CP13 - USC Gould School of Law

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Agenda for 13th Class
• Admin
– Name plates
– Slide handouts
• Review 1995 Exam
• Intro to 2nd half of class
• Joinder
• Class Actions
• Intro to Subject Matter Jurisdiction
1
Assignment for Next Class I – Fed Q
• Note that the assignment for the next class is described in this and the next three
slides
– US Constitution Article III
– 28 USC 1331, 1338, 1441(a)-(b)
– FRCP 8(a)(1), 12(b)(1), 12(h)(3)
– Yeazell pp. 191-206
– Questions to think about / Writing Assignment
• Summarize Louisville.
– Your summary should include the answer to Yeazell. P. 199 Q1
• Blackboard multiple choice questions 1-4
• Questions on the next slide
– Optional -- Glannon Chapter 4
2
Assignment for Next Class II – Fed Q
• Under the FRCP as it exists today, answer the following questions about Louisville
– If plaintiffs had drafted a “well pleaded complaint,” what would have been the
key allegations of that complaint?
– If plaintiffs had drafted a well-pleaded complaint, what paper would defendant
have filed in response? What would have been the key elements of that
paper?
– How would plaintiffs have raised the unconstitutionality the Act of Congress
which the defendant alleges prohibited giving the passes that the railroad gave
the Mottleys?
– If defendant’s answer had admitted that it had given passes to the Mottleys
and had not honored them, but asserted as an affirmative defense that the
passes were invalidated by an Act of Congress, what motion could the plaintiff
have made in order to get judgment without discovery or trial?
• Yeazell pp. 199ff Qs 3, 4b
3
Assignment for Next Class III -- Diversity
• 28 USC 1332
– Focus on 1332(a)
– 1367(d) is Class Action Fairness Act (2005)
• 28 USC 1369 (skim)
• Yeazell pp. 207-21
• Briefly summarize Redner
• Yeazell Pp. 209 Q1, 3b, 4,
• Suppose P is a citizen of Turkey, and D is a citizen of Egypt admitted to permanent
residence in the US and domiciled in MA. P sues D in federal district court to
collect a $100,000 debt. Is there federal jurisdiction?
– First consider this question under the current of 28 USC 1332(a) (the version in
your Rules Pamphlet
– Now consider this question under 28 USC 1332(a) as it existed before 2011 (See
next slide)
• Does the older statute give you a different answer?
• If so, is that answer constitutional under US Constitution, Article III, Section
2?
• Would a purposivist interpretation of the text give you a different answer
than a textualist interpretation?
• Can you see why 28 USC 1332(a) was amended in 2011?
• Optional. Glannon Ch 5
4
28 USC 1332(a) before 2011 Amendment
• The district courts shall have original jurisdiction of all civil actions
where the matter in controversy exceeds the sum or value of
$75,000, exclusive of interest and costs, and is between-– (1) citizens of different States;
– (2) citizens of a State and citizens or subjects of a foreign state;
– (3) citizens of different States and in which citizens or subjects of a
foreign state are additional parties; and
– (4) a foreign state, defined in section 1603(a) of this title, as
plaintiff and citizens of a State or of different States.
• For the purposes of this section, section 1335, and section 1441, an
alien admitted to the United States for permanent residence shall be
deemed a citizen of the State in which such alien is domiciled.
5
Review of 1995 Exam
– Statute
• Triple damages
• No contributory negligence defense
– Doesn’t need amendment to complaint
» Same facts relevant to common law & statutory cause of action
– Ways to raise legal defects in defense asserted by Def in answer
» Reply
» 12(c) motion on pleadings
» Partial summary judgment
» Protective order barring discovery on contributory negligence
» Object to jury instruction on contributory negligence
– Since plaintiff never raised problem with defendant’s assertion of
contributory negligence in trial court, it is waived on appeal
6
Introduction to Second Half of Class
– First half of class -- Stages of simple lawsuit
• Service of process, pleading, discovery, trial, post-trial motions, appeals
• SJ, settlement, ADR
– 2nd half of course
• Complex litigation
– Multiples parties and claims -- Joinder, class actions
– Multiple suits– Collateral Estoppel & Res Judicata
• What court?
– Subject matter jurisdiction
» Federal or state court?
– Personal jurisdiction
» If state court, which state’s court?
» If federal court, federal court in which state?
– Venue – what district within a state?
• What law?
– Choice of Law
» If applying state law, which state’s law?
– Erie
» When apply state law in federal court in diversity case?
7
Joinder
• Rules start from assumption that suits may involve a single plaintiff suing a single
defendant on a single claim
– Multiple parties and claims are allowed ONLY if explicitly permitted by a rule
• Proper joinder does NOT mean case properly in court, still need:
– Personal jurisdiction
– Subject matter jurisdiction
– Venue
• Note that joinder expands possible pleadings. FRCP 7
– 3rd party complaint
– Answer to counter claim
– Answer to cross-claim
– Answer to 3rd party complaint
8
Joinder of Claims
Claim 1
Plaintiff
Defendant
Claim 2
• Joinder of claims always allowed. FRCP 18(a)
– But judge can, in discretion, always sever.
• Joinder is compulsory, if arises out of same transaction or occurrence
– Not in FRCP, but part of res judicata
– If related claim is brought in later action, defendant can have the case
dismissed by raising the defense of res judicata
Counterclaims (FRCP 13(a) &(b))
Original Claim
Original
plaintiff
Original
defendant
Counterclaim
• Counterclaims are always allowed. FRCP 13(a) and (b)
• Counterclaims are “compulsory” if they arise out of the same “transaction or
occurrence” as the original claim. FRCP 13(a)
– If compulsory counterclaim is not asserted, cannot be asserted in separate suit
10
Joinder of Parties
Defendant 1
Plaintiff 1
Claim 1
Plaintiff
Claim 1
Defendant
Claim 2
Claim 2
Defendant 2
Plaintiff 2
• Joinder of parties allowed, if claims arise out of the
same transaction or occurrence AND there is a question
of law or fact in common. FRCP 20
• FRCP19 addresses compulsory joinder of “necessary
parties,” but not part of this course
Crossclaims
Original claim 1
Original
plaintiff
Defendant 1
Crossclaim
Original claim 2
Defendant 2
• Crossclaims are allowed only if they arise out of the
same transaction or occurrence as the original action.
FRCP 13(g)
• Crossclaimant can join unrelated claim(s). FRCP 18(a)
3rd Party Claims
Original
plaintiff
Original claim
Original Defendant
3rd party plaintiff
3rd party claim
3rd party defendant
• 3rd party claims allowed only if 3rd party plaintiff claims that 3rd party defendant is
liable to 3rd party plaintiff for some or all of liability that original defendant may
owe to original plaintiff. FRCP 14(a)(1)
– Indemnity – Contract in which one party (e.g. parts supplier) agrees to
reimburse another party (e.g. final manufacturer) for liaiblity (e.g. liability final
manufacturer may incur to consumer)
– Contribution – Part of tort law which allows jointly liable defendants to sue one
another to apportion liability
• Different from cross-claim, because 3rd party defendant wasn’t sued by original
plaintiff
3rd Party Claims (cont.)
Original
plaintiff
Original claim
Original Defendant
3rd party plaintiff
3rd party claim
3rd party defendant
• 3rd party plaintiff may join any claims it has against the 3rd party defendant. FRCP
18(a)
• 3rd party defendant can assert any counterclaim against 3rd party plaintiff.
14(a)(2)(B)
• 3rd party defendant can assert claim against original plaintiff, if it arises out of the
same transaction or occurrence as the plaintiff’s claim against third-party plaintiff.
14(a)(2)(D)
• Plaintiff may assert claims against 3rd party defendant that arise out of the same
transaction or occurrence as the original claim
– Then 3rd party defendant may then assert any counterclaims. FRCP 14(a)(3)
• Including permissive counterclaims, not part of same transaction or occ.
Joinder Questions
– Pp. 816 Q5
– Briefly summarize Price
– Pp. 818ff. Qs 1-2
15
Class Actions I
• Class Action is super joinder device
– Way of joining lots of plaintiffs (or defendants)
– Single lawyer represents all
– Consent from each plaintiff not required
– “Class representative” is “named plaintiff”
• Usually chosen by class lawyer
• Advantages
– Low cost as compared to lots of individual suits
– Allows case to be brought where each plaintiff has stake that is too small to
justify individual suit
• But where, in aggregate, significant wrong has been done
• Disadvantages
– Class lawyer does not always act in interest of class
• May be more interested in fees for self than in relief for class
– Large magnitude of potential liability may “coerce” defendants into settling
weak claims
16
Class Actions II
• Class actions must be “certified”
– Plaintiff’s lawyer first brings regular (non-class-action) case on behalf of named
plaintiff(s)
– Plaintiff’s lawyer then petitions judge to certify class
• Prerequisites for class action
– 1. Numerosity. Class is so large that joinder (under Rule 20) is not practical.
23(a)(1)
– 2. Commonality. There are questions of law or fact common to all class
members. 23(a)(2)
– 3. Typicality. The class representative(s) have claims which are typical. 23(a)(3)
– 4. Adequacy. The class representative(s) can adequately represent class.
23(a)(4)
• Technically about parties.
• In reality, about class lawyers.
• Also, no conflicts of interest.
– 5. Case must fit into one of 23(b) categories
• See next page
17
Class Actions III
• 23(b) categories
– (b)(3). Primarily for money damages
• E.g. mass tort
• Common issues must “predominate”
• Class action must be “superior to other available methods for fairly and
efficiently adjudicating the controversy”
– (b)(2). Injunctive or declaratory relief appropriate for whole class
• E.g. desegregation, prison conditions
– (b)(1). Risk of inconsistent litigation
• E.g. limited fund or conflicting injunctions
• Not very common
• Interlocutory appeal of certification decision. 23(f)
– Grant or denial
– Discretionary with court of appeals
18
Class Actions IV
• Notice and Opt-Out. 23(c)(2)
– Only (b)(3) requires “best notice that is practical under the circumstances”
– Only (b)(3) requires the class members be given the opportunity to “opt out”
• Settlement with court approval only. 23(e)
19
Class Actions Questions
• Yeazell Pp. 881ff. Qs 1, 2
• Summarize Walmart
• Why do you think the plaintiffs brought the case as a 23(b)(2) class
action rather than a 26(b)(3) class action?
• What do you think the plaintiffs lawyers in Walmart should have
done after the Supreme Court decision in Walmart?
• Enrom manipulated the price of its stock by failing to disclose
information that would cause share prices to fall. Would a class
action alleging violation of federal securities law against Enrom on
behalf of all shareholders who purchased stock during the period
when the information was being withheld be appropriate?
• RhinePool supplied blood to hemophiliacs, but failed to screen
adequately for AIDS. As a result, many hemophiliacs in dozens of
states got AIDS and some died. Would a product liability class action
against RhinePool on behalf of all hemophiliacs who contracted AIDS
as a result of contaminated blood produced by RhinePool be
appropriate?
20
Introduction to Subject Matter Jurisdiction I
– Federal courts have limited jurisdiction
• Can hear only cases allowed by Constitution and statute
• Constitution sets outer limit of jurisdiction
– But congress can choose to give courts less
• Constitution is not “self-executing”
– Need statutory as well as constitutional authority
– 2 principle categories
• Diversity
– Plaintiff and defendant are citizens of different states
– Complete diversity rules
» No plaintiff is citizen of the same state as any defendant
– Alienage
» One party is US citizen, other party is foreign citizen
• Federal question
– Cases arising out of federal statute or constitution
– Other categories
• Admiralty
• Special statutes, such as 28 USC 1338 (patents, copyrights, etc)
21
Introduction to Subject Matter Jurisdiction II
– Federal jurisdiction is usually “concurrent”
• Plaintiff can bring case either in federal court or state court
– State courts can adjudicate issues of federal law or relating to
treaties or the US Constitution
– Sometimes, federal jurisdiction is “exclusive”
• Plaintiff cannot bring case in state court
– If statute is silent on whether jurisdiction is concurrent or exclusive, it is
concurrent
• See 28 USC 1331. Federal question jurisdiction
– If jurisdiction is exclusive, statute will be explicit
• 28 USC 1338. “No State court shall have jurisdiction over any claim for
relief arising under any Act of Congress relating to patents… or
copyrights”
– But does not specifically exclude state jurisdiction over trademarks,
so states have concurrent jurisdiction.
22
Introduction to Subject Matter Jurisdiction III
– Subject matter jurisdiction must be plead.
• See FRCP 8(a) & Form 7
• Jurisdictional statement is about subject matter jurisdiction (not personal
jurisdiction)
– If court does not have subject matter jurisdiction
• Defendant can bring motion to dismiss under FRCP 12(b)(1)
• Court can (and must) dismiss, even if defendant does not make motion
– Judge Snyder mentioned that her clerks (or externs) perform a subject
matter jurisdiction check of every case
– Case can be dismissed for lack of subject matter jurisdiction at any time
• Issue is never waived.
• Issue can be raised for the first time in appellate court
– By judge or party
23
Federal Question Jurisdiction
– Permissible because allowed by US Constitution, Article III
• “The judicial Power shall extent to all Cases …. Arising under this Constitution,
the Laws of the United States, and Treaties….”
– Authorized by 28 USC 1331
• “The district courts shall have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties….”
– What are cases “arising under” the US Constitution, federal law, or treaties
• Same words used in Article III and 28 USC 1331, but have different meaning
• In Article III: any case in which US constitution, federal statute, or treaty needs
to be interpreted
• In 28 USC 1331: any case in which US constitution, federal statute, or treaty
created the cause of action
– E.g. if complaint would mention or implicitly refer to US Constitution,
federal statute, or treaty
» Well-pleaded complaint rule. Louisville & Nashvill Railroad v Mottley
– Not sufficient that federal issue is a defense
24
» Defense would be raised in answer, not complaint
Diversity Jurisdiction I
• Federal subject matter jurisdiction if
– Citizen of State A sues citizen of state B
– AND “amount in controversy exceeds … $75,000”
• Rationale
– Concern about state court bias against non-citizens
– Concern about anti-corporate bias of state courts
– Federal forum for disputes with inter-state/national implications
• US citizen is citizen of US state in which “domiciled”
– Domicile = residence with intent to remain indefinitely
• “indefinitely” means no plans to leave, even if don’t plan to stay
permanently
– Individuals do not lose domicile in one state until establish domicile
somewhere else
– Student who grew up in MA and went to school in IL and CA may still be citizen
of MA, even if hasn’t lived there for 10 years, as long as never intended to
remain indefinitely in IL or CA
• Corporations are citizens of two places
– State of incorporation
– State of principal place of business (PPB)
• PPB = “nerve center” or headquarters. Hertz (2010)
– Means LESS likely to get diversity jurisdiction
• If individual citizen of CA sues corporation incorporated in Delaware with
PPB in CA, then no diversity jurisdiction
• Similarly, if individual citizen of Delaware sues….
25
Diversity Jurisdiction II
• Removal allowed if case could have been brought initially in federal court AND
defendant is NOT from forum state
– CA sues MA in MA court for $80,000, MA defendant cannot remove to federal
court, even though CA plaintiff could have brought case in federal court
• Complete diversity rule
– No plaintiff can be a citizen of the same state as any defendant
• MA v CA & MA, no diversity jurisdiction
• MA & CA v MA, no diversity jurisdiction
• MA & CA v NV, diversity jurisdiction
• AL & AK & CA & DE v AL & FL & KS & MO & NH & NM & OH
– NO diversity jurisdiction
– Rationale
• In-state party protects out-of-state party
– Doesn’t make sense, because co-defendants may have divergent
interests
• Reduce federal caseload
– Not constitutionally required
• Congress could change by statute
26
• Similar to status of well-pleaded complaint rule
Diversity Jurisdiction III
• Also diversity jurisdiction if
– Suit between citizen of US and foreigner (citizen or subject of foreign state). 28
USC 1332(2)
• CA v. France; MA v Germany, etc.
• Called “alienage jurisdiction”
– Alien admitted to US for permanent residence treated like citizen of the state
in which domiciled
• CA v French permanent resident domiciled in MA. Diversity
• CA v French permanent resident domiciled in CA. No diversity
• If no diversity, can, of course, still get federal jurisdiction through federal question
• Even if diversity of citizenship, must still show personal jurisdiction & venue
27
Removal
– If jurisdiction is concurrent, plaintiff can choose federal or state court
• But if defendant prefers federal court, it can “remove” the case to federal
court. 28 USC 1441
– Removal is proper whenever a case could have been brought initially in federal
court. 28 USC 1441(a)
• Except, in diversity cases, when the defendant is a citizen of the state in which
sued. 28 USC 1441(b)
28
Subject Matter Jurisdiction in State Court
• A 2nd meaning of subject matter jurisdiction is the jurisdiction of a specialized court
– E.g. jurisdiction of bankruptcy court, tax court, probate court, small claims
court
• 2nd meaning is generally more important in state court
• Unlike federal courts, state courts can generally hear any cause of action
– U.S. Constitution does not limit jurisdiction of state courts
– Although some statutes give federal courts exclusive jurisdiction
• And thus bar state court jurisdiction
– So don’t need to think about diversity jurisdiction or federal question
jurisdiction to determine state court subject matter jurisdiction
– State constitutions or statutes may limit state court jurisdiction
• State are free to set up court systems as they please
– Most have more specialized courts than federal courts
• Probate, small claims court, family court
– Non-specialized state court is usually called “superior court”
• But in NY called “supreme court”
– Highest appellate court in NY called “Court of Appeals”
29
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