Chris Gastardi

Outline: Civil Procedure IProfessor Martins I. Overview of Procedure A. WHERE CAN THE SUIT BE BROUGHT? 1. Subject matter jurisdiction a. State Courts vs. Federal courts o Domicile determined by Physical Presence and intent to remain in state ii. Federal Courts o Federal courts have limited jurisdiction o Prescribed by Constitution - Article III, Section 2 o Congress can prescribe areas of jurisdiction 28 U.S.C. 1331 and 1332. b. Diversity Jurisdiction i. P can file in federal or state court; D can petition for removal to Federal court if P could have originally brought it in Federal court

Hawkins v. Masters Farm, Inc. (Ps estate tried to argue that he was not under Kansas jurisdiction, as was D, but rather Missouri) 2. Personal Jurisdiction a. Federal court in a state has jurisdiction over whomever state courts there have jurisdiction over. Rule 4 (k)(1)(A). 3. Venue a. Either in federal district court where D. lives or where incident/contact occurred, or b. In state general district court where D lives or event happened

Chris Gastardi

4. Service of process i. Waiver of service- Mail D the complaint. If D mails return form back, suit can proceed. ii. Service of summons (More expensive) If D wont cooperate, lawyer drafts summons, has court clerk seal it, then it is served, by private process servers or federal marshal. B. STATING THE CASE 1. The Lawyers Responsibility Rule 11 Bridges v. Diesel Service, Inc - Plaintiff filed an action for employment discrimination under ADA. D lawyer moved for sanctions after court dismissed claim without prejudice for failing to file for relief with EEOC before coming to court. 2. The Complaint a. DEFINITION: A short, concise statement informing D of incident being charged Bell v. Novick Transfer Co. D moved to dismiss suit because complaint fails to state a claim against the defendants upon which relief can be granted. Asked for dismissal, and alternatively for more complete statement of the charges. RULE: Short statement is all thats required (Rule 8). The Response Motions and Answer b. Two possible actions: i. Pre-answer motion (Rule 12 (b). [b 1-7] Lack of subject-matter jurisdiction Lack of in personam jurisdiction

Chris Gastardi

Improper venue Insufficiency of process Insufficiency of service of process Failure to state a claim on which relief can be granted Failure to join a party under Rule 19. ii. Answer Denial (Rule 8 (b) Affirmative defense (Rule 8 (c) Third party claim Counterclaim Rule 13 a. Compulsory counterclaim - Rule 13 (a) b. Permissive Counterclaim Rule 13 (b) Crossclaim: Rule 13 (g)

C. PARTIES TO THE LAWSUIT 1. Permissive and Compulsory Joinder c. Permissive Joinder- Any plaintiff or defendant involved in the same action may join Rule 20 d. Compulsory Joinder If person was involved in the incident now at bar, and is needed for justice, the court may order him in. Rule 19 Bridgeport Music, Inc. v. 11C Music - Music copyright infringement case; 477 different occurrences. RULE: Permissive Joinder is circumscribed by two requirements: o A common question o transactional relatedness Rights in question must stem from same transaction, not multiple similar ones.

2. Intervention Rule 24 a. Intervention of right- Rule 24 (a) b. Permissive Intervention- (Rule 24 (b)

Chris Gastardi

3. Class Actions Rule 23 What rules for a class action? One or a few parties represent a large class. D. FACTUAL DEVELOPMENT DISCOVERY Rule 26 Dont have to prove admissibility, only reasonably calculated to lead to discoverable evidence. Butler v. Rigby D filed notice of deposition on Ps medical providers, AMG and MHC. Sought evidence related to numbers of patients involved in litigation, involved with Ps lawyer, contracts between doctor/patient/attorney, and a computer printout of current and past patients. RULE: Everything was admissible except lists of current and past patients, which were privileged. E. PRETRIAL DISPOSITION 1. Summary Judgment Rule 56 a. Not for weighing evidence; rather, it determines if there is any evidence to weigh. If there is no question of fact, but only of law Rule 56 (c). 2. Other pretrial motions: a. Default judgment b. Dismissal c. Voluntary dismissal Houchens v. American Home Assurance Co. Ps husband disappeared while on a trip overseas. Virginia law allows presumption of death if a person is missing seven years. Ps husband had an accidental death insurance policy. RULE: presumption of death is not presumption of accident (no statutory authority on that point). Americans motion for summary judgment granted. F. TRIAL

Chris Gastardi

A. Jury Selection Rule 47 a. Parties may challenge jurors for cause, and each has a certain number of peremptory challenges Rule 47 (b) B. Arguments a. Opening Statements b. Plaintiffs case-in-chief Each witness is called, examined and cross-examined. In some instances, questioning may extend into redirect testimony, then recross. Then P rests. c. Now, D may move for judgment as a matter of law, or directed verdict. i. Directed verdict Even if all Ps evidence is true, theres still no right of relief Rule 50 (a) d. Defense case: Again, examination, cross, redirect, recross. Then D rests e. P can move for directed verdict, though its rarely granted. Rule 50 f. P now rebuts D, and D rebuts P g. Either party may now move for judgment as a matter of law. Rule 50(a). Judge may rule that there is simply no way a reasonable jury could find for one party (preempt the jury). h. Jury returns verdict, and trial ends i. Within ten days of an adverse verdict, the losing party can move for judgment n.o.v., or a new trial, or both. Rule 50(b), Rule 59. j. Final chance for losing party Move to set aside the judgment Rule 60(b)- Very narrowly drawn; only things like fraud would be sufficient reason.

Norton v. Snapper Power Equipment Strict liability case for lawnmower injury. Jury found for P; judge granted judgment n.o.v. for D.

Chris Gastardi

RULE: while D may have had majority of evidence, if P had any evidentiary case at all, j.n.o.v. was invalid. Reversed.

G. FORMER ADJUDICATION Res Judicata (Something adjudicated). = You cant just keep bringing a case, or defense, after judgment

Rush v. City of Maple Heights Plaintiff sued the city for property damages in a motorcycle accident, alleging negligence for not repairing road. She won, then sued for personal injury out of the same incident. RULE: a defendant may maintain only one action to enforce his rights existing at the time such action is commenced. A single wrongful act brings only a single cause of action. H. APPEALS Apex Hosiery v. Leader D filed appeal of order for production of documents. RULE: Court ruled that it had no jurisdiction. Interlocutory orders are not appealable. Only orders that are DISPOSITORY; that dispose of all parties and issues in the case. If an attorney raises the order as an issue, it can become part of the grounds for an appeal AFTER the trial is complete.

PART B- THE PROCESS OF LITIGATION V. INCENTIVES TO LITIGATE A. Substitutionary Remedies- Object is to make P whole Some substitutes can be measured in market, some cannot. 1. Compensatory Damages- In Contracts, party can recover only to Expectation: In Torts, D is liable for all harm caused a. Economic Damages To compensate P for measurable losses

Chris Gastardi

b. c. d. e.

Pain and Suffering Emotional Distress Harm to reputation, Etc.

2. Liquidated, Punitive and Statutory Damages a. Liquidated i. Contractually agreed-on figure beforehand, to be paid by any breaching party. Must not be out of all proportion to actual damage b. Statutory i. Minimum damage awards to encourage punishment for bad behavior where actual damages would be small sometimes coupled with attorneys fees c. Punitive aimed at punishment, deterrence

State Farm v. Campbell Jury returned a compensatory award of $1 million and a punitive award of $145 million. RULE: punitive damages must bear some relation to the harm suffered. A single digit ratio (9-1 or less) fits within due process, according to Justice Kennedy. To award more than that might be necessary in some extraordinary circumstances, but seldom.

Sigma Chemical Co. v. Harris P sued D for breach of contract (they also sued in tort, but thats another issue) in an employment agreements non-compete clause. RULE: The main prerequisite to obtaining injunctive relief is no adequate legal remedy. Court applied the irreparable injury test, and also applied a balancing test, of harm to P vs. harm to D if injunction were granted. The Court granted injunctions for Sigma. B. DECLARATORY RELIEF used when neither damages nor a specific remedy helps. A Declaratory Judgment is a binding judgment that neither orders nor enforces relief.

Chris Gastardi

- Rule 57. Declares a partys rights without coercion. Cannot be used for hypothetical situations. Can be used along with legal or equitable remedies. C. FINANCING LITIGATION

Evans v. Jeff D. Legal Aid sued Idaho on behalf of the class of handicapped children in institutions, seeking better care. Legal Aids attorney, Johnson, made no provision for legal fees. State offered a settlement with no attorneys fees; the class accepted. RULE: The law only ALLOWED fees to be assessed by the courts; it did not require them; the District Court did not abuse its discretion in approving the settlement. Buckhannon Board and Care Home, Inc. v. West Va. Dept of HHR The Home sued the state trying to force a policy change. Rather than fight it, the state legislature changed the policy as the home desired, and the case was dismissed. The Fees Act decrees that legal fees may be in order for the prevailing party, and the Home sued, trying to establish itself as the prevailing party, since the state gave up. RULE: Unlike Evans, where the Court approved a settlement, in this case, the suit was dismissed with no judgment. No prevailing party; no lawyers fees.

D. PROVISIONAL REMEDIES 1. Preliminary Injunctions and Temporary Restraining Orders: The Basic Problem William Inglis and Son Baking Co. v. ITT Continental Baking Co. Inglis sued Continental, et. al. for predatory pricing. RULE: Appeals court adopted an alternative test, as spelled out by the 2nd Circuit, that P must prove either irreparable harm and probable success on the merits, or, that serious questions are raised and the balance of hardships tips sharply in his favor. 2. Provisional remedies and due process

Chris Gastardi

Fuentes v. Shevin Fuentes purchased an appliance from Firestone on a payment plan, along with a service contract. Firestone went to Fuentes home and repossessed the appliance, without notice to Fuentes. RULE: due process demands both Notice and Opportunity for a Hearing. When the state is an actor, such repossession must allow both Notice and Hearing.

JURISDICTION I. Jurisdiction and the Constitution A. Article IV Section 1 requires Full Faith and Credit provides that the various states must recognize legislative acts, public records, and judicial decisions of the other states within the United States. B. 14th Amendment incorporates the Due Process Clause upon the states. C. Supremacy Clause Federal law is supreme over state law; thus federal and state courts are required to enforce the federal statute, whether stated law agrees or not. But where no federal law applies, the federal courts respect the laws of the several states.

II.

PERSONAL JURISDICTION (Requires Basis (Peanut Butter) & Notice (& Jelly)

A. ORIGINS Pennoyer v. Neff Overview: - State has jurisdiction over people and land within its borders. - 14TH Amendment overrules and requires Due Process before a state can deprive anyone of life, liberty or property. - Due process requires Notice and opportunity for Hearing before any such deprivation. - Mitchell did not attach Neffs land at the beginning of the suit. Neff did not own the land at the time Mitchell instituted the action. Court had no basis for jurisdiction.

Chris Gastardi

10

- Two Categories of Personal Jurisdiction o Personal In personam o Property In rem a. Pure/True in rem: main purpose is to adjudicate competing legal interests in the property in question (e.g. quiet title action & mortgage foreclosure). b. Quasi in rem: dispute not related to defendants propery; actions brought for purposes other than determining competing rights to property.

- Establishing Personal Jurisdiction o Served in State o Domicile 1. Citizenship is established through domicile, which is established by physical presence and intent to remain. o Consent 1. Express: by presence (showing up at court) or designating a representative 2. Implied: by state requirement that business within that state constitutes consent o Long Arm Statute o In Rem Notice (must be reasonably calculated and include an opp. to be heard) 1. For in personam, person must be served within state 2. For in rem, seizure of the property would constitute notice NOTE: Doctrine of Collateral Attack: A foreign resident can attack in a second collateral proceeding a judgment rendered without jurisdiction.

Chris Gastardi

11

B. The Modern Constitutional Formulation of Power

(1) Redefining Constitutional Power Intl Shoe v. Washington Primarily a specific jurisdiction case. I. Presence in a state now need not mean a physical person. A corporation may be present through minimum contact within a state, enough that suit brought there does not offend fair play and substantial justice. II. Minimum contact is defined as continuous and systematic, as contrasted to isolated and irregular. Unlike Pennoyer, mere physical presence is not enough; Minimum Contact Test a. Contacts: first the court decides if there are any contacts at all between the defendant and the forum state. If there are no contacts, the analysis stops, and there is no personal jurisdiction. b. If there is at least one contact, the court determines whether the claim arises out of the contact(s).

III. Difference between General and Specific jurisdiction RULE: 1. General- If one has contacts so substantial and of such a nature, he may be liable for suit within a state for anything, even unrelated to those contacts. 2. Specific- If contacts are more limited, one can only be sued for actions arising out of those specific contacts McGee v. Intl Life

Chris Gastardi

12

Contracts with a substantial connection with a state are enough to force liability CONTRAST WITH: Hanson v. Denckla - The unilateral activity of those who claim some relationship with a non-resident cannot satisfy the requirement of contact with the foreign state. - It is essential that a party purposely avails itself of the privilege of conducting activities in a state, for that state to have jurisdiction. - Defendant purposefully avails self of privilege of conducting activities in the forum state, thus invoking the benefits and protections of the forum state.

(2) ABSORBING IN REM JURISDICTION Shaffer v. Heitner The Court held that if a direct exercise of in personam jurisdiction would be unconstitutional, then it would be equally offensive to fair play and substantial justice to use quasi in rem as nothing more than a tool to gain that jurisdiction. - Due process requires enough correlation between property you're attaching and your lawsuit, to satisfy "substantial justice and fair play." Five ways to get in personam jurisdiction- Presence, Domicile, Consent, Implied Consent, Specific Jurisdiction By definition, the dispute is about the land/property located in the state and therefore a highly related contact under sliding scale of Shoe and alone is enough; thus Prof M uses in rem as a separate root of PJ, but technically still must cite to Shoe and explain that it was a strong, directly related contact and thus satisfies due process

The practical effect of Shaffer is that, while a state can still exercise in rem jurisdiction over land itself, quasi in rem is basically dead, except in unique cases (international Ds, etc.).

(3) SPECIFIC JURISDICTION: THE MODERN CASES Worldwide VW v. Woodson

Chris Gastardi

13

Ds do not AVAIL THEMSELVES of Oklahoma law. They make no attempt to do business in OK or with its residents. The chattel cannot be the sellers agent for service of process everywhere it goes. - Foreseeability alone is not Purposefulness. - A contact is considered only if it is the result of purposeful activity. The Court has restated this notion as purposeful availment of the benefits and protections of forum law. - Fairness Factors: a. Burden on Defendant: considers distance defendant must travel and other burdensome factors on defendant. b. Interest of the State: only if parties are from forum state or dispute directly affects forum state. c. Interest of Plaintiff: satisfied if plaintiff is from the forum or if the forum is a convenient place to try the case b/c of the availability of witnesses or other evidence. d. Efficient Resolution: inefficient if case involving multiple parties must be split up and litigated in various locations; if the chosen forum is the only place that all claims can be heard, this factor supports jurisdiction. e. Furthering Social Policies: if the alternate forum does not recognize plaintiffs claim, refusing to exercise jurisdiction frustrates the policy underlying the substantive law. This is most likely to be an issue when plaintiff is forced to refile in a foreign court. RULING: The Ds conduct and connection with the forum state must be such that he should reasonably anticipate being haled into court there. He must have Predictability. Mere unilateral activity of those who claim some relationship with a nonstate D cannot satisfy the requirement of contact with the forum state. (Hanson v. Denckla). Note: lack of fairness will not defeat jurisdiction unless there is a very strong showing of unfairness.

Asahi Metal Industry Co. v. Superior Court (OConnor)

Chris Gastardi

14

Asahis sales of valves that eventually made their way into the U.S. composed less than .1 percent of the companys sales. The High Court ruled that minimum contact must be based on an act of the D. Must be a purposeful act toward the forum state. The Court leaned heavily in favor of the rights of international Ds not to be haled into U.S. courts frivolously. - O Connor adds Reasonableness into the mix along with substantial justice and fair play. - Even if minimum contacts exist, still need to show that exertion of personal jurisdiction is fair. - 4/4 split on stream of commerce. The Court split on the question of whether the mere act of selling goods outside the forum state that will likely be imported into the forum state for resale suffices to support jurisdiction. Split decision was over premise that mere awareness that the stream of commerce may sweep goods into the state after they leave the defendants hands suffices to satisfy purposeful availment. Exam note: There are 2 competing approaches to stream of commerce. They are not either or or both. Rather, a lower court will adopt one of the two approaches. Thus, in private practice, you need to research which of these 2 approaches your circuit applies to a stream of commerce issue and work through it. On my exam, you need to discuss both approaches, unless the exam tells you which one that circuit applies (but do not count on it). You would separately analyze each approach (if this issue applies) and then reach a conclusion under each approach (which could be the same or a different result from each other). Substantial justice and fair play becomes not just a synonym for minimum contacts, but a standard in itself.

RULING: The placement of a product into the stream of commerce, without more, is not an act purposefully directed toward the forum state

Burger King Corp v. Rudzewicz

Chris Gastardi

15

The Court found that an out-of-state D must have fair warning that their actions could subject them to suit in the forum state. The suit must arise out of their purposeful contacts with the state. The Court held that the suit against R directly arises out of Rs contact with the forum state. R had deliberately reached beyond Michigan and negotiated a long-term contract with a Florida corporation. His relationship with the Florida company was not random, fortuitous or attenuated. R had purposefully availed himself of Florida protection. - Basically, because R had extracted concessions from BK, and was an experienced businessman, he was sophisticated and powerful enough to hold his own in a bargain with BK. ** Minimum contact is not the same for every defendant!! Music Makers v. Sarro -PL = Music Makers Holdings (Md.) Opens music schools in Md. And DC -DEF = Maria Sarro (NY) runs summer music camps in NY -PL sued defendant alleging trademark violation over the use of the mark, Bach to Rock. -Suit brought in U.S. District Court for the District of Md. Long-Arm Statute: state legislature grants its court personal jurisdiction over non-resident. a. grants personal injury if defendant transacts business here b. causes tortuous injury here by act/omission in the state c. causes tortuous injury outside state if regularly conducts or solicits business in this state If the LAS does not apply, stop there. If LAS does apply, meet due process? (1 of 5 roots) Internet Cases 1.) Passive site (info provided only) -rarely jurisdiction; unless site specifically directed at other state, i.e. defame person in another state 2.) Active/Interactive site (allows 2 way communication; orders) -it is a contact that just may trigger jurisdiction under min. contacts -knowing and repeated sales can trigger PJ 3.) Semi-Interactive site (can communicate, but not buy/sell) -look at totality of circumstance to see if PJ What did Md. d. ct. adopt?

Chris Gastardi

16

-Must (1) direct electronic activity into state (2) with manifest intent of engaging in business, and (3) that activity creates a cause of action (citing 4th Cir.) Effects Test (alt. to purposeful availment4th Cir. Elements of Effects Test) 1. Intentional tort 2. PL felt brunt of harm in forum, such that focal point of harm, and 3. DEF expressly aimed tortuous conduct at forum such = focal point of tort activity

(4) GENERAL JURISDICTION Coastal Video Communications Corp., v. Staywell Corporation Coastal video sought general jurisdiction over Staywell Corporation. Coastal sought a declaratory judgment that it's "safety zone" handbook did not infringe on Staywell's "safety zone" material. The contacts between the plaintiff and the forum state must be fairly extensive. Contrast with: L.L. Bean. Case. - extensive marketing and sales contacts in California; about 6% of its annual business - highly interactive website, shipped very large numbers of products to California - maintained ongoing contact with numerous vendors in the state. - Contacts were consistent, ongoing, and over a period of years. Substantial, continuous, and systematic. - The court ruled that the commercial activity "approximates physical presence." Transient jurisdiction (Tag J.) Burnham V. Superior Court RULING: Jurisdiction based on physical presence alone constitutes due process, and as long as the defendant individual is physically present within the state, there is no requirement for "minimum contacts." Mere presence and service with process establish jurisdiction. (Pennoyer is still effective for an individual present within a state).

Chris Gastardi

17

CONSENT Carnival Cruise Lines v. Shute While courts are typically skeptical of adhesion contracts (take it or leave it contract between parties of unequal bargaining power) this forum selection contract was approved. The court held that the Shutes had ample NOTICE, and ample opportunity not to accept the contract. RULE: forum selection contracts freely consented to by the parties will be enforced as long as they comport with substantial justice and fair play.

THE CONSTITUTIONAL REQUIREMENT OF NOTICE Mullane v. Central Hanover Bank and Trust Central Hanover was attempting to close down a large trust fund and petitioned the court for a declaratory judgment that it had handled the funds responsibly. The court determined that notice reasonably certain to reach most of those interested in objecting is likely to safeguard the interests of all, since any issues affecting the interests of the unknown beneficiaries would likely be raised by the known beneficiaries. Ruling: Due process requires NOTICE reasonably calculated to apprise interested parties of the action and afford them an opportunity to present their objections. The notice must reasonably convey the required information, and afford a reasonable time for those interested to make their appearance.

Rule 4 (d) - Waiver of service (not notice by mail). If D does waive service, he gets additional time to answer the complaint - 60 days, rather than 20. Rule 4 (k)(1) states that service establishes jurisdiction over defendant subject to personal jurisdiction. If the defendant is not otherwise subject to personal jurisdiction, service of process cannot alone subject him to jurisdiction SELF-IMPOSED RESTRAINTS ON JURISDICTION: LONG-ARM STATUTES, VENUE, AND DISCRETIONARY REFUSAL OF JURISDICTION

Chris Gastardi

18

Gibbons v. Brown A two-pronged test. - 1. plaintiff must establish jurisdiction sufficient to bring a defendant with in the long arm statute. - 2. plaintiff must prove sufficient "minimum contacts" to comply with due process as in International Shoe. RULING: A prior lawsuit in the forum state cannot indefinitely subject a party to the states jurisdiction in a separate suit. Contrast with: Adam v. Saenger Saenger could not duck judgment on a counterclaim, once he had begun the original action in the forum state.

VENUE - 28 U.S.C. 1391 (a): Where a defendant resides; or a substantial part of the events occurred; or a judicial district in which a D. may be found, if there is no other jurisdiction where the suit may be brought. (c): a Corporation is deemed to reside wherever it is subject to personal jurisdiction (d): an alien may be sued in any federal judicial district

Dee K Enteprises, Inc. v. Heveafil Sdn. Bhd. Two American corporations sued various foreign manufacturers and their U.S. agents in an antitrust action. The court found that the federal long arm statute gave personal jurisdiction and a service of process was compatible with due process. The remaining question was venue. RULING: Since an alien may be sued in any district any federal court would have had jurisdiction over the foreign defendants. However, for the American defendants, venue was only proper in any judicial district where a defendant resides, a district in which a substantial part of the incident occurred, or a judicial district in which any defendant may be found.

Chris Gastardi

19

- Each state must have passed a statute that gives its courts jurisdiction over defendant. Constitutional provision alone is not enough.

DECLINING JURISDICTION: TRANSFER AND FORUM NON-CONVENIENS

Piper Aircraft v. Reyno

TRANSFER 28 U.S.C. section 1404, 1406, and 1631. 1404: Permits transfer to a different judicial district, for convenience of parties and witnesses. 1406: allows transfer or dismissal from a district in which venue is improper 1631: when venue is proper, but jurisdiction is lacking, permits transfer to a court with jurisdiction.

SUBJECT MATTER JURISDICTION - In practice, state and federal Courts generally have Concurrent Jurisdiction - In all cases involving conflicts between states, the Supreme Court has original jurisdiction - a federal court generally may not hear state cases. State courts may hear federal cases - **** State courts are coequal; federal courts are not superior. Coequal, Coexistent, Concurrent courts. Equal authority.

FEDERAL QUESTION JURISDICTION Louisville and Nashville Railroad v. Mottley Mr. and Mrs. Motley were injured in a railway accident. To settle their claims, Railroad gave them a lifetime pass good for free transportation on the line, and later canceled the pass. RULING: A suit arises under the Constitution and laws of the United States only when the plaintiff's statement of his own cause of action shows that it is based upon those laws or the Constitution. What the Ds defense might be, whether under federal law or not, is irrelevant.

Chris Gastardi

20

The Mottley's breach of contract claim was a state law issue, not a federal issue; thus there was no federal question jurisdiction. -the requirement of subject matter jurisdiction is held to be so fundamental that court is required to raise the issue sua sponte (on the courts own motion) and dismiss it if it finds a lack of jurisdiction.

DIVERSITY JURISDICTION Sandbagging- knowing that court made an error and not raising it at the time. The one exception is, at ANY TIME I feel there's no subject matter jurisdiction, I can raise it. - (Because state courts have General Jurisdiction, subject matter jurisdiction is only an issue in federal courts). -

Redner v. Sanders Redner, a U.S. citizen who resided in France, sued individual and corporate defendants in New York. 28 U.S.C. 1332 (a)(2), grants federal courts jurisdiction between citizens of a state and subjects of a foreign state. The court distinguished between Ps residence in France, and his citizenship in the United States. The P then tried to argue that he was domiciled in California RULING: A person is a citizen of a state of the United States within the meaning of 28 U.S.C. 1332 if he is a citizen of the United States AND is domiciled within the state in question. - Diversity of citizenship is determined at the commencement of the action - Cases with an alien on either side, are not completely diverse - partnerships are not considered as entities but as collections of individuals; thus the citizenship of each of the members of a partnership must be considered. - A Corporation has dual citizenship: where it is incorporated and where it has its chief place of business

Saadeh v. Farouki Mr. F., a Jordanian citizen residing in Maryland, was in court with Mr. S., a Greek citizen residing in Maryland. By the time suit was filed, Mr. F. had achieved permanent resident

Chris Gastardi

21

immigration status in the United States. While the litigation was underway, Mr. F. became a citizen of the United States. COURTS HAD ALWAYS HELD THAT THE DIVERSITY STATUTE DID NOT CONFER JURISDICTION OVER A LAWSUIT INVOLVING ALIENS ON BOTH SIDES. RULING: Despite the plain language of 1332 (a), the alienage amendment clearly appears to have been intended only to eliminate subject matter jurisdiction of cases between citizens and aliens living in the same state. There is no reason to conclude, however, that the amendment was intended to create diversity jurisdiction where it did not previously exist.

SUPPLEMENTAL JURISDICTION Jin v. Ministry of State Security Falun Gong practitioners sued China Television Corporation and the Ministry of State Security under civil rights law and RICO, as well as for defamation (state law). The Ps asserted that the court has discretion to assert supplemental jurisdiction over the defamation claim. RULING: The court created a two-part test. First, all claims must derive from "a common nucleus of operative fact." Second, the interest of judicial economy, convenience and fairness must support the exercise of supplemental jurisdiction. But it shoots the case down under statute of limitations. - If a plaintiff has either a federal question OR diversity jurisdiction, as an independent claim; he WILL get his day in federal court - ****if Diversity Jurisdiction applies, Supplemental Jurisdiction is irrelevant - as long as plaintiff has any federal claim, even if it is minor and there are several major state questions involved, the federal court MAY take supplemental jurisdiction - ***supplemental jurisdiction is never available to get your original claim into federal court alone. P must assert at least one independent claim - *** supplemental jurisdiction is not needed if there is a standard, independent basis of jurisdiction over the claim. If you can get into court without supplemental jurisdiction you won't use it. (This may be a trick question on EXAM ). 28 U.S.C. 1367

REMOVAL

Chris Gastardi

22

28 U.S.C. 1441 Any civil action brought in a state court of which the district courts have original jurisdiction, may be removed by the defendant to the district court of the United States that has jurisdiction where the state court involved has jurisdiction.

Caterpillar Inc. v. Lewis Lewis, a resident of Kentucky, filed the lawsuit in Kentucky state court, after sustaining injuries are operating a bulldozer. RULING: once a diversity case has been tried in federal court, with rules of decision supplied by state law under the Erie regime, considerations of finality, efficiency and economy become overwhelming. Held for Caterpillar.

ERIE Swift v. Tyson

1652: The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil courts in the actions of the United States, in cases where they apply. - Presumption: State law should apply - You want to avoid Forum Shopping Story: Transcendental law. UNIFORMITY. The Common Law is not different across the border in another state. State law can apply if its a local, specific issue. Lower court judges DO NOT MAKE LAW. Legislation only makes law. Lower court decisions are but EVIDENCE of what the laws are; not laws themselves. Court will be bound by state LEGISLATION, and by state judge-made law on matters of peculiarly local usage. So in New York, if a party cant get into federal court, debt forgiveness is not consideration; if they CAN get into federal court, it IS. So, in the interest of uniformity, he has

Chris Gastardi

23

destroyed uniformity. So Story (perhaps unintentionally) weakens states rights. Plaintiffs cant get equal treatment under law; depends on Fed. v. State courts. ERIE Justice Brandeis I. Swift did not produce uniformity Produced grave discrimination - Unequal protection of law - No equality of litigants - Different kind of justice if I CAN get into federal court (against person from different state) than if I CANT. Constitutionalizes the reversal of Swift Says Swifts effects are unconstitutional (Cant cite to the Constitutional provision that says so). He talks the Constitutional talk without ever citing it specifically. Talks about equal protection without ever trying to reference the 14th Amendment (which only restricts the states, and Brandeis is talking about federal courts). - He could have based his decision on statutory construction; simply said that Storys reading of the statute was wrong. - Instead, he rewrote/changed the Constitution; Now its VERY hard for the peoples representatives to change the law. Theres a new Basic Fundamental Right. - While claiming to enhance state power at the expense of federal government, he has actually set the pattern for the federal court to undo the will of the people through the legislature. There is no federal common law; so 2d Circuit must send it back to trial for determination under State Law.

II.

III.

Justice Reeds concurring opinion Says Brandeis need not have attacked Swift on a Constitutional basis- He could have simply said that Story misread the Rules of Decision Act, and were reinterpreting it correctly. Reed can only find the determination that Congress could only declare Procedural law, while state law would control in Substantive law. Brandeis: Theres NO federal common law; Congress cannot declare substantive rules of common law in states. AND COURTS cannot declare FEDERAL common law. Congress can still promulgate FEDERAL common law. He declares that because Constitution does not grant STATE common law powers to Congress, then the exercise of those powers is Unconstitutional. TAKE THIS OUT OF CASE

Chris Gastardi

24

1. THERE IS NO FEDERAL COMMON LAW (as Story envisioned it federal judges applying transcendental common law to states). 2. Neither Congress or Courts have power to declare substantive common law to STATES! (Congress can declare Procedural law). States and their courts may apply their own substantive law. Oct. 24 NATURAL LAW IS GONE Erie-Legal positivism- Law IS, OUGHT to be what authority says it is. Legal realism You might as well admit that whats declared IS law. Judges are lawmakers just as legislators are. - Story Law through reason Judge must understand, identify the law. Notions of reason, right. - Brandeis/Holmes Law is power, will - Holmes (p.226) Law does not exist without some definite authority behind it. The authority and only authority is the State. State courts establish, declare, promulgate the law. Frankfurter in Guaranty Trust Erie was not an effort to formulate scientific legal terminology; its a policy ruling. Philosophy, not science. You cant just read Erie and get a confident rule for action. But Erie was at least right that federal courts had no power to overturn state courts; and that feds ought not to take power not granted by Constitution; defended states rights.

Guaranty Trust Co. v. York Second Circuit allowed a suit that was outside the New York statute of limitations.

Chris Gastardi

25

Frankfurter jumps on Reeds concurring opinion in Erie, that federal courts have power over Procedure, even if not Substantive. Thus, as far as the outcome is determined by procedure, it ought to be the same in either federal or state courts. Frankfurter says the statute of limitations SHOULD have applied; it is not procedural; its substantive. The question is whether such a statute concerns merely the manner and the means *form and mode] by which a right to recover, as recognized by the state, is enforced, or whether such statutory limitation is a matter of substance in the aspect that alone is relevant to our problem, namely, does it significantly affect the result of a litigation for a federal court to disregard a law of a state? GUARANTY TRUST V. YORK OUTCOME DETERMINATIVE TEST - Guaranty says if a state substantive law applies, state law prevails. (Constitutional concern) - If its merely form and mode, federal procedural law prevails. (Concern with forum shopping, litigant equality). - If its outcome-determinative, (result in federal court would be substantially different than state court) state law prevails. Subsequent Cases: a. Ragan v. Merchants Transfer & Warehouse Company - State law, rather than federal, would determine when an action was commenced for purposes of satisfying the state statute of limitations b. Cohen v. Beneficial Indus. Loan Corporation - Federal diversity court must apply a state statute allowing a Corporation to require plaintiff to post a bond for the expenses of defense of the shareholders derivative suit c. Bernhardt v. Polygraphic Co. of America - Narrowly construed the Federal arbitration statute and held that state law concerning enforceability of arbitration agreements should control in a diversity action d. Woods v. Interstate Realty Co.

Chris Gastardi

26

A state statute closing the doors of the state courts to out-of-state corporations that had not qualified to do business by paying taxes in Mississippi, would close the federal courts to those same corporations.

Byrd v. Blue Ridge Electric Cooperative Court notes that Erie has been constitutionalized (10th Amendment). Federal court MUST follow state substantive law. Brennan says the S.C. law is merely form and mode. If its procedural, federal law can supersede. Thus, the S.C. law (that the question whether an injured workmans claim is within the Commissions jurisdiction is a matter of law for the JUDGE to decide, rather than a matter of fact for a jury), is a mere issue of form and mode. Brennan: If we follow the state system, it disrupts the federal system, where we place much more emphasis on jury trials. - We must BALANCE the federal policy favoring jury decisions of disputed fact questions with the state rule/policy. Outcome is no longer the only consideration. There are affirmative countervailing considerations.

(MODIFIED OUTCOME-DETERMINATIVE ANALYSIS): Is the federal or state law interest more important in this case? If the federal interest trumps the state, EVEN IF its outcomedeterminative, FEDERAL LAW CAN PREVAIL!! SCALE: 1. On one end, IF ITS a state created right thats substantive or BOUND UP IN such a right, 10th Amendment REQUIRES state supremacy. 2. At the other end, if its purely procedural, federal law applies. 3. In between, if its Form and Mode, then: - Is it outcome-determinative? - If so, is there a countervailing federal interest; can it override state interest?

Chris Gastardi

27

DECONSTITUTIONALIZING ERIE Hanna v. Plumer Says Supremacy Clause gives Congress the power to set rules for federal courts. Congress (through the Rules Enabling Act) told Supreme Court to write rules (Article III). Federal Rules of Civil Procedure. Massachusetts rule demanded service of process to the defendant himself. Federal Rules allow service to D or his agent Substitute Service (Rule 4). Warren: When a Federal Rule would apply, if it satisfies 2072 (b) (Such rules shall not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury), the federal rule supersedes. - If we have a federal rule On Point, and it satisfies 2072 (b), IT APPLIES, SUPERSEDES. If not, look at Erie. - The Erie rule has never been invoked to void a federal rule. Rather, each such case held that the federal rule was not on point. OUTCOME DETERMINATIVE ANALYSIS is no longer the key. Outcome-determinative analysis was part of the DISSENT in Erie. - Expands Brennans reasoning in Byrd that Federal rules can preempt state rule if theyre more important. Choices between federal and state rules are not to be decided on automatic, litmus-paper criteria. Warrens reasoning IN THIS CASE, (thinking case-by-case) is that the Plaintiff had not even tried to use the rules to get into federal court. He had intended to serve the D PERSONALLY, but when D was not home, he filed with Ds wife. He already had a federal case through diversity. Warren says that the POLICY in Erie was an attempt to avoid forum shopping and ensure litigant equality. P already HAD diversity and access to federal court. His substitute service was not an attempt to forum shop. D raised the Substitute Service issue in a motion to dismiss.

Chris Gastardi

28

Warren said the time point to focus on is not when the pretrial motions begin, but when service happens. When service happened, the service was no attempt to avoid Mass. Law to force the case into federal court. - Go to Hanna FIRST, then Erie. If we have a federal rule On Point, and it satisfies 2072 (b), IT APPLIES, SUPERSEDES. If not, look at Erie. Civ Pro 10-31 If its neither solely procedural or substantive (somewhere in between): A. Hanna 1. Is there a federal directive on point? (Constitutional, Statutory or Supreme Court rules) 2. Does it match 2072 (b)? If yes, Fed. law applies; If no, go to Erie. B. Erie Outcome determination/Substantive v. Procedural

Subsequent cases Burlington Northern Railroad v. Woods Alabama statute provided that if a defendant appealed a money judgment and lost on appeal, the successful plaintiff should be awarded an additional 10% on the judgment. Federal Rule 38 leaves discretion in the hands of the court. The court held that because Rule 38 was constitutional and conformed with 2072 (b), the federal law prevailed. Stewart Organization v. Ricoh Alabama refused to enforce a forum selection clause, which called for in Manhattan forum. 28 U.S.C. 1404 Allows transfer to any appropriate venue. Again, the federal law prevailed. Gasperini v. Center for Humanities started to move back toward deference to the states.

Semtek Intl, Inc. v. Lockheed Martin Corp.

Chris Gastardi

29

ISSUE: is the claim preclusion effect of a federal judgment dismissing a diversity action on statute of limitations grounds determined by the law of the state in which the federal court sits? - Defendant got the case into federal court, and got plaintiffs claims dismissed as barred by Californias two-year statute of limitations. P tried to bring the case in Maryland; the state court granted Ds motion to dismiss on the ground of res judicata. (The dismissal by the California federal court barred filing in Maryland, since the earlier appeal was dismissed on the merits). - P argues that the controlling case is Dupasseur v. Rochereau, which held that the res judicata effect of a federal diversity judgment is such as would belong to judgments of the state courts rendered under similar circumstances. Thus, since dismissal by a California state court would not be claim preclusion in Maryland, neither should dismissal by federal court in California. - D argues that the case is controlled by Rule 41 (b), which holds that a dismissal other than for a Rule 12 motion is an adjudication on the merits. Scalia: 1. Rule 41 (b) The meaning of On the merits has changed; in practice it now often covers procedural law as well as substantive, and federal court MAY NOT trump state substantive law 2. Broad interpretation of 41(b) would violate 2072 (b) Would extinguish a substantive right of a longer statute of limitations in Maryland 3. Would also encourage forum-shopping; parties wont want to lose a right that fed. courts would take away because of state law in one state. 4. States that an adjudication on the merits now just means a dismissal with prejudice. 5. Dismissal with prejudice bars the defendant from returning later to the same court with the same claim, but does not bar him from other courts. 6. The Court finds that the result decreed by Dupasseur continues to be correct in diversity cases, not Rule 41 (b). State, rather than federal, substantive law is at issue, and thus state law applies. 7. Thus, the law would be applied by state courts in the state in which the federal diversity court sits, is the governing rule. There is no federal interest in giving the California statute of limitations more effect in other courts that the California courts themselves could impose. 8. Thus, the Maryland court could indeed consider the case RULE: Dupasseur, which held that the res judicata effect of a federal diversity judgment is such as would belong to judgments of the state courts rendered under similar

Chris Gastardi

30

circumstances, still applies. Thus, since dismissal by a California state court would not be claim preclusion in Maryland, neither should dismissal by federal court in California. Dupasseur continues to be correct in diversity cases, not Rule 41 (b) (adjudication on the merits). State, rather than federal, substantive law is at issue, thus state law applies. (Scalia almost hints at Byrd- No compelling federal interest in Ca. law trumping Md. Law). Theres no GENERAL federal common law, But theres a body of federal court decisions, that must be considered. No overarching, natural law common law, but a specific, case law basis for courts to apply.

Chapter 6 PLEADING RULE 7 covers which types of pleadings: a. b. c. d. e. f. Complaint Answer Reply to Counterclaim Answer to Crossclaim Third party complaint Third party answer

Rule 8 (a) A Short and plain statement A pleading must do two things: - Invoke, at least by reference, a body of substantive law ( negligence, fraud etc.) - Sketch a factual scenario that, if shown to be true, falls within that body of law A Rule 8 (b) or (c) motion would be a defense to be raised at trial. A Rule 12 (b)(6) motion would be a pretrial motion to dismiss, for the judge to decide Rule 12(b) motions are questions of law; all could delay or end the lawsuit before trial

Haddle v. Garrison (S.D.Ga.) RULE: P was an at-will employee. Therefore he suffered no loss by being fired, and can make no claim that would entitle him to relief. Dismissed without prejudice.

Chris Gastardi

31

(11th Cir). Repeats Morast v. Lance reference from trial court- the employment is at will, Haddle has no claim. (High Court, 1998) - court says the phrase injury to person or property is not the key to 1985(2). Rather, the harm is not loss of at will employment, but unjustified interference with at will employment by a third party (the former employee who conspired with the current officers). The gist of the wrong aimed at in 1985 is not deprivation of property, but intimidation or retaliation against witnesses in court proceedings. The court rules in favor of Haddle.

Rule 8 (e) A party may state as many separate claims or defenses as he has regardless of consistency. The plaintiff could simultaneously deny that he ever entered into a contract and at the same time assert that he kept his side of the bargain. This is because pleadings come very early in the case before any discovery.

Walker v. Norwest Corp. Walkers attorney, Massey, filed a claim in South Dakota court, alleging diversity even though some of the defendants were also South Dakota residents The court slapped him with rule 11 sanctions. He appealed. RULE: The court responded that it was not the courts job to do Masseys research for him, and affirmed for sanctions. 11(c)(1)(B) the court, sua sponte, may enter the order for the rule 11 sanctions. Rule 11 sanctions may be applied against either a party or an attorney

Christian v. Mattel, Inc. Barbie Doll/attorney misconduct case RULE: the Ninth Circuit remanded the case to the district court, which upheld the halfmillion dollar sanctions against Hicks, this time only for the actual rule 11 violations.

Chris Gastardi

32

Fraud, mistake or claim for special damages needs more than a short and plain statement. Must be stated with particularity.

SPECIAL CLAIMS: REQUIRING AND FORBIDDING SPECIFICITY IN PLEADING Stradford v. Zrich Insurance Co. Dr. Stradford, a dentist whose property insurance had lapsed, filed fraudulent claims for $1.4 million. The dentist sued to collect the $1.4 million. Zrich counterclaimed, alleging fraud. The dentist moved to dismiss the counterclaim under rule 9(b), arguing that defendants had failed to state with sufficient particularity his alleged fraud. RULE: Zrich had not given the dentist sufficient notice of the grounds upon which he was charged. But courts will liberally grant leave to amend pleadings at justice requires (Rule 15), and defendant had already submitted an amended pleading, which the court accepted. Defendant moved for summary judgment, and the court granted. Rule 9 (b) for any claim of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge and other condition of mind may be averred generally. There are three different burdens that must be distinguished: 1. The burden of pleading 2. The burden of production 3. The burden of persuasion (proof)

Gomez v. Toledo P, a Puerto Rican police officer, alleged that he was fired from his job for outing two fellow officers who falsified evidence. The District Court granted defendants motion to dismiss for failure to state a cause of action, holding that Gomez had failed to prove his employer acted in bad faith. RULE: The P does not have to prove bad faith in governmental immunity cases. Bad faith was not an element of the claim, but rather an affirmative defense, to be raised by defendant.

Chris Gastardi

33

RULE 4 SUMMONS 4(d) Waiver of service 4(d)(2)(F) defendant has 30 days to return the waiver. If defendant does not waive service, he has only 20 days to answer (12(a)(1)(A). If he waives service he has 60 days. 4(k)(2) if a defendant is not subject to the jurisdiction of the courts of general jurisdiction of any state, but the exercise of jurisdiction is consistent with the Constitution, serving a summons is effective to establish personal jurisdiction over defendant. Rule 12 (a)(2) a party served with a pleading stating a cross claim against him shall answer within 20 days after service. Plaintiff shall serve a reply to counterclaim in the answer within 20 days. 12(a)(4) if a court denies the motion, the responsive pleading shall be served within 10 days after notice of the courts action, or if the court grants a motion for a more definite statement, the responsive pleading shall be served within 10 days after the service of the more definite statement. Rule 12(h) A 12(b)(6) motion, motion for failure of joinder, or an objection a of failure to state a legal defense to a claim may be made in a pleading, in a motion for judgment on the pleadings, or at trial. PRE-ANSWER MOTIONS Rule 12(f) Motion to Strike suppose, under applicable tort law, punitive damages are not recoverable. Defendant may move to strike, not the whole claim, but the allegations relating to punitive damages. 12 (b) An answer is not a responsive pleading. It IS the response You would not file a Rule 12 motion to dismiss in RESPONSE to an answer; at that point, youd have to file a motion for summary judgment. ***** RE-STUDY PROBLEMS ON P. 393******

ANSWER a. Denials Zielinski v. Philadelphia Piers Inc.

Chris Gastardi

34

Sandy Johnson, bumped his forklift into plaintiff in February of 1953. Johnson had been employed by PPI but, unknown to him, PPI had sold its operation to Car Load Contractors Inc. (CCI). Both companies useD the same insurance Co. At a pretrial conference in 1955, P first learned that CCI was Johnsons employer. The court held that PPIs denial should have been more specific, allowing plaintiff to know that he had sued the wrong defendant. Neither PPI nor CCI was aware of the mixup, but the insurance company was. The court held that PPIs denial was ineffective, and that an ineffective denial amounts to an admission once the statute of limitations has run, because the inaccurate statements which it knew (or had the means of knowing) were inaccurate, would have deprived plaintiff of his right of action. Because the same insurance company ensured both contractors, there would be no injustice. - LESSON: dont do blanket admissions or denials; make them specific. And accurate.

AFFIRMATIVE DEFENSES Layman v. Southwestern Bell Telephone Company Bell dug a trench across plaintiffs property to install telephone wires. Plaintiff sued for the damage to the property. Plaintiff insisted the trial court erred when it permitted Bell to introduce evidence of an easement when it had pleaded only a general denial and not an affirmative defense of easement. RULE: if an affirmative defense is not pleaded, it is not admissible as evidence in trial. Reversed and remanded. Affirmative defenses must be raised in a responsive pleading, not a dispositive motion. (Exceptional case: a defamation suit plaintiff must allege the falsity of the statement, but the truth of the statement is an affirmative defense that must be pleaded).

Plaintiff may make a Rule 12 (f) motion, to strike a defective defense as not a valid defense to the charge.

AMENDMENTS Rule 15 (a) A party may amend its pleading once as a matter of course at any time before a responsive pleading is served. If the action has not been placed on the trial calendar, a party

Chris Gastardi

35

may amend it at any time within 20 days after it is served. Otherwise it may amend only by leave of Court or written consent of the adverse party; leave shall be freely given when justice so requires. A party shall plead in response to an amended pleading within 10 days Nunc Pro Tunc Now for Then (Relation Back) Take my now pleading and swap it for my original one. RELATION BACK - 15(c): An amendment of a pleading relates back to the date of the original pleading when: 1. Relation back is permitted by the law that provides the statute of limitations for the action. 2. The claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth in the original pleading 3. The amendment changes the party or the naming of the party if (2) is satisfied and the party to be brought in by amendment (A) has received such notice of the action as not to be prejudiced in maintaining a defense and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party. Beeck v. Aquaslide N Dive Corp. Plaintiff was injured while using a waterslide. He sued Aquaslide for negligence, strict liability and breach of warranty. Aquaslide initially admitted manufacture of the slide. Its insurance Co. found the slide was manufactured by Aquaslide. The company moved to amend its answer to deny manufacture, and moved for a separate trial on the issue of who had made the slide. RULE: leave to amend must be freely given when the moving party has not acted in bad faith, and the adverse party would not be unduly prejudiced. STATUTE OF LIMITATIONS AND RELATION BACK Moore v. Baker Plaintiff sued her physician, alleging failure to obtain informed consent to a surgery that went bad. She moved to amend her complaint to assert allegations of negligence in the surgery and post operative care. Plaintiff argued back to the Azarbal case, in which and negligent

Chris Gastardi

36

proceeding was amended to include a claim for failure to obtain informed consent (went from the general to the specific). RULE: An amendment relates back to the original filing whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth in the original pleading.

Bonerb v. Richard J. Caron Foundation Plaintiff, a drug rehab patient, was injured playing basketball in a mandatory exercise program. He moved to amend his complaint to add a new cause of action for counseling malpractice. D claimed that the Malpractice charge did not relate back to the original claim. RULE: One who has been given notice of litigation concerning a given transaction or occurrence has been provided with all the protection that statutes of limitations are designed to afford. Thus, if the litigant has been advised at the outset of the general facts from which the belatedly asserted claim arises, the amendment will relate back even though the statute of limitations may have run. An amendment which changes the legal theory of the case is appropriate if the common nucleus of operative facts upon which the action depends remains the same and has been brought to the defendants attention by the original pleading. A key focus is at which point in the litigation the motion to amend the pleadings came about.