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Professor Lecture 11/19/12 10:22 AM
8/21/11 – pgs. 1-12
An Overview of Civil Procedure
The Idea and Practice of CivPro: Locating Procedure
Civil procedure includes many different things – how we define truth
and justice, lawyers’ relationships with their clients/ profession/
courts, and ultimately varying human characteristics such as greed,
oppression, and venality
Substantive law: the rules governing behavior in everyday life
o This deals with property, criminal law, torts, and contracts (or
obligations)
o However, the procedure of the law is something only for the
insiders AND this carries great importance to those in the
legal profession
Litigation: the process of carrying out a lawsuit
o Procedure includes everything from the etiquette of battle – it
starts with defining the initiation, then moves to development,
and ends finally with the conclusion of the case
o Lawyers deal with pleading, forum selection, joinder,
remedies, and discovery in procedure
We take procedure so seriously because it captures our ideas about
the acceptable forms of settling a dispute – it mirrors our most basic
notions of fairness and the meaning of justice
o It captures the rules of how we do everything plus our reasons
behind those actions
o We use procedure because we don’t want to leave things up
to chance – a dispute should be decided after looking at all
the different factors it involves
o Adjudication – the process of deciding a dispute, or the
judgment handed down
The Text Hypo on page 2 shows procedural issues lawyers
encounter through to development of a case
Clients, Lawyers, Procedure, and Strategy
Once a client has a lawyer, there are two major consequences: the
lawyer and client will have to split up responsibilities, AND the legal
system will have to decide how to deal with issues that arise from
this division of responsibilities
o First, the major decisions about the goals of litigation rely on
the client
A lawyer can be disbarred for filing a suit, settling a
case, or declining a settlement without consulting his/he
client
However, the lawyer deals with tactics: what court to
sue in, whether to request a jury trial, etc. The lawyer
must have a good grounding procedure
When a case comes around, two jobs arise for the
lawyer:
What principle of law determined who prevailed in
this situation?
Which lawyer for which side picked this particular
fight and why? AKA what tactical advantage was
he/ she hoping for?
The legal system treats the lawyer’s choices as if they were the
client’s choices (lawyer is only the agent acting for the client)
o Look at the example on pages 2-6
o While working on a case for a client, it is very important to
take all the right steps to insure that your client will have the
best chance to win his/her case
Where can the suit be brought?
Once the client has chosen his/her lawyer, then the lawyer will start
making decisions that may have consequences: the first decision to
make is where to bring the suit
o The lawyer must first decide if he/she has options for where to
bring the suit based on advantages
Deciding where to file a suit will often force the other side because
they will decide not to pursue the lawsuit – they will settle instead
The lawyer will choose the court based on preference of location –
o If you live in Louisiana, it would be cheaper and more
convenient to bring the case to an LA court than somewhere
in Texas
o Also, you may know judges in Louisiana and the juries may be
more sympathetic to your client because of personal history
or ties to that community
o Also, you may be trying to avoid certain judges because you
may know they are unsympathetic or ill-tempered
o The lawyer will also need to choose between federal or state
court:
Federal judges are appointed for life, whereas state
judges are elected – state court may be best when the
suit applies political pressure to the judge
Also, federal court is larger so juries will have more
people being pulled from different areas
Also federal court tends to have smaller dockets of
cases waiting to hear trial, so it would go on for a
shorter time than a state court
o Second, the lawyer will need to know where she actually can
bring the suit, which deals with three different elements:
personal jurisdiction, subject matter jurisdiction, and venue
Personal jurisdiction: this deals with part of the
constitution that says no one can “deprive any person
of life, liberty, or property, without due process of law”
The courts cannot exercise power over Dodge
unless the state in which the court sits has some
connection to him or to the reason the suit is
being filed
The Supreme Court wrote this out for all courts to
follow – it focuses on the rights of the defendant,
not the plaintiff
Subject matter jurisdiction: most courts are specialized to hear only
certain kinds of cases, but every state has a court that has
generalized jurisdiction (they can hear any case)
o These courts are normally called Circuit Courts, but they are
also called district courts, superior courts, court of common
pleas, etc.
o All federal courts have limited jurisdiction, and Congress
decided which courts can hear what kind of cases
o The cases tried in federal courts either 1) because the nature
of the claim resides under the Constitution, treatises, or laws
of the US or 2) because of the citizenship of the party involved
o Venue: the place of the trialq11
Service of Process: once you have found which court to bring the
suit to, you must start to notify the defendant of the suit
o First you would draft a complaint, which you would keep
copies of for you and your client, one to go to the defendant,
and the last to go to the court
o There are two ways to inform a defendant in a case about the
suit: 1) to mail a copy of the complaint that they must sign OR
2) if the defendant refuses to sign it, then you will have to go
down to the clerk of court to hand in a summons
o The summons and complaint will need to be signed and
sealed by the clerk of court, and then it will be delivered to
the defendant by either a private process server or a Federal
Marshall
Motion to dismiss: parties can file a motion to dismiss a case
because of two things
o A facial attack of the sufficiency of the complaint’s allegations
as to subject matter jurisdiction; OR
o A challenge to the actual facts upon which subject matter
jurisdiction is based
Exercise on page 9
1. They aren’t asking that question because the defense only wants to
dismiss the case instead of letting it go on before a court
2. A) It wasn’t enough because he was not “living” in Missouri at the time of
his death nor for about a year before he died. He did not make any real
plans to return to Missouri and establish a residence there with his wife. B) If
they had signed a lease in Missouri, the intent to move somewhere else
would have been established thus proving that he was going to be domiciled
in Missouri.
3. A/ B) I think it means that they have to find more evidence before they
can bring the case back into court again (as long as it was dismissed without
prejudice from the court?).
4. A) she wanted to get the case dismissed because going through a trial
would have accrued a lot of money and time and digging into her personal
history, so to cut all of those things out was why they filed to dismiss it. B)
5. A) The lawyers probably had to file motions and give something to the
court that explained all the background to the case – or they heard
testimony from people? You would contact the family of the deceased, get
records from people that lived in both areas, and gather as much factual
evidence from people and bills that you could. B)
6. A) I think you would have to discuss when to file the motion with your
client and the laws because of statutes of time limits. B)
When thinking about civil procedure, think about playing a game
First, you need to know the rules of the game
Second, you should know your opponents AND
Third, you should know your objectives of the game
When the game ends or your case is decided, then you will receive your
verdict
As a society, we want our cases to show us truth and justice in a fair
way – the correct person will win the case
However, when you are waiting for your verdict, you will want to win
– lawyers do pursue cases simply wanting to win
o However, the rules are set up to give us truth and justice
ultimately at the end
A lawsuit is a gamble
The Constitutional side of Civil Procedure
Jurisdiction – the power and authority of a court
o Personal jurisdiction – the power of a court over an individual
o Subject matter jurisdiction – the power and authority of a
court to hear this certain type of case
This also deals with general jurisdiction and limited
jurisdiction
Federal court has limited jurisdiction, whereas states
have general jurisdiction
o The federal government can only hear cases that deal with a
federal question – either federal law or the constitution – OR
party’s citizenship
A dispute between people of two different states and
the case must deal with more than $75,000
o Erie – what law does the federal court apply in a diversity case
dealing with parties of different citizenship
The Details of a Case
Incentives to Litigate and Pleading will end the semester
How to prepare for class
Read and brief all cases
Study all the rules that come up with cases – answer the notes and
problems that follow each hypo
Outline at the end of every section
The Principle behind Personal Jurisdiction
Think back to when you were a kid… you and your friend got into
trouble – you will not be disciplined by your friend’s parents
because they aren’t your parent
Basically, if a court doesn’t have power and authority over a party,
then that court cannot punish that person
o They will normally file a motion to dismiss the case because
the court does not have PJ over them
Even if you don’t live in a certain place, you can still be sued
somewhere because of different things:
o You go on vacation somewhere and commit a crime
o You own property somewhere else even though you don’t live
on that property
o The internet because of things you wrote about the other
place
Hawkins v. Masters Farms ,Inc.
--Facts
Creal was killed while his automobile was struck by a tractor owned
by Defendant just south of Troy, Kansas. At the time of his death,
Mr. Creal was living in Troy, Kansas. His death certificate lists
Kansas as his residence.
Until his death, Creal retained certain connections with the State of
Missouri. He applied for a Missouri title and license for his van/ he
applied for Missouri automobile insurance/ he renewed his Missouri
driver’s license, etc.
Plaintiff, the executor of Creal’s estate, brought an action against
Defendant in Federal district court, alleging diversity jurisdiction.
o Defendant disputed that there was complete diversity
between the parties, and moved to dismiss.
--Issue = What constitutes sufficient diversity of jurisdiction for bringing an
action in Federal court based on diversity jurisdiction?
--Holding = (D)’s motion to dismiss is granted
--Reasoning
A person’s domicile is taken from the person’s physical presence in
a state coupled with an intention to remain there. A court reviewing
a facial challenge must accept the plaintiff’s factual allegations
regarding jurisdiction as true.
As the party seeking to invoke Federal jurisdiction, Plaintiffs bear
the burden of proving that jurisdiction is proper.
For purposes of determining whether diversity jurisdiction exists, a
person is a “citizen” of the state in which he or she is “domiciled.”
For adults, domicile is established by physical presence in a place in
connection with a certain state of mind concerning one’s intent to
remain there.
--Significance
In holding Kansas as Creal’s domicile, the court focused on his
apparent intention to remain there. Specifically the Court referred
to the fact that Mr. Creal had had moved his clothes, some
furniture, pictures, photo albums, and other memorabilia into the
home he shared with Mrs. Creal and her children; he contributed to
household costs; and he purchased a new bedroom set with his wife
8/23/11 – pgs. 15-33
Stating the Case: The Lawyer’s responsibility
A complaint asks the court to use its power to grant plaintiff relief
The people who have this power also have the right not to invoke
the complaint for improper reasons or use
Bridges v. Diesel Services, Inc.
--Facts
Plaintiff is James Bridge and the Defendant is Diesel Services Inc. –
the complaint is under the Americans with Disabilities Act (ADA).
Bridge believes that he was dismissed from his job because of his
disability, thus violating the ADA
The case was dismissed because of a lack of administrative
remedies – basically, the lawyer forgot to file a complaint with the
EEOC which is stated clearly as a condition to be met before
proceeding with this kind of suit
The defendant filed a motion for sanctions on the lawyer because
he failed to file all the correct paperwork before filing the complaint
--Issue:
Should the court grant sanctions for the defendant under Rule 11 of
the Federal Rules of Civil Procedure?
--Holding
The lawyer had already figured out his mistake and was proceeding
to fix his mistakes – PLUS he filed a motion for suspension
(P)’s counsel did not display a competent level of legal research,
because if he had, he would have known about the EEOC filing
requirement.
But the court decided not to impose sanctions, because the prime
goal of Rule 11 sanctions is deterrence of improper conduct and in
this case, monetary sanctions are not necessary to prevent future
misconduct.
--What happens now?
The court could have sanctioned the lawyer for his failure to file
with EEOC, but they recognized a few things:
o They saw that the lawyer only made a procedural mistake, not
a substantive one – he corrected his mistake right after he
was informed
Instead of sanctioning the lawyer, they decided that he had learned
his lesson on his on without any need for real punishment
The court also dismissed the case without prejudice, meaning the
lawyer can re-file the complaint once he has met all the conditions
of this kind of suit
--The court also makes a distinction to show that Rule 11 is only to be used
in situations where the lawyer has gone above and beyond to mess up a
case – it is not to be used when someone makes a silly mistake
However, if and when the lawyer does re-file the complaint, he must
show that he is competent – he must do a stand-up spotless job on
this case because the court will be watching for any mistakes
--Rule 11 of the Federal Rules of Civil Procedure
All lawyers are subject to sanctions and punishments if we do not
follow all the rules and do the research we have to do in order to file
motions, pleadings, complaints, etc.
Malpractice and violations of the rule of ethics can come up through
this rule if the lawyer is found to have violated this rule
This also takes a huge dig on your reputation as a lawyer – they
even said in the decision that the lawyer was “incompetent”
o That will stick with the lawyer for a while – other lawyers will
know, possible clients will be able to find out, and judges will
remember what wrongs you have committed in court
While the sanctions can be lenient like this one, judges can decide:
o to dismiss your case completely with prejudice,
o make you pay monetary reparations,
o bring your law firm into the case, etc.
Always do your research and MAKE SURE you do exactly what you
need to do file anything or make any moves with a case or suit you
are pursuing
Notes and Problems on pg. 14-15
1. The lawyer did not meet all the conditions for filing this kind of suit
because she failed to file a complaint with the EEOC. The lawyer should have
done more research on this type of case before she filed the complaint in
order to discover what conditions and requirements were needed for this
type of case. The lawyer violated “warranted by existing law” in Rule 11b2.
2. A) The word in Rule 11c is “it must not be filed… if corrected within 21
days.” B) I think the court could have been more strict on the lawyer because
she did not follow procedure for filing this type of case because she simply
did not do the research for it – she should be thankful they did not do
anything worse to her, like monetary sanction or dismissing the case without
the ability to re-file.
3. The defendant is promised constitutional rights by the US, and one of the
those rights is that they will have due process of law. The defendant had a
right to file the sanction because if the court would have pressed on, then
the time limit would have been cut short thus not allowing the defendant to
prepare their case for the suit. B) ??
--Federal Rules of Civil Procedure
These rules are like statutes and the constitution in that they state
general rules, not instances and how those should be handled
specifically
However the rules do not differ from the statutes in 2 different
ways:
o The Rules are not directly enacted by the legislature –
Congress empowered judges in 1935 to write these rules with
a statute
o The Rules may only deal with practice and procedure – they
cannot affect any topic concerning the Constitution
There is a thin line between substance and procedure in
the legal profession
For example, the judges are not allowed to write a rule
the governs how to deal with damages from a breach of
contract – that is only a power of Congress
However, the judges are allowed to write a Rule
concerning the procedure to file a suit based on
damages from a breach of contract
The original Rules were not written by the justices, nor do the
justices themselves amend the Rules – the Chief Justice of US
Supreme Court appoints lawyers, judges, and professor to different
committees
o Committee on Civil Rules – considers proposed amendments
and changes to the legal profession; holds public hearings,
produces changes based on those hearings, and submits the
results to the Standing Committee
o Standing Committee on Rules of Practice, Procedure, and
Evidence – further considers and refines the amendments,
then passes them on to the Judicial Conference
o Judicial Conference of the US – presided over by the Chief
Justice of the US Supreme Court; this is the senior
administrative body of the federal courts, and it deals with
judicial discipline, assigning visiting judges, approving
requests for new courthouses, etc.
o Passes on proposed amendments to the Supreme Court
o Supreme Court – it takes along time to get here & and so
most Rules are approved by this point (although some judges
have dissented)
o However the proposed Rule is still not a law
o Congress – the proposed Rule is then passed onto Congress
before May 1 of that year, and Congress has till December 1
to amend the rule or pass a statute against it
Some minor changes have taken place to the Rules (like adding a
holiday) while some have been major (creating modern class action)
These Rules do not only affect the federal courts for which they
were created – some states have adopted the Federal Rules as heir
own procedure for lawsuits
--The Complaint: How are they filed?
Complaint: the initial pleading that starts a civil action and states
the basis for the court’s jurisdiction, the basis for the plaintiff’s
claim, and the demand for relief
Bell v. Novick Transfer Co
--Facts
Plaintiff filed a complaint alleging that the infant Plaintiff, Ronald
Bell, was driving in an automobile on Maryland’s public highways,
when he was run into and struck by an automobile-tractor owned by
the Defendant.
The complaint further alleged that the driver of Defendant’s vehicle
operated it in a careless, reckless, and negligent manner.
The complaint also alleged the injuries and damage, and that they
were the direct result of negligence on the part of the Defendant
--Procedural History
(D) moved to dismiss the complaint because
o 1) state a claim against the defendants,
o 2) it claims that the plaintiffs were injured because of the
negligence of the defendants, and
o 3) it fails to specify what the acts of negligence were
--Holding & Reasoning:
Defendant’s motion to dismiss was overruled. The Federal Rules of
Civil Procedure, specifically Rule 8, only require a “short and plain
statement of the claim showing that the pleader is entitled to relief.
Defendant is also not entitled to a “more definite statement by
motion under Rule 12(e).
--Discussion.
Where a Defendant needs further information to prepare his
defense, his appropriate recourse is not to file a motion to dismiss,
nor to file a motion under Rule 12(e) for a “more definite
statement” but instead to obtain the information by interrogatories
under Rule 33.Federal Courts only follow Federal Rules even if they
hear cases from state court
--What is official Form 9 in Appendix?
Notes and Problems
1. The defendants probably want to know exactly what types of negligence
took place so that they can either put together a defense as a group, or
move on with separate defenses. A) For the advantage of his case, he does
not need to tell the defendants everything and vice versa. B) Yes it would.
2. A) _____?? B) _____?
3. A) The suit was originally filed in a district court in Maryland. B) Yes it was
a mistake because Maryland maybe would not have allowed the complaint to
move forward because it did not include more detail about the case.
--The Response: Motion and Answers
Once the defendant has been notified of the suit/ charges against
him, he must give a response – the defense action
o In the example case of Peters v. Dodge, Dodge will contact his
insurer who will then hire a lawyer for the suit
o However, in a case dealing with liability, almost all liability
policies allow the insurer authority to settle the case – not the
insured
The insurer could decide to settle the case OR contest
the liability and litigate
The first thing to do if you decide to contest the complaint is to
respond to the complaint, and this is accomplished in two different
possible ways:
o A motion attacking the summons/ complaint, OR
o A responsive pleading (usually called an answer)
--Motions: Pre-Answer Motions
Motions are simply requests that the court to do something –
dismiss the case, enter judgment on verdict, etc.
o Lawyers talk about “moving” or “making a motion” – these
are tried in order to end the case or alter its shape
o An important characteristic: these motions take NO position
on truth or falsity of the plaintiff’s allegations
One motion has to do with ending the case because the action
simply should not be processed – ex. like a case in federal court that
does not have subject matter jurisdiction
Another motion has to do with ending the case because under
substantive law, the plaintiff has no right to relief – ex. the
defendant drives an offensive colored car
When a motion is filed, the other side will have to be notified of the
plan to make a motion, what kinds of motion, and the time and
place the motion will take place.
o Also, a memorandum of points and authorities will be given
o Also, include any evidence pertinent to the motion – like an
affidavit or copies talking about where the plaintiff and
defendant hold residence and their local affiliations
Then the judge can then do a few things:
o Hear the lawyers arguments for their individual clients
o Decide the motion on the spot, or reserve more time for
additional research and thought
o Give a tentative ruling and then allow the losing side to argue
against the ruling
Notes and Problems
1. The plaintiff simply wants the case to end of change?? The defendant
would then not have to answer because the case would be gone.
2. B and C are proper.
The Answer: response to the plaintiff’s allegations
If the defendant decides not to file a motion OR the court does not
grant the motion, then the defendant must give an answer
o Rules 7a & 12a: 21 days to file an answer, etc.
Two essential variations
o The defendant can deny the truth of the allegations; OR if he’s
not sure if the allegations are true, then he can deny them
until he finds out
o The defendant can claim an affirmative defense the will
wholly or partially defeat the plaintiff’s claim
Rule 8c – they can claim that the plaintiff’s own
negligence contributed to the car accident
The defendant can also make a claim of his own: counterclaim,
cross-claim, or third party-claim
o Counterclaim – a claim for relief asserted against an opposing
party after an original claim has been made
o Cross-claim – a claim asserted between co-defendants or co-
plaintiffs in a case and that relates to the subject of the
original claim or counterclaim
o Third party claim - ?????
Notes and Problems
1.
2.
3.
4.
5.
--Amendment of Pleading:
The Federal Rules reject the view that the case is set in stone once
the pleadings are completed.
o There can be amendments to cases and pleadings because of
discovery rules
Discovery rules can allow both parties to investigate into the claims
and gather further evidence
o Example: a man who is being sued by the victim of a car
accident actually finds out that the car belongs to the
defendant’s daughter – she can now be added as a defendant
Rule 15: deals with the evidence discovered during a trial, after the
trial is decided, and evidence found once the time has run out on a
case to appeal
--Parties to the Lawsuit
Even though some cases are just between one plaintiff and one
defendant, MOST of the time cases are brought to the court by
multiple people or a case is brought against multiple people
See Rules 19, 20, 23, and 24
o Rule 20: governs permissive joinder
This is the optional joining of parties together in a case
if 1) their claims or allegations are in respect the same
or the same situation, AND 2) any legal or factual
question common to all in the party will arise
They have a choice of who to join as a co-plaintiff/co-
defendant
Rule 19
Rule 23
Rule 24
Larson v. American Family Mutual Ins. Co.
-- Facts:
(P)’s original suit was filed against insurance company for failure to
pay homeowners claim. When original attorney commits
malpractice by failing to pursue the claim for personal reasons,
second claim is added against the attorney (attempting to make the
attorney a co-defendant)
--Procedural History:
Claim originally filed with attorney Ross-Shannon, but he didn’t
pursue the claim because he was pursuing a job to represent the
defendant. Plaintiff retained new counsel and filed in state court,
removed to federal court on diversity jurisdiction and then tried to
add the former attorney as a co-defendant.
Defendant objects because time expired and the two issues did not
arise from the same transaction.
--Issue: (a) Was motion to add the second claim timely? (b) Is the motion
allowed by the ‘same transaction’ rule?
Holding: (D)s are joined and the case goes back to state court according to
the rules of 28 USC §1447(e)
(a) Yes, claim was filed as soon as the plaintiff had adequate
evidence to file it.
(b) Yes, duties of each party may have been different, but the
breach was the same transaction.
Reasoning:
(a) Discovery happened in January 2007, and the claim was filed in
February 2007. Even though they may have known more
information, they waited for discovery to get hard evidence.
(b) Duties of each party may have been different, but the breach
came from same transaction and thus the claims can be joined.
Joiner is permitted if claims are
o (1) arising out of the same transaction, AND
o (2) contain a common question of law.
Notes and Problems
1. The plaintiffs wanted the case to be tried in state court anyway.
2. A) The defendant uses Rule 15 to prove that the claim should have been
made within 14 days, not several months. B) the original claim stated that
the insurance company had breached their contract and had failed to pay
them money that the company owed them – the defendant believes that he
had nothing to do with this action because he was not involved at this time.
C) _____???
--Factual Development: Discovery
Broad and deep discovery does define some of foundation of
modern civil procedure
o NOTE: questions of jurisdiction, pleading, and parties typically
takes place at the “pleading stage”
Discovery assumes that pleadings have occurred, and this stage
probes the facts beneath the parties contradictory allegations
against one another
o However, discovery is not fact investigation
Rule 11 states that lawyers are required to do some pre-pleading
investigation of the “facts”
o They can use observation, personal knowledge, or
conversations with anyone who will talk to them
o Example: the plaintiff who was harmed in the car accident is
also active in college sports – the lawyer can talk to the
coaches and teammates to see what his pre- and post-
performance was like; the lawyer can also hire a photographer
to take pictures of him practicing
Another problem is that most people close to someone involved in a
case will most likely not speak to a lawyer or make any comments
about the case to a lawyer
However, a major innovation in the discovery rules has a provision
that compels people involved in a lawsuit to cooperate in the
discovery of factual background
o Rules 26-37 and 45 give parties these powers
Rule 26: a party is required to reveal to the other party
basic info like names of witnesses, documents, etc.
26.B – info must be relevant to the case, & cannot
be included under privilege
26.C – the retrieve all the info may not be granted
if the act of retrieving it is “overly burdensome”
o Rule 33: parties may obtain other info by asking questions
through an interrogation
o Rule 34 and 45: requires the production of records
Rules of Discovery can also lead to allowing info to be found that
will weaken the other’s defense – so there are THREE restrictions
o Parties may discover evidence that is only relevant to a claim
or defense in the case
o Even if relevant, the requested info may be protected by
privilege
o Even relevant, unprivileged info may be undiscoverable if a
party can convince a court that its potential for harm will
outweigh its value
Under the Federal Rules, the provisions for broad discovery
implicitly suggest that dismissals should NOT occur until the parties
have had a full opportunity to obtain factual info about the case
**Magistrate Judge: they have the power to settle cases that are agreed to
be decided by this kind of judge; they handle organizing the council for multi-
district cases and class-actions; they deal with pre-trial motions; they are
usually unique to the Federal judicial system**
*The Magistrate’s ruling is just a suggestion for the district court*
Butler v. Rigsby
--Facts
Defendant made certain discovery requests from two medical
groups of the doctors that provided medical treatment to the
plaintiffs in the accident. He asked for numerous documents,
essentially every record they doctors had of their involvement in
litigation since 1992.
Both medical groups moved the court for a protective order
prohibiting the defendant from discovering the information
requested pertaining to their involvement in litigation on grounds
that it was not relevant to the lawsuit, is privileged, and that the
request was overly burdensome.
--Procedural History
The Magistrate ruled that most of the information was discoverable,
and this appeal followed. Then the medical group filed a motion for
protective order to protect them from complying with the
magistrate’s order
o Hospitals have argued a privacy violation because of
privilege, the information is not relevant to the lawsuit, and it
is extremely burdensome
--Issue = What is the scope of discovery in a civil proceeding?
--Holding = Hospitals must produce the documents
--Reasoning
Despite finding that the matter requested was discoverable, the
time and expense involved in producing it convinced the court to
order the defendant to pay one-half the cost of producing the
information.
The Federal Rules of Evidence contemplate liberal discovery and
provide for a flexible treatment of relevance. Under Rule 26(b) (1),
the scope of discovery includes any matter, not privileged, that is
relevant to the subject matter involved in the pending action. The
information need not be admissible at trial in order to be
discoverable if the information sought appears reasonably
calculated to lead to the discovery of admissible evidence.
However, discovery may be limited if the court determines that the
discovery sought is unreasonably cumulative or duplicative
--Significance
Essentially this case is an illustration of the broad range of
discovery powers granted parties under the Federal Rules, even
when it concerns non-parties.
Students should keep in mind that even where costs of discovery
outweighs the benefits, discovery may still be granted, although
reduced in scope from the amount requested
Notes and Problems
1.
2.
3.
4.
08/24/11 – class lecture
Appendix of Forms on page 171
Once you have done all the research you need to on the case, the court to
file in, what you want to file, etc., you will THEN file a complaint
You need to know the substantive law and place those facts into the
complaint before sending it to court
You can decide whether to put
o A lot of information
o Or only the necessary information
You may want as many details as possible because:
o This is the first time the court has seen your case – they can
see the terrible things the defendant has done to your client
o You will be able to possibly scare the defendant and his
defense attorney to make them maybe want to settle – to
show them how strong your case is
o You need to AT LEAST put enough details in the complaint so
that way the defendant cannot file a motion to dismiss the
case on grounds that there isn’t a REAL complaint
Notice pleading – you have to put enough info in your complaint
to tell the other party on notice of the lawsuit
There is NO Rule that states how much info you must put in a
complaint – no limit of what needs to be in there
If a court does dismiss the complaint because defense has proven
there isn’t a real complaint, then most courts will allow you to
amend the complaint without sanction
o Rule 15 is very liberal and this Rule guides this action
An example of a complaint is on page 19 in Yeazell
o The complaint MUST have information on it that proves the
allegation – you can’t just accuse someone of a crime if you
don’t have any facts
After the complaint is filed, the defendant MUST file a response
Federal Rules and state rules REQUIRE that a response be filed with
the court
o You will either admit or deny the allegation, OR that there is
not enough information in the complaint to continue on
Rules of Joinder
o This is when there are multiple plaintiffs, defendants, and/or
complaints in a case
o There can be an initial claim, and then a counterclaim can be
filed
Example: Peters files that Dodge wrecked his car by
running a red light – Dodge then files a response saying
that he is denying the complaint, and then files a
counter claim saying that Peters ran the red light and
wrecked his car
If Peters had a passenger in his car, then the passenger
could join in on Peters claim to sue Dodge.
Peters could also sue the company that made the car
because he has discovered something stating that
something in the car made Dodge wreck into Peters.
Then Dodge could say that he is not at fault here nor
was he negligent in this situation – he can file a cross-
claim to join Peters suit on the car company
Dodge can also file a third-party claim which would
bring a third party into the suit – Dodge could bring in
his insurance company because they had a contract of
insurance to protect him – both are at fault
o Class action – just how many plaintiffs do we want to put in
one lawsuit?
These came out of massive tort suits and consumer
issues – cards come in the mail talking about any kind of
injustice you have experienced
Example: a card come in the mail stating that your
energy company has overcharged you by $1 for the
seven years – if you discover this and there are 500
other customers who had this happen to then – this
would be a class-action suit
08/26/11 – pgs. 33-53
F. Pretrial Disposition – Summary Judgment
Not all cases should reach trial – trials involves substantial financial
and social costs; little purpose is served by unnecessary trials
Because of this, Federal Rules adopted summary judgment, which
provides a mechanism for deciding cases for which a trial is not
necessary and would serve no purpose
o Rule 56 regulates summary judgment:
o 56.A: a movant is entitled to this judgment by law if here no
genuine dispute of fact in the case
o 56.C: requires that a court grant summary judgment when
there is “no genuine issue to any material fact”
o 56.F: the decision of a motions for summary judgment will be
delayed in the opposing party has not or was not able to
complete their discovery
The court always tries to see if there is any genuine dispute of fact
BECAUSE that is supposed to be decided by the jury what is true
The court tries NOT to evaluate the creditability of witnesses – juries
decide the creditability
The court ONLY grants this if a case does not have enough evidence
that the case can go forward
--Default Judgment
Other times, a court will grant default judgment: Rule 55
o The defendant does not answer the complaint entirely, OR
o The defendant fails to defend completely, OR
o The defendant fails to show up for court
--Dismissal
If the plaintiff does not obey any order presented by the court, the
court can grant a dismissal: Rule 55
o The most common reasons for a dismissal are:
Failure to comply with discovery orders
Failure to prosecute the case
Failure to appear for calendar calls, motions, or pretrial
conferences
Also, a plaintiff can seek a voluntary dismissal:
o Plaintiffs will seek this if he/ she believes that their case will
be better off if they start over
Rule 41
Houchens v. American Home Assurance Co.
--Facts
Mr. Houchens disappeared in August of 1980, after traveling to
Bangkok on a vacation from work at International Civil Aviation
Organization. Mrs. Houchens wishes to collect on one of two life
insurance policies
o One policy covers Mr. Houchens for occupational accidental
injury or death
o The other policy covers Mr. Houchens for non-occupational
accidental injury or death
Mrs. Houchens brought an action to declare Mr. Houchens legally
dead by Virginia law in 1988 – the order was issued in 1988 stating
the Mr. Houchens was indeed presumed dead.
American maintains that they are not obligated to pay either of the
two policies because there is no evidence of Mr. Houchens’ death
nor any evidence of an accidental death
--Procedural History
American filed for a summary judgment based on their position in
the trial court (no dispute of fact), which was granted in favor of
American – the suit was dismissed
Mrs. Houchens is appealing the case against the summary judgment
granted by the trail court
--Issue = Was the summary judgment granted by the trial court granted
erroneously based on the evidence presented at trial?
--Holding = The summary judgment STILL stands because Mrs. Houchens
was not able to provide sufficient evidence of the accidental death.
--Reasoning
The burden was on Plaintiff to prove that her husband died by
accidental means. A District Court does not err in granting summary
judgment where a jury could not reasonably conclude that it is more
likely than not that the Plaintiff can prove the elements of his claim
Mrs. Houchens never provided the evidence needed to prove the
existence of the accident – No bizarre circumstances surrounding
his disappearance, NOR was he seen in any grave danger
The very small amount of details provided by Mrs. Houchens about
the “presumed” death of Mr. Houchens would not provide enough
detail for a jury to decide the case
--Significance
Summary judgment is mandated against a party who fails to make a
showing sufficient to establish the existence of an element essential
to that party’s case, and on which that party will bear the burden of
proof at trial.
G. Trial
Around 5% of cases actually see trial, and a great number of those
cases are settled during the trial or in the appellate stage
When a trial does occur, it consists of opportunities for each side to
present their case before the court judge or jury
The plaintiff will have an opportunity to do the following (which the
defendant will also have the same opportunity):
o Make an opening statement
o Present his case
o Make a closing statement
There are also smaller details:
o For each witness, one side gets to examine that person and
then the other side will cross-examine the witness
o This takes places to draw out the witness’s story
Witness testimony also brings out two major principles:
o The parties are responsible for proof, and
o The party going first bears the burden of providing evidence
and persuading the trier of fact that their version is more
likely to be true
--Judgments of the Court
A judge is placed in the courtroom in a jury trial to make sure there
is enough evidence being presented that a reasonable fact-finder
can find a verdict
Trier of fact is normally a jury in US courts, which is provided for in
the US Constitution in the 7th Amendment
However, a judge has power over a jury:
o A judge can limit a jury’s power in a civil case
o A judge may refuse to submit a case to a jury
o A judge may grant judgment by overturning the jury’s verdict
--Directed Judgment or Directed Verdict: Rule 50
Directed judgment: a party moves for this before the jury even
reaches its verdict
o The jury is dismissed and the judge decides the case
o The judge basically grants this when he decides that there
isn’t enough evidence to present opposing sides
The opposing party can move for directed judgment after the
plaintiff has rested their case, OR whenever they feel after that
--Judgment Notwithstanding the Verdict: Rule 50
JNOV : after hearing the jury’s verdict, the judge can decide the
case by overturning the jury’s verdict of the case
The judge is able to use this type of judgment when he feels that
the jury had no option but to reach a certain verdict because of the
facts
Norton v. Snapper Power Equipment
--Facts
Plaintiff was using a mower manufactured by Defendant on January
24, 1983. Plaintiff testified that as he drove up an incline, the
mower began to slide backward towards a creek, despite the fact
that he was applying the brakes. The lawn mower, with Plaintiff still
aboard, crashed into the creek. At some point during the crash,
Plaintiff’s hand was caught in the mower’s blade, and four of his
fingers were amputated.
--Procedural History
Plaintiff then sued Defendant. The jury returned a verdict in favor of
Plaintiff. Upon dismissing the jury, the district court issued a
judgment notwithstanding the verdict. This appeal followed.
--Issue = When should a court grant a JNOV?
--Holding = The trial court’s directed judgment is reversed to show the jury’s
verdict instead, which is in favor of the plaintiff
--Reasoning
There was enough evidence presented by the plaintiff that the jury
could have reached their verdict reasonably (the defective dead
man device)
Although the evidence was circumstantial, it was also very
impressive – experts testified that if the “dead man” device had
been effective, the injury could have been avoided
Only where the evidence so strongly and so favorably points in the
favor of the moving party that reasonable people could not arrive at
a contrary verdict. The jury is permitted to reconstruct the series of
events by drawing an inference upon an inference.
H. Former Adjudication
Adjudication: the legal process of resolving a dispute, or the
process of judicially deciding a case
Double Jeopardy: prevents a person from being tried twice for the
same crime
o This is also included in Civil Procedure, where a plaintiff who
brings a case, or a defendant who defends one, SHOULD NOT
be able to try again if he is not satisfied with the result
o This is called Former Adjudication, or Res Judicata
--Former Adjudication – Claim Preclusion OR Issue Preclusion
Claim preclusion: if Plaintiff A sues Defendant B and loses OR is
not satisfied with the money awarded, A cannot sue B again; OR if A
wins, B can appeal – BUT B cannot bring about a second action to
set aside the first judgment
o Doctrine of res judicata For this to apply, the claim MUST
BE the same in both the first and second action
o Example: A can’t sue B for injury to his arm in one case, and
then injury to his leg in another case
Issue preclusion: you can’t re-litigate issues over and over again
in the court
o Example: A sues B on a promissory note, and B claims fraud;
well A wins the case and then brings B into another suit with a
different promissory note; B cannot claim fraud again based
on the first case because that issue was already decided and
stands away from the issue in this second case
Some states used to allow property damage and personal injury to
be separated in lawsuits legally – however, most courts now enforce
that all people must bring about all claims in one suit from one issue
o Doctrine of collateral estoppel
Example: from the case below, the decision on Mrs. Rush’s case for
City’s negligence could be seen as binding if the next suit from this
issue is filed by Mr. Rush for City negligence
Rush v. City of Maple Heights
--Facts of Both cases
Plaintiff was riding her motorcycle with her husband one day, when
they hit a hole in the road, which caused substantial damage to the
motorcycle and injuries to the plaintiff
--Procedural History
(P) first filed suit against the City for the damages to her motorcycle
(property), which (P) wins; THEN (P) filed second suit against the
City for her personal injuries (legally able to do this because of
claim preclusion!!)
o (P) argues that the previous decision on City’s negligence for
her property is binding on the second suit of personal injury
The court handed judgment in her favor for personal injuries
The defendant then appealed the second lawsuit on basis of issue
preclusion, claiming that the first suit should have included both the
property damage and the personal injuries – (D) claimed that the
second suit was not valid
--Issue = Is the second suit filed by the plaintiff valid on the basis of issue
preclusion?
--Holding = The previous personal injury judgment is reversed, and the
judgment is handed down in favor of the defendant.
--Reasoning
Where a person suffers both personal injuries and property damage
as a result of the same wrongful act, only a single cause of action
arises because the different injuries are really separate items of
damage from the single act
The plaintiff should have included her personal injuries in the first
suit because the second suit is not valid
--Significance = This case expresses the general notion in civil procedure
that a plaintiff who brings a case, or a defendant who defends one, should
not be able to try again in a later suit if he is not satisfied with the result in
the first suit.
However, as this case also demonstrated, not every court agrees
that a plaintiff’s claims for personal injuries and property damage
arising out of the same accident are part of the same claim.
The court in this case adopted this majority view, refusing to allow
Plaintiff to sue for personal injuries in one action, and property
damage in the later action
I. Appeals
Our judicial system permits losing parties to appeal an adverse
judgment of a lower court to a higher court
o Circuit courts of appeal are numbered 1-11
o The DC circuit appeals to the DC Circuit Court of Appeals
o Federal court appeal to the Federal Circuit of Appeals
After the court of appeals for any level of government, the next step
for appealing a case goes to the Supreme Court
These address the correctness of trial court rulings that are likely to
have affected the outcome
o Appeals cannot be used to correct counsel’s mistakes during
the first trial or during pretrial proceedings (even if they
affected the outcome of the case)
o Errors from prior cases are what is used for appealing a case
o You must object to errors happening during the trial so that
way you could appeal the case later
o Example: if (D) wants (P) to produce documents for a lawsuit,
but the trial court does not allow your objection – you must
wait until later to file an appeal on the decision of (P)’s
objection to produce documents
o There would be no point in allowing each person to appeal
each action in a case that does not go the way a party wants
it – there would never be any trials!
Apex Hosiery Co v. Leader
--Facts
Plaintiff filed an action for treble damages under the Sherman Anti-
Trust Act. Apex then made a discovery request of the Defendant for
the discovery and production by them of documents for inspection,
copying and photographing for the Plaintiff’s use at trial.
The District Court ordered the production of the documents
pursuant to FRCP 34. Defendant now appeals that order
--Issue = Is a discovery order issued by trial court appealable?
--Holding = The Third Circuit dismissed the appeal and upheld the order for
production.
--Reasoning
An order of this nature is interlocutory, and therefore, not
appealable. It is only when refusal to comply with a discovery order
happens to result in an order punishing criminally for contempt that
a party may have review by appellate proceedings before a final
judgment is issued
The Court found that the disposition of the discovery motion would
determine the conduct of the trial and likely the outcome as well.
Thus, like other motions made prior to or during trial to secure or to
suppress evidence, unless the court order results in the opposing
party being held in contempt, the Court will not review an appeal of
a discovery order so long as the order is carefully drawn so as not to
unduly pry into the opposing party’s affairs
Notes and problems
If the case is dismissed on the basis of lack of evidence, then you
can appeal the case.
08/30/11 Pg. 55-75
A. There are two approaches to looking at the procedural system:
--Top to Bottom – starts with the constitutional environment in which the
lawsuit exists
This approach goes from between the history and current
interpretation of the US Constitution
Studying the Constitution reveals several limits on the ways state
and federal court systems conduct business – these limits have
severe consequences for individual litigants
--Bottom to Top – starts with the life cycle of each individual lawsuit
Life cycle: how the parties initially state their grievances, develop info about
them, and bring them to resolution
B. Constitutional Limits in Litigation
1. The Idea of Jurisdiction
Jurisdiction, more or less, means “the power to declare the law”
Think about if you had a problem with the landlord of your
apartment – you would not complain to the landlord of another
apartment complex because they do not have “jurisdiction” to help
remedy your complaint
“The law of jurisdiction” and “legislative jurisdiction” tend to signify
a state or territory whose government has the power to make law
within its bounds.
Judicial jurisdiction: the power of a court to render a judgment that
other courts and government agencies will recognize and enforce.
o If the reason or situation for filing a lawsuit took place in
California, you would have a hard time being able to file the
suit in a Louisiana court – LA does not have jurisdiction over
the matter because it took place somewhere else
o The only way you would be able to file a suit in a federal court
would be if
It fell under federal law, OR
You and the other party are of diverse citizenship
look on page 57 for picture!!!
2. Jurisdiction and the Constitution
A court needs two different types of jurisdiction – they are both
necessary ingredients of any court’s power to render a binding
decision in a case
o Personal Jurisdiction: a court’s power to bring a person into
its adjudicative process; jurisdiction over a defendant’s
personal rights, rather than merely over property interests
o Subject Matter Jurisdiction: jurisdiction over the nature of
the case and the type of relief sought; the extent to which a
court can rule on the conduct of persons or that status of
things
No single government entity has plenary power – this is set out in
our US constitution by our checks and balances
Because the US Constitution defines the lines of authority among
the competing centers of power, courts look to the Constitution for
their basic framework in deciding issues of judicial jurisdiction
3 parts of the Constitution bear on jurisdiction:
o Article III, Section 2 – authorizes the establishment of the
system of federal courts & sets the limits of the federal
judicial authority
Congress has the power to restrict the scope of federal
judicial authority
This deals with subject matter jurisdiction
look on page 57 for picture!!!
o Article IV, Section 1 – requires that “Full faith and credit… be
given in each state to judicial proceedings of every other
state”
Supreme Court has interpreted this to mean that one
state must recognize and enforce judgments of another
state
Deals with personal jurisdiction
Example: if A sues B in Louisiana state court, and A wins
$$$ from the judgment – if there are no assets in
Louisiana of B, then A may file the suit in the state that
has B’s assets – that other state must recognize and
enforce the judgment of Louisiana state court
However, the other state only needs to recognize this
clause when the judgment comes from a court that had
jurisdiction over the suit
o 14th Amendment, Section 1 – no “state shall deprive any
person of life, liberty, or property without due process of law”
This has proved to be one of cornerstones of modern
constitutional and procedural theory
Deals with the notorious Pennoyer v. Neff case and
personal jurisdiction
3. The Constitution and Choice of Law
The US Constitution shapes US litigation by dictating which set of
laws a court must apply to a dispute. It does this in 2 ways:
Article VI – provides that the Constitution and federal laws “shall be
the supreme law of the Land; and the Judges in every state shall be
bound thereby, any Thing in the Constitution or Laws in every State
to the Contrary notwithstanding”
o Referred to as the Supremacy Clause
o Basically, if Congress enacts a statute that deals with a
particular subject, then both federal and state courts are
required by law to enforce the federal statute (even if there is
a contrary state statute or state common law)
o In the absence of a controlling federal statute, the federal
court system is required to respect both the statutory and
common law rules of the several states
PERSONAL JURISDICTION, CH. 2
A. Origins
This is part of US constitutional law because of Pennoyer v. Neff –
the case whose deceptively simple facts spawned a new doctrinal
elaboration
Background of Pennoyer v. Neff
o One of the more difficult parts of a lawsuit is when the plaintiff
tries to collect from the defendant who declines to pay
o When this takes place, a plaintiff may obtain a writ of
execution from the court, which will authorize:
The sheriff to seize any property belonging to the
defendant,
Sell the seized property, usually through auction, AND
Give the resulting money to the plaintiff
Once the property is sold, the sheriff will give the buyer
a “sheriff’s deed” as evidence of an ownership title
o Constructive notice – generally constructive means
“fictional” or “pretend”
If a defendant cannot be found to be served notice of a
lawsuit, then some states will provide notice in a
newspaper
This notice through the newspaper is called
“constructive notice” because the defendant is very
unlikely to see it
o Attachment – the legal term for an officially sanctioned
seizure of property
Pennoyer v. Neff
--Facts
Mitchell brought suit against Neff to recover unpaid legal fees.
Mitchell published notice of the lawsuit in an Oregon newspaper but
did not serve Neff personally. Neff failed to appear and a default
judgment was entered against him. To satisfy the judgment Mitchell
seized land owned by Neff so that it could be sold at a Sheriff’s
auction. When the auction was held Mitchell purchased it and later
assigned it to Pennoyer.
--Procedural History
Neff sued Pennoyer in Oregon federal district court to recover
possession of the property, claiming that the original judgment
against him was invalid for lack of personal jurisdiction over both
him and the land.
The court found that the original judgment in the lawsuit was invalid
and that Neff still owned the land.
Pennoyer lost on appeal and the Supreme Court granted certiorari.
--Issue = Can a state court exercise personal jurisdiction over a non-resident
who has not been personally served while within the state and whose
property within the state was not attached before the onset of litigation?
--Holding = judgment for Neff is affirmed
--Reasoning
A court may enter a judgment against a non-resident only if he
o 1) is personally served with process while within the state, or
o 2) has property within the state, and that property is attached
before litigation begins (i.e. quasi in rem jurisdiction).
Since the adoption of the 14th Amendment, the validity of judgments
may be directly questioned on the ground that proceedings in a
court of justice to determine the personal rights and obligations of
parties over whom that court has no jurisdiction do not constitute
due process of law.
o Due process demands that legal proceedings be conducted
according to those rules and principles which have been
established in our systems of jurisprudence for the protection
and enforcement of private rights.
To give legal proceedings any validity, there must be a tribunal with
legal authority to pass judgment, and a defendant must be brought
within its jurisdiction by service of process within the state, or by his
voluntary appearance.
The substituted service of process by publication in actions brought
against non-residents is valid only where property in the state is
brought under the control of the court, and subjected to its
disposition by process adapted to that purpose, or where the
judgment is sought as a means of reaching such property or
affecting some interest therein; in other words, where the action is
in the nature of a proceeding in rem.
The Oregon court did not have personal jurisdiction over Neff
because he was not served in Oregon. The court’s judgment would
have been valid if Mitchell had attached Neff’s land at the beginning
of the suit. Mitchell could not have done this because Neff did not
own the land at the time Mitchell initiated the suit. The default
judgment was declared invalid. Therefore, the sheriff had no power
to auction the real estate and title never passed to Mitchell. Neff
was the legal owner.
Notes and Problems
1. A) I believe Neff only learned of the original suit after learning that his
property had been seized by the sheriff and sold to Pennoyer. B) The
absence of a notice is a strong objection because the notice in this case was
in a different state than the Neff was residing, plus he was not a domicile of
that state either. C) The court does discuss this objection, and decides that in
the Code of Oregon, notice can be fulfilled through a newspaper for the
defendant to learn about the lawsuit. The notice in the paper, however, can
apply to a non-resident of the state, BUT the property in the proceeding must
be attached to the original suit.
2. The property would had to have been attached to the litigation at the
beginning of the suit – it could be attached after the judgment had already
been handed down to satisfy payment. Another way is if Neff would have
appeared in the original suit – then the courts could have taken his property
and used it to satisfy the original judgment.
3. A)???? B) All cases following Pennoyer v. Neff deal with the tricky line
between blocking interstate commerce and avoiding abusive litigation.
4. A) To gain personal jurisdiction over a person, the state must serve proper
notice over the person according to the other state’s laws. The Oregon court
could gain jurisdiction over Neff because: -Neff was not a resident of the
state of Oregon, nor was he even present in the state when the notice came
out; -Mitchell needed to sue Neff in Neff’s own state, or served Neff
personally in his own state so that way he would appear in court. B) The
Oregon court did not seize the property from the outset of the trial because
Neff did not own the property at the outset of the lawsuit – they merely took
the land after the judgment was handed down to satisfy the compensatory
element of the judgment. C) A state can have court proceedings that hand a
judgment down against the defendant of another state, but that judgment is
only binding in that state and ONLY when the defendant returns to the
court’s state????
5. Neff never appeared in court for the first lawsuit brought by Mitchell,
because he was not given proper notice of the lawsuit NOR was he ever told
about the judgment handed down against him???
6. A) B can’t dismiss the case because they have taken the action in his own
residential state. B) The judgment would be enforced because it came from a
North Dakota court, which is where the resident lives – thus the judgment
was handed down with personal jurisdiction. C) B could move for dismissal
because the action against him is not served to him in his residential state,
unless his residential state agrees to enforce the judgment?? D) They will
enforce it under full faith and credit; once ND court agrees to enforce the
judgment from Missouri, then jurisdiction doesn’t matter?? E) because A
attached the land to the suit before judgment was handed down, A can sell
the property. F) Sounds like Pennoyer – there will be no enforcement of the
judgment because there is no basis for jurisdiction. G) What might happen
here is that the Minnesota court can grant the divorce because states have
the power to determine status of its residents. H) The Minnesota court
cannot do anything about the other person’s money or the child because
they do not have jurisdiction over the money or the child – the court only has
jurisdiction over the status of its resident. I) ND needs to abide by the ruling
of Minnesota – B should have remedied by appealing the decision with
Minnesota courts about error of their jurisdiction.
7. A) The Amendment should have applied because it is part of the US
Constitution guaranteeing citizen rights in trial, and it has binding authority
over all cases.
8.
Notes on Mechanics of Jurisdiction: Challenge and Waiver
Collateral attack: this is what happens when (D) if sued by (P) in
another state court besides the one that (D) is a resident of. If (D)
believes that the other state court does not have jurisdiction on
himself, then he simply will not have to answer the suit
o After the default judgment is handed down in the other court
and the (P) goes to file the judgment with (D)’s state court,
then (D) simply had to battle the judgment from the other
state, claiming they do not have jurisdiction over him.
Jurisdiction is the only thin subject to collateral attack
A defendant may raise jurisdictional defense either in his answer to
the lawsuit or by filing a pre-answer motion.
o Any pre-answer motion that omits a defense of personal
jurisdiction is treated as waiver of jurisdiction.
Defendant can appear in court, file a motion, or file an answer that
asserts their belief that the court lacks jurisdiction – however,
defendant must raise this issue the first time he raises any issue in
the suit, otherwise he loses the right to raise the issue of jurisdiction
o If defendant files an answer stating lack of jurisdiction, he
must also file to dismiss the case based on that answer
o Only a few states will allow a defendant a “special
appearance” to assert lack of jurisdiction because most
believe that if you show up to the case, then you are
consenting to that court’s jurisdiction
If defendant asserts that the court lacks jurisdiction but the court
rules that it does, when can the defendant file an appeal based on
court’s error based on lack of jurisdiction?
o Most states and federal courts require that defendant can’t
appeal jurisdiction until after the final judgment
The Mechanics of Jurisdiction: Challenge and Waiver
-Hypo about Abe and Barbara
Abe from Kentucky sues Barbara from Illinois in Kentucky court.
Barbara believes the Kentucky court lacks personal jurisdiction over
her. to assert this claim, Barbara’s options are:
o Object to the Illinois lawsuit by filing a pre-answer motion –
motion is to dismiss based on lack of personal jurisdiction
o Do nothing, and then collaterally attack when the default
judgment is sent against you
o File an answer – the answer would include her objection to the
court’s jurisdiction over her & motion to dismiss
Notes and Problems
B. The Modern Constitutional Formulation of Power
Pennoyer left A LOT of gaps for modern legal procedure
Power, consent, and notice all play a very important part in today’s
jurisdictional thought
1. Redefining Constitutional Power
Milliken v. Meyer
--Facts
Two partners in an oil well sued one another. Milliken (P) is a
resident of Wyoming and so is Milliken (D), and (P) filed a suit
against (D) in Wyoming state court.
(D) was served in Colorado at the time of the suit, where he was
hiding from the lawsuit; of course, (D) did not appear in court in
Wyoming because he was in Colorado during the suit.
--Procedural History
Thus a default judgment was entered against Meyer, for failing to
appear in court. After Milliken filed suit to enforce the judgment,
Meyer then collaterally attacked the judgment against him asserting
a lack of basis because of lack of jurisdiction
--Issue = Is domiciliary status in state court alone sufficient to establish
proper nexus to establish personal jurisdiction over an absentee defendant
who is served out-of-state?
--Holding = The original judgment against Meyer was valid – the court
claimed that Meyer was given full notice of the suit because he was
personally served by the Wyoming court while he was in Colorado
--Reasoning
Wyoming had a statute about service of process, and the Court
needed to decide whether that statute was constitutional
Based on Pennoyer, this service would not have been proper – they
would have had to do in rem jurisdiction.
However, the Court holds that this satisfies due process as long as
the process is reasonably calculated to give notice of the suit and
an opportunity to be heard, so that traditional notions of fair play
and substantial justice will be satisfied [constitution]
They also held that Wyoming still had authority over Meyer even if
he was not present in the state because he still expected protection
from Wyoming so he was still subject to their laws
o Just because he was absent from the state at the time of the
proceeding in court, he still is subject to their laws and court
proceedings because he was domiciled (resident) there
--Significance = Court held that domicile is NOT contingent upon continuous
presence in the state & domicile in a state creates personal jurisdiction.
09/04/11 – pgs. 75-95
International Shoe Co. v. Washington
--Facts
(P) International Shoe [a Delaware Company whose actual principal
location is in Missouri] had several sales associates located in the
state of Washington (D) during 1937-1940.
(D) has a state statute that designates that each corporation in the
state must pay taxes under Employment Compensation Act. (P) did
not pay this tax, SO (D) later sent a notice through the mail to the
Missouri location and also served a salesman of (P)’s company
about the lack of paid taxes.
(P) showed up to court claiming that:
o the notice of the suit was not proper service,
o (P) was not a corporation in (D)’s state & was not doing
business in that state,
o (P) had no actual agents in that state with whom the suit
could be properly served, AND
o (P) is not an employer and thus does not fit under the state’s
statute
--Procedural History
(P) went to the agency and appealed the order to the administrative
tribunal, who then said that the order was mandatory to pay the
taxes back to the agency. (P) then appealed this to the State
Superior Court.
o Superior Court rules against (P) saying that (D) does have
jurisdiction over (P)
(P) now appeals the original judgment to the US Supreme Court
stating that Washington does not have jurisdiction over (P)’s
company, nor can Washington receive compensation from (P)’s
company because (P) is not “present” in the state so taxation would
be a violation of the due process clause
o (P)’s actions within the (D)’s state were not sufficient for
presence conferring jurisdiction
--Issue = Did International Shoe’s activities in Washington make it subject to
personal jurisdiction in Washington courts?
--Holding = Washington has jurisdiction to bring suit because (P) established
its “presence” in the state through its contacts.
--Rules & Reasoning
RULE: Pennoyer establishes that requirement of proper service of
process & the Due Process clause establishes that defendant is
subject to jurisdiction if he has minimum contacts with the forum
state where a suit would not offend “traditional notions of fair play
and substantial justice”
o Due Process is satisfied by looking at quality and nature of
activities in relation to fair and orderly administration of laws
Washington has jurisdiction because
o (P)’s activities were continuous and systematic in the state
during this time because they resulted in a large volume of
interstate business & (P) received the benefits of protection
under Washington law
o The suit here arises out of those contacts^
While the inconveniences presented to (P) by the suit in the forum
state do matter, in this case (P) subjected itself and consented to
jurisdiction through its contacts with the forum state
--Policy
The Court changes the definition of “presence” in this case – it is
now based on quality of contacts and activities in the state
o The Court foresaw all the issues that were to follow with
corporations in the US, so they changed it
--Evaluation = Minimum contacts with the forum state can enable a court in
that state to exert personal jurisdiction over a party consistent with the Due
Process clause.
A casual presence of a corporation or its agent in a state in single or
isolated incidents is not enough to establish jurisdiction.
Acts of agents of the corporation, because of the nature, quality,
and circumstances of their commission, may be deemed sufficient.
o Consent may be implied from the corporation’s presence and
activities in the state through the acts of authorized agents.
****When you get a PJ question on the exam, you need to test whether there
are minimum contacts with the state so that exercise of jurisdiction does not
violate the traditional norms of fair play and substantial justice****
Contacts can be continuous and substantial, OR contacts can be superficial
OR casual
--Does the suit arise out of the corporation’s contacts in the state, OR does
the suit arise because of something else?
If the contacts are continuous and substantial, AND the suit arises
out of the contacts in the state – then the state has jurisdiction
If contacts are continuous and substantial, BUT the suit does NOT
arise out of the contacts – then the state MAY have jurisdiction (if
the contacts are STRONG enough)
If contacts are casual, and the suit arises out of the contacts – then
the state has jurisdiction BC
o Someone is taking advantage of the rights, benefits, and
protections of that other state
--Hypo: if Michigan girl comes here to LA during a TS weekend, and she hits
an LA resident with her car – can LA girl sue her? YUP because the suit arises
out of the contact, even though the contact is minimal
If contacts are superficial, and the suit does not arise out of the
contacts – does not have jurisdiction
Hypo: Michigan girl comes down here, but after going back to Michigan
decides to sue somebody over property in Michigan – she chooses LA court.
NO jurisdiction because the contacts are NOT real, PLUS there is a violation
of fair play and substantial justice
Notes and Problems
1. A) B) C) The facts of the case would have to have changed by the
corporation’s lack of presence in the state – as in, the corporation did not use
the state’s laws as protection from its citizens AND the court’s enforcement
of those laws of protection.
2. What does the court mean when it says that a defendant must “have
certain minimum contacts with it such that the maintenance of suit does not
offend ‘traditional notions of fair play and substantial justice”? If the people
of this corporation were freelancers, I think the judgment would have differed
because then those people would not be considered real “employees” of the
corporation because of their lack of contract with the corporation; they do
not work for any certain corporation, instead they work for several. ****Meet
with Algero to discuss these issues****
3. General Jurisdiction versus Specific Jurisdiction – GJ says that, according to
this case, that any state can sue a corporation on issues that do not reside
within that corporation’s operations in the state; SJ says that a person’s
claim may only be valid by jurisdiction if the instant in which it regards. That
is, the jurisdiction only exists only because of the specific claim, but would
not apply in other claims.
4. A) I believe that Wyoming would have jurisdiction in this case only
because of the case’s specific circumstances – the suit arises out of the
contact even though they are not that strong. **The company benefitted
under Wyoming’s benefits and protections by law. B) **Wyoming would not
have jurisdiction over this case because of the minimal contacts and the suit
does not arise out of the contacts: when the woman worked for the
corporation, the location and activities took place in Missouri. The activities
and operations that took place during her employee never touched Wyoming
nor affected her life there. C) In this case, the contacts are strong and the
suit does not arise out of the contacts, SO the rancher would have
jurisdiction in Missouri because that is the home of the corporation. The
employee would not have trouble suing in Missouri because the employment
contract would be in Missouri – strong contacts. D) The rancher would have
to sue for the unpaid interest in Missouri because his shares are part of the
company in Missouri and are not affected by his location in Wyoming.
5. ????????
McGee v. International Life Insurance Co.
--Facts
The deceased, Franklin, obtained a life insurance policy from (D);
(D) sent mail to Franklin about the policy, and Franklin accepted the
policy. He then sent premium payments through the mail from his
California residence to (D)’s office in Texas until his death.
The beneficiary from the policy notified (D) that Franklin has died,
but (D) refused to pay out the policy.
--Procedural history
(P) brought suit against (D) in California claiming that (D) owed
payments from the policy. Notice of the suit was sent to (D) in
Texas, and a California court handed down a judgment saying that
(D) owed the payments.
(D) then appealed the Cali judgment to Texas court stating that
California did not have jurisdiction over (D) in the suit, thus making
the judgment not binding. Appeal was ruled in favor of (D) stating
that service or process was wrong.
(P) then appealed this case stating that a binding contract was
formed between Franklin and (D).
--Issue = Can a state exercise jurisdiction over a defendant whose contacts
with that state are limited to a single act or contract?
--Holding = YES but very narrowly. Cali does have jurisdiction over (D) in this
case because (D) had a substantial connection to the forum state
--Reasoning
In considering the contract was delivered in Cali, the premiums
were mailed from Cali, and the insured was a resident of California
when he died, combined with the recognition that modern
transportation and communication have made it much less
burdensome for a party sued to defend themselves in a state where
they conduct business, (D) is subject to jurisdiction in Cali.
There is no violation of just and fair play for the Cali court to enter a
binding agreement on (D).
Moreover, the Court reasoned that California residents would be at
a severe disadvantage if they had to leave their own state to obtain
payment from their insurance company
If (D) did not want to be subject to jurisdiction under Cali, then (D)
should not have made contact with the Cali resident.
--Policy = A state may exercise jurisdiction over a D whose contacts with that
state consist of only a single act, provided that that act is what gave rise to
the claim for which jurisdiction is being sought, and was deliberately directed
toward the state.
A state has a manifest interest in providing effective means of
redress for its residents when their insurers refuse to pay claims
Hanson v. Denckla
--Facts
Mrs. Donner created a trust with a Delaware bank, who was the
trustee. Mrs. Donner lived in Pennsylvania at the time of creating
the trust, but then she moved to Florida where she later died. Her
will was probated in Florida, where she was later domiciled.
Denckla and Stewart are the greedy daughters who only want to
split the trust between themselves – they say FL has jurisdiction.
Hanson is the other daughter who wants to split the money between
all 3 of them equally – she claims FL doesn’t have jurisdiction.
--Procedural history
(D) Denckla and Stewart brought the first suit in Florida court to get
the $$ from Donner’s trust.
--Issue = Is a non-resident corporation with no offices nor any business
transactions in forum state subject to jurisdiction in forum state by virtue of
plaintiff’s unilateral activity with defendant?
--Holding = Florida did not have jurisdiction over the trust.
--Reasoning
Delaware bank has no contacts within Florida except that its client
moved there. The trust was made in Delaware – which shows a
unilateral relationship between Donner and the bank.
o Donner reached out to make the original connection while in
Delaware
To constitute a contact with forum state, there must be some act by
which the defendant purposefully avails itself of jurisdiction but
maintains privilege of conducting activities within the forum State,
thus invoking the benefits and protections of its laws.
The unilateral activity of those who claim some relationship with a
nonresident cannot satisfy the requirement of contact with the
forum State.
--Significance
After moving to Florida, Donner continued her already established
trust – she sought out the bank; whereas in McGee, the insurance
company reached across state lines to make the connection and
continue it.
Notes and Problems
1. Due Process Clause deals with any court in the US who wants to exercise
personal jurisdiction over any individual in the US.
It never depends on whether the case was tried in Florida or Cali –
the clause has to be applied the same way to every case
2. purposeful availment: did the defendant purposely avail themselves from
the ___
In McGee, the defendant did purposely avail itself from jurisdiction –
they reached across state lines to make the connection.
In Hanson, the defendant did not purposely avail itself from
jurisdiction – they made the connection in Delaware, not in Florida.
--Jurisdiction Types:
In Rem
Quasi in Rem
In Personam
***In rem jurisdiction deals with the property or status as the primary object
in the suit, rather than in personam jurisdiction which deals with personal
liabilities not necessarily associated with the property***
--The Modern Constitutional Formulation of Power (cont’d)
2. Absorbing In Rem Jurisdiction
The International Shoe case did not deal with jurisdiction over
individuals – only jurisdiction over corporations; it also did not deal
with in rem jurisdiction OR quasi in rem jurisdiction.
One of the most interesting things about quasi in rem jurisdiction,
while it lasted, was the possibilities it created for some cases:
o Plaintiffs could obtain jurisdiction by seizing not only tangible
property but also debts owed to the defendant
o Someone could bring action over someone else by
o Example: Harris, Balk, and Epstein – Harris was brought in a
suit by Epstein to pay Balk’s debts once he entered Epstein’s
state. Harris owed money to Balk who owed money to Epstein.
SC upheld this judgment
The consequences – a state could acquire jurisdiction over persons
whenever their debtors were present in the state by “attaching” the
debts.
Shareholder’s derivative suit – a shareholder steps forward and sues
the directors or officers in the name of a corporation, alleging some
breach of fiduciary duty
o The corporation is run by a board of directors and officers.
And when that corporation gets run into the ground through
possible fault of the directors and shareholders, a shareholder
can bring action against the officers and directors for not
doing their job well.
o If the suit is successful, then the proceeds go to the
corporation
Shaffer v. Heitner
--Facts
Greyhound, a Delaware corporation, lost a large antitrust judgment
in Oregon. Greyhound was fined a lot of money, and so the
shareholders’ stocks lost interest and value.
(P) Heitner is a non-resident of Delaware; he initiated a shareholder
derivative suit in Delaware state court on behalf of Greyhound
against 28 officers and directors of the corporation (i.e. Shaffer, D).
o Heitner owned one share of Greyhound stock. Heitner filed a
motion for sequestration of stock owned by 21 of the 28
defendants in order to obtain quasi-in-rem jurisdiction.
o Heitner sued in Delaware because of the actions of the
directors and officers, not because of its location or property.
o The legal status of the stock was deemed to be in Delaware.
The Delaware sequestration statute allowed property within the
state to be seized to allow the Delaware court to obtain in rem
jurisdiction over the owner.
(D)s made a special appearance to challenge the court’s jurisdiction
on the grounds that the statute was unconstitutional. (D) also
asserted that there were insufficient contacts to confer jurisdiction.
The District Court found that the statute was valid, and did not
address the minimum contacts argument due to the finding that the
legal presence of the stock in Delaware conferred quasi-in rem
jurisdiction.
o They served notice of the suit by certified mail to the old
addresses of the officers, and by publishing notice of the suit
in a newspaper.
--Issues = this case deals with individuals, NOT corporations.
In order for the forum state to exercise in rem jurisdiction on a
nonresident, must the nonresident have minimum contacts with the
forum state? Or is property alone enough to confer jurisdiction?
If so, must the cause of action be sufficiently related to the contacts
the nonresident has with the forum state?
--Holding and Rule (Marshall) = The previous judgment is reversed for lack of
jurisdiction over the defendants
A state cannot obtain PJ over a party based merely on that party’s
ownership of property in the state. Quasi in rem jurisdiction is
subject to the constitutional requirements of minimum contacts.
--Rules & Reasoning
Whether or not a State can assert jurisdiction over a nonresident
must be evaluated according to the minimum-contacts standard
from International Shoe.
In rem jurisdiction: due process under the 14th Amendment requires
that the basis for jurisdiction must be sufficient to justify exercising
jurisdiction over the interests of persons in the thing.
o The presence of property in a state may allow jurisdiction by
providing contacts among the forum State, the defendant,
and the litigation, but there are exceptions.
In this case, the property serving as the basis for jurisdiction is
completely unrelated to the plaintiff’s cause of action. The presence
of the property alone would not support the State’s jurisdiction.
Appellants’ holdings in the corporation do not provide contacts with
Delaware sufficient to support jurisdiction of that State’s courts over
appellants.
o Just because you have property in a state does not mean that
state can hold jurisdiction over you; you must have minimum
contacts for fair play and substantial justice – International
Shoe applies to in rem and quasi in rem jurisdiction plus in
personam jurisdiction.
Delaware is not a fair forum for this litigation because the officers
and directors have never set foot in the state and have not
purposefully availed themselves of the benefits and protections of
the state.
--Concurring (Powell)
The principles of minimum contacts is appropriate for in rem and
quasi in rem suits. The stock in Delaware and the officers’ positions
in the company do not constitute minimum contacts.
However, he’s not sure if ownership of real property within a state
can constitute minimum contacts for jurisdiction purposes.
--Concurring (Stevens)
One who purchases stock shares on the open market can hardly be
expected to know that he has thereby become subject to suit in a
forum remote from his residence and unrelated to the transaction.
However, this judgment may have further reaching principles that
are necessarily correct in the law.
--Concurring in Part and Dissenting in Part (Brennan)
The use of minimum contacts is more than justified and it
represents a sensible approach to the exercise of state court
jurisdiction, however the majority’s approach to minimum contacts
is wrong in this case = (D)s had minimum contacts.
As a general rule, a state forum has jurisdiction to adjudicate a
shareholder derivative action centering on the conduct and policies
of the directors and officers of a corporation incorporated in that
State.
Greyhound’s choice of incorporation in Delaware is a prima facie
showing of submission to its jurisdiction. There was a voluntary
association with the State of Delaware invoking the benefits and
protections of its laws. The majority opinion is purely advisory once
it finds that the state statute is invalid.
--Significance = this eliminates in rem jurisdiction!!!
--Could Heitner bring suit in AZ? Heitner would have to argue minimum
contacts there as well.
NOTE: Having property in a state does not give the state jurisdiction
over causes of action unrelated to the property unless the person
also passes the minimum contacts test articulated in the
International Shoe decision.
If it is unconstitutional to exercise jurisdiction over the person
directly then it should be unconstitutional to assert jurisdiction
indirectly.
The presence of property alone would not support jurisdiction
absent other ties to the state if the action does not arise from the
property OR that the property shows minimum contact
Notes and Problems
1.
2. A) The court did not decide that the property was irrelevant to the
existence of jurisdiction because property can show contact. Property
ownership alone is not the test for existence of jurisdiction. B) The court did
not hold that stock is not property because you can get minimum contact
through stock – but having stock alone is not the test for jurisdiction. C) The
directors can be sued in the state where the corporation is located because
they can make contact through the corporation – meetings in that state, etc.
can serve as minimum contact. D) The court never said that the board of
directors had not consented to being sued – they only looked to see if the
Delaware statute was constitutional according to the Due Process clause. E)
The court only said that attaching property is only unconstitutional when
there are no minimum contacts in the forum state where the property lies –
attaching property does not equal jurisdiction alone.
3. Hypo variation from class:
Sylvester, resident of LA, has inherited property from the will of a
distant relative in Idaho. Noel, a resident of TN, sues Sylvester in
Idaho based on injuries from a car accident that took place in LA,
and Noel attaches the newly acquired Idaho property. QUASI IN
REM – trying to get jurisdiction over Sylvester by the
ownership of the property
o Likely not to satisfy the minimum contacts requirement
o Sylvester only has contact because of the property, and the
action does not rise out of the incident (incident takes place in
LA, and she’s from TN so she does not have a great interest in
taking the suit to Idaho).
o Sylvester could file an answer in Idaho to this suit not
consenting – however, if she did not answer or object to the
litigation, then she consented to the jurisdiction of the Idaho
court. Presence in the forum state can equal consent.
o What happens if she tried the case in a court that had
jurisdiction over Sylvester, and the judgment is handed down
in favor of Noel… then in order to get the debt paid back to
Noel, could Noel try and get a hold of the Idaho property?
Sylvester’s property in Idaho has a huge hole from a previous
attempt to dig a pool – a little boy falls in the hole, and brings suit
against Sylvester to take the property. IN REM – the suit comes
out of the ownership of the proerty
o Her contact is that she owns the property there, even thought
she has never been to Idaho – the court could have
jurisdiction because Idaho is where the incident took place
because of her property in Idaho (reason for action came from
her contact in Idaho).
o Also if something were to take place to Sylvester’s property,
like a fire, then Sylvester would need the benefits and
protection of Idaho for her property.
o All the witnesses to the incident are in Idaho.
4. States can asserts jurisdiction over officers of a company that is
incorporated in its state through a statute. The statute would mean that the
people taking officer positions in the corporation would be subject to
jurisdiction in that state for actions arising from their corporation or from
actions arising from their position as officers in the corporation.
5. Brennan made the point that courts should take into account the
defendant’s circumstances and the forum state’s interest in the litigation.
However, many courts are not completely decided on this issue.
6.
7. In rem jurisdiction and the Internet. Like other trademarks, Internet
domain names are valuable pieces of intellectual property & legislation
protects them from various sorts of abuse and poaching. Even though a
defendant’s whereabouts are known, the defendant may not be subject to
personal jurisdiction. The defendant can be subject to??
8. Though Shaffer holds that the mere seizure of property does not establish
jurisdiction, parties continue to seize property for other purposes:
To prevent a party from moving assets out of the country pending
litigation, OR to satisfy judgments
9. International Shoe applies to the individuals as well as corporations. In
order for a state to exercise jurisdiction over a person not present in the
state, minimum contacts are necessary. Those contacts may include
ownership of property, but mere ownership of property does not conclusively
establish jurisdiction like it did in Pennoyer.
***RULE: In modern times, Personal Jurisdiction comes from either consent,
presence, or minimum contacts. ***
09/12/11 – pgs. 96-104
3. Specific Jurisdiction: The Modern Cases
Specific jurisdiction – jurisdiction that stems from the defendant’s
having certain minimum contacts with the forum state so that the
court may hear a case whose issues arise from those contacts.
Courts now do not look so much at the rules – they disagree more
about how to apply the rules to any given case (no wrong answer)
Look at the slight differences of the facts of the case to see how
cases could be changed in the decision handed down
World-Wide Volkswagen Corp. v. Woodson [non-resident defendant and
stream of commerce doctrine]
--Facts
The Robinsons purchased an Audi from Seaway (P1), a New York car
dealership. One year later while driving through Oklahoma, another
car hit them from behind, causing a fire which caused severe
injuries to Mrs. Robinson and her two children.
The Robinsons brought a products liability suit in OK state court
against four parties including Seaway and its distributor, World-
Wide Volkswagen (P2).
o These were both New York corporations and conducted no
business in Oklahoma.
The defendants entered special appearances claiming that
Oklahoma could not exert in personam jurisdiction over them by
virtue of the Due Process Clause of the Fourteenth Amendment.
--Procedural History
(Woodson) Trial judge decides Oaklahoma does have personal
jurisdiction over all (P)s
Then (P)s filed a writ of prohibition in the Supreme Court of OK to
restrain the district court judge (Woodson-D) from exercising
personal jurisdiction over them.
o SC denied the writ saying that the trial court was justified in PJ
over (P) because (P) the product sold and distributed is so
mobile that (P) could foresee that it had possible use in OK +
the fact there was one automobile here meant there was most
likely more.
o Also, (P) receives a significant income from sale of the product
in this case, and (P) should have known that their products
were being used in OK
US Supreme Court granted writ of cert.
--Issue = Can a forum state exercise in personam specific jurisdiction over a
party when a product could foreseeably be moved to a different state?
--Holding = Judgment reversed. (Ps) have no “contacts, ties, or relations”
with OK, thus OK lacks jurisdiction over (Ps).
--Reasoning
Minimum contacts is a requirement. There is a TOTAL absence of
the minimum contacts required:
o (P)s carry no activity whatsoever in OK as they close no sales
or perform any services there. They do not avail themselves
of the privileges and benefits of OK law. They solicit no
business in OK through any salesperson or advertising. They
do not sell any cars to OK residents directly.
o The only contact between (Ds) and the forum state is that car
made its way into OK – this is NOT enough.
“Foreseeability” is not a sufficient benchmark for personal
jurisdiction under the Due Process clause. The foreseeability that is
critical to due process is not the mere likelihood that a product will
find its way into a forum state. It is that the (Ds) conduct and
connection with the forum state are such that he should reasonably
anticipate being haled into court there.
Even if the D would suffer minimal or no inconvenience from being
forced to litigate in a particular state and even if the forum state is
the "best" place for litigation, DP can still deprive that state of
taking jurisdiction over a case
--Dissent by Brennan – STREAM OF COMMERCE
Based on foreseeability- a car sold in New York is mobile, and
therefore it was foreseeable by World-Wide and Seaway that a car
sold by them could subsequently lead to an injury in Oklahoma.
However, the majority opinion of the Supreme Court rejected this
argument, saying that foreseeability alone could not provide the
basis for personal jurisdiction over a defendant and the two
petitioning companies had no other contacts with Oklahoma
There is too little weight applied to the strength of the forum State’s
interest in the case.
--Significance = a state does not necessarily have personal jurisdiction over
a corporate defendant simply because its product was brought into the
forum state.
The defendant must have voluntarily connected himself or herself
with the forum state via the notion that it purposely availed itself of
the forum state’s laws.
Here, just because the defendants put a product in the stream of
commerce does not mean that they formed the sufficient contact
with Oklahoma to be held under its jurisdiction. The companies have
used no benefits, nor purposefully availed themselves to the
privileges of conducting business in the stat
--There are two tests for personal jurisdiction: ‘minimum contacts’ and
‘fairness’ (Minimum purposeful contacts)
Minimum contacts = The defendant’s conduct and connection with
the forum State must be such that he should reasonably anticipate
being haled into court there.
The forum State does not exceed its powers under the Due Process
Clause if it asserts personal jurisdiction over a corporation that
delivers its products into the stream of commerce with the
expectation that they will be purchased by consumers in the forum
State = purposely injected products into the stream of commerce.
--Specific Jurisdiction has some different requirements:
Could the defendants reasonably anticipate being brought into a
suit in the forum state ?
Did they have advertise in the state directly so that those residents
would buy their products?
Are traditional modes of fair play and substantial justice being
violated by exercising jurisdiction?
-- Minimum contacts requirement is important because:
It protects parties from the burden of litigating in foreign judicial
systems, AND
To ensure that states, through their courts, are not reaching over
other states and walking on other state’s sovereignty
Hypo from Note 2: Test for “fair play and substantial justice”
Robinsons bring liability suit against NY retailer, Cali distributor, and
Japanese manufacturer of the defective radio component part. Who
is subject to personal jurisdiction?
If there are minimum contacts, what about test for “fair play and
substantial justice?”
o 1) Burden on defendant
o 2) Forum state’s interest in adjudicating the dispute
o 3) Plaintiff’s interest in obtaining convenient and effective
relief
o 4) Interstate judicial system’s interest in obtaining the most
efficient resolution of controversies, AND
o 5) Shared interest of several states in furthering fundamental
substantive social policies
Distributor – they have the minimum contacts and they file some
requirements from fair play and substantial justice
Notes and Problems
1. Principle of Stream of Commerce if the sale of a product of
manufacturer or distributor is not simply an isolated occurrence but arises
from the manufacturer’s or distributor’s efforts to serve either directly or
indirectly other states’ markets, it is not unreasonable to subject it to suit in
one of those states if its merchandise has caused injury to residents there.
2.
3. For most US defendants, there is some type of jurisdiction in a court –
state where the defendant is permanently domiciled, or state where the
company is incorporated.
4.
5.
09/13/11 – pgs. 105-117
Asahi Metal Industry v. Superior Court [foreign defendant & stream of
commerce doctrine] – split decision!
--Older Facts
Zurcher lost control of his motorcycle one day and collided with a
tractor; the accident resulted in severe injuries for Zurcher and the
death of his wife. Zurcher filed a products liability suit in Superior
Court of Cali, where he claimed that the back tire was defective and
caused the accident. He filed suit against Cheng Shin [the
Taiwanese manufacturer]
Cheng filed a 3rd party complaint seeking indemnification from (P)
Asahi Metal Industry [Japanese manufacturer of the tire valve].
o Indemnification – an action of compensation for loss or
damage sustained
Zurcher’s suit was later settled and dismissed, leaving only Cheng’s
indemnity action against Asahi
--Facts for present case
(P) moved to quash Cheng’s service of summons stating that it was
inconsistent with Due Process clause in 14th amendment
o (P) is a Japanese corporation who does business with Cheng
and several other tire manufacturers. Cheng’s business
transactions with (P) served for about 1% of its income.
Cheng officials maintain that Asahi had been aware that Cheng’s
tires were sold all over the US; however, (P)’s officials maintain that
they were not aware that they would be held liable for US lawsuits
since they only sold valves to Cheng.
--Procedural History
The Superior Court of Cali denied the motion to quash the service of
summons, stating that (P) clearly does business on an international
scale – thus it is not unreasonable that they defend claims of defect
in their products sold.
The Court of Appeals issued a writ of mandamus to the state of
California telling them to quash the summons. Then the Cali
Supreme reversed this decision, which lead (P) to appeal to the
United States Supreme Court
--Issue = Does a foreign company’s mere awareness that its product is sold
and delivered into the US constitute the minimum contacts needed for
jurisdiction according to rules of fair play and substantial justice?
--Holding = Judgment is reversed and remanded down for further
proceedings. The service summons was later quashed.
--Rules
World Wide Volkswagen – court rejected the assertion that a
consumer’s unilateral act of bringing the defendant’s product into
the forum state was sufficient constitutional basis for jurisdiction
over the defendant
--Reasoning
(4/9=plurality) Part II-A: Minimum contacts! There must be a
“substantial connection” between the defendant and forum state to
fill the “minimum contacts” requirement. In accordance with Due
Process, the connection must come about by defendant’s action
purposefully directed toward the forum state.
o (D) cannot be constitutionally brought under Cali jurisdiction
unless he makes a direct intended effort to serve the market
of the forum state – like advertising in the state,
manufacturing specific parts for the state, etc.
o The placement of his product in the stream of commerce does
not constitute minimum contacts or an action purposefully
directed at Cali = NO jurisdiction
o Mere foreseeability or awareness that a product may end up
in the forum state does not constitute enough constitutional
basis for a court to exercise jurisdiction over a defendant
*VERY IMPORTANT!*(8/9 = precedent through Majority) Part II-B:
Courts must consider the burden on the defendant, the interests of
the forum state, and the plaintiff’s interest in obtaining relief + the
interstate judicial system’s interest in obtaining the most efficient
resolution & the shared interest of several states in furthering
fundamental substantive social policies
o Looking at those factors, Cali’s jurisdiction over (D) would be
unreasonable and unfair in accordance with due process:
1) There is a heavy burden on (D) to appear across the
world to litigate and submit itself into a foreign nation’s
judicial system;
2) there are very slight interests for (P) and the forum
state since (P) isn’t even a resident of Cali; and
3) (P)’s purchasers of its product will place pressure on
(P) because the purchasers can be held liable for tort
action in US + “Great care and reserve should be
exercised when extending PJ internationally”
(4/9 = plurality) Part III: The facts of the case do not establish
minimum contacts so that exercise of personal jurisdiction is
inconsistent with fair play and substantial justice
--Evaluation
There is only a plurality in some parts, which means those parts of
the case do NOT give precedent [unless there is a majority]
--Concurrence in part by Brennan, White, Marshall, and Blackmun
While they all agree with the outcome of the case based on
unreasonableness and unfair to place (P) under jurisdiction, they all
disagree with the how the application of minimum contacts test &
the conclusion that (P) did not purposefully avail itself of Cali
market. This is a very rare case where jurisdiction is NOT
appropriate because it would unfair and unreasonable.
Brennan stated that (P)’s injection of its product into the stream of
commerce constitutes minimum contacts.
--Concurrence in part by Stevens, White, and Blackmun
While they all agree with the conclusion of the case, they do not
agree with the minimum contacts application for 2 reasons.
First, the test for minimum contacts is not necessary because
applying jurisdiction over (P) would be unfair and unreasonable.
Second, if the test for minimum contacts should be applied here,
then it is misapplied to the facts of the case. “Mere awareness” and
“purposeful availment” are closely related here – (P) has engaged in
conduct that constitutes more than simply placing its product in the
stream of commerce; plus (P)’s financial gains should be taken into
account here.
--MY ARGUMENT! = (D) did not market his tire valves in the area – these Cali
residents are buying cars, not tire valves; also (D)’s financial income from
(P)’s purchase of their parts is NOT very large.
Notes and Problems
4. Volvo [Swedish car maker] is partly owned by General Motors. Volvo buys
brakes components from BrakeCo [US manufacturer in Illinois]. Volvo has
national distributor in New Jersey & dealers throughout the US. (P) buys a
Volvo in FA, but the brakes fail and injury ensues. (P) brings suit against
everyone except General Motors. Who does court have jurisdiction over?
A) Volvo – they purposely avail themselves because they have a
National Distributor who sells their cares all over the nation. We
would want to know if Volvo has repair shops for cars in Florida.
B) BrakeCo – based on Asahi, they might not have jurisdiction. We
would want to know how much business they did with Volvo + if
they advertised their brakes in Florida. If these are the brakes sold
to Volvo, then these would also be the brakes sold in the Volvo
stores – thus they would avail themselves through Volvo because
they knew their products would be in Volvo separately.
C) National Distributor – they have purposefully availed themselves
in terms of contacts because they reached out “nationally.” There
wouldn’t be a big burden on the (P) because they bought the car in
Florida; there wouldn’t be a big burden on (D) because they reached
out nationally to sell the cars.
D) Dealer – yes they are selling cars in Florida.
**Specific Jurisdiction – only going to be if the particular incident arises out
their contacts with that state. Thus the brakes caused the accident so it
arises out the contact; however, with an employment dispute over the way
the business is run, there would be no jurisdiction in other states because
the incident arose out of Illinois
***Question: who has to prove right of a court’s jurisdiction? Does the
defendant have to prove that the court does not have jurisdiction? This all
seems very discretionary!***
Plaintiff has the burden to prove that jurisdiction exists!!!!!
Burger King v. Rudzewicz
--Facts
Rudzewicz (D) and MacShara entered into a franchise contract with
Burger King. (P) would open a restaurant in Michigan. Burger King
was incorporated in Florida and incorporated a choice of law clause
in the contract – Florida law would control all possibly lawsuits. The
contract allowed (D) to use Burger King’s trademarks and service
marks for 20 years in Michigan.
An economic downturn led to decreased sales and (D) failed to
meet his obligations under the contract.
--Procedural History
Burger King brought a diversity suit against (D) in Florida. (D)
moved to dismiss for lack of personal jurisdiction because they did
not have sufficient contacts with Florida.
The trial court denied (D)’s motion and ruled that jurisdiction was
proper under Florida’s long arm statute. The court entered
judgment in favor of Burger King and (D) appealed.
CoA held that while (D) had sufficient contacts with the state of
Florida to satisfy the state’s long arm statute, the exercise of
personal jurisdiction was fundamentally unfair and was a violation of
due process. Burger King appealed.
--Issues = To what extent can a contract with a choice of law clause
constitute a contact for the purposes of due process analysis and minimum
contacts analysis?
--Holding and Rule (Brennan)
The court held that jurisdiction is proper when contact with the
forum state proximately results from actions by the defendant such
that they create a substantial connection with the forum state.
There must be fair warning to a defendant that he can be brought
under lawsuit in the forum state. The fair warning requirement is
satisfied when a party has purposefully directed his activities at the
forum. Parties who reach out and create continuing relationships
and obligations in another state are subject to regulation and
sanctions in that state for the consequences of their activities.
The court held that in this case the franchise agreement with Burger
King allowed (D) to benefit from an association with a Florida
corporation for twenty years. (D) had continuing and direct contacts
with Burger King.
o Thus thee fact that (D)’s contacts were purposeful allowed the
state to exercise personal jurisdiction despite that those
contacts were minimal.
The contract indicated that Florida law would apply. It cannot be a
shock that (P) would sue (D) there for a breach of the contract in
light of the clear contractual terms of the agreement.
--Dissent (Stevens)
It is unfair to require a franchisee to defend a case of this kind in a
forum chosen by the franchisor. Rudzewicz did no business in the
state of Florida. His principal contacts were with the Michigan BK
office. Rudzewicz had a local operation with far less resources than
Burger King. It would be fundamentally unfair for Rudzewicz to be
required to defend in Florida.
Note: It is important to remember that the contract had choice of
law clause, but not a forum selection clause.
--Significance = even though the contacts in this case are very slight and
would not constitute jurisdiction alone, the test for jurisdiction that falls
under Due Process [reasonable and fair] can serve to establish jurisdiction.
09/17/11 – pgs. 117-122
Pavolich v. Superior Court [sliding scale and effects test for Internet sites]
--Facts.
(P) Pavolich, a resident of Texas, was the founder and project leader
of the website LiVid. The site consisted of a single page with text
and links to other websites. The site only provided information; it
did not solicit or transact any business and permitted no interactive
exchange of information between its operators and visitors.
Consistent with these efforts, LiVid posted the source code of a
program named DeCSS on its Web site as early as October 1999.
DVD Copy Control Association, Inc. was the manufacturer of DeCSS.
DVD Copy is organized under the laws of Delaware with its principal
place of business in California.
--Procedural History
DVD sued (P). In its complaint, DVD Copy alleged that Plaintiff
misappropriated its trade secrets by posting the DeCSS program on
the LiVid Web site.
In response, Plaintiff filed a motion to quash service of process,
contending that California lacked jurisdiction over his person. The
trial court denied Plaintiff’s motion, and this appeal followed.
--Issue = Can a state court exercise jurisdiction over a non-resident whose
only connection to the state is an internet posting?
--Holding = Reversed. Jurisdiction was improper.
--Reasoning
Specific jurisdiction = no contacts. (P) does not reside or work in
Cali. (P) has not solicited any business in Cali or has no business
contacts in Cali. At the time LiVid posted DeCSS, (P) did not know
that the organization manufacturing DeCSS was DVD Copy.
o Website must be interactive to show contact with state, and
(P)’s website was merely passive.
Merely asserting that a defendant knew or should have known that
his intentional acts would cause harm in the forum state is not
enough to establish jurisdiction. Instead, the plaintiff must also point
to contacts that demonstrate that the defendant expressly aimed its
tortious conduct at the forum.
Specific jurisdiction requires more than a finding that the harm
caused by (P) is primarily felt within the forum. Jurisdiction over him
must be both reasonable and foreseeable so that it does not violate
substantial notions of justice and fair play.
--Dissent. Baxter, J. dissented.
By intentionally posting an unlicensed decryption code of DVD
Copy’s product on his website, (P) was not merely aiming his
conduct at specific persons or companies, but an entire industry.
Since (P) knew that at least two of the industries companies were
located in Cali, his tortuous conduct could be said to be aimed at
the forum state.
--Sliding Scale for Internet Sites
The likelihood that personal jurisdiction can be constitutionally
exercised is directly proportionate to the nature and quality of an
entity’s commercial activity over the Internet.
This is based on a determination of the website's "interactivity"
o The greater the commercial nature and level of interactivity
associated with the website, the more likely it is that the
website operator has purposefully availed itself of the forum
state's jurisdiction.
Interactivity is measured through an examination of the website's
features and intended uses.
o Websites designed to facilitate or conduct business
transactions will often be characterized as interactive.
o A passive website that simply makes the information available
to the user will be less likely to have a basis for personal
jurisdiction.
Websites are effectively divided into three categories:
o 1) websites that conduct business over the Internet,
o 2) websites where users exchange information with the host
computers, and
o 3) websites that do little more than present information
NOTE: Websites that do business over the Internet will yield a
finding of purposeful availment, while websites that simply present
information will not.
--Effects Test [deals with an intentional act!]
This test comes from Calder v. Jones. This deals with cases where
there are insufficient interactivity or minimum contacts, but where
an action is targeted at a particular forum.
In Calder, a Cali resident in the entertainment business sued the
National Enquirer, located in Florida, for libel based on an allegedly
defamatory article published by the magazine.
o Personal jurisdiction was properly established in Cali because
of the effects of the defendants' conduct in that state. Since
the article concerned a Cali resident with a career in Cali and
relied on Cali sources, the Court found the defendants’ actions
were expressly aimed at Cali.
In the Internet context, the effects test can be used to examine the
exact nature of a defendant's Internet activities to determine
whether its out of state actions were directed at parties or entities
within the forum state.
This is referred to as "purposeful direction," which requires
o (a) an intentional action, that was
o (b) expressly aimed at the forum state, with
o (c) knowledge that the brunt of the injury would be felt in the
forum state.
If a court finds that a defendant's actions meets the standard of
purposeful direction, then personal jurisdiction may be asserted
based on Internet activities which do not meet the requirement of
interactivity or minimum contacts needed for personal jurisdiction.
Notes and Problems
1. Yes the court did reach the correct verdict because (P) did not profit from
anything on his website – he was simply spreading knowledge.
2.
09/19/11 – pgs. 122-127
4. General Jurisdiction
This jurisdiction is a court’s authority to hear all claims against a
defendant at the place of defendant’s domicile or place of service.
There is no need to show an existing connection between the claims
and the forum state.
For general jurisdiction over a corporation, there must be evidence
of company incorporation or principal place of business in forum
state trying to exercise jurisdiction
o Example: General Motors, incorporated in Delaware and with
its principal place of business in Michigan, can be brought
under suit in either state
o **However, courts tend to be very weary of granting general
jurisdiction because then potentially a corporation could be
sued anywhere they do business!
For general jurisdiction over individuals, the suit can be brought in
the state were the person is domiciled
Perkins v. Benguet Consolidated Mining Co.
--Facts:
(D) had been operating a continuous and systematic, but limited
part of its business in OH. (D) was served while in OH.
(P) sued (D) in OH for dividends owed and failure to issue stock
certificates to her. However, the cause of action did not arise in OH
and does not relate to any business activities in OH.
--Procedural History:
Trial court found for (D). OH CoA affirmed judgment for (D). OH
Supreme Court affirmed judgment for (D).
US Supreme Court granted writ.
--Issues = Can a state exercise jurisdiction over a foreign corporation when it
is served in the forum state in accordance with Due Process?
--Holding = A court can exercise jurisdiction in this way. Vacated and
remanded down for further proceedings.
--Reasoning
A state may exercise jurisdiction over a foreign corporation, even
when the cause of action does not arise in the state or relate to any
of the corporation's activities in the state, if the corporation carries
on continuous and systematic corporate activities in that state –
general jurisdiction.
The president (also GM and principal stockholder in company)
returned to his home in OH during a war in the Philippines (where
company was based). While in OH, he maintained an office and did
many things on behalf of the company. He kept office files, carried
on correspondence relating to the business and its employees, drew
and distributed salary checks, maintained bank accounts that
contained company funds, held director's meetings, etc.
o Thus, he carried on in OH a continuous and systematic
supervision of the company.
Helicopteros Nacionales de Colombia, S.A. v. Hall
--Facts.
(P) Helicopteros is a Colombia corporation that provides helicopters
for oil and construction companies. (P) was hired by Consorcio and
its Texas venture.
One of (P)’s helicopters crashed in Peru, killing four of the venture’s
employees. (D) employees brought this wrongful death action
against (P) in Texas.
--Procedural History
The trial court denied (P)’s motion to dismiss for lack of in personam
jurisdiction. There was a jury trial and verdict for (P).
Heli then appealed. Texas CoA reversed the judgment for lack of
jurisdiction. The Texas Supreme Court reversed the CoA judgment
on the grounds that the Texas long-arm statute can reach as far as
the Due Process Clause will permit.
(P) then appealed to US Supreme Court
--Issue = If the cause for lawsuit does not arise from a defendant’s contacts
with the forum state, what constitutes “continuous and systematic” contacts
to confer general jurisdiction?
--Holding = There is no jurisdiction over (P) so judgment is reversed.
--Reasoning and Rules
General jurisdiction is reviewed here – Heli must either be
incorporated in Texas, have its principal place of business in Texas,
OR some approximation of business is in Texas.
Facts: (P) conducted some contract negotiations in Texas, bought
80% of its helicopters for the business in Texas, received “technical
consultation” from a person in Texas, and was paid with checks
drawn on a Texas bank.
These are not a sufficient contacts to justify general jurisdiction
under precedent that mere purchases are not sufficient contacts.
o If the purchase is not related to the action, or if it can’t be
proved that it enhanced the nature of Defendant’s contacts
with Texas, it is not sufficient.
09/25/11 – pgs. 127-134 + BB case
Gator.com Corp v. L.L. Bean, Inc.
--Facts
--Procedural History
--Issue
--Holding
--Rules
--Reasoning
--Policy
Burnham v. Superior Court
--Facts
(P) Burnham is a New Jersey resident. (P) was married to a woman,
but they decided to divorce. Before divorce, wife moved to Cali with
kids. (P) filed for divorce in NJ on grounds of desertion – but,
previously (P) and wife had decided to filed for divorce under
“irreconcilable differences.”
(P) visited Cali on business, after which he went to visit his children
where his wife resided. Upon returning the children to his wife’s
home, (P) was served with a Cali court summons because his wife
filed for divorce there.
--Procedural History
(P) made a special appearance in Cali for the purpose of filing a
motion to dismiss on the ground that service was not proper
because the court lacked personal jurisdiction over him.
The Superior Court denied the motion stating that “systematic and
continuous contacts” only applies to corporations.
US Supreme Court granted certiorari.
--Issue = Can a state court apply jurisdiction over a non-resident who was
personally served with process while temporarily in that state, in a suit
unrelated to his activities in that state in accordance with Due Process?
--Holding = Affirmed, Cali has jurisdiction.
--Rules & Reasoning
Scalia, Chief Justice, Kennedy, & White
o Jurisdiction based on physical presence alone constitutes due
process because it is one of the continuing traditions of our
legal system that define the due process standard.
o The contacts & traditional notions of fair play and substantial
justice only came about because of situations where the other
person is not present in the state.
Brennan, Marshall, Blackmun, and O’Connor
o Physical presence in a state permits jurisdiction not because
service of process occurred on the person in the state, but
because by voluntarily coming into the state, the defendant
avails himself of the benefit and privileges of the law of the
state, even if only for a short period of time.
Stevens – he was the swing vote
o This was a very easy case to decide given the historical
evidence and considerations of fairness.
--Policy
An individual’s physical presence in a state at the time process is
served upon them satisfies traditional notions of fair play and
substantial justice.
Seems a little lopsided comparing individuals & corporations – if
someone is physically present in a state, then that state
automatically has jurisdiction; if a corporation does thousands of
dollars of business over the internet with a state, that state may not
have jurisdiction
The strongest argument is that an individual is under his own
control, whereas a corporation cannot control every single one of its
agents and workers from going anywhere
The individual chooses to go somewhere on his own, whereas
workers and agents of a corporation go places without actually
representing the corporation (representing himself individually)
**Make a chart for specific jurisdiction and general jurisdiction**
General Jurisdiction
o “At home” jurisdiction
o Continuous and systematic contacts
Specific Jurisdiction
**Physical presence is supposed to be “general jurisdiction” but it kind of
falls between specific and general jurisdiction because it doesn’t really fit
into either category very well
This only applies if you voluntarily enter the forum state – you
can’t be thrown into the trunk of a car and taken to that state to be
served
Process immunity – if you end up entering the state after being
served, then you have submitted to jurisdiction
09/27/11 – pgs. 134-140
C. Consent as a Substitute for Power
A defendant can consent to jurisdiction in a forum either before the
lawsuit or during the outset of the lawsuit
o Contacts in a state DO NOT constitute consent to jurisdiction
Consent is normally used by parties in cases where there was a
prior contractual dealing
National Equipment Rental v. Szukhent – when (D)s defaulted on
their contract, a clause on the back of the contract was held as
“consent” because it stated that someone in the forum state would
serve as the agent for service of process
o The jurisdiction in the forum court most likely would not have
held without the clause on the back of the contract
NOTE: Federal courts have jurisdiction over admiralty matters,
which include the interpretation of contracts for carriage of
passengers by sea
Carnival Cruise Lines, Inc. v. Shute
--Facts
(D) Shute purchased tickets for a 7-day cruise on a ship owned by
(P) through a Washington travel agent. The face of each ticket
contained terms and conditions of passage, which included an
agreement that all matters disputed or litigated subject to the travel
agreement, would be before a Florida court.
o Forum Jurisdiction clause!!
(D) boarded the ship in Cali, which then sailed to Mexico before
returning to Los Angeles. While the ship was in international waters,
(D) was injured from slipping on a deck mat.
--Procedural History
(D) filed suit in Federal District Court in Washington. (P) filed a
motion for summary judgment, alleging that the clause in the
tickets required (D) to bring their suit in Florida.
--Issue = Should the court enforce the Forum-Selection clause forcing
individuals to submit to jurisdiction in a particular state?
--Holding = Yes. The US Supreme Court held that the CoA erred in refusing to
enforce the forum-selection clause.
--Rules & Reasoning
Forum-selection clauses contained in form passage contracts are
subject to judicial scrutiny for fundamental fairness, but where they
are not lacking in fairness, they will be enforced. This clause passes
fundamental fairness!
(D) consented to the jurisdiction by signing the contract because
they even admit that they knew about the Forum-selection clause in
the contract – even though they didn’t get to negotiate it
(P) had many reasonable causes for having the Forum-Selection
clause included in the contract:
o 1) A cruise line has a special interest in limiting the forums in
which it can potentially be subject to suit – they would have to
travel to several different forums for every incident because
their passengers come from all over the US
o 2) Spares litigants the time and expense of pretrial motions to
determine the correct forum and conserving judicial resources
that would be used in deciding the useless motions
o 3) The clients who pursue these lawsuits are enjoying lowered
fares for cruises by virtue of this clause because it limits the
forums the cruise line can be sued in
--Dissent by Stevens & Marshall.
Adhesion contracts, particularly forum-selection clauses, are void as
contrary to public policy if they were not freely bargained for, create
additional expense for one party, or deny one party a remedy.
--Discussion
Forum-Selection clauses are enforceable in principle. They are not
necessarily enforceable in all situations, but it can be enforced
because it is not unconstitutional in principle – does not violate the
due process clause of US Constitution
Notes and Problems
1.
2.
3.
4. A) Choice of Law clause – the person agreeing to a contract with this
clause is only agreeing to a choice a law. This is not enough to place
somebody under the jurisdiction specified in the clause. B) Consent to
Jurisdiction clause – if the person is brought in suit under that specified
state’s jurisdiction, then he/she will not argue against jurisdiction. However,
he/she can bring suit somewhere else if they choose to. C) Forum Selection
clause – parties are saying that they will be subject to personal jurisdiction
in the specified forum state. They are consenting to jurisdiction through this
clause in the contract.
J. McIntyre Machinery v. Nicastro – no majority!!
**This is a specific jurisdiction case. Requirements to be met:
Minimum Contacts
Suit must arise out of those contacts
Fair play and substantial justice
--Facts
(D) injured his hand in NJ while using a metal-shearing machine.
Machine is manufactured in England by (P), where (P) is
incorporated and operates.
(D) filed this products-liability suit in a state court in New Jersey,
where the accident occurred; (P) then sought to dismiss the suit for
want of personal jurisdiction.
(D)'s jurisdictional claim was based on three primary facts:
o A US distributor agreed to sell (P)'s machines in this country;
o (P) attended trade shows in several states; and
o Four of (P)’s machines ended up in New Jersey.
--Procedural History
(P) moved to dismiss (D)'s products-liability suit arguing lack of
personal jurisdiction. Under the "stream-of-commerce" doctrine, the
Supreme Court of NJ held that due process was not violated by the
NJ court's exercise of jurisdiction.
o Reasoning: The State Supreme Court held that NJ courts can
exercise jurisdiction over a foreign manufacturer without
violating due process so long as the manufacturer knew or
reasonably should have known that its products are
distributed through a nationwide distribution system that
might lead to sales in any of the States.
Certiorari was granted.
--Issue = was NJ Supreme Court correct in handing down judgment that NJ
courts have jurisdiction over (P)?
--Holding = Supreme Court’s judgment is reversed – no jurisdiction.
--Different Judges
Kennedy, Chief Justice, Scalia, & Thomas
o A court may subject a defendant to judgment only when the
defendant has sufficient contacts with the sovereign "that the
maintenance of the suit does not offend 'traditional notions of
fair play and substantial justice” International Shoe. As a
general rule, the sovereign's exercise of power requires some
act by which the defendant "purposefully avails itself of the
privilege of conducting activities within the forum State, thus
invoking the benefits and protections of its laws" Hanson. No
"stream-of-commerce" doctrine can displace that general rule
for products-liability cases.
o (P) did direct activities at the entire US, but this is not
enough! (P) must have engaged in conduct purposefully
directed at NJ, but (P) didn’t (P) had no office in NJ; it
neither paid taxes nor owned property there; and it neither
advertised in, nor sent any employees to NJ. Trial court found
that (P) did not have a single contact with NJ apart from the
fact that the machine in question ended up there.
Brier & Alito Concurs in Judgment, but not ^reasoning
o The outcome of this case is determined by our precedents.
o Based on the facts found by the NJ courts, (D) failed to meet
his burden to demonstrate that it was constitutionally proper
to exercise jurisdiction over (D), a British firm that
manufactures scrap-metal machines in Great Britain and sells
them through an independent US distributor. The Supreme
Court of NJ’s judgment should be reversed.
Ginsburg, Sotomayor, & Kagan dissent
o (P) seeks to develop a market in the US for machines it
manufactures. It hopes to derive substantial revenue from
sales it makes to US purchasers. Where in the US buyers
reside does not matter to (P) – its goal is simply to sell as
much as it can, wherever it can. It excludes no region
or State from the market it wishes to reach. But, it
prefers to avoid products liability litigation in the
United States. To that end, it engages a U.S.
distributor to ship its machines stateside jurisdiction
Basically, do we really want to allow manufacturers to
hide behind distributors for liability?
o (P) knew that they were selling their product in a certain state
to a resident of that state!
Pay attention to Part II’s reasons given on pg. 7!!***
--Significance
The differing opinions here show how the requirements for
jurisdiction can be applied completely different by justices
The signal concurrence says that one single sale does NOT
constitute jurisdiction over a company
This seemingly runs against Volkswagen – maybe (D) could have
given greater evidence for jurisdiction, but (D) didn’t
The difference that may have made this case easier was if (D) had
filed suit against (P)’s US company & then attached the UK
company after OR had gone to the UK to file suit
**14th amendment is in the US Constitution – it protects all people’s right to
due process. Federal Courts go through the same analysis that state courts
use to determine jurisdiction**
Goodyear Dunlap Tires v. Brown
--Facts
(D) NC residents’ sons died in a bus accident outside France filed a
suit for wrongful-death damages in NC state court. Alleging that the
accident was caused by tire failure, they named as (P)s Goodyear
USA [an Ohio Corp] & three Goodyear USA subsidiaries, organized
and operating in Luxembourg, Turkey, & France.
(P)'s tires are manufactured primarily for European and Asian
markets and differ in size and construction from tires ordinarily sold
in the United States. (P)s are not registered to do business in NC;
have no place of business, employees, or bank accounts in the
State; do not design, manufacture, or advertise their products in the
State; and do not solicit business in the State or sell or ship tires to
NC customers. Even so, a small % of their tires were distributed in
NC by other Goodyear USA affiliates.
--Procedural History
The trial court denied (P)'s motion to dismiss the claims against
them for want of jurisdiction. The NC CoA affirmed, concluding that
the NC courts had general jurisdiction over (P), whose tires had
reached the State through "the stream of commerce."
This could NOT be specific jurisdiction because the action that the
suit is based on did not take place in NC, nor does it deal with any
contacts with the state of NC.
--Issue
--Holding
--Decision
A court may assert general jurisdiction over foreign (sister-state or
foreign-country) corporations to hear any and all claims against
them when their affiliations with the State are so "continuous and
systematic" as to render them essentially at home in the forum
State.
o Specific jurisdiction, on the other hand, depends on an
affiliation between the forum and the underlying controversy,
principally, activity or an occurrence that takes place in the
forum State and is therefore subject to the State's regulation.
o In contrast to general jurisdiction, specific jurisdiction is
confined to adjudication of issues deriving from, or connected
with, the very controversy that establishes jurisdiction.
09/28/11 – pgs. 140-154
D. The Constitutional Requirement of Notice
Mullane v. Central Hanover Bank & Trust Co.
--Facts
Central (D) set up common fund pursuant to a New York statute
allowing the creation of common funds for distribution of judicial
settlement trusts. There were 113 participating trusts. (D)
petitioned for settlement of its first account as common trustee.
Some of the beneficiaries were not residents of New York.
“Notice” was by publication for four weeks in a local newspaper.
Appellee had notified those people by mail that were of full age and
sound mind who would be entitled to share in the principal if the
interest they held became distributable.
NY banking law said this was a sound way to serve process to
others – easier to set up a trust and maintain a trust
--Procedural history
(P) was appointed as special guardian and attorney for all persons
known or unknown who had or might have any interest in the
income of the common trust fund.
(P) appeared specially, objecting that notice by publication,
permitted under the applicable statute was inadequate to afford the
beneficiaries Due Process under the 14th Amendment and that
therefore jurisdiction was lacking.
--Issue = Is notice by publication reasonable and proper notice under the
Due Process of the Fourteenth Amendment?
--Holding = Reversed and Remanded because notice given by publication is
insufficient under the Due Process when the parties' addresses are known.
To satisfy due process, the form of notice used must be reasonable
in light of the practicalities and peculiarities of the specific case.
--Rules and Reasoning
There has to be notice and opportunity for a hearing appropriate to
the nature of the case. (P)s could potentially be deprived of
property here, as the proposed disposition cuts off their rights to
sue for negligent or illegal impairments of their interests.
There need not be personal service, notice has to be reasonably
calculated, under all the circumstances, to apprise interested
parties of the pending action and afford them an opportunity to
present their objections.
o You do not have to notify all the beneficiaries when the trust
concerns many small interests. Sending notice to most of
them will protect their interests sufficiently.
o The people not reached would most likely be protected by the
majority that was reached because they would most likely
raise the issues of those who didn’t know about the case
The NY Banking Law violates the due process clause of the 14th
Amendment because contacting beneficiaries by mail at their last
known address is not particularly burdensome.
--Discussion
The majority’s opinion illustrates that notice by publication can be
used, but it will not suffice only because it would be burdensome for
the plaintiff to notify all parties involved.
If the plaintiff knows of a way to contact the parties, then the
plaintiff must bear that expense. Mailing notice to an address, if
known, will suffice.
Notice by publication will suffice only if there is no practical way of
knowing the identity or location of the party.
--In light of the above case, looking back on Pennoyer – Oregon could have
had jurisdiction over Pennoyer. Pennoyer could argue that the notice was not
reasonably calculated.
What if Mitchell states that he has mailed service to Pennoyer’s last
known address & has heard that Pennoyer is hiding to avoid service
in the lawsuit – looking at the above case, it only has to be
reasonably calculated; it doesn’t need to be perfect
Notes and Problems
1.
2.
3. A) What if there are 5 people involved in the trust, and only 4 actually
receive notice of a lawsuit; judgment is entered against the defendants.
What happens now? This is all circumstantial. Courts have stated that there
is a greater obligation to get all 5 notice of the lawsuit because it is less
likely that all 5 will be able to protect each other’s interests and bring up
everyone’s objections. *Mail is not usually held up as proper in court unless it
is proven that those people actually received the mail of process* B) You
would have to look at the cost of service compared to the cost of a judgment
weighed against the defendant – value of a suit vs. cost of service. There is
also the rationale that if you can find somebody for service of process, then
you have to spend whatever money to get to that person. *If you know the
name and address of the person, then notice in a publication is NOT
adequate service or process*
Just keep in mind that Mullane only tells us about how the US
Supreme Court sees the outer bounds of proper service of process.
But Federal Rules of Civil Procedure and state laws deal with their
own legal ways to serve process of people
Rule 4 deals with service of process; it spells out exactly what the
plaintiff must do for correct service of process. Basically says that
mail is OK. *LOOK IT UP*
o Section (d) waiver of service of process tries to lessen the
expenses plaintiffs pay for service of process and extend the
time defendants have to answer the service
o Defendant can’t object to service of process if he waives
service of process – but you can object to jurisdiction
4.
5.
6.
Notes on Service of Process
1.
2. A) She could write a letter, or she could fill out form 5 and include form 6.
She needs to follow rule 4 of FRCP. B) If he ignores it, then he will have to
pay how ever much the cost of service will be. You would advise the client
not to fill out the waiver of process of service under the circumstances that
you believe there is no way the plaintiff can properly serve your client if
plaintiff cannot even serve your client, then there’s no reason to even pay
attention to the complaint. This applies to only a very small amount of cases.
C) When the defendant is in the US, he has at least 30 days to answer with a
waiver of summons [from when plaintiff sends it]. Answering the complaint
will go to 60 days by answering with the waiver [from the original 20 days if
you were actually served].
3.
4. B)
5.
6.
*There won’t be any obscure questions about service or process, just know
the basic principles of service or process!*
Class Notes from 10/3/11
Specific Jurisdiction General Jurisdiction
1. Asses Contacts: purposeful
availment?
--Directed activities or targeted the
forum state
--Enjoy the rights, privileges, and
protection of the forum state
--Effects test
--Sliding scale: internet contacts only;
helps prove whether someone has
purposefully availed themselves
*Expectations are not enough – you
need real actions*
2. Suit arises out of the contacts
3. Fair play and substantial justice –
also known as “Reasonableness Test”
--There are 5 factors to look at when
taking this into account
1. Asses Contacts: continuous and
systematic?
--Corporations can be subject to
jurisdiction where they are
incorporated – make their home [like
an individual]
10/03/11 – pgs. 154-164
E. Self-Imposed Restraints on Jurisdictional Power: Long-Arm Statutes,
Venue, and Discretionary Refusal of Jurisdiction
--There are 3 settings that are also taken into consideration before courts
can exercise jurisdiction:
Long-Arm Statutes,
Venue Laws, and
Doctrine of Forum Non-Conveniens
--Each of the above represents a situation in which the legislature or courts
have framed rules that restrict where a lawsuit may take place – even where
the US Constitution would pose no obstacles
I. Long-Arm Statutes as a Restraint on Jurisdiction
--A court may exercise jurisdiction over a defendant only when the state or
federal government authorizes it to do so & the authorization must be
constitutional as applied to the case in question.
--Because Pennoyer had conceived state court jurisdiction extensions as
near-physical exertions of state power, states authorizing courts to reach
beyond their own borders came to be known as “long-arm” statutes
--States are extending their jurisdictional “arms”
Some states have created long-arm statutes that reach as much
jurisdiction as the Constitution allows
o Example: California – as broad as the jurisdiction powers given
by the US Constitution
Other states have long-arm statutes limiting jurisdiction to specified
occurrences
o Example: Florida – only takes parts of the jurisdiction powers
given by the Constitution
Some states want more power than the Constitution gives to
them
some states only want a little power
US Constitution gives this much
jurisdictional power
*Why would a state want to lessen their power? They may not want to
congest their courts with a ton of cases.
Gibbons v. Brown
--Facts
(P) was driving with (D) and Mr. Brown in Canada in 1994. (P)
allegedly gave faulty directions to Mr. Brown, who was driving. Mr.
Brown ended up driving the wrong way down a one-way street into
a head-on collision that injured both passengers.
--Procedural History
(P) from Texas sued Mr. Brown in Florida. Two years later, (D)
brought this Florida action against (P) to recover for her injuries.
o There was general jurisdiction over Brown in the first suit
(D) alleged that (P) subjected herself to personal jurisdiction of the
Florida court by virtue of having brought the prior lawsuit. (P) filed a
motion to dismiss, claiming that the provisions of (D)’s original
complaint were inadequate to satisfy the Florida long-arm statute.
o (D) argues that (P)’s original suit fulfills that long-arm statute
part because (P) is “engaged in substantial and not isolate
activity” in the state of Florida
--Issue = Does previously availing oneself of a jurisdiction as a Plaintiff
automatically render one subject to jurisdiction later?
--Holding & Decision = No, trail court directed to dismiss (D)’s complaint.
--Rules & Reasoning
Without more, the fact that a current Defendant previously brought
a suit in the forum state does not constitute sufficient activities to
subject the current defendant to personal jurisdiction in the state.
US Constitution gives this much
jurisdictional power
o The only contact she has to the state now is defending the
suit in question here – no other contacts or activities
The length of time between the 2 actions was too long of a gap; (P)
was not involved in the prior suit; and (P) is not engaged in any
other activity in the state besides defending this claim.
--Discussion
The parties agreed that as a general rule in Florida, a Plaintiff, by
bringing an action, subjects herself to the jurisdiction of the court
and to subsequent lawful orders entered regarding the same
subject matter of that action.
However, the Court refused to hold that by filing a lawsuit in 1995,
Plaintiff should have to automatically consent to Florida jurisdiction
when she was named as a defendant in a related lawsuit two full
years later.
*If Mr. Brown file counterclaims against Gibbons, then he most likely could
file it because of efficiency of the courts since it would be the same case with
the same facts affecting it.
*What would happen if Mrs. Brown filed suit against Gibbons in 2 months of
the first suit filed by Gibbons was started? Would Florida have jurisdiction?
*If a court finds that it has jurisdiction over a defendant under long-arm
statutes, it would still need to look at whether that jurisdiction still falls under
the Constitution’s grant of jurisdiction
If the long-arm statute does not include jurisdiction over a defendant, then
Notes and Problems
1.
2.
3. The relation between long-arm statutes and the Due Process clause:
Analytically there are 2 distinct inquiries – the court must first
decide if the long-arm statute includes the current case, and second
the court must decide if asserting jurisdiction was constitutional
Some state’s long-arm statutes appear to be more restrictive than
the Constitution, but that does not mean that the statute is as strict
as the text seems
o Some courts have looked at these statutes and decided that
they encompass more than at first glance
4. The Federal Interpleader Act has given the federal courts the power to
serve process on anywhere in the nation, and this power has been
interpreted to include personal jurisdiction.
II. Venue as a Further Localizing Principle
--Like personal jurisdiction, venue determines where litigation will take place
Unlike personal jurisdiction, venue flows solely from statutory sources rather
than constitutional sources.
General federal statute dealing with venue is 28 USC §1391:
portions (a) & (b) of this statute put venue “where any defendant
resides” or where “a substantial part of the events or omissions
giving rise to the claim occurred”
Unlike personal jurisdiction, venue locates litigation not just in a
state but also in a particular federal judicial district within the state
o If someone is clearly subject to jurisdiction in Florida, there
are 3 different venue of federal judicial districts
The different districts of each state are set out by federal statutes
o States have venue provisions and federal venue provisions
--If you are deciding to bring suit and are trying to figure out what venue is
appropriate, then you can look at the 2 provisions in 28 USC §1391(a).
You may find venue in one place for the first one and another venue
somewhere different in the second one.
Example: Person A wants to bring suit so he looks at a possibly
venue. He finds that he can bring suit against defendant in NY; he
decides that he may not want to bring suit there because the courts
are congested. So he looks at the second provision of 28 USC, and
he finds that he can also bring suit in Vermont.
Notes and Problems
1. A) There is only one defendant so the proper venue could be Southern
District of NY [according to 28 USC § 1391(a)] & maybe even a few others.
2. Since one of the plaintiffs resides in NY and the other does his business in
NY, the venue would be NY BUT we need more info about where the breach
of contract took place and where the contract came from.
3. Southern District of NY would be the most proper because one is the
resident & the other does business (the business side give contacts and
reverts back to Perkins.
4. A) Options include Nevada because that is where the accident took place,
or California because that is where the defendant resides. There would be
personal jurisdiction over defendant because that is where he lives; there
would be specific jurisdiction over the defendant in Nevada because that is
where the reason for suit arises.
B) Options under 28 USC §1391(a) include Canada because the defendant
resides there, Nevada because that is where the accident took place (the
reason for the suit), or really any suit because the defendant is an alien
28 USC §1391(d) says that an alien may be sued in any district.
Venue does open up more options without looking at personal jurisdiction, so
remember that these must work together!
5. The two provisions of the USC 1391 do have very minimal differences, but
they are important to keep in mind.
Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd.
--Facts & Procedural History
(P)s Dee-K and Asheboro were Virginia and North Carolina
corporations that bought rubber thread from the Defendants to
make bungee cords. (P)s sued a number of corporations producing
the rubber thread, which corporations were located in Malaysia,
Indonesia, and Thailand. (P)s alleged a broad conspiracy among the
(D)s to fix prices and restrain competition in rubber thread.
(D)s challenged jurisdiction and venue.
--Issue = Is there United States personal jurisdiction over the Indonesian
manufacturer that consummates its sales of thread in Indonesia?
Is venue proper in the Eastern District of Virginia?
--Holding & Decision = Maybe, need more info!
Yes. The Supreme Court of the United States held that due process
was satisfied by the Defendants’ appointment of exclusive U.S.
sales agents and its customizing of its products for the U.S. market.
Yes. The Supreme Court has held that aliens may be sued in any
federal judicial district.
o USC §1391(d) covers only the alien defendants, but we still
have the defendants who are from USA
Foreign defendants can be sued anywhere (aliens). Some of the
contacts of American defendants are sparse and some seem to be
located in the western district rather than the eastern district.
--Discussion
Students should realize here that the mere fact that a Defendant is
a foreign corporation does not automatically escape Federal court
jurisdiction.
The Supreme Court points out that FRCP 4(k)(2) provides that a
Defendant who is not subject to the jurisdiction of any state court
that is served with process is subject to personal jurisdiction in the
Federal courts as long as the assertion of jurisdiction is consistent
with federal law and does not offend the US Constitution.
Thus, so long as the actual method of service of process complied
with existing federal law, jurisdiction over a foreign corporation is
appropriate where the Constitutional test of fair play and substantial
justice in asserting jurisdiction is satisfied.
10/09/11 – pgs. 164-171
III. Declining Jurisdiction: Transfer and Forum Non-Conveniens
Both state and federal courts may decline to exercise jurisdiction
even though they possess it. As more and more cases are filed &
courts become backed up with them, more courts have exercised
the power to decline to exercise jurisdiction
If a case is brought into an improper district, then the court can
transfer the case to another judicial district; however this transfer
only takes place in the Federal District System (see Piper case)
o The court can either dismiss the case for improper jurisdiction,
or may transfer the case to another venue
Forum Non Conveniens case is dismissed (but under the
assertion that the case will be moved to a foreign court system)
o Forum Non-Conveniens is a common-law doctrine, NOT a
statute so it does not apply to Louisiana
o If a case is dismissed this way in federal court, it is normally
so the case can be filed in another country. If a case is
dismissed this way in state court, it is normally so the case
can be refilled in another state.=
Transfer under 28 USC §1404, 1406, 1631 – this only applied to
federal courts and it allows the federal courts to move cases around
the country for “the convenience of parties and witnesses in the
interest of justice”
o While reading Piper, take notice that (D)s first removed to
federal court and then sought transfer to a different judicial
district under §1404
o §1404 permits transfer for “convenience of parties and
witnesses in the interest of justice” – it gives federal courts
the ability to move cases within the system without have to
dismiss and re-file
Both of these dismissals come about in circumstances where the
court has the power to exercise jurisdiction, but for reasons of
justice or efficiency, the court decides not to
A. Piper shows the doctrine of forum non-conveniens.
B. Transfer under 28 USC §1404, §1406, and §1631
Transferring a case under §1404 gives the federal courts the ability
to move cases within the system without the necessity for dismissal
and refilling, which would be necessary under the doctrine of forum
non conveniens
§1406 allows transfer from a district where the venue is improper. It
also allows dismissal.
§1631 allows transfer to another court when the original court lacks
jurisdiction. The transferred action relates back to the original date
of filing however.
§1407 applies to the pre-trial motions and actions, and it halts once
the trial begins. This deals with consolidating claims and suits for
efficiency – there is no reason for multiple courts to decide the
same motions and actions for the same case.
Piper Aircraft v. Reyno
--Facts
A small commercial plane crashed in Scotland killing its five
passengers and the pilot. The decedents and heirs are all
Scottish. There were no eyewitnesses. The aircraft was
manufactured in PA by (P) Piper. The propellers were manufactured
by (P) Hartzell in OH. The aircraft was own and operated by UK
companies.
A British report indicated that pilot error may have contributed to
the crash. The pilot only had his license for three months prior. A
CA probate court appointed (D) Reyno as administratrix of the
estates of the passengers. She was legal secretary of their
survivor’s attorney.
--Procedural History
(D) filed action in CA state court; (Ps) both removed to Federal
District Court in CA because of diversity of citizenship. (P-Piper)
sought transfer to Middle District of PA under §1404 because that is
where he does business. (P-Hartzell) motioned for dismissal for lack
of personal jurisdiction OR transfer for the same reason as Piper.
o 28 USC §1404(a) – transfer of venue. For the convenience of
parties an witnesses, in the interest of justice, a DC may
transfer an civil action to any other district or division where it
might have been brought
Court transferred the case. Then both (D)s filed motion to dismiss
on grounds of Forum Non Conveniens. That motion was granted, so
(P) appealed.
PA District Court granted the dismissal stating that the chosen
forum would force oppression against defendant and would be an
inappropriate forum because of court’s legal problems.
(D) appealed. CoA reversed because dismissal based on Forum Non
Conveniens is never appropriate where law in alternative forum is
unfriendly to plaintiff. US Supreme Court now reviews
--Issue = Can a plaintiff defeat a motion to dismiss on ground of forum non
conveniens by showing that the substantive law that would be applied in the
alternative forum is less favorable to him than that of the chosen forum; and
Is it unreasonable to dismiss a case based on fewer evidentiary
problems that would be posed if the trial were held in a different
forum, if that other forum would not be as favorable to the plaintiff?
--(D-Reyno)’s argument
American citizens have an interest in ensuring that US
manufacturers are deterred from producing defective products &
additional deterrence might be obtained by US trial where they
could be sued on the basis of both negligence and strict liability
--(P-Piper & Hartzell)’s argument
The oppressiveness imposed against (Ds) by forcing them to defend
a case in US courts when all the evidence and witnesses are located
in Scotland is contrary to established law
--Holding = NO, CoA’s judgement is reversed back to DC’s original ruling.
--Rules & Reasoning: When an alternative forum has jurisdiction to hear a
case and when trial in the chosen forum would establish oppressiveness and
vexation to a defendant out of proportion to the plaintiff’s convenience, OR
when the chosen forum is inappropriate because of considerations affecting
the court’s own administrative and legal concerns, the court may in the
exercise of sound discretion dismiss the case by applying the list of private
and public interest factors. In a motion to dismiss for forum non conveniens,
a court should consider both private and public interest factors.
Private factors include the relative ease of access to sources of
proof, availability of a required process for the attendance of
unwilling witnesses, the cost of attendance of witnesses, the
possibility of viewing the scene if appropriate to the action, and
other practical matters related to making the trial easy, expeditious,
and inexpensive.
Public factors include administrative difficulties of the courts,
interest in having local controversies decided at home, the interest
of having the trial in a forum that is familiar with the law governing
the action, the avoidance of unnecessary problems in conflict of
laws or the application of foreign law, and the unfairness of
burdening citizens in an unrelated forum with jury duty.
The court held that private factors favored Scotland because the
wreckage of the plane and witnesses were there. The court also
held that public factors favored Scotland because Scotland had a
greater interesting in hearing a case that concerned Scottish
citizens. The court also held that the fact that Scotland might have
been less favorable to Reyno based on its lack of strict liability for
torts did not provide a reason to dismiss the defendants’ motion.
o Also the interest to hold American companies liable for its
actions and products is far less here than the amount of
resources and time it would take to try the case in the US
--Policy: Courts will honor a plaintiff’s chosen forum normally, but for foreign
plaintiffs because their choice deserves less consideration.
Plaintiffs are now free to re-file in any other jurisdiction, but
Scotland is the clear choice. However, statute of limitations does
affect a case like this so they only have a certain amount of time.
--Why would someone want to litigate in a US jurisdiction over a foreign
jurisdiction?
More familiar with laws of jurisdiction
Laws of jurisdiction would be more favorable to plaintiff
To get a fair trial – US system of litigation is very unique compared
to other places ad most foreigners prefer it
More liberal discovery rules, jury trials are available, etc.
Notes & Problems
1.
2.
3. Reyno now has two basic options – either drop the lawsuit completely or
refile it in Scotland. But what about the statue of limitations? When the
defendant moves to dismissal based on an inconvenient forum, they
normally must agree in advance to waive the statute of limitations defense
in the alternative forum. This also applies to personal jurisdiction – when a
defendant moves for transfer of jurisdiction or venue, the court will require
the defendant to agree to waive jurisdiction or venue defenses in the new
forum. Defendants cannot simply move for dismissal leaving the plaintiff
without any means for relief in these situations.
4.
5. A court more than likely will not have to decide if it actually has
jurisdiction to hear the claim when deciding to grant a motion for transfer or
forum non conveniens.
6. B) Some US courts may refuse to dismiss a case based on the fact that
litigating the case in a foreign court system produces no viable choice for
venue. Most courts will not dismiss a case if there is no other option to
litigate the case.
7. A) Guidu v. Inter-Continental Hotels Corp. The trial court dismissed the
case stating that Egypt would be a better forum to litigate the case because
an Egyptian court would be more familiar with Egyptian laws, Egypt would
properly handle the case based on its commitment to tourism, and there was
already litigation there from other victim’s families. However, the CoA
reversed this stating that the burden on plaintiffs to bring their suit in Egypt
far outweighed the burden on the defendants – US was better forum based
on the plaintiff’s suit.
B) Gonzales v. Chrysler Corp. Even though Mexico is not a viable
venue for this case because of the cap award on the loss of child,
this case was dismissed in US. There is no real remedy here for the
plaintiff, but the court still dismisses because it says that all other
factors do not apply here for case to be tried in US. The court is
setting up public policy here stating that the economic viability to
bring a suit in an alternative forum is not a factor they can take into
consideration because then there would be no real place to stop
when it comes to the $$$.
--Ferrens case is it ethical to follow the plaintiff’s actions?
Strategic lawyering to get an advantage.
There was accident in PN, and case was filed in PN against
defendant for contract. Another case was attempted to be filed
based on tort action, but statute of limitations had run out.
They go searching for another court where they can get jurisdiction
over defendant & where the statute of limitations on tort action has
not run out yet. They find MS where they can file the tort action.
They file the tort action and then file motion to transfer the tort
case to PN according to all public and private interest factors.
Unreasonable burden on (P), (D) is already defending in PN, (P)’s
hospital records are in PN, etc.
After transfer, PN court has no choice in not allowing the transfer
because they are bound by a previous case decision to follow the
laws of MS – statute on tort action comes from MS law
10/12/11 – pgs. 172-184
Notes & Problems
1.
2.
3. There are some key differences between §1404 and the doctrine of forum
non conveniens:
§1404 only applies to federal courts. State courts can dismiss a case
based on the doctrine of forum non conveniens or their own
statutes that resemble §1404. However, state courts lack the power
to transfer a case to another state.
Forum non conveniens can only be used by defendants. Plaintiffs
can seek transfer under §1404.
A district judge has more discretion under §1404 than the doctrine
of forum non conveniens.
4.
5.
Chapter 3: Subject Matter Jurisdiction
A. The Idea & Structure of Subject Matter Jurisdiction
--When looking at personal jurisdiction (first jurisdictional boundary), we are
looking at a court’s power to give a judgment that is binding on the
defendant
Here is a second jurisdictional boundary placed on courts – subject
matter jurisdiction, which deals with the powers of the state and
federal courts
Litigants, lawyers, and judges need to know which kinds of cases
belong in which courts because both state and federal governments
have their own court systems
o Federal courts share most of their jurisdiction with state
courts according to statutes – concurrent jurisdiction
o Concurrent jurisdiction means that a case can be filed in
either a state court or a federal court (depending on statutes
& Constitution)
Article III, §2 limits federal court’s jurisdiction to a list. This implies
that a case not listed in this section may not be heard in federal
court (can only be heard in state court)
o “The judicial power shall extend to all cases arising under
this constitution, the law of the US, and treaties made.”
o Federal courts are exclusive – the only way a case can be filed
in federal court is if it is written in a statute
Rule 8(a) requires every federal complaint to begin with “a short
and plain statement of the grounds for the courts’ jurisdiction”
28 USC §1331 grants federal district courts jurisdiction over cases
that arise under federal law; however, they do not have exclusive
jurisdiction over such cases (can also be brought in state court)
o --Arises under per §1331: “if a well-pleaded complaint
establishes either that 1) federal law creates the cause of
action OR 2) that the plaintiff’s right to relief necessarily
depends on resolution of a substantial question of federal
law”
o “The district courts shall have original jurisdiction of all civil
actions arising under the US Constitution, law, or treaties”
o Explanation: District courts have original jurisdiction of all civil
actions, but its not as broad as the jurisdiction given under
Article III, §2 of Constitution ^^^^
However, federal jurisdiction can also be excusive. Some areas here
are admiralty, bankruptcy, and anti-trusts
This type of jurisdiction matters in several different ways:
o Tactical – federal courts may have shorter waiting times until
trial over their state counterparts
o Strategic – the defendant (or plaintiff) can get more sympathy
from a federal court or a state court, depending on the issue
o Crafty – the opposing lawyer may not fair well with the more
formal and faster pace of federal litigation
Article III, §1 gives federal judges lifetime tenure – this means that
they are protected from political pressure because they don’t have
to worry about re-elections
o Example: a litigant with a legally strong but unpopular claim
or defense might prefer federal court for this reason
Unlike personal jurisdiction, there can be no waive of subject matter
jurisdiction. Even if both parties decide on where to file the suit,
neither party can waive subject matter jurisdiction
--28 USC §1332(c)(2) deals with the legal representative of the
estate or decedent and citizenship.
o The legal representative of a decedent, infant, or incompetent
will be the citizen of the same state as the decedent, infant,
or incompetent.
B. Federal Question Jurisdiction
In the past, unless covered by one of the specific and generally
narrowly drawn statutes, a claim based on the Constitution or a
federal statute could not be brought in federal court
NOW, there is the federal question statute – key provision is that
district courts can have jurisdiction over cases “arising under” the
Constitution, federal statutes, or federal treaties
Definition: the exercise of federal court power over claims arising
under the US Constitution, an act of Congress, or a treaty
--Hypo: person from Minnesota going to Denver. She injures someone from
Colorado in Denver, so where can a suit be filed?
Minnesota – Person is domiciled in Minnesota so definitely general
personal jurisdiction there.
Colorado – the accident took place there so definitely specific
personal jurisdiction there
Proceeding under diversity, Federal Court may also be an option
because both people are from different states.
Proceeding under Federal Question, Federal Court may also be an
option as long as there is a violation of federal statute?
Doctrine Personal Jurisdiction Federal Subject Matter
Jurisdiction
Constitutional Source Due Process clause in
the 14th Amendment
Article III
Statutory Source State and federal long
arm statutes – Rule 4(k)
(1)(A)
Federal jurisdictional
statutes – 28 USC
§1331, §1332, etc.
Effect Limits the power of
state and federal courts
in any given state over
cases involving
particular defendants
Limits power of federal
courts to certain kinds
of cases – those
involving federal claims,
diverse parties, etc.
Pg. 177 diagram
**A case that began in state court and has been ligated all the way through
the state court can make its way to the US Supreme Court if there is a
violation of the US Constitution**
Person appealed will file a writ of certiorari, which US Supreme
Court will either grant or deny
Louisville & Nashville Railroad v. Mottley
--Facts
(D)s Mottleys were injured in a railroad accident and accepted
settlement from (P) railroad that gave them lifetime train passes.
A few decades later, Congress made passes illegal because the
passes were often being used as bribes for political officials.
(D)s want to claim their lifetime passes still, but (P) revokes lifetime
passes based on the Congressional Act
(D)s claim that (1) new rule does not prevent free passes under
these specific circumstances (2) even if the law does prevent the
passes, the Fifth Amendment does not allow taking of property
without the due process of law
--Procedural History
(D)s sue for breach of contract in Federal district court because they
assumed that (D)’s defense would be the new federal law.
(P) demurred, but Federal district court overruled it. Federal district
court then ruled in favor of (D)s, granting them their recovery.
o Demurrer – the facts may be true, but there is no real cause
of action
(P) appeals to Supreme Court to invalidate the passes.
--Issue = is there federal subject matter jurisdiction over a case whose cause
of action does not arise out of a federal law or statute?
--Holding & Decision = Federal District Court’s judgment is reversed and
remitted to the circuit court with instructions to dismiss because federal
courts lack jurisdiction in this matter
SC states that the lower federal court that heard and ruled on this
case didn’t have jurisdiction under §1331. Therefore, SC can’t even
look at the issues in this case because the lower federal court was
erroneous in making a ruling. Must go to state court
--Rules & Reasoning
The action for breach of contract falls under State law, but even
past that, the court only looks at the plaintiff’s allegations in their
complaint originally filed.
A suit arises under the US Constitution and US laws only when the
plaintiff’s statement of his own cause of action shows that it is
based upon those laws or the Constitution.
The plaintiff cannot allege an anticipated federal law defense to his
cause of action and gain subject matter jurisdiction.
o This case falls under §1331 because of federal district court
original jurisdiction
--Significance
There are two ways to establish federal court SMJ:
o One is through diversity of jurisdiction.
o The other is federal question jurisdiction, i.e. the complaint
must allege some violation of the US Constitution or some
federal statute.
Although the court found that (D)’s allegations show that in the
course of litigation a question under the US Constitution would
arise, this did not satisfy the court’s requirement for federal
question jurisdiction that (P)’s original cause of action arise under
the Constitution
This case could be appealed to the US Supreme Court after it was
litigated through the entire state court system because federal
jurisdiction would fall under US Const. art. III §2 – but the US
Supreme Court can deny writ of certiorari
**Courts can raise its own SMJ over a case, just like the court did here^^**
Page 179 – Scenarios: Is there Federal Questions Jurisdiction?
Worker v. Employer
o First, look at the well-pleaded complaint plaintiff states that
the employer has violated the federal law [basis of the
lawsuit]. It doesn’t matter what the employer’s defense is.
o Since worker has stated a federal question in his complaint,
this case does fall under §1331.
o Federal Question = YUP
Citizen v. Newspaper
o First, look at the well-pleaded complaint plaintiff brings a
libel claim, which falls under state law [basis of lawsuit].
o Since the worker has only stated a state law violation, this
case does not fall under §1331
o Federal Question = NOPE
They would only be able to see federal appellate court
after it has already been litigated once defense brings
up the Constitution amendment no original
jurisdiction for federal district courts
Notes & Problems
1.
2.
3.
4. The case above illustrates the rigid but widely used approach to decide
subject matter jurisdiction – the plaintiff’s well-pleaded complaint.
5. The phrase “arising under” is in both Article III and §1331. Most courts
state that Article III is much broader than §1331.
A) Since the constitutional meaning of “arising under” is broader,
the US Supreme court would have the subject matter jurisdiction to
hear the case if it was appealed. The district court did not have
jurisdiction over the case because it operates under §1331, which is
more narrow.
6.
7. A) No federal jurisdiction at first glance, until you look at the federal
agency that played a role in the reason for the suit. Smith is different from
previous case because Mottleys could have pursued their claim against the
defendants without ever mentioning federal law. Here, Smith could only have
brought his action by bringing up federal law – he would have had no cause
of action. B) Grable = this claim seems like a state claim, but in order for him
to bring about his claim, he MUST bring up the federal procedure behind the
defendant’s actions. Plaintiff can only bring about his suit by bringing up
both state and federal law, thus there is federal question; Empire = this is
typically a state claim because it deals with insurance and subrogation. Even
though there were federal employees and federal statutes, the court
reasoned that the case was based on state subrogation law – no federal
claims. Health insurer can seek its suit under state law.
8. Declaratory Judgment – a binding adjudication that establishes the rights
and other legal relations of the parties without providing for or ordering
enforcement.
9. If you want a case to keep its federal jurisdiction, then you must make
sure that your judgment or settlement in a consent decree. A consent
decree/ consent judgment is the only way for someone to bring an action for
defendant’s violation of their settlement/ judgment.
Without the consent decree, there is only a normal breach of
contract which falls under state law
10/13/11 – pgs. 186-201
Note: Challenging Federal Subject Matter Jurisdiction
If you believe there is no basis for federal subject matter
jurisdiction, then you could move for dismissal under Rule 12(b)(1),
asserting the absence of federal subject matter jurisdiction [for
dismissal based on diversity]
Rule 12(b)(1) motions for lack of subject matter jurisdiction based
on “arising under” generally take one of two forms:
o (1) a facial attack on the sufficiency of the complaint’s
allegations as to subject matter jurisdiction – attack the claim
stating there is no federal claim so no jurisdiction; or
o (2) a challenge to the actual facts upon which subject matter
jurisdiction is based – there’s no jurisdiction because there’s
no claim arising under federal law.
The other option is Rule 12(b)(6) – motion to dismiss the
substantive claim, which means if a court grants this then the
federal law raised does not apply to the facts of the case
If the case is dismissed under Rule 12(b)(1), then the plaintiff can
STILL bring their action in state court
o If the court dismisses under this rule, then the plaintiff cannot
re-file their action anywhere because of claim preclusion???
Notes & Problems on How to Respond to Federal SMJ
1.
2.
3.
4.
--Hypo: In Mottleys v. RR, there is no federal question. But suppose Mottleys
are from Kentucky, and RR has its principal place in NY and is incorporated in
Delaware. Is there SMJ?
YES because of diversity of citizenship under federal law
Even though The US Constitution does not give a specific value of
the controversy, 28 USC §1332 narrows the jurisdiction given in the
Constitution [must be more than $75,000]
The provisions of §1332 have been interpreted very narrowly and
very strictly because there have been talks about getting rid of
diversity jurisdiction
C. Diversity Jurisdiction [diversity of citizenship]
Federal diversity of citizenship jurisdiction is made possible by
article III of the US Constitution
Diversity jurisdiction – a federal court’s exercise of authority over a
case involving parties who are citizens of different states and an
amount in controversy greater than the statutory minimum [ 28
USC 1332]
Diversity of citizenship – a basis for federal court jurisdiction that
exists when 1) a case is between citizens of different states or a
citizen of a state and an alien & 2) the matter in controversy
exceeds specific value
o A corporation is considered a citizen of both the state of
incorporation and the state of its principal place of business
o An unincorporated association, such as a partnership, is
considered a citizen of each state where at least one of its
members is a citizen
o Complete diversity must exist for federal subject matter
jurisdiction – this means that all the parties on both sides of
the case must be from different states all plaintiffs must
have different citizenships from all defendants
US Supreme Court has stated that diversity jurisdiction was created
by the legislature to provide a neutral forum for US citizens, foreign
citizens, US states, and foreign states
Recently, Congress has suggested that there is a broader function
for diversity jurisdiction – some cases have national scope and
national implications, so those cases should be heard in a national
court, even if the governing law is state law
o Pay attention to how uncertainty about diversity plays a role
Redner v. Sanders
--Facts: (P) says he is a US citizen residing in France. (D)s are from NY.
(P) files his suit in the Central District of NY asserting diversity
jurisdiction because he is a resident of a foreign state while (D)s are
residents of NY.
o He seems to be applying 28 USC §1332 (a)(2) as a basis for
jurisdiction, alleging he is a resident of France.
o (P) also talks about his connection with CA, mentioning his
various contacts with that state. (P) is trying to lay basis for
jurisdiction under §1332(a)(1).
(D)s file a motion to dismiss the case under Rule 12(b)(1) for lack of
subject matter jurisdiction
--Issue = does subject matter jurisdiction hold citizenship and residence of a
state to mean the same thing?
--Holding = (P)’s case is dismissed for lack of subject matter jurisdiction.
He can re-file this suit again if he gathers more evidence.
--Reasoning
To invoke 28 USC §1332 (a)(2), (P) must be a citizen of the foreign
state, not just a resident. (P) only lives in France, he is not a citizen.
So, this is not applicable.
o His affidavit is completely lacking in details about his life in
France – family, residence, ties to France, etc.
To invoke 28 USC §1332 (a)(1), he must be a citizen of a US state
which means he must be domiciled in that state and he must have
intent to remain there.
(P)’s evidence of domicile is not enough to demonstrate that he is a
citizen of Cali. Also, he never asserts that diversity jurisdiction exists
because of this purported CA domicile, and he does not make a
request to amend the complaint to assert such a claim.
**He can make a move to Cali, making him a citizen OR become a
French citizen and re-file his lawsuit – this may seem like playing
games, but he can do this because the court will only look at
diversity starting when he filed his suit.
o What if (D)s were incorporated in NY and principle-business
based in Cali? NO because there isn’t complete diversity –
there is a match because the courts look at both parts of a
corporations contacts with the states.
Notes & Problems
1.
2.
3. A) The time for measuring citizenship for diversity purposes is as of the
date on which the complaint is filed in federal court. This holds true even if
the plaintiff moves to another state for the sole purpose of establishing
diversity of citizenship.
4. A) Yes there would have been diversity because he would have been
considered a foreign alien. B) yes?
5.
6.
7.
8. Is there diversity? A) No because neither (P) nor (D) are citizens of US. B)
YES because there is a US citizen suing two foreign parties that are different
from each other. C) YES because parties on both sides are from US that are
different states, and there are different foreign parties too. D) NO because
this suit does not fit under any of the lettered sections in §1332 – they must
fit very narrowly and strictly according to the courts.
9. A) For a partnership of business, we need to look at where the partners
are citizens themselves. A few of these partners of the TX corporation were
actually Mexican citizens, thus destroying diversity. No diversity means no
federal jurisdiction.
10. 28 USC §1332(c) deals with determining the citizenship of a corporation.
Corporations have dual citizenship – where it is incorporated AND where it
has its chief place of business. The chief of the business place is a question
of fact – emphasis of the corporate nerve center where the executive and
administrative functions are controlled; concentration on the everyday
business activities of the company [called the muscle].
11.
12. §1359 deprives district courts of jurisdiction in cases where a party has
been “improperly or collusively” joined to invoke diversity jurisdiction.
13. A citizen of DC, Puerto Rico, Guam, and any other American territory is a
citizen of the “state” for diversity purposes.
14.
Hertz decision and pgs. 421-426 supp.
(P)s were just trying to argue that they have a really big presence in
the state of Cali. This court really attacks what the meaning of a
principal place of business of a corporation is.
--Holding: The Court must determine where the corporation’s high level
officers direct, control and coordinate the corporation’s activities (i.e., the
“nerve Center” test).
--Rationale: The Court determined that a corporation’s principal place of
business is the place where the corporation’s high-ranking offices direct,
control and coordinate the corporation’s activities
The Court stated that this place is generally the corporation’s
headquarters. The Court reasoned that the word “place” as used in
§1332 is singular and therefore implies a single place where the
principal business is occurring.
In addition, the text implies that courts should look for a place
within a state, rather than activities taking place throughout the
state.
Finally, the Court reviewed the legislative history and determined
that the legislature wanted the adopt the simple and
straightforward test for determining the principal place of business
and not a complicated one – such as a test where the principal
place of business is determined by the state in which the
corporation does most business
The biggest point here was that a company can have a huge factory
in one state but its principal place of business is actually
somewhere else – nerve center test is the most important test!!!
Saadeh v. Farouki
--Facts:
Farouki (D) owes Saadeh (P) money; by the time the suit was filed,
(D) had achieved permanent resident immigration status in US by
residing in Maryland.
--Procedural History
(P) is a Greek citizen and he invoked diversity jurisdiction. While
they were going through litigation, (D) became a citizen of the US.
District Court rendered a judgment for (P), and (D) appealed on the
merits of the case. Then the CoA asked about jurisdiction.
The parties never brought up jurisdiction at all, the court decided to
look at the issue of jurisdiction
--Issue = Is there subject matter jurisdiction a case involving two foreign
parties as plaintiff and defendant?
--Holding = CoA dismissed the case for lack of SMJ.
--Significance:
According to the last sentence of §1332(a), it seems that (D) would
be considered a citizen of MD because he is a permanent resident
and he is domiciled there. Thus, when taking this literally, it seems
that there is diversity jurisdiction under §1332 (a)(2).
However, the legislative intent was to eliminate diversity jurisdiction
cases between a citizen and an alien living in the same state.
Furthermore, if read literally, it seems that there will be an
unconstitutional result—it would create federal diversity in a lawsuit
brought by one alien against another alien.
The reason the court did not consider (D)’s recent citizen of the US
status is because they have to look at his citizenship at the time the
suit was filed.
Diversity Hypo: a US citizen of Maryland gets into a car accident with a
foreign alien who is domiciled in Maryland. Alien is a citizen of Jordan, but he
has been living in Maryland for he last 25 years. Diversity jurisdiction?
NOPE because the courts would look at these two parties as
residents of the same state.
The judgment here shows a very different interpretation of the
same provision applied to the above Saadeh case. The point of this
provision though is to DEFEAT FEDERAL jurisdiction – they do not
want to add more cases.
Our US Constitution article III, §2 would not allow a court to hear a
US federal suit between 2 foreign citizens.
Notes & Problems
1.
2.
3. SPLIT IN JURISDICTION!! 7th circuit takes the position that for diversity
purposes a resident alien is like a corporation with dual citizenship – a citizen
of both her state of residence and of the foreign nation where she still holds
citizenship. 3rd circuit takes the position that the permanent alien is a citizen
of the state where he resides – not of his native land.
4.
5.
6.
10/17/11 – pgs. 201-213
--Note: $$ Amount in Controversy
Besides diversity §1332 requires the amount in controversy to
exceed $75,000.
This is put in our laws by Congress. The court will determine if the
amount in controversy is correct to allow the case to move forward
based on the well-pleaded complaint.
How do courts deal with cases where there is no actual cost in
controversy, but a specific performance? Courts will look at:
o Cost to the plaintiff;
o Cost to the defendant to specifically perform; and/ or
o Cost or value to the party seeking federal jurisdiction.
This will come up when the defendant questions whether the
plaintiff’s claim is actually worth $75,000 of damages
The will also come up when the plaintiff files case in state court, and
then the defendant has removed the case to federal court –
defendant alleges the damages are more than $75,000
Counterclaims under Rule 13 are different – if the RR had a
counterclaim of $10,000 against the Mottleys [who have $100,000].
Can RR raise the claim?
o They can if the counterclaim is compulsory – it has to be
raised or RR loses it, and it arises out of the same action that
the plaintiffs raise.
o They can’t if the counterclaim is permissive
--Hypo – Go back to the Mottley case:
Mr. Mottley and Mrs. Mottley each have $40,000 in damages for
their claims, so they want to add their claims together to exceed
the $75,000 – is this legal? NOPE because neither have the amount
She can aggregate her claims together in order to exceed the
$75,000 amount – is this legal? YUP
If she has $75,000 in her claim and he has $40,000, so he wants to
join his suit to hers – is this legal? YUP because she’s in
Examples of Congress requiring less for Diversity:
Federal Interpleader Act, 28 USC §1335
Class Action Fairness Act of 2005, 28 USC §1332 (d)
28 USC §1369
D. Supplemental Jurisdiction
This doctrine broadens and expands federal jurisdiction this
statute allows “jurisdiction over a claim that is part of the same
case or controversy as another claim over which the court has
original jurisdiction” [A is the widest part of the statute, and B & C
bring it back a little]
o By default, courts have supplemental jurisdiction over "all
other claims that are so related to claims in the action within
such original jurisdiction that they form part of the same case
or controversy" [§ 1367(a)].
o This means a federal court hearing a federal claim can also
hear substantially related state law claims, thereby
encouraging efficiency by having one trial at the federal level
rather than one trial in federal court & another in state court.
o However, if the case is brought as a diversity action, there
generally is no supplemental jurisdiction if such claims would
destroy complete diversity.
§1367(b) states “if jurisdiction is based on diversity, no
supplemental jurisdiction over claims by plaintiffs against persons
made parties under FRCP rule 1 (third party) 19, & 20 (joinder of a
party) or 24 (intervention).. when exercising supplemental
jurisdiction over such claims would be inconsistent with the
jurisdictional requirements of section 1332.”
Under 28 USC §1367(c), courts are also free to decline to exercise
supplemental jurisdiction in specified or exceptional circumstances.
§1367(c) provides four instances where a court can decline to
exercise supplemental jurisdiction:
o The claim raises a novel or complex issue of State law;
o The claim substantially predominates over the claim or claims
over which the District Court has original jurisdiction;
o The District Court has dismissed all claims over which its has
original jurisdiction; OR
o In exceptional circumstances, there are other compelling
reasons for declining jurisdiction
Notes & Problems
1.
2. A) There is federal question jurisdiction because of the violation of federal
civil rights, which gives subject matter jurisdiction. There is supplemental
jurisdiction because the state law claim has the same common core of
relevant facts to the federal suit. B) No supplemental jurisdiction because the
state law claim does not deal with the controversy in the suit – it’s a
completely different set of facts and has nothing to do with the federal
statute violation. C) The last sentence of §1367(a) allows the joining of the
additional party, and (b) doesn’t apply here because there is no diversity
jurisdiction here. There is supplemental jurisdiction because the state tort
law is related to the violation of the federal statute violation. D) This falls
directly under §1367(b), and there is no supplemental jurisdiction here
because of diversity issues. The additional party is from the same state as
(P), which destroys diversity and this violates another federal statute. E)
Supplemental jurisdiction is not needed here because there is diversity &
amount in controversy [§1331] and federal question claims [§1332].
Supplemental is only needed when you can’t get any federal jurisdiction
through the other federal statutes.
3. Supplemental jurisdiction basically means that the relationship between
the claims permits the conclusion that the entire action before the court
comprises one constitutional case.
United Mine Workers v. Gibbs -
4.
In re Ameriquest Mortgage Co. Lending Practices Litigation
--Facts:
(P) is a home buyer who is lending money from (D). (D)
overestimates her home value in order to increase her loan amount
and make more money.
(P) sues under the federal Truth in Lending Act (TILA). (P) also sues
for improper disclosure and conspiracy (both state laws)
o Count I: federal violation of TILA - goes up under §1331
(federal cause of action)
o Counts II and III: state fraud claims – can they go up under
supplemental jurisdiction?
--Procedural History:
(P) sues (D) in federal court for all her claims on the basis of
supplemental jurisdiction (§1367). Defendants move to dismiss
state claims via Rule 12(b)(1).
--Issue: Can a plaintiff’s state claims be linked to federal claims and get to
federal court under supplemental jurisdiction?
--Holding: (D)’s motion to dismiss state claims (counts II and III) is denied.
(P)’s claims can be linked because they combine to tell one story:
(P) didn’t know her right to cancel at the outset,
Her home value was overstated and so she has paid too much on
the loan and has not been allowed to refinance.
Now (P) wants to void her mortgage based on that lack of
disclosure.
--Reasoning: Court decides to exercise their discretion in favor of retaining
jurisdiction over all the claims.
In order to qualify, there must be common operative facts meaning
you would ordinarily try all the different claims in one case. Here,
the state claims are integrally connected to the federal claims.
The court couldn’t make a decision on one issue, without affecting
the decision on the other issue.
To determine whether the federal and state law claims are
connected by common and operative facts, the facts necessary to
prove the federal claim are compared with those necessary to the
success of the state claim.
In this case, Skanes (P) explicitly connected her federal and state
claims. She did not fully know of her right to cancel her mortgage,
she paid too much during the life of the loan because the mortgage
was overstated, and she has not been able to refinance the
mortgage due to the over-statement.
The connection is operative, in that if the court were to dismiss the
state law claims, it may not be able to grant the rescission of the
mortgage under TILA. Because the court cannot conclude that the
resolution of one of her state claims will have no effect on the
resolution on her federal claims, supplemental jurisdiction is proper
Szendrey-Ramos v. First Bancorp.
--Facts
(P) Ramos is employed as general counsel for (D) Bancorp. (P) is
told about some company ethics violations from an external source;
thus, (P) investigates and divulges her findings to both external and
internal sources. (P) is subsequently fired.
--Procedural History
(P) sues (D) in federal court for illegally firing her under US federal
law Title VII; she also states a number of violations of Puerto Rican
state law: wrongful discharge, violations of Puerto Rican
constitution, defamation, etc.
(D) motions to dismiss all state and federal claims.
--Issue: Does supplemental jurisdiction allow (P) to bring her state claims into
federal court?
--Holding: While the court does have supplemental jurisdiction over these
claims, this court uses its discretion not to exercise jurisdiction.
State law claims are dismissed. Federal Title VII claim can move
forward.
--Reasoning:
For §1367(a), look at the facts of the suit and see if they are related.
The court does have supplemental jurisdiction over the claims
brought by (P), but there are some issues.
o (1) State law claims raise novel and complex issues of state
law; and (2) State law claims substantially predominate over
the federal claim.
In regards to #1, the court does not want to touch interpreting what
Puerto Rico law says about ethics for lawyers
o Puerto Rican state law on some of the central matters is
substantially different than American law with regard to
lawyer conduct.
In regards to #2, state claims are far greater in number & to prove
them, case goes way outside the scope of what is needed to prove
the federal claim.
o If state law claims raise novel issues of state law or
substantially predominate over the federal claim, the state
claims cannot come up under supplemental jurisdiction – see
§1367(c).
Notes & Problems
1.
2. Even if the federal and state claims in an action arise out of the same
factual situation, litigating these claims together may not sere judicial
economy or trial convenience.
Federal and state laws have different focuses & they have evolved
at different times within different legislative systems
In almost every case with supplemental state claims, the courts and
counsel are unduly preoccupied with substantive and procedural
problems reconciling the two bodies of law and providing a fair and
meaningful proceeding.
The attempt to reconcile the two distinct bodies of law often
dominates and prolongs pretrial, complicates the trial, lengthens
the jury instructions, confuses the jury, results in inconsistent
verdicts, and causes post-trial problems with respect to judgment
interest and attorney fees.
3.
4.
10/19/11 – pgs. 213-221
E. Removal
Jurisdictional statutes give plaintiffs an initial choice of state or
federal court when federal and state court jurisdiction overlap
However, defendants also have the power to challenge the
plaintiff’s decision to choose state court when the claim could have
been brought in federal court
Removal is under 28 USC §1441
o (a) If the civil action is brought in state court and the federal
court would have original jurisdiction [either under federal
question or diversity], then the defendant has the right to
move for removal to federal court
If there are multiple defendants, then all the defendants
must agree together in the filing for removal – it doesn’t
have to signed, but the defendants must all consent to
it in court
o (b) If the case is removed because of diversity, then that
defendant cannot remove it to state court if he is home-
towned in that state
The procedure for removal is under §1446
o Defendant files a “notice for removal.” It only needs to be “a
short and plain statement of the grounds for removal,
together with a copy of all process, pleadings and orders”
o You must file within 30 days after you (as the defendant)
receive file; however, you only have one year to remove if its
based on diversity of citizenship
If its not based on diversity, then there is no 1-year cap
The process for challenging removal is under 28 USC §1447.
§1447(c) has provisions concerning remand to state courts:
o 1) A motion to remand on the basis of any defect other than
lack of SMJ has a 30-day limit this applies to problems that
would prevent removal but would not have destroyed federal
jurisdiction
Motion to remand has a 30 day limit after the filing of
the notice for removal. If you don’t file this motion in
time, then as the plaintiff then you will lose your right
and the case will stay where the courts decide
jurisdiction lies
This 30 day limit is the plaintiff’s window to point out
lack of jurisdiction and procedural issues made by
defendant
This motion will give the plaintiff the right to point out
any problems with the case’s procedure [if defendant
filed removal after 30 day limit] – the defendant’s
screw-ups can help the plaintiff even if the federal
courts have jurisdiction
o 2) Requires remand if the district court lacks SMJ this refers
to the facts that negate federal SMJ
Hypo about removal and remand: Situation of a case where it is removable.
(P) wants to move to remand the case because (D) didn’t file for removal
within the 30 day time limit. However, (P) misses his 30 day window to point
out that (D)’s procedural error; can he do anything?
(P) can file a motion for sanctions OR the court can sanction (D) for
missing the window to file for removal.
Notes & Problems
1. A) This case cannot be removed because 1st amendment is a defense, and
the federal claim must be in the complaint. Defamation is not a federal
claim, so there is no federal jurisdiction because plaintiff’s complaint does
not bring up federal question. B) Yes because the original action could have
been brought into federal court based on the federal question. C) Yes
because there is diversity and the amount on controversy is satisfied. D) This
action could not be brought in NJ court because the defendant is from NJ – he
couldn’t argue bias against him. E) Because the plaintiff brought in the
federal claim, the defendant may remove the whole action because of the
federal question claim now under §1441(c). F) Even though both (D)s
consented to removal, the case cannot be removed because one of the
defendants are from the home state where the suit is filed.
2. A) Notice must say that there is diversity and the amount in controversy
fulfills the requirement in the USC. E) Most states do not allow parties to
assert the amount of damages in their complaint. If the damages are higher,
then send the interrogatory to the plaintiff a question of what specifically
makes up that amount and what the elements of the damages are. You will
then have the information you need to prove that the amount is higher,
which will make the case removable.
Courts look at the plaintiffs well-pleaded complaint so will the
court make a determination of whether the complaint is generally
correct in terms of damages alleged?
If a defendant thinks a case is removable but cannot remove it for
amount in controversy, what should he do – get a statement from
plaintiff showing what the damages are and what they believe those
damages amount to.
However, if you can’t get this information, then you can’t file a
notice for removal – if you do, then you will be sanctioned.
IMPORTANT Hypo = (D1) is a small-time player from Georgia and (D2) is the
big-time player from South Carolina. (D1) gets served first about the suit in
Pennsylvania court. (D1) doesn’t pay attention to the claims against him in
terms of removal because he doesn’t believe it matters. (D2) is served a
month later, and he asserts right to removal for the case. There is a split in
jurisdiction about this situation:
Some courts believe that it deals with the service of the first
defendant – in this situation, it means that (D2) would not be able to
file for removal because the 30 day limit has run from (D1)’s service
of the suit.
o 5th circuit goes with this rule above
Other courts believe that it deals with the service of the last served
defendant – then (D2) would be able to file for removal. They claim
that this situation should be the last served defendant because the
plaintiff has the duty to serve all the defendants, and all the
defendants have their own rights in a case.
o 6th, 8th, and 11th circuit agree with this rule above
****Rule 11 will not sanction you for a good-faith argument. So if you are
placed in this situation, then you can plead one of these arguments showing
that there is a split in jurisdiction****
Caterpillar, Inc. v. Lewis
--Facts
(D) Lewis, a Kentucky resident, commenced this civil action in
Kentucky state court after sustaining personal injuries while
operating a bulldozer. Asserting state-law claims, Lewis named as
previous (D)s the manufacturer of the bulldozer—(P) Caterpillar Inc.,
a Delaware corporation with its principal place of business in
Illinois--and the company that serviced the bulldozer--Whayne
Supply Company, a Kentucky corporation with its principal place of
business in Kentucky.
Liberty Mutual, a MA corporation, intervened later as an additional
(P) asserting subrogation claims against both (D)s. Lewis entered
into a settlement agreement w/ (D) Whayne, which allowed Whayne
to be dismissed as a (D).
--Procedural History
With 1 day to spare the statutory req. of 1 year, (D) Caterpillar filed
a notice of removal to Kentucky Federal DC asserting complete
diversity because Whayne exited the case post-settlement.
o However, the official documents that dismissed Whayne as a
defendant have not be filed, so they are technically still a
party to the lawsuit
Lewis objected to removal and moved to remand the case to state
court stating that Liberty had not settled its subrogation w/ Whanye
yet – no diversity. Federal District Court denied the motion.
3 years later Liberty and Whayne settled. Jury trial followed with a
verdict for Caterpillar. Lewis appealed the judgment stating that
removal of the case when diversity was incomplete is a
jurisdictional defect = the court lacked SMJ. Adherence to the rules
prescribed for removal would have kept the case in state court.
CoA vacated the judgment, concluding that because of lack of
diversity at the time of removal, the Federal District Court lacked
subject-matter jurisdiction.
--Issue = Is a DC’s error in failing to remand a case improperly removed fatal
to the ensuing adjudication if federal jurisdictional requirements are met at
the time judgment is entered?
--Holding & Decision = CoA erred in resting its decision on the absence of
subject matter jurisdiction. Reversed and remanded
--Rule & Reasoning
The case was improperly removed because there was no diversity
because parties from Kentucky were on both sides, AND the motion
for remand was improperly denied – BUT there were no lingering
jurisdictional issues when the trial took place in Federal Court.
o At the time of trial in Federal District Court, there was
complete diversity and federal subject matter jurisdiction.
The result would have been the same for the case even if the
motion to remand had been granted – matters of efficiency,
economy, and finality outweigh going back through the case all over
again because the result would have been the same.
--Significance = this case has been very, VERY narrowly and strictly applied
and used. Federal Court jurisdiction must hold through the entire time of the
case for a court to allow a mistake of procedure go without being fixed.
Hypo = (D) is from TN and (P) is from KY, and there is a valid legal amount in
controversy for federal court jurisdiction.
If there are two non-diverse parties, and (D) moves to TN. Is the
case removable? No because there was no diversity at the time of
filing.
(P) is from KY, (D1) is from KY, and (D2) is from LA. (D1) is
dismissed from the suit. Thus (D2) can file for removal as long as he
meets the requirement for time to file.
--5th circuit – if there is a claim for some type of fraud form any of the parties,
there must be grievous evidence pointing it out
In one case like the above hypo, the dismissal of one party made
the case removable. (D)s had made the file for removal well within
the time period specified in the time limit. However, the plaintiff
held onto the file for removal a few days past the 1 year limit to
keep the defendant from removing the case legally. 5th circuit ruled
in favor of (D) and allowed removal
Notes & Problems
11/19/12 10:22 AM
10/31/11 – pgs. 221-237
Chapter 4: The Erie Problem [definition in Black’s]
This chapter explores an entailment of the shared power between
state and federal courts to hear case. How does the Constitution
ensure that these two court systems respect each other’s spheres
of power?
They exercise overlapping jurisdiction and share power – several
different states may have jurisdiction to hear a case against a
particular defendant.
o Similarly state courts can hear cases arising under federal
law, and federal courts [sitting in diversity] can hear cases
that could also be tried in state courts
So what law applies to these cases? This opens the broad field of
inquiry knows as choice of law or conflicts of law
o Erie raises the question that when a federal court sits in
diversity jurisdiction, what law does it apply?
This problem only applies to diversity cases!
o Why would a plaintiff want to fill in federal district court in the
defendant’s hometown state? To gain personal jurisdiction
over defendant, the laws in that state are better for him, he
may have pissed people off in his own state court system, the
defendant’s state court system might be more efficient, etc.
A. State Courts as Lawmakers in a Federal System
Rules of Decision Act, 28 USC §1652 – “the laws of several states,
except where the Constitution or acts of Congress, shall be
regarded as rules of decisions in civil actions in the courts of the US,
in cases where they apply”
o So what law is applied then? Substantive enacted law and
case law will be applied!
o Stare decisis – precedent set by the highest court in the state
will be used in these federal courts to apply to the case, but
the federal courts are not necessarily bound by this doctrine
For many federal courts, Swift became a charter of judicial
independence – a declaration that they could ignore state case law
when they heard diversity cases
--The Issue in Historical Context
Swift v. Tyson [1841]
o Issue = Does the term “laws of the several states” in the
Rules of Decision Act include state common law?
o Holding = No, the term “laws of the several states” in the
Rules of Decision Act does not include state common law.
o Reasoning = The court held that the “laws of the several
states” in the Act required federal courts to apply state
statutory law but not state common law [civilian approach].
The decisions of courts hardly constitute laws; they are
at most only evidence of what laws are. The laws of the
state are understood to mean the rules and enactments
written by the legislative authority, or long established
by local customs having the force of law.
The court stated that it had long considered that the Act
was limited only to positive statutes of states. Under
these facts, the common law (or judge made law) of
New York would provide a defense to Tyson but the
federal courts were not required to apply it by virtue of
the Rules of Decision Act.
--Constitutionalizing the Issue
Erie Railroad v. Tompkins
--Facts
Tompkins (P) sustained personal injuries when he was struck by an
Erie Railroad Company (D) freight train in Pennsylvania while
walking on a footpath adjacent to the tracks. Tompkins was a citizen
of Pennsylvania and Erie Railroad Company was incorporated in
New York.
--Procedural history
(D) brought this diversity lawsuit in NY federal district court
asserting that he was lawfully on the property as a licensee, and
that the accident occurred as a result of Erie Railroad’s negligence
in the operation or maintenance of the train. (P) Erie denied liability
and asserted that the rule that had been established in the courts of
Pennsylvania should apply.
o Under PN rule, persons using pathways adjacent to railways
were deemed trespassers and the railroad would not liable for
injuries unless its actions were wanton or willful.
o He wanted NY court in hopes that they would apply “general”
common law from all over that constituted ordinary
negligence law because it would help him recover damages.
Tompkins contended that since no PA statute addressed liability in
such cases, the railroad’s liability should be determined according
to the rule established in Swift v. Tyson. Under Federal CML,
Tompkins would be regarded as a licensee, so Erie would be liable
upon a showing of ordinary negligence.
Jury returned a verdict for Tompkins for $30,000. The CoA affirmed,
holding that in regards to questions of general law not covered by
state statute, federal courts are free to exercise their judgment as
to what the law is.
The Supreme Court granted certiorari.
--Issue = In diversity actions, except in matters governed by the Constitution
or acts of Congress, must federal courts apply state common law in addition
to statutory law?
--Holding = Reversed and remanded back where state laws will be applied.
--Rule & Reasoning (Brandeis)
In diversity actions, except in matters governed by the Constitution
or Acts of Congress, federal courts must apply state common law in
addition to statutory law. Swift is unconstitutional
In diversity cases, federal courts must apply state law as declared
by the highest state court in addition to state statutory law. There is
no federal “general” common law.
o Congress has no power to declare substantive rules of
common law applicable in a State and the Constitution does
not confer such a power upon the federal courts.
In disapproving Swift, the Court does not hold §34 of the Federal
Judiciary Act of 1789 unconstitutional. It merely declares that, by
applying the doctrine of that case, rights which are reserved by the
Constitution to the States have been invaded.
Swift is overruled because it was an unconstitutional assumption of
powers by the US Courts. Federal courts do not have the power to
create federal common law as this gives federal courts powers not
granted in the Constitution.
o Congress has no power to declare the substantive rules of
common law in state actions.
--Significance
The Swift decision is flawed because it promotes forum shopping.
Citizens of one state could move to another state to create diversity
and bring suit in federal court to take advantage of a more
favorable choice of law. Such a defect is substantial and provides no
benefit.
However, now there is a hazy line between the procedure and the
actually substance of a case. Examples: choice of law [p], statute of
limitations [p], enforcement of arbitration agreements [p], jury or
judge [p], method of service of process [s/p], enforcement of forum
selection clause [s/p], reduction of excessive damage award [s],
claim preclusion [p].
o Courts now have to grapple with the examples above to
decide how to judge the case in regards to the Erie problem
Notes & Problems
3. People try to defend Erie decision with the 5th and 10th Amendments
5th prevents discrimination results because there should be no
reason that results would change based on if someone was injured
by someone diverse.
10th
No Clause gives the federal courts or congress the power to create
state laws [especially to be applied in lawsuits]
4. Klaxon v. Stentor Elec. Mfg. Co. =
Note on Erie & the Persistence of Federal Common Law
Erie holds only that “general” federal common law may not displace
that of the states in areas in which the Constitution grants
lawmaking power to the states
The Constitution thus grants potential lawmaking power to the
federal courts in many areas because it grants lawmaking power to
the federal government, and the courts are part of that body
Federal statutes may also provide an opportunity for federal
common law to fill gaps in the statutory scheme
The result in Erie was also used to prevent parties from vertical
forum shopping – going from state court to federal court. However
by “curing” this problem, they have only shifted to parties
horizontal forum shopping
o Parties can now move from state federal court to another
state federal court in order to get certain laws applied to their
case that will give them more benefits.
B. The Limits of State Power in Federal Courts
Erie established that federal courts sitting in diversity action were
bound to replicate state practice in some circumstances
Although Erie did not say so, its setting suggested at the very least
federal courts sitting in diversity should observe state substantive
law, whether made by legislatures or by judges
The Supreme Court has attempted to address the different
questions and principles that have risen from Erie:
o Erie requires deference to state courts as lawmaking bodies;
o Federal courts are an independent judicial system
--Interpreting the Constitutional Command of Erie
Guaranty Trust Co. v. York – “Outcome Determinative Test”
--Facts: There was a breach of trust by Guarantee.
--Procedural Posture:
(P) brought action governed by NY substantive law in federal court
based on diversity of citizenship. (D) moved for summary judgment
on the grounds that the state statute of limitations had run.
o (P) argues that the court should apply equity, which means
the court would look at whether the case was brought in a
reasonable time instead of the rigid statute of limitations
o This is a procedural issue, and federal laws should be applied.
District court granted summary judgment stating that it was
prescribed by state statutes. CoA reversed holding that the statute
of limitations did not apply in this federal court case in the presence
of a federal tolling doctrine.
--Issue: Under what circumstances are federal courts bound by state law in a
diversity action under a procedural issue?
--Holding: Where it would “significantly affect the result” of litigation, a
federal court should use the state law.
--Reasoning:
Erie did not merely overrule Swift with regard to “substantive” state
law. It overruled the judicial process of federal courts disregarding
state law where it would lead to different results in the state vs.
federal court in a diversity action.
In these cases, the federal court is acting as just another state
court. Thus, it cannot afford recovery for a state-given right if the
state itself would not afford recovery.
The difference between “substance” and “procedure” is not the
dividing line for when to apply state law. Rather, the question is
whether the state law merely concerns “the manner and the means
by which a right to recover is enforced” or whether it would
“substantially affect the result.”
Here, the state bars the action. Thus, the federal court should bar
the action for the same reason.
--Significance = Outcome Determinative Test
There is a difference between the manner and means of a lawsuit
compared to the substantive issues of a lawsuit. If not following
state law would change the outcome of the case, then the state law
should be followed in the case.
Weakness This test can be used to argue any facet of a lawsuit,
so it really doesn’t help – think about the size of a piece of paper to
file a lawsuit & the statute of limitations.
o Basically, most courts ended up holding that state law would
apply to all cases where this question came up.
Notes & Problems
For each case coming up, follow these guidelines:
State the facts
When looking at the issue, decide if we are applying federal rule,
federal statute, or federal practice.
When looking at the result, see if there is difference in results if the
case would have been tried in a state court or a federal court.
What did the court hold?
What did the court reason and what test did it apply?
11/07/11 – pgs. 237-255 & Supp. Reading for Erie chapter!
Byrd v. Blue Ridge Rural Electric Cooperative
--Facts
Byrd (P) was injured in South Carolina while connecting power lines
in the course of his employment for a subcontractor of Blue Ridge
Rural Electric Cooperative, Inc.
(P) brought a diversity action against (D) for personal injuries. Under
South Carolina law, if (D) were (P)’s statutory employer, (P)’s award
would be limited to workmen’s compensation and he would not be
entitled to sue (D) for negligence.
(D) raised an affirmative defense based on South Carolina law that
it was (P)’s statutory employer and that (P) was therefore limited to
workmen’s compensation.
--Issue = Under the Erie doctrine, must state law be applied in
determinations of rights for trial regardless of conflict with US federal law
and the Constitution?
We are applying federal practice by federal policy to use juries.
State law says judge will decide, federal law says jury will decide.
--Holding = Reversed and remanded.
--Reasoning
There was a strong federal policy against allowing state rules to
disrupt the judge-jury relationship in the federal courts. The Erie
doctrine does not mandate that state law be applied in
determinations of procedure regardless of conflict with federal law
and the Constitution.
The Court held that South Carolina’s determination that immunity
was a question of law to be decided by a judge was merely a
determination of the form and mode of enforcing immunity. It did
not involve any essential relationship or determination of rights
created by state law. The court held that the Erie doctrine can still
reach form and mode determinations if there are no affirmative
countervailing considerations.
The right to a jury trial in federal court is a fundamental and
essential right provided for in the Seventh Amendment and that
may not be changed by any contrary state law or requirements
--Balance Test – balances state interests against federal interests
How bound up with the right is the state law? Is the state practice
bound up with the substantive rights and obligations of the party?
o If so, then state law applies. If not, go on to next question.
Is the difference outcome determinative?
o If yes, then go on to the next question.
How important is the federal interest? This must be compared to
state interest.
Notes and Problems
2. Deciding to use a jury instead of a judge in Byrd might change the
outcome of the case. The court states that the federal system is an
independent system for administering justice to litigants who properly invoke
its jurisdiction. The federal system is still called to use its own rules and laws
to govern its function in our judicial system.
II. De-Constitutionalizing Erie
Hanna v. Plumer
--Facts & Procedural History
Hanna was involved in an automobile accident in South Carolina
with Osgood. Hanna brought a diversity action in Massachusetts
federal district court against Plumer.
Plumer was served with process according to FRCP 4(d)(1) by
leaving copies of the summons with his wife at his residence.
o Under Massachusetts rules however, service upon an executor
must be handed personally to the executor within one year
Plumer moved for summary judgment on the grounds that the state
law rule regarding service should be used. He argued that the Erie
doctrine applies in this case because if Massachusetts rules applied,
the case would be dismissed because Plumer had not been served
properly within the state’s statute of limitations.
o On the other hand, if the federal rules applied, Hanna would
have an opportunity to have the case tried on the merits.
The trial court granted Plumer’s motion and Hanna appealed,
arguing that the rule established in Erie applies only to issues of
substantive law and not procedural rules.
The First Circuit affirmed and the US Supreme Court granted cert.
--Issue = Does the Erie doctrine apply to rules of procedure pertaining to
service of process? Does FRCP apply irrespective of whether state or federal
substantive law applies?
We are applying federal rule.
--Holding = Reversed. Service of process under the FRCP was the standard,
which the district court should have measured the adequacy of service.
--Reasoning
The question in this case only goes to procedural requirements. A
dismissal for improper service under these facts would not alter the
substantive right of Hanna to serve Plumer personally and re-file or
affect the substantive law of negligence in the case.
Article III and the Necessary and Proper Clause provides that the
Congress has a right to provide rules for the Federal Court (FRCP
4(d)(1). To hold that an FRCP must cease to function whenever it
alters the mode of enforcing state-created rights would be to
disembowel either the Constitution’s grant of power over federal
procedure or Congress’ attempt to exercise that power in the
Enabling Act.
The Erie rule has never been invoked to void a Federal Rule. If there
is no federal rule, Erie commands the enforcement of state law. The
federal rule is valid and controls the case.
Both the Enabling Act and Erie state that federal courts are to apply
state “substantive” law and federal “procedural” law.
--Concurrence by Harlan
The test for deciding whether the Erie doctrine applies to a rule of
procedure should be a determination of whether the choice of rule
would substantially affect those primary decisions respecting
human conduct which our constitutional system leaves to state
regulation.
o If so, Erie and the Constitution require that the state rule
prevail, even in the face of a conflicting federal rule.
Erie wanted to ensure that there were not two conflicting systems of
law and the creation of substantive state law by federal courts
should be avoided if that creation extends beyond constitutional
limits.
--Significance = The majority opinion illustrates that the federal interest in
creating a uniform code of procedure for the federal court system is
secondary to the state’s procedural laws.
In the event there is a direct conflict, the federal law must prevail so
long as it complies with the Rules Enabling Act and the U.S.
Constitution.
--FRCP or federal statute Test
Threshold: is rule sufficiently broad to control the issue before the
court? If yes, then ask:
o Is rule consistent wit the Rules enabling act; is it rationally
capable of classification as procedural?
o Is rule or statute constitutional? (Art. III gave Congress power
to make rules governing practice and procedure in federal
courts)
o If yes to both, federal rule controls.
If no federal rule but there is a federal practice…
o Would adhering to federal practice encourage forum
shopping?
o Would adhering to federal practice result in inequitable
administration of justice?
--Rule Enabling Act – gives the US supreme court the power to create rules of
practice and procedure.
Hypo 1: Plaintiff from NY suing defendant from Cali – diversity action. State
law requires that the complaint pleading be set forth in specific factual
detail. Federal rule only requires a short and plain statement known as
notice pleading.
We are applying test for federal rule.
Threshold: Yes because the rule is basically telling you what is
required in the pleading.
#1 – yes it is rationally capable. #2 – yes it is constitutional because
our Constitution gave Congress the power to make FRCP.
Hypo 2: Plaintiff from Rhode Island suing Defendant from Massachusetts.
Diversity filed in federal court in Massachusetts. This is a medical
malpractice action against defendant hospital on the grounds that plaintiff
got STD due to defendant hospital’s negligence. State law requires all
medical malpractice suits to go through non-binding arbitration [most states
have these types of procedures before you can actually litigate the case].
Under state law, the plaintiff will have to give up a bond to ensure that the
defendant can pay for his case if he wins. There is no federal rule that
applies to these types of cases.
We are applying federal practice or policy test because there is
absence of federal rule that governs the procedure for filing this
type of case.
Because the plaintiff must give up the bond, then it seems like it will
be bound up with substantive rights and obligations of the parties –
yes to #1 because it deals with the defendant’s remedy.
However, if the court found that it was not bound up, then we will
go through the next 2 questions:
o #1 yes it would be outcome determinative because then the
case would be dismissed if you decided to use the state law
over the federal law.
o #2 the federal interest would be that more people would have
a greater chance to bring their action in federal court since
there is no arbitration procedure.
The second part of Hanna test
o #1 yes adhering to the federal practice would encourage
forum shopping because the burden on the plaintiff is a lot
less because they only need to file the suit.
o #2 yes adhering to the federal practice would result in
inequitable administration of justice because the hospital
would have to defend itself against possible frivolous claims
made by diverse citizens. Hospitals may then decide to stop
treating diverse citizens because of this practice.
Hospital keeps protection if state law is applied,
whereas lose protection if federal law is applied.
The case would be dismissed because ______?
o Example of case just like this hypo: 643 F.2d 880
Notes and Problems
2. Byrd and Hanna held that the federal court need not behave as a state
court would if it were hearing the case. Both presented multi-tiered tests for
determining whether federal or state practice should prevail.
Hanna – narrowly construed, tells a federal court what to do when a
Rule or federal statute dictates the federal practice.
Byrd – deals with a federal practice not dictated by a specific federal
statute or Rule.
3. If the statute is constitutional and tells a federal court to do something,
the court must follow the dictates of that statute. In the case of FRCP, the
analysis requires two tests:
Does the Rule promulgated under the authority of the Rules
Enabling Act fit its description: “rules of practice and procedure”?
Is the procedure specified in the Rule constitutional?
*If the Rule passes both of the above tests, the it must be applied,
even if it differs from the state practice in a significant way. If the
Rule fails either test, then the state rule applies.
4. There are different tests from Byrd and Hanna to determine what to do if
the federal practice in question is not required by any rule or statute.
Byrd: is the state practice “bound up with the definition of the rights
and obligations of the parties”? If so, state law governs; even if it
isn’t part of the substantive rights and obligations, would its
application determine the outcome of the cases? If so, are there
affirmative countervailing considerations of federal judicial
administration present?
Hanna: would following the federal practice lead to forum-shopping
or inequitable administration of the laws? The state should prevail
o The problem with this approach is that for federal diversity
jurisdiction to have any usefulness, it should sometimes lead
to different results, and if lawyers can predict that, their
obligation to their clients requires them to shop for the most
advantageous forum.
III. Determining the Scope of Federal Law: Avoiding & Accommodating Erie
So long as the statute is constitutional and one knows what the
statute requires, the choice of law problem is solved.
Burlington North R. v. Woods
Stewart Org. v. Ricoh
Gasperini v. Center for Humanities
Semtek Intl. Inc. v. Lockheed Martin Corp.
--Facts & Procedural History
(P) filed suit in Cali state court against (D) alleging inducement of
breach of contract and various business torts. (D) removed the case
to Federal District Court in Cali via diversity jurisdiction and
successfully moved to dismiss (P)’s claim as barred by Cali’s 2-year
statute of limitations.
(P) then re-filed suit against (D) in Maryland state court. MD state
court dismissed the suit (kind of like double jeopardy, where you
can’t litigate something that has already been decided.)
(D) again had the case removed to Federal district court for
diversity, and asked the court to apply claim-preclusion to the Cali
Federal District Court’s adjudication on the merits [like res judicata]
& dismiss the suit
--Issue = Is the claim-preclusive effect of a Federal judgment dismissing a
diversity action on statute of limitation grounds determined by the law of the
state in which the Federal court sits?
--Holding = Reversed and remanded.
--Reasoning: Which test applies?
Test for FRCP or federal statute applies? Yes to all three questions
because FRCP 41(b) is very broad and all FRCP within REA are
constitutional. But the court does not follow this
Court states that FRCP was not sufficiently broad to control the
issue before the court federal law would then be telling state
courts that it couldn’t extend its own rules in its courts, which
infringes on state’s own powers as sovereignty
So the court moves to federal practice test: 1) a statute of
limitations deals with how long the possibility of remedy will last so
its pretty bound up SO the state law applies.
The Cali decision and statute of limitations only means that this suit
cannot be filed in Cali again or under Cali law. The case can go on to
MD, but the court does not look to see if MD state law applies or not
only says the case can be tried in MD court.
--Significance
If you get a pattern like this where an FRCP or federal statute is
against a state statute, then you should go through BOTH tests!!
After finishing the first test, “if the court decided that the FRCP was
not broad enough, then the court would have to look at the federal
practice test” then apply the second test and decide.
o It would encourage forum shopping because if you file your
suit late, then you can go somewhere else.
o It would result in inequitable administration of justice.
Notes and Problems
1. This case had a question of how a state court, in a subsequent case,
should understand a federal judgment in a diversity action. Specifically,
whether the state court should give the federal diversity judgment a broader
scope than it would have given a state judgment, had the diversity case
remained in state court. NO
2. Federal courts have regularly said that involuntary dismissals under FRCP
41(b) bar not only the claim pleaded but all claims arising from the
transaction or occurrence behind the pleaded claim.
Note: Interpreting State Law – an Entailment of Erie
Erie requires federal courts sitting in a diversity action to use state
law under various circumstances. That holding requires the federal
court to declare state law.
On appeal from the district court’s judgment, a federal court of
appeals must do its best to decide what the state appellate courts
would do when faced with the same appeal
o This is called an “Erie Guess” because they have to guess
what the state’s supreme court would do
o Federal CoA required to review de novo district court’s
determination of state law.
Certification – the federal court asks the state supreme court for an
answer to a question about state law. There are several defects to
this system.
o The state must have a certification procedure, and many do
not have one. But even when the procedure exists, the results
are not satisfactory
o Sometimes state courts do not accept the invitation to answer
the question about state law. Other times they answer, but in
terms that leave the federal courts as perplexed as they ere
before they asked.
o Part of the problem flows from the circumstance that the
certification process does not simply pass the whole case to
the state supreme court. It is almost impossible for a state
supreme court to answer a question about state law because
the legal dispute often lies in the facts of the case [which the
state supreme court will not know when it gives its answer]
When thinking of Erie, state laws, state statutes, state constitution,
and highest court’s case law will apply.
FRCP Supplement – pgs. 427-428
--Shady Grove Orthopedic Assoc. v. Allstate Ins. Co. – the court split severely
on this case [not precedent]
Four justices thought this was a straightforward clash between
federal procedural rule and state procedural rule. Since the rule in
question did not violate the Rules Enabling Act, it controlled [even
though this lead to some forum shopping]
o Test for FRCP/federal statute:
This directly and expressly applies to class actions so
YES. Moving on, YES it is procedural and YES it is
constitutional
There was a fifth justice who joined in the above opinion, but he
insisted on court’s greater deference to state interests than what
this opinion did
Four justices dissented saying that the majority was departing from
the sensitivity previously shown to state interests by prior decisions
o Dissent agreed with the end but not the reasoning
o There should be a compromise but this dissent does not
disagree with any of the tests we use.
11/19/12 10:22 AM
11/9/11 – pgs. 257-291
The Process of Litigation
A. Approaching Civil Procedure
B. Choosing Procedure
C. A Roadmap for Exploring Choices
Chapter 5. Incentives to Litigate
-- Reality of Types of Cases, Value of Cases, and Disposition of Cases
Most cases will not be tried in actual court because it is much
cheaper and easier to find a resolution and settle the case.
--Remedies – this will be important to the lawyer because you won’t want to
waste your time if its not worth a lot or the case sucks
Specific Remedies
o Specific Performance
Obligation to mitigate
o Injunction
Substitutionary
o Compensatory Damages: What is the quantum of a lawsuit?
How much the lawsuit is worth. Look at the facts of the case
and let me know what its worth.
This matters greatly to the plaintiff and the defendant.
How much you want as a settlement and how much you
are willing to offer for a settlement
You will look at similar cases to find a ball park figure
o Punitive Damages: an attorney will most likely want to take
this type of case because it deals with damages to keep
someone from doing the same thing again
Most times, there must be a statute that allows punitive
damages or gives directions for it
o Statutory Remedy – statutes can either mandate an amount,
give a maximum the person can recover, etc.
These will help you decide if the suit is valuable and if
you even want to take the case
You will also want to look to see if you can get
attorney’s fees, pre-trial judgment, etc.
Declaratory – the party is trying to get the court to declare that he
is actually abiding the law in the lawsuit against him which would
destroy the cause of action for the lawsuit.
o The requirements are that there must be real parties, real
activities in controversy, and not just a worry to get an
advisory judgment.
o Example: case originally starts as Doug v. Bob, and when Bob
files for declaratory relief, the suit changes to Bob v. Doug
--Financing Litigation
State Farm Mutual Automobile Ins. Co. v. Campbell
--The review punitive damage award, consider:
Degree of reprehensibility of (D)’s conduct
o Harm caused was physical or economic
o Whether tortious conduct evinced an indifference to or
reckless disregard of the health and safety of others
o Whether target of conduct was financially vulnerable
o Whether conduct involved repeated actions or was an isolated
incident
o Whether harm was result of intentional malice, trickery, or
deceit OR mere accident
Disparity between the actual or potential harm (P) suffered and the
punitive damage award
o No concrete or bright line rule, but usually there should a
single digit ratio 1-1, 1-9
o A larger compensatory award may justify a smaller punitive
damage award
o Wealth of (D) may be considered, but it is not a justification
for an otherwise unconstitutional award.
Difference between the punitive damage award and the civil
penalties authorized or imposed in comparable cases
o Consider closest civil penalties statute
The court performed the test and held:
o 1) the injury was not solely economic;
o 2) the insurance company evinced a reckless disregard for
plaintiffs' peace of mind;
o 3) plaintiffs were financially vulnerable;
o 4) the insurance company's defiance increased the likelihood
of reoffending; and
o 5) the substantial emotional damages were no mere accident
--Significance = compensatory damages are intended to redress the
concrete loss that the plaintiff has suffered by reason of the defendant’s
wrongful conduct; punitive damages are aimed at deterrence and retribution
11/14/11
Hypo: your client lives Uptown and his next-door neighbor leaves his trash
strewn all over the yard. There are now rats and flies, it smells, and its very
unattractive. Client has trued to talk to his neighbor, but the neighbor
doesn’t care. He decides that his only remedy is a lawsuit.
What remedies could he ask for? You must find out what your client
is looking for & then present his options to him.
o Specific remedy = injunction from leaving the trash out on the
lawn and clean it up.
o Sub Remedy = Compensatory damages because of the pests
coming onto your lawn and if his grass is dying. BUT this will
not necessarily help the problem
No punitive damages because if there is no statute that
allows punitive damages, then you can’t as for (and if
you do, you’ll violate Rule 11)
The client has the right to decide which things to sue for and he
might not want to sue for all the things that he can.
You will want to adjust what your claims are based on whether you
have a judge or a jury trial.
Sigma Chemical v. Harris
--Reasoning – This case gives a test for what someone has to prove for
injunctive relief as a remedy:
Balance the interest of the parties – what is the hardship on the
plaintiff if the injunctive relief is denied? What is the hardship on the
defendant if the injunction is granted?
o Balance – he might not be able to get a job, but defendant
knew he was signing the contract and what it meant; plaintiff
would lose their secrets which would create loss in the
business.
--Things to think about:
Why would we say just asking for money damages for breach of
contract not enough? Yes we want the money, but we also want to
stop him from using the information and telling other their secrets.
The court later amends its order and states that he can work for the
new company but not in his previous position & the new company
cannot use the secrets they got from (D) for a reasonable time [a
time they could have found out the information on their own
research] – this is definitely a loss for (P).
Notes and Problems, pg. 290
1. Breach for top-notch building materials Arthur seeks a declaratory
judgment, and even though Barbara hasn’t sued yet, there are real parties
and a real dispute. Arthur is filing a declaratory judgment so that way if he is
wrong for some reason, he can mitigate the damages now instead of waiting
till a lawsuit is filed against him which would be way worse.
Reminds us of LL Bean case
2. Patent Issue Sam can value her declaratory judgment and the damages
she claims by showing the value of money she may actually lose if Joe
continues with his design OR the value of Joe’s sale for his design OR a
combination of both the loss and sales.
Could Sam also put an injunctive relief against Joe? She sure could
because this is the ultimate remedy she wants, to make him stop
making his design.
This could also be subject matter jurisdiction because patent law
falls under federal question.
3. Libel suit There’s an issue because there are no parties here saying that
what is about to be printed is libel. What if newspaper decides to sue the
mayor’s office? They can’t because there is no controversy between the
newspaper or mayor’s office – this is only the newspaper walking on the
edge thinking they might get in trouble. No cause of action.
However, there is also no subject matter jurisdiction because the
libel only comes up as a defense to the suit, which violates the
“well-leaded complaint” rule – libel is a state law tort action & the
fact that the defense would bring a federal amendment as their
defense does not meet the standard for well-pleaded complaint.
However, if the mayor got wind of the article, then the mayor’s
office could bring declaratory relief action for injunctive relief to
keep the newspaper from actually publishing the article.
--Financing litigation [don’t need to know this for exam]
Contingent fee [if you win, you get paid; if you lose, nothing]
Hourly rate [varies based on type of law your practice, what firm
you work for, where you live geographically, etc.]
Flat rate for particular service [for every normal divorce, you would
charge a flat rate]
Retainer
Fee-shifting statute or contract
Legal aid or pro bono – low cost or no cost
11/19/12 10:22 AM
11/13/11 – pgs. 333-400
CHAPTER 6 – Pleadings
A. The Story of Pleading
Pleadings tell the contestants’ initial stories. This elemental story-
telling aspect of pleadings persists, and a good lawyer never forgets
that behind conventions lie stories.
The complaint is the plaintiff’s first chance to tell that story, and
within convention, a good story is better than a dull one
One of the most fundamental and difficult problems confronting a
pleading system flows from the circumstance that pleadings have
two audiences the court and the defendant(s).
o Most defendants will be more interested in the facts
underlying the case, so they can know what story they will
have to meet in court.
o This flips when it comes to the answer – plaintiffs want to
know the precise details of why the defendant is denying
liability
o **Both will tend to give sketchier recitations of the facts
because they will want more time to make their case stronger
against the other party
--What are pleadings:
Pleadings allowed are under FRCP Rule 7(a) and they are:
o A complaint,
o An answer to a complaint,
o An answer to a counterclaim designated as a counterclaim,
o An answer to a cross-claim,
o A third-party complaint,
o An answer to a third-party complaint, and
o A reply to an answer IF the court orders one
A pleading is basically anything where someone files an allegation
against a party and demands a remedy a pleading is also any
answer to an allegation.
There are forms for the type of pleading you want to file in FRCP.
o These forms really only give you some fill-in-the-blanks, but
you still need to know the substance of your claim and what
exactly you need to put in the complaint to get your case in!
o One big issue plaintiffs can run into is that they need more
information to fill in their pleading to get it past a court, but
the defendant has the information they need.
--Pleadings are guided by FRCP Rule 8(a) called “notice pleading” and
this applies very generally
A pleading that states a claim for relief must contain:
o (1) a short and plain statement of the grounds for the
court’s jurisdiction, unless the court already has jurisdiction
and the claim needs no new jurisdictional support;
o (2) a short and plain statement of the claim showing that
the pleader is entitled to relief; and
o (3) a demand for the relief sought, which may include
relief in the alternative or different types of relief
Goes back to Chapter 4! Also look at pg. 342 at
underlined portion in prayer for relief. Magic language*
Rule 8(b)(3) states what a defendant must do when it comes to
denying a pleading:
o A party that intends in good faith to deny all the allegations of
a pleading — including the jurisdictional grounds — may do so
by a general denial.
o A party that does not intend to deny all the allegations must
either specifically deny designated allegations or generally
deny all except those specifically admitted
Rule 8(b)(4) deals with denying part of an allegation.
o A party that intends in good faith to deny only part of an
allegation must admit the part that is true and deny the rest
--How to challenge the complaint – Rule 12(b)
Defendants want the case to go away as quickly and as cheaply as
possible, so they will often help courts sort through cases based on
pleadings and challenge them
CML has 6 types of challenges, which are also called “pleas”
CML Dilatory
Plea or
Peremptory
Plea
Rough
Translation
Example Effect Modern
Pleadings
Analogue
Jurisdiction “not here” Defendant
asserts that
this case
does not
belong in
federal court
Court
dismisses
case, which
can be
refilled in
proper court
Challenge to
personal or
subject
matter
jurisdiction
Rule 1(b)(1)
(2)
Suspension “not now” Case should
not proceed
because
defendant is
on active
duty in
armed
services and
unable to
defend self
until
discharged
Court stays
case until
defendant is
discharged
from service
Typically
handled as a
defense or by
more
comprehensi
ve statutory
scheme
Abatement “not until this
is fixed”
Defendant
asserts case
is brought in
the wrong
venue
Court
transfers or
dismisses
case
Rule 12(b)(3)
motion
Demurrer “so what?” Defendant
asserts that
allegations
of
complaint
do not state
a claim
Court
dismisses
the case
Rule 12(b)
(6) or
demurrer
Traverse “didn’t
happen” or
“I didn’t do
it”
Defendant
asserts that
allegations
of
complaint
are false
Court
grants
judgment
on merits
for
defendant
General or
Specific
Denial
contained
in the
answer
Rule 8(b)
Confession
and
avoidance
“yes but….” Defendant
asserts
statute of
limitations
has run on
claim.
Court
grants
judgment
on merits
for
defendant
Affirmative
defense
contained
in answer –
release,
statute of
limitations,
accord and
satisfaction
, res
judicata
Rule 8(c)
--The 6 pleas can be separated into two groups:
The first group do not approach the merits of the case. They take no
position on either the facts or the law forming the basis for
plaintiff’s grievance.
o The Dilatory pleas are in Rule 12(b) – these delay the court
proceedings
o Personal jurisdiction/ subject matter jurisdiction/ failure to
state a claim judge decides these
The second group forced the pleader to take a position about the
factual allegations of the complaint.
o The Peremptory pleas are in Rule 12(b)(6), 8(b) and 8(c)
o Traverse/ affirmative defenses jury decides these
Haddle v. Garrison – trial court & CoA’s holding [original complaint]
--Facts
(P) while employed with Healthmaster was called upon as a witness
against (D) in a Federal action for fraud. When the remaining
partners learned of his impending testimony before a criminal
proceeding they terminated him. (P) concedes he was an at-will
employee.
--Procedural History
(P) filed under 42 USC §1985 Civil Rights Act and other state claims,
stating that he received harm from his termination which came
about because of conspiracy to keep him from testifying in the
federal and criminal trial against his former employers.
(D)s filed motions for dismissal for failure to state a claim [Rule
12(b)(6)], which District court granted. CoA affirmed this.
--Holding & Reasoning = dismisses (P)’s claim without prejudice
Because he was an at will employee, he has no claim for wrongful
termination because the company did not owe him any duty to keep
him around.
When it comes to a motion under Rule 12(b)(6), a defendant is
basically saying even if everything the plaintiff alleges is true, the
law afford him no relief.
A court should not dismiss plaintiff’s complaint for failure to state a
claim unless it is very clear that the plaintiff can prove “no set of
facts in support of his claim which would entitle him relief”
Notes and Problems
5. It is almost a universal principle that before granting a motion to dismiss
for failure to state a claim, a court will give the plaintiff a chance to “amend”
the complaint to cure the deficiency the defendant and court have identified.
Rule 11(b) states that “the factual contentions have evidentiary
support or, if specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further investigation or
discovery” basically a plaintiff should not put something in his
complaint unless he has some type of evidence for the statements
he makes.
Haddle v. Garrison [facts are the same from above]
--Holding & Reasoning = reversed for trial.
RULE: One who maliciously and without justifiable cause induces an
employer to discharge an employee, by means of false statements,
threats or putting in fear, is liable in a tort action to the employee. It
makes no difference whether the employment was for a fixed term
not yet expired or is terminable at the will of the employer.
o A court should not dismiss a complaint for failure to state a
claim unless it is clear that (P) can prove “no set of facts in
support of his claim which would entitle him to relief.”
To make out a cause of action, (P) must have suffered an actual
injury. Just because (P) was an at will employee does not mean he
has no constitutionally protected interest in continued employment.
The wrong at which §1985(2) is directed is not deprivation of
property, but intimidation or retaliation against witnesses in federal
court proceedings. The sort of harm alleged by (P) here -third party
interference with at will employment relationships – states a claim
for relief under §1985(2).
--Now what? Plaintiff’s case gets to move forward, but it doesn’t mean that
his claim has merit and he will win – just that his claim can move forward.
(D)s eventually had to pay the plaintiff $65,000 for damages; there
was also a fee shift statute attached where defendants had to pay
for plaintiff’s case.
Note on Consistency in Pleading
Rule 8(d)(2)-(3) states that a party may “set out two or more
statements of a claim or defense alternately or hypothetically…
and a party may state as many separate claims or defense as it has,
regardless of consistency.”
o This basically means if defendant has allegedly violated a
contract with the plaintiff, defendant basically says “I never
made a contract with the plaintiff… and if I did, I didn’t breach
the contract.”
The reasons for this Rule are three-fold:
o First pleadings come very early in the case, often before
parties know all that they will by the time the case comes to
trial. Thus the lawyer will set out different, sometimes
opposing claims to set forth what seem to him to be the
possible versions of law and the facts that appear plausible at
the time the pleading is filed.
o Second, allegations in pleadings are tempered by burdens of
proof. Even though a lawyer may completely believe he
client’s version of the facts, as a safety net, the lawyer will
allege a different set in case she decides she cannot convince
a jury that her client’s version is the right version.
o Third, even though the pleadings may seem very inconsistent
and contradictory, the lawyer will eventually settle on a set of
facts after discovery takes place. Our pleading system asks
lawyers to form pleadings this way.
--Rule 10
(a) = Every pleading must have a caption with the court's name, a
title, a file number, and what type of pleading it is
(b) = a party must state its claims or defenses in numbered
paragraphs. This rule makes it easier to keep track of things
o The defendant can then admit to the numbered paragraphs
and deny other numbers.
--Requiring and Forbidding Specificity in Pleading
Courts have often wrestled with the question of how much
specificity, just how much detail to require in pleadings. These
details can help distinguish between strong and weak cases, but the
more details will normally get a case dismissed before discovery.
FRCP’s “short and plain statement” is meant to void the issues
brought by older forms of pleading, but it has its own issues in our
court system because courts do not necessarily agree what “short
and plain statement” means.
--What is a short and plain statement?
As long as you follow with the Forms supplied in FRCP, then your
claim should be allowed to move forward.
A complaint should not be dismissed for failure to state a claim
unless it appears beyond a doubt that the plaintiff can prove no set
of facts in support of his claim which would entitle him to relief.
o From Conley v. Gibson. This was widely used for about 50
years after the case was decided when looked at pleadings
FRCP does not require a claimant to set out in detail the facts upon
which he bases his claim – the Rules only require a “short and plain
statement” that will give the defendant fair notice of what the
plaintiff’s claim is and the grounds upon which it rests.
o Rule 8(e) states that no technical forms of pleading or
motions are required.
o The simple guide of Rule 8(f) is that the pleading must be
construed so as to do substantial justice
If a pleading fails to specify the allegations in a manner that
provides sufficient notice, a defendant can move for a more definite
statement under Rule 12(e) before responding.
o Claims lacking any real merit may also be dealt with Rule 56’s
summary judgment.
However, what if the plaintiff runs into an issue where he is not sure
exactly what the facts are OR if the defendant actually did
something wrong? Parallel behavior v. conspiracy
o Look at the case below!
Bell Atlantic Corp. v. Twombly – don’t have enough info!
--Facts
(P) brought a class-action lawsuit alleging that (D) and a number of
other large telephone companies had engaged in anti-competitive
behavior in violation of § 1 of the Sherman Act.
Specifically, (P) alleged that these large telephone companies had
acted in order to disadvantage smaller telephone companies and
charge consumers more.
--Procedural History = District Court dismissed the complaint because it
wasn’t specific enough, but CoA reversed citing Conley for the “short and
plain statement”
--Holding = reversed and reinstates dismissal of the case.
--Reasoning
Dismissed (P)’s complaint for failure to state a claim under Rule
12(b)(6). (P)'s complaint didn’t provide enough facts for the court to
find it plausible that the companies had engaged in a conspiracy.
Instead, (P)’s complaint provided factual bases for parallel conduct
and merely stated that an agreement had taken place, with no
details to support that allegation need more specifics!!
o Parallel conduct – actions by competing companies that might
be seen as implying some agreement to work together
While parallel conduct is "admissible circumstantial evidence" of an
agreement to engage in anti-competitive behavior, parallel conduct
alone is insufficient to prove a Sherman Act claim.
--Dissent
The majority was concerned with the risk that jurors may
mistakenly conclude that evidence of parallel conduct proves that
the parties acted pursuant to an agreement, when they merely
made similar independent decisions.
This merits careful case management but does not justify the
dismissal of an adequately pleaded complaint without even
requiring the defendants to file answers denying a charge that they
in fact engaged in collective decision making.
More importantly, they do not justify an interpretation of Rule 12(b)
(6) that seems to be driven by the majority’s appraisal of the
plausibility of the ultimate factual allegation rather than its legal
sufficiency.
--Significance = The Court's opinion changed the existing interpretation of
the notice pleading requirements of Rule 8 creating a new, stricter standard
of a pleading's required specificity.
The court adopted a more strict, "plausibility" standard,
requiring in this case "enough facts to raise a reasonable
expectation that discovery will reveal evidence of illegal
agreement"
Plaintiffs must look at the substantive law to know what to put in
their complaint. At Rule 8, the courts take what the plaintiff’s
complaint says as true, and the court is looking to see if the plaintiff
could win based on his complaint.
o Here he could not win because there was no specific evidence
of a conspiracy, only had evidence of parallel conduct. He
needed dates of meetings or all defendants changing prices at
the same time, etc.
o There must be factual basis for what plaintiff alleges. Plaintiffs
cannot just throw around allegations in hopes that they can
get to discovery to maybe find something a defendant did.
Notes and Problems
1. Pleading issues fall into two groups mainly:
1) The underlying dispute is about the substantive law – what facts
justify relief for this kind of claim? – Haddle does here!
2) There is no dispute about the content of the substantive law, but
there is a disagreement about whether the facts pleaded justify
relief under that law. – Twombly goes here!
2. Think about “sloppy lawyer” and “hard law” cases. “Sloppy lawyer” means
the pleading is lacking one of the main elements of the claim, like forgetting
to plead causation; “Hard law” cases are cases where the lawyer has
pleaded whatever facts are known to her in support of the claim/ defense,
but she is not sure if it is enough.
Haddle is falls under the “hard law” case category. Twombly falls
under “sloppy law” case category.
3.
4.
5.
FRCP Supplement – pgs. __
Ashcroft v. Iqbal
--Facts
(P) alleges he was unconstitutionally arrested and imprisoned
• Question is about whether there was failure to state a claim – did
he plead factual matter that, if true, proves his constitutional rights
were violated?
--Procedural History
(P) files lawsuit alleging unconstitutional arrest and imprisonment.
(D)s move to dismiss on 12(b)(6) and district court denies. CoA
affirms denial. Now ruling is challenged in Supreme Court.
--Holding = claim is dismissed.
--Reasoning
Complaint does not require a bunch of detailed factual allegations,
but does require more than an unadorned “the-defendant-
unlawfully-harmed-me” accusation.
Complaint must contain sufficient facts to state a claim that is
plausible. Court asks for more than a possibility that the defendant
is liable based on threadbare conclusions and rules that plaintiff
must have stated more than legal conclusions in the complaint.
In this case, (P) needed to show that the government acted with a
discriminatory purpose – it is because race rather than in spite of it
--Dissent = agrees with the procedure used by the court, but not the result.
--Significance = how does the court go through the complaint?
Plaintiff must plead elements to state a claim under a theory.
However, just stating the elements as a legal conclusion is not
sufficient. The court does not have to accept the plaintiff’s legal
conclusions are true.
To survive a motion to dismiss, a complaint must contain sufficient
factual matter to state a claim to relief that is plausible on its face.
o A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.
o Example: affidavits of people who witnessed a meeting, tapes
of something, official government documents, etc.
o You need something on which you can base your allegations
that will prove that this is more than a coincidence of the time
“Plausibility is not a probability requirement, but it is more than a
mere possibility”
--What do we take away from Twombly and Iqbal?
You will have to identify the elements you need to = these are legal
conclusions.
You have to include sufficient factual materials so that your claim is
plausible on its face – more than a possibility, but not necessarily a
probability
--Special Cases and Special Pleading Rules
FRCP Rule 9(b) fraud or mistake. In alleging fraud or mistake, a
party must state with particularity the circumstances constituting
fraud or mistake [specific]
o There are also some statutes that require plaintiffs to plead
with particularity
Stradford v. Zurich Insurance Co.
--Facts
(P) had previously notified (D) that on January 17, he returned to his
office and found water dripping from frozen pipes which caused
extensive water damage to his personal property and the interior of
his office. He submitted a revised claim under the Policy totaling
$1,385,456.70, consisting of $168,000.00 for property damage, and
a business interruption claim of $1,209,456.70.
Following an investigation of (P)’s claim, (D) disclaimed coverage for
(P)’s damages and demanded return of what it had already paid.
--Procedural History
(P) commenced this suit seeking the additional money from his
policy [FRCP Rule 8(a)]. (D) counterclaimed asserting that (P) had
made fraudulent claims [FRCP Rule 9(b)], and (P) was entitled to the
return of $151,154.74, punitive damages, and investigation
expenses.
(P) moved to dismiss the fraud counterclaims for failure to state
claims with sufficient particularity under FRCP Rule 9(b). (D)s
submitted a motion for leave to amend their counterclaim.
--Holding = (D)’s motion for leave to amend is granted. Once (D)s amend,
court grants their motion for summary judgment.
--Reasoning
(D)’s counterclaims do not satisfy the first sentence of Rule 9(b),
requiring that the “time, place, and nature of the alleged
misrepresentations” be disclosed to the party accused of fraud.
(D)’s counterclaim sufficiently asserts the general facts that allow
the inference that (P) had defrauded it, but (D) did not set forth with
particularity the allegations of the fraud.
o They need to include the more!
--Significance = Claims of fraud or mistake must be asserted with
particularity to provide the party against whom such claims are made fair
notice of the claim and the grounds on which it is based
Notes and Problems
3. Courts have dismissed fraud claims pursuant to Rule 9(b) even where the
pleader alleged specific communications because the claims lacked
particularized facts to support the inference that a party acted with
fraudulent intent.
4. In the average fraud cases, the fraud plaintiff’s lawyer wants to get to
discovery to uncover information proving that defendant was
misrepresenting the facts. But discovery will be unavailable if the complaint
is dismissed for failure to plead with sufficient specificity to comply with
FRCP Rule 9(b).
--Allocating the Elements of a Claim
In a system driven by party initiative, one must also ask which party
has the responsibility for which of those issues. In technical terms,
which “elements of a claim” must be part of the complaint by the
plaintiff, and which are “defenses” which the defendant must plead
in his answer?
As a general rule, whichever party has the “burden” of pleading an
issue must also produce evidence to demonstrate the allegation or
he will lose the case.
For the great majority of common claims, either a millennium of
common law cases or the applicable statute provide answers.
--Allocating the Elements [example]
A person who is injured by the negligence of another has a cause of
action against the person whose negligence caused the injuries
o Only the 4 basic elements are needed
A person who is not himself negligent, but who is injured by
another, has a cause of action against the person whose negligence
caused the injuries
o The plaintiff here would have to prove the 4 basic elements
but ALSO that he himself was NOT negligent
**The ways you know who has the burden of proof for pleadings can be
resolved by looking at statutes and cases.
If someone has the burden at trial to prove a certain thing, then he
most likely will have the burden to show it in his pleading
beforehand.
If you get to trial and a juror can’t tell based on the proof given,
then he will normally go along with whoever didn’t have the burden
of proof.
Jones v. Block – shows how the court deals with a new cause of action and
how the new cause of action should be dealt with
--Issue = what should a court do when an element set out in a statute is not
specified whether the burden of proof falls on Plaintiff or Defendant?
--Holding = defendant now ahs the burden of proof.
--Reasoning
Most courts view failure to exhaust as an affirmative defense
because Rule 8(a) only requires simply a short and plain statement
of the claim.
o The PLRA is not itself a source of the prisoner’s claim.
The PLRA dealt extensively with the subject of exhaustion, but is
silent on the issue whether exhaustion must be pleaded by the
plaintiff or is an affirmative defense.
**When a statute is silent on whether exhaustion is a burden on the
plaintiff or defendant, the usual practice should be followed. The
usual practice under the FRCP is to regard exhaustion as an
affirmative defense.
**Courts should generally not depart from the usual practice under
the FRCP on the basis of perceived policy concerns.A requirement of
greater specificity for particular claims must be obtained by
amending the FRCP.
o Specific pleading requirements are mandated by the FRCP
and not as a general rule through case by case
determinations of the federal courts.
--Court looked at the statute and made their determination.
Notes and Problems
1.
2. Why does it matter? Whoever has the burden of pleading an element of
the claim will also have the burden of producing evidence to demonstrate
that allegation.
If there is a lack of physical evidence of documents or paperwork,
then cases can follow testimony. If the trier of fact is unsure who’s
telling the truth, the outcome may turn on who has the burden of
persuasion, which usually follows the burden of pleading.
3. How does a court decide whether the burden of proving an element falls
under plaintiff’s complaint or an affirmative defense of defendant? There are
4 steps the courts use:
The court will first look at the words of the statute.
The court will also look at the Rule 8(c), which lists common
affirmative defenses. The list in Rule 8(c) is non-exhaustive. The
court will then ask if the statute in question provides that the
element could be considered an affirmative defense under Rule 8(c)
To answer the question above, the court can look at the legislative
history of the statute & take into account the normal practice of
courts in this situation – if exhaustion isn’t mentioned as an element
of plaintiff’s complaint, it will be an affirmative defense.
The court will also take into account a catalogue of cases dealing
with the same or similar issue.
4.
B. Ethical Limitations in Pleading & in Litigation in general
--FRCP Rule 11 guides the responsibilities of a lawyer to his client and the
legal system – it is basically the Honor Code for lawyers
Rule 11(b) states: By presenting to the court a pleading, written
motion, or other paper — whether by signing, filing, submitting, or
later advocating it — an attorney or unrepresented party certifies
that to the best of the person's knowledge, information, and belief,
formed after an inquiry reasonable under the circumstances:
o (1) it is not being presented for any improper purpose,
such as to harass, cause unnecessary delay, or needlessly
increase the cost of litigation;
o (2) the claims, defenses, and other legal contentions are
warranted by existing law or by a non-frivolous
argument for extending, modifying, or reversing existing law
or for establishing new law;
o (3) the factual contentions have evidentiary support or,
if specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further
investigation or discovery; and
Reminds us of 8(a)
o (4) the denials of factual contentions are warranted on
the evidence or, if specifically so identified, are reasonably
based on belief or a lack of information
Rule 11(c) – if after notice and a reasonable opportunity to respond,
the court determines that Rule 11(b) has been violated, the court
may impose sanctions on the lawyer, the law firm, or the party that
violated the rule or is responsible for the violation
o 11(c)(2) – 21 days!!
o 11(c)(3) – court on its own motion sees that there is a
violation of rule 11 rule of to show cause.
Rule 11 restricts a lawyer’s ability to file a pleading when he has no
more than a hope that favorable facts or law will emerge as the
case progresses.
o Rule 11 regulates the way lawyers and clients conduct
themselves, establishing standards for investigation of law
and facts.
o If a lawyer or unrepresented party screws up any of the above
requirements, then he can be sanctioned.
“It is now clear that the central purpose of Rule 11 is to deter
baseless filings in district court and thus, consistent with the REA’s
grant of authority, streamline the administration and procedure of
the federal courts.”
Notes and Problems
1. A/B) No they can’t be sanctioned because it must be written, so phone
calls don’t count (whether it was a party who made the call or a lawyer). C)
No he cannot be sanctioned for a groundless interrogatory because it doesn’t
apply to discovery.
2. If the claim would not prescribe in 2 months, then yes the lawyer for
Plaintiff would be sanctioned under Rule 11 because it was not reasonable
under the circumstances not to investigate the plaintiff’s story. However, if
the plaintiff’s claim would prescribe the next day, he might not be sanctioned
by arguing that he didn’t have reasonable time to investigate because the
claim would prescribe before he could give evidence.
What about the client? Depends on the circumstances of time.
3. If the defendant finds that the plaintiff and his lawyer have filed a frivolous
complaint and he provides affidavits and documents, can he catch a
remedy? He can file a motion for summary judgment and then file a motion
for sanctions under Rule 11 two separate motions [Rule 11(c)].
21 days must pass before the filing of the second motion.
4. Rule 11(b) does not put an obligation on the lawyer to fix her mistake with
an amendment because at this time, she believed something else. If a
lawyer or party makes a mistake about the substance of a law, like the
statute of limitations running period, then he has to fix it on discovery in
order not be sanctioned by the court. IF he finds that after discovery she was
wrong, then he must fix it or else he will be sanctioned.
5.
Walker v. Norwest Corp.
--Facts
In a dispute over (P)’s trust fund, his guardian, attorney Massey
appeals from the district court’s award of sanctions against Massey
for filing a diversity case in which he failed to plead complete
diversity of citizenship and pleaded facts which tended to show
there was not complete diversity.
Massey had not alleged a citizenship for many of the defendants
and did not identify which defendants should be dismissed to create
diversity jurisdiction.
Upon receiving the complaint, (D)’s attorney informed Massey that
his complaint showed on its face that there was no diversity
jurisdiction and asked him to dismiss his claim or (D) would file a
motion for sanctions.
o Massey did not dismiss and merely acknowledged (D)’s
correspondence. SO he did nothing.
--Holding = sanctions against (P) stand.
--Reasoning
Finding out the defendants’ citizenship is a burden on the plaintiff in
order to invoke [complete] diversity jurisdiction.
Massey failed to show diversity and also failed to argue the point of
Massey’s financial circumstances, allowing for an award of
monetary sanctions- there was no abuse of discretion.
--Significance = normally a letter from the defendant is NOT enough!! Must
go by the rules set out in FRCPP Rule 11
Notes and Problems
1. Massey violated Rule 11(b)(2) because he filed a frivolous claim because
he didn’t even address the issue of diversity which was the sole basis of his
claim in federal court.
2. When a defendant wants to challenge the plaintiff’s complaint on the basis
that it violates any of Rule 11(b), he must first give a written notice to the
plaintiff of the deficiencies in his complaint and allow him 21 days to amend
his complaint [which plaintiff must file with the court]. If the plaintiff does not
amend his complaint, then defendant can file a motion to dismiss the claim
on basis on violation of Rule 11 (b) with evidence of the deficiencies; he can
then separately file a motion for sanctions against the plaintiff.
However, the defendant does not necessarily have to give written
notice to the plaintiff of his plan because a court has the power of
discretion to dismiss a plaintiff’s complaint based on violation of
Rule 11(b) and give sanctions to the plaintiff.
o A court does not have to impose sanctions though, and even if
it does, the sanctions do not have to be monetary sanctions
The plaintiff’s lawyer will have to pay the sanctions for a violation of
Rule 11(b)(2) as required in Rule 11(c)(5)(a) because he is
represented and lawyers should know the law before the file a
frivolous claim in court.
3. Rule 11 explicitly applies to defenses as well. Courts apply an objective
reasonableness standard to determine if Rule 11 has been violated.
Sanctions can be imposed on law firms, lawyers, or parties who are
responsible for the violation.
4.
Christian v. Mattell, Inc. [“cool blue” Barbie v. Claudine]
--Facts
Attorney Hicks brought suit on (P)’s behalf claiming that (D)’s Barbie
dolls infringed (P)’s doll sculpture copyright. The District Court found
that (P) should have discovered prior to commencing the civil action
that ’s dolls could not have infringed her copyright because (D)’s
dolls had been created well prior to her doll and (D)’s dolls had
clearly visible copyright notices on their heads.
After determining that Hicks had behaved “boorishly” during
discovery and had a lengthy rap sheet of prior litigation misconduct,
the District Court imposed sanctions. Under Rule 11, DC ordered
Hicks to pay (D) $501,565 in attorneys’ fees that it incurred in
defending against the frivolous action.
--Holding = DC was correct in determining the claim was frivolous, but
vacated the sanctions judgment.
--Reasoning
Rule 11 sanctions are limited to misconduct regarding signed
pleadings, motions, and other filings – not discovery abuses,
misstatements, etc.
The DC failed to make clear what specific conduct of Hicks’ it was
ordering sanctions pursuant to. Since the CoA was unable to tell
whether the misconduct being sanctioned occurred outside the
pleadings, such as in oral argument, at a meeting of counsel, or at a
key deposition, CoA had no choice but to reverse the sanctions
order given that Rule 11 sanctions are limited to misconduct
regarding filing of court papers.
To impose sanctions on behavior outside of Rule 11 under its
inherent authority, the court must make an explicit finding that
counsel’s conduct constituted or was tantamount to bad faith.
o Rule 11(c)(6) states that a court order imposing a sanction
“must describe the sanctioned conduct and explain the basis
for the sanctions”.
Notes and Problems
1.
2. Some states require that Rule 11 sanctions and similar litigation sanctions
must be reported to the state bar, which could then institute a disciplinary
proceeding against the lawyer.
3. Sanctions are supposed to be limited to what suffices to deter repetition of
the offending conduct = paying opposing side’s attorney fees, paying the
court for trouble; etc.
Nonmonetary sanctions, making a lawyer apologize, requiring the
lawyer to attend classes for CLE, etc.
C. Responding to the Complaint there are three possible responses to a
complaint: do nothing, make a pre-answer motion, or answer.
--Default: the understandable and unfortunate answer
A defendant who fails to respond to the complaint can have a
default judgment entered against him. There is an understandable
reason for this and an unfortunate reason
Understandable reason – this flows from the substantive law.
o Some cases, a defendant is not afforded many defenses in a
lawsuit. The defendant will either lose the lawsuit or pay a
lawyer to defend him that he doesn’t want to pay for if the
judgment will be entered against him anyway.
Unfortunate reason – a defendant may possess a meritorious
defense, but he either does not realize he has such a defense or he
knows but he cannot afford a lawyer.
Notes and Problems
1.
2.
3.
--Why file pre-answer motion instead of motion?
--Pre-answer Motion: think about Rule 7(a) and (b)
A defendant who does not default can simply proceed to answer the
complaint. In her answer, the defendant can include procedural and
substantive defenses.
Whatever the defendant places in her answer, she must respond to
the substantive allegations of the complaint. She must either
conceded or deny the allegations and her part in the events.
Unlike a pleading, a motion does not require a party to set forth her
version of he facts. Instead it is a request that the court take some
action in regard to the lawsuit.
o A pre-answer motion also stops the clock on the amount of
time a defendant has to answer a complaint with factual
evidence. LOOK THIS UP!!!!!
Rule 12(b) motions apply here, but since these motions can delay
the next stages of a trial, Rules 12(g) and (h) were put in place to
balance the availability of these defenses against the possible
abuse of these defenses.
o Rule 12(g) states that if you wish to file multiple motions
raising the defenses in 12(b), you must file them in one
motion in the suit.
If you do not, then you will lose the right to file the other
ones because you waived it.
The only ones you cannot waive are failure to state a
claim, failure to join an indispensable party, failure to
state a legal defense to a claim, and lack of SMJ.
o Rule 12(h)(1) A party waives any defense listed in Rule
12(b)(2)-(5) by omitting it from a motion in the circumstances
described in Rule 12(g)(2); or failing to either:
(i) make it by motion under this rule; or
(ii) include it in a responsive pleading or in an
amendment allowed by Rule 15(a)(1) as a matter of
course
Rule 12(e) – Motion for a More Definite Statement
o This motion asks the pleader to make more definite and
certain his contentions. However, this motion presently is
rarely and almost never successfully invoked.
If the claim is really vague, then it will be subject to a
Rule 12(b)(6) motion.
o The most frequent case this is used is when the pleader has a
fairly good idea what the claim is about but he wants to know
more about the precise nature of the pleader’s case
Rule 12(f) – Motion to Strike
o The motion to strike in its most common use allows a party to
challenge a part of the pleading that fails under the
substantive law, even though the rest of the pleading states a
claim or defense.
o In its other less common use, the motion to strike forces
removal or irrelevant and prejudicial allegations in a pleading.
o Courts will entertain a motion to strike any “redundant,
immaterial, impertinent, or scandalous matter” –
If the allegations in the complaint have no relation to
the case or unnecessarily confusing;
If the complaint is overly long and detailed;
If the allegations are unnecessarily derogatory
Rule 12(c) – Motion for Judgment on the Pleadings
o A plaintiff could move for judgment on the pleadings if the
defendant fails to deny any of the allegations in his pleading
[his defense is not a real legal defense to the allegations].
o The court essentially matches up the allegations of the
complaint and those of the answer, and it decides whether the
judgment for the plaintiff should be entered on the basis of
the pleadings.
o A case may also be decided on the pleadings alone if the
court believes the law is very clear and that further
development of the facts would not assist in deciding the case
--Answer: if the defendant cannot demurrer to the complaint or dispose of it
on the ground of Rule 12(b), she has to respond to the factual allegations.
Denials
o Rule 8(b) points out that a party can either admit, deny, or
deny because of lack of information.
o Rule 8(b) provides that a defendant only needs to deny those
allegations which he actually disputes; Rule 8(b)(6) provides
that any allegations not denied by the defendant is deemed
admitted by the defendant.
o The general denial is an allegation that denies each and every
allegation in the complaint.
However there are extremely rare cases in which the
defendant can plausibly deny each and every allegation.
A defendant who enters a general denial may well find
himself at the end of a Rule 11 inquiry because courts
tend to look down on these.
o The party should deny specific elements of the complaint if he
does not give a general denial.
Affirmative Defenses – Rule 8(c)
o Accord and satisfaction, arbitration and award, assumption of
risk, contributory negligence, duress, estoppel, fraud,
illegality, laches, license, payment, release, etc.
o The list given is not an exhaustive list; it is merely a list to
start with
The obligation is on the defendant to raise these along
with any claims to file.
An affirmative defense is more than just disputing the
plaintiff’s claims – it typically means that EVEN IF the
plaintiff’s claim is true, there are other facts that will bar
the plaintiff’s recovery.
o Affirmative defense is NOT admitting anything! Example: “I
deny the existence of contract, and in the alternative, even if
we had a contract, I fulfilled it….” Or state some affirmative
defense like award and arbitration, failure of consideration,
duress, etc.
There is a difference between a defense and a claim – a
claim asks for a remedy, whereas a defense does not.
So if you claim a defense in your counterclaim, the court
will allow it and change it to a defense.
--If you file a 12(b)(2) motion for lack of personal jurisdiction, you will include
an explanation with affidavits and depositions.
*if its incorporated, then you will include where the business is
incorporated, etc.
Zielinski v. Philadelphia Piers, Inc.
--Facts
(P) sued (D) alleging that a forklift owned by (D) caused (P)’s
injuries that occurred when (P) was in a collision with another forklift
on a pier involving one of (D)’s employees.
(D) asked its insurance company to answer that the complaint
should be filed against Carload Contractors because the forklift was
operated by an employee of Carload Contractors. (D) was also
aware of this error and investigated whether it and not Carload
Contractors owned the forklift.
o Johnson stated he was Defendant’s employee in his
deposition.
At a pre-trial conference over two and a half years later, (P) found
out that over a year before the accident, the business of moving
freight on the pier was sold from (D) to Carload Contractors
--Holding
--Reasoning
RULE: Under FRCP Rule 8(b), allegations in a complaint that are not
specifically denied are deemed admitted.
(D)’s general denial of (P)’s allegations that (P) was injured by a
forklift owned, operated, and controlled by (D) was ineffective
because (D) admitted in its letter to the insurance company that (P)
was injured by a forklift. In order to be effective, (D) must have
specifically denied ownership of the forklift.
Under the doctrine of equitable estoppel, (D) cannot take advantage
of (P)’s mistake when the mistake was perpetuated by (D)’s
inaccurate responses regarding ownership and agency
--Significance = This case illustrates the consequences of generally denying
allegations in a complaint. In this situation, estoppel is an additional ground
for deeming the facts to be admitted because Defendant knew that it did not
own the forklift yet failed to apprise Plaintiff of this fact.
In real legal practice, a complaint should always be answered
paragraph by paragraph
--Reply
WHAT TO DO ON EXAM
Personal jurisdiction – constitutional analysis
Does a traditional basis apply? Pennoyer
If so, then state that traditional basis by itself MAY be enough according to
Scalia’s theory in Burnham.
On the other hand, Brennan’s theory stated that you ALWAYS have to go
through minimum contacts
So then International Shoe test:
There must be a relevant contact between the defendant and the forum
state.
Purposefully availment: reach out to the forum and avail herself of the forum
in some way – make money, advertisement, etc.
Foreseeability: It must also be foreseeable that the defendant could get sued
in the forum state
Is this specific or general jurisdiction?
Does the plaintiff’s claim arise from the defendant’s contact with the forum?
Yes: Specific jurisdiction
No: general jurisdiction [defendant is domiciled or at-home + continuous and
systematic contacts]
Is it fair for the defendant to defend himself in a suit? The burden is on the
defendant to show that it is UNconstitutional to bring him into suit.
Burden/ inconvenience on the defendant [travel, witnesses, etc.]
Forum state’s interest in adjudicating the claim [McGee v. International
Life Insurance Co.]
The plaintiff’s interest in obtaining effective relief
Legal system’s interest in efficiency
Shared substantive policy [disharmony with families, etc.]
--When it comes to transfer, does the person moving for transfer have the
burden of proof that the transferee court has personal jurisdiction and proper
venue?
--States may have forum non-conveniens statutes. But when it comes to the
federal forum non-conveniens, they normally dismiss the case so that it can
be tried in a foreign court system.
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