CIVIL PROCEDURE

Jurisdiction -Which court has the authority to decide a case?

PERSONAL JURISDICTION - Jurisdiction over the parties.

(DEFENDANT ORIENTED)

1) What kind of minimum contacts did the defendant have with the forum state? Single act (Related) Continuous but Limited (Related) Substantial and pervasive (Related/Unrelated)

2) Were the defendants contacts unrelated or related with the activity in the forum? Unrelated
GENERAL JURISDICTION

Related
SPECIFIC JURISDICTION

I. Specific Jurisdiction - Claim arises from or relates to the defendants activity in the forum. A. Relevant Constitutional Provisions 1. Article IV - Requires that every state must enforce the judgment of every other state. 2. Fourteenth Amendment - Forbids states from depriving any person of life, liberty, or property. B. Three kinds of jurisdiction: 1. In personam - Jurisdiction over the defendants person, gives the court power to issue a judgment against him personally. 2. In rem - Jurisdiction over a thing, gives the court power to adjudicate a claim made about a piece of property of about a status. A suit to establish the ownership of property against the world. (Ex: action to quiet title, action to pronounce a marriage dissolved). 3. Quasi in rem - Action is begun by seizing property owned by (attachment), or a debt owed to the defendant within the forum state. (State where the suit is brought) This is different from in rem jurisdiction because here the action is not really about the thing seized; instead, the thing seized is a pretext for the court to decide the case without having jurisdiction over the defendants person. Any judgment only affects the property seized, and the judgment cannot be sued upon in any other court. C. Minimum Contacts 1) Two prong analysis of minimum contacts:
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A. Purposeful availment (focuses on the activities of the defendant) NOTE: A strong showing on one (purposeful availment or reasonableness) will compensate for a weaker showing on the other. There still needs to be minimum contacts though. If there are no contacts, there is no jurisdiction. a. Looks to some voluntary action by the defendant establishing a relationship with the forum, usually in which the defendant seeks to benefit from the relationship with the forum state. 1 b. It gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit. c. Foreseeability - It is not that mere likelihood of a product will find its way to the forum state. Rather, it is that the defendants conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there. Defendants expectations: Was the defendant on clear notice that by acting in a certain way, he could be haled into court outside of his home state? 1. Unilateral act of Plaintiff- This is not enough to confer jurisdiction. 2 a) Taking product to forum. (WW Volkswagen) The fact that the defendant could foresee the entry of the car into Oklahoma was insufficient. Foreseeability without affiliating circumstances by which a defendant avails himself of the privileges and benefits of the forum states law cannot support jurisdiction. There was no purposeful availment of Oklahomas laws. If so, every seller of chattels would in effect appoint the chattel his agent for service of process. It is different if the defendant purposefully caters to a national market, distributing its product across the country through its own efforts or efforts of middlemen. A defendant serving a local area has no way to foresee where the product might ultimately go. BRENNANS DISSENT- He is worried about Oklahomas interest in this. Without jurisdiction, it cannot vindicate its interest of protecting its citizens, which is very strong. b) Relocation to forum3 2. Continuous but limited activity/Long term relationship with forum. (BK)- This can be enough to support specific jurisdiction. 4 a) Franchise agreement - A contract is usually evidence of a broader course of dealing that is enough to secure minimum contacts. 5 3. Stream of Commerce (Asahi) - Asahi splits the stream of commerce down the
middle. These two are the two sides of the stream:

a) Retail Seller/Local Supplier-Stream of Commerce ends with the retail sale of the product. b) Manufacturer or component supplier (Asahi)-Placing product in the stream of commerce was not sufficient and that some additional conduct by which the defendant indicates an intent or purpose to serve the forum state is essential. c) OConnor v. Brennan - OConnor talks about predictability while Brennan talks about awareness plus anticipated stream of commerce. Brennans test will allow for greater jurisdiction. 4. Targeted or intended effects in forum (Calder v. Jones) 6 a) Jurisdiction can be obtained over a non-resident defendant in a forum where the defendant has targeted its action. Example: If a company advertises in a state. 5. Single act in forum - If the quality and nature of the act is sufficient, the court will find personal jurisdiction based on one occurrence. This single act would have to be substantial though. 6. Substantial and continuous activities in the forum - If a defendant has these types of contacts, they will be subject to general jurisdiction, not specific jurisdiction. The rationale is that the contacts are so continuous that that she would expect to be subject to suit there on any claim and would suffer no inconvenience from defending there. 7 B. Reasonableness Test (consideration of the Ps interest is proper) A. Factors to be considered in determining traditional notions of fair play and substantial justice. The test is focused on the defendant, and does not concern itself with the Plaintiff having a forum: 1. Hardship on Defendant 2. Convenience of forum to the parties and witnesses 3. Foreseeability - IMPORTANT 4. The interest of the state in regulating the activity involved. 5. The interest of the state in providing a convenient forum for its residents. 6. Avoidance of multiplicity of suits and conflicting jurisdictions. 7. The relative burden of prosecution elsewhere on the plaintiff. B. Great concern for foreign defendants-In Asahi the court indicated that it may be relevant that the defendant is a foreigner, recognizing the unique burdens placed upon one who must defend oneself in a foreign legal system. Remember, Asahi was a Japanese corporation being sued for indemnity by a Taiwanese corporation in California courts. 2. Minimum contacts focuses on the time when the defendant acted not the time of the lawsuit.

3. Personal jurisdiction is a personal right that can be waived at any time by the defendant. You may have constitutional jurisdiction but there may not be statutory jurisdiction. D. What happens when there is a long-arm statute? 1. Long-Arm Statute - Statute that permits the courts of a state to obtain jurisdiction over persons not physically present within the state at the time of service. Authorizes their courts to exercise jurisdiction over defendants based on specific types of contact with the forum state. 2. Statutory Limits on Personal Jurisdiction a) Every personal jurisdiction issue involves a 2-step analysis: 1. The court must ask whether there is a state statute that authorizes it to exercise personal jurisdiction under the circumstances of the case. 2. The court must also ask whether it would be constitutional under the due process clause to do so. 3. Intended to reach the limits of due process-Means that the specific categories of jurisdiction conveyed by the long-arm statute are to be interpreted as liberally as the due process clause will allow.
Extent of Contacts

No contacts No jurisdiction
Jurisdictional Consequences

Casual or isolated No jurisdiction

Single act Specific jurisdiction

Continuous but limited Specific Jurisdiction

Substantial or pervasive General jurisdiction

Decreasing contacts

Increasing contacts

II.

General Jurisdiction - Cases in which the cause of action is unrelated to the contacts. There must be a substantial forum-related activity on the part of the defendant. Threshold contacts for general jurisdiction are very substantial. (Helicopteros) Consent

III.

a) Appointing an agent for service - Consenting to jurisdiction long in advance of litigation. b) Personal jurisdiction is a personal right that can be waived. IV. In rem/Quasi in Rem Jurisdiction A. In rem - Establishing ownership of a piece of property against the world. Example: Land, Diamond ring, etc More than one person might claim ownership to this property. B. Quasi in rem I - Suit to establish ownership of property between two parties. Example: I am in possession of a piece of land and Ashley sues me because she claims ownership. It is either mine, or hers, no one elses. C. Quasi in rem II - Ownership of the property is not in dispute but one party is attaching property to obtain jurisdiction over the other. The attachment is mere pretext for some other suit. 1. In rem/quasi in rem I The fact that the defendants are asserting claims to property within the forum indicates that they are availing themselves of the forums laws. Since the state would want to insure the marketability of property, its interested in providing procedures to resolve disputes. From a systematic point of view, availability of witnesses, records, makes it convenient and reasonable. 2. Quasi in rem II When the plaintiffs cause of action is completely unrelated to the property, the attachment serves as the basis for jurisdiction. Minimum contacts are required in a quasi in rem II suit. Real property might serve, as minimum contacts where things like stocks will not. Example: Shaffer-SUIT IN DELAWARE/SHAREHOLDERS DERIVATIVE SUIT No quasi in rem jurisdiction Facts: P owned one share of Greyhound stock. D was management of company incorporated in Delaware. P attached the stock in the corporation. Reasoning: Beyond the fundamental concepts of traditional justice and fair play. Defendants do not reside in Delaware and have no contacts. Injury occurred in Oregon. None of the activities complained of occurred in Delaware. If this were real property, this case may have come out differently. Shaffer requires that the presence of the defendants property within the forum must be viewed as only one contact with the state to be considered along with other contacts. Marshall (majority)-dismissive of Delawares state interest. Brennan (concurrence and dissent)-Concerned about Delawares state interest.
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* Arguably fair play and substantial justice requires fewer contacts between the defendant and the forum to enforce a judgment that is limited by the value of the attached property, than it requires to enforce a full in personam judgment against the defendant. At least this is true when the property involved is not worth as much or more than the claims being asserted. V. When you can always exercise jurisdiction over an individual: 1) Transient Presence within the forum state (Burnham) a) If you are personally served within the forum state then you have consented to be subject to general jurisdiction. (Scalia- Presence is enough) b) Out-of state resident that comes into the forum state only briefly, so long as service is made on the person while he is in the forum state. c) All American jurisdictions apparently continue to allow in-state service as a basis for jurisdiction, so that it cannot violate traditional notions of fair play and fairness, the standard for determining whether a practice violates due process. (Reliance on history) d) Brennan says look at territory and minimum contacts. (Presence plus Intl Shoe) 1) Says that D purposely availed himself of benefits of California. 2) Tradition is relevant but should not be determinative. 2) Domicile (Milliken v. Meyer) a) Jurisdiction may be exercised over an individual who is domiciled within the forum state even if he is temporarily absent from the state. b) A state that accords privileges and affords protection to a person and his property by virtue of his domicile may also exact reciprocal duties. c) Domicile - Current dwelling place + intent to remain there indefinitely. 3) Residence a) Some states allow jurisdiction to be exercised based on a defendants residence in the forum state, even if he is absent from the forum state. b) Rationale - The forum state grants certain privileges and protection to the property owner and thus is entitled to exercise jurisdiction in return. c) Since a person may have several residences, but only one domicile, this is a looser ground for jurisdiction than domicile. 4) Non-resident motorist statute (Hess v. Pawlowski) a) Many states have statutes allowing their courts to exercise jurisdiction over non-resident motorists who have been involved in accidents in the state. b) Implied consent Anyone who drives through the state has impliedly consented to jurisdiction. c) Specific Jurisdiction Allows for specific jurisdiction only. The court accepts that the drivers have volunteered to be affiliated with the state for a suit based on the driving, nothing more.

NOTICE AND THE OPPORTUNITY TO BE HEARD

I. Notice - Rule 4 Personal Autonomy issues. Empowering people to assert their own rights. 1. The Constitutional Requirement a. Service of Process - Service of the initial notice to the defendant of the filing of a lawsuit against him. Puts the D on notice. The delivery to a party or witness of various court orders required by the relevant rules of law to be served upon him. The ceremonial method in which the sovereigns right to exercise personal jurisdiction is validated. b. Reasonableness test - Notice must be reasonably calculated under all the circumstances to give actual notice. It is not necessary that the defendant actually learned of the suit. Just the procedures used must have been reasonably likely to inform him. c. Balancing Test - Mullane (Send notice to those that the bank had addresses for/ advertise for those that it did not.) d. RULE 1 - Whenever you have a battle over what the rules mean you favor just, speedy and inexpensive determination of every action. 2. The Statutory Requirement Rule 4(a) - FORM - What is required in the summons (signed by the clerk, identify the court, etc) Rule 4(c)(1) - A summons shall be served together with a copy of the complaint. The complaint is simply the Ps introductory pleading, stating the nature of the case and the relief sought. It is designed to inform the defendant of the events that gave rise to the plaintiffs claim and the nature of his claim. The summons is an official court documents, issued by the court, and signed by the clerk commanding the defendant to respond to accompanying complaint and telling him the time within which it must be done. Rule 4(c)(2) - Personal service may be made by any person who is over 18 years of age and not a party to the action or by a US Marshall. Rule 4(d) - Waiver of Service (Waiving service does not waive objections to venue or jurisdiction.) Rule 4(d)(2) 1. Anyone who receives notice of an action has a duty to avoid unnecessary costs by agreeing to waive service. 2. The court will impose the costs of service on a defendant who refuses to waive service without good cause. Rule 4(d)(3) - Offers defendants a tempting reward for waiving service. They have 60 rather than 20 days to respond to a complaint. Rule 4(e)-(j) - Permissible methods of serving process on the defendant Rule 4(e) - Different methods of serving process to individual defendants in federal suits whether they are served within the state where the suit is brought or is served outside the forum state. Rule 4(e)(2): (PERSONAL SERVICE) (Khashoggi)

1) Delivering a copy of the summon and of the complaint to the individual personally 2) Leaving copies at the individuals dwelling or usual place of abode with some person of suitable age and discretion then residing therein. 3) Delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to receive the service of process. (18 years old and not a party to the action) 4) Actual notice is not sufficient. Service must be done in the way above. Rule 4(e)(1): STATE RULE - Alternative to service under the other methods 1) Serve individual defendants under the provisions governing service on individuals in the courts of the state where the federal court sits. 2) Authorizes service pursuant to the law of the state in which the federal court is in OR the state in which the defendant is served. Rule 4(h): (Corporations) 1) Service must be made to an agent of the corporation. Service on a corporation may be made by leaving papers with an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive process for the corporation. 2) Definition of managing or general agent - Position makes it likely to pass the papers on to the lawyers or directors who would be expected to prepare a defense. RULE 4(l): Proof of service 1) If served by someone other than a US Marshall, an affidavit shall be made. Rule 4(m): Time Limit of Service Service must be made within 120 days of filing the complaint. If not, it is dismissed without prejudice. II. Opportunity to be heard Pre-judgment ATTACHMENT of real estate without affording prior notice or the opportunity for a prior hearing to the individual whose property is subject to attachment does not satisfy due process requirements. A. Prejudgment attachment - Ensures the availability of assets to satisfy his judgment if he prevailed on the merits of the action. There are serious due process concerns with attachment though. 1. Attach the defendants property by placing a lis pendens on it, which has the effect of preventing the defendant from selling the property to anyone else. 2. Attach the defendants bank accounts, by informing the bank that the account proceeds are to be frozen and not released to the defendant. B. Matthews test for due process: The three key inquiries: 1. The private interest that will be affected by the prejudgment measure - How affected is the interest?

a) CONSIDERATIONS - Attachment clouds title; impairs the ability to sell or otherwise alienate the property; taints any credit rating; reduces the chance of obtaining a home equity loan or additional mortgage; and can even place an existing mortgage in technical default where there is an insecurity clause. 2. An examination of the risk of erroneous deprivation through the procedures under attack and the probable value of any additional or alternative safeguards. a) In Doehr, the standard to get a lien was the likelihood that judgment will be rendered in favor of the of the plaintiff. Under this standard, there was a good chance of erroneous deprivation because the only information available was the plaintiffs. It was too one-sided. The affidavit only had six lines. (Ecchymosis) b) Possible safeguards - Adversarial hearing; double damages; bond 3. Principle attention to the interest of the party seeking prejudgment remedy, with due regard for any ancillary interest the government may have in providing the procedure or forgoing the added burden of providing added protections. POSSIBLE REQUIREMENTS FOR LIEN WITHOUT PRIOR NOTICE: To obtain a lien without notice, the P has to satisfy one of these two requirements: 1. EXIGENT CIRCUMSTANCES - The person is about to sell or flee the jurisdiction. 2. POST BOND - While the court has not mandated this, the four justices in Doehr did mention that a bond has to be added at the time of attachment. These justices are very worried that the lien is still an available weapon in litigation even if there is no reason for it. The court does not want Ps using attachment as a tactical weapon/or forcing settlement. 3. The order should come from a judge, not a sheriff. 4. The owner gets notice and a hearing on the merits.

SUBJECT MATTER JURISDICTION

I. Two basic kinds of controversies - Power to adjudicate a kind of controversy A. Rule 12(h)(3) - Provides that the parties or the court on its own initiative can always object to the courts lack of subject matter jurisdiction. Any party or the court can raise the issue at any time even after the court has entered judgment. (The plaintiff will then have to bring the case to state court but the plaintiff may be without a remedy if the Statute of Limitations runs out.) 1 B. Subject matter jurisdiction is not a waivable defense. 2 1. Diversity Suits - 28 U.S.C. 1332 a. Citizens of different states - Article III 2-Controversies...between citizens of different states... and between a State, or the Citizen thereof, and foreign States, Citizens, or Subjects. 28 U.S.C 1332(a)(1) 3

1332(a) Amount of Controversy Requirement - Excess of $75,000. This is a method of docket control. i. The party seeking to invoke federal diversity does not have to prove that the amount in controversy exceeds $75,000. All it has to show is that there is some possibility. The fact that a plaintiff eventually recovers for less than the jurisdictional amount does not matter. ii. Injunctions are valued at either the damage from the activity or the cost of discontinuing the activity. The courts are usually willing to give the benefit of the doubt to the injunction meeting the amount in controversy requirement.
b.

4 Complete diversity required - There is no diversity if any plaintiff is a citizen of the same state as any defendant. This does not prevent a pair of Ps or a pair of Ds, from being co-citizens. Diversity of citizenship offers a federal forum for an out of state litigant who may be exposed to prejudice if suit were held in state court. Complete diversity is a judge-made interpretation of 28 U.S.C. 1332, first set forth by Judge Marshall in Strawbridge v. Curtiss.
c.

d. The existence of diversity is determined as of the commencement of the action - You measure jurisdiction at the time the complaint is filed. Why should you be fixed because a lawsuit was initiated? You want the courts to be able to determine at the outset of a case whether one has jurisdiction. Domicile is what constitutes diversity not residence - Domicile defines citizenship. Current dwelling place + subjective intent to remain indefinitely. Mere residence is not enough. See Mas v. Perry.
e. f.

Changing Domicile - There are two requirements for changing domicile: (1) The physical requirement of moving to a new state and (2) The mental requirement of intending to make the new state a fixed home, indefinitely.

Diversity involving corporations - 28 U.S.C. 1332(c)(1) 5 1. A corporation shall be deemed a citizen of two possible places: 6 a. Place of Incorporation 7 b. Principle place of business (can only be one state, and will usually be the same as the state of incorporation.) 8 2. Principle Place of Business - Total activity test 9 a. Corporate Headquarters - Nerve Center Test 10 b. Place of Activity Main Production or Service Activities. Where you have many employees. 11 c. The court looks at both of these in the total activity test, but it is important to talk about both.
g.

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3. Why does the court insist on one principal place of business? a. Predictability is important. b. Prevent some entity from being hauled off in a distant forum where they will get hometowned. 2. Federal Question - 28 U.S.C. 1331 Well-pleaded complaint rule a. Jurisdiction extends to all civil actions arising under the Constitution, laws, or treaties of the United States. b. Only the compliant is looked at when deciding federal question. The P must be vindicating a federal right. If he is, it is a federal question, if not, you need diversity. 1. Federal claim - BASELINE The law creating the cause of action must be created by Federal law (American Well Works). This is the floor, if you meet this standard, you will always get into federal court. Is the P vindicating a federal right? 2. Federal issue in a State-created claim There is no clear-cut rule, but it is usually if the federal claim is sufficiently important to the case at hand. Is the plaintiff vindicating a federal right? Mottley Stevens v. Brennan (The two battle over how strong the federal issue needs to be to get into federal court): Stevens- He has a more restrictive view. His test is whether the federal issue is sufficiently important but he determines the sufficiency of the claim by seeing if there is a federal remedy. If Congress meant the claim to be sufficiently important, they would have created a remedy. Brennan- His test is simply the sufficiency of the federal issue. He does not worry if there is a federal remedy. If the federal claim is determinative in the state case, then it should be in federal court. The federal court is the better forum to deal with federal issues. Brennan is concerned about uniformity and the fact that federal courts have acquired a considerable expertise in the interpretation and application of federal law. 3. Anticipation of defense insufficient - It does not suffice for federal question jurisdiction that the plaintiff anticipates a defense based on a federal statute, or even that the defendants answer does in fact raise a federal question. Only the Ps complaint matters.

SUPPLEMENTAL JURISDICTION - 28 U.S.C 1367 A. Definition - Additional claims and parties may be brought in to a federal case without independently satisfying subject matter jurisdiction requirements, once there is a basic controversy as to which there is subject matter jurisdiction.
HISTORICAL way to support jurisdiction:

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B. Pendent Jurisdiction - If a federal court had jurisdiction over a federal question claim between two parties, it could sometimes adjudicate a state-created claim between those same parties, even though it would not have jurisdiction if the claim were brought separately. Gibbs 1) We are going to treat cases as integrated wholes. This is a single case. It makes no sense to artificially bifurcate it. Constitution gives court jurisdiction over cases and controversies. This is a single case. Article III grants jurisdiction over entire cases and controversies not over particular claims or issues in a case. If a case includes a claim that is jurisdictionally proper, the court has the constitutional power to hear the entire dispute not just the specific claim. Therefore, it is not a violation of Article III to allow a federal court to decide pendent state issues. 2) In order to invoke pendent jurisdiction, you have to have a substantial federal claim. The federal claim ought to be the dominant claim in the litigation. In Gibbs, one thing that influenced the court was that state courts had not developed expertise in labor law. If there were an incidental federal claim, the case would have come out differently. In order for this claim to be related, the burden is on the P to show that the pendent claim arises out of A COMMON NUCLEUS OF OPERATIVE FACTS, and must be so closely related that usually a plaintiff would be expected to try them all in one judicial proceeding. It is sensible and efficient to try them together.
3)

4) Discretionary Power - While federal courts have the power to try all claims arising out of the jurisdictionally proper claim, they are not required to do so. The judge can exercise his discretion based on whether it is efficient and sensible to hear all the claims together.
EXAMPLE: Federal Age Discrimination in Employment Act Marisa Breach of Contact Andy As long as the federal claim is sufficient and the two claims arise out of a common nucleus of operative facts, the contract claim can be brought in federal court

C. Ancillary Jurisdiction - Ancillary jurisdiction deals with cases where related claims are asserted by defendants or other additional parties after the initial complaint. Diversity jurisdiction for at least one claim between one plaintiff and one defendant and additional parties or claims were sought to be joined to that core claim. The initial complaint has to have subject matter jurisdiction but the related claims do not. There has to be a close connection between the original subject matter claim and the added claim to make them part of a single constitutional case.

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Federal Age Discrimination in Employment Act Marisa (NY) Assault 28 U.S.C 1332 (Diversity) Cheryl (Ohio) Jelani (New Jersey) (No independent Rule 14(a) basis for Federal Matt jurisdiction.) (New Jersey) Andy (NY)

MODERN WAY TO SUPPORT JURISDICTION: D. The New Supplemental Provision - 28 U.S.C. 1367 1367 codified the doctrines of ancillary and pendent jurisdiction and gave them the collective name of supplemental jurisdiction. Supplemental jurisdiction only works on claims that arise once we are already in federal court. These are the steps: 1) 1367 (a) First, there must be a proper claim within the jurisdiction of the federal court. If there is not, there will never be supplemental jurisdiction. If there is, then we look to see if the related claim arises out of a common nucleus of operative facts. If they do arise from the same transaction or occurrence, then (b). Second, 1367(b) cuts back on supplemental jurisdiction. These exceptions apply only to the defendant and apply only in diversity cases. Claims asserted by an original plaintiff against a third-party defendant must have independent grounds for jurisdiction, even if those claims are transactionally related. Under the language of 1367(b) supplemental jurisdiction is not permitted over claims by plaintiffs against any individual made party to the action through the use of any of the joinder devices of the following rules:(only if doing so would be incompatible with the requirement of complete citizenship diversity)
2) 1. 2. 3. 4.

Rule 14 (Impleader) Rule 19 (Compulsory Joinder) Rule 20 (Permissive Joinder of Parties) Rule 24 (Intervention) *Remember this only applies when original action is based on diversity (1332) and the plaintiff is the one asserting the additional claim.

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3) Third, even if the first two requirements are met, the federal court has the discretion to accept or reject the ancillary or pendent jurisdiction. Section 1367(c) provides four reasons for which a court may decline to exercise supplemental jurisdiction that exists: 1. The claim raises a novel or complex issue of state law. 2. The claim substantially predominates over the claim or claims over which the district court has original jurisdiction. 3. The district court has dismissed all claims over which it had original jurisdiction. 4. In exceptional circumstances, there are compelling reasons for declining jurisdiction. a) Supplemental jurisdiction advanced the objectives of judicial economy, convenience, and fairness by the elimination of duplicative state court proceedings.
Kroger (Iowa) (Proper Diversity Claim) OPPD (Nebraska) Rule 14(a) (No independent basis for subject matter jurisdiction.)

Owen (Nebraska and Iowa)

Kroger (Iowa)

(Proper Diversity Claim) Rule 14(a)

OPPD (Nebraska) Rule 14(a)

Rule 13(a) (Mandatory counter-claim not allowed under 1367 (b)

Owen (Nebraska and Iowa)

NOTE: If Owen in the case above asserts a claim against Kroger based on the same occurrence, he can do so based on 14(a). It would seem then that based on rule 13(a) Kroger would have to assert any counterclaims he has. 1367 (b) bars this though. It violates the supplemental jurisdiction of the court.

VENUE - 28 U.S.C. 1391

A. General Principles 1. Definition - The place within a sovereign jurisdiction in which a given action is to be brought. It becomes a consideration only when jurisdiction over the parties has been established. Point of venue is to localize disputes.

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2.

Waiver - Venue, like personal jurisdiction, is considered a personal privilege of the defendant and can be waived. See Rule 12(b), (g), (h)

B. Forum Non Conveniens - Piper Aircraft Co. v. Reyno 1. A court having jurisdiction over a particular case may use its discretion to decline to exercise that jurisdiction, if the court concludes that the action could be more appropriately tried in some other jurisdiction. The doctrine gives District Judges an escape valve. Because of this, District Courts are given great deference in their forum non-conveniens decisions. 2. Some of the private interests the court considers: a) Relative ease of access to sources of proof b) Availability of compulsory process for attendance of unwilling. c) Cost of obtaining the attendance of the willing d) Possibility of view of the premises e) Availability of another forum for the Plaintiffs (If there is no other forum the P can file suit in, the court WILL NOT dismiss the case) f) All other practical problems that make a case easy, expeditious, and inexpensive. C. Venue in Federal Actions 1. Venue in federal cases is controlled by 28 U.S.C. 1391, the general federal venue statute. It provides mainly for venue based on: (a) Any defendants residence, if all defendants reside in the same state, or (b) The place where a substantial part of the relevant events occurred, or (c) The place where the defendant can be made subject to personal jurisdiction if neither of the first two were possible. 2. The difference between 1391 (a) and (b) is that (a) is used for cases where jurisdiction is based solely on diversity. (b) is for cases that are not founded solely on diversity. 3. 1391(a)(1)/(b)(1) - a judicial district where any defendant resides, if they all reside in one state. These provisions focus on judicial districts not states. Example: Sherman sues Stuart from the Western District of Virginia, and Lee from the Eastern District of Virginia. Venue would be proper in either district because both are from the same state. 4. The term reside for venue purposes is equivalent to domicile. 5. 1391(a)(2)/(b)(2) - A judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated. Example 1: Products liability case. This statute would authorize venue in both the district where the product was manufactured and the district where it caused the injury. Example 2: One must focus on where the events occurred. Bates v. C & S Adjusters. Harm does not occur until receipt of the collection notice. Collection
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agency had mail forwarded to debtors new address out of state. If the bill collector prefers not to be challenged for its collection practices outside the district of a debtors original residence, the envelope can be marked do not forward. 6. 1391(a)(3) - (DIVERSITY) A judicial district in which any defendant is subjected to personal jurisdiction at the time the action is commenced, if there is no other district in which it can be brought. 7. 1391(b)(3) - (NON DIVERSITY) A judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought. EXAMPLE: Moochie goes to school in DC (NY domicile) and gets into a car accident in Mass. She probable cannot be sued in DC. A(1)- Not domiciled here A(2)- Did not occur here A(3) Not subject to personal jurisdiction here. Moochie may only be sued in Mass (Non-resident motorist) or in NY. 8. 1391(c) -This clause defines CORPORATE DEFENDANTS. A corporation will be deemed to reside in any place where it would be constitutionally permissible to subject the court to in personam jurisdiction. Each district becomes its own little International Shoe test. Unlike individuals, corporations have a broader venue choice. The whole point of 1391(c) is to enlarge venue choice. 13 D. Forum-selection clauses - Many contracts contain forum selection clauses that allow them to agree in advance to a particular venue for suits that may arise between them. E. Transfer - 1404(a) a) Change of venue may be made for the following reasons: 1. Convenience of parties. 2. Convenience of witnesses. 3. In the interest of justice. (b) A district court may transfer any civil action to any other district where it might have been brought. (c) If a case looks like it should be dismissed, a district court will transfer it to a more suitable court if there is one. If there is not, it will dismiss. The rationale is that the more suitable court will have a better understanding if it should be dismissed.

REMOVAL
Definition of Removal - Removal is the exception to the rule that the plaintiff gets to choose the forum. It allows the defendant after the plaintiff has chosen a state court to second-guess that choice by removing some types of cases from state to federal court. The rationale is that defendants as well as plaintiffs should have the opportunity to choose federal court for cases within federal jurisdiction.
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I.

28 U.S.C. 1441 - The right of removal is statutory and is not mentioned in the Constitution. A. Where suit goes-When a case is removed, it passes to the district court of the United States for the district and division embracing the place where the state action is pending. Only cases that could have been originally brought in the federal courts may be removed. 1441(a) 2. The defendant does not ask the federal courts permission to remove. She simply removes the case. Promptly after filing, the defendant shall give written notice to all parties and shall file a copy with the clerk. Once the state court is notified, the state court automatically loses control. 1446(d)
C.

Federal Question Cases - May be removed regardless of citizenship or residence of the parties. 1441(b) Diversity Cases - May be removed only if no properly joined and served defendant is a citizen of the state in which the action is pending. 1441(b) Policy Reason - The defendant in his home state has no need to be protected from local prejudice since he is from the forum state. Exception - If there is federal question and diversity jurisdiction, a case could be removed to the same state as a defendant for federal jurisdictional purposes. When you remove a case, you remove the whole case not just separate claims. Even if not all claims are removable, the case can be removed based on the removable claims. 1441(c) Exception - This does not apply to diversity cases. If lack of diversity on one claim prevents removal, then the entire case is prevented from being removed.

D.

E.

Removal not allowed by Plaintiff - Only a defendant, not a plaintiff defending a counter-claim can remove. G. Original state-court jurisdiction not required - The fact that the state court did not have jurisdiction does not prevent the defendant from removing to federal court. 1441(e)
F. H.

Plaintiff controls his claim - Plaintiff is master of his claim. If he chooses not to assert a federal claim or assert an amount in controversy in excess of $75,000, the defendant may not remove. The plaintiff can choose to sacrifice his federal claim or amount to secure the claim in state court. The plaintiff can also add a party to destroy diversity to put up a roadblock to removing. Removal is improper if P adds D to destroy diversity. Test is if there is a bona fide claim. Often this strategy works. Discretion to Remand - The Federal court also has discretion to remand to the state courts if a federal trial of the case would be jurisdictionally proper but unwise. This is most likely to happen if a federal question claim and a supplemental state claim are both removed and the federal claim is dismissed before trial.
17

I.

J.

Amending when original claim was not federal - If the plaintiff amends his claim to include a federal claim the defendant has thirty days from the amendment to file a notice of removal. If the case is a diversity case, the removal must occur within one year after the commencement of the action. 1446(b) When plaintiff adds a non-diverse defendant after removal because of diversity -The Federal court can either refuse the amendment or permit the amendment and remand the case to state court. They cannot proceed with the case with the new defendant because it would violate complete diversity. 1447(e)

K.

L. The burden is on the defendant to reveal all information about the plaintiff before the thirty-day limit.
M.

Plaintiff does not specify amount in controversy in this complaint - Plaintiff can allege when removing that damages must be in excess of $75,000. Such allegations are subject to the same ethical standards as pleadings. 14. Mechanics for Removal a) Filing - The addition of a party does not restart the removal clock. Defendant must usually file for removal within 30 days of the time the first defendant receives service of the complaint. Therefore, if two defendants served within 30-day limit but third defendant is not, the third defendant cannot make a motion to remove. 1446(b) Nobel Policy: The limit is thirty days because the supposition is that the state judge is working after a certain period and it would be inefficient to move. Further, we want the decision about where the case will be litigated quickly and finally. b) Once the case is removed, the state court loses all power over it even if it was improperly removed. 1446(d) c) All defendants must decide together to remove. 1441(a) Policy: Efficiency.

RAISING OBJECTIONS
(How and when a defendant may object to the plaintiffs selection of a court) A. Special appearance (Not needed in federal court under Rule 12) a) Allowing a party to appear in a forum for the sole purpose of contesting in personam jurisdiction. b) The defendant may only raise the in personam jurisdiction issue. c) If the defendant asserts an additional defense or makes a motion for continuance, she is deemed to have made a general appearance, which subjects her to in personam jurisdiction. d) Rule 12 does not explicitly contain a right of special appearance but it does have one. In 12(b), it says that no defense or objection is waived by being joined with one or more of the other defenses or objections in a responsive pleading or motion. Therefore, a

18

defendant can challenge jurisdiction and claim failure to state a claim without waiving the jurisdiction claim. B. Federal Rule 12. a) Rule 12(b) - Lists all the jurisdictional related defenses you may raise in the answer or by motion: 1. Lack of jurisdiction over subject matter. 2. Lack of jurisdiction over the person. 3. Improper venue. 4. Insufficiency of process. (Serve complaint, no summons/complaint not signed) 5. Insufficiency of service of process (Kashoggi) 6. Failure to state a claim upon which relief can be granted. 7. Failure to join a party under Rule 19. Unwaivable Defense Subject-Matter Jurisdiction Waivable Defenses (Round 1) Personal Jurisdiction Venue Service of Process Waivable Defenses (Round 2) Failure to state a claim Rule 12(b)(6) Indispensable Party Rule 19

b) Rule 12(g) 1. It says that any motion that is made under rule 12 and leaves out any of the defenses 2-5 or (e)(Motion for a more definite statement), those defense are waived. c) When defenses need to be made RULE 12(h) 1. Rule 12(h)(1)-Defenses 2-5 and (e) are waivable. It says if a party does not make a pre-answer motion like in 12(g) deals with, he must include these 5 in his responsive pleading or in an amendment to it permitted by Rule 15(a) to be made as a matter of course (this means it must be amended within the 20 day limit of rule 15). If he fails to include them, they are waived. NOTE: What (g) and (h)(1) are saying is these four defenses need to be raised in the pre-answer motion or (if she does not make a pre-answer motion) in the answer, or they are waived.
2. 3.

Rule 12(h)(2)-Defenses 6 & 7 need to be made any time before or during trial. Rule 12(h)(3)-The defense of lack of subject matter can be raised at any time, by either party or by the court itself (sua sponte). Subject matter jurisdiction cannot be waived.

NOTE: Certain motions do not fit under Rule 12 (g) so if they are made, the other Rule 12 motions do not need to be made: Motion for Extension of time in which to respond to the complaint is not a motion under 12(g) Motion for Transfer may be a motion under 12(g). The best way to do this would be to file all rule 12 motions, and then if you lose, move to transfer.

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 Removal is not one of the waivers in 12 (h)(1) you can remove and then move to dismiss for lack of jurisdiction. C. Motion v. Answer a) Why raise a defense in a motion before you file an answer? When you file an answer only bad things can happen. When you answer a complaint, you have to respond to each allegation. By the way, this court lacks jurisdiction. Before that, you have to respond point by point. You like to get complaint dismissed as soon as possible. b) Why would you want to raise an argument in an answer rather than by motion? Many defenses may get stronger by discovery. Too expensive or too much time by briefing a motion to dismiss. It is quicker and less expensive to answer. You just do not want to do the work. Why is delay good? Witnesses die/forget. Documents disappear. The anger and passion dissipates over time. Delay always works in favor of defendant. D. Rule 12(b)(6) a) Only whether the complaint states a legally sufficient claim. b) Even if all the facts were proven still no legal claim. c) The court does not consider any other pleadings or evidence in deciding the motion. d) Assumes all facts in complaint are true. e) Gives every benefit of the doubt to the Plaintiff. Jones v. Clinton Plaintiffs lawyers look at 12(g). We do not have an objection for Clinton raising the immunity defense. He is also going to raise a motion to dismiss on 12(b)(6). In Jones, the plaintiff is upset because of the delay issue. They know that Clinton will object on immunity grounds, then he is going to seek to have the action dismissed because 12(b)(6). You can raise 12(b)(6) claim at any time. Here is the problem: It is to your advantage as a defense lawyer, to be able to file a motion to dismiss on personal jurisdiction grounds, lose then file another motion to dismiss on 12(b)(6) grounds. Most courts say that you cannot do this under 12(g). You have to raise them all at the same time. 12(g), it is to take away from the defendant the opportunity to engage in dilatory behavior by filing motion after motion to dismiss. Judge says there is a special treatment for 12(b)(6) motions. The fact that you do not waive it entitles you to file a separate motion on that. Normally: If you move to dismiss on personal jurisdiction grounds, you lose. You can still say the P has failed to state a claim. However, you cannot fail to answer the complaint. An answer is when the issues are joined. Both parties have to go on record. What most judges would say, you have not lost your right to make a motion but you have lost your right to make that motion

20

before filing an answer. Therefore, file an answer, and then make the motion. You cannot continue to make motions without answering. E. Collateral Attack a) A defendant who defaults in an action in one jurisdiction may collaterally attack the default judgment when it is sued upon in a second jurisdiction. b) Must be a personal jurisdiction or subject matter jurisdiction issue. c) Erodes the finality and stability of judgments and therefore is strictly limited. d) Process 1. Ignore process and allow the court to enter a default judgment against you. 2. When the plaintiff seeks to enforce the default judgment, make a collateral attack claiming lack of jurisdiction. (Advantage of defendant litigating at home) e) Risky Course to Take 1. The plaintiff may enforce the judgment anywhere that the defendant has property. 2. Permits the defendant to raise only the issue of whether the court had jurisdiction. He cannot contest the merits of the plaintiffs claim

PLEADINGS
A. Investigation After a client comes to you, you need to investigate the facts. You cannot simply rely on the veracity of your client. Preceding the filing of a complaint is an investigatory phase. You need to come up with some legal theory. Often before filing a complaint, you will need to go to the library. B. Form of Pleadings - Rule 10 C. Complaint - Rule 8(a) The initial pleading in a lawsuit, and is filed by the plaintiff. a) Who reads the complaint? (Need to be cognizant of your audience) 1. Client-Your client may want to put things in the complaint that you do not need. You will have to negotiate with your client to frame your complaint. 2. The other party. 3. Judges clerk - To see if you do not have a valid cause of jurisdiction. 4. Press - There are reporters who cover every courthouse in the country. There is a public relations aspect to a complaint. You probably will write the complaint differently. You have to keep an eye towards the press.
b)

Elements of Complaint - Rule 8(a) 1. Short and plain statement of jurisdiction. What does that mean? You have to mention personal jurisdiction and subject matter jurisdiction. You need to cite a statute. 1331 or 1332. 2. Short and plain statement of the claim Need to allege the facts that are essential to the legal theory. The main question is whether they are sufficient to put the other side on notice about the nature of your complaint. However, you only need to allege facts, not the legal theory that you are relying on.
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3. A demand for judgment. Examples: a. Money (Can simply demand the amount to be shown at trial.) b. Injunction c. Declaratory relief d. Cost (Filing fees, Marshall service fees, transcripts for depositions, copying costs, attorneys fees.) e. Such other and further relief as is just and proper. This is the provision that will save you. This is like a get out of jail free card. It means whatever else that I am entitled to but did not have the good sense to ask for. f. Under RULE 54(c), the demand does not limit the plaintiffs recovery. She is entitled to recover what ever she proves at trial, even if it is more than she asked for. c) What is the danger of under-pleading? 1. You will inadvertently leave out a key ingredient. 2. The case will/can be dismissed. 3. The other side can ask for a more definite statement. The court will require you to restate claim. Rule 12(e). d) What is the danger of over-pleading? 1. You may be giving the other side more information than you want to. 2. If you allege something in a complaint, you may have to prove it. You never want to allege more than you can prove. 3. The more you can stick to the facts, the better off you are. e) Review parts of a complaint 1. Brief Introduction 2. Parties 3. Jurisdiction 4. Facts 5. Claim for Relief 6. Demand for Relief 7. If you want a jury trial, you must ask for it. C. Answers - (Rules 8, 10, 12) ADMIT NOTHING, DENY EVERYTHING, MAKE COUNTERACCUSATIONS!
a)

Definition - The defendants response to the plaintiffs complaint, made 20 days after service of process. It may be made 60 days after if the defendant waives service under Rule 4(d)(3).

b) Two choices in responding: 1. File a motion 2. File an answer

22

c) Rule 8 1. Substantive Defenses on the Merits 2. Rule 8(b) a. Admit -The defendant in his answer shall state in short and plain terms his defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies. When you admit something, you must be very careful. The last thing you want to do is admit something that turns out to be false. It is very difficult to undo an admission to an answer. (ADMIT, DENY, LACK SUFFICIENT KNOWLEDGE TO KNOW) b. Deny 1. General denial - Defendant denies every allegation of the complaint. 2. Qualified general denial - Defendant admits allegations in paragraph 5 but denies every other allegation in the complaint. 3. Specific denial Admit or deny each claim individually. This is the most common type of answer. c. Lack sufficient knowledge - Because of the requirements of good faith and veracity under Rule 11, this defense cannot be used if the defendant has reasonable access to the information either because the issue is a matter is a public record, or general knowledge. 3. Rule 8(c) - Affirmative Defenses Affirmative defenses differ from denials by injecting new matter into the dispute. Rule 12 (See Raising Objections, Supra) 1. Threshold Procedural Defenses - Defenses based on the P having made an error in some way or another. It is easy to lose Rule 12 defenses if they are not raised in a timely way. 2. Rule 12(b)(6) - A motion to dismiss on a failure to state a claim on which relief can be granted. 3. Rule 12(e) - A motion for a more definite statement. e) Rule 10 - Reminds you that answers are pleadings and must be formed in the form of a pleading. f) Rule 15 (Amendments) 1. Rule 15(a) a. Amendment as of right - A pleading may be amended once as a matter of course in the following circumstances: i. Responsive Pleading Required - If the pleading is one to which the adversary must make a response, the pleading may be amended at any time before the responsive pleading is served. *Motions-Motions are not considered responsive pleadings for this purpose. ii. Responsive Pleading not Required - If the pleading is one to which a responsive pleading is not required, it may be amended within 20 days after it is served. b. Amendment by leave of court - If the requirements for amendment as of course are not met, the pleading may be amended only by leave of court, or by consent of the other side.
d) 23

2. a.

Rule 15(c) (Relation back) Relation Back- These are used when the statute of limitations has run but one of the parties in the suit wants to amend the suit in some way. Amendments will be considered to relate back to date of original pleading if: i. Permitted by the law that provides the statute of limitations in the case, OR ii. They arose out of the conduct, transaction, or occurrence set forth in the original pleading The relation back doctrine only applies where the pleading amended arose out of the same conduct, transaction, or occurrence as set forth in the original pleading. Courts have generally taken a narrow view of when the newly pleaded material relates back. 1. Change of theory - When what is amended is simply the claim or theory, not the underlying facts that are asserted in support of the claim, the court will typically find that the requirement is satisfied. 2. Change of Facts - When the underlying facts needed to sustain the new pleading are materially different from those needed to sustain the original complaint, the court is likely to find that the requirement is not met. 3. Whether the D is placed on notice - If the D reading the original complaint would not be placed on notice of the essence of what will later be claimed to be an amended complaint, then the two complaints dont involve the same conduct, transaction or occurrence, and relation back wont apply. Marsh v. Coleman - Defendant had no reason to anticipate from reading the Ps original complaint that it should prepare to defend a case based on acts that happened three years earlier. 4. Change of Party - Rule 15(c)(3) Contemplates a very narrow class of cases where the wrong party is joined before the statute of limitations runs, but in which the right party somehow knows about the case and that it should have been involved. 5. Protective of Plaintiff - These rules are very protective of the plaintiff because of the imbalance of information between the D and P. The D will usually have the superior knowledge throughout the process. In addition, the court is interested in justice being served. Utility - The utility of this provision in meeting statutes of limitation that have run between the filing of the original complaint and the amendment. Without such a provision, a plaintiff whose original complaint met the statute of limitations might find himself barred by the statute, even though his amended pleading was only slightly different from the original one, and even though the defendant received fair notice of the general nature of the complaint before the statute of limitations had run. Rule 15(d) (Supplemental Pleadings) a. Definition-Sets forth events occurring after pleading is filed. This does not include facts that occurred before the pleading but were discovered after the pleading. b. Only allowed by the courts permission. c. Usually for ongoing commercial disputes between commercial litigants.

b.

3.

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d. There is a question of relatedness and prejudice to the defendant. If the transaction that is about to be pleaded is closely related to the first case, the court would grant a motion for specific performance as a matter of efficiency. If it is not related to the facts of the first case, the court will probably not grant it. Then you file a new case and may move to have the cases consolidated later on. g) Rules 54(c), 55 1. Default - If a defending party fails to answer in an appropriate and timely way she may find herself in default. It is simply a ministerial notation on the courts docket sheet that the defendant has failed to plead or otherwise respond in time. The plaintiff cannot obtain money or other relief based on a default. 2. Default judgment - Judgment enforced like any other. You need two things: a) Affidavit that proves service was effective - Cannot get a default judgment if the defendant was not served. b) Affidavit describing the amount due - The clerk cannot enter default judgment unless the complaint seeks a specified amount of damages. In your affidavit you are going to have to be precise on what you owe and why. Punitive damages are unavailable. By defaulting the defendant can deprive the plaintiff out of punitive damages. h) Parts of an Answer 1) Responses (Answers and defenses) 2) Counter-claims (against opposing party) Cross-claims (against co-party) 3) Demand Judgment - Demands the case be dismissed and you client be paid costs and attorneys fees. i) Voluntary Dismissal - Rule 41(a) 1. An action may be voluntarily dismissed by the plaintiff, by filing an notice of dismissal at any time before service by the adverse party of an answer or of a motion for summary judgment, which ever first occurs, or 2. By filing a stipulation of dismissal signed by all parties who have appeared in the action. 3. Reason - A plaintiff might do this to have the case dismissed without prejudice so they can reinstate it at a more appropriate time. j) Involuntary Dismissal - Rule 41 (b) 1. For failure of the plaintiff to prosecute or to comply with these rules or any order of the court, a defendant may move for dismissal of the action or of any claim.

VERACITY AND RULE 11 SANCTIONS

(WHAT YOU HAVE TO DO TO FULFILL YOUR ETHICAL DUTIES TO THE COURT)

I.

Rule 11

25

A. History Rule 11 was substantially modified in 1993. It was a response to the fact that many frivolous lawsuits were instituted. They dont have to certify things, in fact, before rule 11 motions were made because they: 1. Intimidate your adversary 2. Increase the cost of litigation. 3. Put the other side on the defensive (strategic advantage). 4. Emphasizes the strength of your case. 5. Drives a wedge between lawyer and client. 6. Creates tension in the adversarys camp. B. Process 1. Signature - Rule 11(a) Every pleading and motion submitted to the court must be signed.
2.

Representations to Court - Rule 11(b) (Clients are not held responsible for a Rule 11(b)(2) violation.) The pleader does not need to swear to the pleading. When the lawyer files a pleading, the lawyer is certifying that to the best of his knowledge, information and belief, formed after an inquiry reasonable under the circumstances: (If for instance a client comes in one day before the Statute of limitations, the duty will be context specific to these circumstances.) a) That the motion or pleading is not being imposed for improper purposes; b) The claims defenses and other legal contentions are warranted by existing law; c) The allegations and other factual contentions have evidentiary support or are likely to have evidentiary support with further investigation; d) The denials of factual contentions are warranted on the evidence. Before 1993, it was not clear whether Rule 11 applied to answers. Rule 11(b) (4) does apply to answers.

3.

Discretionary Sanctions - Rule 11(c) a) Rule 11 sanctions are discretionary with the court. If the court concludes that Rule 11 has been violated, it may impose an appropriate sanction. b) Who can initiate sanctions? 1. Defense lawyer 2. The Court (sua sponte) c) What is the procedure for initiating sanctions? 1. Write a motion. 2. Serve the motion on the offending party - Here is what we are going to do unless you withdraw the complaint. a) Safe-harbor provision - Rule 11(c)(1)(A) The rule says you have to put the other side on notice. If you wrote a detailed, letter explaining the defects in the complaint that was adequate to the put the party on notice. You have to make sure there is a formal notice that includes every ground that can lead to sanctionable conduct. The party seeking sanctions serves a motion on the other party, but is not allowed to

26

file the motion with the court unless within 21 days after service of the motion, the challenged paper, claim, defense, is not withdrawn or appropriately corrected. In other words, the offending party gets 21 days to withdraw or correct a bad pleading. If they do so, there are no sanctions. 3. Once the pleading is withdrawn, everything ends. Most people are satisfied with the withdrawal of the pleading. That does not prevent you from seeking attorneys fees. d) What happens if they do not withdraw? 1. File a motion. 2. A judge will have a hearing. He will call the parties in and argue in front of the judge. 3. Judge has to decide who wins. If no sanctionable conduct took place, it is easy. 4. Judge has to enter an order explaining why he ruled the way he did. Why? a) Make sure lawyer is on notice for deterrence and due process reasons. b) There are often appeals. We want to give appeals court clear reasons. 5. Judge does not have to impose sanctions. He can issue an opinion of finding that sanctional conduct took place but not impose sanctions. 6. Monetary sanctions are usually made payable to the court. The court can award money to the other party (usually expenses) but it is not required. The goal is deterrence, not a bounty to the opposing side. C. Public Policy Reasons Deterrence - This is why the money is usually paid to the court and not to the opponent. D. Rule 11 places heavy burdens on people who want to engage in law reform. 1) Existing law does not help them. 2) Need a change of law in order to prevail. Rule 11 is like a red light. It requires you to make sure there are authorities to show that you have considered Rule 11. Make sure there is a dissenting opinion or something. There are times when you bring a case to lose it. This is to force Congress to change the law. CONDUCT THAT DOES NOT FALL UNDER RULE 11: DISRESPECTING THE JUDGE/DISCOVERY II. Inherent power Courts have the inherent power to sanction bad faith and conduct by litigants or counsel in the absence of a statute or a rule. Chambers v. NASCO This is a fallback provision. If the conduct is covered by Rule 11, you must invoke it. 28 U.S.C. 1927 (Repeated violations of the rule)

III.

27

a) Any lawyer in federal court who multiplies the proceeding in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorney fees reasonably incurred because of such conduct. b) Can apply to conduct that is entirely oral. c) Only applies to attorneys.
IV.

Rule 38 (Rules of Appellate Procedure) & 28 U.S.C 1923 Used to sanction frivolous appeals.

DISCOVERY (Implied as broadly and liberally as possible)

Discovery - Rule 26(b) A. Purpose of Discovery (Get evidence that can be used at trial to support your position) 1. To get information from the other side. 2. Permit the preservation of evidence (People Die) 3. Facilitates the settlement process (information shows accurately to both parties the risks) 4. Provides mechanisms for narrowing the issues. B. Scope covered by Rule 26(b) 1. Applies to all forms of discovery, provides generally that the parties may obtain discovery regarding any matter not privileged, which is relevant to the subject matter involved in the pending action. 2. The information sought need not be admissible at trial. 3. The information needs to be reasonably calculated to lead to the discovery of admissible evidence.
I.

C. How do lawyers go about gathering evidence? 1. Informal - Get out of your chair and do legwork. If you interview witnesses early, you probably do not want to depose them. Ask the police for a police report. You do not need to issue subpoenas. Most evidence is acquired through informal means. 2. Formal: depositions; interrogatories; documents and things; medical records; requests for admission.
A)

Deposition - Rule 30, 31 1. Definition - A statement taken under oath at the direction of a lawyer of a party to which the lawyers of the other party are invited to attend. 2. Who can be deposed? Anyone with discoverable information. 3. Oral Depositions - Rule 30 4. Notice - Rule 30(b) The rule says when you need to take a deposition you need to give reasonable notice in writing to every other party to the action. That alone will compel a party to come. What does the notice say? Please take notice that you will be deposed. 5. Subpoena - Rule 45 (Needed to compel a non-party) How do you compel a non-party to appear? With a subpoena. The power to subpoena - You are hereby commanded to appear for a subpoena. It may also them to bring documents. They have to come when you say unless they arrange a time. If you have information that is germane to the lawsuit, the court might help you rearrange the scheduling but you are stuck.

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a) There is a witness fee. It is nominal. $40. b) You cannot compel a witness to travel more than 100 miles. Rule 45(c)(3)(A) c) Subpoena is a court order. If you do not comply, it is punishable by contempt. The theory underlying the discovery process is that every person who has knowledge that is germane to litigation has an obligation to give that evidence. d) May antagonize the witness but if no subpoena is used, the deponent cannot be compelled to attend.
6.

What do you do if you are suing a corporation? Rule 30(b)(6) If the notice or subpoena names the corporation or institution and describes with reasonable particularity the matters on which examination is requested, then the corporation must designate one or more persons who will speak on their behalf. When you are trying to deal with a big institution, you have two big problems: 1) Whom to depose? Institutions can only be bound by the testimony of people authorized to speak for them.

7. What are the limitations on the questions during a deposition? You get leeway. When the person is being deposed you can get a good sense of their credibility. Partly you are allowed broad discretion. The courts do not supervise depositions that closely. The rule has evolved that you may not instruct your witness not to answer a question simply because you do not think it is relevant. It is better simply to let lawyers ask irrelevant questions rather than getting a magistrate involved in the process. Magistrates are not participants in the discovery process. PRIVILEGED MATTERS are the only things that are questionable in depositions. If you allow your client to answer a question that is privileged you are deemed to have waived this privilege. OBJECTIONS: Two ways to object to questions: 1) Continue with the deposition and then submit a motion to the judge to force compliance. This leaves you with the option of later fighting the question at trial and thus eliminating it from the arsenal of 2) Get a magistrate on the phone immediately. 8. Why do lawyers love depositions? a) Preview the witness. b) You get the witness own testimony. c) You get the witness story locked down on paper. If they change it, the deposition can be used to impeach a witness. A deposition allows you to get a witness story locked down early on. d) You can ask follow up questions. They are a terrific tool to gather information. e) You get the information from the witness, not a lawyer. 9. What are the disadvantages of depositions? a) Expensive and time consuming.

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These days if you take a full day of depositions you are talking about $1,000 exclusive of the lawyers time. 10. There are two kinds of depositions: 1) Ordinary one is for discovery purposes. 2) Some depositions taken for trial purposes. Witness is 87 and on her deathbed, witness is going to Antarctica. Way of preserving evidence. 11. You may not take a break when a question is pending. Camera must always be on the defendant. 12. Presumptive Limit of 10 Each side is limited to 10 depositions. In a multi-party situation, the limit applies to all of the plaintiffs, or all of the defendants. 13. Written Deposition Rule 31
B) 1.

2.

3. 4. 5.

Interrogatories - Rule 33 Definition - A set of written questions to be answered in writing by the party to whom they are addressed. Interrogatories may be addressed only to a party. They are usually answered by a lawyer. Rule 33(a) Characteristics a) It is effective for getting detailed, objective, factual information. b) Parties are required to provide facts that are reasonably available to them, even though it requires reviewing files and documents. Parties would not be required to supply information that they do not already have. c) Anything in an interrogatory is carefully honed because it is usually written by the lawyer. d) They can be used to discover the other sides legal theory. Advantages 1) Get the basic facts in an organized way. 2) Shift the burden for compiling those facts to other side. Limit to 25 questions Burden - Option to produce business records: If the files are organized in a way that is responsive to the interrogatories and it is just as easy for the P to do it than the D, then the D can give it to him. This is a hard show. Production of Documents/Non-Documents Rule 34 Only addressed to parties. If you want documents from non-parties, you must subpoena them. You are entitled to see everything and perform tests on it. No court intervention is needed. A party may be required to produce only those documents and other objects that are in his possession, custody, or control. If the party who is requested to produce a document does not have actual possession of it, but is legally able to obtain a copy of it, the request must be honored. Medical Evidence - Rule 35

C)

1. 2. 3. 4.

D)

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1. Need a court order 2. Only performed on parties whose physical or mental condition is in controversy. (Different from Rule 26(g)) 3. Court order is required. 4. Needs a showing good cause and notice. 5. The report is not privileged because it will be used in trial. Whenever it is medical testimony that is going to be at issue, the patient loses right to privacy. That makes many people uncomfortable particularly where the issue is psychological. E) 1. 2. 3. 4. Request For Admission - Rule 36 Only made to parties. Not good for acquiring information. Narrow the disputed issues. Gets off the table basic facts not in dispute. Can authenticate documents - If one party denies authenticity, then you can get fees to get it authenticated. 5. If the other side does not admit issues that you prove to be true, you can get the costs for the work that was entailed in proving that it was true. 6. The standard way to get documents authenticated is to have the other side admit them. 7. Important: You are under an obligation under Rule 36 to expand on and clarify your answers with respect to admissions. You are not required to do that in an answer for a complaint even though the answer document consists of admissions and denials. NOTE: State Farm denied factual assertions that were easy to prove. If you are a judge how does that correspond to the sanctions, you impose. The reason why judges hate practice like this is that when there is not an admission the P has to prove all of this stuff at trial. Instead of taking all of those facts as gospel, you have to try all of this stuff. It takes time to establish the most basic fact. The reason why most judges would sock it to them is that the consequence is that you are going to take up precious trial time. You can see the frustration of this court. Who is going to bear the costs in this case? Who is going to pay for the sanctions? The rule says the party bears the costs. What does the court do if it wants the lawyers to bear the cost? How does the judge do this? If the court wants to make sure that the burden was borne by the lawyers, the court has the right under 26(g)(3) to sanction them because they certified the facts. Where there is a violation like this that is plainly something the lawyers have averted the court makes sure some of the sanctions are borne by the lawyers. 26(g) could be in addition to 37. II. Privileged Information A. Exceptions to Discovery - Privilege 1. Rule 26(b) allows discovery regarding any matter not privileged. 2. Judge-Made Rule There is no statute or rule in federal system that defines privilege. 3. Privilege is invented to balance the discovery process. 4. Communications between: a) Attorney/Client (communication in connection with the rendering of legal services.) b) Priest in confession c) Husband/Wife

31

d) Doctor Patient In all of these cases it is only the communication that is protected not the underlying facts. 5. Expressly claim the right of privilege - Rule 26(b)(5) a) A party must claim this privilege expressly and to describe in sufficient detail the documents, communications, or things not produced to enable other parties to assess the applicability of the privilege or protection. b) If the claimant does not expressly claim the privilege, it may be viewed as a waiver. 6. Protective Order - Rule 26(c) A court has the authority to issue a protective order placing conditions on the disclosure or protecting against disclosure altogether. 7. Hearsay rule a) Definition - Evidence that comes not from the knowledge of the witness but from mere repetition of what the witness heard others say. b) Exception - Dead witness opinion admissible in court.
B.

Work Product Immunity - Rule 26(b)(3) (Case by case analysis) 1. Absolute Immunity a) Definition - The court shall protect against disclosure of mental impressions, conclusions, opinion, or legal theories of an attorney or other representatives of a party concerning litigation. b) The Court is worried about disclosing things that reveal a lawyers impressions. c) If they did not have this rule, a lawyer might be inhibited in discussing matters with the client or at least writing things down. It might even mean that the lawyer has to testify against the client. Court is worried that the lawyer could be called to give evidence that is detrimental to his client. d) Not absolute. It is clear that a substantially stronger showing of need must be made in order to discover such mental impressions than must be made to overcome the ordinary qualified work product immunity. e) How can it be a defeasible privilege? i. An expert who is going to testify uses the work product to produce her report. Under Rule 26(b)(4). See infra. ii. Lawyer interviews witness but does not write anything down. Witness dies. The court would order this disclosed because there is an inability to get information any other way. Judge could review it in camera and would order document doctored to edit the lawyers impression. 2. TEST - Rule 26(b)(3) a) A party may obtain discovery of documents and tangible things prepared in anticipation of litigation or for trial by or for another party or by or for that other partys representative only upon a showing that: b) Two part test: 1) The party seeking discovery has substantial need of the materials in the preparation of the case, AND 2) He is unable without undue hardship to obtain the equivalent of the materials through other means. Test for hardship:

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1. The cost of obtaining information through other means. 2. The finances of the party who is seeking discovery. 3. The hostility of the witness to the discovering party in situations where a transcript of a witness statement is sought. 3. Generally a) The WPD is elastic. Minimizes protection when the lawyer is trying to grapple with a case. b) In case where mental impressions are at issue, the work product immunity does not apply. c) When the information was prepared for the lawyer, the court will not go as far. d) The WPD is at its lowest ebb when talking about the fact gathering, and it is at high tide when it is the actual mental thoughts of the lawyer.
III.

Experts - Rule 26(b)(4)/26(a)(2)(B) (disclosure of the written report) A. Have enormous power in litigation. Can give opinions on the ultimate cause of a case. Whenever there is a question of technical scientific information. B. The world is divisible into two kinds of experts: 1. Experts who testify in court as to why you are right. a) Must prepare a report - The report has to include any information the expert reviewed and relied upon. This might cut into the work product doctrine. If work product was used in preparing the report, it must be disclosed. The way to get around this and preserve the 26(b)(3) is to not have her testify and make her a non-testifying expert. This keeps the information work product. b) Can be disposed. c) They hold enormous sway over juries. d) They can say that based on their years of training that it is the other guys fault. e) They are treated very specially. 2. Experts who do not testify but help you understand the case. a) Can only be subject to discovery with a showing of exceptional circumstances by the opposition. b) If you have a complicated accident case, as a lawyer, you will probably need someone who has expertise to explain to you what happened. C. Payment - Rule 26(b)(4)(c) Requires that the expert is paid a reasonable fee for time spent responding to discovery. D. The rules allow a judge to appoint an expert to advise the court. Example: Highly technical cases like Microsoft.

IV.

Pre-Trial Meetings/Timing A. Rule 26(f) 1. First conference with the judge. 2. No discovery before this meeting. 3. Held at least 14 days before a scheduling conference.

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4. The purpose is to discuss the nature and basis for their claims and the possibilities for settlement or resolution of the case. The judge will help facilitate the process. Oftentimes the parties will express no interest at settlement because they have not had discovery and thus have not been able to probe strengths. 5. Develop a proposed discovery plan. 6. Submit a report of the discovery to the court within 10 days of the conference B. Rule 16(b) 1. The entire discovery process is done. 2. Pre-trial conference 3. At this stage, judges talk about settlement. Judges will ask what are the prospects of settlement. 4. Happens at the end of the discovery process. C. Rule 16(d) 1. Final pretrial conference. 2. This conference is held as close to the time of trial as reasonable under the circumstances. 3. Blueprint for the trial. Issues framed in the pleadings but not included in the final pretrial conference order may not be tried. 4. This is going to be a month long trial. We are going to do a mini-trial. I am going to appoint a magistrate to bring in the jury pool. Put on your strongest case. It is non-binding. One day of trial is better than 30 days of trial. 5. The pressures on settlement rise exponentially as you get closer to trial. V. Mandatory Initial Disclosures A. Initial Disclosures-Rule 26(a) 1. A party shall provide to other parties various types of information early in the case, without awaiting a discovery request. 2. Four categories: a) The name and, if known, the address and telephone number of each individual likely to have discoverable information relevant to disputed facts alleged with particularity in the pleadings. b) A copy or a description and location of all documents and tangible things in the possession, custody, or control of the party. c) A computation of any damages. d) For inspection and copying under rule 34 any insurance agreement which may indemnify the judgment. B. Disclosures of Expert Witnesses - Rule 26(b) C. Rule 26(1) places a disproportional burden on the defendants. In most cases, the D will have greater control of the relevant information. Is it fair to subject the D to a burden when they really have not had the opportunity to test the sufficiency of the complaint? VI. Sanctions A. Rule 26(g) - Discovery Sanctions Rule

34

1. Under Rule 26(g), the attorney or the party could be punished. Typically, the attorney is punished because it is the lawyers certification. 2. Sanctions decisions. a) After a party makes a motion for sanctions, the trial court must ask whether the attorneys certifications to responses were made after reasonable inquiry and 1) Were consistent with the rules. 2) Were not interposed for any improper purpose. 3) Were not unreasonable or unduly burdensome or expensive. 4) Intentional withholding of information is not necessary. b) Whether an attorney has made a reasonable inquiry is to be judged by an objective standard. c) Proper standard for the appellate court used to review sanction decisions is the abuse of discretion standard. 1. A trial court abuses its discretion when its order is unreasonable or based on untenable grounds. Example: A ruling based on an erroneous view of the law. 2. Purpose of the rule is to reduce: a) Delaying tactics. b) Procedural harassment. c) Mounting legal costs. 3. It is designed to curb discovery abuse by explicitly encouraging the imposition of sanctions. B. Rule 11 - Does not apply to discovery; Rule 26(g) is used instead. C. Rule 37 - Broader discretion Rule 37(c) 1. A party who refuses to admit on a matter that is later proved at trial may be required to pay his adversarys cost of proving the matter. Rule 37(d) 1. Only applies when there are no responses. 2. When is a misleading response considered a non-response? 3. Sanctions are much tougher. Broader order than the other rules because it allows attorneys fees.

SETTLEMENT AND ADR

A. Why do you think about settlement? What are the advantages of settling? 1. Cheaper for your client. 2. Have to worry about losing cases. You always have to as you work your way through the litigation process. What is the chance of winning? What is the chance of losing? How risk adverse is my client? In any litigation, people start thinking in terms of settlement.

35

B.

How are cases settled? Somewhere, early on, there is a Rule 26(f) conference. It is to map out discovery.

C. Types of Settlement A. Mediation - It is a consensual negotiation using a third party to help the parties work through their differences. Could the judge try to mediate this? No. The judge might learn something that might not be appropriate if he is the trier of fact. Even if you think the case ought to be settled, why would you not play the role as mediator? You do not have time. Trial judges have crowded documents. Mediation is a time intensive process. What if you say this is a case that ought not be tried. What can you do? There are many options for a judge who thinks that a case should be settled. 1) See if parties will agree for the appointment of a special master to serve as a mediator. Many lawyers work as special mediators. 2) Refer the case to a magistrate judge. Who is a magistrate judge? Play an increasingly important role in the adjudicating of disputes. They are not appointed by the president. They are appointed for 10-year terms by the District court where they serve. They are appointed by other judges. They are junior judges. They are referred to discovery disputes. They take the first crack at summary judgement motions. They do arraignments. Oftentimes a judge who wants to see a case settled will refer a case to a magistrate judge for fostering settlement. The role of a magistrate judge is like a mediator. 3) Arbitration - A substitute for the judicial process. There are two kinds of arbitration: a) Binding - Both sides need to agree to submit to the judgment b) Non-binding - It is a way to try to settle a case even though it may have to go to trial. Arbitration is a substitute for the adjudication process. Increasingly you will see all kinds of contract that have mandatory arbitration provisions. It is a way of funneling disputes out of the litigation process. Why do big companies prefer arbitrating disputes? It is private. Arbitrators do not write decisions. They just render a judgment. They do not have to explain. There is no publicity. They are much quicker than litigation because they have strict limits on the amount of discovery. There has never been an award of punitive damages. You immunize yourself from a punitive damage award. What are the advantages of including the arbitration clause in a credit card contract? 1) Convenience 2) Inconvenient for adversary 3) They get to choose what law applies.

36

The growing privatization of law. You will have many cases that are resolved through informal means. Dispute resolution is heading in the direction of privatization. Courts do not overturn arbitration awards. It grew up as a way of resolving disputes between employers and labor unions. Trench warfare litigation was a bad idea. Force them to arbitrate which would take away the aggressive litigation. Courts will defer to arbitration judgments unless there was a plainly unauthorized action. Very rarely are they over-turned. Arbitration is the principal way of settling disputes internationally. 4) High-low agreements a) A very prevalent practice. It is a way to mitigate your clients risk. b) Not disclosed to judge and jury. c) Damages that defendant is likely to pay ranges from $500,000 - 1 million. D thinks P should get nothing. D will enter in an agreement with P that limits his potential liability. In the event of a judgment in favor of D, he will give the P $300,000. Under no circumstances will he be required to pay a judgment greater than $700,000. Lowest D will pay is $300,000. The highest D will pay is $700,000. d) These arrangements can be used on appeal as well as during a trial.

SUMMARY JUDGMENT
Summary Judgment - Rule 56 A. Judgment - Final decree that creates enforceable rights between the parties. B. Summary Judgment a) Definition - Judgment rendered before trial in favor of either the Plaintiff or the Defendant. There has to be no genuine issue of material fact in the lawsuit. There is a deficiency in either law or fact. Based on the record that is admissible, there is no genuine issue for trial. Whether a jury could possibly return a verdict for the non-moving party. b) Why should we care about summary judgment? Efficiency - Trials are time consuming and expensive. However, they should not be used as a substitute for a trial when the material facts are in dispute, there is uncertainty about whether the material facts are in dispute or even when the parties disagree about the inferences drawn from the facts.
I.

c) What kinds of issues are suitable for summary judgment? 1. When the parties agree on all the facts but disagree about the law. There is really nothing to try. The issue that separates the parties is about law. 2. The parties disagree about the facts but there is no genuine dispute. One side has so little evidence that no reasonable jury could find for that side. d) Procedural requirements used to consider a motion for summary judgment. 1. Moving party carries the burden of demonstrating that no genuine dispute involving material facts exists and that he is entitled to a judgment as a matter of law. 2. Non-moving party then submits his own evidence. e) What kind of evidence is used by the movant? (Person seeking summary judgment) 1. Affidavits

37

Note: The evidence in the form of an affidavit is overall the least satisfactory form of evidentiary material to use in support of a motion for summary judgment. This is because the use of affidavits deprives the opposing party of an opportunity to cross examine the witness thereby depriving the fact finder of any real opportunity to judge the witness credibility and to determine the weight to be given to the testimony. 2. Discovery Materials (interrogatories, depositions) 3. All the evidence considered is in written form. 4. All the evidence must be admissible at trial. It may be inadmissible evidence that shows that there is evidence. (Example: Is an affidavit from one of the parties. At trial, he would testify.) 5. Court does not assess credibility. If the opponent to a motion for summary judgment succeeds in raising a genuine doubt concerning a witness credibility by a sufficient showing of the witness bias, prejudice, or interest, summary judgment should be denied.
f)

The court views the evidence in light most favorable to the non-moving party. Moreover, all legitimate conclusions should be drawn in the opponents favor.

g) What standard must a court apply when assessing a summary judgment motion? Same standard that would apply with a jury trial. 1. Libel case a) The statements were made with actual knowledge that they were false or demonstrated disregard to whether they were true or false. b) Must prove makes those proofs with clear and convincing evidence. h) Standard of Summary judgment is the same standard that will be used at trial. If in a libel case the standard for a verdict is clear and convincing evidence, then that clear and convincing requirement is also the standard at summary judgment. The purpose of Summary Judgement is to keep cases that should not go to trial, out of court. The only way to do this is to apply the right standard.
h)

Distinguishing a 12(b)(6) motion. 1. In Rule 12 motions, the court relies solely on the pleadings to determine facts. All denied facts are assumed to be in dispute and all undenied facts are assumed true. Get out of jail free card for non moving party - Rule 56(f) It is possible for a non-moving party to respond to a summary judgment by claiming that he needs more discovery. Thus a summary judgment will be denied or the hearing on the motion to be continued, if the non-moving party has not had an opportunity to make full discovery.

i)

j) Who has the standard of proof? 1. Movant has the initial burden of showing that the summary judgment standard has been met. The nature of the showing depends on who would bear the burden of persuasion at trial and what standard of proof is required.

38

2. In cases in which the opposing party would bear the burden of proof at trial, the party moving for summary judgment also may succeed by claiming that the opponent has no or insufficient evidence to satisfy its ultimate trial burden. Then the burden shifts to the non-moving party to go beyond the pleadings and designate facts showing that there is a genuine issue for trial.
C.

Partial Summary Judgment - Rule 56(d) 1. Definition - Permits a court to enter a partial judgment disposing of some, but not all of the issues in the case. Example: Court could grant summary judgment on the issue of liability but not on damages. Judgment as a Matter of Law (JMOL) - Rule 50 JMOL (Directed Verdict) Rule 50(a) - If the court determines that there is insufficient evidence, it may decline to submit the case to the jury and instead enter the judgment. Renewed Judgment as a Matter of law (JNOV) Rule 50(b) 1. Definition - If the court submits the case to the jury and if the jury returns a verdict for which there is insufficient evidentiary support, the court may enter a judgment notwithstanding the verdict. Thus, it results in the entry of a judgment for the party who lost the verdict. NOTE: Under the new Federal Rules the two motions have been consolidated. The directed verdict is a judgment as a matter of law and JNOV is a renewed judgment as a matter of law

II. A.

B.

C. STANDARD FOR ENTERING JUDGMENT AS A MATTER OF LAW The standard is the same as for a summary judgment: Whether a fair minded jury could return a verdict for the P on the evidence presented. On a JMOL, the judge must examine the evidence in a way most favorable to the non-moving party. This is the same standard as for a summary judgment. In contrast, in a motion for a new trial, Rule 59, infra, the judge can and should weigh the evidence any way he wants. If after the evidence is presented and there are two theories, both equally plausible, the defendant wins because the preponderance standard cannot be met. Reed v. San Pedro. Scintilla test- some states (not the federal courts) follow a scintilla test that says that a case must go to a jury if there is even a scintilla of evidence to support opposing partys case. D. Process 1. The Plaintiff presents her case first. 2. The Plaintiff rests. 3. The defendant can move for a JMOL (this JMOL is not required) 4. If denied the defendant presents her case. 5. After evidence is closed, both P and D can move for a JMOL (This is required if they want to renew it if they lose).

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6. If denied, the case goes to the jury. 7. After the verdict and entry of judgment, the losing party many renew her motion for JMOL if they had made it at the close of all the evidence.
NOTE: HOWEVER, THE RENEWED MOTION CAN BE MADE ONLY IF THAT PARTY MOVED FOR A JMOL AT THE CLOSE OF ALL THE EVIDENCE. Rule 50(b). If you do

not make a JMOL motion before the close of the evidence, the only thing you can do is move for a new trial (Rule 59). C. Why do the rules follow a use it or lose it mentality? Why cant you ask for a judgment as a matter of law after the case has been submitted to the jury and you did not before? Do not want to take case away from the jury. The reason why you are required to move for a JMOL at the close of all the evidence is to give the other side an opportunity to cure. Suppose all the witnesses are in, both sides argue for a JMOL. One side points out to an evidentiary fault. (Some other error in the presentation of evidence.) Judge can open evidence to have it cured. We do not want to take cases away from jury when both sides have presented evidence. The decision is for juries. The rule is ironclad if you do not move for a JMOL at the close of evidence you are stuck.
III.

New Trials - Rule 59 a) Grounds for new jury trial-This rule gives the court authority to grant new trials for any of the reasons for which new trial have heretofore been granted in actions at law in the courts of the US. Example: Discretion includes overturning verdicts for excessiveness and ordering a new trial without qualification. b) In a motion for a new trial, the judge can and should weigh the evidence any way he wants. The judge should weight the credibility of witnesses etc The judge might even abuse his discretion by not taking a hard look at the evidence and ordering a new trial Daduruan v. Lloyds of London. In contrast, in a Rule 56 and Rule 50 motion, the judge has to weigh the evidence in light most favorable of the non-moving party. c) The judge is not substituting his view of the evidence. A new jury will decide who wins or loses. d) NOTE: Unless the testimony is one-sided, the courts are going to uphold what the jury does. Jury awards are seldomly overturned. There has to be a clear-cut view that the jury verdict is wrong. However, there is an alternative for a judge who does not approve of the jurys award: 1) Remittur - Judge can give the defendant a choice. Accept the judges reduction in the award or get a new trial. Remitturs are constitutionally permissible even though the judge is taking away the jury award. If the jury comes back with $100,000 award, he can make the award less. 2) Additur - Where the judge would add on to the jury verdict rather than reducing it. Forbidden by the Constitution. It is something wholly apart from what the jury
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decided. However, some states permit additurs if it is not a question under federal law. IV. Motion to Set Aside the Judgment - Rule 60(b) A. Post-trial motion that allows the trial court to correct errors. B. It is not an appeal. It is made to the trial court that entered the judgment. C. May be made for the following reasons. Rule 60 (a) - Clerical Mistake - Can be made at any time Rule 60 (b): 1. Mistake, inadvertence, surprise, or excusable neglect 2. Newly Discovered Evidence 3. Fraud 4. Judgment is void 5. Judgment has been satisfied, released, or discharged 6. Any other reason justifying relief from the operation of the judgment (extraordinary circumstances). TIME LIMITS - REASONS 1-3 must be made within one year after judgment was entered. The others must be made within a reasonable time.

APPELLATE REVIEW
I.

Definition of Appellate Review - Review of what happened in the trial court. An appeal does not include a new trial. It is a review of what happened in the trial court. The appellate court relies on the transcript and other records of the proceedings below. There is no constitutional right to appeal, although almost all states have a mechanism for appeals. However, in states like Virginia and West Virginia, appellate review is entirely discretionary. STANDARD OF REVIEW - Rule 52(a) 1) FACTS - Clearly erroneous, the trial courts ruling had to be clearly erroneous. Great deference is given to the trial courts findings of fact because they were there to see and hear the testimony, evidence, etc 2) LAW - De Novo, questions of law are reviewed on a De Novo standard. No deference is given to the trial court. Why do we have appeals? 1) Ensure that the law is interpreted and applied correctly and uniformly. 2) Predictability. 3) Add ideas of fairness and legitimacy. 4) Provide a means for institutional sharing of judicial responsibility for decisions. Characteristics of Appellate courts. 1) Sit on panels. 2) Collegial court. Constant interaction with other judges. 3) The development of the law is important enough not to entrust one single individual.

II.

III.

IV.

V.

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4) Decide the law. They are setting out the rules of law that will govern the conduct of others.
VI.

What do you do if you lose a case? RULE 52(a) 1) Determine whether there are errors of law that go to the heart of the case. 2) Better chance if there are fundamental legal errors rather than errors as to finding of fact because the appellate court will only overturn a finding of fact if it is clearly erroneous. Rule 52(a) 3) Standard of review is de novo. FINAL JUDGMENT- Rule 58 1) A judgment is a separate piece of paper entered by the clerk. 2) The 30-day clock to appeal does not start running until this judgment is entered. 3) It often takes the clerks office a lot of time to enter the final judgment so a party usually has fair amount of time to contemplate appeal. Process of Filing an Appeal - 28 U.S.C 1291 (Prohibition of appeal for non-final order) 1) 1291 grants an appeal of right in all cases decided by a federal district court. Litigants do not need to persuade the court of appeals that their case warrants review. 2) 1291 only grants appellate jurisdiction over final decisions. See Rule 58 3) All appealable issues that were not immediately appealable during the trial merge into the judgment and can then be appealed. Note: If you have an interlocutory issue during trial that was not appealable, the time limit to appeal does not apply until the final order is issued. 4) TIME LIMIT - 30 days after final judgment (Rule 58) is entered to file a notice of appeal. 5) File a notice of appeal. Must do the following: a) File it with the district court. b) List the parties appealing. c) Identify the court you are appealing to. d) Identify the orders from which you are appealing. e) 30 days after final judgment entered to file a notice of appeal.

VII.

VII.

VIII. Instances when a final order is not entered but you still want to appeal
A.

Collateral Orders - 28 U.S.C. 1291 (very rare) 1) In some rare circumstances, a ruling may be immediately appealable even though there is no final ruling on the merits of the case. 2) To come within the small class of exceptions the requirements are: a) The order must conclusively determine the disputed question. b) The order must resolve an important issue completely separate from the merits of the action, and c) The order must be effectively unreviewable on appeal from a final judgment. 3) This test comes from Cohens and is an interpretation of 1291 4) Orders against government employees qualify as collateral orders. 5) Examples: Sanction of a law/Disqualification of a pro se to defend himself.

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6)

Death knell is not the standard- an interlocutory order may induce a party to abandon his claim before final judgment is not a sufficient reason for considering it a final decision within the meaning of 1291. Example: Class action certification/disqualification of counsel.

B.

Interlocutory Appeal - 28 USC 1292 1) Congress has explicitly authorized immediate appeals of certain interlocutory orders. 2) INJUNCTIONS - 1292(a)(1) permits the immediate appeal of the grant or denial of an injunction. This reflects the risk of irreparable harm if an injunction is denied. Most interlocutory appeals are these. 3) DISCRETIONARY APPEALS: 1292(b) a) There has to be an order that involves a controlling question of law b) to which there is substantial ground for difference of opinion, and c) that an immediate appeal from the order may materially advance the ultimate termination of the litigation. Discretionary - Both the trial and appeals court judges must agree to the interlocutory appeal. It is completely discretionary. 5) Novel legal issue. No circuit precedent. Legal issue of controlling significance. Trial judge thinks that it is in the best interest to get it to the Court of Appeals. If there is a clear answer of what the law is, no appeal for you. 6) Contempt order - If there is a court order directing you to turn over material that you do not want to, you can have yourself put in jail to keep from turning the materials over. The contempt order is immediately appealable.
4)

C.

Judgment Upon Multiple Claims or Involving Multiple Parties - Rule 54(b) 1) If one party has two or more claims, or more than one party is part of the suit, the judge can grant a final order on any of the claims or parties before a final judgment is entered IF they are discreet and separate issues. 2) One check on this rule is it is up to the discretion of the trial judge to allow the appeal or not. Courts are wary about entering into 54(b) orders. Court of Appeals judges cannot reject them. 3) Only can appeal if it is a discrete issue that has a separate theory of recovery. Example: Defamation and battery. 4) Real test: Is there a separate basis for discovery/Could this action be brought separately? If the answer is no, no 54(b). 5) Emerges most frequently with multi-party cases. Forcing party to await the outcome of the case might impose a significant hardship. 6) Rule 54 (b) is not for interlocutory orders. There is no ability for the court of appeals to object to them. The decision is left solely in the hands of the trial judge. Injunctions Appeals - 28 U.S.C. 1292(a)(1) 1) Permits the immediate appeal of a grant or denial of an injunction.

D.

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2) Concept of finality is meaningless. Money cannot make parties whole. The power of the court has to be used to prevent or mandate certain kinds of conduct. Injunction may result in irreparable harm. 3) Can be a preliminary injunction, even if there is no final order. E. Mandamus-Extraordinary Remedy 1) Only exceptional circumstances amounting to a judicial usurpation of power will justify the invocation of this extraordinary remedy. (Extraordinary, egregious abuse of discretion.) 2) Often used when the right to a jury trial is denied improperly. The judge had to have gone off the deep end. 3) Do not file mandamus petitions lightly. 4) It is a way of assaulting the district court judge. 5) Appeals to confine power of trial judge.

SUPREME COURT REVIEW

The only court required in the Constitution is the Supreme Court. Summary Affirmance Ruling on the Merits - It is a case that the Court did not review. They simply affirmed based on the ruling of the court below. They often did it because they did not think that it was worth it to have the case. HAS PRECEDENTIAL VALUE How does the court select its cases? The rule of four. If four Justices want to hear a case then it goes on the docket. What documents are filed? After you have exhausted whatever avenues, you file a petition for certiorari arguing that the court ought to hear your case. For what kind of cases does the Supreme Court grant certiorari? 1) Circuit Splits 2) If a lower court overturns the constitutionality of a federal or state statute. 3) Cases that involve a major federal program. Right to die statutes, abortion.

JURIES
I. The Right to a Jury A. Appears in three places in the Constitution 1. Article III 2 2. 6th amendment for criminal cases. 3. 7th amendment for civil cases. Provides juries for suits in common law. B. When do you have the right to a jury?

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1. When you ask for one. 2. If one would have been provided to you under common law. Common law provided a jury trial for suits at law, not for suits at equity. Chauffers Local, 391 v. Terry Justice Brennan wants to get rid of the historical analysis and look solely at the remedy (either damages or injunctive relief). This mode would provide for more jury trials. Justice Kennedy, Scalia, and OConnor prefer the historical approach. This is the standard. C. What kind of cases do you normally get a jury trial? Money damages, breach of K, products liability, tort, assault. Cases that have antecedents to the Constitution. One exception is wrongful death cases. Most states have enacted wrongful death statutes. It gives the P the right to have a jury trial. D. The Venire and Voir Dire - Rule 47 1. Where do jurors come from? a) Geographical limits b) Governmental list - (SS, Medicaid, Food Stamp Lists) c) Voter Registration List d) DMV list e) 28 U.S.C. 1861 - Broadest most diverse cross-section of the entire area. 2. Venire Group of jurors from whom the jury will be selected. What information are lawyers given about jurors? Name, address, and occupation; you know very little about the jurors. There may be occupations that carry with them presumptions of income limits. 3. Voir Dire a) The jury is selected from the venire through the process of voir dire. b) The purpose of voir dire is to gather information about prospective jurors knowledge, bias or opinions about the case. c) Based on the information gleaned during voir dire, the judge may strike a juror for cause or a lawyer may exercise one of her peremptory challenges. 1. Struck for cause - Rule 47(c) A potential juror may be struck for: a. Prejudice - Real prejudice (dislikes Blacks or Jews, etc) b. Pre-judgment - when they have such fixed opinions that they could not judge impartially the guilt of the defendant. c. Conflict of interest - Personal, financial, or other stake in the outcome.
2.

Peremptory Challenge - Rule 47(b) Allow lawyers to strike potential jurors without a need to state a cause or reason. Today in federal civil cases, each side is entitled to three peremptory challenges 28 U.S.C. 1870.

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a) Batson v. Kentucky - Prohibits peremptory strikes solely because of race. Batson requires that the lawyer exercising the peremptory base their decision on something other than race. (i.e. Cannot excuse a black man from a Klansmens jury. However, can excuse him for being a member of the NAACP.) b) The Equal Protection Clause forbids peremptory challenges based on gender as well. c) Courts give lawyers a free pass to exclude jurors when they can come up with something that passes the laugh test. Where a lawyer justifies exclusion on instinct, the courts are uncomfortable.

ERIE DOCTRINE
NOTE: ONLY APPLIES TO DIVERSITY CASES. IF IT IS A FEDERAL QUESTION CASE, DO NOT WORRY ABOUT ERIE. RULE: Erie makes it clear that you apply federal procedural and state substantive rules when you are handling a diversity case. Only apply labels at the end of the analysis because those labels can obscure the analysis. I. Introduction A. What law to apply? 1. In diversity cases, federal courts must apply the substantive law that would be applied by the courts of the state in which they sit. They are not free to decide for themselves the right rule of consideration, the duty that a railroad owes to a trespasser, or the enforceability of exclusive contracts. Rather than create general common law their job is to apply state common law. II.
A. 1.

Is there a Federal rule or Statute on point Look to the Rules Enabling Act - 28 U.S.C 2072 Allows the Supreme Court to prescribe by general rules the forms of process, writs, pleadings, and motions and the practice and procedure in civil actions at law for the federal courts. 2. The Enabling Act provides that the rules enacted must not ABRIDGE, ENLARGE, nor MODIFY the substantive state rights of any litigant.
B.

The only limitation is whether the federal rule violates a state substantive right. (i.e. enlarges, modifies, or abridges state substantive rights). If it does, apply the state standard. BUT:

C. No federal rule has ever been displaced on Erie grounds. 1. Strong presumption of validity. 2. How do the rules come about? a) Advisory Committee - Committee composed of principally federal judges, practitioners, and academics. The advisory committee then holds hearings and redrafts rules. b) Supreme Court - Acts upon recommendations in formal published opinions. c) Congress/lie and wait provision - The rules are transferred to Congress and lie before them for seven months. They are formally taken over by the clerk of the court and
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published in the congressional record. Seven months later they come into effect. The rules are binding. They do not have the same status as statutory law. 3. Rule Enabling Act passed for three main reasons: Uniformity Predictability Legitimacy Congress wanted there to be an official stamp. (Thus, a Federal Rule is to be applied unless it can be demonstrated that the Advisory Committee, the Supreme Court, and Congress were mistaken in their judgment that the challenged rule falls within the ambit of the Enabling Act.) D. Federal Statute on Point A statute has a stronger presumption of validity than does a federal rule. Based on the Supremacy Clause, any federal law will trump state law, as long as it is valid. But, like in federal rules (Gasperini) there may be room to accommodate both the federal law and the state rule. This analysis MUST BE DONE. III. Federal rule or statute on point that doesnt tell you how to decide an issue A. Examine Gasperini 1. Rule 59(a) on point. However, what standard is used to examine the judges decision in determining whether a jury award is excessive? a) NY law - Applies a material deviation standard when examining the trial courts ruling. b) Federal - Applies the abuse of discretion standard when examining the trial judges review. Rule 59 motions are filed but do not give guidance when a jury award is excessive. It does not say to use federal or state law. Only that a new trial may be granted. B. Examine whether state rule can be accommodated with a federal rule. a) If both can coexist (they do not directly conflict), there must be a Byrd/York analysis of the issue. b) If the rules conflict and can not coexist, apply just the REA test. Make sure they directly conflict. NOTE: Justice Ginsberg says that if the federal law does not give any guidance on how to answer a specific question (what standard to apply to determine if a jury verdict is excessive under Rule 59(a)), there is nothing wrong with applying the state law to answer the question. Justice Scalia says that as long as there is a federal rule that applies, the York/Byrd analysis is irrelevant. If the rule is within the REA and it is constitutional, then it applies. No further analysis is needed.
WHAT DO YOU DO IF THERE IS NO FEDERAL RULE OF CIVIL PROCEDURE ON POINT? IV.

Rules of Decision Act - 28 U.S.C. 1652 (substantive law)

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1) In civil actions, the federal courts must apply the law of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide. 2) RDA requires federal courts to apply state law whether judge-made or statutory in diversity cases rather than follow their own perception of the best rule. V.
A.

York/Byrd test Does the state rule dictate (not effect) the outcome? (Outcome determinative test) We analyze the question of outcome determinative test through the prism of the twin aims of Erie proposed in Hanna 1. Outcome determinative if it addresses the twin evils that Erie sought to rule out: a) Forum shopping The question is, if you have different rules are people going to flock to one court or the other to take advantage of the rule? 1. No-Not outcome determinative. Apply the federal rule. 2. Yes-Ask more questions. b) Inconsistent Results Question: Are you likely to get inconsistent results? 1. No-Not outcome determinative. Apply the federal rule. 2. Yes-Move on to the next question. (Avoidance of unequitable administration of the laws) - It would be unfair for the result of a litigation to materially differ because the suit had been brought in a federal court.

Hanna forces you to look at the behavior of the actors. Would the difference of the choice of law effect behavioral decisions. B. Is the state rule bound up with the state created rights and obligations? In other words, is the rule bound up or linked to important state policy goal? 1. No - Apply the federal rule 2. Examples a) Statute of limitations-yes 14 b) Byrd-Judge or jury decides whether someone is an employee-No. It did not think it was important to accommodate it.
EVEN IF BOTH ANSWERS ARE YES, YOU STILL HAVE TO ASK QUESTION #3.
C.

Is there a strong countervailing federal interest Byrd? 1. There are federal concerns about maintaining the integrity of the federal judicial system. Federal judicial system operates on the premise that factual questions will be resolved by juries. Therefore, even if a state rule is bound up you have to balance that against the federal interest in maintaining integrity of its own judicial system. 2. Some have argued that one federal interest that should always prevail over state interests is the federal interest in avoiding costs or inconvenience in the state court. 3. One court found that the state and federal interests were equal. That court applied federal law. (Taylor)

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Note: If there are both important state interests and federal interests, the federal interest will prevail. VI. Which state law do you apply? (KLAXON) A. The way you select the state law to apply is based on the choice of law that would be applied by a state court in that jurisdiction. VII. When applying state law use the decisions of the states highest court.

VIII. What do you do when the states highest court has never addressed issue? A. Federal judges have flexibility in determining state law under Erie when there are no cases on point. B. The federal court should give proper regard to decisions of trial and intermediate appellate courts but its real job is to apply the law as announced or as it would be announced by the states highest court today. C. The federal court will look to all available data, including decisions from the states lower courts, developing trends, and dicta or legislative developments that weaken or reaffirm the existing precedents. 1. However, federal courts are reluctant to recognize new state law rights in diversity cases because they do not want to apply a law that the state would not have applied. If they did not do that, it would open up a narrow window of opportunity for diversity plaintiffs to choose a more favorable substantive law despite Erie. If in order to win a suit, you need the court to overturn state precedent, you are better off in state court, BUT: 2. There is a countervailing issue. If you go to state court, the lower courts are bound by the state Supreme Courts precedent. In order to change the law, chances are you are going to have to get Supreme Court review. This is a risky proposition. However, they are still more likely to over-turn if they get it. D. Federal judges can certify the issue to the states highest court 1. Process of certification: a) A statement of the issue and the relative facts is sent to the highest state court. b) The case then is then argued in front of the states highest court just like it went through the normal appellate pipeline. c) Once the states highest court issues an opinion, the parties return to federal court and pick up the litigation there. d) Pros of this procedure - Give an accurate reading of state law. e) Cons of this procedure - Lengthy and expensive process that creates the situation of the federal courts determining the state courts workload. f) The states highest court has the power to accept or refuse certification.

PRECLUSION DOCTRINES

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I. General Principles - What are the circumstances under which a judgment in one case can preclude either claims or issues in subsequent litigation? A. A judgement may be precluded in two basic ways: 1. RES JUDICATA/CLAIM PRECLUSION 2. COLLATERAL ESTOPPEL/ISSUE PRECLUSION B. Justifications for preclusion: 1. Efficiency - Once a party has had a full and fair opportunity to be heard under the flexible rules of civil procedure, the flexibility ends. 2. Finality - Parties must be assured that once they have defended a suit and received a judgment that they will not have to do it again. This theme pervades all of the rules of Civil Procedure. 3. Fairness - The parties have already had a full and fair trial. There is no reason to let them have a second chance. 4. Force the P to get as many claims out in one suit as possible. 5. Conflicting goals- with all of the above goals in mind, we still want people to have the opportunity to obtain legal redress when their rights are violated. These concerns fight each other in this area. 6. Reduces the liability of the D. 7. Compare / Contrast Claim and Issue Preclusion with: (a) Double jeopardy is the criminal law analog to claim preclusion. Requirements are different, but each ensures that no one is made to answer twice for the same wrong. (b) Stare decisis the doctrine of precedent, requires that courts of a particular jurisdiction follow the legal pronouncements of appellate courts in that jurisdiction. (c) Doctrine of law of the case issues decided in a suit will not be relitigated later in that same suit. II. Claim Preclusion (Res Judicata) A. Definition 1. Res Judicata - the thing has been judged. It deals with a final judgment in a case. 2. Claims preclusion - it is the rule that prevents a claim (cause of action) from being relitigated. If you bring the claim again it would be res judicata. 3. Bar - It is a way of saying a claim is precluded when the D has prevailed. Example: After Moochie sues Matt claiming to be cooler than him and loses; Moochie is barred from suing him again for the same issue. 4. Splitting a cause of action - It is when you put forth a single theory of recovery involving a single right in court, and then attempt to forward a different theory for the same right in a different case. Every court would say that the claim is res judicata and barred because you tried to split your cause of action. Example: If you brought a claim of negligence, lost, and then brought the same case under a strict liability claim. This is a loser.

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B. Claim preclusion has three requirements: 1. The two cases must involve the same claim. Note: Claims do not need to have actually been litigated to be barred in a later action. They need only have been available to the P in the first suit. A.
a)

b)
c)

d) e)

Four different ways of determining if two cases involve the same claim 1. Primary Rights Theory (Adopted by Carter) View that when causes a wrong to be done to , has the right to bring a claim for each harm done by the single wrong View that a single tort gives rise to two distinct causes of action (i.e. personal injury & property damage), so recovery of one should not bar recovery of other Virginia adopted this view in 1949 in Carter v. Hinkle (case defines primary rights & single wrongful act tests) Some states have codified this approach HOWEVER, this test seems to PROMOTE DUPLICATIVE LITIGATION. In Carter, the courts definition of the claim permits the claimant to bring separate suits for property damage and for personal injuries.

2. Transactional test/Single wrongful event test Definition: a) Views that when suffers a single wrong, can only bring one claim to redress all damages resulting from that wrong b) View that a wrong that creates an injury to person & property creates a single cause of action since s wrong was single Downside to applying transaction test: a) There are different statutes of limitation. b) Different costs. c) Different actions for injuries. d) You can assign property claims. (If you get hit and your car is damaged you have a claim against whoever caused that and you can sell it.) e) There are certain causes of action that dont survive. Personal injury claims do not survive death. 3. Sameness of Evidence a) Courts assess whether the same evidentiary showing would justify recovery for the claimant in both suits; if so, both suits involve the same claim. b) It is not always clear, however, how much evidentiary overlap is required for the assertions to be considered a single claim (note 4, p. 654) 4. Restatement a) This is the modern trend in US system force claimants to package cases more inclusively, along transactional lines b) A claim encompasses all rights to relief with respect to all or any part of the transaction or series of connected transactions from which the action arose.

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(Transaction defined as common nucleus of operative facts same definition as used for joinder issues) c) Stresses a pragmatic approach - focuses on factors such as whether the facts are closely connected in time, space, origin, or motivation, whether taken together, they form a convenient unit for trial purposes, and whether treating them as a single transaction comports with the expectations of the parties and of business practices. d) Preclusion here turns on the right to assert a claim, not whether or not it was actually asserted e) A party who asserts a right to relief arising out of a particular transaction or occurrence must join ALL claims she has arising from it ** This does not include claims that could not have been joined in the first action only the claims available to in the first action 2. The parties to the two suits must be identical or in PRIVITY. The due process clause requires that one cannot be bound by a judgment unless she has had an opportunity to appear and litigate. This constitutional precept is not absolute. Courts have held that non-parties may be bound by a judgment if they are in privity with a party to the litigation. It is only done in carefully circumscribed situations. Privity relationships fall into two broad categories: a. A non-party is bound by a judgment if she was REPRESENTED by a party to another case. This generally occurs when a fiduciary represents her beneficiaries in litigation. The beneficiaries are in privity with the suit. EXAMPLES: i. Fiduciary relationship ii. Class action suits b. SUBSTANTIVE LEGAL RELATIONSHIPS between a litigant and a non-party will justify binding the nonparty. EXAMPLES: i. Successive owners of property are bound by a judgment affecting that property. ii. An assignee of a K will be bound by earlier judgments against that K. iii. A decedents estate will be bound by a judgment against the deceased. NOTE: a. A nonparty who fits into one of these categories and is represented by a litigant will be bound by the judgment even though she does not have notice of the action, is not served with process, or is not subject to service of process. 3. The first case must have ended in judgment on the merits. 1. There are three separate requirements here: a. VALIDITY - Courts accord preclusion only to valid judgements. Validity refers to the competence of the court, and requires that the court had subject matter and personal jurisdiction over the defendant.

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b. FINALITY- Preclusion only attaches to final judgments. Thus, individual rulings during the course of litigation are not entitled to preclusion. NOTE: A final judgment, even though it may still be appealed, is entitled to claims preclusion. c. ON THE MERITS - Rule 41 The final judgment must have been based on the validity of the plaintiffs claim rather than on a technical procedural ground. It is a misnomer to say a trial is necessary. Summary judgments, directed verdicts, default, etc constitute on the merits. Thus, virtually any judgment in favor of the claimant is considered on the merits. NOTE: The restatement does not require that a judgement against the plaintiff be on the merits to be preclusive. Rule 41 follows this approach. The Trial court is free to provide that its judgment is not on the merits. It does this by providing that a dismissal is WITHOUT PREJUDICE. Claim preclusion is a WAIVABLE DEFENSE. If it is not raised by a party, it is deemed waived under Rule 12. The whole reason of the doctrine is to prevent the defendant form multiple litigation. If he does not care to defend again, why should the court? CONTRACT CASES Hypo: and enter an installment sales contract, under which is to pay $5000 per month for twelve months. makes the first two payments, but misses the third; then makes the fourth and fifth payments, but fails to make the sixth. Can bring suit against for the two missed payments, or do they constitute a single claim? 1. Courts conclude that a claim constitutes all amounts owed at the time claimant files suit as long as the amounts were owed under same contract s claim would incude both the breach in the third month and the breach in the sixth month if sued for only one of these breaches, claim preclusion would prohibit her seeking damages for the other if had sued in the fourth month, at which time had failed to pay only the third installment, s claim would consist of only the breach of the third month. could then maintain a separate action for the breach in the sixth month (or could add the later claim in the pending case through a supplemental pleading under Rule 15(d) 2. Each contract or bond gives rise to separate claim(s) (generally) Hypo: both Contract-1 and Contract-2 require to make monthly payments to If fails to make required payments under both contracts, may maintain separate actions for breach of Contract-1 and Contract-2.

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III.

Issue Preclusion (The doctrine formally known as Collateral Estoppel)

A. Definition: Issue preclusion is narrower than claim preclusion by where it prevents relitigation of particular issues that were actually litigated and determined in the first case. The judgment in the prior case operates as an estoppel only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered. A party who seeks to relitigate one of the issues disposed of in the first trial is said to be collaterally estopped from doing so. Collateral estoppel does not prevent a suit; it merely compels the court to make the same finding of fact on the identical issue that the first court made. B. Five questions need to be asked before the application of issue preclusion: 1. Is the issue in the second case the SAME as the issue that was litigated in the first case? Is this really the same issue? If yes, continue. If no, then no collateral estoppel. 2. The issue must have been ACTUALLY LITIGATED An issue may not have been actually litigated even though it was raised in the prior action. Example: A sues B for breach of contract and B admits in her answer that she made the contract but defends the action on another ground. B may defend a second suit for a later breach of the same contract on the ground that she never made the contract because she never really litigated it in the first case. There are many reasons a party may choice to not raise an issue or to contest an assertion. a. The action may involve so small an amount that that litigation of the issue will cost more. b. The forum may be inconvenient one in which to produce the necessary evidence, or in which to litigate at all. RATIONALE: The court supports parties when they stipulate to certain things and do not litigate them. If the court then precluded these issues from being actually litigated in a subsequent case, no one would stipulate any issue in any case. That is not in the interest of judicial economy. 3. The issue must have been ACTUALLY DECIDED The inquiry must always be as to the point or question actually determined in the original action, not what might have been determined. EXAMPLES: A sues B for negligence. B raises the defense of contributory negligence. Jury returns a verdict in favor of A. B now sues A for negligence. Can A assert issue preclusion as to Bs negligence and her freedom from negligence?
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 Yes and Yes. The general verdict had to have meant that he was negligent and she was not. Both issues were actually decided A sues B for negligence. B raises the defense of contributory negligence. Jury returns a verdict in favor of B. B now sues A for negligence. Can B assert preclusion as to his own freedom of negligence, and As negligence? No, No. The general verdict could have meant that they were both negligent or neither was. We just do not know what was decided so no preclusion. NOTE: Special verdicts can help solve this uncertainty. 4. Was the decision in the prior case NECESSARY to the courts judgment? Essentiality arises in two main contexts: 1. A judge often decides a number of issues that do not determine the outcome of the case. These issues are not essential Example: Who made a ladder was not essential to deciding if the owner of it was negligent. 2. In some cases, the court may find for a litigant on two independent, sufficient grounds. Even though each issues was actually litigated and decided in the first suit, the court would deny estoppel because it is impossible to tell which decision was necessary to the judgment. Example: A sues B and C for negligence. The court says that A was contributory negligent but also says that B and C were negligent as well. Since A was contributory negligent, B and Cs negligence is irrelevant and was not necessary to the judgment. Their negligence therefore would not be precluded in a later case. Against whom and by whom may preclusion be asserted? 1. Against whom may preclusion be asserted? Issue preclusion can only be asserted against: (1) Parties to the prior litigation; or (2) Privity - nonparties so closely related to the parties to the prior litigation as to be considered in privity with a litigant. Like in claim preclusion, this requirement is rooted in due process. Everyone is entitled to his or her day in court. You cannot enforce a judgment against a true stranger to the litigation. 2. By whom may preclusion be asserted?1 Issue preclusion can be asserted by mutual or nonmutual parties: a. OLD REQUIREMENT WAS THAT MUTUALITY WAS REQUIRED: 1) Mutuality of estoppel issue preclusion can be used only by someone who was a party (or in privity with a party) to the first case a) Based upon a basic fairness rationale: that someone who cannot be hurt by a prior judgment should not be entitled to take advantage of it
1

P. 57-58 of class notes for more on this

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b) Although it implicates notions of fairness, mutuality is not rooted in due processit is, instead a product of history that courts are free to reject c) Heavy criticism and illogical results led courts to move away from mutuality to -- the doctrine of nonmutual issue preclusion the assertion of issue preclusion by someone who was not a party to the first case b. Mutuality was rejected Federal courts have rejected idea of mutuality (that same parties, or parties in privity, must be present for issue preclusion to be asserted), although each jurisdiction can follow its own rules regarding Preclusion and Mutuality. See Bernhard v. Bank of America; Blonder-Tongue Labs, Inc. v. U. of Illinois foundation Example: Bernhard v. Bank of America (CA 1942) Facts: Relatives of old woman sue Cook, executor of estate. Court ruled for Cook. Then relatives sued Bank of America () for improper handling of the accounts. The cases were the same with just different defendants. The bank asserted preclusion on the finding in the first case that the decedent has indeed given the money to Cook. The revolutionary aspect of Bernhard is that it does not struggle to find an exception to mutuality, it simply rejects mutuality and expands the availability of nonmutual issue preclusion In Blonder Tongue, the Supreme Court rejected mutuality so long as the party against whom issue preclusion is used had a full & fair opportunity to litigate the relevant issues in the first case. 2) Non-Mutuality non-parties to first case can assert issue preclusion in second case. RULE: The person against whom preclusion is being used MUST have had a FULL AND FAIR OPPORTUNITY TO LITIGATE the case on the first action or else preclusion cannot be used. a) Defensive Non-Mutual Issue Preclusion Defensive use occurs when a D seeks to prevent a plaintiff from asserting a claim the P had previously litigated and lost against another defendant. A non-party in case #2 raises issue preclusion to defeat a claim brought by from case#1 Example: sues -1 for patent infringement and loses. Then, sues -2 for patent infringement, and -2 asserts issue preclusion against to preclude from litigating that issue against -2. See Blonder-Tongue Labs A was estopped from asserting a claim that the had previously litigated and lost against another . Example: P ---------------------- D1 (wins) P ---------------------- D2 D2 can assert collateral estoppel. HOWEVER, P (wins) ------------ D1
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P -------------------- D2 P cannot assert collateral estoppel. Defensive, non-mutual issue preclusion is when a not in the first lawsuit uses the issue litigated and decided in the first lawsuit to get itself off the hook. Note that in the above example, if -1 had LOST, 2- would not assert issue preclusion because it would not help -2 to do so.

This cannot be asserted by same being sued by -1 in one case and -2 in second case - Promotes judicial efficiency b/c prevents from relitigating identical issues by merely switching adversaries - Gives the a strong incentive to join all potential s in the first action

b) Offensive Non-Mutual Issue Preclusion Offensive use of collateral estoppel occurs when the P seeks to foreclose the D from litigating an issue that the defendant has previously litigated unsuccessfully in an action with another party. DISCRETIONARY - Use of offensive, non-mutual issue preclusion is granted by the court at its discretion. The court should consider, on the unique facts of each case, any factor that might indicate that the issue was not fully and fairly litigated in the first case. If it was fairly litigated, then it may offensive nonmutual estoppel. The court will look at some of the concerns listed below to determine if preclusion is proper. Example: -1 sues -1 for negligence and wins. Then -2 sues -1 for negligence and -2 uses issue preclusion in second lawsuit to defeat -1. Example: P1 (wins)---------- D P2 ----------------- D P2 can take advantage of the judgment against the D in the first case.

HOWEVER P1-------------------D (wins) P2-------------------D D cannot assert estoppel

C. ISSUE PRECLUSION CONCERNS
1.

What are some of the dangers of offensive estoppel? a) WAIT AND SEE - May create an incentive on the part of each plaintiff to adopt a wait and see attitude, in the hope that the first action by another plaintiff will result in a favorable judgment. b) LACK OF INCENTIVE TO LITIGATE - May sometimes be unfair to the defendant if the suit in the first case was for a small amount of money that the defendant had no reason to contest vigorously or if the second action affords the

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defendant procedural opportunities unavailable in the first action that could readily cause a different result. c) LACK OF INCENTIVE TO JOIN - There is no incentive to join the cases because if you lose, you are screwed. Rather, let a couple go first and see what happens. If they lose, you can still sue. In addition, if they win, you walk into court and win automatically. 2. Case by case analysis Factors that the court will look to in order to determine whether to allow offensive non-mutual estoppel: a) Incentive to litigate -Whether the person to be estopped had a reasonable incentive to litigate the issue fully in the first suit. In Parklane, the fact that the first suit was for a small amount might mean that the defendant had no reason to contest the issue vigorously. The degree to which the second suit was foreseeable at the time of the first suit might also be considered in gauging whether there was an incentive to litigate fully in the first suit. b) Discouraging breakaway suits -Whether the P in the second action could have joined the first action and just sat out of the first action in order to derive a tactical advantage. c) Multiple party anomalies - If there were multiple parties waiting in the wings, the court would be less likely to permit offensive estoppel, then where the second suit would be last. d) Issue of law - Where the issue is one of law, or fact. Where the issue is one of law, the more flexible doctrine of stare decisis, rather than collateral estoppel should normally be applied. e) Encourage more suits - Because people know that they are going to win, more people are going to sue. 3. Although offensive collateral estoppel is available, lawyers often do not decide to invoke it. Why? a) If liability is conceded, the only issue to be tried is damages. If you argue collateral estoppel, it is difficult to get an instruction on punitive damages. b) You do not get to show what a reprehensible company it is.

4. Do you want to file first when there are numerous other victims? a) May have an incentive to pool your resources. Engage in risk sharing. Common for lawyers to put together litigation teams. b) You want the first case to be your best money case. Has an impact on settling. c) You tend to do better as an individual rather than a class case. d) Want to bring the case in a jurisdiction that has good discovery rules, more flexibility in picking a jury, and has juries prone to giving large awards. D. EXCEPTIONS TO THE OPERATION OF PRECLUSION Preclusion will not apply if: 1. If the party against whom preclusion is sought could not have obtained review of the initial judgment.

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2. The issue is one of law and (1) the two actions involve claims that are substantially unrelated, or (2) a change in the legal context warrants the review of the issue. 3. A new determination of the issue is warranted by the differences in the two courts from where the judgments would come from. 4. There is a change in burden of persuasion in any way from the first action to the second. 5. There is clear and convincing need for a new determination of the issue (a) because of the potential impact on the public or non-parties, (b) because it was not foreseeable at the time of the 1st case that this issue would arise again, or (c) because the party against whom preclusion is to be used did not have an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action. A MINI-REVIEW: Issue Preclusion--dual purpose of (1) protecting litigants from the burden of relitigating an identical issue with the same party and (2) promoting judicial economy The party against whom preclusion is being asserted must have had a full and fair opportunity to litigate the first suit in order to be able to use preclusion. Traditionally, the scope of IP limited by the doctrine of mutuality of the parties: a party could not use a prior judgment against another party unless both parties were bound by the prior judgment -- the doctrine was criticized from its inception, and the SC ultimately abandoned the requirement Offensive IP when a who was not a party to the prior judgment asserts that prior judgment against a Special problems with offensive IP: (1) it does not necessarily promote judicial economy b/c s have an incentive to wait for other s to receive a favorable judgment. They will have nothing to gain from intervening in earlier actions; (2) offensive IP might be unfair to sif the earlier litigation was unimportant, the may not have had the same incentive to vigorously defend the suit Therefore, in Parklane, the SC ruled that offensive nonmutual IP must be left to the discretion of the court 3 things a court looks for when deciding whether to grant offensive nonmutual IP: 1) Easy joinder in the first case 2) Foreseeability of litigation/incentive to litigate 3) Inconsistent judgments

MULTI-PARTY AND MULTI-CLAIM LITIGATION

JOINDER OF CLAIMS
COUNTER-CLAIMS

Claims asserted against a party who has asserted a claim against you.
1)

Rule 13(a) -Compulsory counter-claims. Claims that D must bring at the risk of losing it. The claim has to arise out of the same transaction or occurrence as the plaintiffs claim. Only required to assert it in a pleading.

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2)

Rule 13(b) - Permissive counter-claims. Claims by one party against another party. No claim is too far removed from the subject of the plaintiffs claim to be allowed as a counterclaim. Supplemental jurisdiction does not attach, need to make sure that there is an independent jurisdictional basis. Usually settled at a separate trial. Transactionally related - Always can add it. Not transactionally related - Still a strong case to get it joined. Do not need to have a related counter-claim to then assert an unrelated counter-claim.

CROSS-CLAIMS Claims asserted against a co-party, that is, a party to the action who is on the same side of the v. as the cross claimant. 3) Rule 13(g) - Governs cross-claims. Claims by one party against a co-party. It must arise out of the same transaction or occurrence. No need for independent jurisdictional grounds. Cross-claims are within the supplemental jurisdiction of the court. NOT MANDATORY TO ASSERT A CROSS-CLAIM. Once a cross claim is filed, then and only then are crossclaimants permitted to file non-transactionally related claims. Once a party asserts a proper cross-claim against another party, Rule 18(a) kicks in, allowing him to add any other related claims as well. Remember-1) The first cross claim must be related to the transaction. 2) All other unrelated cross-claims can be added afterwards under Rule 18(a). 4) Rule 15 - Amendment of Pleadings. You can use Rule 15 to add legal theories if the judge permits you to amend your complaint. You have one as a matter of right before an answer is filed. After that, courts are allowed to permit amendment. 5) Rule 18 - Plaintiffs rule concerning permissive joinder of claims. a) Allows a PARTY asserting a claim of relief (original claim, cross-claim, counterclaim, 3rd party claim) to assert every claim that she has against an opposing party. It says, anything goes. b) Joinder of claims is never required but is left at the claimants option. However, the rules of res judicata will often as a practical matter, induce the claimant to join claims. c) Once a party asserts a proper cross-claim against anybody Rule 18(a) kicks in, allowing him to add any other unrelated claims as well. THESE ARE ONLY APPROPRIATE AS LONG AS THERE IS A PROPER JURISDICTIONAL BASIS. JOINDER OF PARTIES IMPLEADER 1) Rule 14(a) - At any time after the commencement of the action a defendant alleging that a third person is liable to him for all or part of the plaintiffs claim against him. may implead such a person as a third party defendant. The alleging party becomes a third party plaintiff. The chief purpose of impleader is to assert claims for indemnity, subrogation, contribution, and breach of warranty.

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The third party defendant is then required to assert all mandatory counter-claims under Rule 13. A third partys citizenship is irrelevant to determining diversity.
2)

Rule 15 - When you amend your complaint as of right you may join additional parties. At the time you are adding parties, the other side has probably answered so you will need the permission of the court. Rule 19 - Joinder of Persons Needed for Just Adjudication- Rarely invoked. Deals with necessary parties. Rule 20(a) - Permissive Joinder of Parties - All persons may join in one action as plaintiffs if they assert a right to relief arising out of the same transaction or occurrence in issue. All the parties must be transactionally related. One plaintiff may also join all defendants into one suit if the right to relief against all arises out of the same transaction or occurrence. RULE ONLY APPLIES TO JOINDER OF PARTIES BY THE ORIGINAL PLAINTIFFS. NOTE: The plaintiffs are not required to proceed on the same theories in order for joinder to be proper. They just have to be arising from the same transaction or occurrence. You may not join a party that does not have a direct connection to the transaction. Unlike joinder of claims where you can join claims that are not transactionally related. Unless the person you want to join has some close nexus with the transaction, you will not be able to add them as a party. Litigation is efficient without adding complexity to it by adding a party that does not have a relationship to the underlying suit. Rule 20 does NOT require parties to be joined as plaintiffs whenever the criteria are met. Plaintiffs have the right to not join the claim. If a defendant wants to join parties, he has to go to Rule 14. EXAMPLES: Group of Ps suing one D/ One P suing multiple defendants

3)

4)

NOTE: Whenever there is a question about joinder you must ask two questions: 1) Do the rules permit joinder? 2) If the rules permit it, is there jurisdiction? This is the tough one.2

Rule 14 Review Third-Party Defendant

Plaintiff

Defendant

p. 241 in Glannon begins the explanation of 1367

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When there is a transactionally based claim against the TPD, then the Plaintiff may file a related charge against TPD, so long as there is an independent basis of jurisdiction from others. Suppose A sues B, but B says C did it. B cannot bring in C, under Rule 14, unless he is seeking contribution or indemnification. If B claims no responsibility then he must fight the suit and let A sort out who is responsible when this suit is over. This is a deliberate limitation that has been designed in Rule 14.

CLASS ACTIONS - Rule 23

In class action litigation, one or more class representatives are suing on behalf of a group of people (class). The members of the group that are represented are not joined, and thus are not parties, but they are bound by the outcome of the litigation. A. FOUR PREREQUISITES FOR CLASS ACTIONS: RULE 23(a)
1.

NUMEROSITY - The class must be so large that joinder of the class is not feasible. There is no magic number. This requirement focuses on the practicality of litigation in the absence of a class action. The courts are flexible with this. If the claimants are spread out all over the country, the court might allow a smaller number. However, if there were 50 claimants in the same district, they would not be allowed. Let them use joinder, there would be no impracticality. The litmus test is it is not practicable to not litigate this as a class. COMMONALITY - Common questions of law and fact. Unless there are common claims that unify all class members, then you cannot invoke Rule 23. There cannot be serious disagreements within the class about what to do.

2.

NOTE: (1) There can be two separate types of claims in a class action, like a claim for refund and a claim for personal injury. Both cases are going to arise out of the same question of fact and law (was the product negligent). These classes satisfy the commonality requirement AS LONG AS each type of claim has their own representative. (2) There can also be a class action just based on liability, and then damage issues can be tried individually (usually through a Special Master). (3) There are very limited OPT OUT options in class action lawsuits. In most cases, they are not possible.
3.

TYPICALITY - The claims or defenses of the representative party(s) are typical of the claims and defenses of the class. In other words, he must feel their pain. ADEQUACY - Adequacy of representation. This is the most important factor. The court is looking to see if the representative is adequate. The judge makes sure the representative will vigorously represent the class. The capacity of the lawyers to

4.

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handle the case is important. The motives of the lawyer are also important (reverse auction). Have you done a class case? Do you have money? Do you have the wherewithal to do this? As part, the judge will make sure the lawyers are up to the task. B. Class actions are maintainable only if the above is satisfied AND one of the following categories is met: 1. Rule 23 (b)(1) - This is the class action equivalent of Rule 19 necessary parties: a. 23(b)(1)(A) - This is concerned with the practical effect of a judgment on a party (usually the defendant). The remedy is usually an injunction. Specifically it permits class litigation where separate actions would create a risk of establishing incompatible standards of conduct for the party opposing the class. A unity decision is essential in these cases. Example: Numerous claims to a specific res. If the number of claimants is manageable, the stakeholder might use interpleader. If joinder is impracticable, the case will proceed as a Rule 23(b)(1)(A) class action. b. 23(b)(1)(B) - Limited fund class actions - Is concerned that individual actions will impair or impede the ability of nonparties to protect their interests. To avoid a race to the courthouse, the court allows these class actions to be brought. This is the equivalent of Rule 24(a)(2). NOTE: (1) There is no notice or opt out provisions in either of these. (2) These are generally diversity cases because the res is large enough to meet the amount in controversy requirement. Rule 23(b)(2) - Injunctive relief (limited damages possible) - These are aimed at equitable relief when the nonclass party has acted or refused to act on grounds generally applicable to the class. An example would be a case seeking an order desegregating schools or ending employment discrimination against a particular group.
2.

No notice or opt out provisions These cases can NOT be brought as diversity cases

While an injunction is the typical relief granted, DAMAGES can be awarded if they flow naturally from act giving rise to the equitable relief. For example, class members may win equitable relief ordering their promotion, and recover damages for lost wages for the time they were not promoted. Rule (b)(3) - DAMAGES CLASS ACTIONS (Legalized Blackmail)- Need to show two things:
3.

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1. Questions of law or fact common to the members of the class predominate over any questions affecting only members, and 2. That a class action is the superior was to handle the case. (This will often be the case because of economical reasons.) Example: Mass torts - if it comes from a single event, it is much easier to say those common questions predominate. Damages will be different, but the negligence (the predominate issue) will be the same in all the cases. Toxic torts are harder to justify, but courts are being more liberal for efficiency purposes. NOTICE - The representative must pay to give actual notice to all reasonably identifiable parties. This can be very expensive and may keep many classes form being formed. The cost of notice will eventually be paid by the losing party as a cost, but the representative must fork out the money for the original notice. OPT OUT - In a B3 - any possible class member can opt out and bring their claim individually. The reason for these two unique provisions is that unlike 23(b)(1) and (2), these members are held together solely by common facts. Their claims are individual and independent. Thus, there is a pull between due process and efficiency. 4. Subject matter jurisdiction under Rule 23 - If it is a diversity class action, there must be both diversity of citizenship and the requisite amount in controversy. a. Diversity of citizenship - The class representative must be diverse from the opposing parties. The members of the class are irrelevant. For example, if the class has 990 California residents and 1 Arizona resident, and the suit is against a California company, as long as the Arizona is the representative, diversity of citizenship is satisfied. b. Amount in controversy This is an undecided issue. The old rule was that each member must meet the amount in controversy requirement. However, Zahn, a case from the Fifth Circuit, said that only the representative must have the required amount. When it went up to the Supreme Court they tied at 4-4.

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