MAS v. PERRY
United States Court of Appeals, Fifth Circuit
489 F.2d 1396 (1974) (rehearing and cert. denied)
Ainsworth, Circuit Judge [unanimous].
This case presents questions pertaining to federal diversity jurisdiction under 28 U.S.C. §
1332, which ... provides for original jurisdiction in federal district courts of all civil actions that
are between … citizens of different States or citizens of a State and citizens of foreign states and
in which the amount in controversy is more than $10,000 [the minimum amount then required].
Appellees [i.e., prevailed in trial court] Jean Paul Mas, a citizen of France, and Judy Mas
were married at her home in Jackson, Mississippi. Prior to their marriage, Mr. and Mrs. Mas
were graduate assistants, pursuing coursework as well as performing teaching duties, for
approximately nine months and one year, respectively, at Louisiana State University in Baton
Rouge, Louisiana. Shortly after their marriage, they returned to Baton Rouge to resume their
duties as graduate assistants at LSU. They remained in Baton Rouge for approximately two more
years, after which they moved to Park Ridge, Illinois. At the time of the trial in this case, it was
their intention to return to Baton Rouge while Mr. Mas finished his studies for the degree of
Doctor of Philosophy. Mr. and Mrs. Mas were undecided as to where they would reside after
that.
Upon their return to Baton Rouge after their marriage, appellees rented an apartment
from appellant Oliver H. Perry, a citizen of Louisiana. This appeal arises from a final judgment
entered on a jury verdict awarding $5,000 to Mr. Mas and $15,000 to Mrs. Mas for damages
incurred by them as a result of the discovery that their bedroom and bathroom contained ‘twoway’ mirrors and that they had been watched through them by the appellant during three of the
first four months of their marriage.
At the close of the appellees’ case at trial, appellant [lost in trial court] made an oral
motion to dismiss for lack of jurisdiction. The motion was denied by the district court [i.e., trial
judge]. Before this [appellate] Court, appellant challenges the final judgment below solely on
jurisdictional grounds, contending that appellees failed to prove diversity of citizenship among
the parties and that the requisite jurisdictional amount is lacking with respect to Mr. Mas. …
It has long been the general rule that complete diversity of parties is required in order that
diversity jurisdiction obtain; that is, no party on one side may be a citizen of the same State as
any party on the other side. This determination of one’s State Citizenship for diversity purposes
is controlled by federal law, not by the law of any State. As is the case in other areas of federal
jurisdiction, the diverse citizenship among adverse parties must be present at the time the
complaint is filed. Jurisdiction is unaffected by subsequent changes in the citizenship of the
parties. The burden of pleading the diverse citizenship is upon the party invoking federal
jurisdiction….
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. For diversity purposes,
citizenship means domicile; mere residence in the State is not sufficient.
A person’s domicile is the place of [1] ‘his true, fixed, and permanent home and principal
establishment, and [2] to which he has the intention of returning whenever he is absent therefrom
....’ A change of domicile may be effected only by a combination of two elements: (a) taking up
residence in a different domicile with (b) the intention to remain there.
It is clear that at the time of her marriage, Mrs. Mas was a domiciliary of the State of
Mississippi. … On the other hand, if Mrs. Mas’s domicile were Louisiana, she would become a
Louisiana citizen for diversity purposes and could not bring suit … against appellant, also a
Louisiana citizen, on the basis of diversity jurisdiction. …
An American woman is not deemed to have lost her United States citizenship solely by
reason of her marriage to an alien. Similarly, we conclude that for diversity purposes a woman
does not have her domicile or State Citizenship [state domicile] changed solely by reason of her
marriage to an alien. [Italics added to this ¶].
Mrs. Mas’s Mississippi domicile was disturbed neither by her year in Louisiana prior to
her marriage nor as a result of the time she and her husband spent at LSU after their marriage,
since for both periods she was a graduate assistant at LSU. Though she testified that after her
marriage she had no intention of returning to her parents’ home in Mississippi, Mrs. Mas did not
effect a change of domicile since she and Mr. Mas were in Louisiana only as students and lacked
the requisite intention to remain there. Until she acquires a new domicile, she remains a
domiciliary, and thus a citizen, of Mississippi.1
Appellant also contends that Mr. Mas’s claim should have been dismissed for failure to
establish the requisite jurisdictional amount for diversity cases of more than $10,000. In their
complaint Mr. and Mrs. Mas alleged that they had each been damaged in the amount of
$100,000. As we have noted, Mr. Mas ultimately recovered [only] $5,000.
It is well settled that the amount in controversy is determined by the amount claimed by
the plaintiff in good faith. Federal jurisdiction is not lost because a judgment of less than the
jurisdictional amount is awarded. That Mr. Mas recovered only $5,000 is, therefore, not
compelling. As the [US] Supreme Court stated:
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 dismissal. The inability of the plaintiff to recover an
amount adequate to give the court jurisdiction does not show his bad faith or oust the
jurisdiction.
...
His good faith in choosing the federal forum is open to challenge not only by resort to the
face of his complaint, but by the facts disclosed at trial, and if from either source it is
clear that his claim never could have amounted to the sum necessary to give jurisdiction
there is no injustice in dismissing the suit.
Having heard the evidence presented at the trial, the district court concluded that the
appellees properly met the requirements of section 1332 with respect to jurisdictional amount.
Upon examination of the record in this case, we are also satisfied that the requisite amount was
in controversy.
1
The original complaint in this case was filed within several days of Mr. and Mrs. Mas’s realization that
they had been watched through the mirrors [in Louisiana], quite some time before they moved to Park Ridge,
Illinois. Because the district court’s jurisdiction is not affected by actions of the parties subsequent to the
commencement of the suit, the testimony concerning Mr. and Mrs. Mas’s moves after that time is not determinative
of the issue of diverse citizenship.…… …….………………………………………………………………………….
Thus the power of the federal district court to entertain the claims of appellees in this case
stands on two separate legs [alternatives] of diversity jurisdiction: a claim by an alien against a
State citizen; and an action between citizens of different States. … Thus, since the district court
had jurisdiction of Mr. Mas’s action, sound judicial administration militates strongly in favor of
federal jurisdiction of Mrs. Mas’s claim.
Affirmed.
Notes and Questions:
1. Throughout this e-book, most citations to authority have been omitted. Bracketed
material, page numbers, and lettered footnotes have been inserted by the prof. Hyperlinks to
materials, e.g., Day Two Gunn’s 1338a patent statute, are provided; however, you need not read
them if the case text otherwise makes sense. Be cautious, however, to read the hyperlinks to—
and assigned codes/rules listed in—each day’s Reading assignment (which will not necessarily
be linked in the related case). ………………
2. Day 1 read Mas for the in-class “How to Prepare for Civ Pro class session. That will
yield a sense of why the case and companion Reading rules are assigned. Be sure to also read the
related Judicial Code sections. There is no video assigned for Day 1. But the Day 2 video will be
discussed, so that you’ll understand why you need to watch it before your Day 2 class. The first
day’s objective is to focus on how to assemble the pieces needed for each day’s Civ Pro
assignment.
3. Day 2 read Mas, with a view toward learning the two elements of Diversity
Jurisdiction. What are they? How do they apply?
4. Mas deals with an individual’s domicile. What about corporate entities? See
hyperlinked 28 USC §1332(c)(1) (not subparts) on the e-book’s “Rules” webpage. How
“principal place of business” is defined by the Supreme Court will be addressed in Video 1.
Other associations? One looks to every member of an unincorporated association, to ensure that
none is domiciled in the same state as an adverse party. For example: “a ‘limited partnership
association’—although possessing ‘some of the characteristics of a corporation’ and deemed a
‘citizen’ by the law creating it—may not be deemed a ‘citizen’ under the jurisdictional rule
established for corporations.” Carden v. Arkoma Associates, 494 U.S. 185, 189 (1990).
5. Aggregation: Individual claims normally cannot be “aggregated.” For example, a
defendant hits a car with a driver and passenger. The driver is not hurt, but her $40,000 car is
totaled. The passenger has $40,000 in claimed personal injury damages. They are free to join
together as plaintiffs in a single lawsuit—in state court. But they cannot aggregate their
respective claims, so as to achieve the $75,000 minimum amount in controversy for federal
diversity purposes. (Same result if one P sues two Ds whose cars hit her.) Compare the Class
Action Fairness Act, 28 USC §1332(d)(6), which requires aggregation.
What about “united” claims? As succinctly articulated in Urbino v. Orkin
Services of California, Inc., 726 F.3d 1118, 1122 (9th Cir. 2013): ......................................
The ... claims of class members can be aggregated to meet the jurisdictional amount
requirement only when they “unite to enforce a single title or right in which they have a common and
undivided interest.” To determine the character of that interest, courts look to “the source of plaintiffs’
claims. If the claims are derived from rights that they hold in group status, then the claims are common and
undivided. If not, the claims are separate and distinct.”
But simply because claims may have “questions of fact and law common to the group” does
not mean they have a common and undivided interest. Only where the claims can strictly “be asserted by
pluralistic entities as such,” or, stated differently, the defendant “owes an obligation to the group of
plaintiffs as a group and not to the individuals severally,” will a common and undivided interest exist.
GUNN v. MINTON
United States Supreme Court
133 S.Ct. 1059 (2013)
Roberts, Chief Justice [unanimous].
Federal courts have exclusive jurisdiction over cases “arising under any Act of Congress
relating to patents.” 28 U.S.C. § 1338(a). The question presented is whether a state law claim
alleging legal malpractice in the handling of a patent case must be brought in federal court.
I
In the early 1990s, respondent Vernon Minton developed a computer program and
telecommunications network designed to facilitate securities trading. In March 1995, he leased
the system—known as the Texas Computer Exchange Network, or TEXCEN—to R.M. Stark &
Co., a securities brokerage. A little over a year later, he applied for a patent for an interactive
securities trading system that was based substantially on TEXCEN. The U.S. Patent and
Trademark Office issued the patent in January 2000.
Patent in hand, Minton filed a patent infringement suit in Federal District Court against
the National Association of Securities Dealers, Inc. (NASD) and the NASDAQ Stock Market,
Inc. He was represented by Jerry Gunn and the other petitioners. NASD and NASDAQ moved
for summary judgment on the ground that Minton’s patent was invalid under the “on sale” bar.
That [Patent Code] provision specifies that an inventor is not entitled to a patent if “the invention
was ... on sale in [the United States], more than one year prior to the date of the application,” and
Minton had leased TEXCEN to Stark more than one year prior to filing his patent application. …
[T]he District Court granted the summary judgment motion and declared Minton’s patent
invalid.
...
Minton appealed to the U.S. Court of Appeals for the Federal [one of a dozen] Circuit[s].
That court affirmed….
Minton, convinced that his attorneys’ failure to raise the experimental-use argument
[exception to the “on sale” bar] … had cost him the lawsuit and led to invalidation of his patent,
brought this malpractice action in Texas state court. His former lawyers defended on the ground
that the lease to Stark was not, in fact, for an experimental use, and that therefore Minton’s
patent infringement claims would have failed even if the experimental-use argument had been
timely raised. The trial court agreed, holding that Minton had put forward “less than a scintilla of
proof” that the lease had been for an experimental purpose. It [Texas state court] accordingly
granted summary judgment to Gunn and the other lawyer [malpractice] defendants.
On appeal [from the Texas court defense judgment], Minton raised a new argument:
Because his legal malpractice claim was based on an alleged error in a patent case, it “aris[es]
under” federal patent law for purposes of 28 U.S.C. § 1338(a). And because, under § 1338(a),
“[n]o State court shall have jurisdiction over any claim for relief arising under any Act of
Congress relating to patents,” the Texas court—where Minton had originally brought his
malpractice claim—lacked subject matter jurisdiction to decide the case. Accordingly, Minton
argued, the trial court’s order should be vacated and the case dismissed, leaving Minton free to
start over in the Federal District Court.
A divided panel of the Court of Appeals of Texas rejected Minton’s argument. … [I]t
held that the federal interests implicated by Minton’s state law claim were not sufficiently
substantial to trigger § 1338 “arising under” jurisdiction. It also held that finding exclusive
federal jurisdiction over state legal malpractice actions would … disturb the balance of federal
and state judicial responsibilities.…
The Supreme Court of Texas reversed, relying heavily on a pair of cases from the U.S.
Court of Appeals for the Federal Circuit. The [Texas Supreme] Court concluded that Minton’s
claim involved “a substantial federal issue” … “because the success of Minton’s malpractice
claim is reliant upon the viability of the experimental use exception as a defense to the on-sale
bar.” Adjudication of Minton’s claim in federal court was consistent with the appropriate balance
between federal and state judicial responsibilities, it held, because “the federal government and
patent litigants have an interest in the uniform application of patent law by courts well-versed in
that subject matter.”
… The dissenting justices would have held that the federal issue was neither substantial
nor disputed, and that maintaining the proper balance of responsibility between state and federal
courts precluded relegating state legal malpractice claims to federal court.2
We granted certiorari.
II
… There is no dispute that the Constitution permits Congress to extend federal court
jurisdiction to a case such as this one; the question is whether Congress has done so.
… Congress has authorized the federal district courts to exercise original jurisdiction in
“all civil actions arising under the Constitution, laws, or treaties of the United States,” 28 U.S.C.
§ 1331,b and, more particularly, over “any civil action arising under any Act of Congress relating
to patents,” § 1338(a). ... For cases falling within the patent-specific arising under jurisdiction of
§ 1338(a), however, Congress has not only provided for federal jurisdiction but also eliminated
state jurisdiction, decreeing that “[n]o State court shall have jurisdiction over any claim for relief
arising under any Act of Congress relating to patents.” § 1338(a). To determine whether
jurisdiction was proper in the Texas courts, therefore, we must determine whether it would have
been proper in a federal district court—whether, that is, the case “aris [es] under any Act of
Congress relating to patents.”
For statutory purposes, a case can “aris[e] under” federal law in two ways. Most directly,
a case arises under federal law when federal law creates the cause of action asserted. Minton’s
original patent infringement suit against NASD and NASDAQ, for example, arose under federal
law in this manner because it was authorized by 35 U.S.C. §§ 271, 281 [governing patents].
But even where a claim finds its origins in state rather than federal law—as Minton’s
legal malpractice claim indisputably does—we have identified a “special and small category” of
cases in which arising under jurisdiction still lies. In outlining the contours of this slim category,
we do not paint on a blank canvas. Unfortunately, the canvas looks like one that Jackson Pollock
got to first.c
In an effort to bring some order to this unruly doctrine several Terms ago, we condensed
our prior cases into the following inquiry: Does the “state-law claim necessarily raise a stated
federal issue, actually disputed and substantial, which a federal forum may entertain without
disturbing any congressionally approved balance of federal and state judicial responsibilities”?
2
If the various judges were so divided, one should not be surprised that a 1L—who is not yet comfortable
with ambiguity—might feel hopelessly confused, because s/he is still focused on articulating the “right answer,” as
opposed to the far more important matter: how the ultimate answer was derived.
b
Expressing the general availability of federal question jurisdiction, as of the 1875 statute enabling the
federal courts to exercise the Constitution’s judicial power over cases “arising under” federal law.
c
An influential American painter and major figure in the abstract expressionist movement—well known
for his unique style of drip painting. See pictures on Wikipedia.
That is, federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily
raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without
disrupting the federal-state balance approved by Congress. Where all four of these requirements
are met, we held, jurisdiction is proper because there is a “serious federal interest in claiming the
advantages thought to be inherent in a federal forum,” which can be vindicated without
disrupting Congress’s intended division of labor between state and federal courts.d
III
… [I]t is clear that Minton’s legal malpractice claim does not arise under federal patent
law.e Indeed, for the reasons we discuss, we are comfortable concluding that state legal
malpractice claims based on underlying patent matters will rarely, if ever, arise under federal
patent law for purposes of § 1338(a). Although such cases may necessarily raise disputed
questions of patent law, those cases are by their nature unlikely to have the sort of significance
for the federal system necessary to establish [federal question] jurisdiction.
A
To begin, we acknowledge that resolution of a federal patent question is “necessary” to
Minton’s case. … To prevail on his legal malpractice claim …, Minton must show that he would
have prevailed in his [suit one] federal patent infringement case if only petitioners had timely
made an experimental-use argument on his behalf. That will necessarily require application of
patent law to the facts of Minton’s case.f
B
The federal [patent validity] issue is also “actually disputed” here—indeed, on the merits,
it is the central point of dispute. Minton argues that the experimental-use exception properly
applied to his lease to Stark, saving his patent from the on-sale bar; [although] petitioners argue
that it did not. This is just the sort of “ ‘dispute ... respecting the ... effect of [federal] law’ ” that
Grable envisioned.
C
Minton’s argument founders on Grable’s next requirement, however, for the federal issue
in this case is not substantial in the relevant sense. In reaching the opposite conclusion, the
Supreme Court of Texas focused on the importance of the issue to the plaintiff's case and to the
parties before it (“because the success of Minton’s malpractice claim is reliant upon the viability
of the experimental use exception as a defense to the on-sale bar, we hold that it is a substantial
federal issue”)…. As our past cases show, however, it is not enough that the federal issue be
significant to the particular parties in the immediate suit; that will always be true when the state
claim “necessarily raise[s]” a disputed federal issue, as Grable separately requires. The
substantiality inquiry under Grable looks instead to the importance of the issue to the federal
system as a whole.
...
Here, the federal issue carries no such significance. Because of the backward-looking
nature of a legal malpractice claim, the question is posed in a merely hypothetical sense: If
Minton’s lawyers had raised a timely experimental-use argument, would the result in the patent
d
Referring to the four requirements (A through D below) collected in Grable & Sons Metal Products, Inc.
v. Darue Engineering & Mfg., 545 U.S. 308 (2005).
e
The claimed clarity is masked by the facts that: (1) the lower courts, in the Gunn’s prior state and federal
decisions, were divided; and (2) that this case was not resolved until decided by the U.S. Supreme Court.
f
Although not dispositive of whether his subsequent malpractice suit “arises under” federal patent law.
infringement proceeding have been different? No matter how the state courts resolve that
hypothetical “[patent] case within a [malpractice] case,” it will not change the real-world result
of the prior federal patent litigation. Minton’s patent will remain invalid.
Nor will allowing state courts to resolve these [patent malpractice] cases undermine “the
development of a uniform body of [patent] law.” Congress ensured such uniformity by vesting
exclusive jurisdiction over actual patent cases in the federal district courts and exclusive
appellate jurisdiction in the Federal Circuit. In resolving the nonhypothetical patent questions
those cases present, the federal courts are of course not bound by state court “case within a case”
patent rulings. In any event, the state court case-within-a-case inquiry asks what would have
happened in the prior federal proceeding if a particular argument had been made. In answering
that question, state courts can be expected to hew closely to the pertinent federal precedents. It is
those precedents, after all, that would have applied had the argument been made. (“State courts
adjudicating civil RICO claims will ... be guided by federal court interpretations of the relevant
federal criminal statutes, just as federal courts sitting in diversity are guided by state court
interpretations of state law”).
...
Nor can we accept the suggestion that the federal courts’ greater familiarity with patent
law means that legal malpractice cases like this one belong in federal court. . . . But the
possibility that a state court will incorrectly resolve a state claim is not, by itself, enough to
trigger the federal courts’ exclusive patent jurisdiction, even if the potential error finds its root in
a misunderstanding of patent law.
There is no doubt that resolution of a patent issue in the context of a state legal
malpractice action can be vitally important to the particular parties in that case. But something
more, demonstrating that the question is significant to the federal system as a whole, is needed.
That is missing here.
D
It follows from the foregoing that Grable’s fourth requirement is also not met. That
requirement is concerned with the appropriate “balance of federal and state judicial
responsibilities.” We have already explained the absence of a substantial federal issue within the
meaning of Grable. The States, on the other hand, have “a special responsibility for maintaining
standards among members of the licensed professions.” Their “interest ... in regulating lawyers is
especially great since lawyers are essential to the primary governmental function of
administering justice, and have historically been officers of the courts.” We have no reason to
suppose that Congress—in establishing exclusive federal jurisdiction over patent cases—meant
to bar from state courts [the ability to adjudicate] state legal malpractice claims simply because
they require resolution of a hypothetical patent issue.
As we recognized a century ago, “[t]he Federal courts have exclusive jurisdiction of all
cases arising under the patent laws, but not of all questions in which a patent may be the subjectmatter of the controversy.” In this case, although the state courts must answer a question of
patent law to resolve Minton’s legal malpractice claim, their answer will have no broader effects.
It will not stand as binding precedent for any future patent claim; it will not even affect the
validity of Minton’s patent. Accordingly, there is no “serious federal interest in claiming the
advantages thought to be inherent in a federal forum.” Section 1338(a) does not deprive the state
courts of subject matter jurisdiction.
The judgment of the Supreme Court of Texas is reversed….
It is so ordered.
Notes and Questions:
1. T. B. Harms Co. v. Eliscu, 339 F.2d 823 (2d. Cir. 1964) is an often-cited federal
question appellate decision. The author began his analysis—in a case permeated with patent
issues—as follows:
A layman would doubtless be surprised to learn that an action wherein the
purported sole owner of a copyright alleged that persons claiming partial ownership had
recorded their claim in the Copyright Office and had warned his licensees against
disregarding their interests was not one ‘arising under any Act of Congress relating to …
copyrights’ over which 28 U.S.C. § 1338 gives the federal courts exclusive jurisdiction.
Yet precedents going back for more than a century teach that lesson and lead us to affirm
… dismissal of the complaint.
Judge Friendly concluded his analysis with the following summation:
Mindful of the hazards of formulation in this treacherous area, we think that an
action ‘arises under’ the Copyright Act if and only if the complaint is for [1] a remedy
expressly granted by the Act, e.g., a suit for infringement or for the statutory royalties for
record reproduction, 17 U.S.C. § 101, [2] or asserts a claim requiring construction of the
Act, … or, [3] at the very least and perhaps more doubtfully, presents a case where a
distinctive policy of the Act requires that federal principles control the disposition of the
claim. The general interest that copyrights, like all other forms of property, should be
enjoyed by their true owner is not enough to meet this last test.
[1] and [2] are comparatively straightforward applications of Federal Question (FQ)
jurisdiction. [3] is ever-murky. You are not expected to remember the Grable factors presented
in Gunn. But they do provide insight into the problem courts face when assessing whether FQ
jurisdiction exists in this third context. One must sometimes resort to the federal courts of appeal
to glean a useful rubric for assessing whether a scenario like Gunn’s malpractice can be
shoehorned into this third option. The Eleventh Circuit’s 2013 MDS v. RAD Source
Technologies opinion, for example, conveniently collates the related analyses of three US
Supreme Court decisions:
the Supreme Court has identified three factors to assist in this inquiry. First, a
pure question of law is more likely to be a substantial federal question. Second, a
question that will control many other cases is more likely to be a substantial federal
question. Third, a question that the government has a strong interest in litigating in a
federal forum is more likely to be a substantial federal question. Third, a question that the
government has a strong interest in litigating in a federal forum is more likely to be a
substantial federal question. 720 F.3d 833, at 842 [authorities omitted].
2. State and federal courts typically have concurrent subject matter jurisdiction (SMJ) to
hear the same claim. In the Diversity Jurisdiction context, Mas will demonstrate that suits
seeking more than $75,000 between diverse parties fall within the concurrent SMJ of both
judicial systems. A Diversity-based federal suit is, after all, one that arises under state (not
federal) law. A Federal Question-based suit is grounded on federal law—the vast majority of
such cases being triggered by P’s claim that D violated a federal statute. In most cases, federal
statutes create an actionable claim, with no expressed limitation on where the case may be filed.
When the enabling statute is silent on this point, the presumption of concurrent state and federal
SMJ authorizes the resolution of a federal claim in state court.
Exclusive SMJ is the exception. To promote uniformity of decision, Congress has
decided to limit the resolution of certain cases to federal courts only. Examples include
bankruptcy, federal antitrust, copyright, patent, and trademark claims. See, e.g., Judicial Code
section 1338(a). State courts do not have the power to hear such claims.
LOUISVILLE & NASHVILLE RAILROAD COMPANY v. MOTTLEY
United States Supreme Court
211 U.S. 149 (1908)
Statement by Mr. Justice Moody:
The appellees (husband and wife), being residents and citizens of Kentucky, brought this
suit … against the appellant, a railroad company and a citizen of the same state … to compel the
specific performance of the following contract:
Louisville, Ky., Oct. 2d, 1871.
… E. L. Mottley and wife, Annie E. Mottley, have this day released company
from all damages or claims for damages for injuries received by them … in consequence
of a collision of trains on the railroad of said company …, [which] hereby agrees to issue
free passes on said railroad … to said E. L. & Annie E. Mottley for the remainder of …
the lives of said Mottley and wife….
Source: Association of American Law Schools Civil Procedure webpage;
reprinted with permission of Professors Aaron Caplan and Tyler Ochoa.
The bill alleged that in September, 1871, plaintiffs, while passengers upon the defendant
railroad, were injured by the defendant’s negligence, and released their respective claims for
damages in consideration of the agreement for transportation during their lives, expressed in the
contract. It is alleged that the contract was performed by the defendant up to January 1, 1907,
when the defendant [unexpectedly] declined to renew the [annual] passes. The bill then alleges
that the refusal to comply with the contract was based solely upon … the act of Congress of June
29, 1906, which forbids the giving of free passes or free transportation. The bill further alleges:
First, that the act of Congress referred to does not prohibit the giving of passes under the
circumstances of this case; and, second, that, if the law is to be construed as prohibiting such
passes, it is in conflict with the 5th Amendment of the Constitution, because it deprives the
plaintiffs of their property without due process of law. The defendant demurred [objected] to the
bill [complaint]. The judge of the circuit court overruled the demurrer, entered a decree for the
[plaintiffs’] relief prayed for, and the defendant appealed directly to this court.
Mr. Justice Moody, after making the foregoing statement, delivered the [unanimous]
opinion of the court: ………………………………………………………………………………
Two questions of law were … brought here by appeal…. They are, first, whether that part
of the act of Congress of June 29, 1906, which forbids the giving of free passes [which thus] …
makes it unlawful to perform a contract for transportation of persons who … before the passage
of the act, had accepted such contract in satisfaction of a valid cause of action against the
railroad; and, second, whether the statute … is in violation of the 5th Amendment of the
Constitution of the United States. We do not deem it necessary, however, to consider either of
these questions, because, in our opinion, the court below was without jurisdiction of the cause.
Neither party has questioned that jurisdiction, but it is the duty of this court to see to it that the
jurisdiction of the … [trial] court, which is defined and limited by statute, is not exceeded. This
duty we have frequently performed of our own motion [i.e., when the defendant has not objected
to the trial court’s jurisdiction].
There was no diversity of citizenship, and it is not and cannot be suggested that there was
any ground of jurisdiction, except that the case was a ‘suit ... arising under the Constitution or
laws [a statute] of the United States.’ … [A] suit arises under the Constitution and laws of the
United States only when the plaintiff’s statement of his own cause of action shows that it is
based upon those laws or that Constitution. It is not enough that the plaintiff alleges some
anticipated defense to his cause of action, and asserts that the defense is invalidated by some
provision of the Constitution of the United States. Although such allegations show that very
likely, in the course of the litigation, a question under the Constitution would arise, they do not
show that the suit, that is, the plaintiff’s original cause of action, arises under the Constitution
[italics added]. In [another case,] [t]he plaintiff then alleged, for the purpose of showing
jurisdiction, … that the defendant would set up in defense certain laws of the United States. The
cause was held to be beyond the jurisdiction of the … [trial] court, the court saying … :
It would be wholly unnecessary and improper, in order to prove complainant’s
cause of action, to go into any matters of defense which the defendants might possibly set
up, and then attempt to reply to such defense, and thus, if possible, to show that a Federal
question might or probably would arise in the course of the trial of the case. To allege
such defense and then make an answer to it before the defendant has the opportunity to
itself plead or prove its own defense is inconsistent with any known rule of pleading, so
far as we are aware, and is improper.
The rule is … that the complainant … shall be confined to a statement of its cause
of action, leaving to the defendant to set up in his answer what his defense is, and ...
imposing upon the defendant the burden of proving such [federal] defense.
Conforming itself to that rule, the complainant would not, in the assertion or proof
of its cause of action, bring up a single Federal question. The presentation of its cause of
action would not show that it was one arising under the Constitution or laws of the United
States.
...
The application of this rule to the case at bar is decisive against the jurisdiction of the …
[trial] court.
It is ordered that the judgment be reversed and the case remitted … with instructions to
dismiss the suit for want of jurisdiction.
Notes & Questions: ....................................................
1. Prior to this case being dismissed, did the defendant object to the trial court’s
jurisdiction? If no, who did, and why?
2. The husband and wife’s complaint alleged a breach of contract, a federal statute, and a
constitutional violation. Why would their complaint not be a case arising under federal law?
3. The 10th Amendment limits federal court subject matter jurisdiction (SMJ). It provides
that the “powers not delegated to the United States [e.g., its federal courts] by the Constitution ...
are reserved to the states....” States thus have the general power to hear and resolve all claims.
Thus, P normally does not have to plead SMJ in her state-court complaint. Federal courts possess
limited SMJ, largely attributable to the above constitutional limit, whereby the federal
government can (at least theoretically) act only pursuant to express constitutional provisions.
4. Judicial Code §1331 also authorizes jurisdiction over cases arising under the U.S.
Constitution. The Mottleys were unsuccessful in doing so. So how does one allege such a case?
This question was not authoritatively resolved until the Supreme Court’s decision in Bivens v.
Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971). There was
then no federal statute available to the P—whose apartment and person were offensively
ransacked. P thus sued for damages, directly under the Fourth Amendment, therein alleging an
unreasonable search and seizure. This decision occurred almost full century after Congress
passed the 1875 statute granting general federal question jurisdiction to the federal courts. Until
then, the vast majority of federal cases were Diversity-based cases—like the one which follows
(Mas). This inadvertently promoted forum shopping between state and federal courts (the theme
of our Day 9 Governing Law class).
MAS v. PERRY
United States Court of Appeals, Fifth Circuit
489 F.2d 1396 (1974) (rehearing and cert. denied)
Ainsworth, Circuit Judge [unanimous].
This case presents questions pertaining to federal diversity jurisdiction under 28 U.S.C. §
1332, which ... provides for original jurisdiction in federal district courts of all civil actions that
are between … citizens of different States or citizens of a State and citizens of foreign states and
in which the amount in controversy is more than $10,000 [the minimum amount then required].
Appellees [i.e., prevailed in trial court] Jean Paul Mas, a citizen of France, and Judy Mas
were married at her home in Jackson, Mississippi. Prior to their marriage, Mr. and Mrs. Mas
were graduate assistants, pursuing coursework as well as performing teaching duties, for
approximately nine months and one year, respectively, at Louisiana State University in Baton
Rouge, Louisiana. Shortly after their marriage, they returned to Baton Rouge to resume their
duties as graduate assistants at LSU. They remained in Baton Rouge for approximately two more
years, after which they moved to Park Ridge, Illinois. At the time of the trial in this case, it was
their intention to return to Baton Rouge while Mr. Mas finished his studies for the degree of
Doctor of Philosophy. Mr. and Mrs. Mas were undecided as to where they would reside after
that.
Upon their return to Baton Rouge after their marriage, appellees rented an apartment
from appellant Oliver H. Perry, a citizen of Louisiana. This appeal arises from a final judgment
entered on a jury verdict awarding $5,000 to Mr. Mas and $15,000 to Mrs. Mas for damages
incurred by them as a result of the discovery that their bedroom and bathroom contained ‘twoway’ mirrors and that they had been watched through them by the appellant during three of the
first four months of their marriage.
At the close of the appellees’ case at trial, appellant [lost in trial court] made an oral
motion to dismiss for lack of jurisdiction. The motion was denied by the district court [i.e., trial
judge]. Before this [appellate] Court, appellant challenges the final judgment below solely on
jurisdictional grounds, contending that appellees failed to prove diversity of citizenship among
the parties and that the requisite jurisdictional amount is lacking with respect to Mr. Mas. …
It has long been the general rule that complete diversity of parties is required in order that
diversity jurisdiction obtain; that is, no party on one side may be a citizen of the same State as
any party on the other side. This determination of one’s State Citizenship for diversity purposes
is controlled by federal law, not by the law of any State. As is the case in other areas of federal
jurisdiction, the diverse citizenship among adverse parties must be present at the time the
complaint is filed. Jurisdiction is unaffected by subsequent changes in the citizenship of the
parties. The burden of pleading the diverse citizenship is upon the party invoking federal
jurisdiction….
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. For diversity purposes,
citizenship means domicile; mere residence in the State is not sufficient.
A person’s domicile is the place of [1] ‘his true, fixed, and permanent home and principal
establishment, and [2] to which he has the intention of returning whenever he is absent therefrom
....’ A change of domicile may be effected only by a combination of two elements: (a) taking up
residence in a different domicile with (b) the intention to remain there.
It is clear that at the time of her marriage, Mrs. Mas was a domiciliary of the State of
Mississippi. … On the other hand, if Mrs. Mas’s domicile were Louisiana, she would become a
Louisiana citizen for diversity purposes and could not bring suit … against appellant, also a
Louisiana citizen, on the basis of diversity jurisdiction. …
An American woman is not deemed to have lost her United States citizenship solely by
reason of her marriage to an alien. Similarly, we conclude that for diversity purposes a woman
does not have her domicile or State Citizenship [state domicile] changed solely by reason of her
marriage to an alien. [Italics added to this ¶].
Mrs. Mas’s Mississippi domicile was disturbed neither by her year in Louisiana prior to
her marriage nor as a result of the time she and her husband spent at LSU after their marriage,
since for both periods she was a graduate assistant at LSU. Though she testified that after her
marriage she had no intention of returning to her parents’ home in Mississippi, Mrs. Mas did not
effect a change of domicile since she and Mr. Mas were in Louisiana only as students and lacked
the requisite intention to remain there. Until she acquires a new domicile, she remains a
domiciliary, and thus a citizen, of Mississippi.3
Appellant also contends that Mr. Mas’s claim should have been dismissed for failure to
establish the requisite jurisdictional amount for diversity cases of more than $10,000. In their
complaint Mr. and Mrs. Mas alleged that they had each been damaged in the amount of
$100,000. As we have noted, Mr. Mas ultimately recovered [only] $5,000.
It is well settled that the amount in controversy is determined by the amount claimed by
the plaintiff in good faith. Federal jurisdiction is not lost because a judgment of less than the
jurisdictional amount is awarded. That Mr. Mas recovered only $5,000 is, therefore, not
compelling. As the [US] Supreme Court stated:
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 dismissal. The inability of the plaintiff to recover an
amount adequate to give the court jurisdiction does not show his bad faith or oust the
jurisdiction.
...
His good faith in choosing the federal forum is open to challenge not only by resort to the
face of his complaint, but by the facts disclosed at trial, and if from either source it is
clear that his claim never could have amounted to the sum necessary to give jurisdiction
there is no injustice in dismissing the suit.
Having heard the evidence presented at the trial, the district court concluded that the
appellees properly met the requirements of section 1332 with respect to jurisdictional amount.
Upon examination of the record in this case, we are also satisfied that the requisite amount was
in controversy.
3
The original complaint in this case was filed within several days of Mr. and Mrs. Mas’s realization that
they had been watched through the mirrors [in Louisiana], quite some time before they moved to Park Ridge,
Illinois. Because the district court’s jurisdiction is not affected by actions of the parties subsequent to the
commencement of the suit, the testimony concerning Mr. and Mrs. Mas’s moves after that time is not determinative
of the issue of diverse citizenship.…… …….………………………………………………………………………….
Thus the power of the federal district court to entertain the claims of appellees in this case
stands on two separate legs [alternatives] of diversity jurisdiction: a claim by an alien against a
State citizen; and an action between citizens of different States. … Thus, since the district court
had jurisdiction of Mr. Mas’s action, sound judicial administration militates strongly in favor of
federal jurisdiction of Mrs. Mas’s claim.
Affirmed.
Notes and Questions:
1. Throughout this e-book, most citations to authority have been omitted. Bracketed
material, page numbers, and lettered footnotes have been inserted by the prof. Hyperlinks to
materials, e.g., Day Two Gunn’s 1338a patent statute, are provided; however, you need not read
them if the case text otherwise makes sense. Be cautious, however, to read the hyperlinks to—
and assigned codes/rules listed in—each day’s Reading assignment (which will not necessarily
be linked in the related case). ………………
2. Day 1 read Mas for the in-class “How to Prepare for Civ Pro class session. That will
yield a sense of why the case and companion Reading rules are assigned. Be sure to also read the
related Judicial Code sections. There is no video assigned for Day 1. But the Day 2 video will be
discussed, so that you’ll understand why you need to watch it before your Day 2 class. The first
day’s objective is to focus on how to assemble the pieces needed for each day’s Civ Pro
assignment.
3. Day 2 read Mas, with a view toward learning the two elements of Diversity
Jurisdiction. What are they? How do they apply?
4. Mas deals with an individual’s domicile. What about corporate entities? See
hyperlinked 28 USC §1332(c)(1) (not subparts) on the e-book’s “Rules” webpage. How
“principal place of business” is defined by the Supreme Court will be addressed in Video 1.
Other associations? One looks to every member of an unincorporated association, to ensure that
none is domiciled in the same state as an adverse party. For example: “a ‘limited partnership
association’—although possessing ‘some of the characteristics of a corporation’ and deemed a
‘citizen’ by the law creating it—may not be deemed a ‘citizen’ under the jurisdictional rule
established for corporations.” Carden v. Arkoma Associates, 494 U.S. 185, 189 (1990).
5. Aggregation: Individual claims normally cannot be “aggregated.” For example, a
defendant hits a car with a driver and passenger. The driver is not hurt, but her $40,000 car is
totaled. The passenger has $40,000 in claimed personal injury damages. They are free to join
together as plaintiffs in a single lawsuit—in state court. But they cannot aggregate their
respective claims, so as to achieve the $75,000 minimum amount in controversy for federal
diversity purposes. (Same result if one P sues two Ds whose cars hit her.) Compare the Class
Action Fairness Act, 28 USC §1332(d)(6), which requires aggregation.
What about “united” claims? As succinctly articulated in Urbino v. Orkin
Services of California, Inc., 726 F.3d 1118, 1122 (9th Cir. 2013): ......................................
The ... claims of class members can be aggregated to meet the jurisdictional amount
requirement only when they “unite to enforce a single title or right in which they have a common and
undivided interest.” To determine the character of that interest, courts look to “the source of plaintiffs’
claims. If the claims are derived from rights that they hold in group status, then the claims are common and
undivided. If not, the claims are separate and distinct.”
But simply because claims may have “questions of fact and law common to the group” does
not mean they have a common and undivided interest. Only where the claims can strictly “be asserted by
pluralistic entities as such,” or, stated differently, the defendant “owes an obligation to the group of
plaintiffs as a group and not to the individuals severally,” will a common and undivided interest exist.
UNITED MINE WORKERS OF AMERICA v. GIBBS
United States Supreme Court
383 U.S. 715 (1966) (superseded by statute)
Mr. Justice Brennan delivered the opinion of the Court [concurring opinion omitted].
Respondent Paul Gibbs was awarded … damages in this action against petitioner United
Mine Workers of America (UMW) for alleged violations of s[ection] 303 of the Labor
Management Relations Act,4 and of the [state] common law of Tennessee. The case grew out of
the rivalry between the United Mine Workers and … [another] Union over representation of
workers in the southern Appalachian coal fields. Tennessee Consolidated Coal Company … laid
off 100 miners of the UMW’s Local 5881 when it closed one of its mines in southern Tennessee
during the spring of 1960. Late that summer, Grundy Company, a wholly owned subsidiary of
Consolidated, hired respondent [Gibbs] as mine superintendent to attempt to open a new mine on
Consolidated’s property….
… [A]rmed members of Local 5881 forcibly prevented the opening of the mine,
threatening respondent and beating an organizer for the rival union. The members of the local
[union] believed Consolidated had promised them the jobs at the new mine; they insisted that if
anyone would do the work, they would. … [T]he members of the local discovered Grundy’s
plan.… There was … a limited picket line, to prevent any further violence, and to see to it that
the strike did not spread to neighboring mines … and no further attempts were made to open the
mine during that period.
UMW workers’ coal mine
Reprint courtesy of the Tennessee State Library and Archives
Union Logo
Official Twitter page
United Mine Workers of America
United Mine Workers @MineWorkers
Section 303 [et al.] … provides: ‘(a) It shall be unlawful … for any labor organization to engage in any
activity or conduct defined as an unfair labor practice…. It shall be an unfair labor practice for a labor organization
or its agents … to induce or encourage any individual … to cease doing business with any other person….’
4
Respondent lost his job as superintendent, and never entered into performance of his
haulage contract. He testified that he soon began to lose other trucking contracts and mine leases
he held in nearby areas. Claiming these effects to be the result of a concerted union plan against
him, he sought recovery not against Local 5881 or its members, but only against petitioner, the
international union. … [J]urisdiction was premised on allegations of secondary boycotts under
s[ection] 303. The state law claim, for which jurisdiction was based upon the doctrine of pendent
jurisdiction, asserted ‘an unlawful conspiracy and an unlawful boycott aimed at him and
(Grundy) to maliciously, wantonly and willfully interfere with his contract of employment and
with his contract of haulage.’
The … jury’s verdict was that the UMW had violated both s[ection] 303 and state law.
Gibbs was awarded … damages. On motion, the trial court set aside the award of damages with
respect to the haulage contract on the ground that damage was unproved. It also held that union
pressure on Grundy to discharge respondent as supervisor would constitute only a primary
dispute with Grundy, as respondent’s employer, and hence was not cognizable as a [union
boycott] claim under s[ection] 303. Interference with the employment relationship was
cognizable as a state claim, however, and a remitted award was sustained on the state law claim.
. . .
A threshold question is whether the District Court properly entertained jurisdiction of the
claim [that was] based on Tennessee law.……………………………………………………..
……………………………………………….. . .
…………………………………………
The question [is] whether the state claim was properly adjudicated in the District Court absent
diversity jurisdiction. The [Supreme] Court held in Hurn v. Oursler that state law claims are
appropriate for federal court determination if they form a separate but parallel ground for relief
also sought in a substantial claim based on federal law. … [W]here the federal question averred
is not plainly wanting in substance, the federal court, even though the federal ground be not
established [by proof at trial], may nevertheless retain and dispose of the case upon the
nonfederal ground.
. . .
[T]he Court found that the weighty policies of judicial economy and fairness to parties … were
in themselves strong counsel for the adoption of a rule which would permit federal courts to
dispose of the state as well as the federal claims.
. . . ………………………………………….
Pendent jurisdiction, in the sense of judicial power, exists whenever there is a claim ‘arising
under (the) Constitution, the Laws of the United States, and Treaties made, or which shall be
made, under their Authority …,’ and the relationship between that claim and the state claim
permits the conclusion that the entire action before the court comprises but one constitutional
‘case.’ The federal claim must have substance sufficient to confer subject matter jurisdiction on
the court. The state and federal claims must derive from a common nucleus of operative fact. But
if, considered without regard to their federal or state character, a plaintiff’s claims are such that
he would ordinarily be expected to try them all in one judicial proceeding, then, assuming
substantiality of the federal issues, there is power in federal courts to hear the whole.13
That power need not be exercised in every case in which it is found to exist. It has
consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s
13
While it is commonplace that the Federal Rules of Civil Procedure do not expand the jurisdiction of
federal courts, they do embody ‘the whole tendency of our decisions … to require a plaintiff to try his … whole case
at one time,’ and to that extent emphasize the basis of pendent jurisdiction.
right. Its justification lies in considerations of judicial economy, convenience and fairness to
litigants; if these are not present a federal court should hesitate to exercise jurisdiction over state
claims…. Needless decisions of state law should be avoided both as a matter of comity and to
promote justice between the parties, by procuring for them a surer-footed reading of applicable
law. Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a
jurisdictional sense, the state claims should be dismissed as well [italics added]. Similarly, if it
appears that the state issues substantially predominate, whether in terms of proof, of the scope of
the issues raised, or of the comprehensiveness of the remedy sought, the state claims may be
dismissed without prejudice and left for resolution to state tribunals. There may, on the other
hand, be situations in which the state claim is so closely tied to questions of federal policy that
the argument for exercise of pendent jurisdiction is particularly strong. ... Finally, there may be
reasons independent of jurisdictional considerations, such as the likelihood of jury confusion in
treating divergent legal theories of relief, that would justify separating state and federal claims
for trial. If so, jurisdiction should ordinarily be refused.
The question of power will ordinarily be resolved on the pleadings. But the issue whether
pendent jurisdiction has been properly assumed is one which remains open throughout the
litigation. Pretrial procedures or even the trial itself may reveal a substantial hegemony of state
law claims, or likelihood of jury confusion, which could not have been anticipated at the
pleading stage. Although it will of course be appropriate to take account in this circumstance of
the already completed course of the litigation, dismissal of the state claim might even then be
merited. For example, it may appear that the plaintiff was well aware of the nature of his proofs
and the relative importance of his claims; recognition of a federal court's wide latitude to decide
ancillary questions of state law does not imply that it must tolerate a litigant's effort to impose
upon it what is in effect only a state law case. Once it appears that a state claim constitutes the
real body of a case, to which the federal claim is only an appendage, the state claim may fairly be
dismissed.
We are not prepared to say that in the present case the District Court exceeded its
discretion in proceeding to judgment on the state claim. … [T]he state and federal claims arose
from the same nucleus of operative fact and reflected alternative remedies. Indeed, the verdict
sheet sent in to the jury authorized only one award of damages, so that recovery could not be
given separately on the federal and state claims.
It is true that the s[ection] 303 claims ultimately failed and that the only recovery allowed
respondent was on the state claim. … Although the District Court dismissed as unproved the
s[ection] 303 claims that petitioner’s secondary [boycott] activities included attempts to induce
coal operators … to cease doing business with respondent, the court submitted the s[ection] 303
claims … to the jury. The jury returned verdicts against petitioner on those s[ection] 303 claims,
and it was only on petitioner’s [post-verdict] motion … that the verdicts on those claims were set
aside. … We thus conclude that although it may be that the District Court might, in its sound
discretion, have dismissed the state claim, the circumstances show no error in refusing to do so.
...
Notes and Questions:………………………………………..
1. The court begins its jurisdictional analysis with reference to an underlying assumption—that
the “relief [is] also sought in a substantial claim based on federal law.” Why “substantial?”
2. What are the Gibbs elements for assessing whether a federal court can hear a state law claim
(absent diversity jurisdiction)?
ALDINGER v. HOWARD
United States Supreme Court
427 U.S. 1 (1976) (superseded by statute)
Mr. Justice Rehnquist delivered the opinion of the Court [3 justices dissented].
This case presents the [question] … whether the doctrine of pendent jurisdiction extends
to confer jurisdiction over a party as to whom no independent basis of federal jurisdiction exists.
In this action, … the Court of Appeals for the Ninth Circuit held that pendent jurisdiction was
not available to adjudicate petitioner’s state-law claims against Spokane County, over which
party federal jurisdiction was otherwise nonexistent. … We granted certiorari to resolve the
conflict on this important question. We affirm.
I
This case arises at the pleading stage, and the allegations in petitioner’s complaint are
straightforward. Petitioner was hired in 1971 by respondent Howard, the Spokane County
treasurer, for clerical work in that office. Two months later Howard informed petitioner by letter
that although her job performance was “excellent,” she would be dismissed, effective two weeks
hence, because she was allegedly “living with (her) boy friend.” …
Petitioner’s action … claimed principally under the Civil Rights Act of 1871, 42 U.S.C.
s[ection] 1983,2 that the discharge violated her substantive constitutional rights…. An injunction
restraining the dismissal and damages for salary loss were sought against Howard, his wife
[essentially Ds 1-2], the named county commissioners [D3], and the county [D4]. Jurisdiction
over the federal claim was asserted under 28 U.S.C. s 1343(3),3 and pendent jurisdiction was
alleged to lie over the “state law claims against the parties.” As to the county, the state-law claim
was said to rest on … vicarious liability arising out of tortious conduct of its officials. The
District Court dismissed the action as to the county on the ground that since it was not suable as
a “person” under s[ection] 1983, there was no independent basis of jurisdiction over the county,
and thus “this court (has no) power to exercise pendent jurisdiction over the claims against
Spokane County.” …
… [As the] Court of Appeals reasoned, [Ms. Aldinger] presented the “weakest rationale”
for extension of Gibbs to pendent parties [italics added]: (1) The state claims are pressed against
a [every] party who would otherwise not be in federal court;4 (2) diversity cases generally
present more attractive opportunities for exercise of pendent-party jurisdiction, since all claims
therein by definition arise from state law; (3) federal courts should be wary of extending courtcreated doctrines of jurisdiction to reach parties who are expressly excluded by Congress from
liability, and hence federal jurisdiction, in the federal statute sought to be applied to the
defendant in the main claim; (4) pendent state-law claims arising in a civil rights context will
“Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or
Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction
thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be
liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”
3
“The district courts shall have original jurisdiction of any civil action authorized by law to be commenced
by any person: ‘(3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or
usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of
Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States…’ ”
4
There is no diversity of citizenship under 28 U.S.C. s[ection] 1332 among the parties here, since all are
citizens of the State of Washington.
2
“almost inevitably” involve the federal court in difficult and unsettled questions of state law,
with the accompanying potential for jury confusion.
II
The question whether “pendent” federal jurisdiction encompasses not merely the
litigation of additional claims between parties with respect to whom there is federal jurisdiction,
but also the joining of additional parties with respect to whom there is no independent basis of
federal jurisdiction, has been much litigated in other federal courts and much discussed by
commentators since this Court’s decision in Gibbs. Gibbs, in turn, is the most recent in a long
line of our cases dealing with the relationship between the judicial power of the United States
and the actual contours of the cases and controversies to which that power is extended by Art.
III.
...
In Gibbs, … a federal-question case, where the federal claim is of sufficient substance,
and the factual relationship between “that claim and the state claim permits the conclusion that
the entire action before the court comprises but one constitutional ‘case,’ ” pendent jurisdiction
extends to the state claim. The Court, in the second aspect of the Gibbs formulation, went on to
enumerate the various factors bearing on a district court’s discretionary decision whether the
power should be exercised in a given parallel-claims case, emphasizing that “pendent jurisdiction
is a doctrine of discretion, not of plaintiff's right.”
These cases … show that in treating litigation where nonfederal questions or claims were
bound up with the federal claim upon which the parties were already in federal court, this Court
has found nothing in Art. III’s grant of judicial power which prevented adjudication of the
nonfederal portions of the parties’ dispute. None of them, however, adverted to the separate
question, involved in the instant case, of whether a nonfederal claim could in turn be the basis for
joining a party over whom no independent federal jurisdiction exists, simply because that claim
could be derived from the “common nucleus of operative fact” giving rise to the dispute between
the parties to the federal claim.
For purposes of addressing the jurisdictional question in this case, however, we think it
quite unnecessary to formulate any general, all-encompassing jurisdictional rule. …
… Congress had said nothing about the scope of the word “Cases” in Art. III [§2] which
would offer guidance on the kind of elusive question … whether and to what extent jurisdiction
extended to a parallel state claim against the existing federal defendant [italics added].
...
The situation with respect to the joining of a new party, however, strikes us as being both
factually and legally different from the situation facing the Court in Gibbs and its predecessors.
From a purely factual point of view, it is one thing to authorize two parties, already present in
federal court by virtue of a case over which the court has jurisdiction, to litigate in addition to
their federal claim a state-law claim over which there is no independent basis of federal
jurisdiction. But it is quite another thing to permit a plaintiff, who has asserted a claim against
one defendant with respect to which there is federal jurisdiction, to join an entirely different
defendant on the basis of a state-law claim over which there is no independent basis of federal
jurisdiction, simply because his claim against the first defendant and his claim against the second
defendant “derive from a common nucleus of operative fact.” True, the same considerations of
judicial economy would be served insofar as plaintiff’s claims “are such that he would ordinarily
be expected to try them all in one judicial proceeding....” But the addition of a completely new
party would run counter to the well-established principle that federal courts, as opposed to state
trial courts of general jurisdiction, are courts of limited jurisdiction marked out by Congress. …
There is also a significant legal difference. In … Gibbs Congress was silent on the extent
to which the defendant, already properly in federal court under a statute, might be called upon to
answer nonfederal questions or claims; the way was thus left open for the Court to fashion its
own rules under the general language of Art. III. But the extension of Gibbs to this kind of
“pendent party” jurisdiction bringing in an additional defendant at the behest of the plaintiff
presents rather different statutory jurisdictional considerations. Petitioner’s contention that she
should be entitled to sue Spokane County as a new … party, and then to try a wholly state-law
claim against the county, all of which would be “pendent” to her federal claim against
respondent county treasurer, must be decided, not in the context of congressional silence or tacit
encouragement, but in quite the opposite context. The question here, which it was not necessary
to address in Gibbs, …is whether by virtue of the statutory grant of subject-matter jurisdiction,
upon which petitioner’s principal claim against the treasurer rests, Congress has addressed itself
to the party as to whom jurisdiction pendent to the principal claim is sought. And it undoubtedly
has done so.
III
… [P]etitioner does not, and indeed could not, contest the fact that as to s[ection] 1983,
counties are excluded from the “person(s)” answerable to the plaintiff “in an action at law (or)
suit in equity” to redress the enumerated deprivations. Petitioner must necessarily argue that in
spite of the language emphasized above Congress left it open for the federal courts to fashion a
jurisdictional doctrine under the general language of Art. III enabling them to circumvent this
exclusion, as long as the civil rights action and the state-law claim arise from a “common
nucleus of operative fact.” … Parties such as counties, whom Congress excluded from liability in
s[ection] 1983, and therefore by reference in the grant of jurisdiction under s[ection] 1343(3),
can argue with a great deal of force that the scope of that “civil action” over which the district
courts have been given statutory jurisdiction should not be broadly read as to bring them back
within that power merely because the facts also give rise to an ordinary civil action against them
under state law. …
Resolution of a claim of pendent-party jurisdiction, therefore, calls for careful attention to
the relevant statutory language. As we have indicated, we think a fair reading of the language
used in s[ection] 1343, together with the scope of s[ection] 1983, requires a holding that the
joinder of a municipal corporation, like the county here, for purposes of asserting a state-law
claim not within federal diversity jurisdiction, is without the statutory jurisdiction of the district
court.12
… [W]e believe that it would be as unwise as it would be unnecessary to lay down any
sweeping pronouncement upon the existence or exercise of such jurisdiction. Two observations
suffice for the disposition of the type of case before us. If the new party sought to be joined is not
otherwise subject to federal jurisdiction, there is a more serious obstacle to the exercise of
pendent jurisdiction that if parties already before the court are required to litigate a state-law
claim. Before it can be concluded that such jurisdiction exists, a federal court must satisfy itself
12
… All that we hold is that where the asserted basis of federal jurisdiction over a municipal corporation is
not diversity of citizenship, but is a claim of jurisdiction pendent to a suit brought against a municipal officer within
s[ection] 1343, the refusal of Congress to authorize suits against municipal corporations under the cognate
provisions of s 1983 is sufficient to defeat the asserted claim of pendent-party jurisdiction. ………………..
not only that Art. III permits it, but that Congress in the statutes conferring jurisdiction has not
expressly or by implication negated its existence.
We conclude that in this case Congress has by implication declined to extend federal
jurisdiction over a party such as Spokane County. The judgment of the Court of Appeals for the
Ninth Circuit is therefore
Affirmed.
Notes and Questions:
1. Both Gibbs and Aldinger address “pendent” subject matter jurisdiction. Why?
2. Both Gibbs and Aldinger satisfy the “common nucleus of operative fact” element of
pendent jurisdiction. So why did the Supreme Court reject pendent jurisdiction in the latter case?
3. In Con Law, you’ll learn that counties have since been deemed “persons,” within the
meaning of federal civil rights law (i.e., they lost their former sovereign immunity in such cases).
Aldinger is still an excellent case, however, to illustrate a P’s attempt to piggyback a non-federal
party, via pendent party jurisdiction, to a viable case against other parties who are proper federal
parties under an applicable federal statute. On a related note, “states” enjoy sovereign immunity
from suit in federal court. See the U.S. Constitution’s Eleventh Amendment. But a P may avoid
that prohibition by suing state officials, rather than the state for which they work. See Ex Parte
Young, 209 U.S. 123 (1908).
OWEN EQUIPMENT & ERECTION CO. V. KROGER
United States Supreme Court
437 U.S. 365 (1978)
Mr. Justice Stewart delivered the opinion of the Court [two justices dissented].
In an action in which federal jurisdiction is based on diversity of citizenship, may the
plaintiff assert a claim against a third-party defendant when there is no independent basis for
federal jurisdiction over that claim? The Court of Appeals for the Eighth Circuit held in this case
that such a claim is within the ancillary jurisdiction of the federal courts. We granted certiorari,
because this decision conflicts with several recent decisions of other Courts of Appeals.
I
On January 18, 1972, James Kroger was electrocuted when the boom of a steel crane next
to which he was walking came too close to a high-tension electric power line. The respondent
(his widow, who is the administratrix of his estate) filed a wrongful-death action in the United
States District Court for the District of Nebraska against the Omaha Public Power District
(OPPD). Her complaint alleged that OPPD’s negligent construction, maintenance, and operation
of the power line had caused Kroger’s death. Federal jurisdiction was based on diversity of
citizenship, since the respondent was a citizen of Iowa and OPPD was a Nebraska corporation.
OPPD then filed a third-party complaint pursuant to Fed.Rule Civ.Proc. 14(a)2 against the
petitioner, Owen Equipment and Erection Co. (Owen), alleging that the crane was owned and
operated by Owen, and that Owen’s negligence had been the proximate cause of Kroger’s death.
OPPD later moved for summary judgment on the respondent’s complaint against it. While this
motion was pending, the respondent was granted leave to file an amended complaint naming
Owen as an additional defendant [in plaintiff’s action]. Thereafter, the District Court granted [the
original D] OPPD’s motion for summary judgment in an unreported opinion. The case thus went
to trial between the respondent [Kroger] and the petitioner [Owen] alone.
The respondent’s amended complaint alleged that Owen was “a Nebraska corporation
with its principal place of business in Nebraska.” Owen’s answer admitted that it was “a
corporation organized and existing under the laws of the State of Nebraska,” and denied every
other allegation of the complaint. On the third day of trial, however, it was disclosed that the
petitioner’s principal place of business was in Iowa, not Nebraska, and that the petitioner and the
respondent were thus both citizens of Iowa. The petitioner then moved to dismiss the complaint
for lack of jurisdiction. The District Court reserved decision on the motion, and the jury
thereafter returned a verdict in favor of the respondent. In an unreported opinion issued after the
trial, the District Court denied the petitioner’s motion to dismiss the complaint.
The judgment was affirmed on appeal. The Court of Appeals held that under this Court’s
decision in Mine Workers v. Gibbs, the District Court had jurisdictional power, in its discretion,
to adjudicate the respondent’s claim against the petitioner because that claim arose from the
“core of ‘operative facts' giving rise to both [respondent's] claim against OPPD and OPPD's
claim against Owen.” It further held that the District Court had properly exercised its discretion
in proceeding to decide the case even after summary judgment had been granted to OPPD,
because the petitioner had concealed its Iowa citizenship from the respondent. …
Rule 14(a) provides in relevant part: “At any time after commencement of the action a defending party, as
a third-party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action who
is or may be liable to him for all or part of the plaintiff’s claim against him. [The original D sues the new D, hoping
to shift all or part of the blame to the new D—should the P prevail against the original D in the trial’s initial phase.]
2
It is undisputed that there was no independent basis of federal jurisdiction over the
respondent’s state-law tort action against the petitioner, since both are citizens of Iowa. And
although Fed.Rule Civ.Proc. 14(a) permits a plaintiff to assert a claim against a third-party
defendant, it does not purport to say whether or not such a claim requires an independent basis of
federal jurisdiction. Indeed, it could not determine that question, since it is axiomatic that the
Federal Rules of Civil Procedure do not create or withdraw federal jurisdiction.
In affirming the District Court’s judgment, the Court of Appeals relied upon the doctrine
of ancillary jurisdiction, whose contours it believed were defined by this Court’s holding in Mine
Workers v. Gibbs. The Gibbs case differed from this one in that it involved pendent jurisdiction,
which concerns the resolution of a plaintiff’s federal- and state-law claims against a single
defendant in one action. By contrast, in this case there was no claim based upon substantive
federal law, but rather [only] state-law tort claims against two different defendants. Nonetheless,
the Court of Appeals was correct in perceiving that Gibbs and this case are two species of the
same generic problem: Under what circumstances may a federal court hear and decide a statelaw claim arising between citizens of the same State? But we believe that the Court of Appeals
failed to understand the scope of the doctrine of the Gibbs case.
...
But even if it be assumed that the District Court in the present case had constitutional power to
decide the respondent’s lawsuit against the petitioner, it does not follow that the decision of the
Court of Appeals was correct. Constitutional power is merely the first hurdle that must be
overcome in determining that a federal court has jurisdiction over a particular controversy. For
the jurisdiction of the federal courts is limited not only by the provisions of Art. III of the
Constitution, but also by Acts of Congress.
[11] [¶] The … cases thus make clear that a finding that federal and nonfederal claims
arise from a “common nucleus of operative fact,” the test of Gibbs, does not end the inquiry into
whether a federal court has power to hear the nonfederal claims along with the federal ones.
Beyond this constitutional minimum, there must be an examination of the posture in which the
nonfederal claim is asserted and of the specific statute that confers jurisdiction over the federal
claim, in order to determine whether “Congress in [that statute] has ... expressly or by
implication negated” the exercise of jurisdiction over the particular nonfederal claim. Aldinger.
III
The relevant statute in this case, 28 U.S.C. § 1332(a)(1), confers upon federal courts
jurisdiction over “civil actions where the matter in controversy ... is between ... citizens of
different States.” This statute and its predecessors have consistently been held to require
complete diversity of citizenship. That is, diversity jurisdiction does not exist unless each
defendant is a citizen of a different State from each plaintiff. Over the years Congress has
repeatedly re-enacted or amended the statute conferring diversity jurisdiction, leaving intact this
rule of complete diversity. Whatever may have been the original purposes of diversity-ofcitizenship jurisdiction, this subsequent history clearly demonstrates a congressional mandate
that diversity jurisdiction is not to be available when any plaintiff is a citizen of the same State as
any defendant.
As used in this opinion, the term “nonfederal claim” means one as to which there is no independent basis
for federal jurisdiction. Conversely, a “federal claim” means one as to which an independent basis for federal
jurisdiction exists. …………………………………………………………………………………………………….
11
[16] [¶] Thus it is clear that the respondent could not originally have brought suit in
federal court naming Owen and OPPD as codefendants, since citizens of Iowa would have been
on both sides of the litigation. Yet the identical lawsuit resulted when she amended her
complaint. Complete diversity was destroyed just as surely as if she had sued Owen initially. In
either situation, in the plain language of the statute, the “matter in controversy” could not be
“between ... citizens of different States.”
. . . …………………………………………….
It is not unreasonable to assume that, in generally requiring complete diversity, Congress
did not intend to confine the jurisdiction of federal courts so inflexibly that they are unable to
protect legal rights or effectively to resolve an entire, logically entwined lawsuit. Those practical
needs are the basis of the doctrine of ancillary jurisdiction. But neither the convenience of
litigants nor considerations of judicial economy can suffice to justify extension of the doctrine of
ancillary jurisdiction to a plaintiff’s cause of action against a citizen of the same State in a
diversity case. Congress has established the basic rule that diversity jurisdiction exists under 28
U.S.C. § 1332 only when there is complete diversity of citizenship. “The policy of the statute
calls for its strict construction.” To allow the requirement of complete diversity to be
circumvented as it was in this case would simply flout the congressional command.21
Accordingly, the judgment of the Court of Appeals is reversed.
It is so ordered.
16
Notably, Congress enacted § 1332 as part of the Judicial Code of 1948, shortly after Rule 14 was
amended in 1946. When the Rule was amended, the Advisory Committee noted that “in any case where the plaintiff
could not have joined the third party originally because of jurisdictional limitations such as lack of diversity of
citizenship, the majority view is that any attempt by the plaintiff to amend his complaint and assert a claim against
the impleaded third party would be unavailing.” The subsequent re-enactment without relevant change of the
diversity statute may thus be seen as evidence of congressional approval of that “majority view.”
21
Our holding is that the District Court lacked power to entertain the respondent’s lawsuit against the
petitioner. Thus, the asserted inequity in the respondent’s alleged concealment of its citizenship is irrelevant. Federal
judicial power does not depend upon “prior action or consent of the parties.”
EXXON MOBIL CORPORATION v. ALLAPATTAH SERVICES
United States Supreme Court
545 U.S. 546 (2005)
Prof’s Note: This case finally answered a question that has long-divided lower federal courts–
not to mention the Supreme Court, in this 5-4, three-opinion case. Gibbs, Aldinger, and Owen are
the initial cases assigned for “Supplemental Jurisdiction Day” (Class 3). Allapattah reviews the
key cases, reviews basic diversity jurisdiction principles, and addresses amount-in-controversy
“aggregation.” I have added [ ], and italics at certain points (without so indicating). …
…… The unbridled discretion federal judges exercised since Gibbs—to dismiss elated state
law claims—was greatly limited by the 1990 codification of supplemental jurisdiction (§1367a).
Allapattah construes §1367 as a whole, while integrating some important joinder principles we
will address focus later in the course.
Majority Opinion: Justice Kennedy delivered the opinion of the Court.
These consolidated cases present the question whether a federal court in a diversity action may
exercise supplemental jurisdiction over additional plaintiffs whose claims do not satisfy the
minimum amount-in-controversy 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. Our
decision turns on the correct interpretation of 28 U.S.C. § 1367. The question has divided the
Courts of Appeals, and we granted certiorari to resolve the conflict.
...
I
In 1991, about 10,000 Exxon dealers filed a class-action suit against the Exxon
Corporation in the United States District Court for the Northern District of Florida. The dealers
alleged an intentional and systematic scheme by Exxon under which they were overcharged for
fuel purchased from Exxon. The plaintiffs invoked the District Court’s § 1332(a) diversity
jurisdiction. After a unanimous jury verdict in favor of the plaintiffs, the District Court certified
the case for interlocutory [appellate] review, asking whether it had properly exercised § 1367
supplemental jurisdiction over the claims of class members who did not meet the jurisdictional
minimum amount in controversy [in excess of $75,000].
Source: <http://everybusinesslisting.com/custom/domain_1/image_files/sitemgr_photo_167.jpg>
Permission: Reprinted with Permission of EveryMerchant
The Court of Appeals for the Eleventh Circuit upheld the District Court’s extension of
supplemental jurisdiction to these class members. …
In the other [consolidated for appeal] case now before us … a 9-year-old girl sued StarKist in a diversity action … seeking damages for unusually severe injuries she received when she
sliced her finger on a tuna can. Her family joined in the suit, seeking damages for emotional
distress and certain medical expenses [totaling <75k]. …
The Court of Appeals for the First Circuit … ruled that the injured girl, but not her family
members, had made [justiciable] allegations of damages in the requisite amount. … The Court of
Appeals then addressed whether, in light of the fact that one plaintiff met the requirements for
original jurisdiction, supplemental jurisdiction over the remaining plaintiffs’ claims was proper
under § 1367. …
II
A
The district courts of the United States ... are “courts of limited jurisdiction. They possess
only that power authorized by Constitution and statute.” … Although the district courts may not
exercise jurisdiction absent a statutory basis, it is well established–in certain classes of cases–
that, once a court has original jurisdiction over some claims in the action, it may exercise
supplemental jurisdiction over additional claims that are part of the same case or controversy.
The leading modern case for this principle is Mine Workers v. Gibbs. In Gibbs, the
plaintiff alleged the defendant’s conduct violated both federal and state law. The District Court,
Gibbs held, had original jurisdiction over the action based on the federal claims. Gibbs
confirmed that the District Court had the additional power (though not the obligation) to exercise
supplemental jurisdiction over related state claims that arose from the same Article III case or
controversy. …
We have not, however, applied Gibbs’ expansive interpretive approach to other aspects of
the jurisdictional statutes. For instance, we have consistently interpreted § 1332 as requiring
complete diversity: In a case with multiple plaintiffs and multiple defendants, the presence in the
action of a single plaintiff from the same State as a single defendant deprives the district court of
original diversity jurisdiction over the entire action [citing Owen Equipment v. Kroeger].
...
Before the [1990] enactment of § 1367, the Court declined in contexts other than the
pendent claim instance to follow Gibbs’ expansive approach to interpretation of the jurisdictional
statutes. The Court took a more restrictive view of the proper interpretation of these statutes in
so-called pendent-party cases involving supplemental jurisdiction over claims involving
additional parties—plaintiffs or defendants—where the district courts would lack original
jurisdiction over claims by each of the parties standing alone. Thus, with respect to plaintiffspecific jurisdictional requirements, the Court held in Clark v. Paul Gray, Inc., (1939), that every
plaintiff must separately satisfy the amount-in-controversy requirement. Though Clark was a
federal-question case, at that time federal-question jurisdiction had an amount-in-controversy
requirement analogous to the amount-in-controversy requirement for diversity cases. “Proper
practice,” Clark held, “requires that where each of several plaintiffs is bound to establish the
jurisdictional amount with respect to his own claim, the suit should be dismissed as to those who
fail to show that the requisite amount is involved.” The Court reaffirmed this rule, in the context
of a class action brought invoking § 1332(a) diversity jurisdiction, in Zahn v. International Paper
Co. (1973). It follows “inescapably” from Clark, the Court held in Zahn, that “any plaintiff
without the jurisdictional amount must be dismissed from the case, even though others allege
jurisdictionally sufficient claims.”
The Court took a similar [restrictive] approach with respect to supplemental jurisdiction
over claims against additional defendants that fall outside the district courts’ original jurisdiction.
In Aldinger v. Howard, the plaintiff brought a 42 U.S.C. § 1983 action against county officials in
district court pursuant to the statutory grant of jurisdiction in 28 U.S.C. § 1343(3). The plaintiff
further alleged the court had supplemental jurisdiction over her related state-law claims against
the county, even though the county was not suable [at that time] under § 1983 and so was not
subject to § 1343(3)’s original jurisdiction. The Court held that supplemental jurisdiction could
not be exercised because Congress, in enacting § 1343(3), had declined (albeit implicitly) to
extend federal jurisdiction over any party who could not be sued under the federal civil rights
statutes. “Before it can be concluded that [supplemental] jurisdiction [over additional parties]
exists,” Aldinger held, “a federal court must satisfy itself not only that Art[icle] III permits it, but
that Congress in the statutes conferring jurisdiction has not expressly or by implication negated
its existence.”
In Finley v. United States, we confronted a similar issue in a different statutory context.
The plaintiff in Finley brought a Federal Tort Claims Act negligence suit against the Federal
Aviation Administration in District Court, which had original jurisdiction under § 1346(b)[1].
The plaintiff tried to add related claims against other defendants, invoking the District Court’s
supplemental jurisdiction over so-called pendent parties. We held that the District Court lacked a
sufficient statutory basis for exercising supplemental jurisdiction over these claims. Relying
primarily on Zahn, Aldinger, and Kroger, we held in Finley that “a grant of jurisdiction over
claims involving particular parties does not itself confer jurisdiction over additional claims by or
against different parties.” ...Finley held that in the context of parties, in contrast to claims, “we
will not assume that the full constitutional power has been congressionally authorized, and will
not read jurisdictional statutes broadly.”
As the jurisdictional statutes existed in 1989..., here is how matters stood: First, the
diversity requirement in § 1332(a) required complete diversity; absent complete diversity, the
district court lacked original jurisdiction over all of the claims in the action [citing Owen].
Second, if the district court had original jurisdiction over at least one claim, the jurisdictional
statutes implicitly authorized supplemental jurisdiction over all other claims between the same
parties arising out of the same Article III case or controversy. Gibbs. Third, even when the
district court had original jurisdiction over one or more claims between particular parties, the
jurisdictional statutes did not authorize supplemental jurisdiction over additional claims
involving other parties. Clark; Zahn, Finley.
B
In Finley [1989] we emphasized that “[w]hatever we say regarding the scope of
jurisdiction conferred by a particular statute can of course be changed by Congress.” In 1990,
Congress accepted the invitation. It passed the Judicial Improvements Act, which enacted §
1367, the provision which controls these [consolidated class action and non-class action] cases.
All parties to this litigation and all courts to consider the question agree that § 1367
overturned the result in Finley. ...In order to determine the scope of supplemental jurisdiction
authorized by § 1367, then, we must examine the statute’s text in light of context, structure, and
related statutory provisions.
Section 1367(a) is a broad grant of supplemental jurisdiction over other claims within the
same case or controversy, as long as the action is one in which the district courts would have
original jurisdiction. The last sentence of § 1367(a) makes it clear that the grant of supplemental
jurisdiction extends to claims involving joinder or intervention of additional parties. The single
question before us, therefore, is whether a diversity case in which the claims of some plaintiffs
satisfy the amount-in-controversy requirement, but the claims of others plaintiffs do not, presents
a “civil action of which the district courts have original jurisdiction.” If the answer is yes, §
1367(a) confers supplemental jurisdiction over all claims, including those that do not
independently satisfy the amount-in-controversy requirement, if the claims are part of the same
Article III case or controversy. If the answer is no, § 1367(a) is inapplicable and, in light of our
holdings in Clark and Zahn, the district court has no statutory basis for exercising supplemental
jurisdiction over the additional claims.
We now conclude the answer must be yes. When the ... complaint contains at least one
claim that satisfies the amount-in-controversy requirement, and there are no other relevant
jurisdictional defects, the district court, beyond all question, has original jurisdiction over that
claim. The presence of other claims in the complaint, over which the district court may lack
original jurisdiction, is of no moment. If the court has original jurisdiction over a single claim in
the complaint, it has original jurisdiction over a “civil action” within the meaning of § 1367(a),
even if the civil action over which it has jurisdiction comprises fewer claims than were included
in the complaint. Once the court determines it has original jurisdiction over the civil action, it can
turn to the question whether it has a constitutional and statutory basis for exercising
supplemental jurisdiction over the other claims in the action.
Section 1367(a) commences with the direction that §§ 1367(b) and (c), or other relevant
statutes, may provide specific exceptions, but otherwise § 1367(a) is a broad jurisdictional
grant,with no distinction drawn between pendent-claim and pendent-party cases. In fact, the last
sentence of § 1367(a) makes clear that the provision grants supplemental jurisdiction over claims
involving joinder or intervention of additional parties. The terms of § 1367 do not acknowledge
any distinction between pendent jurisdiction [Gibbs] and the doctrine of so-called ancillary
jurisdiction [Owen].
...
The specific exceptions to § 1367(a) contained in § 1367(b), moreover, provide
additional support for our conclusion that § 1367(a) confers supplemental jurisdiction over these
claims. Section 1367(b), which applies only to diversity cases, withholds supplemental
jurisdiction over the claims of plaintiffs proposed to be joined as indispensable parties under
Federal Rule of Civil Procedure 19, or who seek to intervene pursuant to Rule 24. Nothing in the
text of § 1367(b), however, withholds supplemental jurisdiction over the claims of plaintiffs
permissively joined under Rule 20 (like the additional plaintiffs in [Starkist]) or certified as
class-action members pursuant to Rule 23 (like the additional plaintiffs in [Allapattah]). The
natural, indeed the necessary, inference is that § 1367 confers supplemental jurisdiction over
claims by Rule 20 [permissive joinder] and Rule 23 [c;ass action] plaintiffs. This inference, at
least with respect to Rule 20 plaintiffs [who join together in a single action], is strengthened by
the fact that § 1367(b) explicitly excludes supplemental jurisdiction over claims against
defendants joined under Rule 20. We cannot accept the view, urged by some of the parties,
commentators, and Courts of Appeals, that a district court lacks original jurisdiction over a civil
action unless the court has original jurisdiction over every claim in the complaint.
...
We also reject the argument ... that while the presence of additional claims over which
the district court lacks jurisdiction does not mean the civil action is outside the purview of §
1367(a), the presence of additional parties does. The basis for this distinction is not altogether
clear .... Section 1367(a) applies by its terms to any civil action of which the district courts have
original jurisdiction, and the last sentence of § 1367(a) expressly contemplates that the court may
have supplemental jurisdiction over additional parties. So it cannot be the case that the presence
of those parties destroys the court’s original jurisdiction, within the meaning of § 367(a), over a
civil action otherwise properly before it. Also, § 1367(b) expressly withholds supplemental
jurisdiction in diversity cases over claims by plaintiffs joined as indispensable parties under Rule
19[(a)(1)].
...
And so we circle back to the original question. When the well-pleaded complaint in
district court includes multiple claims, all part of the same case or controversy, and some, but not
all, of the claims are within the court’s original jurisdiction, does the court have before it “any
civil action of which the district courts have original jurisdiction”? It does. Under § 1367, the
court has original jurisdiction over the civil action comprising the claims for which there is no
jurisdictional defect. No other reading of § 1367 is plausible in light of the text and structure of
the jurisdictional statute. Though the special nature and purpose of the diversity requirement
mean that a single nondiverse party can contaminate every other claim in the lawsuit, the
contamination does not occur with respect to jurisdictional defects that go only to the substantive
importance of individual claims.
It follows from this conclusion that the threshold requirement of § 1367(a) is satisfied in
cases, like those now before us, where some, but not all, of the plaintiffs in a diversity action
allege a sufficient amount in controversy. We hold that § 1367 by its plain text overruled Clark
and Zahn and authorized supplemental jurisdiction over all claims by diverse parties arising out
of the same Article III case or controversy, subject only to enumerated exceptions not applicable
in the cases now before us.
...
Justice Stevens, with whom Justice Breyer joins, dissenting [first of two dissents, totaling
four justices].
[Arguing, essentially: “In diversity cases, the district courts may exercise supplemental
jurisdiction, except when doing so would be inconsistent with the jurisdictional requirements of
the diversity statute.” As Stevens concludes: “Given Justice Ginsburg’s persuasive account of the
statutory text and its jurisprudential backdrop, and given the uncommonly clear legislative
history, I am confident that the majority’s interpretation of § 1367 is mistaken. I respectfully
dissent.”]
Justice Ginsburg, with whom Justice Stevens, Justice O’Connor, and Justice Breyer join,
dissenting.
These cases present the question whether Congress, by enacting 28 U.S.C. § 1367,
overruled this Court’s decisions in Clark and Zahn. Clark held that, when federal-court
jurisdiction is predicated on a specified amount in controversy, each plaintiff joined in the
litigation must independently meet the jurisdictional amount requirement. Zahn confirmed that in
class actions governed by Federal Rule of Civil Procedure 23(b)(3), “[e]ach [class member] . . .
must satisfy the jurisdictional amount, and any [class member] who does not must be dismissed
from the case.”
...
I
A
...
In sum, in federal-question cases before § 1367’s enactment, the Court recognized
pendent-claim jurisdiction, Gibbs, but not pendent-party jurisdiction, Finley. As to ancillary
jurisdiction, the Court adhered to the limitation that in diversity cases, throughout the litigation,
all plaintiffs must remain diverse from all defendants. See Kroger.
...
II
A
. . . But from the start, Congress, as its measures have been construed by this Court, has
limited federal court exercise of diversity jurisdiction in two principal ways. First, unless
Congress specifies otherwise, diversity must be “complete,” i.e., all parties on plaintiffs’ side
must be diverse from all parties on defendants’ side. Second, each plaintiff’s stake must
independently meet the amount-in-controversy specification: “When two or more plaintiffs,
having separate and distinct demands, unite for convenience and economy in a single suit, it is
essential that the demand of each be of the requisite jurisdictional amount.”
... But in multiparty cases, including class actions, we have unyieldingly adhered to the
non-aggregation rule .... See Clark (reaffirming the “familiar rule that when several plaintiffs
assert separate and distinct demands in a single suit, the amount involved in each separate
controversy must be of the requisite amount to be within the jurisdiction of the district court, and
that those amounts cannot be added together to satisfy jurisdictional requirements”); [and]
Snyder v. Harris, 394 U.S. 332 (1969) (abandonment of the non-aggregation rule in class actions
would undercut the congressional “purpose ...to check, to some degree, the rising caseload of the
federal courts”).
...
B
...
While § 1367’s enigmatic text defies flawless interpretation, the precedent-preservative
reading, I am persuaded, better accords with the historical and legal context of Congress’
enactment of the supplemental jurisdiction statute, and the [previously] established limits on
pendent and ancillary jurisdiction. It [precedent-preservative reading] does not attribute to
Congress a jurisdictional enlargement broader than the one to which the legislators [expressly]
adverted, cf. Finley, and it follows the sound counsel that “close questions of [statutory]
construction should be resolved in favor of continuity and against change.”
...
For the reasons stated, I would hold that § 1367 does not overrule Clark and Zahn....
Notes & Questions:
1. In what specific way was Gibbs an expansion of federal SMJ?
2. Congress enacted the supplemental jurisdictional statute for the express purpose of
overruling Finley. What changed? For Finley Diagram, go to Prob_Hypo_Chart webpage, Day 3.
3. What was the narrow issue to be decided by the Allapatta court?
4. Can a plaintiff aggregate unrelated claims to satisfy the minimum amount-incontroversy requirement?
5. What were the related holdings in Clark & Zahn? Did Congress expressly overrule
them when enacting the supplemental jurisdiction statute?
6. How did the majority and the dissenters divide regarding the supplemental jurisdiction
statute’s impact on Clark & Zahn?
7. What happens when a potential non-diverse D surfaces in a federal diversity case? Email exchange between ProSlo & 2006 graduate David Perlata (Aug. 12, 2013):
Graduate:
Facts: Plaintiff has a cause of action against D-1, a diverse defendant. Knowing that D-1 will remove a
state court case to federal court, Plaintiff chooses to forgo state court and files directly in federal court on
the basis of diversity jurisdiction. As the case progresses, a new defendant, D-2, is discovered who is a
non-diverse party. Plaintiff needs this defendant in order to completely adjudicate his claim, as D-1 and
D-2 each bear some fault, and a jury would likely apportion liability and damages between them.
Problem: A motion to amend the complaint to add D-2 means that diversity is destroyed and the Court
loses subject matter jurisdiction. 28 U.S.C. 1447(e) gives a District Court broad discretion to permit this
joinder of a non-diverse defendant and remand the case to state court. However, in the present situation, a
state court claim was never filed, so it would appear there is nothing to remand the case to and the statute
of limitations has already run.
Question: Is Plaintiff out of luck? Is Plaintiff forced to continue litigating in federal court against just
D-1? Does Plaintiff have an argument that the statute of limitations was satisfied for California state court
because he timely filed his action (albeit in federal court)?
Hope: It would be great if we could litigate the case in state court against both D-1 and D-2; that a
complaint could be filed in state court and the statute of limitations would be considered satisfied because
the same action arising out of the same facts was timely filed in federal court.
Fear: However, from what I can see, because there was never a state court case to begin with, there is
no place for the federal case to be remanded, and I’m not sure I see a reason for California state court to
consider the statute of limitations satisfied just because the case was timely filed in federal court.
Professor:
I suspect that 1447e might not bar joinder in your situation. See the last sentence of 1367(a)—re
supplemental juris over additional parties. The US SCt decision in Allapattah, 545 U.S. 546 (2005) [or for
my edited version <http://www.tjsl.edu/slomansonb/FedCivPro4_e-book.html>, click Cases, then scroll to
Allapattah] dealt directly with supp 1367 jurisd being extended to allow parties’ with <75k claims—in
both the class action and individual contexts—to piggy back onto claims where at least one P’s claim
satisfied the amount in contro requirement. 1367 was intended to augment fed SMJ, and also overrule a
prior US SCt case that had barred the joinder of non-federal parties in the fed question context.
While there has not been a US SCt case that has directly answered your question—subsequent
discovery revealing a substantial non-diverse D—there may be 9th (or other) Circuit authority for a trial
judge being able to hold on to this type of case, where P wants to remain in fed ct. Research Allapattah &
Finley (the above overruled fed quest case), first in the 9th Cir.
The counter-argument arises from the (pre-1367 codification of supp juris) relevant US SCt
case, Owen Equipment v. Kroger, 437 U.S. 365 (1978). There, the SCt said that a P could not amend her
complaint, to sue a non-diverse D, after the diverse D exited via summary jmt.
Another detail: Consider the timing factor, associated with the delay of not now dismissing in fed &
maybe having to ultimately start over in state ct. One safety net might be CA’s potential equitable tolling
of the SOL, assuming you first (timely) filed in fed ct. I'm reasonably certain that CA permits equitable
tolling of the state SOL in this scenario.
STANDARD FIRE INSURANCE COMPANY v. KNOWLES
United States Supreme Court
133 S.Ct. 1345 (2013)
Breyer, Associate Justice, delivered the opinion of the Court [unanimous]. ………………
The Class Action Fairness Act of 2005 (CAFA) provides that the federal “district courts
shall have original jurisdiction” over a civil “class action” if, among other things, the “matter in
controversy exceeds the sum or value of $5,000,000.” 28 U.S.C. § 1332(d)(2). The statute adds
that “to determine whether the matter in controversy exceeds the sum or value of $5,000,000,”
the “claims of the individual class members shall be aggregated.” § 1332(d)(6).
The question presented concerns a class-action plaintiff who stipulates, prior to
certification [judicial approval] of the class, that he, and the class he seeks to represent, will not
seek damages that exceed $5 million in total. Does that stipulation remove the case from
CAFA’s scope? In our view, it does not.
I
In April 2011 respondent, Greg Knowles, filed this proposed class action in an Arkansas
state court against petitioner, the Standard Fire Insurance Company. Knowles claimed that, when
the company had made certain homeowner’s insurance loss payments, it had unlawfully failed to
include a general contractor fee. And Knowles sought to certify a class of “hundreds, and
possibly thousands” of similarly harmed Arkansas policyholders. In describing the relief sought,
the complaint says that the “Plaintiff and Class stipulate they will seek to recover total aggregate
damages of less than five million dollars.” An attached affidavit stipulates that Knowles “will not
at any time during this case ... seek damages for the class ... in excess of $5,000,000 in the
aggregate.”
… [T]he company, pointing to CAFA’s jurisdictional provision, removed the case to
Federal District Court. See § 1453 [removal of class actions]. Knowles argued for remand [back
to the state court] on the ground that the [federal] District Court lacked jurisdiction. He claimed
that the “sum or value” of the “amount in controversy” fell beneath the $5 million threshold. On
the basis of evidence presented by the company, the District Court found that that the “sum or
value” of the “amount in controversy” would, in the absence of the stipulation, have … [been]
above the $5 million [CAFA] threshold. Nonetheless, in light of Knowles’ stipulation, the court
concluded that the amount fell beneath the threshold. The court consequently ordered the case
remanded to the state court. ……………………………………………………………………….
...
II
CAFA [also] provides … those “class members” include “persons (named or unnamed)
who fall within the definition of the proposed or certified class.”
As applied here, the … District Court … found that resulting sum would have exceeded
$5 million but for the stipulation. And we must decide whether the stipulation makes a critical
difference.
...
Because his precertification stipulation does not bind anyone but himself, Knowles has
not reduced the value of the putative class members’ claims. For jurisdictional purposes, our
inquiry is limited to examining the case “as of the time it was filed in state court.” At that point,
Knowles lacked the authority to concede the amount-in-controversy issue for the absent class
members. The Federal District Court, therefore, wrongly concluded that Knowles’
precertification stipulation could overcome its finding that the CAFA jurisdictional threshold had
been met. …...………………………………………………………………………………………
...
We do not agree that CAFA forbids the federal court to consider, for purposes of determining the
amount in controversy, the very real possibility that a nonbinding, amount-limiting, stipulation
may not survive the class certification process. This potential outcome [would] … run directly
counter to CAFA’s primary objective: ensuring “Federal court consideration of interstate cases
of national importance.” It would also have the effect of allowing the subdivision of a $100
million action into 21 just-below-$5-million state-court actions simply by including nonbinding
stipulations; such an outcome would squarely conflict with the statute’s objective.
...
Knowles also points out that federal courts permit individual plaintiffs, who are the
masters of their complaints, to avoid removal to federal court, and to obtain a remand to state
court, by stipulating to amounts at issue that fall below the federal jurisdictional requirement
[italics added]. That is so. See St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283,
294, 58 S.Ct. 586, 82 L.Ed. 845 (1938) (“If [a plaintiff] does not desire to try his case in the
federal court he may resort to the expedient of suing for less than the jurisdictional amount, and
though he would be justly entitled to more, the defendant cannot remove”). But the key
characteristic about those stipulations is that they are legally binding on all plaintiffs [because a]
(federal court, as condition for remand, can insist on a “binding affidavit or stipulation that the
plaintiff will [when back in state court] continue to claim less than the jurisdictional amount”
(emphasis added)). That essential feature is missing here, as Knowles cannot yet bind the absent
class.
...
In sum, the stipulation at issue here can tie Knowles’ hands, but it does not resolve the
amount-in-controversy question in light of his inability to bind the rest of the class. For this
reason, we believe the District Court, when following the statute [requiring him] to aggregate the
proposed class members’ claims, should have ignored that stipulation. … [W]e vacate the
judgment below and remand the case for further [federal, not state] proceedings consistent with
this opinion.
It is so ordered.
Notes and Questions:
1. The plaintiffs’ attorney stipulated that the class did not meet the $5,000,000
jurisdictional minimum for this federal question case. Note the difference from the general rules
that: (a) there is no minimum amount for federal question cases; (b) plaintiffs may not aggregate
their individual claims in diversity cases; and (c) non-CAFA removal requires the consent of all
[when multiple] defendants. ………………………………………………………………………
(a) What jurisdictional result did the plaintiffs’ attorney hope to avoid? …………………
(b) What might be some potential reasons (not addressed in the opinion) he may have
harbored, notwithstanding his filing a case seeking relief for “hundreds, and possibly thousands”
of similarly harmed Arkansas policyholders?
2. This CAFA case arises under the federal statute designed to facilitate the removal of
qualified class actions from state to federal court. It ignored the stipulation to damages being less
than the jurisdictional amount (which bound the individual class representative, but not the class
members).
(a) Would this approach apply to cases where an individual, or group, stipulates to
damages being less than $75,000 for each plaintiff?
…………………………………….
(b) Have you previously encountered a scenario whereby some class action (or non-class
action) plaintiffs, but not all, could remain in the case—notwithstanding the general rule that
each claim must be in excess of the diversity statute’s $75,000 jurisdictional minimum?
3. Fraudulent removal blocking: Knowles addresses manipulation of the amount in
controversy element of federal diversity subject matter jurisdiction (and application of a federal
statute—the Class Action Fairness Act), undertaken with a view toward defeating removability
to federal court. P can also seek to defeat removal, before or after filing her complaint, by
choosing whom to sue. She might hope to take advantage of the federal approach, which
construes the removal statutes restrictively, so as to limit removal jurisdiction. Some circuits
apply a “strong presumption” against removability, whereby doubts as to removability are
resolved in favor of remanding the case to state court. Nevertheless, a non-diverse party can be
disregarded for purposes of determining whether original diversity jurisdiction exists. For
example, P might include a patently non-provable (sham) claim against a non-diverse D—in the
original complaint, or just after the D files his removal petition. Then, the federal district judge
may determine that the P’s inclusion of a non-diverse party is a “sham” or is “fraudulent.” The
case would thus remain removable/not subject to remand to state court. The authorities for this
proposition are conveniently collated in Rader v. Sun Life Assurance Co., ___ F.Supp.2d ___
2013 WL 1748240 (N.D. Cal.).
4. “Gaming the system” removal: The courts disagree about the following scenario,
whereby defendants may remove—within the letter of the statute, but arguably not within its
spirit. As the federal removal statute provides: “A civil action otherwise removable solely on the
basis of ... section 1332(a) ... may not be removed if any of the parties in interest properly joined
and served as defendants is a citizen of the State in which such action is brought” [italics added].
28 USC §1441(b)(2). Assume that P has named and served the non-resident D, but not the named
resident co-D. Assuming there is evidence that the P is diligently trying to serve the resident D
(i.e., not a fraudulent joinder to defeat removal), some courts allow removal, per the plain
meaning of the statute’s “and served” language. At the time of service, no there is no “served”
resident D. Other courts, given the policy behind the removal statute, do not permit this
premature removal. Sophisticated Ds game the system by electronically monitoring state court
dockets—so that as soon as a case is filed, they can remove to federal court, because no resident
D has yet been served.
5. Unlike federal court, most states authorize a P to also name fictitious “Doe”
defendants. When a case is removed from those states to federal court, the (state) pleading thus
includes potential Ds who are domiciled in the same state as P. Federal judges might thus
consider remanding such cases back to state court, for a lack of diversity jurisdiction. Does any
statute assigned for your next class address how a federal judge should proceed in this
circumstance?
6. Can a plaintiff remove a case to federal court? In Benitez v. Williams, ___ Cal.Rptr.3d
___ (Aug. 30, 2013), P sued D under federal copyright law and related state law claims. The
California state court judge—given the exclusive federal SMJ over copyright claims—ordered
the P to “remove” the case to federal court. P did not do so. The judge thus dismissed the entire
case. The California Court of Appeal reversed. Its reasoning was rooted in: “two erroneous
assumptions. The first was that [plaintiff] Benitez could remove the case to federal court. ... [¶
And as t]he court [wrongly] concluded, plaintiff was required to litigate his entire lawsuit,
including his state law claims, in federal court. This was error.” The state court judge was
apparently unaware of the US Supreme Court’s 1941 decision in Shamrock v. Sheets, tracing
Congress’s historical limitations on removal—and its specific “omission from the earlier
[removal] act of the phrase ‘either party,’ and the substitution for it of the phrase authorizing
removal by the ‘defendant or defendants’ [only].”
PENNOYER v. NEFF
United States Supreme Court
95 U.S. 714 (1877)
Prof’s note: While no easy read, this case is an essential predicate for understanding the
nature of personal jurisdiction, and how it evolved through the remaining cases in today’s
assignment. As with many cases, you have to work backwards, from the Supreme Court’s take
through the trial and/or intermediate appellate court decisions. Your case diagrams should also
include any earlier cases (e.g., as in Pennoyer), to unravel the path the case took through the
various state and federal courts through which it travelled, while en route to the U.S. Supreme
Court. Finally, never assume who is plaintiff or defendant, based on which side of the “v.” you
find the parties—not that a named defendant did something wrong (e.g., Mr. Pennoyer).
Mr. Justice Field delivered the [8-1] opinion of the court.
This is an action to recover the possession of a tract of land, of the alleged value of
$15,000, situated in the State of Oregon. The plaintiff [Neff] asserts title to the premises by a
patent of the United States issued to him in 1866, under the act of Congress of Sept. 27, 1850,
usually known as the Donation Law of Oregon. The defendant [Pennoyer] claims to have
acquired the premises under a sheriff’s deed, made upon a sale of the property on execution
issued upon a judgment recovered against the plaintiff in one of the … [Oregon] courts. The case
turns upon the validity of this [prior] judgment.
It appears from the record that the judgment was rendered in February, 1866, in favor of
[Neff’s former attorney] J. H. Mitchell, for less than $300, including costs, in an action brought
by him upon a demand for services as an attorney; that, at the time the [prior] action was
commenced and the judgment rendered, the defendant therein, the plaintiff here, was a nonresident of the State[,] that he was not personally served with process, and did not appear therein;
and that the judgment was entered upon his default in not answering the [Mitchell] complaint,
upon a constructive service of summons by publication.
John Mitchell (S1 plaintiff) and Sylvester Pennoyer (purchased Neff’s property)
............ Source: Association of American Law Schools webpage; first photograph reprinted with permission of
Professor Aaron H. Caplan;.second photograph reprinted with permission of Professor Ira S. Nathenson.
.............
The Code of Oregon provides for such service when an action is brought against a nonresident and absent defendant, who has property within the State. It also provides, where the
action is for the recovery of money … damages, for the attachment of the property of the nonresident. And it also declares that no natural person is subject to the jurisdiction of a court of the
State, ‘unless he appear in the court, or be found within the State, or be a resident thereof, or
have property therein; and, in the last case, only to the extent of such property at the time the
jurisdiction attached.’ Construing this latter provision to mean, that, in an action for money …
damages where a defendant does not appear in the court, and is not found within the State, and is
not a resident thereof, but has property therein, the jurisdiction of the court extends only over
such property, the [statutory] declaration expresses a principle of general, if not universal, law.
The authority of every tribunal is necessarily restricted by the territorial limits of the State in
which it is established. Any attempt to exercise authority beyond those limits would be deemed
in every other forum … an illegitimate assumption of power, and be resisted as mere abuse. In
the [prior] case against the plaintiff, the property here in controversy sold under the judgment
rendered [which] was not [previously] attached, nor in any way brought under the jurisdiction of
the court. Its first connection with the case was caused by a [post-judgment] levy of the
execution. It was not, therefore, disposed of pursuant to any adjudication, but only in
enforcement of a personal judgment, having no relation to the property, rendered against a nonresident without service of process upon him in the action, or his appearance therein. The court
below did not consider that an attachment of the property was essential to its jurisdiction or to
the validity of the sale. ...........................................................................................................
...
But it was also contended in that court, and is insisted upon here, that the judgment in the State
court against the plaintiff was void for want of personal service of process on him, or of his
appearance in the action in which it was rendered and that the premises in controversy could not
be subjected to the payment of the demand of a resident creditor except by a proceeding in rem;
that is, by a direct proceeding against the [defendant’s] property [as if it were the defendant] for
that purpose. … If these positions are sound, … [it] would seem to follow from two wellestablished principles of public law respecting the jurisdiction of an independent State over
persons and property. The several States of the Union … possess and exercise the authority of
independent States, and the principles of public law to which we have referred are applicable to
them. One of these principles is, that every State possesses exclusive jurisdiction and sovereignty
over persons and property within its territory. As a consequence, every State has the power to
determine for itself … regulate the manner and conditions upon which property situated within
such territory, both personal and real, may be acquired, enjoyed, and transferred. The other
principle of public law referred to follows from the one mentioned; that is, that no State can
exercise direct jurisdiction and authority over persons or property without its territory. The
several States are of equal dignity and authority, and the independence of one implies the
exclusion of power from all others. And so it is laid down by jurists, as an elementary principle,
that the laws of one State have no operation outside of its territory, except so far as is allowed by
comity; and that no tribunal established by it can extend its process beyond that territory so as to
subject either persons or property to its decisions. ‘Any exertion of authority of this sort beyond
this limit’ … ‘is a mere nullity, and incapable of binding such persons or property in any other
tribunals.’
But … an attempt to give ex-territorial operation to its laws, or to enforce an ex-territorial
jurisdiction by its tribunals, would be deemed an encroachment upon the independence of the
State in which the [non-resident] persons are domiciled or the property is situated.
...
So the State, through its tribunals, may subject property situated within its limits owned
by non-residents to the payment of the demand of its own citizens against them; and the exercise
of this jurisdiction in no respect infringes upon the sovereignty of the State where the [nonresident] owners are domiciled. Every State owes protection to its own citizens; and, when nonresidents deal with them, it is a legitimate and just exercise of authority to hold and appropriate
any property owned by such non-residents to satisfy the claims of its citizens. It is in virtue of the
State’s jurisdiction over the property of the non-resident situated within its limits that its
tribunals can inquire into that non-resident’s obligations to its own citizens, and the inquiry can
then be carried only to the extent necessary to control the disposition of the property. If the nonresident have no property in the State, there is nothing upon which the tribunals can adjudicate.
...
If, without personal service, judgments in personam, obtained ex parte against non-residents and
absent parties, upon mere publication of process, which, in the great majority of cases[ ] would
never be seen by the parties interested, could be upheld and enforced, they would be the constant
instruments of fraud and oppression. Judgments for all sorts of claims upon contracts and for
torts, real or pretended, would be thus obtained, under which property would be seized, when the
evidence of the transactions upon which they were founded, if they ever had any existence, had
perished.
[Prof’s note: The initial portion of this next paragraph is not critical to an understanding
in personam jurisdiction. But it does lay the foundation for the other type of territorial
jurisdiction you will soon study—jurisdiction over defendant’s property, aka in rem jurisdiction.
That category of jurisdiction is often invoked when plaintiff cannot find and serve the defendant
with the summons and complaint (Day 7 materials).] Substituted service by publication [in a
local newspaper where the property is located] … may be sufficient to inform parties of the
object of proceedings taken where property is once brought under the control of the court by
[pre-judgment] seizure or some equivalent act. The law assumes that property is always in the
possession of its owner, in person or by agent; and it proceeds upon the theory that its seizure
will inform him, not only that it is taken into the custody of the court…. But where the entire
object of the action is to determine the personal rights and obligations of the defendants, that is,
where the suit is merely in personam, constructive service in this form upon a non-resident is
ineffectual for any purpose. Process from the tribunals of one State cannot run into another State,
and summon parties there domiciled to leave its territory and respond to proceedings against
them. Publication of process or notice within the State where the tribunal sits cannot create any
greater obligation upon the non-resident to appear. Process sent to him out of the State, and
process published within it, are equally unavailing in proceedings to establish his personal
liability.
The [state] court [in a comparable Iowa case] said:
These suits were not a proceeding in rem against the land, but were in personam
against the owners of it. … No person is required to answer in a suit on whom process has not
been served, or whose property has not been attached [prior to judgment]. In this case, there
was no personal notice, nor an attachment or other proceeding against the land, until after the
judgments [italics added]. The judgments, therefore, are nullities, and did not authorize the
executions on which the land was sold [to Pennoyer].
...
Since the adoption of the Fourteenth Amendment [Due Process] to the Federal
Constitution, the validity of such judgments may be directly questioned, and their enforcement in
the State resisted, on the ground that proceedings in a court of justice to deter mine the personal
rights and obligations of parties over whom that court has no jurisdiction do not constitute due
process of law. … To give such proceedings any validity, … and if that involves merely a
determination of the personal liability of the defendant, he must be brought within its jurisdiction
by service of process within the State, or his voluntary appearance.
...
It follows from the views expressed that the [so-called] personal judgment recovered in
the State court of Oregon against the plaintiff herein, then a non-resident of the State, was
without any validity, and did not authorize a sale of the property in controversy.
...
Mr. Justice Hunt dissenting.
...
The precise case is this: A statute of Oregon authorizes suits to be commenced by the
service of a summons. In the case of a non-resident of the State, it authorizes the service of the
summons to be made by publication for not less than six weeks, in a newspaper published in the
county where the action is commenced. A copy of the summons must also be sent by mail,
directed to the defendant at his place of residence, unless it be shown that the residence is not
known and cannot be ascertained. It authorizes a judgment and execution to be obtained in such
proceeding. Judgment in a suit commenced by one Mitchell …, where the summons was thus
served, was obtained against Neff, the present plaintiff; and the land in question … was bought
by the defendant Pennoyer, at a sale upon the judgment in such suit. This court now holds, that,
by reason of the absence of a personal service of the summons on the defendant, the Circuit
Court of Oregon had no jurisdiction, its judgment could not authorize the sale of land in said
county, and, as a necessary result, a purchaser of land under it obtained no title; that, as to the
former owner, it is a case of depriving a person of his property without due process of law.
In my opinion, this decision is at variance with the long-established practice under the
statutes of the States of this Union, is unsound in principle, and, I fear, may be disastrous in its
effects. It tends to produce confusion in titles which have been obtained under similar statutes in
existence for nearly a century; it invites litigation and strife, and over throws a well-settled rule
of property.
...
To say that a sovereign State has the power to ordain that the property of non-residents
within its territory may be subjected to the payment of debts due to its citizens, if the property is
levied upon at the commencement of a suit, but that it has not such power if the property is levied
upon at the end of the suit, is a refinement and a depreciation of a great general principle that, in
my judgment, cannot be sustained [italics added].
...
Without going into a wearisome detail of the statutes of the various States, it is safe to say
that nearly every State in the Union provides a process by which the lands and other property of
a non-resident debtor may be subjected to the payment of his debts, through a judgment or
decree against the owner, obtained upon a substituted service of the summons or writ
commencing the action.
...
All these statutes are now adjudged to be unconstitutional and void. The titles obtained
under them are not of the value of the paper on which they are recorded, except where a
preliminary [pre-judgment] attachment was issued.
...
The objection now made, that suits commenced by substituted service, as by publication,
and judgments obtained without actual notice to the debtor, are in violation of that constitutional
provision that no man shall be deprived of his property ‘without due process of law,’ has often
been presented.
...
[But t]hat a State can subject land within its limits belonging to non-resident owners to
debts due to its own citizens as it can legislate upon all other local matters; that it can prescribe
the mode and process by which it is to be reached,—seems to me very plain.
I am not willing to declare that a sovereign State cannot subject the land within its limits
to the payment of debts due to its citizens, or that the power to do so depends upon the fact
whether its statute shall authorize the property to be levied upon at the commencement of the suit
or at its termination. This is a matter of detail, and I am of opinion, that if reasonable notice be
given, with an opportunity to defend when appearance is made, the question of power will be
fully satisfied.
Notes and Questions: ……………………………………..
1. Neff acquired valid title to the property in 1866. Mitchell’s judgment against, and sale
of, Neff’s land occurred in 1866. The 14th Amendment became effective in 1868. The Supreme
Court’s 1877 judgment effectively decided that the pre-14th Amendment sale—then permissible
under state law—violated a constitutional amendment that was adopted almost a decade later
than the sale!
2. In any event, as the Supreme Court was applying the federal constitution to a judicial
proceeding, its decision thus bound all state and federal courts throughout the country. Just what
did the Court require in 1877 for valid in personam jurisdiction in future cases?
3. Per Justice Hunt’s dissent, the rule announced by the majority: “is at variance with the
long-established practice … [which he] fear[s], may be disastrous in its effects.” Is this a sound
rationale for retaining the long established practice, rather than adopting the majority’s new rule?
Consider his related concern: all the state “statutes are now adjudged to be unconstitutional and
void. The titles obtained under them are not of the value of the paper on which they are
recorded….” While many statutes—upon which prior in personam judgments were based are
now unconstitutional—why would prior final judgments no longer be final? (You will/did
presumably study this stare decisis concept in your Legal Writing course.)
HESS v. PAWLOSKI
United States Supreme Court
274 U.S. 352 (1927)
Mr. Justice Butler delivered the [unanimous] opinion of the Court.
This action was brought by defendant in error [plaintiff below] to recover damages for
personal injuries. The declaration alleged that plaintiff in error [defendant below] negligently and
wantonly drove a motor vehicle on a public highway in Massachusetts, and that by reason
thereof the vehicle struck and injured defendant in error. Plaintiff in error is a resident of
Pennsylvania. No personal service was made on him, and no property belonging to him was
attached. The service of process was made in compliance with … [the] Laws of Massachusetts,
… the material parts of which follow:
The acceptance by a nonresident of the rights and privileges conferred by … the
operation by a nonresident of a motor vehicle on a public way in the commonwealth … shall
be deemed equivalent to an appointment by such nonresident of the [Massachusetts] registrar
… to be his true and lawful attorney upon whom may be served all lawful processes in any
action or proceeding against him, growing out of any accident or collision in which said
nonresident may be involved while operating a motor vehicle …, and said … operation shall
be a signification of his agreement that any such process against him which is so served shall
be of the same legal force and validity as if served on him personally. Service of such process
shall be made by leaving a copy of the process … in the hands of the registrar, or in his office,
and such service shall be sufficient service upon the said nonresident: Provided, that notice …
[be] forthwith sent by registered mail by the plaintiff to the defendant, and the defendant’s
return receipt and the plaintiff’s affidavit of compliance herewith are appended to the writ….
Cal. Vehicle Code § 17454. Service of process [current—note the similarity of
today’s California version to the 1920s Massachusetts version]:.............................
Service of process shall be made by leaving one copy of the summons and
complaint in the hands of the director or in his office at Sacramento or by mailing
either by certified or registered mail, addressee only, return receipt requested, the
copy of the summons and complaint to the office of the director in Sacramento.
Plaintiff in error [original defendant] appeared specially for the purpose of contesting
Service shall be effective as of the day the return receipt is received from the
jurisdiction….
The question is whether the Massachusetts enactment contravenes the due process clause
director’s office.
A fee of two dollars ($2) for each nonresident to be served shall
of the Fourteenth
Amendment.
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actual
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upon
him or upon some one
authorized to accept service for him. A personal judgment rendered against a nonresident, who
has neither been served with process nor appeared in the suit, is without validity. The mere
transaction of business in a state by nonresident natural persons does not imply consent to be
bound by the process of its courts. The power of a state to exclude foreign corporations, although
not absolute, but qualified, is the ground on which such an implication is supported as to them. ...
Motor vehicles are dangerous machines, and, even when skillfully and carefully operated,
their use is attended by serious dangers to persons and property. In the public interest the state
may make and enforce regulations reasonable calculated to promote care on the part of all,
residents and nonresidents alike, who use its highways. The measure in question operates to
require a nonresident to answer for his conduct in the state where arise causes of action alleged
against him, as well as to provide for a claimant a convenient method by which he may sue to
enforce his rights. Under the statute the implied consent is limited to proceedings growing out of
accidents or collisions on a highway in which the nonresident may be involved. It is [further]
required that he shall actually receive and receipt for notice of the service and a copy of the
process. And it contemplates such continuances as may be found necessary to give reasonable
time and opportunity for defense. It makes no hostile discrimination against nonresidents, but
tends to put them on the same footing as residents. … The state’s power to regulate the use of its
highways extends to their use by nonresidents as well as by residents. And, in advance of the
operation of a motor vehicle on its highway by a nonresident, the state may require him to
appoint one of its officials as his agent on whom process may be served in proceedings growing
out of such use. That case [citation omitted] recognized power of the state to exclude a
nonresident until the formal appointment is made. And, having the power so to exclude, the state
may declare that the use of the highway by the nonresident is the equivalent of the appointment
of the registrar as agent on whom process may be served. The difference between the formal and
implied appointment is not substantial, so far as concerns the application of the due process
clause of the Fourteenth Amendment.
Judgment affirmed.
Notes and Questions:……………………………..……….
1. The Court says: “The mere transaction of business in a state by nonresident natural
persons does not imply consent to be bound by the process of its courts.” Is the mere driving of a
car any different for the same purpose of assessing personal jurisdiction?
2. When you drive across a state line—if you know it—is it fair that you have thus
consented to appointment of that state’s designated officer to be your agent for service of
process?
3. Pennoyer required service on the defendant in the forum to establish in personam
jurisdiction. Does Hess overrule Pennoyer?
INTERNATIONAL SHOE CO. v. STATE OF WASHINGTON
United States Supreme Court
326 U.S. 310 (1945)
Mr. Chief Justice Stone delivered the opinion of the Court [8-0, which includes a
concurring opinion].
The questions for decision are (1) whether, within the limitations of the due process
clause of the Fourteenth Amendment, appellant, a Delaware corporation, has by its activities in
the State of Washington rendered itself amenable to proceedings in the courts of that state to
recover unpaid contributions to the state unemployment compensation fund exacted by state
statutes … and (2) whether the state can exact those contributions consistently with the due
process clause of the Fourteenth Amendment.
The statutes in question set up a comprehensive scheme of unemployment compensation,
the costs of which are defrayed by contributions required to be made by employers to a state
unemployment compensation fund. The contributions are a specified percentage of the wages
payable annually by each employer for his employees’ services in the state. …
In this case notice of assessment for the years in question was personally served upon a
[local] sales solicitor employed by appellant in the State of Washington, and a copy of the notice
was mailed by registered mail to appellant at its address in St. Louis, Missouri. Appellant
appeared specially before the office of unemployment and moved to set aside the order and
notice of assessment on the ground that the service upon appellant’s salesman was not proper
service upon appellant; that appellant was not a corporation of the State of Washington and was
not doing business within the state; that it had no agent within the state upon whom service could
be made; and that appellant is not an employer and does not furnish employment within the
meaning of the [unemployment compensation] statute.
International Shoe Company’s St. Louis, Missouri plant, circa 1950
<https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcTU0832GzytFifNxxIuGGwsOTpXJLFOBFGg8lKLw9QsxCZVFAW>
Reprinted with permission of TenFooters Blog, Japan
… Appellant in each of these [Washington] courts assailed the statute as applied, as a
violation of the due process clause of the Fourteenth Amendment. …
The facts as found by the appeal tribunal and accepted by the state Superior Court and
Supreme Court, are not in dispute. Appellant is a Delaware corporation, having its principal
place of business in St. Louis, Missouri, and is engaged in the manufacture and sale of shoes and
other footwear. It maintains places of business in several states, other than Washington, at which
its manufacturing is carried on and from which its merchandise is distributed interstate through
several sales units or branches located outside the State of Washington.
Appellant has no office in Washington and makes no contracts either for sale or purchase
of merchandise there. It maintains no stock of merchandise in that state…. During the years from
1937 to 1940, now in question, appellant employed eleven to thirteen salesmen under direct
supervision and control of sales managers located in St. Louis. These salesmen resided in
Washington; their principal activities were confined to that state; and they were compensated by
commissions based upon the amount of their sales. The commissions for each year totaled more
than $31,000. Appellant supplies its salesmen with a line of samples, each consisting of one shoe
of a pair, which they display to prospective purchasers. On occasion they [salesmen] rent
permanent sample rooms, for exhibiting samples, in business buildings, or rent rooms in hotels
or business buildings temporarily for that purpose. The cost of such rentals is reimbursed by
appellant.
The authority of the salesmen is limited to exhibiting their samples and soliciting orders
from prospective buyers, at prices and on terms fixed by appellant. The salesmen transmit the
orders to appellant’s office in St. Louis for acceptance or rejection, and when accepted the
merchandise for filling the orders is shipped f.o.b. from points outside Washington to the
purchasers within the state. All the merchandise shipped into Washington is invoiced at the place
of shipment from which collections are made. No salesman has authority to enter into contracts
or to make collections.
The Supreme Court of Washington was of opinion that the regular and systematic
solicitation of orders in the state by appellant’s salesmen, resulting in a continuous flow of
appellant’s product into the state, was sufficient to constitute doing business in the state so as to
make appellant amenable to suit in its courts. But it was also of opinion that there were sufficient
additional activities shown to bring the case within the rule frequently stated, that solicitation
within a state by the agents of a foreign corporation plus some additional activities there are
sufficient to render the corporation amenable to suit brought in the courts of the state to enforce
an obligation arising out of its activities there. The court found such additional activities in the
salesmen’s display of samples sometimes in permanent display rooms, and the salesmen’s
residence within the state, continued over a period of years, all resulting in a substantial volume
of merchandise regularly shipped by appellant to purchasers within the state. ……………….
...
Appellant also insists that its activities within the state were not sufficient to manifest its
‘presence’ there and that in its absence the state courts were without jurisdiction, that
consequently it was a denial of due process for the state to subject appellant to suit. It refers to
those cases in which it was said that the mere solicitation of orders for the purchase of goods
within a state, to be accepted without the state and filled by shipment of the purchased goods
interstate, does not render the corporation seller amenable to suit within the state. And appellant
further argues that since it was not present within the state, it is a denial of due process to subject
it to taxation or other money exaction. It thus denies the power of the state to lay the tax or to
subject appellant to a suit for its collection.
Historically the jurisdiction of courts to render judgment in personam is grounded on
their de facto power over the defendant’s person. Hence his presence within the territorial
jurisdiction of court was prerequisite to its rendition of a judgment personally binding him.
Pennoyer v. Neff. But … due process requires only that in order to subject a defendant to a
judgment in personam, 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.’
… To say that the corporation is so far ‘present’ there as to satisfy due process
requirements, for purposes of taxation or the maintenance of suits against it in the courts of the
state, is to beg the question to be decided. For the terms ‘present’ or ‘presence’ are used merely
to symbolize those activities of the corporation’s agent within the state which courts will deem to
be sufficient to satisfy the demands of due process. Those demands may be met by such contacts
of the corporation with the state of the forum as make it reasonable … to require the corporation
to defend the particular suit which is brought there. An ‘estimate of the inconveniences’ which
would result to the corporation from a trial away from its ‘home’ or principal place of business is
relevant in this connection.
‘Presence’ in the state in this sense has never been doubted when the activities of the
corporation there have not only been continuous and systematic, but also give rise to the
liabilities sued on, even though no consent to be sued or authorization to an agent to accept
service of process has been given. Conversely it has been generally recognized that the casual
presence of the corporate agent or even his conduct of single or isolated items of activities in a
state in the corporation’s behalf are not enough to subject it to suit on causes of action
unconnected with the activities there. To require the corporation in such circumstances to defend
the suit away from its home or other jurisdiction where it carries on more substantial activities
has been thought to lay too great and unreasonable a burden on the corporation to comport with
due process.
...
Finally, although the commission of some single or occasional acts of the corporate agent
in a state sufficient to impose an obligation or liability on the corporation has not been thought to
confer upon the state authority to enforce it, other such acts, because of their nature and quality
and the circumstances of their commission, may be deemed sufficient to render the corporation
liable to suit. Cf. [citations omitted and] Hess v. Pawloski, supra. True, some of the decisions
holding the corporation amenable to suit have been supported by resort to the legal fiction that it
has given its consent to service and suit, consent being implied from its presence in the state
through the acts of its authorized agents. But more realistically it may be said that those
authorized acts were of such a nature as to justify the fiction.
It is evident that the criteria by which we mark the boundary line between those activities
which justify the subjection of a corporation to suit, and those which do not, cannot be simply
mechanical or quantitative. … Whether due process is satisfied must depend rather upon the
quality and nature of the activity in relation to the fair and orderly administration of the laws
which it was the purpose of the due process clause to insure. That clause does not contemplate
that a state may make binding a judgment in personam against an individual or corporate
defendant with which the state has no contacts, ties, or relations. Cf. Pennoyer v. Neff, supra;
[citation omitted].
But to the extent that a corporation exercises the privilege of conducting activities within
a state, it enjoys the benefits and protection of the laws of that state. The exercise of that
privilege may give rise to obligations; and, so far as those obligations arise out of or are
connected with the activities within the state, a procedure which requires the corporation to
respond to a suit brought to enforce them can, in most instances, hardly be said to be undue.
Applying these standards, the activities carried on in behalf of appellant in the State of
Washington were neither irregular nor casual. They were systematic and continuous throughout
the years in question. They resulted in a large volume of interstate business, in the course of
which appellant received the benefits and protection of the laws of the state, including the right
to resort to the courts for the enforcement of its rights. The obligation which is here sued upon
arose out of those very activities. It is evident that these operations establish sufficient contacts
or ties with the state of the forum to make it reasonable and just according to our traditional
conception of fair play and substantial justice to permit the state to enforce the obligations which
appellant has incurred there. Hence we cannot say that the maintenance of the present suit in the
State of Washington involves an unreasonable or undue procedure.
...
Appellant having rendered itself amenable to suit upon obligations arising out of the
activities of its salesmen in Washington, the state may maintain the present suit in personam to
collect the tax laid upon the exercise of the privilege of employing appellant’s salesmen within
the state. …
Affirmed.
...
Mr. Justice Black delivered the following [concurring] opinion.
...
Certainly … the due process clause is not brought in issue any more by appellant’s
further conceptualistic contention that Washington could not levy a tax or bring suit against the
corporation because it did not honor that State with its mystical ‘presence.’ For it is unthinkable
that the vague due process clause was ever intended to prohibit a State from regulating or taxing
a business carried on within its boundaries simply because this is done by agents of a corporation
organized and having its headquarters elsewhere. … The Court … has engaged in an
unnecessary discussion in the course of which it has announced vague Constitutional criteria
applied for the first time to the issue before us. It has thus introduced uncertain elements
confusing the simple pattern and tending to curtail the exercise of State powers to an extent not
justified by the Constitution.
The criteria adopted insofar as they can be identified read as follows: Due process does
permit State courts to ‘enforce the obligations which appellant has incurred’ if it be found
‘reasonable and just according to our traditional conception of fair play and substantial justice.’
And this in turn means that we will ‘permit’ the State to act if upon ‘an ‘estimate of the
inconveniences’ which would result to the corporation from a trial away from its ‘home’ or
principal place of business,’ we conclude that it is ‘reasonable’ to subject it to suit in a State
where it is doing business.
It is true that this Court … [in] previous cases had indicated that the ancient rule against
judgments without notice had stemmed from ‘natural justice’ concepts. These cases, while giving
additional reasons why notice under particular circumstances is inadequate, did not mean
thereby that all legislative enactments which this Court might deem to be contrary to natural
justice ought to be held invalid under the due process clause [italics added]. None of the cases
purport to support or could support a holding that a State can tax and sue corporations only if its
action comports with this Court’s notions of ‘natural justice.’ I should have thought the Tenth
Amendment settled that.
I believe that the Federal Constitution leaves to each State, without any ‘ifs' or ‘buts,’ a
power to tax and to open the doors of its courts for its citizens to sue corporations whose agents
do business in those States. Believing that the Constitution gave the States that power, I think it a
judicial deprivation to condition its exercise upon this Court’s notion of ‘fairplay,’ however
appealing that term may be. Nor can I stretch the meaning of due process so far as to authorize
this Court to deprive a State of the right to afford judicial protection to its citizens on the ground
that it would be more ‘convenient’ for the corporation to be sued somewhere else.
There is a strong emotional appeal in the words ‘fair play,’ ‘justice,’ and
‘reasonableness.’ But they were not chosen by those who wrote the original Constitution or the
Fourteenth Amendment as a measuring rod for this Court to use in invalidating State or Federal
laws passed by elected legislative representatives. No one, not even those who most feared a
democratic government, ever formally proposed that courts should be given power to invalidate
legislation under any such elastic standards. …
True, the State’s power is here upheld. But the rule announced means that tomorrow’s
judgment may strike down a State or Federal enactment on the ground that it does not conform to
this Court's idea of natural justice. …
Notes and Questions:……………………………………
1. There are several situations whereby an entity or individual is unquestionably subject
to in personam jurisdiction (IPJ) in the forum selected by the plaintiff. These include being
domiciled in the forum and filing a general appearance (answer). In the interim period between
Pennoyer and Shoe, the state and federal judiciary adopted a number of yardsticks for measuring
personal jurisdiction—in the many other situations where the defendant’s ties to the forum are
not as robust. The most prominent were “doing business,” “presence,” and “consent.” What are
the arguments, for and against, each of these bases for IPJ existing over International Shoe
Company in the State of Washington?
2. While the above approaches are still articulated in the IPJ cases, the over-arching
analysis must now be undertaken within the unifying framework articulated by the U.S. Supreme
Court in Shoe. What was it?
3. Is Shoe a case arising under federal law or a diversity subject matter jurisdiction (SMJ)
case? What role, if any, does the answer to the SMJ question play in assessing IPJ?
4. Justice Black’s concurring opinion warns against the majority’s use of the “Fourteenth
Amendment as a measuring rod for this Court to use in invalidating State or Federal laws passed
by elected legislative representatives.” Would a different finding—that there was no IPJ—
necessarily invalidate Washington’s unemployment compensation laws?
5. Black would likely be incensed by today’s Internet cases employing Shoe’s elastic
“minimum contacts” yardstick. There, the general rule is that the more involvement an out-ofstate provider has with the forum, the more likely a finding of IPJ. This approach has given rise
to an active-passive distinction. For example, assume P goes to the provider’s webpage. Its
servers are usually outside the forum. D directs no e-mail communications into P’s chosen
forum, which is not required for P to complete her purchase of D’s offending product. No IPJ.
WORLD-WIDE VOLKSWAGEN CORPORATION v. WOODSON
United States Supreme Court
444 U.S. 286 (1980)
Mr. Justice White delivered the [5-4] opinion of the Court [three separate opinions].
The issue before us is whether, consistently with the Due Process Clause of the
Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a
nonresident automobile retailer and its wholesale distributor in a products-liability action, when
the defendants’ only connection with Oklahoma is the fact that an automobile sold in New York
to New York residents became involved in an accident in Oklahoma.
I
Respondents Harry and Kay Robinson purchased a new Audi automobile from petitioner
Seaway Volkswagen, Inc. (Seaway), in Massena, N. Y., in 1976. The following year the
Robinson family, who resided in New York, left that State for a new home in Arizona. As they
passed through the State of Oklahoma, another car struck their Audi in the rear, causing a fire
which severely burned Kay Robinson and her two children.
The Robinsons subsequently brought a products-liability action in the District Court for
Creek County, Okla., claiming that their injuries resulted from defective design and placement of
the Audi’s gas tank and fuel system. They joined as defendants the automobile’s manufacturer,
Audi NSU Auto Union Aktiengesellschaft (Audi); its importer Volkswagen of America, Inc.
(Volkswagen); its regional distributor, petitioner World-Wide Volkswagen Corp. (World-Wide);
and its retail dealer, petitioner Seaway. Seaway and World-Wide entered special appearances,3
claiming that Oklahoma’s exercise of jurisdiction over them would offend the limitations on the
State’s jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment.
New York Seaway Office
Volkswagen Group of America Logo
Reprinted with permission of Everett Barnes
<http://www.vw.com/apps/vwd4_base/docroot/
frontend/resources/img/layout/logo_new.jpg>
The facts presented to the District Court showed that World-Wide is incorporated and has
its business office in New York. It distributes vehicles, parts, and accessories, under contract
with Volkswagen, to retail dealers in New York, New Jersey, and Connecticut. Seaway, one of
these retail dealers, is incorporated and has its place of business in New York. Insofar as the
record reveals, Seaway and World-Wide are fully independent corporations whose relations with
each other and with Volkswagen and Audi are contractual only. Respondents adduced no
evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any
products to or in that State, has an agent to receive process there, or purchases advertisements in
any media calculated to reach Oklahoma. In fact, as respondents’ counsel conceded at oral
argument, there was no showing that any automobile sold by World-Wide or Seaway has ever
entered Oklahoma with the single exception of the vehicle involved in the present case.
3
Volkswagen also entered a special appearance in the District Court, but unlike World-Wide and Seaway
did not seek review in the Supreme Court of Oklahoma and is not a petitioner here. Both Volkswagen and Audi
remain as defendants in the litigation pending before the District Court in Oklahoma.
Despite the apparent paucity of contacts between petitioners and Oklahoma, the
[Oklahoma] District Court rejected their constitutional claim…. Petitioners then sought a writ of
prohibition in the Supreme Court of Oklahoma to restrain the District Judge, respondent Charles
S. Woodson, from exercising in personam jurisdiction over them. They renewed their contention
that, because they had no “minimal contacts” with the State of Oklahoma, the actions of the
District Judge were in violation of their rights under the Due Process Clause.
The Supreme Court of Oklahoma denied the writ, holding that personal jurisdiction over
petitioners was authorized.
...
[It stated that] “In the case before us, the product being sold and distributed by the
petitioners is by its very design and purpose so mobile that petitioners can foresee its possible
use in Oklahoma. This is especially true of the distributor, who has the exclusive right to
distribute such automobile in New York, New Jersey and Connecticut. The evidence presented
below demonstrated that goods sold and distributed by the petitioners were used in the State of
Oklahoma, and under the facts we believe it reasonable to infer, given the retail value of the
automobile, that the petitioners derive substantial income from automobiles which from time to
time are used in the State of Oklahoma. This being the case, we hold that under the facts
presented, the trial court was justified in concluding that the petitioners derive substantial
revenue from goods used or consumed in this State.” [Compare the above concession by
plaintiff’s counsel, during the US Supreme Court hearing, that “there was no showing that any
automobile sold by World-Wide or Seaway has ever entered Oklahoma with the single exception
of the vehicle involved in the present case.]
We granted certiorari, to consider an important constitutional question with respect to
state-court jurisdiction and to resolve a conflict between the Supreme Court of Oklahoma and the
highest courts of at least four other States. …
II
The Due Process Clause of the Fourteenth Amendment limits the power of a state court
to render a valid personal judgment against a nonresident defendant. … In the present case, it is
not contended that notice was inadequate; the only question is whether these particular
petitioners were subject to the jurisdiction of the Oklahoma courts.
As has long been settled, and as we reaffirm today, a state court may exercise personal
jurisdiction over a nonresident defendant only so long as there exist “minimum contacts”
between the defendant and the forum State. International Shoe. The concept of minimum
contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects
the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to
ensure that the States through their courts, do not reach out beyond the limits imposed on them
by their status as coequal sovereigns in a federal system.
The protection against inconvenient litigation is typically described in terms of
“reasonableness” or “fairness.” We have said that the defendant’s contacts with the forum State
must be such that maintenance of the suit “does not offend ‘traditional notions of fair play and
substantial justice.’ ” The relationship between the defendant and the forum must be such that it
is “reasonable ... to require the corporation to defend the particular suit which is brought there.”
Implicit in this emphasis on reasonableness is the understanding that the burden on the
defendant, while always a primary concern, will in an appropriate case be considered in light of
other relevant factors, including 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 the most efficient resolution of controversies; and the shared interest of the
several States in furthering fundamental substantive social policies.
The limits imposed on state jurisdiction by the Due Process Clause, in its role as a
guarantor against inconvenient litigation, have been substantially relaxed over the years. As we
noted [citation omitted] this trend is largely attributable to a fundamental transformation in the
American economy:
Today many commercial transactions touch two or more States and may involve parties
separated by the full continent. With this increasing nationalization of commerce has
come a great increase in the amount of business conducted by mail across state lines. At
the same time modern transportation and communication have made it much less
burdensome for a party sued to defend himself in a State where he engages in economic
activity.
. . . ………………………………………….
Nevertheless, we have never accepted the proposition that state lines are irrelevant for
jurisdictional purposes, nor could we, and remain faithful to the principles of interstate
federalism embodied in the Constitution. … [T]he States retain many essential attributes of
sovereignty, including, in particular, the sovereign power to try causes in their courts. The
sovereignty of each State, in turn, implied a limitation on the sovereignty of all of its sister
States—a limitation express or implicit in both the original scheme of the Constitution and the
Fourteenth Amendment. …………………………………………………………………………..
Hence, even while abandoning the shibboleth that “[t]he authority of every tribunal is
necessarily restricted by the territorial limits of the State in which it is established,” Pennoyer v.
Neff, we emphasized that the reasonableness of asserting jurisdiction over the defendant must be
assessed “in the context of our federal system of government,” International Shoe Co. v.
Washington, and stressed that the Due Process Clause ensures not only fairness, but also the
“orderly administration of the laws.” As we noted in [citation omitted]:
As technological progress has increased the flow of commerce between the States, the
need for jurisdiction over nonresidents has undergone a similar increase. At the same time,
progress in communications and transportation has made the defense of a suit in a foreign
tribunal less burdensome. In response to these changes, the requirements for personal
jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, to the
flexible standard of International Shoe. But it is a mistake to assume that this trend heralds the
eventual demise of all restrictions on the personal jurisdiction of state courts. Those
restrictions are more than a guarantee of immunity from inconvenient or distant litigation.
They are a consequence of territorial limitations on the power of the respective States.
Thus, the Due Process Clause “does not contemplate that a state may make binding a
judgment in personam against an individual or corporate defendant with which the state has no
contacts, ties, or relations.” Even if the defendant would suffer minimal or no inconvenience
from being forced to litigate before the tribunals of another State; even if the forum State has a
strong interest in applying its law to the controversy; even if the forum State is the most
convenient location for litigation, the Due Process Clause, acting as an instrument of interstate
federalism, may sometimes act to divest the State of its power to render a valid judgment.
III
Applying these principles to the case at hand, we find in the record before us a total
absence of those affiliating circumstances that are a necessary predicate to any exercise of statecourt jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma. They close no sales
and perform no services there. They avail themselves of none of the privileges and benefits of
Oklahoma law. They solicit no business there either through salespersons or through advertising
reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at
wholesale or retail to Oklahoma customers or residents or that they indirectly, through others,
serve or seek to serve the Oklahoma market. In short, respondents seek to base jurisdiction on
one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous
circumstance that a single Audi automobile, sold in New York to New York residents, happened
to suffer an accident while passing through Oklahoma [while en route to Arizona].
It is argued, however, that because an automobile is mobile by its very design and
purpose it was “foreseeable” that the Robinsons’ Audi would cause injury in Oklahoma. Yet
“foreseeability” alone has never been a sufficient benchmark for personal jurisdiction under the
Due Process Clause.
. . .11
This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability
that is critical to due process analysis is not the mere likelihood that a product will find its way
into the forum State. Rather, it is that the defendant’s conduct and connection with the forum
State are such that he should reasonably anticipate being haled into court there. The Due Process
Clause, by ensuring the “orderly administration of the laws,” gives a degree of predictability to
the legal system that allows potential defendants to structure their primary conduct with some
minimum assurance as to where that conduct will and will not render them liable to suit.
When a corporation “purposefully avails itself of the privilege of conducting activities
within the forum State,” it has clear notice that it is subject to suit there, and can act to alleviate
the risk of burdensome litigation by procuring insurance, passing the expected costs on to
customers, or, if the risks are too great, severing its connection with the State. Hence if the sale
of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an
isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly
11
Respondents’ counsel, at oral argument, sought to limit the reach of the foreseeability standard by
suggesting that there is something unique about automobiles. It is true that automobiles are uniquely mobile, that
they did play a crucial role in the expansion of personal jurisdiction through the fiction of implied consent, e. g.,
Hess v. Pawloski, and that some of the cases have treated the automobile as a “dangerous instrumentality.” But
today, under the regime of International Shoe, we see no difference for jurisdictional purposes between an
automobile and any other chattel. The “dangerous instrumentality” concept apparently was never used to support
personal jurisdiction; and to the extent it has relevance today it bears not on jurisdiction but on the possible
desirability of imposing substantive principles of tort law such as strict liability. …………………………………….
or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit
in one of those States if its allegedly defective merchandise has there been the source of injury to
its owner or to others. The forum State does not exceed its powers under the Due Process Clause
if it asserts personal jurisdiction over a corporation that delivers its products into the stream of
commerce with the expectation that they will be purchased by consumers in the forum State.
But there is no such or similar basis for Oklahoma jurisdiction over World-Wide or
Seaway in this case. Seaway’s sales are made in Massena, N. Y. World-Wide’s market, although
substantially larger, is limited to dealers in New York, New Jersey, and Connecticut. There is no
evidence of record that any automobiles distributed by World-Wide are sold to retail customers
outside this tristate area. It is foreseeable that the purchasers of automobiles sold by World-Wide
and Seaway may take them to Oklahoma. But the mere “unilateral activity of those who claim
some relationship with a nonresident defendant cannot satisfy the requirement of contact with the
forum State.”
...
This argument seems to make the point that the purchase of automobiles in New York,
from which the petitioners earn substantial revenue, would not occur but for the fact that the
automobiles are capable of use in distant States like Oklahoma. Respondents observe that the
very purpose of an automobile is to travel, and that travel of automobiles sold by petitioners is
facilitated by an extensive chain of Volkswagen service centers throughout the country,
including some in Oklahoma.12 However, financial benefits accruing to the defendant from a
collateral relation to the forum State will not support jurisdiction if they do not stem from a
constitutionally cognizable contact with that State. In our view, whatever marginal revenues
petitioners may receive by virtue of the fact that their products are capable of use in Oklahoma is
far too attenuated a contact to justify that State’s exercise of in personam jurisdiction over them.
Because we find that petitioners have no “contacts, ties, or relations” with the State of
Oklahoma, the judgment of the Supreme Court of Oklahoma is ......................................................
Reversed.
Mr. Justice Marshall, with whom Mr. Justice Blackmun joins, dissenting.
For over 30 years the standard by which to measure the constitutionally permissible reach
of state-court jurisdiction has been well established:
[D]ue process requires only that in order to subject a defendant to a judgment in
personam, 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.’ International Shoe.
The corollary, that the Due Process Clause forbids the assertion of jurisdiction over a defendant
“with which the state has no contacts, ties, or relations,” is equally clear. The concepts of fairness
and substantial justice as applied to an evaluation of “the quality and nature of the [defendant’s]
activity,” are not readily susceptible of further definition, however, and it is not surprising that
the constitutional standard is easier to state than to apply. ……………………………………..
12
As we have noted, petitioners earn no direct revenues from these service centers.
This is a difficult case, and reasonable minds may differ as to whether respondents have
alleged a sufficient “relationship among the defendant[s], the forum, and the litigation,” to satisfy
the requirements of International Shoe. I am concerned, however, that the majority has reached
its result by taking an unnecessarily narrow view of petitioners’ forum-related conduct. The
majority asserts that “respondents seek to base jurisdiction on one, isolated occurrence and
whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi
automobile, sold in New York to New York residents, happened to suffer an accident while
passing through Oklahoma.” If that were the case, I would readily agree that the minimum
contacts necessary to sustain jurisdiction are not present. But the basis for the assertion of
jurisdiction is not the happenstance that an individual over whom petitioner had no control made
a unilateral decision to take a chattel with him to a distant State. Rather, jurisdiction is premised
on the deliberate and purposeful actions of the defendants themselves in choosing to become part
of a nationwide, indeed a global, network for marketing and servicing automobiles.
Petitioners are sellers of a product whose utility derives from its mobility. The unique
importance of the automobile in today’s society … needs no further elaboration. Petitioners
know that their customers buy cars not only to make short trips, but also to travel long distances.
In fact, the nationwide service network with which they are affiliated was designed to facilitate
and encourage such travel. Seaway would be unlikely to sell many cars if authorized service
were available only in Massena, N. Y. Moreover, local dealers normally derive a substantial
portion of their revenues from their service operations and thereby obtain a further economic
benefit from the opportunity to service cars which were sold in other States. It is apparent that
petitioners have not attempted to minimize the chance that their activities will have effects in
other States; on the contrary, they have chosen to do business in a way that increases that chance,
because it is to their economic advantage to do so. ........................................................................
To be sure, petitioners could not know in advance that this particular automobile would
be driven to Oklahoma. They must have anticipated, however, that a substantial portion of the
cars they sold would travel out of New York. Seaway, a local dealer in the second most populous
State, and World-Wide, one of only seven regional Audi distributors in the entire country, would
scarcely have been surprised to learn that a car sold by them had been driven in Oklahoma on
Interstate 44, a heavily traveled transcontinental highway. In the case of the distributor, in
particular, the probability that some of the cars it sells will be driven in every one of the
contiguous States must amount to a virtual certainty. This knowledge should alert a reasonable
businessman to the likelihood that a defect in the product might manifest itself in the forum
State—not because of some unpredictable, aberrant, unilateral action by a single buyer, but in the
normal course of the operation of the vehicles for their intended purpose. ..........................
It is misleading for the majority to characterize the argument in favor of jurisdiction as
one of “ ‘foreseeability’ alone.” As economic entities petitioners reach out from New York,
knowingly causing effects in other States and receiving economic advantage both from the
ability to cause such effects themselves and from the activities of dealers and distributors in other
States. While they did not receive revenue from making direct sales in Oklahoma, they
intentionally became part of an interstate economic network, which included dealerships in
Oklahoma, for pecuniary gain. In light of this purposeful conduct I do not believe it can be said
that petitioners “had no reason to expect to be haled before a[n Oklahoma] court.”
The majority apparently acknowledges that if a product is purchased in the forum State
by a consumer, that State may assert jurisdiction over everyone in the chain of distribution. With
this I agree. But I cannot agree that jurisdiction is necessarily lacking if the product enters the
State not through the channels of distribution but in the course of its intended use by the
consumer. We have recognized the role played by the automobile in the expansion of our notions
of personal jurisdiction. Unlike most other chattels, which may find their way into States far
from where they were purchased because their owner takes them there, the intended use of the
automobile is precisely as a means of traveling from one place to another. …
...
. . . .........................................................................
Of course, the Constitution forbids the exercise of jurisdiction if the defendant had no
judicially cognizable contacts with the forum. But as the majority acknowledges, if such contacts
are present the jurisdictional inquiry requires a balancing of various interests and policies. I
believe such contacts are to be found here and that, considering all of the interests and policies at
stake, requiring petitioners to defend this action in Oklahoma is not beyond the bounds of the
Constitution. Accordingly, I dissent.
Mr. Justice Blackmun, dissenting.
...
For me, a critical factor in the disposition of the litigation is the nature of the
instrumentality under consideration. It has been said that we are a nation on wheels. What we are
concerned with here is the automobile and its peripatetic character. One need only examine our
national network of interstate highways, or make an appearance on one of them, or observe the
variety of license plates present not only on those highways but in any metropolitan area, to
realize that any automobile is likely to wander far from its place of licensure or from its place of
distribution and retail sale. Miles per gallon on the highway (as well as in the city) and mileage
per tankful are familiar allegations in manufacturers’ advertisements today. To expect that any
new automobile will remain in the vicinity of its retail sale—like the 1914 electric driven car by
the proverbial “little old lady”—is to blink at reality. The automobile is intended for distance as
well as for transportation within a limited area.
It therefore seems to me not unreasonable-and certainly not unconstitutional and beyond
the reach of the principles laid down in International Shoe, and its progeny—to uphold
Oklahoma jurisdiction over this New York distributor and this New York dealer when the
accident happened in Oklahoma. I see nothing more unfair for them than for the manufacturer
and the importer. All are in the business of providing vehicles that spread out over the highways
of our several States. It is not too much to anticipate at the time of distribution and at the time of
retail sale that this Audi would be in Oklahoma.
...
Notes and Questions:
1. “General” IPJ may exist when a defendant’s contacts with the forum are so extensive,
that a court could generally require her to litigate there, for any cause of action—regardless of
where it occurred. General jurisdiction examples include a suit against a forum resident, or
against a corporation where it is incorporated or has its principal place of business. That would
not be the case, given the facts of Pennoyer, or Hess, or Shoe. In the latter cases, the court
considered what is often referred to as “specific” IPJ. Lacking the systematic contacts that would
trigger general IPJ, P had to assert that there is specific personal jurisdiction. That would be
jurisdiction which flows from a dispute arising within the forum state—necessitating a minimum
contacts analysis of the D’s (comparatively remote) ties to the forum. WWVW’s footnote 3
cryptically alludes to this distinction, and suggests why Audi and Volkswagen not join in the
other defendants’ IPJ motion. General v. specific IPJ is not essential to articulating an in
personam jurisdiction analysis. But understanding their respective applications should help
unravel the mysteries of IPJ’s constitutional Due Process cases.
2. WWVW restates the various interests, other than inconvenience to the defendant,
which bear upon the reasonableness of exercising IPJ. What are they? How did they influence
the result in WWVW?
3. Having now studied several IPJ cases, would you be willing to embrace the dissenting
justices’ view that there should have been IPJ over the tri-state distributor and the New York
retailer—both of whom are in the chain of distribution of new Audis? Put another way: assume
you are in the showroom where the Audi was being sold. Would the retailer be likely to say:
“This is a great car, but not for driving outside of New York (or New England).” Would he be
more likely to say: “Not only will you have a great car, but it can be serviced by any VW dealer
in the country—and there are a thousand of them.”
4. Page 4 contains the phrase: “When a corporation ‘purposefully avails itself of the
privilege of conducting activities within the forum State,’ it has clear notice that it is subject to
suit there....” That theme is drawn from the Court’s earlier decision in Hanson v. Denkla, 357
U.S. 235 (1958). That seminal decision introduced the “purposeful availment” factor into
personal jurisdiction analysis. The essential tenet is that a D’s activities, which demonstrates her
purposely dealing with the forum (or its residents), subjects her to IPJ in that forum. On the other
hand, merely placing a product into the stream of commerce is not enough to establish such
purposeful availment. Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987).
LONGINES-WITTNAUER WATCH CO. V BARNES & REINECKE
New York Court of Appeals
15 N.Y.2d 443 (1965)
Fuld, Justice [with two concurring opinions]
In the three cases under review—one sounding in contract and two in tort—we are called upon
to decide whether the courts of this State acquired personal jurisdiction, under our “long arm”
statute (CPLR 302), over foreign corporations not “doing business” here in the traditional sense.
Since there are several questions of law common to all three cases, we discuss such questions
generally, at the outset, before undertaking a more particularized consideration of the cases
themselves.
...
Taking advantage of the [US] Supreme Court’s broadening of the bases for the exercise
of personal jurisdiction over nondomiciliaries, the Legislature of this State, in 1962, … enacted
CPLR 302. Modeled upon a provision of the Illinois Civil Practice Act, section 302 discarded the
concept of “doing business” as the exclusive test of jurisdiction and provided, instead, insofar as
here pertinent, that personal jurisdiction may be asserted over any nondomiciliary if, “in person
or through an agent,” he “transacts any business within the state” or “commits a tortious act
within the state,” as long as the particular cause of action asserted is one “arising from” any of
such acts.3
...
One of the cases, Longines-Wittnauer Watch Co. v. Barnes & Reinecke, is a suit for breach of
contract and turns on paragraph 1 of subdivision (a) of section 302—relating to a defendant’s
“transact[ion of] any business within the state.” The other two—Feathers v. McLucas and Singer
v. Walker—are founded on claims of negligence, as well as of breach of warranty, and were
decided below on the basis of paragraph 2 of subdivision (a) of section 302—involving a
defendant’s commission of “a tortious act within the state.”
Longines-Wittnauer v. Barnes & Reinecke
The plaintiff Longines-Wittnauer, a New York corporation, seeks damages … for breach
of warranty in the manufacture and sale of machines specially designed for it by the appellant
Barnes & Reinecke, a Delaware corporation having its place of business in Chicago, Illinois. The
parties had carried on negotiations in 1962, the appellant … mailing its contract proposals for the
machines to the plaintiff in New York and shortly thereafter sending key officers to this State to
discuss the terms of the agreement. After further meetings in Chicago, a written contract in the
form of a printed purchase order was executed in June 1962 by the appellant in Chicago, the
purchase order itself reciting, however, that it was “a contract made in the State of New York
and governed by the laws thereof.” Thereafter, officers and employees of the appellant, including
its president, treasurer and engineers, twice came to the plaintiff’s plant in Lynbrook on Long
Island to discuss certain problems in connection with the performance of the contract. There
were meetings in Chicago as well, and in March 1963 a supplemental agreement was executed
by the plaintiff in New York after it had been signed by the appellant in Chicago. This agreement
increased the price of the machines … and provided, among other things, that their delivery did
not constitute acceptance, it being specified that such acceptance would occur only after the
machines had met certain tests following installation in New York. In April 1963, a month after
the supplemental agreement was executed, the appellant shipped the machines, f.o.b. Chicago,
directed to the plaintiff’s plant in Lynbrook and thereafter participated in the installation and
testing of the machines; in fact, two of its engineers spent substantially all of their working days
3
The entire text of subdivision (a), the portion of the statute with which we are concerned, reads as follows:
(a) Acts which are the basis of jurisdiction. A court may exercise personal jurisdiction over any nondomiciliary, or his executor or administrator, as to a cause of action arising from any of the acts enumerated
in this section, in the same manner as if he were a domiciliary of the state, if, in person or through an agent,
he: “1. transacts any business within the state; or “2. commits a tortious act within the state, except as to a
cause of action for defamation of character arising from the act; or “3. owns, uses or possesses any real
property situated within the state.
at the plaintiff’s plant from April through June 1963 getting the machines ready for acceptance
testing.
Source: <http://thumbs3.picclick.com/d/w1600/pict/130947174978_/
MINT-US-Air-Force-Longines-Wittnauer-Watch-Co-Pocket.j>
Reprinted with Permission of Yabe Edmund
The plaintiff, following its acceptance of the machines, discovered certain alleged
defects, on the strength of which this action was commenced in October 1963 ... by service of the
summons and complaint on the appellant in Illinois. The latter challenged the court’s jurisdiction
over its person by a motion to dismiss the complaint. The court … denied the motion, the
Appellate Division … unanimously affirmed the resulting order and the appeal is before us by
leave of the Appellate Division….
The appellant does not dispute that a single transaction in New York, out of which the
cause of action has arisen, may satisfy the requirement of the transaction of business provision
(CPLR 302, subd. [a], par. 1). The nub of its argument seems to be that, if the contract was not
actually made in New York, its activities in this State preliminary and subsequent to the
execution of the contract cannot be regarded as amounting to the transaction of “business” under
the statute. We find no merit in this contention.
In enacting section 302, the Legislature chose not to fix precise guidelines, as other states
have done, so as to draw within the jurisdictional reach of the New York courts only contracts
“made within this State” (Md.) or contracts “made in this State or to be performed in this State”
(N. C.) or contracts “to be performed in whole or in part by either party in [this State]” (Minn.);
Tex.) (Vt.). The Advisory Committee … decided, instead, to follow the broad, inclusive
language of the Illinois provision, adopting as the criterion the “transact[ion of] any business
within the state.” The design of the legislation, as expressed by the committee, was to take
advantage of the “new [jurisdictional] enclave” opened up by International Shoe where the
nonresident defendant has engaged in some purposeful activity in this State in connection with
the matter in suit. Therefore, even though the last act marking the formal execution of the
contract may not have occurred within New York, the statutory test may be satisfied by a
showing of other purposeful acts performed by the appellant in this State in relation to the
contract, albeit preliminary or subsequent to its execution.5
The activities in which the appellant engaged in this State were assuredly adequate to
meet the liberal statutory criterion. They comprised substantial preliminary negotiations through
high-level personnel during a period of some two months; the actual execution of a
supplementary contract; the shipment for use here, subject to acceptance following delivery, of
two specially designed machines, priced at the not inconsiderable sum of $118,000; and the
rendition of services over a period of some three months by two of the appellant’s top engineers
in supervising the installation and testing of the complex machines.6
...
It follows that the courts below were fully justified in sustaining jurisdiction over the
appellant Barnes & Reinecke.
Feathers v. McLucas
Mr. and Mrs. Feathers, the plaintiffs in this case, brought suit to recover for serious
personal injuries and property damage sustained in July 1962 as a result of an explosion on a
public highway near their home in Berlin, New York, of a tractor-drawn steel tank, en route from
Pennsylvania to Vermont, which contained highly flammable liquefied propane gas. The tank
had been manufactured in Kansas in 1957 by the appellant, The Darby Products of Steel Plate
Corporation (sued as The Darby Corporation), a Kansas company, under a contract with the
Butler Manufacturing Co., a Missouri corporation, presumably with knowledge that the latter
would mount the tank on a wheelbase and then sell it to E. Brooke Matlack, a Pennsylvania
corporation, which operated as a licensed interstate carrier in Pennsylvania and several other
states, including New York. All three companies were named among the defendants sued, the
complaint charging Darby with negligence and breach of warranty in the manufacture of the
tank.
Served with a summons and complaint in Kansas, pursuant to CPLR 302 …, the
appellant moved to dismiss the complaint on the ground that the court lacked jurisdiction of its
person, pointing out that all its business was carried on from its plant and offices in Kansas City,
Kansas, and that it never had any agents, representatives, offices or other facilities in this State
5
While by no means controlling, it is worthy of some note that the decisions interpreting the Illinois
statute—on which, as we have noted, section 302 is modeled—have held that the place of contracting is not the
exclusive criterion, and that the requisite transaction of business by the nonresident defendant within the forum may
consist of such activity on his part as engaging in preliminary negotiations for the contract or in subsequent acts in
furtherance thereof, the issue turning, in essence, on the totality of the defendant’s activities within the forum.
6
We do no more than note the added fact that the contract itself expressed the agreement of the parties that
it was to be regarded as having been made in New York and as governed by New York law.
and never transacted or solicited any business here. The motion was granted … but its order was
reversed by the Appellate Division, … which granted leave to appeal to this court….
There being no showing—indeed, not even a claim—that the appellant transacted any
business in this State, within the purview of paragraph 1 of subdivision (a) of CPLR 302, the
case necessarily turns on the construction to be accorded paragraph 2. More particularly, we
must ascertain whether the facts of the case satisfy the standard of paragraph 2 that the defendant
be shown to have “commit[ted] a tortious act within the state.”
The tortious act charged against the appellant—that it improperly designed and
assembled the tank—indisputably occurred in the out-of- state manufacturing process in Kansas.
Nevertheless, the Appellate Division sustained jurisdiction on the strength of the resulting injury
in this State, theorizing that “the Legislature did not intend to separate foreign wrongful acts
from resulting forum consequences,” and it went on to say—directing its attention to the
requirements of Federal due process—that section 302 “merely codified the minimum contacts
test” laid down by the Supreme Court decisions.7
However, the question presented is not—as the Appellate Division intimated it was by its
reference to “minimum contacts”—whether the Legislature could constitutionally have enacted
legislation expanding the jurisdiction of our courts to the extent determined by the Appellate
Division … but whether the Legislature did, in fact, do so. In short, in both this case and Singer
v. Walker [below], our task is simply to determine the import and scope of the jurisdictional
provision which the Legislature actually enacted. As bearing on this, it cannot be made too clear
that we are concerned solely with the problem of the court’s jurisdiction over the person of a
non-resident defendant and not with the question of his ultimate liability to a particular plaintiff;
that issue is to be considered only after it is decided, on the basis of section 302, that the
defendant is subject to the in personam jurisdiction of our courts.
The language of paragraph 2—conferring personal jurisdiction over a nondomiciliary “if,
in person or through an agent, he ... commits a tortious act within the state”—is too plain and
precise to permit it to be read, as has the Appellate Division, as if it were synonymous with
“commits a tortious act without the state which causes injury within the state.” The mere
occurrence of the injury in this State certainly cannot serve to transmute an out-of-state tortious
act into one committed here within the sense of the statutory wording. Any possible doubt on this
score is dispelled by the fact that the draftsmen of section 302 pointedly announced that their
purpose was to confer on the court “personal jurisdiction over a non-domiciliary whose act in the
state gives rise to a cause of action” or, stated somewhat differently, “to subject non-residents to
personal jurisdiction when they commit acts within the state” (emphasis supplied.) Having in
7
It was the Appellate Division’s conclusion that the “minimum contacts” test was satisfied by the showing
that the tank, with its load of flammable liquid, was “an instrumentality dangerous to life and property, if defectively
constructed”, and that the appellant had “knowledge” that the tank was designed for ultimate use by a Pennsylvania
carrier in interstate commerce and “could be expected reasonably to foresee that its acts, if wrongful, might well
have potential consequences in adjoining New York.”
mind the plain language of the statute and the expressed design of those who drafted it, we deem
unreasonable the interpretation urged upon us by the plaintiffs.
… If, in fact, the Legislature of this State had intended to confer jurisdiction on the
strength of injurious forum consequences alone, without regard to the locus of the commission of
the tortious act itself, it would presumably have used language appropriate to reflect such a
design. … In sharp contrast [to long-arm statutes in other states], the Legislature chose to adopt
language which, in so many words, demands that the “tortious act” be one committed by the
defendant, “in person or through an agent,” within this State.
Our attention is directed to the broad interpretation accorded in Gray v. American
Radiator & Sanitary Corp. to the similarly worded provision of the Illinois statute—relating to
the commission of a tortious act within the state—on which paragraph 2 of subdivision (a) of
section 302 was modeled. … In Gray, an Illinois resident, injured in that state as a result of an
explosion of a water heater which had, in the court’s words, found its way into Illinois “in the
course of commerce,” brought suit against an Ohio corporation which had (it was alleged)
negligently manufactured in Ohio a safety valve later incorporated into the heater. The heater
itself had been assembled in Pennsylvania by a Pennsylvania corporation which had purchased
the valve from the Ohio manufacturer. In rejecting the defendant’s contention that it had not
committed “a tortious act” in Illinois [bolding added], the court invoked the traditional … rule
that “the place of a wrong is where the last event takes place which is necessary to render the
actor liable” and concluded that, since the “last event,” that is, the injury, had occurred in
Illinois, “the tort was committed in Illinois” for purposes of the jurisdictional statute.
We find this argument unconvincing. It certainly does not follow that, if the “place of
wrong” … is a particular state, the “place of the commission of a tortious act” is also that same
state for purposes of interpreting a statute conferring jurisdiction … over nonresidents. …
Moreover, the place of the “tort” is not necessarily the same as the place of the defendant’s
commission of the “tortious act.” In our view, then, the interpretation accorded the statute by the
Illinois court disregards its plain language and exceeds the bounds of sound statutory
construction.
Reading the New York statute, as we do, to require a showing that the nondomiciliary
committed a tortious act in this State, we need not pass upon the constitutional question raised by
the appellant or consider whether the due process requirement of “minimum contacts” with the
forum state would be satisfied by evidence that the injury occurred here and that the appellant
presumably knew that its product (the tank) might ultimately reach New York in the course of its
use by an interstate carrier or trucker [italics added].
In sum, then, it is our conclusion, based not only on the plain language of the statute but
on its legislative history, that paragraph 2 of subdivision (a) of section 302 covers only a tortious
act committed (by a nondomiciliary) in this State [as opposed to the effects thereof occurring g in
this state]. Any plea for further expansion of its scope, however desirable such expansion may
seem, is a matter for the Legislature rather than the courts. It follows, therefore, that, since the
tortious act charged against the appellant Darby was committed, if at all, in Kansas and … that
company transacted no business whatsoever in New York, no basis exists in the present case for
subjecting it to the jurisdiction of the courts of this State.
Singer v. Walker
The complaint alleges that in April of 1960 Michael Singer, then 10 years old and a
resident of this State, was seriously injured when a geologist’s hammer which he was using in
Connecticut broke and a chip penetrated his right eye. The hammer, it is further recited, was
manufactured by the appellant Estwing Manufacturing Co., an Illinois corporation not doing
business in this State. Bearing a label, “Unbreakable Tools Estwing Mfg. Co.,” the hammer was
shipped by the appellant, f. o. b. Illinois, to the defendant Walker, a dealer in geological supplies
in New York City. Michael’s aunt purchased the hammer from Walker and gave it to the child a
month or two before the accident which, as stated, occurred in Connecticut when the hammer
fragmented while the youngster, on a field trip with his father, was using it to break and split
rock.
Service of process on the appellant in an action brought in this State … was set aside on
the ground that it was not “doing business” in New York…. The present action was brought …
by service of the summons and complaint on Estwing in Illinois. Its motion to dismiss the
complaint on the ground that the court had not acquired personal jurisdiction was granted …
“[s]ince the tortious act complained of did not take place in this state or arise ... [from] any
transaction of business by defendant in this state.” The Appellate Division … taking a different
view, reversed “on the law” and denied the motion, holding that the cause of action was one
arising from the commission of a tortious act in the State under paragraph 2 of subdivision (a) of
section 302.
...
And we note again that we deal with the case in the light of the statutory provision as it actually
reads and not as it could, perhaps, have been written.
Manifestly, the tortious acts attributed to the appellant in the manufacture and labeling of
the hammer occurred at the place of manufacture in Illinois and, as in Feathers, are wholly
insufficient to satisfy the requirement of paragraph 2 that the “tortious act” be one committed
“within” this State. The Appellate Division, nevertheless, sustained jurisdiction on the theory
that Estwing’s “circulation” in New York of a hammer mislabeled as unbreakable—thereby
creating, as that court put it, a continuing condition of hazard wherever the article was sold—
itself constituted the commission of a tortious act here. We cannot accept this reasoning. The
mere fact that a product defectively manufactured and misleadingly labeled in one state is
marketed and sold in another cannot serve to change the place where the original tortious acts
were committed or to create a new tortious act. The tortious conduct charged to the appellant
consists solely of its acts in manufacturing an assertedly defective hammer and in attaching to it
a false label, both of which unquestionably took place in Illinois. Accordingly, as the trial judge
correctly concluded, jurisdiction cannot be sustained under paragraph 2.
However, the question remains whether jurisdiction may be upheld under paragraph 1 on
the ground that the appellant “transact[ed] ... business within the state” and that the pleaded
cause of action is one “arising” therefrom. It is clear that paragraph 1 is not limited to actions in
contract; it applies as well to actions in tort when supported by a sufficient showing of facts.
...
We hold [Longine v. Barnes] that the appellant’s activities in this State are sufficient to
satisfy the statutory criterion of transaction of business. ... [W]e do not deem it determinative, as
urged by the appellant, that the formal execution of its sales contracts may have occurred in
Illinois rather than New York. ... [T]he cause of action asserted is clearly one “arising from” the
purposeful activities engaged in by the appellant in this State in connection with the sale of its
products in the New York market.
In sum, then, the Appellate Division was in error in holding paragraph 2 applicable;
nevertheless, on the strength of paragraph 1, we affirm its order sustaining jurisdiction over the
appellant.
...
. . . …….....………………………………………
Notes and Questions:
1. See footnote 6. Is the court saying that the contractual provision—regarding New York
law governing this contract—resolves the issue of statutory applicability? Would that clause
more likely address any issue about constitutional minimum contacts?
2. See footnote 7. The Appellate Division (A.D.) answered the §302 question via the
minimum contacts test. The high court corrects the A.D.’s inappropriate merger. The primary
legal source—applied by all state and federal courts to assess minimum contacts—is the
Supreme Court case law interpretations of the federal Due Process clause. The other legal source,
for assessing the particular state’s ability to require a non-resident defendant to therein litigate, is
the forum state’s long-arm statute. As noted in Troma Entertainment, Inc. v. Centennial Pictures
Inc., 729 F.3d 215, 218 (2d Cir., 2013): “See §302(a)(3)(ii). That provision confers personal
jurisdiction over an individual who “commits a tortious act without the state causing injury to
person or property within the state.... [¶]It is well-settled that “residence or domicile of the
injured party within [New York] is not a sufficient predicate for jurisdiction” under section
302(a)(3) [which would suffice under federal due process analysis].
3. What long-arm statute does a federal judge use? See FRCP 4(k)(1)(A). The exception
to this general rule is found in 4(k)(2)(a). When would the exception apply? The leading case is
Omni Captital Int’l v. Rudolf Wolff & Co., 484 U.S. 97 (1987).
4. As of 1970, the California Legislature led the way for those states opting to jettison the
IPJ Step 1 long-arm statute process. To avoid satellite litigation regarding the state statutory
construction step, California enacted Code of Civil Procedure 410.10. As it provides: “A court of
this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this
state or of the United States.” California courts may thus proceed directly to what is, for other
states, Step 2—whether the defendant has minimum contacts with California. The state still has
some code-specific long-arm statutes. It’s Motor Vehicle Code, for example, reads almost
identically with the relevant Massachusetts 1920s Motor Vehicle Code provision in Hess v.
Palowski.
5. As Video 4 points out, there are two types of long-arm statute: (1) the traditional
category, usually containing multiple factual scenarios—whereby the D’s conduct must fit one or
more of them; and (2) the modern category, which extends a state’s personal jurisdiction to the
outer limits of federal Due Process, as defined by US Supreme Court case law. As succinctly
stated in Companion Property and Casualty Insurance Co. v. Palermo, 723 F.3d 557, at 559 (5th
Cir. 2013): “the exercise of personal jurisdiction over a non-resident defendant must comport
with both federal constitutional due process requirements and the long-arm statute of the state in
which the district court is located. Because Texas’s [category 2] long-arm statute extends to the
limits of federal constitutional due process, only one inquiry is required.”
MULLANE v. CENTRAL HANOVER BANK & TRUST CO.
United States Supreme Court
339 U.S. 306 (1950)
Mr. Justice Jackson delivered the [7-1] opinion of the Court.
This controversy questions the constitutional sufficiency of notice to beneficiaries on
judicial settlement of accounts by the trustee of a common trust fund…. The New York Court of
Appeals considered and overruled objections that the statutory [method of] notice contravenes
requirements of the Fourteenth Amendment and that … beneficiaries were [thus] deprived of
property without due process of law. …
Common trust fund legislation is addressed to a problem appropriate for state action.
Mounting overheads have made administration of small trusts undesirable to corporate trustees.
In order that donors and testators of moderately sized trusts may not be denied the service of
corporate fiduciaries, … some thirty states other than New York have permitted pooling small
trust estates into one fund for investment administration. … By this plan, diversification of risk
and economy of management can be extended to those whose capital standing alone would not
obtain such advantage.
Statutory authorization for the establishment of such common trust funds is provided in
the New York Banking Law. Under this Act a trust company may … establish a common fund
and, within prescribed limits, invest therein the assets of an unlimited number of estates, trusts or
other funds of which it is trustee. … [E]xclusive management and control is in the [local New
York] trust company as trustee, and neither a fiduciary nor any beneficiary of a participating trust
is deemed to have ownership in any particular asset or investment of this common fund. …
Provisions are made for accountings twelve to fifteen months after the establishment of a fund
and triennially thereafter. The decree in each such judicial settlement of accounts is made
binding and conclusive as to any matter set forth in the account upon everyone having any
interest in the common fund or in any participating estate, trust or fund.
Central Hanover Bank and Trust Company, 35 East 72nd Street, NYC, circa 1932
Source: <http://collections-static-1.mcny.org/Doc/MNY/Media/TR3/9/9/7/f/MNY324340.jpg>
Reprinted with permission of Wurts Bros. and the Collection of the Museum of the City of New York
In January, 1946, Central Hanover Bank and Trust Company established a common trust
fund in accordance with these provisions, and in March, 1947, it petitioned … for settlement of
its first account as common trustee. During the accounting period a total of 113 trusts …
participated in the common trust fund, the gross capital of which was nearly three million
dollars. The record does not show the number or residence of the beneficiaries, but they were
many and it is clear that some of them were not residents of the State of New York.
The only notice given beneficiaries of this specific application was by publication in a
local newspaper in strict compliance with the minimum requirements of [the] N.Y. Banking
Law: ‘After filing such petition (for judicial settlement of its account) the petitioner shall cause
to be issued by the court in which the petition is filed and shall publish not less than once in each
week for four successive weeks in a newspaper to be designated by the court a notice or citation
addressed generally without naming them to all parties interested in such common trust fund and
in such estates, trusts or funds mentioned in the petition, all of which may be described in the
notice or citation only in the manner set forth in said petition and without setting forth the
residence of any such decedent or donor of any such estate, trust or fund.’ Thus the only notice
required, and the only one given, was by [a local] newspaper publication setting forth merely the
name and address of the trust company, the name and the date of establishment of the common
trust fund, and a list of all participating estates, trusts or funds.
At the time the first investment in the common fund was made on behalf of each
participating estate, however, the trust company … had notified by mail each person … whose
name and address was then known to it and who was ‘entitled to share in the income therefrom
… (or) …who would be entitled to share in the principal if the event upon which such estate,
trust or fund will become distributable should have occurred at the time of sending such notice.’
Included in the notice was a copy of those provisions of the Act relating to the sending of the
notice itself and to the judicial settlement of common trust fund accounts.
Upon the filing of the petition for the settlement of accounts, appellant [Mullane] was, by
order of the court … appointed special guardian and attorney for all persons known or unknown
not otherwise appearing who had or might thereafter have any interest in the income of the
common trust fund; and appellee Vaughan was appointed to represent those similarly interested
in the principal. There were no other appearances on behalf of any one interested in either
interest or principal.
Appellant appeared specially, objecting that notice and the statutory provisions for notice
to beneficiaries were inadequate to afford due process under the Fourteenth Amendment, and
therefore that the court was without jurisdiction to render a final and binding decree. Appellant’s
objections were entertained and overruled, the Surrogate [trail court] holding that the notice
required and given was sufficient. A final decree accepting the accounts has been entered,
affirmed by the Appellate Division of the Supreme Court, and by the Court of Appeals of the
State of New York.
The effect of this decree, as held below, is to settle ‘all questions respecting the
management of the common fund.’ We understand that every right which beneficiaries would
otherwise have against the trust company, either as trustee of the common fund or as trustee of
any individual trust, for improper management of the common trust fund during the period
covered by the accounting is sealed and wholly terminated by the decree.
We are met at the outset with a challenge to the power of the State—the right of its courts
to adjudicate at all as against those beneficiaries who reside without the State of New York. It is
contended that the proceeding is one in personam in that the decree affects neither title to nor
possession of any res [thing], but adjudges only personal rights of the beneficiaries to surcharge
their trustee for negligenc or breach of trust. Accordingly, it is said, under the strict doctrine of
Pennoyer v. Neff, the Surrogate is without jurisdiction as to nonresidents upon whom personal
service of process was not made.
Distinctions between actions in rem [against D’s property] and those in personam are
ancient and originally expressed in procedural terms.… American courts have sometimes classed
certain actions as in rem because personal service of process was not required, and at other times
have held personal service of process not required because the action was in rem.
Judicial proceedings to settle fiduciary accounts have been sometimes termed in rem, or
… vaguely … ‘in the nature of a proceeding in rem.’ It is not readily apparent how the courts of
New York did or would classify the present proceeding, which has some characteristics and is
wanting in some features of proceedings both in rem and in personam. But in any event we think
that the requirements of the Fourteenth Amendment to the Federal Constitution do not depend
upon a classification for which the standards are so elusive and confused generally and which,
being primarily for state courts to define, may and do vary from state to state. Without
disparaging the usefulness of distinctions between actions in rem and those in personam in many
branches of law, or on other issues, or the reasoning which underlies them, we do not rest the
power of the State to resort to constructive service in this proceeding upon how its courts or this
Court may regard this historic antithesis. It is sufficient to observe that, whatever the technical
definition of its chosen procedure, the interest of each state in providing means to close trusts
that exist by the grace of its laws and are administered under the supervision of its courts is so
insistent and rooted in custom as to establish beyond doubt the right of its [state] courts to
determine the interests of all claimants, resident or nonresident, provided its procedure accords
full opportunity to appear and be heard.
Quite different from the question of a state’s power to discharge trustees [via account
settlement actions such as this one] is that of the opportunity it must give beneficiaries to contest.
Many controversies have raged about the cryptic and abstract words of the Due Process Clause
but there can be no doubt that at a minimum they require that deprivation of life, liberty or
property by adjudication be preceded by notice and opportunity for hearing appropriate to the
nature of the case.
In two ways this proceeding does or may deprive beneficiaries of property. It may cut off
their rights to have the trustee answer for negligent or illegal impairments of their interests. Also,
their interests are presumably subject to diminution in the proceeding by allowance of fees and
expenses to one who, in their names but without their knowledge, may conduct a fruitless or
uncompensatory contest. Certainly the proceeding is one in which they may be deprived of
property rights and hence notice and hearing must measure up to the standards of due process.
Personal service of written notice within the jurisdiction is the classic form of notice
always adequate in any type of proceeding. But the vital interest of the State in bringing any
issues as to its fiduciaries to a final settlement can be served only if interests or claims of
individuals who are outside of the State can somehow be determined. A construction of the Due
Process Clause which would place impossible or impractical obstacles in the way could not be
justified.
Against this interest of the State we must balance the individual interest sought to be
protected by the Fourteenth Amendment. This is defined by our holding that ‘The fundamental
requisite of due process of law is the opportunity to be heard.’ This right to be heard has little
reality or worth unless one is informed that the matter is pending and can choose for himself
whether to appear or default, acquiesce or contest.
The Court has not committed itself to any formula achieving a balance between these
interests in a particular proceeding or determining when constructive notice may be utilized or
what test it must meet. Personal service has not in all circumstances been regarded as
indispensable to the process due to residents, and it has more often been held unnecessary as to
nonresidents. We disturb none of the established rules on these subjects. No decision constitutes
a controlling or even a very illuminating precedent for the case before us. But a few general
principles stand out in the books.
An elementary and fundamental requirement of due process in any proceeding which is
to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity to present their
objections. The notice must be of such nature as reasonably to convey the required information,
and it must afford a reasonable time for those interested to make their appearance. But if with
due regard for the practicalities and peculiarities of the case these conditions are reasonably met
the constitutional requirements are satisfied. ‘The criterion is not the possibility of conceivable
injury, but the just and reasonable character of the requirements, having reference to the subject
with which the statute deals.’
But when notice is a person’s due, process which is a mere gesture is not due process.
The means employed must be such as one desirous of actually informing the absentee might
reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of
any chosen method may be defended on the ground that it is in itself reasonably certain to inform
those affected, or, where conditions do not reasonably permit such notice, that the form chosen is
not substantially less likely to bring home notice than other of the feasible and customary
substitutes.
It would be idle to pretend that publication alone as prescribed here, is a reliable means of
acquainting interested parties of the fact that their rights are before the courts. It is not an
accident that the greater number of cases reaching this Court on the question of adequacy of
notice have been concerned with actions founded on process constructively served through local
newspapers. Chance alone brings to the attention of even a local resident an advertisement in
small type inserted in the back pages of a newspaper, and if he makes his home outside the area
of the newspaper’s normal circulation the odds that the information will never reach him are
large indeed. The chance of actual notice is further reduced when as here the notice required
does not even name those whose attention it is supposed to attract, and does not inform
acquaintances who might call it to attention. In weighing its sufficiency on the basis of
equivalence with actual notice we are unable to regard this as more than a feint.
...
In the case before us … these beneficiaries do have a resident fiduciary as caretaker of
their interest in this property. But it is their caretaker [C.H.T.] who in the accounting becomes
their adversary. Their trustee is released from giving notice of jeopardy, and no one else is
expected to do so. …
This Court has not hesitated to approve of resort to publication as a customary substitute
in another class of cases where it is not reasonably possible or practicable to give more adequate
warning. Thus it has been recognized that, in the case of persons missing or unknown,
employment of an indirect and even a probably futile means of notification is all that the
situation permits and creates no constitutional bar to a final decree foreclosing their rights.
Those beneficiaries represented by appellant whose interests or whereabouts could not
with due diligence be ascertained come clearly within this category. As to them the statutory
notice is sufficient. However great the odds that publication will never reach the eyes of such
unknown parties, it is not in the typical case much more likely to fail than any of the choices
open to legislators endeavoring to prescribe the best notice practicable.
Nor do we consider it unreasonable for the State to dispense with more certain notice to
those beneficiaries whose interests are either conjectural or future or, although they could be
discovered upon investigation, do not in due course of business come to knowledge of the
common trustee. Whatever searches might be required in another situation under ordinary
standards of diligence, in view of the character of the proceedings and the nature of the interests
here involved we think them unnecessary. We recognize the practical difficulties and costs that
would be attendant on frequent investigations into the status of great numbers of beneficiaries,
many of whose interests in the common fund are so remote as to be ephemeral; and we have no
doubt that such impracticable and extended searches are not required in the name of due process.
The expense of keeping informed from day to day of substitutions among even current income
beneficiaries and presumptive remaindermen, to say nothing of the far greater number of
contingent beneficiaries, would impose a severe burden on the plan, and would likely dissipate
its advantages. These are practical matters in which we should be reluctant to disturb the
judgment of the state authorities.
Accordingly we overrule appellant’s constitutional objections to published notice insofar
as they are urged on behalf of any beneficiaries whose interests or addresses are unknown to the
trustee.
As to known present beneficiaries of known place of residence, however, notice by
publication stands on a different footing. Exceptions in the name of necessity do not sweep away
the rule that within the limits of practicability notice must be such as is reasonably calculated to
reach interested parties. Where the names and post office addresses of those affected by a
proceeding are at hand, the reasons disappear for resort to means less likely than the mails to
apprise them of its pendency.
...
This type of trust presupposes a large number of small interests. The individual interest does not
stand alone but is identical with that of a class. The rights of each in the integrity of the fund and
the fidelity of the trustee are shared by many other beneficiaries. Therefore notice reasonably
certain to reach most of those interested in objecting is likely to safeguard the interests of all,
since any objections sustained would inure to the benefit of all. We think that under such
circumstances reasonable risks that notice might not actually reach every beneficiary are
justifiable. ‘Now and then an extraordinary case may turn up, but constitutional law, like other
mortal contrivances, has to take some chances, and in the great majority of instances, no doubt,
justice will be done.’
The statutory [constructive] notice to known beneficiaries is inadequate, not because in
fact it fails to reach everyone, but because under the circumstances it is not reasonably calculated
to reach those who could easily be informed by other means at hand. However it may have been
in former times, the mails today are recognized as an efficient and inexpensive means of
communication. Moreover, the fact that the trust company has been able to give mailed notice to
known beneficiaries at the time the common trust fund was established is persuasive that postal
notification at the time of accounting would not seriously burden the plan.
...
We hold the notice of judicial settlement of accounts required by the New York Banking
Law [notice by publication as to all beneficiaries] is incompatible with the requirements of the
Fourteenth Amendment as a basis for adjudication depriving known persons whose whereabouts
are also known of substantial property rights. Accordingly the judgment is reversed and the
cause remanded for further proceedings not inconsistent with this opinion.
Reversed.
...
Mr. Justice Burton, dissenting.
… Whether or not further notice to beneficiaries should supplement the notice and
representation here provided is properly within the discretion of the State. The Federal
Constitution[’s Due Process Clause] does not require it here.
Notes and Questions:……………………………………….
1. Mullane and Vaughn represented the various trust beneficiaries. They were all named
as defendants in this case. Did they allegedly do anything wrong? Alternatively, did they have to
be aligned that way by the plaintiff trust company, when seeking its accounting decree? As
suggested in Video #1, do not assume who is P or D by the name of the case. Further, do not
assume that a named D is always a wrongdoer.
2. The Court’s reference to in rem jurisdiction was first addressed—ever so briefly—in
Pennoyer. We will focus on this territorial jurisdiction category in our next class. For now, the
essential point is that when a case can be characterized as in rem, as opposed to in personam,
notice by publication is often (but not always) characterized as constitutionally sufficient. What
would this difference mean, in terms of cost of notice?
3. What are the best and worst forms of notice (of the three described in Video #4)? One
of those methods is “substituted service.” Under FRCP 4(e)(2)(B), service may be accomplished
by “leaving a copy of each at the individual’s dwelling or usual place of abode with someone of
suitable age and discretion who resides there....” This might be characterized as “spouse in the
house” service. The target defendant wife is not home; but the process server hands the summons
and complaint for her to her husband who is home (and mails a copy of the process to that
address).
There are other valid methods of service. They include:
• mailed service—whereby U.S. Post Office delivery personnel can effectively be
process servers, and D responds by acknowledging service (or otherwise pays the cost of P’s
process server laying in wait at D’s home or workplace) per FRCP 4(e)(2);
• service on an agent—per FRCP 4(h), and the following Day 6 National Equipment
case; or
• service under state law—where the federal court is located or where service is made
(in the U.S.), per FRCP 4(e)(1).
4. The Court notes that “beneficiaries represented by appellant whose interests or
whereabouts could not with due diligence be ascertained.” What does this phrase mean? Given
this dilemma, the Court could have characterized the case as to require personal notice; e.g., a
mailed letter to all beneficiaries, which would resemble personal notice. What impact would that
have on the trust investment system? ............................................................................................
5. One of the adversaries claims this case is exclusively in personam in nature. The other
claims its nature is entirely in rem. How does the US Supreme Court majority rule on this
distinction?
FUENTES V. SHEVIN
United States Supreme Court
407 U.S. 67 (1972)
Mr. Justice Stewart delivered the [4-3] opinion of the Court.
We here review the decisions … that upheld the constitutionality of Florida and
Pennsylvania laws authorizing the summary seizure of goods or chattels in a person’s possession
under a writ of replevin. Both statutes provide for the issuance of writs ordering state agents to
seize a person’s possessions, simply upon the ex parte application of any other person who
claims a right to them and posts a security bond. Neither statute provides for notice to be given to
the possessor of the property [of the pre-seizure determination], and neither statute gives the
possessor an opportunity to challenge the seizure at any kind of prior hearing. The question is
whether these statutory procedures violate the Fourteenth Amendment’s guarantee that no State
shall deprive any person of property without due process of law.
I
The appellant … Margarita Fuentes, is a resident of Florida. She purchased a gas stove
and service policy from the Firestone Tire and Rubber Co. (Firestone) under a conditional sales
contract calling for monthly payments over a period of time. A few months later, she purchased a
stereophonic phonograph from the same company under the same sort of contract. The total cost
of the stove and stereo was about $500, plus an additional financing charge of over $100. Under
the contracts, Firestone retained title to the merchandise, but Mrs. Fuentes was entitled to
possession unless and until she should default on her installment payments.
For more than a year, Mrs. Fuentes made her installment payments. But then, with only
about $200 remaining to be paid, a dispute developed between her and Firestone over the
servicing of the stove. Firestone instituted an action in a small-claims court for repossession of
both the stove and the stero, claiming that Mrs. Fuentes had refused to make her remaining
payments. Simultaneously with the filing of that action and before Mrs. Fuentes had even
received a summons to answer its complaint, Firestone obtained a writ of replevin ordering a
sheriff to seize the disputed goods at once.
In conformance with Florida procedure, Firestone had only to fill in the blanks on the
appropriate form documents and submit them to the clerk of the small-claims court. The clerk
signed and stamped the documents and issued a writ of replevin. Later the same day, a local
deputy sheriff and an agent of Firestone went to Mrs. Fuentes’ home and seized the stove and
stereo.
Shortly thereafter, Mrs. Fuentes instituted the present action in a federal district court,
challenging the constitutionality of the Florida prejudgment replevin procedures under the Due
Process Clause of the Fourteenth Amendment. She sought declaratory and injunctive relief
against continued enforcement of the procedural provisions of the state statutes that authorize
prejudgment replevin.
The appellants in … a very similar action in a federal district court in Pennsylvania,
challenging the constitutionality of that State’s prejudgment replevin process. …
… The courts in both cases upheld the constitutionality of the statutes.
II
...
Thus, at the same moment that the defendant receives the complaint seeking repossession
of property through court action, the property is seized from him. He is provided no prior notice
and allowed no opportunity whatever to challenge the issuance of the writ. After the property has
been seized, he will eventually have an opportunity for a hearing, as the defendant in the trial of
the court action for repossession, which the plaintiff is required to pursue. …
The Pennsylvania law differs, though not in its essential nature, from that of Florida. …
Unlike the Florida statute, however, the Pennsylvania law does not require that there ever be
opportunity for a hearing on the merits of the conflicting claims to possession of the replevied
property. The party seeking the writ is not obliged to initiate a court action for repossession.
Indeed, he need not even formally allege that he is lawfully entitled to the property. The most
that is required is that he file an ‘affidavit of the value of the property to be replevied.’ If the
party who loses property through replevin seizure is to get even a post-seizure hearing, he must
initiate a lawsuit himself. He may also, as under Florida law, post his own counterbond within
three days after the seizure to regain possession.
...
IV
For more than a century the central meaning of procedural due process has been clear:
‘Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy
that right they must first be notified.’ It is equally fundamental that the right to notice and an
opportunity to be heard ‘must be granted at a meaningful time and in a meaningful manner.’
The primary question in the present cases is whether these state statutes are
constitutionally defective in failing to provide for hearings ‘at a meaningful time.’ … [N]either
the Florida nor the Pennsylvania statute provides for notice or an opportunity to be heard before
the seizure. The issue is whether procedural due process in the context of these cases requires an
opportunity for a hearing before the State authorizes its agents to seize property in the possession
of a person upon the application of another.
The constitutional right to be heard is a basic aspect of the duty of government to follow
a fair process of decisionmaking when it acts to deprive a person of his possessions. The purpose
of this requirement is not only to ensure abstract fair play to the individual. Its purpose, more
particularly, is to protect his use and possession of property from arbitrary encroachment—to
minimize substantively unfair or mistaken deprivations of property, a danger that is especially
great when the State seizes goods simply upon the application of and for the benefit of a private
party. So viewed, the prohibition against the deprivation of property without due process of law
reflects the high value, embedded in our constitutional and political history, that we place on a
person’s right to enjoy what is his, free of governmental interference.
The requirement of notice and an opportunity to be heard raises no impenetrable barrier
to the taking of a person’s possessions. But the fair process of decision making that it guarantees
works, by itself, to protect against arbitrary deprivation of property. For when a person has an
opportunity to speak up in his own defense, and when the State must listen to what he has to say,
substantively unfair and simply mistaken deprivations of property interests can be prevented. It
has long been recognized that ‘fairness can rarely be obtained by secret, one-sided determination
of facts decisive of rights. ... (And n)o better instrument has been devised for arriving at truth
than to give a person in jeopardy of serious loss notice of the case against him and opportunity to
meet it.’
If the right to notice and a hearing is to serve its full purpose, then, it is clear that it must
be granted at a time when the deprivation can still be prevented. At a later hearing, an
individual's possessions can be returned to him if they were unfairly or mistakenly taken in the
first place. Damages may even be awarded to him for the wrongful deprivation. But no later
hearing and no damage award can undo the fact that the arbitrary taking that was subject to the
right of procedural due process has already occurred. ‘This Court has not ... embraced the
general proposition that a wrong may be done if it can be undone.’
...
‘That the hearing required by due process is subject to waiver, and is not fixed in form does not
affect its root requirement that an individual be given an opportunity for a hearing before he is
deprived of any significant property interest, except for extraordinary situations where some
valid governmental interest is at stake that justifies postponing the hearing until after the event.’
The Florida and Pennsylvania prejudgment replevin statutes fly in the face of this
principle. To be sure, the requirements that a party seeking a writ must first post a bond, allege
conclusorily that he is entitled to specific goods, and open himself to possible liability in
damages if he is wrong, serve to deter wholly unfounded applications for a writ. But those
requirements are hardly a substitute for a prior hearing, for they test no more than the strength of
the applicant's own belief in his rights.13 Since his private gain is at stake, the danger is all too
great that his confidence in his cause will be misplaced. Lawyers and judges are familiar with the
phenomenon of a party mistakenly but firmly convinced that his view of the facts and law will
prevail, and therefore quite willing to risk the costs of litigation. Because of the understandable,
self-interested fallibility of litigants, a court does not decide a dispute until it has had an
opportunity to hear both sides-and does not generally take even tentative action until it has itself
examined the support for the plaintiff's position. The Florida and Pennsylvania statutes do not
even require the official issuing a writ of replevin to do that much.
The minimal deterrent effect of a bond requirement is, in a practical sense, no substitute
for an informed evaluation by a neutral official. More specifically, as a matter of constitutional
principle, it is no replacement for the right to a prior hearing that is the only truly effective
safeguard against arbitrary deprivation of property. While the existence of these other, less
effective, safeguards may be among the considerations that affect the form of hearing demanded
by due process, they are far from enough by themselves to obviate the right to a prior hearing of
some kind.
V
The right to a prior hearing, of course, attaches only to the deprivation of an interest
encompassed within the Fourteenth Amendment’s protection. …
A
A deprivation of a person’s possessions under a prejudgment writ of replevin, at least in theory,
may be only temporary. …………………………………………………………………………..
...
When officials of Florida or Pennsylvania seize one piece of property from a person’s possession
and then agree to return it if he surrenders another, they deprive him of property whether or not
he has the funds, the knowledge, and the time needed to take advantage of the recovery
provision. The Fourteenth Amendment draws no bright lines around three-day, 10-day or 50-day
deprivations of property. Any significant taking of property by the State is within the purview of
the Due Process Clause. While the length and consequent severity of a deprivation may be
another factor to weigh in determining the appropriate form of hearing, it is not decisive of the
basic right to a prior hearing of some kind.
B
The appellants who signed conditional sales contracts lacked full legal title to the
replevied goods. The Fourteenth Amendment’s protection of ‘property,’ however, has never been
interpreted to safeguard only the rights of undisputed ownership. Rather, it has been read broadly
to extend protection to ‘any significant property interest’….
The appellants were deprived of such an interest in the replevied goods—the interest in
continued possession and use of the goods. They had acquired this interest under the conditional
sales contracts that entitled them to possession and use of the chattels before transfer of title. In
exchange for immediate possession, the appellants had agreed to pay a major financing charge
beyond the basic price of the merchandise. Moreover, by the time the goods were summarily
repossessed, they had made substantial installment payments. Clearly, their possessory interest in
13
They may not even test that much. For if an applicant for the writ knows that he is dealing with an
uneducated, uniformed consumer with little access to legal help and little familiarity with legal procedures, there
may be a substantial possibility that a summary seizure of property—however unwarranted—may go unchallenged,
and the applicant may feel that he can act with impunity. …………………………………………………………….
the goods, dearly bought and protected by contract, was sufficient to invoke the protection of the
Due Process Clause.
… But even assuming that the appellants had fallen behind in their installment payments,
and that they had no other valid defenses, that is immaterial here. The right to be heard does not
depend upon an advance showing that one will surely prevail at the hearing. … It is enough to
invoke the procedural safeguards of the Fourteenth Amendment that a significant property
interest is at stake, whatever the ultimate outcome of a hearing on the contractual right to
continued possession and use of the goods.
C
Nevertheless, the District Courts rejected the appellants’ constitutional claim on the ground that
the goods seized from them—a stove, a stereo, a table, a bed, and so forth—were not deserving
of due process protection, since they were not absolute necessities of life. The courts based this
holding on a very narrow reading of Sniadach v. Family Finance Corp., and Goldberg v. Kelly,
in which this Court held that the Constitution requires a hearing before prejudgment wage
garnishment and before the termination of certain welfare benefits [italics added]. They reasoned
that Sniadach and Goldberg, as a matter of constitutional principle, established no more than that
a prior hearing is required with respect to the deprivation of such basically ‘necessary’ items as
wages and welfare benefits.
This reading of Sniadach and Goldberg reflects the premise that those cases marked a
radical departure from established principles of procedural due process. They did not. Both
decisions were in the mainstream of past cases, having little or nothing to do with the absolute
‘necessities’ of life but establishing that due process requires an opportunity for a hearing before
a deprivation of property takes effect. In none of those cases did the court hold that this most
basic due process requirement is limited to the protection of only a few types of property
interests. While Sniadach and Goldberg emphasized the special importance of wages and
welfare benefits, they did not convert that emphasis into a new and more limited constitutional
doctrine.
Nor did they carve out a rule of ‘necessity’ for the sort of nonfinal deprivations of
property that they involved. …
The household goods, for which the appellants contracted and paid substantial sums, are
deserving of similar protection.
...
VI
There are ‘extraordinary situations’ that justify postponing notice and opportunity for a
hearing. These situations, however, must be truly unusual. Only in a few limited situations has
this Court allowed outright seizure without opportunity for a prior hearing. First, in each case,
the seizure has been directly necessary to secure an important governmental or general public
interest. Second, there has been a special need for very prompt action. Third, the State has kept
strict control over its monopoly of legitimate force; the person initiating the seizure has been a
government official responsible for determining, under the standards of a narrowly drawn statute,
that it was necessary and justified in the particular instance. Thus, the Court has allowed
summary seizure of property to collect the internal revenue of the United States, to meet the
needs of a national war effort, to protect against the economic disaster of a bank failure, and to
protect the public from misbranded drugs and contaminated food.
...
Nor do the broadly drawn Florida and Pennsylvania statutes limit the summary seizure of
goods to special situations demanding prompt action. There may be cases in which a creditor
could make a showing of immediate danger that a debtor will destroy or conceal disputed goods.
But the statutes before us are not ‘narrowly drawn to meet any such unusual condition.’ And no
such unusual situation is presented by the facts of these cases.
...
VII
Finally, we must consider the contention that the appellants who signed conditional sales
contracts thereby waived their basic procedural due process rights. The contract signed by Mrs.
Fuentes provided that ‘in the event of default of any payment or payments, Seller at its option
may take back the merchandise....’ The contracts signed by the Pennsylvania appellants similarly
provided that the seller ‘may retake’ or ‘repossess’ the merchandise in the event of a ‘default in
any payment.’ These terms were parts of printed form contracts, appearing in relatively small
type and unaccompanied by any explanations clarifying their meaning.
...
There was no bargaining over contractual terms between the parties who, in any event, were far
from equal in bargaining power. The purported waiver provision was a printed part of a form
sales contract and a necessary condition of the sale. The appellees made no showing whatever
that the appellants were actually aware or made aware of the significance of the fine print now
relied upon as a waiver of constitutional rights.
...
The conditional sales contracts here … did not indicate how or through what process—a
final judgment, self-help, prejudgment replevin with a prior hearing, or prejudgment replevin
without a prior hearing—the seller could take back the goods. Rather, the purported waiver
provisions here are no more than a statement of the seller’s right to repossession upon occurrence
of certain events. … [T]he language of the purported waiver provisions did not waive the
appellants’ constitutional right to a preseizure hearing of some kind.
VIII
We hold that 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. Our holding, however, is a
narrow one. We do not question the power of a State to seize goods before a final judgment in
order to protect the security interests of creditors so long as those creditors have tested their
claim to the goods through the process of a fair prior hearing. The nature and form of such prior
hearings, moreover, are legitimately open to many potential variations and are a subject, at this
point, for legislation—not adjudication.33 Since the essential reason for the requirement of a prior
hearing is to prevent unfair and mistaken deprivations of property, however, it is axiomatic that
the hearing must provide a real test. ‘(D)ue process is afforded only by the kinds of ‘notice’ and
‘hearing’ that are aimed at establishing the validity, or at least the probable validity, of the
underlying claim against the alleged debtor before he can be deprived of his property....’
For the foregoing reasons, the judgments [below] … are vacated and these cases are
remanded for further proceedings consistent with this opinion.
33
Leeway remains to develop a form of hearing that will minimize unnecessary cost and delay while
preserving the fairness and effectiveness of the hearing in preventing seizures of goods where the party seeking the
writ has little probability of succeeding on the merits of the dispute. ……………………………………………….
It is so ordered.
Vacated and remanded.
...
Mr. Justice White, with whom The Chief Justice and Mr. Justice Blackmun join,
dissenting.
...
In considering whether this resolution of conflicting interests is unconstitutional, much
depends on one’s perceptions of the practical considerations involved. The Court holds it
constitutionally essential to afford opportunity for a probable-cause hearing prior to repossession.
Its stated purpose is ‘to prevent unfair and mistaken deprivations of property.’ But in these
typical situations, the buyer-debtor has either defaulted or he has not. If there is a default, it
would seem not only ‘fair,’ but essential, that the creditor be allowed to repossess; and I cannot
say that the likelihood of a mistaken claim of default is sufficiently real or recurring to justify a
broad constitutional requirement that a creditor do more than the typical state law requires and
permits him to do. Sellers are normally in the business of selling and collecting the price for their
merchandise. I could be quite wrong, but it would not seem in the creditor’s interest for a default
occasioning repossession to occur; as a practical matter it would much better serve his interests if
the transaction goes forward and is completed as planned. Dollar-and-cents considerations weigh
heavily against false claims of default as well as against precipitate action that would allow no
opportunity for mistakes to surface and be corrected. Nor does it seem to me that creditors would
lightly undertake the expense of instituting replevin actions and putting up bonds.
… I would not construe the Due Process Clause to require the creditors to do more than
they have done in these cases to secure possession pending final hearing. Certainly, I would not
ignore, as the Court does, the creditor’s interest in preventing further use and deterioration of the
property in which he has substantial interest. Surely under the Court’s own definition, the
creditor has a ‘property’ interest as deserving of protection as that of the debtor. At least the
debtor, who is very likely uninterested in a speedy resolution that could terminate his use of the
property, should be required to make those payments, into court or otherwise, upon which his
right to possession is conditioned.
...
… I am content to rest on the judgment of those who have wrestled with these problems
so long and often and upon the judgment of the legislatures that have considered and so recently
adopted provisions that contemplate precisely what has happened in these cases. …………..
Notes and Questions:
1. Per the Court’s first paragraph: “The question is whether these statutory procedures
violate the Fourteenth Amendment’s guarantee that no State shall deprive any person of property
without due process of law.” Mullane dealt with the same general issue. Mullane and Fuentes
deal with different subsets of the above-quoted constitutional protection (neither of which is
mentioned in the Fourteenth Amendment). What related but discrete issues do these two cases
address?
2. Prior cases you have studied also dealt with federal constitutional Due Process (e.g.,
Shoe). How does the issue presented in this unit (Mullane and Fuentes) differ?
3. In perhaps most cases, the installment sale property’s possessor has no defense (other
than poverty). What purpose is served by requiring the seller to provide pre-seizure notice of an
intended seizure hearing?
4. The Court’s precedents (Sniadach and Goldberg) held that the Constitution requires a
hearing before prejudgment wage garnishment or before termination of welfare benefits. Should
Ms. Fuentes’ household goods be entitled to the same protection as these two necessities of life?
NATIONAL EQUIPMENT RENTAL V. SZUKHENT
United States Supreme Court
375 U.S. 311 (1964)
Mr. Justice Stewart delivered the [5-4] opinion of the Court.
The Federal Rules of Civil Procedure provide that service of process upon an individual
may be made ‘by delivering a copy of the summons and of the complaint to an agent authorized
by appointment ... to receive service of process.’ The petitioner is a corporation with its principal
place of business in New York. It sued the respondents, residents of Michigan, in a New York
federal court, claiming that the respondents had defaulted under a farm equipment lease. The
only question now before us is whether the person upon whom the summons and complaint were
served was ‘an agent authorized by appointment’ to receive the same, so as to subject the
respondents to the jurisdiction of the federal court in New York.
The respondents obtained certain farm equipment from the petitioner under a lease
executed in 1961. The lease … provided that ‘the Lessee hereby designates Florence Weinberg,
47-21 Forty-first Street, Long Island City, N.Y., as agent for the purpose of accepting service of
any process within the State of New York.’ The respondents were not acquainted with Florence
Weinberg.
In 1962 the petitioner commenced the present action by filing in the federal court in New
York a complaint which alleged that the respondents had failed to make any of the periodic
payments specified by the lease. The Marshal delivered two copies of the summons and
complaint to Florence Weinberg. That same day she mailed the summons and complaint to the
respondents, together with a letter stating that the documents had been served upon her as the
respondents’ agent for the purpose of accepting service of process in New York, in accordance
with the agreement contained in the lease.4 The petitioner itself also notified the respondents by
certified mail of the service of process upon Florence Weinberg.
Upon motion of the respondents, the District Court quashed service of the summons and
complaint, holding that, although Florence Weinberg had promptly notified the respondents of
the service of process and mailed copies of the summons and complaint to them, the lease
agreement itself had not explicitly required her to do so, and there was therefore a ‘failure of the
agency arrangement to achieve intrinsic and continuing reality.’ The Court of Appeals affirmed,
and we granted certiorari. For the reasons stated in this opinion, we have concluded that Florence
Weinberg was ‘an agent authorized by appointment ... to receive service of process,’ and
accordingly we reverse the judgment before us.
We need not and do not in this case reach the situation where no personal notice has been
given to the defendant. Since the respondents did in fact receive complete and timely notice of
the lawsuit pending against them, no due process claim has been made. The case before us is
therefore quite different from cases where there was no actual notice. … The question presented
here … is whether a party to a private contract may appoint an agent to receive service of process
within the meaning of Federal Rule of Civil Procedure 4(d)(1), where the agent is not personally
known to the party, and where the agent has not expressly undertaken to transmit notice to the
party.
The purpose underlying the contractual provision here at issue seems clear. The clause
was inserted by the petitioner and agreed to by the respondents in order to assure that any
litigation under the lease should be conducted in the State of New York. The contract specifically
provided that ‘This agreement shall be deemed to have been made in Nassau County, New York,
regardless of the order in which the signatures of the parties shall be affixed hereto, and shall be
interpreted, and the rights and liabilities of the parties here determined, in accordance with the
laws of the State of New York.’ …
Under well-settled general principles of the law of agency Florence Weinberg’s prompt
acceptance and transmittal to the respondents of the summons and complaint pursuant to the
authorization was itself sufficient to validate the agency, even though there was no explicit
previous promise on her part to do so. …
4
The complaint, summons, and covering letter were sent by certified mail, and the letter read as follows:
‘Gentlemen:‘Please take notice that the enclosed Summons and Complaint was duly served upon me this day by the
United States Marshal, as your agent for the purpose of accepting service of process within the State of New York,
in accordance with your contract with National Equipment Rental, Ltd.’ Very truly yours, ‘Florence Weinberg’
We deal here with a Federal Rule, applicable to federal courts in all 50 States. But even if
we were to assume that this uniform federal standard should give way to contrary local policies,
there is no relevant concept of state law which would invalidate the agency here at issue. In
Michigan, where the respondents reside, the statute which validates service of process under the
circumstances present in this case contains no provision requiring that the appointed agent
expressly undertake to notify the principal of the service of process. Similarly, New York law,
which it was agreed should be applicable to the lease provisions, does not require any such
express promise by the agent in order to create a valid agency for receipt of process. The New
York statutory short form of general power of attorney, which specifically includes the power to
accept service of process, is entirely silent as to any such requirement. Indeed, the identical
contractual provision at issue here has been held by a New York court to create a valid agency
for service of process under the law of that State.
It is argued, finally, that the agency sought to be created in this case was invalid because
Florence Weinberg may have had a conflict of interest. This argument is based upon the fact that
she was not personally known to the respondents at the time of her appointment and upon a
suggestion in the record that she may be related to an officer of the petitioner corporation. But
such a contention ignores the narrowly limited nature of the agency here involved. Florence
Weinberg was appointed the respondents’ agent for the single purpose of receiving service of
process. An agent with authority so limited can in no meaningful sense be deemed to have had an
interest antagonistic to the respondents, since both the petitioner and the respondents had an
equal interest in assuring that, in the event of litigation, the latter be given that adequate and
timely notice which is a prerequisite to a valid judgment.9
A different case would be presented if Florence Weinberg had not given prompt notice to
the respondents, for then the claim might well be made that her failure to do so had operated to
invalidate the agency. We hold only that, prompt notice to the respondents having been given,
Florence Weinberg was their ‘agent authorized by appointment’ to receive process within the
meaning of Federal Rule of Civil Procedure 4(d)(1).
The judgment of the Court of Appeals is reversed and the case is remanded for further
proceedings consistent with this opinion. It is so ordered.
Judgment of Court of Appeals reversed and case remanded.
Mr. Justice Black, dissenting.
The petitioner, National Equipment Rental … does a nationwide equipment rental
business. The respondents, Steve and Robert Szukhent, father and son farming in Michigan,
leased from National two incubators for their farm, signing in Michigan a lease contract which
was a standard printed form obviously prepared by the New York company’s lawyers. Included
in the 18 paragraphs of fine print was the following provision:
… the Lessee hereby designates Florence Weinberg, 47-21 Forty-first Street,
Long Island City, N.Y., as agent for the purpose of accepting service of any process
within the State of New York.
9
There is no allegation that Weinberg had any pecuniary interest in the subject matter of the litigation. Nor
is the issue here the applicability of a statute which permits service on a foreign corporation by service on persons
who are generally authorized to act as agents of the corporation, when the agent upon whom service is made has a
personal interest in suppressing notice of service….
… Process was served on Mrs. Weinberg as ‘agent’ of the Michigan farmers. She mailed
notice of this service to the Szukhents. A New York lawyer appeared especially for them and
moved to quash the service on the ground that Mrs. Weinberg was not their agent but was in
reality the agent of the New York company.
The record on the motion to quash shows that the Szukhents had never had any dealings
with Mrs. Weinberg, their supposed agent. They had never met, seen, or heard of her. She did
not sign the lease, was not a party to it, received no compensation from the Szukhents, and
undertook no obligation to them. In fact, she was handpicked by the New York company to
accept service of process in any suits that might thereafter be filed by the company. Only after
this suit was brought was it reluctantly revealed that Mrs. Weinberg was in truth the wife of one
of the company’s officers. The district judge, applying New York law to these facts, held that
there had been no effective appointment of Mrs. Weinberg as agent of the Szukhents, that the
service on her as their ‘agent’ was therefore invalid, and that the service should be quashed. The
Court of Appeals, one judge dissenting, affirmed, agreeing that no valid agency had been
created.1 This Court now reverses both courts below and holds that the contractual provision
purporting to appoint Mrs. Weinberg as agent is valid and that service of process on her as agent
was therefore valid and effective under Rule 4(d)(1) as on an ‘agent authorized by appointment
... to receive service of process.’ I disagree with that holding, believing that (1) whether Mrs.
Weinberg was a valid agent upon whom service could validly be effected under Rule 4(d)(1)
should be determined under New York law and that we should accept the holdings of the federal
district judge and the Court of Appeals sitting in New York that under that State’s law the
purported appointment of Mrs. Weinberg was invalid and ineffective; (2) if however, Rule
4(d)(1) is to be read as calling upon us to formulate a new federal definition of agency for
purposes of service of process, I think our formulation should exclude Mrs. Weinberg from the
category of an ‘agent authorized by appointment … to receive service of process;’ and (3)
upholding service of process in this case raises serious questions as to whether these Michigan
farmers have been denied due process of law in violation of the Fifth and Fourteenth
Amendments.
I.
No federal statute has undertaken to regulate the sort of agency transaction here involved.
There is only Rule 4(d)(1), which says nothing more than that in federal courts personal
jurisdiction may be obtained by service on an ‘agent.’ The Rule does not attempt to define who is
an ‘agent.’ To me it is evident that the draftsmen of the Rules did not, by using the word ‘agent,’
show any intention of throwing out the traditional body of state law and creating a new and
different federal doctrine in this branch of the law of agency. Therefore, it is to the law of New
York-the State where this action was brought in federal court, the place where the contract was
deemed by the parties to have been made, and the State the law of which was specified as
determining rights and liabilities under the contract—that we should turn to test the validity of
the appointment.
I agree with the district judge that this agency is invalid under the laws of New York. The
highest state court that has passed on the question has held that, because of New York statutes,
the designation by a nonresident of New York of an agent to receive service of process is
ineffective.... Also, we should accept the view of the question taken by the federal courts sitting
1
Both the District Court and the Court of Appeals also rested their decisions on the contract's lack of
provision for notice of the service of process.
in the State whose law is being applied unless we are shown ‘clearly and convincingly’ that these
courts erred. Here there is no showing that the Court of Appeals—where neither the majority nor
the dissenter disputed the District Court's view of New York law—has erred.7
II.
...
A.
In the first place, we should interpret the federal rule as contemplating a genuine agent,
not a sham. Here the ‘agent,’ Mrs. Weinberg, was unknown to respondents. She was chosen by
the New York company, was under its supervision, and, indeed, was the wife of one of its
officers—facts no one ever told these farmers.9 State courts in general quite properly refuse to
uphold service of process on an agent who, though otherwise competent, has interests
antagonistic to those of the person he is meant to represent. … I cannot believe that Rule 4(d)(1),
which may under some circumstances be used to subject people to jurisdiction thousands of
miles from home, was ever meant to bring a defendant into court by allowing service on an
‘agent’ whose true loyalty is not to the person being sued but to the one bringing suit. The
Canons of Ethics forbid a lawyer to serve conflicting parties, at least without express consent
given after full disclosure. If we are to create a federal standard, I would hold a 4(d) (1) agent to
a like duty. … It is true that actual notice was given. But there is a prophylactic value, especially
where contracts of this kind can in future cases be used to impose on a nonresident defendant, in
requiring that the contract provide for notice in the first place. …
B.
... The right to have a case tried locally and be spared the likely injustice of having to
litigate in a distant or burdensome forum is as ancient as the Magna Charta. ...
C.
… It is hardly likely that these Michigan farmers, hiring farm equipment, were in any
position to dicker over what terms went into the contract they signed. Yet holding this service
effective inevitably will mean that the Szukhents must go nearly a thousand miles to a strange
city, hire New York counsel, pay witnesses to travel there, pay their own and their witnesses’
hotel bills, try to explain a dispute over a farm equipment lease to a New York judge or jury, and
in other ways bear the burdens of litigation in a distant, and likely a strange, city. The company,
of course, must have had this in mind when it put the clause in the contract. It doubtless hoped,
by easing into its contract this innocent looking provision for service of process in New York, to
succeed in making it as burdensome, disadvantageous, and expensive as possible for lessees to
contest actions brought against them.
...
7
Since New York would not hold Mrs. Weinberg a valid agent to receive service of process, service cannot
be upheld as authorized by that part of Rule 4(d)(7) which validates service ‘in the manner prescribed by the law of
the state.’
9
Apparently the district judge asked the company to supply particulars of Mrs. Weinberg's relationship to
the company, but this information was never furnished. For all that appears, she may be a stockholder or director of
the company.
The end result of today’s holding is not difficult to foresee. Clauses like the one used
against the Szukhents—clauses which companies have not inserted, I suspect, because they never
dreamed a court would uphold them—will soon find their way into the ‘boilerplate’ of
everything from an equipment lease to a conditional sales contract. Today’s holding gives a
green light to every large company in this country to contrive contracts which declare with force
of law that when such a company wants to sue someone with whom it does business, that
individual must go and try to defend himself in some place, no matter how distant, where big
business enterprises are concentrated … or else suffer a default judgment. … I simply cannot
believe that Congress, when by its silence it let Rule 4(d)(1) go into effect, meant for that rule to
be used as a means to achieve such a far-reaching, burdensome, and unjust result. … The very
threat of such a suit can be used to force payment of alleged claims, even though they be wholly
without merit. This fact will not be news to companies exerting their economic power to wangle
such contracts.
...
Mr. Justice Brennan, with whom The Chief Justice and Mr. Justice Goldberg join,
dissenting.
… In my view, federal standards and not state law must define who is ‘an agent
authorized by appointment’ within the meaning of Rule 4(d) (1). In formulating these standards I
would, first, construe Rule 4(d)(1) to deny validity to the appointment of a purported agent
whose interests conflict with those of his supposed principal. Second, I would require that the
appointment include an explicit condition that the agent after service transmit the process
forthwith to the principal. … Before I would find that an individual purchaser has knowingly and
intelligently consented to be sued in another State, I would require more proof of that fact than is
provided by his mere signature on the form.
Since these standards were not satisfied in this case, the service of the summons and
complaint was properly quashed.
Notes and Questions:……………………………………..
1. This case deals with service on an agent. One may also serve process (summons and
complaint) on a business entity’s titled officers or designated agent for service of process. FRCP
4(h)(1)(B)—and for an individual, at her dwelling or usual place of abode, with someone of
suitable age and discretion who resides there. FRCP 4(e)(2)(B).
2. This was a 5-4 split decision. If you were on the court, with whom would you side? Is
the majority lending its hand to a shady practice which could led to abuse? On the other hand, is
the issue—given that the agent did timely provide notice—be relegated to the category of “form
over substance? …………………………………………………………………………………….
3. The dissent refers to “The right to have a case tried locally.” Would this right not also
apply to defendants, who may have little contact with the lessee’s state? Would the level of such
contacts matter?
HARRIS v. BALK
United States Supreme Court
198 U.S. 215 (1905)
Statement by Mr. Justice Peckham:
...
The facts are as follows: The plaintiff in error, Harris, was a resident of North Carolina at
the time of the commencement of this action, in 1896, and prior to that time was indebted to the
defendant in error, Balk, also a resident of North Carolina, in the sum of $180, for money
borrowed from Balk by Harris during the year 1896, which Harris verbally promised to repay,
but there was no written evidence of the obligation. During the year above mentioned one Jacob
Epstein, a resident of Baltimore, in the state of Maryland, asserted that Balk was indebted to him
in the sum of over $300. In August, 1896, Harris visited Baltimore for the purpose of purchasing
merchandise, and while he was in that city temporarily on August 6, 1896, Epstein caused to be
issued out of a proper court in Baltimore a foreign or nonresident writ of attachment against
Balk, attaching the debt due Balk from Harris, which writ the sheriff at Baltimore laid in the
hands of Harris, with a summons to appear in the court at a day named. With that attachment, a
writ of summons and a short declaration against Balk … were also delivered to the sheriff, and
by him set up at the courthouse door, as required by the law of Maryland [italics added]. Before
the return day of the attachment writ Harris left Baltimore, and returned to his home in North
Carolina. He did not contest the garnishee process, which was issued to garnish the debt which
Harris owed Balk. After his return Harris made an affidavit … that he owed Balk $180, and
stated that the amount had been attached by Epstein, of Baltimore, and … Harris consented
therein to an order of condemnation against him as such garnishee for $180, the amount of his
debt to Balk. Judgment was thereafter entered … in favor of the plaintiff, Epstein, for $180.
After the entry of the … judgment, condemning the $180 in the hands of the garnishee
[Harris], Harris paid the amount of the judgment…. Balk [subsequently] commenced an action
against Harris before a justice of the peace in North Carolina, to recover the $180 which he
averred Harris owed him. The plaintiff in error [Harris], by way of answer to the suit, pleaded in
bar the recovery of the Maryland judgment and his payment thereof, and contended that it was
conclusive against the defendant in error [Balk] in this [subsequent] action, because that
judgment was a valid judgment in Maryland, and was therefore entitled to full faith and credit in
the courts of North Carolina. This contention was not allowed by the trial court, and judgment
was accordingly entered against Harris for the amount of his indebtedness to Balk, and that
judgment was affirmed by the supreme court of North Carolina. The ground of such judgment
was that the Maryland court obtained no jurisdiction to attach or garnish the debt due from Harris
to Balk, because Harris was but temporarily in the state, and the situs of the debt was in North
Carolina.
Mr. Justice Peckham, after making the foregoing statement, delivered the [7-2] opinion of
the court:
The state court of North Carolina has refused to give any effect in this action to the
Maryland judgment; and the Federal question is whether it did not thereby refuse the full faith
and credit to such judgment which is required by the Federal Constitution. If the Maryland court
had jurisdiction to award it, the judgment is valid and entitled to the same full faith and credit in
North Carolina that it has in Maryland as a valid domestic judgment.
...
The cases holding that the state court obtains no jurisdiction over the garnishee if he be
but temporarily within the state proceed upon the theory that the situs of the debt is at the
domicil[e] either of the creditor [Balk, NC] or of the debtor [Harris, NC], and that it does not
follow the debtor in his casual or temporary journey into another state, and the garnishee [Harris]
has no possession of any property or credit of the principal debtor in the foreign state.
...
Attachment is the creature of the local law; that is, unless there is a law of the state
providing for and permitting the attachment, it cannot be levied there. If there be a law of the
state providing for the attachment of the debt, then, if the garnishee be found in that state, and
process be personally served upon him therein, we think the court thereby acquires jurisdiction
over him, and can garnish the debt due from him to the debtor of the plaintiff, and condemn it,
provided the garnishee could himself be sued by his creditor in that state [MD]. We do not see
how the question of jurisdiction vel non can properly be made to depend upon the so-called
original situs of the debt, or upon the character of the stay of the garnishee, whether temporary or
permanent, in the state where the attachment is issued. Power over the person of the garnishee
confers jurisdiction on the courts of the state where the writ issues. If, while temporarily there,
his creditor might sue him there and recover the debt, then he is liable to process of garnishment,
no matter where the situs of the debt was originally. We do not see the materiality of the
expression ‘situs of the debt,’ when used in connection with attachment proceedings. If by situs
is meant the place of the creation of the debt, that fact is immaterial. If it be meant that the
obligation to pay the debt can only be enforced at the situs thus fixed, we think it plainly untrue.
The obligation of the debtor to pay his debt clings to and accompanies him wherever he
goes [italics added]. He is as much bound to pay his debt in a foreign state when therein sued
upon his obligation by his creditor, as he was in the state where the debt was contracted. We
speak of ordinary debts, such as the one in this case. It would be no defense to such suit for the
debtor to plead that he was only in the foreign state casually or temporarily. His obligation to pay
would be the same whether he was there in that way or with an intention to remain. It is nothing
but the obligation to pay which is garnished or attached. This obligation can be enforced by the
courts of the foreign state after personal service of process therein, just as well as by the courts of
the domicil[e] of the debtor. … His obligation to pay to his creditor is thereby arrested, and a lien
created upon the debt itself. We can see no reason why the attachment could not be thus laid,
provided the creditor of the garnishee could himself sue in that state, and its laws permitted the
attachment.
...
The importance of the fact of the right of the original creditor to sue his debtor in the foreign
state, as affecting the right of the creditor of that creditor to sue the debtor or garnishee, lies in
the nature of the attachment proceeding. The plaintiff in such proceeding in the foreign state is
able to sue out the attachment and attach the debt due from the garnishee to his (the garnishee’s)
creditor, because of the fact that the plaintiff [Epstein] is really, in such proceeding, a
representative of the creditor [Balk] of the garnishee [Harris], and therefore if such creditor
himself had the right to commence suit to recover the debt in the foreign state, his representative
has the same right, as representing him, and may garnish or attach the debt, provided the
municipal law of the state where the attachment was sued out permits it. ……………………….
It seems to us, therefore, that the judgment against Harris in Maryland, condemning the
$180 which he owed to Balk, was a valid judgment, because the court had jurisdiction over the
garnishee by personal service of process within the state of Maryland.
...
It ought to be and it is the object of courts to prevent the payment of any debt twice over.
Thus, if Harris, owing a debt to Balk, paid it under a valid judgment against him, to Epstein, he
certainly ought not to be compelled to pay it a second time, but should have the right to plead his
payment under the Maryland judgment. …………………………………………………………..
...
The defendant in error, Balk, had notice of this attachment … because he sued the plaintiff in
error to recover his debt within a few days after his (Harris’) return to North Carolina, in which
suit the judgment in Maryland was set up by Harris as a plea in bar to Balk’s claim. Balk,
therefore, had an opportunity … to litigate the question of his liability in the Maryland court, and
to show that he did not owe the debt, or some part of it, as was claimed by Epstein. He, however,
took no proceedings to that end, so far as the record shows, and the reason may be supposed to
be that he could not successfully defend the claim, because he admitted in this case that he did, at
the time of the attachment proceeding, owe Epstein some $344.
...
The judgment of the Supreme Court of North Carolina must be reversed, and the cause
remanded for further proceedings not inconsistent with the opinion of this court.
Reversed.
Mr. Justice Harlan and Mr. Justice Day dissented.[without opinion].
Notes and Questions:
1. Per Video #5, what three kinds of property may be attached? When does such property
have to be attached, to initiate a suit against the D’s property? Why would a P choose to attach
D’s property, as opposed to proceeding directly in personam against the D?
2. What, where, and whose, property was successfully attached in Harris?
3. When Harris was initially served with process in Maryland, had he done anything to
wrong to Epstein? As the majority opinion states: “the municipal law of Maryland permits the
debtor of the principal debtor to be garnished.” What does this mean, in terms of jurisdiction to
attach a defendant’s property?
SHAFFER v. HEITNER
United States Supreme Court
433 U.S. 186 (1977)
Mr. Justice Marshall delivered the [7-1, with two separate concurring] opinion[s] of the
Court.
The controversy in this case concerns the constitutionality of a Delaware statute that
allows a court of that State to take jurisdiction of a lawsuit by sequestering any property of the
defendant that happens to be located in Delaware. Appellants contend that the sequestration
statute as applied in this case violates the Due Process Clause of the Fourteenth Amendment [§1]
both because it permits the state courts to exercise jurisdiction despite the absence of sufficient
contacts among the defendants, the litigation, and the State of Delaware….
I
Appellee Heitner, a nonresident of Delaware, is the owner of one share of stock in the
Greyhound Corp., a business incorporated under the laws of Delaware with its principal place of
business in Phoenix, Ariz. … [H]e filed a shareholder’s derivative suit in ... Del., in which he
named as defendants Greyhound … and 28 present or former officers or directors of one or both
of the [Greyhound] corporations. In essence, Heitner alleged that the individual defendants had
violated their duties to Greyhound by causing it and its subsidiary to engage in actions that
resulted in the corporations being held liable for substantial damages in a private antitrust suit2
and a large fine in a criminal contempt action.3 The activities which led to these penalties took
place in Oregon.
Simultaneously with his complaint, Heitner filed a motion for an order of sequestration of
the Delaware property of the individual defendants pursuant to Del. [Corporations] Code
s[ection] 366.4 This motion was accompanied by a supporting affidavit of counsel which stated
that the individual defendants were nonresidents of Delaware. The affidavit identified the
property to be sequestered as “common stock … [issued by] the Defendant Greyhound
Corporation, a Delaware corporation, as well as all options and all warrants to purchase said
stock issued to said individual Defendants and [italics added].”
The requested sequestration order … was signed the day the motion was filed. Pursuant
to that order, the sequestrator “seized” approximately 82,000 shares of Greyhound common
stock belonging to 19 of the defendants,7 and options belonging to another 2 defendants.8 These
seizures were accomplished by placing “stop transfer” orders or their equivalents on the books of
the Greyhound Corp. So far as the record shows, none of the certificates representing the seized
property was physically present in Delaware. The stock was considered to be in Delaware, and
so subject to seizure, by virtue of [the] Del. Code …, which makes Delaware the situs of
ownership of all stock in Delaware corporations.9
All 28 defendants were notified of the initiation of the suit by certified mail directed to
their last known addresses and by publication in a New Castle County newspaper. The 21
defendants whose property was seized (hereafter referred to as appellants) responded by entering
a special appearance for the purpose of moving to quash service of process and to vacate the
sequestration order. They contended that the ex parte sequestration procedure did not accord
them due process of law and that the property seized was not capable of attachment in Delaware.
In addition, appellants asserted that under the rule of International Shoe Co. v. Washington, they
did not have sufficient contacts with Delaware to sustain the jurisdiction of that State’s courts.
...
The Court … rejected these arguments in a letter opinion which emphasized the purpose
of the Delaware sequestration procedure:
A judgment of $13,146,090 plus attorneys fees was entered against Greyhound in … [that prior case].
[In other cases] …Greyhound was fined $100,000 and Greyhound Lines $500,000.
4
Section 366 provides: “(a) If it appears in any complaint … that the defendant or any one or more of the
defendants is a nonresident of the State, the Court may make an order directing such nonresident defendant or
defendants to appear by a day certain to be designated. Such order shall be served on such nonresident defendant or
defendants by mail or otherwise, if practicable, and shall be published in such manner as the Court directs…. The
Court may compel the appearance of the defendant by the seizure of all or any part of his property, which property
may be sold under the order of the Court to pay the demand of the plaintiff, if the defendant does not appear, or
otherwise defaults. Any defendant whose property shall have been so seized and who shall have entered a general
appearance in the cause may, upon notice to the plaintiff, petition the Court for an order releasing such property or
any part thereof from the seizure.… (c) Any [purported] transfer or assignment of the property so seized after the
seizure thereof shall be void….” …………………………………………. …………………………………….
7
The … value of the sequestered stock was approximately.$1.2 million.
8
Debentures, warrants, and stock unit credits belonging to some of the defendants who owned either stock
or options were also sequestered. …
9
Section 169 provides: “For all purposes of title, action, attachment, garnishment and jurisdiction of all
courts held in this State, but not for the purpose of taxation, the situs of the ownership of the capital stock of all
corporations existing under the laws of this State, whether organized under this chapter or otherwise, shall be
regarded as in this State.”
2
3
The primary purpose of ‘sequestration’ … is not to secure possession of property pending
a trial … on the issue of who has the right to retain it. On the contrary, … ‘sequestration’
is a process used to compel the personal appearance of a nonresident defendant to answer
and defend a suit brought against him…. It is accomplished by the appointment of a
sequestrator by this Court to seize and hold property of the nonresident located in this
State subject to further Court order. If the defendant enters a general appearance, the
sequestered property is routinely released, unless the plaintiff makes special application
to continue its seizure, in which event the plaintiff has the burden of proof and persuasion
[italics added].
This limitation on the purpose and length of time for which sequestered property is held,
the court concluded, rendered inapplicable the due process requirements enunciated in Sniadach
v. Family Finance Corp.; Fuentes v. Shevin; and [other cases]. … Finally, the court held that the
statutory Delaware situs of the stock provided a sufficient basis for the exercise of quasi in rem
jurisdiction by a Delaware court.
On appeal, the Delaware Supreme Court affirmed…. Most of the [Delaware] Supreme
Court’s opinion was devoted to rejecting appellants’ contention that the sequestration procedure
is inconsistent with the due process analysis developed in the Sniadach [and Fuentes] line of
cases.
...
12
We … reverse.
II
The Delaware courts rejected appellants’ jurisdictional challenge by noting that this suit
was brought as a quasi in rem proceeding. Since quasi in rem jurisdiction is traditionally based
on attachment or seizure of property present in the jurisdiction, not on contacts between the
defendant and the State [as with IPJ], the courts considered appellants’ claimed lack of contacts
with Delaware to be unimportant. This categorical analysis assumes the continued soundness of
the conceptual structure founded on the century-old case of Pennoyer v. Neff.
[In] Pennoyer … the Court focused on the territorial limits of the States’ judicial powers.
… Mr. Justice Field found that their jurisdiction was defined by the “principles of public law”
that [similarly] regulate the relationships among independent nations. The first of those
principles was “that every State possesses exclusive jurisdiction and sovereignty over persons
[IPJ] and property [in rem jurisdiction] within its territory.” The second was “that no State can
exercise direct jurisdiction and authority over persons or property without its territory.” … [A]ny
attempt “directly” to assert extraterritorial jurisdiction over persons or property would offend
sister States and exceed the inherent limits of the State’s power. A judgment resulting from such
an attempt … was not only unenforceable in other States, but was also void in the rendering State
because it had been obtained in violation of the Due Process Clause of the Fourteenth
Amendment.
...
[U]nder Pennoyer state authority to adjudicate was based on the jurisdiction’s power over either
persons or property. … If a court’s jurisdiction is based on its authority over the defendants
person, the action and judgment are denominated “in personam” and can impose a personal
12
Under Delaware law, defendants whose property has been sequestered must enter a general appearance,
thus subjecting themselves to in personam liability, before they can defend on the merits. …
obligation on the defendant in favor of the plaintiff. If jurisdiction is based on the court’s power
over property within its territory, the action is called “in rem” or “quasi in rem.” The effect of a
judgment in such a case is limited to the property that supports jurisdiction and does not impose
a personal liability on the property owner, since he is not before the court.17 In Pennoyer’s terms,
the owner is affected only “indirectly” by an in rem judgment adverse to his interest in the
property subject to the court’s disposition.
By concluding that “(t)he authority of every tribunal is necessarily restricted by the
territorial limits of the State in which it is established,” Pennoyer sharply limited the availability
of in personam jurisdiction over defendants not resident in the forum State. … On the other hand,
since the State in which property was located was considered to have exclusive sovereignty over
that property, in rem actions could proceed regardless of the owner’s location. …
The Pennoyer rules generally favored nonresident defendants by making them harder to
sue. This advantage was reduced, however, by the ability of a resident plaintiff to satisfy a claim
against a nonresident defendant by bringing into court any property of the defendant located in
the plaintiff’s State. For example, in the well-known case of Harris v. Balk …, [t]his Court
reasoned that the debt Harris owed Balk was an intangible form of property belonging to Balk,
and that the location of that property traveled with the debtor. By obtaining personal jurisdiction
over Harris, Epstein had “arrested” his [Harris’s] debt to Balk, and brought it into the Maryland
court.
...
No equally dramatic change [referring to Shoe’s substitution of fairness for presence—as
the yardstick for measuring Due Process] has occurred in the law governing jurisdiction in rem.
… Well-reasoned lower court opinions have questioned the proposition that the presence of
property in a State gives that State jurisdiction to adjudicate rights to the property regardless of
the relationship of the underlying dispute and the property owner to the forum. The
overwhelming majority of commentators … urge that the [Shoe] “traditional notions of fair play
and substantial justice” that govern a State’s power to adjudicate in personam should also govern
its power to adjudicate personal rights to property located in the State.
Although this Court has not addressed this argument directly, we have held that property
cannot be subjected to a court's judgment unless reasonable and appropriate efforts have been
made to give the property owners actual notice of the action. Mullane v. Central Hanover Bank
& Trust Co. This conclusion recognizes, contrary to Pennoyer, that an adverse judgment in rem
directly affects the property owner by divesting him of his rights in the property before the court.
Moreover, in Mullane we hold that Fourteenth Amendment rights cannot depend [merely] on the
classification of an action as in rem or in personam, since that is “a classification for which the
standards are so elusive and confused generally and which, being primarily for state courts to
define, may and do vary from state to state.”
It is clear, therefore, that the law of state-court jurisdiction no longer stands securely on
the foundation established in Pennoyer. We think that the time is ripe to consider whether the
17
“A judgment in rem affects the interests of all persons in designated property. A judgment quasi in rem
affects the interests of particular persons in designated property. The latter is of two types. In one the plaintiff is
seeking to secure a pre-existing claim in the subject property and to extinguish or establish the nonexistence of
similar interests of particular persons. In the other the plaintiff seeks to apply what he concedes to be the property of
the defendant to the satisfaction of a claim against him.” … [W]e will for convenience generally use the term “in
rem” in place of “in rem and quasi in rem.”
standard of fairness and substantial justice set forth in International Shoe should be held to
govern actions in rem as well as in personam.
III
The case for applying to jurisdiction in rem the same test of “fair play and substantial
justice” as governs assertions of jurisdiction in personam is simple and straightforward. It is
premised on recognition that “(t)he phrase, ‘judicial jurisdiction over a thing,’ is a customary
elliptical way of referring to jurisdiction over the interests of persons in a thing.”22 This
recognition leads to the conclusion that in order to justify an exercise of jurisdiction in rem, the
basis for jurisdiction must be sufficient to justify exercising “jurisdiction over the interests of
persons in a thing.” The standard for determining whether an exercise of jurisdiction over the
interests of persons is consistent with the Due Process Clause is the minimum-contacts standard
elucidated in International Shoe.
This argument, of course, does not ignore the fact that the presence of property in a State
may bear on the existence of jurisdiction by providing contacts among the forum State, the
defendant, and the litigation. For example, when claims to the property itself are the source of
the underlying controversy between the plaintiff and the defendant, it would be unusual for the
State where the property is located not to have jurisdiction. …
It appears, therefore, that jurisdiction over many types of actions which now are or might
be brought in rem would not be affected by a holding that any assertion of state-court jurisdiction
must satisfy the International Shoe standard. For the type of quasi in rem action typified by
Harris v. Balk and the present case, however, accepting the proposed analysis would result in
significant change. These are cases where the property which now serves as the basis for statecourt jurisdiction is completely unrelated to the plaintiff’s cause of action. Thus, although the
presence of the defendant’s property in a State might suggest the existence of other ties among
the defendant, the State, and the litigation, the presence of the property alone would not support
the State’s jurisdiction. If those other ties did not exist, cases over which the State is now thought
to have jurisdiction could not be brought in that forum.
… [W]e note that this type of case also presents the clearest illustration of the argument
in favor of assessing assertions of jurisdiction by a single standard. For in cases such as Harris
and this one, the only role played by the property is to provide the basis for bringing the
defendant into court. Indeed, the express purpose of the Delaware sequestration procedure is to
compel the defendant to enter a personal appearance.33 In such cases, if a direct assertion of
personal jurisdiction over the defendant would violate the Constitution, it would seem that an
indirect assertion of that jurisdiction should be equally impermissible.
. . .37
… The fiction that an assertion of jurisdiction over property is anything but an assertion
of jurisdiction over the owner of the property supports an ancient form without substantial
modern justification. Its continued acceptance [as permitted under cases like Harris] would serve
only to allow state-court jurisdiction that is fundamentally unfair to the defendant.
...
22
“All proceedings, like all rights, are really against persons. Whether they are proceedings or rights in rem
depends on the number of persons affected.”
33
This purpose is emphasized by Delaware’s refusal to allow any defense on the merits unless the
defendant enters a general appearance, thus submitting to full in personam liability. ………………………..
37
This case does not raise, and we therefore do not consider, the question whether the presence of a
defendant's property in a State is a sufficient basis for jurisdiction when no other forum is available to the plaintiff.
We therefore conclude that all assertions of state-court jurisdiction must be evaluated
according to the standards set forth in International Shoe and its progeny.39
IV
The Delaware courts based their assertion of jurisdiction in this case solely on the
statutory presence of appellants’ property in Delaware [italics added]. Yet that property is not the
subject matter of this litigation, nor is the underlying cause of action related to the property. …
… But as Heitner’s failure to secure jurisdiction over seven of the defendants named in
his complaint demonstrates, there is no necessary relationship between holding a position as a
corporate fiduciary and owning stock or other interests in the corporation. …
Moreover, … Heitner’s … argument fails to demonstrate that Delaware is a fair forum
for this litigation. The interest appellee has identified may support the application of Delaware
law to resolve any controversy over appellants’ actions in their capacities as officers and
directors.44 But we have rejected the argument that if a State’s law can properly be applied to a
dispute, its courts necessarily have jurisdiction over the parties to that dispute.
...
Delaware’s assertion of jurisdiction over appellants in this case is inconsistent with that
constitutional limitation on state power. The judgment of the Delaware Supreme Court must,
therefore, be reversed.
It is so ordered.
...
Mr. Justice Powell, concurring.
...
I would explicitly reserve judgment, however, on whether the ownership of some forms
of property whose situs is indisputably and permanently located within a State may, without
more, provide the contacts necessary to subject a defendant to jurisdiction within the State to the
extent of the value of the property. In the case of real property, … [it would] arguably would
avoid the uncertainty of the general International Shoe standard without significant cost to
“‘traditional notions of fair play and substantial justice.’”
...
Mr. Justice Stevens, concurring in the judgment.
...
If I visit another State, or acquire real estate or open a bank account in it, I knowingly assume
some risk that the State will exercise its power over my property or my person while there. My
contact with the State, though minimal, gives rise to predictable risks.
...
One who purchases shares of stock on the open market can hardly be expected to know
that he has thereby become subject to suit in a forum remote from his residence and unrelated to
the transaction. As a practical matter, the Delaware sequestration statute creates an unacceptable
risk of judgment without notice. Unlike the 49 other States, Delaware treats the place of
incorporation as the situs of the stock, even though both the owner and the custodian of the
39
It would not be fruitful for us to re-examine the facts of cases decided on the rationales of Pennoyer and
Harris to determine whether jurisdiction might have been sustained under the standard we adopt today. To the
extent that prior decisions are inconsistent with this standard, they are overruled.
44
In general, the law of the State of incorporation is held to govern the liabilities of officers or directors to
the corporation and its stockholders. The rationale for the general rule appears to be based more on the need for a
uniform and certain standard to govern the internal affairs of a corporation than on the perceived interest of the State
of incorporation. …
shares are elsewhere. Moreover, Delaware denies the defendant the opportunity to defend the
merits of the suit unless he subjects himself to the unlimited jurisdiction of the court. …
How the Court’s opinion may be applied in other contexts is not entirely clear to me. I
agree with Mr. Justice Powell that it should not be read to invalidate quasi in rem jurisdiction
where real estate is involved. …
Mr. Justice Brennan, concurring in part and dissenting in part.
I join Parts I-III of the Court’s opinion. I fully agree that the minimum-contacts analysis
developed in International Shoe Co. v. Washington, represents a far more sensible construct for
the exercise of state-court jurisdiction than the patchwork of legal and factual fictions that has
been generated from the decision in Pennoyer v. Neff. It is precisely because the inquiry into
minimum contacts is now of such overriding importance, however, that I must respectfully
dissent from Part IV of the Court’s opinion.
...
II
… I am convinced that as a general rule a state forum has jurisdiction to adjudicate a
shareholder derivative action centering on the conduct and policies of the directors and officers
of a corporation chartered by that State. Unlike the Court, I therefore would not foreclose
Delaware from asserting [personal] jurisdiction over appellants were it persuaded to do so on the
basis of minimum contacts [thus obviating the need to reach the question of in rem jurisdiction,
in a way that will conceivably impact the laws of all 50 states].
Notes and Questions:
1. The property seized in Harris was not the actual $180.00 in Harris’s pocket. It was,
instead, the intangible obligation to repay it to Balk. What property of the defendants was seized
in Shaffer? Where was that property deemed to be located under the Delaware statute (which was
amended ten days after Shaffer was decided)? ………………………………………. …………
2. Pennoyer established the two types of territorial jurisdiction that exist today: in
personam and in rem. The in personam wing of Pennoyer was overruled in Shoe, which
abandoned the required presence of the person for service in the forum (to establish IPJ). What
did Shaffer do to the in rem wing of Pennoyer? What rule might one articulate as the “result” in
Shaffer?
3. Does Shaffer impact cases where the property is the subject of the litigation? Or is
Shaffer’s impact most felt in cases where the property to be seized—prior to judgment, because
Shaffer has no cogizable impact on post-judgment enforcement remedies—has little if anything
to do with the underlying in case? What exceptions does: (a) footnote 37 suggest?; and (b) the
concurring opinions?
BATES v. C & S ADJUSTERS, INC.
United States Court of Appeals, Second Circuit
980 F.2d 865 (1992)
Jon O. Newman, Circuit Judge:
This appeal concerns venue in an action brought under the Fair Debt Collection Practices
Act. Specifically, the issue is whether venue exists in a district in which the debtor resides and to
which a bill collector’s demand for payment was forwarded. The issue arises on an appeal by
Phillip E. Bates from the … judgment …, dismissing his complaint because of improper venue.
We conclude that venue was proper under 28 U.S.C.A. § 1391(b)(2) and therefore reverse and
remand.
Background
Bates commenced this action in the Western District of New York upon receipt of a
collection notice from C & S Adjusters, Inc. (“C & S”). Bates alleged violations of the Fair Debt
Collection Practices Act…. The facts relevant to venue are not in dispute. Bates incurred the debt
in question while he was a resident of the Western District of Pennsylvania. The creditor, a
corporation with its principal place of business in that District, referred the account to C & S, a
local [Pennsylvania] collection agency which transacts no regular 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 Postal Service forwarded the notice to Bates’
new address in New York.
In its answer, C & S asserted two affirmative defenses and also counterclaimed for costs,
alleging that the action was instituted in bad faith and for purposes of harassment. C & S
subsequently filed a motion to dismiss for improper venue, which the District Court granted.
Discussion
1. Venue and the 1990 amendments to 28 U.S.C. § 1391(b)
Bates concedes that the only plausible venue provision for this action is 28 U.S.C.A. §
1391(b)(2), which allows an action to be brought in “a judicial district in which a substantial part
of the events or omissions giving rise to the claim occurred.” Prior to 1990, section 1391 allowed
for venue in “the judicial district ... in which the claim arose.” This case represents our first
opportunity to consider the significance of the 1990 amendments.
Prior to 1966, venue was proper in federal question cases, absent a special venue statute,
only in the defendant’s state of citizenship [or plaintiff’s, in a diversity case]. If a plaintiff sought
to sue multiple defendants who were citizens of different states, there might be no district where
the entire action could be brought. Congress closed this “venue gap” by adding a provision
allowing suit in the district “in which the claim arose.” This phrase gave rise to a variety of
conflicting interpretations. Some courts thought it meant that there could be only one such
district; others believed there could be several. Different tests developed, with courts looking for
“substantial contacts,” the “weight of contacts,” the place of injury or performance, or even to
the boundaries of personal jurisdiction under state law. …
The Supreme Court [in its 1979 Leroy case] … made several … observations: (1) the
purpose of the [earlier] 1966 statute was to close venue gaps and should not be read more
broadly than necessary to close those gaps…; (2) the general purpose of the venue statute was to
protect defendants against an unfair or inconvenient trial location; (3) location of evidence and
witnesses was a relevant factor; (4) familiarity of the Idaho federal judges with the Idaho antitakeover statute was a relevant factor; (5) plaintiff’s convenience was not a relevant factor; and
(6) in only rare cases should there be more than one district in which a claim can be said to arise.
Subsequent to Leroy and prior to the 1990 amendment to section 1391(b), … [c]ourts
continued to have difficulty in determining whether more than one district could be proper.
Against this background, we understand Congress’ 1990 amendment to be at most a
marginal expansion of the venue provision. The House Report indicates that the new language
was first proposed by the American Law Institute in a 1969 Study, and observes:
The great advantage of referring to the place where things happened ... is that it
avoids the litigation breeding phrase “in which the claim arose.” It also avoids the
problem created by the frequent cases in which substantial parts of the underlying events
have occurred in several districts.
Thus it seems clear that Leroy’s strong admonition against recognizing multiple venues has been
disapproved. Many of the factors in Leroy—for instance, the convenience of defendants and the
location of evidence and witnesses—are most useful in distinguishing between two or more
plausible venues. Since the new [1990] statute does not, as a general matter, require the District
Court to determine the best venue, these factors will be of less significance. Apart from this
point, however, Leroy and other precedents remain important sources of guidance.
2. Fair Debt Collection Practices Act
Under the version of the venue statute in force from 1966 to 1990, at least three District
Courts held that venue was proper under the Fair Debt Collection Practices Act in the plaintiff’s
home district if a collection agency had mailed a collection notice to an address in that district or
placed a phone call to a number in that district. None of these cases involved the unusual fact,
present in this case, that the defendant did not deliberately direct a communication to the
plaintiff’s district.
We conclude, however, that this difference is inconsequential, at least under the current
venue statute. The statutory standard for venue focuses not on whether a defendant has made a
deliberate contact—a factor relevant in the analysis of personal jurisdiction1—but on the location
where events occurred. Under the new version of section 1391(b)(2), we must determine only
whether a “substantial part of the events ... giving rise to the claim” occurred in the Western
District of New York.
In adopting this statute, Congress was concerned about the harmful effect of abusive debt
practices on consumers. (“Abusive debt collection practices contribute to the number of personal
bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy.”)
This harm does not occur until receipt of the collection notice. Indeed, if the notice were lost in
the mail, it is unlikely that a violation of the Act would have occurred. Moreover, a debt
collection agency sends its dunning letters so that they will be received. Forwarding such letters
to the district to which a debtor has moved is an important step in the collection process. If the
bill collector prefers not to be challenged for its collection practices outside the district of a
debtor’s original residence, the envelope can be marked “do not forward.” We conclude that
receipt of a collection notice is a substantial part of the events giving rise to a claim under the
Fair Debt Collection Practices Act.
The relevant factors identified in Leroy add support to our conclusion. Although “bona
fide error” can be a defense to liability under the Act, the alleged violations of the Act turn
largely not on the collection agency’s intent, but on the content of the collection notice. The most
relevant evidence—the collection notice—is located in the Western District of New York.
Because the collection agency appears not to have marked the notice with instructions not to
forward, and has not objected to the assertion of personal jurisdiction, trial in the Western
District of New York would not be unfair.
CONCLUSION
The judgment of the District Court is reversed, and the matter is remanded for further
proceedings consistent with this decision.
Notes and Questions:
1. As Bates notes, “the general purpose of the venue statute was to protect defendants
against an unfair or inconvenient trial location.” That is similar to the purpose of constitutional
Due Process cases you studied earlier. What, then, is the essential difference between IPJ and
venue? Go to the Course Web Page, the click the California Federal judicial district map, which
may assist with assessing IPJ versus venue. As noted in KM Enterprises, Inc. v. Global Traffic
Technologies, Inc., 725 F.3d 718, 723-724 (7th Cir., 2013):
1
C & S has waived whatever claim it might have had that the District Court lacked personal jurisdiction
over it. Waiver resulted from C & S's failure to allege lack of personal jurisdiction in its answer or motion to
dismiss.
While personal jurisdiction governs a court’s power over a defendant, federal venue rules
determine in which judicial district ... a suit should be heard. Unlike personal jurisdiction,
which has a constitutional dimension, civil venue is a creature of statute, intended to limit the
potential districts where one may be called upon to defend oneself in any given matter to those
that are fair and reasonably convenient. [¶ ... For example, a] corporate defendant is deemed to
“reside” “in any judicial district in which such defendant is subject to the court’s personal
jurisdiction with respect to the civil action in question.” §1391(c)(2). In states with multiple
judicial districts, subsection (d) limits the residency of a corporation to “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 ... in the district within which it
has the most significant contacts.”
2. How does the 1990 statute differ from the earlier 1966 general federal venue statute?
What impact did the 1990 change have in Bates?
3. What was the proper venue for the Bates suit? Was there only one? If the collection
agency had challenged personal jurisdiction, would it have been more successful than in
challenging only venue?
4. Did the court have to determine the best venue? Or only a proper venue(s)? Did it have
to determine where the most substantial part of claim occurred? Or only whether a substantial
part occurred in the forum chosen by the plaintiff?
4. What does the last phrase of the Conclusion mean?
PIPER AIRCRAFT CO. v. REYNO
United States Supreme Court
454 U.S. 235 (1981)
Justice Marshall delivered the [4-3] opinion of the Court.
These cases arise out of an air crash that took place in Scotland. Respondent, acting as
representative of the estates of several Scottish citizens killed in the accident, brought wrongfuldeath actions against petitioners [in California] that were ultimately transferred to the United
States District Court for the Middle District of Pennsylvania. Petitioners [then] moved to dismiss
on the ground of forum non conveniens. After noting that an alternative forum existed in
Scotland, the District Court granted their motions. The United States Court of Appeals for the
Third Circuit reversed. The Court of Appeals based its decision, at least in part, on the ground
that dismissal is automatically barred where the law of the alternative forum is less favorable to
the plaintiff than the law of the forum chosen by the plaintiff. Because we conclude that the
possibility of an unfavorable change in law should not, by itself, bar dismissal, and because we
conclude that the District Court did not otherwise abuse its discretion, we reverse.
I
(Type of Cessna involved in Piper aircrash.
Reprinted with permission of <www.airshowspresent.com> .
A
In July 1976, a small commercial aircraft crashed in the Scottish highlands during the
course of a charter flight from Blackpool to Perth. The pilot and five passengers were killed
instantly. The decedents were all Scottish subjects and residents, as are their heirs and next of
kin. There were no eyewitnesses to the accident. At the time of the crash the plane was subject to
Scottish air traffic control.
The aircraft, a twin-engine Piper Aztec, was manufactured in Pennsylvania by petitioner
Piper Aircraft Co. (Piper). The propellers were manufactured in Ohio by petitioner Hartzell
Propeller, Inc. (Hartzell). At the time of the crash the aircraft was registered in Great Britain and
was owned and maintained by Air Navigation and Trading Co., Ltd. (Air Navigation). It was
operated by McDonald Aviation, Ltd. (McDonald), a Scottish air taxi service. Both Air
Navigation and McDonald were organized in the United Kingdom. The wreckage of the plane is
now in a hangar in Farnsborough, England.
The British Department of Trade investigated the accident shortly after it occurred. A
preliminary report found that the plane crashed after developing a spin, and suggested that
mechanical failure in the plane or the propeller was responsible. At Hartzell’s request, this report
was reviewed by a three-member Review Board, which held a 9-day adversary hearing attended
by all interested parties. The Review Board found no evidence of defective equipment and
indicated that pilot error may have contributed to the accident. The pilot, who had obtained his
commercial pilot’s license only three months earlier, was flying over high ground at an altitude
considerably lower than the minimum height required by his company’s operations manual.
In July 1977, a California probate court appointed respondent Gaynell Reyno
administratrix of the estates of the five passengers. Reyno is not related to and does not know
any of the decedents or their survivors; she was a legal secretary to the attorney who filed this
lawsuit. Several days after her appointment, Reyno commenced separate wrongful-death actions
against Piper and Hartzell in the Superior Court of California, claiming negligence and strict
liability. Air Navigation, McDonald, and the estate of the pilot are not parties to this litigation.
The survivors of the five passengers whose estates are represented by Reyno filed a separate
action in the United Kingdom against Air Navigation, McDonald, and the pilot’s estate. Reyno
candidly admits that the action against Piper and Hartzell was filed in the United States because
its laws regarding liability, capacity to sue, and damages are more favorable to her position than
are those of Scotland. Scottish law does not recognize strict liability in tort. Moreover, it permits
wrongful-death actions only when brought by a decedent’s relatives. The relatives may sue only
for “loss of support and society.”
On [defendant] petitioners’ motion, the suit was removed to the United States District
Court for the Central District of California. Piper then moved for transfer to the United States
District Court for the Middle District of Pennsylvania, pursuant to 28 U.S.C. § 1404(a).4 Hartzell
moved to dismiss for lack of personal jurisdiction, or in the alternative, to transfer.5 In December
1977, the District Court quashed service on Hartzell and transferred the case to the Middle
District of Pennsylvania. Respondent then properly served process on Hartzell.
B
In May 1978, after the suit had been transferred, both Hartzell and Piper moved to
dismiss the action on the ground of forum non conveniens. The [Pennsylvania] District Court
granted these motions in October 1979. It relied on the balancing test set forth by this Court in
Gulf Oil Corp. v. Gilbert, and its companion case. In those decisions, the Court stated that a
plaintiff’s choice of forum should rarely be disturbed. However, when an alternative forum has
jurisdiction to hear the case, and when trial in the chosen forum would “establish ...
oppressiveness and vexation to a defendant ... out of all proportion to plaintiff’s convenience,” or
when the “chosen forum [is] inappropriate because of considerations affecting the court’s own
administrative and legal problems,” the court may, in the exercise of its sound discretion, dismiss
the case. To guide trial court discretion, the Court provided a list of “private interest factors”
affecting the convenience of the litigants, and a list of “public interest factors” affecting the
convenience of the forum.6
… [T]he District Court … began by observing that an alternative forum existed in
Scotland; Piper and Hartzell had agreed to submit to the jurisdiction of the Scottish courts and to
4
Section 1404(a) provides: “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.” [See
Notes and Questions below for revised version.] …………………………………………………………………..
5
The District Court concluded that it could not assert personal jurisdiction over Hartzell consistent with
due process. However, it decided not to dismiss Hartzell because the corporation would be amenable to process in
Pennsylvania [“where it might have been brought”].
6
The factors pertaining to the private interests of the litigants included the “relative ease of access to
sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining
attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all
other practical problems that make trial of a case easy, expeditious and inexpensive.” The public factors bearing on
the question included the administrative difficulties flowing from court congestion; the “local interest in having
localized controversies decided at home;” the interest in having the trial of a diversity case in a forum that is at home
with the law that must govern the action; the avoidance of unnecessary problems in conflict of laws, or in the
application of foreign law; and the unfairness of burdening citizens in an unrelated forum with jury duty.
waive any statute of limitations defense that might be available. It then stated that plaintiff's
choice of forum was entitled to little weight. The court recognized that a plaintiff’s choice
ordinarily deserves substantial deference. It noted, however, that Reyno “is a representative of
foreign citizens and residents seeking a forum in the United States because of the more liberal
rules concerning products liability law,” and that “the courts have been less solicitous when the
plaintiff is not an American citizen or resident, and particularly when the foreign citizens seek to
benefit from the more liberal tort rules provided for the protection of citizens and residents of the
United States.”
The District Court next examined several factors relating to the private interests of the
litigants, and determined that these factors strongly pointed towards Scotland as the appropriate
forum. Although evidence concerning the design, manufacture, and testing of the plane and
propeller is located in the United States, the connections with Scotland are otherwise
“overwhelming.” The real parties in interest are citizens of Scotland, as were all the decedents.
Witnesses who could testify regarding the maintenance of the aircraft, the training of the pilot,
and the investigation of the accident—all essential to the defense—are in Great Britain.
Moreover, all witnesses to damages are located in Scotland. Trial would be aided by familiarity
with Scottish topography, and by easy access to the wreckage.
The District Court reasoned that because crucial witnesses and evidence were beyond the
reach of compulsory process, and because the defendants would not be able to implead potential
Scottish third-party defendants, it would be “unfair to make Piper and Hartzell proceed to trial in
this forum.” The survivors had brought separate actions in Scotland against the pilot, McDonald,
and Air Navigation. “[I]t would be fairer to all parties and less costly if the entire case was
presented to one jury with available testimony from all relevant witnesses.” … [T]he court
recognized that if trial were held in the United States, … there was a significant risk of
inconsistent verdicts.
The District Court concluded that the relevant public interests also pointed strongly
towards dismissal. The court determined that Pennsylvania law would apply to Piper and
Scottish law to Hartzell if the case were tried in the Middle District of Pennsylvania. As a result,
“trial in this forum would be hopelessly complex and confusing for a jury.” In addition, the court
noted that it was unfamiliar with Scottish law and thus would have to rely upon experts from that
country. The court also found that the trial would be enormously costly and time-consuming; that
it would be unfair to burden citizens with jury duty when the Middle District of Pennsylvania has
little connection with the controversy; and that Scotland has a substantial interest in the outcome
of the litigation.
In opposing the motions to dismiss, respondent contended that dismissal would be unfair
because Scottish law was less favorable. The District Court explicitly rejected this claim. It
reasoned that the possibility that dismissal might lead to an unfavorable change in the law did not
deserve significant weight; any deficiency in the foreign law was a “matter to be dealt with in the
foreign forum.”
C
On appeal, the United States Court of Appeals for the Third Circuit reversed and
remanded for trial. The … Court held that dismissal is never appropriate where the law of the
alternative forum is less favorable to the plaintiff.
...
…[T]he Court of Appeals stated:
[I]t is apparent that the dismissal would work a change in the applicable law so that the
plaintiff’s strict liability claim would be eliminated from the case. But ... a dismissal for
forum non conveniens, like a statutory transfer, ‘should not, despite its convenience,
result in a change in the applicable law.’ Only when American law is not applicable, or
when the foreign jurisdiction would, as a matter of its own choice of law, give the
plaintiff the benefit of the claim to which she is entitled here, would dismissal be
justified.
In other words, the court decided that dismissal is automatically barred if it would lead to
a change in the applicable law unfavorable to the plaintiff.
We granted certiorari in these cases to consider the questions they raise concerning the
proper application of the doctrine of forum non conveniens.
In this opinion, we begin by considering whether the Court of Appeals properly held that
the possibility of an unfavorable change in law automatically bars dismissal. Part II, infra. Since
we conclude that the Court of Appeals erred, we then consider its review of the District Court’s
Gilbert analysis to determine whether dismissal was otherwise appropriate. Part III, infra. We
believe that it is necessary to discuss the Gilbert analysis in order to properly dispose of the
cases.
...
II
The Court of Appeals erred in holding that plaintiffs may defeat a motion to dismiss on
the ground of forum non conveniens merely by showing that the substantive law that would be
applied in the alternative forum is less favorable to the plaintiffs than that of the present forum.
The possibility of a change in substantive law should ordinarily not be given conclusive or even
substantial weight in the forum non conveniens inquiry.
. . .13
Under Gilbert, dismissal will ordinarily be appropriate where trial in the plaintiff’s chosen forum
imposes a heavy burden on the defendant or the court, and where the plaintiff is unable to offer
any specific reasons of convenience supporting his choice. If substantial weight were given to
the possibility of an unfavorable change in law, however, dismissal might be barred even where
trial in the chosen forum was plainly inconvenient.
...
The … decisions have repeatedly emphasized the need to retain flexibility. In Gilbert, the
Court refused to identify specific circumstances “which will justify or require either grant or
denial of remedy.” … And … we stated that we would not lay down a rigid rule to govern
discretion, and that “[e]ach case turns on its facts.” If central emphasis were placed on any one
factor, the forum non conveniens doctrine would lose much of the very flexibility that makes it
so valuable.
...
Upholding the decision of the Court of Appeals would result in other practical problems.
At least where the foreign plaintiff named an American manufacturer as defendant, a court could
13
The doctrine of forum non conveniens has a long history. It originated in Scotland, and became part of
the common law of many States. The doctrine was also frequently applied in federal admiralty actions. In … (1946),
the Court first indicated that motions to dismiss on grounds of forum non conveniens could be made in federal
diversity actions. …
not dismiss the case on grounds of forum non conveniens where dismissal might lead to an
unfavorable change in law. The American courts, which are already extremely attractive to
foreign plaintiffs,18 would become even more attractive. The flow of litigation into the United
States would increase and further congest already crowded courts.19
...
We do not hold that the possibility of an unfavorable change in law should never be a
relevant consideration in a forum non conveniens inquiry. Of course, if the remedy provided by
the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, the
unfavorable change in law may be given substantial weight; the district court may conclude that
dismissal would not be in the interests of justice. In these cases, however, the remedies that
would be provided by the Scottish courts do not fall within this category. Although the relatives
of the decedents may not be able to rely on a strict liability theory, and although their potential
damages award may be smaller, there is no danger that they will be deprived of any remedy or
treated unfairly.
III
The Court of Appeals also erred in rejecting the District Court’s Gilbert analysis. …
A
The District Court acknowledged that there is ordinarily a strong presumption in favor of
the plaintiff’s choice of forum, which may be overcome only when the private and public interest
factors clearly point towards trial in the alternative forum. It held, however, that the presumption
applies with less force when the plaintiff or real parties in interest are foreign.
The District Court’s distinction between resident or citizen plaintiffs and foreign
plaintiffs is fully justified. When the [plaintiff’s] home forum has been chosen, it is reasonable to
assume that this choice is convenient. When the plaintiff is foreign, however, this assumption is
much less reasonable. Because the central purpose of any forum non conveniens inquiry is to
ensure that the trial is convenient, a foreign plaintiff’s choice deserves less deference.
...
B
The forum non conveniens determination is committed to the sound discretion of the trial
court. It may be reversed only when there has been a clear abuse of discretion; where the court
has considered all relevant public and private interest factors, and where its balancing of these
factors is reasonable, its decision deserves substantial deference. Here, the Court of Appeals …
seems to have lost sight of this rule, and substituted its own judgment for that of the District
Court.
(1)
In analyzing the private interest factors, the District Court stated that the connections
with Scotland are “overwhelming” [italics added]. This characterization may be somewhat
First, all but 6 of the 50 American States … offer strict liability … [which] remains primarily an
American innovation. Second, the tort plaintiff may choose, at least potentially, from among 50 jurisdictions if he
decides to file suit in the United States. Each of these jurisdictions applies its own set of malleable choice-of-law
rules. Third, jury trials are almost always available in the United States, while they are never provided in civil law
jurisdictions. … Fourth, unlike most foreign jurisdictions, American courts allow contingent attorney’s fees, and do
not tax losing parties with their opponents’ attorney’s fees. Fifth, discovery is more extensive in American than in
foreign courts.
19
In holding that the possibility of a change in law unfavorable to the plaintiff should not be given
substantial weight, we also necessarily hold that the possibility of a change in law favorable to defendant should not
be considered. …
18
exaggerated. Particularly with respect to the question of relative ease of access to sources of
proof, the private interests point in both directions. As respondent emphasizes, records
concerning the design, manufacture, and testing of the propeller and plane are located in the
United States. She would have greater access to sources of proof relevant to her strict liability
and negligence theories if trial were held here. However, the District Court did not act
unreasonably in concluding that fewer evidentiary problems would be posed if the trial were held
in Scotland. A large proportion of the relevant evidence is located in Great Britain.
(2)
The District Court’s review of the factors relating to the public interest was also
reasonable [italics added]. On the basis of its choice-of-law analysis, it concluded that if the case
were tried in the Middle District of Pennsylvania, Pennsylvania law would apply to Piper and
Scottish law to Hartzell. It stated that a trial involving two sets of laws would be confusing to the
jury. It also noted its own lack of familiarity with Scottish law. …
Scotland has a very strong interest in this litigation. The accident occurred in its airspace.
All of the decedents were Scottish. Apart from Piper and Hartzell, all potential plaintiffs and
defendants are either Scottish or English. As we stated in Gilbert, there is “a local interest in
having localized controversies decided at home.” … The American interest in this accident is
simply not sufficient to justify the enormous commitment of judicial time and resources that
would inevitably be required if the case were to be tried here.
IV
The Court of Appeals erred in holding that the possibility of an unfavorable change in
law bars dismissal on the ground of forum non conveniens. It also erred in rejecting the District
Court's Gilbert analysis. The District Court properly decided that the presumption in favor of the
respondent’s forum choice applied with less than maximum force because the real parties in
interest are foreign. It did not act unreasonably in deciding that the private interests pointed
towards trial in Scotland. Nor did it act unreasonably in deciding that the public interests favored
trial in Scotland. Thus, the judgment of the Court of Appeals is
Reversed.
...
Notes and Questions:
1. Mini-course review: How did this case get from a California state court to a
Pennsylvania federal court? What related procedural issues likely arose during its cross-country
journey? What concessions must the D make, as a requirement for obtaining relief?
2. What does the term “forum non conveniens” (FNC) mean? What factors sway a
court’s FNC decision?
3. What two alternative remedies are available to a party seeking FNC relief?
4. The transfer statute was amended in 2011. A new phrase—added at the end of
subsection (a)—now provides: “or to any district or division to which all parties have
consented.” What difference, if any, would this addition have made in Piper?
5. Some circuits include factors or limitations not stated in either the US Code or
Supreme Court case law. The Fifth Circuit, for example, employs a 100-mile rule. As stated in In
re Maqdmax, Ltd, 720 Fed.Rptr.3d 285, at 288–289 (5th Cir. 2013):
[t]he Fifth Circuit has established a threshold of 100 miles when giving substantial
weight to [the cost of attendance for witnesses],” and the court reasoned that because
“[the] Tyler [division] is well less than 100 miles from Marshall.... this factor is neutral.”
Previously, we explained that “[w]hen the distance between an existing venue for trial of
a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of
inconvenience to witnesses increases in direct relationship to the additional distance to be
traveled.” Indeed, the en banc court reiterated that guidance and characterized it as a 100–
mile “threshold” or “rule.” We did not imply, however, that a transfer within 100 miles
does not impose costs on witnesses or that such costs should not be factored into the
venue-transfer analysis, but only that this factor has greater significance when the
distance is greater than 100 miles.
ERIE R. CO. v. TOMPKINS
United States Supreme Court
304 U.S. 64 (1938)
Mr. Justice Brandeis delivered the [6-2, including two concurring] opinion[s] of the
Court.
The question for decision is whether the oft-challenged doctrine of Swift v. Tyson1 shall
now be disapproved.
Tompkins, a citizen of Pennsylvania, was injured on a dark night by a passing freight
train of the Erie Railroad Company while walking along its right of way at Hughestown in that
state. He claimed that the accident occurred through negligence in the operation, or maintenance,
of the train; that he was rightfully on the premises as licensee because on a commonly used
beaten footpath which ran for a short distance alongside the tracks [italics added]; and that he
was struck by something which looked like a door projecting from one of the moving cars. To
enforce that claim he brought an action in the federal court for Southern New York, which had
jurisdiction because the company is a corporation of that state. It denied liability; and the case
was tried by a jury.
1
1842, 16 Pet. 1. …
Erie Railroad locomotive
Erie open shipping car
Sources: <http://columbusrailroads.com/Ralston
%20photos/ralston-182-1912-ERIE.jpg>
Reprinted with permission of Alex Campbell
and Columbus Railroads
<http://freepages.genealogy.rootsweb.
ancestry.com/~sponholz/erie499.jpg>
Reprinted with Permission of James Sponholz
The Erie insisted that its duty to Tompkins was no greater than that owed to a trespasser.
It contended, among other things, that its duty to Tompkins, and hence its liability, should be
determined in accordance with the Pennsylvania law; that under the law of Pennsylvania, as
declared by its highest court, persons who use pathways along the railroad right of way-that is, a
longitudinal pathway as distinguished from a crossing-are to be deemed trespassers [italics
added] and that the railroad is not liable for injuries to undiscovered trespassers resulting from its
negligence, unless it be wanton or willful. Tompkins denied that any such rule had been
established by the decisions of the Pennsylvania courts; and contended that, since there was no
statute of the state on the subject, the railroad’s duty and liability is to be determined in federal
courts as a matter of general [common] law.
The trial judge refused to rule that the applicable [governing] law precluded recovery.
The jury brought in a verdict of $30,000; and the judgment entered thereon was affirmed by the
Circuit Court of Appeals, which held, that it was unnecessary to consider whether the law of
Pennsylvania was as contended, because the question was one not of local, but of general, law,
and that ‘upon questions of general law the federal courts are free, in absence of a local statute,
to exercise their independent judgment as to what the law is[italics added]; and it is well settled
that the question of the responsibility of a railroad for injuries caused by its servants is one of
general law. … Where the public has made open and notorious use of a railroad right of way for
a long period of time and without objection, the company owes to persons on such permissive
pathway a duty of care in the operation of its trains. … It is likewise generally recognized law
that a jury may find that negligence exists toward a pedestrian using a permissive path on the
railroad right of way if he is hit by some object projecting from the side of the train.’
The Erie had contended that application of the Pennsylvania rule was required, among
other things, by section 34 of the Federal Judiciary Act of September 24, 1789, which provides:
‘The laws of the several States, except where the Constitution, treaties, or statutes of the United
States otherwise require or provide, shall be regarded as rules of decision in trials at common
law, in the courts of the United States, in cases where they apply.’
Because of the importance of the question whether the federal court was free to disregard
the alleged rule of the Pennsylvania common law, we granted certiorari.
First. Swift v. Tyson, held that federal courts exercising jurisdiction on the ground of
diversity of citizenship need not … apply the unwritten law of the state as declared by its …
court[s]; that they are free to exercise an independent judgment as to what the common law of
the state is—or should be; and that …
the true interpretation of the 34th section limited its application to … the positive statutes
of the state…. It never has been supposed by us, that the section did apply, or was
designed to apply, to questions of a more general nature … as, for example, to the
construction of ordinary contracts or other written instruments, and especially to
questions of general commercial law, where the state tribunals are called upon to perform
the like functions as ourselves, that is, to ascertain, upon general reasoning and legal
analogies, what is the true exposition of the contract or instrument, or what is the just rule
furnished by the principles of commercial law to govern the case.
… Doubt was repeatedly expressed as to the correctness of the construction given section
34, and as to the soundness of the rule which it introduced. But it was the more recent research of
a competent scholar, who examined the original document, which established that the
construction given to it by the Court was erroneous; and that the purpose of the section was
merely to make certain that, in all matters except those in which some federal law is controlling,
the federal courts exercising jurisdiction in diversity of citizenship cases would apply as their
rules of decision the law of the state, unwritten as well as written.
...
Second. Experience in applying the doctrine of Swift v. Tyson, had revealed its defects,
political and social; and the benefits expected to flow from the rule did not accrue. Persistence of
state courts in their own opinions on questions of common law prevented uniformity.
...
The discrimination resulting became in practice far-reaching. This resulted in part from
the broad province accorded to the so-called ‘general law’ as to which federal courts exercised
an independent judgment. … Furthermore, state decisions construing local deeds, mineral
conveyances, and even devises of real estate, were disregarded. ………………….……………
In part the discrimination resulted from the wide range of persons held entitled to avail
themselves of the federal rule by resort to the diversity of citizenship jurisdiction. Through this
jurisdiction individual citizens willing to remove from their own state and become citizens of
another might avail themselves of the federal rule. And, without even change of residence, a
corporate citizen of the state could avail itself of the federal rule by reincorporating under the
laws of another state….
The injustice and confusion incident to the doctrine of Swift v. Tyson have been
repeatedly urged as reasons for abolishing or limiting diversity of citizenship jurisdiction. Other
legislative relief has been proposed. If only a question of statutory construction were involved,
we should not be prepared to abandon a doctrine so widely applied throughout nearly a century.
But the unconstitutionality of the course pursued has now been made clear, and compels us to do
so.
Third. Except in matters governed by the Federal Constitution or by acts of Congress, the
[substantive] law to be applied in any case is the law of the state. And whether the law of the
state shall be declared by its Legislature in a statute or by its highest court in a decision is not a
matter of federal concern. There is no federal general common law. Congress has no power to
declare substantive rules of common law applicable in a state whether they be local in their
nature or ‘general,’ be they commercial law or a part of the law of torts. And no clause in the
Constitution purports to confer such a power upon the federal courts. … ‘But, notwithstanding
the great names which may be cited in favor of the doctrine, and notwithstanding the frequency
with which the doctrine has been reiterated, there stands, as a perpetual protest against its
repetition, the constitution of the United States, which recognizes and preserves the autonomy
and independence of the states,—independence in their legislative and independence in their
judicial departments. Supervision over either the legislative or the judicial action of the states is
in no case permissible except as to matters by the constitution specifically authorized or
delegated to the United States. Any interference with either, except as thus permitted, is an
invasion of the authority of the state, and, to that extent, a denial of its independence.'
The fallacy underlying the rule declared in Swift v. Tyson is made clear by Mr. Justice
Holmes. The doctrine rests upon the assumption that there is ‘a transcendental body of law
outside of any particular State but obligatory within it unless and until changed by statute,’ that
federal courts have the power to use their judgment as to what the rules of common law are; and
that in the federal courts ‘the parties are entitled to an independent judgment on matters of
general law.’
...
Thus the doctrine of Swift v. Tyson is, as Mr. Justice Holmes said, ‘an unconstitutional
assumption of powers by the Courts of the United States which no lapse of time or respectable
array of opinion should make us hesitate to correct.’ In disapproving that doctrine we do not hold
unconstitutional section 34 of the Federal Judiciary Act of 1789 or any other act of Congress. We
merely declare that in applying the doctrine this Court and the lower courts have invaded rights
which in our opinion are reserved by the Constitution to the several states.
...
Reversed.
...
Mr. Justice Butler (dissenting).
...
The laws of a state are more usually understood to mean the rules and enactments promulgated
by the legislative authority thereof, or long-established local customs having the force of laws.
… Undoubtedly, the decisions of the local tribunals upon such subjects are entitled to, and will
receive, the most deliberate attention and respect of this court; but they cannot furnish positive
rules or conclusive authority, by which our own [federal] judgments are to be bound up and
governed.
...
This means that, so far as concerns the rule of decision now condemned, the Judiciary Act of
1789, passed to establish judicial courts to exert the judicial power of the United States, and
especially section 34 of that act as construed, is unconstitutional; that federal courts are now
bound to follow decisions of the courts of the state in which the controversies arise; and that
Congress is powerless otherwise to ordain. It is hard to foresee the consequences of the radical
change so made.
...
The Court’s opinion strikes down as unconstitutional section 34 as construed by our
decisions; it divests the Congress of power to prescribe rules to be followed by federal courts
when deciding questions of general law. In that broad field it compels this and the lower federal
courts to follow decisions of the courts of a particular state.
...
Notes and Questions:
1. What governing law distinction did Swift v. Tyson adopt? Erie overruled that
distinction. How so?
2. The Erie majority says: “There is no federal general common law.” Is that statement
overly broad? …………………….………………………………………………………………
3. One reason for Swift may be that for the first hundred years of the new Republic, the
federal courts exercised primarily diversity jurisdiction—to ensure that the state courts were true
to the ideals of the 1789 Judiciary Act. Congress did not enact general federal question
jurisdiction until 1875. Today, this latter federal power constitutes about seventy percent of the
federal caseload.
4. What rule did Erie adopt?
(a) Erie did not resolve whether the federal court in New York would have to apply
New York or Pennsylvania law. It did not address whether local state substantive law—or its
body of conflict of law rules—would be applied to cases touching and concerning two or more
states. This could lead to mischief, if a federal judge did not like the local substantive law result,
and could end-run it by applying a state’s conflict of laws rules that might apply the substantive
law of another state.
(b) Three years later, the Supreme Court closed this substantive law gap. In Klaxon Co.
v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941), the Court determined that federal trial judges
are not free to determine substantive law issues, in accordance with their own (Swift-like)
conception of the “better view” of the law. In the federal diversity choice of law context—where
the case facts touch and concern two or more states—they must, instead, apply the conflict of
laws rule of the state in which they sit.
5. Does Erie purport to address procedural differences? If not, then the Court would have
much work ahead of it, notwithstanding the seeming rule that federal courts have to apply [all]
state law in diversity cases. That would include the application of a state’s procedural laws,
when they could impact the outcome of the case.
GUARANTY TRUST CO. OF N.Y. v. YORK
United States Supreme Court
326 U.S. 99 (1945)
Mr. Justice Frankfurter delivered the [5-2] opinion of the Court.
...
[York and others sued Guarantee Trust (petitioner) in] a class action … brought in a
federal court solely because of diversity of citizenship, … based on an alleged breach of trust by
Guaranty in that it failed to protect the interests of the noteholders [including York] … and [that
it] failed to disclose its self-interest [in a related transaction]…. Petitioner moved for summary
judgment, which was granted…. On appeal, the Circuit Court of Appeals … held that in a suit
brought on the equity side of a federal district court that [trial] court is not required to apply the
State statute of limitations that would govern like suits in the courts of a State where the federal
court is sitting even though the exclusive basis of federal jurisdiction is diversity of citizenship.
…
In view of the basis of the decision below, it is not for us to consider whether the New
York statute would actually bar this suit were it brought in a State court. Our only concern is
with the holding that the federal courts in a suit like this are not bound by local [procedural] law.
We … [are not addressing] considerations relevant in disposing of questions that arise
when a federal court is adjudicating a claim based on a federal law. Our problem only touches
transactions for which rights and obligations are created by one of the States, and for the
assertion of which, in case of diversity of the citizenship of the parties, Congress has made a
federal court another available forum.
...
From the beginning there has been a good deal of talk in the cases that federal equity is a
separate legal system. And so it is, properly understood. The suits in equity of which the federal
courts have had ‘cognizance’ ever since 1789 constituted the body of law which had been
transplanted to this country from the English Court of Chancery. But this system of equity
‘derived its doctrines, as well as its powers, from its mode of giving relief.’ In giving federal
courts ‘cognizance’ of equity suits in cases of diversity jurisdiction, Congress never gave, nor did
the federal courts ever claim, the power to deny substantive rights created by State law or to
create substantive rights denied by State law.
And so this case reduces itself to the narrow question whether, when no recovery could
be had in a State court because the action is barred by the [state] statute of limitations, a federal
court in equity can take cognizance of the suit because there is diversity of citizenship between
the parties. Is the outlawry, according to State law, of a claim created by the States a matter of
‘substantive rights’ [thus triggering Erie] to be respected by a federal court of equity when that
court’s jurisdiction is dependent on the fact that there is a State-created right, or is such statute of
‘a mere remedial character,’ which a federal court may disregard [and thus proceed to hear the
case, barred by the state statute of limitations, under the federal courts’ equity powers].
...
Here we are dealing with a right to recover derived not from the United States but from
one of the States. When, because the plaintiff happens to be a nonresident, such a right is
enforceable in a federal as well as in a State court, the forms and mode of enforcing the right
may at times, naturally enough, vary because the two judicial systems are not identic[al]. But
since a federal court adjudicating a state-created right solely because of the diversity of
citizenship of the parties is for that purpose, in effect, only another court of the State, it cannot
afford recovery if the right to recover is made unavailable by the State nor can it substantially
affect the enforcement of the right as given by the State.
And so the question is … does it significantly affect the result of a litigation for a federal
court to disregard a law of a State that would be controlling in an action upon the same claim by
the same parties in a State court?
It is therefore immaterial whether statutes of limitation are characterized either as
‘substantive’ or ‘procedural’ in State court opinions…. In essence, the intent of that decision
[Erie] was to insure that, in all cases where a federal court is exercising jurisdiction solely
because of the diversity of citizenship of the parties, the outcome of the litigation in the federal
court should be substantially the same, so far as legal rules determine the outcome of a litigation,
as it would be if tried in a State court. The nub of the policy … is that for the same transaction
the accident of a suit by a non-resident litigant in a federal court instead of in a State court a
block away, should not lead to a substantially different result. And so, … we have held that in
diversity cases the federal courts must follow the law of the State as to burden of proof, as to
conflict of laws, Klaxon Co. v. Stentor Co., 313 U.S. 487, [and] as to contributory negligence….
… Erie R. Co. v. Tompkins has been applied with an eye alert to … avoiding disregard of State
law in diversity cases in the federal courts. A policy so important to our federalism must be kept
free from entanglements with analytical or terminological niceties.
Plainly enough, a statute that would completely bar recovery in a suit if brought in a State
court bears on a [vital] State-created right…. As to consequences that so intimately affect
recovery or non-recovery a federal court in a diversity case should follow State law … [and] the
crucial consideration that if a plea of the statute of limitations would bar recovery in a State
court, a federal court ought not to afford recovery.
...
To make an exception to Erie R. Co. v. Tompkins on the equity side of a federal court
[where federal judges would otherwise have the power to excuse delays in filing, based on the
equities of the particular case] is to reject the considerations of policy which … led to that
decision. Judge Augustus N. Hand thus summarized below the fatal objection to such inroad
upon Erie R. Co. v. Tompkins: ‘In my opinion it would be a mischievous practice to disregard
state statutes of limitation whenever federal courts think that the result of adopting them may be
inequitable. Such procedure would promote the choice of United States rather than of state courts
in order to gain the advantage of different laws. The main foundation for the criticism of Swift v.
Tyson was that a litigant in cases where federal jurisdiction is based only on diverse citizenship
may obtain a more favorable decision by suing in the United States courts.’ [citation omitted].
Diversity jurisdiction is founded on assurance to non-resident litigants of courts free from
susceptibility to potential local bias. … And so Congress afforded out-of-State litigants another
tribunal, not another body of law. The operation of a double system of conflicting laws in the
same State is plainly hostile to the reign of law. Certainly, the fortuitous circumstance of
residence out of a State of one of the parties to a litigation ought not to give rise to a
discrimination against others equally concerned but locally resident. The source of substantive
rights enforced by a federal court under diversity jurisdiction, it cannot be said too often, is the
law of the States. Whenever that law is authoritatively declared by a State, whether its voice be
the legislature or its highest court, such law ought to govern in litigation founded on that law,
whether the forum of application is a State or a federal court and whether the remedies be sought
at law or may be had in equity.
Dicta may be cited characterizing equity as an independent body of law. … But [such]
notions … have been replaced by a sharper analysis of what federal courts do when they enforce
rights that have no federal origin. …
The judgment is reversed and the case is remanded for proceedings not inconsistent with
this opinion.
So ordered.
Reversed.
...
Mr. Justice Rutledge.
I dissent.
...
[There is a] divide between the substantive law and the procedural or remedial law to be applied
by the federal courts in diversity cases, a division sharpened but not wiped out by Erie R. Co. v.
Tompkins…. The large division between adjective law and substantive law still remains, to
divide the power of Congress from that of the states and consequently to determine the power of
the federal courts to apply federal law or state law in diversity matters.
...
A long tradition, in the states and here, as well as in the common law which antedated both state
and federal law, has emphasized the remedial character of statutes of limitations, more especially
in application to equity causes.
...
The state of the forum is free to apply its own period of limitations, regardless of whether the
state originating the right has barred suit upon it. Whether or not the action will be held to be
barred depends therefore not upon the law of the state which creates the substantive right, but
upon the law of the state where suit may be brought. This in turn will depend upon where it may
be possible to secure service of process, and thus jurisdiction of the person of the defendant. It
may be therefore that because of the plaintiff’s inability to find the defendant in the jurisdiction
which creates his substantive right, he will be foreclosed of remedy by the sheer necessity of
going to the haven of refuge within which the defendant confines its ‘presence’ for jurisdictional
purposes. The law of the latter may bar the suit even though suit still would be allowed under the
law of the state creating the substantive right.
...
In my judgment this furnishes added reason for leaving any change [which would limit
federal equity power], if one is to be made, to the judgment of Congress. The next step may well
be to say that in applying the doctrine of laches a federal court must surrender its own judgment
and attempt to find out what a state court sitting a block away would do with that notoriously
amorphous doctrine.
...
Notes and Questions:
1. What was the issue in York? Justice Rutledge’s dissent refers to “laches.” What is that,
and why is it important?
2. As York states, “such law ought to govern in litigation founded on that law, whether
the forum of application is a State or a federal court.” That effectively means that state
“procedure” would govern—in addition to state substantive law per Erie—in future diversity
cases, so as to discourage any state-federal differences in diversity cases.
3. Erie did not decide which state’s law should apply in an interstate context—nor,
whether a federal judge was free to choose between a state’s internal substantive law, or its
choice of law principles. That “choice,” if left open to a federal judge, could facilitate her
arriving at a different decision than a state court judge. York refers (above) to Klaxton. Three
years after Erie, Klaxton decided that a federal judge must apply the substantive law of the state
in which s/he sits—including the forum’s choice of law rules, so as to promote uniformity of
decision in state and federal diversity cases. Klaxton did not, however, address the issues raised
in York.
BYRD V. BLUE RIDGE RURAL ELEC. CO-OP., INC.
United States Supreme Court
356 U.S. 525 (1958)
Mr. Justice Brennan delivered the [5-4] opinion of the Court.
This case was brought in the District Court for the Western District of South Carolina.
Jurisdiction was based on diversity of citizenship. The petitioner, a resident of North Carolina,
sued respondent, a South Carolina corporation, for damages for injuries allegedly caused by the
respondent’s negligence. …
The respondent is in the business of selling electric power to subscribers in rural sections
of South Carolina. The petitioner was employed as a lineman in the construction crew of a
construction contractor. The contractor … held a [sub]contract with the respondent. The
petitioner was injured while connecting power lines to one of the new substations.
One of respondent’s [substantive] affirmative defenses was that under the South Carolina
Workmen’s Compensation Act, the petitioner—because the work contracted to be done by his
employer was work of the kind also done by the respondent’s own construction and maintenance
crews—had the status of a statutory employee of the respondent and was therefore barred from
suing the respondent at law because obliged to accept statutory compensation benefits as the
exclusive remedy for his injuries [italics added]. …
I.
The Supreme Court of South Carolina has held that there is no particular formula by
which to determine whether an owner is a statutory employer under s[ection] 72-111. …………
...
II.
A question is also presented as to whether on remand [to the trial court] the factual issue
is to be decided by the judge or by the jury. The respondent argues on the basis of the decision of
the Supreme Court of South Carolina in Adams v. Davison-Paxon Co., that the issue of immunity
should be decided by the judge and not by the jury. … The South Carolina Supreme Court
reversed, holding that it was for the judge and not the jury to decide on the evidence whether the
owner was a statutory employer….
The respondent argues that this state-court decision governs the present diversity case and
‘divests the jury of its normal function’ to decide the disputed fact question of the respondent’s
immunity under s[ection] 72-111. This is to contend that the federal court is bound … to follow
the state court’s holding to secure uniform enforcement of the immunity created by the State.
First. It was decided in Erie R. Co. v. Tompkins that the federal courts in diversity cases
must respect the definition of state-created rights and obligations by the state courts.
. . . ……………………………………………….
Second. But cases following Erie have evinced a broader policy to the effect that the
federal courts should conform as near as may be—in the absence of other considerations—to
state rules even of form and mode where the state rules may bear substantially on the question
whether the litigation would come out one way in the federal court and another way in the state
court if the federal court failed to apply a particular local rule. E.g., Guaranty Trust Co. of New
York v. York. Concededly the nature of the tribunal which tries issues may be important in the
enforcement of the parcel of rights making up a cause of action or defense, and bear significantly
upon achievement of uniform enforcement of the right. It may well be that in the instant
personal-injury case the outcome would be substantially affected by whether the issue of
immunity is decided by a judge or a jury. Therefore, were ‘outcome’ the only consideration, a
strong case might appear for saying that the federal court should follow the state practice.
But there are affirmative countervailing considerations at work here. The federal system
is an independent system for administering justice to litigants who properly invoke its
jurisdiction. An essential characteristic of that system is the manner in which, in civil commonlaw actions, it distributes trial functions between judge and jury and, under the influence—if not
the command10—of the Seventh Amendment, assigns the decisions of disputed questions of fact
to the jury. The policy of uniform enforcement of state-created rights and obligations, see, e.g.,
Guaranty Trust Co. of New York v. York, cannot in every case exact compliance with a state
rule—not bound up with [substantive] rights and obligations—which disrupts the federal system
of allocating functions between judge and jury. Thus the inquiry here is whether the federal
policy favoring jury decisions of disputed fact questions should yield to the state rule in the
10
Our conclusion makes unnecessary the consideration of—and we intimate no view upon—the
constitutional question whether the right of jury trial protected in federal courts by the Seventh Amendment
embraces the factual issue of statutory immunity when asserted, as here, as an affirmative defense in a common-law
negligence action. ……………………………………………………………………………………………………..
interest of furthering the objective that the litigation should not come out one way in the federal
court and another way in the state court.
We think that in the circumstances of this case the federal court should not follow the
state rule. It cannot be gainsaid that there is a strong federal policy against allowing state rules to
disrupt the judge-jury relationship in the federal courts. … …………………………………
Third. We have discussed the problem upon the assumption that the outcome of the
litigation may be substantially affected by whether the issue of immunity is decided by a judge or
a jury. But clearly there is not present here the certainty that a different result would follow, or
even the strong possibility that this would be the case. … We do not think the likelihood of a
different result is so strong as to require the federal practice of jury determination of disputed
factual issues to yield to the state rule in the interest of uniformity of outcome.
...
Reversed and remanded.
Mr. Justice Whittaker concurring in part and dissenting in part.
...
The Court, although premising its conclusion ‘upon the assumption that the outcome of the
litigation may be substantially affected by whether the issue of immunity is decided by a judge or
a jury,’ holds that the issue is to be determined by a jury—not by the judge. I cannot agree to this
conclusion for the following reasons.
...
It thus seems to be settled under the South Carolina Workmen’s Compensation Law, and
the decisions of the highest court of that State construing it, that the question whether exclusive
jurisdiction, in cases like this, is vested in its Industrial Commission or in its courts of general
jurisdiction is one for decision by the court, not by a jury. … A Federal District Court sitting in
South Carolina may not legally reach a substantially different result than would have been
reached upon a trial of the same case ‘in a State court a block away.’ Guaranty Trust Co. of New
York v. York.
… It may well be that in the instant personal-injury case the outcome would be
substantially affected by whether the issue of immunity is decided by a judge or a jury.’ And the
Court premises its conclusion ‘upon the assumption that the outcome of the litigation may be
substantially affected by whether the issue of immunity is decided by a judge or a jury.’ …
The words ‘substantive’ and ‘procedural’ are mere conceptual labels and in no sense
talismanic. To call a legal question by one or the other of those terms does not resolve the
question otherwise than as a purely authoritarian performance. When a question though
denominated ‘procedural’ is nevertheless so ‘substantive’ as materially to affect the result of a
trial, federal courts, in enforcing state-created rights, are not free to disregard it, on the ground
that it is ‘procedural,’ for such would be to allow, upon mere nomenclature, a different result in a
state court from that allowable in a federal court though both are, in effect, courts of the State
and ‘sitting side by side.’ … Inasmuch as the law of South Carolina, as construed by its highest
court, requires its courts—not juries—to determine whether jurisdiction over the subject matter
of cases like this is vested in its Industrial Commission, and inasmuch as the Court’s opinion
concedes ‘that in the instant personal-injury case the outcome would be substantially affected by
whether the issue of immunity is decided by a judge or a jury,’ it follows that in this diversity
case the jurisdictional issue must be determined by the judge—not by the jury. Insofar as the
Court holds that the question of jurisdiction should be determined by the jury, I think the Court
departs from its past decisions. I therefore respectfully dissent from part II of the opinion of the
Court.
...
Notes and Questions:
1. Practice pointer: Workers’ compensation (W.C.) is often the only remedy for an
injured worker. When the local state W.C. law applies, it is a defense to attempted litigation in a
judicial setting. As a practical matter, you should always consider whether a potential client was
hurt while on the job. Another litigation defense is an arbitration clause, which can have a
significant impact in a host of settings, including employment disputes, and suits against an
increasing number of industry defendants. These are the kinds of matters that influence whether
a lawyer will take a particular case, and whether non-judicial remedies must be pursued. The
substantive issue in Byrd was whether the injured plaintiff—who was not the defendant’s fulltime employee—was nevertheless an employee within the meaning of the South Carolina W.C.
statute. This issue is reminiscent of whether International Shoe Company was an employer,
within the meaning of Washington state’s unemployment compensation laws.
2. What was the conflict in Byrd? The majority and dissent are split on whether it would
substantially affect the outcome. One could argue, academically, whether the procedural statefederal difference is significant. The practical reality is that many practitioners believe this
difference is huge. The majority nevertheless assumes the difference is not outcomedeterminative. If not, one might wonder why the case went all the way to the U.S. Supreme
Court on this issue.
3. Did Byrd overrule York? Did the Court introduce a bright line rule, or a guideline, for
future cases? See generally: “[T]he right to a jury trial in the federal courts is to be determined as
a matter of federal law in diversity as well as other actions.” Although “the substantive
dimension of the claim asserted finds its source in state law” in diversity cases, “the
characterization of that state-created claim as legal or equitable for purposes of whether a right to
jury trial is indicated must be made by recourse to federal law.” Elm Ridge Exploration Co.,
LLC v. Engle, 721 F.3d 1199, 1221–1222 (10th Cir., 2013).
HANNA v. PLUMER
United States Supreme Court
380 U.S. 460 (1965)
Mr. Chief Justice Warren delivered the opinion of the Court.
The question to be decided is whether, in a civil action where the jurisdiction of the
United States district court is based upon diversity of citizenship between the parties, service of
process shall be made in the manner prescribed by state law or that set forth in Rule 4(d)(1) of
the Federal Rules of Civil Procedure.
On February 6, 1963, petitioner, a citizen of Ohio, filed her complaint in the District
Court for the District of Massachusetts, claiming damages … for personal injuries resulting from
an automobile accident in South Carolina, allegedly caused by the negligence of one Louise
Plumer Osgood, a Massachusetts citizen deceased at the time of the filing of the complaint.
Respondent, Mrs. Osgood’s executor and also a Massachusetts citizen, was named as defendant.
On February 8 [just beyond one year from the accident], service was made by leaving copies of
the summons and the complaint with respondent’s wife at his residence, concededly in
compliance with Rule 4(d)(1) [now 4(e)(2)(B)], which provides:
… Service shall be made as follows:
(1) Upon an individual other than an infant or an incompetent person, by
delivering a copy of the summons and of the complaint to him personally or by leaving
copies thereof at his dwelling house or usual …place of abode with some person of
suitable age and discretion then residing therein ….
Respondent filed his answer … alleging, inter alia, that the action could not be
maintained because it had been brought ‘contrary to and in violation of the provisions of
Massachusetts General Laws Section 9.’ That section provides:
… [A]n executor or administrator shall not be held to answer to an action by a
creditor of the deceased which is not commenced within one year … served by delivery
in hand upon such executor or administrator or service thereof accepted by him or a
notice stating the name of the estate, the name and address of the creditor, the amount of
the claim and the court in which the action has been brought has been filed in the proper
registry of probate. …
… [T]he District Court granted respondent’s motion for summary judgment …
[concluding] that the adequacy of the service was to be measured by s[ection] 9, with which, the
court held, petitioner had not complied. On appeal, petitioner admitted noncompliance with
s[ection] 9, but argued that Rule 4(d)(1) defines the method by which service of process is to be
effected in [federal] diversity actions. The Court of Appeals …1 concluded that the conflict of
state and federal rules was over ‘a substantive rather than a procedural matter,’ and unanimously
affirmed. Because of the threat to the goal of uniformity of federal procedure posed by the
decision below, we granted certiorari.
We conclude that the adoption of Rule 4(d)(1), designed to control service of process in
diversity actions,3 neither exceeded the congressional mandate embodied in the Rules Enabling
Act nor transgressed constitutional bounds, and that the Rule is therefore the standard against
which the District Court should have measured the adequacy of the service. Accordingly, we
reverse the decision of the Court of Appeals.
The Rules Enabling Act, 28 U.S.C. s[ection] 2072, provides, in pertinent part:
The Supreme Court shall have the power to prescribe, by general rules, the forms
of process, writs, pleadings, and motions, and the practice and procedure of the district
courts of the United States in civil actions.
Such rules shall not abridge, enlarge or modify any substantive right and shall
preserve the right of trial by jury….
1
… The purpose of this part of the [MA] statute … is … to insure that executors will receive actual notice
of claims. Actual notice is of course also the goal of Rule 4(d)(1); however, the Federal Rule reflects a determination
that this goal can be achieved by a method less cumbersome than that prescribed in s[ection] 9. In this case the goal
seems to have been achieved; although the affidavit filed by respondent in the District Court asserts that he had not
been served in hand nor had he accepted service, it does not allege lack of actual notice. ……………………….
3
‘These rules govern the procedure in the United States district courts in all suits of a civil nature whether
cognizable as cases at law or in equity….’ Fed.Rules Civ.Proc. 1….
Under the cases construing the scope of the Enabling Act, Rule 4(d)(1) clearly passes
muster. Prescribing the manner in which a defendant is to be notified that a suit has been
instituted against him, it relates to the ‘practice and procedure of the district courts.’
‘The test must be whether a rule really regulates procedure,-the judicial process for enforcing
rights and duties recognized by substantive law and for justly administering remedy and redress
for disregard or infraction of them.’ …………………………………………………………..
...
Thus were there no conflicting state procedure, Rule 4(d)(1) would clearly control.
National Equipment Rental, Limited v. Szukhent. …
Respondent, by placing primary reliance on York …, suggests that the Erie doctrine acts
as a check on the Federal Rules of Civil Procedure, that despite the clear command of Rule
4(d)(1), Erie and its progeny demand the application of the Massachusetts rule. Reduced to
essentials, the argument is: (1) Erie, as refined in York, demands that federal courts apply state
law whenever application of federal law in its stead will alter the outcome of the case. (2) In this
case, a determination that the Massachusetts service requirements obtain will result in immediate
victory for respondent. If, on the other hand, it should be held that Rule 4(d)(1) is applicable, the
litigation will continue, with possible victory for petitioner. (3) Therefore, Erie demands
application of the Massachusetts rule. The syllogism possesses an appealing simplicity, but is for
several reasons invalid.
In the first place, it is doubtful that, even if there were no Federal Rule making it clear
that in-hand service is not required in diversity actions, the Erie rule would have obligated the
District Court to follow the Massachusetts procedure. ‘Outcome-determination’ analysis was
never intended to serve as a talisman. Byrd v. Blue Ridge Rural Elec. Cooperative. Indeed, the
message of York itself is that choices between state and federal law are to be made not by
application of any automatic, ‘litmus paper’ criterion, but rather by reference to the policies
underlying the Erie rule.
The … Erie rule is rooted in part in a realization that it would be unfair for the character
of result of a litigation materially to differ because the suit had been brought in a federal court.
The decision was also in part a reaction to the practice of ‘forum-shopping’ which had
grown up in response to the rule of Swift v. Tyson. That the York test was an attempt to effectuate
these policies is demonstrated by the fact that the opinion framed the inquiry in terms of
‘substantial’ variations between state and federal litigation. … The ‘outcome-determination’ test
therefore cannot be read without reference to the twin aims of the Erie rule: discouragement of
forum-shopping and avoidance of inequitable administration of the laws.
The difference between the conclusion that the Massachusetts rule is applicable, and the
conclusion that it is not, is of course at this point ‘outcome-determinative’ in the sense that if we
hold the state rule to apply, respondent prevails, whereas if we hold that Rule 4(d)(1) governs,
the litigation will continue. But in this sense every procedural variation is ‘outcomedeterminative.’ For example, having brought suit in a federal court, a plaintiff cannot then insist
on the right to file subsequent pleadings in accord with the time limits applicable in state courts,
even though enforcement of the federal timetable will, if he continues to insist that he must meet
only the state time limit, result in determination of the controversy against him. So it is here. …
There is, however, a more fundamental flaw in respondent’s syllogism: the incorrect
assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test of the validity
and therefore the applicability of a Federal Rule of Civil Procedure. The Erie rule has never been
invoked to void a Federal Rule. It is true that there have been cases where this Court has held
applicable a state rule in the face of an argument that the situation was governed by one of the
Federal Rules. But the holding of each such case was not that Erie commanded displacement of a
Federal Rule by an inconsistent state rule, but rather that the scope of the Federal Rule was not as
broad as the losing party urged, and therefore, there being no Federal Rule which covered the
point in dispute, Erie commanded the enforcement of state law.
...
(Here, of course, the clash is unavoidable; Rule 4(d)(1) says—implicitly, but with
unmistakable clarity—that in-hand service is not required in federal courts.) ….
… When a situation is covered by one of the Federal Rules, the question facing the court
is a far cry from the typical, relatively unguided Erie Choice: the court has been instructed to
apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and
Congress erred in their prima facie judgment that the Rule in question transgresses neither the
terms of the Enabling Act nor constitutional restrictions.
...
‘One of the shaping purposes of the Federal Rules is to bring about uniformity in the
federal courts by getting away from local rules. This is especially true of matters which relate to
the administration of legal proceedings, an area in which federal courts have traditionally exerted
strong inherent power, completely aside from the powers Congress expressly conferred in the
Rules. The purpose of the Erie doctrine … was never to bottle up federal courts with [the terms]
‘outcome-determinative’ and ‘integral—relations’ stoppers—when there are ‘affirmative
countervailing (federal) considerations’ and when there is a Congressional mandate (the Rules)
supported by constitutional authority.’
Erie and its offspring cast no doubt on the long-recognized power of Congress to
prescribe housekeeping rules for federal courts even though some of those rules will inevitably
differ from comparable state rules. … Thus, though a court, in measuring a Federal Rule against
the standards contained in the Enabling Act and the Constitution, need not wholly blind itself to
the degree to which the Rule makes the character and result of the federal litigation stray from
the course it would follow in state courts, it cannot be forgotten that the Erie rule, and the
guidelines suggested in York, were created to serve another purpose altogether. To hold that a
Federal Rule of Civil Procedure must cease to function whenever it alters the mode of enforcing
state-created rights would be to disembowel either the Constitution’s grant of power over federal
procedure or Congress’ attempt to exercise that power in the Enabling Act. Rule 4(d)(1) is valid
and controls the instant case.
Reversed.
...
Mr. Justice Harlan, concurring. It is unquestionably true that up to now Erie and the cases
following it have not succeeded in articulating a workable doctrine governing choice of law in
diversity actions. …
Erie was … one of the modern cornerstones of our federalism, expressing policies that
profoundly touch the allocation of judicial power between the state and federal systems. Erie
recognized that there should not be two conflicting systems of law controlling the primary
activity of citizens, for such alternative governing authority must necessarily give rise to a
debilitating uncertainty in the planning of everyday affairs. And it recognized that the scheme of
our Constitution envisions an allocation of law-making functions between state and federal
legislative processes which is undercut if the federal judiciary can make substantive law
affecting state affairs beyond the bounds of congressional legislative powers in this regard. Thus,
in diversity cases Erie commands that it be the state law governing primary private activity
which prevails.
… The Court is quite right in stating that the ‘outcome-determinative’ test of Guaranty
Trust Co. of New York v. York, if taken literally, proves too much, for any rule, no matter how
clearly ‘procedural,’ can affect the outcome of litigation if it is not obeyed. In turning from the
‘outcome’ test of York back to the unadorned forum-shopping rationale of Erie, however, the
Court falls prey to like oversimplification, for a simple forum-shopping rule also proves too
much; litigants often choose a federal forum merely to obtain what they consider the advantages
of the Federal Rules of Civil Procedure or to try their cases before a supposedly more favorable
judge. To my mind the proper line of approach in determining whether to apply a state or a
federal rule, whether ‘substantive’ or ‘procedural,’ is to stay close to basic principles by
inquiring if the choice of rule would substantially affect those primary decisions respecting
human conduct which our constitutional system leaves to state regulation. If so, Erie and the
Constitution require that the state rule prevail, even in the face of a conflicting federal rule.
...
The Court weakens, if indeed it does not submerge, this basic principle by finding, in
effect, a grant of substantive legislative power in the constitutional provision for a federal court
system … and through it, setting up the Federal Rules as a body of law inviolate.
...
So long as a reasonable man could characterize any duly adopted federal rule as
‘procedural,’ the Court, unless I misapprehend what is said, would have it apply no matter how
seriously it frustrated a State’s substantive regulation of the primary conduct and affairs of its
citizens. Since the members of the Advisory Committee, the Judicial Conference, and this Court
who formulated the Federal Rules are presumably reasonable men, it follows that the integrity of
the Federal Rules is absolute. Whereas the unadulterated outcome and forum-shopping tests may
err too far toward honoring state rules, I submit that the Court’s ‘arguably procedural, ergo
constitutional’ test moves too fast and far in the other direction.
...
Notes and Questions:
1. Per the majority: “The ‘outcome-determination’ test therefore cannot be read without
reference to … discouragement of forum-shopping and avoidance of inequitable administration
of the laws.” Given the result, that Rule 4 governs in all cases to which it clearly applies, does
that not promote forum shopping?
2. Per Justice Harlan’s concurring opinion: “It is unquestionably true that up to now Erie
and the cases following it have not succeeded in articulating a workable doctrine governing
choice of law in diversity actions.” Did Hanna succeed, where all the others failed?
ASHCROFT v. IQBAL
United States Supreme Court
556 U.S. 662 (2009)
Professor’s Note: The following excerpt (used with permission) regarding Iqbal
precedent appears in Levine, Slomanson and Shapell, Cases and Materials on California
Civil Procedure, 4th edition (Thomson-West, 2011), p.126–129. Iqbal starts on p. 3 below:
(b) “Notice” Versus “Fact” Pleading
Introduction. In your federal procedure course, you used the term claim to refer to the
plaintiff’s charging allegations against the defendant. The deceptively simple federal rules
formula provides that “a claim for relief must contain * * * a short and plain statement of the
claim showing that the pleader is entitled to relief.” FRCP 8(a)(2). The California counterpart to
claim is cause of action. A pleading in state court “must contain * * * [a] statement of the facts
constituting the cause of action, in ordinary and concise language.” CCP § 422.10(a)(1). One
may explore the technical distinctions between these two terms in the comprehensive hornbooks.
See, e.g., Jack H. Friedenthal, Mary Kay Kane & Arthur R. Miller, Civil Procedure §§ 5.4–5.10
(4th ed.2005). The following materials provide the essentials:
Pleading in Federal Court. For nearly 50 years, the Supreme Court of the United States
consistently characterized the federal pleading standard as follows: “[A] complaint should not be
dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355
U.S. 41, 46–47, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). For example, a 2002 unanimous decision
reminded the lower federal courts that imposing heightened pleading requirements:
conflicts with Federal Rule of Civil Procedure 8(a)(2) * * *. Such a statement
must simply “give the defendant fair notice of what the plaintiff's claim is and the
grounds upon which it rests.” This simplified notice pleading standard relies on
liberal discovery rules and summary judgment motions to define disputed facts
and issues and to dispose of unmeritorious claims.
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 998, 152 L.Ed.2d 1 (2002).
The 50–year reign of this generous federal approach to pleading appears to have ended.
Justice Souter’s majority opinion in a 2007 civil antitrust conspiracy case proclaimed the
“retirement” of part of Conley’s articulation of the federal pleading standard. The Court
announced that Conley’s “no set of facts” language was “best forgotten as an incomplete,
negative gloss on an accepted pleading standard.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
562, 127 S.Ct. 1955, 1969, 167 L.Ed.2d 929 (2007). The Court’s alternative articulation was
that:
[w]hile a complaint * * * does not need detailed factual allegations, a plaintiff’s
obligation to provide the “grounds” of his “entitle[ment] to relief” requires more than
labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do * * *. Factual allegations must be enough to raise a right to relief above the
speculative level * * * [and] “ ‘the pleading must contain something more ... than ... a
statement of facts that merely creates a suspicion [of] a legally cognizable right of
action.’ ”
***
While, for most types of cases, the Federal Rules eliminated the cumbersome requirement
that a claimant “set out in detail the facts upon which he bases his claim,” Rule 8(a)(2)
still requires a “showing,” rather than a blanket assertion, of entitlement to relief. Without
some factual allegation in the complaint, it is hard to see how a claimant could satisfy the
requirement of providing not only “fair notice” of the nature of the claim, but also
“grounds” on which the claim rests. Rule 8(a) “contemplate[s] the statement of
circumstances, occurrences, and events in support of the claim presented” and does not
authorize a pleader's “bare averment that he wants relief and is entitled to it.”
Id. at 555–556 & n.3. In sum, the Court demanded that plaintiffs use nonconclusory allegations
in their complaints while crossing “the line between possibility and plausibility of ‘entitle[ment]
to relief.’ ” 550 U.S. at 557.
In May 2009, the U.S. Supreme Court confirmed that Bell Atlantic applies to all federal
cases governed by FRCP 8(a)(2). “[O]nly a complaint that states a plausible claim for relief
survives a motion to dismiss.” Ashcroft v. Iqbal, 556 U.S. __, ___, 129 S.Ct. 1937, 1950, 173
L.Ed.2d 868 (2009). It is unclear to what degree Bell Atlantic and Iqbal will actually transform
federal pleading. Cases and scholars still refer to the notice pleading standard, albeit with the
recognition that courts now must implement the new “plausibility” component. Although “notice
pleading” was always more a term of art than a precise description of actual practice in federal
court, no term—such as “plausibility pleading”—has supplanted it. See Adam Steinman, The
Pleading Problem, 62 Stan.L.Rev. 1293, 1328 (2010) (contending the new term should be “plain
pleading”). Bills proposed in Congress would overrule Iqbal’s seemingly stringent pleading
standard by returning to the more liberal Conley interpretation, but no bill has become law to
date. Lower courts may try to limit the reach of the new standard in certain circumstances. See,
e.g., Hebbe v. Pliler, 611 F.3d 1202 (9th Cir.2010) (Iqbal does not apply to pro se complaints).
The ultimate impact of Bell Atlantic and Iqbal will not be known for some time.
Metropolitan Detention Center, Brooklyn New York,
where Javad Iqbal was placed in pretrial detention.
Source: < http://www.bop.gov/locations/institutions/bro/graphics/BRO.jpg>
Reprinted with permission of The Federal Bureau of Prisons
Justice Kennedy delivered the [5-4] opinion of the Court.
Respondent Javaid Iqbal is a citizen of Pakistan and a Muslim. In the wake of
the September 11, 2001, terrorist attacks he was arrested in the United States on criminal
charges and detained by federal officials. Respondent claims he was deprived of
various constitutional protections while in federal custody. To redress the alleged
deprivations, respondent filed a complaint against numerous federal officials, including
John Ashcroft, the former Attorney General of the United States, and Robert Mueller,
the Director of the Federal Bureau of Investigation (FBI). Ashcroft and Mueller are the
[only] petitioners in the case now before us. As to these two petitioners, the complaint
alleges that they adopted an unconstitutional policy that subjected respondent to harsh
conditions of confinement on account of his race, religion, or national origin.
In the District Court petitioners raised the defense of qualified immunity and
moved to dismiss the suit, contending the complaint was not sufficient to state a claim
against them. The District Court denied the motion to dismiss, concluding the complaint
was sufficient to state a claim despite petitioners’ official status at the times in
question. Petitioners brought an interlocutory appeal in the Court of Appeals for the
Second Circuit. The court * * * affirmed the District Court’s decision.
Respondent’s account of his prison ordeal could, if proved, demonstrate
unconstitutional misconduct by some governmental actors. But the allegations and pleadings
with respect to these actors are not before us here. This case instead turns on a narrower
question: Did respondent, as the plaintiff in the District Court, plead factual matter that, if
taken as true, states a claim that petitioners [Ashcroft and Mueller personally] deprived him
of his clearly established constitutional rights. We hold respondent’s pleadings are
insufficient.
I
Following the 2001 attacks, the FBI and other entities within the Department of
Justice * * * [¶] questioned more than 1,000 people with suspected links to the attacks in
particular or to terrorism in general. Of those individuals * * * a 184-member subset of
that group was deemed to be “of ‘high interest’” to the investigation. The high-interest
detainees were held under restrictive conditions designed to prevent them from
communicating with the general prison population or the outside world.
Respondent was one of the[se] detainees. According to his complaint, in
November 2001 agents of the FBI and Immigration and Naturalization Service arrested
him on charges of fraud in relation to identification documents and conspiracy to defraud
the United States. Pending trial for those crimes, respondent was housed at the
Metropolitan Detention Center (MDC) in Brooklyn, New York. * * * [He] was placed in a
section of the MDC known as the Administrative Maximum Special Housing Unit
(ADMAX SHU). As the facility’s name indicates, the ADMAX SHU incorporates the
maximum security conditions allowable under Federal Bureau of Prison regulations.
ADMAX SHU detainees were kept in lockdown 23 hours a day, spending the remaining
hour outside their cells in handcuffs and leg irons accompanied by a four-officer
escort.
Respondent pleaded guilty to the criminal charges, served a term of imprisonment,
and was removed to his native Pakistan. He then filed a Bivens action in the United States
District Court for the Eastern District of New York against 34 current and former federal
officials and 19 “John Doe” federal corrections officers. See Bivens v. Six Unknown Fed.
Narcotics Agents, 403 U.S. 388 (1971). The defendants range from the correctional officers
who had day-to-day contact with respondent during the term of his confinement, to the
wardens of the MDC facility, all the way to petitioners—officials who were at the
highest level of the federal law enforcement hierarchy.
The 21-cause-of-action complaint does not challenge respondent’s arrest or
his confinement in the MDC’s general prison population. Rather, it concentrates on his
treatment while confined to the ADMAX SHU. The complaint sets forth various claims
against defendants who are not before us [italics added]. For instance, the complaint alleges
that respondent’s jailors “kicked him in the stomach, punched him in the face, and
dragged him across” his cell without justification; subjected him to serial strip and bodycavity searches when he posed no safety risk to himself or others; and refused to let him
and other Muslims pray because there would be “[n]o prayers for terrorists.”
The allegations against petitioners [Ashcraft and Mueller] are the only ones relevant
here. The complaint contends that petitioners designated respondent a person of high
interest on account of his race, religion, or national origin, in contravention of the
First and Fifth Amendments to the Constitution. The complaint alleges that “the [FBI],
under the direction of Defendant MUELLER, arrested and detained thousands of Arab
Muslim men ... as part of its investigation of the events of September 11.” It further
alleges that “[t]he policy of holding post-September-11th detainees in highly restrictive
conditions of confinement until they were ‘cleared’ by the FBI was approved by
Defendants ASHCROFT and MUELLER in discussions in the weeks after September 11,
2001.” Lastly, the complaint posits that petitioners “each knew of, condoned, and
willfully and maliciously agreed to subject” respondent to harsh conditions of
confinement “as a matter of policy, solely on account of [his] religion, race, and/or national
origin and for no legitimate penological interest.” The pleading names Ashcroft as the
“principal architect” of the policy, and identifies Mueller as “instrumental in [its] adoption,
promulgation, and implementation.” * * * ………………………… ..…………….
…………………….
III
* * * [W]e begin by taking note of the elements a plaintiff must plead to state a
claim of unconstitutional discrimination against officials entitled to assert the defense
of qualified immunity.
***
Based on the rules our precedents establish, respondent correctly concedes that
Government officials may not be held liable for the unconstitutional conduct of their
subordinates under a theory of respondeat superior. (“[I]t is undisputed that supervisory
Bivens liability cannot be established solely on a theory of respondeat superior. ”) * * *
Because vicarious liability is inapplicable to Bivens and § 1983 [civil rights] suits, a
plaintiff must plead that each Government-official defendant, through the official’s own
individual actions, has violated the Constitution.
* * * Where the claim is invidious discrimination in contravention of the First and
Fifth Amendments, our decisions make clear that the plaintiff must plead and prove that the
defendant acted with discriminatory purpose. *** It follows that, to state a claim based on a
violation of a clearly established right, respondent must plead sufficient factual matter to
show that petitioners adopted and implemented the detention policies at issue not for a
neutral, investigative reason but for the purpose of discriminating on account of race,
religion, or national origin.
* * * Absent [unchangeable] vicarious liability, each Government official, his or her
title notwithstanding, is only liable for his or her own misconduct. * * *
IV
A
We turn to respondent’s complaint. Under Federal Rule of Civil Procedure
8(a)(2), a pleading must contain a “short and plain statement of the claim showing that
the pleader is entitled to relief.” As the Court held in Twombly, the pleading standard Rule
8 announces does not require “detailed factual allegations,” but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me
accusation. A pleading that offers
“labels and conclusions” or “a formulaic recitation of the elements of a cause of action
will not do.” Nor does a complaint suffice if it tenders “naked assertion[s]” devoid of
“further factual enhancement.”
To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to “state a claim to relief that is plausible on its face.” A claim
has facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged. The
plausibility standard is not akin to a “probability requirement,” but it asks for more than a
sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts
that are “merely consistent with” a defendant's liability, it “stops short of the line
between possibility and plausibility of ‘entitlement to relief.’ ”
Two working principles underlie our [prior] decision[s] * * *. First, the tenet that a
court must accept as true all of the allegations contained in a complaint is inapplicable
to legal conclusions. Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice. * * * Rule 8 marks a notable and
generous departure from the hyper-technical, code-pleading regime of a prior era, but it
does not unlock the doors of discovery for a plaintiff armed with nothing more than
conclusions. Second, only a complaint that states a plausible claim for relief survives a
motion to dismiss. Determining whether a complaint states a plausible claim for relief will,
as the Court of Appeals observed, be a context-specific task that requires the reviewing court
to draw on its judicial experience and common sense. But where the well-pleaded facts do
not permit the court to infer more than the mere possibility of misconduct, the
complaint has alleged-but it has not “show[n]”—“that the pleader is entitled to relief.”
In keeping with these principles a court considering a motion to dismiss can
choose to begin by identifying pleadings that, because they are no more than conclusions,
are not entitled to the assumption of truth. While legal conclusions can provide the
framework of a complaint, they must be supported by factual allegations. When there are
well-pleaded factual allegations, a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.
***
B
* * * [W]e conclude that respondent’s complaint has not “nudged [his] claims”
of invidious discrimination “across the line from conceivable to plausible.”
We begin our analysis by identifying the allegations in the complaint that are not
entitled to the assumption of truth. Respondent pleads that petitioners “knew of, condoned,
and willfully and maliciously agreed to subject [him]” to harsh conditions of confinement
“as a matter of policy, solely on account of [his] religion, race, and/or national origin
and for no legitimate penological interest.” The complaint alleges that Ashcroft was the
“principal architect” of this invidious policy, and that Mueller was “instrumental” in
adopting and executing it. These bare assertions * * * amount to nothing more than a
“formulaic recitation of the elements” of a constitutional discrimination claim, namely,
that petitioners adopted a policy [intentionally] “ ‘because of,’ not merely ‘in spite of,’ its
adverse effects upon an identifiable group.” As such, the allegations are conclusory and
not entitled to be assumed true. To be clear, we do not reject these bald allegations on the
ground that they are unrealistic or nonsensical. * * * It is the conclusory nature of
respondent’s allegations, rather than their extravagantly fanciful nature, that disentitles them
to the presumption of truth.
We next consider the factual allegations in respondent’s complaint to determine
i f t h e y plausibly suggest an entitlement to relief. The complaint alleges that “the
[FBI], under the direction of Defendant MUELLER, arrested and detained thousands of
Arab Muslim men ... as part of its investigation of the events of September 11.” It further
claims that “[t]he policy of holding post-September-11th detainees in highly restrictive
conditions of confinement until they were ‘cleared’ by the FBI was approved by
Defendants ASHCROFT and MUELLER in discussions in the weeks after September
11, 2001.” Taken as true, these allegations are consistent with petitioners’ purposefully
designating detainees “of high interest” because of their race, religion, or national origin.
But given more likely explanations, they do not plausibly establish this purpose.
The September 11 attacks were perpetrated by 19 Arab Muslim hijackers who
counted themselves members in good standing of al Qaeda, an Islamic fundamentalist
group. Al Qaeda was headed by another Arab Muslim—Osama bin Laden—and composed
in large part of his Arab Muslim disciples. It should come as no surprise that a
legitimate policy directing law enforcement to arrest and detain individuals because of their
suspected link to the attacks would produce a disparate, incidental impact on Arab
Muslims, even though the purpose of the policy was to target neither Arabs nor Muslims.
On the facts respondent alleges the arrests Mueller oversaw were likely lawful and
justified by his nondiscriminatory intent to detain aliens who were illegally present in
the United States and who had potential connections to those who committed terrorist
acts. As between that “obvious alternative explanation” for the arrests, and the purposeful,
invidious discrimination respondent asks us to infer, discrimination is not a plausible
conclusion.
But even if the complaint’s well-pleaded facts give rise to a plausible inference
that respondent’s arrest was the result of unconstitutional discrimination, that inference
alone would not entitle respondent to relief. It is important to recall that respondent’s
complaint challenges neither the constitutionality of his arrest nor his initial detention in
the MDC. Respondent’s constitutional claims against petitioners [Ashcroft and Mueller] rest
solely on their ostensible “policy of holding post-September-11th detainees” in the
ADMAX SHU once they were categorized as “of high interest.” To prevail on that theory,
the complaint must contain facts plausibly showing that petitioners purposefully adopted a
policy of classifying post-September-11 detainees as “of high interest” because of their
race, religion, or national origin.
This the complaint fails to do. Though respondent alleges that various other
defendants, who are not before us, may have labeled him a person of “of high interest”
for impermissible reasons, his only factual allegation against petitioners accuses them
of adopting a policy approving “restrictive conditions of confinement” for postSeptember-11 detainees until they were “ ‘cleared’ by the FBI.” Accepting the truth of that
allegation, the complaint does not show, or even intimate, that petitioners purposefully
housed detainees in the ADMAX SHU due to their race, religion, or national origin [italics
added]. All it plausibly suggests is that the Nation’s top law enforcement officers, in the
aftermath of a devastating terrorist attack, sought to keep suspected terrorists in the most
secure conditions available until the suspects could be cleared of terrorist activity.
Respondent does not argue, nor can he, that such a motive would violate
petitioners’ constitutional obligations. He would need to allege more by way of factual
content to “nudg[e]” his claim of purposeful discrimination “across the line from
conceivable to plausible.”
* * * [R]espondent’s complaint does not contain any factual allegation sufficient
to plausibly suggest petitioners’ discriminatory state of mind. His pleadings thus do not
meet the standard necessary to comply with Rule 8.
It is important to note, however, that we express no opinion concerning the
sufficiency of respondent’s complaint against the defendants who are not before us.
Respondent’s account of his prison ordeal alleges serious official misconduct that we need
not address here. Our decision is limited to the determination that respondent’s complaint
does not entitle him to relief from petitioners [Ashcroft and Mueller].
Respondent offers three arguments that bear on our disposition of his case, but
none is persuasive.
***
3
Respondent finally maintains that the Federal Rules expressly allow him to
allege petitioners’ discriminatory intent “generally,” which he equates with a conclusory
allegation (citing Fed. Rule Civ. Proc. 9[’s inapplicable heightened pleading
requirement]). It follows, respondent says, that his complaint is sufficiently well pleaded
because it claims that petitioners discriminated against him “on account of [his] religion,
race, and/or national origin and for no legitimate penological interest.” Were we required
to accept this allegation as true, respondent’s complaint would survive petitioners' motion
to dismiss. But the Federal Rules do not require courts to credit a complaint’s conclusory
statements without reference to its factual context.
***
V
We hold that respondent’s complaint fails to plead sufficient facts to state a claim
for purposeful and unlawful discrimination against petitioners. The Court of Appeals
should decide in the first instance whether to remand to the District Court so that
respondent can seek leave to amend his deficient complaint.
…
* * * ……..……………………
Justice Souter, w ith w h om Justice Stevens, Justice Ginsburg, a n d Justice Breyer
join, dissenting.
……………………………….…..
***
I
A
***
The District Court denied Ashcroft and Mueller’s motion to dismiss
Iqbal’s discrimination claim, and the Court of Appeals affirmed. Ashcroft and Mueller
then asked this Court to grant certiorari on two questions:
1. Whether a conclusory allegation that a cabinet-level officer or other high-ranking
official knew of, condoned, or agreed to subject a plaintiff to allegedly unconstitutional
acts purportedly committed by subordinate officials is sufficient to state individual-capacity
claims against those officials under Bivens.
***
In the first question, Ashcroft and Mueller did not ask whether “a cabinet-level
officer or other high-ranking official” who “knew of, condoned, or agreed to subject a
plaintiff to allegedly unconstitutional acts committed by subordinate officials” was subject
to liability under Bivens. In fact, they conceded in their petition for certiorari that they
would be liable if they had “actual knowledge” of discrimination by their subordinates and
exhibited “ ‘deliberate indifference’ ” to that discrimination. Instead, they asked the Court
to address whether Iqbal’s allegations against them (which they call conclusory) were
sufficient to satisfy Rule 8(a)(2) * * * .
***
First, Ashcroft and Mueller have, as noted, made the critical concession that
a supervisor’s knowledge of a subordinate’s unconstitutional conduct and deliberate
indifference to that conduct are grounds for Bivens liability. Iqbal seeks to recover on a
theory that Ashcroft and Mueller at least knowingly acquiesced (and maybe more than
acquiesced) in the discriminatory acts of their subordinates; if he can show this, he will
satisfy Ashcroft and Mueller’s own test for supervisory liability. We do not normally
override a party’s concession, [because our precedent establishes that] (“[i]t would be
inappropriate for us to [e]xamine in this case, without the benefit of the parties’ briefing,”
an issue the Government had conceded), and doing so is especially inappropriate when,
as here, the issue is unnecessary to decide the case. I would therefore accept Ashcroft and
Mueller’s concession for purposes of this case and proceed to consider whether the
complaint alleges at least knowledge and deliberate indifference.
***
II
Given petitioners’ concession, the complaint satisfies Rule 8(a)(2). Ashcroft and
Mueller admit they are liable for their subordinates’ conduct if they “had actual
knowledge of the assertedly discriminatory nature of the classification of suspects as
being ‘of high interest’ and they were deliberately indifferent to that discrimination.” ***
The complaint thus alleges, at a bare minimum, that Ashcroft and Mueller knew of and
condoned the discriminatory policy their subordinates carried out. Actually, the complaint
goes further in alleging that Ashcroft and Muller affirmatively acted to create the
discriminatory detention policy. If these factual allegations are true, Ashcroft and Mueller
were, at the very least, aware of the discriminatory policy being implemented and
deliberately indifferent to it.
Ashcroft and Mueller argue that these allegations fail to satisfy the “plausibility
standard” * * * . They contend that Iqbal’s claims are implausible because such high-ranking
officials “tend not to be personally involved in the specific actions of lower-level
officers down the bureaucratic chain of command.” * * * We made it clear, on the
contrary, that a court must take the allegations as true, no matter how skeptical the court
may be. The sole exception to this rule lies with allegations that are sufficiently fantastic to
defy reality as we know it: claims about little green men, or the plaintiff’s recent trip to
Pluto, or experiences in time travel. That is not what we have here.
* * * The complaint alleges that FBI officials discriminated against Iqbal solely
on account of his race, religion, and national origin, and it alleges the knowledge and
deliberate indifference that, by Ashcroft and Mueller’s own admission, are sufficient to make
them liable for the illegal action. Iqbal’s complaint therefore contains “enough facts to state
a claim to relief that is plausible on its face.”
***
But these allegations do not stand alone as the only significant, nonconclusory
statements in the complaint, for the complaint contains many allegations linking Ashcroft
and Mueller to the discriminatory practices of their subordinates. * * *
The * * * fallacy of the majority’s position, however, lies in looking at the relevant
assertions in isolation. The complaint contains specific allegations that, in the aftermath of
the September 11 attacks, the Chief of the FBI’s International Terrorism Operations Section
and the Assistant Special Agent in Charge for the FBI’s New York Field Office
implemented a policy that discriminated against Arab Muslim men, including Iqbal, solely
on account of their race, religion, or national origin. Viewed in light of these subsidiary
allegations, the allegations singled out by the majority as “conclusory” are no such
thing. Iqbal’s claim is not that Ashcroft and Mueller “knew of, condoned, and willfully
and maliciously agreed to subject” him to a discriminatory practice that is left undefined;
his allegation is that “they knew of, condoned, and willfully and maliciously agreed to
subject” him to a particular, discrete, discriminatory policy detailed in the complaint. Iqbal
does not say merely that Ashcroft was the architect of some amorphous discrimination, or
that Mueller was instrumental in an ill-defined constitutional violation; he alleges that they
helped to create the discriminatory policy he has described. Taking the complaint as a
whole, it gives Ashcroft and Mueller “ ‘fair notice of what the ... claim is and the grounds
upon which it rests.’ ”
***
Notes and Questions:
1. What is the federal pleading standard under the FRCP, as interpreted by the
U.S. Supreme Court in Iqbal?
2. What is the federal pleading relevance of “plausibility,” “probability,”
and “possibility?” As stated in a 2013 federal opinion, citing a leading law review analysis:
“The [Supreme] Court’s criticism of Conley has caused a great deal of confusion ... [in]
determining exactly how the plausibility standard changes previous Rule 8(a)(2) pleading law....
‘Plausible’ corresponds to a probability greater than ‘possible.’ Exactly how much greater is
uncertain.” Evergreen Partnering Group, Inc. v. Pactiv Corp., 720 F.3d 33 (1st Cir. 2013).
3. The majority opinion describes Iqbal’s complaint as “extravagantly fanciful.” Do
you agree? As perhaps clarified in 16630 Southfield Ltd. Partnership v. Flagstar Bank, F.S.,
727 F.3d 502, 504 (6th Cir., 2013):
Javaid Iqbal ... claimed that ... federal officials instituted a [post-9–11] policy of detaining Arab Muslim men on
account of their religion, race and national origin. ... Iqbal could not proceed to discovery simply by making bare
allegations that the defendants violated the law. ... [H]e had to identify facts that plausibly supported his legal
conclusion. He tried to discharge this burden by pointing to the number of Arab Muslim men—“thousands”—
confined after September 11. But ... the Court in Iqbal perceived an obvious alternative explanation for the
pattern: “The September 11 attacks were perpetrated by 19 Arab Muslim hijackers ... [so it] should come as no
surprise that a legitimate policy directing law enforcement to arrest and detain individuals because of their
suspected link to the attacks would produce a disparate, incidental impact on Arab Muslims.” ... [¶] [A] plaintiff
cannot overcome a Rule 12(b)(6) motion to dismiss simply by referring to conclusory allegations in the complaint that
the defendant violated the law. Instead, the sufficiency of a complaint turns on its “factual content,” requiring the
plaintiff to plead enough “factual matter” to raise a “plausible” inference of wrongdoing. The plausibility of an
inference depends on a host of considerations, including common sense and the strength of competing explanations for
the defendant's conduct [italics added].
4. Should FRCP 8 be revised in the aftermath of Iqbal? If so, how should FRCP
8(a)(2) be reworded? Some details regarding the pending Notice Pleading Restoration
Act of 2009—legislation by some congressional leaders hoping to overrule Iqbal (and
restore Conley)—is accessible by clicking here.
5. An April 2009 analysis by the American College of Trial Lawyers and Institute
for the Advancement of the American Legal System urges the rule makers to adopt state
fact pleading (and very limited discovery in both federal and state courts). Its Principle 2
provides that:
Notice pleading should be replaced by fact-based pleading. Pleadings should set
forth with particularity all of the material facts that are known to the pleading party to
establish the pleading party’s claims or affirmative defenses. Notice pleading should be
replaced by fact-based pleading. Pleadings should set forth with particularity all of the
material facts that are known to the pleading party to establish the pleading party’s claims
or affirmative defenses.
For the complete report, click here.
GARCIA v. HILTON HOTELS INTERNATIONAL
United States District Court, Puerto Rico
97 F.Supp. 5 (1951)
Roberts, District Judge.
The action here is for damages for defamation brought by plaintiff, a citizen and resident
of Puerto Rico, against defendant, a Delaware corporation, in the District Court of Puerto Rico
and removed to this Court by defendant corporation. The complaint sets forth two causes of
action and the paragraphs considered herein are identical in each cause. Defendant has moved to
dismiss the complaint for failure to state a claim upon which relief can be granted and, in the
alternative, to strike Paragraphs 5, 6, 7 and 8 and for a more definite statement.
The San Juan Caribe Hilton (where Armando Garcia was employed)
Source: <http://farm7.staticflickr.com/6086/6096908693_fcdfb276ec_o.jpg>
Reprinted with Permission of Coleccion Pin
In support of its motion to dismiss, defendant contends that no publication of the alleged
slanderous statement is alleged and that the complaint, therefore, fails to state a cause of action.
This contention will be considered first with respect to Paragraph 4 of the complaint, which reads
as follows: ‘4. ... [T]he plaintiff was violently discharged by the defendant, being falsely and
slanderously accused of being engaged in bringing women from outside the Hotel and
introducing them into the rooms thereof for the purpose of developing prostitution in the Hotel
and that such women brought by him from outside the Hotel and introduced therein carried on
acts of prostitution in said Hotel.’
The motion to dismiss contemplated in Fed. Rules Civ. Proc. rule 12(b)(6), is not
concerned with failure of the pleader to state a cause of action, but only with failure to state a
claim upon which relief can be granted. There is an obvious distinction between stating a cause
of action and stating a claim upon which relief can be granted. It is clear from the terms of rule
8(a) that a pleader is required to set forth only ‘a short plain statement of the claim showing that
the pleader is entitled to relief,’ and there is no pleading requirement that the pleader state a
cause of action upon peril of having his complaint dismissed. ...
The controlling question here, with respect to the motion to dismiss, is whether the
allegations of Paragraph 4 of the complaint, state a claim upon which relief can be granted. An
examination of the authorities is persuasive that it does. It is settled, with respect to motions to
dismiss for insufficiency of statement, that the complaint is to be construed in the light most
favorable to the plaintiff with all doubts resolved in his favor and the allegations accepted as
true. If, when a complaint is so considered, it reasonably may be anticipated that plaintiff, on the
basis of what has been alleged, could make out a case at trial entitling him to some relief, the
complaint should not be dismissed. ... ‘[T]he courts have ruled time and again that a motion to
dismiss for failure to state a claim should not be granted unless it appears to a certainty that the
plaintiff would be entitled to no relief under any state of facts which could be proved in support
of his claim. If, within the framework of the complaint, evidence may be introduced which will
sustain a grant of relief to the plaintiff, the complaint is sufficient.’
Further, it has been a long recognized and generally accepted policy of the courts to look
with disfavor upon the practice of terminating litigation, believed to be without merit, by
dismissing the complaint for insufficiency of statement. ... To warrant such dismissal, it should
appear from the allegations that a cause of action does not exist, rather than that a cause of action
has been defectively stated. ...
‘That rule of procedure should be followed which will be most likely to result in justice
between the parties, and, generally speaking, that result is more likely to be attained by leaving
the merits of the cause to be disposed of after answer and the submission of proof, than by
attempting to deal with the merits on motion to dismiss the bill.’
In the instant case, it is true that Paragraph 4, of the complaint, fails to state, in so many
words, that there was a publication of the alleged slanderous utterance and, to that extent, the
cause of action is defectively stated. However, it does not follow that the allegations do not state
a claim upon which relief can be granted. It is alleged that plaintiff was ‘violently discharged’
and was ‘falsely and slanderously accused’ of procuring for prostitution. While in a technical
sense, this language states a conclusion, it is clear that plaintiff used it intending to charge
publication of the slanderous utterance and it would be unrealistic for defendant to claim that it
does not so understand the allegations. Clearly, under such allegations it reasonably may be
conceived that plaintiff, upon trial, could adduce evidence tending to prove a publication. If the
provisions of rule 8(a) are not to be negatived by recourse to rule 12(b), the statement in
Paragraph 4 of the complaint must be deemed sufficient.
In further support of its motion to dismiss, defendant contends that the alleged slanderous
utterance was conditionally privileged. ...
As has been noted, on motion to dismiss for failure to state a claim, complaint must be
construed in the light most favorable to plaintiff with all doubts resolved in his favor and the
allegation taken as true. ...
The conclusion to deny defendant’s motion to dismiss requires that consideration be
given its alternative motion to strike Paragraphs 5, 6, 7 and 8 of the complaint. It is alleged in
these paragraphs, in substance, that upon being discharged, plaintiff made claim with the Labor
Department of Puerto Rico for severance pay and overtime as is provided for by law; that during
a hearing on such claim held by the Labor Department, defendant, falsely and slanderously,
repeated its charge that plaintiff had been engaged in procuring for prostitution; and, that, after
said hearing defendant had compromised plaintiff’s claim for severance pay and overtime. As
respects defendant’s motion to strike, the controlling allegations are contained in Paragraph 7 of
this complaint.
Section 4 of ‘An Act Authorizing Civil Actions to recover Damages for Libel and
Slander’ ... provides in part as follows: ‘Section 4. A publication or communication shall not be
held or deemed malicious when made in any legislative or judicial proceeding or in any other
proceeding authorized by law....’
The effect of the above quoted portions of the statute is to confer absolute privilege upon
any communication made in any of the proceedings contemplated therein. If the hearing held by
the Labor Department on plaintiff’s claim for severance pay and overtime, referred to in
Paragraph 7 of the complaint, is a proceeding within the meaning of the phrase ‘or any other
proceeding authorized by law’ as used in said Section 4 of the Act of February 19, 1902, the
utterance was absolutely privileged and such privilege constitutes a conclusive defense in an
action based on that utterance.
...
It appears ... that when hearings are held pursuant to its terms it is necessary, if those
purposes are to be effectuated, that those called upon to give evidence therein must be protected
against liability, civil or criminal, for communications given in evidence at such hearings. And
this without regard for the motives of the witness or the truth or falsity of his statements. For
otherwise, the giving of full, free and honest testimony, essential to the enforcement of such
laws, will be discouraged. Therefore, communications made by witnesses in the course of such
hearings, should be absolutely privileged in the same manner and to like extent as those made in
the course of a judicial proceeding.
...
Clearly, then, the utterance of the defendant made during the Labor Department hearing
referred to in Paragraph 7 of the complaint was absolutely privileged and that Paragraph 7 is,
therefore, redundant in that it fails to state a claim upon which relief can be granted. It appears
then, that defendant’s motion to strike Paragraphs 5, 6, 7 and 8 should be granted.
... [D]efendant’s motion for a more definite statement need be considered only with
respect to the allegations of Paragraph 4 of the complaint.
... But when, in an action for slander, the complaint fails to set out substantially the
utterance alleged to have been slanderously made or the facts relied upon to establish a
publication of such utterance, such omission constitutes vagueness such as is a ground for
granting a motion for more definite statement within the contemplation of rule 12(e). Obviously,
when such material allegations are insufficient, it would be unreasonable to require the defendant
to prepare a responsive pleading without a more definite statement of the pertinent facts.
Considering the allegations of Paragraph 4 of the complaint, ... the allegations suffer from
vagueness with respect to the utterance alleged to have been slanderously made and the facts
relied upon to establish a publication of the utterance. It is concluded that the defendant here is
entitled to a more definite statement setting forth substantially the words alleged to have been
slanderously uttered and the facts relied upon to establish a publication thereof.
Defendant’s motion to dismiss the complaint for failure to state a claim upon which relief
can be granted is denied. Defendant's motion to strike Paragraphs 5, 6, 7 and 8 of the complaint
is granted. Defendant's motion for a more definite statement with respect to the matters
prescribed in this opinion, is granted. ...
Notes and Questions:
1. Go to the course webpage. Click Problems_Hypos_Charts webpage. Then click Garcia
Motions.
2. How does the Motion for a More Definite Statement differ from the Motion to Dismiss
for Failure to State a Claim? How does the Motion to Strike differ from the Motion to Dismiss
for Failure to State a Claim?
3. The plaintiff was able to state his claim for defamation at the hotel, and avoid a
dismissal. When the same type of claim was restated, regarding the Labor Department hearings,
the claim was stricken. What explains the difference?
ROSS v. A. H. ROBINS CO., INC.
United States Court of Appeals, Second Circuit
607 F.2d 545 (1979)
Mishler, District Judge:
This is an appeal from an order … dismissing plaintiffs’ proposed class action. Plaintiffs,
Kalman and Anita Ross, allege that on July 23, 1973 they purchased 100 shares of common
stock of the defendant company, A. H. Robins Company, Inc., (“Robins”), a manufacturer and
distributor of pharmaceutical products. They instituted this action pursuant to s[ection] 10(b) of
the Securities Exchange Act of 1934, [and] Rule 10b-5, promulgated thereunder, and common
law principles, on behalf of all persons who purchased such stock “from April 1972 through in or
about July, 1974 ... and who still owned shares of Robins at the end of said period and who have
suffered damages as a result thereof.” In addition to Robins, also named as defendants are seven
individuals who are identified as directors and/or officers of Robins. The gravamen of the
complaint is that the defendants manipulated and artificially inflated the market price of Robins'
common stock by disseminating false and misleading information about the effectiveness and
safety of the Dalkon Shield, an interuterine birth control device which it manufactured, and by
failing to reveal information which indicated that the shield was less effective and more
dangerous than the company’s earlier public statements had indicated. The district court
determined that: (1) … the plaintiffs [’] … exclusive remedy was under … the Exchange Act;
and (2) the plaintiffs had failed to plead with the degree of specificity required in fraud actions
by Rule 9(b) Fed.R.Civ.P. Therefore, the court dismissed the action with prejudice.
We hold that the district court erred in concluding that the action could not be maintained
under s[ection] 10(b) of the Exchange Act and Rule 10b-5. On the question of the pleadings, we
agree with the determination made below that the complaint fails to meet the requirements of
Rule 9(b). However, because we are hesitant to preclude the prosecution of a possibly
meritorious claim because of defects in the pleadings, we believe that the plaintiffs should be
afforded an additional, albeit final opportunity to conform the pleadings to Rule 9(b).
The Complaint
The complaint which is the subject of this appeal was filed in the district court on June 1,
1
1978. It contains the following pertinent allegations: Robins is … primarily engaged in the
“development, manufacture and distribution of ethical pharmaceutical products and brand name
consumer products.” The individual defendants were “at all times material hereto” directors of
the defendant corporation. Some of the defendants were also officers of Robins. “At all relevant
times, the Board of Directors of Robins had the responsibility for the dissemination of
information to the public, including the statements alleged in the reports referred to in the
complaint as well as the information not disclosed to the public as further alleged in the
complaint.”
The gist of plaintiffs’ claim is contained in paragraph 13:
… Robins and the individual defendants herein have engaged in a scheme and
plan and continuous course of conduct to deceive the investing public, including
plaintiffs, as to the true financial condition and prospects of Robins, particularly with
respect to matters concerning the Dalkon Shield, and to conceal from the investing
public, including plaintiffs, facts, among other things, concerning the safety and
efficiency of the Dalkon Shield and the effect of such upon Robins operating and
financial condition.
According to paragraph 14:
Prior to the commencement of the class period, Robins with approval of its Board
of Directors…, prepared, issued and disseminated statements to the investing public
[which] stressed the safety, reliability and efficiency of the Dalkon Shield, particularly
with regard to Robins’ testing procedures and practices.
1
The original complaint in this action was filed on March 23, 1977. In an opinion and order dated April 6,
1978, Judge Pierce dismissed the complaint for failure to meet the pleading requirements of Rule 9(b) Fed.R.Civ.P.
Leave to replead was granted. Thereafter, on May 19, 1978, an amended complaint was filed. A corrected amended
complaint was filed June 1, 1978 [italics added].
These statements are quoted at length and identified as appearing in Robins’ 1970 Annual
Report, 1971 Annual Report and a prospectus issued in or about March 1972.4
Paragraph 18 is of crucial importance. It charges that (d)uring the class period, Robins
and the individual defendants knew or recklessly disregarded the fact that there were serious
questions as to the safety and efficiency of the Dalkon Shield. ...
Specifically, it alleges that “among other things” the “defendants knew or recklessly
disregarded,” inter alia, the “facts” that the pregnancy rate from use of the shield “was
significantly higher than the low pregnancy rate Robins had indicated in (its) 1970 Annual
Report ...,” and that, “the rate of medical removals of the shield required by manifestations of
pain, bleeding and infection was significantly higher than ... indicated in the 1970 Annual
Report....” These facts were evidenced by data “found in an updated April 1972 unpublished
study on the Shield by Mary Gabrielson....” Paragraph 18 further states the defendants knew or
recklessly disregarded the fact that: their conclusions about the shield’s safety and effectiveness
were based on insufficient data; that in 1972 and 1973 there was an “alarming increase” in the
rate of septic abortions and deaths resulting from the shield; and that other “significant health
hazards” existed.
Paragraph 20 states that the defendants “failed to make proper and timely disclosure” of
these facts and the fact that “Robins was incurring substantial risks to its reputation ... and
substantial risks of substantial liability for injuries from use of the Dalkon Shield.”
...
The named plaintiffs and members of the putative class allegedly “made their purchases
of Robins’ common stock at prices that were inflated by (these) misleading public reports and
press releases and the representations contained therein and by defendants’ failure to disclose ...
adverse matter....”
Sometime beginning in or about the middle of May 1974, information about the serious
medical problems which were resulting from use of the Dalkon Shield began to be disclosed to
the public.6 As a consequence of this, of resulting investigations by the Food and Drug
Administration, and the Department of Health, Education and Welfare, and the institution of over
500 product liability suits, “Robins’ reputation and position in its industry have been jeopardized
4
For example, paragraph 15 indicates that Robins’ 1970 Annual Report stated, in part, that:
Clinical tests indicate that the Dalkon Shield offers a low (sic) incidence of spontaneous expulsion,
cramping and bleeding than other IUD’s, as well as greater protection against pregnancy. We feel it has
great promise, in the international as well as the domestic market, and have set up a special staff to
introduce it widely in a number of areas overseas.
6
It is alleged that during the middle of May, Robins sent a letter to approximately 120,000 physicians
nationwide warning that severe complications, including death, had resulted from use of the Shield.
and its business prospects adversely affected.” The value of its common stock “dropped from
approximately $19 to $13 per share on the New York Stock Exchange.”
The defendants’ conduct is alleged to have violated s[ection] 10(b) and Rule 10b-5.7
Specifically, it is stated that the “defendants had a duty to disclose (adverse) information (about
the Dalkon Shield) in order to correct the false and misleading impression created by (their
earlier) statements....” These statements had indicated that the shield was safe and reliable and
would continue to contribute to Robins’ sales and earnings.
The District Court Opinion
The defendants moved the district court for an order dismissing the complaint on the
grounds that: … (2) the action could not be maintained … because s[ection] 18 of the Exchange
Act was the exclusive remedy for the acts complained of; and (3) it failed to comply with the
pleading requirements of Rule 9(b) Fed.R.Civ.P.
Judge Pierce rejected the defendants’ contention that the complaint essentially stated
claims for corporate mismanagement and was therefore not properly brought under the federal
securities laws. …
The district court also determined that the complaint did not meet the pleading
requirement of Rule 9(b) in that it failed to aver the alleged fraud with particularity. Two primary
shortcomings in the complaint were noted. First, the complaint failed to “particularize the time
when the defendants allegedly knew or recklessly disregarded the undisclosed information.” This
failing was found to be particularly crucial because the defendants’ purported duty to disclose
adverse information concerning the shield might have arisen during the class period but after the
named plaintiffs’ purchase. In that case, they would not be proper class representatives.
Secondly, the complaint was held defective because it did not set forth “the circumstances which
lead (plaintiffs) to believe that defendants knew or recklessly disregarded the information
contained in the 1972 study prior to their own purchase of Robins common stock.” Because the
plaintiffs had already been given the opportunity to cure defects in the complaint by repleading,
the complaint was dismissed without leave to [yet again] replead. A timely appeal was taken to
this court. …
I. [substantive background]
The Securities Act of 1933, and the 1934 Act “constitute interrelated components of the
federal regulatory scheme governing transactions in securities.”
...
We do not believe, however, that by permitting the plaintiffs to proceed under s 10(b) in
the instant case, we would be nullifying the terms of the remedy which Congress designed in
s[ection] 18.
...
7
Plaintiffs charge, in language almost identical to that of Rule 10b-5 [italics added], that the defendants:
(a) employed devices, schemes and artifices to defraud, (b) made untrue statements of material
facts or omitted to state material facts necessary in order to make statements made, in light of the
circumstances under which they were made, not misleading, or (c) engaged in acts, practices and a course
of business that operated as a fraud or deceit upon plaintiffs and others similarly situated in connection with
their purchases of Robins stock.
We conclude that even as to those documents filed with the S.E.C., plaintiffs may seek to
prosecute their claim under s 10(b) and Rule 10b-5.
II. [procedural gist]
Rule 9(b) Fed.R.Civ.P. provides:
Fraud, Mistake, Condition of Mind.
In all averments of fraud or mistake, the circumstances constituting fraud or
mistake shall be stated with particularity. Malice, intent, knowledge, and other condition
of mind of a person may be averred generally.
This rule, which “is a special pleading requirement and contrary to the general approach
of simplified pleading adopted by the federal rules,” generally serves two important purposes.
First, it assures the defendant of “ ‘fair notice of what the plaintiff’s claim is and the grounds
upon which it rests.’ ” “It is the pleading of these matters with precision that serves the rule’s
purpose by apprising the defendant of the claim against him and of the acts relied upon as
constituting the fraud charged.” Secondly, the specificity requirement grows out of “the desire to
protect defendants from the harm that comes to their reputations or to their goodwill when they
are charged with serious wrongdoing....” In the context of securities litigation Rule 9(b) serves an
additional important purpose. It operates to diminish the possibility that “ ‘a plaintiff with a
largely groundless claim (will be able) to simply take up the time of a number of other people
(by extensive discovery), … rather than a reasonably founded hope that the process will reveal
relevant evidence....’ ”20
…
The … plaintiff alleging fraud in connection with a securities transaction must
specifically allege the acts or omissions upon which his claim rests. It will not do merely to track
the language of Rule 10b-5 and rely on such meaningless phrases as “scheme and conspiracy” or
“plan and scheme and course of conduct to deceive.” A defendant is entitled to a reasonable
opportunity to answer the complaint and must be given adequate information to frame a
response.
There is no question that the plaintiffs in this instance adequately identified the alleged
“misrepresentations” [italics added].They point to the following specific documents: 1970
Annual Report; 1971 Annual Report; prospectus issued in or about March 1972; 1972 form 10K; 1973 form 10-K; press release issued on or about April 19, 1973; press release issued July 18,
20
Of course, Rule 9(b) cannot be viewed in vacuo.
The requirement of particularity does not abrogate Rule 8, and it should be harmonized with the
general directives ... of Rule 8 that the pleadings should contain a “short and plain” statement of the claim
or defense and with each averment should be “simple, concise and direct.” Rule 9(b) does not require nor
make legitimate the pleading of detailed evidentiary matter.
(Rule 9(b) does not render general principles of Rule 8 inapplicable to pleadings alleging fraud).
… “F.R.Civ.P. 9(b) must be reconciled with F.R.Civ.P. 8(a)(2)....”
1973; press release dated January 31, 1974; 1973 Annual Report; and finally a press release
dated April 18, 1974. However, we believe that the pleading is deficient in other important
respects.
The complaint alleges only in a most sketchy fashion circumstances which would give
rise to an inference of fraud. The complaint sets forth numerous facts which, it is alleged,
indicate that “there were serious questions as to the safety and efficiency of the Dalkon
Shield....” Some, but not all, of these facts are alleged to have been contained in a 1972
unpublished report on the Dalkon Shield prepared by a Mary Gabrielson. It is not indicated what
relationship, if any, exists between Mary Gabrielson and Robins, or whether plaintiffs have any
reason to believe that the defendants were even aware of the report’s existence. Plaintiffs also
indicate that the defendants’ knowledge of the facts contained in paragraph 18 is evidenced by
“among other things” the 1972 unpublished report. Plaintiffs should indicate whether they are
relying solely on the study or have other reasons to believe that the defendants had knowledge of
facts raising serious questions about the efficiency of the Dalkon Shield. Additionally,
knowledge of many of the facts alleged in paragraph 18, e.g., the number of deaths, septic
abortions and other complications resulting from the Dalkon Shield in 1972-1973, is in no way
attributed to the defendants.
Plaintiffs have also failed to indicate when the defendants allegedly came into possession
of this crucial information. No one disputes that the defendants eventually became aware of
major safety problems involving their product. The facts alleged in paragraph 34 that by letter
dated May 8, 1974 Robins informed approximately 120,000 physicians nationwide that severe
complications including death had resulted in instances where the Dalkon Shield remained in
place during pregnancy do give rise to the inference that by 1974 officials at Robins were aware
that major medical problems existed. However, it is only if the defendants’ knowledge of various
problems with the Dalkon Shield coalesced into a duty to disclose prior to July 1973 (the time
when the named plaintiffs bought stock in Robins [italics added]) that the action can be
prosecuted as a class action by these named plaintiffs. We believe that it is proper to require the
plaintiffs, even at the pleading stage, to fix more definitively the time at which these crucial
events in the complaint occurred.
… [A]t this stage of the litigation, we cannot realistically expect plaintiffs to be able to
plead defendants’ actual knowledge. On the other hand, plaintiffs can be required to supply a
factual basis for their conclusory allegations regarding that knowledge. It is reasonable to require
that the plaintiffs specifically plead those events which they assert give rise to a strong inference
that the defendants had knowledge of the facts contained in paragraph 18 of the complaint or
recklessly disregarded their existence. And, of course, plaintiffs must fix the time when these
particular events occurred [in order to properly represent the alleged class].
Finally, the complaint is deficient in that it fails to specify the time period during which
Robins’ stock allegedly fell from $19 a share to $13 a share. Absent such a statement, including
a claim that the stock has not, since it was acquired, risen above $19 a share, it is impossible to
determine whether the named plaintiffs or any members of the proposed class have any viable
claim that they sustained a loss due to defendants' alleged misconduct.
However, notwithstanding the deficiencies which exist in the pleading, we believe, as we
indicated at the outset, that plaintiffs should be given a final chance to replead.
CONCLUSION
For the reasons set forth above, the decision of the district court is reversed. The cause is
remanded.21
Notes and Questions:………………….……………………
1. Per ¶1 of this opinion, the trial judge “dismissed the action with prejudice.” What does
that term mean?
2. How does FRCP 9(b) differ from FRCP 8(b)?
3. Does Rule 9(b) impose a draconian pleading requirement on plaintiffs, who are
normally in an inferior position—vis-a-vis the corporate officer defendants—to know the facts
regarding what those defendants knew and when? Did the appellate court appropriately remand
this case back to the trial court, to allow the plaintiffs to plead their case for (effectively) the
fourth time?
4. To properly plead a securities fraud case, “[p]laintiffs needed to plead ‘the identity of
the person who made the misrepresentation, the time, place[,] and content of the
misrepresentation, and the method by which the misrepresentation was communicated to the
[Plaintiffs].’ The degree of particularity required will necessarily vary depending on the
circumstances under which the plaintiff filed its complaint.” Gandhi v. Sitara Capital
Management, LLC, 721 F.3d 865, 870 (7th Cir. 2013).
5. More generally, courts have read Rule 9(b) to require “describing the ‘who, what,
when, where, and how’ of the fraud.” We have noted that the purpose of this particularity
requirement is “to discourage a ‘sue first, ask questions later’ philosophy. Heightened pleading
in the fraud context is required in part because of the potential stigmatic injury that comes with
alleging fraud and the concomitant desire to ensure that such fraught allegations are not lightly
leveled. We have also cautioned, however, that “the exact level of particularity that is required
will necessarily differ based on the facts of the case.” Cincinnati Life Ins. Co. v. Beyrer
722 F.3d 939, 948 (7th Cir., 2013).
WHITE v. SMITH
United States District Court, Western District New York
91 F.R.D. 607 (1981)
MEMORANDUM AND ORDER
Elfvin, District Judge.
Plaintiff in this pro se civil rights action was granted permission to proceed in forma
pauperis…. In my [earlier] Memorandum and Order I outlined plaintiff’s allegations and cited
legal authority to the effect that, as presented, plaintiff’s contentions pose tenable constitutional
claims.
21
We do not reach the question whether the defendants' alleged failure to update and correct prior
statements which were accurate when made constitutes conduct actionable under s 10(b) and Rule 10b-5. In view of
the fact that we are sustaining the determination of the district court that the complaint is deficient because it fails to
particularize allegations of fraud, we believe it would be premature for us to address this issue at the present time.
The Complaint was served on defendants…. By their attorney, New York State Assistant
Attorney General Douglas S. Cream, defendants moved for additional time to answer in order to
obtain information concerning a purportedly related action filed by plaintiff in the United States
District Court for the Northern District of New York [italics added]. At oral argument, … I
granted defendants’ request over plaintiff’s written objections.
… [T]wo months after they were served, all four defendants jointly filed their Answer,
recounted in full below.1
As a general rule, federal court pleadings need not be extensive or detailed. On the
contrary, Fed.R.Civ.P. rule 8(b) requires only that defenses shall be stated “in short and plain
terms.” For the most part, denials are to be “specific denials of designated averments or
paragraphs.” However, general denials which controvert all of a complaint’s averments are
acceptable under the rule if they are made “in good faith” ….
These few basic requirements are exceedingly simple to meet. The federal rule does not
contemplate an elaborate reply to every allegation of a complaint. It does not bind a defendant to
his, her, or its responses for all time. It does not even condemn averments of insufficient
information or knowledge upon which to form a belief as to the truth of the complainant’s
allegations. The rules governing responsive pleadings require merely that an answer be
sufficiently particular to inform the plaintiff what defenses he, she, or it will be called upon to
meet. Nonetheless, the “form answer” submitted by defendants in this action does not come close
to complying with the Federal Rules of Civil Procedure, not to mention basic notions of due
process, adequate notice and fair play.
Although plaintiff is proceeding pro se, his claims are plainly and cogently presented.
Admittedly, there is no numbering or other denomination of his separate allegations; but,
essentially, he alleges that, despite the pendency of a [New York] state habeas corpus challenge
to his extradition to North Carolina, defendants delivered him to the North Carolina authorities
before the hearing.
Unlike many other pro se complaints filed in this court, this Complaint raises allegations
which do not hinge solely on plaintiff’s word against the defendants’ words. Such a situation
1
The body of defendants’ Answer is as follows:
“Defendants, HAROLD SMITH, DORIS BEITZ, CHARLES SCULLY, EDITH ALMETER, as and for
their answer to the complaint, by their attorney, Robert Abrams, Attorney General of the State of New York,
Douglas S. Cream, Assistant Attorney General, of counsel, set forth as follows: ……………………………………
“1. DENY each and every allegation of the complaint which allege (sic) or tends to allege that they
violated any of plaintiff’s constitutionally protected rights.
[They then pled various boilerplate defenses, none of which directly responded to plaintiff’s allegations.]
...
arises, for instance, where a prisoner alleges that a certain correctional officer physically
assaulted him or denied him adequate medical care. In those types of cases, the use of a general
denial, while not necessarily condonable, is more understandable due to the obvious difficulty of
discussing an incident which defendants deny having occurred at all.
On the contrary, plaintiff’s description of the events surrounding his extradition are
meticulously detailed and quite specific. He includes all critical names and dates. Finally,
attached to the Complaint are various documents pertaining to his detainer, state habeas corpus
petition, and subsequent extradition which, in the court’s view, tend to support his claim.
Surely it would not have been an onerous burden for defendants’ attorney to compare
plaintiff’s averments and attached documents to defendants’ own records to enable him to frame
meaningful and responsible answers to plaintiff’s charges. Was or was not plaintiff under
detainer [in New York]? Did he or did he not challenge his detainer with a state habeas corpus
petition? Did a state judge actually set a hearing date? Was plaintiff permitted to attend the
hearing, or did defendants execute his extradition before the hearing was held? I see no reason
why defendants’ attorney would have found it difficult to [more completely] respond to these
and other claims raised by plaintiff.
The absurdity of defendants’ general denial appears all the more flagrant when the
answer is compared to plaintiff’s claims. Three examples will suffice, though many more are
obvious. If defendants’ general denial [of all of plaintiff’s allegations] is to be believed, then
notwithstanding the Complaint and its Exhibit B, the District Attorney of North Carolina did not
[even] request a detainer against plaintiff; notwithstanding the Complaint and its Exhibit F,
Acting Superintendent Scully did not sign and send an “Offer to Deliver Temporary Custody” of
plaintiff July 13, 1978; and notwithstanding the Complaint and its Exhibit I, Doris Beitz neither
was informed that plaintiff’s petition for habeas corpus was made returnable before the
Honorable John S. Conable August 23, 1978 nor informed plaintiff of the hearing date in an
inter-office communication dated August 7, 1978.
On the basis of defendants’ wholly inadequate response to plaintiff’s clearly framed
allegations, I can only conclude that defendants’ general denial is … [not] offered in “good
faith,” Fed.R.Civ.P. rule 8(b)…. For all the reasons discussed above, I would be stretching
attorney Cream’s credibility far beyond the realm of rationality were I to find that “to the best of
his knowledge, information, and belief there is good ground to support (his general denial).”
Furthermore, the steps taken by defendants’ counsel before submitting the answer
strongly suggest that the answer was “interposed for delay”…. My Memorandum and Order of
January 27, 1981, footnote 1, expressly discussed plaintiff’s complaint in the United States
District Court for the Eastern District of North Carolina and found the corresponding claim to be
against a North Carolina police officer. Even so, defendants felt compelled to move for a twomonth extension of time to answer in order to obtain records relating to a similar complaint
brought by plaintiff in the United States District Court for the Northern District of New York,
which, according to defendants’ attorney, plaintiff referred to in his Complaint in this action. A
review of the Complaint, my Order of January 27th and plaintiff’s “Motion in Opposition” to
defendants’ Motion for an extension of time would have revealed to defendants’ attorney that
plaintiff’s other federal action was before the United States District Court for the Eastern District
of North Carolina, rather than the Northern District of New York. Nevertheless, I granted
defendants’ motion for the purpose requested. Under these circumstances, it is particularly
significant that defendants’ unresponsive answer fails to make even the briefest mention of either
the existence or non-existence of the court records for which he purportedly was searching.
The overwhelming weight of logic demands the conclusion that delay, not the judicial
resolution of this lawsuit, was first and foremost on defense counsel’s mind when he signed and
submitted defendants’ responsive pleading. In what might easily have been a relatively simple
case, defense counsel apparently prefers to impose rather than eradicate obstacles to an
expeditious resolution of this action.
Under the circumstances of this case, appropriate sanctions are more than justified. [A]
pleading … may be stricken as sham and false and the action may proceed as though the
pleading had not been served. I am satisfied that such a penalty is fully warranted in this matter.
Nevertheless, because counsel for defendants has been permitted in the past to use this
same type of unresponsive answer and because he and his office should have some advance
warning prior to the imposition of the ultimate sanction of entry of a default and the proving up
of a default judgment—and this Memorandum and Order is such a warning that such will occur
in future similar situations—it is hereby
ORDERED that the defendants’ Answer is stricken; and it is further hereby
ORDERED that defendants shall file an answer or answers to the Complaint not later
than twenty (20) days after the entry of this Order.
Notes and Questions:
1. What is a defendant’s basic obligation under FRCP 8(b)?
2. In this particular instance, why were the defendants unable to employ a general denial
in good faith?
3. Was the judge in this case being overly technical, given that plaintiff had already been
extradited to North Carolina? What was the New York federal judge’s essential purpose for
issuing this Memorandum opinion?
INGRAHAM v. U.S.
United States Court of Appeals, Fifth Circuit
808 F.2d 1075 (1987)
Politz, Circuit Judge:
The appellees in these consolidated cases sued the United States, under the Federal Tort
Claims Act [FTCA], for severe injuries caused by the negligence of government physicians. In
each case, after entry of adverse judgment the government moved for relief from the judgment to
the extent that the damages exceeded the limit imposed on medical malpractice awards by the
Medical Liability and Insurance Improvement Act of Texas.a The respective district courts
denied these post-trial motions. Concluding that the government did not raise the issue timely
before the trial courts, that the issues were not preserved for appeal, and, in the [consolidated]
Bonds case, that the challenged awards were not otherwise excessive, we affirm both judgments.
Background
… Of particular significance to these appeals is the $500,000 cap placed on the ex delicto
recovery….1 not applicable to past and future medical expenses.
… Dwight L. Ingraham was operated on by an Air Force surgeon. During the back
surgery a drill was negligently used and Ingraham’s spinal cord was damaged, causing severe
and permanent injuries. The court awarded Ingraham judgment for $1,264,000. This total
included $364,000 for lost wages and $900,000 for pain, suffering, and disability. There is no
reference to the Medical Liability and Insurance Improvement Act of Texas in the pleadings, nor
was any reference made to the Act during the trial. After entry of judgment the United States
filed a notice of appeal. Thereafter, urging the Act's limitations, the government sought relief
from judgment…. The district court denied that motion. …
Similarly, … Jocelyn and David Bonds, and their infant daughter Stephanie, were victims
of the negligent performance by an Air Force physician. Because of the mismanagement of the
43rd week of Jocelyn Bonds’s first pregnancy, and the negligent failure to perform timely a
caesarian section delivery, Stephanie suffered asphyxiation in utero. The loss of oxygen caused
extensive brain damage, resulting in spastic quadriparesis, cortical blindness, seizures, and
mental retardation. In their FTCA action the court awarded Stephanie $1,814,959.70 for medical
expenses and $1,675,595.90 for the other losses. Jocelyn Bonds was awarded $750,000 for her
losses, including loss of the society of her daughter. As in the Ingraham case, the government
did not invoke the Texas malpractice limitation in pleading or at trial. Postjudgment the
government filed a motion to amend the judgment …, but, again, there was no mention of the
limitations Act. Subsequently, three months after entry of the judgment, the government filed a
pleading entitled “Motion for Reconsideration,” in which it advanced the malpractice Act. That
motion was denied. The government appealed….
These appeals do not challenge the courts’ findings of liability, but object only to …
contending that damages are limited by the Medical Liability and Insurance Improvement Act….
Analysis
Appellees maintain that we should not consider the statutory limitation of liability
invoked on appeal because it is an affirmative defense under Rule 8(c) of the Federal Rules of
a
Subsection (b)(1) of the FTCA provides for liability to be determined “in accordance with the law of the
place where the act or omission occurred.” Texas law thus provides the rule of decision in this case. If an individual
is named, the Complaint is normally amended to substitute the federal government as the defendant.
1
In an action on a health care liability claim where final judgment is rendered against a physician or health
care provider, the limit of civil liability for damages of the physician or health care provider shall be limited to an
amount not to exceed $500,000.
Civil Procedure,3 and the failure to raise it timely constitutes a waiver. We find this argument
persuasive.
Rule 8(c) first lists 19 specific affirmative defenses, and concludes with the residuary
clause “any other matter constituting an avoidance or affirmative defense.” In the years since
adoption of the rule, the residuary clause has provided the authority for a substantial number of
additional defenses which must be timely and affirmatively pleaded. These include: exclusions
from a policy of liability insurance; breach of warranty; concealment of an alleged prior
undissolved marriage; voidable preference in bankruptcy; noncooperation of an insured;
statutory limitation on liability; the claim that a written contract was incomplete; judgment
against a defendant's joint tortfeasor; circuity of action; discharge of a contract obligation
through novation or extension; recission or mutual abandonment of a contract; failure to mitigate
damages; adhesion contract; statutory exemption; failure to exhaust state remedies; immunity
from suit; good faith belief in lawfulness of action; the claim that a lender's sale of collateral was
not commercially reasonable; a settlement agreement or release barring an action; and custom of
trade or business. …
Determining whether a given defense is “affirmative” within the ambit of Rule 8(c) is not
without some difficulty. We find the salient comments of … the principal author of the Federal
Rules, to be instructive:
[J]ust as certain disfavored allegations made by the plaintiff ... must be set forth
with the greatest particularity, so like disfavored defenses must be particularly alleged by
the defendant. These may include such matters as fraud, statute of frauds ..., statute of
limitations, truth in slander and libel ... and so on. … Again it may be an issue which may
be generally used for dilatory tactics, such as the question of the plaintiff’s right to sue ...
one usually raised by the defendant on technical grounds. These have been thought of as
issues “likely to take the opposite party by surprise,” which perhaps conveys the general
idea of fairness or the lack thereof, though there is little real surprise where the case is
well prepared in advance.
Also pertinent to the analysis is the logical relationship between the defense and the cause
of action asserted by the plaintiff. This inquiry requires a determination (1) whether the matter at
issue fairly may be said to constitute a necessary or extrinsic element in the plaintiff’s cause of
action; (2) which party, if either, has better access to relevant evidence; and (3) policy
considerations: should the matter be indulged or disfavored?
Central to requiring the pleading of affirmative defenses is the prevention of unfair
surprise. A defendant should not be permitted to “lie behind a log” and ambush a plaintiff with
an unexpected defense. The instant cases illustrate this consideration. Plaintiffs submit that, had
they known the statute would be applied, they would have made greater efforts to prove medical
damages which were not subject to the statutory limit. In addition, plaintiffs maintain that they
would have had an opportunity and the incentive to introduce evidence to support their
constitutional attacks on the statute.
3
Rule 8(c) requires that “... a party shall set forth affirmatively accord and satisfaction, arbitration and
award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of
consideration, fraud, illegality, injury by fellow servant, laches, license, payment, release, res judicata, statute of
frauds, statute of limitations, waiver, and any other matter constituting an avoidance or affirmative defense” [italics
added].
...
We view the limitation on damages as an “avoidance” within the intendment of the
residuary clause of 8(c). Black’s Law Dictionary, 5th ed. 1979, defines an avoidance in pleadings
as “the allegation or statement of new matter, in opposition to a former pleading, which,
admitting the facts alleged in such former pleading, shows cause why they should not have their
ordinary legal effect” [italics added]. …
Considering these factors, … we conclude that the Texas statutory limit on medical
malpractice damages is an affirmative defense which must be pleaded timely and that in the
cases at bar the defense has been waived.
...
The judgments in each of the consolidated cases is AFFIRMED.
Notes and Questions:
1. See footnote 3. A subsequent Rules change deleted the italicized phrase. As a damage
cap is a partial affirmative defense, was it wise of the rules-makers to delete Rule 8(c)’s closing
phrase?
2. See the above second page Rules-maker’s quote, specifically: “disfavored allegations
made by the plaintiff ... must be set forth with the greatest particularity.” What is an example of
this phenomenon (which we studied earlier in the pleadings portion of this course)?
3. Both affirmative defenses and denials normally appear in the Answer. How do they
differ?
4. At the bottom of the second page above, the court mentions that had the plaintiffs’
“known the statute would be applied, they would have made greater efforts [to juggle the
respective types of damage they sought]. But was the major procedural blunder not attributable
to the defendant in these cases?
GREAT LAKES RUBBER CORPORATION
v. HERBERT COOPER CO.
United States Court of Appeals Third Circuit
286 F.2d 631 (1961)
Prof’s Note: Failure to plead a compulsory counterclaim can be a career-ending
mistake. I have thus edited and assigned this case, so that you can better appreciate the
importance of the compulsory counterclaim in the FRCP 13(a) versus 13(b) sense. You
will thus be equipped to scrutinize this type of claim in the supplemental jurisdiction
context of 28 U.S.C. §1367.
Italics have been added to the court’s opinion, without so indicating.
Court’s Opinion: Biggs, Chief Judge.
This is an appeal from an order of the court below dismissing a counterclaim of
Great Lakes Rubber Corporation (Great Lakes), made against Herbert Cooper Co., Inc.
(Cooper), on the ground that the court lacked jurisdiction of the subject matter of the
counterclaim. Because the question presented on appeal is whether Great Lakes’
counterclaim arises out of the transaction or occurrence that is the subject matter of a
claim asserted by Cooper a detailed analysis of the pleadings is necessary.
… Great Lakes filed an amended complaint naming Cooper as defendant.
Jurisdiction was allegedly based on diversity. The allegations fall roughly into three
groups. First, it was alleged that Howard Cooper ... had been employed by Great Lakes ...
and that [he] left Great Lakes’ employ taking ... certain information relating to the
flexible rubber tubing manufactured by Great Lakes, and lists disclosing Great Lakes'
customers; that shortly thereafter ... with others, founded Cooper [Company]; that
Cooper competed for and obtained customers that were, until then, customers of Great
Lakes; and, that Cooper’s ‘offering to sell, and manufacturing and selling flexible tubing
made and offered for sale with utilization of knowledge and information acquired (by
Howard Cooper and Joseph Herbert) while these men were in a fiduciary relationship
with plaintiff’ constituted ‘acts of unfair competition and unfair business practices.’
Second, it was alleged that ... by reason of Cooper’s operation as an ‘unlicensed
infringer’ it ‘is and has been in an unfair competitive position’ relative to Great Lakes.
...
... Cooper filed an answer to the amended complaint and a counterclaim which
asserted that Great Lakes ... and various unnamed companies and individuals ‘have been
and still are ... conspiring together and attempting both individually and in concert to
restrain and monopolize interstate commerce’ in violation of Sections 1 and 2 of the
Sherman [federal antitrust] Act. The conspiracy [claimed by Cooper] was alleged to
include, without limitation, the making of false representations to certain of Cooper's
material suppliers that they were guilty of contributory infringement when the
conspirators knew that the supplied items ... could not be the basis of such liability.
1
The counterclaim also alleged, and this is of prime importance in the instant case,
‘the bringing of a series of unjustified lawsuits by [Great Lakes and] the [other]
conspirators in bad faith and without color of right with the sole object of harassing and
preventing defendant (Cooper) from competing in the manufacture and sale of flexible
hose and thus eliminating defendant as a competitor, including this action ... to prevent
defendant from seeking the patronage of its principal customer, the United States ... and a
[separate] patent infringement suit brought against defendant in ... to prevent defendant
from manufacturing flexible hose
... being in violation of 28 U.S.C.A. § 1498 which forbids infringement actions and
injunctive restraints against government contractors ... .
Cooper moved to dismiss Great Lakes’ amended complaint on the ground that
there was no diversity of citizenship between the parties. ... [T]he court granted Cooper’s
motion to dismiss. Jurisdiction of Cooper’s counterclaim was retained on the ground that
it had an independent basis of jurisdiction in that it asserted a claim arising under the
laws of the United States. No appeal was taken from that order and no question regarding
it has been raised on this appeal.
... Great Lakes filed an answer and a counterclaim to Cooper’s counterclaim
[effectively, now the “complaint”]. Great Lakes’ counterclaim repeated in substance the
allegations of its amended [but previously dismissed] complaint. The counterclaim is
distinguishable from the [now defunct] amended complaint only in that it is more
specific and in that it alleges further that Cooper ... had induced ‘key’ employees of
Great Lakes to leave it and to become employed by Cooper; and that Cooper’s charges in
the court below were baseless and untrue and have resulted in damaging Great Lakes
unfairly.
... Cooper moved to dismiss the Great Lakes counterclaim on the ground that the
court below lacked jurisdiction of the subject matter. In opposition to this motion Great
Lakes contended that the court had ancillary jurisdiction of its counterclaim as a
compulsory counterclaim arising out of the same transaction and occurrences that were
the subject matter of Cooper's claim arising under the Federal antitrust laws. ... [T]he
court granted Cooper’s motion to dismiss on the ground that Great Lakes’ counterclaim
was not a compulsory counterclaim. This appeal followed.
A federal court has ancillary jurisdiction of the subject matter of a counterclaim if
it arises out of the transaction or occurrence that is the subject matter of an opposing
party’s claim of which the court has jurisdiction.
Similarly, a counterclaim that arises out of the transaction or occurrence that is
the subject matter of an opposing party’s claim is a ‘compulsory counterclaim’ within the
meaning of Rule 13(a) of the Federal Rules of Civil Procedure. It is stated frequently that
the determination of ancillary jurisdiction of a counterclaim in a federal court must turn
on whether the counterclaim is compulsory within the meaning of Rule 13(a). Such a
statement of the law relating to ancillary jurisdiction of counterclaims is not intended to
suggest that Rule 13(a) extends the jurisdiction of the federal courts to entertain
counterclaims for the Federal Rules of Civil Procedure cannot expand the jurisdiction of
the United States courts. What is meant is that the issue of the existence of ancillary
jurisdiction and the issue as to whether a counterclaim is compulsory are to be answered
by the same test. It is not a coincidence that the same considerations that determine
whether a counterclaim is compulsory decide also whether the court has ancillary
Page 149 of 358
jurisdiction to adjudicate it. The tests are the same because Rule 13(a) and the doctrine of
ancillary jurisdiction are designed to abolish the same evil, viz., piecemeal litigation in
the federal courts.
We have indicated that a counterclaim is compulsory if it bears a ‘logical
relationship’ to an opposing party's claim. The phrase ‘logical relationship’ is given
meaning by the purpose of the rule which it was designed to implement. Thus, a
counterclaim is logically related to the opposing party's claim where separate trials on
each of their respective claims would involve a substantial duplication of effort and time
by the parties and the courts. Where multiple claims involve many of the same factual
issues, or the same factual and legal issues, or where they are offshoots of the same basic
controversy between the parties, fairness and considerations of convenience and of
economy require that the counterclaimant be permitted to maintain his cause of action. ...
Cooper alleges that the claims originally asserted in Great Lakes’ amended
complaint, reiterated in substance in its counterclaim, are ‘unjustified’ and were brought
in ‘bad faith and without color of right with the sole object of harassing and preventing
defendant (Cooper) from competing in the manufacture and sale of flexible hose.’ These
are the only allegations set out by Cooper’s counterclaim which demonstrate a
relationship within the purview of Rule 13(a) to Great Lakes’ amended complaint or
counterclaim. But that they do demonstrate a relationship is unquestionable. It is clear
that a determination that Cooper’s claims that the claims asserted in Great Lakes’
amended complaint and reiterated in substance in its counterclaim are harassing and
entail an extensive airing of the facts and the law relating to Great Lakes’ counterclaim.
It follows that the court below was in error in dismissing Great Lakes’ counterclaim on
the ground that it was permissive. We hold that Great Lakes’ counterclaim was a
compulsory one within the meaning of Rule 13(a).
...
The judgment will be reversed and the cause will be remanded with the direction
to proceed in accordance with this opinion.
Notes & Questions:
1. What is the test for determining whether a counterclaim is permissive or compulsory?
2. Are the terms “compulsory counterclaim” and “ancillary jurisdiction” synonymous?
3. Can a defendant who fails to plead a S1 compulsory counterclaim be a S2
plaintiff on that claim?
4. Did Great Lakes’ counterclaim differ from the diversity jurisdiction portion of
its original complaint? If so, how? If not, how could Great Lakes be allowed to reassert
the same claim? Would that not be authorizing it to assert a diversity claim against a
non-diverse party?
5. Should Great Lakes be sanctioned? Alternatively, was it required to bring the
same claim twice in this lawsuit?
Page 150 of 358
BEECK v. AQUASLIDE ‘N’ DIVE CORP.
United States Court of Appeals, Eighth Circuit
562 F.2d 537 (1977)
Benson, District Judge.
. . . ……………………………………………..
Jerry A. Beeck was severely injured…, while using a water slide. He and his wife, Judy
A. Beeck, sued Aquaslide ‘N’ Dive Corporation (Aquaslide), a Texas corporation, alleging it
manufactured the slide involved in the accident, and sought to recover substantial damages on
theories of negligence, strict liability and breach of implied warranty.
Aquaslide initially admitted manufacture of the slide, but later moved to amend its
answer to deny manufacture; the motion was resisted. The district court granted leave to amend.
On motion of the defendant, a separate trial was held on the issue of “whether the defendant
designed, manufactured or sold the slide in question.” This motion was also resisted by the
plaintiffs. The issue was tried to a jury, which returned a verdict for the defendant.... Plaintiffs
took this appeal, and stated the issues presented for review to be:
1. Where the manufacturer of the product, a water slide, admitted in its Answer
and later in its Answer to Interrogatories both filed prior to the running of the statute of
limitations that it designed, manufactured and sold the water slide in question, was it an
abuse of the trial court’s discretion to grant leave to amend to the manufacturer in order
to deny these admissions after the running of the statute of limitations?
...
Sources: <http://img03.mar.cx/_images/CA349795> and
<http://i.ushipcdn.com/resize.php?path=%2fstatic%2f61f2d88a-3094-43cd-a.jpg&w=270&h=210>
Reprinted with permission of trade.mar.cx
I. Facts.
...
In 1971 Kimberly Village Home Association [in] … Iowa, ordered an Aquaslide product
from one George Boldt, who was a local distributor handling defendant’s products. The order
was forwarded by Boldt to Sentry Pool and Chemical Supply Co. in … Illinois, and Sentry
forwarded the order to Purity Swimming Pool Supply in … Indiana. A slide was delivered from
a Purity warehouse to Kimberly Village, and was installed by Kimberly employees. … Jerry A.
Beeck was injured while using the slide at a social gathering sponsored at Kimberly Village by
his employer, Harker Wholesale Meats, Inc. Soon after the accident investigations were
undertaken by representatives of the separate insurers of Harker and Kimberly Village. …
Aquaslide first learned of the accident through a letter sent by a representative of Kimberly’s
Page 151 of 358
insurer to Aquaslide, advising that “one of your Queen Model # Q-3D slides” was involved in
the accident. Aquaslide forwarded this notification to its insurer. Aquaslide’s insurance adjuster
made an on-site investigation of the slide…, and also interviewed persons connected with the
ordering and assembly of the slide. An inter-office letter …, indicates that Aquaslide’s insurer
was of the opinion the “Aquaslide in question was definitely manufactured by our insured.” The
complaint was filed….3 Investigators for three different insurance companies, representing
Harker, Kimberly and the defendant, had concluded that the slide had been manufactured by
Aquaslide, and the defendant, with no information to the contrary, answered the complaint…,
and admitted that it “designed, manufactured, assembled and sold” the slide in question.4
The statute of limitations on plaintiff’s personal injury claim expired…. About six and
one-half months later Carl Meyer, president and owner of Aquaslide, visited the site of the
accident prior to the taking of his deposition by the plaintiff.5 From his on-site inspection of the
slide, he determined it was not a product of the defendant. Thereafter, Aquaslide moved the court
for leave to amend its answer to deny manufacture of the slide. ………………………………….
II. Leave to Amend. ……………………………………
Amendment of pleadings in civil actions is governed by Rule 15(a), F.R.Civ.P., which
provides in part that once issue is joined in a lawsuit, a party may amend his pleading “only by
leave of court or by written consent of the adverse party; and leave shall be freely given when
justice so requires.” ……………………………………………………………………………….
In Foman v. Davis, the Supreme Court had occasion to construe that portion of Rule
15(a) set out above: ………………………………………………………………………………
Rule 15(a) declares that leave to amend “shall be freely given when justice so requires,”
this mandate is to be heeded. ... If the underlying facts or circumstances relied upon by a
plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his
claim on the merits. In the absence of any apparent or declared reason such as undue delay,
bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of amendment, etc. the leave sought should, as the rules
require, be “freely given.” Of course, the grant or denial of an opportunity to amend is within
the discretion of the District Court....
This Court in [cition omitted], held that “(p)rejudice must be shown.” The burden is on
the party opposing the amendment to show such prejudice. In ruling on a motion for leave to
amend, the trial court must inquire into the issue of prejudice to the opposing party, in light of
the particular facts of the case. …………………………………………………………………
Certain principles apply to appellate review of a trial court's grant or denial of a motion to
amend pleadings. First, as noted in Foman v. Davis, allowance or denial of leave to amend lies
within the sound discretion of the trial court, and is reviewable only for an abuse of discretion.
The appellate court must view the case in the posture in which the trial court acted in ruling on
3
Aquaslide ‘N’ Dive Corporation was the sole defendant named in the complaint.
4
In answers to interrogatories filed on June 3, 1974, Aquaslide again admitted manufacture of the slide in
question.
5
Plaintiffs apparently requested Meyer to inspect the slide prior to the taking of his deposition to determine
whether it was defectively installed or assembled. ……………………………………………………………………..
Page 152 of 358
the motion to amend. …………………………………………………………………………….
It is evident from the order of the district court that in the exercise of its discretion in
ruling on defendant’s motion for leave to amend, it searched the record for evidence of bad faith,
prejudice and undue delay which might be sufficient to overbalance the mandate of Rule 15(a),
and Foman v. Davis, that leave to amend should be “freely given.” Plaintiffs had not at any time
conceded that the slide in question had not been manufactured by the defendant, and at the time
the motion for leave to amend was at issue, the court had to decide whether the defendant should
be permitted to litigate a material factual issue on its merits.
In inquiring into the issue of bad faith, the court noted the fact that the defendant, in
initially concluding that it had manufactured the slide, relied upon the conclusions of three
different insurance companies,6 each of which had conducted an investigation into the
circumstances surrounding the accident. This reliance upon investigations of three insurance
companies, and the fact that “no contention has been made by anyone that the defendant
influenced this possibly erroneous conclusion,” persuaded the court that “defendant has not acted
in such bad faith as to be precluded from contesting the issue of manufacture at trial.” The court
further found “(t)o the extent that ‘blame’ is to be spread regarding the original identification, the
record indicates that it should be shared equally.”
In considering the issue of prejudice that might result to the plaintiffs from the granting
of the motion for leave to amend, the trial court held that the facts presented to it did not support
plaintiffs’ assertion that, because of the running of the two year Iowa statute of limitations on
personal injury claims, the allowance of the amendment would sound the “death knell” of the
litigation. In order to accept plaintiffs’ argument, the court would have had to assume that the
defendant would prevail at trial on the factual issue of manufacture of the slide. … On the state
of the record before it, the trial court was unwilling to make such assumptions, and concluded
“(u)nder these circumstances, the Court deems that the possible prejudice to the plaintiffs is an
insufficient basis on which to deny the proposed amendment.” The court reasoned that the
amendment would merely allow the defendant to contest a disputed factual issue at trial, and
further that it would be prejudicial to the defendant to deny the amendment.
The court also held that defendant and its insurance carrier, in investigating the
circumstances surrounding the accident, had not been so lacking in diligence as to dictate a
denial of the right to litigate the factual issue of manufacture of the slide.
On this record we hold that the trial court did not abuse its discretion in allowing the
defendant to amend its answer.
...
The record indicates that Carl Meyer, president and owner of Aquaslide, designs the
slides sold by Aquaslide. The slide which plaintiff Jerry A. Beeck was using at the time of his
accident was very similar in appearance to an Aquaslide product, and was without identifying
marks. Kimberly Village had in fact ordered an Aquaslide for its swimming pool, and thought it
had received one. After Meyer’s inspection and Aquaslide’s subsequent assertion that it was not
an Aquaslide product, plaintiffs elected to stand on their contention that it was in fact an
Aquaslide. This raised a substantial issue of material fact which, if resolved in defendant’s favor,
would exonerate defendant from liability.
The insurer of Beeck’s employer, the insurer of Kimberly Village, as well as the defendant's insurer had
each concluded the slide in question was an Aquaslide.
6
Page 153 of 358
… The jury, by special interrogatory, found that the slide had not been manufactured by
Aquaslide. That finding has not been questioned on appeal. …
The judgment of the district court is affirmed.
Notes and Questions:
1. As the trial court comments: “(t)o the extent that ‘blame’ is to be spread regarding the
original identification, the record indicates that it should be shared equally.” Would you fault the
plaintiff? Why?
2. The trial court determined that “the facts presented to it did not support plaintiffs’
assertion that, because of the running of the … statute of limitations …, the allowance of the
amendment would sound the “death knell” of the litigation” [italics added]. Why not?
3. The appellate court agreed with the trial court that the answer could be amended. Was
this a fair result?
Page 154 of 358
WANDA KRUPSKI v. COSTA CROCIERE
Supreme Court of the United States
130 S.Ct. 2485 (2010)
Sotomayor, Associate Justice [bracketed insertions and italics added by professor; most
internal rule and case references deleted].
Rule 15(c) of the Federal Rules of Civil Procedure governs when an amended pleading
“relates back” to the date of a timely filed original pleading [as if it were the original
pleading] and is thus itself timely even though it was filed outside an applicable
statute of limitations [assuming the original pleading was timely filed]. Where an
amended pleading changes a party or a party’s name, the Rule requires, among other
things, that “the party to be brought in by amendment ... knew or should have known
that the action would have been brought against it, but for a mistake concerning the
proper party’s identity.” Rule 15(c)(1)(C). In this case, the Court of Appeals held that
Rule 15(c) was not satisfied because the plaintiff knew or should have known of the
proper defendant before filing her original complaint. The court also held that
relation back was not appropriate because the plaintiff had unduly delayed in seeking to
amend. We hold that relation back under Rule 15(c)(1)(C) depends on what the party to
be added knew or should have known, not on the amending party’s knowledge or its
timeliness in seeking to amend the pleading. Accordingly, we reverse the judgment of
the Court of Appeals.
I
On February 21, 2007, petitioner, Wanda Krupski, tripped over a cable and fractured her
femur while she was on board the cruise ship Costa Magica. Upon her return home, she
acquired counsel and began the process of seeking compensation for her injuries.
Krupski’s passenger ticket—which explained that it was the sole contract between each
passenger and the carrier—included a variety of requirements for obtaining damages for
an injury suffered on board one of the carrier’s ships. The ticket identified the carrier as
Costa Crociere S. p. A., an Italian corporation, and all Vessels and other ships owned,
chartered, operated, marketed or provided by Costa Crociere, S. p. A., and all officers,
staff members, crew members, independent contractors, medical providers,
concessionaires, pilots, suppliers, agents and assigns onboard said Vessels, and the
manufacturers of said Vessels and all their component parts.
The ticket required an injured party to submit “written notice of the claim with full
particulars ... to the carrier or its duly authorized agent within 185 days after the date of
injury.” The ticket further required any lawsuit to be “filed within one year after the date
of injury” and to be “served upon the carrier within 120 days after filing.” *** The ticket
extended the “defenses, limitations and exceptions ... that may be invoked by the
CARRIER” to “all persons who may act on behalf of the CARRIER or on whose
behalf the CARRIER may act,” including “the CARRIER’s parents, subsidiaries,
affiliates, successors, assigns, representatives, agents, employees, servants,
Page 155 of 358
concessionaires and contractors” as well as “Costa Cruise Lines N. V.,” [which was
therein] identified as the “sales and marketing agent for the CARRIER and the issuer of
this Passage Ticket Contract.” The front of the ticket listed Costa Cruise Lines’
address in Florida and stated that an entity called “Costa Cruises” was “the first
cruise company in the world” to obtain a certain certification of quality.
On July 2, 2007, Krupski’s counsel notified Costa Cruise Lines of Krupski's claims. On
July 9, 2007, the claims administrator for Costa Cruise requested additional
information from Krupski “[i]n order to facilitate our future attempts to achieve a prelitigation settlement.” The parties were unable to reach a settlement, however *** . The
complaint alleged that Costa Cruise “owned, operated, managed, supervised and
controlled” the ship on which Krupski had injured herself *** . The complaint ***
averred that, by the July 2007 notice of her claims, Krupski had complied with the
ticket’s presuit requirements. Krupski served Costa Cruise on February 4, 2008.
Over the next several months—after the limitations period had expired—Costa Cruise
brought Costa Crociere’s existence to Krupski’s attention three times. First, on
February 25, 2008, Costa Cruise filed its answer, asserting that it was not the proper
defendant, as it was merely the North American sales and marketing agent for Costa
Crociere, which was the actual carrier and vessel operator. Second, on March 20, 2008,
Costa Cruise listed Costa Crociere as an interested party in its corporate disclosure
statement [per FRCP 7.1(a)(1), designed to identify related corporate entities]. Finally,
on May 6, 2008, Costa Cruise moved for summary judgment, again
stating
that
Costa
Crociere
was
[instead]
the
proper
defendant. On June 13, 2008,
Krupski responded to Costa Cruise’s motion *** , arguing for limited discovery to
determine whether Costa Cruise should be dismissed. According to Krupski, the
following sources of information led her to believe Costa Cruise was the responsible
party: The travel documents prominently identified Costa Cruise and gave its
Florida address; Costa Cruise’s Web site listed Costa Cruise in Florida as the
United States office for the Italian company Costa Crociere; and the Web site of the
Florida Department of State listed Costa Cruise as the only “Costa” company registered
to do business in that State. Krupski also observed that Costa Cruise’s claims
administrator had responded to her claims notification without indicating that Costa
Cruise was not a responsible party. With her response, Krupski simultaneously moved to
amend
her
complaint
to
add
Costa
Crociere
as
a
defendant.
*** [T]he District Court denied Costa Cruise’s motion *** without prejudice [thus
granting leave to refile the motion, after some discovery could be undertaken] and
granted Krupski leave to amend, ordering that Krupski effect proper service on Costa
Crociere *** . [T]he District Court [also] issued an order dismissing Costa Cruise from
the case pursuant to the parties’ joint stipulation *** that Costa Cruise was correct that
it bore no responsibility for her injuries.
Shortly thereafter, Costa Crociere—represented by the same counsel who had represented
Costa Cruise—moved to dismiss, contending that the amended complaint did not
relate back under Rule 15(c) and was therefore untimely. The District Court agreed.
Rule 15(c), the court explained, imposes three requirements before an amended
complaint against a newly named defendant can relate back to the original complaint.
First, the claim against the newly named defendant must have arisen “out of the
Page 156 of 358
conduct, transaction, or occurrence set out-or attempted to be set out-in the original
pleading.” Second, “within the period provided by Rule 4(m) for serving the
summons and complaint” (which is ordinarily 120 days from when the complaint is
filed, see Rule 4(m)), the newly named defendant must have “received such notice of
the action that it will not be prejudiced in defending on the merits.” Finally, the
plaintiff must show that, within the Rule 4(m) period, the newly named defendant
“knew or should have known that the action would have been brought against it, but
for a mistake concerning the proper party's identity.”
The first two conditions posed no problem, the court explained: The claim against Costa
Crociere clearly involved the same occurrence as the original claim against Costa
Cruise, and Costa Crociere had constructive notice of the action and had not shown that
any unfair prejudice would result from relation back. But the court found the third
condition fatal to Krupski’s attempt to [have the amended complaint naming the
new party] relate back, concluding that Krupski had not made a mistake concerning
the identity of the proper party. *** [T]he court explained that the word “mistake”
should not be construed to encompass a deliberate decision not to sue a party whose
identity the plaintiff knew before the statute of limitations had run. Because Costa
Cruise informed Krupski that Costa Crociere was the proper defendant in its answer,
corporate disclosure statement, and motion for summary judgment, and yet Krupski
delayed for months in moving to amend and then [more so] in filing an amended
complaint, the court concluded that Krupski knew of the proper defendant and made no
[applicable] mistake [within the meaning of FRCP 15].
The Eleventh Circuit affirmed *** [and] noted that the relevant information was located
within Krupski’s passenger ticket, which she had furnished to her counsel well before
the end of the limitations period. Because the ticket clearly identified Costa Crociere
as the carrier, the court stated, Krupski either knew or should have known of
Costa Crociere’s identity as a potential party. It was therefore appropriate to treat
Krupski as having chosen to sue one potential party over another. Alternatively,
even assuming that she first learned of Costa Crociere’s identity as the correct
party from Costa Cruise's answer, the Court of Appeals observed that Krupski
waited 133 days from the time she filed her original complaint to seek leave to amend
and did not file an amended complaint for another month after that. In light of this
delay, the Court of Appeals concluded that the District Court did not abuse its
discretion in denying relation back [to the amended complaint naming
Costa Crociere].
We now reverse.
II
Under the Federal Rules of Civil Procedure [15(c)(1)], an amendment to a pleading
relates back to the date of the original pleading when:
(A) the law that provides the applicable statute of limitations allows relation back;
(B) the amendment asserts a claim or defense that arose out of the conduct, transaction,
or occurrence set out—or attempted to be set out—in the original pleading; or
(C) the amendment changes the party or the naming of the party against whom a
Page 157 of 358
claim is asserted, if Rule 15(c)(1)(B) is satisfied and if, within the period provided by
Rule 4(m) for serving the summons and complaint, the party to be brought in by
amendment:
(i) received such notice of the action that it will not be prejudiced in defending on the
merits; and
(ii) knew or should have known that the action would have been brought against it, but
for a mistake concerning the proper party's identity.”
***
A
*** By focusing on Krupski’s knowledge, the Court of Appeals chose the wrong starting
point. The question *** is not whether Krupski knew or should have known the identity
of Costa Crociere as the proper defendant, but whether Costa Crociere knew or should
have known that it would have been named as a defendant but for an error. Rule
15(c)(1)(C)(ii) asks what the prospective defendant knew or should have known
during the Rule 4(m) period, not what the plaintiff knew or should have known at the
time of filing her original complaint.
*** A mistake is “[a]n error, misconception, or misunderstanding; an erroneous belief.”
*** That a plaintiff knows of a party’s [mere] existence does not preclude her from
making a mistake with respect to that party’s identity [for purposes of the instant
lawsuit]. A plaintiff may know that a prospective defendant—call him *** A—exists,
while erroneously believing him to have the status of party B. Similarly, a plaintiff
may know generally what *** A does while misunderstanding the roles that ***A
and party B played in the “conduct, transaction, or occurrence” giving rise to her
claim. If the plaintiff sues party B instead of *** A under these circumstances, she has
made a “mistake concerning the proper party’s identity” notwithstanding her knowledge
of the existence of both parties. The only question *** is whether *** A knew or should
have known that, absent some mistake, the action would have been brought against him.
Respondent [defendant] urges that the key issue ***is whether the plaintiff made a
deliberate choice to sue one party over another. We agree that making a deliberate
choice to sue one party instead of another while fully understanding the factual and
legal differences between the two parties is the antithesis of making a mistake
concerning the proper party’s identity. We disagree, however, with respondent’s
position that any time a plaintiff is aware of the existence of two parties and chooses to
sue the wrong one, the proper defendant could reasonably believe that the plaintiff
made no mistake. The reasonableness of the mistake is not itself at issue. As noted, a
plaintiff might know that the prospective defendant exists but nonetheless harbor[s] a
misunderstanding about his status or role in the events giving rise to the claim at issue,
and she may mistakenly choose to sue a different defendant based on that
misimpression. That kind of deliberate but mistaken choice does not foreclose a
finding that Rule 15(c)(1)(C)(ii) has been satisfied.
This reading is consistent with the purpose of relation back: to balance the interests of the
defendant protected by the statute of limitations with the preference *** for resolving
disputes on their merits. A prospective defendant who legitimately believed that the
limitations period had passed without any attempt to sue him has a strong interest in
repose. But repose would be a windfall for a prospective defendant who understood,
Page 158 of 358
or who should have understood, that he escaped suit during the limitations period only
because the plaintiff misunderstood a crucial fact about his identity. Because a plaintiff’s
knowledge of the existence of a party does not foreclose the possibility that she has
made a mistake of identity about which that party should have been aware, such
knowledge does not support that party’s interest in repose.
***
B
The Court of Appeals offered a second reason why Krupski’s amended complaint did not
relate back: Krupski had unduly delayed in seeking to file, and in eventually filing, an
amended complaint. The Court of Appeals offered no support for its view that a
plaintiff’s dilatory conduct can justify the denial of relation back under Rule
15(c)(1)(C), and we find none. The Rule plainly sets forth an exclusive list of
requirements for relation back, and the amending party’s diligence is not among them.
Moreover, the Rule mandates relation back once the Rule’s requirements are satisfied; it
does not leave the decision whether to grant relation back to the district court’s
equitable discretion.
***
Rule 15(c)(1)(C) does permit a court to examine a plaintiff’s conduct during the Rule
4(m) period [120 days to serve all defendants], but not in the way or for the purpose
respondent or the Court of Appeals suggests. As we have explained, the question *** is
what the prospective defendant reasonably should have understood about the plaintiff’s
intent in filing the original complaint against the first [but improper] defendant. *** 5
C
Applying these principles to the facts of this case, we think it clear that the courts below
erred in denying relation back *** . The District Court held that Costa
Crociere had “constructive notice” of Krupski’s complaint within the Rule 4(m) period.
Costa Crociere has not challenged this finding. Because the complaint made clear
that Krupski meant to sue the company that “owned, operated, managed, supervised
and controlled” the ship on which she was injured, and also indicated (mistakenly) that
Costa Cruise performed those roles, Costa Crociere should have known, within the
Rule 4(m) period, that it was not named as a defendant in that complaint only because
of Krupski’s misunderstanding about which “Costa” entity was in charge of the shipclearly a “mistake concerning the proper party’s identity.”
Respondent contends that because the original complaint referred to the ticket’s forum
requirement and presuit claims notification procedure, Krupski was clearly aware of the
contents of the ticket, and because the ticket identified Costa Crociere as the carrier and
proper party for a lawsuit, respondent was entitled to think that she made a deliberate
choice to sue Costa Cruise instead of Costa Crociere. As we have explained, however,
that Krupski may have known the contents of the ticket does not foreclose the
possibility that she nonetheless misunderstood crucial facts regarding the two
companies’ identities. Especially because the face of the complaint plainly
indicated such a misunderstanding, respondent’s contention is not persuasive.
Moreover, respondent has articulated no strategy that it could reasonably have thought
Krupski was pursuing in suing a defendant that was legally unable to provide relief.
Page 159 of 358
Respondent also argues that Krupski’s failure to move to amend her complaint during the
Rule 4(m) period shows that she made no mistake in that period. *** Krupski’s
failure to add Costa Crociere during the Rule 4(m) period is not sufficient to make
reasonable any belief that she had made a deliberate and informed decision not to sue
Costa Crociere in the first instance. Nothing in Krupski’s conduct during the Rule 4(m)
period suggests that she failed to name Costa Crociere because of anything other than a
mistake.
It is also worth noting that Costa Cruise and Costa Crociere are related corporate entities
with very similar names; “crociera” even means “cruise” in Italian. This
interrelationship and [linguistic] similarity heighten the expectation that Costa Crociere
should suspect a mistake has been made when Costa Cruise is named in a complaint
that actually describes Costa Crociere’s activities. *** In addition, Costa Crociere’s own
actions contributed to passenger confusion over “the proper party” for a lawsuit. The
front of the ticket advertises that “Costa Cruises” has achieved a certification of
quality, without clarifying whether “Costa Cruises” is Costa Cruise Lines, Costa
Crociere, or some other related “Costa” company. Indeed, Costa Crociere is
evidently aware that the difference between Costa Cruise and Costa Crociere can be
confusing for cruise ship passengers. ***
In light of these facts, Costa Crociere should have known that Krupski’s failure to name it
as a defendant in her original complaint [timely filed prior to the running of the SOL]
was due to a mistake concerning the proper party’s identity. We therefore reverse the
judgment of the Court of Appeals for the Eleventh Circuit and remand the case
[to the trial court] for further proceedings consistent with this opinion.
It is so ordered.
5
Similarly, we reject respondent’s suggestion that Rule 15(c) requires a plaintiff to move to amend her
complaint or to file and serve an amended complaint within the Rule 4(m) period. Rule
15(c)(1)(C)(i) simply requires that the prospective defendant has received sufficient “notice of the action”
within the Rule 4(m) period that he will not be prejudiced in defending the case on the merits.
Notes
and
Questions:……………………………………………
1. Beeck allowed a defendant to amend its answer, to add a new defense (nonmanufacture of the product), after the running of the statute of limitations (SOL). Krupski
allowed a plaintiff to add a new defendant after the expiration of the SOL—and after the related
period within which all defendants must normally be served. Do these cases reasonably apply
Rule 15? How did the Krupski court justify its decision?
2. What key question was shifted, from the plaintiff to the defendant, as a result of
Krupski?
Page 160 of 358
NUWESRA v. MERRILL LYNCH, FENNER & SMITH, INC.
United States Court of Appeals, Second Circuit
174 F.3d 87 (1999)
Prof’s Note: Many states have expressly “federalized” their versions of FRCP 11—which first
appeared in the FRCP in 1983. Read Rule 11 closely—especially as you work your way through
the following case.
This is an important area of civil procedure, in addition to the likelihood of its appearing
on the bar—and later touching upon every pleading you file as a plaintiffs’ or defendants’
attorney. Merrill is also a good trial practice case, as it implicates the availability of attorneys’
fees to finance litigation.
Minor editorial enhancements have been added to the text, without so indicating.
Court’s Opinion: PER CURIAM
Attorney Lee Nuwesra (“appellant”) appeals from an order of the United States District
Court for the Southern District of New York sanctioning him under Fed.R.Civ.P. 11(c)(1)(B).
Appellant represented plaintiff Ernesto Forbes in his unsuccessful lawsuit * * * . Following a
bench trial, the district court dismissed all of plaintiff's claims and ordered appellant to pay
attorneys’ fees of $25,000 to defendants pursuant to Fed.R.Civ.P. 11(c)(1)(B). We hold that the
district court improperly imposed sanctions * * * . We therefore vacate the district court’s
sanctions order and remand for further proceedings.
BACKGROUND
A. Plaintiff's Termination
Plaintiff alleged that in late summer or early fall of 1992, while he was working as a
processing clerk in Merrill Lynch’s messenger service center, he learned through an anonymous
test that he was infected with the Human Immunodeficiency Virus (“HIV”). Plaintiff claimed
that in October 1992, he informed his immediate supervisor, D’Apuzzo, of his medical
condition, and as a result, “her attitude toward [him] soured and [his] work environment
gradually became intolerable.” * * * In particular, D’Apuzzo allegedly reassigned many of
plaintiff’s duties to other employees, excluded plaintiff from meetings in or entry to her office,
sprayed disinfectant in her office and on telephones used by plaintiff, asked the cleaning staff to
use disinfectant when cleaning plaintiff’s work area, made derogatory statements about gay
people and people with AIDS in plaintiff’s presence, commented to plaintiff that he looked thin,
“repeatedly screamed at [plaintiff] in front of vendors and other employees and instigated fights
and arguments,” falsely accused plaintiff of improperly borrowing money from a vendor, and
asked plaintiff’s co-workers whether plaintiff was gay and whether he had made sexual advances
toward them.
In January 1993, plaintiff claimed he informed D’Apuzzo’s supervisor, DiBiase, that he
was having difficulty working with D’Apuzzo. DiBiase allegedly acknowledged that he was
aware of plaintiff’s medical status and promised to intervene, but never did. On April 20, 1993,
D’Apuzzo issued a ninety-day probation notice indicating that plaintiff was “unable or unwilling
to work” with her. Plaintiff maintained that he later spoke to Merrill Lynch’s Director of Human
Resources, Nick DiGirolamo, about “the intolerable conditions he was enduring at his job” and
requested a transfer to another department. On September 13, 1993, DiBiase instead called
plaintiff into his office and told him he was fired for “insubordination.”
B. Administrative Proceedings
Page 161 of 358
In February 1994, plaintiff filed dual complaints with the New York City Commission on
Human Rights (“NYCCHR”) and the Equal Employment Opportunity Commission (“EEOC”) *
* * . In July 1994, plaintiff approached the Gay Men’s Health Crisis (“GMHC”) seeking legal
representation. The GMHC was of the view that plaintiff “presented a credible claim of HIV
discrimination” and agreed to represent him in the administrative proceedings.
On February 23, 1995, the NYCCHR * * * found that
[t]he investigation did not support complainant's allegations. The investigation
revealed that complainant committed several acts of misconduct and performed his
job responsibilities poorly. It was because of his performance problems that
complainant was disciplined and eventually terminated * * * .
Plaintiff timely sought review of this determination, and * * * the NYCCHR reaffirmed
its original decision dismissing plaintiff’s complaint.
C. District Court Proceedings
In July 1995, the GMHC * * * referred plaintiff's case to appellant, who agreed to
represent plaintiff on a contingency fee basis. Appellant subsequently filed a complaint on
plaintiff's behalf in federal district court alleging that defendants had violated the ADA
[American’s with Disabilities Act] and state law by terminating plaintiff’s employment on the
basis of his disability. After the parties conducted discovery, the district court held a three-day
bench trial in October 1997. At the close of plaintiff’s evidence, which included his own
testimony, the court found that “leaving aside completely the issue of credibility,” plaintiff had
established a prima facie case of discrimination. Defendants then attempted to establish a
legitimate nondiscriminatory reason for firing plaintiff by presenting witnesses * * * who
testified that plaintiff was fired for insubordination. These witnesses also testified that they were
not aware of plaintiff’s medical condition until after he filed his [post-termination] administrative
complaints. In his summation, defense counsel argued that the first record of plaintiff’s medical
condition was an HIV test conducted in June 1993, two months after plaintiff had been placed on
probation.
At the close of the bench trial, the court dismissed plaintiff’s remaining claims, finding
that “[t]here ha[d] been a total failure of proof on the part of plaintiff as to his claimed disability
or claimed perceived disability and defendants’ knowledge of same.” The court further stated:
If there is going to be a claim for counsel fees by the prevailing party, the defendants, they must
submit [it] in the next thirty days * * * .
I think that counsel fees should be awarded in this case because it is the [c]ourt’s view
that there was no substance to this case to begin with, and the statute allows for the recovery of
counsel fees.
We also have in this court a rule prohibiting the filing of a complaint where there is no
real basis for the complaint. That appears to have been the case here. There has been no
[defendants’] application for a Rule 11 sanction, but I think that the awarding of counsel fees can
serve as a deter[r]ent to bringing this kind of claim, that is, a claim for which there is no real
proof, and no investigation apparently made of the facts prior to filing this complaint.
Merrill Lynch subsequently submitted an affidavit of services detailing its legal fees and
expenses incurred in connection with the lawsuit, which totaled $234,045.66. No motion or
Page 162 of 358
memorandum of law accompanied the affidavit. One week later, the court issued an order
scheduling “a hearing on the award of attorney’s fees” and inviting appellant to respond to
Merrill Lynch’s affidavit. The order further stated that “[t]he court will be awarding attorney’s
fees based on one or more of the following provisions: * * * Rule 11(c)(1)(B) F.R.C.P.; and the
inherent power of the district court to award attorney’s fees.” Appellant filed responsive papers,
and Merrill Lynch filed a reply. The court held a sanctions hearing * * * .
[T]he district court issued an order sanctioning appellant under Rule 11(c)(1)(B) and
ordering him to pay attorneys’ fees of $25,000 to defendants. The order stated that appellant
is not being sanctioned merely or even primarily for the complaint he filed but rather for taking
the case all the way to trial; he is being sanctioned for his ongoing failure to make reasonable
inquiries in the papers he filed before the court, from the complaint onward. His pre-trial
memorandum, submitted after the close of discovery, reiterated many of the problematic
assertions in the case and contained some important omissions.
The district court cited four specific grounds for its sanctions award. First, the court
faulted appellant for failing to ascertain the exact nature of his client’s disability. The court noted
that plaintiff had asserted in the complaint and pretrial order that he was HIV-positive, but had
testified at trial that he had AIDS. The court was also troubled that appellant had suggested at
trial that HIV and AIDS were equivalent. Although the court observed that “there is some
inconsistent parlance in how AIDS is defined,” and that “the medical community and society at
large did not immediately delineate HIV and AIDS,” the court concluded that “it is clearly
problematic for a lawyer bringing ADA cases to stand in a courtroom in 1997 and suggest that
HIV and AIDS are in fact the same thing.”
Second, the district court sanctioned appellant for failing to investigate precisely when
plaintiff learned of his medical condition. In particular, the court noted the absence of any
documentary [trial] evidence supporting plaintiff’s allegation that he tested positive for HIV
either in August 1992, as the complaint alleged, or in October 1992, as plaintiff testified at trial.
At the sanctions hearing, appellant had asserted that no documentary evidence of this test existed
because plaintiff had been tested anonymously, could not recall the name or location of the
testing service, and had received his test results by telephone. * * * .
Third, the district court determined that appellant did not reasonably investigate whether,
when and under what circumstances plaintiff informed his supervisors about his HIV or AIDS
status, which the court characterized as “a crucial omission given that the employer’s notice was
the crux of the case.” The court was particularly troubled by certain inconsistencies in plaintiff’s
complaint, deposition testimony, pretrial submissions and trial testimony concerning when and to
whom * * * plaintiff revealed his medical condition.
Finally, the district court concluded that the NYCCHR’s [administrative] no probable
cause determination was an “extremely relevant circumstance,” which, together with plaintiff’s
inability to produce evidence to support key aspects of his claim, “should have caused
[appellant] to proceed with extra caution, or, better yet, not to proceed at all.”
This appeal followed.
DISCUSSION
* * * Appellant contends that the district court abused its discretion by, among other
things, failing to give him adequate notice and a reasonable opportunity to respond before
imposing sanctions, and awarding attorneys’ fees to defendants sua sponte under Rule
Page 163 of 358
11(c)(1)(B). We address these contentions in turn.
A. Notice and Opportunity to Be Heard
“[D]ue process requires that courts provide notice and an opportunity to be heard before
imposing any kind of sanctions.” Rule 11 itself requires that sanctions be imposed only “after
notice and a reasonable opportunity to respond.” Fed.R.Civ.P. 11(c); see also advisory
committee's note to 1993 amendments (“Explicit provision is made for litigants to be provided
notice of the alleged violation and an opportunity to respond before sanctions are imposed.”).
In particular, “a sanctioned attorney must receive specific notice of the conduct alleged to
be sanctionable and the standard by which that conduct will be assessed, and an opportunity to
be heard on that matter.” “The purpose of particularized notice is to put counsel ‘on notice as to
the particular factors that he must address if he is to avoid sanctions.’ ” Accordingly, Rule 11
requires that the court, before imposing sanctions sua sponte,“enter an order describing the
specific conduct that appears to violate [the rule] and directing [the] attorney * * * to show cause
why it has not violated [the rule] with respect thereto.” Fed.R.Civ.P. 11(c)(1)(B).
The district court's orders in this case failed to apprise appellant of the specific conduct
alleged to be sanctionable. The court's written order stated only that “[t]he court will be awarding
attorney's fees based on one or more of the following provisions: 42 U.S.C. § 12205; 28 U.S.C. §
1927; Rule 11(c)(1)(B) F.R.C.P.; and the inherent power of the district court to award attorney’s
fees.” Although this order notified appellant of the possible legal bases for a fee award, it failed
to apprise him of the particular conduct for which the court was considering imposing sanctions.
The district judge’s statements from the bench at the end of the trial were similarly
deficient.2 Those statements referred only to conduct leading up to and including the filing of the
complaint: [see p.3 (above) trial court quotes] * * * . The judge’s statements at the end of the
trial therefore failed to identify the specific conduct for which appellant was ultimately
sanctioned, and thus failed to “put [appellant] on notice as to the particular factors that he
[needed to] address * * * to avoid sanctions.”
The district court also failed to give appellant “a reasonable opportunity to respond” before
imposing sanctions. See Fed.R.Civ.P. 11(c). During the sanctions hearing, the court questioned
appellant concerning the nature and extent of his pre-filing investigation3 and his knowledge of
the NYCCHR’s no probable cause determination.4 The court did not, however, address other
specific instances of conduct for which it later sanctioned appellant. For example, the court did
not address appellant’s putative failure to ascertain whether plaintiff had HIV or AIDS5 or his
failure to investigate defendants’ knowledge of plaintiff’s disability.6 Because these alleged
failures “w[ere] not explicitly raised during the hearing,” appellant “was not sufficiently put on
notice that this was his opportunity to defend himself against th[ese] charge [s].” In our view,
appellant was thus entitled to “a more focused hearing before sanctions were imposed.”
B. Attorneys’ Fees under Rule 11
Under Rule 11(c), a court may impose sanctions either by [a party’s] motion, see Rule
11(c)(1)(A), or on its own initiative, see Rule 11(c)(1)(B). Rule 11(c), however, also limits the
types of sanctions that may be imposed for violation of the rule as follows:
A sanction imposed for violation of this rule shall be limited to what is sufficient to deter
repetition of such conduct or comparable conduct by others similarly situated * * * . [T]he
sanction may consist of, or include, directives of a nonmonetary nature, an order to pay a penalty
into court, or, if imposed on motion and warranted for effective deterrence, an order directing
payment to the movant of some or all of the reasonable attorneys' fees
Page 164 of 358
and other expenses incurred as a direct result of the violation. Fed.R.Civ.P. 11(c)(2) (emphasis
added). As the italicized language indicates, a court may award attorneys’ fees under Rule 11
only “if imposed on motion” under Rule 11(c)(1)(A). By its terms, the rule thus precludes a court
from awarding attorneys’ fees on its own initiative. See Fed.R.Civ.P. 11 advisory committee’s
note to 1993 amendments (“The revision [to subsection
(c) ] provides that a monetary sanction imposed after a court-initiated show cause order be
limited to a penalty payable to the court.”); [case citation omitted 6] (“[W]here sanctions are
imposed under Rule 11(c)(1)(B) by a district court on its own initiative, * * * the award of
attorney’s fees * * * [does not] constitute a valid sanction.”).
Defendants did not move for sanctions in this case. The court, not defendants, raised the
issue of sanctions at the end of the trial and later issued a written order setting forth the grounds
it was considering for the imposition of sanctions. Defendants ask this Court to treat Merrill
Lynch’s affidavit of services and reply affidavit as a motion for sanctions under Rule
11(c)(1)(A). A motion for sanctions, however, must “be made separately from other motions or
requests” and must “describe the specific conduct alleged to violate [the rule].” Fed.R.Civ.P.
11(c)(1)(A). * * *
We conclude that the district court sanctioned appellant on its own initiative rather than
by motion. Because Rule 11(c)(2) permits a court to award attorneys' fees only by motion, the
district court had no authority to do so sua sponte. We also have concerns about the evidentiary
basis for the court's sanctions order based on the fuller record that appellant has developed on
appeal. See footnotes 3-6, supra. We trust, however, that the experienced [damning with feigned
praise?] district court judge will, on remand, consider this fuller record in deciding whether to
reinitiate sanctions proceedings under Rule 11(c)(1)(B).
CONCLUSION
We hold that the district court improperly sanctioned appellant without giving him
adequate notice and a reasonable opportunity to respond, and had no authority under Rule
11(c)(1)(B) to award attorneys’ fees to defendants sua sponte. For the reasons discussed, we
vacate the district court’s sanctions order and remand for further proceedings in the district
court’s discretion.
………………………..…… Notes and Questions: …….………………………………………
1. What is Rule 11’s most essential requirement?
2. How was that requirement breached in Merrill?
3. In what way did the trial judge breach Rule 11?
2. We assume, without deciding, that a judge’s statements on the record could satisfy the requirements of
Fed.R.Civ.P. 11(c)(1)(B) in the absence of a written order to show cause. But cf. Fed.R.Civ.P. 11(c)(1)(B) (“On its
own initiative, the court may enter an order describing the specific conduct that appears to violate subdivision (b)
and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b) with respect
thereto.”)
3. Appellant informed the court that before filing the complaint, he met with plaintiff on at least three
occasions, reviewed plaintiff’s “extensive file,” consulted plaintiff's former attorney at the GMHC (who had
investigated plaintiff's claims and found them to be credible), and interviewed at least thee non-party witnesses
(including two ministers) to whom plaintiff had revealed his HIV status as of late 1992.
4. We have noted that “employment-agency determinations ‘are not homogeneous products; they vary
greatly in quality and factual detail.’ ” * * * We have seen many employment discrimination cases in which
plaintiffs established liability at trial after an agency finding of no probable cause.
Page 165 of 358
5. The record reveals that appellant proffered expert medical testimony at trial to explain the relationship
between HIV and AIDS. According to appellant's proffer, this testimony would have demonstrated that plaintiff
qualified as having AIDS based on his June 1993 HIV test. Appellant argued to the district court, moreover, that
proof of actual disability was not required in a case alleging discrimination based on a perceived disability.
6. The record reveals that from the complaint onward, plaintiff consistently averred that he told D’Apuzzo,
his immediate supervisor, about his HIV/AIDS status before the allegedly discriminatory treatment began. In
addition, the pretrial order and pretrial memorandum both asserted that DiBiase, the supervisor who ultimately fired
plaintiff, acknowledged that he was aware of plaintiff's medical status prior to his discharge.
Page 166 of 358
RYDER v. JEFFERSON HOTEL CO.
Supreme Court of South Carolina
113 S.E. 474 (1922)
Marion, J. [delivered the opinion of a divided court:]
The complaint … alleges … that the plaintiff Charles A. Ryder and the plaintiff Edith C.
Ryder are husband and wife; that the plaintiff[s] … became guests of the defendant Jefferson
Hotel Company, and entered into a contract with said Jefferson Hotel Company for
accommodations usually incident to the relationship between innkeeper and guest; that
thereafter, during the night of October 4th, the defendant S. J. Bickley, acting as the servant and
agent of the defendant Jefferson Hotel Company, roused the plaintiffs by rapping upon their
room door, and in a rude and angry manner insulted the plaintiff Edith C. Ryder; that as a result
of the insults, imputations, and charges, which are fully set out in the complaint, and of the
flagrant breach of the contractual obligations and resultant duties which the defendants owed the
plaintiffs as public guests for hire, the plaintiffs were compelled to give up the accommodations
due them and leave the said hotel, and were forced at midnight and at great inconvenience and
uncertainty to seek another lodging place; that by reason of such high-handed, malicious, and
willful conduct, on the part of the said hotel and its servant and agent, the plaintiffs were greatly
injured in their reputations, credit, and business, and that the plaintiff Charles A. Ryder has …
been deprived of great gains and profits which he would have made; and that by reason of the
careless, negligent, willful, and wanton breach of said contract and high-handed acts and insults
the plaintiffs have been damaged in the sum of $10,000.
Source: <http://farm4.staticflickr.com/3018/2570890876_1ff00a08eb_m.jpg>
Reprinted with Permission of Security Federal Savings and Loan Association (Columbia, S.C.)
and Ron Chapiesky Studio
Defendants separately demurred to the complaint upon the ground that it appeared upon
the face thereof that several causes of action had been improperly united therein, for the reason
that the several causes of action united do not affect all the parties to the action. From an order
overruling the demurrer, defendants appeal.
The sole question for determination is: Does the complaint contain two causes of action
which may be joined in the same complaint? It is apparent, as appellants suggest, that the
complaint alleges a cause of action by Charles A. Ryder against the defendants for a personal
167
tort—that is, for a breach of duty growing out of the relationship existing between the parties, to
wit, innkeeper and guest—and also a cause of action by Edith C. Ryder against the defendants
for a tortious breach of duty growing out of the same relationship. It is also apparent that both of
these alleged causes of action arose out of the same transaction, in the sense that the injury to
each of the plaintiffs was caused by the same delict. But appellants contend that it is equally
apparent from the allegations of the complaint that the rights invaded and the injuries sustained
are necessarily several, and that plaintiffs cannot maintain a joint action and recover joint
damages therefor. We think that contention must be sustained.
Section 218 of the Code of Procedure (1912), classifying the various causes of action
which may be united in the same complaint, contains this proviso:
But the causes of action, so united, must all belong to one of these classes, and, except
in actions for the foreclosure of mortgages, must affect all the parties to the action, and not
require different places of trial, and must be separately stated.
The rule applicable is … :
When a tort of a personal nature, as assault and battery, a false imprisonment, a libel, a
slander, a malicious prosecution, or the like, is committed upon two or more, the right of
action must, except in a very few special cases, be several. In order that a joint[ly filed] action
may be possible, there must be some prior bond of legal union between the persons injured—
such as partnership relation—of such a nature that the tort interferes with it, and by virtue of
that very interference produces a wrong and consequent damage common to all. It is not every
prior existing legal relation between the parties that will impress a joint character upon the
injury and damage. Thus, if a husband and wife be libeled, or slandered, or beaten, although
there is a close legal relation between the parties, it is not one which can be affected by such a
wrong, and no joint cause of action will arise. …
That the rights infringed and the injuries suffered by the two plaintiffs in the case at bar
are several, and not joint, would not seem open to question. To illustrate: If the two plaintiffs,
husband and wife, occupying the same berth in a sleeping car, had both been physically injured
in a wreck of the train, it would scarcely be contended that they could properly bring a joint
action for the damages sustained by each on account of the carrier’s delict. The complaint here
does not state a cause of action for injuries to the wife alone, and join the husband as a formal
party…. Neither is the husband’s alleged cause of action based upon loss of consortium and
expenses incurred on behalf of the wife. The wife’s cause of action as alleged does not “affect”
the husband, and the husband’s cause of action does not “affect” the wife, in the sense that the
Code of Procedure requires that the causes of action joined in the same complaint “must affect
all parties to the action.” Neither has a legal interest in the pecuniary recovery of the other, and in
contemplation of law there can be no joint and common damage to both resulting from a wrong
which gives rise to separate and distinct rights personal to each. …
At common law it seems that even the husband’s cause of action for the loss of the wife’s
services and companionship and expenses incurred by him on account of injury to the wife could
not be joined with the cause of action for injuries personal to the wife. … In the case at bar not
only are the parties plaintiff different, and the potential elements of damage recoverable by the
parties different, but neither party has the right to sue for the benefit of the other…. We are
168
therefore clearly of the opinion that there is no such joint right to enforce a common recovery as
entitles the plaintiffs in the case at bar to join their several causes of action in the same
complaint.
...
The order of the circuit [trial] court is reversed.
...
Fraser, J. (dissenting).
I cannot concur in the opinion of Mr. Justice Marion. … The plaintiffs were occupying a
room at the hotel, claiming that they were husband and wife. They were expelled from the hotel,
under the allegation that they were not husband and wife. It was a denial of the joint relationship
that caused the trouble.
… [T]he illustrations used [above] are not appropriate to the case. When a husband and
wife are injured in one railroad accident, the injuries are [admittedly] individual, and not joint.
[But i]t seems to me that the case is somewhat like an injury to a copartnership. I do not think
that it will be doubted that the copartnership can bring an action for injury to the copartnership,
although the injury to the two copartners may not be the same. One of the copartners may have
no other business that could be affected. The other may have other business, and all business in
which the other copartner is engaged may be affected. In the joint action the other copartner may
not be able to recover for the injury peculiar to himself; but the injury to the copartnership is a
joint injury, and for this injury it may recover. Here the offense was against the husband and wife
and affected their relation as husband and wife. This is manifestly a joint injury. If the defendant
had moved to strike out those allegations of damage that were peculiar to the husband, a different
question would have been presented; but to my mind there certainly was a joint injury, for which
a joint action can be maintained, and it was not error [for the trial judge] to overrule the
demurrer.
For these reasons I dissent.
Notes and Questions:
1. The common law penchant for limited joinder had its origins in English practice—
before the printing press, when the pleadings were oral. As a result, the early American code
practice greatly limited joinder of claims and parties.
2. See FRCP 20(a), part of the federal approach to such matters, when promulgated in
1938. Would the federal result be the same as in Ryder?
169
TANBRO FABRICS CORP. v. BEAUNIT MILLS
New York Supreme [trial] Court, Appellate Division
167 N.Y.S.2d 387 (1957)
OPINION OF THE COURT
Breitel, J. [delivered the unanimous opinion of the court:]
… [T]he question here is whether a buyer of textile goods may obtain a single trial
against the seller and the processor of the goods, either by joinder in a single action, or by
consolidation of actions, to determine whether the goods are defective, and if so, whether the
defect is the consequence of breach by the seller, or the processor, or both of them. Special Term
held that such joinder or consolidation is not available. A contrary view is reached here. It is held
that the buyer is entitled to have such a common trial, either by joinder in a single action or by a
consolidation of actions.
The underlying business dispute spawned three lawsuits. In the first action …, the seller,
Beaunit, sought to recover the purchase price of goods sold and delivered to Tanbro. The buyer,
Tanbro, counterclaimed for breach of warranty for improper manufacture, as a result of which
the goods were subject to ”yarn slippage.” The seller replied to the counterclaim by denying that
the slippage was due to improper manufacture. A portion of the goods still being in the hands of
the processor, Tanbro initiated another action …, to recover these goods. The processor, Amity,
counterclaimed for its charges and asserted its claim to the goods under an artisan’s lien. In the
exchanges that preceded and attended the bringing of these lawsuits, the buyer Tanbro received
Beaunit’s assertion that the yarn slippage was caused by the processor’s improper handling,
while with equal force the processor charged the same defect to Beaunit as a consequence of its
improper manufacture.
At this juncture, Tanbro, the buyer, brought the third lawsuit … against Beaunit and
Amity, charging the goods were defective because of yarn slippage and that such slippage was
caused by either the seller, Beaunit, or alternatively the processor, Amity, or both. This is the
main action before the court.
… [T]he buyer Tanbro moved to consolidate the three actions. Beaunit and Amity
separately cross-moved to dismiss the complaint in the buyer’s main action on the ground that
there were prior actions pending between the parties with respect to the same cause of action.
The motion to consolidate was denied and Beaunit’s cross motion to dismiss the complaint as
against it was granted.
The order should be modified by granting the consolidation, denying the cross motion of
the seller Beaunit to dismiss the complaint as to it in the buyer’s main action and otherwise
affirming the order.
Both the seller and the processor resist consolidation. They do so on the ground that each
had a separate and different relationship to the buyer, and that each was involved in a separate
and independent contract. Therefore, they say, there is not involved the “same transaction or
occurrence,” nor any common question of law or fact to sustain either a joinder of parties or a
consolidation of the actions. They stress that the buyer Tanbro wishes to pit against each other
the seller and the processor on the issue of responsibility for the alleged defect, while the buyer
sits back free from the obligation to prove a full case, as it would otherwise have to do in
separate actions against the seller and the processor. The buyer, on the other hand, argues that
what is identical to the cases are the goods and the defect, with the common question of who is
responsible for the defect. The buyer concedes that it would have to prove the defect, and also
prove that the defect must have been caused by either the seller or the processor or both of them;
170
that, therefore, this involves a single transaction or occurrence and involves a common question
of fact.
The controlling statute is section 212 of the Civil Practice Act. … The portion pertinent
to the joinder of defendants reads as follows: “2. All persons may be joined in one action as
defendants if there is asserted against them jointly, severally, or in the alternative, any right to
relief in respect of or arising out of the same transaction, occurrence, or series of transactions or
occurrences and if any question of law or fact common to all of them would arise in the action
[italics added]. Judgment may be given according to their respective liabilities, against one or
more defendants as may be found to be liable upon all of the evidence, without regard to the
party by whom it has been introduced.” A reading of the section by itself would suggest little or
no difficulty in permitting a joinder of parties in the buyer’s main action or a consolidation of the
three actions. However, the section has a history, which has created some confusion as to the
meaning and application of the section.
The seller and the processor rely heavily on ... [a] case [which] arose under the
predecessor statute permitting joinder…. In that case the plaintiff sought to join in one death
action the person charged with having caused the accident resulting in the injuries ending in
death and a treating physician who, it was charged, by his incompetence, was the cause of the
decedent’s death. The Court of Appeals expressed doubt whether the joinder statute
contemplated joinder in such a case, even if the section were given a liberal interpretation. It
went on, however, to hold that section 258 of the Civil Practice Act … a restriction on joinder of
causes of action in pleading, was a limiting factor in permitting joinder of parties. Applying the
statute, it held the joinder impermissible.
In reaction to this decision, and on the recommendation of the Judicial Council, section
258 was repealed in favor of a broad pleading section. In making the recommendation, the
Judicial Council … added, ”Complete freedom should be allowed in the joinder of causes of
action as in the joinder of parties, and it is submitted that the correct approach to the joinder both
of parties and of causes of action is the English one: May the matters conveniently be tried
together? The problem is to combine as many matters as possible to avoid multiplicity and at the
same time not unduly complicate the litigation for the jury.”
...
Notably, in the … English cases relied upon therein, there were joined, as defendants,
parties that owed to plaintiff obligations under independent and separate contracts and in
independent and separate relationships. In none of the cases was the “same transaction or
occurrence” construed to require an identity of duty and relationship. … In the instant case the
common questions are: Were the goods defective, and if so, by whom was the defect caused?
The emphasis in the legislative and decisional history is that the joinder statute is to be
accorded broad liberality and interpretation in order to avoid multiplicity of suits and
inconsistencies in determination. Moreover, the philosophy of broad joinder of parties has been
followed in many jurisdictions.
...
This then is the background for the present section 212 of the Civil Practice Act. It should
be beyond argument, by now, that it is no longer a bar to joinder, and … to consolidation, that
there is not an identity of duty or contract upon which to assert alternative liability. It is still
necessary, of course, that there be a finding that the alternative liability arises out of a common
transaction or occurrence involving common questions of fact and law. But this is not a rigid test.
It is to be applied with judgment and discretion, in the balancing of convenience and justice
171
between the parties involved. Indeed, the buyer’s situation prompted Special Term [the judge] to
comment that the buyer, Tanbro, “is in the unenviable position of not knowing possibly which of
its contracting parties is responsible and in separate actions may find itself confronted with
defeat in each event though the product as finally delivered may be defective.”
… [A]s the Judicial Council foresaw in its Fifteenth Annual Report: “Similarly, when a
party is in doubt as to the person from whom he is entitled to relief, the pleading of necessity will
assert a right in the alternative; for only by asserting facts which in the alternative fasten liability
either upon one or the other defendant can the plaintiff make out a cause of action and, by
proving such facts, establish a prima facie case.”
...
In the light of this reasoning, the cross motion dismissing the complaint in the buyer’s
main action against the seller, Beaunit, on the ground of prior action pending, should have been
determined otherwise. It is in that action and under that complaint that both defendants are
charged with alternative liability. While consolidation would bring all of the parties and their
respective claims and cross claims together, there would actually be no [need for a] pleading
which asserts alternative liability under section 212. …
The right of joinder and the privilege to obtain consolidation is always counterbalanced,
of course, by the power of the court to grant a severance, or to deny a consolidation, if prejudice
or injustice appear. In this case, the danger of separate trials, leading, perhaps, to an unjust and
illogical result, is a possibility well worth avoiding. The buyer is entitled to a less hazardous
adjudication of his dispute, so long as he is able to make out a prima facie case of alternative
liability.
Accordingly, the order of Special Term insofar as it granted the cross motion to dismiss
the complaint in the first-described action as against the defendant Beaunit and denied the buyer
Tanbro’s motion to consolidate the three actions should be modified to deny the cross motion
and to grant the motion to consolidate, … on the law and in the exercise of discretion of the
court.
...
Notes and Questions: …………………………………….
1. The above term “jointly, severally, or in the alternative” is mentioned in the FRCP.
What does it mean?........................................ …………………………………………………
2. The referenced relaxation of joinder, to which Tanbro alludes, facilitated the
consolidation of its several actions into one case. What are the merits of the modern approach?
What are the demerits? When the relaxed approach to joinder results in practical problems, they
can be alleviated by the alternative remedies provided in FRCP 42.
172
BANK OF CALIFORNIA NATIONAL ASS’N v. SUPERIOR COURT
California Supreme Court
16 Cal.2d 516 (1940) (superseded by statute)
Gibson, Chief Justice [delivered the opinion for a unanimous court:]
This is a petition for a writ … to restrain the respondent superior court from proceeding
with the trial of an action without bringing in certain parties alleged to be “necessary and
indispensable.”
Sara M. Boyd, the widow of Colin M. Boyd, died …, leaving an estate valued at about
$225,000. … [I]n the superior court in San Francisco, her will was admitted to probate, and
petitioner, Bank of California, was appointed executor. The will left individual legacies and
bequests amounting to $60,000 to a large number of legatees, including charitable institutions
and individuals, some residing in other states and in foreign countries. Petitioner, St. Luke’s
Hospital, was named residuary legatee and devisee, and thereby received the bulk of the estate.
St. Luke’s Hospital (circa 1920)
Source: <http://burritojustice.files.wordpress.com/2009/03/st-lukes-1920.jpg?w=450&h=315>
Reprinted with Permission of California Pacific Medical Center
On October 14, 1937, Bertha M. Smedley, a niece and legatee, brought an action to
enforce the provisions of an alleged contract by which decedent agreed to leave her entire estate
to the plaintiff. The complaint named as parties defendant the executor and all of the
beneficiaries under the will, and prayed for a decree adjudging that plaintiff is, by virtue of the
agreement, the owner of the entire estate of the decedent after payment of debts and expenses. It
was further prayed that plaintiff’s title to the property be quieted; that defendants be ordered to
execute deeds to her, and that upon the failure of any defendant to do so the clerk should execute
such an instrument.
Summons was served only upon petitioners, the executor and the residuary legatee. No
other defendants were served, and none appeared. Petitioners filed separate answers. The action
came to trial on November 15, 1939. Immediately upon its opening, petitioners made a motion
… for an order to bring in the other defendants, and to have summons issued and served upon
them. The motion was made on the ground that all the other defendants were “necessary and
173
indispensable parties” to the action, and that the court could not proceed without them. The
motion was denied by respondent court. Petitioners then applied for a writ … to restrain the trial
until these other parties should be brought in.
In support of their application, petitioners point out that the complaint challenges the
right of every legatee and devisee to share in the estate, and prays for an award of the entire
property to plaintiff. It is contended that a trial and judgment without the absent defendants
would adversely affect the rights of such parties, would result in a multiplicity of suits, and
would subject the petitioning executor to inconvenience, expense and the burden of future
litigation.
To test the theory of petitioners, it will be necessary to examine briefly the origin and nature of
the rules on required or compulsory joinder of parties. We may eliminate, at the outset, the field
of permissive joinder of “proper parties,” for there is no doubt that the absent defendants are
interested in the issues and subject of the action, and could properly be joined. For the same
reason, these legatees, if they had not been named as defendants, could no doubt have intervened
in the action. These propositions are conceded by all parties, and the precise issue is thus made
clear, whether the absent defendants are 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. ………………………………………………………………
…
Equity courts developed another theory of compulsory joinder, to carry out the policy of
avoiding piecemeal litigation and multiplicity of suits. Those persons necessary to a complete
settlement of the controversy were usually required to be joined, in order that the entire matter
might be concluded by a single suit. … Generally speaking, the modern rule under the codes
carries out the established equity doctrine. Thus, section 389 of the Code of Civil Procedure
states: “The court may determine any controversy between parties before it, when it can be done
without prejudice to the rights of others, or by saving their rights; but when a complete
determination of the controversy cannot be had without the presence of other parties, the court
must then order them to be brought in.” …
But the equity doctrine as developed by the courts is loose and ambiguous in its
expression and uncertain in its application. Sometimes it is stated as a mandatory rule, and at
other times as a matter of discretion, designed to reach an equitable result if it is practicable to do
so. And despite various attempts at reconciliation of conflicting expressions…, a great deal of
confusion still remains in the cases. Bearing in mind the fundamental purpose of the doctrine, we
should, in dealing with “necessary” and “indispensable” parties, be careful to avoid converting a
discretionary power or a rule of fairness in procedure into an arbitrary and burdensome
requirement which may thwart rather than accomplish justice. These two terms have frequently
been coupled together as if they have the same meaning; but there appears to be a sound
distinction, both in theory and practice, between parties deemed “indispensable” and those
considered merely “necessary” [italics added]. … “It has been objected that the terms
‘necessary’ and ‘indispensable’ convey the same idea ... But a distinction has been drawn. 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. The latter are those without whom the court cannot proceed.”
First, then, what parties are indispensable? There may be some persons whose interests,
rights, or duties will inevitably be affected by any decree which can be rendered in the action.
174
Typical are the situations where a number of persons have undetermined interests in the same
property, or in a particular trust fund, and one of them seeks, in an action, to recover the whole,
to fix his share, or to recover a portion claimed by him. The other persons with similar interests
are indispensable parties. The reason is that a judgment in favor of one claimant for part of the
property or fund would necessarily determine the amount or extent which remains available to
the others. Hence, any judgment in the action would inevitably affect their rights. Thus, in an
action by one creditor against assignees for the benefit of creditors, seeking an accounting and
payment of his share of the assets, the other creditors were held indispensable; and in an action
by plaintiff to enforce a trust, where he claimed the property in his own right, to the exclusion of
another actual beneficiary, failure to join the latter was held fatal to the judgment. Where, also,
the plaintiff seeks some other type of affirmative relief which, if granted, would injure or affect
the interests of a third person not joined, that third person is an indispensable party. Thus, in an
action by a lessor against a sublessee to forfeit a parent lease because of acts of the sublessee, the
sublessors (original lessees) were indispensable parties, since a decree of forfeiture would
deprive them of their lease. And in a suit to cancel illegal registration of voters, all voters whose
registration was challenged were indispensable parties. …
All of these persons are, of course, “necessary” parties, but the decisions show that they
come within a special classification of necessary parties, to which the term “indispensable”
seems appropriate. An attempt to adjudicate their rights without joinder is futile. Many cases go
so far as to say that the court would have no jurisdiction to proceed without them, and that its
purported judgment would be void and subject to collateral attack. The objection being so
fundamental, it need not be raised by the parties themselves; the court may, of its own motion,
dismiss the proceedings, or refuse to proceed, until these indispensable parties are brought in. It
follows that if the court does attempt to proceed, it is acting beyond its jurisdiction and may be
restrained by [an appellate court’s writ of] prohibition.
The other classification includes persons who are interested in the sense that they might
possibly be affected by the decision, or whose interests in the subject matter or transaction are
such that it cannot be finally and completely settled without them; but nevertheless their interests
are so separable that a decree may be rendered between the parties before the court without
affecting those others. These latter may perhaps be “necessary” parties to a complete settlement
of the entire controversy or transaction, but are not “indispensable” to any valid judgment in the
particular case. They should normally be joined, and the court … will usually require them to be
joined, in order to carry out the policy of complete determination and avoidance of multiplicity
of suits. But, since the rule itself is one of equity, it is limited and qualified by considerations of
fairness, convenience, and practicability. Where, for example, it is impossible to find these other
persons or impracticable to bring them in, the action may proceed as to those parties who are
present.
...
With the foregoing distinctions in mind, the present action may be examined to determine
whether the absent defendants are indispensable or only necessary parties. …
The action in these cases [e.g., by Smedley] is against the distributee personally [in
personam], and not against the estate; and it is independent of the will and the probate
proceeding [in rem]. … Where there are a number of legatees and devisees, they would all
appear to be “necessary” parties in the sense that the main issue, the validity of the testamentary
disposition of the property of decedent, affects their property interests, and the entire matter, the
disposition of all of the decedent’s property, cannot be finally settled without a binding
175
adjudication for or against every legatee or devisee. Hence, the court will usually order them
served and brought in unless there is some good reason for not doing so. But the absent
defendants in such a case are not indispensable parties. Unlike the situations discussed above, in
which any judgment would necessarily affect the rights of the absent persons, the case here is
one where plaintiff may litigate her claim against the appearing defendants alone and obtain a
decree which binds them alone. The absent defendants, not being before the court, will not be
bound by the judgment, whether favorable or unfavorable, and their property interests will not be
affected.
...
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 [and thus, directly prosecutes] the suit against less
than all of the distributees, it must be clear that they [absentees] are not indispensable parties. So,
in the present case, 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.
...
Only brief mention need be made of the contention that the prosecution of the action
against less than all of the distributees will cause inconvenience and multiplicity of suits to the
injury of the [main probate action] executor. These are all matters within the discretion of the
court to consider in connection with its policy to settle the entire controversy in one proceeding,
if possible. But the contention, as we have seen, does not go to the jurisdiction of the court [to
proceed with both actions].
We have refrained from discussing the question whether the lower court's denial of the
motion to bring in the absent defendants was, under the circumstances, an abuse of discretion. If
they were readily available and could have been brought in without serious difficulty, it may well
be that the motion should have been granted. On the other hand, if, as is asserted by respondents,
many reside outside the state or the country, great difficulty might be encountered in any attempt
to bring them in, and the trial might be indefinitely delayed, to the detriment of the present
parties. The fact that the interests of the absent defendants are trivial as compared with that of the
residuary legatee, which received over seventy-five percent of the estate, is perhaps some
indication of the reason why plaintiff chose to go to trial against the latter alone. All these
considerations, however, were for the trial court in the first instance, and its determination,
though reviewable in the proper manner, cannot be attacked on an application for writ of
prohibition.
...
The alternative writ, heretofore issued is discharged, and the peremptory writ is denied.
Notes and Questions:
1. The executor’s suit was an in rem proceeding, designed to effectively bring all the
estate property before the probate court, so as to disseminate its content to the will’s intended
beneficiaries. Most of the absentee “defendants” (in name only) were not served, and few
appeared. As you should recall, this would not be a problem, as to the in rem probate action.
Beneficiary Smedley’s related suit, on the other hand, was an in personam action. Its objective
was to deprive the other beneficiaries of the property due them under the will. Recall that in the
decade prior to International Shoe, jurisdiction over the absentees could be asserted only if they
were served with notice of suit in the forum state. Even if there had been an applicable long-arm
176
statute, the foreign location of many defendants precluded Smedley from providing them with
notice of her action.
2. How does one distinguish between “necessary” and “indispensible” parties? Were both
types of “defendants” present in this case?
3. Assuming Bertha Smedley won her case, what did she get? Would it be all of the
estate, as she claimed? If not, what next?
177
PROVIDENT TRADESMENS BANK & TRUST CO. v. PATTERSON
United States Supreme Court
390 U.S. 102 (1968)
Mr. Justice Harlan delivered the [unanimous] opinion of the Court.
This controversy, involving in its present posture the dismissal of a[n] … action for
nonjoinder of an ‘indispensable’ party, began nearly 10 years ago with a traffic accident. An
automobile owned by Edward Dutcher, who was not present when the accident occurred, was
being driven by Donald Cionci, to whom Dutcher had given the keys. John Lynch and John
Harris were passengers. The automobile crossed the median strip of the highway and collided
with a truck being driven by Thomas Smith. Cionci, Lynch, and Smith were killed and Harris
was severely injured.
Three tort actions were brought. Provident Tradesmens Bank, the administrator of the
estate of passenger Lynch and petitioner here, sued the estate of the driver, Cionci, in a diversity
action. Smith’s administratrix, and Harris in person, each brought a state-court action against the
estate of Cionci, Dutcher, the owner, and the estate of Lynch. These Smith and Harris actions,
for unknown reasons, have never gone to trial and are still pending. The Lynch action against
Cionci’s estate was settled for $50,000, which the estate of Cionci, being penniless, has never
paid.
Dutcher, the owner of the automobile and a defendant in the as yet untried tort actions,
had an automobile liability insurance policy with Lumbermens Mutual Casualty Company, a
respondent here. That policy had an upper limit of $100,000 for all claims arising out of a single
accident. This fund was potentially subject to two different sorts of claims by the tort plaintiffs.
First, Dutcher himself might be held vicariously liable as Cionci’s ‘principal;’ the likelihood of
such a judgment against Dutcher is a matter of considerable doubt and dispute. Second, the
policy by its terms covered the direct liability of any person driving Dutcher’s car with Dutcher’s
‘permission.’
The insurance company had declined, after notice, to defend in the tort action brought by
Lynch’s estate against the estate of Cionci, believing that Cionci had not had permission and
hence was not covered by the policy. The facts allegedly were that Dutcher had entrusted his car
to Cionci, but that Cionci had made a detour from the errand for which Dutcher allowed his car
to be taken. The estate of Lynch, armed with its $50,000 liquidated claim against the estate of
Cionci, brought the present diversity action for a declaration that Cionci’s use of the car had been
‘with permission’ of Dutcher. The only named defendants were the company and the estate of
Cionci. The other two tort plaintiffs were joined as plaintiffs. Dutcher, a resident of the State of
Pennsylvania as were all the plaintiffs, was not joined either as plaintiff or defendant. The failure
to join him was not adverted to at the trial level.
The major question of law contested at trial was a state-law question. The District Court
… had ruled that, as a matter of the applicable (Pennsylvania) law, the driver of an automobile is
presumed to have the permission of the owner. Hence, unless contrary evidence could be
introduced, the tort plaintiffs, now declaratory judgment plaintiffs [in this fourth action], would
be entitled to a directed verdict against the insurance company. The only possible contrary
evidence was testimony by Dutcher as to restrictions he had imposed on Cionci’s use of the
automobile. The two estate plaintiffs claimed, however, that under the Pennsylvania ‘Dead Man
Rule’ Dutcher was incompetent to testify on this matter as against them. The District Court
178
upheld this claim. … The jury … found that Cionci had had permission, and hence awarded a
verdict to Harris also.
Lumbermens appealed the judgment to the Court of Appeals for the Third Circuit, raising
various state-law questions. The Court of Appeals, did not reach any of these issues. Instead,
after reargument en banc, it decided, 5-2, to reverse on … grounds … [not] raised in the District
Court….
The first of these grounds was that Dutcher was an indispensable party. The court held
that the ‘adverse interests’ … required him to be made a party. The court did not consider
whether the fact that a verdict had already been rendered, without objection to the nonjoinder of
Dutcher, affected the matter. Nor did it follow the provision of Rule 19 of the Federal Rules of
Civil Procedure that findings of ‘indispensability’ must be based on stated pragmatic
considerations. It held, to the contrary, that the right of a person who ‘may be affected’ by the
judgment to be joined is a ‘substantive’ right, unaffected by the federal rules; that a trial court
‘may not proceed’ in the absence of such a person; and that since Dutcher could not be joined as
a defendant without destroying diversity jurisdiction the action had to be dismissed.
Since this ruling presented a serious challenge to the scope of the newly amended Rule
19, we granted certiorari. Concluding that the inflexible approach adopted by the Court of
Appeals in this case exemplifies the kind of reasoning that the Rule was designed to avoid, we
reverse.
I.
...
We may assume, at the outset, that Dutcher falls within the category of persons who,
under s[ection] (a), should be ‘joined if feasible.’ The action was for an adjudication of the
validity of certain claims against a fund. Dutcher, faced with the possibility of judgments against
him, had an interest in having the fund preserved to cover that potential liability. Hence there
existed, when this case went to trial, at least the possibility that a judgment might impede
Dutcher’s ability to protect his interest, or lead to later relitigation by him.
The optimum solution, an adjudication of the permission question that would be binding
on all interested persons, was not ‘feasible,’ however, for Dutcher could not be made a defendant
without destroying diversity. Hence the problem was the one to which Rule 19(b) appears to
address itself: in the absence of a person who ‘should be joined if feasible,’ should the court
dismiss the action or proceed without him? Since this problem emerged for the first time in the
Court of Appeals, there were also two subsidiary questions. First, what was the effect, if any, of
the failure of the defendants to raise the matter in the District Court? Second, what was the
importance, if any, of the fact that a judgment, binding on the parties although not binding on
Dutcher, had already been reached after extensive litigation? The three questions prove, on
examination, to be interwoven.
We conclude, upon consideration of the record and applying the ‘equity and good
conscience’ test of Rule 19(b), that the Court of Appeals erred in not allowing the judgment to
stand.
Rule 19(b) suggests four ‘interests’ [factors] that must be examined in each case to
determine whether, in equity and good conscience, the court should proceed without a party
whose absence from the litigation is compelled.2 Each of these interests must, in this case, be
viewed entirely from an appellate perspective since the matter of joinder was not considered in
the trial court. First, the plaintiff has an interest in having a forum. Before the trial, the strength
2
For convenience, we treat these interests in a different order from that appearing in Rule 19(b). …
179
of this interest obviously depends upon whether a satisfactory alternative forum exists. On
appeal, if the plaintiff has won, he has a strong additional interest in preserving his judgment.
Second, the defendant may properly wish to avoid multiple litigation, or inconsistent relief, or
sole responsibility for a liability he shares with another. After trial, however, if the defendant has
failed to assert this interest, it is quite proper to consider it foreclosed.
Third, there is the interest of the outsider whom it would have been desirable to join. Of
course, since the outsider is not before the court, he cannot be bound by the judgment rendered.
This means, however, only that a judgment is not res judicata as to, or legally enforceable
against, a nonparty. … Instead, as Rule 19(a) expresses it, the court must consider the extent to
which the judgment may ‘as a practical matter impair or impede his ability to protect’ his interest
in the subject matter. When a case has reached the appeal stage the matter is more complex. The
judgment appealed from may not in fact affect the interest of any outsider even though there
existed, before trial, a possibility that a judgment affecting his interest would be rendered. When
necessary, however, a court of appeals should, on its own initiative, take steps to protect the
absent party, who of course had no opportunity to plead and prove his interest below.
Fourth, there remains the interest of the courts and the public in complete, consistent, and
efficient settlement of controversies. We read the Rule’s third criterion, whether the judgment
issued in the absence of the nonjoined person will be ‘adequate,’ to refer to this public stake in
settling disputes by wholes, whenever possible, for clearly the plaintiff, who himself chose both
the forum and the parties defendant, will not be heard to complain about the sufficiency of the
relief obtainable against them. After trial, considerations of efficiency of course include the fact
that the time and expense of a trial have already been spent.
Rule 19(b) also directs a district court to consider the possibility of shaping relief to
accommodate these four interests. Commentators had argued that greater attention should be
paid to this potential solution to a joinder stymie, and the Rule now makes it explicit that a court
should consider modification of a judgment as an alternative to dismissal.10 Needless to say, a
court of appeals may also properly require suitable modification as a condition of affirmance.
Had the Court of Appeals applied Rule 19’s criteria to the facts of the present case, it
could hardly have reached the conclusion it did. We begin with the plaintiff’s viewpoint. It is
difficult to decide at this stage whether they would have had an ‘adequate’ remedy had the action
been dismissed before trial for nonjoinder: we cannot here determine whether the plaintiffs could
have brought the same action, against the same parties plus Dutcher, in a state court. …
Opposing considerations in this case are hard to find. The defendants had no stake, either
asserted or real, in the joinder of Dutcher. They showed no interest in joinder until the Court of
Appeals took the matter into its own hands. This properly forecloses any interest of theirs, but for
purposes of clarity we note that the insurance company, whose liability was limited to $100,000,
had or will have full opportunity to litigate each claim on that fund against the claimant involved.
…
The interest of the outsider, Dutcher, is more difficult to reckon. The Court of Appeals,
concluding that it should not follow Rule 19’s command to determine whether, as a practical
matter, the judgment impaired the nonparty’s ability to protect his rights, simply quoted the
District Court’s reasoning … that Dutcher had a ‘right’ to be joined:
… An appropriate statement of the question might be ‘Can the decree be written so as to protect the
legitimate interests of outsiders and, if so, would such a decree be adequate to the plaintiff’s needs and an efficient
use of judicial machinery?’
10
180
The subject matter of this suit is the coverage of Lumbermens’ policy issued to
Dutcher. Depending upon the outcome of this trial, Dutcher may have the policy all to
himself or he may have to share its coverage with the Cionci Estate, thereby extending
the availability of the proceeds of the policy to satisfy verdicts and judgments in favor of
the two Estate plaintiffs. Sharing the coverage of a policy of insurance with finite limits
with another, and thereby making that policy available to claimants against that other
person is immediately worth less than having the coverage of such policy available to
Dutcher alone. By the outcome in the instant case, to the extent that the two Estate
plaintiffs will have the proceeds of the policy available to them in their claims against
Cionci’s estate, Dutcher will lose a measure of protection. Conversely, to the extent that
the proceeds of this policy are not available to the two Estate plaintiffs Dutcher will gain.
…
There is a logical error in the Court of Appeals’ appropriation of this reasoning for its
own quite different purposes: Dutcher had an ‘adverse’ interest … because he would have been
benefited by a ruling in favor of the insurance company; [but] the question before the Court of
Appeals, however, was whether Dutcher was harmed by the judgment against the insurance
company.
The two questions are not the same. If the three plaintiffs had lost to the insurance
company on the permission issue, that loss would have ended the matter favorably to Dutcher. If,
as has happened, the three plaintiffs obtain a judgment against the insurance company on the
permission issue, Dutcher may still claim that as a nonparty he is not estopped by that judgment
from relitigating the issue. …
If Dutcher is not … ‘bound’ by the judgment in favor of the insurance company …, in
theory, he has not been harmed. There remains, however, the practical question whether Dutcher
is likely to have any need … to relitigate. The only possible threat to him is that if the fund is
used to pay judgments against Cionci the money may in fact have disappeared before Dutcher
has an opportunity to assert his interest. Upon examination, we find this supposed threat neither
large nor unavoidable.
...
In this [appeals] Court, … counsel for petitioners represented orally that they, the tort plaintiffs,
would accept a limitation of all claims to the amount of the insurance policy [italics added].
Obviously such a compromise could have been reached below had the Court of Appeals been
willing to abandon its rigid approach and seek ways to preserve what was, as to the parties,
subject to the appellants’ other contentions, a perfectly valid judgment.
...
II.
...
Whether a person is ‘indispensable,’ that is, whether a particular lawsuit must be dismissed in the
absence of that person, can only be determined in the context of particular litigation.14 There is a
large category, whose limits are not presently in question, of persons who, in the Rule’s
terminology, should be ‘joined if feasible,’ and who, in the older [superseded Rule 19]
terminology, were called either necessary or indispensable parties. Assuming the existence of a
person who should be joined if feasible, the only further question arises when joinder is not
As the Court has before remarked, ‘(t)here is no prescribed formula for determining in every case
whether a person … is an indispensable party….’
14
181
possible and the court must decide whether to dismiss or to proceed without him. To use the
familiar but confusing terminology, the decision to proceed is a decision that the absent person is
merely ‘necessary’ while the decision to dismiss is a decision that he is ‘indispensable.’ The
decision whether to dismiss (i.e., the decision whether the person missing is ‘indispensable’)
must be based on factors varying with the different cases… Rule 19 … commands the courts to
examine each controversy to make certain that the interests really exist. To say that a court
‘must’ dismiss in the absence of an indispensable party and that it ‘cannot proceed’ without him
puts the matter the wrong way around: a court does not know whether a particular person is
‘indispensable’ until it had examined the situation to determine whether it can proceed without
him.
...
The … earliest case giving rise to extended discussion the problem was the relatively simple one
of the inefficiency of litigation involving only some of the interested persons. … Chief Justice
Marshall replied:
… In the exercise of its discretion, the Court will require the plaintiff to do all in his
power to bring every person concerned in interest before the Court. But, if the case may
be completely decided as between the litigant parties, the circumstance that an interest
exists in some other person, whom the process of the Court cannot reach ought not to
prevent a decree upon its merits.
...
[I]f the decree can be so written that it protects the interests of the absent persons, but as so
written it leaves the controversy so situated that the outcome may be inconsistent with ‘equity
and good conscience,’ the suit should be dismissed.
...
III.
...
We think it clear that the judgment below cannot stand. The judgment is vacated and the
case is remanded to the Court of Appeals for consideration of those issues raised on appeal that
have not been considered, and, should the Court of Appeals affirm the District Court as to those
issues, for appropriate disposition preserving the judgment of the District Court and protecting
the interests of nonjoined persons.
It is so ordered.
Judgment vacated and case remanded to Court of Appeals.
Notes and Questions:
1. Who first raised the issue of whether Dutcher was an indispensible party? If not raised
prior to judgment, that would mean that this basis for attacking a judgment is not waivable? If
not, would that implicate constitutional Due Process—in a fresh (post-Pennoyer) joinder
context?
2. A judgment in this case would effectively deprive Dutcher of the insurance proceeds
he would have, to cover judgments in the other cases pending against him. The intermediate
Court of Appeals thus held that he was an indispensible party to this litigation. That reversed the
trial court proceedings, and would require a new trial. The Supreme Court faulted the Court of
182
Appeals for ignoring an important concession by the plaintiffs. The High Court thus held that the
Court of Appeal was being too technical in its approach to Rule 19(b). Why so?
3. As the Supreme Court instructs: “the Rule’s terminology, should be ‘joined if feasible,’
… [applies to those] who, in the older terminology, were called either necessary or indispensable
parties.” What does the Court mean by this key phrase?
4. There was a jurisdictional impediment in Bank of California. What was it? There was a
jurisdictional impediment in Provident Tradesman as well. Was it the same type of jurisdictional
problem?
5. In both cases, the respective Supreme Courts ruled that the case could proceed, without
the absentee. Did they thus push the limits of Due Process—or, were these practical solutions to
a recurring problem?
6. Given Provident’s rugged terrain, one might peruse the following fact chart:
Cast of Characters:
Status:
Dutcher
car owner (not named party in S4)
Cionci
driver of Dutcher’s car
Lynch
C’s passenger & S4 co-plainitff
Harris
C’s passenger & S4 co-plainitff
Smith
truck driver other vehicle & S4 co-P
Suits 1 & 2 = untried state cases, where Dutcher = defendant
Suit 3 = settled case
Suit 4 = current case
183
COALITION OF ARIZONA/NEW MEXICO COUNTIES
FOR STABLE ECONOMIC GROWTH v. DEPARTMENT OF THE INTERIOR
United States Court of Appeals, Tenth Circuit
100 F.3d 837 (1996)
Henry, Circuit Judge [delivered the unanimous opinion of the court].
Dr. Robin Silver appeals from the order of the United States District Court for the District
of New Mexico denying his application to intervene in … Coalition of Arizona/New Mexico
Counties for Stable Economic Growth’s (“Coalition”) suit against the Department of the Interior
(“DOI”), the United States Fish and Wildlife Service (“FWS”) and various government officials.
The Coalition challenges FWS’s decision to protect the Mexican Spotted Owl (“the Owl”) under
the Endangered Species Act (“the Act”), alleging that FWS failed to follow proper procedures
and lacked data sufficient to list the Owl as threatened. Dr. Silver sought to intervene pursuant to
the Rule 24 of the Federal Rule of Civil Procedure. Dr. Silver grounded his application upon two
facts: (1) he had photographed and studied the Owl in the wild; and (2) he was instrumental in
FWS’s initial decision to protect the Owl under the Act, see, e.g., 58 Fed. Reg. 14,248, 14,252
(1993) (citing Dr. Silver’s petition as instigating FWS’s decision to list the Owl as an endangered
species).
Source: <http://www.owlpages.com/pictures/species-Strix-occidentalis-11.jpg>
Reprinted with permission of OwlPages and Toira Blank
An order denying intervention is final and subject to immediate review if it prevents the
applicant from becoming a party to an action. Accordingly, we accept jurisdiction … and …
reverse the decision of the district court and remand the case for further proceedings.
I. BACKGROUND
184
Dr. Silver is a commercial wildlife photographer, an amateur biologist, and a naturalist,
specializing in photographing creatures in the American Southwest. Dr. Silver has sought out
and photographed the Owl in its natural habitat-old-growth forests in the Southwest. For the past
five years, he has been active in the effort to protect the Owl and its habitat [italics added]. In
December 1989, Dr. Silver petitioned FWS to list the Owl as a threatened or endangered species.
See 16 U.S.C. § 1533(b)(3)(A) (an “interested person” may petition FWS to add a species to the
threatened and endangered species list). When FWS failed to act on his petition within the
statutory time limit, see 16 U.S.C. § 1533(b)(3)(B), Dr. Silver wrote a letter dated November 9,
1992, to the Secretary of the Interior threatening suit under the Act’s citizen lawsuit provision
[authorizing a private lawsuit under the Act].
In April 1993, FWS listed the Owl as a threatened species. However, FWS failed to
designate critical habitat for the Owl, stating that “[d]esignation of critical habitat is prudent, but
is not determinable at this time.” … Dr. Silver and other environmentalists filed suit in the
United States District Court for the District of Arizona to force the designation of critical habitat
for the Owl. … [T]he court ordered FWS to designate critical habitat for the Owl, but FWS
continued to delay. Dr. Silver moved to have FWS held in contempt of court, and the court
ordered FWS to submit daily progress reports to Dr. Silver to insure that FWS would comply
with the court’s order. FWS designated critical habitat for the Owl on May 30, 1995.
In September 1994, the Coalition filed the present lawsuit in the United States District
Court for the District of New Mexico challenging the listing of the Owl as an endangered and
threatened species under the Act [italics added]. The Coalition alleges that FWS failed to follow
proper procedures and lacked data sufficient to list the Owl as threatened. In May 1995, Dr.
Silver filed an application to intervene as of right, or in the alternative, permissively, pursuant to
Fed.R.Civ.P. 24. Both the Coalition and the DOI opposed his application, and in July 1995 the
district court denied it. The district court did, however, permit Dr. Silver to submit a brief as
amicus curiae.
On appeal, Dr. Silver argues that it was error for the court to deny his petition to
intervene as of right for the following reasons: he filed his petition in a timely fashion; he has a
direct, substantial and legally protectable interest in the subject matter of the action; his interest
might be impaired absent his intervention; and the DOI will not adequately represent his interest.
Alternatively, Dr. Silver contends that the district court erred by not allowing him to intervene
permissively. The Coalition argues that the district court’s denial of Dr. Silver’s application to
intervene was proper because: his interest in the subject matter of the action is not direct,
substantial and legally enforceable; his interest is not impaired; and the DOI will adequately
represent his interest.
II. DISCUSSION
...
A[n] … applicant may intervene as of right if: (1) the application is “timely;” (2) “the applicant
claims an interest relating to the property or transaction which is the subject of the action;” (3)
the applicant’s interest “may as a practical matter” be “impair [ed] or impede[d];” and (4) “the
applicant’s interest is [not] adequately represented by existing parties.”a … The parties agree that
Dr. Silver’s application was timely. We now address de novo whether Dr. Silver’s application
met the remaining three requirements….
A. Dr. Silver has a direct, substantial and legally protectable interest in the listing of the
Owl.
a
The current version of Rule 24 is substantially the same.
185
Dr. Silver must first show that he has “an interest relating to the property or transaction
which is the subject of the action.” The contours of the interest requirement have not been clearly
defined. Dr. Silver [claims] … that he “is entitled as a matter of right to intervene in an action
challenging the legality of a measure [he] has supported.”
Our circuit and the Fifth Circuit require that “[the] interest in the proceedings be ‘direct,
substantial, and legally protectable.’ ” “Whether an applicant has an interest sufficient to warrant
intervention as a matter of right is a highly fact-specific determination,” and “the ‘interest’ test is
primarily a practical guide to disposing of lawsuits by involving as many apparently concerned
persons as is compatible with efficiency and due process.” We now address the question of
whether Dr. Silver’s interest in the Owl, as a photographer, an amateur biologist, and a naturalist
who has been at the forefront of efforts to protect the Owl under the Act, is “direct, substantial,
and legally protectable” for the purposes of intervention under Rule 24(a)(2).
Dr. Silver initiated the process to protect the Owl by submitting a petition for its
protection. He pressed DOI and FWS in two letters to take action on his petition, and sued FWS
when it failed to designate critical habitat for the Owl. When FWS failed to comply with the
court order to designate a critical habitat for the Owl, Dr. Silver twice moved for an order of
contempt, resulting in a court order that FWS maintain a daily diary and inform Dr. Silver of its
progress toward the designation of critical habitat.
We are not faced, as the Coalition suggests, with an applicant who has no interest in the
present litigation other than prior [Arizona] litigation involving the same subject matter. Instead,
Dr. Silver has been directly involved with the Owl as a wildlife photographer, an amateur
biologist, and a naturalist who has photographed and studied the Owl in its natural environment.
Dr. Silver’s counsel admitted at oral argument that Dr. Silver had little economic interest in the
Owl; however, economic interest is not the sine qua non of the interest analysis for intervention
as of right. To limit intervention to situations where the applicant can show an economic interest
would impermissibly narrow the broad right of intervention enacted by Congress and recognized
by the courts. In sum, we hold that Dr. Silver’s involvement with the Owl in the wild and his
persistent record of advocacy for its protection amounts to a direct and substantial interest in the
listing of the Owl for the purpose of intervention as of right, even though Dr. Silver has little
economic interest in the Owl itself.
Additionally, Dr. Silver’s interest in the Owl is legally protectable as evidenced by his
successful effort to have the Owl protected as an endangered species under the Act. … Thus, the
Act provided Dr. Silver with the legal right to protect his interest in the Owl. Additionally, … the
Act gives a private citizen the right to “commence a civil suit on his own behalf ... to enjoin any
person, including the United States and any other governmental instrumentality or agency ...,
who is alleged to be in violation of [the Act].” … “[T]he desire to use or observe an animal
species, even for purely esthetic purposes, is undeniably a cognizable interest for purpose of
standing.”
Because Dr. Silver’s interest in the litigation between the Coalition and the DOI is direct,
substantial, and legally protectable, it sufficiently “relates to the property or transaction which is
the subject of the action” and thereby satisfies the first element under Rule 24(a)(2). …4
4
We note that a motion to intervene in the litigation between Dr. Silver and FWS taking place in Arizona
was filed by the State of Arizona, Apache County, and White Sands Forest Products, Inc. and was denied. Although
the memorandum opinion does not supply us with all the relevant facts and the information is not in the record now
before us, the memorandum opinion makes it clear that the only threat to the intervenors’ interest in that litigation
was Dr. Silver’s request for a ninety day injunction [italics added]. The Ninth Circuit noted that the “applicant
186
...
The decision in Ozarks [citation omitted] echoes that of an earlier Tenth Circuit case
[citation omitted]. In Allard, we held that two public interest groups had an insufficient interest
to intervene in a case in which several owners of native American artifacts made of eagle
feathers challenged the Migratory Bird Conservation Act and the Bald Eagle Protection Act. The
subject of the suit was whether these federal laws infringed upon the plaintiffs’ rights to the
feathered artifacts. The public interest groups sought to intervene to protect living birds and the
environment. We held that the public interest groups were not entitled to intervene as of right
because their interest in living birds and the environment was not sufficiently related to the
plaintiffs’ right to the already existing artifacts [italics added].
The nature of the litigation between the Coalition and the DOI is different… Both of
those [above] cases involved what has been called traditional intervention. “ ‘[R]ule [24(a)(2) ]
was designed with ... traditional private action[s] in mind, and its adaptation to other contexts
requires a flexible reading of its provisions.’ ” Ozarks involved a condemnation dispute, and
Allard involved private property interests in native American artifacts. The present litigation
involves a challenge to FWS’s decision to list the Owl, an administrative action not analogous to
the litigation in Ozarks and Allard. Thus, the analysis of the interest requirement here is not
analogous to the analyses of the interest requirements in those cases.
...
The Coalition argues that the only interest Dr. Silver has in the litigation is his desire to
transfer jurisdiction to the United States District Court for the District of Arizona [from the
federal court in New Mexico, under the federal transfer statute], which has handled the litigation
surrounding Dr. Silver’s petition to have the Owl protected under the Act. This argument is
without merit. If a party has the right to intervene under Rule 24(a)(2), the intervenor becomes
no less a party than others and has the right to file legitimate motions, including venue motions.
It then becomes the charge of the district court to sort through the motions including, in this case,
a possible motion to transfer. Further, the right to file a brief as amicus curiae is no substitute for
the right to intervene as a party in the action under Rule 24(a)(2).
The Coalition’s contention that Dr. Silver is forum shopping and that we should not allow
him to succeed in this most disfavored practice also rings hollow. If anyone has forum shopped
in this action it would appear to be the Coalition. Instead of bringing the present action in New
Mexico, the Coalition could have applied to intervene in the action already pending in Arizona.
The purpose of Rule 24(a), the prevention of “a multiplicity of suits where common questions of
law or fact are involved,” suggests that all sides of the Owl litigation should be in one action,
whether it be in New Mexico or Arizona. Otherwise, an endless string of litigation in two courts
may ensue, with each court effectively reviewing the other’s decision to list or delist the Owl,
and neither court’s rulings having preclusive effect on the absent party.
B. Dr. Silver’s Interest May Be Impaired
To satisfy the second element under Rule 24(a)(2), Dr. Silver must show that the
disposition of the Coalition’s suit against the DOI “may as a practical matter impair or impede
his ability to protect [his] interest.” Such impairment or impediment need not be “of a strictly
intervenor’s legal rights may be adequately protected in a future lawsuit to compensate for damages sustained as a
result of [the] court’s injunction.” Although we make no substantive comment on this holding, it is clear that Dr.
Silver’s legal rights are in greater jeopardy here where the Coalition seeks a permanent injunction against FWS
prohibiting any future action in favor of the Owl [italics added]. …………………………………………………….
187
legal nature.” “[We] may consider any significant legal effect in the applicant’s interest and [we
are] not restricted to a rigid res judicata test” [whereby intervention could be denied, on the
ground that Dr. Silver (not a formal party) would not be bound by the judgment]. Thus, the stare
decisis effect of the district court’s judgment is sufficient impairment for intervention under Rule
24(a)(2).
In its complaint against the DOI, the Coalition contends that the DOI “failed to use the
best available data,” misapplied the data, used unfounded assumptions and jeopardized the
Southwestern forest ecosystem. As part of its remedy, the Coalition seeks “[a] permanent
injunction enjoining [the DOI] from taking any actions pursuant to the listing of the [Owl].” If
the district court were to rule in favor of these contentions and to mandate that the DOI delist the
Owl, Dr. Silver’s interest in the protection of the Owl would be impaired. Dr. Silver could
submit a new petition to FWS to protect the Owl; however, he would, “as a practical matter,” be
impaired by the stare decisis effect of the district court’s decision, not to mention the direct effect
of a possible permanent injunction. Furthermore, the Owl and its habitat would not be protected
under the Act while Dr. Silver tried to lift such a permanent injunction and FWS considered Dr.
Silver’s new petition.
C. The Existing Parties Do Not Adequately Represent Dr. Silver’s Interest
The burden is on the applicant in intervention to show that the representation by the
existing parties may be inadequate, but this burden is “minimal.” “An applicant may fulfill this
burden by showing collusion between the representative and an opposing party, that the
representative has an interest adverse to the applicant, or that the representative failed in
fulfilling his duty to represent the applicant’s interest.” “[T]he possibility of divergence of
interest need not be great in order to satisfy the burden of the applicants....” However,
“representation is adequate ‘when the objective of the applicant for intervention is identical to
that of one of the parties.’ ” Dr. Silver argues that his interest and that of DOI are divergent and
that DOI’s failure to move to transfer venue to the district court in Arizona, where litigation over
the protection of the Owl under the Act is pending, evidences DOI’s failure to protect his
interest.
...
Our decision in [citation omitted] is on point. ... We … reversed the lower court’s denial
of the applicants’ motion to intervene as of right, reasoning as follows:
We have here ... the familiar situation in which the governmental agency is
seeking to protect not only the interest of the public but also the private interest of the
petitioners in intervention, a task which is on its face impossible. The cases correctly hold
that this kind of a conflict satisfies the minimal burden of showing inadequacy of
representation.
… DOI must represent the public interest, which may differ from Dr. Silver’s particular
interest in the protection of the Owl in the habitat where he has photographed and studied the
Owl. … DOI’s ability to adequately represent Dr. Silver despite its obligation to represent the
public interest is made all the more suspect by its reluctance in protecting the Owl, doing so only
after Dr. Silver threatened, and eventually brought, a law suit to force compliance with the Act.
… Under these circumstances, we conclude that Dr. Silver has made the minimal showing
necessary to suggest that the government’s representation may be inadequate.
188
III. CONCLUSION
We hold that Dr. Silver has a right to intervene in the action pursuant to Fed.R.Civ.P.
24(a)(2) because: Dr. Silver has a direct, substantial and legally protectable interest in the subject
of the action between the Coalition and DOI; this interest may be impaired by the determination
of the action; and neither DOI nor the Coalition will adequately represent Dr. Silver’s interest.
Because Dr. Silver may intervene as of right under Rule 24(a)(2), it is unnecessary to consider
the question of intervention as a matter of discretion under Rule 24(b)(2). We therefore reverse
the order denying Dr. Silver’s motion to intervene under Rule 24(a)(2) and remand the case to
the District Court for the District of New Mexico with the direction that Dr. Silver’s application
to intervene be granted.
Notes and Questions:
1. Note the traditional olive branch the trial court offered—when it denied Dr. Silver’s
petition to intervene in the New Mexico federal suit. It authorized him to file an amicus curiae
brief. If you were in his shoes, why would you not accept it? As stated by the Supreme Court:
“Where he presents no new questions, a third party can contribute usually most effectively and
always most expeditiously by a brief amicus curiae and not by intervention.” South Carolina v.
North Carolina [2010].
2. The court comments that: “economic interest is not the sine qua non of the interest
analysis for intervention as of right.” Should it be (or some equally tangible interest)?
3. Coalition accused Dr. Silver of forum shopping? The Tenth Circuit court in New
Mexico did not embrace that argument. Did the court fairly disregard Coalition’s argument?
4. The court notes that Dr. Silver would not be bound by a judgment, if he were denied
intervention—because he would not then be a party [“res judicata” point]. Yet the court employs
the stare decisis basis for allowing him to intervene. Why is that a relevant interest, which
operated in his favor?
5. If you were writing this opinion, would you have granted Dr. Silver intervention as of
right? If so, would you have denied permissive intervention?
189
WAL-MART STORES, INC. v. DUKES
United States Supreme Court
131 S.Ct. 2541 (2011)
Prof’s Note: First, read FRCP 23(a)(1)-(4) on the Rules webpage. Subsection (a) is critically
important. Subsection (b)—while an important feature of Walmart—is less so. Peruse the
remainder of the rule, then go to the Problems-Hypos-Charts web page Class Action Chart. …..
Numerous citations to authority have also been omitted, without so indicating. Certain of
the Court’s editorial “enhancements” have been deleted, without so indicating.
Court’s Opinion: Justice Scalia delivered the opinion of the Court.
We are presented with one of the most expansive class actions ever. The District Court
and the Court of Appeals approved the certification of a class comprising about one and a half
million plaintiffs, current and former female employees of petitioner Wal–Mart who allege that
the discretion exercised by their local supervisors over pay and promotion matters violates Title
VII [of the Civil Rights Act of 1964] by discriminating against women. In addition to injunctive
and declaratory relief, the plaintiffs seek an award of backpay. We consider whether the
certification of the plaintiff class was consistent with Federal Rules of Civil Procedure 23(a)a and
(b)(2).b
I
A
Petitioner Wal–Mart is the Nation’s largest private employer. It operates four types of
retail stores throughout the country: Discount Stores, Supercenters, Neighborhood Markets, and
Sam’s Clubs. Those stores are divided into seven nationwide divisions, which in turn comprise
41 regions of 80 to 85 stores apiece. Each store has between 40 and 53 separate departments and
80 to 500 staff positions. In all, Wal–Mart operates approximately 3,400 stores and employs
more than one million people.
Pay and promotion decisions at Wal–Mart are generally committed to local managers’
broad discretion, which is exercised “in a largely subjective manner.” Local store managers may
increase the wages of hourly employees (within limits) with only limited corporate oversight. As
for salaried employees, such as store managers and their deputies, higher corporate authorities
have discretion to set their pay within pre[-]established ranges.
Promotions work in a similar fashion. Wal–Mart permits store managers to apply their
own subjective criteria when selecting candidates as “support managers,” which is the first step
on the path to management. … [R]egional and district managers have discretion to use their own
judgment when selecting candidates for management training. Promotion to higher office—e.g.,
assistant manager, co-manager, or store manager—is similarly at the discretion of the
employee’s superiors after prescribed objective factors are satisfied.
B
The named plaintiffs in this lawsuit, representing the 1.5 million members of the certified
class, are three current or former Wal–Mart employees who allege that the company
discriminated against them on the basis of their sex [gender] by denying them equal pay or
promotions.
...
a
b
See p. 2 text, subsection C below.
See p. 2 last ¶, text accompanying n.2 below (note quotes b(1) & b(3)).
190
These plaintiffs, respondents here, do not allege that Wal–Mart has any express corporate
policy against the advancement of women. Rather, they claim that their local managers’
discretion over pay and promotions is exercised disproportionately in favor of men, leading to an
unlawful disparate impact on female employees. And, respondents say, because Wal–Mart is
aware of this effect, its refusal to cabin its managers’ authority amounts to disparate treatment.
Their complaint seeks injunctive and declaratory relief, punitive damages, and backpay. It does
not ask for compensatory damages [other than backpay].
Importantly for our purposes, respondents claim that the discrimination to which they
have been subjected is common to all Wal–Mart’s female employees. The basic theory of their
case is that a strong and uniform “corporate culture” permits bias against women to infect,
perhaps subconsciously, the discretionary decision[-]making of each one of Wal–Mart’s
thousands of managers—thereby making every woman at the company the victim of one
common discriminatory practice. Respondents therefore wish to litigate the Title VII claims of
all female employees at Wal–Mart’s stores in a nationwide class action.
C
Class certification is governed by Federal Rule of Civil Procedure 23. Under Rule 23(a),
the party seeking certification must demonstrate, first, that: …………………………………….
(1) the class is so numerous that joinder of all members is impracticable,
(2) there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of the claims or
defenses of the class, and
(4) the representative parties will fairly and adequately protect the interests of the
class.
Second, the proposed class must satisfy at least one of the three requirements listed in
Rule 23(b). Respondents rely on Rule 23(b)(2), which applies when “the party opposing the class
has acted or refused to act on grounds that apply generally to the class, so that final injunctive
relief or corresponding declaratory relief is appropriate respecting the class as a whole.”2
Invoking these provisions, respondents moved the District Court to certify a plaintiff
class consisting of “ ‘[a]ll women employed at any Wal–Mart domestic retail store at any time
since December 26, 1998, who have been or may be subjected to Wal–Mart’s challenged pay
and management track promotions policies and practices.’ ” As evidence that there were indeed
“questions of law or fact common to” all the women of Wal–Mart, as Rule 23(a)(2) requires,
respondents relied chiefly on three forms of proof: statistical evidence …, anecdotal reports …,
and the testimony of a sociologist, Dr. William Bielby, who conducted a “social framework
analysis” of Wal–Mart’s “culture” and personnel practices, and concluded that the company was
“vulnerable” to gender discrimination.
Rule 23(b)(1) allows a class to be maintained where “prosecuting separate actions by or against individual
class members would create a risk of” either “(A) inconsistent or varying adjudications,” or “(B) adjudications ...
that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual
adjudications or would substantially impair or impeded their ability to protect their interests.” Rule 23(b)(3) states
that a [damages] class [action] may be maintained where “questions of law or fact common to class members
predominate over any questions affecting only individual members,” and a class action would be “superior to other
available methods for fairly and efficiently adjudicating the controversy.” The applicability of these provisions to
the plaintiff class is not before us [although Ps sought certification under b(3), if b(2) were deemed inapplicable].
2
191
Wal–Mart unsuccessfully moved to strike much of this evidence. It also offered its own
countervailing statistical and other proof in an effort to defeat Rule 23(a)’s requirements of
commonality, typicality, and adequate representation. … With one limitation not relevant here,
the District Court granted respondents’ motion and certified their proposed class.3
D
A divided en banc [eleven, rather than the routine three-member] Court of Appeals
substantially affirmed the District Court’s certification order. …
Finally, the Court of Appeals determined that the action could be manageably tried as a
class action because the District Court could adopt the approach the Ninth Circuit approved in
Hilao v. Estate of Marcos. There compensatory damages for some 9,541 class members were
calculated by selecting 137 claims at random, … and then extrapolating the validity and value of
the untested claims from the sample set. The Court of Appeals “s[aw] no reason why a similar
procedure to that used in Hilao could not be employed in this case.” It would allow Wal–Mart
“to present individual defenses in the randomly selected ‘sample cases,’ thus revealing the
approximate percentage of class members whose unequal pay or non[-]promotion was due to
something other than gender discrimination.”
We granted certiorari.
II
The class action is “an exception to the usual rule that litigation is conducted by and on
behalf of the individual named parties only.” In order to justify a departure from that rule, “a
class representative must be part of the class and ‘possess the same interest and suffer the same
injury’ as the class members. Rule 23(a) ensures that the named plaintiffs are appropriate
representatives of the class whose claims they wish to litigate. The Rule’s four requirements—
numerosity, commonality, typicality, and adequate representation—“effectively ‘limit the class
claims to those fairly encompassed by the named plaintiff’s claims.’ ”
A
The crux of this case is commonality—the rule requiring a plaintiff to show that “there
are questions of law or fact common to the class.” Rule 23(a)(2). That language is easy to
misread, since “[a]ny competently crafted class complaint literally raises common ‘questions.’ ”
For example: Do all of us plaintiffs indeed work for Wal–Mart? Do our managers have
discretion over pay? Is that an unlawful employment practice? What remedies should we get?
Reciting these questions is not sufficient to obtain class certification. Commonality requires the
plaintiff to demonstrate that the class members “have suffered the same injury.” This does not
mean merely that they have all suffered a violation of the same provision of law. Title VII, for
example, can be violated in many ways—by intentional discrimination, or by hiring and
promotion criteria that result in disparate impact, and by the use of these practices on the part of
many different superiors in a single company. Quite obviously, the mere claim by employees of
the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII
injury, gives no cause to believe that all their claims can productively be litigated at once. Their
claims must depend upon a common contention—for example, the assertion of discriminatory
bias on the part of the same supervisor. That common contention, moreover, must be of such a
3
The District Court excluded backpay claims…. [In its discretion,] [i]t also decided to afford class
members notice of the action and the right to opt-out of the class with respect to respondents’ punitive-damages
claim.
192
nature that it is capable of classwide resolution—which means that determination of its truth or
falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.
“What matters to class certification ... is not the raising of common ‘questions'—even in
droves—but, rather the capacity of a classwide proceeding to generate common answers apt to
drive the resolution of the litigation. Dissimilarities within the proposed class are what have the
potential to impede the generation of common answers.”
Rule 23 does not set forth a mere pleading standard. A party seeking class certification
must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to
prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc.
...
In this case, proof of commonality necessarily overlaps with respondents’ merits
contention that Wal–Mart engages in a pattern or practice of discrimination. That is so because,
in resolving an individual’s Title VII claim, the crux of the inquiry is “the reason for a particular
employment decision,” Here respondents wish to sue about literally millions of employment
decisions at once. Without some glue holding the alleged reasons for all those decisions together,
it will be impossible to say that examination of all the class members’ claims for relief will
produce a common answer to the crucial question why was I disfavored.
B
...
Conceptually, there is a wide gap between (a) an individual’s claim that he has been
denied a promotion [or higher pay] on discriminatory grounds, and his otherwise
unsupported allegation that the company has a policy of discrimination, and (b) the
existence of a class of persons who have suffered the same injury as that individual, such
that the individual’s claim and the class claim will share common questions of law or fact
and that the individual’s claim will be typical of the class claims.
… Wal–Mart has no testing procedure or other companywide evaluation method that can
be charged with bias. The whole point of permitting discretionary decision[-]making is to avoid
evaluating employees under a common standard.
… [B]ridging the gap requires “significant proof” that Wal–Mart “operated under a
general policy of discrimination.” That is entirely absent here. Wal–Mart’s announced policy
forbids sex discrimination, and as the District Court recognized the company imposes penalties
for denials of equal employment opportunity. The only evidence of a “general policy of
discrimination” respondents produced was the testimony of Dr. William Bielby, their
sociological expert. Relying on “social framework” analysis, Bielby testified that Wal–Mart has
a “strong corporate culture,” that makes it “ ‘vulnerable’ ” to “gender bias.” He could not,
however, “determine with any specificity how regularly stereotypes play a meaningful role in
employment decisions at Wal–Mart. At his deposition ... Dr. Bielby conceded that he could not
calculate whether 0.5 percent or 95 percent of the employment decisions at Wal–Mart might be
determined by stereotyped thinking.” The parties dispute whether Bielby’s testimony even met
the standards for the admission of expert testimony…. The District Court concluded that [the
Federal Rules of Evidence and our case law] … did not apply to expert testimony at the
certification stage of class-action proceedings. We doubt that is so, but even if properly
considered, Bielby’s testimony does nothing to advance respondents’ case. “[W]hether 0.5
percent or 95 percent of the employment decisions at Wal–Mart might be determined by
stereotyped thinking” is the essential question on which respondents’ theory of commonality
193
depends. If Bielby admittedly has no answer to that question, we can safely disregard what he
has to say. It [his testimony] is worlds away from “significant proof” that Wal–Mart “operated
under a general policy of discrimination.”
C
The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal–
Mart’s “policy” of allowing discretion by local supervisors over employment matters. On its
face, of course, that is just the opposite of a uniform employment practice that would provide the
commonality needed for a class action; it is a policy against having uniform employment
practices. It is also a very common and presumptively reasonable way of doing business—one
that we have said “should itself raise no inference of discriminatory conduct.”
To … the contrary, left to their own devices most managers in any corporation—and
surely most managers in a corporation that forbids sex discrimination—would select sex-neutral,
performance-based criteria for hiring and promotion that produce no actionable disparity at all.
… And still other managers may be guilty of intentional discrimination that produces a sex-based
disparity. In such a company, demonstrating the invalidity of one manager’s use of discretion
will do nothing to demonstrate the invalidity of another’s. A party seeking to certify a nationwide
class will be unable to show that all the employees’ Title VII claims will in fact depend on the
answers to common questions.
Respondents have not identified a common mode of exercising discretion that pervades
the entire company—aside from their reliance on Dr. Bielby’s social frameworks analysis that
we have rejected. In a company of Wal–Mart’s size and geographical scope, it is quite
unbelievable that all managers would exercise their discretion in a common way without some
common direction. Respondents attempt to make that showing by means of statistical and
anecdotal evidence, but their evidence falls well short.
...
Even if they are taken at face value, these studies are insufficient to establish that
respondents’ theory can be proved on a classwide basis. … [We have] held that one named
plaintiff’s experience of discrimination was insufficient to infer that “discriminatory treatment is
typical of [the employer’s employment] practices.” … “[I]nformation about disparities at the
regional and national level does not establish the existence of disparities at individual stores, let
alone raise the inference that a company-wide policy of discrimination is implemented by
discretionary decisions at the store and district level.” A regional pay disparity, for example, may
be attributable to only a small set of Wal–Mart stores, and cannot by itself establish the uniform,
store-by-store disparity upon which the plaintiffs’ theory of commonality depends.
… Other than the bare existence of delegated discretion, respondents have identified no
“specific employment practice”—much less one that ties all their 1.5 million claims together.
Merely showing that Wal–Mart’s policy of discretion has produced an overall sex-based
disparity does not suffice.
Respondents’ anecdotal evidence suffers from the same defects, and in addition is too
weak to raise any inference that all the individual, discretionary personnel decisions are
discriminatory. … Here, … respondents filed some 120 affidavits reporting experiences of
discrimination—about 1 for every 12,500 class members—relating to only some 235 out of Wal–
Mart's 3,400 stores. More than half of these reports are concentrated in only six States (Alabama,
California, Florida, Missouri, Texas, and Wisconsin); half of all States have only one or two
anecdotes; and 14 States have no anecdotes about Wal–Mart’s operations at all. Even if every
single one of these accounts is true, that would not demonstrate that the entire company “operate
194
[s] under a general policy of discrimination,” which is what respondents must show to certify a
companywide class.9
The dissent … criticizes our focus on the dissimilarities between the putative class
members on the ground that we have “blend[ed]” Rule 23(a)(2)’s commonality requirement with
Rule 23(b)(3)’s inquiry into whether common questions “predominate” over individual ones.
That is not so. We quite agree that for purposes of Rule 23(a)(2) “ ‘[e]ven a single [common]
question’ ” will do. We consider dissimilarities not in order to determine (as Rule 23(b)(3)
requires) whether common questions predominate, but in order to determine (as Rule 23(a)(2)
requires) whether there is “[e]ven a single [common] question.” And there is not [one] here.
Because respondents provide no convincing proof of a companywide discriminatory pay and
promotion policy, we have concluded that they have not established the existence of any
common question.10
In sum, we agree with [the Ninth Circuit] Chief Judge Kozinski [dissent] that the
members of the class:
held a multitude of different jobs, at different levels of Wal–Mart's hierarchy, for variable
lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of
supervisors (male and female), subject to a variety of regional policies that all differed ....
Some thrived while others did poorly. They have little in common but their sex and this
lawsuit.
III
We also conclude that respondents’ claims for backpay were improperly certified under
Federal Rule of Civil Procedure 23(b)(2). … We now hold that they may not, at least where (as
here) the monetary relief is not incidental to the injunctive or declaratory relief.
...
The judgment of the Court of Appeals is
Reversed.
Justice Ginsburg, with whom Justice Breyer, Justice Sotomayor, and Justice Kagan join,
concurring in part and dissenting in part.
The class in this case, [and] I agree with the Court, should not have been certified under
Federal Rule of Civil Procedure 23(b)(2) [“injunctive” class action]. The plaintiffs, alleging
discrimination in violation of Title VII, seek monetary relief that is not merely incidental to any
injunctive or declaratory relief that might be available. A putative class of this type may be
certifiable under Rule 23(b)(3) [“damages” action, however], if the plaintiffs show that common
class questions “predominate” over issues affecting individuals—e.g., qualification for, and the
amount of, backpay or compensatory damages—and that a class action is “superior” to other
modes of adjudication.
The dissent says that we have adopted “a rule that a discrimination claim, if accompanied by anecdotes,
must supply them in numbers proportionate to the size of the class.” … That is not quite accurate. A discrimination
claimant is free to supply as few anecdotes as he wishes. But when the claim is that a company operates under a
general policy of discrimination, a few anecdotes selected from literally millions of employment decisions prove
nothing at all.
10
… Here also there is nothing to unite all of the plaintiffs’ claims, since contrary to the dissent’s
contention, the same employment practices do not “touch and concern all members of the class.” …………………
9
195
Whether the class the plaintiffs describe meets the specific requirements of Rule 23(b)(3)
is not before the Court, and I would reserve that matter for consideration and decision on
remand.1 The Court, however, disqualifies the class at the starting gate, holding that the plaintiffs
cannot cross the “commonality” line set by Rule 23(a)(2). In so ruling, the Court imports into the
Rule 23(a) determination concerns properly addressed in a Rule 23(b)(3) assessment.
...
Notes and Questions:
1. Wal-Mart concededly did not have an express policy of gender discrimination. What
then was the P’s theory of relief?
2. Class actions are designed to accommodate a huge number of Ps. The Dukes class
would have included 1,500,000 current and former female workers. D was not attacking P’s
claim for failure to state a claim. So why did the court not certify Wal-Mart as a class action?
3. In another blow to the Wal-Mart former employees, a more limited number of Ps lost
their bid to certify a statewide class action in California. As stated by the federal district judge in
his Conclusion: “Plaintiffs proposed class suffers from the same problems identified by the
[U.S.] Supreme Court, but on a somewhat smaller scale. ... Rather than identify an employment
practice and define a class around it, Plaintiffs continue to challenge the discretionary decisions
of hundreds of decision makers, while arbitrarily confining their proposed class to corporate
regions that include stores in California, among other states.” Dukes v. Wal-Mart, 2013 WL
3993000 (N.D. Cal., 2013).
4. Certification turns on whether the issues in a class action would “predominate” over
individual issues. For example, the relief sought by the class members does not have to be
identical. As aptly summarized in Butler v. Sears, Roebuck and Co., 727 F.3d 796, 801 (7th Cir.
,2013):
“It would drive a stake through the heart of the class action device, in cases in which damages
were sought rather than an injunction or a declaratory judgment, to require that every member of the class
have identical damages. If the issues of liability are genuinely common issues, and the damages of
individual class members can be readily determined in individual hearings, in settlement negotiations, or by
creation of subclasses, the fact that damages are not identical across all class members should not preclude
class certification. Otherwise defendants would be able to escape liability for tortious harms of enormous
aggregate magnitude but so widely distributed as not to be remediable in individual suits. ... The realistic
alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a
fanatic sues for $30” (emphasis in original). The present case is less extreme: tens of thousands of class
members, each seeking damages of a few hundred dollars. But few members of such a class, considering
the costs and distraction of litigation, would think so meager a prospect made suing worthwhile. [¶]There is
a single, central, common issue of liability: whether the Sears washing machine was defective.
1
The plaintiffs requested Rule 23(b)(3) certification as an alternative, should their request for (b)(2)
certification fail.
196
HARRIMAN v. HANCOCK COUNTY
United States Court of Appeals, First Circuit
627 F.3d 22 (2010)
Howard, Circuit Judge [delivered the unanimous opinion of the court].
This civil rights action involves competing accounts of an arrestee’s weekend stay in
Maine’s Hancock County Jail. Plaintiff David Harriman, although he remembers virtually
nothing that occurred over the entire weekend, contends that one or more correctional officers
beat him until he sustained a lasting brain injury. Defendants Hancock County, its sheriff and
several correctional officers assert that Harriman fell on his head. Harriman appeals the district
court’s preclusion of two affidavits and entry of summary judgment in defendants’ favor. After
careful review, we affirm.
I. BACKGROUND
...
A. The Weekend
… Maine State Trooper Gregory Mitchell responded to a disturbance at the Blue Hill
Hospital involving a disorderly emergency room patient later identified as Harriman. … Mitchell
found Harriman … in the emergency room. Harriman appeared to be drunk. Because Harriman
was prohibited from consuming alcohol in connection with a previous infraction, Mitchell
arrested him.
Mitchell escorted Harriman outside to the police cruiser and searched him. Harriman
launched a stream of epithets against Mitchell, including threats to Mitchell and his children. As
Mitchell guided Harriman into the cruiser, Harriman resisted and fell to the ground, pulling
Mitchell down with him. Mitchell got back on his feet and hoisted Harriman up and into the
cruiser. Once in the cruiser, Harriman spit at Mitchell and then fell asleep.
At about 8 p.m., the pair arrived at the jail. … Harriman leveled several new expletives
against Mitchell, and struggled against Mitchell’s hold until correctional officers Ryan Haines
and Michael Pileski arrived to take custody. Mitchell then went to the adjacent booking room to
complete the necessary paperwork regarding the evening’s events.
...
With some assistance from Haines, Harriman changed into an anti-suicide smock. …
A little after 10 p.m., Sergeant Heather Sullivan, from her position in or around the
control room, heard Harriman “yelling” and “hollering” in his cell. When Sullivan looked over,
she saw Harriman “banging around” his cell naked; she also noticed blood on the bridge of his
nose. Sullivan radioed Haines and instructed him to investigate. Harriman greeted Haines with
shouted expletives and, from behind the glass partition, drew his fist back as though he would
punch Haines. Sullivan soon arrived outside Harriman’s cell. While she and Haines were
deciding on a course of action, they both heard a loud “thump” or “thud” from inside Harriman’s
cell. Although neither Sullivan nor Haines saw what happened in Harriman’s cell, Pileski and
another correctional officer, Crystal Hobbs, from their vantage point in the control room, saw
Harriman fall to the floor in a leftward motion. Pileski further saw Harriman strike his head as he
fell against the lefthand concrete wall of his cell.
Haines entered the cell and saw Harriman lying on the floor in his own urine, apparently
unconscious. Harriman then had what appeared to be two seizures, each lasting a matter of
seconds. At Sullivan’s request, Hobbs called an ambulance from the control room at about 10:20
p.m. The ambulance arrived within several minutes and took Harriman to the hospital. Haines
197
accompanied Harriman in the ambulance and stayed with him at the hospital until relieved by
another correctional officer later that evening.
Harriman remembers next to nothing about his jail stay. From his arrest on Friday until
he woke up at home on Monday or Tuesday night, Harriman remembers only the following: “a
lot of hollering;” “echoes from hollering;” “flashes of light;” “somebody saying he’s had enough
or I think that’s enough or maybe even that’s enough;” “seeing my wife’s cousin [Foster Kane,
another jail detainee] but just barely;” … and “the smell ... [of] urine mixed with cleaning fluid.”
Given his anamnestic difficulties, Harriman relies on [arresting officer] Mitchell’s
deposition testimony and affidavits from two other witnesses to contradict the defendants’
version of events.
Mitchell testified at deposition that he spent roughly an hour in the booking room
finishing up paperwork after transferring custody of Harriman to Haines and Pileski. When
Mitchell exited the booking room at about 9 p.m., he noticed Harriman through a glass partition
in a room known as secure holding, not in HD-1, which was further inside the jail. According to
Mitchell, Harriman appeared to be unaccompanied and was wearing civilian clothes.
Foster Kane, the detainee who Harriman vaguely remembers seeing, stated in an affidavit
that, from his cell near the booking room, he “heard yelling and screaming and loud thuds of
someone hitting a wall.” He further stated that the “commotion went on for approximately 45
minutes before I saw the correctional officers dragging David Harriman into my cell block.”
And, “David had two black eyes, a cut on his nose, and a cut on his forehead over his right eye.”
Jenny Sheriff, the emergency medical technician who responded to the jail’s call for an
ambulance, stated in an affidavit that she “picked Mr. Harriman up in [secure holding].” Sheriff
noticed dried blood on Harriman’s nose, and was “certain that I did not receive the call to
respond to the Jail immediately after the injuries occurred.” She also stated that Harriman was
naked and that there was “no robe or suicide smock in his cell.”
… The next thing Harriman remembers is waking up at home on Monday or Tuesday
night [after the prior Friday’s events].
B. The Lawsuit
… Harriman brought a civil rights action against the defendants in federal district court in
Maine. He asserted five claims premised on constitutional violations (excessive force, false
arrest, conspiracy under both §§ 1983 and 1985, and deprivation of due process) and three claims
premised on state tort law (negligence, intentional infliction of emotional distress, and punitive
damages). In due course, the magistrate judge assigned to the case entered a scheduling order
setting dates for, among other things, initial disclosures (July 30, 2008) and close of discovery
(December 3, 2008). An amended scheduling order required dispositive motions by January 15,
2009. Trial, if necessary, was anticipated for April 2009.
Harriman’s initial disclosure identified fourteen individuals likely to have discoverable
information; critically, however, it did not identify either Kane [a detainee witness] or Sheriff
[medical technician responding to jail ambulance request]. See Fed.R.Civ.P. 26(a)(1)(A)(i)
(requiring identification of individuals “likely to have discoverable information”). Discovery
proceeded over the next several months, during which the parties exchanged written discovery
and deposed almost all individuals that Harriman had identified in his initial disclosure.
On January 15, 2009, the defendants moved for summary judgment. On February 17,
2009, two days before Harriman’s response to the defendants’ motion was due and more than
two months after discovery had closed, Harriman’s attorney sent the defendants a
“supplemental” initial disclosure that identified Kane and Sheriff as two additional individuals
198
likely to have discoverable information. In a cover letter to the amended disclosure, Harriman’s
attorney explained that he had retained a private investigator, that the investigator had located
Kane and Sheriff, and that Harriman intended to submit affidavits from Kane and Sheriff in
opposition to summary judgment. On February 19, 2009, Harriman filed his opposition papers,
which drew heavily from the Kane and Sheriff affidavits in contesting the defendants’ motion.
In their reply, the defendants requested that the magistrate judge strike these affidavits as
a sanction pursuant to Fed.R.Civ.P. 37(c)(1). The magistrate judge held a telephone conference
with counsel to discuss this request. Following the conference, which was not transcribed,
Harriman submitted a memorandum and supporting affidavits addressing the failure to identify
Kane and Sheriff earlier. Those affidavits revealed that Harriman’s attorney had not retained the
investigator until January 5, 2009, ten days before the defendants’ summary judgment motion
was due and more than a month after the close of discovery.
The magistrate judge issued an order that precluded the Kane and Sheriff affidavits as a
sanction, and recommended summary judgment in favor of the defendants on all remaining
claims. The magistrate judge reasoned that Harriman offered “precious little justification or
explanation for his own failure to properly prepare his case and complete discovery in a timely
fashion,” and that preclusion was necessary “if the court’s scheduling orders are to maintain any
credibility at all.” … [T]he magistrate judge stated that summary judgment was [also]
appropriate even if one considered the Kane and Sheriff affidavits, and so purported to analyze
Harriman’s claims under the full record. When the magistrate judge analyzed Harriman’s
excessive force claim, however, she disregarded the Kane affidavit on the basis of her earlier
decision precluding that affidavit:
Clearly if Harriman has met his burden … on his theory that he was deliberately
beaten by the guards by providing competent evidence of his theory, a trial would be
necessary on this count. However, I have determined that the Kane Affidavit must be
stricken because Harriman has in no way demonstrated a justification for his late
disclosure (and tardy efforts to investigate). The Sheriff Affidavit also is stricken, but
even if it were not, this evidence would not be sufficient to carry Harriman’s burden of
providing a dispute of fact that justifies sending this count to trial. (Emphasis in original.)
The district court adopted in full the magistrate judge’s report and recommendation and
entered judgment.
II. DISCUSSION
We address two threshold issues before reaching the propriety of summary judgment.
...
B. Preclusion of the Kane and Sheriff Affidavits
...
Harriman argues, essentially, that precluding the affidavits was wrong because they were
important to his case. The defendants counter that preclusion was a proportional response to
Harriman’s failure to identify Kane and Sheriff earlier. Each individual, the defendants contend,
could have been identified in the exercise of reasonable diligence during discovery, and
Harriman's failure to do so prejudiced the defendants because they sought discovery and moved
for summary judgment without knowing about two prospective witnesses on whom Harriman
later relied.
199
We begin our inquiry with the Federal Rules of Civil Procedure, which provide the basic
framework. Rule 26 requires a party, without awaiting a discovery request, to “provide to the
other parties ... the name ... of each individual likely to have discoverable information—along
with the subjects of that information—that the disclosing party may use to support its claims or
defenses.” Fed.R.Civ.P. 26(a)(1)(A)(i). That obligation is a continuing one. See Fed.R.Civ.P.
26(e)(1)(A) (requiring a party to supplement its disclosure promptly “if the party learns that in
some material respect the disclosure or response is incomplete or incorrect”).
Failure to comply with disclosure obligations can have severe consequences. Rule 37
authorizes district courts to sanction noncomplying parties; although sanctions can vary
depending on the circumstances, “[t]he baseline rule is that ‘the required sanction in the ordinary
case is mandatory preclusion.’ ” [S]ee Fed.R.Civ.P. 37(c)(1) (providing that if a party fails to
disclose under Rule 26, that “party is not allowed to use that information or witness to supply
evidence on a motion”).
We consult an array of factors when reviewing preclusion decisions. They include the
sanctioned party’s justification for the late disclosure; the opponent-party’s ability to overcome
its adverse effects (i.e., harmlessness); the history of the litigation; the late disclosure’s impact on
the district court’s docket; and the sanctioned party’s need for the precluded evidence.
...
Harriman’s justification for the late disclosure is nonexistent. He … do[es] not explain,
let alone justify, Harriman’s late disclosure or his decision to begin looking for Kane and Sheriff
in earnest only after discovery closed.
The record shows beyond hope of contradiction that Harriman knew very early on that
Kane and Sheriff could help his case. As early as 2006, Harriman knew that Kane was in jail
with him over the weekend. It is one of the few fragments of information that Harriman
remembered, and Kane’s name appeared on an inmate list that the defendants produced during
discovery. Harriman also knew, as early as 2007, that Kane had information that supported his
claims. Coincidentally, Kane is the first cousin of Harriman’s spouse. Kane wrote a letter to
Harriman’s spouse in April 2007—before this case even commenced—stating “that he believed
David [Harriman] had been beaten by corrections officers at the Hancock County Jail on October
20, 2006.” Despite knowing Kane’s importance to his case, Harriman made no meaningful
attempt to find him until after discovery closed.
So, too, with Sheriff. Harriman may not have remembered Sheriff, but multiple witnesses
testified at their depositions that an EMT responded to the jail and brought Harriman to the
hospital in an ambulance. The defendants also produced the ambulance’s so-called run report.
Among other things, the run report described the circumstances surrounding the call and
Harriman’s condition when Sheriff arrived. True, the run report did not reveal Sheriff’s identity:
in what appears to be a [convenient?] photocopying error, the bottom of the page cuts off after
asking for the “SIGNATURE OF CREW MEMBER IN CHARGE” ( i.e., Sheriff). But the
salient point is that Harriman knew during discovery that an EMT existed who had information
that could support his claims, and yet he did nothing whatsoever to find that individual until after
discovery closed.
As for the next factor, Harriman’s late disclosure was not a harmless inconvenience. The
defendants prepared and filed a summary judgment motion premised on evidence submitted
before the discovery deadline. Harriman opposed the motion with affidavits obtained after that
deadline, from witnesses whom he had not provided the defendants an opportunity to depose.
While perhaps not as palpable as if trial were looming, the prejudice to defendants was real.
200
Furthermore, Harriman took no steps to minimize the harm caused by the late disclosure.
Harriman’s attorney retained an investigator ten days before the defendants' summary judgment
motion was due, but did not put the defendants or the court on notice that he was attempting to
locate Kane and Sheriff. … And while Harriman’s attorney was actively looking for them, he
sought and received an extension to file an opposition to summary judgment—not in order to
find additional witnesses—but on the ground that he was busy with other cases and had been
sick. In this light, Harriman’s late disclosure begins to look less like an oversight and more like a
tactic.
… Harriman also failed timely to respond to the defendants’ request to strike the Kane
and Sheriff affidavits. Here again the magistrate judge gave Harriman one last extension.
Although these infractions may not rise to the level of dereliction displayed in other cases, …
they do place the court's preclusion decision in context.
The late disclosure’s impact on the court’s docket is apparent. Harriman disclosed Kane
and Sheriff more than seven months after the deadline for initial disclosures, more than two
months after the discovery deadline, and about a month after the defendants had moved for
summary judgment. District courts have an interest in managing their dockets without such
disruptions. (“Whenever a party, without good cause, neglects to comply with reasonable
deadlines, the court’s ability to manage its docket is compromised.”)
The only factor that favors Harriman is his need for the affidavits. Reversals based on a
sanctioned party’s need for precluded evidence are rare, and seldom based on that factor alone.
...
In sum, given the above, we cannot fault the district court for precluding the affidavits.
Another judge faced with the same facts might have selected a lesser sanction. But preclusion
was not “so wide of the mark as to constitute an abuse of discretion.” …………………………..
...
III. CONCLUSION
For these reasons, the judgment of the district court is affirmed. …
Notes and Questions:
1. The plaintiff attorney’s investigator found Kane and Sheriff. The plaintiff’s attorney
then speedily submitted their affidavits, in opposition to the defendants’ summary judgment
motion. Why did the courts preclude those affidavits from consideration? Do you agree with the
court, when it says: “the prejudice to defendants was real”?
2. Harriman further refers to FRCP 26(e)[(1)(A)]. What does that rule require, and why
was it breached in this case?
3. There is a veritable arsenal of power that FRCP 37 authorizes, when a judge is
considering appropriate sanctions. Harriman dealt with a “preclusion” order. The flip side of
such an order is an “establishment” order. The court may establish certain contested facts, as a
sanction, when a recalcitrant party is not playing by the Rules. What other important sanctions
are available to a federal judge under Rule 37?
4. FRCP 1 provides that the Rules “should be construed and administered to secure the
just, speedy, and inexpensive determination of every action.” Was that Rule followed in this
instance? Were these courts being too technical? Were the sins of the lawyer improperly
attributed to the plaintiff? Could the court have issued a more appropriate Rule 37(b)(2)(A)
sanction?
201
BLACK HORSE LANE ASSOC., L.P. v. DOW CHEMICAL CORP.
United States Court of Appeals, Third Circuit
228 F.3d 275 (2000)
Professor’s Note: The purchaser of environmentally distressed property sued the seller
for breach of contract, breach of implied covenant of good faith and fair dealing. It
sought monetary and injunctive relief under Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) and New Jersey Spill Compensation and
Control Act. Mr. Berger was the president of an entity plaintiff, and the deponent who
appeared on its behalf.
This case opinion will provide useful insight into deposition practice. Several
editorial enhancements have been made in this edited version of the case, without
indicating the deviance from the original text.
Court’s Opinion: Greenberg, Circuit Judge [delivered the unanimous opinion of the court].
II. FACTS AND PROCEEDINGS
...
Appellants [plaintiffs] designated Berger as their Fed.R.Civ.P. 30(b)(6) witness to testify
on behalf of USLR, USRR and Black Horse. On October 2, 1998, appellees’ counsel
began to depose Berger, but counsel was not able to obtain a date to reconvene the
deposition. As a result of counsels’ inability to agree on the date that Berger’s deposition
should resume, appellees’ counsel sought an order from the magistrate judge overseeing
discovery to set the date for the resumption of the deposition. After a teleconference with
the parties …, the magistrate judge signed an order …, which provided the following:
IT IS on this 9th day of October, 1998, ORDERED, as follows:
Lawrence S. Berger, as Plaintiffs’ Fed.R.Civ.P. 30(b)(6) designated
witness and fact witness, shall appear for oral deposition commencing on
Tuesday, October 13, 1998, at 10:00 a.m. and continuing from day to day
thereafter until completed.
Notwithstanding the court’s directive, when appellees’ counsel appeared at
Berger’s law office to continue his deposition on October 13, 1998, Berger failed to
appear and his counsel, Paul Schafhauser, was “in trial” and not in the office. At that
point, appellees’ counsel again sought the court’s intervention.
… [T]he magistrate judge signed and entered an order which directed that
Berger’s deposition recommence on Monday, October 19, 1998, at 10:00 a.m. The order
also provided that “[a]s a sanction for failure by Lawrence Berger to appear for
depositions on Tuesday, October 13, Plaintiffs shall promptly pay the fees and costs of
counsel fees for defendants (a) for appearing at Mr. Berger’s non-deposition on October
13, and (b) for bringing this application and appearance today.” While Berger [finally]
appeared for his deposition at the designated date and time, appellees claim that he
provided evasive and non-responsive answers to many of counsel’s questions relating to
the negotiation and execution of the Agreement, and appellants’ damages allegations.
………………………………………………………………………………
...
202
III. DISCUSSION
...
Moreover, it is relevant to our analysis that Berger’s deposition testimony, as
appellants’ designated Rule 30(b)(6) witness, is far from illuminating on the necessary
costs of response issue. Contrary to the spirit of Rule 30(b)(6), Berger’s evasive answers
provide us with little assistance.... We only need cite the following colloquy between
Essex’s counsel and Berger, which occurred at his deposition, to illustrate our point:
Q: ... Mr. Berger, have you ever seen those bills before?
A. I have no idea.
Q. Well, then look through them.
A. I could look through them for the next five hours and I would have no idea. We’ve 90
properties. I get bills from people. There are bills going into 1997 and before. I have no
idea
whether I have ever seen these bills or any other bills you might put in front of me today.
Q. Mr. Berger, other than the charges represented in those bills, are there any other costs that
have
been expended by any plaintiff for any environmental consulting or removal or
remediation
with
respect to the Black Horse Lane property?
A. I have no idea.
Q. Do you know a man named Mr. Irving Cohen?
A. Yes.
Q. How long have you known him?
A. I would say about ten years.
Q. And in what capacity do you know him?
A. Mr. Cohen was the president of Enviro Sciences. It’s an environmental consulting firm.
Q.
Has
that firm ever been used by [appellant] Black Horse Lane Associates?
A. I have no idea.
Q. Looking through the exhibits, if you could, could you tell me whether those bills appear to
indicate
that such was the case?
A. … I can’t tell you anything about these bills. All I’m doing is reading from the bills for
you.
Q. Turn to the bills that talk about Black Horse Lane, Phase One, I believe.
A. There’s a bill dated 10-16-97 that says ‘Phase One, Black Horse
Lane.’ Q. Q. All right. To what does that bill refer?
A. I don’t understand the question.
Q. What does Phase One, Black Horse Lane refer to?
A. I have no idea.
Q. Did you ever order a Phase One on Black Horse Lane?
A. I have no idea.
Q. Do you have an understanding what the phrase ‘Phase One’ means?
A.
Yes, I
203
do. Q.
What is
that?
A. It’s a preliminary environmental report which basically points out areas of potential
environmental
concern.
...
Q. Do you have any idea why Black Horse Lane would have ordered a Phase One at or about the time
period
for which the bill is indicated?
A. Sitting here today, I have no idea why we did or didn’t. I suspect if we did, in fact, order one a
year ago,
at that point I had a reason for it, but I don’t know what that reason would be sitting here today. If,
in fact,
we did order a Phase One. I don’t recall that either.
Our review of the remainder of Berger’s deposition testimony regarding the nature of
ESI’s consulting work for appellants confirms that he failed to offer any useful information
concerning the factual basis for appellants’ CERCLA response cost claim relating to the fees
paid for ESI’s services.
B. District Court’s Final Order of December 16, 1999
Appellants next contend that the district court erred in affirming the magistrate
judge’s letter opinion and order entered June 30, 1999, which granted appellees’ motion
for discovery sanctions against appellants pursuant to Rule 37(b) and (d). As we
previously mentioned, the magistrate judge agreed with appellees’ argument that
Berger’s conduct warranted a sanction in the form of precluding appellants from
asserting a position and introducing evidence contrary to the position Berger asserted
during his deposition. In addition, the magistrate judge concluded that Berger’s lack of
preparedness at his deposition justified the imposition of monetary sanctions pursuant to
Rule 37(d) in the form of costs and attorney’s fees associated with taking the deposition
and bringing the sanctions motion before the court….
Here, Berger was not completely prepared on any occasion for which he sat for a
deposition. Further, his lack of preparation cannot be a mere oversight but is, instead, a
clear demonstration of bad faith. This is obvious from Berger’s repeated denial of any
knowledge of his status as a 30(b)(6) witness despite being present at the deposition and
being asked each and every time he appeared if he had knowledge of his status. Further,
Berger …even denied knowledge of documents which he himself had signed, claiming
that he had no recollection of such documents despite acknowledging that he normally
did not sign anything that he did not read first. These infractions would not be so
detrimental if Berger were no so consistent with his apparent incompetence and lack of
cooperation. Had he taken the time to prepare in the slightest as Rule 30(b)(6) requires,
he might have been fully prepared for at least one deposition. Additionally, Berger’s
actions are magnified by his status as a member of the Bar.
In affirming the magistrate judge’s order, the district court provided its
reasons on the record:
204
I read the record. It is appalling. It is appalling.
[Berger] did nothing except show his face only under the threat of
court orders. When he showed up, he knew he was a 30(b)(6) witness and,
notwithstanding the fact that he knew he was a 30(b)(6) witness, he
refused to answer questions in an intelligent way. He refused to prepare,
as you are required to prepare under 30(b)(6), to intelligently answer
questions and just literally thumbed his nose at the defendants and,
frankly, at the Court.
.
.
.
I’m satisfied, based upon my review of the record-and I defy anyone to look at the record
here which was created by Mr. Berger—that the actions taken by [the magistrate judge] were
well within his discretion and do not constitute either an abuse of discretion or are they contrary
to law or shocking to the conscience of the Court. One, in order to come to that conclusion, one
must live in the shoes of [the magistrate judge] in trying to conduct orderly discovery in this
matter.
One must review meticulously the record of noncompliance by
Mr. Berger in this matter. [The magistrate judge] did not issue this
opinion lightly. [The magistrate judge] was fully cognizant of the totality
of the facts surrounding this matter, which border upon almost conscious
disregard of the Court and the court rules….
Appellants make two arguments in support of their request to vacate the
monetary sanctions order. … They … claim that pursuant to Rule 37(d), “a party making
a motion based upon an alleged violation of Rule 37(d) must certify that the movant has
in good faith conferred or attempted to confer with the party failing to answer or respond
in an effort to obtain such answer or response without court action,” but that there was
no such “good faith” effort by appellees to resolve the dispute without court action.
Finally, they rely on the fact that Rule 37(d) states that sanctions may be imposed
when a party, inter alia, “fails … to appear before the officer who is to take the
deposition, after being served with a proper notice.” Here, they argue that we should
apply the “fails to appear” language literally, and that sanctions were inappropriate in
this case because Berger appeared for his deposition after the magistrate judge’s October
15, 1998 order and “testified under oath for more than seventeen hours.” … Their second
argument is based on their interpretation of Berger’s behavior during his deposition.
They claim that even if we agree with the magistrate judge’s finding that Rule 37(d)
could support the imposition of sanctions when a Rule 30(b)(6) witness provides
inadequate and evasive answers, the record demonstrates that Berger’s deposition did not
present a situation warranting sanctions. They claim that “[a] fair examination of the
transcript of Mr. Berger’s 570-page deposition confirms that Mr. Berger testified fully
and in good faith in response to Defendants’ questioning.” In any event, they maintain
that “any ‘violation’ of Rule 30(b)(6) which might be said to have existed was minimal,
and indeed, paled in comparison with the extraordinarily broad discovery obtained by
Defendants in this matter.”
We are not persuaded by either contention.
...
The deposition of a corporation, however, poses a different problem, as reflected
205
by Rule 30(b)(6). Rule 30(b)(6) streamlines the discovery process. It places the burden of
identifying responsive witnesses for a corporation on the corporation. Obviously, this
presents a potential for abuse which is not extant where the party noticing the deposition
specifies the deponent [by the individual’s name]. When a corporation or association
designates a person to testify on its behalf, the corporation appears vicariously through
that agent. If that agent is not knowledgeable about relevant facts, and the principal has
failed to designate an available, knowledgeable, and readily identifiable witness, then the
appearance is, for all practical purposes, no appearance at all.
… The district court did not abuse its discretion in awarding fees and costs under
Rule 37(d).
.
.
.
We reject appellants’ final contention that Berger’s responses during his deposition did
not support the district court’s finding that he failed to cooperate with appellees’ attorneys, and
that his conduct was tantamount to a failure to appear that warranted sanctions under Rule 37(d).
To the contrary, our review of Berger’s deposition testimony in its entirety confirms the
observations of both the magistrate judge and the district court on this point. Indeed, throughout
his lengthy deposition, Berger failed to offer meaningful testimony about most, if not all, of the
items specified in the notice of deposition. While we need not recite every instance in which
Berger’s testimony was incomplete and unhelpful on the specified topics, we believe that two
examples of his uncooperative attitude and his flagrant disregard for his obligation as a Rule
30(b)(6)
witness
amply
illustrate
our
point.
.
.
.
…..….……………………………..…………………..……..
Obviously, as appellants’ Rule 30(b)(6) witness, Berger should have been prepared to
discuss these and other topics designated in the notice of deposition. Instead, he divulged as little
information as possible in every area that appellees identified. Moreover, Berger’s uncooperative
attitude is demonstrated further by statements in which he claimed that he was unaware that he
was appellants' designated Rule 30(b)(6) representative, did not know what the phrase “Rule
30(b)(6) representative” meant, and was not familiar with Rule 30(b)(6) or what it required him
to do. He also admitted at one point that he did not recall whether he reviewed the notice of
deposition prior to the date of the deposition, and later stated clearly that he had not bothered to
read it at all. Simply put, we find his professed ignorance on these points particularly
unconvincing given that he obtained undergraduate and law degrees from prestigious universities
and has been licensed to practice law since “either [19]65 or [19]66.”
In any event, we believe that the magistrate judge’s finding that Berger engaged in
discovery abuses plainly is justified on this record. The magistrate judge had ample evidence of
Berger’s failure to cooperate, which in turn rendered his deposition a virtual non-event.
Accordingly, we will affirm the monetary sanctions ordered pursuant to Rule 37(d).
………………………………………………..
IV.
CONCLUSION
……………………………………………………………
For the foregoing reasons, the district court’s orders … will be affirmed.
Notes
and
Questions:…………………………………………
1. The facts include that Mr. Berger testified under oath for more than seventeen hours—
resulting in a 570-page deposition transcript. A subsequent Rules amendment provides for a
206
presumptive limit of a one day deposition, listing no more than seven hours. Berger would no
doubt not deserve the benefit of that amended Rule default limitation.
……………………………………………………………………….
2. When an adversary schedules the deposition of an entity, who normally decides what
person within the entity will appear—the lawyer scheduling the deposition, or the entity? See
FRCP 30(b)(6). Does that default presumption make sense? At the close of such a deposition,
what question might you ask the entity’s representative?
207
O’CONNOR v. BOEING NORTH AMERICAN, INC.
United States District Court, Central District California
185 F.R.D. 272 (1999)
Chapman, United States Magistrate Judge.
… [P]laintiffs filed a notice of motion and motion to compel further responses to
interrogatories regarding the manner of production of documents…. The defendants filed … [a]
declaration … in opposition to plaintiffs’ motion to compel….
… [D]efendants filed a notice of motion and motion to compel answers to interrogatories
and production of documents by plaintiffs … in support of defendants motion. The plaintiffs
filed the declarations … in support of plaintiffs’ opposition to defendants’ motion to compel.
................................................................ . . . ....................................................................
BACKGROUND
… District Judge Audrey B. Collins certified this action as a class action…. Additionally,
this action includes personal injury and wrongful death claims brought by 71 plaintiffs.
… In the Fourth Amended Complaint (“FAC”), plaintiffs allege that, beginning in
approximately 1946, the defendants researched, developed, manufactured and tested various
missile and rocket engines, as well as propellants, lasers and nuclear reactors at four facilities
located in the greater Simi Valley and San Fernando Valley. Those four facilities, referred to as
the “Rocketdyne Facilities,” were located at the following sites: The Santa Susana Field
Laboratory (“SSFL”) in Ventura County, the Canoga Facility at 6633 Canoga Avenue, the
DeSoto Facility at 8900 DeSoto Avenue, and the Hughes Facility at 8433 Fallbrook Avenue.
The plaintiffs allege that the activities of the defendants at the Rocketdyne Facilities
involved the use and release of certain chemicals, including, among others, trichloroethene
(TCE) and hexavalent chromium, as well as the use, storage, generation and disposal of certain
radioactive materials. The plaintiffs allege that they were personally exposed to and/or that their
properties were contaminated by certain radioactive and/or chemical substances which were
released from one or more of the Rocketdyne Facilities and which were dispersed through the
contamination area by means of air currents, surface water runoff and/or subsurface ground
water.
The plaintiffs further allege that their exposure to these substances has placed them at an
increased risk of developing cancer or some other serious illness or disease. As a result, plaintiffs
seek the implementation of a court-supervised program of medical monitoring designed to detect
early signs of such illness or disease.
The plaintiffs also allege that the defendants’ release of these substances has resulted in
the contamination of their properties and has diminished the value of their properties, and they
have incurred certain necessary expenses in response to the contamination of their properties for
which they seek reimbursement under federal law.
The defendants maintain that plaintiffs have not been exposed to any substances released
from the Rocketdyne Facilities that place them at an increased risk of illness or disease. The
defendants also maintain that plaintiffs’ properties are not contaminated by any releases from the
Rocketdyne Facilities and that, consequently, plaintiffs are not entitled to recover damages for
any harm caused to their properties.
DISCUSSION
Plaintiffs’ Motion to Compel
I
208
The plaintiffs served interrogatory nos. 1 through 20 on defendants….3 The defendants
filed multiple objections, including relevancy and definitional objections to the interrogatories;
however, without waiving their objections, defendants generally responded to the interrogatories
under Rule 33(d), stating that the answers to these interrogatories may be derived or ascertained
from defendants’ business records previously produced to plaintiffs.4 The plaintiffs argue that
defendants’ responses are improper in that defendants have not complied with Rule 33(d), and,
when answering narratively, have not completely and responsively answered.5
................................................................ . . . ....................................................................
The nature of the inquiries made by plaintiffs in their interrogatories was sufficiently
broad for defendants to answer under Rule 33(d).6 See [citation omitted] (One “prerequisite for
invoking the Rule 33[(d)] option is that there be a burden on the interrogated party if it were
required to answer the interrogatories in the traditional manner”). However, Rule 33(d) is not
satisfied by the wholesale dumping of documents. Rather, under Rule 33(d), the responding party
chooses to produce business records in answer to the interrogatories—not to avoid answering
them. To answer an interrogatory [in this manner], “a responding party has the duty to specify,
3
These interrogatories generally seek information regarding the identities, quantities, and time periods of
hazardous substances used and released at each of defendants' facilities, as well as the locations, dates and results of
offsite testing of hazardous substances. Additionally, plaintiffs seek information identifying the locations, nature of,
and results from tests on substances in the surrounding area, groundwater, surface water, air, and soil. ……………
4
The defendants have filed three sets of responses to plaintiffs, interrogatories: their original responses
served on February 5, 1998; “Further Responses” served on June 1, 1998; and “Supplemental Further Responses”
served on December 22, 1998.
5
The plaintiffs … have characterized the instant dispute as raising five issues: (1) May defendants respond
to interrogatories by referring to a few selected documents produced by them; (2) may defendants refuse to indicate
where in the documents produced answers to the interrogatories may be found or must they provide substantive
answers to the interrogatories; (3) must defendants provide plaintiffs with a locator and descriptive information to
identify documents responsive to specific inquiries; (4) must defendants produce documents in any particular order
when producing large volumes of documents; and (5) must a privilege log contain a description of withheld
documents (including attachments), as well as the job titles of all authors and recipients sufficient to allow plaintiffs
to contest claimed privileges. The Court, however, does not understand issue no. 4 or to what “order” the plaintiffs
are alluding.………………………… ……………………………………………………………………………….
6
Federal Rule of Civil Procedure 33(d) provides [comparably worded in a subsequent amendment]:
Where the answer to an interrogatory may be derived or ascertained from the business records of the party
upon whom the interrogatory has been served..., and the burden of deriving or ascertaining the answer is
substantially the same for the party serving the interrogatory as for the party served, it is a sufficient answer to such
interrogatory to specify the records from which the answer may be derived or ascertained and to afford to the party
serving the interrogatory reasonable opportunity to examine, audit or inspect such records and to make copies,
compilations, abstracts, or summaries. A specification shall be in sufficient detail to permit the interrogating party to
locate and to identify, as readily as can the party served, the records from which the answer may be ascertained.
209
by category and location, the records from which answers to interrogatories can be derived.”7
Thus, when voluminous documents are produced under Rule 33(d), they must be accompanied
by indices designed to guide the searcher to the documents responsive to the interrogatories. See
[citation omitted] (“The appropriate answer when documents are to be used [under Rule 33(d) ]
is to list the specific document provided the other party and indicat[e] the page or paragraphs that
are responsive to the interrogatory”).
Without detailed specification by category and location of responsive documents, the
burden of deriving the answers to the interrogatories is not the same for the parties; rather, it
would be easier for persons employed by the defendants to locate responsive documents. See
Advisory Committee’s Note to Fed.R.Civ.P. 33 ... (“A respondent may not impose on an
interrogating party a mass of records as to which research is feasible only for one familiar with
the records.”).… Thus, defendants’ responses to interrogatory nos. 1 through 17 and 19 do not
comply with Rule 33(d) and [fail to] adequately specify by category and location the business
records containing the answers to the interrogatories, and plaintiffs’ motion should be
GRANTED as to these interrogatories.
Interrogatory no. 18 asks defendants to:
IDENTIFY the date and location of your first discovery of CONTAMINATION in the
SURROUNDING AREA.
The defendants, in their Supplemental Further Responses to interrogatory no. 18, state
that: BNA first became aware that releases from its SSFL operations in concentrations above
normal background had migrated offsite in August or September 1991. Water from a monitoring
well approximately one hundred feet north of SSFL on property then owned by the Brandeis–
Bardin Institute measured above background for tritium, but below the drinking water standard.
The plaintiffs object that this response is inadequate under Rule 33(d) and that defendants
have provided no information with regard to the [other three] Hughes, Canoga or DeSoto
facilities [italics added]. However, defendants have narratively answered the interrogatory, rather
than rely on Rule 33(d). Additionally, interrogatory no. 18 only requests information regarding
defendants’ first discovery of contamination, not the first discovery of contamination in the
surrounding areas of each of the Rocketdyne Facilities; thus, defendants answered the
interrogatory.
Interrogatory no. 20 asks defendants to:
IDENTIFY all allegations, reports, or claims of OFFSITE CONTAMINATION YOU
have received.
In their Supplemental Further Responses to interrogatory no. 20, defendants list sixteen
lawsuits, including the instant action, and further responded that they “are not aware of specific
complaints of contamination of offsite property other than these lawsuits.”
7
The defendants, in response to interrogatory nos. 1 through 5, responded that, because the volume of
responsive documents is “huge, and listing all the responsive documents would be an overly burdensome endeavor,”
defendants have identified only a “representative sampling” of some of the documents containing responsive
information. Such a response clearly shows lack of compliance with Rule 33(d). …………………………………….
210
The plaintiffs object that this response is inadequate under Rule 33(d), that defendants
have provided no information regarding the Hughes, Canoga or DeSoto facilities, and that the
response should also list informal complaints. Here again, defendants have narratively answered
the interrogatory, rather than rely on Rule 33(d), and defendants have answered the interrogatory,
albeit not to plaintiffs’ satisfaction.
For the foregoing reasons, the Court finds that defendants have not complied with Rule
33(d) in responding to interrogatory nos. 1 through 17 and 19, and plaintiffs’ motion to compel
further responses to those interrogatories is GRANTED. The Court also finds that defendants’
responses to interrogatory nos. 1 through 17 and 19 were not substantially justified. Since the
Court has found that, in light of the nature of the interrogatories, defendants could have chosen to
respond under Rule 33(d), the defendants, at their option, will be afforded one last opportunity to
respond under Rule 33(d), provided they comply with all of the Court’s requirements and
limitations set forth herein and in Parts II and V [of this opinion]. The plaintiffs’ motion to
compel further answers to interrogatory nos. 18 and 20 is DENIED.
II
The Court would like to take this opportunity to provide guidance to the parties regarding
the use of Rule 33(d), so that, when properly used, both sides will be able to easily find for trial
the documents produced during discovery. For trial purposes, it is best to have all documents
placed on CD–ROM, which affords a method by which the storage of voluminous documents is
less burdensome to the parties. This is not possible, however, without two things: One, a general
index describing by topic and subtopic the information in the documents and, two, a locator
index identifying the location of each document on CD–ROM. Since the Fourth Amended
Complaint spans five decades, the descriptive index should also provide the decade (date) in
which the document was created. Because both the descriptive and locator indices must meet the
needs of both sides, the Court believes the parties should jointly create these indices. Thus, the
parties must meet and confer regarding the indices, and such meeting or meetings shall take
place no later than fourteen (14) days from the date of this Order.
...
V
...
To prevent the waste of the Court’s time in the future, the Court intends to impose certain
conditions on the parties. First, each side shall, within the next fourteen (14) days, identify to the
Court one attorney who will be primarily responsible for discovery, and that attorney must make
himself or herself available at all times to review discovery decisions by the other attorneys and
to personally meet and confer with the opposing discovery attorney to resolve any discovery
dispute, within 72 hours of a dispute arising. Second, each side shall, within the next fourteen
(14) days, submit to the Court for its consideration and adoption a discovery plan containing
suggestions about ways in which the discovery process may proceed more smoothly, efficiently
and economically. Third, commencing May 3, 1999, and continuing on the first Monday of each
month thereafter, until discovery is completed, the sides shall submit to the Court a joint status
report specifying the discovery conducted, including the making of supplemental answers and
document productions, during the past thirty (30) days, or a declaration signed by both discovery
attorneys that there is nothing to report.
The Court would like to take this opportunity to address the parties and their counsel, to
stress that [t]he discovery system depends absolutely on good faith and common sense from
counsel. The courts, sorely pressed by demands to try cases promptly and to rule thoughtfully on
211
potentially case dispositive motions, simply do not have the resources to police closely the
operation of the discovery process. The whole system of [c]ivil adjudication would be ground to
a virtual halt if the courts were forced to intervene in even a modest percentage of discovery
transactions. That fact should impose on counsel an acute sense of responsibility about how they
handle discovery matters. They should strive to be cooperative, practical and sensible, and
should turn to the courts (or take positions that force others to turn to the courts) only in
extraordinary situations that implicate truly significant interests.
ORDER
1. The plaintiffs’ motion to compel further responses to interrogatory nos. 1 through 17
and 19 is GRANTED, and defendants shall file supplemental answers to those interrogatories
within forty-five (45) days of the date of this Order, or alternatively, defendants may elect to
answer the interrogatories under Rule 33(d), provided defendants comply with all of the
requirements set forth in Parts I, II and V; however, plaintiffs’ motion to compel further
responses to interrogatory nos. 18 and 20 is DENIED.
2. The plaintiffs’ motion for attorney's fees is DENIED WITHOUT PREJUDICE. The
defendants’ request for attorney’s fees is DENIED.
...
4. Within fourteen (14) days of the date of this Order, each side shall select its discovery
attorney and shall submit a discovery plan to Judge Chapman, as discussed in Part V. The
discovery attorneys shall, starting May 3, 1999, submit joint month status reports to Judge
Chapman advising of all discovery, including the making of supplemental responses and
productions, occurring during the previous thirty (30) days, as set forth in Part V.
5. The Clerk of Court shall serve this Order on the parties.
Notes and Questions:
1. O’Connor introduces you to the intricacies of modern discovery practice; e.g., the
court’s early suggestion that Rule 30(b)(6) depositions would likely be the more appropriate
device for seeking such complex information. Note the breadth of discretion the court may
exercise, when resolving discovery matters—especially at the beginning of Part V.
2. As long as what is being asked for lies within the scope of discoverable information,
the response does not have to be in lockstep with the method employed to seek it. Thus, the
FRCP 33 interrogatory rule authorizes a response via production of/providing access to
documents which will answer the interrogatory.
3. The court directed the parties to “meet and confer” regarding preparation of the
indices. Parties also have a responsibility to meet and confer, each time one of them makes a
motion to the court. FRCP 37(a)(1). A host of factors influence the method by which moving
parties must meet this obligation. They do not have to actually “meet.” Another factor is that the
more complex the case, the more robust the court’s expectation regarding the “confer” portion of
this requirement.
4. The court will grant attorney’s fees, depending on its view of the genuineness of the
dispute.
212
ZUBULAKE v. UBS WARBURG LLC
United States District Court, Southern District New York
217 F.R.D. 309 (2003)
OPINION AND ORDER
Scheindlin, District Judge.
The world was a far different place in 1849, when Henry David Thoreau opined (in an
admittedly broader context) that “[t]he process of discovery is very simple.” That hopeful maxim
has given way to rapid technological advances, requiring new solutions to old problems. The
issue presented here is one such problem, recast in light of current technology: To what extent is
inaccessible electronic data discoverable, and who should pay for its production?
I. INTRODUCTION
The Supreme Court recently reiterated that our “simplified notice pleading standard relies
on liberal discovery rules and summary judgment motions to define disputed facts and issues and
to dispose of unmeritorious claims.” Thus, it is now beyond dispute that “[b]road discovery is a
cornerstone of the litigation process contemplated by the Federal Rules of Civil Procedure.” The
Rules contemplate a minimal burden to bringing a claim; that claim is then fleshed out through
vigorous and expansive discovery.
In one context, however, the reliance on broad discovery has hit a roadblock. As
individuals and corporations increasingly do business electronically5—using computers to create
and store documents, make deals, and exchange e-mails—the universe of discoverable material
has expanded exponentially. The more information there is to discover, the more expensive it is
to discover all the relevant information until, in the end, “discovery is not just about uncovering
the truth, but also about how much of the truth the parties can afford to disinter.”
This case provides a textbook example of the difficulty of balancing the competing needs
of broad discovery and manageable costs. Laura Zubulake is suing UBS Warburg LLC, UBS
Warburg, and UBS AG (collectively, “UBS” or the “Firm”) under Federal, State and City law for
gender discrimination and illegal retaliation. Zubulake’s case is certainly not frivolous8 and if she
prevails, her damages may be substantial.9 She contends that key evidence is located in various
e-mails exchanged among UBS employees that now exist only on backup tapes and perhaps
other archived media. According to UBS, restoring those e-mails would cost approximately
$175,000.00, exclusive of attorney time in reviewing the e-mails. Zubulake now moves for an
order compelling UBS to produce those e-mails at its expense.
II. BACKGROUND
A. Zubulake’s Lawsuit
UBS hired Zubulake on August 23, 1999, as a director and senior salesperson on its U.S.
Asian Equities Sales Desk (the “Desk”), where she reported to Dominic Vail, the Desk’s
5
See Wendy R. Liebowitz, Digital Discovery Starts to Work, Nat'l L.J., Nov. 4, 2002, at 4 (reporting that
in 1999, ninety-three percent of all information generated was in digital form).
8
Indeed, Zubulake has already produced a sort of “smoking gun:” an e-mail suggesting that she be fired
“ASAP” after her EEOC charge was filed, in part so that she would not be eligible for year-end bonuses. See
8/21/01 e-mail from Mike Davies to Rose Tong (“8/21/01 e-Mail”), Ex. G to the 3/17/03 Affirmation of James A.
Batson, counsel for Zubulake (“Batson Aff.”).
9
At the time she was terminated, Zubulake’s annual salary was approximately $500,000. Were she to
receive full back pay and front pay, Zubulake estimates that she may be entitled to as much as $13,000,000 in
damages, not including any punitive damages or attorney’s fees. …
213
manager. At the time she was hired, Zubulake was told that she would be considered for Vail's
position if and when it became vacant.
In December 2000, Vail indeed left his position to move to the Firm’s London office. But
Zubulake was not considered for his position, and the Firm instead hired Matthew Chapin as
director of the Desk. Zubulake alleges that from the outset Chapin treated her differently than the
other members of the Desk, all of whom were male. In particular, Chapin “undermined Ms.
Zubulake’s ability to perform her job by, inter alia: (a) ridiculing and belittling her in front of coworkers; (b) excluding her from work-related outings with male co-workers and clients; (c)
making sexist remarks in her presence; and (d) isolating her from the other senior salespersons
on the Desk by seating her apart from them.” No such actions were taken against any of
Zubulake’s male co-workers.
Zubulake ultimately responded by filing a Charge of (gender) Discrimination with the
EEOC on August 16, 2001. On October 9, 2001, Zubulake was fired with two weeks’ notice. On
February 15, 2002, Zubulake filed the instant action, suing for sex discrimination and retaliation
under Title VII, the New York State Human Rights Law, and the Administrative Code of the
City of New York. UBS timely answered on March 12, 2002, denying the allegations. UBS’s
argument is, in essence, that Chapin’s conduct was not unlawfully discriminatory because he
treated everyone equally badly. On the one hand, UBS points to evidence that Chapin’s antisocial behavior was not limited to women: a former employee made allegations of national origin
discrimination against Chapin, and a number of male employees on the Desk also complained
about him. On the other hand, Chapin was responsible for hiring three new females employees to
the Desk.
B. The Discovery Dispute
Discovery in this action commenced on or about June 3, 2002, when Zubulake served
UBS with her first document request. At issue here is request number twenty-eight, for “[a]ll
documents concerning any communication by or between UBS employees concerning Plaintiff.”
The term document in Zubulake’s request “includ[es], without limitation, electronic or
computerized data compilations.” On July 8, 2002, UBS responded by producing approximately
350 pages of documents, including approximately 100 pages of e-mails. UBS also objected to a
substantial portion of Zubulake’s requests.
On September 12, 2002—after an exchange of angry letters and a conference before
United States Magistrate Judge Gabriel W. Gorenstein—the parties reached an agreement (the
“9/12/02 Agreement”). With respect to document request twenty-eight, the parties reached the
following agreement, in relevant part:
Defendants will [ ] ask UBS about how to retrieve e-mails that are saved in the
firm’s computer system and will produce responsive e-mails if retrieval is possible and
Plaintiff names a few individuals.
Pursuant to the 9/12/02 Agreement, UBS agreed unconditionally to produce responsive emails from the accounts of five individuals named by Zubulake: Matthew Chapin, Rose Tong (a
human relations representation who was assigned to handle issues concerning Zubulake), Vinay
Datta (a co-worker on the Desk), Andrew Clarke (another co-worker on the Desk), and Jeremy
Hardisty (Chapin’s supervisor and the individual to whom Zubulake originally complained about
Chapin). UBS was to produce such e-mails sent between August 1999 (when Zubulake was
hired) and December 2001 (one month after her termination), to the extent possible.
214
UBS, however, produced no additional e-mails and insisted that its initial production (the
100 pages of e-mails) was complete. As UBS’s opposition to the instant motion makes clear—
although it remains unsaid—UBS never searched for responsive e-mails on any of its backup
tapes. To the contrary, UBS informed Zubulake that the cost of producing e-mails on backup
tapes would be prohibitive (estimated at the time at approximately $300,000.00).
Zubulake, believing that the 9/12/02 Agreement included production of e-mails from
backup tapes, objected to UBS’s nonproduction. In fact, Zubulake knew that there were
additional responsive e-mails that UBS had failed to produce because she herself had produced
approximately 450 pages of e-mail correspondence. Clearly, numerous responsive e-mails had
been created and deleted19 at UBS, and Zubulake wanted them.
On December 2, 2002, the parties again appeared before Judge Gorenstein, who ordered
UBS to produce for deposition a person with knowledge of UBS’s e-mail retention policies in an
effort to determine whether the backup tapes contained the deleted e-mails and the burden of
producing them. In response, UBS produced Christopher Behny, Manager of Global Messaging,
who was deposed on January 14, 2003. Mr. Behny testified to UBS’s e-mail backup protocol,
and also to the cost of restoring the relevant data.
C. UBS’s E–Mail Backup System
In the first instance, the parties agree that e-mail was an important means of
communication at UBS during the relevant time period. Each salesperson, including the
salespeople on the Desk, received approximately 200 e-mails each day. Given this volume, and
because Securities and Exchange Commission regulations require it,21 UBS implemented
extensive e-mail backup and preservation protocols. In particular, e-mails were backed up in two
distinct ways: on backup tapes and on optical disks.
1. Backup Tape Storage
UBS employees used a program called HP OpenMail, manufactured by Hewlett–Packard,
for all work-related e-mail communications. With limited exceptions, all e-mails sent or received
by any UBS employee are stored onto backup tapes. To do so, UBS employs a program called
Veritas NetBackup, which creates a “snapshot” of all e-mails that exist on a given server at the
The term “deleted” is sticky in the context of electronic data. “ ‘Deleting’ a file does not actually erase
that data from the computer’s storage devices. Rather, it simply finds the data’s entry in the disk directory and
changes it to a ‘not used’ status—thus permitting the computer to write over the ‘deleted’ data. Until the computer
writes over the ‘deleted’ data, however, it may be recovered by searching the disk itself rather than the disk’s
directory. Accordingly, many files are recoverable long after they have been deleted—even if neither the computer
user nor the computer itself is aware of their existence. Such data is referred to as ‘residual data.’ ” Deleted data may
also exist because it was backed up before it was deleted. Thus, it may reside on backup tapes or similar media.
Unless otherwise noted, I will use the term “deleted” data to mean residual data, and will refer to backed-up data as
“backup tapes.”
21
SEC Rule 17a–4, promulgated pursuant to Section 17(a) of the Securities Exchange Act of 1934,
19
provides in pertinent part:
Every [ ] broker and dealer shall preserve for a period of not less than 3 years, the first two years in an
accessible place ... [o]riginals of all communications received and copies of all communications sent by such
member, broker or dealer (including inter-office memoranda and communications) relating to his business as such.
215
time the backup is taken. Except for scheduling the backups and physically inserting the tapes
into the machines, the backup process is entirely automated.
UBS used the same backup protocol during the entire relevant time period, from 1999
through 2001. Using NetBackup, UBS backed up its e-mails at three intervals: (1) daily, at the
end of each day, (2) weekly, on Friday nights, and (3) monthly, on the last business day of the
month. Nightly backup tapes were kept for twenty working days, weekly tapes for one year, and
monthly tapes for three years. After the relevant time period elapsed, the tapes were recycled.25
Once e-mails have been stored onto backup tapes, the restoration process is lengthy. Each
backup tape routinely takes approximately five days to restore, although resort to an outside
vendor would speed up the process (at greatly enhanced costs, of course). Because each tape
represents a snapshot of one server’s hard drive in a given month, each server/month must be
restored separately onto a hard drive. Then, a program called Double Mail is used to extract a
particular individual’s e-mail file. That mail file is then exported into a Microsoft Outlook data
file, which in turn can be opened in Microsoft Outlook, a common e-mail application. A user
could then browse through the mail file and sort the mail by recipient, date or subject, or search
for key words in the body of the e-mail.
Fortunately, NetBackup also created indexes of each backup tape. Thus, Behny was able
to search through the tapes from the relevant time period and determine that the e-mail files
responsive to Zubulake’s requests are contained on a total of ninety-four backup tapes.
2. Optical Disk Storage
In addition to the e-mail backup tapes, UBS also stored certain e-mails on optical disks.
For certain “registered traders,” probably including the members of the Desk, a copy of all emails sent to or received from outside sources ( i.e., e-mails from a “registered trader” at UBS to
someone at another entity, or vice versa) was simultaneously written onto a series of optical
disks. Internal e-mails, however, were not stored on this system.
UBS has retained each optical disk used since the system was put into place in mid-1998.
Moreover, the optical disks are neither erasable nor rewritable. Thus, UBS has every e-mail sent
or received by registered traders (except internal e-mails) during the period of Zubulake’s
employment, even if the e-mail was deleted instantaneously on that trader’s system.
The optical disks are easily searchable using a program called Tumbleweed. Using
Tumbleweed, a user can simply log into the system with the proper credentials and create a plain
language search. Search criteria can include not just “header” information, such as the date or the
name of the sender or recipient, but can also include terms within the text of the e-mail itself. For
example, UBS personnel could easily run a search for e-mails containing the words “Laura” or
“Zubulake” that were sent or received by Chapin, Datta, Clarke, or Hardisty.
III. LEGAL STANDARD
...
Rule 26(b)(2) imposes general limitations on the scope of discovery in the form of a
“proportionality test:”
Of course, periodic backups such as UBS’s necessarily entails the loss of certain e-mails. Because
backups were conducted only intermittently, some e-mails that were deleted from the server were never backed up.
For example, if a user both received and deleted an e-mail on the same day, it would not reside on any backup tape.
Similarly, an e-mail received and deleted within the span of one month would not exist on the monthly backup,
although it might exist on a weekly or daily backup, if those tapes still exist. As explained below, if an e-mail was to
or from a “registered trader,” however, it may have been stored on UBS’s optical storage devices. ……………….
25
216
The frequency or extent of use of the discovery methods otherwise permitted
under these rules and by any local rule shall be limited by the court if it determines that:
(i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from
some other source that is more convenient, less burdensome, or less expensive; (ii) the
party seeking discovery has had ample opportunity by discovery in the action to obtain
the information sought; or (iii) the burden or expense of the proposed discovery
outweighs its likely benefit, taking into account the needs of the case, the amount in
controversy, the parties' resources, the importance of the issues at stake in the litigation,
and the importance of the proposed discovery in resolving the issues.
Finally, “[u]nder [the discovery] rules, the presumption is that the responding party must
bear the expense of complying with discovery requests, but [it] may invoke the district court’s
discretion under Rule 26(c) to grant orders protecting [it] from ‘undue burden or expense’ in
doing so, including orders conditioning discovery on the requesting party's payment of the costs
of discovery.”
The application of these various discovery rules is particularly complicated where
electronic data is sought because otherwise discoverable evidence is often only available from
expensive-to-restore backup media. That being so, courts have devised creative solutions for
balancing the broad scope of discovery prescribed in Rule 26(b)(1) with the cost-consciousness
of Rule 26(b)(2). By and large, the solution has been to consider cost-shifting: forcing the
requesting party [in appropriate cases], rather than the answering party, to bear the cost of
discovery.
By far, the most influential response to the problem of cost-shifting relating to the
discovery of electronic data was … an eight-factor test to determine whether discovery costs
should be shifted. Those eight factors are:
(1) the specificity of the discovery requests; (2) the likelihood of discovering
critical information; (3) the availability of such information from other sources; (4) the
purposes for which the responding party maintains the requested data; (5) the relative
benefits to the parties of obtaining the information; (6) the total cost associated with
production; (7) the relative ability of each party to control costs and its incentive to do so;
and (8) the resources available to each party [citation omitted].
Both Zubulake and UBS agree that the eight-factor Rowe test should be used to
determine whether cost-shifting is appropriate.
IV. DISCUSSION
A. Should Discovery of UBS’s Electronic Data Be Permitted?
Under Rule 34, a party may request discovery of any document, “including writings,
drawings, graphs, charts, photographs, phonorecords, and other data compilations....” The
“inclusive description” of the term document “accord[s] with changing technology.” “It makes
clear that Rule 34 applies to electronics [sic] data compilations.” Thus, “[e]lectronic documents
are no less subject to disclosure than paper records.” This is true not only of electronic
documents that are currently in use, but also of documents that may have been deleted and now
reside only on backup disks.
That being so, Zubulake is entitled to discovery of the requested e-mails so long as they
are relevant to her claims, which they clearly are. As noted, e-mail constituted a substantial
217
means of communication among UBS employees. To that end, UBS has already produced
approximately 100 pages of e-mails, the contents of which are unquestionably relevant.
Nonetheless, UBS argues that Zubulake is not entitled to any further discovery because it
already produced all responsive documents, to wit, the 100 pages of e-mails. This argument is
unpersuasive for two reasons. First, because of the way that UBS backs up its e-mail files, it
clearly could not have searched all of its e-mails without restoring the ninety-four backup tapes
(which UBS admits that it has not done). UBS therefore cannot represent that it has produced all
responsive e-mails. Second, Zubulake herself has produced over 450 pages of relevant e-mails,
including e-mails that would have been responsive to her discovery requests but were never
produced by UBS. These two facts strongly suggest that there are e-mails that Zubulake has not
received that reside on UBS’s backup media.41
B. Should Cost–Shifting Be Considered?
Because it apparently recognizes that Zubulake is entitled to the requested discovery,
UBS expends most of its efforts urging the court to shift the cost of production to “protect [it] ...
from undue burden or expense.” Faced with similar applications, courts generally engage in
some sort of cost-shifting analysis, whether the [above-]refined eight-factor … test or a cruder
application of Rule 34’s proportionality test, or something in between.
The first question, however, is whether cost-shifting must be considered in every case
involving the discovery of electronic data, which—in today’s world—includes virtually all cases.
In light of the accepted principle, stated above, that electronic evidence is no less discoverable
than paper evidence, the answer is, “No.” The Supreme Court has instructed that “the
presumption is that the responding party must bear the expense of complying with discovery
requests....” Any principled approach to electronic evidence must respect this presumption.
Courts must remember that cost-shifting may effectively end discovery, especially when
private parties are engaged in litigation with large corporations. As large companies increasingly
move to entirely paper-free environments, the frequent use of cost-shifting will have the effect of
crippling discovery in discrimination and retaliation cases. This will both undermine the “strong
public policy favor[ing] resolving disputes on their merits,” and may ultimately deter the filing
of potentially meritorious claims.
Thus, cost-shifting should be considered only when electronic discovery imposes an
“undue burden or expense” on the responding party. The burden or expense of discovery is, in
turn, “undue” when it “outweighs its likely benefit, taking into account the needs of the case, the
amount in controversy, the parties' resources, the importance of the issues at stake in the
litigation, and the importance of the proposed discovery in resolving the issues.”
Many courts have automatically assumed that an undue burden or expense may arise
simply because electronic evidence is involved. This makes no sense. Electronic evidence is
frequently cheaper and easier to produce than paper evidence because it can be searched
automatically, key words can be run for privilege checks, and the production can be made in
electronic form obviating the need for mass photocopying.
In fact, whether production of documents is unduly burdensome or expensive turns
primarily on whether it is kept in an accessible or inaccessible format (a distinction that
41
UBS insists that “[f]rom the time Plaintiff commenced her EEOC action in August 2001 ... UBS
collected and produced all existing responsive e-mails sent or received between 1999 and 2001 from these and other
employees' computers.” Even if this statement is completely accurate, a simple search of employees’ computer files
would not have turned up e-mails deleted prior to August 2001. Such deleted documents exist only on the backup
tapes and optical disks, and their absence is precisely why UBS's production is not complete.
218
corresponds closely to the expense of production). In the world of paper documents, for example,
a document is accessible if it is readily available in a usable format and reasonably indexed.
Examples of inaccessible paper documents could include (a) documents in storage in a difficult
to reach place; (b) documents converted to microfiche and not easily readable; or (c) documents
kept haphazardly, with no indexing system, in quantities that make page-by-page searches
impracticable. But in the world of electronic data, thanks to search engines, any data that is
retained in a machine readable format is typically accessible.50
...
C. What Is the Proper Cost–Shifting Analysis?
[The above] … eight factor test has unquestionably become the gold standard for courts
resolving electronic discovery disputes. But … [¶] In order to maintain the presumption that the
responding party pays, the cost-shifting analysis must be neutral; close calls should be resolved
in favor of the presumption. The … factors, as applied, undercut that presumption for three
reasons. First, the … [eight-factor] test is incomplete. Second, courts have given equal weight to
all of the factors, when certain factors should predominate. Third, courts applying the … test
have not always developed a full factual record.
...
c. A New Seven–Factor Test
Set forth below is a new seven-factor test….
1. The extent to which the request is specifically tailored to discover relevant
information;
2. The availability of such information from other sources;
3. The total cost of production, compared to the amount in controversy;
4. The total cost of production, compared to the resources available to each party;
5. The relative ability of each party to control costs and its incentive to do so;
6. The importance of the issues at stake in the litigation; and
7. The relative benefits to the parties of obtaining the information.
...
D. A Factual Basis Is Required to Support the Analysis
Courts … have uniformly favored cost-shifting largely because of assumptions made
concerning the likelihood that relevant information will be found. …
But such proof will rarely exist in advance of obtaining the requested discovery. The
suggestion that a plaintiff must not only demonstrate that probative evidence exists, but also
prove that electronic discovery will yield a “gold mine,” is contrary to the plain language of Rule
26(b)(1), which permits discovery of “any matter” that is “relevant to [a] claim or defense.”
...
Requiring the responding party to restore and produce responsive documents from a
small sample of backup tapes will inform the cost-shifting analysis laid out above. When based
on an actual sample … —there will be tangible evidence of what the backup tapes may have to
offer. There will also be tangible evidence of the time and cost required to restore the backup
See Scheindlin & Rabkin, Electronic Discovery, 41 B.C. L.Rev. at 364 (“By comparison [to the time it
would take to search through 100,000 pages of paper], the average office computer could search all of the
documents for specific words or combination[s] of words in [a] minute, perhaps less.”); see also Public Citizen v.
Carlin, 184 F.3d 900, 908–10 (D.C.Cir.1999).
50
219
tapes, which in turn will inform the second group of cost-shifting factors. Thus, by requiring a
sample restoration of backup tapes, the entire cost-shifting analysis can be grounded in fact
rather than guesswork.
...
IV. CONCLUSION AND ORDER
In summary, deciding disputes regarding the scope and cost of discovery of electronic
data requires a three-step analysis:
First, it is necessary to thoroughly understand the responding party’s computer system,
both with respect to active and stored data. For data that is kept in an accessible format, the usual
rules of discovery apply: the responding party should pay the costs of producing responsive data.
A court should consider cost-shifting only when electronic data is relatively inaccessible, such as
in backup tapes.
Second, because the cost-shifting analysis is so fact-intensive, it is necessary to determine
what data may be found on the inaccessible media. Requiring the responding party to restore and
produce responsive documents from a small sample of the requested backup tapes is a sensible
approach in most cases.
...
Accordingly, UBS is ordered to produce all responsive e-mails that exist on its optical
disks or on its active servers … at its own expense. UBS is also ordered to produce, at its
expense, responsive e-mails from any five backups tapes selected by Zubulake. UBS should then
prepare an affidavit detailing the results of its search, as well as the time and money spent. After
reviewing the contents of the backup tapes and UBS’s certification, the Court will conduct the
appropriate cost-shifting analysis.
A conference is scheduled in Courtroom 12C at 4:30 p.m. on June 17, 2003.
Notes and Questions:
1. Which party normally bears the cost burden associated with responding to
documentary discovery request? How can that burden shift?
2. Assume a judge believes there are good arguments on both sides of the “who pays”
issue. What would be her default ruling?
3. What is Judge Scheindlin’s cost-conscious approach in this case?
4. This is one of the longer cases assigned in this course. Given the practical importance
of electronic discovery, one hopes that the editor did not cut too much. What about your ethical
obligations regarding electronically stored information. Consider the following, quoted from
Qualcomm Inc. v. Broadcom Corp., 2008 WL 66932 (S.D. Cal., 2008, not reported in Fed. Supp.
2d):
Qualcomm had searched the email archives of twenty-one employees and located more
than forty-six thousand documents (totaling more than three hundred thousand pages),
which had been requested but not produced in discovery. ………………………………
...
Qualcomm withheld tens of thousands of emails … and then utilized Broadcom’s lack of
access to the suppressed evidence to repeatedly and falsely aver that there was “no
evidence” … Qualcomm’s misconduct in hiding the emails and electronic documents
220
prevented Broadcom from correcting the false statements and countering the misleading
arguments.
...
Qualcomm did not produce over 46,000 responsive documents, many of which directly
contradict the … argument that Qualcomm repeatedly made to the court and jury.
...
Attorneys must take responsibility for ensuring that their clients conduct a comprehensive
and appropriate document search. Producing 1.2 million pages of marginally relevant
documents while hiding 46,000 critically important ones does not constitute good faith
and does not satisfy either the client's or attorney's discovery obligations. Similarly,
agreeing to produce certain categories of documents and then not producing all of the
documents that fit within such a category is unacceptable.
5. Optional reading: Students taking an advanced ESI or e-discovery course should
consider Judge Scheindlin’s (comparatively lengthy/decade later) 2012 ESI spoliation case,
opting for adverse inference instructions rather than other sanctions. Sekisui America
Corporation v. Hart (S.D.NY 2012).
221
SCHLAGENHAUF v. HOLDER
United States Supreme Court
379 U.S. 104 (1964)
Mr. Justice Goldberg, delivered the [5-4, with 4 discrete] opinion[s] of the Court.
This case involves the validity and construction of Rule 35(a) of the Federal Rules of
Civil Procedure as applied to the examination of a defendant in a negligence action. …
I.
An action … was brought …seeking damages arising from personal injuries suffered by
passengers of a bus which collided with the rear of a tractor-trailer. The named defendants were
The Greyhound Corporation, owner of the bus; petitioner, Robert L. Schlagenhauf, the bus
driver; Contract Carriers, Inc., owner of the tractor; Joseph L. McCorkhill, driver of the tractor; 1
and National Lead Company, owner of the trailer. Answers were filed by each of the defendants
denying negligence.
Greyhound then cross-claimed against Contract Carriers and National Lead for damage to
Greyhound’s bus, alleging that the collision was due solely to their negligence in that the tractortrailer was driven at an unreasonably low speed, had not remained in its lane, and was not
equipped with proper rear lights. Contract Carriers filed an answer to this cross-claim denying its
negligence and asserting ‘(t)hat the negligence of the driver of the … bus (petitioner
Schlagenhauf) proximately caused and contributed to … Greyhound’s damages.’
Pursuant to a pretrial order, Contract Carriers filed a letter-which the trial court treated as,
and we consider to be, part of the answer—alleging that Schlagenhauf was ‘not mentally or
physically capable’ of driving a bus at the time of the accident.
Contract Carriers and National Lead then petitioned the District Court for an order
directing petitioner Schlagenhauf to submit to both mental and physical examinations by one
specialist in each of the following fields:
(1) Internal medicine;
(2) Ophthalmology;
(3) Neurology; and
(4) Psychiatry.
For the purpose of offering a choice to the District Court of one specialist in each field,
the petition recommended two specialists in internal medicine, ophthalmology, and psychiatry,
respectively, and three specialists in neurology—a total of nine physicians. The petition alleged
that the mental and physical condition of Schlagenhauf was ‘in controversy’ as it had been raised
by Contract Carriers’ answer to Greyhound’s cross-claim. This was supported by a brief of legal
authorities and an affidavit of Contract Carriers’ attorney stating that Schlagenhauf had seen red
lights 10 to 15 seconds before the accident, that another witness had seen the rear lights of the
trailer from a distance of three-quarters to one-half mile, and that Schlagenhauf had been
involved in a prior accident.
The certified record indicates that petitioner’s attorneys filed in the District Court a brief
in opposition to this petition asserting, among other things, that ‘the physical and mental
condition of the defendant Robert L. Schlagenhauf is not ‘in controversy’ herein in the sense that
1
In all the pleadings McCorkhill was joined with Contract Carriers. For simplicity, both will be referred to
as Contract Carriers.
222
these words are used in Rule 35 of the Federal Rules of Civil Procedure; (and) that good cause
has not been shown for the multiple examinations prayed for by the cross-defendant….
While disposition of this petition was pending, National Lead filed its answer to
Greyhound’s cross-claim and itself ‘cross-claimed’ against Greyhound and Schlagenhauf for
damage to its trailer. The answer asserted generally that Schlagenhauf’s negligence proximately
caused the accident. The cross-claim additionally alleged that Greyhound and Schlagenhauf were
negligent
(b)y permitting said bus to be operated over and upon said public highway by the said
defendant, Robert L. Schlagenhauf, when both the said Greyhound Corporation and said
Robert L. Schlagenhauf knew that the eyes and vision of the said Robert L. Schlagenhauf
was (sic) impaired and deficient.
The District Court, on the basis of the petition filed by Contract Carriers, and without any
hearing, ordered Schlagenhauf to submit to nine examinations—one by each of the
recommended specialists—despite the fact that the petition clearly requested a total of only four
examinations.3
… The Court of Appeals denied mandamus….
We granted certiorari to review undecided questions concerning the validity and
construction of Rule 35.
II.
...
Here petitioner’s basic allegation was lack of power in a district court to order a mental
and physical examination of a defendant. That this issue was substantial is underscored by the
fact that the challenged order requiring examination of a defendant appears to be the first of its
kind in any reported decision in the federal courts under Rule 35, and we have found only one
such modern case in the state courts. …
The petitioner, however, also alleged that, even if Rule 35 gives a district court power to
order mental and physical examinations of a defendant in an appropriate case, the District Court
here exceeded that power in ordering examinations when petitioner’s mental and physical
condition was not ‘in controversy’ and no ‘good cause’ was shown, both as expressly required by
Rule 35. …
We recognize … [t]he meaning of Rule 35’s requirements of ‘in controversy’ and ‘good
cause’ also raised issues of first impression.
...
III.
Rule 35 on its face applies to all ‘parties,’ which under any normal reading would include
a defendant. Petitioner contends, however, that the application of the Rule to a defendant would
be an unconstitutional invasion of his privacy….
3
After the Court of Appeals denied mandamus, the order was corrected by the District Court to reduce the
number of examinations to the four requested. We agree with respondent that the issue of that error has become
moot. However, the fact that the District Court ordered nine examinations is not irrelevant, together with all the
other circumstances, in the consideration of whether the District Court gave to the petition for mental and physical
examinations that discriminating application, which Rule 35 requires.
223
We recognize that, insofar as reported cases show, this type of discovery in federal courts
has been applied solely to plaintiffs, and that some early state cases seem to have proceeded on a
theory that a plaintiff who seeks redress for injuries in a court of law thereby ‘waives' his right to
claim the inviolability of his person.
...
We hold that Rule 35, as applied to either plaintiffs or defendants to an action, is free of
constitutional difficulty and is within the scope of the Enabling Act. …
IV.
There remains the issue of the construction of Rule 35. We enter upon determination of
this construction with the basic premise ‘that the deposition-discovery rules are to be accorded a
broad and liberal treatment,’ to effectuate their purpose that ‘civil trials in the federal courts no
longer need be carried on in the dark.’
Petitioner contends that even if Rule 35 is to be applied to defendants, which we have
determined it must, nevertheless it should not be applied to him as he was not a party in relation
to Contract Carriers and National Lead—the movants for the mental and physical
examinations—at the time the examinations were sought.11 The Court of Appeals agreed with
petitioner’s general legal proposition, holding that the person sought to be examined must be an
opposing party vis-a-vis the movant (or at least one of them). While it is clear that the person to
be examined must be a party to the case, we are of the view that the Court of Appeals gave an
unduly restrictive interpretation to that term. Rule 35 only requires that the person to be
examined be a party to the ‘action,’ not that he be an opposing party vis-a -vis the movant. …
… The [prima facie] … basis for the examinations … [is the] … allegation that
petitioner’s mental and physical condition had been … put in controversy by the National Lead
answer and cross-claim….
Petitioner next contends that his mental or physical condition was not ‘in controversy’
and ‘good cause’ was not shown for the examinations, both as required by the express terms of
Rule 35.
...
It is notable … that in none of the other discovery provisions is there a restriction that the
matter be ‘in controversy.’…
This additional requirement of ‘good cause’ was reviewed [citation omitted] in the
following words:
… [A] party may take depositions and serve interrogatories without prior sanction
of the court or even its knowledge of what the party is doing. Only if a deponent refuses
to answer in the belief that the question is irrelevant, can the moving party request under
Rule 37 a court order requiring an answer.
Significantly, this freedom of action, afforded a party who resorts to depositions
and interrogatories, is not granted to one proceeding under Rule … 35. Instead, the court
must decide as an initial matter, and in every case, whether the motion requesting … the
making of a physical or mental examination adequately demonstrates good cause. The
specific requirement of good cause would be meaningless if good cause could be
sufficiently established by merely showing that the desired materials are relevant, for the
11
We have already pointed out, ... that at the time of the first petition, Schlagenhauf was a named defendant
in the original complaint but was not a named cross-defendant in any pleadings filed by Contract Carriers or
National Lead. ………………………………………………………………………………………………
224
relevancy standard has already been imposed by Rule 26(b). Thus, by adding the words
‘… good cause …,’ the Rules indicate that there must be greater showing of need under
Rule … 35 than under the other discovery rules.
The courts of appeals in other cases have also recognized that [the] … good-cause
requirement is not a mere formality, but is a plainly expressed limitation on the use of that Rule.
Th[e] …‘in controversy’ and ‘good cause’ requirements of Rule 35 ... are not met by mere
conclusory allegations of the pleadings—nor by mere relevance to the case—but require an
affirmative showing by the movant that each condition … is really and genuinely in controversy
and that good cause exists for ordering each particular examination. Obviously, what may be
good cause for one type of examination may not be so for another. The ability of the movant to
obtain the desired information by other means is also relevant.
Rule 35, therefore, requires discriminating application by the trial judge, who must
decide, as an initial matter in every case, whether the party requesting a mental or physical
examination or examinations has adequately demonstrated the existence of the Rule’s
requirements of ‘in controversy’ and ‘good cause,’ which requirements … are necessarily
related. This does not, of course, mean that the movant must prove his case on the merits in order
to meet the requirements for a mental or physical examination. Nor does it mean that an
evidentiary hearing is required in all cases. This may be necessary in some cases, but in other
cases the showing could be made by affidavits or other usual methods short of a hearing. It does
mean, though, that the movant must produce sufficient information, by whatever means, so that
the district judge can fulfill his function mandated by the Rule.
Of course, there are situations where the pleadings alone are sufficient to meet these
requirements. A plaintiff in a negligence action who asserts mental or physical injury places that
mental or physical injury clearly in controversy and provides the defendant with good cause for
an examination to determine the existence and extent of such asserted injury. This is not only
true as to a plaintiff, but applies equally to a defendant who asserts his mental or physical
condition as a defense to a claim, such as, for example, where insanity is asserted as a defense to
a divorce action [or the original defendant files a counterclaim raising such issues vis-avis the
original plaintiff].
Here, however, Schlagenhauf did not assert his mental or physical condition either in
support of or in defense of a claim. His condition was sought to be placed in issue by other
parties. Thus, under the principles discussed above, Rule 35 required that these parties make an
affirmative showing that petitioner’s mental or physical condition was in controversy and that
there was good cause for the [nine] examinations requested [and granted by the trial court]. This,
the record plainly shows, they failed to do.
The only allegations in the pleadings relating to this subject were the general conclusory
statement in Contract Carriers’ answer to the cross-claim that ‘Schlagenhauf was not mentally or
physically capable of operating’ the bus at the time of the accident and the limited allegation in
National Lead’s cross-claim that, at the time of the accident, ‘the eyes and vision of ...
Schlagenhauf was (sic) impaired and deficient.’
The attorney’s affidavit attached to the petition for the examinations provided:
225
That … Schlagenhauf, in his deposition … admitted that he saw red lights for 10
to 15 seconds prior to a collision with a semi-tractor trailer unit and yet drove his vehicle
on without reducing speed and without altering the course thereof.
The only eye-witness to this accident known to this affiant … testified that
immediately prior to the impact between the bus and truck that he had also been
approaching the truck from the rear and that he had clearly seen the lights of the truck for
a distance of three-quarters to one-half mile to the rear thereof.
… Schlagenhauf has admitted in his deposition … that he was involved in a
(prior) similar type rear end collision. …
This record cannot support even the corrected order which required one examination in
each of the four specialties of internal medicine, ophthalmology, neurology, and psychiatry. 15
Nothing in the pleadings or affidavit would afford a basis for a belief that Schlagenhauf was
suffering from a mental or neurological illness warranting wide-ranging psychiatric or
neurological examinations.Nor is there anything stated justifying the broad internal medicine
examination.16
The only specific allegation made in support of the four examinations ordered was that
the ‘eyes and vision’ of Schlagenhauf were impaired. Considering this in conjunction with the
affidavit, we would be hesitant to set aside a visual examination if it had been the only one
ordered. However, as the case must be remanded to the District Court because of the other
examinations ordered, it would be appropriate for the District Judge to reconsider also this order
in light of the guidelines set forth in this opinion.
The Federal Rules of Civil Procedure should be liberally construed, but they should not
be expanded by disregarding plainly expressed limitations. The ‘good cause’ and ‘in
controversy’ requirements of Rule 35 make it very apparent that sweeping examinations of a
party who has not affirmatively put into issue his own mental or physical condition are not to be
automatically ordered merely because the person has been involved in an accident—or, as in this
case, two accidents—and a general charge of negligence is lodged. Mental and physical
examinations are only to be ordered upon a discriminating application by the district judge of the
limitations prescribed by the Rule. To hold otherwise would mean that such examinations could
be ordered routinely in automobile accident cases. The plain language of Rule 35 precludes such
an untoward result.
Accordingly, the judgment of the Court of Appeals is vacated and the case remanded to
the District Court to reconsider the examination order in light of the guidelines herein formulated
and for further proceedings in conformity with this opinion.
Vacated and remanded.
[The remaining opinions were omitted].
Notes and Questions:
15
See note 3, supra.
Moreover, it seems clear that there was no compliance with Rule 35’s requirement that the trial judge
delineate the ‘conditions, and scope’ of the examinations. Here the examinations were ordered in very broad, general
areas. The internal medicine examination might for example, at the instance of the movant or its recommended
physician extend to such things as blood tests, electrocardiograms, gastro-intestinal and other X-ray examinations. It
is hard to conceive how some of these could be relevant under any possible theory of the case. …………………….
16
226
1. The Supreme Court is in charge of the annual rules-making process, resulting in
recommendations to Congress. From time to time, it nevertheless grants (as done in this case)
“certiorari to review undecided questions concerning the validity and construction” of various
FRCPs it has previously approved.
2. What document arguably triggered the “in controversy” element—and why?
3. In what kind of case would this requirement be clearly met—whereby no hearing
would be required, and there would likely be no objection—for: (a) a physical examination, and
(b) a mental examination?
4. If you were the Schlagenhauf judge, with which examination request would you have
the: (a) most, and (b) least trouble deciding?
5. How does the Court define “good cause?”
6. Note the additional FRCP 35(a)(2)(B) requirement regarding the details which must be
specified by the party seeking the examination. Which of the two basic Rule 35 requirements
would that information tend to support?
227
HICKMAN v. TAYLOR
United States Supreme Court
329 U.S. 495 (1947)
Mr. Justice Murphy delivered the [unanimous, with one concurring] opinion of the Court.
This case presents an important problem under the Federal Rules of Civil Procedure, as to
the extent to which a party may inquire into oral and written statements of witnesses, or other
information, secured by an adverse party’s counsel in the course of preparation for possible
litigation after a claim has arisen. Examination into a person’s files and records, including those
resulting from the professional activities of an attorney, must be judged with care. It is not
without reason that various safeguards have been established to preclude unwarranted excursions
into the privacy of a man’s work. At the same time, public policy supports reasonable and
necessary inquiries. Properly to balance these competing interests is a delicate and difficult task.
… [T]he tug ‘J. M. Taylor’ sank while engaged in helping to tow a car float of the
Baltimore & Ohio Railroad across the Delaware River at Philadelphia. The accident was
apparently unusual in nature, the cause of it still being unknown. Five of the nine crew members
were drowned. Three days later the tug owners and the underwriters employed a law firm, of
which respondent Fortenbaugh is a member, to defend them against potential suits by
representatives of the deceased crew members and to sue the railroad for damages to the tug.
Railroad car float resembling the one towed by the J.M. Taylor
Source: barge <http://upload.wikimedia.org/wikipedia/commons/thumb/6/65/NYH_carfloat.jpg/300px-NYH_carfloat.jpg>
Reprinted with permission of the United States Navy
A public hearing was held … before the United States Steamboat Inspectors, at which the
four survivors were examined. This testimony was recorded and made available to all interested
parties. Shortly thereafter, Fortenbaugh privately interviewed the survivors and took statements
from them with an eye toward the anticipated litigation; the survivors signed these statements….
Fortenbaugh also interviewed other persons believed to have some information relating to the
accident and in some cases he made memoranda of what they told him. At the time when
Fortenbaugh secured the statements of the survivors, representatives of two of the deceased crew
members had been in communication with him. Ultimately claims were presented by
representatives of all five of the deceased; four of the claims, however, were settled without
litigation. The fifth claimant, petitioner herein, brought suit in a federal court under the Jones
Act…, naming as defendants the two tug owners, individually and as partners, and the railroad.
One year later, petitioner [plaintiff] filed 39 interrogatories directed to the tug owners.
The 38th interrogatory read:
228
State whether any statements of the members of the crews of the Tugs ‘J. M.
Taylor’ and ‘Philadelphia’ or of any other vessel were taken in connection with the
towing of the car float and the sinking of the Tug ‘John M. Taylor.
Attach hereto exact copies of all such statements if in writing, and if oral, set forth
in detail the exact provisions of any such oral statements or reports.
...
The tug owners, through Fortenbaugh, answered all of the interrogatories except No. 38
…. While admitting that statements of the survivors had been taken, they declined to summarize
or set forth the contents. They did so on the ground that such requests called ‘for privileged
matter obtained in preparation for litigation’ and constituted ‘an attempt to obtain indirectly
counsel’s private files.’ It was claimed that answering these requests ‘would involve practically
turning over not only the complete files, but also the telephone records and, almost, the thoughts
of counsel.’
In connection with the hearing on these objections, Fortenbaugh made a written statement
and gave an informal oral deposition explaining the circumstances under which he had taken the
statements. … The District Court … held that the requested matters were not privileged. The
court then decreed that the tug owners and Fortenbaugh, as counsel and agent for the tug owners
forthwith ‘Answer Plaintiff’s 38th interrogatory…; produce all written statements of witnesses
obtained by Mr. Fortenbaugh, as counsel and agent for Defendants; state in substance any fact
concerning this case which Defendants learned through oral statements made by witnesses to Mr.
Fortenbaugh whether or not included in his private memoranda and produce Mr. Fortenbaugh’s
memoranda containing statements of fact by witnesses or to submit these memoranda to the
Court for determination of those portions which should be revealed to Plaintiff.’ Upon their
refusal, the court adjudged them in contempt and ordered them imprisoned until they complied.
The Third Circuit Court of Appeals, also sitting en banc, reversed the judgment of the
District Court. It held that the information here sought was part of the ‘work product of the
lawyer’ and hence privileged from discovery under the Federal Rules of Civil Procedure. The
importance of the problem, which has engendered a great divergence of views among district
courts, led us to grant certiorari.
The pre-trial deposition-discovery mechanism established by Rules 26 to 37 is one of the
most significant innovations of the Federal Rules of Civil Procedure. Under the prior federal
practice, the pre-trial functions of notice-giving issue-formulation and fact-revelation were
performed primarily and inadequately by the pleadings. Inquiry into the issues and the facts
before trial was narrowly confined and was often cumbersome in method. The new rules,
however, restrict the pleadings to the task of general notice-giving and invest the depositiondiscovery process with a vital role in the preparation for trial. The various instruments of
discovery now serve (1) as a device, along with the pre-trial hearing under Rule 16, to narrow
and clarify the basic issues between the parties, and (2) as a device for ascertaining the facts, or
information as to the existence or whereabouts of facts, relative to those issues. Thus civil trials
in the federal courts no longer need be carried on in the dark. The way is now clear, consistent
with recognized privileges, for the parties to obtain the fullest possible knowledge of the issues
and facts before trial.
...
In urging that he has a right to inquire into the materials secured and prepared by
Fortenbaugh, petitioner emphasizes that the deposition-discovery portions of the Federal Rules
229
of Civil Procedure are designed to enable the parties to discover the true facts and to compel
their disclosure wherever they may be found. It is said that inquiry may be made under these
rules, epitomized by Rule 26, as to any relevant matter which is not privileged; and since the
discovery provisions are to be applied as broadly and liberally as possible, the privilege
limitation must be restricted to its narrowest bounds. On the premise that the attorney-client
privilege is the one involved in this case, petitioner argues that it must be strictly confined to
confidential communications made by a client to his attorney. And since the materials here in
issue were secured by Fortenbaugh from third persons rather than from his clients, the tug
owners, the [petitioner’s] conclusion is reached that these materials are proper subjects for
discovery under Rule 26.
As additional support for this result, petitioner claims that to prohibit discovery under
these circumstances would give a corporate defendant a tremendous advantage in a suit by an
individual plaintiff. Thus in a suit by an injured employee against a railroad or in a suit by an
insured person against an insurance company the corporate defendant could pull a dark veil of
secrecy over all the petinent facts it can collect after the claim arises merely on the assertion that
such facts were gathered by its large staff of attorneys and claim agents. At the same time, the
individual plaintiff, who often has direct knowledge of the matter in issue and has no counsel
until some time after his claim arises could be compelled to disclose all the intimate details of his
case. By endowing with immunity from disclosure all that a lawyer discovers in the course of his
duties, it is said, the rights of individual litigants in such cases are drained of vitality and the
lawsuit becomes more of a battle of deception than a search for truth.
But framing the problem in terms of assisting individual plaintiffs in their suits against
corporate defendants is unsatisfactory. Discovery concededly may work to the disadvantage as
well as to the advantage of individual plaintiffs. Discovery, in other words, is not a one-way
proposition. It is available in all types of cases at the behest of any party, individual or corporate,
plaintiff or defendant. The problem thus far transcends the situation confronting this petitioner.
And we must view that problem in light of the limitless situations where the particular kind of
discovery sought by petitioner might be used.
… Mutual knowledge of all the relevant facts gathered by both parties is essential to
proper litigation. To that end, either party may [generally] compel the other to disgorge whatever
facts he has in his possession. The deposition-discovery procedure simply advances the stage at
which the disclosure can be compelled from the time of trial to the period preceding it, thus
reducing the possibility of surprise. But discovery, like all matters of procedure, has ultimate and
necessary boundaries. … [L]imitations inevitably arise when it can be shown that the
examination is being conducted in bad faith or in such a manner as to annoy, embarrass or
oppress the person subject to the inquiry. And as Rule 26(b) provides, further limitations come
into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized
domains of privilege.
We also agree that the memoranda, statements and mental impressions in issue in this
case fall outside the scope of the attorney-client privilege and hence are not protected from
discovery on that basis. It is unnecessary here to delineate the content and scope of that privilege
as recognized in the federal courts. For present purposes, it suffices to note that the protective
cloak of this privilege does not extend to information which an attorney secures from a witness
while acting for his client in anticipation of litigation. Nor does this privilege concern the
memoranda, briefs, communications and other writings prepared by counsel for his own use in
230
prosecuting his client's case; and it is equally unrelated to writings which reflect an attorney's
mental impressions, conclusions, opinions or legal theories.
But the impropriety of invoking that privilege does not provide an answer to the problem
before us. Petitioner has made more than an ordinary request for relevant, non-privileged facts in
the possession of his adversaries or their counsel. He has sought discovery as of right of oral and
written statements of witnesses whose identity is well known and whose availability to petitioner
appears unimpaired. He has sought production of these matters after making the most searching
inquiries of his opponents as to the circumstances surrounding the fatal accident, which inquiries
were sworn to have been answered to the best of their information and belief. Interrogatories
were directed toward all the events prior to, during and subsequent to the sinking of the tug. Full
and honest answers to such broad inquiries would necessarily have included all pertinent
information gleaned by Fortenbaugh through his interviews with the witnesses. Petitioner makes
no suggestion, and we cannot assume, that the tug owners or Fortenbaugh were incomplete or
dishonest in the framing of their answers. In addition, petitioner was free to examine the public
testimony of the witnesses taken before the United States Steamboat Inspectors [and thus not
subject to any immunity]. We are thus dealing with an attempt to secure the production of
written statements and mental impressions contained in the files and the mind of the attorney
Fortenbaugh without any showing of necessity or any indication or claim that denial of such
production would unduly prejudice the preparation of petitioner's case or cause him any hardship
or injustice. For aught that appears, the essence of what petitioner seeks either has been revealed
to him already through the interrogatories or is readily available to him direct from the witnesses
for the asking.
The District Court … commanded Fortenbaugh to produce all written statements of
witnesses and to state in substance any facts learned through oral statements of witnesses to him.
Fortenbaugh was to submit any memoranda he had made of the oral statements so that the court
might determine what portions should be revealed to petitioner. All of this was ordered without
any showing by petitioner, or any requirement that he make a proper showing, of the necessity
for the production of any of this material or any demonstration that denial of production would
cause hardship or injustice. The court simply ordered production on the theory that the facts
sought were material and were not privileged as constituting attorney-client communications.
In our opinion, neither Rule 26 nor any other rule dealing with discovery contemplates
production under such circumstances. That is not because the subject matter is privileged or
irrelevant, as those concepts are used in these rules.9 Here is simply an attempt, without
purported necessity or justification, to secure written statements, private memoranda and
personal recollections prepared or formed by an adverse party’s counsel in the course of his legal
duties. As such, it falls outside the arena of discovery and contravenes the public policy
underlying the orderly prosecution and defense of legal claims. Not even the most liberal of
discovery theories can justify unwarranted inquiries into the files and the mental impressions of
an attorney.
Historically, a lawyer is … bound to work for the advancement of justice while faithfully
protecting the rightful interests of his clients. In performing his various duties, however, it is
essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by
Reports by a company’s servant, if made in the ordinary course of routine [business], are not privileged,
even though it is desirable that the solicitor should have them and they are subsequently sent to him; but if the
solicitor has requested that such documents shall always be prepared for his use and this was one of the reasons why
they were prepared, they need not by disclosed.’
9
231
opposing parties and their counsel. Proper preparation of a client’s case demands that he
assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare
his legal theories and plan his strategy without undue and needless interference. That is the
historical and the necessary way in which lawyers act within the framework of our system of
jurisprudence to promote justice and to protect their clients' interests. This work is reflected, of
course, in interviews, statements, memoranda, correspondence, briefs, mental impressions,
personal beliefs, and countless other tangible and intangible ways—aptly … termed … as the
‘Work product of the lawyer.’ Were such materials open to opposing counsel on mere demand,
much of what is now put down in writing would remain unwritten. An attorney’s thoughts,
heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would
inevitably develop in the giving of legal advice and in the preparation of cases for trial. The
effect on the legal profession would be demoralizing. And the interests of the clients and the
cause of justice would be poorly served.
We do not mean to say that all written materials obtained or prepared by an adversary’s
counsel with an eye toward litigation are necessarily free from discovery in all cases. Where
relevant and non-privileged facts remain hidden in an attorney’s file and where production of
those facts is essential to the preparation of one’s [an opposing lawyer’s] case, discovery may
properly be had. … And production might be justified where the witnesses are no longer
available or can be reached only with difficulty. Were production of written statements and
documents to be precluded under such circumstances, the liberal ideals of the depositiondiscovery portions of the Federal Rules of Civil Procedure would be stripped of much of their
meaning. But the general policy against invading the privacy of an attorney’s course of
preparation is so well recognized and so essential to an orderly working of our system of legal
procedure that a burden rests on the one who would invade that privacy to establish adequate
reasons to justify production through a … court order. That burden, we believe, is necessarily
implicit in the rules as now constituted.
… No attempt was made [by plaintiff’s counsel] to establish any reason why Fortenbaugh
should be forced to produce the written statements. There was only a naked, general demand for
these materials as of right and a finding by the District Court that no recognizable privilege was
involved. That was insufficient to justify discovery under these circumstances and the court
should have sustained the refusal of the tug owners and Fortenbaugh to produce.
But as to oral statements made by witnesses to Fortenbaugh, whether presently in the
form of his mental impressions …, we do not believe that any showing of necessity can be made
under the circumstances of this case so as to justify production [italics added]. Under ordinary
conditions, forcing an attorney to repeat or write out all that witnesses have told him and to
deliver the account to his adversary gives rise to grave dangers of inaccuracy and
untrustworthiness. No legitimate purpose is served by such production. The practice forces the
attorney to testify as to what he remembers or what he saw fit to write down regarding witnesses’
remarks. Such testimony could not qualify as evidence; and to use it for impeachment or
corroborative purposes would make the attorney much less an officer of the court and much
more an ordinary witness. The standards of the profession would thereby suffer.
Denial of production of this nature does not mean that … [h]e [adverse counsel becomes]
unduly hindered in the preparation of his case, in the discovery of facts or in his anticipation of
his opponents’ position. Searching interrogatories directed to Fortenbaugh and the tug owners,
production of written documents and statements upon a proper showing and direct interviews
with the witnesses themselves [and depositions may] all serve to reveal the facts in
232
Fortenbaugh’s possession to the fullest possible extent consistent with public policy. Petitioner’s
counsel frankly admits that he wants the oral statements only to help prepare himself to examine
witnesses and to make sure that he has overlooked nothing. That is insufficient under the
circumstances to permit him an exception to the policy underlying the privacy of Fortenbaugh’s
professional activities. If there should be a rare situation justifying production of these matters,
petitioner’s case is not of that type.
...
We therefore affirm the judgment of the Circuit Court of Appeals.
Affirmed.
Mr. Justice Jackson, concurring.
...
The real purpose and the probable effect of the practice ordered by the district court [file
turnover] would be to put trials on a level even lower than a ‘battle of wits.’ I can conceive of no
practice more demoralizing to the Bar than to require a lawyer to write out and deliver to his
adversary an account of what witnesses have told him. Even if his recollection were perfect, the
statement would be his language permeated with his inferences. Every one who has tried it
knows that it is almost impossible so fairly to record the expressions and emphasis of a witness
that when he testifies in the environment of the court and under the influence of the leading
question there will not be departures in some respects. Whenever the testimony of the witness
would differ from the ‘exact’ statement the lawyer had delivered, the lawyer’s statement would
be whipped out to impeach the witness. Counsel producing his adversary’s ‘inexact’ statement
could lose nothing by saying, ‘Here is a contradiction, gentlemen of the jury. I do not know
whether it is my adversary or his witness who is not telling the truth, but one is not.’ Of course, if
this practice were adopted, that scene would be repeated over and over again. The lawyer who
delivers such statements often would find himself branded a deceiver afraid to take the stand to
support his own version of the witness’s conversation with him, or else he will have to go on the
stand to defend his own credibility—perhaps against that of his chief witness, or possibly even
his client.
...
Having been supplied the names of the witnesses, petitioner’s lawyer gives no reason
why he cannot interview them himself. If an employee-witness refuses to tell his story, he, too,
may be examined under the Rules. He may be compelled on discovery as fully as on the trial to
disclose his version of the facts. But that is his own disclosure—it can be used to impeach him if
he contradicts it and such a deposition is not useful to promote an unseemly disagreement
between the witness and the counsel in the case.
...
Notes and Questions:
1. Fortenbaugh “gave an informal oral deposition explaining the circumstances under
which he had taken the [witness] statements.” That would not happen today. Attorneys oppose,
but do not depose, one another.
2. The “statements and mental impressions in issue in this case fall outside the scope of
the attorney-client privilege….” They were nevertheless deemed to be immune from discovery.
Under what theory? Are they always immune?
233
3. Do reports—made in the ordinary course of business, then obtained by counsel—
qualify as attorney work product?
4. Does the work product doctrine help or hinder what the court refers to as “[m]utual
knowledge of all the relevant facts gathered by both parties [that] is essential to proper
litigation…?”
5. Under what circumstances would the surviving tug boat sailors’ statements be
obtainable by adverse counsel? Normally, however, adverse counsel can readily obtain the
substantial equivalent. How so?
6. There are two categories of work product. What are they? How do they differ?
234
PERRY v. W. S. DARLEY & CO.
United States District Court, Eastern District, Wisconsin
54 F. R.D. 278 (1971)
Professor’s Note: Read this case with a view toward distinguishing the three types of witnesses
in civil litigation: (1); percipient (fact) witnesses; (2) expert consultants, who are employed by a
party—retained to assists the hiring lawyer assess the technical aspects of a case; and (3) experts
who have been subsequently designated to testify at trial—resulting in the waiver of conditional
work product protection.
I have inserted ten footnotes—which are not a part of the original opinion. If I took the
time to do so, you should take the time to digest them before class.
Court’s Opinion: Myron L. Gordon, District Judge.
The plaintiff Robert Perry, a volunteer fireman, seeks damages for injuries allegedly
sustained when he was struck by a fire truck as he attempted to activate a pump manufactured
and installed on the truck by the defendant.1 The defendant has moved for an order compelling
disclosure of the names of certain experts who examined the truck and pump shortly after the
accident; the refusal to disclose the names occurred during the oral deposition of Ward Johnson,
an employee of the workmen's compensation carrier for the fire department for which Mr. Perry
works.2
Counsel for the plaintiffs objected to disclosure of the experts’ names on the basis that
such information “constitutes both privileged communication and work product.” However, the
defendant argues in its brief that the experts are potential witnesses who “have knowledge or
relevant facts” and that it is entitled, pursuant to Rule 26(b)(1), to the “identity and location of
persons having knowledge of any discoverable matter.”3
The plaintiffs state that
1
This was a products liability case against a third party. The plaintiff could pursue only
administrative remedies against his employer.
2
The fire company’s insurance carrier was thus asserting the interests of the fire
company’s employee Perry.
3
Note that FRCP 26(b)(1) does not expressly distinguish between lay or expert witnesses
who may be “persons having [such] knowledge.”
235
It should be noted that the [defendant’s] question did not seek the
disclosure of the identity of experts which plaintiffs expect to call as witnesses4
upon the trial, which disclosure is explicitly required…. Federal Rule 26(b)(4)(A).
However, significantly, no similar requirement is made for the disclosure of
identity of experts not retained or specially employed for purposes of testifying at
trial. See Rule 26(b)(4)(B).5
...
In addition, the Advisory Committee note to Rule 26(b)(4) states, in part:
It should be noted that the subdivision does not address itself to the expert
whose information was not acquired in preparation for trial but rather because he
was an actor or viewer with respect to transactions or occurrences that are part of
the subject matter of the lawsuit. Such an expert should be treated as an ordinary
witness.
The plaintiffs concede … that they have a duty to disclose the identity of any expert
whom they expect to call as a witness at the trial.6 As to experts who have been engaged “in
anticipation of litigation or preparation for trial,” however, the plaintiffs point to the provisions
of Rule 26(b)(4)(B) to the effect that, when such experts are “not expected to be called as …
[witnesses] … at trial,” facts known or opinions held by them are discoverable
... only … upon a showing of exceptional circumstances under which it is
impracticable for the party seeking discovery to obtain facts or opinions on the
same subject by other means.7
...
Rule 26(b)(4)(B) makes no distinction between the identity of an expert and facts known
or opinions held by him, although … “Apparently one party can find out the names of experts
4
What kind of witness is the court referring to at this point?
5
What kind of “expert” is the court referring to at this point?
6
The retaining party thus designates that party’s consultant as an expert witness, thus
waving the former work product protection. Why would the retaining attorney want to do that?
7
What case is this passage referring to? What FRCP effectively codified that case?
236
specially retained by another party who are not to be called.”8 However, in an affidavit attached
to the defendant's motion, the attorney for the defendant states that, because the experts viewed
the fire truck well before the commencement of the present action, “this in and of itself is
sufficient cause to require the plaintiff to turn over not only the names of the expert or experts
but the reports of said expert or experts.”9
In my opinion, no showing of “exceptional circumstances” has been made by the
defendant in the case at bar, nor is there any evidence to indicate that the experts were actors or
viewers “with respect to [the] transactions or occurrences that are part of the subject matter of the
lawsuit.”10 Rule 26(b)(4) imposes a more rigorous standard upon the discovery of facts known
and opinions held by an expert than is imposed with regard to other witnesses; I am not
persuaded that such standard should be relaxed in the present case with regard to the identity of
the experts who viewed the fire truck shortly after the accident.
Therefore, it is ordered that the defendant's motion for an order compelling answers to
certain questions propounded to Ward Johnson be and hereby is denied.
Notes and Questions:
1. FRCP 26 does not clearly distinguish between the two types of expert. What are they?
8
But would that information not infringe upon the retaining party’s work product?
Should an adversary be permitted to: (a) inquire as to the identity of any consultant that the
retaining party decided not to use?; or (b) take the deposition of that unused consultant? Would it
matter if the party with the financial resources effectively monopolized the few potential experts
in the area, to keep the other party from having access to a local consultant?
9
Of the three possible types of witness, which would they be in this circumstance?
Should there be an exception for reports written, or people dispatched to the scene of an accident
in the ordinary course of business–which could overlap with doing so in anticipation of
litigation?
10
Assume that these Johnny-on-the-spot fire department employees, with the relevant
expertise are on the scene, and observe whether the allegedly defective pump was working/not
working; or that there was a grinding noise coming from that pump; or that they saw smoke
coming from that pump. Should the trial judge’s ruling be the same?
237
2. What pre-trial event triggers a change in status (for the same “expert”), from the one
type of expert to the other?
3. In an illustrative discussion, of the retained consultant-testifying expert distinction, by
the California Court of Appeals, in DeLuca v. State Fish Co., Inc., 217 Cal.App.4th 671, 688–
689 (2013):
If the expert is solely retained as a consulting expert, the attorney-client privilege
applies to communications made by the client or the attorney to the expert in order for the
expert to properly advise counsel. As noted above, the attorney-client privilege applies to
communications “to whom disclosure is reasonably necessary for the transmission of the
information or the accomplishment of the purpose for which the lawyer is consulted;” this
clearly includes communications to a consulting expert. Similarly, a consulting expert’s
[written] report, prepared at the attorney’s request and with the purpose of assisting the
attorney in trial preparation, constitutes work product, entitled to conditional protection
and barred from discovery in the absence of good cause.
The situation is different, however, with a testifying expert. As a general rule,
neither the attorney-client privilege nor the work product protection will prevent
disclosure of statements to, or reports from, a testifying expert. When a client calls that
party’s attorney to testify at trial to information the attorney could have only learned
through the attorney-client privilege, the privilege is waived. “It follows that the same
waiver exists when an agent of the attorney is to testify to matters that he could only have
learned because of the attorney-client relationship.” Once a testifying expert is designated
as a [deposition or trial] witness, the attorney-client privilege no longer applies, “because the
decision to use the expert as a witness manifests the client's consent to disclosure of the
information.” Similarly, when an expert witness is expected to testify, the expert’s report,
which was subject to the conditional work product protection, becomes discoverable, as
the mere fact that the expert is expected to testify generally establishes good cause for its
disclosure.
238
COBLE v. CITY OF WHITE HOUSE, TENNESSEE
United States Court of Appeals, Sixth Circuit
634 F.3d 865 (2011)
Bell, District Judge [delivered the unanimous opinion of the court].
Plaintiff Jerry T. Coble (“Coble”) appeals the district court’s entry of summary judgment
in favor of Officer Curtis Carney, Jr. on Coble’s claim under 42 U.S.C. § 1983 that Officer
Carney used excessive force against him during his arrest for drunk driving. The issue on appeal
is whether the district court erred in finding that there was no question of fact for trial because
Coble’s testimony regarding the force used was contradicted by a contemporaneous audio
recording. For the reasons that follow, we REVERSE the district court’s judgment.
I.
On April 6, 2007, at approximately 10:40 p.m., Officer Curtis Carney, Jr., was on patrol
for the City of White House Police Department, when a truck driven by Coble exited the parking
lot of Bob & Rhonda’s Sports Grill and pulled onto the highway in front of Officer Carney’s
patrol car. After seeing the truck cross the fog line three times, Officer Carney activated his incar video camera and flashing lights. Coble did not stop. He continued driving until he turned
into the driveway of his home and reached the end of his driveway.
City of White House, Tennessee jail area and patrol car
Public domain sources: <http://www.white
housetn.com/images/police2743.JP>
<http://www.cityofwhitehouse.com/images/
YourGovernment/Police%20Patrol%201>
Officer Carney pulled up behind him and exited his patrol car. Coble did not obey Officer
Carney’s preliminary commands or answer his questions. Instead, he argued with Officer
Carney, told him to get off his property, and began walking toward his house. When he failed to
obey Officer Carney’s command to stop, Officer Carney removed his chemical agent from its
holster, sprayed Coble, and performed a take-down maneuver, during which Coble sustained an
open fracture of his right ankle. After a struggle on the ground, Officer Carney, with the
assistance of Officer Scott Bilbrey, who had arrived on the scene, succeeded in bringing Coble’s
arms behind his back and handcuffing him. Once Coble was handcuffed, he did not offer any
further resistance.
The dispute that is at the heart of this appeal concerns what happened after Coble was
handcuffed. None of these events were captured on videotape because they did not occur in front
of the patrol car. However, even after Officer Carney and Coble were out of camera range,
sounds transmitted by the microphone worn by Officer Carney continued to be recorded. Coble
testified that Officer Carney pulled him up by the handcuffs, and, pushing him from behind,
239
walked him 7 or 8 steps on his broken ankle, leaving a 34-foot trail of blood. Coble testified that
Officer Carney would have known that his leg was broken because bones were sticking out of
Coble’s leg, his tennis shoe was laid over sideways, one of his legs was shorter than the other,
and he was screaming and calling Officer Carney names. Coble testified that when Officer
Carney finally stopped, he let go of the handcuffs and dropped Coble face-first on the concrete.
Officer Carney’s testimony differs markedly from Coble’s testimony. Officer Carney
testified that, after handcuffing Coble, he and Officer Bilbrey helped Coble to a standing position
and began walking with him toward the patrol car. After three or four steps, Coble said his leg
was broken. Officer Carney testified that he looked down, saw that Coble's leg was broken, and
immediately sat him down on the driveway.
Coble was transported by helicopter to a hospital. A blood sample collected from him at
2:10 a.m. on April 7, 2007, indicated a blood alcohol level of 0.16. Coble pled guilty to charges
of driving under the influence and resisting arrest.
Coble filed this action against Officer Carney, Officer Bilbrey, and the City of White
House, alleging claims of excessive force, false arrest, and failure to implement appropriate
policies under 42 U.S.C. § 1983, as well as state law claims of negligence, negligent infliction of
emotional distress, negligent training and supervision, reckless infliction of emotional distress,
and assault and battery. The claims against Officer Bilbrey were dismissed on stipulation of the
parties. Officer Carney and the City of White House filed motions for summary judgment. The
district court determined that Coble’s § 1983 claim for the excessive use of force before he was
handcuffed and brought under control was barred [citation omitted and italics added]. With
respect to Coble’s claim that Officer Carney used excessive force after he was handcuffed by
walking him on a broken ankle and dropping him face-first onto the ground [italics added], the
district court cited Scott v. Harris, 550 U.S. 372 (2007), in support of its determination that, in
light of the audio recording, it was not required to accept Coble’s version of the events.
Listening to the audiotape, no reasonable jury could find by a preponderance of the
evidence that Coble screamed during the first few steps while he was being escorted, that he
called Officer Carney names to get him to stop walking, or that Coble “splattered” on the
pavement [face down]. To the contrary, the audiotape reveals only the sound of shuffling bodies
as if the three men were walking, and Coble was silent. After a few moments, Coble cried out
that his leg was broken, and the shuffling stopped. An officer said, “Sit down!” There is no
audible noise that once could associate with a body dropping or “splattering” to the pavement.”
... The testimony of Officers Carney and Bilbrey square with the audiotape, while Coble’s
testimony does not. Therefore, under Scott, the Court need not adopt Coble’s version in ruling on
the motions for summary judgment.
The district court concluded that because Coble failed to generate a genuine issue of
material fact for trial on his constitutional claim, Officer Carney was entitled to summary
judgment.
The district court also concluded that Officer Carney was entitled to qualified immunity,
and that there was no evidence to support Coble’s claims against the City of White House for
failure to train or supervise. The district court accordingly granted the defendants’ motions for
summary judgment on Coble’s § 1983 claims, and declined to exercise supplemental jurisdiction
over Coble’s state-law claims. Coble appealed.
\
\
240
II.
Coble’s sole challenge on appeal is to the district court’s determination that Officer
Carney did not use excessive force after Coble was restrained in handcuffs.2
We review a district court order granting summary judgment de novo. “Summary
judgment is proper if the evidence, taken in the light most favorable to the nonmoving party,
shows that there are no genuine issues of material fact and that the moving party is entitled to a
judgment as a matter of law.”
A constitutional excessive force claim is analyzed under an “objective-reasonableness
standard, which depends on the facts and circumstance of each case viewed from the perspective
of a reasonable officer on the scene.” “The first step in assessing the constitutionality of [an
officer’s] actions is to determine the relevant facts.” Scott. To the extent there is disagreement
about the facts, we must review the evidence in the light most favorable to the plaintiff, and draw
all inferences in his favor.
Construing the facts on summary judgment in the light most favorable to the non-moving
party usually means adopting the plaintiff’s version of the facts. Scott. However, the Supreme
Court clarified in Scott that facts must be viewed in the light most favorable to the non-moving
party “only if there is a ‘genuine’ dispute as to those facts” (quoting Fed.R.Civ.P. 56(c)). In
Scott, the Supreme Court held that a police officer was entitled to summary judgment on a
motorist’s claim that the officer used excessive force in ramming his car after a high-speed
chase, notwithstanding the fact that the motorist and the officer gave conflicting testimony
regarding the events in question. In Scott, the conflicting testimony did not create an issue of fact
for trial because the record included a videotape capturing the police chase which clearly
contradicted the motorist's contention that he was driving carefully. As noted by the Supreme
Court:
When opposing parties tell two different stories, one of which is blatantly
contradicted by the record, so that no reasonable jury could believe it, a court should not
adopt that version of the facts for purposes of ruling on a motion for summary judgment.
In the summary judgment context, “appeals courts should not accept ‘visible fiction’ that
is ‘so utterly discredited by the record that no reasonable jury could have believed’ it.”
Coble contends that Scott and its progeny in the Sixth Circuit have limited Scott to cases
where the events were recorded on a videotape, and that it was improper for the district court to
extend Scott to a case involving an audio recording. ……………………………………….
There is nothing in the Scott analysis that suggests that it should be restricted to cases
involving videotapes. The Scott opinion does not focus on the characteristics of a videotape, but
on “the record.” (“When opposing parties tell two different stories, one of which is blatantly
contradicted by the record....”; “Respondent’s version of events is so utterly discredited by the
record....”; “At the summary judgment stage ... once we have determined the relevant set of facts
and drawn all inferences in favor of the nonmoving party to the extent supportable by the record
... the reasonableness of [the respondent’s] actions ... is a pure question of law” (emphasis
added)). Although we have not had occasion to apply the Scott analysis to audio recordings,
Coble has conceded that … his plea of guilty to resisting arrest barred any claim that Officer Carney used
excessive force against him before his arrest.
2
241
courts routinely look to Scott for guidance in determining whether the non-moving party’s
version of the events is so blatantly contradicted by objective evidence in the record that it fails
to create a genuine issue of material fact for trial, even in the absence of a videotape. …
Accordingly, our decision does not turn on whether it was proper for the district court to
consider the audio recording—it was—but on whether the district court properly found that
Coble’s testimony was “blatantly contradicted” by the audio recording in this case. We think not.
The district court found that the audio recording blatantly contradicted Coble’s deposition
testimony that he screamed during the first few steps while he was being escorted, and called
Officer Carney names to get him to stop walking. This finding was based upon the lack of any
audible screams or name-calling on the recording. The district court also found that no
reasonable jury could find that Coble “splattered” on the pavement because there was “no
audible noise that once could associate with a body dropping or ‘splattering’ to the pavement.”
The lack of sound on an audio recording cannot be reliably used to discount Coble’s testimony.
Many factors could affect what sounds are recorded, including the volume of the sound, the
nature of the activity at issue, the location of the microphone, whether the microphone was on or
off, and whether the microphone was covered. This case differs from Scott, where there were no
allegations or indications that the recording was doctored or altered in any way, or any
contention that what it depicted differed from what actually happened. Here, in contrast to the
plaintiff in Scott, Coble does not merely characterize the recording differently. Rather, Coble
insists that the facts differed from what was recorded. Coble testified that he screamed, that he
called Officer Carney names, that he was forced to walk on his broken ankle, and that he was
dropped face-first on the ground. His testimony is not “blatantly contradicted” by the lack of
corroborating sound on the audio recording. A reasonable jury could believe Coble’s version of
the events. …………………………………………………………………………………………
In addition, the recording does not indicate when Officer Carney became aware of
Coble’s broken ankle, or how far he made Coble walk after he became aware of the injury. Facts
that are not blatantly contradicted by the audio recording remain entitled to an interpretation
most favorable to the non-moving party. Coble’s testimony that Officer Carney would have
known that his ankle was broken is not “so utterly discredited” by the audio recording, and must
be construed in the light most favorable to Coble. ………………………………………….
Even if part of Coble’s testimony is blatantly contradicted by the audio recording, that
does not permit the district court to discredit his entire version of the events. We allow cases to
proceed to trial even though a party’s evidence is inconsistent, because “[i]n reviewing a
summary judgment motion, [judicial, as opposed to jury] credibility judgments and weighing of
the evidence are prohibited.” … ………………………………………………………………..
We cannot say that Coble’s version of the events was so utterly discredited by the record
that no reasonable jury could believe it. Accordingly, there is a genuine question of material fact
as to whether Officer Carney used excessive force, and the district court erred by granting
summary judgment for Office Carney. ………………………………………………………….
. . . …………………………………………….
IV. CONCLUSION ……………………………………..
Because there is a genuine issue of material fact as to whether Officer Carney used
excessive force after Coble was handcuffed, we REVERSE the order of the district court
granting summary judgment to Officer Carney and REMAND for further proceedings consistent
with this opinion.
242
Notes and Questions: ……………………………………
1. What is the moving party’s basic argument in all summary judgment motions? See
Rule 56(a). ………………………………………………………………………………………….
2. There was an obvious disagreement about the factual circumstances just after the
arrest. What approach does a court employ, when considering such summary judgment evidence,
given the conflicting inferences one could draw from the factual evidence? ………………….....
3. When there is a blatant contradiction in the facts adduced for summary judgment
motion, does the court necessarily deny summary judgment? ……………………………………
4. How does a summary judgment motion differ from trial?
243
ADICKES v. S. H. KRESS & CO.
United States Supreme Court
398 U.S. 144 (1970)
Mr. Justice Harlan delivered the [6-2, with two concurring] opinion[s] of the Court.
Petitioner, Sandra Adickes, a white school teacher from New York, brought this suit in
the United States District Court for the Southern District of New York against respondent S. H.
Kress & Co. (‘Kress’) to recover damages under 42 U.S.C. s[ection] 19831 for an alleged
violation of her constitutional rights under the Equal Protection Clause of the Fourteenth
Amendment [§1]. The suit arises out of Kress’ refusal to serve lunch to Miss Adickes at its
restaurant facilities in its Hattiesburg, Mississippi, store on August 14, 1964, and Miss Adickes’
subsequent arrest upon her departure from the store by the Hattiesburg police on a charge of
vagrancy. At the time of both the refusal to serve and the arrest, Miss Adickes was with six
young people, all Negroes, who were her students in a Mississippi ‘Freedom School’ where she
was teaching that summer. Unlike Miss Adickes, the students were offered service, and were not
arrested.
Sandra Adickes, former teacher at Hattiesburg, Mississippi Freedom School
Source: <http://nathenson.org/aalscivpro/wp-content/uploads/2011/08/Adickes-300x183.jpg>
Reprinted with permission of the Association of American Law Schools Civil Procedure webpage owner
Petitioner’s complaint had two counts, … each alleging that Kress had deprived her of
the right under the Equal Protection Clause of the Fourteenth Amendment not to be
discriminated against on the basis of race. The first count charged that Miss Adickes had been
refused service by Kress because she was a ‘Caucasian in the company of Negroes.’ … [T]he
District [trial] Court directed a verdict in favor of respondent [Kress]. A divided panel of the
Court of Appeals affirmed …
The second count of her complaint, alleging that both the refusal of service and her
subsequent arrest were the product of a conspiracy between Kress and the Hattiesburg police,
was dismissed before trial on a motion for summary judgment. The District Court ruled that
… ‘Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State of
Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction
thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be
liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.’ ……
1
244
petitioner had ‘failed to allege any facts from which a conspiracy might be inferred’ [which was]
… unanimously affirmed by the Court of Appeals.
...
I
Briefly stated, the conspiracy count of petitioner’s complaint made the following
allegations: While serving as a volunteer teacher at a ‘Freedom School’ for Negro children in
Hattiesburg, Mississippi, petitioner went with six of her students to the Hattiesburg Public
Library…. The librarian refused to allow the Negro students to use the library, and asked them to
leave. Because they did not leave, the librarian called the Hattiesburg chief of police who told
petitioner and her students that the library was closed, and ordered them to leave. From the
library, petitioner and the students proceeded to respondent’s store where they wished to eat
lunch. According to the complaint, after the group sat down to eat, a policeman came into the
store ‘and observed (Miss Adickes) in the company of the Negro students.’ A waitress then came
to the booth where petitioner was sitting, took the orders of the Negro students, but refused to
serve petitioner because she was a white person ‘in the company of Negroes.’ The complaint
goes on to allege that after this refusal of service, petitioner and her students left the Kress store.
When the group reached the sidewalk outside the store, ‘the Officer of the Law who had
previously entered (the) store’ arrested petitioner on a groundless charge of vagrancy and took
her into custody.
...
A. CONSPIRACIES BETWEEN PUBLIC OFFICIALS AND
PRIVATE PERSONS—GOVERNING PRINCIPLES
The terms of s[ection] 1983 make plain two elements that are necessary for recovery.
First, the plaintiff must prove that the defendant has deprived him of a right secured by the
‘Constitution and laws’ of the United States. Second, the plaintiff must show that the defendant
deprived him of this constitutional right ‘under color of any statute, ordinance, regulation,
custom, or usage, of any State or Territory.’ This second element requires that the plaintiff show
that the defendant acted ‘under color of law.’
. . . Although this is a lawsuit against a private party, not the State or one of its officials,
our cases make clear that petitioner will have made out a violation of her Fourteenth Amendment
rights and will be entitled to relief under s[ection] 1983 if she can prove that a Kress employee,
in the course of employment, and a Hattiesburg policeman somehow reached an understanding to
deny Miss Adickes service in The Kress store, or to cause her subsequent arrest because she was
a white person in the company of Negroes.
...
B. SUMMARY JUDGMENT
We now proceed to consider whether the District Court erred in granting summary
judgment on the conspiracy count. In granting respondent’s motion, the District Court simply
stated that there was ‘no evidence in the complaint or in the affidavits and other papers from
which a ‘reasonably-minded person’ might draw an inference of conspiracy.’ Our own scrutiny
of the factual allegations of petitioner’s complaint, as well as the material found in the affidavits
and depositions presented by Kress to the District Court, however, convinces us that summary
judgment was improper here, for we think respondent failed to carry its burden of showing the
absence of any genuine issue of fact. Before explaining why this is so, it is useful to state the
factual arguments, made by the parties concerning summary judgment, and the reasoning of the
courts below.
245
In moving for summary judgment, Kress argued that ‘uncontested facts’ established that
no conspiracy existed between any Kress employee and the police. To support this assertion,
Kress pointed first to the statements in the deposition of the store manager (Mr. Powell) that (a)
he had not communicated with the police, and that (b) he had, by a prearranged tacit signal,
ordered the food counter supervisor to see that Miss Adickes was refused service only because
he was fearful of a riot in the store by customers angered at seeing a ‘mixed group’ of whites and
blacks eating together. Kress also relied on affidavits from the Hattiesburg chief of police,11 and
the two arresting officers,12 to the effect that store manager Powell had not requested that
petitioner be arrested. Finally, Kress pointed to the statements in petitioner’s own deposition that
she had no knowledge of any communication between any Kress employee and any member of
the Hattiesburg police, and was relying on circumstantial evidence to support her contention that
there was an arrangement between Kress and the police.
Petitioner, in opposing summary judgment, pointed out that respondent had failed in its
moving papers to dispute the allegation in petitioner’s complaint, a statement at her deposition, 13
and an unsworn statement by a Kress employee,14 all to the effect that there was a policeman in
the store at the time of the refusal to serve her, and that this was the policeman who subsequently
arrested her. Petitioner argued that although she had no knowledge of an agreement between
Kress and the police, the sequence of events created a substantial enough possibility of a
conspiracy to allow her to proceed to trial, especially given the fact that the non-circumstantial
evidence of the conspiracy could only come from adverse witnesses. Further, she submitted an
affidavit specifically disputing the manager’s assertion that the situation in the store at the time
11
The affidavit of the chief of police, who it appears was not present at the arrest, states in relevant part:
‘Mr. Powell had made no request of me to arrest Miss Sandra Adickes or any other person, in fact, I did not know
Mr. Powell personally until the day of this statement. … Mr. Powell and I had not discussed the arrest of this person
until the day of this statement and we had never previously discussed her in any way.’
12
The affidavits of Sergeant Boone and Officer Hillman each state, in identical language: ‘I was contacted
… by … owners of S. H. Kress and Company, who requested that I make a statement concerning [an] alleged
conspiracy in connection with the aforesaid arrest. This arrest was made on the public streets of Hattiesburg,
Mississippi, and was an officers discretion arrest. I had not consulted with Mr. G. T. Powell, Manager of S. H. Kress
and Company in Hattiesburg, and did not know his name until this date. No one at the Kress store asked that the
arrest be made and I did not consult with anyone prior to the arrest.’
13
When asked whether she saw any policeman in the store up to the time of the refusal of service, Miss
Adickes answered: ‘My back was to the door, but one of my students saw a policeman come in.’ She went on to
identify the student as ‘Carolyn.’ At the trial, Carolyn Moncure, one of the students who was with petitioner,
testified that ‘about five minutes’ after the group had sat down and while they were still waiting for service, she saw
a policeman come in the store. She stated: ‘(H)e came in the store, my face was facing the front of the store, and he
came in the store and he passed, and he stopped right at the end of our booth, and he stood up and he looked around
and he smiled, and he went to the back of the store, he came right back and he left out.’ This testimony was
corroborated by that of Dianne Moncure, Carolyn’s sister, who was also part of the group. She testified that while
the group was waiting for service, a policeman entered the store, stood ‘for awhile’ looking at the group, and then
‘walked to the back of the store.’
14
During discovery, respondent gave to petitioner an unsworn statement by Miss Irene Sullivan, a checkout girl. In this statement Miss Sullivan said that she had seen Patrolman Hillman come into the store ‘(s)hortly after
12:00 noon,’ while petitioner's group was in the store. She said that he had traded a ‘hello greeting’ with her, and
then walked past her check-out counter toward the back of the store ‘out of (her) line of vision.’ She went on: ‘A
few minutes later Patrolman Hillman left our store by the northerly front door just slightly ahead of a group
composed of several Negroes accompanied by a white woman. As Hillman stepped onto the sidewalk outside our
store the police car pulled across the street and into an alley that is alongside our store. The police car stopped and
Patrolman Hillman escorted the white woman away from the Negroes and into the police car.’ …………………….
246
of the refusal was ‘explosive,’ thus creating an issue of fact as to what his motives might have
been in ordering the refusal of service.
We think that on the basis of this record, it was error to grant summary judgment. As the
moving party, respondent had the burden of showing the absence of a genuine issue as to any
material fact, and for these purposes the material it lodged must be viewed in the light most
favorable to the opposing party. Respondent here did not carry its burden because of its failure to
foreclose the possibility [i.e., via store employees] that there was a policeman in the Kress store
while petitioner was awaiting service, and that this policeman reached an understanding with
some Kress employee that petitioner not be served.
...
Given these unexplained gaps in the materials submitted by respondent, we conclude that
respondent failed to fulfill its initial burden of demonstrating what is a critical element in this
aspect of the case—that there was no policeman in the store. If a policeman were present, we
think it would be open to a jury, in light of the sequence that followed, to infer from the
circumstances that the policeman and a Kress employee had a ‘meeting of the minds' and thus
reached an understanding that petitioner should be refused service. Because ‘(o)n summary
judgment the inferences to be drawn from the underlying facts contained in (the moving party’s)
materials must be viewed in the light most favorable to the party opposing the motion,’ we think
respondent’s failure to show there was no policeman in the store requires reversal.
Pointing to Rule 56(e),18 … respondent argues that it was incumbent on petitioner to
come forward with an affidavit properly asserting the presence of the policeman in the store, if
she were to rely on that fact to avoid summary judgment. Respondent notes in this regard that
none of the materials upon which petitioner relied met the requirements of Rule 56(e).19
This argument [while true] does not withstand scrutiny, however, for … the burden of the
moving party under Rule 56(c) [is] to show initially the absence of a genuine issue concerning
any material fact. … And, in a comment directed specifically to a contention like respondent’s,
the Committee stated that ‘(w)here the evidentiary matter in support of the motion does not
establish the absence of a genuine issue, summary judgment must be denied even if no opposing
evidentiary matter is presented’ [italics added]. Because respondent did not meet its initial
burden of establishing the absence of a policeman in the store, petitioner here was not required to
come forward with suitable opposing affidavits.
If respondent had met its initial burden by, for example, submitting affidavits from the
policemen denying their presence in the store at the time in question, Rule 56(e) would then have
…‘When a motion for summary judgment is made and supported as provided in this rule, an adverse
party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as
otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does
not so respond, summary judgment, if appropriate, shall be entered against him.’
19
Petitioner’s statement at her deposition, see n. 13, supra, was, of course, hearsay; and the statement of
18
Miss Sullivan, see n. 14, supra, was unsworn. And, the rule specifies that reliance on allegations in the complaint is
not sufficient.
247
required petitioner to have done more than [effectively to] simply rely on the contrary allegation
in her complaint. To have avoided conceding this fact for purposes of summary judgment,
petitioner would have had to come forward with either (1) the affidavit of someone who saw the
policeman in the store or (2) an affidavit under Rule 56(f) explaining why at that time it was
impractical to do so. Even though not essential here to defeat respondent’s motion, the
submission of such an affidavit would have been the preferable course for petitioner’s counsel to
have followed. As one commentator has said:
It has always been perilous for the opposing party neither to proffer any
countering evidentiary materials nor file a 56(f) affidavit. And the peril rightly
continues…. Yet the party moving for summary judgment [nevertheless] has the burden
to show that he is entitled to judgment under established principles; and if he does not
discharge that burden then he is not entitled to judgment [because the burden cannot be
shifted to the adverse party]. No defense to an insufficient showing is required.
...
The judgment of the Court of Appeals is reversed, and the case is remanded to that court
for further proceedings [i.e., trial] consistent with this opinion.
It is so ordered.
...
Mr. Justice Black, concurring in the judgment.
...
Summary judgments may be granted only when ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue [now “dispute”] as to any material fact….’ Fed.Rule Civ.Proc. 56(c). …
The existence or nonexistence of a conspiracy is essentially a factual issue that the jury,
not the trial judge, should decide. In this case petitioner may have had to prove her case by
impeaching the store’s witnesses and appealing to the jury to disbelieve all that they said was
true in the affidavits. The right to confront, cross-examine and impeach adverse witnesses is one
of the most fundamental rights sought to be preserved by the Seventh Amendment provision for
jury trials in civil cases. The advantages of trial before a live jury with live witnesses, and all the
possibilities of considering the human factors, should not be eliminated by substituting trial by
affidavit and the sterile bareness of summary judgment. ‘It is only when the witnesses are present
and subject to cross-examination that their credibility and the weight to be given their testimony
can be appraised. Trial by affidavit is no substitute for trial by jury which so long has been the
hallmark of ‘even handed justice.’
...
Mr. Justice Brennan, concurring in part and dissenting in part [provided for historical
perspective].
...
Title 42 U.S.C. s[ection] 1983 derives from s[ection] 1 of the Civil Rights Act of 1871
entitled, ‘An Act to enforce the Provisions of the Fourteenth Amendment to the Constitution of
the United States, and for other Purposes.’ The 1871 Act, popularly known as the ‘Ku Klux Klan
Act,’ was, as its legislative history makes absolutely clear, a response to the outrages committed
by the Klan in many parts of the South.
...
248
Stirred to action by the wholesale breakdown of protection of civil rights in the South,
Congress carried to completion the creation of a comprehensive scheme of remedies—civil,
criminal, and military16—for the protection of constitutional rights from all major interference.
...
The history of this scheme of remedies for the protection of civil rights was, until very
recently, one of virtual nullification by this Court. Key provisions were declared unconstitutional
or given an unduly narrow construction wholly out of keeping with their purposes.
...
Notes and Questions:
1. On what evidence did the court’s analysis focus? Was it the plaintiff’s complaint? May
the pleadings be considered? If so, what role do they play?
2. Rule 56 envisions the respective parties submitting affidavits for, and in opposition to,
summary judgment. Here, Ms. Adikes did not have any (trial rules of evidence) admissible
affidavits to submit in opposition to Kress’s motion. So why did the Supreme Court reverse the
trial court’s granting of summary judgment?
3. Justice Black’s concurring opinion states: “The existence or nonexistence of a
conspiracy is essentially a factual issue that the jury, not the trial judge, should decide.” Does
this mean that conspiracy cases can never be decided via summary judgment?
4. A case may turn upon the motive of the one or more of the parties. Success in such an
action would then require proof that the defendant intended to deprive the plaintiff of her civil
rights. FRCP 56(c)(4) requires that affidavits be based on personal knowledge. If you were the
lawyer for plaintiff Adikes—and alleging an intent to deprive your client of her civil rights, i.e.,
to impede her from freely associating with her students—would you have been able to produce
an affidavit attesting to the personal knowledge of the Kress manager, or police, as to their
motive for the arrest? If you took their depositions, and they said that they did not intend to so
deprive Ms Adikes of her rights, would those sworn statements thus entitle the defendant to
summary judgment?
16
The military remedy, designed to become available when the other remedies were inadequate, was
created by s[ection] 3 of the 1871 Act, now 10 U.S.C. s[ection] 333. …
249
CELOTEX CORP. v. CATRETT
United States Supreme Court
477 U.S. 317 (1986)
Justice Rehnquist delivered the [5-4 majority] opinion of the Court.
The United States District Court for the District of Columbia granted the motion of
petitioner Celotex Corporation for summary judgment against respondent Catrett because the
latter was unable to produce evidence in support of her allegation in her wrongful-death
complaint that the decedent had been exposed to petitioner’s asbestos products. A divided panel
of the Court of Appeals for the District of Columbia Circuit reversed, however, holding that
petitioner’s failure to support its motion with evidence tending to negate such exposure
precluded the entry of summary judgment in its favor [italics added]. We … now reverse the
decision of the District of Columbia Circuit.
Respondent commenced this lawsuit … alleging that the death in 1979 of her husband,
Louis H. Catrett, resulted from his exposure to products containing asbestos manufactured or
distributed by 15 named corporations. Respondent’s complaint sounded in negligence, breach of
warranty, and strict liability. … [T]he remaining 13 [dendants], including petitioner, filed
motions for summary judgment. Petitioner’s motion … argued that summary judgment was
proper because respondent had “failed to produce evidence that any [Celotex] product ... was the
proximate cause of the injuries alleged…” In particular, petitioner noted that respondent had
failed to identify, in answering interrogatories specifically requesting such information, any
witnesses who could testify about the decedent’s exposure to petitioner’s asbestos products. In
response to petitioner’s summary judgment motion, respondent then produced three documents
which she claimed “demonstrate that there is a genuine material factual dispute” as to whether
the decedent had ever been exposed to petitioner’s asbestos products. The three documents
included a transcript of a deposition of the decedent, a letter from an official of one of the
decedent’s former employers whom petitioner planned to call as a trial witness, and a letter from
an insurance company to respondent’s attorney, all tending to establish that the decedent had
been exposed to petitioner’s asbestos products in Chicago during 1970-1971. Petitioner, in turn,
argued that the three documents were inadmissible hearsay and thus could not be considered in
opposition to the summary judgment motion.
… The [trial] court explained that it was granting petitioner’s summary judgment motion
because “there [was] no showing that the plaintiff was exposed to the defendant Celotex’s
product in the District of Columbia or elsewhere within the statutory period.” … The majority of
the Court of Appeals held that petitioner’s summary judgment motion was rendered “fatally
defective” by the fact that petitioner “made no effort to adduce any evidence, in the form of
affidavits or otherwise, to support its motion.” According to the majority, Rule 56(e) of the
Federal Rules of Civil Procedure, and this Court’s decision in Adickes v. S.H. Kress & Co.,
establish that “the party opposing the motion for summary judgment bears the burden of
responding only after the moving party has met its burden of coming forward with proof of the
absence of any genuine issues of material fact.” ... The dissenting judge argued that “[t]he
majority errs in supposing that a party seeking summary judgment must always make an
affirmative evidentiary showing, even in cases where there is not a triable, factual dispute.”
According to the dissenting judge, the majority’s decision “undermines the traditional authority
of trial judges to grant summary judgment in meritless cases.”
We think that the position taken by the majority of the Court of Appeals is inconsistent
with the standard for summary judgment set forth in Rule 56(c) of the Federal Rules of Civil
250
Procedure. Under Rule 56(c), summary judgment is proper “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” In our view, the plain language of Rule 56(c) mandates the entry of
summary judgment, after adequate time for discovery and upon motion, against a party who fails
to make a showing sufficient to establish the existence of an element essential to that party’s
case, and on which that party will bear the burden of proof at trial. In such a situation, there can
be “no genuine issue as to any material fact,” since a complete failure of proof concerning an
essential element of the nonmoving party’s case necessarily renders all other facts immaterial.
The moving party is “entitled to a judgment as a matter of law” because the nonmoving party has
failed to make a sufficient showing on an essential element of her case with respect to which she
has the burden of proof....
Of course, a party seeking summary judgment always bears the initial responsibility of
informing the district court of the basis for its motion, and identifying those portions of “the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any,” which it believes demonstrate the absence of a genuine issue of material fact.
But unlike the Court of Appeals, we find no express or implied requirement in Rule 56 that the
moving party support its motion with affidavits or other similar materials negating the
opponent’s claim. On the contrary, Rule 56(c), which refers to “the affidavits, if any” …
suggests the absence of such a requirement. And if there were any doubt about the meaning of
Rule 56(c) in this regard, such doubt is clearly removed by Rules 56(a) and (b), which provide
that claimants and defendants, respectively, may move for summary judgment “ with or without
supporting affidavits….” The import of these subsections is that, regardless of whether the
moving party accompanies its summary judgment motion with affidavits, the motion may, and
should, be granted so long as whatever is before the district court demonstrates that the standard
for the entry of summary judgment, as set forth in Rule 56(c), is satisfied. One of the principal
purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims
or defenses, and we think it should be interpreted in a way that allows it to accomplish this
purpose.
Respondent argues, however, that Rule 56(e), by its terms, places on the nonmoving
party the burden of coming forward with rebuttal affidavits, or other specified kinds of materials,
only in response to a motion for summary judgment “made and supported as provided in this
rule.” According to respondent’s argument, since petitioner did not “support” its motion with
affidavits, summary judgment was improper in this case. But as we have already explained, a
motion for summary judgment may be made pursuant to Rule 56 “with or without supporting
affidavits.”a In cases like the instant one, where the nonmoving party will bear the burden of
proof at trial on a dispositive issue, a summary judgment motion may properly be made in
reliance solely on the “pleadings, depositions, answers to interrogatories, and admissions on
file.” Such a motion, whether or not accompanied by affidavits, will be “made and supported as
provided in this rule,” and Rule 56(e) therefore requires the nonmoving party to go beyond the
pleadings and by her own affidavits, or by the “depositions, answers to interrogatories, and
admissions on file,” designate “specific facts showing that there is a genuine issue for trial.”
...
The Court of Appeals in this case felt itself constrained, however, by language in our
decision in Adickes v. S.H. Kress & Co. There we held that summary judgment had been
a
The current version of Rule 56 does not include this language.
251
improperly entered in favor of the defendant restaurant in an action brought under 42 U.S.C. §
1983. In the course of its opinion, the Adickes Court said that “both the commentary on and the
background of the 1963 amendment conclusively show that it was not intended to modify the
burden of the moving party ... to show initially the absence of a genuine issue concerning any
material fact.” We think that this statement is accurate in a literal sense, since we fully agree with
the Adickes Court that the 1963 amendment to Rule 56(e) was not designed to modify the burden
of making the showing generally required by Rule 56(c). It also appears to us that, on the basis of
the showing before the Court in Adickes, the motion for summary judgment in that case should
have been denied. But we do not think the Adickes language quoted above should be construed to
mean that the burden is on the party moving for summary judgment to produce evidence
showing the absence of a genuine issue of material fact, even with respect to an issue on which
the nonmoving party bears the burden of proof. Instead, as we have explained, the burden on the
moving party may be discharged by “showing”—that is, pointing out to the district court—that
there is an absence of evidence to support the nonmoving party’s case.
The last two sentences of Rule 56(e) were added, as this Court indicated in Adickes, to
disapprove a line of cases allowing a party opposing summary judgment to resist a properly
made motion by reference only to its pleadings. While the Adickes Court was undoubtedly
correct in concluding that these two sentences were not intended to reduce the burden of the
moving party, it is also obvious that they were not adopted to add to that burden. Yet that is
exactly the result which the reasoning of the Court of Appeals would produce; in effect, an
amendment to Rule 56(e) designed to facilitate the granting of motions for summary judgment
would be interpreted to make it more difficult to grant such motions. Nothing in the two
sentences themselves requires this result, for the reasons we have previously indicated, and we
now put to rest any inference that they do so.
...
Respondent commenced this action in September 1980, and petitioner’s motion was filed
in September 1981. The parties had conducted discovery, and no serious claim can be made that
respondent was in any sense “railroaded” by a premature motion for summary judgment. Any
potential problem with such premature motions can be adequately dealt with under Rule 56(f),
which allows a summary judgment motion to be denied, or the hearing on the motion to be
continued, if the nonmoving party has not had an opportunity to make full discovery.
The Federal Rules of Civil Procedure have for almost 50 years authorized motions for
summary judgment upon proper showings of the lack of a genuine, triable issue of material fact.
Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but
rather as an integral part of the Federal Rules as a whole, which are designed “to secure the just,
speedy and inexpensive determination of every action.” Before the shift to “notice pleading”
accomplished by the Federal Rules,b motions to dismiss a complaint or to strike a defense were
the principal tools by which factually insufficient claims or defenses could be isolated and
prevented from going to trial with the attendant unwarranted consumption of public and private
resources. But with the advent of “notice pleading,” the motion to dismiss seldom fulfills this
function any more, and its place has been taken by the motion for summary judgment. Rule 56
must be construed with due regard not only for the rights of persons asserting claims and
defenses that are adequately based in fact to have those claims and defenses tried to a jury, but
b
Given the Iqbal pleadings directive (plausible, not just possible claim), the Court has presumably made
summary judgment an even more welcomed arrow in the litigation quiver.
252
also for the rights of persons opposing such claims and defenses to demonstrate in the manner
provided by the Rule, prior to trial, that the claims and defenses have no factual basis.
The judgment of the Court of Appeals is accordingly reversed, and the case is remanded
for further proceedings consistent with this opinion.
It is so ordered.
...
Justice Brennan, with whom The Chief Justice and Justice Blackmun join, dissenting.
… The Court clearly rejects the ruling of the Court of Appeals that the defendant must
provide affirmative evidence disproving the plaintiff’s case. Beyond this, however, the Court has
not clearly explained what is required of a moving party seeking summary judgment on the
ground that the nonmoving party cannot prove its case. This lack of clarity is unfortunate: district
courts must routinely decide summary judgment motions, and the Court’s opinion will very
likely create confusion. For this reason, even if I agreed with the Court’s result, I would have
written separately to explain more clearly the law in this area. However, because I believe that
Celotex did not meet its burden of production under Federal Rule of Civil Procedure 56, I
respectfully dissent from the Court’s judgment.
I
Summary judgment is appropriate where the Court is satisfied “that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of
law.” Fed.Rule Civ.Proc. 56(c).c The burden of establishing the nonexistence of a “genuine
issue” is on the party moving for summary judgment. …This burden has two distinct
components: an initial burden of production [i.e., affidavits, etc.] , which shifts to the nonmoving
party if satisfied by the moving party; and an ultimate burden of persuasion [i.e., whether there is
a genuine dispute], which always remains on the moving party. The court need not decide
whether the moving party has satisfied its ultimate burden of persuasion2 unless and until the
Court finds that the moving party has discharged its initial burden of production. Adickes v. S.H.
Kress & Co.; 1963 Advisory Committee’s Notes on Fed.Rule Civ.Proc. 56(e).
The burden of production imposed by Rule 56 requires the moving party to make a prima
facie showing that it is entitled to summary judgment. The manner in which this showing can be
made depends upon which party will bear the burden of persuasion on the challenged claim at
trial. If the moving party [Celotex] will bear the burden of persuasion at trial, that party must
support its motion with credible evidence—using any of the materials specified in Rule 56(c)—
that would entitle it to a directed verdict if not controverted at trial. Such an affirmative showing
[only then] shifts the burden of production to the party opposing the motion and requires that
party either to produce evidentiary materials that demonstrate the existence of a “genuine issue”
for trial or to submit an affidavit requesting additional time for discovery.
If the burden of persuasion at trial would be on the non-moving party [Cartett], the party
moving for summary judgment may satisfy Rule 56’s burden of production in either of two
ways. First, the moving party may submit affirmative evidence that negates an essential element
Rule 56(c) later substituted “dispute” for “issue.” This was supposedly a non-substantive editorial change.
The burden of persuasion imposed on a moving party by Rule 56 is a stringent one. Summary judgment
should not be granted unless it is clear that a trial is unnecessary, and any doubt as to the existence of a genuine
issue for trial should be resolved against the moving party, Adickes v. S.H. Kress & Co. In determining whether a
moving party has met its burden of persuasion, the court is obliged to take account of the entire setting of the case
and must consider all papers of record as well as any materials prepared for the motion. … [Thus,] “[i]f ... there is
any evidence in the record from any source from which a reasonable inference in the [nonmoving party’s] favor may
be drawn, the moving party simply cannot obtain a summary judgment....”
c
2
253
of the nonmoving party’s claim [italics added]. Second, the moving party may demonstrate to the
Court that the nonmoving party’s evidence is insufficient to establish an essential element of the
nonmoving party’s claim [italics added]. If the nonmoving party cannot muster sufficient
evidence to make out its claim, a trial would be useless and the moving party is entitled to
summary judgment as a matter of law.
Where the moving party adopts this second option and seeks summary judgment on the
ground that the nonmoving party—who will bear the burden of persuasion at trial—has no
evidence, the mechanics of discharging Rule 56’s burden of production are somewhat trickier.
Plainly, a conclusory assertion that the nonmoving party has no evidence is insufficient. … Such
a “burden” of production is no burden at all and would simply permit summary judgment
procedure to be converted into a tool for harassment. Rather, as the Court confirms, a party who
moves for summary judgment on the ground that the nonmoving party has no evidence must
affirmatively show the absence of evidence in the record [italics added]. This may require the
moving party to depose the nonmoving party’s witnesses or to establish the inadequacy of
documentary evidence. If there is literally no evidence in the record, the moving party may
demonstrate this by reviewing for the court the admissions, interrogatories, and other exchanges
between the parties that are in the record. Either way, however, the moving party must
affirmatively demonstrate that there is no evidence in the record to support a judgment for the
nonmoving party.
...
II
I do not read the Court’s opinion to say anything inconsistent with or different than the
preceding discussion. My disagreement with the Court concerns the application of these
principles to the facts of this case.
Defendant Celotex sought summary judgment on the ground that plaintiff had “failed to
produce” any evidence that her decedent had ever been exposed to Celotex asbestos. Celotex
supported this motion with a two-page “Statement of Material Facts as to Which There is No
Genuine Issue” and a three-page “Memorandum of Points and Authorities” which asserted that
the plaintiff had failed to identify any evidence in responding to two sets of interrogatories
propounded by Celotex and that therefore the record was “totally devoid” of evidence to support
plaintiff's claim.
Approximately three months earlier, Celotex had filed an essentially identical motion.
Plaintiff responded to this earlier motion by producing three pieces of evidence which she
claimed “[a]t the very least ... demonstrate that there is a genuine factual dispute for trial:” (1) a
letter from an insurance representative of another defendant describing asbestos products to
which plaintiff’s decedent had been exposed; (2) a letter from T.R. Hoff, a former supervisor of
decedent, describing asbestos products to which decedent had been exposed; and (3) a copy of
decedent’s deposition from earlier workmen’s compensation proceedings. Plaintiff also
apparently indicated at that time that she intended to call Mr. Hoff as a witness at trial.
Celotex subsequently withdrew its first motion for summary judgment. However, as a
result of this motion, when Celotex filed its second summary judgment motion, the [full] record
did contain evidence—including at least one witness—supporting plaintiff’s claim. Indeed,
counsel for Celotex admitted to this Court at oral argument that Celotex was aware of this
evidence and of plaintiff’s intention to call Mr. Hoff as a witness at trial when the second
summary judgment motion was filed. Moreover, plaintiff’s response to [the] Celotex’ second
motion pointed to this evidence—noting that it had already been provided to counsel for Celotex
254
in connection with the first motion-and argued that Celotex had failed to “meet its burden of
proving that there is no genuine factual dispute for trial.”
...
Notes and Questions:………………………………………
1. Why did the District of Columbia Circuit [intermediate appellate court] hold that
summary judgment against Mrs. Catrett was improper? The Supreme Court’s ensuing reversal
means that there are now two methods for achieving summary judgment in federal court—
exemplified by Adikes and Celotex. What are they?
2. Would the result have been the same, if the Celotext motion had been made, say, six to
nine months earlier (i.e., several months after plaintiff filed her lawsuit)? As noted in Greater
Baltimore Center for Pregnancy Concerns, Inc. v. Mayor and City Council of Baltimore,
721 F.3d 264, 280 (2013):
Chief among its errors was the district court's award of summary judgment to the
Center without allowing the City any discovery. As a general proposition, “summary
judgment is appropriate only after ‘adequate time for discovery.’” Discovery is usually
essential in a contested proceeding prior to summary judgment because “[a] party
asserting that a fact ... is genuinely disputed must support the assertion by,” inter alia,
“citing to particular parts of materials in the record, including depositions, documents,
electronically stored information, affidavits or declarations, stipulations ..., admissions,
interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). Obviously, “by its
very nature, the summary judgment process presupposes the existence of an adequate
record.” A district court therefore “must refuse summary judgment ‘where the
nonmoving party has not had the opportunity to discover information that is essential to
[its] opposition.’”
3. As the majority notes, summary judgment is “regarded not as a disfavored procedural
shortcut, but rather as an integral part of the Federal Rules as a whole.” Compare California case
law—a less hospitable environment: “Because summary judgment is a drastic measure that
deprives the losing party of trial on the merits, it may not be invoked unless it is clear from the
declarations that there are no triable issues of material fact [italics added]. Any doubts about the
propriety of granting a summary judgment motion must be resolved in favor of the party
opposing the motion. Courts must abide by the strong public policy favoring disposition on the
merits over judicial efficiency.” Johnson v. Superior Court, 143 Cal.App.4th 297, 304 (2006).
255
MCCANTS V. FORD MOTOR CO., INC.
United States Court of Appeals, Eleventh Circuit
781 F.2d 855 (1986)
Hill, Circuit Judge [delivered the unanimous opinion of the court]:
This case is before the court on defendant-appellant Ford Motor Company’s appeal from
an order of the district court dismissing plaintiff-appellee Reta McCants’ suit without prejudice
pursuant to Rule 41(a)(2) of the Federal Rules of Civil Procedure [italics added].
FACTS
Appellee Reta McCants, administratrix of the estate of Johnny McCants, deceased,
commenced this suit against appellant Ford Motor Company in federal district court in Alabama.
The action arose out of an accident in which appellee’s decedent, a member of the United States
Army Reserve, was killed while riding in a military jeep on a two week active duty training
mission. The accident occurred in Mississippi, and the complaint sought damages under
Mississippi products liability law.
The decedent was killed on July 24, 1982. Appellee filed suit against A.M. General, the
company she believed had manufactured the military jeep in question, on July 20, 1983.
Appellee maintains that she subsequently learned through discovery that appellant [Ford] rather
than A.M. General manufactured the jeep, and she sought leave to amend her action to substitute
appellant as party defendant. Instead of allowing the amendment, the district court denied her
motion to amend and dismissed the suit without prejudice. Appellee then filed this [subsequent]
action, naming appellant [Ford] as defendant, on November 14, 1983 [more than one year after
the accident].
Discovery began in December of 1983 and continued through most of the following year.
In January of 1985 the district court issued an order granting plaintiff-appellee’s motion that the
case be dismissed without prejudice. Although the action had been pending for more than a year,
during which time considerable activity had taken place, the district court declined to attach any
conditions to its order of dismissal.
Appellant argues on this appeal that the dismissal without prejudice and the failure to
attach conditions were an abuse of the district court’s discretion.
DISCUSSION
I. The Dismissal Without Prejudice
Rule 41(a)(2) allows a plaintiff, with the approval of the court, to dismiss an action
voluntarily and without prejudice to future litigation at any time. The rule provides in relevant
part as follows:
Except as provided in paragraph (1) of this subdivision of this rule [concerning
dismissal by stipulation or by plaintiff prior to answer or motion for summary judgment], an
action shall not be dismissed at the plaintiff’s instance save upon order of the court and upon
such terms and conditions as the court deems proper ... Unless otherwise specified in the
order, a dismissal under this paragraph is without prejudice.
The purpose of the rule “is primarily to prevent voluntary dismissals which unfairly
affect the other side, and to permit the imposition of curative conditions.” Thus a district court
256
considering a motion for dismissal without prejudice should bear in mind principally the interests
of the defendant, for it is the defendant’s position that the court should protect.
As we have noted previously, however, in most cases a [voluntary] dismissal should be
granted unless the defendant will suffer clear legal prejudice, other than the mere prospect of a
subsequent lawsuit, as a result. Thus it is no bar to a voluntary dismissal that the plaintiff may
obtain some tactical advantage over the defendant in future litigation. Rather, the district court
must exercise its broad equitable discretion under Rule 41(a)(2) to weigh the relevant equities
and do justice between the parties in each case, imposing such costs and attaching such
conditions to the dismissal as are deemed appropriate. Dismissal on motion of the plaintiff
pursuant to Rule 41(a)(2) is within the sound discretion of the district court, and its order may be
reviewed only for an abuse of discretion.
In this case, appellant argues it will suffer plain legal prejudice as a result of the district
court’s dismissal without prejudice, as it will lose the complete defense it claims it is afforded by
the applicable statute of limitations in Alabama. Appellee, as well as the [Alabama federal]
district court in which she originally filed, apparently assumed that either the six year statute of
limitations applicable to wrongful death actions under Mississippi law or the two year statute
applicable to wrongful death actions in Alabama would be used to determine the timeliness of
her suit. As the case developed, however, and the parties dedicated further research to the legal
issues involved, it became clear that a very strong argument could be made for the application of
the general one year statute of limitations applicable to actions not otherwise specifically
provided for in other sections of the Alabama code.
Appellant did not plead the one year statute of limitations in its original answer to the
complaint. The issue first appears in the record in an amended answer filed July 18, 1984, in
which it was simply stated that appellee’s claims were barred by the applicable statute of
limitations. Appellant then filed a motion for summary judgment on the basis of the one year
statute on August 24, 1984; the district court denied that motion the day before it granted
appellee’s motion for dismissal without prejudice. Although no opinion accompanied the district
court’s denial of the motion for summary judgment, appellant argues that the district court, in its
denial of the summary judgment motion, must have erroneously determined the one year statute
of limitations to be inapplicable. Appellant thus argues not only that it suffered legal prejudice in
that it lost the statute of limitations defense when the case was dismissed without prejudice, but
that the district court abused its discretion when it failed even to acknowledge that important fact
in its balancing of the equities.
...
The parties have not yet agreed on the statute of limitations applicable to this suit, as
brought in Alabama, although appellant argues persuasively that Alabama’s one year statute
would apply. Appellee essentially argues her case on this appeal on the basis of the assumption
that Alabama’s one year statute bars the suit as brought in Alabama, and that a similar suit would
not be time-barred in Mississippi, where appellee now intends to sue. We, too, will assume
without deciding that the one year Alabama statute bars this [second] suit as filed, but that it
could be refiled in Mississippi under the statute of limitations applicable there. We thus must
determine whether it constitutes an abuse of discretion for a district court to dismiss without
prejudice an action that is time-barred as brought, where the purpose or effect of such dismissal
is to allow the plaintiff to refile the action in a place or manner in which it is not similarly barred.
Only a few reported cases are on point. [Citations omitted] … Thus, what little authority
that exists on this particular question suggests that the likelihood that a dismissal without
257
prejudice will deny the defendant a statute of limitations defense does not constitute plain legal
prejudice and hence should not alone preclude such a dismissal.
...
“On proper motion,” … “the complaint may be dismissed without prejudice upon such terms and
conditions as the court deems proper.” In that [omitted] case, as in this one, the plaintiff’s
untimeliness yielded the defendant a potentially great legal advantage, had the case proceeded to
final judgment, that the defendant presumably would not have enjoyed in a subsequent lawsuit
on the same facts. … [W]e find no evidence in the record to suggest that appellee or her counsel
acted in bad faith in filing this action in Alabama or in filing it more than one year after the
accident occurred. Under the circumstances, we cannot find appellant to have suffered any plain
legal prejudice other than the prospect of a second [or third] lawsuit on the same set of facts. The
district court thus did not abuse its discretion in granting the dismissal without prejudice in this
case.
...
II. The Refusal to Attach Conditions
Appellant argues that if the district court did not abuse its discretion in dismissing the
action without prejudice, it should have at least imposed certain costs and attached certain
conditions to the dismissal [italics added]. Appellant claims the district court should have
conditioned the dismissal on the payment by appellee of full compensation for the considerable
time and effort it claims it wasted in defending this action. Further, appellant argues that the
district court should have imposed non-monetary conditions that would have the effect of
insuring that appellant retains the benefits it claims it is due under the terms of a discovery order
with which appellee apparently failed to comply [italics added]. According to appellant, under
the clear terms of an order of the district court in this litigation, appellee would not have been
able to call any expert witnesses at trial if this case had not been dismissed, because she failed to
furnish to appellant certain information the court ordered her to furnish concerning the expert
witnesses she intended to call at trial. According to appellant, it should be permitted to retain the
benefits of the sanction thereby imposed in any subsequent litigation.
A plaintiff ordinarily will not be permitted to dismiss an action without prejudice under
Rule 41(a)(2) after the defendant has been put to considerable expense in preparing for trial,
except on condition that the plaintiff reimburse the defendant for at least a portion of his
expenses of litigation. Costs may include all litigation-related expenses incurred by the
defendant, including reasonable attorneys’ fees. Where a subsequent similar suit between the
parties is contemplated, expenses awarded might be limited to those incurred in discovering
information and researching and pressing legal arguments that will not be useful in the later suit.
We have also noted previously that a dismissal without prejudice pursuant to Rule 41(a)(2) may
be conditioned upon the satisfaction of other non-monetary conditions designed to alleviate the
prejudice the defendant might otherwise suffer.
Appellant assures us, and appellee does not dispute, that appellant opposed the motion for
dismissal without prejudice filed by appellee … three days before appellant’s motion for
summary judgment was set to be heard, and that appellant asked that any dismissal of the action
without prejudice include the imposition of specified conditions designed to alleviate the
prejudice appellant would otherwise suffer. … [But ] the district court did not explicitly rule on
appellant’s request, instead simply denying it by implication by failing to impose or discuss any
conditions when the dismissal without prejudice was ordered.
258
As a result, the record now before this court is insufficient to allow us to evaluate the
district court’s exercise of its discretion in [implicitly] rejecting appellant’s request for the
attachment of conditions to its order dismissing the case. It is clear that discovery had proceeded
and that interrogatories had been served, objected to, and answered to some extent. Depositions
had been taken. Appellant had obviously incurred considerable litigation expense. Just how
much of the work done by appellant in this case was wasted and how much will be useful in
further litigation in Mississippi is not clear. While appellee does not concede that her suit in
Alabama is barred by the statute of limitations, it is apparent that appellant’s position on the
statute of limitations motivated the motion for dismissal without prejudice. As the record makes
clear, however, the parties were aware of the statute of limitations problem long before appellee
filed the motion to dismiss that was granted by the district court. The district court judge is in a
far better position than we are to weigh and advise us concerning the equities … that militate for
and against the imposition of the various conditions appellant claims are due. We simply cannot
properly evaluate the district court’s exercise of its discretion in this regard without the benefit of
some record of the factors it took into consideration in reaching its decision. We thus remand the
case, with instructions as indicated below, for further proceedings in the district court. …
CONCLUSION
For the reasons set forth above, we VACATE the district court’s order dismissing this
case without prejudice and REMAND the case to the district court for further proceedings not
inconsistent with this opinion. On remand, the district court is instructed to rule on appellant’s
request that conditions be attached to any dismissal of this case without prejudice, and to state
the findings and conclusions that lead the court to arrive at the decision it reaches in that regard.
The district court may hold further hearings to aid it in determining the conditions that may be
appropriate if it so desires. The court need not do so, however, if it finds the current record
sufficient to allow it to prepare the order it deems appropriate. During the remand, we will retain
jurisdiction over this appeal. …
Notes and Questions:
1. FRCP Rule 41(a)(1) authorizes the plaintiff’s voluntary dismissal, without judicial
involvement. Under FRCP 41(a)(2), however, a plaintiff’s voluntary dismissal is dismissed “on
terms that the court deems proper.” What is the essential difference between subsection (1) and
(2)?
2. Did the likelihood of a subsequent lawsuit in Mississippi—aka 11th-hour forum
shopping—bar the plaintiff’s voluntary dismissal? Should it have done so? What would be the
arguments for and against?
3. What were the two conditions Ford asserted, when arguing that the trial court abused
its discretion (by not imposing those conditions when granting plaintiff’s voluntary dismissal)? If
you were the judge, would you have ruled the same way—and, as to both defense requests?
4. How did the appellate court deal with the silent record (on whether the trial court
actually took defendant’s extensive costs into consideration), when granting the plaintiff’s
voluntary dismissal motion?
5. For the factors normally considered during discretionary voluntary dismissal motions,
see Colon-Cabrera v. Esso Standard Oil Co., Inc., 723 F.3d 82, at 88 (1st Cir., 2013).
Voluntary dismissal under Rule 41(a)(2) is conditioned on court permission “to
protect the nonmovant from unfair treatment.” Such unfairness can take numerous forms,
259
including “the defendant’s effort and expense of preparation for trial, excessive delay and
lack of diligence on the part of the plaintiff in prosecuting the action, insufficient
explanation [of] the need to take a dismissal, and the fact that a [dispositive] motion for
summary judgment has been filed by the defendant.” For example, it is appropriate to
consider whether “a party proposes to dismiss the case at a late stage of pretrial
proceedings, or seeks to avoid an imminent adverse ruling.” A plaintiff should not be
permitted to force a defendant to incur substantial costs in litigating an action, and then
simply dismiss his own case and compel the defendant to litigate a wholly new
proceeding.
260
U.S. S.E.C. v. SHEHYN
United States District Court, Southern District, New York
2005 WL 2990643, not reported in F.R.D./F.Supp. (2005)
OPINION & ORDER
Mukasey, J.
The Securities and Exchange Commission (“SEC”) sues defendant Rodney S. Shehyn
(“Shehyn”), along with co-defendants … for violations of … the Securities Act of 1933…; the
Securities Exchange Act of 1934…; and Rule 10b-5 thereunder. … Shehyn moves to dismiss all
of the claims against him for improper service under Fed.R.Civ.P. 4(m). … For the reasons set
forth below, Shehyn’s motion to dismiss is denied and the SEC’s time to serve Shehyn is
extended nunc pro tunc to July 23, 2004.
I.
On March 15, 2004, the SEC filed a complaint against Shehyn and the other named
defendants alleging numerous violations of the federal securities laws…. The details of the
scheme are not relevant for the purposes of Shehyn’s motion; it suffices to say that Shehyn was
alleged to have orchestrated … fraudulent operations through offices in Spain and California
over the course of more than two years.
On July 13, 2004—the 120th day after the SEC filed its complaint—the SEC moved to
extend its time to serve Shehyn to July 23. In its motion, the SEC explained that Shehyn had
pleaded guilty in January 2004 to a different … scheme and had been incarcerated at a federal
detention facility in San Diego. However, when the SEC attempted to serve Shehyn at the San
Diego facility at some point before July 13, it was told that he was “in transit” to a different
facility. On June 29, the SEC learned that this new facility was located in Taft, California, and
spent “several days” trying to reach the correct person at the facility with whom to arrange
service. That person had been reached by the time of the SEC’s July 13 [extension] motion,
leading the SEC to conclude that service could be completed that week. Shehyn was successfully
served at the Taft facility on July 20, within the ten day period requested by the July 13 motion.
The motion itself was never ruled on by this court.
On September 8, 2004, Shehyn moved to dismiss the SEC’s complaint based on the
SEC’s failure serve him within 120 days as required by Fed.R.Civ.P. 4(m).
II.
Fed.R.Civ.P. 4(m) provides that “[i]f service of the summons and complaint is not made
upon a defendant within 120 days after the filing of the complaint, the court, upon motion or on
its own initiative after notice to the plaintiff, shall dismiss the action without prejudice....”
However, the rule also provides that “the court shall extend the time for service for an
appropriate period” if the plaintiff can show “good cause” for the failure to meet the 120-day
deadline. (Emphasis added [by court.]) Such an extension may be granted nunc pro tunc and is
often coupled with a denial of a defendant’s motion to dismiss under … [Rule 12].
Although Fed.R.Civ.P. 4(m) does not spell out what constitutes “good cause,” courts in
this district have required a plaintiff to “demonstrate that despite diligent attempts, service could
not be made due to exceptional circumstances beyond his or her control.” “An attorney’s
ignorance of the rules, inadvertence, neglect, or mistake do not constitute good cause.”
In evaluating “good cause,” courts examine whether the plaintiff has made reasonable
efforts to effect service and whether the defendant has been prejudiced by the delay. In addition
261
to these two factors, several courts have considered also whether the plaintiff moved for an
extension before the 120-day period elapsed. An examination of all three factors suggests that
the SEC has demonstrated “good cause” for the seven-day delay in serving Shehyn.
First, the SEC’s efforts to serve Shehyn in a timely manner were “reasonable.” More than
two weeks before the 120-day period elapsed, the SEC attempted to serve Shehyn at the federal
detention facility in San Diego. Upon learning that Shehyn was “in transit” to another facility
and confirming that this facility was in Taft, California, the SEC spent “several days” trying to
reach the proper person at Taft with whom to arrange service. When it finally was able to reach
this prison official near the end of the 120-day period, it served Shehyn promptly with the
summons and complaint. These facts demonstrate diligence and suggest that circumstances
largely beyond the SEC’s control—Shehyn’s transfer to another facility, the need to coordinate
service with a prison official at the new facility, and the delay of “several days” in reaching this
prison official—were responsible for the failure to meet the 120-day deadline. Ultimately, the
SEC served Shehyn only a week after the deadline, the sort of brief delay that courts repeatedly
have found to be consistent with a “good cause” finding.
Second, Shehyn offers no evidence that he was prejudiced by the one-week delay in
receiving the complaint. Instead, he argues only that the court “is within its power and authority
to grant a dismissal” and that he is “entitled to [it].” The lack of any allegation of prejudice also
militates against granting Shehyn’s motion.
Third, the SEC sought to extend its time to serve under Fed.R.Civ.P. 4(m) before the 120day period expired. Specifically, on July 13, 2004, the SEC moved for an additional 10 days to
complete the coordination of service with the prison official at the Taft facility. Although the
SEC’s motion was submitted on the last day of the 120-day period, the court surmises that the
SEC likely did not recognize the need for extra time until after it took “several days” to reach the
appropriate prison official at Taft. In any event, the court could find “good cause” even if the
SEC had not moved for the extension in the first place. See, e.g., Geller (noting that it would be
“prudent” for a party to move for an extension prior to the running the of 120 days, but “the
failure to do so does not mandate dismissal”).
This court’s conclusion that the SEC has demonstrated “good cause” is reinforced by
numerous cases that have found “good cause” when the defendant’s whereabouts are unknown
or otherwise difficult to discern. In Westerfield, for example, the SEC claimed “good cause”
where it served the defendant 18 days late because it was having “considerable difficulty”
locating the defendant and was able to serve him only “on back roads on Kentucky Lake” after it
had received new information about his location. 1997 WL 282241, at 2. The Court found that
the SEC’s efforts to locate the defendant were “reasonable,” extended the 120-day service period
by 18 days, and denied the defendant’s motion to dismiss for failure to comply with Fed.R.Civ.P.
4(m). Id. at *3. Similarly, the Court in McNeill excused a 31-day delay and rejected a
defendant’s motion to dismiss where the plaintiff was unable to locate the defendant’s agent for
process within 120 days because a state website did not designate the correct agent for service.
McNeill, 2004 WL 1207912, at 1; see also Geller [above] (denying motion to dismiss based on
14-day delay where plaintiff made “extensive inquiries” before finally locating defendant outside
state); Coleman, 202 F.R.D. at 108-09 (denying motion to dismiss based on three-week delay
where defendant was not alleged to have evaded service, but had been unsuccessfully sought at
three different Florida addresses). Although none of these cases presents a situation identical to
the one here, all point to a finding of “good cause” where, as here, the plaintiff struggles to locate
and serve the defendant due to circumstances largely beyond the plaintiff’s control.
262
Because the SEC has shown “good cause” for its delay in serving Shehyn, the court need
not consider whether a discretionary extension is appropriate pursuant to its inherent authority
under Fed.R.Civ.P. 4(m). See Advisory Committee Notes (1993 Amendments) (stating that
Fed.R.Civ.P. 4(m) “authorizes the court to relieve a plaintiff of the consequences of an
application of [Rule 4(m) ] even if there is no good cause shown” ) (emphasis added [by court]);
Feingold, 269 F.Supp.2d at 277 (outlining and applying four-factor test to determine whether
discretionary extension was appropriate)….
For the reasons set forth above, Shehyn’s motion to dismiss is denied and the SEC’s time
to serve Shehyn is extended nunc pro tunc to July 23, 2004 [date of service].
SO ORDERED.
Notes and Questions:
1. If you were the SEC lawyer, what would you have done differently—with a view
toward avoiding Shehyn’s motion?
2. What factors influence FRCP 4(m)’s “good cause” applications? Does good cause
have to be shown to obtain an extension?
3. Was the trial judge too lenient in the good cause exception to the facts of this case?
Should a judge always be lenient? What are the arguments you could generally make—for and
against such leniency?
263
AURA LAMP & LIGHTING INC. V. INTERNATIONAL TRADING CORPORATION
United States Court of Appeals, Seventh Circuit
325 F.3d 903 (2003)
Ilana Diamond Rovner, Circuit Judge [delivered the unanimous opinion of the court].
The district court dismissed this case for want of prosecution and the plaintiff, Aura
Lamp & Lighting Inc. (“Aura Lamp”), appeals. …
I.
Because the district court dismissed the case for want of prosecution and for violations of
discovery orders, the salient facts are few. Aura Lamp and International Trading Corporation
(“ITC”) allegedly entered into a number of contracts relating to lighting products and their
components. The details of these agreements are unnecessary to the resolution of this appeal. …
Aura Lamp filed the complaint on April 6, 2000. A few weeks later, the district court ordered
Aura Lamp to amend its complaint by May 19, 2000 to cure jurisdictional defects related to
certain diversity jurisdiction allegations in the complaint. That date came and went without any
amendment to the complaint by Aura Lamp. ITC then moved to dismiss the complaint or in the
alternative to transfer the case. The district court set a briefing schedule, ordering Aura Lamp to
reply by July 5, 2000. Again the date passed without any action by Aura Lamp. ITC complied
with the district court’s scheduling order by filing its reply brief even though no responsive brief
had been filed by Aura Lamp. Aura Lamp then belatedly filed a response brief which the district
court accepted over ITC’s objection. The district court denied the motion to dismiss, ordered
Aura Lamp once again to amend its complaint to cure the jurisdictional defect and threatened
dismissal if Aura Lamp continued to ignore the court’s orders. Aura Lamp then amended the
complaint.
On December 21, 2000, the court ordered the close of written discovery by March 21,
2001 and the close of all other discovery by August 1, 2001. Approximately one week later [after
the discovery order], ITC served interrogatories, document requests and requests for admission
on Aura Lamp. Under the Federal Rules of Civil Procedure, Aura Lamp was to respond to this
discovery within thirty days. The thirty days passed without a response from Aura Lamp and
without any request for an extension of time to respond. Numerous calls and letters from ITC’s
counsel followed, and Aura Lamp failed to meet two agreed extension dates. ITC then moved to
compel discovery, asking that the requests for admission be deemed admitted, and also seeking
sanctions. The case was scheduled for a status conference on March 22, 2001, and the court took
up the motion to compel at that time. When asked to explain the delays in responding to
discovery, Aura Lamp’s counsel replied that he was solely responsible for the case, stating, “I
wish I had somebody else to go through this stuff.” He explained that his client was a “one-man
operation” that did not have the resources to sort through the documents requested. Over ITC’s
objection, the district court elected to grant one final extension to Aura Lamp, allowing counsel
for Aura Lamp to pick the date on which all discovery was to be produced. Several times during
the status conference, the court threatened dismissal of the case if Aura Lamp failed to meet the
deadline. (“I'll set a deadline, if the case [sic] isn’t met, the case is going away.”); (“I want to set
a date that is going to be real so that if it isn’t met, I’m going to take severe action in this case.”);
(“Due to the amount of time it’s taken the plaintiff to respond to these discovery requests, and
given the enormous amount of time I’m giving you to respond over the objection of the
defendants, if there is not good faith compliance by that date, I am going to seriously consider a
motion to dismiss for want of prosecution.”). (“I'm going to have to take some severe action.”);
264
(“[I]f I set a deadline, given all that's transpired, it’s going to have to be it.”); (“I’m setting a
deadline, and I want it to be a real deadline, and I want there to be consequences if it isn’t
followed.”). Aura Lamp’s counsel asked to set the deadline to the last working day in April,
amounting to an additional one and a half month extension. Shortly thereafter, ITC served a
second set of document requests on Aura Lamp.
On the very last day of April 2001, Aura Lamp served ITC with responses that ITC
characterized as incomplete and defective. According to ITC, Aura Lamp failed to produce a
single page of documents and filed specious objections to both the document and interrogatory
requests. Aura Lamp filed no response to ITC’s second request for the production of documents.
ITC’s counsel again tried to resolve the matter with a letter requesting compliance. When Aura
Lamp did not respond, ITC moved to dismiss the case for repeated violations of court orders,
failure to comply with discovery, and failure to prosecute. On June 15, 2001, the court held a
status hearing on the motion. Counsel for Aura Lamp informed the court he wanted to reply to
the motion in writing and that he intended to file two motions of his own. Remarkably (given the
tenor of the prior hearing), he intended to move to extend time to propound the plaintiff’s
discovery requests and also for additional time to respond to ITC’s request for the production of
documents. After setting out a deadline for Aura Lamp to file these new motions and briefing
schedules for all pending motions, the court set a hearing date of July 11, 2001.
At the July 11 hearing, the court learned that, in addition to missing several other
deadlines, Aura Lamp had failed to comply with the briefing schedule set on June 15. Counsel
for Aura Lamp explained that the most recent delays were due to secretarial difficulties,
computer problems, and scheduling challenges posed by an ongoing trial in chancery court. He
insisted that his conduct was not wilful and wanton but rather due to unforeseen circumstances
beyond his control. The district court replied, “I don’t think I have to find wilful and wanton” [to
impose sanctions]. Ultimately, the court found that Aura Lamp repeatedly missed court-ordered
deadlines and failed to prosecute the case. She noted that Aura Lamp had been granted numerous
extensions both by the court and by counsel for ITC to no avail. Aura Lamp had also failed to
follow basic court procedures by failing to sign many of the documents filed with the court. The
court concluded, “[Y]ou brought the case, and the plaintiff has to prosecute a case when they
bring it, and the plaintiff hasn’t. And I think to allow this to go on anymore would just compound
all the problems that have occurred by really doing something that’s unfair to the defendants.”
The court then dismissed the case for want of prosecution and denied all other motions as moot.
Aura Lamp appeals.
II.
On appeal, Aura Lamp maintains that the district court erred in dismissing the case under
Federal Rule of Civil Procedure 37 because that rule requires a finding of wilful and wanton
misconduct, and the court thus applied the wrong standard. Aura Lamp also contends that
dismissal under Rule 37 or Rule 41 requires specific warnings prior to dismissal and also
requires that the court consider lesser sanctions before dismissing. Aura Lamp argues that the
court’s warnings were inadequate and that no lesser sanctions were considered before the court
dismissed the case. Before we attend to the merits of Aura Lamp’s appeal, we must address a
question raised by ITC at oral argument.
A.
...
Having determined that the [Washington, D.C.] Federal Circuit has [national] jurisdiction
over the [patent] appeal [in this case, rather than the otherwise appropriate local appellate court]
265
and that we necessarily lack jurisdiction, we are left with a single question. We must decide
whether to dismiss the case or, in the interest of justice, transfer it to the Federal Circuit. ITC
urges us to dismiss rather than transfer the case. At this stage of the proceedings, we may “take a
peek” at the merits because whether the appeal has any possible merit bears significantly on our
decision to transfer or dismiss the appeal. We may do so even though we lack jurisdiction to
decide the merits.
B.
ITC moved to dismiss the complaint with prejudice “pursuant to Fed.R.Civ.Proc. 37(d)
and/or 41(b).” The district judge ultimately dismissed the case for want of prosecution pursuant
to Rule 41(b) but she also discussed and may have relied upon Aura Lamp’s violations of orders
related to discovery. In an abundance of caution we will therefore address Aura Lamp’s Rule 37
arguments as well. As we concluded above, we may consider the consequences of transfer before
deciding whether to transfer. “[T]here is no reason to raise false hopes and waste judicial
resources by transferring a case that is clearly doomed[.]” Here, because the case was dismissed
for want of prosecution and violations of discovery orders, the district court’s ruling rests on
procedural matters not unique to patent law. The ruling would thus be reviewed under the law of
our own circuit. In our Circuit, we review for abuse of discretion the district court’s decision to
sanction a plaintiff by dismissing a suit. Our review of a dismissal for want of prosecution is
highly deferential [to the trial judge’s decision]. In order to find an abuse of discretion, the
district court’s decision must strike us as fundamentally wrong. ([W]e are obligated to affirm the
dismissal unless it is clear that no reasonable person could concur in the trial court’s assessment).
Certain principles guide the district court in determining whether to dismiss a case for
want of prosecution pursuant to Rule 41. Ideally, the district court should consider the frequency
and magnitude of the plaintiff’s failure to comply with deadlines for the prosecution of the suit,
the apportionment of responsibility for those failures between the plaintiff and his counsel, the
effect of those failures on the judge’s calendar and time, the prejudice if any to the defendant
caused by the plaintiff’s dilatory conduct, the probable merits of the suit, and the consequences
of dismissal for the social objectives of the type of litigation that the suit represents. “There is no
‘grace period’ before dismissal for failure to prosecute … and no requirement of graduated
sanctions, but there must be an explicit warning before the case is dismissed.” Aura Lamp asks
us to find the district court abused its discretion in dismissing the case because (1) the court did
not adequately warn Aura Lamp that the case would be dismissed; (2) the court failed to consider
whether lesser sanctions would be effective; (3) Aura Lamp’s violations were not of sufficient
frequency or magnitude to warrant dismissal; (4) in apportioning the fault between the parties,
the district court should have found that ITC’s conduct was responsible for more egregious
delays than Aura Lamp’s; (5) neither the court nor the defendant suffered prejudice due to Aura
Lamp; (6) Aura Lamp’s claims are meritorious.
We begin with the issue of warning. The district judge is not obliged to warn the plaintiff
repeatedly nor is the court required to issue a formal rule to show cause before dismissing a case.
“A judge is not obliged to treat lawyers like children.” All that is required is explicit warning.
Here, the court repeatedly and expressly warned Aura Lamp that it was contemplating dismissal
during the March 22 status conference. (“I'll set a deadline, if the case [sic] isn’t met, the case is
going away.”); (“I want to set a date that is going to be real so that if it isn’t met, I’m going to
take severe action in this case.”); (“Due to the amount of time it’s taken the plaintiff to respond
to these discovery requests, and given the enormous amount of time I’m giving you to respond
over the objection of the defendants, if there is not good faith compliance by that date, I am
266
going to seriously consider a motion to dismiss for want of prosecution.”). This is by no means a
complete list of the court’s warnings but is merely a representative sample. These warnings are
more than adequate. Aura Lamp was on notice of the consequences of further failures to respond
to the court’s orders.
Aura Lamp also faults the court for failing to consider the efficacy of lesser sanctions
first. Although we recommend that courts consider sanctioning a misbehaving lawyer before the
sanction of dismissal is imposed on a possibly faultless plaintiff, we do not require that courts do
so. At the July 11 hearing, as the court was ruling on the motion to dismiss, counsel for Aura
Lamp asked the court to allow him to resign from the case and find someone else who could
handle the case properly. The court replied that it was too late for such a maneuver. The district
judge acknowledged that both counsel and his client had difficulties in prosecuting the case but
that ultimately the plaintiff was responsible for prosecuting the case and had failed to do so.
Clearly the court believed this was the only effective sanction at the time. Especially in light of
counsel’s earlier admission that his client was a “one-man operation” without the resources to
respond to discovery, it would appear that the court did not abuse its discretion in refusing to
impose lesser sanctions. ([Citation omitted: where a pattern of dilatory conduct is clear, dismissal
need not be preceded by the imposition of less severe sanctions).
Aura Lamp next argues that its violations were not sufficiently egregious and were too
infrequent to warrant such a harsh sanction. This claim is easily answered by merely listing the
violations. In addition to failing to sign pleadings filed with the court, Aura Lamp repeatedly
missed court-imposed deadlines for both discovery and motion practice, ignored agreed
extensions, and failed to amend its complaint to cure a jurisdictional defect for several months
after the court ordered it do so. Moreover, Aura Lamp asked permission to propound discovery
on the defendant after the court-ordered discovery cut-off date, a date that Aura Lamp’s counsel
had himself selected at the court’s invitation. We have upheld dismissals in cases where the
violations were comparable to or less severe than they are here, and no court would find an abuse
of discretion in these circumstances.
Aura Lamp maintains that ITC caused at least some of the delay. But in apportioning the
fault between Aura Lamp and ITC, Aura Lamp offers no valid evidence of dilatory conduct by
ITC that contributed to any of Aura Lamp’s failures. The sum and substance of Aura Lamp’s
argument on this point is that ITC did not tell Aura Lamp’s counsel that his extraordinarily late
responses to discovery were evasive and incomplete. Aura Lamp also complains that ITC did not
contact its counsel concerning responses to ITC’s request for production of documents. Aura
Lamp claims it made the documents available for inspection and ITC did not take advantage of
the opportunity to review them. However, Aura Lamp fails to mention that ITC specifically
requested that Aura Lamp photocopy the documents and forward them to ITC. This argument is
frivolous. So too is Aura Lamp’s claim that neither the court nor the defendant suffered any
prejudice at its hands. The district court specifically listed the motions that ITC was forced to
bring to protect its interests in the case, adding needless expense to the case and clogging the
court’s docket. We conclude that this is not a close question. On the Rule 41 [lack of
prosecution] issues, the appeal is doomed and need not be transferred to the Federal Circuit.
There is no more [additional] merit to Aura Lamp’s Rule 37 argument. The only issue
here is whether the court applied the wrong standard when it dismissed the case without
expressly finding that Aura Lamp’s conduct was wilful and wanton. We [but not the language of
Rule 37] have held that when a court enters a default judgment as a discovery sanction, the court
must find that the party against whom sanctions are imposed displayed wilfulness, bad faith or
267
fault. Although we strongly encourage courts to make this finding explicitly, we may infer it, if
necessary, from the sanction order itself. The court here stated that it did not need to find “wilful
and wanton” conduct, and that is correct. “Wilful and wanton” implies a more culpable level of
conduct than wilful. Aura Lamp has cited no case applying Rule 37 (and we could find none)
requiring a court to find that a plaintiff has acted in a wilful and wanton fashion before the court
may impose the sanction of dismissal. Indeed, some of our cases suggest the court need not find
even wilfulness. … We will presume for the purposes of this appeal that the court was required to
find at least a wilful violation of discovery orders before dismissing a case. Evidence of the
court’s implicit finding on wilfulness appears in its final remarks before dismissing the case:
I don’t want to hear any more argument. I can’t bend over anymore. I just think
that yes, there may have been excuses for what happened in April, but you can’t look at
excuses for what happened in April when you’re trying to find excuses for what
happened in January, February and March. And it’s just inadequate. I mean, I don’t even
have to deal with the fact that I’m getting all these things from the clerk’s office telling
me that you’re not complying with the basic rules of filing documents, like signing it. I
mean, you don’t need a word processor to sign a document.
The court thus found that Aura Lamp had no adequate excuse for its repeated failures to comply
with discovery for a period of at least three months. Indeed, Aura Lamp had failed to propound
discovery on the defendant as of July 2001, more than a year after filing the case. This serves as
evidence both of failure to prosecute the case and failure to comply with discovery orders. The
court’s palpable exasperation with the plaintiff is more than sufficient to infer a finding of
wilfulness. The court did not abuse its discretion in granting the sanction of dismissal for Aura
Lamp’s repeated, unexplained failures to comply with discovery orders.………………………
III.
We conclude that we should dismiss the case rather than transfer it to the Federal Circuit.
Under the deferential standards the Federal Circuit would employ to review a dismissal under
Rules 37 and 41, Aura Lamp would not prevail. The appeal is “clearly doomed” and there is no
reason to waste judicial resources or the resources of the parties by transferring the case. The
appeal is therefore ………………………………………………………………………………..
DISMISSED.
Notes and Questions:
1. Recall the Shehyn (other) involuntary dismissal case. There, the court authorized
additional time for the plaintiff to serve an incarcerated defendant, who had been transferred.
Here, in Aura, the court was not as lenient—ultimately dismissing the case for a lack of
prosecution at the discovery stage. Courts are generally less lenient, when exercising their
discretion in the latter type of delay in prosecution cases. Does this difference make sense? It
actually does, but can you determine the reason for this difference?
2. As the Aura court states: “both counsel and his client had difficulties in prosecuting the
case but that ultimately the plaintiff was responsible for prosecuting the case and had failed to do
so.” Is this a case where the sins of the lawyer were unfairly attributed to the client? On the other
hand, can a plaintiff dodge the responsibility of diligently prosecuting his case? Would it matter
of the plaintiff were in pro per? A sophisticated litigant?
268
3. The former requirement—that here be an express finding of a “willful” failure to
comply with a court order (for dismissal/answer striking sanctions)—was removed from Rule 37
in the 1970 Amendments to the FRCP.
4. The Sixth Circuit raised the point that it did not have jurisdiction over this appeal (Part
II.A.).
(a) Did it therefore overstep its authority to act, by nevertheless dismissing this case—
with prejudice—which precluded P’s refiling?
(b) Aura could not refile its case in the trial court. It had to appeal the dismissal. As
Rule 41(b) provides: “a dismissal under this subdivision (b) and any dismissal not under this rule
[e.g., Rule 37]—except one for lack of jurisdiction, improper venue, or failure to join a party
under Rule 19—operates as an adjudication on the merits.” The court states that it could have
transferred this appeal to the Federal Circuit. The Sixth Circuit chose, instead, to affirm the
dismissal. In doing so, the Sixth Circuit reasoned: “we may ‘take a peek’ at the merits because
whether the appeal has any possible merit bears significantly on our decision to transfer or
dismiss the appeal. We may do so even though we lack jurisdiction to decide the merits.”
Notwithstanding P’s multiple failures to comply with its discovery obligations, was the Sixth
Circuit’s failure to transfer the appeal to the proper appellate court a violation of the principle
that a federal court cannot act without jurisdiction to do so? Is its Part III conclusion—that
Aura’s case is “‘clearly doomed’ and there is no reason to waste judicial resources or the
resources of the parties by transferring the case”—a satisfactory rationale?
5. Courts generally do not look for ways to dismiss a case, when there has been but one
misstep—as articulated in the following passage:
[A] district court commits a legal error when it dismisses a suit “immediately after
the first problem, without exploring other options or saying why they would not be
fruitful.” ... [¶] The district court dismissed Sroga’s case too abruptly and without
consideration of “essential factor[s],” such as the frequency and egregiousness of the
plaintiff’s failure to comply with deadlines, the effect of delay on the court’s calendar,
and the prejudice resulting to the defendants. ... [W]e require more than just a standalone
warning to ensure that the punishment “fit[s] the crime.” Generally a single missed
deadline or status hearing does not support dismissal for want of prosecution.
Sroga v. Huberman, 722 F.3d 980, 982–983 (2013). There are various factors a court applies
when deciding a post-service motion to dismiss for lack of diligent prosecution. For example, in
Carpenter v. City of Flint, 723 F.3d 700, at 704 (6th Cir., 2013): “Under this court’s precedent,
we consider four factors when determining whether dismissal for failure to prosecute was within
the district court’s discretion:
(1) whether the party’s failure is due to willfulness, bad faith, or fault; (2) whether the
adversary was prejudiced by the dismissed party’s conduct; (3) whether the dismissed party
was warned that failure to cooperate could lead to dismissal; and (4) whether less drastic
sanctions were imposed or considered before dismissal of the action.”
269
GREENUP v. RODMAN
Supreme Court of
California
42 Cal.3d 822 (1986)
Professor’s Note: We discussed default judgment earlier, typically referred to as
a “true” default. We now address default judgment again, in its application as a
“penalty” default.
The following California Supreme Court opinion presents the later type of
default, in a very teachable context—which also better prepares you for trial
practice. Greenup also yields a good sense of the important distinction between
the two types of default judgment, and a federal procedure comparison.
California’s version of the FRCP 55 default rule is found in CCP §580. The hotly
contested issue (on the California Supreme Court) is whether the latter code
section governs both types of default. Make this difference the focus of your
reading (rather than the state-federal differences mentioned in Greenup).
Court’s Opinion: Mosk, Associate Justice [delivered the 6-1 opinion of the court].
As a sanction for wilful and deliberate refusal to obey discovery orders,
the trial court in this case struck the answer and entered a default judgment in an
amount exceeding the prayer of the complaint. We granted review to consider
whether a default judgment entered as a discovery sanction is excepted from the
general rule that “if there be no answer” filed, the plaintiff’s relief “cannot exceed
that which he shall have demanded in his complaint ....” (Code Civ. Proc., § 580.)
We conclude that in all default judgments the demand sets a ceiling on recovery.
Plaintiff filed a complaint in August 1980 against Dale W. Rodman,
individually and as majority shareholder of Rodair, Inc. and sole shareholder of
Rodman Aviation, Inc., and against Rodman Aviation. She alleged that defendant
Rodman had used involuntary dissolution procedures to transfer assets
fraudulently from Rodair, Inc., in which she held a 20 percent minority interest, to
Rodman Aviation, a corporation solely owned by Rodman. Charging fraud and
conspiracy to defraud, concealment of assets, breach of fiduciary duty,
conversion, and intentional infliction of emotional distress, plaintiff claimed
damages “in a sum that exceeds the jurisdictional requirements of this court.” In
her prayer, however, the only specific sum requested was $100,000 in exemplary
and punitive damages: all other damages were to be “subject to proof at time of
trial” or “as the court deems just.”
Following unsuccessful demurrers, defendants answered and plaintiff
commenced discovery. Rodman was recalcitrant throughout this process, actively
resisting both document production and deposition. After repeated failures to
appear and numerous postponements, he appeared at a deposition on February 12,
1981, rescheduled at his request, only to refuse to answer questions because it
was Lincoln’s Birthday—assertedly a “legal holiday.” At a June 1981 deposition,
on a court order to appear with records at the office of plaintiff’s counsel,
Rodman produced an assortment of papers in a box filled with straw and horse
excrement, which he laughingly dumped on the table. After counsel and the court
reporter had inspected the documents for an hour, Rodman announced they must
270
be sure to wash their hands thoroughly because the straw had been treated with a
toxic chemical readily absorbed through the skin. The reporter, five months
pregnant, asked to be excused, and the session was terminated by plaintiff’s
counsel.
On November 6, 1981, plaintiff moved to strike the answer and enter a
default judgment. The court ordered defendants to pay $1,000 in sanctions
(adding $500 to an earlier sanction that Rodman had failed to pay) and to appear
at the office of plaintiff’s counsel with the requested documents on December 23,
1981. When Rodman again refused to comply, plaintiff renewed her motion,
demanding
that
a
default
be
entered.
On August 24, 1982, the court granted plaintiff’s motion to strike the
answer and enter a default. However, it was not until September 24, 1982—i.e., a
month after the default had been entered—that she filed a request to enter a
default judgment (Cal. Rules of Court, rule 982(a)(6)), stating for the first time
the amount of damages she claimed. After several continuances at plaintiff’s
request, an ex parte “prove-up” hearing was held. Plaintiff put on evidence in
support of her claim of damages; defendants were not present either in person or
by counsel. The court found defendants liable for $338,000 in compensatory
damages and $338,000 in punitive damages, and entered judgment in the amount
of $676,000. Defendants appealed, contending inter alia that the court lacked
jurisdiction to award damages in an amount exceeding the prayer. Holding this
default for discovery violations exempt from the limit on damages in default
judgments set by the code, the Court of Appeal affirmed the judgment.
I
Section 580, and related sections … aim to ensure that a defendant who
declines to contest an action does not thereby subject himself to open-ended
liability. Reasoning that a default judgment that exceeds the demand would
effectively deny a fair hearing to the defaulting party, the Courts of Appeal have
consistently read the code to mean that a default judgment greater than the
amount specifically demanded is void as beyond the court’s jurisdiction.
… We held that the primary purpose of the section is to guarantee
defaulting parties adequate notice of the maximum judgment that may be
assessed against them. As we observed, “The notice requirement of section 580
was designed to insure fundamental fairness. Surely, this would be undermined
if the door were opened to speculation, no matter how reasonable it might appear
in a particular case, that a prayer for damages according to proof provided
adequate notice of a defaulting defendant’s potential liability.” … [T]he Courts
of Appeal have insisted that due process requires formal notice of potential
liability; actual notice may not substitute for service of an amended complaint.
Nevertheless, plaintiff here maintains that the court acted within its
jurisdiction in granting her increased award. She first argues that the terms of her
complaint amply notified defendants of the extent of damages she would claim.
While conceding that she omitted to state an amount of damages in her demand
for judgment as section 425.10, subdivision (b), requires, she points to the usual
inconsequence of such error. It is true that a general demurrer will not lie for a
defective prayer alone. And in the ordinary case in which the litigation proceeds
271
to trial, such a deficiency would carry no adverse consequences: the plaintiff
would be permitted liberal amendment to the prayer to conform to proof.
Furthermore, section 580 specifically provides that the court is not bound by the
demand of the complaint, but may award any relief consistent with the case made
by the plaintiff. ……………………………………………………………………
It is precisely when there is no trial, however, that formal notice, and
therefore the requirement of section 425.10, become critical. Notice is at the heart
of the provision, as the Legislature underscored by adding section 425.11, which
provides that in the single instance in which the amount of damages shall not be
specified in the complaint–an action for personal injury—”the plaintiff shall give
notice to the defendant of the amount of special and general damages sought”
before obtaining a default judgment. It would undermine this concern for due
process to allow the judgment herein to stand despite plaintiff’s failure to meet
the
requirements
of
sections
425.10
or
425.11.
Plaintiff’s more substantive claim, and the central issue before us, is that
the foregoing limits on default judgments do not, either as a matter of statutory
language or policy, apply in the present context. She concedes that section 580
governs the judgment even when, pursuant to section 2034 [now CCP § 2023],
subdivision (b)(2)(C), a court strikes an answer and enters a default judgment for
refusal to make discovery. She would construe the language of section 580,
however, to permit unlimited damage judgments when an answer is stricken as a
discovery sanction. She asserts that the first clause of the section—i.e., “The
relief granted to the plaintiff, if there be no answer, cannot exceed that which he
shall have demanded in his complaint”—applies only to “ordinary” defaults,
presumably defaults at the pleading stage. And she concludes that when, as here,
a default is entered after the defendant has filed his answer, the judgment falls
within the more liberal rule of the second clause of section 580, i.e., “but in any
other case, the Court may grant [the plaintiff] any relief consistent with the case
made
by
the
complaint
and
embraced
within
the
issue.”
…………………………………………….
In effect, plaintiff maintains that defendants entered irreversibly into an
adversarial contest by filing a sufficient answer; having crossed that threshold,
they may no longer claim the protection of section 580. In this way, plaintiff
attempts to exclude answers stricken for discovery violations from the long line
of precedents viewing a failure to answer as including the case in which an
answer
is
filed
but
is
later
stricken
by
the
court.
We are unpersuaded. The rationale stated in Brown, i.e., that striking the
answer renders it a nullity (see Brown… 149 Cal.App.3d 732, 736], applies
equally when the answer is stricken pursuant to section [2023]. It is true that
sections 586, 585, and 580, which together govern default judgments, do not
explicitly list answers stricken pursuant to section [2023] as proceedings in
which default judgment is rendered “as if the defendant had failed to answer....”
(§ 586.) Yet unless and until the Legislature specifically provides a separate
procedure for defaults after discovery sanctions, these sections remain the sole
statutory procedures for default judgments. Indeed, in the present case the ex
parte prove-up hearing was conducted pursuant to section 585, subdivision (b).
We conclude that the damages awarded must be limited by the terms of the same
272
section: when an answer is stricken as a sanction for the defendant’s obstruction
of discovery, it is as if no answer had been filed in the first instance.
……………………
Arguing that default judgments entered for discovery violations should be
held to differ fundamentally from other defaults as a matter of policy, plaintiff
cites to the minority of federal cases that have upheld judgments exceeding the
demand of the complaint. Plaintiff stresses that these holdings were reached
despite statutory language more absolute than section 580: rule 54(c) of the
Federal Rules of Civil Procedure requires that “A judgment by default shall not
... exceed in amount that prayed for in the demand for judgment.”
…………………………………………………………………..
Certainly these holdings give bite to discovery sanctions in cases in which
the defendant’s own actions obstructed the plaintiff from fixing the amount of
damages to which he was entitled. But while unlimited discretion to award such
default judgments might further the policy behind discovery sanctions, our
paramount concern remains due process. Plaintiff overlooks a crucial difference
between state and federal procedures in default judgments: … federal defendants
who default are entitled to a minitrial on the sole issue of damages. Unlike the ex
parte hearing provided for by section 585, the hearing in federal court is a fullfledged
adversarial
contest.2
………………………..
It is here that plaintiff’s analogy to federal law—and her contention that
merely by filing an answer defendants have irreversibly contested this action–
breaks down: under section 585 there is no contest whatever once a defendant
defaults. We conclude that due process requires notice to defendants, whether
they default by inaction or by wilful obstruction, of the potential consequences of
a refusal to pursue their defense. Such notice enables a defendant to exercise his
right to choose–at any point before trial, even after discovery has begun–between
(1) giving up his right to defend in exchange for the certainty that he cannot be
held liable for more than a known amount, and (2) exercising his right to defend
at the cost of exposing himself to greater liability. To this end, … “[t]he rules
governing default judgment provide the safeguards which ensure that defendant’s
choice is a fair and informed one.” …………………………………………
Plaintiff contends that defendants deliberately thwarted her discovery
efforts because they believed they owed an actual debt to her in excess of her
demand. Yet this is no less true of many defendants who fail to answer in the
first instance. As we emphasized in Becker [27 Cal.3d 489], no matter how
reasonable an assessment of damages may appear in the specific case, we cannot
open the door to speculation on this subject without undermining due process—a
protection to which every defendant is entitled, even one as obstreperous and as
guilty of reprehensible conduct as this defendant. ………………….
II
We are equally unpersuaded by defendants’ attempt to use federal majority
interpretation of rule 54(c) to support their contention that our discovery statutes
must be read as conforming to the federal statutes on which they were modeled.
Because the language and procedure of our code differs so markedly from the
federal rule, federal case law and policy are at best suggestive on this point.
2
273
Because the default judgment in this case exceeded the ceiling on damages
to which plaintiff is subject, we conclude that the award must be amended to
conform to the limitations specified in section 580. Defendants argue that
because plaintiff stated no amount of damages in her prayer, she is entitled to no
compensatory damages whatever. In Becker, however, we specifically held that
the allegations of a complaint may cure a defective prayer for damages.
……………………………………………………………
Each of plaintiff’s causes of action, with the exception of her personal
injury claim, concluded with the allegation that she suffered damage “in an
amount that exceeds the jurisdictional requirements of this court.” Plaintiff
brought her action in the Los Angeles Superior Court, which is a court of limited
jurisdiction subject to the requirement that the amount in controversy exceed
$15,000.a By her allegations, plaintiff thus gave sufficient notice to defendants
that she claimed at least $15,000 in compensatory damages. While an award in
excess of $15,000 would be improper, a judgment in that amount was within the
jurisdiction of the court. The compensatory award should therefore be reduced to
the
extent
that
it
exceeds
$15,000.
Even as so modified, the judgment will clearly support an award of
punitive damages. We need not, therefore, reach defendants’ contention that an
award of punitive damages cannot stand if there is no compensatory damage
award. For the reasons given, however, the award of punitive damages must be
reduced to the amount of $100,000 pleaded in the complaint.
……………………………………………………………….
III
We recognize that the damages thus authorized may not fully compensate
plaintiff for her loss. Because this case appears to be the first reported decision
to hold that a default judgment entered as a discovery sanction is governed by the
general rule that such a judgment cannot exceed the relief demanded in the
complaint, both plaintiff and the trial court may have been unaware that the
deficiency in her prayer could have been corrected in the same way as in cases of
default for failure to answer, i.e., by giving plaintiff the option of serving and
filing
an
amended
complaint.
………………………..
In the interest of fairness plaintiff should now be given that option.
Specifically, she should be allowed to choose to forego the reduced award
prescribed herein and instead to file an amended complaint praying for a different
amount of damages and/or other appropriate relief. If she so elects, she must
serve her amended complaint on defendants, who will be entitled to file a new
answer; all issues will then be at large, including liability. Of course, if
defendants thereafter continue to disobey discovery orders and incur a second
default judgment as a sanction, plaintiff will have the right, at a second ex parte
hearing, to prove her actual damages up to the limits of her amended prayer.
The judgment of the Court of Appeal is reversed with directions to modify
a
The referenced amount was the then-current demarcation between
California’s Superior and Municipal Court jurisdiction. That amount is now
$25,000+.
274
the judgment of the trial court in accord with Part II of this opinion and to affirm
the judgment as modified, unless within 30 days after issuance of our remittitur
plaintiff serves and files in the Court of Appeal a notice electing the option set
forth in Part III of this opinion. In that event, the Court of Appeal shall reverse
the judgment of the trial court with directions to allow plaintiff to exercise that
option. In either event the parties shall bear their own costs on appeal.
Bird, Chief Justice, concurring and dissenting.
I write separately to express a concern that has been overlooked by the
majority. Civil defendants who wish to limit their liability to the minimum
amount specifically pleaded can (1) force plaintiffs to undergo the frustration and
expense of discovery, and then (2) absent themselves allowing a default to be
entered.
This
is
exactly
what
happened
here.
…………………………………………………………………………….
...
Witkin notes, “C.C.P. 580 provides that if the defendant answers the court
may grant ‘any relief consistent with the case made by the complaint and
embraced within the issue,’ and the rule is well settled that in a contested case the
plaintiff may secure relief different from or greater than that demanded.”
...
Although the majority acknowledge the fact that the statutory scheme
does not address this situation, they insist that due process requires a “strict
construction of section 580. ...” However, this interpretation would mandate the
application of the damage ceiling to actions in which answers are stricken as a
discovery sanction. In so doing, the majority expand the parameters of section
580 by incorporating all cases falling within the ambit of section [2023].3
The justification proffered for equating defaults entered at the pleading
stage with those resulting from sanctions imposed under section [2023] is the
concern that defaulting parties may be denied the formal notice of the maximum
amount of potential liability required by due process.
The first clause of section 580 was set down by the Legislature to
guarantee defendants adequate notice of the maximum judgment that may be
assessed against them. However, it is clear that the statutory language
contemplates two different situations.
The first clause of section 580 addresses the traditional default context where a
defendant has failed to answer. In this situation, fundamental fairness requires
that the defendant be notified. The second clause of section 580, by contrast,
refers to contested cases. Absent the discovery abuses that occurred here, the
defendant would have an opportunity to determine and contest the maximum
amount of damages pleaded. In contested cases, therefore, any affirmative action
taken by a defendant demonstrates that notice has been received.
In the present proceeding, defendants not only filed an answer to the
complaint, they gave both plaintiff and the court the impression that they would
3
Section [2023(b)] empowers the courts to impose sanctions against litigants
who wrongfully fail or refuse to participate in the discovery process.
275
participate in the discovery process. For the two-year period between the date
plaintiff filed the complaint—August of 1980—and the date the court granted
plaintiff’s motion to strike the answer and enter a default—August of 1982—this
case was “contested.” …
The record demonstrates that during this two-year period defendants had
no intention of providing plaintiff with any information through the discovery
process. As the majority note, defendant Rodman “actively resist[ed] both
document production and deposition.” He repeatedly failed to appear at
scheduled meetings and, during the one deposition he chose to attend, engaged in
behavior that can only be described as shocking, inhumane, and inexcusable.
In light of these circumstances, I cannot agree with the majority’s
conclusion that default judgments entered as a sanction for obstruction of
discovery must be treated as if no answer had been filed in the first instance. The
policy considerations underlying a decision to uphold judgments exceeding the
demand where the defendant’s affirmative actions invite a default judgment are
considerably more compelling than the majority allow.
The principal purpose of the ceiling set forth in section 580 is to apprise
defendants of their potential liability so that they may evaluate the consequences
of exercising their right not to answer. Here, the defendant Rodman has
answered and then obstructed the discovery process. In so doing, he prevented
the
plaintiff
from
ascertaining the proper amount of damages. If the ceiling on damages is applied
to this situation, it would permit the defendants to profit from wrongdoing.
…………………
Consider the facts of this case. Defendants answered the complaint,
thereby indicating their intention to contest plaintiff’s allegations. The ensuing
evasive maneuvers permitted defendants to gauge plaintiff’s case while raising
the stakes by forcing her to file expensive and futile discovery motions. When it
became clear that plaintiff could not realistically estimate the losses she suffered
as a result of the dissolution without defendants’ cooperation, defendants
attempted to limit their liability by suddenly withdrawing from the proceedings.
……………………………………….
The majority admit that the rule they delineate will undercut the
effectiveness of discovery sanctions in cases where, as here, only the defendants
know the dollar value of the losses suffered. Nevertheless, they claim that due
process mandates such a result. If their concern is proper notice to defendants, I
see no reason why plaintiffs must suffer the frustration and expense of refiling
their claims so that obstreperous defendants may choose the optimal point at
which to drop out of the litigation. The majority’s holding eliminates any
remedy for outrageous abuses of the discovery process. ……………
To avoid this inequity, I would suggest an alternative procedure. The trial
court, at the time it enters the default, would send a notice to the defendant
stating that it will consider evidence in support of a claim of damages in an
amount exceeding the prayer of the complaint at the scheduled “prove-up”
hearing under section 585. During that proceeding, the defendant would be
permitted
to
present
rebuttal
evidence.
……………
276
This procedure5 would provide defendants with ample notice of their
potential liability and an opportunity to challenge the amount of damages sought.
This solution is preferable to that suggested by the majority for it accommodates
due process while ensuring the effectiveness of motions to strike answers as
sanctions for clear abuses of the discovery process.
...
Notes and Questions:
1. There are two types of default (in both the state and federal courts). What is
the general procedural distinction between them?
2. Given the defendant’s outrageous conduct, why did the California
Supreme Court not let the trial judge’s default stand? Should state or federal courts
have more power than provided by the legislative branch of government?
3. Greenup provides a rare glimpse into state and federal procedural
differences. If your professor were to cover both procedural systems—when federal
casebooks do not provide the materials (and professors do not have the time) to
address the thousands of state-federal differences—might you be more confused
about what law applies in federal courts? For those of you who will take the
California Bar, the upper-division California Civil Procedure course is the place to
address such differences in more detail.
4. For the interplay of FRCP 37 (sanctions) and FRCP 55 (default judgments),
see Guggenheim Capital, LLC v. Birnbaum, 722 F.3d 444, 451 & 454 (2d Cir.,
2013):
When assessing a district court’s exercise of its discretion pursuant to Rule
37, we generally look to “(1) the willfulness of the non-compliant party; (2)
the efficacy of lesser sanctions; (3) the duration of the noncompliance; and (4)
whether the non-compliant party had been warned” that noncompliance would
be
sanctioned.
...
[A] party defaults when he “has failed to plead or otherwise defend”
the case at hand [italics added]. Fed.R.Civ.P. 55(a). “We have embraced a
broad understanding of the phrase ‘otherwise defend.’ ” [D]efendant failed to
“otherwise defend” by “failing to appear for a deposition, dismissing counsel,
giving vague and unresponsive answers to interrogatories, and failing to
appear for trial....”
5
This procedure would be analogous to that employed in the federal courts in
cases where a plaintiff seeks damages exceeding the demand in the complaint.
277
BEACON THEATRES, INC. v. WESTOVER
United States Supreme Court
359 U.S. 500 (1959)
Mr. Justice Black delivered the [5-3] opinion of the Court.
Petitioner, Beacon Theatres, Inc., sought by mandamus to require a district judge in the
Southern District of California to vacate certain orders alleged to deprive it of a jury trial of
issues arising in a suit brought against it by Fox West Coast Theatres, Inc. The Court of Appeals
for the Ninth Circuit refused the writ, holding that the trial judge had acted within his proper
discretion in denying petitioner’s request for a jury. We granted certiorari, because ‘Maintenance
of the jury as a fact-finding body is of such importance and occupies so firm a place in our
history and jurisprudence that any seeming curtailment of the right to a jury trial should be
scrutinized with the utmost care.’
A former Fox Theater in San Bernardino County, California
Source: <http://www.sbcity.org/images/History/OldFox_1.JPEG>
Reprinted with permission of San Bernardino Historical & Pioneer Society
Fox had asked for declaratory relief against Beacon alleging a controversy arising under
the Sherman Antitrust Act, 15 U.S.C. s[ection] 1, 15 U.S.C.A. s[ection] 2, and under the Clayton
Act, 15 U.S.C. s[ection] 15, which authorizes suits for treble damages against Sherman Act
violators. According to the complaint Fox operates a movie theatre in San Bernardino,
California, and has long been exhibiting films under contracts with movie distributors. These
contracts grant if the exclusive right to show ‘first run’ pictures in the ‘San Bernardino
competitive area’ and provide for ‘clearance’—a period of time during which no other theatre
can exhibit the same pictures. After building a drive-in theatre about 11 miles from San
Bernardino, Beacon notified Fox that it considered contracts barring simultaneous exhibitions of
first-run films in the two theatres to be overt acts in violation of the antitrust laws. Fox’s
complaint alleged that this notification, together with threats of treble damage suits against Fox
and its distributors, gave rise to ‘duress and coercion’ which deprived Fox of a valuable property
right, the right to negotiate for exclusive first-run contracts. Unless Beacon was restrained, the
complaint continued, irreparable harm would result. Accordingly, … its pleading was styled a
278
‘Complaint for Declaratory Relief,’ [whereby] Fox prayed both for a declaration that a grant of
clearance between the Fox and Beacon theatres is reasonable and not in violation of the antitrust
laws, and for an injunction, pending final resolution of the litigation, to prevent Beacon from
instituting any action under the antitrust laws against Fox and its distributors arising out of the
controversy alleged in the complaint. Beacon filed an answer, [and] a counterclaim against
Fox…. These denied the threats [claimed by Fox] and asserted that there was no substantial
competition between the two theatres, that the clearances granted [by private contract] were
therefore unreasonable, and that a conspiracy existed between Fox and its distributors to
manipulate contracts and clearances so as to restrain trade and monopolize first-run pictures in
violation of the antitrust laws. Treble damages were asked [for in Beacon’s counterclaim] .
Beacon demanded a jury trial of the factual issues in the case as provided by Federal Rule
of Civil Procedure 38(b). The District Court, however, viewed the issues raised by the
‘Complaint for Declaratory Relief,’ including the question of competition between the two
theatres, as essentially equitable. … [I]t directed that these issues be tried to the court…. A
common issue of the ‘Complaint for Declaratory Relief,’ the counterclaim, and the cross-claim
was the reasonableness of the clearances granted to Fox, which depended, in part, on the
existence of competition between the two theatres. Thus the effect of the action of the District
Court could be, as the Court of Appeals believed, ‘to limit the petitioner’s [Beacon’s]
opportunity fully to try to a jury every issue which has a bearing upon its treble damage suit.’ …
The District Court’s finding that the Complaint for Declaratory Relief presented basically
equitable issues draws no support from the Declaratory Judgment Act, 28 U.S.C. s 2201[a];
Fed.Rules Civ.Proc. 57. That statute, while allowing prospective defendants to sue to establish
their nonliability, specifically preserves the right to jury trial for both parties. It follows that if
Beacon would have been entitled to a jury trial in a treble damage suit against Fox it cannot be
deprived of that right merely because Fox took advantage of the availability of declaratory relief
to sue Beacon first. Since the right to trial by jury applies to treble damage suits under the
antitrust laws, and is, in fact, an essential part of the congressional plan for making competition
rather than monopoly the rule of trade, the Sherman and Clayton Act issues on which Fox sought
a declaration were essentially jury questions.
Nevertheless the Court of Appeals refused to upset the order of the district judge. It held
that the question of whether a right to jury trial existed was to be judged by Fox’s complaint read
as a whole. In addition to seeking a declaratory judgment, the court said, Fox’s complaint can be
read as making out a valid plea for injunctive relief, thus stating a claim traditionally cognizable
in equity. …[I]t invoked the principle that a court sitting in equity could retain jurisdiction even
though later a legal remedy became available. In such instances the equity court had discretion to
enjoin the later lawsuit in order to allow the whole dispute to be determined in one case in one
court [italics added]. … [T]he Court of Appeals held it was not an abuse of discretion for the
district judge … to try the equitable cause first even though this might … prevent a full jury trial
of the counterclaim … which … [was] as effectively stopped as by an equity injunction.
...
Viewed in this manner, the use of discretion by the trial court … to deprive Beacon of a
full jury trial on its counterclaim …, as well as on Fox’s plea for declaratory relief, cannot be
justified. Under the Federal Rules the same court may try both legal and equitable causes in the
same action. Fed.Rules Civ.Proc. … 2 …. Thus any defenses, equitable or legal, Fox may have
to charges of antitrust violations can be raised either in its suit for declaratory relief or in answer
to Beacon’s counterclaim. On proper showing, harassment by threats of other suits, or other suits
279
actually brought, involving the issues being tried in this case, could be temporarily enjoined
pending the outcome of this litigation. Whatever permanent injunctive relief Fox might be
entitled to on the basis of the decision in this case could, of course, be given by the court after
the jury renders its verdict [italics added]. In this way the issues between these parties could be
settled in one suit giving Beacon a full jury trial of every antitrust issue. By contrast, the holding
of the court below … would compel Beacon to split his antitrust case, trying part to a judge and
part to a jury.10 Such a result, which involves … Fox’s own legal claim for declaratory relief as
well as of the counterclaim which Beacon was compelled by the Federal Rules to bring,11 is not
permissible.
Our decision is consistent with the plan of the Federal Rules and the Declaratory
Judgment Act to effect substantial procedural reform while retaining a distinction between jury
and nonjury issues and leaving substantive rights unchanged. … Thus, the justification for
equity’s deciding legal issues once it obtains jurisdiction, and refusing to dismiss a case, merely
because subsequently a legal remedy becomes available, must be re-evaluated in the light of the
liberal joinder provisions of the Federal Rules which allow legal and equitable causes to be
brought and resolved in one civil action. … This is not only in accord with the spirit of the Rules
and the Act but is required by the provision in the Rules that ‘(t)he right of trial by jury as
declared by the Seventh Amendment to the Constitution or as given by a statute of the United
States shall be preserved … inviolate.’16
… As this Court said [citation omitted]: ‘In the Federal courts this (jury) right cannot be
dispensed with, except by the assent of the parties entitled to it; nor can it be impaired by any
blending with a claim, properly cognizable at law, of a demand for equitable relief in aid of the
legal action, or during its pendency.’
...
The judgment of the Court of Appeals is reversed.
...
Mr. Justice Stewart, with whom Mr. Justice Harlan and Mr. Justice Whittaker concur,
dissenting.
… The district judge simply exercised his inherent discretion, now explicitly confirmed
by the Federal Rules of Civil Procedure, to schedule the trial of an equitable claim in advance of
an action at law. …1 In any event no abuse of discretion is apparent in this case.
The Court of Appeals found that the complaint, although inartistically drawn, contained
allegations entitling the petitioner to equitable relief.2, 3
10
Since the issue of violation of the antitrust laws often turns on the reasonableness of a restraint on trade
in the light of all the facts, it is particularly undesirable to have some of the relevant considerations tried by one
factfinder and some by another.
11
Fed.Rules Civ.Proc., 13(a).
16
[As you learned in the Choice of Law segment of this course:] In delegating to the Supreme Court
responsibility for drawing up rules, Congress declared that: ‘Such rules shall not abridge, enlarge or modify any
substantive right and shall preserve the right of trial by jury as at common law and as declared by the Seventh
Amendment to the Constitution.’ 28 U.S.C.A. s[ection] 2072. …
1
... The complaint filed by Fox stated a claim traditionally cognizable in equity. That claim, in brief, was
that Beacon had wrongfully interfered with the right of Fox to compete freely with Beacon and other distributors for
the licensing of films for first-run exhibition in the San Bernardino area. The complaint alleged that the plaintiff was
without an adequate remedy at law and would be irreparably harmed unless the defendant were restrained from
continuing to interfere—by coercion and threats of litigation—with the plaintiff’s lawful business relationships.
280
That finding is accepted in the prevailing opinion today. If the [Fox equity] complaint
had been answered simply by a general denial, therefore, the issues would under traditional
principles have been triable as a proceeding in equity. Instead of just putting in issue the
allegations of the complaint, however, Beacon filed pleadings which affirmatively alleged the
existence of a broad conspiracy among the plaintiff and other theatre owners to monopolize the
first-run exhibition of films in the San Bernardino area to refrain from competing among
themselves, and to discriminate against Beacon in granting film licenses. Based upon these
allegations, Beacon asked damages in the amount of $300,000. Clearly these conspiracy
allegations stated a cause of action triable as of right by a jury. What was demanded by Beacon,
however, was a jury trial not only of this cause of action, but also of the issues presented by the
original complaint.
Assuming the existence of a factual issue common both to the plaintiff’s original action
and the defendant’s counterclaim for damages, I cannot agree that the District Court must be
compelled to try the counterclaim first. It is, of course, a matter of no great moment in what
order the issues between the parties in the present litigation are tried. What is disturbing is the
process by which the Court arrives at its decision—a process which appears to disregard the
historic relationship between equity and law.
I.
2
Upon motion of Fox the trial judge ordered the original action for declaratory and equitable relief to be
tried separately to the court and in advance of the trial of the defendant’s counter-claim…. The court’s order, which
carefully preserved the right to trial by jury upon the conspiracy and damage issues raised by the counterclaim …,
was in conformity with the specific provisions of the Federal Rules of Civil Procedure. 3 Yet it is decided today that
the Court of Appeals must compel the district judge to rescind it.
3
Rule 42(b) provides: ‘(b) Separate Trials. The court in furtherance of convenience or to avoid prejudice
may order a separate trial of any claim, cross-claim, counterclaim, or third-party claim, or of any separate issue or of
any number of claims, cross-claims, counterclaims, third-party claims, or issues.’ The Note to Rule 39 of the
Advisory Committee on Rules states that, ‘When certain of the issues are to be tried by jury and others by the court,
the court may determine the sequence in which such issues shall be tried.’ This language was at one time contained
in a draft of the Rules, but was deleted because ‘the power is adequately given by Rule 42(b)….’ See also Rule 57,
which provides, inter alia, that ‘The court may order a speedy hearing of an action for a declaratory judgment and
may advance it on the calendar.’
281
...
It has been an established rule ‘that equitable jurisdiction existing at the filing of a bill
[complaint in equity] is not destroyed because an adequate legal remedy may have become
available thereafter.’ It has also been long settled that the District Court in its discretion may
order the trial of a suit in equity in advance of an action at law between the same parties, even if
there is a factual issue common to both.8
...
III.
The Court today sweeps away these basic principles as ‘precedents decided under
discarded procedures.’ It suggests that the Federal Rules of Civil Procedure have somehow
worked an ‘expansion of adequate legal remedies’ so as to oust the District Courts of equitable
jurisdiction, as well as to deprive them of their traditional power to control their own dockets.
But obviously the Federal Rules could not and did not ‘expand’ the substantive law one whit.10
Like the Declaratory Judgment Act, the Federal Rules preserve inviolate the right to trial
by jury in actions historically cognizable at common law, as under the Constitution they must.
They do not create a right of trial by jury where that right ‘does not exist under the Constitution
or statutes of the United States.’ Since Beacon’s counterclaim was compulsory under the Rules,
it is apparent that by filing it Beacon could not be held to have waived its jury rights. But neither
can the counterclaim be held to have transformed Fox’s original complaint into an action at law.
The Rules make possible the trial of legal and equitable claims in the same proceeding, but they
expressly affirm the power of a trial judge to determine the order in which claims shall be heard..
Certainly the Federal Rules were not intended to undermine the basic structure of equity
jurisprudence, developed over the centuries and explicitly recognized in the United States
Constitution.
Notes and Questions:
1. How does one claim the right to jury trial in a lawsuit? Can the Seventh Amendment
right to jury trial be waived? Can the trial judge nevertheless authorize a jury trial?
2. What rule did the Beacon court announce? Did its ruling preclude the trial judge from
issuing an injunction in this (or a like) case? So who is the fact-finder[s]? ……………………….
3. The dissent accuses the majority of transforming Fox’s equity complaint into a legal
one. Do you agree? Can it be argued that—because juries do not render injunctions—that there is
still a determination the judge may make, after the jury returns its verdict?
8
… ‘A court has control over its own docket. … In the exercise of a sound discretion it may hold one
lawsuit in abeyance to abide the outcome of another, especially where the parties and the issues are the same …
[Supreme Court citation omitted].
10
Congressional authorization of the Rules expressly provided that ‘Said rules shall neither abridge,
enlarge, nor modify the substantive rights of any litigant.’ See 28 U.S.C. s[ection] 2072.
282
DAIRY QUEEN, INC. v. WOOD
United States Supreme Court
369 U.S. 469 (1962)
Mr. Justice Black delivered the [unanimous, with a concurring] opinion of the Court.
The United States District Court for the Eastern District of Pennsylvania granted a
motion to strike petitioner’s demand for a trial by jury in an action now pending before it on the
alternative grounds that either the action was ‘purely equitable’ or, if not purely equitable,
whatever legal issues that were raised were ‘incidental’ to equitable issues, and, in either case, no
right to trial by jury existed. The petitioner then sought mandamus in the Court of Appeals for
the Third Circuit to compel the district judge to vacate this order. When that court denied this
request without opinion, we granted certiorari because the action of the Court of Appeals seemed
inconsistent with protections already clearly recognized for the important constitutional right to
trial by jury in our previous decisions.
At the outset, we may dispose of one of the grounds upon which the trial court acted in
striking the demand for trial by jury—that based upon the view that the right to trial by jury may
be lost as to legal issues where those issues are characterized as ‘incidental’ to equitable issues—
for our previous decisions make it plain that no such rule may be applied in the federal courts.
...
A Dairy Queen store in Pennsylvania, circa 1960.
Source: <http://www.triblocal.com/joliet/files/cache/2011/05/251.jpg/460_345_resize.jpg>
Reprinted with Permission of Dairy Queen International
The holding in Beacon Theatres was that where both legal and equitable issues are presented in a
single case, ‘only under the most imperative circumstances, circumstances which in view of the
flexible procedures of the Federal Rules we cannot now anticipate, can the right to a jury trial of
legal issues be lost through prior determination of equitable claims.’ That holding, of course,
applies whether the trial judge chooses to characterize the legal issues presented as ‘incidental’ to
equitable issues or not.8 Consequently, in a case such as this where there cannot even be a
‘It is therefore immaterial that the case at bar contains a stronger basis for equitable relief than was
present in Beacon Theatres. It would make no difference if the equitable cause clearly outweighed the legal cause so
8
283
contention of such ‘imperative circumstances,’ Beacon Theatres requires that any legal issues for
which a trial by jury is timely and properly demanded be submitted to a jury. There being no
question of the timeliness or correctness of the demand involved here, the sole question which
we must decide is whether the action now pending before the District Court contains legal issues.
The District Court proceeding arises out of a controversy between petitioner and the
respondent owners of the trademark ‘DAIRY QUEEN’ with regard to a written licensing
contract made by them in December 1949, under which petitioner [Wood] agreed to pay some
$150,000 for the exclusive right to use that trademark in certain portions of Pennsylvania. The
terms of the contract provided for a small initial payment with the remaining payments to be
made at the rate of 50% of all amounts received by petitioner on sales and franchises to deal with
the trademark and, in order to make certain that the $150,000 payment would be completed
within a specified period of time, further provided for minimum annual payments regardless of
petitioner’s receipts. In August 1960, the respondents wrote petitioner a letter in which they
claimed that petitioner had committed ‘a material breach of that contract’ by defaulting on the
contract’s payment provisions and notified petitioner of the termination of the contract and the
cancellation of petitioner’s right to use the trademark unless this claimed default was remedied
immediately. When petitioner continued to deal with the trademark despite the notice of
termination, the respondents brought an action based upon their view that a material breach of
contract had occurred.
The complaint filed in the District Court alleged, among other things, that petitioner had
‘ceased paying … as required in the contract;’ that the default ‘under the said contract … (was)
in excess of $60,000.000;’ that this default constituted a ‘material breach’ of that contract; that
petitioner had been notified by letter that its failure to pay as alleged made it guilty of a material
breach of contract which if not ‘cured’ would result in an immediate cancellation of the contract;
that the breach had not been cured but that petitioner was contesting the cancellation and
continuing to conduct business as an authorized dealer; that to continue such business after the
cancellation of the contract constituted an infringement of the respondents’ trademark; that
petitioner’s financial condition was unstable; and that because of the foregoing allegations,
respondents were threatened with irreparable injury for which they had no adequate remedy at
law. The complaint then prayed for both temporary and permanent relief, including: (1)
temporary and permanent injunctions to restrain petitioner from any future use of or dealing in
the franchise and the trademark; (2) an accounting to determine the exact amount of money
owing by petitioner and a judgment for that amount; and (3) an injunction pending accounting to
prevent petitioner from collecting any money from ‘Dairy Queen’ stores in the territory.
In its answer to this complaint, petitioner raised a number of defenses, including: (1) a
denial that there had been any breach of contract, apparently based chiefly upon its allegation
that in January 1955 the parties had entered into an oral agreement modifying the original written
contract by removing the provision requiring minimum annual payments regardless of
petitioner’s receipts thus leaving petitioner’s only obligation that of turning over 50% of all its
receipts; (2) laches and estoppel arising from respondents’ failure to assert their claim promptly,
thus permitting petitioner to expend large amounts of money in the development of its right to
use the trademark; and (3) alleged violations of the antitrust laws by respondents in connection
that the basic issue of the case taken as a whole is equitable. As long as any legal cause is involved the jury rights it
creates control. This is the teaching of Beacon Theatres, as we construe it.’
284
with their dealings with the trademark. Petitioner indorsed upon this answer a demand for trial by
jury in accordance with Rule 38(b) of the Federal Rules of Civil Procedure.11
Petitioner’s contention … is that insofar as the complaint requests a money judgment it
presents a claim which is unquestionably legal. …
The respondents’ contention that this money claim is ‘purely equitable’ is based primarily
upon the fact that their complaint is cast in terms of an ‘accounting,’ rather than in terms of an
action for ‘debt’ or ‘damages.’ But the constitutional right to trial by jury cannot be made to
depend upon the choice of words used in the pleadings. The necessary prerequisite to the right to
maintain a suit for an equitable accounting, like all other equitable remedies, is, as we pointed
out in Beacon Theaters, the absence of an adequate remedy at law. Consequently, in order to
maintain such a suit on a cause of action cognizable at law, as this one [in Dairy Queen] is, the
plaintiff must be able to show that the ‘accounts between the parties’ are of such a ‘complicated
nature’ that only a court of equity can satisfactorily unravel them.a In view of the powers given
to District Courts by Federal Rule of Civil Procedure 53(b) to appoint masters to assist the jury
in those exceptional cases where the legal issues are too complicated for the jury adequately to
handle alone, the burden of such a showing is considerably increased and it will indeed be a rare
case in which it can be met. But be that as it may, this is certainly not such a case. A jury, under
proper instructions from the court, could readily determine the recovery, if any, to be had here,
whether the theory finally settled upon is that of breach of contract, that of trademark
infringement, or any combination of the two. The legal remedy cannot be characterized as
inadequate merely because the measure of damages may necessitate a look into petitioner’s
business records.
Nor is the legal claim here rendered ‘purely equitable’ by the nature of the defenses
interposed by petitioner. Petitioner’s primary defense to the charge of breach of contract—that is,
that the contract was modified by a subsequent oral agreement—presents a purely legal question
having nothing whatever to do either with novation, as the district judge suggested, or
reformation, as suggested by the respondents here. Such a defense goes to the question of just
what, under the law, the contract between the respondents and petitioner is and, in an action to
collect a debt for breach of a contract between these parties, petitioner has a right to have the jury
determine not only whether the contract has been breached and the extent of the damages if any
but also just what the contract is.
We conclude therefore that the district judge erred in refusing to grant petitioner’s
demand for a trial by jury on the factual issues related to the question of whether there has been a
breach of contract. Since these issues are common with those upon which respondents’ claim to
equitable relief is based, the legal claims involved in the action must be determined prior to any
final court determination of respondents’ equitable claims.20 The Court of Appeals should have
‘Any party may demand a trial by jury of any issue triable of right by a jury by serving upon the other
parties a demand therefor in writing at any time after the commencement of the action and not later than 10 days
after the service of the last pleading directed to such issue. Such demand may be indorsed upon a pleading of the
party.’
a
The Court did not resolve this looming sub-issue on these facts. This is, however, your first notice that
there may be a complexity exception to the Seventh Amendment—to be addressed in the next assigned case
(Japanese Electronics).
20
This does not, of course, interfere with the District Court's power to grant temporary relief pending a
final adjudication on the merits. Such temporary relief has already been granted in this case and is no part of the
issues before this Court.
11
285
corrected the error of the district judge by granting the petition for mandamus. The judgment is
therefore reversed and the cause remanded for further proceedings consistent with this opinion.
Reversed and remanded [for jury trial of the “at law” money damage issues].
...
Mr. Justice Harlan, whom Mr. Justice Douglas joins, concurring.
I am disposed to accept the view, strongly pressed at the bar, that this complaint seeks an
accounting for alleged trademark infringement, rather than contract damages. Even though this
leaves the complaint as formally asking only for equitable relief, this does not end the inquiry.
The fact that an ‘accounting’ is sought is not of itself dispositive of the jury trial issue. … It is
manifest from the face of the complaint that the ‘accounting’ sought in this instance is not of
either variety [exclusively patent infringement or contract]. A jury, under proper instructions
from the court, could readily calculate the damages flowing from this alleged trademark
infringement, just as courts of law often do in copyright and patent cases.
Consequently what is involved in this case is nothing more than a joinder in one
complaint of prayers for both legal and equitable relief. In such circumstances, … the petitioner
cannot be deprived of his constitutional right to a jury trial on the ‘legal’ claim contained in the
complaint.
On this basis I concur in the judgment of the Court.
Notes and Questions:
1. The three basic charging allegations of the DQ complaint seek an accounting from
defendant Woods. An accounting action—then, and now—is an action inequity. Why, then, is
there a Seventh Amendment issue?
2. This complaint sought primarily equitable relief: an accounting, which is historically
(and today) a claim arising in equity. But “legal relief”—i.e. money damages—was also sought.
The latter was incidental to the main relief plaintiff Dairy Queen sought. Prior to Dairy Queen, a
federal judge could decide the entire case, including such incidental monetary relief. Building
upon the Beacon Theaters framework, what rule can you articulate as the essential holding in
Dairy Queen? (The latter case thus sealed a form of legal loophole left open by Beacon.)
286
IN RE JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION
United States Court of Appeals, Third Circuit
631 F.2d 1069 (1980)
Seitz, Chief Judge [delivered the court’s 2-1 opinion].
This certified interlocutory appeal from a pretrial order of the district court raises an issue
that currently is the subject of much debate: In an action … under the antitrust and antidumping
laws, do the parties have a right to trial by jury without regard to the practical ability of a jury to
decide the case properly?
I.
This litigation began in the District of New Jersey with the complaint of National Union
Electric Corp. (NUE). … NUE was a major domestic producer of television receivers until
February 1970. The following December, it filed the first complaint of this litigation, charging
several of its Japanese competitors with violations of the antitrust laws and the laws governing
competition [“dumping”] in international trade. The complaint names as defendants the
Mitsubishi Corp., which is a Japanese trading company, and seven Japanese television
manufacturers: Matsushita Electric Industrial Co., Toshiba Corp., Hitachi, Ltd., Sharp Corp.,
Mitsubishi Electric Corp., Sanyo Electric Co., and Sony Corp. Nine subsidiaries of these
companies also are named as defendants in NUE’s action.
NUE alleges that the defendants have sought to drive American television producers out
of the American market by selling televisions at artificially depressed prices. Charging that
defendants have maintained lower prices for televisions sold in the United States than for
comparable televisions sold in Japan, NUE asserts violations of the 1916 Antidumping Act. NUE
further alleges that these dumping practices are part of a large conspiracy in which defendants
have agreed among themselves and have acted in concert with over 90 coconspirators around the
world to maintain artificially low prices for Japanese televisions sold in the United States. …
...
Zenith Radio Corp., a major domestic producer of consumer electronic products, filed the
second complaint of this litigation.
...
A group of the Japanese defendants in the Zenith action filed two counterclaims. The first
charges Zenith and its distributors throughout the United States with territorial allocations,
horizontal and vertical price-fixing schemes, “key dealer preferences,” and price discrimination,
in violation of … the Sherman Act and the Robinson-Patman Act. The second counterclaim
charges Zenith and about 30 coconspirators with maintaining a program of sham litigation
against Zenith’s competitors.
Sears filed a separate counterclaim challenging Zenith’s advertising claims that Zenith
color televisions are manufactured in the United States. Sears claims that the advertisements
create an impression that all components of Zenith’s color televisions and other consumer
electronic products are of American origin, when some components are manufactured abroad. …
Shortly after the filing of the Zenith action, the two suits were consolidated for pretrial
proceedings in the Eastern District of Pennsylvania. Subsequently, the district court, on NUE’s
motion, consolidated the two suits for trial. …
Both NUE and Zenith made timely demands for jury trial. Fourteen of the defendants
moved to strike the demands, arguing that the case is too large and complex for a jury. The
district court denied their motion, concluding that the seventh amendment does not recognize the
287
complexity of a lawsuit as a valid reason for denying a jury trial. The court explained its
reasoning in a thorough and scholarly opinion, and certified its order for interlocutory appeal….
We have permitted the appeal to determine whether the district court’s reason for denying
appellants’ motion was correct.
II.
Appellants argue that the proof of the foregoing claims will be too burdensome and
complicated for a jury. They have cited several dimensions of complexity.
The district court accepted one of appellants’ basic contentions: the trial will be
protracted. The court predicted that the trial would last a full year. It noted that the parties are
nearing the end of discovery, which after nine years has produced millions of documents and
over 100,000 pages of depositions. The court did not estimate how much of this evidence will be
introduced at trial.
...
The conspiracy charged in this suit is massive. Appellees allege that it has lasted for at
least 30 years, involved almost 100 firms around the world, and affected international trade in
several consumer electronic products. Appellants argue that litigation of the existence and
operation of this conspiracy will produce an enormous amount of evidence for the jury to
consider. They see further difficulties in the fact that the alleged conspiracy involved Japanese
businessmen and that its operations included restraint of trade in Japanese markets. Appellants
fear that a jury might not understand the evidence due to the difficulty of understanding business
practices and market conditions in Japan. Appellees respond that proof of the conspiracy and its
operations will be simple because the facts are well established in unambiguous documentation.
Appellees foresee no difficulties due to allegations involving Japan. They characterize the
alleged conspiracy as “classic,” much like combinations ordinarily revealed in Sherman Act
cases.
...
Finally, appellants argue that the complexity of the suit will be compounded by the
presence of some issues that conceptually are very difficult. The claims … will require proof of
predatory intent. … [A]ppellees will have to prove relevant product markets, relevant geographic
markets, and market shares. Zenith’s [counter-claims … will raise issues of whether products
sold to different customers are of a “like grade and quality” and whether any price differences
are cost justified.
...
The district court [said:] “We expect that the actual size of complexity of this litigation
falls somewhere in between the two extremes portrayed by the parties.” The court added, “By
any yardstick, this case is at least as large and complex as the others in which jury demands have
been struck (on grounds of complexity).” It then proceeded to the conclusion that the seventh
amendment preserves the right to jury trial in this suit regardless of its complexity [italics
added]. That construction of the seventh amendment is the focus of this appeal.
III.
...
The Senate’s [1890] debate on the earlier Sherman Act provision contains a few passages
in which a senator mentions, in the course of discussing some other issue, that juries will hear
treble damage actions. ...
In short, the legislative history indicates nothing more than the expectation of several
congressmen that the seventh amendment generally would guarantee a right to jury trial in treble
288
damage actions under the antitrust laws. We are unable to translate their expectations of the
ordinary application of the seventh amendment into an intention to require jury trial by statute.
...
Appellants offer two grounds for ruling that the seventh amendment does not guarantee a
jury trial in this case, one of which does not depend upon characterizing the suit as equitable.
That is the argument based on the due process clause.
...
For the sake of clarity, we should state our understanding of complexity in this context. A
suit is too complex for a jury when circumstances render the jury unable to decide in a proper
manner. The law presumes that a jury will find facts and reach a verdict by rational means. It
does not contemplate scientific precision but does contemplate a resolution of each issue on the
basis of a fair and reasonable assessment of the evidence and a fair and reasonable application of
the relevant legal rules. A suit might be excessively complex as a result of any set of
circumstances which singly or in combination render a jury unable to decide in the foregoing
rational manner. Examples of such circumstances are an exceptionally long trial period and
conceptually difficult factual issues.
Some district courts have recognized complexity as a grounds for denying jury trial. On
the other hand, the Ninth Circuit recently has held that the seventh amendment applies without
regard to a lawsuit’s size or complexity.
The Supreme Court has supplied direct support for appellants’ position only in a footnote
to its opinion in Ross v. Bernhard :
As our cases indicate, the “legal” nature of an issue is determined by considering,
first, the pre-merger custom with reference to such questions; second, the remedy sought;
and, third, the practical abilities and limitations of juries [italics added].
The [italicized] third prong of the [Ross] test plainly recognizes the significance, for purposes of
the seventh amendment, of the possibility that a suit may be too complex for a jury. Its inclusion
in the three prong test strongly suggests that jury trial might not be guaranteed in extraordinarily
complex cases….
The district court [in this case] made no use of the Ross footnote, finding it too brief to
authorize a major departure from the traditional construction of the seventh amendment. We also
find it unlikely that the Supreme Court would have announced an important new application of
the seventh amendment in so cursory a fashion. Yet, at the very least, the Court has left open the
possibility that the “practical abilities and limitation of juries” may limit the range of suits
subject to the seventh amendment and has read its prior seventh amendment decisions as not
precluding such a ruling. With this understanding of Ross, we shall consider the merits of
appellants’ arguments for a complexity exception.
V.
Appellants’ first argument relies on historical analysis to advance the proposition that the
fact of extraordinary complexity renders a suit equitable in nature. Although complexity is not
commonly recognized as a defining feature of equity, appellants argue that by the time of the
adoption of the seventh amendment the chancellor’s jurisdiction had extended to any suit that he
found too complex for a jury. They have submitted a large body of historical authorities to
support this proposition. The brief of International Business Machines Corporation, amicus
289
curiae in this case, provides some additional historical authorities to support several of
appellants’ arguments.
A.
Most of these authorities are suits seeking relief in the form of an [equitable] accounting
between the parties.
. . . ..........................................................................
Suits … under the antitrust and antidumping laws are similar in form to suits for damages
in tort. They impose liability for money damages.... Hence, the present lawsuit is most similar to
actions in which an equitable accounting was unavailable. Appellants’ analogy, therefore, fails.
B.
Appellants also cite a variety of cases that do not involve accountings. They claim that in
each of these cases the chancellor took [equitable] jurisdiction because extraordinary complexity
made the suit too complex for a common-law jury.
...
Whether or not … these conclusions … [are] correct is a question that may interest
historians; we need not decide it here. ... With this meager support, we cannot conclude that
complexity alone ever was an established basis of equitable jurisdiction.
...
VI.
Both appellants and IBM offer a second constitutional argument. They contend that the
due process clause of the fifth amendment prohibits trial by jury of a suit that is too complex for
a jury. They further contend that this due process limitation prevails over the seventh
amendment’s preservation of the right to jury trial.
Although no specific precedent exists for a finding a due process violation in the trial of
any case to a jury, the principles that define the procedural requirements of due process would
seem to impose some limitations on the range of cases that may be submitted to a jury. The
primary value promoted by due process in fact-finding procedures is “to minimize the risk of
erroneous decisions.” A jury that cannot understand the evidence and the legal rules to be applied
provides no reliable safeguard against erroneous decisions. Moreover, in the context of a
completely adversary proceeding, like a civil trial, due process requires that “the decisionmaker’s conclusion ... rest solely on the legal rules and evidence adduced at the hearing.” Unless
the jury can understand the legal rules and evidence, we cannot realistically expect that the jury
will rest its decision on them.
As we have noted, the law presumes that a jury will decide rationally; it will resolve each
disputed issue on the basis of a fair and reasonable assessment of the evidence and a fair and
reasonable application of relevant legal rules. We conclude that due process precludes trial by
jury when a jury is unable to perform this task with a reasonable understanding of the evidence
and the legal rules.
If a particular lawsuit is so complex that a jury cannot satisfy this requirement of due
process but is nonetheless an action at law, we face a conflict between the requirements of the
fifth and seventh amendments. In this situation, we must balance the constitutionally protected
interest, as they are implicated in this particular context, and reach the most reasonable
accommodation between the two constitutional provisions.
The due process objections to jury trial of a complex case implicate values of
fundamental importance. If judicial decisions are not based on factual determinations bearing
some reliable degree of accuracy, legal remedies will not be applied consistently with the
290
purposes of the laws. There is a danger that jury verdicts will be erratic and completely
unpredictable, which would be inconsistent with evenhanded justice. Finally, unless the jury can
understand the evidence and the legal rules sufficiently to rest its decision on them, the objective
of most rules of evidence and procedure in promoting a fair trial will be lost entirely. We believe
that when a jury is unable to perform its decision-making task with a reasonable understanding
of the evidence and legal rules, it undermines the ability of a district court to render basic justice.
The loss of the right to jury trial in a suit found too complex for a jury does not implicate
the same fundamental concerns. The absence of a jury trial requirement in equitable and
maritime actions indicates that federal courts can provide fair trials and can grant relief in
accordance with the principles of basic justice without the aid of a jury. Moreover, the Supreme
Court has consistently refused to rule that preservation of civil jury trial is an essential element of
ordered liberty required of the states by the due process clause of the fourteenth amendment.
...
The district court asserted that the due process argument fails to account for the special
benefits that juries bring to civil litigation. Because the jury is a representative of the community
and can call upon the community’s wisdom and values, the legal system has relied on it to
perform two important functions. The first is “black box” decision-making. The jury issues a
verdict without an opinion to explain or justify its decision. This feature allows juries to perform
a type of “jury equity,” modifying harsh results of law to conform to community values in cases
where a judge would have to apply the law rigidly. The second function is to accord a greater
measure of legitimacy to decisions that depend upon determinations of degree rather than of
absolutes, such as whether particular conduct constitutes negligence. Certain decisions of this
“line-drawing” nature seem less arbitrary when made by a representative body like the jury.
In the context of a lawsuit of the complexity that we have posited, however, these
features do not produce real benefits of substantial value. The function of “jury equity” may be
legitimate when the jury actually modifies the law to conform to community values. However,
when the jury is unable to determine the normal application of the law to the facts of a case and
reaches a verdict on the basis of nothing more than its own determination of community wisdom
and values, its operation is indistinguishable from arbitrary and unprincipled decision-making.
Similarly, the “line-drawing” function is difficult to justify when the jury cannot understand the
evidence or legal rules relevant to the issue of where to draw a line.
The district court also noted that preservation of the right to jury trial is important
because the jury “provides a needed check on judicial power.” A jury unable to understand the
evidence and legal rules is hardly a reliable and effective check on judicial power. Our liberties
are more secure when judicial decision-makers proceed rationally, consistently with the law, and
on the basis of evidence produced at trial. If the jury is unable to function in this manner, it has
the capacity of becoming itself a tool of arbitrary and erratic judicial power.
Therefore, we find the most reasonable accommodation between the requirements of the
fifth and seventh amendments to be a denial of jury trial when a jury will not be able to perform
its task of rational decision-making with a reasonable understanding of the evidence and the
relevant legal standards. In lawsuits of this complexity, the interests protected by this procedural
rule of due process carry greater weight than the interests served by the constitutional guarantee
of jury trial. Consequently, we shall not read the seventh amendment to guarantee the right to
jury trial in these suits.
VII.
291
The district court devoted most of its discussions of appellants’ due process argument not
to factors relevant to the balancing of interests set out in the foregoing section but to a number of
practical objections to the argument [italics added]. We shall consider those objections in this
section.
First, the district court challenged the premise that a case could exceed a jury’s ability to
decide rationally and asserted that a jury was at least as able as a judge, the only alternative factfinder, to decide complex cases. The court noted that a jury possesses the wisdom, experience,
and common sense of twelve persons.
...
[But a]ny assessment of a jury’s ability to decide complex cases should include
consideration not only of a jury’s particular strengths and the possible enhancement of its
capabilities but also of the particular constraints that operate on a jury in complex cases. The
long time periods required for most complex cases are especially disabling for a jury. A long trial
can interrupt the career and personal life of a jury member and thereby strain his commitment to
the jury’s task.
...
A … long trial would not greatly disrupt the professional and personal life of a judge and
should not be significantly disabling. In fact, the judge's greater ability to allocate time to the
task of deciding a complex case can be a major advantage in surmounting the difficulties posed
by the suit. Although we cannot presume that a judge will be more intelligent than a jury or more
familiar with technical subject matters, a judge will almost surely have substantial familiarity
with the process of civil litigation, as a result of experience on the bench or in practice.
...
The district court’s second objection to appellants’ due process argument was that the
court can prevent an “irrational” verdict with its power to direct a verdict or to grant judgment n.
o. v. [notwithstanding the verdict].
...
Denial of a jury trial may [instead] be necessary to minimize the risk of erroneous
decisions. … Given that substantial property rights often are at stake in actions at law, we believe
that due process requires a greater measure of reliability in the decision-making process. It
requires some fair assurance that the jury’s findings of fact and applications of legal rules are
reasonably correct. When a jury is unable to understand the evidence and the legal rules, it
cannot provide this measure of assurance.
...
Finally, the district court feared that the authority to strike jury trial demands on case-bycase determinations of complexity would lead to the long-run dilution of the right to jury trial.
...
We do not believe that a due process limitation [necessarily] allows the district courts a
substantial amount of discretion to deny jury trials. Because preservation of the right to jury trial
remains a constitutionally protected interest, denials of jury trial on grounds of complexity
should be confined to suits in which due process clearly requires a nonjury trial.
...
We further recognize a relative lack of precision in this standard, but we do not believe
that this problem threatens a dilution in the right to jury trial. We believe that district judges will
apply the standard with a good faith concern for the general preservation of the right to jury trial.
… As an added safeguard, we will require that the district court make explicit findings on the
292
dimensions of complexity when it denies a jury trial in an action at law on grounds of
complexity.
In summary, the district court’s practical objections to a due process limitation do not
compel its rejection. However, the concern for preservation of the right to jury trial should guide
its application. In suits at law, a court should deny jury trial on due process grounds only in
exceptional cases when the court, after careful inquiry into the factors contributing to
complexity, determines that a jury would be unable to understand the case and decide it
rationally. Before any such denial, due consideration should be given to the particular strengths
of the jury in deciding complex cases, to the possible use of special trial techniques to increase a
jury's capabilities, and to methods of reducing the suit's complexity.
VIII.
We turn to the disposition of this appeal. The district court concluded that “the
complexity of the case before us is not a constitutionally permissible reason for striking the
plaintiffs’ jury demands.” We are constrained to disagree.
...
Thus, the district court has not ruled on whether this particular lawsuit is too complex for
a jury to understand and decide rationally. The court relied entirely on its construction of the
seventh amendment and the due process clause. We shall vacate the court’s order [denying the
motion to strike the jury demand] on the basis of our previous discussion and shall leave for
consideration on remand the issue of the complexity of this lawsuit.
...
The order of the district court will be vacated and the case remanded for proceedings
consistent with this opinion.
Gibbons, Circuit Judge, dissenting.
… I conclude that the majority has substituted for an express guarantee in the Bill of
Rights a rule of district court discretion that in practice will be virtually unreviewable, and
therefore largely unfettered. Between Judge Becker’s opinion in the district court and that of
Chief Judge Seitz here, enough has been written that an extended separate statement is hardly
appropriate.
...
The court has now authorized pretrial denials of demands for jury trial in suits at common
law “on due process grounds ... in exceptional cases when the court, after careful inquiry into the
factors contributing to complexity, determines that a jury would be unable to understand the case
and decide it rationally.” The majority opinion attempts to objectify the factors that bear upon
complexity, but in the end the factors which are identified will permit the exercise of trial court
discretion. … Trial court discretion, moreover, in any practical sense will be completely
unreviewable. …
Part of my difficulty with the majority’s position probably results from a perception of
the nature of the judicial process and the role of juries in that process. It is often said that the
judicial process involves the search for objective truth. We have no real assurance, however, of
objective truth whether the trial is to the court or to a jury. The ... seventh amendment is not a
useless appendage to the Bill of Rights, but an important resource in maintaining the authority of
the rule of law. ... The jury is a sort of ad hoc parliament convened from the citizenry at large to
lend respectability and authority to the process. Judges are often prone to believe that they, alone,
can bear the full weight of this legitimizing function. I doubt that they can. Any erosion of
293
citizen participation in the sanctioning system is in the long run likely, in my view, to result in a
reduction in the moral authority that supports the process.
...
Notes and Questions:
1. Some of the defendants wanted a jury trial. Others did not. What might be some of the
practical arguments—for and against trial by jury?
2. As the appellate majority states: “Because preservation of the right to jury trial remains
a constitutionally protected interest, denials of jury trial on grounds of complexity should be
confined to suits in which due process clearly requires a nonjury trial.” Did the majority define
which suits would qualify?
3. The appellate court stated that the trial court did not actually rule on the applicability
of the complexity exception to this case. Did the appellate court do so?
4. The Courts of Appeals are divided on whether Fifth Amendment Due Process trumps
the Seventh Amendment right to jury trial. One wonders whether the Supreme Court will ever
grant certiorari to resolve the complexity exception’s constitutional viability.
5. You are now on the Supreme Court. You’ve read (heard) the arguments. How will you
vote?
294
ATLAS ROOFING COMPANY
v.
OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
United States Supreme Court
430 U.S. 442 (1977)
Mr. Justice White delivered the [unanimous] opinion of the Court.a
The issue in these cases is whether, consistent with the Seventh Amendment, Congress
may create a new cause of action … for civil penalties enforceable in an administrative agency
where there is no jury trial.
I
After extensive investigation, Congress concluded, in 1970, that work-related deaths and
injuries had become a ‘drastic’ national problem. Finding the existing state statutory remedies as
well as state common-law actions for negligence and wrongful death to be inadequate to protect
the employee population from death and injury due to unsafe working conditions, Congress
enacted the Occupational Safety and Health Act of 1970 (OSHA or Act). The Act created a new
statutory duty to avoid maintaining unsafe or unhealthy working conditions, and empowers the
Secretary of Labor to promulgate health and safety standards. Two new remedies were provided
permitting the Federal Government, proceeding before an administrative agency, (1) to obtain
abatement orders requiring employers to correct unsafe working conditions and (2) to impose
civil penalties on any employer maintaining any unsafe working condition. Each remedy exists
whether or not an employee is actually injured or killed as a result of the condition, and existing
state statutory and common-law remedies for actual injury and death remain unaffected.
Under the Act, inspectors, representing the Secretary of Labor, are authorized to conduct
reasonable safety and health inspections. If a violation is discovered, the inspector, on behalf of
the Secretary, issues a citation to the employer fixing a reasonable time for its abatement and, in
his discretion, proposing a civil penalty. Such proposed penalties may range from nothing for de
minimis and non-serious violations, to not more than $1,000 for serious violations, to a
maximum of $10,000 for willful or repeated violations.
If the employer wishes to contest the penalty or the abatement order, he may do so by
notifying the Secretary of Labor within 15 days, in which event the abatement order is
automatically stayed. An evidentiary hearing is then held before an administrative law judgeb of
the Occupational Safety and Health Review Commission. The Commission consists of three
members, appointed for six-year terms, each of whom is qualified ‘by reason of training,
education or experience’ to adjudicate contested citations and assess penalties. At this hearing
the burden is on the Secretary to establish the elements of the alleged violation and the propriety
of his proposed abatement order and proposed penalty; and the judge is empowered to affirm,
modify, or vacate any or all of these items, giving due consideration in his penalty assessment to
‘the size of the business of the employer ..., the gravity of the violation, the good faith of the
employer, and the history of previous violations.’ The judge’s decision becomes the
The term “fact-finding” was substituted for “factfinding” throughout this opinion.
Administrative law judge (ALJ) proceedings are generally described at 5 USC §556. Unlike Article III
judges—who are appointed (for life) by the President, and confirmed by the Senate—ALJs serve at the pleasure of
the administrative agency that employs them. Each is ostensibly quite familiar with the statutes and regulations of
the government agency within which they serve. Article III judges typically do not have this special regulatoryrelated expertise in a regulated field.
a
b
295
Commission’s final and appealable order unless within 30 days a Commissioner directs that it be
reviewed by the full Commission.3
If review is granted, the Commission’s subsequent order directing abatement and the
payment of any assessed penalty becomes final unless the employer timely petitions for judicial
review in the appropriate court of appeals. The Secretary similarly may seek review of
Commission orders, but, in either case, ‘(t)he findings of the Commission with respect to
questions of fact, if supported by substantial evidence on the record considered as a whole, shall
be conclusive.’ If the employer fails to pay the assessed penalty, the Secretary may commence a
collection action in a federal district court in which neither the fact of the violation nor the
propriety of the penalty assessed may be retried. Thus, the penalty may be collected without the
employer’s ever being entitled to a jury determination of the facts constituting the violation.
II
Petitioners were separately cited by the Secretary and ordered immediately to abate
pertinent hazards after inspections of their respective worksites conducted in 1972 revealed
conditions that assertedly violated a mandatory occupational safety standard promulgated by the
Secretary…. In each case an employee’s death had resulted. Petitioner Irey was cited for a
willful violation of … a safety standard … requiring the sides of trenches in ‘unstable or soft
material’ to be ‘shored, ... sloped, or otherwise supported by means of sufficient strength to
protect the employees working within them.’ The Secretary proposed a penalty of $7,500 for this
violation and ordered the hazard abated immediately.
Petitioner Atlas was cited for a serious violation … which require[s] that roof opening
covers be ‘so installed as to prevent accidental displacement.’ The Secretary proposed a penalty
of $600 for this violation and ordered the hazard abated immediately.
Petitioners timely contested these citations and were afforded hearings before
Administrative Law Judges of the Commission. The judges, and later the Commission, affirmed
the findings of violations and accompanying abatement requirements and assessed petitioner Irey
a reduced civil penalty of $5,000 and petitioner Atlas the civil penalty of $600 which the
Secretary had proposed. Petitioners respectively thereupon sought judicial review in the Courts
of Appeals for the Third and Fifth Circuits, challenging both the Commission’s factual findings
that violations had occurred and the constitutionality of the Act’s enforcement procedures.
A panel of the Court of Appeals for the Third Circuit affirmed the Commission’s orders
in the Irey case over petitioner’s and a dissenter’s contention that the failure to afford the
employer a jury trial on the question whether he had violated OSHA was in violation of the
Seventh Amendment to the United States Constitution which provides for jury trial in most civil
suits at common law. On rehearing en banc,b the Court of Appeals for the Third Circuit, over
four dissents, adhered to the original panel’s decision. It concluded that this [Supreme] Court’s
rulings to date ‘leave no doubt that the Seventh Amendment is not applicable, at least in the
context of a case such as this one, and that Congress is free to provide an administrative
enforcement scheme without the intervention of a jury at any stage.’
The Court of Appeals for the Fifth Circuit also affirmed the Commission’s order in the
Atlas case over a similar claim that the enforcement scheme violated the Seventh Amendment. It
stated:
3
Petitioners make no challenge to the absence of mandatory review by the Commission of the
administrative law judge’s findings of fact.
b
En banc decisions are made by a larger group of justices than the usual three-judge appellate panel. This
procedure is reserved for the most critical cases, usually determined on a case-by-case basis by the particular circuit.
296
Where adjudicative responsibility rests only in the administering agency, ‘jury
trials would be incompatible with the whole concept of administrative adjudication and
would substantially interfere with the (agency’s) role in the statutory scheme.4
We granted the petitions for writs of certiorari limited to the important question whether
the Seventh Amendment prevents Congress from assigning to an administrative agency, under
these circumstances the task of adjudicating violations of OSHA.
III
The Seventh Amendment provides that ‘(i)n Suits at common law, … the right of trial by
jury shall be preserved....’ The phrase ‘Suits at common law’ has been construed to refer to cases
tried prior to the adoption of the Seventh Amendment in courts of law in which jury trial was
customary as distinguished from courts of equity or admiralty in which jury trial was not.
Petitioners claim that a suit in a federal court by the Government for civil penalties for violation
of a statute is a suit for a money judgment which is classically a suit at common law; and that the
defendant therefore has a Seventh Amendment right to a jury determination of all issues of fact
in such a case. Petitioners then claim that to permit Congress to assign the function of
adjudicating the Government’s rights to civil penalties for violation of the statute to a different
forum an administrative agency in which no jury is available would be to permit Congress to
deprive a defendant of his Seventh Amendment jury right. We disagree. …
Congress has often created new statutory obligations, provided for civil penalties for their
violation, and committed exclusively to an administrative agency the function of deciding
whether a violation has in fact occurred. These statutory schemes have been sustained by this
Court, albeit often without express reference to the Seventh Amendment. Thus taxes may
constitutionally be assessed and collected together with penalties, with the relevant facts in some
instances being adjudicated only by an administrative agency. Neither of these cases expressly
discussed the question whether the taxation scheme violated the Seventh Amendment. …
Similarly, Congress has entrusted to an administrative agency the task or adjudicating violations
of the customs and immigration laws and assessing penalties based thereon.
...
In [citation omitted], … the Court stated:
(T)he distinction is at once apparent between cases of private right and those which
arise between the Government and persons subject to its authority in connection with the
performance of the constitutional functions of the executive or legislative departments. ...
(T)he Congress, in exercising the powers confided to it may establish ‘legislative’ courts ... to
serve as special tribunals ‘to examine and determine various matters, arising between the
government and others, which from their nature do not require judicial determination and yet
are susceptible of it.’ But ‘the mode of determining matters of this class is completely within
congressional control. Congress may reserve to itself the power to decide, may delegate that
power to executive officers, or may commit it to judicial tribunals.’ ... Familiar illustrations of
administrative of such matters are found in connection with the exercise of the congressional
power as to interstate and foreign commerce, taxation, immigration, the public lands, public
health, the facilities of the post office, pensions, and payments to veterans.
4
The other Courts of Appeals which have passed on this issue have uniformly (and without a dissent)
agreed with these results [citing the 2d, 6th, 8th, and 10th Circuits].
297
In [citation omitted], the Court squarely addressed the Seventh Amendment issue
involved when Congress commits the fact-finding function under a new statute to an
administrative tribunal. Under the National Labor Relations Act, Congress had committed to the
National Labor Relations Board, in a proceeding brought by its litigating arm, the task of
deciding whether an unfair labor practice had been committed and of ordering backpay where
appropriate. The Court stated:
The instant case is not a suit at common law or in the nature of such a suit. The
proceeding is one unknown to the common law. It is a statutory proceeding.
Reinstatement of the employee and payment for time lost are requirements
(administratively) imposed for violation of the statute and are remedies appropriate to its
enforcement. The contention under the Seventh Amendment is without merit.
This passage … has recently been explained in Curtis v. Loether, in which the Court held
the Seventh Amendment applicable to private damages suits in federal courts brought under the
housing discrimination provisions of the Civil Rights Act of 1968. The Court rejected the
argument that … the Seventh Amendment [is] inapplicable to any action based on a statutorily
created right even if the action was brought before a tribunal which customarily utilizes a jury as
its fact-finding arm. Instead, we … upheld
congressional power to entrust enforcement of statutory rights to an
administrative process or specialized court of equity11 free from the strictures of the
Seventh Amendment.
...
In sum, the cases discussed above stand clearly for the proposition that when Congress
creates new statutory ‘public rights,’ it may assign their adjudication to an administrative agency
with which a jury trial would be incompatible, without violating the Seventh Amendment’s
injunction that jury trial is to be ‘preserved’ in ‘suits at common law.’ Congress is not required
by the Seventh Amendment to choke the already crowded federal courts with new types of
litigation or prevented from committing some new types of litigation to administrative agencies
with special competence in the relevant field. This is the case even if the Seventh Amendment
would have required a jury where the adjudication of those rights is assigned instead to a federal
court of law instead of an administrative agency.
...
[Next] … is the assertion that the right to jury trial was never intended to depend on the
identity of the forum to which Congress has chosen to submit a dispute; otherwise, it is said,
Congress could utterly destroy the right to a jury trial by always providing for administrative
rather than judicial resolution of the vast range of cases that now arise in the courts. The
argument is well put, but it overstates the holdings of our prior cases and is in any event
unpersuasive. Our prior cases support administrative fact-finding in only those situations
11
… [T]his Court sustained the power of a bankruptcy court, exercising summary jurisdiction without a
jury, to adjudicate the otherwise legal issues of voidable preferences ... on the ground that a bankruptcy court,
exercising its summary jurisdiction, was a specialized court of equity and constituted a forum before which a jury
would be out of place and would go far to dismantle the statutory scheme.
298
involving ‘public rights,’ e. g., where the Government is involved in its sovereign capacity under
an otherwise valid statute creating enforceable public rights. Wholly private tort, contract, and
property cases, as well as a vast range of other cases as well are not at all implicated.
More to the point, it is apparent from the history of jury trial in civil matters that factfinding, which is the essential function of the jury in civil cases, was never the exclusive
province of the jury under either the English or American legal systems at the time of the
adoption of the Seventh Amendment; and the question whether a fact would be found by a jury
turned to a considerable degree on the nature of the forum in which a litigant found himself.
Critical fact-finding was performed without juries in suits in equity, and there were no juries in
admiralty; nor were there juries in the military justice system. The jury was the fact-finding
mode in most suits in the common-law courts, but it was not exclusively so: Condemnation was
a suit at common law but constitutionally could be tried without a jury. ‘(M)any civil as well as
criminal proceedings at common law were without a jury.’ The question whether a particular
case was to be tried in a court of equity without a jury or a court of law with a jury did not
depend on whether the suit involved fact-finding or on the nature of the facts to be found. Factfinding could be a critical matter either at law or in equity. Rather, as a general rule, the decision
turned on whether courts of law supplied a cause of action and an adequate remedy to the
litigant. If it did, then the case would be tried in a court of law before a jury. Otherwise the case
would be tried to a court of equity sitting without a jury. Thus, suits for damages for breach of
contract, for example, were suits at common law with the issues of the making of the contract
and its breach to be decided by a jury; but specific performance was a remedy unavailable in a
court of law and where such relief was sought the case would be tried in a court of equity with
the facts as to making and breach to be ascertained by the court.
The Seventh Amendment was declaratory of the existing law, for it required only that
jury trial in suits at common law was to be ‘preserved.’ It thus did not purport to require a jury
trial where none was required before. Moreover, it did not seek to change the fact-finding mode
in equity or admiralty or to freeze equity jurisdiction as it existed in 1789, preventing it from
developing new remedies where those available in courts of law were inadequate. …
The point is that the Seventh Amendment was never intended to establish the jury as the
exclusive mechanism for fact-finding in civil cases. It took the existing legal order as it found it,
and there is little or no basis for concluding that the Amendment should now be interpreted to
provide an impenetrable barrier to administrative fact-finding under otherwise valid federal
regulatory statutes. We cannot conclude that the Amendment rendered Congress powerless when
it concluded that remedies available in courts of law were inadequate to cope with a problem
within Congress’ power to regulate to create new public rights and remedies by statute and
commit their enforcement, if it chose, to a tribunal other than a court of law such as an
administrative agency in which facts are not found by juries. Indeed, as the Oceanic opinion said,
the ‘settled judicial construction’ was to the contrary ‘from the beginning.’
Thus, history and our cases support the proposition that the right to a jury trial turns not
solely on the nature of the issue to be resolved but also on the forum in which it is to be
resolved.16 Congress found the common-law and other existing remedies for work injuries
16
Petitioners claim that permitting Congress to control the jury-right question by picking the forum is to
delegate to it, rather than this Court, the final power to decide Seventh Amendment issues. The claim is incorrect.
The Seventh Amendment prevents Congress from depriving a litigant of a jury trial in a ‘legal’ action before a
tribunal customarily utilizing a jury as its fact-finding arm, and this Court has the final decision on the question
whether a jury is required.
299
resulting from unsafe working conditions to be inadequate to protect the Nation’s working men
and women. It created a new cause of action, and remedies therefor, unknown to the common
law, and placed their enforcement in a tribunal supplying speedy and expert resolutions of the
issues involved. The Seventh Amendment is no bar to the creation of new rights or to their
enforcement outside the regular courts of law.
The judgments below are affirmed.
It is so ordered.
Notes and Questions:………………………………………..
1. As the Court states:
Congress is not required by the Seventh Amendment to choke the already
crowded federal courts with new types of litigation or prevented from committing some
new types of litigation to administrative agencies with special competence in the relevant
field.
……….
. . . …………………………………………………
The Seventh Amendment is no bar to the creation of new rights or to their
enforcement outside the regular courts of law.
Is Congress effectively chipping away at the Seventh Amendment, with each new regulatory
regime involving administrative adjudication? …………………………………………………..
2. Did the drafters likely have the public-private rights distinction in mind at the time of
the Seventh Amendment’s addition to the Constitution? Did the Court invoke the public-private
rights distinction to limit mission-creep—from cases involving government agency adjudication,
into the realm of private lawsuits not involving government agencies? If so, what rule can you
articulate from Atlas?
300
BATSON v. KENTUCKY
United States Supreme Court
476 U.S. 79 (1986) (partially overruled on other grounds)
Justice Powell delivered the [7-2, with three concurring] opinion[s] of the Court.
This case requires us to reexamine …the evidentiary burden placed on a criminal
defendant who claims that he has been denied equal protection through the State’s use of
peremptory challenges to exclude members of his race from the petit jury.
I
Petitioner, a black man, was indicted in Kentucky on charges of second-degree burglary
and receipt of stolen goods. On the first day of trial…, the judge conducted voir dire examination
of the venire, excused certain jurors for cause, and permitted the parties to exercise peremptory
challenges.6 The prosecutor used his peremptory challenges to strike all four black persons on
the venire, and a jury composed only of white persons was selected. Defense counsel moved to
discharge the jury before it was sworn on the ground that the prosecutor’s removal of the black
veniremen violated petitioner’s rights under the Sixth and Fourteenth Amendments to a jury
drawn from a cross section of the community, and under the Fourteenth Amendment to equal
protection of the laws. … Without expressly ruling on the request for a hearing, the trial judge
observed that the parties were entitled to use their peremptory challenges to “strike anybody they
want to.” The judge then denied petitioner’s motion, reasoning that the cross-section requirement
applies only to selection of the venire [overall jury pool] and not to selection of the petit jury
itself.
The jury convicted petitioner on both counts. On appeal to the Supreme Court of
Kentucky, petitioner pressed, among other claims, the argument concerning the prosecutor’s use
of peremptory challenges. …
The Supreme Court of Kentucky affirmed … [i]n a single paragraph…. We … now
reverse.
II
...
The basic principles prohibiting exclusion of persons from participation in jury service on
account of their race “are essentially the same for grand juries and for petit juries.” …
More than a century ago, the [US Supreme] Court … laid the foundation for the Court’s
unceasing efforts to eradicate racial discrimination in the procedures used to select the venire
from which individual jurors are drawn. … [T]he central concern of the recently ratified
Fourteenth Amendment was to put an end to governmental discrimination on account of race....
6
The Kentucky Rules of Criminal Procedure authorize the trial court to permit counsel to conduct voir dire
examination or to conduct the examination itself. After jurors have been excused for cause, the parties exercise their
peremptory challenges simultaneously by striking names from a list of qualified jurors equal to the number to be
seated plus the number of allowable peremptory challenges. Since the offense charged in this case was a felony …
the prosecutor was entitled to six peremptory challenges, and defense counsel to nine.
301
Exclusion of black citizens from service as jurors constitutes a primary example of the evil the
Fourteenth Amendment was designed to cure.
In holding that racial discrimination in jury selection offends the Equal Protection Clause,
the Court … recognized, however, that a defendant has no right to a “petit [as opposed to grand]
jury composed in whole or in part of persons of his own race.” … The Equal Protection Clause
guarantees the defendant that the State will not exclude members of his race from the [larger
pool, i.e.,] jury venire on account of race.
...
B
In Strauder, the Court [thus] invalidated a state statute that provided that only white men
could serve as jurors. … While decisions of this Court have been concerned largely with
discrimination during selection of the venire, the principles announced there also forbid
discrimination on account of race in selection of the petit jury. …
Accordingly, the component of the jury selection process at issue here, the State’s
privilege to strike individual jurors through peremptory challenges, is subject to the commands
of the Equal Protection Clause.12 Although a prosecutor ordinarily is entitled to exercise
permitted peremptory challenges “for any reason at all, as long as that reason is related to his
view concerning the outcome” of the case to be tried, … the Equal Protection Clause forbids the
prosecutor to challenge potential jurors solely on account of their race or on the assumption that
black jurors as a group will be unable impartially to consider the State's case against a black
defendant.
III
...
A
...
While the Constitution does not confer a right to peremptory challenges, those challenges
traditionally have been viewed as one means of assuring the selection of a qualified and unbiased
jury. To preserve the peremptory nature of the prosecutor’s challenge, the Court in Swain
declined to scrutinize his actions in a particular case[,] by relying on a presumption that he
properly exercised the State’s challenges.
...
A number of lower courts following the teaching of Swain reasoned that proof of
repeated striking of blacks over a number of cases was necessary to establish a violation of the
Equal Protection Clause. Since this interpretation of Swain has placed on defendants a crippling
burden of proof, prosecutors’ peremptory challenges are now largely immune from constitutional
scrutiny. For reasons that follow, we reject this evidentiary formulation as inconsistent with
standards that have been developed since Swain for assessing a prima facie case under the Equal
Protection Clause.
12
We express no views on whether the Constitution imposes any limit on the exercise of peremptory
challenges by defense counsel.
302
...
C
The standards for assessing a prima facie case in the context of discriminatory selection
of the venire have been fully articulated since Swain [italics added]. These principles support our
conclusion that a defendant may establish a prima facie case of purposeful discrimination in
selection of the petit jury solely on evidence concerning the prosecutor’s exercise of peremptory
challenges at the defendant's trial [italics added]. To establish such a case, the defendant first
must show that he is a member of a cognizable racial group…. Second, the defendant is entitled
to rely on the fact, as to which there can be no dispute, that peremptory challenges constitute a
jury selection practice that permits “those to discriminate who are of a mind to discriminate.”
Finally, the defendant must show that these facts and any other relevant circumstances raise an
inference that the prosecutor used that practice to exclude the veniremen from the petit jury on
account of their race. This combination of factors in the empaneling of the petit jury, as in the
selection of the [larger jury pool] venire, raises the necessary inference of purposeful
discrimination.
In deciding whether the defendant has made the requisite showing, the trial court should
consider all relevant circumstances. For example, a “pattern” of strikes against black jurors
included in the particular venire might give rise to an inference of discrimination. Similarly, the
prosecutor’s questions and statements during voir dire examination and in exercising his
challenges may support or refute an inference of discriminatory purpose. These examples are
merely illustrative. We have confidence that trial judges, experienced in supervising voir dire,
will be able to decide if the circumstances concerning the prosecutor’s use of peremptory
challenges creates a prima facie case of discrimination against black jurors.
Once the defendant makes a prima facie showing, the burden shifts to the State to come
forward with a neutral explanation for challenging black jurors. Though this requirement
imposes a limitation in some cases on the full peremptory character of the historic challenge, we
emphasize that the prosecutor’s explanation need not rise to the level justifying exercise of a
challenge for cause. But the prosecutor may not rebut the defendant’s prima facie case of
discrimination by stating merely that he challenged jurors of the defendant’s race on the
assumption—or his intuitive judgment—that they would be partial to the defendant because of
their shared race. Just as the Equal Protection Clause forbids the States to exclude black persons
from the venire on the assumption that blacks as a group are unqualified to serve as jurors, so it
forbids the States to strike black veniremen on the assumption that they will be biased in a
particular case simply because the defendant is black. The core guarantee of equal protection,
ensuring citizens that their State will not discriminate on account of race, would be meaningless
were we to approve the exclusion of jurors on the basis of such assumptions, which arise solely
from the jurors’ race. Nor may the prosecutor rebut the defendant’s case merely by denying that
he had a discriminatory motive or “affirm[ing] [his] good faith in making individual selections.”
If these general assertions were accepted as rebutting a defendant’s prima facie case, the Equal
Protection Clause “would be but a vain and illusory requirement.” The prosecutor therefore must
303
articulate a neutral explanation related to the particular case to be tried.20 The trial court then will
have the duty to determine if the defendant has established purposeful discrimination.21
IV
...
While we recognize, of course, that the peremptory challenge occupies an important
position in our trial procedures, we do not agree that our decision today will undermine the
contribution the challenge generally makes to the administration of justice. The reality of
practice, amply reflected in many state- and federal-court opinions, shows that the challenge may
be, and unfortunately at times has been, used to discriminate against black jurors. By requiring
trial courts to be sensitive to the racially discriminatory use of peremptory challenges, our
decision enforces the mandate of equal protection and furthers the ends of justice.22 In view of
the heterogeneous population of our Nation, public respect for our criminal justice system and
the rule of law will be strengthened if we ensure that no citizen is disqualified from jury service
because of his race.
… We decline, however, to formulate particular procedures to be followed upon a
defendant’s timely objection to a prosecutor’s challenges.24
V
In this case, petitioner made a timely objection to the prosecutor’s removal of all black
persons on the venire. Because the trial court flatly rejected the objection without requiring the
prosecutor to give an explanation for his action, we remand this case for further proceedings. If
the trial court decides that the facts establish, prima facie, purposeful discrimination and the
prosecutor does not come forward with a neutral explanation for his action, our precedents
require that petitioner’s conviction be reversed.
It is so ordered.
...
Justice Marshall, concurring.
The Court of Appeals for the Second Circuit observed … that “[t]here are any number of bases” on
which a prosecutor reasonably may believe that it is desirable to strike a juror who is not excusable for cause. As we
explained in another context, however, the prosecutor must give a “clear and reasonably specific” explanation of his
“legitimate reasons” for exercising the challenges.
21
In a recent Title VII sex discrimination case, we stated that “a finding of intentional discrimination is a
finding of fact” entitled to appropriate deference by a reviewing court. Since the trial judge’s findings in the context
under consideration here largely will turn on evaluation of credibility, a reviewing court ordinarily should give those
findings great deference.
22
While we respect the views expressed in Justice Marshall’s concurring opinion concerning prosecutorial
and judicial enforcement of our holding today, we do not share them. The standard we adopt under the Federal
Constitution is designed to ensure that a State does not use peremptory challenges to strike any black juror because
of his race. We have no reason to believe that prosecutors will not fulfill their duty to exercise their challenges only
for legitimate purposes. Certainly, this Court may assume that trial judges, in supervising voir dire in light of our
decision today, will be alert to identify a prima facie case of purposeful discrimination. Nor do we think that this
historic trial practice, which long has served the selection of an impartial jury, should be abolished because of an
apprehension that prosecutors and trial judges will not perform conscientiously their respective duties under the
Constitution.
24
In light of the variety of jury selection practices followed in our state and federal trial courts, we make no
attempt to instruct these courts how best to implement our holding today. For the same reason, we express no view
on whether it is more appropriate in a particular case, upon a finding of discrimination against black jurors, for the
trial court to discharge the [entire] venire and select a new jury from a panel not previously associated with the case,
or to disallow the discriminatory challenges and resume selection with the improperly challenged jurors reinstated
on the venire.
20
304
I join Justice Powell’s eloquent opinion for the Court, which takes a historic step toward
eliminating the shameful practice of racial discrimination in the selection of juries. The Court’s
opinion cogently explains the pernicious nature of the racially discriminatory use of peremptory
challenges, and the repugnancy of such discrimination to the Equal Protection Clause. The
Court’s opinion also ably demonstrates the inadequacy of any burden of proof for racially
discriminatory use of peremptories that requires that “justice ... sit supinely by” and be flouted in
case after case before a remedy is available. I nonetheless write separately to express my views.
The decision today will not end the racial discrimination that peremptories inject into the juryselection process. That goal can be accomplished only by eliminating peremptory challenges
entirely.a
...
Justice Rehnquist, with whom The Chief Justice joins, dissenting.
...
With these considerations in mind, we cannot hold that the striking of Negroes in a
particular case is a denial of equal protection of the laws. In the quest for an impartial and
qualified jury, Negro and white, Protestant and Catholic, are alike subject to being challenged
without cause. To subject the prosecutor’s challenge in any particular case to the demands and
traditional standards of the Equal Protection Clause would entail a radical change in the nature
and operation of the challenge. The challenge, pro tanto, would no longer be peremptory.”
...
I cannot subscribe to the Court’s unprecedented use of the Equal Protection Clause to
restrict the historic scope of the peremptory challenge, which has been described as “a necessary
part of trial by jury.” In my view, there is simply nothing “unequal” about the State’s using its
peremptory challenges to strike blacks from the jury in cases involving black defendants, so long
as such challenges are also used to exclude whites in cases involving white defendants,
Hispanics in cases involving hispanic defendants, Asians in cases involving Asian defendants,
and so on. This case-specific use of peremptory challenges by the State does not single out
blacks, or members of any other race for that matter, for discriminatory treatment. Such use of
peremptories is at best based upon seat-of-the-pants instincts, which are undoubtedly crudely
stereotypical and may in many cases be hopelessly mistaken. But as long as they are applied
across-the-board to jurors of all races and nationalities, I do not see—and the Court most
certainly has not explained—how their use violates the Equal Protection Clause.
...
Notes and Questions:
1. What general showing must be made to trigger a prima facie Batson violation? The
specific steps are conveniently collated in Aleman v. Uribe, 723 F.3d 976, at 981–982 (9th Cir.
2013) (authorities omitted):
‘A Batson challenge has three steps.’ At the first step, the defendant must make a prima
facie showing that the prosecutor exercised a peremptory challenge based on race. If the court
finds that a prima facie case has been made, then step two requires the prosecutor to give a raceneutral reason for exercising the challenge. Under Batson’s third step, the trial court must
determine whether the defendant has carried his burden to prove that the prosecutor engaged in
“purposeful discrimination.” To make this determination, the trial court must “evaluate ‘the
a
England, from which the United States drew its legal system, abolished peremptory challenges in 1986.
305
persuasiveness of the justification.’ ” ‘Although the prosecutor's reasons for the strike must relate
to the case to be tried, the court need not believe that ‘the stated reason represents a sound
strategic judgment’ to find the prosecutor’s rationale persuasive; rather, it need be convinced
only that the justification ‘should be believed.’ .......
2. Does the Rehnquist dissenting opinion suggest that his dissent is racially motivated? Is
this the right question to ask, as a practical method for analyzing his dissent?
3. Should the federal courts abolish peremptory challenges, as has England? Would doing
so promote forum shopping?
306
PEOPLE v. GARCIA
California Court of Appeal, Fourth District
77 Cal.App.4th 1269 (2000)
Bedsworth, J. [delivered the unanimous opinion of the court].
Cano Garcia was charged with burglary. During his trial, it somehow became known that
two members of the jury venire were lesbians. In fact, they both worked for the same gay and
lesbian foundation. After the prosecution excused both women, defense counsel made a Wheeler
motion.1 There was a discussion at the bench, and the trial court denied the motion, explaining,
“Well, I am going to rule that sexual preference is not a cognizable group.... I don’t think that
your sexual preference specifically relates to them sharing a common perspective or common
social or psychological outlook on human events. [¶] Lesbians or gay men vary in their social
and psychological outlook on human events and I don't think fit into this protection. So I'm going
to deny your motion.” This is Garcia’s sole assignment of error.
In 1986, the United States Supreme Court decided Batson v. Kentucky, holding that the
equal protection clause of the United States Constitution prohibits jury selection based upon
racial stereotyping. Eight years later, it decided J. E. B. v. Alabama, extending the rationale of
Batson to gender discrimination. To date, those are the only two classifications the Supreme
Court has recognized as prohibited bases for exclusion of jurors under the equal protection
clause. It has not yet dealt with an equal protection challenge which did not involve the “strict”
or “heightened” scrutiny applied to race and gender-based classifications of all sorts, so it has not
yet been established whether such scrutiny [sexual orientation] is a sine qua non of Batson error
or merely a common characteristic.
Other courts have struggled with classifications as diverse as religion, age, socioeconomic status, union membership and obesity—with varying degrees of success. But in this
case we have reached territory which, 13 years after Batson and more than two decades after its
California predecessor (People v. Wheeler), is still terra incognita: sexual orientation.2
The terrain before us is as stark as a moonscape and without discernible footprints: Our
only issue is whether lesbians—and presumably gay males—constitute a cognizable class whose
exclusion resulted in a jury that failed to represent a cross section of the community and thereby
violated Garcia’s constitutional rights. For reasons we explain here, we are convinced they do.
We are convinced they must. But we recognize the fact the court’s ruling obviated the
prosecution’s defense of its peremptories, so we remand the case for a determination by the trial
court whether the prosecution’s challenges had valid constitutional bases.
Federal authority is sparse on this issue. …
But … we find nothing [fully] discussing the issue in all of federal authority. Which is
not surprising. This is not an issue which comes up in the course of ordinary—or even
extraordinary—voir dire. Sexual orientation is not something likely to be volunteered, either by
heterosexuals or homosexuals, and it is even less likely to be the subject of inquiry by court or
1
People v. Wheeler (1978) 22 Cal.3d. 258 prohibits exclusion of jurors based upon race, ethnicity, gender
or “similar” group bias.
2
Trial courts confronted with the question of whether jurors may be asked their sexual orientations during
voir dire have not responded consistently. Moreover, no appellate court has ruled on this question or on the
constitutional treatment of challenges for cause or peremptory challenges to exclude prospective jurors based on
sexual orientation. These issues remain unresolved at a point when an increasing number of cases involving sexual
orientation reach juries, and the number of such cases will continue to grow.
307
counsel. We regret that our record in this case does not clearly reveal how it came up here. But it
has come up, and it is our obligation to determine its import in this case of first impression.
. . .3
[T]he [California Supreme] court said, “We have reviewed this line of United States Supreme
Court opinions in some detail because we fully agree with the views there expressed as to the
importance of the representative cross-section rule, particularly in protecting the constitutional
right to an impartial jury.” California courts have since struggled mightily with this constitutional
promise, and our Supreme Court has provided sufficient analytical framework to enable us to say
with some certainty that exclusion of lesbians and gay men on the basis of group bias violates the
California Constitution.
The pivot of our analysis is the definition of the term, “cognizable group.” … “Two
requirements must thus be met in order to qualify an asserted group as ‘cognizable’ for purposes
of the representative cross-section rule. First, its members must share a common perspective
arising from their life experience in the group, i.e., a perspective gained precisely because they
are members of that group. It is not enough to find a characteristic possessed by some persons in
the community but not by others; the characteristic must also impart to its possessors a common
social or psychological outlook on human events. …
Lesbians and gay men qualify under this standard. It cannot seriously be argued in this
era of “don’t ask; don’t tell”a that homosexuals do not have a common perspective—“a common
social or psychological outlook on human events”—based upon their membership in that
community. They share a history of persecution comparable to that of Blacks and women. While
there is room to argue about degree, based upon their number and the relative indiscernibility of
their membership in the group, it is just that: an argument about degree. It is a matter of quantity,
not quality.
This is not to say that all homosexuals see the world alike. The Attorney General here
derides the cognizability of this class with the rhetorical question, “[W]hat ‘common
perspective’ is, or was, shared by Rep. Jim Kolbe (R-Ariz.), RuPaul, poet William Alexander
Percy, Truman Capote, and Ellen DeGeneres?” He confuses “common perspective” with
“common personality.” Granted, the five persons he mentions are people of diverse backgrounds
and life experiences. But they certainly share the common perspective of having spent their lives
in a sexual minority, either exposed to or fearful of persecution and discrimination. That
perspective deserves representation in the jury venire, and people who share that perspective
deserve to bear their share of the burdens and benefits of citizenship, including jury service.
The Attorney General also insists “there is no evidence that gays or lesbians have a
common social or psychological outlook on human events.” But this misperceives the nature of
the term “common perspective.” Commonality of perspective does not result in identity of
opinion. That is the whole reason exclusion based upon group bias is anathema. It stereotypes. It
assumes all people with the same life experience will, given a set of facts, reach the same result.
A common perspective does no such thing. It affects how life experiences are seen, not
how they are evaluated. And inclusion of a cognizable group in the jury venire does not assure
3
In our recent decision in People v. Wheeler we held that in state criminal prosecutions the right to trial by
a jury drawn from a ‘representative cross-section of the community’ is guaranteed equally and independently by the
Sixth Amendment to the federal Constitution and by article I, section 16, of the California Constitution, and that
such right is violated when a ‘cognizable group’ within the community is systematically excluded from jury service.
a
When Garcia was decided (2000), this phrase was generally attributes to this then-existing military
policy.
308
any particular position; it assures only that the facts will be viewed from a variety of angles. It
assures that as many different life views as possible will be represented in the important
decisions of the judicial process. Put more elegantly, “[T]he goal of the cross-section rule is to
enhance the likelihood that the jury will be representative of significant community attitudes, not
of groups per se.”
… The Attorney General misapprehends the nature of this critical consideration in
arguing that there is no evidence of a gay or lesbian “common psychological outlook.”
… “The Attorney General contends, however, that [the] group [does not qualify] because
it is heterogeneous in all other respects: its membership cuts across racial, religious, sexual,
economic, social, and occupational lines. The argument is fallacious, and proves too much: it
could equally well be applied to ... women … [and] blacks … and the daily wage earners
excluded in Thiel v. Southern Pacific Co. In each case the group was likewise heterogeneous in
all respects save one—but that one, as here, imparted to its members a shared viewpoint that
could not be excluded from the master jury list without impairing its representativeness. Indeed,
the Attorney General’s contention has already been refuted in Wheeler: in suggesting ways in
which a party may prove that prospective jurors are being removed because of their group
association, we said it may be shown that such jurors ‘share only this one characteristic—their
membership in the group—and that in all other respects they are as heterogeneous as the
community as a whole.’ The argument failed to convince the Supreme Court 20 years ago [in
Wheeler], and it fails to convince us now.
There is a second prong to the … test for cognizability—…: “The party seeking to prove
a violation of the representative cross-section rule must also show that no other members of the
community are capable of adequately representing the perspective of the group assertedly
excluded. This is so because the goal of the cross-section rule is to enhance the likelihood that
the jury will be representative of significant community attitudes, not of groups per se. When a
‘cognizable group’ is defined too narrowly, it may duplicate another group in the community
with a similar experience and viewpoint.”
The question, then, is whether another group—or groups—in the community could
adequately represent the views of homosexuals. We don’t see how.
...
But we cannot think of anyone who shares the perspective of the homosexual community.
Outside of racial and religious minorities, we can think of no group which has suffered such
“pernicious and sustained hostility” and such “immediate and severe opprobrium” as
homosexuals.7 Certainly the Attorney General has suggested no one, and our search of case law
and other literature has turned up no intimation of a group with their perspective. Both the
defendant and the community are entitled to have that perspective represented in the jury venire.
We emphasize the fact that the community has an interest even greater than—albeit not
as immediate as—the defendant’s. While injustice to any individual is intolerable under our
system of justice, and denial of the rights of a cognizable group is unconstitutional, in the long
7
A November 1998 poll by the National Law Journal found that 17.1 percent of prospective jurors
admitted to a bias which would make it impossible for them to be fair and impartial in a case in which one of the
parties was homosexual. By comparison, only 4.8 percent did not think they could be fair to African-Americans, and
5 percent did not think they could be fair to women. (Nat. L.J. (Nov. 2, 1998) p. A1.)
309
run, the greatest threat of failure to guarantee the right of gays and lesbians to serve on juries is
to the commonweal. “The diverse and representative character of the jury must be maintained
‘partly as assurance of a diffused impartiality and partly because sharing in the administration of
justice is a phase of civic responsibility.’ If we deny that civic responsibility to any group, if we
deny them the “ ‘privilege of participating equally ... in the administration of justice,’” we [also]
deprive them of part of their membership in the community, and while that has an immediate
impact on the excluded group, it must inevitably damage the community as well. “Jury service is
an important educational experience for the citizen. It encourages the development of civic
responsibility as well as an interest in, and respect for, the law and its enforcement.” It is not just
the excluded group, but the entire community that suffers when these values are not fostered.
The Attorney General complains that it is impractical to recognize gays and lesbians as a
cognizable group. As he points out, sexual orientation is “not necessarily patent, nor a public
matter a prospective juror should be required to declare.” We acknowledge both those facts. But
neither affects our decision.
Race and ethnicity are not necessarily patent, either. While gross estimations of race can
be made on the basis of physical appearances, such judgments are entirely subjective and often
erroneous. And ethnicity has become virtually impossible to judge without inquiry. Our jury
venires daily include Cubans named O’Rourke, Indonesians named Opdyke, and Anglos named
Gomes. Every trial judge has encountered red-haired, freckle-faced Cardenases and Hispaniclooking Maguires. The country is a melting pot—and proud of it—and a large part of the great
folly of stereotyping is that nowhere on earth have race and ethnicity become harder to determine
than they are here. Yet the propriety of those criteria for cognizable groups is unassailable.
Sexual orientation will present no greater difficulty.
Nor do we perceive a great problem lurking with regard to inquiring of jurors about their
sexual orientation. It simply should not be done. The Attorney General is right in this regard: No
one should be “outed” in order to take part in the civic enterprise which is jury duty. The whole
point is that no one can be excluded because of sexual orientation. That being the case, no one
should be allowed to inquire about it. If it comes out somehow, as it did here, the parties will
doubtless factor it into their jury selection decisions, just as they factor in occupation, education,
body language, and whether the juror resembles their stupid Uncle Cletus. But there is no reason
to allow inquiry about it.
We are also aware of the argument that gays and lesbians may not be a big enough group
to be cognizable. … Our record does not reflect the size of the homosexual community….8
… It is simply not possible to read that as a requirement of any particular threshold size.
… [G]ays and lesbians seem to meet the criteria for a cognizable group.10 We see no
reason in the objections raised by the Attorney General not to acknowledge that status, and
nothing in law or logic which would enable us to come to a different conclusion.
That group cannot be discriminated against in jury selection. For such discrimination would send
an intolerable message, one which the United States Supreme Court has eloquently described:
“The message it sends to all those in the courtroom, and all those who may later learn of the
8
Most reliable estimates seem to arrive at a number between 1-10 percent of the population. (Compare J. of
Human Sexuality (Rekers ed. 1996) pp. 66-69 [1-2 percent], Laumann et al., The Social Organization of Sexuality:
Sexual Practices in the United States (Univ. Chi. Press 1994) [1.5 percent women; 2.8 percent men], with the dated,
but still often quoted Kinsey et al. study (1948) [10 percent].)
10
Certainly they have been found entitled to protection from group bias in other contexts. “The decisions
hold the Unruh [Civil Rights] Act [(Civ. Code, § 51)] forbids discrimination against individuals on the basis of
sexual orientation.” …
310
discriminatory act, is that certain individuals, for no reason other than [sexual orientation], are
presumed unqualified by state actors to decide important questions upon which reasonable
persons could disagree.” We will not send that message. ………………………………………..
. . . …………………………………………………..
But it is also possible that the issue which arose in voir dire was so unusual that the
parties will be able to conduct a hearing in which the court can appraise the reasons offered by
the prosecutor for excusing the two jurors and make a decision whether Garcia’s constitutional
rights were violated, based upon the principles we have discussed above. The matter is therefore
remanded to allow the trial court to conduct a hearing to determine the validity of the
prosecutor’s peremptory challenges to the two prospective jurors. If the trial court determines the
prosecutor’s reasons for excusing the two jurors were not constitutionally valid, and grants
defendant’s Wheeler/Batson motion, reversal and retrial is required. If the trial court determines
the prosecutor’s reasons for excusing the two jurors were constitutionally valid, and denies
defendant’s Wheeler/Batson motion, defendant’s conviction is ordered reinstated. ………………
...
Notes and Questions:
1. As the court notes: “The [California] Attorney General here derides the cognizability
of this class with the rhetorical question, “[W]hat ‘common perspective’ is, or was, shared” [by
its members? What is that distinctive perspective?
2. See note 7. Has those numbers likely changed, now that the US Supreme Court has
decided the Defense of Marriage Act and Prop. 8 cases?
3. As the court states: “No one should be ‘outed’ in order to take part in the civic
enterprise which is jury duty. The whole point is that no one can be excluded because of sexual
orientation.” You are now conducting voir dire. How do you apply this theme? You obviously
cannot ask: “Will everyone who’s gay please raise your hands?” What about a juror
questionnaire—in relevant cases—providing the opportunity for all jurors to privately respond?
Would that, as well, violate Garcia?
3. Should the US Supreme Court add sexual orientation to race and gender, so as to
subject all three to strict scrutiny for purposes of voir dire?
311
GALLOWAY v. U.S.
United States Supreme Court
319 U.S. 372 (1943)
Mr. Justice Rutledge delivered the [6-3] opinion of the Court.
Petitioner seeks benefits for total and permanent disability by reason of insanity he claims
existed May 31, 1919. On that day his policy of yearly renewable term insurance lapsed for
nonpayment of premium.1
The suit was filed June 15, 1938. At the close of all the evidence the District Court
granted the Government’s motion for a directed verdict. Judgment was entered accordingly. The
Circuit Court of Appeals affirmed. Both courts held the evidence legally insufficient to sustain a
verdict for petitioner. …
The constitutional argument, as petitioner has made it, does not challenge generally the
power of federal courts to withhold or withdraw from the jury cases in which the claimant puts
forward insufficient evidence to support a verdict. The contention is merely that his case as made
was substantial, the courts’ decisions to the contrary were wrong, and therefore their effect has
been to deprive him of a jury trial. … Upon the record and the issues as the parties have made
them, the only question is whether the evidence was sufficient to sustain a verdict for petitioner.
On that basis, we think the judgments must be affirmed.
I.
Certain facts are undisputed. Petitioner [commenced his] … enlistment in the Army
November 1, 1917.3 He became a cook in a machine gun battalion. His unit arrived in France in
April, 1918. He served actively until September 24. From then to the following January he was
in a hospital with influenza. He then returned to active duty. He came back to the United States,
and received honorable discharge April 29, 1919. He enlisted in the Navy January 15, 1920, and
was discharged for bad conduct in July. The following December he again enlisted in the Army
and served until May, 1922, when he deserted. Thereafter he was carried on the Army records as
a deserter.
In 1930 began a series of medical examinations by Veterans’ Bureau physicians. On May
19 that year his condition was diagnosed as ‘Moron, low grade; observation, dementia praecox,
simple type.’ In November, 1931, further examination gave the diagnosis, ‘Psychosis with other
diseases or conditions (organic disease of the central nervous system-type undetermined).’ In
July, 1934, still another examination was made, with diagnosis: ‘Psychosis manic and depressive
insanity incompetent; hypertension, moderate; otitis media, chronic, left; varicose veins left,
mild; abscessed teeth roots; myocarditis, mild.’ ………………………………………………….
Petitioner’s wife, the nominal party in this suit, was appointed guardian of his person and
estate in February, 1932. Claim for insurance benefits was made in June, 1934, and was finally
denied by the Board of Veterans’ Appeals in January, 1936. This suit followed two and a half
years later.
1
The contract was issued pursuant to the War Risk Insurance Act and insured against death or total
permanent disability. Pursuant to statutory authority, promulgated March 9, 1918, provided: ‘Any impairment of
mind or body which renders it impossible for the disabled person to follow continuously any substantially gainful
occupation shall be deemed … to be total disability. ‘Total disability shall be deemed to be permanent whenever it is
founded upon conditions which render it reasonably certain that it will continue throughout the life of the person
suffering from it…. ’
3
… [T]here is no contention petitioner’s behavior was abnormal before he arrived in France in April, 1918.
312
Petitioner concededly is now totally and permanently disabled by reason of insanity and
has been for some time prior to institution of this suit. It is conceded also that he was sound in
mind and body until he arrived in France in April, 1918.
The theory of his case is that the strain of active service abroad brought on an immediate
change, which was the beginning of a mental breakdown that has grown worse continuously
through all the later years. Essential in this is the view it had become a total and permanent
disability not later than May 31, 1919 [the policy lapse date].
The evidence to support this theory falls naturally into three periods, namely, that prior to
1923; the interval from then to 1930; and that following 1930. It consists in proof of incidents
occurring in France to show the beginnings of change; testimony of changed appearance and
behavior in the years immediately following petitioner’s return to the United States as compared
with those prior to his departure; the medical evidence of insanity accumulated in the years
following 1930; and finally the evidence of a physician, given largely as medical opinion, which
seeks to tie all the other evidence together as foundation for the conclusion, expressed as of
1941, that petitioner’s disability was total and permanent as of a time not later than May of 1919.
Documentary exhibits included military, naval and Veterans’ Bureau records. Testimony
was given by deposition or at the trial chiefly by five witnesses. One, O’Neill, was a fellow
worker and friend from boyhood; two, Wells and Tanikawa, served with petitioner overseas; Lt.
Col. Albert K. Mathews, who was an Army chaplain, observed him or another person of the
same name at an Army hospital in California during early 1920; and Dr. Wilder, a physician,
examined him shortly before the trial and supplied the only expert testimony in his behalf. The
petitioner also put into evidence the depositions of Commander Platt and Lt. Col. James E.
Matthews, his superior officers in the Navy and the Army, respectively, during 1920-22.
What happened in France during 1918-19 is shown chiefly by Wells and Tanikawa.
Wells testified … [p]etitioner’s physical appearance was good, he ‘carried on his duties as a cook
all right,’ and the witness did not see him after June 1….
Tanikawa, Hawaiian-born citizen, served with petitioner from the latter’s enlistment until
September, 1918, when Galloway was hospitalized, although the witness thought they had
fought together and petitioner was ‘acting queer’ at the Battle of the Argonne in October. At
Camp Greene, North Carolina, petitioner was ‘just a regular soldier, very normal, … pretty neat.’
After reaching France ‘he was getting nervous…, kind of irritable, always picking a fight with
other soldier[s].’ …
Tanikawa described another incident in June ‘when we were on the Marne,’ the Germans
‘were on the other side and we were on this side.’ It was a new front, without trenches. The
witness and petitioner were on guard duty with others. Tanikawa understood the Germans were
getting ready for a big drive. ‘One night he (petitioner) screamed. He said, ‘The Germans are
coming’ and we all gagged him.’ There was no shooting, the Germans were not coming, and
there was nothing to lead the witness to believe they were. Petitioner was court martialed for the
matter, but Tanikawa did not know ‘what they did with him.’ He did not talk with Galloway that
night, because ‘he was out of his mind’ and appeared insane. Tanikawa did not know when
petitioner left the battalion or what happened to him after[wards]…. The witness next saw
Galloway in 1936, at a disabled veterans’ post meeting in Sacramento, California. Petitioner then
‘looked to me like he wasn’t all there. Insane. About the same … as compared to the way he
acted in France, particularly when they gagged him ….’
O’Neill was ‘born and raised with’ petitioner, worked with him as a longshoreman, and
knew him ‘from when he come out of the army [1919] for seven years, I would say five or six
313
years.’ When petitioner returned [from the Army] in April or May, 1919, ‘he was a wreck
compared to what he was when he went away. The fellow’s mind was evidently unbalanced.’
Symptoms specified were withdrawing to himself; crying spells; alternate periods of normal
behavior and nonsensical talk; expression of fears that good friends wanted ‘to beat him up’;
spitting blood and remarking about it in vulgar terms. Once petitioner said, ‘G-d-it, I must be a
Doctor Jekyll and Mr. Hyde.’
O’Neill testified these symptoms and this condition continued practically the same for
about five years. In his opinion petitioner was ‘competent at times and others was incompetent.’
The intervals might be ‘a couple of days, a couple of months.’ In his normal periods Galloway
‘would be his old self … absolutely O.K.’
...
O’Neill maintained he saw petitioner ‘right on from that (1920) at times.’ … When he
was pinned down by cross-examination, the effect of his testimony was that he recalled
petitioner clearly in 1919 ‘because there was such a vast contrast in the man,’ but for later years
he could give little or no definite information. The excerpt from the testimony set forth in the
margin shows this contrast. … O’Neill recalled one specific occasion after 1919 when petitioner
returned to Philadelphia, ‘around 1920 or 1921, but I couldn't be sure,’ to testify in a criminal
proceeding. He also said, ‘After he was away for five or six years, he came back to Philadelphia,
… and he was still just evidently all right, and then he would be off.’
Lt. Col. (Chaplain) Mathews said he observed a Private Joseph Galloway, who was a
prisoner for desertion and a patient in the mental ward at Fort MacArthur Station Hospital,
California, during a six weeks period early in 1920. The chaplain’s testimony gives strong
evidence the man he observed was insane. However, there is a fatal weakness in this evidence.
… Subsequently he … admitted that he might have been mistaken in believing that the patientprisoner was petitioner. … The record is barren of other evidence, whether by the hospital’s or
the Army’s records or otherwise, to show that petitioner was either patient or prisoner at Fort
MacArthur in 1920 or at any other time.
...
Lt. Col. James E. Matthews (not the chaplain) … was Galloway’s commanding officer
from early 1921 to the summer of that year, when petitioner was transferred with other soldiers
to another unit. … At times he ‘was one of the very best soldiers I had,’ at others undependable.
He was physically sound, able to do his work, perform close order drill, etc., ‘very well.’ He had
alternate periods of gaiety and depression, talked incoherently at times, gave the impression he
would fight readily, but did not resent orders and seemed to get along well with other soldiers.
The officer attributed petitioner’s behavior to alcohol and narcotics and it occurred to him at no
time to question his sanity.
Dr. Wilder was the key witness. He disclaimed specializing in mental disease, but
qualified as having given it ‘special attention.’ He first saw petitioner shortly before the [mid1938] trial, examined him ‘several times.’ He concluded petitioner’s ailment ‘is a schizophrenic
branch or form of praecox.’ Dr. Wilder … concluded petitioner was born with ‘an inherent
instability,’ though he remained normal until he went to France; began there ‘to be subjected to
the strain of military life, then he began to go to pieces.’ In May, 1919, petitioner ‘was still
suffering from the acuteness of the breakdown. He is going down hill still, but the thing began
with the breakdown….’ Petitioner was ‘definitely insane, yes, sir,’ in 1920 and ‘has been insane
at all times, at least since July, 1918, the time of this episode on the Marne.’ … ‘At no time after
he went into the war do we find him able to hold any kind of a job. He broke right down.’ He
314
explained petitioner’s enlistment in the Navy and later in the Army by saying, ‘It would have
been no trick at all for a man who was reasonably conforming to get into the Service.’
However, the witness knew ‘nothing whatever except his getting married’ about
petitioner’s activities between 1925 and 1930…. Dr. Wilder at first regarded knowledge
concerning what petitioner was doing between 1925 and 1930 as not essential. ‘We have a
continuing disease, quite obviously beginning during his military service, and quite obviously
continuing in 1930…. Counsel for the government interrupted to inquire, ‘Well, if he was
continuously employed for eight hours a day from 1925 to 1930 would that have any bearing?’
The witness replied, ‘It would have a great deal.’ Upon further questioning, however, he reverted
to his first position, stating it would not be necessary or helpful for him to know what petitioner
was doing from 1925 to 1930….
II.
This, we think, is the crux of the case…. His burden was to prove total and permanent
disability as of a date not later than May 31, 1919. He has undertaken to do this by showing
incipience of mental disability shortly before that time and its continuance and progression
throughout the succeeding years. He has clearly established incidence of total and permanent
disability as of some period prior to 1938, when he began this suit.9 For our purposes this may be
taken as medically established by the Veterans’ Bureau examination and diagnosis of July,
1934.10
But if the record is taken to show that some form of mental disability existed in 1930,
which later became total and permanent, petitioner’s problem remains to demonstrate by more
than speculative inference that this condition itself began on or before May 31, 1919 and
continuously existed or progressed through the intervening years to 1930.
To show origin before the crucial date, he gives evidence of two abnormal incidents
occurring while he was in France, one creating the disturbance before he came near the fighting
front, the other yelling that the Germans were coming when he was on guard duty at the Marne.
There is no other evidence of abnormal behavior during his entire service of more than a year
abroad.
That he was court martialed for these sporadic acts and bound and gagged for one does
not prove he was insane or had then a general breakdown. ……………………………………
...
To these two incidents petitioner adds the testimony of O’Neill that he looked and acted
like a wreck, compared with his former self, when he returned from France about a month before
the crucial date, and O’Neill’s vague recollections that this condition continued through the next
two, three, four or five years.
O’Neill’s testimony … does no more than show that petitioner was subject to alternating
periods of gaiety and depression for some indefinite period after his return, extending perhaps as
late as 1922. But because of its vagueness as to time, dates, frequency of opportunity for
9
He has not established a fixed date at which contemporaneous medical examination, both physical and
mental, establishes totality and permanence prior to Dr. Wilder’s examinations in 1941. …
10
The previous examinations of 1930 and 1931 … without more do not prove existence of total and
permanent disability; on the contrary, they go far toward showing it could not be established then medically. The
1930 diagnosis shows only that the examiner regarded petitioner as a moron of low grade, and recommended he be
observed for simple dementia praecox. … The 1931 examination is even less conclusive in one respect, namely, that
‘psychosis’ takes the place of moronic status. … However, this examination first indicates existence of organic
nervous disease. Not until the 1934 diagnosis is there one which might be regarded as showing possible total and
permanent disability by medical evidence contemporaneous with the fact italics added].
315
observation, and specific incident, O’Neill’s testimony concerning the period from 1922 to 1925
is hardly more than speculative.
… There is also the testimony of Commander Platt and Lt. Col. James E. Matthews as to
his service in the Navy and the Army, respectively, during 1920-1922. Neither thought petitioner
was insane or that his conduct indicated insanity. Then follows a chasm of eight years. The only
evidence we have concerning this period is the fact that petitioner married his present guardian at
some time within it, an act from which in the legal sense no inference of insanity can be drawn.
This period was eight years of continuous insanity, according to the inference petitioner
would be [arguably] allowed to have drawn. If so, he should have no need of inference. Insanity
so long and continuously sustained does not hide itself from the eyes and ears of witnesses.13 …
Inference is capable of bridging many gaps. But not, in these circumstances, one so wide
and deep as this. Knowledge of petitioner’s activities and behavior from 1922 or 1925 to 1930
was peculiarly within his ken and that of his wife, who has litigated this cause in his and
presumably, though indirectly, in her own behalf. His was the burden to show continuous
disability. What he did in this time, or did not do, was vital to his case. Apart from the mere fact
of his marriage, the record is blank for five years and almost blank for eight. For all that appears,
he may have worked full time and continuously for five and perhaps for eight, with only a
possible single interruption.
No favorable inference can be drawn from the omission. It was not one of oversight or
inability to secure proof. That is shown by the thoroughness with which the record was prepared
for all other periods, before and after this one, and by the fact petitioner’s wife, though she
married him during the period and was available, did not testify. The only reasonable conclusion
is that petitioner, or those who acted for him, deliberately chose, for reasons no doubt considered
sufficient (and which we do not criticize, since such matters including tactical ones, are for the
judgment of counsel) to present no evidence or perhaps to withhold evidence readily available
concerning this long interval, and to trust to the genius of expert medical inference and judicial
laxity to bridge this canyon.
… No case has been cited and none has been found in which inference, however expert,
has been permitted to make so broad a leap and take the place of evidence which, according to
all reason, must have been at hand. To allow this would permit the substitution of inference,
tenuous at best, not merely for evidence absent because impossible or difficult to secure, but for
evidence disclosed to be available and not produced. This would substitute speculation for proof.
13
The only attempt to explain the absence of testimony concerning the period from 1922 to 1930 is made
by counsel in the reply brief: ‘The insured, it will be observed, was never apprehended after his desertion from the
Army in 1922. It is only reasonable that a person with the status of a deserter at large…, whose mind was in the
condition of that of this insured, would absent himself from those with whom he would usually associate because of
fear of apprehension and punishment. … The ‘explanation’ is obviously untenable. It ignores the one fact proved
with relation to the period, that petitioner was married during it. His wife was … obviously available as a witness.
…
316
Furthermore, the inference would be more plausible perhaps if the evidence of insanity as of
May, 1919, were stronger than it is, such for instance as Chaplain Mathews' testimony would
have furnished if it could be taken as applying to petitioner. But, on this record, the evidence of
insanity as of that time is thin at best, if it can be regarded as at all more than speculative.
Beyond this [speculation], there is nothing to show totality or permanence. … But eight
years are too many to permit it to skip, when the bridgeheads (if the figure may be changed) at
each end are no stronger than they are here.
...
Notes and Questions:
1. What did Galloway have to prove, to win his case? (If the case context were a
summary judgment hearing, the relevant question would be “What is the disputed material
fact?”)
2. What role did the various witnesses play in resolving that issue? In a key passage, the
Court restates Dr. Wilder’s conclusion that Galloway
remained normal until he went to France; began there ‘to be subjected to the strain of
military life, then he began to go to pieces.’ In May, 1919, petitioner ‘was still suffering
from the acuteness of the breakdown.… ’ Petitioner was ‘definitely insane, yes, sir,’ in
1920 and ‘has been insane at all times, at least since July, 1918, the time of this episode
on the Marne.’
Why did this testimony not resolve the issue?
3. One can rely on facts established at trial to avoid a directed verdict (now a pre-verdict
FRCP 50(a) Motion for Judgment in federal court). Other than documents, not at issue in
Galloway, one can also rely on a related matter to establish proof of a claim or defense. What
was it that plaintiff Galloway wanted to use in support of his position that he could withstand a
directed verdict attack on his trial evidence?
4. One potential witness was noticeably absent from the proceedings. Is it possible that
gap in Galloway’s case played a pivotal role in the decision to grant (and affirm) a directed
verdict against Mr. Galloway?
5. The remainder of Galloway addresses plaintiff’s argument that the Seventh
Amendment right to jury trial prohibits the directed verdict motion (now FRCP 50 Motion for
Judgment). The predecessors of today’s pre-verdict and post-verdict Motions for Judgment—as
well as the Motion for New Trial—existed at the time of passage of the Seventh Amendment.
Note its concluding savings clause. These motions actually exist to aid the right to jury,
especially in cases where plaintiffs like Galloway fail to produce enough trial evidence to make
the case jury-worthy.
317
DENMAN v. SPAIN
Supreme Court of Mississippi
135 So.2d 195 (1961)
Lee, Presiding Justice.
Betty Denman, a minor, by her mother … Joyce H. Denman, sued Mrs. Phina Ross
Spain, executrix of the estate of Joseph A. Ross, deceased, to recover damages for personal
injuries sustained by her, allegedly resulting from the negligence of the decedent in the operation
of an automobile. The issue was submitted to a jury on the evidence for the plaintiff—no
evidence being offered for the defendant—and there was a verdict and judgment for the plaintiff
in the sum of $5,000. However, on motion of the defendant, a judgment non obstante veredicto,
that is, notwithstanding the verdict, was sustained and entered. From that action, the plaintiff has
appealed.a
...
The appellant contends that the evidence offered by her, together with the reasonable
inferences therefrom, was sufficient to make an issue for the jury as to whether the alleged
negligence of the deceased driver, Ross, proximately caused or contributed to the collision and
the consequent damage; and that it was error to set aside the verdict of the jury … [whereby the
court instead] entered the judgment for the defendant, notwithstanding that verdict. Hence, she
says that such judgment should be reversed, and that the verdict and judgment of the jury should
be reinstated.
...
Sunday, March 23, 1958, was a rainy, foggy day. About six o’clock that afternoon, at
dusk, Mrs. Eva B. Denman, accompanied by her granddaughter, Betty, the plaintiff, was driving
her Ford car southward on U. S. Highway 49E. At that time, Joseph A. Ross … was driving his
Plymouth car northward on said highway. … [T]he cars collided. Mrs. Denman … and Ross
were killed. Betty, nearly seven years of age at the time, and Mrs. Haining [a Ross passenger]
were injured. Neither had any recollection of what had happened at the time of the collision.
Betty, lying in water on her back in a ditch on the east side of the road, cried out and was rescued
by some unknown person.
a
Betty filed an earlier suit in Mississippi against Mack Denman, administrator of the estate of Mrs. Eva B.
Denman [Betty’s grandmother], deceased; but, at the close of Betty’s evidence, the court sustained a directed verdict
for the defendant. On appeal the judgment … was affirmed by this Court on November 6, 1961….
318
Sources: <http://www.aaroads.com/shields/img/MS/
MS19480491i1.jpg>
Reprinted with Permission of Michael Summa
<http://upload.wikimedia.org/wikipedia/commons/thumb/
2/2d/Highway49TutwilerMS.jpg/800pxHighway49TutwilerMS.jpg>
Reprinted with Permission of Mark Low
Plaintiff’s father, Stuart Denman, who went to the scene shortly after the collision,
described the situation substantially as follows: The Ford car was about seven yards off the
paved surface on the east side in a bar pit ‘heading back towards the railroad track, which is in an
easterly direction.’ The engine and transmission were on the opposite side of the road, out of the
car and about fifty yards apart. The Plymouth was also on the east side, facing west, about fifteen
yards north of the Ford.
No proof was offered as to skid marks, or other evidence to show the point of contact
between these two vehicles. Eleven photographs of the damaged Plymouth, taken from various
positions, and thirteen pictures of the damaged Ford, also taken from various positions, other
than being mute evidence of a terrible tragedy, depict no reasonable or plausible explanation as
to why this collision occurred, or who was responsible for it. Three other photographs portraying
the topography of this immediate area, afford no excuse whatever for such grievous human error.
… John Barnett testified that he was driving a Dodge pickup north of highway 49E on his
way to Tutwiler; that he was traveling at a speed of fifty or fifty-five miles per hour; that the
[Ross] Plymouth, which was in the wreck, passed him about three-fourths of a mile south of
where the collision occurred, going at a speed of about seventy miles per hour; that when it
passed, it got back in its lane, and neither wavered nor wobbled thereafter; that he followed and
observed it for a distance of forty or fifty yards, and that it stayed in its proper lane as long as he
saw it. Although another car was on the road ahead of him, he could have seen as far as the place
of the accident except for the rain and fog.
... Hal Buckley, a Negro man, testified that he was also traveling north on 49E on his way
to Tutwiler at a speed of forty to fifty miles per hour. About two hundred yards south of the
place where the collision occurred, a light green Plymouth, which he later saw at the scene of the
accident, passed him at a speed of seventy-five or eighty miles an hour. He could see its taillights
after it passed, and ‘he was just steady going; he wasn’t doing no slowing up.’ He saw it until it
ran into the other car. On cross-examination, he said that, after this car passed him, it got back on
its side of the road, drove straight, and he did not notice that it ever went back over the center.
Also on cross-examination, in an effort at impeachment, a part of the transcript in the other trial,
containing this question and answer, was read to him as follows: ‘What do you estimate the
speed of that car was when it passed you—the one that was going the same direction that you
were?’, and the answer was: ‘Well, I don't have no idea.’ When he was asked why he made this
difference in his testimony, he hesitated and replied, ‘I didn’t give no sorta idea how fast he was
going.’ He then admitted that, when the car passed him, it got back on its side and drove straight
ahead, and that he could see the accident, but he could not tell anything about it or on which side
of the road it happened. He also did not notice the other car, which came from the other
direction.
...
From this evidence, the plaintiff reasons that the jury could, and did, find that the Ross
car was being operated, under inclement weather conditions, at an unlawful and negligent rate of
speed, and that, if Ross had had his car under adequate and proper control, in all probability the
collision could have been avoided. She voices the opinion that the physical facts, including the
pictures of the wrecked vehicles, indicated that the Ford car was probably across the highway at
an angle of perhaps forty-five degrees at the time of the collision.
319
But the testimony of Buckley showed only that the Plymouth was being operated at an
excessive and negligent rate of speed. It otherwise showed that the car was in its proper lane. He
did not notice it go over the center at any time, but it was driven straight down the road. No
eyewitness claimed to have seen what happened. There was no evidence to indicate the place in
the road where the vehicles came in contact with each other. There was no showing as to the
speed of the Ford, whether fast or slow; or as to whether it was traveling on the right or wrong
side of the road; or as to whether it slid or was suddenly driven to the wrong side of the road into
the path of the Plymouth. The cars were so badly damaged that the pictures afford no reasonable
explanation as to what person or persons were legally responsible for their condition. In other
words, just how and why this grievous tragedy occurred is completely shrouded in mystery.
The burden was on the plaintiff to prove, by a preponderance of the evidence, not only
that the operator of the Plymouth was guilty of negligence but also that such negligence
proximately caused or contributed to the collision and consequent damage. By the use of
metaphysical learning, speculation and conjecture, one may reach several possible conclusions as
to how the accident occurred. However such conclusions could only be classed as possibilities;
and this Court has many times held that verdicts cannot be based on possibilities. At all events,
there is no sound or reasonable basis upon which a jury or this Court can say that the plaintiff
met that burden.
The judgment [granting the j.n.o.v.] must be affirmed.
Affirmed.
Notes and Questions:
1. As the court states: “The issue was submitted to a jury on the evidence for the
plaintiff—no evidence being offered for the defendant.” The defendant ultimately prevailed.
Why?
2. How did the plaintiff hope to prove—although there was no accident eyewitness, and
the two dozen pictures were inconclusive—that Ross caused the accident?
3. You have now read a case on successful pre-verdict and post-verdict attacks on the
plaintiff’s evidence. The respective motions were for directed verdict and judgment
notwithstanding the verdict. They are called a motion for judgment and renewed motion for
judgment in federal court. This is merely a difference in nomenclature. What then is the
difference between a FRCP 50(a) and 50(b) motion?
320
Mitchell v. Gonzales
California Supreme Court
54 Cal.3d 1041 (1991)
Lucas, Chief Justice [delivered the 6-1 opinion of the court].
In this case we decide whether BAJIa No. 3.75, the so-called proximate cause instruction,
which contains a “but for” test of cause in fact, should continue to be given in this state, or
whether it should be disapproved in favor of BAJI No. 3.76, the so-called legal cause instruction,
which employs the “substantial factor” test of cause in fact.2 FN2
Plaintiffs James and Joyce Mitchell, the parents of 12-year-old Damechie Mitchell, who
drowned in Lake Gregory ... sued defendants Jose L. Gonzales, Matilde Gonzales, and Mrs.
Gonzales’s son Luis (hereafter defendants) for damages, claiming defendants’ negligence caused
Damechie’s death. By special verdict, the jury found that defendants were negligent, i.e., they
had breached a duty, but that the negligence was not a proximate cause of the death.
The Court of Appeal concluded that, under the facts, the trial court erred when it denied
plaintiffs’ request to instruct the jury pursuant to BAJI No. 3.76 and instead instructed under
BAJI No. 3.75. After reviewing both instructions, the Court of Appeal concluded that BAJI No.
3.75 is potentially misleading and should not have been given, and that the trial court committed
prejudicial error when it refused to give BAJI No. 3.76.
We granted review in this case to determine whether courts should continue to instruct
juries on cause in fact using BAJI No. 3.75 in light of the frequent criticism of that instruction.
We conclude that the Court of Appeal was correct and that BAJI No. 3.75 should be
disapproved.
I. Facts
Damechie, 12 years old, standing 4 feet 11 inches tall, and weighing 90 pounds, had a
tag-along little-brother relationship with his friend Luis, who was 14 years old, 5 feet 4 inches
tall, and weighed 190 pounds. The Gonzales invited Damechie to accompany them to Lake
Gregory for the Fourth of July. According to Mrs. Mitchell’s testimony, when Mrs. Gonzales
called her to ask whether Damechie could accompany them, she informed Mrs. Gonzales that
Damechie could not swim. After Mrs. Gonzales suggested that the boys would play in the
shallow edge of the lake, the Mitchells agreed that Damechie could go, as long as he was
restricted to the edge of the lake.
Mrs. Gonzales denied that she had told Mrs. Mitchell the children would be swimming or
that Mrs. Mitchell had told her Damechie could not swim.
a
BAJI refers to California’s Bar Approved Jury Instructions. While some are still in use, they have been
generally replaced by CACI—California Civil Jury Instructions.
2
BAJI No. 3.75, requested by defendants and given by the trial court, provides: “A proximate cause of
[injury] [damage] [loss] [or] [harm] is a cause which, in natural and continuous sequence, produces the [injury]
[damage] [loss] [or] [harm] and without which the [injury] [damage] [loss] [or] [harm] would not have occurred.”
Because of the “without which” language, courts often refer to this instruction as the “but for” instruction of
causation [italics added]. BAJI No. 3.76, requested by plaintiffs and refused by the trial court, provides: “A legal
cause of [injury] [damage] [loss] [or] [harm] is a cause which is a substantial factor in bringing about the [injury]
[damage] [loss] [or] [harm]” [italics added]. We emphasize that despite the use of the terms proximate cause and
legal cause, BAJI Nos. 3.75 and 3.76 are instructions on cause in fact. Issues that are properly referred to as
questions of proximate or legal cause are [also] contained in other instructions. (See, e.g., BAJI No. 3.79
[superseding causes].)
321
According to Mrs. Mitchell, while Damechie was packing, he, Luis, and Luis’s sister,
Yoshi, talked about swimming. Mrs. Mitchell told the children Damechie could not swim and
should not go swimming. Luis and Yoshi said they would watch Damechie.
Luis testified that Mrs. Mitchell did not tell him that Damechie could not swim. He did
remember telling her they were going swimming, but he did not remember what she said about
it. He also remembered that Mrs. Mitchell told him to watch out for Damechie because Luis was
bigger and older than Damechie.
At the lake, the Gonzales family was joined by Mr. and Mrs. Reyes and their young
children. Luis asked his parents for money to rent a paddleboard. Mrs. Gonzales told him, as she
always did, not to go into water over his head. Both Luis and Yoshi knew how to swim.
The three children rented two paddleboards, replying affirmatively when asked by the
employee in charge of rentals whether they knew how to swim. During the morning, the children
stayed within 30 feet of shore, in water that was not over their heads. Mr. and Mrs. Gonzales
admittedly did not watch the children during some of the time the children were in the water.
Mrs. Gonzales testified that had she known the children were going into deep water, she
probably would not have allowed it because she believed it would be dangerous. Apparently,
because of her vantage point, it was difficult for her to watch the children in the water, and there
was a long period when she did not have them in sight. She assumed Luis would obey her,
although she acknowledged that he had disobeyed her on other occasions.
Mr. Gonzales testified that he relied on the lifeguards to watch the children and that he
neither knew nor asked whether Damechie could swim.
After lunch, Mrs. Gonzales told the children not to leave the picnic area and went to the
restroom. Nevertheless, the children left and rented another paddleboard. When she returned to
the picnic site 15 minutes later, the children were gone and Mr. Gonzales was asleep. She did not
know where they had gone, nor did she ask Mr. Reyes, who was awake and at the site, of their
whereabouts.
The children had entered the water and, on their paddleboard, crossed the lake. When
Luis started to push Damechie and Yoshi, who were on the paddleboard, back across the lake,
Damechie told Luis he could not swim.
Luis, nevertheless, pushed them 100 feet out onto the lake, into water over their heads.
He then told Damechie to let him get on the paddleboard because he was tired. Damechie again
told Luis he was unable to swim and asked him to be careful. Luis promised to be careful. After
Luis got on board, Damechie asked Luis whether Luis would save him if he fell off. Luis said he
would do so.
Shortly before the accident, the children were five to ten feet from three women,
apparently on a nearby paddleboard, who testified that the children made a lot of noise and
engaged in horseplay. They each testified that Luis was the rowdiest.
One of the women testified that the paddleboard tipped over and that the noise and
roughhousing stopped for five to ten minutes. Immediately before the board tipped over, Luis
was on the center of the board and Damechie and Yoshi were draped over it. During the quiet
period, neither Luis nor Yoshi called or gestured for help, but they appeared to be whispering.
The second woman testified that the quiet period lasted from one to five minutes, during
which time she glanced over and saw only Luis and Yoshi. She did not hear any cries for help.
322
The third woman thought three minutes of quiet elapsed before she notice only two
children where there had previously been three. She never heard any call for help.
After the women noticed one of the children was missing, Luis said, “Lady, my friend’s
down there,” indicating the lake. One of the women yelled for a lifeguard and asked Luis why he
had not signalled for help sooner. He replied that neither he nor his sister could swim. He also
said that Damechie had grabbed Luis in an effort to save himself and that he, Luis, had kicked
Damechie to get him off and to avoid being pulled under.
Luis testified that the board tipped over when Damechie put his hands on Luis’s shoulder.
He admitted he rocked the board before it tipped over and that Damechie’s movement had not
caused the board to tip. The employee in charge of the paddleboard rentals testified that “You
have to work at it” to get a board to tip. Yoshi testified that the board tipped when Luis attempted
to climb on.
Luis testified that Damechie was very scared while the board was rocking and that he
asked Luis not to rock the board because he did not want to fall off. Additionally, Luis admitted
that at the time, he was being very rowdy and that when he tipped the board, he and Damechie
fell off. Damechie panicked and grabbed Luis’s shorts, pulling them down. Luis pulled them up,
and Damechie grabbed Luis’s ankles. Luis shook free of Damechie, got to the surface, and
climbed onto the board. He looked into the water and could see Damechie’s fingers, which he
tried to grab. Yoshi remained on the board. Luis testified inconsistently, one time stating that he
waited two or three minutes before calling a lifeguard and another time stating that he
immediately called for a lifeguard.
Later that day, Luis told the lifeguards that Damechie had rocked the board, causing it to
flip. He asked them whether he and his family would be sued. Mrs. Gonzales asked him, “Why
didn’t you stay where I told you to stay?”
...
The complaint alleged causes of action for negligence and wrongful death. Defendants asserted
comparative negligence on the part of Damechie and his parents.
...
The jury, by special verdict, concluded that defendants were negligent but that the
negligence was not a cause of the death. The jury therefore did not reach a special verdict on
comparative negligence.
The trial court denied plaintiffs’ motions for a new trial or a judgment notwithstanding
the verdict. The Court of Appeal reversed.
II. Discussion
... [W]e conclude the Court of Appeal correctly determined that the trial court
prejudicially erred when it refused BAJI No. 3.76 and instead gave BAJI No. 3.75. Our
discussion proceeds in two steps. We begin by determining whether instructional error occurred.
Our analysis focuses on whether conceptual and grammatical flaws in BAJI No. 3.75 may
confuse jurors and lead them to improperly limit their findings on causation, and whether BAJI
No. 3.76 is a superior alternative instruction. Because we find error, we next analyze prejudice
and conclude that there is a reasonable probability that BAJI No. 3.75 misled the jurors into
finding that defendants’ negligence was not a “proximate cause” of Damechie’s death and that a
result more favorable to plaintiffs would have occurred if the jury had been instructed under
BAJI No. 3.76. Accordingly, we affirm the Court of Appeal’s decision reversing the judgment of
the trial court.
A. Alleged Instructional Error
323
As Dean Prosser observed over 40 years ago, “Proximate cause remains a tangle and a
jungle, a palace of mirrors and a maze....” Cases “indicate that ‘proximate cause’ covers a
multitude of sins, that it is a complex term of highly uncertain meaning under which other rules,
doctrines and reasons lie buried....” (Prosser, Proximate Cause in California (1950) 38
Cal.L.Rev. 369, 375.)
One of the concepts included in the term proximate cause is cause in fact, also referred to
as actual cause.3 Indeed, for purposes of BAJI No. 3.75, “so far as a jury is concerned ‘proximate
cause’ only relates to causation in fact.” (Com[ment] to BAJI No. 3.75, italics added.)4 “There
are two widely recognized tests for establishing cause in fact. The ‘but for’ or ‘sine qua non’
rule, unfortunately labeled ‘proximate cause’ in BAJI No. 3.75, asks whether the injury would
not have occurred but for the defendant’s conduct. The other test, labeled ‘legal cause’ in BAJI
No. 3.76, asks whether the defendant’s conduct was a substantial factor in bringing about the
injury.”
BAJI Nos. 3.75 and 3.76 [and the choice to be made in this lawsuit] are alternative
instructions that should not jointly be given in a single lawsuit. Several Court of Appeal opinions
have discussed the propriety of giving one or the other instruction in particular circumstances. It
has generally been recognized that the “but for” test contained in BAJI No. 3.75 should not be
used when two “causes concur to bring about an event and either one of them operating alone
could have been sufficient to cause the result. In those few situations, where there are concurrent
[independent] causes, our law provides one cannot escape responsibility for his negligence on the
ground that identical harm would have occurred without it. The proper rule for such situations is
that the defendant’s conduct is a cause of the event because it is a material element and a
substantial factor in bringing it about.” The foregoing authorities conclude that in such a
situation BAJI No. 3.76 should be given.
This case presents the issue of whether BAJI No. 3.75 should be given in any negligence
action.
Criticism of the term “proximate cause” has been extensive. [California Supreme Court]
Justice Traynor once observed, “In all probability the general expectation is the reasonable one
that in time courts will dispel the mists that have settled on the doctrine of proximate cause in the
field of negligence.” Similarly, while serving on the Court of Appeal, Justice Tobriner
commented, “The concept of proximate causation has given courts and commentators
consummate difficulty and has in truth defied precise definition.”
... The word [proximate] means nothing more than near or immediate; and when it was
first taken up by the courts it had connotations of proximity in time and space which have long
since disappeared. It is an unfortunate word, which places an entirely wrong emphasis upon the
factor of physical or mechanical closeness.”
3
In addition to the issue of causation in fact, Prosser lists the following issues that have at various times
been included in the proximate cause rubric: apportionment of damages among causes, liability for unforeseeable
consequences, superseding causes, shifted responsibility, duty to the plaintiff, and plaintiff’s fault. (Prosser,
Proximate Cause in California, supra, 38 Cal.L.Rev. 369, 374.)
4
Although the dissent embarks upon a general discussion of proximate cause, the discussion is misplaced.
We do not dispute the dissent's claim that there is more than one concept included in the term “proximate cause.”
For purposes of this case, however, we focus on the jury's consideration of BAJI No. 3.75 as it relates to cause in
fact.
324
It is reasonably likely that when jurors hear the term “proximate cause” they may
misunderstand its meaning or improperly limit their discussion of what constitutes a cause in
fact. ... [C]oncern that the word “proximate” improperly imputes a spatial or temporal
connotation is well founded. Webster’s Third New International Dictionary ... defines proximate
as “very near,” “next,” “immediately preceding or following.” Yet, “[p]roximity in point of time
or space is no part of the definition [of proximate cause] ... except as it may afford evidence for
or against proximity of causation.”
Given the foregoing criticism, it is not surprising that a jury instruction incorporating the
term “proximate cause” would come under attack from courts, litigants, and commentators. ...
“There are probably few judges who would undertake to say just what this means, and fewer still
who would expect it to mean anything whatever to a jury. ...
The misunderstanding engendered by the term “proximate cause” has been documented.
In a scholarly study of 14 jury instructions, BAJI No. 3.75 produced proportionally the most
misunderstanding among laypersons. (Charrow, Making Legal Language Understandable: A
Psycholinguistic Study of Jury Instructions (1979) 79 Colum.L.Rev. 1306, 1353 (hereafter
Psycholinguistic Study). The study noted two significant problems with BAJI No. 3.75. First,
because the phrase “natural and continuous sequence” precedes “the verb it is intended to
modify, the construction leaves the listener with the impression that the cause itself is in a natural
and continuous sequence. Inasmuch as a single ‘cause’ cannot be in a continuous sequence, the
listener is befuddled.” Second, in one experiment, “the term ‘proximate cause’ was
misunderstood by 23% of the subjects.... They interpreted it as ‘approximate cause,’ ‘estimated
cause,’ or some fabrication.”
...
In contrast, the “substantial factor” test, incorporated in BAJI No. 3.76 and developed by
the Restatement Second of Torts, section 431 has been comparatively free of criticism and has
even received praise. “As an instruction submitting the question of causation in fact to the jury in
intelligible form, it appears impossible to improve on the Restatement’s ‘substantial factor
[test.]’” It is “sufficiently intelligible to any layman to furnish an adequate guide to the jury, and
it is neither possible nor desirable to reduce it to lower terms.”
...
We recognize that BAJI No. 3.76 is not perfectly phrased. The term “legal cause” may be
confusing. As part of the psycholinguistic study referred to above, the experimenters rewrote
BAJI No. 3.75 to include the term “legal cause.” The study found that “25% of the subjects who
heard ‘legal cause’ misinterpreted it as the opposite of an ‘illegal cause.’ We would therefore
recommend that the term ‘legal cause’ not be used in jury instructions; instead, the simple term
‘cause’ should be used, with the explanation that the law defines ‘cause’ in its own particular
way.”
...
B. Prejudicial Effect of Erroneous Instruction
Having determined it was error to refuse to give BAJI No. 3.76 and instead give BAJI
No. 3.75, we must decide whether the error was so prejudicial as to require reversal.
Under article VI, section 13 of the California Constitution, if there is error in instructing
the jury, the judgment shall be reversed only when the reviewing court, “after an examination of
the entire cause, including the evidence,” concludes that the error “has resulted in a miscarriage
of justice.” Under the Constitution, we must determine whether it is reasonably probable that a
result more favorable to the appealing party would have been reached in the absence of error.
325
The first factor we consider is the degree of conflict in the evidence on the critical issue,
here cause in fact. ... The conflict in the evidence is not great. If properly instructed, it is
reasonably probable that the jury would have found defendants’ behavior to have been a
substantial factor, and thus a cause in fact, in Damechie’s death.
Second, we consider whether the jury asked for a rereading of the erroneous instruction
or of related evidence. The jury did not make such a request, but we note that jury received a
copy of the instructions, making such a request unnecessary.
Third, we analyze the closeness of the jury’s verdict. The jury found on a vote of nine to
three that Jose Gonzales and Luis were negligent (i.e., they breached a duty of care to
Damechie). Likewise, the jury concluded on a vote of 11 to 1 that Matilde Gonzales was
negligent. Yet the jury unanimously concluded that neither the actions of Luis nor Jose Gonzales
caused Damechie’s death and, on a vote of 10 to 2, the jury found that the actions of Matilde
Gonzales were not a cause of the death.
...
The verdict as to causation was not particularly close. It seems that the jury did follow
BAJI No. 3.75 but was misled by the instruction’s flaws: Having found the defendants negligent,
it is illogical and inconsistent on this record to conclude that they were not a cause in fact of
Damechie’s death. Accordingly, we conclude it is reasonably probable that the jury was
confused by BAJI No. 3.75 and overemphasized the “but for” nature of the instruction,
improperly focusing on the factor operative at the closest temporal proximity to the time of
death, Damechie’s inability to swim.
Fourth, we consider whether defense counsel’s closing argument contributed to the
instruction’s misleading effect. ...
The argument ... highlighted the condition temporally closest to the death, Damechie’s
inability to swim, and factors related to it. As discussed above, BAJI No. 3.75 improperly
emphasizes temporal and spatial proximity. The argument thus contributed to the instruction’s
misleading effect. It is reasonably probable that if the jury had received the substantial factor
instruction, counsel’s argument would not have misled the jury.
Finally we consider the effect of other instructions in remedying the error. BAJI No. 3.77
was requested by both parties and given by the court.11 This instruction did not remedy the
confusion caused by instructing the jury under BAJI No. 3.75. By frequently repeating the term
“proximate cause” and by emphasizing that a cause must be operating at the moment of injury,
the instruction buttressed rather counteracted the restrictions on time and place inherent in the
word “proximate.”
...
Based on the foregoing analysis, we conclude that it is reasonably probable a result more
favorable to the plaintiffs would have resulted if BAJI No. 3.75 had not been given.
Conclusion
11
BAJI No. 3.77 provides: “There may be more than one [proximate] [legal] cause of an injury. When
negligent conduct of two or more persons contributes concurrently as [proximate] [legal] causes of an injury, the
conduct of each of said persons is a [proximate] [legal] cause of the injury regardless of the extent to which each
contributes to the injury. A cause is concurrent if it was operative at the moment of injury and acted with another
cause to produce the injury. [It is no defense that the negligent conduct of a person not joined as a party was also a
[proximate] [legal] cause of the injury.]”
326
We conclude that BAJI No. 3.75 should be disapproved, that the trial court erred when it
gave the instruction, and that such error was prejudicial. Accordingly, the decision of the Court
of Appeal reversing the judgment in favor of defendants is affirmed.
Kennard, J.
I dissent.
The majority invalidates a jury instruction on proximate cause—an essential element of
every tort case—that has been used in this state for some 50 years and embodies well-established
law. And, by delegating responsibility for defining proximate cause to the Committee on
Standard Jury Instructions, the majority neglects its duty to provide guidance to trial courts and
litigants. This court should give guidance to the committee, not seek guidance from it.
...
Although BAJI No. 3.75 is not a model of clarity, and a better instruction would certainly be
most welcome, this court should not proscribe the use of BAJI No. 3.75 unless and until it
proposes a better instruction that includes both elements of proximate cause, or at least provides
meaningful guidance on the subject. Because the majority has done neither, I would not hold in
this case that the trial court erred in instructing the jury with BAJI No. 3.75.
...
When the “substantial factor” test of BAJI No. 3.76 is used as a means of setting limits
on liability, it is no better than the “but for” test of BAJI No. 3.75, the instruction invalidated by
the majority, and it is just as problematic as the word “proximate” in BAJI No. 3.75. ... “A
number of courts have [used substantial factor as a test of proximate cause, not just cause in
fact], apparently accepting the phrase as the answer to all prayers and some sort of universal
solvent. As applied to the fact of causation alone, the test though not ideal, may be thought
useful. But when the ‘substantial factor’ is made to include all the ill-defined considerations of
policy which go to limit liability once causation in fact is found, it has no more definite meaning
than ‘proximate cause,’ and it becomes a hindrance rather than a help.”
...
Thus, the majority fails to recognize that BAJI No. 3.76 is no better than BAJI No. 3.75
as a comprehensive proximate cause instruction.
...
Notes and Questions:
1. Do not presume there’s something wrong, when your Torts professor discusses
“proximate cause” as an element of negligence. Mitchell is: (a) an opinion from just one state;
and (b) limited to jury instructions in that state.
2. The respective lawyers typically draft their own jury instructions, hoping the judge will
use them. In that instance, they must provide citation to authority to establish the validity of their
personal statements of the law. Courts often give a combination of both approved [form] and the
lawyers’ own written instructions tailored to the facts of the case. The judge has the ultimate
responsibility to ensure that the jury is given proper instructions. A “good” instruction (from the
local book of approved jury instructions) may thus become a “bad” instruction, if inappropriate
because it raises an issue not part of the trial evidence—even if that issue were included in the
pleadings. Also, note that ‘“A jury instruction is erroneous if it misleads the jury as to the correct
legal standard or does not adequately inform the jury on the law.’ An erroneous jury instructio