res judicata purposes. [Semtek, Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001)] Thus, jurisdictions may take different views of whether a particular dismissal-e.g., dismissal because the statute of limitations has run-is deemed "on the merits" for res judicata purposes. Examples of judgments on the merits Judgments entered after consideration of a claims merits by judge and/or jury (e.g., a trial) Summary judgments for either party Consent judgments Any judgment in favor of the plaintiff in the original action (including a default or summary judgment) If the original judgment was in favor of the defendant, the issue is a bit stickier: Some judgments for defendant not on the merits: Any claim by plaintiff dismissed without prejudice and without litigating the merits, including dismissals for lack of personal jurisdiction over the defendant, inability to join an indispensable party, the courts lack of subject-matter jurisdiction, and improper venue Judgments for defendant are on the merits: Any dismissal of plaintiffs claim with prejudice, including: o Dismissal for failure to state a claim on which relief may be granted (12(b)(6) motion) o Judgment on the merits, unless court states its without prejudice o Failure to prosecute or failure to comply with a court order o Summary judgment in favor of defendant Effect of Settlements: settlements of litigation are generally considered judgments on the merits, unless parties agree otherwise (because a settlement is a contract, remember that parties can always attack the contract itself on contract principles, e.g., fraud or lack of consideration Same Claimant Versus Same Defendant Res judicata applies only if the earlier case and the latter case are brought by the same claimant against the same defendant. It is not enough that the same litigants were also parties in the previous case; they must have been in the same configuration of one asserting a claim

244 In addition to the actual parties in the prior adjudication, persons or entities not named in the original case may be subject to claim preclusion if they are sufficiently related to original parties, i.e., if they are in privity to the litigants. See Federated Department Stores, Inc. v. Moitie (1981). Rationale: Non-parties to a litigation who are in privity to a party are deemed to have had their interests represented in the prior action, or are deemed to have no greater interest than did the losing party in that action. i. Substantial Control and Virtual Representation: Gonzalez v. Banco Central Group . Plaintiffs May Sue Together: Just because more than one plaintiff is injured in the same transaction/occurrence, does not mean they must join as plaintiffs to prevent being barred by the others litigation Due Process issue: parties are entitled to their day in court; question of whether not the party has had an opportunity to litigate i. Gonzalez v. Banco Central Corp. (1st Cir. 1994) (pg. 879) 1. Substantial Control: Calling the shots of the litigation (insurance co. ex.) (1) Not here bc no notice until five years after litigation began, so they couldnt have much control over it (2) Indication that party had tried to intervene (Rule 24) suggested that they were not the controlling party (due process: notice and opportunity to be heard: sense that parties didnt have their day in court) 2. Virtual Representation: No control of litigation, but the other party is a representative (ex: child as beneficiary of lawsuit parents bring). (1) (1) Identity of interest and (2) (2) Close relationship of parties make it such that they are so closely aligned that one party can provide stand-in notice for the other

Taylor v. Sturgell: Nonparty preclusion maybe permissible in cases: 1. involving persons who agree to be bound by a determination in a prior action 2. Successors-in-interest, 3. Those who were adequately represented in prior actions such as trust beneficiaries or class members, 4. Those who controlled parties in prior litigation, 5. Those who are proxies of parties to prior litigation, and 6. Those bound by statutory schemes such as bankruptcy or probate. Examples: I) In Case One, A sues Z to recover damages for personal injuries suffered in an automobile collision between the two. A valid, final judgment on the merits is entered. Now A sues Z again, this time to recover damages for property damage inflicted in the same wreck. Assuming that both cases involve the same "cause of action" (discussed immediately below), res judicata would apply, because both cases were brought by A against Z. 2) In Case One, A sues Z to recover damages for personal injuries suffered in an automobile collision between the two. A valid, final judgment on the merits is entered. Now Z sues A to recover for her personal injuries suffered in the same wreck. Res judicata does not apply. Here, the second case is brought by Z against A, while the first case was brought by A against Z. Note: Z may be barred from asserting her claim because of the compulsory

245 counterclaim rule, but not because of res judicata. The compulsory counter- claim rule requires a defending party to assert against the claimant in the pending case any claims arising from the same transaction or occurrence as the claimant's claim. "Cause of Action" While various tests have been used to define "cause of action," the modern approach is to require assertion of all claims arising out of the same transaction or occurrence that is the subject matter of a claim asserted by the claimant. Expanded concept of a claim which encompasses 1) all of the alternative legal theories and 2) the full scope of damages and other remedies generated by the facts of the original controversy. It is irrelevant whether the claim was actually asserted in the prior case, as long as it could have been. Some courts used to allow damages to be separately litigated, but not anymore. Transaction Test (Common Nucleus of Operative Fact): This is the modern approach and provides that any act or series of occurrences out of which the action arose=one cause of action. Similar to joinder, requires a transaction is to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties expectation or business understanding or usage. Restatement (2nd) of Judgments 24:. In Car Carriers, Inc. v. Ford Motor Co. (1989), the Supreme Court reaffirmed the transaction test and specifically rejected the right-duty approach as undermining the fundamental policies of res judicata. Policy Reason: encourages lawyers to litigate their claims fully the first time around, and consider all possible grounds for relief. Exception: Claim preclusion does not apply where the plaintiff was unable to rely on a certain theory because of the limitations on the subject matter jurisdiction of the courts or restrictions on their authority to entertain multiple theories or demands for multiple remedies or forms of relief in a single action. Heacock v. Heacock (1988). a. Example: Where an action is brought in state court, some federal claims relating to the case could not be heard b/c federal courts have exclusive jurisdiction over them (e.g. patent infringement) This transaction conception is to be determined pragmatically, considering whether facts are related in time, space, origin, or motivation, whether they from a convenient trial unit [overlap of witnesses, evidence], and whether their treatment as a unit conforms to the parties expectations or business understanding or usage. common nucleus of operative fact b. Car Carriers SAME-TRANSACTION TEST: if same core of operative facts, all claims arising from that transaction must be brought in one suit or lost.

Common Examples 1) Accidents The claimant seeks to recover separate damages from the same accident in separate actions. The claimant may not seek damages for neck injuries in one action and leg injuries in another. Likewise, most courts would not permit the claimant to sue for personal injuries and property damage in separate actions. However, if the claimant is insured for property damage and, after payment of the claim, the claimant assigns her cause of action for property

246 damage to the insurance company, most courts would consider the property damage claim and personal injury claim as two separate causes of action 2) Installment Obligations In the situation of a series of obligations, such as installment payments on a debt or lease, the claimant is required to sue on all installments due at the time of suit, but not later installments. But if the contract has an acceleration clause that makes all installments due if earlier ones are not paid, the claimant must sue for all installments (unless the acceleration clause is optional and the claimant elects not to exercise the option). This rule does not apply if the installment obligations are represented by separate notes.
Car Carriers (7th Cir. 1989) (pg. 870): Sherman Act / RICO claims against Ford Claims arose from the same basic fact situation, so barred by res judicata, and Ps claim that the facts were unknown at the time of previous action are irrelevant. SAME-TRANSACTION TEST: if same core of operative facts, all claims arising from that transaction must be brought in one suit or lost. A change in legal theory doesnt create a new cause of action (otherwise, multiple bites at the apple.) Heacock v. Heacock (Mass. 1988) (pg. 876): Post-divorce claim for assault during marriage Not claim preclusion bc tort action not based on same underlying claim as a divorce action, plus, divorce court is of limited subject matter jurisdiction.

Why is a compulsory counterclaim which a party fails to bring in the first action subject to res judicata? The whole point of compulsory counterclaims is to prevent unnecessary litigation in the interest of trial efficiency and judicial economy. If the plaintiff is making a claim on a particular transaction or occurrence, it only makes sense to require the defendant to assert any counterclaims which are based on the same transaction or occurrence. If res judicata didnt attach to compulsory counterclaims, the purpose of compulsory counterclaims would be defeated.

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248

Collateral Estoppel (Issue Preclusion)

Issue preclusion (collateral estoppel) is when the previous claim was different, but the previous case ended in final adjudication between the parties of the same issue. Usually used in partial summary judgment (Rule 56). Courts must be cautious when applying this and consider whether party has had notice and an opportunity to be heard (due process) re an issue. Rule 49 special verdicts can help court determine whether an issue was adjudicated in a previous litigation (advantage of using this). Cant use collateral estoppel against the government on any issue bc: (U.S. v. Mendoza) 1. Government is in court all the time and has to make discretionary decisions about how to allocate funds to lawyers, so cant assume govt is trying as hard as it can 2. Govt litigates same issues all the time all over the country in different districts, and collateral estoppel is widely binding by the full faith and credit clause and 28 USC 1738. This would prevent circuit splits from emerging, and those are essential for the Supreme Court to make informed decisions about as a matter of law. Comparative burdens of proof: Bc there are different burdens of proof in criminal (beyond and reasonable doubt) and civil (preponderance of the evidence) actions, preclusion applies differently when going between those. Criminal = higher burden on P. Civil = lower burden on P. o Burden of proof is on the party invoking collateral estoppel, to show that the issue was adjudicated (meet requirements below). (Hoult) Can only invoke collateral estoppel when party in question is going from higher standard of proof to lower standard of proof (be careful of what party you are looking at) OJ example is applicable bc prosecution and civil Ps are deemed in privity, so it is mutual estoppel. If in this case: o D wins in civil trial can invoke collateral estoppel Prosecution in criminal trial o D cant invoke collateral estoppel if he wins criminal trial P in civil trial bc D had a lower standard of proof from trial 1 and higher standard of proof in trial 2 Definition A judgment binds the plaintiff or defendant (or their privies) in subsequent actions on different causes of action between them (or their privies) as to issues actually litigated and essential to the judgment in the first action. This conclusive effect of the first judgment is called collateral estoppel, or issue preclusion. Note that collateral estoppel is narrower than res judicata. Res judicata focuses on something relatively large-the scope of a "cause of action." If it applies, the result is usually to bar the claimant from asserting a second case. Collateral estoppel, in contrast, focuses on something relatively narrow-an issue that was litigated and determined in the first case, and that is relevant in a second case. With collateral estoppel, the issue is deemed established in the second case without need to proffer evidence on it. Requirements 1) First Case Ended in a Valid Final Judgment on the Merits

249 This requirement is the same as was discussed above regarding res judicata. 2) Issue Actually Litigated and Determined The issue on which collateral estoppel applies must actually have been litigated and determined in the previous case. Thus, if a default or consent judgment is entered, there is generally no collateral estoppel as to the fact issues that would have been tried had the case gone forward. a. Parklane Hosiery Co., Inc. v. Shore (U.S. 1979) (pg. 897): 1st: SCC sues Parklane; 2nd: shareholders bring related complaint for damages i. Parklane had every reason to litigate as aggressively as possible in the first SCC litigation was given full and fair opportunity, so collateral estoppel applies ii. Ex. of non-mutual offensive collateral extoppel iii. Doesnt matter that 1st trial was a bench trial b. Settlement doesnt count as litigated 3) Issue Was Essential to the Judgment Whether the court in the original case could have come to the conclusion it did had it decided the issue differently (then not precluded) c. Hoult v. Hoult (1st Cir. 1998) (pg. 890): rape; defamation; court determined it was necessary to the previous action against the father that rape occurred. i. Rape charges were the centerpiece, or pivotal issue in the initial case and jury must have decided that rape actually occurred, so fathers later suit is barred by collateral estoppel. d. Jerosz v. Palmer (Mass. 2002) (pg. 894) i. Whether there was an attorney-client privilege issue in the first case wasnt determinative of that litigation, and so did not bar the fiduciary breach of duty claim

a. It must be clear exactly how the issue was decided by the trier of fact. Example: P sues for personal injuries based on D's negligence. D pleads contributory negligence as a defense. If the jury renders a general verdict for D, the decision will have no collateral estoppel effect in a subsequent case involving either P or D's negligence, because there is no way of knowing whether the jury found that D was not negligent or that P was contributorily negligent, or both. Compare: However, if the jury found for P for the full amount of his injuries, it clearly had to decide that D was negligent and P was not. Thus, both issues could have collateral estoppel effect in a later case. b. The judgment must depend on the issue of fact decided. Example:

250 If, in a personal injury action, the jury specially finds that neither P nor D was negligentthereby rendering a verdict for D-the finding that P was not negligent was not essential to judgment and will have no collateral estoppel effect in a later suit. c. Note that the "essential fact" rule tends to reduce the number of cases in which collateral estoppel can be applied, thus eliminating some of the burden from the first suit. Due Process and Mutuality Considerations 1) Against Whom Is Collateral Estoppel Used? Collateral estoppel may be asserted only against someone who was a party (or in privity with a party) to the previous case (the case in which the issue was actually litigated and determined). This requirement is imposed by due process, and thus is the rule in every jurisdiction. 2) By Whom Is Collateral Estoppel Used? Under the traditional "mutuality" rule, only someone who was a party (or in privity with a party) in the previous case can use collateral estoppel. This requirement is not imposed by due process, however, and has been subject to modification in certain circumstances to allow nonparties to take advantage of a prior judgment, as discussed in 0., below.

Res Judicata and Collateral Estoppel in Special Situations

Judgments for Specific Performance Rules of bar and collateral estoppel apply in actions brought for specific performance and the like. However, merger does not apply because such a judgment, unlike one for money, cannot be enforced by bringing a suit on the judgment. Thus, if the defendant fails to obey the first judgment, the claimant may sue again. In Rem Judgments If a court exercises in rem jurisdiction over some property or status within its control, and if proper notice has been given to all interested persons, the judgment as to title or status is binding on all persons. Quasi In Rem Judgments A quasi in rem judgment determines the rights of the parties only in the specific property before the court. No personal judgment is granted against anyone, and no other property is affected.

Who is Bound?
Parties Are Bound Parties are persons named as parties who have the power to control the action or who, if they lack capacity, are represented by guardians. Nonparties normally are not bound. Even where the lawsuit raises an issue as to performance or rights, nonparties normally are not bound by the judgment; e.g., an assignor who has no control over the suit and no interest in the outcome, or an employee who allegedly was negligent, where the suit is filed only against the employer. Privies to Parties Are Bound Persons who control the litigation and who will be affected by the outcome are bound by collateral estoppel as to all issues litigated.

251 For example, if the owner of a patent assumes control of an infringement suit brought by her licensee against a competitor, and the court holds the patent invalid, the owner is barred on that issue should she sue the same competitor. The owner has had her day in court. Persons whose interests are represented are bound. Beneficiaries are bound by an action brought or defended on their behalf by the fiduciary, provided the fiduciary is operating within her authority. Holders of future interests are bound. Unborn or unascertained persons having future interests in property are bound by judgments as to the property if their interests are identical to those of parties to the action, or is a special representative is appointed for them. This rule reflects public policy favoring free marketability of property. Members of a class are bound by a valid class action judgment. Successors in interest are bound. Transferees of property are in privity with prior owners and thus are bound by a prior judgment concerning the property. This rule protects the public as to security of titles.

Note, however, that one is not barred from asserting a claim simply because she is asserting the same claim that a previous claimant has already litigated. Example: Citizen A sues to challenge a tax as unconstitutional and loses. Citizen B is not barred from suing to challenge the same tax on the same basis unless Citizen A and Citizen B are in privity or Citizen A represented Citizen B in bringing the first suit. [Richards v. Jefferson County, 517 U.S. 793 (1996)] In vicarious liability situations (master-servant, principal-agent, insurer-insured) a judgment exonerating either generally is held to preclude an action on the same claim against the other. Example: P sues Principal claiming injuries as a result of Agent's negligence. P alleges Agent was acting in the course and scope of agency at the time of harm. A judgment in favor of Principal on the ground that Agent was not negligent would in some jurisdictions preclude suing Agent thereafter on the theory that Agent was negligent in causing the harm. If P first sued Agent and Agent was found not negligent, P should thereafter be barred from suing Principal fort he negligence of Agent causing the harm. Strangers May Take Advantage of Collateral Estoppel in Certain Circumstances While persons who are neither parties nor privies cannot be bound by a judgment, such persons may be able to take advantage of, or to assert, collateral estoppel (issue preclusion). Basic idea: Cant use collateral estoppel against a party that hasnt had a fair opportunity to be heard / to litigate the issue. The new party must be the one using either offensive or defensive collateral estoppel against the party from the previous suit. Declaratory judgment can be used by non-mutual parties for collateral estoppel purposes bc a declaratory judgment is a judicial statement of legal rights, so is stronger in a sense. Policy Implications of non-mutual collateral estoppel: Defensive is good: If defensive collateral estoppel were impermissible, then a P could sue each D one at a time. Fortunately, new defendant can use collateral estoppel to preclude the P from litigating the same issue when P should have joined the D in the original action encourages joinder and punishes for not joining appropriately under the FRCP, which favors and encourages joinder for reasons of efficiency and fairness

252 Offensive has the opposite effect as it discourages joinder and instead encourages P to sit back and wait instead of joining defendants o Can produce inconsistent judgments

The policies for offensive collateral estoppel are quite different from defensive collateral estoppel. Rather than encouraging plaintiff to join all parties in the first suit, the incentive is for potential plaintiffs to stay out of the first suit. Should the first plaintiff be successful, another plaintiff can then file suit and assert collateral estoppel. Should the first suit be unsuccessful, another plaintiff can then file suit and start from the beginning; the second plaintiff, as a nonparty to the first suit, cannot be collaterally estopped. This different consequence raises fairness concerns. Also, the policy of promoting efficiency to the court system may be undermined instead of encouraged by offensive collateral estoppel, since the incentive is to wait, see, and file additional suits instead of joining the first suit.

1) Traditional "Mutuality" Rules Since a judgment cannot be used against a person who was not a party (because such use would violate due process rights), that person has traditionally been barred from. taking advantage of the judgment-even though this may make little sense in a specific case, and even though this is not required by due process. 2) Exceptions to Mutuality When Judgment Used as a Shield (Defensive) When a nonparty wishes to utilize a prior judgment to avoid liability in a subsequent suit, there are often compelling reasons for allowing her to do so. For example, if P unsuccessfully sues a person primarily liable (e.g., a servant), P's later suit against a person secondarily liable (e.g., against the master for the servant's acts) will be barred by collateral estoppel in virtually all courts. Similarly, if P unsuccessfully sues a person secondarily liable, there is little reason why the person primarily liable should be subjected to a separate suit, and most courts so hold. Note: This rule does not apply if the first suit was or could have been decided solely on the ground that the defendant was not secondarily liable (e.g., where the defendant claims no master-servant relationship exists). 3) Exceptions to Mutuality When Judgment Used as a Sword (Offensive) a. Collateral Estoppel Generally Unavailable to Nonparty Plaintiffs Courts have been very reluctant to permit a nonparty to use a judgment to aid him (as a plaintiff) to obtain relief. For example, suppose one of many passengers in a public vehicle successfully sues the driver for injuries received in an accident, and other passengers wish to utilize the judgment to establish liability. While a few courts have permitted such use, others refuse. They fear a situation in which 10 plaintiffs each sue and lose, and the 11th plaintiff wins, and all other potential plaintiffs seek to ignore the first 10 suits and rely solely on the 11th; application of collateral estoppel in such a situation is considered unfair and demeaning to the legal system. b. Courts Should Consider Fairness to Defendant The United States Supreme Court, in Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979), upheld the use of collateral estoppel as a sword. In the first action, brought by the Securities and Exchange Commission, the defendant was held to have violated the federal securities laws.

253 The second suit, brought by a private plaintiff against the same defendant, alleged damages resulting from the same violation established in the first action. The Court allowed the latter plaintiff to rely on collateral estoppel to establish the existence of the violation since under all the circumstances it was fair to the defendant to do so.

Note: Nonmutual collateral estoppel cannot be used against the United States. [United States v. Mendoza, 464 U.S. 154 (1984)] In jurisdictions where the mutuality principle has been eroded, a four-part test is usually applied to determine whether a stranger may rely on a prior judgment: i. Was the issue decided in the first case identical to that in the second? ii. Was there a final judgment on the merits? iii. Did the party against whom the judgment is to be used have a fair opportunity to be heard on the critical issue? iv. Is the posture of the case such that it would not be unfair or inequitable to a party to apply collateral estoppel? If all these questions are answered affirmatively, collateral estoppel will normally be upheld. A court may find, however, that a party has not had a fair opportunity to be heard if the first case was insignificant (e.g., brought for $200), while the second is more substantial (e.g., brought for $200,000). Federated Dept. Stores, Inc. v. Moitie (U.S. 1981) (pg. 908): Even though other actions that it was joined with in district court successfully appeal dismissal, Moitie did not appeal and, because they made that choice, they are not precluded from re-filing by res judicata, regardless of whether the lower courts decision was wrong. Demonstrates the high priority of finality Allen v. McCurry (U.S. 1980) (pg. 916): 42 1983 claim re search and seizure against police officers after he shoots them. Police claim he should be estopped from arguing this issue because in the criminal case, the court found that the seizure wasnt unconstitutional. Preclusion issue: 1983 claim can only be brought in federal court There is no exception to general rule of collateral estoppel re 1983 cases Policy concern: If court had decided differently, it would have opened the courts up to a floodgate of litigation of prisoners seeking to get damages by revisiting issues that were decided in criminal actions State-to-State Preclusion Case 1 is litigated in state court in TX and results in a valid final judgment on the merits. Case 2 is brought by the same claimant against the same defendant in a state court in LA. LA preclusion law would permit the second suit but TX preclusion law would not. Both the constitutional provision for full faith and credit and 1738 require the courts of a second state to honor the judgments, including the preclusion rules, of the courts of the state that decided Case 1. So the LA court should apply TX law and dismiss Case 2 under claim preclusion. State-to-Federal Preclusion

254 Case 1 is litigated in a state court in Kansas and results in a valid final judgment on the merits. Case 2 is brought in federal court in NY. Does that federal court apply the preclusion law of KS, or NY, or is it free to apply federal law of preclusion? The federal court in NY applies KS law on preclusion, because the full faith and credit statute requires the federal court in NY to do what a state court in NY would do. A NY state court would apply KS preclusion law. Federal-to-State Preclusion Case 1 is litigated in federal court in Indiana, and that court enters a valid final judgment on the merits. Case 2 is filed in state court in FL. In determining the preclusive effect of the judgment in Case 1, does the FL court apply federal law, Indiana law, or FL law? The FL court will apply federal preclusion law, which is federal common law Federal-to-Federal Preclusion Federal law will govern the preclusive effect of the judgment entered in Case 1.

Choice of Law
Preclusion questions-whether claim preclusion or issue preclusion-always involve at least two cases. One case has gone to a valid, final Judgment on the merits. Preclusion law determines whether that judgment (in "case one") precludes litigation of any matters in the pending, case ("case two"). (By the way, note that "case one was not necessarily filed first; it is case one because it went to judgment first.)? GOAL OF CLAIM PRECLUSION AND ISSUE PRECLUSION To ensure that judgments are absolutely final and to prevent a cause of action from being relitigated between the same parties (res judicata) or the relitigation of the same issue in a different cause of action between the same parties (collateral estoppel) Absolute finality has these benefits: o Prevents the entry of inconsistent judgments o Prevents harassment from multiple suits on the same claim o Promotes judicial economy by resolving a dispute or an issue in one lawsuit Case One Decided in State Court When case one has been decided in state court, the court in case two (whether state or federal) generally will apply the claim or issue preclusion law of the jurisdiction that decided case one. Example: Judgment is entered in a case in Kansas. A second case is brought in Missouri. To decide whether that case is subject to claim or issue preclusion, the judge in Missouri should generally apply Kansas law on claim or issue preclusion. Case One Decided in Federal Court Under Diversity jurisdiction What if case one was decided in a federal court under diversity jurisdiction? Here, the Supreme Court held that the court in case two should apply federal law (because a federal court decided case one). However, it also held that usually the federal law in such an instance would be the state law of the state in which the federal court sat. Example: After plaintiff files suit in a California state court, defendant removes the case to federal court based on diversity jurisdiction. Plaintiff's federal court case is then dismissed under Rule 41(b) (involuntary dismissal) because it is barred by California's statute of limitations. Plaintiff files

255 the same claims in state court in Maryland (which has a longer statute of limitations). In determining whether to dismiss the case under claim preclusion, the Maryland state court should look to federal law. But federal law would adopt the California law (unless "state law is incompatible with federal interests"). Because California law would allow the plaintiff to file in a jurisdiction with a longer statute of limitations, the Maryland court should not dismiss under claim preclusion. [Semtek, Inc. v. Lockheed Martin Corp., A.4., supra]

Civil Rights Statutes

42 U.S.C. 1983: Civil action for deprivation of rights Every person who, under any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia. 42 U.S.C. 1988. Proceedings in vindication of civil rights (b) Attorney's fees In any action or proceeding to enforce a provision of sections 1981, 1981a, 1982, 1983, 1985, and 1986 of this title, title IX of Public Law 92-318 [20 U.S.C.A. 1681 et seq.], the Religious Freedom Restoration Act of 1993 [42 U.S.C.A. 2000bb et seq.], the Religious Land Use and Institutionalized Persons Act of 2000 [42 U.S.C.A. 2000cc et seq.], title VI of the Civil Rights Act of 1964 [42 U.S.C.A. 2000d et seq.], or section 13981 of this title, the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney's fee as part of the costs, except that in any action brought against a judicial officer for an act or omission taken in such officer's judicial capacity such officer shall not be held liable for any costs, including attorney's fees, unless such action was clearly in excess of such officer's jurisdiction. (c) Expert fees: In awarding an attorney's fee under subsection (b) of this section in any action or proceeding to enforce a provision of section 1981 or 1981a of this title, the court, in its discretion, may include expert fees as part of the attorney's fee.

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Class Action lawsuit

1. A suit in which a person belonging to a class of people all sharing a common issue entitling them to the same relief, sues, or is sued as representative for the entire class. The class action device eliminates the need to join all members of the class in the action. Class actions may be brought in the federal courts, under FRCP 23, and in most states a) COMMON CLASSES: minority shareholders in a shareholder derivative suit; taxpayers of a community who wish to challenge a proposed public expenditure; multiple parties in antitrust cases, securities fraud cases or civil rights case. NOTE: Mass torts are ot favored for class action suits, because in tort cases, there are typically significant questions of damages, liability and defenses that affect each plaintiff differently 2. Class Actions are utilized when necessity and convenience justify a representative action instead of multiple actions by (or against) individual class members 3. A class action must meet the four requirements of FRCP 23(a) and it must also fit one of the three classifications of FRCP 23(b) a) Rule 23(a)(1): Numerosity: class must be so numerous that joining every member of the class individually would be impracticable (1) Must be large enough so joiner of every member becomes extremely difficult, and small enough to satisfy the concept of class. This has resulted in inconsistent rulings25 has been declared a large enough class and 350 has been declared too small. (a) In determining whether the class is large enough, consider these factors: (i) The amount involved in each individual classthe smaller the claim, the more likely the court will be to approve the class (ii) Likelihood that individual members will bring individual actions (less likely=more likely class allowed) (iii) Importance to public of the right that is being asserted (iv) Whether the claim is well-founded (i.e., class is not contrived) (v) Geographic dispersion of members (b) In determining whether the class is small enough, remember that the class must be capable of clear definition (e.g., not all poor people) and it must be manageable. Also, all notice requirements must be satisfied. In a 23(b)(3) class action, notice to all identifiable class members is requiredthus, the larger the class, the more cumbersome and expensive the notice will be b) Rule 23(a)(2): Commonality: the underlying claim must involve questions of law or fact common to everyone in the class (this is generally satisfied if the class meets one of the 23(b) standards c) Rule 23(a)(3): Typicality: the claims of the representative(s) maintaining the action of the class behalf must be typical of the class in general (1) Why? To ensure that the representative will be motivated to protect the interests of the entire class. The notion is that if his claim is typical, he

258 will have the same incentive to pursue the claim as aggressively as any other member of the class (2) The representative must prove that he has sustained injury or damage. A claim of injury to the class but only potential injury to himself will not suffice (e.g., in an environmental case the representative cannot claim that an existing condition which has harmed others may ultimately harm him). d) Rule 23(a)(4): Adequate and fair representation and protection of the class interests: the representative(s) must be able, fairly, and adequately, to protect the interests of all the class members (1) There cannot be any actual OR potential conflicts of interest between the representative and the class, and, also, that the representative must have competent legal counsel (2) Adequacy of representation is measured at two different times (a) First, before certification of the class, in order to satisfy the judge (b) Second, if the defendant argues that a plaintiff who was not named in the class and who later brings a separate action was bound by the suit. In that case, the court will inquire whether the representation was in fact adequate. If not, the unnamed plaintiff is not bound by the class action (3) If the case proceeds to judgment without objection, the judgment can be attacked by unnamed class members on grounds of inadequate representation, even if the court actually found the representative adequate. Hansberry v. Lee (1940). 4. Certification: the courts determination whether an action should proceed as a class action. FRCP 23(c)(1) a) Timing: the certification must take place as soon as possible after commencement of the suit b) Material Considered: any issues raised in the proceeding, especially those which determine whether proceeding by representation is in orderthe court is not confined to the pleadings. However, the court cannot determine the merits of the case, but it can determine if the plaintiff has an realistic chance of recovery c) Results: if a class action is in order, the court certifies the action, under FRCP 23(c)(1). This is a tentative order; the court can subsequently limit or reduce the case to the named representatives personally or to a sub-class. Even after judgment, the court may modify it if it wont unfairly subject the defendant to liability. If the court doesnt certify, the class action as such is ended, but the case may proceed either with a smaller class or with the representatives personally. There will be no res judicata effect on the absent members. Under FRCP 23(f), the appellate court may in its discretion hear an interlocutory appeal from the district courts decision either to grant or deny class certification E. 5. Rule 23(b) a) 23(b)(1)prejudice to parties (1) Look at the absent members. Will they be prejudiced if theres no class action? Will the interests of a class member who is not a party be impaired by the judgment? Will the defendant be faced with inconsistent standards of conduct under separate and incompatible judgments? Its the

259 element of potential prejudice to parties that characterizes these (b)(1) actions (2) Two kinds of class actions that fit within (b)(1) (a) Incompatible standards 23(b)(1)(A) (i) If not consolidated in a class action, separate actions will result in incompatible standards of conduct for the defendant, as a result of inconsistent adjudications. To allow a class action on this basis, the court must find two things: (a) If not brought together in a class action, several individual suits are likely to be filed (b) The conduct required of the defendant under the various judgments is likely to be inconsistent (e.g., because of different approaches in different states) (b) Limited Funds 23(b)(1)(B) (i) Without a class action, the adjudication of separate claims might be dispositive of the claims of non-parties to the actions and impede or impair their ability to protect their interests (a) Ex. One of a number of claimants will recover first from a fund insufficient to pay all the claims; also suit by a shareholder to compel distribution of a dividend (note that this is not a shareholder derivative suit, in which shareholders sue on the companys behalf). 23(b)(2)equitable relief or declaratory judgment required (1) Look at the relief requested; if the plaintiff seeks either an injunction or declaratory relief, its a (b)(2) action. A (b)(2) action cannot look for money damages as the appropriate final relief. Most (b)(2) actions are civil rights actions (2) Ex. Wal-Mart v. Dukes 23(b)(3)damages sought (1) In (b)(3) cases, damages are sought. While this category is theoretically any case in which there is a common question of law or fact among members, as a practical matter, the vast majority of these cases seek damages (a) Its important to distinguish (b)(3) actions from the others because of (b)(3)s NOTICE and OPT OUT provisions. Under (b)(3), all identifiable members of the class must be given notice in the best way possible, almost always by mail. (b)(1) and (b)(2) notice may be satisfied by publication. Furthermore, class members can opt out of (b)(3) actions, but not (b)(1) or (b)(2) actions. As a result, members can avoid being bound by (b)(3) class-action judgments, but not (b)(1) or (b)(2) judgments (2) In order to proceed as a 23(b)(3) class action, two requirements must be met: (a) 1. Predominant common questions: the questions of law or fact which are common to the members of the class must predominate over questions affecting only individual members AND

b)

c)

260 (b) 2. Superior to other methods: a class action must be superior to other available methods for the fair and efficient adjudication of the controversy (i) Four factors that must be considered by a court in determining whether a class action is superior to other available methods of adjudication (a) Individual control interest: the interest of the members of the class in individually controlling the prosecution/defense of separate actions (b) Existing litigation: extent and nature of litigation concerning the controversy already underway by or against class members (c) Concentration in a single forum: desirability or undesirability of concentrating all claims in one forum (d) Management difficulties: difficulties of managing the litigation in a class action (e.g., huge number of members) Notice in class action (1) Of the 3 types of class actions, only one requires individual notice to all identifiable class members23(b)(3) actions (damages/common question). Why is notice crucial to (b)(3) actions? (a) Lack of pre-existing relationship (i) In (b)(3) actions, class members are generally only loosely associated with each other. They are linked only by a common question of law or fact. Because theres no preexisting or continuing legal relationship, its not as certain that the representatives will fully protect the members as it is in (b)(1) (prejudice) and (b)(2) (equitable relief) class actions (b) Opt Out provision (i) 23(b)(3) is the only classification under which a class member can opt out, thus avoiding the effect of judgment. Before an absent member can exercise the right to opt out of the action, he must know about it. ****If a class falls under (b)(1) or (b)(2) AS WELL AS (b)(3), absent members cannot opt out!!** (2) Elements of notice to absent class members (a) The suits existence (b) The nature of the claim and the relief requested (c) The provision which have been made for funding the lawsuit (d) The identities of the representatives Elements of notice for Rule 23(b)(3) cases (a) Right of exclusion: advise the member that the court will exclude him from the class if he elects exclusion by a certain date (b) Binding effect: the judgment will have binding effect on him unless he opts for exclusion

d)

(3)

261 B. (c) Right to counsel: if he does not opt for exclusion, he may be represented in the action by his own attorney Subject matter jurisdiction requirements (Very testable crossover) 1. Diversity: Citizenship of the representative (not the class members) controls in determining diversity. 2. Amount in controversy: a) Under case law existing prior to the enactment of the Supplemental Jurisdiction provisions of the Judicial Improvements Act of 1990, each individual class members claim had to meet the $75,000 amount in controversy requirement (unless all claims could be aggregated which was usually not allowed under the common law rules of aggregation). In 2005, the U.S. Supreme Court held EXXON CORP. V. ALLAPATTAH SERVICES, that under the Supplemental Jurisdiction statute, supplemental jurisdiction can be asserted over an individual class members claim which does not meet the amount in controversy requirement (assuming, of course, complete diversity is satisfied) as long as a class representatives claim does exceed $75,000.) b) In 2005, Congress created the Class Action Fairness Act (CAFA) which amends both the diversity statute and the removal statute in big multi-state class action suits. CAFA provides for minimal diversity in which any one member of the class (named or not) has diverse citizenship from any one defendant and where the aggregate amount in controversy exceeds $5 million. CAFA also expands removal jurisdiction over class actions, in part, by eliminating, in removal of class actions, the requirement, in diversity cases that no defendant may be a citizen of the forum state.

Class Action Cases

Hansberry v. Lee There must be adequate representation of the members of a class action or the judgment is not binding on the parties not adequately represented. Facts: Hansberry (D), an African American, purchased land from a party who had signed a restrictive covenant forbidding the sale of land to blacks. Lee (P), one of the parties who signed the covenant, sought to have the sale enjoined because it breached the covenant. Lee contended that the validity of the covenant was established in a prior case in which one of the parties was a class of landowners involved with the covenant. To be valid, 95% of the landowners had to sign the covenant, and the trial court in the prior case held that the required 95% had signed the covenant. That case was appealed, and the IL Supreme Ct upheld the decision, even though they found that 95% of landowners had not signed the covenant, but the court held that since it was a class action, all members of the class would be bound by the decision of the court. Hansberry claimed that he and the party selling the house to him were not bound by the res judicata effect of the prior decision, as they were not parties to the litigation. The lower court held that the decision of the IL Supreme Court would have to be challenged directly in order that it be set aside or reversed. Otherwise, their decision was still binding. The case was appealed to the US Supreme Court Issue: Whether it is necessary for all of the members of the class to be adequately represented by parties with similar interest for a judgment in a class action be binding.

262 Holding: Yes. It is not necessary that all members of a class be present as parties to the litigation in order to be bound by the judgment, if they are adequately represented by parties who are present. Hansberry wasnt adequately represented by the class of landowners. Their interests were not similar enough to be considered members of the same class. Lee and the landowners were trying to restrict Blacks from buying any of the land, and Hansberry was a Black attempting to purchase land. When there is such a conflicting interest between members of a class, there is most likely not adequate representation of one of the members of the class. There must be similiarity of interest before there can even be a class. Since there was no similarity of interests between Lee and Hansberry, Hansberry could not be considered a member of the class and so the prior judgment was not binding on Hansberry. Hansberry was not afforded due process because of the lack of adequate representation. Phillips Petroleum Co. v. Shutts A state may exercise jurisdiction over a class action plaintiff even if the plaintiffs contacts with the state would not confer jurisdiction over a defendant Wal-Mart Stores, Inc. v. Dukes 1. A class consisting of more than one million women employed by a single employer nationwide cannot be certified as a class if they do not meet the commonality threshold for class certification under FRCP 23(a)(2) because they cannot demonstrate all class members were subject to the same discriminatory employment policy 2. Claims for monetary relief may not be certified under FRCP 23(b)(2) where the monetary relief is not incidental to the injunctive or declaratory relief Why would back-pay be sought under a 23(b)(2) class Martin v. Wilks A consent decree mandating affirmative action does not have preclusive effect upon a subsequent challenge to those programs brought by persons not parties to the prior action FRCP 24 o (a) Intervention of Right On timely motion, the court may permit anyone to intervene who: (A) Is given a conditional right to intervene by a federal statute; or (B) has a claim or defense that shares with the main action a common question or law or fact
Advantages: Class actions have several advantages over individual lawsuits: (1) Class actions can save resources by permitting the litigation of multiple, related claims more efficiently and economically than individual lawsuits. (2) In addition, where defendant has engaged in a systematic pattern of wrongdoing, a plaintiff's class action can provide a group remedy without the cost and delay of multiple separate lawsuits and the attendant risk of inconsistent judgments. (3) Finally, lawyers in a successful class action can usually collect their legal fees and expenses, under either a statutory provision or the common fund recovery theory. This can be a substantial incentive for plaintiffs' lawyers. (4) From defendants' perspective, a class action provides a single determination of the merits of the claims, protecting them from repeated lawsuits. Disadvantages: On the other hand, pursuing a class action poses burdens and risks, including the following:

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(1) The costs and effort required to manage a full-blown class action may be immense: e.g., identifying the class members; sending out notices; and coordinating complex litigation with multiple parties and claims. (2) Class actions often provoke a massive response by the opposing party: immediate, aggressive discovery; motions and procedures to block certification; appeal or writs to challenge adverse rulings; and efforts aimed at making it as difficult as possible for plaintiff to get the case to trial. (3) A class action complaint, once filed, makes the named plaintiffs and their attorneys fiduciaries for members of the class, even before certification. Once the class action is filed, they must maintain it unless they obtain court approval to dismiss it or certification has been denied. (4) Often the financial costs are so high that the class action lawyers may have to make sizable cash advances just to keep the case going. Courts are usually unwilling to make interim attorney fees or costs awards. Thus, by the time the case is ready for trial, the lawyers representing the class often have so much invested in the litigation, both in time and money, that objective evaluation of settlement becomes difficult. (5) Class actions tend to drag on and are difficult to settle (although few actually go to trial). They cannot be compromised or dismissed without notice to the class and formal court approval. Moreover, defendant can put the class lawyer in an awkward position by offering settlement without provision for payment of attorney fees (6) Finally, even if the class claim is successful, the attorney fees are always subject to court approval; and courts often reduce fee requests substantially.

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Supplemental Charts
Charts Your Course:
PROCEDURAL DEVICES THAT MAY TERMINATE
Method Pre-Answer Motion [Rule 12(b)] Circumstances Addresses the following preliminary malters: defects in subject malter jurisdiction, personal jurisdiction, venue, process, and service of process; failure to state claim; failure to join needed party. Without prejudice once as a malter of right; also possible by stipulation or court order.

CASE

Timing (See summary chart supra for timing of Rule 12 defenses.)

Voluntary Dismissal by Plaintiff [Rule 41 (a)J

If dismissed as a matter of right without prejudice, must be done before defendant files answer or motion for summary judgment. Anytime.

Involuntary 41 (b)]

Dismissal

[Rule

Plaintiff fails to prosecute the case or to comply with the Rules or a court order. On the face of the pleadings (without considering matters outside the pleadings), the moving party is entitled to judgment. Treated as motion for summary judgment if accompanied by outside matters. No genuine dispute of material fact and moving party is entitled to judqrnent as a matter of law. May support by pleadings, affidavits, discovery materials.

Motion for Judgment on the Pleadings [Rule 12(c)]

After pleadings are closed but not so late as to delay trial.

Summary [Rule 56]

Judgment

Unless local rule or court order dictates otherwise, a party may file a motion for summary Judgment at any time until 30 days after close of discovery. If a motion is premature, the court may defer ruling on it. During trial, once the judge has heard sufficient evidence to make dispositive findings and all parties have been fully heard on the issue. After opponent has presented case but before submission of case to jury.

Judgment on Partial Findings [Rule 52J

In a nonjury trial, the judge may enter a judqrnent as a matter of law if she makes dispositive partial findings on the claim. Evidence viewed in light most favorable to motion's opponent leads reasonable person to conclusion in favor of moving party. The verdict returned could not have been reached by reasonable persons. Moving party must have previously sought judgment as a matter of law sometime during the trial.

Motion for JUdgment as a Matter of Law (Directed Verdict) [Rule 50 (a)]

Renewed Motion for Judgment as a Matter of Law ("JNOV") [Rule 50(b)]

Within 28 days after entry of judqrnent.

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FEDERAL CLASS ACTION REQUIREMENTS

A federal class action must meet all four requirements on the left side of the chart and one of the requirements on the right. The three alternatives on the right determine the type of federal class action. Only the third type, i.e., the common question type, requires notice to all class members and allows opting out.

Numerous class and Common questions and Typicality and Fair and adequate representation

barbr.'
or

Risk of inconsistent results

Injunctive or declaratory relief appropriate

Charts Your Courseor

Common questions predominate and a class action is superior to alternate methods of adjudication

TIMING OF RULE 12 DEFENSES

Defense

Timing

1. Lack of jurisdiction over the subject matter-----I

May be raised anytime, even on appeal

2. Lack of jurisdiction over the person

3. Improper venue 4. Insufficiency of process

~::==::::::::~~~~
-------l
L-

Waived if not raised by motion or answer, whichever is first

5. Insufficiency of service of process

6. Failure to state a claim upon which relief can be granted 7. Failure to join a party under Rule 19 (indispensable party)

May be raised anytime before trial or at trial ----I

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EXAM APPROACH
ERIE ISSUES
In order to spot an Erie issue on a Civil Procedure exam, you must have a fact pattern that puts a lawsuit in federal court based on diversity jurisdictionif the case is in federal court based on a federal question, then its clearly the federal law that will be applied! Look at the particular state law (either a statute or a case law precedent) that is in question. Is that law clearly a substantive law? (This could mean that its a tort statute, a contracts statute, a choice-of-law statute, a state common law trend, etc.)

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