I.
FOUNDATIONS .................................................................................................. 2
II.
SUBJECT MATTER JURISDICTION – STATUTES GOVERN ............................................... 3
III.
REMOVAL JURISDICTION: SMJ OF THE FEDERAL COURTS .......................................... 10
IV.
PERSONAL JURISDICTION – RULES GOVERN – RULE 4 ............................................... 13
V.
JOINDER ..................................................................................................... 24
VI.
FEDERAL APPELLATE JURISDICTION ................................................................... 28
VII.
NOTICE ...................................................................................................... 30
VIII. VENUE, TRANSFER, AND FORUM NON CONVENIENS................................................. 30
IX.
ASCERTAINING THE APPLICABLE LAW ................................................................. 33
X.
THE BINDING EFFECT OF PRIOR DECISIONS: RES JUDICATA & COLLATERAL ESTOPPEL ...... 39
XI.
CLASS ACTIONS ............................................................................................ 45
I.
FOUNDATIONS
a.
RULES
i. U.S. Const., Article III
ii. FRCP 12(h)(3) → Whenever it appears—by suggestion of the parties, or otherwise—that the court lacks SMJ, court shall
dismiss the action.
b.
AN OUTLINE OF THE PROCEDURE IN A CIVIL ACTION
i. Deciding to Sue.
1. Before initiating a legal action, a potential P must first determine whether the law furnishes relief for the H
suffered.
2. If effective relief is available, P must next weigh the chances of winning (existence & availability of proof).
3. Finally, recourse to the courts should be weighed against other alts, including settlement or arbitration. Lawsuits
are expensive, time-consuming, and often attract undesirable public attention. Once the decision to sue is made, a
series of steps are followed.
ii. Selecting the Proper Court. There are 2 basic court systems in the U.S. Choice of proper court depends largely on J of
alternative courts. The court selected must have J on both the subject matter (conferred by statute) and over the persons
involved. Additionally, the court must have original, as opposed to appellate, J. Finally, the court must have proper venue
(court's district must include the place of residence of at least 1 of the parties or the property that is the SM of the action or
the location where the claim arose).
1. State courts. Most state court systems include both courts of general J and courts of inferior J. The general J
courts hear most types of cases and can grant every kind of relief, but usually have a requirement that the claim
involve a minimum $ amount. Courts of inferior J hear minor/specialized matters (municipal courts, probate
courts, etc.).
2. Federal courts. Federal courts have SMJ over many cases involving federal law. Where federal law ∅ involved, J
lies if there is diversity of citizenship (parties are citizens of different states/countries) and the minimum AiC
($75k+) is involved.
c.
ILLUSTRATIVE CASES: Authority of the Court to Proceed with the Action.
i. No federal jurisdiction—
1. Capron v. Van Noorden (p22)
a.
b.
c.
Facts: Capron (P) sued Van Noorden (D) in federal court for trespass and damage. In his complaint, P alleged D was
"late of Pitt County" (NC) but failed to allege his own citizenship. The court rendered judgment in favor of D. P
appeals, claiming that the court lacked J.
Issue: Does a federal court have diversity J over an action in which the pleadings fail to allege that either of the
parties is an alien and allege that one party is a citizen of NC but fails to allege the citizenship of the other party?
Holding: No. Judgment reversed.
i. Diversity of citizenship must be shown affirmatively in the pleadings. Since there was no allegation that
either party was an alien, or that P was a citizen of a state other than NC, there's no diversity of citizenship.
ii. There is no federal Q J since there is no federal Q involved in the litigation.
d.
Marbury v. Madison, handout.
II. SUBJECT MATTER JURISDICTION – STATUTES GOVERN
a. FEDERAL DIVERSITY JURISDICTION
i. RULES
1. § 1332(a)-(c); (e): Diversity of citizenship; amount in controversy; costs.
2. § 1359: Parties collusively joined or made.
3. § 1653: Amendment of pleadings to show jurisdiction.
ii. General. Federal judicial power also includes controversies b/w citizens of different states when the AiC exceeds $75k.
Determination of citizenship depends on who the party is as follows:
1. Corporations are treated as citizens of the state of incorporation and of the state in which they have their
principal place of business.
2. Citizenship of individuals is determined by the same criteria used to establish domicile. Additionally, there must
be complete diversity b/w the parties. E.g., if there is 1 P and 2 Ds, there is no DJ if 1 D is a citizen of the same
state as P.
iii. DETERMINING CITIZENSHIP
1. DOMICILE NOT CHANGED BY MARRIAGE ALONE—
a. Mas v. Perry (p)
i.
ii.
iii.
Facts: Jean Mas, citizen of France, and Judy Mas (Ps) were married at Judy’s home in MS. After the
wedding they returned to LSU to resume studies, w/ no intent to return to MS. Ps brought a diversity
action against their Louisiana landlord (D) alleging D watched them through 2-way mirrors in their
bedroom and bathroom. A jury awarded $5k to Jean and $15k to Judy. D appealed, contending Ps failed
to prove diversity of citizenship among the parties, thus depriving them of SMJ.
Issue: For purposes of federal diversity J, does a woman’s domicile change solely b/c of her marriage to an
alien?
Holding: No. Judgment of the DCt is affirmed.
1. Federal diversity J under § 1332 provides for OJ in federal DCt of all court actions b/w citizens of
different states OR citizens of a state and citizens of a foreign state in which AiC is more than
$10k. For a court to exercise DJ, there must be complete diversity among the parties; that is, no
party on one side may be a citizen of the same state as any party on the other side.
2. The Q of citizenship for DJ purposes is a matter of federal (not state) law. The requisite diverse
relationship must exist at the time the complaint is filed and is unaffected by subsequent
changes in the citizenship of the parties. The party invoking DJ has the burden of pleading
diverse relationship and, if properly challenged, also bears the burden of proof.
3. To be a citizen of a state w/i § 1332, a natural person must be both a U.S. citizen and a
domiciliary of that state. For diversity purposes, “citizenship” means domicile; mere residence
in a state ∅ enough. Domicile = place of his true, fixed, and permanent home and principal
establishment, to which he has the intention of returning whenever he is absent therefrom.
4. A change of domicile may be effected only be (i) taking up residence at the new domicile and
(ii) intending to remain there at least for the time being. Neither physical presence nor
intention to remain alone is sufficient.
5. Here, DCt had J over Jean Mas’s claim against D (citizen of Louisiana) pursuant to § 1332(a)(2).
DCt also had J under § 1332(a)(1) over Judy Mas’s claim against D. General rule--that domicile
of a wife for purposes of DJ is that of her husband—is n/a where husband is a foreigner. Since
a woman ∅ lose her U.S. citizenship solely by reason of her marriage to an alien, American
woman ∅ have her domicile or state citizenship changed b/c of such a marriage. Thus, despite
her marriage to a French citizen, she remained a domiciliary of MS.
a.
Also, though she had no intent of returning to MS, she never changed her domicile
b/c she was only a student and lacked the requisite intent to remain in LA.
b. Finally, b/c Jean and Judy’s claims arise from the same operative facts, sound judicial
administration militates in favor of federal J of Judy’s claim.
2.
iv.
Business Associations: Unlike a person, a corporation can be a citizen of more than one state. Generally,
unincorporated associations are not treated as citizens; instead, the court considers the citizenship of each of its
members.
AMOUNT IN CONTROVERSY
1. Introduction. The J of federal DCts limited in diversity of citizenship cases to those where AiC exceeds $75k
(exclusive of costs). (AiC requirement in federal Q cases eliminated in 1980). In most cases, prayer for relief in the
complaint, if made w/o obvious bad faith, is conclusive of the AiC for purposes of J, even if eventual recovery is
$75k or less. While only a positive showing of bad faith is usually enough to defeat federal J when complaint is
well pleaded, filing of “inflated” complaints is somewhat discouraged by practice in federal courts (in some cases)
of assessing costs to P if his eventual recovery is less than the jurisdictional amount.
JURISDICTIONAL AMOUNT IN QUESTION—
a. A.F.A. Tours v. Whitchurch
i.
ii.
iii.
Facts: AFA Tours (P) brought a diversity action against Whitchurch (D) for misappropriation of trade
secrets. D had been employed by P in P’s deluxe travel and tour business; when D resigned, P alleges D
misappropriated a confidential customer list, marketing info, and tour info. D contracted 100-200 former
AFA tour participants for a tour D planned and received responses from 2 AFA customers. D admitted he
remained interested in conducting tours in the future that would compete w/ AFA tours. D moved for SJ
on the grounds that P’s info wasn’t confidential. At the hearing on the motion, the court raised the Q of
whether the value of P’s claims exceeded $50k, the J minimum for diversity action. In addition to damages
for the 2 AFA customers D already took on tour, P sought recovery of damages P might suffer in light of D’s
continued interest in the tour business, noting D had escorted approximately 1,500 clients while employed
by P. P stated that a 10-customer tour would generate more than $50k. Further, P asked for punitive
damages of $250k. Court granted D’s motion and dismissed the case. P appeals.
Issue: Was the court’s dismissal for lack of J improper b/c the court failed to:
1. Give P an appropriate opportunity to show that it satisfied the J amount?
2. Apply the proper standard to P’s requests for damages and injunctive relief?
Holding: (i)—Yes. (ii)—Yes. Judgment vacated and case remanded.
1. In determining the J amount, the sum claimed by P controls if the claim is made in good faith.
To support a dismissal, it must appear to a legal certainty that a claim is actually for less than
the J amount.
2. In a misappropriation of trade secrets case, damages may be measured by P’s losses or by D’s
unjust profits.
a.
Where punitive damages are allowed, they are included in the calculation of
damages.
b. Where an injunction is sought, the value of the claim is determined by referring to
the right for which protection is sought and measuring the impairment the injunction
will prevent; past and future potential H may be considered by the court.
3.
4.
Here, P not afforded an appropriate and reasonable opp to show good faith in his belief that a
recovery in excess of the J amount was possible. On the present record, the court could not
determine to a legal certainty that P’s claims ∅ exceed the minimum required.
In addition, injunctive relief would not address only customer solicitation but any other use of
the info, such as D’s sale of P’s client list.
INJUNCTIVE RELIEF.
b. McCarty v. Amoco Pipeline Co ()
i.
ii.
Facts: Amoco (P) sued in state court in IN to condemn an easement for a pipeline across land owned by
McCarty (D). D filed no objections, and the court enetered an order condemning the easement nad
appointing appraisers to assess the property. They valued it at $1,625, and this sum was deposited w/ the
court. D filed exceptions to the appraisals, which entitled him toa jury trial on value Q. Subsequently, D
moved that the state court reconsider its original order of condemnation, arguing P wasn’t taking the
property for a public use. State court o/r the motion, and D took no appeal. Instead, D brought a new
action in state court, based on the same theory that thte taking ∅ for a public use, and asking P be enjoined
from using the land for its pipeline. P removed the action to federal court, and D’s motion to remand, on
the ground that the AiC ∅ present, was denied. D contended that, b/c the value to him of the matter in
controversy ∅ exceed $10k, the J minimum amount required by § 1332 ∅ present. DCt sustained its J over
the case by evaluating the matter in controversy from P’s viewpoint.
Holding: Federal court may view the J amount from the perspective of either party. Though it may be true
that the “P viewpoint” rule result sin some degree of certainty and simplicity of application, the interests of
equity and fairness—as well as the purposes behind the removal statute—would be well served by
allowing D’s claim to be evaluated for J puroses by appoint the “either viewpoint” rule. Here, P showed by
an unchallenged affidavit that the pecuniary result to P that the judgment prayed for would exceed the J
amount. Thus, removal was proper and the DCt had J.
Federal Diversity Jurisdiction
CB 249-253; 255-269.
Schlesinger v. Salimes, handout.
b. FEDERAL QUESTION JURISDICTION
Article III, 28 USC § 1331, and § 1338
1. Article III, § 2, clause 1 extends the judicial power of the U.S. "to all cases, in law and equity, arising under this
Constitution, the laws of the U.S., and treaties made, or which shall be made under their authority."
2. Federal Question Jurisdiction → 28 USC § 1331(a): "The district courts shall have original jurisdiction of all civil
actions arising under the Constitution, laws, or treaties of the United States…"
3. Congress also enacted special jurisdictional statutes authorizing fed cts to hear particular kinds of fed claims. (28
USC § 1338: patent, trademark, unfair competition claims).
ii. FEDERAL INGREDIENT
1. Osborn v. Bank of the U.S. (p271)
i.
a.
b.
Ohio state auditor takes cash from Bank, Bank wants cash back post haste.
Ohio says no federal jurisdiction, Court disagrees
i. Statutory Authorization: Congressional Act chartering bank authorizes it “to sue or be sued” in any Circuit
Court
ii. Article III authorization – § 2: “all cases … arising under this Constitution, the Laws of the United States, and
Treaties made”
1. Marshall states that if there is some “federal ingredient” then Article III is satisfied.
2.
3.
4.
“The Act itself is the first ingredient in the case”
National Bank is created by congress, question is of a federal act
If there is a federal ingredient → there is federal question jurisdiction
Osborn allows Congress to confer "protective" jurisdiction on fed cts where a federal proposition might be
challenged, however unlikely. (Textile Workers Union v. Lincoln Mills)
3. Osborn reflects a broad conception of 'arising under' jurisdiction, where Congress can confer jurisdiction to fed cts
over any case/controversy calling for the application of federal law. (Verlinden B.V. v. Central Bank of Nigeria)
iii. FEDERAL QUESTION ARISING FROM ANTICIPATED DEFENSE
1. Fed jurisdiction must be determined from complaint alone; juris invoked by P's bringing in a federal issue ∅
necessarily a part of his immediate cause of action ∅ suffice.
2. To invoke federal Q jurisdiction of the fed courts → P must assert a right explicitly protected by the Constitution,
laws, or treaties of the U.S. has been violated.
3. Louisville & Nashville R. Co. v. Mottley (p273)
2.
a.
b.
c.
Facts: Mottley (P) sued D for breach of contract in cancelling a lifetime railroad pass held by P as a settlement in a
prior tort action by P against D.
i. To gain fed jurisdiction, P asserted in complaint that D would assert as a defense a law just passed by
Congress outlawing lifetime tickets. D filed demurrer to P's complaint for failing to state a cause of action.
ii. Ignoring the litigants' issue, SCOTUS (on appeal on their own motion) raised the issue of whether federal ct
had jurisdiction to entertain the case.
Issue: May a P obtain fed jurisdiction by alleging that D will raise a federal Q that would give the fed court federal
question jurisdiction?
Holding: No. Reversed and remanded w/ orders to dismiss for lack of fed jurisdiction.
i. P's complaint must allege & show an essential element of P's breach of contract suit against D arises under
a law/treaty of the U.S.
ii. Fed jurisdiction ∅ granted on basis of anticipated fed defense. Complaint ∅ show an essential element of
P's breach of contract suit against D arose under a law/treaty of the U.S.--only that there's some chance a
federal Q might (in the future) have to be litigated in the course of the suit.
Declaratory Judgment Act, 28 USC §§ 2201-02: allows fed ct to issue a declaration of "rights and other legal
relations" to an "interested party" in "a case of actual controversy w/i its jurisdiction.
a. "To sanction suits for declaratory relief as w/i the jurisdiction of District Cts" b/c you anticipate a defense
based on federal law would a) contravene the whole trend of jurisdictional legislation by Congress, b)
disregard the effective functioning of the federal judicial system, and c) distort the limited procedural
purposes of the Declaratory Judgment Act. (Skelly Oil Co. v. Phillips Petroleum Co.)
b. Artful Pleading: attempt by P to create federal Q jurisdiction thru anticipation/inclusion of fed defense
in complaint in an action under the Declaratory Judgment Act.
i. Exception! P not allowed to conceal the true nature of a complaint thru "artful pleading."
(Bright v. Bechtel Petroleum)
ACTIONS "ARISING UNDER" COPYRIGHT ACT
1. T.B. Harms Co. v. Eliscu (p276)
4.
iv.
a.
Facts: P brought action in fed ct for equitable/declaratory relief against D. Jurisdiction predicated on 28 USC § 1338,
which grants fed courts exclusive jurisdiction of any civil action "arising under" U.S. copyright laws.
i. P had acquired composer's publication rights to the music/lyrics of 4 copyrighted songs. D, a lyricist
employed to write lyrics for the songs, allegedly assigned his rights to the existing and renewal copyrights
of the songs to P in return for royalties on 6/30/33.
When copyrights were about to expire, composer's children assigned their rights in the renewal copyrights
to P. But D, by instrument dated 2/19/62, and recorded in the Copyright Office, assigned his rights to
another. D filed an action in a state court for a declaration that he owned a 1/3 interest in the renewal
copyrights and for an accounting.
iii. In the fed action, D moved to dismiss P's complaint for 12(b)(6) and lack of federal jurisdiction. DCt
dismissed the complaint for lack of fed jurisdiction, since ∅ ev to support a claim of actual or threatened
infringement. P appeals.
Issue: Did the district court have jurisdiction over this cause of action?
Held: No. Judgment affirmed.
i. In Osborn v. Bank of U.S., Justice Marshall construed "arising under" in the context of Article III broadly. He
indicated that it granted fed courts jurisdiction in every case where fed law furnished a necessary
ingredient to the claim even though antecedent and uncontested.
1. SCOTUS has long given a narrower def to the "arising under" language in statutes defining the
jurisdiction of lower fed courts.
ii. Holmes Creation Test: Explaining which suits arise under copyright and patent laws, Holmes stated: "a suit
arises under the law that creates the cause of action." As HCT explains, fed courts have authority for
hearing copyright infringement actions, since they are authorized by the Copyright Act and are w/i the
scope of § 1338.
iii. P's claim is not w/i Holmes' definition. Copyright statute and regulations ∅ create explicit right of action to
enforce/rescind assignments of copyrights, nor do they specify a cause of action to determine ownership.
1. True, fed civil claims have been "inferred" from fed statutes labeling behavior criminal or
otherwise regulations. Such statutes usually impose a fed duty or create some express remedy
as well.
2. Notwithstanding, the relevant copyright statute provision (17 USC § 28) merely authorizes an
assignment by written instrument and cause of action ∅ inferred.
iv. Even though a claim is created by state law, a case may "arise under" a US law if complaint discloses a need
to determine the application/meaning of such a law. P's claim ∅ meet this test.
ii.
b.
c.
v.
Note: Fed courts may exercise jurisdiction w/i Article III only when a fed statute grants jurisdiction. There must be a
statutory basis, express or implied, for jurisdiction.
Supplemental Jurisdiction
28 U.S.C. § 1367.
Exxon Mobil v. Allapattah, Supp. 642-657.
Glannon, 265-285.
c. SUPPLEMENTAL JURISDICTION
General. In addition to the limited SMJ conferred upon fed cts by 28 USC § 1331 & 1332, the fed cts have declared
themselves, by judicial fiat arising out of necessity, competent forums for the consideration of nonfederal, nondiversity legal
Qs when the determination of such Qs is necessary to the complete adjudication of a suit legitimately before the fed cts.
1. Formerly known as the doctrines of pendent and ancillary jurisdiction, in 1990 these were collectively named
"supplemental jurisdiction."
ii. Pendent Jurisdiction. When P, in her complaint, appends a claim lacking an independent basis for federal SMJ to a claim
possessing such a basis.
1. Fed jurisdiction is said to extend to the whole litigation, ∅ just isolated parts of it.
2. Logic: Concept of PJ is based on the notion that often the consideration of nonfederal Qs in a case will be
necessary and desirable to disposition of a fed claim before fed cts.
i.
2 Purposes (as judged by whether it furthers some federal policy) (p295):
a. Ensures litigants ∅ dissuaded from maintaining their fed rights in a fed ct solely b/c they can dispose of
all claims by one litigation in the state but ∅ federal forum.
b. Avoids piecemeal litigation, promoting judicial economy and greater expedition for the litigants.
iii. Ancillary Jurisdiction. When either a P or D injects a claim lacking an independent basis for jurisdiction by way of a c-claim,
x-claim, or 3rd party complaint.
1. The court acquires jurisdiction of a case in its entirety, and thus may, as an incident to P's claim, possess
jurisdiction over matters such as c-claims, x-claims, or 3rd party claims of which it would otherwise not have
cognizance if they were presented independently.
iv. Supplemental Jurisdiction. In 1990, Congress combined ancillary and supplemental juris under the name "supplemental
jurisdiction."
1. 28 USC § 1367 grants SJ over all claims that "form part of the same case or controversy under Article III," and
explicitly authorizes SJ over "claims that involve the joinder or intervention of additional parties."
v. Common Nucleus of Operative Fact
1. United Mine Workers of America v. Gibbs (p291)
3.
a.
b.
c.
Hurn v. Oursler: state law claims appropriate for fed ct if they form a separate but parallel ground for
relief also sought in a substantial claim based on fed law.
i. Gibbs confirmed a species of fed juris already recognized in Hurn. The aspect of Hurn causing
the most interp difficulties was the requirement that state and fed claims merely be 2 distinct
grounds of a "single CoA" rather than "2 separate and distinct CoAs." (p295)
ii. Gibbs confirmed that CoAs are unimportant; established correct inquiry to be simply whether
in a broad sense there is in fact relatedness.
Statutory law & the Constitution may limit a fed ct's jurisdiction over nonfederal pendent party claims.
a. The requirement of complete diversity of citizenship ∅ circumvented by the exercise of pendent party
jurisdiction. (Owen Equipment & Erection Co. v. Kroger)
i. SCOTUS refused to apply pendent jurisdiction to an additional party w/ respect to whom no
independent basis of fed jurisdiction existed.
ii. Distinguished Gibbs on 2 grounds (p296)
d.
2.
Facts: Gibbs (P) sued D in fed ct for interference w/ both his employment contract and a separate haulage contract-both contracts relating to a union that was a rival of D.
i. P's claims were based on both fed and state law.
ii. After a jury verdict for P under both legal theories, trial ct set aside damages under the haulage contract
and held the damages based on employment contract only sustainable on the state law claim.
iii. D appealed, claiming the DCt improperly entertained the jurisdiction of the state law claim, but the CtApp
affirmed. SCOTUS granted cert.
Issue: May fed cts hear state claims when they are derived from a common nucleus of operative fact that gives rise to
a substantial federal claim?
Holding: Yes. Judgment reversed, however, on other grounds.
i. Fed ct power over state claims ("pendent jurisdiction") exists wherever the relationship b/w a fed and state
claim justifies a conclusion that the entire action before the court is one constitutional "case"--the claims
must derive from a common nucleus of operative fact.
ii. Pendent jurisdiction is a doctrine of discretion, ∅ one of right, and is governed by consideration of judicial
economy, convenience, and fairness to litigants. Thus, though P's fed claims ultimately failed and the DCt
could've dismissed the state claim, ∅ an abuse of discretion for it to fail to do so.
b.
c.
vi.
vii.
Pendent party jurisdiction can't be exercised if Congress has expressly or by implication negated its
existence. (Aldinger v. Howard)
In cases arising under fed law, fed cts can't exercise jurisdiction over parties sued under state law absent
express statutory authorization. (Finley v. US)
i. Congress effectively O/R Finley by enacting the Supplemental Jurisdiction Act, which provides
the express statutory authorization found lacking by the court in Finley.
28 USC § 1367
1. "Congress Accepts Supreme Court's Invitation to Codify Supplemental Jurisdiction" (p300)
a. Substance))))
2. § 1367(a) defines supplemental jurisdiction as going to the limits of the constitutional definition of a "case or
controversy." Generally accepted that Congress intended the Gibbs test to define what constitutes a "case or
controversy" for purposes of supp jurisdiction.
a. Makes supp jurisdiction available in federal Q cases w/ respect to claims and parties.
3. § 1367(b) restricts supp jurisdiction in diversity cases when P seeks to assert against nondiverse parties.
4. Guaranteed Systems, Inc. v. American National Can Co.: D, after removing action on diversity grounds, asserted a
c-claim against P. P's motion to implead a nondiverse party in defense against the c-claim was denied by the court.
a. Prof. Freer K's § 1367
5. Exxon Mobil Corp v. Allapattah Services, Inc. (p304-5)
a. A fed ct in a diversity action may exercise supp jurisdiction over additional Ps whose claims ∅ satisfy the
minimum amount-in-controversy requirement, provided the claims are part of the same
case/controversy as the claims of Ps who do allege a sufficient amount in controversy.
b. Nothing in § 1367(b) w/h supp jurisdiction over claims of Ps permissively joined under FRCP 20 or
certified as class-action members pursuant to FRCP 23.
6. § 1367 allows a fed ct discretion to retain/dismiss state law claims whenever the fed basis for an action drops
away.
a. When the fed basis for an action disappears, DCt is free to decide whether to assert jurisdiction over the
remaining claims, in accordance w/ § 1367. (Shanaghan v. Cahill)
i. Similar discretion exists when amount in controversy falls below the statutory minimum.
b. BUT: Shanaghan confuses:
i. (i) state law claims that are supp to claims w/i the ct's original jurisdiction (covered by 28 USC §
1367 and heard at the ct's discretion), with
ii. (ii) state-law claims that are aggregated to satisfy the amount-in-controversy requirement for
diversity (which are w/i the ct's original jurisdiction). (Wolde-Meskel v. Vocational Instruction
Project Community Servs)
Means to Decline Supplemental Jurisdiction Over State Law Claims
1. Executive Software of North America v. US District Court for the Central District of CA (p305)
a.
b.
Facts: Page (P), a black female, filed a complaint in CA state ct alleging racial/religions discrimination by her previous
employer, Executive Software (D). P alleged 2 fed CoAs and 3 CoAs under CA state law. D removed to fed ct based on
the fed claims.
i. Citing United Mine Workers of America v. Gibbs, DCt subsequently remanded the state law claims. D
petitioned the 9th CirCtApp for a writ of mandamus to compel the DCt to retain jurisdiction over the
supplemental state law claims.
Issue: Did the DCt err in remanding the state law claims?
c.
d.
2.
3.
Holding: Yes. Writ of mandamus granted and remand order vacated.
i. Supp jurisdiction over pendent state law claims is conferred upon fed cts under 28 USC § 1367(a).
1. § 1367(c) provides the exclusive means by which supp J can be declined. Thus, a ct may only
declined to exercise supp J if it finds that one of the 4 instances listen in § 1367(c) applies.
ii. § 1367(c) permits remand when:
1. The claim raises a novel or complex issue of state law
2. The state law claim "substantially predominates"
3. The fed claims are dismissed, OR
4. "In exceptional circumstances, there are other compelling reasons for declining jurisdiction."
iii. The DCt ∅ provide statutory reasons for its remand in this case, just cited Gibbs. It's clear the state claims
∅ meet any of the listed exceptions in § 1367(c). The ct ∅ indicate any exceptional circumstances or
compelling reasons for declining jurisdiction under § 1367(c)(4), or engage in any analysis of Gibbs values.
Thus, remand was inappropriate.
Dissent: The DCt committed no error unless it relied on an unauthorized ground in exercising its discretion to
remand. The record ∅ tell us which ground the ct relied upon.
Supplemental jurisdiction over a permissive c-claim?
a. Older view (before § 1367): permissive c-claim must have an independent basis of jurisdiction.
b. § 1367 "displaced, rather than codified… the earlier view." Constitution requires only that the "c-claims
and the underlying claim bear a sufficient factual relationship (if one is necc) to constitute the same
'case' w/i the meaning of Article III and hence § 1367." (Jones v. Ford Motor Credit Co.)
§ 1367 → no judicially created jurisdiction ∅ provided for by statute?
a. ∅ citing § 1367, SCOTUS said fed cts have "ancillary jurisdiction" to enforce their decrees and orders.
(Kokkonen v. Guardian Life Ins Co of America)
III. REMOVAL JURISDICTION: SMJ OF THE FEDERAL COURTS
i. Statutes:
1. § 1441: Actions removable generally.
2. § 1446: Procedure for removal.
3. § 1447: Procedure after removal generally.
ii. General. Fed jurisdiction is exclusive only in rare cases. Most cases that possess all necessary attributes for fed jurisdiction
may be brought in a state ct by the P. If this occurs, the D has the option of remaining in state court or removing the case to
fed ct.
1. Removal juris gives a D who has been sued in state ct the right to veto P's forum choice by transferring the action
to fed ct--but generally "only if the fed ct would have had juris to entertain the case if the P had chosen to go there
originally."
2. Justification:
a. Protects D against local bias
b. Equalizes the ability of both parties to have a fed Q litigated in its "natural" forum
c. Serves parties' strategic goals.
3. Statutes:
a. Article III ∅ explicitly refer to removal jurisdiction, but Congress has authorized this power since the
Judiciary Act of 1789.
b. The current removal statute [28 USC § 1441] traces to the Judiciary Act of 1875 and amendments from
1887.
c.
iii.
iv.
v.
vi.
Congress has enacted specific removal statutes to deal w/ particular fed claims or fed parties:
i. Removal of actions of federal officers [28 USC § 1442]
ii. Removal of civil rights cases [28 USC § 1443]
iii. Removal of interstate class actions [28 USC § 1453]
d. Congress has also provided that certain claims may NOT be removed to federal courts.
i. Actions against railroads under the Federal Employers' Liability Act [28 USC § 1445]
4. Shamrock Oil & Gas Corp. v. Sheets (p314)
a. Congressional intent to restrict the jurisdiction of fed cts on removal--strict construction necessary.
i. § 12, 1789 Judiciary Act → only Ps can remove
ii. § 3, 1875 Act → practice on removal liberalized
iii. 1887 Act & Present → restricted fed ct removal jurisdiction
b. Question: Can a P remove a state ct action to the fed cts b/c a D has imposed a c-claim? NO.
5. Third party Ds may NOT remove an action to fed ct (First National Bank of Pulaski v. Curry, p314)
a. "Although Shamrock Oil is not dispositive of the precise issue before us it does dictate that the phrase
'the D or Ds,' as used in § 1441(a), be interpreted narrowly, to refer to the Ds in the traditional sense of
parties against whom the P asserts claims."
P is master of his complaint… but not always.
1. P may choose to avoid federal-removal jurisdiction by pleading only state law claims OR by joining parties who will
destroy diversity jurisdiction.
2. 3 Exceptions:
a. P may not fraudulently join a D against whom P has no CoA
b. Artful Pleading Doctrine prevents P from disguising a fed CoA that would make the case removable
c. Doctrine of Complete Preemption: A version of artful pleading mandates that certain CoAs are so
exclusively federal in character that even if P ∅ plead them, they will completely preempt any state CoA
and make any CoA P attempts to plead federal, and, therefore, removable.
i. SCOTUS recognized the Doctrine of Complete Preemption (Avco Corp v. Aero Lodge No. 735)
Removal of Federal Q Cases. Generally, when P's state CoA is based on a substantial fed Q, D may remove the action to the
Fed DCt w/o regard to the citizenship of the parties, as long as the requisite jurisdictional amount is in controversy.
1. "Any civil action of which the DCts have original jurisdiction founded on a claim or right arising under the
Constitution, treaties or laws of the US shall be removable w/o regard to citizenship or residence of the parties."
[28 USC § 1441(b)]
Removal of Diversity Cases. Diversity cases brought by P in a state ct are removable to Fed DCt only if none of the parties in
interest properly joined and served as Ds is a citizen of the state in which P brought her action. [28 USC § 1441(b)]
1. Since the only justification in theory for diversity juris of the fed cts is a desire to avoid state ct prejudice against
out-of-state citizens, if P has chosen a state ct in a state of which D is a citizen, there's no remaining justification for
fed ct intervention. → D may ∅ remove.
2. A case can be removed only if the required amount in controversy in diversity cases is also met.
Derivative Nature of Removal Jurisdiction. "Removal of jurisdiction is strictly a derivative jurisdiction." This means only
those actions properly filed in the state ct are removable--if P mistakenly files her action in an improper state ct, D may NOT
remove to the corresponding fed ct, even if such is a proper court.
1. There is no proper state juris from which the fed juris can "derive." The state ct must dismiss the action, and P
must commence a proper action if D is to have the option of removing to fed cts.
vii.
Generally, all Ds (other than nominal parties) must join in the petition for removal.
1. Exception: when removal is on the basis of a separate and independent claim.
viii. If a case is removed erroneously, fed ct must remand it to the state ct. [28 USC § 1447(c)]
1. 30-day window for a remand motion made "on the basis of any defect other than lack of SMJ."
ix. § 1447(d): an "order remanding a case to the State ct from which it was removed is ∅ reviewable on appeal or otherwise,"
EXCEPT in civil rights cases pursuant to § 1443.
1. § 1447(d) "must be read in pari materia w/ § 1447(c), so that only remands based on grounds specified in §
1447(c) are immune from review.
x. § 1441(e): special removal rules for multiparty "single accident" actions that can be heard in fed ct under the minimaldiversity jurisdiction of § 1369.
1. Designed to encourage consolidation of all related claims arising from accident where 75+ ppl die.
a. D can remove if action could've been brought originally in fed ct under § 1369.
i. Exception: removal if could've been brought under § 1369 "in whole or in part" and arises
from same accident, even if couldn't have been brought in fed ct originally.
b. Meant to allow parties to join actions currently in state courts to cases pending in fed cts.
c. Exempts § 1369 removal actions from traditional requirements--including consent of all Ds and, in
diversity cases, restrictions on D's citizenship.
xi. Derivative Jurisdiction Principle: where case w/i exclusive juris of fed ct so state ct lacks SMJ, removal ∅ permitted b/c no
action pending in state ct and no action which could be removed to the fed ct.
1. 1986's § 1441(e)--rejects this limitation; fed ct's removal juris ∅ predicated upon the state ct having SMJ
2. Recodified as 2002's § 1441(f)--limits the abrogation of the derivative jurisdiction doctrine to cases removed under
§ 1441.
xii. § 1441(c)→ Separate and Independent Claims
1. Where there's a single wrong to Ps, for which relief is sought, arising from an interlocked series of transactions,
there's no separate and independent claim or CoA under § 1441(c). (American Fire & Cas. Co. v. Finn)
2. Borough of West Mifflin v. Lancaster (p)
a.
b.
c.
Facts: 2 shopping mall patrons (Ps) alleged they were harassed/assaulted by mall security guards and a West Mifflin
police officer who arrested them.
i. P filed suit against borough, police officer, security guards, and mall owners for assault, wrongful arrest,
malicious prosecution, an negligence (state law claims).
ii. P also alleged violation of 42 USC § 1983, arguing the municipal Ds (borough and police) and mall owners
and security officers had conspired to deprive P of civil rights.
iii. Municipal Ds removed case to fed ct on § 1983 claim.
iv. DCt found state law issues predominated→ remanded entire case (including § 1983 claim) under 28 USC §
1441(c).
v. Ds petitioned for writ of mandamus arguing remand was improper.
Issue: Was remand proper under § 1441(c)?
Holding: No. Petition granted.
i. Under § 1441(c), fed claim must be separate and independent from the state law claim to allow
removal/remand.
1. If ∅ separate and independent → court's discretion to remand under § 1441(c) pertains to only
state law claims that the ct could decline to hear under § 1367, and the DCt must retain the fed
claim.
ii.
iii.
3.
Note:
a.
b.
c.
Under Gibbs, supplemental state claims that "derive from a common nucleus of operative fact" are ∅
separate and independent → ∅ w/i scope of § 1441(c).
1. In this case, state law claims and § 1983 claim arose from identical series of events. Remedy
sought based on state claims is same as based on fed claim--damages for same set of alleged
injuries.
2. State and Fed claims here are ∅ separate and independent. Judicial economy would ∅ be
served by 2 separate trials on identical facts.
State claims ∅ be said to "substantially predominate" allowing the ct to remand them under § 1367(c)(2).
1. Although the # of state law claims here is greater than the # of fed claims, the "substantially
predominate" standard ∅ met by simple numerical analysis.
For a claim to qualify for removal under § 1441(c) → fed claim must be "separate and independent" from
the state claim.
To qualify for supplemental jurisdiction under § 1367 → a claim must "form part of the same case or
controversy."
Lancaster indicates a claim can't meet both of these standards at the same time.
(finish pp 323, 317)
IV. PERSONAL JURISDICTION – RULES GOVERN – RULE 4
a. TRADITIONAL BASES OF JURISDICTION--Natural Persons and Unincorporated Associations
i. Requirements of Due Process
1. Pennoyer v. Neff (p63)
a.
b.
c.
Facts: Neff (P) brought suit in fed ct to recover possession of a parcel of land purchased at sheriff's sale by Pennoyer
(D). Sheriff's sale was made in execution of a default judgment rendered against P in an earlier case. It was based on
in personam jurisdiction; however, P was a nonresident and ∅ personally served w/ process. Constructive service by
publication in Oregon newspapers was deemed adequate by the court in the original suit. P sued to recover his land,
claiming the ct in the original suit ∅ have jurisdiction to render a judgment. Fed circuit ct upheld P's claim; D appeals.
Issue: Is constructive notice (by publication) upon a nonresident adequate basis for in personam jurisdiction in a state
court?
Holding: No. Judgment affirmed.
i. The DP clause of the 14th Am requires a D be given a chance to defend himself in an action filed against
him. This requirement is satisfied if D is "properly and seasonably notified" of the action pending against
him.
ii. To gain in personam jurisdiction over a D and the concurrent power to adjudicate the full dispute b/w the
parties and award full judgment as called for, the ct must see that D is personally served w/ process while
actually present in the state.
iii. To gain in rem or quasi in rem jurisdiction over the property of a D, the ct must see that D owns the
property in the state, and that this property is legally attached before the instigation of suit or very shortly
thereafter. Attachment of D's land serves as constructive notice that there is a legal action pending and
vests the state court w/ the power to dispose of the attached land in favor of P in case the P prevails upon
the merits.
iv. Neff, as D in the original suit, ∅ served w/ process while in the state, nor had his land been attached at the
outset of the suit. Thus, ct hand no juris over him (neither personam, in rem, nor quasi in rem), and could
v.
ii.
iii.
iv.
not have rendered a judgment against him. Any execution of such an invalid judgment is unauthorized and
void.
Even if the Oregon ct had properly attached Neff's land at the outset of the suit, it exceeded this in rem
jurisdiction by returning a full judgment against him ∅ limited by value of the attached land.
1. The ct confused the jurisdictional power of in rem juris w/ that of in personal juris.
a.
Personam → Only this allows a court to fully adjudicate and compensate upon the
merits of the action.
b. In rem → Limited absolutely to the value o f the land attached.
The Pennoyer rules.
1. For a court to obtain valid in personam juris over a D, D MUST be served w/ process w/i the state in which the
court was sitting.
2. Such personal service w/i the state is always sufficient, w/o anything else, to vest that court w/ in personam juris
over D.
Pennoyer: traditional modifications and extensions. Pennoyer's requirement of in-state service of process before vesting of
in personam juris over D proved more and more confining and impractical as interstate travel and communications
improved. Thus, that aspect of the rule that required s/p w/i the territorial juris of the court has long since been "excepted
into oblivion." The most important of these traditional exceptions to the Pennoyer rules are:
1. Domicile, residency, and nationality in a juris are sufficient to confer IPJ even though the service of process is made
outside the jurisdiction. Blackmer v. US; Milliken v. Meyer (p71);
2. Appearance to defend upon the merits confers IPJ on the court, whether or not the court originally had IPJ;
3. Prior consent, whether express or implied, to confer IPJ over a chosen court is sufficient to vest that court with
juris. Adam v. Saenger (p72);
4. Nonresident motorist statutes, equating use of a state's highways w/ consent to appear in its courts, have been
found constitutional. Kane v. NJ [242 US 160 (1916)] ();
5. The concept of "continuing jurisdiction" has done away w/ the necessity of repeated s/p in long suits subject to
reopening;
6. The conduct of state regulated business in a state has been declared the constitutional equivalent of consent to
submit to jurisdiction;
7. Ownership of real property in a state, out of which arises the CoA sued upon, has been held sufficient to vest IPJ in
the state court over the nonresident property owner;
8. "Long arm" statutes, basing IPJ upon the doing of a specified single act w/i the statute (such as commission of a
tort in state), have been held constitutional;
9. SCOTUS declared it would probably not defeat any exercise of IPJ over a nonresident that was "fair, just, and
reasonable," whether or not the exercise in such jurisdiction falls w/i one of the traditional exceptions enumerated
above. International Shoe v. Washington [326 US 310 (1945)] ().
Nationality. US citizenship is probably sufficient contact w/ the US to subject citizens abroad to the IPJ of American courts
w/o violating DP. ∅ clear whether such foreign service would be upheld unless specifically authorized by statute.
1. Blackmer v. U.S. [284 US 421 (1932)] (p71) → Blackmer, a U.S. citizen living in France, refused to comply w/ a
subpoena issued by a fed district court, and was convicted in absentia for contempt.
a. Service upon American citizen abroad was specifically authorized by federal statute, which Blackmer
challenged as violative of DP.
b. The Court held the statute was constitutional. "The juris of the U.S. over its absent citizens is an IPJ… and
the absent citizen is bound to take notice of all domestic laws that apply to him and obey them."
v.
vi.
vii.
Domicile. Domicile is the legal state citizenship of an individual or unincorporated ass'n. Almost universally recognized
today that state courts have IPJ over all domiciliaries of the state, wherever they are residing and wherever they are served
w/ process.
1. Milliken v. Meyer [311 US 457 (1940)] (p71) → Milliken sued Meyer, a domiciliary of Wyoming, in the Wyoming
state courts. Milliken served Meyer in Colorado, where Meyer was vacationing. Meyer objected to the exercise of
IPJ over him by the Wyoming courts, citing Pennoyer's requirement of in-state service for vesting IPJ in any court.
SC held Wyoming courts properly exercised IPJ.
2. Rule--Domicile in a state is per se sufficient contact w/ that state to confer IPJ on the state courts, whether or not
service is made w/i the state.
Residence. Residence must be carefully distinguished from domicile. Domicile = legal citizenship in a state. Residence =
long-term presence, w/ or w/o establishment of citizenship.
1. While SC ∅ passed upon whether mere residence in a state is sufficient contact w/ that state to vest IPJ in its
courts wherever s/p is made, it is probable that such an exercise of jurisdiction would be upheld whenever it is not
"unreasonable" that D be required to defend in the state of his residence.
Consent by bringing suit. Adam v. Saenger [303 US 59 (1938)] →
1.
2.
Facts: Beaumont Export Co., a TX corporation, originally brought suit in CA state court against Montes, who in turn c-claimed and
eventually won a default judgment. Montes then assigned his judgment to Adam. Adam sought to enforce the judgment against
Beaumont's successor in interest, Saenger, in TX court. TX court refused to give full faith and credit to the c-claim judgment,
accepting Saenger's arg that Beaumont ∅ sufficiently present in CA to justify CA's exercise of IPJ.
Holding: SC held CA court properly exercised IPJ over Saenger's predecessor in interest, who had impliedly consented to such an
exercise of juris by filing an action in the CA court. "The D, by itself originally appealing to the CA court for justice, impliedly
submitted itself to the IPJ of the court for purposes of any c-claims or x-claims which might arise…" The court determined that
"once a party has voluntarily submitted himself to the judicial processes of the state, there is nothing inequitable in treating him
as if he is there for purposes of c-claim as well as for purposes of his own complaint."
viii.
ix. U.S. Const. art. IV and amend. XIV
x. CB 63-72.
b. MODERN PERSONAL JURISDICTION – MINIMUM CONTACTS ANALYSIS.
i. CB 73-83.
c. SPECIFIC JURISDICTION
i. Rule: FRCP 4(k)(1)(A)
ii.
Due Process constraints on the exercise of long-arm statutes
1. Franchise Contracts
a. Burger King v. Rudzewicz [] ()
i.
Facts: Rudzewics (D), a Michigan resident, entered into a 20-yr franchise contract with Burger King (P), a FL
corp, to operate a restaurant in Michigan. D fell behind his monthly payments and P brought a diversity
action in federal district court in FL, alleging D breached his franchise obligations and requesting damages
and injunctive relief. D challenged DCt's jurisdiction, arguing he had no contacts w/ FL that would justify
forcing him to defend a suit there.
1. DCt found it had jurisdiction pursuant to FL's long-arm statute, which extends jurisdiction to
persons who breach contracts in FL by failing to perform acts required by the contract.
2.
ii.
iii.
iv.
CtApp disagreed, holding that "jurisdiction under these circumstances would offend
fundamental fairness, which is the touchstone of the process." SC granted cert.
Issue: Do franchise contracts subject the nonresident franchisee, who has purposefully directed his
activities at the forum, to the personal jurisdiction of the forum court?
Holding: Yes. Judgment reversed.
1. DP clause mandates that D have "fair warning" that his activities may subject him to a court's
jurisdiction. This requirement is satisfied when a nonresident D purposefully directs his
activities toward the forum state.
2. An individual's contract w/ a forum resident is insufficient by itself to establish minimum
contacts w/ the forum state. Rather, all the exigent circumstances surrounding the contract,
including but not limited to prior negotiations, contemplated future actions, the terms of the C
and the parties' actual course of dealing, must be examined to determine whether the D
purposefully established minimum contacts w/ the forum.
3. Here, D deliberately entered into a franchise C that had substantial connections with the forum
state, FL. The C provided that all relevant notices and payments had to be sent to FL, all
agreements were to be made and enforced there, and all disputes were to be governed by FL
law. D thus knew he was affiliating himself w/ an enterprise based primarily in FL and
consequently could foresee that his refusal to make the required payments would cause injury
in FL. Consequently, the DCt's exercise of jurisdiction pursuant to FL's long-arm statute ∅
violate DP.
Dissent (Stevens, White): It is fundamentally unfair for D to have to defend a suit based on the franchise C
in FL. He maintained no place of business there, had no employees there, and ∅ licensed to do business
there. The CtApp correctly found that nothing in the course of negotiations gave D sufficient reason to
expect to defend a franchise suit outside of Michigan. Jurisdiction under these circumstances would
offend fundamental fairness, which is the touchstone of DP.
b.
2.
The majority emphasized that when a Q of PJ arises out of a business relationship, underlying realities of
the relationship should be examined to determine whether jurisdiction exists. D must then demonstrate
that by defending the action he is subjecting himself to unreasonable burdens that cannot be relieved by
other means.
Jurisdiction unreasonable despite minimum contacts
a. Asahi Metal Industry v. Superior Court [] ()
i.
ii.
iii.
Facts: Gary Zurcher was severely injured and his wife killed in a motorcycle accident in CA, allegedly
caused by the explosion of the cycle's defective rear tire. There he sued, among others, Chen Shin, the
Taiwanese manufacturer of the tube. Cheng Shin (P) impleaded Asahi (D), the Japanese manufacturer of
the tube's valve assembly. The main claims were settled, leaving only P's indemnity claim against D. D
moved to quash service.
1. D made its valves in Japan and sold some of them to P in Taiwan, where P made its tubes using
valves made by D or other suppliers and then sold them throughout the world, with P selling a
fair number in CA. D had no other contacts w/ CA.
2. The SC of CA ultimately upheld personal jurisdiction as being w/i the state's long arm statute
and consistent with DP. D appeals.
Issue: Is CA's exercise of PJ consistent with constitutional DP?
Holding: No. Judgment reversed (plurality opinion).
1. CA exercise of jurisdiction would be unreasonable and unfair, considering the severe burdens on
D of defending in a foreign legal system, the slight interest of P and CA in the exercise of
jurisdiction, and the international interests in not subjecting this alien corporation to an
indemnification offshoot of a product liability action in American court.
iv.
v.
vi.
Plurality (O'Connor, Rehnquist, Powell, Scalia): O'Connor asserted that "a finding of minimum contacts
must come about by an action of the D purposefully directed toward the forum." She maintained that
Asahi ∅ purposefully avail itself by the CA market.
Concurrence (Brennan, White, Marshall, Blackmun): minimum contacts existed b/c Asahi placed its
product into the stream of commerce and was aware that its product was regularly sold in the forum state.
Concurrence (Stevens, White, Blackmun): a determination of minimum contacts was not necessary to
conclude that CA's exercise over Asahi would be unreasonable and unfair.
iii.
iv.
d. GENERAL JURISDICTION & STATE LONG ARM STATUTES
i.
"Continuous and systematic" contacts required where cause of action arises elsewhere-1. Helicopteros Nacionales de Colombia, S.A. v. Hall [466 US 408 (1984)] (p128)
a.
b.
c.
d.
Facts: 4 US citizens died in a helicopter crash in Peru. The survivors and representatives of the US decedents (Ps)
brought these wrongful death actions in TX state court against Helicol, the owner of the helicopter (D);
Consorcio/WSH, a Peruvian consortium with headquarters in Houston, TX, which employed decedents to work on
construction of a pipeline in Peru; and Bell Helicopter Company, which sold and provided maintenance and instruction
for D's helicopters out of its Fort Worth, TX office.
i. Ps are ∅ residents of TX.
ii. D is a Colombian corporation that ∅ have a place of business in TX and has never been licensed to do
business in the state. D's only contacts w/ TX consisted of:
1. its CEO going to Houston for a contract-negotiating session;
2. accepting into its NY bank account checks drawn on a Houston bank;
3. purchasing helicopters, equipment, and training services from Bell Helicopter for substantial
sums of money; and
4. sending personnel to Bell's Fort Worth facilities for training.
iii. Significantly, all parties agree that P's wrongful death action did not "arise out of" and is not related to D's
TX activities.
iv. TX trial court, over D's special appearance, ruled that it had PJ, and a jury returned a verdict in favor of Ps.
The higher TX courts affirmed and D appeals.
Issue: Do D's TX activities constitute "continuous and systematic contacts w/ TX so that a TX court may exercise IPJ w/
respect to a c/a that ∅ arise out of or relate to D's activities w/i TX (i.e., "general in personal jurisdiction")?
Holding (Blackmun): No. Judgment reversed.
i. A court may exercise what has been called "limited" or "specific" IPJ "when a controversy is related to or
'arises out of' a D's contacts w/ the forum…" [International Shoe v. Washington]
ii. "Even when the c/a does not arise out of or relate to the foreign corporation's activities in the forum
state," a court may exercise IPJ if D corporation's in-state activities are conducted on a continuous and
systematic basis, not occasionally or irregularly. [Perkins v. Benguet Consolidated Mining Co., 342 US 437
(1952)]
iii. Purchases and related trips ("even if occurring at regular intervals"), standing alone, are not a sufficient
basis for IPJ. [Rosenberg Bros. & Co. v. Curtis Brown Co., 342 US 437 (1923)]
iv. Applying these rules to the present case, it cannot be said that D's TX activities were conducted on a
continuous and systematic basis. Even if it could be said that they constituted continuous and systematic
activity, they amounted to mere purchases and related trips, which is not enough to warrant the exercise
of IPJ.
Dissent (Brennan): By relying on Rosenberg Bros.'s narrow view of IPJ, which ∅ comport with International Shoe's
subsequent expansion of PJ or with "the fundamental transformation of our national economy" that has taken place
since 1923, and by refusing to consider any distinction b/w controversies that "relate to" a D's contacts w/ the forum
state and c/a that "arise out of" such contacts, the Court may be placing severe limitations on the type and amount of
contacts that will satisfy the constitutional minimum.
ii.
iii. a
e. JURISDICTION BASED ON POWER OVER PROPERTY
i. In Rem and Quasi In Rem Jurisdiction
1. In rem -- A state through its courts may render a valid judgment affecting the interests of all persons in a thing
ii.
iii.
where it has jurisdiction over the thing, even though it may not have jurisdiction over the persons whose interests
in the thing are affected. Examples:
a. A court of admiralty affecting the interests of all persons in a vessel subject to the jurisdiction of the
state;
b. A statutory proceeding brought to register title to certain land and that is designed to affect the interests
of all persons in the land; and
c. A statutory proceeding for the forfeiture to the gov of (and extinguishment of all the interests of all
parties in) a thing used in violation of the revenue (or other) laws.
2. Quasi in rem -- The state may render, through its courts, a valid judgment affecting the interests of a particular
person in a thing when it has jurisdiction over the thing even though it may not have PJ over the person whose
interests are affected. 2 types of proceedings:
a. Preexisting interest: P may seek to establish a preexisting interest in the thing and extinguish or
establish the nonexistence of interests of other particular persons in the thing, such as actions to quiet
title to land, and actions to foreclose mortgages.
b. Enforcement of a personal claim: P may seek to enforce a personal claim against D by applying the thing
owned by D to the satisfaction of the claim (such as by attachment, garnishment, or creditor's bill) in
actions to recover damages for breach of contract or for tort. In all of the above situations, the state
need have no jurisdiction over the person (D) as long as it has jurisdiction over the thing belonging to D,
or over a person who is in possession of a thing belonging to the D or is indebted or under a duty to D.
Nature of a Quasi In Rem Proceeding.
1. Pennington v. Fourth National Bank (p145) → "Garnishment or foreign attachment is a proceeding QIR… The only
essentials to the exercise of the state's power are:
a. presence of the res within its borders,
b. its seizure at the commencement of proceedings, and
c. the opportunity of the owner to be heard."
Debt Situs and the Nature of the Foreign Debtor's State Contacts.
1. Harris v. Balk (p145):
a.
Facts: Harris, a resident of NC, owed Balk, also resident of NC. Balk owed a sum to Epstein, resident of MD.
i. While Harris was in MD, Epstein attached the debt Harris owed to Balk. Judgment was entered against
Harris, and he duly paid the sum to Epstein.
ii. Later, Balk brought suit against Harris to collect the debt Harris owed to Balk, and Harris pleaded in bar of
recovery the MD judgment and his payment thereof, and it was conclusive against Balk. The trial court and
state SC ruled that the MD judgment ∅ a bar to recovery, b/c the MD court had no PJ against Harris, since
b.
iv.
he was only in MD temporarily and the situs of the debt (the thing) was in NC and ∅ subject to the
jurisdiction of MD's courts.
Holding: The SC held that the obligation of the debtor to pay his debt clings to and accompanies him wherever he
goes. He is as much bound to pay his debt in a foreign state when therein sued upon his obligation by his creditor as
he was in the state where the debt was contracted.
1. A creditor (A) has a right to sue in the state where the debtor (B) may be found, even if but
temporarily there.
2. Upon that right is built the further right of another creditor (C) to attach a debt owing by the
garnishee (B) to his creditor (A).
ii. Although a garnishee has a duty to give his creditor notice, so that the creditor may have an opportunity to
protect himself, the D here had no notice of the attachment and a year and a day in which to recover his
debt. Harris's claim was therefore barred.
Reconciliation.
1. General. The classification of jurisdiction as IPJ, IRJ, and QIRJ has been K'd as impractical, especially since
International Shoe. The law remains somewhat tangled in traditional notions, but some attempts have been made
toward clarification.
2. Modern interpretation of minimum contacts-a. Shaffer v. Heitner [433 US 186 (1977)] (p)
i.
ii.
iii.
iv.
v.
Facts: Heitner (P), owner of 1 share of stock in Greyhound Corporation, a DE corporation w/ its principal
place of business in Phoenix, AZ, filed a shareholder's derivative suit against Greyhound and 28 officers and
directors (Ds).
1. P sued in DE although not a DE resident.
2. The substantive transactions involved occurred in OR.
3. Pursuant to a DE statute that allows a state court to take jurisdiction of a lawsuit by
sequestering any property of D that happens to be in the state, P filed a motion for an order of
sequestration, which was granted.
4. Based on the "statutory presence" of all stock in DE corporations, shares of several Ds were
seized by placing "stop transfer" orders on the books of Greyhound. Ds challenged the DE
courts' jurisdiction, but the DE SC upheld the lower court. Ds appeal.
Issue: Does a "minimum contacts" standard apply to the exercise of IRJ by a state?
Holding: Yes. Judgment reversed.
1. The concept of IPJ has been greatly expanded since Pennoyer. Although IRJ principles have not
changed so dramatically, this court has recognized that an adverse judgment IR directly affects
the property owner by divesting him of his rights in the property before the court. Pennoyer
failed to recognize this and is no longer a secure foundation.
2. The term "in rem jurisdiction" is merely a customary way to refer to jurisdiction over the
interests of a person in a thing. The basis for it ought to be sufficient to justify jurisdiction over
the interests of persons in a thing. Such basis is to be measured by the International Shoe
minimum contacts standard.
3. The sole basis for DE's jurisdiction here is the statutory presence of Ds' stock in the state. The
stock is totally unrelated to the c/a. Since P has failed to allege any of the types of contacts
required by the constitutional minimum contacts standard, DE cannot exercise jurisdiction over
the case.
Concurrence (Powell): The concept of QIRJ w/o minimum contacts might still be appropriate in the case of
real property.
Concurrence (Stevens): The DE statute is unconstitutional on its face.
vi.
3.
4.
5.
Concurrence and Dissent (Brennan): While the minimum contacts standard is appropriate to state
jurisdiction cases, the Court goes too far in deciding that there were insufficient contacts here. The Court
in effect has issued an advisory opinion. It should be left up to the state to determine whether it wished to
base jurisdiction on Ds' voluntary association w/ the state through its corporation laws.
Attachment of insurance policies. Prior to Shaffer, some courts had exercised jurisdiction over a D by attaching
the D's insurance policy, in effect "seizing" the insurance company's obligation to defend the D policyholder.
a. Seider v. Roth -- Involved an auto accident, the court upheld the attachment of D's insurer's contractual
obligation. The insurer and D were Canadian, but the insurer did business in NY, where the attachment
papers were served. The attachment was upheld on the grounds that the contractual obligation
constituted an attachable debt.
b. The SC rejected this type of QIRJ in Rush v. Savchuk (p158) for lack of minimum contacts.
Seizure of property related to the claim: in rem jurisdiction. Shaffer makes it clear that IRJ, in which P and D claim
an interest in the property that is brought before the court by attachment, is largely unaffected by the minimum
contacts rule.
a. Thus, typical in rem actions (e.g., actions to clear title, foreclose liens, or recover possesison) are still
permissible.
b. The reason is that, as the court in Shaffer stated, "in such cases the D's claim to property located in the
state would normally indicate that he expected to benefit from the state's protection of his interest."
c. Reasoning has clear relevancy to tangible property (real or personal) b/c the situs of such property can
be fixed w/i the forum state w/ a degree of certainty. On the other hand, it's more difficult to fix the
situs of intangible property (e.g., a debt) in a way that could clearly indicate that the D is receiving
benefits and protections from the forum state.
d. The rule that "a debt follows the debtor" may be too abstract to establish the requisite nexus b/w the D
and forum state in every case. Thus, P may have to establish more direct ties/contacts b/w D and forum
state in cases involving intangible property. It might, therefore, be correct to conclude that while the
minimum contacts rule has not affected in rem actions involving tangible property, it might affect in rem
actions involving intangible property.
Divorce jurisdiction. Courts classify a divorce proceeding as in rem, the marital relationship being the property
and the property being located wherever the husband/wife might be domiciled. An action to dissolve a marriage,
therefore, can be brought in either H or W's state.
a. However, issues of spousal and child support are classified as IPJ and, hence, must be litigated in a state
in which a court can exercise IPJ over D. This is the principle of divisible divorce. B/c of this, it is best for
P to sue where PJ over D can be established if spousal/child support is an issue in the divorce proceeding.
v.
vi.
f. JURISDICTION BASED ON PRESENCE
i. CB 160-171.
ii.
Transient Jurisdiction-1. Burnham v. Superior Court (p160)
a.
b.
c.
d.
e.
f.
2.
3.
Facts: Francie Burnham (P) brought suit for divorce in CA state court against her husband, Dennis Burnham (D), from
whom she had been separated 18 mos. D, resident of NJ, was s/p at P's home in CA. At the time of service, D was
visiting S. CA on business and had travelled to N. CA to visit his children. He took his older child to San Fran for the
weekend and was s/p upon returning the child to P's home. D returned to NJ, but later made a special appearance in
CA trial court to file a motion to quash service. The motion was denied, and the CA appellate courts affirmed. D
appeals.
Issue: Is it inconsistent w/ DP for CA to exercise PJ over a nonresident who was personally s/p for a claim that was
unrelated to his in-state activities while temporarily in CA? In other words, is transient jurisdiction constitutional?
Holding: Yes. Judgment affirmed (plurality opinion).
i. PJ based on service on a nonresident D while D is in the state comports w/ traditional notions of fair play
and substantial justice.
Concurrence (White): Transient jurisdiction is so widely accepted that I could not possibly find that it denies DP.
Concurrence (Brennan, Marshall, Blackmun, O'Connor): Minimum contacts are established b/c a transient D actually
avails himself of significant benefits provided by the state. His health/safety are guaranteed by the state's
fire/police/emergency services.
i. Thus, the transient rule is consistent w/ reasonable expectations and is entitled to a strong presumption
that it comports w/ DP. In addition, the exercise of transient jurisdiction is reasonable b/c modern
transportation and communications have made it much less burdensome for a party sued to defend
himself. And any burdens that do arise can be ameliorated by a variety of procedural devices.
Concurrence (Stevens): Scalia and Brennan's opinions are unnecessarily broad. For me, it is sufficient to note that
the historical ev and consensus identified by Scalia, the considerations of fairness identified by Brennan, and the
common sense displayed by White, all combine to demonstrate that this is, indeed, a very easy case.
Notes: While the decision upholding TJ was unanimous, the reasoning was not.
a. Scalia, Rehnquist, Kennedy, White: jurisdiction based on physical presence alone constitutes DP b/c it is
one of the continuing traditions of our legal system that defines the DP standard of "traditional notions
of fair play and substantial justice."
i. TJ comports w/ traditional notions of fair play and substantial justice simply b/c it has been
consistently upheld since the 19th century and has been supported by the consensus of state
court judges.
b. Brennan, Marshall, Blackmun, O'Connor: TJ passes the fairness test b/c it satisfies both the minimum
contacts and reasonableness subtests.
Quill Corp. v. ND → DP ∅ require physical presence for imposition of a duty to collect a se tax.
iii.
g. JURISDICTION BASED ON CONSENT
i. Fed. R. Civ. P. 12(h)(1).
ii. OTHER BASIS OF JURISDICTION--CONSENT & NECESSITY
1. Consent
a. Party agreements concerning jurisdiction.
i. Consent in advance of litigation. Since Pennoyer v. Neff, it has always been permissible for a P
and D to consent to J in a particular forum state in advance of litigation, provided that there is
no "overweening" on the part of the stronger party. M/S Bremen v. Zapata Off-Shore Co.
(p173)
1. → Forum clause says London; P sued in FL. SCOTUS says NO! Bad Plaintiff!
b. Involuntary waiver. When D agrees in writing to submit to a court's IPJ, she in effect gives up the right
to insist that minimum contacts be established before a court can render a valid judgment against her.
i. In addition to such a voluntary waiver of minimum contacts, there are circumstances under
which D may involuntarily waive this constitutional right. One such circumstance involves D's
failure to comply w/ a court's discovery order designed to ascertain whether the court has PJ.
ii. Preliminary note on discovery. Though normally lused to ascertain facts relating to the
substantive aspect of the lawsuit, it is sometimes used to unearth facts about a jurisdictional
issue as well. Sometimes the court has to rely upon discovery to obtain facts on which to
determine the existence of minimum contacts.
iii. Discovery sanctions. If a party disobeys a court's discovery order, the FRCP allows the court to
impose sanctions against that party. One severe sanction is in FRCP 37(b)--basically says the
facts that were the SM of an attempted discovery will be presumed to be contrary to the
interests of the party who disobeyed the discover order.
1. FRCP 37(b) raises the Q of whether a "court can say to the party disobeying a
discovery order (on the ground that there is no authority for the order, b/c minimum
contacts is lacking) that minimum contacts will be presumed.
iv. Rule 37 and waiver.
1. Insurance Corp of Ireland v. Compaignie des Bauxites de Guinee (p171)
a.
b.
2.
3.
Facts: A group of foreign insurance companies contested the exercise of PJ over
them by a Penn federal district court. The companies refused to comply with courtbacked discovery requests designed to ascertain jurisdictional facts on the ground
that the requests were too burdensome. DCt entered an order finding PJ b/c the
companies failed to comply w/ its order after fair warning. The companies appealed.
Holding: SC held the sanction imposed by the DCt pursuant to FRCP 37(b)(2)(a) was
not an abuse of discretion under the facts of this case. The Court reasoned a
theoretical distinction exists b/w SMJ and PJ. Unlike SMJ, the requirement of PJ may
be intentionally waived or the D may, for various reasons, be estopped from raising it
as an issue.
i. This is b/c PJ ∅ implicate "the sovereign power of the court," a
constitutional power that cannot be conferred upon a court by consent,
waiver, or estoppel. In other words, PJ, unlike, SMJ, ∅ flow from "Article
III, but the DP Clause" (which "itself makes no mention of federalism
concerns") and, hence, "represents a restriction on judicial power not as a
matter of sovereignty, but as a matter of individual liberty.
Necessity. In some instances, the needs of society have been found to prevail over the requirements of the
"minimum contacts" standard, e.g., actions to quiet title where some o fthe potential claim holders are unknown
or lack the requisite minimum contacts w/ the forum. Similarly, situations in which no one forum is capable of
exercising J over all interested litigants may give rise to a necessity jurisdiction. Mullane v. Central Hanover Bank &
Trust Co.
Foreign corp that registers as a condition of doing business in a state is regarded as having consented to suit in the
courts of that state, even as to actions unconnected w/ the corp's activities in the forum.
a.
4.
iii.
Rules
1.
2.
3.
4.
5.
6.
BUT see: Ratliff v. Cooper Labs (p172)--No PJ over foreign corp that qualified to do business in SC and
regularly setn salesman into SC--"applying for the privilege of doing business is one thing, but the actual
exercise of that privilege is another… The principles of due process require a firmer foundation than
mere compliance w/ state domestication statutes."
Carnival Cruise Lines v. Shute (p173)--Forum clause on cruise ship ticket
a. SCOTUS says reasonable forum clause in a form contract might be ok because:
i. Cruise line has special interest in limiting the fora where it can be sued.
ii. Establishing it ex-ante:
1. Dispells confusion about where suits must be brought/defended
2. Spares litigants expense/time of pretrial motions to determine correct forum
3. Conserves judicial resources
iii. Passengers who purchase tickets like this benefit from reduced fares from the savings the
cruise line gets from limiting its fora.
12(h)(1)--a D who fails to raise an objection to PJ in the answer or in an initial motion under FRCP 12 is
subsequently precluded from raising the issue.
4(k)(1)(A)--general service rule that FCt may use when a fed statute ∅ otherwise authorize J. Under the Rule, the
FCt "piggy-backs" on the long-arm statute of the state in which it sits.
4(k)(1)(B)--special service rule that applies to parties joined under FRCP 14 and 19 and allows for service "100
miles from the place from which the summons issues."
4(k)(1)(C)--Special service rule that applies only to a D who is subject to federal interpleader J, which allows for
nationwide s/p.
4(k)(1)(D)--service rule that the FCt may use when a federal statute authorizes J.
4(k)(2)--limited federal long-arm provision that applies to Ds against whom "claims arising under fed law" are
asserted when there is no applicable fed process provision, and who are not amenable to suit in any one of the 50
states.
iv.
h. JURISDICTIONAL REACH OF FEDERAL DISTRICT COURTS
i. Fed. R. Civ. P. 4(k).
ii. LONG-ARM JURISDICTION IN THE FEDERAL COURTS
1. In General. A number of restrictions are imposed by federal law or FRCP on the exercise of PJ by the federal
courts. [See FRCP 4(f)] Note, however, that Congress has, in particular statutes and regulations, authorized
nationwide (or even worldwide) service of process. [See Clayton Act, 15 U.S.C. § 22; Securities Exchange Act of
1934, 15 USC §78(aa).
a. Federal act. Omni Capital International v. Rudolf Wolff & Co. (p177)--involved an action brought under
the Commodity Exchange Act, a federal act which is silent on s/p. The SC held that a federal court ∅ have
authorization under FRCP 4 to serve process on and exercise PJ over a foreign D where the requirements
of the state long arm statute have not been met. The Court held that a nationwide service provision was
not implicit in the Act, and thus, the federal act could not be used as a basis for PJ when the
requirements of the state's long arm statute had not been met.
b. FRCP 4(k)(2). Was promulgated partially in response to the SC's decision in Omni. Allows federal courts
to exercise J in situations where the federal claims are asserted against a D, but the D is not subject to
the J of any single state, as long as the US Constitution would permit J. The Rule thus operates as a
limited federal long arm provision.
iii. CB 176-179.
V.
JOINDER
a.
Rules:
i. FRCP 13 → Counterclaim and Cross-Claim.
ii. FRCP 20 → Permissive Joinder of parties.
1. Rules 18 and 13 → authorizes parties, once properly joined, to assert additional claims against opposing parties.
iii. FRCP 19 → Required Joinder of Parties.
iv. FRCP 14 → 3rd-party Practice.
v. FRCP 18 → Joinder of Claims and Remedies.
b. INTRODUCTION TO BASIC RULES OF JOINDER
i. Traditional Rule: “P is master of his claim.” P decides parties to the suit and which claims will be asserted in the action.
ii. FRCP 20(a)
1. Requirements to join: authorizes Ps to sue together (in federal court) if:
a. They asserted claims arising out of the same transaction or occurrence (or series of
transactions/occurrences); AND
b. Their claims against D(s) will involve a common Q of law or fact.
2. No mandatory joinder. ∅ require parties to be joined whenever the criteria in the rule are met. Joinder decision is
left to the Ps. If they sue some but not all Ds in one action, they may sue the others in a separate action or never
at all. Rule 20 has permissive language.
a. Plaintiff Autonomy Rule: If they ∅ join in a suit by other Ps against D, they are free to pursue their own
claims in separate suits. If A prefers federal court, she may preserve the option by ∅ joining as a co-P
with B.
b. FRCP 19 Exception: joinder of persons under certain limited circumstances.
3. ∅ require same injuries or joint interest. P “need not be interested in obtaining… all the relief demanded.”
4. Even if not sure which D. So long as both requirements met, 20(a) allows joinder even though relief is sought
against the Ds “in the alternative.”
iii. FRCP 20 allows P to sue multiple Ds in a single action if the same criteria are met.
iv. When D Joins Multiple Parties, Not P.
1.
v.
Rule 20(a) only applies to joinder by original Ps. Language confirms this: 20(a) speaks of “Ps” and “Ds” rather than
“parties claiming a right to relief” or similarly general language.
2. Rule 14(a) allows joinder in much more limited circumstances than 20(a).
3. Rules 18 and 13 apply more broadly.
Justification—
1. More efficient to litigate them in a combined action.
2. Avoids the possibility of inconsistent judgments on the same issue.
c. COUNTERCLAIMS AND CROSS-CLAIMS UNDER FRCP 13
i. Rule 13—authorizes a defending party in a suit to assert claims back against a party who has claimed against him.
1. 2 types of Counterclaims:
a. Compulsory [FRCP 13(a)]—c-claim arises from same transaction or occurrence as the claim against him.
Use it or lose it—must assert it in the original action.
b. Permissive [FRCP 13(b)]—unrelated to the original claim.
i. Allows a D (once brought before the court) to settle all his claims against an opponent w/o
having to file a separate lawsuit.
ii. Court may order separate trial. Can’t be justified on efficiency grounds since it involves
different events than the main claim, and the court will almost certainly order a separate trial
of the permissive c-claim. [See FRCP 42(b)]
c. (a) and (b) both authorize “a pleading” to assert a claim against an “opposing party.” (not just the
original D)
2. Cross-claims [FRCP 13(g)]
a. asserted against a co-party (someone on the same side of the v).
b. Must be related--arising out of the same transaction/occurrence as the main claim.
i. BUT--Once a proper x-claim has been asserted, may add on any other claims against them
[18(a)]
ii. Includes things like:
1. recovery for own injuries [13(g), 1st sentence (same trans/occ)]
2. indemnification for damages one may have to pay to P [see 13(g), 2nd sentence]
3. Addition of parties [FRCP 13(h)] to a c-claim/x-claim→ Rules 19 and 20.
d. JOINDER OF CLAIMS UNDER FRCP 18(A)
i. FRCP 18(a) provides that a party seeking relief from an opposing party may join w/ his original claim any additional claims he
has against that opposing party.
1. No common transaction/occurrence requirement like FRCP 20(a)
2. Authorizes “a pleader” to assert as many claims as she has against an opponent.
a. Applies not only to original P. Applies to any party seeking relief against another party, whether a cclaim, x-claim, or 3rd-party-claim.
ii. Analyze SMJ separately. Just b/c the Rules authorize joinder of multiple claims, or against multiple parties, does NOT confer
SMJ on the court to hear them. [FRCP 82]
iii. 18(a) Claim Assertion is Optional. It’s permissive—P may assert unrelated claims against D under 18(a), but ∅ obligated to
do so.
1.
BUT Res Judicata is NOT. Though Rule 18 ∅ force P to join all claims against D in a single action, res judicata will
(at least under federal res judicata principles) if the claims arise out of a single transaction/occurrence.
a. 18(a) and res judicata both allow separate suits if claims asserted are completely unrelated.
e. JOINDER OF PARTIES UNDER FRCP 14: IMPLEADER, WHUT.
i. FRCP 14 gives D a limited right to implead (bring into the suit) new parties against whom she has claims related to the main
action.
1. D may bring in someone not yet a party to the suit, who may be liable to her (D) for all or part of any recovery P
obtains on the main claim.
ii. Impleaded party may be liable to D for “all or part” of P’s claim against D.
1. Common ex of proper impleader claims:
a. implead 3rd-party for contribution—to obtain judgment that 3rd-party is liable to pay the main D part of
the damages she is ordered to pay P.
b. claim for indemnity against an insurer—D seeks to pass on all of his liability.
2. Joint or Alternate Liability—as long as FRCP 14 satisfied, D may implead multiple 3rd party Ds, claiming either joint
or alternate liability (where several may be liable to him)
iii. ∅ allow Ds to suggest new targets for P. Distinguish impleader from cases where D contends another person is liable
directly to P but not D. Rule 14 allows Ds to bring in targets of their own if they may be able to pass on liability to the
impleaded party.
iv. 3rd-party D’s liability depends on outcome of main claim. If P ∅ recover, D has no right of contribution against 3rd-party.
1. DEFENSES. Impleaded party may escape liability by defeating EITHER P’s original claim OR D’s derivative claim
against her. Can assert defenses to both: (Gp255)
a. 14(a)(4th sentence…C??)—defenses to 3rd party claim
b. 14(a)(2)(5th sentence… D??)—MAY assert defenses to P’s claim against the original D
v.
vi.
vii.
viii.
Pleading, service, and other purposes.
1. D, as “3rd party P,” must file a 3rd party complaint against impleaded “3rd party D.”
a. Complaint must comply w/ pleading requirements of FRCP 8-11, and must be served under FRCP 4.
2. 3rd party D must respond under FRCP 12, and has the same options to answer or move to dismiss.
3. 3rd party D may also file c-claims against 3rd party P and may implead further parties under FRCP 14.
4. P and 3rd-party D may assert claims against each other if they arise out of the same trans/occ as the main claim.
[FRCP 14, sixth and seventh sentences]
5. Automatic Impleader Provision: D may implead 3rd party w/i 10 days of answering the complaint, w/o obtaining
leave of court. [FRCP 14]
a. Suggests that the court must hear the 3rd party claim if filed w/i 10 days. HOWEVER, cases establish that
it’s always w/i the court’s discretion to refuse to entertain the impleader claim.
i. Pro impleader factors:
1. Efficiency of hearing related claims together
2. Avoidance of repeated suits or inconsistent judgments.
ii. Anti-impleader factors:
1. Undue delay in seeking it
2. Complication of the issues in the main action
3. Potential prejudice to P from impleading a sympathetic 3rd party
b. Separation of suits. Sometimes, court can address these concerns by allowing impleader but separating
main suit and 3rd party suit for trial [FRCP 14, 8th sentence]
Jurisdiction & Venue.
1. J: Impleading 3rd-party D ∅ affect J over original claim. (If it did, allows D to destroy diversity thru impleading)
a. BUT! Must be some basis for SMJ over impleader claim.
i. Personal J? (min ctx?)
b. If no Diversity J, usually will be Supp J over a proper impleader claim under § 1367(a).
2. V: 3rd party disregarded in determining proper venue.
Additional claims under 18(a)—look to FRCP 14 first. 3rd party P must FIRST assert a claim complying with FRCP 14; 18(a)
alone ∅ allow 3rd-p P to bring 3rd-p D into suit. FRCP 18 allows 3pP to add related (or unrelated) claims once he has properly
impleaded 3pD under FRCP 14.
Impleader ∅ Mandatory. D ∅ forced to implead 3rdp under Rule 14, even if they may be liable to reimburse D for all or part
of P’s claim. “MAY” implead, not “MUST”--∅ barred from suing in a separate action to recover indemnification for the
judgment he paid.
VI. FEDERAL APPELLATE JURISDICTION
a.
Rules:
i.
ii.
iii.
iv.
v.
vi.
vii.
§ 1251: Original jurisdiction.
§ 1254: Courts of appeals; certiorari; appeal; certified questions.
§ 1257: State courts; appeal; certiorari.
§ 1291: Final decisions of district courts.
§ 1292: Interlocutory decisions.
§ 1651: Writs. (“All Writs Act”)
FRCP 54: Judgments; costs.
viii.
b.
FRCP 58(a): Entry of judgment—separate document.
THE PRINCIPAL OF FINALITY
i. Basic Concept.
1. From earliest CL, basic maxim of app review of trial ct decisions → only final decisions of the trial ct are reviewable
for error--interlocutory decisions, even if crucial to the litigation, were unreviewable at CL.
2. Modern law--schizophrenic attitude toward this CL maxim.
a. Values of the principle of finality in speeding decisions upon the merits free from burdensome
interlocutory appeal is recognized.
b. Desire to correct obviously erroneous decisions upon interlocutory motions made to the trial ct has been
felt, since such interlocutory decisions may shape the course of trial upon the merits.
3. Partial Summary Judgment
a. Liberty Mutual Insurance Co. v. Wetzel (p)
i.
ii.
iii.
Facts: Wetzel (P), an employee of D, filed a complaint in fed dist ct alleging D's employee insurance
benefits and maternity leave regulations discriminated against women employees in violation of Title VII of
the CRA of 1964.
1. P sought injunctive relief, damages, costs, and attorneys' fees. The DCt granted P's motion for
partial SJ, finding D's insurance and maternity leave policies violtaed fed law. Also, the ct
directed that final judgment be entered for P upon this claim since it determined that there was
no just reason for delay.
2. CtApp held that it had jurisdiction over D's appeal based on 28 USC § 1291, which grants CtApps
jurisdiction of appeals from all "final decisions" of fed Dcts.
3. The AppCt then affirmed the judgment of the Dct. The SC granted cert.
Issue: Was the Dct's order a final, appealable order under § 1291 or § 1292?
Holding: No. Judgment reversed.
1. § 1291 grants fed CtApps jurisdiction in all "final decisions" by the federal DCts. A fed CtApp is
obligated to question its jurisdiction even if the parties fail to raise the issue.
2. Even assuming that the DCt's order was a declaratory judgment on the issue of liability, it left
unresolved the issue of P's remedies and thus was ∅ a final, appealable order.
3. FRCP 54(b) ∅ apply to a single claim action but is expressly limited to multiple claim actions in
which 1+ but less than all of the multiple claims have finally been decided. A complaint
asserting only 1 legal right, even if seeking multiple remedies for the alleged violation of that
right, states a single claim of relief. Although the DCt made the recital required by FRCP 54(b)-that final judgment be entered on the issue of liability and that there was no reason for delay-the ct's order ∅ appealable b/c P set forth only 1 claim. Rather, the DCt's grant of partial SJ
limited to the issue of P's liability was interlocutory, and b/c damages and other relief remained
to be resolved, it was not final w/i the meaning of § 1291. The only possible authorization for
appeal would've been § 1292.
4. Notwithstanding, the order ∅ appealable pursuant to § 1292’s interlocutory appeals provisions.
a.
The order was an interlocutory order denying an injunction to a D and thus §
1292(a)(1) (which only applies whne a P’s request for injunction was denied) was ∅
available.
b. Since it appears P ∅ apply to CtApp for leave to appeal w/i 10 days, the order ∅
appealable pursuant to § 1292(b) as involving a controlling Q of law to which there
was substantial ground for difference of opinion. Moreover, there was no assurance
that the CtApp would’ve exercised its discretion under § 1292(b).
iv.
3.
Comment: The “final judgment” rule is intended to prevent the costs and delays that would
occur if an appeal could be taken from every immediate order or ruling made by the trial court.
Decisions Involving Collateral Orders
a. Cohen v. Beneficial Industrial Loan Corp. (p1069)
b. Under Seal v. Under Seal
c. Lauro Lines S.R.L. v. Chasser
d. Van Cauwenberghe v. Biard
c.
CB 1059-1062; 1069-1073.
a.
CB 183-195.
VII. NOTICE
VIII.
VENUE, TRANSFER, AND FORUM NON CONVENIENS
a. VENUE
i. 28 U.S.C. §§ 1391, 1404, 1406, 1407, 1441.
ii. CB 329-333; 341-348.
b. FORUM NON CONVENIENS
i. DOCTRINE OF FORUM NON CONVENIENS (inconvenient forum)--a doctrine of discretionary abstention:
1. Assuming a court has proper J and venue over a c/a, that court retains the power to refuse to hear the case
anyway if justice would be better served were it to be tried in another venue.
a. Standard practice in federal courts and about ½ of state court systems.
ii.
FACTORS TO CONSIDER IN DECIDING A MOTION UPON FNC:
1. Gulf Oil Corp. v. Gilbert (p348)
a.
b.
"Court may resist imposition upon its J even when J is authorized by" statute.
i. Misuse of venue = Sometimes a P is tempted to force trial at a place very inconvenient to D, even at some
inconvenience to herself.
ii. Many states countered this by investing in courts discretion to change the place of trial on various grounds
(convenience of witnesses; ends of justice).
iii. Federal law contains no such express criteria to guide the DCt in exercising its power.
Balancing Test (used in Piper)
i. Ordinarily a strong presumption in favor of P's choice of forum, which may only be disturbed when private
interest and public interest point towards trial in the alt forum. Consider:
1. Private interest of the litigant--convenience of the litigants.
a.
Relative ease of access to sources of proof
b. Availability of compulsory process for attendance of unwilling witnesses
c.
Cost of obtaining attendance of willing witnesses
2.
iii.
d. Possibility of view of premises (if view would be appropriate to the action)
e. Other practical problems that make trial of a case easy, expeditious, and inexpensive.
f.
Enforceability of a judgment if one is obtained.
g.
P may not choose an inconvenient forum to "vex," "harass," or "oppress" D.
Public interest--convenience of the forum.
a.
Administrative difficulties when litigation is piled up in congested centers instead of
being handled at its original origin.
b. Jury duty ought not be imposed upon people in a community w/ no relation to the
litigation.
c.
When many persons, it's good to hold trial in their view/reach rather than remote
parts of the country (where they can only learn about it by report).
d. Local interest in having localized controversies decided at home.
e. Appropriateness in having trial of diversity case in a F that's at home w/ the state law
that must govern the case (rather than having a court in another forum untangle
problems in conflict of laws, and in law foreign to itself).
FORUM NON CONVENIENS IN FEDERAL COURT
1. Piper Aircraft v. Reyno [454 US 235 (1981)] (p349)
a.
b.
c.
Facts: Aircraft made in part by Piper Aircraft Co. (PA) and Hartzell Propeller, Inc. (OH) crashed in Scotland, instantly
killing pilot and 5 passengers. Decedents were Scottish subjects, as are their heirs and next of kin. No eyewitnesses.
At time of crash, aircraft was owned, registered, and maintained in England by an English company and operated by a
Scottish air taxi service organized in the UK. Wreckage of the plane was in a hangar in England.
i. Reyno (P), a legal secretary to the lawyer who filed this lawsuit and who was unrelated to/didn't know the
decedents or their survivors, filed separate wrongful death actions against Ds in CA Superior Court as the
court-appointed administratrix of decedent's estates.
ii. Decedents' survivors filed separate action in England against the pilot, the owner, and the operator of the
aircraft.
iii. P admits her lawsuit was filed for sole purpose of taking advantage of the SL law, which is recognized under
US but not Scottish law. After case was removed to CA dist court and transferred to PE dist court, Ds
moved to dismiss on grounds of FNC.
iv. DCt granted motion but was reversed by CtApp on ground that a FNC motion could be defeated by mere
showing that the substantive law would be applied in the convenient forum is less favorable to P than the
present forum. Ds appeal.
Issue: Should the possibility of an unfavorable change in law, by itself, bar dismissal on FNC grounds, and if not, did
the DCt otherwise abuse its discretion in granting dismissal on FNC grounds?
Holding (Marshall): No. Judgment reversed.
i. Possibility of unfavorable change in substantive law should ∅ be given conclusive (or even substantial)
weight in the FNC decision--otherwise, the doctrine would lose flexibility and, in fact, woul dbecome
virtually useless.
1. Also, choice-of-law issues that might not otherwise need to be resolved would have to be in
order to decide FNC motions.
ii. On the other hand, if the remedy provided by the alt forum is so clearly inadequate or unsatisfactory that it
is no remedy at all, the unfavorable change in law may be given substantial weight--the DCt may conclude
that dismissal ∅ in the "interests of justice."
1. Here, the remedies provided by Scottish law ∅ fall w/i this category.
iii. FNC determination is committed to the sound discretion of the trial court and may be reversed only when
there is a clear abuse of discretion.
iv. In granting D's motion, DCt relied on the balancing test from Gulf Oil v. Gilbert. Recap:
1.
v.
vi.
iv.
v.
vi.
Usually strong presumption in favor of P's choice of forum, which may be disturbed only when
the private interest (affecting the convenience of the litigants) and the public interest (affecting
the convenience of the forum) clearly point toward trial in the alt forum.
2. This presumption applies w/ less force when P is foreign b/c (as the central purpose of any FNC
inquiry is to ensure that trial is convenient) when P selects a foreign forum, ∅ reasonable to
assume that this choice is convenient to such P.
The private interest factors weigh in favor of dismissal b/c fewer evidentiary problems would arise if trial
were in Scotland.
1. A large portion of the ev is in Great Britain.
2. D submitted affidavits describing the evidentiary problems they would face if trial were held in
the US, and aircraft's owner and operator would ∅ be able to be impleaded as third-party Ds in
a US court.
The public interest factors also weigh in favor of dismissal b/c of choice-of-law problems (PE law would
apply to one D and Scottish law to the other D if case tried in PE DCt) and the fact that Scotland has a very
strong interest in this litigation (the accident occurred in Scottish airspace, all decedents were Scottish, and
apart form Ds, all potential Ps and Ds are Scottish or English).
AN ALTERNATE FORUM!
1. There must exist a more convenient forum for P to get adequate relief.
2. Islamic Republic of Iran v. Pahlavi (p358) → Where no alt forum available, NY courts aren't required to entertain
litigation that has no connection with the state--esp when the burden on state's court would be tremendous.
Availability of another forum was just a "most important" factor to be considered.
3. Nemariam v. Federal Democratic Republic of Ethiopia (p359) → "It would be peculiar indeed to dismiss" claim in US
DCt--a forum where P is certain to be awarded relief if she succeeds on the merits--in favor of a forum where P has
no certainty of relief for a meritorious claim.
CONDITIONAL DISMISSAL.
1. Unnecessary hardships led to conditional dismissal--Modern prevalence of FNC caused confusion b/c the
operation of the doctrine and the SoL has never been made clear. More than once, a P's case was dismissed
according to FNC, only to find that in the interim the SoL had run, so D was protected from further suit in the more
"convenient forum." It's also happened that P's case was dismissed a la FNC, only to find that according to statute,
there is no other forum proper for bringing her action.
2. Conditional Dismissal--dismissal for FNC is specifically conditioned on a promise by D to submit to suit in another
venue, whether or not that venue is statutorily prescribed and whether or not the SoL has run.
3. Recognized in Fed Cts and ½ of those state courts that accept FNC.
Alts to FNC Motions: Other Attacks upon Inconvenient Forum. FNC ∅ only possible attack on P's choice of venue for her
action. Attacks commonly used that ∅ use FNC are:
1. Transfer of Venue. In states ∅ explicitly recognizing full-blown doctrine of FNC, the void is partially filled by the
motion for a transfer of venue.
a. Upon a strong showing that fair trial is impossible in the chosen venue, D may be allowed to defeat the
P's original venue in favor of a more convenient one.
2. Collateral Injunction.
a. D may attack choice of venue collaterally, in another state court, in an attempt to obtain an injunction
against pursuit of a case in a particular forum.
b. Rarely used b/c they are clumsy, expensive, and time-consuming.
c. Enforceable only if issuing court somehow can subject P or her property to its own J or contempt power.
3.
vii.
Stay of Proceedings.
a. Motion by D that proceedings be stayed for an indefinite time in a particular venue often acts as indirect
pressure on P to refile his action in another venue.
b. Often, these stays of proceedings are explicitly recognized to be coercive in nature--"back door FNC"--in
those states that refuse to explicitly recognize the doctrine.
Human Rights -- special considerations for FNC?
1. Alien Tort Claims Act allows foreign litigants to sue in US to redress HR violations (torture; ethnic cleansing).
IX. ASCERTAINING THE APPLICABLE LAW
a. THE ERIE DOCTRINE
i.
Rules
1. U.S. Const. art. III
2. Amend. X.
3. 28 U.S.C. § 1652.
4. 28 U.S.C. § 2072.
ii. INTRODUCTION
1. The Problem. Litigation that occurs entirely w/i a state and is b/w citizens of that state, concerning a c/a arising
w/i that state, presents no problem of choosing which body of substantive law should govern the outcome. BUT as
soon as litigation concerns citizens of more than one state, or the c/a arises in an interstate transaction, the forum
court must make a conscious choice about which body of substantive law to apply: that of the state of the P? Of
the D? Where the c/a arose? Federal common law?
a. Choice-of-law problems are of major importance in federal diversity litigation, where, by the very nature
of the case, at least 2 bodies of state substantive law may be relevant.
b. Choice-of-law problems also arise in state courts, when these courts are called upon to litigate federal Qs
not brought in the federal courts.
2. The Goal. Discourage forum shopping by either party. Forum shopping--the conscious choice of one court over
another for reasons of more favorable substantive legal doctrines, when either of 2 possible court systems has J
and V. The practice conflicts w/ the oft-expressed rule that procedure should ∅ be determinative of outcome.
iii. STATE LAW IN THE FEDERAL COURTS
1. Historical Background.
a. § 1652 (formerly § 775) provides: "The laws of the several states, except where the Constitution or
treaties of the U.S. or Acts of Congress otherwise require or provide, shall be regarded as rules of
decision in civil actions in the courts of the U.S., in cases where they apply."
b. Swift v. Tyson [(1842)] (p)
i. SC narrowly interpreted this statute, reasoning that state rules of decision had to be applied in
federal courts only when the state rules were in the form of statutes. State decisional law ∅
have to be used in the federal courts.
2.
ii. This rule in effect required federal procedure to duplicate state procedure but allowed federal
substantive law to exist apart from state substantive law.
c. Shortcomings of Swift ruling.
i. P with a case ripe for adjudication often had a choice of 2 distinct bodies of substantive law-federal and state. P's counsel could, by choosing the right court, weigh the outcome of the
case in his favor.
ii. It often happened that the federal rule on a legal Q was directly opposite of the state rule. In
such a case, P's choice of court could all but guarantee the outcome of the case, a
circumstance alien to the very theory of civ pro, that the choice of courtroom should have as
little influence on the eventual outcome of the case as possible.
THE ERIE DOCTRINE→Swift v. Tyson OVERRULED—
a.
Erie Railroad Co. v. Tompkins [] ()
i.
ii.
iii.
iv.
v.
b.
c.
Facts: Tompkins (P) was walking along the Erie RR's (D) right-of-way in PA when he was struck by a bar or a
mail-hook extending from the side of D's passing train. P was a citizen of PA; D of NY. P sued in NY DCt. P
argued that "general federal CL" should govern the legal aspect of the case; D argued that "state principles
of CL" should govern. The court, following Swift, applied general federal CL and found for P; CtApp affirms.
D appeals.
Issue: When a federal court has div J, should it apply federal substantive law in resolving the merits of the
case?
Holding: No. Judgment reversed.
1. Swift construed the 1789 Judiciary Act to apply only to state statutes and ∅ state CL.
HOWEVER, the correct construction would've required federal courts sitting in diversity to
apply both state statutory AND case law. This construction is now the law. There is no longer
a federal general CL.
a.
The doctrine of Swift v. Tyson was an unconstitutional assumption of powers by the
federal courts that no lapse of time or respectable array of opinion should make us
hesitate to correct.
2. When a matter is governed by a specific federal statute or when a federal Q is involved, federal
law will apply to diversity cases.
Dissent (Butler): Both parties assumed that Swift applied, and the Court should not O/R Swift w/o the
benefit of argument.
Concurrence in part (Reed): Swift merely held that the law to be applied in federal courts ∅ include the
decisions of local tribunals. This error may be corrected by holding that, under the Judiciary Act, local
decisions are part of the law to be applied, thus interpreting a statute instead of the Constitution.
Comment: The purpose of the decision was to eliminate the uncontrolled forum shopping b/w state and
federal courts by compelling federal courts to reach the same result on non-federal Qs as state courts
would've reached.
{{{INSERT CASES}}}
3.
SCOPE OF THE ERIE DOCTRINE. The essence of Erie is that, while federal courts are free to apply
their own rules of "procedure," any issue of "substantive" law (other than federal Q) must be determined
according to the laws of the state in which the federal court is located. The difficulty in applying the Erie doctrine
is in determining whether a particular matter or issue is "substantive" (governed by state law) or merely
"procedural" (governed by federal rules.
a. “OUTCOME-DETERMINATIVE TEST” TO SEPARATE “SUBSTANCE” FROM “PROCEDURE”-i. Guaranty Trust Co. v. York [] ()
1.
2.
3.
4.
Facts: York (P) sued Guaranty (D) for alleged failure of D to protect the interests of P and others
in a trust. Federal jurisdiction was based on diversity of citizenship. D moved for SJ, on grounds
that the SoL should control the action, and that the statute had run. P argued that SoLs are
procedural, hence governed by federal rather than state CL. Trial court granted SJ for D; circuit
court reversed, and the case went to SCOTUS on cert.
Issue: When adoption of a federal procedural rule in the federal court will lead to a
substantially different outcome than if the case had been brought in state court, should the
federal procedural rule still be followed?
Holding: No. Judgment reversed.
a.
Generally, procedure in the fed courts is governed by FRCP. However, the source of
substantive rights enforced by a fed court under diversity J is the law of the states.
Matters of "substance" and "procedure" are not always clearly distinguishable.
b. The Q is ∅ whether a SoL is a matter of procedure but whether the statute involves a
matter of substance in that the outcome of the suit is significantly affected by the
fed court's disregard for the state law that would control if the suit were brought in a
state court. This test may be stated thus: A rule of law is substantive w/i the Erie
mandate if it "has a substantial effect upon the eventual outcome of the case."
c.
Here, the running of the SoL substantially affected the outcome of the litigation.
Thus, it was substantive w/i the Erie mandate, and state law controlled. Since the
SoL had run before the commencement of action, the case was properly dismissed.
Dissent (Rutledge, Murphy): Among state courts, whether an action will be barred by SoL
depends not upon the law of the state that creates the substantive right, but upon the law of
the state where suit may be brought.
ii.
b.
Comment: Under the outcome-determinative test of York, fed courts have been required to
follow state practice in such quasi-procedural areas as the effect of res judicata, determination
of date of official commencement of a lawsuit, sufficiency of minimum contacts, burden of
proof, and conflict-of-law rules.
BASIC FEDERAL RIGHTS—THE “BALANCE OF INTERESTS” TEST-i. Byrd v. Blue Ridge Rural Electric Cooperative, Inc. [] ()
1.
Facts: Byrd (P), temporarily employed as a line worker by Blue Ridge (D), was injured in a fall
from a telephone poll. In a diversity action in tort brought by P, D claimed P's sole recourse was
thru workers' comp (rather than in a negligence action). Under state law, whether P was an
employee of D for purposes of workers comp would've been decided upon the pleadings by the
court alone. Under federal procedure, trial of the issue would've gone to the jury. The Q arose
whether state or federal law was applicable. DCt presented the Q to the jury, which rendered
verdict for P. Circuit court reversed for D. Came to SCOTUS on cert.
2.
3.
Issue: When Qs in a diversity suit in federal court concern the mode and form of remedy, will
state procedural rules (when they affect the outcome of the suit) be allowed to override
essential federal rights (e.g., trial by jury)?
Holding: No. Judgment reversed.
a.
The "outcome-determinative" test of York, while still generally valid, is not the sole
test to separate "substance" from "procedure" for purposes of the Erie mandate.
The preference for state law ∅ binding if application of such a law would deprive one
party of a strongly protected federal right, even if the standard "outcome" test is
met.
b. Here, application of state law would deprive P of a jury trial upon a major part of his
case. Rather, DCt must determine for itself, using federal guidelines, whether jury
trial upon the issue is proper, keeping in mind the strong federal pref for a jury trial.
As a general rule, the pref for state law must be balanced against the deprivation of
federal rights resulting from application of state law, a test that is separate from-and intended to augment--the "outcome determinative" test of York.
ii.
c.
Comment: The "balance of interests" test of Byrd has been applied outside the realm of
division of function b/w judge and jury only in a few cases.
1. Federal evidence rules, contrary to corresponding state rules, were followed in the
5th Circuit on grounds that the federal rule demonstrated "federal policy of long
standing."
2. And a foreign administrator of a domestic estate was permitted to join in an action
against the estate, according to FRCP 43(a), despite a contrary state rule, on grounds
that the FRCP reflect constitutional federal policy.
3. State arbitration rules have been held to take precedence over difference federal
rules on grounds that application of federal rules would have “totally changed the
outcome of the case.”
4. The most debated subject following the “balance of interests” test of Byrd has been
whether federal courts are bound to follow state long-arm statutes when
attempting to obtain long-arm J over foreign corporations, or whether independent
federal standards are applicable. Most decisions have applied relevant state rules,
stating that there is no separate federal long-arm power in diversity actions, even if
DP ∅ offended.
ADHERENCE TO FEDERAL RULES WHERE THEY DON'T AFFECT CHOICE OF FORUM—
i. Hanna v. Plumer [] ()
1.
2.
3.
Facts: In a diversity negligence action, s/p was made upon Plumer (D) in MA by leaving process
at D’s place of residence w/ his wife. This practice is sanctioned by the FRCP. However, by MA
state law, s/p must be made personally upon D. D moved for dismissal and SJ on grounds that
state law was controlling and that the SoL had run, so that Hanna (P) could no longer comply w/
MA service requirements. Trial court found for D; circuit court affirmed, finding that the conflict
b/w state and federal law was over a substantive matter. SC granted cert.
Issue: In a civil action brought in federal court under diversity J, must s/p be governed by the
FRCP, even if the outcome is affected?
Holding: Yes. Judgment reversed.
a. FRCP 4(d) was designed to control s/p in diversity actions. It relates to the practice
and procedure of the district courts. D contends that under Erie and York, MA
4.
procedure should govern because it is outcome determinative. However, the York
rule ∅ the sole consideration.
b. The constitutional provision for a federal court system carries w/ it congressional
power to make rules governing the practice and pleading in those courts. To hold
that the FRCP must cease to function whenever they alter the mode of enforcing
state-created rights would be to ignore this federal power.
c.
The diff b/w the 2 rules involved here would be scant, if any, relevance to the choice
of a forum. The choice of rule ∅ alter the outcome at the outset, although at this
point the choice will have a marked effect.
d. State law must govern because “there can be no other law.”
Concurrence (Harlan): Erie expressed profound policies affecting the notion of federalism.
These policies are more significant that the oversimplified outcome-determinative test of York
and even the forum-shopping rule of Erie. The proper approach in determining whether to
apply a state or federal rule, whether substantive or procedural, is to inquire if the choice would
substantially affect those primary decisions respecting human conduct that our constitutional
system leaves to state regulation. If so, the state rule should prevail. Here, application of the
federal rule would not substantially impinge on the validity of the state policy; therefore,
application of the federal rule is appropriate.
ii.
d.
Comment: Modern Rule—in case of conflict b/w Federal Rules and state law, Federal Rules
control; i.e., such matters are presumptively procedural.
1. Burlington Northern RR v. Woods () SCOTUS found a direct conflict b/w an AL state
statute, which allowed assessment of a 10% penalty on all unsuccessful appeals of $
judgments, and FRAppP 38, which allows a penalty to be assessed only if the appeal
was frivolous. The Court held that Rule 38 controlled b/c the matter could
reasonably be classified as procedural.
NO CONFLICT B/W FEDERAL AND STATE LAWS-i. Walker v. Armco Steel Corp. [] ()
1.
2.
3.
Facts: Walker (P), resident of OK, was injured by an allegedly defective nail manufactured and
designed by Armco Steel (D), a foreign corporation. P sued in federal DCt on 8/19/77. Service ∅
made on D til December, long after the 60 days elapsed that would’ve brought the filing w/i the
state limitations period. D filed a motion to dismiss on ground that the action was barred by the
state SoL. P claimed FRCP 3 governs the manner in which an action is commenced in federal
court for all purposes including limitations. DCt dismissed, concluding state law applied. CtApp
affirmed. SC granted cert.
Issue: In a diversity action, should the federal court follow state law in determining when an
action is commenced for the purpose of tolling the SoL?
Holding: Yes. Judgment affirmed.
a.
In Ragan v. Merchants Transfer & Warehouse () we held that we couldn’t give a CoA
longer life in federal court than it would’ve had in state court w/o adding something
to the CoA. The service of summons statute in Ragan, as here, was an integral part
of the state SoL and part of the state CoA.
b. FRCP 3 ∅ intended to toll state SoL or displace state tolling rules. It governs the date
from which the various timing requirements of the FRCP begin to run.
c.
FRCP 3 ∅ replace the policy determinations found in the state law here, i.e.:
i. That actual service on or actual notice to D establishes a deadline after
which D may have peace of mind, and
ii.
After a certain period of time it is unfair to require D to attempt to piece
together a defense to an old claim.
Thus, FRCP 3 and the state statute are not in conflict and a Hanna v. Plumer analysis
∅ apply.
E.
DIVERSITY AND CHANGE OF VENUE-i. Stewart Organization v. Ricoh Corp. ()
1.
2.
3.
4.
5.
F.
REVIEW OF JURY VERDICTS-i. Gasperini v. Center for Humanities ()
1.
2.
3.
4.
5.
6.
4.
a.
iv.
Facts: Stewart (P) sued Ricoh (D) in DCt for N. AL, alleging breach of distribution K. The K
contained a clause specifying venue only in Manhattan. D brought motion for change of venue
under § 1404(a). P contended AL law disfavored venue clauses, and AL law should be applied.
DCt agreed and denied the motion. CtApp revered. SC granted cert.
Issue: In a federal diversity suit, should federal rules—rather than state rules—apply in a
motion for change of venue?
Holding: Yes. Judgment affirmed and case remanded.
a.
In a federal diversity suit federal—not state—rules should apply in a motion for
change of V. When the federal rule to be applied is a statute and the statute applies
to the issue before the court, the statute will be applied if it was enacted w/i the
limits of constitutional authority.
b.
Concurrence (Kennedy, O’Connor):
Dissent (Scalia):
Facts:
Issue:
Holding:
Dissent (Stevens):
Dissent (Scalia, Rehnquist, Thomas):
Note:
THE PROBLEM OF ASCERTAINING STATE LAW
a. The Problem in Brief. Given that federal courts in most diversity cases are required by Erie to apply state
substantive law, how does a federal court determine precisely what is state law upon an issue? On many
issues, the state decisions will be poorly reasoned, outdated, or totally nonexistent. The problem of
discerning “state law” can be significant.
b. The Black Letter Rule. The federal court must apply the law of a state as that law is either
i. declared by statute and interpreted by the highest court of the state OR
ii. judicially declared by the highest court of the state.
The federal court must refrain from “making” state law by reinterpreting state opinions or by
superimposing its own prejudices over those of the state’s highest court.
When the decisions of the state’s highest court are very old or totally nonexistent, the federal court may
either turn to lower court decisions (if available) or, as a last resort, try to declare state law is it would be
declared by the highest state court if the issue were presently tried before it.
c. Determining Which State's Law Governs. Federal courts apply the conflicts-of-law rules of the state in
which they sit. [See Klaxon v. Stentor Electric Manufacturing ()]
b. CB 361-417.
c. INTERSTATE CHOICE OF LAW
i. CB 417-418.
d. THE “NEW” FEDERAL COMMON LAW
i. CB 425-429.
X.
THE BINDING EFFECT OF PRIOR DECISIONS: RES JUDICATA &
COLLATERAL ESTOPPEL
a.
Introduction. The policy of finality (i.e., the notion that litigation must come to an end) is a major force in civ pro. It promotes several
other values—namely, judicial efficiency/economy, consistency in judicial determinations, and avoidance of harassing/vexatious
litigation.
i. These policies provide the rationale for the doctrine of res judicata and collateral estoppel. Under modern terminology
favored by the Restatement (2d) of Judgments, res judicata in its narrow sense is referred to as claim preclusion, and
collateral estoppel is referred to as issue preclusion.
b. CLAIM PRECLUSION (aka: res judicata)
i. Claim preclusion arises when the following 3 elements are present:
1. There is a final, valid judgment on the merits;
2. The parties in the subsequent action are identical to those in the prior action (distinguish issue preclusion); and
3. The claim in the subsequent suit involves matters properly considered in the prior action.
ii. Objective: avoid multiple suits on identical rights or obligations b/w the same parties.
iii. Effect of adjudication upon the cause of action involved: merger and bar.
1. Merger: In a legal sense, merger is the fusion of 2 CoA into a single right of action. When a party acquires several
CoAs arising out of the same transaction or series of transactions, he is usually required to assert all his CoAs in a
single lawsuit. Failure to do so may result in waiver of the CoA not joined—the unjoined CoAs are said to have
been merged in the adjudication of the asserted CoAs. All of P’s related claims are merged into the single
judgment he obtains. And all of D’s defenses are merged into the judgment in her favor—she may ∅ relitigate
defenses to a CoA she already won.
2. Bar: Bar and merger are corollaries. If P prevails on his CoA, remaining CoAs may be merged and thereby waived.
Similarly, if P loses on the merits, he may be barred from thereafter asserting in any other action the same, or
similar, CoA.
a. The 2 concepts (bar & merger), procedurally similar, are both directed toward the achievement of one
end: ensuring that judicial time isn’t wasted by parties asserting and reasserting the same CoAs in
numerous lawsuits.
b.
iv.
Under the doctrines of bar and merger, a party is given 1 chance to ligigate fairly and fully his grievances,
and no more than one chance.
Single Action Rule—
1. Rush v. City of Maple Heights (p)
a.
b.
c.
v.
Facts: Rush (P) was injured in a fall from her motorcycle. She sued the city of Maple Heights (D) for N maintenance of
streets.
i. Case 1: Sued for damages to her cycle → $100 recovery.
ii. Case 2: Sued for her own personal injuries → $12k recovery. D appealed the 2nd on grounds that all of P’s
CoAs had been merged in her 1st judgment, so she couldn’t reassert the same set of facts to recover for her
personal injuries in a 2nd separate suit. CtApp affirmed; D appeals.
Issue: May a P sue in 2 actions for damages resulting from a single accident?
Holding: No. Judgment reversed.
i. The single accident gave rise to 2 distinct CoAs, 1 for personal injury, and the other for property damage.
But to allow P to bring suit separately on both CoAs would be to encourage vexatious and time-consuming
litigation. Thus, the majority of jurisdictions require that such “twin” CoAs be sued on simultaneously, in a
single action. Failure to do so → merger of the 2nd CoA into the 1st, with the result that the 2nd can never be
brought.
ii. P logically should’ve asserted both CoAs in her original suit. B/c she ∅ do so, the 2nd was lost by merger.
Therefore, she improperly brought her personal injury action. The original judgment of $100, through the
doctrine of merger, was all the redress P could obtain for both twin CoAs.
CB 1113-1121; 1124-1125.
c. ISSUE PRECLUSION (aka: collateral estoppel)
i. Rule:
1. § 1738: State and Territorial statutes and judicial proceedings; full faith and credit.

Defensive Mutual Collateral Estoppel
o Used against the plaintiff from the first suit regarding issue(s) that were previously litigated against the defendant
from the first suit.

Defensive Non-Mutual Collateral Estoppel
o Used by a new defendant in a subsequent suit who wants to assert a final judgment on an issue(s) against the
plaintiff from the first suit

Offensive Mutual Collateral Estoppel
o Used against the defendant from the first suit by the plaintiff (from the first suit) in a subsequent suit thereby
preventing relitigation on an issue already decided

Offensive Non-Mutual Collateral Estoppel
o Used by a new plaintiff in a subsequent suit who wants to assert a final judgment on an issue(s) against the
defendant from the first suit
o Court employs 5 "Fairness Factors" from Parklane Hosiery Co, Inc. v. Shore, 439 U.S. 322 (1979), to determine
validity of the ONMCE:





ii.
iii.
iv.
Could the party trying to assert Collateral Estoppel have intervened in the earlier suit?
Did defendant have incentive to litigate the first action?
Are there multiple, prior inconsistent judgments?
Did the party who is attempting to assert ONMCE sit out and wait during earlier suits?
Are there any procedural opportunities available to defendant in the second suit that were not
available in the first suit?
In General. A right, Q, or fact put in issue and determined by a court of competent J as a ground for recovery cannot be
disputed in a subsequent suit b/w the same parties or parties in privity w/ them. Issue preclusion differs from claim
preclusion in that issue preclusion ∅ apply to matters ∅ argued/decided in a prior action.
Issues Actually Litigated. The principle of issue preclusion prohibits a party from relitigating in a subsequent action issues
actually litigated in a prior action. In this respect, it’s different from claim preclusion and defense preclusion, which may be
effective against all issues that should’ve been litigated at the earlier time. To have been litigated in the 1st action w/i the
meaning of the principle of issue preclusion, it’s necessary that the issue was actually raised in that action, that a decision
was reached on the issue, and that the issue was necessarily decided in the earlier action. Hence, if the earlier action
could’ve rested on any of several alternative grounds, or if the issue in the earlier trial was “stipulated” rather than
adjudicated, there is usually no issue preclusion effect. Issue preclusion is the modern term used to encompass the doctrine
of collateral estoppel.
1. Same subject matter—
a. Cromwell v. County of Sac (p1135)
i.
ii.
iii.
Facts:
1.
Case 1: In an earlier action, a different P had sued the same D, county of Sac (D), for maturation
coupons attached to municipal bonds issued by D. The court in the earlier action had held that
bonds and coupons in the hands of that earlier P were void and ∅ purchased for value.
2. Case 2: Cromwell (P, here) thereafter obtained the same bonds and brought this action for the
accrued interest due. D asserted the earlier judgment as conclusive on the general validity of
the bonds by collateral estoppel, and therefore denied any interest was due. P appeals
judgment for D.
Issue: Does the doctrine of collateral estoppel preclude further litigation regarding the same SM even
when a different issue is raised in the 2nd suit?
Holding: No. Judgment reversed.
1. Where 2 actions involve generally the same SM, but the CoAs litigated or the parties are
different, the 1st action is conclusive against the 2nd only on issues actually and necessarily
litigated in the 1st. The bonds issued by D would’ve been valid obligations in the hands of a
bona fide purchaser for value at the time of the 1st trial, but that issue wasn’t litigated then.
2. Because no ev was presented as to whether P was a bona fide purchaser for value of the bonds,
the finding of invalidity of the bonds in the 1st trial had no collateral estoppel effect as against P
unless it were 1st shown that he, too, hadn’t paid for them. The case is remanded to determine
whether P was a bona fide purchaser for value of the bonds.
v.
Requirement of Certainty. If, in the 1st action, it’s not clear whether a point later asserted as res judicata has actually been
litigated and decided, there’s no issue preclusion or collateral estoppel. Thus, when a holding rests upon several alternative
grounds, each of which could support the plea, there is issue preclusion (collateral estoppel) on none of those issues by the
general rule. It is said that none of the issues so decided had been expressly and necessarily determined in the prior case.
1. Precise issues decided in prior case unknown—
a. Russell v. Place ()
i.
ii.
iii.
Facts:
1.
Case 1: In an earlier suit, Russell (P) sued Place (D) for patent infringement upon several
different counts, any one of which—if proved—would’ve supported a verdict in P’s favor. In
due course, P did recover in that action, but the court’s decision gave no hint as to the specific
infringement for which relief was granted.
2. Case 2: In this suit, P again sued D, and D set up defenses identical to those he had set up
earlier in the first action. P moved to have all D’s defenses dismissed on the grounds that they
had been litigated and disposed of in the previous action. P appeals adverse lower court
actions.
Issue: Does collateral estoppel apply where the precise Q raised and decided in the earlier case is not
disclosed?
Holding: No. Judgment affirmed.
1. If there’s any uncertainty in the record of the 1st trial as to whether a distinct issue was raised
and litigated, OR if it appears that several issues have all been litigated as a “group” rather than
singly, as here, the whole SM will be at large and subject to relitigation.
a.
The decision of the trial court at the 1st patent infringement trial ∅ show which of D’s
defenses, or which of P’s claims, were specifically litigated and decided. B/c some
doubt existed as to what was litigated in the former trial, the former trial will be
denied any collateral estoppel effect upon the issues resubmitted at the 2nd trial.
d. PRIVITY AND NONMUTUALITY : Persons Benefitted and Persons Bound by Preclusion
i. The Traditional Model. It was the traditional maxim of both res judicata and collateral estoppel that the doctrines were
operative only where all parties to the 2nd action were also parties to—or in privity w/ parties to—the former action.
1. Therefore, all estoppel had to be “mutual”—the person asserting the estoppel against another party would himself
have been bound by estoppel had the decision in the former action gone the other way. The requirement of
“mutuality of estoppel” effectively precluded a stranger to the former action from using collateral estoppel
defensively when a once-litigated CoA was reasserted against him.
2. However, a growing number of decisions repudiate the requirement of “mutuality of estoppel” and allow a
stranger to the former action to assert collateral estoppel (issue preclusion) defensively.
ii. The Decline of the Mutuality Doctrine—
1. Bernhard v. Bank of America National Trust & Savings Association ()
a.
Facts: Mrs. Sather gave Cook $ to deposit in her bank account, but Cook, after, deposit, w/d it and used it for himself.
Upon Mrs. Sather’s death, Bernhard (P) and the other next of kin sued Cook for embezzlement. Judgment went for
Cook on grounds that Mrs. Sather had given him the $ as a gift. Thereafter, P sued Bank of America (D) in which Mrs.
b.
c.
iii.
Offensive Use of Prior Judgment—
1. Parklane Hosiery Co. v. Shore ()
a.
b.
c.
d.
iv.
Sather had her account, asserting that the bank illegally allowed Cook to make w/d out of the Sather account. D, a
stranger to the 1st action, nonetheless asserted the judgment in the 1st action—the $ was a gift—as collateral
estoppel. The lower courts gave judgment for D; P appeals.
Issue: Is a plea of res judicata available only where there is privity and mutuality of estoppel (i.e., only a party bound
by a previous action may assert it as res judicata)?
Holding: No. Judgment affirmed.
i. Only 3 Qs need be asked when a stranger attempts to assert defensively a decision in a prior action against
a party to the former action:
1. Was the issue decided in both cases identical?
2. Was the adjudication of the issue final and necessary?
3. Was the party against whom the plea is to be asserted a party to the original action?
“Mutuality of estoppel” (in that both parties to the 2nd action must’ve been parties to the 1st before either
could assert res judicata) is expressly O/R. It is sufficient if the party against whom the estoppel is asserted
was a party.
ii. B/c P (against whom the plea of collateral estoppel was pleaded) was a party to the former action, no
reason existed for ∅ allowing D (though a stranger to the former action) to assert the former action as
conclusive. Thus, P bound by the earlier court’s finding that the $ deposited in D was a gift given to Cook,
so it wasn’t illegal for him to w/d it.
Facts: Shore (P) brought a stockholder’s class action against Parklane (D) for damages caused by a false and
misleading proxy statement. Prior to trial, the SEC brought a separate action (nonjury trial), w/ essentially the same
allegations as P’s, and won a declaratory judgment. P moved for partial summary judgment as to the issues litigated
in the SEC action. The DCt denied the motion on the grounds that it would deprive D of its 7th Am right to a jury trial.
P appealed; CtApp reversed. D appeals.
Issue: Does the mutuality doctrine still apply to collateral estoppel?
Holding: No. Judgment affirmed.
i. In Blonder-Tongue Laboratories, Inc. v. U of Illinois Foundation (), the Court held that the mutuality doctrine
shouldn’t apply to patent cases. That holding is now broadened. However, that case involved a defensive
use of collateral estoppel and was greatly influenced by the undesirability of forcing a D to relitigate issues
that the P had previously lost.
ii. When collateral estoppel is used offensively (as here), it shouldn’t be allowed if P could’ve joined in the
earlier case, out of fairness to D. But P here couldn’t have joined the SEC action; thus, its use by P is
permissible. D ∅ prejudiced thereby b/c it had a full and fair opportunity to litigate its claims in the SEC
action.
iii. D’s 7th Am rights to a jury trial ∅ violated here. Even though mutuality was required for collateral estoppel
when the Bill of Rights was adopted, procedural devices may develop to assure substantial justice and ∅
violate 7 Am.
Dissent (Rehnquist): The Court has effectively ignored the 7th Am. The development of “nonmutual” estoppel is ∅ a
mere change in “procedure.”
Binding on Parties—
1.
Martin v. Wilks ()
a.
b.
c.
d.
Facts: A group of white FFs sued in Birmingham, AL and the Jefferson Cty Personnel Board (Ds) in federal court
alleging Ds were making race-conscious promotion decisions in reliance on 2 consent decrees that settled a prior Title
VII lawsuit brought by their black co-workers and Ds, and that these decisions constituted impermissible racial
discrimination against Ps under the Constitution and Title VII. Ps ∅ parties to the 1st Title VII suit or signatories to the
consent decrees. However, Ps had an opportunity to intervene in the prior lawsuit, but chose not to. Ps union (BFA)
had been allowed to appear and file objections as amicus curiae in a hearing on the consent decrees. After the
consent decrees were approved over BFA’s objections, BFA and 2 white FFs (also BFA members) had moved to
intervene. The motions were denied as untimely. BFA and several white FFs then filed a complaint against Ds seeking
to enjoin the consent decrees. The DCt denied relief and the CtApp affirmed on the ground that b/c the white FFs
could institute an independent Title VII lawsuit asserting Ds’ actions violated their rights, they had not shown the
potential for irreparable H for the operation of the consent decrees. Ps then brought the present action. A group of
black FFs (Petitioners) were allowed to intervene in Ps’ lawsuit to defend the consent decrees. Ds moved to dismiss
Ps’ lawsuit as an impermissible collateral attack on the consent decrees. CtApp reversed. Petitioners appeal.
Issue: Does Ps’ lawsuit constitute an impermissible collateral attack on the consent decrees, given the fact that Ps
chose to pass up an opportunity to intervene in the lawsuit that produced the consent decrees? In other words: does
the impermissible collateral attack doctrine—“the attribution of preclusive effect to a failure to intervene”—apply to
this case?
Holding: No. Judgment affirmed.
i. The impermissible collateral attack doctrine is inconsistent w/ FRCP 19 and 24 and the general principle of
Anglo-American jurisprudence that one is ∅ bound by a judgment in personam in a litigation in which he’s
not designated as a party or to which he’s not been made a party by s/p.
ii. FRCP 19 indicates that existing parties to a lawsuit bear the burden of adding new parties where such a
step is in order. FRCP 24 indicates that potential new parties have no duty to intervene. In this sense,
joinder under FRCP 19 is mandatory, and intervention under FRCP 24 is permissive.
iii. The impermissible collateral attack doctrine should not be added to the class of exceptions to the
mandatory joinder rule, permissive intervention rule, and general Anglo-American principle, b/c the system
of joinder presently contemplated by FRCP 19 and 20 serves the many interests in the run of litigated
cases, including those like the present one.
Dissent (Stevens, Brennan, Marshall, Blackmun):
i. Although the Court is quite right that Ps could ∅ be deprived of their legal rights in the prior Title VII lawsuit
b/c they were not parties or interveners in that action, there’s no reason why the consent decrees might
not produce changes in conditions at Ps place of employment that, as a practical matter, may have a
serious affect on their opportunities for employment or promotion even though they are not bound by the
decrees in a legal sense. Moreover—if, after the rendition of a judgment by a court of competent J , and
after the period has elapsed when it becomes irreversible for error, another court may in another suit
inquire into the irregularities/errors in such judgment, there would be no end to litigation and no fixed
established rights. In addition, such collateral attacks can lead to the extraordinary situation of a trial court
reviewing judgment entered by a court of greater authority. The impermissible collateral attack doctrine
should, thus, apply in this case.
ii.
As to the merits of Ps’ claim of intentional discrimination, the fact that an employer is acting under court
compulsion may be ev that the employer is acting in good faith and w/o discriminator intent.
2.
v.
Comment: The 1991 Civil Rights Act reverses the holding in Martin. A person who had actual notice of a proposed
judgment and a reasonable opportunity to present objections to such judgment, or whose interest is adequately
represented in the 1st lawsuit, cannot collaterally attack the judgment.
CB 1162-1183.
XI. CLASS ACTIONS
a.
Introduction to Class Actions
i. Rule: FRCP 23: Class Actions
b. HISTORY AND PHILOSOPHY OF THE CLASS ACTION
i. English Origins. The class action can be traced to the English “Bill of Peace” in the 17c. The “Bill of Peace” was a procedural
device that was permitted only in equity, and then only if it was shown that:
1. the joinder of all parties having similar interests was impractical, b/c the parties were too numerous, were
presently unascertainable, or were not yet in being;
2. the named parties could fairly represent all the parties in the litigation; AND
3. all of the parties possessed a joint interest in the issues under litigation.
The chancellors in equity permitted suit to be maintained by or against representatives of the class and, in some instances,
held that the decree rendered in such an action was binding on all members of the class.
ii. Early U.S. Applications. The Federal Equity Rules and various state codes generally included provisions for class actions
modeled after the English procedure. However, FRCP 23, enacted in 1938, was the 1st effort to specifically define class
actions. As originally adopted, FRCP 23 provided for 3 different kinds of class actions:
1. a “true” class action wherein the rights of all members of the class were “joint” or “common” and a judgment
rendered in such an action bound all members of the class, including absent parties;
2. a “hybrid” class action wherein a specific fund/property was the subject of the action and the members of the class
had “separate” rights therein, which were determined by the judgment in the litigation; and
3. a “spurious” class action wherein a “common Q of law or fact” affected all members of the class, the claims of each
member were separate, and the judgment bound only those members of the class actually before the court.
iii. Present Federal Class Action Rules. In 1966, FRCP 23 was completely revised, eliminating the distinctions noted above and
providing that the members of the class could sue or be sued w/ binding effect on the entire class.
iv. State Rules. FRCP 23 has been adopted (sometimes w/ modifications) by most states.
c. OPERATION OF THE CLASS ACTION DEVICE
i. INITIATION OF CLASS ACTIONS.
1.
ii.
Commenced in the same way as other lawsuits—filing complaint and service of summons. But CA lawsuits are
filed in a representative capacity on behalf of persons who are similarly situated to the named P. These parties are
said to be “absent” and probably ∅ even know that the lawsuit’s being filed.
2. Caption specifies the name of the rep P and indicates it’s being filed in a representative capacity. Complaint
alleges claims of named P and sets forth classwide allegations of unnamed putative class members.
3. Solicitation of clients:
a. Solicitation for lawyer’s personal gain prohibited by legal ethical rules. Ohralik v. Ohio State Bar Assn
(436 US 447, p666)
b. Offers of legal services as a form of political expression (NAACP lawyers informing Southern minorities of
their legal rights and offering counsel) are protected under 1st Am grounds. In re Primus (436 US 412,
p666)
CERTIFICATION
1. FRCP 23(a): Prerequisites to a Class Action. P seeking to file a CA complaint ∅ need permission from the court.
But court won’t certify the lawsuit as a CA unless prerequisites are satisfied. P bringing action has burden to meet
each of these requirements. FRCP 23(c) obliges court to “determine by order” whether to certify the class “at an
early practicable time.”
a. The Requirement of a Class.
i. Court must issue an order that defines the class. FRCP 23(c)(1)(C)
ii. No hard-and-fast rule, but generally must be “precise, objective, and presently ascertainable”
and “must not depend on subjective criteria or the merits of the case or require extensive
factual inquiry to determine who is a class member.”
iii. Class definitions may fail if:
1. Too broad (e.g., “all learning disabled kinds in TX”)
2. Too specific (e.g., “all ppl w/ Spanish surnames having Spanish, Mexican, or Indian
ancestry who spoke Spanish as a primary or secondary language”)
3. Too vague (e.g., “all drug users of drug X who suffered medical problems”)
4. Too amorphous (e.g., “all recipients of unsolicited SPAM messages”)
b. The Class Representative Must Be a Member of the Class.
i. FRCP 23(a) language: “one or more members of a class may sue or be sued as representative
parties.”
ii. Problem: if claim of a named P is resolved before the class is certified, action may be dismissed
as moot even though live controversy remains re: other members.
iii. If class rep’s individual interest will expire before ruling can be made on class certification (such
as pretrial detention b/o probable cause hearing), class may be certified despite mootness of
named P’s claim.
iv. CA generally ∅ rendered moot if named P’s claim becomes moot after class certification.
c. Joinder of All Members Must Be “Impracticable.”
2.
i. Class must be so numerous that joinder of all members is impracticable. FRCP 23(a)(1)
ii. When class has:
1. 40+ members→ “numerosity” usually met.
2. 25-40 members→ variables (like geographic dispersion of class members; size of
individual claims) become important.
3. < 25 members→ “numerosity” usually lacking.
iii. Joinder generally impracticable if claims are small, b/c ppl ∅ likely to become involved in
litigation if only a small amt of $ is at stake. Joinder usually feasible if each individual’s stake is
relatively large.
d. “Questions of Law/Fact Common to the Class.”
i. “Commonality” requirement—action must raise Qs of law/fact common to the class. FRCP
23(a)(2)
ii. Permissive application so common Qs have been found to exist in wide range of contexts; even
1 significant common Q is sometimes sufficient.
iii. Critical Q: whether “differences in the factual background of each claim will affect the
outcome of the legal issue.” Califano v. Yamasaki
iv. In some cases, discrete, individualized injuries defeat commonality.
e. The Representative Claims/Defenses “Are Typical” of the Class.
i. “Typicality” prerequisite—the claims/defenses of rep party must be typical of the class. FRCP
23(a)(3)
ii. Usually found “when each class member’s claim arises from the same course of events, and
each class member makes similar legal args to provide the D’s liability.” Marisol v. Giuliani.
iii. Goal: ensure named P’s claim and class claims so interrelated that interests of class members
will be fairly and adequately protected in their absence. Id.
f. “Fairly and Adequately Protect the Interests of the Class”
i. Rep party will fairly and adequately protect interests of the class (FRCP 23(a)(4)); derives
importance from 2 factors:
1. 23(a)(4) embodies DP concern that CA judgment ought not bind parties who haven’t
literally had their day in court unless they’ve had a figurative day in court
2. Defect in the adequacy of representation might leave judgment vulnerable to
collateral attack.
FRCP 23(b): The Kinds of CAs That Are “Maintainable”
a. “Prejudice CAs” under 23(b)(1)
i. Ask whether individual actions might cause prejudice that can be avoided by using CA device.
ii. Creates a “mandatory” CA—absentee can’t opt-out.
iii. (A)—looks for prejudice to nonclass party
1.
iii.
iv.
v.
vi.
Deals w/ risk that individual actions would create “incompatible standards of
conduct”
iv. (B)—inquires into prejudice to class members.
1. Requires individual actions “substantially impair or impede” the ability of class
members to protect their interests
b. Injunctive and Declaratory Relief under 23(b)(2)
i. More popular than other provisions
ii. Primary application is in injunction suits (civil rights, employment discrim, consumer/enviro
cases)
iii. To fall under 23(b)(2), D’s conduct need only be “generally applicable” to the class; non
nrequirement that conduct be damaging/offensive to every class member
c. Damage CAs under 23(b)(3)
i. Allows certification of a class when the tie among the members is that they claim to have been
injured in the same way by the D.
ii. 2 special prerequisites:
1. Qs of law/fact common to class members must “predominate” over any Qs affecting
only individual members.
2. Court must find that a “CA is superior to other available methods for the fair and
efficient adjudication of the controversy.”
iii. 23(b)(3) outlines 4 factors to consider. The 4th is usually viewed as key to the 2 requirements.
(see p675)
THE CERTIFICATION DECISION
1.
NOTICE
Certification
1. Certification hearing. At an early practicable time after commencement of a class action, a hearing is held to
decide whether the action should proceed as a class suit—
2. Evidence. The DCt—
3. Modification. At any time before trial—
Notice
1. Form of notice. In class actions, the form of –
2. Contents of notice. The—
3. Costs. The P initially must pay the costs of notifying all members of the class. If P wins, the expenses of notice may
be recovered from D as necessary court costs.
d. DUE PROCESS CONSIDERATIONS
i. Notice and Opportunity to Be Heard—
1.
Hansberry v. Lee (p691)
a.
b.
c.
Facts: Lee (P) brought this suit to enjoin a sale of land to Hansberry (D), a black man, by a party who had signed a
restrictive covenant not to sell to blacks. D contended that the covenant wasn’t in force, since it required that 95% of
landowners sign, and only 54% actually signed. P pleaded the issue was res judicata, b/c a decree in an earlier suit on
the restrictive covenant had found 95% of landowners had signed. To this D rejoined that he and his seller weren’t
bound by the prior judgment, since they hadn’t been a party to the prior action.
i. SC of IL found that the prior action was res judicata as to D and his seller, since it had been a Class Action
wherein D and his seller’s interests were represented. D appeals to SCOTUS, alleging that his DP rights
were violated, since his interests had not been properly represented in the prior litigation.
Issues:
i. Was D, whose rights have been thus adjudicated in a C/A, afforded such notice and opportunity to be
heard as are requisite to DP that the U.S. Constitution proscribes?
ii. Were D’s interests adequately represented by other members of the class in the previous action so as to
bind D by the decision?
Holding: (i) No. (ii) No. Judgment reversed.
i. It’s a general principle that one is not bound by a judgment in personam in litigation in which he is ∅
designated as a party, or to which he hasn’t been made a party by s/p.
1. Exception: the judgment in a C/A, to which some members of the class are parties, may bind
members of the class or those represented who were not made parties.
2. There has been a failure of DP ONLY in those cases where it cannot be said that the procedure
adopted fairly ensures the protection of the interest of absent parties who are bound by it.
ii.
Those who had sought to enforce the restrictive covenant could ∅ be said to be in the same class w/, or to
represent, those whose interest was in resisting performance. If those who seek to enforce the agreement
are the members of a class, those who are interested in challenging the validity of the agreement are ∅ of
the same class in the sense that their interests are identical w/ those who seek to enforce it. It’s
impossible to say, solely b/c they are parties to the agreement, that any two of them are the same class. A
selection of reps for purposes of litigation, whose substantial interests aren’t necc the same as those whom
they’re deemed to rep, doesn’t afford that protection to absent parties that DP requires.
e. JURISDICTIONAL ISSUES IN CLASS ACTIONS
i. Rules:
1. § 1332(a): Diveristy of citizenship; AiC; costs.
2. § 1332(d): Diversity of citizenship; AiC; costs.
3. § 1367: Supplemental J.
4. § 1453: Removal of class actions. (“Class Action Fairness Act”)
ii. SMJ IN CLASS ACTIONS.
1. Diversity. Only the residence of the rep is considered for purposes of establishing federal diversity J.
2. AiC. In the federal courts, all class members must have claims exceeding $75k (except cases involving violation of a
federal statute or a federal Q), though aggregation has been permitted where (i) a single P seeks to aggregate 2+ of
iii.
his own claims against a single D, or (ii) 2+ Ps unite to enforce a single title/right in which they have common and
undivided interest.
3. All members must meet J amount.
a. Snyder v. Harris [394 US 332 (1969), p696]: Each of several Ps asserting separate and distinct claims
must satisfy the J amount requirement if his claim is to survive a motion to dismiss; i.e., there may be no
aggregation of claims. Although in Snyder, none of the Ps had an individual claim over $10k, the holding
clearly requires dismissal of any P whose claim can’t satisfy the J amount, even though others allege
sufficient claims.
PERSONAL JURISDICTION.
1. Minimum contacts in class actions.
a. Phillips Petroleum Co. v. Shutts []
i.
ii.
iii.
Facts: Shutts and other persons entitled to royalties under natural gas leases (Ps) brought a class action in
KS against Phillips (D), a DE corporation, seeking interest payments on suspended royalty payments.
1. Each class member was provided notice of the action by mail. The notice stated that members
would be included in the class and bound by judgment unless they “opted out” by executing
and returning a “request for exclusion.” Fewer than 1,000 of the 28,000 members of the class
resided in KS, and a miniscule # of the involved leases were on KS land.
2. The trial court applied KS law and found D liable to all class members for interest on the
suspended royalties. D appealed, claiming that KS lacked J over the absent class members and
that the trial court should’ve considered the laws of each state where the leases were located
to determine, under conflict of law principles, where interest was due. KS SC affirmed. SCOTUS
granted cert.
Issues:
1. May a forum state exercise J over the claims of absent C/A Ps even though the Ps (not unlike
absent Ds in a long-arm case) may not possess the minimum contacts w/ the forum that would
support PJ over a D?
2. May the forum state apply its own law to every claim in a C/A even though the forum has no
significant contacts to such claims?
Holding: (1) Yes. (2) No. Judgment affirmed in part and reversed in part.
1. The forum state may exercise J over the claims of absent C/A Ps under certain circumstances.
a.
Substantial burdens are placed by the state upon absent Ds. The out-of-state D is
faced w/ the full powers of the forum state to enter judgment against it. The D must
generally travel to the forum, retain counsel, and defend itself or suffer a default
judgment. The minimum contacts requirement of the DP clause prevents the forum
state from unfairly imposing these burdens on the D.
b. The DP clause need not, and does not, afford as much protection to absent Ps b/c
fewer burdens are placed on them. An absent class P isn’t required to do anything.
The court and the named Ps protect the absent Ps’ interests. The C/A is an exception
to the rule that one cannot be bound by a judgment IP unless one is fully made a
party in the traditional sense.
c.
2.
To bind an absent P, the forum state must provide minimum procedural DP
protection. The P must receive notice (the best practicable to apprise parties of the
action) plus an opportunity to be heard and participate in the litigation. The P must
have an opportunity to “opt out.” The named P must at all times adequately
represent the interests of absent class members.
The forum state may not, however, apply its own law to every claim.
a.
The DP clause and Full Faith & Credit clause require that the forum state have
significant contact or aggregation of contacts to the claims of the P class that create
state interests in order to ensure that the choice of forum law is not arbitrary/unfair.
b. There are material conflicts b/w forum law and other law that could apply. There’s
no indication that the parties intended the forum law to apply. Ps’ failure to “opt
out” of the class did not constitute a consent to the application of forum law. Ps’
desire for forum law is rarely, if ever, controlling. There’s no identifiable res in the
forum. Over 99% of the leases and 97% of Ps had no apparent connection to the
forum except the lawsuit.
c.
Given the forum’s lack of interest in claims unrelated to the forum and the
substantive conflict w/ the law of other Js, the application of forum law to every
claim is sufficiently arbitrary and unfair as to exceed constitutional limits.
b.
iv.
Comment: The key to this case is to understand D’s basic arg—that absentee members of a plaintiff
class are in the same boat as (and hence should be treated like) absentee Ds in an ordinary long-arm J
case. SCOTUS rejects this analogy but recognizes that absentee class members have constitutional rights
and that KS procedural law—which requires notice and an opp to opt out—satisfies the constitutional
standards.
VENUE. Only the residences of the class reps are important for purposes of V; the residences of absent class members and
intervenors are irrelevant.
f. PRECLUSIVE EFFECTS OF CLASS ACTION JUDGMENTS
i. Later individual claims ∅ barred—
1. Cooper v. Federal Reserve Bank of Richmond (p729)
a.
Facts: Cooper and 3 other employees (Ps) intervened in a civil action against the Federal Reserve Bank (D)
commenced by the Equal Employment Opportunity Commission (“EEOC”) for alleged violations of Title VII of the CRA
of 1964, including refusing to promote black employees b/c of race. After Ps were allowed to intervene, the DCt
conditionally certified the following class pursuant to FRCP 23(b)(2)-(3):
“All black persons who have been employed by the D at its Charlotte Branch Office at any time since
January 3, 1974… who have been discriminated against in promotion, wages, job assignments, and
terms and conditions of employment b/c of their race.
i.
Notice was published and mailed to each member of the class. The notice described the status of the
litigation and stated that any members of the class who didn’t exclude themselves in writing to the Clerk
b.
c.
“will be bound by the judgment or other determination.” 6 members of the class made no attempt to
exclude themselves and testified at trial.
ii. Later, after DCt found no proof of class-wide discrimination above grade 5, and that these 6 members
weren’t entitled to participate in Stage II proceedings, they filed a separate action against D, alleging
violations of 42 USC § 1981. D moved to dismiss on grounds that each of the 6 was a member of the
Cooper litigation and that they were bound by the determination that there was no proof of discrim above
grade 5.
iii. DCt denied D’s motion but certified its order for interlocutory appeal. The interlocutory appeal was
consolidated w/ D’s appeal in the Cooper litigation. CtApp reversed the judgment on the merits in the
Cooper litigation in part and held that the 6 members were precluded by res judicata from maintaining
their individual race discrim claims. Thus, the order denying D’s motion to dismiss was reversed. SCOTUS
granted cert.
Issue: Does a judgment in a C/A, determining that an employer ∅ engage in a general pattern/practice of racial
discrim agains the certified class of employees, preclude a class member from maintaining subsequent civil action
alleging an individual claim of racial discrim against the employer?
Holding: No. Judgment reversed.
i. The Cooper litigation adjudicated the individual claims of each of the 4 intervening Ps, deciding in D’s favor.
This ∅ foreclose other individual claims. The litigation also decided the “policies and practices” of
discriminating against employees claim on which the res judicata analysis is based.
ii. A judgment properly entertained in a C/A is binding on class members in any subsequent litigation b/w
them on any issue actually litigated and determined, if its determination was essential to that judgment.
iii. The significant diff b/w an individual’s claim of discrim & a C/A alleging a general pattern/practice is
obvious. The 1st requires an inquiry into a particular employment decision, where the 2nd requires a focus
on a pattern of discriminatory d’making. Discrim against 1-2 individuals may not prove the existence of a
company-wide policy.
iv. 2 of the intervening Ps here established that they were victims of racial discrim, but they were employed in
grades higher than 5 and the finding regarding them provided no support to conclude there was a practice
of discrimination.
v. The 6 class members are barred, as the CtApp held, from (i) bringing another class action against D alleging
a pattern/practice of discrim during the relevant time period, and (ii) relitigating that issue in any other
litigation w/ D. The 6 members are not barred from individual claims.
vi. If the 6 members establish a prima facie case of discrim, D will be required to articulate a legit reason for
each of the challenged decisions.