1 CIVIL PROCEDURE OUTLINE I. II. INTRODUCTION: A SURVEY OF THE FIELD THE PROCESS OF ADJUDICATION A.

FRAMING AND RESPONDING TO THE INITIAL STORY: PLEADING i. Notice Pleading: goal is simplification; take emphasis off pleadings, put it on discovery 1. 2 purposes: (1) Eliminate contentions without legal basis, (2) Give defendant general notice of nature of claim ii. Rule 7: Pleadings Allowed; Form of Motions and Other Papers 1. Pleadings: set forth legal contentions, response to these contentions 2. Motions: request court to do something iii. Rule 8: General Rules of Pleading ( Short and plain statement ) 1. A party may set out two or more statements of a claim or defense alternately or hypothetically . . . and a party may state as many separate claims or defenses as it has, regardless of consistency. 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. 3. If a responsive pleading is required on an allegation and the allegation is not denied, the allegation is admitted iv. Rule 12: Defenses and Objections: When and How Presented; Motions for Judgment on the Pleadings; Consolidating Motions; Waiving Defenses; Pretrial Hearing 1. 12(c): Motion for a judgment on the Pleadings a. Made after the pleadings are closed, but early enough not to delay trial b. Has the effect of a 12(b)(6) motion 2. 12(d): Result of Presenting Matters Outside the Pleadings a. If extrinsic evidence is presented on a 12(b)(6) motion, then the motion is treated as a summary judgment motion and all parties must be given a reasonable opportunity to present all pertinent evidence 3. 12(e): Motion for a More Definite Statement a. Rarely invoked successfully; if the claim is so vague as to make a response impossible, it will be subject to a 12(b)(6) motion 4. 12(f): Motion to Strike a. Allows a party to challenge a part of a pleading that fails under the substantive law, even though the rest of the pleading state a claim or defense b. Also forces removal of irrelevant and prejudicial allegations in a pleading i. redundant, immaterial, impertinent, or scandalous matter 5. 12(g): Joining Motions a. If you make a pre-answer motion, you can t make a second pre-answer motion raising a defense or objection that was available to you at the time of the earlier motion (i.e. have to join motions; use it or lose it)

v.

vi.

vii.

viii.

6. 12(h): Waiving and Preserving Certain Defenses a. A party waives any defense listed in 12(b)(2)-(5) if they fail to include it in a preanswer motion, in a responsive pleading, or in an amendment to that pleading i. These defenses are designed to be raised in your first communication with the court; use it or lose it Haddle v. Garrison (Supreme Court); Rule 12(b)(6) 1. Facts: Plaintiff testifies on matters pertaining to his company s criminal investigation, is fired, brings Civil Rights claim for intimidation. Defendant files 12(b)(6) motion for failure to state a claim because plaintiff was an at-will employee. 2. Rule: For motion to dismiss, assume all facts in plaintiff s claim are true. 3. Holding: Here, assume there was a conspiracy and plaintiff was injured; so plaintiff does state a claim. Conley v. Gibson (Supreme Court); Rule 8; Rule 12(b)(6) 1. 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. May be read as saying that any statement revealing the theory of the claim will suffice unless its factual impossibility may be shown from the face of the pleadings 2. FRCP do not require a claimant to set out in detail the facts upon which he basis his claims. To the contrary, all the Rules require is a short and plaint statement of the claim that will give defendant fair notice of what the plaintiff s claim is and the grounds upon which it rests. Bell Atlantic Corp. v. Twombly (Supreme Court); Rule 8; Rule 12(b)(6) 1. Facts: Plaintiffs allege that defendant telephone companies are violating antitrust laws by agreeing not to compete with each other and to exclude potential competitors. 2. Rule: Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint, but the claim must pass the threshold from conceivable to plausible to avoid dismissal. 3. Holding: Plaintiff s complaint alleges only parallel behavior, which may lead one to speculate about an illegal agreement, but complaints must rise above the speculative level. (Parallel behavior is not sufficient to prove antitrust violations.) Dismissed. Ashcroft v. Iqbal (Supreme Court); Rule 8, Rule 12(b)(6) 1. Facts: Following 9/11 attacks, defendant was detained as person of high interest, sued top government officials for their role in the plaintiff confinement/discriminating against plaintiff based on race, religion, or national origin. Defendant moved to dismiss for failure to state a claim. 2. Rule: The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. 3. Holding: Applied plausibility standard from Twombly. Rule 8 does not require detailed factual allegations, but it requires more than just labels and conclusions, naked

3 assertions, and formulaic recitations of the elements of a claim. Here, much of plaintiff s claim was conclusory, and the parts that weren t failed to pass plausibility threshold. a. Policy: Does plausibility standard allow judges to impart their own biases into the procedure of a case? i. Judge isn t favorable to your type of claim says claim isn t plausible claim dismissed ix. Rule 11: Signed Pleadings, Motions, and Other Papers; Representations to the Court; Sanctions 1. Provides standard of objective reasonableness; deters baseless filings (judicial efficiency/resources); forces attorneys to conduct adequate factual investigation before filing 2. Allows a party to make factual contentions that do not have evidentiary support, but will likely have evidentiary support after a reasonable opportunity for further investigation/discovery a. This standard doesn t seem to jive with plausibility standard in Twombly 3. Requires that attorney sign each document to establish a reasonable level of investigation has been conducted before filing the claim (and that claim is not being filed to bully/harass adversary) 4. Imposition of sanctions is at the discretion of the judge a. Sanctions paid to the court, not to the adversary b. Safe Harbor Provision: must serve opponent with Rule 11 notice, wait 21 days, then file Rule 11 if opponent does not withdraw document in question i. Policy: forces attorneys to talk to each other (may avoid conflicts); efficient because the court isn t involved with monitoring process; but it may encourage parties to conduct less pre-filing inquiry into the claim/facts; may give an opponent opportunity to harass the other side (i.e. threaten Rule 11) 5. Applies to documents and to positions taken as a result of baseless documents a. Applies to answers as well as complaints 6. Law firms are responsible for all attorneys with regard to Rule 11 7. A client may be held responsible for a factual problem (i.e. if client just spews a bunch of lies) x. Walker v. Norwest Corp. (8th Cir.); Rule 11; Rule 12(b)(1) 1. Facts: Plaintiff brought claim in federal court using diversity of citizenship. Defendant moved to dismiss with 12(b)(1) (lack of subject matter jurisdiction) and for sanctions under Rule 11. Both motions granted; plaintiff appealed, said that determining citizenship of all defendants would be too burdensome. 2. Holding: It s the responsibility of the party alleging diversity of citizenship to determine the citizenship(s) of the other parties. Sanctions affirmed. xi. Christian v. Mattell, Inc. (9th Cir.); Rule 11 1. Facts: Plaintiff accused Mattel of copyright infringement, even though Barbie dolls in question were clearly older than plaintiff s doll. Defendant moved for summary

4 judgment and Rule 11 sanctions. Plaintiff s attorney did not withdraw complaint in 21 days and received sanctions. Appealed. 2. Rule: Only signed papers are admissible when applying Rule 11 sanctions. Other evidence (conduct in depositions, discovery meetings, oral representations, etc.) cannot be applied to Rule 11 sanctions, even if it suggests a general lack of respect for the judicial process. 3. Holding: Because the court is unclear whether district court issued sanctions based on attorney s written record or other conduct, the case is remanded to determine basis for sanction orders. 4. Policy: why file summary judgment before Rule 11? a. Send a message to other attorneys ( fuck off ) b. Put a ruling on the books; don t allow a second attempt by Christian; get this shit on record xii. Bridges v. Diesel Service, Inc.; Rule 11 1. Facts: Plaintiff alleges that his employer dismissed him from his job as a result of a disability, thus violating the ADA. Court dismissed complaint for failure to exhaust administrative remedies (plaintiff should have but did not file a claim with the EEOC first). Defendant moves for Rule 11 sanctions 2. Rule: Rule 11 is violated if, at the time of signing of the complaint, the signing of the document was objectively unreasonable under the circumstances. 3. Holding: While the plaintiff s attorney did not display a competent level of research in investigating procedure, he quickly acknowledged his mistake and attempted to rectify it. Rule 11 should only be applied in exceptional circumstances where the suit is blatantly frivolous. Plaintiff s attorney made a mistake, but he has learned his lesson. 4. Note: Did not impose sanctions because, other than the procedural mistake, the suit looks legit. xiii. Rule 55: Default; Default Judgment 1. A defendant who fails to respond to the complaint can have a default judgment entered against her xiv. Rule 15: Amended and Supplemental Pleadings 1. Can amend one time without having to gain approval from court or adversary B. FROM CLAIM TO CONCLUSION: THE PATH TO TRIAL OR SETTLEMENT Disclosure and Harassment: Discovery i. Discovery: permits parties to compel the disclosure of witnesses, evidence, documents, and other matters before trial 1. Permits the bringing and defense of claims where all or much of the relevant information lies in the possession of the other side ii. Rule 26: Duty to Disclose; General Provisions Governing Discovery 1. 26(b)(1): allows parties, without court approval, to seek discovery regarding any nonprivileged matter that is relevant to any party s claim or defense

5 a. If a party shows good cause the court may grant even broader discovery of any matter relevant to the subject matter involved in the action i. For a piece of information to be relevant to a legal proposition means that the information tends to prove or disprove something the governing substantive law says matters b. Privilege can be waived by failing to assert it, or by taking some action inconsistent with claiming the privilege, such as disclosing the privileged material to a third party i. Waiver of a privilege will prevent a party from asserting the privilege as to any other privileged communications on the same subject matter, with subject matter interpreted very broadly 2. 26(b)(3): Attorney work product; Supersedes Hickman a. If other party can prove a substantial need in getting info, and undue hardship in getting info, and inability to get something similar, they can request product i. Financial hardship not a good reason to disclose product b. Provides additional protection to opinion-based product c. Work product is only work product if prepared in anticipation of litigation d. Covers investigations by parties who are not lawyers ( representatives of the client ) e. Applies not only to formal litigation but also to administrative proceedings and arbitration 3. 26(a): describes the first stage of discovery ( required disclosures ) a. Initial Disclosures: parties must volunteer categories of information that the disclosing party may use to support its claims or defenses b. Party must disclose identity of expert witnesses along with each expert s written report and a list of information about the expert c. Each party must disclose lists of witnesses and documents or exhibits it intends to produce at trial 4. 26(c): permits a party to seek a protective order and gives the judge broad power to prevent abusive discovery iii. Davis v. Precoat Metals; Rule 26(b)(1) 1. Facts: Plaintiffs allege racial discrimination by employer. They file a motion for discovery for all complaints made by employees working in the same plant that allege discrimination based on race or national origin. 2. Holding: The information requested in the motion for discovery is tailored enough (i.e. specific types of complaints by workers in the same plant) to be relevant to the plaintiff s claim, and the information may help in establishing a case iv. Steffan v. Cheney; Rule 26 1. Facts: Plaintiff was released from Navy after declaring himself homosexual. Filed claim challenging constitutionality of regulations that provided for discharge of admitted homosexuals. In deposition, defendant asked plaintiff whether he had engaged in homosexual activity during or after tenure in Navy. Plaintiff refused to answer.

6 2. Rule: Only relevant information may be compelled in deposition. 3. Holding: Plaintiff is making constitutional claim against Navy s policy of discharging admitted homosexuals. He was not discharged because of homosexual behavior. Because the homosexual behavior is not relevant to the claim, it cannot be compelled in deposition. 4. Policy: relevance is not determined by what you think is logically related to the claims; relevance is determined by precedent v. Silvestri v. General Motors Corp.; spoiling evidence 1. Facts: Plaintiff was driving vehicle when he struck a pole and was injured. Plaintiff alleges that airbag did not deploy, exacerbating injuries. Plaintiff sued GM three years after the crash, and after the destruction of the vehicle. 2. Rule: The court has an inherent power to impose sanctions for spoilage of evidence; the sanctions should fit the prophylactic, punitive, and remedial rationales underlying the spoliation doctrine, and there must be at least some fault. Dismissal should not be used if a lesser sanction can achieve the desired goals. 3. Holding: Plaintiff was well-aware that he would bring suit against GM, and that GM would likely need to inspect the vehicle to proceed in its defense. Even though the vehicle was not in the plaintiff s control, he had ample time to alert the company of its existence. Instead, he did nothing. Since the vehicle was the sole piece of evidence, without which GM is unable to develop a proper defense, the case must be dismissed as a sanction for spoiling evidence. a. Discovery rules didn t apply because this event didn t take place during discovery vi. Stalnaker v. Kmart Corp.; Rule 26(c), 26(b) 1. Facts: Plaintiff claims sexual harassment against manager of defendant. Plaintiff attempts to depose four nonparty witnesses regarding their romantic conduct and sexual activities. Defendant files a protective order, stating that witnesses do not have anything to do with case, and that information revealed could be embarrassing 2. Rule: The court, upon a showing of good cause, may issue an order to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense 3. Holding: The information provided by the witnesses has potential to be embarrassing. However, the information related to sexual harassment by defendant may be useful in the case. Therefore, to protect the parties while allowing the case to proceed, the court allows the plaintiff to ask only questions regarding sexual contact with said manager, and information is not to be released to third parties. vii. Discovery Plan: SM 19-28 1. As a general rule, you should depose the adverse party 2. Avoid conducting one-on-one interviews with witnesses 3. Interrogatories can only be sent to a party to a trial (cannot be sent to non-parties) a. Are limited to 25 questions, including subparts 4. You can have one day with a particular deponent, and that day is limited to 7 hours a. Must make special request for longer deposition

7 viii. Hickman v. Taylor; superseded by 26(b)(3) 1. Facts: Tugboat sank, killing 5 of 9 crew members. Four survivors were questioned at a public hearing. Representative of one of the deceased brought suit against tugboat owners. Plaintiff filed 39 interrogatories; defendant answered all but one, which asked him whether any statements were taken from the tugboat or any other vessel in connection with the events in question. 2. Rule: (1)Discovery of written materials obtained or prepared by opposing counsel in preparation for possible litigation may not be had unless the party seeking discovery can establish that relevant and non-privileged facts remain hidden in an attorney s file, and where production of those facts is essential to the preparation of the party s case. (2) Information prepared or obtained by counsel in preparation for litigation after a claim has arisen is not protected by the attorney-client privilege and is not protected from discovery on that basis. 3. Holding: Essential that lawyer work with a certain degree of privacy. If the work product of the lawyer was open to opposing counsel, much of what is now put down in writing would remain unwritten. An attorney s thoughts would not be his own. Inefficiency, unfairness, and sharp practices would develop in the giving of legal advice and in the preparation of cases for trial. Here, the plaintiff already had an abundance of information (between public hearing and other interrogatories). This request was made simply to get into the opposition s head. 4. Note: Superseded by Rule 26(b)(3) ix. Upjohn Co. v. United States 1. Facts: Upjohn conducted internal investigation that discovered illegal payments made to foreign officials in exchange for business. Upjohn volunteered notice of these actions to the IRS, who requested information collected by Upjohn, including internal questionnaires sent to managers. Upjohn maintained that these documents are protected by attorney-client privilege and work product. 2. Rule: (1) In corporate context, attorney-client privilege extends to lower level employees, not just to those in control of corporation. (2) Work-product doctrine protects oral statements made to attorneys. 3. Notes: a. Control group test: if a person is in the position to control the corporation, then that person is a client under the attorney-client privilege i. But employees below the control group will often have information valuable to the attorney 1. Hobson s Choice: interview those below the control group and their communications won t be privileged; interview only the control group and risk having a weak case a. Upjohn decision does away with Hobson s Choice b. For the purpose of attorney-client privilege to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected

8 x. Attorney-client privilege: 1. To Invoke: a. Confidential b. Communication c. Between an attorney acting as an attorney d. For a client e. For the purpose of rendering legal advice f. And the privilege cannot be waived 2. Attaches to former employees 3. Is broad for purposes of collecting info, but limited in terms of waiving privilege (control group test) a. So janitor can t waive privilege for entire corporation 4. Only attaches to communications/documents prepared in giving and preparing legal advice 5. Possible to argue that privilege never attached in a non-confidential setting a. i.e. so it is not waived for other transactions Resolution Without Trial xi. Rule 56: Summary Judgment 1. Is a judgment; finding for one side or the other 2. Can be filed up to 30 days after end of discovery 3. Must show that the other side can t prove a key element of their claim a. Moving party must show that there is no genuine issue of material fact 4. All inferences from evidence will be made in favor of non-moving party 5. Not meant to try the facts, but to show that there is an issue of fact to dispute a. Can a jury acting rationally find in your favor? 6. Can be partial (i.e. decide one issue and leave others for trial) 7. 12(b)(6) is distinguished from summary judgment in that court assumes all facts are true, and asks if the plaintiff can recover 8. Summary judgment comes after sufficient time for discovery 9. Standard for summary judgment will apply differently depending on which party is moving (i.e. defendant or plaintiff) xii. Burdens 1. Of Pleading: which party has the responsibility for setting forth the elements of a case? Production a. Test is 12(b)(6): is there a claim? Trial b. If you make it past this, you get discovery Discovery 2. Of Production: do you have enough evidentiary support for key elements of your claim? Pleading a. A jury could find in your favor; NOT whether you will win or not Persuasion b. If you have the burden of pleading, you have the burden of production 12(b)(6) c. If you get past this, you get to trial 3. Of Persuasion: can you prove to a fact-finder that it s more likely than not that your case is legit? a. i.e. weighing the evidence

9 b. Standard is preponderance of the evidence 4. Burdens may switch to defendant on counter-claim 5. DO NOT use burden of proof on exams! xiii. Adickes v. S.H. Kress & Co. (1970); Rule 56 1. Facts: Plaintiff entered defendant s store with several black students, and defendant refused to serve her. Plaintiff arrested for vagrancy shortly after leaving store. Plaintiff claims there was conspiracy between police and defendant, says one of the arresting officers was in the store while she was there. 2. Rule: (1) Moving party has burden to show absence of an issue regarding material fact, and evidence is viewed in light most favorable to nonmoving party. (2) Where the evidentiary matter in support of the motion does not establish the absence of a genuine issue, summary judgment may be denied even if no opposing matter is presented. 3. Holding: Even though plaintiff fails to produce any material evidence to support her claim of the officer s presence in the store, defendant fails to disprove the presence of the officer. Since this is an issue of fact, summary judgment is inappropriate. 4. Notes: a. This is a different burden on defendant in summary judgment than in trial i. Burden of persuasion on defendant in summary judgment 1. Burden to disprove the facts of non-moving party ii. Burden is higher in summary judgment than in trial 1. Makes summary judgment much more difficult b. Court is suggesting that right to trial is something parties ought to have xiv. Celotex Corp. v. Catrett; Rule 56 1. Facts: plaintiff claims that husband died from exposure to asbestos in products made or distributed by 15 named corporations, including petitioner. Petitioner filed motion for summary judgment on the basis that respondent failed to produce evidence that any Celotex product was the proximate cause of alleged injuries. 2. Rule: Rule 56(c) mandates the entry of summary judgment against a party who fails to make a showing sufficient to establish the existence of an element essential to that party s case, and on which that party will bear the burden of proof at trial. In such a case, there can be no genuine issue as to any material fact, since a complete failure of proof concerning an essential element of the nonmoving party s case necessarily renders all other facts immaterial. 3. Holding: a party cannot refer only to its pleadings in defending summary judgment. The moving party need not produce evidence to negate the opposing party s claim; it must only show that there is an absence of evidence in support of the opposing party s claim. 4. Notes: a. Aligns burden in summary judgment with burden in trial b. Summary judgment is an important tool to weed-out cases lacking evidentiary support c. Makes summary judgment easier than in Adickes xv. Bias v. Advantage International; Rule 56

10 1. Facts: Bias instructed agent to take out $1 million life insurance policy on Bias. Bias was drafted in NBA, and two days later died from cocaine overdose. Agent had not secured any life insurance policy. Bias estate sues; defendant files summary judgment on the ground that there was no damage because a) Bias was a drug user, and b) as a drug user, Bias could not have obtained a jumbo policy. 2. Rule: In order to withstand a summary judgment motion once the moving party has made a prima facie showing to support its claims, the nonmoving party must come forward with specific facts showing there is a genuine issue for trial. The nonmoving party must do more than simply show that there is some metaphysical doubt as to the material facts. 3. Holding: Defendant produced testimony of two of Bias s teammates regarding numerous specific occasions of Bias s drug use. Plaintiff produced general evidence, but nothing that refuted the specific claims of Bias s teammates. Thus, defendant was able to provide specific evidence in its defense, while plaintiff was only able to provide broad metaphysical doubt as to the facts presented by defendant. 4. Notes: Is court assessing credibility of witnesses? Weighing evidence? xvi. Houchens v. American Home Assurance; Rule 56 1. Facts: Husband of P took flight to Thailand and disappeared. P had two life insurance policies on husband, both of which required that husband s death must be due to accident. After no sign of husband for 7 years, he was declared legally dead under Virginia law. P attempted to collect insurance; D refused. 2. Rule: In factual disputes, burden of proof is on plaintiff to show that there is a greater probability that the fact did happen than that it did not. 3. Holding: Burden is on P to prove that husband died by accidental terms. There are no relevant facts surrounding husband s death; we re not even sure that he s dead. Husband s death/disappearance could have happened any number of possible ways. 4. Note: Applies Celotex standard. C. TRIAL i. In re Boston s Children First; 28 USC sec 455 1. Facts: Petitioners filed suit challenging Boston s elementary school student assigning process, claiming that they had been deprived of preferred school assignments based on their race. Petitioner s counsel made provocative claim about judge in newspaper; judge responded by publicly defending herself. Plaintiffs moved that judge recuse herself. 2. Rule: Section 455 requires any justice, judge, or magistrate of the United States to disqualify himself in any proceedings in which his impartiality might reasonably be questioned. 3. Holding: Judges must maintain an appearance of impartiality. Judge erred in publicly commenting on a newsworthy case. Her comments were ambiguous enough to invite misinterpretation and construe an appearance of partiality. A reasonable person, then, might have seen the judge s comments as creating an appearance of partiality, and the judge should thus be excused.

11 4. Policy: statute seeks to balance two competing policies: 1) that courts must not only be, but seem to be, free of bias or prejudice, and 2) the fear that recusal on demand would provide litigants with a veto against unwanted judges. 5. Writ of mandamus: lawyer goes straight to circuit court and asks that they force the lower court to do (or refrain from doing) something, such as recusing a judge 6. Additional notes on recusal: a. A challenged judge will decide whether or not to recuse herself b. A Supreme Court justice cannot be replaced if they recuse themselves i. The court will then operate with 8 justices, which sets the stage for a divided court (4-4) 1. Divided court affirms lower court decision ii. Right to trial by jury 1. Amendment VII: in suit at common law . . . right to trial by jury shall be preserved a. If Congress chooses to extend the right to trial by jury, they can do that; but they can t contract that right 2. Rule 38: Right to a Jury Trial; Demand a. If you do not demand a trial by jury early in the process, that right can be waived 3. Rule 39: Trial by Jury or by the Court a. Issues on which a jury trial is not demanded are to be tried by the court, but the court may, on motion, order a jury trial on any issue for which a jury might have been demanded 4. When does the right to trial by jury exist? a. Historical test: give the parties the same right that existed when the amendment was established in 1791 i. Compare the nature of claim and remedy being sought with those in 1791 ii. Common law courts: trial by jury; awarded monetary damages iii. Courts of equity (Chancery courts): trial heard by chancellor; awarded equitable remedies 1. So if remedy sought is monetary, you probably get a trial by jury a. Exception: ejectment (make someone get off your land) heard by jury b. Exception: replevin (get back your stuff) heard by jury iv. When there s a case that has claims of relief for both common law and equity, a jury will hear the common law issue and the judge will decide the equitable issues 1. As to common issues between the two claims, the jury s findings are binding on the judge iii. Thompson v. Altheimer & Gray

12 1. Facts: Plaintiff brought suit against employer for racial discrimination. The case was tried and verdict was returned for defendant. Plaintiff appeals, arguing that a particular juror should have been struck for cause. 2. Rule: A party is entitled to a new trial, based on the court s failure to remove a biased juror, where the court has failed to inquire whether the juror could issue an impartial decision unclouded by the juror s prior held belief. 3. Holding: If the jury should have been struck for cause (i.e. bias), then plaintiff is entitled to a new trial without having to show that juror s presence on the jury caused the jury to side with the defendant. When a prospective juror manifests a belief that is both material and contestable (for it is not bias to cling to a belief that no rational person would question), it is the judge s duty to determine whether the juror is capable of suspending that belief for the duration of the trial. When, as in this case, the record contains no assurances that the prospective juror can exercise a judgment unclouded by that belief, the verdict cannot stand. iv. Jury selection 1. First, a pool of prospective jurors is summoned; second, the members of the trial jury are selected from the pool (through voir dire, challenges) 2. Rule 47: Selecting Jurors a. The court may permit the parties or their attorneys to examine prospective jurors or may itself do so 3. Rule 48: Number of Jurors; Verdict; Polling a. Jury must be between 6 and 12 members b. Unless the parties stipulate otherwise, the verdict must be unanimous 4. Inclusiveness: jury must represent a fair cross-section of the community (28 USC sec. 1861) a. Because what we see is influenced by our background b. And the outcome of an inclusive jury will be viewed with more legitimacy 5. Anti-exclusivity: can t exclude based on race, color, religion, sex, national origin, or economic status (28 USC sec. 1862) a. But you can be excused if you belong to one of several groups (i.e. armed forces, firemen), for undue burden, or for bias 6. Removal for cause: parties are removed who are unable to be ignorant, unbiased of case (i.e. because of some prior relationship) 7. After a challenge for cause, both sides can then use their 3 peremptory challenges to exclude potential jurors a. But peremptory challenges are subject to certain limitations (i.e. can t use race or gender as a basis for exclusion) b. Objections to peremptory challenges must make an initial showing that allows a court to infer a pattern based on race or gender Controlling the Jury v. Reid v. San Pedro, Los Angeles & Salt Lake Railroad; Rule 50

13 1. Facts: Plaintiff s cow was struck and killed by defendant s train. Defendant maintains fence along train tracks, and there was a hole in fence. There were also crossing gates along the tracks, and these gates were up. If the cow entered tracks through hole in fence, defendant is liable. If cow entered tracks through open gates, defendant is not liable. 2. Rule: Where the undisputed evidence of the plaintiff, from which an essential fact is sought to be inferred, points with equal force to two things, one of which renders the defendant liable and the other not, the plaintiff must fail. 3. Holding: The cow was killed near enough to both the hole in the fence and the open gates as to have possibly entered the tracks through either opening. Plaintiff failed to show evidence that cow entered through hole in fence. With two equally likely scenarios, the defendant cannot be held liable, and the trial court should have directed a verdict for defendant because the jury made an insupportable conclusion when it found the defendant liable. 4. Note: statistical evidence in the abstract is not enough for plaintiff to meet burden of production a. i.e. White Cab Co. owns 75% of taxi cabs, and victim was hit by a taxi cab vi. Rule 50: Judgment as a Matter of Law in a Jury Trial; Related Motion for a New Trial; Conditional Ruling 1. If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may (1) resolve the issue against the party and (2) grant a motion for jnov against the party on a claim or defense that can be maintained or defeated only with a favorable finding on that issue 2. A motion for JMOL can be made at any time before the case is submitted to the jury 3. A party may renew its JMOL motion up to 28 days after the entry of judgment 4. A party moving for a jnov may make a conditional motion for a new trial a. This alternative comes into play only if the jnov is later vacated or reversed b. Allows the COA to consider all rulings at once c. In this case, the ruling for a new trial is appealable 5. Notes: a. Prevents irrational decision-making based on irrelevant or prejudicial evidence b. Gives system appearance of legitimacy predictable outcomes c. Similar devices to JMOL existed in 1791 in common law d. Jnov is a renewal of a directed verdict i. So you must make a pre-verdict motion for a directed verdict to move for a jnov; both motions must pertain to the same thing ii. Reason for directed verdict first is to allow the other side to fix an egregious error (i.e. forgetting to introduce evidence) e. Defendant may move for directed verdict after plaintiff presents evidence because plaintiff has burden of production i. If burden is not met, can end case

14 ii. Plaintiff may not move for dv here because defendant hasn t been allowed to present his evidence f. Directed verdict: really testing the burden of production vii. Norton v. Snapper Power Equipment; Rule 50 1. Facts: P was using a lawnmower manufactured by D. While riding up a hill, lawnmower slid backwards and fell into a creek, amputating several of P s fingers. 2. Rule: In applying a directed verdict and jnov, court considers the evidence in the light most favorable to the non-moving party and should grant the motion only where the evidence so strongly and so favorably points in the favor of the moving party that reasonable people could not arrive at a contrary verdict. 3. Holding: Expert testimony shows that P may have a case that product was defective, and trial judge erred in granting jnov to Snapper 4. Note: Even though judge thinks defendant will clearly win, it s easier to allow jury to come to same verdict viii. Pennsylvania Railroad v. Chamberlain; Rule 50 1. Facts: Brakeman was working in train yard when he fell from car he was riding and was run over and killed by another car. Plaintiff alleges deceased was thrown from his car when defendant negligently allowed a string of cars to crash into deceased s car. Defendant produces a series of witnesses who testify that there was no such crash. Plaintiff produced a single witness who was not in close proximity to the event, and who testified that he heard the crash and later saw deceased s body. Plaintiff infers the string of events from this testimony. 2. Rule: A defendant is entitled to a directed verdict in a case where the proven facts give equal support to each of two inconsistent inferences, and where the plaintiff has the burden of proof. 3. Holding: Plaintiff s witness s testimony is suspicious at best, and allows for the equal possibility of the events occurring the way plaintiff described or not occurring the way plaintiff described. Otherwise, there is no direct evidence that in fact the crash occurred how the plaintiff described. 4. Notes: a. Directed verdict cases, like summary judgment cases, are based on a lawyer s ability to tell a persuasive story using scattered pieces of evidence b. Here, they seemed to be weighing the credibility of plaintiff s witness against that of the defendant s witnesses (bad approach to granting dv/jnov) ix. Lind v. Schenly Industries; Rule 59 1. Facts: Plaintiff, a manager for defendant, alleged that defendant had orally promised him an increase in pay and a share of commission, but then breached that promise. Plaintiff and his secretary testified to such promises, which defendant denied. Jury found a contract and awarded damages. Defendant moved for jnov and a new trial. 2. Rule: (1) The granting of a new trial may be reversed if the trial judge abused his discretion in granting the new trial. (1a) In new trials granted due to a jury s verdict

15 being against the weight of the evidence, abusing discretion typically refers to a trial judge substituting his judgment for that of the jury. 3. Holding: Where no undesirable or pernicious element has occurred or been introduced into the trial and the trial judge nonetheless grants a new trial on the ground that the verdict was against the weight of the evidence, the trial judge in negating the jury s verdict has, to some extent, substituted his judgment of the facts and the credibility of witnesses for that of the jury. Order reversed; verdict reinstated. 4. Notes: Why allow case to go to jury? a. To allow jury to do its job (make a decision), and for jury to take responsibility for verdict on appeal (?) x. Rule 59: New Trial; Altering or Amending a Judgment 1. Judge may order a new trial even if neither party so moves 2. Notes: a. To grant a new trial, the standard is when the jury s verdict is: i. Contrary to the weight of the evidence ii. Contrary to law, or iii. A result of error in the admission of evidence b. It undermines the jury if judge can just order a new trial every time he thinks the jury got it wrong c. COA will not reverse the grant of a new trial unless the trial judge made an egregious error d. Trial judge s discretion should be broad to grant a new trial because it allows both parties to present their cases again (rather than just reversing the jury s verdict) e. If new trial is granted, grant is not immediately appealable (because there is no final ruling) f. A judge may grant a new trial limited to the issue of damages i. But judge must be convinced that whatever influences led the jury astray on damages did not infect the judgment on liability as well g. Remittitur: the judge orders a new trial unless the plaintiff agrees to accept reduced damages h. Additur: the damage-increasing analogue of remittitur i. Supreme Court has ruled that additur violates 7th amendment but that remittitur does not because remittitur involves modifying a decision actually made by a jury, while additur involves making an award that no jury has ever made xi. Verdict forms and special verdicts 1. General verdict: leaves all questions about the legal and factual merits in the juror s hands. It asks the jury only to declare which side has prevailed and fix damages, if appropriate.

16 2. General verdict with interrogatory: jury is asked to deliver a verdict but also to answer a series of supplemental questions. These questions focus on the factual underpinnings of the verdict and require the jurors to specify a number of their factual conclusions a. Point is to make sure the jurors have understood the case an rationally integrated facts and law; particularly useful in complex cases 3. Special verdict: requires the jurors to answer a series of special questions about the facts of the case. The court then uses these answers to determine the legal outcome. This removes the jury s ultimate decision-making power. xii. Civil Jury 1. For: a. Judge bias b. Keep human element c. Allows breadth of experience d. Democratic e. Perception of justice 2. Against: a. Erratic b. Lack of understanding c. Quick to be swayed d. Racial bias e. Sympathy f. Judge can determine lower stakes 3. Solutions: a. Clearer instructions b. Jury size? (smaller less diverse) c. No determination of damages d. Let jury do research e. Eliminate sympathy bifurcation 4. A lot of research to show that judges are no more competent in complex cases than juries 5. Jury findings do not result in precedent a. So jury findings can t result in bad law 6. 7th amendment designed to be a check on potentially elite/oppressive judges D. THE MEANING OF COMPLETED ADJUDICATION i. Former Adjudication: the effect of judgments on subsequent litigation 1. Arises in a 2nd lawsuit when the claim or issue(s) has already been adjudicated in a prior suit 2. Because pleading system is so lenient (lots of opportunity to amend plea), former adjudication rules are fairly harsh 3. Merger = when claim or issue preclusion comes into effect, the second action is said to have been merged with the first action a. Bar = first action bars the second action

17 4. Rationale a. Finality/repose: get on with your life b. Efficiency: inefficient use of judicial resources, unfair to future litigants c. Consistency of outcomes 5. Constitutional Basis: Article IV, Section I: Full faith and credit a. 28 USC sec 1738: full faith and credit i. Federal courts won t ignore the rulings of state courts in matters of former adjudication 6. Comity: state court will usually give full faith and credit to a federal court judgment 7. Note: Former adjudication principles apply even when P wins the first lawsuit. a. If there s a jurisdictional limit in bringing claims in your first suit (i.e. municipal court allows claims only up to $15k), those claims now allowed will not be precluded in a subsequent suit 8. In identifying former adjudication issue, look for a series of lawsuits ii. Claim Preclusion (res judicata): forbids a party from litigating a claim that was, or could and should have been raised, in former litigation. 1. Requires: (1) same claim, (2) same parties, (3) final judgment, and (4) on the merits a. On the merits included so that claim preclusion wouldn t apply to claims dismissed for procedural matters (i.e. lack of jurisdiction) b. Preclusion requires that parties to the second action be the same parties as the parties to the first action i. And generally, they must be adversaries 1. i.e. A defendant who could have brought a cross-claim against a second defendant is not then barred from bringing that claim in a second suit 2. In trying to decide the preclusive effect of a judgment one should look to the jurisdiction rendering that judgment. For the Frier court the question was whether the courts of Illinois, which rendered the first judgment in the preclusion action, would bar the civil rights claim. This is almost always the right analysis. a. i.e. A federal court, confronted with a second action after a previous action in state court, will apply the claim preclusion rules of the state court that rendered the previous judgment 3. Different parties possess different claims for preclusion purposes, even when those claims arise out of the same transaction. 4. Generally, courts apply the transaction test: if claims arise out of the same transaction, then they need to be brought in the same suit. If they aren t, then the plaintiff waives his right to those claims a. Because joinder of claims is applied liberally, allowing a plaintiff to assert all claims arising out of a transaction i. Efficiency 5. Claim preclusion applies to default judgments (D had the opportunity to litigate) and summary judgments

18 6. In rare occasions, a nonparty is bound by the judgment (for preclusion purposes) rendered to a party if the two parties were in privity a. Generally, the party must expressly represent the interest of the nonparty (i.e. legatees of a will would be bound by litigation on their behalf by the executor; a buyer of property would be bound by a judgment against the seller). iii. Frier v. City of Vandalia; claim preclusion 1. Facts: P parked car on a narrow street, forcing others to drive on someone else s lawn to get around. Police towed car to garage. P refused to pay fee. Police had 4 more of P s cars towed to garage. P sued in state court, seeking replevin. After losing, P sued in federal court, alleging Due Process violation of 14 Amendment because D did not grant him a hearing before or after it took his cars. 2. Rule: One suit precludes a second where the parties and the cause of action are identical. Causes of action are identical where the causes of action are based upon a common core of operative facts. 3. Holding: Actions involved the same core of operative facts, and both lawsuits attack the same conduct (towing and detaining cars without determination of parking violation). Could have joined constitutional claim with demand for replevin and therefore had a full and fair opportunity to litigate. 4. Note: Debate of which test would apply: same claim/event test, or same evidence test. Why bar a second action arising from the same event? Because you could have brought all claims in the first action (efficiency). This puts pressure on P to bring all possible claims in the first lawsuit. In reaching decision here, court relied heavily on efficiency considerations. When facts and issues of all theories of liability are closely related, one case is enough. iv. Rule 13: Counterclaim and Crossclaim 1. A pleading must state as a counterclaim any claim that at the time of its service the pleader has against an opposing party if the claim: arises out of the transaction or occurrence that is the subject matter of the opposing party s claim, and does not require adding another party over whom the court cannot acquire jurisdiction. a. Cross-claims are also allowed, but must arise from the same transaction or occurrence as the original claim or a counterclaim i. Must satisfy 1367 2. If there are common questions of fact between the claims, it makes more sense to decide them all at once a. Efficiency considerations b. Avoids inconsistent verdicts on the issues if the claims were to be brought separately 3. There are no compulsory crossclaims, so crossclaims are not precluded due to res judicata 4. (h): you can add another party to a crossclaim if the standards of 20(a) same occurrence, common question of law or fact are met 5. A claim in response to a crossclaim is a counterclaim

19 v. Martino v. McDonald s System, Inc.; Rule 13, Claim preclusion 1. Facts: P entered into franchise agreement with D; contract provided that neither P nor any member of his immediate family would acquire interest in a competing self-service food business. P s son purchased competing restaurant, D sued. Parties entered into consent agreement, ending litigation. P then sued, alleging that anti-acquisition clause violated antitrust laws. D moved to dismiss, stating that Rule 13(a) under compulsory counterclaims precluded the action, and claiming res judicata. 2. Rule: (1) When facts form the basis of both a defense and a counterclaim, D s failure to allege these facts as a defense or a counterclaim does not preclude him from relying on those facts in an action subsequently brought by him against the P. (2) Res judicata bars a counterclaim when its prosecution would nullify rights established by the prior action. 3. Holding: Rule 13(a) does not apply unless there s been some sort of pleading. In the prior consent judgment, Martino filed no pleading. However, P is barred from bringing the claim because it is a direct attack on the termination of rights established in the earlier (consent) judgment. Previous judgment told D that D was justified in terminating P s franchise ownership, and the present claim seeks to contradict this right and impose costs on D for relying on that judgment. 4. Note: Before the answer has been filed, there hasn t been any great expenditure of judicial resources, so fairness to the D takes precedent (D should get to choose his day in court) (Rule 13). a. Defenses are treated just like claims: if you have a defense that could have been brought in the first suit (and you didn t bring it), then you can t use it as a basis for another claim b. In situations where 13(a) doesn t apply, issues that could have been used as both a defense and a counterclaim are not precluded from being use in a subsequent claim c. Consistency of outcomes: if there s a risk of inconsistent judgments, then a counterclaim can t be the basis for a second lawsuit vi. Searle Brothers v. Searle; collateral estoppel, res judicata 1. Facts: D sued husband for a divorce. Court determined that Slaugh House was marital property, gave entire property to D. Husband alleged that he was only half-owner, and that other half was owned by his sons. P brought suit against D for the one-half interest. 2. Rule: Four-part test for determining the applicability of collateral estoppel: a. Was the issue decided in the prior adjudication identical with the one presented in the action in question? b. Was there a final judgment on the merits? c. Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication? d. Was the issue in the first case competently, fully, and fairly litigated? i. If all four questions are answered affirmatively, then collateral estoppel applies. In other words, collateral estoppel applies to one whose interest has been legally represented in the prior case.

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vii.

viii.

ix. x.

3. Holding: Collateral estoppel can only be asserted against a party in the subsequent suit that was also a party or in privity with the party in the prior suit. The sons were not legally represented in the prior suit because the husband was not acting in a representative capacity for the sons. 4. Notes: It is sometimes possible for someone not formally named as a party to be so closely connected to a suit that it is appropriate to treat her as if she were named ( in privity ). Privity: one whose interest has been legally represented at the time. Gargallo v. Merrill Lynch, Pierce, Fenner & Smith; 28 USC 1738 1. Facts: P had account with D; account lost money and D sued to collect. P counterclaimed alleging violations of federal securities law (which falls exclusively under federal jurisdiction). Counterclaim was brought in Ohio state court, which dismissed claim with prejudice. P then brought same claim in federal court, which dismissed based on res judicata. 2. Rule: A state court final judgment on the merits has no claim preclusive effect with respect to federal claims not within the jurisdiction of the state court, even though the federal claims arose out of the same transaction as the state court claims. 3. Holding: Since the Ohio court ruled on a matter in which it did not have subject matter jurisdiction, the ruling does not have preclusive effect. Matsushita Elec. Industrial Co. v. Epstein; 28 USC 1738 1. Facts: D was hit with two lawsuits on behalf of MCA shareholders after D acquired MCA. One alleged breach of federal securities laws; the second, filed in Delaware State Court, alleged breaches of various state law fiduciary responsibilities. The claims in the federal actions fell within the federal courts exclusive jurisdiction. After the federal court granted summary judgment to D in the federal case, but while those cases were on appeal to the COA, the parties to the Delaware action negotiated a global release of all claims arising out of the Matsushita-MCA acquisition. The Delaware court approved the settlement. Later, D asserted the judgment embodying the settlement as a bar to the federal action. 2. Rule: Federal courts must treat state court judgments with the same respect that they would receive in the courts of the rendering state. 3. Holding: Federal courts may not employ their own rules in determining the effect of state judgments, but must accept the rules chosen by the state in which the judgment is taken. Here, Delaware courts would determine the settlement to preclude all claims (state AND federal) resulting from the issue in the settlement. Thus, the claim is precluded in federal court. 4. Notes: Here, the court implicitly made the point that a state court can approve a settlement plan containing provisions over which the state courts lacks jurisdiction. Rule 41: Dismissal of Actions Issue Preclusion (collateral estoppel): bars from relitigation only those issues actually litigated and determined. But they will be barred from relitigation in all subsequent claims between the parties and, according to recent doctrine, in some claims that do not involve both parties.

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1. Requires: (1) same issue, (2) actually litigated, (3) actually decided (A or B, Parks), and (4) necessary/essential to the judgment (A + B) a. Unlike claim preclusion, under which claims are barred even if not raised, issue preclusion only applies to issues actually decided in the prior action. i. In a default judgment, it is likely that no issues are collaterally estopped because no issues were actually decided. b. Note that on the merits is not an element of issue preclusion (as it is with claim preclusion) i. So if an issue is actually decided, issue preclusion might still apply, even if the case is ultimately dismissed for lack of personal jurisdiction c. Requires an issue to be essential to the judgment. Can t just be dicta, or else the judge might not have given it the necessary thought/attention 2. Note: Pay attention to different burdens of proof between civil and criminal cases a. Beyond a reasonable doubt v. preponderance of the evidence i. i.e. issues proven in a civil trial are not precluded from relitigation in a criminal trial 3. Non-mutual offensive issue preclusion: to be bound in a second lawsuit, the first party must have been present in the first lawsuit and able to give a good faith opportunity for its case. a. If this is satisfied, another party may evoke issue preclusion on issues litigated and determined, even if that party was not present in the first suit (i.e. a husband suing RR for his injuries from a car crash after his wife successfully demonstrated RR s negligence in a suit for her injuries from the same car crash). i. The rationale here is that the victim of issue preclusion had a full and fair opportunity to litigate the matter in the first suit. xi. Illinois Central Gulf Railroad v. Parks; Issue preclusion 1. Facts: Ps, Jessie and Bertha, were injured when a car driven by Jessie in which Bertha was a passenger, collided with D s train. Bertha sought compensation for her injuries and Jessie sought damages for loss of Bertha s services and consortium. Bertha was successful; Jessie was not. Jessie then sued D for his own injuries. 2. Rule: Issue preclusion, which allows the judgment in the prior action to operate as an estoppel as to those facts or questions actually litigated and determined in the prior action, only applies if the moving party can show that the specific factual issue in question was actually adjudicated on the merits in the prior suit. 3. Holding: First, the verdict in favor of Bertha established that the railroad was negligent. Second, there is a verdict again Jessie, but it could have been for either of two reasons (his evidence was not persuasive or he was contributory negligent) so there is no issue preclusion on this particular issue. When two reasons are given for a judgment (A + B), neither reason is sufficient for issue preclusion. (If you have alternative reasons for an issue, neither is precluded).

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III.

a. We re not sure if the judge gave the same rigor/weight to both issues. Though there is some inefficiency in reconsidering the same issue, fairness trumps efficiency. 4. Notes: Under Indiana law, this claim is not precluded (seen as a different cause of action for purpose of claim preclusion), though the test is different under federal jurisdiction. THE CONSTITUTIONAL LANDSCAPE A. CONSTITUTIONAL LIMITS ON ADJUDICATORY POWER: PERSONAL JURISDICTION i. Subject matter jurisdiction: the power of federal (as opposed to state) courts to decide certain kinds of cases 1. Can never be waived by the parties (Rule 12); if subject matter jurisdiction doesn t exist, you can t get in to federal court 2. Is about the structure of our government ii. Personal Jurisdiction: the power of a state court to render a judgment binding someone who may have never set foot in the state 1. A court must have both subject matter and personal jurisdiction to render a valid judgment 2. Can be waived if the issue isn t raised in your first appearance in the lawsuit 3. Is about fairness and convenience to the parties 4. You can challenge a judgment for lack of personal jurisdiction if it s a default judgment iii. Article IV, Section 1 requires that Full Faith and Credit be given in each state to judicial proceedings of every state. The Supreme Court has interpreted this clause to require that one state recognize and enforce the judgments of another state. iv. Amendment XIV, Section 1 (Due Process Clause): no state shall deprive any person of life, liberty, or property without due process of law. 1. Right to counsel, right to examine witnesses, right to have some say in where the lawsuit is brought v. Pennoyer v. Neff; 14th Amendment, Personal Jurisdiction 1. Facts: Mitchell sued Neff (not an Oregon resident) to recover unpaid fees, published notice of the lawsuit in an Oregon newspaper. Neff failed to appear and default judgment was entered against him. Mitchell seized land which Neff had acquired after the suit to sell at auction. Pennoyer purchased the land. Neff sued Pennoyer in Oregon to recover property, claiming that judgment against him was invalid for lack of personal jurisdiction. 2. Rule: A court may enter judgment against a non-resident only if the party a) is personally served with process while within the state, or 2) has property within the state, and that property is attached before litigation begins (i.e. quasi in rem jurisdiction). 3. Holding: The Oregon court did not have personal jurisdiction over Neff because he was not served in Oregon. The court s judgment would have been valid if Mitchell had attached Neff s land at the beginning of the original suit. Mitchell could not have done this because Neff did not own the land at the time Mitchell initiated the suit. The default judgment was declared invalid

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4. Notes: a. Personal jurisdiction is a part of US constitutional law because of Pennoyer b. The problem with the first lawsuit is a problem of notice; you can t expect this out-of-state guy to read fine print in state newspaper c. A transient presence (i.e. traveling for business within the state) is good enough for service of process d. An in personam suit is a suit against a person, whose purpose is to determine the personal rights and obligations of the defendant. An in rem action, meanwhile, is an action where jurisdiction pertains to property. e. Court reasoned that constructive notice (as opposed to actual notice) is sufficient to inform parties of action taken against any properties owned by them within the forum state, because property is always in possession of the owner, and seizure of the property will inform the owner of legal action taken against him. But the property must be attached before the suit begins to properly alert its owner. f. Marriage (determinative of status relationship) and consent are exceptions to Pennoyer g. State Sovereignty: states have power over the people and property within their jurisdictional limits i. Question here is court s authority to exercise jurisdiction over the person of the defendant 1. The court established that plaintiff is not free to sue anywhere they choose 2. States have power only within their boundaries (state sovereignty and due process) 3. State violates due process if it enters judgment against defendant without adequate notice 4. You can attach the property and gain authority over the person a. Or serve them within state boundaries h. Pennoyer worked for its time period, but the world changed rapidly (industrialization, railroads, cars, etc.), became a much more mobile country, and corporate entitled developed (who have no real presence ) i. 3 ways for a state to exercise jurisdiction: i. In personam: personal service of process ii. In rem: attach property before trial iii. Quasi-in rem: attach property for a claim that is not related to the property 1. (Quasi-in rem overturned in a later case) vi. International Shoe Co. v. Washington; Personal Jurisdiction (minimum contacts) 1. Facts: D was a Delaware corporation with principle place of business in St. Louis. Its only contacts with Washington were a dozen salesmen it employed for three years in the state. These salesmen did not have authority to make contracts or collections; prices,

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terms, and acceptance or rejection of footwear orders were established through St. Louis. State of Washington sued D to recover unpaid contributions to the unemployment compensation fund. Notice was served personally on an agent of D within the state and by mail to corporate HQ. 2. Rule: In order for a state to exercise personal jurisdiction over a defendant, the defendant must have such minimum contacts with the state so that exercising jurisdiction over the defendant would not offend traditional notions of fair play and substantial justice. 3. Holding: The activities carried on by D in Washington were systematic and continuous rather than irregular or casual. A large volume of interstate business for D was created through its agents within the state. D also received the benefits and protection of the laws of the state and is thus subject to jurisdiction there. 4. Notes: In general, contacts with a state should be evaluated in terms of how fair it would be to exercise jurisdiction over an absent D. Must look at the context of the contacts (equity considerations). a. Applies to both corporate defendants and individual defendants b. Where jurisdiction is based on limited in-state contact, the claim must arise out of the contact to support personal jurisdiction. c. Also look at problems on p. 82 vii. General Jurisdiction v. Specific Jurisdiction 1. Specific: jurisdiction arises directly out of activities asserted in claim a. A single act within the state may give rise to specific jurisdiction b. Where the D s activities fall short of general jurisdiction, the minimum contacts analysis of International Shoe becomes important. All other things being equal, the more closely related the contacts and the facts giving rise to the claim, the more likely to court is to uphold jurisdiction. 2. General: claim does not relate to jurisdiction at all a. Corporation is subject to general jurisdiction in the state of incorporation and the state where it has its primary manufacturing facilities, and where it has its corporate headquarters b. An individual has general jurisdiction in the state where he has his domicile c. General jurisdiction: substantive and pervasive contacts viii. McGee v. International Life Insurance Co.; Personal Jurisdiction 1. Facts: P, resident of California, had life insurance policy with D, which was based in Texas. P paid premiums by mail and sent them to D s Texas office until P s death. D then refused to pay-up. D never had any office or agent in California. 2. Rule: A state court s jurisdiction satisfies due process when it is based on a contract with substantial connection with that state. 3. Holding: It is sufficient for purposes of Due Process that the suit was based on a contract that had substantial connection with California. A state has a manifest interest in providing effective means of redress for its residents when their insurers refuse to pay claims.

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4. Notes: The Court, in considering the fact that the contract was delivered in California, the premiums were mailed from there, and the insured was a resident of California when he died, combined with the recognition that modern transportation and communication have made it much less burdensome for a party sued to defend themselves in a state where they conduct business, found that it did not violate just and fair play for the California court to enter a binding judgment on International Life. Moreover, the Court reasoned that California residents would be at a severe disadvantage if they were forced to follow the insurance company to a distant state in order to hold the insurer legally accountable. a. This decision reflected a growing and increasingly more sophisticated economy, in which more commercial transactions were taking place across state lines. ix. Hanson v. Denckla; Personal Jurisdiction (purposeful availment, unilateral activity) 1. Facts: P had established a trust in Delaware and later moved to Florida where she died. A family fight arose over which court had jurisdiction over the trust assets; the issue turned on whether Florida could acquire jurisdiction over the Delaware trustee (D, a bank based in Delaware). 2. Rule: (1) There must be some act by which the D purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws, for that state to hold personal jurisdiction over the D. (2) The unilateral activity of a P who claims some relationship with a non-resident D cannot satisfy the requirement of contact with the forum state. 3. Holding: There must be limits on personal jurisdiction. Nonresidents must be protected from the burden of defending a suit in a distant and inconvenient court. In this case the D had no office and transacted no business in Florida. This cause of action did not arise from acts or transactions in Florida. There must be some act by which D purposefully avails itself of the privilege of conducting activities within the forum state. There was no such act here. Thus, this case fails the minimum contacts test for Florida. 4. Notes: a. Purposeful availment of the forum state is added into minimum contacts analysis. b. Distinguishable from McGee: i. Texas insurance company reached into state of California and thereafter engaged in business in California ii. Trust company did not solicit any business in Florida; the decedent is taking the defendant into Florida (unilateral activity) c. A D can act outside of the state and still have jurisdictional consequences within the state (like in McGee). d. Even if it s not unduly inconvenient for D to come into forum state, if there is no purposeful availment, the state does not have jurisdiction. x. World-Wide Volkswagen Corp. v. Woodson; Personal jurisdiction (foreseeability) 1. Facts: P purchased an Audi from D1, a New York car dealership. While driving through Oklahoma, they were hit from behind, causing a fire which caused severe injuries. P

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brought suit in Oklahoma state court against car dealership and its distributor, WWVW. The Ds were New York corporations and conducted no business in Oklahoma. Ds objected to Oklahoma s jurisdiction. 2. Rule: The party s contacts with the state must be such that maintenance of the suit does not offend traditional notions of fair play and substantial justice. The relationship between the party and the state must be such that it is reasonable to require the corporation to defend the particular suit which is brought there. 3. Holding: Here, there is a total absence of circumstances that are necessary to permit an exercise of personal jurisdiction under the minimum contacts test. Ds did not solicit business in Oklahoma through salespersons or advertising reasonably calculated to reach the state. Although it was foreseeable that one of their cars could be involved in an accident in Oklahoma, foreseeability alone is not sufficient for jurisdiction. The degree of foreseeability that must exist is not the mere likelihood that a product will find its way into the state, but that the D s conduct and connection with the state are such that he should reasonably anticipate being haled into court there. 4. Notes: a. Purposeful availment (voluntary connection with state by D) is still very important here b. Jurisdiction must be based not on the fact that a defendant could foresee that events might happen in a state that would lead to a claim against her, but rather on purposeful availment. 5. Dissent: It would be difficult to believe that Ds truly believed that none of the cars sold would ever leave the New York area. Their contacts with Oklahoma were not extensive but it was reasonable for them to be subjected to jurisdiction. Fairness dictates that the sale of a mobile item such as a car should satisfy the minimum contacts test. xi. Note: In theory, a successful motion to dismiss for want of personal jurisdiction only delays the suit. So why do defendant s bother? 1. In a marginal case, the suit might go away entirely. The statute of limitations in the new forum state may have fun. Or there could be a much lower damage bill. P s lawyer has to locate a competent practitioner in another state and arrange for her to take over the case, a process involving some expense. If witnesses have to travel, the added expense might make bringing the suit irrational. 2. D has done two things: he s delayed the date at which he may have to pay damages (in many tort suits interest does not run until judgment is entered) and he s moved the case to a different forum which may be friendlier. xii. Page 111, Problem 4 xiii. Asahi Metal Industry Co. v. Superior Court; Personal jurisdiction (stream of commerce) 1. Facts: P lost control of motorcycle and collided with tractor; he was seriously injured and his passenger was killed. P claimed the accident was a result of a defective tire tube. P brought suit in California against Taiwanese manufacturer of tire tube (Cheng Shin) and Japanese tire valve assembly manufacturer (Asahi). Asahi had sold tire valve assemblies directly to Cheng Shin and Cheng Shin then incorporated the valves into the

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motorcycle tires. Asahi did no business in California and did not directly import any products to California. Only 1.24% of the company s income came from sales to Cheng Shin and only 20% of Cheng Shin s sales in the US were in California. (P settled with Cheng Shin). 2. Rule (O Connor, plurality): The mere awareness that a product may reach a remote jurisdiction when put in the stream of commerce is not sufficient to satisfy the requirement for minimum contacts under the Due Process Clause. 3. Fairness Factors: (1) What is the burden on the defendant? (2) What are the interests of the forum state in the litigation? (3) What is the interest of the plaintiff in litigating the matter in that state? (4) Does the allowance of jurisdiction serve interstate efficiency? (5) Does the allowance of jurisdiction serve interstate policy interests? 4. Holding: The Court found that in this case, the burden on the defendant was severe based on both the geographic distance and legal dissimilarities between Japan and the United States. Cheng Shin was not a California resident, diminishing California's interest in the case. Cheng Shin also did not show that it would be inconvenienced if the case for indemnification against Asahi were heard in Japan or Taiwan instead of California. Finally, neither interstate efficiency nor interstate policy interests would be served by finding jurisdiction. 5. Notes: a. Basically, Asahi had no regular course of dealing with California, and it did not avail itself of California laws/the California market. All it did was put its products into the stream of commerce, knowing that they could end up in California. It had little control over the final destination of its products once they were delivered into the stream of commerce. b. However, COURT DID NOT COME TO A CONCLUSION REGARDING THE STREAM OF COMMERCE xiv. McIntyre v. Nicastro; Personal jurisdiction (incorrectly decided?) 1. Facts: P (Nicastro) injured his hand while using a metal-shearing machine manufactured by D. Accident occurred in New Jersey, but the machine was manufactured in England, where D is incorporated and operates. D did not advertise in nor send any employees to New Jersey. D sold its machines to the US through its distributor (McIntyre America), but only about 4 machines ever made it to the state. However, D did appear in trade conventions, and nearly 100 members of these trade conventions are based in New Jersey. And New Jersey is the scrap metal capital of the US. 2. Rule: The stream-of-commerce metaphor is not sufficient to supersede the Due Process clause or the limits on judicial authority that the clause ensures. To fall under a state s jurisdiction, a party must reveal intent to invoke or benefit from the protection of that jurisdiction s laws. 3. Holding: D did not intend to invoke or benefit from the protection of New Jersey s laws. D did not have a single contact with the state other than the machine happening to end up there.

28

4. Dissent: Where in the US buyers reside does not matter to D; its goal is simply to sell as much as it can, wherever it can. It excludes no state or region from the market it wishes to reach. But it prefers to avoid products liability litigation in the US, so it engages a US distributor. The machine arrived in P s New Jersey workplace not randomly or fortuitously, but as a result of the US connections and distribution system that D deliberately arranged. New Jersey has an interest in protecting its citizens from dangerous products, and its exercise of jurisdiction over a foreign manufacturer whose dangerous product caused a workplace injury in New Jersey does not tread on the domain, or diminish the sovereignty, of any sister State. Moreover, how could D not have intended, by its actions targeting a national market, to sell products in the 4th largest destination for imports among all states and the largest scrap metal market? a. D is just hiding behind its distributor. It s possible (likely) that the distributor was created specifically for purposes like this (to limit products liability suits). 5. Note: Here, there are no minimum contacts because no purposeful availment so fairness factors don t come into play. Court might be trying to reduce emphasis on D s intent and focus more on state sovereignty xv. Burger King Corp. v. Rudzewicz; Fairness factors 1. Facts: D opened a franchise. P was incorporated in Florida and a choice-of-law clause in the contract indicated that Florida law was controlling. All financial obligations owed to P were sent to Florida and D received training in Florida. D failed to meet his financial obligations under the contract. P sued in Florida. 2. Rule: A court must balance four factors in determining the reasonableness of personal jurisdiction: the burden on the defendant, the forum state s interest in adjudicating the dispute, the interstate judicial system s interest in obtaining the most efficient resolution of controversies, and the shared interest of the several states in furthering fundamental substantive social policies. 3. Holding: there must be fair warning that a particular activity may subject a party to suit in another jurisdiction. The fair warning requirement is satisfied when a party has purposefully directed his activities at the forum. Parties who reach out and create continuing relationships and obligations in another state are subject to regulation and sanctions in that state for the consequences of their activities. The foreseeability that is critical for due process is that the defendant s conduct and connection with the forum are such that he would reasonably anticipate being haled into court there. a. Once purposeful availment and minimum contacts are satisfied, the four World Wide factors must be analyzed. b. The franchise agreement allowed D to benefit from an association with a Florida corporation for twenty years. D had continuing and direct contacts with P. The fact that D s contacts were purposeful allowed the state to exercise personal jurisdiction despite that those contacts were minimal. The contract indicated that Florida law would apply. It cannot be a shock that P would sue D there for a breach of the contract in light of the clear contractual terms of the agreement.

29

4. Dissent: It is unfair to require a franchisee to defend a case of this kind in a forum chosen by the franchisor. D did no business in the state of Florida. The principal contacts were in Michigan with the local office of P. D had a local operation with far less resources than P. It would be fundamentally unfair for D to be required to defend in Florida. 5. Notes: Asahi utilizes fairness factors in determining outcome. Minimum contacts are ALWAYS necessary (including foreseeability and purposeful availment), but minimum contacts may not be sufficient because of fairness factors. Asahi: there are minimum contacts, but fairness factors come into play to force the outcome. xvi. Pavlovich v. Superior Court; Personal jurisdiction (aim conduct at state) 1. Facts: D is a Texas resident; he does not reside or work or own property in California. Neither P nor his company has ever solicited business in California or has any business contacts in California. P operated a website consisting of a single page with text and links to other sites. The site did not solicit or transact any business and permitted no interactive exchange. Posted the source code of DeCSS program on its site. DeCSS was based on CSS, and was a tool used to decrypt DVDs which CSS encrypted. The manufacturer of CSS sued in California, claiming that D s actions may harm industries in California (film and software industries). 2. Rule: A plaintiff asserting a claim based on specific jurisdiction against a non-resident defendant performing no business in the state must point to contacts that demonstrate that the defendant expressly aimed its tortious conduct at the forum state. 3. Holding: Merely asserting that D knew or should have known that his intentional acts would cause harm in the forum state is not enough to establish jurisdiction. Instead, P must point to contacts that demonstrate that D expressly aimed its tortious conduct at the forum. Knowledge that his tortuous conduct may harm industries centered in California is undoubtedly relevant to any determination of personal jurisdiction and may support a finding of jurisdiction, but this knowledge alone is insufficient to establish express aiming at the forum state as required by the effects test. 4. Notes: a. P s argument is too broad; anyone harming an industry in California would then be subject to California jurisdiction. b. Distinction between passive website and active website (i.e. online store, online payment). Is an active website enough to constitute personal availment? The key question turns on purposeful availment and foreseeability; how much business does a website have to conduct in a state to meet purposeful availment and foreseeability requirements? i. Interactivity alone is not sufficient. There needs to be interactivity in such a way as to give the owner knowledge that he is interacting with individuals of a certain state and an opportunity to disengage in that interactivity. ii. Catalog: a catalog is an affirmative action by the firm to reach out and do business with you.

30 xvii. SUMMARY. 1. Pennoyer: tied personal jurisdiction to due process and state sovereignty. Jurisdiction if property attached or if you serve defendant while defendant is in boundaries of state. 2. Int l Shoe: if you are a nonresident, non-present defendant, court can exercise jurisdiction if you have minimum contacts but you must comport with fair play and substantial justice. (Quality, not quantity of contacts). 3. Hanson: purposeful availment: contacts cannot be random or fortuitous, must be directed at forum state 4. Shaffer: in rem 5. WWVW: foreseeability, distinguishable from purposeful availment a. PA: did defendant direct its activities towards the state? b. Foreseeability: assuming contacts, is it reasonable to conclude that defendant might be haled into court in that state? 6. Burger King: doctrinal landscape shifts. More holistic view of looking at personal jurisdiction. Fairness factors may buttress a conclusion of jurisdiction (but fairness factors were not necessary to decide this case). Fairness factors may help or hurt a conclusion of jurisdiction; may need more or less minimum contacts. 7. Asahi: where fairness factors become part of doctrine. Stream of commerce: process where a product finds its way to consumer. Split between Brennan and O Connor on what is necessary in stream-of-commerce cases. Brennan: mere awareness that product is going to forum state is enough. O Connor: need stream-of-commerce plus more. 8. McIntyre: clusterfuck. Which doctrinal approach is the right one? xviii. Shaffer v. Heitner; Personal jurisdiction (in rem, quasi in rem) 1. Facts: P sued 28 officers of Greyhound (a Delaware corporation) for breach of fiduciary duty to stockholders. P owned one share of Greyhound stock, was not a Delaware resident. P sequestered stock owned by 21 of the officers in order to obtain quasi-inrem jurisdiction. Under a Delaware statute, stock was deemed to be property under the jurisdiction of Delaware. 2. Rule: (1) A state cannot obtain personal jurisdiction over a party based merely on that party s ownership of property in the state. (2) Quasi in rem jurisdiction is subject to the constitutional requirements of minimum contacts. 3. Holding: The presence of property in a state may allow jurisdiction by providing contacts with the state, the defendant, and the litigation; for example, when claims to the property itself are the source of the underlying controversy (in rem). Where, as in this case, the property serving the basis for jurisdiction is completely unrelated to the plaintiff s cause of action (quasi in rem), the presence of property alone (absent other ties) would not support the state s jurisdiction. D s holdings in the corporation do not provide contacts with Delaware sufficient to support jurisdiction. Moreover, Ds have not availed themselves of Delaware law. Ds were not required to acquire interests in the corporation in order to hold their positions, and they did not by acquiring those interests surrender their right to be brought to judgment in the states in which they had minimum contacts.

31 4. Notes: a. Delaware bases jurisdiction, not on D s status as corporate fiduciaries, but on the presence of their property in the state; the state s interest in supervising the management of a Delaware corporation and defining the obligations of its officers is not adequately established. Further evidence by the fact that P could not gain jurisdiction over 7 of the Ds; there is no necessary relationship between corporate fiduciaries and stockholders. b. Death of quasi in rem: if it is unconstitutional to exercise jurisdiction over the person directly then it should be unconstitutional to assert jurisdiction indirectly. i. Effectively destroyed the quasi in rem provision in Pennoyer c. Delaware could have required the corporate officers to submit to Delaware jurisdiction as a condition of becoming corporate officers (but it didn t). xix. General Jurisdiction. Applies in claims that are unrelated to a forum state. Applies in the state of domicile for an individual and in the state of incorporation and the state where a corporation s principle place of business is located for a corporation. 1. A transient presence by an officer alone will not be sufficient to establish general jurisdiction against a corporation. 2. You only have one domicile, but general jurisdiction may apply to other states where you have substantial and pervasive contacts 3. Domicile = presence + intent to remain indefinitely xx. Perkins v. Benquet Consolidated Mining Co.; General Jurisdiction (principal place of business) 1. Facts: Mining company had mine in Philippines which was occupied by Japanese during WW2. During occupation, president of company returned to his home in Ohio to conduct business on behalf of the company. P (not an Ohio resident) brought suit in Ohio for an action distinct from company s actions in Ohio. 2. Holding: The amount and kind of activities which much be carried on by a foreign corporation in the forum state so as to make it reasonable and just to subject the corporation to the jurisdiction of that state are to be determined in each case. Here, Ohio may assert jurisdiction. 3. Notes: For all intents and purposes, company has its principal place of business in Ohio. Might also be a question of jurisdiction by necessity: if not in Ohio, where could corporation be sued? (Philippines did not have functioning judicial system). xxi. Helicopteros Nacionales de Colombia, S.A. v. Hall; General Jurisdiction (continuous and systematic) 1. Facts: D (Colombian corporation) purchased most of its helicopter fleet and obtained training for its pilots from Texas manufacturer, but had no place of business in Texas. D contracted to provide helicopter transportation for a Peruvian consortium; however, in the course of providing service, one of D s helicopters crashed and killed 4 Americans. 2. Rule: In order to exercise general in personam jurisdiction over a party, the party s contacts with the forum state must be of a continuous and systematic nature.

32 3. Holding: D s contacts with Texas do not satisfy the requirements of the Due Process clause. The on trip to Houston y D s CEO was not continuous and systematic. Purchases of helicopters and training of its pilots from the Texas manufacturer are also not sufficient. Mere purchases, even if occurring at regular intervals, are not enough to warrant a state s assertion of general jurisdiction over a nonresident corporation. 4. Notes: a. The cause of action here was based on wrongful death, not breach of contract. Since D s CEO had negotiated the contract in Texas it is likely that the court would be able to exert in personam jurisdiction over D for breach of contract claims. b. General jurisdiction is very difficult to establish contacts must be so far above and beyond those sufficient for specific jurisdiction xxii. Burnham v. Superior Court; Personal service of process while within the state 1. Facts: Burnhams lived in NJ prior to separation. Mrs. Burnham moved to California and filed for divorce in California state court. Mr. Burnham was visiting California on business when he was served with divorce papers. Mr. Burnham s only contacts with California were occasional brief visits for business and to visit his children. 2. Rule: A state can gain personal jurisdiction over a nonresident who was personally served with process while temporarily in the state, even if his purpose for being in the state is unrelated to the matter before the court. 3. Holding: It is an established principle (and a continuing tradition of our legal system) that states have jurisdiction over persons physically present in the state. The purpose of the party s presence within the state is of no concern as long as his presence was voluntary. 4. Concurrence: Physical presence in a state permits jurisdiction not because service of process occurred on the person in the state, but because by voluntarily coming into the state, D avails himself of the benefit and privileges of the state, even if only for a short period of time. 5. Notes: a. This isn t handled under the status exception in Pennoyer because there s more than just status involved there s also child custody, division of property. b. All assertions of jurisdiction must be evaluated in accordance with Int l Shoe c. This may lead to all kinds of crazy scenarios where states may assert jurisdiction over parties and events that have no relation to the state. (This applies to plane trips). d. Exceptions for fraudulent presence in the state (i.e. kidnapping) xxiii. Piper Aircraft v. Reyno; forum non conveniens, 28 USC 1404, 28 USC 1631 1. Facts: Plane manufactured by Piper (D1, Pennsylvania corporation) crashed in Scotland, killing 5 Scottish citizens. Parts of the plane were manufactured by Hartzell (D2, Ohio corporation).The wreckage is now in England. California probate court appointed Reyno (P) administratrix of the estates of decedents. Reyno brought suit in California.

33 2. Proc. Hist.: Ds first removed to federal district court in California. Piper then sought transfer under 1404(a) to Pennsylvania, on grounds of convenience. Hartzell sought transfer to Pennsylvania under 1631. With both cases in Pennsylvania federal court, both Ds sought to dismiss the case on grounds of forum non conveniens. 3. Rule: When an alternative forum has jurisdiction to hear a case and when trial in the chosen forum would establish oppressiveness and vexation to a defendant out of proportion to the plaintiff s convenience, or when the chosen forum is inappropriate because of considerations affecting the court s own administrative and legal concerns, the court may in the exercise of sound discretion dismiss the case by applying the list of private and public interest factors. a. In a motion to dismiss for forum non conveniens, a court should consider both private and public interest factors. The possibility of change in substantive law should not be given conclusive or even substantial weight in a forum non conveniens inquiry. i. Private factors include the relative ease of access to sources of proof, availability of compulsory process for the attendance of unwilling witnesses, the cost of attendance of witnesses, the possibility of viewing the scene if appropriate to the action, and other practical matters related to making the trial easy, expeditious, and inexpensive. ii. Public factors include administrative difficulties of the courts, interest in having local controversies adjudicated at home, the interest in having the trial in a forum that is familiar with the law governing the action, the avoidance of unnecessary problems in conflict of laws or the application of foreign law, and the unfairness of burdening citizens in an unrelated forum with jury duty. 4. Holding: Private factors favored Scotland because the wreckage of the plane and witnesses were there. Public factors also favored Scotland because Scotland had a greater interesting in hearing a case that concerned Scottish citizens. The fact that Scotland might have been less favorable to Reyno did not provide a reason to dismiss the defendants motion. 5. Notes: a. Both state and federal courts may decline to exercise jurisdiction even though they possess it. b. The state could not have transferred this case to another state or to the federal system; can t transfer between systems. Ds had to get it in federal court in order to transfer it to a different federal court c. New doctrine: the court will attach less weight to P s choice of forum when the P is foreign and has come to the US to litigate d. If there is no viable alternative forum, then that should be taken into consideration e. If the proper forum is in another country, the transfer statute does not apply (as Congress cannot force another country to accept a transferred case). Instead,

34 like here (where the case should be heard in Scotland), the court s only option is to dismiss the case for forum non conveniens. 28 USC 1391: Venue generally. Distinction between cases founded only on diversity (a) and those not founded only on diversity (b). Aliens may be sued anywhere (d). 1. (a): Subsections 1 and 2 are alternatives. Venue is proper in a district where either a defendant resides (if they all reside in the same state) or a district in which a substantial part of the events giving rise to the claim took place. Subsection 3 only applies if neither 1 nor 2 applies. 2. (b): First 2 subsections are identical to those in (a). The fallback option, 3, allows venue where any defendant may be found. 3. (c): A corporation resides in any district in which its contacts would support personal jurisdiction over it. a. Districts are treated as states 28 USC 1404: Change of Venue. 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. 1. For the convenience of parties and witnesses. Allows the federal courts to move cases within the system without the necessity for dismissal and refilling, which would be necessary under the doctrine of forum non conveniens 2. Public interest and private interest factors still govern the judge s decision whether to transfer the case 3. This statute, rather than the common law forum non conveniens, governs most transfers today 28 USC 1406: Cure or Waiver of Defects. The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought. 1. Applies to cases where venue is improper (as opposed to 1404, which applies where venue is proper) 2. Allows transfer (or dismissal) from a district in which venue is improper. a. Transfer must be to a district where the case could have been brought 28 USC 1631: Transfer to Cure Want of Jurisdiction. If there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed 1. When venue is proper but jurisdiction is lacking. In such a case, the action shall proceed as if it had been filed in the court to which it is transferred. Notice (Rule 4, 5). 1. Before a court can assert jurisdiction over the defendant, the defendant must have adequate notice. Notice is a constitutional requirement (Due Process). 2. Personal service within the jurisdiction is always sufficient; mail service is also ok 3. Notice is a relative rather than an absolute value. You may not get notice, but your rights may be removed if persons similarly situated to you and participating in the suit had ample opportunity to represent themselves

xxiv.

xxv.

xxvi.

xxvii.

xxviii.

35 4. Rule 4: At the time you file a complaint, you need to have the clerk of the court sign and seal a summons that will be served on the defendant a. You have 120 days from the filing of the claim to actually serve the defendant b. Also details how you can actually serve a defendant c. 4(d): you can mail the complaint and summons to defendant and defendant has 30 days to respond by waiving service of process i. But they must respond and waive service of process xxix. Long-arm statutes. 1. State legislatures may grant authority over their judiciary to assert this type of jurisdiction. (Jurisdiction over a non-resident, non-present defendant). a. Legislature does not have to grant full power allowed under Constitution; longarm statutes may be of varying power b. For a court to have personal jurisdiction over a defendant, the case must satisfy both the Constitutional Due Process framework (i.e. International Shoe) AND the state s long-arm statute 2. Federal government has jurisdiction over any defendant who has some contacts with the US a. Because federal government covers all 50 states 3. Rule 4(k): limits territorial reach of district court to the reach of the state in which that court is located (so the two are the same) a. Federal courts are thus limited by the long-arm statutes of the states in which they reside B. DIVIDING AUTHOURITY BETWEEN STATE AND FEDERAL COURTS: SUBJECT MATTER JURISDICTION i. Subject Matter Jurisdiction. 1. Is not an alternative to personal jurisdiction must have both 2. The big question is: can you get this claim into federal court? a. Does the case fall within one of the enumerated categories of AIII, and has Congress further authorized the lower federal courts to assume that jurisdiction? 3. Article III: details which claims can be brought into federal court a. Two big categories are federal question and diversity b. Also authorizes (but does not require) Congress to establish lower federal courts c. Also gives federal judges lifelong tenure (shields them from political pressures) 4. 28 USC 1331: Congress must confer federal question jurisdiction on the lower courts a. The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States. b. Note: The Supreme Court has jurisdiction under AIII, but lower courts had to be created with jurisdiction established through federal statutes (such as 1331) 5. Oftentimes, you have a choice of whether to bring the claim in state or federal court (concurrent jurisdiction) 6. Personal jurisdiction can be waived by the parties; subject matter jurisdiction can never be waived

36 7. If the court lacks SMJ at the time the verdict is rendered, then the verdict is invalid a. Courts less concerned with efficiency and more concerned with federal power b. Allows for collateral attack Louisville & Nashville Railroad v. Mottley; Federal question ( arising under ) 1. Facts: Ps were injured while riding on Ds train, were awarded free passes for life. D later refused to renew Ps pass because an act of Congress forbade the giving of free passes or free transportation. P filed sued in federal court, contending that D would raise a constitutional defense in its answer (5th amendment), thereby creating federal subject matter jurisdiction. 2. Rule: The mere allegation of an anticipate defense that arises from some provision of the Constitution does not create a federal question giving a federal court jurisdiction. The federal question must arise from the plaintiff s own cause of action/claim. 3. Holding: The mere allegation that D will raise a federal question in his answer is not sufficient to create jurisdiction. 4. Notes: a. A suit already tried may be dismissed for lack of subject matter jurisdiction. In this case neither party raised the jurisdictional issue, so the court raised the issue sua sponte. b. If the well-pleaded complaint rule wasn t a rule, it may lead to courts anticipating the claims and defense to determine subject matter jurisdiction c. Counterclaims and cross-claims are generally treated the same as defenses for purposes of the Mottley rule d. Substantiality Rule: the federal question must be a significant part of the plaintiff s case i. The heart of the case, not background information e. When the case involves a federal agency or a federal question that will affect a large number of cases, the court may grant an exception to Mottley rule f. Under the current notice pleading regime, it may be difficult to apply the Mottley rule because the notice pleading regime of the Rules often gives rather little information Note. If there s a consent judgment and a party breaches the settlement, then you can t bring the claim in federal court (because it s a contract dispute). Note. The Supreme Court has said that the meaning of arising under in AIII is broader than the same phrase in 1331. Note. Because arising under jurisdiction depends on the substance of the P s claim, one can think of the challenge as attacking either the claim (there s no federal claim, therefore no federal jurisdiction) or jurisdiction (there s no jurisdiction because there s no claim arising under federal law). So a party arguing that a complaint does not state a claim arising under federal law could move for dismissal invoking either 12(b)(1) or 12(b)(6) 1. If there s any arguable basis for a federal claim, the district court should examine the federal question in relation to a 12(b)(6) motion to dismiss for the substantive claim Diversity Jurisdiction.

ii.

iii. iv. v.

vi.

37 1. Claim doesn t need to have anything to do with federal law 2. Justification: protects out-of-state litigants from bias in state court, promotes free flow of ideas between systems (state and federal) and allows for better procedure to develop over time 3. Complete diversity requirement: can t have any party on opposite sides of the v from the same state a. This comes from case law (Strawbridge), not statute b. State citizenship requires US citizenship and domicile in the state i. Can t change domicile until you get a new one 4. In most cases, diversity is determined at the time of filing, but it may be possible to drop a non-diverse party and gain diversity jurisdiction a. The status/citizenship of the parties is locked in at the time of filing 5. For purposes of diversity, citizens of other countries are just viewed as aliens (rather than as citizens of their respective countries). Still must have citizens from different states on both sides of the v. 6. Partnerships are not considered as entities but as collections of individuals; thus the citizenship of each of the members of a particular partnership must be considered 7. Corporations have dual citizenship: where they are incorporated and where they have their chief place of business. 1332(c)(1) a. There can only be one chief place of business i. Daily activities test ii. If the operation is spread out, look to the nerve center of the corporation (Hertz v. Friend) 8. Individuals are citizens in the state of their domicile 9. Amount in Controversy a. One needs to exceed $75k i. Arises from statute (1332) b. Amount in controversy determined from the POV of the plaintiff c. Legal certainty test: plaintiff s allegations as to the amount in controversy are sufficient unless it appears by a legal certainty that the amount cannot be met d. It is possible to aggregate claims against a single defendant to meet AIC, but not different defendants e. If the counterclaim is compulsory, then court will exercise jurisdiction over claim even if it does not meet amount in controversy i. If counterclaim is permissive, then it would need to independently satisfy the amount in controversy f. In class-action suit, as long as you have one claim that meets the amount in controversy, you can bootstrap other plaintiffs to that claim g. If you have one loss and allege two legal theories for your loss, you can t aggregate the sums from both of your theories, because you can only recover on one h. P. 204 #4(a)-(e)

38 10. Exceptions to Diversity Jurisdiction: a. Domestic relations exception: won t adjudicate cases on federal status (divorce), alimony, child custody i. Family relations are a unique interest of the state ii. Gender bias? (Resnik) iii. Ankenbrandt: Congress has acquiesced to this exception because we ve been enforcing it for decades and they haven t done anything to change the statute. (But is this good reasoning?) b. Probate exception: how to administer an estate pursuant to will, trust, etc. i. But federal court can hear claims against an estate 11. Note: Supreme Court jurisdiction is not affected by amount in controversy, complete diversity a. Because they arise from statute, case law (respectively) vii. Redner v. Sanders; 1332(a)(2) 1. Facts: P was US citizen residing in France; two Ds were New York residents; corporate D was incorporated in and had its principal place of business in New York. P claimed diversity because he was a foreign resident while all Ds were NY residents. 2. Rule: To sue under 28 USC 1332(a)(2), a party must be an actual citizen of a foreign country. Under 28 USC 1332, original jurisdiction is permitted for matters that exceed $75k and which are between citizens of different states, or citizens of a state and citizens or subjects of a foreign state. 3. Holding: P was not a French citizen; residence and citizenship are not synonymous. 4. Note: Possible to have a US citizen who has domicile in a foreign country. (They are not a citizen of any US state). viii. Saadeh v. Farouki; 1332 1. Facts: P sued D in federal court. When the suit was filed, D was a citizen of Jordan but also had permanent resident immigration status and was a citizen of Maryland. P was a citizen of Greece. D became a US citizen while the lawsuit was pending. 2. Rule: Diversity of citizenship does not exist between an alien and an alien who has permanent resident status in the US. 3. Holding: Congress amended the diversity statute in 1988: an alien admitted to the US for permanent residence shall be deemed a citizen of the state in which such alien is domiciled. However, despite the plain language of the amendment, it was intended only to eliminate diversity in suits between a citizen and an alien with permanent resident status living in the same state. It was not intended to create diversity jurisdiction where previously there was no diversity jurisdiction. 4. Note: There were other courts which came to different conclusions. ix. Caterpillar, Inc. v. Lewis; 1446 1. Facts: P, a Kentucky resident, filed suit in Kentucky state court against Caterpillar (Delaware corporation with principal place of business in Illinois) and Whayne (Kentucky corporation with principal place of business in Kentucky). P was joined the suit by his insurance company. Whayne settled with Lewis, but not insurance company. Caterpillar

39 (improperly) removed to district court, citing diversity. Whayne exited the case before a verdict was rendered. 2. Rule: Diversity at the time judgment is entered, rather than at the time the case is removed from state to federal court, is the appropriate time at which to examine whether complete diversity exists permitting federal court jurisdiction. (As long as the federal court had jurisdiction when the judgment was rendered, the verdict sticks). 3. Holding: Considerations of finality, efficiency, and economy become overwhelming. In this case, complete diversity existed at the time of judgment. Redoing the case now would impose tremendous costs on the court system. And it is unlikely that defendants will attempt to take advantage of this rule in the future by filing frivolous removal requests. x. 28 USC 1332(a)-(c): Diversity of Citizenship; Amount in Controversy; Costs xi. 28 USC 1441: Actions Removable Generally 1. Can remove any case where the federal court has original jurisdiction (i.e. diversity and arising under cases) a. If a case could have been filed in federal court to begin with, it can (generally) be removed to federal court 2. A diversity case cannot be removed if there is an in-state defendant 3. A federal court acquires jurisdiction over a removed case, even if the state court from which it was removed had none. (f) 4. There is no way to remove from federal to state court. If P filed in federal court, D is stuck in federal court. 5. A case is removed to the federal court that embraces the place where the action is pending (i.e. same state/district). xii. 28 USC 1446: Procedure for Removal 1. Notice of removal must be filed within 30 days after the defendant receives a copy of the initial pleading/claim 2. If a claim wasn t originally removable but later becomes removable (i.e. Plaintiff amends complaint), then defendant may remove within 30 days of receiving notice of the amended pleading C. THE ERIE PROBLEM STATE LAW IN FEDERAL COURTS i. State and federal courts have concurrent/overlapping jurisdiction: what law applies? ii. 28 USC 1652: Rules of Decision Act 1. The laws of the states apply unless an action is governed by Constitution/federal law iii. Article 1, Section 8: actions enumerated to Congress iv. Swift v. Tyson 1. State common law doesn t apply; only state statutes need apply. The federal court can create common law to fill in the blanks of state law. 2. Gave judges a lot of discretion in deciding cases (look to the laws of other states, treatises, etc. in determining the appropriate rule to apply when no state statute exists) 3. Inconsistent outcomes in federal and state courts involving the same claims 4. No clear line of demarcation between general law and local law

40 5. Forum shopping a. Forum shopping itself isn t a problem; forum shopping that results in different laws/legal standards is a problem ( law shopping ) 6. Discrimination by non-citizens against citizens a. Out-of-state citizen might be able to create a situation in which state citizen might be harmed Federalism: we must protect state autonomy and state sovereignty including their right to make their own laws and interpret those laws Amendment X: all power remains with the states unless it is enumerated to the federal government Can federal courts make federal common law? 1. Yes; they can interpret statutes and constitutional provisions but it must be traced back to a power that s been conferred on the federal government Erie Railroad Co. v. Tompkins 1. Facts: P sustained injuries when he was struck by D s train in Pennsylvania. P was a citizen of Pennsylvania and D was incorporated in New York. P brought diversity suit in district court in NY. D asserted that more lenient Pennsylvania state law should apply. P asserted that stricter federal common law should apply. 2. Rule: In diversity cases in federal court, absent some constitutional and congressional grant of federal court authority, state substantive law (including common law) shall apply. 3. Holding: Overruled Swift v. Tyson, as it was an unconstitutional assumption of powers by the courts. Federal courts do not have the power to create federal common law; Congress has no power to declare the substantive rules of common law in states (federal courts were effectively creating law in contracts, torts, wills and trusts, etc., which they had no Constitutional power to do). Moreover, the Swift decision is flawed because it promotes forum shopping. 4. Notes: Emphasized uniformity of state court decisions and prevention of discrimination between residents and non-residents. Every state has a choice-of-law rule to determine which state s law applies in a case. Apply the choice-of-law rule of the state in which the court sits. What is substantive and what is procedural? What rules must a federal court follow? 1. Statutes of limitations are substantive a. Have to apply state statutes of limitations 2. If the state rule is bound-up with state substantive principles, then it applies under Erie a. If not, you have to balance federal and state interests in having their respective procedural rules apply Problems p. 159-160, 213-214

v. vi. vii.

viii.

ix. x.

xi. IV.

JOINDER A. Joinder considerations: i. Make sure federal rules allow for joinder of parties and claims ii. Check jurisdiction: must have jurisdiction over every party

41 1. Personal jurisdiction over all parties and subject matter jurisdiction over all claims iii. Former adjudication: sometimes you must join additional claims or risk losing those claims under former adjudication Rule 13: Counterclaims. (Permissive, compulsory counterclaims) 28 USC 1367: supplemental jurisdiction broadens federal subject matter jurisdiction i. Where the federal court has original jurisdiction because a case presents a claim that the plaintiff could properly file in federal court, the court can hear not only the claim, but all other claims arising out of the same case or controversy. ii. (b): in diversity cases only, the federal courts will not have jurisdiction over certain claims by plaintiffs or persons sought to be joined as plaintiffs iii. Provides a basis for subject matter jurisdiction over a claim if it is properly joined Plant v. Blazer Financial Services; Rule 13(a), joining counterclaims i. Facts: P did not make any payments on note made by D. P sued under Truth-in-Lending Act (federal law) for failure to make disclosures required by the Act. D counterclaimed for the unpaid balance. ii. Rule: A permissive counterclaim must have an independent jurisdictional basis, while it is generally accepted that a compulsory counterclaim falls within the ancillary jurisdiction of the federal courts even if it would ordinarily be a matter for state court jurisdiction. A counterclaim is compulsory where the obvious interrelationship of the claims and the rights of the parties, coupled with the common factual basis of the claims, demonstrated a logical relationship between the claim and counterclaim. iii. Holding: Rule 13(a) provides that a counterclaim is compulsory if it arises out of the same transaction or occurrence that is the subject matter of P s claim. Here, the rights of the parties are interrelated, the claims are interrelated, there is a common factual basis, and the claims arise out of the same transaction/occurrence (the loan transaction). Thus, the counterclaim is compulsory. iv. Notes: If D s counterclaim were to be treated as permissive, D s action on the default of the debt would have to be pursued in state court in a separate action. 1. Set-off idea: if D is forced to bring claim in state court, P might recover money in federal court, spend that money, and then not have that money available to satisfy a state court judgment. Better to try the claims together so the judgments can directly offset one another. 2. But if the claim is not compulsory, it frees up the federal docket Rule 18: Joinder of Claims i. A party may assert as many claims as it has against another party 1. Regardless of what type of relief (monetary v. equitable) is sought 2. In other words: once a claimant has properly asserted a claim against another party, she may add on any other claims she has against that party 3. Rule 18(a) is not itself authority to assert an initial claim against another party ii. But even if joinder is authorized, a court still must have subject matter jurisdiction over all claims Rule 20: Permissive Joinder of Parties

B. C.

D.

E.

F.

42 i. Transactional relatedness and common question of law or fact 1. Transaction may comprehend a series of occurrences logically connected in some way 2. All questions of law and all questions of fact need not be the same a. Just identify one question common to all parties i. Mosley: common theme is policy of discrimination ii. Rule 20 does not require joinder if the criteria are met (it just allows joinder) G. Rule 21: Misjoinder and Non-joinder of Parties i. Misjoinder of parties is not a ground for dismissing an action. On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party. H. Rule 42: Consolidation; Separate Trials I. Mosley v. General Motors Corp.; Rule 20 i. Facts: 10 Ps joined in bringing an action individually and as class representatives alleging discrimination by D. District court ordered the 10 counts be severed into 10 separate causes of action and each P was directed to bring a separate action based upon his complaint. ii. Rule: Joinder of parties is appropriate where the claims of each of the plaintiffs are logically related events entitling a person to institute a legal action and some question of law or fact common to all the parties arises in the action. iii. Holding: Ps have asserted a right to relief arising out of the same transactions or occurrences. Each of the 10 Ps alleged that he had been injured by the same general policy of discrimination on the part of D. Discriminatory character of D s conduct is basic to the class, and the fact that the individual class members may have suffered different effects from the alleged discrimination is immaterial for the purpose of the prerequisite. Moreover, the difficulties in ultimately adjudicating damages to the various Ps are not so overwhelming as to require a severance. iv. Notes: 1. More efficient this way better to have people testify in one case than in 10 separate cases 2. Could the severability of the cases affect their outcome? a. Important to establish a pattern of racial discrimination J. Rule 14: Third Party Claims i. (a): derivative liability: who is or may be liable 1. Him, not me is not going to satisfy Rule 14 a. If me, then him is sufficient ii. (a)(2): third party D can bring any claim they have against third party P 1. Must do so if they have a compulsory counterclaim 2. But what if P then brings a claim against a third party D? Is this ok? a. Probably not (from textual reading of 1367(b)), because third party D was made a party under Rule 14 b. But P looks a lot like D for purposes of the counterclaim i. So maybe it is ok? ii. It wasn t the P that initiated the action between P and third party D 1. P had no control over it

43 a. Equity considerations iii. This is assuming that the counterclaim is compulsory iii. (b): When claim is asserted against P, P may bring in a third party if this rule would allow a D to do so (e.g., if there is derivative liability) iv. 2 scenarios where Rule 14 arises: 1. If there is a contractual right of indemnification 2. Tort law of contribution (comes into play in some states) a. 2 tortfeasors, and one will have to indemnify the other for their portion of the harm v. Plaintiff s autonomy 1. Defendant can t bring in too many parties that will deflect attention from the plaintiff s suit a. Joining extra parties also takes more time, money vi. If the law permits liability to be passed to some third party, then Rule 14 allows that third party to be impleaded in the suit 1. This effectively collapses two lawsuits into one vii. If you satisfy Rule 14, then you ll automatically satisfy 1367(a) 1. If you satisfy 1367(a), are there any restrictions in 1367(b) that apply? K. Price v. CTB; Rule 14 i. Facts: Chicken farmer sued coop builder, alleging defective chicken coop. D filed third-party complaint against ITW, the manufacturer of nails used in the construction, alleging nails were defectively manufactured. ii. Rule: D may implead a third party under Rule 14(a) so long as the third party s liability is derivative of the original claim and the original D is trying to pass all or part of the liability onto the third party. iii. Holding: Impleading is appropriate because, if D is found liable for faulty construction, ITW can then be found liable for the warranty surrounding its products. This merely involves a shift in the overall responsibility of the allegedly defective coops. iv. Notes: 1. D wants ITW in the case so that it s bound by any judgment in the case. 2. A second lawsuit also risks a favorable judgment for ITW (and a second suit is expensive, takes a lot of time) 3. Issue preclusion: if it s established that their nails were defective, P or D could push issue preclusion in the other 40 similar cases a. Note: offensive issue preclusion cannot assert issue preclusion against a party not present in the first case b. Context matters a lot in issue preclusion if the law is different (i.e. between different states), then it might not be the same issue L. Rule 4(k): Bulge Rule i. Can get to a witness in a different state if that witness is within 100 miles of the court 1. Gives a boost to court s jurisdiction M. Supplemental Jurisdiction (28 USC sec 1367)

44 i. One claim over which there is subject matter jurisdiction, another claim which there is not (by itself) subject matter jurisdiction ii. Supplemental jurisdiction expands jurisdictional scope iii. It wouldn t make sense for plaintiffs to join all these related claims without giving court the ability to adjudicate the claims iv. Without supplemental jurisdiction, might have repetitive litigation v. Same case of controversy: must ask whether the claims arise from a common nucleus of operative facts 1. Are the plaintiff s claims such that you would normally expect them to be tried together? 2. Must show that the two claims are so related that they are part of the same constitutional claim vi. Must make sure that joinder is allowed for all claims and parties vii. On exam, helps to number the claims and determine which ones are good under subject matter jurisdiction 1. Only on those claims that are not good do we touch supplement jurisdiction viii. If original claim is based only on diversity, then look at 1367(b) determine if case fits in under exceptions 1. Exceptions to 1367(b) usually speak to actions made by the plaintiff, and generally not by the defendant ix. Also keep in mind 1367(c): court may decline to exercise supplemental jurisdiction in certain situations; court has discretion 1. If the court gets rid of the main claim on a motion to dismiss, then it s easy to dismiss the other claims 2. But the farther you go in the lawsuit, the more difficult it is for the court to dismiss the other claims a. Temporal elements/efficiency consideration x. You can have supplemental jurisdiction over joined third parties N. Note: Rule 18 provides that a party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternative claims, as many claims as it has against an opposing party. i. But rule 13(g) contains a more restrictive provision, limiting cross-claims to those that arise out of the transaction or occurrence that is the subject matter of the original action or of a counterclaim. Rule 14(a) similarly restricts claims by third-party defendants ii. Does Rule 18 eliminate the restrictions created by Rules 13 and 14? No; the key to reconciliation lies in the difference between the requirements for the first cross-claim or third-partydefendant claim and any subsequent ones. 1. In other words: when you re dealing with cross-claim/third party claim, the first claim needs to meet the requirements of 13(g) and 14 iii. Must have personal jurisdiction over all parties, subject matter jurisdiction over all claims O. Key to identifying supplemental jurisdiction: one claim in which court clearly has jurisdiction and another related claim where it is less clear if court has jurisdiction P. Gibbs: interpreted case and claim to include all claims that arise from the same set of facts

45 i. Common nucleus of operative facts Kroger v. Omaha; 28 USC 1367 i. P sued D, D impleaded third party, and P brought suit against third party D. (Third party D is Owen). Owen is a citizen of both Nebraska and Iowa (surprise!), so no complete diversity between P and third party D. The dual citizenship issue was raised 2 years into trial (1367(d): ability to still bring these claims within 30 days after claim is dismissed, so statute of limitations might not apply). ii. Supreme Court says there is no jurisdiction: subject matter jurisdiction must be present you can t waive it or consent to it iii. In this situation, the P needs to be attentive to all potential Ds 1. If P wanted to sue all Ds, P could have done it in state court a. P has a choice: i. Can sue in federal court, knowing that certain limitations exist ii. Or state court, where you can sue everyone iv. This case deals with 1367(b) provides justification/policy Example: P (from NC) brings federal question claim against D1 (from NC) and a state law claim against D2 (from NC). Is this ok? i. You need to know more factual information about the state law claim 1. Need to determine if they arise from the same transaction/are logically related a. Must satisfy 1367(a): same case or controversy If we allow a D to remove to federal court, why should we allow D to then file a claim (/implead) a second D? (We seem to be treating D as a P; is this fair?) A single P cannot add claims against multiple Ds to meet amount in controversy i. Multiple Ps cannot add their claims against a single D unless Ps have undivided interest in the subject matter of claim (i.e. vase is worth $80k, both Ps bring claims for $40k) 1. 1367(b) doesn t technically prevent this: Exxon v. Allapattah Rule 23: Class Actions i. Representational litigation: most class members are not present, do not participate class representative ii. Class representative is just an interested party who goes to a lawyer first 1. No election or anything like that iii. A judgment in a class action binds the unnamed parties in the class in terms of future litigation iv. You can challenge the adequacy of representation 1. At the certification stage (usually fairly early in the suit) 2. At the fairness hearing a. If there s a settlement of the class action, the court has to approve the settlement for fairness i. must determine that the interests of the parties are adequately protected 3. in a collateral attack v. 4 requirements in 23(a): 1. Numerosity: sufficient number of people such that joinder would be impracticable

Q.

R.

S. T.

U.

46 2. Commonality: a. Common characteristics, common questions of law and fact b. How significant are the differences in class members? 3. Typicality: does the class representative stand in the shoes of the average class member? 4. Adequacy: a. Does the class representative have a stake in the litigation? b. Is lawyer sufficiently skillful, have enough resources? vi. 23(b): three types 1. (1): risk of inconsistent outcomes being enforced if you don t bring them together as a class 2. (2): primarily injunctive; D has acted/refused to act in a way that applies generally to the class a. Either injunctive or declaratory relief b. Most common in civil rights actions 3. (3): primarily seeking monetary relief a. Small claims class action, mass torts b. Must make sure that each member of the class has received notice regarding the action (mandatory notice) i. May become very expensive, time-consuming c. Members have the right to opt out i. Will relieve you from being bound by the judgment d. Is sort of a fallback category e. Predominance: the common issues of law/fact must predominate i. Must be critical to all class members f. Must also establish that class action is superior to other forms of litigation vii. (c)(2): if a court wants to, it can require that class representative gives notice to all members of the class in (b)(1) and (b)(2) actions viii. Apprellate review: normally decision to certify a class is not subject to immediate review 1. The claims are not terminated 2. 23(f): allows for appeal of these decisions a. Standard of review is abuse of discretion ix. Class action is controversial 1. Exorbitant attorney fees 2. Judgment/damages might not be fair to all class members, but they are still bound by it 3. May create unequal bargaining power push defendant to settle even if the merits of the case are lacking V. Communities for Equity v. Michigan High School Athletic Assn.; Rule 23 i. Facts: Ps allege that, because of discriminatory policies of D, they were excluded from opportunities to participate in interscholastic athletic programs and received unequal treatment and benefits in those programs.

47 ii. Rule: Before certifying a class, a district court must conduct a rigorous analysis into whether the prerequisites of Rule 23 are met such that a class is not maintainable merely because the complaint parrots the legal requirements of Rule 23. iii. Holding: Numerosity: thousands of class members. Commonality/typicality: all in the same state, facing the same issues involving inferior facilities, scheduling, and treatment. Adequacy: those that want the status quo might be adequately represented by the D, and the language of the class ( only those who are adversely affected ) circumvents the issue. iv. Notes: 1. Why have a class action? Why not just one individual? a. Mootness: if one person graduated, they may not have standing to bring a claim, and case would be moot i. Class action protects against this b. You want the judgment to bind everyone, and not just a couple individuals c. May bring more public attention, put more pressure on D i. More leverage to reach a settlement faster, with more favorable terms 2. What s really important is that you have an association that represent P s class a. Because you have an association that represents the overarching issues, it makes it easier to prosecute against the class much easier than just a few individuals banded together W. Note: Commonality may become a problem across the country, when different state laws apply i. Different standards in state law may make it difficult to establish commonality between class members X. Heaven v. Trust Company Bank; Rule 23 i. Facts: P leased car from D, signed a preprinted lease form. Later she brought this action alleging that D failed to comply with the Consumer Lending Act. P sued for statutory penalty and attorney fee but alleged no actual damages. P sought to certify a (b)(3) class. D filed counterclaims. ii. Rule: A district court s decision whether to certify a class may only be overturned if it constitutes an abuse of discretion, which in turn is based on whether the court has given due consideration to all the relevant factors within the context of a rigorous analysis and has not relied on impermissible factors. iii. Holding: While compulsory counterclaims do not automatically bar class actions, the discretion of the lower court was correct in looking at the interests of those parties deemed part of the class who would lose more than they would gain (in defending the counterclaims). Class certification is denied. iv. Notes: 1. Why did D bring counterclaims? a. Might be trying to intimidate members of the class b. Might be trying to show that class action device is not the superior mechanism i. If there are all these individual issues that need to be decided, then is class action really efficient? Is there really a commonality of issues?

48 ii. If you can defeat class certification in certain situations, you can defeat individual suits 1. Because it might not be economically feasible to bring individual suit Y. Hansberry v. Lee; Rule 23 i. Facts: Landowners placed a racially-restrictive covenant on certain land. Covenant was only effective if signed by 95% of owners, though only 54% signed it. However, in an earlier class action (Burke), property owners as a class sued four named individuals to enforce the covenant, and it was (incorrectly) determined that 95% of owners had signed covenant. Question is whether Hansberry is bound by prior ruling. ii. Rule: A judgment rendered in a class suit is res judicata as to members of the class who are not formal parties to the suit; however, a selection of representatives for purpose of litigation, whose substantial interests are not necessarily or even probably the same as those whom they are deemed to represent does not afford that protection to absent parties which due process requires. iii. Holding: Ps could not be said to be representing an entire class because a lot of the homeowners (46%) disagreed with the covenant. Because Ps were representing only those owners that agreed with them, their representation was not binding on nonparties to the litigation. However, D here could not be bound by the Ps in the previous suit anyway, because it is highly unlikely that the Ps fairly represented the interest of D here. The Ds in the previous case were individuals who did not represent a class. iv. Notes: 1. Hard to argue that Ps in Burke represented Hansberry s interests a. And Kleiman was not a class 2. Takeaway point: have to have adequate representation for the judgment to be binding on non-party members Z. Wal-Mart: because the class was requesting back-pay, it must be classified under 23(b(3) instead of 23(b)(2)