Civ Pro II Outline
Cases:
Question: SMJ/FRCP 12(b)(1)
Osborn and Parker filed motions to dismiss for lack of subject matter jurisdiction under FRCP
12(b)(1). How should the court rule on these FRCP 12(b)(1) motions? Explain your answer.
Mottley (statute or constitutional (well-pleaded complaint rule),
Strawbridge (Complete diversity of Citz. + 1331 - 75k)
Hertz – Corp. citizen of state inc. AND PPB
PJ FRCP 12(b)(2) + unlimited/enumerated provisions of long arm statute
General:
•
Burnham – physical presence of non-resident defendant in state can be served in
accordance with Due Process.
•
Dailmer AG – So systematic and continuous that defendant is deemed “at home” in
forum state
•
Int’l Shoe – Balancing test of minimum contact factors and reasonableness factors
Purposeful Availment:
•
•
Hanson – Test: whether D sought to serve the market
WWV (Manufactures) – Stream of Commerece Test: foreseeability that it would end up
in forum state (factors: advertising, etc.)
Claim Proclusion
General:
•
•
Claim preclusion prevents a claim from being litigated twice when 1) it is the same
claim; 2) between the same parties; and 3) there was a final judgment on the merits in a
prior action.
An issue should be precluded if 1) it is the same issue; 2) it is the same parties or meets
the non-mutual offensive or defensive issue preclusion exception; 3) the issue was
actually litigated and determined; 4) by a final judgment on the merits; and 5) the issue
was essential to the judgment.
Offensive Claim Proclusion:
•
Parklane - Supreme Court decided that offensive issue preclusion could be applied in the
trial court’s discretion but issued guidelines stating that offensive issue preclusion should
not apply if application of offensive preclusion would be unfair to the Defendant.
•
Application’s Fairness to D: When deciding if application is unfair to the Defendant the
court should look to see if the Defendant had sufficient incentive to vigorously litigate the
previous suit, if the Defendant would be subject to inconsistent judgments, or if the
second proceeding has procedural opportunities the first one did not.
Failure to Join Indispensable Party
General:
•
•
•
•
The first step under Rule 19(a) is to analyze if the party should be joined and then if it is
feasible to join them (meaning personal juris, subject matter juris, and venue are
satisfied). If it is not feasible, then the second step under Rule 19(b) is to determine if the
case should proceed without the party.
Factors: Rule 19(a) factors for when a party should be joined are: 1) If in the parties
absence complete relief cannot be accorded among those already parties, or 2) If the party
is not joined, it could result in prejudice to the party because he could not protect his
interest in the subject matter, or 3) If not joined, it could result in inconsistent or double
obligations to the current parties in the suit.
If 19(a) = YES => Is it feasible to join party?
o 1391(a)(2)
If 19(a) = NO => Rule 19(b) says the court must decide if the case should proceed
without this person depending on the following factors: 1) Extent of prejudice to the
absent party or those already parties; 2) Extent to which prejudice can be lessened or
avoided by shaping relief or protective provision in judgment; 3) Whether the judgment
rendered in person’s absence will be adequate; and 4) whether Plaintiff will have an
adequate remedy if the action is dismissed for non-joinder.
o ASK: Could party have joined under Rule 24?
State Fee Provision – State vs Federal Rule
1. The state statute awards attorney’s fees to plaintiffs prevailing under that statute,
2. while the federal judge-made practice does not award attorney’s fees to prevailing
parties.
• The Rules of Decision Act requires federal courts sitting in diversity to apply state
substantive law (28 USC § 1652), so the question is whether this fees provision is
substantive and must be applied by the federal court.
Civil Procedure II in context:
•
Personal Jurisdiction: 4(k)
◼ Where can plaintiff sue defendant? Which state?
•
Notice/Service of Process
◼
How must defendant be notified of lawsuit?
•
Venue
◼ If federal court, in which judicial district?
•
Most convenient forum
◼ If federal court, may seek transfer to a more convenient forum within United
States.
◼ If federal court and more convenient forum is foreign country, may seek a forum
non conveniens dismissal.
•
Subject Matter Jurisdiction
◼ Which court (federal or state) within that state?
1. If federal court, need SMJ basis for every claim.
2. If filed in state court, can ∆ remove?
•
Erie
◼ If a diversity or supplemental claim in federal court, will state or federal law be
applied?
•
Preclusion
◼ What are consequences of a completed lawsuit?
•
Joinder
◼ Which claims and persons can/must be joined?
Review: Personal Jurisdiction
1. Statutory Basis – courts do not have inherent power to exercise jurisdiction over people,
so need enabling statute
◼ Federal court: FRCP 4(k)
◼ State court: Long-arm statute – 2 types:
◼ Type 1: jurisdiction consistent with Due Process
◼ Type 2: enumerated provisions
2. Constitutional Basis – 3 ways to satisfy:
◼ Consent
◼ General Personal Jurisdiction
◼ Specific Personal Jurisdiction
Review: Personal Jurisdiction – Statutory Basis in fed courts – 4(k)(1)(A)
◼ 4(k)(1)(A): Limits federal courts to the state long-arm authority
◼ 4(k)(1)(B): “Bulge jurisdiction” – parties added under Rule 14 or Rule 19 may be served
if within 100 miles of federal courthouse
◼ 4(k)(1)(C): Federal statute authorizes nationwide service (e.g., antitrust, securities,
Interpleader Act)
◼ 4(k)(2): Defendants with insufficient contacts with any one state may be subject to
personal juris. in federal question case if sufficient contacts with U.S.
Review: Personal Jurisdiction – Constitutional Basis
◼ Consent
◼ Waiver (Rule 12(h)(1)) & Forum selection clause (Carnival)
◼ A forum selection clause is not fundamentally unfair solely because the
clause was not negotiated.
◼ Reasoning: 1) More certainty where court will be, 2) venue selected in
good faith (i.e. headquartered there), 3) reduce litigation costs (passed
onto consumer)
◼ General Personal Jurisdiction
◼ Transient or tag jurisdiction (Burnham)
◼ A non-resident is properly served if he is physically present in the forum
state, and the forum state may exercise personal jurisdiction over him
without violating due process.
◼ Defendant’s contacts with forum are so continuous and systematic as to render it
“at home” in forum (Daimler AG)
◼ A court can assert general jurisdiction over a corporation if the
corporation’s affiliations with the forum state are so continuous and
systematic as to render the corporation at home in the state.
◼ Easy cases: individual’s domicile; corp’s state of inc. & ppb
◼ Specific Personal Juris. (Int’l Shoe and its progeny)
◼ Due process requires that defendant, “if he be not present within the territory of
the forum, he have certain minimum contacts with it such that the maintenance of
the suit does not offend ‘traditional notions of fair play and substantial justice.’”
◼ Case analogies; minimum contacts and reasonableness factors
Review: Personal Jurisdiction – Consent
◼ ∆s may consent to personal jurisdiction when a dispute arises by not objecting (waiver)
◼ ∆s may consent in advance of any dispute by contract provisions
◼ Carnival: Forum selection clause involves waiver of constitutional right, so two
levels of scrutiny:
1. Is contract enforceable? (contract law analysis)
2. Fundamental fairness?
a) Bad faith?
b) Fraud or overreaching?
c) Notice and opportunity to reject?
Review: Personal Jurisdiction – Specific Personal Jurisdiction
◼ Minimum Contacts Factors
◼ Whether ∆ derives benefits from contacts with state (purposeful availment)
◼ Whether ∆ purposefully directs acts toward state (purposeful availment)
◼ Whether ∆ could foresee suit in forum state
◼ Volume of contacts
◼ Relation between contact and claim
◼ Systematic and continuous nature of contacts
◼ Reasonableness Factors
◼ Plaintiff’s interest in obtaining relief in forum
◼ Interstate judicial system’s interest in efficient resolution of dispute
◼ State interest in regulating ∆’s conduct
◼ State interest in opening courts to its residents
◼ Burden on ∆
◼ Location of witnesses and evidence
◼ Shared interest of several states in furthering substantive social policies
Review: Notice/Service of Process
◼ Statutory Basis
◼ Federal court: FRCP 4 provides methods
◼ State court: Long-arm statute provides methods
◼ Constitutional Basis
◼ Mullane – Due Process requires “notice reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the action and
afford them opportunity to present their objections.”
◼ Mullane mentions 3 types of service: personal, mail, publication. How do you know
which is sufficient?
◼ Form must be reasonably certain to inform those affected
◼ Or, where conditions do not reasonably permit such notice, form chosen must not
be substantially less likely to bring home notice than other feasible and customary
substitutes.
◼ So when might publication notice be reasonable?
◼ Where reinforced by other steps likely to attract attention to proceeding (post
notice on land, seize personal prop.)
◼ Or cases where not reasonably possible or practical to give more adequate
warning (missing or unknown persons)
Review: Service under FRCP 4
◼ Individual within the U.S.
◼ Federal law – Rule 4(e)
◼ Waiver – Rule 4(d) (and see Rule 4(d)(1) for waiver)
◼ Comply with state law – Rule 4(e)(1)
◼ Personal service (by nonparty over 18) – Rule 4(e)(2)(A)
◼ Leave at abode with suitable age/discretion resident – 4(e)(2)(B)
◼ Agent appointed to accept process – Rule 4(e)(2)(C)
◼ Corporation, Partnership, or Association within the U.S.
◼ Federal law – Rule 4(f)
◼ Waiver – Rule 4(f) (and see 4(d)(1) for waiver)
◼ Comply with state law – Rule 4(h)(1)(A)
◼ Serve officer or agent – Rule 4(h)(1)(B)
Review: Venue 28 U.S.C. §1391(b)
b) Venue in General. A civil action may be brought in–
1) a judicial district where any defendant resides, if all defendants are residents of
the State in which the district is located;
2) a judicial district in which a substantial part of the events or omissions giving rise
to the claim occurred, or a substantial part of property that is the subject of the
action is situated; or
3) if there is no district in which an action may otherwise be brought as provided in
this section, any judicial district in which any defendant is subject to the court’s
personal jurisdiction with respect to such action.
Review: Venue 28 U.S.C. §1391(c)
c) Residency. For all venue purposes –
1) a natural person, including an alien lawfully admitted for permanent residence in
the United States, shall be deemed to reside in the judicial district in which that
person is domiciled;
2) an entity with the capacity to sue and be sued in its common name under
applicable law, whether or not incorporated, shall be deemed to reside, if a
defendant, in any judicial district in which such defendant is subject to the court’s
personal jurisdiction with respect to the civil action in question … and
3) a defendant not resident in the United States may be sued in any judicial district,
and the joinder of such a defendant shall be disregarded in determining where the
action may be brought with respect to other defendants.
Review: Venue 28 U.S.C. §1391(d)
d) Residency of Corporations in States With Multiple Districts. – For purposes of venue
under this chapter, in a State which has more than one judicial district and in which a
defendant that is a corporation is subject to personal jurisdiction at the time an action is
commenced, such corporation shall be deemed to reside in any district in that State within
which its contacts would be sufficient to subject it to personal jurisdiction if that district
were a separate State, and, if there is no such district, the corporation shall be deemed to
reside in the district within which it has the most significant contacts.
Review: Transfer 28 U.S.C. §1404
◼ 28 U.S.C. §1404(a): “For the convenience of parties and witnesses, in the interest of
justice, a district court may transfer any civil action to any other district or division where
it might have been brought or to any district or division to which all parties have
consented.”
◼ Either party may seek transfer
◼ Transfer to district where it could’ve been filed
◼ 1631 - Transferor court’s law governs (change court not law)
◼ Enforce forum selection clause by seeking a transfer and court should ordinarily
transfer – Atlantic Marine
◼ When parties have entered into a valid forum-selection clause that
designates a federal venue, the case should be transferred to the designated
district unless extraordinary circumstances exist that are unrelated to the
convenience of the parties.
Review: Other Transfer Provisions
◼ §1406: “The district court of a district in which is filed a case laying venue in the wrong
… district shall dismiss, or if it be in the interest of justice, transfer such case to any
district … in which it could have been brought.”
◼ Cannot dismiss if court is a proper venue. Atlantic Marine
◼ §1631: Whenever … court finds that there is a want of personal jurisdiction, the court
shall, if it is in the interest of justice, transfer such action ... to any other such court in
which the action ... could have been brought at the time it was filed …, and the action …
shall proceed as if it had been filed in … the court to which it is transferred ….”
◼ Transferee court’s law governs (changes law and court)
Review: Forum Non Conveniens
▪
Piper Aircraft v. Reyno: Start with presumption in favor of plaintiff’s choice of forum,
but lesser presumption if has not chosen its home forum. Then consider public & private
interest factors.
◼ Private Interests: access to proof, ability and cost to get witnesses, ability to view
premises, other practical problems
◼ Public Interests: court congestion, local interest, trial in place of governing law,
unnecessary conflicts of law, application of foreign law, burden on jurors
Review: Subject Matter Juris.
◼ Federal courts have limited juris. (Art. III)
◼ Federal Question SMJ = 28 U.S.C. §1331
◼ Claim “arising under” federal law or Constitution
◼ Well-pleaded complaint rule – Mottley
◼ Plaintiff's "well pleaded complaint" must state that the defendant
directly violated some provision of the Constitution, laws, or
treaties of the United States.
◼ Diversity SMJ = 28 U.S.C. §1332
◼ Diversity of citizenship under §1332(a)(1, 2, 3 or 4)
◼ Complete diversity rule – Strawbridge
◼ All defendants must be completely diverse from all plaintiffs in
order to obtain federal jurisdiction based on diversity of
citizenship.
◼ Amount in controversy >$75,000 under §1332(a)
◼ Supplemental SMJ = 28 U.S.C. §1367
◼ For claims not falling within two original jurisdiction bases (federal
question or diversity)
Review: Federal Question SMJ – 1331, 1332
◼ Constitutional Authority = Article III, §2
◼ “The judicial Power shall extend to all Cases, in Law and Equity, arising under
this Constitution, the Laws of the United States, and Treaties made, or which shall
be made, under their Authority....”
◼ Statutory Authority = 28 U.S.C. §1331
◼ “The district courts shall have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.”
◼ Well-pleaded complaint rule – Supreme Court’s interpretation of 28 U.S.C. §1331 in
Mottley
◼ An action arises under federal law when plaintiff’s statement of its own cause of
action shows it is based on federal law or the Constitution. Mottley
◼ Or plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal law. See Smith and Grable cases (Yeazell
pages 215-216)
◼ Plaintiff cannot anticipate federal defense or counterclaim.
◼ Plaintiff cannot state a federal claim that is immaterial and made solely for the
purpose of creating federal jurisdiction.
Review: Diversity SMJ
◼ Constitutional Authority = Article III, §2
◼ “The judicial Power shall extend . . . --to Controversies between two or more
States; -- between a State and Citizens of another State; -- between Citizens of
different States; between Citizens of the same State claiming Lands under Grants
of different States, and between a State, or the Citizens thereof, and foreign
States, Citizens or Subject.
Statutory Authority = 28 U.S.C. §1332(a)
◼ 28 U.S.C. §1332(a) has two requirements:
◼ Diversity of citizenship under a §1332(a) provision
◼ Complete diversity rule – all plaintiffs must be diverse from all
defendants. Strawbridge v. Curtiss
◼ Plaintiff cannot collusively or improperly join parties to achieve diversity
– 28 USC §1359
◼ Amount in controversy >$75,000 under §1332(a)
◼ Plaintiff must establish a good faith allegation of AIC; defendant would
have to show to a legal certainty that claims do not meet AIC.
◼ See aggregation rules
28 U.S.C. § 1332(a):
◼ citizens of different States;
◼ citizens of a State and citizens of a foreign state, except between citizens of a
State and citizens of a foreign state who are lawfully admitted for permanent
residence in the U.S. and are domiciled in the same State;
◼ citizens of different States and in which citizens of a foreign state are additional
parties; and
◼ foreign state as plaintiff and citizens of a State or States
Test for Citizenship Individual/Corporation
◼ Test for citizenship of individual?
◼ Present domicile and intent to remain indefinitely
◼ Test for citizenship of corporation?
◼ Deemed citizen of state of inc & state of ppb–§1332(c)(1)
◼ Hertz defined ppb as “nerve center” – where corp’s high level officers direct,
control, and coordinate its activities
◼ Test for citizenship of partnership (& other uninc.)?
◼ Deemed citizen of states in which its owners are citizens
◼ Test for citizenship of permanent resident alien?
◼ Treated as foreign citizen except as stated in §1332(a)(2)
Review: Diversity SMJ --Aggregation Rules
◼ 1 plaintiff with multiple claims (even if unrelated claims) against 1 defendant = may
aggregate
◼ 2 plaintiffs with separate and distinct claims against 1 defendant = may not aggregate
◼ 1 plaintiffs with separate and distinct claims against 2 defendants = may not aggregate
◼ Multiple plaintiffs with common undivided interest and single title or right = use total
value (Rare)
◼ Multiple defendants with common interest asserted against them (joint & several liab.) =
use total value
◼ Injunctions = value to plaintiff or cost to defendant
Supplemental SMJ – U.S. Constitution Art. III, §2
◼ “The judicial Power shall extend to all Cases, in Law and Equity, arising under
this Constitution, the Laws of the United States, and Treaties made, or which shall
be made, under their Authority; . . . – to Controversies between two or more
States; – between a State and Citizens of another State; – between Citizens of
different States; – between Citizens of the same State claiming Lands under
Grants of different States, and between a State, or the Citizens thereof, and
foreign States, Citizens or Subject.
Supplemental SMJ – 28 U.S.C. § 1367(a) – Defined (One SMJ claim of many = SSMJ)
(a) “Except as provided in subsections (b) and (c) or as expressly provided otherwise by
Federal statute, in any civil action of which the district courts have original jurisdiction,
the district courts shall have supplemental jurisdiction over all other claims that are so
related to claims in the action within such original jurisdiction that they form part of the
same case or controversy under Article III of the United States Constitution. Such
supplemental jurisdiction shall include claims that involve the joinder or intervention of
additional parties.”
Supplemental SMJ – 28 U.S.C. § 1367(b)
(b) “In any civil action of which the district courts have original jurisdiction founded solely
on section 1332 of this title, the district courts shall not have supplemental jurisdiction
under subsection (a) over claims by plaintiffs against persons made parties under Rule 14,
19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed
to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs
under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims
would be inconsistent with the jurisdictional requirements of section 1332.”
Supplemental SMJ – 28 U.S.C. § 1367(c)
c) “The district courts may decline to exercise supplemental jurisdiction over a claim under
subsection (a) if –
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which district
court has original jurisdiction,
(3) district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for declining
jurisdiction.”
Supplemental SMJ - 1367
◼ If original claim is federal question:
◼ “supplemental jurisdiction over all other claims that are so related to claims in the
action within such original jurisdiction that they form part of the same case or
controversy” – §1367(a)
◼ Includes claims joining additional parties – see §1367(a) last sentence
◼ Except discretionary – see §1367(c) factors
◼ If original claim is diversity-only:
◼ “supplemental jurisdiction over all other claims that are so related to claims in the
action within such original jurisdiction that they form part of the same case or
controversy” – §1367(a)
◼ Except §1367(b) says not apply to claims
◼ by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 or
◼ by persons joining as plaintiffs under Rule 19 or 24
◼ “when exercising supplemental jurisdiction … would be inconsistent with
… section 1332”
◼ Except discretionary – see §1367(c) factors
Review: Removal – 1441, 1446
◼ Defendants may remove “any civil action brought in a State court of which the district
courts of the United States have original jurisdiction.” 28 U.S.C. §1441(a)
◼ Remove to the district court embracing the place where the state action is
pending.
◼ Except: cannot remove when only basis of fed. subject matter jurisdiction is diversity and
there is a home-state defendant. §1441(b)(2)
◼ Notice of removal must be filed within 30 days after ∆ served with initial pleading –
§1446(b)(1) & (b)(2)(B)
◼ If initial pleading is not removable, may file notice of removal within 30 days after ∆
receives amended pleading, motion, order, or other paper making case removable –
§1446(b)(3)
◼ “other paper” includes discovery responses – §1446(c)(3)(A)
◼ Exception: Cannot remove a diversity-only case more than one year after action
commenced – §1441(b)(2)
◼ Unless court finds plaintiff has acted in bad faith to prevent removal –
§1446(c)(1)
◼ Bad faith includes if plaintiff deliberately failed to disclose the actual AIC
to prevent removal – §1446(c)(3)(B)
◼ Notice of Removal filed in federal district court
◼ Must state grounds for removal and filing is subject to Rule 11 sanctions – 28
U.S.C. §1446(a)
◼ All ∆s must join in or consent to removal – §1446(b)(2)
◼ Notice served on parties and state court clerk – §1446(d)
◼ Amount in Controversy
◼ Sum demanded in good faith in the initial pleading deemed the AIC – §1446(c)(2)
◼ Except: notice of removal may assert AIC if pleading seeks nonmonetary relief,
does not state specific sum, or state practice permits recovery in excess of amount
demanded and court finds AIC is met – §1446(c)(2)(A-B)
Remand - 1447
◼ Motion to remand for any defect other than lack of subject matter jurisdiction must be
made within 30 days after notice of removal filed – §1447(c)
◼ I.e., any defects under the removal statutes
◼ Federal courts must remand at any time that it appears subject matter juris. is lacking –
§1447(c)
◼ Order remanding case to state court
◼ may include order to pay costs and actual expenses, including attorney fees,
incurred with removal – §1447(c)
◼ is not reviewable on appeal or otherwise – §1447(d)
Review: Erie Doctrine - 1652
◼ Erie Railroad v. Tompkins: A federal court sitting in diversity must treat state statutes and
state court decisions as sources of law when looking for legal principles that apply to a
case.
◼ Interpreting Rules of Decision Act, 28 U.S.C. §1652: “The laws of the several
states, except where the Constitution … of the United States or Acts of Congress
otherwise require or provide, shall be regarded as rules of decision in civil actions
in the courts of the United States, in cases where they apply.”
◼ Klaxon Co v. Stentor Elec: A federal court sitting in diversity must apply the conflicts of
law rules of the forum state.
◼ Predicates:
◼ Federal court has a claim that arises under diversity or supplemental subject
matter jurisdiction.
◼ Parties raise a potential conflict between a state provision and a federal provision.
◼ Must federal court apply the state provision?
◼ Analysis depends on whether or not conflict involves a FRCP, FRAP, or fed statute
Review: What preclusion law applies?
◼ Prior state decision – Give same preclusive effect to decision as it would have in the
courts of such state.
◼ Prior federal decision – Give same preclusive effect to decision as it would have in the
federal courts, which depends on what type of claim:
◼ Prior federal question claim – Apply federal common law (Restatement 2d
Judgments)
◼ Prior federal diversity claim – Apply federal common law, which says judgment
must be given same effect as it would have been given by the courts of the state in
which the federal diversity judgment was rendered unless … (Semtek)
Review: Erie Doctrine
◼ When conflict between a state provision and a FRCP, FRAP, or federal statute:
◼ Is it a true conflict?
◼ If it is a true conflict, apply Hanna I:
◼ Is statute constitutional? (If FRCP or FRAP, was Rules Enabling Act
constitutional? yes – Sibbach)
◼ If FRCP or FRAP, is Rule within scope of Rules Enabling Act (i.e.,
regulates practice/procedure)?
◼ If so, then apply FRCP, FRAP or federal statute
◼ If NOT a true conflict, should state rule be applied?
◼ When conflict between a state rule and a federal judge-made practice (includes silence):
◼ Is state rule “bound up” with state-created rights and obligations, or integral part
of state statute? Byrd
◼ Even if not, is it outcome determinative? York/Byrd
◼ Consider Erie’s twin aims to decide if outcome determinative at time of
suit: Would following federal practice lead to forum shopping or
inequitable admin of laws? Hanna II
◼ Even if bound up or outcome determinative, are there “affirmative countervailing
considerations”? Byrd
◼ Balance federal and state interests
Review: Preclusion
Review: Claim preclusion
1) Same claim
◼ Same transaction test – RS (Second) Judgments
◼ Applied by federal courts & notice pleading states
◼ Ask if same common core of operative facts in both cases (facts related in
time, space, origin or motivation, etc)
◼ Same cause of action test – RS (First) Judgments
◼ Ask if same evidence is necessary for both cases
2) Same parties or parties in privity
◼ See next slide
3) Final judgment on the merits
◼ Fed law: preclusive effect when judgment rendered on merits or when litigant had
opportunity to get to the merits
Claim Preclusion – “same parties” or “parties in privity”
◼ Generally separate individuals hold separate claims – no matter how closely they or their
claims are related.
◼ Due process prohibits binding non-parties to judgment with 6 exceptions (parties in
privity) – Taylor v. Sturgell
1. Express agreement to be bound by prior action
2. Substantive legal relationships: successive property owners
3. Procedural representation: trustees, guardians
4. Party assumes control over prior litigation (public law litig.)
5. Party loses individual suit then sues as class representative
6. Special statutory schemes such as bankruptcy and probate
Review: Issue Preclusion
1) Same issue
◼ Watch for context differences (burdens of proof, definitions)
2) Actually litigated and determined
◼ Multiple grounds potentially support the judgment, but cannot tell which were
actually litigated and decided (Parks)
3) Final judgment on the merits
4) Essential to the judgment
◼ Multiple grounds, which were actually litigated and decided, support the
judgment
◼ 2d RS Judgments: none precluded, unless affirmed on appeal
◼ 1st RS Judgments: all precluded
5) Between the same parties or parties in privity, or an exception for non-mutuality . . .
Non-mutual Issue Preclusion
◼ Parklane: Trial judge may apply non-mutual offensive issue preclusion except where
◼ plaintiff easily could have joined in earlier suit, or
◼ application of issue preclusion would be unfair to ∆
◼ E.g., low stakes/incentives in first case
◼ E.g., inconsistent judgments
◼ E.g., different procedural opportunities in second case that likely would
cause a different result
◼ Blonder-Tongue: Trial judge may apply non-mutual defensive issue preclusion except
where
◼ application of issue preclusion would be unfair to plaintiff (same examples as
above)
Review: Joinder (Given)
Permissive Joinder of Claims
◼ Rule 18: “A party asserting a claim, counterclaim, crossclaim, or third-party claim may
join, as independent or alternative claims, as many claims as it has against an opposing
party.”
◼ Cautionary Notes:
◼ Not mandatory, but look for preclusion concerns
◼ Must satisfy subject matter jurisdiction
◼ Must satisfy personal jurisdiction
Compulsory Counterclaims – Rule 13(a)
1) “A pleading must state as a counterclaim any claim that–at the time of its service–the
pleader has against an opposing party if the claim:
A. arises out of the transaction or occurrence that is the subject matter of opposing
party’s claim; and
B. does not require adding another party over whom the court cannot acquire
jurisdiction.
2) The pleader need not state the claim if:
A. when the action was commenced, the claim was the subject of another pending
action; …”
◼ Cautionary Notes:
◼ §1367(a) supplemental jurisdiction will apply for ∆s
◼ If fail to assert it, barred from bringing later
Permissive Counterclaims – Rule 13(b)
◼ Rule 13(b) Permissive Counterclaims
◼ “A pleading may state as a counterclaim against an opposing party any claim that
is not compulsory.”
◼ So if a counterclaim is not compulsory, it is a permissive counterclaim and will
need subject matter jurisdiction basis.
◼ Rule 13(h) Joining Additional Parties. “Rules 19 and 20 govern the addition of a person
as a party to a counterclaim or crossclaim.”
Crossclaims – Rule 13(g)
◼ Rule 13(g): “A pleading may state as a crossclaim any claim by one party against a
coparty if the claim arises out of the transaction or occurrence that is the subject matter of
the original action or of a counterclaim, or if the claim relates to any property that is the
subject matter of the original action. . . .”
◼ Note:
◼ Coparties means parties on same side of the v.
Permissive Joinder of Parties as Plaintiffs or Defendants
◼ Rule 20(a)(1 & 2):
◼ Right to relief must be asserted by each plaintiff, or against each defendant
◼ Arising out of the same transaction or occurrence, or series of transactions or
occurrences, and
◼ Common question of law or fact
◼ Rule 20(a)(3):
◼ “Neither a plaintiff nor a defendant need be interested in obtaining or defending
against all the relief demanded. The court may grant judgment to one or more
plaintiffs according to their rights, and against one or more defendants according
to their liabilities.”
Impleader – Rule 14 (Given)
Rule 14(a)(1):
◼ “A defending party may, as third-party plaintiff, serve a summons and complaint
on a nonparty who is or may be liable to it for all or part of the claim against it.
But the third-party plaintiff must, by motion, obtain the court’s leave if it files the
third-party complaint more than 14 days after serving its original answer.”
◼ Nonparty’s liability must be derivative of P’s claim against ∆/3PP (e.g., indemnity
or contribution)
◼ So cannot use Rule 14 to say “It was him, not me” who is liable to the plaintiff.3
◼ 6
◼ Rule 14(b): If claim asserted vs. plaintiff, plaintiff can use impleader if a ∆ could
(but may be smj problem)
Rule 14(a)(2):
◼ 3P∆ must assert
◼ Any Rule 12 defenses to 3PP’s claim
◼ Any Rule 13(a) compulsory counterclaims against 3PP
◼ 3P∆ may assert
◼ Any Rule 13(b) permissive counterclaims against 3PP
◼ Any Rule 13(g) crossclaims against another 3P∆
◼ Any defenses that ∆/3PP has to the P’s claim
◼ Any claims against P arising from transaction or occurrence that is subject
matter of P’s claim against the ∆/3PP
Rule 14(a)(5):
◼ 3P∆ may assert a Rule 14 impleader claim
Rule 14(a)(3):
◼ P may assert against 3P∆ any claim arising out of the transaction or occurrence
that is subject matter of P’s claim against the D/3PP (but may be smj problem)
◼ 3P∆ must then assert any Rule 12 defense and any compulsory counterclaim
◼ 3P∆ may then assert any permissive counterclaim or any crossclaim
◼ Rule 14(a)(4):
◼ any party may move to strike the third-party claim, to sever it, or to try it
separately
Compulsory Joinder – Rule 19(a) & (b) (Given)
1) Should absent person be joined?
◼ Incomplete relief among existing parties without absent person?
◼ Absent person has interest relating to subject matter of action that may as a
practical matter be impaired or impeded if absent?
◼ Absent person has interest relating to subject matter of action that make existing
party subject to multiple/inconsistent obligations?
2) If no to all three questions, do not join.
If yes to any question, ask if feasible to join (smj, pj, venue)?
3) If feasible, join. If not, ask if case should proceed without person?
◼ Might judgment prejudice absent person or existing parties?
◼ Can prejudice be lessened or avoided by …?
◼ Will judgment in person’s absence be adequate?
◼ Plaintiff have adequate remedy if case dismissed for nonjoinder?
4) If case should proceed without person, proceed.
If not, dismiss case because indispensable party.
Rule 19 Examples:
◼ Joint obligation, on which all joint obligees or all joint obligors are not joined
◼ Ownership in property, in which all people claiming an interest are not joined
◼ Representative cases, in which representative or represented parties are not joined
◼ Limited fund or pool of assets, in which all potential claimants are not joined
Intervention of Right – Rule 24(a) (Given)
Rule24(a)
a) “Intervention of Right. On timely motion, the court must permit anyone to intervene who:
. . . 2) claims an interest relating to the property or transaction that is the subject of the
action, and is so situated that disposing of the action may as a practical matter impair or
impede the movant's ability to protect its interest, unless existing parties adequately
represent that interest.”
◼ Need “significantly protectable interest” (not a “direct” interest)
◼ Proposed intervenor bears burden to show that representation “may be”
inadequate (look for any potential conflict of interest)
Rule 24(b)
b) “Permissive Intervention … (1) On timely motion, the court may permit anyone to
intervene who: … B) has a claim or defense that shares with the main action a common
question of law or fact.”
a) “In exercising its discretion, the court must consider whether the intervention will
unduly delay or prejudice the adjudication of the original parties' rights.”
Martin v. Wilks and Hansberry v. Lee
◼ Martin v. Wilks: Binding effect requires actual participation, even if had notice and an
opportunity to object or intervene.
◼ Interprets Rules 19 and 24, but in shadow of Due Process. Puts burden of joinder
on parties in case.
◼ (Federal statute has altered for employment cases.)
◼ Hansberry v. Lee: Due Process requires class be adequately represented as requirement
of binding effect for class adjudication.
◼ Can collaterally challenge binding nature of class judgment if argue not
adequately represented.
Diversity?
Statutory Interpleader
Rule 22 Interpleader
2 diverse claimants (§1335)
complete diversity
(stakeholder v. claimants)
AIC?
≥ $500 (§1335)
> $75,000
PJ/Service?
Nationwide (§2361)
Ordinary PJ & Rule 4
Venue?
Residence of any claimant
(§1397)
Ordinary venue
Injunctions?
May enjoin other proceedings
(§2361)
Only where necessary in aid of
jurisdiction
Statutory v. Rule Interpleader
Class Action Certification (NOT GIVEN)
◼ Comply with all Rule 23(a) provisions
1) Numerosity
2) Commonality
3) Typicality
4) Adequacy of representation
◼ Comply with one Rule 23(b) class action type
1) Inconsistent obligations or limited fund
2) Primarily injunctive or declaratory relief
3) Primarily money damages then must also show
◼ Predominance – common Qs predominate over indiv.?
◼ Superiority – class action best alternative?
Class Action Notice
◼ In Rule 23(b)(1) and 23(b)(2) classes:
◼ court may direct appropriate notice to class members. Rule 23(c)(2)(A).
◼ In Rule 23(b)(3) classes:
◼ requires individual notice to class members and an opportunity to opt out. Rule
23(c)(2)(B)
◼ Phillips Petroleum v. Shutts:
◼ Rule 23 (at least for (b)(3) class) protects Due Process rights of absent class
members by requiring: 1) notice and opportunity to be heard, 2) opportunity to opt
out, and 3) adequate representation at all times.
Class Action Fairness Act
28 USC §1332(d)(2) alters diversity jurisdiction
◼ Minimal Diversity: any plaintiff class member diverse from any defendant
◼ Amount in Controversy: > $5,000,000
◼ Aggregate class members’ claims – §1332(d)(6)
§1332(d)(2) changes do not apply if
◼ Primary ∆s are States, State officials or other governmental entities – §1332(d)(5)
◼ Plaintiff class members are < 100 – §1332(d)(5)
◼ Class action solely involves claims regarding securities or corporate governance –
§1332(d)(9)
Court shall decline jurisdiction under §1332(d)(4)(A) if:
◼ > 2/3 of ¶ class members are citizens of forum;
◼ One significant ∆ is citizen of forum; and
◼ Principal injuries incurred in forum.
Or under §1332(d)(4)(B) if:
◼ ≥ 2/3 of ¶ class members are citizens of forum; and
◼ Primary ∆s are citizens of forum.
Court may decline jurisdiction under §1332(d)(3) if
◼ > 1/3 but < 2/3 of ¶ class members are citizens of forum; and
◼ Primary ∆s are citizens of forum
◼ Based on consideration of §1332(d)(3) factors:
◼ Whether claims involve matters of national or interstate interest;
◼ Whether claims will be governed by laws of forum or other states;
◼ Whether action has been pleaded to avoid Federal jurisdiction;
◼ Whether action was brought in a forum with distinct nexus with class
members, alleged harm or ∆s;
◼ Whether number of forum citizens is substantially larger than number
from any other State, and citizenship of other members is dispersed among
substantial number of States;
◼ Whether, during 3 years preceding filing of this action, other class actions
asserting same or similar claims have been filed
Alters removal and remand
◼ §1453(b): Class action removable by any ∆
◼ Without consent of all ∆s
◼ Without regard to any home state ∆
◼ Eliminates one year limitation of §1446(b)
◼ But doesn’t apply to class actions involving solely securities or corporate
governance – §1453(d)
◼ §1453(c): Appeals court may review orders granting or denying remand motion
Diversity SMJ for Class Actions without CAFA
◼ Diversity
◼ Look to citizenship only of class representatives. Supreme Tribe of Ben-Hur v.
Cauble
◼ Each class member had to satisfy AIC
◼ Amount in Controversy
◼ In 2005, Supreme Court ruled that supplemental jurisdiction applies to additional
plaintiffs who fail to satisfy AIC requirement, as long as complete diversity of
citizenship is satisfied and at least one named plaintiff satisfies AIC requirement.
Exxon Mobil Corp. v. Allapattah
Class Action Settlement and Dismissal (NOT GIVEN)
◼ Rule 23(e) requires court approval of any “settlement, voluntary dismissal, or
compromise” of “the claims, issues, or defenses of a certified class”
◼ After notice to all class members who would be bound
◼ Judge must conduct a hearing
◼ And find settlement is “fair, reasonable, and adequate”
◼ Any class member may object to the proposal
◼ An objection may be withdrawn only with court approval
◼ If ∆ is subject to state or federal regulation, the regulatory authorities must be
notified of the suit and a pending settlement. 28 U.S.C. §1715.