Civil Procedure Outline
Professor John Czarnetsky
Fall 20011
I. Overview
A. Subject Matter Jurisdiction
1. Courts of general jurisdiction – these courts have legal authority to hear any case, unless
there is a legal authority that limits their power.
2. Courts of limited jurisdiction – only have the authority to hear those cases authorized by
the statutes that create the court (e.g. all federal courts are courts of limited jurisdiction).
3. Art III §2 of US Constitution sets the outer bounds of subject matter jurisdiction (SMJ)
of the federal courts.
4. Art III § 2 is designed to protect people from possible prejudice of state courts.
B. Personal Jurisdiction
1. A suit may only be brought in courts where the D is subject to personal jurisdiction (PJ).
Applies to both federal and state courts.
2. Citizenship in federal diversity cases is determined by domicile.
 Two criteria of domicile:
a. Residence – where a person lives
b. Intent to reside indefinitely – statement of person’s intent combined with
objective things like driver’s license, voter registration, etc. are determinative.
C. Stating the Case
1. Rule 8 (a) – requires a short and plain statement of:
1. The Reason for federal jurisdiction
2. The Facts of the incident – why relief is sought
3. The Type of relief desired
Rebecca Found Tammy trying to write a short and plain statement for the court.
2. Rule 11 – Primary goal of Rule 11 is DETERENCE (i.e. deterring lawyers from bringing
frivolous lawsuits)
 Attorney’s duty is to “stop, look, and listen”
a. This means that the lawyer is responsible for making a reasonable
investigation of both the facts and law of every case.
 11 (b) (2) –
a. The claims and defenses of the suit must be warranted by law OR
b. Must be warranted by a nonfrivolous argument for bringing changes to
the present law.
 IF a lawyer breaks RULE 11 he can be sanctioned by the court.
1
From Joey Dudek’s 1996 outline, Examples & Explanations, and class notes


a. The sanctions are to be what is sufficient in order to deter a further breaching
of the rule.
b. Sanctions can include: attorney fees for the other side, fines, or other nonmonetary devices.
RULE 11 is NOT a fee shifting device.
“Pure heart, empty head” is NOT a defense for a RULE 11 violation.
3. Rule 19 (b): if you're going to sue, you've got to join the injuring parties in an action in
the same suit
4. Rule 23: permits several members of one group to join together in a "class" if they've all
been injured.
5. Rule 26 (Discovery Rule): Very broad rule, anything that's not privileged is an open
book. Even if the lawyer can prove that it MIGHT lead to something, it's admissible. It is
limited by privileges, but they are few.
6. Difference in claim and issue preclusion: Claim preclusion is a bludgeon that smashes
all efforts of a party to relitigate events that have already been litigated and decided in a
prior suit. Issue preclusion is a scalpel that dissects a lawsuit into its various issues and
surgically removes from reconsideration any that have been properly decided in the prior
action.
1. So why do we need issue preclusion then? If claim preclusion so broadly
precludes relitigation, whether or not an issue was previously raised, what is the
need for a separate doctrine? The answer is that issue preclusion is needed
because issues already litigated may come up again in later litigation based on
separate events.2
2. General idea: The idea is, although that first transaction may not be the issue of
the second suit, if the issue around which that first suit revolved comes up, it will
not be relitigated.
3. Issue preclusion is narrower: It is narrower in that it does not preclude all
possible issues that might have been raised in a prior action but only those
actually decided in that action.
1. Note that issue preclusion only bars issues that were litigated and
decided in the prior action; it does not affect claims or defenses that
could have been raised but were not.
II. PERSONAL JURISDICTION
Specific Jurisdiction
A. Pennoyer v. Neff, 1877

Case delineated two types of personal jurisdiction:
In personam- power of a court to render a decision over a person
In rem- power of a court to render a decision over a thing (usually land)

Every state has exclusive jurisdiction and sovereignty over people and property within its
territory.
I.e. if litigation is based on a different single “transaction” then claim preclusion doesn’t apply but we still
want to save the court’s time and not relitigate issues that were taken care of in the suit about that first
transaction.
2

Due process of law would require an appearance or personal service within the state
before a foreign D would be bound by any decision rendered by a state court.

14th Amendment: “Due Process Clause” – prohibits any state from depriving any
individual of life, liberty, or property without due process.

After Pennoyer, a state could gain personal jurisdiction over a foreign D by:
* The D being served personally with process within the state
* The D consenting to jurisdiction by voluntarily appearing
* Obtaining quasi in rem jurisdiction (see explanation below)
Quasi-in-rem: If foreign D has property in the forum state, P can have property attached
by court. This would provide the state court w/ personal jurisdiction over a D. Even if D
is not in state, state has personal jurisdiction if D has property purchased before the
action.
 Simply put- the person's got to be served w/in the state, or consent to jurisdiction, or
the property’s got to be attached before the lawsuit begins in order to get PJ.


Pennoyer v. Neff resulted in a very neat and easy test to apply. If the person can be
found in the state, or they consent to jurisdiction, or their property is there before
the action, D is subject to PJ in the state.

Pennoyer’s conceptual scheme:
1. Power
a. In personam
b. In rem
2. Consent
a. Non-resident, who did not own property could designate someone to
accept service.
3. Notice
a. In personam – notice (SOP) had to be either personal service within the
state or a seizure of land (through “in rem”). Almost guaranteed that D
would receive notice.
b. In rem- publication notice was OK. Very slight notice needed.

As a result of Pennoyer v. Neff, state court jurisdiction now becomes a federal issue
under the 14th Amendment.

Aspects of Pennoyer that are still good law:
1. Tagging- Confirmed by Burnham
2. Full Faith and Credit – Collateral Attack
3. Consent
4. Made PJ into a 14th Amendment issue

Not Good Law
1. Constructive notice- It is now considered a last resort (Mullane)
2. Quasi in rem and in rem- must be evaluated by Int’l Shoe and its progeny

Rule 12(b) – Under federal rules, D must bring up an objection to jurisdiction immediately
or lose the chance to object altogether.
1. Options in objecting to jurisdiction:
a. Direct Attack – Usually done through a “special appearance.” D can
appear in the original action at the beginning of the suit and object to the
court’s exercise of jurisdiction over him. This technique is only available
in state court, not fed court.
b. Collateral Attack – D can ignore the original suit entirely. The risk of
that is that a default judgment will be entered. P will then attempt to
bring the judgment to D’s home state court. If that judgment is later
deemed enforceable by his home state’s court, D will have lost his suit
without ever having had a chance to defend it.
 You’d better be pretty confident before you pull a collateral
attack.
2. What happens next…
 P takes the judgment against D to a state where D lives or has property and
seeks a court order from the courts of that state authorizing the sheriff to sell
D’s assets to satisfy the judgment.
 The Full Faith and Credit Clause of the US Constitution requires the courts
of each state to honor the judgments of other states.
o Exception: If D objects to PJ in his home state court, the court may
decide the rendering state did not have jurisdiction in the original
action and refuse to enforce it.
 Exception to the Exception: D may NOT challenge
personal jurisdiction in the enforcement action if he has
already done so in the original action.
B. International Shoe v. Washington (1945) – Minimum Contacts

Personal jurisdiction is the price Ds pay for deliberate efforts to derive benefits from or
conduct activities in a state.

“Casual” and “isolated” contacts will not be sufficient to subject D to PJ.

General Jurisdiction- if a court has general jurisdiction over a D, court can hear ANY
claim brought against D.

Specific Jurisdiction- a state court may still have in personam jurisdiction over D if it can
be shown that D has “certain minimum contacts so that maintenance of a suit does
not violate traditional notions of fair play and substantial justice.” That is the test for
SJ- memorize.
Basically, the closer the relationship b/n the contacts of D and forum state and the cause
of action being brought, the more likely that the forum state will have PJ over D.
Remember the example of Czarnetsky tripping the little kid in the movie theater he visits
once a month in Memphis. B/c the contacts are directly related to the alleged tort, the
notion of specific jurisdiction says the contact is sufficient.
However, if Czarnetsky gets in a bar fight in Oxford that doesn’t mean he can be sued in
TN just b/c he goes to the movies there once a month. Still, in cases where PJ is a little
questionable, cts will probably go ahead and hold PJ.

Int’l Shoe different than Pennoyer b/c it dealt w/ a corporation, not an individual.

Minimum Contacts (How to CAP off minimum contacts):
a. D must have had Contacts w/ forum state
b. Action (suit) must Arise from such contacts
c. D must have “Purposefully availed” himself of the laws of the state:
 “purposeful availment”- usually, if D directly did business in the state with the
purpose of making money
 If D has purposefully availed himself, he is said to have enjoyed protection of
the laws of the state, and likewise is subject to the laws of doing business in
the state.

“Traditional notions of fair play and substantial justice”
 VERY elastic standard

Things the court will weigh in deciding whether or not the maintenance of a suit
violates the TNFPSJ:
a. The burden on D who will be tried in forum state
b. Interests of forum state
c. P’s interest in convenient and efficient remedy
d. Interstate judicial system’s interest
e. Interest of involved states in social policy
*Memorize these factors
C. Hanson v. Denckla, 1958 – Purposeful Availment

Applied “purposeful availment” to individuals

Individual D must do some act by which he “purposefully avails” himself of the privilege of
conducting activities w/in the forum state, thus invoking protection and benefit of forum
state’s laws.

“Unilateral activity of those who claim some relationship w/ nonresident D cannot satisfy
requirement of contacts w/ forum state.”

Min contacts are contacts that D has because of D’s free choice to avail himself of the
benefit of doing business in a state.

The issue is whether D has minimum contacts w/ the forum state such that "traditional
notions of fair play and substantial justice” are not offended.

If trustee (in Hanson) had strongly advised her to move to Florida, he may have been
subject to PJ because:
1. It is arguable that what might’ve been a unilateral act on the part of the lady was then a
joint decision.
2. It creates a deeper level of contact w/ Florida.
D. Shaffer v. Heitner, 1977 – Letting Go of In Rem Jurisdiction

Stockholder derivative suit- a suit from a stockholder for breach of duty against the
directors and officers of a corporation

Logic of P lawyers- You’re dealing w/ only two cases that set the standard for PJ in the
US, Pennoyer and Int’l Shoe. Int’l Shoe said nothing positive or negative about in rem
jurisdiction. Pennoyer condoned it. In addition to that, Delaware statute provided that
stock (even though abstract) was considered to be physically in the state of Delaware
(legal fiction). Lawyers naturally thought that they had a good case.

Supreme Court blew P’s case out of the water with this statement: "We therefore
conclude that all assertions of state court jurisdiction must be evaluated according to the
standards set forth in Int'l Shoe and its progeny."

After this decision, quasi-in-rem (using property to gain jurisdiction) was not allowed as a
means for gaining personal jurisdiction.

The court tries to say that, "When we were talking about contact, we're abolishing the in
rem notion. Now we're talking about personal contact between a person and a state."

Supreme Court said that all assertions of state court personal jurisdiction MUST be
evaluated according to the standards set out in Int’l Shoe (MC + TNFPSJ = PJ)

Court stated that if a direct assertion of PJ over a D would be unconstitutional, then an
indirect assertion should not be permissible either.

Brennan thought the real test should be fairness; that looking at all of the facts in a fair
way equated due process.
E. World Wide Volkswagen v. Woodson, 1980 - Stream of Commerce & Foreseeability

Products liability case

D had never sold anything in forum state; had never any contacts w/ forum state.

P’s car was bought from P and taken to OK subsequently.

P argues that it was “foreseeable” that a mobile object, like a car, sold by a local dealer,
could be brought to forum state. Therefore, D is subject to PJ.

Seaway, the auto dealership in this case, had committed no deliberate acts that affiliated
it with Oklahoma.

The Court has chosen a narrower view of PJ, focusing on the scope of the activity of the
seller, rather than the predictable area of use of the product by the buyer.

Court said that “foreseeability” is not enough under Due Process Clause. D must have
MC + TNFPSJ (set out in Int’l Shoe).

Stream of Commerce Theory- using Int'l Shoe, if a merchant sells stuff to the public, it
moves around and he knows it could potentially end up being used in a certain area, then
the merchant can subject to PJ in the state where his products ended up (through the
stream of commerce).

Court says the stream of commerce theory doesn’t apply in this case. If all that is
required to establish PJ is the ability to foresee that D’s product could potentially travel to
the forum state, a merchant would be subject to PJ of the cts of every state to which his
product traveled. That’s unreasonable.

Court said that foreseeability does not mean that D could anticipate his product traveling
to forum state. Rather, it means that a D could reasonably foresee being hauled into
court in a forum state, based on minimum contacts w/ the forum state.

The reasonable anticipation and purposeful availment test leaves the door open for
"fairness" decision-making.

Brennan’s dissent: Brennan said that the majority did not give enough consideration to
forum state’s interest in hearing the case. He also said that mere inconvenience of P’s
chosen forum should not prevent D from appearing in that forum.
F. Asahi v. Superior Court, 1987

Indemnification suit

D never actually sold any products in CA (forum state)

Court talks about stream of commerce: products moving through interstate marketplace

Court split on the question of whether the mere act of selling goods outside the forum
state that will likely be imported into the forum state for resale suffices to support
jurisdiction.

O’Conner (and three other Justices’) Test: would require clearer evidence, such as
designing the product for the market in that state or advertising there. If D’s acts satisfy
O’Connor’s test, they will support jurisdiction, since the other Asahi opinions would
require a lesser showing.

Concurring Test: Simply knowing that the stream of commerce may sweep goods into
the state after they leave D’s hands is sufficient to establish “personal availment”. The
concurring justices would find that just sending goods into the stream of commerce
(at least in substantial quantities) constitutes “purposeful availment.”

The more consistent view is that just putting something in the stream of commerce isn't
enough. We have to look for more “purposeful availment” than that.

At least eight of the Asahi Justices agreed that, once a significant contact with the forum
state is found, the Court must consider whether it would be fair and reasonable under all
the circumstances to take jurisdiction.

Asahi left the stream of commerce question unsettled. There was no clear majority as to
whether entering products into the stream qualifies as MC, leaving purposeful availment
unclear as well. However, the court began leaning towards Brennen’s opinion.

Asahi also left the possibility that, in a modern economy, MC may be irrelevant and that
the Court in the future might concentrate on the TNFPSJ test (Justice Brennan predicted
MC would eventually be ignored, replaced by fairness).

Just a suggestion (an example of how to “think outside the box”) from Czarnetsky:
A novel way of looking at Asahi is to present the issue of general jurisdiction. If you could
somehow reasonably argue, in light of the evidence, that their contacts were systematic
and continuous, then you could also reasonably argue that the court had general
jurisdiction. Questions that could help you resolve, or at least present the possibility are:
o What did the corp say or do regarding their business in CA?
o Did they boast of their int'l reach in publications?
o
o
o
Do they sell in the US?
Do they have bank accts in the US?
What volume of Asahi’s tire valve stems are distributed in CA?
G. Burger King v. Rudzewicz, 1985

FRCP 4 (k) (1) (A): Fed Dist Cts have the same limits on their jurisdiction over
persons as the cts of the state in which they are located, unless there is a fed stat
authorizing greater jurisdictional power.

Example: Fed Dist Court for North MS has the same limits on personal jurisdiction as
does the MS court system.

In Burger King the contract said, “The contract will be governed by the laws of
Florida.” There’s nothing wrong with that. Cts routinely apply the laws of other
jurisdictions.
o For example: Czarnetsky gets in a wreck with someone in Memphis (on the
way home from the movie theater where he goes to eat lots of popcorn b/c
he is depressed about his divorce). The person he hits sues him in MS. MS
will apply TN law.

The Florida law clause is not a choice of forum clause, and it’s not consent to be
sued in Florida. However, the court stretches this to interpret it as consent to PJ in
Florida.

Court in this case said that the TNFPSJ considerations can serve to establish
reasonableness of PJ upon a lesser showing of MC than otherwise would be
required.

If it is clear that D has purposefully availed himself of the laws of the forum state, D
can be subject to PJ of that state, despite a lack of MC.

This decision seems to imply that TNFPSJ is more important than MC.
General Jurisdiction
H. Burnham v. Superior Court, 1990

Pennoyer court stated that if D was served w/ process while in forum state, court of
forum state had PJ over D. Process is called “tagging.”

Court upholds this idea, but there is no majority reason from Burnham as to why this
is true.

Brennan and Scalia both think it’s ok for D to have been tagged. They just think it’s
ok for different reasons.

Scalia’s theory (he wrote the main opinion)
1. Tradition of cts has been to allow states to have PJ over non-resident D
served w/in state. Scalia believes very strongly in judicial tradition.
2. Presence is enough to establish PJ.
3. Scalia rejects idea that the Shaffer decision says that all assertions of state
court PJ (including in-state SOP) must be evaluated according to the Int’l
Shoe test (MC + TNFPSJ).
4. Scalia says that Shaffer merely said that quasi-in-rem and in personam
are the same and must be evaluated the same.

Brennan’s Theory: (concurring opinion)
1. Shaffer dictates that all assertions of state court PJ must be evaluated
according to Int’l Shoe and its progeny.
2. Brennan states that the true insight of Shaffer is that all rules of jurisdiction,
even ancient ones, must satisfy contemporary notions of due process.
3. Says that Court is not obligated to uphold old notions of PJ that do not
coincide w/ modern ideas about due process.
4. Brennan says that, using Int’l Shoe (at least in this case), a D who is served
w/ process inside forum state is subject to PJ b/c he has availed himself to
laws and benefits of forum state, as long as D is voluntarily and knowingly in
the state (i.e. his idea of “purposeful availment”).

Brennan relies upon Int’l Shoe asking, “Is it fair?”

Scalia relies upon Pennoyer asking, “Is D there?”

Court has NOT decided if Buhrnam applies to corporate D. Buhrnam seems to
suggest that PJ over a corporate D can be established by service of process on a
corporate officer inside of state’s borders.

Brennan leaves open the possibility that a D served w/ process w/in state would NOT
be subject to PJ if D was not voluntarily or knowingly w/in the state.

Maybe even a D flying in airplane over state could be subject to PJ; according to
Brennan, it would depend on whether he voluntarily and knowingly was w/in the
state.

Generally, as far as establishing jurisdiction goes, Int’l Shoe and its progeny are still
the test. However, the exception to the need for MC + TNFPSJ is in the case of
service of process w/in the forum state’s borders.
How to Establish PJ- An Overview
1. Minimum Contacts- purposeful availment (foreseeable being hauled into court
b/c of contacts w/ state)
2. Traditional notions of fair play and substantial justice
 Burden on D
 Interest of forum state in hearing case
 P’s interest in convenient and efficient remedy
 Interstate judicial system’s interest in obtaining efficient resolution of
conflicts
 Shared interest of involved states in furthering fundamental social policy
3. General Jurisdiction
 Domicile- individual
 Articles of incorporation
o Place where incorporated and principle place of business (diversity
citizenship requirements) certainly fit the bill. However, this will also
include any state where…
o
D has “systemic and continuous contacts” w/ forum state; contacts
must be “substantial”
4. “Tagging” – D served w/ process while present in forum state.
5. D’s consent
Consent as a Substitute for Power
I. Carnival Cruise Lines v. Shute

Forum selection clause- part of K that stipulates a forum where all actions arising out of K
must be brought

Pennoyer established that D’s consent (instead of power of court) could establish
jurisdiction.

Still true today: D may, either at outset or before trial consent to jurisdiction in a forum.

Forum selection clauses, if truly consensual, are perfectly legit forms of obtaining
jurisdiction.

In this case, they “consented” to the clause b/c they admitted that they actually read the
clause, not only b/c of the presence of a forum selection clause.

Factors to consider when deciding if forum consent clause is consensual:
1. D must knowingly consent to jurisdiction; Fine print will not usually be sufficient.
2. Court must determine if the party constructing forum selection clause was doing
so in “good faith.”
3. Party obtaining consent cannot have done so through fraudulent means.
4. Court must decide whether other party had a choice of whether or not to consent.

Cognivit Clause: one of the parties of a K agrees to have an attorney (usually other
party’s attorney) act as their agent in any dispute arising out of K.
1. The party not only consents to forum, but also gives up the right to defense of
trial and appeal.
2. MS holds these as void against public policy.

Stevens’ dissent: says that the forum selection clause may be held unenforceable if they:
1. were not freely bargained for
2. create an additional expense for one party
3. deny one party a remedy
Constitutional Requirement of Notice
J. Mullane v. Hanover, 1950

Wuchter v. Pizzutti held that individuals being sued in personam must receive some type
of actual notice.

In Pennoyer, SCt seemed to imply that constructive notice of an action was sufficient for
in-rem actions.

Pennoyer court thought that it was reasonable that a landowner would keep an eye on
his land, and that seizure of the land was enough notice in actions that were in rem.

Mullane was a quasi-in-rem action. Remember, Mullane was decided eight years before
Shaffer so in rem could still be used to acquire PJ.

Mullane court stated that in any action to be accorded finality, notice must be given that
is “reasonably calculated” to let all interested parties know of the action and afford
them the opportunity to be heard. The test doesn’t require actual notice in every
instance. It also allows constructive notice in some cases.

Parties whose whereabouts are known or can be found with due diligence must be given
direct notice (i.e. mail them notice). That can include mass mailings.

Constructive (publication) notice is sufficient for those parties:
1. Who are known to exist, but whose whereabouts are unknown.
2. Who may exist, but are unknown to party bringing suit.
3. Whose interest is conjectural or future (may not be born yet).

If there is a vast group of individual known parties, not every one of them need to be
served with notice to ensure due process, b/c those that are notified will represent the
interests of all.

In applying Mullane to pure in-rem actions, the SCt in Walker v. Hutchinson said that
personal notice must be given to a landowner whose land was being condemned and
whose name and address were known.

FRCP Rule 4 (k) (1) states that service (or waiver) of process establishes jurisdiction over
a D who is already subject to personal jurisdiction.
1. Above does NOT say that service establishes jurisdiction
2. Rule 4 (k) (1) says IF D is already subject to PJ, proper service establishes
jurisdiction.

Rule 4(d):
1. A D may waive service, but they do not thereby waive objections to venue or
jurisdiction or any defense on the merits or lawsuit.
2. Two reasons for D to waive services:
 A D who waives service receives a longer period to answer complaint.
 If a D w/o good cause refuses to waive, D has to pay cost of service.
K. Long Arm Statutes: State statutes providing for jurisdiction over non-resident Ds who have
contacts w/ the forum state.

Some states like California have authorized its courts to exercise jurisdiction “on any
basis not inconsistent with the Constitution of this state or the United States.” In states
like CA, if the court has the constitutional power to assert jurisdiction, it
automatically has the statutory power to do so as well.

The other states have passed “long-arm” statures, which authorize their courts to
exercise jurisdiction over Ds based on specific types of contact with the forum state.

If a state long arm statute and the US Constitution (particularly 14th Amend. Due Process
Clause) conflict, state long arm statute loses (i.e. it is unconstitutional) b/c of the
supremacy clause of the US Constitution. More simply put, if the reach of a state’s
long-arm statute exceeds its constitutional grasp, it’s not going to apply.

Every PJ issue involves a two-step process:
1. The court must ask whether there is a state statute that authorizes it to exercise PJ
under the circumstances of the case.
2. If there is, the court must ask whether it would be constitutional under the due
process clause to do so.
Gibbons v. Brown

FRCP 4 (k) (1) (a) states that a Fed Dist court has PJ over a D who could be subjected to
the jurisdiction of the state courts in which the federal court is located.

If you can understand the third paragraph of this decision (next bullet), you can
understand everything Czar wants us to get from the case.

3rd Paragraph says: There a two requirements for obtaining in personam jurisdiction
over a non-resident D:
1. P must allege sufficient jurisdictional facts to bring the D w/in the coverage of the
state long arm statute.
2. Sufficient "minimum contacts" must be shown to comply w/ the requirements of
due process (i.e. Does it comply w/ the SCt’s interpretation of 14th Amendment?).

Gibbons: In this particular state (Fla.), the District Court notes that the Florida long arm
statute is more stringent than the federal. Hence, states can restrict PJ more than the
Constitution, although they cannot make them any less stringent than the Constitution.

If the state long arm statute would permit PJ over a D, then the statute must be evaluated
according to Int’l Shoe and its progeny.

Remember, the Constitution (i.e. Int’l Shoe and progeny) will win regardless of the
provisions of the state long-arm statute.
L. Venue

Venue is controlled by Federal statute 28 USC § 1391.

Venue further localizes proceedings. Venue tries to ensure that suits take place:
1. in a place that bears some sensible relationship to the claims asserted or
2. bears some sensible relationship to the parties in the action.

§1391 (A):
a:
1.
2.
3.

ONLY APPLIES TO DIVERSITY CASES: An action may be brought only in
Judicial district where any D resides, if all reside in the same state.
Judicial district in which the cause of action arose.
Judicial district in which any D may be subject to PJ (at time of action is
commenced) IF there is no district in which venue would be available under
(1) and (2)).
§1391 (B): ONLY APPLIES TO CASES NOT SOLELY BASED ON DIVERSITY: An
action may be brought only in a:
1. Judicial district where any D resides, if all reside in the same state
2. Judicial district in which the cause of action arose.
3. Judicial district in which D may be found, IF there is no district in which venue
would be available under (1) and (2).

§ 1391 (C): APPLIES TO CORPORATE Ds: An action may be brought when:
1. Corp D is deemed to reside in any judicial district in which it would be subject
to PJ (at the time action commenced).
2. IF there is more than one judicial district in a state, a corporate D is deemed
to reside in judicial district w/in which it would be subject to PJ if each district
were a separate state (MC+ TNFPSJ) (at the time action commenced).
3. If there is no such district, then whatever district D has most contacts with.

§1391 (c) is NOT a separate, exclusive provision governing venue in cases against
corporations. All it does is define corporate “residence” for purposes of applying
§§1391 (a)(1) and (b)(1). It defines corporate “residence” as any district in which the
corporation is subject to PJ.

Summary of Sections:
§1391 (a) and (b) – provide the basic options of venue in most federal cases; (a) governs
pure diversity actions; (b) applies to cases that are not solely based on diversity.
§1391 (c) – defines the “residence” of corporate Ds for purposes of applying sections (a)
and (b) to cases involving corporations.

Summary of the Subsections:
Both §§1391(a)(1) and (b)(1) – authorize venue in a judicial district where any defendant
resides, if they all reside in one state.
§§1391 (a)(2) and (b)(2) state that venue is proper in a judicial district in which “a
substantial part of the events or omissions giving rise to the claim occurred, or a
substantial part of the property that is the subject of the action is situated.” The purpose
of this provision is to assure a relation between the underlying events that are litigated
and the place where the case is tried.
§§1391 (a)(3) allows venue in a district where any D is subject to personal jurisdiction.
§§1391 (b)(3) authorizes venue in a district where any D may be “found.”
Czar says nobody really knows the difference b/n what it means to be subject to PJ in
one case and to be found in another.
Both of these subsections are “fallback” provisions that only apply if there is no
district, anywhere in the United States, which would be a proper venue under either
of the first two subsections.

Venue, like PJ, is considered a personal privilege of D which may be waived by D.
 Note also: D waives his objection to venue by failing to raise it when he
responds to P’s complaint.
 Parties can agree ahead of time to litigate in particular venues (e.g.
Carnival Cruise Lines)

Basically, what §1391 really requires is that in most cases Ds must be sued in a district
where they reside or where important events relevant to the suit took place.

§1391 (c) is IRRELEVANT in applying §§1391 (a)(2) or (b)(2) b/c venue under those
provisions does not depend on where the corporation “resides.”

§1391 (D): ALIENS- may be sued in any district. However, this does not mean you lose
your right to argue SMJ and PJ.

Don’t forget that, although it may be perfectly clear that you have proper venue, that’s not
the end of the question. You’ve got to have PJ and SMJ as well.
M. Transfers Between Federal Courts

You CANNOT transfer from Fed Dist Court to a state court, nor can you transfer from a
state court to a fed dist court. Finally, you may not transfer from one state court to
another.

§1404 Change of Venue: Requires judge to transfer in the interest of convenience or
justice.
Two questions to ask:
1. Is it in the interest of convenience or justice to transfer from one Fed Dist Court to
another?
2. Could the case have been originally brought in transferee court?
If yes on both questions, transfer is allowed.

§1406 Cure or waiver of defects: Requires judge to dismiss when venue is
inappropriate
 §1406 applies when there is improper venue in the original where the suit has
been brought (but possibly may still be proper jurisdiction)
 If case was filed in wrong venue court, then court may
1. dismiss case for lack of venue
2. in the interest of justice, transfer to appropriate Fed Dist Court

§1631 Cure lack of jurisdiction
 Applies when case was originally filed in Fed Dist Court that did not have PJ
 If case was filed in court that did not have PJ, then court may
1. dismiss for a lack of jurisdiction
2. in the interest of justice, transfer to appropriate Fed Dist Court that would
have PJ

Transfer: What law applies?
o 1404- law of transferring state applies
o 1631- law of transferee state applies
N. Forum Non Conveniens
 Applies to cases where, regardless of the fact that the case was properly filed under
SMJ, PJ, and venue, the case logically belongs somewhere else (e.g. Piper Aircraft).

Is a judicial decision, left up to discretion of the judge; a judge may dismiss the case
where the interests of justice indicate it should be litigated elsewhere.

It’s not a statute, it’s just an ancient legal principle.

In forum non conveniens decision, courts must weigh P’s choice of forum vs.
inconvenience and oppressiveness of D having to defend in the forum.

D motion for forum non conveniens may be made only to those districts where P would
have had the right to bring action.
III. Subject Matter Jurisdiction
A. Overview
 Fed cts are cts of limited jurisdiction.

Fed cts may ONLY hear cases that fall under Art III, §2 of US Constitution; any case NOT
enumerated there may NOT be hear by a fed court. Simply put, any case not on the Art
III, §2 list must be brought in state court.

P needs to choose a court which has personal jurisdiction over D for his claim, but he
must also choose a court which can hear the type of lawsuit he plans to file against D (i.e.
a court that has subject matter jurisdiction).
B. Federal Question

Fed cts have original, but NOT exclusive jurisdiction, over cases arising under the
Constitution, treaties, and laws of the US.

Above is spelled out in §1331

Fed court judges have a duty to police cases for SMJ, and if the court does not have
SMJ, they must dismiss the case.

WELL-PLEADED COMPLAINT RULE: A suit “arises under” the Constitution, treaties,
and laws of the United States ONLY when P’s statement (complaint) of his own cause of
action shows that it is based upon those laws, treaties, or the Constitution.

Jurisdiction is conferred over cases that involve federal law only when the federal
issue is necessary to prove P’s claim.

For example, in the Mottley case, there is little doubt that the Mottleys did refer to federal
issues in their pleadings. The problem was that they didn’t have to. They could have
stated a perfectly adequate claim for relief by alleging only state issues.

This means that a P CANNOT file a claim in Fed court on a federal question if he is
merely anticipating that D’s defense will somehow invoke the Constitution, treaties, or
laws of the US.

A P will not be allowed to conceal the true nature of complaint through artful pleading.

SMJ is guarded so closely b/c it is a checkpoint of our government to prevent
encroaching on state powers.

There a few areas over which the fed court system has exclusive power. For example:
1. Admiralty
2. Some bankruptcy cases
3. Patents
4. Copyright
C. Diversity Jurisdiction
 §1332 (a): Fed cts have original, but not exclusive jurisdiction over civil action in
which the matter in controversy EXCEEDS $75,000 and is between:
1. citizens of different states
2. citizen of a state and citizen of a foreign nation
3. citizens of different states and in which an alien is involved
4. a foreign nation as P and a citizen of the US

Avoid a Common Mistake: Diversity jurisdiction does not substitute for personal
jurisdiction. Diversity jurisdiction establishes SMJ. However, PJ and venue still have
to have their day in court as well.

For purposes of 1332 (amended), an alien who is here as a permanent resident is
deemed to be a citizen of the state where he is domiciled (e.g. Saadeh v. Farouki).
o Congress chose to exclude cases between foreigners from the diversity
statute. There always has to be a citizen of the US involved.

Rule of Complete Diversity (from Strawbridge v. Curtis): everyone on the left side of
the “v” must be resident of a different state than everyone on the right side of the “v.”

Diversity of citizenship must exist at the time of the filing of the complaint.

Illustrative case was Mas v. Perry, 1974 (peeping Tom case).

Party invoking Fed Court. Jurisdiction has the burden of proving that diversity
exists.

§ 1332 (c) Corporations: For purposes of diversity jurisdiction, a corporation is a
citizen of:
1. the state of incorporation
2. state of principal place of business (can only be one place)
This applies to both diversity statute and removal statute.

SMJ answers the question, “Is this the kind of case a federal district court can hear?”

PJ answers the question, “If this is the kind of case which can be heard in federal
court, which of the federal courts has PJ over the case?”

And venue is Congress’s way of saying, “We’re going to further narrow the choices
of where a case can be heard.”

If a corporation has citizenship in two states, it reduces the amount of states in which
it can be sued b/c of the Rule of Complete Diversity.

Principal place of business test (can only be ONE):
1. Headquarters or “nerve center” test – state where the executive and
administrative functions are controlled
2. “Muscle” test – state where primary everyday business activities are
located (e.g. where most of the shoes are manufactured).
3. The trend is the “totality of the circumstances” test. The court will
look at all of the circumstances surrounding the corporation and make
their best guess. This is the test Czarnetsky likes.

Ankenbrandt v. Richards, 1992 – SCt stated that there are exceptions to diversity
jurisdiction (“domestic relations” exception). SCt says federal courts must decline
to hear cases of:
1. Alimony
2. Child support
3. Divorce cases
Even if one of these cases fall within the diversity statute and meet the amt in
controversy requirement, federal courts will not hear it. They WILL hear
cases if they don’t stem out of “pure domestic relations disputes” mentioned
above (e.g. tort cases).

Min requirement in diversity case MUST EXCEED $75,000 (not including int. and
costs). If substance of claim is even for $75,000, there is NO DIVERSITY. It must be
AT LEAST $75,000.01 to meet the amount-in controversy-requirement. Note: the
amt of damages must be stated in the claim.

WELL-PLEADED COMPLAINT RULE: D can have claim dismissed for lack of
jurisdictional amount. However, it must appear to a legal certainty that the claim
is really for less than jurisdictional amount to warrant dismissal. Burden of
proof is on D in a motion for dismissal. P does not have to prove he could collect that
much. Otherwise, they’d have to try the case twice.

Cts treat this requirement like the well-pleaded complaint rule – the amount asked for
in damages by P is all but controlling.

Note: There could be a statutory limit to the amt recoverable or P’s lawyer could
make a mistake and only ask for exactly $75,000 (or less).

Rule 11 prevents the P from asking for $75,000.01 (or more) when in reality the claim
is not worth the amount in controversy requirement.

Injunction: If the complaint does not ask for $ damages, but rather injunctive relief,
four approaches have been used:
1. Value of injunction to P
2. Cost of injunction to D for complying
3. Allow jurisdiction if either above yield sufficient amount
“Cost to comply w/ the remedy + What it’s worth to the P = totality of the
circumstances” Czar – that’s the best approach (where we look at the cost to
both parties)

Ability of P(s) to Aggregate Claims (Guidelines from case law):
1. If one P has two or more unrelated claims against a single D, he MAY
aggregate to satisfy statutory amount, even if one of the claims is an
unrelated state claim.
2. Two separate Ps MAY NOT aggregate claims against a single D if their
claims are “separate and distinct.” Note: there are almost no claims that are
not regarded as separate and distinct.
 If P1 has a claim for <$75,000 and P2’s claim is for >$75,000, they
may not aggregate and P1 will have to file in state court.
3. The court must take each claim by each P against each D and be sure all of
the requirements in the amount in controversy are met.
Two exceptions:
 Legal partnerships – e.g. husband and wife owning real property, the law
won’t apportion the damage.
 Number 1 (above)
4. Class action: the amount in controversy cannot be satisfied by aggregating
all class members’ claims – at least some member of class must have claims
over minimum amount.

Supplemental Jurisdiction
 Applies to cases that include elements that, if brought independently, could
not be heard in Fed court
 Supplemental jurisdiction is codified in §1367
 “Common nucleus of operative fact” – test to decide supplemental
jurisdiction

United Mine Workers v. Gibbs, 1966
 Case law example of supplemental jurisdiction; happened before
§1367
 There were two claims from P – a claim of violation of federal law
and a state claim of tort (this claim is not within Fed SMJ).
 Before §1367 two different terms to describe supp jurisdiction
1. Ancillary- permits addition of parties when the claims by or
against such parties would not, independently, support fed SMJ.
2. Pendent- permits addition of claims to suit when the claims,
standing alone, would not support fed SMJ
 Holding: Pendent jurisdiction is allowed when one claim arises
under the Constitution, laws, and treaties of the US, and the
relationship between that claim and a state claim permits the
conclusion that the entire action encompasses one constitutional
“case”.
The Supreme Court pulls the interpretation, “common nucleus of
operative fact,” of the word “case” from the Constitution, Article III,
§2.

Congress has essentially codified the United Mine Workers case in §1367
(particularly sections a and c)

§1367 (a) – If a case has at least one federal claim that is w/ federal SMJ,
then the Fed Dist Court may hear all other claims arising from the same
“common nucleus of operative fact.” Basically just restates the United
Mine Workers decision.

§1367 (b) provides an exception to (a)

$80,000 claim b/n A and B
A (MS resident)
v.
B (AL resident) Brings in C
v.
C (MS resident)
$10,000 claim b/n B and C


This statute only applies to claims brought by P.
A cannot sue C in Federal Court by suing him in the original lawsuit
against B





A can sue B; B can cross claim against C (thereby bringing C into
the case)
If B does this, however, A CANNOT MAKE A CLAIM AGAINST C in
federal court.
A is not punished (by having case dismissed for lack of diversity) if B
brings C into the suit.
If this exception was not in code, Ps could easily get around diversity
requirements.
Congress did not want to erode the stringent standards of diversity
statute (§1332) of SMJ by P’s “artful pleading.”

§1367 (c) allows Fed Dist court to decline jurisdiction over supplemental
claims if:
1. It raises a Novel or complex issue of state law
2. Non-federal claims Predominate over federal claims
3. Fed Dist court has Dismissed all claims over which it has original
jurisdiction
4. Whether hearing the Claims together may confuse the jury
No! Please Don’t Cry (just b/c the judge declined jurisdiction over
your supplemental claim)!
In all of these cases, the Fed Court is free to dismiss it to state
court.

§1367 (c) is purely discretionary.
D. Removal

§1441 is the fed stat dealing with removal.

§1441 (a)
 allows a D to remove a case from a state court to a fed dist court IF
the case may have originally been brought in that fed dist court (i.e.
that fed dist court had original jurisdiction)
 Case MUST be removed to fed dist court that covers area in which
state court is located
 Example: case filed in Lafayette Co. court MUST be
removed to federal dist court for N. MS. CANNOT be
removed to federal dist court in Wyoming, TN, or even the
federal dist court for S. MS.
 One a case is removed, possible that case can be transferred to any
other fed dist court (e.g. Piper Aircraft case).

§1441 (b)
 If a case is a FEDERAL QUESTION case, it can be removed without
regard to citizenship of parties. There’s NO NEED to look at the
citizenship (or diversity) of the parties in this case.
 If a case is based on DIVERSITY JURISDICTION, case cannot be
removed if any of Ds are from the state where case was originally
filed (in that state court). In other words, if the suit is brought in
any of the Ds’ home states, none of the Ds may remove on the
basis of diversity.

Ex: P (TN resident)
v.
D (MS resident) and
The case is filed in Lafayette Co. Court.


D cannot remove to fed dist court of N MS
D already has the home court advantage of being in his home state
and CANNOT claim diversity.

§1441 (c)
 You can get the same result of this from §1367 which was passed
after this section.
 In the wake of the adoption of §1367, §1441 (c) is kind of beside the
point.

Caterpillar v. Lewis – changed an old iron-clad rule. This essentially usurps
the power of the states. Once a case is removed (even if it’s removed
improperly), as long as at the time a fed court enters a judgment there’s fed
SMJ, then the decision will be upheld.
o Basically, “follow the rules of civil procedure, and you can still get
screwed under this decision.” – Czarnetsky, who was disturbed
Ginsberg’s opinion in this case.

Even if a state court case satisfies the jurisdictional requirements for
removal, there are drastic limits as to which court it may be removed to.
o You can’t remove to a federal court in another state.
o You can’t remove to a federal court in another district of the same
state.
There is one lonely court that can host a removed action: the federal
district court “for the district and division embracing the place where such
action is pending [in state court].”
Therefore, removal only partially displaces P’s choice of forum: He still
gets to choose the state where the action will be litigated, even if he ends
up in federal court in that state due to removal by D.

How to remove:
 D files petition for removal with appropriate fed dist court
 All work by state court on case STOPS at this point
 All P can do at this point is to claim that there’s no basis for SMJ.
 Fed judge decides removal question; case is either removed or
remanded
 SCt said in Shamrock Oil v. Sheets, 1941 that removal
statutes are to be construed narrowly AGAINST federal
jurisdiction.
 Circumstances which warrant remand depend upon:
1. Judicial economy
2. Procedural convenience
IV. The Erie Problem
A. Pre- Erie
1. §1652 Rules of Decision Act – “The laws of the States, except where
Constitution or law of US otherwise provide, shall be regarded as the rules of
decision (substantive law) in the courts of US, in cases where they apply.
2. Swift v. Tyson, 1841
 Was a diversity case
 SCt said that fed courts were not bound by state judge-made law.
 Fed courts sitting in diversity were free to draw upon the “general
law.”
 The holding in this case centered on the word “laws” as it related to
the Rules of Decision Act. SCt said that “law” in RDA did not apply
to the judge-made common law, only applied to statutes or other
written law.
B. Erie RR v. Tompkins, 1938

P was injured by RR. State law had less of a standard for RRs not to injure
Ps (not to “wantonly injure”). Federal common law said D was liable if guilty
of “ordinary negligence (RPP standard).”

Holding: Erie overruled Swift. SCt said that except in matters governed by
US Constitution or fed statutory law, the law to be applied in any case
(based upon diversity) tried in fed dist court is to be the law of the state
in which the fed dist court is located.

The Three Bases for the Holding (reasons why the SCt prevents the
application of “federal common law”):
1. Prevents forum shopping (e.g. Taxicab case)
2. It’s unconstitutional (Czar thinks the only argument that SCt used that
could work under the unconstitutional argument is the federalism
argument – though he says it’s weak)
3. Rules of Decision Act (“in [diversity] cases the state laws apply”)

It does NOT matter whether the law of the state has been declared by the
state legislature or the highest court of the state.

The court goes out of its way to say that there is no such thing as federal
common law.

SCt stated that the Constitution gives neither Congress nor the fed cts the
power to declare substantive rules of common law that would override the
common law rules of the states.

Majority opinion states that Swift was an unconstitutional assumption of
power.

Reed’s concurrence: agreed with holding of the majority; did not think
Court needed to go so far as to call Swift unconstitutional. His suggestion:
just change definition of “laws” in RDA to include judicial decisions.
C. Limits of State Power in Federal Court

Fed cts, after Erie, were bound to use STATE substantive law, but federal
procedural law and rules.

Sometimes the line b/n these two became blurred. Example: Should fed
court apply federal or state statute of limitations restrictions?
1. Guaranty Trust v. York, 1945

State statute of limitation had run and would have barred bringing of
suit. The federal statute of limitations had not yet run, and suit would
have been allowed.

SCt said that it was immaterial if the statutes of limitations were
“substantive” or “procedural”

Court said that the test for deciding which law to use was the
OUTCOME DETERMINATIVE test – Czar: what the Court was really
doing was defining “substantive” law for the first time as something
that would be outcome determinative.
 If the federal rule/law was applied, would there be a
different outcome than if the state rule/law was
applied? If YES, then it is an outcome determinative
situation.
 If the conflict between state law and federal law is
outcome determinative, then STATE LAW WOULD
APPLY.

Court says reason is: In all cases where a federal court is sitting
in diversity, the outcome of the litigation in federal court should
be substantially the same as it would be if the case was tried in
state court.

Essentially, a state rule that was “outcome determinative” was to be
followed, no matter if it might be called substantive or procedural.
2. Byrd v. Blue Ridge, 1958
 Court states that outcome determination is not the only factor to be
considered in Erie-type cases.

Court essentially said that federal procedural policy could displace state
procedure, even if it might cause different outcomes IF:
 There are “countervailing federal interests” that could
prevail over state law. Czar state that some of these
could be:
 Judge or jury deciding questions of fact in a
diversity case
 Due process considerations
 First amendment issues
3. Hanna v. Plumer, 1965

Hanna goes back to the idea of substantive law v. procedural law.

Hanna also refines the outcome determinative test

Under Hanna, there are two distinct analyses for determining
whether the difference between a federal and state
procedure/law is “substantive:”
 Part One: Determines what happens when there is a
conflict between federal procedure and state law.
o The refined “outcome determinative” test: must be
judged according to the “Twin Aims of Erie”:
 When you think “outcome determinative,”
think forum shopping and inequitable
administration of the laws, because that’s
all that “OD” applies to after Hanna.
 Part Two: Determines what happens when there’s a direct
conflict between a state law and a FRCP.
o Court said the conflict is to be evaluated in the light
of the scope of the Rules Enabling Act and the test
set out in Sibbach (which is now codified in §2072)

Court said very specifically that the Erie/York test was NOT
APPROPRIATE when deciding the validity and applicability of a
FRCP.

IMPORTANT to note that no federal rule of evidence or procedure
has EVER been struck down as unconstitutional.
D. Czarnetsky’s formula for evaluating Erie cases
Note: The only kinds of cases that go under this analysis (i.e. the second
analysis of Hanna) are cases where there is a direct conflict between a
state rule or statute and a FRCP.
Before you get started ask: Is there truly a conflict between federal law/ rule
and state law? If there is not, BOTH WILL APPLY and there is no need for
further inquiry.
If YES, then ask, what is the source of the federal law?
1. Conflict between: US Constitution and State Law
 Apply Article VI, § 2 of Constitution (the Supremacy Clause). Its
provisions apply even if they conflict with state law, regardless of
whether it’s substantive or procedural.

Supremacy Clause: The Constitution and the law of the US is the
supreme law of the land, and all judges are bound by them,
regardless of state law to the contrary.

Therefore, US Constitution will apply.
2. Conflict between: Federal Statutory Law and State Law
 Federal statutes are also the supreme law of the land. So, if the
conflict is between a federal statute and state law, the issue is
whether Congress had the authority to enact the federal statute.

Generally, look to Article I, §8 of the US Constitution. This is where
Congress’s powers are enumerated (spelled out).

Last paragraph of Art. I, §8 is the “Necessary and Proper” Clause.
This gives Congress the power to make all laws “necessary and
proper” to implement the power given to the federal
government in the Constitution. This is one of their enumerated
powers.

TEST:
1. Is the statute governing procedure within Congress’s
power to make (is it constitutional)?
How to determine that: Is the statute that Congress has
passed rationally related to the powers given it by the
Constitution? The “necessary and proper” clause
generally makes this an easy question to answer.
2. If YES, we ask if the statute is “arguably procedural” in
nature (from Hanna).
3. If YES, the federal statue must be applied if it conflicts
with state practice because Congress has the authority to
enact the statute, and valid federal statutes are the “supreme
Law of the Land” even if they conflict with state laws.
3. Conflict between: Federal Judicial Practice and State Law
 Use Hanna Part One: TAE Test (the new outcome determinative
test):
 Determine if use of federal practice would
1. Encourage forum shopping
2. Lead to an inequitable administration of law

If answer to both of above is NO, then federal practice may be used.
If yes, STATE LAW prevails.
4. Conflict between: Federal Rule of Civil Procedure and State Law
 First, note that the Supreme Court has already determined that the
Rules Enabling Act is constitutional. We know the REA is
constitutional because:
1. Article III of US Constitution gives Congress the power to set up
the federal court system.
2. Article I, §8 (necessary and proper clause) gives Congress the
power to enact laws to set up and operate federal courts.
3. Congress did this by passing §2072, the REA.
Hence, the REA (§2072) is constitutional.

If a FRCP conflicts with state law, the Federal Rule applies if it is
valid (validity is of the FR is determined by §2072; discussed in next
bullet).

We must determine if the FRCP falls within the REA §2072 (a)
and (b). Part Two of Hanna
 Two part test to determine whether or not a FRCP falls
within REA (from §2072):
1. Is the federal rule rationally capable of being considered
procedural?
2. Does the rule “abridge, enlarge, or modify” a state
substantive right? Czarnetsky’s not really sure what that
means.

If the answer to part one is YES and the answer to part two is
NO, then the FRCP applies because it is within Congress’s
power to make such a rule.