Civil Procedure Outline
Professor Wax
I. Personal Jurisdiction -- In what states the plaintiff (P) can sue the defendant (D).
It’s a geography question. History of interplay between two bodies of thinking of
calling people into court: 1) territorial; 2) minimum contracts/due process
(functional). The second set of concepts is more suited to modern concept of
corporations and mobility. No one time period when courts moved from one set to
another (though International Shoe was a turning point). Two ways PJ can be
established: power over D and power over D’s property. Constitution due process
clause sets outer limits of jurisdiction. The states must pass a statute to exercise the
jurisdiction the Constitution gives them. Two steps in determining PJ: 1) statute and
2) due Process – to see if jurisdiction is constitutional. Why are state courts not
general courts of personal jurisdiction, in addition to being that of subject-matter
jurisdiction? The issue of personal jurisdiction comes up with D, not P (who brought
the case to that court in the first place). The state and its citizens were viewed as
having a relationship that was similar to a country and its subjects. The focus was on
a physical presence within the borders of the state. That wasn’t changed much when
the concept of a federal government was imposed on it. There is a dual aspect to
asserting personal jurisdiction (one being the procedural process and the other the
abstract concept of a court having power over the person). The process is a way of
showing the court’s power over you. The requirement of notice is implemented by
the system of service of process (Rule 4). The personal jurisdiction concept has to be
valid for servicing a process. Both are needed. The Federal law tracks the state law
pretty well with respect to the law of personal jurisdiction. One of the reasons for that
is to make it no harder to get personal jurisdiction easier in one system or another.
Three Common Law Forms of Personal Jurisdiction
All three forms are still alive in state law. In personam is authority to invoke any dispute
over a person (any dispute involving a person). The other two categories come into play
when a person has property and when that property is within the territory of the sovereign.
The doctrine of quasi in rem was initially developed to deal with real property. With
quasi in rem, liability is limited to the value of the property.
 in personam
 quasi in rem (hybrid between in personam and in rem)
 in rem (taking control of property; “in situs” – in place)
In quasi in rem and in rem, the liability is only up to the value of the property; it is a sort
of a compromise as to the recovery of some damages vs. none.
In rem – is cases where the dispute involves the property; therefore, you can satisfy
liability if it is composed only of the property’s value (forfeiture).
Assertion of personal jurisdiction has two elements:
1) power to assert it
2) assertion of power through serving process (procedural aspect)
Traditionally, the process by which you asserted in personam jurisdiction was personal
service of summons on the individual and the person had to be in a certain place.
Asserting quasi in rem was historically a different matter – your power was over the
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property, that’s what you gave authority to adjudicate the suit. You would seize the
property (same as in rem). If you have movable/tangible property, you would go and
repossess the property. If you have real property, the way the government traditionally
does it is post a sign on the house’s door. If you served the property, the person owing it
didn’t necessarily know what was going on. There was the problem of fair notice. You
were charged with knowing about it on the theory/assumption that people keep track of
their property.
A. In Personam Jurisdiction – power over D. General v. Specific Jurisdiction:
In General Jurisdiction, P sues D for a claim that arose anywhere – it doesn’t
have to have arisen in the forum state; in specific jurisdiction, there is power
over D only for a claim that arose in the forum. Law suits arising out of
contact has led to categorization of special and general jurisdiction. The
nature and number of contacts are supposed to be greater for general
jurisdiction than for specific. Two constitutional imperatives are in conflict in
personal jurisdiction: 1)“full faith and credit” and 2) due process. Usually the
due process concern wins out. [No state is constitutionally required to have a
special appearance statute. You can force litigants to choose between
appearing and defaulting.] The law has developed in a way that it’s easier to
challenge a collateral attack because of constitutional violations in the first
decision. Therefore, the second decision shouldn’t continue to violate the
constitutional right of someone.
General Jurisdiction
Perkins v. Benguet, Rosenberg (case mentioned in Perkins), and Helicopteros are
the most important cases in this category. In Perkins, Philippines company and
proprietor of company essentially moved entire company during WWII. Perkins
filed suit with respect to stock problems, problem which had arisen prior to move
to Ohio. The court did not that law suit did arise from events outside the forum,
therefore, it was general jurisdiction. Yet, the court found that almost all the
business was carried out in Ohio (other than the mining) and said it was sufficient
contact. In Helicopteros (not clear it’s a general jurisdiction case), dissent said
there’s a distinction between “arise out of,” and “related contacts.” Brennan was
probably trying to say that this case was related to (?). However, he wanted both
cases to be covered under general jurisdiction. The majority said it would have
been P’s job to question general v. specific jurisdiction (specific would have been
easier to prove – in general). In this case, the holding’s meaning wouldn’t be
affected much). The first thing court had to do was to see whether Texas longarm statute permitted general jurisdiction. It did. Then, the court moved to the
constitutional question. The contacts with Texas were:
1) negotiated – helicopteros (one trip)
2) Bell purchases/pilot training (relied on Rosenberg case, in which court said
that purchases – even repeated ones – aren’t sufficient to grant general
jurisdiction
3) Bank – Texas (checks written) (unilateral activity problem)
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These contracts weren’t enough to establish sufficient contacts. What can we
glean from this decision? The courts use this case to extract patterns in other
cases they have. Otherwise, it’s difficult to come up with a case ceteris parabus.
Pj law has a lot of ambiguity and, therefore, less black letter law in this area. A
lot of legal skill is knowing where you are in the spectrum of black, gray, and
white-letter law. You have to know not just what courts have said, but how sound
those decisions are. Although ambiguity is frustrating, in ambiguity lies
opportunity. You can be creative and take the law in the direction you want to go.
In the gray areas, courts often look for direction.
Sequence of cases: Pennoyer, 1877  Hess, 1927  International Shoe, 1945 
Perkins, 1952  McGee, 1957  Hanson, 1958  Shaffer, 1977  WWVW,
1980  Keeton, 1984  Hall, 1984  Asahi, 1987  Burnham, 1990. Burger
King is the flip side of McGee (the little guy vs. big guy in one and the other way
around in McGee).
Pennoyer v. Neff
 State boundaries (raw physical power)
 traditional bases of pj illustrated by Pennoyer.
1) D was present in the forum when served – giving general jurisdiction.
2) Domicile – in personam and general jurisdiction
3) Serving an agent in state
4) Consent – D can consent to jurisdiction (express or by waiver)
This was an attempt to make a collateral attack. One law suit was started at a later
time to undermine the validity of an earlier lawsuit. In case #1, Mitchell sued Neff
for legal fees in a state court. Oregon court got personal jurisdiction over Neff,
because he had property in the state of Oregon. It was a quasi in rem jurisdiction,
because the state suit didn’t involve the property itself. The state statute permitted
quasi in rem if the property was seized, and this was publicized in a publication.
There was publication, but there was no seizure prejudgment. D never appeared
and judgment was rendered for Mitchell. That was when the property was seized
and sold in an auction. At this point, Neff sued Pennoyer (who had bought the
property from Mitchell after the auction). Neff argued that the first judgment of
the state court was invalid for lack of pj over him. The argument he made for lack
of pj in the first place was that there was a problem with the affidavit given to him
– a technical fault (one argument available to him was that the property wasn’t
seized prior to the judgment; second argument could have been that there was
insufficient notice through the publication). The S. Court decided to reassess
what happened in the first case on its own motion. This is aberrant, because
generally appellate courts listen to earlier arguments, not make up their own. The
S. Court said there never was a seizure, but an in personam jurisdiction, which
didn’t pass the requirement of in personam service. The S. Court then started
discussing the 14th amendment to the Constitution (which had gone into effect in
the late 1860s, by the time this case reached the S. Court). The S. Court said that
due process was violated here by not according to the owner of the property all of
the rights due to him. The Court isn’t quite sure what to do with the due process
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right, but there are implications there: something unfair about reaching across the
state to someone who isn’t in your state, and service of publication is hinted to be
not quite adequate in a non-seizure case.
Individual deserves to be heard. *Pennoyer was the first case to mention the 14th
amendment with respect to personal jurisdiction and constitutionalizing it. The
consequences of Pennoyer were tremendous. The lower courts started to crack
through the rigid ways of prior methods (convention of presence) of reaching
across states to claim personal jurisdiction. Part of this was a result of business
transactions having spread across states – mobility, etc. They did this because they
wanted to conform to due process. This was the beginning of breaking out of the
formalities in favor of fairness. Pennoyer made it very tough to get in personam
jurisdiction. It was too rigid, however, as society became more mobile. For years,
courts decided to stress the Pennoyer ruling liberally (e.g. Hess v. Pelowski).
Hess v. Pawloski
Implied consent was one fiction used to show that someone consented to subject
himself to the jurisdiction of a court. Constructive Presence or Agency was
another fiction. The states said that by driving in a state, one consented to the
state’s jurisdiction through having either implicitly consented or having an agent
(in Hess’ case, the registrar of the DMV). Corporations were tricky as far as
presence was considered. This appointing of an agent is still true today. Hess
stretched Pennoyer.
International Shoe
 loosens up pj by making state lines less rigid.
 minimum contacts concept (buzz phrase) and fairness were the two issues
raised by this case – two prongs to the analysis. If they are met, pj is allowed
even if D isn’t served in the forum.
 This case did not expressly overrule Pennoyer. State lines are becoming less
important.
International Shoe case transformed the law to do away with the ambiguities.
(Many of the developments reflected the post-world war II era.) International
Shoe was being sued for back taxes for employment. The company employed
sales agents in Washington. In the initial action, International Shoe challenged pj
because it thought that it wasn’t present in the state and thereby hadn’t consented
to adjudicate disputes in the state. The S. Court thought that minimum contact
was sufficient for the state to haul the company into its courts so that the
company’s due process rights aren’t violated.
 Minimum contacts concept stated in International Shoe will come up over and
over again. The phrase itself doesn’t tell us how many contacts constitute
minimum.
 “Contacts sufficient to comport with traditional notions of fair play and
justice” is another phrase the court came up with. (This and the above concept
are gaps that the courts still try to fill)
 “undue burden” – what onus is too heavy and what isn’t. How various and
widespread a business’ activities are, the court said, considers what a business
expects to be undue burden or not (however, this is a bit circular).
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 reciprocity is another notion that appears in International Shoe (but only a
hint of it is present in the case). A company by operating in a forum in a sense
invokes the protection of the forum’s laws. These laws give the business both
benefits and duties. It’s reasonable, therefore, for the business to expect that
the state will call it to its courts in adverse situations.
 Taxonomy – a set of classifications or categories. The court says that in these
cases they expect to have jurisdiction:
1) continuity of contacts – cause of action arises out of those contacts;
2) continuity of contacts – but cause of action doesn’t arise out of those contacts;
3) less than continuous and systematic contacts (the court doesn’t rule this out).
The court leaves this question open.
4) non-systematic and continuous contacts, but cause of action arises from
elsewhere. The court throws doubt on whether these cases would be admitted
under personal jurisdiction, but doesn’t exactly preclude them.
Substitute of Service – Service on the person outside the forum, i.e., mailing
service, substituted service on an agent (in the forum).
The court tries to address this in an indirect way. It strongly implies that
substituted service would be alright, as long as there’s power and notice (to satisfy
due process). *It has shifted from formality to functionality. That eventually
becomes the standard for service of process. In the aftermath of this decision,
states moved to pass long-arm statutes (some preceded the International Shoe
case). The states adopted all kinds of substituted service or even allowed people
to go outside the state and serve people with service (as long as there was fair
notice). Many went to the limits that were allowed. Not all long-arm statutes,
however, go to the limit that the Constitution allows, but all states have them in
varying forms (Massachusetts is an example of a narrow construction). There’s a
tremendous amount of interplay of long-arm statutes which is arbitrated by state
courts. The federal court isn’t the final arbiter of that long-arm statute. It has to
take its cue from the state court (highest state court). If the highest state court
hasn’t yet decided this issue, the federal court tries to decide the case in the way
the state would have. States have interpreted their long-arm statutes broadly to
protect their residents rights to in-state jurisdiction (and more cynically, to
broaden their own power). First, courts read the statute to see if there is a case for
substituted service and then see whether due process isn’t violated.
Gray v. American Radiator & Standard Sanitary Corp.
One of the first cases to tackle the long-arm statute and apply it with respect to
International Shoe, as well as deal with the stream of commerce cases. Titan was
also being sued. Titan was an Ohio corporation who didn’t have much to do with
Illinois. The manufacturing of the water heater took place in Pennsylvania and
then shipped to Illinois where it was sold. The tortious act could mean that the act
was committed there or the consequence of it occurred there? (check) There
wasn’t anything in the facts to show that Titan did a substantial amount of
continuous activity (steady stream of activity) in the state. It (who?) inferred that
there was a lot of activity, but ultimately it shifted to another implication. This
was that Titan had somehow deliberately channeled its products into the state.
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There was also a reciprocity issue. Gray suggests that it might be possible for a
single act to be enough for the minimum contact if the circumstances are right.
Gray is famous for bringing up the forum-regarding notion. The forum has an
interest for providing a place for the plaintiffs. There is also the interest of
providing a place for our own to adjudicate – convenience. These considerations
are introduced in Gray. Gray shows that when a corporation sells its products for
use in another state, it should be aware that it might be called to answer to charges
in that state. Fair play (or notice?) is not violated. This is the concept of forum
reciprocity.
McGee v. International Life Insurance Company
Jurisdiction upheld even though one contact was established with forum:
1) solicitation (of business)
2) state’s interest (to provide forum for its people)
3) relatedness (between D’s contact and claims itself) – this can make up
for lack of much contact with state.
This case deals with what happens when you have a contract concluded between
entities in two states – something that Gray doesn’t deal with (Bilateral contract
problem). McGee sued the International Life Insurance Company, which had
taken over Empire Mutual’s obligation. The Unauthorized Insurer’s Process Act
– Long Arm Statute for insurance companies. If D doesn’t do what the court
orders, P gets an enforcement order for the judgment. In this case, the plaintiff
had to go to Texas to enforce the judgment. The Texas court refused to enforce
the judgment, basing its decision on lack of personal jurisdiction. D claimed that
the California courts couldn’t assume jurisdiction over International Life without
service of process within its boundaries. The S. Court ruled that there was
sufficient contact with California to satisfy the International Shoe standard. The
Court stressed that both expectation and convenience factors would militate
against this. The status quo seemed to create the expectation based on realities of
modern commerce (somewhat circular reasoning). Whatever contacts exist
acquire a heightened significance, because the company decided to deliberately
continue contacts by mail with the insured – “purposeful availment” idea.
McGee is one of those cases where you can’t remember how it came out if you
haven’t read it for a while. This is because personal jurisdiction doctrine is
somewhat ad hoc. Forum-focus factors play away from the defendant’s interest
(i.e. convenience).
Hanson v. Denckla (1958) (collateral attack case)
Supreme Court said Florida didn’t have jurisdiction over Delaware Bank, because
there was no relevant contact – no purposeful availment (important buzz word for
forum). She has to reach out to the forum in some way. The Delaware Bank
never reached out to Florida. The court pulled back a little from McGee’s
expansive ruling of personal jurisdiction. The court found that a party was an
indispensable party (according to Rule 19), and the case couldn’t go forward
without the trustee. In the Florida case, the two daughters got a judgment in their
favor; they won. The trustee was served through substituted service. Before this
case went to court, the Bank had brought an action for the settlement of the trust,
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suing the inheritors (the two daughters). The trustee wanted to honor the
beneficiaries of the original trust. Before the Delaware case was decided, the two
daughters said that the Florida case had already established the case – Res
Judicata. The Delaware court said that there had been no personal jurisdiction in
the Florida case (similar to Des Moines case, where it was claimed that the court
didn’t have subject-matter jurisdiction). Personal jurisdiction is waivable, and it
seems strange that a validity of judgment would be declared void. If you don’t
obtain personal jurisdiction over someone, technically, they don’t have the
opportunity to be heard. Therefore, a violation of due process occurs. The
Delaware court refused to give full faith and credit to the Florida ruling. The
Supreme Court took up both cases and decided that the Delaware case was the
valid one. Why is this case different from McGee? The court said that the trustee
in this case was completely passive with respect to where Mrs. Donner was finally
going to live. She unilaterally decided that herself. There really was none of that
“purposeful availment” that the court saw in McGee (no reaching out to a person
in California as in McGee). Hanson stands for the proposition that action has to
be volitional and you can’t substitute foreseeability there. Hanson leaves us with
an open question as to how this dichotomy plays out in the stream of commerce.
International Shoe (and Gray?) set up the minimum contacts test and focus on
fairness and burden on D. McGee and Hanson deal with a contract context – a
single contract/transaction sufficed to establish minimum contact (especially if
played over a long period). Forum-specifications? Come into play that don’t fit
under the due process clause.
World-wide Volkswagen Corp. v. Woodson (1980)
No jurisdiction because no relevant contact between the Northeast companies and
Oklahoma (similar to Hanson). Contact cannot result from unilateral contact of a
third party. D should reach out to the forum (check). Foreseeability relevant, but
foreseeable is related to being hailed into court in the forum, but not that the
product will end up in a different forum. Supreme Court implies that there might
have been jurisdiction in a state closer to New York. Robinsons sued Audi, the
importer, WWVW (NY, NJ, CT), and Seaway (NY retailer). Robinsons expected
better judgment from a state court, rather than a federal court (possibly thinking
they would get better damages). D went and got a writ of mandamus to quash the
service of summons. Some states have this writ of mandamus. Judges then issue
other judges to do something. The S. Court of Oklahoma denied the writ. The
U.S. S. Court tried to distinguish the foreseeability of end products being in a
particular state from being haled into that state. The court waffled on other
automobiles ending in Oklahoma, that were sold by the dealer. On the other hand,
they didn’t know. Not knowing cut in the opposite direction as of the case in
Gray. The S. Court said that something more is needed than entering the stream of
commerce. The court distinguishes this case from Gray. In Gray, there was a
final product sale in the state. The court tried to connect this with purposefully
availing oneself, etc. The cluster of criteria used as a test in VW didn’t really
have control over where the products ended. The court didn’t like the idea that
selling something meant that personal jurisdiction would exist in all 50 states
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(roving chattel). In Gray, the court felt the problem wasn’t as roving? (In Asahi,
the distinction sort of died.) Worldwide VW tried to strengthen the
volitional/purposeful availment test and to apply it to the stream of commerce. In
the case where a product is simply brought into a forum, but not sold there,
personal jurisdiction isn’t necessarily present. The court also tried to bring in
other factors needed to assert personal jurisdiction. It separated minimum
contacts from traditional notions. In deciding whether the assertion of personal
jurisdiction is fair, the court can look at these notions (see mid p.104). These
factors give us additional reasons, if we have minimum contacts but our case is
borderline, to assert personal jurisdiction. If there is no minimum contact, then
we don’t meet the threshold. However, it’s left open whether if there is minimum
contact, can the court decide to still not assert jurisdiction based on the other
notions.
Keeton v. Hustler
The lower court said no personal jurisdiction, because plaintiff lacked contact
with the state. The Supreme Court took it up to show that personal jurisdiction
isn’t plaintiff’s contact with the forum, but the defendant’s contact with the forum
(fundamental conceptual error on the lower court’s part). Volume of publications
in New Hampshire was substantial and enough to establish minimum contacts.
Plaintiff’s contacts with the forum are supposed to just serve as a plus factor –
they can’t defeat personal jurisdiction where minimum contacts by defendant
make it possible. Wax: not sure if this is good law, because of what we’ll see in
Asahi.
Burger King Corp. v. Rudzewicz
 emphasizes that contact and fairness are separate prongs. There has to be
relevant contact, otherwise, fairness alone won’t give you jurisdiction. This
case discusses the fairness factor more clearly than the other cases. Burden is
on D to show that jurisdiction is unfair. It’s a very tough burden. You have to
show that you would be at a severe disadvantage in litigation. Burger King
sued Rudzewicz (from Michigan) in federal court in Florida. R had fallen
behind on his payments. Rule 4 tells us that we look at the statute of the state
in which the court is sitting. This is a breach of contract case. How is
minimum contacts decided in this case? Direct dealings between the
franchiser and franchisee took place in Michigan. The question is whether he
was dealing enough with Florida to establish minimum contacts. The court
says that the corporate relationship is what matters, not the day-to-day
contacts. Ultimately, that corporate relationship was taking place in Florida
and its effects would be felt in Florida. Burger King is combining the stream
of commerce concept with the contract concept. The business ended up in
Florida. “Choice of law” clause – you can agree to choose which law would
apply. Florida was the locus of all the dealings and Burger King wanted
Florida law to apply. R, as a businessman, could have seen that. The court
tries to emphasize that it’s not talking about foreseeability, but purposeful
direction (which R. should have known about). The factor analysis, however,
is wishy-washy. In Burger King, the court talked about individual consumer
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contracts [or contact?] (ordinarily consumer relationship won’t be enough
contact to subject you to a far-away court). However, it ought to support
jurisdiction the other way too (as in McGee). One way out of this dilemma is
to say that the relationship isn’t symmetrical. To the extent that pj allows you
to have some expectations, then the McGee relationship isn’t symmetrical
[check]. We can give some weight to selling and purchasing functions. When
one is doing business, it’s easier to think that one might be subjected to a
faraway place. The very same types of contracts can have different effects
depending on who’s involved, size of parties, direction of contacts.
Asahi Metal Industry v. Superior Court
 Stream of commerce case (Brennan wing said if the product is in the stream of
commerce and we can anticipate it will get to the state in question, there is
minimum contact; O’Connor wing said there has to be purposeful contact).
This case didn’t give us new law. Wax: very dissatisfying result. Zurcher
sued Ching Shin, a Taiwan company, who then brought in Asahi, a Japanese
company. This is a classic third-party complaint. Asahi and CS were left in
the suit. Asahi sought to be removed from the case. Sales to CS by Asahi
were small percentage of Asahi’s sales. Sales by CS in California were more
significant. The court said this wasn’t like WWVW (the case resembled
Gray). The S. Court’s ruling was divided in several parts: the minimum
contacts part got plurality of votes; the part on other factors is the only part
that really explains the court’s opinion. Plurality opinion is one that agrees
with the bottom line and gets most of the votes for what is the result of the
opinon? This part doesn’t represent law of the land (only 4 justices voted for
it). [look up] Majority opinion [look up]. O’Connor implies that the Court
doesn’t really care about minimum contacts because other factors make it
unjust to call Asahi into court. The Court used these other factors as a minus
in the calculus. Concurring opinion, [look up] where the justices who join
IIB, want to have their own say too (they are not entirely happy with it), saying
minimum contacts isn’t the end to all [check]. Asahi refines stream of
commerce argument made in gray, effectively repudiates it (consumer
bringing product into a state won’t hold as a blanket rule). O’Connor comes
up with a check list for what we need to look for:
 foreseeability and knowing the product will end up somewhere isn’t enough;
purposeful direction (i.e. designing product for a particular market –
contemplated)
 network for distribution of product in forum
 channels of contacts with customers in the forum.
When you are very upstream in the stream of commerce (like Asahi – valve
producer), you are unlikely to meet these criteria. Two idiosyncratic facts that
make Asahi a special case:
1) person who had the accident is out of the case; indemnity action (the main
hook tying the case to forum has dropped out);
2) Involves two foreign companies – extraterritorial actors.
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The Court says this is a special case because state’s interest is attenuated –
province of national government, rather than states, to deal with foreign entities
(unless there’s a very weighty or sufficient connection).
Burnham v. Superior Court (1990)
 general jurisdiction case. S. Court, by a vote of 9-0, upheld the jurisd.
 Presence by itself is enough (who said this?). Brennan said that in the three
days Mr. Burnum was in California, he availed himself of jurisdiction of the
state.
 The test for general jurisdiction: continuous and systematic ties with the
forum (Helicopteros).
 Contact between D and forum is the first thing we look at – not just any
contact, but it must be
a) purposeful availment (D reached out to that forum in some way), and
b) foreseeability – contact renders it foreseeable that D would be sued in
this forum.
 Fairness
c) Relatedness (from McGee) – even if there was a small amount of
contact.
d) Convenience (from Burger King) – burden on D and it’s a tough
burden (show you are at a severe disadvantage in the forum)
e) State’s interest
[stream of commerce issue hasn’t been resolved; four justices agreed to
one school of thought and four to another.]
First thing we have to look at for pj are statutes. They vary enormously from state
to state. Every state has in pj statute. Second statute – domicile (all states have
this too). Both are clearly constitutional.
 There are a series of statutes relating to corporations: incorporated in the
state, then there’s pj.
 Also, some states have statutes regarding doing business in the state.
 non-resident motor vehicle statutes, but this is a specific statute – only
jurisdiction for crash.
 Toughest statutes are long-arm statutes. These are going after someone out of
state. California long-arm statute goes as far as the Constitution allows. Most
states list various activities in the state that subject D to jurisd in the state
(laundry list). These statutes are specific jurisdiction. Classic examples are:
D transacts business in forum, D enters a contract in forum, D commits a
tortious act, some statutes cover insuring a risk in the state, having
matrimonial domicile in the state, etc. If the long-arm statute basis isn’t met,
there’s no jurisdiction. (In any specific jurisd case we have to have
relatedness.) Mrs. Burnham wanted to file for divorce in California. The
California Supreme Court held that temporary presence in California was
enough to serve Mr. Burnham with process. The Supreme Court upheld the
ruling, but each justice gave a different rationale. Scalia starts with the
contention that International Shoe has to govern. However, he says that Int’l
Shoe isn’t about this case, but rather about a case where the defendant wasn’t
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present. His second argument is that even if Int’l Shoe applies to every type of
in personam jurisdiction and therefore to this case, *by definition minimum
contacts test is always satisfied when a person is present. Traditional forms of
fair notion and justice, that traditional notions are by definition fair – that
they’ve never been questioned. He uses historical examples. He looks to
history to give content to the phrase, “traditional notions,” because he thinks
it’s less able to be manipulated by judges as compared to those who enacted
the constitution and amendments (this fits in with his political philosophy).
Why is Shaffer such a thorn in Scalia’s side? Marshall said that jurisdiction
won’t be accepted just because it meets traditional notions – that it had to be
adapted to fit the contemporary standards of Int’l Shoe (?) Scalia responds to
this that a functional test only applies to where the person isn’t present (but his
property is), as opposed to a person who isn’t present (and his property isn’t as
well). (Wax: not entirely successful attempt on Scalia’s part). Traditionally,
the law did draw a sharp distinction between presence of person and property.
Brennan dissent attacks Scalia. One argument he makes is that Scalia
interpreted Shaffer wrong. Ultimately, Brennan comes down the same way
(despite not agreeing with Scalia’s reasoning). Brennan says that by coming
to California, the personally availed himself of the state’s services (even if it’s
temporary). Scalia argues that these examples never constituted minimum
contacts. Brennan is actually lowering minimum contact statndard. Scalia
says how are the two arguments different in effect – i.e. presence in of itself
makes Service possible. Scalia doesn’t like Brennan’s formulation because
it’s not clearcut (i.e. you are present). Brennan leaves open the possiblity that
at some point someone’s presence isn’t enough, and Scalia doesn’t want it to
be left to judges to decide this. Tag jurisdiction is still alive after this case, but
we don’t know where, when, etc.
[Tickle v. Barton (check to see if this case fits here) -- According to USC 28
§1332 c, a minor can sue in federal court by means of a guardian. Coleman was
the agent of Barton. The lower court had not resolved the issue yet. A plea of
abatement (a rule to dismiss) was presented. “Insufficiency of Service of Process”
was the reason – or lack of personal jurisdiction (Rule 12). In response to the plea
of abatement, the plaintiff filed a demurrer – a motion that objects to or asks for
an overruling or a denial of the first motion, opposing it on legal grounds
(implicitly it does not contest the facts). Tickle could have brought the current
case to a court in Virginia, rather than West Virginia. He probably wanted the
case in the place where the accident took place – easier to gather the evidence, get
the witnesses. The plea of abatement claims that the jurisdiction of the court was
procured by fraud and was, therefore, invalid. It would have been valid had it not
been served by fraud. Traditionally, the power of the court to extend jurisdiction
extends at least as far as the geographical boundaries of the sovereign that created
the court. e.g. if someone has an accident in W. Virginia, the court of W. Virginia
has jurisdiction. Two parts to asserting personal jurisdiction: 1) have the power;
2) serving process. Most of Rule 4 (under the Federal system) is for serving
process. In 1994, a case questioned that whether being in a certain place
11
temporarily made one part of the personal jurisdiction of that place. In Tickle v.
Barton, D won the motion brought against his plea of abatement to be demurred.
Tickle sought to bring the case to the higher court and Barton agreed. Had it not
been appealed, the trial court might still have had more business based on the
demurrer. Under the old rule, if you made a demurrer motion, you waived your
rights to contest the facts if you lost. In the alternative, it would have been
possible? (see Rule 8e (2)) [check]That evolved to the Rule 8e(2), you reserve the
right to contest the fact at a later stage. The implication of the court statement
(trial court) is that he {who?} reserved the right to contest the facts. In the federal
system, that would be an interlocutory appeal, because the case had not been
resolved. Special Appearance v. General Appearance – even though you are in
court, you are only there for contesting the power of the court to bring you there.
You can choose, however, to make a general appearance. By doing that, you
waive your right to object to personal jurisdiction (another way is to let the time
pass to object to personal jurisdiction – Rule 12. The second way is to appear in
court and file no motion to waive it.)]
 B. In Rem and Quasi in Rem (QIR) – It has become less important as in
personam pj has expanded. Difference between in rem (dispute is about
property – who owns it, for example) and QIR (a dispute that would normally
go in personam, but we can’t get in personam. So, we use the property to get
jurisdiction (as in Pennoyer v. Neff). Since Pennoyer, there has been creative
extension of quasi in rem and in rem jurisdiction to property, modern and
mobile forms of property (stocks, insurance policies, bank accounts). Partly as
a result of this extension, there have been disputes on the issue based on due
process. Long-arm statutes are in personam jurisdiction; here attachment
statutes are important. What do we do about the constitution issue here?
Quasi in rem in federal courts is governed by new Rule 4n (a rule about when
you procedurally can’t serve summons on someone). Rule 4n may be given a
little more substantive context, in that it also applies when the state long-arm
statute isn’t long enough. It extends to the federal court the same option as to
the state courts with respect QIR. It cuts down on forum shopping. The
procedural problem is better an explanation for Rule 4n, according to
Professor Wax. [know Rule 4 and read Tetley for understanding the rule]
Harris v. Balk
Balk owed Epstein $340; Harris owed Balk $180. Harris was in Maryland so
Epstein instituted a garnishing procedure to collect his debt from Balk. He served
Harris with some papers to let him know that he was asserting attachment and
summons for $180. He posted notice on the courthouse door for Balk. Immediate
object may have been to get money held by Harris, but his ultimate interest was
Balk’s money. Pennoyer had suggested that there was a separate requirement of
notice needed to fulfill constitutional requirement. There was an implicit
understanding that attachment of property alone might not cut it. Harris paid
Epstein the money. It was settlement (no contesting). Epstein in effect sued Balk
quasi in rem. Harris basically settled a quasi in rem action for Balk (same thing if
12
instead of money, it had been a house or other property). Balk sued Harris later in
North Carolina for his $180. Harris said the case had been settled. Balk was in
effect collaterally attacking the Maryland judgment. Balk said that Maryland had
no jurisdiction over it because the debt was in North Carolina, not MD. S. Court
ruled that debt follows the debtor. No constitutional issue brought up by Balk.
What is the problem with Harris v. Balk? Where you have a body of property
over which you don’t have complete control, it’s very easy to lose control of it
without notice. That’s a problem of due process. The second reason is that the
property has legs and moves. You can’t control where it goes. It goes wherever
Harris goes; Balk can’t control it. His property goes there without his knowledge.
This problem doesn’t occur with real property (which is fixed).
Shaffer v. Heitner (1977)
 minimum contact analysis had to be carried here too.
 overruled Harris v. Balk.
In true in rem cases, the presence of property in state will probably meet minimum
contact (not QIR). So Shaffer sounded a little more sweeping than it was. This is
about a quasi in rem action. The property that is the basis of jurisdiction and will
ultimately satisfy the judgment is not the property that the parties are here fighting
about. Essentially, they are fighting about what the officers did. The site of stock
is place where it’s issued, according to the Delaware statute. P had this stock
sequestered, putting stop on transfer of stocks (freezing the stock). The officers
challenged this on the basis of sequestration being against due process; also that
under International Shoe, they didn’t have sufficient contacts with Delaware.
They said that the Int’l Shoe standard wasn’t met here. Their only relationship
with Delaware was that they were officers and owned stock in the company. The
court said there was no necessary relationship between the two. The corporation
didn’t require its officers to hold stock. Court said that Int’l Shoe standard had to
be met in order to meet recognition of interest in someone’s property (check).
The court pointed out that tradition of quasi in rem no longer held. There had
been an evolution that you needed notice constitutionally (as in Mullane case).
The court said that mere seizure of property wasn’t adequate notice anymore. The
Court said it wasn’t saying that quasi in rem couldn’t go forward in all cases. In
cases where property being seized (and those including fixed real estate and by
extension probably those quasi in rem would be safe) is the property in the cause
of action, case could go forward. If the dispute was grounded in the forum, but
the person had left the state, in quasi in rem might be possible? Quasi in rem
conforms to general jurisdiction paradigm. In rem conforms to specific
jurisdiction paradigm. To say that something is quasi in rem meets minimum
contacts is a stretch. Special appearance options now exist in most states. Just
because you stay away from a case, default, and then attack collaterally on another
case doesn’t mean you will win. The second court will evaluate the adequacy of
the first case and determine whether it was rightly decided or not. Quasi in rem
(QIR) and in rem jurisdictions with respect to general and specific jurisdiction –
QIR is more like general jurisdiction, whereas in in rem, the property that gave
rise to jurisdiction was the same as the one giving rise to the action. However,
13
QIR doesn’t always have to correspond to general jurisdiction (although in rem
always corresponds to specific jurisdiction) [check]Sometimes, in personam
jurisdiction isn’t met, but enough minimum contacts can be established through
quasi in rem – as the above hypothetical shows. In the 1993 revision of Rule 4,
the service of summons procedures were supplemented to ease the procedural
difficulties of serving process (mainly by being able to leave it at their home).
However, when people can’t be found, quasi in rem can help. Another case is
where you have contact with the country, but not with any one state (property can
be attached). Main two reasons QIR is helpful are:
1) problem of short long-arm statute and
2) person can’t be found.
In Shaffer, the proposition that the location of a real property in a state is
sufficient to establish minimum contact with the state has never been tested (not
in S. Court). The connection between QIR and in personam jurisdiction is
particularly close in Shaffer, because Delaware didn’t make a provision for
limited appearance, which is all the more reason why in that case the court felt
QIR was close in personal jurisdiction (?) What is a limited appearance? An
appearance you make on the merits of the case. You’re not just disputing the
jurisdiction. If you lose, they can only satisfy the judgment out of the value of the
attached property (amount of judgment limited, but generally, other litigation may
be allowed to collect the rest of the money). Special appearance – to dispute
jurisdiction only [look up] If no limited appearance is allowed and you stay after
disputing the jurisdiction to question the merits of the case, you are treated as if in
personam. The QIR hook drops out of the case in such a situation. Special
appearance is made first, and then you can make limited appearance (they are like
serial moves).
 Fall-out from Shaffer was that defendants began challenging all the procedures
from the International Shoe case.
C. Two Lines of Authority With Respect to Personal Jurisdiction
1. Strict View (like Tickle) – if you are present within the territory of the
state, the state had authority over you. That evolved in times when there
was a sovereign entity perspective – purely power-based.
2. Modern view (in International Shoe Case) -- Functional concept rather
than borders, sovereignty, geography. It looked at the relationship
between the defendant and the citizens of the sovereign (rather than where
the defendant was). 1945 is when this theory gained momentum.
Mobility is one important thing that happened. After 1950, people no
longer stayed where they were from. People committed acts in one court
and then moved away. The court couldn’t do anything about it. The
second thing that happened was that business became national – spreading
around. The corporations or individuals summoned challenged the
validity of those laws. In the process of upholding some of these statutes,
the Supreme Court had to determine the constitutionality of no limits.
This “functional contracts” theory became very oriented to the fairness of
the person being summoned (of “fairness to the little guy”). Recently, the
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problem has come in trying to harmonize these two types of cases (which
are generally inconsistent with each other). That puts us on a collision
course with the strict physical presence/territorial analysis. Does the
functional contact supersede the territorial analysis, or can they coexist?
D. Consent [should this be a new category]
Party foregoes objection to personal jurisdiction:
1) Consent by fiat (fiction) (e.g. Hess v. Polasky) (some examples are automobile
cases by driving into state you consented to being under the jurisdiction of the
state, or registration of companies to do business in a state. Some of these
registration requirements have been challenged along the lines of Shaffer (see
p.179) and some have been struck down)
2) Consent by waiver
3) Consent by contract
Rule 12 in the federal system governs objection to personal jurisdiction. The
procedures for objection are listed in Rule 12. Read Rule 12g + h carefully, strict
time and amendment limits on the waiver. If the court makes a discovery order to
you, you have to comply or it is tantamount to a waiver, e.g. Insurance Corp. of
Ireland
 forum selection clauses (for consent by contract) – selects place where dispute
will go arising out of the contract by mutual consent.
 Choice of forum clauses v. choice of law choices -- This isn’t automatic (i.e.
that the case will go to that forum or law). The contract has to be interpreted.
States decide which choices to honor (they have different contract
interpretation laws). The forum that is chosen by a party (outside the forum
designated in the contract) has a choice of whether to honor the forum
selection clause or not. Even if the party takes it to the designated forum, that
forum has still a choice to decide. [So why do we have these forum selection
clauses?] The S. Court hasn’t cleared up this on the federal level, because
almost all of its cases are admiralty cases. Two examples are Bremen and
Carnival Cruise -- S. Court said the clause would be honored because it
would interfere with international economic business. In Carnival Cruise
lines, the little consumer is against the big company. The Court still honors
the clause, for the same law and economic reasons. Consumer is getting
something for its agreement – a lower price. S. Court has been very favorable
to the forum selection clause. The judge has a huge amount of discretion in
deciding how the issue of personal jurisdiction will be procedurally resolved.
The judge has to hold a “mini trial” to resolve the procedural issues. The
plaintiff still bears the burden of proof. Sometimes, the issue of pj is so
intertwined with the case that the judge will require some facts to be put up to
show prima facie case and in the process personal jurisdiction will be decided
along with the merits of the case. Limited appearance – there’s been a zig-zag
in the law. For a while, there was a move away from limited appearance.
There’s been a movement in the opposite direction in favor of allowing
limited appearance. Public choice – property owners within a state lose out if
there is no limited appearance. They prevailed in changing the trend.
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E. Jurisdictional Reach of Federal District Courts
Omni v. Wolff (1987)
Investors sued Omni, who sued Wolff and Gourlay. While the case was going on,
another court stated that there was an implied case of action based on the CEA
(like Court v. Ash). Was there personal jurisdiction for these British agents under
this statute? Under the old Rule 4, you could serve summons either by serving it
in the state, or if outside the state, it had to be through a special authorized statute.
Rule 4 now has made it easier to serve process (adds new methods), but it also
limits it to serving process where the state’s long-arm statute authorizes it (also
100-mile radius). The Louisiana long-arm statute only authorized effective
service over people who could be served summons ordinarily? (circular)
Everyone in this case agreed that the long-arm statute didn’t reach the two British
agents (what’s missing is a rule providing for a way to serve process). The Act
(CEA) did provide ways to serve process in other cases, but not in this instance.
The court argued that, therefore, the statute didn’t intend it. The court wouldn’t
do the legislature’s job. Also, the court said that convention had it that the state
could extend jurisdiction to those in the state, but not outside it. The court didn’t
want to disturb that convention, for which there were good reasons. Rule 4k(2)
solved half of this problem. In some respects, Omni is an obsolete case. Rule 4
was revised partly in response to Omni. Omni Problem: It’s not necessarily
presented by Omni; Rule 4k(2) was designed to solve the Omni problem. If there
is a foreign off-shore company, and we can’t get personal jurisdiction over that
company either because no state has enough minimum contacts with the company
or the state’s long-arm statutes don’t reach that entity. Why does it follow that
there is also no jurisdiction in federal court over that entity? State’s long-arm
statute is used in diversity and non-diversity cases, or the federal statute has to
specifically authorized personal jurisdiction and service of process. The federal
court adopts the state’s long-arm statute so that we don’t get forum shopping. The
Omni problem is only considered a problem when the foreign entity has enough
contacts with the United States as a whole (aggregated) that would allow pj. At
the time of Omni, this aggregate contacts wasn’t calculated. The aggregation
factor assumes that you can aggregate minimum contacts (a large assumption).
Rule 4k(2) – you first have to go to the place where there’s jurisdiction before
invoking this rule. In, Omni there might have been another state that might have
had jurisdiction over this case. If this had been the case, the plaintiff would have
had to go to the other state and couldn’t have invoked Rule 4k(2). Because of
transnational nature of commerce, a lot of offshore companies do business with
U.S. citizens. Unless you could aggregate these contacts, the small investors, etc.
couldn’t get relief. In Omni, if the foreign company couldn’t be tried in NY due
to lack of minimum contacts, it could litigate anywhere (personal jurisdiction isn’t
geographically limited, except that there are other considerations limiting
jurisdiction, i.e. venue). The federal courts haven’t established how much
minimum contact is enough. Blackmun suggests that legislature could solve this
through statute. Would Rule 4k(2) survive a constitutional question? In Stafford
v. Briggs (p.187), Justice Steward responds to this question. He says it’s alright to
16
have the national aggregate minimum contact test (check). Scalia, rather than
Brennan would probably agree with this reasoning. The Omni rule is a sort of
extra-territorial service of process. Traditional notions of fair play and justice
wouldn’t be able to be used to justify Rule 4k(2). It would have to be analyzed
only through International Shoe standard. Nation-wide service of process, unlike
tag jurisdiction, is a fairly new creation, and Justice Scalia wouldn’t be able to use
that historical, traditional argument. Do the cases that expand and flesh out
International Shoe concept create an unfair burden for the defendant? Nationwide service of process comports with International Shoe if you are in federal
court, but not in state court; that would be creating two different standards?
II. Notice – Service of Process and Opportunity to Be Heard – Due Process requires
notice to D (in addition to jurisdiction).
Providing Notice and Opportunity to be Heard
Personal Jurisdiction can be deconstructed into four pieces:
1) power
2) process
3) notice
4) requirement of opportunity to be heard
Lack of any of these means that there is a potential defect in pj. Notice is always
adequate when the person receives some sort of information about the lawsuit, not
necessarily when D just happens to find out about the notice (they may have found out in
some fortuitous way). The question is how D found. Personal service of properly
constituted summons is adequate (gold standard against which everything else is
measured in notice). Conceptual dichotomy:
1) Old-fashioned formalistic law of notice, looking at the formal steps (not asking
whether it would actually work); rigid categories; Three categories of service
a) in personam
b) quasi in rem
c) in rem (QIR and in rem have basically the same forms of notice; for these two the
accepted form used to be attachment (and posting of property) and publication
2) functional view – modern
There was a convergence in the law of notice to bring all the forms in one
direction/standard. Everyone was to have the same benefit. This is the trend coming to a
head in the Mullane case (like an Int’l Shoe case for notice).
 Modern movement toward equality.
Opportunity to be Heard
Law what is an adequate opportunity to be heard has developed in two types of cases:
1) government benefits cases (involve a modern type of property – not what we
ordinarily think about with respect to property, but rather based on entitlements
deriving from government programs.
The cases involving efforts of creditors or Ps to get your property for possibility of
defaulting or for other judgments (so they could seize the property when the court ruled in
their favor). (E.g. Mennonite case and installment purchase loans)
Two legal issues:
1) Timing of the process – when is it due? Early, late, before, or after seizure?
17
2) What kind of process and how much process? What kind – who participates, who
gets to be heard, formal, face to face?
A. Rules -- Federal Rule 4 – Federal Rule 4 governs service of process in
federal courts. Service of process = copy of complaint and summons.
Summons is the symbol of the court’s exercising power over D. Rule 4 allows
personal service (handing over the service to the person in person). Key parts
of Rule 4 are 4(e) (service upon individuals within a judicial district of the
United States) and 4 (k) (territorial limits of effective service), as well as Rule
4(m) (time limit for service). Anyone who isn’t a party to the dispute can
service the complaint. Rule 4(e) …may be effected in any judicial district of
the U.S. 1) “pursuant to the law of the state…” or, 2) leaving it at their home
(no geographical limit). Rule 4k places a limit. Rule 4e(2) allows substituted
service, i.e. going to D’s usual abode and serving someone of suitable age and
discretion residing therein (some states’ rules are more specific). That person,
however, must reside there (babysitter, for example, won’t work). Rule 4(d) is
new (was added in past 2 years) and is basically a substitute of personal
delivery (waiver of formal service). The service of process can be mailed to D,
containing the waiver form. If D doesn’t return the waiver in the designated
time, then she will be served in person, but D has to pay for this extra cost.
Rule 4e(1) tells us that we can also use any method used in state court.
Methods of service used by the state can also be used. D’s agent can be
served. Corporations, for example, are usually served through their agents.
Under Rule 4K, a federal court cannot reach outside the state lines in which it
sits, unless a state court could. Federal courts use state long-arm statutes.
Rule 4k1(b) seems to say that process can be served outside 100 miles, but
that doesn’t apply for Ds, only for people joined later. Rule 4 (e) and Rule 4 (k)
= “piggy-back” provisions or little window from the federal rule to the sate
rule. Rule 4 (a) (form). Rule 60: Relief from Judgment or Order. You can
service a summons to a person according to Rule 4e, but it won’t do you any
good unless the court has personal jurisdiction over the person, according to
Rule 4k. If the service of summons is deemed insufficient, it could mean that
the procedure used was wrong, or that the court the service of summons was
sent to didn’t have personal jurisdiction over the case.
B. Constitutional Standard – Mullane stands for this proposition. Mullane says
that notice must be reasonably calculated to give actual notice under the
circumstances. Usually, personal service always meets that. The red flag
under Mullane is service by publication. It may not get to the person.
However, Mullane doesn’t automatically rule out publication. If anything else
can be done, publication isn’t constitutional. However, if person can’t be
found anywhere, publication may be ok.
Mullane
The transaction costs of small trust funds were too expensive, so a law was passed
in NY to create common trusts. Periodically, the manager of the trust would go to
the surrogate court to show that he had done a good job – settlement of accounts.
After this, no objections could be made to the manager’s handling of the trust.
18
Notice was publicized in a newspaper for all the beneficiaries. Someone is
appointed to represent the interests of this group of people – Mullane. He
objected to the form of the notice they had received. There was a lot of
uncertainty about what type of proceeding this was (in personam, QIR, or in rem).
The court didn’t decide on this – as to what category this was, but that it didn’t
matter in this case. The court said it didn’t matter that the case couldn’t easily be
categorized, because the court would establish a standard like Int’l Shoe’s
minimum contacts test. The notice should be the best notice practicable (a little
bit of fudge factor in this standard – an implicit normative judgment as to what is
practicable). There is an implicit balancing test in this rule (who to notify and
how, etc.) The court acknowledges that this will have to be a case-by-case
application. In a sense, this is like the Int’l Shoe minimum contacts test. The
evolution in notice is comparable and abandons the tier system previously existing
(QIR – one method of notice, in rem – one method, etc.) In Mullane, the court
distinguished the people who would have to be notified based on those whose
addresses were readily available and those whose addresses weren’t. Then, there
were those whose interests in the trust were conjectural (unborn grandchildren, for
example). The court said that an adequate form of service for those whose
addresses were know could be mailed notice. The court is acknowledging that in
personam service doesn’t always have to be the case. For those whose addresses
aren’t known and the conjectural and unknown beneficiaries, a reasonable effort
has to be made to find them (sliding scale evaluation based on who we are trying
to find and availability of their whereabouts). The court realizes this isn’t entirely
satisfactory, but it states that the interests of these unfound people could be
protected by those who are given notice. This is thinking along the lines of class
action suits. Mullane lays the groundwork for validity of class action as a device
for vindication of group rights in serving notice. The court admits that it still has
to deal with existing body of law in QIR and in rem (seizing property and just
serving notice). The court says that in a lot of cases where property is seized,
you’ll find out because you are vigilant of your property. Whether this “fiction” is
leveled over by Mullane is unclear. The case didn’t quite settle this. In a way,
Mullane is a compromise. The court was worried that the wheels of commerce
would come to a halt if too extreme a rule was stated (if these sorts of financial
transactions can’t occur because everyone can’t be wheeled in). There’s a parallel
in Int’l Shoe, but a different sort of accommodation based on the post-war reality
of mobility. *Wax thinks that the two cases are a good set – legally and
conceptually.
Mennonite Board of Missions
In 1983, the Court grappled with the unfinished business of ---? This case is
designated as a QIR action. This is, however, really a tax issue. In this case, the
notice was by publication and seizure and posting (provides notice in one respect
and then provides jurisdiction – dual function of the same act). The court ruled
that the posting and publication were not good enough. Mailing notice to the
individuals was the preferred outcome – with the assumption that mailing notice
19
has a better chance of getting to a person (empirical assumption going under the
banner of a legal decision).
Greene
This case could be thought of a QIR case. Any judgment where the jurisdiction of
the court is procured by a seizure has now taken the flavor of a QIR action. The
court ruled that the posting and publication were not good enough. Mailing notice
to the individuals was the preferred outcome – with the assumption that mailing
notice has a better chance of getting to a person (empirical assumption going
under the banner of a legal decision). In Greene, it could be thought of a QIR
case. Any judgment where the jurisdiction of court is procured by a seizure has
now taken the flavor of a QIR action. The way that notice was provided here was
by mimicking the QIR notice. The court didn’t think the service of notice was
adequate. This is the flip side of Mennonite. The categories can’t be evaluated in
legal hierarchy, but an intensive factual inquiry has to be made. We would have
assumed that providing a posting on housing in which people live would be
adequate. This decision complicates the notice issue and created a lot more
uncertainty. It gave judges a lot more discretion (also agenda of protecting
tenants).
Fuentes
Stove and stereo bought on installment payments; consequence of default on
payment – right of repossession; buyer would lose whatever she paid at that point.
Security interest in items exposes seller to risk. Seller went to clerk of the court to
get writ of replevin. He needed conclusory statement that he had right to property
and Florida standard of “wrongfully detained” (a general standard) and security
bond. After the property left Fuentes’ hands, she filed lawsuit to get property
back because procedure was unconstitutional. S. Court consolidated case with
Pennsylvania statute case; other features of Florida statute:
1) bond; replevin is an interim remedy. Provisional proceeding. Doesn’t decide
who gets the property. Bond a form of attachment for benefit of initial
defendant. Security for case going against you.
2) Post seizure hearing (under FL statute, but not under PA statute)
3) Individual deprived of possession could get property back immediately by
posting their own bond. Supreme Court says there was due process here.
Interest the consumer is being deprived of is partial (only paid for part of item)
and temporary (time between property seized and time of full court hearing).
Although partial/temporary, interest still protected by due process. Because
private actions aren’t covered under due process, Seller didn’t go to buyer’s house
to seize property. Court relies on two methods of analysis: history and
understanding the underlying purpose of due process
1) historically always had right to hearing
2) process has to be accorded at the right time and by right measure. Concern for
legal accuracy. Want to make sure the legal basis for the action is sound.
Problems with ex parte proceedings:
1) Clerk of court issues writ. Doesn’t make any judgments. Paper pusher.
2) Conclusory statement and broad standard (wrongfully detained)
20
3) Incredibly one-sided. Self-interest. Contributed to inaccuracy.
Substantive vs. Procedural Due Process
Substantive: Result-oriented inquiry, e.g. the right to privacy
Procedural: Steps, hurdles, hoops to jump through to get to the ultimate outcome of the
case. (ultimately the substantive due process rights tell us what the government can and
can’t do to you – sets limits). Substantive due process is reserved for some categories of
rights that aren’t readily discerned by the Bill of Rights, for example. The Bill of Rights
gives us specific rights in many cases. The court in Fuentes comes out with a strong
statement against ex parte proceedings. It’s not just because one party is being heard, but
also because there has to be an impartial arbiter to hear both sides of the questions. The
kinds of information that has to be presented has to be of the type that a decisionmaker
can use to make impartial judgment. Conclusory evidence isn’t enough. The adequacy of
process has to do something with who is presenting information, type of information, and
[two more things]. In Fuentes, there’s a discussion of waiver (p.240). There was a term
in the contract which said that you could repossess. However, this could either be
interpreted broadly or narrowly. The court said that for waiver of constitutional rights,
there had to be no ambiguity. Therefore, none existed here. Courts have in general been
reluctant to allow these waiver clauses in contracts (unequal bargaining power).
Mitchell
In Louisiana, the process of seizure was called sequestration. The law was
different from in Fuentes. Factual determination had to show a lien (?) or interest
and then some form of event that allowed a claim in interest. Differences
between Louisiana and in Fuentes:
 judge
 facts
 statute
 post seizure
However, this case isn’t as distinguishable from Fuentes as the court would have
us believe. The judge and the facts may add to the process in Mitchell, but not
that much. The vendor’s lien existence doesn’t add such a distinction either (it
isn’t necessarily more amenable to paper work – documentary proof). In Fuentes,
the standard “wrongfully detained” was so broad that it wouldn’t be so cut and dry
in each case. This was a facial challenge to the law (concern for all other cases).
[check] The statute in Mitchell overall has less probability for abuse than in
Fuentes. [facial vs. applied challenge]
One-sided proceedings were deemed o.k. in Mitchell, because they didn’t harm
due process. After these cases (also in North Georgia), there was still ambiguity.
Matthews v. Eldridge tried to clear these ambiguities. [*Wax thinks this is a very
important case – one of the most important]
Matthews dealt with disability benefits (one of the benefits cases discussed
earlier).
The government did give Matthews a form of notice (They notified him of his
benefits coming to an end). The notice also invited him to submit additional
information.
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The state agency (Social Security office) determined whether disability benefits
had to be cut off or not (it doesn’t matter that the same agency that gives out the
benefits also determines whether one should continue to receive them).
The termination of benefits was a deprivation, but a temporary one. He could
trigger the procedure of reconsideration and then if he won, get retroactive
benefits. The problem here is one of timing. The majority concludes no
deprivation that violates constitutional rights.
Matthews Three-Step Test
1) Determination of private interest is important (Disability benefit recipients not as
financially dependent on the benefits as welfare recipients).
2) Risk of error of procedure (not kind of inquiry that benefits from evidentiary
hearing, but documentary evidence).
3) Spirit of Mullane and Int’l Shoe is coming around here in giving due process. In
Mullane, we confronted the problems of giving due process. The whole system
would grind to a halt if we required an evidentiary hearing each time a dispute
arose on disability benefits. Too much of a burden (same practical decision as in
Mullane).
The cases that come after Matthews represent a good test of whether the Matthews
test criteria were used.
Connecticut v. Doehr
No notice or hearing was given for attachment of Doehr’s home. A judge was
responsible for deciding whether there was a cause of action or not. In this sense,
this rule was a lot more like the Mitchell rule, than the Fuentes one. The situation
is a mixed bag of Mitchell and Fuentes facts. Court says here the inquiry focus is
different from the Matthews test in the respect that the dispute is between private
parties rather than between an individual and the government. The court believed
erroneous deprivation of property here would be substantial. In Matthews,
additional information wouldn’t help. Here, the nature of information is very
different. The only way we can know what happened is to hear from both of them
(in person in front of the jury). The additional proceedings are going to reduce the
risk of erroneous deprivation quite a bit. P just wants to make sure that he can get
his hands on the property if he wins the case and the defendant can’t pay damages.
The court says that the house is unlikely to go anywhere. The factors in this case
point to the pre-seizure attachment as being unconstitutional (not in every
application, for example, not in mobile property or during exigent circumstances).
It was inevitable that the court would rule as it did in the Daniel Good case. In
rem forfeiture proceedings were initiated by the government on supposed use of
the building for illegal drug activity. Seizure has dual aspect: provide damages
and the other is to secure jurisdiction. The court goes through the Matthews
analysis and says there’s no reason to seize the property and applies it as it did in
Connecticut v. Doehr. The whole purpose of seizing property jurisdictionally, the
court says, is to give notice. Does this spell the end of in rem jurisdiction? Court
doesn’t directly deal with this. In the forfeiture context, the court says that seizure
doesn’t have to be seizure. All you have to do is post notice. The whole
machinery of QIR, in rem, etc. can be reduced to a notice procedure. It’s difficult
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to apply this to 50 states’ QIR, in rem, etc. rules. In addition, seizure of property
itself serves as a notice function. Daniel Good is only three years old, and it’s
unclear what its long-term use is with respect to jurisdictional use of notice.
III. Subject-Matter Jurisdiction (SMJ) – We can sue D in a particular state. The issue
is do we go to state or federal court? We need both smj and pj, but they are totally
separate inquiries. Federal courts have limited smj. Article III of Constitution makes
it very clear that federal courts can only hear certain kinds of cases. Also, Congress
must give affirmative authorization both to create federal courts and to authorize them
to hear cases. Article III gives jurisdiction to federal courts:
1. diversity of citizenship jurisdiction (§1332d(1))
2. federal questions
3. supplementary jurisdiction
4. removal
5. (five other bases for jurisdiction)
Limited subject matter jurisdiction v. general subject-matter jurisdiction. Courts of
general jurisdiction are courts set up by a Sovereign authority (like the state) that can hear
any dispute, unless the authority that created it limits their jurisdiction. States have
carved out special cases to be heard by special courts (i.e. traffic courts, family courts,
and small claims). There was a time in our history when the cases the federal courts
could hear weren’t clear (i.e. Marbury vs. Madison). Federal Courts: Supreme Court,
Court of Appeal (Created in late 19th century), District Courts (about 90). The S. Court
only hears cases at a discretionary basis (they no longer have to hear any cases they don’t
want to). Under Article of Confederation, there were no federal courts. The thought was
a federal judiciary would be more uniform and more expert with respect to federal
statutes.
Can P always sue in the court of his own state? Yes, there are no subject-matter
limitations because state courts have general smj, but there are some other limitations (i.e.
pj). The broadest jurisdiction for a P to take a case to would be based on smj, i.e. more
courts that the case can be taken to, then personal jurisdiction, followed by the basis of
process, and finally venue. Very often, however, P may want to go to D’s court, because
that is where D can be called to. There are no limitations on which state or federal court
you take a case, purely on smj. It is for practical reasons mainly. Smj tells you whether
you can take a case to federal court or not. An individual is a citizen of the state where
s/he is domiciled (where you can be found and where you intend to remain). What if
none of the two conditions apply? You are then domiciled in the last place you could be
found (most students are domiciled where they went to high school).
Is it only federal courts that determine federal questions? No, there is concurrent
jurisdiction in some questions. Congress, could have, however, explicitly decided that
some questions would only be decided by Federal courts (those that the Constitution
expressly designated for the Federal courts – but not excluded for the state courts).
§1257 of USC 28 – The S. Court shall be authorized to review state court decisions where
those decisions review federal law.
Under Habeas Corpus motion, a federal court is also allowed to reopen a state judgment
for review. “Arising Under” in Article 3 has been interpreted more broadly to mean that
federal law ---?
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Exclusive/Concurrent: Most cases that can be heard in federal court can also be heard in
state court. The reverse is not often true. However, there are areas of adjudication in
Federal law that Congress has decided can only be heard in Federal Courts (Article 6
gives Congress this right). These are exclusive cases. Section 1338 of 28 USC is one
way in which cases can become exclusive; another is a provision in the statute itself.
They can be buried in federal statutes.
Constitutional diversity (which Article 3 allows) and statutory diversity (Congress
exercised less of the diversity it could have – damages have to be $50,000 or more;
another way that the statute was held to be such that all parties have to be diverse).
Diversity suits are those between the citizens of two different states or a state and a
foreign citizen. (In 1994, Congress ruled that permanent residents become citizens of
their state of domicile for purposes of suits. This leads to the problem of two foreigners
suing each other in a U.S. state.) There are provisions re: foreign governments suing in
federal court, but not the opposite. What was the rationale for federal jurisdiction for
diverse suits? To prevent favoritism.
A. Diversity of Citizenship (§1332a(1))
1. Citizens of different states – citizens, not residents [for American
citizenship, state of domicile (one state of domicile at a time). How do
you change your domicile? You must be present in the new state with
the intent to make that your home for the foreseeable future.] (e.g.
Strawbridge v. Kurtis) Corporations are citizens of state where they
are incorporated and of the state where they have one principle place of
business (ppb) (only one state). Corporations can therefore be citizens
of more than one state. Courts are split on ppb. Some courts look at
the nerve center test (where decisions are made, usually corporate
headquarters). Other courts look at muscle center (where most
activities occur, i.e. biggest plants is). A lot of courts say use the nerve
center unless all of the activity is in one state. [There are other business
entities out there that aren’t corporated e.g. partnership and labor
unions. The test is to look to the citizenship of all the members. Some
unions, such as the Teamsters, are citizens of all 50 states, so they can
never be sued in federal court under diversity. When a case is brought
by representatives, as in class action suits, we only look at citizenship
of representative. §1332c(2) handles cases where children,
incompetents, and decedents are represented. In these cases, the
citizenship looked at is that of the represented (i.e. child, incompetent,
or decedent) (check).]
 no smj if any P is citizen of same state as any D – complete
diversity requirement (if any one party on the side of the “v” is the
same as any other party on the other side of the “v”).
 you test for diversity when complaint is filed – that is the time
when it’s important for diversity exists. We don’t care about
subsequent changes.
2. Amount of controversy exceeds $50,000 – If you sue for exactly
$50,000, it must be dismissed. Interest and costs aren’t included.
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How do we know what a claim is worth? We take P’s word for it,
unless it’s clear to a legal certainty that it’s not worth $50,000. What
happens if P recovers less than $50,000? Jurisdiction won’t be
affected. Jurisd at the outset – if it’s in good faith – is what matters.
Aggregation rule – add together 2 or more claims to get over $50,000.
When can this be done? Aggregation claims are allowed if there’s one
P vs. one D (case law on this, no statute). As soon as we have multiple
parties on either side, we can’t aggregate. Aggregation only comes into
play when there is more than one claim. The amount in controversy is
in addition to our complete diversity of citizenship.
Capron v. Van Noorden
Back then, the circuit courts were trial courts. Capron was suing Van Noorden for
“trespass in case” (injury to person or property). The court decided that Van
Noorden didn’t do what Capron claimed. Why did Capron go straight to the S.
Court? Appeal courts did not exist then. Capron wanted the judgment nullified
so that he could try again. Rule 8a says that the person who is bringing the case
should designate to the court why the court he is bringing it to has jurisdiction.
Harper’s question in the S. Court is completely different from that the trial court
would have asked. Two issues in Harper’s question: Does Capron have a right
to assign for error in the jurisdiction? (Rule 12 assumes that it will be D that will
ask for dismissal of the case for lack of jurisdiction.) There is an equitable
doctrine of “unclean hands,” which says that a person will not profit from his own
mistakes. Yet, the court let him profit from it. 2nd issue is level of timing. Why
was the party concerned about making the objection now in the S. Court? The
trial court would have said that it was too late (so would the S. Court usually?)
The waiver was based on jurisdiction discussed in Rule 12 (3). “Whenever it
appears by suggestion of the parties or otherwise that the court…” A defect can
be noticed (about the jurisdiction) at any time. And the court can also bring it up.
[so why would the trial court have said that it was too late?] There are no
mandatory appellate S. Court cases, but there are original court cases. The S.
Court “digs” (dismiss as improvidently granted/the person who brought the case
“dug” his own grave) the case for lack of smj. Pj can depend on diversity (where
the parties are citizens or domiciled in). Common law of contract or tort is almost
invariably state law. If you are in federal court with state law as a source, it must
be based on the diversity law (where individuals are of different states/countries).
Van Noorden is/was from N. Carolina. We don’t know Capron’s residence/state
for sure. Rule 15a allows for amendment. Van Noorden has a ruling in his favor
and doesn’t want it to be dismissed. He wants it to be res judicata. Defective
allegations of jurisdiction may be amended, upon terms, in the trial of appellate
courts, according to §1653. Besides, the two parties calling for an amendment,
the judge can call for amendment. The passage of time does not matter – both
noting of the defect and curing of the defect can be done. However, the judge can
decide whether the amendment can go through or not (this is different from Rule
12 h (3)). Why do you think that a judge might not allow you to amend? In most
cases, you want to make sure that P gets it right and presents his case only once.
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This creates a systematic incentive to think about it and get it right from the
beginning, or your case will be dismissed. This would alleviate the burden on the
court system with respect to smj. Is it unconstitutional to go forward with the
pleading if it is in the wrong jurisdiction? No. (check) The problem with not
having a time-limit in Rule 12 h (3) is that a lot of time and money can be wasted.
The second disadvantage is “strategic behavior.” You could try to “hide the ball,”
see what happened, and if you didn’t like it, pull out the card of wrong
jurisdiction. ( Rule 15a is usually used to have a chance to amend one’s
pleading/complaint). It is P’s responsibility to note smj, but it is such a grave
matter to have wrong smj, that either party or the court can note it. In this case,
“reversed” implies that the judge below was erroneous, and the judgment before
that would be used. Today, the term “dismissed” would be used instead, i.e.
dismissal without prejudice to file the case again.
Marbury v. Madison
Marbury was commissioned under Adams as President Jefferson appointed
Madison as Secretary of State, who did not want to deliver Marbury’s
commission. Marbury filed a case in the S. Court for a writ of Mandamus,
requiring Madison to deliver the commission. This case is all about smj. What
motive did Marshall have to dismiss the case based on smj? Marshall decided
that it would be a disaster for the court to issue the writ, if Jefferson would not
carry it out. The court would look foolish. He had to find a clear way to get
around this. By dismissing the case, he in fact strengthened the court’s power
(irony: he had to rule that the court had no jurisdiction over the matter). Marshall
first lays out the substantive issues: 1)Marbury does have a right to the
Commission. 2) He has a remedy by law; 3) Whether he has come to the right
place to get it is the question. Does the S. Court authorize (under the statute) to
issue writs of mandamus? Yes. Then the question is whether it is constitutional.
Why does the Chief Justice first turn to the statute? This is an informal rule that
says that one does not consider constitutional questions unless one has to. (Ash v.
von der Dam? Propounded by Justice Brandeis) The Constitutional question is
whether the Judiciary Act is constitutional, whether Congress had the right to give
the S. Court the power to issue a writ of mandamus as an original jurisdiction.
Marshall makes an argument from a “negative pregnant.” If certain matters are
designated to be part of the original jurisdiction, it does not mean other do not as
well. Expressio unius est exclusio alterius (specifying one is excluding others) –
invoking a presumption used for statutory interpretation.
Argument of Superfluity --If the Constitution wanted to say that the only
provisions that lead to original jurisdiction are those that are stated and no more,
there would be no need for the part of Article 3 that deals about original and
appellate jurisdiction. [Article 3, Sec 2: “In all Cases affecting Ambassadors,
other public Ministers and Consuls, and those in which a State shall be Party, the
Supreme Court shall have original Jurisdiction. In all other Cases before
mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law
and Fact, with such Exceptions, and under such Regulations as the Congress shall
make.”] Suppose the founding fathers meant that the supreme Court could hear
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those provisions that it designated for original jurisdiction and others it wanted to.
Then the superfluity argument is a bad one. §1251 – Original Jurisdiction -Drafters of this section allocated some of the original jurisdiction of the S. Court
to some other courts (thereby creating appellate jurisdiction for some matters
where it has also original jurisdiction). This is parallel to what Marbury v.
Madison did (but opposite). In Marbury v. Madison, the S. Court does not have to
hear cases which are not specifically its original jurisdiction. The original
jurisdiction can’t be expanded. Original jurisdiction was limited and the statute
was found to be unconstitutional (check!) There is enormous controversy about
what each section of Article 3 means.
Mas v. Perry (1974)
This case shows how common law rules interact with code rules and how courts
are often called upon to reconcile these rules.(Amount of controversy requirement
for federal courts was $10,000 then, but now it’s $50,000.) Original claims were
state law claims, but because of diversity, the case was tried in the federal courts.
In 1974, it wasn’t clear whether each party had to meet the amount of controversy
requirement separately or together. The claim on appeal was that trial court
should have granted a motion to dismiss, because of lack of jurisdiction on
diversity. Well-established common-law rule that wife is deemed to take the
domicile of the husband (the woman lost her legal identity according to
coverture). §1332 – alienage proceeds along different analytical process than
domicile (until rule was changed). Alienage deals with citizenship under
international law, not domicile. According to Perry, Mrs. Mas is a citizen of
France and can’t sue in federal court, therefore, she can’t claim diversity. The
judge says the idea that Mrs. Mas is a citizen of France is absurd. In this case,
common law didn’t apply. The judge said that her domicile was in Mississippi
(since she didn’t have a new domicile). *Diversity for each of the Ps rests on
different grounds.
B. Federal Question Jurisdiction – second major way to get into federal court.
§1331 – jurisdiction over cases “arising under” federal law. Citizenship of the
parties is irrelevant here and the amount in controversy doesn’t matter.
1. “Arising Under”
a) Federal Cause of Action
b) Constitutive or “but for”
c) Federal issues or questions
Congress declined to exercise the “arising under” power until 1875. 3 reasons: 1)
Trying to get some uniformity in federal law (see p.301)
2) Federal judges would be more expert in interpreting federal law.
State courts would be hostile to federally-created rights.
Two sets of questions: 1) What is the scope of “arising under?” under federal law
in the constitution? (limit) 2) To what extent and in what way, did Congress by
enacting the federal statutes exercise that power? (all of it or some of it?)
Federal law jurisdiction is usually viewed as meaning that federal law sets out the
duties and obligations of an action. But there are two other cases:
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1) Constitutive or “but for” (e.g. Osborne v. Bank of U.S., where the law under
which the bank was being sued was state law. On the other hand, “but for” the
laws of the U.S., the Bank of the U.S. would not exist. The Charter of the
Bank contained that the Bank could be sued or could sue in a Federal Court -line of cases which involve entities created by U.S. Federal Law.)
2) Federal issue or question -- Cases which are fundamentally state law issues,
but which require in the process that some question of federal law be decided
(e.g. Smith v. Kansas City Trusts). The law on this particular question is a
mess. When the Constitution was drafted, it was believed that federal powers
would come in derogation (at the expense of ) state power. It was also
believed that a strong central government was a tyrannical entity. The power
of the federal judiciary was jealously guarded, however [why? Missed that]
One problem with the judiciary is that judges are not elected and are for life.
Mere presence of federal law doesn’t make it federal question. We look only
at the complaint and P’s claim itself. Ps sometimes mention extraneous
information there (i.e. mentioning federal law) that they don’t need for their
claim. Is P enforcing federal law? Well-pleaded complaint rule.
Federal Question or “Arising Under”
1) Cause of action – Holmes in American Wells Works
Homes’ theory is that the limit of federal authority is the cause of action is designated
under the Constitution. Today that limitation isn’t accepted (check).
2) “Ingredient” Theory – Osborne S.G. v. Red Cross
If Congress is going to exercise its power to the outer limit, in S.G.V. Red Cross, the
Supreme Court said that there has to be no ambiguity. It has to be clearly stated that the
case be tried in a federal court.
3) “Meaning or application” test – Smith/Moose/Merell Dow
The question was decided early on that the Constitution did give federal authority in
these cases, but then the question arose as to whether Congress designated that right.
Focus was on §1331.
4) “Case or Controversy” – supplementary non-federal claims
§1367 was a challenge to the Supreme Court, to tell the Court to tell Congress what ---?
Article III’s use of “arising under” has been interpreted more broadly by courts in
practice? The courts have interpreted very similar language in statutes by Congress in a
different way than they have interpreted the language in Section 2 of Article III.
How do we know that a certain claim constitutes a genuine federal question?
Louiseville & Nashville R.Co. v. Mottley
Railroad canceled their passes (Mottleys) when a law was passed in 1907
prohibiting the giving of free passes. The Mottleys argued that the law didn’t
apply to their particular case because it would be retroactive. Even if it did apply,
they said it was unconstitutional, according to the Fifth Amendment to take away
their property. The court said that it was improper to state an anticipated defense
that raised a federal question and for that reason smj didn’t exist for the federal
court. The Mottleys could have claimed simply breach of contract under state
law. That would have been proper. There’s no problem here with the pleading
saying nothing about constitutionality (D would have preferred in this case that
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the law be constitutional anyway. They wouldn’t have raised the
unconstitutionality claim). Well-pleaded complaints don’t have anticipated
defenses (check).
Harms v. Eliscu
Some claims that seem to be about federal issues aren’t really when looked at very
closely. The parties are fighting about who has certain residual (renewal) rights.
Harms succeeded Dreyfus’ rights. Alleged agreement that Eliscu handed over his
rights to Dreyfus and those rights were the ones Harms succeeded. Eliscu also
gave the agreement to those rights to Ross Jungknickel, Inc. The case went to a
federal court, even though there was no diversity. The judge said that the case
didn’t arise under the federal law. He said that this wasn’t an infringement action.
The Copyright act doesn’t say (except for one provision) how copyright can be
transferred. The question of whether you own the copyright doesn’t arise under
the copyright act – it’s a contract issue. All issues here were issues of state law.
Judge Friendly acknowledges that there are theories that this case could feasibly
then be brought under federal court. The example is the Osborne case (the
“ingredient theory”) – if it weren’t for the federal law on copyrights, this case
wouldn’t exist. However, Friendly says that §1331 and §1338 don’t go as far as
the “ingredient test.” (One could certainly question his reasoning). A case like
this one would not really be allowed to go to any federal court today. §1331
follows along this reasoning.
Smith v. Kansas City
This case created confusion in this field. It was a state law claim, but the court
had to take a look at a federal statute to see whether it was unconstitutional.
Twelve years later, the court was confronted with a parallel issue, Moore v.
Chesapeake case. The court ruled that Moore wasn’t one in which federal
jurisdiction existed. What is the difference? The court no longer thinks that
there’s federal jurisdiction even though Smith also presented a federal question
similar to Moore. The two cases are very hard to reconcile. The problem it
created was this confusion as to which case would then apply. Merrell Dow tried
to settle this.
Merrell Dow v. Thompson
The claim was that the drug was mislabeled in violation of the FDCA act. As a
result, a rebuttable presumption of negligence would be the question decided by a
jury – if it was decided that there was a violation. The corporation moved the case
to federal court. Then, they made a motion for a forum non conveniens (a multifaceted inquiry into whether it’s a good idea to have a case in a particular court.
Some of the issues are that the particular forum has no interest in this issue. That
particular court shouldn’t, therefore, waste its money), which dismissed the case.
The states have much stricter forum conveniens rules than the federal courts,
which is why they moved the case to federal court. The Sixth Circuit court found
that Merrell Dow could have been found negligent without necessarily being
negligent under the FDCA. The court came up with a necessary dependence rule.
The S. Court affirmed the judgment, but by a different reasoning. They
announced a new test for when there is a state law issue and it is to be determined
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whether there is still a federal question. The test was that there had to be an
independent right of action under the statute for there to be a federal question. In
statutes, which are silent about the right of individuals to sue those failing to
comply with the statute, the question is can we do it any way? This illustrates the
distinction between a right and remedy. In common law, the rights you have are
inextricably tied with the remedies you have. The rights and obligations are
parasitic in the remedial section of the law, for example, in torts and contracts.
With statutory law, however, the co-mingling of the right and remedy falls apart.
*That’s the different between judgment-made law and legislative law (in judgemade law, the right is tied to the remedy – you’re in the court to get the remedy).
Federal jurisdiction is not the same as having an implied right of action. Justice
Brennan questions this. Why are cases federal? Why do we have federal
questions in a particular case?
 uniformity
 expertise
 vindication of federal rights
Merrell Dow’s decision shows that vindication of federal rights isn’t the concern
here (check). Uniformity and expertise? (ask for clarification) Under §1331 and
similarly-phrased statutes, there is no federal right of action under that statute
(check). It purports to be a process of statutory interpretation.
Cort et al v. Ash
Ash (shareholder) is suing Cort (an officer) under §610. There are two claims of
damage: injunction and money damages. S. Court denied these damages, because
nothing in the statute gave Ash the grounds for vindication. The court came up
with a four-part test (see p.78). The legislative purpose of the statute was
corporate behavior with respect to elections and giving money, not caring about
particular stockholders. By definition, penal statutes are general in their reach
(they don’t target a particular class of people). In addition, the law dealing with
corporations is usually state law. [*last year, a Merrell Dow type of question was
on the exam that required knowing Cort v. Ash.]
Bivens
This case represents the Cort v. Ash issue in a constitutional manner. Courts,
simply by virtue of being courts, have an inherent residual judicial power.
Inherent power in the courts to grant the right to remedy. Reasoning in Bivens is
that if you have an issue of federal law and you have jurisdiction on that issue
(under §1331), you can bootstrap on that to the right to sue for a remedy. This is
in line with Harlan’s opinion (Wax thinks this is more sound of an opinion than
Brennan’s, who says that if they can’t sue under the 4th Amendment, they have to
fix it). Black is saying that there is a civil rights statute (1983) that gives a remedy
for state officers who violate the rights that were violated in this case. Yet, there
is no federal statute for the same issue. Black says Congress should have passed
the legislation. Congress didn’t. Yet, the court case of Bivens has been used in
its place? (check) In Cort v. Ash, the injunction relief wasn’t granted, because in
the interval of filing his claim and the appeal of the claim, the law (§610?) had
been amended to allow complaints to be challenged to the Attorney General. The
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court agreed that the reason Congress created this mechanism implied that a
parallel alternative was to be excluded (this wasn’t explicitly stated). However,
the injunction is based on a violation before the law changed. The court says that
the law that is in effect today should apply. It cites
Schooner for what has come to be known as retroactive application of the law.
This retroactive application was not the usual way things were done. The case in
Cort v. Ash, adapted itself well to retroactivity, because when the election was
over, injunctive relief would only apply to future elections. In such a situation,
Mr. Cort isn’t being punished for anything that was legal when he performed it.
Mr. Ash also has future redress. These benign conditions aren’t always present.
Five years ago, the S. Court decided the Landsgraf case that questioned retroactive
application of the 1991 Civil Rights Act (the penalties were different before the
1991 Act). The Court --- back considerably on the circumstances in which
retroactivity applied – only applying to certain procedural changes in the law, not
significant incursions on people’s rights? (check) *For every single claim asserted
in federal court, we have to assess individually federal smj. What if it isn’t
supported by diversity or federal question? We go to supplementary jurisdiction.
C. Supplemental Jurisdiction (SJ) – Jurisdiction brought by claims by existing
parties or additional parties for which there would be no independent jurisdiction
(check). The term that was previously used was pendent jurisdiction. (Look up
difference between ancillary vs. pendent jurisdiction.) §1367 represents an attempt
to codify cases in common law and also to change certain aspects of it. *Never
mention sj, until you have shown you need it and you don’t need it if it’s
supported by diversity or federal question.
United Mine Workers of America v. Gibbs illustrates this concept. SJ lets claims
that don’t meet diversity and federal question to get into federal court. It’s
codified in §1367. In Gibbs, there were 2 claims, one involving a federal question
(fq), another involving state law claim. Gibbs claimed that the union had violated
the federal labor laws (§303). He also claimed violation of contract/tort (state law
claims). The fq claim gets into federal court. The second claim doesn’t invoke a
federal question or diversity. We can hear the second claim if it’s a part of the
nucleus of operative fact (basically, it means that claim comes from the same
transaction or occurrence (sto)). Gibbs concerned a case where the main claim
was federal. The S. Court has never decided a case where the main claim is
diversity and involves $50,000 or more, but the supplemental claims don’t have
the $50,000 requirement (check). The district courts have decided this and mostly
have ruled yes, expanding Gibbs to these diversity claims. Courts want to guard
against someone attaching an insubstantial federal claim to a state claim to get it
in a federal court. §1367c carries forward criteria to be considered.
§1367a codifies Gibbs, giving us supplementary jurisdiction when common
nucleus of operative fact exists – even if there is a completely separate D. There’s
generally consonance between joinder rules and supplemental jurisdiction.
However, there are some exceptions. §1357b kills sj over some claims in a
diversity case. It only applies to diversity cases (not to Gibbs). These are claims
by Ps, not Ds. (More details, look it up)
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Aldinger v. Howard
P sued official under §1983 of federal law and county under state law.
County was a new party P was suing. The court was not saying something about
constitutional powers, but purporting to say §1343 wasn’t broad enough to cover
this claim. It actually ruled it out. Aldinger left open the question of whether you
could get this sort of arrangement under §1331.
Owen Equipment v. Kroger
Kroger sued OPPD, and OPPD used Rule 14a to bring in Owen; then the case
between Kroger and OPPD was settled, so OPPD disappeared. The court said that
Congress could not have meant for this independent claim to go forward (once the
diverse party was taken out of the suit) under §1332. Otherwise, one would sue a
diverse party and then that party would join a non-diverse party. Once the diverse
party was out of the suit, the federal court would be left with a non-diverse suit.
The S. Court was very interested in limiting diversity suits. The Court said that
there should be no difference between a suit beginning with all parties to a claim
and one in which other parties are impleaded in just because of sequence
difference (other rational of court?). In other words, both should comply with
diversity rule – not one evading it. (check)
Finley
The FTCA had a grant of jurisdiction over “civil actions on claims against the
U.S.” The reason why certain statutes confer federal jurisdiction over claims –
despite §1331—is that the statute might want exclusive federal jurisdiction or
more specific language, etc. (more specific language or provision controls more
general language). Finley managed to reverse Aldinger that if Congress didn’t
explicitly say that federal jurisdiction existed, then there wouldn’t be any Plain
Statement Rule. * Criticism that Justice Scalia does not understand that the
objective of Federal Rules of Civil Procedure is to give liberal joinder to parties
and to bring claims together. However, Justice Scalia wanted to make it clear that
Congress should clarify its legislative intent with respect to supplemental
jurisdiction – that was Congress’ job. Congress then enacted §1367, which
governs supplemental jurisdiction, (drafted, however, by law professors).
Although §1367 was intended to be clear, it isn’t always. It expands supplemental
jurisdiction with the full view expressed in the Constitution. It tried to codify
case law prior to Finley and purported to overrule Finley’s end-rule. Congress can
abrogate statutory readings by changing them.
§1367 lumps pendent rules (party and claim) and parties. As long as added claims
fall within the same case or controversy, they may be supplemented. The source
of jurisdiction can be any source of jurisdiction, to ground that principle claim
under §1367. The exception to the broad grant of supplemental jurisdiction is
jurisdiction of primary claim that is grounded in §1332 and is the only source of
independent jurisdiction over the cause of action (check) and the claims are being
brought under joinder Rules 14, 19, 20, 24 (23 isn’t included). It codifies Gibbs
and Kroeger. The cardinal rule that cannot be violated is the complete diversity
rule. First apply §1367a, then §1367b (exceptions). §1367c attempts to list
reasons for discretionary refusal to exercise supplementary jurisdiction (similar to
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those in Gibbs). §1367c has made a horrible mess of this by the courts. It isn’t
clear whether this section refers to abstention from the entire case or just the
supplementary jurisdiction (thereby splitting case). According to Wax, if we read
§1367c carefully, it means to decline jurisdiction over supplementary claims, not
for the entire case to be abstained from. §1367d permits a P whose state law
claims are not accepted under supplementary jurisdiction to have 30 extra days
(exceeding statute of limitations) to file that case in state court. Here, Congress is
altering the statute of limitations, which Eerie ruled would be a state law question.
[Could you have two claims under Rule 20, arising out of the same
transaction/occurrence that aren’t the same? This question has not been resolved,
but for our purposes, the answer is yes.]
Patterson Enterprises Inc. v. Bridgestone/Firestone Inc
Motion to dismiss by D because of lack of diversity jurisdiction, saying you can’t
aggregate amounts for diversity jurisdiction. §1367a – court said supplementary
jurisdiction could be exercised. Judge said §1367b exclusion doesn’t apply here,
that the claims were started together (§1367b not intended for claims “added”
later). Also, judge says this case has nothing to do with parties added under Rules
cited in §1367b. Rule 20, however, is the rule that would be invoked to allow
plaintiffs to start out together (as well as to add parties later). Therefore, it’s a
puzzle as to why the judge made this distinction between now and later (of adding
parties). Kroger case – judge said that there should be no disfavor for parties
added later. The judge is going against the Kroger case (another anomalous thing
about this case). Another anomalous issue: nothing the judge says here
distinguishes the diversity requirement that the main claim should be completely
diverse (because if the supplementary claims were diverse, but the main one
wasn’t, the judge would still say it was o.k. – parallel reasoning to his amount
requirements). Even if the judge’s reasoning isn’t exactly right, the result is
probably right. This case isn’t a suit made by plaintiffs against persons made
parties under Rule 20, but rather Ps brought together under Rule 20 suing D.
Therefore, the case didn’t really come under the exclusion provision of §1367b. It
came under §1367a, and supplementary jurisdiction is possible. *Congress never
intended, however, to loosen up the complete diversity rules by passing this
statute (§1367). This is an anomaly because there would be no jurisdiction under
§1367b the other way, i.e. if over claims by Ps against persons made parties under
Rule 20. [Rule 20 is permissive joinder – you don’t lose the claim if you don’t
join them; Rule 10 is for those claims that have to be brought in together, a special
case.]
D. Removal – We go to federal court because that’s where D wants to be. D
only is allowed to remove a case from state court to federal court (an
aberration in civil procedure, because it allows D to pick a forum. Usually, it
is P). The purpose of removal is supposed to be to protect defendant’s
interests in not having a prejudiced tribunal deciding his case, etc. It’s a oneway street. There is no such thing as moving from federal to state court. All
Ds must agree to remove the case (minor exception §1441c). A lot of picky
rules about removal. You can only move the case to the federal district
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embracing the state court you’re in. Generally, a case is removable if it could
have been heard in federal court (i.e. if there’s federal smj). [*Removal is a
good exam question because it tests both removal and smj.] 2 exceptions
(apply only in diversity cases): 1) No removal if any D is citizen of forum. 2)
No removal more than one year after the case was filed. In statutory material,
focus on §1441a-c, §1446, §1447; also be aware of §1442. Removal is
subject to the well-pleaded claim rule – are federal elements really part of the
claim? A case can’t be removed on the basis of a federal counter-claim. The
federal counter-claim can’t be occasion for plaintiff, now defendant, to
remove the claim. The theory is that plaintiff chooses the forum and has to
live with it regardless of what happens in subsequent claims. Grants of federal
jurisdiction exist other than §1331 and §1332, which could be basis of
removal (i.e. in Roe). The second issue in removal: do all defendants have to
be sent in order to affect removal? No definite answer: some courts say all
have to consent, while others say not. Issue hasn’t reached S. Court. Also,
it’s important to see whether the procedure for removing a case was proper.
Remand for lack of subject-matter jurisdiction is subject to same rules as lack
of subject-matter jurisdiction and dismissal. It can’t be waived. This isn’t the
case for procedural issues. Failure to do any of the procedural requirements is
waivable (inferred from language of the rules) for remand purposes? (check)
Sometimes, the plaintiff will try to defeat removal, i.e. by dropping the federal
claim, etc. Courts have exercised their equitable powers to do what is fair and
just and haven’t adopted an across-the-board rule. Generally, the courts have
been more lenient in letting the plaintiff drop a federal claim than adding an
additional party (which begs the question of why one didn’t bring in the party
in the first place). (§1441 allows you to make an exception on occasion to the
complete diversity rule for adding on parties). Interplay of §1441 and §1367:
Does the discretionary dismissal power of the court under §1367c also apply
to the power to remand a case under §1441? It’s an open question. One of the
problems is that §1367c doesn’t discuss the remand issue. The second
problem is that of §1441c. It seems to say that where you have a separate and
independent claim jointed to supplementary claims, the court has discretion to
remand the claims in which state law predominates. However, this is only
with respect to §1331 claims. One interpretation is that only those types of
cases can be remanded. Does §1441c allow sending back the state law claims
or the entire case to be remanded? The court in Roe implied that you can send
back the entire case if it’s a case arising under §1331. How it reached that
conclusion is unclear and that part of the decision is dubious. §1447d makes
an exception for civil rights cases (on the assumption that those cases have to
be in federal court). Provisions that bar reviewability are highly unstable,
because there is pressure to chew away at them. There’s been an objection of
lack of due process rights. Also, it’s a license for error (“petty acts of
tyranny”).
Thermtron Products v. Hermansdorfer
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The Supreme Court held that the only cases of remand that are not reviewable are
those based on specific procedural grounds mentioned in §1446 – not those
termed “ultra vires” (outside legitimate authority of the judge).
International Primate Protection League v. Tulane Educational Fund
Three aspects of the language of §1442 precluded NIH or any other agency from
being covered under the statute. The first was the comma (no comma) (see p.72);
the second was “person acting under him” clause; and the third was “under color
of.” The NIH invoked “absurdity” argument. NIH asked why you would give the
power to remove an officer, but not an agency. The court said that in 1948,
officers had officer immunity, but agencies didn’t. Some government agencies
have since granted people the right to sue them (before there was a doctrine of
sovereignty). Construing the statutory language and understanding the kinds of
arguments used are important.
IV. Venue (place) – Third Hurdle P has to get over in choosing forum: pj first, smj
second, and now venue (i.e., if we are going to federal court in California, what federal
district will we go to – 96 federal districts). Smj tells us we can file in some federal
court, and venue tells us exactly which federal court we can go to. This is all statutory.
Venue is ruled by more pragmatic reasons. Convenience of parties, suitability of forum,
etc. are all considerations. No one specific venue rule – a lot of variety. We are
concerned with federal venue statute. Recent revision of federal venue statue in 1990.
Venue presupposes both subject-matter and personal jurisdiction. Those other
requirements don’t necessarily narrow the choice of forum. Venue narrows it down one
more step. Transfer of venue: §1404, §1406 and FNC (common law doctrine) have been
some of the most-litigated statutes in civil procedure – people really care where the case
ends up. §1404 (change of venue) – provides the case to be sent elsewhere when it
doesn’t belong where it is. Federal court can only send it to another federal court, not to a
state or foreign court (they don’t have authority to send a case to another sovereign’s
court). This is where doctrine of FNC comes in. §1404 attempts to codify this doctrine.
FNC is used in certain special cases, such as when it’s more convenient to hear it in
another country. FNC only applies when there’s venue in the original choice of forum
(obviously not true of §1406) and only invoked by defendant.
§1404, 1406 don’t only limit the invocation to the defendant, however.
§1391 (venue generally)
There are differences between venue in diversity and non-diversity cases.
The only time you use the third alternative of §1391b(3) (where defendant can be found if
there is no district in which the action may otherwise be brought) is when a substantial
part of the events giving rise to the claim occurred in that state, for example when the
action arose abroad. (The district where there’s more interaction between D and the saiddistrict) §1391d – alien includes permanent resident and non-citizens (unlike in subjectmatter jurisdiction, where permanent residents are citizens of the state they are domiciled
in/reside. For cases of venue, an alien can be sued anywhere. A certain analogy in the
way judges interpret §1404 and §1406 issues with respect to “for convenience of parties”
and in the “interest of justice.”
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A. Basic Rules -- §1391 a + b give us venue rules. For 99.9 % of the cases,
question of venue is still the same for fq and diversity. §1391a deals with
diversity rules and §1391b deals with fq. In any case, P has 2 choices:
1. Any district where all Ds reside, except if all Ds reside in different
districts of the same state, you can use any of the districts where they
live.
2. Any district where a substantial part of the claim arose. Of these two
choices, one will be met in almost every case, unless the claim arises
overseas (that’s the 0.1% exception). If there is not, the third choice is:
3. Diversity case where all Ds reside and fq, where any D is found
(check).
Here, we are talking about residence, not citizenship. For most people the
two are the same. However, corporations reside in all districts where they
are subject to pj, but they are citizens of only few states.
B. Transfer of Venue – No transfer between 2 state courts in 2 different states.
Transferring venue from one federal district court to another one is possible. 2
statutes: §1404. §1406. Under both of these, we can transfer only to a district
that has pj over D and is proper venue. *This is also a great testing pattern.
Hoffman v. Blaski (S. Court 1960)
D can’t waive here – absent waiver. What are differences between §1404 and
§1406. In §1404, the original court is a proper venue. In §1404, the original court
is a proper venue. In §1406, the original court is not a proper venue. What are the
factors we look at?
 Convenience of parties and interests of justice. We are looking to see if there
is another court that is better? §1406 lets us transfer or dismiss (makes sense
because we are in an improper court).
Blaski sued Ds in Texas. Petitioner D moved to transfer the case to Illinois, but
the court ruled that there was lack of venue and personal jurisdiction there. The
interpretation of “where it might have been brought” is what this case depended
on. Why could the case have been brought in Illinois, despite the lack of personal
jurisdiction and venue? Because defendant waived the right of venue and
personal jurisdiction as a condition to move the case. 7th Circuit interpreted the
language “could have been brought” to mean the place the plaintiff had a right to
bring the case to. §1404 is supposed to be a shield for the defendant, but it can’t
be used as a sword for the defendant (not right to affirmative harassment).
Frankfurter wrote a convincing dissent: (The condition for granting FNC in
Blaski is that defendant agreed to waive his right to venue – not sure if this is
what he said or Wax said) . Court is interpreting FNC doctrine wrong here,
according to Frankfurter. The doctrine is more generous to D than to P (FNC is
always litigated over plaintiff’s objection). One of the problems that arose from
§1404, was that defendants were using it to forum-shop. D might go looking for a
state that had a law more favorable to him. Frankfurter said there’s a limit to how
much a defendant can oppress P because the judge serves as a check. Courts
hated the idea of forum-shopping and thought P should have priority in choosing
the forum.
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Van Dusen v. Barrack (S. Court, 1964) case settled this that change of court
rooms would not mean a change of the law (mostly applicable to diversity cases).
This is mostly applicable to diversity cases. This decision opened the door to
manipulation by P to change venue as well (which is strange because P chose the
forum in the first place). P could pick the law he wanted and then target the place
where he really wanted to be.
Ferens v. John Deere Co. (S. Court, 1990) (where S. Court held that in a diversity
case, the transferee forum is required to apply the law of the transferor court,
regardless of who initiates the transfer – in this case, it had been made by the
plaintiff) has been criticized and no one understands why the court thought it was
a good idea. In Ferens, S. Court (relying on Van Dusen) ruled that the transferee
court is required to apply the law of the transferor court, regardless of who
initiates the transfer. Vertical (check) forum shopping impetus behind Eerie.
However, Eerie produces a tremendous amount of forum shopping.
C. Forum Non Conviens (FNC) – A doctrine by which a court dismisses,
because the balance of convenience is strongly in favor of another court. There’s
another court out there that’s much better. We look at same factors as in §1404,
but we are trying to make a stronger showing. We use FNC, because we cannot
transfer (i.e. 2 different states – 2 different sovereigns). FNC doctrine allows D to
forum shop to some extent. §1406 (cure or waiver of defects) has not causes as
much litigation as §1404 (change of venue). §1406 gives one the option of
transferring the case when it is in the wrong court (this was to prevent the plaintiff
from losing cause of action from a good-faith mistake).
Piper Aircraft Co. v. Reyno (S. Court, 1981)
This is an example (case couldn’t have been transferred to Scotland). This
dismissal under FNC is usually conditional on the case being able to be tried in
another forum. For that, it may be necessary for D to waive statute of limitations
for pj. Reyno sued Piper and Hartzell in state court in California. The case was
removed to federal court in Ca. Piper then moved for transfer to a federal court in
Pa, based on §1404, wanting to take California law with the case. Piper and
Hartzall moved to dismiss the action. The district court granted the motion; the
appeal court reversed; and S. Court reversed appeal court’s decision. The Appeal
Court gave two reasons for reversing: Gilbert analysis had been misapplied
(plaintiff’s choice of forum deserved substantial weight even though real parties in
the interest were nonresidents) and it said that Scotland’s liability law was less
favorable for the plaintiff. Change in substantive law was demoted by S. Court. 3
factors, according to S. Court, had to be taken into account for FNC (approving
district court’s original analysis):
1) private interests of parties (plaintiff v. defendant’s interests) – litigation
factors might not be the same for both parties.
2) public interest – if case was kept in the U.S., was the burden fair?
a) Fairness of having particular court or jury decide the case;
b) Was it going to be particularly difficult for a Pennsylvania court to
apply another country’s law? (In this case, the law applying to two
defendants would be different)
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c) What would be the alternative forum’s interest in the case?
With respect to substantive law, FNC couldn’t be given too narrow a scope.
Where the law in alternative forum destroys relief, the issue of substantive law
would be important. Otherwise, the nature of the remedy itself doesn’t have to be
as good or the same in the alternative forum.
Goldlawr, Inc. v. Heiman, S. Court distinguished between cases where both pj and
venue were wrong and those where only one of the two was wrong. The first case
would be more favorably treated under §1406 than one where there is venue, but
no personal jurisdiction. (An example of a case where there might be venue, but
no personal jurisdiction, is when a substantial amount of events could have
occurred in the state, but the minimum contacts case wasn’t met.) This action
would be dismissed because of lack of personal jurisdiction (because §1406
would only apply if there was no venue and the case had to be transferred). In this
area, courts have had a lot of trouble coming up with a coherent rule. Goldlawr
has been criticized. Generally FNC rule does not operate with states as alternative
forum (usually foreign countries are the alternative forum).
V. Challenging Jurisdiction
Rule 12 governs this in federal court (sneaky rule – watch out for it). Rule 12 tells D
when he is sued, he can answer or bring a motion (i.e. dismiss strike, more definite
statement). Rule 12b gives us 7 defenses. D can either put these defenses in his answer
or use them to bring motion to dismiss.
1) Rule 12b(1) – lack of smj; this defense is never waived. D can raise it at anytime.
2) 12b(6) – failure to state a claim
3) 12b(7) – indispensable parties; 12b(6) and 12b(7) can be raised anytime though the
end of trial.
4) 12b(2) – pj
5) 12b(3) – venue
6) 12b(4) – insufficient process
7) 12b(5) – insufficient service of process
Rule 12b(3-5) => must be put in the first Rule 12 response (i.e. when filing an answer or
bringing a motion). On these 4, if they aren’t raised they are waived.
VI. Eerie Doctrine – It comes up in diversity cases only. Choice of law issue: federal or
state law? Black letter law is easy to apply according to Eerie case: federal court
must apply state substantive law; on such matters state law will govern. This is based
on the Rules Decision Act (RDA) and on constitutional holding. Many cases are
obvious (i.e. tort cases where the issue of liability is substantive state issues). What if
it’s not obvious? There we have to figure out whether it’s substance or procedure.
A. Eerie v. Tompkins and Choice of Law -- Horizontal problem of choice of
law: if a case arises in a state but is taken to another state, which state's law
applies? That’s a conflict of choice of law. Vertical problem: if a case arises in a
federal court and is a diversity case, what is the law that we apply: law of the
state or federal law? This didn’t seem obvious in 1842 when Swift v. Tyson was
decided. Judiciary Act of 1789, §34, now codified as Rules Decision Act (RDA)
in 28 U.S.C. §1652. RDA doesn’t talk about the judiciary and its judge-made
laws, that might trump state law.
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Swift v. Tyson illustrates an activist judge’s decision who thinks he knows
everything, i.e. Judge Story. He was of the view that the common law should take
a certain direction or turn. The case involved a note (an I.O.U.) – a negotiable
instrument. The issue was whether Swift could collect on the note. Tyson was
resisting paying on the note (he had given the note in exchange for a property
transaction that turned out to be fraudulent). Was there an obligation to pay on
the note, or did the initial fraud invalidate any obligation to collect on the note?
New York had a rule where fraud invalidates the note, and then there was a more
modern rule that some states had adopted to make interstate commerce risk-free
(therefore they made the notes acceptable irrespective of the notice of fraud). The
court in Swift upheld the new rule – thinking that was the best rule under the
circumstances, a rule of their own devising based on its assessment of what the
rule should be. The rhetoric of Swift is one of common law being out there and
we could discover what it is by looking out there. Swift said that federal courts
aren’t bound by the common state laws of any state, but they could devise their
own common laws. This made Judge Story happy because he viewed the federal
courts as a vanguard of laws, that state courts would follow (that didn’t happen).
Alternative way of looking at law of fraudulent transactions would not be the state
law, but rather a common law that would enable collection. The “laws of several
states” was the language of the RDA (Rules Decision Act) that Judge Story used.
He said that the cause only applies statutory laws of the states. The broader
interpretation would include common law as well. Swift took the view that this
clause only included the statutory laws of the state. In this case, we get an
expansion of Judge Story’s legal idealism (the law as a disembodied entity –
principles rule). Implicit in the opinion is the notion that the courts are all starting
at the same point in interpreting the law. Story is saying that the court that is
going to be the authority is the one sitting. However, his practical aspiration was
that there would be a unifying effect from this policy that would make all states
follow one law. Swift came under a lot of criticism. Story had hoped that the
states would look up to the federal courts and follow them. This didn’t happen.
The basic conservatism of the judicial system as a system made this very
unrealistic.
 rampant forum shopping resulted (abuse of the outcome of Swift)
 There was also discrimination (as stated in Eerie) depending on whether
plaintiffs were out of state (better off) or in state. Out of state defendants did
worse off (check). These sorts of problems came to a head in:
Black and White Taxi Cab & Transfer Co. (S. Court, 1928)
Brown and Yellow had a contract with the railroad that allowed them to
exclusively park their cabs at the railroad to pick up passengers there. B & Y used
to be a Kentucky corp. but it changed to become a Tennessee corp. The two
questions at issue: Was there a collusive agreement to dissolve corporation in
Kentucky and incorporate in Tennessee solely for jurisdictional purposes? This
was a jurisdictional question. Second issue [check] was that the plaintiff would
lose if the law of Kentucky was applied, but would win if a conglomeration of
common law applied by other states was applied. The court is saying that
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Kentucky law is the minority law. The court says that they will decide which law
they will adopt. The court also said that there was no collusive dissolution of the
corporation to create diversity jurisdiction. This case is important because of
Holmes’ dissent:
1) unconstitutional assumption of power by courts of U.S. (Swift
unconstitutional)
2) fallacy behind Swift of the fundamental nature of law (when court renders a
common law decision)
Law is a series of principles, rules, commands, backed by a sovereign; it gets its
character solely by the backing of sovereign power. What follows is that we have
to first identify the power behind the rule. When it comes to the law of contracts,
it’s very clear that states have power to make the law. State sovereigns decide
how to allocate rule-making power: either to state courts or state legislature.
State law must be obeyed in the absence of a valid alternative.
Supremacy Clause – where there is a federal rule, statute, treaty, or constitution
applying to a case, that has to be obeyed. In its absence, state law has to be
obeyed. Holmes is taking the expansive view of the word “laws of several states.”
RDA wasn’t written to trump federal court rule-making over state court rulemaking. Article 1, Section A enumerates the lawmaking powers of Congress. In
the federal system, Congress makes substantive laws and courts interpret them
(separation of powers). In that respect, for federal courts to be making laws is a
usurpation of the horizontal separation of powers. The second allocation by the
constitution is vertical allocation between federal and state powers. The original
conception was that federal powers were quite limited. Anything that doesn’t
come within the powers enumerated in Article 1, the federal government can’t do.
These are the two ways Swift is unconstitutional (according to Holmes):
1) First, as a horizontal matter it allows the federal government to make common
laws, where the constitution doesn’t allow it (although federal common law is
made nowdays in certain exceptional areas). This is a usurpation and
violation of separation of powers principle.
2) Additional usurpation: federal courts taking the power of the states. Although
Holmes doesn’t expand on these points in Black & White Taxi, we see them
in Eerie. Holmes is also concerned with the practical problems (i.e. forum
shopping).
Eerie R. Co. v. Tompkins (S. Court, 1938)
Tompkins’ chance of recovery was higher under the negligence law, which was
how federal courts were deciding such a case, as opposed to Pennsylvania law,
which would apply wanton negligence. Court saw this case as a wonderful
opportunity to get rid of Swift v. Tyson. Brandeis says that 1) Swift didn’t work
the way it was supposed to; and 2) It was misinterpretation of the RDA. Too
much power was taken by federal courts at the expense of state law. Rules
Enabling Act authorized federal rules of civil procedure and was adopted at the
same time as the Eerie decision.
Eerie in a Nutshell: RDA and the constitution require in the absence of
substantive federal law the application of state statutes in common law, in cases
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where it applies. Eerie is probably correct in that no reason state common law
should be excluded. Is Eerie constitutional today? Brandeis is primarily
concerned with federalism argument. Only secondarily is he concerned with
separation of powers. In some cases, there will be federal law and that will
govern. Before New Deal, government’s expansion into many areas of federal
law hadn’t yet occurred. Now, federal government legislates in many areas that
were previously delegated to states. *The test for a valid state statute is much
looser today, because federal statutes cover so many areas. It doesn’t follow that
federal courts’ inherent powers have expanded, because most of the federal
government’s expansion has been through Congress’ legislation. Federal courts
are still painfully limited in their lawmaking power. Eerie doctrine would be
straight forward if it weren’t for federal procedural laws.
Substantive vs. procedural law:
Substantive – duties, liabilities, rights, obligations attached to conduct.
There was not supposed to be any difference between substance and procedure
that was applied by federal courts and state courts – all had to be based on state
law (conformity law). This was before the passage of federal rules of civil
procedure (or Rules Enabling Act that led to these rules). This changed with the
Rules Enabling Act, codifying rules of practice and procedure for federal courts
(this is now in §2072 of 28 U.S.C.). In 1938, the rules were finished and were
submitted to Congress for its acquiescence and Congress took no exception them.
So they became effective on September 16, 1938. They are pretty much like
statute. Article III of the Constitution authorizes the creation of the courts
(Necessary clause also authorizes this – Article 1, §8). Not every procedural issue
that comes up in the course of adjudication cases can be matched with a federal
rule. Interstitial issues (in the gaps between statutes) always exist, as do
interpretive issues. Interstitial issues are problematic. Courts fill in the gaps, so
there will still be instances where courts make laws to supplement these
legislative laws. If you’re on the substantive side of the line, the judge has to
adopt the state law. Only on the procedural side of the line can the federal judge
make federal common law. This power is driven from Article III (repository of
inherent authority for federal courts), as long as it is a bona fide procedural rule.
Eerie and the RDA were never thought to rule out the possibility of inherent
powers of federal courts to create their own procedural rules (some of this power
was delegated to Congress in the Necessary Clause, which it didn’t use until
1938). RDA says nothing about the power to create procedural rules – only
discusses substantive rules.
Hanna v. Plummer (S. Court, 1965)
This case helps us determine issue of substance or procedure. Hanna tells us if
there’s a federal rule on point on the issue, that wins. Then, it’s not an Eerie
problem under the RDA, but one under the Rules Enabling Act. This trumps state
law. Conflict between federal and state rule. State rule called for personal
service; whereas federal rule (4d1) permitted leaving service at the residence of
the defendant. At this point, it really made a difference to the outcome of the
case, because the statute of limitations had run out.
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Hanna I + II – breakdown of analysis of case. Hanna I – would be based on
outcome determinative test. How would it be applied: see if forum shopping
could be avoided. The court was trying to say that there might be isolated cases in
which it would make a difference whether personal service of summons was made
or not, but not in general. This way of looking at the case enables the court to get
different results on statute of limitations (which it had decided in Byrd) and
service of process. This is because it would make a lot of difference in outcome
determination at the moment of litigation whether statute of limitations had run
out or not; the same wouldn’t necessarily be the case in service of summons. This
begs the question as to why the moment of litigation has to be the time-frame –
because people in general don’t plan ahead to adapt their behavior. The Hanna II
test is if the rule looks procedural at all, the court will interpret it broadly under
the Rules Enabling Act. Heavy burden that would have to be overcome to
determine rule is valid. None of the federal rules of procedure have been
overruled under this test. Hanna leaves us with the question as to how the two
tests relate to each other. The best way to decide the Eerie cases is to see whether
we are dealing a constitutional law, federal statute, federal rule, judge-made rule,
or treaty. Constitution trumps everything. If federal statute conflicts with state
law, then the first question is does it really apply and then whether Congress had
the right to pass the federal statute. In Stewart, the court ignores the Hanna I test.
The S. Court has never held one of the federal rules of civil procedure as
unconstitutional. What if the federal law isn’t embodied in one of the specific
federal rules? In this case, Hanna doesn’t apply. Here, the law is somewhat a
mess. We have three concepts here from three cases:
1. Outcome Determination – Guaranty Trust v. York illustrates this concept.
The question involved statute of limitations. Federal Court didn’t want to go
with the state law. S. Court said statute of limitations (another substantive
issue is tolling) affected the outcome of the case and was a matter of
substance. Therefore, state law had to be applied. The problem is that any
rule can be outcome determination – if taken far enough.
Guaranty Trust Co. v. York (S. Court, 1945)
Basic issue: whether federal courts should apply state statutes of limitations or
have their own. York sued the trustee who was administering the notes for fraud
(state common law cause of action). For this action, the state had a common law
statute of limitations (doctrine of laches led courts under equity to cut off certain
actions). This issue was not controlled by the federal rules (land of judge-made
law). Court was confronted with question of whether statute of limitations was
part of substantive law or something procedural. The answer isn’t obvious. The
court looked at the outcome determination test and decided state law would be
used. It’s not clear where this test comes from. The way to have determined this
power of the court could have been formulated under the Constitution’s inherent
powers of federal courts sitting in equity or under the RDA. These would have
been difficult questions, and instead the court took a practical inquiry. The court
realized that forum-shopping, which they had wanted to be avoided by overruling
Swift, would be resuscitated if the federal courts were allowed to have different
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statutes of limitations from state courts. Inequitable administration of justice
would have been the result. The driving force behind the decision was how it
would work. Unanswered question: test of determining outcome proves too
much. Virtually any procedure – depending on how you look at it – seems to
change the outcome of the case. It turns everything to substantive law. It leaves
federal courts with too little right to determine procedural issues. Also, there’s a
problem of timing. If you know ahead of time that statute of limitations is two vs.
three years, you would act accordingly. Outcome determinative test depends on
when you look at a case – back on an issue or forward. This question is left
unanswered.
Stewart
The issue was the effect a federal court had to give to a forum-selection clause.
Alabama state rule about forum-selection clauses was that they were ignored.
Implication was Alabama would keep this case. (§1404 – change of venue) One
of the factors that have to be assessed is the forum-selection clause; it wasn’t
dispositive; it dealt with interest of justice. In §1404, Congress seems to have
been trying to regulate procedure (and according to Article III, Congress gave the
court the right to enact such procedure). The court’s decision here relates to
forum selection irrespective of what state the suit is brought in. Given this, how
would you determine the outcome determination issue? No simple answer. It
depends on a host of other parameters. Here, whether people will go to state or
federal court is a function of the people, circumstances, and law of the state.
Because the analysis is one of federal statute here, the court doesn’t seem to care
that much (it does matter with judge-made laws).
Walker v. Armco Steel Corporation (S. Court, 1980)
The issue broadly was choice between state and federal rule. The specific issue is
when does the case begin, whether it was started within the statute of limitation.
Technically, when does the statute of limitation toll (cease to be valid). Federal
Rule 3 says a case starts when a complaint is filed. Oklahoma rule says that a case
starts when summons is served. Was summons served within the extension
period in this case? No. Therefore, by state’s statute, the case wouldn’t be able to
go forward. The Eerie question here is: does Rule 3 rule or the Oklahoma state
statute apply? The court said this was a wrong question, because Rule 3 says
nothing about tolling or statute of limitations. Therefore, the two rules can exist
side by side. We can have one rule for starting the clock in some cases and have
another ruling for stopping the clock in other purposes. Therefore, Oklahoma
statute was deemed to control for statute of limitations and Rule 3 controlled in
other purposes (i.e. serving an answer, etc.) The court was influenced by the fact
that Rule 3 was purely procedural and statute of limitations starts to affect
substantive issues. If that wasn’t the case with Rule 3, the Hanna issue was
avoided. *Lesson from Walker: Federal rules that conflict with state rules and
you think there might be an Eerie problem. You should circumscribe the federal
rule so that the conflict can be avoided (this applies with all federal types of
laws/rules). Don’t take federal rules at face value in these situations. For Eerie
types of cases, first ask these two questions:
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1) Is there a conflict of law?
2) Apply some modified outcome-determinative test to resolve the issues.
Byrd also introduced a balancing test.
2. Balancing – Byrd v. Blueridge illustrates this concept. The respective
interests of the federal and state systems are balanced. You see who has the
greater interest. Problem is we don’t know how much weight to give each
interest? (check)
Byrd v. Blue Ridge Rural Electric Coop. (S. Court, 1958)
Question at issue: whether Byrd was a statutory employee. If he was, he couldn’t
sue and had to use state’s compensation laws. Namely, who was going to
determine this issue. According to state law, this case would go to judge;
according to federal law, this was a fact-finding issue for the jury. What
difference did this make? It’s really a matter of who’s on the jury. Otherwise, it
doesn’t seem to make a definite difference as to the outcome. It’s not really an
outcome determinative case. Unlikely that there would be a systematic forumshopping based on which way the case went (to judge or jury). People’s behavior
couldn’t be as systematically predicted, therefore, outcome determination test isn’t
met. The court didn’t say that 7th amendment controlled the case. If it had, RDA
would have ruled and the case would have been very easy. If the court had said
that the 7th amendment controlled the case, it would have been a constitutional
issue for the court to decide. As a matter of prudence, the courts don’t confront
constitutional issues unless they have to. The second reasons they declined is that
it’s a difficult question to answer. Potential that there’d be an explosion in
litigation as to what could go to the judge and what could go to the jury. The
court said that federal common law of judge-jury responsibility has been formed
in the shadow of the 7th amendment. It is very important, therefore, and lies at the
heart of federal policy. Therefore, practical interest to prevent forum-shopping
had to be balanced with the constitution-like policies on the federal side. Also, it
won’t always be clear as to how a case will be determined based on whether it
goes to the judge or jury. Problem with Byrd: the balancing test gives rise to
what issues are to be included in the test; second problem is how much weight can
be given to the test – what happens for when we have a strong case for outcome
determination? Good thing about Byrd: it refined the outcome-determinative test.
The issues affecting an outcome are diverse. Implied in Byrd is the notion of
timing – how is it going to affect people’s behavior at the moment they conceive
of litigation. This can change as the time goes forward. When there’s a federal
rule at issue, is the problem the same? Are all federal rules valid, was the
question, or whether they would give way under outcome determination test?
RDA would appear to make federal rules of procedure controlling where they
apply (trumping state rules). It doesn’t work if you see all procedural rules
outside of RDA (Wax prefers this). Rules Enabling Act, however, limits the scope
of federal rules. It had to be a rule of procedure. If it complies with the Rules
Enabling Act, then the rule should control. How does this all fit in with outcome
determination test?
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3. Avoid Forum Shopping – Federal court should act like state court, otherwise
it might cause others to flock to the federal court (it comes from Hanna,
although it was probably dictum there). This would make out-of-the state Ds
better off than in-state Ds (those who could invoke diversity). *If the federal
rules are on point, we don’t need to go through these three steps.
Klaxon Co. v. Stentor Electric Co. (S. Court, 1941) [right place?]
Conflict is choice of law as between two different states. Just because a case
takes place in a particular state, it doesn’t follow that state’s law applies. What
happens when the case goes to a federal court? How does the federal court decide
choice of law? Klaxton tells us which state’s choice of law rules will be applied
by federal court to determine the choice of law question. The questions are:
 Whose choice of law rules apply (each state has its own choice of law rules)?
 Does the federal court use the state’s (in which it sits) choice of law rule?
Klaxton says yes. No federal common law for choice of law. Does this make
sense under York and Byrd? (RDA doesn’t have something to do with it, because
it deals with substantive law.) Assuming the Klaxton rule deals with a procedural
issue, how would this affect the outcome? What is the amount of forum-shopping
you would get if federal and state choice of laws could be different? First thing
you would have to do is to look at the state’s choice of law rule to see which state
would be chosen. If the federal choice of law rule also would pick that same
state’s law, no difference in outcome would occur. Therefore, this is very
complicated. We’d need to realize that a lot of issues would have to be
determined. Vertical uniformity (whether you go to state or federal court in one
state) results in Klaxton rule. But we could get horizontal disuniformity, because
we could get a different result in a different state. [review] The horizontal
disuniformity is more serious with respect to outcome determination because it
affects both substance and procedure. Therefore, Klaxton is a very difficult case
to analyze (and ultimately it might not be correctly decided).
B. The “New” Federal Common Law
 No substantive federal common law because Congress is supposed to
make federal laws and where it doesn’t states make laws.
 There are exceptions: certain areas where federal courts have to make the
laws, so they either “borrow” authority from Congress, or are vested with
authority to make the laws. Areas:
1) Preservative Lawmaking -- to preserve primary operations of federal
government or courts, i.e. international relations (which is responsibility of
federal government); admiralty; inter-state disputes; disputes concerning
the federal government;
2) Preemptive lawmaking – federal program or policy or statutory scheme
that would require federal rules more consistent with the objectives of the
program or policy. Federal rules would trump state rules.
3) Interstitial (gap) lawmaking – Congress hasn’t addressed it; state law
doesn’t provide an answer. Federal courts have to fill in the blanks; a
form of delegation by Congress to the courts.
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Federal common law today differs from federal common law in the time of Swift
v. Tyson. Federal common law is supreme law of the land. It is binding on states.
That wasn’t true under Swift (where state courts applied state law and federal law
in federal courts).
Clearfield Trust
This case is an example of preservative lawmaking. A check was stolen which
was taken in by J.C. Penny and deposited. The bank they deposited it in was
endorsed by Clearfield Trust. The Treasury got stuck with the bill (the check was
written by the Treasury). The initial signature, however, was a forgery, so U.S.
Treasury paid someone to whom the money didn’t belong. The issue was who
would bear the cost of the stolen check: Clearfield or U.S. Treasury.
Pennsylvania law said the bank wouldn’t bear the loss, because the U.S. Treasury
notified the bank with too much delay. The Third Circuit thought federal, not
Pennsylvania, law should govern this case for two reasons:
1) The whole authority to issue the check was grounded in federal law.
2) Uniformity and predictability – If you decide it’s federal law, then you can
decide as a matter of law to borrow state law if that’s the right thing to do (in
cases where it seems more appropriate, there’s a presumption to borrow state
law).
In this case, the court thought that the Treasury needed the predictability. The
state law didn’t protect the federal Treasury’s interest enough. The court came out
with the rule that you had to show that the delay caused the loss (very hard to
prove). This was a modified delay rule. In deciding whether Clearfield is right,
look at the RDA. In the absence of statute, treaty, constitution, etc., state law
applies. Why not here? There is no federal statute or provision that governs this
issue, so state law would have to apply. Here, we have a state law on point (it
addresses the very point, therefore, no interstitial lawmaking would apply).
Del Costello
This case represents interstitial lawmaking. Two cases of interstitial lawmaking:
1) detailed (fine-grained) common lawmaking with a gap (check)
2) statutes – so broad and so vague that in effect Congress has delegated the
authority to courts to decide. E.g. federal statute of anti-trust.
§301 of the Federal Labor Management Relations Act provides federal courts with
jurisdiction to decide collective bargaining disputes. Employee was suing
employer for breaching a provision of a collective bargaining agreement and the
union was sued as well. The employee was suing the employer based on the
breach of contract, a set grievance, and the union for its obligation to its members
(duty of fair representation). What was missing was a statute of limitations – how
long cause of action would last. The statute was silent about this. No state law on
this because this was a federal statute. The court first considered the Mitchell
case, but the facts weren’t quite the same; the same was true of the Hoosier case.
Basic idea was that none of the cases helped the court very much. Then they
looked to state statutes, but couldn’t find one they liked. They also looked at the
National Labor Relations Act, §10b, which established a six-month limitations.
Federal policy/balance behind this statute’s six-month limit was that the
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government wanted to resolve labor disputes expeditiously. (90 days was too
short a time, and several years was too long; 6 months was a balance.) Difference
between Del Costello and Clearfield is that if you look to the RDA, Del Costello
involved a federal statute, but one which didn’t entirely cover the issue. There is
no state law that applies here, so this is another difference. This is difference
between true interstitial lawmaking and other types of federal lawmaking.
VII. Pleading – Federal rules tell us that pleadings aren’t that important. They’re good at
giving notice to the other side. To flush out the facts, for example, we have pleadings (it
used to be more important). Pleading system -- set out in out in Rules 7,8,12, and 15 – is
mainly for providing notice (although it has many other purposes) to the other party
(extremely functional purpose). Secondary function of pleadings is to focus and define
issues and in the extreme case get rid of the case, so litigation resources aren’t wasted.
Rule 8a – Pleading requirement
Short statement doesn’t mean that you have to state formal pleading of facts for your
case, but you have to plead enough facts. It makes the pleading requirement somewhat
more flexible. If you plead too many facts which show you don’t have a case, you will
have hoisted yourself out of court.
A. Rule 11 -- Liberal discovery rules and pleading requirements create an
environment for abuse. You can be in the discovery stage for months or years.
It’s often fairly far enough into the litigation when it’s discovered that claim is
frivolous. Rule 11 was put in to try and discourage frivolous litigation, because it
has sanctions. It applies to all documents, except discovery documents. It’s a
certification idea. There’s incredible detail in Rule 11. The rule was modified in
1993, which takes the teeth out of it. When signing a document, you are
certifying that you’ve made reasonable inquiry, document is not for improper
purpose, and legal and factual contentions are grounded. Three procedural
differences to Rule 11 vs. old Rule 11.
1. Sanctions are discretionary (required under Rule 11)
2. Certification is a continuing one (now it’s not just when we sign, but
everytime we present something from that document)
3. Safe harbor provision – in old Rule 11, a sanction would be filed if
someone violated the Rule; now we can draft it and the other side has 20
days to pull back the violated sections).
Old Rule 11 – basic element: it required an attorney or unrepresentative pleading
motions, attesting to a sort of objective reasonableness as to the arguments and
factual assertions. Rule 11 sanctions could be initiated by court itself as well.
Attorney was required to make a reasonable inquiry into the truth of the
allegations of the client. Legal arguments have to be assessed by the attorney as
well (reasonable extension of prior precedent). Not clear whether an optional
signing by a represented party will lead to sanctions (check). Main change in Rule
11 is in sanctions. There’s a safe harbor rule (20 days within which the other
party can change their pleading); judges have more discretion now in giving out
sanctions.
Business Guides Inc. v. Chromatic (S. Court, 1991)
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Chromatic was alleged by Business Guides to have infringed copyright. Law
clerk called Finley, Kumble (P’s law firm) to find out what the error 10 seeds
alleged to be copied were based on. 9/10 listings contained correct information.
At the hearing, judge was annoyed at disparity between pleading and what law
clerk had found out. Business Guides said it was a coincidence. Later, they came
up with another explanation and applied sanction of Rule 11.
 First issue in the case was who could be sanctioned. Only attorney was
required to sign the pleadings (unless a party wasn’t represented), but here the
party represented signed too. Here, the court said anyone who signs the
pleadings can be sanctioned (under old Rule 11).
 Court rejected the idea that standard for imposing sanctions is subjective. P
wanted subjective standard, because the mistake it made was in good faith, but
simply arising out of carelessness. Court said if no objective standard, there
would be huge loophole in the law of Rule 11. This result has been criticized,
because Rule 11 isn’t intended to punish bad lawyering. Nonetheless, this still
stands. Both attorney and party can be sanctioned, according to Business
Guides, but different standards apply. The standard of reasonableness with
respect to legal arguments are very very low, because non-attornies don’t
know about the law. (Under new Rule 11, the parties basically won’t be
sanctioned for legal arguments, but error in facts). Rule 11 has also been
criticized for discouraging creative argument-making by lawyers. In fact, that
really hasn’t been the case. The main problem with Rule 11 is that it creates
satellite litigation (creating more litigation). It ties up courts’ time. Rule 11
has its defenders as well. New Rule 11 looks like interest-group revision
(especially by trial lawyers). Sanctions have been weakened, because they are
no longer mandatory; court doesn’t have to impose monetary sanctions; and it
also has a safe harbor provision. Under new Rule 11, the represented party
has an option to sign. So, probably under Business Guides the party wouldn’t
be sanctioned. However, there is a section under the new Rule 11 which says
that client may be sanctioned if it responsible for someone else’s violation.
(loophole: The attorney wouldn’t necessarily be sanctioned for the client’s
wrongdoing, so then client who is only sanctioned if it is responsible for
someone else’s violation gets off without sanction (paradox). Maybe, the
drafters meant represented clients not to be sanctioned – even though nonrepresented clients get sanctioned.
Scalia’s objections to new Rule 11
 If something isn’t broken, don’t fix it.
 safe harbor a joke
 sanctions toothless
B. Complaint – What P files. Under Rule 8a, three things are necessary.
1. Statement of smj
2. A short and plain statement of the claim
3. Demand for judgment
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All three have to be there. The federal rules don’t require a lot of detail in
pleading (The NY and California a code pleading is required). The whole idea
of federal rules is that cases want to be tried on their merits, not dismissed for
technicalities. Some call the federal rules, “Notice Pleadings.” Somewhere in
the claim, all the elements of a cause of action have to be identified. There are
exceptions to the liberality of Rule 8. These come up under Rules 9b+g. Rule
9b (?) – circumstances constituting fraud or mistake must be pleaded with
particularity. Rule 9g – items of special damages (those that don’t naturally
flow from the inquiry) must be pleaded with specificity
C. Defendant’s response – Rule 8b
1) File an answer or
2) File a motion
What goes in the answer: first, we respond to allegations of the complaint: admit,
deny, don’t know (lack sufficient information – effect of denial; but you can’t rely
on that if information is in your control or publicly available). Failure to deny is
an admission. If Rule 8c (affirmative defenses). We have any of the defenses, we
have to put them in or we’ve waived them (e.g. statute of limitations, statute of
fraud, res judicata – “even if I did this, you can’t sue me” – different from denial).
Complaints contain both legal claims and facts. D can contest both factual
complaints or the merits of the claims based on law. If the factual claims aren’t
disputed by D, he waives it. It’s not clear with the legal theory aspect of the
complaint, whether D has waived it by not disputing it. Rule 8 allows either
specific or general denials. General denials are generally disfavored by judges.
Dioguardi v. Durning
This case is in the Federal Circuit Court of Appeals, on appeal from the district
court. No law is mentioned by the claimant, so the court guesses smj. The court
dismissed it first without prejudice, meaning P could amend his pleading. The
second time, the court dismissed it with a final judgment. Rule 8 (General Rules
of Pleading) says that you just have to show one way or another cause for relief.
D says that there should be a motion for dismissal under Rule 12 (b) (Defenses
and Objections – When and How Presented – By Pleading of Motion – Motion for
Judgment on the Pleadings). Prose complaint – one where you present yourself
without an attorney. What legal claims did the Court of Appeals say that Mr.
Dioguardi was making? There was a federal statute that governed the auctioning
of his goods (19 U.S.C.A. §1491). The second claim was that some of his goods
were missing: conversion (deprive a person of a partial interest in some unlawful
way). The court was trying to fit Dioguardi’s claims into some valid legal claim.
In doing so, the court was stating the principle that in order to have a legal claim,
you don’t necessarily have to put your claims into legal categories or rules. The
limiting principle is that you can’t say anything that is inconsistent with your
recovery. Also, the gaps have to be able to be filled in by reasonable inferences
from the court. The second principle is that in making a pleading, you don’t
necessarily have to give all the details – as long as proper notice is given of the
complaint (this may vary case by case). There are all kinds of mechanisms for
bringing out the facts before trial. Dismissal on a complaint is a fairly rare thing
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because of all the mechanisms available in our system to get all these facts out.
“Substantial justice” in Rule 8f is a codification of the Dioguardi case. Three tests
to see whether sufficient pleading has been made:
1) Notice – to see whether the other side knows enough to understand the claim.
2) Elements – e.g. for liable, the following elements have to exist:
a) malicious
b) untrue
c) damage
d) publication
Does the complaint have to point to facts for each of the elements? Some
courts will require you to say a specific thing with respect to an element; others
will allow you to just touch on the elements that give you a legal claim.
3) Inconsistency Rule (most common approach) Connoly v. Gibson is an example.
As long as in proving your claim, you leave the door open to providing facts that
are consistent with proving your claim [check] e.g. you shoot yourself in the foot
by putting in the claim facts that let the defense win. i.e. for liable, you indicate no
publication. However, there is always lurking in the background a possibility for
amendment for the pleading. That’s why judges sometimes don’t throw out cases
that have claims that are bare bone. Sometimes, the court asks for Rule 12e
(motion for more definite statement). Dioguardi was a pro se plaintiff (one
without a lawyer). Judges are going to be more lenient with such plaintiffs. Rule
8, however, sets the floor (minimum requirements).
Rule 7: Pleadings Allowed; Forms of Motions
Rule 13: Counterclaim and Cross-Claim
Counter-claim by D can be any complaint D has against P.
Cross-claim: A sues B and C and they sue each other [check]
Rule 14: Third-Party Practice
Third Party Claim: you sue A, but A says it was C, so both A and C are brought
in (Rule 14b). If the facts are contested and not resolved, they are put aside. If
they aren’t contested, they are admitted as resolved and closed. The answer has to
meet both the factual and legal complaints in the pleading.
D can issue:
1) general denial, or
2) special (some true, some false)
3) qualified (“untrue – but other things true in their place)
4) dummy (no information to say true or not – sidestepping issue for later)
5) hedge (leaving the door open for later)
Legal allegations are met by defenses. Rule 8c tells you about pleading defenses.
For an affirmative defense, you must do it in the answer, otherwise you waive it.
Three-tiered structure for when you have to plead these defenses:
Waiver or preservation of certain defenses: 12h-1, 12h-2, subject-matter
jurisdiction.
Rule 12h-2: you have more time to object to failure to state a legal defense to a
claim because your defense could take time throughout the trial. You can’t be
expected to object to a defense that is sprung on you last minute.
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Distinction between motion or pleading that is procedural and one that is
substantive (Rule 8 and Rule 12).
Rational behind structure of Rule 8 is that substantial defenses are made up front
and every one knows what they are dealing with. There is, however, no excuse
for delaying venue. (Rule 8 deals with substantive issues and Rule 12 with
procedural). There are very few claims on Rule 12 for which you have extra time
to object. For smj, it’s so important that you can raise an objection any time
during the trial. For pj, however, you have to do it upfront.
Wingfoot California Home Co. v. Valley National Bank
This case illustrates the negative pregnant concept (they were denying the $150,
but not everything in the complaint. In the course of denying the $150, not
everything was denied, i.e. $149. Negative pregnant is like two negatives making
a positive). D should have said that he denied $150 and the granting of attorney’s
fees. Bona fide defenses in the federal system have to be pleaded by D.
Avoidance too has to be pleaded by the defendant (not all states do this). There’s
often a particular issue of whether there is an audience or affirmative defense.
Rule 8c lists a whole set of affirmative defenses, but it’s not exhaustive. In
Ingraham, another list of affirmative defenses are found (common law by judges
to fill in the gaps). Federal court isn’t bound with state law as concerns
affirmative defenses with respect to pleadings.
Ingraham v. U.S.
U.S. appealed that damages were too high under state law (FTCA says state law is
applicable). The question is not whether this limitation applied, but whether
government had to plea this limitations upfront in its pleading. The court said yes,
and that the government couldn’t come to ask for it after the jury’s verdict – that it
was too late as an affirmative defense. If the government had come and said the
verdict was illegal because the law required a cap on damages, the law would be
deemed injected in the case merely by pleading medical malpractice. Then it
would have been applicable. D would probably not have had to specifically bring
up the damages cap if it was part of a pleading of cause of action. Four criteria
Ingraham says we apply to see whether affirmative defenses apply or cause of
action:
1) necessary element of cause of action (statute elements can be determined from
statute itself; common law elements are determined from history)
2) who has better access to element of information? (element of surprise)
3) should matter be indulged or disfavored?
4) prevention of unfair surprise
In Ingraham, tort is generally a cause of action without limitations, unless it comes
from outside (other regulations). This makes it an affirmative defense.
Traditionally, caps on damages torts have been disfavored.
Taylor v. U.S.
This case was similar to Ingraham in that at the last minute D tried to say the caps
on damages had to be used. The result was opposite though. The court says that
according to rule 8d, P’s damages pleading is deemed denied by D, so D doesn’t
need to specifically deny this. California state court came out exactly the
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opposite. It would have been possible to not use Rule 8 in this case and have kept
the issue based on state law.
Gomez v. Toledo
This case demonstrates the Ingraham problem differently based on statute and also
on burden of pleading vs. proof. The police chief fired Gomez and Gomez
brought a charge of retaliation against the police officer. §1983 – a civil rights
statute was used to sue. D tried to invoke the common law immunity which
excludes violation of §1983 in certain circumstances. Elements for defense for
proving immunity of federal officers: if the defendant was acting in the capacity
of his office, acting in good faith, and whether right violated was ambiguous.
Whether P had to plead bad faith in order even to win or whether D had to plead
good faith was an element that was only part of the immunity element. S. Court
said that lower court was deeply confused about what §1983 was all about.
Gomez says that you look at the statute if you’re not sure about the conditions
under which you need relief. Rehnquist says that he’s willing to go along with the
decision here only as long as the opinion doesn’t include burden of persuasion,
but burden of pleading [check]. This suggests that he would like P to have to
prove bad faith on the part of the officer. Rehnquist doesn’t want officers to be
put into the position of having to prove that they were acting in good faith every
time they were doing their job.
D. Amending pleadings – Rule 15 (Amended and supplemental pleadings) –
Rule 15a – right to amend. P has right to amend once before D serves an answer.
P still has a right to amend even if D files a motion (not an answer). D has right
to amend within 20 days of serving his answer. What if the time frames are over?
We can ask for court’s permission. “It shall be freely given,” the rule says.
Variance is where we plead one thing and prove something else. This is very
vague and requires interstitial lawmaking. If evidence comes in for some new
claim without objection from other side, we treat it as amending complaint
(amending conforming to evidence, Rule 15b). If there is an objection by the
opposing party, P can still move to amend – even at trial – by permission of the
court (if it subserves the merits of the case). The burden is put on D to show that
he’s prejudiced by the amendment. Rule 15c – amendment after statute of
limitations has run. The party tries to get a “relation back.” The amendment is
treated as though it were filed at the same time complaint was filed – avoids
statute of limitations. How do we get relation back? Easier to do when a new
claim is added as opposed to adding a new D. Why is such a provision there?
Amendment is deemed to have been made on the date the pleading has been
made. This is because of statute of limitations. Relation back amendments
represent a mixture of state and federal law rules. If there is a state law in relation
back, it will be used. However, a wholly unrelated claim can’t be tacked on to the
amendment. There has to be unity of subject-matter. Rule 15c doesn’t tell us
whether amendment will be allowed in the first place (we have to look at Rule 15a
and b) and only then whether it relays back. Rule 15 gives the party a second
chance to formally amend/add a defense. It gives the judge a tremendous amount
of leeway. This rule is for P [check]. Rule 15 seems to favor allowing the
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amendment rather than shooting it down. Key obstacle to allowing it is prejudice
to the opposing party. The later the amendment is sought, the greater the
prejudice to the opposing party. Rule 15 has been rewritten a number of times.
Moore case illustrates Rule 15b, amending to conform to evidence [D.C. Court of
Appeals’ interpretation is like a federal court]. After the evidence was in,
Moore’s wife wanted to amend her plea. She hadn’t counter-claimed for custody.
She realized she didn’t just want denial of custody for him, but also custody for
herself. The court allowed amendment of pleading to conform to evidence – after
all, all the issues she wanted to add were already there. The court said that the
functional question to ask was whether there was an adequate opportunity for the
husband to respond to these amended pleadings. One of the things the court said
that should be looked at was whether evidence had already been injected into the
case which hadn’t been objected to by the husband and thereby preclude the
husband from claiming he had been surprised. The court said that some evidence
had come in about the mother’s support (spousal maintenance), but the court
thought this was a separate question from custody.
Beeck v. Aquaslide ‘n’ Dive Corp.
This case illustrates Rule 15a. In its answer, defendant admitted to being
manufacturer of the slide. This becomes part of the pleading. Then the statute of
limitations ran out. After this, president of Aquaslide visited the slide and decided
it wasn’t his company’s slide. The company asked to amend the answer. They
wanted to bifurcate the trial – one trial on just whether they had made the slide. If
it was found out that they hadn’t made the slide, the case would be dismissed. If
not, the manufacturing of the slide would be just one of many factors. The court
granted the motion, but at an interlocutory level, there was a trial (check). Ps
appealed the jury’s verdict for D.
Three-factor test (from Foman v. Davis) was used:
1) bad faith motion?
2) repeated failure to cure.
3) whether amendment would prejudice the plaintiff’s ability to try the case.
The court found that Ps wouldn’t be prejudiced, because they had full opportunity
to address this new issue (whose slide it was) to the same extent as they would
have had if the denial of the slide’s manufacture had been made at the beginning.
The court slides over the issue of statute of limitations. P’s pleading accused the
wrong party. The new party had to have had notice. There were a whole series of
middlemen in this process. Therefore, it’s difficult to know whether the right
party had notice and thereby could be brought in after statute of limitations had
run out. Foman v. Davis standard talks only about prejudice to opposing party.
Wax thinks the test is too narrow (the other party might be prejudiced too?) This
trial was tough, because not permitting this mistake to be corrected would be very
strange (the jury couldn’t ignore that Aquaslide didn’t manufacture the slide).
Worthington v. Wilson
This case illustrates Rule 15c.
Worthington sued under §1983 and named three unknown federal officers, in
addition to the village. After the statute of limitations had run out, he tried to
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amend pleading to name officers and drop the village. The court decided that
Rule 15c(3) didn’t allow relation back where no name had been provided (the
opposing side said this was dumb because everyone would provide a fake name
thereafter). The second argument was that the state rule should control the issue
of relation back if there was a state rule (there was one in this case) and no federal
law on the point. The court rejected this idea -- tolling could be arguably
procedural. If I it is (as Hanna tells us) federal rule wins all the time.
What kind of argument could we make against this argument? What is the
difference between Rule 15c and state rule on unnamed parties? Federal rule
doesn’t discuss unnamed parties, so it only has to do with when you name a party.
Therefore, it wouldn’t collide with the state law (one way to have your cake and
eat it too). Instead, the court said Rule 15c addresses the unnamed parties by
omission (one interpretation).
Gillispie
In this case, the court requested enough facts for a sufficient pleading (remnant
from previous pleading rules). The problem, according to the court was that there
weren’t enough facts to prove the allegations. In effect, the court was requiring
enough facts for a mini trial. The complaint in Gillispie would satisfy the federal
pleading rules, but it didn’t satisfy the old fashioned code pleading system.
Rule 12b(6) isn’t totally toothless.
Garcia
The Garcia case demonstrates this. This case’s cause of action was defamation
(under which category are libel and slander). The Hotel chain wanted the
employee’s case dismissed, because they contented there wasn’t enough to
establish a claim. The employee didn’t allege the use of publication (here
meaning dissemination), which would be needed for slander. What was said in
the complaint that could be construed as if there was a publication? Employee
stated that he was “falsely and slanderously accused.” The court said that it’s
alright, as long as the statement is expansive enough to allow him to prove the
elements at trial. The other side could not be plausibly be heard to say that they
weren’t on notice that slander would be an issue at trial. The second argument for
a defect in the pleading: contention that given what plaintiff said, he showed he
couldn’t win. Conditional privilege vs. absolute privilege: Conditional privilege
– something that would be otherwise liable, but for a reason you would be
excused from charge of defamation [look up].e.g. you discipline employee
through such libel. The court said that employer would lose its conditional
privilege if it was found the statement was made with malice. The hotel chain
wanted the complaint dismissed based on conditional privilege. The court said
that there were issues of fact that were unresolved by the pleading that might
contest the recovery. The complaint, therefore, wouldn’t be dismissed. Absolute
privilege – the allegation by the employer made at a formal hearing before the
Porto Rico Board; the court had everything it needed to know about that particular
allegation because it was a statement of an official hearing. This would be a
complete defense for the Hotel chain, and the paragraphs in P’s pleading dealing
with this allegation were stricken out. Can D use a motion on Rule 12b, or must
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he respond to the pleading first and then use a motion on Rule 12c? (as long as
there are no controversy on the facts) Courts do it in different ways. Formally,
privilege is an affirmative defense. Rules say that D has to file a formal answer
claiming affirmative defense. The Garcia case said an answer did not have to be
filed. [check] Why would D prefer a Rule 12b dismissal rather than filing an
answer? D wouldn’t have to respond to all the points of a complaint, whereas,
with the motion for dismissal, he could just make a show of his defense on one
point. Garcia also dealt with a motion for a more definite statement. Courts are
usually reluctant to dismiss for failure to state a claim, so a lot of Ds will ask for
more definite statements from P. This motion builds in a bit of flexibility, allows
the judge to “massage the complaint.”
American Nurses’ Association v. Illinois (U.S. Court of Appeals, 7th Circuit,
1986) Ps said in a class action suit that male jobs tended to be much better paid
than female jobs (and females were segregated in particular jobs). The judge
dismissed the claim because it based the complaint on comparable worth, which is
a theory that male jobs paid more than female jobs even though comparable skills
were used. Comparable worth had already been deemed by courts to be a
structural problem, not intentional discrimination. This wasn’t covered by Title
VII. Judge Posner thought this claim was hastily dismissed. Some allegations
were left open that could be proved. For example, one possibility was that
employer was deliberately steering women in a particular job; another example,
how much was being paid was not market-driven, but based on how much men
should be paid [check]. When Rule 12b (6) is granted, it’s res judicata if it’s
dismissed with prejudice. Rarely, does a judge dismiss with prejudice the first
time. It’s a little strange to say it’s res judicata for no cause of action. P,
however, can try to take the case to another court. That’s why defendants
sometimes ask for both Rule 12b (6) and res judicata.
Speaking motions [look up]
Matters introduced outside the pleading lead to summary judgment motion. Then
Rule 56 applies. Facts can be introduced through affidavits or other non-pleading
instruments. The court then treats those as a Rule 56 motion. If the facts warrant,
a mini hearing is held.
VIII. Joinder (2nd biggest, I is biggest) – Joinder defines how big litigation is, i.e. how
many parties and claims. Federal rules are liberal on joinder. *Every claim we assert
under joinder rules, we are going to have to assess smj (diversity or federal question).
Claims : Rule 18 – no t/o; Rule 13 (counter-claims) – compulsory – t/o; permissive – no
t/o (non-claims – t/o).
Parties: Permissive – Rule 20 – t/o; compulsory – Rule 19 – necessary, indispensable
Rule 14 – impleader
Rule 22 – interpleader
Rule 23 – class action
Rule 24 – intervention
Multiple claims (joinder of claims) vs. multiple parties (joinder of parties) is an extremely
important distinction. [28 U.S.C. 1367 draws a sharp distinction among these.] Rules 13
and 18 are the important rules for claims.
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Rule 18 (Joinder of Claims and Remedies) – wildly disparate claims can be joined
together (only when you are suing the same party). The rule only establishes a possibility
which is subject to other requirements (i.e. subject-matter jurisdiction).
Most type of joinders are joinder of parties (Rule 19).
Rule 19 decides when the courts decide that a party that should be part of the case isn’t
there and should be.
Rule 20 – permissive joinder of parties (parties joining together to sue someone or to be
sued). Requirements are strict: common transaction and occurrence, as well as common
issue of law.
A. Claim Joinder by Plaintiff (Rule 18a) – Any claims can be joined.
B. Claim Joinder by Defendant
1. Counterclaim – Rule 13 -- claim against an opposing party (i.e. against
P). Once you are sued by someone else in a lawsuit, even if they aren’t the
original plaintiff, you become a defendant for the purpose of the suit.
a) compulsory counterclaim (Rule 13a) – claim arising from the same
transaction or occurrence t/o) as P’s claim; you must file this in the
pending case or you lose it (*only claim that is compulsory). It is a
type of res judicata and a type of waiver (the claim is gone or the
merged claim is final).
b) permissive counterclaim (Rule 13b) – doesn’t arise from the same
t/o; you can file it in the same case, but you don’t have to. Under
U.S.C. 1367, the compulsory counterclaim gets to ride the coattails of
the main claim (ancillary). The principle of supplementary jurisdiction
is that it doesn’t have to have independent jurisdiction. Rule 13b is
like Rule 18 in that it doesn’t have the same transaction requirement
attached to it. There’s also a cross-claim provision (Rule 13g). The
co-parties can sue each other as long as there’s a relatedness of the
transaction or occurrence (similar to Rule 13a).
2. Cross-Claim – Rule 13g – This is against a co-party, not opposing party.
It must arise from same t/o as well. It is not compulsory – no such thing as
a compulsory cross-claim.
C. Proper Parties – Rule 20a – How do we know who the parties ought to be?
This is the issue of who may be joined. Rule 20a tells us we can join as coplaintiff if 1) claims arise out of the same t/o; 2) claims raise at least one
common question. What about the co-defendants? It’s exactly the same test.
D. Necessary and Indispensable Parties – Who must be joined. P decides who
the parties are going to be, but sometimes someone is left out. Sometimes, the
absentee (A) is really interested in what is going on in the lawsuit. The court
will then force A to join the suit. Rule 19 governs this. Three steps:
1. Is A necessary? Yes, if A meets Rule 19a(1) or 19a(2).
a) Without A, we cannot accord complete relief.
b) Without A, A’s interest may be harmed.
c) Without A, D may be subjected to double/multiple liability. The
focus is on efficiency, absentee’s interest, and D’s liability. If any
of these 3 are met, we bring in the party.
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2. Is Joinder of A feasible? Yes, unless there is no pj or he destroys
diversity jurisdiction. (Rule 19 is tough in itself and it can also test us
through the back door on pj and diversity jurisdiction.) If joinder is
not feasible, then we go to Step 3.
3. You choose to proceed or dismiss. How do we decide? Rule 19b.
Four factors in this rule [look up]. Courts don’t like to dismiss if there
isn’t an alternative forum they can go. Indispensable is a label we put
on the absentee if we choose to dismiss the case instead. Joint
tortfeasors are not necessary parties.
Temple v. Synthes Corp.
Temple sued Synthes in a federal court in Louisiana based on diversity
jurisdiction. Then he sued the doctor and hospital separately in a separate court.
Temple didn’t want to have the two parties in the same case. It could
psychologically weaken his claim in the eyes of the jury. The motion for joinder
was made by Synthes under Rule 19(a). Terrible confusion in the lower court’s
distinction between an “indispensable” member to a party or a “necessary”
member. By definition, including the doctor in the case would not be
indispensable. The lower court ruled that he was a necessary party. The higher
court said that the doctor wasn’t a necessary party. The lower court, however,
non-suited the case based on Rule 41 – not under Rule 14 (Synthes would have
had to bring in the doctor and hospital under Rule 14, instead of waiting for
Temple to bring in the doctor and parties and then having the court dismiss the
case, because Temple didn’t comply.)
E. Impleader (Third Party Practice) – Rule 14a – These joinder rules start
with “C,” and they are claims by people already in the case. Those starting
with “I” mean we are bringing someone new in. Impleader is bringing
someone new. It allows a D to bring in an absentee who owes him damages in
an indemnity claim or contribution claim (i.e. insurer, joint tortfeasor).
Impleader brings in the third party D. This isn’t to be confused with crossclaim. Rule 14 also allows two other claims. After the third party D is
brought in, he can sue P and P can counterclaim. There are significant
limitations on A asserting claim on C. The judge has tremendous amount of
discretion in allowing the impleader to go forward. Under Rule 20, the judge
can sever or order separate trials for the added party. (e.g. Own v. Kroger)
F. Intervention – Rule 24 – Someone can join herself to a case if transaction
arises from same occurrence. She can join either as P or D.
1. Intervention of Right, Rule 24a(2) – same as test 2 for necessary party
(in Rule 19). Her interest will be harmed.
2. Permissive Intervention – Rule 24b(2). Absentee’s claim and the
pending case have at least one common question – at the discretion of
the court.
G. Interpleader – very specialized. It involves fight over ownership over a
thing. Stakeholder forces the joinder of all the claimants out there in a single
case to determine the ownership – avoids multiple litigation. Usually, P tries
to get in the other parties, but sometimes D does, because if he wins, he
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doesn’t want new suits to try and get a share of the relief. Two different types
of interpleader:
1. Rule interpleader (Rule 22)
2. Statutory interpleader
Rule interpleader is treated like a diversity case. Statutory interpleader is treated
like a diversity case. Statutory interpleader is different. To determine diversity,
under the rule, the stakeholder must be diverse from every complaint. Under
statute, all we need is one complaint diverse from one other complaint. Amount
in controversy – under Rule, it must exceed $50,000. Under statute, we need
$500 or more. Under Rule, we look at same venue rules. Under statute we can
claim venue in any district where any claimant resides. Under rule, service of
process rules are used, but under statute nation-wide service of process (a lot of
interpleader cases are brought by insurance companies).
H. Class Action – Rule 23. All four requirements have to be met (Rule 23a).
It’s a representative suit, suing on behalf of a group.
1. Numerosity – too many people for practical joinder
2. Commonality – something in common.
3. Typicality – representative’s claim must be typical of claims of class
members.
4. Representative is adequate – due process problem (class members
will be bound by representative and his lawyer).
Rule 23b. Three recognized types of actions:
1. Prejudiced class action
2. Equitable relief (injunction, not damages, e.g. useful in employment
discrimination)
3. Damages class action; show a) common question predominates; b)
class is superior method for handling the dispute (usually used in mass
tort cases; also has been expanded to include other cases, such as toxic
cases)
What do we do about notice in a class action? Representative pays to give
notice to all the class action members. This only applies in Rule 23b(3).
That way, they can opt-out if they won’t be in it. All members are bound
by judgment unless they opt out (only in Rule 23b(3)). SMJ: What if we
have diversity of citizenship of the class members? What about amount
(missed answer). Zahn said that every single person had to have a claim of
over $50,000. Appellate authority now that Zahn has been overruled. If
representative has $50,000 claim, but all other class members don’t, it’s
ok.
Ticor Title Insurance Company
Case #1: Ps sue Title Search carriers under federal law and went to a federal
district court in Pa. It was a class action suit on an anti-trust case. During the
hearings, some members wanted to opt-out, but they weren’t allowed to. Under
Rule 23 b (3), the members have the right to opt-out. If the most important part of
the relief you are asking for is money, it’s a Rule 23 b (3)-type of class action suit.
Yet, in this case, the members were forced to remain part of the class action. The
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case was settled and didn’t go to trial. *Settlement was equivalent to a judgment
in the case. Settlement extinguishes claims in the case. The case went to the
court of appeals, nonetheless, because Arizona and Wisconsin took the settlement
to an appellate court. They were unhappy because they hadn’t had the right to
opt-out. The consequence of having being forced to be a part of the class-action
prevented them from suing on their own (the idea behind the class action being
that it is ideal and efficient for all class members to be represented together…) S.
Court then said that the issue of whether the prior case was under the category of
Rule 23 was now conclusively determined and they wouldn’t rule on it again
(check).
Case #2: Ticor Title took the case to S. Court where the 9th Circuit reversed the
case in part. The appeal wasn’t an interlocutory petition (preliminary), because
the 9th Circuit would have allowed a new trial ruling (ruling that Res Judicata
wasn’t final in that case, because it would have been unconstitutional). S. Court
had to decide the question of “whether a federal court may refuse to enforce a
prior federal class action judgment, properly certified under Rule 23, on grounds
that absent class members have a constitutional due process right to opt out of any
class action which asserts monetary claims on their behalf.” The court refused to
answer this question. If the case had in the first place been certified under Rule
23b(3) could be a big mistake. It could have been certified on the wrong
interpretation of a rule. The case therefore could have been premised on the
wrong rule, and it would be a waste of time to rule on the case. Other similar
cases would rarely come up, according to this argument. O’Connor dissents,
saying that there will be damage, because the Ninth Circuit decision stands,
creating confusion.
Abbot Labs
Frees sues Abbot labs in a class action suit in Louisiana state court, asserting state
anti-trust claims. Ds made a move to remove the case to federal court. Frees then
made a move to remand the case back to state court. There was a jurisdiction
problem, because the amount in controversy didn’t meet that for class members.
The court in Zahn agreed that each and every member doesn’t have to individually
meet the amount in controversy. The issue of complete diversity of citizenship
wasn’t presented in Zahn. The trial court in Abbot stated that Zahn was
overturned by §1367. In applying §1367, the court invoked supplementary
jurisdiction as under §1367a. Also, §1367b doesn’t exclude class action members
in Rule 23. The Court of Appeals affirmed this. The defense wanted the court to
look at the legislative history of §1367. The court, however, applied a rule of
statutory construction, saying that they won’t even get to legislative intent, unless
there is clear or ambiguous language in the statute. They felt, that they could get
clear language in the statute. This way of looking at statutory construction is
recent. In fact, judges made liberal use of legislative history if they didn’t like the
language of the statute.
IX. Discovery -- Method by which parties to litigation can obtain information (either
from each other or others). Goal of discovery: litigation shouldn’t turn on some game,
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on who has better access to litigation, but on to who has the merit of the case. Second
goal is to eliminate hopeless issues from the case.
 scope of discovery is very broad: any matter not privileged which is relevant to
subject-matter involved which can lead to evidence.
 The two tools used to be an order to produce and a protective order (why the material
didn’t have to be disclosed). This led to battling between parties.
 Important part of discovery rule is 26a(1) – people have to turn over material
voluntarily that is related to any pleadings alleged with particularity.
A. Required Disclosures – Rule 26a – At three different times, parties are
required to disclose information:
1. initial disclosure
2. experts (Rule 26a(2)) – information about our experts
3. pre-trial required disclosure (Rule 26a(3)) – very detailed evidence
about our trial evidence; no surprise in federal cases.
B. Discovery Tools
1. deposition (Rule 30, 31) – you need to subpoena a non-party, or
otherwise that party doesn’t have to show up.
2. interrogatories (can only used against the parties – answered under
oath). These can be written within 30 days.
3. request for production (need for subpoena)
4. request for admission (Rule 36) – sent only to other parties
5. physical or mental exam (Rule 35) – you need a court order for this
one; you have to show that the person’s health is in controversy and
show good cause. You can force a party to go through with this, or
someone in that person’s control. Rule 26g – allows counsel to certify
certain things.
Required Disclosures/Discoverable Items:
1) Way to identify persons having material.
2) Copies/descriptions/documents/things
3) damages computations
4) insurance agreements
5) identity, materials from testifying
6) identity trial witnesses
7) identity evidence/documents for trial
A conference has to take place between the parties (though it doesn’t have teeth).
Depositions are limited to 10 to each party now and interrogatories to 25 items or
questions. There is a duty to update. If something new happens with respect to
what is disclosed. The court has much more discretion to limit discovery.
Rule 30 deals with oral depositions. The depositions are then recorded. Only 10
depositions can be taken. Non-parties can’t be sanctioned if they don’t appear,
unless you subpoena them. You can get a non-party to bring in documents
without depositions. You can refuse to answer deposition questions, but generally
you answer with an objection.
Rule 31 – written depositions used when it’s hard to get the witnesses (usually
used for foreign deponents). Written interrogatories can only be directed at the
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
1)
2)
3)
4)
1)
2)
parties, not at third parties. The answers may involve looking things up. For a
non-party, you need a subpoena.
Rule 35 – physical and mental examination is subject to much more scrutiny. It
has to be really an issue for the case. Requests for admission under Rule 36 – you
can try to get more detail.
Advantage of interrogatories vs. depositions
Depositions allow you to observe the witness’ demeanor. It preserves element of
spontaneity. Finally, it’s flexible. Interrogatories, on the other hand, are much
less? Expensive. They allow more depth. They can only be directed at parties.
Rule 45 – Subpoena: It protects ordinary people from being sucked into the
vortex of a complicated case. Much of the rule is aimed at limiting ordering
people to appear in trial and to provide certain information.
a) Basic authority to appear – subpoena has to be issued from the court that is
hearing the case (under deposition hearing). For a deposition, the court that is
hearing the case isn’t necessarily the one that trial takes place at (check). Rule
45a isn’t generally an obstacle to getting subpoena.
b) Service – a strong parallel with Rule 4. It cannot be served by a party (Rule 4c
– parallel).
Where served:
any place within district where subpoena is issued; or
within 100 miles of place of deposition; or
any place within state if state law permits it;
when a statute of U.S provides.
Rule 45c(3)a+b – third chance to get out from under the subpoena: additional
grounds that relieve you of obligation to appear.
A motion to quash a subpoena. Grounds for this are not just listed in Rule
45c(3)a+b, i.e. service may have been improper. If you are asking person you are
seeking to depose questions that discovery rules don’t allow, you can claim
privilege.
Rule 45c(3)b(ii) (confusing) – The problem this rule was aimed at preventing is to
subpoena people to tap their brains for information. It’s all general information
that you’re not employing an expert to tell you, but you are subpoening for your
benefit. Also, the information the person has was discovered without having
anything to do with facts of the case. You can imagine cases where someone
came to consult with an expert, but there was no lawsuit in horizon. Then, later
when there is a lawsuit, this person is unretained expert.
Protected Material: 2 Types
formal evidentiary privileges – those recognized under rules of evidence, Rule 50
(same structure as Federal Rule of Civil Procedure 51, referring one to case law
on privilege)
work product rule – a rule that provides partly a qualified privilege and partly an
absolute privilege.
You have to show extraordinary need to get partly qualified privilege product, but
you are never required to reveal the thoughts, mental impression, legal theories,
etc. Under absolute privilege. We need to distinguish between the document and
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the facts. The facts can be obtained from interrogatories and other means without
getting actual documents.
Attorney-Client Privilege
 absolute confidence between client and attorney, but this doesn’t apply the
minute that information was disclosed to third parties.
Perry v. W.S. Darley & Co.
Ds wanted names of individuals known to Ps. How would these experts be
classified? The observation and study that expert makes doesn’t have to come
before request of the parties. In this case, an expert who wasn’t previously a
26b(4) sheltered, work-product expert became so after litigation (P coopted them).
We have to be careful how sequence of events works. That’s why, Wax thinks,
that court’s ruling that names couldn’t be revealed is wrong. There’s nothing to
stop one side from trying to employ another side’s expert (that expert probably
wouldn’t agree to it anyway).
C. Substantive Scope – Discovery can be used for anything relevant that is not
privileged (reasonably calculated to lead to admissible evidence, but
privileged material is not allowed).
Rule 26b(2) criteria – Limitations on Discovery
 Discovery is unreasonably duplicative and can be received from other parties;
 Party has had ample opportunity to get materials already disclosed (you don’t
have obligation to do work for other side).
 cost outweighs benefits.
Protective Orders – Rule 26c
These are not exhaustive to 26c. You can also get protective orders in Rule 26b.
Anything in the rules that restrict discovery you would try to get a 26c order.
 Work product materials (material generated in anticipation of
litigation) are immune from discovery. (Rule 26b(3)?) (the rule
calls it trial preparation material). We do this to avoid a free-rider
problem. (e.g. Hickman case) Work product rule began as a judgemade rule and was later codified in Rule 26b.
 We can get around this work product rule, if we show substantial
need for it and it’s otherwise not available. There is a sub-class of
work products that is immune: legal theories, mental impression,
opinions, and conclusions, etc. (getting into lawyer’s mind).
Privileges
Attorney-client privileges pertain to communications to and from attorneys which
are confidential. This protects communication to attorney and discourse between
attorney and client, but it doesn’t mean that you can protect it fully – if you can
get the same information by different means, you can get it. Spousal privilege –
anything between husband and wife.
Marrese v. American Academy of Orth. Surgeons
2 orthopedic surgeons sued because they were denied membership in the
American Academy of Ortho. Surg. They wanted discovery of their records and
others who had been denied membership. Is this material relevant to what would
proven at trial? You can imagine that these papers might have information that
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would help the P’s case (this is if we set aside other requirements such as
privileged information). This isn’t a case about privilege – although there is a
first amendment interest that Judge Posner does recognize. The judge said there
were three other things judge could have done instead of ordering discovery.
1) In camera inspection – judge decides whether material is useful to P. He looks
at it to make a threshold decision;
2) Redaction – the names of the parties could be blanked out (this would get
academy to have applicants speak freely).
3) Sequence of discovery – everything else had to be discovered first and this
would be discovered last (not as convincing).
The lesson from this is the sort of devices that can be used to tailor and modify the
scope of discovery. 2nd lesson: court has broad powers in this function to balance
rights of parties.
Seattle Times Co. v. Rhinehart
First amendment does not stand as a bar to restricting discovery. This case
involved a newspaper that wanted to use first amendment to use discovery
material for a story. Court said it had inherent power to limit discovery for
purposes for which it was intended.
Trammell v. Trammell – abolished aspect of privilege spouse had from stopping
other spouse from testifying. If the spouse is willing, s/he can testify. Privileges
narrowly construed by courts. Courts don’t extend them, because privileges
impede process of finding the answer.
Hickman
Hickman still contains question related to work-product that Rule 26b tried to
clarify. Attorney made memoranda of conversations with witnesses. P wanted
these memoranda. D refused to disclose. The court concluded that these memos
didn’t fall within the attorney-client privilege, because attorney had talked to
witnesses, not parties to the action. The material came from outside
communication between attorney and client. There were two interests that needed
to be protected against:
 exploiting opponent’s efforts/work, which would create perverse incentives
and free rider problem.
 gaining access to opponent’s litigation strategy, which would discourage
candor (check).
These interests had to be balanced against the court’s interest to have parties be
able to get unimpeded access to all the information needed to prove their cases.
Had to strike a balance. The court came up with a qualified work-product rule:
can’t have access to material that were especially created or gained by opposing
party, unless there really wasn’t any other way of obtaining that information.
Material Related to Interviews:
1) You don’t need them – could have gotten them by themselves (by
interrogatories)
2) Qualified privilege – interviews contain attorney’s mental impressions, show
line of thinking. Litigation strategies are protected.
Codification of work-product rule: Rule 26b(3) and 26b(4)
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26b(4) – work-product by experts – special application
26b(3) – general rule doesn’t only apply to work of attorney. Was it prepared in
anticipation of litigation/trial? If yes, then work-product rule is triggered. But,
there is some uncertainty as to what “in anticipation of litigation means.”
There is a continuum:
Hickman_________________Upjohn_______________Expert (with special knowledge)
Clear that litigation
Litigation way far away
is on horizon
Can be anything prepared for litigation by person other than attorney.
Need to make a very special showing to get access.
Shall protect mental impressions – suggests that this is an absolute protection.
Upjohn
Half of the case is about the work-product rule and the other half is about the
attorney-client privilege. There was an internal investigation of possibility of
bribes. Queried the “foot soldiers” (no managerial authority); investigation by top
brass and attorney. IRS got wind of possibility of bribes and initiated its own
investigation. It requested production of all files of internal investigation.
Administrative action led to administ. Hearing. Upjohn invoked work-product
rule and attorney-client privilege. Attorney-client privilege addressed by court:
1) extends to corporations
2) extends not only to senior management, but attorney communications are a
two-way street and can be applied to foot soldiers, especially to the
information they may supply to legal counsel.
The court said that IRS could address questions to employees themselves, i.e.
work for the information itself. That is not covered by the attorney-client
privilege. Work-product rule applies not just to litigation in court, but also to an
administ. Proceeding. Court never really addressed the question of “was this
prepared in anticipation of litigation?” Court was seriously worried about the
litigation. It had to stretch work-product protection. There doesn’t have to be a
case filed in court to invoke the work-product rule. When you have work-product
prepared without an attorney, you probably won’t get the absolute part of the
privilege.
Treatment of Experts
Rule 26a (2), 26b4 (a+b+c) [check]
2 main categories of experts:
1) testifying – experts testify at trial or reports presented to court at the trial;
virtually plenary discovery. They can be deposed (Rule 26b4(a))
2) non-testifying – Rule 26b4(b) deals with a particular group within the group
covered within the work-product rule – retained by opponent in anticipation of
trial.
They are treated differently from non-testifying experts. You may nonetheless
want to discover non-testifying experts’ reports, material, etc. Rule 26b4(b) deals
with particular category of experts. In order to fall under the work-product rule, it
has to be material from expert retained by other party. Retained = employed or
secured services of the expert for the purposes of litigation Discovery from such
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experts is only to be had under limited circumstances (really need it and can’t get
it in any other way). They can be interviewed under oath or have interrogatories
addressed to them. Reports can be gotten but not especially (expressly stated.
Question of whether you have to depose them in order to get the reports
(subpoena)).
Rule 26b(4)C -- rules for work-product experts
Testifying – you pay the costs of your deposing them, but don’t have to pay costs
opponent paid to get them. Non-testifying, work-product expert – could pay
reasonable portion of opponent’s expenses of getting expert. Other categories of
expert = anyone with expertise (special training); consulted experts – not retained
in anticipation of litigation, but consulted for a special problem or someone with
routine job to oversee the functioning of office. It’s an open question as to what
discovery rule applies to them. There are two views:
1) They don’t fall under the work-product rule and not under Rule 26a, so they
are normal people you’d be getting discovery from. General discovery rules
apply.
2) Minority view: because experts, they’re covered by Rule 26, and since 26
doesn’t mention them, you can’t get discovery at all. Wax doesn’t agree with
this view.
The fee structure is also in question. The general view is that they have to receive
some compensation. What about experts that are not retained by either party?One
category is expert participants or expert observers. You can treat them like any
other witness (quote in Perry case that rules committee recognizes that there is
such a person). The second category is experts with general knowledge of matters
pertinent to the litigation (e.g. a water pollution expert). Rule 45c(3)B tries to
give these types of people some kind of protection against being called into court
to devote their time to the litigation. They can quash the subpoena. They have no
special obligation to turn over their information. You can always employ them –
that’s your choice (if you subpoena, you don’t have to pay them as much).
X. Pre-trial Adjudication – voluntary and involuntary dismissal – default judgment
(Rule 55). Default is different from default judgment. You can’t just collect on default.
A. Summary Judgment – Rule 56
Difference between Rule 12b(6) and SJ: Rule 12b(6) is used for determining
whether case should get into litigation stream at all. This determination is solely
made on the basis of complaint. We ask ourselves if everything P says is true,
would P get judgment? If the answer is no, then case would get dismissed. SJ is
figuring out whether the case should go to trial. Is this case trial worthy? We
have trials to resolve disputes of fact. If there is no material issue of fact, there is
no need for trial. The court has already looked at the admissible evidence. If
there is no dispute of material issue of fact, SJ can be obtained. The judge then
makes its ruling as a matter of law. 2 issues: no material issue of fact and
judgment as a matter of law. (e.g. Matshushita case and Anderson, Celotex; these
cases were message from S. Court to district judges to grant SJ once in a while.)
If inferences can be drawn up from the facts and the district judge thinks one
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inference is more plausible, they can still grant it. Yet, judges still don’t give SJ
easily. It’s especially tough for P to be granted SJ.
Facts in opposition to summary judgment motion:
1) contest
2) don’t contest
3) concede
4) supplement
§61 provides: Summary judgment>?genuine issue of
fact>yes>?material>yes>look at facts for non-moving party>no summary
judgment
Summary judgment>?genuine issue of fact>yes>?material>no>moving party
entitled to judgment?
Summary judgment>?genuine issue of fact>no>movant entitled to judgment.
One of the things we look at with respect to summary judgment is to see whether
the burden of production has been made. Then burden of persuasion is looked at
(more probable than not). [Burden of persuasion refers to burden you have to
carry at trial before the jury; burden of production is a pre-trial burden.]
When it comes to summary judgment, there are a lot of permutations. What a
party has to do with respect to summary judgment is to see whether that party has
burden of persuasion. If party opposing the motion doesn’t have burden of
persuasion, then that party doesn’t have to provide affidavits, etc.
Rule 56e says that if you are opposing summary judgment, you have to put in your
own evidence to create your own material issue of fact. This rule only applies if
the opposing party is creating the claim of a material issue of fact to avoid
summary judgment (that’s different from saying other side simply doesn’t have
enough facts – there are holes in it), such as in Celotex. Rule 56e just tells us we
can’t base summary judgment on just a bare denial of fact.
Celotex Corp. v. Catrett (S. Court, 1986)
P was an asbestos victim (her husband died of exposure to it). D moved for sj.
D took a look at the pleadings and after discovery decided it could ask for sj.
No affidavits were attached to the record by either party. Once records are
attached to show no cause, judge would have to grant sj, but just because there are
no affidavits attached, it doesn’t mean sj can’t be granted (whole point of
Celotex). Catrett attached affidavits to try and show that sj shouldn’t be granted.
In her appeal, she said that D didn’t provide any affidavits or documents; he
simply said that what he did was ok. *The party making the motion wasn’t the
party who had to bear the burden of persuasion. What would be such a case?
A case in which there was a defense of contributory negligence, for example, in
which D would have to bear the burden of persuasion. What was the hole in P’s
complaint? Her affidavits were inadmissible hearsay. There would be nothing for
a jury to decide. Sj is like a mini trial.
Summary judgment (sj) – when we are encountered with it, we have to ask:
1) Who is the moving party?
2) Identify the issues.
3) Who is the party that has the burden of persuasion?
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4) In opposing sj, is opposing party trying to do one of the following?
a) create an issue of fact? (that has to be resolved by trier of fact)
b) accept facts (not merely contest them), and accept that other side’s
facts are sufficient, but argue the law (what legal standard for those
acts are – what’s legal significance of the facts).
c) the party failed to meet its burden of production.
Alderman v. Baltimore & Ohio R. Co.
State law provides the source of the law because it’s torts. It’s probably a
diversity suit. Probably, the reason that W. Virginia law is being applied is that
the accident took place there. The railroad probably filed a motion to dismiss
based on the waiver on Alderman’s ticket. There was a meeting of counsel and
judge, where Alderman amended her complaint to “willful or wanton conduct.”
This was a way to get around her waiver. D moved for sj – attaching an affidavit,
a series of statements filed by the railroad on matters that they knew about the
derailment. By filing for sj, the railroad is saying that given the facts, undisputed
or uncontested, she can’t possibly win. There is no point in having a trial. Even if
she proves everything she says, she still can’t win. Once this motion is made, P
has her last chance to defeat the allegation. The first thing that the court has to
decide, according to Rule 56 (SJ), is that there is no genuine issue as to any
material fact, and that the moving party is entitled to a judgment as a matter of
law. Given P’s facts, the court previews to see, giving her the total benefit of
doubt on being able to prove all her facts, if she can win. The court decided that
her case didn’t establish willfulness. For willfulness, it would be necessary to
establish that the defendant knew of the particular defect in the rail…bottom of
p.38. The issue is that of material facts – material to the questions. Therefore,
even if the newspaper article is admitted, it wouldn’t make much difference (even
if it proved a contestation of fact). When you encounter a genuine issue of fact,
you have to decide whether it is material. You take the facts and assume that if
the plaintiff can prove those facts, sj cant’ be given. Once there’s a motion for sj,
you have to “show your hand.” SJ is always a judgment on the merits. When D
makes a motion for sj, some of the allegations that P makes may be ignored by D
because s/he believes that their case can be won on a matter of law. This doesn’t
mean that these facts can’t later be contested. Timing – when D and P can make
their motions. The judge can actually in his discretion decide whether based on
presentation of the facts, there should be summary judgment. [demurrer – the
term has been banished from Rules of Federal Procedure] If matters outside the
pleading are presented, Rule 12b says that the motion shall be treated as one of
summary judgment and disposed of as provided in Rule 56 (also see Rule 12c). If
sj motion is denied, there’s usually a trial, except for cross-summary judgments.
The non-moving party, however, can contest the facts or ignore them and make a
legal argument. The party can concede to some of the facts. Finally, the party can
supplement the facts. That’s what happened in the Alderman case. Then the
court has to decide which category the case belongs to. Is there collision on the
facts; if not, can the non-moving party win? If yes, sj is denied. The reverse is
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true. If contest on the facts, then we ask if it’s material. If material, then we ask if
the non-moving party can win the case.
Rule 56e (Form of affidavits; further testimony; defense required) is an important
section of Rule 56 (last year, there was an exam question on it). The form for sj
has to be put into some competent form, such as an affidavit. Why would
someone make a Rule 12b6 (failure to state a claim upon which relief can be
granted) motion, knowing that under Rule 12, it would be transferred to Rule 56?
Why not just do it straight through Rule 56? This is because the same party may
not be filing the 12b(6) motion as the one who would want to file a motion under
Rule 56 (check). If under Rule 12b, no claim exists, the other party will ask for sj.
Cross-Motion for Summary Judgment
In the Alderman case, motion for summary judgment was made by one party.
There are cases, however, where both parties are resting on the same facts (purely
legal question – no open issue of facts). If one side’s motion for sj isn’t granted,
the other side can by default have a cross-motion for summary judgment –
although technically, the judge isn’t supposed to enter judgment for cross-motion
for summary judgment. Your first line of defense against a summary judgment
motion is to create an issue of fact.
Anderson v. Liberty Lobby, Inc.
Burden of production is key to burden of persuasion you have to carry (the
standard of proof). Whoever has burden of persuasion has to prove the case.
Three standards for burden of persuasion:
1) preponderance of evidence – more likely than not (standard for majority of
civil litigation)
2) clear and convincing evidence – significantly more likely than not
3) beyond a reasonable doubt (in criminal cases)
Standards 1 and 2 are for civil cases, and 3 is for criminal cases. One form of
action that uses clear and convincing evidence standard is defamation, especially
malice cases. This standard was established in a famous Supreme Court case,
New York Times. Result of this case was that to reconcile the first amendment
right of free uninhibited press with the common law standards for libel, a higher
standard had to be set to win a libel suit. The court in Anderson said that the
standard at trial has to be the same as the pretrial standard. Therefore, for
summary judgment to prevail in a libel suit, the side asking for relief has to make
a burden of production that is clear and convincing. This rule makes perfect
sense, according to Wax. You need to determine whether the party with burden of
production can win or not. This is a function of whether that party can prove its
case and that depends on standard for defamation (clear and convincing).
Summary judgment serves as a kind of preview as to what a party can or can’t do.
Spectrum of what jury will believe ranges from everything to nothing (usually,
that is somewhere in between). In sj, the moving party is being given the best
case scenario (in the light most favorable – of course the fact that you can win
doesn’t mean you will win).
B. Voluntary Dismissal (Rule 41)
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Voluntary dismissal is usually sought by person bringing the action. Rule 41a – P
can abandon its suit any time before answer is served or motion for sj, or by
permission of all parties. The first time the dismissal is without prejudice. The
second time it isn’t. Permission is at discretion of judge.
McCants case illustrates the liberal nature of this rule.
The judge permitted voluntary dismissal because basically you can get it as long
as you aren’t acting in bad faith. Apparently, statute of limitations is a good
reason.
Dismissal for Failure to Prosecute (Rule 41b): Either P is taking too long to
prosecute or D has to show it will be prejudiced. In Messenger, the court said the
first point is important. Wabash showed that if attorney messes up, the client will
bear the costs.
C. JNOV
 directed verdict (before submitting to jury)
 dismissing jury’s verdict
 granting a new trial
In order to make a motion to throw out a jury’s verdict, a directed motion has to
be made first as a signal to the judge. P can move at the close of all evidence. D
can move at the close of P’s evidence [check]. The judge may deny jnov until the
jury has reached a verdict, then overturn the jury’s verdict (so, if the case is
appealed, and appellate court reaches the same decision as the jury, the jury’s
verdict can be reinstated without a new trial), or jury may return a verdict similar
to what the judge would have. How much evidence is necessary to grant a
summary judgment? States and federal courts have their own standards. Standard
used to be if “scintilla of evidence” existed that the things you claimed were as
you claimed them, then burden of production would be met. The modern trend is
that a little more evidence is needed. Directed verdict/JNOV is a little different.
When judges look at these motions, they can’t but help look at both sides’ cases
(there has already been presentation of evidence), even though strictly speaking,
the party might be able to meet burden of production. Technically, judges aren’t
supposed to weigh the evidence, but it’s hard not to. (Chamberlain case is a
perfect example.] In actually adjudicating directed verdict cases, there are a lot of
interpretations (strict application?) [check – missed what she said]
Reasons for new trial motion being granted:
1) procedural error
2) verdict is against the great weight of the evidence
Judge’s granting of a new motion isn’t against 7th amendment (going against
jury’s verdict), but asking another jury to try the case.
Denman v. Spain (S. Court of Missis. 1961)
Car accident occurred, where no one saw the Ford. Two people saw the
Plymouth, and that it was speeding. Two witnesses for plaintiff saw different
things. One of the witnesses’ testimony was excluded. The other one saw the car
stop. Both said the car went fast, but it didn’t swerve out of its lane. Plymouth
driver was charged with negligence. Judgment was for the plaintiff and the court
of appeals granted an NOV. The only evidence was that the driver was speeding
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in inclement weather conditions. You can infer that it’s more likely that the driver
caused the accident. Denman intuitively seems wrong; speeding although
circumstantial evidence makes his fault slightly more. However, we need to know
something about the other car too. Jury would have to made an inference that
speeding caused accident. As a matter of law, this isn’t necessarily so. Probative
evidence on both sides was evenly matched, and there was barely any evidence.
On causation, for example, there was a blank. One could say then any jury that
found for P was acting in a reasonable way. There are ways you could fault this
decision, i.e. speeding increases accident choices. However, this case can be
distinguished from Lavender in that in that case there was a whole lot of evidence
compared to in Denman.
Penn Railroad v. Chamberlain (1933)
2 different versions of events: A set of cars, ridden by P had been hit by another
set of cars from behind, P fell and died. The other version (D’s) – supported by 3
witnesses – was that there was no collision. They were in a position to see the
cars. Bainbridge testified (only witness for P) that he didn’t exactly see the crash,
but heard something and saw the commotion. S. Court ruled that it was correct
for trial court to have granted a directed verdict. The reason was that P only had
circumstantial evidence to back her claim. That would only result in an inference.
The court is making implicit judgment that direct evidence is necessary. Suppose
only Bainbridge had testified and there were no 3 witnesses for D. Would a
directed verdict have been appropriate? No. The court says that you are supposed
to take all the evidence when granting directed verdict and look at it in the light
most favorable for opposing party. Here, the moving party’s evidence is on a
collision with the P. Evidence is lopsided – P’s evidence is inferior with respect
to D’s, but technically, if you wanted to apply directed verdict correctly, you
would have to take Bainbridge’s evidence and apply it in light most favorable to
P.
Hartwig v. Kanner (U.S. Court of Appeals, 7th Circuit, 1990)
Hartwig sued Kanner. Kanner’s defense was he had been fraudulently induced
into contract. But he didn’t offer any evidence to back this up. Court granted
directed verdict for Hartwig. Kanner argued this was an error, because the
evidence had to be taken in light most favorable to him. That would mean that
jury might disbelieve everything Hartwig said. Court said that burden of
persuasion fell on Kanner, and it was up to him to put enough evidence for jury to
believe him. Kanner failed to put in evidence on 2 key elements: reliance and
harm. Absence of evidence on these issues. Same considerations on burden of
persuasion that apply in the sj phase apply at the directed verdict phase. First,
therefore, we must ask ourselves who has the burden of persuasion.
X. Trial – 7th amendment applies to several cases in federal court and only in civil cases.
It is a constitutional right to jury trial. It is waivable, however. Rule 38b says you have to
demand a trial by jury in writing, otherwise it’s waived? (or at trial’s discretion). 7th
amendment preserves a right to jury trial (1791 – when 7th amendment was ratified – we
have to determine whether common law in the UK would have given us a right to trial by
jury then). It was easier then because there were suits in equity (Chancery to do justice –
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remedies of equity were such things as injunctions; specific performance, recission, etc.)
and suits in law (what comes from common law courts in England. Compensation is
usually the legal remedy). One system allowed trial by jury and one didn’t.
A. Judge and Jury (Trial Procedure)
Most of the rules applicable to the trial come under evidence. Why is there such
an obsession in the law for controlling the jury? The jury represents the irrational
side of the law. Certain rules in the law exist to curb the jury’s errors. The judge
makes legal determinations, and the jury makes fact decisions. Rules exist on
instructions to the jury (Rule ?), safety-valve checks on jury (and judge) (Rule
59); motions of relief from judgment (Rule 50); and motions as a matter of law
(Rule 60). Constitutional checks on the judge are in Amendment VII (no fact
tried by a jury, shall be otherwise reexamined in any court…than according to the
rules of the common law). However, since it’s often difficult to separate issues of
fact and law, juries sometimes make mixed decisions. The allocation of
judgments between trial judges and appellate judges isn’t limited by the
Constitution, so judges could retry a case if they wanted to. See Rule 52 (Findings
by the Court; Judgment on Partial Findings) – parallel to Amend. VII in some
ways. A certain level of trust is put in the trial judge’s ability to have correctly
heard the facts, so that they aren’t disputed by the appeal judge. In U.S., the two
have been merged.
Three rules:
1. Determine jury rights issue by issue to see whether it’s law or equity.
2. If an issue underlies both law and equity claims, we get a jury on that.
3. We try the jury issue first.
B. Right to Jury Trial – selection of jury
 Each side has a statutory right of unlimited challenges for cause to strike
jurors and three preemptory (historically, you didn’t have to state a reason)
challenges to strike jurors. (S. Court 1991: Edminson case said that
preemptory challenges had to be racially neutral. J.E.B. v. Alabama held the
same thing based on gender.)
C. Post-trial Motion
1. Motion for judgment as a matter of law – for centuries it was called
motion for directed verdict. Judge decides the case and dismiss the
jury. (Reasonable people couldn’t disagree on the result is the reason
for granting it. Similar to sj, but instead of coming before trial, it
comes after).
2. Renewed Motion for Judgment as a Matter of Law (JNOV). It’s
the same as #1. It just comes up after jury returned a verdict. If judge
feels that jury reached a verdict that no reasonable jury could reach, he
will grant it. [However, a tricky timing issue must be satisfied. First
#1 has to be made after the close of verdict. Then you raise it again
after verdict. You waive your right if you didn’t make it at the close of
evidence.]
3. Motion for a New Trial – If a new trial motion is granted, new jury
tries the case. One reason may be that judge made an error during
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1)
2)
3)
4)
trial; there could’ve been misconduct by one of the jurors, etc.
Sometimes, a new trial will be ordered because the result is against
clear weight of evidence. There’s a huge difference between #3, than
#2. It’s less radical because it results in starting over, whereas in #2,
the judgment is taken away from one person. The judge can grant a
partial new trial. The court can also make a conditional new trial:
additur and remittur. Judges says a new trial will be granted unless the
party agrees to remittur (if he feels damages are too high). Same thing
for additur. Federal courts don’t allow additurs.
Alexander v. Kramer Bros
It is in a federal court, so it’s probably a diversity case. Facts in the case are in
dispute, because the only two witnesses are the truck drivers. D charged
contributory negligence. To prove it, the claim of negligence would be balanced
out (in this case). The first trial was ruled in favor of P. D appealed based on the
charge that it should have been the plaintiff who had to prove freedom from
contributory negligence. The preponderance of evidence has to be presented by
the party that has the burden of proof (and that means 51% or more). If the party
who has the burden of proof doesn’t have the preponderance of evidence, he loses.
Under Federal Rule 8c, it is D’s job to plead contributory negligence, so how can
it be that P has to prove it? There is a technical difference between burden of
persuasion and burden of production (pleading?). Once the issue is in the case,
then it is not inconsistent that P has to persuade the court against that issue (here
contributory negligence). Some states place burden of persuasion on P, because P
would have more facts pertaining to his behavior. D’s counsel didn’t give
grounds for his objection, he just said that he takes exception. See Rule 51
(Instructions to Jury: Objection) about when the defendant can assign error
(before jury retires).
New Trial – objection required
procedural error
juror misconduct
verdict against weight of evidence
excessive or inadequate verdict
or ?? (plain error) – no objection
In Alexander v. Kramer, the excuse of plain error doctrine didn’t apply. The
judge let the ruling hold. The general rule is that there has to be a moral or
justice-related question for contemperenous object requirement? It’s much more
efficient to not let the trial court to go on with the error.
The plain error doctrine applies in two instances (as a common law):
1) a person’s fundamental rights are violated (i.e. person was coerced into a
testimony/confession – exceptional case)
2) error goes into the integrity of the court itself (in a serious way – also
exceptional); and some courts use:
3) obvious error that the judge recognizes
Review on Appeal
a) error “in the record”
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b) contemporary objection
 common law
 by rule
c) party argues on appeal
d) not harmless or “plain error” (safety valve)
In Alexander, the objection wasn’t taken when the counsel said, “I take
exception,” because it wasn’t made right before the jury retired (at least that’s the
way the court interpreted the rule).
Texas Employers’ Ins. Ass’n. v. Price
He sued the accident board’s result of getting partial disability damages in an
attempt to get full permanent disability damages. The appeal was based on two
allegations:
1) not enough evidence for permanent disability
2) jury misconduct
The court ruled no on point one, saying there was enough evidence and that they
couldn’t go back and reexamine the jury’s findings on fact. Rule 59 says that a
motion to alter or amend the judgment must be made in ten days. The trial judge
must have had a hearing to see whether jury misconduct had occurred. The court
said the second allegation by appellant was a basis for a new trial. What was
wrong with what the juror did? The law that the jury was supposed to look into
was whether the defendant could do his job. Instead, the juror was instructing the
jury on a different standard for disability – the perception of someone’s disability,
which could cause employers not to hire someone (even if they could do the job).
Rule 59 a – grounds for a new trial.
(1) has a broad category of common law reasons.
Juror Misconduct – no one will be held to assert their shameful conduct used to
exist which meant that no one could testify against their behavior.
The “Iowa Rule” -- allowed external conduct, but nothing about the deliberation
process. The “Texas Rule” – more wide. The federal rule is closer to the Iowa
Rule. The federal rule – no impeachment of juror’s verdict based on that juror’s
mind and emotions. In a case where a juror would get drunk before deliberations,
it was decided that it was an intrinsic influence and the verdict couldn’t be
impeached.
Lavender v. Kurn
The case ended in the U.S. S. Court. Federal law governed employers’ liability
(Federal Employers’ Liability). Therefore, S. Court thought it could hear it. The
Supreme Court made a decision that this was a federal law issue.
28 U.S.C. §1257 – certain state court judgments can be heard by the S. Court (but
they have to be judgments of the highest court of the state). J.N.O.V. (judgment
notwithstanding the verdict). The upshot of the scenario of testimony was that it
was possible, but highly unlikely that he was hit by a mailhook (just as there was a
possible, but highly unlikely chance that he was murdered). The jury decided for
the plaintiff. The Missouri Supreme Court said that the jury’s verdict was
incorrect because they based it on speculation and conjecture. The Supreme Court
ruled that the Missouri Supreme Court usurped its power when it overturned the
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jury’s verdict. In Lavender v. Kurn that the court was groping to overturn the
jury’s verdict. The standard for a directed verdict is “no reasonable jury would
find that verdict.” The use of a “reasonable jury” leaves a lot of wiggle room.
The other ground for error in Lavender is that some evidence was admitted which
was hearsay. The court ruled that this error would not be left to them to correct –
it should be at the discretion of the trial judge. Even if the evidence had not been
admitted, there would have been enough support in the record for the jury to reach
its verdict. If the court had decided that the evidentiary issue (if taken away)
would not allow a minimum level of testimony for the jury to reach its verdict,
this would have led to a procedural problem. The case would have had to be
remanded. If the trial was replayed without that evidence, the outcome of the
jury’s decision would have probably been different. The case is remanded to the
state court, because it is a state law issue as to what kind of evidence can be
admitted. This wasn’t a harmless error.
Rule 50 – Judgment as a matter of law (new term)
D makes a motion for judgment as a matter of law after P’s case has been heard.
D can also wait until all evidence has been heard and make the motion before the
jury retires. You can also make a renewed motion after the jury’s decision – as
long as the motion had also been made before. The courts are supposed to
exercise a great deal of restraint in granting these motions (they don’t always do
that). Why is the judge allowed to do this, doesn’t this go against the seventh
amendment? Operationally, this is what a judge does (very similar to what a
judge decides when granting summary judgment). The judge takes the evidence
in the light best for the party, questioning whether that party will win, even if the
jury were to believe all the party’s allegations would be proven true. If not, there
is no reason to send that case to the jury. That is why it is not a violation of the
seventh amendment. The judge is not weighing evidence and evaluating fact.
Focus on Rule 50 a+b; for c+b, only thing we need to know is that the appeals
court judge should be given maximum flexibility to ---? Most savvy judges wait
and let the jury return its verdict and then rule on a motion for judgment as a
matter of law for two reasons:
1) The jury may rule as a judge would have;
2) A new trial wouldn’t be necessary if the appeal court disagreed with the
judge’s motion.
XII. Appeal – only final judgments can be appealed. [look up interlocutory appeal! And
know when it has been made]
Hicks v. United States
Federal Tort Claims Act is a statute that makes it possible to sue the U.S.
government. Negligence is based on an ordinary standard of care (state law).
Expert testimony was used to determine whether the doctor was negligent. After
each expert’s testimony, the expert is allowed to give his opinion. The outcome
of the case was a finding of no negligence. The plaintiff appealed. De novo
review – if error of law, that’s what a court of appeal does. The court didn’t see
the dispute as a factual issue. If they had seen it as a factual issue, they would
have had to turn to Rule 52a and find the trial judge’s findings as clearly
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erroneous. The government expert contradicted himself in his testimony. The
court picked on part of his testimony and left out the other one, which seems like
weighing facts, rather than an error of law. Vel non – the issue of whether or not.
Negligence vel non is here ruled as a legal issue; however, not every court has
ruled negligence as a legal issue, but when there has been a jury, it has been a
question to be decided by the jury. It matters what label it gets, because it goes to
the standard of review.
Fetter v. Beale
He couldn’t bring the second suit, because both of them arose out of the same
circumstances. One chance is given to P – merger. This is an example of the
merger doctrine – one that would not probably prevail (claims that you could or
could have brought – technically, the skull fell out later). Bar – if you lost the
first time, but you wanted to try the case again, you would be barred from doing
so. (Merger would be the term, if you won the first time.)
XII. Res Judicata and Collateral Estoppel – preclusion doctrine.
A. Res Judicata -- Claim preclusion or res judicata
1) collateral estoppel or issue preclusion
2) stare decisis – force of precedent (it’s easy to get 2 and 3 mixed up)
3) double jeopardy (criminal cases only)
4) law of the case (Facts and law decided and not reversed on appeal and not put
on issue in appeal, the court can’t just ignore it.) (check)
Modern res judicata applies to any claim you could have brought. Four
prerequisites:
1) final judgment in prior actions
2) judgment on the merits
3) claims the same
4) same parties or in privity with each other (right relationship)
Same claim requirement – co-extensive with transaction or occurrence test. All
the claims against same party have to be raised together. Federal Rule 18 allows
you to join any claims you have against that party.
Res Judicata doesn’t go to authority of court – it’s a defense. *If you don’t raise
the defense, it’s waived. In the federal system, same claim requirement is similar
to same transaction (Rule 18 says bring all the claims together or you will lose it).
There has to be a judgment before res judicata can be brought as a defense.
Procedural issues are not on the merits; a full trial with verdict, summary
judgment, JNOV, default judgment are on merits. Dismissal for failure to state a
claim or dismissal for insufficient claim can be res judicata or not. When the
claims are dismissed with prejudice, that is final. Full and fair opportunity to try
case on merits is what enables res judicata effect (that is why default judgment is
part of res judicata). Final judgment means either you took it all the way to S.
Court on appeal or you let time to appeal go by.
Res Judicata:
1) to prevent dribbling out of justice in small sections
2) repose (not drag out someone again to court after case has been settled)
3) fairness
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In res judicata problems, we have to ask whether judgment in case 1 precludes us
from litigating anything in case 2. 2 preclusive possibilites:
1) Res judicata and collateral estoppel (also known as claim preclusion).
2) You only get to sue one claim at a time (one bite at the apple).
There are three steps:
1) Both cases must have been brought by the same claimant against the same D
(in exactly the same configuration).
2) The judgment in case 1 must have been a valid final judgment on the merits
(default judgments give us res judicata). Under Rule 41b, all judgments are
on the merit, unless they are based on jurisdiction, venue or indispensable
party.
3) Case 1 and case 2 must involve the same claim. The majority view is that
claim is the t/o – all rights to relief arising from t/o. Minority view is that
primary rights theory – personal injury and property damages are separate
claims for res judicata.
Merger/Bar: In merger, the claim is won in case #1. In bar, the claim is lost in
case #1.
B. Collateral Estoppel/Issue Preclusion – This is narrower than res judicata. It
precludes relitigation of an issue determined in the first case. Generally, we will
try res judicata first to see if entire 2nd case should be dismissed. If not, then we
go to collateral estoppel, which is an attempt to adjudicate some legal issue that is
part of a claim that has been part of a prior court decision. The collateral estoppel
can still operate, even if one of the parties has changed, but there has to be some
tie in the parties. By whom is collateral estoppel used? Traditional rule was
mutuality rule (use collateral estoppel only if you were party to case 1). This has
eroded – it’s not due process problem. Courts have started allowing non-mutual
collateral estoppel.
a) non-mutual defensive collateral estoppel (D here)
b) non-mutual offensive collateral estoppel (P is using it here)
 Mutual collateral estoppel: parties same as or in privity with parties in the 2nd
action.
 Main difference between issue preclusion and res judicata: issue preclusion
doesn’t necessarily have to have same set of facts. It’s confusing because
sometimes res judicata also involves set of same facts, but the facts have to
spring from the same set of occurrences (as in Rush). Issue preclusion
generally has something new occurring.
 Defensive mutual collateral estoppel (when D brings defense of prior decision
in subsequent case which involves different set of events but same legal issue
– this is what transforms it from a res judicata issue to issue preclusion). A
mixed issue of law and fact is involved though (impure question of law) – but
any relitigation iof that mixture is precluded.
 Against whom is collateral estoppel used? It can only be used against
somebody in case #1 (due process rule)
Requirements
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1) Issue precluded (even subsidiary issue ) has to be same in both actions – Issue
must be litigated . If an issue is conceded in a prior action, it’s not made an
issue of. Amount in the first case might have been small, so it wasn’t worth
litigating; forum might have been inconvenient. These are the types of factors
that courts look at in deciding collateral estoppel. If judge has made a
decision on only one of your two arguments in the first case (as in Vasu) and
granted a decision in your favor only on that ground, then that issue only
would be precluded in the second case. When you submit a case to the jury on
a general verdict, you don’t necessarily know which of the alternative grounds
were found for the verdict, so you never know.
2) It must have been litigated in prior action. Issue must have been definitely
decided -- That issue was essential to the judgment in case 1. Sometimes, trial
courts make judgment on issues they don’t have to do. If that was the case,
there is no collateral estoppel.
3) Issue must have been litigated in prior action.
4) Decision on issue must have been necessary to the judgment.
When a decisionmaker rests a decision on several, but insufficient grounds, they
can’t be used for issue preclusion. This shows uncertainty and isn’t quite the
ruling we want to give preclusive effect to. 2nd reason: the way people behave in
appealing these judgments (those that aren’t as convincing a ground in the holding
won’t be appealed if other grounds are included that are convincing because the
appeal will overturn all grounds for the decision).
Cromwell v. County of Sac (S. Court, 1876)
This case illustrates the concept of a necessarily-decided issue. In case #1, Smith
sued county (Smith and Cromwell essentially the same person – his agent). The
issues were: 1) bonds were fraudulently issued (it’s very unclear in the case
whether they mean the same bonds or same groups of bonds); 2) bona fide
purchaser rule; 3) these coupons that Mr. Smith had were not bona fide. Case #2:
Cromwell/Smith sued county. The court said that there are set of facts that are
unique to the 2nd action. The 2nd action deals with specifically different coupons.
These cases could be decided differently depending on how issues are designated.
Wax has “sliced the pie” into 3 issues. Courts are divided on issue 2, whether
there could be relitigation on this “pure issue of law” (that could be interpreted
differently by another court). First issue, however, would most certainly lead to
issue preclusion (the decision was on your bonds). If issue #1 and 2 were
formulated in such a way that they were almost one issue, then there would be
issue preclusion on just that. Key to this case is that each coupon is unique, even
though each bond isn’t.
Russell v. Place (S. Court 1876)
This case illustrates the necessarily-decided claim. First case was decided in favor
of P. D infringed patent again and P brought a 2nd suit saying that patent had been
decided in his favor (therefore estoppel). The court decided that the patent claims
had to be redecided since it wasn’t clear what the first decision entailed. There
were two patent claims and a variety of permutations were possible from the first
judgment for D (i.e. D not negligent, P contributory neglig; D neglig, P contrib.
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Neglig., D neglig, P not contribut. Neglig.) and also for P (i.e. claim 1 valid (and
infringed); claim 2 invalid; claim 2 valid (and infringed); claim 1 invalid; both
claims valid, one infringed; both claims valid, both infringed).
 Mutual collateral estoppel vs. non-mutual collateral estoppel (one party
changes) *Rule – Collateral estoppel can only be used against (to block a
claim) a party that had been in the first litigation.
e.g. A sues B (president of a company) on contract breach. B asserts defense that
the company is really not incorporated, and the president’s actions do not bound
the company. Suppose the court decides that the company is properly
incorporated and adjudicates the contract. Then two years later, A sues B under a
different contract breach. B again says that the company isn’t incorporated. The
incorporation issue is a subsidiary issue to be determined in the process of the
contract issue. A will file a motion for collateral estoppel in response to that
defense. That’s called an offensive use of collateral estoppel. If C sues B, it
would be an offensive use of non-mutual collateral estoppel, which is allowed by
some courts. An example of defensive non-mutual collateral estoppel: P sues D,
D asserts defense of contributory negligence, and there’s no recovery. P sues C; P
sues C for the same set of events. C says collateral estoppel; you were
contributory negligent. We are foreclosed from relitigating this. This is called
defensive non-mutual collateral estoppel. It’s a well-established doctrine, accepted
by most courts. An example of offensive non-mutual collateral estoppel (which
courts don’t like): P sues D. P wins. P is a stockholder of company D. Other
stockholders of company D sue D too now. D then comes out with defense that
their stocks didn’t violate security laws (or whatever the charges were). D can’t
claim this, because it lost the prior case. Court are cautious of applying the
doctrine because of the fairness doctrine – the defendant loses one case and then is
subject to multiple attacks. Also, if D had won, and P2 had sued him, P2 would
have still been able to sue D. *This is because collateral estoppel can’t apply to a
party that wasn’t part of the original jurisdiction. Suppose P sues D, and D wins.
P2 sues D; P2 doesn’t agree with D winning. Can D use the collateral estoppel
argument? No. P2 has never had its day in court and a chance to be part of the
adjudication. The unfairness of this is that D is a “sitting duck” in either case.
Fairness Factors (Parklane Case?)
1) D had full fair opportunity to litigate in the first case.
2) D could foresee multiple suits.
3) P couldn’t have joined easily in the first case.
4) There are no inconsistent judgments.
Des Moines Navig. & R.Co. v. Iowa Homestead Co.
No federal circuit court in 1887
Case #1: Homestead sued Des Moines; both parties were from NY. D removed
the case to federal court. The case arose as a state cause of action, but went to
federal court as a result of diversity. It was appealed to S. Court. D won in both
courts. Case #2: Homestead sued Des Moines in state court; D claimed res
judicata. The court said that the ruling was void because there was smj. S. Court
decided that absence of smj didn’t nullify the previous judgment. (In Capron, the
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jurisdiction of the court was challenged in the appeal process -- before time-period
for final judgment had lapsed). Alternatively, one can get judgment by letting the
time-frame for appeal to lapse – that becomes final judgment. The situation in
Homestead is an example of collateral attack, when you go to court to try to
attack the validity of a prior judgment. The Supreme Court says that the rules for
collateral attack for cases where there was no subject matter in the first place, but
which have gone up to the top are different from cases as in Capron, where the
challenge was made in the early appeal process.
Res Judicata and limited authority (jurisdiction) are two values in direct collision
here. The rules about whether there was a complete diversity requirement were in
flux at the time of the first Homestead case. In fact, the complete diversity rules
came into effect after the first case. The lack of subject-matter jurisdiction wasn’t
obvious then.
Collateral Attack
Distinction between Res judicata and estoppel and precedential value of cases.
The finality value only comes into play where you have the same parties
adjudicating in the first action as you did in the second. The precedential value
comes into play where the parties in the second case are different, even if the case
might be exactly the same. Full faith and credit has to be given from one court’s
judgment to another. Article IV discusses state to state full faith obligation of
courts. Article IV gives state court to federal judgment full faith and credit
meaning. Federal court -> state judgment (28 U.S.C. §1738)
Precedential force is different from full faith and credit; hierarchy in the courts
makes a difference on whether the court is bound by another court’s decision
(another issue is geography). However, everyone is bound by what the Supreme
Court decides. Final judgment is the judgment attacked collaterally. Other term
for Res Judicata is Claim Preclusion (barred because claim has been decided
already). The rule is that all the issues are precluded that were or could have been
raised in the prior claim (it has to involve the same transaction and occurrence).
Differences between collateral estoppel and res judicata:
 Res Judicata requires the same parties.
 Collateral estoppel requires one party to be the same.
 Res Judicata requires all issues to be the same? (check)
 Collateral estoppel doesn’t require all issues to be the same (check)
Collateral estoppel can be both offensive and defensive.
Stare Decisis – cases that have similar issues should be decided alike (as long as
court has power over previous court’s ruling). The parties, facts, and courts may
be decided differently. It can apply when the parties are completely different, but
they don’t have to be. Difference between issue preclusion and stare decisis is
that specific facts could be different in stare decisis. Legal precedent is used, but
the facts applied are different (check).
Rush v. City of Maple Heights Case
P was injured in a motorcycle accident and sued city for negligence that harmed
her property. She won this claim. Then she sued the city again for negligence for
personal injury. In this case, she only had to prove damages, because negligence
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had already been proven. This is issue preclusion or collateral estoppel. The very
facts pertaining to negligence are the same. Nothing new to be determined in this
action whether city was negligent. Ohio S. Court said she couldn’t split her claim.
The Court had to reject a rule in a previous case in the same jurisdiction. They
were applying stare decisis in feeling some obligation toward that decision. At a
very high level of abstraction, the issue in Vasu (case mentioned in Rush) was the
same, but otherwise the 2 cases were different. The court could have repudiated
the holding in Vasu or alternatively distinguished the two cases. The holding in
Vasu could be construed as of a case where there is an insurer, and in such a
situation you can split a tort claim. Rush is a different situation. It can be decided
on the narrow ground on which Vasu was held; its broad holding was that it is ok
to split a case.
Federated Department Stores, Inc. v. Moitie
Moitie and Brown sued the store on anti-trust charges. 3 others sued the store too.
B & M didn’t appeal; 3 others appealed and the Rule 12b(6) motion was tossed
out. This was because in the meantime another case had been decided where a
similar issue had been decided in favor of parties similar to these. M & B had
missed their time to appeal. They sued in state court. The trial court said this was
an old case repackaged. 9th Circuit, however, said that it wasn’t fair. S. Court
said the whole doctrine of res judicata in itself reflects a judgment of fairness.
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