Civil Procedure
The Express Train: General Overview of a Civil Action
Jurisdiction
1. Capron v. Van Noorden (SMJ)
2. Tickle v. Barton (PJ)
Structure of the lawsuit – claims & parties
3. Temple v. Synthes (Joinder, Rule 19)
4. Jeub v. B/G Foods (Third-party, Rule 14)
Motions to dismiss (Rule 12)
5. Case v. State Farm
6. Pruitt v. Cheney
Discovery
7. DiMichel v. South Buffalo Railway Co.
8. Tran v. New Rochelle Hospital
Summary judgment (Rule 56)
9. Valley National Bank v. J.C. Penney Insurance Co.
10. Houchens v. American Home Assurance Co.
Division of authority between judge and jury (Rule 50)
11. Lavender v. Kurn
Appeal
12. Hicks v. United States
Claim Preclusion
13. Rush v. City of Maple Heights
1. Subject-matter jurisdiction: Capron v. Van Noorden, 1804
a. Overview
i. U.S. Supreme Court (orig. NC Federal District Court)
ii. Capron sued for “trespass on the case” (negligence, a state law claim)
iii. Van Noorden, won; Capron appealed, saying court should not have accepted the case
because did not determine whether it had jurisdiction
iv. Capron won the appeal and the right to begin suit again; claim preclusion not possible
because original judgment was voided. However, the court might exercise equitable
estoppel in the interest of fairness.
b. Subject matter jurisdiction (“the court’s authority to hear generic types of cases”)
i. Question: Can the plaintiff appeal based on a lack of jurisdiction in a court that he had
chosen in the first place?
1. Lack of jurisdiction: The court would only have SMJ if the case was a
diversity case (not a federal question); however, the record did not show
where Capron was from, so it was unclear if the court had SMJ.
ii. Answer: Yes; it is the duty of the court to determine jurisdiction.
iii. Reasoning: (not in the case, but discussed in class) – Emphasis on SMJ is attempt to
limit the federal court from infringing on state court jurisdiction (does not have
concurrent jurisdiction).
2. Personal jurisdiction: Tickle v. Barton, 1956
a. Overview
i. West Virginia Supreme Court of Appeals (orig. WV state circuit court)
ii. Tickle sued for personal injury damages against Barton (owner of car, VA resident) as
well as the driver of the car
iii. Barton filed an amended plea in abatement, challenging the validity of service of alias
process, saying he was tricked into entering WV
1. *Plea in abatement = a response by the defendant that does not dispute the
plaintiff's claim but objects to its form or the time or place where it is asserted
iv. Judge ruled in favor of Barton; ruling affirmed on appeal.
b. Personal jurisdiction (“geographical limitation on the places where a plaintiff may sue a
defendant”)
i. Question: Do the alleged circumstances of the service of process upon Barton (if
considered to be true) render that service invalid? i.e., was the defendant fraudulently
brought under the court’s jurisdiction?
ii. Answer: The court ought not to exercise its jurisdiction over the case, because it
was attained through fraud.
iii. Dissenting opinion: The facts properly alleged do not establish fraud or wrongdoing,
so the rule of law that was applied was not relevant.
c. Related notes from class
i. State court had SMJ because they have general SMJ, can hear any case at all, here a
car accident case (competent)
ii. Key idea: you have to get the defendant into the state to get personal jurisdiction. The
state cannot reach into other states.
1. Later we will see that in some cases this is not true…
2. Note: Federal court cannot reach any farther than the state court of that state
can (Rule 4k1a)
3. Joinder: Temple v. Synthes, 1990
a. Overview
i. U.S. Supreme Court (orig. Louisiana federal district court)
ii. Temple (Miss. resident) sues Synthes (PA corp.) in federal court for defective device;
at same time, sues doctor LaRocca and hospital in Louisiana state courts for
malpractice
iii. Synthes moves to dismiss Temple’s federal suit for failure to join necessary parties
(Rule 19); court orders Temple to join LaRocca & hosp. in the interest of judicial
economy
iv. Temple refuses to join; court dismisses suit. Temple appeals and U.S. Court of
Appeals affirms, saying it is prejudicial to defendants to have separate litigations
occurring (claims overlap).
v. Supreme Court reverses judgment
b. Joinder
i. Rule 19(a): If joining a certain party will not mess up SMJ, the party should be joined
as long as (1) complete relief cannot be afforded without joining the party, OR (2) not
joining the party will impair his ability to protect any interest he may have in the
matter and/or leave him able to subject the already-parties to substantial risk later on.
(Should be joined if considered indispensable.)
1. Note: a tortfeasor with joint-and-several liability is merely a permissive party
to an action against another with like liability- so not necessarily subject to
Rule 19
2. *Joint-and-several liability: a plaintiff may recover all the damages from any
of the negligent defendants regardless of their individual share of the liability
ii. Question: Are LaRocca & the hospital indispensable to the case under Rule 19? They
can be brought in because it would not destroy diversity, but must they?
iii. Answer: The threshold requirements necessary to apply Rule 19(a) here have not
been met, so the plaintiff should not be required to join LaRocca in the suit.
iv. Reasoning: LaRocca & hospital are potential joint tortfeasors with Synthes (thus
merely permissive parties), and it is not necessary for all joint tortfeasors to be named
as defendants in a single lawsuit.
1. Inconsistent outcomes should not be a concern with this case
c. Related notes from class
i. In considering what makes sense in a procedural question, need to consider which
values we aim for: fairness, efficiency, accurate outcome
ii. Is it more efficient to have one or two suits? Time, money – if claims overlap, the
parties may try to bring each other into each separate trial.
iii. Is it fair? Have to worry about inconsistent verdicts; having one jury decide would
prevent this from happening
iv. Synthes’ desire to join suit: why? To shift some blame to doctor (although they could
do that with doctor as witness too perhaps); using the rule to stall or get case
dismissed
4. Third-party Practice: Jeub v. B/G Foods, 1942
a. Overview
i. U.S. District Court (not an appeal)
ii. Jeub sues B/G Foods for serving plaintiff contaminated ham; B/G Foods makes Swift
& Co. (producer of the ham) a third-party defendant (Rule 14)
iii. Swift (third-party defendant) moves to vacate the order making it a third-party. Court
denies this motion.
b. Issue of Third-Party Suit
i. Rule 14: A defendant ( third-party plaintiff) may at any time serve a complaint on a
non-party ( third-party defendant) who is or may be liable to the defendant/thirdparty plaintiff for all/part of the plaintiff’s claim against the defendant/third-party
plaintiff.
1. Note: different from Rule 19. Here, with Rule 14, defendant claims no
liability and transfers it to another party (who must indemnify them if
defendant held liable). In Rule 19 (joinder), defendant admits liability but
desires to share it with another party.
ii. Question: Does the fact that the third-party plaintiff (B/G) has not yet suffered any
loss prevent B/G from impleading Swift?
iii. Answer: The fact that an independent action for money recovery cannot be
brought at this time does not prevent the defendant (as third-party plaintiff)
from impleading another party.
iv. Reasoning: Rule 14 permits the impleader of a party who is or may be liable, and it
allows for the rights of all parties to be determined in one proceeding. One jury will
save time and expense, and will still be serving justice (determining the controversy in
one proceeding will not prejudice the rights of any of the parties).
c. Related notes from class
i. Rule 14 is about passing on liability to another party. See contrast with rule 19 in
other document.
Two “motion to dismiss” cases: At issue is the question of the court’s duty, when considering a motion to
dismiss, to create a claim that the plaintiff has not clearly articulated in the complaint. Differing
interpretations of Rule 12(b)(6).
5. Motion to dismiss, part one: Case v. State Farm, 1961
a. Overview
i. U.S. Court of Appeals (orig. federal district court)
ii. Case sued three insurance companies for damages growing out of the termination of
his contract as representative
iii. Court granted a motion to dismiss; Case appealed, appeals court affirmed.
b. Motion to dismiss
i. Question: Was the district court correct to dismiss the case because the plaintiff’s
stated claim was not a legal cause of action – even though facts included in the claim
may have entitled him to relief?
ii. Answer: Yes. It is not the duty of the trial court or the appellate court to create a
claim which appellant has not spelled out in his claim.
iii. Reasoning: The plaintiff’s cause of action was not valid because the termination of the
contract by the insurance companies was legal according to the terms of the contract.
His language refers to the wrongful interference of the companies in his business in
violation of the contract, which would have been a valid claim, but he did not state
this as his claim.
c. Related notes from class
i. Rule 12(b)(6) takes facts alleged in the case, assumes they’re true, and then asks if
there is a legal case.
ii. This case embodies one of two ideas about civil procedure: that civil litigation is a
dispute resolution mechanism between private parties, with the court providing only
an adjudicator to that dispute.
6. Motion to dismiss, part two: Pruitt v. Cheney, 1991
a. Overview
i. U.S. Court of Appeals (orig. federal district court)
ii. Pruitt sued the Army for suspending her promotion after finding out from a Los
Angeles Times article that she was gay.
iii. Army filed a motion to dismiss and court granted it; Pruitt appealed. Appeals court
affirmed in part and reversed in part.
b. Motion to dismiss
i. Question: Was the district court correct to dismiss the case because the plaintiff’s
stated claim was not a legal cause of action – even though facts included in the claim
may have entitled her to relief?
ii. Answer: No. The complaint should not be dismissed merely because plaintiff’s
allegations do not support the legal theory she intends to proceed on, since the
court is under a duty to examine the complaint to determine if the allegations
provide for relief on any possible legal theory.
iii. Reasoning: Even though plaintiff’s claim of action based on the violation of her First
Amendment rights was invalid, her allegations of the unconstitutionality of the
Army’s regulations requiring her discharge are sufficient to state an equal protection
claim.
c. Related notes from class
i. Like Case, this case is interpreting Rule 12(b)(6), but oppositely. Why?
1. Regional difference in interpretation of federal rules?
2. Forgiveness for issues that the court determines to be important?
3. Embodies one of the two ideas about civil procedure: the more public vision
of the legal system that envisions the court as an extension of the people,
having a duty to ensure justice.
ii. This case, and Case, are different from a 12(b)(6) dismissal where the plaintiff states a
claim upon which no legal relief can be granted – these two are legal claims, but the
claims are faulty or invalid. Even if all facts are assumed true, plaintiffs can’t win
with these claims.
1. 12(b)(6) sorts out (1) being in the wrong dispute resolution system (not
having a legal case); and (2) having a weak legal case
7. Discovery, part one: DiMichel v. South Buffalo Railway Co., 1992
a. Overview
i. New York Court of Appeals (orig. NY state circuit court)
ii. Personal injury case. Plaintiff moved to compel disclosure of surveillance video taken
of him; motion granted (though only for materials planned for use in trial. Upheld on
appeal.
b. Discovery of video
i. Question: Are surveillance films prepared by a defendant in a personal injury action
discoverable by the plaintiff before trial?
ii. Answer: Yes, though the defendants are only obligated to disclose those tapes
which they plan to use at trial, and only after plaintiff has been deposed.
iii. Reasoning: Surveillance films are a material prepared in anticipation of litigation, so
are subject to qualified privilege that is overcome only by substantial need and undue
hardship.
1. Substantial need: plaintiff would need to verify authenticity of the film before
trial started, to avoid disruption and delay.
a. In order to prevent plaintiffs from tailoring their testimony according
to the film, they must be deposed before seeing it.
2. Undue hardship: plaintiff cannot obtain the substantial equivalent of
surveillance materials by other means- unique visual evidence.
c. Related notes from class
i. Defendant does not use one of the formal methods of discovery
8. Discovery, part two: Tran v. New Rochelle Hospital Med. Ctr., 2003
a. Overview
i. New York Court of Appeals (orig. NY state circuit court) (same as DiMichel)
ii. Personal injury case. Plaintiff moved to compel disclosure of surveillance video taken
of him. Defendants argued that plaintiff should be deposed first. Decision in favor of
plaintiff.
b. Discovery of video after legislative changes
i. New statute: “There shall be full disclosure of any films… There shall be disclosure
of all portions of such material, including out-takes, rather than only those portions a
party intends to use.”
ii. Question: Does the new statute overrule the aspect of DiMichel which allows
defendants to withhold surveillance tapes until after plaintiff has been deposed?
iii. Answer (not in case materials): Yes. Because the new statute does away with the
primary aspect of the DiMichel ruling (regarding which parts of the film must be
disclosed), it must also do away with the timing aspect of the ruling.
c. Related notes from class
i. The more full the discovery is, the better, because it may avoid the need for trial
altogether if, after discovery, a motion for summary judgment may be granted.
ii. Here we see a rule that is overturned by a new rule- more than one way to go about
things. In these situations, lawmakers fall back on policy arguments to decide new
rules based on the ultimate goals of efficiency, fairness, and accuracy.
9. Summary judgment: Valley Nat’l Bank of Arizona v. J.C. Penney Insurance Co., 1981
a. Overview
i. Arizona appeals court (orig. AZ state circuit court)
ii. The estate of a disappeared man (Frank Seay, remains found in desert) sued an
insurance company to pay up on an accidental death policy. Defendant filed for
summary judgment, which was granted. Seay’s estate appealed; decision reversed and
case remanded.
b. Summary judgment
i. Question: Taking the evidence and inferences presented in a light most favorable to
appellant (Seay’s estate), does a genuine issue of material fact exist as to whether
Seay’s death was accidental?
ii. Answer: Yes. An accidental death may be reasonably inferred from the
circumstances here. More proof than that is not needed at this time.
iii. Reasoning: No one was able to ascertain cause of death. Circumstantial evidence
supports, to an extent, the reasonable inference that the death may have been
accidental. While plaintiff does have the burden of proving that the death was
accidental, that does not have to happen until the trial. (Insurance company’s
argument was that summary judgment should be granted because plaintiff had not yet
proved that the death was accidental.)
c. Related notes from class
i. The burden of proof is on the plaintiff when trying to win the case. In order to win at
trial, they need a “preponderance of evidence” (more than 51% of the evidence in
their favor). But, when a defendant moves for summary judgment, the burden of
proof is on them to demonstrate that the standard for issuing a summary judgment has
been met.
ii. Standard for issuing a summary judgment: The plaintiff, after discovery, does not
have enough evidence to prove a central element of their case. Disclosed facts do not
support outcome. If the plaintiff shows that there is a genuine issue of facts, so that a
reasonable juror might decide in their favor, the judge cannot issue a summary
judgment.
10. Summary judgment: Houchens v. American Home Assurance Co., 1991
a. Overview
i. U.S. Court of Appeals (orig. federal district court)
ii. Wife of disappeared man (who went to Thailand and never came back, presumed dead)
sued insurance company to pay accidental death policies. Company moved for
summary judgment; it was granted, and affirmed on appeal.
b. Summary judgment
i. Question: Is there a general issue of material fact after drawing any inferences in the
light most favorable to Houchens?
ii. Answer: No. The inferences in this case show equal support for opposing
conclusions, so a jury would not be able to reasonably conclude that the death
was caused by accident rather than by other means.
iii. Rationale: Wife must prove that husband died by accidental death; given the evidence,
she cannot do this. She has failed to make a showing sufficient to establish the
existence of an element essential to her case, and on which she would bear the burden
of proof at trial.
iv. Contrast with previous case (Valley): here there is no circumstantial evidence that
supports inferences in plaintiff’s favor.
c. Related notes from class
i. When making inferences, you have to assume the husband dead, because the state of
Virginia ruled that he is legally presumed dead.
ii. Evidence that would have helped plaintiff: a body, a witness, expert testimony
11. Motion for judgment as a matter of law: Lavender v. Kurn, 1946
a. Overview
i. U.S Supreme Court (orig. MO state circuit court, then state supreme court)
ii. Estate of dead man (Haney) sued two railroad companies. Haney was killed by an
unknown cause while on the job. Plaintiff claimed Haney was killed by a hook
hanging off a train, so sued the railroad who owned the train for negligence as well as
the railroad who owned the station for maintaining an unsafe workplace.
iii. Original jury found in favor of plaintiff; on appeal, state supreme court reversed,
citing no evidence of negligence substantial enough to support the submission of the
case to the jury. U.S. Supreme Court reversed that decision, and remanded the case.
b. Motion for judgment as a matter of law
i. Question: Was the state supreme court justified in claiming that there should have
been judgment as a matter of law, i.e. that the case should never have been sent to the
jury?
ii. Rule of law: A judge can take a case away from the jury only when, after plaintiff has
presented evidence at trial, it is clear that no reasonable jury could find for plaintiff.
Moreover, a judge can overturn the jury’s verdict only when there is a “complete
absence of probative facts to support the conclusion reached by the jury.”
iii. Answer: No. There was evidence from which it might be inferred that plaintiff’s
allegations are true; this inference cannot be said to be so unreasonable as to
warrant taking the case from the jury.
iv. Reasoning: Speculation on the part of the jury is not just acceptable, it is necessary
whenever facts are in dispute or the evidence is such that fair-minded men may draw
difference inferences.
c. Related notes from class
i. No fact decided by a jury can be re-examined. So you can’t overturn a jury exactly,
but you can say that the jury was not reasonable in its decision.
ii. Judge writing this opinion is clearly a legal realist who cares about the facts of the
case and believes they should be heard by a jury.
12. Appeal: Hicks v. United States, 1966
a. Overview
i. U.S. Court of Appeals (orig. federal district court)
ii. Administrator of dead woman’s estate sued for malpractice the doctor who
misdiagnosed her. The doctor worked for the U.S. Navy. The lower court dismissed
the complaint because the evidence was insufficient to establish negligence.
Appellate court reversed the original judge’s decision, finding negligence.
b. Appeal
i. Question: Do the undisputed facts manifest negligence?
ii. Answer: Yes. The doctor did not conform to the required standard of care, so he
is liable for negligence.
iii. Reasoning: The standard of care is such that if he uses ordinary care in reaching his
diagnosis, and thereafter acts upon it, he incurs no liability, even if the diagnosis was
incorrect. In this case, the doctor did not use ordinary care, according to the experts.
iv. More important issue: The ability of this court to overturn the lower court judge’s
dismissal decision.
1. Question: Does a finding of negligence constitute a finding of fact or a
question of law?
2. Rule: Only questions of law can be reviewed and overturned by appellate
courts. A trial judge’s (or jury’s, if there is one) finding of fact cannot be
disturbed unless clearly erroneous.
3. Answer: A finding of negligence is a question of law because it involves
not only the formulation of the legal standard, but also its application to
the evidentiary facts as established. Thus, when a judge sitting without a
jury makes a determination of negligence, his conclusion is freely
reviewable on appeal.
c. Related notes from class
i. Question of jurisdiction. Why in federal court? This case arises under the Federal
Torts Claims Act because it is against the U.S. government. The govt has sovereign
immunity, except when its agents involve in torts (in some situations). In those cases,
the litigation is tried in the govt’s own federal court system.
1. Why no jury? The Federal Torts Claims Act does not permit one, because it
states that a government is not subject to the decision of its own subjects.
ii. Fact and law. In trial, the jury usually distinguishes facts and the judge concerns
himself with the law. Here things are more complicated because there is no jury.
Judge does everything. The facts have to be distinguished from the law because an
appellate court can only review questions of law, not re-decide any matters of fact.
1. This is because matters of fact, when decided in lower court, are decided
based on first-hand viewing of witnesses and evidence, something that the
appeals court cannot do. At the same time, the appellate court is able to make
decisions on law issues because it is not bogged down by issues of fact and
can focus exclusively on the law. Specialization. Moreover, trial judges have
to make many decisions during the case of a trial and cannot think about each
one as long; but appellate judges think about fewer decisions, because only
one or a few are brought up in each appeal.
2. Facts can only be reversed in appellate court if they are made by a judge and
clearly erroneous. (Jury findings of fact can never be reversed.) The legal
decision, on the other hand, is reviewed from scratch (de novo). Thus, when
appealing, you want to frame the matter at hand as an issue of law, not fact.
In this case, in order to appeal a finding of negligence, the appeals court has to
conceptualize it as a legal decision, not a factual one.
13. Preclusion: Rush v. City of Maple Heights, 1958.
a. Overview
i. Ohio Supreme Court (orig. Cleveland municipal court & county court- 2 actions)
ii. Personal injury case. Rush sued the city for negligence (street maintenance) for
personal property damage in municipal court and won. Also sued city for personal
injuries in county court and won. She was allowed to go forward on the issue of
damages alone in the 2nd trial because the issue of negligence was res judicata.
iii. On appeal of 2nd case, judgment reversed and found for defendant.
b. Preclusion
i. Question: Did the courts, following the precedent of the Vasu case, permit error in
permitting the plaintiff to split her cause of action?
ii. Vasu ruling: Injuries to person and property suffered by the same person as a result of
the same wrongful act are infringements of different rights and give rise to distinct
causes of action. So, as long as judgment was for the plaintiff in the first property
damages case, that is no bar to an action subsequently prosecuted for personal injury.
iii. Answer: Yes. Whether or not injuries to both person and property resulting
from the same wrongful act are to be treated as injuries to separate rights or as
separate items of damage, plaintiff may maintain only one action to enforce his
rights existing at the time such action is commenced. Thus the rule declared in
the Vasu case should not be followed.
iv. Reasoning: The rule in the Vasu case is in conflict with the majority practice and has
caused vexatious litigation. The majority practice has been to require all damages
sustained to be sued for in one suit, to prevent multiplicity of suits, burdensome
expense, and delays to plaintiffs. The Vasu rule is applicable only when an insurer
has acquired the right to recover for money it has advanced to pay for property
damage, and the insured sues separately for personal injury.
c. Related notes from class, first time around
i. First case: Rush asks for property damages, and thus needs to prove the issue of the
city’s negligence (and does). Second case: Rush asks for personal injury damages
arising from same set of operative facts (same accident) as in the first case.
ii. Claim preclusion means that all claims arising out of one incident/transaction that
could have been brought in an action, even if not brought, merge into the first
judgment and cannot be brought again. This is why Rush cannot bring her related
claim in a second suit.
iii. Rush’s argument that the issue of negligence was already res judicata was an attempt
at issue preclusion because it was already decided in a previous suit.
iv. Concurring judge justifies overturning Vasu by claiming that the relevant passages in
that opinion were just dicta, not the case holding. Also, in this case, there was no
insurer, so the Vasu rule was not relevant.
d. Related notes from class, second time around
i. Case #1: Rush v. City
ii. Case #2: Rush v. City (same parties)
iii. In second case, Rush tries to run issue preclusion against the city (liability already
established). City tries to run claim preclusion against Rush (all claims Rush should
have brought in first case are merged into the first judgment).
iv. Both cases were brought in the same judicial system: intrajurisdictional preclusion.
The Local Train: Detailed Journey into Each Step of the Civil Action
Personal Jurisdiction
1. Pennoyer v. Neff (traditional bases of PJ)
2. Hess v. Pawloski (undermining the bases established in Pennoyer)
3. International Shoe Co. v. Washington (minimum contacts standard)
4. Gray v. American Radiator (long-arm statutes)
5. McGee v. International Life Insurance Co. (optional squib – jurisdiction trends & forum’s interest)
6. Hanson v. Denckla (optional squib – unilateral activity)
7. World-Wide Volkswagen v. Woodson (two-part test)
8. Burger King v. Rudzewicz (two-part test)
9. Asahi Metal v. Superior Court (purposeful availment & stream of commerce)
10. Helicopteros Nacionales v. Hall (specific/general jurisdiction)
11. Snowney v. Harrah’s Entertainment (the internet)
12. Harris v. Balk (property)
13. Shaffer v. Heitner (property)
14. Burnham v. Superior Court (physical presence)
15. Carnival Cruise Lines v. Shute (consent)
Procedural Due Process
16. Mullane v. Central Hanover Bank (notice)
17. Jones v. Flowers (notice)
18. Goldberg v. Kelly (opportunity to be heard)
19. Mathews v. Eldridge (opportunity to be heard)
20. Fuentes v. Shevin (OTBH)
21. Mitchell v. W.T. Grant Co. (OTBH)
22. North Georgia Finishing v. Di-Chem (OTBH)
23. Connecticut v. Doehr (OTBH)
Subject-Matter Jurisdiction
24. Mas v. Perry (diversity – determining citizenship)
25. Arbaugh (diversity – timing requirement)
26. AFA Tours v. Whitchurch (diversity – amount in controversy)
27. Osborn v. Bank of the United States (federal question – constitutional interpretation)
28. Louisville & Nashville Railroad Co. v. Mottley (federal question – plaintiff’s claim only)
29. TB Harms Co. v. Eliscu (federal question – Holmes test)
30. Smith v. Kansas City Title & Trust Co. (federal question – exception to Holmes test)
31. Merrell Dow Pharmaceuticals v. Thompson (federal question – private right of action)
32. Grable v. Darue (federal question – 3-part test)
33. United Mine Workers v. Gibbs (supplemental jurisdiction – nucleus of facts)
34. Aldinger v. Howard (supplemental – 2 defendants)
35. Owen Equipment v. Kroger (supplemental – complete diversity)
36. Finley v. United States (supplemental – statutory authorization)
37. Exxon v. Allapattah/Ortega v. Star-Kist (supplemental – amount in controversy)
Venue and Transfer
38. Bates v. C&S Adjusters (venue)
39. Hoffman v. Blaski (transfer of venue)
40. Piper Aircraft v. Reyno (forum non conveniens)
Ascertaining the Applicable Law
41. Swift v. Tyson
42. Erie RR Co. v. Tompkins
43. Stewart v. Ricoh
Pleadings
44. Dioguardi v. Durning (pleading dismissals with 12(b)(6))
45. American Nurses’ Association v. Illinois (pleading dismissals with 12(b)(6))
46. Beeck v. Aquaslide (pleading amendments, rule 15)
47. Worthington v. Wilson (pleading amendments, rule 15)
48. Zuk v. Eastern Penn. Psychiatric Institute (pleading truthful allegations, rule 11)
Structure of the Case
49. Harris v. Avery (historical joinder of claims)
50. M.K. v. Tenet (permissive joinder, rule 18 and 20)
51. United States v. Heyward-Robinson (counterclaims, rule 13)
52. Lasa Per L’Industria v. Alexander (cross-claims, rule 13)
53. Bank of California v. Superior Court (joinder of necessary and indispensable parties, rule 19)
54. Too v. Kohl’s Department Stores (third-party impleader, rule 14)
55. Smuck v. Hobson (intervention, rule 24)
56. Falcon v. General Telephone (class actions, rule 23(a))
57. Castano v. American Tobacco Co. (class actions, rule 23(b))
58. Hansberry v. Lee (class actions, due process considerations)
59. Snyder/Zahn (not outlined – class actions, subject matter jurisdiction)
60. Phillips Petroleum Co. v. Shutts (class actions, personal jurisdiction)
Discovery
61. Cummings v. General Motors (initial disclosures, discovery sanctions)
62. Hickman v. Taylor (attorney work product)
Summary Judgment
63. Lundeen v. Cordner (motion by plaintiff)
64. Cross v. United States (motion by plaintiff)
65. Adickes v. S.H. Kress (motion by defendant)
66. Celotex Corp. v. Catrett (motion by defendant)
67. Anderson v. Liberty Lobby Inc.
68. Matsushita Electric v. Zenith Radio Corp.
Trial/Right to a Jury
69. Beacon Theatres v. Westover (which claim gets heard first, legal or equitable?)
70. Local 391 v. Terry (how do you know if a claim is legal or equitable)
71. Galloway v. United States (rule 50, directed verdict/j.n.o.v./judgment as a matter of law)
72. Unitherm Food Systems v. Swift-Eckrich (rule 50)
73. Aetna Casualty & Surety Co. v. Yeatts (rule 59, new trial motion)
How Do Cases End? Judgments: Remedies, Appeal, and Preclusion
74. Liberty Mutual Insurance Co. v. Wetzel (appeal- final judgment rule)
75. Cohen v. Beneficial Industrial Loan Corp. (appeal- collateral judgment rule)
76. Will v. Hallock (appeal- limiting the collateral order doctrine)
77. Mathews v. New York Racing Association (claim preclusion)
78. Federated Department Stores v. Moitie (claim preclusion)
79. Mitchell v. Federal Intermediate Credit Bank (claim preclusion/defense preclusion)
80. Linderman Machine Co. v. Hillenbrand (claim preclusion/defense preclusion)
81. Cromwell v. County of Sac (issue preclusion)
82. Russell v. Place (issue preclusion)
83. Rios v. Davis (issue preclusion)
84. Bernhard v. Bank of America (preclusion/mutuality)
85. Blonder-Tongue Laboratories v. University of Illinois (preclusion/mutuality)
86. Parklane Hosiery v. Shore (offensive non-mutual preclusion)
87. Cooper v. Federal Reserve Bank of Richmond (preclusive effect of class action judgment)
88. Martin v. Wilks (binding non-parties)
89. Hooters of America v. Phillips (ADR/arbitration)
90. Morrison v. Circuit City Stores (ADR/arbitration)
1. Personal Jurisdiction: Pennoyer v. Neff, 1877
a. Overview
i. U.S. Supreme Court (case #1 in Oregon state court, case #2 in federal district court)
ii. Case #1: Mitchell, Neff’s lawyer, sues Neff in Oregon state court for payment of
lawyer’s fees (collection action/contract case) in the amount of $300. Mitchell wins
on default judgment because Neff does not show up. Mitchell gets a writ of execution
to use Neff’s land in order to pay the damages he is owed. The sheriff sells Neff’s
land at auction, and Mitchell himself buys it. Mitchell assigns the land to Pennoyer.
iii. Case #2: Neff sues Pennoyer in an action for ejectment to get Pennoyer off his land.
Neff claims ownership of the land under the Oregon Donation Act; Pennoyer claims
ownership because he was assigned title to the land by Mitchell. Neff argues that
Pennoyer’s claim to the land is not valid because it arises out of the judgment from
case #1, which was not valid because the court had no jurisdiction. The federal court
finds in favor of Neff; Supreme Court affirms.
b. Personal jurisdiction
i. Question: Was the judgment in case #1 valid? i.e. Did the state court have personal
jurisdiction over Neff?
ii. Answer: No. The state court had no personal jurisdiction over Neff because the
service of process, which was “constructive”/ “substituted” (published in a
newspaper), was ineffectual.
iii. Reasoning: Service by publication is only sufficient when the proceeding is in rem;
however, this proceeding was in personam, determining the personal rights and
obligations of the defendant. The state court failed to attach Neff’s property at the
beginning of the case (failing to make the case a quasi-in-rem case), thereby failing to
establish personal jurisdiction over Neff. Jurisdiction over a property must exist
before the judgment is rendered in order for the judgment to be valid. If there is no
jurisdiction, the due process clause of the 14th Amendment of the Constitution has
been violated.
c. Related notes from class
i. The federal court rules that there were two problems with the state court’s judgment
that make it invalid; the Supreme Court agrees only with the second. First, the federal
court says that the service of process was faulty because the affidavit certifying
publication in a newspaper was signed by the wrong person. The Supreme Court does
not care about this technicality; it is not an issue that can be attacked collaterally in
case #2 (only on appeal from case #1, which Neff didn’t do). What both courts agree
on is the personal jurisdiction issue, that the service of process (the mechanism by
which PJ is asserted) was not properly executed, so PJ never existed.
ii. There are three ways to serve process on someone in state court (3 ways of alerting
someone that they are being sued):
1. Delivery in person
2. Publication in newspaper
3. Attachment of land (at beginning of case) – seizure of the land to let the
defendant know he is being sued – by putting a fence or sign on the land – this
is ok because it’s the defendant’s responsibility to keep track of his land
(similarly, a bank account can be frozen, and a land title can also be frozen to
prevent its owner from alienating it)
iii. Mitchell could have sued Neff in the state court where Neff was located (if he knew
Neff’s location). Creditors can chase debtors to sue them. He had problems suing
Neff in Oregon because you can’t send someone notice of process when they’re in
another state; that would violate the sovereignty of the other state by allowing Oregon
to reach in.
iv. Difference between in rem and in personam proceedings:
1. In rem cases: the court determines the status of property.
a. Example: a piece of property’s ownership needs to be determined, so
the court wants the owner to come claim it. Anyone wanting to claim
title is invited into the case. In these cases, constructive service
(notice by publication) is sufficient in combination with seizure of the
property in question.
2. In personam cases: court determines status/obligations of people in the state.
a. Constructive service not sufficient in these cases.
3. Quasi-in-rem cases: an in personam case where property is used to recover
damages. The property has to be taken at the outset because it is the basis of
the jurisdiction; the jurisdiction extends only so far as the value of the
property. The property value defines the boundaries of judgment.
v. The Constitution states that each state must give full faith and credit to the judgments
of other states. Thus if you get a judgment in one state and the defendant is in another
state, you can take the judgment to that second state and have their courts execute on
it (e.g. taking money from a bank account). This must be done even if the laws of the
second state differ from those of the first state.
vi. Glannon: This case was a landmark case because the Supreme Court asserted that,
according to the due process clause of the 14th Amendment, “fair procedure” includes
appropriate limits on the places where a defendant can be required to defend suit.
2. Personal Jurisdiction: Hess v. Pawloski, 1927
a. Overview
i. U.S. Supreme Court (orig. Massachusetts state court)
ii. Hess, a PA resident, drives to MA and, while there, hits Pawloski. Pawloski sues in
MA court. Court finds in favor of Pawloski. Hess appeals by questioning personal
jurisdiction; Supreme Court affirms.
b. Personal jurisdiction
i. Question: Does the MA statute (stating that, when you drive on MA roads, you
implicitly appoint the secretary of state of MA as your agent on whom your process
can be served) violate the due process clause of the 14th Amendment?
ii. Answer: No. This statute does not discriminate against non-residents; it actually
puts them on the same footing as residents. It also follows naturally from Kane v.
New Jersey.
iii. Reasoning: Kane v. New Jersey held that the state may require a nonresident to
actually sign a form appointing an official as his agent; this case goes only one step
farther, and the difference between the formal and implied appointment is not
substantial. The MA statute is a legitimate way to establish personal jurisdiction over
nonresidents driving on public roads in the state.
c. Related notes from class
i. This was one of the first steps of the unraveling of Pennoyer. The automobile was a
major part of that case’s demise.
ii. The holding in this case is so ridiculous that it could not last very long.
3. Personal Jurisdiction – Minimum Contacts: International Shoe Co. v. Washington, 1945
a. Overview
i. U.S. Supreme Court (orig. Washington state courts)
ii. In lower court, Washington State sues Shoe Co. (a Delaware corp. headquartered in
Missouri) to recover unpaid state unemployment tax. Notice of process is issued to an
employee of the company in Washington. Shoe Co. resists personal jurisdiction by
saying it was not doing business in WA and had no agent there. Lower state court,
state supreme court, and U.S. Supreme Court all ruled in favor of Washington State.
b. Personal jurisdiction
i. Question: Does the state of Washington have personal jurisdiction over Shoe Co.?
ii. Answer: Yes. Shoe Co.’s operations establish sufficient contacts with the state to
make it reasonable and just to permit the state to enforce the obligations which
Shoe Co. has incurred there.
iii. Reasoning: The court discusses various case precedents and then lays out a twopronged test to determine whether or not a defendant can be brought under personal
jurisdiction according to the due process clause.
1. The defendant must have certain minimum contacts with the forum territory.
a. There exists a spectrum of contacts ranging from “single or isolated”
to “continuous and systematic.” There is no jurisdiction resulting
from the former, but there is from the latter (general jurisdiction).
When the contacts fall somewhere in between, jurisdiction can only
be exercised over causes of action stemming from the particular
contact in question (specific jurisdiction).
b. The contacts in a particular case must be evaluated based on the facts
of the case (the quality and nature of the activity) – a legal realist
approach.
2. The maintenance of the suit must not offend traditional notions of fair play
and substantial justice.
a. An “estimate of the inconveniences” is relevant.
Underlying this test is a contract-based theory implying that, in return for a
corporation’s enjoyment of the benefits and protections of the laws of a state while it
is conducting business there, it must be held to any obligations that arise out of those
business activities.
iv. Influence of case precedents:
1. Pennoyer: Presence within territory used to be the rule for whether or not
personal jurisdiction could be exercised.
a. But with a corporation, unlike an individual, its “presence” in the
state can only be manifested by activities carried on in its behalf by
those who are authorized to act for it.
2. Hess: Some acts committed in a state by an out-of-state entity may be deemed
sufficient to render the entity liable to suit in that state.
v. In this case: Shoe Co.’s activities were systematic and continuous; thus they establish
sufficient contacts. During their business activities they received the benefits and
protection of the laws of Washington State; thus it is fair and just to permit the state to
enforce obligations they have incurred.
c. Related notes from class
i. This case represents a move away from a rule-based system such as that in Pennoyer
(a state court has jurisdiction over people and property in the state, and no jurisdiction
over people and property not in the state). Hess already demonstrated that change was
occurring: the court attempted to deal with the rise of interstate lawsuits.
ii. Now, the court in this case reads into the 14th Amendment, making essential the
territorial connection to the forum state in order for due process to be satisfied. It
becomes the third component of due process, along with notice of suit and the
opportunity to be heard. As a result, a set of criteria has to be created to determine
what exactly constitutes a territorial connection. Now we have a standard-based
system instead of a rule-based system. It is more flexible and subject to argument
over when the standard applies.
iii. Thus, this case also represents a move away from a focus on the law and toward a
focus on facts (a legal realist approach). In Shoe, like Lavender (same time period),
the case contains many facts that figure into the court’s decision regarding the
application of the standard.
4. Personal Jurisdiction – Long-Arm Statutes: Gray v. American Radiator, 1961
a. Overview
i. Illinois Supreme Court (orig. Illinois state courts)
ii. Gray, an IL resident, sues Titan Valve Co. (an Ohio corporation) in IL courts for
negligently manufacturing a valve that exploded and injured her. Summons is served
on Titan in Ohio. Titan argues that it is not subject to jurisdiction because it did not
commit a tortious act in IL. Lower court dismisses case (in favor of Titan), but state
supreme court reverses and remands, claiming personal jurisdiction.
b. Personal jurisdiction
i. Questions: (1) Does the Illinois state statute apply to Titan, i.e. did Titan commit a
tortious act in Illinois? (2) If so, does the statute’s authorization of jurisdiction over
Titan violate due process of law?
ii. Illinois state statute: A nonresident who commits a tortious act within Illinois submits
to its jurisdiction. Service outside the state on nonresidents who have submitted to IL
jurisdiction has the force and effect of personal service within the state.
iii. Answers: (1) Yes. A tortious act occurs where the harm takes place, and the
harm took place in Illinois; thus the tort was committed in Illinois. (2) No. The
use of a company’s defective products in a state is sufficient contact with the state
to justify a requirement that the company defend there.
iv. Reasoning (for Question #2): Determining whether a state long-arm statute violates
due process of law requires looking at the Shoe minimum contacts standard and
whether or not the statute violates concepts of fairness. Here, the court finds that it
can exercise jurisdiction because “continuous activity” by the defendant is not
necessary to establish minimum contacts; the commission of a single tort is sufficient.
1. The court also takes account of the trend of recognizing personal jurisdiction
based on minimum contacts, not so much on territorial presence in the state.
2. Finally, it restates the contract-based theory that a corporation enjoying the
protection/benefit of the laws while doing business in a state must be held
responsible for obligations it incurs within the state – thus the suit is fair.
c. Related notes from class
i. This case is not a U.S. Supreme Court case, so its constitutional analysis is not
precedent.
ii. This case shows that there are two parts to any personal jurisdiction case:
1. What is authorizing service of process? (e.g. long-arm statute – a law that is
required for a state to be able to reach outside its territory)
2. Does that state action comport with the Constitution?
iii. Influence of Shoe: Before that case, the law was that process can be served on anyone
in the state. After that case, laws were changed enabling people who commit a tort in
a particular state to be served by that state no matter where they are.
5. Personal Jurisdiction – Trends & Forum State’s Interest: McGee v. International Life Insurance, 1957
(Optional Squib)
a. Overview
i. U.S. Supreme Court (orig. CA state court, then TX state court)
ii. Had to do with enforcing a life insurance policy made by an AZ corporation to a
policyholder in CA. CA ruled that foreign corporations could be sued in CA for
insurance contracts with in-state residents. Plaintiff tried to get this enforced in TX;
TX court said CA judgment void under 14th Amendment. Supreme Court upheld the
CA decision.
b. Personal Jurisdiction – Important things that other cases cite
i. Trends: With increased nationalization of commerce, there are more interstate
business transactions. A trend has thus developed toward expanding the scope of
state jurisdiction over foreign corporations and non-residents.
ii. Forum state’s interest: A state has a “manifest interest in providing effective
means of redress for its residents” when foreign entities injure them. This is
often mentioned as an ‘other factor’ that supplements the “minimum contacts”
test of PJ.
c. Related notes from class
i. This case and Hanson came out different ways, causing the Court to put the issue of
PJ on hold until 1980 (World Wide Volkswagen).
6. Personal Jurisdiction – Unilateral Activity: Hanson v. Denckla, 1958 (Optional Squib)
a. Overview
i. U.S. Supreme Court (orig. FL state court)
ii. Had to do with a trust made in a DE bank by woman who moved to FL. Her family in
FL sued the DE trustee bank. The Court ruled in favor of defendant – no PJ because
no minimum contacts.
b. Personal Jurisdiction – Important things that other cases cite
i. The unilateral activity of a plaintiff who claims some relationship with a nonresident defendant cannot satisfy the requirement of minimum contact with the
forum state. It is essential in each case that there be some act by which the
defendant purposefully avails itself of the privilege of conducting activities within
the forum state, thus invoking the benefits and protections of its laws.
c. Related notes from class
i. This case and McGee came out different ways, causing the Court to put the issue of PJ
on hold until 1980 (World Wide Volkswagen).
7. Personal Jurisdiction – Two-Part Test: World-Wide Volkswagen v. Woodson, 1980
a. Overview
i. U.S. Supreme Court (orig. Oklahoma state court)
ii. Robinsons buy an Audi from Seaway Volkswagen in NY and gets into an accident in
Oklahoma. Plaintiffs sue Seaway (retail dealer), World-Wide (regional distributor),
Volkswagen of America (importer), and Audi (manufacturer). Seaway and WW
object to personal jurisdiction because they don’t do business in OK. Lower court
finds in favor of plaintiffs under “minimum contacts”/foreseeability argument.
Supreme Court reverses.
b. Personal jurisdiction
i. Question: Does the Oklahoma court’s exercise of personal jurisdiction over these nonresident corporations, whose only connection to the state is the fact that a car they sold
in NY is involved in an accident in OK, violate the Due Process Clause?
ii. Answer: Yes. Defendants have no “contacts, ties, or relations” with the State of
Oklahoma, so the state cannot exercise jurisdiction over them.
iii. Reasoning: The court mostly bases their decision on the Shoe “minimum contacts”
test (whose precedents they summarize nicely). However, we see the beginnings of a
two-part test also taking into account “other factors” regarding “traditional notions of
fair play and substantial justice.”
1. This second prong of the test relates to the “reasonableness” of the
relationship between the defendant and forum.
The court asserts that there are no “affiliating circumstances” that would allow the
defendant to pass the minimum contacts test because they conduct and solicit no
business in the state. In terms of “other factors,” the court also clarifies the
“foreseeability” benchmark, saying that the only foreseeability that matters is whether
or not the defendant’s conduct and connection with the forum state would cause him
to reasonably anticipate being sued there (which is a circular argument since this
judgment itself is what is determining whether he can anticipate being sued there).
The court refers as well to the “purposeful availment” factor brought up by Hanson,
saying that their intent allows defendants to anticipate lawsuits in various areas, while
the unilateral activity of the plaintiffs is not enough to cause defendants’ anticipation.
iv. Dissent: The dissent considers the “other factors” more important than does the
majority opinion; it says the Shoe standard of just minimum contacts is antiquated. It
places great weight on the forum state’s interest in litigating certain suits and the
burdens on the defendant (especially regarding mobility of his defense). These “other
factors” sometimes allow suits to potentially go forth in more than one state.
c. Related notes from class
i. See discussion (not explicitly related to this case) about considerations states make
when deciding to enact a broad or narrow long-arm statute.
ii. The plaintiffs here want to sue in state court because they think the local jury will be
more sympathetic to plaintiffs. The defendants (for the same reason) want to move to
federal court, but because plaintiffs have included Seaway and WW, there is not
complete diversity of citizenship so federal court does not have SMJ.
iii. The two-part test taking shape is (1) minimum contacts, and (2) other factors of
fairness and justice. In this case, that second prong combines foreseeability with
intention (purposeful availment)—intention to create minimum contacts by doing
business in OK or even putting cars into the “stream of commerce” with the intention
of them getting to OK. The consumer moving the product by his own accord outside
the place the retailer sold it does not count.
8. Personal Jurisdiction – Two-Part Test: Burger King v. Rudzewicz, 1985
a. Overview
i. U.S. Supreme Court (orig. FL federal district court)
ii. Two MI residents opened a Burger King franchise in MI by contracting with BK
headquarters in FL. They did not pay monthly payments, and BK sued them in FL for
breach of contract. Defendants challenged personal jurisdiction. Lower court found
for plaintiff; appeals court for defendant; Supreme Court reversed (finding for
plaintiff—FL does have personal jurisdiction).
b. Personal jurisdiction
i. Question: Does the FL district court’s exercise of personal jurisdiction over the MI
residents violate due process?
ii. Answer: No. Defendant established a substantial and continuing relationship
with the forum state, received fair notice from contract documents and the
course of business that he might be subject to suit there, and has failed to
demonstrate how jurisdiction there would be fundamentally unfair. Thus
jurisdiction in FL does not violate due process.
iii. Reasoning: The court discusses the two-part test begun in World-Wide more explicitly.
(This opinion was written by the author of the World-Wide dissent.) “Once it has
been decided that a defendant purposefully established minimum contacts within the
forum state, these contacts may be considered in light of other factors to determine
whether the assertion of PJ would comport with ‘fair play and substantial justice.’ …
These considerations sometimes serve to establish the reasonableness of jurisdiction
upon a lesser showing of minimum contacts than would otherwise be required.”
1. Examples of “other factors”: The burden on the defendant; the forum state’s
interest in adjudicating the dispute; the plaintiff’s interest in obtaining
convenient and effective relief; the interstate judicial system’s interest in
obtaining most efficient resolution; shared interest of furthering social policy.
2. This case also counts as a factor the fact that defendant knew he could
potentially be held liable in FL. Thus the two-part test: “his deliberate
affiliation with the forum state and the reasonable foreseeability of possible
litigation there”
Note that the minimum contacts test is further narrowed down by limiting it to only
those contacts created deliberately by the defendant, or that represent continuing
obligations on the part of the defendant, leading him to receive the benefits and
protections of doing business in the state.
Also, the court reaffirms the importance of examining the specific facts of each case
rather than utilizing any “talismanic jurisdictional formulas.”
iv. Dissent: The dissent argues that there is unfairness in submitting the defendant to FL’s
jurisdiction. Defendant was primarily dealing with the MI office, not the FL
headquarters; thus he had no reason to anticipate litigation in FL.
c. Related notes from class
i. Note the difference between choice-of-law provisions and jurisdictional provisions.
Just because FL law can be applied to the case does not mean it has to be tried in FL;
MI courts could apply FL law as well. However, it remains true that the facts of the
case associate it with FL.
ii. Note as well that the rule the majority establishes (use “other factors” to help plaintiff
bring defendant into court when minimum contacts are minimal; force a defendant to
show “other factors” when contesting jurisdiction if minimum contacts are great) cuts
both ways in favor of the plaintiff. Justice Brennan was extremely liberal and wanted
to help the “little guy.”
iii. We have now moved from the Shoe “minimum contacts” test to a complex two-part
test in which the two parts have a complicated relationship and the second part
includes many factors.
9. Personal Jurisdiction – Stream of Commerce: Asahi Metal v. Superior Court, 1987
a. Case overview
i. U.S. Supreme Court (orig. California state courts)
ii. Zurcher had a motorcycle accident in California. He sued Cheng Shin (Taiwanese
manufacturer of motorcycle tube), who filed a cross-complaint for indemnification
against Asahi (Japanese manufacturer of tube part). All claims settled except for
Cheng Shin’s claim against Asahi. Asahi argued that there was no personal
jurisdiction in California. After many reversals, Supreme Court ruled in Asahi’s favor.
b. Personal jurisdiction
i. Question: Does the mere awareness on the part of a foreign defendant that the
component it manufactured, sold, and delivered outside the U.S. would reach the
forum state in the stream of commerce constitute “minimum contacts” between the
defendant and the forum state such that the exercise of jurisdiction “does not offend
traditional notions of fair play and substantial justice”?
ii. Answer: (no majority opinion) No. All justices agree that the fairness requirement
is not met, and that this requirement can defeat personal jurisdiction even if
minimum contacts may or may not be present. Regarding minimum contacts,
two interpretations are offered, and the debate is not resolved.
iii. Minimum contacts issue – stream-of commerce standard (introduced in World Wide)
has two interpretations
1. Some courts allow an exercise of PJ to be based on no more than the
defendant’s act of placing the product in the stream of commerce. These
courts have held that mere foreseeability or awareness is a constitutionally
sufficient basis for PJ. This is a more liberal interpretation (Brennan).
2. Other courts require the action of the defendant to be more purposefully
directed at the forum state than the mere act of placing a product in the stream
of commerce. These courts require something more than awareness of the
product’s entry into the forum state through the stream of commerce. This is
a more conservative (narrower) interpretation.
3. The Supreme Court in this case is split on the issue.
iv. Fairness issue – “other factors”
1. All agree that the other factors are not present. The burden on the defendant
is severe (foreign legal system); California has little interest in deciding the
matter
c. Related notes from class
i. Even if Cheng Shin got a judgment against Asahi in California, it would be difficult to
execute in Japan. Japanese courts might re-try the personal jurisdiction issue.
ii. Which of the two interpretations of stream-of-commerce best fits with globalization?
iii. Think of the two purposes of Due Process. One is to control each state within a
federal system. The other is to defend the individual’s right not to be dragged into
court in a faraway state. This second right can be waived, but then are you also
waiving federalism?
10. Personal Jurisdiction – Specific vs. General: Helicopteros Nacionales v. Hall, 1984
a. Case overview
i. U.S. Supreme Court (orig. Texas state courts)
ii. A helicopter owned by Helicol crashed in Peru with Americans on board. Their
families sue Helicol (and others) in Texas. Helicol argues against PJ, saying that there
is not enough to sustain a suit in Texas. (Helicol bought helicopters from a Texas
company, trained pilots there, and attended meetings there.) After many reversals, the
Supreme Court ruled in favor of Helicol (no PJ).
b. Personal jurisdiction
i. Question: Is personal jurisdiction justified when the cause of action against a
corporation does not arise out of, or is not related to, the corporation’s contacts with
the forum state?
ii. No. If a cause of action does not arise out of, or is not related to, the defendant’s
contacts with the forum state, general jurisdiction is not warranted.
iii. Reasoning: The majority does not consider specific jurisdiction possible in this case
because they do not consider the claim to arise out of Helicol’s contacts with Texas.
They do not consider Helicol’s activities in Texas to be “continuous and systematic
general business contacts.” They decide that the purchases and related trips are not
enough to warrant PJ over Helicol because the cause of action was unrelated.
iv. Dissent: Brennan argues that there are both general and specific jurisdiction over
Helicol in this case. He argues that Helicol has purposefully availed itself of the
forum, and that there is a direct relationship between the cause of action and Helicol’s
contacts with the forum. Additionally, he argues that Helicol’s contacts with Texas
are continuous commercial contacts and justify general jurisdiction.
1. He distinguishes between “arising out of” and “related to,” arguing that the
“related to” standard (which is broader) is applicable here.
c. Related notes from class
i. Is cause of action related to defendant’s contacts with forum? If yes, you can get
specific jurisdiction. If no, you need general jurisdiction. To get general jurisdiction,
there must be many continuous contacts with the forum. A resident of a certain state
has such strong contacts with it that they can be sued there for any reason. If
sufficient contacts do not exist, you can get specific jurisdiction if the cause of action
relates to the few contacts that do exist.
ii. In this case, they try to link a tort suit to a business transaction. It might not meet the
narrow “arising out of” standard, but it may meet the broader “related to” standard.
iii. Which has a better case for being heard in the U.S., Hall or Asahi?
11. Personal Jurisdiction – The Internet: Snowney v. Harrah’s Entertainment, 2005
a. Case overview
i. California Supreme Court (orig. California state courts)
ii. Snowney (Cal. resident) sued a group of Nevada hotels in a class action suit for false
advertising; they failed to alert customers of a $3 energy fee. These hotels advertised
heavily in California and maintained a web site targeted at Cal. residents. Plaintiff
also made reservations from Cal. by phone. California Supreme Court ruled that there
was personal jurisdiction over the hotel.
b. Personal jurisdiction
i. Question: May a state exercise specific jurisdiction over a foreign hotel that advertises
in that state and maintains a web site targeted at that state’s residents if the cause of
action is related to these contacts?
ii. Answer: Yes. If the hotel has purposefully availed itself of forum benefits, and if
the controversy is related to or arises out of the defendant’s contacts with the
forum, and if the assertion of personal jurisdiction comports with “fair play and
substantial justice,” specific jurisdiction may be exercised.
iii. Reasoning: The court explicitly uses a three-part test to determine specific PJ.
1. Purposeful availment – This requirement focuses on the defendant’s
intentionality. Here, the hotel’s web site establishes personal availment by
focusing specifically on California residents; the hotel also has derived a
benefit from their Internet uses in California. There is not any need to use the
Zippo sliding scale because purposeful availment (as far as the web site) is
met. In any case, the web site in conjunction with the hotel’s other contacts in
the state clearly constitute purposeful availment.
a. The court’s understanding of this concept: “Purposeful availment
exists whenever the defendant purposefully and voluntarily directs its
activities toward the forum state in an effort to obtain a benefit from
that state.” It may exist even though the defendant did not invoke the
legal protections of the forum state.
2. Relatedness – The controversy is related to/arises out of defendants’ contacts
with California. The court uses a “substantial connection test” and finds that
there is a substantial connection because the injury relates directly to the
content of defendants’ advertising in the state.
3. Fairness – Defendants do not contend that the exercise of PJ wouldn’t be fair.
c. Related notes from class
i. A class action suit like this is good because it prevents a large company from getting
away with taking a little bit of money from a lot of different people. Class action suits
are the private sector doing the government’s regulatory job (more efficiently).
ii. The internet issue is still being played out. It is hard to know with the internet where
the injuries are occurring.
12. Personal Jurisdiction – Property: Harris v. Balk, 1905
a. Overview
i. U.S. Supreme Court (orig. Maryland court, case #1, and North Carolina court, #2)
ii. Harris (NC resident) owed $180 to Balk (NC resident), who owed $344 to Epstein
(MD resident). Harris visited Maryland, and while there, Epstein instituted a
garnishee proceeding in MD court, attaching Harris’s debt to Balk. Judgment was
entered against Harris and he paid Epstein the $180. Later, Balk sued Harris in North
Carolina for the same $180. Harris said he already paid, but Balk said the NC
judgment was invalid because NC had no personal jurisdiction. Trial court ruled for
Balk, but Supreme Court reversed and ruled in favor of Harris (there was PJ).
b. Personal jurisdiction
i. Question: Does a court have quasi in rem personal jurisdiction over a person’s debt?
ii. Answer: Yes. A debtor’s obligation to pay can be enforced by the court of any
foreign state if the debtor has been served while present in the state.
iii. Reasoning: In a quasi in rem case using a debt as the property to be attached, it is
nothing but the obligation to pay that is attached, and that obligation of the debtor
goes wherever he goes.
c. Related notes from class
i. Epstein instituted a quasi in rem proceeding by attaching Balk’s “property” while it
was in the state of Maryland—that property was Harris’s debt to Balk. This
establishes jurisdiction over Balk’s property and allows Epstein to take it. (A
garnishee proceeding sues the property itself.)
ii. The Supreme Court continues to follow the Pennoyer standard. The idea is still that if
a state attaches property within the state at the beginning of a lawsuit, the suit can be
adjudicated up to the value of the property (quasi in rem). The judgment can never be
good for more than the value of the attached property that has created the jurisdiction.
iii. This suit also represents a move from tangible property to intangible property (debt)
as a basis for personal jurisdiction.
iv. Here the state is expanding personal jurisdiction within the state by expanding the idea
of property. This is the inverse of what happened with the advent of cars (then, the
state expanded PJ outside of the state).
13. Personal Jurisdiction – Property: Shaffer v. Heitner, 1977
a. Overview
i. U.S. Supreme Court (orig. Delaware state courts)
ii. Heitner, a Greyhound shareholder, sued Greyhound executives in a shareholder
derivatives suit on behalf of the corporation (see notes for more info about this
process). He sues them for engaging in business practices that have decreased the
value of Greyhound stock (thru lawsuits). He sues them in Delaware even though the
company is run in Arizona and the business practices took place in Oregon (but the
corporation is incorporated in Delaware). Greyhound contests PJ. Delaware courts
agree that there is PJ, but Supreme Court reverses and says that there is not.
b. Personal jurisdiction
i. Question: (a) Is the standard used to evaluate personal jurisdiction in quasi in rem
cases still valid? (b) Does the state where a corporation is incorporated have
jurisdiction in a quasi in rem case where the corporation’s stock is the property
attached?
ii. Answer: (b) No. All assertions of state-court jurisdiction must now be evaluated
according to the Shoe minimum contacts standard. (b) Not when the defendants’
connections with the state do not meet the minimum contacts standard (even if
property within the state has been attached).
iii. Note: The new standard will only affect quasi in rem proceedings. With in rem
proceedings, the property located in the state will in itself create minimum contacts
because it is the very subject of the litigation.
iv. Reasoning:
(a) The standard needs to be re-evaluated because, unlike with in personam cases, in
rem standards have not evolved to accommodate notions of “fair play and substantial
justice.” After all, in rem cases affect not things, but people’s interest in those things.
To get jurisdiction over people, Due Process must be satisfied.
(b) The property is not the subject matter of the litigation, and the underlying cause of
action is not related to the property either. The forum state has no interest in this case
(if it did, its statutes would reflect that interest). The forum is not fair for the
defendant, who has had nothing to do with the state of Delaware.
v. Concurring: Stevens notes that if the court does not decide this way, anyone who
owns stock in a company incorporated in Delaware will be subject to suit there, and
that is not reasonable.
vi. Dissent: The decision may be too broad; the issue is not yet ready for decision because
it has not yet passed through state courts. There are not enough facts to justify
deciding whether minimum contacts exist in this case.
c. Related notes from class
i. There are many layers of legal fiction at work here: (1) There is such a thing as stock.
(2) The stock physically exists in the state of Delaware. (This is a fiction created by a
Delaware law.) (3) The stock can be “seized” by the court.
ii. Notes about quasi in rem – Now the same basis is used for personal jurisdiction for
quasi in rem and in personam cases (minimum contacts). For quasi in rem, the
property itself can’t be the minimum contact if there’s no connection between the
property and the cause of action.
iii. Now, property alone is not enough to create jurisdiction in a quasi in rem case,
although it is still necessary. Why require having property in the state when
jurisdiction can be created through minimum contacts anyway? Quasi in rem is used
in part to guarantee that there will be an asset remaining at the end of the case that will
be able to satisfy a judgment for plaintiff. It can be useful when the defendant’s
whereabouts are unknown (though you can still get in personam jurisdiction over him
in this case). Also, it is more vindictive to use this method.
iv. *The effect of this decision is to NARROW the state’s reach of personal jurisdiction.
This is the OPPOSITE of what the minimum contacts standard did for in personam
cases.
14. Personal Jurisdiction – Physical Presence: Burnham v. Superior Court, 1990
a. Overview
i. U.S. Supreme Court (orig. California state courts)
ii. Mrs. Burnham sues Mr. Burnham (NJ resident) for divorce in CA. When he comes to
visit the children, she serves him with process. He objects to PJ because he does not
have minimum contacts. Court rules that there is personal jurisdiction over him.
b. Personal jurisdiction
i. Question: Does the Due Process Clause of the 14th Amendment deny a state’s courts
jurisdiction over a nonresident, who was personally served with process while
temporarily in that state, in a suit unrelated to his activities in the state?
ii. Answer: No. States have jurisdiction over nonresident visitors who are served
while physically present in the state.
iii. Reasoning: While the Court agrees on the judgment, it disagrees as to the reasons.
The chief debate is between Justices Brennan and Scalia.
1. Scalia: The use of physical presence as a basis for PJ has a long history. It
was the practice when the 14th Amendment was adopted; the concept of due
process was in part defined by this very practice. Shaffer does not apply
because it was about absent defendants, not ones present in the state.
Brennan’s standard is too subjective; Scalia likes his because it is a hard and
fast rule. He says the legislatures can change the practice if they want, but so
far they have not.
2. Brennan: Just because a practice is tradition does not mean it should not be reevaluated. All rules of jurisdiction, even ancient ones, must satisfy
contemporary notions of due process. The Court changed the rules with
Shaffer, it is not out of the question to do so again. Yet it is not necessary in
this case, because the current system as it stands satisfies his conception of
fair play and substantial justice.
c. Related notes from class
i. Scalia interprets the Due Process Clause according to tradition; Brennan interprets it
according to fairness. Brennan says that these days physical presence is not always
necessary according to Shoe – even though fairness is not a hard and fast rule, but
rather a subjective standard, it is still the standard the courts have been moving
towards with recent decisions. Scalia says that Brennan’s conception of fairness does
not adequately protect defendants. Scalia’s solution of having the legislatures deal
with this is unrealistic – the people who would want a state to change its PJ statutes
are nonresidents who have no say (can’t vote to have legislature change the laws).
ii. These justices don’t really care about PJ; this case is about abortion. The 14th Amend
is being debated because of substantive due process.
1. Procedural due process: the steps the government has to go through before
depriving you of life/liberty/property
2. Substantive due process: certain types of life/liberty/property can’t be taken
away at all
The two positions are important in the abortion debate – tradition (abortion laws
existed when 14th Amendment was enacted) vs. fairness (evolving contemporary
conceptions of due process)
15. Personal Jurisdiction – Consent: Carnival Cruise Lines v. Shute, 1991
a. Overview
i. U.S. Supreme Court (orig. federal district court in WA)
ii. Mrs. Shute (WA resident) slips and injures herself on a Carnival cruise and sues in
WA federal district court for personal injury. Carnival (FL company) says no PJ
because the contract had a clause that all suits would be brought in FL. District court
rules in favor of plaintiff, but Supreme Court reverses—there is no PJ in WA.
b. Personal jurisdiction
i. Question: Can a plaintiff sue in a state that is not that state specified in a contract’s
forum-selection clause?
ii. Answer: No. The Court will enforce consent to jurisdiction as specified in a
contract’s forum-selection clause.
iii. Reasoning: The Court did not consider minimum contacts in this case, only the forumselection clause’s enforceability. The Court listed three policy-related reasons why
this clause should be enforced.
1. A cruise line has a special interest in limiting the fora in which it can be sued.
2. This clause has the beneficial effects of dispelling confusion about where suits
may be litigated and conserving judicial resources that would be devoted to
deciding pretrial forum motions.
3. Passengers benefit from this policy because the money that Carnival saves in
limiting litigation costs is passed onto passengers in the form of cheaper
tickets.
c. Related notes from class
i. These reasons have to do with the Court’s notion of fairness.
ii. This case is not really about PJ, but about the contract, asking if it is the kind of
promise that the law should enforce.
iii. This case shows the Court allowing consent to trump everything we’ve been talking
about. (Signing a contract with a forum-selection clause when purchasing a cruise
ticket is equivalent to consenting to personal jurisdiction in the selected forum.) This
makes life easier for the courts.
16. Procedural Due Process – Notice: Mullane v. Central Hanover Bank, 1950
a. Overview
i. U.S. Supreme Court (orig. NY state courts)
ii. In NY “supreme court” (lower court), bank sues for judicial settlement of accounts
(asking to be released from liability so no one can sue them later on for
mismanagement). Mullane is appointed to represent the beneficiaries of the trust. He
argues that the notice given to the beneficiaries was insufficient (it was published in
the local paper). The lower court finds in favor of the bank, Supreme Court reverses,
saying that notice was insufficient.
b. Notice
i. Question: Is it constitutionally sufficient to give notice by publication in a local paper
to beneficiaries on judicial settlement of accounts by the trustee of a common trust
fund established by the N.Y. Banking Law?
ii. Answer: No. Notice by publication in these circumstances is incompatible with
the requirements of the 14th Amendment as a basis for adjudication depriving
known persons whose whereabouts are also known of substantial property rights.
iii. Reasoning: As far as PJ goes, a state always has jurisdiction over the adjudication of
trusts within the state as long as there is notice and opportunity to be heard. A
fundamental requirement of due process in any proceeding is notice reasonably
calculated, under all the circumstances, to apprise interested parties of the action and
afford them an opportunity to be heard. The means employed must be such as one
desirous of actually informing the absentee might reasonably adopt to accomplish it.
The means employed at least has to be “not substantially less likely” to give notice
than other feasible/customary substitutes. Here, publication alone is no more than a
feint at giving notice. Publication might have been enough for those beneficiaries
whose whereabouts or interests were not known, or whose interests are conjectural or
future. But for beneficiaries with known whereabouts and interests, publication is not
enough, because the bank is able to better contact them.
c. Related notes from class
i. The N.Y. Banking Law allows a release from liability in suits for mismanagement,
fraud, theft. It stops other lawsuits from happening through preclusion. The point of
ii.
iii.
iv.
v.
vi.
vii.
viii.
having this first proceeding is to have it be contemporaneous with anything that might
be going on at the bank that will be investigated.
This adversarial system is an alternative to a regulatory system (e.g. auditing the bank).
Here, we have litigants argue that the bank did or did not mismanage. The powerful
tools of the legal system (discovery, subpoenas) can be utilized, and also, only a
judgment can preclude future suits—not an audit.
The court says that the bank could never successfully give actual notice to every
single person with an interest—some people may have an interest in the trust who
aren’t even born yet (extreme example). (They are still precluded from suing in the
future because their interests were represented by someone else, here Mullane, and
thus they are bound to the outcome even though they didn’t have notice and OTBH.)
Anyway, notice must be reasonably calculated to reach people.
Possible methods of notice: personal service; attachment; publication; mail. Mail is
determined to be the most reasonable method here. Really, there is no good answer to
what constitutes reasonable notice. We discussed the possibility of notice by e-mail
as a method and if opting into that system made it more viable.
In this case the Court unanchors notice from the type of lawsuit involved (in personam
/in rem)—a departure from Pennoyer. A moment of legal realism, acknowledging
that these categories are legal fictions. The new standard (reasonableness of notice)
applies in all cases. Note that this is the same Court that created a new standard
(minimum contacts) for PJ in Shoe. This standard is more protective than what came
before; it does more for the defendant. At the same time, it does not guarantee that
you even get notice; the state just has to reasonably try. The judicial system doesn’t
guarantee perfection.
The reality of notice: People can challenge notice while the original suit is going on,
but if you show up to court and argue no notice, the judge will probably not entertain
your challenge.
The context of notice: Notice is evaluated in the context of the system of notice that
we have (we could have imagined alternative systems). Why do we care about notice?
Its instrumental value—gets defendant to court. This would not matter if no OTBH.
Should you be able to consent to giving up your rights to notice/OTBH the way you
can consent to PJ? In the criminal system, this can happen, with plea bargains—
although this is not done in advance of any crime being committed so not the same.
17. Procedural Due Process – Notice: Jones v. Flowers, 2006
a. Overview
i. U.S. Supreme Court (orig. Arkansas state court)
ii. Jones did not pay property tax on his house and the state took it and sold it. Before
doing so, it attempted to notify him in various ways (certified mail, publication), but
the certified mail was returned “unclaimed.” After the house was sold to Flowers,
Jones sued Flowers to get him out of the house. The lower court said that notice was
sufficient, but the Supreme Court said that the notice was insufficient because the
state didn’t do anything after finding out that its notice had failed.
b. Notice
i. Question: Has the state done all it is expected to do after it has used certified mail to
give notice and learned that the notice has failed?
ii. Answer: No. Notice was inadequate here, because the state should have taken
any of the additional reasonable steps before taking an individual’s property.
iii. Reasoning: Actual notice was not required, only a reasonable attempt at notice (as
Mullane says). The attempt at notice here was not reasonable because of the state’s
failure to follow up. The state is required to consider unique information about an
intended recipient. Here the occupant of the house (after Jones) was not obligated to
inform Jones that he had received certified mail (because the occupant could not
receive or open it). Anyway, there were other reasonable steps the state could have
taken. The notice could have been resent by regular mail or posted on the door.
However, there is a limit on what the state is expected to do; it did not have to search
for Jones’ address in a phone book or other government records.
iv. Dissent: Due process was satisfied. The state satisfied due process by attempting to
contact Jones by certified mail, and exceeded the constitutional minimum by
publishing notice in a local newspaper. The proposed alternative methods are
burdensome, impractical, and no more likely to succeed than the methods actually
employed by the state.
c. Related notes from class
i. Mullane said that mail was reasonably calculated to give notice; here the court says
that certified mail was not reasonably calculated to give notice because the state knew
that the method failed and did not do anything about it.
18. Procedural Due Process – OTBH: Goldberg v. Kelly, 1970
a. Overview
i. U.S. Supreme Court (orig. NY federal district court)
ii. Group of welfare recipients sued the welfare system administrator about the process
by which welfare is terminated. They argued that there should be a pre-termination
hearing. The court found in their favor.
b. Opportunity to be heard
i. Question: Does a state that terminates welfare payments to a recipient without
affording him the opportunity for an evidentiary hearing prior to termination deny
him procedural due process in violation of the Due Process clause?
ii. Answer: Yes. Only a pre-termination evidentiary hearing satisfies the
constitutional command.
iii. Reasoning: The state must give you due process before depriving you of life, liberty,
or property. Welfare can be considered property and thus due process is required. We
must not deprive someone of their means of survival without OTBH. The interest of
the eligible recipient in uninterrupted receipt of public assistance, coupled with the
state’s interest that his payments not be erroneously terminated, clearly outweighs the
state’s competing concern to prevent any increase in its fiscal and administrative
burdens. The hearing should have minimum procedural safeguards adapted to the
particular characteristics of welfare recipients. They must be able to confront adverse
witnesses and present their cases orally.
iv. Dissent: The increased number of hearings is too burdensome on the government and
imposes a huge expense. It is unfair to the government to allow those who draw
undeserved payments to keep collecting them during the hearing process knowing that
the government can never recoup this money. Moreover, welfare should not even be
considered property for the sake of due process, especially when unfairly gotten.
There is no precedent for the court’s decision in this case.
c. Related notes from class
i. Key question: Is the government depriving welfare recipients of their property? Is
welfare their property? The Court says yes here.
ii. A lot of due process is given to welfare recipients, but the courts say that more of it
should happen before termination of benefits.
iii. This case is unusual because the Court is actually prescribing a form for the hearings.
iv. *The Court is telling us how to read the due process clause, saying that it varies by
context. Two things must be weighed:
1. The interests of the welfare recipient—the value of the necessities they
receive (enormous value placed on this even though government has no
obligation to provide welfare in the first place—no constitutional basis. You
can’t force the government to help you, but you can force it to not stop
helping you, once it’s started, without due process)
2. The interests of the government—increased costs (new system would increase
number of hearings, and also with hearings afterward the government would
no longer get to stop paying benefits as early) (Although on this side you can
also claim that the govt has an interest in protecting its citizens)
19. Procedural Due Process – OTBH: Mathews v. Eldridge, 1976
a. Overview
i. U.S. Supreme Court (orig. ?? doesn’t say)
ii. A group of social security recipients sue the social security secretary about the process
by which benefits are terminated—very similar to Goldberg. The Court goes the
opposite way here and says that the post-termination hearing is constitutional.
b. Opportunity to be heard
i. Question: Does the Due Process clause require that, prior to termination of Social
Security benefit payments, the recipient be afforded an opportunity for an evidentiary
hearing?
ii. Answer: No. An evidentiary hearing is not required prior to the termination of
disability benefits; the present administrative procedures fully comport with due
process.
iii. Reasoning: Some form of hearing is definitely required before an individual is finally
deprived of a property interest. However, due process is flexible and calls for
procedural protections as each particular situation demands. Three factors must be
considered:
1. The private interest that will be affected by the official action.
2. The risk of an erroneous deprivation of such interest through the procedures
used, and the probably value (if any) of substitute/additional procedural
safeguards
3. The government’s interest, including the function involved and the fiscal
burdens that additional/substitute procedures would entail.
iv. Factor #1: The situation is different from Goldberg because the financial need of
social security recipients is less than that of welfare recipients. Even though there
would be financial hardship if benefits were wrongfully terminated, it would not be as
serious.
v. Factor #2: There is a lower risk of error in the existing procedures here than in
Goldberg because the test is more objective (medical assessment). A pre-termination
hearing would not greatly decrease this risk.
vi. Factor #3: There would be a huge cost on the government because of increased
hearings and the expense of providing benefits to ineligible recipients pending
decision.
c. Related notes from class
i. This case comes out oppositely from Goldberg because the Court does not use the
same test. Here factor #2 (the “accuracy lens”) is a new consideration. This threepart test is the state of the law today for due process. However, it is problematic in
that it is difficult to tell what the current accuracy of a procedure is and whether the
results would change with an additional/substitute procedure—speculative.
ii. The three-part test is a combination of normative factors (the value of OTBH) and
consequential factors (will a new procedure turn out better than the current one?).
iii. What if the current procedure were right 100% of the time? Would there still be a
need for OTBH?
20. Procedural Due Process – OTBH: Fuentes v. Shevin, 1972
a. Overview
i. U.S. Supreme Court (orig. Florida federal district court)
ii. Two cases are considered, the FL case and one from PA. In FL, Fuentes purchased a
gas stove and stereo from Firestone under a conditional sales contract (with monthly
payments). A dispute developed and Firestone sued in small claims court to repossess
the items. Before Fuentes knew about the action, Firestone got a writ of replevin to
seize the goods. Fuentes sued in federal court to challenge the law’s constitutionality.
(The Penn. case is very similar to all of this) Lower courts upheld the law, but the
Supreme Court overturned it.
b. Opportunity to be heard
i. Question: Are these state statutes constitutionally defective in failing to provide for
hearings “at a meaningful time”?
ii. Answer: Yes. The Florida and Pennsylvania prejudgment replevin provisions
work a deprivation of property without due process of law insofar as they deny
the right to a prior opportunity to be heard before chattels are taken from their
possessor.
iii. Reasoning: Neither of these laws provides for notice or OTBH before the seizure.
The purpose of the OTBH is to prevent arbitrary (unfair or mistaken) deprivation of
property. Thus it must be granted when the deprivation can still be prevented. Both
laws violate this principle. The interests in the chattels being taken are protected by
the 14th Amendment (protecting “any significant property interest”). There are some
situations that justify postponing notice and OTBH, but this case is not one of these
exceptions. (e.g. seizure is directly necessary to secure governmental or public
interest; state has strict control over its monopoly of legitimate force…) Also, the
appellants have not waived their rights to an OTBH by signing sales contracts.
iv. Dissent: The creditors, not just the debtors, have an interest in this property. Also, this
opinion proposes no real change because in the future, creditors can just include a
clause in their contracts waiving debtors’ OTBH.
c. Related notes from class
i. Here, the property seized is itself the subject of the lawsuit (contrast with Doehr).
ii. Why attach this property at the outset? To make sure defendant doesn’t sell them, to
prevent defendant from being judgment proof? *Possibly – but only because the
defendant is poor. To get property back in the best condition they can? No, judgment
could be adjusted to account for that. Actually, plaintiff wants to be able to use the
property for the purposes they desire – re-leasing it to someone else. Yet the
defendant also wants to use it. The plaintiff has the advantage under the FL/PA laws,
even though both have an interest in the property.
21. Procedural Due Process – OTBH: Mitchell v. W.T. Grant Co., 1974
a. Overview
i. U.S. Supreme Court (orig. Louisiana state court)
ii. A creditor made an installment sale of the goods to petitioner, then filed an affidavit
of delinquency. A state trial judge in Louisiana ordered the sequestration of the
property. Petitioner challenged law’s constitutionality, but Supreme Court upheld law.
b. Opportunity to be heard
i. Question: Did the sequestration violate the Due Process Clause of the 14th
Amendment because it was ordered ex parte, without prior notice or opportunity for a
hearing?
ii. Answer: No. The Louisiana standards regulating the use of the writ of
sequestration are constitutional.
iii. Reasoning: Both seller and buyer had current, real interests in the property.
Resolution of the due process question must take into account the interests of the
seller (not just buyer) of property. The writ is only issued when the claim is made
based on specific facts. This case is different from Fuentes because in that case, the
fault standard for replevin was too complex for ex parte determination (it was subject
to factual determination and adversarial input). Here, though, the facts relevant to
obtaining a writ of sequestration are narrowly confined—thus far less danger of a
mistaken seizure. An adversary hearing before the seizure has less utility and anyway
it is available immediately after the seizure.
c. Related notes from class
i. How is this case different from Fuentes?
1. Specific facts have to be shown (accounting records, original contract) –
though in FL it was not so different, just oral vs. written, but still here we
have a one-sided set of facts.
2. Difference analogous to Goldberg (welfare) vs. Mathews (SS) – the accuracy
issue, process believed to be more accurate when the matter revolves around
specific facts that can be documented
3. Tort case vs. contract case (see reason #2)
4. Different Supreme Court justices, different interpretations?
22. Procedural Due Process – OTBH: North Georgia Finishing v. Di-Chem, 1975
a. Overview
i. U.S. Supreme Court (orig. Georgia state courts)
ii. Consideration of the issue of wage garnishment.
b. Opportunity to be heard
i. Question: Do provisions surrounding garnishment in the state of Georgia satisfy the
Due Process Clause?
ii. Answer: No. These provisions do not satisfy due process.
iii. Reasoning: The Georgia statute is vulnerable for the same reasons as the one in
Fuentes. No notice or opportunity for a hearing. The statute is saved by none of the
reasons in Mitchell. The bond provision is not helpful. The probability of irreparable
injury when bank accounts are seized is sufficiently great so that some procedures are
necessary to guard against the risk of initial error.
23. Procedural Due Process – OTBH: Connecticut v. Doehr, 1991
a. Overview
i. U.S. supreme Court (orig. Connecticut federal court)
ii. DiGiovanni sued Doehr for assault and battery in Conn. state court. When he filed the
action, he attached Doehr’s home. Doehr sued in federal court to challenge the
constitutionality of the law. Supreme Court overturned the law.
b. Opportunity to be heard
i. Question: 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 the attachment post a bond, satisfy
the Due Process Clause?
ii. Answer: No. Connecticut’s prejudgment remedy provision violates the
requirements of due process by authorizing prejudgment attachment without
prior notice or a hearing.
iii. Reasoning: The court applies the Mathews three-part test to this case, looking at:
1. The private interest that will be affected by prejudgment measure
2. Examination of the risk of erroneous deprivation through current procedures,
and probable value of additional/alternative safeguards
3. The interest of the party seeking the prejudgment remedy, with, nonetheless,
due regard for any ancillary interest the government may have in providing
the procedure or foregoing the added burden of providing greater protections
Part one: the property interests that attachment affects are significant. Doehr’s
property is not being taken, but his property rights are being impaired. (Expansion of
concept of “property” protected by Due Process.)
Part two: The risk of erroneous deprivation that the state permits here is substantial. It
is self-evident that the judge could make no realistic assessment concerning the
likelihood of an action’s success based upon these one-sided, self-serving, and
conclusory submissions.
Part three: The interests in favor of an ex parte attachment, particularly the interests of
the plaintiff, are too minimal to supply much consideration here. Plaintiff had no
existing interest in Doehr’s real estate; he only attached it to ensure availability of
assets. Yet there was no allegation that Doehr was about to transfer his real estate.
Also, no interest the government may have affects the analysis. And the state cannot
plead additional financial/administrative burdens involving pre-deprivation hearings
when it already claims to provide an immediate post-deprivation hearing.
iv. Bonds – not part of the majority opinion. Some justices think that a bond is needed in
addition to a pre-deprivation hearing as protection for the defendant.
v. Concurrence: The Court breaks new ground here in its concept of what is protected by
the Due Process clause. Also, the discussion of bonds is hypothetical here, and
unnecessary.
c. Related notes from class
i. Connecticut law allows DiGiovanni to attach Doehr’s property just on the basis of an
affidavit saying plaintiff thinks he can win the suit. No evidence required that Doehr
will try to alienate property.
1. Connecticut could save its statute by requiring that plaintiff show probable
cause that defendant is going to dispose of property before it’s attached.
ii. Discussion of probable cause in the criminal context (search warrants). If in civil suits,
the one-sided story is not enough to allow a judge to authorize attachment/seizure of
property, why is it enough in criminal cases? Lack of alternatives that would allow
criminal laws to be enforced; time interest; greater public interest…
iii. Bond issue. In some states, plaintiff posts bond to get property attached. Reason: if
later shown that attachment was wrongful (not if plaintiff loses case, that’s different),
defendant can get damages out of the bond. Money as a substitute for due process.
No clear answer on whether it’s to prevent plaintiffs from making spurious claims or
in order to satisfy damages to defendants that could arise from attachment.
iv. Message in this case is not that you can’t attach property, but that Connecticut didn’t
do it the right way.
v. Sometimes the government’s interest in having one-sided hearing is so strong that it
overrides due process rights. Examples of such circumstances:
1. Worried that giving notice will allow defendant to dispose of property before
attachment (fear that plaintiff won’t be able to collect if he wins)
2. Court’s jurisdiction (Pennoyer)
This provision is making sure that the legal system can work—making sure that
judgment is not meaningless. Fear of consequences of not grabbing property.
24. Subject-Matter Jurisdiction – Determining Citizenship: Mas v. Perry, 1974
a. Overview
i. U.S. Court of Appeals (orig. Louisiana federal district court)
ii. The Mas sue Perry for invasion of privacy (tort claim) in LA federal court. Perry
loses and then claims no SMJ because there was no diversity of citizenship
(challenging on appeal the court’s denial of his motion to dismiss for lack of SMJ).
Court affirms (there was SMJ/diversity).
b. SMJ/Determining citizenship
i. Question: Is there diversity of citizenship in this case?
ii. Rule of law: To be a citizen of a State within the meaning of Section 1332, a natural
person must be both a citizen of the United States and a domiciliary of that State.
(Mere residency in that State is not sufficient.) A person is domiciled in a State when
(a) he has his residence there, and (b) he intends to remain there.
iii. Answer: Yes. Under section 1332, the federal judicial power extends to the claim
of Mr. Mas, a citizen of France, against the appellant, a citizen of Louisiana. Mrs.
Mas is a citizen of Mississippi for diversity purposes, so the district court also
properly had jurisdiction of her claim.
iv. Reasoning: Complete diversity of parties is required in order to obtain diversity
jurisdiction. The diverse citizenship among adverse parties must be present at the
time the complaint is filed. For diversity purposes, a woman does not have her
domicile or State citizenship changed solely by reason of her marriage to an alien.
Until she acquires a new domicile, she remains a domiciliary and thus a citizen of
Mississippi. The result of this decision is desirable because the claims of the two
people arise from the same operative facts (judicial efficiency argument).
c. Related notes from class
i. This case arises under state law. The basis of the federal SMJ claimed is diversity of
citizenship.
ii. Mrs. Mas citizenship is what is important here because if it’s found that she’s from
LA, there’s not complete diversity. The court chooses the last place she was
domiciled. Using residence might be easier, but that’s not what the court does.
iii. Why do we have diversity jurisdiction at all? We want to protect out-of-staters from
state home courts (PJ moves you to the state court where you can get defendant – his
home state court. Why are we worried – why might out-of-state litigants have a better
chance in federal court?
1. Federal courts have a wider jury pool (though from same state)
2. Judge could be more fair (not locally elected, but federally appointed)
3. Federal court may have lower caseload
4. Theory that out-of-staters don’t have the opportunity to improve the state
court (through tax etc.)
iv. The law applied to the outcome of the case will be the same in both courts – the state
law is applied by the federal court (except in cases arising under federal law, in which
case diversity is not necessary to prove the case belongs in federal court)
v. If this system is designed to protect the out-of-stater, and if the defendant in a case is
the out-of-stater, shouldn’t the defendant choose which court? (They can move to
remove from state to federal court)
vi. Rule 12(b) puts forth various kinds of motions to dismiss. Rule 12(g) and (h) set forth
the timing requirements for those motions. Some are waived if not brought at
beginning, but SMJ can always be brought up.
25. Arbaugh
a. Case important only because of the timing requirements for different kinds of motions to
dismiss under Rule 12.
26. Subject-Matter Jurisdiction – Amount in Controversy: A.F.A. Tours v. Whitchurch, 1991
a. Overview
i. U.S. Court of Appeals (orig. New York federal district court)
ii. Whitchurch worked for AFA tour company. He resigned and took confidential
information (client contact info), intending to use it to start his own company. AFA
sued in federal court and Whitchurch claimed no SMJ because the $50,000 diversity
requirement was not met. Appeals court found in favor of AFA (there was SMJ).
b. SMJ/Amount in controversy
i. Question: Was the lower court correct to assume that the plaintiff could not prove
damages in excess of $50,000?
ii. Rule of law: The rule governing dismissal for want of SMJ in federal court is that the
sum claimed by the plaintiff controls if the claim is apparently made in good faith. It
must appear to a legal certainty that the claim is really for less than the jurisdictional
amount to justify a dismissal.
iii. Answer: No. The record in the district court did not permit the court to find with
legal certainty that the value of AFA’s claims did not exceed $50,000.
iv. Reasoning: The amount of damages recoverable in an action for misappropriation of
trade secrets may be measured either by the plaintiff’s losses or by the profits unjustly
received by the defendant. If punitive damages are permitted under the controlling
law, the demand for such damages may be included. Where the plaintiff seeks
injunctive relief, the value of his claim is generally assessed with reference to the right
he seeks to protect and measured by the extent of the impairment to be prevented by
the injunction. The court may look at past losses and also potential harm. Here, AFA
was not afforded a proper opportunity to make an evidentiary showing in support of
its claim for damages over $50,000. despite this, there was evidence in the record to
suggest that the court could not conclusively rule against damages in excess of
$50,000.
c. Related notes from class
i. The complaint isn’t the stopping point for determining whether damages might exceed
$50,000 – the plaintiff could be making it up to create SMJ. Have to police the
plaintiff. Assume all allegations are true, and see if damages exceed the minimum
requirement. The burden of proof of SMJ is on the person invoking SMJ, but it ends
up falling on the defendant to show that plaintiff’s claims are exaggerated. In doing
so, the defendant may be helped by state statute caps on damages in certain kinds of
cases.
27. Subject-Matter Jurisdiction – Federal Question (Constitutional): Osborn v. Bank of the U.S., 1824
a. Overview
i. U.S. Supreme Court (orig. Ohio federal court)
ii. Bank of the United States sued Osborn (state auditor of Ohio) in federal court to stop
him from collecting a tax the Bank alleged to be unconstitutional. The court ordered
Osborn (state officials) to return money that they took, and officials appealed on the
basis of no SMJ. Supreme Court said that there was SMJ (a federal issue).
b. Federal question – constitutional interpretation (pre-Section 1331)
i. Question: Was there a federal question in this case?
ii. Answer: Yes. Article III grants federal-question jurisdiction to all cases to which
the bank (and thus the U.S. government) is a party.
iii. Reasoning: The issue of whether the bank can sue in any particular case (not in
general) is renewed with every case (an “original ingredient” in every case), and it
depends on a federal law.
1. This is a broad conception of “arising under” jurisdiction: Congress may
confer on the federal courts jurisdiction over any case or controversy that
might call for the application of federal law.
c. Related notes from class
i. We studied this case after Mottley. We said that Mottley answered the first point,
which was to look at the face of the complaint. This case speaks to the second
question: when looking at the face of a complaint, what do we look for? This is one
of those cases where one party is the federal government, and we ask if that
automatically allows the case to be heard in federal court. Generally, when the U.S.
govt. sues or is sued, you can assume that it will end up in federal court.
d. Glannon
i. This case represents the Court’s expansive view of the “arising under” language in
Article III (not statutory section 1331). Their approach here is the “federal ingredient
approach.” For federal law to be an “ingredient” of a case, one of the parties in the
case would have to rely on federal law to establish either a claim or a defense in the
lawsuit, or at least raise a federal issue in proving the case.
28. Subject-Matter Jurisdiction – Federal Question (Plaintiff’s Claim): Louisville & Nashville Railroad Co.
v. Mottley, 1908
a. Overview
i. U.S. Supreme Court (orig. Kentucky federal circuit court)
ii. Mottley was injured in a railroad accident thirty years ago, and in their with the
railroad company, the co. agreed to give Mottley free rail passes for life. More
recently, Congress passed a law forbidding the giving of free passes. Mottley sued the
railroad co. for failing to renew their passes. The case went to the Supreme Court on
its merits, but it was there dismissed for lack of SMJ.
b. Federal question – plaintiff’s claim only
i. Question: Was there federal-question SMJ in this case?
ii. Answer: No. The plaintiff’s complaint, stating his cause of action, does not arise
under federal law.
iii. Reasoning: A case raising a federal defense, but no federal claim, cannot be brought
in federal district court and is not a sufficient foundation for federal jurisdiction.
Arguments using a federal law in an “anticipated defense” are not grounds for federal
jurisdiction because an official defense in a lawsuit in not known until the defendant
files their answer.
c. Related notes from class
i. We studied this case first in our discussion of the federal-question issue.
ii. Even though the Court would have to interpret a federal law in this case, it found that
there was no SMJ because the plaintiff’s cause of action did not arise under federal
law. This establishes the rule that you should only look at the “face” of the complaint.
iii. Reason for this: if you open up the “anticipated defense” possibility, you would
probably end up with cases not involving federal law in the federal courts (if plaintiff
anticipates a defense that the defendant himself does not raise).
iv. An alternative: the court could just wait for the answer and see if the federal question
is raised
v. Why do the Mottleys want to be in federal court? Federal judge might interpret the
law in a way different from a state judge; thought it would be more efficient to start in
federal court if it would end up in the Supreme Court anyway
vi. Why does the Supreme Court adopt an inefficient rule? They err on the side of
narrowing federal-question jurisdiction in order to avoid stepping on the states’ toes.
vii. Why have federal courts decide federal-question cases? Uniformity and efficiency.
Federal court is concerned with its caseload; federal judges might achieve more
uniformity because they understand federal law better than state judges; federal judges
might interpret more consistently because they have the national (not local) interest at
heart; judges all appointed by Congress (though administrations change); the 13
districts might get better uniformity than the 50 states
1. Counter-argument: you would never get 50 different interpretations of a law;
usually just 2-5 so you would get a split in federal courts too. The arguments
about the federal judges’ frame of mind are better arguments.
d. Glannon
i. This case is asking whether the broad view given to the “arising under” language of
the Constitution extends to Congressional statutory “arising under” language. It does
not. The court holds that section 1331 only applies if the plaintiff’s claim requires
proof of federal law. The plaintiff himself must assert a cause of action arising under
federal law. In this case, cause of action was breach of contract, a state law action.
This case would have come out differently if the Court had interpreted the statute
(now 1331) as broadly as it interpreted Article III. Also, it was not enough that
plaintiff referred to federal law in complaint—the law has to be necessary to the case,
and it wasn’t here.
29. Subject-Matter Jurisdiction – Federal Question (Holmes Test): TB Harms Co. v. Eliscu, 1964
a. Overview
i. U.S. Court of Appeals (orig. New York federal district court)
ii. Complicated case that basically involved people who copyrighted songs making
contracts with each other; the suit was essentially a breach of contract case. The
appeals court found that there was no SMJ because the cause of action did not actually
arise under the federal copyright law.
b. Federal question – Holmes Test
i. Question: Did the court have federal-question jurisdiction in this case?
ii. Answer: No. The action did not “arise under” the federal Copyright Act.
iii. Reasoning: The complaint would only arise under the Copyright Act if it alleged any
act of threat or copyright infringement, but it did not do so. There was no national
interest or federal significance to this case. The court here applies the Holmes Test:
“a suit arises under the law that creates the cause of action.” This case does not meet
the Holmes Test.
c. Related notes from class
i. This is a case that looks like a federal question (referring to the Copyright Act) but is
actually not. It is actually a breach of contract case.
d. Glannon
i. The Holmes Test finds jurisdiction under section n1331 if the source of the plaintiff’s
enforceable legal right against the defendant is federal law.
30. Subject-Matter Jurisdiction – Federal Question (Holmes Test): Smith v. Kansas City Title & Trust Co.,
1921
a. Overview
i. U.S. Supreme Court (orig. Missouri? federal court)
ii. A shareholder sued to enjoin the Trust Company from investing in federal bonds on
the ground that the Act of Congress authorizing their issuance was unconstitutional.
The Supreme Court held that there was SMJ- the action “arose under” federal law.
b. Federal question – Holmes Test
i. Question: Did the federal court have federal-question jurisdiction in this case?
ii. Answer: Yes. The action “arose under” federal law.
iii. Reasoning: The general rule is that where it appears from the bill or statement of the
plaintiff that the right to relief depends upon the construction or application of the
Constitution or federal laws, and that such federal claim is not merely colorable, and
rests upon a reasonable foundation, federal court has jurisdiction.
c. Related notes from class
i. The federal court has jurisdiction if the case requires the court necessarily to decide a
question of federal law. Just because the cause of action arises under state law, that
does not mean that the case cannot be heard by federal court.
d. Glannon
i. Federal courts have upheld arising-under jurisdiction where federal law does not
create the right to sue, but the plaintiff, in order to establish her state law claim, must
prove a proposition of federal law. The claim in this case does not satisfy the Holmes
Test: the claim was a state law claim. But the plaintiffs could not prove this state law
claim without establishing a proposition of federal law. The federal issue was
embedded in the state law claim and essential to its resolution. This case thus
represents an exception to the Holmes Test that is still a viable basis for finding
jurisdiction under section 1331. This test was later reaffirmed in Grable.
31. Subject-Matter Jurisdiction – Federal Question (Private Right of Action): Merrell Dow
Pharmaceuticals v. Thompson, 1986
a. Overview
i. U.S. Supreme Court (orig. Ohio state courts)
ii. Thompsons (Canadian) and McTavishes (Scottish) sued pharmaceutical company
(Ohio) for causing birth defects with a certain drug (tort negligence claim). Plaintiffs
alleged as part of claim that the drug was “misbranded” in violation of the FDCA (a
federal law). Defendant applied for removal; the case was removed to federal court.
Supreme Court found that federal court had no jurisdiction.
b. Federal question – private right of action
i. Question: Did the federal court have federal-question jurisdiction in this case?
ii. Answer: No. The FDCA does not create or imply a private right of action arising
under federal law; the plaintiffs’ right to relief does not depend necessarily on
this law.
iii. Reasoning: There are two kinds of federal question cases:
1. Federal law creates the cause of action
2. The vindication of a right under state law necessarily turns on some
construction of federal law (Holmes Test)
This case would have to fall under the second kind, because the cause of action does
not arise under federal law (tort negligence claim). There is no federal cause of action
for FDCA violations—Congress did not intend a private federal remedy for violations
of this statute. It would undermine congressional intent to allow federal courts to
provide remedies for violation of that statute just because the violation of the statute is
said to be a “proximate cause” under state law rather than a federal action under
federal law. Also, the mere presence of a federal issue in a state cause of action does
not automatically confer FQ jurisdiction; the presence of a claimed violation of this
statute as an element of a state cause of action is insufficiently “substantial.”
iv. Dissent: Smith is still valid. There is indeed a need for determining a federal question
in this case. The decision not to provide a private federal remedy should not affect
federal jurisdiction unless the reasons Congress withholds a federal remedy are also
reasons for withholding federal jurisdiction. (They are not.)
1. Brennan and the liberals wanted to expand access to the federal courts
because of civil rights—even though it required them to take the corporation’s
side in this case.
c. Related notes from class
i. This case is one of those cases that looks like a state law claim but is actually a federal
law claim.
ii. Removal: You can remove anything to federal court that could have been brought
there in the first place except that diversity cases cannot be removed by an in-state
defendant. Note: there’s no such thing as removing a case from federal court to state
court; this is a “one-way street.”
iii. Why do the foreigners want to be in state court and the local company wants to be in
federal court? Plaintiffs may think they can get a bigger award in state court. The
federal court might not let the case go to the jury – procedural rules are different. At
summary judgment you might get a federal judge more likely to rule in favor of the
drug company, or the federal rules of evidence/summary judgment might be stricter
than in state court.
iv. The duty and breach requirements of a negligence claim are proven automatically if
you show that defendant has violated a statute (“negligence per se”). Plaintiff points
to a federal law (FDCA) as the statute the pharmaceutical co. has broken. The court
will have to interpret a federal law, even though the case does not arise under it. But
the rule here is complex. They look at whether there is a private cause of action.
v. What does it mean to have a private cause of action under the FDCA? That as a
private individual you can sue in court for violation of the act. But this is not given by
Congress. It was intended to be enforced by the government. Where the law says
nothing, sometimes the Supreme Court can find an implied right to sue (4-part test).
Here there is not found to be an implied right to sue. The Court collapses this into the
jurisdictional argument.
vi. Here, under the Holmes Test, the decision of the federal question is not necessary to
prove the plaintiff’s claim. The federal question is not substantial enough.
d. Glannon
i. Before this case… we knew:
1. Jurisdiction under the arising-under statute must be based on the plaintiff’s
claim.
2. A case will “arise under” federal law if it satisfies the Holmes Test (federal
law creates the underlying substantive right plaintiff seeks to enforce and
authorizes plaintiffs to go to court for a remedy).
3. Smith: a state cause of action can suffice if proof of that cause of action
requires proof of a proposition of federal law substantially (exception to
Holmes Test).
ii. Here, federal law creates a substantive right but does not (expressly) authorize
plaintiffs to sue for violation of that right. The court must decide whether there is an
implied private right of action; the inquiry involves a search for congressional intent.
The court does not find it here.
iii. The complaint here alleged a state cause of action (negligence) but asserted that
plaintiffs could prove this by showing a violation of federal statute. In this sense, the
case resembles Smith and Grable. But here there is a twist: Congress did not intend to
create an implied right to sue for damages for violation of FDCA.
iv. This case can be viewed as a sensitive application of the Smith exception to Holmes.
32. Subject-Matter Jurisdiction – Federal Question (3-Part Test): Grable v. Darue, 2005
a. Overview
i. U.S. Supreme Court (orig. Michigan state court, removed to MI federal court)
ii. Grable’s property was seized because of a tax delinquency. The gov’t sold the land to
Darue. Years later, Grable sued Darue in state court to get title of the land back (statelaw claim), challenging the form of notice he was given. Darue removed the case to
federal court because it presented the federal question of the notice statute in the tax
law. All lower and higher courts found that there was FQJ over the case.
b. Federal question
i. Question: A) Was there federal-question jurisdiction in this case? B)Does Merrell
Dow always require a federal “cause of action” as a condition for exercising FQJ?
ii. Answer: A) Yes. B) No.
iii. New rule of law: A three-part test. There is FQJ if:
1. the state-law claim necessarily raises a federal issue.
2. the federal issue is disputed and substantial.
3. the federal forum may entertain the case without disturbing any
congressionally approved balance of federal and state judicial responsibilities.
c. Related notes from class
i. Note the factual similarities to Pennoyer.
ii. This case makes sense of Merrell Dow: in that case, the federal question wasn’t
necessary to adjudicate; the federal question was not of substantial nature (the
regulatory regime leaves enforcement to FDA, so private litigation less important);
and it would have upset balance (the state had the greatest right to hear the case).
33. Subject-Matter Jurisdiction – Supplemental (Nucleus of Facts): United Mine Workers v. Gibbs, 1966
a. Overview
i. U.S. Supreme Court (orig. Tennessee federal district court)
ii. Gibbs lost his job at a mining company because the workers in UMW union rioted
when the company tried to hire new workers. Gibbs sued UMW on state-law claims
(conspiracy) and federal-law claims (secondary boycotts). He brought both claims to
federal court. The Supreme Court said that there was supplemental jurisdiction.
b. Supplemental jurisdiction – nucleus of facts
i. Question: Was there supplemental jurisdiction over the state-law claims?
ii. Answer: Yes. The claims are part of what the Constitution recognizes as one case.
iii. Reasoning: Supplemental jurisdiction exists when there is a claim “arising under
[federal law]” (Article III) and the relationship between that claim and the state claims
made in the complain permits the conclusion that the entire action before the court
comprises but one constitutional “case.” This works toward judicial efficiency
because the claims arise out of the same nucleus of operative facts and should be
heard together. They could be heard in state court, but the federal claims particularly
deserve to be heard in federal court; so, both can be heard in federal court. Note that
this jurisdiction is a doctrine of discretion, not of plaintiff’s right.
c. Related notes from class
i. Gibbs wants to be in federal court because the local state jury is likely to have union
members on it. He wants to be in federal court in a bigger city, bigger jury pool.
ii. We know that Gibbs could not bring the state-law claim alone to federal court, and
that if he brought the federal-law claim to federal court that would be okay. But the
question here is: with both claims together, can the federal court adjudicate the statelaw claims it otherwise could not? Does the presence of the federal claims give the
court power to adjudicate the state claims? The answer is yes.
34. Subject-Matter Jurisdiction – Supplemental (2 defendants): Aldinger v. Howard, 1976
a. Overview
i. U.S. Supreme Court (orig. WA federal district court)
ii. Aldinger sued individual employers under federal law (wrongful discrimination) and
the county under state law (federal law didn’t allow the county to be sued). Aldinger
argued there was supplemental jurisdiction over the state-law claim because both
arose out of the common nucleus of facts. Supreme Court said no.
b. Supplemental jurisdiction – multiple defendants
i. Question: Was there supplemental jurisdiction over the state-law claim?
ii. Answer: No. The joinder of a municipal corporation (the county) for purposes of
asserting a state-law claim not within federal diversity jurisdiction is without the
statutory jurisdiction of the federal court.
iii. Reasoning: It’s one thing to bring a state-law and federal-law claim against one party,
but another thing entirely to bring in an entirely new party for the state-law claim.
The addition of the new part would run counter to the principle that federal courts
have a limited jurisdiction. Also, there are statutory considerations: the federal law
addresses the issue that the county cannot be sued.
c. Related notes from class
i. This is different from Gibbs because there are two separate defendants.
ii. The Court here doesn’t say that it doesn’t have the power to hear both claims under
Article III (it does)—but the particular statute cuts against it, causing the Court to rule
against supplemental jurisdiction.
35. Subject-Matter Jurisdiction – Supplemental (Complete Diversity): Owen Equipment v. Kroger, 1978
a. Overview
i. U.S. Supreme Court (orig. Nebraska federal district court)
ii. Kroger (Iowa resident) sued OPPD (Nebraska corporation) for wrongful death of her
husband. She sued in federal court on the basis of diversity jurisdiction. OPPD filed
a third-party complaint against Owen; Kroger amended her complaint to name Owen
as a defendant. During the trial it was learned that Owen was an Iowa business,
destroying diversity. Owen moved to dismiss for lack of SMJ. Supreme Court held
that there was no supplemental jurisdiction.
b. Supplemental jurisdiction – complete diversity
i. Question: Can the claim against the defendant that destroys diversity be brought
in federal court under supplemental jurisdiction?
ii. Answer: No. Complete diversity is required for federal diversity cases.
iii. Reasoning: Beyond the constitutional minimum of “common nucleus of facts,” there
are other considerations (which Aldinger shows). Congress requires there to be
complete diversity of citizenship in federal diversity cases. Complete diversity is
destroyed if the claim against Owen is brought in, and SMJ is destroyed.
c. Related notes from class
i. Courts have power over this under Article III – same “case” and set of facts. But
statutes don’t allow it because it’s not complete diversity.
ii. Kroger can’t sue Owen in the first place, but Owen is brought in by OPPD – that
alone would have been OK – but it’s not OK that Kroger added a claim directly
against Owen. Rule 1367(b) later codifies the rule preventing people from trying to
get around the rules this way.
iii. In this case, and in Aldinger, once it’s all one case, the federal court has constitutional
authorization to hear the supplemental claims, but you have to look at whether
Congress has taken away that authorization.
36. Subject-Matter Jurisdiction – Supplemental (Statutory Authorization): Finley v. United States, 1989
a. Overview
i. U.S. Supreme Court (orig. California federal district court)
ii. Finley’s husband and children were killed when their plan struck electric power lines
on its approach into San Diego. Finley sued the U.S. (FAA) under the Federal Tort
Claims Act in federal court. She then amended her claim to include state law tort
claims against the city of San Diego and the electric company. The Supreme Court
found that there was no supplemental jurisdiction over the amended claim.
b. Supplemental jurisdiction – statutory authorization
i. Question: Did the federal court have supplemental jurisdiction over the state-law tort
claims?
ii. Answer: No. The FTCA authorizes federal jurisdiction over claims against the
United States, but no one else.
iii. Reasoning: Not only must a federal court have the constitutional authorization to hear
a case, an act of Congress must also supply it with jurisdiction. Moreover, a grant of
jurisdiction over claims involving particular parties does not itself confer jurisdiction
over additional claims by or against different parties.
iv. Dissent: In Aldinger, the Court adopted a rule of construction assuming the existence
of supplemental jurisdiction unless Congress had negated its existence. This approach
is very different.
c. Related notes from class
i. This case is different from Aldinger and Kroger because this particular federal claim
against the U.S. government can only be heard in federal court, so if the federal court
cannot hear the state-law claim, the case will have to be split into two claims (one in
federal and one in state court). So it seems like a good idea for the federal court to
take SMJ. But the Court decides here that Congress must have explicitly authorized
jurisdiction – a departure from Aldinger/Kroger.
ii. Later, §1367 gives the statutory authority for taking supplemental claims. 1367(a)
codifies Gibbs and gives jurisdiction over supplemental claims to the full extent of the
Constitution (over claims and parties arising out of the same case). 1367(b) limits
section (a) – in diversity cases there are some claims the federal court can’t take
(though all claims are okay in federal-question cases).
iii. The exercise of supplemental jurisdiction in this case would have been upheld if it had
taken place after the passing of §1367.
d. Glannon
i. Supplemental jurisdiction under §1367 requires a three-part analysis.
1. First the court must determine whether there is constitutional power under
Article III, §2 to hear the supplemental claim. This must stem from Gibbs
(same nucleus of operative facts).
2. Second the court must determine whether there is a statutory grant of
jurisdiction over the related claim. Such a grant is provided in most cases by
§1367 itself (with exceptions in section (b)).
3. Third, according to 1367(c), the court must exercise its discretion whether it
actually wants to take supplemental jurisdiction over related claims.
37. Subject-Matter Jurisdiction – Supplemental (Amount in Controversy): Exxon v. Allapattah and Ortega
v. Star-Kist, 2005
a. Overview
i. U.S. Supreme Court (orig. Florida and Puerto Rico federal district courts)
ii. Exxon: Class-action suit by Exxon dealers against the Exxon Corporation. The
dealers alleged a scheme by Exxon under which they were overcharged for fuel. They
sued in Florida federal district court. The Appeals Court upheld the District Court’s
exercise of supplemental jurisdiction over those claims of class members who did not
meet the minimum amount in controversy for diversity cases.
iii. Star-Kist: A young girl sliced her finger on a tuna can and sued Star-Kist for damages.
She sued in federal court (>$75,000) and her family joined (<$75,000). The Appeals
Court found that §1367 did not authorize supplemental jurisdiction over claims in
which one plaintiff fails to satisfy the amount-in-controversy requirement.
iv. The Supreme Court found that there was supplemental jurisdiction in both cases.
b. Supplemental jurisdiction – amount in controversy
i. Question: May a federal court in a diversity action exercise supplemental jurisdiction
over additional plaintiffs whose claims do not satisfy the minimum amount-incontroversy requirement, provided the claims are part of the same case or controversy
as the claims of plaintiffs who do allege a sufficient amount in controversy?
ii. Answer: Yes. Where the other elements of jurisdiction are present and at least
one named plaintiff in the action satisfies the amount-in-controversy
requirement, §1367 does authorize supplemental jurisdiction over the claims of
other plaintiffs in the same Article III case, even if those claims are for less than
the jurisdictional amount specified in the statute setting forth the requirements
for diversity jurisdiction.
iii. Reasoning: Gibbs confirms that the District Court has the power to exercise
supplemental jurisdiction over related state claims arising from same Article III case.
§1367 authorizes supplemental jurisdiction in this case because it does no exclude it in
section (b). The “indivisibility” theory and “contamination” theory are not valid
justifications for withholding jurisdiction. There is no need to be as strict with the
amount-in-controversy requirement as there is with citizenship diversity.
iv. Dissent: There’s no reason to be strict with diversity of citizenship and not with
amount in controversy.
c. Related notes from class
i. Here the plaintiffs try to sweep in a claim the court wouldn’t have jurisdiction over on
its own. The statutory language does not prohibit them from doing it under Rule 20.
ii. If each plaintiff sought $40,000 there would be no supplemental jurisdiction because
neither claim would have met the requirement. You have to have jurisdiction over
one claim which you them supplement with another claim. When looking at
supplemental jurisdiction, isolate each claim and see if the court has jurisdiction over
it. If you don’t have jurisdiction over one of them, ask if it fits on the supplemental
jurisdiction “hook” that you do have jurisdiction over.
38. Venue: Bates v. C&S Adjusters, 1992
a. Overview
i. U.S. Court of Appeals, 2nd Circuit (orig. New York federal district court)
ii. Bates incurred a debt while living in Pennsylvania. The creditor referred the account
to C&S collection agency, which transacts no business in New York. Bates had
meanwhile moved to the Western District of New York. When C&S mailed a
collection notice to Bates at his Pennsylvania address, the notice was forwarded to
Bates’ new address in New York. Bates filed a complaint regarding the notice under
the Fair Debt Collection Practices Act. The District Court granted C&S’ motion to
dismiss for improper venue. The Appeals Court said that venue was proper.
b. Venue
i. Question: Does venue exist in a district in which the debtor resides and to which a bill
collector’s demand for payment was forwarded?
ii. Answer: Yes. Venue is proper there under §1391(b)(2); receipt of a collection
notice is a substantial part of the events giving rise to a claim under the FDCPA.
iii. Reasoning: §1391(b)(2) allows an action to be brought in a district in which a
substantial part of the events or omissions giving rise to the claim occurred. Also, it’s
now okay to recognize that there are more than one potential venue for a claim. Other
cases have held that venue was proper where a collection agency mailed a notice to
plaintiff, even though it was not forwarded; but that difference is inconsequential.
Also, the most relevant evidence is located in New York.
c. Related notes from class
i. Keep in mind that venue is all statutory (not constitutional). It’s about convenience.
ii. SMJ: Federal question. PJ: Defendant sent notice to someone in PA and it was
forwarded to NY  specific jurisdiction (did business with a party in NY and claim is
related to that incident- letter of notice).
iii. District in which case is filed must have venue. §1391 gives two choices: diversity or
non-diversity, but really the requirements are the same for both choices. This is nondiversity (federal question)—three ways of thinking about venue:
1. Defendant’s residence (fairness for defendant)
2. Where events take place (location of evidence and witnesses)
3. Where defendant can be found (last resort – only used if there is no other
district where suit can be brought; if 1 and 2 fail)
a. How can 1 and 2 fail? 1 requires all defendants to reside in the same
state; 2 requires events to have taken place in the U.S.
iv. Where does defendant reside for purposes of venue? Place where you could get PJ if
the district were a state. Yet this case works through #2. Why not #1? It’s possible
there might not actually be PJ in New York, but it wasn’t contested (objection was
waived). Events “took place” in NY.
39. Venue (Transfer): Hoffman v. Blaski, 1960
a. Overview
i. U.S. Supreme Court (orig. Texas federal district court)
ii. Blaski (Illinois resident) sued Texas corporation in Texas federal court in a patent
infringement action. Defendants were residents of, and maintained their only place of
business in, Texas. Defendants moved under §1404 to transfer action to Illinois
federal district court. District Court granted the motion. Once in Illinois, Blaski
moved to overturn the order granting the motion. The Illinois District Court kept the
case in Illinois, assigning it to Judge Hoffman. Hoffman sent the case back to Texas,
and the Supreme Court upheld his decision.
b. Transfer of venue
i. Question: Does a District Court in which an action has been properly brought have the
power under §1404(a) to transfer the action, on the motion of the defendant, to a
district in which the plaintiff did not have a right to bring it?
ii. Answer: No. Because plaintiff did not have a right to bring his action in the
transferee district in the first place, the action cannot be transferred there.
iii. Reasoning: The transferee court did not acquire jurisdiction over the action when it
was brought in the transferor court. The power of a District Court under §1404(a) to
transfer an action to another district is made to depend not upon the wish or waiver of
the defendant but, rather, upon whether the transferee district was one in which the
action “might have been brought” by the plaintiff.
iv. Dissent: The words “where it might have been brought” can be interpreted in a
number of ways. There are competing considerations here. The transferee court
clearly has jurisdiction (defendant acquiesces), it is convenient. The Court here is
restricting transfer, when concededly warranted in the interest of justice, to protect no
legitimate interest on the part of the plaintiff.
c. Related notes from class
i. SMJ: Federal question. PJ: defendants reside in Texas (general PJ). Venue
(originally): all defendants reside in Texas. All of this is fine until defendant tries to
move to Illinois.
ii. Considerations relating to transfer under §1404:
1. *Threshold: case must have been originally eligible to have been brought in
the transferee forum (here IL)
2. Convenience of parties
3. Convenience of witnesses
4. Interest of justice
iii. Illinois? Still has SMJ (doesn’t change within federal system). PJ: maybedefendants waived it. Venue? Events didn’t happen there; defendants didn’t reside
there; part 3 of the venue test is unnecessary because there is another available venue.
So the suit could not have been brought in IL originally. Can’t take waiver into
account.
iv. The transfer statute doesn’t get away from the issues of convenience in the venue
statute—have to re-look at venue requirements.
40. Venue (Forum Non Conveniens): Piper Aircraft v. Reyno, 1981
a. Overview
i. U.S. Supreme Court (orig. California then Pennsylvania federal courts)
ii. An aircraft crashed in Scotland, killing 5 passengers, who were all Scottish, as were
all their heirs and kin. The plane was manufactured in Pennsylvania by Piper. It was
suggested by a report that mechanical failure in the plane was responsible for the
crash. A California probate court appointed Reyno administratrix of the estates of the
passengers; she sued Piper in California state court. Piper removed to California
federal court. Piper then moved for transfer for Pennsylvania federal court; the case
was moved. Afterwards, Piper moved to dismiss on the ground of forum non
conveniens. District Court dismissed the action in PA; Appeals Court kept the case
there in PA; Supreme Court dismissed the action—no trial in the U.S.
b. Venue – forum non conveniens
i. Question: Was the district court right to dismiss the case on the ground of forum non
conveniens?
ii. Answer: Yes. Pennsylvania was an inappropriate forum.
iii. Reasoning: The Appellate Court erred in several ways. First, they were wrong to rely
on the fact that the substantive law would be less favorable in an alternative forum.
Also, the Court erred in rejecting the District Court’s Gilbert analysis. The District
Court was right to weigh private and public interests. Private connections with
Scotland are “overwhelming”, witnesses and evidence are there, and defendants could
implead third parties there. Also, publicly, Scotland has a strong interest in deciding
this litigation.
c. Related notes from class
i. First step: removal. You can only remove a case to federal court that could have
originally been brought there (just asking about SMJ); there was SMJ because it was a
diversity case. Next step: change in venue. This uses the Hoffman test; the case could
have originally been brought in PA, so that was ok, and there is PJ over defendant
ii.
iii.
iv.
v.
there. Third step: dismissal on grounds of FNC. There are arguments for and against
hearing the case in Scotland. We’re not saying federal court lacks jurisdiction; it has
the power to hear the case. The common law doctrine of FNC lets courts say they
don’t want to decide a case over which they have jurisdiction.
Assessing FNC in this case: three-part test?
1. There has to be another forum
2. Public interest
3. Private interest
Why did Piper wait until getting to PA federal court before moving for dismissal on
grounds of FNC? Didn’t want to do it in California state court because the last thing
they wanted was to get stuck there. They were just covering all their bases. They
couldn’t transfer from California state court to another state court, had to remove to
federal court first. If they moved for FNC and lost in California state court, they
might have lost the chance to remove (there’s a time limit). Also, FNC comes up in
federal court only when you want to move to a foreign court. Otherwise, if you want
to move to a different state, you just transfer.
See (vi) in the Erie outline for an application of the Erie rule to this case.
See other Civ Pro document for more insights relating to Erie.
41. Ascertaining the Applicable Law: Swift v. Tyson, 1842
a. Overview
i. U.S. Supreme Court (orig. New York federal court)
ii. Kind of complicated- some people from Maine swindled some New Yorkers
(including Tyson) and he refused to pay when Swift (a third-party who received
Tyson’s note from one of the swindlers) came to collect. The Court decided in favor
of Swift, following the doctrine of general law (not New York common law).
b. Ascertaining the applicable law
i. Question: Should the case be governed by New York contract law (common law), or
is the court free to look to the English common law rule?
ii. Answer: The Rules of Decision Act only commands federal courts to follow the
statutory law of the states, not the decisions of state tribunals. Federal courts are
free to create and apply a federal common law in diversity cases.
iii. Reasoning: The “laws of the several states” wording in the RDA does not apply to
court holdings- the decisions of the courts do not constitute “laws.” Those decisions
are only evidence of what the laws truly are, and not the laws themselves.
c. Related notes from class
i. SMJ: diversity case. PJ: defendant resides in NY.
ii. The question here is what rule of law should be applied to decide the outcome? Swift
wants the new English common law, under which Swift would win and Tyson would
be able to sue the original swindlers. Tyson wants the New York common law, under
which Tyson would win and not have to pay Swift. Both are common law principles.
iii. To decide which law to use, the court has to first pick a choice-of-law rule. Because
this is a federal court, it must look at federal choice-of-law rules: the Rules of
Decision Act (a congressional statute). (The sovereignty establishing the forum is
where you turn first for choice-of-law rules.) The RDA says that the federal court
must use the “laws of the several states” when no federal law applies in the case. The
court then interprets “laws” to include only statutory laws, not common laws, because
they think there’s no reason to go with one state’s interpretation of common law over
another’s (states can be wrong in trying to “find” the common law; there is a “right
answer” and the federal courts are free to try to find it differently than the state courts
have and develop their own interpretation).
42. Ascertaining the Applicable Law: Erie RR Co. v. Tompkins, 1938
a. Overview
i. U.S. Supreme Court (orig. Pennsylvania federal court)
ii. Tompkins (PA resident) loses his arm when he is hit by an Erie train (NY-based
railroad) in Pennsylvania. He sues Erie in PA federal court. The district court and
appellate court applied the “general law” (duty of ordinary care/negligence) as
opposed to PA common law (duty only to avoid wanton negligence), and found in
favor of Tompkins. Supreme Court reversed/remanded, overruling Swift.
b. Ascertaining the applicable law
i. Question: Should the Swift rule (federal courts don’t have to follow state common law)
be overruled?
ii. Answer: Yes. Except in matters governed by the Constitution or federal laws, the
law to be applied in any case is the law of the state, which includes both laws
declared by the legislature in a statute and by its highest court in a decision.
iii. Reasoning: Swift was an incorrect interpretation of the Rules of Decision Act. It also
had the effect of creating discrimination against citizens of a state by non-citizens by
allowing them to choose which law would be applied in a case, rendering impossible
equal protection of the law. Swift’s doctrine was also unconstitutional because it took
power away from the state courts and gave too much to the federal courts.
iv. Dissent: The Swift rule has been unchallenged for so long that destroying it now
without appropriate deliberation cannot be justified. The constitutional validity of the
rule does not need to be considered in this case.
v. Concurrence: The Swift rule was erroneous, but not necessarily unconstitutional.
c. Related notes from class
i. Tompkins wants the application of the general common law (regular negligence),
while Erie wants the application of PA common law (wanton negligence, which is
harder to prove). In deciding on a choice-of-law rule, the federal court must look to
the RDA, which has gone unchanged since Swift. This court differs in interpreting the
RDA, though, saying that the Swift court misread it. Now both common law and
statutory law are to be used by the federal courts in diversity cases.
ii. The dissent’s argument (to keep “misinterpreting” the RDA) is not so silly as it
sounds- if Congress had really thought the courts were getting the RDA wrong, they
could have changed or clarified it, but in 100 years they have not done so.
iii. The Court says that it has been unconstitutionally been making up laws for the last
100 years (since Swift) because the constitution does not authorize Congress to give
this power to the federal courts.
iv. The equal protection problem (other constitutional problem): the Swift rule gives a
non-citizen the power to remove to federal court to get a different law, whereas if the
same case involves 2 citizens of the same state, can only sue in state court- no removal,
no ability to choose a law. Now, under Erie, the federal court uses choice-of-law
rules of the state in which it’s located, giving you the same rule of decision as the state
court.
v. Now, federal and state courts in the same state apply the same law, BUT federal
courts in different states apply different laws. The court has created one type of
equality at the expense of another. Why do they prefer equality within one state?
They want to prevent Congress (thru federal courts) from making local state law; they
want to cut down on forum shopping. There’s now no reason to forum shop within
one state. Removal no longer gives you a different body of law—though it does give
you different procedural laws.
Pre-Erie Post-Erie
Substantive law Federal State
Procedural law State
Federal (RCP)
vi. A note about Piper. The first step was to determine which choice-of-law rule to use.
In CA state court, CA rules would have been applied. In CA federal court, CA rules
would have been applied (removal hasn’t changed the substantive law that will apply
to Piper after Erie and Klaxon). In PA federal court, CA rules would still have been
applied (with a transfer you don’t want a change of location to change the substantive
laws. Then, a second step: determine what substantive law that rule will tell you to
use. CA choice-of-law rule uses the “government interest” analysis and would have
applied PA law to the case. The PA choice-of-law rule uses the “significant contacts”
analysis and would have applied Scottish law to the case.
43. Ascertaining the Applicable Law: Stewart v. Ricoh, 1988
a. Overview
i. U.S. Supreme Court (orig. Alabama federal court)
ii. Stewart (Alabama corp.) sued Ricoh (NJ-based corp.) for breach of contract in
Alabama federal court. Ricoh moved for transfer to New York because their contract
had a forum-selection clause in it. The Alabama court denied the motion because the
transfer motion was controlled by Alabama law, which looks unfavorably on forumselection clauses. Appellate court reversed, and Supreme Court agreed, that the
forum-selection clause was enforceable as a matter of federal law.
b. Ascertaining the applicable law
i. Question: Is the forum-selection clause enforceable?
ii. Answer: Yes. The clause is governed by a federal law (§1404(a)), which is
constitutional, and which allows the enforcement of the forum-selection clause.
iii. Reasoning: This analysis is not as complicated as the one in Erie because there is a
federal law that can be applied here. A district court in a diversity case must apply a
federal statute that controls the issue before the court and that represents a valid
exercise of Congress’ constitutional powers. §1404(a) controls this issue, and it is
constitutional.
iv. Dissent: This issue does not fall within the scope of §1404(a).
c. Related notes from class
i. Ricoh wants the case in NY because AL looks unfavorably on forum-selection clauses.
Points to 1404(a) which allows transfer in interest of justice/fairness/convenience.
Federal court looks more favorably on forum-selection clauses.
ii. If the court here applies AL law, the case will remain in AL. If it applies federal law,
the case moves to NY.
iii. This case is not like Erie because we’re not talking about applying federal common
law, but rather a federal statute, which trumps state law (according to the RDA) when
it conflicts with state law.
iv. The take-home point from the Erie cases: state law applies in diversity cases.
Nuances: federal statutes trump state laws if there is an applicable federal statute; also,
state rule of decision wins because Congress says in RDA to use state law.
v. See diagram of steps in other Civ Pro file!
44. Pleading Dismissals: Dioguardi v. Durning, 1944
a. Overview
i. U.S. Circuit Court of Appeals (New York), orig. NY federal court
ii. Dioguardi sues collector of customs at Port of New York for losing merchandise
(bottles of tonic) and selling it for too little at auction. Dioguardi’s complaint is
difficult to understand because he speaks little English. District court dismisses
complaint on motion of the U.S. Attorney on the ground that it fails to state facts
sufficient to constitute a cause of action. Dioguardi amends complaint and it is
dismissed again. Appeals court finds that the complaint should survive the motion to
dismiss.
b. Pleading dismissals
i. Question: Is Dioguardi’s complaint sufficient to survive a motion to dismiss?
ii. Answer: Yes. His complaint meets the requirement of a short and plain
statement of the claim.
iii. Reasoning: Dioguardi’s complaint, though difficult to understand, does seem to put
forth some potentially valid claims. He should not be deprived of his day in court to
show what he so firmly believes.
c. Related notes from class
i. In the motion to dismiss, defendant isn’t saying that Dioguardi has no legal claim—
just that the claim makes no sense (he has no knowledge of what the case is about, so
cannot answer). This is similar to complaining of not receiving proper notice. The
complaint is supposed to give notice so that OTBH can be meaningful.
ii. A motion to dismiss says that, even if the claims in the complaint are true, there is no
legal remedy. Defendant is not conceding that claims are true.
iii. There is no penalty for losing a motion to dismiss (no consequences).
iv. Implication of this case: court establishes rule that whatever is in the complaint is
good enough. Yet motions to dismiss are encouraged. So what is the purpose of the
complaint? Put D on notice he’s been sued. The complaint has to have enough facts
only so that D has an idea what the suit is about. This regime sets a low standard of
pleading—allowing many more people to get to the discovery phase.
v. Most successful Rule 12 motions are based on substance, not form.
45. Pleading Dismissals: American Nurses’ Association v. Illinois, 1986
a. Overview
i. U.S. Court of Appeals (2nd Circuit) – orig. Illinois federal district court
ii. ANA sues state of Illinois for sex discrimination in employment in violation of Title
VII and equal protection clause of 14th amendment. The district judge dismisses the
complaint under 12(b)(6) on the ground that the complaint pleaded a comparable
worth case and that this kind of case does not violate federal antidiscrimination law.
Plaintiffs appeal. They argue that their case is not just a comparable worth case.
Appeals court decides that plaintiffs say enough in the complaint to allow the case to
go forward.
b. Pleading dismissals
i. Question: Did the plaintiffs fail to state a claim upon which relief can be granted?
(Did they include factual allegations which if true show that their legal rights were not
invaded?)
ii. Answer: No. Their complaint does not fail to state a claim merely because it does
not set forth a complete and convincing picture of the alleged wrongdoing; they
are entitled to make additional efforts to prove a case of intentional
discrimination.
iii. Reasoning: The court analyzes the various components of the complaint. Some
subparts fail to state a claim, but others have a more valid claim. There are many
ways to read a complaint; what the district court did here was read it as alleging a
departure from the principles of comparable worth and no more, but there are other
ways to read it too. This case alleges intentional sex discrimination and cannot be
dismissed just because one of the practices, indeed the principal practice, instanced as
discrimination (employer’s failure to implement comparable worth) is lawful.
Furthermore, a complaint is not required to allege all, or any, of the facts logically
entailed by the claim. A plaintiff does not have to plead evidence.
c. Related notes from class
i. Like Pruitt—part of the claim here is no good. Some facts they plead do not
constitute sex discrimination. BUT there is some language in the case suggesting
there are other facts that the plaintiff might have to prove his claim. The court keeps
the case for this reason.
46. Pleading Amendments: Beeck v. Aquaslide ‘n’ Dive Corp., 1977
a. Overview
i. U.S. Court of Appeals (8th Circuit), orig. Iowa (?) federal district court
ii. Beeck was injured while using a waterslide. The insurers of his employer and the
home association investigate, as well as Aquaslide’s insurer, and all agreed in the
answer that Aquaslide made the slide. The statute of limitations expired after this.
Then, after discovery, Aquaslide finds out it didn’t make the slide and moved to
amend the complaint to deny its admission that it made the slide. The district court
granted leave to amend, and the appeals court agreed.
b. Pleading amendments
i. Question: Where the manufacturer of a product admitted in its answer and in its
answer to interrogatories (both filed prior to running of the statute of limitations) that
it manufactured the product in question, may it be granted leave to amend in order to
deny its admissions after the running of the statute of limitations?
ii. Answer: Yes. There is not enough prejudice to the opposing party to deny the
defendant’s motion to amend.
iii. Reasoning: Rule 15(a) says that leave to amend shall be freely given when justice so
requires. In order to deny leave to amend, there has to be prejudice to the opposing
party (and the opposing party has the burden to prove this prejudice). The court found
that there was no bad faith on the defendant’s part in its earlier admissions and in its
desire to amend the complaint. Moreover, granting the leave to amend would not
sound the “death knell” for the plaintiff’s litigation; the amendment would just allow
defendant to contest a disputed factual issue at trial, and it would be prejudicial to
defendant to deny the amendment.
c. Related notes from class
i. We’re way past the point now at which Rule 15 says the pleadings can be amended, so
we need leave of court (“when justice so requires”).
ii. If granted, Beeck will probably lose—will have a very hard time proving that
Aquaslide made the slide (which it didn’t, or so it says).
iii. The obvious solution would be to allow plaintiff to just sue someone else, but the
problem is that the statute of limitations ran out.
iv. 15(c)—amended pleading can sometimes related back
1. 15(c)(2)—new claim or defense—not what’s happening here
2. 15(c)(3)—new party—must be within a time period—not done here (statute
of limitations only extended for so long so that D can have repose)
3. So, plaintiff cannot amend pleading to include a new party (the real
manufacturer) because it won’t relate back.
v. How can justice be served in this case? It seems wrong to hold Aquaslide liable if
they didn’t manufacture the slide, but it also seems unfair to punish Beeck because
Aquaslide didn’t admit their mistake until after the limitations period ran out.
47. Pleading Amendments: Worthington v. Wilson, 1992
a. Overview
i. U.S. District Court (Illinois)
ii. Plaintiff was treated roughly by two police officers who broke his hand. He sued
“unknown named police officers” in his complaint just before statute ran out.
Afterwards, he amended his complaint naming the defendants by name. They moved
to dismiss the amended complaint on the grounds that the statute of limitations had
run and that the complaint failed to state a proper claim. The court grants the motion
to dismiss (amendment not good).
b. Pleading amendments
i. Question: Does the amended complaint relate back to the filing of the original
complaint (the only way it can be found to be timely)?
ii. Answer: No. It would be considered timely because the defendants had notice of
the action within the time limit, but there was no “mistake” concerning the
identity of the proper party.
iii. Reasoning: Under 15(c), an amended complaint which changes the name of the
defendant will relate back to the filing of the original complaint if it arises out of the
same conduct contained in the original complaint and the new party was aware of the
action within 120 days of the filing of the original complaint. This requirement was
satisfied. However, the court also requires that an amended complaint which replaces
fictitious names with actual names due to an initial lack of knowledge concerning the
proper defendant does not involve a “mistake” and is therefore not entitled to relation
back under 15(c). Also, state law (more favorable to plaintiff) does not apply here
because there is a federal law that trumps it.
c. Related notes from class
i. This case seems to fit the rule of relation back. But not a mistake—Beeck seems to fit
that requirement better than this one. Yet the real slide-maker would not have had any
notice, so wouldn’t meet the first requirement considered by this court.
ii. Plaintiff should have conducted a reasonable inquiry into the officers’ identity before
suing. Could have gone to the police department to find out who they were. Most
likely the department would not have given out the info, but plaintiff at least would
have made an inquiry and might have survived a motion to dismiss to find out names
through discovery. The trick is to sue early enough to get the names through
discovery within the time allotted by the statute of limitations!
48. Pleading Truthful Allegations: Zuk v. Eastern Penn. Psychiatric Institute, 1996
a. Overview
i. U.S. Court of Appeals (3rd Circuit), orig. Pennsylvania federal district court
ii. In the 1970s, Zuk, while on faculty of EPPI, films therapy sessions. Zuk has EPPI
duplicate the films and make them available for rental. Zuk writes a book containing
transcripts of the sessions and registers the book with the U.S. copyright office. In
1980, EPPI sues Zuk. Zuk requests that all copies of the films be returned to him, but
they are not. In 1995, Zuk sues, alleging that EPPI is renting out the films and thereby
infringing his copyright. EPPI moves for dismissal under 12(b), which is granted.
EPPI also moves for sanctions under 11(c)(1)(A) on grounds that Zuk had failed to
conduct an inquiry into the facts and the law. Court grants motion. Appellate court
analyzes in detail the Rule 11 requirements and upholds sanctions, but remands as to
how much and what kind.
b. Pleading truthful allegations under Rule 11
i. Question: Which sanctions potentially apply to Zuk’s attorney in this case?
ii. Answer: The Copyright Act sanctions do not apply to Zuk’s attorney, only to Zuk.
U.S.C. §1927 does not apply because there was no intentional delay. Rule 11
sanctions do apply because of inadequate investigation into the facts and the law;
fee sanctions are acceptable, but should not be extremely severe in amount.
iii. Reasoning: First of all, Rule 11 sanctions apply because appellant had not sufficiently
investigated the facts of the case or educated himself well enough as to copyright law.
(This standard is more stringent than the previous good-faith requirement.) There is
no evidence presented as to the facts (whether the videos have been rented in the last 3
years, which matters because of the statute of limitations), and no further information
is likely to be turned up in discovery. Moreover, appellant’s legal research was faulty
in two areas, the registration issue and the ownership issue. Appellant might have
fared better by framing his argument as a matter of first impression, but as it stands, it
just looks like a poor reading of the existing laws. As far as the type of sanctionssanctions should be the least severe necessary to serve the rule’s deterrent purpose.
Mitigating factors may be considered, including the sanctioned party’s ability to pay.
c. Related notes from class
i. For each potential range of sanctions (copyright act, §1927, Rule 11, inherent power
of the court) you ask two questions:
1. What standard do I have to live up to?
2. what can happen to me if I don’t?
ii. Copyright Act: (1) Loss + discretion (2) Fee shifting
iii. §1927: (1) Delay/frustrate proceedings (almost never used because hard to prove that
violation was willful/intentional)
iv. Inherent power: (1) Doing something problematic in front of the judge in the
courtroom that makes him/her angry
v. Rule 11—see diagram in other document.
vi. What does Zuk do wrong? He doesn’t violate 11(b)(1)—not an improper purpose.
He thinks he has a case. Validity of cause of action seems to validate your purpose,
and there is some suggestion that the claim might have had a bit of merit or at least
that Zuk’s lawyer thought it might.
1. Note: filing a case to get discovery (like in Buffalo Creek) is ok if it’s the only
way to figure out if the defendant is liable.
vii. Even if you have a decent purpose, you have to do things before you file the
complaint.
1. Inquire into the facts—11(b)(3)/(4). What would have been reasonable for
Zuk? Might have been easy to go see if video was being rented. If you
inquire and they say no (haven’t rented video), could argue you might be able
to substantiate claim later on (“we have reason to believe…”) These phrases
flag to the court that you don’t actually know anything yet.
2. The defendant has the burden of pleading the statute of limitations—why
should P have to look into this? P does have the burden of having a valid
claim; has to investigate merits of affirmative defenses in case they come up.
3. How to protect yourself under Rule 11: (1) reasonable inquiry, (2) flag the
claim. But you can’t really hide behind flagging your claim if your inquiry
has shown that you have no case.
viii. Difference between presenting law and facts:
1. 11(b)(2)—argument has to be valid under existing law OR argue for a new or
amended law. Don’t have to have a winning case; have to be brining a good
faith case for a proper purpose.
a. Do you have to tell the court that your legal claim is bad and that you
want a new law? Zuk court says yes, but Rubenstein argues that this
is a bad interpretation, that Rule 11 does not say you have to do this.
It might be bad for your case to tell the court you want them to do
something new. Rule 11 enables an advocate to frame the legal claim
(even if bad) within existing law.
2. But facts—you have to flag for the court if you don’t know all the facts.
3. Why differentiate between how we present law and facts to the court? In an
adversary system, the judge knows the law and doesn’t need you to flag it for
him, but facts are entirely provided by the parties, so you are held to a higher
standard for presenting them.
49. Case Structure – Joinder of Claims (Historical): Harris v. Avery, 1869
a. Overview
i. Supreme Court of Kansas
ii. In public, Harris called Avery a thief, accused him of stealing a horse, took the horse,
and arrested Avery. Avery sued for false imprisonment and slander. Harris demurred;
district court and higher courts all denied the demurrer.
b. Historical joinder of claims
i. Question: Can the two causes of action be joined and tried in the same case?
ii. Answer: Yes, because they arise out of the same transaction.
50. Case Structure – Joinder of Claims and Parties (Permissive): M.K. v. Tenet, 2002
a. Overview
i. U.S. District Court for District of Columbia
ii. Six former employees sued the CIA for violating the Privacy Act and other
constitutional rights. In amended complaint, they added nine more plaintiffs and
added additional claims. Defendants moved to sever claims of initial six plaintiffs.
b. Permissive joinder of claims under rule 18
i. Question: Can the six existing plaintiffs’ new claims be joined?
ii. Answer: Yes, because under the unrestricted joinder provision of Rule 18, such
joinder of new claims is possible.
c. Permissive joinder of parties under rule 20
i. Question: Can the plaintiffs be joined as parties in the case?
ii. Answer: Yes. They satisfy the first prong of Rule 20(a) because defendants’ acts
pertaining to plaintiffs’ claims are logically related events that the court can
regard as arising out of the same series of transactions of occurrences
(defendants’ alleged repeated pattern of obstruction of counsel). They satisfy the
second prong of Rule 20(a) because each of plaintiff’s claims arises out of a
common question of law or fact (defendants’ scheme of behavior). Moreover,
plaintiffs allege common claims under the Privacy Act.
51. Case Structure – Counterclaims: United States. v Heyward-Robinson Co., 1970
a. Overview
i. U.S. Court of Appeals (Connecticut)
ii. A subcontracting case. The case turns on whether the court has jurisdiction over the
counterclaims. The question is whether the counterclaims are compulsory or
permissive. If permissive, there is no federal jurisdiction over them unless they rest
on independent jurisdictional grounds, but if they are compulsory, they are ancillary to
the claim and no independent basis of jurisdiction is required. The court finds that the
counterclaims were compulsory under Rule 13(a), so the court has jurisdiction.
52. Case Structure – Cross-Claims: LASA Per L’Industria v. Alexander, 1969
a. Overview
i. U.S. Court of Appeals (Tennessee)
ii. The city of Memphis hired Southern Builders (TN) to build a city hall. SB’s
performance was secured by bond by Continental Casualty. SB subcontracted with
Alexander Marble (TN) and Marble International (TX) to supply and install marble.
Alexander then contracted with LASA (Italy) to supply the marble.
iii. Series of claims:
1. LASA sues Alexander, Marble, SB, CC, and the city for balance due.
2. Alexander counterclaims against LASA for breach of contract.
3. SB counterclaims against LASA for breach of contract.
4. Alexander cross-claims against SB, CC, and the city for balance due.
5. SB cross-claims against Alexander for breach of contract.
6. Alexander files a third-party complaint against Aydelott (architect).
iv. The district court dismissed the two cross-claims (4 and 5) and the third-party
complaint (6), holding that they did not arise out of the same transaction or occurrence
that is the subject matter of the original action or of a counterclaim therein. The
appellate court reverses.
b. Cross-claims under rule 13
i. Question: Did the cross-claims arise out of the same transaction/occurrence as the
subject matter of the original action, giving the court jurisdiction over them?
ii. Answer: Yes. The pleadings present a recurring question (who is responsible for
marble problems in this job). There is a logical relationship between the crossclaims and the transaction/occurrence that is the subject matter of the complaint
and two counterclaims.
iii. Reasoning: Policy: resolve related issues in one action. The cross-claims will involve
the same or closely related factual and legal issues, and might require a lot of the same
evidence. If the case gets too confusing for a jury, the judge can order separate trials.
c. Related notes from class
i. What rule allows one plaintiff to sue five defendants (joinder of parties)?
1. Rule 20(a)—requirements for permissive joinder:
a. Same transaction or occurrence
b. Common question of law or fact
ii. What rule allows P to bring multiple claims against D(s) (joinder of claims)?
1. Rule 18(a)—as many claims as you have. They don’t have to be related.
2. These rules make it easy to join claims/parties in one suit
a. EFFICIENCY ARGUMENT
i. Pro: try everything that’s related at one time, avoid multiple
time-consuming lawsuits
ii. Con: you could have so much going on that it’s confusing and
you end up litigating the joinder itself on its own (more time);
also you have to get a separate judgment for each ‘v.’
iii. What if you allow the judge to split claims into different trials?
You can still get efficiency by doing discovery together;
judge can see the big picture.
b. FAIRNESS ARGUMENT
i. Pro: defendants can point fingers at other defendants
ii. Con: each defendant is dragged into claims relating more to
other defendants
iii. What rule allows Alexander’s counterclaim?
1. Rule 13(a/b)—Is the counterclaim compulsory or permissive?
a. Compulsory (arises out of same transaction). “Compulsory” just
means that if you don’t bring your counterclaim now, you can’t bring
the same claim at a later time and place. Like res judicata, but without
a judgment for you to “wave around.”
b. Although anything unrelated is permitted to be brought as well
2. This case will probably never be heard  settlement
a. How to get most efficient settlement process? Overseen by one judge?
Also, it might be harder for one party to hold out if there are more
parties in the case.
iv. What rule allows the cross-claims?
1. Rule 13(g)—allowed if arising out of the same transaction (no unrelated
permissive cross-claims). Different in this way from (a/b) which allows
permissive counterclaims.
2. *The main reason to read the LASA case is because everything turns on
whether the cross-claims arise out of the same transaction, leading to a
discussion of “what is a transaction?”
v. Jurisdictional basis
1. Joinder of parties need to re-examine PJ.
2. Joinder of claims need to re-examine SMJ. This case is a diversity case at
first; when bringing in new parties, plaintiff needs to make sure they don’t
upset complete diversity. Cross-claims: some have no diversity, so
supplemental jurisdiction is needed. (§1367)
a. So first you need to know you can bring the cross-claim in the first
place: Rule 13(g) (same transaction/occurrence)
b. Then you need jurisdiction: §1367(a) (common nucleus of fact)
c. These two tests seem very similar. If you meet the first you’ll
probably meet the second.
vi. Bringing in new parties
1. Defendant can only bring in other defendants under Rule 13 if there is already
another defendant to cross-claim against in the first place. Rule 14 is what
allows bringing in new defendants when no cross-claim is initially possible.
53. Case Structure – Joinder of Necessary & Indispensable Parties: Bank of Calif. v. Superior Ct, 1940
a. Overview
i. California Supreme Court
ii. Boyd died, appointing Bank of California executor of estate, and leaving the bulk of
the estate to St. Luke’s Hospital. Other legacies were left to a large number of
scattered legatees. Smedley sued to enforce an alleged contract by which Boyd
agreed to leave her entire estate to Smedley. Summons was served only upon Bank of
America and St. Luke’s. They moved for an order to bring in the other beneficiaries
of the will, on the grounds that they were necessary and indispensable. The motion
was denied by the lower court and the supreme court.
b. Joinder of necessary and indispensable parties
i. Question: Are the absent defendants not only proper parties but “indispensable parties”
in the sense that service upon them or their appearance is essential to the jurisdiction
of the court to proceed in the action?
ii. Answer: No. The absent defendants are not indispensable parties, and the court
has jurisdiction to proceed without them, to determine the rights of the parties
actually before it.
iii. Reasoning: If, in this kind of action, the court has jurisdiction to try the case, and may
render a valid judgment where the plaintiff sues or maintains the suit against less than
all of the distributees, it must be clear that they are not indispensable. They are all
necessary, though, in the sense that the main issue, the validity of the testamentary
disposition of the property, affects their property interests, and the entire matter, the
disposition of all of the decedent’s property, cannot be finally settled without a
binding adjudication for or against every legatee. While necessary parties are so
interested in the controversy that they should normally be made parties in order to
enable the court to do complete justice, yet if their interests are separable from the rest
and particularly where their presence in the suit cannot be obtained, they are not
indispensable parties. Indispensable parties are those without whom the court cannot
proceed. The rule is limited by considerations of fairness, convenience, and
practicability.
c. Related notes from class
i. Rule 19—can complete relief be given to Smedley in the absent defendants’ absence?
No; Smedley wants the whole estate. (Though can argue that it’s her fault for not
bringing them in; that she has dropped her claims against them by not serving them;
and that she can still get complete relief from defendant St. Luke’s.)
ii. Do missing parties have an interest in the suit that will be impaired in their absence?
Not really. If Smedley wins against St. Luke’s, she will have established that the
contract is superior to the will, so if she sues other beneficiaries later, she will have
already established her supremacy. BUT, those other beneficiaries will not be bound
to that judgment because they were not parties to the case.
iii. Will anyone end up with inconsistent obligations if other beneficiaries are not
included? Maybe; the bank could be told to execute AND not execute the will.
54. Case Structure – Third-Party Impleader: Too v. Kohl’s Department Stores, 2003
a. Overview
i. U.S. District Court of New York
ii. Windstar produced and sold apparel. They hired DeCaro and Abraham to start up a
sleepwear division. Windstar was sued by Too for copyright infringement. Windstar
moved to file a third-party complaint seeking contribution and indemnification from
DeCaro and Abraham. The court allowed the contribution claim.
b. Third-party impleader
i. Question: Does Rule 14 allow Windstar to implead DeCaro and Abraham?
ii. Answer: Windstar can file a third-party complaint for contribution, but not for
indemnification.
iii. Reasoning: Impleader under rule 14 is appropriate when the third-party D’s liability to
the third-party P is “dependent upon the outcome of the main claim” or the third-party
D is “potentially secondarily liable as a contributor to the defendant.” The purpose of
this rule is to promote judicial efficiency by eliminating the necessity for the D to
bring a separate cause of action against a third-party for contribution. Upon
determining that a third-party complaint would be appropriate, the factors to be
considered in determining whether to grant leave are:
1. whether movant deliberately delayed filing the motion
2. whether impleading would unduly delay or complicate the trial
3. whether impleading would prejudice the third-party D
4. whether the third-party complaint states a claim upon which relief can be
granted.
Judicial economy would be served in allowing Windstar to implead the others because
this complaint arises from the same core of facts which is determinative of the
plaintiff’s claim. Windstar states a valid claim. No prejudice or delay would result.
However, Windstar’s claim for indemnification is without merit.
c. Related notes from class
i. This case is different from Jeub. Here, Windstar wants compensation from A and D if
W is held liable; in the other case, the restaurant claimed the supplier was completely
responsible. (Like W’s indemnification claim that was thrown out?)
ii. Rule 14—third party is liable if D is liable (not “it’s not me, it’s you”). D can drag in
someone to indemnify them, but can’t bring in someone to take liability on the main
claim.
iii. P controls structure of the suit—we limit who D can bring in as new parties. Bringing
in an indemnifier sticks to P’s lawsuit, but when we allow D to point fingers at
another tortfeasor, we’d allow D to change P’s lawsuit (“you should have sued them,
not us”).
iv. Efficiency: By putting the indemnifier in the first suit, you allow them to defend
themselves on the main claim, which they couldn’t do if the indemnification suit
happened separately after D was found liable in the first suit.
v. In this case, would Abraham and DeCaro have been able to intervene under Rule 24?
If W was found liable, third parties might have interests left unprotected; and
Windstar might not be adequately representing them if preparing to turn around and
sue them if W found liable. So we’d probably let them intervene if there was juris.
vi. Limited nature of impleader:
1. Jurisdiction—need SMJ over new claim and other counter/cross-claims that
result (1367b kicks in if you turn to supplemental jurisdiction).
2. Res judicata—if you don’t implead a third-party D, you can still sue for
contribution later (impleader is not compulsory).
55. Case Structure – Intervention: Smuck v. Hobson, 1969
a. Overview
i. U.S. Court of Appeals for D.C.
ii. In a lower court, a suit against the Board of Education found that the Board violated
the Constitution. The Board did not appeal, but others intervened to appeal on its
behalf: Hansen (resigned superintendent), Smuck (member of the Board), and parents.
The court quickly determined that Hansen and Smuck did not have standing to appeal,
but it allowed the parents to intervene.
b. Intervention, rule 24
i. Question: Should these appellants be allowed to intervene under Rule 24?
ii. Answer: Yes. Appellants would be practically disadvantaged by a decision
without appeal in this case and they are not otherwise adequately represented.
iii. Rule 24(a)(2) permits intervention when the applicant claims an interest relating to the
property or transaction which is the subject of the action and he is so situated that the
disposition of the action may as a practical matter impair or impede his ability to
protect that interest, unless the applicant’s interest is adequately represented by
existing parties.
iv. Reasoning: Policies behind the “interest” requirement: want to dispose of lawsuits by
involving as many apparently concerned persons as is compatible with efficiency and
due process. Two conflicting goals: resolve related issues in a single suit, while
preventing it from becoming too long/complex. An “economic interest” is not always
needed to justify intervention. The parents do have an interest. Second requirement:
would their interest be impaired if they could not appeal? Yes, because if the decision
below becomes final, the parents cannot pursue their interests in a subsequent suit.
Third requirement: are their interests adequately represented by existing parties? No,
because the Board decided not to appeal.
c. Related notes from class
i. Normally you have to be a party to appeal a case, so here some outside parties try to
intervene and become parties to the case. Hansen can’t because he resigned. Smuck
can’t because he was on the Board and thus his interests were represented in his
official capacity as a member of that board (even if he voted against their decision not
to appeal).
ii. The parents: their interest is the outcome that may determine where their children may
go to school. They are not represented by the board like Smuck because they are not
formal members.
iii. The parents are not bringing a new claim/cause of action. Just intervening as
defendants, defending the Board. Though they are not technically defendants against
whom relief will run. They are “schmoozer intervenors”—they feel like they “belong
at the party” and that the court should listen to what they have to say. (If the Board
had appealed, they could have just done this by amicus brief.) They have no legal
interest, but we believe they have some practical interest. Here the court, in hearing
their case, takes over the role of the legislature (deciding where children will go to
school). We begin to read into the nature of “interest” more than just legal interest.
56. Case Structure – Class Actions: Falcon v. General Telephone Co., 1982
a. Overview
i. U.S. Supreme Court
ii. Falcon was passed over for a promotion at the same time several white employees
were granted promotions. He sued, alleging discrimination and that G.T.’s policy
operated against Mexican-Americans as a class. The complaint contained no factual
allegations. Falcon moved to certify a class of all employees who were not promoted
AND who were not hired by G.T. The Supreme Court refused to certify the class.
b. Class actions – Rule 23(a)
i. Question: Does this class meet Rule 23(a)’s requirements?
ii. Answer: No. Falcon’s claim was not typical of other claims against petitioner by
Mexican-American employees and applicants.
iii. Reasoning: Falcon’s claims are not typical of the class (he was hired); he is not an
adequate representative of the class. His individual allegation does not (absent
evidence) justify the additional class inferences. His complaint provided an
insufficient basis for concluding that the adjudication of his discrimination claim
would require the decision of any common question concerning the failure of
petitioner to hire more Mexican-Americans.
c. Related notes from class
i. Why would Falcon want to file a class action rather than an individual claim? Perhaps
he thinks that the generalized evidence (no Mexican-Americans in the company)
would bolster his claim. Perhaps he thinks that he can gain leverage with the larger
claim and get G.T. to settle.
ii. This case worries about all of the 23(a) requirements. Falcon does two things wrong:
1. Takes individual claim and makes it into a class allegation. He presents no
evidence  this is a pleading issue. Needed to have made a reasonable
inquiry into whether discrimination was class-wide.
2. His claim wasn’t typical of others in the class. He wasn’t denied hiring, so he
doesn’t share a claim with those who weren’t hired. Also, the hiring people
and the promotion people may not be able to share one representative because
their interests might conflict (limited number of jobs).
57. Case Structure – Class Actions: Castano v. American Tobacco Co., 1996
a. Overview
i. U.S. Court of Appeals (orig. federal district court for 5th circuit)
ii. Largest class action ever attempted. Ps filed suit seeking compensation for injury of
nicotine addiction. Class was all nicotine-dependent persons in the U.S. who have
purchased and smoked cigarettes manufactured by Ds; their estates; and their loved
ones. The appellate court concluded that the district court abused its discretion in
certifying this class.
b. Class actions: rule 23(b)
i. Question: Can this class be certified under Rule 23(b)?
ii. Answer: No. The district court failed to consider how variations in state law
affect predominance and superiority. Also, its predominance inquiry did not
include consideration of how a trial on the merits would be conducted. Each of
these defects mandates reversal; moreover, at this time, while the tort is
immature, the class complaint must be dismissed as class certification cannot be
found to be a superior method of adjudication.
iii. Reasoning: Our specific concern is that a mass tort cannot be properly certified
without a prior track record of trials from which the district court can draw the
information necessary to make the predominance and superiority analysis required by
rule 23. Also, a main rationale for superiority—judicial efficiency—is lacking: any
savings in judicial resources is speculative. Here, the class action device could
lengthen, not shorten, the time it takes for the plaintiffs to reach final judgment.
c. Related class notes (from Elise)
i. This is a mass tort case under 23(b)(3)
58. Case Structure – Class Actions (Due Process): Hansberry v. Lee, 1940
a. Overview
i. U.S. Supreme Court (orig. Illinois state court)
ii. A class of landowners sued to enforce a racially restrictive covenant involving land in
Chicago. P alleged that Hansberry, a black man, had purchased some of the restricted
land from an owner who had signed the agreement, and that the binding effect of the
covenant had been established in an earlier court action. Ds pleaded that they were
not bound by res judicata because they were not parties to the earlier suit. The Illinois
court concluded that the first action had been a “class”/ “representative” suit so that it
was binding on all the class members, including Hansberry. Supreme Court reversed.
b. Class actions: due process
i. Question: Were the defendants in this case bound by the earlier “class” judgment?
ii. Answer: No. The procedure and course of litigation in the first suit did not
satisfy due process.
iii. Reasoning: To the general rule of due process there is a recognized exception that the
judgment in a “class” suit, to which some members of the class are parties, may bind
members of the class who were not made parties. But, where it cannot be said that the
procedure adopted fairly insures the protection of the interests of absent parties who
are to be bound by it, there has been a failure of due process. Absent parties must be
adequately represented by parties who are present (they must have a joint interest with
present parties, or present parties must be legally entitled to represent the absent ones).
That did not happen here because the plaintiffs in the first case sought to compel
performance of the agreement; defendants here are trying to resist performance.
c. Related class notes – see Elise’s outline
59. Case Structure – Class Actions (SMJ): Snyder/Zahn (not outlined)
60. Case Structure – Class Actions (PJ): Phillips Petroleum Co. v. Shutts, 1985
a. Overview
i. U.S. Supreme Court (orig. Kansas state court)
ii. Phillips spews forth oil. The leaseholds are owned by individuals such as
Shutts. Phillips is trying to screw the little guys by paying them royalties on prices
that are too low. Shutts wants to recover interest on the money that was
withheld. There are 33,000 people in Shutts’s position who get together to sue for the
interest the oil company owes. Shutts sues in Kansas. None of these people have
much interest. Each of them has a small amount of interest in their interest. This is a
perfect example of class litigation bringing together small claims that are too small to
litigate individually. Shutts provides the best possible notice. He sends out a letter to
all of the class members telling them they can opt-out if they want. 28,100 are in,
3,400 opt out, and 1,500 were not found and excluded. Less than 1,000 of the
plaintiffs are actually in Kansas, and a negligible part of the oil and gas leases are in
Kansas. Phillips makes a personal jurisdiction argument that only the Kansas
plaintiffs can sue. Phillips argues that there has to be an opt-in procedure. Supreme
Court says no opt-in procedure is necessary, and there is PJ in the case.
b. Class actions: personal jurisdiction
i. Question: Do the traditional doctrines of personal jurisdiction apply to nonrepresentative class members who are beyond the court’s jurisdiction?
ii. Answer: No. Issues of PJ aren’t the same with out-of-state plaintiffs as with outof-state defendants. Absent class-plaintiffs do not need minimum contacts for a
court to exercise jurisdiction. But, there does have to be due process: notice,
OTBH (thru adequate representative), and the ability to opt out.
iii. Reasoning: Phillips argues that out-of-state defendants must affirmatively consent,
and that plaintiffs must have minimum contacts. However, due process and the
minimum contacts test are meant to protect defendants. The burdens placed by a state
upon an absent class-action plaintiff are of not the same order/magnitude as those
placed upon an absent defendant (absent P doesn’t really have to do anything, and
someone else is protecting his interests). The “opt out” clause satisfies due process.
iv. Related question: Can Kansas law be applied to all the cases? Answer: No. Given
Kansas’ lack of interest in claims unrelated to that state, and the substantive conflict
with other jurisdictions, application of Kansas law to every claim in this case is
sufficiently arbitrary and unfair as to exceed constitutional limits. An important
element when considering fairness is the expectation of the parties.
c. Related class notes: see Elise’s outline
i. Note that absent this holding, we would not be able to have nationwide class actions,
but would have to split them up into all 50 states.
61. Discovery – Initial Disclosures & Attorney Sanctions: Cummings v. General Motors, 2004
a. Overview
i. U.S. Court of Appeals, 10th Cir. (Oklahoma)
ii. The Cummings were involved in a car accident. Mr. Cummings ran a stop sign and
the car skidded into a ditch, injuring Mrs. Cummings. They sued GM, asserting that
Mrs. Cummings sustained injuries because of the design of the seat belt and seat, as
well as GM’s failure to warn. The jury returned a verdict for GM. The Cummings
appealed. After filing appeal, the Cummings found GM child safety seat test videos.
They argued that the tests fell within their prior requests for production and would
have helped their case. They filed a motion for relief under Rule 60(b). The district
court denied the motion. Appellate court affirmed, also denying the motion.
b. Discovery – initial disclosures, attorney sanctions
i. Question: Did Rule 26 require GM to disclose these videos initially?
ii. Answer: No. Under Rule 26, GM was not required to automatically disclose
documents that it did not intend to use.
iii. Reasoning: Under the revised Rule 26, a party is not obligated “to disclose witnesses
or documents, whether favorable or unfavorable, that it does not intend to use”…Rule
26(a)(1) requires that parties make initial disclosures of “all documents, data
compilations, and tangible things that are in the possession, custody, or control of the
party and that the disclosing party may use to support its claim or defenses.”
c. Related notes from class
i. This case, along with Hickman, reveals ways in which discovery can be limited—adds
some nuance to the “playing poker with an open hand” analogy.
ii. Initial disclosure involves the stuff you have to give over to the other side at the outset
without anyone having to ask for it.
iii. The old Rule 26 was broader; required sides to turn over anything “relevant to
disputed facts alleged with particularity in the pleadings.” The new, revised rule takes
the burden off the attorneys to figure out what the other side is going to want. It
narrows what the parties have to turn over at first.
iv. P can make a broader request later, and does here, but court says that it is too broad,
and, when more specific, that it is focusing on the wrong things (other parts in other
cars).
v. The pro’s and con’s of the narrowed discovery rules. Pro: it would be too
burdensome on D to just ask for everything and force them to make the P’s case; they
may have so many documents that it would be extremely hard to figure out what’s
relevant for other side. Con: then again, it is too burdensome on the P to imagine
exactly what might exist that they could use and ask for it specifically.
vi. If this issue had come up during trial, the court might have been more favorable to P
on this point. But after the fact, it’s governed by a stricter rule (60) that makes it
harder to reopen the case later on.
62. Discovery – Attorney Work Product: Hickman v. Taylor, 1947
a. Overview
i. U.S. Supreme Court
ii. A tugboat, the Taylor, sank while trying to tow a railroad car across a river. Five
people died. The tug owners immediately got a lawyer. Before any cases began, the
lawyer interviewed survivors and took statements in case of anticipated litigation.
Later on, five claims were presented. Only one went to trial. The P in that case
(Hickman’s family) filed interrogatories asking D for any statements they may have
taken. D refused to supply those statements. The district court held that those
statements had to be handed over; D still refused and got thrown in jail for contempt.
Appellate court reversed and said that the work product of the lawyer was privileged
from discovery. Supreme Court agreed and found in favor of D on this point.
b. Discovery – attorney work product
i. Question: Is the attorney’s work product privileged from discovery?
ii. Answer: Yes. Written statements made while preparing for trial can only be
discovered if the other side shows substantial need for documents that they
cannot get themselves without undue hardship. Any mental impressions made
by attorneys, however, are always immune from discovery.
iii. Reasoning: The documents that P wants are not privileged, and they are relevant. The
FRCP do not specifically say that they are immune from discovery. But the court has
several policy reasons why they do not want these documents to be discoverable.
First of all, they don’t want one side to do all the work for the other side; P could get
all this information themselves by interviewing the witnesses. Also, having a
lawyer’s mental impressions be discoverable would be bad for the legal profession
because it would encourage lawyers not to write anything down. Attorneys must have
a certain degree of privacy while preparing for trial.
iv. Concurrence: “Discovery was hardly intended to enable a learned profession to
perform its functions either without wits or on wits borrowed from the adversary.”
c. Related notes from class
i. This doctrine was later codified in Rule 26(b)(3).
ii. Court is mostly concerned with the implications on the legal profession.
iii. Work product is discoverable under some circumstances (substantial need, undue
hardship). For example, if one of the interviewees had died. But some things are
inviolate—your personal thoughts, “wits,” tactics, opinions.
63. Summary Judgment – Motion by Plaintiff: Lundeen v. Cordner, 1966
a. Overview
i. U.S. Court of Appeals, 8th Circuit
ii. Mrs. Cordner #1 is the plaintiff. Her late ex-husband worked in Libya. He had an
insurance policy through his employer with Metropolitan- designating his children
with wife #1 as beneficiaries. 2 years later they got divorced. He married wife #2 and
they had a kid, then he died. This is a contest for the insurance money. Wife #1 sued
insurer; wife #2 intervened to also become a kind-of plaintiff. Wife #2 alleged that
before he died, Cordner changed the beneficiaries of the policy in her favor. She
submitted affidavits/exhibit in support and moved for summary judgment. Her main
witness (affidavit) is from Burks, who worked with Cordner in Libya. Burks was the
one who was in charge of changing the policy. The motion was granted and wife #1
appeals on the ground that there is still an issue of material fact. The court here
upheld the summary judgment.
b. Summary judgment – motion by the plaintiff
i. Question: Did the affidavits and exhibits of the plaintiff, wife #2, sustain the necessary
burden in order to allow a summary judgment?
ii. Answer: Yes. The burden was sustained, and SJ was proper.
iii. Reasoning: The general rule is that an insured’s attempt to change his beneficiary will
be given effect if all that remains to be done is a ministerial duty on the part of the
insurer. So if Cordner did all the steps necessary, wife #2 gets the money. Wife #2
has to demonstrate this fact so clearly that there is no longer a genuine issue of fact in
order for summary judgment to be granted under rule 56(c). Her case centers on
Burks’s affidavit. Wife #1 presents no counter-evidence, nor in any way indicates that
this affidavit is not worthy of belief. Wife #1 submitted her own affidavit saying that
Cordner cared about her kids, but offered no other info. Wife #1 said she wants to
cross-examine Burks at trial because his testimony is so important. But there is no
positive showing here that Burks’s testimony could be impeached. Also, Burks
couldn’t even be brought into court b/c he’s in Singapore. Wife #1 would have little
to gain by trying to cross-X him on the witness stand. The court here is not saying
that an affiant’s credibility cannot be put in issue by a litigant, but in doing so, specific
facts must be properly produced. Rule 56(e) says the non-movant must respond or
suffer te fate of a SJ; wife #1 failed to respond to the adequate and substantial
showing of wife #2, so SJ was proper.
c. Related notes from class
i. The person responding to a SJ motion has to present some contrary evidence. What
wife #1 does here is not enough. The court does not think there is sufficient reason to
distrust Burks’ affidavit. Wife #1 had the opportunity to depose Burks but she didn’t.
So we toss out her opposition to the SJ.
64. Summary Judgment – Motion by Plaintiff: Cross v. United States, 1964
a. Overview
i. U.S. Court of Appeals, 2nd Circuit
ii. Cross was a professor of romance languages in NY. He and his wife and dog went on
a long voyage to Europe where he did not pursue a formal course of study or engage
in research, but “immersed himself in the culture” (basically went on vacation). He
tried to deduct his expenses from this trip from his taxes by saying they were work
and education related. He sued the IRS to get his refund; he submitted his own
affidavit and moved for SJ. The district court found that his expenses were deductible,
but the appellate court reversed.
b. Summary judgment – motion by plaintiff
i. Question: Did the affidavit of the plaintiff sustain the necessary burden in order to
allow a summary judgment?
ii. Answer: No. There remains a genuine issue of material fact in this case, and a
judge may not draw fact inferences when ruling on a SJ motion.
iii. Reasoning: Issues of fact- it will have to be determined whether the trip was devoted
in whole or in part to educational advancement, and also which amounts are to be
attributed to that purpose. The lower court granted SJ because the government did not
adduce facts to refute Cross’s claims and because the government had an opportunity
to cross-depose him and did not. Yet this court (despite similarities to Lundeen) sends
the case to trial so that the factual dispute will be resolved there.
c. Related notes from class
i. Cross, as plaintiff, has the burden of proof to show that his expenses were workrelated. He submits only his own affidavit. The difference between this and Lundeen
(besides deference given to the government) is that here the affiant is the P himself,
not a third-party. Cross, the only witness, is completely self-interested. The court
thinks the jury should be the ones to figure out the factual dispute. There is sufficient
distrust of the affiant in this case.
ii. In both of these cases, P is trying to prove a case with one main piece of evidence (an
affidavit), and D has no evidence, but there’s a question of whether we want to trust
P’s evidence. What do we do when there’s evidence on both sides? Sometimes it’s
easier than others to tell when there is a preponderance of evidence.
65. Summary Judgment – Motion by Defendant: Adickes v. S.H. Kress & Co., 1970
a. Overview
i. U.S. Supreme Court
ii. Adickes, a white female teacher, entered Kress’s restaurant with six black students.
The waitress refused her service because she was a white person in the company of
blacks. The police then arrested Adickes on a charge of vagrancy. She sued Kress for
damages for denying her civil rights, and alleged a conspiracy between Kress and the
police. She put forward circumstantial evidence for this claim. Kress moved for SJ
and supplied affidavits from the store manager, chief of police, and other officers,
denying a pre-arranged scheme. Adickes pressed the circumstantial case. But
because the statements she used were hearsay (and inadmissible at trial), the district
court ruled that Adickes had failed to allege any fact from which a conspiracy might
be inferred and granted SJ; the Supreme Court reversed.
b. Summary judgment motion by defendant
i. Question: Did the defendant sustain the necessary burden in order to allow a summary
judgment?
ii. Answer: No. Kress failed to fulfill its initial burden of demonstrating a critical
element in this aspect of the case—that there was no policeman in the store.
iii. Reasoning: If a policeman were present, it might be open to a jury to infer that there
was a conspiracy. On SJ the inferences to be drawn from the facts need to be viewed
in the light most favorable to the non-movant (Adickes here)- so Kress’s failure to
show there was no policeman in the store requires reversal of SJ. Kress didn’t meet
its initial burden of establishing absence of a policeman, so Adickes was not required
to come forward with anything either. If Kress had met its burden, maybe by
submitting affidavits of policemen who said they were not present, Adickes would
have had to do something more than just rely on her complaint’s contrary allegations.
iv. Rule: Where the evidentiary matter in support of the motion does not establish the
absence of a genuine issue, SJ must be denied even if no opposing evidentiary matter
is presented.
c. Related notes from class
i. This is one instance where a defendant moves for SJ and has to try to “prove a
negative” to show that the plaintiff doesn’t have enough evidence to win.
ii. The Supreme Court wants to let the case go forward. Nothing D has said can prove
there was no police officer in the restaurant—they haven’t proven the negative. The
court wants them to completely negate the possibility that there was a police officer in
the restaurant. What the court is saying is: P doesn’t have very much evidence, but
since we want them to get to a jury, we won’t look at their evidence (or lack thereof)
unless D satisfies his burden of proof of “proving the negative.” If D doesn’t put forth
enough negating evidence, we’re not even going to look at what P has. This puts a
huge burden on a D moving for SJ. Later Celotex will try to solve this problem.
66. Summary Judgment – Motion by Defendant: Celotex Corp. v. Catrett, 1986
a. Overview
i. U.S. Supreme Court (orig. D.C. circuit)
ii. Catrett sued Celotex and 15 other manufacturers, saying the death of her husband was
caused from his exposure to products containing asbestos. Celotex moved for SJ,
saying that Catrett had failed to produce evidence that any Celotex product was the
proximal cause of the injuries—Catrett had not identified any witnesses. In response,
Catrett produced three documents (depositions & letters) that she claimed
demonstrated a material factual dispute. Celotex argued that they were all hearsay
and inadmissible. District court granted SJ because there was no showing by Catrett
that her late husband was exposed to Celotex’s product. Court of appeals reversed,
denying SJ because Celotex made no effort to adduce any evidence (affidavits, etc.) to
support its motion. Supreme Court reversed and granted SJ.
b. Summary judgment motion by defendant
i. Question: Did the defendant sustain the necessary burden in order to allow a summary
judgment?
ii. Answer: Yes. Rule 56(c) does not require a party moving for SJ to support its
motion with affidavits/etc negating the opponent’s claim. The moving party only
has to meet the burden of “showing” (pointing out to the court) that there is an
absence of evidence to support the other party’s case.
iii. Reasoning: A motion for SJ may be made pursuant to Rule 56 with our without
supporting affidavits. The appellate court, in denying SJ, was influenced by Adickes.
Yet that case should not be construed to mean that the burden is on the moving party
to produce evidence “proving the negative” (absence of factual issue), even with
respect to an issue on which the nonmoving party bears the burden of proof. SJ
should not be thought of as a shortcut, it is an important part of the system; it more or
less replaces Rule 12 motions to dismiss.
iv. Dissent: The court has not explained what exactly is required of a moving party
seeking SJ on the ground that the nonmoving party cannot prove its case. Dissent
believes that Celotex did not meet its burden of production.
c. Related notes from class
i. P has the burden of proof at trial. To get SJ, D has to prove that P has nothing. Here,
Celotex is not made to show any evidence (affidavits/etc) that negates P’s claim.
Court says Rule 56 does not require this. It says D can submit “affidavits, if any,” but
does not have to submit its own negative evidence. All D has to do is suggest that P
has nothing, and then P has the burden of proof. (Whereas, in Adickes, P never had to
face that burden.) This case thus lowers the standard for a SJ motion brought by D.
67. Summary Judgment – Motion by Defendant: Anderson v. Liberty Lobby, 1986
a. Overview
i. U.S. Supreme Court
ii. Carto (a right-wing publisher) and his company, LL, filed a libel suit against
columnist Anderson for articles portraying Carto and LL as racist and fascist. After
discovery, Anderson moved for SJ on the ground that Carto/LL could not prove by
“clear and convincing evidence” that Anderson acted with actual malice (knowledge
of falsity of statements, or reckless disregard of their truth/falsity), which is the
standard required in such suits. In support, Anderson submitted various affidavits
saying that his writers researched the articles thoroughly and affirming the facts to be
true. Carto/LL responded by pointing to claimed inaccuracies in the articles. The
district court granted SJ for Anderson. Court of Appeals reversed (ruling that it was
irrelevant on a SJ motion that the standard for proving actual malice was “clear and
convincing evidence” rather than just a preponderance). Supreme Court reversed and
remanded for a reconsideration of the SJ motion.
b. Summary judgment motion by defendant
i. Question: Should the clear-and-convincing standard of proof be taken into account
when considering a motion for SJ?
ii. Answer: Yes. The matter needs to be reconsidered to ask whether the evidence in
the record could support a reasonable jury finding either that the plaintiff has
shown actual malice by clear and convincing evidence or that he has not.
c. Related notes from class
i. This case, with Celotex, ushers in more summary judgment.
ii. It asks what you should do when the evidence is lopsided. The court says you need to
take account of the level of proof that will be needed at trial. Here, it’s the C+C
standard, so plaintiff should be held to that standard on a SJ motion as well.
68. Summary Judgment – Motion by Defendant: Matsushita Electric v. Zenith Radio Corp., 1986
a. Overview
i. U.S. Supreme Court (orig. 3rd circuit)
ii. Zenith (American television manufacturers) alleged that a group of 21 Japanese
manufacturers and distributors conspired to fix prices. Matsushita moved for SJ, trial
court granted, but appellate court reversed, arguing that certain “direct evidence” of a
concert of action among defendants created a “genuine issue for trial.” The Supreme
Court held that SJ was proper.
b. Summary judgment motion made by defendant
i. Question: Did the defendant sustain the necessary burden in order to allow a summary
judgment?
ii. Answer: Yes. Defendant showed that plaintiff failed to allege a rational economic
motive to conspire.
iii. Reasoning: Lack of motive bears on the range of permissible conclusions that might
be drawn from ambiguous evidence. In light of the absence of any rational motive to
conspire, there is no genuine issue for trial.
69. Right to a Jury Trial – Legal & Equitable Claims: Beacon Theatres v. Westover, 1959
a. Overview
i. U.S. Supreme Court (orig. California federal court)
ii. Fox Theatres owns a movie theatre in LA county and has exclusivity contracts with
movie distributors. Beacon wants to open a drive-in movie theatre nearby. Fox sues
Beacon for undermining Fox’s contract with the distributors (interference with Fox’s
property rights). Fox also says they’re not violating the antitrust act and wants a
declaratory judgment to say that they’re not violating the law, so Beacon will be
precluded from suing Fox later on this ground. Thus Beacon has to bring a
compulsory counterclaim, suing Fox for antitrust violations. Beacon wants a jury trial
but district judge doesn’t want to give it to them, so Beacon seeks by mandamus to
require it. The appellate court refuses. Supreme Court reverses and gives Beacon the
jury trial.
b. Right to a jury trial – legal & equitable claims
i. Question: When there are legal and equitable claims in one lawsuit, which should get
tried first? (This will determine whether or not the case is heard by a jury.)
ii. Answer: The legal claim must be tried first in order to protect the right to a jury
trial.
iii. Reasoning: Beacon would have been entitled to a jury trial in a treble damage suit
against Fox, so it cannot be deprived of that right merely because Fox took advantage
of the availability of declaratory relief to sue Beacon first.
iv. Dissent: The counterclaim cannot be held to have transformed Fox’s original
complaint into an action at law. The equity claims should be heard first.
c. Related notes from class
i. Fox is a potential D that has turned itself into a P. Instead of waiting to get sued, they
take the initiative to try to take control of the lawsuit.
ii. Fox claims that $ (legal remedy) would be insufficient and thus it needs equitable
remedy, because Fox does not want a jury trial. (The jury would be favorable to the
drive-in.) If Fox were to win, they would get an injunction against other suits- so if
Beacon sued anyway, they’d be in contempt of court.
iii. It’s important to decide which claim gets tried first because in deciding the first one,
the second one will also probably get decided in some way. So if you run the equity
claims first, you do away with the right to a jury trial. If you run the legal claim first,
you do away with the equitable trial, but that’s not a constitutional right.
iv. Is a claim for declaratory judgment characterized as legal or equitable relief? Fox
doesn’t want money or a jury trial, so it looks like an injunction. But you have to look
at the underlying claim that was turned around by the declaratory judgment motion.
v. This case is Beacon v. Westover because Westover is the district court judge whose
refusal to grant a jury trial is being challenged by Beacon.
70. Right to a Jury Trial – Legal & Equitable Claims: Local 391 v. Terry, 1990
a. Overview
i. U.S. Supreme Court (orig. 4th circuit)
ii. Terry and a group of workers had a complaint against McLean trucking company.
They filed a grievance with the union, but the union refused to follow up on it. Terry
sued the union alleging that the union violated its duty of fair representation and
seeking damages for lost wages. Terry requested a jury trial. The district court and
appellate court both affirmed that a jury trial was guaranteed. The Supreme Court
also affirmed the jury trial.
b. Right to a jury trial – legal & equitable claims
i. Question: How do we know if a claim is legal or equitable?
ii. Answer: There is a two-part test for deciding whether a claim is legal or equitable.
We must examine both the nature of the issues involved and the remedy sought.
iii. Reasoning in this case:
1. Nature of issues: An action for breach of a union’s duty of fair representation
did not exist in 1791. We must look for an analogous cause of action that did
exist. The closest thing we can come up with is the trust analogy. But that
does not persuade us that the claim is wholly equitable. There are also legal
issues in the case (breach of contract). This part of the test leaves us in
equipoise.
2. Remedy sought: The only remedy sought is money damages. There are two
exceptions to the general rule that money damages are legal relief. The
remedy sought here does not meet either exception. Thus the claim is legal
and Terry is entitled to a jury trial.
iv. Concurrence: We should get rid of the first part of the test. It is less important than
the second part anyway, and is confusing.
v. Dissent: We must use both parts of the test. In the first part, the trust analogy does
convince us that the claim is equitable. In the second part, we must not assume that
monetary relief must be considered legal relief. A jury trial is not guaranteed here.
c. Related notes from class
i. The court here comes close to a bright-line rule in using the damages portion of the
test as determinative. But they pull back to say that in some cases, money damages
could be equitable (the two exceptions).
71. Right to a Jury Trial – Rule 50 Motions for Directed Verdicts: Galloway v. United States, 1943
a. Overview
i. U.S. Supreme Court (orig. 9th circuit)
ii. No facts provided
b. Rule 50 motions for directed verdicts/j.n.o.v./judgment as a matter of law
i. Question: Does taking a case away from a jury, on the ground that P has not met its
burden of production at trial, a violation of the 7th Amendment right to a trial by jury?
ii. Answer: No. The Amendment was designed to preserve the basic institution of
jury trial in only its most fundamental elements, not the great mass of procedural
forms and details, which varied even when the Amendment was written.
iii. Reasoning: The contention that the Amendment forbids Rule 50 motions has been
foreclosed by repeated decisions made by the Sup. Ct. consistently for a century. The
argument from history is not convincing. Back in 1791, the jury was not an absolute
matter of fact. People argue that higher standards of proof are required now and that
different consequences follow as to further maintenance of the action, so Rule 50 is
different from what existed back then. Well, the Amendment did not bind the federal
courts to the exact procedural incidents or details of jury trial according to the
common law in 1791.
iv. Dissent: The prevalence of Rule 50 motions takes away the essential guarantees of the
7th Amendment. The dissent believes that a verdict should only be directed, if at all,
only when, without weighing the credibility of the witnesses, there is in the evidence
no room whatever for honest difference of opinion over the factual issue in
controversy.
c. Related notes from class
i. This case contemplates how we can justify using Rule 50 motions under the 7th
Amendment. First, we are not reexamining facts tried by the jury (on a renewed
motion, post-verdict). Second, this was done in 1791, so we can do it now. The
dissent says that this second one is a lie, because the demurrer that existed in 1791
was not totally analogous (there were risks then that there aren’t now), but the
majority emphasizes the general principle of having control over the jury that existed.
72. Right to a Jury Trial – Rule 50 Motions: Unitherm Food Systems v. Swift-Eckrich, 2006
a. Overview
i. U.S. Supreme Court
ii. Unitherm sued to declare S-E’s patent invalid and for claims of antitrust violations
with Unitherm’s business. S-E counterclaimed for patent infringement. Before giving
the case to the jury, S-E moved under rule 50(a) for a directed verdict, on the ground
that the evidence was insufficient to find for Unitherm. The motion was denied and
the case went to the jury, who found in favor of Unitherm. S-E did not file either a
rule 50(b) motion (for j.n.o.v.) or rule 59 motion (for a new trial based on the
sufficiency of the evidence). S-E appealed, and the court of appeals reviewed the
sufficiency of the evidence, found it insufficient to sustain the judgment, and ordered
a new trial. Supreme Court reversed.
b. Rule 50 motions
i. Question: If a party never seeks a new trial before the district court, do they forfeit the
right to do so on appeal?
ii. Answer: Yes.
iii. Reasoning: Even if the district court was inclined to grant a new trial on the basis of
arguments raised in D’s preverdict motion, it was without power to do so under rule
50(b) absent a postverdict motion pursuant to that rule. Consequently the court of
appeals was similarly powerless.
iv. Dissent: While a party’s failure to make a rule 50(b) motion precludes the district
court from directing a verdict in that party’s favor, the rule does not purport to strip
the courts of appeals of the authority to review district court judgments or to order
such relief as “may be just under the circumstances.”
c. Related notes from class
i. What can you bring to an appellate court? It has to be something you raised below –
appellate court can only review what happened below, no new issues. You have to be
on the record as objecting to anything you might want to appeal. Most importantly,
you have to make Rule 50 and Rule 59 motions if you want to appeal. If you make 50
(a and b) and 50 you can appeal everything. If you make either only 50 or only 59,
you can’t appeal anything that would have fallen under the other rule. In this case, D
only makes a 50(a) motion. Supreme Court says no new trial because motion was not
renewed. 50(b) is the appealable one. 50(a) when denied isn’t “final,” just put into
abeyance.
73. Right to a Jury Trial – Rule 59 Motions for a New Trial: Aetna Casualty & Surety Co. v. Yeatts, 1941
a. Overview
i. U.S. Court of Appeals, 4th Circuit
ii. Aetna sued to get a declaratory judgment with respect to the coverage of a policy of
indemnity insurance. They denied liability on the round that Yeatts was engaged in
the performance of a criminal abortion at the time he incurred the liability for which
the recovery was had against him, and that such liability was expressly excluded from
the coverage of the policy. The question as to whether Yeatts was engaged in
criminal activity was submitted to the jury. The jury found in Yeatts’ favor. Aetna
had made no motion for directed verdict. After verdict, Aetna moved for j.n.o.v. and
also for new trial, on the ground that the verdict was contrary to the evidence. These
motions were denied, and Aetna appealed.
b. Rule 59 motions for new trial
i. Even if a motion for directed verdict had been made by Aetna (P), it is clear that it
should have been denied, as should also any motion for j.n.o.v. based thereon.
ii. Rule: On such a motion, under rule 59, it is the duty of the judge to set aside the
verdict and grant a new trial, if he is of the opinion that the verdict is against the clear
weight of the evidence, or is based upon evidence which is false, or will result in a
miscarriage of justice.
iii. The exercise of this power is not in derogation of the right to trial by jury, but is one
of the historic safeguards of that right.
iv. Distinction between the rules to be followed in (a) directing a verdict, and (b) granting
a new trial.
1. Where there is substantial evidence in support of P’s case, the judge may not
direct a verdict against him, even though he may not believe his evidence or
may think that the weight of the evidence is on the other side; for, under the
constitutional guarantee of trial by jury, it is for the jury to weigh the evidence
and pass upon its credibility.
2. The judge may, however, set aside a verdict supported by substantial evidence
where in his opinion it is contrary to the clear weight of the evidence, or is
based upon evidence which is false; for, even though the evidence be
sufficient to preclude the direction of a verdict, it is still his duty to exercise
his power to prevent a miscarriage of justice.
v. However, the granting or refusing of a new trial is a matter resting in the sound
discretion of the trial judge, and his action thereon is not reviewable upon appeal.
Thus in this case, while the trial judge might properly have granted the motion for a
new trial, we cannot say that his denial of the motion amounted to an abuse of
discretion on his part.
74. Appeal – Final Judgment Rule: Liberty Mutual Insurance Co. v. Wetzel, 1976
a. Overview
i. U.S. Supreme Court (orig. 3rd circuit)
ii. Wetzel sued Liberty Mutual, saying LM’s employee insurance benefits and maternity
leave regulations discriminated against women in violation of Title VII. District court
ruled for Wetzel on the issue of LM’s liability under Title VII, and LM appealed to
the appellate court. That court held that it had jurisdiction, and proceeded to affirm.
Supreme Court determined that they, and the appellate court, did not have jurisdiction
to hear an appeal because of the final judgment rule.
b. Appeal – final judgment rule
i. Question: Was the district court’s order appealable to the Court of Appeals?
ii. Answer: No. The district court’s order was not a final judgment because it did
not dispose of respondents’ prayers for relief.
iii. Reasoning: Respondents received a favorable ruling on the issue of LM’s liability to
them, but they did not receive any of the relief that they expressly prayed for in their
complaint. Rule 54(b) does not apply here, because that rule applies when there are
multiple claims and one or more, but less than all, are decided. Here there is only a
single claim. And the decision rendered by the district court was by nature
interlocutory and not “final.”
c. Related notes from class
i. Final judgment rule: you have to have a final judgment in order to appeal. This is a
jurisdictional requirement for the appellate court to act.
ii. In this case, Justice Blackmun did not participate, so the court was split. They could
not come to a decision so fell back to the final judgment rule.
iii. An interlocutory appeal on the liability issue seems more efficient than waiting until
relief is decided before appealing. Why take all the time to determine relief if liability
is going to be overturned? We don’t want two separate courts to handle the same case
at the same time.
iv. The court isn’t saying that the partial SJ granted by the district court is not valid. Just
saying that it cannot be appealed on its own.
v. The judges look for various ways around the final judgment rule.
1. Rule 54: multiple claims. You can have a partial judgment on one of the
claims and that judgment can be final and appealable. That isn’t the case here.
2. An injunction can be appealable. But here the judge didn’t rule on injunctive
relief one way or the other. Why is injunctive relief immediately appealable?
It is immediate—you need the D to do something or stop doing something
right away. If it is denied, or granted, and you have to wait until the end of
trial to appeal it, its effects may be irreversible.
3. §1292: sets up a system for the judge to have his/her decision reviewed by
appellate court before continuing with the case. Certification is necessary for
that and was not done here.
4. Collateral judgment rule (Cohen): this is a rule where the court made up an
exception to the final judgment rule that is not explicitly given like with an
injunction, rule 54, or §1292. See Cohen for the rule. It doesn’t apply here.
75. Appeal – Collateral Judgment Rule: Cohen v. Beneficial Industrial Loan Corp., 1949
a. Overview
i. U.S. Supreme Court
ii. Cohen brought a shareholder’s derivative suit. The district court denied Beneficial’s
motion to require Cohen to post security for costs (pursuant to a NJ statute), holding
the statute inapplicable to an action in a federal court. Court of appeals reversed, and
Supreme Court affirmed that decision (approved Beneficial’s motion to require bond).
b. Collateral judgment rule
i. Question: Is the court’s collateral order regarding the bond immediately appealable?
ii. Answer: Yes. Collateral orders are an exception to the final judgment rule
because they are too important to be denied review and too independent of the
cause of action itself to require that appellate consideration be deferred until the
whole case is adjudicated.
iii. Reasoning: The Court gives this provision a “practical rather than technical”
consideration.
c. Related notes from class
i. NJ passed a law for shareholder strike suits where P must post a bond at the beginning
of the suit. Here the court says P doesn’t have to because law is not applicable to
federal court. If P is relieved from this requirement, the requirement is meaningless.
The court issues a collateral order on this issue. This case is now about whether that
collateral order is appealable.
ii. The collateral order doctrine seems very broad in this case. It is restricted in Will.
76. Appeal – Collateral Judgment Rule: Will v. Hallock, 2006
a. Overview
i. U.S. Supreme Court
ii. Agents of the U.S. Customs Service, acting on a warrant, seized computer equipment
at plaintiff’s home. No charges were brought and the equipment was returned in
damaged condition, resulting in financial losses for plaintiff. Plaintiff sued under the
Federal Tort Claims Act, alleging negligence of the agents. While that action was
pending, plaintiff filed a separate negligence suit against the agents themselves. The
action against the U.S. was dismissed. The agents moved to dismiss the second suit,
saying §2676 barred it after the first one was dismissed. Trial court dismissed their
motion, saying the statute did not apply. On appeal the court of appeals held that the
“collateral order” doctrine justified the appeal despite the lack of a final judgment, and
upheld the trial court’s decision. Supreme Court held there was no jurisdiction under
the collateral order doctrine.
b. Collateral judgment rule
i. Question: Was the district court’s order appealable?
ii. Answer: No.
iii. Reasoning: There are three requirements for collateral order appeal.
1. The order must conclusively determine the disputed question
2. It must resolve an important issue completely separate from the merits of the
action
3. It must be effectively unreviewable on appeal from a final judgment
c. Related notes from class
i. This case sets forth the 3 requirements of collateral order doctrine
ii. This doctrine was broad in Cohen. The court tries to draw a line that Rubenstein
argues makes no sense. He says this might have more to do with preclusion than with
immunity.
77. Claim Preclusion: Mathews v. New York Racing Association, 1961
a. Overview
i. U.S. District Court, Southern District of NY
ii. Case #1: Mathews v. 3 individual employees of NYRA (assault & libel). D won.
iii. Case #2: Mathews v. NYRA/detective agency (false arrest, malicious prosecution).
Defendants move for SJ on the ground that the judgment in case #1 is res judicata as
to this new claim. Court finds for defendants (Mathews’ claim is precluded).
b. Claim preclusion
i. Question: Is Mathews precluded from bringing his new claim in a separate suit?
ii. Answer: Yes. A plaintiff cannot split his claim into multiple suits and try them
piecemeal at his convenience.
iii. Reasoning: A “claim” refers to a group of facts limited to a single occurrence or
transaction. It is the facts surrounding the occurrence which operate to make up the
claim, not the legal theory upon which a plaintiff relies. The facts relevant to
Mathews’ current lawsuit were tried to a conclusion in the earlier suit. The parties
were the same because of the doctrine of respondeat superior. Mathews does not get
another day in court by giving a different reason than he gave at first for the same
invasion of his rights (same transaction/occurrence).
c. Related notes from class
i. Defendants are the ones trying to run claim preclusion in case #2.
ii. What could Mathews say?
1. Different defendants (but court says no: respondeat superior)
2. Different claims (but court says they arose out of same transaction)
iii. Take-home message: You have to bring all claims that arise out of the same
“transaction” in your original suit or you cannot bring them later. (Though if there are
different defendants you can split them up. But that is not the case here.)
78. Claim Preclusion: Federated Department Stores v. Moitie, 1981
a. Overview
i. U.S. Supreme Court
ii. Case #1: Moitie, Brown, & 5 other defendants v. FDS (antitrust case, federal court).
FDS wins.
iii. Case #2: Moitie & Brown v. FDS (same antitrust case, state court). FDS removes to
federal court on the basis of a federal defense- federal preclusion rules (can’t do this
anymore). Case is dismissed. Moitie & Brown file appeal.
iv. Meanwhile, 5 other defendants appeal case #1 and get it overturned.
v. Moitie & Brown appeal case: they win because judgment in case #1 was overturned.
vi. Supreme Court rules against Moitie & Brown because they didn’t take place in the
appeal of case #1 and thus don’t get to have the benefits of the overturned judgment.
b. Claim preclusion
i. Question: Are M&B precluded from bringing the same claims in a new court?
ii. Answer: Yes. The judgment from case #1 is res judicata, even though it was
overturned on an appeal in which M&B did not participate.
iii. Reasoning: Res judicata is important because it serves vital public interests:
consistency, fairness. It is a rule of fundamental justice. This case does not get to be
an exception.
c. Related notes from class
i. Supreme Court says yes to claim preclusion even though case #1 overturned.
79. Claim Preclusion/Defense Preclusion: Mitchell v. Federal Intermediate Credit Bank, 1932
a. Overview
i. South Carolina Supreme Court
ii. Case #1: Bank v. Mitchell (farmer). Bank sues Mitchell for $. Mitchell argues as
defense that he already paid. Mitchell wins.
iii. Case #2: Mitchell v. Bank. Mitchell wants his money back. He pleads the same facts
that he pled in his answer in case #1. Court holds that Mitchell’s claim was merged in
the earlier judgment and he cannot bring it now.
b. Defense preclusion
i. Question: Is Mitchell precluded from bringing his new claim in a new lawsuit?
ii. Answer: Yes. His claim was a compulsory counterclaim in the first suit, so
because he did not bring it then, he cannot bring it now.
iii. Reasoning: Mitchell pleads the same facts in his complaint in this case as he did in his
defense in the first case. The same transaction is the root of both cases.
c. Related notes from class
i. This is like a regular claim preclusion case, except that instead of P bringing both suits,
D in the first suit becomes P in the second suit.
ii. “Defense preclusion” is claim preclusion by virtue of the compulsory counterclaim
rule (claim that “should” have been brought as counterclaim). However, defense
preclusion adheres even if jurisdiction doesn’t have a compulsory counterclaim rule
(claim that “could” have been brought as counterclaim). Same effect.
iii. Defense preclusion seems less fair than regular claim preclusion where P is the one
bringing both cases. It has the effect of creating a race to the courthouse. If P and D
both have claims and they both have to be brought in the same suit, each person wants
to file first so he can pick the forum. Suits are thus brought more quickly.
80. Claim Preclusion/Defense Preclusion: Linderman Machine Co. v. Hillenbrand, 1920
a. Overview
i. Indiana Appellate Court
ii. Case #1: L v. H. L wants $ payment for machine. H wins.
iii. Case #2: H v. L. H wants damages for fraud. L answers that this case is barred by
judgment in case #1. The court holds for H (no preclusion).
b. Defense preclusion
i. Question: Is H precluded from bringing his new claim in a new suit?
ii. Answer: No. H’s second claim did not arise out of the same transaction as L’s
claim in the first case, so it was not precluded by the first judgment.
iii. Reasoning: H was not compelled to bring his counterclaim in the first case because it
did not arise out of the same transaction.
c. Related notes from class
i. Claim preclusion turns on the transactional nature of the original case.
81. Issue Preclusion: Cromwell v. County of Sac, 1876
a. Overview
i. U.S. Supreme Court
ii. Case #1: Smith (Cromwell’s agent) v. county. Cromwell wants $ for bonds. County
answers that the bonds were fraudulently issued. Cromwell argues that he is a bona
fide purchaser of the bond and should not be held liable for others’ fraud. Court holds
in favor of the county.
iii. Case #2: Cromwell v. county. Cromwell wants $ for different bonds. Both parties
make same arguments as in first case. County also argues that there is issue
preclusion from case #1. Court holds that case can go forward (no preclusion).
b. Issue preclusion
i. Question: Is Cromwell precluded from bringing the second lawsuit?
ii. Answer: No. This case involves a different claim than the first suit, and a
different issue needs to be litigated.
iii. Reasoning: There is a different cause of action here because they are different bonds
(so, no claim preclusion). Where the second action between the same parties is upon a
different claim/demand, the judgment in the first action operates as preclusion ONLY
as to those issues that were actually litigated and decided. So you always have to ask
if the question was already litigated, not if it might have been litigated. In this case,
Cromwell has brought up different issues that were not litigated in the first case.
c. Related notes from class
i. Issue preclusion: same parties but different transaction.
82. Issue Preclusion: Russell v. Place, 1876
a. Overview
i. U.S. Supreme Court
ii. Case #1: Patent holder v. infringer. Patent holder wins.
iii. Case #2: Patent holder v. infringer. Different transaction (infringement of patent).
The court holds that there is no claim or issue preclusion and the case can go forward.
b. Issue preclusion
i. Question: Was Russell precluded from bringing the second case?
ii. Answer: No. There was not sufficient certainty in the first judgment as to which
issues were actually litigated in order to create a preclusive effect.
iii. Reasoning: In order for a judgment to be preclusive on an issue, it must appear that
the precise question was raised and determined in the former suit.
c. Related notes from class
i. The patent in this case had two aspects, the “fat liquor” used in treating the leather,
and the process. The first judgment did not specify which aspect of the patent was
being infringed. So we have alternative holdings in case #1 and don’t give either
issue preclusive effect. We don’t know which was necessary to the judgment.
83. Issue Preclusion: Rios v. Davis, 1963
a. Overview
i. Texas Appellate Court
ii. Case #1: Poplar sues Davis for damages in a car accident. Davis joins Rio as a thirdparty defendant and tries to get $ from Rio for Davis’ own damages. The court finds
everyone negligent, and no one gets to recover from anyone, so effectively Rio “wins.”
iii. Case #2: Rios sues Davis for damages from the same car accident. Davis claims res
judicata because of the first case. The court lets Rios re-litigate (no preclusion).
b. Issue preclusion
i. Question: Was Rios precluded from bringing the new lawsuit?
ii. Answer: No. Rios is allowed to re-litigate the issue because he had no right to
appeal the first case (which he “won”).
iii. Reasoning: There was no res judicata- the findings on the issues regarding Rios’
liability and negligence in the first case were immaterial because the court found for
Rios. The finding that Rios was negligent was not essential or material to the
judgment and the judgment was not based thereon. Since the judgment was in favor
of Rios he had no right or opportunity to complain or to appeal from the finding of
negligence. He gets to re-litigate.
c. Related notes from class
i. No preclusion out of fairness to defendant in first case (Rios).
84. Preclusion/Mutuality: Bernhard v. Bank of America, 1942
a. Overview
i. California Supreme Court
ii. Elderly woman, Mrs. Sather, lived with the Cooks, who took care of her. She wanted
to give them money to take care of her, so she transferred her bank account over to
them. Soon thereafter, she died. A beneficiary, Bernhard, sued in probate court to get
the money (case #1), and the court decided that the money was a gift to Cook. After,
Bernhard sued the bank in superior court (case #2) to get the money. The bank
pleaded that the probate court had already found that the money was a gift, so the
issue was res judicata. The superior court decided for the bank. Bernhard now claims
that res judicata does not apply because the bank wasn’t a party to the probate court
action. Supreme Court of Cali rules in favor of the bank (preclusion does apply).
b. Preclusion & decline of the rule of mutuality
i. Question: May a non-party to a prior action assert issue preclusion against the losing
party from the prior action?
ii. Answer: Yes. There is no requirement that the party asserting the plea of res
judicata must have been a party, or in privity with a party, to the earlier
litigation. Only the party against whom the plea of res judicata is asserted must
have been a party or in privity with a party to the earlier proceeding.
iii. Reasoning: Three questions determine the validity of res judicata:
1. Was the issue decided in the prior trial identical with the one presented now?
2. Was there a final judgment on the merits?
3. Was the party against whom the plea is asserted a party or in privity with a
party to the prior adjudication?
In this case, the answer to all three is “yes.” Bernhard represents the same persons
and interests that were represented in the earlier probate court case (question 3).
c. Related notes from class
i. This case is the beginning of the breakdown of the rule of mutuality. In that rule,
persons could only benefit from a prior judgment if they were also bound by it.
ii. Non-mutuality is a problem of unequal opportunities. In this case, the bank can run
preclusion against Bernhard, but she couldn’t use it against the bank if she had won
case #1. You can only run preclusion against someone who has already had their day
in court.
85. Preclusion/Mutuality: Blonder-Tongue Laboratories v. University of Illinois, 1971
a. Overview
i. U.S. Supreme Court
ii. Case #1: University of IL sued a patent infringer. The patent infringer claimed that
the university’s patent was invalid. Patent infringer (defendant) won.
iii. Case #2: University of IL sued another patent infringer (B-T). The patent infringer
argued issue preclusion against the university since the patent was already declared
invalid. The court held that issue preclusion did apply, and found in favor of
defendant.
b. Preclusion & decline of rule of mutuality
i. Same issue as Bernhard, just applied to the federal system by the Supreme Court. A
non-party can defensively run issue preclusion against a plaintiff who lost in an earlier
proceeding.
ii. Reasoning: The mutuality requirement may be eroded in order to limit relitigation of
issues where that can be achieved without compromising fairness. It is not really
tenable to offer every litigant more than one full and fair opportunity for judicial
resolution of the same issue. Relitigation is a waste of time. Litigants who have
never appeared in a prior action may not be collaterally estopped without litigating the
issue because they have not had their day in court. Abrogation of the mutuality rule in
patent cases will save some judicial time.
c. Related notes from class
i. If the university had won case #1, they could not run issue preclusion against the
second infringer (B-T) because B-T had not yet had their day in court. So a patent
holder has to relitigate in every infringement suit.
ii. If there are 3 cases, and the first 2 have inconsistent outcomes, you can’t run
preclusion in the third case, you have to relitigate.
iii. We put a lot of faith (too much?) in the outcome of the first case when we allow a
defendant to run issue preclusion. But we consider it important to consider judicial
economy and efficiency, only letting each person get one day in court. We also may
be worried about accuracy, that we might get inconsistent outcomes with repeat cases.
86. Offensive Non-Mutual Issue Preclusion: Parklane Hosiery v. Shore, 1979
a. Overview
i. U.S. Supreme Court
ii. Case #1: The SEC filed suit against Parklane, alleging that Parklane had made a false
and misleading proxy statement. The court found for the SEC and entered a
declaratory judgment.
iii. Case #2: Shore brought a stockholder’s class action against Parklane, making the
same allegations that Parklane had made a false and misleading proxy statement.
Shore then moved for SJ, asserting that Parklane was precluded from relitigating the
issues that had been resolved against them in case #1. The trial court denied the
motion, but the Supreme Court granted it (offensive non-mutual preclusion OK).
b. Offensive non-mutual issue preclusion
i. Question 1: Can Parklane be precluded from relitigating facts resolved adversely to
them in a prior equitable proceeding with another party under the general law of
collateral estoppel? E.g. May a litigant who was not a party to a prior judgment
nevertheless use that judgment “offensively” to prevent a defendant from relitigating
issues resolved in the earlier proceeding?
ii. Answer 1: Yes. Since Parklane received a “full and fair” opportunity to litigate
their claims in case #1, they are collaterally estopped from relitigating the
question of whether the proxy statements were materially false and misleading.
iii. Reasoning: Offensive preclusion should be treated differently than defense preclusion
for two reasons. First of all, offensive preclusion may actually increase rather than
decrease the incentive for more litigation. Second, it may be unfair to a defendant. In
this respect, one must consider the possibility of relying upon inconsistent judgments
or denying the defendant procedural opportunities. In this case, Shore could not have
joined in the first action, so we do not need to punish them for creating needless
litigation, and the “fairness factors” do not rule out preclusion.
iv. Question 2: Would the use of offensive collateral estoppel in this case violate
Parklane’s 7th Amendment right to a jury trial?
v. Answer 2: No. Nothing in the 7th Amendment dictates that collateral estoppel
should not be used, even though because of lack of mutuality there would have
been no collateral estoppel in 1791.
c. Related notes from class
i. In this case, a plaintiff is trying to run offensive issue preclusion against a repeat
defendant. Taking away defendant’s opportunity to defend itself.
ii. In this case, Parklane already knew that case #2 had been filed when it was defending
case #1. It seems somewhat less fair when case #2 is just looming in the future as
potential litigation.
iii. The court says there is no procedural opportunity that Parklane could have in case #2
that it didn’t have in case #1. What about a jury trial? The court assesses this
separately and finds that preclusion is still OK. This contradicts the Court’s insistence
on the importance of a jury trial in Beacon Theatres.
iv. Each case gets looked at separately- there’s no hard and fast rule about offensive issue
preclusion. Factors are considered.
87. Preclusive Effect of Class Action Judgments: Cooper v. Federal Reserve Bank of Richmond, 1984
a. Overview
i. U.S. Supreme Court
ii. Case #1: the Equal Employment Opportunity Commission sued the Bank for
discriminating against blacks. Four individual plaintiffs intervened, and a class was
certified. Baxter and five others were members of the class and did not opt out. The
court found some instances of discrimination but said that the Bank had not engaged
in a “pattern and practice” of discrimination. So, the Bank won this suit.
iii. Case #2: The Baxter individuals filed a separate action against the Bank for individual
discrimination. The Bank moved to dismiss, saying that they were members of the
class and were bound by the judgment in case #1. The Supreme Court allowed the
case to go forward because the individuals were not precluded.
b. Preclusive effects of class action judgments
i. Question: Were the Baxter plaintiffs precluded by the judgment in the class action
case?
ii. Answer: No. The first judgment bars class members from relitigating the
question of the Bank’s patterns and practices of discrimination, but it does not
preclude the Baxter plaintiffs’ individual claims.
iii. Reasoning: In general, a judgment in favor of either side is conclusive in a subsequent
action between them on any issue actually litigated and determined, if its
determination was essential to that judgment. There is a distinction between an
individual’s claim of discrimination and a class action alleging a general pattern or
practice of discrimination (see General Telephone Co. v. Falcon). The rejection of a
claim of classwide discrimination does not warrant the conclusion that no member of
the class could have a valid individual claim.
c. Related notes from class
i. The Baxter plaintiffs aren’t precluded because they’re trying to litigate a different
issue than in the first case.
ii. Could the Bank have tried to run claim preclusion instead of issue preclusion, by
saying that the same transaction/occurrence gave rise to both claims? In other words,
why shouldn’t these individuals’ claims be merged into the 1st judgment? The
Supreme Court doesn’t really go into this because the Bank didn’t try to claim it. The
district court judge in case #1 had announced what preclusive effect the judgment
would have. He said that the “pattern & practice” claim would be precluded but left
open the possibility of individual claims. Also it’s possible to think of there being two
different causes of action. In case #1 there was a classwide cause of action rather than
just an aggregation of individual causes of action.
iii. Think about the relationship between claims and remedies. It’s possible for there to
be two discrimination claims, one asking for injunctive relief and one asking for
money damages. How is it possible that one will not preclude the other?
iv. The take home point from this case is: you can run a “patterns and practices” case and
individual claims are not merged into the judgment. Normal class action cases are
groups of individual claims, so this will not apply to that sort of case.
v. You can’t run preclusion against someone who didn’t have the procedural opportunity
to litigate in the first case (e.g. if it was in small claims court, etc.)
88. Binding Non-Parties: Martin v. Wilks, 1989
a. Overview
i. U.S. Supreme Court
ii. Case #1: The NAACP sued the city of Birmingham for race discrimination against
blacks. The parties settled during trial, and judgment was embodied in a consent
decree (a settlement entered as an official judgment). The consent decree set goals for
hiring blacks as firefighters and for promoting them.
iii. Case #2: White firefighters sued the city, alleging that whites were being denied
promotions illegally in favor of blacks. The city responded that the consent decree
from case #1 (in which the whites had not participated) precluded case #2. The
Supreme Court held in favor of letting case #2 go forward (not precluded).
b. Binding non-parties
i. Question: Were the white firefighters, who were not parties to case #1, precluded from
bringing their suit on the same issue?
ii. Answer: No. A voluntary settlement (in the form of a consent decree) between
one group of employees and their employer cannot possibly “settle” the
conflicting claims of another group of employees who do not join in the
agreement, even if the second group of employees is a party to the litigation.
iii. Reasoning: A judgment or decree among parties to a lawsuit resolves issues as among
them, but it does not conclude the rights of strangers to those proceedings. The law
does not impose upon any person entitled to a hearing the burden of voluntary
intervention in a suit to which he is a stranger. (There’s no such thing as compulsory
intervention.) A party seeking a judgment binding on another cannot obligate that
person to intervene; he must be joined. It makes sense to place on the parties
themselves a burden of bringing in additional parties, rather than placing on potential
additional parties a duty to intervene when/if they acquire knowledge of the lawsuit.
iv. Dissent: The white firefighters should have joined; it’s ok to punish people for
“sideline sitting”. Because they went to a hearing on the consent decrees in case #1,
they have had their day in court.
c. Related notes from class
i. What happened here is that discrimination law (because of the composition of the
court) changed between the two cases. So the supreme court had to find some
procedural way of upsetting the first decision.
ii. They say that even though Wilks (white firefighters) participated in the fairness
hearings in case #1, they didn’t get in the trial or discovery phases and thus didn’t
have their day in court.
iii. Also, you can’t say that the white firefighters were represented by the city of
Birmingham in the first case and thus precluded. You can’t be bound by something
the government does on your behalf.
iv. Take home points: If you want to bind someone by a judgment, join them. Though
there are some more complex ways of thinking about this…
1. Were they bound by virtue of their intervention in the fairness hearings? NO
2. Did Birmingham represent them enough to bind them? NO
3. How could original plaintiffs have figured out how to join/bind all the people
who might be affected? They’d have to make a defendant class action—very
difficult
89. ADR/Arbitration: Hooters of America v. Phillips, 1999
a. Overview
i. U.S. Court of Appeals, 4th Circuit
ii. Phillips was a bartender at Hooters. An official there sexually harassed her. She quit
her job, then contacted Hooters through an attorney claiming that the restaurant had
violated her Title VII rights. Hooters responded that she was required to submit her
claims to arbitration according to a binding agreement to arbitrate between the parties.
Phillips refused to arbitrate. Hooters filed suit to compel arbitration. Phillips
defended on the grounds that the agreement to arbitrate was unenforceable. The
district court and appellate court found for Phillips.
b. Arbitration agreements
i. Question: Is the arbitration agreement between Phillips and Hooters binding and
enforceable?
ii. Answer: No. Hooters materially breached the arbitration agreement by
promulgating rules so egregiously unfair as to constitute a complete default of its
contractual obligation to draft arbitration rules and to do so in good faith.
iii. Reasoning: According to the agreement, Hooters was responsible for setting up a
neutral arbitration proceeding and rules. Yet the Hooters rules are so one-sided that
their only possible purpose is to undermine the neutrality of the proceeding. Some
problems with the agreement (among many others):
1. Hooters does not have to plead anything in response to P’s pleadings.
2. Hooters does not have to disclose as much as P does.
3. *The procedure for choosing arbitrators is biased because all arbitrators have
to come from Hooters’ pre-selected list.
4. Hooters can join claims/parties, but P cannot.
5. Hooters can move for summary judgment, but P cannot.
6. Hooters can modify the rules at any time in the proceedings without notice.
The promulgation of all these biased rules breaches the contract. Rescission is the
proper remedy.
c. Related notes from class
i. In this case we’re dealing with a complete inequity between the parties within the
system that Hooters has set up. Contrast this with Circuit City (an inequity between
the arbitration system itself and the civil litigation system, not between the parties).
ii. Ask yourself this. How many of their rules could Hooters have gotten away with
before reaching the critical limit for complete one-sidedness? They probably could
have gotten away with some intra-litigant inequality.
90. ADR/Arbitration: Morrison v. Circuit City Stores, 1999
a. Overview
i. U.S. District Court, Ohio
ii. Morrison was an employee at Circuit City. She signed a dispute resolution agreement
binding her to arbitration. Later, she was fired and she sued for discrimination.
Circuit City moved the court to compel arbitration under the FAA. Morrison argued
that the agreement was unenforceable because it failed to comply with contract law
principles and because it attempted to limit her substantive rights and remedies. The
court decided in favor of upholding the arbitration agreement.
b. Arbitration agreements
i. Question: Is the arbitration agreement unenforceable for failing to protect plaintiff’s
substantive rights?
ii. Answer: No. The agreement is enforceable because plaintiff could effectively
vindicate her statutory and common law causes of action in the arbitral forum
offered by defendant.
iii. Reasoning: Plaintiff makes three arguments against the arbitration agreement:
1. The rules provide for a time limit shorter than that granted under Title VII.
2. Discovery is restrained/limited under the rules.
3. The rules limit the remedies and damages available to her.
The court is not persuaded that the procedure would be an unacceptable replacement
for a judicial forum. Public policy supports this decision, for Congress as well as
federal and state courts generously support arbitration.
c. Related notes from class
i. In this case, the inequity problem is an inequality between the arbitration proceeding
rules and the civil litigation rules – not an inequality between the two parties, as in
Hooters above.
ii. Arbitration is supposed to be a more efficient dispute resolution system. In order to
get this increased efficiency, you have to be prepared to give up some things.
iii. Ask this. Is it worrisome that the Supreme Court is ok with allowing one side to limit
substantive liability through contracting? What else could Circuit City have gotten
away with before reaching the one-sidedness limit that we ran up against in Hooters?