Civil Procedure Outline Fall 2009 Key: Good law; Historical Background Cases

Rule 3: “a civil action is commenced by filing a complaint with the court” (must file suit within the statute of limitations)
Rule 8(a): pleading that sates claim for relief must include 3 things. 1-3; 8(a)(2) Twombley now requires more than a short and
plain statement and requires that “P must allege facts supporting a plausible claim” not just possible (like Rule 9(b) for fraud).
Rule 12 Motions:
 D must respond to the Plaintiffs summons and complaint within 20 days after it was served.
 Can respond by motion or an answer. (answer is response to complaint, motion is request for a court order)
 Rule 12(b) gives 7 reasons a defendant can bring for a motion to dismiss. (can be brought in a motion or answer)
 Rules 12(g) and (h) place limits on the 7 motions in 12 (b). 3 rules to follow
o 1: (b) 2-5: must be put in the first Rule 12 response (either motion or answer) Or they are forever WAIVED!
o 2: (b) 6-7 can be raised anytime through trial (so just not on appeal)
o 3: (b) 1 may be raised at any time and cannot be waived
I. Personal Jurisdiction
a. The Pennoyer Framework: Territoriality/
i. Pennoyer v. Neff (1877)
1. Background: Mitchell v. Neff; Mitchell sued Neff (a California Resident) for attorneys fees in Oregon State Court; no
personal service, instead served through publication in local newspaper; Neff did not appear in suit and Mitchell
attached Neff’s Oregon property to execute default judgment; Neff’s property sold at Sherriff’s sale to Mitchell and
later to Pennoyer
2. Facts: Neff returned to Oregon and brought suit in federal court to eject Pennoyer from land claiming that Mitchell’s
original judgment was invalid because the court lacked jurisdiction over Neff (collateral suit)
3. Rules:
a. Power-Based Theory of jurisdiction: State has full jurisdiction over entities (people or property) within state
borders and No jurisdiction over entities outside state borders. No state can exercise authority over any
person, thing, or court outside of their territory
b. Full Faith and Credit Clause: compels the enforcement of one state’s judicial proceedings in every other state
(need a judgment to enforce). Qualifications emerge: need to have jurisdiction or else judgment is invalid.
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c. Due Process Clause of 14 Amendment: no state can deprive a person of life, liberty, or property without due
process of law. Questions of scope of each state’s authority. Is the assertion of jurisdiction over this person
fair?
4. Reasoning: “if without personal service, judgments in personam, obtained ex parte against nonresidents and absent
parties, upon mere publication of process, which, in the great majority of cases, would never be seen by the parties
interested, could be upheld and enforced, they would be the constant instruments of fraud and oppression.”
a. i.e. it would constitute fraud and oppression to obtain jurisdiction over nonresidents and absent parties solely
through notice by publication since the publication likely will never reach the parties it is meant to inform.
5. Holding: Judgment void, no personal jurisdiction over nonresidents out of state, improper service by publication to
people who likely won’t be notified, and improper attachment of land (must attach property for judgment
compensation at outset of the suit.)
ii. In personam: suits against persons (unlimited liability for people)
iii. In rem: suits against property (only recover to the value of the property)
iv. Quasi in rem: property within a state is used as a vehicle to reach the defendant in order to adjudicate personal rights
that might or might not be related to the property (differs from in rem because property is only important for remedy)
v. Hess v. Pawloski (1927)
1. Consent and Implied Consent
a. Voluntary Appearance (submit to jurisdiction)
b. Choice of forum clause in contracts and commercial transactions
c. Consent theory quickly became fictitious
 2. Facts: P (resident of PA) driving on MA highway, struck D, no personal service and no property attached, service
made in compliance with MA statute where the registrar acts as an in-state agent and you can be served through the
mail (legal fiction that as you enter MA you assign the MA registrar as your agent in the state)
3. Implied Consent: When non-citizen used state highway, they impliedly consent to service
4. Reasoning: MA can exclude out of state residents so use of highway by nonresidents is equivalent to the
appointment of the registrar as agent on whom process may be served (implied consent solves problem of the out-
of-state tortfeasor)
b. The International Shoe Framework: Minimum Contacts Standard (individual liberties theory)
i. No longer need implied consent, new regime lets us look at the nature of the activities
ii. International Shoe Co. v. Washington (1945)
1. Facts: Shoe controlled 11-13 salesmen in Washington; paid by commission based on their sales confined to the state;
occasionally rented buildings and had some permanent show rooms; Washington filed suit to recover unpaid
unemployment compensation funds
2. Minimum Contacts (Threshold Standard) *Later narrowed: Purposeful Availment (or effects test)
a. assumption of jurisdiction over any actor that bears a reasonable and substantial connection to the forum
community: i.e. entity that chooses to do business in a state is liable for those activities in the state
b. Rationale: enjoys benefits such as the protection of the laws of that state so obligation is created (precursor to
purposeful availment)
3. And Reasonableness Test (does not offend “traditional notions of fair play and substantial justice”)
4. For in personam, if D isn’t present in the territory: of the forum, D must have certain minimum contacts with it such
that as the maintenance of the suit does not offend “traditional notions of fair play and substantial justice”
5. Holding: Int’l Shoe Co has minimum contacts in the state since they had employees there.
c. Specific Jurisdiction (claims that relate to specific party activities in the forum) (less contacts necessary to establish
jurisdiction because claim stems from contacts with forum)
1. McGee v. International Life Insurance Co. (1957) (Ex. Contract)
a. Facts: CA resident bought life insurance policy from Empire Mutual in CA, D later assumed Empire’s insurance
obligations, CA resident accepted new terms and continued payments to D who cashed them, on death P tried
to collect, D refused, P filed in CA court, D alleged CA courts had no personal jurisdiction over the company
based in Texas
b. Reasoning:
i. Purposeful Availment: Corporations have jurisdiction if they solicit/purposefully avail themselves in
another state for business.
ii. Contract continually renewed (bills were delivered, premiums were mailed, checks were cashed and a
resident was insured). Based on contract with substantial connection with state- delivered in California,
premiums paid from there and insured was a resident of the state when he died.
iii. due process met when the suit is based on a contract which had substantial connection with that state,
by a company that purposefully availed itself for business in that state.
c. App/Holding: Life insurance co purposefully sold insurance in CA, and received steady payments from CA, so
person may sue based on issues that arise out the that contract.
d. Inconvenience ≠ denial of due process (No contention that D did not have adequate notice of the suit or
sufficient time to prepare its defenses and appear)
2. Gray v. American Radiator
a. Facts: Titan Co. negligently constructed a safety valve; Titan Co. sells valves to American Radiator outside
Illinois. Water heater exploded
b. Rule: Minimum Contacts for can include indirect relationships such as a supplier to a manufacturer that
ultimately sells in a state that the supplier has no direct contact with
c. “If a corporation elects to sell its products for the ultimate use in another state, it is not unjust to hold them
answerable for any damage caused by defects in those products”
i. Restricted substantially by later stream of commerce cases
d. App/Holding: although no contacts in state, knew that product could end up in the state, so liable for injury
3. Hanson v. Denkla (requirement of a purposeful act)
 rd
a. Facts: PA residents set up a trust in Delaware, 2 sisters do not like 3 sister executor of trust, moved to
Florida, filed suit in Florida court
b. Rule: D must purposefully avail himself of the privilege of conducting some activity in the state, thereby
invoking the benefits and protections of state law
c. A third parties unilateral activity (such as moving to another state after the fact) isn’t sufficient to establish
jurisdiction.
d. Holding: No purposeful availment, only passively sending money to the state. Florida Courts could not
constitutionally exercise jurisdiction over a Delaware trustee that had no other contacts with forum
(additionally, no state interest)
ii. Long-Arm Statutes (extent of personal jurisdiction)
1. Basic Long-Arm (to the extent permissible under the constitution)(limits of due process)
a. Texas (read as going to the limits of Due Process even though not stated
b. Cal (authorizes jurisdiction to the limits of state and federal constitution)
2. Not all long-arms extend to the limits of Due Process (NY)
3. Q: Did the Defendant commit acts that bring her within the forum state’s long are statute?
4. Federal Long Arm Provisions
a. FRCP 4(k)(1) use the state long arm for the state where the federal district court resides
iii. Stream of Commerce (if suing about a tort look to stream of commerce cases)
1. International Shoe
a. Minimum Contacts and Reasonableness (see above)
2. World Wide Volkswagen Corp v. Woodson (1980)
a. Facts: Family buys car in NY, drive from NY to AZ. Thru OK, another car hits their car causing fire which burned
wife and kids. Family sues in OK where tort occurred. Ds (retailer and wholesale distributor) Only contact w/
OK is that they sold a car in NY to NY residents became involved in an accident there
b. Rules:
i. Narrows Minimum Contacts to Purposeful Availment (foreseeability is irrelevant)
1. Must look at quality of contacts
2. D, WWV, did not purposefully avail themselves of the forum, the unilateral actions of the
consumer brought the product to OK
3. Due Process Clause does allow a state to make binding a judgment in personam against an
individual or corporate defendant with which the state has no substantial contacts or ties
ii. Reasonableness/ Fair Play and Substantial Justice Factors
1. Burden on D
2. P’s right to convenient and effective relief
3. State’s Interest
4. Judicial System Efficiency
5. Social Policy
c. App/Holding: No jurisdiction over Ds because P’s unilateral act brought car to jurisdiction and D has no
contact in forum state.
3. Asahi Metal Industry Co. v. Superior Court of California (1987)
a. Facts: Motorcycle crash in CA, man sues part company which files cross complaint on part manufacturer. US
resident settles, two foreign companies claim remains.
b. Rules:
i. Both Reasonableness and Minimum contacts Necessary
ii. Chain of distribution vs. unilateral act of consumer vs. purposeful availment
iii. Stream of Commerce PLUS
1. Merely placing something in the commerce stream without more is insufficient
2. Additional conduct may be necessary to prove intent or purpose to serve that state
3. Issue b/c no purposeful availment at all
 c.App/Holding: Case fails reasonableness test. (1) Forcing Asahi to litigate in foreign country, (2) Minimal state
interests (indemnification suit between two foreign companies), (3) Reasonableness must be carefully
assessed when long-arms reach over national borders
d. Asahi Dissent (Brennan and Stevens)
i. Brennan: Awareness products will enter the jur. through stream of commerce satisfies minimum
contacts Directed towards national market enough
ii. Stevens: substantial volume and value of products in the state is sufficient
iv. Defamation and Targeted Wrongdoing
1. Calder v. Jones (1984)
a. Facts: Allegedly libelous article in the Enquirer (based out of FL), P lives in CA and the magazine circulates
there, Florida writer objected to personal jurisdiction (the Enquirer did not
b. Calder Effects Test: has Jurisdiction if 1) Intentionally 2) aim harm 3) at state and 4)effects cause harm in state
c. App/Holding: Intentional and allegedly tortious were expressly aimed at CA
i. Where the harm would be felt (reputation, career, where P was)
ii. “An individual injured in CA need not go to FL to seek redress from person who, though remaining in FL,
knowingly cause the injury in CA”
2. Keeton v. Hustler
a. Facts: P, NY resident, brought suit in NH district court because NH has an unusually long statute of limitations
and the suit was time-barred in other states
b. Rule: Statute of limitations should not “complicate or distort the jurisdictional inquiry”
c. App/Holding: Reasonable for suit to be brought in NH, NH had an interest in redressing injury to reputation
that occurs within its borders
3. New York’s Libel Tourism Act
a. Libel terrorism protection act
i. Ehrenfeld v. Mahfouz
1. Book written and published in NY, P went to England where 23 copies were sold to sue, won
declaratory judgment
2. Writer brought suit in federal court, dismissed for lack of personal jurisdiction
4. Indianapolis Colts v. Metropolitan Baltimore Football Club (1994)
a. Facts: CFL team attempted to use the name Baltimore Colts and then Baltimore CFL Colts
b. Rules: Calder Effects Test “Plus” something extra to enter the forum (digital, newspaper)
c. App/Holding: If trademark was impaired, harm would be felt in Indiana. Their action of using the previous
name and advertising and broadcasting in the same sport constitutes conduct of intentionally aiming harm at
the state and the effects causing harm in the state of Indiana and Maryland. Therefore, there is jurisdiction in
IN. State in which tort occurs, D will probably be amenable to suit there
i. Additional contact found in broadcast deals
v. Commercial Contracts (dispute arising out of contract look to Burger King v. Rudzewics and McGee v. International Life)
1. Burger King Corp v. Rudzewicz (1985)
a. Facts: Rudzewicz and MacShara jointly applied for a BK franchise; contracts governing the franchise
relationship established in Miami HQ and governed by FL law; disagreements over site development fees,
building design, rent, etc; D fell behind on payments; negotiations failed; D’s BK franchise terminated but
refused to vacate; BK filed in FL courts; D contended lack of personal jurisdiction
b. Rules:
i. When a person seeks out a contract in another state and creates long-term ties over significant amounts
of money, they have purposefully availed themselves to that state and may be sued there.
ii. Choice of law provision in franchise agreement must also be given weight
c. App: No stream of commerce, burgers sold in MI
d. Franchise dispute grew directly out of a contract which had a substantial connection to the state (McGee)
e. Holding: Under personal jurisdiction of FL courts: D reached beyond MI and negotiated in FL repeatedly by
accepting long-term dealings with Miami HQ, therefore the quality and nature of relationship to the company
in Florida cannot be viewed as “random,” “fortuitous” or “attenuated” (Hansen v. Denkla)
 f. Reasonableness factors satisfied: Harm occurred in FL, no economic duress imposed by BK, inconvenient but
not unconstitutional for D to appear in FL
d. General Jurisdiction (State asserts jurisdiction over a D on all claims against the D)
i. Systematic and Continuous Contacts
1. Corporations are always subject to the jurisdiction of the courts under whose laws it was incorporated
ii. Helicopteros Nacionales de Columbia S.A. v. Hall (1984)
1. Facts: Crash in Peru, 4 US citizens killed, Helicol is a Columbian Company, contract in Texas, Buy helos from US, pilots
trained in US, contract had choice of forum clause (Peru), payments to US account
2. General Jurisdiction Rule: contacts must be systematic and continuous
3. App/Holding: Helicos contacts with Texas insufficient, one trip, buying package of goods from Bell is too casual and
temporary Claims not related to contacts (no specific jurisdiction)
iii. Look at quality and totality of contacts
e. Jurisdiction over property (if suing over property look at Shaffer v. Heitner and Pennoyer v. Neff)
i. Forms of property (insurance policies, debt, bank accounts, stock, real property)
1. In Rem
a. Mitchell v. Neff
i. Can render judgment only to the value of the in-state property
ii. Must be attached at the outset
1. Notice function (most people will realize when their property is seized)
ii. Harris v. Balk (1905) (quasi in rem and intangible property/contingent obligations)
1. Facts: Harris owed Balk money, Balk indebted to Epstein on an unrelated matter, Epstein served Balk when on
business attaching the debt due Balk from Harris thus acquiring quasi in rem jurisdiction, Harris allowed judgment
and paid, Harris was sued by Balk in a different state for the debt
2. “The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes”
a. Legal fiction that is stretched because debt is usually considered the property of creditor
b. Subject to attachment wherever peripatetic debtor might wander
3. Holding: Intangible obligations travel with the obligor, can be attached by personal service of the obligor wherever
found, and such attachment provided a basis for quasi in rem II jurisdiction
iii. Sneider v. Roth
1. Obtained jurisdiction by attaching the contractual obligation of an insurance company to defend and indemnify the
out-of-state defendant for potential liability arising out of an out-of-state accident
2. High water mark for quasi in rem (found unconstitutional later)
iv. Shaffer v. Heitner (1977) (extends Shoe doctrine to quasi in rem) (evolution from power to fairness)
1. Departure from fictitious quasi in rem attachment of intangible property
2. Facts: P filed a shareholder’s derivative suit against Greyhound Corp (incorporated in DE) and directors alleging
violations in activities leading up to ant-trust and criminal contempt actions that occurred in Oregon; sequestered
stock and options in DE (stop transferred), served in newspaper and entered special appearances
3. Rules:
a. *Presence of property within state boundaries is NOT sufficient to establish jurisdiction*
b. P1: Judicial Jurisdiction over a thing = jurisdiction over interests of persons over things
c. P2: min contacts standard used to determine exercise of jurisdiction over interests of persons
d. Con: Min Contacts standard applies to in rem and quasi in rem
4. App/Holding: Stocks are unrelated to the claim so only purpose of sequester is to force an appearance, (fiction that
attaching property is anything more than to get jurisdiction over the individual), must therefore apply minimum
contacts and reasonableness standard (International Shoe)
5. D had no DE contacts and had not availed themselves “it strains reason to suggest that anyone buying securities in a
corporation formed in Delaware ‘impliedly consents’ to subject himself to Delaware’s jurisdiction on any cause of
action” (location of stock insufficient) Can be changed by DE statute (minimal DE state interest)
f. Jurisdiction based on physical presence
i. Pennoyer v. Neff
1. Personal service within the territory of a state is the traditional baseline for personal jurisdiction
 a. Territorial limits of state jurisdiction
ii. Burnham v. Superior Court (1990)
1. Facts: After divorce, wife moves to CA, “desertion” instead of “irreconcilable differences” as grounds, visited kids
while on business trip, personally served summons and divorce petition while in CA
2. Issue: Does a court have personal jurisdiction over a nonresident who was personally served with process while
temporary in that state, in a suit unrelated to his activities in the state (YES)
3. Rule: Physical presence= general jurisdiction. In personam service in state is always effective in establishing general
jurisdiction (Tagging the D remains a legitimate constitutional means of obtaining jurisdiction over a nonresident D)
4. Reasoning: Physical presence is historical origin of personal jurisdiction in general and baseline, firmly established
that states have jurisdiction over nonresidents who are physically present in the state
a. Traditional notions of fair play and substantial justice. To hold otherwise would open the door to endless fact-
specific litigation (involving availment)
5. Holding: Since properly served to D in-state, state has general jurisdiction over D.
g. Jurisdictional Reach of Federal District Courts and Raising Jurisdictional Objections
i. FRCP 4: Service of Process; 4(a)(b): summons contents, 4 (e): serving someone, 4 (h): servicing corporations, 4(i): service
upon United States as a defendant, 4 (m): P must serve summons and complaint to D w/i 120 days of filing the complaint
4(d)(2)(5)
1. Immune from process if: *Participating in unrelated judicial proceedings, *Public officials in execution of their duty
*Foreign sovereigns or representatives, *Private persons on public business, *Enticed into state by fraud
2. Service of process and statutes of limitations: *Action commenced when complaint filed in court, *Act of filing must
occur before the limitations period expires, *Filing "tolls" the running of the statute of limitations, *Under state law,
state statute of limitations and state law on tolling applies
I. FRCP 12(b): presenting defenses (i.e. motion to dismiss) (g): must raise all objections in pleading otherwise precluded,
a. (h): may bring claims of “failure to state a claim upon which relief can be granted,” to join a required party, may be
brought at a couple times after pleadings. Lack of Subject matter jurisdiction may be brought at any time.
ii. Raising jurisdictional objections
1. Decline to appear in the action (very risky) (Pennoyer)
a. Default judgment will be entered
b. May bring collateral suit and try to recover
c. If the D loses the jurisdictional issue, the judgment is subject to enforcement
i. D never has the opportunity to contest the merits of the action
ii. Can only use collateral action if D completely stays out of the litigation
2. Raise a jurisdictional objection in a “special appearance”
3. In some jurisdictions the objection can go in the answer
4. If D is successful on the motion to dismiss for lack of jurisdiction, the case is dismissed
5. Almost all states allow the D to defend on the merits and preserve the right to appellate review of the jurisdictional
objection after the judgment
h. Notice and Service of Process
i. Mullane v. Central Hanover Bank & Trust Co. (1950)
1. Facts: Only notice given to beneficiaries of a trust was through the newspaper, none entered appearances, personal
service was available (trust had addresses for correspondence)
2. Rules:
a. Notice must be reasonably calculated: “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”
b. Distinction between in rem and in personam irrelevant on this issues
c. Process merely as a gesture is not Due Process
d. In personam service is not required if too cumbersome and costly.
3. App/Holding: substituted service in tiny letters in back of local newspaper is not “reasonably calculated” to inform
those affected. Trust must notify beneficiaries via ordinary mail to all who have address on record.
II. Forum non conveniens
a. Attempts to direct the litigation to a convenient, if not the most convenient forum
i. If motion is granted, action is dismissed and litigated somewhere else
 1. Dismissals can be conditioned
a. Statute of limitations considerations and jurisdiction waivers
ii. Gulf Oil Corp v. Gilbert (1947)
1. Facts: P Gilbert was a resident of VA and owned a warehouse there; warehouse destroyed by allegedly caused by
Gulf Oil’s careless handling of delivery gasoline; brought diversity action in NY to get better jury, Gulf similarly
susceptible to jurisdiction in VA, every person charged w/ negligent acts were in VA;
2. Rules: Federal Courts have the power to dismiss cases because of forum non conveniens
a. Criteria (expedience, fairness, and convenience)
i. Must be an alternative forum available (decision not made about differing substantive law just whether
claim can be heard in another forum)
ii. Private Interest Factors
1. Ease and Access to Proof
2. Availability of witnesses/ cost of bringing witnesses
3. Viewing premises
4. Other efficiency factors
iii. Public Factors
1. Burden on jury
2. Local interest in dispute
3. Local interest in trial
4. Avoiding jury confusion/complex choice of law
b. *Plaintiff may not, by choice of an inconvenient forum, vex, harass or oppress the defendant by inflicting upon
him expense or trouble not necessary to his own right to pursue remedy
c. *P choice of forum should rarely be disturbed unless very unbalanced factors
3. Holding: SCOTUS allowed forum non conveniens to litigate in VA after considering factors
iii. Choice of Law (determines what substantive law applies)
1. Most common are “place of the harm” and “locus of litigation”
iv. Piper Aircraft Co. v. Reyno (1981)
1. Facts: Airplane crash in Scotland, pilot and 5 passengers killed, plane manufactured in PA by Piper, other parts came
from US and UK, sue in US for more favorable tort law, motion to dismiss forum non conveniens
2. Rules:
a. Can change forum only if
i. (1) Heavy burden on defendant or the court
ii. (2) Plaintiff has a bad reason for forum
1. No reason
2. Reason is to harass defendant
3. Reason is to take advantage of foreseeable law
iii. (3) Remedy by alternative forum is inadequate and no remedy at all
b. Arguments with very little weight under Gilbert balancing Test
i. (A) Change in substantive law is less favorable for plaintiff
ii. (B) Economic viability of the claim is bad in another forum
3. Factors application
a. Private interest factors: Ease of access to proof; availability of compulsory process/cost; viewing premises;
other efficiency issues (risk of inconsistent verdicts in this case)
b. Public factors: Local interest in trial; burden on the jury; jury confusion (trial would be complex because
different bodies of law would apply to different claims)
4. Holding: more favorable law cannot be the sole reason for jurisdiction. FNC transfer to UK for litigation.
v. Wiwa v. Royal Dutch Petrol (2000)
1. Facts: Human rights crimes in Nigeria of which Shell allegedly played some part
2. Rules:
a. Deference to US resident plaintiff's choice of forum increases as plaintiff's ties to the forum are stronger (i.e.
US residents and citizens entitled to more deference than foreign plaintiffs)
 b. US residency is an important factor for maintaining P jur. choice
c. Exceptions to Gilbert rule/ good reasons to change forum
i. Defendants establish Gilbert factors tilt strongly in favor of trial in the foreign forum
ii. Defendant establishes such oppressiveness and vexation as to be out of all proportion to plaintiff's
convenience
d. Frummer Analysis/Doing business standard: if pass all=substantial physical corporate presence in the State:
company has… in state: 1) Office 2) Bank accounts or other property 3)Phone listing 4)Does public relations
work 5) Permanent employees to promote interests
e. Most important factor in determining jurisdiction= in-state presence of employees engaged in business
activity
3. App: Domestic P is given more deference on choice of forum than a foreign P (P that sues in home forum will
normally outweigh any inconvenience the D may show)
4. Holding: b/c Ps are US residents, they deserve strong deference. Not granting FNC. NY jur appropriate.
III. Transfer Within the Federal System
a. 28 USC §1404(a)
i. “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”
ii. Hoffman v. Blaski (1960)
1. Facts: Ps sue Ds in Northern District of Texas, where Ds reside and principally do business. Ds move to transfer to
Illinois, where no original jur over them
2. Rules:
a. 28 USC § 1404 means exactly what it says. Its unambiguous and direct: No transferring to any district where
plaintiff cannot originally sue
i. Doesn’t matter if D wants to go to state where no jur.
b. 1404(b)When all parties consent, can transfer suit to any district at current court’s discretion
c. “where it might have been brought” cannot be interpreted to mean “where it now may be brought with D’s
consent,” forum must have jurisdiction over both parties at the outset of the litigation (not the motion)
d. Cannot be waived by the D
e. Conduct of D after suit has been brought does not add to available forums
f. Transfer available wherever P has right at the outset to bring suit
3. App/Holding: P could not originally bring suit in IL so they have no jur over D and cannot transfer there
iii. Ferens v. John Deere Co. (1990)
1. Facts: Ferens lost right hand after getting it caught in his combine harvester. Files claim In Miss for favorable stat of
lims. Transfer to Penn b/c more convenient, but want to keep Miss laws and stat of lims
2. Rules:
a. Under 28 USC 1404(a): must apply the laws of the original state whether plaintiff or defendant transfers
action.
b. FNC v. Transfer: Under transfer, D can’t consent to forum b/c can only transfer to districts with original jur.
over D.
c. Law applicable to diversity case does not change upon transfer by D
d. Decision to transfer turns on considerations of convenience and the interest of justice rather than the possible
prejudice resulting from a change of law
e. No guarantee that court will grant transfer motion so P strategy very risky (Leaves option for D to object)
3. Holding: Ferens gets the cake and can eat it too. Can get favorable stat of lims and transfer to convenient forum and
keep the favorable law in convenient forum
iv. Dissent
1. Majority validates P’s capturing law and increases possibility of Erie encroachment
a. Assures P to file in most inconvenient forum with desirable substantial law possible to increase the likelihood
of a §1404(a) transfer
 2. Erie perspective of dissent (comprises Erie by allowing litigation in federal court solely because of diversity, getting
different result) (increases likelihood of getting outcome with different substantive state law applying in federal
court)
b. §1407 Transfer: Actions pending in different districts can be transferred to a single district for “coordinated or consolidated
pretrial purposes”
IV. Subject Matter Jurisdiction
a. U.S. Constitution, Article III, §2: “The judicial power shall extend to all Cases, in Law and Equity, arising under the
Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority,-- to…
Controversies…--between Citizens of different States” or the citizens of foreign states
b. Two Sets of Limits on Federal Courts (by Article III)
i. Limitation of federal judicial power to subject matter categories: 1. All cases arising under the constitution, + US law, 2.
Ambassadors, 3. Admiralty, 4. US as a party, 5.Between 2 states (+land grant) 6. State A v. Citizen of State B 7. between
citizens of different states 9. State a citizen v. foreign states and subjects
ii. Requirement of justiciable case: (2 purposes) 1. Judicial competence rationale 2. Separation of power rationale
1. Standing: right person to enforce right
2. Personal Stake in Controversy (direct injury by D’s conduct)
3. Redressability: injury likely redressed by favorable decision
4. Fed courts barred from issuing advisory opinion
5. Timing: cannot review moot cases (or unripe controversy)
iii. Subject matter jurisdiction is not waive-able (structural limitation on the power of the courts)
1. Court has a responsibility to address subject matter jurisdiction concerns sua sponte (on its own motion)
iv. States have plenary jurisdiction: Unless a state law limited the court’s jurisdiction to a particular subject matter or
particular federal claim committed to the exclusive jurisdiction of the federal courts, state court can resolve the dispute
v. Federal subject matter jurisdiction has two steps
1. Finding congressional authority for jurisdiction
2. Finding that such jurisdiction is within the Article III grant of judicial power
c. 28 U.S.C. § 1331
i. Federal Question: “The District courts shall have original jurisdiction of all civil actions arising under the Constitution,
laws, or treaties of the United States”
d. 28 U.S.C. § 1332
i. (a) Diversity: “The district courts shall have original jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of $75,000… and is between—“
1. Citizens of different states
2. Citizens of a state and citizens of a foreign state
3. Citizens of different states and in which citizens or subjects of a foreign state are additional parties
4. A foreign state… as P and citizens of a state or of different states
ii. An alien admitted to the United States for the permanent residence shall be deemed to be a citizen of the State in which
such alien is domiciled
iii. (c)(1): a corporation shall be deemed to be a citizen of any State by which is has been incorporated and of the State
where it has its principal place of business.
e. 28 U.S.C. § 1441(a)
i. Removal: “Any civil action brought in a State court of which the district courts of the US have original jurisdiction, may be
removed by the D… to the district court of the US… where the action is pending”
f. Determining citizenship: Citizenship determined at time of commencement of lawsuit (filing of the complaint)
i. Moving after cause of action but before filing: If move involves a bona fide change of domicile, the district court will
have jurisdiction
ii. Natural Individuals: citizenship= place of domicile: place of fixed or habitual residence and the place where if he is absent
he has the intention of returning
iii. Notes: 1) Person has only one domicile at a time but can have several residences 2) Acquisition of a new domicile
requires physical presence at the new location with an intention to remain there indefinitely 3) Legal representatives of
 the estate of a decedent, infant, or incompetent shall be deemed to be a citizen only of the same state as the person they
are representing
g. Diversity Jurisdiction
i. 28 U.S.C. § 1332
ii. Strawbridge v. Curtiss (1806)
1. Facts: All Ps from MA, all Ds from MA besides Curtiss who was from VT; attempt to sue in MA state ct.
2. Rule: Complete Diversity Required: (cannot have people with the same citizenship on both sides of the “v.”
a. No local bias against out of state Ds if the interests are joint
b. Diversity jurisdiction can stretch local bias rationale; MA suing VT in CA federal court, MA suing VT in VT
federal court
3. App/Holding: State court has no jurisdiction over Curtiss. Diversity jurisdiction exists, so must sue in fed ct.
iii. Mas v. Perry (1974)
1. Facts: MS wife, French husband working at LSU; D in Louisiana
2. Rules:
a. Citizenship at time suit was commenced
b. $ Amount claimed by the plaintiff in good faith used to determine Fed court eligibility for diversity jur.
c. Legal domicile matters for diversity jurisdiction (TA at LSU did not establish LA domicile)
d. Diversity jurisdiction can be used when
i. Alien against a State citizen
ii. Between citizens of different state
e. Citizen= US citizen +domicile of state (mere residence insufficient)
f. Domicile: true permanent home with intent to stay indefinitely
g. To change domicile: 1) reside in diff domicile 2) intend to stay there
h. Woman’s domicile, US and State citizenship don’t change after marrying alien
3. Holding: valid. Complete diversity exists. between Alien (husband) and Perry (LA citizen). Wife can join in suit since
same facts as husband as is (MS citizen)
iv. Amount in Controversy
1. Amount in controversy established by P in good faith at the outset must exceed $75,000 for federal diversity
jurisdiction
a. The actual award can be lower than $75,000
b. Examples
i. P has 2 claims for $70,000 and $6,000 (both claims are related)(YES)
ii. P has 2 unrelated claims that equal over $75,000 (YES)
iii. 2 P w/2 claims not joint and divisible, but could be related (NO)
iv. 2 P w/ 2 unrelated claims that equal over $75,000 (NO)
2. Calculation
a. Legal certainty test: sum claimed by the plaintiff controls if the claim is apparently made in good faith. To
justify dismissal, must have legal certainty that the claim is really for less than jur. amount.
b. If actual recovery is less: than the what was measured at the commencement of lawsuit, will not destroy
court's jurisdiction
3. Counterclaims: only consider the $ in the "complaint." No cross-complaints should be added into it.
4. Attorney's fees: attorney's fees may be included only where they are included in a contract or state statute.
5. Aggregation of claims
a. A single Plaintiff may aggregate claims against one single defendant to reach the jurisdictional amount. P
doesn't need to show any relationship between the claims
b. Claims of separate plaintiffs seeking similar but distinct relief cannot be aggregated.
c. Single plaintiff cannot usually aggregate claims against multiple defendants
h. Federal Question Jurisdiction/ Arising Under Jurisdiction
i. U.S. Constitution, Article III, §2
 1. “extend to all Cases, in Law and Equity, arising under the Constitution, the Laws of the United States, and Treaties
made, or which shall be made, under their Authority,-- to… Controversies…--between Citizens of different States” or
the citizens of foreign states
ii. 28 U.S.C. § 1331; Statutory Authorization for courts to exercise jurisdiction; “The district courts shall have original
jurisdiction of all civil action arising under the Constitution, laws, or treaties of the United States”
a. Statutory “arising under” interpreted much more narrowly than identical constitutional language
iii. Concurrent Jurisdiction of State Courts over issues of Fed Q.
1. States cannot close their doors to federal claims and often examine federal law
a. Relieves workload on federal courts
b. Local courts may be more convenient locus for litigants
iv. Louisville & Nashville R.R. v. Mottley (1908)
1. Facts: Mottleys injured on RR; part of settlement included a contract giving them free rides for life; 30 years later D
RR denied to renew pass alleging action based on act of Congress preventing free transportation; breach of contract
action w/ anticipated dispositive federal issue in defense
2. Rules:
a. A suit “arises under” only when P’s statement of his own cause of action is based upon laws or constitution
(no federal question out of anticipated defense)(only original action)
b. Well-pleaded complaint rule
i. A case “arises under” federal law only if it appears on the face of a “well-pleaded complaint” even if
federal law is likely to be determinative of the controversy (i.e. must appear in P’s cause of action)
ii. the plaintiff's statement of his own cause of action is based upon those laws or that Constitution
iii. Constitution must "form a necessary ingredient” of the original complaint
iv. Not sufficient that Fed law formed a background "ingredient" in a claim
v. Must inquire if claim could be stated without referring to federal law
3. App/ Holding: no jurisdiction b/c no diversity and no arising under jurisdiction, can resolve issue by other means
v. Smith v. Kansas City Title and Trust Co. (1920)
1. Facts: Shareholder Smith brought suit on alleged breach of fiduciary duty (state law claim) relating to unlawfully
issued government bonds under the Farm Loan Act; Smith argues D can’t buy government stock unless authorized by
law
2. Rules:
a. The right to relief as plead necessarily involves the federal law
i. claim arises under the constitution when the claim truly depends upon the construction of the
constitution or the law.
3. App/Holding: Does have a well pleaded complaint since the resolution can only be made upon the determination of
the construction of the law.
a. Cannot plead the fiduciary duty without resolving federal law issue
i. Breach of fiduciary duty by buying unconstitutional bonds by federal statute
ii. The resolution of federal law is essential to the claim/relief
b. “The objecting shareholder alleges that the securities were issued under an unconstitutional law therefore the
controversy concerns the constitutional validity of an act of Congress which is directly in question”
i. High federal interest
4. Holmes Dissenting (only look at private cause of action)(cannot “arise out of” anything that does not create the cause
of action)
vi. Merrell Dow Pharmaceuticals Inc. v. Thompson (1986)
1. Facts: Merrell manufactures drug that allegedly caused birth defects in children and was misbranded in violation of
the FDCA
2. Issue: Whether the incorporation of a federal standard in a state law private action, when Congress has intended
that there not be a federal private action for violations of that federal standard, makes the action one “arising under
the Constitution, laws, or treaties of the US” NO
3. Rule/App: Both the remedy and the standard must be grounded in federal law in order to satisfy “arising under”
(Grable tightens Merrill to not require a federal cause of action as implied here)
 a. Does P’s right to relief depend necessarily on a substantial question of federal law? NO
b. Federal law does not provide a remedy so federal question jurisdiction does not exist
c. No action in FDCA violation only evidence of negligence, no federal private remedy
4. Holding: Action does not arise under because the remedy doesn’t depend upon violation or statute (can sue under
different claims) and violation of FDCA not necessary or central to claim just evidence of unlawful behavior.
vii. Grable & Sons Metal Products v. Darue (2005)
1. Facts: IRS seize Grable property for delinquent fed taxes. IRS sends notice by certified mail rather than personal
service as required. Grable sues that auction of property illegal b/c incorrect service.
2. Rules:
a. Federal cause of action is not dispositive (puts to rest Merrill and Holmes concept)
b. Grable test: “does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial
[proxy for is there a federal interest], which a federal forum may entertain without disturbing any
congressional approved balance of federal and state judicial responsibilities?”
c. Grable test
i. meaning of statute is actually in dispute
ii. federal statute dispute is the only legal or factual issue contested in the case; AND
iii. gov’t has strong interest in resolving significant federal issue
iv. Not disturb congressional balance between federal and state court. Whether it is a federal cause of
action isn’t dispositive.
3. App: Grable implicated a substantial federal issue (the interpretation of federal tax law and the service required…
only legal fact contested in case)(“serious” federal interest)
a. Does not upset the interrelation between state and federal courts set by Congress
b. Merrill is not to the contrary
i. No serious federal interest at stake
ii. Congress had not provided a federal cause of action for violation (federal action is sufficient but not
necessary)
iii. Did not want to open door for many cases without a federal cause of action
c. Grable decision reasserts Smith and impinges on Merrill
4. Holding: fed ct has jur. Right to relief depends upon application of state law.
i. Supplemental Jurisdiction
i. Judicially Created Doctrines of Pendant and Ancillary Jurisdiction
1. United Mine Workers v. Gibbs (ancillary jurisdiction over claims)
a. Facts: UMW mine closed, new mine opened on property with Southern Labor Union Members; blocked by
UMW, union pressure allegedly cost Gibbs his job as superintendent as well as contracts and mine leases;
brought suit against international union UMW for secondary boycotts (federal law) and contract claims (state
law)
b. Rules:
i. Gibbs Test
1. Need Federal anchor claim: must have substantial fed issue SS1367
2. All extra claims fall within same “Common nucleus of operative fact” as the anchor claim.
ii. P adding Supplmt. Claims: Fed claim must have substance sufficient to confer subject matter
jurisdiction, then P may add claims, where all claims may be heard in fed ct
iii. Discretion: If the only fed claim is dismissed before the trail, the fed court has discretion whether it
wants to hear the state claims or remand back to state court.
iv. Courts should hesitate to hear the claims if problems with: A) Judicial economy and 2) convenience and
fairness to the litigants, or C) jury confusion
v. Relationship between claims permits conclusion of the entire action if it comprises the same
constitutional case (Article III Case)
vi. State and federal claims must derive from a common nucleus of operative fact
1. App: Boycott and contract claims derived from common nucleus of operative fact
vii. If ordinarily expected for all claims to be heard in one judicial proceeding, and federal issues are
substantial, the federal courts have power to hear the whole (wide latitude)
 viii. Federal courts should not exercise supplemental jurisdiction over state law when
1. All federal issues are resolved before trial
2. If state law claims are substantial and predominant
3. If there is likely to be jury confusion
c. Holding: Fed ct. has discretion to hear all claims if they so choose. If doesn’t want to hear supplemental
claims, can remand to state court.
2. Owen Equipment & Erection Co. v. Kroger (1978)
a. Facts: Kroger (IA) electrocuted when boom of steel crane touched electric line; wrongful death diversity suit
filed against OPPD (NE); OPPD filed third party complaint against Owen (IA); OPPD’s motion for summary
judgment granted; Owen moved to dismiss for lack of jurisdiction
b. Rule: Complete diversity of citizenship necessary
i. App: No independent basis for federal jurisdiction, both citizens of IA
ii. When complaint was amended to include Owen, complete diversity was destroyed just as if she had
sued Owen initially
iii. P could potentially manipulate by suing only out-of-state D in federal court and waiting for them to
enjoin the rest (allow an end-run around diversity jurisdiction)
iv. Forecloses pendant/ancillary jurisdiction over claims by a P in diversity against any non-diverse party
c. Holding: claims against Owen must be dismissed because they are state tort claims and no diversity exists
3. Finley v. United States (1989) (pendant party jurisdiction)
a. Facts: Airplane crash as San Diego Airport; Wife sues US in Fed ct (no choice b/c fed claim could only be
brought in fed ct. Also asserted additional state-based tort claims against the City of San Diego and San Diego
Gas and Electric Co.
b. Rule: (severely constrained pendant party jurisdiction)
i. Federal court lacks authority to assert jurisdiction over the state claims against the nonfederal D
ii. Neither the convenience of the litigants nor considerations of judicial economy can suffice to justify
extension of the doctrine of ancillary jurisdiction.
iii. No independent basis for federal jurisdiction of state tort claims
iv. No addition of parties where independent claim of jurisdiction does not exists
1. Jurisdiction over civil claims against the US means “against the US and no one else”
c. Holding: Must file separate state tort claims against non-diverse parties in state court
ii. Supplemental Jurisdiction
1. 28 U.S.C. § 1367
a. “In any civil action of which the district courts have original jurisdiction, the district courts shall have
supplemental jurisdiction over all other claims that are so related to claims in the action within such original
jurisdiction that they form part of the same case or controversy [same operative nucleus of fact] under
Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve
the joinder or intervention of additional parties” (very inclusive)
b. When District Courts have jurisdiction founded solely on §1332 [Diversity Jurisdiction]
i. Do not have jurisdiction over persons made parties under Rule 14, 19, 20 or 24
ii. Or over any claims over persons proposed to be joined as P under Rule 19 or seeking to intervene as P
under Rule 24
c. District courts may decline to exercise supplemental jurisdiction if:
i. The claim raises novel or complex issues of state law
ii. Claim predominates over the claims over which the district court has original jurisdiction
iii. The district court has dismissed all claims over which it has original jurisdiction
iv. In exceptional circumstances, there are other compelling reasons
d. Adds the term supplemental jurisdiction to refer to claims that do not have an independent basis for federal
jurisdiction, but are nonetheless within the federal court’s subject matter jurisdiction because of their
relationship to an “anchor” claim that falls within the court’s federal subject matter jurisdiction
2. Determining Supplemental Jurisdiction Checklist
a. Is there a federal anchor claim?
 i. No: no jurisdiction
ii. Yes: continue to next step
b. Is the plaintiff bringing the claim?
i. No: D may bring all related and nonrelated claims (authorized to bring but up to ct discretion)
ii. Yes: continue to next step
c. Is the anchor claim based solely on diversity?
i. No: can bring claim
ii. Yes: watch out! Look at SS 1367, if person made a party under 14, 19, 20, 24, then No jurisdiction!
3. Exxon Mobil Corp v. Allapattah Services (2005)
a. Facts: 10,000 Exxon dealers filed class-action suit alleging they were overcharged by Exxon; invoked diversity
jurisdiction; not all Ps met amount in controversy
b. Rule: Only need one plaintiff in a class action whose amount in controversy meets or exceeds amount in
controversy (as opposed to having every plaintiff meet the amount in controversy).
i. Step 1: Is there a claim that has original jurisdiction? (Exxon majority: interpreted “original jurisdiction”
to mean an anchor claim)
ii. Step 2: Is the fact that fed ct. has original jurisdiction, based solely on diversity?
iii. If solely based on diversity, fed ct. doesn’t have jurisdiction over
1. claims against defendants made parties under rules 14, 19, 20, and 24
2. Claims by persons proposed to be joined as plaintiffs under 19
3. Or seeking to intervene as plaintiffs under 24
iv. Based on something other than diversity can have supplemental jur so long as supplemental claims
are under the same “operative nucleus of fact” as anchor claim.
v. Where the other elements of jurisdiction are present and at least one named P satisfies the amount in
controversy, §1367 permits supplemental jurisdiction of claims with other P in the same Article III Case
vi. “When the well-pleaded complaint contains at least one claim that satisfied the amount-in-controversy
requirement, and there are no other relevant jurisdictional defects, the district court, beyond all
question has original jurisdiction over that claim”
1. §1367 is not ambiguous
2. Rejects “indivisibility theory” (all claims or no claims stand or fall)
3. Rejects “contamination theory” (one claim falling outside jurisdiction puts all claims out)
vii. Class Action Fairness Act now confers federal diversity jurisdiction over class actions where the
aggregate amount in controversy exceeds $5 million (not retroactive)
c. Holding:
d. Dissents: §1367 is ambiguous and must be read narrowly to overturn Finley; Congress did not intend to
discard precedent
iii. Removal Jurisdiction
1. 28 U.S.C. § 1441 (pg 323 in supplement)
a. D can remove any civil action brought in st. ct. where the District court has original jurisdiction
i. Federal question jurisdiction is removable without regard to citizenship
b. In-state defendant with diversity jurisdiction cannot remove , since already protected by out of state bias
(plaintiff form another state). Only non citizen defendant can remove to another forum. Citizen defendant
cannot remove even with a counterclaim (even a compulsory one).
c. Removability of a fed Q case depends on plaintiff’s complaint. Defendant can remove if federal law preempts
state law cause of action.
d. Supplemental jurisdiction: state claim is supplemental part -when you have a federal question anchor claim.
If original jurisdiction means all of the claims including the anchor claims plus supplemental claims – could
have been filed in federal court.
e. Challenging Subject Matter Jurisdiction: non-waivable (you can waive personal jurisdiction). b/c U.S. Const
gives authority over jur.
2. Ties to original jurisdiction
a. Most cases in which a P could have filed originally in federal court can be removed to federal court by a D
 b. Some types of suits are non-removable by legislation (Federal Employers’ Liability Act)
c. Right of removal only given to D
d. Exceptions to cases that could have been originally filed in federal court
i. Where Congress has determined there is a special need for a protective federal forum that would be
hospitable to the D’s federal defenses
ii. Most federal courts will not consider counterclaim, even if compulsory under state law
3. Voluntary-Involuntary Rule
a. Prevents a D from removing a suit when the state court dismisses the claims against the non-diverse D on the
merits, unless P has taken voluntary action that makes the case removable
4. Removal and Supplemental Jurisdiction
a. Must have same nucleus of operative fact (can exercise jurisdiction over claims within an Article III Case)
5. Remand orders are not appealable
V. The Process of Adjudication
a. Pleadings
i. History of Pleadings: procedure used to vary with the type of claim. Then FRCP created and apply single
procedure to all types of claims
ii. FRCP 11(Signing Pleadings and other Papers; Sanctions):
1. (a) Attorney must sign the Pleading. (b)By signing the pleading, an attorney “certifies that to the best of the
person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances”
the pleading or paper:
a. (1)Is not for an improper purpose, such as to harass, cause unnecessary delay, or needlessly increase
the cost of litigation
b. (2)All claims are warranted by law and are non-frivolous
c. (3)The factual contentions have evidentiary support, or if specifically identified will likely lead to
evidentiary support after reasonable opportunity for investigation or discovery
d. (4)The denials of factual contentions are warranted on the evidence or after reasonable inquiry are
based on lack of information
2. Attorneys may be sanctioned for violating FRCP 11(b)
iii. Garr v. U.S. Healthcare (1994)
1. Facts: Attorney Malone has a case but no client, goes client shopping and finds someone who will let him
file a class action suit on his behalf. Malone’s attorney friends, Sklar and Levin, files identical complaint
w/o doing research. Healthcare company, D, files rule 11 sanctions
2. Rules:
a. FRCP 11: requires than an attorney signing a pleading make a reasonable, personal inquiry. Copying
someone else’s complaint is not reasonable or personal.
b. Signer’s signature on a pleading, motion, or other paper means 3 things:
i. (1) read the pleading, motion, or paper,
ii. (2) made a reasonably inquiry personally into the content of the pleading, motion, or paper and
concluded it is well grounded in fact and warranted in law, and
iii. (3) has not acted in bad faith in signing the document.
3. App: Violations:
a. Malone: wrongfully claimed that client Greenfield could fairly and adequately protect the interests
of the class (had a family interest conflict, and not a big enough shareholder). Malone did complete
sufficient inquiry by: reading article, getting company financial information, examined forms
company filed with SEC showing trading
b. Sklar and Levin: insufficient personal research (just copied Malone’s complaint, changed the names,
and read the article)
4. Holding: Malone pay $24,000, Skalr and Levin each $1400
b. Plaintiff’s Complaint
i. FRCP 8:
 1. 8(a): Plaintiff’s complaint must contain short and plain statements showing: (1)grounds for jurisdiction,
(2)pleader entitled to relief, (3)demand for relief sought
ii. FRCP 9: Pleadings doesn’t need to allege party’s capacity to be sued, party’s authority to be sued, or the legal
existence of an organization
1. 9(b): in alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud
or mistake. Malice, intent, knowledge, may be alleged generally.
2. After Iqbal, all pleadings must meet this heightened requirement for “stating with particularity the
circumstances” that led to the incident.
iii. FRCP 10: Forms of Pleadings. Must name all parties, court’s name, etc, and state claims in separate ¶
iv. Burden of Pleading: Burden to introduce a matter to litigation by raising the matter in a pleading
v. Burdens of Proof: duty of proving contested facts; 2 elements: (1)burden of production: producing evidence,
AND; (2) Burden of persuasion: convincing the jury via sufficient evidence to win the claim
c. Defendant’s Responses
i. Motion to Dismiss
1. FRCP 12 (Defenses, Objections, Motions): 20 days to serve answer w/o waiver, must include all
counterclaims or cross-claims, defense motions (to dismiss): (b)(4) insufficient process Iqbal/Twombley),
(b)(6)failure to state a claim upon which relief can be granted, must make all motions at the outset in the
pleading at the same time otherwise likely barred. Only lack of subject matter jurisdiction may be brought
at any time.
2. **Cost of Discovery looming over cases to cause heightened pleadings standard**
3. Bell Atlantic Corp v. Twombly (2007)
a. Facts: P sues telecom companies for conspiracy and violation of Sherman Act. Sherman Act does not
prohibit all unreasonable restraints on trade, but only restraints effected by a contract, combination,
or conspiracy. Complaint asserts Ds “engaged in parallel conduct” to inhibit CLECS and ILECS agreed
to refrain from competing against one another.
b. Rules:
i. Twombley “plausibility” standard: requires that a “plausible” claim (not merely conceivable)
appear on the face of the Plaintiff’s complaint. (P must provide facts of evidence in complaint,
no boilerplate language.)
ii. 8(a)(2) requires P provide claim showing that the pleader is entitled to relief. Grounds of
entitlement to relief requires: “a complaint with enough factual matter (taken as true) to
suggest an agreement was made.” (requires enough fact that raises a reasonable expectation
that discovery will reveal evidence of illegal agreement) . P must have plausible factual
allegation to satisfy “fair notice” of nature of the claim and “grounds” which the claim rests.
iii. Rule 12(b)(6): P must present enough facts to state a claim to relief that is plausible on its face.
Must be more than conceivable and actually plausible
iv. Rationale:
1. Practical: save time of parties, save money for parties (litigation expenses), don’t want to
unnecessarily increase fed ct. caseloads. Discovery is 90% of litigation costs, so want to
dismiss claim if “no reasonably founded hope that the *discovery+ process will reveal
relevant evidence to support a (US law violation) claim:
2. 2 principles:
a. (1)P needs to show some evidence rather than just conclusions.
b. (2)complaint is insufficient if the well pleaded facts do not permit the court to
infer more than the mere possibility of misconduct
a. App: Because there is an alternative explanation that is more plausible than “parallel conduct” and
“agreement to refrain from competing against one another” and lack of any concrete evidence that
leads one believe it is more than smart business practice, then complaint is insufficient and must be
dismissed
 b. Holding: Valid claim must include evidence that rules out possibility defendants were acting
independently. (solely conscious parallelism doesn’t count as conspiracy b/c other plausible reasons
exist)
4. Ashcroft v. Iqbal (2007)
a. Facts: Arab Muslim man, Iqbal, arrested and detained in maximum security unit. Iqbal sues US
attorney general and director of FBI for violation of constitutional rights. Claim that b/c they
arrested and detained thousands of Arab Muslim men, those men were approved by D to be
confined until cleared by D, and Ds maliciously agreed to subject Iqbal to harsh conditions of
confinement.
b. Rules:
i. Applies Twombley plausibility standard to all claims not just anti-trust
ii. flexible ‘plausibility’ standard: pleader must amplify a claim with some factual allegations to
render the claim plausible.
iii. Plausibility standard is not similar to the probability requirement (doesn’t need to be at least
50% plausible). But must be the most plausible explanation of any alternate explanations given
the facts or very likely to be most plausible claim after given opportunity for discovery
iv. 2 Prong Twombley Test:
1. (1) legal conclusions must be supported by factual allegations
2. (2) court then determine whether they plausibly give rise to an entitlement to relief. (P
must allege facts that taken as true are “suggestive of illegal conduct.”)
c. App: (1)P’s “bare assertions amount to nothing more than a formulaic recitation of the elements of
a claim” (2) therefore, allegations are “conclusory and not entitled to be assumed true” (3) given
more likely explanation that thousands of Arab men were detained because those people are more
likely to have links to the 9-11 attack even if not purposefully targeting Arabs or Muslims
d. Holding: Given the “obvious alternative explanation” for the arrests and the lack of factual evidence
to sufficiently support the claims, Ps claims are not plausible and must be dismissed.
5. Effect: Higher Pleading barrier for Plaintiffs, easier motions to dismiss for Defendants, P can also use Iqbal
to dismiss affirmative defenses and counterclaims
ii. Defendant’s Answer (Denials and Affirmative Defenses)
1. FRCP 8:
a. 8(b)(1):Defendant’s Answer must contain short and plain statements (1) stating each defense to
each claim, (2) admit, deny, or insufficient info response for each allegation in the complaint
b. 8(b)(4):Partial Denials: denial must fairly respond to the substance of the allegation and if a party
intends to deny only part of an allegation, they must admit the part that is true and deny the rest. (a
denial that fails to distinguish between the true and false components of a given allegation will be
deemed an ineffective denial and will be treated as an admission.
c. 8(b)(5):Insufficient info response has the same effect as a denial
d. 8(b)(6): If allegation not denied, it is deemed admitted
e. Duty to investigate: when using an insufficient info response , the defendant must make a
reasonable investigation into the allegations of the complaint
f. 8(c):Affirmative Defenses: a defense that avoids rather than denies the truth of plaintiff's
allegations. The consequence of omitting an affirmative defense from the answer is that defendant
may be precluded from asserting the defense at trial.
g. FRCP13:Counterclaims and cross-claims: Under Rule 13, the answer should also include an any
counterclaims against the plaintiff and cross-claims against other co-defendants.
2. FRCP 15:
a. (a) party may amend its pleading: before served with responsive pleading, within 20 days is
responsive pleading not allowed and action not on trial calendar, response to amended complaint
must be within 10 days of receiving it or within time remaining to respond whichever is longer.
b. (b) court will allow amendment of pleadings if it will aid in presenting the merits
 c. (c) Relation-Back: when stat of lims would bar a new claim, sometimes may relate back to date first
complaint filed. Relation-back only allowed when the claims added by amendment arise from the
same core facts as the timely filed claims. If P only misidentified the proper name of D in the
complaint, but served the complaint on the correct D, correcting the name in the complaint auto
relates-back
d. Discovery
i. FRCP 26 (a): Initial Required Unilateral Disclosure:
1. 26(a)(1)(A); Initial Disclosure: Each party must initially disclose without waiting for a discovery request to
provide the other parties with "evidence that the party may use to support its claims and defenses” (i.e.
(i)the names of people "likely to have discoverable info that disclosing parties may use in their claims, Any
Fact witnesses, (ii)copies or the location of documents the disclosing party may use to support its claims,
Any documents or exhibits they may present in trial (iii)the computation of damages, any relevant
insurance coverage
2. 26(a)(1)(C);Timing: At least 21 days prior to first pretrial conference, parties are required under Rule 26(f)
to confer and develop of discovery plan, 14 days after that discussion they must provide their initial
disclosure unless stipulated by agreement or ordered by court
3. 26(a)(2);Expert Disclosure: parties must disclose in identity of their expert witness, and submit a report
outlining the expert's conclusions, basis, and qualifications at least 90 days before trial or when otherwise
directed
ii. FRCP 26(b): Discovery Scope and Limits:
1. (1) Parties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim.
Request for discovery must appeal “reasonably calculated to lead to the discovery of admissible evidence
2. (2)(C);Court must limit the extent of frequency of discovery if the court determines that:
a. The discovery sought is unreasonably cumulative or duplicative, or can be more easily obtained
through another source
b. The party seeking discovery has ample opportunity to obtain the info
c. The burden or expense of the proposed discovery outweighs its likely benefit (must balance
available resources and importance at issue)
iii. Discovery Devices: Interrogatories, Depositions (w/ supbeopas), request for production of docs, medical exams,
request for admission (can proceed in any order)
1. Depositions; Rule 30; examinations of a witness under oath, recorded for possible later use in the
proceedings. Subpoena: required to compel the attendance of nonparty deponents (can’t force deponents
who regularly live or work more than 100 miles away to attend a deposition and must be personally
served, no minimum contacts substitute). All depositions are taken before court reporters or officers
authorized to administer oaths. Courts are intolerant of attorneys trying to coach witnesses during a
deposition, they must do that before hand.
2. Interrogatories; Rule 33; each side can ask the opposing party 25 written questions (must be served within
30 days). If answers can be derived from business records, can just turn over the records. Parties must
make reasonable investigations to determine the answers to interrogatories
3. Producing documents and electronically stored info: Rule 34: permits parties to inspect and copy
documents or other tangible evidence in another parties' control
4. Requests for admission; Rule 36; party served must admit or deny the truth of any legal or factual issues
in the litigation. Admissions cannot be used in any other proceedings, and if they fail to admit something
later discovered to be true the court can order sanctions
5. **Freedom of information act: enables any person to request the production of documents with some
exceptions in the custody of a fed agency
iv. Limitations on Discovery
1. Attorney-Client Privilege
a. Fragile: Lawyer-client privilege is extremely fragile and can be wholly or partially destroyed by
disclosure of the communication to third parties (co-council and paralegals are exception)
b. Inadvertent disclosure: Lawyers usually stipulate that inadvertent production of privileged docs
won’t waive privilege and parties will agree to return all such docs w/o making copies
c. No waiver of privilege if: (1) disclosure was inadvertent, (2) holder took reasonable steps to prevent
disclosure, (3)the holder took reasonable steps to resolve the error
d. Implied Waiver: can waive attorney-client privilege by making confidential information an issue in
litigation (court can force disclosure)
e. Self-Incrimination: only in crim law. In civil law, no right to resist disclosure of liability
f. Upjohn Co. v. United States (1981)
i. Facts: Corp. finds out foreign subsidiary is bribing gov officials and decides to conduct internal
investigation. IRS gets wind and tries to collect attorney’s materials during discovery to shortcut
around doing their own investigation.
ii. Rules:
1. Broadly: All communications made within the company labeled as “highly confidential
should be protected under attorney client privilege. Rule only protects communication,
not facts.
2. Facts v. communications: Underlying facts=discoverable, lawyer-client comm. (i.e.
confidential info in internal investigations by in-house council) are protected under
attorney-client privilege.
3. Employees: no matter what position the employee is in, if they give information to the
company’s attorney for claim investigatory purposes, the communication between the
two are considered privileged
4. Rationale: unless we extend attorney-client privilege to all “confidential” situations
between lawyers and corps, clients won’t telling their lawyers everything to get good
advice
iii. App: attorney acted in a position to gve legal advice to the company with respect to the
payments when attorney asked for information, employees themselves were sufficiently aware
they were questioned in order for the corp to obtain legal advice, the questionnaire clearly
indicated the legal implications of the investigation, communications considered highly
confidential and kept confidential by the company. These are consistent with purpose of
attorney-client privilege.
iv. Holding: Communications from any employee concerning legal information concerning an
investigation for litigation and are considered highly confidential by the company are protected
by attorney-client privilege against disclosure. Convenience of IRS irrelevant.
1. Work Product: materials prepared in anticipation of litigation is protected against disclosure unless
otherwise discoverable or adverse party shows substantial need to have to prepare
g. Hickman v. Taylor (1947)
i. Facts: Tug boat accident; owners anticipated litigation and had an attorney interview survivors
next day. Asked to disclose the exact details of his writings and to write down what he
recollects.
ii. Rules:
1. Rule 26(b)(3): a party cannot discover documents that attorneys prepare in preparation
for litigation including mental info (work product). Only available if show necessity.
2. Implications of allowing: would demoralize profession if attorneys couldn’t keep their
own work product to themselves. Also, asking the attorney to write down info from
recollection could lead to skewed evidence.
3. Boundaries of Discovery FRCP 26(b): (1) no depositions may be done in bad faith or to
oppress the person subject to inquiry, (2) no discovery of irrelevant info, (3), no discovery
if encroaches upon domains of privilege, (4) no discovery if other party can readily access
the info.
i. App: General policy that attorney work product is not discoverable unless give
asking party can establish an adequate reason of necessity to justify a subpoena.
 Since the information is easily obtainable through asking party getting a deposition,
they give insufficient reason since info is readily available.
ii. Holding: Attorney work product of conducting interviews and sketching notes for
litigation is protected under work product privilege FRCP 26(b)(3).
2. FRCP 26(b)(3): Trial Preparation Materials
a. Party may not discover documents and tangible things that are prepared in anticipation of
litigation or for trial unless the party shows substantial need
b. Court must protect against disclosure of mental impressions, conclusions, opinions , or legal
theories of another party’s attorney
c. Any party of person may obtain a person’s own previous statement that is written and
signed or recorded verbatim (electronic or transcribed)
d. Claiming privilege: must expressly make the claim and describe the nature of the documents,
communications, or tangible things not produced or disclosed
e. If privileged material accidentally disclosed, other party must promptly return, sequester or
destroy the specified info
v. Compelling Discovery
1. Duty to Update: Rule 26(e) requires a party to supplement her prior responses and initial disclosures if the
party learns that the info disclosed is incomplete or incorrect. Must update at appropriate intervals to
amend responses to interrogatories, requests for production, requests for admission
2. Blocking Discovery: Objections: unilateral refusals to produce the requested info b/c (a)discovery is
beyond the scope permitted under FRCP, (b)sought in an improper manner, (c) calls for the disclosure of
privileged info.
3. Motion to Compel under Rule 37(a): motion to test the validity of an objection. Well-founded or
unfounded, losing party pays attorney fees. Violation can result in contempt to court: jail, dismiss action,
deem matter conclusively established for opposing party, and other sanctions
4. Protective Order: preemptive intervention to prevent a motion to compel, but requires good cause.
5. Sanctions: party seeking sanctions must first make an effort to resolve the dispute with the disobedient
party informally
e. Judge and Jury Control over the Merits
i. Summary Judgment
1. FRCP 56: Summary Judgment: (a)(b) P or D may move for SJ with or without supporting affidavits if there
are no facts that are genuinely at issue. (e)(2)Non-moving party must then respond by proving that there is
a genuine issue of material fact otherwise, SJ should if appropriate be granted against them.
2. Celotex Corp. v. Catrett (1986)
a. Facts: Plaintiff’s husband died from asbestos exposure. Manufacturer denied causation. P bears
burden of persuasion by preponderance of evidence that asbestos exposure from this company
killed her husband.
b. Rules:
i. D (moving party) must either: negate an element of P’s prima facie case, or show that P failed
to produce enough evidence to make out prima facie case. Therefore, show that there is a
genuine issue of fact.
ii. Rule 56(c) Summary Judgment: must establish nonexistence of a genuine issue of fact (1)
burden of production: of sufficient evidence to make a prima facie case (2) burden of
persuasion: meet preponderance of evidence.
iii. Judge must determine that no reasonable jury could find for the nonmoving party (via
affirmatively showing insufficient evidence or negating an necessary element
iv. Supporting affidavits or evidence that negates claim are unnecessary, can use other devises like
interrogatories, depositions, documents, instead
v. Rule 56(f): Court may deny SJ if nonmoving party did not have the chance for full discovery
vi. Timing: P must wait 20 days from commencement of action, D can file anytime
vii. Partial Summary Judgment: i.e. agree D liable but sent to jury to calculate damages
 c. App: D shows that there is no genuine issue of material fact since P failed to produce evidence that
Celtex’s product was the proximate cause of the injuries since there is no evidence the P was
exposed to Celtoex’s product within the statutory period.
d. Holding: If D shows that there is no genuine issue of material fact and shows that P fails to bring
prima facie case, then must grant SJ to D, who doesn’t need to affirmatively defend.
3. Anderson v. Liberty Lobby Cases (1986)
a. Facts: Repeat of NY Times v. Sullivan. To succeed on a claim for malice, plaintiff must provide Clear
and convincing evidence of harm.
b. Rules:
i. Genuine issue of material fact: the evidence is such that a reasonable jury could return a
verdict for the nonmoving party. If reasonable minds could differ as to the import of the
evidence, then SJ motion should be withheld.
c. App: P did not show that all reasonable juries would conclude that P provided clear and convincing
evidence that D acted maliciously in publishing the libel. Genuine issue of fact whether there was
malice or not, so must go to jury trial.
d. Holding: If there is a heightened standard to succeed on a particular claim, like clear and convincing
evidence rather than preponderance, then that standard also applies at the summary judgment
stage.
ii. Judgment as a Matter of Law
1. FRCP 50(a) Judgment as a Matter of Law: court may grant JAML if “a party has been fully heard on an issue
during a jury trial and the court finds that a reasonably jury would not have a legally sufficient evidentiary
basis to find for the party on that issue. (Made any time b4 submitted to jury)
st
2. FRCP 50(b) Judgment notwithstanding the verdict: must 1 file JAML; Same requirement as (a), not later
10days past verdict
3. Dixon v. Wal-Mart Stores, Inc. (2003)
a. Facts: Woman shopping at Wal-Mart, trips over plastic strips typically used to bind newspapers.
Sent to hospital. Sues under premise liability.
b. Rules:
i. See 50(a) and (b) above.
ii. Appeal: Must file 50(a)+(b) to appeal.
iii. If P fully heard and fails burden of production (no legally sufficient evidentiary basis), or D
undermines an element of P’s prima facie case JAML to defendant.
iv. If facts point overwhelmingly to moving party so that court believes that no reasonable jury
would not arrive at a contrary verdict and no issue of fact JAML for moving party.
c. App: P failed to make out a prima facie case since case law says that close proximity a danger is
insufficient notice and impossible the binder stayed on the floor 8+hours. So since those are the only
2 theories P came up with and both are negated, they failed prima facie case.
d. Holding: Judgment as a matter of law granted for Wal-Mart. Virtually impossible strips remained in
high traffic area for 8 hours w/o anyone noticing. Fails one element + “complete absence of
probative fact.”
iii. Motion for a New Trial
1. FRCP 50(b): if court feels the jury came to the wrong verdict, judge can order new trial
2. FRCP 59: may grant new trial whenever it deems justice so requires. I.e. verdict was against the weight of
the evidence, size of damages inappropriate, necessary to prevent justice, or jury exposed to inappropriate
evidence through attorney misconduct.
II. The Binding Effects of Prior Judgments: Claim and Issue Preclusion (connects to joinder and pleadings)
a. Claim Preclusion (res judicata: the thing has been decided)
i. Same Claim: Majority Rule does it arise out of the same transaction or occurrence? If yes, then precluded
1. Rush v. City of Maple Heights (1958)
a. Facts: P sues city for damages to motorcycle after accident on bumpy street. Won case, then sues
for personal injuries.
 b. Rules:
i. Claim Preclusion: A single tort can be the basis of but one action. Cannot separately sue for
personal injury and damage to property separately if they arise from the same incident. If a
nd
Plaintiff fails to sue for all claims from one accident, the first suit will preclude his 2 suit.
ii. Purpose: Necessary to prevent multiplicity of suits, burdensome expense, delays to plaintiffs,
and vexatious litigation against defendants.
c. App/Holding: Since P already litigated the negligence claim against the city for property damage,
she is precluded from suing for negligence that arose from the same incident as her previous
negligence claim, this time for physical injuries sustained from the accident
2. Herendeen v. Champion International (1975)
a. Facts: Man working at co. resigns and works for competitor. Suit #1 for co#1 fraudulently inducing
him to leave so he wouldn’t get pension benefits. TC Holding#1: dismissed for failure to state claim
upon which relief can be granted. Sues Co again for withholding payments from Plan which he paid
for. TC Holding #2: dismissed under res judicata. He appeals, App Ct: reverse. Same identity of D’s
insufficient to dismiss under RJ.
b. Rules:
i. Elements to bar a claim for res judicata: (1) prior judgment must have been rendered by a
court of competent jurisdiction, (2) final judgment given on merits of claim, AND; (3)the same
cause of action and the same parties of their privies were involved in both suits.
ii. Correct elements to bar a claim for res judicata: (1)whether a different judgment in the second
action would impair or destroy rights or interests established by the judgment entered in the
first action. (2) whether the same evidence is necessary to main the second cause of action as
was required in the first and (3) whether the essential facts and issues in the second were
present in the first.
iii. Claims that are single and entire: claims immediately arise out of the exact same act or
contract, or where the primary duty and wrong are the same. (re judicata bars from bringing)
iv. Claims that are several and distinct: the two claims arise from different acts or contracts (can
bring claim, res judicata does not apply.)
v. See page 785 (rest of judgments)
vi. **Claim preclusion effectively operates as a rule of compulsory joinder in the first action and
compels parties to join particular claims at the outset of the litigation in order to avoid losing
them altogether.**
nd
c. App/ Holding: The two claims are different enough to allow him to bring the 2 claim. He sets forth
nd
a separate and distinct cause of action from that adjudicated before, so 2 claim allowed.
ii. Seaboard Coast Line Railroad Co. v. Gulf Oil Corp
1. Held that a prior declaratory judgment that Gulf was not obligated under one contract to indemnify Coast
Line for a fire, barred a later suit for indemnify based on a different contract
a. Same invasion of rights (a cause of action does not consist of facts but of the unlawful violation of a
right which the facts show
b. Legal wrong theory (MINORITY RULE)
iii. Restatement
1. Transactional approach (MAJORITY RULE)
a. To be determined pragmatically in a convenient trial unit; similar time and place facts
2. Operative Nucleus Fact > Same Transactional Occurrence
a. ONF not necessarily under ST so might have claims in Federal court and State court
b. Most discretion on whether they want to join their claims in federal court or not (limits incentives)
iv. Changed Circumstances and the Absolute Character of Preclusion (midway change of law)
1. Default judgments may bar defendants from litigating an independent action after failing to raise a defense
2. FRCP 12(b)(6) motion to dismiss for failure to state a claim usually precludes relitigation unless otherwise
specified
 3. Pendency of an appeal or motion for reconsideration does not delay or suspend the res judicata effect of a
judgment
a. Creates the possibility that a dismissal can be based on a prior adjudication that is subsequently
reversed
i. Sometimes can sue for restitution (Final judgment) (Preclusion applies even when law changes)
4. Federated Depart. Stores v. Moitie (1981)
a. Facts: US and 7 private citizens sue department stores under federal law in fed ct. 5 parties appeal
after their claims dismissed b/c determined that must have an injury to their business to sue under
the law. 2 Ps file new claims under state law in state ct rather than appeal. Law changed to allow
consumers to sue under the federal claim so the 5 parties dismissals are remanded. 2 P’s new claims
in state ct. barred by res judicata, they appeal, Ct of appeals remands b/c law changed. Actually
claim preclusion still applies
b. Rules: Even if the law changes midway through litigation, if you are bringing the same claim that you
brought in federal court now in state court, claim preclusion applies and bars the relitigation of
those same claims.
c. App: the 2 Ps brought nearly the same claims in Federal court already and decided not to appeal, so
they cannot bring those same claims under state law in state court.
d. Holding: Claim preclusion bars the claims.
v. Newly discovered evidence
1. If a party discovers evidence not asserted in the first proceedingpossibly FRCP 60(b)
a. Permits a court to “relieve a party from a final judgment” (applied very narrowly)
2. Provides incentive to wait to see what develops (but if you wait too longstatute of limitations may run)
(make complaint for all damages that you might eventually get)(bring everything in pleadings)
a. If the law changes than may not be able to raise claims (must watch for Rule 11)
vi. “On the Merits”
1. Only those cases disposed of “on the merits” will foreclose relitigation of the claim
a. Dismissal due to lack of personal jurisdiction will not be “with prejudice”
2. Costello v. United States (1961)
a. Facts: Man swore in Prelim Form for naturalization and later when he appeared before
naturalization examiner that he worked in “real estate. ” DC then found this was willful
misrepresentation and fraud b/c be was really a bootlegger.
b. Rules:
st nd
i. Solely procedural defect w/o consideration of merits: Even if the 1 and 2 suit are similar
st
enough but 1 suit dismissed for civ pro mistake, and “merits of the claim” not discussed, then
party is not barred from refilling suit. So, preclusion only applies to cases disposed of on “on
the merits” of the claim. So if a ct dismisses for lack of personal jurisdiction, they may sue in
another jurisdiction. (although they can’t re-litigate for jurisdiction in the first state)
ii. Exceptions (so civ pro mistake doesn’t preclude refilling of suit): lack of jur or improper venue
all other suits operate as an adjudication upon the merits.
iii. Dismissal for failure to file the affidavit of good cause is a dismissal for “lack of jurisdiction” w/in
the meaning of the exception under FRCP 41(b) (Defect was “curable”)
iv. “failure to comply with preconditions requisite to the Court’s going forward to determine the
merits of the substantive claim” are jurisdictional
c. App: Denaturalization dismissal correct b/c affidavit of good cause is a prerequisite to initiating a
denaturalization suit under fed statute and wasn’t filed with the complaint as should have been. So
gov brought current new suit of fraud and misrepresentation by affidavit of good cause filed w/
complaint. USSC:
d. Holding: US not barred from bringing the present suit although they made a procedural mistake of
not attaching the affidavits as a prerequisite to filing suit. Not determined “on the merits” and only
on procedural defect so may bring the same claim.
3. Dozier v. Ford (1983)
 a. Facts: P sues for breach of warranty in fed ct for $7000 compensatory damages and $1 mil punitive.
Ct. determined punitive damages unavailable in this type of claim and dismissed w/o prejudice for
lack of amount in controversy as required by diversity jurisdiction. P refiles claim for compensatory $
over jur. amount and in different state under diversity.
b. Holding: Scalia: Claim precluded from federal court. Dismissal w/o prejudice permits P to refile in
state ct. not authorized to relitigate in fed ct again.
c. Rules:
st
i. Distinguished from Costello: If the defect was “curable.” So if the 1 suit’s deficiency pertained
to a fact separate from the past and completed cause of action, then may refile. (i.e. filing of
affidavit, service of process, or present residence).
ii. Barred because of lack of adequate jurisdictional amount; did not authorize relitigation of
whether there was federal jurisdiction
d. App: mistake of stating claim amount has to do with the merits of the claim. Therefore, the claim is
precluded from fed ct because original claim on the same merits under that claim was insufficient to
meet the amount in controversy
4. FRCP 41(b): “Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any
dismissal not under this rule—except one for lack of jurisdiction, improper venue, or failure to join a party
under Rule 19—operates as an adjudication on the merits.” (pg. 200-1 in supplement)
i. Claim Preclusion Checklist
1. Same Parties? (each person entitled to their day in court. Taylor v. Sturgell)
2. Same Claim? i.e arises from the same Transaction or Occurrence (majority rule)
3. On the Merits? (Costello v. Dozier)
a. Curable Defect?
b. Prerequisite?
b. Issue Preclusion/ Collateral Estoppel
i. The Basics
1. Little v. Blue Goose Motor Coach Co. (1931)
a. Facts: P crashes car into D’s bus. D sues P for property damage to bus under negligence claim. Ct.
awards damages to D. Then P brings wonton negligence claim against D for physical injuries under
negligence.
b. Rules:
i. Issue Rule: If an issue (i.e. negligence/breach of contract) has been litigated in ct. the D in first
st
proceeding can’t sue P in First proceeding over the same claim. Must raise all claims 1 time.
ii. Estoppel: when a material fact in any litigation has been determined in a former suit between
the same parties or between parties with whom the parties to the subsequent suit are in privity,
where the fact was also material to the issue.
nd
iii. Restatement 2 of Judgments: requirements for issue preclusion
iv. “When an issue of fact or law is actually litigated and determined by a valid and final judgment,
and the determination is essential to the judgment, the determination is conclusive in a
subsequent action between the parties, whether on the same or a different claim.”
1. An issue must be actually litigated and determined in the first proceeding
2. 1st proceeding must produce a valid final judgment
3. The issue must have been essential to that judgment
nd st
4. The “determination” or issue, must be the same in the 2 proceeding as in the 1 .
c. App: final judgment given on the issue of the car crash. Can’t sue for claim from same incident
d. Holding: Issue Precluded. Already sued over that same incident and should have brought
counterclaim when sued.
ii. Parties Bound by Issue Preclusion
1. Taylor v. Sturgell (2008)
a. Facts: Herrick wants FAA to disclose technical docs thru Freedom of Info Act. FAA denied request.
Taylor, friend, requests same docs, request denied, Taylor sues FAA in ct for docs.
 b. Rules:
i. General Preclusion Rule: one is not bound by a judgment in personum in a litigation in which he
is not designated as a party or was not been made a party by service of process (if person not
related to the first suit, can’t preclude them unless see exceptions below)
ii. 6 Exceptions: (1) consent, (2) actual control of the litigation (3) substantive legal relationships
(4) relitigation of a prior judgment w/ a proxy, (5) adequate representation in a properly
structured litigation, (6)statutory schemes that expressly bind nonparties (pg. 838)
iii. Claim preclusion: a final judgment forecloses “successive litigation of the very same claim
whether or not relitigation of the claim raises the same issues as the earlier suit.
iv. Issue Preclusion: bars successive litigation of an issue of fact or law actually litigated and
resolved in a valid court determination essential to the prior judgment,” even if the issue recurs
in the context of a different claim
v. Rationale of Res Judicata: protect against the expense and vexation attending multiple lawsuits,
conserve judicial resources, and foster reliance on judicial actions by minimizing the possibility
of inconsistent decisions.
c. App: Taylor is entitled to have his day in court. He was not in personam in first suit.
d. Holding: “virtual representation doesn’t fall w/i 6 exceptions so Taylor may sue and have day in ct
2. Bernhard v. Bank of America (1942)
a. Facts: Old Ms. Sather lives with Mr. Cook and create joint bank account. Cook withdrew funds from
joint account into his personal acct. Cook becomes executor of Sather estate then resigns.
b. Rules:
i. Defensive Collateral Estoppel : When D asserts preclusion b/c already litigated the issue
ii. Different Capacities: sometimes when same party appears in different capacities, they are
treated as different party for preclusion.
rd
iii. Non-Mutual: allowing 3 persons, not prior parties or considered in privity w/ earlier parties, to
take advantage of prior adjudication against their opponents (pg 841)
iv. Mutual: When it’s the exact same parties in both suits
c. App/Holding: Since Berhard sues on behalf of same beneficiaries over the same issue in both cases,
even though she is suing in a different capacity, her same right and the rights of the beneficiaries
st
was already decided in the 1 suit so claim preclusion applies.
3. Parklane v. Hosiery Co. v. Shore (1979)
a. Facts: Shareholders sue corp for issuing false proxy statement. While trial pending. SEC sues over
same thing and gets judgment is SEC favor. Upon SEC victory, shareholders attempt to estop D from
having the opportunity to go to trial and want SJ on those issues that are the same.
b. Rules:
i. Offensive Collateral Estoppel: When P seeks to estop D from relitigating the issue which the
defendant previously litigated and lost against another plaintiff. (wants SJ since issue same issue
already decided.)
ii. Safety guards to protect D from auto losing claims via Offensive issue preclusion: 4 factors
1. Could P easily have joined (if easy to join,  ct, no preclusion)
2. Unfair b/c stakes low (if settled or lost small claim ct, no preclusion
3. Danger of inconsistent verdicts (was there more than one claim before this one?
4. Greater procedural benefits in Forum 2 (procedure must significantly help D to apply)
iii. This holding is an exception b/c can be unfair:
1. Doesn’t promote judicial economy, since it creates incentive for parties not to join and
wait until someone wins then sue afterwards claiming estoppel and SJ in P’s favor,
2. Unfair to D if they didn’t try hard to defend in first suit b/c small settlement easier then
auto loses all subsequent suits that could be huge.
c. Holding/App: Since Corp litigated over same issue with SEC, (so must have put up a good defense)
then auto SJ to shareholders because same facts and claims
III. Joinder of Claims, Counterclaims, and Cross-claims
I. Every single claim must invoke subject matter jurisdiction
II. First ask: does the claim fall under diversity or federal question jurisdiction?
a. If yes: then great, can bring the claim
b. If no: then must fall under supplemental jurisdiction otherwise it is barred
III. Claim joinder by the Plaintiff: FRCP 15(a)
a. P MAY assert any claim against the defendant whether it be totally separate or unrelated.
b. P MUST assert all claims “arises from the same transaction or occurrence” that is the subject matter of the
underlying claims (or preclusion forever bars those claims).
i. This is great with aggregation b/c P can add up the amounts in all those claims against 1 defendant to meet the
$75,000 amount in controversy requirement.
IV. Claim joinder by the Defendant (when D sues someone)
a. Counterclaim: 13(a) and (b): a counterclaim is a claim against an opposing party (a party that has sued you).
i. It MUST be filed in the answer or it is waived
b. 2 types of counterclaims
i. Compulsory counterclaim: FRCP 13(a)(1): A defendant MUST assert all claims that arises from the same
transaction or occurrence as the plaintiff’s underlying claim or they will be forever precluded.
ii. Permissive counterclaim: FRCP 13(b) any counterclaim that doesn’t arise from the same transaction or
occurrence as the plaintiff’s claim. My assert it, but doesn’t have to. (can still bring these claims later)
c. Hypo 1: A(NY)  $100,000 B(FL) : allowed under diversity jurisdiction
i. B brings compulsory counterclaim against A for $90,000, can bring b/c falls under diversity jurisdiction
d. Hypo 2: A(NY)  $100,000 B(FL) : allowed under diversity jurisdiction
i. B brings a compulsory counterclaim against B for $45,000. Say “ not fed Q because its a state tort suit, then say
not diversity because although complete diversity exists, the counterclaim does not meet the amount in
controversy requirement. So you must invoke Supplemental jurisdiction.
1. Does 1367 grant supplemental jurisdiction?
a. Yes, it meets Gibbs. A compulsory counterclaim always meets Gibbs because the same transaction
or occurrence always meets the “common nucleus of operative fact” requirement in Gibbs.
2. Does 1367 (b) take it away?
a. First: Is it the plaintiff or the defendant bringing the claim?
i. P next step
ii. D can bring claim
b. Second: does the anchor claim’s subject matter jurisdiction rely solely on diversity?
i. Yes solely diversity watch out, was the claim joined under
ii. No, fed Q exists can bring claim
3. App: 1367 only takes away supplemental jurisdiction from claims by plaintiffs. This is a claim by defendant,
so 1367 (b) doesn’t take it away so D can bring it.
ii. Must explain why it is a compulsory counterclaim, explain why no Fed Q jurisdiction, then Why not diversity
jurisdiction, then why 1367 grants supplemental jurisdiction, then why 1367 doesn’t take it away.
e. Crossclaim: Rule 13(g); a crossclaim is a claim against a co-party, NOT an opposing party. Only P v. P or D v. D
i. Crossclaims MUST arise from the same transaction or occurrence as the underlying case or you can’t join the
claim at all. Even though this is true, it is not compulsory at all (just may bring them)
ii. Hypo: 3 way crash between A,B, and C,
1. A(CT) claim against B and C (both NY): all claims over $75,000
a. What claims can C file?
i. C MUST file a compulsory counterclaim against A to prevent preclusion for all claims that arise
from the same T/O (the wreck).
1. Invokes diversity b/c more than $75,000
ii. C MAY file a crossclaim against B, its against a co-party and must be arise from the same
transaction or occurrence.
1. No diversity jurisdiction between B and C b/c both are from NY. Doesn’t’ invoke Fed Q,
so can never go to fed court by itself. The ask, if supplemental Jurisdiction covers it.
2. Yes covered by Supplemental jur. Every cross claim always meets supplemental
jurisdiction because every cross claim must arise from the same transaction or
occurrence and therefore meets the Gibbs test of falling under the same common
nucleus of operative fact and therefore is valid under supplemental jurisdiction.
3. Does it fall under 1367 exception? No because the exceptions only apply to plaintiffs.
And since this is raised by a defendant against another defendant, it doesn’t fall under
the exception and therefore may be brought.
 rd
V. Impleader; 3 party practice; FRCP 14:
i. If they start with a “c” counterclaim or crossclaim, then they are between existing parties.
ii. If starts with the letter “I” then we are joining someone new.
b. Must be a defending party joining someone new. That new someone new is a third party defendant (TPD).
c. 14(a)(1): TPD is brought in for one reason: is or may be liable to the defending party (i.e. defendant) for the
underlying claim between the plaintiff against the defendant. So D brings in another party to shift some or all of the
liability that the P brings against the D. usually boils down to indemnity or contribution. (like an insurance company,
or someone who owes contribution, like joint tort-feasors)
d. Hypo: Liza and Derek go out back and beat up Farahany. Liza and Farahany are joint tort-feasors. Farahany decides to
just sue Derek (she can do that if she wants) Derek can then bring in Liza through an impleader for contribution b/c
she is a joint tortfeasor.
e. Rule 14(a) creates two additional claims
i. When TPD sues P: 14(a)(2)(D): must arise from the same T/O as the underlying case. (ask whether it fits into
subject matter jurisdiction)
ii. When P sued TPD: 14(a)(3): When P sued TPD, the claim MUST arise from the same T/O as the underlying case.
(ask whether it fits into subject fact jurisdiction)
VI. FRCP 18: any party may join as many claims as they would like so long as it follows the rules
a. Joinder of Claims by Defendants and Co-Parties
i. Grumman Systems Support Corp. v. Data General Corp. (1988)
1. Facts: DG has computer program, sues Gru for copyright in MA ct. Gru sues DG in CA st. ct. DG removes to
DC and wants DC to dismiss, stay, or transfer to MA ct. b/c claim is a compulsory counterclaim under FRCP
13(a).
2. Rules:
a. FRCP 13(a): One may assert a counterclaim if the claim
i. (1) arises out of the same transaction or occurrence that is the subject matter of the opposing
party’s claim and
rd
ii. (2)does not require for its adjudication the presence of 3 parties of whom the court cannot
acquire jurisdiction.
b. Test: Whether the essential facts of the various claims are so logically connected that considerations
of judicial economy and fairness dictate that all the issues be resolved in one lawsuit. Factors: Only
logical nexus between the subject actions (not convenience, judicial discretion, or judicial economy)
3. App/ Holding: essential facts between the claim in CA and MA are logically connected and required in MA,
so dismiss w/o prejudice. Gru can file counterclaim in MA. (Reasoning: judicial economy +logical
relationship between the two claims)
b. Permissive Joinder of Parties: FRCP 20(a): Who MAY be joined in a case; tool for the Plaintiff; only way P can get
multiple parties into the case, can get more than 1 P and get more than one D.
i. Hypo: if 3 people get in cab, cab gets in accident, all three people MAY become co-Plaintiffs (don’t’ have to, all
three can always sue the cabby separately)
1. When P wants to join P or D or D wants to join D or TPD: Must meet 2 requirements: FRCP 20(a)(2)
a. Claims must arise from the same transaction or occurrence
b. Claims raises at least one question of law or fact common to all parties
c. Required Joinder of (Necessary) Parties FRCP 19; Q of who MUST be joined in the case?
i. Easy to spot. Have a P and a D, and there is an absentee (A). sometimes must force absentee into the case.
ii. 3 steps to attack Rule 19
1. Step 1: Is the absentee necessary/ required?
a. Necessary if meets any of three tests: in 19(a)(1)
i. 3 tests based on three policies
1. 19(a)(1)(a): absentee is necessary and if w/o her the court cannot accord complete
relief among the parties. If you can’t bring absentee then it will lead to multiple
litigation down the road. It addresses the issue of efficiency. (not a big deal)
2. 19(a)(1)(B)(1): the absentee’s interest may be harmed if she is not joined. Will absentee
be hurt in a practical way by a judgment?
3. 19(a)(1)(B)(2): met if the absentee’s interest may subject the defendant to the risk of
inconsistent obligations. Worried about the Defendant.
b. Joint-tortfeasors are NEVER necessary. Can just sue one tortfeasor if you want.
 iii. Hypo: I hold 1000 shares of stock in XYZ and its in my name. by stack claims that we bought it together and that
we own it jointly. Stack sues the corporation. I am the absentee. Stack sues for an order canceling my stock then
having it reissued in our joint name. In that case, I am necessary. But you still walk through all 3 test. #1: yes,
because court can’t accord complete relief w/o me. Also meets #2: I will be hurt if not joined because if Stack
wins, I will be hurt. #3: also met, if stack wins against corp then court will reissue the stocks in joint names. Then
I will sue the corp which puts the D at risk of multiple litigation. SO are necessary for 3 reasons. (better to explain
why they meet all three tests and not just one).
1. Step 2: Is joinder of the absentee feasible?
a. Focuses on 2 things
i. Personal jurisdiction and diversity: will be feasible if there is personal jurisdiction over the
absentee and bringing her in won’t mess up diversity.
ii. If joinder is feasible, court will bring required party
2. Step 3: when there is a required absentee but you can’t get her b/c either no personal jurisdiction, will
mess up diversity jurisdiction, or not subject to process: look at FRCP 19 (b).
3. Court must decide whether to proceed w/o the absentee or we dismiss the entire case
a. To determine whether to continue or dismiss, ct. must consider 4 factors:
i. 4 factors to consider (lots of discretion here) considering equity and good conscience.
1. Whether the judgment in the party’s absence would prejudice her or the existing parties
2. Whether the prejudice can be reduces in shaping the judgment
3. Whether a judgment in the party’s absence would be adequate; AND;
4. Whether the plaintiff will be deprived of an adequate remedy if the action is dismissed
th
a. 4 factor is most important: will never dismiss if P has no other forum i.e. state
court. If other forum available that will allow all required parties to be joined, ct
will dismiss
ii. If court decides to dismiss, motion 12(b)(7)
iv. Republic of the Philippians v. Pimentel (2008)
1. Facts: class action human rights suit v. Philli pres. $2 billion Ps. Pres fled. Froze Swiss assets to get
judgment. Ask Merrill Lynch to freeze too. They refuse and sue, file interpleader against Republic,
Commission, Arelma, and Ps. Rep +Com assert sov immunity.
2. Rules:
a. Rule 19: Required Party: One Must join if (1) can’t give relief w/o party, or (2) party’s absence will
impede the party’s ability to protect it’s interests, or leave existing party to substantial risk of
multiple obligations.
b. When a Required Party Can’t Join: Factors to determine whether to proceed or dismiss
i. (1)Extent to which a judgment rendered in the person’s absence might prejudice that person or
existing parties. Factors: Whether complete relief can be afforded in their absence (can’t
proceed w/o req sov nation b/c substantial prejudice that would occur)
ii. (2) extent to which any prejudice could be lessened by relief other than dismissal
iii. (3) whether a judgment rendered w/o absent party would be adequate. Adequate= public
stake social interest in efficient admin of justice + avoidance of multiple litigation
iv. (4) Whether P would have adequate remedy if action dismissed for nonjoinder. (P in this case is
Merrill Lynch and they are entitled to a timely verdict)
3. App/ Holding: Must dismiss b/c insufficient weight to sov status+ discount merits of their claim
VII. Class Actions: where a rep sues on behalf of the class. Can have more than one rep. and can have a D class or P class.
i. Rule 23(a) 4 prerequisite necessary requirements to have a class action:
1. (1) numerosity: class so numerous that joinder of all member is impracticable;40+ peeps, judicial economy,
nature of the action, location of prospective class members (bad if members live in several states)
2. (2)commonality: there are questions of law or fact common to the class; more than one material issue of
law or fact in common between all + ct. needn’t make individual determinations for each class member
(one type of law vs. 50 state law)
3. (3) typicality: named parties’ interests (rep P) is typical of the class; representatives must have the same
essential characteristics as those of other class members (lenient: just extend from same event or conduct
based on same legal theory)
 4. (4) Adequacy of representation: named rep for class (i.e. named P) will fairly and adequate representation
the interests of absent members of the class (also includes counsel. Ct. examine possible conflicts between
council and class, lawyers competence, lawyer’s financial resources, and prior CA experience.)
ii. 3 types of Class Actions: After met 4 requirements, CA must fall into one category
1. (1) Separate actions by class members would create a risk of inconsistent results or as a practical matter
would impair the interests of other absent members of the class
2. (2) For CA seeking injunctive or declaratory relief (i.e. desegregation)
3. (3) There are questions of fact or law common to members of the class that predominate over individual
issues and a class action is superior to the alternative methods of adjudication.
iii. Factors to consider for type (3): Predominance and Superiority
1. Predominance: the overall facts and law must predominate over the differences. Common issues must
predominate over the individual issues.
2. Superiority: class action as a superior alternative to individual suits or smaller CA
3. Individuality: Class member’s interest in individually controlling the prosecution or defense of separate
actions
4. Existence of track record: extent of litigation already started
5. Desirability/undesirability of having litigation in one particular forum
6. Manageability: difficulty in managing a CA in trial
iv. Notice for Type (3): (from Mullane) “the court must direct the class members the best notice that is practicable
under the circumstances, including individual notice to all members who can be identified through reasonable
effort.” (pg 113 of supplement)
v. Class Action Preclusion: Class actions often bind absent class members to any judgment
b. Eisen v. Carlisle & Jacquelin (1974)
i. Facts: Man suing for $70 brings Class Action for 9 million people against SEC Odd-lot business that overcharges
for stock trades.
ii. Rule 23(c)(2): ct required to direct CA members the best notice practicable under the circumstances, including
individual notice to all members who can be identified through reasonable effort.
iii. App/Holding: Individual notice to identifiable class member is an unambiguous requirement. Since Ps have
address of 2million members, must notify all of them. Also, P must pay all costs of notice unless fiduciary
relationship between P and D. (ct. can’t hold prelim inquiry into merits)
c. Attorney’s Fees: Ct has to step in on behalf of the class to make sure the lawyers are representing the clients
interests rather than their own interests
d. In re Bridgestone/Firestone Tires Prods Liability Litig. (2002)
i. Facts: Attempt to certify class action in Indiana for all people who used the tires. Under Indiana law, would use
the law of the forum where the injury occurred, so that would be 50 states. Suit also includes over 67 master tire
specs, and safe operation depends on differing circumstances.
ii. Rules:
1. FRCP 23(1), (b)(3): No class action is proper unless all litigants are governed by the same legal rules.
Otherwise the class cannot satisfy the commonality and superiority requirements
2. Personal injury claims are often poorly suited to CA since issues of causation, comparative fault, and
damages may need to be determined separately for each individual claimant.
3. Immature claims without an established track record likely fail “superiority” requirement.
iii. App/Holding: certification is inappropriate. It would be much to unmanageable and would fail Rule 23(b)(3)’s
requirement of superiority and predominance to conduct a lawsuit with (1) laws from 50 different jurisdictions
and (2) over 67 master tires specifications when each injury could be different depending on the circumstances.
It also wouldn’t be fair for those who were severely injured (since they will get less money than they deserve.)
So the class action would only be beneficial for those who suffered minor financial loss and not seriously injured.
e. In re Rhone-Poulenc Rorer Int’l Inc. (1995)
i. Facts: Hemophiliacs sue drug company in DC for negligence in taking due care to purge Hepatitis B from blood
solids and fortuitously also from HIV, and failure to screen people for HIV when it was discovered in 1980s. DC
judge certified bifurcated Class action. D filed petition of mandamus to rescind certification.
 ii. Rules:
1. 2 mandatory conditions for the grant of writ of mandamus
a. Challenged order will inflict irreparable harm. Test: petitioner must ordinarily demonstrate that
something about the order or its circumstances would makes an end-of-case appeal ineffectual or
leave legitimate interests unduly at risk.
b. The order must so far exceed the proper bounds of judicial discretion as to be legitimately
considered usurpative in character or in violation of a clear and indisputable legal right, or at least
patently erroneous. Test: whether DC judge's order can be fairly characterized as usurpative.
iii. App:
1. Ds fulfill element #1 (irreparable harm): b/c likely face blackmail settlements since track record in their
favor but don’t want to risk bankruptcy
2. Ds fulfill element #2 (judge exceeded bounds of discretion) 3 reasons, not independently sufficient but
cumulatively compelling
st
a. 1 , Class actions are usually for Ps with tiny claims making it impracticable to sue. Ct: Not the
situation here since each hemophiliac can sue for millions
nd
b. 2 , trying the case under an conglomerate negligence law is bad idea b/c not such thing
rd
c. 3 , bifurcation in this instance not allowed b/c different juries will examine the same issue
iv. Holding: Grant writ of Mandamus. DC judge exceeded discretion, so App Ct will decertify suit
f. Amchem Prods. Inc. v. Windsor (1996)
i. Facts: asbestos companies attempt to certify a class action suit just for settlement (for claims for all future
asbestos plaintiffs).
ii. Rules:
1. To have a class action, one must meet the 4 requirements: numerosity, commonality, typicality, and
adequacy of representation.
2. In addition, one must meet the predominance and superiority requirements although the manageability
requirement is lowered, the requirements for commonality, typicality, and adequacy of representation are
heightened.
iii. App: fails predominance requirement because the class member’s interests are not aligned (people with current
illnesses and exposure only Ps). Also fails FRCP 23(a)(4) the representative parties will nto firly and adequately
protect the interest of the class since their interests aren’t aligned and the settlement includes no adjustment
for inflation.
iv. Holding: Settlement should not be certified
g. Class Action Fairness Act (CAFA) look at 1332
i. Diversity Jurisdiction Reform: federal cts may exercise jurisdiction over class actions with an aggregate amount
in controversy of at least $5 million where only minimal diversity standards are satisfied.
ii. No jurisdiction over class actions primarily concentrated in one state
1. DC may choose to decline the exercise jurisdiction over class actions upon 2 conditions met:
a. Between 1/3 - 2/3 of all the proposed plaintiff class members are citizens of the state where the
action is originally filed
b. The primary defendants are also citizens of that forum state
2. Act REQUIRES DC to decline jurisdiction when over 2/3 of proposed P Class members are citizens of the
state where the action is originally filed and either
a. The primary defendants are also citizens of the original forum state; OR
b. At least one D from whom significant relief sought and who has allegedly engaged in conduct that
forms a significant basis for the class claims, is a citizen of the original forum state.
iii. CAFA jurisdiction doesn't apply: (1)Where primary Ds are states or state officials, (2)Total number of P is smaller
than 100; OR (3) suit involves traded securities and internal affairs of corps
iv. Mass Actions: individual lawsuits in which monetary relief claims of 100 or more persons are proposed to be
tried jointly on the ground that the plaintiff's claims involve common questions of law or fact. And it extends the
grant of minimal diversity to such proceedings.
1. However, each P must satisfy the ordinary jurisdictional amount of $75,000
 v. Act liberalizes standard of removal (so CA based on state law will be channeled into fed cts)
1. Ds can remove w/o consent of other Ds
2. Eliminated in-state D exception
3. No one year time limit that usually applies to diversity cases
4. D can remove at any time in the proceeding, if the case becomes removable
vi. Limits on Class Action settlement practices (apply to all CA in fed ct. but don’t' apply to state ct)
1. Requires written findings by the district court that the disputed practices will produce some benefit for the
class before they can be employed
2. Coupon settlements: requires court to authorize them only after a hearing to determine whether and
making a written finding that the settlement is fair, reasonable, and adequate for class members.
a. Lawyers paid: Only for contingency fee of coupons redeemed rather than awarded; OR paid only for
the amount of time class council reasonably expended working on the action.
3. Forbids outright practice of slanting settlement agreements in favor of local members of the class,
declaring closer geographic proximity to the court to be an illegitimate basis.
vii. Reporting Requirements
1. Each D must serve notice within 10 days of filing a proposed class action settlement upon the appropriate
state official of each state in which a class member resides and the appropriate federal official.
2. DC must wait at least 90 days following provision of this notice before giving final approval to any class
action settlement (so state officials can take action if they wish)
viii. Burden of Proof: defendants have the burden of proof to demonstrate that removal was unfounded when they
move for remand
ix. Determining Aggregate Amounts in P's complaint: when a CA P does inserts an addamnum clause and limits its
damages to less than $5 million, courts have deferred to the doctrine that the plaintiff is the master of her
complaint and have found that a defendant wishing to secure removal must prove to a legal certainty that the
amount in controversy actually exceeds the statutory threshold.
1. Freeman v. Blue Ridge: each P (5)asserted claim of 4.9 million to get away from CAFA. Ct determined that
since all claims were essentially the same, D could aggregate the 5 claims and CAFA would apply
x. Home State rule: If P's want to remand back to state court after being removed, they must demonstrate that
either 1/3 or 2/3 of the plaintiff class are citizens of the forum state. This can be extremely difficult if there are
over 10,000 Ps
xi. Mass Action Provision: allows Ds to remove state court actions deemed mass actions that are not class action
but have at least 100 plaintiffs and common questions of law or fact
VIII. Law Applied in Federal Court- Erie and Progeny
a. State Law in Federal Court
i. Rules of Decision Act, 28 U.S.C. § 1652 (pg 330 in Supplement)
1. “The laws of the several states, except where the Constitution or treaties of the US or Acts of Congress
otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the US in
cases where they apply.”
ii. Purpose: which laws apply to Federal Diversity Cases
iii. Swift v. Tyson (1842)
1. Facts: Taylor, NY citizen, signs mortgage to buy land. Note assigned to Swift, citizen of Maine, in return for
satisfaction of another debt owed to Swift. But sellers didn’t own the land, when note came due, Taylor
refused to pay Swift b/c of fraud. Question of whether swift is a bona fide purchaser.
2. PP/Issue: Swift filed diversity suit against Taylor in NY. Tyson wants NY law (which says that a person who
purchases a note for debt is NOT considered a bona fide purchaser, so Tyson doesn’t need to pay Swift
under the note), Swift wants general fed law (that says Swift is a bona fide purchaser of the note)
3. Holding: state judicial opinions are merely “evidence” of common law and do not constitute the laws of
the several states for the purposes of the Rules of Decision Act. Therefore, Fed cts are free to create their
own common law and NY judicial decisions on the meaning of a “bona fide purchaser” were not binding on
the federal courts.
 4. Reasoning: Decisions of state court are only interpretations of the existing common law but are not
themselves law. Only state statutes and established local customs are binding on fed ct. Interprets Rules of
Decision Act and determines that the “laws of the several states” means the “natural law” based on
general legal principles. Clearly the following are state laws: state statutes, construct of state statute,
rights and titles, long established customs of local law. What doesn’t constitute law are state court
decisions! So state common law doesn’t count as law!
5. Problems with Swift identified in Erie: (1) scholar discovered document that show Swift misinterpreted
the statute. (2) discrimination against in-state P or D since out of state P or D can choose either fed ct or
state ct. (3) don’t know if a contract is enforceable b/c depends on if go to fed or state ct. (4) incentive to
forum shop by moving to a different state or incorporating in a different state to get diversity jurisdiction
and more favorable law. (5) Federalism: cts create common law where Congress could not pass a statute.
This violates the allocation of power in the Constitution since congress supposed to create law, not judges
iv. Erie R. Co. v. Tompkins (1938)
1. Facts: Tompkins, PA citizen, hit by open door of Erie train walking parallel to train tracks on commonly used
footpath. PP: Tompkins sues Erie in NY for negligence (where Erie in incorporated)
a. Rule: “the laws of the several states” for purposes of Rules of Decision Act §1652=> not only
statutes but also Case law of the state are considered “law of the several states.” Abolishes
nebulous federal common law.
b. Twin aims of Erie:
i. (1) discouragement of forum shopping AND;
ii. (2) avoidance of inequitable administration of the laws (cit, non-cit; state/fed discrimination)
c. Issue: Whether fed ct is free to disregard state law and apply “general common law” as per Swift
2. Holding: there is no federal general common law. Federal courts have to apply state common law; when
applying state law you also apply state decisions.
3. Reasoning: No such thing as “general law” for fed cts. The only authority is the State, so the voice adopted
by the State as its own should utter the last word.
4. Notes:
a. Promotes greater horizontal forum shopping (between laws of different states)
b. After Erie, need to differentiate between substantive and procedural law. If substantive, must follow
state law, if purely procedural, can follow federal law.
b. The Scope of Erie: Which state laws?
i. Outcome Determination Test
1. Guaranty Trust Co. v. York (1945) (looking at outcome determination ex-post, it this late point in the suit,
rather than from Forum shopping perspective of P when initiating suit)
a. Facts: P files diversity suit in NY. D says NY stat of lims bar’s P’s claim. P says that in equity side of fed
cts, there is no strict stat of lims.
b. Outcome determination test: It is immaterial whether a law is substantive or procedural under Erie.
The outcome of the litigation should be substantially the same in state and fed ct. so the fed ct must
follow state “procedural” law when it would determine the outcome. Supported by due process
c. Rules:
i. State cts cannot provide recovery that is unavailable in state ct.
ii. Intent of Erie: insure that in all solely diversity jurisdiction cases, the outcome in fed ct and state
ct “should be substantially the same… as it would be if tried in state court.”
iii. Policy: for the same transaction, a suit by a non-resident in fed ct instead of state ct a block
away “should not lead to a substantially different result.”
iv. The source of substantive rights enforced by fed ct under diversity jurisdiction is the law of the
States.
d. App/Holding: Must follow NY stat of lims since outcome in Fed ct and State ct should not lead to a
substantially different result ex post To follow rules for equity side of fed ct would go against Erie.
e. Broadens scope of Erie to include rule that fed cts must follow state stat of lims
ii. Whether to Apply State or Federal Rules
 1. Byrd v. Blue Ridge Rural Elec. Cooperative, Inc (1958)
a. Facts: P files diversity suit in SC. Issue is whether to follow SC custom of allowing judge to decide Qs
of fact on remand (on issues of immunity) or to allow jury trial on remand (fed law). SC courts do not
articulate a reason or rationale for why they have this custom.
b. Rules:
th
i. 7 Amendment: “The right of trial by jury shall be preserved”
ii. 2 prong test: to determine whether to follow state rule or not
1. Is the rule a state created right or obligation by state court so that its application in fed
ct is required?
a. Yes, then see part 2, No, then fed ct should apply fed law
b. App: No, decisions give no reason for why they select the judge rather than the
jury. Seems to be custom rather than law.
2. Would applying that state rule undermine a strong federal interest?
a. Yes, will undermine fed interest apply fed law
b. No, no strong fed interest and articulated state interest apply state law
c. App: Yes, jury function is essential and blocking that right does undermine a
strong federal interest.
iii. Outcome Ambiguous: since there isn’t even a strong possibility that a substantially different
result would occur if applied SC rule and judge decided or stayed with fed principle of jury.
Therefore, doesn’t go against Guaranty Trust substantial difference test.
c. Holding: judge/jury q isn’t outcome determinative, its outcome ambiguous. After weighing state and
fed interest found that there was an unarticulated state interest and high fed interest in protecting
the right to a jury trial. Plus, allowing for a jury trial in this case does not affect a state created right
or obligation. Those who choose fed ct should get fed protections. So, remand to jury rather than
judge to determine Q of fact of whether immunity applies due to Worker’s Compensation Act in SC.
d. Narrows Erie so that fed ct can decide not to strictly follow state ct procedure if the rule is not
strong obligation of state ct, which requires fed ct to follow and rule undermines strong fed interest
like the right to a jury trial.
iii. The Impact of the FRCP
1. Notes on Rules Enabling Act
a. Rules Enabling Act of 1934, 28 U.S.C. 2072 (pg. 343)
i. (a) The Supreme Court has the power to prescribe general rules of practice and procedure and
rules of evidence for cases in the US DC and courts of appeals
1. (Judiciary can create FRCP)
ii. (b) FRCP rules shall not abridge, enlarge, or modify any substantive right. All laws in conflict with
FRCP rule shall be of no further force after FRCP rule takes effect
1. (last sentence= supersession clause, so FRCP overrules all conflicting law)
b. Notes: Rules are subject to congressional veto, Rules usually pass through Supreme Ct stage but
sometimes justices disapprove b/c they see the creation of the rule as equivalent to passing
legislation which is the job of Congress as approved by President (separation of power argument)
c. Criticism: lack of public participation, little oversight, supreme court is rule-maker and judge.
i. 28 USC 2073 (c): all FRCP meetings are open to the public unless they determine it is against
public interest to let them stay.
ii. 28 USC 2073 (d): requires all FRCP committees to provide full explanations
2. Hanna v. Plumer (1965)
a. Facts: car accident. P serves process via FRCP 4(e)(2) (leave at dwelling w/ adult) but MA state law
requires personal in-hand service. P says FRCP should apply to diversity cases and D says under Erie
and York, State law must apply, which bars the claim.
b. Rules:
i. Track One: Is the fed law broad enough to cover the state law?
1. Is the fed law valid under Rules Enabling Act (presumed)?
 a. App: prescribing notice procedure related to “practice and procedure of DC”
b. If no conflicting state procedure, FRCP clearly applies
ii. Track 2: Unguided Erie analysis
1. Apply Outcome determinative test keeping in mind the Twin Aims of Erie
a. Twin Aims
i. Discouraging Forum Shopping
ii. Avoidance of Inequitable administration of laws (inequities between citizens,
non citizens, state and fed)
iii. Note: federal courts sitting in diversity cases, when deciding Qs of “substantive” law are bound
by state court decisions as well as state statutes
c. App: Track 1: When the FRCP and state law procedure “directly” clash like here, the FRCP wins if it is
about procedure and it is solely a diversity case. Track 2: service of process isn't something that
people forum shop for and doesn't create inequitable admin of law issues, so not you ask if
something is outcome determinative EX-ANTE! You ask at the time the person is deciding which
court to go to. It would have just altered the way he served notice, so its not substantive enough.
Therefore, apply fed law.
d. Holding: FRCP 4 applies to all diversity suits rather than any state laws about notice procedure
iv. Track Assignment: Determining the Existence of a pertinent Federal Law: Stewart Organization Inc. v. Ricoh Corp
(1988)
1. Facts: agreement between dealership and manufacturer has forum selection clause that says Manhattan
courts have exclusive jurisdiction over any controversy in connection with the agreement. Relations sour.
Manufacturer sues in Alabama district court. Dealership moves to transfer as per the agreement to
Manhattan(1404) or dismiss under improper venue (1406.) TC: denied motion b/c Alabama law controls
and Alabama looks unfavorably upon contractual forum clauses. Interlocutory appeal to appellate ct:
reversed saying questions of venue in diversity actions are governed by federal law and the party’s forum
clauses are enforceable as a matter of federal law. Therefore, reversed and remand to transfer to
Manhattan. Manufacturer appeals for rehearing en banc, ct affirms b/c venue is a matter of fed law and
choice of forum clause is enforceable under fed law.
2. Rules:
a. When is the fed statute sufficiently broad to apply? If you look at it broadly it will trump state law,
but if you look at it narrowly, then it will no apply and state law would work. Stewart intentionally
sues in AL which doesn't like forum selection clauses. Ricoh files a motion to transfer to NY or to
dismiss.
b. Does 1404 preempt AL state law or can you incorporate AL law in 1404?
c. Majority:
i. If fed statute is broad enough to control the issue?
1. Forum selection clause would be a factor in considering 1404
2. Forum selection clause is not dispositive and is one of many factors in the analysis
3. If state law creates a dispositive analysis or substantially changes a factor than the fed
and state law are in conflict. If it could alter the way a federal law would evaluate the
1404 analysis, you would apply 1404.
d. Whether the statute is sufficiently broad to control the issue before the court?
i. Straightforward statutory interpretation to determine if the statute covers the point in dispute.
ii. inquiry into whether there is a “direct collision” between state and federal law is not meant to
mandate that federal law and state law be perfectly coextensive and equally applicable to the
issue at hand. “Direct collision”= requirement that federal statute be sufficiently broad to cover
the point in dispute.
iii. Rationale: it would make no sense for the supremacy of federal law to wane precisely because
there is no state law directly on point.
1. If fed statute covers point in dispute see 2, if not, follow state law
 iv. App: 1404(a) does cover the issue of whether to transfer the case to a court in Manhattan in
accordance with the forum-selection clause. The forum selection clause should receive neither
dispositive consideration nor no consideration but rather the consideration for which Congress
provided in 1404(a). Both statutes collide, and 1404 wins.
e. Whether the statute represents a valid exercise of Congress’s authority under the Constitution.
i. “if congress intended to reach the issue before the District Court, and if it enacted its intention
into law in a manner that abides with the constitution, that is the end of the matter.” “Federal
courts are bound to apply rules enacted by Congress with respect to matters over which is has
legislative power.”
ii. App: 1404 is a procedural rule. As a procedural rule, it falls comfortably within Congress’s
powers under art III as augmented by the Necessary
3. Holding: Affirm. Since the fed statute is sufficiently broad to control the issue and the statute is a valid
exercise of Congress’s authority under the constitution, Federal law, specifically 1404(a) governs the
District Court’s decision whether to give effect to the parties forum selection clause and transfer this case
to a court in Manhattan
v. Gasperini v. Center for Humanities (1996)
1. Facts: Center lost 300 of journalist’s original transparencies. Suit in Fed ct for diversity. NY state law applies
“deviates materially” standard. Fed law apply “shocked conscience” standard. Which wins?
2. Overview of Rules
a. Erie: Under the Erie Doctrine, federal cts sitting in diversity apply state substantive law and federal
procedural law
b. Hanna; Rule for FRCP: it is settled that if the Rule in point is consonant with the Rules Enabling Act,
SS2072, and the Constitution, the Federal Rule applies regardless of contrary state law.
c. Guaranty: Outcome Determination Test: Does it significantly affect the result of a litigation for a
federal court to disregard a law of a state that would be controlling in an action upon the same claim
by the same parties in a State Ct?
i. Rationale: When fed ct exercising solely diversity jurisdiction, the outcome in litigation in fed ct
should be substantially the same as in state court in the same state.
d. Hanna qualifies Outcome Determination test: The outcome determination test must not be applied
mechanically to sweep in all manner of variations; instead, its application must be guided by the
twin aims of the Erie rule: discouragement of forum shopping and avoidance of inequitable
administration of the laws
3. Track 1:
st
a. 1 Q: Is the Fed law valid per the Rules Enabling Act and Constitutional?
i. App: all FRCP and fed law assumed to be constitutional for the class
nd
b. 2 Q: Is the fed law Broad enough to cover the issue? (Direct Collision?) construed narrowly. Fed
law must speak to the precise question at issue
i. If the fed law bears on one of the factors of disposing of the issue, then fed law overrules state
law. (Byrd)
th
ii. App: 7 amendment: nothing in it precludes appellate review of a trial judge’s decision to set
aside a jury verdict
iii. FRCP 59(a):court may grant new trial after a jury trial has been granted in a suit in fed ct.
1. App: 59 speaks to the grounds but not the standard for how to evaluate the grounds.
2. Con: no direct collision. Construed 59 narrowly to try to make state and fed law fit side
by side. So goes to Track 2: unguided Erie analysis
4. Track 2: Unguided Erie Analysis
a. Use Hanna test to see if Erie is implicated. (pg 498)
i. Hanna: Outcome Determinative Test in view of the twin aims of Erie (1. Forum shopping and 2.
Avoidance of inequitable administration of laws)
1. Yes outcome determinative/Erie implicated next step (Byrd analysis)
2. Not outcome determinative/Erie not implicated apply fed law (see Hanna dicta)
 b. Byrd: is there an overriding federal interest justifying the application of federal law? Weigh state and
fed interests) (state interest should be articulated)
i. Yes  apply fed law
rd
ii. No Ask 3 Q, Can state law be accommodated? (side by side w/ fed law?) if no, state law
1. App: Both fed and state interest are high
2. Fed 1.interest in autonomous fed procedure 2. Duty balance between judge and jury
3. State purposefully enacted state law in effort to constrain excessive jury verdicts
c. Can state law be accommodated?
i. Can’t accommodate, is either/or situation like stat of lims apply fed law (supremacy clause)
ii. Can accommodate, then accommodate state law as much as possible
5. App/Holding: Yes. Statute is part procedural and part substantive. Procedural is the appellate review part,
so Fed law of “abuse of discretion” standard for appellate review remains. But, applying ”deviates
materially” standard rather than “shocks the Conscience” standard is substantive so the NY law “deviates
materially standard applies in Fed ct sitting in diversity. Therefore, fed appellate court when applying
“abuse of discretion” standard to check that the district court correctly applied the “deviates” materially
standard. (centaur half-state, half-fed law, Swift issue of not existing law) (Maj. Prevents forum shopping)
a. Potential issue: Ps will be drawn to Fed ct. to avoid state ct de novo review (but better than Scalia)
6. Majority rationale for amalgam: Thinks fed law should accommodate state law and allow the district court
to apply the "deviates materially" standard because it regards this as a way of giving effect to the State's
purposes without disrupting the federal system.
7. Majority rationale for why substantive: the objective of the NY damages provision is manifestly
substantive since it operates to control how much a plaintiff can be awarded by tightening the range of
tolerable awards. Although less readily classified as substantive than a statutory cap on damages, it
nonetheless was designed to provide an analogous control by making a new trial mandatory when the
award deviates materially from what is reasonable.

VI. Ongoing Themes for Jurisdiction

a. Interpreting a procedural provision based on its function
i. What is the function of a rule in litigation and how should this bear on our construction of it
b. Rule-like regimes and standards
c. When legal fiction accumulates
i. Signals the law will soon change, especially if fiction is easily recognized
d. Federalism (Horizontal and Vertical)
i. Protects states from bringing in more than they should (horizontal)(personal jurisdiction)
ii. What kind of lawsuits get in Federal Courts
iii. Federal Courts incorporating state rules
1. When a federal court is sitting in diversity, it should look a lot like state court
e. Statutory Authorization and Constitutional Permissibility
i. Personal Jurisdiction, Service, Subject Matter Jurisdiction
f. How language is interpreted in Constitutional and statute
i. Constitutional language interpreted more broadly
1. Well-pleaded complaint rule does not apply to Article III
ii. Differences in Interpretation
g. The Forum in Which You Litigate Matters