Agenda for 20th Class
• Admin
– Handouts
– Name plates
– Office hours
• Email for appointment next week
– Lunch.
• W 12/4. Noon-1. Glassed-in side, as far from TV as possible
– Review class – Monday, December 9, 1:10-3:10PM in WCC 2004
• Will stay until 5PM to answer questions
– Next week’s classes
• Review of Jurisdiction and Venue
• Erie
• Choice of Law
• Introduction to Res Judicata and Collateral Estoppel
1
Assignment for Next Class
• Res Judicata
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US Constitution Article IV (Supplement p. 1)
28 USC 1738
Yeazell pp. 715-27
Yeazell p. 727 Q1
Optional: Glannon Chapters 26 & 27
• Collateral Estoppel
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Yeazell 749-67
Yeazell p. 750 Qs 1-3
Yeazell p. 753 Q 2
Yeazell p. 756 Qs 1-4
Yeazell pp. 764ff Qs 1c, 2a&b, 5a&b
Optional. Glannon Chapters 28 and 29
2
Exam
• You can use a calculator
• Multiple choice challenges
– At your discretion you may, make a written appeal with respect to any two of
the questions on the multiple choice exam that you feel are ambiguous or
unfair. If you make more than two written appeals, I will ignore all but the first
two. If you make a challenge to a question, be sure to state in your challenge
which answer you marked on the computer sheet, which other answers you
think are plausible and why.
– Can write appeal on computer in same way that write essay question
• Consider genre
– Memo v draft appellate opinion
– See model answers to 1995 exam on iSites
• Citations to authority
– Frequent citation to rules to most specific subsection will be rewarded
• 26b3Aii
– Citations to cases are generally not necessary, nor will they be rewarded except
where truly illuminating
– See model answers to 1995 exams on iSites
3
• Reasonable word limit
Study Tools
• Glannon
• iSites
– Model Answers to 1995 Exam Questions
– Class Notes / Model answers to class questions (61 pages)
– 2011 exam and model answer
– Recordings to all classes
• www.klerman.com, “Civil Procedure” button
– Slides for all classes
– All old exams and model answers, except those on iSites
• Office hours
– M. 12/2. 3:30-6. Email for appointment
– M 12/9. 10-12. Email for appointment
– M 12/9. 3:10-5. After review session will stay to answer questions
– Sunday 12/15. 9-5PM. By Skype
• Email for appointment and include Skype name
– More efficient to talk than to email
• Can more easily follow up if don’t understand
4
Review of Personal Jurisdiction I
• Modern Supreme Court has focused on “purposeful availment”
– 4 categories of purposeful availment (Ides. Internet handout p. 7 n.1)
• Defendant or its employees entered the forum and conducted activity
– International Shoe
• Defendant entered into contractual relationships with forum residents
– Burger King, McGee
• Defendant’s products entered the forum through the "stream of
commerce“
– McIntyre
• Defendant’s out-of-state conduct caused an injurious "effect" in the forum
state
– Revell
• General or specific jurisdiction
– All cases we have read deal with specific jurisdiction
• Contacts related to dispute
– General jurisdiction
• Individuals – residence, domicile, consent
• Corporations
– Definitely. Incorporation, principal place of business
– Maybe. (large) factory/office, (many) employees, lots of business 5
Review of Personal Jurisdiction II
• Minimum contacts and “traditional notions of fair play” and old Pennoyer
categories
• 2 views
– All jurisdiction judged by minimum contacts and fair play
• General view until 1990.
• Shaffer v Heitner (1977). Quasi-in rem jurisdiction unconstitutional because
not consistent with minimum contacts & fair play
• Burger King (1985). Minimum contacts & fair play analysis applied to
individual defendant
– Minimum contacts and fair play cannot invalidate traditional bases for
jurisdiction
• Burnham (1990). Scalia + 3. Presence is sufficient basis for general
jurisdiction because it is traditional
– Brennan + 3. general jurisdiction based on presence is consistent with
minimum contacts and fair play
– Stevens. General jurisdiction based on presence is constitutional,
because traditional and consistent with minimum contacts & fair play
• Summary of current statuts of Pennoyer categories
– Constitutional: In rem; in personam based on residence, presence (individuals
only?), consent
6
– Unconstitutional: Quasi-in-rem
2 Ways to Challenge Jurisdiction
• In court where sued
– Make 12(b)(2) motion or state equivalent
– “Special appearance” means defendant appears in court solely to challenge
jurisdiction
• Otherwise, appearance in court could be construed as consent to
jurisdiction
• Collateral attack
– Only possible where defendant does not have assets in forum
• So plaintiff would have to enforce judgment in state where defendant has
assets
• Enforcing judgment in another state requires separate suit in that state
– But Full Faith & Credit Clause of US Constitution requires state to
respect judgment of another state, IF THE STATE WHICH RENDERED
THE JUDGMENT HAD JURISDICTION
– Defendant does not appear in court where sued
– Default judgment is entered against defendant
– When plaintiff goes to enforce judgment in state where defendant has assets,
defendant raises lack of personal jurisdiction as defense
– Very risky, because if enforcing court decides the original court had jurisdiction,
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defendant cannot then challenge judgment on merits
Review Venue, Transfer, FNC
• Venue
– Main point is convenience (low litigation costs)
– Statutory, not constitutional
• 1391 is general federal venue statute
• Other federal venue statutes
• State venue statutes
• Can transfer cases within judicial system
– For convenience
• Location of witnesses and evidence
• If case would be more conveniently litigated in different legal system
– Transfer not possible
– Forum non conveniens dismissal
– Change in law or procedure is not usually grounds to retain case
where witnesses and evidence are elsewhere
8
Court Visit & Civil Action Panel
• Court Visit
– Term clerks told me afterwards
• Important to take at least one seminar in Fall of 2L year
– Don’t just take “core” classes like Evidence and Federal
Courts
• Not correct that debt means you can’t choose career you want
– Loan Repayment Assistance Programs
– In what way was court different than you expected?
– Do you have any questions about what you saw or heard?
• Civil Action Panel
– Unfortunately, didn’t have time to ask nearly as many questions as
I had hoped
9
Erie Doctrine I
• Swift v. Tyson (1841)(Story). Federal courts apply state statutes in diversity cases,
but do not need to follow state court decisions on common law. State court
decisions are only “evidence” of “general principles of commercial law,” and
federal courts are free to develop common law as they see fit
• Erie RR v. Tompkins (1938) (Brandeis)
– RR accident. Issue is whether to apply PA court decisions, defendant may be
liable only for “williful or wanton injury” (not mere negligence)
– Rejects Swift v Tyson. Federal courts apply common law as interpreted by state
courts
• Usually that means as interpreted by state court in state in which federal
court is located, but see next class on choice of law.
– Swift gives out-of-state citizens unfair advantage, because they can choose
either state law (by suing in state court) or federal law (by suing in federal
court)
– Congress does not have the power to make commercial law. Nor do the federal
courts. (probably wrong now)
– Swift makes jurisprudential mistake of assuming that there is a “transcendental
body of law outside of any particular State”
10
• Influence of legal realism
Erie Doctrine II
• Guaranty Trust v. York (1945)(Frankfurter)
– Federal court must apply state statute of limitations, which was
shorter, because statutes of limitations are “outcome
determinative”
– Law is not “brooding omnipresence of Reason”
– Don’t draw (formalistic) line between substance and procedure
– Instead, ensure that “outcome of litigation in the federal court [is]
substantially the same, so far as legal rules determine the
outcome of a litigation, as it would be if tried in State court.”
– State statutes should be disregarded only if they concern “merely
the manner and means by which a right to recover is … enforced.”
11
Erie Doctrine III
• Hanna v. Plumer (1965)
– FRCP 4 applies in federal court rather than narrower state statute
– FRCP are authorized by federal statute, Rules Enabling Act, and apply in federal
court, regardless of contrary state court rule,
• as long as rule is constitutional and governs the “practice and procedure of
the district courts,” and is thus authorized by the statute
– Every rule or practice is potentially “outcome determinative”
– For federal practices
• Consider policies behind Erie
– Discourage forum shopping
– Avoid “inequitable administration of justice”
• What is “federal practice”?
– Procedure not in FRCP or federal statutes
– Example: standards of review
• Modern trend. Apply federal rules and practices in federal court
12
Erie Questions
• Suppose West Dakota courts requires the complaint to be submitted
on 8.5”x14” paper, while the local rules of the federal court in the
district of West Dakota requires the complaint to be submitted on
8.5”x11” paper. Under the Erie doctrine as interpreted by Guaranty
Trust, what size paper should be used in diversity cases? Does your
answer depend on whether plaintiff filed the complaint in federal
court 1 minute before the statute of limitations expired?
• Suppose West Dakota has a summary judgment practice different
from the that which has governed in the federal courts since Celotex.
In West Dakota, a defendant may not prevail by pointing out that
plaintiff lacks evidence on an issue, but rather the defendant can only
prevail on summary judgment by presenting undisputed evidence on
every issue. If a diversity case is filed in federal district court in West
Dakota, what standard should apply if the defendant files a motion
for summary judgment? Is the answer and/or analysis different
under Guaranty Trust than under Hanna?
13
Introduction to Choice of Law I
• Which state’s law applies?
• Relevant in state court
• Relevant in federal court in diversity cases
• Old rules (1st Restatement)
• Different rules for different areas of law
• Torts: Lex loci delictus (law of place of accident)
– If car accident in CA, then CA law applies
– Some ambiguity about situations where defendant’s negligence took place
in different state than harm to plainitff
» E.g. If D negligently manufactured car in MI which caused accident in
CA, would CA or MI law apply?
• Contracts
– Place of formation, if issue was whether contract properly entered into
– Place of performance, if issue was whether contract breached
• Choice of law clauses not generally enforced
14
Introduction to Choice of Law II
– Modern rules
• Many different versions
• Restatement Second, “most significant relationship”
– What relationships count in tort?
» Place of injury, Place where conduct causing injury occurred
» Domicile, residence, nationality, place of incorporation, place of
business of plaintiff and defendant
• Not clear which factor dominates in any case
• Similar factors for contract and other areas of law
• Choice of law clauses generally enforced
– But complicated rules governing enforceability
15
Choice of Law in Federal Court
• Federal court in State X applies X’s choice of law rules. (Klaxon)
• Only relevant in diversity cases
• If federal question, apply federal law
• Choice of law & transfer
• What state’s choice of law rules would apply in a diversity case if federal court
transferred case from CD of California to Middle District of Pennsylvania?
• Depends on reason for transfer
– Pennsylvania choice of law, if transfer was under 28 USC 1406.
» E.g. if case was improperly brought in CD California.
» Transfer was because plaintiff erred in selecting forum. No reason
to give any effect to plaintiff’s error.
– California choice of law, if transfer was under 28 USC 1404
» E.g. if case properly brought in CD of California.
» Transfer is purely for convenience of defendant and witnesses, so
no reason to change applicable law.
16
Choice of Law Questions I
• 1) Suppose Wes, a resident of West Dakota, gets into an
accident with East, a resident of East Dakota, on a highway in
West Dakota. Wes sues East in West Dakota state court alleging
per se negligence because East was driving 79 miles per hour.
No speed limit was posted. West Dakota law states that, unless
otherwise posted, the speed limit on a highway is 70 miles per
hour. East Dakota law, however, states that, unless otherwise
posted, the speed limit on a highway is 80 miles per hour.
Which state’s law applies to this dispute? Is your answer
different under the traditional lex loci commissi rule than under
the Restatement Second? If your answer is different, which rule
makes more sense?
• 2) Same as (1) except Wes sues in West Dakota federal district
court.
• 3) Same as (1) except Wes sues in East Dakota state court. 17
Choice of Law Questions II
• 4) Driver and Passenger are both domiciled in West Dakota. Driver
drives passenger to East Dakota. While in East Dakota, Driver talks on
his cell phone and causes an accident in which Passenger is injured.
Passenger sues Driver in West Dakota state court for negligence.
According to East Dakota law, passengers have no right to sue drivers
for injuries caused by negligence. According to West Dakota law,
passengers can sue drivers for negligence. Which state’s law applies
to this dispute? Is your answer different under the traditional lex loci
commissi rule than under the Restatement Second? If your answer is
different, which rule makes more sense?
• 5) Same as (4), except Passenger sues in West Dakota federal court.
• 6) Same as (4) except Passenger sues in East Dakota state court.
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Choice of Law Questions III
• 7) Spend, a Nevada domiciliary, is completely irresponsible with money.
Fortunately, he recognizes this fact and has set up a spendthrift trust. Under the
terms of the trust, Spend cannot borrow money without the consent of Trustee, a
friend he trusts. Spend goes to California and borrows money there from Sharkey
to be repaid in one year at Sharkey’s place of business in California. When Spend
doesn’t repay the loan, Sharkey sues Spend in Nevada. Under Nevada law, loans to
someone who has set up a spendthrift trust are void. California law does not allow
people to set up spendthrift trusts, so under California law, such loans are
enforceable. The traditional rule for contracts was the law of the place the
contract was formed governs disputes about contract validity. Under the
traditional rule, what state’s law would apply? Under the Restatement Second,
which state’s law should apply to the dispute? If the traditional rule and
Restatement Second suggest different answers, which makes more sense?
• 8) Same as (7), except Sharkey sues in California state court.
• 9) Same as (8), except Sharkey traveled to Nevada, loaned Spend the money there,
with repayment to be made to Sharkey when he returns to Nevada a year later.
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Choice of Law Questions IV
• 10) Same as (7), except the loan contract includes the following clause: “This
contract shall be governed by California law.” The traditional rule was not to
enforce choice of law clauses. See also Restatement (Second) below
• § 187. Law Of The State Chosen By The Parties
• (1) The law of the state chosen by the parties to govern their contractual rights and
duties will be applied if the particular issue is one which the parties could have
resolved by an explicit provision in their agreement directed to that issue.
• (2) The law of the state chosen by the parties to govern their contractual rights and
duties will be applied, even if the particular issue is one which the parties could not
have resolved by an explicit provision in their agreement directed to that issue,
unless either
– (a) the chosen state has no substantial relationship to the parties or the
transaction and there is no other reasonable basis for the parties' choice, or
– (b) application of the law of the chosen state would be contrary to a
fundamental policy of a state which has a materially greater interest than the
chosen state in the determination of the particular issue and which, under the
rule of § 188, would be the state of the applicable law in the absence of an
effective choice of law by the parties.
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Choice of Law Questions V
• Plaintiff in Phillips brought the case in federal district court in Montana. Why is
there a decision of the Supreme Court of Montana?
• In Phillips, the Montana Supreme Court observes that “applying the law of the
place of manufacture would be unfair because it would tend to leave victims under
compensated as states wishing to attract and hold manufacturing companies would
raise the threshold of liability and reduce compensation…. [A state with a high
concentration of manufacturing] could enjoy all the benefits associated with
liability laws which favored manufacturers in order to attract and retain
manufacturing firms and encourage business within its borders while placing the
costs of its legislative decision, in the form of less tort compensation, on the
shoulders of nonresidents injured by its manufacturers’ products.” (p. 249).
– Suppose Montana has a relatively low concentration of manufacturing. Would
its citizens benefit by laws which raised the threshold of liability and reduced
compensation? Or would its citizens benefit by laws which lowered the
threshold of liability and increased compensation? If it lowered the threshold
of liability and increased compensation, who would bear the increase in costs?
What does this suggest about the fairness of applying Montana law?
21
Choice of Law Questions VI
• In Phillips, the Montana Supreme Court asserted that “we do not believe that the
purpose of any potentially applicable Michigan product liability law would be to
regulate the design and manufacture of products within its borders. The purpose
of product liability law is to regulate interstate sales or sales to residents and to set
the level of compensation when residents are injured. ” (p. 249)
– If the plaintiffs in Phillips had filed the case in Michigan state court, do you
think Michigan state judges would have agreed that its laws are inapplicable?
What purpose might a Michigan judge ascribe to product liability law to show
that Michigan law should apply?
• If you were a judge on the Montana Supreme Court, would you have retained the
traditional lex loci commissi rule, or would you have voted (like the actual Montana
Supreme Court) to adopt the Restatement (Second) most significant relationship
approach? Why?
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Introduction to Former Adjudication
• 2 concepts
– Res judicata / claim preclusion
– Collateral estoppel / issue preclusion
• Res judicata
– Cannot litigate same claim several times
• Finality
– If two claims are closely related to each other (e.g. same transaction or
occurrence)
• Then must bring them together. Compulsory joinder
• If litigate one claim and then try to litigate the other
– Second claim will be barred by res judicata
• Collateral estoppel
– If issue resolved in one case, cannot relitigate that issue in subsequent case
– Suppose long-term contacts
• Litigation I. breach in 1990. Court: contract is valid
• Litigation II. Breach in 2000. cannot relitigate contact validity
– Key issue is “non-mutual” collateral estoppel
• Case I. A sues B for patent infringement. Court: patent invalid
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• Case II. A sues C for patent infringement. Can relitigate validity?