1.
The Power and Limits of the Courts.
A. Rule. A federal district court has power to punish for contempt a person who violates its
order even though that person is not a party to the original suit.
B. United States v. Hall. 5th Cir. 1972. Facts: A federal district court issued an interim ex
parte (a proceeding commenced by one party without providing any opposing parties
with notice or which is uncontested by an adverse party) order restraining unauthorized
persons from entering school grounds. The court served notice on Hall who then went on
the grounds to violate the order. Hall was not a party to the segregation suit. Holding
and Rationale: Hall’s activities threatened the rights of the parties as determined in the
desegregation suit, which established the original plaintiffs’ constitutional right to go to a
desegregated school. The activities of those adding to racial disorder, which was Hall’s
goal by going on school grounds, hindered the court’s power to make a binding decision
between the parties before it. Due to their nature, school desegregation orders often
create excitement, and like in rem orders (an action against property), are vulnerable to
disruption by unidentifiable people like Hall, who are not parties.
C. FRCP 65 (d): A literal reading of Rule 65(d) forbids federal courts to issue in rem type
injunctions against persons not parties to a suit. But federal courts continue to issue such
injunctions because they possessed the power to do so at common law. Rule 65(d) was
intended to embody rather than limit their common law powers. The court views Rule
65(d) as a codification rather than a limitation of the court’s common law powers. The
district court, in effect, adjudicated the rights of the whole community with respect to the
school controversy. Courts are not free to issue permanent injunctions against all in the
world in school cases. Hall had notice of the court order. The portion of the court’s
order complained about here may be characterized as a temporary restraining order,
which under 65(d) may be issued ex parte.
D. FRCP 65 (d) (page 162): “Every order granting an injunction and every restraining
order shall set forth the reasons for its issuance; shall be specific in terms; shall describe
in reasonable detail, and not be reference to the complaint or other document, the act or
acts sought to be restrained; and is binding ONLY upon the parties to the action, their
officers, agents, servants, employees, and attorneys, and upon those persons in active
concert or participation with them who receive actual notice of the order by personal
service or otherwise”
2.
The Right to Be Heard: The Elements and History of Due Process (page 21).
A. The Due Process Clause of the Fourteenth Amendment to the U.S. Constitution requires
that an AFDC recipient be afforded an evidentiary hearing prior to the termination of his
benefits.
B. The 14th Amendment. “Nor shall any State deprive any person of life, liberty, or
property, without due process of law.” Under Goldberg, entitlements are held to be
property interests. In 1996, Congress declared that such interests are not entitlements
(property interests).
C. Joint Anti-Fascist Refugee Committee v McGrath. Supreme Court, 1951. “Due
process” requires the opportunity to be heard by an impartial decision maker and to
present evidence.
D. Goldberg v. Kelly. Supreme Court, 1970. Facts: New York welfare recipients alleged
that officials were about to terminate aid without prior notice and hearing, denying them
due process. At the time of the suits there was no requirement of prior notice or hearing
before termination of aid. Holding and Rationale: When welfare is ended, a pretermination hearing provides due process, because welfare provides the means to obtain
necessities of life. The biggest factor is that ending aid before resolution of the person’s
eligibility may deprive an eligible person of the means to live while they wait. They lack
other resources, and their situation becomes desperate which badly affects their ability to
get redress from welfare officials.
E. What should it look like? The Court noted that a pre-termination hearing does not have
to be a judicial or quasi-judicial trial. A complete record and opinion are not needed at
the pre-termination stage. “Minimum procedural safeguards” are justified. At the least,
the individual must have a chance to state his case orally (b/c of lack of education
perhaps) to an impartial decision maker. The decision needs to be based on rules and
evidence. The recipient should have timely and adequate notice. They need the ability to
confront and cross-examine witnesses. They can be represented by counsel but it is not
required. The decision maker should state the reasons for the decision.
3.
The Costs of Process (page 39).
A. What role should costs have in determining how much process is due?
B. Mathews v Eldridge. Supreme Court, 1976. Facts: Eldridge was granted disability
benefits in 1968. In March 1972 he received a questionnaire from the agency monitoring
his condition. He completed it, indicating that he had not yet recovered and identifying
the medical sources, including physicians from whom he had been treated. The agency
obtained reports from his doctor, and, after considering these reports and other info they
informed him by letter that they had made a tentative decision to stop payments. The
letter included reasons and advised him that he might request time in which to submit
additional information. In response, he disputed one aspect of his medical condition.
The state then made its final determination that he was not qualified (in May). This was
accepted by the social security administration, which notified him in July that his benefits
would stop after that month. They notified him of his right to be reconsidered by the
agency of this determination within six months. Holding and Rationale: The due
process clause does not require a recipient be afforded an evidentiary hearing prior to
termination of social security payments. This worker’s need for payments is less than
that of a welfare patient. Other forms of assistance become available if this termination
put him below the poverty level. The existing procedures are fair, and involve a focused
and well documented evaluation of his medical condition. There is reason here to depart
from the idea that any less than an evidentiary hearing is insufficient.
C. The Court’s balancing test. The Mathew’s court uses a 3 factor test, calling for
comparison of (1) the private interest affected by proposed deprivation, (2) the risk of
error created by the procedures under challenge, and (3) the burden imposed on the
government by more expansive procedural requirements.
1.
A P’s obligations. Ps have three obligations in order to win civil litigation (aside from
jurisdiction and notice). First, they must state a claim for which they are entitled to relief. Second,
after satisfying their initial pleading obligation, Ps must meet a production burden. This means a
P must present sufficient evidence to permit a reasonable person to find that each element of the
claim is true. Finally, to prevail, a P must meet a burden of persuasion by persuading the fact
finder that each element is true.
2.
Claims, Causes of Action, Elements, and Burdens of Proof. A lawyer cannot draft a complaint
without analyzing her client’s situation in order to see if there is a cognizable claim. She will have
to analyze the elements of her claim or claims.
3.
Burdens of proof. Burdine. Supreme Court, 1981. Facts: P sued Texas for discrimination
under Title VII after she was fired and not promoted when rehired. Her supervisor claimed the
choices were from an evaluation of her qualifications. The district court found no discrimination.
The appeals court reversed, finding that P’s prima facie case of discrimination shifted the burden
of proof to Texas to persuade the court that a nondiscriminatory reason prompted her firing. They
reasoned Texas’ failure to persuade failed to rebut P’s showing, and, therefore, her firing was
discriminatory. Holding and Rationale: In a discrimination suit, P’s prima facie case shifts just
the burden of production, not persuasion, to D. He must only show a nondiscriminatory reason for
the firing to rebut the presumption of discrimination. The burden is then on the P to persuade the
court that that reason was a pretext - The ultimate burden to persuade is always on the P. By
placing a burden of production on the D, they are forced to clarify the factual issues to help P have
a fair chance to show pretext. The D must present sufficient evidence to justify a judgment for the
D because he still has an interest in persuading the court. The court of appeals applied an
incorrect allocation of the burden of persuasion.
4.
Pleading and Amendments. FRCP 7, 8, and 9 lay out the requirements for a federal complaint,
and 12(b)(6) describes the motion the a D may bring to challenge whether the P’s complaint
correctly describes a claim for which relief can be granted.
5.
Pleadings are simple. One of the themes of the FRCP is that it is rather simple to draft a
complaint. A P’s lawyer may wish, for strategic reasons, to plead with greater specificity – to
educate the judge to see the case favorably or it may lead to an earlier settlement. Also, a
fundamental aspect of the FRCP is the ease of amendment.
6.
Rules are construed broadly. FRCP 1: The rules shall be construed and administered to secure
the just, speedy, and inexpensive determination of every action.
7.
Civil action begins: FRCP 3: A civil action is commenced by filing a complaint with the court.
8.
What types of pleadings are allowed: FRCP 7(a): Pleadings. There shall be a complaint and
an answer; a reply to a counterclaim denominated as such; an answer to a cross-claim, if the
answer contains a cross-claim; a third party complaint, if a person who was not an original party is
summoned under the provisions of Rule 14; and a third party answer, if a third party complaint is
served. No other pleading shall be allowed, except that the court may order a reply to an
answer or a third-party answer.
9.
What should a pleading look like: FRCP 8. General Rules of Pleading.
a.
What must a pleading include: Rule 8(a): Claims for Relief. A pleading which sets
forth a claim for relief, whether an original claim, counterclaim, cross-claim, or thirdparty claim, shall contain (1) a short and plain statement of the grounds upon which the
court’s jurisdiction depends, unless the court already has jurisdiction and the claim needs
no new grounds of jurisdiction to support it, (2) a short and plain statement of the claim
showing that the pleader is entitled to relief, and (3) a demand for the relief the pleader
seeks. Relief in the alternative or of several different types may be demanded.
b.
Denials of pleadings. Rule 8(b): Defenses; Form of Denials. A party shall state in
short and plain terms the party’s defenses to each claim asserted and shall admit or deny
the averments upon which the adverse party relies. If a party is without knowledge or
information sufficient to form a belief as to the truth of an averment, the party shall so
state and this has the effect of a denial. Denials shall fairly meet the substance of the
averments denied. When a pleader intends in good faith to deny only a part or a
qualification of an averment, the pleader shall specify so much of it as is true and
material and shall deny only the remainder. Unless the pleader intends in good faith to
controvert all the averments of the preceding pleadings, the pleader may make denials as
specific denials of designated averments or paragraphs or may generally deny all the
averments except such designated averments or paragraphs as the pleader expressly
admits; but, when the pleader does so intend to controvert all its averments, including
averments of the grounds upon which the court’s jurisdiction depends, the pleader may
do so by general denial subject to the obligations set forth in Rule 11.
c.
Can set out alternative claims/defenses. Rule 8(e): Pleadings to be Concise and Direct;
Consistency. (1): Each averment of a pleading shall be simple, concise, and direct. No
technical forms of pleading or motions are required. (2): A party may set forth two or
more statements of a claim or defense alternately or hypothetically, either in one count or
defense or in separate counts or defenses. When two or more statements are made in the
alternative and one of them if made independently would be sufficient, the pleading is not
made insufficient by the insufficiency of one or more of the alternative statements. A
party may also state as many separate claims or defenses as the party has regardless of
consistency and whether based on legal, equitable, or maritime grounds. All statements
shall be made subject to the obligations set forth in Rule 11.
d.
Liberal reading. Rule 8(f): Construction of Pleadings. All pleadings shall be so
construed as to do substantial justice.
10. FRCP 9. Pleading Special Matters.
a.
Rule 9(a): Capacity. It is not necessary to aver the capacity of a party to sue or be sued
or the authority of a party to sue or be sued in a representative capacity or the legal
existence of an organized association of persons that is made a party, except to the extent
required to show the jurisdiction of the court. When a party desires to raise an issue as
to the legal existence of any party or the capacity or any party to sue or by sued or the
authority of a party to sue or be sued in a representative capacity, the party desiring to
raise the issue shall do so by specific negative averment, which shall include such
particulars as are peculiarly within the pleader’s knowledge.
b.
Rule 9(b): Fraud, Mistake, Conditions of the Mind. In all averments of fraud or
mistake, the circumstances constituting fraud or mistake shall be stated with particularity.
Malice, intent, knowledge, and other conditions of the mind of a person may be averred
generally.
c.
Rule 9(c): Conditions Precedent. In pleading the performance or occurrence of
conditions precedent, it is sufficient to aver generally that all conditions precedent have
been performed or have occurred. A denial of performance or occurrence shall be made
specifically and with particularity.
d.
Rule 9(d): Official Document or Act. In pleading an official document or official act it
is sufficient to aver that the document was issued or the act done in compliance with the
law.
e.
Rule 9(e): Judgment. In pleading a judgment or decision of a domestic or foreign court,
judicial or quasi-judicial tribunal, or of a board or officer, it is sufficient to aver the
judgment or decision without setting forth matter showing jurisdiction to render it.
f.
Rule 9(f): Time and Place. For the purpose of testing the sufficiency of a pleading,
averments of time and place are material and shall be considered like all other averments
of a material matter.
g.
Rule 9(g): Special Damage. When items of special damage are claimed, they shall be
specifically stated.
h.
Rule 9(h): Admiralty and Maritime Claims. Page 41.
11. Rule 12. Defenses and Objections – When and How Presented – By Pleadings or Motion –
Motion for Judgment on the Pleadings.
a.
Rule 12(a) When Presented. (1): Unless a different time is prescribed in a statute of the
United States, a D shall serve an answer (a) within 20 days after being served with the
summons and complaint, or (b) if service of the summons has been timely waived on
request under Rule 4(d), within 60 days after the date when the request for waiver was
sent, or within 90 days after that date if the D was addressed outside any judicial district
of the United States. (2): A party served with a pleading stating a cross-claim against
that party shall serve an answer thereto within 20 days after being served. The P shall
serve a reply to a counterclaim in the answer within 20 days after service of the answer,
or, if a reply is ordered by the court, within 20 days after service of the order, unless the
order otherwise directs. (4): Unless a different time is fixed by court order, the service
or a motion permitted under this rule alters the periods of time as follows: (a): if the
court denies the motion or postpones its disposition until the trial on the merits, the
responsive pleading shall be served within 10 days after notice of the court’s action; or (b)
if the court grants a motion for a more definite statement, the responsive pleading shall be
served within 10 days after the service of the more definite statement.
b.
Rule 12(b): How Presented. Every defense, in law or fact, to a claims for relief in any
pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be
asserted in the responsive pleading thereto if one is required, except that the following
defenses may at the option of the pleader by made by motion: (1) lack of jurisdiction over
the subject matter, (2) lack of jurisdiction over the person, (3) improper venue, (4)
insufficiency of process, (5) insufficiency of service of process, (6) failure to state a claim
upon which relief can be granted, (7) failure to join a party under Rule 19. A motion
making any of these defenses shall be made before pleading if a further pleading is
permitted. No defense or objection is waived by being joined with one or more other
defenses or objections in a responsive pleading or motion. If a pleading sets forth a claim
for relief to which the adverse party is not required to serve a responsive pleading, the
adverse party may assert at the trial any defense in law or fact to that claim for relief. If,
on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to
state a claim upon which relief can be granted, matters outside the pleading are presented
to and not excluded by the court, the motion shall be treated as one for summary
judgment and disposed of as provided in Rule 56, and all parties shall be given
reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
c.
Rule 12(e): Motion for a More Definite Statement. If a pleading to which a
responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably
be required to frame a responsive pleading, the party may move for a more definite
statement before interposing a responsive pleading. The motion shall point out the
defects complained of and the details desired. If the motion is granted and the order of
the court is not obeyed within 10 days after notice of the order or within such other time
frame as the court may fix, the court may strike the pleading to which the motion was
directed or make such order as it deems just.
d.
Rule 84. Forms. The forms contained in the Appendix of Forms are sufficient under the
rules and are intended to indicate the simplicity and brevity of statement which the rule
contemplate.
e.
Form 9. Complaint for Negligence.
1.
2.
3.
4.
5.
Allegation of jurisdiction.
On June 1, 1936, in a public highway called Boylston Street in Boston,
Massachusetts, D negligently drove a motor vehicle against P who was the crossing
said highway.
As a result P was thrown down and had his leg broken and was other injured, was
prevented from transacting his business, suffered great pain of body and mind, and
incurred expenses for medical attention and hospitalization in the sum of one
thousand dollars.
Wherefore P demands in judgment against D in the sum of ____ dollars and costs.
NOTE: Since contributory negligence is an affirmative defense, the complaint need
contain no allegation of due care to P.
THE LENIANCY OF THE FEDERAL RULES APPROACH TO PLEADING (page 177)
1.
Pleadings Rule. The FRCP do not require a pleading with “facts sufficient to constitute a cause
of action,” but only that there by “a short and plain statement of the claim showing that the pleader
is entitled to relief.” Dioguardi. “A complaint should not be dismissed for failure to state a claim
unless it appears beyond doubt that the P can prove no set of facts in support of his claim which
would entitle him to relief.” Conley. “The FRCP do not require a claimant to set out in detail the
facts upon which he bases his claim.” Conley. “All that is required is a short and plain statement
that will give the D fair notice of what the P’s claim is and the grounds upon which it rests. Such
simplified notice pleading is made possible by the liberal opportunity for discovery and the other
pretrial procedures to disclose more precisely the basis of both claim and defense and to define
more narrowly the disputed facts and issues.” “Rule 8(f) requires that all pleadings shall be
construed as to do substantial justice, thus the FRCP reject the approach that pleading is a game of
skill.” Conley. “Federal courts must rely on summary judgment and control of discovery to week
out unmeritorious claims.” Leatherman.
2.
More Definite Statement. 12(e) Rule. A 12(e) motion for a more definite statement may be
granted in “a pleading is so vague and ambiguous that a party cannot reasonably be required to
frame a responsive pleading.” A 12(e) motion should not be granted unless the complaint is so
excessively vague and ambiguous as to be unintelligible and as to prejudice the D seriously in
attempting to answer.”
3.
A summary of 12(b)(6): Page 192. Three different types of failure to state a claim upon which
relief can be granted. (1) No such cause of action exists; (2) such a cause of action exists, but the
P does state even rudimentary information, such as that provided in Form 9 of the FRCP, to
suggest that the P may conceivably have a cause of action; (3) there is a known cause of action,
and the P states the facts with specific specificity to demonstrate that the facts alleged, even if true,
do not correspond with the cause of action that the P had in mind.
Pleading Fraud. There is tension between the specificity required under Rule 9(b) and the liberal
pleading of the FRCP. The degree of specificity required will be dependent on the facts of the
case. A well-pleaded claim of fraud normally includes the time, place, and content of the false
representations, the facts misrepresented, and the nature of the detrimental reliance. Bower.
4.
5.
Pleading more than one claim in a pleading rule. Rule 8(e)(2) allows a P to plead two or more
statements of a claim, even within the same count, regardless of consistency.
6.
Dioguardi. 2nd Cir. 1944. Facts: Dioguardi was not an attorney, and drew up his own complaint.
He stated very generally that the D had stolen two cases of bottles belonging to P, and claimed that
he was the first bidder at $110 but that D sold the goods to another. The district court granted D’s
motion to dismiss for failing to state facts “sufficient to constitute a cause of action.” P amended
the complaint and the district court made a final judgment dismissing the complaint. Holding and
Rationale: The complaint does not have to contain facts sufficient to state a cause of action.
Under the FRCP, all that is required is that the complaint contains a statement showing that the
person making the complaint is entitled to relief. The challenge to the complaint went only to its
face, the court should be careful not to deny a person his day in court because of the form of his
complaint. D did not need to move on the complaint alone; he could have disclosed the facts from
his point off view, in advance of a trial, by asking for a pre-trial hearing or by moving for a
summary judgment with supporting affidavits.
7.
Conley. Supreme Court, 1957. Facts: Black union members alleged a failure on the part of the
union to fairly represent them. Holding and Rationale: The FRCP require a short and plain
statement of the claim that will give the D fair notice of what the claim is and the grounds upon
which it rests. The complaint here sufficient alleged that the Ps were fired unlawfully and that the
union failed to represent them. Notice pleading is made possible by the liberal FRCP.
8.
Leatherman. Supreme Court, 1992. Holding: A federal court cannot apply a “heightened
pleading standard” – more stringent than the usual pleading requirements of Rule 8(a) – in civil
rights cases alleging municipal liability under § 1983. Rule 9(b) does impose a particularity
requirement in two specific instances – fraud or mistake – but does not include § 1983. If Rules 8
and 9 were rewritten today, § 1983 claims might be added to the specificity requirement of Rule 9,
but that is a result which must be obtained by amending the FRCP, and not be judicial
interpretation. Federal courts must rely on summary judgment and control of discovery to week
out unmeritorious claims.
9.
Bower. S.D.N.Y. 1986. Facts: P and D end a personal and business relationship, and P alleged
that D promised to provide P and her daughter with financial security, as long as P didn’t remarry.
Holding: A 12(e) motion for a more definite statement may be granted in “a pleading is so vague
and ambiguous that a party cannot reasonably be required to frame a responsive pleading.” A 12(e)
motion should not be granted unless the complaint is so excessively vague and ambiguous as to be
unintelligible and as to prejudice the D seriously in attempting to answer.” This complaint
employs the term “defendant” without specifying which particular D is referred to. There is
tension between the specificity required under Rule 9(b) and the liberal pleading of the FRCP.
The degree of specificity required will be dependent on the facts of the case. A well-pleaded
claim of fraud normally includes the time, place, and content of the false representations, the facts
misrepresented, and the nature of the detrimental reliance. (page 187). The motion dismiss for
failure to state a claim is disfavored and is seldom granted.
10. Henry. 2nd Cir. 1994. Facts: Henry sought reimbursement for her husband’s medical expenses
under her company health insurance plan. She was subsequently fired by her employer on the
grounds that she failed to supply accurate information in submitting the claims. She was black,
and in her Title VII complaint, she alleged in the alternative, that she had supplied accurate
information, and that white male employees had received more lenient sanctions for similar
misconduct. Holding: Rule 8(e)(2) allows a P to plead two or more statements of a claim, even
within the same count, regardless of consistency. P argued that (1) she was unlawfully fired
because of her sex and race when white male employees received lenient sanctions for the same
misconduct; and alternatively (2) she said she supplied proper medical information.
REAL PARTY IN INTEREST AND ANONYMOUSE P’S (PAGE 203)
1.
Rule 17 (page 63). Parties P and D; Capacity. (a): Real party in interest. Every action shall
be prosecuted in the name of the real party in interest. An executor, administrator, guardian,
bailee, trustee of an express trust, a party with whom or in whose name a contract has been made
for the benefit of another, or a party authorized by statute may sue in that person’s own name
without joining the party for whose benefit the action is brought; and when a statute of the U.S. so
provides, an action for the use of benefit of another shall be brought in the name of the U.S. No
action shall be dismissed on the ground that it is not prosecuted in the name of the real party in
interest until a reasonable time has been allowed after objection for ratification of commencement
of the action by, or joinder or substitution of, the real party in interest; and such ratification,
joinder of substitution shall have the same effect as if the action had been commenced in the name
of the real party in interest.
a.
2.
FRCP 17(b): 17(b) is really the floor; it tells us that the capacity of the individual to sue
or be sued is to be determined by the state law, of a corporation under the law under
which it was incorporated. It is asking: is this an individual that can hold the legal right
(with respect to persons, it is usually yes).
DM II. N.D. Ga. 1989. Facts: A Georgia company sued a Tennessee company, who were coowners of a hospital in Columbus, for opening a competing hospital, alleging a breach of fiduciary
duty. The D alleged that the real party in interest, and the only one who could bring suit, was the
partnership as a whole. The Ps as individual partners were not real parties in interest. Holding:
By looking the Georgia law, the court found that law broad enough that the claims of each partner
may be asserted individually or jointly. That law gave each partner a right of action. Therefore,
each was a real party in interest, as required under FRCP 17.
3.
Anonymous plaintiffs. Doe. S.D.N.Y. 1988. Facts: P was made to undergo additional testing
by the life insurance company because the company considered P to fit a homosexual profile and
create additional insurance risks. He brought suit for discrimination, and wanted use a pseudonym
to protect his privacy. Holding: Generally, lawsuits are public events and the public has a
legitimate interest in knowing the pertinent facts. FRCP 10(a) requires that a complaint should
include the names of the parties, and FRCP 17 requires that suits are prosecuted in the name of the
real party in interest. Under special circumstances, courts will allow parties to use fake name,
particularly where necessary to protect privacy in cases such as abortion, transsexuality, and
illegitimate children. Where a party risks public identification as a homosexual, an exception to
the general rule of disclosure is created.
1.
Preliminary motions. When served with a complaint, you should first note how much time you
have to respond so that you do not lose by default. Look to Rule 12(a) for applicable time periods,
or maybe file for an extension under Rule 6(b). When faced with a complaint, having determined
the time table, a good place to begin is with FRCP 12 and 8.
a.
A motion for a more definite statement. FRCP 12(e): This is available if the
complaint is so vague or ambiguous that your client cannot reasonably be required to
formulate a response. The motion should include a description of the defects complained
of and the details required. This motion must be made, as per Rule 12(e), before
interposing the responsive pleading. You can’t answer and then bring the motion.
b.
A motion to strike. 12(f): This asks the court to delete from a pleading any insufficient
defense or any redundant, immaterial, impertinent, or scandalous matter. This rule
imposes time limit, though the court can act on its own initiative at any time to strike the
matters described in the rule. If a P lists several causes of action, and one of them fails to
state a claim upon which relief can be granted, the D can use 12(f) on the ground that the
count is immaterial, or can use a 12(b)(6) motion.
c.
Motion to dismiss. FRCP 12(b) lists the seven permitted motions to dismiss. You can
either raise these defenses as part of your answer, or by preliminary motions prior to
filing an answer. One consideration is Rule 15(a) which permits a party to amend her
pleading “once as a matter of course at any time before a responsive pleading is served.”
Since motions are not defined as pleadings, as per Rule 7(a), filing preliminary motions
will not cut off the P’s absolute right to amend, but filing an answer will. This may not
be a large consideration since, under Rule 15(a), “leave shall be freely given when justice
so requires.”
i
FRCP 12(b)(7): failure to join a party under Rule 19. This rule refers to the
failure to join an indispensable party in accordance with Rule 19. Ds can use Rule
19 strategically to insist that an indispensable party be joined in circumstances where
joinder is impossible, because it would destroy subject matter jurisdiction or because
the P is unable to obtain jurisdiction over the indispensable party. The net result may
be dismissal.
ii
Other contexts for 12(b) motions. Such defenses or motions should be considered
in other situations, such as by a P when she faces a counterclaims or a co-defendant
who faces a cross-claim (Rule 8(a) and 8(b)).
WAIVER OF 12(B) DEFENSES
4. Losing the right to four of the 12(b) motions by omission – failure to consolidate.
a.
One way to lose a 12(b) defense is bringing one 12(b) defense, but omitting others. This
is the purpose of Rule 12(g).
b.
Rule 12(h): A defense of lack of jurisdiction over the person, improper venue,
insufficiency of process, or insufficiency of service of process (a) is waved if omitted
from a motion in the circumstances described in Rule 12(g), or (b) if it is neither made by
motion under this rule nor included in a responsive pleading or amendment thereof
permitted by Rule 15(a) to be made as a matter of course.
c.
What to do. If you file a 12(b) motion prior to your answer, you should include the less
favored defenses at the same time; if you answer, without having brought 12(b) motions,
include plausible less favored defenses in your answer.
5.
What 12(b) motions aren’t waived. The defenses of failure to state a claim upon which relief
can be granted, failure to join an indispensable party under Rule 19, and lack of subject matter
jurisdiction fare not waived by a failure to consolidate them with other 12(b) motions nor by
failing to include them in your answer. 12(h)(2). Rule 12(h)(3) says that “whenever it appears by
suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the
court shall dismiss the action.” Similarly “an objection of failure to state a legal defense to a
claim” is not waived.
6.
FRCP 12(c): motion for judgment on the pleadings. This is rarely used, but it is possible that
upon consideration of all the pleadings, which usually will be a complaint and an answer, that the
P or D must win. For example, when the allegations taken as true, show that the statute of
limitations has run, coupled with an answer that raises the statute of limitations as an affirmative
defense.
7.
Strategy. Although the favored 12(b) defenses are not waived by omission in the answer of
failure to consolidate with other 12(b) motion, it is common practice for a D’s lawyer to include
them in their answer if applicable. Sometimes, they refrain from such a defense. A D’s lawyer
might not wish to draw attention to a potential weakness in the P’s case, as demonstrated by a
weakness in its complaint, at an early stage of the litigation.
ANSWERS PAGE 212
1.
Answers. If you don’t bring any 12(b) defenses by separate motion, your answer will potentially
contain four types of material: (1) admissions and denials to the averments in the P’s complaint
(FRCP 8(b)); (2) 12(b) defenses; (3) affirmative defenses (FRCP 8(c)); and (4) counterclaims and
cross-claims (FRCP 14) or otherwise seek to add parties. For example, the D might consider
adding another D to a counterclaim in accordance with Rule 13(h), or try to further enlarge the
case through a motion to consolidate (FRCP 42(a)), or by encouraging someone else to intervene
(FRCP 24). Or the D might try to reduce the number of parties through a motion for misjoinder
(FRCP 21). D should also consider whether to claim a jury by trial.
f.
Admissions and denials. Rule 8(b) requires admission or denial of each averment,
except when a party is without knowledge or information sufficient to form a belief as to
the truth of an averment. All pleading are subject to FRCP 11. Rule 8(d) says the when
a responsive pleading is required; averments not denied are taken as admitted, except for
the amount of damages.
g.
Strategy. A major purpose of the answer is to narrow the issues and apprise the parties
of what is in dispute. Ds are very careful not to admit anything that they dispute, because,
absent an amendment changing the admission to a denial, it will be taken as true for the
remainder of the case. Sometimes, D states that the P has alleged a legal conclusion that
does not require admission or denial.
h.
Rule 8(b): Defenses; Form of Denials. A party shall state in short and plain terms the
party’s defenses to each claim asserted and shall admit or deny the averments upon which
the adverse party relies. If a party is without knowledge or information sufficient to form
a belief as to the truth of an averment, the party shall so state and this has the effect of a
denial. Denials shall fairly meet the substance of the averments denied. When a pleader
intends in good faith to deny only a part or a qualification of an averment, the pleader
shall specify so much of it as is true and material and shall deny only the remainder.
Unless the pleader intends in good faith to controvert all the averments of the preceding
pleadings, the pleader may make denials as specific denials of designated averments or
paragraphs or may generally deny all the averments except such designated averments or
paragraphs as the pleader expressly admits; but, when the pleader does so intend to
controvert all its averments, including averments of the grounds upon which the court’s
jurisdiction depends, the pleader may do so by general denial subject to the obligations
set forth in Rule 11.
12. Reasonable efforts to discover information. Some courts have insisted that parties not use the
“without knowledge or information sufficient to form a belief phrase of 8(b) as an excuse to avoid
making reasonable inquiry prior to admitting or denying averments. Rule. A D is held to exert
reasonable effort to get knowledge of a fact, and a fact denied for lack of information may be
taken as true if the party has the information but doesn’t make a reasonable attempt to find it.
a.
Greenbaum. E.D. Pa. 1973. Facts: Greenbaum, a postal employee, was hurt when he
fell in the post office parking lot on his day off. He alleged in his complaint that he was a
business invitee because he was there to buy stamps. The post office had a document
showing that he was there to pick up his check, but over three year passed after the
complaint before it found this document. The post office moved for dismissal, arguing
that a federal law provides the exclusive remedy for injuries to workers while they are
picking up their check. The post office had consistently answered the complaint by
saying they lacked sufficient knowledge or information to admit or deny P’s allegation.
Holding: D failed to use relevant documents, and the accident occurred more than five
years earlier, yet the post office never raised this issue before. There were at least five
pretrial conferences where there was no disagreement about this issue. The post office is
held to exert reasonable effort to obtain knowledge of a fact, and a fact denied for lack of
information may be taken as admitted if the party does have the information but doesn’t
make a reasonable attempt to find it.
13. Enough information to form a belief. Controlled Environment. N.D. Ill. 1997. A party
lacking first hand or personal knowledge of the validity of the allegations in a complaint, but who
has enough information to form a belief about the truth of those claims, may interpose a denial
upon “information and belief.” The party must disclaim both information and belief. It is
common to lack absolute knowledge of the existence of a fat, but usually one has enough
knowledge to form a belief regarding the existence of a fact. The FRCP requires those answering
to admit whenever they have knowledge to form such a belief. Lack of knowledge or belief
should be used only when he answering has no clue about the opponent’s claim.
AFFIRMATIVE DEFENSES (PAGE 216)
1.
Rule 8(c): Affirmative Defenses. In pleading to a preceding pleading, a party shall set forth
affirmatively accord and satisfaction, arbitration and award, assumption of risk, contributory
negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality,
injury by fellow servant, laches, license, payment, release, res judicata, statute of frauds, statute of
limitations, waiver, and any other matter constituting an avoidance or affirmative defense. When
a party has mistakenly designated a defense as a counterclaim or a counterclaim as a defense, the
court on terms, if justice so requires, shall treat the pleading as if there had been a proper
designation.
2.
Pleadings. It is safe to include all potential affirmative defenses in the answer, all it used to be
commonplace to assume that the failure to list an affirmative defense in the answer would mean D
has waived it, unless amendment was permitted. Some courts have held that a D does not waive
an affirmative defense by failing to include it in the answer, absent a showing of prejudice to the P.
3.
Gomez v Toledo. Supreme Court, 1980. Facts: Gomez brought suit under 42 U.S.C. § 1983,
alleging that he was fired in violation of due process. The district court dismissed the claim
because Gomez was required to plead that D acted in bad faith. Holding: A P does not need to
allege bad faith in order to state a claim. He must only allege that some person has deprived him
of a right, and that they acted under color of state law. The Court has never indicated that
qualified immunity is relevant to P’s cause of action, instead it is an affirmative defense. Gomez
tells us that we can’t be completely sure that it will still be treated as an affirmative defense.
Rehnquist wants to let the D plead qualified immunity, and et the P bear the burden of persuasion.
AMENDMENTS (PAGE 221)
1.
Generally. Much of modern civil litigation revolves around discovery, and during that stage new
facts, and consequently unpleaded causes of action and defenses, often emerge. Since the trial
judge may tell them they cannot introduce evidence of causes of action and defenses absent from
their pleadings, lawyers frequently want to amend their pleadings. Rule 15 controls whether one
can amend a pleading.
2.
Important parts. The critical portions are 15(a) stating that leave to amend shall be freely given
when justice so requires and 15(c) which describes when an amendment relates back to the date of
the original pleading.
3.
Rule 15(b) dilemma. It states: “When issues not raised by the pleadings are tried by express or
implied consent of the parties, they shall be treated in all respects as if they had been raised in the
pleadings.” If one objects, the opponent will move to amend and “leave shall be freely given
when justice so requires;” if one doesn’t object, the risk is that one has given implied consent. It is
probably better to object when you think your opponent is introducing evidence beyond the
pleadings. The general defenses to why justice would require amendment are: the opponent has
unreasonably delayed raising the issue, although this argument will fails without a showing of
prejudice; you have been prejudiced in your preparation for the case by the delay; the new issue is
raised in bad faith, such as for the purpose of clouding real issues; or the new issue is futile. 15(b)
allows an objecting party a continuance to prepare to meet the new issue.
4.
Supplemental pleadings. 15(d): sometimes events happen after the original pleading that are
relevant, but could not have been pleaded at the time because they didn’t yet occur. If a new claim
has run and the statute of limitations has run, the pleader who seeks the supplemental pleading will
have to rely on the provision of 15(c) dealing with “relation back” of amendments.
5.
FRCP 15. Amended and Supplemental Pleadings.
a.
b.
Amendments. A party may amend the party’s pleading once as a matter of course at any
time before a responsive pleading is served or, if the pleading is one to which no
responsive pleading is permitted and the action has not been placed upon the trial
calendar, the party may so amend it at any time within 20 days after it is served.
Otherwise a party may amend the party’s pleading only be leave of court or by written
consent if justice so requires. A party shall plead in response to an amended pleading
within the time remaining for response to the original pleading or within 10 days after
service of the amended pleading, whichever period may be the longer, unless the court
otherwise orders.
Amendments to Conform to the Evidence. When issues not raised by the pleadings are
tried by express or implied consent of the parties, they shall be treated in all respects as if
c.
d.
they had been raised in the pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and to raise these issues may be made
upon motion of any party at any time, even after judgment; but failure so to amend does
not affect the result of the trial of these issues. If evidence is objected to at the trial on
the ground that it is not within the issues made by the pleadings, the court may allow the
pleadings to be amended and shall do so freely when the presentation of the merits of the
action will be subserved thereby and the objecting party fails to satisfy the court that the
admission of such evidence would prejudice the party in maintaining the party’s action or
defense upon the merits. The court may grant a continuance to enable the objecting party
to meet such evidence.
Relation Back of Amendments. An amendment of a pleading relates back to the date of
the original pleading when (1) relation back is permitted by the law that provides the
statute of limitations applicable to the action, or (2) the claim or defense asserted in the
amended pleading arose out of the conduct, transaction, or occurrence set forth or
attempted to be set forth in the original pleading, or (3) the amendment changes the party
of the naming of the party against whom a claim is asserted if the foregoing provision (2)
is satisfied, within the period provided by Rule 4(m) for service of the summons and
complaint, the party to be brought in by amendment (A) has received such notice of the
institution of the action that the party will not be prejudiced in maintaining a defense on
the merits, and (B) knew or should have known that, but for a mistake concerning the
identity of the proper party, the action would have been brought against the party.
Supplemental Pleadings. Upon motion of a party the court may, upon reasonable notice
and upon such terms as are just, permit the party to serve a supplemental pleading setting
forth transactions or occurrences or events which have happened since the date of the
pleading sought to be supplemented. Permission may be granted even though the original
pleading is defective in its statements of a claim for relief or defense. If the court deems
it advisable that the adverse party plead to the supplemental pleading, it shall so order,
specifying the time therefore.
6.
Relation back. The most litigated provision of Rule 15 concern statute of limitations and whether
such a statute can be met by having the additional claim or defense relate back to the date of the
original pleading. If you sought to add a second federal claim to your first, after the statute of
limitations had run, relation back would be governed by 15(c)(2). But if you sought to add a new
party to your initial federal cause of action after the applicable statute of limitation s had run, the
more stringent provisions of 15(c)(3) would apply. Careful lawyers often place the exact language
to be amended within the motion to amend, and then attach the entire pleading in the form it
would take if the amendment were granted.
7.
Not automatic. 15(c) is a liberal policy. It requires same transaction, conduct, occurrence, notice
within 120 days after complaint was (this is from the Singletary case) filed, no prejudice, knew or
should have known that but for a mistake….” The notice has to be given such that the party is not
prejudiced by the delay. Telling them within the statute of limitations is not a per se not prejudice.
You would make an argument that it was not prejudice. A 15(a) hearing could happen within the
statute of limitations. They will be given leave to amend as justice requires. The Ds must show
that the delay is unreasonable and unduly prejudiced. What makes a delay unreasonable? When
he already had all the information he needed at the time of the original complaint but waited to
amend. Justice requires unreasonable delay, prejudice (evidence going stale). When delay or
other things would seriously prejudice the new party’s ability to defend the case, the relation back
theory should not be used.
a.
Singletary. 3rd Cir. 2001. Facts: P filed in district court of Penn. a § 1983 suit and state
law claims for wrongful death. In the first complaint, P included “unknown corrections
officers” as Ds. To win, P must be able to (1) amend her complaint to add Regan, against
whom P has her only viable case, and (2) have it relate back to her original complaint
under 15(c)(3) to overcome the defense of statute of limitations. A week after filing her
response to a summary judgment motion, P moved to amend her complaint to add Regan.
The district court denied P leave to amend on grounds that that claim was be barred by
the statute of limitations because it did not relate back under Rule 15(c)(3). Holding:
The SOL for this action is two years, which expired the day P filed her complaint. P
moved to amend by adding Regan almost two years after the SOL had run. P argues that
the amendment did not violate the SOL because the it relates back to the original
complaint under 15(c)(2). 15(c)(3) imposes three conditions which must be met for
relation back of an amended complaint seeking to substitute newly named Ds. (1) The
parties do not dispute that the claim against the newly named Ds must have arisen out of
the conduct, transaction, or occurrence set forth or attempted to be set forth in the original
pleading. (2)(3) The second and third conditions must be met within the period provided
by rule 4(m) which is 120 days after the filing of the complaint. The second condition is
that the newly named D have received notice of the action within the 120 day period that
the party will not be prejudiced in maintaining a defense. The third condition is that the
newly named D must have known, or should have known, that but for a mistake made by
the P concerning the newly named party’s identity, the action would have been brought
against the newly named party in the first place. Notice in the context of Rule 15(c)(3)
does not require actual service of process on the party sought to be added; notice is
deemed to have occurred when a party with some reason to expect his involvement as a D
hears of the litigation through informal means, such as via sharing an attorney with an
original D, or notice via an identity with an originally named D - the parties are so closely
related in their business operations that the suit against one provides notice of the
litigation to the other. P’s lack of knowledge of a particular D’s identity can be a mistake
under Rule 15(c)(3)(B). Many courts have rejected this argument.
b.
Christopher (page 232). Mass. 1990. Facts: Christopher’s parents filed suit for
wrongful death against someone hired by their landlord to remove lead paint from their
apartment, which caused the death. Their first complaint said “John Doe” and was
replaced by “John Duffy” in their amended complaint. Ps then amended again to name
five paint companies as Ds and to raise new theories of liability. Holding: A motion to
amend should generally be given. When delay or other things would seriously prejudice
the new party’s ability to defend the case, the relation back theory should not be used.
Here a party previously unconnected with the case was being served long after the SOL
had run. To defend, the new Ds would have to undergo extensive discovery. It would be
difficult to show the way in which the child was exposed to lead. The workman who
allegedly did the work was dead. The court had discretion to determine whether adding
new Ds or new causes of action should be allowed under relation back.
SANCTIONS (PAGE 256)
1.
Rule 11 Generally. The 1983 amendment to Rule 11 used mandatory sanctions as a means of
forcing lawyers to conduct adequate factual and legal investigations prior to commencing suit.
Although the 1993 amendment eased the stringency of the 1983 rule, the Supreme Court continues
to think that FRCP 11 will deter frivolous litigation.
2.
FRCP 11. Signing of Pleadings, Motions, and Other Papers; Representation to Court;
Sanctions.
a.
b.
Rule 11(a): Signature. Every pleading, written motion, and other paper shall be signed
by at least one attorney of record in the attorney’s individual name, or, if the party is not
represented by an attorney, shall be signed by the party. Each paper shall state the
signer’s address and telephone number, if any. Except when otherwise specifically
provided by rule or statute, pleadings need not be verified or accompanied by affidavit.
An unsigned paper shall be stricken unless omission of the signature is corrected
promptly after being called to the attention of attorney of party.
Rule 11(b): Representations to Court. By presenting to the court (whether by signing,
filing, submitting, or later advocating) a pleading, written motion, or other paper, an
c.
d.
attorney or unrepresented party is certifying that to the best of the person’s knowledge,
information, and belief, formed after an inquiry reasonable under the circumstances, (1) it
is not being presented for any improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of litigation; (2) the claims, defenses,
and other legal contentions therein are warranted by existing law or by a nonfrivolous
arguemtn for the extension, modification, or reversal of existing law or the establishment
of new law; (3) the allegations and other factual contentions have evidentiary support or,
if specifically so identified, are likely to have evidentiary support after a reasonable
opportunity for further investigation or discovery; and (4) the denials of factual
contentions are warranted on the evidence or, if specifically so identified, are reasonably
based on a lack of information or belief.
Rule 11(c): Sanctions. If, after notice and a reasonable opportunity to respond, the court
determines that subdivision (b) has been violated, the court may, subject to the conditions
stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that
have violated subdivision (b) or are responsible for the violation. (1) How Initiated. (A)
By Motion. A motion for sanctions under this rule shall be made separately from other
motions or requests and shall describe the specific conduct alleged to violate subdivision
(b). It shall be served as provided in Rule 5, but shall not be filed with or presented to the
court unless, within 21 days after service of the motion (or such other period as the court
may prescribe), the challenged paper, claim, defense, contention, allegation, or denial is
not withdrawn or appropriately corrected. If warranted, the court may award to the party
prevailing on the motion the reasonable expenses and attorney’s fees incurred in
presenting or opposing the motion. Absent exceptional circumstances, a law firm shall
be held jointly responsible for violations committed by its partners, associates, and
employees. (B) On Court’s Initiative. On its own initiative, the court may enter an order
describing the specific conduct that appears to violate subdivision (b) and directing an
attorney, law firm, or party to show cause why it has not violated subdivision (b) with
respect thereto. (2) Nature of Sanction; Limitations. A sanction imposed for violation of
this rule shall be limited to what is sufficient to deter repetition of such conduct or
comparable conduct by others similarly situated. Subject to the limitations in
subparagraphs (A) and (B), the sanction may consist of, or include, directives of a
nonmonetary nature, an order to pay a penalty into court, or, if imposed on motion and
warranted for effective deterrence, an order directing payment to the movant of some or
all of the reasonable attorney’s fees and other expenses incurred as a direct result of the
violation. (A) Monetary sanctions may not be awarded against a represented party for a
violation of subdivision (b)(2). (B) Monetary sanctions may not be awarded on the
court’s initiative unless the cour tissues its order to show cause before a voluntary
dismissal or settlement of the claims made by or against the party which is, or whose
attorneys are, to be sanctioned. (3) Order. When imposing sanctions, the court shall
describe the conduct determined to constitute a violation of this rule and explain the basis
for the sanction imposed.
Rule 11(d): Inapplicability to Discovery. Subdivisions (a) through (c) of this rule do not
apply to disclosures and discovery requests, responses, objections, and motions that are
subject to the provisions of Rules 26 through 37
3.
What are you attesting to? (1) no improper purposes, (2) the claims they are pursuing exist
under existing law (or you’re making a nonfrivilous argument for changing existing law), (3) if
you don’t say “this is likely to have evidentiary support after a reasonable investigation” then you
are basically attesting that what you claim DOES have some evidentiary support, (4) the denials
are based on the evidence or reasonably based on a lack of information. This is an ongoing
obligation; unless you abandon the claim, you are still bound by it later on. In general, if you have
a fact that ends up being immaterial, you wouldn’t expect the other side to pursue sanctions (the
rule shouldn’t be used for trivial matters).
4.
The Safe Harbor Provision. The safe harbor provision of the new Rule has generated a substantial
amount of litigation. The party seeking sanctions have to draft a motion, serve the other party, and
wait 21 days to see if they correct it; THEN if they don’t you file the motion with the court.
Sanctions are discretionary instead of mandatory. 11(c) (2) (a) says that monetary sanctions will
not be imposed against a represented party whose lawyer manipulates the law. The “safe harbor
provision” applies when the other party serves you. When the court initiates the sanctions, the
safe harbor provision doesn’t apply. (11(c) (1) (b)). They will give you a chance to be heard, but
the 21 day period does not apply.
a.
Progress Federal Savings Bank: E.D. Pa. 1996. Facts: Progress sued D for breach of
contract, fraud, misrepresentation, intentional interference, and conspiracy. The court
dismissed two counts, and later granted D’s motion for summary judgment. Three
months later, D filed a motion for Rule 11 sanctions against P. Holding: The safe harbor
provision of Rule 11 allows attorneys a chance to withdraw frivolous or unsupportable
claims during the pendency of a case. The purpose of avoiding frivolous proceedings is
frustrated if a party waits until after the suit to file the claims. The warnings D gave to P
were not sufficient to trigger the safe harbor provision. There is no evidence that P
would not have withdrawn its groundless claims.
b.
NOTES: This case indicates that the primary purpose of the rule is as a corrective
function – to get the other party to correct their mistakes; i.e. you’re supposed to do it
right away. There’s nothing for the court to correct. If you view this rule as punitive,
then this reasoning wouldn’t fly. Courts predominately think about Rule 11 as a
corrective tool. It is not, in fact, operating primarily as a punishment tool – its primary
function is corrective. The Court rejects National’s proposed arguments to Rule 11.
They do make a good argument that where the Court rules on summary judgment before
the 21 days have run, there might be room for an exception.
c.
What effect does Rule 11 have on the pleading requirements under Rule (8)(a)? It
doesn’t actually change the pleading requirement, but in terms of practice, Rule 11 seems
to impose tighter requirements on what you’re pleading (you must have some basis in
evidence). You can be in compliance with 8(a) and still be subject to sanctions, but it is
not practical to do so.
SIMPLE JOINDER (PAGE 268)
1.
Generally. When drafting a complaint, a lawyer must think not only about her causes of action of
claims, but also about how many claims to join against the same defendant, and how many
plaintiffs and defendants to include in one suit.
2.
Joinder. In federal court, the breadth of permissible joinder of claims is fairly simple. FRCP 18
provides that a P can include as many claims against a D as she wants, even if they are totally
unrelated. Rule 42(b), however, allows a judge to separate claims for trial for reasons of
convenience, avoiding prejudice, and economy. If you do not bring all of your potential causes of
action and remedies that arise from the same transaction at the same time, a final judgment will
normally result in your not being able to bring those other causes of action or remedies later.
a.
FRCP 18: Joinder of Claims and Remedies. (a) Joinder of Claims. A party asserting
a claim to relief as an original claim, counterclaim, cross-claim, or third-party claim, may
join, either as independent or as alternative claims, as many claims, legal, equitable, or
maritime, as the party has against an opposing party. (b) Joinder of Remedies;
Fraudulent Conveyances. When a claim is one heretofore cognizable only after another
claim has been prosecuted to a conclusion, the two claims may be joined in a single
action; but the court shall grant relief in that action only in accordance with the relative
substantive rights of the parties. In particular, a P may state a claim for money and a
claim to have set aside a conveyance fraudulent as to that P, without first having obtained
a judgment establishing the claim from money.
b.
3.
FRCP 42(b): Separate Trials. The court, in furtherance of convenience or to avoid
prejudice, or when separate trials will be conducive to expedition and economy, may
order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of
any separate issue or of any number of claims, cross-claims, counterclaims, third-party
claims, or issues, always preserving inviolate the right or trial by jury as declared by the
7th amendment or as given by a statute of the U.S.
Transaction. The concept of transaction pervades joinder issues. The courts tend to look to
whether there is a sufficient overlap of facts or evidence, and to whether claims are logically
related to each other. In close cases, trial judges will want to know why it will be convenient,
efficient, or fair for the court to keep the claims joined; evidence, witnesses. Rule 21 permits the
court to drop or add any non-necessary party at any stage in the action on any terms “as are just.”
a.
FRCP 20: Permissive Joinder of Parties. (a) Permissive Joinder. All persons may join
in one action as Ps if they assert any right to relief jointly, severally, or in the alternative
in respect of or arising out of the same transaction, occurrence, or series of transactions
or occurrences and if any question of law or fact common to all these persons will arise
in the action. All persons may be joined in one action as Ds if there is asserted against
them jointly, severally, or in the alternative, any right to relief in respect of or arising out
of the same transaction, occurrence, or series of transactions or occurrences and if any
question of law of fact common to all Ds will arise in the same action. A P or D need not
be interested in obtaining or defending against all the relief demanded. Judgment may be
given for one or more of the Ps according to their respective rights to relief, and against
one or more Ds according to their respective liabilities. (b) Separate Trials. The court
may make such orders as will prevent a party from being embarrassed, delayed, or put to
expense by the inclusion of a party against whom the party asserts no claim and who
assets no claim against the party, and may order separate trials or make other orders to
prevent delay or prejudice.
b.
FRCP 21: Misjoinder and Non-Joinder of Parties. Misjoinder of parties is not ground
for dismissal of an action. Parties may be dropped or added by order of the court on
motion of any party or of its own initiative at any stage of the action and on such terms as
are just. Any claim against a party may be severed and proceeded with separately.
4.
Rule. The court tells us that (under 20a), with respect to Ps, we need a similar occurrence and a
common question of law and fact. With respect to joined Ds, we are interested in whether there is
a common transaction or occurrence.
5.
Kendra. E.D. Pa. 1978. (Page 270). Facts: Ps include Delores, her children E, P, T, K, J, M, R,
and J; and E’s husband, R. Ds are the City of Philadelphia; Police Commissioner O’Neill; officials
of the Police Department’s Homicide Division, Chief Patterson, Chief Inspector Golden, Simmons,
and Tiers; Strohm, Richardson, Cassidy, Gannon, Miller, Brady, Pitney, Vassor, and D’Amico,
Tuffo, and other unidentified members of the Police Department. It is alleged that each of the
individual Ds separately and in concert, acted under color of Pennsylvania law and, intentionally
and deliberately engaged in the unlawful conduct described. They are sued individually and in
their official capacity and jointly and severally. Richard Rozanski and Joseph and Michael were
arrested at gun point without probable cause by Ds Vassor and D’Amico and taken to
Headquarters. They were questioned for 17 hours by Strohm, Richardson, Cassidy, and Gannon.
They complained of physical abuse during this time. Elizabeth was taken from her home to
Headquarters and questioned. On the same evening, Dolores voluntarily went to Headquarters
where she was illegally interrogated, coerced into signing a release authorizing the search of her
house and forcibly detained for nine hours. Seven days later, Ds Brady and Pitney went to the
Kedra home, demanding to see Richard Rozanski. All the Ps except Dolores was home at the time.
Ds broke into the house and searched the house without a warrant. The Ps were charged with a
variety of things, including murder, of which they were later acquitted. Procedural Questions:
Ds contend that there has been an improper joinder of parties under FRCP 20(a). Ds argue that
Ps’ claims against them do not arise out of the same transaction, occurrence, or series of
transactions or occurrences. In multiparty cases joinder is limited by the requirement of Rule 20(a)
that Ps or Ds may not be joined in the same case unless some of the claims by or against each
party arise out of common events and contain common factual or legal questions. Ds have not
argued that common factual and legal questions are not present in this case; the similarity of the
claims against each D makes it abundantly clear that there are common issues. Once parties are
joined under Rule 20(a), Rule 18(a)’s allowance of unlimited joinder of claims against those
parties is fully applicable. The joinder provision of the FRCP is very liberal because unification of
claims in a single action is more convenient and less expensive and time consuming for the parties
and the court. Here, even though the various acts of which the complaint is made span a
considerable period of time, they are part of an alleged pattern.
COUNTERCLAIMS AND CROSS-CLAIMS (PAGE 277)
1.
2.
Counterclaims Generally. A counterclaim is a claim asserted against an opposing party, usually
by a D against a P. A counterclaim may seek any kind of relief that the court is competent to give.
The relief may or may not be related to the P’s claim. A counterclaim may ask for relief that
merely neutralizes or cancels out the P’s claim, or it may seek relief that exceeds the P’s desired
relief. Counterclaims can be either compulsory or permissive.
a.
FRCP 13: (a) Compulsory Counterclaims. A pleading shall state as a counterclaim any
claim which at the time of serving the pleading the pleader has against any opposing
party, if it arises out of the transaction or occurrence that is the subject matter of the
opposing party’s claim and does not require for its adjudication the presence of third
parties of whom the court cannot acquire jurisdiction. But the pleader need not state the
claim if (1) at the time the action was commenced the claim was the subject of another
pending action, or (2) the opposing party brought suit upon the claim by attachment or
other process by which the court did not acquire jurisdiction to render a personal
judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13.
(b) Permissive Counterclaims. A pleading may state as a counterclaim any claim against
an opposing party not arising out of the transaction or occurrence that is the subject
matter of the opposing party’s claim. (f) Omitted Counterclaim. When a pleader fails to
set up a counterclaim through oversight, inadvertence, or excusable neglect, or when
justice requires, the pleader may by leave of court set up the counterclaim by amendment.
b.
Banque. S.D.N.Y. 1993. Facts: P sued D on a promissory note. D conceded liability on
the note, and P moved for summary judgment. D opposed, alleging that it had a
counterclaim for a set off on money that P owed D from related transactions. The note
said that D waived his right to state any counterclaim. D contended that this provision
was unenforceable since, under FRCP 13(a), D’s counterclaim was compulsory and
would be waived if not heard. Holding: A counterclaim may be compulsory or
permissive. The issues raised by the counterclaim were not sufficiently interrelated to
render D’s counterclaim compulsory because both the issues of law and fact were not
largely the same. Since it was only permissive, the waiver in the note was enforceable.
Cross-claims Generally. A cross-claim is a claim between co-parties, usually Ds. In contrast to
the blanket permissiveness or the counterclaim, a cross-claim may not assert every claim that
possible exists between co-parties. Instead, a cross-claim must be closely related to the transaction
of the original claim asserted by the P. However, once a cross-claim has been legitimately
asserted, consider the expansiveness of Rule 18(a). Cross-claims are always permissive. A party
who does not bring a claim under 13(g) will not be barred by res judicata, waiver, or estoppel from
asserting that claim at another time.
a.
FRCP 13(g): Cross-claim Against Co-Party. A pleading may state as a cross-claim any
claim by one party against a co-party arising out of the transaction or occurrence that is
the subject matter either of the original action or of a counterclaim therein or relating to
b.
c.
any property that is the subject matter of the original action. Such cross-claim may
include a claim that the party against whom it is asserted is or may be liable to the crossclaimant for all or part of a claim asserted in the action against the cross-claimant.
NOTES: Cross Claims: Once you get your foot in the door, you can use 18(a)
theoretically to bring other claims. Odds are that the judge severs it and tries it separately.
The rules of joinder will apply to every combination of P and D.
NOTES: The date that attaches to the cross claim and counterclaims: Every one of these
claims has to stand on its own two feet. The statute of limitation that applies then is
given by that claim (it is not the original statute of limitations for the original claim).
IMPLEADERS - THIRD PARTY PRACTICE (PAGE 281)
1.
Impleaders Generally. Rule 14 governs the procedure though which a D can bring a third party
in the action. The rule permits the court to allow a D to implead a person not already a party to the
action who is purportedly liable to the D for all or part of the D’s liability to the P. In such an
instance, the original D, now acting as a third-party P, impleads a third-party D.
2.
Rule. The district court has considerable discretion in deciding whether to permit a third-party
complaint. The court must balance the benefits against the potential prejudice to the P and thirdparty Ds. In order for a third-party P to implead a third-party D, three conditions must be met. 1)
It can only be used to bring in one who is not already a party, 2) the third-party P has to have a
claim against the new party it is trying to implead (If A sues B, and B says “it is not my fault, it is
C’s fault,” that alone does not make a good impleader). B needs a theory of liability against C.
NOTE: C doesn’t have to be a party in order for one side to blame C, assuming the evidence is
relevant. 3) B not only needs a theory of liability against C, but it has to be for all or part of A’s
claim against B.
3.
Rule 14. Third Party Practice. (a) When D May Bring in Third Party. At any time after
commencement of the action a defending party, as a third-party P, may cause a summons and
complaint to be served upon a person not a party to the action who is or may be liable to the third
party P for all or part of the P’s claim against the third-party P. The third-party P need not obtain
leave to make the service if the third party P files the third party complaint not later than 10 days
after serving the original answer. Otherwise the third party P must obtain leave on motion upon
notice to all parties to the action. The person served with the summons and third-party complaint,
hereinafter called the third-party D, shall make any defenses to the third-party P’s claim as
provided in Rule 12 and any counterclaims against the third-party P and cross-claims against other
third party Ds as provided in Rule 13. The third party D may assert against the P any defenses
which the third party P has to the P’s claim. The third-party D may also assert any claim against
the P arising out of the transaction or occurrence that is the subject matter of the P’s claim against
the third-party P. The P may assert any claim against the third-party D arising out of the
transaction or occurrence that is the subject matter of the P’s claim against the third-party P, and
the third-party D thereupon shall asset any defenses as provided in Rule 12 and any counterclaims
and cross-claims as provided in Rule 13. Any party may move to strike the third-party claim, or
for its severance or separate trial. A third-party D may proceed under this rule against any person
not a party to the action who is or may be liable to the third-party D for all or part of the claim
made in the action against the third party D. (b) When P May Bring in Third Party. When a
counterclaim is asserted against a P, the P may cause a third party to be brought in under
circumstances which under this rule would entitle a D to do so.
4.
Gross v Hanover. S.D.N.Y. 1991. Facts: This case came out of an insurance claim after some
jewelry was lost. The D1 insurance company wanted to move pursuant to Rule 14(a), to implead
2 third party D2s. P consigned over $200,000 worth of diamonds with a jewelry store owned by
D2. The parties agreed that the loss of the jewelry was the result of a theft at D2’s store. D1’s
third-party complaint seeks to implead D2 on the ground that they will be liable to D1, should D1
be liable to P. Evidence indicated that one of the D2 may have conspired in the crime. The
proposed third-party complaint asserts claims against D2 (the employee) for negligent handling of
the jewels as P’s bailee, and against D2 (the employee) for actual conversion of the jewels, and
against D2 (the owner) for the negligent hiring. Holding: Rule 14(a) provides that at any time
after commencement of the action a defending party, as a third-party P, may cause a summons and
complaint to be served upon a person not a party to the action who is or may be liable to the thirdparty P for all or part of the P’s claim against the third-party P. This rule serves judicial efficiency
by eliminating the need for the D to bring a separate action against a third party who may be
secondarily liable to the D for all or part of the P’s original claim. The district court has
considerable discretion in deciding whether to permit a third-party complaint. The court must
balance the benefits against the potential prejudice to the P and third-party Ds. In this case, D1’s
claim arises from the same core of facts which is determinative of P’s claim. P argues that the
claims are speculative and should be denied. First, there is some question as to whether P may
attack the merits of the proposed third-party claims at this stage of the proceedings. Second, the
words “is or may be liable” in Rule 14(a) make an impleader proper even though the third-party
P’s liability is not automatically established once the third-party P’s liability to the original P has
been determined. Finally, the proposed third party claims are sufficiently alleged, for Rule 14(a)
purposes. P also argues that they will suffer prejudice if discovery is expanded to include the
third-party claims. There is little evidence that D1 was so slow in brining this motion that it
should be denied. The court believes that the prejudice to be felt by the P is outweighed by the
benefits of more efficient litigation. If P believes that D is using its third-party claims to delay the
progress of the principal complaint, he should so inform the court. In order for a third-party P to
implead a third-party D, three conditions must be met. 1) It can only be used to bring in one who
is not already a party, 2) the third-party P has to have a claim against the new party it is trying to
implead (If A sues B, and B says “it is not my fault, it is C’s fault,” that alone does not make a
good impleader). B needs a theory of liability against C. NOTE: C doesn’t have to be a party in
order for one side to blame C, assuming the evidence is relevant. 3) B not only needs a theory of
liability against C, but it has to be for all or part of A’s claim against B. Example: A lent money
to C, and B agreed to be C’s guarantor. If the guarantor has to pay the lender, then the guarantor
ordinarily has a claim against the borrower for what the guarantor was forced to pay the lender
because of the borrower’s debt. If A (lender) sues B (guarantor), then B could implead C
(borrower) because B will have a claim against C for all of what B will have to pay A. B has a
claim against C if, but only if, A prevails on A’s claim against B. If B has a claim regardless of
the outcome of A v. B, then this is not a valid impleader. Rule 14(a) does not allow the D to assert
a separate and independent claim even though the claim arises out of the same general set of facts
as the main claim. The Rule 8(a) pleading requirements explicitly apply to a Rule 14 third-party
complaint. Rule 7 makes clear that a third-party complaint is ordinarily a “pleading” and that a
third-party answer is required if a third-party complaint is served. An answer by a third-party D
should include Rule 8(b) admissions and denials and 8(c) affirmative defenses. Rule 12(b)
requires that all defenses to a claim for relief in any pleading, including third-party claims, shall be
asserted in the responsive pleading thereto if one is required. Therefore, the third-party D should
raise 12(b) defenses against the third-party P either by answer or motion. The third-party D may
also, according to Rule 14, assert against the P any defenses which the third-party P has to the P’s
claim. The third-party D may, but is not required to, assert any claims arising out of the same
transaction against the P. The original P may assert a claim against the third-party D if the claim
arises out of the same transaction.
5.
NOTES: Why is this good and the other one isn’t? The 3p D’s liability is in some way
dependent on the outcome of the main claim here – that is, the 3p D only owes the 3p P is the 3p P
is found liable with respect to the original D; in Olavarrieta, the Board of Regents claim is not
dependent on the original D’s liability to the original P. Rule 14 does not allow you to assert a
separate and independent claim even though it may arise from the same set of facts. The rule says
“is or maybe.” It can allow to you bring an impleader even if you don’t know that you will win.
You just need to see a claim that meets the other requirements. The legal basis for the claim can
be utterly independent – it has it’s own 8a requirements, statute of limitations.
NECESSARY AND INDISPENSABLE PARTIES (PAGE 286)
1.
Generally. There are some situations where it does not make sense to let a case proceed without
an omitted party, either for reasons concerning the efficiency of the court of because it is unfair to
the absentee. FRCP 19(a) lists the type of parties who should be joined if possible. Such parties
are often called necessary. Rule 19(a)(1) describes the situation where a P cannot get complete
relief among those already parties without the absent party’s being joined. Say A sues B who has
found her ring but not returned it; A seeks the return of the ring. B has already conveyed the ring
to C. B cannot give A the sought relief; C is a necessary party in the sense the C should be joined
as a D if possible.
2.
There are due process concerns when a non-named party may lose its legal rights without notice
and the right to be heard. Rule 19(a)(i) looks to whether the litigation, in a person’s absence, will
as a practical matter impair or impede the person’s ability to protect an interest which the absentee
claims relating to the subject of the action. (lease, lessor, sublessee).
3.
Rule 19(a)(ii) covers the situation where a person’s absence may leave any of the persons already
parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent
obligations by reason of the claimed interest. (A sues B, a life insurance company on a policy that
named Joe Smith as the beneficiary. There are three Joe Smiths).
4.
If an absentee is a Rule 19(a) person, then that person must be joined if possible in order for the
case to proceed. Rule 19(b) goes on to provide that if the absent 19(a) person cannot be brought
in, then the court must consider the factors listed in 19(b) in order to decide whether the action can
in equity and good conscience proceed absent the 19(a) person. If the court decides that in equity
and good conscience it should not proceed, only then is it proper to label the absentee
indispensable. It is just another way of saying that the unavailable 19(a) person is so critical to the
suit that it must stop without the person’s addition.
FRCP 19: Joinder of Persons Needed for Just Adjudication.
a. Rule 19(a): Persons to be Joined if Feasible. A person who is subject to service of
process and whose joinder will not deprive the court of jurisdiction over the subject
matter of the action shall be joined as a party in the action if (1) in the person’s absence
complete relief cannot be accorded among those already parties, or (2) the person claims
an interest relating to the subject of the action and is so situated that the disposition of the
action in the person’s absence may (i) as a practical matter impair or impede the person’s
ability to protect that interest or (ii) leave any of the persons already parties subject to a
substantial risk of incurring double, multiple, or otherwise inconsistent obligations by
reason of the claimed interest. If the person has not been so joined, the court shall order
that the person be made party. If the person should join as a P but refuses to do so, the
person may be made a D, or, in a proper case, an involuntary P. If the joined party
objects to venue and joinder of that party would render the venue of the action improper,
that party shall be dismissed from the action.
b. Rule 19(b): Determination by Court Whenever Joinder Not Feasible. If a person as
described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall
determine whether in equity and good conscience the action should proceed among the
parties before it, or should be dismissed, the absent person being thus regarded as
indispensable. The factors to be considered by the court include: first, to what extent a
judgment rendered in the person’s absence might be prejudicial to the person or those
already parties; second, the extent to which, by protective provisions in the judgment, by
the shaping of relief, or other measures, the prejudice can be lessened or avoided; third,
whether a judgment rendered in the person’s absence will be adequate; fourth, whether
the P will have an adequate remedy if the action is dismissed for nonjoinder.
5.
1.
The Role of Discovery. The primary function of the discovery process is to provide litigants with
an opportunity to review all of the pertinent evidence prior to trial. It reduces the chance of trial
by ambush and facilitates determination upon the merits of the case. It promotes settlement
because it enables parties to assess the merits of their case well before trial. It reduces the drain on
the court because it educates the parties and often narrows the scope of issues in dispute. The
discovery process has become the focal point of considerable criticism in the media. Some
litigants impose onerous burdens upon their adversaries, whether through excessive discovery
requests or through production of an avalanche of documents to hide the needle.
2.
At common law, discovery was virtually nonexistent. Trial by surprise was the norm because at
the time of trial many litigants did not know what their adversary’s position or evidence would be.
The adoption of the discovery provisions of the FRCP made discovery a vital part of the litigation
process. Discovery serves to: eliminate surprise; preserve testimony so it will be available in case
of the death or other unavailability of witness; diminish the importance of pleadings; increase the
effectiveness of summary judgment; focus the trial on the main points of controversy; and permit
each side to assess the strengths and weaknesses of their cases in advance, frequently making trial
unnecessary because of informed settlement.
3.
The American system is unique in its embrace upon expansive discovery. It is also important to
note the unique role that civil litigation plays in the fabric of American society. We rely heavily
on private civil litigation to enforce norms of safety, to provide recompense for individual harms,
and to vindicate individual rights. Our social safety net is much more porous than most Western
democracies. As a litigator, discovery will predominate your practice.
4.
Rule 26 (page 82): Generally speaking, a party is entitled to demand the discovery of any matter
that: is relevant to the claim or defense of any party; is not unreasonably cumulative or
burdensome; and is not privileged.
a.
Relevancy: The relevancy criterion is virtually without boundary. A party is entitled to
discovery not only material that is relevant and admissible at trial, but also of information
that appears reasonably calculated to lead to the discovery of admissible evidence. FRCP
26 (b)(1). It is an uphill battle to convince a court that discovery sought by opposing
counsel is so unrelated to any claim or defense of any party that it cannot be said to be
relevant within the expansive meaning in Rule 26.
b.
Not unreasonably burdensome or cumulative: This is a product of a 1983 amendment
to Rule 26. Rule 26 had provided for unlimited discovery unless the ordered otherwise.
The court can now limit the frequency of discovery when the information sought is
unreasonably cumulative or duplicative, or is obtainable from some other source that is
more convenient.
c.
Not privileged: This exempts privileged material from discovery – even if it is relevant.
The most frequently invoked privilege is the attorney client privilege, which precludes
the discovery of confidential communications between an attorney and her client. A
1970 amendment to Rule 26 placed limitations on the discovery of trial preparation
materials and on the methods for obtaining information about experts and their opinions.
Hickman v Taylor outlines the Court’s general attitude toward to purpose of the new
paradigm of open-handed, party controlled discovery.
d.
Hickman. Supreme Court, 1947. Facts: Five crewmen drowned when a tug sank. At a
public hearing four survivors were interviewed, and their testimony was recorded and
made available. Shortly after, the attorney for the tug owner interviewed the survivors in
preparation for possible suit, and other persons with information. Suits were filed by
representatives of the deceased, and four settled. Hickman brought this action, and filed
interrogatories asking for any statements taken from crew members, as well as any oral or
written statements, records, reports, or other memoranda made concerning any salvaging
and repair of the rug and the death of the deceased. Taylor wouldn’t give him his notes
alleging it was protected by the attorney-client privilege. Holding: The discovery rules
are to be liberally treated, since mutual knowledge of the relevant facts by both parties is
essential to proper litigation. Discovery does have boundaries. Limitations arise upon a
showing of bad faith or harassment or when the inquiry seeks material which is
irrelevant or privileged. The material Hickman wants isn’t protected by attorney-client
privilege, but it does constitute the work product of the lawyer. Generally, the policy
against invading the privacy of an attorney’s work is well recognized and essential to
the proper functioning of the system that the party seeking it has a burden to show
reasons to justify production. Interviews, statements, memoranda, correspondence,
briefs, mental impressions, obtained in the course or preparation for possible suit is such
work product, but is not free from discovery in all cases. When relevant and nonprivileged facts are hidden in an attorney’s file and where a showing of those facts is
essential to the case, discovery will be proper, but there must be a showing of necessity.
Hickman seeks oral and written statements of witnesses whose identities are known and
who are available. It was neither shown to be necessary nor justified to invade the
attorney’s privacy. The lawyer admitted he wanted the statements to help him prepare for
trial; insufficient to create an exception to the policy of protecting the privacy of an
attorney’s work product.
e.
FRCP 26(b)(3): Trial Preparation: Materials. A party may obtain discovery of
documents and tangible things otherwise discoverable under (b)(1) of this rule and
prepared in anticipation of litigation or for trial by or for another party or by or for that
other party’s representative only upon a showing that the party seeking discovery has
substantial need of the materials in the preparation of the party’s case and that the party is
unable without undue hardship to obtain the substantial equivalent of the materials by
other means. In ordering discovery of such materials when the required showing has
been made, the court shall protect against disclosure of the mental impressions,
conclusions, opinions, or legal theories of an attorney or other representative of a party
concerning the litigation.
1.
Generally. A motion for summary judgment is typically made after discovery and before trial.
As originally construed, Rules 8(a) and 12(b)(6) made it relatively easy for a P to survive the
discovery stage – because the drafters didn’t think it made much sense to weed out cases at the
pleadings stage – but this mechanism weeds out cases after discovery where it is clear what the
result at trial would be.
2.
Differences. In a 12(b)(6) motion, there exist only the allegations in the complaint. In summary
judgment, the judge, in trying to predict what the evidence will be at trial, can consider the
pleadings, affidavits, and discovery. Unlike a 12(b)(6) motion or the summary judgment motion,
the directed verdict motion will be based on the evidence actually admitted at the trial.
3.
D usually wins. Most motions for summary judgment or directed verdict that result in a final
judgment for the moving party are motions made by the D. For a P to win at summary judgment,
she would have to convince the judge that she will have admissible, persuasive, noncontroverted
evidence to prove every element of her cause of action. In short, the moving P would have to
convince the judge that she has met both her production and persuasion burdens in a manner
permitting no reasonable argument. On the other hand, the D would have to poke a hole in only
one of the elements, and as to that, she would have to show only that the P’s production burden
cannot be met.
4.
Material Fact. Rule 56(c) states that the moving party is entitled to summary judgment if the
listed materials show that there is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law. Material fact has a specialized meaning. If a D
convinces a judge that at trial the P will have no admissible evidence to permit a finding as to any
one of the P’s elements, that would render dispute as to facts with respect to any other element
“immaterial.” A judge could believe at the summary judgment stage that there are loads of
disputed facts, but if the P still will have to lose because of evidence as to one element, that
renders all other disputes immaterial.
5.
D usually makes the motion. The D has the burden of convincing the judge to grant summary
judgment based on the argument that the P will have an insufficiency of evidence to meet its
production burden on at least one element. In these cases, the moving party (D) has a positive
burden to do something to win on the motion, but it is with respect to a negative: that the P will
not have a sufficiency of evidence to survive a directed verdict. Rule 56(e) presents a problem:
What does the moving party (typically the D) have to do in order to require the nonmoving party
to show that she will have a sufficiency of evidence to meet her production burden? For example,
if there has been no discovery, can the D move for summary judgment, thus forcing the P to reveal
the supporting evidence for each element of P’s case?
6.
Strategic Considerations. To file a summary judgment motion and memorandum or brief in
support thereof means educating opposing counsel about your view of their case and, in some
instances, of your own case. On the other hand, it may be a way of smoking out opposing
counsel’s best case in advance of trial.
7.
Rule. Under Rule 56(c), summary judgment is proper if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law. In our view, the plain language of Rule 56(c) mandates the entry of summary judgment,
after adequate time for discovery and upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial. A party seeking summary judgment always bears the
initial responsibility of informing the district court of the basis for its motion, and identifying
those portions of the record, together with any affidavits which it believes demonstrate the absence
of a genuine issue of material fact. But we find no express or implied requirement in Rule 56 that
the moving party support its motion with affidavits or other similar materials negating the
opponent’s claim. Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings
and be her own affidavits designate specific facts showing that there is a genuine issue for trial.
Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of
evidentiary materials listed in Rule 56(c), except the mere pleadings themselves. Celotex. The
Supreme Court is explicit that the summary judgment motion requires the court to predict what
would happen to the case at the direct verdict stage: “The standard for summary judgment under
Rule 56(c) mirrors the standard for a directed verdict under Rule 50(a), which is that the trial just
must direct a verdict if there can be but one reasonable conclusion as to the verdict. Anderson.
The Court held that Zenith, the nonmoving party with the burden of proof at trial, had failed to
present evidence at the summary judgment stage that tends to exclude the possibility that the
alleged conspirators acted independently. The Court would not allow P to survive summary
judgment based on the proposed testimony of P’s expert that there was a conspiracy. Matsushita.
a.
NOTES: After Celotex, what are the rules for summary judgment? What if someone
brings a motion for summary judgment before discovery? Could a court convert it under
8(f) to a 12(b) judgment on the pleadings. Judges may deal with it in different ways, but
you couldn’t win. You could do it in a case where there were stipulated facts, because
there is some basis to go on, so you could get summary judgment, or partial summary
judgment, on those facts. The sufficiency of pleadings of the P’s case are tested by the
12(b)(6) motion. Then you’ve got discovery, and develop a universe of evidence. For
motions brought by the D, the sufficiency of P’s burden of production is tested by D’s
motion for summary judgment. The P’s burden of persuasion is tested by the directed
verdict. So what about P’s bringing motions for summary judgment (56(a)). What would
a P have to show to win on summary judgment? You would have to support every
element of the P’s case, and to be such that no reasonable person could disbelieve it.
Consequently, you don’t see many P’s bringing or winning motions for summary
judgment. When looking at a summary judgment motion, ask if the moving party has the
burden of persuasion on the issue that’s being brought into question. The Celotex rule
applies (and Adickes as modified) when the moving party on summary judgment does
not have the burden of persuasion as to the substantive issue that is being presented. Pg.
436: If the moving party will bear the burden of persuasion at trial, that party must
support its motion with credible evidence – using any of the materials specified in 56(c).
You have to ask if the moving party has the burden of persuasion. If they don’t, it’s the
Celotex standard, if they do, it’s a much harder standard. What you’re looking for in a
situation in which the facts as to one element of the P’s case are such that the P cannot
prevail on that element, and it would follow that the P cannot possibly win, and thus
summary judgment would be appropriate. If there are no disputed facts, then the case is
well positioned for either side for summary judgment. Would one of them automatically
win? It is not always clear whether it is more appropriate for a jury or judge to make
decisions. (Was X’s action reasonable?) Judges can be triers of fact in some settings.
8.
FRCP 56: Summary Judgment.
a.
b.
c.
d.
e.
f.
Rule 56(a): For Claimant. A party seeking to recover upon a claim, counterclaim, or
cross-claim or to obtain a declaratory judgment may, at any time after the expiration of
20 days from the commencement of the action or after service of a motion for summary
judgment by the adverse party, move with or without supporting affidavits for a
summary judgment in the party’s favor upon all or any party thereof.
Rule 56(b): For Defending Party. A party against whom a claim, counterclaim, or crossclaim is asserted or a declaratory judgment is sought may, at any time, move with or
without supporting affidavits for a summary judgment in the party’s favor as to all or any
part thereof.
Rule 56(c): Motion and Proceedings Thereon. The motion shall be served at least 10
days before the time fixed for the hearing. The adverse party prior to the day of hearing
may serve opposing affidavits. The judgment sought shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law. A summary
judgment, interlocutory in character may be rendered on the issue of liability alone
although there is a genuine issue as to the amount of damages.
Rule 56(d): Case Not Fully Adjudicated on Motion. If on motion under this rule
judgment is not rendered upon the whole case or for all the relief asked and a trial is
necessary, the court at the hearing of the motion, by examining the pleadings and the
evidence before it and by interrogating counsel, shall if practicable ascertain what
material facts exist without substantial controversy and what material facts are actually
and in good faith controverted. It shall thereupon make an order specifying the facts that
appear without substantial controversy, including the extent to which the amount of
damages or other relief is not in controversy, and directing such further proceedings in
the actions as are just. Upon the trial of the action the facts so specified shall be deemed
established, and the trial shall be conducted accordingly.
Rule 56(e): Forms of Affidavits; Further Testimony; Defense Required. Supporting and
opposing affidavits shall be made on personal knowledge, shall set forth such facts as
would be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters state therein. Sworn or certified copies of all papers of
parts thereof referred to in an affidavit shall be attached thereto or served therewith. The
court may permit affidavits to be supplemented or opposed by depositions, answers to
interrogatories, or further affidavits. When a motion for summary judgment is made
and supported as provided in this rule, an adverse party may not rest upon the mere
allegations or denials of the adverse party’s pleading, but the adverse party’s response,
by affidavits or as otherwise provided in this rule, must set forth specific facts showing
that there is a genuine issue for trial. If the adverse party does not so respond, summary
judgment, if appropriate, shall be entered against the adverse party.
Rule 56(f): When Affidavits are Unavailable. Should it appear from the affidavits of a
party opposing the motion that the party cannot for reasons stated present by affidavit
facts essential to justify the party’s opposition, the court may refuse the application for
g.
9.
judgment or may order a continuance to permit affidavits to be obtained or depositions to
be taken or discovery to be had or may make such other order as is just.
Rule 56(g): Affidavits Made in Bad Faith. Should it appear to the satisfaction of the
court at any time that any of the affidavits presented pursuant to this rule are presented in
bad faith or solely for the purpose of delay, the court shall forthwith order the party
employing them to pay to the other party the amount of the reasonable expenses which
the filing of the affidavits caused the other party to incur, including reasonable attorney’s
fees, and any offending party or attorney may be adjudged guilty of contempt.
Early Rule. Adickes. Supreme Court, 1970. Facts: P was refused service at the D restaurant
and arrested for vagrancy. She brought suit under § 1983, first because she was racially
discriminated against, and second, that there was a conspiracy between D and the police. A
conspiracy could only have existed if the police had been present in the restaurant prior to her
arrest. P could not show that the police had been there, and D moved for summary judgment,
which was granted. The problem with this case is that it requires “under color of state law,” and
there is a state action requirement. The conspiracy count satisfies the state action requirement of
this claim. If she cannot prove that the restaurant acted in concert with the police, she will not
prevail. Holding and Rationale: In a conspiracy action, summary judgment may not be granted
unless a D can show that no evidence thereof exists. In a motion for summary judgment, the
burden is on the moving party to affirmatively show the absence of a genuine issue as to any
material fact, regardless of the burden being on the other party at trial. At trial, P would have to
prove the presence of police earlier in the day; at the summary judgment level, the burden was on
D to prove they were not. Kress brought forward some evidence indicating that there was no
communication between the police. Adickes brought forward evidence that there was
communication between the police. The court makes it seem like the moving party needs to
exclude the possibility that there was not a policeman in the store. “They didn’t carry their burden
because they didn’t foreclose the possibility that there was a policeman in the store.” If they
wanted to show that there was no policeman in the store…it would be incredibly hard to do (you
might have to locate any and all police officers at the time). What is the party’s initial burden?
According to this case, they would have to provide evidence that there are no facts in dispute.
Kress has to have something more than just saying that the police weren’t in the store. One option
is that you just have to have some evidence that the police weren’t in the store, one is that you
have the burden of persuasion. They can’t possibly mean that the moving party would have to
FORECLOSE any possibility. The case could have been read as requiring the moving party as
carrying the burden of persuasion; but that is not a good reason for a number of reason (it would
be impossible), and the court said the moving party could have supported their contention with
affidavits (and then the P would have been required to bring evidence rejecting that contention).
10. Celotex. Supreme Court, 1986. Facts: P’s husband died, and she sued asbestos companies
alleging that the death was a result of asbestos exposure. One of the companies moved for
summary judgment alleging that no evidence was present that husband was exposed to their
products. Holding: Under Rule 56(c), summary judgment is proper if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any show that
there is no genuine issue as to any material fact and that the moving party is entitled to a judgment
as a matter of law. In our view, the plain language of Rule 56(c) mandates the entry of summary
judgment, after adequate time for discovery and upon motion, against a party who fails to make a
showing sufficient to establish the existence of an element essential to that party’s case, and on
which that party will bear the burden of proof at trial. In such a situation, there can be no genuine
issue as to any material fact since a complete failure of proof concerning an essential element of
the nonmoving party’s case necessarily renders all other facts immaterial. A party seeking
summary judgment always bears the initial responsibility of informing the district court of the
basis for its motion, and identifying those portions of the record, together with any affidavits
which it believes demonstrate the absence of a genuine issue of material fact. But we find no
express or implied requirement in Rule 56 that the moving party support its motion with affidavits
or other similar materials negating the opponent’s claim. Rule 56(e) therefore requires the
nonmoving party to go beyond the pleadings and be her own affidavits designate specific facts
showing that there is a genuine issue for trial. Rule 56(e) permits a proper summary judgment
motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the
mere pleadings themselves. The Adickes case should not be construed to mean that the burden is
on the party moving for summary judgment to produce evidence showing the absence of a genuine
issue of material fact, even with respect to an issue on which the nonmoving party bears the
burden of proof.
a.
NOTES: It makes sense to say that she doesn’t have any evidence to support the P’s
husband’s inhaling of the asbestos by D. What would happen under the Adickes test?
Summary judgment would be denied. The Court changes the rule. The rule after Celotex
is that the moving party (initial D) does not have to have evidence at all: the theory is that
summary judgment happens when the party with the burden of proof can’t produce
evidence to support one of the elements of their case; why make the D produce evidence
negating something there isn’t any evidence for anyway? Generally, the P has the burden
of persuasion. They say the motion (most people read this as changing the rule), the
summary judgment should have been denied in Adickes. This is possible when
everything taken together (at the time of summary judgment) didn’t add up to an
inference that there weren’t police in the store – the P had a sworn statement, and D
didn’t have much evidence that the police weren’t in the store. Now, the moving party
can point out the deficiency in the non-moving party’s case, without their own evidence,
to support this motion. Justice White indicates that there has to be some basis for the
motion, but the basis can merely be looking at the other side’s discovery documents.
NOTE: The moving party has an initial burden of pointing out some defect of the nonmoving party’s case other than just the pleadings. To survive summary judgment, the P
would have to produce some evidence to make it into an issue of fact appropriate for trial.
After that, the D would have to show that the evidence was no good.
11. Anderson. Supreme Court, 1986. The district court had granted summary judgment on the
grounds that in libel suits of this nature, the P had to prove actual malice, and the P did not show
that it would have evidence at the trial permitting such a finding. The appeals court reversed,
saying that the P’s obligation to prove actual malice at the trial by clear and convincing evidence
did not apply at the summary judgment stage. The Supreme Court is explicit that the summary
judgment motion requires the court to predict what would happen to the case at the direct verdict
stage: “The standard for summary judgment under Rule 56(c) mirrors the standard for a directed
verdict under Rule 50(a), which is that the trial just must direct a verdict if there can be but one
reasonable conclusion as to the verdict.
12. Matsushita. Supreme Court, 1986. Zenith brought suit against 21 Japanese companies
manufacturing or selling consumer electronics in America. They alleged that the Japanese
companies had conspired to keep prices high. The Court granted summary judgment for the Ds.
The Court held that “where the record taken as a whole could not lead a rational trier of fact to
find for the non-moving party, there is no genuine issue for trial. The Court held that Zenith, the
nonmoving party with the burden of proof at trial, had failed to present evidence at the summary
judgment stage that tends to exclude the possibility that the alleged conspirators acted
independently. The Court would not allow P to survive summary judgment based on the proposed
testimony of P’s expert that there was a conspiracy. The dissent argued that the Court had
disregarded traditional summary judgment doctrine, and that their disregard for the expert’s
proposed testimony was a clear violation of the judicial obligation not to weigh evidence and
assess credibility when ruling on a summary judgment motion.
1.
Voluntary Dismissal. FRCP 41(a)(1) prescribes when a P has a right to dismiss a case
voluntarily, and FRCP 41(b)(1) describes the court’s power to permit a P to dismiss a case
voluntarily. In a normal case, the P has an absolute right to dismiss voluntarily prior to the
adverse party’s filing an answer of motion for summary judgment. Unless otherwise stated, or
unless the P has previously filed and dismissed the same claim, then such voluntary dismissal will
be without prejudice. Under FRCP 41(a)(2), the P can apply to the court for a voluntary dismissal,
and the court has the power to grant it. This dismissal will also be without prejudice. The “terms
and conditions” invites the court to condition the dismissal on the P’s paying all or part of the D’s
expenses. The court can also permit the dismissal with prejudice, if the case has gone far enough.
Rule 41(d) covers the case where a P has an absolute right to dismiss without prejudice but it is
not the first time the P has had the same claim dismissed. Here, the court can award costs to the
opposing party. There is a conflict over whether federal district courts may award attorney’s fees
under Rule 41(d).
a.
2.
Involuntary Dismissal. Sometimes the court will dismiss a case the P would like to continue.
Pursuant to FRCP 41(b), these dismissals operate as an adjudication on the merits, which is
another way of saying the dismissal has a res judicata effect.
a.
3.
FRCP 41(a): Voluntary Dismissal: Effect Thereof. (1) By Plaintiff; By Stipulation.
Subject to the provisions of Rule 23(e), or Rule 66, and of any statute of the U.S., and
action may be dismissed by the P without order of court (i) by filing a notice of dismissal
at any time before service by the adverse party of an answer or of a motion for summary
judgment, which first occurs, or (ii) by filing a stipulation of dismissal signed by all
parties who have appeared in the action. Unless otherwise stated in the notice of
dismissal or stipulation, the dismissal is without prejudice, except that a notice of
dismissal operates as an adjudication upon the merits when filed by a P who has once
dismissed in any court of the U.S. or of any state an action based on or including the
same claim. (2) By Order of Court. Except as provided in paragraph (1) of this
subdivision of this rule, an action shall not be dismissed at the P’s instance save upon
order of the court and upon such terms and conditions as the court deems proper. If a
counterclaim has been pleaded by a D prior to the service upon the D of the P’s motion to
dismiss, the action shall not be dismissed against the D’s objection unless the
counterclaim can remain pending for independent adjudication by the court. Unless
otherwise specified in the order, a dismissal under this paragraph is without prejudice.
Rule 41(b): Involuntary Dismissal: Effect Thereof. For failure of a P to prosecute or
to comply with these rules or any order of court, a D may move for dismissal of an action
or of any claim against the D. Unless the court in its order for dismissal otherwise
specifies, a dismissal under this subdivision and any dismissal not provided for in this
rule, other than a dismissal for lack of jurisdiction, for improper venue, or for failure to
join a party under Rule 19, operates as an adjudication on the merits.
Directed Verdict (Judgment as a Matter of Law). The judge considering a directed verdict
must consider the evidence of the nonmoving party in the light most favorable to that party. This
mechanism is usually used by a D to defeat a P, on the ground that on at least one element of the
P’s cause of action, no reasonable fact finder could find for the P. As the new version of FRCP 50
says, in cases before a jury, if a claim cannot stand without a party’s having a legally sufficient
evidentiary basis” and such evidence is not presented, then the court may grant a motion for
judgment as a matter of law. As the new rule is worded, a party may move for judgment as a
matter of law at any time before submission to the jury. 50(a)(2). Sufficiency of the evidence is
also applicable to cases without a jury. Rule 52(c) permits the judge to enter judgment of a matter
of law against a party on a claim that the party cannot win, so long as that party has been fully
heard with respect to the issue that cannot be won, and is dispositive of the case.
a.
NOTES: What is a legally sufficient basis? We take all the facts as the non-moving
party says they are, it is still not possible in the mind of the judge for a reasonable jury to
find for the nonmoving party. When a judge makes this ruling, they are saying, as a
matter of law that no jury could find for the nonmoving party. They’re asking judges to
say, as a matter of law, that this doesn’t add up. The other elements of 50(a)(1) are that,
once these two requirements have been met, the court may determine the issue against the
nonmoving party. If it’s crucial to that party’s position, then it may enter judgment as a
matter law. D’s Motions for Directed Verdicts: In some cases they might argue a lack of
evidence to permit P’s conclusions. They could argue that the facts are known, and
undisputed, but are not sufficient as a legal matter. They can also argue that the evidence
is not credible on its face – most circuits read the rule to require evidence contradicting
the testimony. P’s Motion: for every element, there must be evidence that no jury could
find otherwise. If more than one conclusion could be drawn, you give it to the trier of
fact. The motions will be denied. Two places one could go wrong: Falling into what
you believe, and the other one is falling into the language standards – “reasonable” is a
ruling as a matter of law for the judge and often has nothing to do with inferences in the
real world.
b.
4.
Rule 50. Judgment as a Matter of Law in Jury Trials. (a) Judgment as a Matter of
Law. (1) If during a trial by jury a party has been fully heard on an issue and there is no
legally sufficient evidentiary basis for a reasonable jury to find for that party on that
issue, the court may determine the issue against that party and may grant a motion for
judgment as a matter of law against that party with respect to a claim or defense that
cannot under the controlling law be maintained or defeated without a favorable finding
on that issue. (2) Motions for judgment as a matter of law may be made at any time
before submission of the case to the jury. Such a motion shall specify the judgment
sought and the law and the facts on which the moving party is entitled to the judgment.
Judgment Notwithstanding the Verdict (JNOV). Even after the jury has rendered a verdict, a
judge – having previously denied a directed verdict motion on the same grounds – can grant the
party against whom the judgment was rendered a judgment notwithstanding the verdict. The test
is identical to that of directed verdict. Courts have affirmed the requirement that a party move for
directed verdict at the close of all of the evidence in order to bring a motion JNOV. D counsel
usually moves for directed verdict after the P rests, and then, if denied, again after all parties rest.
a.
Rule 50(b): Renewing a Motion for Judgment After Trial; Alternative Motion for
New Trial. If, for any reason, the court does grant a motion for judgment as a matter of
law made at the close of all the evidence, the court is considered to have submitted the
action to the jury subject to the court’s later deciding the legal questions raised by the
motion. The movant may renew its request for judgment as a matter of law by filing a
motion no later than 10 days after entry of judgment – and may alternatively requires a
new trial or join a motion for a new trial under Rule 59.
5.
Motions for a New Trial. Even after the jury renders its verdict, the losing side can still move for
a new trial. Rule 59(a)(1) and (a)(2). Pursuant to Rule 59(d), the judge is explicitly empowered to
grant a new trial on the judge’s own initiative. The rule says that a new trial may be granted in
jury cases for any of the reasons for which new trials have heretofore been granted in actions at
law. Rule 59(a)(1). Assume that the judge becomes convinced that she has made a mistake that
would be reversible error if considered by an appellate court, and that there is no way to correct
the error. More problematic is the granting of new trial motions on grounds that the jury verdict is
so excessive or inadequate as to demonstrate that the jury has misunderstood their duty or acted
with prejudice. This has a discretionary element.
6.
Rule 23 of the FRCP: (a) Prerequisites to a Class Action. One or more members of a class may
sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that
joinder of all members is impracticable, (2) there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the
class, and (4) the representative parties will fairly and adequately protect the interests of the class.
FLOW CHART
Do we want jurisdiction over:
Person
Property
Domiciliary: primary residence
Corporation: incorporated or place
Of business
Status
Must be true in rem action -
For status, we are
about the disposition or ownership
interested in
divorce;.
need personal
jurisdiction
over one spouse.
General juris.of the property only.
Non-resident (non-domiciliary):
Quasi in Rem requires min. con.
Specific
Waiver: not raising
Consent by appearance or forum
Selection-Carnival
Long arm statute
Fairness (International, Asahi)
Due process analysis
Minimum contacts (Inter.)
calder,
abbreviated statement
cases, and find language that
it – for example, worldwide speaks of
“purposeful availment”).
Transitory (Gen. Jur.)
General
Continuous, systematic (Hall)
Fair play
Modern cases: shoe, denkla, worldwide,
asahi, burger king) (have some
of the facts from these
supports
SAMPLE ANALYSIS: Assume we have a long-arm statute. First, we look at the contacts with the forum.
Then we look at the fair play factors. The contacts with the forum are that they sent their pilots to Arizona
for training. We seem to have (1) purposeful availment and (2) a relationship between the forum defendant,
litigation, and forum. This wouldn’t be enough for general jurisdiction, but as to specific jurisdiction you
would have to say that the first step is right on the borderline. On the one hand, the negligence consists of
the choice of this training school. On the other hand, it doesn’t take place in Arizona. Then go on to say,
that even if there was contact, the fair play factors could defeat it. We’ve seen language that where it’s
close, as here, the fair play factors could make it appropriate. Then we have fairness: (1) burden of the D,
(2) interest of the forum state, (3) interest of P. (1) The burden on the D is really high, (2) Arizona doesn’t
have much of an interest in this (they have a flight school that says they don’t train you to fly in the jungle),
(3) we’re not sure what the interests of the P would be.
For the exam: (1) statutory basis; (2) minimum contacts basis (what case is similar); (3) do the analysis of
the fairness burdens, and see how it adds up.
1.
Personal Jurisdiction. In order to entertain an action and enter a valid judgment against a D, a
court must have (1) personal jurisdiction over the D, and (2) adequate notice must be sent to the D
of the action. Since Pennoyer, courts have struggled with the task of defining the requirements
that must be before a court may require a nonresident to appear and defend.
2.
General Federal Personal Jurisdiction. 4(k)(1)(a): Service can be made anywhere the state’s
jurisdiction (where the district court sits) extends to the D. 4(k)(1)(b): Service can be made
anywhere within 100 miles (irrespective of state law) of the district court house on a (1) thirdparty D (under Rule 14), or (2) an indispensable party (under Rule 19(a)).
3.
Four Ways: Personal jurisdiction can be established through (1) in rem; (2) quasi in rem; (3) in
personam; or (4) status.
4.
a.
In rem: This is the power of a court to act with regard to property (usually real estate)
within its borders. An in rem judgment affects the interests of persons in the property,
but unlike in personam judgment, does not create an obligation on the D’s part to pay
money to the P. An action to determine title to property among opposing claimants is an
example of in rem jurisdiction.
b.
Quasi in rem: This is a hybrid and is based on the presence of the D’s property (either
real or personal) within the forum state, but the court can enter judgment for money not
exceeding the value of the property. Unlike the true in rem action, the claim for relief in
a quasi in rem action is unrelated to the property that provides the basis for jurisdiction.
(However, since the Shaeffer case, minimum contacts are needed).
c.
In personam: This is the power of a court to enter a money judgment against the D; and
may, if necessary, be satisfied by seizing and liquidating the D’s assets. An in personam
judgment is said to follow the D, meaning that it must be given full faith and credit and
enforced by any state in which the D or D’s assets are found.
d.
Status: This allows courts to decide cases about status of the litigants, such as marriage
or custody of children, based on the residence of the P in the forum.
How to challenge personal jurisdiction.
1. Collateral attack. This takes place in a separate proceeding. A typical collateral attack
occurs where a nonresident D who is aware of the lawsuit deliberately fails to show up in
court, suffering a default judgment with the intention of challenging jurisdiction when the
P later sues to enforce the judgment in the D’s home state. The risk of this approach is
that the only basis left for opposing the judgment, once it becomes final in the original
lawsuit, is the jurisdictional challenge – the D cannot defend on the merits in the
subsequent enforcement suit. Thus, the collateral attack strategy places all the D’s eggs
in the jurisdictional basket. If the court rejects the challenge, the judgment will be
enforced.
2.
Direct attack. A D files a motion to dismiss for lack of personal jurisdiction (FRCP
12(b)(2)). Although appearance in court is one of the traditional bases for exercising
power over the D, the device of “special appearance” alleviates the D’s dilemma.
3.
Waiver. 12(h)(1). A defense of lack of jurisdiction over the person is waived if omitted
from a motion or included in a responsive pleading or amendment thereof. In federal
court, if you don’t raise it in D’s first response – either in a 12 (b) motion before the
answer, or in the answer itself. You can raise it collaterally if it’s a constitutional
sufficiency.
SERVICE WITHIN THE STATE (IN PERSONAM):
5. The traditional rule. In personam, (1) service within the state or (2) voluntary appearance is
sufficient.
6.
Split decision in Burnham. Scalia (and about three other justices) feels that personal service is
enough; no minimum contacts analysis is required. Brennan thinks personal service is enough
because the minimum contacts analysis is generally satisfied when you have personal service.
It’s a safe bet to say that personal service is enough, categorically. We get at least 4 justices
interested in preserving a traditional form precisely because it is traditional.
7.
Pennoyer. Supreme Court, 1877. Facts: Neff (P) owned land in Oregon. Mitchell brought suit
in Oregon for legal fees owed him by P. P, a nonresident, was served by publication, and Mitchell
obtained a default judgment. P’s land was sold at a sheriff’s sale. Pennoyer (D) purchased the
property. P learned of the sale and brought suit in Oregon to recover the land. P alleged that the
court didn’t have in personam jurisdiction over him. Holding and Decision: States have
jurisdiction over persons and property within its borders. No state can exercise direct jurisdiction
and authority over persons or property outside its borders. The use of jurisdiction over persons or
property within the state often affects people outside it. Service by publication or by other
authorized means may be sufficient for proceedings in rem. The law assumes that property is
always in the possession of its owner or an agent, and that a seizure of the property will inform the
owner. But in personam actions, where the whole point is to determine personal rights, service by
publication is not enough to give the court jurisdiction over the nonresident D. In an action to
determine a D’s personal liability, he must be brought within the court’s jurisdiction by service of
process within the state or by voluntary appearance. NOTES: What he could have done is
attached the property first. Then publication would probably have been enough due to the lower
standards for in rem actions.
8.
Burnham. (page 633). Supreme Court, 1990. Facts: The Burnhams lived in New Jersey. They
separated and the wife moved to California. She filed for divorce there. P came to California on
business once, but otherwise had no other contacts with the state. While there, he was served with
the divorce papers. He contended that his contacts with California weren’t sufficient. Holding
and Rationale: It is a “firmly established principle of personal jurisdiction that courts of a state
have jurisdiction over persons physically present in a state.” Where the nonresident is served
while physically present, no due process implication is made by service of process, no matter what
the reason for his presence may be.
9.
Exception. An exception protects nonresidents from being served when they are served after
being tricking into visiting the state, or while there to testify as a witness or appear as a party in
another suit.
QUASI IN REM:
1. Old Rule. Presence of property in the forum state is sufficient to confer quasi in rem jurisdiction.
2.
Harris v Balk. Supreme Court, 1905. Facts: Harris and Balk were NC residents, and D owed P
$180. P owed E, a Maryland resident, $300. While D was in Maryland, E brought suit and
attached the debt of D to P. D consented, and paid E $180. P then brought suit against D in NC
for the $180. D defended with E’s suit in Maryland. Holding and Rationale: The obligation of
the debtor to pay the debt follows a debtor wherever he goes. He is bound to pay a debt in another
state when sued there. The judgment against D in Maryland was valid because the court had
jurisdiction over D by personal service. P had notice of the suit because he sued D a few days
later. He could have contested it in Maryland but did not.
3.
New Rule. Mere presence of property within a state isn’t sufficient to give jurisdiction to a court
without other contacts as per International Shoe. Instead you have to do the minimum
contacts/fair play analysis. To justify in rem jurisdiction, the basis for jurisdiction must be over
the interests of persons in a thing. If you correctly identify something as a true in rem action, the
owner is amenable to jurisdiction in the state (for a true in rem action – you do not need to do the
fairness analysis). In the case of an injury occurring on the property, that is not a true in rem
action, and you would need to do the minimum contacts analysis. It’s related to the property, but
not a true in rem action. In this opinion, the question of quasi in rem action with respect to real
property is not resolved, but in practice, we take it to mean all quasi in rem actions, and this is
how we should decipher it.
4.
Shaffner v Heitner. (page 619). Supreme Court, 1977. Facts: P owned a share of Greyhound
(D) stock. D had been previous had to an antitrust judgment entered against them in Oregon. P, a
nonresident of Delaware, brought a derivative suit there, where D was incorporated (the suit is
against D’s managers, not the company itself). Personal jurisdiction was based on the presence of
stock deemed to be located in the state of incorporation. A Delaware sequestration statute allowed
property in the state to be seized to compel the owner to submit to in personam jurisdiction. No
stock was really in Delaware, however. D made a special appearance to challenge jurisdiction. D
argued that there were insufficient contacts with Delaware to justify jurisdiction. Holding and
Rationale: Mere presence of property within a state isn’t sufficient to give jurisdiction to a court
without other contacts as per International Shoe. For the type of quasi in rem action (pg. 624),
these are cases where the property which serves as the basis for jurisdiction unrelated to P’s action.
If sufficient contacts do not exist to assume jurisdiction absent the presence of property within the
state, it cannot be invoked on the basis of property within the court’s jurisdiction. The presence of
property within a state may bear on the existence of jurisdiction by providing contacts among the
forum state, the D, and the litigation. Here, the stock is not the subject of the controversy. There
is no claim to ownership of it or injury caused by it. The Ds do not reside in Delaware or have any
contacts there. The injury occurred in Oregon. No activities complained of were done within the
forum. Finally, P is not even a Delaware resident.
5.
Brennan’s Opinion: Brennan thinks generally that the state that incorporates establishes
minimum contacts over derivative suits. Delaware has a very strong interest in adjudicating this:
(page 629) (1) interest in providing restitution, (2) manifest regulatory interest, (3) interest in
providing a forum for its own laws. It is generally accepted that Brennan’s theory applies.
CONSENT
1. Consent Generally. A D can voluntarily appear in court and thereby submit to jurisdiction. We
have also seen that a D who appears in court but fails to assert a defense of lack of personal
jurisdiction in timely fashion waives that objection. By operation of a forum selection clause,
consent to jurisdiction can take place before the dispute even arises.
2.
The overruled implied consent rule. Hess. Supreme Court, 1927. Facts: P alleged that Hess
drove negligently on a Massachusetts highway and injured him. D was a nonresident of
Massachusetts, and no personal service was made on him or property belonging to him was
attached. A Massachusetts law said nonresident motorists appointed the registrar of motor
vehicles as their agent for service in cases of car accidents. The statute called for notice of the
service by registered mail to the D. Holding and Rationale: Cars are dangerous, and the state
may make and enforce laws calculated to promote care on the part of all who us its highways.
This law limits the nonresident’s implied consent to suits arising out of accidents on a highway
involving the nonresident, and requires notice of the service.
3.
Implied Consent. “Doing X in forum state implies consent to forum’s jurisdiction.” After
International Shoe, there isn’t any implied consent in this form. The Carnival Cruise Line looks
like implied consent, but courts will look to something like that as real consent. You would need
to do an International Shoe analysis for implied.
4.
Forum Selection Clauses. These will generally be upheld where reasonable and fair. Reasonable
for the three reasons below; fair – does it discourage litigation, bad faith, achieved through fraud
or overreaching? (657). There is a heavy burden of proof necessary to set them aside on grounds
of inconvenience – Walker v Carnival Cruise (662): “P’s physical disabilities and economic
constraints are so severe that, in combination, they would preclude Ps from having their day in
court, and the fact that Ps seek to vindicate important civil rights.”
5.
Carnival Cruise. (Page 655). Supreme Court, 1991. Facts: While on a D cruise, P slipped on a
deck mat. She filed suit in her state of Washington, claiming negligence of D. The cruise tickets
contained a forum-selection clause saying that any dispute would be litigated in the courts of
Florida, where D was located. Holding and Rationale: A forum-selection clause will be
reasonable and fair as long as it does not limit all liability of the carrier or avoid the right of any
claimant to a trial by a court of competent jurisdiction. (1) Without such a clause, cruise lines
could be subject to litigation in different forums; (2) such clauses dispel confusion about where
suits arising from the contract must be brought and defended; (3) passengers benefit from reduced
fares reflecting the savings from limiting forums. They have also not satisfied the “heavy burden
of proof’ necessary to set aside on grounds of inconvenience (page 657).
GENERAL JURISDICTION
1. Generally. This is the power over all claims whether related to D’s activities within the forum
state or not. It derives from the traditional bases of jurisdiction (domicile, incorporation/or place
of operations, service in state, appearance and consent), as well as from the conduct of such
continuous, systematic, and substantial business. This is the counterpart to the general
jurisdiction that a state has over each of its citizens – they may be sued there on any claim, even
one arising from events that occurred outside the state.
2.
Rule: For general jurisdiction, when the contacts do not relate to the underlying suit, they must be
“continuous, systematic, and substantial,” and a general jurisdiction discussion should include fair
play factors analysis.
3.
Perkins v. Benguet. Supreme Court, 1952. (Page 574). Facts: An Ohio state court could
properly have jurisdiction over a foreign company on a stockholder’s claim unrelated to anything
the D did in Ohio. The company had relocated its president to Ohio. There, he maintained files,
carried out correspondence, drew salary, bank accounts, and had meetings. He had “continuous
and systematic supervision of the company.”
4.
Helicopteros v Hall. Supreme Court, 1984. Facts: Helicopteros (D) was a Colombian
corporation, never having maintained offices or property in Texas. It had bought about 80% of its
helicopter fleet there, and some of its pilots were trained there. During a job with a Peruvian
company, a crash occurred in which Hall’s relative was killed. Hall sued in Texas for wrongful
death. Helicopteros alleged lack of personal jurisdiction. Holding and Rationale: Purchases of
equipment and employee training aren’t enough to give personal jurisdiction. To get general
jurisdiction (when the suit does not arise out of D’s contacts with the state), that D’s contacts with
the forum state must be sufficiently systematic and continuous so that bringing him into that
state would not offend due process. Purchases not related to the transaction giving rise to the suit,
are not sufficiently systematic contacts for a D to be subject to suit there. Here, those were the
only contacts D had with Texas, so Texas’ exercise of jurisdiction was improper.
5.
Brennan’s Dissent (use for exam, even if not general…): He believes there is enough of a
relationship for specific jurisdiction “given the direct relationship between the underlying cause of
action and D’s contacts with the forum, maintenance of the suit in Texas courts does not offend
traditional notions of fair play and substantial justice.” (page 651). He agrees that the cause of
action did not formally ‘arise out of” specific activities in the State of Texas, the wrongful death
claim significantly related to the contacts. The negotiations took place in Texas; the helicopter
was purchased in Texas; and the pilot was trained in Texas. Because D should have expected to
be amenable to suit in Texas, it is fair and reasonable to allow it.
PERSONAL JURISDICTION AND THE INTERNET
1. Sliding Scale. The traditional standard for establishing specific jurisdiction must be adapted so
that it makes sense in the Internet context. Even with expanding technology, the state’s power
remains limited to those within the state and those outside of the state with minimum contacts,
such that the exercise of power would not offend traditional notions of fair play and substantial
justice. In Zippo Manufacturing v Zippo Dot Com (page 669), the court established the “sliding
scale” test to evaluate the nature and quality of a D’s internet activity. “At one end of the
spectrum are situations where a D clearly does business over the Internet…At the other end are
situations where a D has simply posted information on an Internet web site accessible to users in
foreign jurisdictions…The middle ground is occupied by interactive web sites where a user can
exchange information with the host computer. In these cases, the exercise of jurisdiction is
determined by examining the level of interactivity and commercial nature of the exchange of
information that occurs on the web site.” Under Zippo, a state may, consistent with due process,
exercise power over a person outside of the state when that person (1) directs electronic activity
into the state, (2) with the manifested intent of engaging in business or other interactions within
the state, and (3) that activity creates, in a person within the state, a potential cause of action
cognizable in the state’s court’s. Specific jurisdiction in the Internet context may be based only on
an out-of-state person’s Internet activity directed at the state and causing injury that gives rise to a
potential claim cognizable in the state. And while it is true that even in the absence of specific
jurisdiction, general jurisdiction may exist when the D has sufficient contacts within the forum
state, a state may not obtain general jurisdiction over out-of-state persons who regularly and
systematically transmit electronic signals into the state via the Internet based solely on those
transmissions. More would have to be demonstrated, but what and how much more will be
decided at another time.
2.
ALS Scan (page 669). Fourth Circuit, 2002. Facts: ALS is a Maryland company that creates
pictures for use on the Internet. They brought a copyright action against Digital (D) and Digital’s
customer Alternative (D). All Ds are in Georgia. P claims that Alternative used photos owned by
P without their permission, and that Digital, as an ISP, allowed them to do so. Digital filed a
12(b)(2) motion to dismiss for lack of personal jurisdiction. Digital claims that other than through
the Internet, Digital has no contacts with Maryland. Holding and Rationale: A state can’t
exercise personal jurisdiction over a non-resident whose only contact is through the Internet and
not directed at the state. The state’s power remains limited to those within the state and those
outside of the state with minimum contacts, such that the exercise of power would not offend
traditional notions of fair play and substantial justice. P contends Digital’s activity forms a basis
for specific jurisdiction. In Zippo Manufacturing v Zippo Dot Com, the court established the
“sliding scale” test to evaluate the nature and quality of a D’s internet activity: “At one end of the
spectrum are situations where a D clearly does business over the Internet…At the opposite end are
situations where a D has simply posted information on an Internet web site which is accessible to
users in foreign jurisdictions…The middle ground is occupied by interactive web sites where a
user can exchange information with the host computer. In these cases, the exercise of jurisdiction
is determined by examining the level of interactivity and commercial nature of the exchange of
information that occurs on the web site.” Under Zippo, a state may, exercise judicial power over a
person outside of the state when that person (1) directs electronic activity into the state, (2) with
the manifested intent of engaging in business or other interactions within the state, and (3) that
activity creates, in a person within the state, a potential cause of action cognizable in the state’s
court’s. Specific jurisdiction in the Internet context may be based only on an out-of-state person’s
Internet activity directed at the state and causing injury that gives rise to a potential claim
cognizable in the state. Digital did not direct its electronic activity specifically at any target in
Maryland. It did not manifest intent to engage in a business in Maryland. None of its conduct in
enabling a web sited created a cause of action in Maryland. And while it is true that even in the
absence of specific jurisdiction, general jurisdiction may exist when the D has sufficient contacts
within the forum state, a state may not obtain general jurisdiction over out-of-state persons who
regularly and systematically transmit electronic signals into the state via the Internet based solely
on those transmissions. More would have to be demonstrated, but what and how much more will
be decided at another time.
3.
(Page 594): What if alleged defamation occurs on the Internet rather than in print? P brought an
action over D, who had posted things about her on the internet. P sued in Alabama state court. D,
a Minnesota resident, defaulted on advice from counsel. P sued to enforce the Alabama judgment.
The Minnesota Supreme Court agreed with the D: the mere fact that D had known that the subject
of her criticisms lived in Alabama and that the Internet postings would affect her there was not
sufficient to establish jurisdiction in that state, given the universal reach of the Internet.
IN PERSONAM - SPECIFIC
Part One. LONG ARM STATUTES (page 572).
1.
Personal jurisdiction and the federal courts. Congress and the Supreme Court have chosen not
to give the federal courts the full extent of their potential adjudicatory power.
a.
FRCP 4. Personal jurisdiction in federal court is controlled by FRCP Rule 4, which on
its face seems to deal only with service of process. Rule 4(k)(1)(a) incorporates the local
state long-arm statute as a constraint on federal court jurisdiction. The reach of a federal
district court in Illinois is consequently determined by the reach of the state trial courts
there.
b.
Exceptions. FRCP 4(k)(1)(b), the so-called 100-mile bulge rule, authorizes jurisdiction
over an impleaded party not otherwise within the district court’s reach if service was
effectuated within 100 miles of the court.
c.
More dramatically, FRCP 4(k)(2) extends federal power to its outermost constitutional
limits in federal claims cases. This rule was applies when the D was is foreign having
contacts with the United States sufficient to justify application of US law and to satisfy
federal standards for forum selection, but insufficient contact with any single state to
support jurisdiction under state long-arm statute. Three requirements for 4(k)(2): (1) P’s
claim must arise under federal law, (2) the D must be beyond the jurisdictional reach of
any state court, and (3) the exercise of jurisdiction must not violate the D’s rights under
the Constitution (minimum contacts).
d.
Swiss American Bank. (Page 577). The government sued under the RICO Act to recover
illegal drug proceeds that had been forfeited by a depositor in the foreign bank, which
was incorporated and located in Antigua. The third requirement was lacking, as there
were insufficient ties to the US given that the bank had no physical presence and only
intermittent contacts. The Bank had not solicited the depositor’s business in the US;
rather, he had opened the accounts in Antigua.
1.
For in personam specific jurisdiction – this is required. A court must first be authorized by
appropriate legislation to assert jurisdiction. Only then is minimum contacts analysis used to
determine whether the particular assertion is within the permissible boundaries of due process. In the
years after International Shoe, many states enacted “long arm” statutes, which authorized their courts
to exercise jurisdiction over nonresidents who engage in certain enumerated acts within the state.
2.
Limited to arising. Note that the jurisdiction authorized by the long-arm statutes is limited to claims
arising from the enumerated act. The crucial question to be answered is whether the P’s claim arose
out of this activity.
3.
Two step approach. Determining whether a court may assert jurisdiction over a nonresident pursuant
to a long-arm statute requires a two-step inquiry: (1) Does the statute apply to the particular case, and
(2) If so, does it nonetheless reach beyond the constitutional constraints of International Shoe’s
minimum contacts test? The first question is one of statutory construction; the second involves the
substantial body of case law.
4.
Open ended long arm statutes. Some states have opted for an open-ended approach. The California
statute provides that “a court of this state may exercise jurisdiction on any basis not inconsistent with
the Constitution of this state or of the United States.” This method collapses the two-step inquiry into
one step.
Part Two. (1) Minimum Contacts. (page 566)
1.
Generally. In 1945, the Supreme Court finally discarded the old structure, and with it such
fictions as implied consent and presence, in favor of a revised theory of personal jurisdiction
premised on actual connections between D and forum state.
2.
Minimum Contacts 2 part rule. (Page 568). Due process requires only that in order to subject a
D to a judgment in personam, if he is not present within the territorial jurisdiction, he have certain
(1) minimum contacts with the territory such that the maintenance of the suit (2) does not offend
traditional notions of fair play and substantial justice. However, even single or occasional acts
may, because of their nature, quality, and circumstances, be deemed sufficient to render a
corporation liable to suit.
3.
International Shoe. Supreme Court, 1945. Facts: A Washington law called for unemployment
funds requiring contributions by employers. The law allowed authorized the state to issue a notice
of delinquency by mailing the notice to nonresident employers. International was a Delaware
corporation with its principal place of business in St. Louis. They employed 11 to 13 salespersons
under the supervision of managers in Missouri who resided in Washington and did most of their
work there, but could not enter into contracts or collect money. D had no office in Washington
and made no contracts there. Notice was served on one of D’s Washington salespersons, and a
copy of the notice was sent by registered mail to D’s Missouri address. Holding and Rationale:
Due process requires only that in order to subject a D to a judgment in personam, if he is not
present within the territorial jurisdiction, he have certain minimum contacts with the territory such
that the maintenance of the suit does not offend traditional notions of fair play and substantial
justice. An estimate of the inconveniences which would result to the corporation from a trial away
from its “home” is relevant. To require a company to defend suit away from home where its
contact has been casual or isolated activities may be thought to be too unreasonable a burden.
However, even single or occasional acts may, because of their nature, quality, and circumstances,
be deemed sufficient to render a corporation liable to suit. The criteria to determine whether
jurisdiction is justified are not simply mechanical or quantitative. Satisfaction of due process
depends on the quality and nature of the activity in relation to the fair and orderly administration
of the laws. In this case, D’s activities were neither irregular nor casual. Rather, they were
systematic and continuous. The obligation sued upon here arose out of these activities.
THE BARE MINIMUM – SINGLE CONTACT (PAGE 574)
1.
McGee v. International Life Insurance. Supreme Court, 1957. Facts: This suit was by the
beneficiary of the proceeds of a life insurance policy. D had no office or agent in the forum state
of California and had not ever solicited business there except for one policy (sold through the mail)
that was sued upon by McGee. The California court exercised specific jurisdiction based on a (1)
long arm statute subjecting nonresident corporations to suit on insurance contracts entered into
with residents of the state. Holding: The Supreme Court held that there were minimum contacts,
noting a discernible trend toward expanding the scope of jurisdiction over nonresident
corporations and individuals. “The contract was delivered in California, the premiums were
mailed from there, and the insured was a resident of that state when he died. California has an
interest in providing redress for residents when insurers refuse to pay claims.”
UNILATERAL ACTIVITIES NOT ENOUGH (PAGE 578)
1.
Purposeful Availment Rule. “However minimal the burden of defending in a foreign tribunal, a
D may not be called upon to do so unless he has had the minimal contacts with that state.” “The
unilateral activity of those who claim some relationship wit a nonresident D cannot satisfy the
requirement of contact with the forum state.” There must be “some act by which the D
purposefully avails itself of the privilege of conducting acts within the forum state, thus invoking
the benefits and protections of its laws.” (578).
2.
Hanson v Denckla. Supreme Court, 1958. Facts: While living in Pennsylvania, Donner created
a trust with Wilmington Co. of Delaware. She moved to Florida, where she designated certain
grandchildren to get $400,000 from the trust upon her death. She died in Florida. The
grandchildren not provided for filed suit in Florida state court challenging the trust. The court
invalidated the trust on technical grounds. The daughters tried to enforce this decree in Delaware,
but that court ruled that the Florida court had neither in personam jurisdiction over the Trust Co.
or in rem jurisdiction over the assets located in Delaware. The States Supreme Court agreed.
Holding and Rationale: “However minimal the burden of defending in a foreign tribunal, a D
may not be called upon to do so unless he has had the minimal contacts with that state.” The trust
company has no office in Florida, transacts no business there, none of the assets has ever been
held or administered in Florida, they did not solicit business in that state, the suit does not arise out
of an act done or transaction in the forum state. The agreement was executed in Delaware by a
trust company incorporated in that state and a settler domiciled in Pennsylvania. The first
relationship Florida had to the agreement was years later when the settler became domiciled there.
From Florida, Donner carried on bits of trust administration that may be compared to the mailing
of premiums in McGee. But no instance in which the trustee performed any acts in Florida bears
the same relationship as the solicitation in McGee.
STREAM OF COMMERCE (PAGE 579)
1.
Rule. Personam jurisdiction over a D requires sufficient “minimum contacts” with the forum state
so that the suit does not offend “traditional notions of fair play and substantial justice.”
Foreseeability that cars sold in NY would end up in Oklahoma is improper; the foreseeability that
is critical is the D’s conduct and connection with the forum state being such that he should
reasonably anticipate being sued there. It would be okay if a corporation that delivers its products
into the stream of commerce with the expectation that they will be purchased by consumers in the
forum state to subject them to suit there.
2.
World-Wide Volkswagen. Supreme Court, 1980. Facts: WW was a distributor of Audis for the
tri-state area of NY, NJ, and Conn. It distributed the Audi that the Ds bought from a NY dealer
and drove to Oklahoma, where 3 of them were burned when another car hit theirs. The Ds brought
a products liability suit in Oklahoma district court, suing the NY dealership and WW. WW
contested on personam jurisdiction grounds, arguing that a lack of contacts with the Oklahoma
made jurisdiction improper. Holding and Rationale: Personam jurisdiction over a D requires
sufficient “minimum contacts” with the forum state so that the suit does not offend “traditional
notions of fair play and substantial justice.” Here, WW had no “contacts, ties, or relations” to
Oklahoma; they close no sales and perform no services there; they avail themselves on none of the
privileges and benefits of state law; the solicit no business there either though salespersons or
advertising reasonably calculated to reach the state; they don’t regularly sell cars at wholesale to
Oklahoma customers or that they indirectly seek to serve the market. If this were the rule, his
amenability to suit would travel with the chattel. The notion of foreseeability that cars sold in NY
would end up in Oklahoma is improper; the foreseeability that is critical is the D’s conduct and
connection with the forum state being such that he should reasonably anticipate being sued there.
If the sale of a product is not simply an isolated occurrence, but arises from the efforts of the
manufacturer to serve directly or indirectly that market, it is not unreasonable to subject it to suit.
It would be okay if a corporation that delivers its products into the stream of commerce with the
expectation that they will be purchased by consumers in the forum state to subject them to suit
there.
3.
Brennan Dissent: The state has a strong interest in trying this case, the litigation is connected to
the forum, and the burden on the D is not unreasonable. The car is designed to facilitate travel
from place to place, and the sale of one purposefully injects it into the stream of interstate
commerce. This case is not unlike those where jurisdiction is properly exercised over one who
purposefully places his product into the stream of interstate commerce with the expectation it will
be purchased by consumers in other states. Furthermore, a large part of the value of automobiles
is the extensive, nationwide network of highways. State maintenance of roads contributes to the
value of WW’s business. WW also participates in a network of related dealerships with
nationwide service facilities. Having such facilities in Oklahoma also adds to the value of WW’s
business. Thus, it has the required minimum contacts.
4.
Marshall Dissent: Jurisdiction is based on the deliberate and purposeful actions of WW, and here,
WW chose to engage in the global business of marketing and servicing automobiles. The product
has value only because it is mobile. Even though WW could not know in advance that this
particular car would be driven to Oklahoma, it must have anticipated that a portion of the cars it
sold would travel out of NY. Knowing that should alert them to the chance a defect might
manifest itself in another state. Foreseeability alone is not the only determinant of issues of
jurisdiction. WW reached out of state and received advantages from the fact that its product can
be moved out of state. It intentionally became part of an interstate economic network. Thus they
had reason to expect to be sued in Oklahoma. Jurisdiction is not lacking if the product enters the
state, not through channels of distribution, but in the course of its intended use by the consumer.\
5.
Notes 9 and 10 tells us that the court has shifted its analysis away from the state sovereignty
rationale.
TORTIOUS ACT WITHIN THE STATE (588-589)
1.
Generally. When WW was decided, it was well settled that commission of a tort within a state
established jurisdiction over a nonresident tortfeasor for a claim arising from the conduct. Had the
Robinsons collided on the Oklahoma highway with a car driven by a Texas resident, for example,
that person could have been sued in Oklahoma on a negligence claim arising from the accident.
The WW lawsuit fell into a grey area – the Ps complained of something that happened outside the
state (prod liab) with effects within the state.
2.
Rule. Intentional acts aimed at a state, with knowledge that harmful consequences will occur in
that state, will subject you to personal jurisdiction.
3.
Calder v Jones. Supreme Court, 1984. Facts: Jones lived and worked in California and sued
Calder there. Calder was editor of the National Enquirer, which had a large circulation in
California. Calder was served with process by mail in Florida and made a special appearance,
contesting personal jurisdiction. Holding and Rationale: The Enquirer is a Florida corporation
that publishes a national newspaper with circulation of over 5 million, 600,000 of which are sold
in California. P, a Californian, was the focus of the article out of which the suit arose. The story
concerned the California activities of a California resident and hurt the career of an entertainer
whose acting was centered in California. Someone harmed in California doesn’t need to go to
Florida for redress from those who knowingly cause an injury in California.
4.
Keeton v Hustler. Supreme Court, 1984. Holding: The sale in New Hampshire of 1,000’s of
magazines constituted purposeful contacts.
5.
Gordy v New York Daily News. 9th Cir. 1996. Personal jurisdiction in California is okay, even
though the newspaper sold only thirteen daily editions and 18 Sunday editions in California,
because the P lived in the state and the column “was of a nature that would clearly have a severe
impact of Gordy as an individual. It is reasonable to expect the bulk of harm from defamation of
an individual to be felt in his domicile.”
6.
Hugel v McNell. 1st Cir. Ds were the sources of information leading to publication of a
Washington Post article entitled “CIA Spymaster Accused of Improper Stock Practices.” The
story forced P to resign from the CIA, and he filed suit in New Hampshire. D challenged
jurisdiction, but the court disagreed. “D knew that the release of the information would have a
devastating impact on P, and the brunt of the injury would be felt in New Hampshire.”
7.
National Association of Real Estate Appraisers. D, a RI resident, got certification from P, an
Arizona company, for his cat to be an appraiser. He publicized the incident to show the lax
standards. A California newspaper called D in RI; and he answered questions. The paper ran the
story, which was disseminated nationwide. The district court granted D’s motion to dismiss for
lack of personal jurisdiction, concluding that his response to an unsolicited phone call was
insufficient to constitute purposeful minimum contacts with California. The P wasn’t in
California and D’s conduct wasn’t calculated to cause injury there.
8.
Madara v Hall. This was a libel action arising from comments made by Hall while interviewed
by phone in NY. The action was filed by the California P in Florida, which had a generous statute
of limitations and where a small number of copies of the magazine in which the story appeared
were sold. D occasionally performed in Florida, his records were sold there, but this was
unrelated to the libel suit, and the court did not find purposeful minimum contacts with Florida:
Hall was not the publisher and did not control its circulation and distribution. Hall did not appoint
copies of the magazine as his agent for service of process.
CONTRACTUAL RELATIONS – reaching out (PAGE 606). For fairness, do Asahi first, then Burger
King.
1.
Rule. The “fair warning” requirement is satisfied if the D has purposefully directed his activities
to residents of the forum, and the litigation results from alleged injuries that “arise out of or relate
to those activities.” Once it has been established that minimum contacts exist, they should be
considered in light of other factors to determine whether they comport with fair play and
substantial justice. These include: the burden on the D, the forum state’s interest in adjudicating
the dispute, the P’s interest in obtaining convenient and effective relief, the interstate judicial
system’s interest in obtaining the most efficient resolution of controversies, and the shared
interest of the several states in furthering fundamental substantive social policies. These
considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser
showing of minimum contacts than would otherwise be required. Minimum requirements of
fair play and substantial justice may defeat the reasonableness of jurisdiction even if the D has
purposefully engaged in forum activities.
2.
Burger King. Supreme Court, 1985. Facts: Rudzeqicz, a Michigan resident, entered into a
franchise agreement with BK, a Florida company, under which it was to be governed by Florida
law. All payments were sent to Florida. Rudzewicz fell behind on the payments, and BK brought
a diversity suit. Rudzewicz moved to dismiss for lack of personal jurisdiction. Holding and
Rationale: A party with purposeful minimum contacts is subject to personal jurisdiction. Here,
the contract let Rudzewicz enjoy the advantages of association with a Florida company, including
the protection of Florida law.
3.
Not a universal rule. (Page 615 n. 28): We do not hold that jurisdiction will be present always in
franchise cases. Some franchises may be primarily intrastate in character or involve different
decision making structures, such that a franchisee should not reasonably anticipate out-of-state
litigation.
4.
Notes. For contracts, we look for purposeful reaching out. Once you establish minimum contacts,
you examine the burden on the D. D’s activity was purposefully directed at the forum state (this
was still the overriding factor). But, this case tells us that even when they minimum contacts are
satisfied, the fair play considerations may defeat jurisdiction (this was Brennan’s position in
Asahi). This case indicates that an evaluation of the fairness factors may be enough to lesson the
contacts required. If they point strongly to consideration, you may be able to overcome low levels
of contacts. In other words, the two have become independent analysis, except that maybe you
need some sub-minimum contacts. You can have a defeat of jurisdiction even when minimum
contacts are satisfied, and you can have fewer contacts when the fairness is present.
Part Two. Part two – fairness factors.
1.
Rule for Fairness factors. A court must consider the burden on the D, the interests of the forum
state, and the P’s interest in obtaining relief. It must also weigh the interstate judicial system’s
interest in obtaining the most efficient resolution of controversies; and the shared interest of the
several states in furthering fundamental substantive social policies.
2.
Brennan’s concurrence: This is a case where the fair play and substantial justice defeat
jurisdiction even though the D has purposefully engaged in forum activities. As long as the
participant is aware that the final product is being marketed in the forum, the possibility of lawsuit
there cannot come as a surprise. A D who places goods in the stream of commerce benefits forum
the sale in the forum state, and benefits from the state’s laws.
3.
Steven’s concurrence: California’s exercise of jurisdiction in this case would be unreasonable
and unfair. This case fits within the rule that minimum requirements inherent in the concept of
fair play and substantial justice may defeat the reasonableness of jurisdiction even if the D has
purposefully engaged in forum activities. Secondly, Asahi has engaged in a higher quantum of
conduct that “the placement of a product into the stream of commerce, without more.”
4.
Asahi. Supreme Court, 1987. Facts: Asahi, a Japanese company, made tire valves in Japan, and
sold some of them to Shin, a Taiwanese company who used them in its motorcycles. Z and a
companion were injured in a motorcycle accident, and sued Shin, saying that the tire was defective.
Shin settled this suit, and sought indemnity from Asahi. Asahi argued lack of jurisdiction in
California. Asahi’s sales to Shin took place in Taiwan. Shin purchased valves from others, and
sales to Shin were never more than 1.5% of Asahi’s income. 20% of Shin’s sales in the US are in
California. About 20% of the tires in California have Asahi’s trademark. Holding: The
placement of a product into the stream of commerce, without more, is not an act of the D
purposefully directed at the forum state. Additional conduct of the D may indicate an intent or
purpose to serve the market in the forum state, for example, designing the product for the market
in the forum state, advertising in the forum state, establishing channels for providing regular
advice to customers in the forum state, or marketing the product through a distributor who has
agreed to serve as the sales agent in the forum state. But a D’s awareness that the stream of
commerce may or will sweep the product into the forum state does not convert the mere act of
placing the product into the steam into an act purposefully directed toward the forum state. Asahi
has not purposefully availed itself of the California market. It does not do business in the state,
conduct activities, maintain offices or agents, or advertise. Fairness: A court must consider the
burden on the D, the interests of the forum state, and the P’s interest in obtaining relief. It must
also weigh the interstate judicial system’s interest in obtaining the most efficient resolution of
controversies; and the shared interest of the several states in furthering fundamental substantive
social policies. The burden on Asahi is severe; it is a foreign company. In the present case, the
interests of the P and the forum in California’s assertion of jurisdiction over Asahi are slight;
neither are residents and it doesn’t deal with state law.
5.
Plurality. All of this arises from World-Wide: “the forum state does not exceed its powers if it
asserts personal jurisdiction over a corporation that delivers its products into the stream of
commerce with the expectation that they will be purchased by consumers in the forum state.”
Brennan, White, Blackmun, Marshall concurrence says that the placement of the product into the
stream of commerce is enough if the company knew that it would end up in the forum state as a
result of the stream of commerce. Stevens, the deciding vote, doesn’t take either side in the
plurality (4-4 split of the stream of commerce theory), decides in judgment on other grounds.
Everyone but Scalia joins in the second issue, so it is definitely an opinion of the court.
6.
Vermeulen v Renault. 11th Cir. 1993. Asahi’s requirement of “something more:” The court
found jurisdiction over a French car maker is a suit brought in Georgia, when they delivered cars
into the stream of commerce with expectations it would be bought in the US, designed it for the
US, advertised there, established channels for customers there, and maintained a distribution
network there. For the fairness factors, here the P is not a foreign company, but it a US citizen
seeking relief for crippling injuries – a large interest. The interest of the US in adjudicating
dispute is manifest with product safety.
ERIE FLOWCHART
Jurisdiction based on Federal Question or Diversity?
a) Federal question: use federal law
b) diversity: federal and state law conflict
Is the conflict substantive law?
YES: Use state law.
NO: procedural issue.
Is there a Supreme Court holding on point? If yes, follow it.
No Real Conflict: Rules can co-exist: Apply state practice
With FRCP
Identify the source of the federal
“practice (arguably procedural).”
Conflict:
Not with FRCP.
Follow the Hanna analysis.
Is the federal practice an essential
characteristic? Apply either Byrd or
Walker. The only essential characteristic
that this really applies to is a judge/jury
determination. If yes, Byrd (think judge /
jury). If no, Walker.
Example Analysis:
1) Identify it as a diversity case. Identify the Eerie issue, and tell what it is. For example, the state
says: plead with particularity, and the Federal says under 9(b) and 8(a)(2) rules for pleading.
2) Next ask if there is a holding on point? No case deals with pleading rules.
3) Then determine what analysis applies. For example, Hanna might apply because it involves an
actual FRCP (that would conflict on its face).
4) Then go through the Hanna analysis and apply it to the facts.
5) Or there might be a conflict with a federal practice.
6) Walker would probably apply. Ask whether it could it encourage forum shopping. Maybe.
Probably the better answer is that you follow the state rule.
1.
Only applies to diversity cases. In cases of federal question jurisdiction, the substantive law that
controls the rights and obligations of the parties is obviously the federal law from which the claim
arises. For federal diversity cases, however, there is no equally obvious answer to the question of
what substantive law applies.
2.
The Federal Judiciary Act § 34: The laws of the several states shall be regarded as rules of
decision in trials at common law, in the courts of the United States. (Page 725). Erie: Federal
courts, in all matters except those where some federal law is controlling, apply as their rules of
decision the law of the state, unwritten as well as written. (P. 725). “The line between procedure
and substantive law is hazy but no one doubts federal power over procedure.” (page 728).
3.
State Substantive Law Applies. Erie Railroad. Supreme Court, 1938. Facts: P was walking
parallel to railroad tracks when an Erie train passed. P was injured by an extrusion of one of the
cars. Under Pennsylvania law, P would be treated as a trespasser, and would be denied recovery
other than for wanton or willful acts by D. Under federal law, P would be a licensee and would
need to show only negligence. D was a NY company, and P brought suit in a federal court in NY.
Holding and Rationale: The opinion is in four parts; (1) Swift v Tyson, holding that federal
courts using diversity jurisdiction need not apply state law, is overruled. § 34 of the Federal
Judiciary Act requires that federal courts, in all matters except those where some federal law is
controlling, apply as their rules of decision the law of the state, unwritten as well as written. (2)
Swift rationale had many defects. Uniformity among state courts did not happen and there was no
way to distinguish between local and general law. Swift led to discrimination by non-citizens
against citizens. The choice of court rested with the non-citizen who could forum shop. (3)
Except in matters governed by the federal questions, the law to be applied in any case is the law of
the state. (4) The federal district court was bound to follow the Pennsylvania case law, which
would have denied recovery to Tompkins.
4.
Which State Law Applies? Klaxon: (page 730) Federal courts are required in diversity actions
to apply the same conflicts of law rule that would be applied by courts of the state in which they
sit, but generally the laws of the place with “the most significant relationship” to the issue. (If you
sue in NY on an accident in Pennsylvania, Pennsylvania law probably applies).
5.
State law unsettled. If Erie commands application of state law, but the state’s highest court
hasn’t yet pronounced the issue, the federal court has to predict how the state court would resolve
the issue (page 730 n. 10), not what they think it would be.
6.
The challenge after Erie was distinguishing procedure from substance.
7.
Outcome determinative test (must also have Hannah analysis)/statute of limitations. “In all
cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship
of the parties, the outcome of the litigation in the federal court should be substantially the same, so
far as legal rules determine the outcome of litigation, as it would be if tried in a state court.” “If a
plea of the statute of limitations would bar recovery in a state court, a federal court ought not to
afford recovery.” York.
8.
Guaranty Trust v York. Supreme Court, 1945. Facts: York filed suit in federal court in NY on
behalf of a number of persons harmed by Guaranty Trust Co.’s breach of trust. The suit was filed
in 1942 but the underlying transactions took place in 1931. D was granted a summary judgment
because the suit was barred by the NY statute of limitations (this was a diversity case applying a
state statute). Holding and Rationale: In cases with a federal court using diversity jurisdiction,
the outcome of the case should be substantially the same, so far as legal rules determine outcome,
as it would be if tried in state court. Since the Court’s decision in Erie, a considerable amount of
divergence has developed over what matters are procedural and what are substantive. Since these
two concepts are fluid and situation controlled in most instances, the debate misses the underlying
rationale of Erie. When sitting in diversity jurisdiction, a federal court is but another state court.
The controlling factor is whether, by reason of application of differing federal rules, an outcome
substantially different would result than if the case were brought in state court. The rules of law
applied to the case cannot allow or bar recovery in the federal court where an opposite result
would occur in the state court. The rules of law applied to the case cannot allow or bar recovery in
the federal court where an opposite result would occur in the state court. For that reason, the
summary judgment granted by the trial court is sustained.
9.
Criticisms: This case implies that if a particular rule is determinative of the outcome, you follow
the state rule. Any rule can become outcome determinative on some set of facts (color of paper of
complaint, etc.) (This argues for too much and can’t hold up; but statute of limitations rule is safe).
10. Evolving standards. York proved too much, as numerous federal practices fell in the wake of the
outcome-determinative test (pg. 735). The next two cases reassert the vitality of federal procedure.
11. Essential Federal characteristics won’t yield. State law cannot alter the essential characteristics
and functions of the federal courts. Here, the 7th amendment makes the jury function an essential
factor in the federal process protected by the constitution. Outcome is not the only consideration.
Juries are essential to the federal system.
12. Interest Balancing Test. If you are looking at state and federal practices, you can reconcile these
two cases by using a balancing approach: The state has an interest in uniform enforcement of state
law, but the state doesn’t have a strong interest in this law, it’s just a mechanical rule and “not a
rule intended to be bound up with the definition of the rights and obligations of the parties;”
there’s a federal issue in essential characteristics. Juries are very important in the federal system,
and it has its roots in the 7th amendment (which does not apply to the states) – making this a very
essential element of the federal system. Even today, we are not sure if there are other essential
characteristics – so this holding may be very limited.
13. Byrd v Blue Ridge. Supreme Court, 1958. Facts: Byrd (P) was hurt by power lines working as
an employee of a subcontractor of D. He sued D in federal court for negligence. Jurisdiction was
based on diversity. D offered an affirmative defense based on South Carolina law which limits P
to workmen’s comp. damages by defining him as an employee of D (barring a negligence action).
The trial court didn’t allow the defense, but the Supreme Court reversed and remanded the case to
trial allowing the defense. But, under South Carolina law the issue of immunity from negligence
was tried by a judge. D claimed that despite Erie, SC law cannot bar his right to a jury. Holding
and Rationale: The Erie doctrine requires that federal courts in diversity cases respect the laws
created by state courts, but state laws cannot alter the essential characteristics and functions of
the federal courts, and the jury function is such an essential function (provided for in the Seventh
Amendment). The South Carolina law that this is to be tried by a judge is just a law on the form
and mode of enforcing immunity. It does not involve any essential relationship or determination
of right created by the state. The Erie doctrine will reach even form and mode determinations
where no countervailing considerations can be found. Here, the 7 th amendment makes the jury
function an essential factor in the federal process protected by the constitution. The court must
permit a jury trial.
14. For FRCP in Conflict. The Rule Enabling Act § 2072. “The Supreme Court shall have the
power to prescribe, by general rules, the forms of process, writs, pleadings, and motions, and the
practice and procedure of the district courts of the Unites States in civil actions. Such rules shall
not abridge, enlarge or modify any substantive right and shall preserve the right of trial by jury.
(page 742).
15. The Test. The test must be whether a federal rule really regulates procedure. It cannot abridge,
enlarge or modify any substantive right and shall preserve the right of trial by jury. If it does, you
should apply the state practice. But, “The Erie rule has never been invoked to void a Federal
Rule.” (744).
16. For Federal “arguably procedural” practices in conflict. The “outcome determination” test
therefore cannot be read without reference to the twin aims of the Erie Rule: (1) discouragement
of forum shopping and (2) avoidance of inequitable administration of the laws. From Hannah:
The difference between the two rules would have a scant effect on choice of forum. The federal
rule also does not alter state-created rights in a substantial way.
17. Hanna v Plumer. Supreme Court, 1965. Facts: Hanna, an Ohioan, filed a tort claim in federal
court in Massachusetts against Plumer, the executor of the estate of Osgood, a Massachusetts
citizen. Hanna alleged that Osgood injured him in a car accident in South Carolina. Service to D
was accomplished by 4(e)(2) – by leaving copies of the summons with D’s wife. Massachusetts
law requires service by hand to the party personally. P contends that the FRCP applies. D
contends that (1) a substantive question under Erie is any one in which using the federal law
would alter the outcome of the case (outcome determinative test); (2) the application of federal
law, 4(e)(2), will affect the outcome of the case (from a dismissal to litigation); and therefore (3)
Erie requires that the state law of service by hand be used. Holding and Rationale: Erie says
federal courts must apply state substantive law and federal procedural law, but, where matters
fall roughly between the two and are rationally capable of classification as either, the
constitution grants the federal court system the power to regulate their practice and
pleading (procedure). The FRCP requires that a procedural effect of any rule on the outcome of
a case be shown to actually “abridge, enlarge or modify” substantive law. Where a conflict only
goes to procedural requirements (service of summons; a dismissal for improper service here would
not alter the substantive right of P to serve D personally, or affect the law of negligence), Article
III and the Necessary and Proper Clause provide that the Congress has a right to provide rules for
the federal court system such as FRCP 4(d)(1). “Outcome determination analysis was never
intended to serve as a talisman” for the Erie doctrine.
1.
Appears to conflict, but doesn’t – rules can co-exist (FRCP or not) – use state’s law or
practice. The key to resolving such cases is determining whether the federal and state rules that
are in apparent conflict are truly coextensive (i.e., cover the same ground) and thus in unavoidable
collision. If so, the Hanna analysis (based on Guaranty Trust, is weighted towards application of
state practice) controls. Walker reflects the Court’s inclination to read the FRCP narrowly so as
to avoid direct conflicts whenever possible.
2.
Rule. Since there is no direct conflict between the FRCP and the state law, the Hanna analysis
does not apply. Instead, the policies behind Erie control the issue whether, in the absence of a
federal rule directly on point, state service requirements are an integral part of the state statute of
limitations should control.
3.
Walker: There is a conflict here between a state statute of limitations rule and FRCP 3. In
Hanna, the state and federal rules cannot co-exist. Here, they can co-exist. By reading Rule 3
relatively narrowly, they find that is doesn’t conflict, so the state rule should apply. Where there is
not a direct conflict, apply the Erie policies discouraging forum shopping and avoidance of
inequitable administration of the laws (and the state really cares about their policy).
4.
Walker v Armco Steel. Supreme Court, 1980. Facts: Walker was injured while pounding a nail
made by Armco into a cement wall. Suit was file in district court in Oklahoma, based on
diversity. The complaint was filed on August 19, 1977, but service was not made until December
1, 1977. In January, 1978, Armco filed a motion to dismiss because the action was barred by the
Oklahoma statute of limitations, which said that a suit is not commenced until service of the
summons on the D. P admitted that his case would be barred in state court but contended that
FRCP 3 establishes how an action starts in federal court, including when the state statute of
limitations is tolled. FRCP 3 would commence action by filing a complaint with the court.
Holding and Rationale: Rule 3 establishes when certain timing requirements begin to run but
does not affect a state statute of limitations. It only states that a civil suit is commenced by filing a
complaint with the court. The rule was not meant to toll a state statute of limitations, much less to
displace state tolling rules. The Oklahoma rule is a statement of a substantive decision that actual
service on and actual notice on the D are integral parts of the statute of limitations.
1.
Courts can split a statute apart. A standard that sets an upper limit on damages is substantive,
even if it’s flexible – so is a fixed cap. So there is a substantive rule, and a clear order from Eerie
that says you should apply that rule, and a federal law that says you can’t review that award. The
Court says that the state statute has two parts (1) the material deviate aspect (which is substantive),
(2) the appellate process that allows that to happen (which is procedural). Courts may split apart
state laws so as to interpret them narrowly.
2.
Gasperini. Supreme Court, 1996. Facts: Gasperini gave D some color slides to use in a video,
but D lost them. P file suit in district court in NY, using diversity jurisdiction, on state law claims.
D conceded liability, the issue of damages went to a jury, and they awarded $450,000. D contests
the award as being excessive. By using NY law, which allows a new trial if an award deviates
materially from what is reasonable, the court of appeals ordered a new trial. Holding and
Rationale: The 7th Amendment states that “no fact tried by a jury, shall be otherwise re-examined
in any Court of the United States.” Under diversity jurisdiction, the court uses state substantive
law and federal procedural law. Other circuits have set “abuse of discretion” as the standard. In
those cases, the damage award becomes a question of law. District courts should apply state law
covering excessive damages, and the appeals court must review for “abuse of discretion.”
3.
Res Judicata effects. Semtek: Semtek’s breach of contract claim was barred by California’s
statute of limitations. He then brought suit in Maryland, which had a 3 year S.O.L. The Maryland
court dismissed on the basis of res judicata. But Semtek argued that the res judicata effect of the
first action should be controlled by California law, which would not treat dismissal on S.O.L.
grounds as “on the merits.” The Court held that, absent a FRCP on point, state law should apply,
(page 763), to avoid forum shopping and inequitable administration of the law.
1.
General. Subject matter jurisdiction is one of three constitutional requirements for a valid and
enforceable judgment, the other two being personal jurisdiction and notice. Once a case has
proceeded to judgment, generally speaking you cannot challenge it collaterally (as opposed to
personal jurisdiction). Restatement identifies three areas where collateral attacks may be okay: (1)
where the lack of jurisdiction is so manifest as to make application of res judicata manifestly
unjust; (2) where the prior judgment would infringe upon the authority of another tribunal; and (3)
where the court lacked the capability to make an informed determination of a question concerning
its own jurisdiction and as a matter of procedural fairness a belated attack on jurisdiction should be
allowed.
2.
Pleadings. In general, you have to find and plead, and perhaps prove, a basis for federal subject
matter jurisdiction (not true for state courts since they are general jurisdiction). It’s always true in
federal court that you have to find, plead, and prove a basis for subject matter jurisdiction (you
don’t have to plead personal jurisdiction). Rule 8(a): A pleading shall contain (1) a short and
plain statement for the grounds upon which the court’s jurisdiction depends. Most name 28 USC
§ 1331 or § 1332 grounds, AND Article III grounds. So, for a diversity case, you not only need to
name the statute, but also that you need to PLEAD the citizenship of the parties (I’m a citizen of X,
and they’re a citizen of Y). For a federal question, all you need to plead is that the D violated a
federal act (for diversity claims, there is an issue of fact). The federal court would have had to
exercise jurisdiction long enough to find if there was such a right. If the court then concludes that
the federal right doesn’t exist, the complaint will be dismissed for failure to state a claim, rather
than lack of jurisdiction.
a.
b.
3.
4.
The Limitations on Federal subject matter authority. These limits are of both constitutional
and statutory origin.
a.
The Constitution. Article III, §2 A federal court can hear cases (1) arising under this
Constitution, the laws of the United States; or (2) between citizens of different states.
b.
Statutory. When Congress creates lower federal courts, it can confer jurisdiction on
them that is NARROWER than that enumerated in Article III. 28 U.S.C. § 1331: federal
courts can hear “all civil actions arising under the constitution.” §1332: federal courts
can hear cases between citizens of different states where the amount in controversy
exceeds $75,000. When you are looking at a case involving federal question, odds are
you can bring it in state court, but it IS possible that Congress has limited that question to
ONLY federal court.
The Choice between state and federal court.
a. Federal. A P can file in federal court only if the case falls within the limited parameters
of federal subject matter authority. And, a D can exercise the federal option when a case
filed in state court falls within federal subject matter jurisdiction – such a case may be
removed to federal court by the D. Diversity and federal question cases may generally be
heard in either federal or state court.
b.
5.
Defects in the pleadings. If there’s just a defect in pleading, the court will let them
amend all the way through the appeal; this is not some technicality that knocks you out of
court; but the court must have jurisdiction AT THE MOMENT the claim is filed. So, you
may see a mini-trial on the issue of diversity, and on that claim, the claimant has the
burden of proof.
Rule 12(h)(3): AT ANY POINT during the proceeding, by the parties’ initiative or by
the court’s own initiative, jurisdiction may be required to be proven, or it may be
dismissed. Courts can raise this issue on their own motion, as can the parties, at any time
during the proceedings (Mottley).
State. In general, state courts are courts of general jurisdiction. The exception to this is
that states can set up their own states of limited jurisdiction (family court, small claims,
etc.) Actions in which the parties are not of diverse citizenship and which do not arise
from federal law can be heard only in state courts.
Federal Question Jurisdiction. Federal courts can hear “all civil actions arising under the
constitution.” A “suit arises under the law that creates the cause of action,(page 692).” The
complaint must be based upon federal laws, and this claim was not based on a federal law, but was
based in breach of contract. Although a federal question would be raised at trial, the cause of
action itself has to be based on a federal question.
a.
Mottley. Supreme Court, 1908. Facts: Mottley and his wife were hurt riding on the R.R.
(D). The Ps dropped their claim in return for lifetime passes. In 1907, D refused to
renew the passes, based on a Congressional Act forbidding giving away free passes. The
Ps filed suit in Kentucky federal court. Both P and D were Kentucky citizens. Ps tried to
get federal question jurisdiction by claiming D would use a constitutional defense in their
answer. The Court addressed the issue of whether the federal court had jurisdiction to the
case. Holding and Rationale: Claiming that a constitutional defense will be relied on
does create federal question jurisdiction. Neither P nor D alleged that the federal court
had jurisdiction in this case, and neither challenged the jurisdiction of the federal court to
hear the case. Federal court jurisdiction is limited by statute, the Supreme Court stated
that it is their duty to see what such jurisdiction is not exceeded. P alleged that the D
based their refusal to renew the pass on a federal statute. P then alleged facts to defeat
this defense, but this is not enough. The complaint must be based upon federal laws, and
this claim was not based on a federal law, but was based in breach of contract. Although
a federal question would be raised at trial, the cause of action itself has to be based on a
federal question.
6.
Diversity Jurisdiction. One reason for diversity jurisdiction might be the idea that state courts
might not be level playing fields in cases pitting nonresidents against forum residents.
a. §1332: federal courts can hear cases between (1) citizens of different states (2) where the
amount in controversy exceeds $75,000. NOTE: There cannot be diversity jurisdiction
for spousal relation claims or for probate (you can’t bring it in federal court).
b.
Strawbridge v Curtis: The Supreme Court requires complete diversity. Every P must be
of a different state than every D. Shared citizenship across the “v” defeats diversity. If
you have multiple Ps or multiple Ds, there can not be any joint citizenship across the v.
The Ps can all be from the same or multiple states and the Ds can all be from the same or
multiple states, as long as no P shares citizenship with any D. Every citizen must be a
citizen of SOME state or FOREIGN country.
c.
Defining Citizenship. This is determined by the concept of domicile, defined as the
person’s “true, fixed, and permanent home and principal establishment and to which he
has the intention of returning whenever he is absent therefrom.” Current resident is not
enough to establish domicile; there must be an intention to remain indefinitely. (page
697 for cases on point, and use these, one’s dependent, one’s emancipated). Diversity
must exist at the time the complaint is filed, and jurisdiction is unaffected by subsequent
changes. Every person has exactly one domicile. But it doesn’t have to be in the US,
even if you’re a US citizen.
d.
Corporations. A corporation is a citizen of its state of incorporation and the state where
it has its principal place of business. § 1332 (c). Two tests are used to determine a
corporation’s principal place of business: (1) the nerve center test identifies a
corporation’s executive and administrative functions, and the (2) place of operations test
determines the state in which corporate activity is greater than others.
e.
Amount in Controversy. The amount in controversy is determined by the sum the P
claimed in good faith, and the standard for dismissal for lack of the jurisdictional
minimum is high: “It must appear to a legal certainty that the claim is really for less than
the amount.” (page 698). Jurisdiction is not lost retroactively because a judgment is
ultimately entered for less than the minimum (but costs may be imposed on the P if he
recovers less). A P may aggregate all claims (under Rule 18) brought against a single D.
f.
Amount in Controversy for multiple Ps: (Flagg wasn’t sure this applied to impleaded
Ps) Ps joined under Rule 20 or by class action under Rule 23 have not been allowed to
aggregate their claims against a single D to reach the minimum.
A. Required for valid judgment. Adequate notice to the D is the final prerequisite for a valid
judgment, and is usually provided by serving the D (in hand or by postal delivery) with a copy of
the complaint together with a summons.
B. Step 1: How Service is to be Made. Notice must comply with FRCP 4 or state law (or it might
be dismissed under 12(b)(5)):
 States will provide a statute detailing service.





4(a): This tells us what form a summons should take (which can be amended).
Waiver of Service. 4(d)(2): A P may request a D to waive service (so they don’t incur
service costs) in writing accompanied by the complaint. 4(d)(3): If a D agrees to waive
service, he will not have to answer the complaint for 60 days after the request. 4(d)(5):
If a D does not agree, he will pay the costs incurred by the P in making service.
How service made. 4 (e)(1): You can follow the law of the state in which the district
court is located, or 4 (e)(2): “by delivering a copy … to the individual personally or by
leaving it at the individual’s dwelling house or usual place of abode with some person of
suitable age and discretion then residing therein or … an agent authorized.”
Territory of Service. 4(k)(1)(a): Service can be made anywhere the state’s jurisdiction
(where the district court sits) extends to the D. 4(k)(1)(b): Service can be made
anywhere within 100 miles (irrespective of state law) of the district court house on a (1)
third-party D (under Rule 14), or (2) an indispensable party (under Rule 19(a)).
Those not servable in any state. 4(k)(2): If consistent with the constitution (a D has
minimum contacts with the country as a whole, but no state in particular), service is
effective to those not subject to jurisdiction in any state if the case is a federal question.
C. Step 2: Is that Service Good Enough?
D. Generally a reasonableness test. Any proceeding requires notice (1) reasonably calculated,
under the circumstances, to apprise interested parties of the pendency of the action and afford
them an opportunity to present their objections. (2) It must convey the required information, and
must give enough time for them to make an appearance.
E. Mail is the minimum. Decisions since Mullane have set notice by mail as the constitutional
minimum for Ds whose addresses are known or can be ascertained by reasonably diligent efforts.
F.
What form must it take? The means employed must be such as one desirous of actually
informing the absentee might reasonably adopt to accomplish it. The method may be defended on
the ground that (1) it is in itself reasonably certain to inform those affected, or (2) that the form
chosen is not substantially less likely to bring home notice than other feasible substitutes.
G. Many members with identical interests. Notice reasonably certain to reach most of those
interested in objecting is likely to safeguard the interests of all, since any objections sustained
would inure to the benefit of all.
H. Standards less stringent for in rem actions. An owner of tangible property usually arranges to
learn of any attack upon his rights. So entry upon the land could reasonably be expected to come
to the owner’s attention. A state may assume that one who has left property either has abandoned
it, or left some caretaker under a duty to let him know that it is being jeopardized.
I.
Mullane v Central Hanover: Supreme Court, 1950. Facts: NY allowed banks to create trust
funds comprised of smaller trusts for more efficient management. There must be accounting about
every year before a court. The court’s decree is binding. D created such a trust, and in 1947, went
to court for settlement. When the trust was created, the company notified each member by mail.
At the accounting, the only notice given was by way of an ad in a local newspaper (as required by
NY law). P had been appointed to represent the beneficiaries. After the accounting, P challenged
the statute on due process grounds. Holding and Rationale: Regardless of amenability by way of
in rem, quasi in rem, or in personam, due process requires an opportunity to appear and be heard.
Any proceeding requires notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity to present their
objections. It must convey the required information, and must give enough time for them to make
an appearance. The means employed must be such as one desirous of actually informing the
absentee might reasonably adopt to accomplish it. The method may be defended if it is itself
reasonably certain to inform those affected, or if the form chosen is not substantially less likely to
J.
bring home notice than other feasible substitutes. The odds that the newspaper will ever reach
those outside the area are slim. The person’s name does not appear in the article. Newspaper ads
are generally okay when it is supplemental to other actions likely to give notice. Newspaper
publication may also be okay where no other practicable alternative exists. This method was
valid with respect to only those whose interests or addresses are unknown to the trustee (since
there is no other way). The trustee has the addresses on beneficiaries represented by appellant.
We think they might reasonably expect that with their money might come to them steps that were
being taken on their behalf. This type of trust has a number of small interests, which are largely
identical. Notice reasonably certain to reach most of those interested in objecting is likely to
safeguard the interests of all, since any objections sustained would inure to the benefit of all. It is
not reasonably calculated to reach those who could be informed by other means.
General. Ps have the initial choice of federal or state court in federal question and diversity cases.
If P opts for state court, D may usually remove to federal court under 28 U.S.C. § 1441, if it
satisfies the federal jurisdiction requirements (diversity of citizenship or federal question).
K. § 1441 (a): Generally – removable to federal court in same district. Except as otherwise
expressly provided by Act of Congress, any civil action brought in a State court of which the district
courts of the United States have original jurisdiction, may be removed by the defendant or the
defendants, to the district court of the United States for the district and division embracing the place
where such action is pending. (If P’s claim was a federal question, it’s removable period).
L. § 1441 (b): Diversity and Federal cases. Any civil action of which the district courts have original
jurisdiction founded on a claim or right arising from a (1) federal question shall be removable without
regard to the citizenship or residence of the parties. A (2) diversity action shall be removable only if
none of the parties joined and served as defendants is a citizen of the State in which such action is
brought. (If there is a basis for federal jurisdiction only based on diversity, it’s not removable if I
sue them in the state where they are a citizen).
M. § 1441 (c): State law dominates. Whenever a separate and independent claim or cause of action is
joined with one or more otherwise non-removable claims or causes of action, the entire case may be
removed and the district court may determine all issues therein, or, in its discretion, may remand all
matters in which State law predominates.
N. More than one D. Where more than one D is joined in the suit, all must generally join in the removal.
It has been held that only original, not third party, Ds may remove a case. (page 717).
O. Burnett v Birmingham Board of Education. Ala. 1994. Facts: Burnett and other employees
brought a suit in state court for breach of contract against D. P also added a federal civil rights
claim. D removed the case to the federal court on the contention that there was a federal question.
P moved to remand the suit back to the state court. The D alleged that the court’s authority to
remand under § 1441 (c) was limited to cases in which the removal to federal court was predicated
on § 1331 (general federal question statute) alone. Issue: Does 28 U.S.C. § 1441 (c) allow for a
remand of the entire case, federal claim included, where state law predominates? Holding and
Rationale: There was no “nucleus of operative fact” common to the state and federal claims, and
the state claims were not pendent but were dominant. The state court claim was based mostly on
breach of contract. The civil rights claim was thrown in. But the contract claim was the essence
of the suit and state law dominated. Remand was proper.
1. General. A small margin of supplemental jurisdiction has been recognized to encompass claims
that do not fall within the federal question or diversity categories but are closely connected to such
claims already being entertained by the court. You have to have jurisdiction under § 1331 or 1332,
then a court may have jurisdiction over a non-diverse party or nonfederal claim under § 1367.
2.
Rule. “With the adoption of the FRCP the impulse is toward entertaining the broadest possible
scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is
strongly encouraged.” Gibbs (page 700).
3.
28 U.S.C. § 1367 (page 712):
a.
b.
c.
§ 1367(a): In any civil action of which the district courts have original jurisdiction, the
district courts shall have supplemental jurisdiction over all other claims that are so related
to claims in the action within such original jurisdiction that they form part of the same
case of controversy. Such supplemental jurisdiction shall include claims that involve the
joiner or intervention of additional parties.
§ 1367 (b): In any civil action based solely on diversity (§ 1332), the district courts shall
not have supplemental jurisdiction over claims by Ps against persons made parties under
Rule 14, 19, 20, or 24 of the FRCP, or over claims by persons proposed to be joined as Ps
under Rule 19, or seeking to intervene as Ps under Rule 24, when using such jurisdiction
over such claims would be inconsistent with § 1332. (Ds mostly use this; counterclaims,
cross claims, and impleaders are not barred). Page 714: The courts may not hear P’s
supplemental claims when giving this jurisdiction would encourage Ps to evade the
requirements of §1332 by merely naming one D and later adding claims (as Kroger tried).
§ 1367(c): Factors to consider.
4.
Pendent jurisdiction. This exists whenever there is a federal question claim, and the relationship
between that claim and the state claim permits the conclusion that the entire action before the court
comprises but one constitutional case. Id. The federal claims must confer subject matter
jurisdiction. “The state and federal claims must derive from a common nucleus of operative
fact.” “A P’s claims are such that he would ordinarily be expected to try them all in one judicial
proceeding, then, assuming substantiality of the federal issues, there is power in the federal courts
to hear the whole.” But the power “need not be exercised in every case,” because it is a “doctrine
of discretion.” Factors (Gibbs and § 1367(c)): “Its justification lies in considerations of judicial
economy, convenience and fairness to litigants; if these are not present a federal court should
hesitate to exercise jurisdiction over state claims.” “If the federal claims are dismissed before
trial … the state claims should be dismissed as well.” “If it appears that the state issues
substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the
comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and
left for resolution to state tribunals.” Id. Also, under Rule 42(b), the court may separate the
claims due to possible jury confusion. The issue of whether pendent jurisdiction has been
properly assumed is one which remains open throughout the litigation.
 You can’t just plead something to invoke this (the federal question must be substantive).
 If the federal claims are dismissed before trial, the state claims should be dismissed as well.
Or, if it appears that the state issue is substantially predominating it should be dismissed.
 If you lose on the federal claims at trial that does not defeat the state claim on pendent
jurisdiction.
 This form of supplemental jurisdiction only arises where there is a federal question and state
question, the federal question has to be substantive, and the two claims have to have a
common nucleus of operative fact (the most important element of the test).
 Note five (page 702) says that if the federal issue is dismissed on the basis of summary
judgment, then the state claim must be dismissed (but this is not always the case).
 Everyone thinks that’s equivalent to our old test “same transaction of occurrence or series of
transactions or occurrences.”
5.
United Mine Workers v Gibbs. Supreme Court, 1966. Facts: A dispute arose between United
Mine Workers and the Southern Labor Union concerning representation of the local coal miners.
One coal company, Tennessee Consolidated, down a mine where over 100 United Mine Workers
worked. Later, a subsidiary of Tennessee Consolidated, hired Gibbs to open a with Southern
Labor Union workers. Gibbs (P) was given a contract to carry the coal to the railroad. United
Mine Workers prevented the mine from opening. Gibbs was fired and never started his hauling
work. He lost other contracts in the area. Gibbs alleged that this was due to the union being
against him. He filed suit in district court in Tennessee for violations of the Labor Management
Relations Act and state law, based on pendent jurisdiction. Holding and Rationale: When both
state and federal claims are involved in the same set of facts and the claims are such that the P
would ordinarily expected to try them all in one proceeding, the federal courts have the power to
hear both the state and federal claims. The federal claims must confer subject matter jurisdiction.
The court’s use of this power is discretionary. The court should look at judicial economy,
convenience, and fairness to litigants in deciding whether to use jurisdiction over the state claims.
If the facts of the state and federal claims are so similar, the court ought to grant jurisdiction to
save another trial. If the issues are complicated as to confuse the jury, the court should dismiss the
state claims. The issue of whether pendent jurisdiction has been properly assumed is one which
remains open throughout the litigation. If, before the trial, the federal claim is dismissed, then the
state claim should also be dismissed. State and federal claims can state separate causes of
action as long as they are factually related.
6.
Ancillary Jurisdiction (page 703). Just as pendent jurisdiction stretches a federal court’s
authority, ancillary jurisdiction expands the authority of a federal court entertaining a diversity
action.
7.
Rule: Under § 1367 (b), P’s are restricted in using supplemental jurisdiction in diversity cases. In
an action based on diversity, the P may not assert a claim against a third-party D when there is no
independent basis for jurisdiction over that claim.
8.
Owen Equipment v Kroger. Supreme Court, 1978. Facts: Kroger was electrocuted when a steel
crane he was walking by came too close to a power line. Kroger’s widow filed a wrongful death
action in district court in Nebraska against Omaha Public Power District. The complaint alleged
Omaha’s negligence caused her husband’s death. Federal jurisdiction was based on diversity; P
was an Iowa resident and Omaha was a Nebraska company. Omaha filed a third-party complaint
by Rule 14 against Owen Equipment; alleging negligence on Owen’s part in operating the crane
that was a proximate cause of the death. Omaha filed a motion for summary judgment, and while
it was pending, P was allowed to amend her complaint to add Owen. Omaha’s motion was
granted, and the case went to trial between P and Owen. There it was discovered that Owen was
an Iowa corporation. Owen moved to dismiss for lack of jurisdiction. Holding and Rationale: In
an action based on diversity, the P may not assert a claim against a third-party D when there is no
independent basis for jurisdiction over that claim. § 1332 confers federal jurisdiction over actions
where the matter in controversy exceeds the sum of $10,000 and is between citizens of different
states. It is clear P could not have brought suit in federal court naming Owen and Omaha as co-Ds,
since citizens of Iowa would have been on both sides of the “v”. But the same lawsuit resulted
when P amended her complaint. Diversity was destroyed. If a common nucleus of operative fact
were the only requirement for ancillary jurisdiction in a diversity case, there would be no reason
why P could not have joined her cause of action against Owen in her original complaint as
ancillary to her cause against Omaha.
9. Pendent Party Jurisdiction.
10. Finley. Supreme Court, 1989. Facts: Finley’s husband and children were killed in a plane crash
alleged to be the result of negligence of a power company. She brought suit in state court, alleging
the negligent lighting of a runway and positioning of electric lines. She later learned that the party
responsible for maintaining runway lights was the FAA, and she filed a Federal Tort Claims Act
suit against the United States in federal court. She moved to amend the federal suit to include the
claims against the state D, where there was no independent basis for federal jurisdiction. Holding
and Rationale: The added claims involve parties over whom no independent basis of jurisdiction
exists. The relationship between the added claims and the original is not one of factual similarity,
which is of no consequence, as the convenience of the litigants nor judicial economy justify use of
ancillary jurisdiction. The Federal Tort Claims Act grants jurisdiction over “civil actions on
claims against the United States,” but the not on claims that include requested relief against the
United States or civil actions in which there is a claim against the United States. The latter would
be formulations one might expect if the presence of a claim against the United States constituted a
minimum jurisdictional requirement, rather than a definition of the scope of the Act. (§ 1367 was
passed in response to this case).
 The difference from Gibbs is that she wants to bring a new party, not just a state law claim.
The Court assumes that the criteria for pendent claim jurisdiction are the same for pendent
party jurisdiction, so it would be okay as a constitutional matter, but as to the statute, the
Court can find nothing that authorizes it. This wouldn’t have bothered the Gibbs court – but
now we care about that.
 Now we get 28 USC § 1367 which covers ALL supplemental jurisdiction. Section A
provides supplemental jurisdiction as the constitution permits except as in B and C. So Gibbs
will remain the test for determining what is constitutional.
 For section B, if diversity is the only basis for jurisdiction (for the original suit), then the
district court won’t have supplemental jurisdiction over claims by the original P against
persons made parties under Rule 14 or 20, when exercising jurisdiction would be
inconsistent with 1332’s requirements-diversity and amount in controversy. This statute
preserves the holding of Kroger. How does the impleader come out under this? It’s not a
claim by the P, so it would be fine. B won’t apply if there isn’t a claim founded solely on §
1332 and has to be a claim by the original P.
 How would Finley come out under § 1367? It’s from the same transaction or occurrence, so
it’s okay under section A. B doesn’t apply because it’s not a diversity action. Everything’s
okay in a federal question case, it has to satisfy the constitution. For diversity cases, you look
at section B.
VENUE  § 1391 (D’s residence, place of events, no other district exists)
TRANSFER/FORUM NON CONVENIENS  State (statute or common law forum non conveniens)
Federal (common law forum non conveniens)
(§ 1404(a) transfer, § 1406 improper venue)
A. Generally. Once the courts have authority over both the D and the case, venue further restricts
the location of the lawsuit. In the federal system, venue determines the appropriate judicial
district(s) in which the case may be filed. The federal trial courts in NY, for example, are divided
into four districts: eastern, western, northern, and southern.
B. Waiver. FRCP 12(h)(1)(page 49): A defense of improper venue is waived if not included in a
motion (12(b) (3)), or in a responsive pleading (or an amended answer under FRCP 15(a)). Proper
venue is not a constitutional requirement for a valid judgment, and thus cannot be raised by way of
collateral attack challenging enforcement.
C. Purpose. Venue operates as a geographical limit on P’s choice of court. State venue statutes
identify the counties within a state in which an action may be brought, while federal venue
requirements locate a case within particular federal judicial districts.
D. 28 U.S.C. § 1391, the general federal venue statute, sets up rules depending upon whether subject
matter jurisdiction is based on (1) diversity of citizenship or (2) federal question.
1.
2.
28 U.S.C. § 1391 (a): A civil action founded on diversity may be brought only in (1) a
district where any D resides, if all Ds reside in the same state; (2) a district where a
substantial part of the events occurred; or (3) if no other district exists where it might be
brought, a district in which any D is subject to personal jurisdiction at the time the action
is commenced.
28 U.S.C. § 1391 (b): For federal question cases, (1) a district where any D resides, if
they all live in the same state; (2) a district in which a substantial part of the events
3.
occurred; or (3) if no other district can be found, a district where any D may be found
(presumably something less than being subject to personal jurisdiction).
28 U.S.C. § 1391 (c): Venue is proper for a corporate D in any district where it is subject
to personal jurisdiction at the time of the suit.
E. Transfer. If venue does not properly lie, the court may, instead of dismissal by FRCP 12(b)(3),
transfer the case to a district in which it could have been brought.
F.
A D’s Options. If you are a D, and P has filed a claim in federal court, and you’d rather be some
place else, what are your options?
a.
b.
c.
If venue was improper: File a 12(b)(3) motion. You would claim improper venue and
argue that it doesn’t meet the requirements of 28 U.S.C. § 1391. Relief would come
under 28 U.S.C. § 1406: and the court must dismiss or transfer.
If venue was proper: Make a 28 U.S.C. § 1404 (a) Motion to Transfer: For a transfer
within the federal system; it’s discretionary. “For the convenience of parties and
witnesses, in the interest of justice, a district court may transfer any civil action to any
other district or division where it might have been brought.”
Forum non Conveniens (Common Law): This are most commonly seen when there are
foreign parties. If the venue was proper but you just don’t like it, you could ask for
transfer by forum non conveniens, and the court can transfer to any other district where it
could have been brought.
G. Forum non Conveniens. (page 681):
a. How to use. (1) First, there must be an alternative venue. If the P is foreign, their choice
of venue will be given little weight, but ordinarily it deserves “substantial deference.” (2)
Then the court must balance the competing factors: (1) (footnote 6): private interests of
the litigants: “relative ease of access to sources of proof, availability of compulsory
process for attendance of unwilling … and all other practical problems that make trial of
a case easy, expeditious, and inexpensive” and (2) public factors: court congestion, the
local interest in having controversies decided at home, etc. If the balance of
conveniences suggests that trial in the chosen forum would be unnecessarily burdensome
for the D or the court, transfer is proper.
H. Piper Aircraft: Supreme Court, 1981. Facts: In 1976, a plane, made in Pennsylvania by Piper
(D), crashed in Scotland, killing the pilot and passengers. The dead were Scottish. The plane’s
propellers had been made in Ohio, and it was registered in Great Britain and operated by a Scottish
air taxi service. A California court named Reyno (P) administratix of the estates of the passengers,
and she brought wrongful death actions in California Superior Court. Piper successfully moved to
transfer the case to District Court in Pennsylvania. In 1978, Piper moved to dismiss the action by
forum non conveniens. Holding and Rationale: Dismissal may not be barred solely because of
the possibility of an unfavorable change in law. Dismissal will ordinarily be appropriate where
trial in the P’s chosen forum imposes a heavy burden on the D or the court and where the P is
unable to offer any specific reasons of convenience supporting his choice. Change in the law
should not be given even substantial weight in the forum non conveniens analysis. A P’s choice
of forum is entitled to greater deference when the P has chosen a home forum. Because the central
purpose of any forum non conveniens inquiry is to ensure that the trial is convenient, a foreign P’s
choice deserves less deference. Although the relatives of the decedents won’t be able to use strict
liability, and though their damage award may be smaller, they won’t be deprived of any remedy.
Scotland has a very strong interest in litigation. The accident occurred in its airspace. All of the
dead were Scottish. Other than Piper and Hartzell, all potential Ps and Ds are Scottish or British.
1.
In General
A. Definition. “When an issue of fact or law is actually litigated and determined by a valid
and final judgment, and the determination is essential to the judgment, the determination
is conclusive in a subsequent action between the parties, whether on the same or different
claim.” Restatement (Second) Judgments § 27.
B. Elements. A determination of fact or law is conclusive in a subsequent action between
the parties (1) when an issue of fact or law is actually litigated and determined (2) by a
final judgment (3) and the determination is essential to the judgment.
2.
Cases on point:
A. Hoult v Hoult. 1st Circuit Court of Appeals, 1998. Facts: Jennifer Hoult (D) sued her
father (P) for assault, battery, and intentional infliction of emotional distress, and
presented evidence that he had sexually abused and raped her over a period of many
years. The jury found in her favor and awarded $500,000 in damages. Subsequently, she
wrote to several associations in which she repeated that her father had raped her. The
father brought the present defamation action against the daughter. The daughter moved
to dismiss the father’s complaint on the grounds that the jury verdict in her earlier assault
action had determined that the father had raped her, thus he should be barred by collateral
estoppel from relitigating this finding. Holding and Rationale: Even though the jury in
the prior suit did not make an explicit finding that David had raped Jennifer, such finding
was a “necessary component of the decision reached” by the jury, which found that
Jennifer’s father had sexually abused her. In the prior suit, the rape was pivotal and
constituted the “centerpiece” of the case, and both her counsel as well as the defense
counsel in the prior suit referred to the rape. The father’s present lawsuit against his
daughter, simply seeks, under a defamation action, to retry the central issue in the prior
assault case between the same litigants.
B. Jarosz v Palmer. Massachusetts, 2002. Facts: Jarosz and three partners bought a
company called Union Products. Jarosz had hired Palmer, an attorney, to help with the
acquisition of the business. The relationship between Jarosz and his partners went bad,
and Jarosz was fired as an employee in the company. Jarosz filed suit against his partners
for wrongful termination and breach of fiduciary duty. In that case, Palmer represented
the partners and the company. Jarosz moved to disqualify Palmer from representing them,
on the basis that Palmer had previously represented him individually. The motion was
denied on the grounds that Jarosz did not show that an attorney-client relationship existed
between himself and Palmer. Jarosz then filed this complaint against Palmer, claiming
breach of contract, breach of fiduciary duty, legal malpractice, and violations of state law.
Palmer defended these claims on the grounds that he never represented Jarosz
individually, and moved for judgment on the pleadings, arguing that the denial of
Jarosz’s motion in the first lawsuit estopped Jarosz from re-litigating the issue in the
second. Holding and Rationale: The requirement of issue preclusion that the issue
decided be essential to the judgment requires that the issue be essential to the merits of
the underlying case. The issue of Jarosz’s alleged attorney-client relationship with
Palmer was actually litigated. The requirement for actual litigation does not require an
evidentiary hearing or trial before issue preclusion can apply. The appropriate question is
whether there has been an adversary presentation and a consequent judgment that was
not the result of the parties’ consent. Here, the issue of Jarosz’s attorney-client
relationship had been briefed, and there had been a hearing, and the judge had made a
determination. The denial of the motion to disqualify was not essential to the judgment
in the underlying case, however. The requirement that the issue be essential to the
judgment necessitates that the issue be essential to the underlying case. The nature of
Jarosz’s attorney-client relationship with Palmer was not essential to the merits of his
claim against his partners, and the issue was therefore not essential to the judgment.
C. Parklane Hosiery v Shore. Supreme Court, 1979. Facts: Shore and other stockholders
brought a class action against D, claiming the company had issued a false and misleading
proxy statement which violated federal securities law. The SEC had later filed suit
against D, making the same allegations (but which was decided first). The court found
that the proxy was false and misleading. Shore, in this case, moved for summary
judgment against D, on the grounds that D was collaterally estopped from re-litigating
this issue. Holding and Rationale: A litigant not a party to a prior judgment may use
that judgment offensively to keep a D from re-litigating issues determined in the prior
case. Unless the use of offensive estoppel would be unfair to the D, a trial court has
discretion to determine when it should be used. Here, none of the considerations that
would justify refusal is present. D received a full and fair opportunity to litigate its
claims in the SEC action, the law of collateral estoppel finds that D is collaterally
estopped from retrying the issue of whether the proxy was misleading.
1.
Was the issue actually litigated?
A. General Verdicts –issue not explicitly decided. Hoult: The jury never made an
explicit finding that the rapes occurred. An issue may be “actually” decided for collateral
estoppel purposes even if it is not explicitly decided, for it may have constituted, logically
or practically, a necessary component of the decision reached. Confronted with a general
verdict, courts commonly ask whether a finding was necessary to the judgment. Here the
rape charges were the centerpiece of Jennifer’s case (both lawyers argued it specifically).
In rejecting David’s statute of limitations defense, the jury must have accepted Jennifer’s
testimony as to the rapes, which were the only salient and specific acts of sexual abuse
(needed for a repressed memory) to which she testified (NOTE: In sexual abuse cases,
the statute of limitations is tolled when memory is recovered generally).
B. Settlement. Jarosz: Settlement generally carries no preclusive effect because no issue
has actually been litigated and determined.
2.
Was there a final judgment?
A. What does a final judgment mean? Jarosz: An evidentiary hearing or trial is not
required before issue preclusion can apply. The appropriate question is whether the issue
was subject to an adversary presentation and consequent judgment that was not the
product of the parties consent. The issue of Jarosz’s attorney-client relationship had been
briefed, and there had been a hearing, and the judge had made a determination.
B. The preclusive effect of the judgment is determined by the court rendering the decision,
and that preclusive effect follows the decision (Full Faith and Credit).
3.
Was the determination essential to the judgment?
A. Must be essential to the underlying claim. Jarosz: If issues are determined but the
judgment is not dependent upon the determinations, relitigation of those issues in a
subsequent action between the parties is not precluded. The requirement that the issue be
essential to the judgment means the issue must be essential to the underlying case (it must
have had a bearing on the outcome of the case). Jarosz’s attorney-client relationship with
Palmer was not essential to the determination on the merits of his claim against his
partners, and the issue was therefore not essential to the judgment. Preclusion doesn’t
apply.
B. Burden of Proof. Note the significance of burden of proof between prior and current
suits. Generally, prior suits cannot have a preclusive effect where the party against whom
preclusion is sought has a significantly heavier burden of persuasion now than in the first
action. For example, a D in a criminal prosecution for arson cannot be precluded from
litigating his guilt by a prior judgment in a civil action. However, had O.J. been
convicted of murder, that conviction would have precluded him from re-litigating the
issue in a subsequent civil action (but he couldn’t use his prior acquittal because these
parties weren’t in privity with the prior case). Restatement of Judgments § 28(4).
4.
Offensive Collateral Estoppel – Different Parties, P in 2nd Case is asserting Issue Preclusion.
(It would be “defensive” if the D in the 2nd case was asserted it through some case the P had
been in previously – defensive issue preclusion stops with the 3 factor test).
A. First, do three factor test as per above, then:
B. Parklane: The preferable approach for dealing with these problems in the federal courts
is not to preclude the use of offensive estoppel, but to grant trial courts broad discretion
to determine when it should be applied. The general rule should be that in cases (1)
where a P could easily have joined in the earlier action (e.g., if there are numerous
potential Ps who use a “wait and see” approach – allowing collateral estoppel would
mean if D loses once, he would lose every claim) or where (2) the use of offensive
estoppel would be unfair to the D, a trial judge should not allow the use of offensive
estoppel. If the D is sued in the first action for (1) small or nominal damages, he might
not prepare a great defense, or (2) where the second action allows procedural
opportunities unavailable in the first action (or if there are many inconsistent judgments
on the issue), it would be unfair. Here, Ps could probably not join the SEC suit. Also, D
had an incentive to litigate that suit fully. And there are no new procedural opportunities
available.
A. In General:
1. Res Judicata. The doctrine of res judicata prevents a P from litigating successive suits
against a D arising from the “same event.”
2.
Claim Preclusion. Claim preclusion requires a plaintiff to assert all matters arising out of the
same incident, and against the same party, in one lawsuit. The plaintiff’s lawyer must be
careful to include in the complaint all matters that might be considered part of the same claim
against the defendant, or risk preclusion of omitted matters in future litigation.
3.
Purpose for this rule. (Page 772). The litigation scheme established by the FRCP gives
litigants great latitude in joining clams and amending pleadings. To further this purpose,
courts have defined res judicata with sufficient breadth to encourage parties to present all their
related claims at one time.
4.
Claim preclusion is not stare decisis. Stare decisis applies to all litigants, whereas claim and
issue preclusion constrain only the parties from the previous case. The “law of the case,”
once determined, dictates an issue of law and cannot generally be relitigated in subsequent
stages of the same lawsuit.
B. Claim Preclusion does not apply to courts of limited jurisdiction.
1. Restatement of Judgments § 26 (1)(c) (Page 776, footnote). It does not apply where a P
was unable to rely on a certain theory or seek a certain remedy in the first action because
of the limitations on the subject matter jurisdiction of the courts.
2.
As illustrated in a divorce case. Heacock v Heacock. The P filed for divorce from the
D, and later filed a second suit tort action based on an act that happened during the
marriage. P had brought up these same facts as one of the bases for divorce. This is okay
on two grounds: (1) you could argue that it’s not the same “claim.” The facts that gave
rise for the action for divorce are not part of the same transaction as the facts that give
rise for the assault, and (2) even if the assault was the major reason for the divorce it’s
still not precluded because the divorce court has limited jurisdiction. She had no choice
but to split her claim.
3.
This exception does not apply when you choose a court with limited jurisdiction. If
you choose to go to small claims court (which has a $2,000 limit on damages), and were
not required to – as opposed to the divorce cases, you could have filed in small claims or
Superior Court. If you could bring the whole claim in one court and you don’t,
preclusion will bar the parts you don’t bring (so you can’t sue for more damages later).
The choice is what is important.
C. Claim Preclusion as a Defense.
1. Must be pled affirmatively. Source of Law: FRCP 8(c) (page 34 of FRCP): “Affirmative
Defenses: In pleading to a preceding pleading, a party shall set forth affirmatively … res
judicata …” But if a party has mistakenly designated a defense as a counterclaim or a
counterclaim as a defense, the court on terms, if justice so requires, shall treat the pleading as
if there had been a proper designation.
2.
Merger and Bar. Source of Law: Section 17 of the Restatement (Page 766): A valid and
final judgment is conclusive between the parties, except for appeal and direct review: (1) If in
favor of the P, the claim is extinguished and merged in the judgment. (If the P litigates any
part of that “claim”, the effects of a former adjudication are that the claim is extinguished in
the future). (2) If the judgment was for the D, the P is barred from bringing the remainder of
the claim. Comment d: This rule applies to a valid and final judgment even if the law
changes after the judgment has been entered. The only recourse they would have is on
appeal.
3.
Three elements must be shown for a claim preclusion defense.
 (1) that a prior suit proceeded to a final valid judgment on the merits;
 (2) that the present suit arises out of the “same claim” as the prior suit; and
 (3) that the parties in both suits are the same, or in privity.
(1) What constitutes a final valid judgment of the merits?
a. Rule 41(b): Presumptive treating of dismissal for failure of the P to prosecute as an
adjudication on the merits (page 777).
b. Cases where it is not a final judgment. Source of Law: Restatement (Second) of
Judgments § 20: “A judgment on the D, although valid and final, does not bar another
action by the P on the same claim: (1) when the judgment is one of dismissal for lack of
jurisdiction, (2) for improper venue, or for (3) nonjoinder or misjoinder of parties; or (4)
when the P agrees or elects a nonsuit (or voluntary dismissal) without prejudice or the
court directs that the P be nonsuited without prejudice; (5) Or when by statute or rule of
court the judgment does not operate as a bar to another action on the same claim.”
c.
In diversity suits (when choosing between state and federal law) (page 777).
i. Semtek International v Lockheed Martin. A federal case was dismissed in
California due to the state’s statute of limitations. Semtek refiled the claim in
the state court of Maryland, who had a 3 year statute of limitations. The
Supreme Court concluded that even though both FRCP 41(b) (page 123) and
the rendering (Maryland) court would treat the prior judgment as a valid
judgment “on the merits,” that was not conclusive as to whether the second
lawsuit was barred. Rather, California’s state law of claim preclusion would
control that determination.
ii. This Court decides that Rule 41(b) does not apply (the Court will tend to read
the Federal Rules very narrowly) – so, a dismissal on the grounds of statute of
limitations would look to state law. It may not have a very broad application
outside the statute of limitations cases. This only applies to diversity cases.
iii. NOTE: In state courts, the rules for preclusion vary. You would need to
research the preclusive effects of dismissals (say a 12(b)(6) dismissal).
(2) What constitutes the “same claim”? Transactional approach.
a. Transactional approach. Restatement (Second) of Judgments, § 24.
b. To determine whether sufficient subject matter identity exists between an earlier and later
suit, federal courts employ a transactional approach.
c. This approach recognizes that a valid and final judgment in an action will extinguish
subsequent claims with respect to all or any part of the “(1) transaction, or (2) series of
connected transactions, out of which the action arose.”
d.
e.
Factors. Weight should be given to such considerations as whether the facts are (1)
related in time, (2) space, (3) origin, or (4) motivation, (5) whether they form a
convenient trial unit, and (5) whether their treatment as a unit conforms to the parties’
expectations or business understanding or usage. In general, the expression connotes a (6)
natural grouping or “common nucleus of operative facts”. (7) It is appropriate to ask how
far the witnesses or proofs in the second action would tend to overlap the witnesses or
proofs relevant to the first. (8) Even if there is not substantial overlap, the second action
may be precluded if it stems from the same transaction or series. That a number of
different legal theories casting liability on an actor may apply to a given episode does not
create multiple transactions and hence multiple claims.
Case on Point: Broad definition of “claim:” Car Carriers, Inc. v. Ford.
i. Keypoints: (1) A mere change in legal theory does not create a new cause of
action; (2) courts will assume that parties know all the relevant facts before
filing their action.
ii. Facts: Car Carriers alleges that Ford engaged in fraudulent business practices
such as encouraging them to invest in equipment, opposing rate increases,
interfering with sales, terminates the contracts with them. In 1982, Car Carriers
(P) sued Ford (D) and others under the Sherman Antitrust Act, and with several
pendent state law claims which the court declined to take jurisdiction over
(dismissed without prejudice). The district court dismissed the complaint on the
grounds that the P did not suffer the type of harm that antitrust laws were
designed to recompense. The court further found that because the defect was
noncurable, the claims were dismissed with prejudice. In 1983, P brought a new
complaint against Ford, utilizing the same basic fact situation, this time based on
alleged violations of RICO and Interstate Commerce Act legislation. The
district court dismissed this suit based on res judicata.
iii. Holding and Rationale: Under res judicata, a final judgment on the merits bars
further claims by parties or their privies based on the same cause of action. A
“cause of action” consists of a single “core of operative facts” that give rise to a
remedy, a test that is decidedly fact oriented. A mere change in legal theory,
as here, does not create a new cause of action. In this case, P’s Sherman Act,
RICO, and Interstate Commerce claims essentially all arose from the same set of
operative facts. P’s claims that their second causes of action arose from facts
that were unknown at the time of the first action is without merit. Courts should
assume that parties have done their homework at the time they file the first
action. Analysis: Under § 24 of the Restatement, the second suit is precluded.
The P tries to argue that there were facts they didn’t know about at the time of
the first case – but they are held to be responsible for the facts. However, if
something new happens, it can be the subject of a new suit if it happened after
the first suit.
(3) The Parties are the same or are in privity:
a. Case on Point: Gonzalez v Banco Central Corp.
i. Key points: Privity exists where (1) there was substantial control, or (2) there
was virtual representation.
ii. Facts: Real estate purchasers (P) brought a suit against Banco (D), who were
the sellers of worthless land in Florida. The court entered a directed verdict
against the purchasers, known as the “Rodriguez” Ps. Then, another group of
purchasers, the Gonzalez group, brought its own suit against Banco. The
Gonzalez group (P) had tried to join the Rodriguez group in the original suit.
The district court dismissed the complaint of the Gonzalez group (P) on the
grounds of res judicata, holding that the Gonzalez group (P) was in privity with
the Rodriguez Ps in the earlier suit and, hence, that there was identicality of
parties in the two cases.
iii. Holding and Rationale: Identicality of parties exists only if the Gonzalez Ps
were in privity with the Rodriguez Ps in the earlier case. Privity, in turn,
b.
c.
depends on whether the present Gozalez Ps had (1) substantial control over
the earlier Rodriguez Ps or (2) were “virtually represented” by them.
Examples of privity. A person acquires an interest in property that has already been the
subject of a lawsuit; a party litigates in a representative capacity; a close familial
relationship exists between a party in the prior case and a non-party whose claim is
derivative or closely aligned with the former’s.
Notes. It’s the same “claim” but not identical parties. We have to determine if they are
in privity. They find that there are two bases for that: (1) substantial control, or (2)
virtual representation. (did the party against whom claim preclusion is being sought; did
they have their day in court?). On these facts, the second group didn’t have control.