I.
PERSONAL JURISDICTION
I.
Traditional Bases of Jurisdiction
 Personal Jurisdiction:
- 1) Physical presence and transient jdx
 “Transient rule” D tagged with service of process no matter how
fleeting presence in state
- 2) Voluntary appearance in court
 D appears in court w/o making timely objection to jdx
- 3) Consent to service on an agent: express or implied consent
 Statute that provides non resident motorists operating vehicles was
equivalent to appointing state registrar of motor vehicles as agent for
service of process
- 4) Domicile
 Domicile is the state a person has taken residence w/ intent to remain
permanently or indefinitely
 In Personam/In Rem and Quasi in Rem Jurisdiction:
- In personam: Judgment entered ordering D to pay P a certain amount of money
 “Open box” that P can use to attach property belonging to D until full
amount of judgment is paid
- In rem: judgment awarding P property that was attached as basis of jursidcition
 “Sealed box” cannot be used to reach other property belonging to D
 “Against all the world” binds everyone whether party to suit or not
 Quasi in rem: affects interests people who have been made parties to
suit and have property attached
 Minimum contacts required for jdx
 Corporations and Traditional bases of Jurisdiction
- Domestic corporations
- Foreign corporations:
 “Doing business” test (stretching traditional bases of jdx) whether
extent and continuity of what it has done in state makes it reasonable to
bring it before one of its courts
II.
Long Arm Jurisdiction and Minimum Contacts Test
- Step 1) Long Arm Statute
 Tailored/Specific act: specific language in the state statute
 Due-process type (CA): authorizes courts to assert long-arm jdx to max extent
permitted by the Constitution
 Federal long-arm 4(k)(1)(A): federal court borrows from state in which it sits
 Court is either limited by state’s due process long-arm statute or
tailored long-arm statute
- Step 2) Minimum Contacts
 1. Purposeful availment
 A) Activities in the state
 International Shoe v. Washington: sales employees were
employed in the state of Washington. Held: D had activities in
the state
 Comp w/ Hess: someone was just driving through the state,
held: not sufficient for activities
 B) Contractual relationship with forum
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Contractual relationships alone do not establish jdx
- Hanson v. Denkla: Rejects “center of gravity” where the
center of controversy is. D’s activities were
unilateral/fortuitous b/c the recipient of the trust moved to a
new state (FL) where checks were forwarded to her in that
state
- McGee v. Int’l Life Insurance Co: Key difference is that
the insurance co D, re-solicited the P in the forum state
 Substantial continuous relationship
- Burger King v. Rudzewicz: D received fair notice from
the K documents that he may be subject to FL’s courts.
Continuous contact w/ FL, payments sent there. Held: D
made sufficient contacts w/ FL
 Active v. Passive purchaser
a. Chalek v. Klein: D parties purchased product over the
telephone (threshold for D purchasers to satisfy
purposeful availment is higher than for D sellers).
Active buyers would be someone vociferous, visiting the
site of the seller or getting custom made products. A
passive buyer must demonstrate more contacts to
establish minimum contacts
C) Stream of Commerce (products liability)
 SOC must include distributor, not resale market. Ends at retail
line
a. VW. V. Woodson: No min contacts b/c car was bought in
NY and accident occurred when P drove car to OK.
Contacts could not be based on P’s unilateral action of
driving car to OK
 SOC (Brennan): as long as D was aware of the SOC, purposeful
availment is satisfied
 SOC Plus (O’Connor): Asahi D needs something more than just
awareness
 McIntyre spectrum
a. Majority (Kennedy): Targeting the state, D must have
targeted the state (similar to O’Connor’s SOC plus?)
b. Concurring (Breyer): Single v. Multiple sales factor
multiple sales giving rise to purposeful availment
c. Dissent (Ginsberg): Fair and reasonable standard. D
was targeting the US as a whole market and any state is
a forum where marketing was successful b/c taking
advantage of those laws. Foreseeability as a factor
D) Effects in the forum (torts)
 Requirements:
 1) D committed intentional tort
 2) Forum is focal point of harm suffered: P felt brunt of harm in
forum state
 3) D, knowing harm would be felt there, expressly aimed
tortious conduct at forum
a. Calder v. Jones
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
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b. Revell v. Lidov: Held: defamatory publication was not
connected in any way to forum. P did not even know D
resided in forum
Internet website/Zippo test (sliding scale)
a. “Passive” site: merely allows owner to post information
on website- usually not enough
b. “Active” site: clearly does business over internet w/
customers: enters into Ks and knowing and repeated
transmission of files over internet (Amazon)
c. In between: user can exchange information w host but
jdx determined by examining level of interactivity and
commercial nature of exchange
i. LL Bean ex:
2. Relatedness
 A) General Jurisdiction (Continuous, substantial, systematic and
unrelated): unrelated to underlying controversy but activities of D
give court general jdx
 Good Year v. Brown (“at home” test)
a. *Alternative test for SOC contacts if end sale is not from
retailer, can try establishing general jdx over retailer in
forum based on business activities there
 Helicopterios: Held: no substantial contacts w/ forum based on
sending CEO there, Ks for a lot of money, bank accounts,
purchasing helicopter equipment, sending personnel for training
 Perkins: Held: Forum was corporations principal, if temporary,
place of business. D transferred all of office documents to
forum
 Substantial sales via website: Rose Furniture: Rose’s
solicitation and sales activities combined w/ interactive website
allowing 2.2 mill Texans to make purchase gen jdx in TX
 B) Specific Jurisdiction (related): affiliation btwn forum and
underlying controversy
 1) “But for” test: embraces every event that in hind sight can be
linked in causation link
 2) Proximate cause: foreseeability test (based on merits of case)
 3) Substantial connection/ “Lies in the wake” test:
 Nowak v. Tak How: Held: Advertising and solicitation, and
booking P’s reservations in MA satisfied substantial connection
test b/c made it foreseeable that based on its contacts, people
would come to hotel and swim in its pool
Step 3) Reasonableness
 Gestalt factors:
 1) Burden on D- must be special burden
 2) Forum’s interest in adjudicating the dispute
 3) P’s interest in obtaining convenient and effective relief
 4) Interstate judicial system’s interest in most efficient resolution of
controversies (comparative)
 5) Pertinent policy arguments: interests of other states in furthering
their substantive policies

III.
IV.
Asahi: D and P are no longer CA citizen and Taiwan or Japan’s laws would
control
 Nowak v. Tak How: Not enough that D is a foreign entity, has to show special
burden
“Minimum Contacts” and Traditional Bases of Jurisdiction
- 1) Quasi in rem requires minimum contacts:
 Type 1: P has preexisting interest in property (min contacts satisfied)
 Ex: suit by lender to foreclose on mortgage or suit by seller to
repossess goods that seller owns
 Type 2: P has no preexisting interest in property:
 Type 2(a): Related to claim (min contacts may be satisfied)
 Ex: Personal injury suit based on homeowner’s failure to
maintain sidewalk on property
 Shaffer v. Heitner: Shareholder’s connections and
contacts w/ the state of DE where the co was
incorporated did not provide enough contacts with the
state
a. *After DE enacted statute providing for
relationship between directors/officers of corp
and state of incorp
 Type 2(b): Unrelated to claim (min contacts cannot be
satisfied, unless more contacts/other contacts est)
 Consider all D’s contacts w/ the state not just ones
relating to property
- 2) Physical presence does not require minimum contacts:
 Burnham v. Superior Court: D served while temporarily in the state:
only requirement that you “intentionally” be in the state, doesn’t matter
how long. Traditional notions of fair place and substantial justice not
violated
Exercising Long Arm Under Federal Long-Arm Provisions
- 1) [4(k)(1)(A): federal court borrows state’s statute]
- 2) Federal long-arm Provisions
 4(k)(1)(C): allows federal court to exercise personal jdx when
authorized by federal statute
 Federal interpleader authorizes world-wide service of process;
Securities Exchange Act; Clayton Anti-Trust Act
 4(k)(2): If D is not subject to any state jdx and exercise of jdx is
constitutional (used as last resort if federal court cannot borrow state’s
long arm for federal question case)
 D just needs to have contact w/ US
- 3) Minimum contacts at national level: Constitutionality based on “national
contacts” with US as whole
 Due process under 5th amendment
 D must satisfy purposeful availment and relatedness
 D can still rebut w/ reasonableness requirement
- 4) Service w/in US: requires D to have min contacts w/ US as a whole
 US citizen: min contacts test is irrelevant
 D can motion to have case transferred to diff federal court
 Foreign national min contacts will protect
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V.
VI.
Due process under 5th amendment forum must be fair and
reasonable
- 5) 100-mile bulge rule: (if borrowed state long-arm doesn’t reach or lacks min
contacts for added parties)
 Allows parties w/in 100 mile radius of federal courthouse to be added
to suit
 Rule 14/19- bringing party into suit
 Cannot be used to acquire jdx over original D to suit
Challenging Lack of Jurisdiction Over Defendant
- Burden of Proof: Generally P must show by preponderance of evidence that
court has jdx
 Prima facie case allows P jdx’l discovery unless claim is clearly
frivolous
- 1) Direct Attack: D challenges jdx in first court
 D shows up 1) files answer that includes challenge to jdx or to dismiss
 State rules: proper manner of objection varies
 Ex: some states if you combine objections this is
deemed waiver of defenses
 Federal rules:
 12(b): motion to dismiss
 12(g): D can join motions
 12(h)(1): D waives defenses
a. Omission from motion waives 12(b) defense
 If motion to dismiss denied D has right to challenge in
appellate review
 D doesn’t show up and default judgment entered
 60(b)(4): D can request to vacate judgment on grounds that it
is “void” for lack of jdx any time (this is not appeal)
 Most courts say burden is back on D to show lack of jdx
- 2) Collateral Attack: Default judgment entered against D and P takes judgment
to another court. D can argue jdx in 2nd court
 Denied motion to dismiss OR if waived in first trial No collateral
attack available for D
 Res judicata effect (if jdx was not found in collateral attack): P cannot
relitigate jdx issue in any state seeking to enforce judgment
- Sanctions under Rule 11:
 P runs risk of bringing case to court later determined to lack jdx
 “Protective action” filing in a court where there is clearly jdx
 Monetary sanctions if court finds attorney did not make
reasonable prefiling inquiry into facts regarding jdx
Service of Process and Notice
- Requirement:
 Step 1. Must comply with Rule 4
 Step 2. Comport w/ due process and give adequate notice (14th and 15th
amendment)
- Step 1) Rule 4
 Request for Waiver of Service of Summons 4(d)
 Mailed with copy of complaint (not a summons) and gives a
D 30 days to respond (unless outside the US-60 days)

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Purpose: D avoids fees by waiving (fee for service, reasonable
expenses, attorney’s fees and any motion to collect service
expenses)
 D gets another 30 days after waiver sent to answer complaint
 *Statute of limitations may run after P waits for waiver
to be returned and the 30 days if in a jdx where SOL is
tolled with effective service of process
 Formal Summons and Complaint
 Individuals 4(e)
 To individual himself
 Dwelling or place of abode and left w/ suitable age or
who resides there OR
 Delivered to authorized agent
 Corporation 4(h)
 Summons and complaint to officer, managing agent or
general agent or agent for service of process
 American Institute of Certified Public Accountants v.
Affinity Card: D had default judgment entered and filed
a 60(b)(4) motion to vacate judgment. Held: Granted
under Rule 4 office receptionist was not “integrated”
enough to receive on P’s behalf (she was not employee).
 Ds served in foreign countries
 Method consistent w/ due process and minimize offense
to foreign law
 Substnatial compliance w/ Rule 4 factors:
 1) Procedural posture of the case
 2) Type of service involved
 3) P made reasonable good faith mistake
 4) D evading service
 5) If relevant service provision is ambiguous
 6) D received actual notice
 7) Whether justice would be served by relaxed
construction—allows the court to get to the merits of the
case
 Time limit for Effecting Service 4(m)
 P has 120 days after complaint filed to effect service of
process
 Court can use discretion in extending time if P shows good
cause for failure
Step 2) Due Process Right to Notice
 Step 1: Deprivation or potential deprivation of life, liberty or
property
 What is being deprived must be put into context of how
“reasonable” service of process should be
 Step 2: Deprivation amounted to violation of due process
 Notice reasonably calculated under all circumstances to give
D opportunity to be heard (one desirous of actually informing
absentee)
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Constructive service (substituted service): Notice by publication,
posting notice on property
 Mullane standard: Common trust and beneficiaries notified
per NY statute in newspaper of settlement which binds
everyone in a common trust. Trustees were deprived of right
to answer to negligent impairments of their interest. The trust
knew addresses of beneficiaries. Held: known beneficiaries
should have been mailed. For those unknown it is not
reasonable to expect them to be mailed therefore newspaper
publication satisfies due process for those
 Method reasonably certain to work:
 1) P does not have to guarantee notice was received by
D
 2) P does not have to choose best method (e.g.: certified
mail)
 3) If method not reasonably certain to work, can’t pick
one substantially less likely to work
 4) Balancing test of public and private interest
 5) Mere gesture is not reasonable and constructive
notice not acceptable where mail is effective
 *Exception: Tailoring service of process to D if P is
aware of circumstances (case of mentally incompetent
women, due process satisfied)
 *English v. Spanish? Not violation of due process
 Menonite (application of Mullane): Held: posting at
courthouse and published announcement of tax sale of D’s
property violated due process b/c potential deprivation of
property and address could have been obtained
 Requires due diligence
 Notice by mail was more reasonable alternative
 Posting rarely satisfies due process
 Posting was meant to attract buyers
 Jones v. Flowers: Held returned mail as unclaimed requires P
to take additional reasonable steps to attempt to notify D.
Generally if both restricted mail and regular mail sent and
regular mail not returned but restricted mail returned, then due
process satisfied
Notice and Hearing when Property is Attached
 Situations for attachment
 1) In rem or quasi in rem: attach property at outset of suit
before judgment
 2) Repossession: P as pre-existing interest in good (usually
installment Ks)
 3) Security for judgment: D may not have money so attach
property to ensure judgment
 2 options:
 1) State requires preseizure hearing (due process satisfied)
 2) No preseizure hearing and employ safeguard
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II.
1) Pre-existing interest: Allege specific facts showing
right to property
a. ex: documentary evidence of a K
 2) Have to be reviewed by a judge (not clerk)
 3) D must be given opportunity for prompt post seizure
hearing
Doehr (When factors can be applied, narrowing): CT statute
allowed pre-judgment attachment in a law suit for assault and
battery that doesn’t require notice or bond and issued by
attorney under oath. Held: probably cause to sustain validity
is unconstitutional
Mathews Balancing test: 1 & 2 v. 3
 Factor 1: Impact on property owner (D-based)
a. Attachment is intrusion of right, effects title to
property, impairs ability to sell, taints credit,
reduces chances of obtaining loan/mortgage
b. *Lis Penden: note on property to potential
purchasers that suit is pending- not as strong as
attachment
 Factor 2: Risk of erroneous deprivation and how it can
be ameliorated by safeguards (D-based)
a. Ex: Tort cases usually high risk of erroneous
deprivation
 Factor 3: Exigent circumstances (P-based)
a. Even if exigent, bond must be posted
b. Ex: Something that is easily portable, devalues
with time, previous experience of P w/ D’s track
record
SUBJECT MATTER JUISDICTION
I.
Overview
 Definition: court’s authority to hear particular class of cases
 Types of courts:
- General jdx: hears all kinds of civil cases (e.g.: CA Superior Courts)
- Limited jdx: only exercise jdx granted (e.g.: US DC)
 Cannot waive SMJ
 Challenge SMJ motion to dismiss Rule 12(b)(1)
 Burden of proof on party bringing claim
II.
Subject Matter Jdx in Federal Courts
 Article III: Constitutional and Statutory Categories; this covers the full range of
cases federal court can hear
- a) Arising under Constitution, laws and treatises of US
- b) Between citizens of different states
III.
Federal Question Jdx
 A) Article III “Arising under” federal laws: potential federal ingredient test- if
there is any federal ingredient anywhere
- Osborn: Corporation chartered under act of Congress filed suit to enjoin state
auditor from collecting allegedly unconstitutional state tax on bank and had
federal ingredient in its original cause


B) Statutory “Arising under”
- USC 1331: District court shall have jurisdiction over all civil actions arising
under Constitution, laws, or treaties of US if and only if:
- a) Creation test: Cause of action is created by federal law
 i) Express federal statute that provides P a cause of action
 *Shoshone exception: Shoshone cause of action arose under
federal law b/c a federal program allowed individuals to stake
mining claims but under this law, local law was to be applied
so court said Congress did not create this right of action
 ii) Implied right of action: statute created by federal law implied a class
of people (judicially interpreted)
 Factors to determine implied right
 1) P is one of class for whose especial benefit statute was
enacted
 2) Indication of legislative intent, explicit or implicit to
create or deny remedy
 3) If implying remedy would be consistent w/ underlying
purposes of particular legislative scheme
 4) If claim in question is “one traditionally relegated to state
law”
 Ex: Bivens right of action: cause of action against any federal
officer that has violated person’s 14th amendment right
- b) Essential federal ingredient test: Cause of action includes an essential
federal ingredient
 4 step test:
 Step 1) Must be a federal ingredient embedded as an element in the
state-created P’s claim (ie: P’s claim must rest on question of federal
law)
 Step 2) Federal ingredient must be disputed by both parties
 Step 3) Element must be substantial: importance of having federal
forum available for this type of claim
 Ex: unconstitutionality or interpretation of federal statute
 Step 4) “Welcome mat”- Would the federal recognition of this claim
upset Congressional separation of federal/state jurisdiction? (implied
Congressional veto)
 Grable & Sons Metal Products v. Darue: Grable failed to pay taxes
and IRS seized his property. Under federal law, IRS was required to
give notice of seizure and 5 years later when IRS sold property to
Darue, Grable claimed that exact manner in which he was served was
improper under federal statute and brought action to quiet Darue’s title.
Held: Satsifies essential federal ingredient test b/c underlying question
is substantial and disputed by parties—whether Grable was served
properly under federal statute. Also rare that a state quiet title action
would involve federal law.
Well Pleaded Complaint Rule: Judicially created doctrine. Rule ensures only P’s
claim for relief determines whether there is jdx under statutory arising under.
- Louisville &Nashville Railroad v. Mottley: Mottleys were injured as
passengers by Louisville trains and as a release for their claims against the
Railroad they were promised free transportation for life. 30 years later
IV.
Congress passed statute that prohibited railroad from giving free passess.
Mottleys sued Railroad for breach of K and sought order to compel Railroad to
comply with agreement in federal court. Also alleged that Act of Congress did
not apply to circumstances and if it did it deprived them of property. Held: P’s
claim does not pass statutory arising under requirement b/c anticipated defense
of a Congressional Act is not part of P’s original cause
 Artful Pleading Rule: Prevents P from defeating federal jdx by disguising what is
clearly a federal claim as a state claim
- Usually arises when D tries to remove state case to federal court claiming P
has really alleged a federal claim.
 Declaratory Judgment Act: (form of non-coersive relief)
- Declaratory relief: allows court to declare rights and obligations of parties w/o
imposing coersive relief
- Declaratory Judgment Act: gives federal courts power of declaratory relief
over cases they would otherwise have jdx over
- Well-pleaded complaint in declaratory judgments:
 Ex: X claims that Y Corp has violated federal Clear Air Act and Act
gives X private right of action for injunctive relief. Y can file claim for
declaratory relief. X=P (b/c X would seek injunction); Y=D. X’s wellpleaded complaint would state claim arising under federal law
 X relies only on state environmental statute and Y seeks declaratory
relief asking court to rely on federally issued license which preempts
state law. X is still P so Y cannot preempt its declaratory relief by
raising a federal issue that is really a defense.
Diversity Jdx
 I. Article III: Minimum diversity
- 1) Cases between citizens of different states
- 2) Cases between citizens of a state and citizen of foreign country
 II. 28 USC 1332: *Diversity is established at date of filing
- Requirements:
 1) Complete diversity (No P can be from the same state as any D)
 2) Amount in controversy >$75,000
- 1) Citizens of different states
- 2) Citizens of state and citizen or subject of foreign country (alienage jdx)
- 3) Citizens of different states in which citizens of subjects of foreign state are
additional parties
 Complete Diversity/Citizenship:
- Determining Citizenship (natural persons): one is deemed a citizen where one
is domiciled and can only have one domicile
 Party invoking jdx has burden of proof of showing domicile
 Presumption of comtinuing domicile when one moves. To defeat
presumption person must show “domicile of choice”
 1) demonstrate residence in new state AND
 2) intention to remain in state indefinitely
 Rodriguez v. Senor Frogs de La Isla (Bank One Factors)
 1) Show that party exercises civil and political rights
 2) Pays taxes
 3) Real and Personal property
 4) Drivers license

 5) Bank accounts
 6) Jobs or owns businesses
 7) Attends church/club membership
- Determining Corporate Citizenship 28 USC 1332(d)(2):
 1) place of incorporation AND
 2) principal place of business
 Hertz v. Friend: “Nerve center” is where the principal place
of business is where high level officers, direct control and
coordinate corporate activities
 Dual corporate citizenship: if corporation is incorporated in place diff
than principal place of business dual citizenship
 Unincorporated associations/organizations: deemed citizens in every
state member is a citizen of
 Partnership (anything that isn’t an “inc” or “corp”): deemed citizen
where every member is
- Alienage Jdx:
 Complete diversity required: There cannot be aliens on both sides of
dispute
 UNLESS there are citizens of different States on both sides as
well
 Eze v. Yellow Cab Co. of Alexandria: P, from Nigeria, was in
an accident and sued Ds Yellow Cab and driver Akakpo, from
Ghana. At time P had not alleged citizenship of Akakpo but
stated its residence was unknow. Complete diversity not met
b/c alienage on both sides.
 Old rule: Permanent resident of state= citizen of alien AND citizen of
state
 Diversity could be established by permanent resident of state
X suing a citizen of state X
 New rule: Permanent resident is not citizen of the state, considered
alien only, but if the alien resides in the same state, no jdx
Amount in Controversy
- Presumption of P’s “good faith” allegations control
 1) P subjectively thought amount exceeds $75,000 AND
 2) P was objectively reasonable in believing the amount exceeds
$75,000
 If either factor is not met, case is dismissed
- Legal certainty rule: even if P can show through good faith that he exceeds the
minimum amount if D can show that Ps recovery is limited by statute or
contractual provision to amount under $75,000 then will not be able to bring
action in federal court. (legal certainty rule trumps good faith rule)
 Some courts ignore “legal certainty” argument if its based on a
waiveable affirmative defense.
 Some courts see “legal certainty” standard as part of P’s good faith
claim. If facts or law make it legally certain P cannot recover then
generally means P knew or should’ve known claim was jdx’lly
deficient
- Subsequent event vs. Subsequent revelation:

V.
Subsequent event: will not change court’s SMJ as long as minimum
was met at time suit was filed
 Ex: abandonment or dismissal of some of P’s claims
 Subsequent revelation: will effect court’s jdx if its shown that P lacked
good faith
- Coventry Sewage v. Dworkin Realty: P and D entered a K where D, Dworkin,
would pay fee for sewer-main usage owned and operated by P, Coventry
Sewage. Service fee was based in part on number of water consumed on
property. Parties got in a dispute about increased service fees and D refused to
pay P’s bills and accumulated total of $75,953 in unpaid bills. P filed action
and alleged it believed amount exceeded jdx minimum. D filed answer and
soon discovered that invoices underlying P’s fees had been miscalculated by
water meters and actual sum of bills was $18,667. Held: Ps in 1) good faith
alleged amount exceeding jdx minimum and court looks at circumstances at
time complaint is filed (discovery of billing error was after filing) and 2) face
of complaint does not reveal to legal certainty that controversy did not meet
required amount, and later discovery does not preclude federal court of jdx. 3)
also error was not mere revelation of fault estimation on P’s part b/c error laid
w/in the control of a 3rd party.
- Amount in controversy in declaratory judgment
 1) P’s viewpoint rule: ascertain amount from P’s perspective
 2) Majority rule: “either viewpoint rule”- as long as either party
satisfies
 3) Minority rule: viewpoint of party invoking federal jdx
- Aggregation of Claims:
 Traditional approach:
 Single P v. Single D OR
 Multiple Ps can add up all claims and don’t have to be
factually related v. single D
 Cannot add up amount for claims against separate Ds
 Each P must individually satisfy the amount in controversy requirement
 Exceptions:
 Claims involving single title or right: can aggregate P’s
amounts (100% mine and 100% yours) as if Ps are acting as
one person
 Joint and several liability: when Ds are jointly and severally
liable even though there is contribution
Supplemental Jdx (1367)
 [Judge-made nomenclature]
- Pendant jdx: referred to claims by P over which no indep basis of jdx but
could exercise jdx
- Ancillary jdx: Courts jdx over a claims by person other than P (ex: D’s
counterclaim)

Pendant claims & 1331:
United Mine Workers v. Gibbs (1331/add’l claims) P was hired as a mine
superintendent to open a new mine which members of Local 5881 picketed and
tried preventing the opening of the mine, believing they should’ve received the
work. Gibbs lost job and began losing other contracts in the area. He sued the
int’l union of Local 5881. P brought 3 claims in federal court: 1 federal

secondary boycott claim (under Labor Mgmt Relations Act) and 2 state claims
for interference of K w employment and haulage. Held: the federal claim and
K violations come from the same nucleus of operative facts and state and
federal claims are reflected alternative remedies, in fact jury only awarded one
of the claims. Exercised proper discretion b/c DC already decided the case and
throwing it out would be an abusive discretion.
- 1. Do claims come from common nucleus of operative facts?
- 2. Power v. Discretion:
 Court has ‘power’ to hear all state and federal claims if it satisfies
1367, but does not have to exercise its ‘discretion’
 Ex of abusive discretion: judge being too busy to take a state
claim
 Judge can exercise discretion throughout the litigation of the
case
 Discretion factors:
 1. Judicial economy, convenience, fairness to litigants
 2. Jury confusion
 3. If state claim is really dominate factor
 4. If state claim is so closely tied to federal policy and
preempt the state law issue
Pendant party claims & 1332: (Kroger evasion)
- Owen Eqiupment v. Kroger (1332/add’l parties): Kroger (IW) was
electrocuted by a electric power line that he walked too closely too and his
widow filed a wrongful death action against Omaha Public Power District
(NE)(OPPD). Kroger (literal P) sues OPPD (literal D), who through Rule 14
joins Owen (IW) (3rd party) on indemnity b/c crane was operated by Owen
(Owen is a 3rd party P to OPPD and 3rd party D to Kroger). OPPD motion for
summary judgment and in the meantime Kroger amends complaint and names
Owen as an add’l D. Summary judgment for OPPD granted and now between
Kroger (IW) v. Owen (IW). Held: Allowing Kroger’s “pendent party” claim
(re: Owen) violates complete diversity of 1332(a)(1).
- Step 1: Common nucleus of operative facts? (if yes, additional step 2 b/c Art
III Congressional limits is different for 1332)
- Step 2: 1332 satisfied?
 Substep i: Complete diversity must be satisfied: complete diversity
between literal P and literal D
 Substep ii: Kroger Evasion Rule Test: Federal court may not exercise
ancillary jdx under circumstances that violate the complete-diversity
principle or that offer the opportunity to evade that principle
 Are there additional acts that sufficiently ameliorate potential
for evasion?
 Examples of sufficient additional steps to defeat Kroger
evasion:
 1) Kroger filed claim against Owen and Owen per Rule
14 filed claim against her. Kroger responds to the claim
with a compulsory counterclaim no evasion even
though Kroger’s claim is not completely diverse against
Owen b/c of the intermediate claim filed by Owen

-
VI.
against Kroger (P sues 3rd party, but 3rd party files claim
against P, P files compulsory counterclaim)
2) OPPD filed counterclaim against Kroger and Kroger
impleaded Owen under Rule 14 indemnity no evasion
b/c counterclaim filed by OPPD sufficiently ameliorates
potential evasion. (D files counterclaim against P, now
P is a D, and P files impleader against non-diverse 3rd
party)
Pendant Party Jdx
 Kroger court held that pendant party jdx is inconsistent with
congressional intent of 1332 (complete diversity)
 Aldinger and Finley: continued to reject pendant party jdx; Finley
stating that it was never going to allow pendant party jdx over non
diverse parties unless explicitly allowed by Congress
 1367 was response to Finley:
 1367(a) expressly allows addition of parties, as was true
of ancillary jdx and would’ve occurred w pendent party
jdx
 1367(b) attempt to codify Kroger Evasion Rule and
disallow supplemental (formerly pendant-party jdx) in
diversity cases
 1367: (codified Gibbs and Kroger)
- (a) Common nucleus of operative facts w/ the anchor claim (adoption of
Gibbs)
- (b) Diversity cases only: applies to Ps and its joinders (adoption of Kroger)
 Complete diversity requirement
 Amount in controversy requirement
 Kroger evasion rule
- (c) Discretion
 Claim raises a novel or complex issue of state law
 Claim substantially predominates over claims
 DC has dismissed all claims over which it has origin jdx
 Other compelling reasons for declining jdx
- (d) Period of limitation: gives DC more leeway with exercising discretion by
not allowing statue of limitations to toll
Removal Jurisdiction (1441)
 Terms:
o “Removal” taking a civil case from state court  federal court
o “Remand” sending case from federal court  state court
 Usually if Federal court doesn’t have jdx it won’t remand but will
dismiss
o In diversity:
 P can limit his damages to under the minimum amount to prevent
removal to federal court, but cannot post-removal reduce amount in
attempt to defeat federal jdx
 P can also name an additional D who is a citizen of forum state
UNLESS
 P “fraudulently joins” D of same forum will be ignored
for purposes of removal


“Fraudulent party:” P has no possibility of recovery against
the in-state D
1441: Removal generally
o (a) case can be removed from state to federal court if it could be filed in
federal court in the first place (under 1331, 1332, 1367)
 Whole case must be removed, including related claims
 Can only remove to the federal court that embraces the same
geographic region as the state court
 Only a D can invoke this (P had its chance to file in federal court in
the first place)
 ALL Ds have to join in petition for removal
 * D can show up and motion to remove case and this does
NOT waive objection to personal jdx
 McCurtain v. Cowett: Previous removal procedure by one of the D
was incorrect b/c not all Ds joined on removal and even with all Ds
joining, SMJ would not be satisfied b/c amount in controversy isn’t
met.
o (b) (applies to diversity claims only): Limit on diversity removals
 If any D or parties joined and served as Ds is a citizen of the forum
state, even if diversity is satisfied, case cannot be removed
o (c) Fall back provision: if independent claim satisfies 1331 and claim is
joined, then entire case can be removed and unrelated state claims are
severed and remanded
 can only use this if 1441(a) does not work
 Cannot be used with 1332 (diversity)
 Requirements:
 1) There must be claim under 1331
 2) Any claim not within original or supplemental
jurisdiction of the DC is remanded (“separate and
independent standard is gone)
o Only Ds in federal claim are required to join in
removal
o *Under 1367(c), supplemental claims attached to a
federal claim can be sent back under court’s
discretion (apply discretion factors)
 3) All otherwise non removable claims are severed and go
back to state court—no discretion
 [Old 1441(c) requirement: other non-federal claim had to be
“separate and independent” which meant claims stemming from
factually distinct events in order to qualify under 1441(c)
 Discretion to remand was based on if state law
predominated]
 Eastus v. Blue Bell Creamery (court applies wrong
standard): Eastus asked for time off b/c his wife was going
to give birth and then was fired which he claims violated
FMLA. Interviewed for other jobs that said he alleges D
gave bad reference for. (couldn’t originally be filed in
federal court b/c of the tortious interference) Eastuses filed
civil action against D, Blue Bell in Texas state court for 1)
FMLA violation (federal), 2) tortious interference w K’l
VII.
relations and 3) IIED from being fired when his wife was
pregnant. D removed to federal court on grounds of federal
question, P moved for remand. Held: Standard for remand is
that court must remand all separate and independent claims.
DC held tortious interference could be remanded but not
IIED b/c IIED and FMLA come from the same right and
same facts (Gibbs changed this b/c of loosened common
nucleus of operative facts)
o *Court applied the removal standard here when it’s a
remand; under the old 1441(c) the remand standard
was if state law predominated
o Under new 1441(c) the tortious interference claim
could attach to the removal; when state claims
severed and remanded tortious interference would
have to be remanded b/c not original or supp jdx and
IIED under discretion of court b/c it was a
supplemental claim
 1446: Procedure for removal
o (a) requires filing removal notice in federal court, and then notification to
state court and certification that you have notified and then file in federal
court
o (b) removal has to be filed within 30 days of service of summons, after this
point, removal cannot be filed
o (c) permits otherwise late removal under diversity if information satisfying
amount in controversy is revealed later in discovery
 1447 (c): Motion to remand: must be within 30 days; unless the issue is a SMJ
issue (this can be raised at any time)
o If motion to remand granted (either based on SMJ or process defect) this
cannot be appealed
Challenging SMJ
 Direct Attack:
- SMJ can be raised at any time
- Originally filed in federal court dismiss
- Originall filed in state, then removed remand
- If both personal jdx and SMJ challenged determine SMJ first
- State attack on SMJ:
 CA: Any time during the litigation including appeal
 Does not result in dismissal but transfer to correct tribunal
 Collateral attack:
- Old rule: if court made judgment that didn’t have SMJ over case, judgment
treated as void
- Modern rule: 2 tests- Finality is rule and collateral attack is exception
 1) Final judgment may be more likely subject to collateral attack if:
 Jdx manifestly clear of abuse of authority
 Jdx issue is only based on question of law
 2) If these questions are answered in the negative, may facilitate
collateral attack
 Have original parties relied on defective judgment?
 Was question of jurisdiction actually litgated and decided?

III.
Was party challenging SMJ able to raise the objection in the
prior proceeding?
VENUE, TRANSFER AND FORUM NON CONVENIENS
- Venue: whether selected court provides convenient location for dispute
- Venue considered D’s personal right that can be waived or altered
II.
Venue in State Courts (CA)
 Local action: Ownership or possession of real property
 Transitory action: Everything that isn’t a local action
 Cal Civ Pro 395(a): Transitory action
- 1) Any county where D resides
- 2) Action for injury to person or personal property or death for wrongful
act/negligence superior court in either county where injury occurs or event
causing injury or where D resides
- 3) Action for K obligation where K was entered into or where obligation is
incurred or where D resides
- 4) If no Ds in that state or residence unknown to P any county that P
designates
 Cal Civ Pro 392(a): Local action
- Any county where real property is located
 Mixed action: venue determined by nature of “main relief” P seeks
III.
Venue in Federal Courts
 Venue Generally:
- Venue is determined at time action commences
 P may dismiss nonresident D from case to cure defect in venue, in
which case venue is assessed in accord w post-dismissal configuration
- Improper venue by raising objection under Rule 12
 Failure to raise in answer or include along w/ other objections
constitutes waiver
 P then has burden of proof to prove proper venue
- Multiple claims:
 Under 1391(b), substantiality requirement must be fulfilled w/ respect
to that district by every claim against every D
 1391
- 1391(a) regards all civil actions brought in District Court unless specific
statute specifics otherwise
 (a)(2) no distinction between local (based on ownership or possession
of real property) and transitory action
- 1391(b) (covers both diversity and federal question cases)
 (1) civil action may be brought in a judicial district in which any D
resides
 Residence: Domicile of Ds determine the district the D resides
in
 Single district state: wherever a D resides in that state state
is proper venue
 All Ds from same state and diff districts  pick any district as
long as one of the Ds resides in that district
 Multiple Ds from different states this section does not apply


(2) civil action brought in judicial district where substantial events or
omissions giving rise to claim or a substantial part of property is
situation
 First of Michigan Corp v. Bramlet: Bramlets, residents of
FL, invested money in retirement fund with First of Michigan
via the advice of Sobol a broker (MI). When they found out
the IRA was losing money they brought arbitration action in
FL and Sobol and First of MI filed action seeking to enjoin
arbitration as ineligible under Arbitration Code statute in
Michigan DC. Bramlets met Sobol in MI and Sobol
conducted its calls w Bramlets and establishing the IRA in
MI. DC dismissed Ps case as being improper venue b/c most
substantial events giving rise to complaint was Bramlet’s
initial filing arbitration in FL. Ps argue that DC’s dismissal
was based on improper interpretation of venue statute. Held:
P’s filing in MI was proper b/c 1391(a) only requires that
“substantial” activities took place in that district and not the
district where the most substantial activities took place.
 Substantial test will likely satisfy minimum contacts for
personal jdx purposes under 1391(b)(3) and (c)(2)
 3) Fall Back provision: if no district proper in US under “residence” or
“substantial part,” venue can be in a district which any D is subject to
personal jdx
 Mainly used if substantial events occurred outside US
 A D that has venue established based on another D’s personal
jdx can challenge that and be dismissed from the case
- 1391(c)(2) and (d): Residence of Corporate and Noncorporate entities
 (c)(2) single district state: (covers incorporated and unincorporated
businesses and partnerships) resident of the state where personal jdx is
established (ie: headquarters or place of incorporation or minimum
contacts)
 (d) multi-district state: (corporate entities): districts are treated as
separate states and based on personal jdx contacts with the districts (can
be more than one)
 For unincorporated entities, entity could be deemed resident
of any district in multidistrict state regardless of contact w
district as personal jdx has been satisfied statewide.
Transfer of Venue in Federal Court
- 1404(a) (filed in right court) transfer motion can be filed by P or D to
wherever action under court’s discretion
 P and D can bring suit to one where court initially did not have
personal jdx or proper venue if both parties agree
 Substantive state law of transferor court is applied and follows the case
(ex: state X  state Y, state X law applied)
 Federal law of circuit in which transferee court sits will be applied
(based on notion that federal laws is uniform throughout nation)
 Discretionary factors:
 (Strong preference for P’s choice of forum)
 Private factors:



1) Ease of access to sources of proof
2) Availability of compulsory process for unwilling
witnesses
 3) Cost of obtaining attendance of willing witnesses
 4) Practical problems that make trial easy, expeditious
and inexpensive
 5) Public interest factors: congestion of court docket, local
community interest, forums familiarity w/ law
 Skyhawke Tech v. DECA: P (MS) is patent assignee that filed claims
against DECA (CA/Korea) for patent infringement on golf GPS
product. Filed in MS court and D motion to transfer venue to CA.
Standard is that movant has to demonstrate that transferee venue is
clearly more convenient (general respect for P’s choice of venue).
Court applies private and public interest factors. In all 4 private interest
area transfer for D is neutral or only slightly weighs in its favor. Held:
D did not show that preferred venue was clearly more convenient.
- 1406(a) (filed in the wrong court) court can either dismiss or transfer to right
court
 Substantive state law of transferor court does not apply if transferred
 Federal law of circuit in which transferee court sits will be applied
(based on notion that federal law is uniform throughout nation)
- Steps for transfer:
 Step 1) Apply 1391 to all claims and all Ds to determine if venue is
correct or not
 Step 2) Apply 1391 to the venue Ds want to have case transferred to to
determine if venue is proper or not
 Step 3) Apply either 1404(a) or 1406(a) apply discretionary factors
 Step 4) Determine which substantive law will be applied
Forum Selection Clauses: Provision under K which parties to K can designate
appropriate forum for suit
- Step 1: Does the clause apply because the lawsuit falls w/in terms of clause?
- Step 2: Is clause enforceable?
 Clauses come w strong presumption of enforceability (by express or
implicit negotiation)
 Breman Standard: Defeat presumption must clearly show enforcement
would be unreasonable and unjust or that clause was invalid for reasons
as fraud or overreaching OR if enforcement would violate strong public
policy as declared by statute or judicial decision
 Jones v. GNC Franchising: Jones (CA) a franchisee sued
GNC (PN) in a CA state court and parties had signed
franchise agreement that had exclusive forum clause stating
that any lawsuit will be brought in federal or state court in PN.
D moved to federal court based on diversity and then moved
under 1406(a) to dismiss or transfer to PN OR under 1404(a).
Held: No transfer under 1406(a) b/c CA Business and
Professional Code expressly invalidates any franchise
agreement with forum selection clause and Breman made this
a public policy exception. No under 1404(a) b/c weighing of
private and public factors GNC failed to meet burden of
IV.
showing that PN more appropriate forum (factors of GNC’s
forum selection clause and CA code statute barring forum
selection clauses were relevant factors)
 Laws on forum selection clause is federal C/L practice, so states adopt
their own doctrines
- Step 3: What type of clause
 Exclusive clause: only forum that suit may be brought (“must be”)
 DC must grant motion to dismiss if clause does not give
federal venue option
 Type 1) enforceable, exclusive and NO otherwise correct
statutory federal venue option & motion to dismiss court
must dismiss
 Type 2) enforceable, exclusive and there IS otherwise correct
statutory federal venue & motion to transfer
 Some courts will retain or dismiss based on 1404(a)
balancing factors;
 Others see “exclusive” clause as defeating any venue
that is legitimately established by statute and dismiss
 Permissive clause: suit may be filed in that forum but does not preclude
filing in other proper venues (“may be”)
 Federal option just based on whether you can file in that
federal forum or not
- Step 4: (If permissive) then there is discretion to transfer if there is a federal
option apply discretionary factors under 1404(a)
Forum non conveniens
 Forum non conveniens: C/L dismissal doctrine that permits court to decline jdx in
order to permit suit to be filed in more convenient forum
- Used by federal court when more convenient forum is foreign country
- Used by state court when more convenient forum is foreign country or sister
state
 States do not follow the requirements below
 CA ex: alternate forum is a forum where a party will be subject to
service of process, so much easier to find forum non conveniens
 Requirements (federal): D’s heavy burden of proof
- 1) there must be an alternate forum
 forum is adequate so long as it provides the P w/ some remedy
- 2) the balance of private and public concerns implicated by choice of forum
weighs heavily in favor of dismissal (Gilbert factors)
 Private interest:
 1) relative ease of access to sources of proof
 2) availability of compulsory process of attendance of
unwilling and willing witnesses
 3) possibility of view of premises (if view appropriate)
 4) all other practical problems that make trial of case easy and
expeditious and inexpensive
 Public interest:
 1) administrative difficulties flowing from court congestion
 2) local interest in having localized controversies decided at
home

IV.
3) interest in having trial in diversity in forum that is home w
law that must govern
 4) avoidance of unnecessary conflicts in foreign law
 5) unfairness of burdening citizens in unrelated forum w jury
duty
- Piper Aircraft v. Reyno: Scottish residents were killed in plane crash in
Scottish highlands that was operated by a Scottish taxi service and owned by a
British company, both of which were in the UK. The wreckage is in England.
The plane and propellers were made by US companies Piper (PN) and Hartzell
(OH) respectively. Reyno administratix of the passengers filed wrongful death
claiming strict liability against Piper and Hartzel in CA Superior Court b/c
Scottish law does not recognize strict liability. Ds removed case to federal
court in PN and then moved to dismiss based on forum non conveniens. D
args that majority of third party Ds and crucial witnesses are in Scotland it
would be fairer to bring all parties in one case and present to jury and Scotland
has more interest in outcome of litigation than PN. Held: 1) granting forum
non conveniens b/c one forums law is more favorable than another is not an
appropriate reason for dismissal b/c courts would have to get into substantive
and comparative law (not the purpose of forum non conveniens). 2) DC did not
abuse discretion in applying Gilbert factors and Scotland has overwhelming
interest in case and better to resolve in one case.
THE ERIE DOCTRINE AND RELATED PROBLEMS
I.
Overview
 Substantive law: defines rules, rights, obligations and enforcement remedies
- Rules that apply to everyday life
 Procedural law: solely to formal methods of litigation in court
- Federal Procedural Laws:
 1) Statutes
 2) Formal rules (Fed Rules of Civ Pro, Fed Rules of Appellate)
 3) Judge-made procedure (ex: forum non conveniens)
 Federal court hearing state law issue (diversity suit and supplemental jdx)- federal
procedural law is followed but applies the law of the state that the court would apply
- (*not: applies laws of the state b/c of choice of law a state could apply another
state’s laws)
- federal ruling on state law issue does not become part of state substantive law
(ie: federal courts cannot make state law)
- State court hearing federal law issue- state applies federal substantive law
 Pre-Erie: (Swift v. Tyson) “Federal General C/L”- federal interpretation of law is
equal to state law; underlying idea that there is one true law
- Local law gets deferred to states (such as prop law) problem, what is general
law and what is local law?
 Erie Railroad v. Tompkins: P was injured by a train operated by D in PN. P files
negligence suit in NYDC; D’s arg was accident happened in PN (in PN C/L P was
trespasser and therefore no normal duty of care, P must show D acted willfully or
wantonly); Ps arg was that PN law doesn’t apply b/c under Swift the general C/L
applies here. NYDC applied federal C/L and not state law of PN b/c this was an
issue of “general law” Held: Unconstitutionality of Swift: constitution operates by
vesting certain powers in the federal gov’t; anything not expressly vested are
II.
reserved to states both impliedly and expressly; No such thing as federal C/L and
federal courts cannot make state laws
 Choice-of-law: Federal court sitting in diversity’s decision to apply state X’s laws or
state Y’s laws (usually arises when events leading to claim occurred in one state and
P filed in another state)
- Federal court applies the same substantive law the forum state court would
apply (won’t always be the forum state)
- Federal court refers to state statutes, constitutions, rules and judicial decisions
in determining content of law (ie: how the highest court in that state would
apply the law)
Three-Track Approach : What if there is a conflict btwn federal procedural law and state
substantive law?
- Ex: Statute of limitations: defines temporal scope of rights/enforcement
remedy (substantive) and when you are allowed to file a claim (procedural);
state and federal have diff laws
 Supremacy clause: Article 6 of Constitution
- Valid federal law (pursuant to the Constitution) trumps state law to the
contrary always
- Federal procedural law rule: If procedural law is “valid” then federal law
trumps state law
 STEP 1 (conflict): Is there a real conflict btwn state and constitutional law?
- 1. Identify potential conflict or possible inconsistency
- 2. Identify issue that conflict is around
- 3. Is the federal statute sufficiently broad to control the issue?
 Always refer to text of statute to determine if it is broad enough
 STEP 2 (validity): If there is a conflict is federal law valid?
- Track 1: Federal Statute (28 USC …)
 i. Must be rationally classifiable as procedural
 ex: 1404(a) allows transfer of a case from one proper venue to
another proper venue ~ operates w/in federal litigation system
and promotes fairness and efficiency
- Track 2: Formal Federal Rule (via Rules Enabling Act) (FRCP, FRAP)
 i. Must be rationally classifiable as procedural AND
 ex: 14 allows joinder of party for indemnity ~ operates for
courts to efficiently adjudicate a matter concerning all related
parties interests and rights.
 ii. May not abridge, modify or enlarge any substantive right
 a) Identify the potentially altered right (most likely asserted
by P)
 b) Ask 3 questions in relation to underlying right:
 1. Has the federal rule changed any element of the
claim?
 2. Has the federal rule altered the remedy to enforce
claim?
 3. Has the federal rule altered statute of limitations?
 Extra steps likely not; Procedural penalty fee likely not;
Shortening of service time likely not
 *RE: Shady Grove pluralist opinion: federal rules should be
uniform throughout US and not dependent on nuances of state
V.
law or particular circumstances of pending case therefore
very unlikely that federal rule will ever “on its face” abridge,
enlarge or modify substantive right
 Dissent: REA clearly permits “as-applied” challenges
 For now: apply both facial and as-applied challenges
- Track 3: Judge-made principle
 i. Must be rationally classifiable as procedural AND
 ii. Does it function substantively in this case?
 Refined Outcome Determinative test: At the forum shopping
stage is there a substantial advantage to the federal forum over
state court such that the P chooses the forum
 Ex A: Federal law permits service of process at party’s usual
place of abode and state law requires personal service No.
No substantive advantage (may be more convenient but does
not alter underlying elements of claim, remedies or timeframe
of when suit can be brought)
 Ex B: P files suit seeking equiatable accounting of trust’s
assets but filed it after state law’s applicable statute of
limitations. Federal court has judge-made doctrine of laches
that allows case to proceed as matter of equity Yes. P
would clearly choose federal forum over state since federal
court will allow claim and state would not
 Ex C: Federal court can reduce potentially excessive jury
verdict only if damages “shock the conscience” (standard is
highly deferential to jury’s verdict) and State X’s court a
judge can reduce size of amount “deviates materially” from
damages awarded in similar cases (less deferential toward
jury) In between. “forum effective”
 Gasperini: court determined state standard must be
applied.
 STEP 3: If federal standard is sufficiently broad to control and valid must apply
federal standard per Supremacy Clause
 Ex: P and D PI/negligence case where P provided 2 eye witnesses that corroborated
her version of the story which would make D liable. Jury verdict returned for D. P
filed motion 50a2 which is a motion for judgment as matter of law. D points to part
in rule which does not allow post judgment motion under this rule and P points to
state law that allows post judgment. Does not modify elements of her claim, or
remedy or alter statute of limitations. Option to file motion before judgment unlikely
would be a factor when forum shopping.
PLEADINGS AND DISCOVERY
I.
Overview
 Types:
- Complaints: initiates the case
- Answer to complaints: response
- Demurrers: not available in federal court; way of saying P has failed to state
facts on which claim may be asserted
- Potential replies
 [C/L Pleading (a.k.a equity pleading or issue pleading)]
- every case could be reduced to single issue and court and issue decides
II.
III.
- 12 categories of forms that you fit your case into
- reform led to code pleading
 Issue pleading reform Code Pleading & Notice Pleading
Code Pleading (fact pleading)
 1 action only: civil action and liberal joinder of parties and claims
 Complaints are facts constituting cause of action; facts supporting each element of
the claim; Ultimate facts
 CA Fact Pleading:
- Doe v. Los Angeles (CA case): Civ Pro code extends statute of limitations for
victims of sexual abuse to sue Ds that “knew or had reason to know or was
otherwise on notice of unlawful sexual conduct by employee or agent.” Doe 1
and 2 came forward filing complaint against BSA and LAPD as employers of
Kalish (abuser). Allegations included 1) D inadequately supervised program at
the station b/c officers engaged in improper activity w scouts 2) general
allegations that BSA was aware of past incidents of sexual molestation among
scout leaders and that prior Ds were aware of sexual misconduct w scouts at
those specific stations 3) BSA was aware of prior sexual abuse and from these
incidents they could infer a comparable number 4) Other police officers aware
of Kalish’s pedophilia tendencies: fraternizing w boys, trips to Thailand,
relationship w pornographer 5) allegations pertaining to Kalish’s molestation
of P while on duty. Held: Ps failed to state sufficient complaint that Ds had
knowledge of Kalish’s sexual conduct w Ps; just that Ds had knowledge of
misconduct of Kalish that created risk of sexual abuse is not enough under the
terms of the statute. Ps allowed to allege things on information and belief but
must still be derived from information that is factual
 Doctrine of less particularity (same as ultimate facts): Senate bill that
attempted to allow victims to have claim against perpetrator’s employer
b/c they concealed from victim the sexual abuse (not b/c evidence was
lost or memories fade after a long time) but b/c evidence of
concealment is in possession of employer Ps not eligible for this b/c
complaint still does not include facts that allege D had this information
about Kalish
 3 types of facts:
 1) Ultimate fact: reports on Kalish’s activity between a
certain time period (court is looking for ultimate facts)
 2) Evidentiary fact: who testifies and what they’ll say
 3) Conclusions of law: Ds knew about Kalish’s sexual abuse
- 3 levels of specificity:
 1) General standard: ultimate facts require a factual narrative and
connection to every element of claim
 Less Particularity Doctrine is the same as ultimate facts
standard
 2) Heightened standard (in narrow range of cases)- ex: fraud and
complex allegations of causation
 3) Conclusions of law: don’t count toward sufficiency of a claim, but
you may still include it
Notice Pleading and Federal Rules of Civ Pro
 Federal Reform: Notice pleading a.k.a. “simplified pleading:” so long as information
was sufficient to appraise the other side of what the case is about
-


Other motions such as summary judgment or discovery conferences can
narrow down factual dispute
Rule 8(a): pleading states claim for relief requires:
- (1) short and plain statement of SMJ
- (2) short and plain statement of claim showing pleader is entitled to relief
- (3) demand for relief sought
 Using forms comply to Rule 8 (appendix)
 Ex: Form 11: negligence form: on this date D did ____, P
demands _____ for damages; Form 7: allege diversity case
form: P is ____ or corporation in _____; D is citizen of _____
- 3 exceptions to rule 8
 1) Rule 9(b): alleging fraud or mistake, party must state w particularity
the circumstances constituting fraud or mistake (“heightened pleading”
standard)
 Malice and knowledge may be alleged generally though
 2) Statutes: federal statutes (mostly in business litigation area) where
Congress has imposed higher pleading standard
 Ex: (Private Securities Litigation Reform Act) complaint
required to specify why statements have been misleading and
if allegation regarding statement is made on information and
belief, the complaint shall state w/ particularity all facts on
which belief is formed.
 3) Judge-made: C/L realm of heightened pleading
 Ex: Lower federal courts were imposing a higher pleading
standard complaints under civil rights action under 1983 and
other complex cases
 Leatherman v. Tarrant County Narcotics: Ps sued local
county when officers forcibly entered home based on
detection of narcotics odors and one P claimed he was
assaulted by officer and other said officers entered in her
absence and killed her 2 dogs. Claim under 1983 that local or
state police conduct violated 4th Amendment rights and
County failed to train officers in manner that complies w/
constitutional limits. D argues that 5th circuit has created
heightened pleading standard for complaints under 1983 and
Ps do not meet this. Held: rejects D’s arg that heightened
pleading standard should be applied b/c Rule 8(a)(2) for short
and plain statement holds and although Rule 9(b) gives
exceptions Congress did not expressly provide for 1983 to be
held to higher pleading standard, so court will not interpret it
so.
Move from interpreting Rule 8 as Notice Pleading Code pleading?
- Ashcroft v. Iqbal: P Iqbal was detained by federal officials after 9/11 and filed,
via Bivens action, complaint alleging that he was subjected to harsh conditions
of confinement b/c of his race, religion or national origin. Sues Ashcroft and
Mueller that each knew of condoned, willfully and maliciously agreed to
subject respondent to harsh conditions of confinement as matter of policy
based on race, religion national origin. Ashcroft as the principal architect of
policy and Mueller as instrumental to its adaptation and promulgation.

Complaint includes claims against other Ds (officers) that kicked him in the
stomach, punched him, subjected him to serial strip and body cavity searches
when he posed no safety risk to himself or others and refused to allow him to
pray. Bivens right of action requires policies adopted for the “purpose” of
discrimination. Held: Iqbal did not plead sufficient facts. After all legal
conclusions are excised, what’s left are facts about a policy detaining Arab
men after 9/11. Court follows what Twombly suggested in anti-trust dispute
that Ps facts of parallel conduct of Ds smaller utility providers was not
sufficient to establish that there was concerted effort. Suggests a higher level
of pleading required and Iqbal affirmatively applies this standard to Rule 8
 *Issue in Kennedy’s opinion: He infers that there is a difference
between general allegation (that is permissible in 9(b)) and conclusory
one which is not but doesn’t explain what the difference is
- IDEES: Identify, Elementize, Excise and Scrutinize
 STEP 1) IDentify the claim
 STEP 2) Identify the Elements of the claim
 STEP 3) Excise legal conclusions
 Legal conclusion v. allegation of fact: D was negligent v. D
ran a red light
 All intent allegations are out b/c they are conclusory
 STEP 4) Scrutinize: identify factual allegations to see if they state a
claim
 Ex: 3 possibilities in a diversity case
 i. “parties are diverse”  conclusory
 ii. P is in MI and D is incorporated in NY w/ principle places
of business in NY sufficient b/c of the form, but could seem
conclusory
 how was principle place of business determined?
 iii. P lived in MI, has driver’s license, works there, registered
to vote, etc, etc (seems to be way more than you need)
D’s Answer/Response
- D has 21 days to respond (can motion under Rule 12 to transfer, motion to
remove…)
- Rule 8(b): gives the answer: short and plain statement of your defenses (Iqbal
has not been applied in this area):
 1) Admit OR (if you do not deny you admit)
 2) Deny each allegation
 General denial: deny SMJ and substantive allegation
 Specific denial: partial denial
 3) Answer must have affirmative defenses (aka avoidance)
 If not raised defense is waived
 Courts have said Iqbal is not applied to affirmative
defenses b/c it would be unfair since D has 21 day to
respond
 Rule 13: permits counter claims if factually related- you must
file
 Negative defense: denying facts, denying essential elements
of the claim
- Amendment after D’s answer filed:

IV.
Court may allow D to amend an answer if P will suffer no prejudice (ie:
if the P would not be “surprised” by an affirmative defense)
 Ex: if D discovers during discovery an affirmative defense
and notifies the other side of its intention to raise defense
 King Vision v. Dimitri: D’s answer failed to admit or deny allegations
so the court held that the complaint filed by Ds are held to be as if D
admitted to them
 Liberal Pleading Principles
- Motion to dismiss: Rule 12(b)(6): Failure to state claim upon which relief can
be granted
 Motion stating that P has neither:
 1) Identified claim or potential claim AND
 2) P’s factual allegations do not align with the potential claim
 Ex: P sues D for breach of K; P’s complaint must have facts
that describe a breach of K
 Motion to dismiss as dispositive affirmative defense: If P’s complaint
itself reveals deficiency then motion to dismiss will be granted
 Ex: P’s complaint was filed after SOL and D files motion
12(b)(6) and bar based on the SOL, motion will be granted
 Northrop v. Hoffman: P tried to refinance her home through Mortgage
Master when they ran credit report it indicated D Hoffman Honda of
Avalon ran a credit report even though D and P had no business of any
kind. P received no explanation why they ran her credit. P’s initial
complaint was under parts of FCRA which imposed obligation upon
“consumer reporting agency.” DC granted D’s motion to dismiss b/c P
did not state claim upon which relief could be granted b/c they were not
a credit agency. P-Appellant included on appeal part of FCRA that
imposed liability on “any person who knowingly and willfully obtains
information on consumer under false pretenses.” Held: Reversed DC
dismissal. Under rule 8 liberal pleading principle, failure to cite statute
or cite correct one in no way affects merits of claim—factual
allegations are what matters. (Apply IDDES and facts state sufficient
complaint)
 *Court here was being generous by allowing her to bring in
statute on appeal. Court of Appeals could have said that she
waived her right by not including it in her first complaint
 Kirksey v. Reynolds Tabacco: P brings personal injury suit in death of
her husband who died from lung cancer who falsely advertised that
cigarettes were not addictive. D motion to dismiss b/c P’s claim of
products liability/false advertising is preempted by federal law or
barred by cases interpreting IL tort law. P replies by saying her
complaint is immune from a motion to dismiss b/c she complied w/
requirements of Rule 8. Held: Grant D’s motion to dismiss. P satisfied
procedural sufficiency (complied w short and plain requirement of
pleading under Rule 8(a)(2)) but this does not mean that the pleading
has substantive sufficiency and will be immune from motion to
dismiss. P failed to respond to motion to dismiss by identifying a legal
basis and just standing on her complaint alone is not enough.
Discovery



Formal discovery rules are controlled by CA or federal rules
Discovery plan:
- Roadmap for your pleading and assists for formal discovery b/c lets you know
which claims you have are solid and which are soft
- Helps you fill in the gaps for figuring out what you need from the other side
- Ex: Assess facts of the case come up with possibility of claims break them
down to elements and identify relevant evidence facts that need to support
assess strength of evidnece
Scope of Formal Discovery:
- Pre 2000 revision of 26(b)(1): standard was subject-matter, but criticisms that
this was too broad and through discovery find evidence of issues not in the
case and expand scope of lawsuit
- Rule 26(b)(1): “Parties may obtain discovery regarding any nonprivileged
matter that is relevant to any party’s claim or defense”
 1) Attorney-managed discovery (discovery not managed by the court):
entitled to discover non privileged matter “relevant to claim or
defense”
 “Relevant” - reasonably calculated to lead to discovery of
admissible evidence
 Seeking information that might lead you to evidence
 Discovery relevance is really broad
 “Claim [or defense]” (Claim is defined as group of facts
relating to series of transactions or occurrences giving rise to
one or more rights of action)
 Apply relevance standard to 2 definitions of claim
a. 1) (broader) defining claim the way federal rules
defines it: factual interrelationship of various
legal rights of action
b. 2) narrowly: specific right of action
 “Soft Law” Effect of this interpretation has given lawyers
new ability to resist discovery by claiming the standard is
narrower forcing the opposing counsel to go to the judge
 2) Judicially supervised-relevant to “subject matter” (court retains
pre-2000 subject matter standard)
 Standard is triggered when party denies discovery under
“claim or defense” standard
 Court can expand scope to “subject matter” category and
permit party to explore through discovery potential
claims and defenses not yet raised
 *Diff btwn subject matter and claim-or-defense
relevancy is still unclear
 Most discovery is not judicially supervised
 “Non-privileged” right to withhold otherwise relevant information
 Can still object on grounds of privilege in trial or discovery
 If you don’t raise it in discovery then you’ve waived it and
info is permissible at trial
 Privilege can be constitutionally drive, statutorily required or
based on federal C/L
 Examples:




a. Attorney-client
b. Doctor-patient
c. Spousal privilege
d. Right against self incrimination
Rule 26(f): Mandatory pretrial conference between attorneys
- Way of making litigation more efficient- rule allows both sides to design
discovery plan to mold their needs
- Must come up w formal discovery plan: how many depositions, how long,
deadlines
- Discovery plan submitted to court
- Must identify:
 All people supportive of your claim (eye witnesses)
 All documents, emails, records (don’t have to turn them over)
 Information on computation of damages
- 26(a)(1): Mandatory disclosure: imposes initial disclosure requirement on all
parties w/o waiting for discovery request
 Disclosure must be made w/in 14 days of Rule 26(f) conference
- Advance Financial Corp v. Utsey: D did not file “written report” of Rule 26(f)
by the deadline. P filed motion for Sanctions b/c D did not produce initial
disclosures per 26(a)(1). D stated that counsel had eye surgery which is why it
could not comply with discovery discovery conference or disclosures. Held:
Court found sanction on D appropriate by default judgment.
Additional Methods to Discover Materials
- Depositions: method of gathering information from a party through oral
examination
 Attorneys, parties and someone to officiate: take deposition and record
oath
 Open ended questions as long as questions satisfy discovery
qualification (reasonably calculated to lead to information for party’s
claim)
 D’s counsel may object but question must still be answered
- Interrogatories (25 allowed)
 Formal written request for information
 Interrogatory can only be to a party
 Interrogatories are answered by attorneys and will give as little
information as possible
 No follow up
 Party can raise some objections
- Requests for production and inspection
 Products liability or business litigation (K’l disputes)
 Asking the other side to hand over any document
 Any property or real property inspected
 Cannot be work product and privileged like with other categories
Sanctions: court’s inherent authority for imposing sanctions for violating court order
and refusing to participate in discovery
- Can be sanctioned for not preserving information even if it was before law suit
if you had reason to believe a lawsuit would arise
E-Discovery:
- Rule 34(a)(1)(A): permits discovery over electronically stored information
-
-
-
Rule 26 (b)(5)(B): provides a method of sequestering privileged information
that is advertently disclosed during discovery pending the judicial resolution of
claim of privilege
Rule 26(b)(2)(b): Entitled to discover information unless party resisting
discovery can show information is not reasonably accessible due to undue
burden of cost
 Usually party receiving discovery request pays for it
Rule 26(b)(2)(c): Proportionality standard (this is the weighing of value v.
burden)
 2 sets of factors
 1) Advisory Committee Standard:
 1) Specificity of discovery request: more specific it is the
more likely granted
 2) Quantity of information available from other more easily
accessed sources? Interrogatories, depositions?
 3) Failure to produce relevant information that seems likely to
have existed but is no longer available on more easily
accessed sources
 4) Likelihood of finding relevant, information from more
easily accessed sources: (merits related)
 5) Predictions as to importance and usefulness of further
information
 6) Importance of issues at stake in litigation
 7) The parties’ resources
 Advisory Committee Notes:
 26(b)(2)(C): Allows court to set conditions on discovery.
Court may request from the responding party focused
discovery such as sampling of sources to learn more about
costs and burdens on the parties
 2) Zubalake Standard: (main difference is Zubalake focuses on which
party should pay)
 1) Extent to which request is specifically tailored to discover
relevant info
 2) Availability of such information from other sources
 3) Total cost of production, compared to amount in
controversy
 4) Total cost of production, compared to resources available
to each party
 5) Relative ability of each party to control costs and its
inentive to do so
 6) Importance of the issues at stake in litigation
 7) Relative benefits to the parties of obtaining the information
 Wood v. Capital One: P claims that Capital One and NCO violated
statute that prohibits debt collectors to use deceptive acts. Claim that a
pre-legal letter sent to P stating no legal action has been taken but what
his options are to pay the amount violated statute. P’s account was sent
to NCO collection agency at which point NCO sent letter about action
it was taking on P’s account. Cap’l One’s defense is that they are not
debt collectors. NCO’s defense, letter was not sent by them. P seeking
discovery request of all emails related to Pre-Legal Notices and PreLegal Program at Cap’l One and NCO. Held: P has not made a strong
case that there is a suggestion or inference based on what’s been
discovered so far that would lead to discovery of relevant information
in emails; even if relevant, huge burden relative to what the Ds would
have to take on going through emails and the amount at stake (minimal
amount in collection)
 *Magistrate perhaps should have looked at information thus
far from interrogatories and information handed over to see if
it could be used to discover if Capital One was a debt
collector
VI.
JOINDER AND CLAIMS OF PARTIES
I.
Joinder of claims by Ps and Ds
 Claim types:
- 1. Originating claim
- 2. Counter-claim: responsive claim from party who is already in an adversarial
relationship with
- 3. Cross-claim: Claim brought by one D against another D or P against another
P (co-party v. co-party)
- 4. Third party claim: claim brought by someone brought into the law suit
(indemnity, impleader)
 Rule 18(a): Joinder of Claims
- Party asserting claim, counter-claim or 3rd party claim may join as independent
or alternative claims, as many claims as it has against an opposing party
(related or unrelated)
 18(a) is a permissive rule, you are not required to bring all claims
 All claims must satisfy SMJ
 Rule 13(a): Counterclaims: any counterclaims allowed
- 13(a): Compulsory: required to file
 13(a)(1)(A): “same transaction” test: Arising out of the transaction or
occurrence that is the subject matter of the opposing party’s claim
 Ie: a logical relationship between the claims
 Not a bright line test
 Leonard v. Mideast System: Leonard was counsel for Mideast in
lawsuit against the US gov’t. When it lost the case Leonard sued
Mideast in DC to recover attorney’s fees and Mideast made no
appearance and default judgment entered against it. After Mideast filed
a legal malpractice claim against Leonard in NY state court. Leonard
responded by seeking declaratory relief in federal court and that
malpractice claim was barred b/c it was a compulsory counterclaim.
Held: Malpractice claim was a compulsory counterclaim b/c Mideast
knew about this claim/defense and logical relation between the claims.
Declaratory judgment for P granted and D barred from ever bringing
malpractice suit
 In default context, 13(a) applies and is interpreted as if D filed
answer and what the answer would have contained (no
counterclaim)

-
Burlington Northern Railroad v. Strong: P employee of D,
Burlington, was awarded $73,000 for personal injury. D moved to off
set the judgment for P from a disability insurance program funded by
D, denied by DC (but suggested that D could recover by suing under
the P’s union K). D brought separate suit for recovery of funds and
summary judgment in D’s favor and P argued that D’s claim was
compulsory so is barred from bringing it. Held: Not compulsory b/c 1)
two suit do not arise out of same transaction (accident/injuryP’s
lawsuit and K’l provisions of union K D’s lawsuit) and 2) D’s claim
did not mature until the conclusion of the first lawsuit when P got his
judgment
13(b): Permissive: may file
 Supplemental Jdx and Counterclaims:
 Compulsory counterclaims: Rule 13(a)(1)(A) “same transaction” will
automatically satisfy “common nucleus of operative fact” standard
established by 1367
 Permissive counterclaims:
 Old approach: Permissive counterclaims were automatically
deemed jdx’lly deficient because same-transaction test and
common nucleus test were synonymous and failure to satisfy
one was failure to satisfy other
 Emerging trend: (3 circuits follow) 1367 is slightly more
generous than 13(a)(1)(A) A claim can be permissive but
still satisfy supplemental jdx
 Hart v. Clayton-Parker: P filed lawsuit against D in federal
court, under federal Fair Debt Collection Practices Act and
AZ state law prohibiting unreasonable debt collection acts,
alleging JC Penny assigned her acct to D when she was
unable to pay balance. D filed counterclaim alleging P
defaulted on payment and owes D amount plus interest and
attorneys fees. P moved to dismiss counterclaim claiming
that court did not have SMJ over counterclaim b/c it was not a
compulsory counterclaim and her unfair collection practices
does not arise from same transaction as D’s claim against her
(K’l issue). D args that there is logical relationship between
complaint and counterclaim and therefore compulsory. Held:
D’s counterclaim was not compulsory b/c precedent cases of
unfair collection practices and underlying debt have been seen
as permissive. Equates compulsory counterclaim with
satisfying requirement for supplemental. Therefore since it is
not a compulsory counterclaim court no supp jdx.
 *This court applied faulty reasoning by using the test for
joinder Rules to establish SMJ. Use the template!
Would result in same conclusion but conceptually more
correct.
 *Apply emerging trend: Fair debt collection case
there is a common nucleus of operative facts: starts with
the debt and credit, so could satisfy SMJ but NOT
compulsory to bring counterclaim b/c doesn’t arise from
same transaction
-
a. However, court could decline to exercise supp
jdx based on policy. Policy that to allow debt
collectors to file counterclaim for amount owed
defeats purpose of fair debt collection acts,
which allow borrowers to bring claims about bad
debt collection b/c they would automatically be
filed w/ a counterclaim.
Parallel Federal Proceedings
 Counterclaim is filed in another court, so same problem filed in more
than 1 court
 First to file Rule: First proceeding will prevail: First court can enjoin or
second court can dismiss or transfer proceeding (second court can
dismiss case based on first court’s judgment)
 Semmes v. Ford:
 1st action NJ: P, Semmes, who formed an alliance of Ford
dealers filed an injunction in NJ state court (later removed to
NJDC) against Ford from contacting customers that dealers
alleged returned cars to the dealer for warranty defect. (Ford
reimburses dealers for maintenance repairs made based on
forms the dealer submits and Ford suspects dealers are
inflating or falsely submitting refund claims. In the meantime
Ford’s auditors discovered about 70% of repairs not
performed.)
 Oct 8, Ford countered NJ action to dismiss P’s claim
and filing answer and counterclaim to recover false
warranty refunds.
 NJ- additional counterclaim by D to recover false
warranty refunds
nd
 2 action NY: Oct 7, P informed D that they intended to file
the same NJ action in a NYDC seeking temporary restraining
order, which had been rejected in NJ. Ford also on Oct 8 also
sent notice to terminate Semmes dealership.
 P then sought and obtained leave to amend complaint
from NYDC to include termination of Semmes
dealership.
 NY- P amended complaint to include D’s termination of
dealership
 Ford motion to stay the NY proceedings and willing to allow
Semmes to amend complaint and reply in NJ action w/ respect
to termination of dealership
 Held: First to file rule NJ controls. Semmes had 21 days to
file an answer to Ford’s counterclaim in NJ (by Oct 28, and
by this date Semmes already knew about their termination and
could’ve answered); Ford’s counterclaim triggered 13(a) b/c it
claimed Semmes engaged in fraud and as a result terminated
their dealership and Semmes compulsory counterclaim
would’ve been “no we did not engage in fraud” unlawful
termination. Semmes failure to respond impliedly included
omission of its unlawful termination claim.

Rule 13(g): Permissive Cross claims
- Requirements:
 1) Filed against co-party AND
 2) Same transaction
- Pleading may state as cross claim by any party against a co-party (non
adversarial relationship)
- Once cross claim asserted by party, the other party is an opposing party w/in
meaning of 13(a)
 If opposing party has a substantive counterclaim (not just indemnity or
contribution, must be brought if it is compulsory or party will be
precluded from bringing it up later
 Rainbow Mgmt v. Atlantis Submarines: 1st suit: Rainbow’s vessel
collided w Boston Whaler where passengers were injured and
passenger brought suit against Rainbow and Atlantis negligent. Atlantis
filed crossclaim against Rainbow for contribution and indemnity AND
breach of K, and third party complaint against Haydu. Rainbow then
filed cross claim against Atlantis for contribution and indemnity and
denied wrongdoing. 2nd suit: Rainbow brings suit against Atlantis and
Haydu for recover of damages to its vessel. Atlantis motion for
summary judgment b/c P’s claims are barred b/c they were compulsory
counterclaims (became counterclaim when Atlantis filed cross claim
against Rainbow) not pleaded in previous litigation regarding collision.
Held: once cross claim is filed, party becomes opposing party w/in
meaning of 13(a), but only in instances where substantive claims are
asserted (not merely claim for contribution and indemnity). Atlantis
asserted breach of K claim so Rainbow’s counterclaim was a
compulsory counterclaim.
- Ps and Ds filing cross claims:
 Majority rule (Harrison court): broad interpretation Ps can be coparties. Parties are allowed to file cross claim if it arises from same
transaction that is subject matter of original action or counter claim
 Minority rule (Danner court): Parties are not co parties and eligible to
file cross claim unless D has filed a counterclaim
 Harrison v. MS Carriers: Ps Gilbert, Daniels and Harrison filed suit
against D as a result of auto accident. Ds removed the case to federal
court based on diversity. P then moved to amend complaint to name
Harrison (driver) and his insurer as additional Ds. D opposed motion
asserting that P must assert claim against Harrison as cross claim. P
uses Danner (3rd Circuit) ruling that 13(g) does not authorize P to state
cross claim against a co-P in claim arising out of transaction which is
subject matter of common complaint against D. Held: Cross claim is
appropriate joinder here b/c cross claim only has to satisfy that it is
from the same transaction and that parties are not adverse
 *Although cross claim allowed, P would not pass Step 9 of
template b/c clear Kroger evasion (Ps were joined under 20,
so P is asserting a claim against a party joined under 20)
 *18(a) Joining unrelated cross claims: Once cross claim has been filed
under 13(g), party can join w/ that claim any unrelated claims (as long
as SMJ is satisfied)
II.
Permissive Joinder of Parties by Ps
 Rule 17: Real Parties in Interest
- Purpose: to bring in real parties and avoid a D being sued twice
 B/c its for Ds benefit, real-party-in-interest objection is waived if not
raised promptly in motion or as affirmative defense in answer
- Rule 17 does not define who is a real party but leaves that matter to the
applicable state or federal substantive law
- Relation back provision: party substituted or joined shall have same effect as if
action had been commenced in name of real party in interest.
- If permitted court has discretion to substitute or dismiss
- Real party brought in must still meet SMJ (ex: if diversity is destroyed by
bringing in real party, then court must dismiss)
 Green v. Daimler Benz (Rule): P Green sued manufacturer,
wholesaler, and retailer of Mercedes that got caught in embankment
and caught fire. D moved for summary judgment b/c claimed that
Green has no prop interest in the Mercedes and so is not real party and
IC&Y was. Green used Mercedes as President of IC&Y but was
policyholder for insurance. Metropolitan (insurance) held interest in
car in subrogation. Green wants to substitute Metropolitan in as P
under Rule 17. If summary judgment granted, Metro cannot collect b/c
SOL would have run. Under PA state law an insurance co can bring
claim in the name of the insured (to avoid prejudices of juries) and it
doesn’t have to sue in its own name. Relation-back provision of Rule
17 allows Ps to be switched and functions as if Metro was always the P
(no problem w SOL). Held: Rule 17 allows for substitution b/c PA law
allowed Metro to sue in Green’s name and reasonable assumption that
car belonged to Green and Green promptly responded after objection
and invoked Rule 17.
 Rule 20 Permissive Joinder of Parties: allows multiple Ps or multiple Ds to join
together in a law suit if claims arise out of same transaction or series of transactions
- 20(a)(1): allows multiple Ps to join together in a law suit if the claims arise out
of same transaction or series of transactions AND share common question of
law or fact
 Do not have to be seeking same relief
- 20(a)(2): a P or group of Ps can sue a single D or group of Ds if the claims
arise out of same transaction or series of transactions AND share common
question of law or fact
- “Liberal joinder of parties”
- Joinder and amount in controversy requirement for Ps joined
 Exxon Mobil v. Allapattah (SMJ): Ps filed class action against Exxon
in USDC for overcharging fuel purchased under diversity jdx. (Ps
joined under Rule 23- class action) Jury verdict for Ps and court
exercised 1367 supplemental jdx over class of members who did not
meet amt in controversy (Before class action rule: all named Ps must be
diverse from Ds and amt in controversy satisfied between each member
of class and D). Ortega case in first circuit interpreted 1367 narrowly
and jdx is lacking if one P fails to satisfy amt in controversy. (P joined
under 20) In that case a girl cut herself on a can of tuna and her parents
joined suing for their emotional distress and medical expenses arising
from their daughter’s injury. (parents did not meet requisite amt).
III.
Held: Will not up hold minority rule which says DC must have original
jdx over each claim. Supplemental claims do not have to meet the amt
in controversy. Minority view assumes all claims must stand or fall as
single, indivisible civil action (indivisibility theory) but this theory is
inconsistent w notion of supp jdx. Contamination theory: theory was
for the issue of non diverse actual parties being on both sides and
violating complete diversity, but not re amount in controversy (apply at
step 2)
Joinder of Parties by Ds
 Rule 13(h): Joinder of Third Parties in Cross claims or Counterclaims: Parties are
allowed if they are allowed under Rule 19 or 20
- Schoot v. United States (1331) (Rule): Ps Schoot and Vorbau were assessed
penalties for failure to pay for taxes and Schoot originally filed claim against
IRS to recover improperly assessed money. US counterclaimed against Schoot
for balance on penalty and Vorbau was made 3rd party D to the counterclaim
under 13(h). Vorbau seeking dismissal for lack of personal jdx, improper
venue and improper joinder. Held: RE: personal jdx: satisfies the long arm
statute of IL and Vorbau was president of IL company; RE: venue, venue
statutes apply only to original claims and not compulsory counterclaims; RE:
joinder: Rule 20 allows joinder if any question of law or fact common to all Ds
arise in the action, therefore denied dismissal and Vorbau was properly joined
in US’s counterclaim
- Hartford Steam Boiler Ins v. Quantum (1332) (SMJ): Quantum (D’s) heater
at its plant exploded and damaged some property and Hartford (P) insured
Quantum for damages resulting from explosion but not from an accident to an
object and Property Insurers covered explosions but not accidents to objects.
Both insurance companies deny coverage. Hartford sought declaratory
judgment in diversity that Quantum’s losses are not covered by its policies.
Quantum counterclaimed against Hartford and filed a 3rd party complaint via
13(h) & 20 against Prop Ins. b/c claims relate to same question of fact (was the
heater malfunction an explosion or damage?). Held: Joinder of non diverse
Prop Ins was proper. *Court used the fact that Hartford’s counterclaim was
compulsory to establish SMJ but go through template—that is the proper
framework.
 Rule 14 Impleader: A defending party, as a third party P, may cause summons and
complaint to be served upon party not party to action or liable to third party P for all
or part of P’s claim against third party P
- Recovery under theory of derivative liability (indemnification, contribution)
- Once party is brought through 14(a) all other claims are allowable like cross
claims and counterclaims litigation can blossom
- 14(a)(1) Indemnity: D can file claim for indemnification and allows D to
bring in absent party
 *3rd party D is D within meaning of 13(a)
 *18(a): party may assert as many claims as it has against a 3rd party
- 14(a)(2) 3rd party D can file counterclaim against D OR cross claims if there
are more than 1 3rd party Ds if transactionally related
- 14(a)(3) 3rd party D can file claim against original P if transactionally related
- 14(a)(4) original P can file against 3rd party D if transactionally related
- 14(a)(5) Allows 3rd party D sued for indemnity to proceed under rule against
another pary 4th party D, 5th party… whether brought in under 14(a) or 14(b)
-
IV.
14(b): When claim is asserted against the P, P can do anything a D can do
 Wallkill 5 Associates v. Tectonic Engineering (Rule): P hired D to
perform geological test on a piece of prop that he was going to
purchase. Ds report advised that land was suitable for development. P
claims that in reliance on it he purchased it only to hire Poppe, general
contractor, and find that land was not suitable for development. D
motions to request leave to add Poppe under Rule 14(a). Held: D
cannot add Poppe under 14. D failed to show how Poppe would be
liable to D if they were found liable under any secondary liability
theory. D is just alleging that Poppe was the one who moved the
unsuitable material or permitted it to be moved so caused the
unsuitability of the land.
 Guaranteed Systems v. American Nat’l Can Co (SMJ): Guaranteed
Sys (P) filed claim in NC state court for Nat’l Can (D)’s failure to pay
on a construction work it provided D. D removed to federal court
based on diversity and counterclaimed against P that it was negligent in
its construction work. P answered counterclaim and added per Rule 14
3rd party HydroVac alleging indemnity and contribution. D motion to
dismiss b/c court does not have supp jdx over HydroVac Held:
Allowing supp jdx would make 1367(b) overreach limits of Art III.
*Congress did not say that P can’t file against someone non diverse
under Rule 14, it said cannot file against party under Rule 14 if doing
so would be inconsistent w 1332. (OPINION: incorrect; use template)
Intervention by Absentees
 Party intervening must file 1) a motion (either 24(a) or 24(b) and 2) a proposed
answer if D and proposed complaint if P
- Once you intervene you are an ACTUAL P or D (not 3rd party)
 Rule 24 Intervention of Right
- 24(a)(1): Statutory right (ex: USC 2403: US is allowed to intervene in actions
involving constitutionality of federal law)
- 24(a)(2): Non-statutory intervention
 Requirements:
 1) Timely motion: measured from moment movant is aware of
suit
 2) Intervening party has interest relating to property or
transaction that is subject matter of action
 Broad scope typically
 3) An impairment of that interest w/o intervention: (low
threshold)
 Could even argue stare decisis as a factor holding in
this case will affect future suit brought
 4) Movant’s interest is not adequately represented by other
parties to litigation
 Some court say the party absentee is joining has burden
of showing adequacy of representation
 Another rule: opposing party has burden of proving
interest is adequately represented
 Some circuits say burden is on intervening party

V.
*Strong presumption that party representing your
interest is US gov’t then they will adequately represent
you
a. 1st Circuit says no presumption that gov’t
represents interest of citizens
 Ex: Diff motivation or speculative assertion that the
party will not do a good enough job is not enough
- Rule 24(b): Permissive Intervention:
 If claim or defense shares with main action common question of law or
fact
 Discretion of court but must consider whether intervention will unduly
delay or prejudice adjudication of original parties’ rights (ie: collateral
issue)
- Great Atlantic & Pacific Tea v. Town of East Hampton (Rule): A&P (P)
brings suit against Town (D) seeking declaratory judgment over the
constitutionality of the Town’s passage of the Superstore Act which would
prevent A&P to open stores there. The Group helped draft the Superstore Act
and its mission is to preserve the area’s rural and residential character. Group
filed motion under 24(a) and 24(b) to intervene and filed proposed answer as a
D. Group’s arg is that they have diff reason to defend statute. Held: Group
cannot intervene on 24(a) b/c different motivating reasons is not enough to
show that their rights would not be adequately represented; Group cannot
intervene on 24(b) b/c subject to discretion of court and there is potential
collateral issue. Group wants to prevent the development of A&Ps site even if
it were w/in limits of Superstore Law.
 Intervening party and SMJ and indispensability:
- Indispensability: Rule 19 factors
 Indispensability in terms of SMJ is determined at outset of case
- If a party can intervene by right and the case is in diversity, the party must
satisfy SMJ:
 If party not-diverse and party is indispensible destroys complete
diversity
 If party is not-diverse and party is not indispensible does not destroy
complete diversity
- Mattel v. Bryant (SMJ): Mattel (CA) sues Bryant (MI) a former employee for
breach of K and various torts relating to Bryant’s creation of Bratz line of
dolls. After couple removals to federal court by D, diversity was satisfied at the
DC. MGA (CA) maker of Bratz dolls motion to intervene as D to protect its
rights over the line. 1) Issue is if MGA is an indispensible intervening party
then MGA defeats diversity. MGA argues it is not indispensible and P argues
that it is. Indispensability is determined by the factors under 19(b). 2) P argues
that 1367(b) does not allow MGA to be made party under Rule 24. Held:
1367(b) does not trump 1332 and non diverse and not indispensible D
intervener does not destroy complete diversity.
Interpleader (defensive)
 Stage 1: Is stakeholder (P) faced with adverse claims to same stake or property?
(threat of multiplicity of lawsuits)
 Stage 2: Claimants litigate against each other and stakeholder leaves (stakeholder
can also become claimant if he thinks he owns property)



Types:
- 1) Statute interpleader (1335):
 SMJ: at least 2 of the claimants must be diverse from each other and
stake worth $500 min.
 If stakeholder becomes “claimant” (ie: action is “in nature of
interpleader”) his citizenship is considered as a claimant’s
citizenship
 ex: P (NY) v. 5 Ds (CA) diversity satisfied b/c P and
D are diverse and claimants
 Venue: 1397- district which any claimant resides
 Personal jdx: 2361- Nationwide service
 Deposit of stake with court: 1335- must deposit stake or bond w court
 Enjoining other proceedings: 2361- court may enjoin all other suits
against stake
 Tashire: interpleader action brought by insurer of truck driver
involving injury of dozens of people. DC issued injunction,
SC overturned saying that 2361 not meant to be used as bill of
peace.  claimants may be enjoined from litigating
insurance policy but doesn’t bar claimants from litigating
other claims arising out of accident
 *Defensive interpleader: Courts will allow D stakeholder to
defensive interplead via counterclaim or crossclaim
- 2) Rule interpleader (Rule 22):
 SMJ: Normal rules, stakeholder must be diverse from all claimants and
worth over $75,000
 Venue: 1391
 Personal jdx: 4(k)(1)(A) borrow state long arm
 Deposit of stake w court: optional
 Enjoining other proceedings: court may enjoin all other suits against
stake
 *22(a)(2): allows a defensive interpleader by stakeholder who
one of claimants have sued
Indianapolis Colts v. Mayor and City of Baltimore (rule): MD passed bill allowing
city of Baltimore power to acquire Colts (DE/IN) by eminent domain. Manager
decided to move Colts to Indianapolis as it negotiated a K w/ CIB (IN) in Indiana to
play there. K had escape clause. Baltimore (MD) responded by filing a
condemnation in MD state court and state restrained Colts from transferring any
element of team from Baltimore. Colts- stakeholder; CIB and Baltimore- claimants.
Colts removed case to federal court and filed interpleader action in IN USDC via
1335. 1335 satisfied: 1) claimants are diverse: Balitmore and CIB diverse from each
other (Diversity established at time suit was filed) 2) amt in controversy: more than
$500. 3) Personal jdx- nationwide service allows it. 4) if proper interpleader then
DC can enjoin the state proceeding. Held: rule does not allow interpleader b/c not
adverse claimants. Majority opinion treats the Colts as a property to be owned and
CIB is only in a K to have the Colts play in their Hoosier Dome vs. Baltimore is
seeking to own the Colts. Also CIB K has an escape clause so there is no threat of
multiplicity of law suits.
Geler v. Nat’l Westminster Bank: Susana and Ben owned a trust that goes to their
children upon their death. Ben dies and Susana took money out of bank acct but
VI.
then was told to return money b/c it goes to children, Gelers. Question that must be
determined is whether acct was under Ben’s name only or Ben and Susana (Susana
dies and administrator handles acct). 1st case in federal court: Gelers v. Bank. 2nd
case: Susana v. Bank (State). 3rd case: Bank via Rule interpleader in federal court
against Gelers and Susana (1335 doesn’t work b/c Gelers and Susana are both
aliens.) Bank wants to stay the state other actions but because of a Federal antiinjunction act, Act only has 3 exceptions (one of them “aid of jdx”). Held:
Interpleader is proper in this situation and to stay the state proceeding is within the
allowance of the Federal anti-injunction act. Federal court told Bank to go to state
court and ask them to stay proceedings (court is being polite to have them go to state
court)
- *Bank could have done defensive interpleader Rule 22(a)(2) in earlier case in
Geler v. Bank
Compulsory Joinder Rule 19 (similar requirements as Rule 24(a)(2)), triggered by
motion to dismiss rule 12(b)(7)
 Step 1) “Required party:” Should this person be brought into the case
- 19(a)(1)(A) and (B): Can P get complete relief in that party’s absence?
 Assess from viewpoint of D and court (ie: will there be another
lawsuit?)
- 19(a)(1)(B)(i): Does absent party claim an interest related to subject matter?
Would interest be impaired as a practical matter?
 19(a)(1)(B)(ii): If absent party is not brought in, would there be
practical impact on parties?
- Worst type of prejudice: inconsistent judgment  subject to double liability
 subject to potential excessive liability (least type of prejudice and
standing alone not enough)
 Step 2) “Feasibility:” Possibility of bringing party in
- i) Determine whether absent party would come in as a P or D: analysis is
conceptually how would the party align
 Court makes ultimate determination if party is coming in as a P or a D
- ii) 3 qualifications, if one not met go onto step 3
 1) Personal jdx/service of process
 2) SMJ
 3) Venue- established unless party objects
 Step 3) 19(b)“Absence:” Are they an indispensible party that the court cannot
proceed w/o? [higher threshold version of Step 1]
- 19(b)(1): Extent of prejudice to parties (existing parties, absent parties and
court)
 Speculative prejudice or will party be really at risk
- 19(b)(2): Can relief be shaped to avoid prejudice
- 19(b)(3): Adequacy of judgment in absence of party
- 19(b)(4): If dismissed what detriment to the P? (do they lose their claim?)
 Provident v. Patteron: Cionci was driving Dutcher’s car with two other passerngers
when Smith hit the car killing, Smith, Lynch and Cionci. Cionci, Lynch and Smith
were killed and Harris serious injured. Smith and Harris brought law suits against
Cionci, Lynch and Dutcher in state court (pending, hadn’t gone to trial) and Lynch
sued Cionci’s estate and got judgment for $50,000.
- Another law suit between Lynch, Smith and Harris v. Cionci and
Lumberman’s (Dutcher’s insurance policy). Ps seeking declaratory relief that
Cionci was driving w/ Dutcher’s permission which would trigger policy and
they could collect on $100,000 insurance policy. D wants to bring Dutcher in
as an indispensible party to testify to defeat P’s claim (Dutcher would destroy
diversity. 1) potential harm to Dutcher (if judgment for P and Lumberman
pays P, and Dutcher faced with future lawsuit he could not use insurance to
pay this b/c insurance already paid out) and Lumberman (may face future
litigation with Dutcher) 2) No SMJ—Dutcher not diverse 3) extent of prejudce
to parties if dismissed; very prejuducal to Ps b/c they litigated and already
won; D may have to relitigate, but doesn’t count b/c they never raised this to
begin with; little prejudice to Dutcher; prejudice to court to have to start over;
4) shape the relief: enjoin the judgment until state cases adjudicated or
Lumberman defensive interpleader
VII.
VII.
Joinder and Jdx Template
 1. Identify the factual narrative underlying lawsuit or cluster of claims
 2. “Anchor Claim” Is there a claim over which an IBJ can be established
- *If Anchor claim is based on diversity and case includes claim by P against
non-diverse party, apply contamination rule of Exxon and either case or non
diverse party must be dismissed*
- YES- continue
NO- Case must be dismissed
 3. Do the FRCP permit joinder? (Identify specific rule and apply to facts)
- YES- continue
NO- Joinder not permitted
 4. Do either 1331 or 1332 provide an IBJ over joined claim or party?
- YES- Joinder permitted
NO- Continue
 5. Can supplemental jdx be established over joined claim or party under 1367(a)’s
same case or controversy standard (common nucleus of operative facts)?
- YES- Continue
NO- Joinder not permitted
 6. Is this case in federal court solely on the basis of diversity (Step 2)?
- YES- Continue
NO- Joinder permitted (go to step 9)
 7. A) Is P asserting claim against a party joined pursuant to Rule 14, 19, 20 or 24?
 B) Has P entered the case under either Rule 19 or 24?
- YES to either- Continue
NO- Joinder permitted (go to step 9)
 8. Would the proposed joinder be inconsistent with complete diversity, Kroger or
amount in controversy requirements?
- YES- Joinder not permitted NO- Joinder permitted (go to step 9)
 9. May or should the court decline the exercise of supp jdx over the claim/party
pursuant to the standards of 1367(a)?
BINDING EFFECT OF FINAL JUDGMENT
I.
Claim Preclusion or Res Judicata
 Claim preclusion requirements:
- 1) Same claim: Claim in second proceeding is same claim or cause of action
that was resolved in first
 1. Transactional approach: (majority/federal) claim that arises from the
same set of facts
 Restatement factors:
 1) Same time, space, origin or motivation- Did both
complaints come from the same problem?

-
2) Trial convenience- Does it make sense to bring both
complaints together in one suit and be more efficient?
 3) Parties expectations- Would the D be surprised if he
had another law suit?
 Porn v. National Grange Mutual Ins Co: P filed a claim
related to nonpayment of damages by his insurance company
covered by his policy for accidents w/ uninsured motorists. In
2nd lawsuit P raised issue of bad faith allegations and D
moved for summary judgment based on claim preclusion.
The issue was whether the claims were the same and the court
took the Restatement approach. Held: 1) Same occurrence of
same time, space, origin and motivation, 2) would’ve been
convenient for first case to hear K’l breach and bad faith
allegations in one trial since uses much of same evidence and
3) D would be surprised by a second lawsuit since P even said
he would sue for “bad faith.”
 2. Primary rights approach: (CA) focuses on specific right of action, if
the right at stake is the same right at stake in the second
 ex: Primary right to enter into K, Primary right to bodily
autonomy
 3. Same evidence approach: same evidence that establishes violation
must be the same in first as in second
2) Final, valid and on the merits: Judgment in first proceeding must be final
valid and on merits
 Final judgment: (applies to both claim and issue preclusion)
 Federal requirement: final court must enter judgment onto
docket
 Majority rule: Finality not altered by appeal or ability to file
motion to vacate/reconsider judgment
 Issue if second court’s preclusion is based on appellate
court’s reversal of first court’s (now pending)
judgment can delay second action by first court’s
pending determination
 Minority rule: Judgment is not final until appellate process is
complete
 Federated Department Stores v. Moitie: The Gov’t sued
various department stores in violation of Sherman Act for
price fixing. Ps representing class of retail purchasers filed
complaint in USDC almost verbatim to Gov’t case 
dismissed b/c Ps had not alleged injury to business w/in
meaning of Clayton Act (Moitie 1). Instead of appealing, Ps
refiled case in state court (Moitie II) based on state law (artful
pleading) and D invoked res judicata. Held: Prior decision
was final and on the merits therefore Ps bared from bringing
second case.
 Validity:
 Personal jdx: waived if not brought up and party may still
collaterally attack



II.
III.
Merits


SMJ: presumption that rendering court properly decided the
issue but may be challenged throughout
Fraud, duress, mistake: These challenges are often directed to
the initial court. Court unlikely to find judgment by fraud,
duress or mistake by another court likely.
Final judgment for P is considered 100% on the merits
Final judgment for D, a little more wiggle room b/c D may
have a bunch of procedural methods to get final judgment
(ex: lack of personal jdx, therefore not on the merits)
 Restatement: final judgment for defendant and NOT on
merits if
i. Premised on lack of jdx, improper venue
or improper joinder
ii. P agrees to elect a nonsuit (voluntary
dismissal) w/o prejudice or court directs
P to be nonsuited w/o prejudice
iii. By statute or rule judgment does not
operate as bar to another action on same
claim or does not operate unless court
specifies
- 3) Same parties OR in privity (see III. Parties in Privity)
Intersystem Preclusion
 State to state: Full faith and credit (Art IV): 2nd court always applies law 1st court
would apply
 State to federal: Full faith and credit (28 USC 1738): Instructed by Congress to
apply the law of the first state court
- First case (state law issue)  second case (federal law issue) still apply first
court’s claim preclusion standard
 Federal to State: Supremacy Clause of Art III: State court must follow federal law of
preclusion (transactional approach)
- Federal question federal/same transaction
- *Diversity federal court applies the law of the state in which it sits
Parties in Privity
 Categories:
- 1) Relationships between owners of successive interests in real or personal
property
- 2) Relationships that intertwine the substantive legal interests of a party and
nonparty (ex: indemnitor/indemnitee, vicarious liability)
 Privity extends one way
 Suit 1: T v. Speedy (Alvin) judgment for Speedy
 Suit 2: T v. Alvin claim preclusion b/c Speedy and Alvin are in
privity
 Suit 1: T v. Speedy (Alvin) judgment for T in compensatory
 Suit 2: T v. Alvin barred from asserting claim for compensatory but
could bring joint negligence or punitive damages; likewise Alvin can
defend on merits even though T won in earlier suit against Speedy (to
hold otherwise would violate Alvin’s right to due process)
-
IV.
3) Relationships premised on a representational relationship between a party
and non-party (ex: executor, gov’t official)
 [4] Control
 [5] Proxy
- [6] In rem
- “Virtual representation” category:
 Circuit court balancing test factor:
 6 factors:
 1) close relationship
 2) participation in prior litigation
 3) present party’s apparent acquiescence to preclusive
effect of judgment
 4) deliberate maneuvering to avoid effect of judgment
 5) adequate representation of party by prior party
 6) suit raising a public law issue
 Federal standard for virtual representation: Unless party in first case 1)
knows party is suing in representational capacity OR 2) court takes
special precaution that absent party is represented, due process
prevents 2nd party from being precluded
 No public law exception
 Taylor v. Sturgell: P brought FOIA claim against FAA for
not disclosing design of old airplane to him. P did not bring
up two issues and P2 (Taylor, P’s friend) filed claim against
FAA and FAA claimed virtual representation between parties.
Held: 8th circuit test for virtual representation violtes Due
Process. Not same party b/c 1) Taylor was not adequately
represented in the traditional categories 2) Taylor was not
Herrick’s legal representative and was not purporting to
represent him in a legal capacity.
 Applies to intersystem preclusion
Issue Preclusion
 Issue Preclusion requirements:
- 1) Same issue is involved in both actions
 1) Sameness of fact and law: enough overlap that it is reasonable to
treat them as same issue
 2) Policy concerns
 IRS v. Sunnen: 1st case issue was whether a K triggered a tax.
Second case claim is based on a similar K and same tax year
so issue is the same and law hasn’t changed, but claim is that
the first court got the law wrong. Held: Policy reasons, if
mistake was made in the first case then it could impact all
other taxpayers
 *Generally, however, the excuse that a court applied the
law incorrectly is not enough to get past issue
preclusion.
 3) Fair and efficient
 Stauffer v. EPA (note case): Issue was whether EPA had right
to demand entry into Stauffer’s chemical plant. Second case
related to a different plant. Held: context is similar, law is
-
-
-
similar so treat the same. It was fair b/c EPA could have
raised the issue about the second plant in the first suit
2) Issue was actually litigated in the first action
 1) Raised
 2) Contested
 If D admits something, its not considered contested
 3) Submitted to court
 *Does not have to be on the merits (as in claim preclusion, exception is
CA: requires on the merits)
3) Issue was decided and necessary to valid judgment in that action
 Decided: Impliedly or expressly decided (impliedly based on verdict)
 Necessary: If it can be excised, then not necessary.
4) Both actions involve the same parties or those in privity
 1) Privity: [See categories of parties in privity]
 2) Principle of non-mutuality: court will abandon mutuality when nonparty to first proceeding can benefit from it
 Old rule- Principle of mutuality: only parties bound by
precious decided issue can use issue preclusion
 Bernhard v. Bank of America: First case was Cook (executor)
vs. Beneficiaries where the issue was whether the transfer was
a legitimate gift or if it should be part of the estate and held
that it was a gift. Bernahrd, Cook’s successor, then in a
second suit sues Bank of America stating that it breached its
fiduciary duty. B of A uses issue preclusion as a defense. Ds
are not the same parties b/c B of A was not party to the first
suit so under principle of mutuality is not bound by the
decision. Held: Abandons principle of mutuality when non
party may benefit from it. BofA may benefit from the issue
decided in the first case so therefore can use the defense.
 Offensive non-mutuality estoppel:
 When a P to a second case wants to use an issue of a case that
has been adjudicated and the 1) same issue 2) actually
litigated and 3) decided and necessary could be used by the P
as an offensive estoppel, but the parties (Ps) to both cases are
not the same parties
 1) Can use UNLESS opposing party could have
intervened somehow in the first case (this would show
party using sit-back tactic)
 2) Fairness: Anything unfair to the absent party
benefiting? Did they have a full and fair opportunity to
litigate the issue?
 Parklane v. Shore: SC Held: Parties should be able to use
offensive non-mutuality estoppel, UNLESS opposing party
shoes that the party adopted it as a tactic to take advantage of
the first case
 CA and Federal courts have adopted non-mutual offensive
and defensive