INDEX OF
CIVIL PROCEDURE
PROFESSOR NORMAN SPAULDING
Autumn Quarter 2011
Stanford Law School
Prepared by Hans Andersson
FOREWORD
1
Spaulding’s Exam Tips ....................................................................................................... 1
Types of Exams
Steps to a Successful Answer
The American Way ............................................................................................................ 1
An Adversarial System
DUE PROCESS
1
Deprivation of Life, Liberty, Property ............................................................................... 1
What is at stake? By whose actions?
Temporary Impairment of Property
Garnishment of Wages
Deprivation of Property, Due-Process Exceptions
Deprivation of Liberty
How do the interests balance?
Why? To what end?
Notice & Hearing .............................................................................................................. 1
Challenging Detention
Habeas Corpus
Notice via Service of Process (Rule 4)
Exception: Immunity-From-Process
Reasonable Calculation to Apprise
Efficient Enhancement of Notice Procedure
Actual Notice, Failure of Notice
Dwelling & Residence
Constructing the Rules of Service of Process: Actual Notice / Proper Service
Service by Fraud
Waiver of the Right
Appointing an Agent for Receipt of Service of Process
Serving Other Process [than Notice]
Counsel............................................................................................................................... 1
A Fundamental Right & Its Limits
Example: Criminal Proceedings
Example: Quasi-Criminal Proceedings
Example: Civil Proceedings
Example: Administrative Proceedings
Judicial Discretion
Challenges .......................................................................................................................... 1
Defense from Violation of Due Process
INJUNCTION
1
The Spectrum ..................................................................................................................... 1
Extraordinary
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Temporary Restraining Order, Ex Parte (Rule 65(b)(1–))
Temporary Restraining Order (Rule 65(b)(2–))
Preliminary Injunction (Rule 65(a))
Ordinary
Permanent Injunction
Collaterality & Contempt ................................................................................................. 2
Collateral Bar Rule
“An injunction […] must be obeyed, however erroneous.”
“Defendants are precluded from attacking it in a collateral proceeding.”
Limits: Due Process & Federal Preemption
Exceptions
PLEADING
2
Complaint .......................................................................................................................... 2
Short & Plain, Yet Sufficient (Rule 8)
Defects & Amendments
Debate on Standards
Notice Pleading
Plausibility Pleading
Affirmation of Plausibility Pleading
In the Alternative (Rule 8(d))
Inconsistencies & Contradictions
Response ............................................................................................................................. 2
Proper Formulation (Rules 7, 8, 12)
Waiver
Fair Denial is Specific
Affirmative Defense: Identification
Affirmative Defense: Preventing Unfair Surprise
Affirmative Defense: Burden to Pleader
Scope of Pleadings Defines Scope of Admissible Evidence—Pleadings Shape Proof
Amendment ....................................................................................................................... 2
Free Mulligan (Rule 15(a)(1))
Amending as a Matter of Course
Leave to Amend (Rule 15(a)(2))
New Parties
Statute of Limitations
Original Transaction/Occurrence
Continuing Violation
Statute of Limitations & Equitable Estoppel
Denying Amendments
JURISDICTION
2
Personal .............................................................................................................................. 2
General
In Personam: Presence & “Gotcha!”
In Personam: Presence of Corporate Representative
In Personam: Corporate Direction
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In Personam: “Systematic & Continuous” Activities
In Personam: Long-Arm Statutes & “Implied Consent”
In Personam: Consent, Voluntary Submission, Default Judgment, Collateral Proceedings
Quasi in Rem: An Historical Footnote (Pennoyer v. Neff)
Quasi in Rem: Modern Limits
General or Only Specific?
Insufficient Contacts: Transactions
Insufficient Contacts: Transactions, Travel, Training
Specific
Relatedness: “Arising From”
From Seizure of Person to Service of Process
Minimum Contacts
Purposeful Availment as Minimum Contact
Commercial Contract as Minimum Contact
Tortious Conduct as Minimum Contact
Harmful Effects—Apart from Causes—as Minimum Contacts
Family Matters: Purposeful Availment & Minimum Contacts
Reasonableness
Defendants from Abroad
Challenges
Material............................................................................................................................... 3
Finding Jurisdiction
Sua Sponte Challenges
Investigating Propriety of Jurisdiction
Diversity of Citizenship
Minimum Amount in Controversy
When Diversity Obtains
Burden of Establishing Diversity
Establishing Domicile
Corporate Cooperation to Create Diversity
Corporate “Nerve Center”
Stateless Persons
Changing Parties
“Arising Under”
Any Ingredient
Necessary & Substantial Federal Issue Embedded Beneath State-Law Claims
Necessary & Substantial Federal Issue Raised in Well-Pleaded Complaint
The Modern Standard: Well-Pleaded Complaint
Operation of the Declaratory Judgment Act
Federal Cause of Action
Federal Cause of Action + Explicit Federal Right + Federal Remedy
Forum Selection ................................................................................................................. 3
Validity within the Negotiation Context
Tickets as Contracts of Adhesion
DECISION
3
Entering a Federalized Judiciary ........................................................................................ 3
Overlapping Jurisdictions
Jurisdictions: General / Limited
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Supplemental Jurisdiction
Removal to the Federal Judiciary
Substance & Procedure: State or Federal?
Formalism: Procedure from State, Substance (Common Law) from Nation
Realism: Substance from State, Procedure from Federal Rules
Substance/Procedure: The “Outcome Determinative” Test
Substance/Procedure: Admitting the Thorniness of the Question
Federal Rules of Civil Procedure
Statutes of Limitations
Limits of Rights, Advantages in Recovery, Forum Shopping
Judge & Jury
Forum-Selection Clause
Federal Preemption
Pretrial Disposal ................................................................................................................. 4
Summary Judgment (Rule 56)
Moving
Bifurcated Path
Moving Sua Sponte
Burden & Standard
Supporting the Motion
Defending against the Motion
Drawing Inferences & Recognizing Genuine Issues
Failure to Make a Sufficient Showing of an Essential Element
Appellate Review
Outcomes ........................................................................................................................... 4
Judgment as a Matter of Law
Judgment Notwithstanding the Verdict
Reweighing the Verdict Findings
Harmonizing the Verdict Findings
New Trial (Rules 59–60)
Appellate Review: None
Law of the Case .................................................................................................................. 4
Res Judicata
DISCOVERY
4
Preparation ......................................................................................................................... 4
Litigation Hold
Affirmative Duty against “Spoilation of Evidence”
Scope................................................................................................................................... 4
What is Discoverable (Rule 26(a))
Cost of Discovery
Concentric Circles of Relevance
The Modern Standard
Purpose of Discovery
Subpoena Duces Tecum
What is Not Discoverable (Rule 26(b))
Material Previously Protected
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Rationale for Exceptions to Discovery
The Privileged Work of Counsel
Attorney–Client Privilege: The Purpose
Attorney–Client Privilege: The Test
Attorney–Client Privilege: Posthumous Extension
Attorney–Client Privilege: Corporations & Their Agents
Attorney–Client Privilege: Facts/Communication
Attorney–Client Privilege: Crime/Fraud Exception & In-Camera Review
Work-Product Protection
Attorney–Client/Work-Product
Depositions
SANCTION
5
Grounds.............................................................................................................................. 5
History of Amendments
1983 Amendment
1993 Amendment
Modern Standard (Rule 11)
Arguing to Change the Law
What is Sanctionable
Who is Sanctionable
Due Diligence
Signature & Its Role
Appeal & Review ............................................................................................................... 5
Deference to Discretion
How Little? How Much?
ALTERNATIVE DISPUTE RESOLUTION
5
Private Justice ..................................................................................................................... 5
To What End?
By What Means?
Arbitration .......................................................................................................................... 5
Scope
Arbitrability as a Question for Judicial Determination
Prior Agreement to Enter Arbitration
Statutory Claims
Third Parties
Collective Bargaining
Commerce
Enforceability
Complexity
Appealability
Challenging Propriety of Arbitration
Challenging Substance of the Settlement
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FOREWORD
Spaulding’s Exam Tips
TYPES OF EXAMS
(a) kitchen sink: field all kinds of issues within a messy fact pattern
(b) core–periphery: catch not only the big issue but also the little ones (the tiny issue may
determine proper interpretation of the more-obvious one)
(c) “Luke Skywalker”: the facts lie between existing precedents, so the responder must argue
persuasively by analogy without freezing to find the perfect solution
STEPS TO A SUCCESSFUL ANSWER
1. Heed the call of the question—what does the prompt ask?
2. Go: (i) spot issues, (ii) resolve them, (iii) observe, (iv) reassess the facts, (v) write
- give the short answer first
- account for counterarguments
- be confident—reasonable but not equivocal/ambivalent
- neglect no material fact
The American Way
AN ADVERSARIAL SYSTEM
Structure
The central precept of the adversary process [
- utilization of a neutral and passive fact finder,
- reliance on party presentation of evidence, and
- use of a highly structured forensic procedure
] is that out of the sharp clash of proofs presented by adversaries in a highly structured forensic
setting is most likely to come the information upon which a neutral and passive decision maker
can base the resolution of a litigated dispute acceptable to both the parties and society.
Because its structures always stand ready to be mobilized, adversarial legalism—lawyer-dominated,
perennially costly contestation—is a barely latent, easily triggered potentiality in virtually all
contemporary American political, economic, and administrative processes.
Interpretation
American adversarial legalism, therefore, can be viewed as arising from a fundamental tension
between two powerful elements:
- first, a political culture that expects and demands comprehensive governmental protections
from serious harm, injustice, and environmental dangers—and hence, a powerful, activist
government—and,
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- second, a set of governmental structures that reflect mistrust of concentrated power and hence
that limit and fragment political and governmental authority.
Implications
One of the most significant implications of the American adoption of the principles of neutrality
and passivity is that it tends to commit the adversary system to the objective of resolving disputes
rather than searching for material truth.
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DUE PROCESS
Deprivation of Life, Liberty, Property
WHAT IS AT STAKE? BY WHOSE ACTIONS?
The first step in due process analysis is to determine whether life, liberty, or property is at stake.
Only the government is required by the Constitution to render due process in its dealings, so the
second part of the due process calculus is determining whether there is government action.
Temporary Impairment of Property
Connecticut v. Doehr, 501 U.S. 1 (1991)
Any significant taking of property by the state is within the purview of the Due Process Clause.
[…] Even the temporary or partial impairments to property rights that attachments, liens, and
similar encumbrances entail are sufficient to merit due process protection.
Garnishment of Wages
Sniadach v. Family Finance of Bay View, 395 U.S. 337 (1969)
Prejudgment garnishment of wages, with its obvious taking of property without notice and prior
hearing, violates the fundamental principles of procedural due process.
Deprivation of Property, Due-Process Exceptions
Fuentes v. Shevin, 407 U.S. 67 (1972)
The Fourteenth Amendment’s protection of “property” has never been interpreted to safeguard
only the rights of undisputed ownership. Rather, it has been read broadly to extend protection to
any significant property interest.
A temporary, nonfinal deprivation of property is nonetheless a “deprivation” in the terms of the
Fourteenth Amendment […].
There are “extraordinary situations” that justify postponing notice and opportunity for a hearing.
These situations, however, must be truly unusual. Only in a few limited situations have courts
allowed outright seizure without opportunity for a prior hearing.
- First, in each case, the seizure has been directly necessary to secure an important governmental or
general public interest.
- Second, there has been a special need for very prompt action.
- Third, the state has kept strict control over its monopoly of legitimate force: the person initiating
the seizure has been a government official responsible for determining, under the standards of a
narrowly drawn statute, that it was necessary and justified in the particular instance.
Deprivation of Liberty
Hamdi v. Rumsfeld, 542 U.S. 507 (2004)
The most elemental of liberty interests is the interest in being free from physical detention by
one’s own government. Freedom from bodily restraint has always been at the core of the liberty
protected by the Due Process Clause from arbitrary governmental action.
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Commitment for any purpose constitutes a significant deprivation of liberty that requires due
process protection[; … t]he United States Supreme Court reaffirms the fundamental nature of a
citizen’s right to be free from involuntary confinement by his own government without due
process of law.
HOW DO THE INTERESTS BALANCE?
If the question regards a hearing, then we must use the Mathews balancing test, making an ex ante
presumption in favor of hearing (with the obvious exception of wartime scenarios).
Mathews v. Eldridge, 424 U.S. 319 (1976)
Due process is flexible and calls for such procedural protections as the particular situation
demands. Accordingly, resolution of the issue whether the administrative procedures are
constitutionally sufficient requires analysis of the governmental and private interests that are
affected. More precisely, identification of the specific dictates of due process generally requires
consideration of three distinct factors:
1. First, the private interest that will be affected by the official action;
- degree of potential deprivation
- possible length of wrongful deprivation
2. Second, the risk of an erroneous deprivation of such interest through the procedures used, and
the probable value, if any, of additional or substitute procedural safeguards; and
- fairness and reliability of the existing procedures, and the probable value, if any, of
additional procedural safeguards
3. Finally, the government’s interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute procedural requirement would entail.
- administrative burden and other societal costs
At some point the benefit of an additional safeguard to the individual affected by the
administrative action and to society in terms of increased assurance that the action is just, may be
outweighed by the cost.
The judicial model of an evidentiary hearing is neither a required, nor even the most effective,
method of decisionmaking in all circumstances. The essence of due process is the requirement that
a person in jeopardy of serious loss be given • notice of the case against him and • opportunity
to meet it. All that is necessary is that the procedures be tailored, in light of the decision to be
made, to the capacities and circumstances of those who are to be heard, to insure that they are
given a meaningful opportunity to present their case.
WHY? TO WHAT END?
The values of due process are, according to Professor Spaulding
1. accuracy—we want a procedure to respect the security and integrity of the accused
2. dignity—similarly, we want one to participate in one’s own proceedings and condemnation
3. equality—we want to treat everyone to the presumption of innocence
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Notice & Hearing
CHALLENGING DETENTION
Habeas Corpus
Hamdi v. Rumsfeld, 542 U.S. 507 (2004)
Absent suspension, the writ of habeas corpus remains available to every individual detained within
the United States. [… D]ue process demands that a citizen held in the United States […] be given •
a meaningful opportunity to contest the factual basis for that detention • before a neutral
decisionmaker.
Congress envisioned [in 28 U.S.C.S. § 2241] that habeas petitioners would have some opportunity
to present and rebut facts and that courts retain some ability to vary the ways in which they do so
as mandated by due process.
NOTICE VIA SERVICE OF PROCESS (RULE 4)
Originally, Rule 4 provided no service but in-hand delivery by a federal marshal; today, notice may
arrive in the mail; tomorrow, the norm may be electronic. Proper service requires:
- proper methods/procedure,
- proper substance/contents (complaint + summons),
- proper jurisdiction.
Rule 4 requirements are to be strictly observed; still, by United States v. McLaughlin, 470 F.3d
698, 7th Cir. 2006: “If good cause for the delay is shown, the court must extend the time for
service, while if good cause is not shown, the court has a choice between dismissing the suit and
giving the plaintiff more time.” When a delay in service causes zero prejudice to the defendant or
third parties (or to the court itself), the granting of extensions of time for service, whether before
or after the 120-day period has expired, cannot be an abuse of discretion.
Courts are generally sympathetic to plaintiffs trying to serve elusive defendants.
Actual notice, though not irrelevant in procedural disputes, does not replace proper service.
Exception: Immunity-From-Process
There is common law immunity-from-process rule of long standing to protect witnesses who come
from outside the jurisdiction to testify in cases unrelated to the one in which some plaintiff seeks
to serve them. Because the purpose is to encourage people to appear and testify, many courts have
refused to apply this common law standard to litigants themselves (who have incentives for
appearing) or to witnesses who appear voluntarily rather than under subpoena.
This immunity is not a right of the person sought but rather a privilege at the discretion of the
trial court.
Reasonable Calculation to Apprise
Mullane v. Central Hanover Trust, 339 U.S. 306 (1950)
An elementary and fundamental requirement of due process […] is notice reasonably calculated,
under all the circumstances, to
- apprise interested parties of the pendency of the action and
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- afford them an opportunity to present their objections.
The notice must be of such nature as
- reasonably to convey the required information, and it must afford a
- reasonable time for those interested to make their appearance.
But if with due regard for the practicalities and peculiarities of the case these conditions are
reasonably met, the constitutional requirements are satisfied.
Efficient Enhancement of Notice Procedure
Greene v. Lindsey, 456 U.S. 444 (1982)
Certain less rigorous notice procedures than personal service of process have enjoyed substantial
acceptance […;] judicial proceedings may be prosecuted in some situations on the basis of
procedures that do not carry with them the same certainty of actual notice that inheres in personal
service. However, the Due Process Clause does prescribe a constitutional minimum: [Mullane,
supra.]
Short of providing personal service, posting notice on the door of a person's home would, in many
or perhaps most instances, constitute not only a constitutionally acceptable means of service, but
indeed a singularly appropriate and effective way of ensuring that a person who cannot
conveniently be served personally is actually apprised of proceedings against him.
Where an inexpensive and efficient mechanism, such as mail service, is available to enhance the
reliability of an otherwise unreliable notice procedure, a state's continued exclusive reliance on
an ineffective means of service is not notice reasonably calculated to reach those who could easily
be informed by other means at hand.
Actual Notice, Failure of Notice
Jones v. Flowers, 547 U.S. 220 (2006)
Due process does not require that a property owner receive actual notice before the government
may take his property.
If a feature of the state’s chosen procedure is that it promptly provides additional information to
the government about the effectiveness of notice, then it does not contravene the ex ante principle
to consider what the government does with that information in assessing the adequacy of the
chosen procedure.
When mailed notice of a tax sale is returned unclaimed, the State must take additional reasonable
steps to attempt to provide notice to the property owner before selling his property, if it is
practicable to do so.
Dwelling & Residence
National Development v. Triad Holding & Adnan Khashoggi, 930 F.2d 253 (2d Cir. 1991)
A person can have two or more “dwelling houses or usual places of abode”, provided each contains
sufficient indicia of permanence.
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Constructing the Rules of Service of Process: Actual Notice / Proper Service
Mid-Continent Wood Products v. Harris, 936 F.2d 297 (7th Cir. 1991)
A liberal construction of the rules of service of process cannot be utilized as a substitute for the
plain legal requirement as to the manner in which service of process may be had.
Valid service of process is necessary in order to assert personal jurisdiction over a defendant.
Moreover, a defendant’s actual notice of the litigation is insufficient to satisfy Rule 4.
The extent to which a plaintiff tries to serve process should not be a factor as to whether a federal
court has personal jurisdiction over a defendant. Rather, the requirements of Rule 4 are satisfied
only when the plaintiff is successful in serving the complaint and summons on the defendant.
Service by Fraud
Wyman v. Newhouse, 93 F.2d 313 (2d Cir. 1937)
A judgment procured fraudulently lacks jurisdiction and is null and void.
[By reason of the Full Faith and Credit Clause a] judgment recovered in a sister state, through the
fraud of the party procuring the appearance of another, is not binding on the latter when an
attempt is made to enforce such judgment in another state.
WAIVER OF THE RIGHT
Appointing an Agent for Receipt of Service of Process
National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311 (1964)
Under Rule 4(d)(1), which permits personal service on an individual by delivery of a copy of the
summons and complaint to the individual’s “agent authorized by appointment or by law to receive
service of process”, the act of one designated in a lease contract as the lessees’ agent for receipt of
process in accepting the summons and complaint and promptly transmitting them to the lessees is
itself sufficient to validate the agency, even though there was no explicit previous promise on her
part to do so.
SERVING OTHER PROCESS [THAN NOTICE]
Rule 4.1
“In general, process—other than a summons under Rule 4 or a subpoena under Rule 45—must be
served by a United States marshal or deputy marshal or by a person specially appointed for that
purpose. …”
See also Rule 5 on serving pleadings and other papers.
Counsel
A FUNDAMENTAL RIGHT & ITS LIMITS
Example: Criminal Proceedings
Gideon v. Wainwright, 372 U.S. 335 (1963)
The Sixth Amendment provides: In all criminal prosecutions, the accused shall enjoy the right to
have the assistance of counsel for his defense. The court construes this to mean that in federal
courts counsel must be provided for defendants unable to employ counsel unless the right is
competently and intelligently waived.
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The court concludes that certain fundamental rights, safeguarded by the first eight amendments
against federal action, are also safeguarded against state action by the due process of law clause of
the Fourteenth Amendment, and among them the fundamental right of the accused to the aid of
counsel in a criminal prosecution.
The right to be heard would be, in many cases, of little avail if it did not comprehend the right to
be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill
in the science of law.
- If charged with crime, he is incapable, generally, of determining for himself whether the
indictment is good or bad.
- He is unfamiliar with the rules of evidence.
Left without the aid of counsel he may be put on trial without a proper charge, and convicted
upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible.
- He lacks both the skill and knowledge adequately to prepare his defense, even though he have a
perfect one.
- He requires the guiding hand of counsel at every step in the proceedings against him. Without it,
though he be not guilty, he faces the danger of conviction because he does not know how to
establish his innocence.
Example: Quasi-Criminal Proceedings
Gagnon v. Scarpelli, 411 U.S. 18 (1973)
Probation revocation, like parole revocation, is not a stage of a criminal prosecution, but does
result in a loss of liberty. […] Counsel is required at every stage of a criminal proceeding where
substantial rights of a criminal accused may be affected. Sentencing is one such stage. […] A
probationer is entitled to be represented by appointed counsel at a combined revocation and
sentencing hearing.
Example: Civil Proceedings
Lassiter v. Dep’t of Social Services, 452 U.S. 18 (1981)
As a litigant’s interest in personal liberty diminishes, so does his right to appointed counsel. […]
The United States Supreme Court has refused to extend the right to appointed counsel to include
prosecutions which, though criminal, do not result in a defendant’s loss of personal liberty.
If, in a given case, the parent’s interests are at their strongest, the State’s interests are at their
weakest, and the risks of error are at their peak, it could [] be said that the Eldridge [i.e. Mathews]
factors [] overcome the presumption against the right to appointed counsel, and that due process
does [] therefore require the appointment of counsel. But since the Eldridge [i.e. Mathews] factors
will not always be so distributed, and since due process is not so rigid as to require that the
significant interests in informality, flexibility, and economy must always be sacrificed, neither can
the court say that the Constitution requires that appointment of counsel in every parental
termination proceeding.
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Example: Administrative Proceedings
Walters v. Nat’l Ass’n of Radiation Survivors, 473 U.S. 305 (1985)
[A statute limiting to $10 a provision for lawyer fees in proceedings for veteran benefits] does not
violate the Due Process Clause of the Fifth Amendment.
(a) Invalidation of the fee limitation would frustrate Congress’ principal goal of wanting the
veteran to get the entirety of the benefits award without having to divide it with an attorney.
Invalidation would also complicate a process that Congress wished to be as informal and
nonadversarial as possible.
(b) It would take an extraordinarily strong showing of probability of error in the VA’s present
benefits claim procedures—and the probability that the presence of attorneys would sharply
diminish that possibility—to warrant a holding that the fee limitation denies claimants due process
of law. No such showing was made out on the record before the District Court in this case. In light
of the Government interests at stake, the evidence before the District Court as to the success rates
in claims handled with or without lawyers shows no such great disparity as to warrant the inference
that the fee limitation violates the Due Process Clause of the Fifth Amendment.
The situation that gives rise to this discussion is (a) increase in civil rights legislation and jurisprudence and (b)
increase in government activity and service. Probably, this revolution should have led one to believe that
Lassiter would prove the civil Gideon—the case instead ends the progressive evolution.
Judicial Discretion
Gagnon v. Scarpelli, 411 U.S. 18 (1973)
The decision as to the need for counsel […] must be made on a case-by-case basis in the exercise of
a sound discretion by the state authority charged with responsibility for administering the
probation and parole system. […] Considerable discretion must be allowed the responsible agency
in making the decision of whether to proved counsel […].
Challenges
DEFENSE FROM VIOLATION OF DUE PROCESS
Rule 12(b)
These enumerated defenses must be raised in the responsive pleading.
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INJUNCTION
The Spectrum
Injunction is available only when remedy at law is inadequate—that is, when monetary damages do
not suffice. This test is called the “test of irreparability”, and it regards the “balance of hardships”
between the parties.
EXTRAORDINARY
For pretrial relief, the court adds to its evaluation of the balance of hardships the likelihood of the
moving party’s eventual victory on the merits of the case
Temporary Restraining Order, Ex Parte (Rule 65(b)(1–))
Available when the irreparable harm is immediate. The court adds to its evaluation the following
the impossibility of prior notification to other side of hearing for restraining order.
Temporary Restraining Order (Rule 65(b)(2–))
Available when the irreparable harm is immediate.
Preliminary Injunction (Rule 65(a))
Available when the court must preserve the status quo until reaching a final determination.
ORDINARY
Permanent Injunction
Available when the plaintiff wins at trial on the fundamental condition.
Collaterality & Contempt
COLLATERAL BAR RULE
“An injunction […] must be obeyed, however erroneous.”
Howat v. Kansas, 258 U.S. 181 (1922)
An injunction
- duly issuing out of a court of general jurisdiction with equity powers,
- upon pleadings properly invoking its action, and
- served upon persons made parties therein and within the jurisdiction,
must be obeyed by them, however erroneous the action of the court may be, even if the error be
in the assumption of the validity of a seeming, but void law going to the merits of the case.
It is for the court of first instance to determine the question of the validity of the law, and until its
decision is reversed for error by orderly review […] its orders based on its decision are to be
respected, and disobedience of them is contempt of its lawful authority […].
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“Defendants are precluded from attacking it in a collateral proceeding.”
Walker v. Birmingham, 388 U.S. 307 (1967)
If a trial court has general power to issue injunctions in equity, even if its exercise of the power
was erroneous, the injunction is not void, and defendants are precluded from attacking it in a
collateral proceeding.
If the injunction is erroneous, jurisdiction is not thereby forfeited, and the error is subject to
correction only by the ordinary method of appeal, and disobedience to the order constitutes
contempt.
(Civil liberties, as guaranteed by the United States Constitution, imply the existence of an
organized society maintaining public order without which liberty itself would be lost in the
excesses of unrestrained abuses. The authority of a municipality to impose regulations in order to
assure the safety and convenience of the people in the use of public highways has never been
regarded as inconsistent with civil liberties but rather as one of the means of safeguarding the good
order upon which they ultimately depend.)
Limits: Due Process & Federal Preemption
In Re Green, 369 U.S. 689 (1962)
Procedural due process requires that one charged with contempt of court
- be advised of the charges against him,
- have a reasonable opportunity to meet them by way of defense or explanation,
- have the right to be represented by counsel, and
- have a chance to testify and call other witnesses in his behalf, either by way of defense or
explanation.
A state court is without power to hold one in contempt for violating an injunction that the state
court had no power to enter by reason of federal preemption.
Exceptions
Collateral processes can consider substantive issues, but not as a first resort. Exceptions to the rule:
- lack of personal jurisdiction (combined with prior motion to dissolve/vacate?)
- prima facie invalidity
- first impression/experience (in Walker, the demonstrators had experienced lawyers)
- futility of compliance, undue delay/frustration
In Re Green seems to raise an exception for federal preemption; contrarily, Walker v. Birmingham precludes
consideration of constitutional merit, which seems no less a ground for exception than is federal preemption.
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PLEADING
Complaint
SHORT & PLAIN, YET SUFFICIENT (RULE 8)
Defects & Amendments
Two defects in pleading are possible:
- the complaint is insufficiently detailed to allege the violation of an existing, valid law (factual
deficiency);
- the complaint fails to state a claim because no law exists, at the moment, to support plaintiff’s
claim (legal deficiency).
Only in the former may the plaintiff amend; in the latter, the only recourse is appeal.
Remark that the complaint may contain not only too little detail but also too much of it!
Debate on Standards
Technicalities vs. Merits
Levels of likelihood: impossibility–suspicion–possibility–plausibility–probability (preponderance
of the evidence)–clarity (clear & convincing evidence)–certainty (beyond a reasonable doubt)
Purposes: notifying defendants • focusing issues • screening cases
Rule 8 requires a “short, plain statement”; interpretation of this standard affects Rule 26.
Rule 9 stipulates limited occasions for “heightened pleading”.
As a matter of policy, the Court concerns itself increasingly with judicial efficiency. By raising the
standard of pleading, the Court shifts the burden of discovery to pretrial investigation,
simultaneously shifting costs to the plaintiff. The result is that fewer cases enter the judiciary.
The Court is, however, currently debating the reestablishment of the notice standard of pleading.
Notice Pleading
Conley v. Gibson, 355 U.S. 41 (1957)
This standard emphasizes eventual accuracy over immediate efficiency.
The Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon
which he bases his claim. To the contrary, all the Rules require is a short and plain statement of
the claim that will give a defendant fair notice of what a plaintiff's claim is and the grounds upon
which it rests. Rule 8(a)(2).
Such simplified “notice pleading” is made possible by the liberal opportunity for discovery and
the other pretrial procedures established by the Rules to disclose more precisely the basis of both
claim and defense and to define more narrowly disputed facts and issues.
A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt
that a plaintiff can prove no set of facts in support of his claim which would entitle him to relief.
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Assume, arguendo, all the allegations to see whether the plaintiff’s case has merit. The complaint need not
contain information to cast doubt on the alternative, innocent explanation. Nota bene the “no set of facts”
operative phrase, which Twombly overturns.
Plausibility Pleading
Bell Atlantic v. Twombly, 550 U.S. 544 (2007)
This standard emphasizes immediate efficiency over eventual accuracy.
The “no set of facts” language […] is best forgotten as an incomplete, negative gloss on an accepted
pleading standard: once a claim has been stated adequately, it may be supported by showing any
set of facts consistent with the allegations in the complaint. Conley described the breadth of
opportunity to prove what an adequate complaint claims, not the minimum standard of adequate
pleading to govern a complaint’s survival.
When an innocent inference is possible as a parallel explanation for the facts in the complaint the Court will
require a bit of extra evidence, namely, something to throw some doubt upon the innocent inference by
comparison with the allegation in the complaint.
A district court must retain the power to insist upon some specificity in pleading before allowing
a potentially massive factual controversy to proceed.
When a complaint adequately states a claim, it may not be dismissed based on a district court’s
assessment that the plaintiff will fail to find evidentiary support for his allegations or prove his
claim to the satisfaction of the factfinder.
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more
than labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do. Factual allegations must be enough to raise a right to relief above the speculative level.
The standard for evaluating the merits seems to fall just above conceivable but just below probable.
Asking for plausible grounds to infer [merits of the plaintiff’s case] does not impose a probability
requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation
that discovery will reveal evidence of [the merits of the case].
[A] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those
facts is improbable, and that a recovery is very remote and unlikely.
Twombly seems to import the same standard by which a judge may take a case from the jury at the end of
trial, applying that heightened standard to block a case from entering even discovery.
Affirmation of Plausibility Pleading
Ashcroft v. Iqbal, 556 U.S. 662 (2009)
This case leaves unclear whether the “innocent inference”, to invalidate the complaint, must be the obvious
inference or only more likely than the “guilty inference”.
The pleading standard Rule 8 announces does not require detailed factual allegations, but it
demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation. A pleading
that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will
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not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual
enhancement.
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.
The plausibility standard is not akin to a probability requirement, but it asks for more than a
sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are
merely consistent with a defendant’s liability, it stops short of the line between possibility and
plausibility of entitlement to relief.
The tenet that a court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice. Although for the purposes of a motion to
dismiss courts must take all of the factual allegations in the complaint as true, they are not
bound to accept as true a legal conclusion couched as a factual allegation.
A court considering a motion to dismiss can choose to begin by identifying pleadings that, because
they are no more than conclusions, are not entitled to the assumption of truth. While legal
conclusions can provide the framework of a complaint, they must be supported by factual
allegations. When there are well-pleaded factual allegations, a court should assume their veracity
and then determine whether they plausibly give rise to an entitlement to relief.
IN THE ALTERNATIVE (RULE 8(D))
Inconsistencies & Contradictions
McCormick v. Kopman, 161 N.E.2d 720 (1959)
Where the pleading is in the alternative in different counts, each count stands alone and the
inconsistent statements contained in a count cannot be used to contradict statements in another
count. […] It is not ground for dismissal of a complaint that allegations in one count contradict
those in an alternative count. […] Alternative fact allegations made in good faith and based on
genuine doubt are not admissions against interest so as to be admissible in evidence against the
pleader.
If the plaintiff is in doubt as to the person from whom he is entitled to redress, he may join two or
more defendants, and state his claim against them in the alternative in the same count or plead
separate counts in the alternative against different defendants, to the intent that the question
which, if any, of the defendants is liable, and to what extent, may be determined as between the
parties.
When a party is in doubt as to which of two or more statements of fact is true, he may, regardless
of consistency, state them in the alternative or hypothetically in the same or different counts or
defenses, whether legal or equitable. A bad alternative does not affect a good one.
Inconsistent evidence that is adduced from alternative counts of a complaint will not bar
submission of the case to the jury, and such evidence does not warrant ipso facto a directed verdict
or judgment notwithstanding the verdict.
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Alternative pleading is not permitted when in the nature of things the pleader must know which
of the inconsistent averments is true and which is false.
Response
PROPER FORMULATION (RULES 7, 8, 12)
Rule 8(b)
- Deny the factual allegations
- Concede facts and law but assert affirmative defense
- Move to dismiss for failure to state a claim
- Challenge jurisdiction
- Counterclaim
Motions ask the court to take specific action and include four parts:
- notice,
- motion,
- certificate of service,
- memorandum in support of motion.
Lawyers should try to ensure that both filing and service take place within the limiting timeframe.
Waiver
Some motions and defenses must arise in the initial pleadings, else the defendant waives them.
Some affirmative defenses should, to be safe, appear both in pre-answer motions and in answers,
lest the defenses be deemed waived.
See Rule 12(h).
Fair Denial is Specific
Zielinkski v. Philadelphia Piers, 139 F. Supp. 408 (E.D. Pa. 1956)
Denials shall fairly meet the substance of the averments denied. When a pleader intends in good
faith to deny only a part or a qualification of an averment, he shall specify so much of it as is true
and material and shall deny only the remainder.
Affirmative Defense: Identification
Ingraham v. U.S., 808 F.2d 1075 (5th Cir. 1987)
Pertinent to the analysis of whether a given defense is affirmative is the logical relationship
between the defense and the cause of action asserted by the plaintiff. This inquiry requires a
determination
(1) whether the matter at issue fairly may be said to constitute a necessary or extrinsic element in
the plaintiff's cause of action;
(2) which party, if either, has better access to relevant evidence; and
(3) policy considerations: should the matter be indulged or disfavored.
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See also Rule 8(c).
Affirmative Defense: Preventing Unfair Surprise
Ingraham v. U.S., 808 F.2d 1075 (5th Cir. 1987)
Central to requiring the pleading of affirmative defenses is the prevention of unfair surprise. A
defendant should not be permitted to lie behind a log and ambush a plaintiff with an unexpected
defense. […] Where an affirmative defense is raised in the trial court in a manner that does not
result in unfair surprise, technical failure to comply with Rule 8(c) is not fatal.
Affirmative Defense: Burden to Pleader
Gomez v. Toledo, 446 U.S. 635 (1980)
[T]he burden of pleading [a defense] rests with the defendant.
If the pleader has an opportunity to respond with new evidence the court may allow amendment of otherwisewaived affirmative defense, but judicial efficiency takes interest in upholding the waiver.
Scope of Pleadings Defines Scope of Admissible Evidence—Pleadings Shape Proof
Fuentes v. Tucker, 187 P.2d 752, (1947)
In this case, both sides have strategic interests in delaying the admission of guilt.
Evidence which is not pertinent to the issues raised by the pleadings is immaterial, and it is error
to allow the introduction of such evidence.
If an issue has been removed from a case by an admission in the answer, it is error to receive
evidence which is material solely to the excluded matter.
The introduction of evidence of admitted facts is permissible in cases where the admission is
ambiguous in form or limited in scope or where, during the trial of a case, a party seeks to deprive
his opponent of the legitimate force and effect of material evidence by the bald admission of a
probative fact.
Amendment
FREE MULLIGAN (RULE 15(A)(1))
Amending as a Matter of Course
A party may amend its pleading once as a matter of course. See Rule 15 for specifics and stipulations.
LEAVE TO AMEND (RULE 15(A)(2))
By the liberal spirit of notice pleading, parties should be able to adjust their claims and defenses
as they learn the details of the dispute, and cases should be decided on their merits rather than
technicalities.
Supreme Court: “In the absence of any apparent or declared reason—such as undue delay, bad
faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of
the amendment, futility of he amendment, etc.—the leave sought should, as the rules require, be
‘freely given’.”
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New Parties
Nelson v. Adams, 529 U.S. 460 (2000)
When a court grants leave to amend to add an adverse party after the time for responding to the
original pleading has lapsed, the party so added is given 10 days after service of the amended
pleading to plead in response. This opportunity to respond, fundamental to due process, is the
echo of the opportunity to respond to original pleadings secured by Rule 12.
When the identity of the defendant is mistaken, the requirement is that the real party must have been aware
within the period described in Rule 15(c) that, but for an error, the original pleading would have named him
as the defendant.
STATUTE OF LIMITATIONS
Original Transaction/Occurrence
Barcume v. Flint, 819 F. Supp. 631 (E.D. Mich. 1993)
An amendment of a pleading relates back to the date of the original pleading when the claim
asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth
or attempted to be set forth in the original pleading. Rule 15(c)(2). The effect of this rule is that
once litigation involving particular conduct or a given transaction or occurrence has been
instituted, the parties are not entitled to the protection of the statute of limitations against the
later assertion by amendment of defenses or claims that arise out of the same conduct, transaction,
or occurrence as set forth in the original pleading.
Amendments to pleadings that merely correct technical deficiencies or expand or modify the facts
alleged in the earlier pleading meet the Rule 15(c) test and will relate back. Amendments that do
no more than restate the original claim with greater particularity or amplify the details of the
transaction alleged in the preceding pleading fall within Rule 15(c). But, if the alteration of the
original statement is so substantial that it cannot be said that the defendant was given adequate
notice of the conduct, transaction, or occurrence that forms the basis of the claim or defense,
then the amendment will not relate back and will be time barred if the limitations period has
expired.
The fact that an amendment changes the legal theory on which the action initially was brought is
of no consequence if the factual situation upon which the action depends remains the same and
has been brought to the defendant's attention by the original pleading. An amendment will not
relate back, however, if it asserts a new claim for relief based on different facts than set forth in
the original complaint.
See also Rule 15(c)(2).
Continuing Violation
Barcume v. Flint, 819 F. Supp. 631 (E.D. Mich. 1993)
The doctrine of continuing violation holds that discriminatory incidents which occur beyond the
limitations period are actionable where a plaintiff challenges not just one incident of unlawful
conduct but an unlawful practice that continues into the limitations period. In such cases the
complaint is timely when it is filed within the limitations period regarding the last asserted
occurrence of that practice.
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The effect of this doctrine is that a properly alleged continuing violation would excuse an untimely
filing with regard to particular instances of allegedly discriminatory conduct which were part of the
continuing violation but occurred outside the limitations period.
Statute of Limitations & Equitable Estoppel
Zielinkski v. Philadelphia Piers, 139 F. Supp. 408 (E.D. Pa. 1956)
When inaccurate statements are made under circumstances where there is foreseeable danger that
another will rely on them to his prejudice, and he does in fact rely thereon, such statements are
sufficient to invoke the equitable estoppel doctrine even though fraud is not present. […] The
doctrine of equitable estoppel will be applied to prevent a party from taking advantage of the
statute of limitations where the plaintiff has been misled by conduct of such party.
DENYING AMENDMENTS
Davis v. United States, 961 F.2d 53 (5th Cir. 1991)
An amendment was properly denied where the plaintiff sought to add claims that would have
required joinder of additional parties and complicated the litigation.
Cleveland v. Porca Co., 38 F.3d 289 (7th Cir. 1994)
Trial court properly denied a motion to amend to add a new claim for relief where defendant had
already filed witness and exhibit lists for trial and the deadline for amendments had passed.
Janicki Logging Co. V. Mateer, 42 F.3d 561 (9th Cir. 1994)
Trial court properly denied the amendment where the plaintiff was aware of its claims against the
additional defendant years before, where allowing the added party would deprive the court of
subject matter jurisdiction, and where plaintiff had failed to assert the additional claim earlier
for strategic reasons.
Jones v. Childers, 18 F.3d 899 (11th Cir. 1994)
The Circuit Court upheld the trial judge’s denial of the defendant’s motion, made a week before
the pretrial conference, to amend to add “a host of new affirmative defenses which would have
further complicated an already complex case and likely delayed the trial by necessitating the
reopening of discovery”.
Moore v. State of Indiana, 999 F.2d 1125 (7th Cir. 1993)
The court denied amendments to add claims against parties who could not be sued in federal
court under the Eleventh Amendment, and against whom the limitations period had already
expired.
Bell v. Allstate Life Ins. Co., 160 F.3d 452 (8th Cir. 1998)
The Court of Appeals held that the trial judge had not abused her discretion by denying an
amendment that would have added new theories after the deadline for motions, that involved
new factual and legal issues, and would have necessitated extending discovery deadlines.
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JURISDICTION
Personal
GENERAL
In Personam: Presence & “Gotcha!”
Burnham v. Superior Court of Cal., 495 U.S. 604 (1990)
The courts of a state have jurisdiction over nonresidents who are physically present in a state.
Each state has the power to hale before its courts any individual who can be found within its
borders, and that once having acquired jurisdiction over such a person by properly serving him
with process, a state can retain jurisdiction to enter judgment against him, no matter how fleeting
his visit. Where a party is within a territory, he may justly be subjected to its process, and bound
personally by the judgment pronounced, on such process, against him.
Jurisdiction based on physical presence alone constitutes due process because it is one of the
continuing traditions of the United States legal system that define the due process standard of
traditional notions of fair play and substantial justice.
In Personam: Presence of Corporate Representative
Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952)
If an authorized representative of a foreign corporation is physically present in the state of the
forum and is there engaged in activities appropriate to accepting service or receiving notice on its
behalf, there is no unfairness in subjecting that corporation to the jurisdiction of the courts of that
state through such service of process upon that representative.
In Personam: Corporate Direction
Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952)
The corporate activities of a foreign corporation which, under state statute, make it necessary for it
to secure a license and to designate a statutory agent upon whom process may be served provide a
helpful but not a conclusive test.
On the other hand, if the same corporation carries on, in that state, other continuous and
systematic corporate activities […]—consisting of directors’ meetings, business correspondence,
banking, stock transfers, payment of salaries, purchasing of machinery, &c.—those activities are
enough to make it fair and reasonable to subject that corporation to proceedings in personam in
that state, at least insofar as the proceedings in personam seek to enforce causes of action relating
to those very activities or to other activities of the corporation within the state.
In Personam: “Systematic & Continuous” Activities
(Goodyear Dunlop Tires Operations v. Brown, 131 S. Ct. 2846 (2011))
A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to
hear any and all claims against them when their affiliations with the State are so “continuous and
systematic” as to render them essentially at home in the forum State.
In Personam: Long-Arm Statutes & “Implied Consent”
Pennoyer v. Neff declared that a judgment entered without jurisdiction was unenforceable even
by the state that rendered it and even on property within the state’s borders. Given neither of in
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personam or in rem (e.g., in Pennoyer, given only quasi in rem) jursidiction, the defendant must
have given consent to be pursued in the forum State’s courts. From Pennoyer by way of “long-arm
statutes” has come the legal fiction of “implied consent”, which, for instance, makes one state
registrar a valid legal agent of motorists passing through Massachusetts.
In Personam: Consent, Voluntary Submission, Default Judgment, Collateral Proceedings
Ins. Corp. of Ir. v. Compagnie Des Bauxites De Guinee, 456 U.S. 694 (1982)
Because the requirement of personal jurisdiction represents first of all an individual right, it can,
like other such rights, be waived. Regardless of the power of the State to serve process, an
individual may submit to the jurisdiction of the court by appearance. A variety of legal
arrangements have been taken to represent express or implied consent to the personal jurisdiction
of the court.
The strategy of collateral attack entails purposefully suffering a default judgment in order to challenge
the jurisdiction of the forum; an alternative strategy confronts the case on its merits without submitting to the
jurisdiction of the forum, so that even after having lost, a defendant may challenge the original jurisdiction of
the case in appeal.
A defendant is always free to ignore the judicial proceedings, risk a default judgment, and then
challenge that judgment on jurisdictional grounds in a collateral proceeding. By submitting to the
jurisdiction of the court for the limited purpose of challenging jurisdiction, the defendant agrees
to abide by that court’s determination on the issue of jurisdiction: That decision will be res
judicata on that issue in any further proceedings.
In Rem: Presence of Tangibles (Hanson v. Denckla, 357 U.S. 235)
Founded on physical power, the in rem jurisdiction of a state court is limited by the extent of its
power and by the coordinate authority of sister states. The basis of the jurisdiction is the presence
of the subject property within the territorial jurisdiction of the forum state. Tangible property
poses no problem for the application of this rule, but the situs of intangibles is often a matter of
controversy.
The fact that the owner is or was domiciled within the forum state is not a sufficient affiliation
with the property upon which to base jurisdiction in rem.
Quasi in Rem: An Historical Footnote (Pennoyer v. Neff)
When there is a dispute over title, a writ of attachment symbolically seizes the property and gives the court in
rem jurisdiction to adjudicate the conflicting claims of ownership. Attachment was also the traditional basis
for quasi in rem jurisdiction, which allowed seizure of a defendant’s property even when the property was not
related to the claim before the court.
Quasi in Rem: Modern Limits
Burnham v. Superior Court of Cal., 495 U.S. 604 (1990)
[Q]uasi in rem jurisdiction and in personam jurisdiction, are really one and the same and must be
treated alike[. … Q]uasi in rem jurisdiction, that form of in personam jurisdiction based upon a
“property ownership” contact and by definition unaccompanied by personal, in-state service, must
satisfy litigation-relatedness.
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GENERAL OR ONLY SPECIFIC?
Insufficient Contacts: Transactions
Goodyear Dunlop Tires Operations v. Brown, 131 S. Ct. 2846 (2011)
In the personal jurisdiction context, a corporation’s continuous activity of some sorts within a
state is not enough to support the demand that the corporation be amenable to suits unrelated
to that activity.
- Mere purchases made in the forum State, even if occurring at regular intervals, are not
enough to warrant a State’s assertion of general jurisdiction over a nonresident corporation in a
cause of action not related to those purchase transactions.
- Even regularly occurring sales of a product in a State do not justify the exercise of
jurisdiction over a claim unrelated to those sales.
The commission of certain “single or occasional acts” in a State may be sufficient to render a
corporation answerable in that State with respect to those acts, though not with respect to matters
unrelated to the forum connections. […] As a rule [in cases involving “single or occasional acts”],
the Supreme Court has inquired whether there was some act by which the defendant purposefully
availed itself of the privilege of conducting activities within the forum State, thus invoking the
benefits and protections of its laws.
- Flow of a manufacturer’s products into the forum may bolster an affiliation germane to
specific jurisdiction. Where the sale of a product is not simply an isolated occurrence, but arises
from the efforts of the manufacturer or distributor to serve the market for its product in several
States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective
merchandise has there been the source of injury to its owner or to others. But ties serving to
bolster the exercise of specific jurisdiction do not warrant a determination that, based on those
ties, the forum has general jurisdiction over a defendant.
Insufficient Contacts: Transactions, Travel, Training
Helicopteros Nacionales De Colom. v. Hall, 466 U.S. 408 (1984)
Even when the cause of action does not arise out of or relate to the foreign corporation’s activities
in the forum state, due process is not offended by a state’s subjecting the corporation to its in
personam jurisdiction when there are sufficient contacts between the state and the foreign
corporation.
A foreign corporation’s contacts with the forum state are […] insufficient to allow the forum state
to assert [general] in personam jurisdiction over the foreign corporation […] where the foreign
corporation’s contacts with the forum state basically consist of
(a) sending its chief executive officer to the forum state for a contract-negotiation session,
(b) accepting into its bank account [elsewhere] checks drawn on a bank in the forum state,
(c) purchasing […] equipment and training services from a manufacturer in the forum state, and
(d) sending its personnel to that manufacturer’s facilities for training.
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SPECIFIC
Relatedness
Goodyear Dunlop Tires Operations v. Brown, 131 S. Ct. 2846 (2011)
Specific jurisdiction depends on an affiliation between the forum and the underlying
controversy, principally, activity or an occurrence that takes place in the forum State and is
therefore subject to the State’s regulation.
Relatedness: “Arising From”
Burnham v. Superior Court of Cal., 495 U.S. 604 (1990)
A state may dispense with in-forum personal service on nonresident defendants in suits arising out
of their activities in a state.
Helicopteros Nacionales De Colom. v. Hall, 466 U.S. 408 (1984)
When a controversy is related to or “arises out of” a defendant’s contacts with the forum, the
Court has said that a relationship among the defendant, the forum, and the litigation is the
essential foundation of in personam jurisdiction.
From Seizure of Person to Service of Process
Burnham v. Superior Court of Cal., 495 U.S. 604 (1990)
Historically the jurisdiction of courts to render judgment in personam is grounded on their de
facto power over a defendant’s person. Under such, his presence within a territorial jurisdiction of
a court is prerequisite to a court’s rendition of a judgment personally binding on him. Now that
capias ad respondendum have given way to personal service of summons or other form of
notice, due process requires only that in order to subject a defendant to a judgment in personam,
if he be not present within the territory of a forum, he have certain minimum contacts with it
such that the maintenance of the suit does not offend traditional notions of fair play and
substantial justice.
Minimum Contacts
Int’l Shoe v. Wash., 326 U.S. 310 (1945)
Due process requires only that in order to subject a defendant to a judgment in personam, if he be
not present within the territory of the forum, he have certain minimum contacts with it such that
the maintenance of the suit does not offend traditional notions of fair play and substantial justice.
Since the corporate personality is a fiction, although a fiction intended to be acted upon as though
it were a fact, it is clear that unlike an individual its “presence” without, as well as within, the state
of its origin can be manifested only by activities carried on in its behalf by those who are
authorized to act for it.
[The demands of due process] may be met by such contacts of the corporation with the state of the
forum as make it reasonable […] to require the corporation to defend the particular suit [there].
An “estimate of the inconveniences” which would result to the corporation from a trial away from
its “home” or principal place of business is relevant in this connection.
“Presence” in a state is not doubted when the activities of the corporation there have not only
been continuous and systematic, but also give rise to the liabilities sued on, even though no
consent to be sued or authorization to an agent to accept service of process has been given.
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[T]he casual presence of the corporate agent or even his conduct of single or isolated items of
activities in a state in the corporation’s behalf are not enough to subject it to suit on causes of
action unconnected with the activities there.
The criteria by which courts mark the boundary line between those activities which justify the
subjection of a corporation to suit, and those which do not, cannot be simply mechanical or
quantitative. […] Whether due process is satisfied must depend rather upon the quality and nature
of the activity in relation to the fair and orderly administration of the laws which it was the
purpose of the due process clause to insure.
To the extent that a corporation exercises the privilege of conducting activities within a state, it
enjoys the benefits and protection of the laws of that state. The exercise of that privilege may give
rise to obligations, and, so far as those obligations arise out of or are connected with the activities
within the state, a procedure which requires the corporation to respond to a suit brought to
enforce them can, in most instances, hardly be said to be undue.
Purposeful Availment as Minimum Contact
Asahi Metal Industries v. Superior Court of California, 480 U.S. 102 (1987)
Minimum contacts must have a basis in some act by which the defendant purposefully avails itself
of the privilege of conducting activities within the forum state, thus invoking the benefits and
protections of its laws.
- The placement of a product into the stream of commerce, without more, is not an act of
the defendant purposefully directed toward the forum state.
- A defendant’s awareness that the stream of commerce may or will sweep the product into
the forum state does not convert the mere act of placing the product into the stream into an act
purposefully directed toward the forum state.
When a corporation purposefully avails itself of the privilege of conducting activities within the
forum state, it has clear notice that it is subject to suit there, and can act to alleviate the risk of
burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if
the risks are too great, severing its connection with the state. Hence if the sale of a product of a
manufacturer or distributor is not simply an isolated occurrence, but arises from the efforts of the
manufacturer or distributor to serve, directly or indirectly, the market for its product in other
states, it is not unreasonable to subject it to suit in one of those states if its allegedly defective
merchandise has there been the source of injury to its owners or to others.
Commercial Contract as Minimum Contact
McGee v. Int’l Life Insurance, 355 U.S. 220 (1957)
In the context of personal jurisdiction, today many commercial transactions touch two or more
states and may involve parties separated by the full continent. With this increasing nationalization
of commerce has come a great increase in the amount of business conducted by mail across state
lines. At the same time modern transportation and communication have made it much less
burdensome for a party sued to defend himself in a state where he engages in economic activity.
It is sufficient for purposes of due process that a suit is based on a contract that had substantial
connection with that State in which the suit is filed.
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Tortious Conduct as Minimum Contact
Keeton v. Hustler Magazine, 465 U.S. 770 (1984)
Accord Gray v. American Radiator & Standard Sanitary Corp., 22 Ill. 2d 432 (1961).
In judging minimum contacts, a court properly focuses on the relationship among the defendant,
the forum, and the litigation.
A state has an especial interest in exercising judicial jurisdiction over those who commit torts
within its territory. This interest extends to libel actions brought by nonresidents. False statements
of fact harm both the subject of the falsehood and the readers of the statement.
The tort of libel is generally held to occur wherever the offending material is circulated. […] The
reputation of the libel victim may suffer harm even in a state in which he has hitherto been
anonymous. The communication of the libel may create a negative reputation among the residents
of a jurisdiction where the plaintiff’s previous reputation was, however small, at least unblemished.
Harmful Effects—Apart from Causes—as Minimum Contacts
Calder v. Jones, 465 U.S. 783 (1984)
Where one state [California] is the focal point both of the [libelous] story and of the harm
suffered, jurisdiction over defendants [with Florida as both headquarters and principal place of
business] in a defamation suit is proper in that same state [California] based on the “effects” of
their conduct in that state [California] even though the conduct occurs in another state [Florida].
Family Matters: Purposeful Availment & Minimum Contacts
Kulko v. Superior Court of Cal., 436 U.S. 84 (1978)
The fact that a state may be the center of gravity for choice-of-law purposes does not mean that the
state has personal jurisdiction over the defendant.
Where two New York domiciliaries, for reasons of convenience, marry in the state of California
and thereafter spend their entire married life in New York, the fact of their California marriage by
itself cannot support a California court’s exercise of jurisdiction over a spouse who remains a New
York resident in an action relating to child support.
A father who agrees, in the interests of family harmony and his children’s preferences, to allow
them to spend more time in a particular state than was required under a separation agreement can
hardly be said to have purposefully availed himself of the benefits and protections of that state’s
laws.
The mere act of sending a child to a state to live with her mother is not a commercial act and
connotes no intent to obtain or expectancy of receiving a corresponding benefit in the state that
would make fair the assertion of that state’s judicial jurisdiction.
Reasonableness
World-Wide Volkswagen v. Woodson, 444 U.S. 286 (1980)
1. Long-arm statute.
2. Minimum contacts: A state court may exercise personal jurisdiction over a nonresident defendant
only so long as there exist minimum contacts between the defendant and the forum state.
- The mere unilateral activity of those who claim some relationship with a nonresident
defendant cannot satisfy the requirement of contact with the forum state.
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- Financial benefits accruing to the defendant from a collateral relation to the forum state
will not support jurisdiction if they do not stem from a constitutionally cognizable contact with
that state.
- The foreseeability that is critical to due process analysis is not the mere likelihood that a
product will find its way into the forum state. Rather, it is that the defendant’s conduct and
connection with the forum state are such that he should reasonably anticipate being haled into
court there.
- The forum state does not exceed its powers under the Due Process Clause if it asserts
personal jurisdiction over a corporation that delivers its products into the stream of commerce
with the expectation that they will be purchased by consumers in the forum state.
- See Asahi, supra.
3. Reasonable relation: The relationship between the defendant and the forum must be such that it
is reasonable to require that party to defend the particular suit which is brought there[:]
- The burden on the defendant, while always a primary concern, will in an appropriate case be
considered in light of other relevant factors, including
- the forum state’s interest in adjudicating the dispute;
- the plaintiff’s interest in obtaining convenient and effective relief, at least when that interest is
not adequately protected by the plaintiff’s power to choose the forum;
- the interstate judicial system’s interest in obtaining the most efficient resolution of controversies;
and
- the shared interest of the several states in furthering fundamental substantive social policies.
The Due Process Clause, by ensuring the orderly administration of the laws, gives a degree of
predictability to the legal system that allows potential defendants to structure their primary
conduct with some minimum assurance as to where that conduct will and will not render them
liable to suit.
Defendants from Abroad
Asahi Metal Industries v. Superior Court of California, 480 U.S. 102 (1987)
As a matter of policy, flowing to the final criterion of the World-Wide Volkswagen test: The unique
burdens placed upon one who must defend oneself in a foreign legal system should have
significant weight in assessing the reasonableness of stretching the long arm of personal
jurisdiction over national borders.
The procedural and substantive interests of other nations in a state court's assertion of
jurisdiction over an alien defendant will differ from case to case. In every case, however, those
interests, as well as the federal government's interest in its foreign relations policies, will be best
served by a careful inquiry into the reasonableness of the assertion of jurisdiction in the particular
case, and an unwillingness to find the serious burdens on an alien defendant outweighed by
minimal interests on the part of the plaintiff or the forum state. Great care and reserve should be
exercised when extending our notions of personal jurisdiction into the international field.
The deference of one court to another when both might assert jurisdiction is “comity”.
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Defendant Action
Defendant loses on merits of
the case
CHALLENGES
Rendering Action
Judgment for plaintiff
Enforcing Action
Must enforce rendering court’s
judgment, even if defendant
challenges rendering court’s
jurisdiction (defendant waived
objection)
Defendant appears specially or Dismissal for lack of jurisdiction
moves 12(b)(2); court concedes (may order proper service to
jurisdiction
cure jurisdictional defect)
Defendant appears specially or Judgment for plaintiff
moves 12(b)(2); court holds
jurisdiction; defendant defaults
Must enforce judgment because
defendant already lost litigation
on rendering court’s jurisdiction
Defendant loses on objection to
jurisdiction, then loses on
merits of the case; defendant
appeals
Defendant defaults, contests
jurisdiction in enforcing court
In most states, optional reviewal
of proper jurisdiction;
elsewhere, defense on merits
waives jurisdictional objection
Enters default judgment for
plaintiff, unless lack of
jurisdiction clear from
complaint
If jurisdiction upheld on appeal
or objection waived by defense
on merits, must enforce
rendering court’s judgment
May decide anew whether
rendering court had
jurisdiction. If not, refuses
enforcement; otherwise, must
enforce.
Defendant defaults, denies
liability on merits in enforcing
court
Enters default judgment for
plaintiff, unless lack of
jurisdiction clear from
complaint
Enforces judgment; full faith
and credit clause precludes
reexamination of merits, having
settled by default
Material
FINDING JURISDICTION
First, nota bene that establishing personal jurisdiction (supra) involves examining all of a
corporation’s business activities; by contrast, establishing material jurisdiction will involve only
pinpointing the “nerve center”.
Sua Sponte Challenges
Ruhrgas Ag v. Marathon Oil Co., 526 U.S. 574 (1999)
Jurisdiction to resolve cases on the merits requires both authority over the category of claim in suit,
subject-matter jurisdiction, and authority over the parties, personal jurisdiction, so that the court’s
decision will bind them.
Whenever it appears that the court lacks jurisdiction of the subject matter, the court shall dismiss
the action. Rule 12(h)(3).
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If at any time before final judgment in a removed case it appears that the district court lacks
subject matter jurisdiction, the case shall be remanded. 28 U.S.C.S. § 1447(c).
Investigating Propriety of Jurisdiction
Tanzymore v. Bethlehem Steel Corp., 457 F.2d 1320 (1972)
When a question of federal jurisdiction is raised either by a party or by the court on its own
motion, the court may inquire, by affidavits or otherwise, into the facts as they exist.
DIVERSITY OF CITIZENSHIP
Complete diversity of all plaintiffs from all defendants is not constitutionally required, but
statute does require complete diversity of all plaintiffs from all defendants:
- of an individual, the State is the one in which she resides and has the intention of remaining
indefinitely (consider: registering to vote; paying taxes; owning or leasing real or personal property;
working; holding bank accounts, licenses, and church/club memberships)
- of a corporation, the States are (i) the one in which it has its incorporation and (ii) the one in
which it conducts its primary business (i.e. its “nerve center”, often its corporate headquarters)
- Court are wary of corporations devolving lawsuits onto diverse subsidiaries, seeing illicit
collusion in such arrangements.
- other types of associations generally look to the States of the partners/associates
Minimum Amount in Controversy
Courts have set a minimum value for controversies removed to federal courts: $75k.
Failure to Obtain Judgment above the Minimum
Mas v. Perry, 489 F.2d 1396 (1974)
It is well settled that the amount in controversy is determined by the amount claimed by the
plaintiff in good faith. Federal jurisdiction is not lost because a judgment of less than the
jurisdictional amount is awarded. The sum claimed by the plaintiff controls if the claim is
apparently made in good faith. It must appear to a legal certainty that the claim is really for less
than the jurisdictional amount to justify dismissal. The inability of the plaintiff to recover an
amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction.
When Diversity Obtains
Mas v. Perry, 489 F.2d 1396 (1974)
The diverse citizenship among adverse parties must be present at the time the complaint is filed.
The burden of pleading the diverse citizenship is upon the party invoking federal jurisdiction, and
if the diversity jurisdiction is properly challenged, that party also bears the burden of proof.
Burden of Establishing Diversity
Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010)
The burden of persuasion […] remains on the party asserting [diversity].
Residence/Domicile
Mas v. Perry, 489 F.2d 1396 (1974)
To be a citizen of a state […], a natural person must be both a citizen of the United States and a
domiciliary of that state.
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For diversity purposes, citizenship means domicile; mere residence in the state is not sufficient.
Establishing Domicile
Mas v. Perry, 489 F.2d 1396 (1974)
A person’s domicile is the place of his true, fixed, and permanent home and principal
establishment, and to which he has the intention of returning whenever he is absent therefrom.
A change of domicile may be effected only by a combination of two elements:
(a) taking up residence in a different domicile
(b) with the intention to remain there.
Corporate Cooperation to Create Diversity
Black & White Taxicab v. Brown & Yellow Taxicab, 276 U.S. 518 (1928)
The purpose of the change of corporations and contracts, cooperated in by the [adverse party], was
to create a diversity of citizenship. In a suit brought by the plaintiff in the federal court […], on the
basis of diverse citizenship, to restrain another transfer corporation […] from [activities] in violation
of plaintiff’s exclusive contract[…:] That the suit was not subject to dismissal […] since
- the controversy was real and substantial,
- the plaintiff was the real party in interest, and
- the requisite diversity of citizenship existed.
The cooperation between the plaintiff and the railroad company to have the rights of the parties
determined by a federal court was not improper or collusive[.]
Corporate “Nerve Center”
Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010)
Congress had, since Black & White v. Brown & Yellow, passed legislation to limit diversity jurisdiction by
expanding corporate citizenship from only the place of incorporation to both that place and principal place of
business. This later case equates principal place of business to the corporate “nerve center”.
The phrase “principal place of business” […] refers to the place where the corporation’s high level
officers direct, control, and coordinate the corporation’s activities. Courts have often
metaphorically called that place the corporation’s “nerve center”. […] And in practice it should
normally be the place where the corporation maintains its headquarters—provided that the
headquarters is the actual center of direction, control, and coordination […] and not simply an
office where the corporation holds its board meetings (for example, attended by directors and
officers who have traveled there for the occasion).
Stateless Persons
Tanzymore v. Bethlehem Steel Corp., 457 F.2d 1320 (1972)
A person may be “stateless” and such a stateless person cannot create diversity of citizenship [….]
Changing Parties
Courts determine jurisdiction invariably, at the time of filing (to avoid endless litigation). Parties
to a dispute may add additional parties, provided that the additions are not merely nominal; these
additions may remove a case from federal court.
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“ARISING UNDER”
Any Ingredient
Federal law is an “ingredient” of the dispute, if not the central matter or gravamen.
Necessary & Substantial Federal Issue Embedded Beneath State-Law Claims
Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005)
[I]n certain cases federal question jurisdiction will lie over state-law claims that implicate
significant federal issues. The doctrine captures the commonsense notion that a federal court
ought to be able to hear claims recognized under state law that nonetheless turn on substantial
questions of federal law, and thus justify resort to the experience, solicitude, and hope of
uniformity that a federal forum offers on federal issues.
[T]he question is, does a state-law claim necessarily raise a stated federal issue, actually disputed
and substantial, which a federal forum may entertain without disturbing any congressionally
approved balance of federal and state judicial responsibilities.
Necessary & Substantial Federal Issue Raised in Well-Pleaded Complaint
Louisville & Nashville Railroad v. Mottley, 211 U.S. 149 (1908)
A suit arises under the Constitution and laws of the United States only when the plaintiff’s
statement of his own cause of action shows that it is based upon those laws or that Constitution.
It is not enough that the plaintiff alleges some anticipated defense to his cause of action and asserts
that the defense is invalidated by some provision of the Constitution of the United States.
The Modern Standard: Well-Pleaded Complaint
Rivet v. Regions Bank, 522 U.S. 470 (1998)
The presence or absence of federal-question jurisdiction is governed by the “well-pleaded
complaint rule”, which provides that federal jurisdiction exists only when a federal question is
presented on the face of the plaintiff’s properly pleaded complaint. A defense is not part of a
plaintiff’s properly pleaded statement of his or her claim.
Although federal preemption is ordinarily a defense, once an area of state law has been
completely pre-empted, any claim purportedly based on that pre-empted state-law claim is
considered, from its inception, a federal claim, and therefore arises under federal law.
Operation of the Declaratory Judgment Act
Textron Lycoming Reciprocating Engine Div. v. United Auto., 523 U.S. 653 (1998)
Where a suit is brought in the federal courts upon the sole ground that the determination of the
suit depends upon some question of a federal nature, it must appear, at the outset, from the
declaration or the bill of the party suing, that the suit is of that character. But a suggestion of one
party, that the other will or may set up a claim under the constitution or laws of the United States,
does not make the suit one arising under that constitution or those laws.
Federal Cause of Action
Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005)
28 U.S.C.S. § 1331’s provision for federal-question jurisdiction is invoked by and large by
plaintiffs pleading a cause of action created by federal law […].
Federal Cause of Action + Explicit Federal Right + Federal Remedy
The narrowest standard.
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Forum Selection
VALIDITY WITHIN THE NEGOTIATION CONTEXT
Savvy Businesses in Arm’s-Length Negotiation
Bremen v. Zapata Off-Shore, 407 U.S. 1 (1972)
Parties to a contract may agree in advance to submit to the jurisdiction of a given court, to
permit notice to be served by the opposing party, or even to waive notice altogether.
Forum-selection clauses are prima facie valid and should be enforced unless enforcement is
shown by the resisting party to be unreasonable under the circumstances.
Where the choice of a forum was made in an arm’s-length negotiation by experienced and
sophisticated businessmen, absent some compelling and countervailing reason, it should be
honored by the parties and enforced by the courts.
Tickets as Contracts of Adhesion
Carnival Cruise Lines v. Shute, 499 U.S. 585 (1991)
It would be entirely unreasonable to assume that a cruise passenger would or could negotiate the
terms of a forum clause in a routine commercial cruise ticket form. [… I]ncluding a reasonable
forum clause in such a form contract well may be permissible for several reasons.
- Because it is not unlikely that a mishap in a cruise could subject a cruise line to litigation in
several different fora, the line has a special interest in limiting such fora.
- Moreover, a clause establishing ex ante the dispute resolution forum has the salutary effect of
dispelling confusion as to where suits may be brought and defended, thereby sparing litigants
time and expense and conserving judicial resources.
- Furthermore, it is likely that passengers purchasing tickets containing a forum clause like the one
here at issue benefit in the form of reduced fares reflecting the savings that the cruise line enjoys
by limiting the fora in which it may be sued.
The Court of Appeals’ conclusion that the clause here at issue should not be enforced because the
Shutes are incapable of pursuing this litigation in Florida is not justified by The Bremen Court’s
statement that “the serious inconvenience of the contractual forum to one or both of the parties
might carry greater weight in determining the reasonableness of the forum clause”. […] Florida is
not such a forum, [and]—given the location of Mrs. Shute’s accident—[this dispute is not] an
essentially local one inherently more suited to resolution in Washington than in Florida.
In light of these distinctions, and because the Shutes do not claim lack of notice of the forum
clause, they have not satisfied the “heavy burden of proof”, required to set aside the clause on
grounds of inconvenience.
Although forum-selection clauses contained in form passage contracts are subject to judicial
scrutiny for fundamental fairness, there is no indication that petitioner selected Florida to
discourage cruise passengers from pursuing legitimate claims or obtained the Shutes’ accession to
the forum clause by fraud or overreaching.
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DECISION
Entering a Federalized Judiciary
OVERLAPPING JURISDICTIONS
The federal judiciary is geographically redundant, but it provides
- expertise,
- neutrality,
- independence, and
- fidelity
at least in some cases.
Jurisdictions: General / Limited
State courts are courts of “general jurisdiction” and federal courts are courts of “limited
jurisdiction”. This means that State courts have broader subject matter jurisdiction than do federal
courts.
Probate and domestic matters fall generally to local courts at the exclusion of federal courts.
Bankruptcy court may sometimes intervene in probate matters, provided that the court does not
interfere with property already in custody of a State court.
Supplemental Jurisdiction
Federal courts may hear State law claims, even when they arise between citizens of the same State,
provided that the State law claims grow out of the same “common nucleus of operative facts” as a
claim that meets Article III requirements. That is, if there is a solid federal subject matter
jurisdiction “trunk”, then the court can hear state claim “branches” from that trunk. The current
name applied to this “branch” jurisdiction is supplemental jurisdiction. Older terms for this type
of jurisdiction are pendent and ancillary, or incidental, jurisdiction.
Removal to the Federal Judiciary
Grable & Sons Metal Prods. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005)
A defendant is entitled to remove a quiet title action if the plaintiff could have brought it in
federal district court originally [citation omitted] as a civil action arising under the United States
Constitution, laws, or treaties of the United States. 28 U.S.C.S. § 1331.
SUBSTANCE & PROCEDURE: STATE OR FEDERAL?
Formalism: Procedure from State, Substance (Common Law) from Nation
Swift v. Tyson, 16 Pet. 1 (1842)
The pre-Erie “Swift doctrine” gave States control of procedure but the federal government control of
substantive issues of common law—if the controversy was truly local and the law written, then State law
applied (e.g. in the case of real property).
This system favored the favored in that forum shopping produced great benefit for those who could exploit the
most arcane of stratagems.
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Federal common law governed contracts.
Realism: Substance from State, Procedure from Federal Rules
Erie R.R. v. Tompkins, 304 U.S. 64 (1938)
The doctrine of Swift v. Tyson rests upon the assumption that there is a transcendental body of
law outside of any particular state but obligatory within it unless and until changed by statute, that
federal courts have the power to use their judgment as to what the rules of common law are, and
that in the federal courts the parties are entitled to an independent judgment on matters of
general law. But the common law so far as it is enforced in a state, whether called common law or
not, is not the common law generally but the law of that state existing by the authority of that
state without regard to what it may have been in England or anywhere else. Thus the doctrine of
Swift v. Tyson is an unconstitutional assumption of powers by courts of the United States.
Except in matters governed by the U.S. Constitution or by acts of Congress, the law to be applied
in any case is the law of the state. Whether the law of the state shall be declared by its legislature
in a statute or by its highest court in a decision is not a matter of federal concern. There is no
federal general common law. Congress has no power to declare substantive rules of common law
applicable in a state, whether they be local in their nature or general, be they commercial law or a
part of the law of torts.
Substance/Procedure: The “Outcome Determinative” Test
Chambers v. NASCO, 501 U.S. 32 (1991)
The concerns of Erie—under which, in a diversity of citizenship action, a Federal District Court is
required to apply the law of the state in which the court is sitting—are at issue only when there is a
conflict between state and federal substantive law.
The “outcome determinative” test—under which, in diversity actions, federal courts will apply state
law whenever application of federal law in its stead will alter the outcome of the case—cannot be
read without reference to the twin aims of the Erie rule, which are
(1) discouragement of forum shopping, and
(2) avoidance of inequitable administration of the laws.
The Erie rule guarantees a litigant that if he takes his state-law cause of action to federal court and
abides by the rules of that court, the result in his case will be the same as if he had brought it in
state court.
Guaranty Trust Co. v. York, 326 U.S. 99 (1945)
In all cases where a federal court is exercising jurisdiction solely because of the diversity of
citizenship of the parties, the outcome of the litigation in the federal court should be
substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if
tried in a state court.
Substance/Procedure: Admitting the Thorniness of the Question
Cohen v. Benefit Indus. Loan Corp., 337 U.S. 541 (1949)
The accepted dichotomy is the familiar “procedural-substantive” one. This of course is a subject of
endless discussion […]. Suffice it to say that actually in many situations procedure and substance
are so interwoven that rational separation becomes well-nigh impossible. But, even so, this fact
cannot dispense with the necessity of making a distinction. For, as the matter stands, it is Congress
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which has the power to govern the procedure of the federal courts in diversity cases, and the states
which have that power over matters clearly substantive in nature.
Federal Rules of Civil Procedure
Hanna v. Plumer, 380 U.S. 460 (1965)
To hold that a Federal Rule of Civil Procedure must cease to function whenever it alters the mode
of enforcing state-created rights would be to disembowel either the United States Constitution’s
grant of power over federal procedure or Congress’ attempt to exercise that power in the Rules
Enabling Act.
Essentially, we presume that written Federal Rules are valid and apply them, even if application changes the
outcome of the suit.
Statutes of Limitations
Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530 (1949)
Where local law has created a right which the federal court is asked to enforce and local law has
undertaken to determine the life of the cause of action, the U.S. Supreme Court cannot give it
longer life in the federal court than it would have had in the state court without adding
something to the cause of action.
Limits of Rights, Advantages in Recovery, Forum Shopping
Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530 (1949)
In diversity cases the rights enjoyed under local law should not vary because enforcement of those
rights was sought in the federal court rather than in the state court. If recovery could not be had
in the state court, it should be denied in the federal court. Otherwise, those authorized to invoke
the diversity jurisdiction would gain advantages over those confined to state courts. That principle
applies to statutes of limitations on the theory that, where one is barred from recovery in the
state court, he should likewise be barred in the federal court.
Woods v. Interstate Realty Co., 337 U.S. 535 (1949)
For purposes of diversity jurisdiction a federal court is, in effect, only another court of the state. A
right which local law creates but which it does not supply with a remedy is no right at all for
purposes of enforcement in a federal court in a diversity case; where in such cases one is barred
from recovery in the state court, he should likewise be barred in the federal court. The contrary
result would create discriminations against citizens of the state in favor of those authorized to
invoke the diversity jurisdiction of the federal courts.
Judge & Jury
Byrd v. Blue Ridge Rural Electric, 356 U.S. 525 (1958)
The federal system is an independent system for administering justice to litigants who properly
invoke its jurisdiction, and an essential characteristic of that system is the manner in which, in civil
common-law actions, it distributes trial functions between judge and jury and, under the influence,
if not the command, of the Seventh Amendment, assigns the decisions of disputed questions of
fact to the jury.
The federal diversity policy of uniform enforcement of state-created rights and obligations cannot
in every case exact compliance with a state rule—not bound up with rights and obligations—which
disrupts the federal system of allocating functions between judge and jury.
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Forum-Selection Clause
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22 (1988)
28 U.S.C.S. § 1404(a) directs a district court to take account of factors other than those that bear
solely on the parties’ private ordering of their affairs. The district court also must weigh in the
balance the convenience of the witnesses and those public-interest factors of systemic integrity
and fairness that, in addition to private concerns, come under the heading of the interest of
justice. It is conceivable in a particular case, for example, that because of those factors a district
court acting under § 1404(a) may refuse to transfer a case notwithstanding the counterweight of a
forum-selection clause, whereas the coordinate state rule may dictate the opposite result.
FEDERAL PREEMPTION
Rivet v. Regions Bank, 522 U.S. 470 (1998)
Although federal preemption is ordinarily a defense, once an area of state law has been
completely pre-empted, any claim purportedly based on that pre-empted state-law claim is
considered, from its inception, a federal claim, and therefore arises under federal law.
Pretrial Disposal
SUMMARY JUDGMENT (RULE 56)
The Rules want to try to avoid trial by promoting discovery and summary judgment, but allowing a
judge to dispose of a case is at tension with the Seventh Amendment right to a trial by jury. Some
have gone so far to allege that summary judgment be unconstitutional.
The fundamental question is whether we need an eventual jury trial to decide a genuine material
question of fact.
Be mindful of whether and how the burden shifts—if the movant fails to shoulder the production
burden so as to preclude a reasonable decision for the movee, the movee may be free to ignore the
rebuttal burden.
“Viewing the evidence in the light most favorable to the nonmovant, does any genuine issue of
material fact remain? If not, is the movant entitled to judgment as a matter of law?”
Moving
A party typically moves for summary judgment after completion of discovery, but the plaintiff may,
in fact, move at any time. The other party may still respond by simply requesting further discovery.
Bifurcated Path
As a matter of strategy in summary judgment, a party may either produce overwhelming evidence
to support its position on the motion (per Adickes), or it may simply raise the lack of evidence
supporting the opposing party (per Celotex). Under the latter option, even the moving party need
not add evidence to the record showing that the nonmoving party has failed to show an essential
element—parties can move for summary judgment given only the information in the pleadings and
responses.
Moving Sua Sponte
Celotex Corp. v. Catrett, 477 U.S. 317 (1986)
District courts possess the power to enter summary judgment sua sponte, so long as the losing
party is on notice that she had to come forward with all of her evidence.
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Burden & Standard
Adickes v. S. H. Kress & Co., 398 U.S. 144 (1970)
The moving party in a summary judgment motion has the burden of showing the absence of a
genuine issue as to any material fact, and for these purposes the material it lodges must be viewed
in the light most favorable to the opposing party.
To evaluate whether a party is entitled to summary judgment one must consider the burden of proof that will
govern the matter at trial, as well as all of the available evidence that has been, or might be, uncovered. In this
case, the court’s rationale runs thus: “We think it would be open to a jury …”
In this case, the moving party failed to shift the burden of proof onto the nonmoving party, wherefore the
possibility remains, despite insufficient evidence supporting the nonmoving party, for an eventual verdict in
this party’s favor.
Pretrial: Plaintiff must persuade judge that defendant will be unable to produce sufficient evidence at trial
to survive plaintiff’s motion for judgment as a matter of law; defendant must show that plaintiff will
be unable to produce sufficient evidence at trial to satisfy her burden of production, such that
defendant would succeed on a motion for judgment as a matter of law.
Trial: If, at the close of plaintiff’s evidence, there is insufficient evidence of an essential element of the prima
facie case to make it debatable, then plaintiff has not met the burden of production; if, at the close of
defendant’s evidence, there is insufficient evidence to rebut an essential element of plaintiff’s case to make it
debatable, then defendant has not met the burden of production.
Supporting the Motion
Celotex Corp. v. Catrett, 477 U.S. 317 (1986)
The burden on the moving party may be discharged by showing, that is, pointing out to the court,
that there is an absence of evidence to support the nonmoving party’s case.
There is no express or implied requirement in Rule 56 that the moving party support its motion
with affidavits or other similar materials negating the opponent’s claim. […] Where the
nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment
motion may properly be made in reliance solely on the pleadings, depositions, answers to
interrogatories, and admissions on file. Such a motion, whether or not accompanied by affidavits,
will be made and supported as provided in this rule, and Rule 56(e) therefore requires the
nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions,
answers to interrogatories, and admissions on file, designate specific facts showing that there is a
genuine issue for trial. The court does not mean that the nonmoving party must produce evidence
in a form that would be admissible at trial in order to avoid summary judgment.
Defending against the Motion
Footnote 3, concurring opinion of Brennan, Celotex Corp. v. Catrett, 477 U.S. 317 (1986)
Once the moving party has attacked whatever record evidence the nonmoving party puports to rely
upon, the burden of production shifts to the nonmoving party, who must either
(1) rehabilitate the evidence attacked in the moving party’s papers,
(2) produce additional evidence showing the existence of a genuine issue for trial as provided in
Rule 56(e), or
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(3) submit an affidavit explaining why further discovery is necessary as provided in Rule 56(f).
Summary judgment should be granted
- if the nonmoving party fails to respond in one or more of these ways, or
- if, after the nonmoving party responds, the court determines that the moving party has met its
ultimate burden of persuading the court that there is no genuine issue of material fact for trial.
Drawing Inferences & Recognizing Genuine Issues
United States v. Diebold, Inc., 369 U.S. 654 (1962)
On summary judgment the inferences to be drawn from the underlying facts contained in
affidavits, attached exhibits, and depositions must be viewed in the light most favorable to the
party opposing the motion.
If the materials before a district court raise a genuine issue as to ultimate facts, it is improper for
the district court to grant a motion for summary judgment. Rule 56(c).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1985)
Only disputes over facts that might affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment. Factual disputes that are irrelevant or
unnecessary will not be counted. This materiality inquiry is independent of and separate from the
question of the incorporation of the evidentiary standard into the summary judgment
determination.
The issue of material fact required by Rule 56(c) to be present to entitle a party to proceed to trial
is not required to be resolved conclusively in favor of the party asserting its existence; rather, all
that is required is that sufficient evidence supporting the claimed factual dispute be shown to
require a jury or judge to resolve the parties’ differing versions of the truth at trial.
At the summary judgment stage, the judge’s function is not himself to weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine issue for trial. There
is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to
return a verdict for that party. If the evidence is merely colorable or is not significantly
probative, summary judgment may be granted.
A determination of whether a given factual dispute requires submission to a jury must be guided
by the substantive evidentiary standards that apply to the case. This is true at both the directed
verdict and summary judgment stages.
Failure to Make a Sufficient Showing of an Essential Element
Celotex Corp. v. Catrett, 477 U.S. 317 (1986)
Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon
motion, against a party who fails to make a showing sufficient to establish the existence of an
element essential to that party’s case, and on which that party will bear the burden of proof at
trial. In such a situation, there can be no genuine issue as to any material fact, since a complete
failure of proof concerning an essential element of the nonmoving party's case necessarily renders
all other facts immaterial.
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Appellate Review
O’Brien v. Alexander, 101 F.3d 1479 (2d Cir. 1996)
Whether the district court properly dismissed a plaintiff’s complaint for failure to state a claim
pursuant to Rule 12(b)(6) is reviewed de novo.
Outcomes
- new trial
- voluntary nonsuit (withdrawal without prejudice, not subject to res judicata, infra)
- involuntary nonsuit (not binding on the plaintiff)
- demurrer to the evidence (admit all the evidence, then say case still can’t be made out against you)
See also Rules 49–52.
JUDGMENT AS A MATTER OF LAW
The standard has gone from (1) no evidence to (2) scintilla of evidence to (3) some evidence to (4)
sufficient evidence to raise a genuine issue of material fact.
The balance of power between judge and jury nods to the complexities of applying the “brightline” rules of law to the messiness of fact patterns in life.
Reeves v. Sanderson Plumbing Prods., 530 U.S. 133 (2000)
In entertaining a motion for judgment as a matter of law, the court must draw all reasonable
inferences in favor of the nonmoving party, and it may not make credibility determinations or
weigh the evidence.
Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences
from the facts are jury functions, not those of a judge. Thus, although the court should review the
record as a whole, it must disregard all evidence favorable to the moving party that the jury is not
required to believe. That is, the court should give credence to the evidence favoring the
nonmovant as well as that evidence supporting the moving party that is uncontradicted and
unimpeached, at least to the extent that that evidence comes from disinterested witnesses.
Under Rule 50, a court should render judgment as a matter of law when a party has been fully
heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find
for that party on that issue.
In passing upon whether there is sufficient evidence to submit an issue to the jury the court needs
look only to the evidence and reasonable inferences which tend to support the case of the
nonmoving party.
JUDGMENT NOTWITHSTANDING THE VERDICT
Galloway v. United States, 319 U.S. 372 (1943)
The standard of proof required for the submission of evidence to a jury is essentially one to be
worked out in particular situations and for particular types of cases, the essential requirement
being that mere speculation be not allowed to do duty for probative facts, after making due
allowance for all reasonably possible inferences favoring the party whose case is attacked.
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The guaranty of a jury trial, given by the Seventh Amendment to the Federal Constitution,
requires that the jury be allowed to make reasonable inferences from facts proven in evidence
having a reasonable tendency to sustain them, although it does not require the jury to be
permitted to make inferences from the withholding of crucial facts, favorable in their effects to the
party who has the evidence of them in his peculiar knowledge and possession, but who elects to
keep it so.
The guaranty of a jury trial in suits at common law, given by the Seventh Amendment to the
Federal Constitution, does not deprive the Federal courts of the power in a jury case to direct a
verdict upon the ground of the insufficiency of the evidence.
Reweighing the Verdict Findings
Gallick v. Baltimore & Ohio R.R. Co., 372 U.S. 108 (1963)
It is not the function of a court to search the record for conflicting circumstantial evidence in
order to take the case away from a jury on a theory that the proof gives equal support to
inconsistent and uncertain inferences. The focal point of judicial review is the reasonableness of a
particular inference or conclusion drawn by the jury.
It is the jury, not the court, which is the fact-finding body. It weighs the contradictory evidence and
inferences, judges the credibility of witnesses, receives expert instructions, and draws the ultimate
conclusion as to the facts. The very essence of its function is to select from among conflicting
inferences and conclusions that which it considers most reasonable. That conclusion, whether it
relates to negligence, causation or any other factual matter, cannot be ignored.
Courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury
could have drawn different inferences or conclusions or because judges feel that other results are
more reasonable.
Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355 (1962)
Neither the Supreme Court nor the Court of Appeals can redetermine facts found by the jury any
more than the District Court can predetermine them.
Harmonizing the Verdict Findings
Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355 (1962)
Where there is a view of the case that makes the jury’s answers to special interrogatories consistent,
they must be resolved that way. For a search for one possible view of the case which will make the
jury’s finding inconsistent results in a collision with Amendment VII.
Gallick v. Baltimore & Ohio R.R. Co., 372 U.S. 108 (1963)
It is the duty of the court to attempt to harmonize the answers to interrogatories submitted to a
jury if it is possible, under a fair reading of them. Where there is a view of the case that makes the
jury’s answers to special interrogatories consistent, they must be resolved that way.
NEW TRIAL (RULES 59–60)
The judge may order a new trial when the conduct has been highly prejudicial toward the jury—the
court will go out of its way to look into the culture in which the case takes place. A judge can
weigh the evidence toward ordering a new trial.
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Sanders-El v. Wencewicz, 987 F.2d 483 (8th Cir. 1993)
It is the duty of the district court and of its officers, the counsel of the parties, to prevent the jury
from the consideration of
- extraneous issues,
- irrelevant evidence, and
- erroneous views of the law,
to guard it against the influence of passion and prejudice, and
to assure to the litigants a fair and impartial trial.
An omission by the district court or counsel to discharge this duty, or a persistent violation of it,
is a fatal error, because it makes the trial unfair.
In appraising prejudicial remarks and conduct the district court must consider the climate of the
contest in which it occurred. […] The standard of review applicable to a trial court’s denial of a
motion for mistrial is abuse of discretion. In appraising the trial court's exercise of its discretion,
the court bears in mind that improper questioning by counsel generally entitles the aggrieved party
to a new trial if such questioning conveys improper information to the jury and prejudices the
opposing litigant.
Appellate Review: None
Fairmount Glass Works v. Cub Fork Coal Co., 287 U.S. 474 (1933)
The rule that the Supreme Court of the United States will not review the action of a federal trial
court in granting or denying a motion for a new trial for error of fact has been settled by a long
and unbroken line of decisions and has been frequently applied where the ground of the motion
was that the damages awarded by the jury were excessive or were inadequate. The rule precludes
likewise a review of such action by a circuit court of appeals.
Law of the Case
RES JUDICATA
An existing final judgment rendered upon the merits, without fraud or collusion, by a court of
competent jurisdiction, is conclusive of rights, questions, and facts in issue, as to the parties and
their privies, in all other actions in the same or any other judicial tribunal of concurrent
jurisdiction.
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DISCOVERY
Preparation
LITIGATION HOLD
Affirmative Duty against “Spoilation of Evidence”
Litigation—or even a scintilla of a shadow thereof—entails affirmative duty of preserving documents
under “litigation hold”; failure may bring sanctions for “spoilation” of evidence.
See also Rule 37 establishing sanctions for failure to disclose in discovery.
Scope
WHAT IS DISCOVERABLE (RULE 26(A))
Cost of Discovery
Common law provided only for private investigation and proper pleading, not for discovery*—
responding to discovery can be very burdensome. Balancing the legitimate need for information
against the burden and expense of producing it has proved a nearly intractable problem both for
the rule-makers and for the courts.
* Equity trials did provide for discovery, but they were bench trials.
Concentric Circles of Relevance
1. Relevant to the general subject—Some information, relevant only to the general subject, may be
discoverable, to wit, for good cause.
2. Relevant to the specific claims and defenses—Some information, relevant to claims and
defenses, may be reasonably calculated to lead to discovery of admissible evidence even if the
original information is not itself admissible.
3. Admissible in court
The Modern Standard
The general standard for discovery under the formal rules is “relevan[ce] to any party’s claim or
defense”.
Under Rule 26, a party is entitled to discovery, not only of material relevant and admissible at
trial, but also of information appearing reasonably calculated to lead to discovery of admissible
evidence. (Blank v. Sullivan & Cromwell, 16 Fair. Empl. Prac. Cas. (BNA) 87 (S.D.N.Y. 1976))
Authority is divided on whether and how much the new standard limits the scope of discovery. On
the one hand, some courts take it for granted that the Advisory Committee intended to restrict
discovery. On the other hand, many courts have simply blinked at the idea that the new language
requires stricter limits.
The 2000 revisions go even further in providing for the court to shift the cost of discovery, and to
raise the matter of limits on its own, without waiting for an aggrieved party to complain or seek a
protective order. These provisions signal that parties no longer have an unquestioned right to
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pursue discovery until “no stone is left unturned” or their adversary collapses from exhaustion
(whichever comes first). But given the strong interest in disclosure of relevant facts, all privileges
generally are construed narrowly, and care must be taken not to waive the privilege inadvertently.
Purpose of Discovery
Hickman v. Taylor, 329 U.S. 495 (1947)
Mutual knowledge of all the relevant facts gathered by both parties is essential to proper
litigation. To that end, either party may compel the other to disgorge whatever facts he has in his
possession. The deposition–discovery procedure simply advances the stage at which the disclosure
can be compelled from the time of trial to the period preceding it, thus reducing the possibility of
surprise.
The various instruments of discovery now serve
(1) as a device, along with the pretrial hearing under Rule 16, to narrow and clarify the basic
issues between the parties, and
(2) as a device for ascertaining the facts, or information as to the existence or whereabouts of facts
relative to those issues.
Since the discovery provisions are to be applied as broadly and liberally as possible, the privilege
limitation must be restricted to its narrowest bounds.
Subpoena Duces Tecum
U.S. v. Nixon, 418 U.S. 683 (1974)
A subpoena for documents may be quashed if their production would be “unreasonable or
oppressive”, but not otherwise. A subpoena duces tecum in criminal cases is not intended to
provide a means of discovery; its chief innovation is to expedite the trial by providing a time and
place before trial for the inspection of subpoenaed materials.
In order to require production prior to trial, the moving party must show:
(1) that the documents are evidentiary and relevant;
(2) that they are not otherwise procurable reasonably in advance of trial by exercise of due
diligence;
(3) that the party cannot properly prepare for trial without such production and inspection in
advance of trial and that the failure to obtain such inspection may tend unreasonably to delay the
trial; and
(4) that the application is made in good faith and is not intended as a general “fishing
expedition”.
WHAT IS NOT DISCOVERABLE (RULE 26(B))
Material Previously Protected
Materials held in privilege in one suit cannot become operative fact in another suit.
Rationale for Exceptions to Discovery
Hickman v. Taylor, 329 U.S. 495 (1947)
Discovery, like all matters of procedure, has ultimate and necessary boundaries. As indicated by
Rules 30(b) and (d) and 31(d), limitations inevitably arise when it can be shown that the
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examination is being conducted in bad faith or in such a manner as to annoy, embarrass or
oppress the person subject to the inquiry. And as Rules 26(b) provides, further limitations come
into existence when the inquiry touches upon the irrelevant or encroaches upon the recognized
domains of privilege.
Mere Assertion of Privilege
United States v. Nixon, 418 U.S. 683 (1974)
When the ground for asserting privilege as to subpoenaed materials sought for use in a criminal
trial is based only on the generalized interest in confidentiality, it cannot prevail over the
fundamental demands of due process of law in the fair administration of criminal justice. The
generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a
pending criminal trial.
The Privileged Work of Counsel
The privileges most common in civil litigation are the attorney–client privilege and its offshoot,
the work–product privilege. Unlike all other privileges, these two are said to promote, or at least be
consistent with, the underlying values of the adversary system. Thus, they are more robust and
easier to maintain than other privileges. This is true even though they operate, like the others, to
deprive the fact-finder of relevant information.
The court stated that “nowhere does Rule 26(b)(3) state that a document must have been prepared
to aid in the conduct of litigation in order to constitute work product, much less primarily or
exclusively to aid in litigation; rather, the rule is best read to extend protection to documents
prepared because of litigation”.
“We agree with the several courts and commentators that have concluded that opinion work
product may be discovered and admitted when mental impressions are at issue in a case and the
need for the material is compelling.”
Attorney–Client Privilege: The Purpose
United States v. Louisville & N. R. Co., 236 U.S. 318 (1915)
The desirability of protecting confidential communications between attorney and client as a matter
of public policy is too well known and has been too often recognized by textbooks and courts to
need extended comment. If such communications were required to be made the subject to
examination and publication, such enactment would be a practical prohibition upon professional
advice and assistance.
Attorney–Client Privilege: The Test
Fisher v. United States, 425 U.S. 391 (1976)
When the client himself would be privileged from production of the document, either as a party at
common law or as exempt from self-incrimination, the attorney having possession of the
document is not bound to produce.
Confidential disclosures by a client to an attorney made in order to obtain legal assistance are
privileged. The purpose of the privilege is to encourage clients to make full disclosure to their
attorneys. However, since the privilege has the effect of withholding relevant information from the
factfinder, it applies only where necessary to achieve its purpose. Accordingly it protects only
those disclosures, necessary to obtain informed legal advice, which might not have been made
absent the privilege. Pre-existing documents which can be obtained by court process from the
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client when he is in possession may also be obtained from the attorney by similar process following
transfer by client in order to obtain more informed legal advice.
1. Communication
2. Between attorney and client
3. For purpose of legal proceedings
4. Maintained in confidentiality
5. Not for crime or fraud
Attorney–Client Privilege: Posthumous Extension
Swidler & Berlin v. United States, 524 U.S. 399 (1998)
It has been generally, if not universally, accepted, for well over a century, that the attorney-client
privilege survives the death of the client.
There are weighty reasons that counsel in favor of posthumous application of the attorney client
privilege. Knowing that communications will remain confidential even after death encourages the
client to communicate fully and frankly with counsel. While the fear of disclosure, and the
consequent withholding of information from counsel, may be reduced if disclosure is limited to
posthumous disclosure in a criminal context, it seems unreasonable to assume that it vanishes
altogether. Clients may be concerned about reputation, civil liability, or possible harm to friends
or family. Posthumous disclosure of such communications may be as feared as disclosure during
the client’s lifetime.
Attorney–Client Privilege: Corporations & Their Agents
Upjohn Co. v. United States, 449 U.S. 383 (1981)
In the corporate context, it will frequently be employees beyond the control group—officers and
agents responsible for directing the company’s actions in response to legal advice—who will possess
the information needed by the corporation’s lawyers. Middle-level and lower-level employees can,
by actions within the scope of their employment, embroil the corporation in serious legal
difficulties, and it is only natural that these employees would have the relevant information needed
by corporate counsel if he is adequately to advise the client with respect to such actual or potential
difficulties. In a corporation, it may be necessary to glean information relevant to a legal problem
from middle management or non-management personnel as well as from top executives.
1. communication is within employee’s duty (consider the specific scope of that duty!)
2. employee is aware of applicability of privilege to the communication
3. information is not available from the group holding control over the corporation
4. communication is to counsel at the direction of corporate superiors
Exceptions:
- self-defense (if a lawyer is collecting fees, and the client refuses to pay, the lawyer can disclose)
- self-disclosure (if you elect to disclose, the privilege is gone)
- public policy (probably fraud and crime)
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Attorney–Client Privilege: Facts/Communication
Upjohn Co. v. United States, 449 U.S. 383 (1981)
The protection of the privilege extends only to communications and not to facts. A fact is one
thing and a communication concerning that fact is an entirely different thing. The client cannot
be compelled to answer the question, “What did you say or write to the attorney?” but may not
refuse to disclose any relevant fact within his knowledge merely because he incorporated a
statement of such fact into his communication to his attorney.
Not all written materials obtained or prepared by an adversary’s counsel with an eye toward
litigation are necessarily free from discovery in all cases. Where relevant and nonprivileged facts
remain hidden in an attorney’s file and where production of those facts is essential to the
preparation of one’s case, discovery may properly be had. Production might be justified where the
witnesses are no longer available or can be reached only with difficulty. This does not apply to oral
statements made by witnesses, whether presently in the form of the attorney's mental impressions
or memoranda.
Attorney–Client Privilege: Crime/Fraud Exception & In-Camera Review
United States v. Zolin, 491 U.S. 554 (1989)
The attorney-client privilege must necessarily protect the confidences of wrongdoers, but the
reason for that protection—the centrality of open client and attorney communication to the proper
functioning of our adversary system of justice—ceases to operate at a certain point, namely, where
the desired advice refers not to prior wrongdoing, but to future wrongdoing.
It is the purpose of the crime-fraud exception to the attorney-client privilege to assure that the seal
of secrecy between lawyer and client does not extend to communications made for the purpose of
getting advice for the commission of a fraud or crime.
In camera review may be used to determine whether allegedly privileged attorney-client
communications fall within the crime-fraud exception. […] Before engaging in in camera review to
determine the applicability of the crime-fraud exception, a judge should require a showing of a
factual basis adequate to support a good faith belief by a reasonable person that in camera review
of the materials may reveal evidence to establish that the crime-fraud exception applies. Once that
showing is made, the decision whether to engage in in camera review rests in the sound discretion
of a district court. A court should make that decision in light of the facts and circumstances of the
particular case, including, among other things, the volume of materials a district court has been
asked to review, the relative importance to the case of the alleged privileged information, and the
likelihood that the evidence produced through in camera review, together with other available
evidence then before a court, will establish that the crime-fraud exception does apply.
Work-Product Protection
Test criteria: Materials prepared…
1. by attorney (or party appointed by attorney to assist in litigation or preparation)
2. in anticipation of litigation (“because-of” test, which regards only anticipation objectively reasonable)
Incidentally, mental impressions of counsel are almost always protected from discovery by opposition.
Exception: information that is essential to the opponent or necessary to his/her case
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Hickman v. Taylor, 329 U.S. 495 (1947)
Where there is an attempt, without purported necessity or justification, to secure written
statements, private memoranda, and personal recollections prepared or formed by an adverse
party’s counsel in the course of his legal duties, it falls outside the arena of discovery and
contravenes the public policy underlying the orderly prosecution and defense of legal claims. Not
even the most liberal of discovery theories can justify unwarranted inquiries into the files and the
mental impressions of an attorney.
Attorney–Client/Work-Product
Hickman v. Taylor, 329 U.S. 495 (1947)
The protective cloak of the attorney-client privilege does not extend to information which an
attorney secures from a witness while acting for his client in anticipation of litigation.
DEPOSITIONS
See Rules 27–32.
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SANCTION
Grounds
HISTORY OF AMENDMENTS
1983 Amendment
Rule 11 governs sanctions, and once a court finds that a party has violated Rule 11, the court must
impose sanctions. Both firms and represented parties may be subject to sanction for the improper
conduct of counsel. Sanctions would usually remain even if the offending party were to abandon
the action. The 1993 version of Rule 11 established three broad categories for improper pleadings:
1. purpose
2. basis in law
3. basis in fact
1993 Amendment
These changes aimed to reign in the adversarial system and a discovery process run amok.
Sanctions become available not just for the pleadings per se but also for “presenting to the court a
pleading, written motion, or other paper”, a phrase in which “presenting” includes “signing, filing,
submitting, or later advocating”.
“The amended Rule 11 requires a close nexus between the oral statement and the underlying
written paper. […] That an oral statement is made in the course of advocating a pleading or
motion is not enough; to be sanctionable the oral statement must relate directly to a particular
representation contained in the document that the lawyer is then advocating.”
The 1993 amendments further established a 21-day grace period (“safe harbor”) during which an
offending party may withdraw or amend improper pleading.
MODERN STANDARD (RULE 11)
Sanctions are an “inherent power” of the judiciary.
The standard for dismissal for failure to state a claim (implausibility) is more liberal than is the
standard for sanction under Rule 11 (frivolity)—sanctions are available not for implausible cases
but only for frivolous ones. Frivolity is an objective standard not equal to a subjective impression
of hopelessness. Frivolity seems to imply that a statement reaches not even colorably or arguably
toward merit. The good or bad faith of the sanctionable party is another important consideration.
Saltany v. Reagan, 886 F.2d 438 (D.C. Cir. 1989)
We do not conceive it a proper function of a federal court to serve as a forum for “protests”, to the
detriment of parties with serious disputes waiting to be heard.
Arguing to Change the Law
Rule 11 provides for arguments to change existing law:
- distinguish the facts
- advance a new theory of law
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- argue for judicial mistake in light of new evidence having come to light since the decision
Saltany v. Reagan, 886 F.2d 438 (D.C. Cir. 1989)
On appeal, plaintiffs fail to identify any international agreement that “expressly conflicts” with the
FSIA, and thus fail to establish any basis for jurisdiction in the courts of the United States.
Consequently, we find that Amerada Hess clearly bars plaintiffs’ claim against the United
Kingdom, and that so much was apparent to counsel for plaintiffs before they imposed upon the
United Kingdom the burden of this appeal. Accordingly, we grant the United Kingdom’s motion
for attorneys’ fees and costs to be assessed against counsel.
What is Sanctionable
Christian v. Mattel, Inc., 286 F.3d 1118 (9th Cir. 2002)
Rule 11 sanctions are limited to misconduct regarding signed pleadings, motions, and other
filings.
While Rule 11 permits a district court to sanction an attorney for conduct regarding pleadings,
written motions, and other papers that have been signed and filed in a given case; it does not
authorize sanctions for, among other things, discovery abuses or misstatements made to the
court during an oral presentation.
But see Rule 37 establishing sanctions for failure to disclose in discovery.
O’Brien v. Alexander, 101 F.3d 1479 (2d Cir. 1996)
Zealous oral advocacy must be conducted according to the rules and counsel may not knowingly
make a false statement of law or fact […]. To violate this professional standard may result in
sanctions under Rule 11.
That an oral statement is made in the course of advocating a pleading or motion is not enough; to
be sanctionable the oral statement must relate directly to a particular representation contained
in the document that the lawyer is then advocating. Thus, to be sanctionable an oral
representation must meet two requirements:
(1) it must violate the certification requirement of Rule 11(b), e.g., by advocating baseless
allegations, and
(2) it must relate directly to a matter addressed in the underlying paper and be in furtherance of
that matter to constitute advocating within the meaning of subsection (b).
Who is Sanctionable
Business Guides v. Chromatic Communications, 498 U.S. 533 (1991)
Rule 11 speaks of attorneys and parties in a single breath and applies to them a single standard
[….] The rule draws no distinction between the state of mind of attorneys and parties. Rather, it
states unambiguously that any signer must conduct a “reasonable inquiry” or face sanctions.
[Rule 11] imposes on any party who signs a pleading, motion, or other paper, whether the party’s
signature is required by the rule or is provided voluntarily, an affirmative duty to conduct a
reasonable inquiry into the facts and the law before filing, and that the applicable standard is one
of reasonableness under the circumstances. […] Where a represented party appends its signature to
a document that a reasonable inquiry into the facts would have revealed to be without merit, the
court sees no reason why a district court should be powerless to sanction the party in addition to,
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or instead of, the attorney. A contrary rule would establish a safe harbor such that sanctions could
not be imposed where an attorney, pressed to act quickly, reasonably relies on a client's careless
misrepresentations. [“What is objectively reasonable for a client may differ from what is objectively
reasonable for an attorney.”]
Rule 11 contemplates sanctions against the particular individual who signs his or her name, not
against the law firm of which that individual is a member, because the purpose as a whole is to
bring home to the individual signer his personal, nondelegable responsibility to validate the truth
and legal reasonableness of the papers filed.
Due Diligence
Frantz v. United States Powerlifting Federation, 836 F.2d 1063 (7th Cir. 1987)
Rule 11 requires counsel to do legal research before filing, and to be aware of legal rules
established by the Supreme Court. A party may not strike out blindly and rely on its opponent to
do the research to make the case or expose its fallacies.
Christian v. Mattel, Inc., 286 F.3d 1118 (9th Cir. 2002)
An attorney has a duty prior to filing a complaint not only to conduct a reasonable factual
investigation, but also to perform adequate legal research that confirms whether the theoretical
underpinnings of the complaint are warranted by existing law or a good faith argument for an
extension, modification or reversal of existing law.
O’Brien v. Alexander, 101 F.3d 1479 (2d Cir. 1996)
The standard certification for factual allegations under Rule 11(b)(3) is that there is (or likely will
be) evidentiary support for the allegation, not that the party will prevail with respect to its
contention. As a result, sanctions may not be imposed unless a particular allegation is utterly
lacking in support.
Kraemer v. Grant County, 892 F.2d 686 (7th Cir. 1990)
It is not necessary that an investigation into the facts be carried to the point of absolute certainty.
The investigation need merely be reasonable under the circumstances. […] Relevant factors for the
court to consider in determining whether an attorney has performed reasonable research before
filing a complaint include:
- Whether the signer of the documents had sufficient time for investigation;
- the extent to which the attorney had to rely on his or her client for the factual foundation
underlying the pleading, motion, or other paper;
- whether the case was accepted from another attorney;
- the complexity of the facts and the attorney’s ability to do a sufficient pre-filing investigation; and
- whether discovery would have been beneficial to the development of the underlying facts.
Signature & Its Role
See Rule 26(g) for the role of signature in discovery.
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Business Guides v. Chromatic Communications, 498 U.S. 533 (1991)
Rule 11 provides in relevant part that the signature of an attorney or party constitutes a certificate
by the signer that to the best of the signer’s knowledge, information, and belief formed after
reasonable inquiry it is well grounded in fact.
A signature certifies to the court that the signer
- has read the document,
- has conducted a reasonable inquiry into the facts and the law and is satisfied that the document
is well grounded in both, and
- is acting without any improper motive.
The essence of Rule 11 is that signing is no longer a meaningless act; it denotes merit. A signature
sends a message to the district court that this document is to be taken seriously.
If discovery is necessary to establish a claim, then it is not unreasonable to file a complaint so as to
obtain the right to conduct that discovery.
Christian v. Mattel, Inc., 286 F.3d 1118 (9th Cir. 2002)
An attorney’s signature on a complaint is tantamount to a warranty that the complaint is well
grounded in fact and existing law (or proposes a good faith extension of the existing law) and that
it is not filed for an improper purpose.
Appeal & Review
DEFERENCE TO DISCRETION
Courts sitting in appellate review of decisions in lower courts will defer to the judgment of the
trier of fact for two reasons:
1. The trier of fact is “better positioned to decide the issue in question”.
2. Deference streamlines the litigation process by freeing appellate courts from the duty of
reweighing evidence and reconsidering facts already weighed and considered.
Christian v. Mattel, Inc., 286 F.3d 1118 (9th Cir. 2002)
An appellate court reviews a district court’s decision to impose Rule 11 sanctions, and, if they are
warranted, the reasonableness of the actual amount imposed, for abuse of discretion. In
conducting its review of the district court’s factual findings in support of the sanctions, the
appellate court will be justified in concluding that the court has abused its discretion in making
the findings only if they are clearly erroneous. The district court’s legal findings must be affirmed
unless they result from a materially incorrect view of the relevant law.
Kraemer v. Grant County, 892 F.2d 686 (7th Cir. 1990)
Concerns for the effect on both an attorney’s reputation and for the vigor and creativity of
advocacy by other members of the bar necessarily require that the court exercise less than total
deference to the trial court in its decision to impose Rule 11 sanctions. In reviewing the
imposition of sanctions under Rule 11, then, the court gives deference to the decision of the trial
court, but with careful reference to the standards governing the exercise of the court’s discretion
and to the purposes Rule 11 is meant to serve.
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How Little? How Much?
Frantz v. United States Powerlifting Federation, 836 F.2d 1063 (7th Cir. 1987)
Although the district court possesses substantial discretion in selecting the sanction, the court
must exercise that discretion conscientiously and with recognition of the ends in view:
discouraging both frivolous filings and improper requests for fees. Discretion does not imply that
anything goes. Discretionary choices are not left to a court’s inclination, but to its judgment; and
its judgment is to be guided by sound legal principles.
The court may impose a penalty as light as a censure and as heavy as is justified—a fine that may
exceed the amount of fees incurred by the opposing party.
Achieving the optimal deterrence may call for the offending party to lose more or less than the
injured party’s loss. Frivolous litigation injures the judicial system and other litigants, whose day
in court is postponed as judges must devote time to needless motions and heedless litigants.
Courts may consider these public injuries when fixing penalties.
Busiess Guides v. Chromatic Communications, 498 U.S. 533 (1991)
The main objective of Rule 11 is not to reward parties who are victimized by litigation; it is to
deter baseless filings and curb abuses. Imposing monetary sanctions on parties that violate the rule
may confer a benefit on other litigants, but the Rules Enabling Act is not violated by such
incidental effects on substantive rights.
In the event that a district court misapplies Rule 11 in a particular case, the error can be corrected
on appeal. But misapplications do not themselves provide a basis for concluding that Rule 11 is
the result of distinct errors in prima facie judgment during the development and promulgation of
the rule.
Saltany v. Reagan, 886 F.2d 438 (D.C. Cir. 1989)
The court thus found, in substance if not in terms, that plaintiffs’ counsel had violated Rule 11;
yet the court did not impose a sanction. Instead, the court went on to observe that because the
“injuries for which the suit is brought are not insubstantial”, the case is not “frivolous so much as
it is audacious”.
The seriousness of the injury, however, has no bearing upon whether a complaint is properly
grounded in law and fact. We may agree with the district court that the suit is audacious—that is
not sanctionable in itself—but, we do not see how filing a complaint that “plaintiffs’ attorneys
surely knew” had “no hope whatsoever of success” can be anything but a violation of Rule 11.
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ALTERNATIVE DISPUTE RESOLUTION
Private Justice
TO WHAT END?
There is no evidence that plaintiffs fare significantly better in litigation. In fact, the opposite may
be true. And arbitration is faster.
But the public spectacle of civil litigation gives life to the “rule of law”. Private, individualized
dispute resolution extinguishes the possibility of such collective litigation.
BY WHAT MEANS?
While the goals of court-annexed arbitration are similar to those of private arbitration, courtannexed arbitration is unique in that it operates under the authority of a public court and
results in an enforceable decision by that court.
A related development in both state and federal courts is the delegation of decision making power
over all or part of a case, such as discovery or calculation of damages, to a collateral authority. In
the federal courts, those authorities are known as “special masters” and are authorized by Rule 53.
Arbitration
SCOPE
Arbitrability as a Question for Judicial Determination
Howsam v. Dean Witter Reynolds, 537 U.S. 79 (2002)
Although the United States Supreme Court recognizes and enforces a liberal federal policy
favoring arbitration agreements, there is an exception to this policy. The question whether the
parties have submitted a particular dispute to arbitration, i.e., the “question of arbitrability”, is
an issue for judicial determination unless the parties clearly and unmistakably provide otherwise.
PacifiCare Health Sys. v. Book, 538 U.S. 401 (2003)
Let the arbiter have at least a go at resolving the dispute.
The phrase “question of arbitrability” has a limited scope. The United States Supreme Court has
found the phrase (question of arbitrability) applicable in the kind of narrow circumstance where
contracting parties would likely have expected a court to have decided the gateway matter, where
they are not likely to have thought that they had agreed that an arbitrator would do so, and,
consequently, where reference of the gateway dispute to the court avoids the risk of forcing parties
to arbitrate a matter that they may well not have agreed to arbitrate.
A court should not, on the basis of “mere speculation” that an arbitrator might interpret
ambiguous agreements in a manner that casts their enforceability into doubt, take upon itself the
authority to decide the antecedent question of how the ambiguity is to be resolved. In short, where
the court does not know how the arbitrator will construe the remedial limitations, the questions
whether they render the parties’ agreements unenforceable and whether it is for courts or
arbitrators to decide enforceability in the first instance are unusually abstract.
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Prior Agreement to Enter Arbitration
Air Line Pilots Ass’n v. Miller, 523 U.S. 866 (1998)
There is no legal basis for forcing into arbitration a party who never agreed to put his dispute over
federal law to such a process.
Howsam v. Dean Witter Reynolds, 537 U.S. 79 (2002)
Arbitration is a matter of contract and a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit.
Although the United States Supreme Court recognizes and enforces a liberal federal policy
favoring arbitration agreements, there is an exception to this policy. The question whether the
parties have submitted a particular dispute to arbitration, i.e., the “question of arbitrability”, is an
issue for judicial determination unless the parties clearly and unmistakably provide otherwise.
EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)
The Federal Arbitration Act (FAA) directs courts to place arbitration agreements on equal footing
with other contracts, but it does not require parties to arbitrate when they have not agreed to do
so. Because the FAA is at bottom a policy guaranteeing the enforcement of private contractual
arrangements, the court looks first to whether the parties agreed to arbitrate a dispute, not to
general policy goals, to determine the scope of the agreement. While ambiguities in the language
of the agreement should be resolved in favor of arbitration, the court does not override the clear
intent of the parties, or reach a result inconsistent with the plain text of the contract, simply
because the policy favoring arbitration is implicated. Arbitration under the FAA is a matter of
consent, not coercion.
Statutory Claims
Gilmer v. Interstate/Johnson Lane, 500 U.S. 20 (1991)
Statutory claims may be the subject of an arbitration agreement. […] By agreeing to arbitrate a
statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits
to their resolution in an arbitral, rather than a judicial, forum.
Third Parties
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1982)
Under the Arbitration Act, an arbitration agreement must be enforced notwithstanding the
presence of other persons who are parties to the underlying dispute but not to the arbitration
agreement.
Collective Bargaining
Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728 (1981)
Courts ordinarily defer to collectively bargained dispute-resolution procedures when the parties'
dispute arises out of the collective-bargaining process.
Wright v. Universal Mar. Serv. Corp., 525 U.S. 70 (1998)
In collective bargaining agreements there is a presumption of arbitrability in the sense that an
order to arbitrate the particular grievance should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted
dispute.
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The presumption of arbitrability, however, does not extend beyond the reach of the principal
rationale that justifies it, which is that arbitrators are in a better position than courts to interpret
the terms of a collective-bargaining agreement.
Commerce
Circuit City Stores v. Adams, 532 U.S. 105 (2001)
The Federal Arbitration Act (FAA) generally provides for the enforceability of a written arbitration
provision in any maritime transaction or a “contract evidencing a transaction involving
commerce”.
ENFORCEABILITY
The Court of Appeals for the District of Columbia has concluded that where arbitration occurs
solely because it is mandated by an employer as a condition of employment, the employer must
bear the expense of the arbitrator’s fees, given that the employee otherwise could have pursued
his or her claims in court without having to pay for the judge’s services.
The court has suggested that large arbitration costs foisted upon a consumer by virtue of her
contract with a mobile home dealer could invalidate the arbitration clause. (Green Tree) After this
decision, even fee-splitting causes—inasmuch as they foist a heavy financial burden upon
employees—may be unenforceable in employment contracts. The Sixth Circuit has decided that a
cost-splitting provision should be unenforceable whenever the provision exerts the “chilling effect”
of deterring a substantial number of potential litigants from seeking to vindicate their statutory
rights.
Courts have to evaluate costs, in toto, on a case-by-case basis.
Gilmer v. Interstate/Johnson Lane, 500 U.S. 20 (1991)
Having made the bargain to arbitrate, the party should be held to it unless Congress itself has
evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.
Arbitration agreements are enforceable save upon such grounds as exist at law or in equity for the
revocation of any contract.
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213 (1984)
The Arbitration Act provides that written agreements to arbitrate controversies arising out of an
existing contract shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law
or in equity for the revocation of any contract. By its terms, the Act leaves no place for the exercise
of discretion by a district court, but instead mandates that district courts shall direct the parties to
proceed to arbitration on issues as to which an arbitration agreement has been signed.
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1982)
The Arbitration Act establishes that, as a matter of federal law, any doubts concerning the scope
of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the
construction of the contract language itself or an allegation of waiver, delay, or a like defense to
arbitrability.
Complexity
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985)
Potential complexity should not suffice to ward off arbitration.
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APPEALABILITY
Challenging Propriety of Arbitration
Green Tree Fin. Corporation-Alabama v. Randolph, 531 U.S. 79 (2000)
The party resisting arbitration bears the burden of proving that the claims at issue are unsuitable
for arbitration. The party seeking to avoid arbitration bears the burden of establishing that
Congress intended to preclude arbitration of the statutory claims at issue. Similarly, where a party
seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively
expensive, that party bears the burden of showing the likelihood of incurring such costs.
Challenging Substance of the Settlement
One of the most common features of arbitration clauses in contracts is the non-appealability of
the awards. Arbitration awards do show up in the public court system, where they may be entered
as a judgment of the court to bolster their enforceability. Most arbitrations are subject to a limited
right of review in the form of a motion to modify or set aside the award, but only on the grounds
of the arbitrator’s bias, fraud, misconduct, or abuse of discretion.
Green Tree Fin. Corporation-Alabama v. Randolph, 531 U.S. 79 (2000)
The Federal Arbitration Act does permit parties to arbitration agreements to bring a separate
proceeding in a district court to enter judgment on an arbitration award once it is made or to
vacate or modify it.
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