Civ Pro 2011 Prof.

Suk
Sunday, January 09, 2011 11:14 PM

I.

II.

Introduction to Civil Procedure A. Why do we have a court system to adjudicate? 1. 2 Bodies of Law: Const Law (14th and 15th Amend) + FRCP a. Due Process Clause- No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the US, nor shall any state deprive any person of life, liberty, or property w/o due process of law; nor deny to any person w/in its jurisdiction the equal protection of the law - USC 14th Amen Sec. 1 B. Due Process and the Institutions of Adjudications 1. The values of Procedure a. Goldberg v. Kelly - looked like DP revolution 1. Rule: DP reqs a pre-term evidentiary hearing to be heard and cross-examined prior to terminating welfare benefits. Also have a right to counsel, based on legal rules and evidence, important decision maker w. indication of why decided as they did. 2. Dissent: Problem w/ due process in this case is that it will be more costly than the benefit provided 2. The costs of procedure a. Matthews v. Eldridge 1. Rule: No preliminary hearing req to terminate disability benefits 2. Due Process Test: Factors to det if need pre-term hearing a. Private interest- what recipient has to lose. How serious is the deprivation b. Risk of erroneous deprivation - how accurate are the procedures to reduce error c. Govt interest i. Pre-term hearing costs more up front since everyone gets one. If it's post maybe we weed out unreal cases ii. Main cost is that if there is an erroneous payment, it will be diff to get paid back d. Note: Private int related to the govt int 3. Distinguish a. Unlike Goldberg - welfare v. disability benefits Adjudicatory Power- Choosing Courts and Law A. Personal Jurisdiction 1. Definition: jurisdiction over the parties or their property- power of the court to enter judgment against a specific D. - territorial reach of Ct's power over the parties

2. Traditional basis for Jurisd a. Pennoyer v. Neff (1877) - overruled but concept that person not bound by judgment unless CT properly acquired power over that person still stands 1. Rule: A state Ct must have personal jurisd to bind a D to a judgment. In a case where property owned wi/in a state is not in controversy, the D is not a rez of that state, the D is not personally present w/in the state, and the D has not otherwise authorized service, the state does not have personal jurisd and any judgment rendered is void. 2. Principle a. Parties not bound by judgment b. Parties must be properly notified c. Ct power limited by territorial boundaries. 3. Judgments a. In personam - judgment against a person by virtue of presence w/in a state or citizenship b. In rem - right to determine status of prop w/in its territory and det who the int holders are c. Quasi-in rem - judgment against a person but recovery limited to value of property i. Dispute need not be about prop 4. Reasoning a. In rem and quasi-in-rem not available. Personal service req. W/o = violation of 14th Amend due process right 5. Extra: a. Ct is constitionalizing the due process clause bfr it is actually ratified b. Results in 2 fundamental principles i. All states are indep sovereigns ii. No state can exercise direct authority and jurisdiction over a person or prop outside its territory b. Hypos 1. Dangerous weeds growing on Neff's prop -> OR has jurisdiction 2. Q of Neff's ownership of OR land -> OR has jurisdiction to adjudicate 3. Neff does not own any prop. Mitchell wins judgment. What happens next? Does Mitchell get $$? a. Full Faith and Credit Clause USC Art. IV Sec I - shall be given in each state to public acts, records, and judicial proceedings of every other state. 4. A = rez of CA. B = rez of NV. B hits A w/ car in L.A. Suit in CA.

a. B served personally in home in NV. B moves to dismiss for lack of Persnl Jurisd. -> B wins. Cannot be served outside CA b. A serves B in NV, B doesn't appear. Judgment entered. A takes judgment to NV to enforce it against B's land in NV. B appears in attachment action and argues earlier judgment invalid. -> judgment not valid if not served w/in state in which the action happened b/c of 2 principles c. A serves B when B is traveling on biz. B moves to dimiss for lack or persnl jurisd. -> motion denied. This is valid d. B served while traveling on biz in CA. B doesn't appear so A gets judgment against B. A takes judgment to NV to enforce against B. -> valid due to Faith and Credit Clause e. B owns farm in North CA. A attaches B's farm by serving w/ newspaper publication. A then sues B in CA Ct. -> yes b/c attached prop first f. w/o attaching land first. Same facts as above. B moves to dismiss attachment proceeding. -> same as Pennoyer g. A serves B while B on CA/Mexican border. B appears in CA action but loses. A presents judgment in NV. -> Too late for B to claim lack of jurisd. Preclusion. Already went to CT and litigated. 3. Exapanding the bases of Personal Jurisd. a. interstate litigation w/ interstate travel b. Priviledges and Immunities Clause - citizens of each state entitled to all the same privilidges and immunities USC Art IV Sec 2 c. Kane v. NJ "Express Consent" 1. SCOTUS held NJ cld req out-of-state motorists to file formal instrument to appoint a NJ agent to receive process on his part a. By having motorists appnt agent complied w/ Pennoyer's reqt of instate service of procss which = inconvenient d. Hess v.Pawloski "Implied Consent" 1. Facts: Hess drove car in MA and struck Pawloski. H = rez of PA. P = sues under MA statute = driver assumes implied consent to the register becoming his agent by driving on MA roads w/ fee of $2.00, sent by registered mail. H argues violation of 14th Amend DPC. 2. Rule: States can require that motorists give implied consent to service of process on an agent within the state.

3. Holding: MA's enactment does not contravene the DPC of the 14th Amd. A state has the power to legislate that nonresidents who use its highways consent to the appointment of a third party as agent for the service of process in that state for actions arising from use of the highways. 4. Reasoning: a. Pennoyer v. Neff - must be actual service w/in the state upon him or someone authorized. b. Mere biz transaction w/in a state by a non-rez implied consent to be bound by process of its CTs. c. Public interest states state laws should be enforced to protect rezts from dangerous vehicles. Claimant should have convenient method to sue and enforce his rights = put non-rez in same footing as rez 5. Extra a. H Ct tries to be true to Pennoyer by assuming someone w.in the state is served => presence = gold standard 4. A new theory of Jurisd. a. International Shoe v. WA 1. Facts: WA has a tax on employers that goes into the unemployment fund. ISC did not pay and WA brought suit. WA served ISC agent + sent registered mail to MS (state) 2. Holding: 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. Due Process clause. a. Minimum Contacts Factors i. Regular and systematic solicitation of orders in state 1. Receives benefits of state laws over the years ii. continuous flow of product into state = doing biz in state. 3. Reasoning a. ISC args it is an Am corp from DL w/ principal place of biz in MS w/ 11-13 employees in MA but no permanent place of biz there. b. CT says here i. there was reg and systematic solicitation of biz in MA ii. There was a continuous flow of product into MA iii. Plus addtl acts like displaying samples in same permanent display, and salesmen reside in MA iv. Service of process satisfies DPC if satisfies min contacts and gives notice

1. To Employee w/in state 2. By Registered mail to principal place of biz b. Hypos 1. Apply ISC v. WA to Pennoyer v. Neff's first case w/ Mitchell. What would be the result? a. Not Liable i. H has no land yet ii. H bought prop but did not do biz there so not systematic and continuous = casual contact b. Liable = Winner i. Taking advantage of state benefit (land) ii. Hiring lawyer w/in state for a state transaction iii. Thus has contacts + systematic since lived there 2. Apply ISC v. WA to Hess v. Pawloski a. Not liable i. H there only once while driving ii. No contacts iii. Not continuous and systematic = casual b. Liable i. Can argue the tort is a big contact in the state. How is it big? Big in the sense of putting a citizen of the state in danger 3. WA rez orders shoes from ISC from salesman in WA a. Sue for breach of K to deliver one pair b. Neg+ breach of warranty of defective shoes c. In both cases have both systematic and continuous. Claim arises out of contacts 4. A CA woman who ordered shoes from salesman in WA while on visit in WA sues for injuries she experiences in Seattle. -> why does it matter if it happened in Seattle? Evidence is in WA = extremely important. 5. CA woman bought shoes from ISC in CA and injury occurred in CA. Sues in WA -> 1) systematic and continuous? YES, 2) Claim arises out of contacts with the state? NO. Thus not really fair play 5. Specific Jurisd and State Long Arm Laws a. Development of long arm laws 1. Hess v. Pawloski and ISC encouraged states to utilize police powers to create statutes 2. Gray v. American Radiator & Standard Copr a. Facts: Gray suffers tort from heater explosion. Sues Titan Valve for faulty valve in IL state CT. Summons issued and served to registered agent in OH. IL statute allowed this. Titan appears in special to contest service bc tortious act was not done by it in IL? Had no biz or agents there. CT held for Titan

b. Rule: The constitutionality of a long-arm statute is determined by looking at whether the "minimum contacts" test is satisfied and then looking to the reasonableness of notice under the statute. When the statute covers a particular event and that event both relates to the case and occurred in the forum state, the event satisfies the "minimum contacts" test needed to establish specific personal jurisdiction. In a products liability action, a defendant who sells products that he knows will be used within a given forum may be required to defend an action w/in that forum state, if the product sold in fact causes injuries w/in the state. c. Holding: Tort committed in IL. D's contact w/ state sufficient for DPC d. Reasoning i. Act was performed at place of manufct. Consequence occurred in IL. Tort tortious act. Tortious act = defective manuft of valve ii. In law - place of wrong = where the last event took place that render the actor liab + statute of limitations runs from time injury was done. Neg manuft and injury go together iii. To be tortious act must cause injury iv. ISC - min contacts w/ state + reasonable method of notification v. Here 1. Min contacts: look at volume of sales. Precedent McGee v. Intl Life Insurance held to have suff contacts w/ one insurance policy and no local biz or agents in state= based on K w/ CA e. Extras i. Continuous activity not always reqd ii. Commission of single tort = enough to sustain jurisd iii. Should look at case on case-by-case basis iv. Q whether D engaged in act/conduct by which he's entitled to benefits and protections of laws of the state v. DP moving towards opportunity to be heard and providing adequate notice + where both parties can conveniently settle suit vi. Public policy from McGee = Nationalization of commerce involving biz in more that one state + specialization of commercial activity rare manuftr dealing directly w/ consumer

vii.

Place of injury more convenient for trial - cost, evidence, witnesses

3. Hypos a. IL statute reads: A non-rex who either in person or an agent commits a tortious act w/in this state submits to jurid. -> against ISC b/c of lack of contacts but maybe under Hess v. Pawloski would work since there only one act of driving. b. Due Process (DP) and Long Arm Statutes 1. Worldwide -Volkswagen Corp v. Woodson a. Facts: Robinsons bought Audi from petitioner Seaway in NY. On way to AZ Rs rear-ended in OK. Mrs. R + 2 kids severely burned. Rs sue in product liab action in Dist Ct of OK. Seaway + distributor WWV deny OK jurisd bc only do biz in NY, NJ and CT. Rs lose. b. Holding: A non-resident defendant must purposely avail himself of the forum states privileges and protections for that state to have personal jurisdiction over him unless the case pertains to a product connected with defendants business that was brought into the forum state by the plaintiff. Foreseeability that the product might eventually enter the state is irrelevant if there is no purposeful availment of that states privileges and protections. c. Reasoning i. Min contacts reqd for far play and substantial justice (Pennoyer + ISC- D needs to be protected too) ii. When corp purposefully avails itself of the privilege of conducting activities w/in the forum state it has clear notice that it is subject to suit there and thus can get insurance to protect itself then pass cost on to consumers. Not the case here. BUT- No biz here and no substantial revenues from OK d. Dissent Brennan: Mjrty not weighing state's int enough nor is this inconvenient to D. Key Q is whether the particular exercise of jurid over absent Ds offends traditional notions of fair play and substl justice? i. Dealer here actually intended purchasers will use autos to travel far = purposefully injects vehicles into the stream of interstate commerce. ii. Min contacts test = Balance of factors 1. Contacts btw litigation and forum state 2. Contacts btw D and forum state

3. Int of the forum state in permitting litigation 4. Burden on D of litigating in forum state iii. If have no contacts whatsoever - then no balancing needed. There's a threshold inquiry. Only if have contacts bring in other factors e. Extras i. If standard = PURPOSEFULLY and Ct finds 75 cars from WWV in OK liab bc no purpose ii. If standard = FORSEEABLE then liab 2. Burger King v. Rudzewicz (Majority and minority unite from WWV) a. Facts: D established BK franchise then failed to pay rent. BK = FL corp w/ all principal offices in Miami. D = MI rez who entered into 20 yr agreement w/ BK. K = 20 yrs, payments to FL BK, all disputes w/ Miami, FL law governs. (CHOICE OF LAW - but did not say HAD to do it in FL). FL long arm statute extended jurid to anyone that broke a FL K b. Holding: A plaintiff need not show that an out of state defendant has both minimum contacts with the forum state and that it is fair and equitable to require the defendant to defend a suit in the state. A D is subject to suit in a jurisd if the D purposefully avails himself to that forum c. Factors for Det jurids i. Min contacts (purposefully availed himself) ii. Burden to D iii. Forum state's int in adjudicating dispute iv. Interstate judicial system's int in obtaining the most efficient resolution of controversies v. P's int in obtaining convenient and effective relief vi. Shared int of the several state on furthering fundamental substantive social policies (iv and vi = same factor) d. Reasoning: i. There is jurisd over a nonrez who purposefully directs his activities toward forum rezts b/c 1. State has manifest int in providing rezts w/ convenient forum for redressing injuries inflicted by non rez 2. Whenever indiv purposefully derives benefits from inter-state activities = unfair to escape accountability 3. DPC may not be used to shield voluntary obligation

4. Modern transpo / communication makes it easier ii. Factor test here 1. Min contacts (purposefully availed himself) -> YES 1. K w/ out of state party not enough 2. Prior negotiations 3. Terms of K 4. Actual course in dealing 5. No physical contact but there was a K - 20yrs + Choice of Law (since no case law this is not applied) 2. Burden to D -> YES 1. Lack of witnesses 2. Says didn't have notice 3. Forum state's int in adjudicating dispute-> YES 1. Protects citizens 4. Interstate judicial system's int in obtaining the most efficient resolution of controversies 5. P's int in obtaining convenient and effective relief -> YES 1. All evidence in state 6. Shared int of the several states on furthering fundamental substantive social policies (iv and vi = same factor) -> ???? e. Dissent: Unfair to req franchisee to defend case of this kind in forum chosen by franchisor. Rudzewicz did no business FL. The principal contacts were in Michigan w/ local BK office. Rudzewicz had local operation w/ far less resources than BK. It would be fundamentally unfair for Rudzewicz to be reqd to defend in FL. 3. Asahi Metal Industry Co v. Superior Ct (unanimous decision) a. Facts: Zucher had motorcycle accident due to product defect of tire tube. Z settled w/ Chen Shing Rubber Industrial Co who then cross-complained seeking indemnification from Asahi Metal Industry Co the manufctr of the tube's valve assembly. CA long arm statute authorizes exercise of jurisd on ANY basis not inconsistent w/ Const of state and USC b. Rule: A state cannot exercise personal jurisdiction over a foreign defendant when it would impose a serious burden on the defendant to litigate in the forum state and the interests of the plaintiff are slight.

c. Holding: The D must purposely avail himself of the forum by more than just putting a product into the stream of commerce with the expectation that it will reach the forum state, however, such conduct is enough to satisfy the minimum contacts requirement. Once it has been established that minimum contacts exist, the fairness requirement must still be met as well, which will be much harder to do in the case of a non-U.S. resident. d. Reasoning: i. Balancing of factors 1. Severe burden on Asahi - NO CA jurisd 2. Forum state CA doesn't have int in noncitizen - NO 3. P's int did not show CA more convenient NO 4. Int Jud system /share policies important bc int in careful considerations due to foreign relations- YES ii. No min contacts therefore personal jurisd not consistent w/ fair play and substl justice. iii. Stream of Commerce PLUS e. Counter i. It was foreseeable would be sued in CA + had indirect benefit from state laws to regulate and facilitate commercial activity. Placement on stream of commerce enough. 6. Jurisdiction based on Power over Property (After ISC quasi in rem = in personam) a. Shaffer v. Heitner (Combo of quasi in rem and in personam) 1. Facts: Shareholder derivative action by H, non rez of DL, owner of one share, against Greyhound Corp - biz w/ principal place of biz in AZ. Claim of breach of fiduciary duty. GH incorp under DL law. Officers have no physical contact in DL. H used DL statute to attach property (Stock). Stock sequestered. H gave GH officers notice via registered mail to last known addresses and ad in local newspaper. No special appearance allowed. If no appearance lose stock. 2. Holding: When the only contact the D has with the forum state is the location of prop as defined by statute in the forum state, the forum lacks pers jurisd over the D unless the min contacts test of International Shoe is satisfied 3. Reasoning: a. No issue GH has min contact in DL since incorporated there, prob is officers.

b. Quasi in rem and in personam are the same since in rem jurisd over the intrsts pf persons in a thing. Thus ISC should govern. (fair play and substl justice) c. In rem where claim solely on prop can stay the same bc i. Ds claim to prop in state gives him expected benefit from state's protection of his interests ii. State has strong int in assuring mrktblty of prop in its boarders + peaceful resolution to disputes of possession iii. Witnesses and records w/instate d. Here i. Prop not part of underlying claim ii. Wrongdoer won't escape obligations thanks to Full Faith and Credit Clause iii. Uncertainty of ISC is worth it to assure fair play and substl justice iv. Long history of jurisd based solely on presence of prop not decisive. Ancient forms no longer applicable. v. If DL had a big int the LEG would have made statute reach corp fiduciaries not only those w/ prop in DL> vi. No demonstration by D that DL is a fair forum to litigate. vii. No evidence that officers and directors purposefully availed themselves of the privileges of conducting activities in DL b. Hypos 1. Brown v. Goodyear a. Brown + Helms = 13 yr olds from NC who died of injuries suffered in a bus wreck in Paris due to tire failure. Goodyear Turkey made the tire. Parents of deceased sued Goodyear Tire and Rubber Co, based in US in NC. b. NC Sup Ct used Asahi test c. What to ask? i. Did this arise out of a contact w/ NC? 1. Accident in Paris 2. Goodyear Turkey not in NC 3. No specific jurisd - Asahi + ISC ii. General Jurisd? 1. Shafer v. Heitner? -> No 2. Q to ask Goodyear 1. Did you expect to have tires in US? 1. Yes, sold 5,906 in NC

2. Tire specs on tires written in English 3. Don't send them directly - use parent Co 3. ISC Test in gen jurisd? -> O'Connor stream of commerce Plus = Yes; Brennan plurality = Yes 2. Change hypo to happen in NC -> looks more like American Radiator, WWV, Asahi. a. Steps of Brennan Asahi test i. Check for purposeful availment -> Yes made $ here, stream of commerce ii. Balancing test 1. Forum state int - > yes accident happened there 2. P's int -> Yes 3. Interstate judicial systems - > No. foreign policy strain, but maybe since all witnesses there 4. Burden on D? -> No c. General Jurisdiction and state long-arm laws 1. General jurisd = no doubt Cts have power over D b/c D's presence in state so solid that Cts of that state have power over D w/o regard to where claim arose a. Corp = strong presence and indiv 2. Helicopteros Nacionales de Colombia v. Hale (in personam) a. Facts: Helicol = Columbian corp engages in helicopter transpo in Peru. Helico owned by Helicol crashed and killed 4 decedents of Ps. Ps are US citizens. Decedents worked for Williams-Sedco Horn w/ headquarters in TX b. Rule: For a court to exercise general in personam jurisdiction, the defendant must engage in systematic and continuous contacts with the forum state unless the defendant's contacts are related to the cause of action. c. Holding: Mere purchases even if occurring at regular intervals, are not enough to warrant a state's assertion of in personam jurisd over a non rez corp in a cause of action not related to those purchase transactions. Req serious physical presence in the state to be systematic and continuous. Need substl contacts d. Reasoning: i. Contacts not enough here here 1. Chief exec officer of Helicol flew to Houston to negotiate K

2. Helicol purchased 80% of fleet in TX + $4 million in accessories 3. Pilots trained in TX 4. Sent management and maintenance personnel to get plant familiarization in TX e. Dissent Brennan: i. Specific jurisd is implicated whenever the D's contacts w/ the forum "relate to" the cause of action ii. Fair and reasonable to subject D to suit in a forum w/ which it has signfcnt contacts directly related to the underlying cause of action. Here Helico's contacts w/ the state of TX meet this standard. f. Extra i. Would have been subj to personal jurisd for claims that arose out of its contacts w/ TX (specific jurisd) d. Jurisdiction based upon physical presence 1. Burnham v. Superior Ct (FORK IN THE LAW) a. Facts: B visiting his kids in LA when ex-wife serves him w/ divorce proceedings. B argues no min contacts in CA thus jurisd against fairness and substl justice (Shaffer v. Heitner - no more in rem/ personam etc always look for fairness standard) b. Rule: Physical presence in the forum state is enough to establish personal jurisdiction over the defendant. The minimum contacts test from ISC only applies to nonresident Ds absent from the state. c. Holding: Tradition says CTs of a state have jurisd ocer non rezts who are physically present in the state no matter how fleeting the visit. Voluntary presence reqd (Tickle v. Barton: Rule: If a defendant can prove that he was served with a summons and complaint only as a result of fraudulent conduct on the part of the plaintiff or the plaintiff's agent, the service is ineffective.) d. Reasoning

I.

No precedent that argues against the tradition

II.

Petitioner's strongest arg relies on Shaffer v. Heitner but it's rejected (claim must arise out of contacts with the state). - no more in rem/in personam/quasi in rem.

II.

Hypos A. Does Idaho have jurisd? 1. T inherits home in Idaho. T has never been there. After car accident S sues T in Idaho. a. Quasi in rem under Pennoyer b. In personam under Shaffer - need to establish min contacts c. Prop has nothing to do w/ claim 2. T is sued in Idaho when some kids fall into pit on prop and get hurt a. Quasi in rem under Pennoyer or in personam under Shaffer b. Under min contacts benefit from forum state laws. May be sufficient + state int of peaceful resolution. Witnesses also in stte. Prop has something to do w/ claim VI. Extras A. Pennoyer - Sheriff personally gets you B. Intl Shoe (ISC) - relationship w/ state but still have prob w/ personal service issue C. Shaffer - reasonable notice/reasonable cost Subject Matter Jurisdiction Fed SMJ delineates pwr of Fed Cts as a matter of federalism and Seprtn of Pwrs 1. Lawyer perspective = strategy Intro to state/fed Cts 2. Limited Jurisd Cts = small claims, probate, traffic Cts 3. Gen. Jurisd Cts = any type of case unless specifically excluded from Ct's pwr 4. Trial Cts = orig. jurisd; others have appllt jurisd a. Fed Cts

V.

5.

Fed SMJ: USC Art. III 2 + USC 1332(a) a. USC Art. III 2 - Judicial pwr of US extends ONLY to certain categories of cases

6.

1. "all cases, in law, and equity, arising under this Const, the law of the US and Treaties; 2. As well as controversies btw 2 or more states 3. Btw state and citizens of another state 4. Btw citizens of diff states 5. Btw a state or the citizen thereof and a foreign state, citizens or subjects or 6. Cases where the US is a party (ambassadors, consuls, maritime, etc) b. Congrss decides whether to create lower Cts 1. USC 1332(a) - Congress codified Judiciary Act of 1789 and gave fed Cts orig jurisd over certain cases in which the claims arise SOLELY under state law as long as USC reqts satisfied. a. Diversity jurisd. Reasons to keep it? i. Policy - discrim of non-state litigants + relations w/ foreign nations b. Why do we want Fed Ct? i. State judges are elected v. Fed Ct judges appointed for life term ii. Wider geographic jury 2. USC 1331 - Fed Cts may hear addtl Cases w/in constl limits including Cases arising under Fed law (Fed?) 3. SMJ NEVER waivable: Ct must dismiss if no jurisd even if parties consent d. USC 1332(a) - Congress codified Judiciary Act of 1789 and gave fed Cts orig jurisd over certain cases in which the claims arise SOLELY under state law as long as USC reqts satisfied. Diversity jurisd

a. b.

Test = Two Reqts Parties must have diverse citznshp as defined by statute Amount in controversy must be more

c.

d.

than $75,000. (since 1996) Types of Diversity 1332(a) 1. 1332(a)(1) - cases btw citzns of diff states 2. 1332(a)(2) - " ctzns of state & citizens of foreign state (NY v. Brazil- citizen not just domicl) 3. 1332(a)(3) - " citizns of diff state + a foreigner (N. Y. v. S.C. , Brazil ) 4. 1332(a)(4) - " foreign state as P and ctzn of state or diff states as D (Brazil v. S.C) 5. No jurisd over cases btw citizens of foreign states (Nigeria v. France) Determining Ctznshp 1. Individuals a. Domicile i. Physical presence ii. Intent to remain indefinitely b. Mas v. Perry - "pervert Landlord" i. Facts: Paul and Mas of France and Judy Mas of MI settled in LA after their marriage w/o intending to remain there permanently. They brought suit in Fed ct against Perry a MI rez, basing fed jurisd on diversity of Ctznshp. Paul and Judy deny being citzns of LA. ii. Rule: For purpose of diversity, "domicile" is a permanent home, and reqs intent to remain permanently in a state iii. Holding: Appellees proved diversity under 1332(a)(a) and (2): citzns of diff states + ctzn of foreign state against ctzn of diff state), where spouse does not automatically take up residence of the other spouse, and her domicile was MS and although she spent time in LA, that whole time she was only a student, and thus lacked the intent to remain there. iv. Reasoning: Fed Cts have jurid of spouse's actions against D if they already have jurid over a claim arising from the same transaction by the other spouse against the same D. v. Extra: 1. Under Rule 12(b)(1) - D made motion to dismiss for lack of SMJ. 2. If got thrown out, Ps prob would not sue in State Ct due to $ 2. Corporations 1332 (c) - more than one state of citizenship possible a. Citizn of state of incorp

e.

f.

b. Ctzn of principal place of biz i. Nerve Center Test - headquarters location ii. Muscle Test/Corp Activities - bulk of day to day operations iii. Total Activity Test (hybrid) c. Exception: Insurance Co = citzn where insured lives d. Corp cannot have more than ONE place of biz 3. Unincorp Association a. Ctzn of EVERY state in which ANY member is a citizen b. Partnership, labor unions, etc c. Diversity Jurisd rarely exists Complete Diversity Reqt = NO P may have the Same ctznshp as ANY D (Strawbridge v. Curtis) 1. Applies by statute not Art III 2, meaning Congrss can allow diversity based on MINIMAL diversity (=> ANY P's ctznshp diff from ANY D) 2. Det ctznshp from when case filed 3. Examples a. DE corp --> DE /MI = No diversity b. FL --> TX / LA = Diversity c. FL --> TX / TX = Diversity d. FL --> DE corp / MI = Diversity Other Diversity Ctznshp Rules 1. Stateless ctzn diversity jurisd 2. Representative of decedent = state of decedent 3. Infant or incompetent rep = same as infant/incompetent 4. Multiparty Multiforum Act 1369 - Catastrophic mass accident a. When at least 75 natural persons have died in accident b. At a discrete location c. Provided min diversity exists btw adverse parties d. and other conditions satisfied e. Have diversity 5. Class Action Fairness Act (CAFA) USC 1332(a) eliminates complete jurisd reqt + alters amount of controversy reqt a. Ct can use discretion to accept or not - ie will decline if more than 2/3 citzns of same state b. Reqts i. Min diversity ii. Aggregate amount in controversy exceed $5 Million 1. Doesn't matter if have complete diversity or that P has amount in controversy

g.

Amount in Controversy Reqt USC 1332(a) = $75,000 (1996) to reserve Fed Judge for important work 1. Problems a. When a complaint demands an impossible amount i. Ps demands at least $75,000.01 or in "excess of ", even if only recovers $50,000 -> OK ii. It appears a legal certainty the claim is really for less - statutory max can be recovered is less than $75,000 -> NOT OK "Whitchurch Standard" 1. AFA Tours v. Whitchurch 1. Facts: Whitchurch worked for AFA for 17 yrs as a tour escort. Upon his resignation, W attempted to organize his own tour biz, using info he had misappropriated from AFA. AFA commenced action is Dst Ct for misapp of trade secrets, and sought an injunction against use of info. AFA claimed damages in an amount which is not presently ascertainable, but which is believed exceeded the sum of $50,000. The Ct raised the issue of whether the value of the claims exceeded the amount in controversy reqt. Ct did not give AFA an opp to present evidence for their good faith estimate and the evidence presented shows the amount in controversy could be sufficient 2. Rule: Holding: In a diversity suit, the proper test governing the amount in controversy is whether the sum claimed by the P is made in good faith. It must appear to a legal certainty that the claim is for less than the min amnt to justify dismissal. Thus, 1. The sum claimed by the P controls 2. UNLESS the claim is not made in good faith and 3. It appears to a legal certainty that the claim is really for less than the jurisdictional amount to justify a dismissal b. When a party seeks non-monetary relief

Determ value of injunction relief 1. P viewpoint rule 2. Viewpoint of party seeking to invoke Fed Jurisd 1. P - case orig brought in Fed Ct 2. D - case removed from Fed to state Ct 3. Either Viewpoint Test = pecuniary result to either party c. When lawsuit includes multiple claims/parties i. Same party has 2 claims against same D = OK

i.

h.

Diversity Hypos 1. Ted born and lived in NY until 2000. T has been working in Hong Kong since 2000. T has said he wants to return to NY, but has been promoted several times and remains in Hong Kong. His Hong King Visa application lists his permanent address w/ his parents in NY. Visits NY 3 times a year and a lot of his stuff is still in NY. T also leases an apt in Hong Kong. Pays taxes in NY and Hong Kong. Votes in NY. T has a bank account in NY and NY driver's license. T is seriously dating French ex patriot that lives in Hong Kong. Plaintiff Ted sues Defendant Leung for defamation and breach of contract in federal court in New York. The defamation claim is for $40,000 and the contract claim is for $35,000. The complaint also demands an injunction ordering Leung to remove allegedly defamatory content from his website. Ted is a U.S. citizen, but he has lived in Hong Kong since 2000. Leung moves to dismiss for lack of subject matter jurisdiction. a. Is there amount in controversy? i. P Viewpoint Test: Maybe if count value of injunction ii. D Viewpoint Test: Cost to D to

Cost to whomever is insisting on Fed Ct or removing to state Ct- ?? b. Is Ted a ctzn of NY? i. T has BoP to show diversity ii. Mas v. Perry Test => Intent to stay in HK? (indefinitely)

iii.

g.

Problem: 1. Ted NY v. Leun CA = OK 1332(a)(1) 2. Ted HK v. Leun CA = NO bc Ted not ctzn of HK Fed Question Jurisdiction 1331 1. Gives US Dist Ct ORIG jurisd over ALL civil actions arising under USC, laws, treaties of the US a. Osborn v. Bank of US 1824 i. Facts: Bank sues to get $ back from OH officials. Bank gets $ back in Fed Ct. OH officials claim lack of FQJ bc Common Law claim. Bank says there is a Fed statute that says B of US can sue or be sued in Fed Ct. OH counters arg stating Congrss didn't have the authority to pass the statute based on 10th Amend and Art III 2 bc has to "arise out of USC" ii. Holding: Bc bank is chartered out of USC law, then any claims against bank arises out of USC. 2. Types of cases: civil rights, securities, anti-trusts - regardless of amount at state after 1980. 3. The Well Pleaded Complaint Rule: P has to present cause of action based on FQ a. Louiswille & Nashville RR Co v. Mottley 1908 i. Facts: Ps, citizens of KY, sued D, a KY corp, in fed Ct for breach of K bc they had lifetime passes to ride RR which were then revoked. The complaint stated that this breach was due to Congress passing a statute and that the statute did not apply to Ps situation and that it violated the Fifth Amend. of the U.S.C. D moved to dismiss, arguing federal Ct did not have jurisd bc none of the issues in Ps' complaint "arose" under fed law (lack of SMJ). ii. Rule: Under the well-pleaded complaint rule, if the facts alleged in a complaint do not demonstrate an

c.

issue involving fed law pertaining to the P's right to a cause of action, there is no Q of Fed law and the fed Cts do not have FQJ. An anticipated defense is not part of the P's case and thus cannot be a basis for FQJ. iii. Reasoning: 1. Ps believed had jurisd bc claim arose under Fed law Q of statutory interp (whether statute applied to Ps _ Q of Fed Constitutional law, whether statute violated USC). 2. BUT Sup. Ct stated that most basic level of Ps' claim = breach of K w/ RR. Fed issue arose out of RR's defense to breach of K and Ps' response. 3. FQJ claim itself MUST arise under Fed Law iv. Extra 1. 1331 is use to detrm if Fed Dst Ct has jurisd. Then on review Sup Ct used Art III 2 (Osborn) 2. 1257 - final judgments by state Cts MAY be reviewed by Sup Ct by writ of certiorari b. Mottley Rule: A suit arises under the USC and laws of the US ONLY if the ORIG statement of the P's cause of action shows that it is based on the USC or Fed statutes NOT bc D uses Fed Law to defend himself 3. State law claim w/ Fed Issue = type 2 FQJ a. FQ TEST - Fed Cts have FQJ when i. Fed Const is an ESSENTIAL element of pleaded claim ii. Case implicates a substl fed int iii. Fed issue is contested iv. Fed jurisd would not interfere significantly w/ division of labor btw state and fed Cts b. Example: P suses on state claim of neg or breach of K - but in complaint, P states D violated a fed law = Satisfied Mottley rule c. Private Rights of Action = suits brough by prvt litigants against prvt persons allegedly acting in violation of a statute i. Merrel Dow Pharmaceuticals v. Thompson 1. Facts: Ps, rezts of Canada and Scotland, sued Ds, including Merrell Dow, for negl in OH state Ct based on injuries allegedly sustained by ingesting drug Bendectin. One of the counts alleged that the conduct was neg per se in violating the fed Food, Drug and Cosmetic Act. D filed a petition for removal to fed Ct claiming there FQJ over cause of action bc neg per se count "arose"

from fed law. Case removed to fed Ct. Ps filed motion to remand back to state Ct, which was denied. Fed Ct granted Ds' motion to dismiss for forum non conveniens. The Ct of App reversed, stating action should be in state Ct. Ds appealed. 2. Rule: In order for a fed Ct to have FQJ, the law that the claim "arises" from must be a 1) prvt cause of action 2) for which Congress intended to provide a remedy 3. Reasoning: 1. The factors to det whether there is a fed cause of action are the Cort v. Ash Factors = Modern Implied Remedy Doctrine 1. whether the statute was passed for the benefit of individuals like Ps; 2. whether there was a congressnl purpose that there be a prvt cause of action; 3. whether the federal cause of action would further the purposes of the statutory/regulatory scheme; and 4. whether the cause of action is usually under state law. 2. Two things must be considered: the number of federal cases this would create and legislative intent. 1. Congress specif said there wld be no private fed cause of action for violating this statute. Thus fed issue not substantial enough to confer fed jurid. 2. Fed Cts still have appellate jurisd over the interp of statute. 4. Extra 1. MDP wants to move to Fed Ct BUT Removal statute 1441 says Diversity action only removed to forum that is not the ctznshp state of D or P. 2. Liberal judges- Brennan, Marshall, Blackmum dissented. = circt split about whether need a Fed Q or need a

Q that TURNS on Fed Q. Leads to Grable. ii. Grable & Sons Metal Products v. Darue Engineering & Manu (Contrast to MDP) 1. Facts: IRS seized prop owned by G and sold it to Darue. G sued under state law to quiet tilte to the prop, alleging that the notice of seizure by the IRS was defective and thus the sale = invalid. Complaint was well-pleaded in Mottley sense bc 1) reqd fed law (IRS Notice Provisions) to assert an element of the claim and 2) Fed govt had substl int in assuring IRS notice provisions were interpreted consistently. Fed issue disputed. Also, adjudication of cased would not interfere w/ state/fed ct division of labor 2. Procedure 1. D removed to Fed Ct after G brought orig claim to state Ct bc depended on interp of Fed law 2. Dist Ct declined to remand bc could keep Fed Jurisd (1441(a) - can be removed to Fed Ct if could have been brought there orig) 3. Dist Ct granted SJ for D - sufficient compliance w/ statute enough 4. Ct of App 6th circ affirmed 5. Sup Ct granted writ of certiorari - Q was whether MDP ALWAYS reqd Fed cause of action as a condition for exercising FQJ? 3. Holding: Under 1331 a property owner, whose land has been taken and sold by the IRS to repay a tax debt has a fed claim when they bring a quiet title claim to state ct on the question of notification and the D removes it. The fed issue raised here was substantial. 4. Grable Test 1. Does a state-law claim necessarily raise any fed issues (state law resolved only if fed law resolved) 2. actually be disputed (meaning of fed law must be in dispute) 3. Substantial,

4.

Which a fed forum may entertain a/o disturbing any congrssnlly approved balance of fed and state judicial responsibilities 1. Is there history of granting FQJ to a claim of this nature 2. If the state law claim has not incorp a fed law into its framework then 4th element met

5. Extra 1. Uncommon exception usually arises OUT of Fed Law, but here arose out of state issues entirely yet TURNED on Fed issue 2. Ct realized would not flood gates later

h.

Supplemental Jurisdiction 1367 1. If have FQJ over one part of case, is there FQJ over the other parts? 2. 1367(a) "Pendant Jurisdiction" - If Fed Ct has jurisd over an action, then Ct shall have supp jurisd over ALL other claims that are so related to claims in the action w/in such orig jurisd that they form part of the same case or controversy under USC Art III

a.

United Mine Workers v. Gibbs 1. Facts: P Gibbs sued UMW in Fed Ct for (1) Labor Management Regulations Act - fed statute (FQJ) and (2) CL tort for interference w/ his work (NO FQJ). No diversity bc both from TN.

c.

Rule: "Common Nucleus of Operative Fact." Under the doctrine of pendent jurisd, if the fed claim and state claim arise from the same "case or controversy," the fed Ct can exercise jurisd over the state claim as well. If the fed and state claims arise from a "common nucleus of operative fact," then they comprise the same case or controversy. The Ct should not exercise jurisdiction if there would be high risk of jury confusion, the fed claims are dismissed, or it would otherwise preserve judicial expenses. 1367(b) - Supp Jurisd in Diversity cases - Exception 1. Supp Juris does not extend to P's claims against 3rd party D, nec parties, joined party, intervener if diversity NOT met. = MUST have COMPLETE jurisd. 1. Only claims by Ps for persons under Rules 14,19,20,14 2. Doesn't matter for SMJ 3. Examples

b.

b.

Owen Equipment & Erection Co v. Kroger 1. Facts: James Kroger electrocuted by crane too close to power lines. Widow sued power co in fed Ct. Power co asserted a 3rd party claim against equipment co that operate the crane. Then Kroger asserted a neg claim directly against the equipment co.

b.

c.

Holding: No FQJ if the P would not have been permitted to file a Fed Ct lawsuit against both the D and the 3rd party D. Thus should not be allowed to accomplish something by waiting to assert the second claim until after the other D was joined as a 3rd party. Reasoning:

i. Look to orig diversity suit Discretionary Decline of Jurisd 1367(c) - Cts can decline to exercise supp jurisd 1. May decline under 3 circs a. Claim raises a novel or complex issue of state law b. Claim substantially predominates over the claim or claims over which the Dist Ct has jurisd c. Dst Ct has dismissed ALL claims over which it has orig jurisd Removal 1441 - State Ct to Fed Ct i. Must meet rules of SMJ (FQJ, Diversity, or Class Action) ii. If many Ds - all must agree to remove iii. In state D Exception 1441(b) - may not remove case based on diversity jurisd. Removable only if none of the other Ds are citizens of the state in which the action was brought. (Logic- D should not be worried of bias in own home Ct) iv.

iv.

v.

Removal procedure - Don't ask just MOVE, no motion 1. D Files Notice of Removal 1446 to notify Ct and parties of removal 2. D gives state Ct Notice of Notice of Removal 3. P may move to Remand the case back to state Ct once in Fed Ct. Fed Ct decides on SMJ Separate and independent Fed Claims 1441(c)

1. Allows Fed Ct discretion either to retain or remand a state law claim when a removed case includes both a Fed Q claim and a separate and independent non-removable state law claim. Weird to be allowed to remain under Art III if sep and indep bc NO common nucleus iii. Venue 1. State Ct = what county or counties may be brought? 2. Fed Ct = what district?

iii.

iv.

Venue in state Ct det by state statutes 1. Local actions - real prop = brought in Ct where prop located 2. Transitory actions - all other actions = anywhere the gen venue rules permit as long as D is subject to PJ Venue in Fed Ct 1391(a) = Diversity ; 1391(b) = FQJ 1. 1391(a) or (b)(1) = D's residence - cause may be brought in a judicial dist where any D resides, if all Ds reside in the same state, otherwise if many locations then where the relevant events occurred a. Residence of Corps - residence = ANY judicial dist in which it is subj to PL at the time the action is commenced 1391(c) a. Only need to get to PJ Q if only one corp D. b. If multiple Corp Ds then i. Where does each D have PJ? ii. Are there any dist where many Ds have PJ? b. 1391(a)(2) (b)(2) - Events or Property a. Case may be brought in a judicial dist in which a substl part of the events or omissions giving rise out the claim occurred, or a substl part of the prop that is the subj of the action is situated c. 1391(a)(3) (b)(3) - Fallback provision a. Extremely rare b. Applies only if there is NO proper venue under either sec 1 or 2. Case may be brought in a judicial dist in which ANY D may be found, if there is no dist in which the action may otherwise be brought i. All events occurred outside the country and P chose to file in US and Ds did not reside in same state

v. vi. vii.

viii.

ix.

x.

xi.

Waiver - if a D does not object to P's chosen venue, then the Ct may go ahead and hear the case Rule 12(h)(1) Venue upon removal - if remove from state Ct, goes to that state's Fed Ct Venue Transfer Rule 12(b)(3) Motion to transfer 1. Only w/in single judicial system a. Fed Ct -> Fed Ct b. One county -> other county c. NOT one state -> diff state 2. First Ct = transfer Ct; Second Ct = transferee Ct c. 1404 - cases that are filed in a Ct that has jurisd and venue is proper but under circs, more convenient to be heard elsewhere d. 1406 - cases that are filed in a venue that is NOT proper and permits a Ct to transfer from the impermissible venue to the permissible one Venue Transfer from a proper forum 1404(a) a. Fed judges have the discretion to transfer an action to a more approp dist for the convenience of the parties and witnesses, in the interest of justice, to another dist where it may have been brought (has PJ and venue) b. Highly discretionary c. Case can be REMOVED from state to Fed Ct but ONLY TRANSFERRED btw judicial districts Venue transfer from improper forum 1406 and Rule 12(b)(3) a. Can dismiss form improper venue BUT 1. Ct can decide to dismiss or transfer 2. Can be interp to include BOTH improper venue and PJ Choice of Law Van Dusen Rule a. If case brought in proper venue but Ct transfers, so does substantive law of that state BUT b. If the case was brought in improper venue and the Ct removes, the P is not entitled to the same substantive law c. CA Ct has choice of what law it wants to apply Forum Non Conveniens (to transfer outside judicial system) a. Used when more appropriate forum is in another (diff) Ct system 1. Case filed in state Ct that ought to have been filed in a diff state 2. Case filed in US that ought to have been filed in other country b. Applies only if first Ct has power over the case 1. If Ct lacks jurisd should dismiss for lack of jurisd 2. If improper venue, should dismiss for improper venue or transfer to proper one c. Piper Aircraft v. Reyno 1. Facts: Ps sued Ds, in state Ct arising from injuries sustained in a plane crash in Scotland. The cases were removed to fed

iv.

Ct and transferred to the Dst Ct of PA. Ds moved to dismiss under the doctrine of forum non conveniens, arguing that the better forum was located in Scotland. 2. Rule: The doctrine of forum non conveniens allows a court to dismiss a case that was brought in the wrong forum. When all or most of the significant events, witnesses and evidence are centered in one location, then a court must dismiss a case brought in another location under the doctrine of forum non conveniens unless the alt forum provides the P w/ absolutely no remedy. Whether the law of the forum chosen by the P is more favorable to the P should not be given weight. a. Gulf Corp v. Gilbert Test i. Adequate alt forum ii. Prvt interest factors iii. Public int factors 3. Holding: Held to dismiss for forum non conveniens 4. Reasoning a. Adequate Alt forum i. Does other forum have PJ? ii. Would case be barred there by statute of limitations? iii. Adequacy of legal system of alt forum? - possibility of change in substantive law should NOT be given conclusive or even substl weight b. Private Int Factors i. Location of parties, witnesses, evidence? 1. In Piper accident site = Scotland. Pilot and plane services = Scotland. Potential 3rd party Ds = Scotland. Airplane owners = Scotland. Airplane charter co and pilot estate = Scotland. ii. Biggest weight is whether the forum is the P's home or not. If not, then not likely to stay. D's can waive this c. Public int Factors i. Flood of cases into US? ii. Which forum has a greater int in the dispute? iii. Which forum would offer a more efficient and approp use of judicial resources? 1. In Piper, pub int factors split but did not want complex choice of law issues - Apply Scottish law in US. The Erie Problem Doctrine "Vertical Choice of Law" a. The issue: "Can you litigate in Fed Ct to avoid neg precedents in state Ct? "

1. No. Unless a specific Fed statute or Rule applies. Fed Ct MUST apply state substv law 2. Apply Fed law to Fed matters = anti-trust, securities, otherwise use state law 3. Fed Cts apply own procedural rules so have to analyze whether state or Fed law applies to particular issues b. The Basic Doctrine 1. On state claims, Fed Cts apply state substv law and Fed procedural law. a. Diversity Jurisd case brought to Fed Ct. TN tort = TN Substv law but Fed procedural law c. Development of the Erie Doctrine 1. Swift v. Tyson - unanimous decision 1842 "Main land speculators sold land they didn't own to Nyers" a. Facts: Commercial law dispute in Fed NY Ct.. Tyson paid for land w/ Bil of Exchange - pay on future date. Speculators owe Swift and so give Tyson's Bill to Swift as payment. Tyson now claims fraud. Fed Ct had SMJ based on diversity. Dispute of K law: Whether discharge of debt can be consideration for a K. Precedents in NY state = NO bc of Fraud. <-- this is a prob for creditors. English new law -> T pays since accepted w/o notice of fraud. T is the greatest cost avoider since could have done a title search. b. Rule: The Rules of Decision Act, 1652, is strictly limited to local statutes and local usages of the character before stated and does not extend to Ks and other instruments of a commercial nature. The true interp and effect should be sought not the previous decisions of the state Cts. c. Holding: Fed Cts exercising jurisd on ground of Diversity need not in matter of gen jurisprudence, apply unwritten law of the state as declared by its highest Ct. Fed Cts are free to exercise indep judgment as to what CL of state should be. d. Reasoning: The Rules of Decision Act, 1652 = Fed laws of the several states except where USC and treaties provide, shall be regarded as the rules of decisions in civil actions in US Cts. => State laws = rules of decisions. i. "laws of the several states" = statutes and regltns NOT gen CL. ii. Fed Cts should "ascertain upon gen reasoning ans legal analysis what is the just rule furnished by the principles of commercl law to govern the case" iii. Judges don't make ;aw - they discover it = Truth iv. In ordinary use of land, Ct decisions = laws but not so e. Extra i. Case decided in heyday of CL

Judge Story believed judges in charge of finding the truth by examining ALL relative authority. iii. Gvt and judiciary seeking greater uniformity and stability. Wanted biz men to trust out-of-state negotiable instruments iv. Decision helped simplify commercl law and simultaneously encouraged nationalist goals of Fed govt. v. Problems w/ decision 1. Manipulation in form of forum shopping 2. Discrimination by non-citzns of ctzns. 2. Erie RR Co. v. Tompkins - overrules Swift v. Tyson a. Facts: Tompkins (P) walking along path next to RR tracks in PA when an object protruding from a train struck him. P sued Erie RR Co (D), owner of prop, for neg in fed ct. D based in NY. Under PA law, P = trespasser and D only owed a duty to avoid wanton neg. The majority rule, however, is that a RR owes a duty of ordinary care to a traveler on a footpath. Dist Ct applied gel law and found for P. Ct of App affirmed. b. Rule: The term "laws" in 34 in the Judiciary Act of 1789 (the "Rules of Decision Act") refers to the decisions of local tribunals as well as state statutes, their interpretations by the Cts, and the rights and titles to things having a permanent locality. c. Holding: Overruled Swift v. Tyson. Ct held the Fed Ct MUST apply PA CL. R of D Act includes state statute + CL decisions of state Cts. = Paradigm shift d. Reasoning: i. Holmes had changed view that law was discoverable. Believes law is really MADE. = set of rules established by those w/ the power to govern at a partic time and place. ii. Way to avoid discrim in favor of out-of-state litigants bc citizens cannot remove under 1441(b) (Removal Statute- since it is a diversity suit, only a D may remove if not a rez). iii. No more manipulation of Ct system iv. Fed Cts are Cts of limited jurisd and thus cannot "supervise" the decisions of state Cts unless such authority is specifically delegated to them in the USC. Thus, there is no fed CL. State CL and statutes should be given equal force in the fed Cts deciding state law. e. Dissent: i. Butler- There was no Constl Q raised here or below. Ct cannot consider ANY Q NOT raised below and

ii.

presented by the Petitioner. Furthermore, the case cited as grounds for overruling Swift v. Tyson was a single dissent authored 50 years after the Tyson decision was announced. f. Concurring i. Reed-The rule in Swift was not unconstitutional, it was just erroneous. The Court's opinion here implies that the federal courts must follow state decisions involving substantive law, whether Congress legislates or not, because to not follow state decisions would violate the constitutional autonomy of the states. This implication is questionable, because under Article III and the necessary and proper clause, Congress can restrict federal courts' adherence to state common law. g. Extra i. Keeps power of Fed Cts in check (Sep of Pwrs) constl foundation for limiting Fed Ct Pwr ii. Fed Ct MUST now follow choice of law rules of the state in which the Ct is located iii. Rests on Supremacy Clause + associated political and procedural safeguards of federalism 1. 10th Amend does not tell Cts what rule to apply so states choose. Enumerated Pwrs do not give Congrssnl power 3. Hypos a. "The statutes and local rules of the several states and Fed CL, shall be the rules of the decision in diversity cases in Dist Cts of US." Is this new statute constil? i. No bc Fed law not constl under 10th Amend. b. "Right to have Fed Rules of Civ Pro" => No bc Congrss has power to set up Cts. 4. Guarany Trust Co v. York 1940 - "Outcome Determinative Test" a. Facts: Bond holder sued trustee in Fed Ct for breach of fiduciary duty = equitable claim. Under Erie, Ct would apply NY law about issues regarding fiduciary duty. But what about statute of limitations? NY statute of limitations had already run out. At time Fed Cts in equity cases applied Doctrine of Laches NOT statute of limitations, which gives Ct discretion to decide if P has waited too long to bring suit. b. Rule: In a diversity suit brought in equity, an equitable right created by a law of the state whose laws govern the case must be followed by a fed dist Ct if applying the fed law would significantly affect the outcome of the case. c. Holding: When there is a diversity suit, the Fed Ct should use the Outcome Determ Test to ensure that the outcome of

the Fed Cts application of law would not be f=diff that the outcome if the state had tried the case. d. Reasoning: i. Line btw substv and procedural law blurred ii. Point of diversity jurisd is to provide another tribunal NOT another body of law. Thus outcome should be substantially the same (Fairness in removing prejudice) iii. Outcome Determinitiveness Test 1. If the diff btw the Fed and State rule would det the outcome, the Fed Ct MUST apply STATE law. e. Extra i. Problem is that this is too simplistic to solve substve/procedural distinction 5. Byrd v. Blueridge Rural Electric Corp - "Employee v. Indep Kor" "Balancing Test" a. RARELY USED b. Facts: Byrd (P), a rez of NC, sued Blueridge, (D), a SC corp, for neg in fed Ct in SC. P was injured while working for a construction contractor that had a subcontract with D. D asserted an affirm defense that P was barred from suit under SC Workmen's Comp Act bc P was a "statutory employee" and must accept statutory comp as his exclusive remedy. Jury returned verdict for P. Ct of App reversed and directed judgment for D, holding P was in fact a statutory employee. P appld, arguing Ct of App should have remanded to give P opp to introduce further evidence. On appeal, SCOTUS held in favor of P and addressed an addtl Q of whether there should be a bench trial (as would be the case under SC law) or a jury trial (as required in Fed Ct by 7th Amend). iii. Rule: When a state law conflicts w/ a fed law and the state law does not involve rights and obligations, the fed law must be applied. The Ct should not only look to whether the state law would be "outcome determinative" but also whether applying the state law would hinder the functioning of the federal court. 4. Holding: The Erie doctrine does not mandate that state law be applied in determinations of rights regardless of conflict w/ Fed laws and USC. 5. Balancing Test a. Whether state practice is an integral part of state law & Bound up w/ def of obligations and rights of parties (then more substantive) b. Whether competing Fed policy put weights int of state

6.

c. Whether there will be a diff result 6. Reasoning: a. Countervailing Fed int in the allocation of power btw judge and jury in Fed Ct, especially in light of 7th Amend affirmation of the role of the civil jury. b. SC position allowing judge to decide NOT bound up by state-created rights and obligations(Fed Sep of Pwrs issue) - if it is important to state looks more substantive. c. Balancing strong fed issue in the power of fed jury against the state int in having a judge decide. - Fed int more important thus Fed Ct need not follow SC law i. Rare to have countervailing fed int tip scales. Here taking someone's 7th Amend right reqd state to have a good arg to do so Hanna v. Plummer - Most important for Erie Doctrine a. Facts: Hanna (P), ctzn of OH , sued Plummer (D), citizen of MA in fed Ct in MA. D was executor of Osgood's estate. Osgood was also a MA rez. P alleged that she was involved in a car accident w/ Osgood in SC. Service of process was made by leaving copies of summons w/ D's wife, which complies w/ FRCP 4(d)(1). D filed an answer stating that the action could not be maintained bc it did not comply w/ MA. Gen Laws Chapter 197, Sec. 9 which requires in hand delivery of summons. Dist Ct granted SJ for D after finding MA law was "outcome determinative." Ct of App affirmed Dist Ct's judgment, ruling that the LEG purpose of the MA statute was to req personal notification w/in a year, which is a "substantive" matter. b. Rule: If the rule at issue is procedural and the fed rule is on point with the state rule, then the Fed Rule must be applied as long as it complies with the Rules Enabling Act, 28 U.S.C. 2071 and the U.S.C. If there is no fed rule on point, then the Erie doctrine should apply. c. Reasoning: i. Rules Enabling Act (REA) - if Rule 4 was valid under REA, and if it was a Constl exercise of Fed authority, the the Fed Ct obligated to apply that rule. ii. REA = statute by which congrss empowered SCOTUS to develop procedural rules for the Fed Dist Cts. i. Restriction to rules 1. By def, rules must be rules of practice and procedure 2. shall not abridge, enlarge, modify any substv right. ii. Rule 4 passes muster

7.

d. Extra i. Under Byrd would follow state law bc fed int not as high as state int and it is outcome determtv ii. Hanna makes Erie more clear i. Twin arms of Erie 1. Discourage forum shopping 2. Avoid inequitable admin/ application of laws Walker v. Amco Steel Co. a. Facts: Walker, P, rez of OK, injured Aug 22, 1975. P filed complaint against ASC, D, foreign corp, in fed Ct based on diversity of citznshp on Aug 19, 1977 for products liab case (nail head shattered and injured P). Service of process was not made on D's agent until Dec 1, 1977. D filed motion to dismiss bc statute of limitations had run by time D was served. OK state law states that the action is commenced for purposes of the limitation when the complaint is filed if D is notified w/ 60 days of filing the complaint. 60 day limit had expired by time D was served so the statute had run. P arg that FRCP 3 governs the case. i. Rule 3 states: "[a] civil action is commenced by filing a complaint w/ the Ct." Dist Ct dismissed complaint bc the OK statute was "an integral part of the Oklahoma statute of limitations" and under Ragan v. Merchants Transfer & Warehouse Co (factually analogous to Hanna so many thought was overruled but Ct chose to distinguish), state law must be applied. Ct of App affirmed. 2. Rule: A state's provision tolling its statute of limitations should be analyzed under the Erie doctrine. Consequently, a state's tolling provisions must apply if it would have prevented the P from filing a suit in state Ct. In addition, Rule 3 does not conflict w/ tolling provisions bc it only refers to the time a lawsuit commences under the Fed Rules. 3. Reasoning a. Hanna and Ragan are distinguishable from each other because in Hanna, Rule 4(d)(1) of the was in direct conflict w/ the MA law governing service of process. In Ragan, the state tolling provision was applied and not Rule 3. Rule 3 does not explicitly apply to the tolling of the state statute of limitations. Rule 3 governs the times at which limitations of federal rules begin to run, but does not establish the time at which a state statute of limitations begins to run. b. Under Hanna

8.

9.

we would want to know if there is a Fed rule that applies. Here there is. ii. Then we would want to know if it was applicable under the REA. iii. Here it seems that by using the Fed rule that the P's right would be enlarged and the D's rights abridged. P is being allowed extra time to bring a claim that he could not otherwise bring Stewart Org v. Ricoh Corp a. Facts: Stewart, P, sued Ricoh Corp., D, in fed Ct in AL based on diversity. D asked fed Ct to use its discretion under 28 U.S.C. 1404(a) to honor the forum selection clause and transfer the case to NY, or, alternatively, to dismiss the case for improper venue based on 28 USC 1406. Dist Ct denied motion, stating that the case is governed by AL law and AL disfavors forum selection clauses. Ct of App accepted jurisd. Panel of the Ct of App reversed, stating venue Qs are governed by fed law, and that the clause was enforceable as a matter of fed law. Ct of App reversed and remanded to transfer BY. Ct of App en banc affirmed panel's decision. P appealed. b. Rule: Fed policy of having Dist Ct judges consider interests Congress has enumerated in a statute prevails over a state policy disapproving certain means by which venue might be decided c. Holding: In a fed Ct sitting in diversity, an issue regard venue is controlled by fed law as opposed to state law. d. Reasoning: Because the two statutes conflict with each other, the fed statute controls. It is w/in Congress' power to enact 1404(a) bc that section can be classified as procedural and does not change the applicable law regarding venue in Alabama Gasperini v. Center for Humanities, Inc. a. Facts: Gasperini (P) sued CH (D) in fed ct based on diversity. Jury returned verdict for P of $450,000 in comp damages. D moved for new trial under Rule 59, arguing verdict was excessive. Dist Ct denied motion. Second Circuit vacated judgment based on NY law allowing NY Appellate Division to determ that an award is excessive or inadequate if it "materially deviates from what is reasonable compensation." The Second Circuit reasoned that the standard used to determine the verdict was not sufficient, and ordered a new trial unless P accepted a lower amount. P appealed. b. Rule: In a fed Dist Ct sitting under diversity jurisd, the standard the judge uses to determ whether a jury's itemized

i.

3.

verdict is excessive is that of state law, and is only subject to appellate review for "abuse of discretion." 3. Reasoning: a. Under NY law, the Appellate Division can review a verdict for excessiveness under the "deviates materially" test, which requires more scrutiny then the "shocks the conscience" test employed as the fed standard. The law is both substantive and procedural: substantive in providing the "deviates materially" test and procedural in granting the review to the NY Appellate Division. b. To avoid disrupting NY's substantive law, the trial judge must use the "deviates materially" test. The Appellate Ct can only determine whether the trial judge abused her discretion if the verdict is appealed for excessiveness. 4. Extra a. Outcome determination here pushes us towards state law. But Ct of App cannot review jury verdict under 7th Amend so must be remanded back to Dist Ct to apply state law standard. Framing and Deciding Claims 1. Pleadings Rule 8 a. In past writs were very rigid, many rules. Now only have one form of action, a civil action, Rule 2. b. Pleadings = Rule 8 Where each litigant first gets to tell his side of the story as a formal part of the litigation process a. P files complaint setting forth P's allegations. Complaint officially starts suit b. D files pre-answer motion c. P sometimes files a reply to D's answer c. Contentions lay out boundary for litigation and allow Ct to decide whether to allow claim to go through or not at outset. d. Valid Complaint = Rule 8(a) - applies to all claims, counterclaims, crossclaims etc a. Rule 8(a)(1) a statement of the basis of jurisd (SMJ only) b. Rule 8(a)(2) Short and plain statement of the claim 1. Notice pleading = reinforces concept that primary function of pleading (complaint) is to give notice of the claim a. Official forms example of reqd length, but also want to tell a compelling complaint c. Rule 8(a)(3) Demand for judgment (Exact amount of $ not gen reqd) e. Conley v. Gibson

f.

Facts: Ps asserted employment discrim claims, but their complaint did not specifically spell out what was discrim about the D's acts. b. Holding: Pleading survives a Rule 12(b)(6) motion to dismiss unless can show no facts. 1. Here: Petitioners complaint satisfied Rule 8. Their complaint contained a short and plain statement of the claim. The complaint sufficiently stated circumstances in which there was a harm done and wherein there was a judicial remedy. Petitioners did not have to list a set of detailed facts supporting their complaint. c. Reasoning: 1. FRCP did not req claimant to set out in detail the facts upon which the P basis his claim d. Extra: 1. At the time it was very obvious this was race discrim, so wanted to allow case to go to discovery thus easy standard. 2. SCOTUS had a permissible attitude - let P get claim in and after discovery decide whether it is a good claim or not. The Plausability Reqt a. Notice pleading standard simple enough until Bell Atlantic v. Twombly and Ahscroft v. Iqbal = Twiqbal due to an attitude of caution bc discovery expensive/ burdensome b. Bell Atlantic v. Twombly - anti-trust case w/ lots of discovery OVERRULES Conley v. Gibson 1. What is plausibility? Enough facts to state a claim for relief that is plausible on its face and NOT conclusory. 2. Facts: Two consumers filed antitrust class action against Verizon, Quest and other telephone Co's alleging that the Co's agreed not to compete in each others territorial areas for local telephone and internet service in violation of Fed antitrust statute. Under antitrust LEG, Ds liable only if ACTUALY agreed not to compete; even if did it, not bad unless agree. a. Complaint alleged numerous ways in which Ds engaged in parallel biz conduct, and in light of parallel conduct, complaint alleged Ds agreed not to compete against each other. b. "All these things happened, all these things happened based on discrim" = NOT enough 3. Holding: Complaint failed to meet pleading standard of Rule 8(a)(2) bc it must include some contextual facts that make the claim plausible. Dist Ct should dismiss complaint for failure to state a claim 4. Reasoning:

a.

c.

a. Strange overruling - Conly made sense then, but not anymore. World has changed. Too much discovery which is constly and burdensome on meritless cases. i. Ct sees it as Civ rights cases later on are not worth it bc racism is gone so no longer as plausible or most likely race is the reason that form the claim and not another alternative b. Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true. c. At SJ stage, an antitrust P's offer of conspiracy evidence must tend to rule out the poss that the Ds were acting independently. i. Something beyond mere poss of impropriety must be alleged so that Ps w/ groundless claims cannot be allowed to take up the time of other people during the discovery phase. ii. Antitrust discovery is very expensive; the threat of this expense will push cost-conscious Ds to settle even weak cases. d. "We do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the Ps have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." 5. Dissent: Simplified notice pleading standard of the FRCP relies on liberal discovery rules and SJ motions to define disputed facts and issues and to dispose of unmeritorious claims. The fact that the Sherman Act authorizes the recovery of 3x damages and attorney's fees for successful plaintiffs indicates that Congress intended to encourage private enforcement of the law. Ashcroft v. Iqbal - Civ rights antidiscrim case, over ruled Conely v. Gibson = lots of discovery 1. Facts: Pakistani Muslim who contended that the Fed Govt officials discriminated against hi on account of his race, religion, natural origin in violation of his constl rights when they harshly detained him in the wake of Sept 11 attacks. P brought action against numerous Ds including attorney gen Ashcroft and FBI director Mueller. To establish liab against each D, had to show Ds acted w. discrim purpose in making these policies bc not unconstl to detain potential terrorist 2. Rule: To survive motion to dismiss, complaint must contain sufficient factual matter, accepted as tru, to state a claim to

relief that is plausible on its face. Cannot just state conclusions 3. Holding: Complaint failed to meet the Rule 8 pleading standard bc allegations of purposeful discrim was conclusory 4. Reasoning: 5. Extra a. What would have passed the standard? i. Allegation that Ashcroft said something discrim at some point ii. Allege facts that attack an alternate explanation 2. Rule 11 Signing Pleadings, Motions, and Other Papers; Representations to the Court; Sanctions a. When you sign a pleading, motion or other paper or when you file it or present it to the Ct, you are certifying that it is not frivolous. Otherwise can be punished by imposing sanctions b. Rule 11(b) = the heart - the lawyer or party certifies that to the best of the person's know;edge, information and belief, formed an inquiry reasonable under the circs => reasonable inquiry 3. Summary of Rule 11(b) - Inquiry Reasonable under the Circs a. (1) No improper purpose b. (2) Claims and defenses have nonfrivolous legal basis c. (3) Factual allegations have reasonable factual basis d. (4) Denials have reasonable factual basis 4. Rule 11(c) empowers CT to impose sanctions on attorneys, law firms, parties that bear responsibility for the violation - Not word Shall turned to MAY a. Rule 11(c) (2) = 2 safe harbor provision for 21 days 1. Judges could potentially bring sanctions even if other party doesn't move for it (NO $ sanctions) 2. Procedure a. Serve motion to opposing party b. Wait 21 days c. If challenged paper not w/drawn and corrected file motion w/ Ct b. What is reasonable inquiry? 1. Hadges v. Yonkers Racing Corp a. Facts: H was a harness racehorse driver and lost license. Once license reinstated, YRC still banned him. H claims violation of DPC if YRC relied on NY state ban (= in cahoots against him). H brings 1 Fed and 1 state case. Fed case does not succeed since no state action bc he was allowed to race at Meadowlands. H then sues Meadowlands bc banned there. H files a Rule 60(b) motion = relief from judgment order to vacate orign decision against him. H stated he had not

2.

worked at all in Meadowlands for past few years. YRC replies that Rule 60(b) motion should be moved for dismissal and that Ct should sanction H and possibly his lawyer bc H had worked 12 races and had not disclosed existence or state proceeding he had lost. b. Rule: Under Rule 11, sanctions cannot be imposed on a party before the 20 day "safe harbor" period expires bc the point of the period is to give the accused party time to correct the mistakes. In addition, sanctions should only be imposed on a party's attorney for failure to investigate his/her client's statements if the attorney did not conduct a reasonable inquiry under the circumstances as to whether the statements have evidentiary support. If the record shows evidence supporting the client's assertions, sanctions should not be imposed on the attorney c. Reasoning: i. H and his lawyer not given 21 days safe harbor period. - seemed like the Ct below had personal animus against him ii. New rule says that reasonable inquiry = attorney entitled to rely on the objectively reasonable representations of the client. Don't have to clarify representations as being well grounded in fact. 1. Should make an attempt to verify the truth of P's contentions before submitting them to the Ct iii. Objectionably reasonable = accept client's statements unless reason to doubt Christian v. Mattel Inc a. Facts: C sued M for copyright infringement of her 1996 "USC" cheerleader doll alleging Cool Blue doll from Mattel is a copy. M moves for SJ bc M's doll has a 1991 copyright on its head. C's attorney given opp to w/draw claim, but at meeting hurls dolls across the room refusing to see them. Dst Ct granted Rule 11 sanctions to get back waster lawyer fees bc lawyer should just have looked at back of heads. Problem that Dist Ct also focused on non-sanction-able actions in granting the sanctions (e.g.: yelling at client, missed oral arg, misstated the law) b. Holding: C's lawyer not deserving of sanctions bc Rule 11 only applies to pleading, written motion, or other paper submitted to the Ct, NOT actions during SJ meetings etc. c. Extra

4.

Other ways to sanction 28 USC 1927 - Counsel liable for excessive costs for conduct the leads to such (unreasonably /vexatious-ly) 3. ADA Hypo: a. Albert files complaint against employer Oil Co under the ADA which prohibits discrim on basis of disability. In complaint, Alberts attorney alleges employer terminated him bc of disab. ADA reqs P to file charge w/ Equal Employment opportunity Commission (EEOC), bfr filing claim in Ct. A brief review of case aw would have revealed this reqt. Albert did not file a charge w/ the EEOC before filing complaint. Therefore, upon Ds motion, Dist Ct dismissed Alberts claim w/o prejudice for failure to exhaust administrative remedies under statute. Counsel for D employer Oil Company then files a motion for Rule 11 sanctions against Alberts attorney. Should the district court impose sanctions? b. Yes bc Rule 11(b)(2) violation bc law reqs one to file claim w/ EEQC, but lawyer here didn't c. Why used after already won? - send message to deter future frivolous claims Civil Litigation in the US 1. Incentives to Litigate 1. Whether litigation is too easy or should be easier? a. Look at 1. Remedies 2. Access to justice 2. Civ Litigation correlates w/ people and economic activity 3. Diff btw types of cases a. Tort - jury 51%/49% of D's win w/ P getting nothing b. K - bench trial, but usually out of Ct - dominated by Ps winning at 62% 4. Most action happens pretrial or settlement - maybe even end in abandonment 5. Why litigate? -> to unlock remedies to cure a legal harm a. Specific v. substitutionary remedies 1. Substitutionary a. Most remedies in US legal system b. Compensatory damages - economical damages c. Measuring non economic damages = challenge. Rule of thumb = 3xs the amount of economic damages for pain and suffering d. Liquidated damages , statutory and punitive damages i. Punitives rare - 6% of cases and median of $50,000

i.

1. Ct insists that award be proportional to harm inflicted focusing on 1. Degree of responsibility of D's misconduct 2. Disparity btw actual or potential harm suffered by P and punitive damages award 2. single digits more effective for deterrence 3. BMW v. Gore Standard - consider 1. Harm caused was physical as opposed to economic 2. Tortious conduct evidenced an indiff or reckl disregard of health and safety of others 3. Target of the conduct had financial vulnerability 4. Conduct involved repeated actions or was isolated incident 5. Harm was the result of intentional malice, trickery, deceit, or mere accident 4. State Farm Mutual Automobile Insurance Co. v. Campbell - see below 6. Hypothetical thoughts a. What would be the incentive to litigate in . 1. Society that pays for your medical care or has a system of compensation when injured 2. Germany non-eco damages = 3,77 euros v. US 214,855 Euros. - maybe due to fact that US econ damages are also higher and US jury decisions v. German calculated amount bfr trial Unique to US a. Punitives v. crim penalties b. Injunction - better off if had substitutionay damages in Brown v. Board of Education rather than injunction State Farm Mutual Automobile Insurance Co. v. Campbell = Q of Punitives a. Facts: Campbells drive on other side of road causing accident. Ospetal dies and Slusher is perm disabled. C's insurance Co State Farm assures Cs not liab and not to settle for $50,000 - the limit on their insurance. Cs go to Ct, Cs lose and jury awards $185,000 in comp damages. State Farm then says Cs should sell their house bc they won't pay. Cs can't appeal bc State Farm won't pay legal fees anymore. Ospetal estate and Slusher ask Cs to join them against State Farm. State Farm pays all of the $185,000 anyway

7.

8.

and then Cs still sue. Cs get $145 Million in punitives + $1 Million in comp damages. 1. What did State Farm do wrong. a. Nationwide policies are harmful - changed Cs culpability documentary evidence to make Cs look innocent. b. Going to trial instead of settling. - maybe to send message to others that they will risk getting a lower award 2. In past punitives challenged by 8th Amend. = cruel and unusual punishment. 3. Due Process a. procedural = what procedures must be in place to take away b. Substantive = can't take away even if have a good procedure c. Punitive damages as due process violation = BMW v. Gore guidepost 4. Punitives create incentives for lawyer to look for violations. 2. The cost to litigate 1. Private costs paid by litigants while public costs paid by taxes Leads to arg that filing fees should be higher since cost and burden should fall on litigant 2. Lawyer contingency fees a. unethical in other areas b. Conflict of int c. Leads to Baseless litigation - no legal claim by try to settle d. Preference for larger cases bc $ 3. Hourly fees a. cost to litigant 4. Limitations on attorney fees = have to be reasonable a. English Rule- losing party pays winner's costs 1. Better bc Ps get all at stake and winning Ds lose nothing 2. Con is that it can prolong cost and litigation b. American Rule - each pay own costs w/ exceptions but not attorney's fees 1. Discourages small claims v. high costs 2. Exceptions = can K around it 3. Based on 2 categories a. Tradition against bad faith cases b. Modern fee shifting in favor of private attorney i. Fee shifting affects the way you decide to litigate or not ii. Evans v. Jeff 1. One way - fee shifting awards Ps but not Ds

5.

2. Contingent fees may not be ideal for civ rights cases bc what if only recover an injunction or non-comp damages? Lawyer will want an hourly wage. 3. Facts: Class action suit based on Rule 23(e) Ct has to approve settlement. Ps did not request any damages only injunction + attorneys' fees/costs. Ps represented by non profit Legal Aid. Settlement proposal gave injunction if waived fees. Legal Aid wanted to reject proposal but Ps lawyer accepted bc had an ethical obligation to do the best for his clients. Later lawyer requested right to get fees alleging Ds had exploited his ethical obligation to his clients. Dist Ct denied ethical arg 4. Rule: In class action suits, a prevailing party is free to waive his right to attorneys fees, so long as the waiver is negotiated for and is approved by the Dist judge as part of an overall settlement plan 5. Holding: No the ct did NOT have a duty to reject the proposed settlement bc it included a waiver of statutorily authorized attorney's fees 6. Reasoning: Not an ethical dilemma 7. Dissent: diminish lawyer incentive to take on civ rights cases Joinder (Rules 13, 14, 15, 18, 19, 20, 21) 1. Joinder in general 1. Joinder rules = how to join more than one claim or party 2. Permissive Joinder claims - P may assert multiple claims against a D in one complaint

1.

2.

Rule 18(a) - "a party asserting a claim, counterclaim cross claim or 3rd party claim may join, as indep or alternate claims, as many claims as it has against an opposing party 1. Does NOT say arising out of the same transaction or occurrence 2. Unlimited Bill and Tedd Hypos 1. Bill, a citizen of CA, and Ted, a citizen of NJ, get into car accident resulting in Bill breaking both legs and requiring very complicated reconstructive surgery. Bill wants to sue

3.

Ted for compensatory damages for his medical bills, which amount to $15,000, and pain and suffering, $65,000. Can he join these two claims? 1. Ok to aggregate $15,000 + $65,000 damage claim Same facts as Hypo 1, plus Bill also happens to be Teds landlord, and Ted owes him $76,000 in unpaid rent. Can Bill join the unpaid rent claim? 1. Ok to add $76,000 claim by Landlord for upaid rent 2. Same as 1 and 2 except only $10,000 claim for unpaid rent 3. Same facts as Hypo 2, except that the unpaid rent amounts only amounts to $10,000. Can Bill join the unpaid rent claim? 1. Rule 18 says nothing about joining this rent claim but the unrelated claim could not get into Fed Ct bc it lacks amount-in-controversy 2. Is there supp jurisd over this claim? --> Common nucleus of operative fact (CNOF) test is missing 3. Prob: 1367 SMJ says that if Fed Ct HAS jurisd over an action, then Ct has supplemental jurisd over ALL other claims so related w/in orign jurisd. BUT hypo 1 canbe characterized as 2 diff claims and neither one could indiv get through Fed Q Jurisd. Thus some Cts allow Hypo 1 and other do not Paulette Hypos 1. Paulette, ctzn of MO, was employed by Bob, a ctzn of KS. Bob fired Paulette after she refused his sexual advances. Paulette decides to sue Bob for sexual harassment under Title VII of the fed Civil Rights Act, and for intentional infliction of emotional distress. Her compensatory and punitive damages for sexual harassment do not exceed $30,000. Her emotional distress damages amount to $20,000. Can Paulette bring these claims together in one lawsuit in federal court? 1. Together only get to $50,000 but the Title 7 is a Fed Q. Thus can join under CNOF test of 1367 2. A year before Bob made sexual advances on Paulette, he negligently crashed his car into hers on the freeway. Her car damage amounts to $26,000. Can Paulette add this claim to the lawsuit described in Hypo 4 in federal court? 1. NO bc no CNOF 3. Sandy, a citizen of Iowa, is injured by a steel crane owned by Power Supply, a citizen of Nebraska. Sandys injuries exceed $75,000. Sandy sues Power Supply in federal court. Power Supply would like to bring a third-party claim against Crane Company, a citizen of Iowa, claiming that Crane Company is liable to Power Supply for all of the plaintiffs

3.

claims against Power Supply. Can Power Supply bring the third-party claim? 1. Sandy (IA) -------> Power Supply (NE) -----> Crane Co (IA) = Rule 14 says ok Impleader bc CNOF exists. 4. Problem: Same facts as Hypo 6. Suppose Power Supply is permitted to implead Crane Company. Now, Sandy would like to assert her own claims against Crane Company. Reminder: Sandy and Crane Company are both citizens of Iowa. Can Sandy assert her own claims against Crane Company? 1. NO bc violation of 1367(b) bc no complete diversity (Strawbridge v. Curtis) 2. Cannot have Sandy (IA) v. CC (IA) in Fed Ct. 3. Don't want to allow going around diversity and FQJ4:02 PM 5. Bill and Bob in accident. Paulette driving. Bill and Bob have injuries amounting to $40,000 each. Can they bring the action in Fed Ct? 1. No bc neither could get into Fed Ct on their own, despite Rule 20 allowing joinder. Counteclaims - permissive counterclaims Rule 13(b) and compulsory counterclaims Rule 13(a)

13 (a) or 13(b) a. Permissive Counterclaims Rule 13(b) 1. Expressly permits a pleading "to state as a counterclaim against an opposing party any claim that is not compulsory." 2. P and D in litigation anyway so there is efficiency in letting them assert whatever claims they have against each other b. Compulsory Counterclaims Rule 13(a) 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: (A) arises out of the transaction or occurrence that is the subject matter of the opposing party's claim.; and (B) does not req adding another party over who, the Ct cannot acquire jurisd. a. Word "MUST" makes this compulsory. b. If arises out of SAME transaction or occurrence, then defending party MUST assert it as a counterclaim. c. If don't make it then claim preclusion applies 2. Exception Rule 13(a)(2)(A) - "the pleader need not state the claim if: when the action was commenced, the claim was the subject of another pending action"

d.

Unlikely to come up except when first case was filed in state Ct system that does not have compulsory counterclaims Crossclaims Rule 13(g) 1. Rule 13(g) permits crossclaims as long as they are transactionally related to the claims already asserted in the action. "A pleading may state as a crossclaim any claim by one party against a coparty if the claim arises out of the transaction or occurrence that is the subject of the orig action or of a counterclaim or if the claim relates to any property that is the subject matter of the orig action" 2. permissive bc adds extra complexity to adversary system. May not want to do it bc looks weaker if lose party solidarity by making an additional adversary 3. Contribution or indemnification - one D asserts that if it is held liable to the P, then the other D should have to pay the damages. a. Prod liab case. P sues both retailer and manufctr. Retailer may assert a crossclaim against the manufctr for indemnification.

a.

b.

Permissive Party Joinder 1. Rule 20(a)(1) : "Persons may join in one action as Ps if.(A) same transaction, occurrence, or series AND (B) common Q of Law or fact = (TEST)

b.

Logical Relationship Test to determine if same transaction of occurrence - focus on what the issue is to relate or distinguish the parties b. No limit on how many people can join Rule 20(a)(2) - same two part test (A) and (B) as Rule 20(a)(1)

a.

C.

Compulsory Party Joinder 1. Who MUST be joined in an action and empowers the Ct to order joinder of such a reqd party. Case can also be dismissed if such a party is NOT joined. 2. Two step process for analyzing compulsory party joinder.

Whether the person must be joined = whether absent persons a reqd party or nec party under Rule 19(a). ---> If yes, then MUST be joined b. If can't be joined bc Ct's jurisdictional limits, then ask whether the person is critical to the lawsuit that, in the persons' absence, the lawsuit should be dismissed. = whether person is indispensible under Rule 19(b). 3. Reqd Parties Rule 19(a) a. = persons reqd to be joined if feasible. Three circs under which person will be deemed a reqd party 1. Rule 19(a)(1)(A) "complete relief among those already parties" => reqs joinder id in that person's absence, the court cannot accord complete relief among existing parties 2. Rule 19(a)(1)(B)(i) " Impair non-party's interest" => reqs joinder if that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may: as a practical matter impair or impede the person's ability to protect the interest" 3. Rule 19(a)(1)(B)(ii) ""inconsistent obligations" => reqs joinder if that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may ...leave an existing party subject to substantial risk of incurring, double, multiple, or otherwise inconsistent obligations bc of the interest." 4. If No to all Qs then not reqd. If Yes then join or go to Indispensible Q. 4. Indispensible Parties Rule 19(b) a. If reqd party cannot be joined due to lack of SMJ or PJ pursuant to Rule 4(k)(1)(B) b. Ct must det whether, in equity or good conscience, the action should proceed among the existing parties or should be dismissed. c. 4 factors to consider 1. To what extent might a judgment be prejudicial to the parties or to the absent person? 2. To what extent can relief be shaped to avoid prejudice? (eg: grant $ damages not injunction) 3. Would a judgment rendered in the person's absence be adequate? 4. Would the P have an adequate remedy if the action is dismissed? (eg: Can P bring it in another forum?) d. Provident Tradesmen Bank & Trust Co v. Patterson 1. Facts: Car accident: issue of whether Cionci covered by insurance a. Claim 1: Provident Tradesmen (Lynch) v. Cionci Estate - Fed Ct Diversity = > Provident Wins $50,000 but Cionci penniless

a.

2.

C.

D.

E.

F.

Claim 2: Smith Estate v. Cionci Estate, Dutcher, and Lynch Estate - State Ct = unresolved c. Claim 3: Harris v. Cionci Estate, Dutcher, Lynch State Ct = > unresolved d. New proceeding for Provident to get $. Present diversity action. Declaratory Judgment: Cionci had permission and thus covered by insurance policy Provident (Lynch) v. Cionci Estate Harris, Smith Lumbers Mutual => Provident proved Cionci had Dutcher's permission to drive so Lumbers has to pay - jury verdict A. Problem: Joinder analysis as to whether Dutcher is required, indespensible or neither. Rule: The interests articulated in Rule 19(b) must be evaluated by the Ct prior to disposition of the case in order to determ whether a case should be dismissed for failure to join an indispensable party. The decision rendered should always be consistent w/ "equity and good conscience." Holding: Under Rule 19(a)(1)(B)(i) Dutcher has to be joined. 1. The Ct should not have dismissed the action if joinder of Dutcher was not feasible. 2. The parties' failure to raise an issue regarding joinder of Dutcher prevented the App Ctt from addressing the issue on appeal bc by rendering some of the issues, such as efficiency of ordering joinder, the issue is obsolete. 3. A judgment binding on the parties but not on Dutcher affected the evaluation of whether the Ct should have been required to join Dutcher because it gives Ps' interest in the forum greater consideration rather than if the evaluation were just whether Ps had an interest in choosing btw the state and fed Cts. Reasoning: 1. Options: 1) proceed w/o Dutcher or 2) dismiss 2. How can you show Dutcher not prejudiced? a. Dutcher can relitigate issue of his giving permission. Not prejudicail so state jury will figure it out all over again. Dutcher is not a perty to Fed Ct so no preclusion against him. Extra: 1. Prob: Cianic dead = dead man rule: if you have an interestr to a deceased or insane person, not good

b.

F.

unless also a party to the case. - is it procedural or substantive? 2. Dutcher was not added intentionally so they could get to Fed Ct. D. Impleader - Third-Party Claims Rule 14 1. "If I am liable- this other person should pay for it" : --------> ---Rule 14---> Third Party D 2. Cts reject 3rd party claims if they do not involve some sort of secondary or derivative liab. 3. Jeub v. B/G Foods Inc - contaminated ham case a. Facts: Jeub, one of several Ps, sued D B/G Foods, Inc. in fed Ct MN for injuries sustained from eating allegedly contaminated ham at D's restaurant. D filed 3rd party complaint against Swift and Co ("Swift") claiming D bought the ham from Swift. Ct issued an ex parte order naming Swift as a third party D. D asserted it was free from liab, and if ham was contaminated, then due entirely to Swift's neg. 1. D also sought indemnity from Swift of any recovery made by Ps from D. Swift moved to vacate order listing it as a 3rd party D bc Ps had refused to amend complaint to name Swift as a D. Swift argued that D has no right of contribution or indemnity against Swift under MN law. Swift further argued that in order to have a right of contribution or indemnity, a party must actually pay out more than its share or suffer some loss, which D has not done in the case at issue. b. Rule: A D may implead a 3rd party that may be liable in a lawsuit under Rule 14 even though the D may not be able to bring an indep action against the 3rd party at the time 3rd party is impleaded. Policy behind Rule 14 is to have the rights of all parties resolved in one proceeding. If the trial Ct has means to prevent any prejudice ensued from impleading a 3rd party, then impleader is permitted. c. Reasoning: 1. MN law governs substantive rights of parties to the action. Law requiring a party to sustain a loss before bringing an action for indemnity does not conflict w/ Rule 14. Rule 14 only speeds up time in which party can assert substantive right under MN law. Class Actions (part of Joinder) 1. Class actions = representative litigation (class) ---------> for efficiency, consistency and empowerment 2. SMJ of Class Actions - One indiv must meet amount-in-controversy reqt, otherwise Ct may exercise suppl jurisd over those claims a. Exxon Mobile v. Allapath Services Inc. 1. Facts: In 1991 about 10,000 Exxon dealers sued Exxon Corp in Fed Ct, alleging the corp had engaged in an extensive scheme to

b.

overcharge them for fuel. Jury found for Ps, but the Dist Ct judge certified the case for review on the Q of Suppl Jurisd. a. Some of the multiple Ps in the case had claims that did not meet the minimum amount necessary to qualify for fed diversity jurisd. b. In 1990 Congress had enacted 28 U.S.C. 1367. The Dist Ct accepted the Ps' arg that 1367 gave Fed Cts power to exercise suppl jurid over Ps w/ related claims, even if some Ps' claims did not meet the required amount. 3. On appeal, 11th Circ Ct of App upheld Dist Ct's ruling on suppl jurisd. However, this ruling conflicted w/ ruling of another Circt which had taken the opposite view of 1367's scope 2. Rule: As long one P meets the amount-in-controversy reqt for fed Jurisd, 1367 authorizes fed Cts to exercise suppl jurisd over related claims even if they do not meet the requirement. c. Holding: In a 5-4 decision, Ct held that courts only need to determ whether they have orig jurisd over one of the claims in a case. If YES, then Cts can then decide to extend suppl jurisd to other related claims. d. Reasoning: 1. to require each claim in a civ action to meet the reqt would be "inconsistent w/ the whole notion of suppl jurisd." 2. based ruling on the "unambiguous[]" text of the statute, saying "the authoritative statement is the statutory text, not the legislative history or any other extrinsic material." Shady Grove v. Allstate (2010) a. Facts: Shady Grove, on behalf of a class of Ps, sued Allstate Insurance in part for Allstate's alleged failure to pay int penalties on overdue insurance payments as prescribed by NY statute. Allstate moved to dismiss relying on NY's rules of civ pro which instruct that class action lawsuits are inappropriate unless specifically prescribed by statute. 1. The U.S. Dist Ct agreed and dismissed claim. 2. On appeal, Shady Grove argued that the NY rules conflict w/ Rule 23 and thus were not applicable. 3. U.S. Ct of App for 2nd Cirt disagreed w/ Shady Grove and affirmed the district court. Using Erie said that Rule 23 and NY rules did not conflict so State rule Rules b. Rule: 901(b) of the NY rules of civ pro does not preclude a fed Ct sitting in diversity from entertaining a class action under Rule 23 of the fed rules of civ pro. c. Holding: A state LEG CANNOT prohibit fed Cts from using a fed class action rule for a state law claim. A state LEG CANNOT dictate civ pro in fed Cts. 901(b) of the New York rules of civil procedure does not preclude a federal court sitting in diversity

C. D.

E.

from entertaining a class action under Rule 23 of the federal rules of civil procedure. d. Reasoning: 1. Rule 23 answers the question in dispute whether Shady Grove's suit may proceed as a class action and is therefore controlling. 2. Rules Enabling Act, NOT Erie controls the validity of a fed rule of civ pro, even if that results in opening the fed Cts to class actions that cannot proceed in state Ct. sensitivity to state regulatory policies. E. Extra: 1. Problem here is that get a diff result whether use Rule 23 or 901(b) so it seems that State law should win. 2. Scholars believe that after this case, Erie is dead when it comes to Class Action Fairness Act (CAFA) Class action must be Certified by meeting reqts of Rule 23(a) and Rule 23(b) Rule 23(a) Prerequisites 1. Rule 23(a)(1) Numerosity a. So large that joinder impracticable. 2. Rule 23(a)(2) Commonality a. at least common Q of law or fact - case-by-case determination 3. Rule 23(a)(3) Typically a. Reps situation must be like that of the rest of the class. 4. Rule 23(a)(4) Adequate representation a. Most fundamental reqt b. Whether the class reps have any conflicts of interest that prevent them from being adequate resps Rule 23 Categories 1. Rule 23(b)(1) Prejudice Class Actions a. no opt out + flexible notice b. Rule 23(b)(1)(A) a. Class certification if indiv adjudications would create a risk of incompatible standards of conduct for the D. c. Rule 23(b)(1)(B) a. Class certification of if indiv adjudications might impair the ability of other class members to protect their own interests b. Eg: limited fund 2. Rule 23(b)(2) - Injunctive or Declaratory relief a. No opt out + flexible notice b. Problem as to whether can also get monetary damages - current SCOTUS Wal-Mart case 3. Rule 23(b)(3) - Money Damages - most commonly what comes in mail a. Stringent notice reqt + opt-outs b. Common questions predominate and Ct finds that class action is superior way to adjudicate.

Two extra reqts a. Predominance - Q of law or fac common to class members predominate over any Qs involving indiv members b. Superiority - class action must be superior to other methods of adjudication 4. Hooters Hypo a. Rule 20 Permissive Joinder of Parties b. Even if aggregated under Rule 20, relief can be individualized. + Possibility of separate trials under Rule 20(b) + Rule 42(a) consolidation, (b) separate trials c. Hypo looks like a series of actions but may not need separate trials. Can it be brought as a class action suit? a. Start with 1. Rule 23(a) Class Action Reqts. i. Class so numerous? Is 50 people big enough? ii. Question of the law in common? Yes bc all parties being affected by something Hooters did to block their drive ways. iii. Claims and defenses of representative parties are typical of the claims of the class? This is typically a prob. Dont want the guy w/ the hemorrhage to represent everyone bc he is a unique case. (Lawyer ax ante needs to be picky about who will be lead P) iv. Rep parties will fairly and adequately protect the interests of the class? Conflict of interests (injunction v. damages). 2. Did you bring the case under Supp Jur 28 U.S.C. 1367(b)? i. Yes can bring it under class action and joinder Rule 20. 1367(a) not applicable. (b) maybe applies but only under Rule 19 and 24 ii. If no prob about Supp Jur then no worries about CAFA. 3. What if you have an intervener who is a tenant in the neighborhood? Not a member of the class but wants to intervene. Comes in as an intervener under Rule 24 and claims damages only up to $500. i. See 1367(b) - No Supp Jur over interveners under Rule 24 bc they (1) Yes diversity but (2) no amount in controversy. 4. When looking for Jurisdiction look to i. 1331 Fed Q ii. 1332(a)(1) diversity and (2) amount in controversy $75,000. OR 1332(d) CAFA Only look to one.

c.

E.

F.

Castano v. American Tabacco Co 1. Facts: Extremely large class action - anyone addicted to nicotine in US. Prob that legal theory is an immature tort not previously pleaded successfully in Ct. Too much pressure on D to settle or potentially go bankrupt = judicial blackmail. 2. Rule: The Dist Ct is reqd to consider variations in state law, whether common issues of law and fact predominate over individual issues and the nature and novelty of the claim prior to certifying a class 3. Holding: Under Rule 23(b)(3) this class action fails bc Dist Ct did not a. Consider variation in state law when a class action involves multiple jurisd b. Failed to det whether class action would be manageable in light of state variations and c. Failed to consider how the Ps' addiction claims would be tried, indiv or on a class basis by going past the pleadings to understand the claims, defenses, relevant facts, and applicable substntv law (Predominance and superiority reqts) 4. Reasoning: a. Rule 23(b)(3) elements Question of law common to the class a. b. Members predominate c. A class action is superior Here do not meet Element 1 bc so many variations of state b. law. Q of law may actually vary. Due Process Considerations 1. Hansberry v. Lee a. Facts: Land Covenant stated that if 95% of the owners signed a racially restrictive covenant, then applies to ALL owners. Dispute as to whether got 95% and whether covenant runs w/ the land. a. Lawsuit 1: White Landowners sue neighbor D to enforce racially restrictive covenant - P wins b. Lawsuit 2: Lee = P. Hansbury = D. Black landowner bought land w/ covenant and told he shouldn't be there. H argues that only 54% of landowners had signed so agreement not binding. Lee says lawsuit #1 is binding so can't relitigate validity of covenant res judicata. H argues that he was not a party and so not bound by Ct's previous decision. b. Rule: A case cannot be considered a "class action" if a class member's failure to enforce a right would create a conflict of interest with another class member's enforcement. a. Also: A party is not bound by res judicata from a previous class action if the party was not adequately represented at the prior proceeding.

G.

Holding: Ct holds for Hansberry bc was not a previous party. Reasoning: a. Interests of parties in lawsuit 1 so diff from interests of parties in lawsuit 2 b. Pennoyer relevant bc litigation was in personam so H had to be given notice to be bound e. Extra a. Who is bound here? 1. People that signed covenant 2. People who bought prop since runs w/ land 3. People who want it b. Who is NOT bound? 1. People who did not sign it bc had diff int 2. People who don't want it 2. Adequate Representation Test - Gonzalez v. Cassidy a. Did the trial Ct in first suit correctly detm initially that the rep would adequately represent the class? AND b. Does it appear, after the termination of the suit, that the class rep adequately protected the int of the class? Class Action Settlements Rule 23(e) 1. Req Ct approval 2. Class members must get reasonable notice of the proposed settlement and they may voice objections 3. Settlement is binding on all class members 4. Amchem Products v. Windsor - Rule 23(b)(3) opt out settlement class action a. Facts: Dist Ct certified a class of those who were or might be affected by asbestos manufactured by Ds. Certification was for settlement purposes only. Objectors to the settlement appealed, arguing that absent class members were not adequately notified of the settlement nor were their interests adequately represented. b. Rule: Dist Ct must determ whether all class members' interests are adequately represented when determining the fairness of a class action settlement. Common Qs of law and fact must still predominate in the context of a settlement, especially if the settlement disposes of claims prior to the realization of an injury. c. Holding: proposed class action failed to meet the Reqts of Rule 23 d. Reasoning: A class action settlement must be evaluated in the context of not just present claims but future claims. The Court's opinion demonstrates that when there is a potential conflict among class members within the class, class certification for a settlement that disposes of absent class members' claims is not appropriate. 5. Ortiz v. Fireboard Corp - Rule 23(b)(1)(B) limited fund settlement class action a. Holding: Proposed class action failed to meet the Reqts of Rule 23.

c. d.

G.

"Applicants for contested certification [of a mandatory settlement class on a limited fund theory under Rule 23(b)(1)(B)] must show that the fund is limited by more than the agreement of the parties, and has been allocated to claimants belonging w/in the class by a process addressing any conflicting interests of class members." b. "The record on which the Dist Ct rested its certification of the class for the purpose of the global settlement did not support the essential premises of mandatory limited fund actions. 1. It failed to demonstrate that the fund was limited except by the agreement of the parties, and it showed exclusions from the class and allocations of assets at odds with the concept of limited fund treatment and the structural protections of Rule 23(a) explained in [Amchem Products, Inc. v. Windsor]," Discovery - process by which a party in a lawsuit forces other parties or witnesses to provide info relevant to the case (Goal is to avoid surprise at trial) 1. Discovery Tools a. Disclosures = Rule 26 b. Interrogatories = Rule 33 c. Depos d. Production of docs, electronically stored info and things, inspec of land = Rule 34 e. Physical / Mental exams = Rule 35 a. Requests for admission = Rule 36 2. Disclosures - Cheaper than asking back and forth for info a. Rule 26(a)(1) Reqd Disclosure - parties MUST disclose certain info to each other w/o being asked. a. (i) Name + contact info of every witness likely to have discoverable info that disclosing party may use to support its position b. (ii) a copy - description, by category and location of all docs and electronically stored info that disclosing party has and may use to support its claims or defenses c. (iii) computation of each category of damages along w. the material on which the computations are based d. (iv) any applicable liability insurance policies Rule 34 b. Rule 26(a)(B) Exceptions c. Rule 26(a)(C)(D)(E) Time periods a. Initial Disclosure w/in 14 days after the parties' Rule 26(f) conference d. Rule 26(a)(2) Expert testimony - provide info that will be disclosed in writing a. Rule 26(b)(4) - non-testifying expert testimony NON discoverable

a.

3.

4.

5.

6.

7.

8.

Rule 26(a)(3) Pretrial disclosures - list of witnesses expect to call, depos that will be presented and docs, exhibits, summaries of other evidence. Interrogatories - drafted by opposing party attorney a. Limited by Rule 33 to 25 Qs unless parties agree otherwise b. Limited to parties in case Depos - attorney Q of witnesses a. Limited to 10 depos per party b. Expensive 3. Most powerful pretrial tool for extracting info Production of Docs, electronically stored info - Rule 34 1. e-discovery 2. Parties and non parties (under subpoena Rule 45) Physical and Mental exams - Rule 35 1. Limited to when physical and mental condition in controversy. Ct order based on good cause. Must explain to judge why needed Reqst for Admission - Rule 36 1. Functionally like complaint 2. Apply only to case in which they are requested. May not be used agaisnt a party in another proceeding 3. No numerical limit on use of requests for admission but limited to parties Scope of Discovery Rule 26(b)(1) Standard = Relevant and not privileged 1. Relevance = having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be w/o the evidence a. Must have some bearing, however slight, on facts that have some legal consequence in the matter b. Need not be admissible at trial if the discovery appears to be reasonably calculated to lead to the discovery of admissible evidence (eg: hearsay evidence OK) c. Ct can order discovery of any relevant matter to get more tangential info 1. Relevant to "claim or defense" -> discoverable 2. Relevant to "subj matter" -> discoverable w/ Ct order 2. Privilege - some things more import that getting the truth a. Privilege against self-incrim on crim cases (5th Amend) b. Attorney/lawyer - client privilege 1. Upjohn Co v. US a. Facts: Lawyer for Upjohn Co took questionnaire from several employees. Later IRS wanted discovery of them bc helpful to cases. IRS does this through statute not Rule 12(a)(1) b. Rule: In the corporate context, attorney-client privilege extends to lower level employees, not just to those in control of the corporation. The work-product

e.

3.

doctrine protects oral statements made to attorneys, which necessitates a showing of undue hardship on the part of the party-opponent who seeks that information. c. Holding: Attorney-client privilege protects the communications involved in this case from compelled disclosures and that the work product doctrine does apply in tax summons enforcement proceedings d. Reasoning: 6th circ says too broad bc then can send lawyer to talk to everyone and then all covos w/ all employees would be confidential Work Product Doctrine Rule 26(b)(3) - protect the other side's work from discovery a. Hickerman v. Taylor 1947 1. Facts: Def attorney Samuel Fortenbaught had conducted interviews w/ surviving crew members after a tugboat sank. P made a discovery reqst seeking the witness statements SF obtained. If discovery based soley on relevance and privilege, they would have been discoverable. 2. Rule: Written and oral materials taken by a party's counsel in the course of preparation for litigation is not considered protected by the attorney-client privilege, but is considered the work product of the attorney. Absent necessity or justification, attorney work product is not discoverable. 3. Holding: Statements by opposing party not discoverable bc they are, the attorney's work product. The info is tainted by attorney's view and destroys adversarial system. 4. Reasoning: Ct believed parties on equal footing and this would tip the scales for Ds. b. Exceptions: 1. (i) unless discoverable under Rule 12(b)(2) or 2. (ii) undue hardship to other party bc can't obtain else way c. Protection only applies to 1. Docs and other tangible tings not underlying facts 2. materials prepared in anticipation of litigation or for trial 3. No only litigation materials prepared by attorney but also client and other non-lawyers d. Proportionality Rule 26(b)(2)(e)- burden of discovery shouldn't be disproportionate to its benefit. 1. Judges may limit frequency or extent of discovery by considering a. Burden of discovery b. Amount at stake in the lawsuit c. Importance of the discovery in resolving the issues e. Protective Orders Rule 26(c) 1. Marresse v. American Academy of Orthopedic Surgeons (1985)

2.

3.

Facts: Ps sued in state Ct alleging they were refused membership to D's org w/out a hearing. State Ct dismissed complaint finding that membership in the Academy was not an "economic necessity," and therefore no valid state law claim was made. Ps then sued in fed Ct stating violations of antitrust laws. During the course of discovery, Ps demanded production by D of correspondence and other docs relating to denials of membership from 1970-1980. The fed dist Ct ordered D to produce the docs pursuant to an order protecting their confidentiality. D refused to comply w/ order and was held in crim contempt and fined $10,000. D appealed. b. Rule: A motion made under Rule 26(c) to limit discovery requires the court to use discretion in balancing the nature of the hardships to the parties and the effect of its magnitude. This gives more weight to interests that have more social value than to purely private interests. In doing so, the court must consider the possibility of reconciling the competitive interests through a carefully crafted protective order c. Reasoning: i. There were other alternatives such as an in camera judge review of the files d. Dissent: Fed Dist Ct did not abuse its power/discretion w/ regard to protective order through reliance on state Ct in camera review of files. e. Extra i. P wants to see files to frame arg his way ii. Burden on Ds great bc P has intent to use file to depose all members that deliberated = costly to defend all of them now and in future Race discrim Hypo of Prof Sharp, African American denied tenure at XYZ University a. D harship = evaluators will not be candid w/o anonymity. Disclosures will reveal opinions about scholarship as well. Prof Sharpe's Q is not a good one. b. Judge Posner in Academy case defines discovery abuse as - discovery so costly and burdensome that settling becomes more cost effective. Wrong reason to settle. Settlement should reflect the merits c. Dissent believes Ds are engaging in a discovery abuse - killing the case by denying relevant info prior to trial. Not adversarial but in bad faith. Seattle Time Co v. Rhinehart (1984)

a.

4.

Facts: The Aquarian Foundation and P, its spiritual leader, brought an action for defamation and invasion of privacy against authors and publishers of critical articles in State Ct. The trial Ct ordered P to identify donors and the amnt each contributed and to produce list of founding members. Trial court also issued a protective order preventing D from publishing lists or from using it for purposes other than for prep or use at trial. P submitted affidavits showing that releasing such info would adversely affect org and members. Both sides appealed and WA Sup Ct affirmed the orders. b. Rule: The authorization of protective orders is sufficiently justified by a showing of good cause in order to ensure that discovery procedures are not abused. c. Holding: A protective order entered on a showing of good cause as required by WA Civil Rule 26(c) is limited to the context of pretrial civil discovery. It does not restrict the dissemination of the info if gained from other sources, thus does not offend the First Amend. Judgment of the WA State Sup Ct affirmed. d. Reasoning: i. P hardship = expose members and donors to possible investigation. Freedom of Religion to practice and support as will. ii. D Hardship = as a result of protective order restricts Freedom of Speech / Press. Cummings v. GM a. Facts: suit for manu defect. Mr and Mrs. C get in car accident. Wife in front seat w/ baby car seat in back. Wife suffered spinal injuries. Factual dispute about how far she was reclined. She claims 25% and GM claims 45%. She says not poss bc car seat facing backwards, but GM says facing forward. Cs lose. Later Cs find GM crash video showing that forward facing car seats lead to baby fatalities, but Cs' baby was fine so had to have been backward facing. Cs sue GM about whether GM was reqd under Rule 26(a)(1) to disclose tapes. b. Holding: No, under Rule 26(a)(1), GM was not reqd to turn in tapes that it did not plan to use as part of its defense. c. Reasoning: i. Tapes were not part of anyone's defense. GM arg that seat leaned back further and Cs countered

a.

H.

that it wasn't. Existence of tapes is not evidence that GM will use it to support its case. If it is going to help the other side, they have to ask for it. 5. GM Hypo: a. Same facts as Cummings v. GM. Suppose child safety seat acceleration tests were conducted and videotaped at instruction of GM's attorney. Attorney wanted to prepare test to check liab of lawsuit that might be brought against GM. b. Under Rule 12(a)(1) this would be discoverable and NOT priviliged. c. BUT under Rule 12(b)(3) work product doctrine protects work done in anticipation of litigation (Any litigation?) d. Problem: what about an exception for extreme undue hardship since cost of crash test high Summary Judgment Rule 56 1. Why have it? -> Reduce cost and avoid delay. Also avoid unec trials 2. Why not have it? -> may be costly in some cases. It undermines constl commitment to trial by jury and the better lawyer would win ($). 3. Rule 56(c) - judgment sought should be rendered if the pleadings, the discovery and disclosure of materials on file and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matte of law. 1. Moving party has the B of P to show that there is no genuine issue of material fact. Once done, shift burden to Burden to nonmoving party. 2. Standard: a. Celotex: D need only point out no movant's lack of evidence bc P bears burden of production b. Adickes: Movant has to NEGATE/Disapprove essential element of P's case. 3. Rule 56(c)(4) - what the affidavits must contain 4. Rule 56(d) - When facts are unavailable to nonmoving a. Defer considering the SJ motion b. Allow time to get affidavits or take discovery c. Issue any other appropriate order 4. Case Law 1. Adickes v. S.H. Kress & Co. (1970) a. Facts: Civil rights claim filed by white NYC school teacher. P and 6 negro (black? African American? Colored?) children tried to integrate a public library, but were refused entry. Library shut down by police. P and children went to Woolworth and followed by police. Police and waitress spoke. Then waitress refused to serve P. Students refused to eat unless P also served. Police arrested P after she left for vagrancy. P raised 2 counts. 1) denial

2.

of rest service violated her civ rights and 2) refusal to serve and arrest = conspiracy btw D and town. Kress moved for SJ by supplying affidavits from store manager, chief of police and arresting officer denying conspiracy. Dist Ct denied SJ for 1st count but granted for 2nd. b. Rule: In an action based on conspiracy, summary judgment may not be granted unless the nonmoving party can show that there is no genuine issue of fact. c. Holding: SCOTUS reversed bc movant had not met procedural burden of showing there was no disputed material facts bc Kress failed to foreclose the poss that there was a policeman in the Kress store and that this policeman reached an understanding w. the waitress to not serve P. d. Extra: 1. Had Kress supplied missing info Rule 56(e) would have rqd P to produce more than a contrary allegation in her complaint. Would have reqd a. Affidavit of someone that saw police officer in store OR b. Affidavit under Rule 56(f) explaining why at the time it was impractical to do so 2. If apply Celotex to Adickes , D could have pointed out that P lacked evidence and Ct would have granted SJ if P failed to show admissible evidence. Celotex Corp v. Catrett - death of H due to asbestos manure distributed by 15 corps a. Facts: At trial, Petitioner's SJ motion stated that 1) Respondent could produce no evidence that Petitioner's products were the proximate cause of any injuries and further, 2) that she could produce no witnesses to attest otherwise. R produced three docs which she claimed demonstrated a genuine material fact dispute. R also argued the docs established decedent had been exposed to Petitioner's asbestos prods. Docs included a deposition of deceased, a letter from an official of one of decedent's former employers, whom Petitioner planned to call as a trial witness and a letter from an insurance Co to the R's attorney. Petitioner argd docs inadmissible hearsay and could not be presented in opposition to SJ motion. Dist Ct granted motion. Ct of App held that Petitioner's SJ motion was defective since Petitioner made no effort to show any evidence to support the motion. Petitioner appealed. b. Rule: Rule 56(c) mandates SJ must be entered, after adequate time for discovery and upon motion, against a party who failed to show sufficient evidence 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

C.

Holding: SJ can be entered against a party who fails to make a showing of any evidence to support an issue of triable fact, of which he or she has the burden of proving at trial. The position taken by the Ct of App was inconsistent w/ the standard for SJ set forth in Rule 56(c). Reversed and remanded. d. Reasoning: 1. Rule 56(c) mandates the entry of SJ after adequate time for discovery and upon motion, 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 the party's will bear the BoP at trial. 2. Principal purpose of SJ is to isolate and dispose of factually unsupported claims or defenses 3. Rule 56(c) allows SJ motion to be denied or hearing of motion continued if the nonmoving party has not had an opp to make full discovery 4. SJ is not a disfavored procedrl shortcut but rather an integral part of the Fed Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action. e. Dissent: Brennan and Blackmum 1. More of what current law is like 2. Initial BoProduction which shifts to nonmoving party if satisfied by moving party Moving party -------------------> non moving party C. Ultimate BoPersuassion, which always REMAINS on MOVING party 1. If has BoPerssn at trial must provide credible evidence using any of the materials specified in Rule 56(c) that would entitle it to a directed verdict if not controverted at trial 2. If nonmovant has BoPerssn then movant 1. Must submit affirm evidence that negates an essential element of moving party's claim OR 2. Must demonstrate to Ct that nonmoving party's evidence is insufficient to establish an essential element of nonmoving party's case F. Extra 1. Adickes address issue of movant trying to dismiss P's case by proving that P cannot meet her BoPerss 2. Celotex is pointing out the lack of other parties' case during SJ to shift burden Anderson v. Liberty Lobby Inc 1. Facts: Willis Cato, a right wing publisher and Liberty Lobby, org he headed, filed a libel lawsuit against the Investigator mag, its prez, publisher, and columnist Jack Anderson for articles that

c.

D.

E.

portrayed Liberty Lobby and himself as Neo-Nazi, anti-Semitic racists and fascists 1. Ds moved for SJ bc Ps cld not show Ds acted w/ ACTUAL malice - knowledge that the statements were false or w/ reck disregard of whether they were true or false. D submitted affidavit form article write. 2. Dist Ct granted SJ. Ct of App reversed. 2. Rule: The inquiry involved in ruling on a summary judgment motion, requires the court to use the substantive standard of proof that would apply at the trial on its merits. 3. Holding: Ct of App erred in holding that the heightened evidentiary reqts that apply to proof of actual malice need not be considered for the purposes of a SJ motion Remanded. 4. Reasoning: 1. When determng if a genuine factual issue as to actual malice exists in a libel suit brought by a public figure, a trial judge must bear in mind the actual quantum and quality of proof necessary to support liability under the substantive test. 2. Judges must be careful not to weigh the evidence and determine the truth of the matter during SJ, but determ whether there is issue for trial. 3. Q that Ct of App should have asked here was whether the evidence in the record could support a reasonable jury finding that P had shown actual malice by clear and convincing evidence or that he had not. 4. mere existence of some factual dispute between parties, alone, does not preclude a finding of SJ; rather, there must be a genuine issue of material fact. 5. SJ may only be granted if a genuine issue of material fact is present between parties. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of SJ 5. Dissent: It is for the fact finder, not the court to decide the merits of a case and the burdens of proof that qualify. If a party has shown the elements of his cause of action, he has presented a prima facie case that must survive SJ Matsushita Electrical: 1. Facts: antitrust case that Jap Co's conspired to enter and dominate American market. There was some circumstantial evidence of collusion and parallel conduct. 2. Holding: SJ appropriate bc direct evidence did not support conspiracy theory and evidence of parallelism doesnt show motive _ no clear and convincing evidence Scott v. Harris 1. Facts: Excessive Force police car chase that had video evidence

I.

2. Reasoning: 1. Qualified immunity B of P on police officer. Video evidence made it imposs to accept P's set of facts. F. Hypo: 1. P sues D alleging D did not pay promissory note when due. D files Rule 12(b)(6) motion to dismiss. 1. Denied why? --> Under Twombly and Iqbal must show specific facts that are possible on their face to raise the reasonable inference. Prob wouild not be denied bc accept what P says is true 2. Does this mean that the P will prevail at trial? What doe the trial test that Rule 12(b)(6) does not? --- > trial tests validity. P may not be telling the truth so can't say he will win. Case Management 1. Case management = idea that a judge serves not only as a detached decision maker, but also as an engaged supervisor, responsible for encouraging, facilitating and even pressuring the parties to resolve their disputes. 1. Counter to adversarial system emphasis on party autonomy and traditional judicial role 2. Rule 16 Pretrial Conferences; Scheduling; Management 1. Designed to substitute for formal pleading to a less formal process of discussion and exchange as ways of narrowing issues for trial and expediting proof 2. Pros- efficiency and speed; Cons- too much judicial power 3. Q: Does Rule 16 promote or threaten a. Litigation autonomy b. Procedural fairness c. Uniformity d. Public accountability 4. Rule 16 a. Amended in 1993 to strengthen trial judge's authority to manage litigation and facilitate disposition of the case b. What it does 1. Deadlines for specific litigation activities 2. Makes explicit and expands topics to be discussed at pretrial conference 3. Greater supervision of discovery 4. Earlier consideration of Rule 56 SJ 5. Confirms judge's authority to encourage settlement by ordering parties to be present at pretrial conference. 5. Velez v. Awning Windows Inc a. Facts: D ignored Ct deadlines and eventually the Ct sided in favor of the P, granting nearly 3/4 of a Million $. D's appeal but Ct of App affirms.

J.

Rule: A partys repeated disregard for court-imposed deadlines will merit an adverse holding, despite the partys eventual filing to oppose the holding. c. Holding: Ct affirmed the lower cts SJ bc Ds did not timely respond to Ps motion, nor did they file an appropriate extension of time per Rule 56(f) that explained why they needed more time. The reasons given by Ds on appeal still do not merit a need for extension. 6. Good Cause to Modify Pretrial Order Test a. Fahim v. Marriot Hotel Services - 4 factors Explanation of the failure to timely move for leave to amend 1. importance of amendment 2. Potential prejudice in allowing amendment 3. Availability of a continuance to cure such prejudice 4. Trial by Jury 1. 7th Amendment right in certain civ cases 2. Rule: party in a fed civ case has a right to a jury trial IF the same case would have been tried by a jury in 1791, the year of the 7th Amend ratification. 1. When Cts divided into Equity (no jury) and CL (jury) 3. Beacon Theaters v. Western - Problem about the order in which the claims should be heard 1. Facts: The Respondent, Fox West Coast Theatres, had K w/ movie distributors, which granted it the exclusive right to show first-run movies. The Petitioner, Beacon Theaters, a nearby theatre, threatened to bring an antitrust lawsuit against the Respondent. The Respondent then brought a claim for declaratory relief against Beacon, which in turn, counterclaimed for treble damages and demanded a jury trial. 2. Rule: Under FRCP, the same Ct may try both legal and equitable causes in the same action. 3. Holding: Under the Declaratory Judgment Act and the FRCP, Petitioner could not be denied a jury trial of all the issues in the antitrust lawsuit. Judgment of the Court of Appeals reversed. 4. Chauffeurs Local 391 v. Terry 1. Facts: The Respondents, various unionized workers, brought action against the Petitioners, Chauffeurs, Teamster and Helpers Local 391), their union for violation of the duty of fair rep. Respondents sought comp damages in form of back pay and loss of benefits. Respondents requested and were granted a jury trial by Dist and App Cts. The Union appealed. Arg over whether this case is more like malpractice suit or fiduciary duty breach. 2. Rule: Claims based on the duty of fair representation are legal in nature 3. Holding: The nature of Respondents' duty of fair representation action and the remedy they sought was a legal action. The money damages Respondents sought are of a type traditionally awarded by courts of law. Thus, the 7th Amend of the USC, entitled Respondents to a jury trial. b.

K.

Reasoning: a. Two Prong Test to apply 7th Amend to recent claims 1. Look for historical analogue to the claim 2. Look at the remedy sought (definitive factor) b. Here 1. Equity wins bc looks more lie fiduciary duty breach 2. CL wins bc seeking monetary damages c. Thus this is a CL claim for the jury 5. Markman v. Westview Instruments 1. Facts: The Petitioner, Markman, brought a patent infringement suit against the Respondent, Westview Instruments, Inc. The jury interpreted expert witness testimony and held for the Petitioner. The Judge directed verdict for the Respondent stating that the jury interpreted the info incorrectly. 2. Rule: In some cases where it is unclear as to whether a judge or jury should decide upon terms of art in a case that is traditionally decided by a jury, precedent states that, judges, bc of their experience may be more capable to define the terms. 3. Holding: Construction of a patent, including terms of art w/in its claim, is exclusively w/in the province of the Ct. Accordingly, CT held that the interp of the word "inventory" in this case was an issue for the judge, not the jury and affirmed the decision of the Ct of Apps. 4. Reasoning: a. Judges better suited. Any credibility of expert, which jurors are good at determining is subsumed w/in the necessarily sophisticated analysis of the whole doc, reqd by standard construction rule that a term can be defined only in a way that comports with the instrument as a whole. b. Want uniformity c. Look at actual statutes d. Rule 38 - Demand + waiver (if don't demand then waive right) 6. Edmonson v. Leesville Concrete 1. Facts: Edmonson (Plaintiff), appealed the jury decision in his negligence suit citing the Leesville Concrete Company's (Defendant), use of race-based peremptory challenges. 2. Rule: Peremptory challenges cannot be used to exclude prospective jurors based on reasons of race. 3. Holding: Recognizing the impropriety of racial bias in the courtroom, race-based exclusion violates the EQP rights of the challenged jurors. Judgment reversed and case remanded for further proceedings consistent w/ this opinion. 4. Dissent: Judge has nothing to do w/ preemptory challenge thus not a govt function nor violation Taking the Case from the jury 1. B of Proof/Production v. Burden of Persuasion 1. B of Prod ~ failure = SJ

4.

L.

a. P in civ actions b. D in affirm defenses 2. B of Perss -> Always on P or D wins a. Three standards 1. Preponderance of the evidence (51% +) 2. Clear and convincing evidence 3. Beyond a reasonable doubt 2. Reeves v. Sanderson Plumbing Products 1. Facts: Age Discrim case. P fired even though was a great employee. 2. Holding: A P's prima facie case of discrim, combined w/ sufficient evidence for a reasonable factfinder to reject the employer's nondiscriminatory explanation for its decision, may be adequate to sustain a finding of liability for intentional discrim under the ADEA. 3. Reasoning: a. Once P established prima facie case of disrim, B of Prod shifts to D to present evidence supporting legit nondiscrim reason for a job action. b. B of perss remains w/ P and must present a preponderance of the evidence that legit reasons offered by D were not the reasons but that they are a pretext for discrim 4. Extra: The ruling means that an employer is liable to a former employee under the Age Discrimination in Employment Act of 1967 if a reasonable jury can find that the employer's explanation for the employee's dismissal was pretext for discrimination. Post Trial Motions 1. Judgment as a Matter of Law Rule 50 1. Shifts some of the jury's authority to the judge - taking decision away from jury 2. Looks at evidence in light most favorable to nonmoving party just as in SJ 3. Can occur before or after jury renders a verdict a. Before = directed verdict Rule 50(a) 1. Rule 50(a) - a party may move for judgment as a matter of law at ANY time BEFORE the case is submitted to the jury but also makes it clear that a matter of law may be granted ONLY AFTER the nonmoving party has been fully heard on the relevant issue b. After = "no reasonable jury could have ruled this way" = judgment notwithstanding the verdict Rule 50(b) 2. New Trial Rule 59 1. Rule 59- Ct may grant trial on whatever grounds have traditionally been permitted. BUT case law says only granted to two types of trial flaws a. Process problems - serious enough to raise Qs about fairness of proceedings 1. Eg: Erroneous instructions to jury

Outcome problems- if the jury verdict is against the weight of the evidence = judgment call 1. Whether the jury's decision was so clearly contrary. Can't just substitute judge's opinion 3. Relief from Judgment or Order Rule 60 1. (a) Corrections Based on Clerical Mistakes; Oversights and Omissions. 2. (b) Grounds for Relief from a Final Judgment, Order, or Proceeding. a. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons: 1. (1) mistake, inadvertence, surprise, or excusable neglect; 2. (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b); 3. (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; 4. (4) the judgment is void; 5. (5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or 6. (6) any other reason that justifies relief. 3. Brandon v. Chicago Bd. of Educ a. Facts: P was represented by Paul F. Peters in his Americans with Disabilities action against D. Dist Ct clerk mistakenly listed another attorney, Paul A. Peters as Ps attorney in the Cts docket. Therefore, Ps attorney was not receiving any correspondence from the Ct. Ps lawyer missed notices for status hearings, and after missing the second hearing the case was dismissed for want of prosecution. Ps attorney filed a Rule 60 motion one year and three days after the dismissal, arguing that the error was due to the Ct clerk and through no fault of their own. Dist Ct denied Rule 60 relief. On appeal, Ps seek relief under the catchall provision of Rule 60(b)(6), while Ds argue that only Rule 60(b)(1) applies, which means that P would miss the oneyear deadline. b. Rule: Rule 60(b) can be used to overturn a final judgment, but the Rule 60(b)(6) catchall provision will NOT be available if the other provisions are applicable. c. Holding: Ps attorney had a duty to check on Ps case, and this lack of diligence resulted in the error as much as the clerks docketing error. P also could not seek relief under the Rule 60(b)(6) catchall provision since it is only applicable if the previous provisions do not apply. Since Rule 60 (b)(1), which covers mistakes or excusable neglect, would apply to the circumstances, P was also bound by the 1-year statute of

b.

4.

limitation to file after the dismissal. They did not make the deadline, so the relief was not granted United Student Aid Funds v. Espinosa a. Facts: Espinosa filed for Chapter 13 bankruptcy and proposed a plan that provided for the repayment of student loans to USAF. After USAF was notified, it filed a proof of claim roughly $4,500 greater than that was included in the plan. The bankruptcy Ct approved the original plan and USAF was notified it would be paid the lower figure. Mr. Espinosa subsequently completed the plan and his loans were discharged by the Ct. 1. Three years later, USAF began intercepting Mr. Espinosa's income tax refunds to satisfy the unpaid portion of his student loans (the $4,500 figure). Mr. Espinosa petitioned the bankruptcy court for an order holding USAF in contempt for violating the discharge injunction. In response, Funds argued that Mr. Espinosa's student loans were improperly discharged because student loans cannot be discharged unless the debtor can show "undue hardship." This can only be shown in an adversary proceeding, which did not take place. Moreover, it argued the lack of an adversary proceeding denied Funds its 14th Amend due process rights. These arguments were rejected by the bankruptcy court, but, on appeal, were accepted by the Arizona federal district court. 2. On appeal, the U.S. Court of Appeals for the Ninth Circuit reversed. It held that simply because Mr. Espinosa failed to comply with additional procedures required by the Bankruptcy Code to discharge student loan debt was not sufficient to set aside the discharge of his student loans, considering Funds had actually been notified of the Chapter 13 plan. It also held that Fund's due process rights were not violated because Fund's had received actual notice of Mr. Espinosa's Chapter 13 plan, even though he had not commenced the adversary proceedings. b. Rules: 1. The procedure by which a debtor merely includes the discharge of his student loans in his Chapter 13 plan, which is then mailed to the creditor, IS sufficient to meet the reqts of due process. 2. Chapter 13 plans that discharge student loans ARE NOT void if the debtor fails to prove "undue hardship" in an adversary proceeding. c. Holding: Bankruptcy Court's confirmation order is not void. d. Reasoning:

1.

2.

3.

bc the Bankruptcy Court's order was final, it could only be rendered void if the order was premised on either a jurisdictional error or on a violation of due process. Here a. there was neither a jurisdictional error nor a violation of due process. Bankruptcy Court's failure to find undue hardship was mere legal error and did not rise to the level of a jurisdictional or due process error that would render order void.

M.

Appeals 1. Final Judgment Rule - only final judgments are appealable 1. 1291 = ones that end the litigation on the merits and leaves nothing for the Ct to do but execute the judgment 2. Interlocutory (decisions along the way) ARE NOT final judgments unless exception 3. Exceptions 1292(a) - gives Ct of App jurisd over interloc orders by Dist ct granting, continuing, modifying, refusing or dissolving injunctions 4. 1292(b) - allows Dist Ct judge to certify that an important issue needs to be resolved by App Ct right away a. Interloc orders must involve controlling Q of law b. Must be substantial basis for disagreement about Q of law c. Dist Judge must believe that immediate App review would help bring lawsuit to close d. Ct of App has discretion to accept appeal 5. Finality a. Liberty Mutual Insurance Co v. Wetzel 1. Facts: Mr. & Mr. Wetzel (Respondents), claimed that the Petitioner's employee insurance benefits and maternity leave regulations discriminated against women in violation of the Civ Rights Act of 1964. Resp moved for partial SJ only on issue of liab and US Dist Ct ruled in their favor. Petnr appealed to Ct of App and Ct held that it had jurisdiction over the Petnr's appeal and affirmed the Dist Ct's holding. SCOTUS granted certiorari. 2. Rule: Appeals to courts must be procedurally and substantively valid. A partial SJ on issue of liab is an interlocutory order and NOT appealable under Final Judgment Rule 1291 3. Holding: Petnr's appeal to the Ct of Apps was NOT valid. Were SCOTUS to sustain the procedure followed in this case, it would be condoning a practice where a Dist Ct in virtually any case might enter an interlocutory appeal on the Q of a D's liab and the D in turn, would be permitted to appeal to the Ct of Apps w/o satisfying any of the Congressional reqts reqd of him. The judgment of Ct of

Apps was vacated and case remanded w/ instructions to dismiss the Petnr's appeal 4. Reasoning: a. SCOTUS has jurisd to review appeal bc appeals fall under SMJ. Can only have jurisd over final decisions. So why did other Cts think this was appealable? -> Bc a declaratory judgment was granted. b. Dist Ct and Ct of Apps had taken the view that bc Dist Ct entered a final judgment under Rule 54(b) on the issue of liab and that there was no just reason for delay, the orders therefore became appealable as a final decision pursuant to 28 U.S.C. 1291. This reasoning was incorrect because Rule 54(b) only applies to multiple claim actions. The Respondents had brought forth a single claim. c. Also not appealable under 1292(b) - "such an order involves a controlling Q of law as to which there is a substl ground for diff of opinion" - this is not an issue of law. 5. Extra: Prob here is that losing party has to argue this is a Q of law to the Dist Ct that just ruled against them. b. NY Approach 1. Allow appeal to state's interim app Ct - Appellate Division in many situations in which no final judgment has been rendered. NYCPR 5701 c. Which Rule is better? 1. NY - avoid unnec trial 2. Fed Approach avoids unnec appeal d. Institutional Diff 1. Rule 23(f) - class action certification can be appealed. Go straight to Apps Ct = more access than 1292(b) that reqs asking Dist Ct. e. Settlement Incentives = not able to appeal so will prob settle 2. Collateral Order Doctrine - allows parties to appeal certain decisions that would effectively be unreviewable on appeal. (Reinterprets 1291 so that final decisions are not always final) 1. Decision must a. Conclusively det the disputed Q b. Resolve important issue completely sep from merits of action c. Be effectively reviewable on appeal at final judgment 2. Cohen v. Beneficial Industries Loan Corp a. Facts: P brought a stockholders derivative action in Fed Ct. D, BILC, argd that a NY state law reqing parties to serve a bond for payment of the opposing party's legal fees should be allowed.

Holding: A shareholder's derivative suit will follow state nonprocedural laws regarding the derivative suits when possible bc statute is not a procedural matter that would preempt Fed Rules. 3. Will v. Hallock a. Facts: Govt seizes computer, damages it and causes serious financial loss. 1. Suit 1: against govt dismissed bc govt exempt under FTCA 2. Suit 2: against employees (customs agents) - Ct rules they are not exempt bc suit 1 was not a final judgment 3. Cohen case-like bc collateral order that can be decided like a final decision b. Are Cohen and Hallock diff? 1. Merits here: Whether govt was neg? 2. Issue in the decision: Whether this case can go through bc it is unrelated to what was already established? 3. All the action is on the second prong - separate merits. 4. Collateral Order Test - that an order ... a. Conclusively detmd the disputed Q b. Resolved an important issue completely separate from the merits of each action c. Be effectively unreviewable on appeal from a final judgment 5. Dismissal of other suit is analogous to preclusion which happens early on in trial and if Ct were to say, "Oh not it's not precluded" 6. Discovery orders = interlocutory orders which are usually NOT appealable bc they delay trial and are unnec app proceedings. But they are made discoverable under collateral order doctrine a. As a litigant, what would you do if challenged by discovery orders? 1. Don't do what Ct says. Wait to be in contempt and then that becomes appealable 2. w/in interlocutory appeals statute itself 1292(g)(1) (???) petition Ct to make determination as to whether there is a Q of law as to which there is a substl ground for diff of opinion 3. File a writ of mandamus (extraordinary - must be judicial abuse of discretion) 4. Collateral doctrine 3. Scope of Review 1. What may be appealed? Waiver and Harmless error a. Waiver - may not raise issue on App unless raised at trial Ct level otherwise waived b. Rule 61 Harmless error- if error causes no harm will not reverse judgment 2. J.F. White Contracting Co v. New England Tand Industries of New Hampshire a. Facts: App of K to build oil tanker dock facilities on Piscataqua River. White appeals judgment against defective workmanship

b.

b.

3.

4. 5.

Rule: In order for an appeal to be considered, the error in the lower Ct must have affected the subtl rights of the parties or the verdict c. Holding: A trial Ct's action in submitting a questionable issue to the jury was NOT error enough to affect the verdict of the substl rights of the parties. While C's action in submitting the "out-of roundness" issue to the jury was error, Ct was not persuaded that there was even a remote possblty that this error affected the verdict or the substantial rights of the parties. Can App Ct review winning parties motion? a. Electrical Fittings Corp v. Thomas & Betts Co 1. Facts: Respts brought a suit in equity for alleged infringement of a patent. Dist Ct held that claim one was valid, but not infringed and claim two was invalid. The decree entered stated that claim one was valid, but dismissed it for failure to prove the infringement. The Respts filed in the Patent Office a disclaimer of claim two, but did not appeal. The Petnrs, however, appealed from the part of the lower Ct's decree that claim one was valid. The appeal was dismissed bc Petnrs received all the relief they could get and the litigation was in their favor. 2. Rule: A party may not appeal from a judgment or decree in his favor for the purpose of obtaining a review of findings he deems erroneous, which are not nec to support the decree. 3. Holding: The Apps Ct had the jurisd to hear the appeal from the party who won below. The decree adjudged that claim one was valid and though it was immaterial to the outcome of the case, the Petnrs were entitled to have that part of the holding eliminated. The Circt Ct of Apps had jurisd to entertain the appeal, not for the purpose of passing on the merits, but to direct the reformation of the decree. Reversed and remanded. In General nonparties cannot appeal Intl' Ore and Fertilizer Co v. SGS Central a. Facts: D agreed to transport fertilizer cargo for P to New Zeeland Buyer, but cargo contaminated on boat and purchaser refused delivery = damages for P. P sued for breach of K and neg misrep of condition of ship. 1. Judge rejected K claim but upheld neg claim and awarded damages 2. D appealed and App Ct agreed neg should have been dismissed and K claim that gave P more damages upheld. Ct would NOT rule on K claim bc P had not cross-appealed. b. Rule: When a party would have won, BUT failed to cross-appeal, that party cannot be heard in opposition thereto when the case is brought by the appeal of the adverse party

c. Holding: Ct granted P K claim but no extra damages 4. Scope of Review of Facts 1. The power to order a new trial in a case decided by a jury (De Novo) a. On a Q of law App Cts give zero deference to Trial Ct decisions instead take fresh look at each legal issue and decide for themselves 1. Corcoran v. City of Chicago a. Facts: P brought suit against the City of Chicago (D), to recover damages for personal injuries sustained by P, due to the D's alleged neg in permitting certain streets to be and remain in unsafe conditions for travel. A jury heard the case and held for P ($5000). A motion for a new trial was denied and judgment was entered. On appeal, the App Ct reversed and remanded for a new trial citing that the verdict was against the weight of the evidence. P filed a motion to have the remand part struck from the order and that motion was granted. b. Rule: CL practice authorizes appellate Cts to set aside verdicts on the grounds that the evidence does not support the findings of fact. c. Holding: App Ct had the authority to reverse a judgment based on facts decided by a jury, thereby unconstitutionally striking the P's right to a jury trial. We conclude that there was a practice at common law, which authorized Cts exercising appellate jurisdiction to set aside verdicts on the grounds the findings of fact were not supported by the evidence. Judgment affirmed 2. The Power to set aside a Trial Judge's findings in a non-jury case Rule 52(a) Clear Error a. In bench trials, Rule 52(a) reqs Dist Ct to state the Ct's findings of fact and conclusions of law and it foes on to declare the standard of review 1. Findings of fact, whether based on oral or documentary evidence, shall NOT be set aside UNLESS CLEARLY ERRONEOUS, and due regards shall be given to the opportunity of the trial Ct to judge the credibility of the witnesses 2. Clearly Erroneous = that even if some evidence supports the findings, the reviewing Ct based on the entirety of the record, is left w the definite and firm conviction that a mistake has been committed. b. Pullman- Standard v. Swint 1. Facts: Respndts were black employees of the Ptnr Pullman Standard and brought suit against them and the Ptnr Union,

2.

3.

4.

asserting that the seniority system violated the Civ Rights Act. The Dist Ct found that the differences in terms, conditions, or privileges of employment resulting from the seniority system were not the result of an intent to discriminate bc of race or color. It held that the system satisfied 703(h) of the Act. The Ct of App reversed citing differences in the terms, conditions, and standards of employment for black and white workers at the Ptnr Pullman-Standard resulted from an intent to discrim. Rule: An App Ct may only set aside a Dist Ct's findings of fact where they are clearly erroneous. The App Ct may not substitute its own judgment, rather it must remand to the lower Ct to fix its mistake. Holding: Discriminatory intent under 703(h) of the Act is a factual matter subject to the "clearly erroneous" standard of Rule 52. It follows that when a Dist Ct's finding on such an ultimate fact is set aside for an error in law, the Ct of App is not relieved of the usual reqts of remanding for further proceedings to the tribunal charged with the task of fact-finding in the first instance. SCOTUS concluded that the Ct of App erred in the course of its review and accordingly reversed its judgment and remanded the matter for further proceedings. Reasoning: The Ct of App made an indep determ of discriminatory purpose, the ultimate fact in this case and this was error under Rule 52. a. Rule 52 reqs that findings of fact be set aside only if clearly erroneous. b. It does not apply to conclusions of law. c. For a violation of the Act, there must be a finding of actual intent to discriminate on racial grounds on the part of those who negotiated or maintained the system. The finding is a pure question of fact to be made by the trial court. d. Discriminatory intent meant actual motive, therefore, was not a legal presumption to be drawn from a factual showing of something less than actual motive. e. Thus, a Ct of App may only reverse a district court's finding on discriminatory intent if it concludes the finding was clearly erroneous.

N.

Preclusion 1. Two Kinds 1. Claim Preclusion - Res Judicata = whether parties are prohibited from asserting a claim bc they already received a judgment on the same claim

Issue Preclusion - Collateral Estoppel = whether parties are prohibited from litigation a partic issue that was decided in a prior law suit 2. Claim Preclusion - "One bite of the apple. Can't bring the claim again. " 1. "Merger" - You won that's enough a. Rush v. City of Maple Heights - see below 2. "Bar" - loses but tries again a. Mathews v. NY Racing Assoc Inc. 1. Facts: Mathews (Plaintiff), attempted to bring a suit against the NY Racing Assoc, Inc. and its private detective agency, Thoroughbred Racing Protective Assoc. Inc. that was similar to a previous one which had been adjudged. The D invoked the defense of res judicata. 2. Rule: The doctrine of res judicata operates as a bar to subsequent suits involving the same parties, or those in privity with them, based on a claim, which has once reached a judgment on the merits. 3. Holding: The claim in the suit is the same as the previous one. The P could not be allowed to split his claim into multiple suits and try them at his convenience. 3. Rule: A final judgment on the merits, precludes re-litigation of the same claim btw the same parties 4. Claim preclusion analysis: Whether claim of preclusion applies a. Ask whether cases involve SAME CLAIM, btw the SAME PARTIES, and whether prior judgment was FINAL , VALID, and on the MERITS b. Same Claim 1. Majority Transactional Test - a claim is precluded by a prior judgment if the actions arise out of the same underlying transaction or series of transactions = joinder of related claims a. Ask what the case is about, ignore claims and remedies b. Did the second claim arise out of the same underlying factual situation as the first 2. Same evidence test 3. Primary rights test - whether same rights involved. 4. Rush v. City of Maple Heights a. Facts: i. Claim 1: P sues D for negligently maintaining street for personal prop damage. Ct finds city neg and awards P $100. ii. Claim 2: P sues city again but now for personal injuries. P given $12,000 w/o a trial bc neg was already determined in claim 1.

2.

c.

D appeals. D argues that the issue of neg was barred res judicata. It was an error to split the causes of action. b. Rule: It is improper to bring different claims for damages to property and person, which arose, from the same tort. c. Holding: Whether or not injuries to both person and property resulting from the same wrongful act are to be treated as injuries to separate rights or as separate items of damage, a P may maintain only one action to enforce his rights existing would prove at the time such action is commenced. Judgment reversed. Final judgment for D d. Reasoning: i. Transactional Test: Majority view - single tort can be basis of but one action. Precluded if arise out of the same underlying transaction (same factual situation) ii. Evidence Test: Minority view- whether the same sort of evidence would prove P's cause in two actions. e. Extra: i. What are the challenges to bringing ALL claims all at once if arose from the same transaction. --> risk of losing greater claim ii. Problem: What if said let me litigate first claim that has a smaller damage claim to test the waters. If I win, then I can use it to say issue preclusion on next claim and just ask for my damages? Same parties - or their privies 1. Notion of Privity - person bound by judgment in case brought on his behalf by guardian or legal rep 2. Taylor v. Sturgell a. Facts: P brings a Freedom of Information claim via FOA against FAA to get plans for certain planes. D argues P precluded bc his friend had already brought a similar suit w/ the same lawyer. Gen rule says if you are not a previous party you are not bound, but there are exceptions such as privity. Lower Cts look to "virtual representation" to be a type of privity. b. Holding: The dismissal of a claim based on a Freedom of Information Act request does not preclude a second individual, based on the concept of "virtual representation," from bringing a similar claim even when both claims involve the same project and the

iii.

d.

e.

f.

parties to each suit are represented by the same attorney. c. Reasoning: i. Such "nonparty preclusion" runs up against the "deep-rooted historic tradition that everyone should have his own day in court." ii. Virtual rep should only be applied rarely and under certain exceptions to gen rule, none of which the Ct found applicable here. iii. The D.C. Circuit's decision was vacated and the case sent back to the district court for a new trial. iv. Ct did not like the Close Enough 7 and 5 factor tests - too factor driven bc going through whole test will end up costing money and time which makes the point of preclusion worthless d. Extra i. This is a private law case bc only affecting one private P. ii. Apply holding to Ashcroft v. Iqbal - Lets say after Iqbal lost there would be another person that would bring the same suit. This would be a public law case. Should it be precluded here? Valid and Final Judgment 1. Validity - structural and procedural notion 2. Rule: a judgment from a Ct that lacked SMJ may nonetheless be given preclusive effect w/ a few exceptions a. Exception = default judgments if D does not appear in first action then D can later challenge the validity of the judgment by showing the first Ct lacked SMJ b. If Ct substly infringes on authority of another 3. Ask a. Do Cts have PJ? -> No => No claim preclusive effect b. Yes. Then do Cts have SMJ? -> No => MAY have claim preclusive effect unless first Ct abused authority or unless D defaulted and has meritous defense Finality 1. Not interloc orders 2. Mjrty of Cts judgment = final even if pending appeal 3. CA - not final for purposes of preclusion until after appeal or the time for appeal has passed. Thus can bring same lawsuit again while pending app. On the merits 1. Eg. Ct dismisses for lack of SMJ/ PJ / improper venue / failure to join on the merits 2. Majority view: "dismissed" under Rule 41(b) = adjudication on the merits

3. 4.

5.

If doesn't say "NOT on the merits" or "w/o prejudice" or "w/ leave to amend" ect then it IS on the merits and entitled to preclusive effect Minority View: Opposite view. Dismissed = w/o prejudice unless Ct specifies otherwise Semtek v. Lockeed Martin a. Facts: P filed suit in CA state Ct against D alleging inducement of breach of K and various biz torts. D moved case to Fed Dist Ct in CA via diversity and successfully moved to dismiss P's claim as barred by CA's 2-year statute of limitations. Dist Ct dismissed suit "on the merits and w/ prejudice." P then re-filed suit in MD state Ct. Lockheed again had case removed to Fed Dist Ct in MD, and asked CT to apply claimpreclusive effect to the CA Dist Ct's adjudication on the merits, and dismiss the suit. b. Rule: Fed CL governs the claim-preclusive effect of a dismissal by a Fed Ct sitting in diversity, which in turn will apply the claim-preclusion laws of the state in which the Fed Ct is located. c. Holding: "Upon the Merits" language of Rule 41(b) means only that the same claim cannot be filed in the same Ct and does not govern whether a judgment is entitled to claim preclusive effect. d. Reasoning: i. Concern as to whether would violate Rules Enabling Act for a FRCP to govern the law of claim preclusion. ii. No longer the case that a judgment on the merits is automatically entitled to claim preclusive effect. Thus the term "operates as adjudication on the merits" does not automatically render a judgment the effect of claim preclusion under Rule41(b). Instead adjudication on the merits is merely one that is not dismissed with prejudice. An adjudication upon the merits, under Rule 41(b) only has the effect of preventing a refiling in the same Dist Ct in which the case was earlier filed. iii. Extra 1. Why is there an Erie issue here if preclusion is a procedural issue? 1. Outcome determinative bc can litigate in one Ct and not in the other Hypos

a.

X sues Y in NY. Y wins, case is final, valid, and on the merits. X then tries to sue Y in CA. Is this allowed? -> NO bc of Full Faith and Credit Clause 1738- full faith and credit shall be given in every state b. Kate falls off motorcycle while riding down street. Case 1: Kate sues contractor who paved the street in OH state Ct for injuries to her motorcycle. She wins. OH jurisd where you cannot split causes of actions. Case 2: She then sues the contractor for injuries to her body in diff state Ct, NE. Can she be precluded? -> Yes based on the statute, NE Ct told to do what OH would have done even if their rules are diff. c. Same facts as above except, case 1 in OH state law, but case 2 in NE fed Ct. Fed law would allow second case but OH would not. Is she precluded? What law will govern? -> Fed Ct has to follow the OH state law based on the statute d. Same as above except, case 1 = OH Fed Ct, case 2 NE state Ct. OH Fed Ct allows splitting of action but OH state Ct does not. Is she precluded? What law should NE apply? -> The statute tells us nothing about what to do w/ Fed Ct law. It seems like state Cts should give full faith and credit to Fed Ct, but that is not in the FFCC nor in the statute. So we have to turn to the Supremacy clause - Const = supreme law of the land, Fed Cts made by Const ergo State Cts should give full faith and credit to Fed Cts. e. Twombly hypo - Twombly's complaint against Bell Atlantic in fed ct is dimissed pursuant to Rule 12(b)(6) failure to state a claim. Twombly takes case to state Ct. -> Rule 41(b) applies and state Ct must give full faith and credit to Fed Ct. 3. Compulsory Counterclaims Rule 13(a) 1. Rule 13(a) - Reqs counter claims to be brought in the orig action if they arise out of the same transaction or occurrence as the orig claim 2. Mitchell v. Fed Intermediate Bank "Potatoes case" a. Facts: 1. Claim 1: Mitchell D told by bank that to get loan needs to sell potatoes. In the end the bank keeps the proceeds from the potatoes which was greater than the $9,000 owed. Bank still sues to get the $9,000. D says no bc already paid (Defense). 2. Claim 2: Mitchell is not the P sues to get back $9,000 from potato sales b. Rule: A P is not allowed to split his causes of action by first using it as a defense in one case and as a claim in another.

a.

Holding: Mitchell cannot use the same defense first and a shield and then as a sword. Needs to have counterclaimed in the first place. (Rule 13(a) or (b) d. Reasoning: e. Extra: 1. Why didn't Mitchell bring the counterclaim? --> maybe Ds are not sympathetic w/ counterclaim, but this sounds like forum shopping. Suit 1 = 1 Fed Ct: Bank v. Farmer; Suit 2 = 2 State Ct: Farmer v. Bank. 4. Issue Preclusion - Collateral Estoppel 1. When specific Q has been answered in one case, issue preclusion prevents the parties from trying to get a dif answer to the same Q in another case. 2. Rule: When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action btw the parties a. Identical issue = relevant in both actions. IDENTICAL not just similar b. Actually litigated and determined = take result from previous cases and apply it now so can't re-litigate c. Essential to the judgment (otherwise was not already considered enough) eg: winning based on contributory neg defense or when many alternate findings (alternate holdings) d. Some parties and mutuality doctrine 1. Who is bound? Parties/ privity 2. Who can assert issue preclusion? Mutuality Doctrine a. Mutuality Doctrine (disappearing) i. Mutual = btw parties; nonmutual = one party and one non party/ non parties = two non parties ii. Defensive nonmutal Collateral Estoppel - OK iii. Offensive Nonmutual issue preclusion/ No Mutual collateral estoppel- when someone who was NOT a party to the first action uses the judgment for issue preclusion against someone who WAS a party in the first case (permitted by most modern Cts but in limited terms using Discretion TEST ) 1. Parklane Hosiery Co v. Shore - see below iv. Defensive Collateral Estoppel to bind non parties = sometimes v. Offensive Collateral Estoppel to bind non parties = sometimes, but very rare 1. Like a Shield v. a Sword b. Parklane Hosiery Co v. Shore

c.

c.

Facts: In a prior action, the SEC brought suit against the Petitioner alleging that the proxy statement issued by the Petitioner was materially false and misleading. CT found the proxy statement to be so and entered a declaratory judgment and Ct of App affirmed. 1. In the present action, Respondent brought a stockholder's class action lawsuit against the Petitioner alleging that the Petitioner had issued a materially false and misleading proxy statement in connection w/ a merger and sought damages, rescission of the merger and recovery of costs. The Respondent then moved for partial SJ against Petitioner, asserting Petitioners were collaterally estopped from relitigating the issues that had been resolved against them in the SEC case. 2. Dist Ct denied the motion on ground that application of collateral estoppel would deny Petitioner 7th Amend right to a jury trial. Ct of Apps reversed ii. Rule: Trial Ct judges have broad discretion to allow application of offensive collateral estoppel in cases where P could not have easily joined in the earlier action and where it would not be unfair to D to allow it. iii. Holding: Offensive nonmutual issue of preclusion is permissible iv. Reasoning: 1. SCOTUS acknowledged that offensive nonmutual issue preclusion often presents dangers of unfairness, but on facts of the case, Ct found it permissible to use it. 1. No wait and see prob bc impossible for P to join in first action 2. Stakes in first cases were high and procedural opps were through so D had a full and fair opp to litigate the issue. 3. Issue had not be subject of inconsistent determinations. Commissioner of Internal Revenue v. Sunnen i. Facts: Sunnen assigns royalties to the wife and she pays taxes on them. IRS says its his income and he should pay.

i.

1. Claim 1: tax liab of 1929-1931 = not taxable for royalties paid to wife under 1928 license agreement (K) 2. Claim 2: 1937-1941 income was not part of 1st claim + shift in weight of authority since last case = may have diff result than before. Here diff issue bc diff years. ii. Rule: Where two cases involve income taxes in different taxable years, collateral estoppel must be confined to situations where the matter raised in the second suit is identical in all respects w/ that decided in the first proceeding and where the controlling facts and applicable legal rules remain unchanged. iii. Holding: No collateral estoppel bc not same issue. Has to be IDENTICAL not just similar. 3. Binding Non-Parties a. Martin v. Wilks i. Facts: 1. Claim 1: Petitioners, City of Alabama and Jefferson County Personnel Board, had entered into consent judgment w/ black firefighters setting goals for hiring blacks and promoting them. 2. Claim 2: Subsequently, Respondents, white firefighters, nonparties to claim 1 brought a reverse discrim lawsuit against Petitioners. The Petitioners responded that the consent decrees in earlier suits brought by blacks mandated the procedures followed and precluded the current suit. 3. Dist Ct held that the earlier consent decrees were a defense to the white firefighters' suits, but Ct of App reversed holding that bc the white firefighters were not parties to the earlier litigation, their claims could not be precluded. ii. Rule: A Ct mandated consent decree DOES NOT preclude a subsequent suit brought on the same issue by parties not present in the earlier action. iii. Holding: SCOTUS holds that firefighters can pursue the litigation iv. Reasoning: Should get your day in court. 5. Interjurisdiction Preclusion

1. 2.

Full faith and credit clause USC Art I Sec 4 and 1738 add obligation for Fed Cts to respect judgment of other state Cts Semtek Intl v. Lockheed Martin Corp. a. Facts: P Semtek sued L on state law claim first in CA state Ct. L removed to Fed Ct based on diversity. Fed Ct dismissed on merits w/ prejudice based on CA's 2 year statute of limitations. P filed same claim in Maryland bc statute of limitations is 3 yrs. L moved to to dismiss on grounds of claim preclusion b. Rule: Effect of a Fed Ct judgment is governed by Fed CL of procedure but Fed law should incorporate state standards unless overriding Fed interest. c. Holding: MA to apply CA rule that statute of limitations dismissal was not on the merits and thus no claim preclusion d. Reasoning 1. Under CA law dismissal due to expired statute of limitations not entitled to claim preclusion effect. 2. Prob - Rule 41(b) treats dismissal for expired statute of limitations is on the merits bc of the Ct's wording 3. SCOTUS says look to where case originally brought. Here CA. Maryland irrelevant. 4. Erie Q as to who's law governs, Fed Ct or CA law. Southern Pacific RR v. US 1. Facts: 2. Rule: c. Holding: US v. Moser a. Facts: b. Rule: While the doctrine of res judicata does not apply to unmixed questions of law, a fact or right distinctly adjudged cannot be disputed in a subsequent action between the same parties, even upon another demand and though the original determination was reached upon an erroneous view or application of the law. c. Holding: Where a retired naval officer had obtained judgments in the Court of Claims for installments of increased pay under an Act of March 3, 1899, providing "that any officer of the Navy . . . who served during the civil war, shall, when retired, be retired with the rank and three-fourths the sea pay of the next higher grade," and sued there again for another installment, held that the government was estopped from maintaining that his service during the civil war as a cadet in the Naval Academy was not service within the meaning of the statute, that question having been determined against it in the previous litigation. Commissioner of Internal Revenue v. Sunnen

C.

D.

E.

a. Facts: The Taxpayer, Sunnen, licensed a corporation to use his patents and assigned the royalties to his wife. The wife paid the taxes on the royalties, but the IRS asserted the royalties were taxable to the Taxpayer. Bc a prior case had litigated this issue, the CT in the second action invoked collateral estoppel as to the particular issue. b. Rule: Where two cases involve income taxes in different taxable years, collateral estoppel must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first proceeding and where the controlling facts and applicable legal rules remain unchanged. c. Holding: The App Ct's decision regarding collateral estoppel preclusion as to the royalties paid under the 1928 agreement was erroneous. Collateral Estoppel relieves the govt and taxpayer of redundant litigation of the identical Q of the statute's application to the taxpayer's status. The royalty payments not involved in the earlier action by the Board of Tax Appeals. This action concerned different tax years and were not collaterally estopped. However, bc legal principles developed in various intervening decisions of SCOTUS made clear that the Board erred in its ruling, collateral estoppel does not apply to the issue of the royalties paid from the 1928 agreement. Reversed and remanded

Tests
Wednesday, April 20, 2011 8:14 PM

PERSONAL JURISDICTION Long-Arm Statute or statute that gives state PJ? 1. Gray v. American Radiator Min contacts Tests 1. International Shoe - min contacts reqd 2. Gen in personam - Helicopteros 3. Ongoing biz relationship - BK 4. Single Act - insurance 5. Stream of Commerce - WWVW and Asahi Factor Test Challenge to PJ 1. 12(b) SUBJECT MATTER JURISDICTION Federal Q Jurisd

1. Has to fall under Art III s. 2 of USC or 1331 2. Mottley Rule (and Well Pleaded Complaint Rule)- Louisville & Nashville RR v. Mottley a. Must "arise under Fed statutory law" not just part of defense b. The Holmes Creation Test (When is Mottley's WPC Rule applied well? ) i. If the source of the P's enforceable legal right against the D is fed law c. In order to establish state law claim must prove proposition of fed law i. Merrell Dow Test- No bc statue did not intend to allow suit for state actions ii. Grable & Sons V. Darue - Yes Diversity Jurisdiction 1332 1. Complete Diversity (Strawbridge v. Curtis) + over $75,000 claim to prevent out of state prejudice 2. Citizenship Tests a. Indiv = domiciliary (Mas v. Perry) b. 1332(c)(1) Corporation - 1) incorporation and 2) principal place of biz i. Nerve center test ii. Bulk of corporate activity test iii. Total activity test 3. Aggregation of Amount in controversy a. One P w/ 2 claims against same D - Ok b. One P w/ one claim against two separate Ds - NOT OK c. Two Ps w/ one claim against on D - NOT OK i. Exception - Exxon Mobile v. Allapattah Services - One P meets amount in controversy but other does not - OK 4. Limited to Fed Ct w/in district of Ct of gen jurid that has PJ - Rule 4(k)(1)(A)

VENUE 1391 1. Options for Venue 1391(a) and (b) a. Diversity i. 1391(a)(1) judcial district where any D lives if ALL Ds live in same state ii. 1391(a)(2) judicial dist where a substl part of events took place or substl amount of prop located iii. 1391(a)(3) judicial dist in which any D is subject to PJ at time action commenced if no other option b. All non diverse cases i. 1391(b)(1)(2) identical to (a) ii. 1391(b)(3) - judicial dist where any D may be found c. Patent infringement 1400(b) venue restricted to where the D resides or committed acts of infringement AND has reg place of biz 2. Corporate Defendant Residence 1391(c) any dist where there is PJ over the D

REMOVAL (state to fed Ct BUT NOT fed to state) 1441(a) 1. Would the ct have had orig jurisd if brought there first? 2. Exceptions 1441(b) - diversity only removable only if no D is citizen of the state where the case is already in (If D already in home state cannot remove) 3. If properly brought to Fed Ct CANNOT remove to state Ct. 4. Procedure for Removal 1446, Motion to remand 1447(c) Transfer 1404 (geographical transfer state to state, fed dist to fed dist) (Piper Aircraft - removed, transferred then dismissed)

ERIE Diversity Cases in Fed Ct 1. Follow the state CL when the Fed Ct has no law of its own (Hannah v. Plummer) 2. Follow Fed Procedural Law (Hannah v. Plummer outcome-determinative test) as long as they do not abridge, enlarge or modify any substantive right (REA 2072(b)) 3. What to look for a. Conflict btw fed constl provision and state law (7th amend reqs unanimous verdict but state only majority) - USC trumps state law b. Conflicts btw fed statute and state law (fed says have to enforce arb agreement but state does not) - FED Statutes trump state laws c. Conflicts btw fed rule and state law (fed says any service of process good,, but state says only in person)- FRCP trumps state law if it is VALID under REA d. Conflicts btw a fed judicial practice and state law - (not official rule but practices) - if outcome determ then State wins 4. To avoid prob interpret rules to not conflict w/ state - Walker v. Amco and Gasperini

JOINDER Joinder of Parties Rule 20 1. Rule 20(a)(1) Ps may sue together if have CNOF 2. Rule 20(b)92) P may sue multiple Ds if CNOF Joinder of Claims (note must still establish SMJ for each claim) 1. Rule 13 counterclaims a. Rule 13(a) compulsory if same transaction or occurrence (use it or lose it) b. Rule 13(b) permissive if unrelated but same party c. Rule 13(g) cross-claims btw parties as long as CNOF 2. Rule 18 - may join w/ orig claim any additional claims against opposing party (including extra cross-claims not under CNOF) Impleader Rule 14 (bring into suit new parties, note that no need to show diversity or proper venue for 3rd party

Essential Parties 1. Rule 19(a) - whether some person who was not joined in the original action should be made party to it a. Rule 19(a)(1)(A) - if in the person's absence the court cannot accord complete relief among the existing parties b. Rule 19(a)(1)(B)(i) - if absentee has an interest in the subj matter of the action and his ability to protect that interest will be impaired if he did not participate in the litigation c. Rule 19(a)(1)(B)(ii) - if absentee has an int in the suit and adjudicating w/o him might leave one of the existing parties exposed to multiple or inconsistent obligations 2. Rule 19(b) What if should be added but cant be a. Adjudicate anyway b. Dismiss bc improper to adjudicate w/o absentee c. Go forward but try to adjudicate in way that is fair to present parties d. Factors to consider i. To what extent judgment rendered in the person's absence might be precluded to the person or those already parties ii. The extent to which protective provisions in the judgment may be used to avoid or lessen the prejudice to the absent party iii. Whether a judgment rendered w/o the absent person will be adequate [among the parties before the ct] iv. And last, whether the P will have an adequate remedy- presumably in another ct - if the action is dismissed due to the inability to join the absentee Intervention 1. Rule 24 Absentees may intervene to become parties on either side a. Rule 24(a) when party has a RIGHT to intervene i. Rule 24(a)(1) - based on statute ii. Rule 24(a)(2) - See 3 factors b. Rule 24(b) permissive intervention

SUPPLEMENTAL JURISDICTION 1367 1. United Mine Workers v. Gibbs - have fed jurisd over both the fed Q suit and state law claim if arise under CNOF 2. Owen Equipment v. Kroger - P claim against 3rd party not ok if it could not have been brought independently 3. 1367(b) cannot extend supp jurid to diversity cases even if w/in 1367(a) against parties joined through Rule 13, 19, 20 or 24 4. 1367(c) - 4 other reasons to deny supp jurisd DISCOVERY Rule 26

SUMMARY JUDJEMENT Rule 56

1. Movant has Burden of Production to come up w/ at least some affirmative evidence that there is no genuine issue of material fact. 2. Or Celotex, Adickes, and Rule 56(c) need only show that nonmovant lacks evidence to prove triable issue of fact so nonmovant has Burden of Production (has to cite to the record) 3. If movant meets burden it shifts to nonmovant to meet burden under Rule 56(e) (affidavits, specific facts, admissible evidence that will enable him to prevail at trial. If don't have strong evidence try to argue that movant didn't meet his burden to shift the burden in the first place) 4. Partial Summary Judgment Rule 54(b)

JUDGMENT AS A MATTER OF LAW Rule 50

TRIAL by JURY 1. Apply 7th amend to recent claims a. Look for historical analogue to the claim b. Look at the remedy sought (definitive factor) Rule 11- Sanctions Rule 12 - Dismiss Rule 15- Amend pleading

TAKING THE CASE FROM THE JURY 1. 12(b)(6) 2. Summary Judgment 3. Directed Verdict after P's evidence, then after P and D's evidence 4. JNOV - objections = Rule 50(c) and (d)

JUDGMENT AS A MATTER OF LAW RULE 50 Denial 1. Whether to grant judgment as a matter of law is a legal decision but underlying Q is whether any reasonable jury could have reached the same conclusion = extremely deferential standard

NEW TRIAL Rule 59 1. Whether the verdict was against the great weight of the evidence but the appellate CT reviews the decision for abuse of discretion = double protection a. High standard for trial judge to grant new trial b. Deferential review of trial Ct's discretionary decision to a new trial

PRECLUSION Claim Preclusion - res judicata 1. Whether the case involves the same claim, btw the same parties, and whether prior judgment was final, valid, and on the merits 2. Same claim a. Transactional Test - precluded if arise out of same underlying transaction (same factual situation- majority view) b. Evidence Test - whether same sort of evidence would prove P's cause in two actions 3. On the Merits 4. Finality a. Final even if an appeal is pending appeal b. CA - not final for purposes of preclusion until after app or the time for appeal has passed, but the Ct will prob hold off until other case is ruled on Collateral Estoppel - issue preclusion 1. Same issue 2. Actually Litigated 3. Issue in prior ct was necessary for ct's judgment 4. Mutuality Doctrine (non-mutual collateral estoppel allowed) a. Defensive nonmutual estoppel (Blonder Tongue) P-----> D1 (P loses) P----->D2 (new D pleads C.E.) b. Offensive nonmutual estoppel (Parklane) P1----->D (D loses) P2----->D (new P attacks D invoking C.E. to establish issue agianst D) CLASS ACTION Rule 23 1. Prereqs a. Size - so large that joinder of indiv members impractical b. Common Qs - Q of law or fact common to the clas c. Typical claims - typical of those of the class d. Fair representation - fairly and adequately protect the interests of the class 2. Categories Rule 23 p.106-108 in green book a. Rule 23(b)(1) Prejudice i. Rule 23(b)(1)(A) ii. Rule 23(b)(1)(B) b. Rule 23(b)(2) Injunction c. Rule 23(b)(3) Damages 3. Notice pg. 107 4. Fed Q - fine 5. Diversity a. Min Diversity b. Amount in Controversy = $5 million or one meets the $75,000 (Exxon Mobile)

COLLATERAL ORDER DOCTRINE 1. Cohen a. Conclusively det the disputed Q b. Resolve important issue completely sep from merits of action c. Be effectively reviewable on appeal at final judgment

Personal Jurisdiction
Wednesday, April 20, 2011 8:54 PM

Policy
Tuesday, May 10, 2011 5:28 PM

PJ - geographical limitation bc of basic fairness SMJ - limitation on Ct's authority to hear generic types of cases Diversity - prevent discrim of out-of-staters Rule 4(k)(1)(A) - eliminate forum shopping Venue - protect from inconvenient litigation Erie - 1) gradual accumulation of CL so that all state Ct judges would eventually follow same law, 2) stop forum shopping in favor of out-of-stater, 3) judges can't make law Offensive Collateral Estoppel - 1) taking advantage of another P's victory to establish crucial issues w/o trial may lead to P's "wait and see" until other P does work. 2) party might not have litigated the issue aggressively in first action if stakes were small or forum inconvenient, 3) may not have been possible for the losing party to litigate effectively in the first action if the procedural rules of the ct that decided the first case were more restrictive than those of the ct hearing the second, 4) one or more prior inconsistent judgments on the issue may suggest that it would be unfair to give conclusive effect to any one of them