OVERVIEW OF CIVIL PROCEDURE

ANALYSIS:
 Specific rules, then
 Principles (of public law), supporting the rules, then
 Socio/Economic/Political Context

3 Sources of Rules of Civ. Pro

1. FRCP
2. Statutes from Legislature
3. Courts make them up as they go along

LAWYERING TOOLS:
 Procedural Realism: Be well connected to the real world; how procedure is crafted, interpreted,
and applied.
 Prophesy: “the role of the lawyer is prophesy…” –Supreme Court Justices of the past.
 We don’t just determine what the law is today and was yesterday, the real way to earn your keep
as a practicing lawyer is to predict – what will the law be in the future and how can you change
the law to what you would like.

Briefing Each Rule:

1. Purpose of each relevant subsection
2. Main purpose of rule
3. Look to language for the key requirements, elements, or provisions
4. Specific impact
5. Larger impacts on the lawyer, client, litigation
6. What is the strategic input? How is this something that lawyers use against each other? How to
prevent it from being used against you?
7. How does the rule work? How does the rule relate to other rules?
 PERSONAL JURISDICTION
OVERVIEW:
 Personal Jurisdiction: the power of a court over a person from another state.
 State and Federal Courts must have personal jurisdiction to have a binding judgment.
 State courts guard their jurisdiction and try to protect the rights of their residents in the
jurisdiction.
 Personal jurisdiction law is still unsettled.

Pennoyer v. Neff (1877)

“Exclusive” PJdx. determined by territory
Traditional Bases of PJdx:
1. Consent
2. Physical presence at the time of service
3. Domicile
4. Property attached.

CONTEXT: Post Civil War (1868 to 1877)

 Freed slaves moving northward
 Southern economy in shambles due to war
 14th amendment introduced – Equal Protection and Due Process
 Pennoyer was the first case to interpret the 14 th amendment “no state shall deprive any person
from life, liberty, or property without due process of law.”
o People feeling empowered by amendments
o States’ power is being constrained.
RULE: territorial jurisdiction; the person/thing must be in the state or territory to exercise jurisdiction.
 “…that the laws of one State have no operation outside of its territory, except so far as is allowed
by comity; and that no tribunal established by it can extend its process beyond that territory so as
to subject either persons or property to its decisions…” (p. 63)
 Rule consistent with four traditional bases of PJdx
 Rule didn’t really function as an explicit rule – Court wanted to articulate broader principles:
o Two Grand Principles of Public Law:
 (1) Every state possesses exclusive jurisdiction and sovereignty over persons
and property within its territory.
 (2) No state can exercise direct jurisdiction and authority over persons and
property without its territory.
 Rule didn’t really work though – partnerships, associations, corporations, contracts, marriages
(civil status) and divorce.

BROADER PICTURE: Despite post Civil war amendments and 14th amendment; court wanted to reassure
southern states that 14th amendment wasn’t going to be used to allow one state to power over another
state (particularly the northern states will not have control over the dealings of other states).

ERROR IN DP INTERPRETATION: Supreme Court articulates principles of state sovereignty and

independence of the states  interpreting DP as protecting the states from encroachment of power of
other states BUT the DP clause protects individuals or persons NOT the states.

PRACTICAL PROBLEMS/VAGUE EXCEPTIONS:

  Supreme Court approves power over individuals not meeting traditional bases of personal
jurisdiction in the following cases: civil status (marriages/divorces); partnerships; associations;
corporations; contracts; property.
 Concern about the effect of out of staters – railroads: when people cross state lines, injuries
happen.

GOOD LAW OF PENNOYER:

1. DP clause requires state court to have SMJ and PJ in order to render a binding judgment over a
person.
a. If it lack’s either, the court violates citizen’s DP rights.
2. Collateral Attacks: A separate lawsuit attempting to invalidate the judgment in initial suit.
a. Judgment from another state enforceable (given full faith and credit) only if rendered
with PJdx and SMJ.

Hess v. Palowski (1927)

Expansion of PJdx. w/ Reciprocity (Quid pro Quo)

Underlying Suit:

P: Hess (Mass.) D: Palowski (Penn.)

Hess injured in auto accident in Mass by Palowski. Hess sues Palowski in Mass court.

Present Suit:

P: Palowski (Penn.) D: Hess (Mass.)

Palowski appears specially and contests jdx in a motion to dismiss.

CONTEXT: Roaring 20s (America in 1927)

 Mass production of automobiles  changed interstate contact and the way people interacted.
 Jobs, factories, prohibition (sent production of alcohol underground and across state lines).
 Economy, stock market good  Corporations enabled to raise tremendous amounts of capital 
fueled industry  fueled commerce.

RULE:
“The acceptance of a non-resident of the rights and privileges [from the state] as evidenced by his
operating a motor vehicle… on a public way… shall be deemed the equivalent to an appointment of [the
state registrar to receive service for him in the state].”
 Non resident voluntarily accepts the amenities of the state (state laws, rights, privileges)? 
then non resident should be subject to the laws of the state.
 Palowski’s single contact with Massachusetts gave rise to the claim.
 Court stayed within the rule of Pennoyer by stating that a form of mandated consent was given
by Palowski by driving on Massachusett’s highways (used Kane case ).
 Sometimes a single contact can be enough (if the nature and quality – reciprocity) confer
general PJdx.

BROADER PICTURE:
 Expansion of state court jurisdiction because:
o State looking out for safety of its citizens; police power to protect the safety and welfare
of the people; State’s interest in regulating the highways; state’s interest in having
forum in own state to enforce own laws; equal treatment between nonresidents and
residents.
o It is FAIR to make sure that Palowski comes back to Mass and accepts responsibility.
  Pennoyer does not incorporate fairness.

International Shoe Co. v. Washington (1945)

Expansion of PJdx. w/ use of “Reasonableness” / Overrule of Pennoyer

CONTEXT: 1945 era

 WWII coming to an end.
 Beginning of UN  internationalization
 Economy reinvigorated by industry (iron, weapons) and expanded workforce
 Mass manufactured goods world-wide
 More inter-state transactions since Hess.
 Trains, automobiles, and the power to raise capital to general expansion (corporations)
 Corporations became the vehicle for attracting capital and expanding industry
o Lots of suspicion of corporations/Great distrust of corporations (both powerful and
dangerous)  CORPORATE ACCOUNTABILITY

RULE: Court overrules Pennoyer

“Due process requires only that to subject [an out-of-state defendant] to a judgment in personam… he
have certain minimum contacts with [the state] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.”
 Focus on quality and kind of CONTACTS  ACTIVITIES within the state TO MAKE IT REASONABLE
TO CONFER PJDX. (very vague)
 Presence of corporation is decided by activities in the state (look at what corporation does in
state and disregard tangible things such as offices, etc.)
 Supreme court recognizes that state court can exert jurisdiction over out-of-stater with only one
contact if the nature and quality of the contact makes it reasonable.

General v. Specific Jdx.

 Specific Jdx. – D’s activities within a state give rise to claims. (no problem)
 General Jdx. – D’s has activity within state, but those activities do not give rise to the claim 
must look to the nature and quality of the contacts.
o “... there have been instances in which the continuous operations within a state were
thought so substantial and of such a nature as to justify suit against it on causes of
action arising from dealings entirely distinct from those activities.” (p. 78)

Relevant Factors for Reasonableness Analysis:

1. Fair play – CONVENIENCE of D to defend suit out-of-state
a. “An estimate of the inconveniences which would result to the corporaton from a trial
away from its home or principal place of business is relevant in this connection.” (p. 77)
b. Contacts need to connected to the thing that gave rise to the suit.
c. Not too inconvenient for corporation to defend self out of state? (we saw this in Hess)
2. Benefits and Obligations – RECIPROCITY (adopted from Hess)
a. Corporation enjoys benefits and protections of state’s laws so they should return the
obligation to defend itself in the state’s court if being sued for violating these obligations
3. Other Factors:
a. Quality and nature of the activity  whether that contact confers benefits and
protections of state’s laws.

BROADER PICTURE:
 Corporations are legal fictions  they can’t be physically present.
 Revolutionary reframing of the rule  territory and sovereignty taken out of the picture.
  Court engaging in procedural realism (get away from the fictions and labels) to look at what’s
really going on.

World-Wide Volkswagen Corp. v. Woodson (1980)

Contraction of state court PJdx. w/ Convenience, Reciprocity, and SOC Theory

Underlying Suit:

Audi (Germany)

Volks (Michigan)
Robinsons (NY)
World-Wide (NY)

Seaway (NY)

* no complete diversity of citizenship so suit not qualified to be

removed to federal court (must stay in state court)

Present Suit:

WWVW Woodson
Seaway

Thru writ of mandamus, WWVW filed suit against

trial Judge Woodson, who denied WWVW’s motion to
dismiss.
CONTEXT: 1980s
 Carter Recession - stagflation (stagnant economy and inflation)
 Strong sense of expansion to protect American businesses
 Time of flowering of mass-manufactured goods especially pharmaceuticals
o Chain of Command of Creation and Distribution (crucial to WWVW)

Parts taken from everywhere  Manufacturing  Importing  Distribution  Retailer

 When the claim is a products liability case (product defect cases), you must show defect and
causation, then everyone in the chain of distribution is liable.
 In HI: asbestos, lead poisoning, agent orange
 Theory: if it is a mass manufacturing of goods, many people are benefitting from it and many
people are injured by it.

BACKGROUND OF CASE:
 Plaintiffs in underlying case (Robinsons) want to stay in OKLAHOMA STATE COURT – Creek
County because of FAVORABLE JURY POOL.
o Blue collared county
o Very sympathetic to people injured by outside companies
 Robinsons sued all four defendants in chain of distribution.
  Seaway and WWVW filed a motion to dismiss for lack of personal jurisdiction – FRCP RULE 12(b)
(2).
 Trial judge Woodson denied their motion to dismiss.
 Writ of Mandamus Filed: Since there is no right to appeal until the final judgment is rendered,
WWVW and Seaway file a writ of mandamus (separate lawsuit to challenge a judge who is
allegedly exceeding her jurisdictional powers; lawsuit is rarely allowed and starts in the Supreme
Court).
 HI Standard for Writ of Mandamus: writ of mandamus lies when judge exceeds her jurisdiction
(DP) or where judge is manifesting an egregious use of authority.
 Strategic Significance:
o WWVW and Seaway is backed by Audi and Volks (funding litigation) in an effort to get
WWVW and Seaway dismissed from case.
o With WWVW and Seaway dismissed, complete diversity of citizenship is established 
remaining defendants can remove to federal court.
o A removal to federal court for the defendants can mean pulling a different, broader jury
pool who is less sympathetic to injured plaintiffs than the state court jury pool.

LAWYERING STRATEGY:
 If you want to get a broader jury pool in federal court  make sure to establish complete
diversity of citizenship, even if this means trying to get a party or two dismissed.
 If you want to stay in state court for the favorable jury pool  make sure to enjoin all defendants
to prevent establishment of complete diversity of citizenship.

RULE:
 Court reaffirms International Shoe.
 Adds on to clarify the due process framework:

PERSONAL JURISDICTION
1. LA Statute
a. Transaction of business within this state (NARROW)
b. Commission of tortious act within this state (BROAD, as long as injury is
experienced in the state, then the tortious act is considered to committed
within the state)
2. Due Process
a. Minimum Contacts - D’s Contacts
i. Reciprocity (Quid pro Quo) – Hess
ii. Purposefulness in Contacts – change from Int’l Shoe (more
restriction here) **Additional requirement (p.99) – nature of
contact is such that D should reasonably anticipate being haled into
court there.
1. D must purposely do it with knowledge that he is
receiving benefits (notice and forseeability)
*If you don’t establish minimum contacts, then you cannot get to convenience analysis
b. Convenience
i. D’s interest – primary concern (Int’l Shoe) (other factors from Hess)
ii. P’s interest in obtaining convenient and effective relief
iii. State’s interest in adjudicating the dispute (protecting its own
citizens, insuring that its own substantive laws are protected and
followed).
iv. Interstate judicial system’s interest (vague)
v. Shared interest of the several states in furthering fundamental
substantive social policies
White’s Stream of Commerce Theory: State satisfies DP “if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of commerce with the expectation that they will be
purchased by consumers from the forum state.”
 Knowledge is required that the product is going to that specific state and that you are getting
benefits from that state.
 If purposeful, then D has notice to buy insurance, pass on costs to consumers, etc.
 In WWVW, not purposeful in case where product brought in to forum state by consumer.

2 Functions of Minimum Contacts:

 Protects D against the burdens of litigating in a distant or inconvenient forum.
 Acts to ensure the States, through their courts, do not reach out beyond the limits imposed on
them by their status as coequal sovereigns in a federal system. (ERROR? See below)

Implications of New Rule:

 Harder to find minimum contacts and reciprocity due to the more stringent requirements of
purposeful contact such that D has notice and foreseeability of being haled into court there.
 State court judges don’t like this formulation (constricts their jurisdictional reach)
 Injured plaintiffs don’t like this (doctors, medical care in their home states; inconvenient)

Other Notes:
 We know DP protects individuals from state BUT the issue is resurrected again at the bottom of
p.98)
 The court is trying to find a rationale to pull back state court jurisdictional reach.
 Turns out that this is the wrong concept but the underlying motivation may have been correct –
there needs to be some kind of limits for state court jurisdiction.
 Dissent by Justice Brennan:
o Rejects White’s Stream of Commerce Theory
o States that autos are meant to be mobile.
o Feels for individuals who are hurt by this opinion.
o Feels that White’s formula is too restrictive  no expectation is needed.

Asahi Metal Industry Corp. v. Superior Court (1987)

DP = White SOC Theory + Purposeful Direction (tie)

Underlying Suit:
Superior Court of California

settled Honda
Zurcher (CA)
settled Cheng Shin Rubber Industrial Co.
(Taiwanese Manufacturer)

(Indemnification suit)

Asahi Metal Industry Co.

(Japanese Corporation)
ANALYSIS:
 Tie on Part IIA (Power) analysis; All in agreement for Part IIB (Convenience) analysis.

Part IIA: Power Analysis:

Brennan White O’Connor (4 Votes)

WWVW, White Majority Reinquist, Powell, Scalia join

No expectation DP  injection of product into the White + purposeful direction

stream of commerce w/ expectation
of purchase by consumer in forum state

Favors injured P’s Favors D’s and businesses

Brennan:
 Would take the “expectation” out because a corporation could expect that product would move
because product is mobile.
 Thinks that injured P should be #1 factor on convenience.
White:
 SOC Theory satisfies both elements of power in a situation involving out of staters and mass
manufactured goods are travelling through the chain of distribution.
RULE:
 PART IIA: POWER
o Addresses White’s SOC Theory
 Some courts follow it directly
 Some courts require that D’s actions be more purposefully directed at the
forum state.
 Requires White SOC + something more
 Placement in SOC not enough
 O’Connor: Due Process = White + Purposeful Direction
 Purposeful direction = “additional conduct of the defendant may indicate an
intent or purpose to serve the market in the forum State, for example,
designing the product for the market in the forum State, advertising in the
forum State, establishing channels for providing regular advice to customers
in the forum State, or marketing the product through a distributor who has
agreed to serve as the sales agent in the forum State. But a defendant’s
awareness that the stream of commerce may or will sweep the product into the
forum State does not convert the mere act of placing the product into the
stream into an act purposefully directed toward the forum State.” (p. 23)
 Dissent to Part IIA: Power based on O’Connor’s formulation
o Brennan, White, Marshall, and Blackmun  no need for purposeful direction
o Brennan abandons his previous position and embraces White’s stream of commerce
theory  thinking of injured plaintiffs like the Robinsons and thinking about most
products liability lawsuits (injured plaintiffs who need relief); saw a further tightening of
the minimum contacts rule of White.
 Created a tie which prevented O’Connor’s strict view from being precedent.
 Precedent can be overturned.
 What are the socio/political/economic factors that will carry a rule to
be applied? Ask yourself this.
 Part IIB: CONVENIENCE
o Court in agreement in this analysis.
o Power is satisfied (some dissent), BUT convenience factors divest the court of its
personal jurisdiction.
o Burden too huge on D: Japanese corporation; American legal system; logistics of sending
their people here to U.S.
o Forum State Interest –
 protecting citizens, but not in the lawsuit with Asahi (lawsuit is between two
corporations; not involving injured P)
 protecting/enforcing safety laws – indemnity claim doesn’t involve CA state
safety laws for highways.
o Interstate Interest – implicates foreign commerce
 No personal jurisdiction because
o A – minimum contacts / POWER (O’Connor – satisfied/Brennan – not satisfied)
o B – convenience (not satisfied)
o Overcomes minimum contacts
 Shaw v. North American Title Corp. (1994)
Hawaii Supreme Court
Note: Court erred in not addressing convenience part of analysis.
OVERVIEW OF CASE:
 Shaw (plaintiff) sues NATCO (defendant), a CA corporation.
 NATCO responds to the complaint with a motion to dismiss for lack of personal jurisdiction.
ANALYSIS:
 According to Kailieha: “where personal jurisdiction is at issue, we look to the allegations of the
complaint to determine jurisdiction.”
 The court looked to federal sources for guidance in how to view and weigh the allegations.
 HRCP Rule 12(b)(2) is identical to FRCP Rule 12(b)(2) so “the interpretation of this rule by federal
courts is highly persuasive.”
 Court quotes Moore: “If the district court chooses not to conduct a full blown evidentiary hearing on
a pretrial motion to dismiss for lack of personal jurisdiction, plaintiff need only make a prima facie
showing of jurisdiction through its own affidavits and supporting materials, even though plaintiff
eventually must establish jurisdiction by a preponderance of the evidence either at a pretrial
evidentiary hearing or at trial and, before the hearing is held, a prima facie showing suffices
notwithstanding any controverting presentation by the moving party to defeat the motion.
 Because the circuit court proceeded to review the motion to dismiss upon written submissions
instead of having an evidentiary hearing, all of Shaw’s allegations are presumed true and all factual
disputes are decided in his favor.
 In order to defeat NATCO’s motion to dismiss for lack of personal jurisdiction, Shaw need only make a
prima facie showing that:
o HI’s long arm statute covers NATCO’s activities.
o The application of the HI Long Arm Statute comports with Due Process.
o Cowan case
 (1) Was NATCO “transacting business” in Hawaii pursuant to HI long arm statute?
o Court quotes Cowan: “Whether a nonresident transacted business demands an examination
of all the defendant’s activities within the forum related to the present cause of action.”
o In Cowan: the court recognized that physical presence in the forum state is not necessary
for a finding of transacting business.
o In Cowan case: Defendant transacted business in the state because:
 (1) he entered into two listing contracts with HI residents involving a sailboat
located in HI;
 (2) he mailed documents to HI; signed by plaintiff in HI;
 (3) he solicited customers in HI by regular advertising in a national magazine.
o In Cowan, the court found that: “Where one alleges jurisdiction over a nonresident
defendant pursuant to HI’s long arm statute, HRS § 634-35(c) requires that the cause of
action relate to the defendant’s contacts in HI.”
o In instant case, plaintiff’s facsimilies and telephone calls as well as signing and receiving
checks in Hawaii, signing escrow documents in HI  were merely incidental to the escrow
transaction conducted in CA.
o No prima facie showing of transaction of business in HI also because the subject property
was in CA and the escrow contract was between CA residents.
o No contract, no solicitation, the business contacts were nominal and incidental to another
contract to which the plaintiff was not a party to.
o CONTEXT: If Court took a broad interpretation of this part, it may discourage other business
from wanting to do business in HI (anti-business, too many burdens on business)
 (2) Did NATCO commit a “tortious act” in Hawaii pursuant to HRS § 634-35(a)(2)?
o According to Kailieha case: “a tort is committed where the injury occurs, and the phrase
‘tortious act’ encompasses the injurious consequences of an act.”
  In this case, the court ruled that because the injury resulted in HI, the “tortious act”
element of HI’s long arm statute was satisfied.”
o Yes, NATCO did commit a tortious act in HI.

Mullane v. Central Hanover Bank (1950)

Notice and Service of Process
CONTEXT:
 Shortly after the Nurembourg trials in 1950.
 Justice Jackson was a huge figure in constitutional law.
o Prosecutor in the Nurembourg trials.
o Through his prosecutions, he set the tone for international human rights.
 Common trust fund case
o Wall Street for the middle class
 Judicial settlement of accounts
o Put the trustee (manager of the funds: investments and income) on the “public block”
and ask: did the trustee mismanage these accounts?
 If trustee did – fix needed
 If trustee didn’t – then beneficiaries cannot file a lawsuit against the trustee
(the trustee is free and clear of any malpractice suits up to that point)
 State’s interest – encourages trustees to undertake representations of these
collective trusts
 Individual’s interest – making sure trustee is doing the job right.
 When trust was made initially  notification by mail was required by law so all beneficiaries
received notice (received a copy of laws about judicial accounting).
 Statements and disbursements were also being sent by the trustee by ordinary mail to
beneficiaries.
 Form of notice given in the lawsuit – an ad placed in a local newspaper that was allowed under
minimum standards of the NY Banking law.
 Was this state law sufficient notice under the Due Process clause?
o Chances are low that all beneficiaries got notice from the newspaper.
RULE:
 What does due process require?
 Procedural Realism: The court doesn’t want to impose a due process requirement that will
impose an impractical or impossible burden.
 This case has imposed a “cost-benefit analysis” not a hard-fast rule.
 (p.144) “An elementary and fundamental requirement of due process in any proceeding which is
to be accorded finality 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. The notice must be of such nature as to reasonably convey the required information,
and it must afford a reasonable time for those interested to make their appearance. But with
due regard for the practicalities and peculiarities of the case these conditions are reasonably
met, the constitutional requirements are satisfied…”
 “The reasonableness and hence the constitutional validity of any chosen method may be
defended on the ground that it is in itself reasonably certain to inform those affected, or, where
conditions do not reasonably permit such notice, that the form chosen is not substantially less
likely to bring home notice than other of the feasible and customary substitutes.
 Overarching concept  REASONABLE for the circumstances.
o Broad test that requires us to look at the particulars to give the test meaning.
 What are the appropriate means?
 o The court says that publication is a fiction and there is NO NOTICE  procedural
realism.
o Even if it is a feint, sometimes it is okay.
o Must justify why there are some situations where this fiction is necessary.
 Circumstances when publication is reasonable: (p.145) When it is not reasonably possible or
practicable to give more adequate warning.
o If the beneficiaries are unknown. Bank has no way of reaching the beneficiaries within
the grounds of reasonableness. The bank only has to undertake a reasonable search to
find out their addresses.
o If the beneficiaries interests are either conjectural or future (child, or someone named
in a will).
 Publication stands on a different footing when there are also known present (as opposed to
future) beneficiaries of known place of residence.
o The bank has their names, addresses, and know that they are current beneficiaries.
o Publication does not satisfy DP.
o The court tests the reasonableness of publication in these circumstances (when the
bank already has addresses, etc.)  the NOTICE IS NOT REASONABLY CALCULATED TO
CONVEY THE REQUIRED INFORMATION UNDER THE CIRCUMSTANCES.
o Easy alternative – ordinary mail (the bank does it regularly and did it in the past)
 Not every beneficiary will get notice  it’s okay because the interests are all the same in rooting
out any malpractice in the trust’s management.
 Therefore, the NY banking laws VIOLATE DUE PROCESS NOTICE because the form of notice was
not reasonably calculated under the circumstances to reach one category of the beneficiaries.
 The NY Banking Law should have said:
o Known beneficiaries – notice through mail
o Unknown beneficiaries – serve by publication
 COURT’S POWER TO DECIDE – SUBJECT MATTER JURISDICTION

SUBJECT MATTER JURISDICTION

DIVERSITY OF CITIZENSHIP FEDERAL QUESTION

28 U.S.C. § 1332 28 U.S.C. § 1331
Constitution Art. III, § 2

 SMJ goes to the fundamental question of the court’s power to adjudicate.

o Mention of SMJ can make a judge stop and listen to your argument.
 If the court makes a mistake with this issue, the judge could be subject to a writ of mandamus.

FEDERAL QUESTION
Relevant Sources:
 28 U.S.C. § 1331
 Constitution Art. III, § 2
 Louisville & Nashville Railroad v. Mottley (1908)
 Buffalo Creek Disaster

Interpretations of “Arising Under”:

28 U.S.C. § 1331: (NARROW for Federal District Courts)

The Federal District Court shall have original jurisdiction of all civil actions arising under
the… laws… of the United States.
Purpose: to indicate that federal district courts can hear civil actions when the action arises under the
laws of the US; only applies to federal district courts.

Constitution Art. III, § 2: (BROAD for U.S. Supreme Court – has power to choose cases)
The judicial power of Federal Courts shall extend to all cases… arising under the laws of
the United States.
 Section I:
o The Constitution creates only one court  US Supreme Court
o Congress creates all the other lower courts
  Section 2:
o Purpose: to define what kinds of issues will/when the court has subject matter
jurisdiction.
Louisville & Nashville Railroad v. Mottley (1908)
Federal law must create the claim for SMJ in federal district courts
CONTEXT:
 Tremendous industrialization
 Huge powerful corporations had emerged
 Railroads
 A lot of concern about industrialization creating too much concentrated power in these
industries – industries influencing public officials and policies  great public outcry
 Too much concentrated industrial commercial power.
RULE:
 If plaintiff’s claim is based on federal law (the federal law CREATES the claim), then the statute
authorizes subject matter jurisdiction in federal district courts.
o Ex: Federal civil rights law says that plaintiff can sue for certain circumstances. If there is
a violation of these terms, then the federal law creates the claim and plaintiff can sue.
 In the instant case, the body of law creating plaintiff’s claim was state contract law, not federal
law. Federal law came in only as a defense.
o “It is not enough that the plaintiff alleges some anticipated defense to his cause of
action and asserts that the defense is invalidated by some provision of the Constitution
of the United States.”
 The focus is on plaintiff’s claim
 Court will not look beyond plaintiff’s claim to an anticipated defense based on
federal law to find subject matter jurisdiction.
 Supreme Court finds that the Circuit Court was without jurisdiction and by its own motion was
able to dismiss the case on lack of subject matter jurisdiction. The fact that neither party brought
this up doesn’t matter, the court can dismiss on lack of subject matter jurisdiction at any time,
even on appeal. (See FRCP Rule 12(h)(3))


REASONING:
 Why did the court create an arbitrary and narrow rule?
o The Supreme Court was concerned that a broad test like the federal ingredient test in
the Constitution would open the flood gates to cases that the federal courts don’t really
need to address.
 Why doesn’t the Supreme Court adopt the same narrow rule and instead follow the broad
federal ingredient test under the Constitution?
o The Supreme Court is not concerned about opening their own floodgates because it
chooses its cases through WRIT OF CERTIORARI and can choose from a broader array of
federal ingredients.

Buffalo Creek Disaster refresher

 Strategic fight in Buffalo Creek disaster concerning subject matter jurisdiction:
o Plaintiffs wanted to be in federal court to get an empathetic judge who wasn’t
pressured by the coal companies.
 Federal judges are appointed for life; less subject to the political pressures of
the time.
o Strategy of plaintiffs to stay in federal court  Sue NY defendant (Pittston) to create
diversity of citizenship.
  In order to get diversity of citizenship, plaintiffs had to pierce the corporate veil
and prove Pittston was connected to Buffalo Mining Company and not an
independent entity.
 Plaintiffs had to show that the facts allowed piercing of the corporate veil.
o The entire plaintiff strategy depended on this.
o If the judge didn’t allow piercing of the corporate veil  no subject matter jurisdiction
 Court had to dismiss under FRCP Rule 12(h)(3).

DIVERSITY OF CITIZENSHIP
Relevant Sources
 28 U.S.C. § 1332 – Diversity of Citizenship; Amount in Controversy; Costs
 28 U.S.C. § 1441(a) – Actions Removable Generally
 FRCP Rule 8(a)(1) – Claim for Relief

Citizenship of Partnerships:
 For diversity purposes, partnerships are not considered as entities but as collections of
individuals; thus the citizenship of each of the members of a partnership must be considered.

Citizenship of Corporations:
 The corporation is a citizen of any state where it is incorporated AND where its principal place of
business is.
o Makes it more likely that complete diversity of citizenship is destroyed.
 Corporation’s Principal Place of Business:
o A corporation has only ONE principal place of business (said to be a question of fact –
according to textbook p. 234)
o Various Tests:
 “Nerve center” test – look to where the executive and administrative functions
are controlled.
 “Muscle” test – look to where the everyday business activities of the company
are concentrated.
o Courts tend to apply either/or test.
 Textbook p. 195: “The purpose of the dual citizenship is to prevent what Congress thought was
essentially local state claims between a citizen and a local corporation, incorporated elsewhere
for convenience, from burdening federal courts. Many corporations incorporate under the law
of a state deemed to have more permissive corporation laws than those of the state of their chief
place of business. Delaware, for example, is more often the legal “home” of corporations than it
is their chief place of business.”

Lawyering Strategy:
 You need to be sure to know as a lawyer what the tendency is in the court of your jurisdiction is
relating to the test used.
 The test used can affect whether subject matter jurisdiction exists.

Mas v. Perry
Diversity of Citizenship and Domicile
RULE:
 Citizenship is determined at the time the complaint is filed. Jurisdiction is unaffected by
subsequent changes in the citizenship of the parties.
 Citizenship is determined by domicile. “A person’s domicile is the place of his true, fixed, and
permanent home and principal establishment, and to which he has the intention of returning
whenever he is absent therfrom…”
 DOMICILE = residence (where the party resides) + intent to remain/return

 In order to change domicile:

NEW DOMICILE = different residence + intent to remain there

 The original domicile remains for citizenship purposes until citizenship is changed.
 The party invoking diversity of citizenship has the burden of pleading and showing citizenship.
(FRCP Rule 8(a)(1))

OTHER NOTES:
 COMPLETE DIVERSITY OF CITIZENSHIP:
o “… the general rule that complete diversity of parties is required in order that diversity
jurisdiction obtain; that is, no party on one side may be a citizen of the same State as
any party on the other side.”
o Although 28 USC § 1332 does not by its terms require that each plaintiff be diverse from
each defendant, that interpretation was attached to the predecessor statute by Chief
Justice Marshall in Strawbridge v. Curtiss, 7 U.S. 267 (1806).

Macheras v. Center Art Galleries Hawaii

Corporate Citizenship and Doe Defendants
 Plaintiff filed against defendant in federal court on the basis of diversity jurisdiction.
 Defendants filed a motion to dismiss for lack of SMJ (Rule 12(h)(3)) on three grounds:
o (1) Plaintiff failed to allege the amount in controversy.
o (2) Plaintiff failed to allege the principal place of business of corporate defendant Center
Art Galleries Hawaii.
o (3) Plaintiff impermissibly pleaded for recovery against doe defendants.
 Plaintiff amended amount in controversy.
 Defendants charge that the complaint is still defective because it fails to allege the principal place
of business and for naming Doe defendants.
 Court holds that “the presence of fictitious defendants neither creates a presumption that
diversity is destroyed, nor requires Doe defendants to be named, abandoned, or dismissed, in
order for a diversity-based claim to be brought in federal court under § 1332.”
 But Court warns of risk of plaintiffs: “If a key party turns out to be nondiverse, the action will be
dismissed for lack of jurisdiction. If the statute of limitations has expired at this point, plaintiff
may not be able to refile the case in state court. Plaintiff therefore bears the risk of making a
mistake about the citizenship of a Doe party.”  If the Doe defendant turns out to be
nondiverse, the suit will be dismissed for lack of SMJ. It is too bad if the statute of limitations has
passed.
 PROVISIONAL REMEDIES

Injunctions and Temporary Restraining Orders

 Provisional remedies – relief pending final adjudication of the dispute – are the legal system’s
response to the need in certain circumstances for speed in the legal system.
 Problem presented in provisional remedies:
o They must be granted or denied before the case has been heard on the merits.
o The judge (all such cases will be decided by judges, not juries) must base her decision on
incomplete information and act without the full adversarial exchange that would
accompany a trial.
 The standard for granting a TRO and a preliminary injunction is the same.
 2 types of provisional remedies: Preserving status quo until final decision
o TRO
 DV settings; immediate relief even before giving notice to defendant because
irreparable harm is imminent.
 Other settings too.
o Preliminary Injunction
 Preliminary injunctions are preliminary – separate from underlying substantive claims.
o Court will hear some evidence from both sides to determine whether to hold the status
quo (prevent continuing behavior or not.
o A preliminary injunction is where the action is.
o Almost always where the courts rule here determines the outcome of the case.
o Initial energy and publicity focused at the preliminary injunction stage.
o A preliminary injunction stops the ball game.
 Permanent Remedy – Permanent Injunction (Buffalo Creek)
o Rare
o Behavioral – tell the defendant to stop doing something they are doing
o Can only come into play when there are no adequate other remedies such as money and
damage cannot be repaired with the payment of money  irreparable harm
o Equitable remedy

RELATED RULES:
 FRCP Rule 65(a) and 65(b)

William Inglis & Sons Baking Co. v. ITT Continental Baking Co. (1976)
FACTS:
 Substantive Law Claim: violation of federal anti-trust law; conspiracy to undercut costs among
the competitors; monopolizing
 Substantive Law Response: competition in good faith.
 District court denied plaintiff’s motion for a preliminary injunction. Plaintiffs appealed to the 9 th
Circuit.
 o ANALYSIS by DISTRICT COURT FOR PRELIMINARY INJUNCTION:

P is entitled to a preliminary injunction only if the court finds that:

(1) P will suffer irreparable injury if injunctive relief is not granted (still
good law)
(2) P will probably prevail on the merits
a. More than 50% chance of winning.
b. District court found that p would probably not win on the
merits.
(3) In balancing the equities, D’s will not be harmed more than P is helped
by the injunction.
a. Tends to be the least important of the four prongs.
(4) AND, granting the injunction is in the public interest.

RULE:
 9th Circuit said that the district court improperly applied the test.
 9th Circuit advocated an alternative test to the one that was articulated by the District Court.
 Case was remanded back down to determine if preliminary injunction should be granted under
the sliding scale analysis.
 Court found that components should be interrelated.
o P doesn’t have to show 50% or more chance of winning on the merits.
o P can still get a preliminary injunction showing less than 50% chance of winning, if the
harm that may occur to P is sufficiently serious, it is only necessary that there be a fair
chance of success on the merits.
o You can slide down to a “fair chance of success” on the merits if the degree of
irreparable harm is high.

SLIDING SCALE ANALYSIS

(1) Likelihood of (2) Severity of

Success on the irreparable harm
Merits to plaintiff

3) Balance of Hardships (least important) (P and D)

4) Public Interest

Procedural Due Process

Right to a Prior Hearing
 Fuentes v. Shevin (1972)

Modern Pleading

FRCP Rule 8(a) Claim for Relief