CIVIL PROCEDURE -- READING ASSIGNMENTS
Professor Achtenberg -- Fall 2001
Choice of Law in Federal Court
This is the reading list for the vertical choice of laws section of the second semester
of the class. This entire section deals with a single question:
When a claim is in federal court solely because of diversity (or because
it is a supplemental state law claim), how does the court decide which
issues will be governed by federal law and which issues will be
governed by state law?
The Supreme Court has struggled with this question since 1842 and keeps changing
the answer. We're going to work through that history primarily by seeing how you as a
lawyer would argue a particular case (the attached Erie Doctrine Discussion
Hypothetical) using each of the seminal Supreme Court decisions as your authority.
Students who sit on the left side of the class (the four columns of seats to my left as I face
you) will represent Paul, while students who sit on the right side of the class will represent
Dan. In each class, you will be asked to argue the hypothetical by explaining what
standard the Supreme Court articulated in a particular case (e.g. Swift v. Tyson) and how
that standard shows that your client should win. In some of the classes you will need to be
ready to argue the issue based on a number of cases, in others just one. For example, in
class 17 (really 19) some of you will argue the issue based on Swift, some based on Erie,
some based on Guaranty Trust, and some based on Byrd. As a result, each of you will
need to prepare all four cases.
I expect that the hardest part of preparing for class will be your effort to identify the
standard each case sets for deciding which issues will be governed by federal law and
which by state law. For example, in dealing with Swift, you will need to identify its general
rule (that federal common law usually governs) and the list of exceptions (see the middle of
page 922) where state law would govern. I strongly encourage you to e-mail me (or drop
by my office) with questions or with your tentative conclusions as to the standards in each
case. I also think this is an excellent opportunity for you to work together in study groups.
We will cover the materials in the order indicated. However, the breakdown by class
session is (as always) only approximate.
Classes
17
(really 19)
18
(really 20)
19
(really 21)
20
(really 22)
21
(really 23)
Topic
Pages
Swift and Erie
Be ready to argue the hypo under each of these case.
In addition, try to decide whether Erie is based on statutory interpretation,
the constitution, or something else.
921-932
28 USC  1652
The Outcome Determinative Approach
Be prepared to argue the hypo under Guaranty Trust. (Read the note
cases 938-942 for background only)
Warning: Do not assume that this approach is still viable -- but do not
assume that it has disappeared entirely either. Read each of the 4 note
cases and be prepared to identify what the specific issue was, how the
court resolved it, and why.
932-942
An Aside on Which State Law to Apply.
Read the note on 942-44 carefully and be certain you understand what
Klaxon tells us about which state law the federal district courts should
apply when they apply some state law.
942-944
The Balancing Approach
Be prepared to argue the hypo under Byrd. See Warning above.
944-951
Modern Efforts at Synthesis (I)
Just one case for this class (Hanna) but it's the most important one in the
entire section so read it very carefully. Be prepared to argue the hypo
under Hanna.
Modern Efforts at Synthesis (II)
Now try to figure out what Burlington Northern and Walker add to
Hanna's test. Then look back at Justice Harlan's opinion in Hanna and
look at Justice Kennedy's opinions in Chambers (Note 5 at 975-976). Try
to figure out what arguments need to be made to get Kennedy's vote.
(Be sure to figure out what Harlan and Kennedy mean by primary
conduct.) As usual, be ready to argue the hypo under these cases, but
also be ready to argue the hypo as if the Court was made up entirely of
Justices who agreed with Harlan and Kennedy.
951-959
Notes on 962967
28 U.S.C.
 2072
967-976
Modern Efforts at Synthesis (III)
For this class, prepare a workable flow chart to determine whether to
apply state or federal law (a) when their is no Federal Rule of Civil
Procedure, no federal statute, and no federal constitutional provision
dealing with the issue, (b) when there is a Federal Rule of Civil Procedure
dealing with the issue, (c) when there is a federal statute dealing with the
issue, and (d) when there is a federal constitutional provison dealing with
the issue. For further details, see the attached Instructions for Flow
Charts. (I will probably provide some additional guidance during Class
19.)
No New
Reading
Determining State Law
Background reading only
968-974
Catch Up and Review
Outline in writing your answer to the attached 1997 Exam question.
No New
Reading
Instructions for Flow Charts
This assignment is an ungraded exercise. The students who have done it in the past have indicated
that it was an extremely useful learning experience and that it helped them on the exam. I strongly urge you to
do the exercise, but there will be no sanction (other than loss of learning and possibly embarassment) if you
decide to spend your time otherwise.
Parts of some of your flow charts will be put on the Elmo and projected for the class. So that the
students will be able to see what you have done, please follow the following directions:
1. Please draw your flow charts with a felt tip pen or some other writing instrument that makes a
reasonably thick line. Please do not write in a teensy-tiny script intended to show that the entire constitution
could be written on the back of a dime. The Elmo likes bold, reasonable size printing.
2. Feel free to use more than one sheet of paper. You can tape them together if you want or just use
connecting directions. (For example, if you are using multiple sheets, you can have an arrow that just goes to
a circle that says, e.g., Go to Erie Factors Analysis, and then have another sheet that starts with a circle
labeled Erie Factors Analysis.
3. Put your name on the back of each page of your chart. (You can put it on the front but then you
run the risk that the whole class will know who prepared the chart.)
If you have any questions about how to do this assignment, please call me or e-mail me or come by
my office.
Erie Doctrine Discussion Hypothetical (Based on Q 1 from the 1994 Exam)
Relevant Euphoria State Law
The state of Euphoria enacted a statute requiring that, in all suits seeking punitive damages, the
plaintiff must prove the elements necessary for punitive damages beyond a reasonable doubt. Thus, in
Euphoria state courts, if a plaintiff prays for punitive damages on the basis that the defendant's conduct was
malicious, the plaintiff must prove malice beyond a reasonable doubt.
In addition, the Euphoria statute provides that in punitive damage cases, the amount of punitive
damages will be decided in the second part of a bifurcated trial. In the first part, the jury decides liability for
compensatory damages, the amount (if any) of compensatory damages, and liability for (but not the amount
of) punitive damages. In this first part, no evidence of defendant's net worth is admissible. If the jury, in the
first part of the trial, finds that defendant is liable for punitive damages, the court then conducts the second
part of the trial during which defendant's net worth is admissible and at the end of which the jury determines
the amount of punitive damages to award. The judge is given no discretion: a punitive damage case always
requires a bifurcated trial.
Relevant Federal Law
There is no Federal Rule of Civil Procedure or federal statute setting forth the burden of proof for
punitive damages. However, in federal question civil cases, federal judges generally apply the preponderance
of the evidence standard to all factual issues -- including issues necessary for an award of punitive damages.
Federal Rules of Civil Procedure 42(b) provides, in relevant part, "The court, in furtherance of
convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may
order a separate trial of . . . any separate issue . . . or issues." This has been interpreted to give the trial court
extremely broad discretion to decide whether or not to bifurcate issues for trial.
Facts
Paul Plaintiff sued Dan Defendant in the United States District Court for the District of Euphoria. Paul
asserted only a state law tort claim. The sole basis for federal jurisdiction was diversity of citizenship. Paul
claimed that he was entitled to punitive damages because Dan's conduct was malicious.
Relying on the Euphoria statute, Dan argues that the federal court should bifurcate the trial. The
District Judge, Jane Jaglowski, does not believe that bifurcation would be convenient, avoid prejudice, or be
conducive to expedition and economy. Thus, if it is up to her under FRCivP 42(b), she would not bifurcate the
trial. On the other hand, if the Euphoria statute is controlling, she would bifurcate.
Similarly, Dan argues that the jury should be instructed that it could not award punitive damages
unless it found malice beyond a reasonable doubt. Paul opposes that instruction.
Should Judge Jaglowski bifurcate the trial? Should she instruct the jury that it cannot award punitive
damages unless it finds malice beyond a reasonable doubt?
QUESTION 1 -- ERIE DOCTRINE
Federal Rule of Civil Procedure 68 provides, in relevant part:
Federal Rule of Civil Procedure 68.
Offer of Judgment
[A] party defending against a claim may serve upon the adverse party an
offer to allow judgment to be taken against the defending party for the money
or property or to the effect specified in the offer, with costs then accrued. . . .
If the [offeree rejects the offer and the] judgment finally obtained by the
offeree is not more favorable than the offer, the offeree must pay the costs
incurred after the making of the offer.
The federal courts have interpreted the word costs in FRCivP 68 to mean court costs
(filing fee, witness fees, deposition expenses, etc.) but not attorneys fees. In addition,
the Supreme Court has held that, at least in federal question cases, federal courts should
apply the so-called American Rule on attorneys fees: absent a statute providing for fee
shifting, parties bear their own attorneys fees.
For many years, the state of Mythic has had a rule (Mythic Rule 68) that is identical
to FRCivP 68.
However, eight years ago, in response to lobbying by the Mythic Bar
Association, the Mythic Supreme Court adopted an additional rule known as Mythic Rule
68A. Mythic Rule 68A is identical to FRCivP 68 except for the addition of the highlighted
words:
Mythic Rule of Civil Procedure 68.
Offers of Judgment in Legal Malpractice Cases
[A] party defending against a legal malpractice claim may serve upon the
adverse party an offer to allow judgment to be taken against the defending
party for the money or property or to the effect specified in the offer, with
costs then accrued. . . . If the [offeree rejects the offer and the] judgment
finally obtained by the offeree is not more favorable than the offer, the
offeree must pay the costs and reasonable attorneys fees incurred after
the making of the offer. [emphasis added]
Clark Client sued Laura Lawyer for legal malpractice in the United States District
Court for the District of Mythic, asking for $1,000,000 damages. Federal jurisdiction was
based solely (and properly) on diversity of citizenship. Laura served a proper offer of
judgment in the amount of $10,000 which Clark rejected. At trial, the jury found Laura
liable but awarded Clark only nominal damages of $1, and final judgment was entered in
that amount. (Thus, the judgment was less favorable to Clark than the offer.) Laura then
asked the court to apply Mythic Rule 68A and award her $8,000 as the reasonable
attorneys fees that she had incurred after making her offer of judgment. (Laura had hired
and paid another attorney to represent her in the suit.) All parties agreed that Laura would
be entitled to recover the $8,000 if, but only if, the court applies Mythic Rule 68A. They
also agree that, if any state law should apply, it would be Mythics. The case has worked
its way to the United States Supreme Court.
You represent Laura in the United States Supreme Court. Explain why the Supreme
Court should require the district court to apply Mythic Rule 68A. Be sure to set forth all
non-frivolous arguments for your position and deal with all non-frivolous arguments against
that position.