EXAM 1: SUBJECT MATTER JURISDICTION REVIEW
Matt Waters
1. Diversity Jurisdiction in the Federal Courts
a. Intro: Article 3 Section 2 creates federal jurisdiction between citizens of
different states
b. The Framers worried that the state courts would not treat out-of-state defendants
fairly
c. 28 USC § 1332(a) establishes Original Jurisdiction in civil cases where the
controversary is $75,000 or more between:
i. citizens of different States;
ii. citizens of a State and citizens or subjects of a foreign state, except that the
district courts shall not have original jurisdiction under this subsection of
an action between citizens of a State and citizens or subjects of a foreign
state who are lawfully admitted for permanent residence in the United
States and are domiciled in the same State;
iii. citizens of different States and in which citizens or subjects of a foreign
state are additional parties; and
iv. a foreign state, defined in section 1603(a) of this title, as plaintiff and
citizens of a State or of different States.
d. Gordon v. Steele (The Domicile Test) Pg. 44
i. Facts:
1. Plaintiff sues for malpractice against a Pennsylvania hospital, and
she is in college in Idaho now.
2. Def. makes a motion to dismiss due to lack of diversity jurisdiction
ii. Issue:
1. Is there sufficient evidence that plaintiff is a citizen of Idaho under
federal law?
iii. Holding:
1. She is a resident of Idaho since she: a. was in Idaho at the time of
the action and b. she has no intention of returning to Erie and
would like to stay away Indefinitely, establishing domicile in
Idaho.
e. Mas v. Perry (The Complete Diversity Rule) Pg. 52
i. Facts:
1. Plaintiffs are a married couple living in LA, one from France, one
from America, they marry in MS, move back to LA, and they rent
an apartment that has two-way mirrors in bathroom and bedroom,
so they sue the landlord.
2. He argues there is not complete diversity between the parties
ii. Issue:
1. Are BOTH plaintiffs completely diverse and eligible to receive
damages under federal law?
f.
g.
h.
i.
iii. Holding:
1. Her LA residence was for school, and she did not establish an
indefinite domicile there.
2. Mr. Mas was a citizen of France, but a resident of LA, and Mrs.
Mas retained MS and USA citizenship. It did not transfer to that of
her husband (France) after marriage, so the complete diversity of
the suit still remains.
3. Although they didn’t receive the baseline amount for federal suits
in the case, the initial amount in controversary was $100,000.
State Citizenship of Corporations and Entities
i. Statues
1. 28 USC § 1332(c)1: a corporation shall be deemed to be a citizen
of every State and foreign state by which it has been incorporated
and of the State or foreign state where it has its principal place of
business
Hertz Corp v. Friend (Pg. 62)
i. Facts:
1. Plaintiffs sued Hertz for allegedly violating California’s wage and
hour law, Hertz wanted to remove the case to Federal Court, which
plaintiffs protested
2. Defs said that although they did a large amount of business in Cali,
their principle place of business was in New Jersey and to lesser
extent, Oklahoma.
3. District court ruled that since the majority of their business was in
California, they were California citizens
ii. Issue:
1. What is to be considered the principle place of business for a
corporation when determining diversity jurisdiction?
iii. Holding:
1. Hertz PPB is in NJ
2. PPB has developed over the years since businesses may
incorporate in a state with favorable laws and never do business
there. In 1958, corporations could hold citizenship in both places
3. To determine PPB it is best read as referring to the place where a
corp’s officers direct, control, and coordinate the corp’s activities.
a. Place is not a state, but a place within one
4. Nerve center: main headquarters and a single place
5. Emphasis on the simplicity of this rule for policy reasons (68)
Amount in Controversary Requirement
i. Amount in controversary appears to be in good faith, it will generally be
accepted
Diefinthal v. CAB (Pg. 76)
i. Facts:
1. Plaintiffs purchased first class tickets aboard a flight from New
Orleans to Philadelphia on Eastern Airlines. They requested seats
in the smoking section and confirmed that their request was
granted prior to departure. After they boarded the flight, the
Diefenthals were told that the smoking section in first class was
filled and that they would have to sit in a no-smoking area if they
wished to fly first class.
2. The Diefenthals alleged that in informing them that they could not
smoke, the flight attendant treated them "brusquely," causing them
extreme embarrassment, humiliation, and emotional distress. The
district court dismissed the Diefenthals' claims for injunctive relief
against Eastern on the ground that they did not have an implied
private right of action under the Federal Aviation Act. The
Diefenthals appealed the order of dismissal. They also petitioned
for review of a CAB order finding that regulating smoking was
within the scope of its statutory authorization.
ii. Issue:
1. Did the denial of the plaintiff airline passengers' right to smoke
constitute discrimination that allowed the amount required to hear
the case in federal court?"
iii. Holding:
1. The claim had no evidence to meet the amount required, couldn’t
even meet 10,00 dollars. In order to establish jurisdiction there
must be some basis on your claim amount.
j. Aggregating Claims to Meet the Account Requirement (Pg. 82)
i. A single plaintiff may add his claims together to reach the amount, but two
separate plaintiffs may not
ii. If the amount has already been reached by one plaintiff, then a coplaintiff
may hop on the case after the fact
iii. Plaintiffs may not tie two defs together to reach the amount either
iv. EXCEPTION: 28 USC s 1367 [supplemental jurisd stat]; 2nd P may tag
along since the 1st P’s claim meets the amount requirement
v. Indivisible joint interest exception
k. Constitutional Scope of Diversity Jurisdiction Compared to the Statutory
Grant of Diversity
i. Is the case within the Constitutional grant of Art. 3 Sec. 2?
ii. Has Congress passed a statue conveying jurisdiction over the case to
federal court
1. ie patent law
2. Federal Question Jurisdiction
a. Statues
b.
c.
d.
e.
i. 28 USC 1331: The district courts shall have original jurisdiction of all
civil actions arising under the Constitution, laws, or treaties of the United
States.
Louisville & Nashville v. Mottley
i. Facts:
1. Plaintiifs were injured in a train accident, they forbore their suit for
train passes for life, so when a new law is passed banning lifetime
passes, they sue in federal court for specific performance of a
contract under the guise that the suit arises under the Constitution
ii. Issue:
1. Is the plaintiff able to bring this suit under the guise of his defense
arising under the constitution
iii. Holding:
1. The plaintiffs could not just bring the suit in federal court bc they
thought a case may arise under the Con.
2. Suit must arise under a specific law that causes the action
Well pleaded complaint:
i. The federal issue must appear on the face of the complaint, not as an
anticipated defense
1. Mottley was a state contract case that was using a federal law as an
anticipated defense
Holmes Test:
i. Suit arising under the law that creates the cause of action
1. Exceptions: Patent law, plant variety, copyright cases
State Law Claim Involving Substantial Questions of Federal Law: Gunn v
Minton (Pg. 111)
i. Facts:
1. Plaintiff loses his patent claim bc he had no proof it was
experimental use
2. Plaintiff sued his lawyers for malpractice for the loss of a patent
case involving the stealing of a computer program he developed
3. Claimed his lawyers did not bring his a claim of experimental use
so hes suing
ii. Issue:
1. Does this state law claim arise under federal jurisdiction since
it invokes original federal jurisdiction (patent law)
iii. Holding:
1. Federal jurisdiction over a state law claim will lie if a federal issue
is:
a. Necessarily raised
b. Actually disputed
c. Substantial, and
d. Capable of resolution in federal court without disrupting
the federal-state balance approved by Congress
iv. 28 USC 1257 grants the supreme court to review state judgement
f. Removal of Cases from State to Federal Court: Avitts v. Amoco Production
Co. (Pg. 129)
g. 28 USC 1441: Except as otherwise expressly provided by Act of Congress,
any civil action brought in a State court of which the district courts of the
United States have original jurisdiction, may be removed by the defendant or
the defendants, to the district court of the United States for the district and
division embracing the place where such action is pending.
i. Facts:
1. Plaintiff filed in state court to recover damages for property
damages
2. Complaint says he violated state and federal law (doesn’t specify)
3. So D removes under 1441
ii. Issue:
1. Can plaintiff remove case from state court to federal just on
complaint’s mention of federal law?
iii. Holding:
1. Original jurisdiction of subject matter is required
2. whether a case arising under a law of the United States is
removable or not is to be determined by the allegations of the
complaint and that if the case is not then removable it cannot be
made removable by any statement in the petition for removal or in
subsequent pleadings by the defendant.
a. MUST BE ASSERTED IN THE COMPLAINT
3. This does not mean that a plaintiff can avoid federal jurisdiction by
simply artfully pleading a federal cause of action in state law
terms.
EXAM 2: PERSONAL JURISDICTION
1. Evolution of Personal Jurisdiction
a. Pennoyer v. Neff
i. FACTS:
1. Neff hired Mitchell to do some lawyering, neff never pays so he
puts his property up for sale after sheriff seizes the land, public
notice placed in newspaper, Penn. buys it from Mitchell. Neff
comes back to OR and wants to know where his land is
ii. Issue
1. Was he served properly?
iii. Holding
1. No, court rules you cannot exercise PJ over someone who is not in
the forum/is not properly notified
2. Emphasis on the physical presence of the serve
b. International Shoe
i. Facts:
1. Washington sued D for not wanting to contribute to their
unemployment fund. D is a mizzou corporation, w independent
contractors in Wash
ii. Issue
1. Does Washington have PJ over Intl Shoe?
iii. Holding
1. Yes, Intl shoe enjoys benefits of the laws of Wash, and has
minimum contacts within the forum (does not offend fait play and
substantial justice)
2. Contacts must be systematic and continuous
3. 2 types of contact
a. Deliberate contact leads to claim under specific jurisdiction
b. Non-related contact in a state w ongoing contacts general
jurisdiction
2. Specific In Personam Jurisdiction
a. McGee v. Intl Life Insurance
i. Facts
1. P buys an insurance policy in Texas after he dies, P sues for the
payout in Cali and files motion to collect judgement in TX and D
refuses to pay out in Cali, saying they were not subject to their
jurisdiction
2. TX says this is a violation of due process
ii. Issue
1. Is the insurance company subject to Cali jurisdiction when they
don’t really conduct business there?
iii. Holding
1. Yes, he sent his checks from cali, and his address was on file
2. Policy holders would be at a severe disadvantage if they had to
move states to collect money
3. There was a regular systematic business transcation between the
two
a. Substantial communication between the two forums and
parties
b. Worldwide Vollkswagen
i. Facts
1. P buys a car in new York, they are driving to ok, and they get rear
ended and the car catches fire and burns them
2. D is a NY corporation and does zero business in ok
3. OK court rules they have to appear
ii. Issue
1. Can Ok exercise IPJ over a dealer with no contacts in state
iii. Holding
1. No, there were no minimum contacts with OK’
2. Foreseeability is not enough to make them appear in the forum
a. Pandoras box
3. Must purposely avail yourself to the forum state
a. CONDUCT AND CONNECTION
4. 14th Amendment/minimum contacts ensure D doesn’t have to
litigate in a distant/inconvenient forum
c. * Rules for exercising Specific IP Jurisdiction *
i. D must have contacts
ii. Contacts were purposeful or deliberate
iii. P’s claims arose out of those contacts
iv. PJ is reasonable based on a consideration of:
1. Burden on D
2. Interests in the Forum
3. P’s interest in claiming relief
4. Judicial system’s interest in obtaining the most efficient resolution
5. Shared interest of the states in furthering social policy
d. Burger King v. Rudzewicz
i. Facts
1. Man wants to own a burger king franchise
2. He falls behind on payments, P tells him to stop operating
business, sues him in FL P’s incorp state
3. P says no, doesn’t have PJ over him only was trained there
ii. Issue
1. Can D be brought in front of FL court for breach of contract
iii. Holding
1. Yes, the nature of the contract allows it, establishes minimum
contacts
a. Choice of law provision in the contract should be followed
b. Forum selection
2. Prior negotiations and future consquences
3. Purposefully directed activities towards the forum/claim arose out
of such activities
e. Asahi Metal v. Sup Court of CA
i. Facts
1. Ps tire explodes and he crashes motorcycle/sues the distribution
company in japan and us distribution company
2. California’s long arm statue permits anybody coming in that is not
in conflict with the constitution/due process
ii. Issue
1. Can court make foreign company appear that has no purposeful
contact with CA
iii. Holding
1. Awareness of a product reaching a forum through stream of
commerce does not satisfy contacts
a. Purposeful establishment of contacts + stream
2. Must consider
a. Consider the burden
b. Interest of the forum
c. P interest in obtaining relief
d. Most efficient resolution
f. Zippo Rule
i. Conducting activities through interactive website, could be subject to SJ in
a state
ii. Passive website w no interaction no pj
iii. Some interactivity: court takes a close look at website
g. Jackson v. California Newspapers
i. Facts
1. Newspaper in CA, while covering the a convention wrote that bo
Jackson used steroids on their website
2. Jackson sues the newspaper
a. Website had no IL subscribers or interactivity with the
forum state
ii. Issue
1. Does IL have PJ over California newspaper
iii. Holding
1. Mere maintenance of a website is not enough to establish contacts
2. There were no readers in IL nor was anyone from IL interviewed
in the case
3. Not enough interactivity
4. IL had no state interest in the litigation of the case
a. Has everything to do w Jacksons rep in California, not
IL/story wasn’t directed there
3. Other Constitutional Bases for Personal Jurisdiction
a. General in Personam Juris.
i. Differs from specific in that P may sue a D for something that had nothing
to do with Ds in-state contacts
ii. P may sue for any beef they have with D
iii. Must prove a more strict standard of contacts
1. Corps must be “at home in the state” CHART ON 250
b. Damiler AG v. Bauman
i. Facts
1. Some arg. People wanted to sue MBUSA, subsidiary of D for the
role they had in sending troops to squash a civil war, residents are
suing them in California
2. California uses alien tort act, bringing them in under general
jurisdiction
3. MBUSA, sub to D, is incorporated in DE, and makes a lot of sales
in California
ii. Issue
1. Are D’s affilations w MBUSA California significant enough to
bring them into court for this unrelated tort action
iii. Holding
1. No, MBUSA is not an agent of D, only a subsidiary, is also not at
home in California/ agent must be an ALTER EGO
2. MBUSA nor D are at home in California
a. Sales alone (like Hertz) are not enough to declare a PPB or
establish contacts
b. Must be: PPB
c. Incorporation
d. Exceptional circumstances (WWII)
3. AT HOME IS NOT THE SAME AS DOING
BUSINESS/WALMART
c. In Rem/Quasi
i. In personam jurisd: has the power to require D to pay a money judgment
ii. In rem jurisd: can declare the true owner of specific property relative to
everyone in the world
iii. Quasi in rem (2 types): can declare which of the litigants has the better claim to
the property without determining whether the winner is the true owner relative
to everyone else in the world
1. *qir 1: who owns property in between litigants
2. *qir2: property is basis for jurisd; but property is not issue, there is
another issue
d. Burnham v. Supreme Court
i. Facts
1. P gets a divorce for UrecD, Wife leaves for CA w the kids
2. He files the papers and instead files for abandonment, never serves
wife
3. He goes to visit the kids, and get served there w original claims
4. P claims he didn’t have min contacts
ii. Issue
1. Did CA obtain jurisdiction over him?
iii. Holding
1. He was literally present in the state
2. This follows the traditional notion and process of service
a. Follows due process
3. Your reason for being in the state is irrelevant, if youre there and
they get you, you’re under their jurisdiction, enjoying their
protection of laws etc.
4. *not for corporations, just individuals*
e. Consent and Waiver
i. Consent
1. Just not raise the issue, show up in court
2. Filing a claim thereby consenting to any counterclaims that regard
PJ
3. Prior to suit through forum selection clauses/court enforce these
even if PJ did not exist prior to this
ii. Waiver
1. You automatically waive it if you object in a timely manner
through the determined processes
4. Long Arm Statues
a. Bensusan Restaurant Corp v. King
i. Facts
1. Two restaurants called the blue note, the less famous one in
Missouri is older than nyc one
2. Mizz says its not the famous, but you should go check this out
3. NY wants to seek damages for name stealing/ip etc
4. Constiitution allows for PJ in this case
ii. Issue
1. Does NYCs long arm statue apply for PJ?
iii. Holding
1. NY law is keeping them from suing them by the way the law is
written
2. Bazooka from NJ that hits an NYC person is not able to bring a
suit against them bc THE ACT DIDN’T ACTUALLY HAPPEN
IN THE STATE
3. BE AWARE OF THE STATUE IF IT NARROWS THE
CONSTITUTION OR USES THE FULL EXTENT OF THE LAW
5. Constitutional requirement of notice and methods of service
a. * Service: 1) formally asserts the courts authority over D 2) informs D so
they can prepare to appear in court
b. Mullane v. Central Hanover Bank
i. Facts
1. NYC bank gave notice to those who are entitled to a piece of the
trust in the newspaper for 4 weeks, when many beneficiaries would
never have been notified of this
2. Court appoints an attorney for the beneficiaries (Mullane)
ii. Issue
1. Was this an appropriate method of service?
iii. Holding
1. The method of service must be reasonably calculated
a. Currently the have no ability to sue the bank for
mismanagement of funds
b. NYC law must comply with 14th amendment
2. Acceptable forms of service that pass constitutional muster
a. In hand service by sheriff
b. In hand service by plaintiff
c. Mailing home address by certified mail
d. Mailing home address by 1st class mail
e. In case no other option publish in the newspaper
3. Suitable age and discretion
FINAL: VENUE, SUPPLEMENTAL JURISDICTION & PRECLUSION
1. Basic Venue: Statuatroy Allocation Within a Court System
a. Venue: Particular court within a court system in which a P can file a lawsuit
b. Ensures that a case is littiagted in a conveintent place with some connection
to the lawsuit for one or both of the parties
i. Similar to PJ but does not focus on D’s interest
c. Statues
i. 28 USC s 1391 (b): venue in general – a civil action may be brought in (1)
a judicial district in which any D resides, if all Ds are residents of the State
in which the district is located; (2) a judicial district in which a substantial
part of the events or omissions giving rise to the claim occurred, or a
substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which any action may otherwise be brought as
provided in this section, any judicial district in which any D is subject to
the court’s pj with respect to such action
Residency for individual
ii. 28 USC 1391 (c): for all venue purposes a natural person including an
alien lawfully admitted for permanent residence in the US shall be deemed
to reside in the judicial district in which that person is domiciled
Non-corporate entities
iii. 28 USC 1391 (c)(2): an entity with the capacity to sue and be sued in its
common name under applicable law, whether or not incorporated, shall be
deemed to reside, if a defendant, in any judicial district in which such
defendant is subject to the court’s personal jurisdiction with respect to the
civil action in question and, if a plaintiff, only in the judicial district in
which it maintains its principal place of business
Residency for corporation
iv. 28 USC 1391 (d): For purposes of venue under this chapter, in a State
which has more than one judicial district and in which a defendant that is a
corporation is subject to personal jurisdiction at the time an action is
commenced, such corporation shall be deemed to reside in any district in
that State within which its contacts would be sufficient to subject it to
personal jurisdiction if that district were a separate State, and, if there is no
such district, the corporation shall be deemed to reside in the district
within which it has the most significant contacts
d. Resident: A resident in terms of individual refers to domicile/Resident in terms of
corporation must have a contacts/principle place of business in the forum
e. Uffner v. La Reunion Francaise
i. Facts:
1. Guys yacht sunk in Puerto rico, it was insured through a GA
underwriter for a French insurance company, he sues in PR
2. D asks for summary due to improper venue
ii. Issue:
1. Was Puerto Rico improper for the case? PJ?
iii. Holding:
1. Yes, under 1392a2 the claim was appropriate because a substantial
amount of events leading to claim happened in PR waters
a. All Caribbean appeals go to PR district
b. Must be a sequence of events and must be substantial to the
events
i. Fire-sinking-claim denial-suing all happened in PR
2. And PJ was acquired when D came to the venue and didn’t raise
the claim
2. Choice of Law (Erie Doctrine)
a. Erie Railroad v. Tompkins
i. Facts:
1. Man got hit by a train walking by the tracks on a well beaten
footpath, he brough case in NY where incident happened
2. D wanted to use PA state law, where P was from bc theres no duty
other than wanton negligence for trespassers, P wanted general
federal law
3. DC ruled for P saying federal courts could use discretion to apply
general law
ii. Issue:
1. Do Fed courts have to adhere to state common law?
iii. Holding:
1. Yes, diverse cases in federal court must adhere to state common
law in a suit or else they would be bypassing the constitutional
limits in federal courts into one of general jurisdiction, and
undermine state sovereignty.
2. If theres an applicable statue, you must adhere
3. Old way was discriminatory to citizens of their own respective
state
3. Joinder of Parties and Claims
a. Statues
i. Federal Rule 18(a): P can assert any claim she has against opponent
whether related/unrelated ; a party asserting a claim, crossclaim, or third
party claim may join, as independent or alternative claims, as many claims
as it has against an opposing party
1. Doesn’t even have to arise out of the same events
ii. Federal Rule 42 (b): authorizes trial judge to order separate trials on these
unrelated claims; for convenience to avoid prejudice or to expedite and
economize the court (federal district judge) may order a separate trial of
one or more separate issues, claims, crossclaims, counterclaims, or third
party claims
iii. Federal Rule 20 (a)(1): P can sue together if they assert claims that arise
out of same transaction, occurrence, or series of transactions or
occurrences and (if their claims involve) any question of law or fact
common to all P
iv. Federal Rule 20 (a)(2): D may be sued together if all criteria are met
Joinder may also be appropriate when it is impossible to litigate the case
without that parties participation
b. Hohlbein v. Heritage Mutual Insurance
i. Facts:
1. 4 Ps brought a suit claiming D misrepresented the nature of their
employment, and D wanted all suits to be separated under Rule 21
ii. Issue:
1. Can the claims stay together under rule 20
iii. Holding
1. Yes, the cases all arose out of the same practice of D in a
reasonable period of time, and it is more economical to keep them
together, if the jury becomes confused on the intertwining
circumstances, it may be separated
c. Once Rule 20 has been met, original and additional parties may sue for unrelated
incidents under Rule 18, but a link with rule 20 must first be met!!
4. Counterclaims and Crossclaims
a. Statues
i. Rule 13 (a)(1)(A): Complusory counterclaims must arise out of the
same transactiomn or occurrence as Ps claim
b. King v. Blanton
i. Facts:
1. Original D goes to sue P a year after after settling out of court
saying D caused the wreck
2. Courts grants summary judgement to original P saying D lost her
right to counterclaim after the first case was settled
ii. Issue:
1. Was summary judgement correct?
iii. Holding:
1. YES, because she was estopped in claiming a new case against P
due to her waiver in the first settlement
2. Rule 13 bars her recovery from the same events since it should
have been a compulsory suit at the time of the original hearing
a. Nothing in the record indicated she was unaware she could
file a compulsory suit
c. Crossclaims:
i. Federal Rule 13 (g): pleading may state as crossclaim any claim by one
party against a coparty if the claim arises out of the transaction or
occurrence that is the subject matter of the original action or of a
counterclaim, or if the claim relates to any property that is the subject
matter of the original action
1. MUST BE RELATED TO P/D ORIGINAL CLAIM
2. Co-Ps may also crossclaim each other
ii. Federal Rule 13 (h): expressly authorizes adding additional parties to
both crossclaims and counterclaims
5. Impleader under FRCP 14
a. Staute:
i. Rule 14 allows a defending party to assert a claim against a stranger to the
lawsuit; a defending party may as a third party P serve a summons and
complaint upon a nonparty who is or may be liable to it for all or part of
the claim against it
b. Erkins Case Power and Equipemnt
i. Facts
1. P got ran over by a backhoe, and D, the backhoe company, wants
to bring a claim against the P’s employer
ii. Issue
1. Can employer be added to the suit
iii. Holding
1. When bringing as suit with Rule 14 remember
a. Timliness of the suit
b. Potential for complication of issues at trial
c. Probability
d. Prejudiced by the addition of parties
2. D may add parties if they owe something to the defendant, not the
plaintiff
a. Sharing liability, indemnification
3. Tortfeasors may be liable under separate theories of liability
c. More Statues
i. Federal Rule 14 (a)(2)(d): authorizes 3rd party D to assert against P any
defense that the third party P has to the P’s claim
ii. Federal Rule 14 (a)(3): P may assert claims against 3rd party D that meet
the transaction or occurrence test
iii. Federal Rule 14 (a)(5): third party may bring in 4th party
iv. SEE PAGE 643
6. Including Additional Parties under Rules 19 and 24
a. Statues
i. Rule 19: Allows for a party to be brought before the court when its
absolutely necessary to resolving the case
1. PJ, diversity, and venue still applies
b. Torrington v. Yost
i. Facts
1. D worked at a ball bearing company and said he would not divulge
trade secrets in doc. Leaves that job and starts making the bearings
at new job and gets sued, D says new employer mjust be brought
into the case so hes not prejudiced
ii. Issue
1. Is new employer essential to the case?
iii. Holding
1. Yes, however INA and Tor are not diverse so the case must be
dismissed and remanded to state court
2. Four Factors
a. Is a judgement absent of party prejudicial to the D
b. Can adding this party lessen the prejudice
c. Will a judgment rendered without 3rd party be accurate
d. Will plaintiff have an adequate remedy if action is
dismissed for nonjoinder
3. SEE654
c. Intervention under Rule 24
i. Rule 24(intervention):
1. Non-parties wishing to join with a legal right may join the suit and
intervene
2. Claiming an interest in property or or transaction which is the
subject of the suit and disposing of the action may as a practical
matter impede petitioners ability to protect its interest unless
existing parties are currently protecting them
ii. Rule 24 (Permissive)
1. May be granted permission if they have a claim of defense or
shares a main question of law or fact
a. Judge must introduce this, not another party
7. Statutory Interpleader and Rule Interpleader
a. Allows someone in possession of property or money to force all adverse claimants
to that property in a single procedure
b. Statues
i. 28 USC 1335 a: (a)The district courts shall have original jurisdiction of
any civil action of interpleader or in the nature of interpleader filed by any
person, firm, or corporation, association, or society having in his or its
custody or possession money or property of the value of $500 or more, or
having issued a note, bond, certificate, policy of insurance, or other
instrument of value or amount of $500 or more, or providing for the
delivery or payment or the loan of money or property of such amount or
value, or being under any obligation written or unwritten to the amount of
$500 or more, if
1. (1)Two or more adverse claimants, of diverse citizenship as
defined in subsection (a) or (d) of section 1332 of this title, are
claiming or may claim to be entitled to such money or property, or
to any one or more of the benefits arising by virtue of any note,
bond, certificate, policy or other instrument, or arising by virtue of
any such obligation; and if
2. (2) the plaintiff has deposited such money or property or has
paid the amount of or the loan or other value of such
instrument or the amount due under such obligation into the
registry of the court, there to abide the judgment of the court, or
has given bond payable to the clerk of the court in such amount
and with such surety as the court or judge may deem proper,
conditioned upon the compliance by the plaintiff with the future
order or judgment of the court with respect to the subject matter of
the controversy.
c. Rule 22 Interpleader
i. By a Plaintiff. Persons with claims that may expose a plaintiff to double or
multiple liability may be joined as defendants and required to interplead.
Joinder for interpleader is proper even though:
1. the claims of the several claimants, or the titles on which their
claims depend, lack a common origin or are adverse and
independent rather than identical; or
2. the plaintiff denies liability in whole or in part to any or all of the
claimants.
ii. By a Defendant. A defendant exposed to similar liability may seek
interpleader through a crossclaim or counterclaim
8. Supplemental Jurisdiction
a. Statues
i. Article 3 Section 2
ii. Rule 18:
b. United Mine Workers v. Gibbs
i. Facts
1. P was blackballed from working, sues union (non-diversre) for
federal labor law violations and state contract breach
ii. Issue
1. Can federal court hear the state claim?
iii. Holding
1. Yes, there was a legitimate federal question claim, with a state
claim against the same party
a. Separate but parallel ground for relief sought in a
substantial claim for federal law
2. All claims must arise out of same common nucleus of operative
facts, and the federal claim must be legit
THIS IS COMPLETELY DISCRETIONAL NOT MANDATORY
c. Owen Equipment v. Kroger
i. Facts
1. P was killed by an electrical wire after a crane got to close to it, P
sues power company, who then filed against Owen, the crane
people
2. Power co is released leaving only owen, who then is discovered to
be a non-diverse party with P
ii. Issue
1. Does federal court still have a case?
iii. Holding
1. Each party must be completely diverse
2. Whenever a fed court exercises jurisdiction, tcannot only be
constitutional, but must comply with federal statues as well
3. Not setting a precedent reaching around DJ by suing a diverse
party only to get to a nondiverse in federal court
d. 28 USC 1367
i. 28 USC 1367: does not extend to certain categories of claims, even
though they are within the grant of supplemental jurisd in subsection (a)
[Rule 14, 19, 20, 14]; MUST BE ASSERTED BY P; subsection (4) is a
catch all provision that authorizes the court to decline supplemental jurisd
in exceptional circumstances
9. Claim Preclusion (Res Judicata)
a. River Park
i. Facts
1. P wanted to buy land to make a country club from D, a
municipality
2. City council decided thwey would sell land to themselves without
considering Ps proposal
3. P claims they deprived them of property right w/o due process
4. DC and AC affirmed the dismissal of a tort claim but reversed the
abuse of power claim
ii. Issue
1. was one claim precluded by the other after it was ruled upon?
iii. Holding
1. Three elements
a. there was a final judgement on the merits rendered by a
court with competent jurisdiction
b. There is an identity of the cause of action
c. There is an identities of the parties or their privies
2. Same evidence: if same evidence is needed sustain the second case
would sustain the first, res judicata
3. Transactional Test: Assertion of different theories of relief shall
constitute a single cause of action if single operation of facts,
regardless of whether they assert different theories of relief
10. Issue Preclusion (Collateral Estopple)
a. Felger v. Nichols
i. Facts
1. P sued a client for 345 of unpaid legal fees, and D turns around and
sues for malpractice
2. D cannot sue bc the final judgement had been rendered of original
claim
ii. Issues
1. Was this correct?
iii. Holding
1. Direct v. Collateral
a. Direct= claim preclusion, bars second action on all matters
actually or potential litigated
b. Collateral=issue preclusion, previous action is a bar to
issues actually litigated \
2. Either theory would work bc the issue was previously litigated and
if malpractice was present then it would’ve been discovered in the
non payment lawsuit and could have been raised as a defense and
was not, same operative fact
b. Panniel v. Diaz
i. Facts
1. Ps car was struck by an ambulance driver
2. All toes were amputated in the aftermath, and she gets her claim
succeeded and then sues the hospital and ambulance driver to
preclude their relitigation
ii. Issue
1. Was D precluded from relitigating?
iii. Holding
1. No, /issue preclusion is not mechanical
2. Under New Jersey law, the doctrine of collateral estoppel may be
used to bar relitigating of an issue fully litigated and decided in an
earlier binding arbitration, provided it is fair to do so
3. the party asserting the bar:
a. issue to be precluded is identical to the issue decided in the
prior proceeding
b. issue was actually litigated in the prior proceeding
c. court in the prior proceeding issued a final judgment on the
merits
d. determination of the issue was essential to the prior
judgment and
e. the party against whom the doctrine is asserted was a party
to or in prvity with a party to the earlier proceeding