FEDERAL RULES OF CIVIL PROCEDURE
RULE 8: General Rules of Pleading
RULE 11: Signing Pleadings, Motions and Other Papers; Representations to the Court; Sanctions
-
Rule 11(b): Representations to the Court
RULE 12: Defenses and Objections: When and How Presented; Motion for Judgment on the Pleadings; Consolidating Motions;
Waiving Defenses; Pretrial Hearing
- 12(b)(2): Motion for lack of personal jurisdiction
- 12(b)(6): Failure to state a claim upon which relief can be granted
RULE 13: Counterclaim and Cross Claim (adding claims after the lawsuit begins)
- 13(a): Compulsory crossclaim
- 13(b): Permissive crossclaim
- 13(g): Crossclaim against a co-party
RULE 15: Amendments
-
15(a)(2): consent of other party or court approval
15(b): amend pleadings to conform to what is tried after trial
15(c): allows a party to relate an amendment back to the original pleading under special circumstance
RULE 18: Joinder of Claims (making claims)
RULE 19: Required Joinder of Parties
- 19(a): Persons required to be joined if feasible
- 19(b): When joinder is not feasible
RULE 20: Permissive Joinder of Parties
- 20(c): joining two parties on side of the v at the outset of a suit
RULE 21: Misjoinder and Non-joinder of Parties
RULE 24: Intervention
- 24(a): Intervention of Right
- 24(b): Permissive Intervention
RULE 26: Duty to Disclose; General Provisions Governing Discovery
- 26(b)(1): Scope of Discovery
- 26(b)(3): Trial Preparation Materials
RULE 27: Depositions to Perpetuate Testimony
RULE 30: Depositions
RULE 33: Interrogatories
RULE 34: Production of Documents
RULE 35: Physical/Mental Examinations
RULE 36: Request for Admission
RULE 42: Consolidation; Separate Trials
- 42(a): Consolidation
- 42(b): Separate Trial
RULE 50: Judgement as a Matter of Law in a Jury Trial; Related Motion for a New Trial; Conditional Ruling
- 50(a): Judgment as a Matter of Law
- 50(b): Renewing the Motion after Trial; Alternative Motion for a New Trial
- 50(e): Appeals court finds whether new trial is appropriate
RULE 56: allows parties to intervene to determine if trial is necessary
RULE 59: New Trial; Altering or Amending a Judgment
RULE 64
U.S. CODE
§1331: Federal Question
§1332: Diversity of Citizenship, Amount in Controversy; Costs
§1367: Supplemental Jdxn
CONSTITUTION
Article III, §2: Arising Under Jdxn
1
Personal Jurisdiction: where can we hold someone accountable (geographically)?
-
Jurisdiction: court may exercise power over a dispute or party only if
§ long-arm statute
§ meets constitutional requirements (Due Process Clause)
Assertion of jurisdiction is always based on a statute ➝ long-arm statutes for nonresidents
Can always assert jurisdiction and sue in the state in which a company is incorporated and its PPoB
General rule: jurisdiction over ∆ is proper where the ∆ could be subjected to the jdxn of courts of the state where the federal district
court is ➝ rules and doctrines of state courts here will generally be same as federal
∆ can challenge by
§ moving to dismiss under Rule 12(b)(2)
§ challenging in their answer
-
Basic Framework for Personal Jurisdiction
1.
2.
Is there a statute that gives jurisdiction?
If yes, is exercise of jurisdiction constitutional? Constitutional question…
- Purposefulness?
- Contacts?
§ Enough for general?
§ Related for specific?
Overview of Specific Jurisdiction
1.
2.
Minimum Contacts ➝ International Shoe Co. v. Washington
a. Purposefulness ➝ Hanson v. Denkla
b. Intentional Torts ➝ Calder v. Jones
c. Contract ➝ Burger King, McGee
d. Stream of Commerce ➝ McIntyre
e. Quasi in Rem ➝ Shaffer
f. Internet ➝ Zippo
Reasonableness/ Traditional Notions of Fair Play and Substantial Justice ➝ Asahi
a. Burden of ∆
b. Forum State Interest in Adjudication
i. State law may apply
ii. One of the parties may be citizen of the state
iii. Incident giving rise to suit occurred there
c. 𝚷 interest in obtaining convenient and effective relief
i. Citizen of that state
ii. Forum provides relief 𝚷 desires
d. Interstate judicial system’s interest in most efficient resolution
i. Location of witnesses and evidence
e. Shared interest of several states in furthering substantive social policies
i. Greater significance with foreign country
Minimum Contacts Test (International Shoe)
1.
2.
3.
4.
5.
List all contacts
Purposeful availment? Purposeful direction? ➝ Asahi, BK, McIntyre, Calder, Walden
a. Contracts: BK
b. Effect: Calder, (Walden
c. Stream of Commerce: Asahi, McIntyre
Relatedness of contacts?
Continuous and systematic or isolated contacts?
Reasonableness?
a. Burden on defendant?
b. Plaintiff interest?
c. Forum state interest?
d. Interstate federalism’s interest?
e. Judicial System’s interest?
2
PENNOYER V. NEFF
Parties: 𝚷: Neff; ∆: Pennoyer
Facts
- Neff was a resident of CA who owned and in Oregon. He hired Mitchell to do legal work but didn’t pay him. Mitchell sued Neff
for legal fees in Oregon State Court. Neff didn’t show up and Mitchell won by default. Neff wasn’t in Oregon so Mitchell couldn’t
execute the judgment against him. Mitchell told the sheriff to sell Neff’s land in order to be paid back. Sells it in 1866.
- Neff returns in 1874 and sues Pennoyer. Pennoyer says that Neff doesn’t own the land because the government deed became invalid
when Oregon attached the property and sold it to satisfy Mitchell’s judgment. Neff argued:
(1) Notice was invalid because the affidavit was signed by the wrong person.
(2) Oregon cannot constitutionally assert jurisdiction over him because he wasn’t there and Mitchell didn’t attach property
to him at the beginning of the suit.
Holding: A court can only assert jurisdiction over a non-resident if (1) individual is served in the state (2) has property within the state that
is attached before a suit is initiated.
Reasoning: The Supreme Court didn’t allow Neff’s notice argument but did allow the constitutional jurisdiction one. Oregon would’ve had
jurisdiction if (1) Neff was a resident (2) Neff was present in the state when served (3) The property in Oregon state was attached at the time
the suit was initiated.
Notes
Court adopted a territorial theory of jurisdiction
- Each state has complete and exclusive control over everything in its territory
- No state may exercise direct jurisdiction and authority over person/property outside of its territory
TICKLE V. BARTON(1956)
p. 31
Parties: 𝚷: Tickle; ∆: Barton and Lawrence
Procedural History: Attempted to serve ∆ once but were unsuccessful. Issued an alias process. Barton files plea in abatement (motion to
dismiss). Tickle issued a demurrer. Circuit Court rendered service invalid. Court of Appeals affirmed.
Facts: Tickle was an infant hit by a vehicle (Barton and Lawrence Coleman). Sued for trespass on the case (indirect injuries; a form of
negligence) in the McDowell County Circuit Court. Barton not a resident of McDowell County; lives in Austinville, VA. Arranged for Barton
to be served twice. Π’s attorney called Barton inviting him to a banquet in War county. Did not disclose his identity. Barton was served at
the banquet.Barton objected to the validity of service of process.
Issue: Is an alias process void if there is no initial personal jurisdiction on the ∆, who is consequently procured by means of deceit?
Holding: If a ∆, who initially was not able to be served due to lack of jurisdiction, is served due to fraudulent procurement, that service is
invalid.
Reasoning: Affirmed because of trickery and deceit. It isn’t that they don’t have jurisdiction, it’s that they shouldn’t exercise it. There has to
be a hearing to resolve it. It will be hard for Barton to prove deceit, however. When they didn’t say their name, he could’ve just not gone.
Principles
- Personal jurisdiction is distinct from subject matter jurisdiction. Personal jurisdiction is connected to territory.
- Personal jurisdiction is distinct from service of process. You need proper service to validly exercise jurisdiction.
- Procedural rules have consequence.
HESS V. PAWLOSKI
Parties: 𝚷: Pawloski; ∆: Hess
p. 87
Facts: Pawlowksi sued Hess for damages for personal injuries as a result of Hess’ negligence and wanton driving of a motor vehicle on a
public highway in MA. Hess was a resident of Pennsylvania. Had no property in Massachusetts and did not have a personal service made
upon him. Registrar of Motor Vehicles served based on a Massachusetts statute. Hess argued that the statute violates the Due Process Clause.
Issue: Does a state have the jurisdiction enact and implement legislation that are put in place to protect the commonwealth on nonresidents?
Holding: A state may make an enforce regulations on residents and non-residents in order to protect a public interest, as long as it treats
residents and non-residents equally.
Reasoning: Hess implied consent to the statute. The statute created the assumption that anyone who drives in the state implicitly consents
to service. The statute was limited in scope and affected residents and nonresidents equally. The state has an interest in regulating a dangerous
activity in the public’s best interest.
3
Notes
-
∆ could’ve been sued (a) in PA where he resides (b) in MA (if he were there)
States have a sovereign interest in protecting citizens. The issue here was that it was hard to protect citizens under Pennoyer.
Due Process is the power of the court to limit state power.
Still holds on to the territoriality of Pennoyer, but knows that they have to be flexible.
Court is limited by the context of the issue.
INTERNATIONAL SHOE CO. V. WASHINGTON
Parties: 𝚷: Washington; ∆: International Shoe
p. 91
Facts: International Shoe Co. is incorporated in Delaware with PPoB in St. Louis, Missouri. Several units around the states outside of
Washington. No office or contracts in Washington. Only presence in the state was 11-13 salesmen compensated by commission, which
totaled over $31k. Salesman have samples, but only one shoe per pair. No salesman can enter into contracts or make collections. Washington
sued because they wanted to collect the state unemployment fund tax from International Shoe. All employers in the state of Washington
must do so.
Arguments:
𝚷
Pennoyer: Corporation was present in the state, in a sense.
Hess: implied consent
∆
Pennoyer: jurisdiction if
a. lives, incorporated or offices in state
b. service while in state
c. owns property in the state
a. D can be sued in DE or Missouri
b. Did not receive service in state
c. Salesmen only have one shoe in their sample. Cannot
assert jurisdiction over value of property if the property
has no value.
Claim there is no citizenship, presence or ownership.
Question of “traditional notions of fair play and substantive justice”
Holding (for 𝚷): Historically, a defendant must have presence to be binding, but now the defendant must have minimum contacts.
Reasoning: Based on the minimum contacts, it is reasonable to assert jurisdiction. ∆’s actions were not irregular or casual, they were
continuous and systematic. ∆ had a lot of business in Washington and it was highly related to paying taxes.
Notes
-
Hypos
1.
2.
Benchmark case for what you do when the defendant is not present in the state ➝ established minimum contacts
No longer talking about presence, the ∆ didn’t have presence.
Ambiguous application of minimum contacts under the traditional notions of fair play and substantive justice
All a continuum:
Main question: Are there minimum contacts in relation to traditional notionsof fair play and justice to assert jdxn?
- Very few contacts/ unrelated to the action ➝ no suit
CA resident broke ankle in shoe in state of WA. Wants to sue ISC in WA.
- 𝚷: contacts were continuous, systematic and related
- ∆: ISC is not a citizen of the state of WA.
§ 𝚷: still happened/regulated in WA. There are regulatory interests and interests in protecting citizens of the State.
- JURISDICTION
CA resident has shoes shipped to her in CA. Injured in CA but wants to sue in WA.
- 𝚷: contacts in CA are continuous and systematic. WA wants to protect citizens from similar injury.
- ∆: sale and injury both occurred in CA. Shoe was manufactured in St. Louis. Contacts in WA are not related. The shoes
were delivered to CA.
4
MCGEE V. INTERNATIONAL LIFE INSURANCE CO.
Parties: 𝚷: McGee; ∆: International Life Insurance Co.
p. 104
Facts: 𝚷 was a beneficiary of a life insurance policy issued by Empire Mutual Insurace to Lowell Franklin, resident of CA. ∆ assumed Empire’s
insurance obligations and transacted business w Franklin by mail until he died. Refused to pay 𝚷 when Franklin died. Neither insurance
company ever had an office or agent in CA other than Franklin. 𝚷 sued based on CA Unauthorized Insurer’s Process Act. Recovered in CA
and went to enforce judgment in TX.
Holding: A corporation is subject to the jurisdiction of a state in which it engages in business with a resident of said state.
à is this right????
Reasoning: Contacts: (1) insurer was a resident of CA (2) mail in CA (3) no office or agents in CA; just solicited Lowell, SCOTUS said they
were enough to assert jurisdiction. Sufficient that the contract had substantial connection with CA. Policy of preventing the undue burden
of traveling to where the insurance company is to litigate. Litigate where the state has interest.
Notes
-
𝚷 went to TX bc ∆ didn’t have assets in CA.
If CA didn’t have jdxn, TX could’ve called for a new trial in TX.
HANSON V. DECKLA
Facts: Old woman died and left her estate to her two daughters and named two grandchildren the beneficiaries of her trust. Two daughters
brought an action in FL claiming that the assignment was invalid. Old woman made the trust in Delaware then moved to Florida.
Holding: Contacts related to the unilateral activity of an individual are not enough to assert jurisdiction.
Reasoning: Contacts: (1) trust in Delaware (2) trust mailed income to FL (3) domiciled in FL. Mail was related to the cause of action because
it was about who gets the will. The trustee’s only contact with Florida was that she was domiciled there. Contacts were a product of unilateral
activity, not purposeful availment.
Notes
-
Difference with McGee ➝ moved to Florida after the trust was formed
In McGee, the solicitation of business was purposeful availment.
If they are not a product of purposeful availment, don’t even look at the contacts.
WORLDWIDE VOLKSWAGEN CORP. V. WOODSON
Facts: Family was driving to Arizona and was injured in an accident on the way in Oklahoma. Sued retailers.
Issue: Can Oklahoma state exercise jurisdiction over nonresidents for something that happened in state?
p. 109
Holding: Contacts must be purposeful and a product of the defendant’s conduct. If there are no minimum contacts, reasonable and fairness
does not matter.
Establishes a two-prong test for Due Process
1. Minimum contacts – purposeful availment
2. Reasonableness/fairness
Court has no jurisdiction because…
1. Based on activity of the plaintiff
2. The contacts with Oklahoma were a result of unilateral activity ➝ accident happened in Oklahoma
Court distinguished two types of foreseeability
1. Product might be in the state
2. Might be brought to suit in the state ➝ stronger
KEETON V. HUSTLER
VW Notes p. 118
Facts: Keeton (𝚷) not from NH but brought libel suit in NH against a nationwide magazine because of New Hampshire long arm statute
allowing suit to be brought 6 years after the action. Jurisdiction.
Held: state can assert personal jurisdiction over published of a national magazine that published an allegedly defamatory article about a
resident of another state where the magazine had a wide circulation in that state
Reasoning: regular, monthly sales of thousands of magazines are not random, isolated, or fortuitous
5
KULKO V. SUPERIOR COURT
VW Notes p.119
Facts: custody battle. Child moved to CA to be with mother. No jurisdiction.
Holding: Although action directed toward CA/brunt of the harm felt there, he did not purposefully avail himself to the state’s benefits by
making a decision that promoted family harmony.
RULE: Just because you don’t satisfy purposefully availment standard doesn’t mean you didn’t cause an effect in the state.
CALDER V. JONES
Facts: Tort for libel in CA. Journalist wrote something and ruined 𝚷 reputation. Jurisdiction.
VW Notes
Jurisdiction on causing harmful affect in forum ➝ focus on intentionality
- Intentionally causing harmful conduct towards a forum resident will support assertion of jurisdiction in the victim’s state of
residence if they suffer brunt of the harm there
- Purposeful availment argument irrelevant bc issue is whether or not the ∆ caused effect on the 𝚷 in CA by their actions in FL
- Cannot attribute contacts of employer to employee.
Rule: Under Calder standard, causing an effect in forum state can be sufficient. Purposeful availment is irrelevant to the effects test.
BURGER KING CORP. V. RUDZEWICZ
Facts: MI businessmen signed a 20 year contract with BK, a FL corporation. BK sued for falling behind on payments.
Reasoning: 20 year contract anticipates a lot of back and forth with the forum state.
- choice of law is different than choice of forum (contracts)
- just a contract is not enough of a contact
- inconvenience for defendant does not mean its unconstitutional
- Contacts must be highly related to action to satisfy purposeful availment
p. 120
To Demonstrate Purposeful Availment
1. Negotiations leading up to contract ➝ who reached out to who?
2. Terms of Contract ➝ choice of law clause? who receives payments?
3. Contemplated Future Consequences of Contract ➝ what relationship did they contemplate?
4. Actual Course of Deal
ASAHI METAL INDUSTRY CO. V. SUPERIOR COURT
p. 124
Dictum from VW applicable to this case: It wouldn’t be unconstitutional to exert jurisdiction over corporation that delivers products into
the stream of commerce with the expectation that it will be purchased by consumers in the forum state.
Facts: Asahi (Japanese corp. manufactures tire valve assemblies in Japan) sells to Cheng Shin (Taiwan). No jurisdiction. Asahi knew that their
products would end up in CA but didn’t contemplate that the sale would make them amenable to suit in CA.
**Question of jurisdiction under the unreasonable prong
Distinguished from VW
- Manufacturer of component part is aware that its used in CA. Knows part is being used in manufacturing of product in CA.
- Car dealer with great mobility has fortuity to end up in a state
Majority operating on reasonableness ad fairness. Unreasonable because
1. Burden on ∆ is huge
2. Forum state doesn’t have a high interest. 𝚷 (Cheng Shi) is not a resident of CA
3. 𝚷 interest in obtaining relief is low
What divided the court?
- Is placing the product into the stream of commerce with awareness enough? 4 yes, 4 no.
- Not purposefully directing it into the state; equating purposeful availment with purposeful direction
What does purposefulness mean in this context?
- Brennan: as long as ∆ knows goods are sold there, should expect suit. You have control; you can choose not to sell to 𝚷.
The flow of production is a sliding scale.
§ Sliding scale: more showing of min. subst. contacts when there is a lesser showing of reasonableness & vv
- O’Connor: need to do something more for purposefulness (i.e. advertisements)
6
Holding: The exercise of personal jurisdiction would be unreasonable considering the international context, the heavy burden on the alien
∆ and the slight interests of 𝚷 and forum state.
Do minmum contacts require intentional affiliation with forum state (O’Connor) or knowing affiliation w forum state (Brennan)?
MCINTYRE V NICASTRO
NO ANSWER: 4-2-3 opinion. No jurisdiction.
133
Facts: McIntyre = UK company. Worker severed finger on of their machines at a company in NJ. Trade shows in popular cities across the
US bc they wanted to sell in the US. McIntyre said to distributor “sell as many as you can wherever.” No reps/agent sin NJ. Interested in
US market as a whole. Independent distributors and US patents. NJ has a statute but not in line with the Constitution therefore no
jurisdiction in fed. courts.
Kennedy (similar to O’Connor)
- Worried if you adopt Brennan’s approach small companies will be hurt
- Defendants actions must be consent invocation of state benefits/privileges ➝ manifestation of consent to submit
- Had intent to serve the US market so maybe defendant is subject to courts of the United States but not of a sovereign state
- NJ cannot assert jurisdiction bc contacts ➝ maybe federal courts
Others
- Breyer says not to rush to judgment➝ single, isolated sale
- Ginsburg dissent: if you have a targeted jurisdiction and you haven’t purposefully said to a state in that region, theres jdxn
WALDEN V. FIORE
Facts: Cop confiscated money from gamblers in GA. Jurisdiction in Nevada, where they live? No.
Contacts: No business in NV, no contract in NV, never was there and no action there
Calder
-
-
p.133
Effects case theory: plaintiff believes his false affidavit negatively affected them and can assume he knew they were in NV.
Intentionally lying and hurting plaintiffs in NC
- Narrows, but does not overrule Calder
Harm/intent and statements made outside of forum in both, why different?
- Calder= broad ruling about intentionally affecting someone in forum state
§ more related contacts in FL
§ Sources in CA v. defendant never went to or contacted CA
- Nature of torts libel v. false affidavit
Contacts are based on the Forum state itself, not those who reside in it. Contacts are measured by virtue of contacts with the forum state.
Defendant must purposefully make contact with the Forum, not just the plaintiff.
-
Inconsistent with Hess
7
Overview of General Jurisdiction
1.
2.
3.
4.
How many contacts? What contacts?
What is enough?
Look at previous cases to answer 2.
Corporations
a. Principal Place of Business
b. Incorporated
c. Place with a shit load of contacts
** Doesn’t Matter if contacts are related to course of action. Jdxn as long as you meet the threshold of contacts needed for gen. jdxn.
In Rem and Quasi in Rem Jurisdiction
in rem jurisdiction: power of court over property
- Who owns ___?
- Judgment about claim to prop against whole world
quasi in rem jurisdiction: adjudicating rights about property of a particular set of people (binds the parties involved)
- Ex. two people fighting over who owns property
- Attach property to claim to assert jurisdiction
- Own property in NH; car accident in CA; sue for car accident in NH
- Recovery= limited to the value of property
To get jurisdiction:
- Consent
- Citizenship
- Presence ➝ justified exercise of in rem
**only place to sue for in rem is where the property is located
8
GOODYEAR V. BROWN
p.151
Cites two prior cases of general jurisdiction
1. Perkins v. Benguet Consol. Mining Co.➝ Philippine corp domiciled in Ohio. Suit not connected to activity in Ohio but jdxn
- Where cause of action does not arise from business done within forum state, due process requires that in-state business
actually conducted be systematic and continuous so it doesn’t make it unjust that corp be forced to defend suit there
2. Helicopteros ➝ helicopter crash in US; Colombian company in Peru that spends money in TX
- “Mere purchases” are not enough to warrant assertion of general jurisdiction
- CEO’s trip was an isolated occurrence
Facts: Company with subsidiaries in Luxembourg, France, Turkey, and USA. Goodyear tires that caused bus crash that left two NC kids
dead. Small percentage of products distributed in NC by intermediaries. Contacts between defendant and North Carolina were not enough
to assert jurisdiction.
- Sporadic sales through intermediaries that didn’t count for a large enough percentage of sales
Contacts must be so continuous and systematic as to render the business at home in the forum state. Reasonableness and fairness is not an
issue if you have the contacts to assert general jurisdiction.
DAIMLER AG V. BAUMAN
Facts: German company with subsidiary in Argentina that aided in war crimes and subsidiary in US that sells a lot to California but based out
of Ohio. No jurisdiction.
Holding: In addition to continuous and systematic contacts with a forum state, those contacts must surpass an unspecified level when
viewed in comparison to the company’s nation and worldwide activities.
- Transnational context matters
- Reasonableness and fairness doesn’t matter; must be purposeful
- Relative volume of business to forum is relevant to other places
BRISTOL MEYERS SQUIBB
Facts: Pharmaceutical company sued in class action suit for damaging health. Plaintiffs all harmed by drug in different places
Specific Jurisdiction did not work . Not prescribed, made or sold in CA. Cause of action stems from harms caused by drug outside of CA.
Suing together in CA bc strategic ➝ by suing together they could avoid being moved to federal court
Sotomayor: argument that being able to sue @ PPoB/place incorporated is problematic
1. shifts burden from corporation to individuals
2. Massive suits won’t be available
- Can’t recover that much; more valuable claim when aggregated
- Won’t be valuable to people who are slightly harmed by a corporation
- Corporations will get away with it
**COMMUNITY BANK V. COMMUNITY TRUST
P. 159
Facts: bank in Kentucky filing a suit against financial institutions (Louisiana corporations) for trademark infringement. Yes to jurisdiction;
6th circuit reverses)
Zippo Test: nature and quality of contacts
- Created perverse incentives to make websites less functional
- Interactive websites warrant jdxn
- Passive= info is accessible by residents of foreign jdxns
- Would never get general jurisdiction because you have an interactive web
- Think of the internet as one possible purposeful contact
9
SHAFFER V. HEITNER
Facts: Greyhound shareholders. Shareholder sued on behalf of greyhound against several directors, most of who live in AZ or CA.
Property is in DE (shares of Greyhound stock). Quasi in rem jurisdiction. Property is stocks. No jurisdiction.
- Claim was not about property. Property was used to assert jurisdiction in DE.
- If stock was attached in DE, they would have to show up to defend the entire action, not just jurisdiction. Or they could just not
show up and get a default judgment.
Court: judge in rem jurisdiction based on standard of minimum contacts established by International Shoe.
-
Contacts must be purposeful and related ➝ cause of action and contact must be related
Presence of property alone does not assert jurisdiction
Away from Pennoyer
- Stated that attaching property only indirectly affects an individual (unlike in personam that directly affects it)
- Overruling aspect of Pennoyer states that presence of property always means jurisdiction
- If you keep Pennoyer, you can just move to another state and get rid of the contacts
- Application of Pennoyer to intangible property➝ sacrifices fair play and substantial justice
Pennington: attach property by way of suit to get jurisdiction
- Attached intangible bank account ➝ sufficient for in rem jurisdiction
- Only needed to ascertain if property was attached and in state bounds
HARRIS V. BALK
Facts: Epstein sues Balk through Harris. Harris pays the money he owed to Balk to Epstein instead. Walking debt. Not suing the person,
but for the debt. Quasi in rem type 2. Yes jurisdiction.
Holding: judgment in one state’s court over a party must be valid and given to another state’s court. Debtor’s obligation accompanies him
wherever he goes. Holding in Maryland Court was valid, so the defense in the NC court was as well.
INSURANCE CORP OF IRELAND V. COMPAGNIE BAUXITES DE GUINEE
p. 191
Facts: BG’s (incorporated in DE; only does business in Rep. of Guinea) insurance company (London) refused to pay million dollar claim.
Filed suit in PN where they purchased the insurance from a domestic insurer. Allowed limited jurisdictional discovery. Said if they don’t
allow discovery, court assumes jurisdiction.
Takeaways:
1. You can consent to or waive jurisdiction by not cooperating.
2. Courts always have the jurisdiction to discover and deteremine if they have jurisdiction
BREMEN V. ZAPATA
Facts: Zapata was a Houston based company that contracted with a German based towing company to tow a drilling rig from Louisiana to
Italy. Contract stated that all disputers were to be litigated in London Court. Rig damaged off coast of FL. No jurisdiction in FL.
- First case where forum clause was enforced
Holding: Forum-selection clauses should be enforced by federal courts unless the circumstance is deemed unreasonable.
-
SCOTUS held up admiralty law and emphasized and agreement that was made in an international trade context.
Two parties had equal bargaining power
CARNIVAL CRUISE V. SHUTE
Facts: Tickets were bought in WA from travel agent. Contract stated all litigations must be through FL court. Off the coast of Mexico, the P
fell on deck injuring herself. Jurisdiction.
Holding: Forum selection clause is upheld unless unreasonable.
- Don’t go into minimum contact➝ only look at forum selection clause
- Two parties did NOT have equal bargaining power
Why is jurisdiction in FL okay?
- The cruise line has a special interest in choosing the forum because it has clients from various places
- Dispels the confusion and saves time/expense of pretrial motions
- Passengers benefit from reduced fares that result from the cruise line saving for limiting the forum
10
Subject Matter Jurisdiction: in what venue (court) can we hold someone accountable (federal or state)?
Personal Jurisdiction
Can be waived or consented to
Parties can agree to ignore
Subject Matter Jurisdiction
Cannot be waived or consented to because it places a structural
limitation on the power of federal courts
Cannot agree to ignore
Can challenge at any point. If they don’t have the power to assert
jurisdiction, VOID.
Vertical Federalism: federal vs. state courts
Require a statute
Horizontal Federalism: worried about overstepping other states
Require a statute
Generally, there is no subject matter jurisdiction limit over state courts.
Question about state or federal court is a different question than state or federal law ➝ Congress can only legislate on certain matters and
federal courts can only hear cases on certain matters
Overview:
1.
2.
3.
Diversity Jurisdiction
Amount in Controversy – 75k or injunction with value of over $75k
Arising under/federal question
a. Federal law creates cause of action
b. State law creates cause of action but depends on an aspect of federal law
Article III §2; 28 USC §1332
- Article III, Section 2: Extends judicial power of the US to controversies between citizens of different states and between a state
-
and foreign states, citizens, subjects
28 USC §1332: Diversity of Citizenship; amount in controversy; costs
District Courts have jurisdiction over civil actions where the matter in controversy exceeds the sum or value of $75,000 and is between
1. Citizens of different states
2. Citizens of a state and citizens or subjects of a foreign state
3. Citizens of different states and in which citizens or subjects of a foreign state are additional parties
4. A foreign state, as plaintiff and citizens of a state or different states
**This section & section 1441 ➝ a corporation is a citizen of the state incorporated and where it has its PPoB
Removal jurisdiction: remove from state to federal court
- Cannot remove when you’re a citizen of a state
- Purpose is to protect against bias ➝ can’t be biased in your home state
Diversity jurisdiction: federal court can hear cases that arise under state law as long as constitutional and statutory reqs are satisfied
- Not based on subject matter ➝ based on identification of parties
- Desire to avoid discrimination against out of state residents in state courts
- Help create a secure financial environment
Diversity Jurisdiction
1. Domicile doesn’t change until you reside in a new domicile with the intent to stay there
2. Apply federal law to determine the domicile
3. Determine domicile based on status at the time the lawsuit was initiated
4. You can take advantage of the state the plaintiff is domiciled in for federal suit
5. Must sue in a state court if alien is domiciled abroad
6. If a company is not incorporated but has members/citizens in all 50 states, no diversity of citizenship
7. Complete Diversity: everyone in one party is of different citizenship than the other party (i.e 𝚷: NJ, DE; ∆: NY, SC)
**state courts set own rules for jurisdiction; do not depend on domiciles
**Incomplete diversity is prohibited
Alien jurisdiction: federal forum for disputes between U.S. and foreign entities ➝ Protects from prejudice in state courts
Amount in Controversy
- Monetary value as a measure of import ➝ controversies over $75,000 are more important for federal courts to decide on
- Must show that the claims are worth over the threshold with a legal certainty
- Assess amount at the beginning of the case
- Value of injunction to parties ➝ value to the party invoking jurisdiction
- Cannot aggregate the claims of two parties, unless the law says you can.
- Exception: when the nature of claims is jointed
- ***** Can aggregate claims but not parties
11
MAS V. PERRY
p. 271
Facts: Two way mirror in bedroom of rented apartment. Mrs. Mas = citizen of Mississippi, Mr. Mas= citizen of France, ∆= Louisiana. No
federal jurisdiction.
Holding: To be domiciled somewhere, you must be physically present in the state and have the intention of remaining there indefinitely.
Residence in a state does not establish a domicile for purposes of diversity jurisdiction.
- Residence in a state does not establish domicile for purposes of diversity jurisdiction.
- The Mases had no intent to stay in Louisiana, so they were still citizens of their previous states.
**Partnerships and unincorporated associations are citizens of every state and country of which its partners or members are citizens
AFA TOURS, INC. V. WHITCHURCH
Facts: complaint against tour guide for misappropriation of trade secrets. Lower court never gave plaintiff ability to prove damages.
p. 282
Holding: Must appear to a legal certainty that the claim is less than jurisdictional amount to justify a dismissal. A court cannot dismiss a
diversity action for failure to meet the amount in controversy requirement without allowing plaintiff to brief the issue.
FREELAND V. LIBERTY MUTUAL FIRE INSURANCE
p. 287
Facts: Son borrowed care, crashed it, died, killed whole family. Son wasn’t insured so insurance company said they would only pay $25k
instead of normal $100k for deaths. Amount was 1 penny short of the jurisdictional minimum.
Holding: must be remanded to state court for not fulfilling the federal court requirements
Article III, § 2 & §1331: Arising Under Jurisdiction
Article III Federal Question Jurisdiction: constitution gives judicial power to the US “to all cases, in law and equity, arising under this
Constitution, the Laws of the US, and Treaties made, or which shall be made under their authority.”
- Justified on three grounds
1. Promote uniformity of federal law
2. Encourage judicial expertise in interpreting federal law
3. Protect against possible state-court hostility
§1331: The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the U.S.
- states almost same thing as Article III, but courts interpreted it to mean something much narrower to limit the cases in federal court
- Constitution not enough; need a statute
OSBORNE V. BANK OF UNITED STATES
p. 293
Facts: claimed that Ohio state law was being violated with the collection of taxes. Statute gave rights to bank to sue/be sued in federal court.
Federal jurisdiction.
Holding: Article III grants jurisdiction wherever a federal ingredient (any federal issue that could possibly be brought up) exists.
-
Focused on Article III
Could’ve been solved easily bc constitutional claim, but Justice Marshall interpreted it broadly to establish precedent.
Protective jurisdiction➝ expansive view meant to protect federal jurisdiction
Federal ingredient = validity of bank’s charter
LOUISVILLE & NASHVILLE R. CO. V. MOTLEY
p. 296
Facts: Couple injured on train promised free pass for life. 𝚷 anticipated ∆ would use new Congressional bill as defense to forbid free passes.
No jurisdiction.
Well-pleaded complaint rule: cannot use a possible defense to assert jurisdiction. Federal question jurisdiction exists only if a question of
federal law exists in the complaint.
- Narrows arising under jurisdiction
Declaratory Judgment Act: allows federal court to declare rights of an interested part in a case of actual controversy within jurisdiction
- Not in an traditional coercive action
- Ppl who are prospective defendants and scared of future suit would want declaratory action in absence of relief/injunction
- Insurance companies that kow a case is coming – beneficial to choose the forum
Hypo: What would happen if RR brought declaratory action of validity of federal law that took away passage?
- No jdxn. Declaratory judgment doesn’t expand the district court’s jdxn. Only meant to issue judgment in cases w/ jdxn already
**demonstrated the ramifications of narrow interpretation of §1331 arising under jurisdiction
12
T.B. HARMS V. ELISCU
Facts: Contract claim over owner of copyright. State law resolves the issue.
- Under Motley: no federal issue in the well pleaded complaint
- Established the creation test
p. 299
Creation test: When a federal law creates the cause of action, suit arises under federal law.
Two ways to arise under federal law:
1. Claims created by federal law that must be determine by federal law
2. Claims created by state law that need to be examined by federal Constitution? Yes, the act is a federal ingredient.
Two tests in this case that determine federal jurisdiction
1. Whether the suit arises under a law that creates cause of action
2. Whether there is a remedy available under federal law on which jurisdiction is based
SHOSHONE V. RUTTER
p. 304
Facts: Federal statute establishing a system allowing miners to resolve conflicting claims to land patents. Provided the right to possession was
to be determined by “local customs or rules of miners in the several mining districts.”
- Congress created statute but said to use state law in application
- Meets federal ingredient test but, due to the need to use state law to examine the statute, there is no federal jurisdiction.
- Exception to creation test
SMITH V. KANSAS CITY TITLE AND TRUST CO.
Facts: 𝚷 argued ∆ issued state bonds under constitution illegally. Cause was created by state law. Doesn’t meet creation test.
General rule: Right to relief under state law depended on construction of federal law.
p. 304
MOORE V. CHESAPEAKE & OHIO RAILWAY CO.
p. 304
Facts: 𝚷 brought action under KY’s Employer Liability Act, barring affirmative offense for contributory negligence or assumption of risk if
∆ failed to meet state or federal requirements. 𝚷 alleged ∆ failed to comply w Federal Safety Appliance Act. Created by State Law. 𝚷 raised
issue as a way to rebut anticipated defense.
Holding: suit brought under state statute and brings within purview of the statute a breach of duty imposed by a federal statute is not
regarded as a suit arising under the laws of the US and cognizable in federal court in the absence of diversity of citizenship.
MERRELL DOW PHARMACEUTICALS, INC. V. THOMPSON
p. 304
Facts: 𝚷 sued drug manufacturer in state court on number of state law claims. ∆ failed to comply w labeling requirements under a federal
statute. ∆ removed to federal court.
Holding: federal interest in state negligence suit was too insubstantial to support jurisdiction.
- Agencies can enforce federal law, states can use tort law
Why no federal jurisdiction?
- Disclaimed adoption of a bright-line rule. Should be careful judgments about the nature of a federal interest at stake
- If federal labeling standard could get a state claim into federal court without a federal cause of action, so could any other federal
standard without cause of action.
A state law claim requiring federal law does not necessarily arise under federal jurisdiction because of federal interest.
13
GRABEL & SONS METAL PRODUCTS V. DARUE ENGINE & MANUFACTURERS
p. 304
Facts: IRS seized Grable’s property because he didn’t pay taxes. Grable received notice by certified mail before the IRS sold the property to
Darue. Grable brough quiet title action in state court, claiming that Darue’s record title was invalid bc the IRS failed to notify Grable by
personal service, which was required by the statute. ∆ removed to federal court.
- quiet title: “I own this property”➝ government sold you the property, but didn’t take it from me correctly, so its not yours
**Example of federal court hearing a fundamentally state claim.
Why take jurisdiction over a state claim with a federal issue?
- Must be a substantial federal issue
- Federal courts care more about federal issues than state courts
Case introduced four ingredients for federal jurisdiction in the case of a state law claim embedded with a federal issue
1. Essential element
2. Contested federal question
3. Substantial federal issue
4. Congressionally approved division of labor between federal and state courts (vertical federalism)
EMPIRE HEALTHCHOICE INSURANCE, INC. V. MCVEIGH
P. 311
Facts: issue was dispute of fact (less important than dispute of law). Contract between insurance company and federal employees is governed
by federal law. Contract between federal agency and the insurance company states that they must take reasonable steps to get reimbursement
but not that they would automatically be reimbursed.
- Does not change Grabel!!!
Using Grabel
1. Federal issue: contract between the government and insurance company
2. Dispute: factual dispute, not a legal dispute (Grabel)
3. Substantiality: Congress didn’t create a federal cause of action. Congress made it clear that it wanted federal jurisdiction available to
certain claims but not this one. Claim was not triggered by any federal department, agency or service.
Still unsure about…
1. Substantiality
2. Factual v. legal disputes
GUNN V. MINTON
p. 313
Facts: ∆ represented by 𝚷 in a federal patent infringement action in which patent was declared invalid. Claims ∆ didn’t use a specific clause
that would’ve allowed him to win. ∆ claims didn’t raise a federal patent issue that he believes would’ve won him the case.
- Federal patent – malpractice
- Patent= federal law
- Malpractice= state law
- Holding: A case only arises under federal patent law when it raises a disputed and substantial federal issue that a federal forum may
entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.
Using Grable
1. Essential: Yes. Has to show that patent would have been granted if ∆ made the argument.
2. Dispute: Yes—matter of law
3. Substantial: only important to parties, not the federal system. Court wouldn’t be deciding a legal principle. Can’t establish precedent
(forward looking) or get the patent for him (backward looking)
a. The federal issue exists but is not substantial.
Reasons we care/ Why federal courts warned about taking state law claims
1. Power to remove in every state claim
- In cases where both federal and state court can try, federal court unless both parties want state court
- Risks taking power from states
Substantiality is from a federal perspective. It is both forward and backward looking.
14
Joinder of Claims (making claims)
-
Rule 18 (supp. p. 52): Permissive Joinder of Claims
- Can join as many claims against another party
- Don’t need to be from the same transaction, but you do need both personal and subject matter jdxn
- JOINDER OF CLAIMS, NOT PARTIES → only deals with parties
- Permits any party to assert any number of claims against any other party → must satisfy jdxnal and venue requirements
- Claims by Π and ∆ must arise from the same subject matter or transaction
- JOIN EVERYONE YOU HAVE BEEF WITH
Rule 42 (supp p. 104): Consolidation; separate trials
Res judicata: burden on π to bring all related claims
Rule 13 (p.43): Counterclaims and crossclaims
-
Types of Claims
1.
2.
Claim: filed by π. Initiates law suit.
Counterclaim: responsive claim filed by party who has a claim asserted against him. Usually by ∆. Filed by Π when responding to ∆
counterclaim
a. Permissive: everything that isn’t compulsory
b. Compulsory: arise under the same transaction, must be stated as a counterclaim, doesn’t require adding another party
3. Cross Claims: claims against a co-party
- ∆1 v. ∆2; π1 v. π2
Third party claim: claim against a third party
Rule 18: Permissive Joinder of Claims
(a) In general: A party asserting claim, counterclaim, crossclaim or third-party claim may join, as independent or alternative claims, as
many claims as it has against an opposing party.
(b) Joinder of Contingent Claims: A party may join two claims even though one of them is contingent on the disposition of the other;
but the court may grant relief only in accordance with the parties’ relative substantive rights. In particular, a plaintiff may state a claim
for money and a claim to set aside a conveyance that is fraudulent as to that plaintiff, without first obtaining a judgment for the
money.
Rule 42: Consolidation; Separate Trials
1.
2.
Consolidation: If actions before the court involve a common question of law or fact, the court may:
1. Join for hearing or trial any or all matters at issue in the actions
2. Consolidate the actions; or
3. Issue any other orders to avoid unnecessary cost or delay
Separate Trials: For convenience, to avoid prejudice, or to expedite and economize, a court may order a separate trial of one or more
separate issues, claims, crossclaims, counterclaims, or third-party claims. When ordering a separate trial, the court must preserve any
federal right to a jury trial.
Rule 13(a-c): Counterclaim (adding claims after the lawsuit begins)
-
13(a): Compulsory counterclaim if (1) exists at the time of service; (2) arises out of the same transaction or occurrence that is the
subject matter of the opposing; and (3) does not require a third party over whom the court cannot acquire jdxn
- 13(b): permits a party to make permissive counterclaims
- 13(c): permits a party to claim any kind of relief she wants in a counterclaim
***If a party fails to file a compulsory counterclaim, that party is barred from raising the claim in a separate lawsuit.
**Once you bring a claim against someone, they have a compulsory counterclaim obligation.
15
M.K. v. Tenet (2002)
p. 662
Facts: Action filed by employees against the CIA for obstructing access to counsel. Π state ∆ violated Private Act of 1974, §552 and various
constitutional rights. In amendment, Π added new Πs and new claims. ∆ moved to sever claims of initial Π under Rule 21 and deny joinder
of new Πs.
Holding: Under restricted joinder provision of Rule 18, such joinder of new claims is possible.
Problem: possible jury confusion
- Rule 18: unrestricted number of claims joined
- Rule 42(b): separate claims into different jury trials
- Rules of preclusion propel π to bring them together
United States v. Heyward – Robinson Co. (1970)
p. 665
Facts: D’Agostino sued Heyward for not paying him for the Navy job under the Mill Act. Heyward alleges counterclaims about π about both
jobs. Π wins in District Court. ∆ appeals saying that the District Court did not have jdxn over the Selma job, even though he was the one
that brought the job into the argument)
Issue: Was the claim against Stelma a compulsory counterclaim?
- Link between counterclaims: If compulsory, there is jdxn. If permissive, no jdxn.
- No jdxn over the Stelma claim unless it is sufficiently connected to the Navy job.
- There is federal jdxn over the Navy job because it falls under the Mill Act (federal contract). Congress gave Feds jdxn over that
contract.
Must have a logical relationship between counterclaim(s) and the original claim to be a compulsory counterclaim.
- Logical relationship: factual, legal, temporal, logical, evidentiary overlap,
Logical Relationship Test (in this case) – How did parties conceptualize the contracts?
1. Single insurance policy for both – treated the two jobs the same.
2. Progress payments made for both at the same time – would have been impossible for Heyward to have fully litigated the claims
against it on the Navy job without including the other job.
3. Same parties for same work
4. Breach of contract on one of the jobs = breach of contract on the other
Majority: if you have a counterclaim, it must be compulsory – arise from the same transaction/occurrence of the original claim
- Judge Friendly concurrence: agrees that there is jdxn but thinks the majority stretches the logical relationship too far. Counterclaim
does not have to be compulsory for the court to have jdxn. Worried about the incentives for the next litigant
Reinert: err on the side of over inclusion on “grey areas.”
- If you are unsure if the counterclaim arises from the same transaction/occurrence add it in anyway and the court can only refuse it.
- If you wait a year or two and then come back to the court they could say no because it is compulsory and due to res judicata they
cannot hear it.
HYPO: Anne v. WR Grace in NH Federal Court.
- Anne sues WR Grace for polluting her water and causing her son to get Leukemia. She holds a press conference. Counterclaim for
defamation and malicious prosecution.
- If WR Grace did not file an answer then they lose the obligation to file a counterclaim and cannot bring that claim in another court.
- If they did answer and file a counterclaim: did it arise from same occurrence(s)? [logical relationship test]
- Factual overlap? Same witnesses? Temporally different?
- Dilemma: would WR rather file a claim in MA rather than a counterclaim in NH?
Rule 13(g): Crossclaim Against a Co-party
- A pleading may state as a crossclaim any claim by one party against a co-party if the claim arises out of the same transaction or
occurrence that is the subject matter of the original actions or of a counterclaim
Hypo: A sues B, B counters A and crossclaims C ; C now has a counterclaim obligation under 13(a) against B. B can crossclaim C about the
same occurrence (has to) AND about any other issue with C.
- You do not have to raise a crossclaim, you can save it BUT if someone cross claims against you you must bring all claims you have
against them from the same occurrence.
Reasons We Care about Compulsory and Permissive Claims
1. Don’t want to lose the ability to litigate the claim
2. Want some control over when and where trial is brought
16
Transaction or Occurrences Effect
B & C v. A (adding
D)
A v. D
B v. C
A v. B&C
A v. B
- Rule 18: all claims
- Counterclaims must be brought if compulsory
A v. BC
- Rule 18: bring all claims
- Crossclaims: must be related in transactions or occurrences of claim or counterclaim. If not brought, forfeited.
- Once a crossclaim, counterclaim rules set in. File a counterclaim that adds π as an additional party.
AD v. BC
- A can file a crossclaim against D as long as it arises under T&O of the counterclaim from BC.
- Not a cross complaint on the original claim (A v. BC)
A files crossclaim on A&D
- D counter against A; counter BC for counters they asserted against A/D
- Assert any persmissive claims
Can always assert a counterclaim once a claim is brought against you.
- Obligation → Compulsory
- Opportunity → Permissive
17
LASA Per L’Industria Del Marmo Societa Per Azioni v. Alexander
p. 674
Facts: Southern Builders retained by city to build City Hall as prinicipal subcontractor. Subcontracting with Alexander Marble to
supply/install marble and with LASA to install marble. LASA alleged they fully performed contract with Alexander and owed them $.
PH:
-
LASA sued Alexander and everyone else for the balance due.
Alexander counterclaimed alleging breach of contract and that they had paid them and paid them too much. Sought restitution of
the amount it overpaid LASA and damages from breach of contract.
- Southern Builders counterclaim alleged LASA failed to ship marble as agreed by Alexander and sought damages for breach of
contract.
- Alexander cross claimed against So. Builders, Continental Casualty and the city for money alleged to be due on the contract.
§ They cross claimed Alexander for breach of contract.
- Alexander filed 3rd party complaints against the architects.
- Alexander sued S. Builders for damages resulting from wrongful termination of contract and injury to reputation.
- District Court dismissed the 2 crossclaims and 3rd party complaint. Court of Appeals reversed.
Issue: Were claims valid crossclaims arising under transactions?
Holding: There is a “logical relationship” between the claims and the “transaction or occurrence” that is the subject matter of the complaint
and the two pending counterclaims.
- Rules 13 and 14 are intended to avoid circuity of action and dispose of the entirety of subject matter from one set of facts in one
action and may do so when all claims arise from the same transaction as the initial claim.
Reasoning: They all relate to the same project and to problems arising out of the marble used in building City Hall. The principle issue is
who is responsible for the marble problems? Some of the same evidence will be required and that all issues can be resolved in one action as
complex as it is. If you think broadly, you can see how these are related.
Dissent: Only the claims that arise out of the transaction that is the subject matter of the original action (balance due on a contract) are the
counterclaims against LASA by Alexander and So. Bulders.
Must be a logical relationship between the claims and the transaction or occurrence that is the subject matter of the complaint to be a
permissive crossclaim.
Notes:
-
Any time you have more than one party or claim, you must look at the Rules of Joinder.
Just because joinder is appropriate, it doesn’t mean that there is subject matter jurisdiction.
18
Joinder of Parties
-
Rule 19 (supp p53): Required Joinder of Parties
Rule 20(supp. p. 54): Permissive Joinder of Parties
-
ALL ABOUT FEDERAL COURT
Rule 19: Required Joinder of Parties
1.
2.
Persons Required to be Joined if Feasible
1) Required Party: A person who is subject to service of process and whose joinder will not deprive the court of subject
matter jurisdiction must be joined if
a. In that person’s absence, the curt cannot accord complete relief among existing parties; or
b. That person claims an interest relating to the subject of the action and is so situated that disposing of the action in
the person’s absence may:
i.
As a practical matter impair or impede the person’s ability to protect the interest; or
ii.
Leave an existing party subject to a substantial risk of incurring double, multiple or otherwise inconsistent
obligations because of the interest
2) Joinder by Court Order: If a person has not been joined as required, the court must order that the person be made a
party. A person who refuses to join as a π may be made either a ∆ or, in a proper case, an involuntary π.
3) Venue: If a joined party objects to a venue and the joinder would make venue improper, the court must dismiss that party.
When Joinder is not Feasible: If a person who is required to be joined if feasible cannot be joined, the court must determine
whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed. The factors
for the court to consider include:
1) The extent to which a judgment rendered in the person’s absence might prejudice that person or the existing prejudices
2) The extent to which any prejudice could be lessened or avoided by:
a. Protective provisions in the judgment; or
b. Shaping the relief; or
c. Other measures
3) Whether a judgment rendered in the person’s absence would be adequate; and
4) Whether the π would have an adequate remedy if the action were dismissed for non-joinder
Three Main Questions for Rule 19:
1. Rule 19(a): Is the person a required (necessary) party?
- If yes → joinder of absent party is necessary.
- If no → joinder is not required.
- Can existing parties get complete relief if the absent party is not joined?
- Is there a practical impairment of the absent party’s interest?
- Is there prejudice to an existing party by way of double or multiple liabilities if absent party is not joined?
2. Rule 19(b): Is it feasible to join this person?
- If yes → joinder of absent party is feasible.
- Is absent party subject to personal jurisdiction and service of process?
§ 100 mile bulge rule: serving a summons establishes personal jdxn over ∆ who is joined under Rule 19 and
is served within 100 miles of the courthouse
- Can subject matter jdxn be established over the absent party?
§ Rule 19(a)(1) can disrupt diversity jdxn
- Proper venue?
§ If joined party objects to venue and venue is proper – party must be dismissed.
- If joinder is necessary and feasible → PARTY MUST BE JOINED
- If joinder is necessary but not feasible → go to step 3
3. Rule 19(b): Is the party indispensable? Can litigation proceed without the absent party?
- Extent to which judgment rendered in the absent party’s absence might prejudice that person or the existing parties? If
case proceeds: (1) π perspective (2) ∆ perspective (3) absent party perspective
- Molding case to avoid harm → withholding judgment, shaping relief, other joinder rules
- Extent to which prejudice may be lessened or avoided
- Whether judgment rendered in absent party’s absence would be adequate.
- Whether π would have adequate remedy if action were dismissed.
- If we can mold the case to avoid the harm → proceed without the absent party.
- If we cannot proceed with the absent party → party is indispensable and case must be dismissed.
19
Rule 19(a)(1): interference with litigant autonomy
-
19(a)(1)(a): if person isn’t there, full relief may not be granted.
- Usually about injunctive relief, almost never about $
- A can sue B to stop but C is one making him do it.
- About prejudice to existing parties.
19(a)(1)(b)(i): prejudice to absent party
- if exclude absent party, ≠ protect interest
19(a)(1)(b)(ii): might leave existing party at risk of incurring inconsistent obligations
19(a): LIKELIHOOD; 19(b): TEXTURED, FLEXIBLE ANALYSIS (Provident)
-
Rule 19 v. Rule 24:
- Rule 24 Intervention: where a party seeks to enter itself into a lawsuit. Absent party is trying to find a way into the lawsuit.
-
Rule 19: issue typically brought by ∆ claiming that π has failed to include a necessary or indispensable party
- ∆ files a 12(b)(7) motion to dismiss for failure to join an indispensable party
Rule 20(a): Permissive Joinder of Parties
1.
2.
Notes:
-
Plaintiffs: Persons who may join in one action as plaintiffs if:
a. They assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same transaction,
occurrence or series of transactions or occurrences; and
b. Any question of law or fact common to all πs will arise in the action
Defendants: Persons who may join in one action as defendants if
a. Any right to relief is asserted against them jointly, severally or in the alternative with respect to or arising out of the same
transaction, occurrence or series of transactions or occurrences and;
b. Any question of law or fact common to all ∆s will arise in the action
Rule 20(a)(1) refers to voluntary joinder of π
Rule 20(a)(2) refers to involuntary joinder of ∆s [since π is forcing them into suit]
Various π and ∆ need not have joint interest in the matter in dispute. They may sue or be sued together even if their interests are
several or they are being sued in the alternative.
Slightly broader in scope than the same-transaction test used in Rule 13(a) & (g) since Rule 20 permits joinder of parties when the
separate claims of or against those parties arise out of the same series of transactions or occurrences.
Π chooses who is going to be a party in the suit (permissive joinder)
∆ may be sued jointly or separately → Sue together so you can ensure that you recover
usually to add ∆ to case
Rule 14:
Rule 19:
Rule 20:
Rule 13(h)/20:
Rule 24:
20
RYDER V. JEFFERSON HOTEL CO.
p. 684
OLD RULE – no joinder
Facts: Πs staying at ∆ hotel. ∆ servant and agent woke Πs and insulted them. Π left hotel at midnight to seek other lodging.
Alleged damage including injured reputations, credit and business; husband suffered from a loss of custom and deprived of gains
and profits. Damages summed $10k.
PH: ∆ demurred because several causes of action had been improperly united, the several causes of action united do not effect
all parties to the action. Court overruled demurrer and Ds appealed.
Issue: Could the complaint containing two causes of action be joined in the same complaint?
Holding: Two parties may not join two causes of action unless the causes of action that produce the injury are related
Reasoning: Husbands complaint is a personal tort and wife’s is a tortious breach of duty. The rights invaded and injuries
sustained are several and πs cannot maintain a joint action and recover joint damages. There must be a relationship with the πs
and the tort must interfere with it. The wife’s cause of action did not affect the husband and vice versa.
Dissent: The act was a denial of the joint relationship that caused the trouble. Similar to a relationship to a co-partnership.
Injury to copartners is a joint injury. It affected their relationship as husband and wife.
M.K. V. TENET
Facts: see above
PH: Court denies ∆ motion yo sever.
see above
Reasoning: Rule 20(a) “transactional test”
- ∆ acts and omissions pertaining to π obstruction of counsel claims are “logically related” as “a series of transactions and
occurrences” that establish an overall pattern of policies and practices.
- Each π has satisfied the first prong of 20(a) → ∆ actions damaged them and they request relief
- Πs meet second prong bc each of their claims are related by a common question of law or fact → Privacy Act violations
TANBRO V. BEAUNIT
p. 689
Facts: three lawsuits arising out of a business dispute among the seller, purchaser, and processor of goods. Buyer wanted to consolidate,
seller and processor opposed.
- Seller/Processor argument: each involved a separate and independent contract. Not the same transaction or occurrence or common
question of law or fact to sustain joinder/consolidation.
- Buyer: goods and defect are identical to all the cases with a common question of who is responsible
Holding: Allowed consolidation.
BANK OF CALIFORNIA NAT. ASS’N V. SUPERIOR COURT
p. 691
Facts: Individual died without a will. Bank of CA= executor. Will left money to a large amount of people. St. Luke’s hospital received most
of the estate. Only one beneficiary of the will (St. Lukes) was present. Π believes she is entitled to all the money. Can only get money from
St. Luke’s because the court can’t force the other beneficiaries into court. Taking money from hospital doesn’t change anything for other
beneficiaries.
PH: Niece brought an action to enforce an alleged contract by which deceased agreed to leave her the entire estate. ∆ were the executor and
all other beneficiaries. At trial, petitioners motioned to bring in other ∆ on the grounds that they were “necessary and indispensable parties”
to the action and that the court could not proceed without them. Motion was denied. Petitioners then applied for a write of prohibition to
restrain the trial until the other parties were brought it. Write denied.
Issue: Are the absent ∆ are “indispensable parties”?
Holding: A property is required to join all “necessary and indispensable” parties. A party is indispensable only if the party’s rights will
definitely be disposed of in the case at issue. It is not enough for the party to only have an interest.
Reasoning: Difference between “indispensable” and “necessary” parties. ∆ here are necessary because the issue affects their property
interests but are not indispensable. Π may litigate her claim against the appearing Ds alone and obtain in a decree which binds them alone.
It would cause delay in the trial and detriment to the current parties. If the party’s interest can be separated and jurisdiction cannot be obtained
over the party, the party is not indispensable. The rights of the beneficiaries are not being determined; only the validity of the contract
between Smedley and Boyd. Because there is no binding adjudication on the beneficiaries, they are not “necessary and indispensable parties.”
21
PROVIDENT TRADESMENS BANK & TRUST CO. V. PATTERSON
p. 696
Facts: Traffic accident. Dutcher gave Cioni the keys to his car. Lynch and Harris were passengers. Car crossed median and collided with
truck driven by Smith. Everyone died except for Harris who was severely injured.
PH: 3 tort actions brought. Admin of Lynch’s estate sued the driver’s estate. Smiths admin and Harris each sued Cioni (driver), owner of the
car and Lynch estate. Lynch estate brought declaratory action that the driver’s use of the car was “permissible.” Only ∆s were the insurance
company and the driver’s estate. The other two πs were joined as πs. District Court directed verdicts for Harris. Insurance co. appealed. Court
of Appeals reversed on 2 grounds: the owner was an indispensable party and since the owner could not be joined as a defendant without
destroying diversity jurisdiction the action had to be dismissed. Judgment vacated and remanded.
Holding: Clarification of Rule 19. Car owner’s interest in suit against his insurance company makes him indispensable to suit under Rule 19.
Reasoning: Fell under 19(a) but since he was from the same state he could not be joined without depriving federal jurisdiction. 19(b) states
4 factors and according to the factors the owner was necessary but not indispensable. Suit could proceed with former, not latter. District Ct.
misinterpreted Shields v. Barrow to incorrectly assumed that a case must be dismissed whenever the interest of the absent party were affected.
When absent party’s interests were affected, must determine 4 factors to determine if the case should proceed without the party or be
dismissed.
Notes:
-
Strategically using Rule 19 to get out of court
Not feasible to join Dutcher because it would ruin diversity
Dismissal is harsh remedy
Rule 19(b) suggests 4 “interests” to examine to determine whether in equity and good conscience the court should proceed without a party
whose absence from litigation is compelled
1. Π has an interest in having a forum
2. ∆ may wish to avoid multiple litigation or inconsistent relief or sole responsibility for availability he shares with another
3. There is interest of the outsider whom it would have been desirable to join
4. Interests of the courts and the public in complete, consistent and efficient settlement of controversies
22
Impleader
- Rule 14: Third Party Practice
- Resolve the rights of all parties in one proceeding
- Principle: Can bring someone in if they contributed to actions or indemnified (agreed to defend) by contract
Rule 14: Third Party Practice (p.44)
1. When a defending Party may bring in a third party
1. Timing of the Summons and Complaint: A defending party may, as third-party plaintiff, serve a summons
and complaint on a nonparty who is or may be liable to it for all or part of the claim against it. But the 3PΠ
must, by motion, obtain the court’s leave if it files the third-party complaint more than 14 days after serving
its original answer.
2. Third Party Defendant’s Claims and Defenses: Person served with the summons and third-party
complaint – 3P∆
a. Must assert any defense against 3PΠ’s claim under Rule 12.
b. Must assert any counterclaim against the 3PΠ under Rule 13(a), and may assert any counterclaims
against the 3PΠ under Rule 13(b) or any crossclaim against another 3P∆ under Rule 13(g)
c. May assert against the π any defense that the 3PΠ has to π claims
d. May also assert against the Π any claim arising out of the transaction or occurrence that is the subject
matter of the π claim against the 3PΠ
3. Π claims against 3P∆: Π may assert against the 3P∆ any claim arising out of the transaction or occurrence
that is the subject matter of the Π claim against the 3PΠ. The 3P∆ must then assert any defense under Rule
12 and any counterclaim under Rule 13(a), and may assert any counterclaim under Rule 13(b) or any crossclaim
under Rule 13(g).
4. Motion to strike, sever, or try separately: any party may move to strike 3P claim, to sever it, or to try it
separately
5. 3P∆’s Claim Against a Nonparty: 3P∆ may proceed under this rule against a nonparty who is or may be
liable to the 3P∆ for all or part of any claim against it
2. When a Π may bring in a 3rd party: When a claim is asserted against a Π, Π may bring in a third party if this rule
would allow a ∆ to do so
Problem: limited circumstances in which you can bring a 3P in
- Efficiency: have it all consistent and with one jury
- Reduce risk of inconsistent judgment
Once 3P∆ is in:
1. 3P∆ can bring claim against original ∆ – compulsory counterclaim obligation and permissive counterclaim
opportunity
2. 3P∆ can involve Π if arises under transactions and occurrences of original claim of π v. ∆
23
JEUB V. B/G FOODS
p. 706
Facts: Π at ∆ restaurant and were served ham that was contaminated, unwholesome, and harmful to their health. The ham was
a product of Swift Co.
PH: On answer, ∆ attempted to bring in Swift as a 3rd party. Motion to vacate by 3rd party based on π refusing to amend their
complaints to state any cause of action against Swift. Motion to vacate is denied.
Holding: The fact that an independent action for money recovery could not be brought at this time does not militate against
B/G Foods’ right to invoke a procedure which will determine rights of the parties concurrently with that of the basic proceeding,
and if and when any loss has been sustained as to which Swift & Co. is liable over, the laws of this state in regard thereto may
be made effective.
Reasoning: Rule 14 is to allow determination in one proceeding to avoid circuity of proceeding. To require the same jury to
hear the controversy between ∆ and 3rd party will not jeopardize the rest of the trial. One jury saves time and expense and just
makes sense.
- The purpose of Rule 14 of the Federal Rules of Civil Procedure is to resolve rights of all the parties in one proceeding.
- If Rule 14 could not be used because of the Minnesota law requiring proof of loss before an action seeking
indemnification, the parties would have to wait until the proceeding against ∆ is over and then institute an independent
action. This is exactly the kind of situation Rule 14 is intended to prevent.
- One jury can be empanelled to resolve the entire case. In order to prevent prejudice to either party, the action for
indemnity against Swift can be stayed pending payment of a judgment by D.
TOO, INC. V. KOHL’S DEPT. STORES, INC.
p. 708
Facts: Two employees hired to start up a girls sleep-wear division. Employee 1 created design π says infringes their copyrights
and trademarks. Employee 2 proceeded to sell these infringements knowingly.
PH: Alleging copyright and trademark infringement and unfair competition. ∆ pursuant to Rule 14 to allow 3rd party complaintseeking
contributions and indemnification from two former employees.
Holding: Given the interest in judicial economy and the other factors, the untimeliness should not prevent the filing of the 3rd
party complaint for contributions. Their complaint for indemnification must be denied because it without merit.
Factors to be considered in determining whether to grant leave to implead:
1. Whether the delay was deliberate
2. Whether it would unduly delay or complicate the trial
3. Whether it would prejudice the 3rd party
4. Whether complaint states a claim upon which relief can be granted
24
Intervention
- Rule 24: Intervention of Right
- Cannot be barred
- Allows stranger of a lawsuit to interject himself
- May not have been brought by either party bc they didn’t want them there
Rule 24: Intervention (p. 61)
(a) Intervention of Right: on timely motion, the court must permit anyone to intervene who:
1. Is given an unconditional right to intervene by a federal statute; or
2. Claims an interest relating to the property or transaction that is the subject of the action, and is so situated
that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its
interest, unless existing parties adequately represent that interest.
(b) Permissive Intervention:
1. In General: on timely motion, the court may permit anyone to intervene who
a. Is given a conditional right to intervene by federal statute; or
b. Has a claim or defense that shares with the main action a common question of law or fact
For Intervention of Right
1. Interest in Subject Matter
2. Impeded interest
3. Existing parties not adequately ___ interest
4. Timely manner
SMUCK V. HOBSON
Facts: Desegregation in D.C. public schools
p. 737
PH: Court found πs were being denied their constitutional rights to equal education because they were racially and economically
discriminated against by ∆s. Mr. Hansen and Smuck filed motions to appeal and motions to intervene were made by parents.
Court of Appeals held in abeyance and remanded. DC granted motions of intervention
1. Smuck: member of the school board who dissented.
- Had a fair opportunity with the school board.
- The board had an interest, voted otherwise and he chose not to appeal.
2. Hansen: superintendent who resigned bc of the decree
- Lost status as superintendent (and interest)
- Outcome would not affect him
3. Parents: difficult because of Rule 19 and 24 interests – limited right to intervene
a. Interest in the education of their children
b. Interest already heard bc they elected the school board
Issue: Should the trial court have granted a motion to intervene?
In order to intervene under Rule 24(a) a party must have interest in the case, need not be economic but must affect some
recognized concern. If a party has an interest, they may intervene if disposition of the case would impair or impede the party’s
ability to protect its interest, and whether the original parties adequately protect the prospective intervenor’s interests.
Notes:
- Intervention is limited to making arguments based on that interest
- More than Rule 24: court is bending over backwards to allow the parents into the suit bc of nature of it (desegregation)
- Reading the rule broadly but limiting the scope
25
Subject Matter Jurisdiction II: in what venue (court) can we hold someone accountable (federal or state)?
-
Questions of supplemental jdxn arise when Π sues ∆ and has at least one claim that has federal jdxn
- other claims have no basis for federal jdxn
Supplemental jdxn: claim for federal jdxn but also claims that are only state
- Allows all to be tried in federal courtbc of connection to federal law
§1367: Supplemental Jurisdiction (p. 207)
Supplemental Jdxn= Pendent Jdxn + Ancillary Jdxn
- Pendent Jdxn: everything Π can join under supplemental jurisdiction
- Pendent claim: when π has one claim and wants to add another
§ Pendent claim: A v. B; all claims against B together
§ Pendent party: A v. B&C; adding a party
- Ancillary Claim: when π wants to add a claim after the first claim has been filed
-
§1367: Supplemental Jurisdiction JUST READ THE STATUTE, NO RULES
Test for Supplemental Jurisdiction
1.
2.
3.
Is there an independent basis for supplemental jurisdiction? → §1367(a)
Is there a common nucleus of fact? → §1367(a)
Is the sole basis §1332 diversity? → §1367(b)
Discretion: to be decided → §1367(c)
4.
UNITED MINE WORKERS OF AMERICA V. GIBBS
p. 319
Facts: TN Consolidated Coal Co. laid off 100 workers of UMW”s Local 5881 when it closed its mines. Grundy hired respondent as mine
superintendent to open a new mine through use of members of the Southern Labor Union. Armed members of Local 5881 forcibly
prevented the opening of the mine. They believed Consolidated had promised them jobs at the new mine and if anyone worked there it
should be them. Respondent lost his job and soon began losing other trucking contracts and mine leases nearby.
PH: Respondent was awarded damages for alleged violations of statute 303. He claimed loss of job and other contracts to be result of a
concerted union plan against him. He only sought recovery from the int’l union. Jurisdiction as based on allegations of secondary boycotts
under Statute 303. The jury’s verdict was the UMW had violated the statute and state laws. Trial court set aside damages for hauling
contract and held that the union pressure on Grundy to discharge respondent would constitute only a primary dispute with Gundy and
hence was not cognizable under 303. Appeals Court affirmed. SCOTUS reversed.
Issue: Did the District Court properly entertain jurisdiction of the claim based on TN law?
Reasoning:
- Hurn v. Oursler - state law claims are appropriate for federal court determination if they form a separate but parallel ground for
relief also sought in a substantial claim based on federal law.
- Federal claim must have substance sufficient to confer subject matter jurisdiction on the court.
- Worried incentive for π is to litigate claims together – will deprive fed. Ct. of chance to rule on a federal claim.
Asserts two claims:
1. Unlawful boycott undert Statute 303 (federal law)
- “anchor” claim arising under federal law
2. Same under TN common law (state law)
- Does not arise under federal law. Does not have diversity.
§ Union treated as an unincorporated entity →citizenship= each of its member (def have TN)
- Falls under the same set of facts as first claim → “common nucleus of operative fact”
§ Holding: Falls under §1331 and the state law claim can be brought in
Takeaways
1. Federal court may assert jurisdiction over a state claim when it arises from a common nucleus of operative fact.
2. If there is a CNOF, court has the discretion to not invoke supplemental jdxn.
26
ALDINGER V. HOWARD
p. 319
PH: Π brought civil rights action under federal civil rights statute against several state officials & state law claim against Spokane County
- Civil rights action fell under 1331
Holding: Passed the Gibbs test but no supplemental jdxn. No jurisdiction because Congress specifically excluded counties from being
liable under federal civil rights law.
- Either split claims or bring both to state court.
- ** pre §1367: no longer good law
OWEN V. KROGER
p. 319
Facts: Wrongful death by electrocution.
PH: Diversity jdxn (Kroger= Iowa; OPPD= Nebraska). Kroger amended and added claim against Owen. When OOPD filed 3rd party
complaint, it said Owen was from NE but its PPoB is actually in IA.
Holding: Both claims fall under “common nucleus of operative facts”, but no diversity. No jdxn bc if allowed, would be circumventing
diversity jdxn. No federal issue without diversity.
FINLEY V. UNITED STATES
p. 327
Facts: filed two claims – against San Diego (state law) and FAA (federal law)
- Had common nucleus of operative facts but the statute doesn’t state that this claim could be brought; split claims
- “a grant of jurisdiction over claims involving particular parties does not itself confer jurisdiction over additional claims by or
against different parties.”
- §1367 overruled Finley
1. doesn’t matter whether pendent party or pendent claim doesn’t fall under (b) because jurisdiction was not solely founded
on 1332 but rather 1331 federal question. 1367 would say that the court does have power. supplemental jurisdiction
EXXON MOBIL CORP V. ALLAPATTAH SERVICES, INC.
p. 330
Issue: Does a diversity case in which the claims of some plaintiffs satisfy the amount-in-controversy requirement, but the claims of other
plaintiffs don’t, present a civil action of which the district courts have original jurisdiction?
Holding: When the claims arise out of the same controversy/case, as long as one Π’s claims satisfy the amount in controversy requirement,
the court may exercise jurisdiction over additional Πs that fall short of the requirement.
Notes:
- distinguishes between insufficient amount in controversy and no diversity of citizenship
- Contamination theory: not a civil case if no diversity. Amount in controversy does not contaminate
- Lets one Π ride another’s coattails (for amount in controversy) in two scenarios
1. Πs join permissively under Rule 20
2. Πs are members of a π calss action under Rule 23
- “When the well-pleaded complaint contains at least one claim that satisfies the amount in controversy requirement, and there are
no other relevant jurisdictional defects, the district court… has original jurisdiction over that claim.”
- Supplemental jdxn overcomes insufficient amount in controversy when there are multiple Π, ≠ multiple ∆
Interpretation of §1367(a): “civil action in which courts have original jurisdiction”
- §1331 case: move to CNOF bc at least 1 claim
- §1332 case: founded on diversity. Is there complete diversity? Does at least one claim satisfy amount in controversy?
**see graphic in notes**
27
Removal: §1441
-
-
Balance Π interest and systems interest in protecting federal rights
Must remove entire case to court. If federal court realizes they do not have jdxn over some claims, send entire case
back to state court.
Limitations
1. Only ∆ may remove a case
2. All ∆s must agree to remove
3. ∆ does not have the right to remove on the basis of diversity, if citizen of forum state.
§ Not worried about bias
4. If it makes amount less in controversy in amended complained
If you don’t ask, you waive removal.
SHAMROCK OIL & GAS CORP. V. SHEETS
p. 346
Cannot base a removal on anticipation of a counterclaim
- Basis for removal has to be in original claim ≠ interposed claims
- Aligns with Mottley
Venue: geographic location of the proper court
-
§1390, §1391
§1404, §1406, §1407
§1631
venue doesn’t really have clear rules → fact intensive
Primarily statutory → constitution silent
Extreme strategic advantage to know venue
§1391: Venue generally
(a): Venue rules: same whether diversity or federal question
(b)(1): at least 1 ∆ must be present in district if all in the same state
(b)(2): substantial part of events or omissions occurred
(b)(3): last resort – ∆ personal jdxn
(c)(1): natural person’s residence = judicial district they are domiciled in
(c)(2): ∆: entity that can sue or be sued that resides in any judicial district the ∆ is subject to court’s personal jurisdiction. Π
resides in judicial district of PPoB (incorporated or not)
(c)(3): ∆ that is not a resident in United States can be sued in any judicial district
(d): Corporation in states with multidistrict – sufficient contacts for personal jurisdiction
§1404: Change of Venue
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or
division where it might have been brought or to any district or division to which all of the parties have consented.
Forum Non Conveniens
-
Common law doctrine in federal courts → state law may apply differently
Allows a court to dismiss a case that was brought in the wrong forum.
28
Livingston v. Jefferson
- L: property in Louisiana that was claimed at US property. L waited until Jefferson wasn’t president and sued him in VA for
monetary damages. Dismissed because local to Louisiana. Cannot sue Jefferson in LA bc no jurisdiction.
- Local action doctrine
REASOR HILL CORP. V. HARRISON
p. 363
Not in notes???
Procedural History: Planter sued HM Barton. Barton issued a cross-complaint. Π filed a motion to dismiss the cross-complaint on the
grounds that it pertained to real property located in Missouri and consequently could not be sustained in Arkansas. The trial court
overruled the motion to dismiss. Π applied for a writ of prohibition with the Supreme Court of Arkansas.
Facts: Planters Flying Service sued HM Barton, Defendant, for failure to pay Planters for spraying insecticide on Defendant’s crops
located in Missouri. Barton stated that Planters Flying Service damaged his crops by using adulterated insecticide. Cross-complaint: sought
damages from petitioner for negligence in putting a chemical unsuited for spraying cotton on the market.
Issue: Can Arkansas courts entertain a suit for injuries to real property in another state?
Holding: A court may entertain a suit for injuries to real property in another state so the Π is not denied a remedy bc ∆ is a resident of
another county.
Reasoning: Π would not have been able to pursue a remedy before ∆ left jurisdiction (was in a plane). States have law libraries that allow
them to see the laws of other states. Argument that state sovereignty is different than national sovereignty. Does not want residents of
Arkansas to not be held accountable for damages against residents of other states.
Dissent: States are not mere local administrative units; they are sovereign. Having a good law library doesn’t mean they should determine
other state laws.
BATES V. C&S ADJUSTERS INC.
p. 368
Facts: π incurred debt in PA; creditor in PA; collector= PA. CS mailed to PA address, forwarded to π new address in NY. Π wanted to sue
in NY.
Procedural History: Bates commenced action in Western District of NY under the Fair Debt Collection Practices Act. C&S asserted two
affirmative defenses and counterclaimed for costs. ∆ alleged that action was instituted in bad faith and for the purposes of harassment.
C&S filed motion to dismiss for improper venue. District Court granted motion to dismiss. US Court of Appeals reversed and remanded.
Issue: Was venue proper under §1391(b)(2)?
Holding: Under §1391(b)(2), venue is proper wherever a substantial part of the events occurred.
Reasoning: Not proper under §1391(b)(1) bc ∆≠ reside there. Receipt of collection notice is a substantial part of the events giving rise to a
claim under the Fair Debt Collection Practices Act and, since it was located in Western District of NY, suit in that venue is proper.
HOFFMAN V. BLASKI
p. 373
Facts: Blaski, and other residents of Illinois, brought patent infringement action in US District Court for the Northern District of Texas
against Howell and TX corporation controlled by him. Allege that ∆ are residents of and PPoB in Dallas in Northern District of TX, where
they are infringing upon respondent’s patents.
Procedural History: After being served and filing answer, ∆ moved to transfer to US District Court for Northern District of Illinois under
§1404(a). Respondents objected bc ∆ could not be served in Illinois and thus the court lacked venue and ability to command jdxn over ∆,
so improper venue. District Court ruled “the motion should be granted for the convenience of the parties and witnesses in the interest of
justice” and transferred to Illinois. Respondents moved in the 5th Circuit for leave to file a petition for a writ of mamandus directing
vacation of the order. Motion denied – “the purposes for which §1404(a) was enacted would be unduly circumscribed if a transfer could
not be made “in the interest of justice” to a district where the ∆ not only waive venue but to which they seek to transfer” District Court
assigned to Judge Hoffman’s calendar. Respondents moved for an order remanding the action on the ground that Texas District Court did
not have power to make the transfer order and the Illinois DC did not have jdxn. Denied. Respondents filed writ of mandamus in 7th
Circuit directing Hoffman to reverse his order. Court held that rsepondents did not have a right to bring action in Illinois district and
granted the writ.
Issue: Is a district court, in which a civil action has been properly brought, empowered by §1404(a) to transfer the action, on the motion of
∆, to a district in which π did not have a right to bring it?
Holding: Under §1404(a), a case can only be transferred to a District Court where it may have been brought by π. Transfer is improper if
the π could not have originally served ∆ there.
29
Reasoning: It would be discriminatory if otherwise. Transfer cannot be based on the wish of ∆. It doesn’t make sense to allow the ∆ to
bring the case to a district the π wouldn’t have been able to serve ∆ in.
- §1404 is meant to balance the power of the π in choosing the initial forum
Dissent: Critiquing that the majority used a “plain meaning” justification, but they didn’t take into context legislative history and place
own interpretation on it.
Note Cases:
1. Van Dusen v. Barrack: law of transferor forum applies after transfer.
2. Ferens v. John Deere: PA statute of limitations expired. Brought Mississippi tort claim – denied.
3. Goldlawr, Inc. v. Heiman: §1406 authorizes transfer of an action when transferor court lacks jdxn
4. MF Global Holdings Ltd. Investment Litigation: were looking for centralization; can transfer
5. Lexecon Inc v Milberg Weiss Bershad Hynes & Lerach: duty on the panel on multidistrict litigation to remand a transferred action
to its original court for trial. Bars a transferee court from entertaining a motion under §1404(a) to order transfer of the case to
itself once pretrial proceedings have ended
6. Korean Airlines Disaster of September 1983: law of transferee court deserved attention but didn’t warrant stare decisis
GULF OIL CORP. V. GILBERT (1947)
p. 383
Delineated the factors to be considered in deciding a motion based on the principle of forum non conveniens.
Forum non conveniens: court may resist imposition upon its jurisdiction even when jurisdiction is authorized by letter of a general
venue statute
Prevents justice blended with harassment
Discretion to change place of trial on various grounds – convenience of witnesses, ends of justice, etc.
Public interest, private interest of litigant, relative ease of access to sources of proof
Two categories of factors
1. Private
Ease of access to proof (evidence)
Availability of compulsory process for attendance of unwilling witnesses
Cost of bringing witnesses (willing)
Easiness and fairness
2. Public
Efficiency for the court
Local interest
Congestion and crowded dockets
How do we weigh the balance?
Weigh if the balance is clearly in favor of granting the motion
Court can turn to forum non conveniens when statute is not enough
Do not have to turn to FNC to switch federal courts → do it when you want to get out of sovereign jurisdiction
§ Usually use FNC to transfer from federal to foreign court
Privilege the Π choice
30
PIPER AIRCRAFT CO. V. REYNO (1981)
p. 384
**Leading Case on FNC
Facts: Aircraft crashed in the Scottish Highlands, killing pilot and five passengers. Plane made in PA. Propeller made in Ohio. Π= estates
of 6 decedents. Administratix was a legal secretary in CA. Administratix had a better chance in CA than Scotland. CA had very narrow
FNC doctrine and didn’t think they would dismiss it. Scottish law does not recognize strict liability, permits wrongful death only when
brought by decedent’s relatives.
PH: CA probate court appointed Reyno administratix of estates. Filed separate wrongful death suits against Piper and Hartzell in Superior
Ct. of CA, claiming negligence and strict liability. ∆ removed to CA federal court and moved to transfer to PA.
Moved to transfer to PA bc there is a personal jdxn argument: better for π bc it was closer to Scotland. The evidence was also in
PA – propeller failed and it was manufactured there.
∆: PA is super convenient; Scotland is convenient
∆ wanted to get to Scotland → transfer to PA to remove to Scotland bc CA law is too narrow
Van Dusen = operative
PA court: must ask the question from the perspective of the CA court
Some doctrines must be decided through the lens of the court it is sitting in. Other through federal common law.
FNC doctrine does not travel
Application of Gilbert Test in Piper
What do we do if it would be an unfavorable change in law for Π?
§ Managerial: too much bc would have to find which law controls and interpret if it would be unfair or not
§ Too substantive and deep
SCOTUS: gave too much weight to this argument
§ District Court did not act unreasonably when said evidence had fewer problems in Scotland than in PA
§ Does not resolve the choice of law. Unclear but is not concerned with the Scottish forum.
If foreign jdxn is unsatisfactory, maybe weigh it, but then you have to look at Scottish law.
Arguments about convenience weigh less
Takeaways
1. General Principle: Inquiries into forum law about unjust/unfavorable law in foreign jdxn
2. Case Principle: convenience issue holds less weight for πs when accident occurred outside of the United States and all decedents are
foreign
3. Gilbert analysis: weight public
Holding: When all or most of the significant events, witnesses and evidence are centered in one location, then a court must dismiss a case
brought in another location under the doctrine of forum non conveniens unless the alternate forum provides the plaintiff with absolutely no
remedy. Whether the law of the forum chosen by the plaintiff is more favorable to the plaintiff should not be given weight.
Note Cases:
1. Nemariam v. Federal Democratic Republic of Ethiopia:
Rose out of war between Ethiopia and Eritrea
No alternative forum
Dismissed jdxn on FNC grounds
2. Sinochem v. Malaysia International
SCOTUS: grant FNC even if you don’t have subject matter or personal jdxn
implication: can ignore court orders bc there is no subject matter jdxn
31
Pleading: submitting claims and defenses to the court.
-
If you don’t plead a case sufficiently, you won’t reach the next step of litigation (discovery).
Federal Rules meant to limit pleading.
Need a complaint so the court and ∆ is informed of why the π is coming into court and for what.
Meant to provide notice, not detail facts. Cannot expect parties to know the fact at the pleading stage, that’s what discovery is for.
Rule 8, 12(b)
§ Form 11 (supplement p. 156): provided as example of Rule 8
Rule 8(a): Claims for Relief.
Pleading that states claim for relief must contain
1. Grounds for the court’s subject matter jurisdiction
2. Short and plan statement of claim showing entitlement to relief
3. Demand for relief sought
Twombly/Iqbal Test
1. Cause of action and what it requires → substantive law
2. Are the allegations conclusory or factual?
a. Conclusory: is it just a recitation of the elements of a cause of action?
b. Factual: Accept as true and make inferences in favor of Π
3. Is the factual claim plausible?
Rule 12(b): How to Present Defenses
Every defense to a claim for relief in any pleading must be asserted in responsive pleading if one is required. But a party may assert the
following defenses by motion:
1. Lack of subject matter jurisdiction
2. Lack of personal jurisdiction
3. Improper venue
4. Insufficient process
5. Insufficient service of process
6. Failure to state a claim upon which relief can be granted → Twombly, Iqbal
7. Failure to join a party under Rule 19
32
DIOGUARDI V. DURNING (1944)
p. 559
Facts: Π arranged for bottles to be shipped to Π to sell. Customs officer (∆) seized them bc Π did not pay duties. ∆ sold it at public auction.
Π claimed that there was a relationship between the highest bidder and the ∆ (sold for $10 less than he was going to pay for it). Complaint
was very unclear (ESL, no lawyer).
PH: Π sued ∆. District Court dismissed complaint on grounds that “it fails to state facts sufficient to constitute a cause of action.” Court of
Appeals reverses and remands.
Under Rule 8(a) there is no pleading requirement of stating “facts sufficient to constitute a cause of action” but only that there be a “short
and plain statement of the claim showing that the pleader is entitled to the relief”
-
Holding: Π did so in accordance with Rule 12(b). Complaint should not have been dismissed.
Application of liberal and expansive interpretation on Rule 8
- Justice Clark helped draft Rule 8
- Will accept pleadings with limited facts
- Will learn if claims are bogus during discovery
- If not, might be dismissing valid claims.
- Balance between efficiency and justice/fairness
- Unmeritorious cases will be weeded out in summary judgment/trial
At minimum, complaints must include some factual allegations in order to give some sense of what the claim is.
Ex: ∆ wrongfully injured me, please give me damages. → too vague
CONLEY V. GIBSON
p. 562
Rule 8 requires complaint to contain only a short and plain statement of the claim rather than a long, detailed set of facts.
- Cannot dismiss for failure to state a claim unless it appears beyond doubt that Π can prove “no set of facts” in support of the claim,
which would entitle him to relief
- Even if π proved every fact asserted in the complaint, no legal theory would follow π winning
SWIERKIEWICZ V. SOREMA (2002)
p. 562
Facts: Alleged employment discrimination based on age and ethnicity.
PH: Π alleged he was terminated in violation of Title VII of the Civil Rights Act of 1964. District Court dismissed complaint because he
“had not adequately alleged a prima facie case, in that he had not adequately alleged circumstances that support an inference of
discrimination.” Second Circuit affirmed. SC reversed.
Issue: Is a complaint in an employment discrimination lawsuit required to contain specific facts establishing a prima facie case of
discrimination?
Holding: No. Employment discrimination complaint must only contain “a short and plain statement of the claim showing that the pleader
is entitled to relief.” Rule 8(a) established a pleading standard without regard to whether a claim will succeed on the merits.
Reasoning: Π complaint satisfied Rule 8(a) requirements. Prima facie case is an evidentiary standard, not a pleading requirement. The
Federal Rules do not contain a heightened pleading standard for employment discrimination suits. Petitioner’s complaint easily satisfies the
requirements of Rule 8(a) because it gives respondent fair notice of the basis for petitioner’s claims.
- Cannot force Π to higher standard in certain cases
- Liberal theory applies broadly
- Confirmed Conley standard requiring π gives ∆ fair notice of claim
33
BELL ATLANTIC CORP V. TWOMBLY
p. 562
Facts: Π represent class of 90% of all subscribers to local telephone or high-speed internet services in US against America’s largest telephone
communication firms for unspecified instances of anti-trust violations that allegedly occurred over a period of seven years. Bell Atlantic in
an alleged conspiracy to prevent competition/engaging in a monopoly.
PH: Π filed class action against major telephone companies in the United States alleging that they had violated Section of the Sherman
Antitrust Act through efforts to (1) inhibit the growth of local phone companies and (2) to eliminate competition among themselves in
territories where anyone was dominant – monopoly. SDNY dismissed complaint for failure to state a claim upon which relief can be granted.
Court of appeals reversed. SCOTUS revers and remanded.
Issue: Did π make sufficient claims to get to discovery?
To survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.”
Dissent: Conley has been cited as authority in a dozen opinions of this court and this the first time there has been any doubt. Fear of the
cost of discovery does not constitute this conclusion.
- 1996 Telecommunication Act - encouraging competition
Π alleged that ∆s entered into a contracted, combination, or conspiracy to prevent competitive entry. Π, ∆ and court weren’t disputing over
the lack of competition, dispute was about whether they agreed to not compete.
- If there was, ∆ would not be open about it.
- Critical element of allegations was the state of mind of the ∆ → ∆ is at a disadvantage
- Conscious parallelism: doing what everyone else is doing but not by agreement
§ Injured by conscious parallelism in the same way they would be injured by an agreement, but Π only gets damages if it is a
product of a conspiracy
§ Law triggers compensation and what the law can provide for. Some injuries look the same but are not compensable.
- Court says that it cannot just imply conscious parallelism
- The allegation is there but it is conclusory. Just states the elements of a cause of action.
- Only rest statute 1 claim on parallel conduct, not on allegation of actual agreement among companies.
- No reason o infer that the companies had agreed among themselves to do what was natural anyway.
- Π second theory of conspiracy rests on competitive reticence among the companies. Lack of competition is not suggestive of
conspiracy.
- Must be more than labels and conclusions → formulaic recitation of the elements not enough
- Facts must be suggestive of liability and not just simply consistent with it.
Overrules Conley
- Still about notice, but added plausibility requirement
- Overruled part that denied motion to dismiss when cannot
- Agreement wasn’t plausible → companies were acting in parallel consistent with an agreement but also could be consistent with an
alternative explanation
How did SCOTUS in Twombly decide alternative explanation? Is Form 11 still good?
- Bring knowledge of the world into analysis of complaint → made assumptions on the world
- Need something to nudge us across the line from conceivable to plausible
- Form 11 still good → Twombly opens the door to import background knowledge of world in assessment
Twombly Framework: Rule 8(a)(2) interpretation – claim must show a plausible claim to relief . To figure out:
1. Are allegations conclusory or factual?
- Conclusory: do not accept as fact
- Factual: accept as true
2. Is there an obvious alternative explanation for Π outcomes?
3. If complaint is sufficient, go to discovery.
Plausible: somewhere between possible and more than likely. Draw inferences from factual allegation in favor of Π.
34
ASHCROFT V. IQBAL
p. 579
Facts: post 9/11 detainment of Arab muslims from Pakistan/Egypt. Discrimination on religion, race and national origin. Multiple theories
of relief.
Issue: Did Πs adequately allege that ∆s intentionally discriminated against them?
Holding (5-4): motion to dismiss should be granted because the allegations against ∆s did not tie them to the claimed unconstitutional
behavior with enough specificity to satisfy Twombly’s plausibility test.
Reasoning: It was not enough for π to plead that ∆ merely had knowledge of their subordinates’ discriminatory purpose. Must
- Knowing of/condoning does not establish a constitutional violation. Must show ∆’s own intent to discriminate.
- Allegations of harsh treatment were conclusory. Not stricken from the complaint, but the court did not take them as true.
§ Conclusory allegation: recites elements of the cause of action
§ Court did not deny discrimination, but not enough facts were alleged to be plausible.
- Court went outside of the facts to find an obvious alternative action
Rule: a complaint must be non-conclusory (base allegations on fact) and be believable under the rules of logic and circumstances considered
to be considered well-pleaded
Determining plausibility of a claim is context-specific
- One context: substantive law of constitutional claims against federal officials
- Judicial experience and common sense → invitation for judges to use discretion (inconsistency?)
§ Consistent with Twombly
§ Going to rely more on discretion to leaven understanding of what claim is about and its plausibility. Basis judge will be
using isn’t said until the opinion is released.
Rule 8(a)(2): “showing” most at work
- Show me! What does it mean to show entitlement to relief?
- To show entitlement to relief, show that you alleged a plausible claim for relief.
What does Iqbal add?
1. Conclusory? – not much
2. Plausibility: more understanding on role of judicial discretion. Unless there is an obvious alternative, can have multiple plausible
accounts. If one is unlawful, fine unless there is an obvious alternative.
- Expanded theory of plausibility. Makes it easier for ∆s to dismiss complaints.
Importance of distinguishing factual and conclusory allegations
- More likely to give ∆ notice of why π is suing
- Signals a court as to what claims they should be focusing on
Twomby/Iqbal Standard: Whether the facts as stated (if assumed to be true) set forth a non-speculative claim. If there are key missing facts
requiring unfounded speculation to establish the claim, the claim as alleged may be deemed implausible.
Twombly/Iqbal Test:
1. Cause of action and what it requires → substantive law
2. Are the allegations conclusory or factual?
a. Conclusory: is it just a recitation of the elements of a cause of action?
b. Factual: Accept as true and make inferences in favor of Π
3. Is the factual claim plausible?
a. Existence of alternatives?
b. Judicial experience and common sense
35
Responding to a Claim/Answering (∆)
Π files complaint. ∆ must answer or motion to dismiss. (in no specific order)
1. File an answer to dispute facts. Then file 12(c) fo judgment on pleadings. If no 12(c), go to discovery.
2. File motion under 12(b)(1-7)
§ Assertion about law. Not used to dispute facts.
3. Affirmative Defense under 8(c)
§ Even if allegations are true, should not recover.
4. Assert a counterclaim.
Rule 8(b): Defenses; Admissions and Denials (from notes; not straight from supplement)
1.
2.
3.
4.
∆ can admit certain allegations → obligation to admit certain things
∆ can deny in good faith → deny things that they must dispute
Not enough information to deny → legal effect of denial
General denial → denies all at once
§ Makes every issue up for discovery (risky!)
§ Disfavored because we want to force ∆ to face allegations head on
§ Negative pregnant: denies owing $100 but may owe another amount
§ Conjunctive Denial: denies doing A, B and C, but could have done 2/3
Rule 8(c): Affirmative Defenses
Party responding to pleading must do it. ∆ has the burden – Π is not required to negate affirmative defense in advance.
§ Accord and Satisfaction
§ Failure of consideration
§ Payment
§ Arbitrations and award
§ Fraud
§ Release
§ Assumption of risk
§ Illegality
§ Res judicata
§ Contributory negligence
§ Injury by fellow servant
§ Statute of frauds
§ Duress
§ Laches
§ Statute of limitations
§ Estoppel
§ License
§ Waiver
Affirmative Defense
- Separate clause: ∆ burden
- In enactment: Π burden
Rule 12(b): How to Present Defenses
Every defense to a claim for relief in any pleading must be asserted in responsive pleading if one is required. But a party may assert the
following defenses by motion:
8. Lack of subject matter jurisdiction
9. Lack of personal jurisdiction
10. Improper venue
11. Insufficient process
12. Insufficient service of process
13. Failure to state a claim upon which relief can be granted → Twombly, Iqbal
14. Failure to join a party under Rule 19
Rule 12(e): motion for a more definite statement
-
Not moving to dismiss. Amplify it or make statement more definite.
36
AMERICAN NURSES ASSOCIATION V. ILLINOIS
p. 579
Facts: Alleged sex discrimination in employment/wages based on Title VII and Due Process of 14th Amendment.
Π: those in jobs typically comprised of females get paid less than the same job with males
- Classification system
- Comparable worth study showed jobs of equal worth staffed by men received higher pay than those predominantly of women.
Court: passivity is not indicative of intent
- Being conscious of the wage disparity and doing nothing to intervene is not enough to show intentional discrimination.
- Market = the discriminator
What was enough? What was the minimum Π could complain?
- p. 613: charging state with intentional discrimination of female employees based on sex would be enough.
- Π provided more detail than the law necessitated. Going into the specifics is where they slipped up.
§ Strategic tho → sends message to judge to show how problematic the facts are
- Sex segregation under classification schemes is enough. Injury: funneling women into lower paying jobs
- Added a mechanism to use comparable worth study to show actual injury
Main point: just because you have one insufficient claim doesn’t mean the entire case is dismissed.
INGRAHAM V. UNITED STATES
p. 621
Facts: Two cases where Πs victims of negligence by Air Force surgeons. Both rewarded damages. In 1977, prior to the cases, legislature of
TX adopted certain limitations on damages to be rewarded in actions against healthcare providers.
PH: π prevailed in both. In both cases, government moved for relief from judgment to the extent that the damages exceeded the limit
imposed on medical malpractice by TX act. District Court denied all post-trial motions. Court of Appeals affirms.
Holding: TX statutory limit on medical malpractice damages is an affirmative defense which must be pleaded timely and that in the cases
at bar the defenses have been made.
Reason: Failure to assert affirmative defense in a timely fashion constitutes a waiver.
TAYLOR V. UNITED STATES
p. 625
Facts: Π sustained permanent brain damaged while receiving medical treatment at an army hospital.
PH: After District Court awarded damages, government moved for reduction in damages on CA civil code. Ninth Circuit reversed bc
government waived protection afforded by it by failing to raise the issue before judgment.
HYPO: Π had contractual relationship with State Farm. Independent subcontractor that sold insurance. Subcontracter sought public office
and State Farm fied. Sued and attached contract. Provisions include (1) devoting all time to State Farm and (2) State Farm could terminated
at any time without reason. State Farm 12(b)(6) motion to dismiss. Not breaching any contract by pursuing any options, but may still
terminate at any time. Court grants motion to dismiss.
- State Farm did not breach the contract. Π pleaded himself out of court by attaching the contract; plead too much.
- If Π didn’t bring in contract, State Farm would’ve wanted to bring to court’s attention. Attach to motion for summary judgement.
- Plead more than Rule 8 required
37
Amendments: Rule 15
15(a)(2): consent of other party or court approval
15(b): amend pleadings to conform to what is tried after trial
15(c): allows a party to relate an amendment back to the original pleading under special circumstance
15(c)(1)(b): must arise out of the same transaction or occurrence of the original pleading
15(c)(1)(c): If adding a new party, must arise out of the same transaction or occurrence. Party must have had notice and a “mistake” must
have occurred. Must also be within 120 day time period.
Why would opposing party consent to amendment?
- Know the judge will grant consent to leave
Could Iqbal amend?
- Rule 15(a)(1): within 21 days of service. No.
- Rule 15(b): with leave/permission from court or from consent of other party. Maybe.
§ Other party probably wouldn’t consent.
BEECK V. AQUASLIDE
p. 627
Facts: Π sued ∆ claiming he was severely injured while using their waterslide. In initial answer, ∆ stated they manufactured the slide. After
statute of limitations had run, ∆ president went to see the slide and determined it was not theirs.
PH: District Court granted ∆ motion to amend because initial answer was based in good faith in the three insurance companies that
investigated. Π failed to show that it would be unable to proceed against another party. Jury verdict for ∆. Π appealed. Affirmed.
Issue: Should ∆s have been allowed to amend their complaint saying it wasn’t their slide?
Holding: The trial court did not abuse their discretion in allowing ∆ to amend answer. Rule 15(b)(1)
Reasoning: Appropriate to amend because they acted in good faith. Π can seek recourse from other people. Wouldn’t be fair for the ∆ to
be liable for something the ∆ definitely didn’t do just because π has no one else to recover from. Prejudice to Π but greater prejudice to ∆.
MOORE V. MOORE
p. 630
Facts: Custody battle. Discrepancy between allegations in pleading and what was discussed at trial. After mother won, she filed motion to
amend answer to assert counterclaims for custody, child support, alimony, and attorney’s fees. Court granted some.
Father didn’t expressly consent – implied consent
- Implied consent: (1) failure to object to evidence (2) admission of evidence that supports the new issue but not issues previously
specified in the pleadings
- In a custody battle, not just determining if he had custody but who was entitled to it.
- Did not include a claim for child support but entered into evidence of financial needs of the child
- If in some future proceeding these issues came up (for second child) they can use res judicata
KRUPSKI V. COSTA CROCIERE S.P.A.
p. 633
Facts: Π tripped over a cable and broke her femur on Costa Magica cruise ship. Π made a mistake of ∆ identity and took a long time to
amend the complaint.
Issue: Can π amend a complaint to add a party?
Holding: Costa Crociere should have known that Π’s failure to name it as a ∆ in her original complaint was due to a mistake concerning the
proper party’s identity.
Reasoning: Π failure to add ∆ is sufficient to make reasonable any belief she had made a deliberate and informed decision not to sue them
in the first place. The interrelationship and similarity between the “Costas” should heighten the expectation that ∆ should suspect a mistake
has been made when Costa Cruise is named in a complaint that actually describes Costa Crociere’s activities.
§ Π complaint is timely under Rule 15© because she made a mistake concerning the identity of ∆s. A mistake allows her amended
complaint to relate back to the original complaint as it was filed then.
Hypo: Amend pleading to add names instead of John Doe1-7?
§ 15(c)(1)(b): satisfied
§ 15(c)(1)(c)(i): ∆ aware suit has been filed
§ 15(c)(1)(c)(ii): Police Dept. should have known mistake? NO. Not satisfied.
38
Rule 11: Signing Pleadings, Motions and Other Papers; Representations to the Court; Sanctions
-
weed out bad faith claims, legally frivolous claims, and bad faith factual allegations
Rule 11(b): Representations to the Court
§ 11(b)(1): prevent improper purpose
§ 11(b)(2): think about existing law; know when stretching it
§ 11(b)(3): evidentiary support (factual)
§ 11(b)(4): good faith basis of ∆ denying claims
“Safe harbor provision”: if you think someone is in violation of Rule 11 you must notify them and give them your reasons. They have 21
days from that to withdraw the pleading.
H1. Statute of limitations is 3 years. Π didn’t go to attorney until 3.5 years passed. Π has valid claims and wants to file. What do they do?
- Statute of limitations is not a Π complaint. It is an affirmative defense. ∆ waives the affirmative defense if he does not raise the
statute of limitations.
SUROWITZ V. HILTON HOTELS
p. 641
Facts: Π is a polish immigrant. Bought stocks from ∆ with help from her son in law. ∆s later announced its plan to purchase a large
amount of its own stock. Son in law then went to friend where they reached conclusion thatj s were engaged in a fraudulent scheme. Π
agreed that a suit be filed in her name. A derivative action was filed on behalf of herself and other stock holders alleging the ∆s had
defrauded them of several million dollars.
Holding: In a shareholder derivative suit, the P need not know every detail about the complaint, nor understand that a lawsuit has been
filed alleging certain claims. The good faith allegations by a lawyer suffice to require the D to respond to the complaints.
BUSINESS GUIDES INC. V. CHROMATIC COMMUNICATIONS ENTERPRISES, INC.
p. 646
Facts: Π sought temporary restraining order on ∆ for copying phone listings from them. Figured it out bc they deliberately posted incorrect
listings to see if they would print it. When judge’s clerk asked for listings, π retracted claim that 3/10 were seeds. Clerk discovered 9/10
supposedly incorrect listings were valid. Not valid proof of copying.
Holding: Any party who signs a motion, pleading or other paper has an affirmative duty to conduct a reasonable inquiry into the facts and
the law before filing.
Dissent: imposition of sanctions in this case would be an abuse of discretion absent a finding of the represented party’s bad faith.
HADGES V. YONKERS RACING CORP.
p. 648
Facts: Π sought relief from ∆ in federal court arising from litigation that was pending in state court. Π said he had not worked for four years
and that an agency in collaboration with ∆ had barred him from work. Π doesn’t disclose pending state court claim.
Holding: Under all the circumstances, particular failure to afford Hadges the 21 day safe harbor period provide by Rule 11 the court believes
the sanction of Hadges should be reversed.
Reasoning:
1. Π did correct one of his statements which is not sanctionable. YRC didn't serve Hadges with request for sanctions 21 days before
presenting it to court. Denied him “safe harbor”
2. Kunstler (attorney) did not receive the benefit of safe-harbor period. Court did abuse discretion because the attorney’s reliance on client’s
statements was reasonable.
Takeaway: Read the 1993 amendment to Rule 11 as indicating that attorney’s only need to do “an inquiry reasonable under the circumstances”
and that so long as the client provides prospective evidentiary support for allegations, the attorney has acted properly.
39
Notice: must be reasonably certain to inform under the circumstances
Test: what a reasonable person would do to inform
1. Missing or unknown: publication is okay
- Cannot be obtained with due diligence
2. Publication not enough when Π can ascertain the identity of the missing people (Mennonite v. Adams, Tulsa v. Pope)
3. Mail: enough for people whose identity you know; feasible and just better
Why do we give notice?
- Let people know and give a chance to answer
- Due process concern: when you’re sued, property or certain rights make be taken away.
- Cannot be heard if you don’t know.
Do we require ∆ to have notice every time we file? Why?
- No.
- Too much of a burden on Π.
- Court interest: whether or not they can adjudicate
- State/sovereign interest in adjudicating on sufficient terms
- Don’t require best notice, just reasonable notice
Not focused on whether ∆ actually received notice; just needs to be reasonably calculated to reach ∆. In general, actual notice doesn’t matter.
Π sues ∆. ∆ doesn’t show up. Default judgment.
1. Unreasonable method of service, no notice – ∆ wins
2. Unreasonable method of service, notice – ∆ wins
3. Unreasonable method of service, notice by happenstance – ∆ wins
4. Reasonable method of service, no notice – Π wins
5. Usually reasonable method of service but under special circumstances (known by Π) is not – insufficient
MULLANE V. CENTRAL HANOVER BANK
p. 201
Facts: Grandmother to receive from trust as long as she is alive. Kids have interest in principal bc when she dies its theirs. Both are
beneficiaries (principal and income). Under NY law, can pool with small trusts. Central Hanover Bank = beneficiary of the trust with a
fiduciary duty to both beneficiaries. Bank can go to court and bless the way they handled the trust (handled it appropriately). No one can
contest and are bound by court’s decision. Accounting case is an opportunity to be heard on maintenance of the trust. Tensions between the
income and principle beneficiaries. Principal beneficiaries want a big principal; income beneficiaries want a high income. High risk, high
reward – risk for income beneficiary is a lower principle.
In accounting case:
- Income beneficiaries: negligently making investment decisions. Trust administration fees and income beneficiary fees are too high.
- Legal claim about expenses
Provided notice in publication of newspaper for 4 weeks. Only notice required by state statute.
- Whether publication is ok depends on if there are better forms of notice. When not reasonably possible, publication is okay.
o Here publication is okay when you don’t know where/who beneficiaries are
Holding: Notice must be given with due regard for the practicalities and peculiarities of the case to meet the constitutional requirements.
Reasoning: Π had right to receive adequate notice because it could’ve deprived them of property rights. Notice has to reasonably convey
the required information and must afford a reasonable time for those interested to make their appearance. Statutory notice to beneficiaries
is not inadequate because it fails to reach everyone. It is inadequate because under the circumstances it is not reasonably calculated to reach
those who could easily be informed by other means at hand. Mail is an efficient and inexpensive means of communication.
H1.Mullane decided to sue ∆. Knows where they live. Does not bother with mail or personal service. Just publishes and they see it.
- Improper; doesn’t matter if they were informed by luck. If notice is constitutionally insufficient but ∆ still receives it, still improper.
H2. Leaves notice at house. House burns down.
- Cannot foresee house burning down. Fine bc reasonably certain the ∆ would receive the service.
H3. Own rental property. Want to evict a tenant for having a scary dog even though the lease says no dogs. Afraid that the dog eats everything.
Can leave summons on the door. Is it sufficient if you know about the dog?
H4. Greene v. Lindsay: prior knowledge that people pull down postings on doors. SCOTUS held service by mail was required.
H5. Jones v. Flowers: person refused to answer the door for certified mail. Refused to act once mail was delivered back. Should have taken
additional reasonable steps.
H6. Dusenbery v. US: Prisoner never got notice but prison says he did. Prisoner given log book and must sign that it received mail. If refuses
to sign, someone must document it. Not a better method of effectuating service, but a better method of documenting it.
40
Mechanics of Giving notice – Rule 4
- Rule 4(d): waiver of service
- Allows to dispense rules of serving
- Mail it and ask ∆ to waive it and sign. If not, π can later ask for the costs of service.
NATIONAL EQUIPMENT RENTAL LTD. V. SZUKHENT (1964)
Procedural History: Petitioner filed complaint in federal court in New York in 1962 alleging ∆ did not make any of the periodic payments
specified by lease. Marshall delivered two copies of summons and complaint to Florence Weinberg. That same day she mailed it to the
respondents with a letter stating that the documents had been served upon her as their agent for the purpose of accepting service of process
in New York in accordance with the agreement made in the lease. ∆ quashed the service on motion holding that, even though Florence had
promptly notified them of service of process and mailed copies to them, the lease agreement itself had not explicitly required her to do so,
and therefore was a “failure of the agency arrangement to achieve intrinsic and continuing reality.” Court of Appeals affirmed. SCOTUS
reversed.
Facts: Π is a corporation with PPoB in New York. Sued ∆, residents of Michigan, in a New York federal court claiming they had defaulted
under a farm equipment lease. Lease was executed in 1961. Form provided that they designated Florence Weinberg the agent for purpose of
accepting any service of any process within state of NY. ∆s were not acquainted with Florence.
Issue: Can a party to a private contract appoint an agent to receive service of process within the meaning of Federal Rule 4(e)(2)(c), where
the agent is not personally known to the party and where the agent has not expressly undertaken to transmit notice to the party?
Holding: Florence was ∆’s “agent authorized by appointment to receive service of process.”
Reasoning: Florence’s prompt acceptance and transmittal to ∆ of the summons and complaint pursuant to the authorization was sufficient
to validate the agency, even though there was no explicit previous promise on her part to do so. No state law would invalidate agency in
question. Agency would have been invalidated if she didn’t serve in a timely manner.
Dissent:
Brennan: Due Process concerns. Majority treating the provision in the constitution as a waive of ∆ constitutional right to not be compelled
to go to New York to defend themselves against the company’s claims.
41
Opportunity to be heard: protects due process interest (life, liberty and property)
1.
2.
What is the interest at stake? Is it protected by due process?
If there is a due process interest, what procedures? What process is due?
Due Process Interest regulates
1. How to give notice
2. When to get the opportunity to be heard
What happens before final judgment – context of property being attached
- Property is attached for jdxn to enforce judgment
- Procedures by which you can attach property
- Power to invoke property interests
- Provisional remedies before final judgment
Provisional Remedies
1. Garnishment → wage garnishing in child support
2. Preliminary injunction → order by court to make ∆ refrain from or do something
3. Lisse pendens → notify person of pendency of litigation. ∆ can challenge contested transfer of property
Cases focus on when it is appropriate for Π to deprive ∆ of property before final judgment.
SNIADACH V. FAMILY FINANCE CORP. OF BAY VIEW
Facts: Court invalidated state statute allowing creditor to garnish wage without hearing
- Could provide grounds for terminating employment
- Temporary deprivation of property is still deprivation of property
P. 244
FUENTES V. SHEVIN
p. 244
Facts: Fuentes purchased gas stove on installment contract. Added a stereo system later (total $500). Paid off until $200 left. Dispute bc
stove wasn’t working and stopped paying bc they wouldn’t fix it. Paid off the stove but didn’t know that they were bundled together and
didn’t own either until they were both paid in full. Writ of replevin – seized both. FL law stated that one could file a complaint saying you
owned the property and post a bond. Writ of replevin issued at the same time served with no prior notice of seizure.
SCOTUS deemed statute unconstitutional
- Contractual provisions don’t waive basic rights of due process
- Post-deprivation hearing can’t be sufficient to compensate for temporary loss of property
- Worried that it could have been an error – no one assessed the credibility of π complaint (filed with court clerk)
Court: significant interests were at stake
- In most cases, necessary to have hearing prior to taking property
- Each party has a property interest to protect
o store has the right to sell
o Fuentes has possession (right to use and possess the property)
- Even though Fuentes lacks full title, being deprived of possessory interest
MITCHELL V. W.T. GRANT
p. 247
Facts: bond and immediate deprivation. Can obtain vendor’s lean (layaway) to repossess if violates terms.
Dissenter in Fuentes wrote the majority. Blatantly disregarded stare decisis.
Distinguished from Fuentes
- Detailed affidavit, not just a complaint, that stated grounds
- Judge made the determination, not a clerk
42
CONNECTICUT V. DOEHR
p. 247
Procedural History: π submitted an affidavit in support of application. Superior Ct. judge found probable cause to sustain the validity of
π’s claim and ordered the attachment for $75,000. Sheriff attached it 4 days later. Doehr received notice after this. Was not yet served with a
complaint. Attachment notice informed ∆ that he had a right to hearing: (1) to claim no probably cause existed; (2) request attachment be
vacated, modified, or bond be substituted; (3) claim that some portion of property was exempt from execution
Facts: March 15, 1988, Π (DiGiovanni) submitted an application to CT Superior Ct. for an attachment in the amount of $75,000 on ∆ home
in Meridan, CT. Taken in conjunction with a civil action for assault and battery that he was seeking to institute against ∆ in same court. Suit
did not involve real estate. Π did not have any pre-existing interest in Doehr’s home or property. CT law authorizes prejudgment attachment
of real estate without affording prior notice or opportunity for a prior hearing to the individual whose property is subject to the attachment.
Statute doesn’t require the plaintiff to post a bond to insure the payment of damages that ∆ may suffer should it be proven wrongfully issued
or claim proven unsuccessful. ∆ didn’t pursue these options; filed suit against π in federal district court, claimed it was unconstitutional under
due process clause. District Court upheld statute and granted summary judgment in favor of π. US Court of Appeals reversed.
Issue: Does a state statute that authorizes prejudgment attachment of real estate without prior notice or hearing, without a showing of
extraordinary circumstances, and without a requirement that the person seeking attachment post a bond, satisfy the due process clause of the
14th amendment?
Holding: No. The prejudgment order exceeded the parameters of the test. “by failing to provide a pre-attachment hearing without at least
requiring a showing of some exigent circumstance, clearly falls short of the demands of due process.”
Reasoning:
1. Property interests that attachment affects are significant: impairs ability to sell or alienate property, damage to credit, etc. Need not
be an extreme deprivation to trigger due process concern. Temporary or partial impairments to property rights that include
attachments are sufficient to merit due process protection.
2. Substantial risk of erroneous deprivation. ∆ might not be able to satisfy the award of damages to Π. Definition of probably cause
is obscure. Issue does not concern ordinarily uncomplicated matters that lend themselves to documentary proof. Party must show
more than the mere existence of a claim before subjecting an opponent to prejudgment proceedings that carry a significant risk of
erroneous deprivation.
3. Interests of plaintiff are too minimal to supply consideration. Π had no existing interest in real estate when he sought attachment.
Only interest was ensuring the availability of assets to satisfy his judgment if he prevailed on the merits of his action. Π interest in
attaching property doesn’t justify burdening ∆’s ownership rights without a hearing to determine likelihood of recovery
4. No government interest effects analysis.
Dissent:
IV(a): Π posting a bond can protect property rights affected by the mistaken award of prejudgment remedies.
V: says IV is basically just a diatribe outside the confines of the case and doesn’t join (I agree)
Notes:
Statutory process in CT: no need to show extraordinary circumstances to attach property. No bond requirement.
Π must submit affidavit restating facts in complaint to establish probable cause.
∆ can [for prompt post-deprivation hearing]
1) Claim no probable cause
2) Substitute bond
3) Limit attachment
Lower court: unconstitutional. Need execptional circumstances and a bond to dispense prior hearing.
§ Very fact intensive dispute: hard to resolve merits without adversarial opinion
Four prong inquiry requiring consideration of:
1. Private Interest
2. Risk of Erroneous Deprivation
3. Π interest
4. Government interest (cost of holding pretrial hearing) [ancillary]
Principle Takeaways from Case Sequence on Pre-Deprivation hearing
1. Who?
2. Bond?
3. Fact intensive?
4. Post-deprivation hearing?
5. Extraordinary circumstances?
43
Discovery
-
People learn about the strengths and weakness of their case. Is the evidence strong enough?
o Client doesn’t know everything/may not tell the truth. Opposing party has more information than you do/info you don’t
- Info must be obtained before going to trial that show the merits of the case
- Opportunity to prove claims. Allegations are not enough.
- BURDEN ON Π (or person making the claim)
Why have this mechanism that forces parties to “show their hands”? Why before trial?
1. Efficiency: save the judge, jury, witness time. Can help to prevent trials.
2. Public interest
3. Usually makes it easier for π to prove their case
4. Prevents surprise
5. Prevents hiding things that are harmful to a party’s claims/defense
Rule 27: Depositions to Perpetuate Testimony
-
Only way to obtain discovery before filing a complaint
Must be perpetuating testimony and provide some evidence that testimony will be lost/destroyed
Extremely discretionary
Different Kinds of Discovery in the Federal Rules
-
-
Rule 30: Depositions – oral questions under oath
§ More than an interview. Individual may be compelled.
§ Cannot object unless privileged info
Rule 33: Interrogatories – written questions
§ Must be a party
§ Can only give to other parties
§ Not very effective unless you are trying to pin down specific information (state of mind, memory, etc.)
Rule 34: production of documents
§ Inspect property or tangible things
§ Good way to get documents in other party’s possession you otherwise wouldn’t have access to
Rule 35: physical/mental examination
§ Narrow issues for trial
Rule 36: request for admission
§ Doesn’t involve production of new info
§ “I request you admit this fact to be true” to other party
Rule 26:
a.
Required Disclosures
1. Mandatory disclosures at the start of the case
§ Reduces unnecessary expense/delay
§ Information used at trial to support claims/defenses (witnesses, documents, etc.)
§ ≠ have to disclose impeachment
§ description of documents
§ insurance and damage calculation
2. Disclosure of expert testimony
3. Pretrial Disclosures
§ Right before trial
§ Helps move it along
b. Scope of Discovery and Limits
1. Proportionality Requirement
§ Balancing value vs. value of producing it
§ Cost/benefit analysis without all the info
§ Relevant to any party’s claim or defense
§ Proportional to needs of case
3. Trial Preparation Materials
c. Protective orders and ability to use them
Protective Orders
Usually district court decision on discovery is final
Ignore order, hold in contempt, then appeal → usually can’t appeal so do this to get around it
Unusual for them to be lifted after judgment
**Federal Rules don’t require that info must be admissible at trial.
44
MARRESE V. AMERICAN ACADEMY OF ORTHOPEDIC SURGEONS
p. 845
Π: Marrese
∆: American Academy of Orthopedic Surgeons
Facts: Marrese was denied membership in the Academy.
PH: Marrese sued in state court. was dismissed. He then filed a federal antitrust action. As part of pretrial discovery, Marrese sought to
examine the Academy's membership files, which contained much confidential information. This was ostensibly for the purpose of
ascertaining whom to depose. The district court ordered the production of the files along with a protective order stating that Marrese must
keep the information confidential. The Academy was held in contempt and fined. The Academy appealed. State court complaint: no valid
state law claim made. District Court found for plaintiff, ordered Academy to produce documents. Academy refused, was held in contempt
and fined $10,000, then appealed. Circuit Court reversed.
Issue: Should a motion to limit discovery under Rule 26(c) be granted where the party seeking discovery would incur hardship without the
material sought, and the party against whom discovery is sought would suffer hardship if forced to produce the material sought, if the
competing interests can be served with minimal damage to either?
Holding: No. A motion to limit discovery under Rule 26(c) should not be granted where the party seeking discovery would incur hardship
without the material sought, and the party against whom discovery is sought would suffer hardship if forced to produce the material sought,
if the competing interests can be served with minimal damage to either.
Reasoning: Rule 26(c) requires a district court judge to balance the interests of the two parties when considering a motion to limit discovery.
If denied access to the discovery, the hardship to Marrese is substantial, since without the records he seeks from the Academy, his antitrust
suit will fail. But if forced to produce the records, the hardship to the Academy is substantial, since its members have a right to privacy. The
district court judge could have used various methods to balance the interests: the judge could have conducted in camera review, or ordered
the Academy to supply redacted versions of the files, in which the names of members are blacked out, for example. The judge could have
prevented Marrese's abuse of the discovery process while still allowing him access to the information necessary to his case. The judge's
powers under Rule 26 are broad. Reversed.
Case generally about protection of interests
a. Disclose everything to judge → Concerned that the judge would not have as nuanced as an approach as attorney would
b. Disclose but redact names → Clients may give insights
c. Disclose all, unredacted but not public → costs to everyone else
Note Cases:
1. Lindberger v. General Motors Corp: π alleged personal injuries; injuries caused by caused by negligence of defendant when
manufacturing and designing a front-end loader (sold to π employer).
∆ refused to answer interrogatories regarding changes made to the design of the braking system or brake malfunctions.
Evidence of subsequent repairs normally inadmissible at trial, however court granted motion to compel
Court’s reasoning: information is relevant to subject-matter of action, brake system may be significant in determining ∆ liability,
knowing what information ∆ may have passed on to employer may be relevant on finding contributory negligence
2. World Wrestling Federation Entertainment, Inc. v. William Morris Agency, Inc.: breach of contract
Court refused to allow π to discover ∆ contractual agreements with third parties
Reasoning: in the entertainment field, how one contracting party is treated is not relevant to how another is
3. Regan-Toughy v. Walgreen Co.
Discovery rulings only reviewed after entry of final judgment under abuse of discretion standard
Gives trial court a lot of leeway
45
Work Product Protection and Attorney Product Privilege
-
Communication is protected, not the facts communicated
Work Product Protection= limited
Attorney-Client Privilege= absolute
Rule 26(b)(3): codified by Hickman
1.
2.
3.
Documents and Tangible Things. Ordinarily a party may not discover documents and tangible things that are prepared in
anticipation of litigation or for trial by or for another party or its representative (including the other party’s attorney, consultant,
surety, indemnitor, insurer or agent). But subject to Rule 26(b)(4), those materials may be discovered if
1) They are otherwise discoverable under Rule 26(b)(1); and
2) The party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship,
obtain their substantial equivalent by other means
Protection Against Disclosure. If the court orders discovery of those materials, it must protect against disclosure of the metal
impressions, conclusions, opinions or legal theories of a party’s attorney or other representative concerning he litigation.
Previous Statement. Any party or other person may , on request and without the required showing, obtain the person’s own
previous statement about the action or its subject matter. If the request is refused, the person may move for a court order, and Rule
37(a)(5), applies to the award of expenses. A previous statement is either:
1) A written statement that the person has signed or otherwise adopted or approved; or
2) A contemporaneous stenographic, mechanical, electrical, or other recording – or a transcription of it – that recites
substantially verbatim the person’s oral statement.
For the privilege to attach to a communication, four elements must be present:
1. Asserted holder of the privilege is or sought to be a client
2. The person to whom the communication was made is
a. A member of the bar of a court, or his subordinate; and
b. In connection with this communication in acting as a lawyer
3. The communication relates to a fact of which the attorney was informed
a. By his client
b. Without the presence of strangers [
c. For the purpose of primarily securing either
i. An opinion on law or
ii. Legal services or
iii. Assistance in some legal proceeding, and not
iv. For the purpose of committing a crime or a tort
4. The privilege has been
a. Claimed and
b. Not waived by the client
46
HICKMAN V. TAYLOR
p. 886
Π: Hickman
∆: Taylor
Facts: Tugboat sinks and five crew members drown (unclear how). Three days later, got a lawyer in anticipation of litigation. Lawyer
interviewed survivors and witnesses. Five claims were made, four were settled and the fifth went to trial. Π filed 39 interrogatories. Π wanted
the ∆ attorney’s records on interviews.
Holding:
(a) An attempt to secure written statements, private memoranda and personal recollections prepared or formed by an adverse party’s
counsel without necessity or justification is not discovery.
(b) Discovery of written materials obtained or prepared by an adversary's counsel with an eye toward litigation may not be had unless
party seeking discovery can establish that relevant and non-privileged facts remain hidden in an attorney's file and where production
of those facts is essential to the preparation of one's case.
Reasoning: Discovery has boundaries. If you already know the witnesses’ identities, you can interview them yourself. If everything was
available to opposing counsel, nothing would be written down. Total inefficiency in the legal world. Maybe it’s fine for purposes of
impeachment, corroboration or when witnesses aren’t available or can be reached only with difficulty.
Π argument: Need the records because it would create a systematic advantage for a corporate ∆ who has access to information that they
don’t, putting the π at a disadvantage because they don’t have access to the same resources.
Court: lesson on transubstantivity. It may be true that the π is at a disadvantage but the court doesn’t care because the rules aren’t
written to interpret that.
∆ argument: Do not have to turn over because it is privileged attorney/client communication.
Court: although it isn’t attorney/client privilege, it still must be protected bc it would be turning over the thought process of attorney.
Why does the court protect this “work product privilege”?
1. Question of incentives
If notes were discoverable, then attorneys would never write anything down.
Inefficiency issue
2. Freeriding issue
If they turn over everything, π won’t do any work until they get the ∆ notes. Π opened that door.
3. Demoralizing to the legal profession
Lawyers own records could be used against them [witness against own client]
The harder one attorney works, the more she helps the other side. Π
How far does this protection extend?
∆ interviewed witness who died. Π didn’t get to interview.
Court: limited privilege → If you show that it is impossible to get the WRITTEN information, you can probably get it.
Oral statements are harder because the voice/questions asked by the attorney are indicative of his or her thought processes.
**The distinction between oral and written statements is important because it is more serios to reveal attorney’s thought processes
Two Concerns in Hickman:
1. Freeriding (oral and written)
2. Invading attorney thought processes (oral)
Rule 26(b)(3) CODIFIES HICKMAN
Acme polluted and damaged residences in VT. Subsidiary action was attributable to the company. Acme wanted to sell, but knew buyers
would ask for an environmental report. They also knew they might face liability for the environmental damages. In 2004, they hired a company
to determine the toxicity and they reported there was heavy contamination.
1. If the π wants that report, can they get it? → It wasn’t an attorney.
2. Was it prepared in anticipation of litigation
Report prepared for Acme by its agent.
No requirement that the person preparing the document must be the party’s attorney.
Need to know what it was in 2004. Might not be the same as now.
Must show
1. Substantial need
2. No other way to get it.
47
UPJOHN CO. V. UNITED STATES
p. 898
Facts: Counsel for Respondent, Upjohn Corporation, conducted a confidential investigation of the company’s international offices following
reports that some foreign managers were making “questionable payments” to various foreign government officials in violation of U.S. law.
When the IRS attempted to obtain copies of questionnaires, memoranda, and interview transcripts from Upjohn relating to this investigation,
Respondents’ objection on attorney-client and work product grounds was overruled by the Appeals Court, which held that attorney-client
privilege did not apply to communications made by employees not in Upjohn’s “control group”; i.e., not responsible for directing the
company’s policies.
Who is the client?
Tricky with a corporation
Corporation is a legal entity but it is fiction/not a person.
Do they count as a client?
Court of Appeals distinction: which communications counted?
Lower court: people with a substantial role were the control group.
§ SCOTUS rejects and takes a more expansive look
Policy concern: veil of silence
SCOTUS stated that all employees were clients and thus privileged
Trying to analogize a corporation to a person – control group is most analogous to the brain
SCOTUS: lower court ruling is too limited
§ One thing protected by the attorney-client privilege is that the client needs advice.
§ Protecting the lower level employees’ right to be advised
§ Lawyer still needs to know all of the facts and that includes the information given by the lower level employees
SCOTUS: the fundamental purpose remains the same
§ Purpose was fulfilled by the situation at hand and wouldn’t be effectuated by the control group alone
Hickman Hypo Continued: VP gave a detailed report and filed with HQ. Big corporation turns over to his lawyer. Π wants discovery about
VP visit. Is it privileged?
Attorney-Client Privilege doesn’t cover it. Maybe work product liability?
For communication to be Privileged it must be for obtaining legal counsel → Non-privileged communication cannot become
privileged just because you handed them over to the attorney.
Confidentiality: what do we need to know
Employees= highly confidential.
Who else was present → 3rd parties breach confidentiality
Work product goes beyond → information gathering beyond the attorney
Attorney-Client Privilege applies even when there is no litigation – just advice.
48
Summary Judgement
-
The space between discovery and trial
***look at supplement for Rule 56 – only summary is provided.
Inappropriate when there are issue of motive, intent, or state of mind present
Rule 12(b)(6): motion to dismiss for failure to state a claim upon which relief can be granted
Attacks pleadings
Granted when, assuming that all factual allegations are true, Π has not stated a claim upon which relief can be granted.
Theoretically, there is a low bar to meet to get to discovery.
Rule 56: allows parties to intervene to determine if trial is necessary. Filed post-discovery.
Judgment on the ground that there is no genuine dispute on certain facts. If no dispute, entitled to judgment as a matter of law.
Can be used selectively to narrow down the claims going to trial → i.e. on 3/5 claims
Unlike Rule 12(b)(6) → allows to look behind allegations
Rule 56(a): Movant must show that there is no genuine dispute as to material fact and that movant is entitled to judgment as a
matter of lawMaterial fact: fact that can have an effect on the outcome of the case
§ Look to the cause of action and substantive law
§ All Π needs to establish the case is material facts. If they do not prove one, they lose.
If you are a movant, you must show that your version of the facts is/is not in dispute.
Rule 56(b): Party may file a motion for summary judgment at any time until 30 days after the close of discovery.
Rule 56(c): Party must refer to factual materials in the record when asserting that there is or is not a genuine issue of material fact
Motion to dismiss denied. Next day, motion for summary judgment.
Dismissed because no discovery (premature)
Sometimes motion for summary judgment is in the middle of discovery. Court usually says you need a chance to discover.
Summ. Judge. Trilogy: Scott v. Harris, Anderson v. Liberty Lobby, Matsushita
Invited courts to grant summary judgment for ∆s more
49
CROSS V. UNITED STATES
p. 951
Facts: Π was a teacher that traveled to Europe. Π says he went for educational purposes, ∆ says it was just a vacation, but did not provide
evidence to prove it.
Genuine issue of material fact: what was his purpose there? Were his expenses personal or professional?
Substantive law: we need to determine the genuine issue of amterial fact in order to see if his expenses were deductible
Was this a genuine dispute of material fact?
Yes – the jury could rule either way. They could either believe or disbelieve the π.
Worried about professor’s credibility. Usually if credibility is at stake, it is an issue for the jury.
∆ should be able to cross examine the π in front of a jury to see if π story is believable.
Issue with relying on π’s testimony – he has a self-interest
If a reasonable jury can return a verdict for the nonmoving party, motion for summary judgement cannot be granted.
ADICKES V. S.H. KRESS CO.
p. 955
Facts: Civil rights action where π alleged conspiracy between the police and ∆. Summary judgment was granted when π could not produce
evidence to support the conspiracy theory.
Suggested that the party seeking summary judgment (∆) needed to come forward with affirmative evidence of their own to
“foreclose the possibility” that the other party could make a case
To obtain summary judgment, ∆ would have to prove that there was no conspiracy.
In order for the ∆ to meet the court’s standard, Kress would have needed an affidavit of everyone present in the restaurant to
disclose affirmative evidence.
Holding: The moving party did not meet the burden of showing “the absence of any disputed material fact.” Respondent failed to fulfill its
initial burden of demonstrating what is a critical element in this aspect of the case - that there was no policeman in the store.
Rule: The moving party has the initial responsibility of informing the court of the basis for its motion, and that party must recognize those
portions of the record that demonstrate the absence of a genuine issue of fact
CELOTEX V. CATTRETT
p. 957
Facts: Π filed wrongful death action against ∆ and several other corporations, claiming that exposure to asbestos in products manufactured
and distributed by them led to husband’s death. Celotex did not deny making products with asbestos. It was not disputed that he was exposed
to asbestos, it was disputed that it was Celotex’s products that exposed him to it. Celotex claimed that he was not exposed to asbestos via
their products.
PH: After a yr of discovery, ∆ moved for summ. judg. In response, π produced documents tending to show such causation. ∆ argued that
the documents were inadmissible hearsay and thus could not be considered in opposition to the SJ motion. District Court granted summ.
judg. Court of Appeals reversed on grounds that ∆ failed to meet initial burden of production under Rule 56(c) and showing the absence of
genuine issue of material fact, bc ∆ made no effort to adduce any evidence to support its motion. ∆ appealed. SCOTUS
Celotex discharges/meets initial burned by saying no evidence → Π should prove ∆ wrong by providing
Celotex: Π has no affirmative evidence that her husband was exposed to asbestos.
Π: Provided documents that supported allegation that husband was exposed to ∆ product. Didn’t provide witness to his exposure.
Question of the admissibility of evidence produced by π
∆ didn’t produce any evidence – just stated that there was an absence of it in π’s case
Ct. of Appeals said they needed to provide evidence
SCOTUS: ∆ did not fail to meet initial burden of production because they did not provide evidence of their own. It satisfied its
initial burden.
§ There are multiple ways of meeting the burden of production
One way to establish the absence of a genuine issue of material fact is to point to the absence of evidence in the nonmoving party’s case
under Rule 56(c).
Moving party discharges its burden, thereby shifting the burden to the nonmoving party
Moving party has the initial responsibility of informing the court of the basis for its motion; must identify the portions of the record
which it believes demonstrates the absence of a genuine issue of material fact
Opposing party can call to the court’s attention to other material that demonstrates the existence of a genuine issue.
§ Π claimed her husband died due to exposure to asbestos that ∆ manufactured. ∆ moved for summary judgment on the ground
that there was no evidence on the record linking its products to his death. Court held should not be granted because π was able
to point to material in the record that indicated at trial she would have a witness to support her claim (letter from an official of
a former employer of π husband indicating that company records showed he had been exposed to ∆ products.
Court is limiting Adickes
50
Everyone agrees that the discharge element is available, but disagree on how to discharge it.
Agree that you can file the motion, but disagree on how to prove absence.
White and Brennan: suggest Celotex cannot meet its burden (burden on moving party)
§ Such a burden of production is not a burden – would permit summary judgment to be used for harassment
Rehnquist suggests they can prove that the non-moving party did not meet its burden
§ No express requirement in Rule 56 stating that the moving party must support its motion with affidavits or other similar
materials negating the opponent’s claim.
Celotex Takeaways: Has ∆ discharged its initial burden and shifted it to Π?
1. ∆ moving for summary judgment can
a. Submit affirmative evidence that negates an essential element of π claim; or
§ Discharges and shifts burden to Π. Π must then respond with evidence of genuine issue of material fact
b. Demonstrate that π does not have evidence to support its claim
§ Celotex added this “prove it” motion
2. Π moving for summary judgement can only show affirmative evidence.
“Prove it” motion: pointing to the absence of evidence that proves Π’s claims.
Only people who can bring this motion are those without the burden of proof
§ Usually ∆
§ Π can do it when affirmative defense because ∆ bears the burden of proof in affirmative defense
Celotex intentionally speaks about ∆
Celotex: where nonmoving party will bear the burden of proof at trial on dispositive facts, then ∆ can file “prove it” motion.
Π → You cannot say there is nothing in the record to prove ∆’s claim because the ∆ does not have the burden.
Rule: Burden of production can be met by identifying factual matter that is not itself admissible but is reducible to admissible evidence at
trial.
∆ motion for summary judgment
Traditional: negates Π claims
Celotex: no evidence on record of Π claims
Main disagreement in Celotex: what does the ∆ have to do to prove his initial burden (to prove the “prove it” motion)?
Rehnquist (+3): ∆ just file prove it motion. Π responds and if it can’t take declaration (?), their loss.
White (+4): If ∆ knows that witnesses exist, cannot motion until they interview witnesses to show that the π doesn’t have evidence.
SCOTT V. HARRIS
p. 957
Facts: Car chase
Moving party (officer) bears burden of proof
Suing on the basis of qualified immunity defense
§ Scott: actions were permissible because Harris’ dangerous driving posed a significant risk
§ Substantive law: cops may use deadly force against an individual who poses a substantial risk of death, harm or serious bodily
injury to himself or others
Acted unconstitutionally but reasonably – “reasonable violation of constitution”
Court reverses lower court’s denial of qualified immunity
Video greatly impacted it
Officers motivation doesn’t matter – doesn’t matter why they were pursuing the victim, substantive law begs the question of whether
a similarly situated reasonable officer would have done the same
Scott = entitled to summary judgment because no reasonable jury could have concluded otherwise that the car chase that Harris
initiated posed a substantial and immediate risk of serious physical injury to others
Holding: when opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury
could believe it, a court should not adopt that false version of the facts for purposes of ruling on a motion for summary judgment
Exception to the rule that, at summary judgment stage, facts must be viewed in the light most favorable to the nonmoving party
only if there is a “genuine” dispute as to those facts
51
Notes:
1.
2.
Anderson v. Liberty Lobby: when deciding summary judgment, it is not only reasonable jury would decide, but what a reasonable
jury would decide based on the evidence presented at trial
- Holding: When a party will bear a heightened burden of proof at trial, the court should use that higher standard in scrutinizing
the evidence at the SJ stage.
Matsushita: precursor to Twombly that signals 12(b)(6) issues. If Π is talking about a conspiracy, must show illicit motive.
- In the absence of rational motive to conspire, neither Ds pricing practices, nor conduct in JP market, nor agreements and
distribution suffice to create a “genuine issue for trial.”
- Makes it more difficult for πs resisting summary judgment to prevail and get to trial
- Summary judgment may be granted in even the most complex of lawsuits, including where state of mind is an issue.
H.1. Liberty Lobby sues Anderson for libel. Negligently published false statements.
Rule 12(b)(6) claim: granted because must prove legal malice for libel [premised on assertion of law]
H.2. New claim: “” statements with actual malice caused injury.
Anderson files another 12(b)(6) motion. Not allowed because factual allegations are supported.
Don’t ask if Π can prove factual allegations. Just if they are factual.
Anderson has 2 choices:
1. Argue under Rule 11 (no good faith basis). VERY aggressive – sanctionable.
2. Go to discovery and make a motion for summary judgment at the end.
H.3. Ann sues Ben. Ben moves for summary judgment. Ben can…
1. Submit affirmative evidence against
2. Show absence of evidence for π claims
Burden of proof comes from substantive law.
Preponderance of evidence: 50% or more
Clear convincing – beyond a reasonable doubt
Dismissals
Voluntary dismissal: terminate and pursue somewhere else or later
Dismissal for failure to prosecute: didn’t do anything for a really long time (prejudicial)
Default judgment: judgment because party didn’t show up
52
Trial by Jury: who is entitled to find facts? When can you demand a jury trial on the facts?
-
The judge always finds the law
limited reexamination of jury findings
right to a trial by jury to both parties
Rule 38: Right to a Trial by Jury (p.100)
Rule 38(a): 7th Amendment gives right.
§ Only applies in federal court. State courts have the right to decide if jury trial.
Rule 38(b): Procedural issues of jury trial
§ Π demands it in complaint. If not, ∆ demands it in answer.
§ Right to trial
Rule 38(d): can waive with consent from the other side
Rule 38(c): specify issues.
Fundamental Question: How do we figure out who gets a jury trial? What does/doesn’t it cover by 7th amendment?
“Suits at common law” – what are they?
1. Historical test: what was tried to courts of equity in 1791?
2. Relief based test:
§ Equitable claims/court of equity: no jury trial, judge decides (injunction, restitution, etc.)
§ Legal claims/law: jury trial (compensatory)
**Federal Rules did away with separate courts
Constitutional R2JT
1. Entirely legal claims – R2JT
2. Mixed legal and equitable claims – R2JT on factual issues that overlap UNLESS irreparable damage (very narrow exception)
3. All equitable claims – no R2JT
Except in Ross situation (entitlement to legal claim to get to legal relief)
4. Newly created claims that were not in existence at the time of common law
Look at the relief you would get. Dig deep to see how you will be awarded damages.
§ If it looks like legal – R2JT
§ The more discretion there is, the more likely it will be equitable.
53
BEACON THEATERS V. WESTOVER
p. 990
Facts: Fox trying to control area with first run films. Beacon wanted to compete; thinks it has the right bc of contract. Fox (∆) filed a
complaint for declaratory relief and injunction (equitable relief). Beacon filed an answer against Fox for Sherman antitrust violation
(compulsory counterclaim for damages). Beacon was preparing to bring this suit already.
PH: District Court viewed the issues raised by the complaint for declaratory relief as equitable and held that issues granted jury trial. Court
of Appeals that the question of whether a right to jury trial existed was to be judged by Fox’s complaint as a whole and that it was not an
abuse of discretion for the District Court judge to try the equitable cause first even though this might prevent a full jury trial. ∆ appealed.
SCOTUS reverses.
SEQUENCE ISSUE – EXPANSION OF R2JT
District Court: try the equitable issues first
Existence of competition was a question of fact that needed to be solved.
Beacon wanted the jury to decide on the issue of competition first. If not, it would lose.
Trying the equitable issue first would interfere with the jury trial → judge decides equitable issues
Main Problem: If Fox’s claims are tried first then Beacon’s claim won’t be heard by a jury even though Beacon has a right to trial by jury.
There are both equitable and legal claims with an overlapping factual issue.
If equitable claim is tried first the judge will make a determination on competition and reasonableness (factual overlap) and then
those won’t be able to be tried by a jury for Beacon’s legal claim against Fox.
SCOTUS: reversed lower court. Try the legal issues first.
Do not sacrifice Beacon’s right to a jury trial when we can accommodate it → Jury trial on legal issues first
Just bc there is a procedural device to allow the ∆ to get there first, does not mean you can strip a π of right to jury trial.
Wanted to accommodate both Beacon’s right to a jury trial and preservation of Fox from damages.
Use discretion – acknowledge that some courts can eventually use discretion to use equity first, “but we cannot imagine it”
Fox: argued that they needed to stop Beacon from harassing them
SCOTUS: jury can decide then the judge can act
§ May provide preliminary relief – still preserving issue for the jury
§ Relief of first resort: legal relief.
Only grant injunctions as a last resort and here it is not the last resort. In the meantime, Fox can ask for a temporary injunction.
Rule: In a case involving both legal and equitable claims, where there is an overlapping factual issue, the court will uphold the Constitutional
right to a jury trial. Depart from rule only when there is a threat of irreparable harm
Holding: Where both legal and equitable claims coexist in a single case “only under the most imperative circumstances” can a party’s right
to jury trial be lost through prior determination of equitable claim.
If Π asks for both legal and equitable relief – jury trial is upheld. If legal remedy provide relief, OK. If not, move to equitable. Applies even
if legal relief is only incidental to equitable relief.
Dissent: The Federal Rules were no intended to undermine the basic structure of equity jurisprudence, nor to prevent the trial court from
determining the order in which claims shall be heard. It is true that since ∆’s counterclaim was compulsory under the Rules, by filing it ∆
could not be held to have waived its jury rights. But neither can the counterclaim be held to have transformed the original complaint into an
action at law.
Hypos:
1. Π action asks for both legal and equitable claims to remedy a single wrong.
§ Legal= term of art for type of relief
§ Jury tries the issues of fact.
§ Probably simultaneous jury and judge trials.
2. Π entitled to either legal or equitable issues. Still try the legal issues first (with jury) to get to equitable ones later.
§ Equitable remedies = remedy of last resort
§ Go to equitable remedy – if not
3. Counterclaim for legal and equitable relief.
§ Overlapping issues – whether π or ∆ brings – you have a right to jury
If issues are together → try legal issues first.
If issues are in sequence → bound by the facts determined in the first case
54
DAIRY QUEEN INC. V. WOOD
p. 990
Facts: The owners of the name “Dairy Queen” (πs) sued Dairy Queen (∆), π’s franchisee, in federal District COurt seeking temporary and
permanent injunctions to restrain ∆ from further use of πs tm, in accounting to determine the exact amount of money owed by ∆ and a
judgment for that amount, and an injunction pending accounting to prevent ∆ from collecting any money from Dairy Queen stores in the
territory.
Petitioner: restore our demand for jury trial; Respondent: Accounting is equitable.
**Assuming legal remedy: after Beacon, make argument that this is one of the “irreparable circumstances”
PH: ∆ requested a jury, which the District Court judge denied. The Court of Appeals affirmed. ∆ contented that since πs sought a money
judgment, πs action was at law and ∆ must be given its requested jury trial. Πs contended that their claim was purely equitable since it was
framed in terms of an accounting rather than as an action for debt or damages and that any included legal claim was merely incidental to the
equitable issues.
Π argument: Accounting is equitable relief
Artful pleading → don’t manufacture the deprivation of right to jury trial
Is this really equitable relief? How do you figure it out?
o Must be so complex that jury cannot entangle it for a legal remedy to be inadequate.
Ct: Not in the case here. Can instruct the jury/get experts/get masters of evidence.
o Special master sits in the deciding room with the jury. Not in open court. Basically guides the jury to what is appropriate.
Judge guides them bc she picks the master.
Ct: even in this limited inroad on right to jury trial, should only be made in certain circumstances.
∆ argument: nothing legal here, all equitable, no factual issue relevant to a legal issue, maybe “imperative circumstances”
Holding:
a.
b.
A party does not lose its 7th amendment right to trial by jury in fed. ct. when the legal issues are incidental to the equitable
issues.
The framing of an issue in equitable terms does not make it equitable in nature.
Reasoning:
1. Beacon established the rule that, where both legal and equitable claims coexist in a single case “only under the most imperative
circumstances” can a party’s right to jury trial be lost through prior determination of equitable claim. A claim for a money judgment
is a claim wholly legal in its nature, however the complaint is construed.
2. IF a legal issue exists in the instant case, the court must afford D a jury trial, even if such issue is merely incidental to existing equitable
issues. Although P has framed its complaint in equitable terms of an “accounting”, the part of its claim demanding money judgment
is legal in and nature and entitles D to a jury trial.
Takeaways:
1. Where you have mixed request for relief, even if the legal remedy is minor → R2JT
2. Disregard how the issues are categorized by parties
3. Jury confusion may sometimes be a reason to find legal remedy is inadequate → can try to stop by appointed special master
4. Will not allow right or no right to a jury by use of artful pleading
** Historical Test becoming less and less relevant.
ROSS V BERNHARD
p. 999
Facts: Π Shareholders brought a derivative suit in federal court alleging excessive brokerage fees from the corporation. Πs demanded a jury
trial on the corporation’s claims.
PH: District Court held that shareholder's right to a jury on his corporation’s cause of action was to be judged as if the corporation were
itself the π. Court of Appeals reversed, holding that a derivative action was entirely equitable in nature, and no jury was available to try any
part of it. SCOTUS reversed.
Issue: Does the 7th amendment guarantee the right to a jury trial in shareholders’ derivative actions?
Holding: The right to a jury trial attaches to those issues in derivative actions as to which the corporation, if it had been suing in its own
right, would have been entitled to jury.
55
Two elements to shareholder derivative suit (traditionally equitable claim)
1. Show merits of corporation’s claim and corporation failed to pursue it
2. Claimant must gave a right to sue on behalf of the corporation
Why is this different?
If corporation had brought it, it would’ve been a claim for legal relief [excessive brokerage fees] and would’ve had R2JT
I have right jury trial on the “heart of the derivative claim”, not on whether I can sue on behalf of the corporation
Imagine what the claim would’ve looked like at the time it should’ve been brought. R2JT ONLY on this claim.
Dissent: Does historical test matter? Can break any claims down like this!
CURTIS V. LOETHER
p. 999
Facts: Π, a black woman, brought this action under §812 of the Civil Rights Act of 1968, claiming that ∆ and others (white) had refused to
rent an apartment to her because of her race in violation of §804(a) of the Act. She sought actual and punitive damages. ∆s made a timely
demand for a jury trial in their answer.
PH: District Court held that a jury trial was neither authorized by the Act nor required by the 7th amendment, and denied the requested
jury. District Court judge tried the case on the merits, found the ∆s had discriminated against π, found no actual damages, awarded π $250 in
punitive damages, and denied πs request for attorneys’ fees and court costs. ∆s appealed, and the Court of Appeals reversed on the jury trial
issue. SCOTUS affirmed.
Holding: The 7th amendment entitles a ∆ in an action for damages in federal courts under §812 of the Civil Rights Act to demand a jury trial.
Problem: claims that the Fair Housing Act didn’t exist in 1791 so there is no historical basis
Ct: not always about the historical test
Must look towards the remedies for relief – does the action look legal or equitable?
There is obviously a legal claim here because the Act puts forth a legal duty. Doesn’t mean every time a statute says you can get $
that you have a right to a jury trial.
Equity is about discretion (i.e. back pay in Title VII claim). Court can find for π and not give back pay.
56
Judgement as a Matter of Law: could a reasonable jury have basis to find for the non-moving party? When can we
take an issue from the jury?
-
Different standards in different jurisdictions for judgement as a matter of law
Rule 50: Judgement as a Matter of Law in a Jury Trial; Related Motion for a New Trial; Conditional Ruling
Filed by…
§ ∆ at the end of π case → ∆ does not think there is enough evidence to support Π claims
§ π at the end of entire case
§ Either party after the jury has returned a verdict
Rule 50(a): Judgement as a Matter of Law
Permits the judge, after witnesses have testified and evidence has been presented, to withhold the case from the jury and instead
to enter judgment as a matter of law if the facts are sufficiently clear to require a particular result under the governing law.
This motion can be made before ∆ has given any evidence – made at any time before the case goes to the jury
Almost never prevail on a Rule 50(a) motion.
If one doesn’t move for a Rule 50(a) motion → right is waived
§ Malpractice to not make this motion
Rule 50(b): Renewing the motion after trial; alternative motion for a new trial
Authorizes a similar procedure for cases that have been submitted to the jury once the jurors have already received the verdict
Judge can grant, deny or move for a new trial
If court doesn’t grant a 50(a) motion, imagine that the court is reserving the issue, subject to being submitted to the jury
Basically deferring consideration → not treating it as if the court is denying the motion, just postponing it
Rule 50(e): Appeals Court must find whether a new trial is appropriate. Non-moving party for Rule 50 makes this motion.
Argument: Given the facts that have been adduced at this point in time, no reasonable juror could rule against the moving party.
H.1. ∆ presents evidence. Goes to the jury. Jury finds for π.
Π can filed 50(b) motion, essentially renewing the 50(a) motion.
Where the action is
∆ makes the same argument as before – no real jury could have found against my client
Judge can either order a new trial or judgment as a matter of law for ∆
If ∆ fails to make a 50(a) motion, it is waived. Cannot do a 50(b) motion later because it is a renewal of the 50(a) motion.
Notes:
-
-
When can we take an issue from the jury? If Π has not provided enough evidence, ∆ can move for judgment as a MoL under 50(a).
Difference between Rule 50 motion and Summary judgment: only have paper record when you move for summary judgment but
in a Rule 50 motion you have seen live motions.
It is not a judge’s job to determine credibility of a witness or weigh evidence during a judgment as a matter of law. Judge can only
reverse a jury verdict when it believes a reasonable jury would never find for that party
Why have a Rule 50(a) motion when the judge will never grant it? Why contemplate different conclusions at different stages?
o Evidence is the same at both stages
o Save themselves the trouble of having to decide – judge thinks weak, jury may affirm
§ If judge grants 50(a), π appeals. Court of Appeals disagrees and remanded for new trial. Waste of time! New jury
and both parties have to redo the entire case.
§ Didn’t grant 50(a) even though he wanted to – grant 50(b). π appeals, jury agrees. Court of Appeals Agrees. Still
has a jury verdict to fall on!
o Constitutionally required – if there was only a 50(b) motion, would be re-examining the jury’s verdict according to the 7th
Amendment, which is unconstitutional.
th
7 Amendment Issue: issue with the prohibition of reexamination of facts to a jury
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GALLOWAY V. UNITED STATES
p. 1055
Facts: Π claimed that his past involvement in the military caused his mental insanity. Sued the government.
PH: District Court granted the government’s motion for a directed verdict and held for the government. Cited Π lack of sufficient evidence
to prove his claim. Π appealed, stating his 7th Amendment R2JT was denied. Affirmed. Motion for directed verdict for government upheld.
Rule: Directed verdicts do not deprive litigants of their 7th Amendment R2JT.
Reasoning: History and precedent support the conclusion that the 7th Amendment was designed to preserve a jury trial in instances of the
most fundamental elements. Here, speculation could not substitute for probative facts. It was Π’s burden to show by nature of the claim that
he suffered from continuing and total disability for nearly 20 years. His inability to show the continuing disability, as per the statute, left his
claim vague and incomplete and therefore, properly subjected to a directed verdict.
NEELY V. MARTIN K EBY CONSTRUCTION
p. 1059
Facts: Π brought a wrongful death action against ∆. At close of π case and again at the close of all evidence, ∆ unsuccessfully moved for a
directed verdict.
PH: Jury returned verdict for Π and trial judge entered judgment for Π after denying ∆ 50(b) motion for a new trial. Court of Appeals found
the evidence insufficient to establish negligence or proximate cause, and reversed district court ruling on ∆ Rule 50(b) motion.
Issue: Whether the Court of Appeals, after reversing the denial of a ∆s 50(b) motion, may order dismissal or direct entry of judgment for ∆.
Holding: There is no constitutional bar to an appeals court granting judgment notwithstanding the verdict.
Reasoning: Rule 50(e) makes express and adequate provision for the opportunity to present his grounds for a new trial in the event his verdict
is set aside by the ct of app. Appellate Court has power to direct judgment for ∆ when π has won and ∆ filed 50(a) and 50(b) motion. On
appeal, if Π did not move for 50(e) a new trial and Appellate Court directs judgment for ∆ then it’s okay (not fair to Π)
DENMAN V. SPAIN
p. 1061
Facts: Π sued ∆ estate for injuries sustained due to ∆’s negligent driving in car accident. Π was a 7 year old witness who was in the car. Π
contends that the evidence was sufficient to make an issue for the jury. 11 photos of ∆ damaged car, 13 of π’s, two men testified who drove
in the same direction of ∆ but didn’t see the actual collision occur.
Π argument: ˚ was driving negligently at point before accident. Asking the jury to infer that the action was caused by ∆ negligence.
Here’s the evidence, assume it was negligence.
∆ argument: for the accident to occur, someone had to go out of the lane they were driving in. ∆ was in his lane when the witness
saw. Just because driver was negligent before, it doesn’t mean he was at that time.
PH: Verdict and judgment for π. On motion by ∆, a judgment notwithstanding verdict was sustained and entered. Π appealed. Affirmed.
Court reversed because the verdict was based on speculation – not sufficient. Π did not give a link between negligence at first point
and the injury/accident.
Holding: No sound or reasonable basis upon which a jury or this court can say that Π met burden to prove by a preponderance of evidence,
not only that ∆ was guilty of negligence but that negligence was the proximate cause or contributed to the collision and consequent damage.
A finding or JNOV is correct in cases where the original jury verdict is based on speculative facts.
Reasoning: Conclusions could be classed as possible and this court has many times held that verdicts cannot be based on possibilities.
KIRCHER V. ATCHISON, TOPEKA & SANTA FE RY. CO
p. 1064
Facts: Π’s left hand severed by being run over by train.
Π says he was an invitee, stepped in a hole and tripped 13 feet to the other side of the rack where he landed and hand was run over.
∆ says he was a trespasser on the other side and drunk trying to take the train.
Issue: Was π on side of track as a trespasser or other side as invitee? (dependent upon side of the track he was on prior to the incident)
Holding: It cannot be held as a matter of law that π version was such as to contravene the laws of nature, or as to render the jury’s acceptance
of it unreasonable.
Π testimony was not enough for the jury to infer for π.
Different from Denman because there is actual testimony from the P
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REEVES V. SANDERSON
p. 1065
Facts: Π sued ∆ for firing him because of his age.
PH: District Court submitted the case to the jury – found for Π. Court of Appeals reversed saying evidence alone was insufficient to sustain
the jury’s finding of liability – just because they did not find ∆ evidence to be credible doesn’t mean they must find for Π.
Both met initial burden and π responded with evidence causing doubt in ∆ explanation.
Holding: Π can get to a jury with evidence discrediting ∆ and a prima facie case.
Burden of Production vs. Burden of Persuasion
Production: just produce evidence. Do not need to persuade that you are right. If you don’t provide evidence, problem (directed
verdict against)
Persuasion: persuade jury that you’re right and your version of the facts is true
Evidence Court Should Look At in a 50(b) Motion:
1. Draw all reasonable inferences in favor of the non-moving party
2. Don’t make weigh the evidence or make credibility determinations. to the extent that there is evidence.
Only view evidence that is not contradicted and unimpeached; disinterested witnesses can be used
Federal standard: only grand JNOV when no credible evidence
Jury is not required to believe; they can disregard it.
The federal rule is that the court should “review the record as a whole,” but “it must disregard all evidence favorable to the moving party
that the jury is not required to believe”.
Framework for Discrimination Cases under Federal Statute
1. Brings forth prima facie (Π burden)
a. Member of protected class
b. Qualified for position
c. Did not get it; experienced adverse employment action
d. Circumstances suggest inference of discrimination (usually evidence of person not subjected to it/of a different class)
2. Shifts burden of production to employer. Must show legal, non-discriminatory reason for adverse employment action
** Burden of Persuasion by preponderance on Π throughout
In this case: Π made prima facie case, ∆ met burden (shotty record keeping). Π said that wasn’t true. If jury doesn’t believe ∆, maybe ∆ lied,
maybe covering up real reason, maybe actually discriminated.
59
Granting a New Trial:
Rule 59: New Trial; Altering or Amending a Judgment
Rule 59(a): In general
1. Grounds for a New Trial: the court may, on motion, grant a new trial on all or some of the issues—and to any party—as follows:
a. after a jury trial, for any reason for which a new trial has heretofore been grantedin an action at law in federal court; or
2. After a nonjury trial, for any reason, for which a rehearing has heretofore been granted in a suit in equity in federal court.Further
Action After a Nonjury Trial. After a nonjury trial, the court may on motion for a new trial, open the judgment if one has been
entered, take additional testimony, amend findings of fact, and conclusions of law or make new ones, and direct the entry of a new
judgment.
Rule 59(b): Time to File a Motion for a New Trial. No later than 28 days after judgment.
Rule 59(c): Time to Serve Affidavits. When a motion for a new trial is based on affidavits, they must be filed with the motion. The opposing
party has 14 days after being served to file opposing affidavits. The court may permit reply affidavits.
Rule 59(d): New Trial on the Court’s Initiative or Reasons Not in the Motion. No later than 28 days after entry of judgment, the court on its
own, may order a new trial for any reason that would justify granting one on a party’s motion. After giving the parties notice and opportunity
to be heard, the court may grant a timely motion for a new trial for a reason not stated in the motion. The court must specify the reason in
its order.
Rule 59(e): Motion to Alter or Amend a Judgment. A motion to alter or amend a judgment must be filed no later than 28 days after the entry
of judgment.
Remittur: If an award of damages is deemed excessive, a court may order a new trial or in the alternative, may condition its refusal to grant
a new trial on the verdict winner’s acceptance of a reduction in the verdict.
judge usually says either take remitter or new trial
“Shocking the conscience standard”: Court weighs the evidence and makes an independent determination of excessiveness, must like the
process for determining whether the verdict goes against the clear weight of the evidence.
Damages so out of control must be based on passion/prejudice/
Reasons for Granting a New Trial
1. Incoherent jury → something went wrong in the jury room
2. District Court error → jury decided on erred legal information
3. Verdict against greater weight of the evidence
4. Jury Disregarding Law
Decision to grant motion for new trial = almost all power lies in the trial court for granting a new trial
New Trial Issue. Even though there may be evidence against judgment as a matter of law, judge can grant new trial if the verdict is
1. Against the clear weight of evidence
2. Based upon false evidence
3. Will result in the miscarriage of justice
** more lenient standard because it prevents the arbitrariness of a jury trial
Abuse of Discretion: Very deferential. Possible in…
1. Venue – abuse of transfer
2. Amendments to pleading
3. Discovery
No deference for judgment as matter of law
- When district court judge looks – legal issue for which no genuine issue of legal fact
- Trial court does not weight credibility. Evidence in favor of the nonmoving party
- Appeals court: just has to look at transcript
- Granting new trial weighs judge’s perspective of the trial
60
Standards (p.1096). General idea that courts are deferential; different judicial system has different levels of deference.
1. Ginsburg v. Williams (MN): “interest of justice” is arbitrary and too broad.
To permit granting new judgment “in the interests of justice” would invite an arbitrary exercise of power over which appellate
review is not now available.
Concerned with granting judges too much discretion
2. Coppo v. Van Weirengen (WA): “substantial justice has not been done”
Illustrates that Courts can favor the discretion of judges to award new trials on the grounds of insufficient justice bc judge
heard evidence first hand
One reason to grant a new trial is because the jury’s verdict doesn’t make sense
MAGNANI V. TROGI
p. 1097
Facts: Π brought two cases of action against ∆. A single form verdict was submitted by the court to the jury without objection from either
party. Didn’t distribute the damages – problem of effectuating the jury’s verdict.
PH: Jury found for π. Trial judge concluded that the verdict must be set aside and a new trial ordered as to both the liability and damage
aspects of the case. Allowed new trial.
Issue: Did trial judge abuse discretion in granting a new trial?
Problem: general verdict form
Holding: No.
Reasoning: Because of a single form verdict, the jury’s determination of liability and damages on each of the 2 causes of action was not
made known.
Dissent: A judge is not empowered to set aside a verdict in any case simply because he does not agree with it. D’s failure to object to the
forms at the proper time as well as his later failure to show that he was in fact prejudiced compels me in the instant case to find that the trial
courts finding was erroneous and D’s motion for a new trial should have been denied.
ROBB V. JOHN C HICKEY INC.
p. 1099
Facts: Two issues presented in pleadings: negligence of ∆s and contributory negligence of Π’s decedent. Cpntributory negligence was an
absolute defense in the jurisdiction.
PH: Jury found negligence on both parties, ∆ more negligent that π and awarded P $2k. Π motioned to set aside the verdict. ∆ moved to
mould verdict into one in favor of the ∆ and against Πs.
Holding: Denial of ∆’s motion to mold and dispositive of the Π rule. Latter made absolute and new trial granted.
Reasoning: Verdict as a whole is contradictory, inconsistent and ambiguous. Jury could have either not understood, compromises, or just
didn’t like absolute contributory negligence. Incoherent verdicts put this in the judge’s face and give her the ability to rectify it with a new
trial. Problem: special verdict form
H.1. Find ∆ negligent. Π not negligent. $0 in damages. Π moves for new trial.
∆: Maybe you didn’t prove a case for damage
Π: We proved damages. Jury may be (1) compromising, (b) coercion, (c) discrimination against π
Kramer v. Kister
Criminal case, the jury agreed to a sealed verdict and separated. When the verdict was opened the next morning, one juror
dissented; the jury was sent out again and returned shortly with the same verdict, which was entered.
Jury discharged and cannot be brought back to mistrial
When juror dissents from a sealed verdict, there is a necessary choice of evils – a mistrial, or a verdict finally delivered under
circumstances that justly subject it to suspicion of coercion or improper influences.
Only same way out of such a situation is to treat it as a mistrial, and discharge the jury
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DUK V. MGM GRAND HOTEL
p. 1097
Facts: Π sues for detention by security guards.
PH: First Jury rules that π was 65% negligent. Instructed that if π was 50% negligent, stop. Awarded π 3.3 million. District Court resubmits
the case to the jury. Deliberated for 20 minutes; Π = 49% negligent. Awards same amount. MGM moved for a new trial on the basis of
inconsistent verdicts.
Holding: Reinstate the second verdict and entry of judgment for Π. It is possible to explain inconsistency in a way that comports with the
law. District Court’s decision to disregard the second verdict and order a new trial was an abuse of discretion.
Must look at the second verdict on its own. It is not incoherent on its own. Ignore the first verdict because it was proper to submit
it because it was incoherent. There is definitely a compromise, but can only go so far.
AETNA V. YEATTS
p. 1097
Facts: Aetna claimed that Yeatts performed an illegal abortion. Π moved for judgment as a matter of law and new trial
Aetna not entitled to judgment as a matter of law. Why?
∆ testified; Made motion after the verdict – need it before
-
Constitutional issue: would violate the 7th amendment – even if inclined to consider it, a reasonable jury would have sided with
Yeatts because of the evidence.
-
Side note: Granting or refusing a new trial is a matter within the discretion of the trial judge. Decision is not renewable unless a very
exception circumstance.
Rule: Judge has power to grant new trial when judgement is contrary to the clear weight of the evidence, or is based upon false evidence.
Marsh v. Illinois (p.1115)
Trial court applied wrong standards for a motion for a new trial
Trial court granted judgement as MoL (JNOV) when they should have granted motion for new trial.
Appeals Court: do not agree that JNOV was justified. Wrong law, send back to apply the right standard.
Reasoning: Evidence of the appellant (not very explicit for positive) which if believed might authorize a jury to conclude he was
hurt in the manner he claims. Not JNOV bc the trial judge doesn’t believe it, because the appellants own contradictions and conduct
and of opposing evidence which seem to overwhelm it.
H1. Π suing ∆ goes to trial. Verdict for ∆. Π motion for new trial granted. What can ∆ do?
Does not appeal GM4NT
∆ win – no appeal (you won)
π win – can appeal → problem: looks like verdict was against the weight of the evidence and the trial judge got it right
In Re Greene (p.1114)
hard for appeals court to say that the trial judge got it wrong if there is evidence on both sides
Takeaways: huge amount of discretion; parties usually settle
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Rule 60: Relief from Judgment or Order → way to reopen case without appealing
Examples of Rule 60 Scenarios
1. Clerical Mistakes [60(a)]
∆ can make offer of judgment under Rule 68
o Settlement but “make a judgment against me for this amount”
Π declines Rule 60, goes to trial, gets less money than expected and owes ∆
Rare
2. Excusable Neglect [60(b)(1)]
Trial date set. Attorney confuses the trial date and fails to show up. ∆ dismisses case.
Generally limited to negligence (not gross or reckless).
Look at prejudice to both sides and the time taken to realize the mistake
3. 60(b)(1-3) in combination with 60(c)
no more than a year after entry of judgement
Tricky: when new facts are gruounds for relief. [Patrick v. Sedwick]
Must relate to facts in existence at time of trial
New law is not grounds for relief (sad but finality is important)
Results in similarly situated people being treated differently over time
Briones v. Riviera Hotel & Casino (p. 1125)
Four factors to consider in deciding if neglect was “excusable”
a. danger of prejudice to the opposing parties
b. length of delay and potential impact on judicial proceedings
c. reason for the delay
d. whether moving party acted in good faith
cases in which relief is granted on grounds of excusable neglect are rare and tend to involve situations in which a party was prevented
from obtaining any trial whatsoever, such as default judgment
Patrick v. Sedwick (p.1127)
A motion for a new trial on the grounds of newly discovered evidence must meet following requirements before it can be granted:
e. must be such as would change result of a new trial
f. must have been discovered since trial
g. must be of such a nature that could not have been discovered before the trial by due diligence.
h. must be material
i. must not be merely cumulative or impeaching
also established that for any evidence to come within category of “newly discovered” such evidence must relate to facts which were
in existence at time of trial.
ACLU v. Department of Defense (p.1128)
newly discovered evidence is of facts existing at time of prior decision
moving party is excusably ignorant of facts despite due diligence to learn about them 3. newly discovered evidence is admissible
and effective to change the result of the former ruling
newly discovered evidence is not merely cumulative of evidence already provided
*to prevail under Rule 60(b)(6) must show asserted grounds for relief are other than this recognized in clauses 1-5 of Rule 60 in
addition to showing extraordinary circumstances to justify relief
63
Provisional Remedies
Rule 64: allows court to rely on state law remedies
until violate Due Process
rare, permitted under circumstances, but the presumption is that there must be some hearing before deprivation
Methods of Securing Judgment
1. Attachment. Jurisdictional tool for securing judgment.
Show more than a mere possibility that assets will be deposed in some way
2. Preliminary Injunctions [Rule 65]
Rule 65 does not guide us. SCOTUS four part test in Winter v. Natural Resources Defense Council
Balance of Equity: fairness, ∆ harm is not greater than Π, hardship
o Acknowledges the costs and benefits on both sides
Extraordinary form of relief – Π must make a great showing.
Test: For preliminary injunction, Π must prove…
1. Likely to succeed on the merits [higher standard than 12(b)(6)]
2. likely to suffer irreparable harm in the absence of preliminary relief
3. balance of equity tips in her favor
4. injunction is in the public interest
How does the District Courtr make decision for preliminary injunctions?
Rule 65(a)(2): hearing → will probably be witnesses, experts, testimony, documents, etc.
Pleadings do not establish facts
Hearing on the preliminary injunction can very well be the whole case – prep!
o If the judge decides not to grant the preliminary injunction, theoretically can grant the injunction at the end of the case.
§ Cognitive leaning against – prejudged the case because Π asked to
Risky for π who wants the permanent injunctive relief
Put your best foot forward at an early stage of litigation
Kinds of cases typically used: restrictions on reproductive freedom, conditions of confinement, whenever π wants to bring an
immediate end to ∆’s ongoing activity
Basically asks to prejudge the entire case
Standard of review – abuse of discretion standard
Temporary Restraining Orders: immediately seize and stop practice without notice
Narrower, more extreme version of preliminary injunctions
Louis Vuitton counterfeit bags case → if no TRO, could possibly get rid of all evidence
Emergency prison medical care – asking for court to compel action
Affirmative – if maintaining the status quo, bad behavior will continue to occur
64
Appealability: appellate jurisdiction of the Court of Appeals
Landscape of Appealable Decisions
1. Final Judgements [§1291]
2. Rule 54(b)
3. §1292
4. Collateral Orders
§1291: need a final judgment (nothing left for trial court to do)
Important for final judgment rule because of judicial economy and efficiency
o Reduces the number of appeals
o Sometimes wrong rulings are okay – trial court can correct
Concerns about number of appeals, resources, efficiency
Rule 54(b): Judgment on Multiple Claims or Involving Multiple Parties
Principle of Federal: prevent the risk of wrongs affecting trial (will know the entire party’s strategy)
1. Reduce the number of Appeals
2. Reduce Delay
Subject Matter Jurisdiction
So important that no matter when it is raised, it must be addressed (vertical federalism concerns)
o Affects the entire trial
o Need a valid judgment on it
Subject matter jurisdiction and appeals jdxn are different but still have the authority to question jurisdiction at any point
Subject matter jurisdiction and appealability each deal with an issue of allocation of power (albeit different allocations)
§ Question of Power= subject matter jurisdiction
§ Question of Timing = appealability
Collateral Orders
Requirements for Collateral Order Appeal
1. Does it conclusively determine the disputed question?
2. Does it resolve an important issue completely separate from the merits of the action?
3. Would it effectively be unreviewable on appeal from final judgment?
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LIBERTY MUTUAL INSURANCE CO. V. WETZEL (1976)
Facts: Claimed that employee insurance benefits and maternity leave regulations discriminated against women in violation of Title VII of
the Civil Rights Act of 1964.
Procedural History: Π brought suit against ∆ in the United States District Court for the Western District of Pennsylvania. Wetzel requested
injunctive relief ordering Liberty to cease its discriminatory practices and establish non-discriminatory practices and damages including back
pay and exemplary damages. The district court found for Wetzel but granted none of the requested relief. Liberty appealed to the court of
appeals, which affirmed the district court’s judgment. SCOTUS said Appeals Court did not have the jurisdiction.
Holding: Appeals to courts must be procedurally and substantively valid.
Reasoning: Rule 54(b) applies to multiple claims actions. This was a single claim with multiple requests for relief. Under final judgment
rule, appeals in a suit where at least 1 aspect of a claim remains unresolved by the district court are interlocutory and not ripe for appeal.
Notes:
-
Says what it takes to be final
Liability ruling, not relief
Issue was raised sua sponte – neither party raised it
Rule 54(b) didn’t work → Rule is for multiple claims, this was a single claim with multiple possible recoveries
Departures from the Final Judgment Rule
In the context of Rule 54(b)
Before the Federal Rules, technical rules about what to file together. Federal Rules came in and combined law and equity.
o Pre-1938: single judicial unit had to be disposed of and waited til all were resolved to appeal
Current 54(b) [p.21]: if multiple claims or parties, court enters final judgment as to one or more claims but not all if the court
determines that there is no just reason for delay
o More discretion → not tied to all claims
o Unlinks claims and counterclaims
o If District Court exercises discretion, has to express its view that no just reason for delay.
§ Better for the litigant – knows when to appeal
Original 54(b) issue: was that it must determine if final judgment to see if the right to appeal exists.
No express determination of undue delay
If they didn’t figure it out in time, lose the right to appeal
Departures from Final Judgment Rule: detail the level of review we give to the District Court on 54(b)
1. Sears Robuck & Co v. Mackey (p.1165): brought suit for damages under Sherman Antitrust Act (I and II) and common law for
unlawfully inducing breach of contract (III), unfair competition and patent infringement (IV). Court dismissed counts I and II.
Rule 54(b) provides a “practical means of permitting an appeal to be taken from one or more final decisions on individual
claims, in multiple claims actions, without waiting for final decisions to be rendered on all the claims in the case”
To know if separate claims and finality of them
When reviewing District Court – use of discretion to figure out if delayed appeal is not in the interest of justice. (immediate
appeal is)
2. Metal Process Co. v. United Engineering & Foundry Co.: appeal by ∆ was appropriate under §1291 and 54(b) even though a
counterclaim arising out of the same transaction had not yet been decided
Just because counterclaim in case is not adjudicated doesn’t mean you can’t make a 54(b) claim
3. Curtiss Wright Corp v General Electric Co.: diversity actions seeking damages and reformation with regard to contracts; ∆
counterclaimed.
“mere presence” of a non-frivolous counterclaim doesn’t make 54(b) certification inappropriate; what matters is the
interrelationship.
Two aspects to the proper function of a reviewing court in Rule 54(b) cases
1. Court must scrutinize the district court’s evaluation of factors (interrelationship of claims) to prevent piecemeal
appeals in cases that should be reviewed as single units
2. Discretionary judgment of district court should be given substantial deference (that court is most likely to be
familiar with the case)
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Rule 54(b): gives the court discretion on when to allow departure from
1. Π: two claims against 2 ∆s. Not from the same transaction and occurrences.
Pre-1938: cannot be claimed together. Now they can (but don’t have to be)
By virtue of being able to bring together, it makes sense to wait for both to appeal
2. Related claims
54(b) gives court discretion to make a decision. Once it is resolved, why does the District Court want discretion to appeal?
1. Other is waiting to be resolved
2. Since they are related, one being resolved might help resolve the second (advance efficiency)
3. How much are we worried about delay?
Collateral Orders
1.
Cohen v. Beneficial Industrial Loan Corp.: shareholders derivative suit
Order was appealable because it was a “final disposition of a claimed right which is not an ingredient of the cause of action
and does not require consideration with it.”
Focuses on
1. Has District Court concluded action in particular area?
2. Is the District Court decision just one step in a series of steps to final judgment? If not, it is not a collateral order.
3. Will right to review be gone because it is too late? [qualified immunity]
4. Is decision independent of the merits? If yes, it is more than likely a collateral order.
WILL V. HALLOCK (2006)
PH: Hallock brought suit against the government under the Federal Tort Claims Act (FTCA), claiming negligence on the part of the federal
authorities that seized her property. While that suit was still pending, Hallock filed a separate suit against Will, et al., the individual federal
agents (defendants). The district court dismissed Hallock’s FTCA suit, finding an exception to the waiver of sovereign immunity. The
defendants then moved for judgment in this suit, citing the judgment bar in the FTCA, which stated that any judgment on an FTCA claim
based on sovereign immunity was a complete bar to any action coming about under the same subject matter against the government
employees whose conduct gave rise to the FTCA claim. The district court denied the defendants’ motion, refusing to apply the judgment bar
because the dismissal of Hallock’s FTCA claim was on procedural grounds. The defendants appealed and the court of appeals agreed to hear
the appeal under the collateral order doctrine. SCOTUS
Facts: US customs seized computer equipment from π home under warrant. No charges were brought and equipment was returned, severely
damaged. Π had serious financial loss.
Issue: Did the court of appeals have the jurisdiction to hear the appeal?
Holding: A court of appeals may only review collateral orders if it satisfies the three requirements (see below).
Collateral order doctrine conclusively resolves “claims of right separable from, and collateral to, rights asserted in the action.” The
claims are “too important to be denied review and too independent of the cause itself to require that appellate consideration be
deferred until the whole case is adjudicated.”
Doesn’t conclude litigation
Small class of rulings
Requirements for Collateral Order Appeal
1. Does it conclusively determine the disputed question?
2. Does it resolve an important issue completely separate from the merits of the action?
3. Would it effectively be unreviewable on appeal from final judgment?
Note Cases:
1. Mohawk Industries Inc. v. Carpenter: the Court held that disclosure orders adverse to attorney-client privilege do not qualify for
immediate appeal under collateral order doctrine. Litigants can be sufficiently protected by a post-judgement appeal
a. Richardson-Merrell Inc. v. Koller, Van Cauwenberghe v. Biard, Lauro Lines SRL v Chasser, Digital Equip. Corp. v.
Desktop Direct, Inc., Cunningham v. Hamilton County
2. United States v. Nixon: interlocutory appeal permitted even though there was no contempt.
3. Coopers & Lybrand v Livesay: held that denial of class certification under Rule 23 is not appealable under collateral order doctrine
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Preclusion
1.
2.
Claim Preclusion = res judicata
Bar on litigating claims
Requirements apply even when we know it was wrong; values finality over harshness of knowing decision in C1 was wrong
Concerns: finality, avoiding repetition and consistent judgements
Issue Preclusion = collateral estoppel
bars re-litigation of issues that were actually litigated in a prior action, provided adjudication of those issues = essential to judgment.
Applies in cases with wholly different claim than C1, perhaps with a different party
Same concerns + excessive litigation
Claim Preclusion Requirements: must be satisfied to have a preclusive effect on a subsequent action
1. Judgment in C1 must be valid, final and on the merits
Valid: competent jurisdiction → not valid if the court does not have personal jurisdiction over you
Final: court can do nothing further;
Merits: ruling is on the substance of the claim; not procedural details of the lawsuit
2. C2 must involve the same parties as C1
Both parties must have parties to original action
Can also have been in privity to ∆ in prior suit (interests of one were represented by the other in previous suit)
3. C2 claim must be in same claim as C1
Same claim: transactionally related claims you brought and should have brought
Even if the claims are not identical, they must arise from the same transactions or series of transactions
If claim could have been raised in prior suit but wasn’t, is barred from subsequent suit
*** Must always ask if preclusion bars consideration in C2 from C1
No rule for res judicata → only included as an affirmative defense in Rule 8(c)
Decisions not on the merits: voluntary dismissal, dismissal for lack of subject matter jurisdiction/personal jurisdiction
Defense Preclusion: does not fit into claim or issue preclusion
In federal system, principles of due process don’t usually matter → claims would be compulsory counterclaims
Due Process teaches us what the system would look like without compulsory counterclaims
Two Forms of Defense Preclusion
1. Π in C2 = ∆ in C1
2. Π in C1 wins; losing ∆ sues Π in C2
Issue Preclusion Requirements:
1. Judgment in C1 must be valid, final and on the merits
2. Must be actually litigated → Cromwell v. Sac
Look at trial record, pleadings, decision, post-trial briefs, jury instruction, verdict forms, etc.
If ∆ moves for summary judgment and the court grants – actually litigated
Settlements do not establish anything (not litigated)
Doesn’t have to go to trial to have been actually litigated
3. Same issue
The things litigated in a case
4. Necessarily decided in C1 → Russell v. Place, Rios v. Davis
5. Necessary to judgment in C1
Would a different decision regarding the issue have affected the outcome of the case?
§ If no, then the issue was not necessary.
§ If not clear, then the issue cannot be barred.
Differences from Claim Preclusion
Applies to issues not claims – if issue was litigated in C1, barred
issue had to have been litigated on and decided in C1 in issue preclusion
Only bars claims actually litigated; not claims that could have been litigated
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Necessarily Decided Test:
1. Issues litigated?
2. Issues decided?
3. Issue essential to the judgement?
“Precluded from”: preclusion applies; issue will be taken as true as it was decided in C1
Mutuality: party can only take advantage of issue preclusion in C2 if bound by the decision of C1 (only if party in C1)
-
Non-Mutual Preclusion: requirement for claim preclusion to have same parties, now not necessary for issue preclusion
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RUSH V. CITY OF MAPLE HEIGHTS
p. 1213
C1: Π sues for property damage from accident (Π)
C2: Π sues for personal injury that was a product of the same negligence/accident as in C1
Arguments from each side
Π: the city is precluded from relitigating
∆: C1 final bc res judicata
PH: Π was awarded $100 in municipal court. Brought second action for personal injuries in court of Common Pleas which was granted on
ground that issue of negligence was precluded because municipal court judgment. Awarded $12k. Appeals Court affirmed. Reversed and final
judgment for ∆.
Holding: Lower court’s erred in permitting Π to split her cause of action. It is improper to bring different claims for damages to property
and person, which arose from the same tort.
Court: Π barred from C2 bc she did not bring the claim in the first action
Reasoning: Whether ornate injuries to both persons and property resulting from the same wrongful act are to be treated as injuries to separate
rights or as separate items of damages, a Π may maintain only one action to enforce his rights existing at the time such action is commenced.
No reason to distinguish between injuries to person and damages to the person’s property resulting from a single tort. Π lost personal injury
claim because she didn’t include it in C1.
Want to prevent Rush from splitting claim because of issues of equity and fairness
Rush tried to sucker the city with a low value claim first to establish negligence and then bring C2 using that negligence
Barred from litigating claims that should have been brought, but weren’t.
Other areas that similarly bar claims…
Joinder → different because permissive
Compulsory counterclaims
Supplemental Jurisdiction (CNOF) → just bc something satisfies CNOF does not mean it is precluded
H.1. C1: Π sues ∆ on contract claim. Π wins. C2: ∆ sues Π on antitrust claim in federal court.
Transactionally related, same parties, same claim (contract)
Can only bring an antitrust claim in federal court.
∆ could have forced π to bring to federal court in first case bc of CNOF, but not mandated.
Cannot be barred for bringing a claim where there is no jurisdiction – C1 was a state law claim.
Π choice of forum trumps efficiency when claim preclusion does not infere.
H.2. A, B and C in car accident. C1: Anne sues Ben. C2: Anne sues Carol. Both cases were in federal court.
Transactionally related, Anne could have brought together, but the parties are not the same!!!
Allow Π to pursue claims piecemeal against ∆.
MATTHEWS V. NY RACING ASSOCIATION
p. 1221
C1: Π assaulted by ∆’s private investigators. Brought suit against the three employees (P.I.s) (Π)
C2: Π against the employer (NYRA). ∆ moved for summary judgment on grounds of claim preclusion.
Holding: Π estopped form maintaining action. The claim alleged in this complaint is the same as that in C1. Claim Preclusion operates as a
bar to subsequent suits involving the same parties, or those in privity with them, based on a claim, which has once reached a judgment.
Not the same parties, but the ∆s in C1 were the employees of the ∆ in C2. Same employees in terms of substantive law.
Same facts were basis of liability in each suit.
Look to substantive law to figure out if parties are the same.
The claim is the group of facts limited to a single occurrence or transactions without reference to the legal rights. It is the facts surrounding
the occurrence, not legal theory, which make up the claim.
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FEDERAL DEPT STORES INC.V. MOITIE
p. 1224
C1: Moitie and 7 Πs filed antitrust laws. 12(b)(6) dismissal for failure to allege causal elements (legal issue)
C2: 5 appeal; 2 (including Moitie) refile in the state court. Those that appealed = reversed and remanded. Those in state court dismissed.
By the time Moitie got to the 9th Circuit, the court already knew that C1 was decided wrong.
Holding: Moitie and Brown were precluded. There is no exception for equitable reasons.
The court may have erred, but the decision to dismiss on 12(b)(6) was a valid and final decision on the merits.
Not afforded the preclusive effect just because we know it was wrong because of an appealed case
No exception for the finality of a party’s failure to appeal merely because his rights are interwoven with those of another party
JONES V. MORRIS PLAN BANK OF PLYMOUTH
p. 1225
Facts: Π brought suit for damages when ∆ sold his car. Π defaulted on 2 months payments and ∆ went to court to obtain judgment. Π
defaulted again and ∆ went back to court to collect entire note. ∆ repossessed Π’s car and sold it to collect the money due. Π claimed res
judicata.
Issue: Could ∆ bring action for the 2 payments due on another action for payment of another installment?
Holding: Note and conditional sales contract constituted one contract.
If a single transaction, then breach gives rise to 1 c.of.a . If contract was divisible then gives rise to more than 1 cause of action.
Installments due at once (clause on note). ∆ chose to collect for only 2 installments. Precluded from further collection on note.
To determine whether a demand is single or entire one must identify the facts necessary to maintain the action. If some evidence
supports both actions, there is but one cause of action.
H.1. Joe sues Justin. Justin thinks no jurisdiction. Options?
12(b)(2) or ignore/don’t show up and receive default judgment.
C1: default judgment is final, valid and on the merits.
C2: Joe goes to enforce, but Justin states no jurisdiction.
First case was not a valid judgment if there was no jurisdiction!!!! Basically, C1 was not valid. Court agrees and dismissed.
H.2. (following H.1.) Joe then tries to sue in a place with jurisdiction.
He can do so because now there is personal jurisdiction. Only for on the merits
Do not want a π to be penalized for bringing a case in the wrong jurisdiction. Don’t want them to not be able to adjudicate at all.
Defense Preclusion
First Form of Due Process: Π in C2 = ∆ in C1
1. Mitchell v. Federal Intermediate Credit Bank: π is not allowed to split his cause of action by first using it as a defense on case and as a
claim in another. [BARRED]
C1: bank suing Mitchell for $9,000 loan → Mitchell said bank received 18k in proceeds but did not assert a counterclaim (Π)
C2: Mitchell suing Bank for $9,000 that the bank received as proceeds.
Bank: Mitchell could have asked for it in the first case. Court agreed.
“Cannot use same defense, first as a shield, and then as a sword.”
2. Linderman v. Hillenbrand: [NOT BARRED]
C1: L sold H a machine and sued to recover purchase price. H answered that contract was obtained through fraudulent
representations. Judgement for H. F. Fraud was raised, not damages that flowed.
C2: H sued L to recover damages for fraud, alleging that H incurred great expense in transporting, installing, attempting to operate
and removing machinery. L answered that the action was barred by judgement in C1. Court held for H.
C2 IS OK → Fraud was raised in C1, not damages that flowed.
Second Type: Undermines the Integrity of judicial in C1
1. Rudell v. Comprehensive Accounting:
Agreement between parties for binding arbitration – Comprehensive wins
C2: Rudell brings suit alleging that agreement was fraud
o If so, arbitrations cannot be enforced.
o CT: if you win you undermine C1 without having said a word about it
If all of the facts in C2 are litigated in C1 → BARRED
If you can show not all the facts in C2 were litigated in C1 → NOT BARRED
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CROMWELL V. SACREMENTO
p. 1237
Facts: Π attempted to collect on bonds that had matured and brought suit against ∆.
PH: Trial court found that Π was precluded from bringing a certain issue bc of a similar issue raised Π’s attempt to collect on the bonds in
an earlier action brought on his behalf. Reversed and remanded.
Holding: Π was not estopped form bringing his claim on the bonds and coupons.
Rule: Where a 2nd action between the same parties is based on a different claim or demand, the judgment in the prior action operates as an
estoppel only as to the most matters in issue upon which verdict or judgement was rendered.
Reasoning: There was nothing adjudged in the former action that ∆ cannot prove that would justify the Π being precluded from proving in
this case.
Two potential reasons not litigated:
1. In C1, no one ever litigated whether Cromwell had given value
2. In C1, all that was litigated was whether value was given to other notes, not just ones in C2
RUSSELL V. PLACE
p. 1243
C1: Π v. ∆ patent case – Π won (finds infringement)
C2: Π v. ∆ patent case – Π wanted to preclude ∆ from relitigated issue in C1
∆ argument: C1 want of novelty and public use
Court: no claim preclusion because new injury
Didn’t know which part of the patent was infringed upon
Don’t know which issue the π actually prevailed on – general verdict in C1
Solution: special verdict form
Seminal Case on Necessarily Decided
Holding: D can raise issue of novelty and prior use in the case at bar.
Recovery for infringement of one claim of the patent is not itself conclusive of an infringement of the other claim and there was
no intrinsic evidence offered to removed the uncertainty in the record.
The verdict may have been for an infringement on the 1st claim, 2nd or even both claims.
Where uncertainty exists as to whether a claim has been decided on in a prior case between same parties, the claim in the present case cannot
be precluded unless some evidence is shown that it was decided on.
RIOS V. DAVIS
p. 1246
C1: PDGC v. Davis, joins Rios (contributory negligence) – all three found negligent; no one recovers. Rios never brought a claim.
C2: Rios v. Davis
Davis: jury already decided that Rios was negligent. Preclude Rios from litigatation whether or not he was negligent.
o Same issue, valid, final, and on the merits
No claim preclusion
Rios did not bring any claims in C1
Rios was actually litigated, not necessarily decided
Nothing changes – not essential to the judgment, so it is not precluded
o Rios’ negligence in C1 does not matter in the judgment
o Only Davis negligence in C1 matters
**Important to note that this was state ct → if in fed. court, would not have been able to bring because compulsory counterclaim obligations
Necessarily Decided Test:
4. Issues litigated?
5. Issues decided?
6. Issue essential to the judgement?
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Assume in jdxn where Π must show no negligence and ∆ was bus company where bus is in accident with driver of another car.
H1. C1: Bus Co. v. Driver – gen. verdict for driver; C2: Driver v. Bus Co.
Issues were litigated, issue was decided – don’t know why Driver was negligent
NO ISSUE PRECLUSION (Russ v. Place)
H2. C1: Bus Co. v. Driver – special verdict for driver. Bus Co.= negligent and driver was not; C2: Driver v. Bus Co.
Issue = litigated, decided
Negligence was not essential to judgement! – NO ISSUE PRECLUSION
Solution: stop after finding bus negligent (different special verdict)
For necessarily decided, to determine if issue is essential to the judgment, do a counterfactual.
H3. C1: Bus Co. v. Driver – special verdict for driver. Both negligent. ; C2: Driver v. Bus Co. Can you preclude Bus driver from fighting own
negligence?
Counterfactual: if bus company wasn’t negligent, but the driver was – different outcome!
Can bus company preclude the driver from his own negligence? No – wouldn’t change the outcome.
ISSUE PRECLUSION
Mutuality Hypos:
City hires contractor. Contractor negligent and will reimburse city for it.
H1. C1: Jane v. Contractor – for Jane, contributory negligence. C2: Jane v. City – sued bc negligent in hiring subcontractor. Can Jane rely on
issue preclusion?
NO. Was not a party in C1.
Can rarely use preclusion against someone that is not a party to C1 (Due Process concern)
H2. C1: Jane v. Contractor – Jane loses. C2: Jane sues city for hiring negligent contractor. Can city rely on issue preclusion?
YES. Jane was a party in C1.
Do not allow preclusion under mutuality
Then contractor has to pay city but not because not negligent. City indemnification worthless bc the city wound up having to pay.
BERNHARD V. BANK
p. 1272
C1: Mrs. Sather gave Cook money to deposit in her bank acct. Cook later withdrew the money and used it for his own purposes. Upon
Sather’s death, Π sued Cook for embezzlement. Judgment for Cook on grounds that Sather had given him the money as a gift.
Valid, final judgment on the merits
Issue= litigated, decided and necessarily decided
C2: Bernhard sues Bank – you owe us $ because you let him withdraw the money when you should’ve known of the hoax. Asserted that ∆
illegally allowed Cook to make withdrawals. The bank asserted the first judgment as issue preclusion. Lower courts held for ∆. Affirmed.
∆: Π cannot relitigate the issue that the money was a gift
Issue: Bank of America was not a party to the first action. Should it be permitted to use preclusion?
Holding: A plea of res judicata is not only available where there is privity and mutuality of estoppel (abandoned mutuality requirement)
Court does not require mutuality
just because due process refuses preclusion against the Bank
Mrs. Sather was a party in C1
Problem: Bank of America does not have to do a thing
Non-Mutual Defensive Issue Preclusion: ∆ in C2 is using preclusion to defend part of Π claim
Fits preclusion requirements but parties are not the same
Same Issue? Yes
Valid on the merits? Yes
Necessary? Yes
When stranger asserts defensively a decision in a prior action against a party to the former action:
1. Was the issue decided in both cases identical?
2. Was the adjudication of the issue final and necessary?
3. Was the party against whom the plea is to be asserted a party to the original action?
No reason existed for not allowing ∆ to assert the former action as conclusive. Π was bond to earlier court’s finding,
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Blonder Tongue (p. 1276)
C1: Π’s patent was declared invalid against a different ∆.
C2: Π brought action against a customer of ∆ for patent infringement. ∆ claimed Π has issue precl.
Trial Court ruled against ∆. SCOTUS vacated and remanded.
Holding: Mutuality requirement should be relaxed in patent cases.
Court: different concerns with offensive preclusion
Reasoning: No longer tenable to afford a litigant more than one full and fair opportunity for judicial resolution of the same issue.
o Court have been more willing to permit estoppel against a Π who lost in an earlier suit than Π to use issue preclusion
against ∆ who lost to a diff. Π in a former suit.
o Before issue precl. may be invoked, a patentee P must be permitted to demonstrate, if he can, that he did not have a fair
opportunity procedurally, substantively and evidentially to pursue his claim the first time. Since the patentee enjoys the
presumption of validity, it is unjust to allow a patentee to bring suit against numerous alleged patent infringers who must
each prove, at great expense, that the patent is invalid.
o Mutuality is overruled in cases of defensive use of the doctrine.
PARKLANE HOSIERY V. SHORE
p. 1279
C1: SEC v. Parklane – proxy statement was false/misleading. Rules for SEC
C2: Stockholders class action (same argument)
Π trying to preclude ∆ from litigating on false/misleading claims – if true, only trial for damages
Offensive Non-Mutual Issue Preclusion
Π trying to use issue preclusion to prove its own claims
Party seeking preclusion was not in C1
Ex: Π sues A – wins. Cannot bring suit against B and C and use that win against them.
Why treat offensive and defensive differently?
1. Judicial Economy
Defensive: strong incentive to join all potential ∆s
Offensive: more litigation – multiple Πs now (not multiple ∆s)
o If Π2 → wait and see how C1 goes. Can use that verdict against the ∆ in your case
§ Incentive for Π to sit on the sidelines
2. Unfair to ∆
∆ might not pursue litigation vigorously→ then Πs come in and use against
Forum made harder in C1 for ∆ to litigat ein
Inconsistency of judgment
o Train crash. 25 people sue and lose. 26th wins. Train cannot preclude 26th from litigation bc it was not a party. ∆ cannot use
prior wins. 27th can use OIP.
Court adopts rule
If Π can be easily joined before, application of offensive estoppel is unfair the the ∆, trial judge should not allow O.E.
Very discretionary
This case: litigated fully → could not have easily joined the SEC, not an inconvenient forum, not inconsistent
o ISSUE PRECLUSION
Rule: If different parties and party seeking to use preclusion are not a party against a party, distinguish between offensive and defensive
preclusion.
Offensive: use discretion based on judicial economy and fairness to ∆
Defensive: usually allowed
More restrictive in using NMOIP
Exception:
Generally cannot use of NMOIP against the government
Policy reason: do not want government to litigate everything to the hills
Involved in thousands of cases
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Power to Bind Nonparties: In what narrow circumstances can we bing nonparties to original proceedings?
H1. Asbestos mine in Montana. Mining Co. had evidence of the harmful effects on the town and hid it. People are sick and want to sue.
Make proposition to company: will have a trial for 5 people for damages (at meeting). Whatever they get will be averaged and that is what
everyone else gets. Π6 does not like 100k in damages. Can she sue? Is she precluded?
Π6 was not a party to the original case
She agreed to the original deal by being at the meeting
Preclusion by contract: preclusion of parties in C1 when they have agreed to the terms
o She was at the original agreement
H2. Instead the town got together and made a plaintiff organization (pool money for attorney, etc.). Lawyer started case with Anna: she is a
good π and will recover. She will win and be used as a baseline. Anne did not win. Jury: company did not know about the asbestos and didn’t
fail to warn. [Party to C1 trying to bind nonparty to C1.]
Company: precluded because they were already proven to not have liability in C1
Π2: not precluded by C1 because differnet parties. Π2 did not get a chance to litigate.
Company can further argue to precluded because…
1. Π was adequately represented in C1
Establish by claiming adequate representation. Π2 agreed to not pursue a trial until Anne did. “Laboring or” paid by the same
organization.
If C1 was proxy for my case, but I wasn’t there, must show “something like control” on my part
Unless evidence of agreement between Πs, no preclusion. Let Π litigate on own. Each π has the right to mitigate claims. No forced joinder.
Multiple action cases/many Πs → No preclusion; let each try
TAYLOR V. STURGELL
P.1293
C1: Herrick filed suit in District Court of Wyoming under Freedom of Information Act for documents related to a vintage airplane. Dismissed
bc the FAA refused to release the plans at issue bc they were trade secrets of the company (Fairchild Corporation) that built it.
C2: Taylor filed suit in District Court of DC under Freedom of Information Act for documents related to the plane.
PH: Taylor sued, represented by the same attorney, arguing in addition to claims raised in Herrick’s suit that Fairchild is not able to now use
trade secret protections when it appeared to dispense with them years prior. The district court granted summary judgment to the FAA and
Fairchild, finding that Taylor’s claim was barred by claim preclusion. The United States Court of Appeals for the District of Columbia Circuit
affirmed, finding that Taylor was “virtually represented” by Herrick. Herrick appealed.
Procedural History:
Issue: What is the permissibility and scope of preclusion based on “virtual representation”?
Holding: The doctrine of virtual representation is not a constitutionally approved method of nonparty preclusion.
Reasoning: Virtual representation is not a thing. Litigant is not bound by a judgment to which she was not a party.
There are cases we can bind non-parties to prevent litigation, but few and far between.
Very rare to bind nonparties – only defensive issue preclusion.
Categories of Non-party Exclusion Exceptions
1. A nonparty may agree to be bound by judgment
2. Certain substantive relationships, traditionally referred to by the term privity, may justify preclusion of a nonparty
3. A nonparty may be bound if its interests are represented adequately by a party to the suit, citing as examples class actions and suits
by trustees and guardians
4. A nonparty who has assumed control over a lawsuit may be precluded
5. A nonparty who has colluded to avoided the preclusive effect of judgment by litigating through a proxy may be bound
6. Special statutory schemes, such as bankruptcy, or other suits that are brought “only on behalf of the public at large”
Adequate representation
1. Court uses special procedures to protect the nonparties interests; or
2. An understanding by the concerned parties that the first suit was brought in a representative capacity
1.
Montana v. United States: when nonparties assume control over litigation in which they have a direct financial or pecuniary interest, they
may be precluded from relitigating issues that the earlier suit resolved
“laboring or”
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MARTIN V. WILKS
P. 1289
C1: A group of black firefighters filed a class action lawsuit against the City of Birmingham and the Jefferson County Personnel Board. The
black firefighters alleged that the City had engaged in racially discriminatory hiring and promotion practices in public service jobs in violation
of the Civil Rights Act of 1964. The City entered into a consent decree, which set requirements for hiring and promoting black firefighters,
to settle the suit.
C2: A group of white firefighters then sued the City, arguing that they were denied promotions in favor of less qualified black firefighters
because of the racially discriminatory consent decree. The City asserted that the consent decree precluded the plaintiffs’ lawsuit.
PH: City moved to dismiss the reverse discrimination suit, arguing it was an impermissible collateral attack. District Court granted. 11th Circuit
Court of Appeals reversed, holding that π’s claims could not be precluded by the consent decrees because they were not parties to the
previous action. SCOTUS affirmed.
Issue: Can a consent decree preclude a suit brought by those who were not party to the prior action that challenges the validity of the subject
matter of the decree?
Holding: No, attributing a preclusive effect to a failure to intervene is inconsistent with Rules 19 and 24.
Reasoning: A party seeing judgment can’t obligate a person to intervene; must be joined. White firefighters could not be deprived of legal
rights because they weren’t joined and didn’t intervene.
Dissent: White firefighters are not bound to the decree at all; did not deprive them of legal rights.
**Good law on proposition that as a general matter, you can’t force people to join or be precluded
Two Clear Exceptions to Rule of Binding Nonparties:
1. Prior agreement to be bound – essentially binding contract
2. When nonparty is a “laboring or”
H1. A, B, C car crash. C witness in A v. B. C didn’t join. C wants to sue B. B wants issue preclusion. If A won, C would’ve used NMOIP.
C is allowed to! Not boun
Takeaway: Just because you could have joined, does not mean you are bound to or precluded.
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Erie Doctrine: tells us when to apply which law to what issues in diversity cases. State or federal law. Balance of federal and state power.
-
State law: employ state law choice of rules
Federal Courts apply state substantive law in diversity cases
In every case there is a conflict and a reason the parties care
Rules of Decision Act: §1652 (p.219)
Required federal courts to apply “the laws of the several states” as “rules of decision” in common law actions in federal courts
Basically means where there is no contrary federal law, the federal court should apply state law
“laws of several states”: state statutes
Erie: Federal government does not have the power to make general substantive law in diversity cases.
Hanna: Federal government has the power to make procedures in diversity cases.
Rules Enabling Act: statutory limitation on rulemaking power
if it passes the constitutional test, it passes the statutory one
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SWIFT V. TYSON
p. 398
Facts: common law tort action between Swift (ME) and Tyson (NY).
Tyson used fraud as an affirmative defense and wins under NY law.
Under English law recognized as common federal law, Swift wins.
Holding: If no state statutory law, federal court applies the notion of federal common law
Construed the Rules of Decision act to apply only to state statutes and not to state case law, meaning that oral matters not specifically
regulated by local statutes, federal courts were free to adopt and apply “general principles of federal common law.”
After Swift
Within a state, subject to either state or federal court
Whichever rule applies is afte went to court
Before Erie
Problems with Swift in terms of predictability, strategic manipulation [i.e. reincorporate to get diversity], and unintended
consequences [i.e. intended to promote uniformity and had the opposite effect]
Jurisprudential and philosophical shift since Swift
o Legal realist movement – rejected the notion that the law was a pre-political notion that judges “find”. Undermined the
conception of what the law means
o Shift in understanding of “laws of a state” – courts only have the power from a sovereign (state or government). Law is
rooted in sovereign, not just found.
ERIE RR CO. V TOMPKINS
p. 400
Facts: Tomkins was walking along a track owned by Erie Railroad when he was struck and injured by an object extending from the side of
one of RR’s trains. Π (PA) sued ∆ (NY).
Conflict: Is Tompkins a trespasser or an invitee?
Under PA law → no duty to warn of ordinary negligence, just gross negligence. Π considered a trespasser on ∆s property and would
subsequently be denied recovery.
Under federal law → duty to prevent ordinary negligence. Π considered invitee who could recover if ∆ negligent.
In diversity cases, there is no general federal common law → apply states law (does not matter if statutory or judicial source)
Court: overrules Swift
Common law includes judicial decisions – not just statutes
1 & 2 (see below) was not enough to overrule – needed the unconstitutional part (3)
o Harder to change prior interpretation of statute (super stare decisis)
How do we get there?
1. Prove Swift wrong – misconstrued statute
2. Sociopolitical Issues: discrimination in favor of non-citizens against citizens
In state, ∆ cannot remove from that court
Non-citizen has the decision of which rule is better for them and ∆ does not have the power to remove
3. General Federal common law does not exist
Federalism concerns: Federal Court would be exerting power not even Congress gas
o Congress does not have the authority to declare substantive rules of common law applicable in a stat
§ Cannot give the court this power and upset the balance
o Federal courts are under the sovereign of the United States. Cannot exert more power than delegated by the U.S. Power
is limited to no greater than that of the sovereign.
o Quote p. 404: must be sovereign power that makes courts determine the law
Apply substantive law that a state court in the state in which it is sitting in diversity jurisdiction. If federal rule applies, apply it.
Erie: Plain substantive question of law
Not procedural; law about how we are in the world
Federal government does not have the power to make general substantive law in diversity cases.
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GUARANTY TRUST V. NEW YORK
p. 409
Facts: Π brought diversity suit alleging fraud. Substantive fraud law comes from the state.
Conflict: Do we apply state of federal statute of limitations?
State: ∆ will win automatically
Federal: go to court because SoL has not run
Is statute of limitations substantive or procedural?
York test: if application of rule changes the outcome of the case, then it is substantive. It is only accidentally federal because of
diversity. Outcome should not be affected by the fact that parties happen to be from different states/jurisdictions
o Federal court should not hear a claim based on a state-created right that would be otherwise barred form being heard in
state courts by a statute of limitations
Doesn’t apply anymore
In this context SoL is substantive
If outcome determinative, apply state law because it is substantive. Procedural means the manner in which rights are enforced.
Fundamental Issue with York test: basically everything will be substantive
Holding: A statute of limitations can bar a federal court sitting in that state from hearing a case on its merits.
BYRD V. BLUE RIDGE
p. 409
Facts: Π was injured in a fall from a telephone pole while he was working as a lineman for a company which held a construction contract
with ∆. When Π sued ∆ for his injuries, ∆ replied that he was an employee of and would therefore have to accept worker’s comp. benefits
and was barred from suing ∆ in a court of law. Employer= affirmative defense that he was a statutory employee.
Conflict: will judge or jury determine factual question of whether or not Π was a statutory employee?
State: judge
Federal: jury
Holding: A state law rule which provides for a trial by a judge cannot be followed despite the strong federal requirement of trial by jury.
Reasoning: It may well be that the outcome of this case would be substantially affected by whether the issue in question is determined by
judge or by jury, but the outcome is not the only consideration.
Trial by jury = essential characteristic of the federal court system. Federal policy has greater weight than state interest in furthering
its rule. Even under a strict outcome-determinative test, it is not certain that the factual determination in this case would be decided
differently by a jury than by a judge.
Balancing: What is state interest in enforcing this? Bound by state obligations?
Conflict?
Yes
No
Outcome
Determinative?
Not Erie World
Yes
No
Byrd Balancing
Federal Rules
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HANNA V. PLUMER
p. 420
For the first time
Tells us how we are going to apply test differently depending on type of federal law involved
Might not care about the source of state law
We do care about the federal law – from a statute or judges
1. Why do we want the Federal Rules?
So Feds do not need to know 50 state laws
Can have one organized processed by which to assert power
2. Why is it constitutional for Congress to set rules governing procedure?
Congress can establish lower federal courts – delegated this authority
“Necessary and proper” – do whatever is N&P to assert power. They have the power to set the rules (and then delegated it to the
Advisory Committee)
3. How to decide if Congress has transgressed procedural/substantive boundary?
“rationally capable of classification as either”
-
If arguably procedural, it is within the bounds of constitutional power of Congress to use it as procedure. If not, it is outside the
bounds of Congressional authority.
Erie: Federal government does not have the power to make general substantive law in diversity cases.
Hanna: Federal government has the power to make procedures in diversity cases.
Insights from Hanna: (1) FRCP and (2) Relatively Unguided Erie Doctrine
Judge Made Law
Federal Rules of
Civil Procedure
Rationally
Capable/ Arguably
Procedural
Rationally
Capable/
Arguably
Procedural
Yes
Apply FRCP
Yes
No
Outcome
Determinative?
Apply State Law
No
Apply State Law
Yes: Byrd
Balancing
No: Federal Law
Conflict: Rules of Proper Service
State: Π out
Federal: Π moves on with case
If York: outcome determinative, so its out bc state law applies
Hanna: new way of looking at outcome determination
Focus = ex ante (before the fact) → when initiating litigation, is it something that would affect the choice?
O.D.I.L.T.A.E.: outcome determinative in light of the twin aims of Erie
o Twin aims: avoiding forum shopping and inequality
Even if the source is judge made common law, we would conclude not ODILTAE – apply Federal Rule
OD is not over outcome of the case at hand – is this the kind of thing that affects litigants at the outset of a case?
Statute of limitations wouldn’t be in Erie if it wasn’t diversity
When source of law is
1. When rule/statutory made – FRCP test
2. When court made – Relatively Unguided Erie Doctrine Test (judge made law) – Byrd balancing!!!
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Erie Analysis
There is a reason for different methods of FRCP and judge made rules/
o Judges are making general federal common law outside the constitutional powers of the federal government.
§ Deals with judges enforcing the constitutional rules with Necessary & Proper Clause of Congress
Recall: York → SoL may be substantive or procedural (arguably procedural)
o Constitutional power to write a rule governing it.
Erie is not just about constitutionality; it is about the separation of federal and state power
Congress is delegated specific powers, but courts must be more leary
FRCP can displace state law when valid and constitutional
Question: Does the FRCP or statute directly control the issue?
1. Walker v. Armco Steel Corp
Facts: P, a carpenter and resident of OK, was injured on 8/22/1975 when a nail he was pounding shattered and injured his eye.
The nail had been manufactured by D. P filed a complaint in federal court on 8/19/1977, based on diversity jurisdiction. Service
of process on D’s agent was not made until 12/1/1977. On 1/5/1978 D moved to dismiss based on OK’s 2 year SOL. P admitted
that his claim was barred under state law because of the untimely service on D, but argued that Federal Rule 3 should apply. This
rule states that civil action is commenced by filing complaint with the court. Federal courts dismissed the complaint.
Issue: when action commences under statute of limitations
o OK law: when ∆ receives summons → ∆ wants
o Rule 3: on date of filing →Π wants
Π loses: Rule 3 ≠ control – use state law
Holding: Rule 3 does not apply in diversity cases.
o Court will not narrowly construe the Federal Rules
o Tells us this rule is not sufficiently broad enough
o Timing statute for other rules
2. Burling Northern v. Wood:
Example of conflict where you cannot apply both
Personal injury case – ∆ lost
o AL: ∆ with unsuccessful appeal –pay 10% against [must]
o Fed: only frivolous appeals – discretionary/ amount not specified [may]
Court: Rule 38 controls!!
o Cannot adopt both bc AL is mandatory – court said to give discretion
3. Stuart v. Ricoh (p.440): venue transfer
State (AL): cannot enforce forum selection clause
Federal Rules §1404(a): multiple considerations for transfer – including forum selection clause
Conflict: apply forum selection clause?
o May v. may not
Direct collision!
§1404(a) is arguably procedural (more like obviously but wtvr)
shows importance of distinction between general and procedural federal common law
Scalia Dissent: when not sufficient, broad FCRP
o Mode of analysis shifts from Hanna analysis to unguided Erie analysis
o Saying statute does not control, therefore must be from judge made law, therefore Unguided Erie Test
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Source of
Conflict
State Law v.
Federal Judge
Made Rule
State Law v.
FRCP/statute
Yes: may v.
must; may v.
may not
Arguably
Procedural
Yes:
ODILTAE
Yes: Byrd
Balancing
No: State Law
No: Fed Law
No: Apply
State Law
Is Rule/Statute valid
and constitutional?
Arguably procedural?
Rationally capable?
Yes: Fed. Law
No: State Law
GASPERINI V. CENTER FOR HUMANITIES, INC.
p. 446
Facts: Π agreed to supply his photos to ∆ for use in an educational video. ∆ agreed to return originals, but upon completion they couldn’t
find them. ∆: verdict is excessive.
PH: Π sued ∆ in federal court and won $450k. ∆ moved for excessiveness. DC denied motion. Appeals Court concluded the testimony on
industry standard alone was not sufficient to justify a verdict. Set aside verdict and ordered a new trial, unless Π agreed to $100k. SCOTUS
remands case to District Court to test jury’s verdict against 5501(c)’s “deviates materially” standard.
Two Conflicts
1. Standard of excessive jury verdict
- State (NY): deviates from reasonable – ∆ wants
- Fed: Federal Rule 59 “shocks to consciousness” standard – Π wants
2. Standard of Appellate Review
- Federal: Appellate Court cannot reverse unless there was an abuse of discretion
- State (NY): trial court can reverse jury verdict as long as it is consistent with the 7th Amendment.
Holding: Rule 59 does not control. In cases of a conflict between state and federal judge made law, a District Court can try to break up the
state law into components to accommodate as many components of both federal and state law as possible.
Ginsburg Majority:
1. Federal Rule 59 does not control.
- Doesn’t control bc it is too broad and does not give a standard that gives cause of action. The standard is set forth by state law.
- We know the federal standard, but it is not statutory, just common law practice.
2. ODILTAE
- Yes! Erie should preclyde federak recovery that is significantly larger than in state. It will affect the choice of forum [more damages
when following federal and is easier to uphold]
3. Appellate Review and the 7th Amendment Concern
- Byrd analysis
- Worried about federal interest in appellate standard of review bc it is rooted in 7th amendment concerns (strong fed interest)
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Accommodate both without displacing interests!
- Strong state interest in deviation standard
- Strong federal interest in appellate standard of review
- Mirrors Scalia dissent in Ricoh
SHADY GROVE
p. 446
Facts: Π provided medical care to Galvez for injuries suffered in a car accident. As partial payment Galvez assigned π her right to insurance
benefits through ∆. Π tendered a claim for the benefits to D, which under NY law had 30 days to pay claim or deny it. ∆ paid but not on
time and refused to pay statutory interest. P filed diversity action in NY to recover unpaid statutory interest. Sought relief on behalf of itself
and a class of others.
Holding: Rule 23 displaces NY law which would bar class actions from collecting statutory damages.
- Scalia: Rule 23 plain meaning → arguably procedural, so we don’t look at purpose. If not, a risk of not having federal uniformity.
- Stevens: I agree but would look at the purpose. This NY law is just not substantive
- Dissent: look at purpose; NY is substantial
Intersystem Preclusion
-
Based on the knowledge that different judicial systems might have different rules of preclusion
Different court systems may use different rules for preclusion
Choice of law issue may arise when C1 was decided by one court system and C2 arises in another
Basic Rules of Intersystem Preclusion
1. If C1 was decided by a state court, C2 must use the preclusion rules for the state in which C1 was decided.
2. If C1 was decided by a federal court sitting in diversity jdxn , C2 must use the preclusion rules for the state in which C1 was sitting, “no
matter where C2 is being heard, or whether it is being heard in state or federal court.
3. If C1 was decided by a federal court in federal question jurisdiction, C2 must apply federal preclusion rules “no matter where C2 is being
heard, or whether it is being heard in state or federal court.
83