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1) Subject Matter Jurisdiction a) State courts are courts of general subject matter jurisdiction, federal courts are courts of limited subject matter jurisdiction. In order for a federal court to have subject matter jurisdiction over a case it must be i) Authorized by congress (1) 1331 authorizes jurisdiction in cases that arise under the laws or constitution of the U.S. (a) According to justice Holmes, for the purposes of 1331 jurisdiction a suit arises under the law that creates the cause of action. (i) it is not enough that the plaintiff alleges some anticipated defense to his cause of action, and asserts that the defense is invalidated by some provision of the constitution. See Mottley pp. 92. 1. This can be stated as the well pleaded complaint rule. A claim arises under federal law if the federal issue appears in the face of the well-pleaded complaint, that is, if a proper complaint, limited to the allegations necessary to state a proper claim for relief, relies on federal law. (It is important to note that while 1331 has been construed narrowly; under the constitution the courts could broaden 1331 to encompass complaints like those in Mottley). a. As long as the complaint claims relief under a federal statute or constitutional provision, 1331 authorizes jurisdiction, even if it is arguable whether or not the particular provision under which relief is claimed actually does create a cause of action. See Bell (upholding exercise of 1331 jurisdiction when plaintiff claimed money damages for violation of fourth amendment rights even though fourth amendment does not authorize suits for money damages). (b) 1331 jurisdiction can sometimes be proper even when federal law does not create the cause of action if the plaintiffs right to relief necessarily depends on the resolution of a substantial question of federal law. (i) Smith v. Kansas City Title and Trust Co. held that a complaint by a shareholder alleging that the trust exceeded its charter (that it could only invest in valid federal securities) when it invested in federal bonds that the plaintiff alleged were issued in violation of the constitution fell under 1331 jurisdiction. (ii) But see Merrell Dow held that plaintiffs suing pharmaceutical company for negligence under the theory that its violation of the FDCA constituted per se negligence did not fall under 1331 jurisdiction because this would be contrary to congresses intent to confine federal question jurisdiction to claims involving important federal questions. (iii) Grable v. Darue Upheld federal question jurisdiction in a quiet title action when plaintiff alleged that IRSs seizure of its property (and subsequent sale of the property to the defendant) was illegal pursuant to the tax code because it was not provided the proper notice under federal law. Distinguished from Merrell Dow 1. More serious federal issue in Grable 2. Federal courts would be clogged if actions like that in Merrell Dow were allowed to go forward. 3. Negligence claims are generally reserved to states. (c) An exception to Grable jurisdiction under 1331 (i) In Shoshone, the court held an action created by a federal statute that provided that the cases should be decided under local mining customs and laws did not fall under 1331 arising under jurisdiction. (this is the converse of Merrell Dow). (See Glannon pp. 116 seems to contradict Shoshone). (d) A Paradox (not really) Involving 1331 Federal Question Jurisdiction (i) Mottley was dismissed from the federal district court for lack of 1331 jurisdiction, but it was later decided on appeal from the Kentucky Court of Appeals by the USSC. This is possible because, though Federal district courts rely on Congressional authority for their subject matter jurisdiction, the USSC gets its appellate jurisdiction directly from article III of the constitution (subject to regulation and restriction by congress), and the relevant statute governing the courts appellate jurisdiction (28 USC 1257) is much broader than 1331 and does not restrict the USSC from hearing cases involving defenses asserted under federal law asserted by defendants (See Osborne (holding that the constitutional grand of arising under jurisdiction extends to any case with a federal ingredient) . In

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this way, the grant of appellate jurisdiction to the Supreme Court in the constitution is self-executing (i.e. it does not require an additional statutory grant of jurisdiction from congress, although congress may by statute restrict such jurisdiction). (2) 1332 authorizes federal courts to exercise jurisdiction in diversity cases. (a) Individual citizenship is decided by using domicile as a proxy for citizenship. Domicile is defined as the last place a person resided with the intent to remain indefinitely. (See Gordon v. Steele (ruling that a student in Idaho but originally from Pennsylvania was a domiciliary of Idaho when she had no plans to return to Pennsylvania but also did not know whether she would stay in Idaho after she finished school) But See Mas v. Perry (ruling that the wife of a grad student in Louisiana was still a domiciliary of Mississippi because she did not plan on staying in Louisiana indefinitely) (i) An alien is not a citizen of the state he/she is domiciled in because he/she is a citizen of another country. (Although if the alien is a legal permanent resident he/she is a citizen of the state of domicile). (ii) A US Citizen who is a domiciliary of a different country cannot be sued in diversity because he/she is not the citizen of any state. (iii) Domestic relations generally do not fall under diversity jurisdiction. (iv) Domicile for diversity purposes is determined at the date on which the litigation is filed. (b) 1332 defines corporate citizenship as the place of incorporation and the principal place of business. (i) Hertz P.60 defines principal place of business as the place where the corporations high level officers direct, control, and coordinate the corporations activities. Also called the nerve center. Usually found at the corporate headquarters. 1. Before the enactment of 1332(c) including principal place of business in the definition of citizenship for corporations, corporate litigants were considered citizens only of their places of incorporation. (ii) Limited partnerships and other business arrangements are treated as individuals they are citizens of every state in which the partners or other members are citizens. (c) The amount in controversy requirement (i) Amount in controversy must be >$75,000. St. Paul Mercury held that a good faith claim for an amount exceeding the requirement unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount. (See Diefenthal p.74 holding that a claim for $50,000 dollars (the requirement was $10,000 at the time) for embarrassment and humiliation when an airline prohibited them from smoking does not withstand this easy to a legal certainty test). 1. A single plaintiff may aggregate claims to reach this amount in controversy (though not claims against separate defendants). Co-plaintiffs may not aggregate their claims to reach the amount. ii) Authorized by the constitution (1) Arising under jurisdiction under the constitution is broader than that granted by 1331 (even though they use the same language). Under Osborne, the constitution allows congress to grant arising under jurisdiction in any case in which one of the partys injects a substantial federal ingredient. (2) Diversity jurisdiction under the constitution does not require complete diversity. (Strawbridge). Congress has at times authorized courts to hear minimally diverse cases. 2) Personal Jurisdiction Personal Jurisdiction is based on the 14th amendments guarantee that the state cannot take life/liberty/property without due process of law. Personal jurisdiction concerns a courts ability to bind a certain party with a judgment in light of that guarantee. Like Subject matter jurisdiction, a courts personal jurisdiction is limited by the constitution and relevant statutes a) Statutory grant of personal jurisdiction i) Each state has its own long arm statute governing to what extent its courts can exercise personal jurisdiction over parties. Many of these states grant personal jurisdiction to the full extent allowed by the constitution. ii) Federal courts are granted the same reach in personal jurisdiction as the courts of the state in which they sit.

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b) Constitutional limits on personal jurisdiction i) History and Doctrine (1) Pennoyer v. Neff Lawyer sued Neff for unpaid legal fees and published notice of the lawsuit in Oregon. Neff failed to show up and the Lawyer won a default judgment (which he got enforced by forcing the sale of Neffs land in Oregon), later selling the land to Pennoyer. Neff returned and sued to quiet title on his land, arguing that the court in the first action had erred in exercising personal jurisdiction without in-state service of process. Pennoyer held that in order for a state court to exercise in personam jurisdiction over a party, that party must receive service of process in-state. In order to exercise in-rem jurisdiction over the land in this case, the lawyer in the original action must have attached the land before publishing the notice. This holding was not based on the 14th amendment rather it was reached by applying concepts of national sovereignty to the states. Under this analysis, a court within the border of one state had no power to bind partys in the border of another state. (2) Hess Out of state defendant was driving on the roads in Massachusetts when he got into a collision with the plaintiff. Massachusetts had a statute providing that anyone using the roads in the state must consent to receive service of process in state through an agent (the registrar). The court held that due to the states interest in regulating motor vehicles, such implied consent was constitutional under the fourteenth amendment and therefore the court could exercise jurisdiction over the defendant. (3) Milliken (a) Courts in a state could exercise personal jurisdiction over a domiciliary (based on the fiction that someone domiciled in the state is present there). (4) International Shoe p. 162. (a) Washington state had a statute by which process could be served on an employer if found within the state and if the employer is not found within the state then by mailing through registered mail to the employers last known address. The defendant here failed to make contributions to the states unemployment scheme. Defendant tried to avoid paying by taking actions that it thought might allow it to conduct business in the state by not actually having a presence within the state. The court reshaped much of the earlier personal jurisdiction jurisprudence by doing away with the fiction that a defendant must be present in a state in order for a court to exercise personal jurisdiction over it. The court ruled that a corporate defendant could be subject to personal jurisdiction under 2 separate theories. The defendant in Shoe had continuous and systematic contacts within the state that made it reasonable to subject it to suit there. The exercise of that privilege of doing business in a forum gives rise to obligations to defend suits there. (i) Specific Jurisdiction 1. McGee Defendant was an out of state insurance company that insured a California plaintiff. Factors cited in favor of exercising personal jurisdiction were mailing a reinsurance contract to the plaintiff in the state, receiving premiums from the plaintiff in the state, and the insured was a resident of California. Court held these factors were enough to exercise personal jurisdiction, but did not make clear whether contacts were necessary. Hanson later made clear that minimum contacts were in fact necessary. 2. WWVW P. 183 Plaintiff sued a New York dealership for selling him a defective car that was used in Oklahoma. Plaintiff sued in Oklahoma. Court held that defendant did not have the requisite minimum contacts with the forum state. purposeful availment and not foreseeability is the relevant test to apply for minimum contacts. In order to be under the courts jurisdiction, a defendant must have minimum contacts and the claim must have arisen out of those contacts (minimum contacts were found in Keeton where a plaintiff sued the publisher of a libelous article (that appeared in a national magazine) in New Hampshire) (See Also Calder p.200). The court also

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required the exercise of personal jurisdiction to be reasonable, listing relevant factors. a. Burden on the defendant b. Interest of the forum in deciding the case c. Plaintiffs interest in obtaining convenient and effective relief d. Judicial efficiency e. Interest of the states in furthering certain social policies 3. Burger King p. 202 Burger King sued a michigan defendant in Florida court. Court rules that a contract with an out of state party is itself not sufficient to establish minimum contacts. The court looked to surrounding negotiations and performance of the contract and decided that these were sufficient grounds on which to base personal jurisdiction. (The choice of law provision in the contract was also deemed a relevant factor). 4. Asahi p.212 The question was whether a party must have intent or purpose that its products be sold in a forum, or whether stream of commerce is enough. Court does not resolve stream of commerce controversy the only part of SOCs opinion that gained a binding majority was her analysis of reasonableness. a. The courts reasonableness analysis took into account the severe burden of forcing a foreign defendant to defend itself in American court along with the other factors listed in world wide volkswagon 5. What does it mean to say the claim arises out of a contact? a. Evidence test if the contact provides evidence for one or more elements of the claim b. But For test if the claim would not have arisen but for the defendants contact with the forum. (ii) General Jurisdiction 1. Continuous and systematic contacts (Helicopteros p.245 rejected jurisdiction over a defendant whose contacts includeded meeting in Houston, purchase of helicopters in texas, sending pilots to train in texas, and sent its management and maintenance personnel to visit texas for consultation: such unilateral activity of another party. . . is not an appropriate consideration when determining whether a defendant has sufficient contacts). See other cases on the bottom of page 257 for more examples of continuous and systematic contacts litigation. 2. Domicile (Milliken) 3. Consent (Hess) (many jurisdictions require companies doing business in the forum to appoint an agent for receiving service and consent to PJ) 4. Presence (Burnham) (Does not apply to corporations whose officers happen to be in a particular state) (also emphasized the voluntary nature of the defendants presence in the forum coaxing someone into a forum through fraud or duress cannot subject them to tag jurisdiction). 5. Principal Place of Business (Perkins) 6. Place of incorporation (already valid under the Pennoyer regime under the fiction that a corporation was present in its place of incorporation) (iii) Other ways of getting jurisdiction 1. When a plaintiff files a claim, he consents to jurisdiction over counterclaims. 2. Waiver (see pleading) 3) Removal Jurisdiction a) 1441(a) except as otherwise provided by acts of congress, any civil action brought in a state court of which the district courts have original jurisdiction, may be removed by the defendant or the defendants, to the district court for the district and division embracing the place where such action is pending. i) Avitts (1) Though the plaintiffs complaint stated that it is expected that the evidence will reflect that the damages caused by the defendants are in violation of not only state law but also federal law and on that basis the district court granted removal. The defendants made a 12(e) motion for a more

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definite statement on the question of which federal law was violated, but the district court denied the motion. In subsequent amended pleadings, the plaintiff dropped all reference to a violation of federal law. Because the plaintiffs cause of action sought relief only under state law, there was no subject matter jurisdiction and therefore removal was improper. (in Avitts, the same party who originally moved for removal also brought the motion seeking dismissal for lack of subject matter jurisdiction. (a) Even when a plaintiff subsequently amends a complaint to prevent removal, the case, once removed, can proceed on only state causes of action if removal was proper at the time that the removal was granted. (2) See 1446 and 1447 for removal and post-removal procedures. 4) Venue The venue requirement exists to ensure that a case is litigated in a court that is conveniently located and has some connection to the lawsuit. Venue, unlike personal and subject matter jurisdiction, is not mandated by the constitution. a) 28 USC 1391 (paraphrase) (a) a civil action founded only on diversity may, except as otherwise provided, only be brought in (1) a judicial district where any defendant resides, if all defendants reside in the same state, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred or a substantial part of the property subject to the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought. (b) a civil action wherein jurisdiction is not founded solely on diversity may (1) , (2) , or (3) a judicial district in which any defendant may be found, . i) Reside in section 1 has the same meaning as citizen in the context of diversity. (c) a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. In a state with more than 1 district and in which a corporation is subject to personal jurisdiction at the time an action is commenced, such corporation shall be deemed to reside in any district in that state within which its contacts would be sufficient to subject it to personal jurisdiction if that district were a separate state, and, if there is no such district, the district in which it has the most significant contacts. (1) Non-corporate entities are treated as corporations for the purpose of venue. ii) Substantial part of the events or omissions (1) Uffner p. 365 1st circuit (a) Uffner sued a French insurance company for bad faith denial of an insurance claim after his boat sank approximately one mile off the coast of Puerto Rico. The insurance company moved to dismiss for improper venue (among other things), arguing that the denial of the insurance claim occurred in France. Court applied the historical predicate test and decided that because the sinking of the ship in Puerto Rico led to the suit, it was a substantial part of the events or omissions giving rise to the claim. The court also found it significant that the defendant said it would be fine with virgin islands as a proper forum, so it would not be inconvenienced by litigating so far from France. (i) In reversing the lower courts dismissal for lack of personal jurisdiction (a defense which the defendant never raised), the court noted that a court could not litigate personal jurisdiction sua sponte and the defendant had waived personal jurisdiction by failing to plead it in its first responsive pleading. 1. Even when a party waives a personal jurisdiction objection it can still object to venue. (ii) There is a circuit split. The 8th circuit only looks at the acts of the defendant to decide proper venue, rather than the 1 st circuits more holistic test used in Uffner. (iii) The removal statute 28 USC 1441(a) provides that a case removed from state court must be removed to the federal district court that covers the geographic area of the state court (although the case can be transferred after removal). b) Statutory transfers and dismissals in federal court. i) 1406 (a) the district court where a case was filed with improper venue shall dismiss, or transfer to any district where it could have been brought if it is in the interest of justice (1) A party can waive or consent to venue

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ii) 1404 (a) For the convenience of parties ad witnesses, in the interest of justice, a district court may transfer to any other district where it may have been brought (1) Macmunn p. 379 (a) Plaintiff removed an action to federal court of the district of Columbia against defendant drug company seeking relief under various tort and contract theories. The relevant portion of events took place in Massachusetts. The court ruled in favor of the defendant and transfer to Massachusetts based on the following factors. (i) Private interest factors 1. Plaintiffs choice of forum 2. Defendants choice of forum 3. Whether the claim arose elsewhere 4. The convenience of the parties 5. The convenience of the witnesses 6. The ease of access to sources of proof. (ii) Public interest factors 1. The transferees familiarity with the governing laws 2. The relative congestion of the courts 3. Local interest in deciding local controversies at home iii) Forum non conveniens (common law dismissals) (1) Piper v. Reyno. P.385 (a) Plaintiffs sued defendant plane manufacturer for wrongful death after the decedents dies in a crash in Scotland. The plaintiff did not know the decedents, she was a lawyers secretary appointed administratrix. Plaintiff admits that she brought the suit in the US because US law is more favorable. Defendants moved to dismiss on the basis of forum non conveniens. where an alternative forum has jurisdiction . . . and where trial in the chosen forum would establish oppressiveness and vexation to a defendant . . . out of all proportion to plaintiffs convenience or when the chosen forum is inappropriate because of considerations affecting the courts own administrative and legal problems, the court may dismiss. The courts have been less solicitous when the plaintiff is not an american. . . and particularly when the foreign citizens seek to benefit from the more liberal tort rules. The court looked to several public and private interest factors (i) Private interest factors 1. Relative ease of access to sources of proof 2. Availability and cost of compulsory process for the attendance of unwilling parties 3. Cost of attendance of willing witnesses 4. Possibility of view of premises if appropriate to the action 5. All other problems making a trial easy, expeditious, and inexpensive (ii) Public interest factors 1. Court congestion 2. Local interest in having local controversies decided at home 3. Interest in trying a diversity case in the forum whose laws will apply 4. Avoidance of conflicts of laws problems 5. Avoidance of the application of foreign law 6. Unfairness of burdening citizens in an unrelated forum with jury duty (iii) Dismissal can be appropriate even when the other more appropriate jurisdiction has less favorable law to the plaintiff (iv) Districts courts dismissal opinions are due abuse of discretion deference. (v) FNC dismissals can be conditioned on a party consenting to personal jurisdiction (vi) Moving party has the burden of showing that another forum is available. (vii) FNC factors are similar to 1404 factors, but they must weigh more heavily than a 1404 analysis to favor FNC. (viii) Courts will not grant a FNC motion when the other forum offers a clearly unsatisfactory remedy. 5) Notice Notice, like Personal Jurisdiction, is required by the due process clause of the constitution. a) Mullane p. 321

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Beneficiary of a common trust sued over the required triennial judicial settling of accounts, a proceeding that would certify the trustees use of the funds as legal and that would bar the beneficiaries from individually challenging the use of the funds over that period. The plaintiff contended that the notice required by the statute setting up these trusts and requiring the judicial settling of accounts was not adequate under the due process clause of the constitution and that therefore the settlement action could not exercise jurisdiction over parties not properly served. The beneficiaries were not all domiciliaries of New York. The statute required notice consisting only of publication in a newspaper, and that is all the notice the bank/trustee provided. At the first investment in the common trust fund, the bank/trustee had mailed to all people whose addresses it knew a notice notifying them of their share and of the a copy of the provision of the act relating to the judicial settling of accounts. Upon filing the petition for the settlement action, the trustee was required to appoint a special guardian attorney to represent all beneficiaries in the action. Plaintiff made a special appearance to challenge personal jurisdiction. The court refused to distinguished between in rem and in personam actions in applying proper notice requirements under the 14 th amendment. Is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected, or , where conditions do not reasonably permit such notice, that the form chosen is not substantially less likely to bring home notice than other of the feasible and customary substitutes. Notice by publication is generally disfavored unless no better form of notice is feasible this applies to those whose addresses could not be ascertained by the trustee. The bank was also not required to try to figure out all of the beneficiaries whose interest may be future or conjectural or for some other reason do not come to the knowledge of the trustee in the regular course of business. Those whose addresses were known to the trustee must be sent notice by mail, though they need not receive personal service because such an inefficient and expensive method of service would interfere with the administration of the fund. When there are many beneficiaries whose interest in the proceeding are presumably aligned, service by mail can be sufficient because even if some never get actual notice, those that do are adequately positioned to represent the interest of those that do not. (The court did not require the bank to conduct an investigation to find all the names and addresses that it was possible to find). b) Rules governing service i) Service must be of the complaint and the summons pursuant to rule 4(c)(1). ii) Service can be made by any over 18 not a party to the case. iii) Service must be made within 120 days of filing the complaint (court has discretion to extend this period) iv) Service on individuals can be made by (4e) (1) In hand service (2) Leaving at the dwelling or usual place of abode with someone of suitable age and discretion who resides there. (3) Delivery to an agent authorized by appointment or law to receive service (4) Follow the rules of service governing the state in which service is made c) Methods of service to corporations, partnerships, or associations (4h) i) Service to an officer, managing agent, or general agent ii) Service to an agent authorized by appointment or law to receive service iii) Service under the rule governing the state in which service is made. d) Methods of service in a foreign country (4f) i) As provided by international agreements ii) Using the methods authorized in the country in which service is made iii) By personal delivery unless prohibited by the country iv) By form of mail requiring signature upon receipt (unless prohibited by the country). v) By seeking instructions from an appropriate authority in the country vi) By seeking a court order for an alternate form of service. e) Waiver of Service i) Under rule 4d, a plaintiff can send by mail the complaint, summons, and waiver form. If defendant does not return the signed waiver, he/she must pay for the costs of service. The rule entices defendants to waive service by giving them 60 days to respond to the complaint rather than the usual 21. i)

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(1) A Trap service is effective only upon the filing of the waiver, so a plaintiff sending a waiver form must be careful that the statute of limitations on the claim does not run by the time the waiver is returned. In situations where the statute is close to running, plaintiff should just suck it up and pay for in-hand service. If all else fails The court may authorize alternate forms of service if none of these work.

f)

6) Erie Doctrine a) Erie i) Diversity case over the standard of care owed by a rail operator to those walking on paths adjacent to the rail. Court applied the standard of care mandated by Pennsylvania law. Declared the Swift doctrine unconstitutional in that the federal government had no power to make law in areas not delegated to it by the constitution. (Court rejected an interpretation of the RDA, not the RDA itself.) (1) Fed. Court in diversity should take a predictive approach to ascertain how the relevant State Supreme Court would decide the matter today. (a) If state supreme court rules on the issue after a Fed. Court has guessed wrong, the Fed. Courts guess still has finality. b) US v. Standard Oil p.893 i) Limits the holding of Erie: although neither the congress nor the courts have the power to create federal general common law, there is federal specific common law in cases where no state law governs. Erie had no purpose or effect for broadening state power over matters essentially of federal character or for determining whether issues are of that nature. c) York i) Diversity cases must apply state statute of limitations statutes (the outcome determinative test). (As a matter of policy, Erie stands for the idea that there should be no difference between decisions in a state court and decisions in a Fed. Court sitting in diversity York is based on policy considerations, not on constitutional law.) d) Byrd i) Fed. Court in diversity should apply federal rule regarding jury question. Distinguished from York in that here not sending the issue to the jury would run up against 7th amendment concerns. Affirms the use of the outcome determinative test in cases when use of state procedures would not contradict a federal policy. e) Hanna i) Fed. Court sitting in diversity should use the Fed. R. Civ. Pro. Regarding service of process in a case where state procedure would bar the suit because of insufficient service of process. 2 types of Hanna analysis. (1) Rules of Federal court practice not codified in the Fed. R. Civ. Pro. Should yield to state rules when applying them fails the modified (prospective) outcome determinative test. (2) Federal Statutory rules or Fed. R. Civ. Pro should be used and are constitutional under article 3 and the necessary and proper clause if (a) they are arguably procedural in nature and (b) They do not abridge, enlarge, or modify any substantive right (this seldom happens) (3) 4 types of Erie problems (a) Conflict between constitution and state law Resolves in favor of constitutional provision. (b) Conflict between Federal Statute and state law should be resolved in favor of federal statute if that statute is constitutional. (c) Conflict between Fed. R. Civ. Pro. And State law Fed. R. Civ. Pro. should apply if the issue is procedural and the rule at issue does not abridge, enlarge, or modify any substantive right. (d) Conflict between Federal Judicial Practice and State law Use outcome determinative test. f) Klaxon i) Fed. Court in Diversity must apply state choice of law rules. This has the effect of creating vertical uniformity but destroying horizontal uniformity across the federal court system.

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(1) Just as in Erie, a state applying another states law may use its own procedures as long as they are truly procedural and not substantive. (2) Van Dusen a transferee court must apply the same law as the court where the suit originated. 7) Joinder (SMJ must be present for each claim/party if it is to be joined 1331, 1332, or 1367 a) Fed. R. Civ. Pro 20 i) Plaintiffs/Defendants - Same transaction or occurrence, or series of transactions or occurrences and any common question of law or fact. b) Fed. R. Civ. Pro. 18 i) Claims as many claims as it has against an opposing party. c) Fed. R. Civ. Pro. 19 i) Mandatory Joinder of parties (see rule p. 52) d) Fed. R. Civ. Pro. 13 i) (a) Compulsory Counterclaims any claim that at the time of its (the answers) service the pleader has against an opposing party if (A) same transaction or occurrence and (B) does not require adding another party. ii) (b) Permissive Counterclaims any claim not compulsory iii) (g) Crossclaims same transaction or occurrence, or relates to any property that is the subject matter of the original action. e) Fed. R. Civ. Pro. 14 i) Impleader defendant may join a non-party who is or may be liable to it for all or part of the claim against it. 8) Supplemental Jurisdiction (28 USC 1367) Fundamental justification for supplemental jurisdiction is the constitutions use of the words cases or controversies in its article III grant of the judicial power. This grant includes the SMJ specified in the rest of article III, but it also includes actions not specified but part of a case that includes an action that is specified by article III as within the SMJ of the Federal courts. 28 USC 1367 is the requisite statutory grant of SMJ to Fed. Courts over such claims. a) 28 USC 1367 i) excerpt (a) . . .the district courts shall have supplemental jurisdiction over all other claims that . . . form part of the same case or controversy under article III of the US Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. (b). . . In any civil action of which the district courts have original jurisdiction founded solely on s. 1332. . . the district courts shall not have supplemental jurisdiction. . . over claims made by plaintiffs against persons made parties under Rule 14,19,20, or 24. . . When exercising supplemental jurisdiction over such claims would be inconsistent with . . . s. 1332. (c) The district courts may decline to exercise supplemental jurisdiction if . . . [see pg. 198] b) 3 part analysis to decide if a court can exercise supplemental jurisdiction i) Is it constitutional? (is it part of the same case or controversy) (1) Common nucleus of operative facts Gibbs ii) Is it authorized by 1367? (1) 1367(a) authorizes supplemental jurisdiction to the complete extent allowed by the constitutions (2) 1367(b) restricts plaintiffs from asserting claims against 3 rd party defendants if jurisdiction in the original action is based solely on diversity and the claim against the third party defendant does not satisfy the requirements of 1332. (a) Exxon Under 1367(b) complete diversity is still required, though the amount in controversy is not required for supplemental claims. iii) Do any of the factors in 1367(c) militate against exercising jurisdiction? 9) Pleading a) The Complaint i) Fed. R. Civ. Pro. 8 requires simple notice pleading for most causes of action a short and plain statement of the claim showing that the pleader is entitled to relief. See Dioguardi (upholding a jumbled complaint that did not state what law entitled the pleader to relief.) See also Doe v. Smith (upholding a complaint for relief under a statute forbidding the interception of oral communications and their distribution in interstate commerce by making inferences to fill in gaps in the factual allegations)

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(1) In deciding whether a complaint states a claim, the court considers not only the law under which the pleader claims relief, but any other law which might grant relief. See Conley (The accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.) (a) Inconsistent pleadings in the alternative are OK (although you obviously cannot lie). (b) Rule 9(b) requires pleading with heightened particularity for certain claims, including fraud. (2) For purposes of a 12(b)(6) motion (to dismiss for failure to state a claim), the court assumes that the facts alleged in the complaint are true. (a) Legal conclusions couched as factual allegations will not be accepted by the court. (b) If the answer denies some of the facts asserted in the complaint and provides evidence to support the denial, the motion will convert into a motion for summary judgment and the court will decide it after the complainant has had the opportunity to provide his/her own evidence. (3) Twombly and Iqbal The Supreme court seemed to raise the bar for pleading above what was required under Conley in 2 recent decisions. (a) Twombly (i) Complaint fails to state a claim when the facts are alleged are consistent with liability and no liability. (Parallel business conduct from which illegal business conduct might be inferred is not enough to state a claim when such conduct is also often the result of legal business practices.) (b) Iqbal (i) Where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged but it has not show[n] that the pleader is entitled to relief. quoting Rule 8(a)(2) (Dismissing a claim of discrimination because it failed to show that defendant had the necessary discriminatory intent.) 1. 2 part test for a well-pleaded complaint a. Are the allegations well-pleaded? Must be more than simple recitation of the legal elements of the claim must plead actual facts. b. Are the allegations plausible? i. If the facts pleaded are consistent with both legal and illegal behavior, the allegations in the complaint are said to be possible, but still not plausible. b) The Answer and Motions to Dismiss i) Default Judgment (R. 55) See Virgin Records America. (1) Failure to plead or otherwise defend a complaint within 21 days (set by rule 12(a)) will result in default. (a) Otherwise defending can include appearing coupled with some other indication of the defendants desire to contest the claim is enough to avoid default. (2) Once the defendant defaults, the plaintiff must show by affidavit or otherwise that the defendant has in fact defaulted. (R. 55(a)). (3) Before entering a default judgment, the court must decide if the complaint states a claim upon which relief can be granted. (a) The court still has to determine damages. (b) The court can set aside a default judgment for good cause ii) Motion to Dismiss 12(b)(6) See above under 5a (The Complaint) (1) 12(b)(6) motions are usually dismissed without prejudice (2) 12(b)(6) motions are usually decided within the four corners of the complaint. iii) Motion for a More Definite Statement 12(e) (1) Allows a party to move for a more definite statement of a pleading to which a responsive pleading is allowed but which is so vague or ambiguous that the party cannot reasonably prepare a response. Such a motion must point out the defects complained of and the details desired. It is unclear whether any complaint that passes 12(b)(6) muster under Iqbal might ever be required under 12(e) to plead with extra specificity. (a) Party does not waive a 12(e) motion by otherwise responding to the complaint.

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iv) Motion to Strike 12(f) (1) The court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. It is settled that a rule 12(f) motion will be denied unless it can be shown that no evidence in support of the allegation would be admissible. Matos. Striking a partys pleading, however, is an extreme and disfavored measure. The courts should not tamper with the pleading unless there is a strong reason for so doing. Matos. c) The Rule 12 Waiver Trap (or the omnibus motion rule) i) Rule 12(b)(2)-(5) defenses are waived pursuant to rules 12(g)(2) and 12(h)(1) if they are not asserted in the defendants first responsive pleading or motion. See Hunter v. Serv-Tech (Ruling that defendant waived personal jurisdiction when it filed a motion to dismiss for insufficient service of process that did not include a motion to dismiss for lack of personal jurisdiction). (1) The waiver trap does not apply to rule 12 defenses that were unavailable at the time the defendant filed its first responsive pleading or motion. d) Motion to Strike an Insufficient Defense 12(f) i) Decided using the same standard as a 12(b)(6) motion (see above). e) Responding to the complaint on the merits (R. 8). i) Defendant must admit or deny every factual allegation made in the complaint. (1) Defendant must admit or deny specifically in a way that fairly responds to the substance of the allegation. Cannot equivocate. See Res Robotics. (2) A party that lacks knowledge or information sufficient to form a belief about the truth of an allegation must so state, and the statement has the effect of a denial. f) Affirmative Defenses (listed in rule 8(c)) i) Any defense that defeats recovery even when the facts alleged in the complaint are true and would normally constitute a cause of action under which relief can be granted. These include: exclusions from a policy of liability insurance; breach of warranty; concealment of an alleged prior undissolved marriage; voidable preference in bankruptcy; [etc.]. See Ingraham v. U.S. casebook pp. 497. ii) Affirmative defenses must be stated in the responsive pleading. iii) Affirmative defenses must be timely pleaded. (1) See Ingraham v. U.S. (holding that a defense asserting that malpractice damage caps applied to the plaintiffs was an affirmative defense and was barred after judgment): Where an affirmative defense is raised in the trial court in a manner that does not result in an unfair surprise,. . . technical failure to comply with Rule 8(c) is not fatal. 3 ways to determine whether a defense is affirmative. (a) Whether the matter at issue may be said to constitute a necessary or extrinsic element in the plaintiffs cause of action? (b) Which party, if either, has better access to relevant evidence? (c) Policy considerations: should the matter be indulged or disfavored? g) Further Pleading i) Rule 7(a) allows a complaint and an answer. When the answer contains a counterclaim or a crossclaim, the rule also requires an allows to these claims. But the rule does not require an answer to facts stated in support of an affirmative defense: if a responsive pleading is not required, an allegation is considered denied or avoided, though the court on rare occasions may require a reply in order to flush out a potentially dispositive affirmative defense that could be heard in a rule 12(c) motion or a rule 56 summary judgment motion. 10) Discovery (Rules 26-37) The scope of discoverability is generally very broad, creating what can be referred to as a presumption of discoverability. i) Matter information no matter what form it is in. ii) That is not privileged (1) Rule 26(b)(5) requires that parties withholding information as privileged must do so expressly and describe the nature of the documents, communications, or tangible things not produced or disclosed and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim. (2) According to the restatement, attorney client privilege applies to (1) a communication (2) made between privileged persons (3) in confidence (4) for the purpose of obtaining or providing legal assistance for the client.

[12]
iii) That is relevant to any partys claim or defense. (1) This language is construed liberally to include matter that is relevant to the subject matter involved in the pending action. (The rule was amended to take this language out, but it is not clear that the amendment has actually narrowed the scope of discovery allowed by courts). iv) That is reasonably calculated to the discovery of admissible evidence even if not itself admissible. b) Requests for documents i) See Mcpeak v. Ashcroft p. 819 for weighing of costs and benefits of requiring discovery of electronic backup data. ii) Rule 26(b)(2)(B) excuses parties from providing e-discovery from sources that the party identifies as not reasonably accessible because of undue burden or cost. c) Depositions i) Deposing party must provide a notice of deposition pursuant to R. 30(b)(3). (1) Individual being deposed will be served with a subpoena and a subpoena duces tecum if they are required to bring anything with them to the deposition. ii) When deposing a corporate entity, one must send notice to the corporation describing the subject matter being asked about. The corporation must then designate somebody that is knowledgeable on that subject to be deposed. iii) A party can refuse to answer deposition questions based on privilege. iv) Objections to deposition based on admissibility as evidence will be noted on the record but the questions must still be answered. d) Work Product (Rule 26(b)(3)) i) Documents and tangible things. Ordinarily a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other partys attorney, consultant, surety, indemnitor, insurer, or agent). But subject to rule 26(b)(4), those materials may be discovered if: (1) They are not otherwise discoverable under rule 26(b)(1) and (2) The party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means (a) The Meaning of In anticipation of litigation. (litigation need not have already commenced) (i) The specific claim approach. Some courts require that the documents must have been prepared with a specific claim supported by concrete facts which would likely lead to litigation in mind. 1. The Articulable claim approach. requires an identifiable resolve to litigate. 2. The Substantial probability approach. a substantial probability that litigation will occur and that commencement of such litigation is imminent. (ii) The Ad Hoc approach. Broader than the specific claim requirement. Takes into account factors that make a lawyers work easier by allowing her to write things down. (iii) The primary purpose approach. Primary purpose of the work must be to assist in preparing for possible litigation. This purpose can be shown circumstantially by 1. How the document is labeled 2. Whether a lawyer participated in the preparation 3. Whether the document comments on litigation 4. Whether it has an ordinary business purpose a. Example engineers accident report and a document required by regulatory law have an ordinary business purpose ii) Protection against disclosure. If the court orders discovery of those materials, it must protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of a partys attorney or other representative concerning the litigation. . . . iii) See Hickman v. Taylor (pp. 778). (1) Plaintiffs requested notes and memoranda written by defendants attorney in the course of interviewing witnesses. Plaintiffs counsel admitted that he wanted the memos so that he would not miss anything when conducting his own interviews. Court ruled that such attorney work product was not discoverable. (a) Not all work product is non-discoverable: Where relevant and non-privileged facts remain hidden in an attorneys file and where production of those facts is essential to the preparation

[13]
of one;s case, discovery may properly be had. Such written statements and documents might, udnder certain circumstances, be admissible in evidence or give clues as to the existence or location of relevant facts. Or they might be useful for purposes of corroboration or impeachment. And production might be justified where the witnesses are no longer available or can be reached only with difficulty. (i) See Justice Jacksons concurrence for good policy reasons for protecting attorney work product from discovery. iv) Overcoming work product protection Discoverer must file a motion to compel discovery usually with an affidavit showing (1) Substantial need for the materials to prepare its case and (2) It cannot, without undue hardship, obtain the substantial equivalent by other means. (a) Once these showings have been made, under Hickman a court may still protect against disclosure of attorneys opinions some go so far as to bar discovery of all opinion work product. v) Expert work product (1) Testifying experts must produce reports which are discoverable material (2) Non-testifying expert work product is generally protected to the same degree as attorney work product. e) Initial disclosures rule 26(a)(1) requires that without waiting for a discovery request, parties must supply four categories of information: i) Name, address, and phone # of each individual likely to have discoverable information and the subjects of that information, unless such information would be useful solely for the purposes of impeachment. ii) A copy or description by category and location of all documents, electronically stored information, and tangible things that the disclosing party has in its possession custody or control and may use to support its claims or defenses unless the use would be solely for impeachment iii) A computation of each category of damages claimed by the disclosing including the evidentiary material upon which the computation is based. iv) Any insurance agreement under which an insurance business may be liable to satisfy all or part of a judgment in the action. (1) See the rule for exemptions from initial disclosures. (2) Court may delay initial disclosures if, for example, there is a dispositive motion before the court and the disclosure at issue will have no bearing on the disposition of the motion. See Flores pp. 803. f) Interrogatories i) Party served with interrogatories must respond within 30 days. ii) Attorney responding must sign a discovery response certifying that she has made a reasonable inquiry before submitting responses (just as with discovery requests). iii) Interrogatories, because they are directed at the party and not the attorney, can be a way to get around some work product protections- as the party served must use any information available to it (even information prepared by its attorney) in order to respond to interrogatories. iv) Answering interrogatories (especially contention interrogatories that ask for the opposing parties legal analysis of the case) may be postponed until discovery required to answer them is completed. v) Rule 26(e) requires parties to supplement their responses to interrogatories with information that makes the answer materially incomplete if that information has not already been made known to the party. g) Discovery Abuse i) Rule 26(g) certification is the main obstacle for overbroad discovery. ii) See Chudasama pp. 845 for an example of overbroad discovery requests (1) Motions to dismiss claims that affect the scope of discovery should be dealt with by the trial court before requiring extensive and expensive discovery. iii) Under rule 26(b)(1) parties can object to discovery requests. iv) Under rule 37(a) a party can move to compel discovery. (1) If the party does not comply with an order compelling discovery, sanctions can be brought. v) Rule 26(c) allows the producing party to file a motion for a protective order prohibiting the discovering party from sharing potentially sensitive information. 11) Adjudication without the jury

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a) Summary Judgment i) Rule 56 motion for summary judgment can be made at any time up to 30 days after the close of discovery and will be granted if the movant shows that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Essentially, the court must decide whether the state of the evidence is such that, if the case were tried tomorrow, the non-moving party would have a fair chance of obtaining a verdict. The proof supporting a motion for summary judgment must be admissible evidence (1) The determination whether there is a genuine dispute must be guided by the standard of proof applicable to the issue in the case. (2) Slaven p.991 (a) Plaintiff administratrix brought a tort action against the city of Salem alleging that they negligently allowed her decedent to kill himself while in their custody. In order to prove negligence of this sort, the plaintiff must have shown that the defendants knew or should have known that the decedent was at risk of injury or death. The defendants testified that they did not know. The plaintiff hoped to defeat summary judgment by raising credibility issues with the defendants testimony (the belt/no belt issue was key to this argument). Plaintiff also argued that she could not present more facts because they were known only to the defendants who were interested parties. The court ruled against the plaintiff on both of these arguments and granted summary judgment. The Party failing to file an opposing affidavit in such a situation cannot rely on the hope that the judge may draw contradictory inferences in his favor from the apparently undisputed facts in the affidavit of the moving party. The plaintiff, to prevail, must indicate that she can produce the requisite quantum of evidence to enable her to reach the jury with her claim. (i) Rule 56(c)(1)(A) lists materials that can be considered in deciding summary judgment. They must all be admissible evidence except for affidavits and statements of parties and witnesses. Affidavits, like admissible witness testimony, must be made on personal knowledge, set out facts that would be admissible in evidence and show that the affiant or declarant is competent to testify on the matter (ii) Rule 56(d) allows the non-moving party to get a continuance in order to get discovery required to respond to the motion. (iii) Uncertain questions of law are never an appropriate basis on which to proceed to trial, unless the judge thinks that a trial will clear up some issue of fact important to the legal analysis. ii) Proof of elements summary judgment if the moving party has the burden of proof as to a claim or defense, that party must present undisputed facts supporting each and every element of the claim or defense in order to obtain summary judgment iii) Disproof of elements summary judgment if the moving party would not have the burden of proof on a claim or defense at trial, then that party could win on summary judgment by presenting undisputed facts negating an essential element of the non-moving partys claim (1) Absence of evidence summary judgment if the moving party would not have the burden of proof, he could also win on summary judgment by showing that there is no evidence establishing an essential element of the non-moving partys claim. (a) Shell (i) Plaintiff sued shell for negligent upkeep of an oil platform after he slipped and fell on a misplaced and slippery board on a platform leased by a third party not joined in the action. The court granted summary judgment to Shell because the plaintiff failed to provide any evidence that Shell either owned the board or was responsible for the negligent upkeep of the platform. Based on Celotex, a party need not provide evidence of its own to win at summary judgment it can simply point out that the non-moving party has failed to provide any evidence supporting a necessary element of its claim. 1. The moving party must actually point out to the court which element of the nonmoving partys claim lacks any evidence iv) A party can obtain partial summary judgment that is, summary judgment as to fewer than all of her claims or even on a part of a claim. The case would still go to trial on the rest of the genuine issues of material fact in dispute.

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b) 12(c) motion for judgment on the pleadings i) Judged using the same standard as motion to dismiss for failure to state a claim ii) Only takes into account allegations made in the complaint, answer, and reply (if any) c) Rule 50 Judgment as a Matter of Law i) If a party has been fully heard on an issue at trial and the judge finds that a reasonable jury would not have sufficient evidence to find for the jury on that issue, the court may resolve that issue against the party and if that issue is dispositive for a claim, grant a judgment a s a matter of law on that claim. This can be made by motion any time before the case is submitted to a jury. ii) Renewed Judgment as a Matter of Law if the court does not grant a JMOL, the court is considered to have submitted the action to the jury subject to the courts later deciding the legal questions raised by the motion. No later than 28 days after entry of judgment or discharge of the jury the movant may file a RJMOL and may include a request for a new trial under rule 59. The court may allow judgment on the verdict if there was a verdict, order a new trial, or direct the entry of judgment as a matter of law. 12) Res Judicata (EVERYONE GETS ONE, AND ONLY ONE, BITE AT THE APPLE) a) Three elements must be satisfied before a claim is barred i) The claim must be the same as the claim litigated in a previous case (1) River Park p. 1186 (a) Plaintiff developer sued the city of highland park for approving its development plan when the city secretly planned to by the development itself. To obtain final approval, the developer had to provide the city with engineering plans. Plaintiff claimed that the city intentionally delayed final approval, causing the bank to foreclose and allowing the city to purchase the property. In its complaint in federal court, the developer claimed the city was liable to it for depriving it of property without due process. Federal court dismissed for failing to state a claim. Later, the plaintiff sued in state court, seeking remedies under 3 state law counts tortious interference, breach of implied contract, and abuse of government power. (i) The Illinois supreme court found that the claims were barred as res judicata because they could have been litigated in the prior action. The Court used the same transaction test (similar to the same nucleus of operative facts analysis in Gibbs) rather than the same evidence test. 1. The court did not discuss an alternative primary rights test. 2. The court rejected an argument by the plaintiff that it could not have brought its state law claims in federal court because of subject matter jurisdiction in fact they could have brought these claims because the federal court could have exercised 1367 supplemental jurisdiction over them. ii) The previous claim must have resulted in a judgment that was (1) Final (a) A judgment is final when the trial court enters judgment, not when all appeals are exhausted. (i) A court will typically wait until the outcome of appeals to decide whether to dismiss a case on res judicata grounds. (2) Valid (a) A case that was litigated without subject matter jurisdiction is considered valid if it was litigated until judgment (b) A default judgment where the court was without SMJ or PJ is not valid. (3) On the merits (a) Includes jury verdicts, summary judgments, JMOLs, and default judgments. (b) Does not include dismissal for lack of SMJ, PJ, or venue. (c) Dispositions of cases on statutes of limitation are considered on the merits. iii) The parties litigating the claim must be the same parties that litigated the claim previously, or their privies. (1) Taylor p.1199 (a) In C1, Herrick (Taylors friend, represented by the same lawyer, had worked together without a contract, had given Taylor some discovery he received from the first suit, and members of the same antique airplane restoration association) had sued the FAA to get documents under an FOIA request and lost. Taylor brought C2 to get the same documents that Herrick failed to

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get. The court lists six exceptions to the Res Judicata rule that requires the parties in both cases to be the same (i) A party that agreed to be bound by a judgment can be barred from bringing a later action (ii) Parties that have a substantive legal relationship are barred from bringing a later action 1. These include successive owners of property, bailee and bailor, assignee and assignor. (iii) A party can be barred if he was adequately represented by someone with the same interests who was a party. This category includes class actions, and suits brought by trustees, guardians, and other fiduciaries. (iv) A nonparty who has assumed control over litigation can be precluded (v) A party may not avoid a previous judgments preclusive force by litigating through a proxy (vi) A statutory scheme may, consistent with due process, bar successive litigation by non-parties. (b) The Taylor rejected the adoption of a balancing test to decide whether a party should be precluded, preferring to stick to the strict categories of exceptions listed above. Adopting such a test would undermine the efficiency goal of res judicata by leading to more litigation over whether a party is, in fact, precluded or not. (c) The court ruled that Taylor did not fit category (v) above because he had no legal relationship with Herrick and there was no demonstration that Taylor was Herricks undisclosed agent (a mere whiff of tactical maneuvering will not suffice). (2) Compulsory counterclaims are typically precluded not by res judicata but by Rule 13(a). Counterclaims not barred by rule 13(a) are not barred by res judicata in order for a claim to be barred, the plaintiff from the earlier action must be plaintiff again in the later action, and the same goes for the defendant. (a) Once a defendant brings a permissive counterclaim, any other claim based on that transaction or occurrence will be subsequently barred, just as if he were a plaintiff on that claim. (3) Exceptions to res judicata (a) If the parties have agreed that the plaintiff may split his claim (b) If the court in the first action has expressly reserved the plaintiffs right to bring a second (c) The plaintiff was unable to rely on a certain theory of the case or to seek a certain remedy or form of relief in the first action because of limitation on SMJ or some other reason (d) The judgment in the first action was inconsistent with the fair and equitable interpretation of a statutory or constitutional scheme or the sense of that scheme should permit a plaintiff to split his claim (e) If the plaintiff, for reasons of substantive policy involving a continuing wrong, is given the option to sue from time to time for damages (f) It is clearly shown that the policies favoring preclusion are overcome for an extraordinary reason, such as the apparent invalidity of a continuing restraint or condition having a vital relationship to personal liberty or the failure of prior litigation to yield a coherent disposition. 13) Collateral Estoppel a) Collateral estoppel is the scalpel where res judicata is the axe. Collateral estoppel serves to preclude an issue that was litigated in a previous action from being litigated again, whereas res judicata prevents claims from being relitigated. An issue must satisfy 5 criteria beore it can be relitigated i) The issue in the second lawsuit must be the same as the issue in the first lawsuit ii) That issue must have actually been litigated in the first lawsuit iii) It must have been litigated with a full and fair opportunity, so that we have substantial confidence in the outcome iv) It must have been actually decided (1) Judgment must have been valid and (2) final v) It must have been essential to the judgment in the first lawsuit (1) Cambria p. 1238

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(a) Jeffery sued Cambria for negligence in operating an automobile causing a crash. The court found no liability because both parties were negligent. Cambria then sued Jeffery for negligence and won a jury verdict. The appellate court reversed, reasoning that the issue of Cambrias negligence in the collision was decided in the first case, and therefore he could not recover. The Supreme court of Massachusetts reversed the appellate court on the grounds that deciding on Cambrias negligence was unnecessary to the disposition of the first case because once the trial court decided on Jefferys negligence, it need not have reached the issue of Cambrias negligence in order to rule for Cambria. (i) Note as in Felger, the state procedure rules did not provide for mandatory counterclaims at this time in Massachusetts, so the fact that Cambria could have counterclaimed in the first action does not mean he cant bring a second action based on the same transaction. 1. Cambria could have, and probably did, invoke collateral estoppel to foreclose Jeffery from relitigating the issue of his negligence. (ii) Reasoning behind the necessary to the judgment requirement if it an issue is not necessary to the judgment, it may not be appealable, and therefore it would not be fair to preclude relitigation. (iii) Holdings on alternative findings (eg, if the court in the original action had found Jeffery negligent and Cambria not negligent either finding suffices to rule for Cambria) under the restatement, neither finding would get preclusive effect. Some jurisdictions check if both findings were given full consideration, and if they were then both are given preclusive effect. b) Felger p. 1219 i) Felger was sued by his lawyer Nichols for unpaid attorneys fees. He defended himself in that action by arguing that the legal services were inadequately performed and that therefore he should not have to pay. Felger lost in small claims court, then sued his attorney for malpractice. (1) The court held that the plaintiff was collaterally estopped from his malpractice claim because the previous litigation had decided that his lawyers representation was not inadequately performed (this was held to be the same as the malpractice claim), even when his malpractice claim was not res judicata because he could not have asserted it in the lower court (due to the maximum jurisdictional amount that was able to be decided in that court). (a) In order to decide if issues are the same and which issues were actually decided, a court will generally have to make a detailed inquiry into the pleadings and evidence presented at trial. (i) The book suggests that precluding this issue from being relitigated might have been unfair because Felger did not have a great incentive to win a suit for such a small amount of money. 1. Note there was no rule preclusion here because the Maryland rules did not provide for mandatory counterclaims c) Panniel p.1226 i) Plaintiff sued insurance company for payment of insurance relating to a car accident. One of the issues in the case (which was decided in arbitration pursuant to a NJ statute) was whether the plaintiffs foot injuries were proximately caused by the accident. The arbitrator found for Plaintiff. Later, plaintiff sued those who she was in the collision with for negligence (a claim for which proximate causation is a necessary element). The insurance company that lost the first case happened to be the same company that represented defendants (driver of an ambulance and his employer) in the second action. Plaintiff argued that the defendants in the second action should be precluded from litigating the proximate cause issue that was litigated in the first action. (1) The court found that due to the fact that they are represented by the same party that was the defendant in the first action (and that the plaintiff in the second was only suing for the amount covered by the insurance company), that the parties in the second action were in privity with the defendant in the first action. (2) The court also held that the issue was identical to the issue in the first litigation, it was actually litigated, the court issued a final judgment on the merits, and the determination was essential to the judgment. (a) The court then listed the five exceptions to the application of collateral estoppel as listed in the restatement.

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(i) There is a clear and convincing need for a new determination on the issue because of potential adverse impact on the public interest or of persons not parties in the initial action, or it was not foreseeable at the time of the initial action that the issue could arise in a subsequent action, or because the party being precluded did not have adequate opportunity or incentive to obtain a full and fair adjudication in the initial action Courts holding that the defendants were not barred from litigating proximate cause was partially for this reason The advantages of PIP actions (these were meant to be expeditious) would be lost if collateral estoppel provided parties with incentive to litigate more vigorously, The parties in the second action have much to lose even though the plaintiff waived damages above the coverage amount (for example, higher insurance premiums), and because the defendants in the second action did not have opportunity to litigate the issue in the first action. (ii) The issue is one of law and the two claims are substantially different ot a new determination is warranted in order to take account of an intervening change in law or to otherwise avoid inequitable administration of the laws (iii) A new determination is warranted by differences in the quality or extensiveness of the procedures followed In the two courts or by factors relating to the allocation of jurisdiction between them. (iv) The party against whom preclusion is sought had a heavier burden of proof with respect to the issue in the initial action than in the subsequent action; the burden has shifted to his adversary; or the adversary has a significantly heavier burden than in the first action. d) Other dispositions i) Stipulation no preclusive effect, the issue was not actually litigated ii) Admission no preclusive effect, ditto iii) Default judgment no preclusive effect, ibid e) Non-mutual collateral estoppel i) Non-mutual defensive collateral estoppel (1) Blonder-Tongue UofI sued in C1 for patent infringement, where it lost because the court found that its patent was invalid. UofI then sued another defendant for infringement of the same in C2, where the supreme court ruled that it was precluded from doing so because the court in C1 had found the patent invalid. (a) Blonder-Tongue was not bound by the lawsuit, but UofI was because it already got a bite at the apple in the first case. Had UofI won the first case, it could not have precluded Blonder-Tongue from relitigating the validity of the patent because Blonder-Tongue never had 1 bite at the apple. (i) Not all state courts accept non mutual collateral estoppel ii) Non-mutual offensive collateral estoppel (1) Parklane Hosiery (a) SEC won a suit against Parklane asserting that the proxy statement they issued was materially false and misleading. Plaintiff in this action filed a stockholders class action alleging essentially the same thing, seeking damages. Plaintiff then moved to estop Parklane from relitigating the issue of whether the proxy statement was actually false and misleading. (i) The court upholds such an offensive use of collateral estoppel in this and future cases, provided that it does not present any of the following problems 1. If the use of offensive collateral estoppel will cause other potential plaintiffs to adopt a wait and see attitude, thus incentivizing them not to join on an action this was not present here because they could not have joined the SECs action. a. This also gives the first plaintiff tremendous bargaining power because the effect of an adverse judgment on the defendant could be enormous. 2. If it is unfair to the defendant because, for example, the first case was for small damages he may not have had the incentive to litigate vigorously, particularly if future suits are not foreseeable. 3. If the judgment relied upon for offensive collateral estoppel is inconsistent with one or more previous judgments in favor of the defendant (the 50 plaintiffs in a rail accident example)

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Where the second action affords the defendant greater procedural opportunities than the first that could readily cause a different result. (ii) Note the court found it significant here that Parklane had ample opportunity to litigate vigorously its suit with the SEC because of the dire consequences of losing the suit. (iii) Most states have not embraced non-mutual offensive collateral estoppel. f) Interstate preclusion i) The preclusion law of the court that rendered the first decision would apply to the decisions preclusive effects in the second decision this is said to be a result of application of the full faith and credit clause of Art. IV of the Const. (1) This is sensible it allows parties to understand the effects of the first decision right after it is entered. (2) Though some courts apply the fuller faith and credit approach applying whichever law would give the rendering courts findings more preclusive effects. g) Inter-system preclusion i) 28 USC 1738 requires federal courts to apply the preclusion law of the rendering state court. ii) In diversity, the court applies preclusive law of the state in which the rendering court sits. 14) Class Actions a class action is essentially a different kind of joinder for cases in which persons with similar interests are so numerous that it is more efficient for a few class representatives to litigate on behalf of the rest of the class, who are not made parties. a) The Due Process requirements for class actions i) Hansberry v. Lee p. 675 (1) In C1, a homeowner in a subdivision sued another homeowner to prevent him from selling his house to an African American in violation of a racially restrictive covenant. The court found for the plaintiff and enjoined the owner from selling, finding that the covenant was valid under Illinois law because the defendant had stipulated that the covenant was valid under Illinois law (ie it had gotten the requisite 95% of the homeowners to sign on to it). Three years later, the plaintiff in the first actions husband decided he wanted to sell his house to an African American, and the adjacent homeowner sued to enjoin him and the buyer. The court in this case found that the stipulation in the first case was fraudulent and the covenant had not gotten the requisite support, but found that the defendant was estopped from using this as a defense because the first case was a class action binding on all within the class, including the defendant, a homeowner. (a) The supreme court said that this use of issue preclusion was a violation of due-process. Giving a judgment binding effect on a party not joined is not a violation of due process only where (i) Absent parties are adequately represented by parties who are present, or (ii) The parties participate in the conduct of the litigation, or (iii) Where the interest of the class is joint, or (iv) Where for any other reason the relationship between the parties present and those absent is such to legally entitle the former to stand in judgment for the latter. (b) Those who want to enforce the covenant have a conflict of interest with those who do not want to enforce it, making it impossible to say that the absent partys interest was the same as the represented partys in the first case. 4.

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