Civil Procedure Outline
Levin 2002
INTRODUCTORY MATERIAL (MAYBE OPPORTUNITY TO BE HEARD)

Due Process Clause:
a) Court must have jurisdiction over the party and issues
b) Parties must received adequate notice
c) Parties must have adequate opportunity to present case.
 Fuentes
Rent to own contract; Two items total; Creditor entitled to repossession if default on payment; Took
both items; Two state statutes show no proof is needed for writ of replevin
Holding: Procedural de process requires that parties whose rights are to be affected are entitled to be
heard at a meaningful time; and, in order that they may enjoy the right, they must be notified.
 Mitchell
Trial permitted sequestration of property ex parte; P showed possession through delinquency of
payments
Holding: Because the plaintiff must make a showing of ownership, the plaintiff may re-possess the
property without giving the defendant notice or opportunity to be heard.
Holding: The competing interests between these two cases distinguish the contrary holdings. In Fuentes,
the majority feels the constitutional principle that one cannot be deprived of property without
due process prevails. In Mitchell, the extra burden of showing makes their re-possession
constitutional because it undermines the Fuentes rationale by asserting proof of their ownership,
and underscores the pragmatic principle of judicial efficiency (less court costs).
 Di-Chem
Garnishment of bank account
Holding: Because the proof of ownership by plaintiff is only conclusory allegations, like Mitchell it is
unconstitutional to deprive one of their property.
GETTING THE DEFENDANT INTO COURT
B. Personal Jurisdiction (Ch.2)
Historical development of the minimum contacts test
 Pennoyer
P attempts to recover land. Contends D could not have been given a court order to take P’s property b/c
the court had never obtained personal jurisdiction over him.
Rule :
State has personal jurisdiction over people and things that are inside of its boundaries, however,
where the object of the action is to determine the personal rights and obligations of the parties,
service by publication against nonresidents is ineffective to confer in personam jurisdiction.

Traditional basis of in personam jurisdiction:
a) Served with process in the forum despite where the claim arose, or
b) Served with process on the agent in the forum, or
c) D is domiciled in the forum, or
d) D consents to jurisdiction.
 Hess
Holding: In advance of a nonresident’s use of its highways, a state may require the nonresident to appoint
one of the state’s officials as his agent on whom process may be served in proceedings growing
out of such highway use.
 International Shoe
Plaintiff was incorporated in Delaware w/ principal place of business in St. Louis. Washington office
represented company and sold goods there. WA office did not contribute to state
unemployment fund.
Holding: For a state to subject a nonresident defendant to in personam jurisdiction, due process requires
that he have certain minimum contacts with it such that the exercise of jurisdiction does not
offend traditional notions of fair play and substantial justice.

Satisfaction of due process depends on the quality and nature of the activity in relation to
the fair and orderly administration of laws.

Even single or occasional acts may, because of their nature, quality and circumstances, be
deemed sufficient to render a corporation liable to suit.
Modern elaboration of the minimum contacts test
a) Some long-arm statutes enumerate the incidents in which the state may exercise
jurisdiction.
b) Other states made the extension as much as the Constitution would allow.
 Gray
Rule :
Whether a nonresident activity within a state is adequate to subject it to jurisdiction of that state
depends upon the facts of each case, and the relevant inquiry is whether the defendant engaged
in some act or conduct by which he invoked the benefits and protections of the forum.
 Worldwide VW
Rule :
The sale of an automobile by a corporate defendant is not a sufficient purposeful availment of
the benefits and protection of the laws of a state where the automobile is fortuitously driven
there so as to constitute the requisite “minimum contacts” with that state for personal
jurisdiction purposes.

Forseeability is not determined by the likelihood that the product could end up there.
Rather it is determined by the “conduct and connection” with the forum state. Evidence
shows that the companies here do not:
a) close sales or provide services in the state, and
b) solicit business with salespersons or advertisements, and
c) sell specifically to residents of the forum state

The mere “unilateral activity” of the plaintiff by placing the product in the forum state does
not satisfy the “minimum contacts” requirement.
 Keeton
Hustler had substantial circulation in N.H. P also a nonresident sued there b/c only state where statute of
limitations had not passed.
Rule :
A plaintiff who has no contacts with the forum state may sue in that forum if the defendant has
established minimum contacts with the forum state.
 Kulko
Holding: If a nonresident’s contact with a forum is personal and unrelated to business, then the minimum
contacts test may not be met.

The purchase of a single ticket for one’s daughter to join her mother in the forum state, is
not sufficient contact.

Merely causing an effect within the forum state without purposeful availment will not
support jurisdiction.
 Burger King
(Second Prong: Fairness)
Holding: Once the plaintiff has established relevant “minimum contacts” with the defendant and forum
state as outlined in International Shoe, the defendant has the burden of proving that litigating in
the forum state is unconstitutionally unfair.

Test:
a) establish minimum contacts – “purposefully avail himself of the benefits and
protections”
b) determine if forum is unconstitutionally unfair for the defendant – “fair play and
substantial justice”

The defendant had sufficient contact with Florida due to the contract and his course of
dealing.

He did not establish an unconstitutionally unfair burden.


 Asahi
Factors considered for burden:
a) Burden on the defendant
b) Interests of the forum state
c) Plaintiff’s interest in obtaining relief
d) Judicial system’s need for an efficient resolution
e) “shared interest of the several states in furthering fundamental substantive social
policies.”
Barbri Professor offered these:
a) Relatedness – where did the claim arise
b) Convenience – burden on defendant to prove unfair
c) State interest
d) d + e from above
4-4 split
(First Prong: Minimum Contacts vs. Stream of Commerce)
Holding: (plurality) Placement of a product into the stream of commerce is not enough for state court to
exercise jurisdiction; rather, to satisfy “minimum contacts” there must be some act by which the
defendant purposefully avails itself of the privilege of conducting activities within the forum
state.
Holding: (Brennan concurring) The stream of commerce refers to the “regular and anticipated flow of
products from manufacture to distribution to retail sale.” If the manufacturer is aware that the
product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a
surprise.

Note that Brennan is referring to a manufacturer, not simply a small store that makes
widgets. Also, the awareness of the product being marketed in the forum State. With
these three elements proven, the gap between this test and the “minimum contacts” standard
is small. Could be argued either way. Look for employees, proximity.

Both agreed with the 2nd prong of the test: California has no interest in an indemnification
suit between two Asian companies who have the burden of litigating a case on another
continent. This is not the interest of the several states but the several nations. (international
context overall).
 Perkins
(General Jurisdiction)
Foreign corporation that conducted business in Ohio was sued by plaintiff for a claim unrelated to
activities within Ohio
Holding: A forum state may decide to exercise jurisdiction over a defendant who maintains “continuous
and systematic” contact with the forum.
 Helicopteros
D was foreign corporation. Had no business in Texas, no license to do business, no agent. Only one trip,
purchases and checks drawn from Texas.
Rule :
When a plaintiff’s claim does not “arise out of” the defendant’s contacts in a forum state, then
the court must question whether the defendant’s contacts with the forum state are sufficiently
“continuous and systematic” so as to not offend principles of justice in exercising jurisdiction
over the defendant.

Mere purchases, even if occurring at regular intervals, are not enough for a State to exercise
jurisdiction over defendant.

The training of defendant’s employees in a forum state is considered part of its purchases
this brief presence does not purposefully avail itself.

Acceptance of checks drawn from forum state’s bank is a unilateral activity by a third party
that has no consequence to the defendant and does not allow exercise of jurisdiction.

One trip to forum state is also not enough.
In rem jurisdiction and other single-factor tests
 Tyler
 Pennington
 Harris
 Shaffer
P owned one share in stock of corporation (incorporated in Delaware with principle place of business in
Arizona. Activities bring up claim occurred in Oregon). Suit against corporation and D’s
(executives and officers). D requested and was granted the sequestration of D’s property –
stock and stock options that was considered to be in Delaware b/c company was incorporated
there. D’s were notified by mail and publication. P won and SC of DE affirmed.
Holding: Jurisdiction cannot be founded on property within a state unless there are sufficient contacts
within the meaning of the test developed in International Shoe.

The Court seems to hint that this is directed at quasi in rem suits as Powell’s concurring
opinion suggests. (real property per se is sufficient contact).

Here, Delaware did not have a specific statute that permitted courts to exercise jurisdiction
over corporate fiduciaries, although most states do.
 Burnham
4-4 split
P and D agree to file for divorce. D files in NJ, P files in CA. When D goes to CA to visit his children he
is served with court summons.
Holding: (Scalia) It is a firmly established principle of personal juridiction that courts of a state have a
jurisdiction over persons physically present in the state.
Holding: (Brennan) The proper test is an analysis of fairness, and it does not offend notions of fair play
and justice to subject a physically present nonresident to jurisdiction.

Although Brennan seems to imply an abandonment of the traditional state’s right to exercise
in personam jurisdiction over a physically present nonresident, the facts that lead Brennan
to suggest his three day stay justified process are so weak that it seems he was just
confirming the traditional rule. For instance, why does it make it unfair for him to be
served after he leaves California? He still benefited from his stay, yet it seems highly
unlikely that anyone would rule this constitutional. If they did, anyone who has ever
traveled into any state could eventually be served.
 Milliken v. Meyer
Holding: “Domicile in the state alone is sufficient to bring an absent defendant within the reach of the
state’s jurisdiction…”

Either Burnham test satisfies this rule. Always jurisdiction in home state to ensure that one
is sueable somewhere. In balancing, the defendant pays taxes, votes, etc., through his home
state.
 Zapata
An American corp. and a foreign corp. agreed in K to settle disputes in London. American courts refused
to allow this.
Rule :
Supreme Court reversed and said we cannot demand things to be settle on our own terms and
the companies must respect the agreement.
 Carnival Cruise Lines
P sued Cruise Line in DC of WA. Ticket said decisions must be rendered in FL.
Holding: Despite the defendant’s significant contact with the forum, a forum selection clause will not be
dismissed because a “reasonable forum clause” is permissible when it lessens: the burden of a
company that could easily see litigation in every state with one mishap; the confusion of the
plaintiff in where to sue; and the fares charged to other passengers.

Note the court still said “reasonable” (or you could maybe say fairness) and then primarily
dealt with the issue that a cruise ship could easily be sued in every state due to one accident.
The fact that people rarely read these clauses seemed not to bother the court.
Personal jurisdiction in federal court
 Dejames
FRCP 4 (k)
P a citizen of NJ files suit under the admiralty jurisdiction of the NJ Federal DC. D has no contacts with
the form state but does with the nation.
Holding: Since Congress has not enacted a federal statute authorizing nationwide service of process in
admiralty actions, the federal district courts are limited by FRCP 4(k)(1)(a) which applies the
“minimum contacts” standard to where the state DC sits.

Note there are special situations
a) FRCP 4(k)(1)(B) is a 100 mile “bulge” rule.
b) FRCP 4(k)(1)(C) + (D) pick up federal statutes that Congresses enacts (i.e., 28 U.S.C.
2361 provides that an interpleaded party may be served anywhere).
Challenging Personal Jurisdiction
 Orange Theatre
Rule :
Rule :
Rule :
(no need to make special appearance; rather, timely motion)
A party no longer needs to assert a “special appearance”; rather, under FRCP 12 (h) the party
may openly argue personal jurisdiction as long as the party has made a timely motion as
prescribed in the rule.
 Data Disc
Rule :
FRCP 12 (b) (g) (h)
(method to determining jurisdiction)
Because there is no statutory method, the mode of determining jurisdiction is left to the trial
court.
If the evidence prior to trial does not dictate personal jurisdiction, the plaintiff must assert more
evidence and prove jurisdiction by a preponderance of evidence. If the merits of the case are so
intertwined with the facts needed to decide jurisdiction, the TC may wait to decide that issue
during trial.
The plaintiff at trial must always prove jurisdiction by preponderance of evidence as long as the
issue of jurisdiction was contested by a preliminary motion.
 Baldwin
(collateral attack of jurisdiction)
In prior suit, D made a special appearance in MO federal court. In a subsequent suit in Iowa to enforce
judgment, the D again tried to dispute jurisdiction.
Holding: A party may not collaterally attack an issue previously decided even if their presence in court
were only a special appearance.

“Public policy dictates that there be an end of litigation; that those who have contested an
issue be bound by the result of the contest; and that matters once tried shall be forever
settled as between parties.”
Rule :
However, a party that makes no appearance and receives a default judgment may still contest
the judgment for want of personal jurisdiction.
C. Notice and Service of Process



D should receive copy of complaint with summons directing D to answer.
Rule 4—means of making personal service, alternative of using state rules in which the
court sits, service in foreign country.
Rule 4(d)—action commences when  sends form entitled “Notice of Lawsuit and Request
for Waiver of Service of Summons”—sent by mail or other reliable means-- have 30 days
to return the waiver otherwise they will be charged with the costs associated with providing
formal service—incentive to return also that they will have 60 days to answer the complaint
if the waiver was returned in a timely fashion. If  confronts statute of limitations, formal
service may still be best bet because  may refuse to waive service.
 Mullane
D established common trust fund in accordance with NY law. Although it had the name and address of
many beneficiaries of the common trust, when the D attempted to settle accounts for the fund, it
only need to give notice through publication. Of the known plaintiffs, some were out-of-state.
Holding: In order to satisfy due process challenges, notice must be by means reasonably calculated to
inform the desired parties.

The means employed must be such as one desirous of actually informing them—not just a
mere gesture.



The statutory notice to known beneficiaries is inadequate, not because it fails to reach
everyone, but because under the circumstances it is not calculated to reach those who could
easily be informed by other means at hand.
Balance of interests: “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.” Reasonable risks that it might not reach a party are okay.
In Greene v. Lindsey where a group of tenants in a housing project faced eviction, the
Supreme Court held that under the state forcible and detainer statute notice was insufficient.
Despite posting the notice on the tenants door, the notice is insufficient where the process
servers admit that the notices are “not infrequently” torn down before tenants see them.
 Maryland Fireman
FRCP 4 (“waiver of service”)
P received a default judgment bases on his attorney’s affidavit that D had waived service. Afterwards
court asked for more details: P served the D w/ summons and complaint. The opposing counsel
talked three times. The D, however, changed attorneys.

Rule 4(d) – P is authorized to send a notice of action with a request for waiver of service. If
D chooses not to waive formal service then he must pay the costs.

Committee notes of the rule state that receipt does not make the party obligated to answer
and does not provide a basis for default judgment.

Rule 4(e) – P may server process “pursuant to the law of the state in which the district court
is located, or in which service is effected.”
Holding: Mere receipt of a request for waiver of service does not give rise to any obligation to answer the
lawsuit and does not provide a basis for default judgment.

Note: Federal rules requires “first class mail, prepaid” but Maryland demanded certified
mail and therefore his attempt to serve was not within Maryland’s rules either.

Most circuits agree with strict compliance to “first class mail, postage prepaid.”

Although there is a rule for “harmless error” Rule 61, the Courts feel that something as
simple as complying with the service requirements should not be given leeway. Does this
also have to do with Courts distaste for default judgments?
 Rovinski
D dismissed first action of nonresident motorist suit by claiming he was a resident of the state. He then
moved to dismiss diversity suit in a federal Minnesota court. Court held it valid.
Rule :
Rule 4(e)(2) should be liberally construed as to service of process. Otherwise, strict
construction would lead to uncertainty in is application in varying situations, such is the case
here where States interpret “usual place of abode” in different ways.
 Hellenic Challenger

Rule 4(h)—service upon corporations, partnerships, and unincorporated associations that
are subject to suit under a common name. Most frequently invoked portion of the rule is the
part permitting service by delivery of process to an officer, a managing agent, or a general
agent.
Process was served on claims adjuster who had twice received notices against the company before. His
boss, the claims manager, was absent.
Holding: The court held that Rule 4(h) does not require rigid formalism but service that is “reasonably
calculated” to alert defendant.

Here, the adjuster had received two summons before in the normal course of his duties as in
receiving and investigating claims against the defendant before. He had familiarity with the
service process.
 Wyman
(etiquette of service)
Appellee and appellant had an affair. She informed him she was leaving the country to care for her
mother and that she had to see him again. He agreed to go to FL to see her. When he got there,
served with process.
Holding: Upon proof that defendant was induced into a forum by fraud or trickery, the court of another
forum may deny the enforcement of said forum’s judgment even if the defendant was properly
served.

Note the distinction of tricking someone to travel into the jurisdiction, and tricking someone
who is already subject to jurisdiction (i.e., Harry Grossman – infamous process server –
who tricked people already subject to jurisdiction).

Therefore, if D here had sufficient contacts with Florida then despite being tricked into the
state, the service could be enforced.
D. Federal Subject-Matter Jurisdiction (Ch.4)
Federal-question jurisdiction



USC § 1331—Federal Question—district courts have original jurisdiction of all civil
actions arising under the Constitution, laws, or treaties of US.
USC § 1337—Commerce and antitrust regulations—district courts have original
jurisdiction of any civil action or proceeding arising under any congressional act regulating
commerce or protecting trade and commerce against restraints and monopolies.
USC § 1442—Federal officers sued or prosecuted—civil action brought in state court can
be removed to district court in the place where the action is pending.
 Mottley
P was injured on D’s train. D gave them passes for life. Later, Congress passed a statute stating the
issuance of free passes was unlawful. P filed in a district court b/c it anticipated a federal
question defense.
Holding: Alleging an anticipated constitutional defense in the complaint does not give a federal court
jurisdiction if there is no diversity of citizenship between the litigants.

This is the well pleaded complaint rule because the complaint did not state a cause of
action that could be heard in a federal court. It just stated a possible defense.

Subject matter jurisdiction can be challenged at any stage of the proceeding.

In Skelley Oil, relying on the Declaratory Judgment Act, plaintiff filed for a declaration that
certain contracts had not terminated. Plaintiff did this b/c if it had sued the defendant for
breach of contract, the D would have argued termination which depended upon a federal
question. The Supreme Court denied this because it effectively disregarded Mottley and a
“whole trend of jurisdictional legislation by Congress.” Therefore, the Court looks to what
the claim would be without the declaratory judgment (here, damages for breach).

Smith—state law created a cause of action that depended upon a federal law. Here, the
plaintiff claimed the Act of Congress in which the state law relied upon was
unconstitutional. The Supreme Court ruled it was a federal question because the claim
rested upon “the construction or application” of federal law.

Moore—P brought an action under state tort law which relied upon the determination of
state and federal safety statutes. Can Smith and Moore be reconciled?

Shoshone – cause of action created by federal law in which deciding the “right to
possession” depended upon “local customs or rules … so far as the same are applicable and
not inconsistent with the laws of the United States.” The Court ruled that this did not create
a federal issue because in adjudicating the decision the court should not look to the laws of
the Constitution the local area custom. This situation is reverse of Smith which arose from a
state created cause of action that turned on issues of federal law, whereas this is a federal
cause of action that turns on issues of state law.
 Merrill Dow
Holding: Incorporation of a federal standard in a state law private action, when that standard creates no
federal right of action, does not confer federal question jurisdiction.

When federal law merely creates a standard which state law incorporates, and Congress has
explicitly held that no private right of action exists under that law, it would undermine
congressional intent to conclude that the matter nevertheless arises under federal law.

“a suit arises under the law that creates the cause of action.” – Holmes

Both the majority and the dissenting refer to the following factors:

a) Increased complexity of federal legislation
b) Increased volume of federal legislation
c) Desirability of a more careful scrutiny of legislative intent.
“Arising under” in Article III extends to all cases in which a federal law is “an ingredient”
of the case. However, it is not self-executing and Congress retains the power to limit the
federal courts’ scope of the federal question jurisdiction.
Diversity Jurisdiction
 Mas
28 U.S.C. § 1332(a) – Diversity of Citizenship
P’s, Mr. Mas, citizen of France, and Mrs. Mas, from MS, were graduate assistants at LSU, lived there for
about 2 years after there marriage in MS. Moved to IL, intended to move back to LA. Rented
apartment from Perry. Appeal arises from judgment awarding Mr. Mas $5000 and Mrs. Mas
$15,000 for damages incurred as a result of the discovery that their bedroom and bathroom had
2-way mirrors and they had been watched by Perry. D contended there was no diversity, and
they lacked jurisdictional amount.
Holding: For the purposes of diversity jurisdiction, mere residence in a state does not establish domicile;
rather, a domicile is the “true, fixed, permanent home and principle establishment, … to which
[the party] has the intention of returning whenever he is absent therefrom…”
Holding: Although the wife-plaintiff had no intention of returning to her domicile, she had no intention of
establishing a domicile elsewhere and therefore remains a domiciliary until she effectuates a
change.

“A change in 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.”

Proper time to determine the existence of diversity is the time at commencement of the suit.

28 U.S.C. § 1332(a) now provides that an alien admitted to the United States for permanent
residence is a citizen of the State in which he is domiciled. Does this fix anything? What if
the alien has no intentions?

In Kramer v. Caribbean Mills, foreign corporation assigned interest in a contract with
another corporation to an attorney for $1 who in turn agreed to give them 95% of the
proceeds from any action he might bring against them. This deal established diversity. The
Court of Appeals dismissed it pursuant to 28 U.S.C. § 1359 which would not allow it b/c it
was “improperly and collusively” made. Court reasoned that this effectively allow for the
construction of diversity jurisdiction.

Plaintiffs may attempt to destroy jurisdiction - In Rose v. Giamatti, Rose filed a suit against
the Commissioner of Baseball, MLB, and the Cincinnati Reds as defendants. Court ruled
that this was okay because a “long established doctrine” in determining diversity for federal
courts allowed courts to disregard “nominal or formal parties to the action.” It is difficult to
understand how the Reds were not real parties in the litigation. An underlying reason is
because Rose was immensely popular with the forum, Ohio.
Jurisdictional amount
 Tongkook
28 U.S.C. § 1332(a) – Jurisdictional Amount
P filed a diversity action for damages due to a breach of contract. At commencement of trial P believed D
owed $117,000. Through pre-trial discovery, it was discovered that both parties made an
accounting error, and the amount in controversy was less than required.
Rule :
A plaintiff’s good faith claim for satisfying the jurisdictional amount controls, unless it
“appear[s] to a legal certainty that the claim is really for less…”
Holding: It is a “legal certainty” that the amount in controversy does not reach the requisite level when
after pre-trial discovery, the plaintiff concedes that the jurisdictional amount has not bee
reached.

In claims for “uncertain money damages” even where it is unlikely that the plaintiff will
recover above the jurisdictional amount, the court cannot deny jurisdiction.

Here, the plaintiff’s “good faith” claim at the commencement of the suit is moot, if he
admits before trial that he does not satisfy the requisite amount.

 Snyder
In McNulty, in seeking damages due to personal injuries, the plaintiff asked the court to
dismiss the action because counsel felt the requisite amount could not possibly be reached.
The court granted the defendant’s request to dismiss this motion. It seems because this
involved “uncertainty” in the amount that could be recovered.
(The doctrine of separate and distinct claims)
P issued class action derivative suit. Her claim would fall just below jurisdictional amount, but the
aggregate amount far exceeded the amount needed.
Rule :
The separate and distinct claims of two or more plaintiffs cannot be aggregated in order to
satisfy the jurisdictional requirement

“Aggregation has been permitted only
a) in cases in which a single plaintiff seeks to aggregate two or more of his own claims
against a single defendant and
b) in cases in which two or more plaintiffs unite to enforce a common undivided interest.”

Reasoning in court relied upon the long established rule with no change by Congress
despite their ability to do so. Also, concern for class action suits is decreased when
realizing that several causes of actions are created under federal law. This one, however,
came from state law.

HYPO: Father has claim against company for $12,000. Dies and leaves it to children.
They now a claim for $4,000 each. Can they sue? Yes, it is still an undivided interest.
Much like joint tenancy.
 McCarty
Rule :
McCarty v. Amoco Pipeline Co—court must evaluate not only intangible rights but it must
decide what rights are involved in the controversy and from whose viewpoint their value is to be
measured.

Some courts say only value to  can be used to determine jurisdictional amount—
Glenwood—but holding there really says that jurisdiction is present if the value to the 
exceeds the required amount regardless of the value to --doesn’t say that it can’t be vice
versa.

Another approach is to view amount in controversy from point of view of the party seeking
to invoke federal jurisdiction.
a) problem 1—anomalous results.

“Either viewpoint” rule—look to  complaint—pecuniary result to either party which the
judgment would directly procure.
Federal and nonfederal claims in combination


28 U.S.C. § 1367
NOTE: LOOK AT PP. 269 OF E.&E.
 Gibbs
Holding: In suits involving state and federal claims, federal courts may decide all claims if they derive
from a “common nucleus of operative fact” and are not lacking substance.

Lacking substance could mean “obviously without merit” or “unsoundness so clearly results
from previous decisions of this court.”

This allows a court to hear the case, but does not demand that it must. A court may exercise
discretion.
 Kroger
P sued a diverse defendant who impleaded Owen. Owen was diverse, but during trial it was discovered
that Owen was really not.
Holding: A federal court may not exercise subject matter jurisdiction when a federal statute indicates
congressional intent to deny the federal court’s ability to hear a case.

Here, the court rule that 28 U.S.C. § 1332 decided there was no diversity and therefore
could not be heard. This may be extended to other statutes where Congress prefers state
courts hearing the case.

Levin really looked at the number of possible claims. Joinder, impleader, counter-claims.
Be sure to know this for an exam.
Removal
 Bright
28 U.S.C. § 1441(b)(c) – “Artful Pleading”
P entered into an employment K with D in which P claimed an exemption from federal income tax. IRS
informed D that P was wrongfully withholding. P began withholding federal and state income
tax. P sued for breach of K and D removed case from state to federal court. P then asserted that
he would only be arguing the withholding of his state income tax.
Rule :
Any action brought in a state court of which the federal courts would have had original
jurisdiction may be removed by the defendant to federal district court.

“A plaintiff will not be able to conceal the true nature of a complaint through artful
pleading.”

When the withholding of state and federal tax is based upon a single IRS directive, then the
two claims have a “common nucleus of fact” and the federal court may hear both issues.

Note by Wright: Discussion of the Problems of interpreting 28 U.S.C. § - §1441 (b) and
(c). Provision (b) provides that a case involving a nonfederal claim may be removed to a
federal court if part of that claim is “arising out of” the Constitution. (c) provides that if
there is a “separate and independent claim or cause of action” that is conferred by §1331
then all other cause of actions or claims can be removed with it.

This creates a problem. If closely related the claims could be removed to federal court
under (b). If they are separate enough, they could be removed to federal courts under (c).
Attacks on subject-matter jurisdiction
 Capron
Rule :
Even where the parties to a suit brought in federal court appear and consent to the court’s
diversity jurisdiction, if no actual diversity of citizenship exists between the parties, the court
has no power to hear the case.

Simply stated, parties cannot give the courts power or reason to hear a case.

Note the distinction between personal jurisdiction and subject matter jurisdiction. Personal
jurisdiction must be contested before trial FRCP 12(h)(1) or it is waived and one can no
longer argue it. Subject matter jurisdiction - FRCP 12(h)(3) may be contested at anytime.
C. Venue and Forum Non Conveniens
 Bates
28 U.S.C. § 1391
Bates filed an action against C&S for violating the Fair Debt Collection Practices Act. Bates
had since moved to the Western District of New York. C&S sent an offensive letter to Bates’
old address and the Post Office forwarded it to his home in New York.
Holding: Venue is proper in a district when a substantial part of the events giving rise to a claim under
the Fair Debt Collection Practices Act occurred because an allegedly offending letter was
received in the district.

28 U.S.C. § 1391 - Congress amended the general federal question statute in order to
overrule a Supreme Court case in order to broaden it ability. Instead of district claim arose
in, it is a “judicial district in which a substantial part of the events or omissions giving rise
to the claim occurred.”

Three methods: There are three basic ways by which there might be venue in a particular
judicial district: (1) if any defendant resides in that district, and all defendants reside in the
state containing that district; (2) if a "substantial part of the events … giving rise to the
claim occurred, or a substantial part of property that is the subject of the action is situated,"
in the district; and (3) if at least one defendant is "reachable" in the district, and no other
district qualifies.

Even thought the defendant did not purposely contact the plaintiff in his district, venue is
proper because the “statutory standard for venue focuses not on whether a defendant has
made a deliberate contact – a factor relevant in the analysis of personal jurisdiction – but on
Facts:

the location where events occurred.” Here, the offending letter reached the plaintiff in his
district.
Consider if Defendants could successfully object to venue in
a) Cresswell b) Helicopteros
c) Burger King
 Hoffman
Facts:
Rule :
Patent infringement. D’s transferred from Texas district to Illinois where P’s could not have
brought the suit.

Doctrine of forum non conveniens – a court having jurisdiction over a particular case may
use its discretion to decline to exercise that jurisdiction, if the court concludes that the
action could be more appropriately tried in some other jurisdiction. 28 U.S.C. § 1404(a)
Under the “plain meaning” of 28 U.S.C. § 1404(a), a federal court can only transfer a case to a
court where the plaintiff could have originally brought the case.

This allows plaintiff bias because he gets to choose where he brings the suit, then burden is
on defendant to transfer to a district where he could have brought suit.

Therefore, if initially one or more of the defendants could not have been served (personal
jurisdiction), or venue would not have been proper, then even consent by all defendant’s
would not allow a transfer. Even if both parties agree after filing of the suit to transfer to a
mutually more favorable district, it will not be allowed. This is odd because a defendant is
allowed to waive a contest to venue or jurisdiction.

Strict construction: has been praised because it limits forum shopping by the defendant, but
it has also been criticized for severely limiting 1404’s reach and allowing forum shopping
for plaintiff.
 Gulf Oil
Rule :
The burden is on the defendant to make a convincing showing that the action would be better
litigated in a different district.

“Unless the balance [of factors] is strongly in favor of the defendant, the plaintiff’s choice
of forum should rarely be disturbed.”

Consider factors for parties convenience:
a) Ease of access to sources of proof
b) Availability of compulsory process for attendance of unwilling
c) Cost of obtaining attendance of willing witnesses
d) Possibility of view of premises, if appropriate
e) All other practical problems that make trial of a case easy, expeditious and inexpensive.

Also consider the factors for State interest:
a) Burden of litigation of decision. “There is a local interest in having localized
controversies decided at home.”
b) Jury duty is burden that ought not to be imposed upon the people of a community which
has no relation to the litigation.
 Piper
Plane built by American Corp. crashed in Scotland. Decedent’s representative sought wrongful
death action in the United States. D’s moved to dismiss. P candidly admits that the sole reason
for choosing the U.S. was b/c the laws are much more favorable than in Scotland.
Holding: A plaintiff may not defeat a motion to dismiss for forum non conveniens merely by showing that
the substantive law that would be applied in the alternative forum is less favorable to him than
that of the present forum.

“The possibility of a change in substantial law should ordinarily not be given conclusive or
even substantial weight in the forum non conveniens inquiry” because:
a) Against purpose of doctrine: Because plaintiff will obviously bring suit in forum with
best choice of law, refusing dismiss solely because the law is unfavorable would
virtually end dismissals.
Facts:



b) Impractical: Courts would be frequently required to do choice-of-law analysis –
interpret other districts, circuits, and foreign nations.
Rationale behind doctrine is convenience. Not that substantial when the plaintiff is a
foreign party.
The Courts forum non conveniens analysis.
a) Private interest factors: fewer evidentiary problems in Scotland; because witnesses are
beyond compulsory process, the defendant’s did not have to list all of the witnesses
because the point of the motion is to eventually find and compel the witnesses to testify;
defendant needed to join party’s who were in Scotland.
b) Public interests factors: Pennsylvania has no interest in this decision, but Scotland
does; also, burden of litigation would affect PN’s courts for a Scottish case.
There are exceptions: If the state chosen by the plaintiff has the only adequate remedy for
the wrong alleged, then the motion may be denied.
D. Problems on Chapters 2-5
THE ERIE DOCTRINE
E. Federal v. State Law in Diversity Cases
 Erie R. Co. v. Tompkins
P was walking next to railroad tracks, train took off his arm, sued in federal court because state court law
would not allow him to win.
Holding: When the Rules of Decision Act says federal court must follow state law on substantive issues;
this includes both statutory law and judge-made law (common law).

Previous law, Swift, held that federal courts only had to follow the state’s written law, not
common law. This caused discrimination by noncitizens against citizens, prevented
uniformity of decisions, caused inequality before the law. This is overruled.
Rule :
Federal courts will follow federal rules of procedure, but will apply state substantive law.
 Guaranty Trust Co. v. York
P is trustee for noteholders, suit brought in federal court based on diversity, statute of limitations had run
in state court.
Holding: Since the federal court is adjudicating a state-created right solely because of diversity of
citizenship it is, in effect, only another court of the state, it cannot afford recovery if the right to
recovery is made unavailable by the state—so cannot hear this case because state court wouldn’t
be able to—narrow interpretation of the federal rule.
Rule :
Federal courts should generally use their own procedural law, but if procedure would have
substantive effect, must apply state law.

Outcome determinative test—to determine whether substantive or procedural, look to
whether it will affect the outcome of the case—requires the application of state law
whenever disregard of state law would cause a difference in outcome in a federal diversity
suit vis-à-vis the state court outcome that would have occurred absent that availability of
diversity jurisdiction.
 Cohen v. Beneficial
Federal court must apply a NJ statute requiring a p in a shareholder derivative suit to post a bond even
though FRCP did not require it.
Holding: Even though this is procedural, has a substantive effect—nominal procedural rule can have
substantive effects.
 Byrd v. Blue Ridge Electric
P suffered injuries working on power lines. State court said no right to jury trial.
Rule :
The Erie doctrine requires that federal courts in diversity cases must respect definitions of rights
and obligations created by state courts, but state laws cannot alter the essential characteristics
and functions of the federal courts, and the jury function is such an essential function.
Deference only required where the state practice is so “bound up” with the state-created
right.

If there is some practice under state law inconsistent with federal practice but not bound up,
federal court does not have to defer to state practice.
To determine whether to apply federal or state procedure, court uses a balancing test. Weighs
the following:

State substantive interests.

Strength of federal procedural policy.

Extent of outcome effect.

Rule :
 Hanna v. Plumer (this is basic structure that is used in most Erie problems)
P, of OH, filed action in federal court in MA against deceased for injuries from car accident. Didn’t serve
executor personally, which is required by state law but not federal law of procedure.
Rule :
The Erie doctrine mandates that federal courts are to apply state substantive law and federal
procedural law, but, where matters fall between the 2 and could be classified as either, apply
federal practice (supremacy).

The application of federal law can not “abridge, enlarge, or modify” any right.

Outcome determination not a talisman—must be read in light of aims of Erie.

In determining how an issue should be classified (substantive or procedural), keep in mind
Erie aims of avoiding forum shopping and avoiding inequitable administration of laws
which would result from allowing jurisdictional considerations to determine substantive
rights.
 Sibbach v. Wilson
P sued in IL for damages that occurred in IN in federal court—FR 35 required physical examination, state
rule didn’t require.
Holding: The rule does not abridge, enlarge, or modify substantive rights in the guise of regulating
procedure.
Rule :
The test is 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.

Basically, if at all procedural, use federal law. If not, use state law.
 Walker v. Armco
P, OH resident, injured in OK while pounding defective nail—brought suit in federal court, but didn’t
comply with state statute of limitations.
Rule :
Where there is no direct collision between federal and state law, first look to whether the scope
of the federal rule is broad enough to control the issue. If yes, Hanna applies. If no, state law
must be applied.

There is no reason why, in the absence of a controlling FR, an action based on state law
which would be barred in the state courts by the state statute of limitations should proceed
to judgment in federal court solely because of the fortuity that there is diversity of
citizenship.

Court also strongly implicated aims of Erie (avoiding forum shopping).
 Burlington Northern RR v. Woods
AL law that imposes automatic penalty on appeal losses—federal law is discretionary.
Holding: Because there is a federal rule that is sufficiently broad to control the issue and the state rule
conflicts with the federal rule, the court must apply the federal rule.

This is example of courts reading rule broadly so as to conform to the policies it wants.
Here, the courts don’t want to discourage people from appealing, so maybe chose an
interpretation of the rule that conflicted with the state rule.
 Stewart Organization, Inc. v. Ricoh Corp.
28 USC §1404
Suit for breach of k brought in AL, but there was forum selection clause in k that said venue would be
Manhattan. AL disfavored forum selection clauses.
Rule :
In a federal diversity suit, federal rules, not state rules, should govern questions of venue.

Forum selection clause is one factor among many in deciding. SC prefers this to one
dispositive factor.
 Gasperini v. Center for Humanities
P took bunch of pictures, let d use them, d didn’t return all of them, p wants compensation. State rule that
judge can change award if jury materially deviates; federal rule that can change if shocks the
conscience.
Rule :
A damage award in federal court cannot be significantly larger than the recovery that would be
tolerated in state court.
Holding: Therefore, if federal court were permitted to ignore the NY standard and instead apply the
federal test, substantial variations would result and this can’t happen—so must apply state
standard.

The appropriate court to apply the law is the district court, not the court of appeals, which
can only review for abuse of discretion.
F. Ascertaining State Law
 Klaxon Co. v. Stentor
Rule :
In order to promote the desired uniform application of substantive law within a state, federal
courts must apply the conflicts-of-law rule of the states in which they sit.

Discourages forum shopping between state and federal courts.
 Allstate Ins. Co. v. Hague
Holding: State could apply its substantive law in a case, so long as the state had significant contacts or
significant aggregation of contacts with the parties and transaction.
 Van Dusen v. Barrack
Rule :
28 USC §1404
The “critical identity” us between the federal court that decides the case and the courts of the
state in which the action was filed. “A change of venue under §1404 generally should be, with
respect to state law, but a change of courtrooms.”

Consensus against this because it encourages forum shopping.
 Mason v. American Emery Wheel Works
P sued for injuries caused by defective product, but p hadn’t gotten product directly from d. There was a
state supreme court ruling that privity of contract was necessary to sue a product manufacturer
for injuries.
Rule :
A state supreme court ruling on an issue need not be followed by a federal court sitting in
diversity if that ruling has lost its vitality.

Generally a state supreme court ruling will be final on a given issue. But here, it is unlikely
that the state supreme court would follow its own ruling if the issue were before it. So the
federal court must approximate as near as it can what the state supreme court would do if
the question were before it.

Certification—many states allow referrals from federal courts to decide what state law is to
resolve ambiguities like this.

Decisions of lower state courts, although they deserve some weight, do not control a federal
court’s reading of state law.
 Ferens v. John Deere Co.
P, of PA, injured by product of d, DE company. D didn’t file within PA’s statute of limitations, so filed
in MS—then transferred suit back to PA.
Rule :
In a diversity suit, the transferee forum is required to apply the law of the transferor court,
regardless of who initiates the transfer.

This may encourage forum shopping on the part of the plaintiff.
PLEADING
G. The Complaint (and the Motion to Dismiss)

FRCP 8 requires only short and plain statement of the claims showing that the p is entitled to
relief.
 Dioguardi v. Durning
FRCP 8
P did not have an attorney and filed basically incoherent complaint that was difficult to understand.
Rule :
Under the FRCP the complaint is only required to put the other party on notice of the complaint
against him. The complaint does not have to contain facts sufficient to state a cause of action.

Here, although the facts were not well presented, the complaint did put d on notice.

Since the challenge to the complaint went only to its face and not evidence, court shouldn’t
deny him a day in court.
Rule :
FRCP 8(e) requires that all pleadings should be construed to do substantial justice.

Note: if use one of the forms, FRCP 84 provides that this is sufficient.

Note: complex litigation claims sometimes have more rigorous requirements—SC said no
heightened pleading requirements, but Congress passed law for heightened requirements in
securities litigation.
 American Nurses’ Association v. Illinois
FRCP 12(b)(6)
P contended that its class action complaint presented a cause of action for discrimination rather than
comparable worth and thus should have been upheld.
Holding: A federal complaint should not be dismissed for failure to state a claim unless it appears that the
p can prove no set of facts in support of his claim which would entitled him to relief.
Rule :
The Rules advise brevity in charging allegations while allowing a claim to proceed unless it
appears beyond doubt that the p can prove no set of facts upon which relief is available.

Note: if 12(b)(6) matters outside the pleading are introduced, will be disposed of as motion
for summary judgment would be.
H. The Answer

FRCP 8 requires d to admit, deny, or plead insufficient information in response to each
allegation.

FRCP 8(d) states that all averments to which d does not respond are deemed admitted.

FR discourage the use of the general denial—use only when everything can be denied.
 Zielinski v. Philadelphia Piers
P filed complaint that d owned and operated fork lift that caused injuries—d gave general denial. Later
found that fork lift was owned by someone else, but d was estopped from denying ownership
and agency of the operator.
Rule :
A d who knowingly makes inaccurate statements may be estopped from denying those
inaccurate statements at trial.
Holding: D should have made specific denial of parts they believed and knew to be false and admitted the
parts which were true. Then p could have sued the right d before the statute of limitations ran.

Rules require that the pleadings be made in good faith—not good faith here.
I. Amendments—FRCP 15
 Moore v. Moore
FRCP 15(b)
When husband initiated custody proceedings, the court wound up allowing wife to amend her pleadings
post-trial to allow her to ask for the relief it had granted her.
Holding: If issues not raised in the pleadings are tried by express or implied consent of the parties, the
court has the discretion to permit post-trial amendments to pleadings to reflect the actual
litigation that transpired.

Trying to promote resolution of cases on their merits.

In this case, where the party does not object and introduces evidence against the new issue
raised, there was adequate notice and implied consent.
 Beeck v. Aquaslide
FRCP 15(a) and (b)
P injured on waterslide d allegedly manufactured. Later, d discovered it didn’t manufacture that slide,
was given leave to amend answer to deny manufacture of the slide. The case was then
dismissed, statute of limitations had run.
Rule :
A motion to amend an answer should be granted unless the opposing party can show prejudice,
bad faith, or undue delay.
Rule :
Delay, standing alone, is an insufficient basis for denying leave to amend and this is true no
matter how long the delay.
Rule :
FRCP 15(a) requires that leave be freely given when justice so requires.
 Worthington v. Wilson
FRCP 15(c)
P named unknown police officers in complaint on last day of statute of limitations. Filed amended
complaint which named the police officers.
Holding: An amended complaint naming certain persons listed as “unknown” in the original complaint
does not relate back to the time of the original complaint’s filing.
Rule :
Relation-back applies where a would-be d had actual notice that he was mistakenly omitted
from a complaint. Specifically identifying a d as “unknown” does not constitute a mistake, such
as misidentification would.

In this case, the d’s would have had to have been aware of the suit at the time of filing of
the original complaint and that they were the officers referred to as unknown.

Classic 15(c) situation would be Zielinski where d knew it should have been against him.
 Ingraham v. United States
Affirmative Defenses FRCP 8(c)
P sued the government for medical malpractice, won huge award. On appeal, government tried to raise
affirmative defense of state cap on general damages in malpractice actions.
Rule :
A statutory cap on damages is an affirmative defense that is waived if not raised in the
pleadings.

To decide whether it’s an affirmative defense, consider whether it will likely take opposite
party by surprise, logical relationship between defense and cause of action (whether it
constitutes necessary element of p’s cause of action, which party has better access to
evidence, policy considerations)

In this case, court thinks it would be taking p by surprise. If it were timely filed, this would
have applied.

There are 19 enumerated affirmative defenses that must be raised in pleadings and a
residuary clause mandating pleading of “any other matter constituting an affirmative
defense.” That last part is left to discretion of the courts.
 Taylor v. United States
Much of the same situation as Ingraham. U.S. appealed from decision awarding p $500,000—after
award, U.S. moved for reduction of damages under CA Code.
Holding: This court held that the cap was a limitation of liability, not an affirmative defense.
Rule :
If FR do not require p’s to plead extent of damages sought, d;s should not be required to plead
the limitation of damages.
Rule :
Rule 8(d) specifies that averments as to the amount of damages which d does not deny in his
answer are not deemed admitted.
Rule :
Court can raise affirmative defense sua sponte only when the defense implicates values beyond
the interests of the party.

Reconciling Ingraham and Taylor—in Ingraham, the government reopened the case. In Taylor,
government raised the issue during the actual trial.
J. Sanctions—FRCP 11
 Hadges v. Yonkers Racing Corp.
After p and his attorney made incorrect statement in 60(b) motion (relief from judgment or order), they
received sanctions with little notice and scant time to respond. They had signed affidavits
containing false information and failed to inform the court of state action.
Rule :
Pursuant to Rule 11, those facing sanctions must receive adequate notice and the opportunity to
respond.
Holding: In this case, neither p nor his attorney were given time to retract misstatements and thereby
avoid sanctions. Rule 11(c)(1)(A) provides for 21-day safe harbor period.

Note Scalia’s dissent to the amendment establishing the safe harbor period—violators now
will always be able to escape sanctions.

There is also possibility of court imposing sanctions sua sponte.
JOINDER
K. Joinder of Claims by Plaintiff

The joining of claims in a single suit by a party; the party seeking relief may join as many claims
as he has against the opposing party.
 Harris v. Avery
Avery alleged that Harris called him a thief, said he had stolen a horse, took horse from him and kept it
for a few days, and had him arrested. Avery brought action with 2 claims—false imprisonment
and slander—joined them because arose out of the same transaction.
Rule :
A p may unite causes of action where they have arisen from the same transaction or transactions
connected with the same subject matter.
Rule :
Now FRCP 18 removes all obstacles to joinder of claims and permits the joinder of both legal
and equitable actions. The only restriction on the claims that may be joined is imposed by
subject-matter jurisdiction requirements. Courts want parties to settle all of their controversies
in one suit. If confusing, court can separate the claims (FRCP 42).

There is a link between joinder and preclusion rules—p must assert all claims because
won’t get another opportunity. If tries, will be barred by res judicata.
Rule :
FRCP 20 allows for permissive joinder of parties. All persons may join in one action as p’s if
they assert any right to relief jointly, severally, or in the alternative in respect of or arising out of
the same transaction, occurrence, or series of transactions and if any question of law or fact
common to all these persons will arise in the action. All persons may be joined as d’s if there is
asserted against them jointly, severally or in the alternative, any right to relief arising out of the
same transaction and if any question of law or fact common to all d’s will arise in the action.
Judgment may be given as to respective rights or liabilities and court can order separate trials.
 Rush v. City of Maple Heights
Claim Preclusion
P injured in motorcycle accident. Won in an action for damage to her personal property against d and
then commenced a second action against d for personal injuries claiming that the first action
was res judicata on the issue of negligence.
Rule :
Whether or not injuries to both person and property resulting from the same wrongful act are to
be treated as injuries to separate rights or as separate items of damage, p may maintain only one
lawsuit to enforce his rights existing at the time the action is commenced.

Court is trying to avoid multiplicity of suits—where claims arise out of the same
transaction, p must join.

If insurer were involved, then there would be two actions.
Rule :
A party gets only one suit per cause of action. The task is to discern the scope of the cause of
action.
L. Counterclaims—FRCP 13

An independent cause of action brought by a d to a lawsuit in order to oppose or deduct from
p’s claim.
 Mitchell v. Federal Intermediate Credit Bank
Defense Preclusion
Potato proceeds. P pleaded the same facts, now the basis of an affirmative claim, in an earlier action
where he appeared as a d although, at the time, he did not counterclaim or ask for relief.
Rule :
A d may not split his cause of action against a p using part of it as a defense to the first action
and saving the remainder for a separate affirmative suit.
Holding: In this case, p’s action against d is barred because he had the opportunity to counterclaim or ask
for relief while defending the first suit, when both the defense and p’s action arose out of the
same transaction. Can’t use the defense first as a shield, then as a sword (O’Connor).

Kirven says if never used as a shield, can use as sword later. But under FR, no, because of
compulsory counterclaims. Not all jurisdictions have these rules, though, so could end up
the same as Kirven.
Rule :
FRCP 13(a) requires that a d assert his counterclaim when it arises out of the same transaction
involved in the p’s case.
Rule :
FRCP 13(b) provides for permissive counterclaims and allows the d to choose whether or not
to assert it.
 Linderman Machine Co. v. Hillenbrand
Much the same situation as Mitchell. L sold H machine, sued to recover purchase price—H said
fraudulent misrepresentations, judgment against L. Later H sued to recover damages for fraud.
Holding: Judgment was conclusive as to defenses but not conclusive as to affirmative right or cause of
action which he may have against p and of which he could have taken advantage by way of
cross-complaint.

So court here treats them as separate events.
 Great Lakes Rubber Corp. v. Herbert Cooper Co.
P sued d for unfair competition, d’s counterclaim alleged that p violated antitrust act and that suit was to
harass—p’s suit dismissed. P counterclaimed repeating allegations in its complaint.
Rule :
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.
Rule :
A compulsory counterclaim must arise out of the same transaction. To determine whether
counterclaim is compulsory, consider the following:

Are the issues of fact and law raised by the claim and counterclaim largely the same?

Would res judicata car a subsequent suit on d’s claim absent the compulsory counterclaim
rule?

Will substantially the same evidence support or refute p’s claim as well as d’s
counterclaim?

Is there any logical relation between the claim and counterclaim? (This is the most
important question.)
Rule :
If counterclaim is compulsory, it is deemed ancillary to p’s claims, and so it requires no
independent jurisdictional grounds to support it—if satisfies 13(a), satisfies §1367. If merely a
permissive counterclaim, must be based on some independent ground of federal jurisdiction.

Note: supplemental jurisdiction is discretionary.

Note: issue preclusion with compulsory counterclaim, but not permissive counterclaim.
 Zeltzer v. Carte Blanche Corp.
In this case, p brings action against credit card company, which counterclaims to collect on debt.
Holding: Credit card company would normally not bring suit to collect on debt, facts don’t overlap, so
not compulsory counterclaim.

Court is influenced by policy considerations—doesn’t want to discourage people from
bringing claims against credit card companies—would be against purpose of Truth in
Lending Act.
M. Cross-Claims

A claim asserted by a p or d to an action against a co-p or co-d, and not against an opposing
party, arising out of the same transaction or occurrence as the subject matter of the action.
 LASA
FRCP 13(h) and (g), and 14
P filed suit against Alexander alleging that it was owed a balance on its contract to supply marble to A,
and after LASA filed suit, A filed cross-claim and 3rd party complaint, both of which were
dismissed by the trial court as not arising from the same transaction or occurrence because
involved different subcontracts.
Rule :
Cross-claims, counterclaims, and 3rd party complaints arising from the same transaction or
occurrence as the subject matter of the original complaint may be joined with the original
complaint.
Rule :
The words transaction or occurrence should be given a broad and liberal interpretation in order
to avoid a multiplicity of suits. Here, although involved difference subcontracts, involved the
same project and some of the same evidence would be introduced; there are related factual and
legal issues.
Rule :
Rules 13 and 14 are intended to avoid circuity of action and to dispose of the entire subject
matter arising from one set of facts in one action—even if complex. Court always has the
option of separating the trials pursuant to FRCP 42(b).
Rule :
Under FRCP 13(h) persons other than those made parties to the original action may be made
parties to a counterclaim or cross-claim. Seems like Rule 14 can be transformed into this.
FRCP 14 provides that d can bring in 3rd party.
Rule :
A p cannot cross-claim against a co-p.
N. Impleader—FRCP 14

Procedure by which a third party, who may be liable for all or part of liability, is joined to an
action so that all issues may be resolved in a single suit.
 Jeub v. B/G Foods, Inc.
P brought action against d because ate spoiled ham at its restaurant. D impleaded Swift, seller of ham for
indemnification.
Rule :
In a federal action, impleader is permitted of a party who is or may be liable for indemnification
to a party-d as long as the applicable state substantive law regarding indemnification is satisfied.

If state did not recognize a right of indemnification, then Rule 14 couldn’t create such a
right.
Rule :
Court has supplemental jurisdiction over third party claims when brought by d.
Rule :
P can bring in third party if counterclaim against him, but there must be independent basis for
jurisdiction if a diversity suit—same as Kroger.
Rule :
100 mile bulge rule—Service of the third-party complaint may be made anywhere within the
100-mile bulge surrounding the courthouse, even if the place of service is outside the state and
is beyond the scope of the local long-arm. FRCP 4(k)(1)(B).
 Goodhart v. US Lines
P sued for personal injuries caused by d’s employee. D wanted to implead employee.
Holding: Court will not allow d to implead 3rd party who cannot indemnify or who would influence the
jury to award less damages. D can bring separate suit.
 Revere Copper & Brass v. Aetna
P sued d alleging that builder, F, had breached contract. D impleaded F, F asserted counterclaim against
R. R moved to dismiss F’s counterclaim on the ground that there was no diversity.
Holding: Because the claim fell within the core of aggregate facts upon which the original claim rested, it
was within the court’s ancillary jurisdiction.
Rule :
P has to show independent grounds of jurisdiction because p has the option of selecting the
forum, not been involuntarily brought to a forum—can’t suddenly bring claim against nondiverse party because of possibility of collusion between p and d.
Rule :
Rule :
Rule :
§1367(b) takes away from what §1367(a) gives—claims by plaintiffs under Rule 14 not in
court’s supplemental jurisdiction.
Statutory venue limitations have no application to Rule 14 claims.
MUST HAVE JURISDICTION AND JOINDER.

Noland and Schwab say that can also sue for lost profits, but must be suing for indemnity
also. Schwab says this is allowed by Rule 18.
 Guaranteed Systems Inc. v. American National Can Company
G filed action in state court against A for failing to pay G for construction work. A removed to federal
court on basis of diversity, answered and filed counterclaim alleging negligence. G filed 3rd
party action against H for indemnity.
Rule :
P cannot implead 3rd party d when the original action is based solely on diversity unless shows
that the 3rd party d is diverse.

But court didn’t seem to want to do this. It saw the p as more of a d at this point—didn’t
choose the forum because of removal and has counterclaim against it. But Congress didn’t
take this situation into account, so must follow the statute and prohibit p from impleading
nondiverse 3rd party d.
O. Interpleader
28 U.S.C. §1335—Interpleader





Definition—suit to determine a matter of claim or right to property held by a usually
disinterested 3rd party who is in doubt about which claimant should have to property and
who therefore deposits the property with the court over ownership; typically initiates
interpleader both to determine which claimant should receive delivery or payment and to
avoid multiple liability.
(a) DC shall have original jurisdiction of any civil action of interpleader filed when worth
$500 or more if:
(1) 2 or more adverse claimants of diverse citizenship are claiming or may claim to be
entitled to such money or property; and
(2) p has deposited such money or property into registry of the court.
(b) Such an action may be entertained although the titles or claims of the conflicting
claimants don’t have a common origin, or are not identical, but are adverse to and
independent of one another.
28 U.S.C. §1397—Interpleader

Any civil action of interpleader under §1335 may be brought in the judicial district in which
one or more of the claimants reside.
28 U.S.C. §2361—Process and Procedure

DC may issue its process for all claimants and enter its order restraining them from
instituting or prosecuting any proceeding in any state or US court affecting the property,
instrument, or obligation involved in the interpleader action until further action of the court.
Such dc shall hear and determine the case, and may discharge the p from further liability,
make the injunction permanent, and make all appropriate orders to enforce its judgment.
FRCP Rule 4(k)(1)(c)—Territorial Limits of Effective Service

Service of summons or filing a waiver of service is effective to establish jurisdiction over to
person of a d who is subject to the federal interpleader jurisdiction under §1335.
FRCP Rule 22—Interpleader

Persons having claims against the p may be joined as d and required to interplead when
their claims are such that the p is or may be exposed to double or multiple liability—not
ground for objection to the joinder that claims do not have a common origin or are not
identical but are adverse to and independent of one another, or that the p avers that the p is
not liable in whole or in part to any or all of the claimants—d exposed to similar liability
may obtain such interpleader by way of cross-claim or counterclaim. Doesn’t limit the
joinder of parties permitted in Rule 20.


This doesn’t supercede or limit §1335.
Statutory interpleader—provides for federal subject matter jurisdiction where there is minimal
diversity between any two rival claimants (§1335). Can be brought in any district in which any
claimant resides (§1397). Provides for nationwide service of process (§2361).
P. Necessary and Indispensable Parties
 Bank of California v. Superior Court
FRCP 19(a)
S brought action to enforce a k in which decedent promised to leave her entire estate to S. Brought action
against bank, the executor of the will, and hospital, the residuary legatee who was to recover the
bulk of the estate. The will named many additional legates, who S didn’t name as d.
Rule :
Necessary parties are those who are so interested in the controversy that they should normally
be joined in order to enable the court to do complete justice, but whose interests are separable so
they are not indispensable parties, that is, parties without whom the court cannot proceed.

Although necessary parties may be affected by the decision, they are not indispensable to
any valid judgment. Considerations of fairness, convenience and practicability are relevant.
Rule :
A party is deemed indispensable only if complete relief cannot be rendered unless he is joined
or he claims an interest in the subject of the action such that to proceed without him would
impair his ability to protect his interest or expose the existing parties to the risk of double
liability or inconsistent obligations.
Holding: In this case, the other legatees are necessary but not indispensable because the court can enter a
judgment that is binding only to those in the action and not on the other legatees so their rights
won’t be impaired.
 Warner v. Pacific Telephone
2 Mrs. Caryl Warners in phonebook. 2nd wife brought action to have the 1st wife removed. Phone
company demurred to complaint on the grounds that the p had failed to join an indispensable
party.
Holding: This is like a property rights case—if decided for 2nd wife, 1st wife could bring suit—phone
company is trying to avoid multiple suits.
 Haas v. Jefferson National Bank
P, of OH, brings diversity action against bank, in FL, for shares of stock that were supposed to be reissued
to him by G, also of OH. Stocks not reissued because G was indebted. Court ordered p to join
G as party, then denied his motion to dismiss G as a party, and dismissed because of incomplete
diversity.
Holding: It doesn’t matter that the party joined was indispensable, there still must be diversity.
Rule :
Under FRCP 19(b), when party cannot be joined, court can decide whether or not to proceed or
be dismissed because the person is indispensable. Must consider: (1) to what extent a judgment
rendered in the person’s absence might be prejudicial to the person or those already parties; (2)
extent to which, by protective provisions in the judgment, by the shaping of relief, or other
measures, the prejudice would be lessened or avoided; (3) whether judgment in their absence
would be adequate; (4) whether p will have adequate remedy if dismissed for nonjoinder.

Here G indispensable because not joining could result in multiplicity of suits, inconsistent
judgment. If dismissed, H can bring suit against G and then proceed against the bank.
Q. Intervention
 FRCP 24


(a) Intervention of Right—permitted to intervene: (1) when statute of US confers
unconditional right; or (2) when applicant claims an interest to property or transaction
which is the subject of the action and applicant is so situated that disposition of the action
may as a practical matter impair or impede the applicant’s ability to protect that interest
unless applicant’s interest is adequately represented by existing parties.
(b) Permissive Intervention—permitted when: (1) statute confers unconditional right; or
(2) when an applicant’s claim or defense and the main action have a question of law or fact


in common. Court will exercise its discretion—considers whether the intervention will
unduly delay or prejudice the adjudication of the rights of the original parties.
Intervention must be timely.
When subject-matter jurisdiction is based upon diversity, §1367(b) bars nondiverse
plaintiffs seeking to intervene under 24(a).
 Smuck v. Hobson
Original action was class action against DC schools for racial discrimination. Found for school children,
School Board decides not to appeal. Former superintendent, dissenting board member, and
some parents attempt to intervene.
Rule :
The federal courts allow intervention when the party has an interest to be protected, denial of
intervention would impair the party’s ability to protect the interest, and the party is not
adequately represented by others.
Holding: In this case, only allowed intervention of the parents—their rights would be impaired and
inadequate representation. H no longer superintendent—he lost any standing to intervene when
resigned. S was individual member of the board, but the principal party was the board as an
entity—he has no interest as an individual.

Because motion to intervene was made after judgment, strong showing is required to justify
intervention. Must have an appealable interest plus inadequate representation and impaired
rights.
 National Resources Defense Council v. NY Dept. of Conservation
API wants to intervene in a lawsuit brought by NRDC about air pollution. Has an economic argument.
NRDC has different motive.
Rule :
A different motive for litigating does not make the interest inadequately represented.
 Atlantis Development Corp. v. United States
P attempted to intervene in order to prove ownership and the right to several reefs.
Rule :
Intervention should be permitted even though the original action would not be binding on the
intervenor if the practical effect of judgment in the original action would be to establish
precedent that would be controlling in an action instituted later by the intervenor.
Rule :
Question of whether intervention as a matter of right exists often turns on the unstated question
of whether joinder of the intervenor of the party was required under Rule 19. Look to whether
interest, whether will be impaired if absent, whether adequate representation.
Holding: This suit will make final determination of who owns the land—if A not allowed in, then interest
will be impaired. Neither party would adequately represent because both want ownership.
Stare decisis in this case would pretty much bar A from bringing suit—court says this can be the
disadvantage which warrants intervention of right.
CLASS ACTIONS—FRCP 23
 4 general prerequisites for class certification—has to meet these and one of certifications.




Numerosity.
Commonality.
Typicality.
Representativeness.
R. Class Certification
 Holland v. Steele
FRCP 23 (a) and (b)(2)
Civil rights action—p seeks order prohibiting d from restricting p’s access to counsel and to the courts in
civil matters. Seeks to have certified as a class all persons who are or will be detained in the jail
(pursuant to 23(b)(2)).
Holding: Meets requirements of 23(a):

Rule :
Numerosity—must be so numerous or there must be unknowns so that joinder would be
impossible. Here, 40 and unknowns sufficient.

Commonality—common questions of law or fact. Here, common questions of fact as to
acts, omissions, and policies of d in denying access to counsel to the inmates and common
question of law as to whether the practices of d constitute violations of constitutional rights.
Some divergence is tolerable but there has to be some nucleus that the court can get its
hands on.

Typicality—focus is on the claim of the representative party not the class as a whole. Here
the representative party is a detainee who was denied access to counsel and thus is member
of the class that he seeks to represent—typicality doesn’t mean that all claims must be
identical.

Adequate representation—representative must have common interests with the unnamed
members of the class and it must appear that the representative will vigorously prosecute
the interests of the class through qualified counsel.
Meets requirements of 23(b)(2)—opposing party acted or refused to act on grounds generally
applicable to the class making final injunctive or declaratory judgment appropriate to the whole
class.

Difference between this and commonality is that this focuses on the relief.
No magic number to satisfy numerosity--courts look to such factors as the relative difficulties of
joinder versus class treatment, whether individual joinder might still be accompanied by
representation by a single attorney and identical pleadings, and the geographical location of the
potential p.
 Causey v. Pan Am
FRCP 23(b)(3)
P brings action as representative of parents’ estate—parents died in plane crash in Indonesia, most of the
passengers were not Americans, investigation in Indonesia.
Holding: Class action certification is not proper because of conflict of law, strong interest of class
members to individually control the prosecution of their separate actions, high financial value
placed on wrongful death actions, and wrong forum.

Paradigm for where class action in mass litigation is proper: (1) class action limited to
liability; (2) class members support the action (wouldn’t want to opt out); and (3) the choice
of law problems are minimized by the accident occurring and/or substantially all p’s living
within same jurisdiction. But still must meet 23(b)(3) requirement that class action is the
best method for resolving dispute.

Not (b)(1) because no incompatible standards, d just will have to compensate some and not
others. Also, mass accident p not bound by judgment in another’s separate suit against
common d.

Not (b)(2) because doesn’t apply to cases where damages are exclusively or predominantly
money damages.
S. Due Process
 Hansberry v. Lee
Lee sought to enjoin a sale of land to Hansberry on the grounds that the sale violated a racially restricted
covenant. There was a class action that held that the covenant was in effect. In this suit,
Hansberry said he shouldn’t be bound by that decision.
Rule :
There must be adequate representation of the members of a class action or the judgment is not
binding on the parties not adequately represented.
Holding: The interests of the landowners in the first action were not similar enough to even be considered
members of the same class. They were trying to restrict blacks from moving in, Hansberry was
black.
 Gonzalez v. Cassidy
Rule :
If parties are not adequately represented in class action, not bound. There is a 2-part test to
determine if the parties were not adequately represented:

Did trial court in the first suit correctly determine, initially, that the representative would
adequately represent the class?

Does it appear, after the termination of the suit, that the class representative adequately
protected the interest of the class?
Holding: In this case, the decision was applied prospectively and this was fine for the representative so he
didn’t appeal. But for those who wanted it applied retrospectively, there was not adequate
representation.
 Martin v. Wilks
In a reverse discrimination action, it was contended that an earlier consent decree mandating certain
affirmative action procedures barred a subsequent reverse discrimination action by parties not
involved in the prior action but who knew about the action and didn’t intervene.
Rule :
A consent decree mandating affirmative action does not have preclusive effect upon a
subsequent challenge to those programs brought by persons not parties to the prior action.
Rule :
People don’t HAVE to intervene even if they know about it—can’t place burden on potential
parties a duty to intervene. This case is exception because Civil Rights Act of 1991 said parties
who can intervene must, otherwise they will be bound by the judgment.
T. Class Action Practice
 Eisen v. Carlisle & Jquelin
FRCP 23(b)(3), (c)(2)
P brings (b)(3) action on behalf of people who traded odd lots shares on NYSE—said d fixed
commissions—there would be 6 million potential members, only 2,250,000 identified. Cost to
send notice would be great, court authorized scheme to send notice to random 5,000 and
publication for notice to the rest—and d was to pay.
Rule :
In any class action maintained under (b)(3), (c)(2) provides that each class member shall be
advised that he has the right to exclude himself from the action on request or to enter an
appearance and that judgment will be binding on any member not requesting exclusion.
Rule :
Court is required to direct to class members the best notice practicable under the circumstances
including individual notice to all members who can be identified through reasonable efforts—
this is NOT discretionary.
Rule :
Mullane directs that the means employed must be such as one desirous of actually informing the
absentee might reasonably adopt to accomplish it and that publication notice could not satisfy
due process where names and addresses were known.

Here, would have had to send to all whose names and addresses were known.
Rule :
Normal rule is that each side pays for his own costs. Here, p should have paid for notice to be
sent.
 Oppenheimer Fund v. Sanders
FRCP 23(d)
Holding: Court found authority under 23(d) to order d to pay to prepare list of class members if the
burden of doing so would be substantially less than the burden of p to compile it on their own—
d would be entitled to reimbursement for the cost unless the expense was so insubstantial.
 Wetzel v. Liberty Mutual Insurance Co.
2 claims adjusters bring sexual discrimination (b)(2) class action for injunctive relief—class was former,
present and future female employees in claim department. After charges were filed, d changed
practices so injunctive relief was no longer necessary.
Rule :
In a class action discrimination suit brought for injunctive relief under FRCP (b)(2), the notice
requirements of 23(b)(3) need not be met if events subsequent to filing make injunctive relief
unnecessary.

Reason for notice under (b)(3) is due to res judicata effect of class action. Here, each p has
common problem, same claim, same interests, so (b)(2) is fine.
Rule :
When it could be either (b)(2) or (b)(3), court says (b)(2) to enjoy its superior res judicata effect
and to eliminate the procedural complications of (b)(3)—don’t want to make it hard for people
to bring these suits.
Rule :
Under (d)(2) can require discretionary notice—but probably wouldn’t be as much as Eisen
requires.
 General Telephone Co. v. Falcon
Mexican American not promoted, but less qualified whites were. He claimed discrimination based on
national origin and sought to join as a class all former, present, and future Mexican American
employees. But there were no factual allegations concerning the hiring practices in the
complaint.
Rule :
Although most racial discrimination cases are by their nature class actions, the mere fact that a
complaint alleges this discrimination does not in itself ensure that the party who has brought the
lawsuit will be an adequate representative of those who may have been the real victims of
discrimination.
Holding: F was discriminated against, but he didn’t present any facts that showed this was a typical
promotion practice. No basis for concluding that the adjudication of his claim of discrimination
in promotion would require the decision of any common question concerning the failure of d to
hire more Mexican Americans.

In this case, it is a management question—very discretionary and doesn’t provide precedent
on how to decide the issue.
U. Mass Tort Class Actions
 Amchem Products Inc. v. Windsor
FRCP 23(b)(3)
Many people filing claims against asbestos producers—attempt to certify class action to settle—would
preclude nearly all class members from litigating against d if filed claims after certain date.
Class members included people who were suffering from asbestos-related injuries and those
who had been exposed but who had no apparent injuries.
Rule :
Even where there is a settlement, the Rule 23(b)(3) requirements of predominance and
superiority must be applied to promote fairness and efficiency.
Holding: In this case, no predominance—only common question is health effect of exposure. Also
inadequate representation because those who already have injuries have different interests than
exposure-only plaintiffs. Also, don’t really have opt-out because some don’t know if they’ll
have the disease in the future or not.
 Ortiz v. Fibreboard Corp.
FRCP 23(b)(1)(B), 23(e)
F and insurance carriers agreed to establish a trust to process and pay future claims. The firm handing the
global settlement also settled most of the pending claims—1/2 now and the rest upon global
settlement or F winning. Certified (b)(1)(B) limited fund class. DC found settlement to be fair
pursuant to 23(e).
Rule :
Limited find class action elements:

Totals of the aggregated liquidated claims and the fund available for satisfying them, set
definitely at their maximums, demonstrate the inadequacy of the fund to pay all the claims.

Whole of the inadequate fund was to be devoted to the overwhelming claims—class as the
whole was given the best deal—didn’t give the  a better deal than seriatim litigation would
have produced.

Claimants treated equitably among themselves—once represented classes were identified,
there was no question of omitting anyone whose claim shared the common theory of
liability and would contribute to the calculated shortfall of recovery.
Rule :
Mandatory class treatment through representative actions on a limited fund theory was justified
with reference to a fund with a definitely ascertained limit, all of which would be distributed to
satisfy all those with liquidated claims based on a common theory of liability, by an equitable,
pro rata distribution.
Rule :
In this case, the fund was not limited, class counsel had incentive to reach any agreement, and
inequitable treatment.
V. Jurisdictional Complications
Subject-Matter Jurisdiction
 Supreme Tribe of Ben-Hur
Rule :
Determinations of diversity of citizenship in class actions should be based on the citizenship of
the named parties only.
 Snyder v. Harris
P brought action against board members for allegedly selling stocks in excess of market value. Her claim
was worth about $8000, amount-in-controversy requirement was $10,000. P said claims of
class members should be aggregated.
Rule :
Separate and distinct claims cannot be aggregated.
 Zahn v. International Paper
Property owners brought class action on behalf of other owners on Lake Champlain. Claims of each were
found to satisfy jurisdictional requirement, but court was convinced that not every individual
suffered damages in excess of the requirement.
Rule :
Each p in Rule 23(b)(3) class action must satisfy the jurisdictional-amount requirement.

See below for how this applies as to supplemental jurisdiction under §1367.
 Leonhardt v. Western Sugar
28 USC §1332, §1367
Beet case where federal claims were dropped because p’s didn’t meet jurisdictional requirement. Later,
amended complaint to add request for punitive damages  one p’s claim met requirement.
Rule :
Zahn is the rule—each p must satisfy the jurisdictional amount. Just because one p meets
jurisdictional requirement does not mean the court has supplemental jurisdiction.

Some courts say Zahn is no longer the law, majority say it is.
Personal Jurisdiction
 Philips Petroleum c. Shutts
State class action lawsuit involved a plaintiff class which 97% had no contacts with the forum state. State
court applied state law.
Rule :
A forum state may exercise jurisdiction over the claim of an absent class action p even though
that p may not possess the minimum contacts with the forum which would support personal
jurisdiction over a d as long as given notice, opportunity to be heard and participate, opportunity
to opt out, and adequate representation.

Class consisted of only those who received the letter.

The loss of a cause of action is a loss of property.

This is for suits predominantly for money damages and applies to (b)(3) cases.
DISCOVERY—FRCP 26-37
W. General Scope of Discovery
 Introduction
 Major purposes of discovery



Preservation of relevant information that might not be available at trial.
To ascertain and isolate those issues that actually are in controversy.
To find out what testimony and other evidence is available on each of the dispute factual
issues.
 Blank v. Sullivan
FRCP 26(b)(2)
P wants d to answer interrogatories about partners and employees who became partners. Suit was about
sexual discrimination in hiring practices.
Rule :
FRCP 26(b)(1) provides that a party is entitled to discovery, not only of material which is
relevant and admissible at trial, but also of information which appears reasonably calculated to
lead to the discovery of admissible evidence.
Court has some discretion under 26 (b)(2)—court can issue protective orders to protect party or
person from annoyance, embarrassment, oppression, or undue burden. Parties can request this
or court can do it on its own.

Won’t allow if unreasonably duplicative, party had ample opportunity to get the
information—also must balance the burdens.
Holding: In this case, the information could be relevant to illustrating that the firm’s culture was sexually
discriminatory.
Rule :
 Marrese v. American Academy of Orthopedic Surgeons
FRCP 26(c)
Surgeons who weren’t admitted to the academy wanted correspondence and other documents relating to
denials of membership.
Rule :
A motion under 26(c) (protective orders) to limit discovery requires district judge to compare
the hardships of the parties.
Holding: In this case, court found that interest of voluntary associations in avoiding involuntary
disclosures was great hardship. But barring p from looking at these records would probably
ruin its suit. Therefore, a better protective order should have been issued—could have had
sensitive discovery last or had the judge look at it and determine what the p could have. There
was abuse of discretion.

Sometimes discovery of sensitive documents is not used to gather evidence but to coerce
other party to settle—court sees a hint of that here.

Can only get unprivileged information.
X. Specific Discovery Devices
DEPOSITIONS—FRCP 30
 Haviland v. Montgomery Ward
2 years ago d served notice to take d’s deposition. No action until d again pressed for this, then motion to
vacate because officer too old and sick.
Holding: H can be deposed in France where he his for limited periods each day and p will pay the costs.

H has personal knowledge of issues that other officers don’t have, so information couldn’t
have been obtained any other way.

With depositions, get more candid answers than with interrogatories because it’s not the
lawyer who’s answering the questions. Also could do written deposition, but then wouldn’t
have opportunity for follow-up.
Rule :
With corporations and associations, notice will require it to produce the person or persons
with the knowledge on the subject matter.

Usual expectation that deposition will proceed without court involvement.
INTERROGATORIES—FRCP 33
 Leumi Financial v. Hartford Accident
P suffered losses caused by conduct of vp. D contends p failed to give prompt notice of loss and proof of
claim required by the bond. Objections to interrogatories that legal opinions were sought.
Rule :
Where interrogatories requiring legal opinions as answers will lead to relevant evidence, will
narrow issue, or will prevent wasteful or unnecessary testimony and outweighs possibility that
interrogated party will be prejudiced, these interrogatories are allowed.
Rule :
In order to calculate the possibility of prejudice, the court should weigh the nature of the case,
the knowledge of the answering party, the amount of discovery to be completed, and the
proximity of the issue to be narrowed to the central issues in the case.
Holding: This is not a complex case—requiring d to define critical language would eliminate need for
some discovery, but would prejudice the party because answers could resolve central issues for
the p.

May be prejudicial for d to disclose something true because they need time to formulate
strategy.

Wouldn’t use deposition because need researched answers.
PRODUCTION OF THINGS—FRCP 34
 Hart v. Wolff
D requested production of certain corporate records. P was employed by the corporation and the
controlling shareholder in the corporation to handles its business affairs in the area. P argued
that the order could not be justified because the records were not in his control, custody, or
possession.
Rule :
A prima facie case of control is all that is needed to justify the issuance of an order to produce
records and documents.
Holding: The critical language here is “in control, custody, or possession”—court says should construe
control in a way that will promote policy behind discovery. The court believes that, although he
was not an officer, his relationships with his employer and the shareholder were such that the
court could infer that p had some influence and could have used it to produce the records.
Rule :
The rule requires that the request must set forth the items to be inspected either by individual
item or category and describe each item with reasonable particularity.

Societe Internationale supports this. In that case, records were in Switzerland, p said it did
not have control over them because not physically in control—court rejected the argument.
PHYSICAL AND MENTAL EXAMINATIONS—FRCP 35

Rule requires that person’s physical or mental condition is in controversy and the movant
must show good cause to compel the examination—determination of good cause involves
weighing the pain, danger, or intrusiveness of the examination against the need for, or
usefulness of, the information to be gained.
 Schlagenhauf v. Holder
Passengers injured in a bus collision sued Greyhound, S (bus driver, and the owners of the trailer with
which the bus collided. The trailer owners claimed the accident was due to S’s negligence and
moved for a physical and mental examination of him. Wanted him to be seen by specialists in 4
fields—gave 9 specialists to choose from—S was examined by all 9.
Rule :
FRCP 35 is applicable to defendants as well as plaintiffs. Under FRCP 35, though the person
to be examined under the rule must be a party to the action, he need not be an opposing party
vis-à-vis the movant. Under FRCP 35, a person who moves for a mental or physical
examination of a party who has not asserted her mental or physical condition either in support
of or in defense of a claim, must affirmatively show that the condition sought to be examined is
really in controversy and that good cause exists for the particular examination requested.
Holding: In this case, there is nothing in the pleadings to support the examinations by the neurologist,
internist or psychiatrist but there was specific allegation that his vision was impaired—were that
the only examination requested this would not be set aside.

A mere assertion that the conditions are in controversy does not satisfy “in controversy” and
“good cause” requirements.

Party who must submit to the examination is entitled to a report.

Can only get examinations of parties to the action—not of eyewitnesses, etc.
REQUESTS FOR ADMISSIONS
 McSparran v. Hannigan
FRCP 36, 37(c)(2)
Action for wrongful death, p served with request to admit that d McShain occupied or had control of the
premises where the fatal accident occurred—p made the admission. This insulated M from
liability because admitted that he was statutory employer liable only for workers comp. After
verdict for p, M moved for JNOV.
Rule :
FRCP 36(b) holds that admissions are conclusively binding. Because the admission points to
finding of statutory employer, this removes the issue from controversy and JNOV must be
granted.

Purpose of the rule is not discovery of information but the elimination at trial of the need to
prove factual matters which the adversary cannot fairly contest.

Rule :
The admission is for the purpose of the pending action only and neither constitutes an
admission by him for any other purpose not may be used against him in any other
proceeding.

Admissions can be withdrawn.

If party does not answer the request, it is deemed admitted.
Under FRCP 37(c)(2)—If found to be true and party failed to admit, must pay reasonable costs
in making the proof unless you had reasonable ground to think you’d win, the request was
objectionable under 36(a), or the admission was not of substantial importance, or there was
other good reason for the failure to admit.
Y. Mandatory Disclosure
 Comas v. United Telephone Company of Kansas
FRCP 26(a)(1)
Parties agreed to voluntarily produce all relevant materials as an alternative to formal discovery. D would
give p the personnel files it wanted but not the investigative file.
Holding: Initial disclosures don’t require production of documents, but parties can agree to produce all
relevant documents without discovery requests. Parties here agreed to make their Rule 26(a)(1)
disclosures by such production so d must produce those documents.

Purpose of the rule is to speed the discovery process, keep things out of court, do things sua
sponte, get hassle out of the way.

Probably could do this through interrogatories, but maybe agreed to avoid the costs
associated with that.
Z. Work Product
 Hickman v. Taylor
FRCP 26(b)(3)
Tugboat accident, d’s lawyer took statements of witnesses and survivors in anticipation of litigation. P
submitted interrogatories for all related material and for oral statements to be written out for
him.
Rule :
Opposing party cannot inquire into oral and written statements or other information secured by
an adverse party’s counsel in the course of preparation for possible litigation after a claim has
arisen—not discoverable on mere demand and without showing of necessity.

Won’t allow this for a number of reasons: would allow opposing party to do all the work in
discovery; would encourage bad practice of NOT taking down notes; allows the thoughts,
analysis, and ideas for strategy to be given to other party; could put lawyer on the stand.

Test for allowing a request for discovery: (1) substantial need of the parties; (2) party is
unable without undue hardship to obtain the materials another way.

Work product does not protect the information bit the form of the information.

If something prepared in ordinary course of business, not protected. Must have been in
anticipation of litigation.
AA.
Sanctions—FRCP 37
 Cine 42nd Street Theatre Corp. v. Allied Artists
P seeks damages for $1 million under antitrust law claiming d’s restrict his access to first run films. D’s
served p with interrogatories—p secured d consent to defer discovery on issue of damages until
could retain an expert—kept stalling—court ordered answers, more delay.
Rule :
A grossly negligent (not just willful) failure to obey an order compelling discovery is sufficient
to justify the severest disciplinary measures under FRCP 37 (precluding submission of evidence
which would in effect dismiss the case).
Rule :
Where there is gross negligence amounting to dereliction of professional responsibility but not
conscious disregard of court’s orders, sanctions. Sucks for p because it was his lawyer’s
mistake, but choose counsel at own peril.
Rule :
Evasive answers treated as failure to disclose under 37(a)(3)—first they compel fuller answers,
then sanctions.
ADJUDICATION WITHOUT TRIAL

FRCP 56 - Summary Judgment
Prior to trial, a summary judgment may be ruled if the movant shows there is no “genuine
issue of material fact” in the lawsuit, and that he is “entitled to a judgment as a matter of
law.”
 Lundeen v. Cordner
Decedent had a life policy in which beneficiaries were his two children with the P. He
remarried D. P sued insurance company which impleaded trustee. D then intervened. Trustee
interpleaded. Decedent did all in his power to change policy but it had not been changed.
Decision rested upon affidavit of Mr. Burk.
Rule :
Where no genuine issue as to any material fact remains, the court may grant summary judgment
if the information presented would entitle one of the parties to a directed verdict.

Information presented by defendant was uncontroverted and, if present at trial, would have
entitled her to a directed verdict.
Holding: A trial cannot be forced merely to take a witness’ testimony when there is no showing that his
testimony would produce different or additional evidence than given in his affidavit.
Holding: There is no benefit to be gained by a witness’ testimony when:
a) the witness had no stake in the proceedings because he changed the policy during his
normal course of business;
b) his testimony was competent both in regard to his mental capacity and in his being in a
position to directly observe the facts related in the affidavits;
c) his affidavits were positive, internally consistent, unequivocal, and in full accord with
the documentary evidence.

Additional consideration was given to the fact it was unlikely that he could be brought in
for trial, but would have to settle for a deposition in which a jury could not see his
demeanor.

In a notecase involving slander, all witnesses present to the incident submitted affidavits
that denied the allegations. Court issued summary judgment for defendants. Court
admitted that testimony may be judged by both content of the testimony and “demeanor” of
the witness, here the P would not have an effective appeal from a directed verdict because
testimony would not show this “demeanor.” Thus, the judge would become the final arbiter
in all cases where the only evidence is that of testimony.
Facts:
 Cross v. United States
Language professor and wife take trip to Europe. Claims deduction on income. He and other
professors are the witnesses who submitted affidavits.
Holding: Even if the law provides support for claimant, a summary judgment should not be issued if a
fact concerning the amount contested was entirely determined by the claimant and interested
witnesses.

Before traveling expenses can be allowed as a deduction, there must be a factual
determination to the amount which depends upon meaning facts and factors.

Here, the disputed questions of facts rest entirely on the credibility of movant’s witnesses.

In Adickes v. S.H. Kress & Co., a white teacher brought her six black students to a diner.
Waitress took her students’ orders but not hers. P was arrested for vagrancy. P claims the
arresting police officer witnessed the waitress’s action, hence they were conspiring. D
moved for summary judgment because her proof was hearsay and would be inadmissible at
trial. Supreme court held: Because in deciding to order a summary judgment the evidence
must be viewed most favorable to the non-moving party, when the evidence presented does
not show an absence of a genuine material fact issue, the summary judgment must be
denied.
a) Here, the Court readily admits that evidence that would be inadmissible at trial may still
be used to deny a summary judgment.
b) Note distinction with Cross: Here, the questionable evidence was submitted by the
non-moving party – who must have everything viewed in her favor; whereas the moving
party in Cross had the questionable evidence.
Facts:
 Celotex Corp. v. Catrett
Facts:
Rule :
P claimed exposure to asbestos manufactured by D. After lengthy period for discovery and
without submitting any evidentiary materials, D moved for SJ b/c all of the evidence shown did
not implicate the D’s as the makers of the asbestos.
Without bringing up evidentiary materials, a movant may be entitled to summary judgment
merely by showing that the existing record contains no evidence that the other side will be able
to prove an essential element of its case.

A court may allow a party more time for discovery.

This does not mean the party may just move for a SJ in a conclusory fashion. The moving
party must still review the opposing party’s materials and prove to the court the lacking
element(s) of the action.

Brennan’s concurrence and dissent give good illustration:
a) If moving party will bear burden of persuasion at trial that party must support its
motion with credible evidence. Such affirmative showing 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.
b) If nonmoving party would bear the burden of persuasion at trial, party moving for sj
may—either submit affirmative evidence that negates an essential element of the
nonmoving party’s claim. Or, can demonstrate that nonmoving party’s evidence is
insufficient. If nonmoving party can’t muster sufficient evidence to make out its claim,
a trial would be useless and the moving party is entitled to summary judgment as matter
of law.

Are the letters admissible? The rule allows affidavits for discovery, even though they are
not generally admissible but the Rule 56(e) states the facts must be admissible. Therefore,
if the letters state admissible facts, then they should be allowed for discovery. It doesn’t
matter if they are admissible now, but only if it points to evidence that will be
admissible then.
 Coulas v. Smith
Facts:
FRCP 55 - Default
P filed an answer to cross complaint but never showed up at trial after a continuance had been
granted.
a) Rule 55(a) – When a party fails to “plead or otherwise defend … the clerk shall enter
the party’s default.”
b) Rule 55(b)(2) – “If the party against whom judgment by default is sought has appeared
in the action…the party shall be served with written notice of the application for
judgment at least 3 days prior …”
c) Rule 55(c) – court may set aside “for good cause shown” in accordance w/ Rule 60(b)
which states a judgment may be relieved if there is “mistake, inadvertence, surprise, or
excusable neglect.”

Levin feels the court blew this one b/c the defendant is exactly the person who should have
received a three day notice.

Courts clearly disfavor default judgments (except this one).
THE TRIAL STAGE
BB.Trial by Jury
The right to a jury trial
 Beacon Theatres
Beacon threatened to bring an antitrust action against Fox based on Fox’s contract granting it exclusive
rights to show first-run movies. Fox brought a declaratory relief action against Beacon. Beacon
counterclaimed, seeking treble damages and demanding a jury trial.
Rule :
Rule :
Only under the most imperative circumstances can the right to a jury trial of legal issues be lost
through prior determination of equitable claims, and in view of the flexible procedures of the
federal rules, the Supreme Court cannot now anticipate such circumstances.

This suit would have never occurred when the Seventh Amendment was created.

Before merger of the Courts of Law and Courts of Equity, claims for which there was an
adequate remedy by law (damages) would be heard in courts of law – trial by jury; claims
where no adequate remedy was available (restitution, injunction, specific performance) the
Courts of Equity would hear the case – no jury.

Majority stresses that a legal remedy (damages, by federal law) would have been available,
but because the plaintiff sought a declaratory judgment – hence, injunction – the party
would be deprived of this remedy. Where 2 claims together and one would allow for jury
trial, must preserve that right.
If there’s right to jury, jury gets first crack at issues then goes to court for other issues.
 Dairy Queen
The constitutional right to a trial by jury cannot be made to depend upon the choice of words
used in the pleadings.
Here, there were three charges that were essentially injunction, accounting and judgment, injunction.
Court said that “accounting” was just a way of saying damages. This was a damages suit.

Language used indicates that Beacon meant any legal issue could be heard by a jury. Even
small legal issues have to be scheduled first so jury can perform its role.
Rule :
 Ross v. Bernhard
P brought derivative suit in federal court against the directors of an investment of which they were
shareholders and joined the company’s brokers for excessive brokerage fees.
Rule :
If legal issue that would entitled the corporation to a jury trial, then the right to a jury trial is not
forfeited merely because the stockholder’s right to sue must first be adjudicated as an equitable
issue triable to the court.

Legal nature of an issue determined by considering: (1) pre-merger custom; (2) remedy
sought; (3) practical abilities and limitations of juries.

Reasons to limit jury are bias, prejudices, ignorance; screening process—who can spare 2
years for a trial?; England got rid of it.
 Teamsters v. Terry
Truckers request jury trial in claim against union who allegedly did not represent their grievances against
an employer. Seeks compensatory damages.
Holding: (PLURALITY) A p in an action against a union for breach of duty of fair representation is
entitled to a jury. Here, issue is both legal and equitable, remedy sought is damages, so right to
jury.

Brennan concurrence—the right to a jury should be determined only with reference to
remedy sought. But consider Indianhead where money damages were not classified as
legal because incident to decree of specific performance.

Stevens concurrence—this action is analogous to professional malpractice, a legal action.

Kennedy dissent—the action is most analogous to breach of fiduciary duty, an equitable
action.
Jury Selection
 Thiel v. Southern Pacific
Empaneling the Jury
P moved to strike the jury panel on the ground that it had been unfairly selected when clerk and jury
commissioner had removed all persons who worked for daily wage because judge excuses them.
Holding: Although the judge can excuse individuals for whom jury service would be a financial hardship,
that cannot justify the exclusion of all daily wage earners regardless of whether an actual
hardship is involved.
Rule :
Prospective jurors shall be selected by court officials without systematic and intentional
exclusion of any of the economic, social, religious, racial, political, and geographical groups of
the community.

§1863 exempts certain people from juries.
 Flowers v. Flowers
Challenging Individual Jurors.
Child custody suit in small town where many members of the jury knew the family. There was evidence
that mother drank. One of the jurors expressed negative feelings toward drinking, made
statements to other juror that she admired the father.
Holding: Disqualification for bias of prejudice extends not only to the parties personally, but also to the
subject matter of the litigation. But to disqualify, it must appear that the state of mind of the
juror leads to the natural inference that she will not or did not act with impartiality. In this case,
her bias very clear.

Challenge for cause—allow a prospective juror to be dismissed upon a showing of her
actual or potential bias—allowed unlimited number of these.

Peremptory challenge—don’t have to make showing of cause—limited number (in the
federal courts, 3).
CC.Judicial Control Over Jury Decision
THE PROVINCE OF THE JURY
 Markman v. Westview Instruments
Patent infringement claim. Issue turns on the meaning of “inventory” in the claim.
Holding: Interpretation of written instruments is for judge. Therefore, it was correct for the judge to
interpret the patent.

Reasons for this are mainly functional—more consistency, judge understands it better.

One of the purposes of the jury is to promote community beliefs.
 Dobson v. Masonite Corp.
P brought suit for breach of oral agreement by which he was to clear timber, sell it, pay some to d, keep
the rest. No dispute as the existence of the k, but question whether k was for services or for
sale. If for services, p would win. If for sale, unenforceable under Statute of Frauds and d wins.
Holding: The determination of the meaning of a k is a question of fact for the jury.

Holtman—When applying law to undisputed facts, that’s up to the court.
JURY MISCONDUCT
 Robb v. John C. Hickey
Jury instruction that if contributory negligence upon the part of p had been established, the comparative
degrees of the negligence of the parties was immaterial. Jury found there was negligence on
both parties, d more negligent, awarded p money damages.
Holding: Where the verdict is uncertain or ambiguous, it cannot be molded and the court will not
substitute its verdict in place thereof, and a new trial should be granted.

Kind of looks like jury doesn’t like the law and that court is working with the jury to
subvert strict contributory negligence.
 Sopp v. Smith
Car accident case, motion for new trial was based on affidavits of several jurors stating that during the
trial they had visited the scene of the accident.
Holding: Mansfield Rule—affidavits of jurors may not be used to impeach their verdict. Trying to
protect sanctity of jury proceedings—majority rule.

Dissent would follow Iowa Rule—matter which inhere in the verdict, including the thought
processes and motives of the juror in reaching his decision are not readily capable of being
either corroborated or disproved. But overt acts that can be proved should be included.
 Hukle v. Kimble
Quotient Verdict
In a personal injury case, the jury, before deciding the issue of liability, agreed that each of them would
suggest a damage amount, the amounts would be totaled, the total would be divided by 12, and
damages awarded to the p in that amount.
Holding: It is jury misconduct for the jurors to decide the amount of damages to be awarded before
deliberating and deciding the issue of liability.

In a quotient verdict, outlyer could skew the verdict.

If this were in federal court, the use of quotient verdict would be okay.

Under Schulz, if would have decided liability first, then decided to use quotient verdict,
would have been okay.
JUDICIAL POWER TO OVERRIDE THE JURY
 Denman v. Spain
JNOV—FRCP 50
P was injured in an accident which occurred when the car in which she was riding collided with a car
driven by Ross. Evidence that Ross was speeding, but no evidence that was driving in other
lane. Judgment for p.
Holding: If a jury verdict for p rests on conjecture rather than legally sufficient evidence, the d’s motion
for JNOV will be granted. In this case, no explanation for the crash—jury can’t speculate.

Circuits are split as the whether state standards for directing a verdict are controlling under
Erie.

JNOV appropriate where a directed verdict would have been appropriate.
 Kircher v. Atchison
P sued for loss of a hand which had been run over by d’s train. P claimed he stumbled in hole on
platform, stumbled, hit head, train ran over his hand. RR said he was on the other side where he
was not supposed to be. Judgment for p.
Holding: Jury was not compelled to find against p because he could not with certainty relate the exact
manner in which his hand came to be on the rail.

No JNOV because based on the facts a reasonable jury could find this way.
 Aetna Casualty v. Yeatts
Suit for declaratory judgment with respect to indemnity insurance policy. Company denied liability on
ground that Y was performing criminal abortion at the time he incurred the liability. Question
of whether he was performing the criminal abortion was submitted to jury, found for Y.
Holding: A federal judge may, in his sole discretion, set aside a jury verdict and grant a new trial where
he finds the verdict is (1) contrary to the clear weight of the evidence, or (2) based on false
evidence.

This power is given to prevent miscarriage of justice.

This works better for Y than directed verdict because for directed verdict Y would have to
offer substantial evidence that he did not commit the alleged criminal act. Since no motion
for directed verdict, can’t make motion for JNOV. Only motion left is motion for new trial.

Dyer is stricter—says that no judgment may be vacated or set aside and new trial granted
upon the ground that the verdict is against the weight of the evidence except as a matter of
law—will not be set aside or vacated if supported by competent evidence.

And in Marsh, the judge is basically described as a 13th juror.
CONDITIONAL AND PARTIAL NEW TRIALS
 Gorsalitz v. Olin
Remittitur
P sued for damages to compensate for personal injuries. Jury returned $1.4 million verdict. Court found
that verdict should be reduced to $700,000 and that if p filed an appropriate remittitur within 20
days, motion for new trial would be denied.
Holding: Remittitur was proper but the court used the wrong test—correct test is the maximum amount
which the jury could reasonably find.



Other options: minimum amount; amount court thinks. No clear answer on this one.
The whole theory supporting remittitur is that the jury could not have reasonably decided on
an amount higher than what the judge thought. Attempt to save time and money by not
issuing a new trial.
SC says unconstitutional for a state not to allow review of an amount of punitive damages.
 Fisch v. Manger
Additur
P was awarded $3000 in damages. His motion for a new trial was denied when d agreed that the amount
be increased to $7500.
Holding: It is within the discretion of a trial judge in a state court to employ the practices of remittitur and
additur, by which the denial of one party’s motion for a new trial is conditioned upon the
opposing party’s consent to a reduction or increase in the amount of damages awarded.

Federal courts don’t allow additurs, but allow remitturs. Dimmick—in the case of additur,
the jury has never come to that figure. With remittitur, verdict is just not all of what jury
contemplated.

This court disagrees with Dimmick—says both are invasions of the province of the jury—
but it’s okay because inherent in all jury verdicts there’s possibility of mistake.
 Doutre v. Niec
Person sued for injuries caused by bleaching hair. At trial d was not allowed to testify as to the standard
of care observed by beauty shops in the area. New trial granted limited to liability.
Holding: The questions of liability and damages are so closely intertwined that they may not usually be
separated, so that if a new trial is required on the issue of liability, the issue of damages must
also be retried.

There is no rule of law that applies here—mostly a judgment call.
DD.
Extraordinary Relief from Judgment
 Hulson v. Atchison
Timeliness of Requests for New Trials
Judgment for d, court granted 10-day extension to p, p moved for new trial, d moved to strike the motion
because it had not been filed within the 10-day limit.
Holding: If motion for a new trial is untimely, the trial court has no choice but to deny the motion.

Ignorance of the rules resulting in an agreement for an unauthorized extension of time
cannot serve to furnish grounds for relief under FRCP 60(b). Also no excusable neglect—
ignorance is no excuse.
 Briones v. Riviera Hotel
Mistake and Excusable Neglect
P didn’t respond to motion to dismiss so court granted the motion.
For purposes of Rule 60(b), excusable neglect is understood to encompass situations in which the failure
to comply with a filing deadline is attributable to negligence.
To be considered in deciding whether neglect excusable: (1) danger of prejudice to the opposing party; (2)
length of delay and its potential impact on the judicial proceedings; (3) reason for the delay; (4)
whether the moving party acted in good faith.
Cases in which negligence is held to be excusable rare.
THE BINDING EFFECT OF DECISIONS

Typically three prerequisites:
a) prior final judgment must be “on the merits”
b) claims must be the same,
c) the parties must be the same.
EE. Res Judicata (Claim Preclusion)
 Fed. Dept. Stores v. Moitie
Facts:
Instead of appealing their claim in the federal courts like other plaintiffs, the P’s took their
claim to state court. SC decision reversed a ruling which then allowed their original claim to be
remanded to TC by those plaintiffs who appealed in federal court. Moitie tried to reinstitute its
claim.
Holding: Despite the change in substantive law and the fact that the other original plaintiffs were allowed
to refile the suit, there is simply “no principle of law or equity which sanctions the rejection by
a federal court of the salutary principle of res judicata.”

Note says despite harsh language, courts will allow a case to be re-filed if there is evidence
that the first one was decided by fraud. Also, if there was a clear jurisdictional defect in the
original suit.

Emanuel’s suggest that if there is a major change in constitutional law then a plaintiff may
file a second suit; presumably because issue is of great public importance (i.e. racial
segregation).
 Jones v. Morris
Contract between P and D for payment plan for purchase of car. Acceleration clause stated that
if P missed one payment then the whole amount would become immediately due. P defaulted
on two months of payment. D filed action for the two months and was given a default
judgment.
Holding: If a transaction is represented by one single and indivisible contract and the breach gives rise to
one single cause of action, it cannot be split into distinct parts and separate actions.

Here, K explicitly granted only one cause of action.

Upon breach, P owed entire amount but D only went for the two months. Because D could
have gone for all of the amount, he might not institute another action based on the same
proof. This is res judicata.

Policy behind this is that Courts do not want to re-hear cases like this each month a person
defaults.

“One of the principal tests in determining whether a demand is single and entire, or whether
it is several, so as to give rise to more than one cause of action, is the identity of acts
necessary to maintain the action. If the same evidence will support both actions, there is but
one cause of action.”

In defining the scope of a prior judgment for controversies involving continuing or renewed
conduct, the Restatement (Second) lists considerations for whether a factual grouping
constitutes a single transaction: “whether the facts are related in time, space, origin,
motiviation, whether they form a convenient trial unit, and whether their treatment as a unit
conforms to the parties’ expectations or business understanding or usage.”

Exception given to notes and bonds: “an action on one of the notes or coupons, even though
others are due, does not bar a subsequent action on those others.”
Facts:
 Smith v. Kirkpatrick
Facts:
P and D had an agreement for services. P’s first complaint was dismissed due to Statute of
Frauds. D given special leave to sue for value of services (quantum meruit). His amended
complaint was not worded for quantum meruit; therefore, turned down by res judicata.

Court granted the plaintiff the right to sue for his services rendered stating that the first
cause of action was for breach of contract and this cause of action is for services provided
by the servant for his master. Different theories.

Traditionally, this is the reason for courts of law and equity. If a person couldn’t get it one
way, then he could try under quantum meruit.

This case is difficult to understand: Rule 8(e)2 - can plead in alternative—may state as
many claims or defenses he has regardless of consistency. Levin says the modern trend is
to plead alternatively. Just a trend, or the rule?

It seems the decision in this case was completely upon the fact that this guy was screwed by
the employer. Need to ask Levin.
 Heaney v. Board of Trustees
Facts:
P was superintendent of school where he was discharged. He sought a writ of mandamus to
reinstate him. He was denied. Now brings suit for damages.
Holding: Although a litigant may combine a claim for damages with a petition for writ of mandamus, the
plaintiff does not have to consolidate the damage and mandamus proceedings.

The policy expressed by res judicata that states to avoid the burden of repetitious litigation
must be balanced with the need for justice.
Holding: Because having a trial for both claims for mandamus and damages may be prejudicial to each
other and will likely be separated by the trial court, then the burden of repetitious litigation is
not great and the interest in justice prevails.

Court reasons that if it did hold that these cases must be joined, then the trial court would
usually have to separate them upon the request of a party because a writ of mandamus must
be quickly handled. This negates any benefit to joining the trials.

However, note that Rule 54(b) allows a court to direct a judgment for some claims of a trial
handling multiple trials. Therefore, there seems to be little to the court’s argument.
 Bogard v. Cook
P was a member of a class action suit against the same D for equitable relief due to violations
that included neglecting to protect prisoners from assault from other prisoners and permitting
guards to inflict punishment on inmates.
Holding: When notice apprises potential plaintiffs in a class action suit of their rights to equitable
reforming of conditions, it is improper to assume the notice alerted the plaintiffs to possible
monetary damages due to personal wrongs.
Holding: In a class action suit where individuals of the class have received personal wrongs allowing
monetary damages and not just equitable reform, the policy of avoiding repetitious litigation in
res judicata is not as prominent because the claims would have likely been separated.

Note like Heaney above, the courts seemed to consider the likelihood of a case being
separated into different trials.

Note this is different than Rush where the plaintiff had a personal attorney. Here, a class
action suit does not guarantee adequate counsel for each plaintiff.

Levin says to note that Courts tend to be lenient on Res Judicata.
Facts:
FF. Collateral Estoppel (Issue Preclusion)
 Cromwell v. County of Sac
(actually litigated)
In a previous case it was decided that P had not given value for bonds. In this case, TC collaterally
estopped him from asserting that he had given value for different bonds.
Rule :
After a prior judgment where a subsequent action between the same parties is instituted upon a
different claim, the prior judgment acts as an estoppel only as to matters actually controverted,
the determination of which were essential to the final verdict.

The policy behind demanding the actually litigated requirment are litigation realities “smallness of the amount, difficulty of obtaining the necessary evidence, the expense of
litigation …” There may be good reasons why an issue was not litigated.

Note: this case was not thrown out for “claim-splitting” because individual bonds are said
to create separate causes of action.
 Russell v. Place
(necessarily decided)
In a prior suit that stated two claims for relief, P was awarded damages for patent infringement, but the
judgment did not state under which claim. In subsequent action arguing the validity of the
patent, P moved for collateral estoppel.
Rule :
For an issue to be denied litigation in a subsequent action, the prior judgment must have
necessarily decided the issue in question.
Holding: When a prior judgment does not indicate under which claim the damages were ruled, a
subsequent action involving one of those claims may not preclude the issue to be argued.

If you can infer from the verdict what issues where necessarily decided then you can invoke
collateral estoppel. HYPO: Patent infringement. 1 claim. 5 defenses. P wins on general
verdict. Therefore he must have overcome on 5 defenses and those issues must have been
decided.

This problem in Russell could have been solved by special interrogatories; ask judge to
amend pleadings after judgment like in Moore v. Moore; file separate complaints.
 Rios v. Davis
In this action, P seeks damages for personal injury due to D’s negligence in a car accident. D invoked
collateral estoppel b/c in a previous action for the same accident, D was sued by Company. D
answered that Company was contributorily negligent and joined P seeking damages from him.
The court found both the company and P were guilty of negligence, but denied D’s request b/c
he was also negligent. In this action, the appeals court denied D collateral estoppel
Holding: Because the right of appeal is from a judgment and not from a finding in the trial court, a
finding of fact by a jury or court which does not become the basis of one of the grounds of the
judgment rendered is not conclusive against either party to the suit.

Note: This action should have been decided in its entirety. If P did not raise claim then he
should not be able to raise at all under compulsory claims. Also, this situation is unfair to D
b/c he begins trial with a prior ruling of his negligence.

HYPO: D <- P -> R (Plaintiff is suing both in first trial.) Can D now sue R, given both
were negligent toward P? Should be. In a dissenting opinion in another case, the judge
pointed out that the logic should not overcome reality. Where one plaintiff is supposedly
injured by two people then a jury will award the P. It does not speak for the two D’s.
 Patterson v. Saunders
P filed suit seeking damages against four separate defendants for $50,000. The D’s filed separate pleas of
res judicata due to a decree in a chancery suit with the same plaintiff against two of the four
defendants. The decree stated that the “complainant ha[d] failed to establish his ownership of
the property” or that D’s removed timber from his land.
Holding: A judgment based upon two or more issues “is treated as conclusive upon all of them, where all
are decided in favor of the same litigant and the judgment rests upon them jointly, since the
decision of one issue in such case is no less necessary or material than the decision of the
other.”

Here, both issues that P could have won on were decided in prior action. Therefore, he may
not bring them up again.

Halpern gives rule for contrary situation: Where two alternate claims end up winning in a
trial, neither finding can be used in the subsequent trial because one finding may shield the
effect of another separate issue.
 Ralph Wolff v. New Zealand Ins. Co.
P owned a company that was damaged by fire. In a suit with 9/12 insurance companies, court ruled a
small judgment that in which the companies would pay pro rata. In a subsequent case with two
more insurance companies, the companies requested they also pay just pro rata. Denied.
Holding: To bind the plaintiffs the defendants must have also been bound.

This is the Doctrine of Mutuality

For the most part, this is not followed, rather the asymmetrical approach may be used.
 Bernhard v. Bank of America
P sued executor of estate. It was ruled there was no fraud. She sued bank. Bank was granted collateral
estoppel.
Holding: A party may be held to issue preclusion if they had already litigated that issue in court, but a
party may not have an issue asserted against them if the party was not present in the first trial to
represent itself.

Once part of an action in which an issue was decided, then it sticks with you.

Bernhard reduces the burden of litigation for a party.

Go through the many arrangements and hypos of this.
 Parklane Hosiery v. Shore
Derivative class action suit based upon a misleading proxy statement made by D. Before this action came
to trial, the issue of the D’s statement was decided by SEC against the D. P asserted issue
preclusion. This is offensive collateral estoppel.
Holding: Federal trial courts have the broad discretion to grant the use of offensive collateral estoppel.


This decision effectively stripped the D’s right to a jury deciding the issue of whether his
statement was misleading. Court found this not a fatal objection
Factors for this case-by-case analysis:
a) Alignment in first suit: If D then did not pick forum which was not advantageous
b) Incentive to litigate: Small amount? Reasonably foreseeable that other suits would
follow?
c) “breakaway” suits: P may have waited for a tactical advantage
d) “multiple plaintiff anomaly”: Court would not permit offensive estoppel b/c this would
probably be the last case. ??????????
e) Procedural opportunities: whether the party in the second action had the same
opportunities in the first action to litigate issue.
f) Issue of law: Besides applying collateral estoppel, use stare decisis so as to allow
courts to reconsider the law.