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Civ Pro Ruescher

Class notes spring 2014

1/6/14 What is civil procedure? This class Federal civil procedure Rules of the game of civil litigation

How do you start a lawsuit?

File a complaint Serve the summons and complaint o According to the rule of federal procedure

First three topics

Personal jurisdiction o Power of a court to require/make a defendant participate in a lawsuit Ex. You fall in Kansas, want to sue the supermarket and file for the claim in NY o Basic concept is based on fairness should the defendant have to travel all this way? o Federalism Idea of state sovereignty behind federalism Not fair to make someone from one state to appear in court in another state That state doesnt have power over person Two court systems State and Federal One court system for each state One whole federal court system o 94 district courts o United states courts of appeals intermediate court 13 courts 12 are divided geographically 1 for specialized matters o Supreme Court In the federal rules, federal district courts voluntarily agree to be subject to the same restrictions on personal jurisdiction of the state in which that court is sitting Subject matter jurisdiction o Refers to the type of civil case a federal court can hear / adjudicate o Any civil case can be heard in state court

o o

Federal court Limited SMJ Only two types (for now) Diversity of citizenship o Between parties from two different states o Amt of $$$ exceeds $75,000 Federal question o A case where a plaintiff is enforcing a right granted to him under the US constitution or a federal statute o Section 1983 says you can sue the state for violating your constitutional right Common law claim Based on law made by judges Statutory claim Based on a law passed by legislature Federal claims Always statutory (for this class) Either statutory or constitutional

Venue o Limits you to which district court you can bring your action in o District Court is determined by Personal jurisdiction over defendant and proper under the rules of venue

Pennoyer v. Neff o First case that sets up the law for personal jurisdiction (yr. 1878) o Citations U.S. US reporter (official) L.Ed. Lawyers edition (unofficial) o Majority of supreme court 5 people o Facts MDue itchell sues Neff for $253.14 for legal services Mitchell sued him in Oregon state court Neff is apparently in California and owns property in Oregon Mitchell publishes the notice of suit in Pacific Christian Advocate Neff doesnt submit an answer Court enters default judgment Service is valid if within the state Cant find the person and isnt a resident of the state attached taking control of property o Real property Lien Only good for value of property (if property value is less than liens, tough luck) o Personal Property Sherriff seizes it

o o o

o o

Mitchell gets property, sells to Pennoyer Neff trys to evict Pennoyer Issue: Did the court properly exercised jurisdiction b/c there was property in the state? In rem jurisdiction outside resident owns property in that state Holding No. Reasoning Mitchell did not attach the property at the beginning of the lawsuit He did it after he received the default judgment No bueno Rationale The attachment of the property gives the court the power to decide the case B/c the state court has no other power over the outside resident Pg 27 last paragraph general gist of case Court concludes that it violates the constitution to allow Oregon to enforce this judgment in this case Due process clause of the 14th amendment of the constitution Person is being told what to do by a state who doesnt have power over them First time its a considered a constitutional issue

Personal jurisdiction o Ability of a state court to pull somebody into a court State sovereignty or state power Pennoyer makes it so that one state cannot exert more power over another state o o States can only exercise in rem jurisdiction over a persons property if the property is located in that state. If the property is in that state, it must be attached before the law suit. The defendant must be served by publication. Judgment is limited and can only be enforced to the extent of property itself When things go right o Case where state has personal jurisdiction over defendant Served or hes a resident, etc. Served with summons and complaint in NY o Proceeds and gets a judgment o Once plaintiff win, has to enforce the judgment Levies on property Bank accounts, real property, personal property, etc. Can enforce judgments in other states Full faith and credit clause in constitution o Means states must enforce judgments made in other states Another scenario o Plaintiff wants to sue out of state resident

Attached to properties and commences law suit gets judgment Can only receive money for property in that state o Rationale is that you owned got judgment on defendant to the capacity of his ownership in that state Pg 30, note 5 o A) Not valid, Oregon has no power/jurisdiction over California person o B) Arizona state court can hear any case, so its okay. Arizona has jurisdiction because he was within the borders of the state. o C) No Pg 31, note 8 o 14th amendment is the basis for challenges to state court jurisdiction o Judgment entered without jurisdiction, violates due process judgment is not entitled to full faith and credit o

Rule 4 of federal procedure (4K1A) o Territorial limits and effects from service o Every federal court will follow the same personal jurisdiction rules as the state court it resides in o Courts of general subject matter jurisdiction has the power to hear the most cases How do we figure if the federal court violates the federal rules? o Check to see if the state court can do it

1/8/14 Good supplements to have

Freers commentary on civ pro Crunchtime for civil procedure Glannon on civil procedure Questions and answers on civil procedure

Pennoyer tells us that a state court cannot exercise personal jurisdiction over a defendant unless it has a legitimate basis to do so.

2 ways to exercise authority/jurisdiction/control o Person Presence of defendant in the forum

Defendant in the state when served (within the boundaries) Appearance of defendant When the defendant voluntarily submits to the authority of the court and agrees to participate in the lawsuit Domicile (residence) If our defendant is a resident of the state then the court has authority over him Property Three types of property suits True in rem o Condemnation proceeding eminent domain o All about the property Quasi in rem 1 foreclosure proceeding o Owner of property isnt paying his mortgage o Bank is trying to get the property back trying to close its liens o All about the property Quasi in rem 2 Do not adjudicate rights to the property o Pennoyer v. neff Attach the property to give court the power to decide the lawsuit (had to be attached before the proceeding)

Domicile tangent

Person has to be personally served What if person is a resident of NY but always living and traveling in NJ? o Under pennoyer, a state has no real authority outside of its borders o Courts change this view in later cases

Pennoyer was also a constitutional issue

Personal jurisdiction always has two common issues for the defendant o Fairness to the defendant o Federalism Violating a states sovereignty? Violates the due process clause of the 14th amendment? Only applies to states When a state does have the right/jurisdiction over D and P gets a judgment o Judgment is enforceable by the P in ANY state Made constitutionally available by the full faith and credit clause of the constitution

Long arm statutes

Legislature tells the court authority/power it has over an out of state defendant o Legislature is sensitive in creating long arm statute to not violate constitution/sovereignty

For NY NYCPLR ss 302

302. Personal jurisdiction by acts of non-domiciliaries


(a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent: 1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or o NJ farmer brings tomatoes to NY and its rotten, you can sue him. If you are in NJ and farmer kills your dog? Subject to Jersey law. Cant sue person in NY for every reason 2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act; or 3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he o Plumes (nuisance), machine made negligently from Ohio and injury is in NY (i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; or 4. owns, uses or possesses any real property situated within the state.

HYPO diversity action P NY, D NJ and amt is over $75K, P wants to sue in the federal southern district of NY STEPS for fed court 1. Federal court has same jurisdiction as that state court a. Federal rule frcp 4k1a 2. Consult the long arm statute of NY a. CLPR NY ss 302

3. Determine whether the statutes violates the due process clause of the 14th amendment of the constitution of the USA

Personal jurisdiction in federal courts recap Question: Under 4K1A, the federal courts agree to be bound by the personal jurisdiction rules of the states in which they are located. Are the federal courts constitutionally required to do so? NO, they can hear any federal case

As life in America started to modernize, transportation and technology advanced, and personal jurisdiction according to pennoyer is starting to be amended

Hess v. Pawloski

P not a resident of Massachusetts, but Pennsylvania Car accident occurred between P and D No personal service and no property attached was made to P special appearance is when defendant comes to court to contest personal jurisdiction o When you appear specially You cannot be served You are not agreeing to the lawsuit You are only there for a limit circumstance No special appearance in the federal rules today Modern method motion to dismiss for lack of jurisdiction Court buys into the concept of the Massachusetts statute which allows Massachusetts to serve an agent of the state who then sends notice to the out of state resident Does Hess violate Pennoyer? o No, because the court says P is considered served within the forum of the state by having an agent served o Bullshit way the court gives lip service to the court but changes the law

International Shoe v. Washington

Does not change or replace Pennoyer, but expands o Gives new criteria of when to bring in people

International claims Washington doesnt have jurisdiction over them bc internationals business is not in Washington Issue: Can Washington exercise jurisdiction of an out of state corporation to pay for unemployment taxes F.O.B free on board shipping. International shoe is liable for shipping item only to the border of the state it is based in In personam personal jurisdiction Capias ad respondendum that you may capture [him] in order for him to reply If he be not present within the territory of the forum, he has certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Pg 39 Where international shoebox comes from International shoe box looks at two things o Looks at degree or amount of activity in that forum o If claim is related to activity being done in forum o Factors / scenarios No brainer presence corporation activities that are systematic and continuous and claim is related to that activity, then you have jurisdiction over them No Brainer Cant sue for Casual/limited/isolated conduct and if claim is not related (opposite end of spectrum) Undue burden on defendant Fairness The gray area claim is unrelated to the activity in the forum but activity is continuous and systematic If activity is so substantial you can sue o Ex. resident of cali slips on banana in Roosevelt field in Apple Store. Can prob sue apple in cali if they want o Corporation that can be sued in that state for almost anything would be considered general jurisdiction Very little activity but the claim is related to that activity Can sue, sometimes International Shoe Box Systematic and continuous activity PLUS claim relates to activity YES ALWAYS Systematic and continuous PLUS claim unrelated to activity Yes If activity is substantial NO If not substantial Isolated or casual activity PLUS claim related to activity SOMETIMES Isolated or casual activity PLUS claim unrelated to activity NO ALWAYS

Notes 4. International shoe test a. Isolated plus related SOMETIMES (Hess v. Pawloski) b. No State courts can hear ANY claim, but the activity in Washington is not substantial c. Yes Substantial systematic and continuous activity d. No We dont know if there is systematic and continuous activity e. Yes Systematic and continuous and its related f. No International has no dealings in Oregon

Make sure to look at note on Mc Gee, Hanson, and Gray on page 44

1/13/14 International shoebox is it systematic? Is it continuous? Is it substantial? Factors to determine if there is personal jurisdiction Purposeful availment

Advertising? Ship products? Any dealings or connection at all?

Did the defendant purposefully avail itself of the benefits of the forum? Pg 44 note on mcgee, hanson and gray

Mcgee texas insurance company has isolated incident in California but the activity is related o Harder case than international shoe bc there is was nobody from Texas that were actually there

Key to an A highlight all the facts you talked about in your exam, and look at the ones you dont use and ask why did the professor put that there. Its the facts stupid!

Trust Separate entity which separates your money from you

Interest goes to person, rest of the money goes to beneficiary

Hanson different from McGee o Beneficiaries want to bring the bank to Florida o Different bc the trustee moved to Florida NOT the bank o Court holds theres no personal jurisdiction over the Bank, no purposeful availment The unilateral activity of Donna cannot require the contact of forum in the state Bank did not reach out to Florida Once you purposefully avail yourself of the privilege of the forum of that state, you are now invoke the benefits and protections of that laws

Gray o

Stream of commerce the flow of goods Component manu Product manu wholesaler retailer Consumer Component manu can reasonably infer that the consumer may be in a different state than that of the manu If a corporation elects to sell its products for ultimate use in another state, it is not unjust to hold it answerable there for any damage caused by defects in those products

Delivered the opinion of the court 5 or more judges agree Plurality of court less than 5 judges agree

Worldwide Volkswagen o Can an Oklahoma court exercise jurisdiction over worldwide and seaway? No o Long arm statute on pg 48, footnote 7 Sometimes gives long arm statute on exams Point out the part of the staute that proves why the long arm statute applies o Is it constitutional? o minimum contacts Fairness and sovereignty Protection of D against burdens of distance with litigating State courts dont overstep their boundaries o Fairness factors Burden on defendant The forums interest in adjudicating the dispute The Ps interest in obtaining convenient and effective relief

o o

The interstate judicial systems interest in obtaining the most efficient resolution of controversies The shared interest of the several states in furthering fundamental substantive social policies Questions to ask Does D have minimum contacts with forum? Purposeful availed himself of forum Assuming minimum contacts is it fair to exercise jurisdiction in light of the 5 factors set out in VW? Two ways to see personal jurisdiction Is it fair? Does federalism apply to this instance? Foreseeability argument? Parade of horribles response Justice Brennan Doesnt buy the sovereignty thing Wants there to be based on reasonableness and fairness Oklahoma wants to make sure ppl who gets hits by a drunk driver on their highways to be compensated (Oklahomas interest) Family has to be in Oklahoma hospital (Ps interest) Notes 4 on pg 57 A) Doesnt change anything B) An argument can be made C) Doing business Got em! Notes 9 on pg 58

Personal jurisdiction in federal court

Federal courts are not constitutionally bound in the same way that the states are If congress says so, federal courts can exercise jurisdiction over anyone The federal courts power is restricted under the 5th amendment 4k1a fed courts voluntarily that fed courts are usually restricted by state court

Note on Keeton and Calder

Calder is more important o Calder effects test Only applies to intentional torts Even if you dont purposefully avail yourself of a particular forum, if you knowingly inflict a wrong on a person in the forum, they can sue you there

Ex Two reporters in NY write an article about Shirley jones who lives in CA sells it to national enquirer and defamed her. Shirley jones can sue the reporters and the magazine.

Keeton o P had no connection with new Hampshire P doesnt have to have connection to the forum, only defendant has to o She can sue in New Hampshire for the whole defamation in the U.S.

Burger king case o Choice of law provision Provision in a K that provides that if theres a dispute regarding the contract, the K will be interpreted in accordance with the law of blank state Is the body of law that the state uses to determine which law applies Ex if a NY P sues a NJ D in NY court for injuries cause by an accident in Conn., the NY court will consult its choice of law rules to determine which states law will apply. o NY court would choose Conn. Most courts will honor choice of law provision as long as its reasonable o Question is whether there is enough to make Rudzewicz go to Florida? Yep o Personal jurisdiction General Can sue D for anything in the state. D is substantially in State Specific Specific issue in that state to bring suit o Minimum contacts test Looking for purposeful availment Random, Fortuitous, Attenuated contacts Unilateral activity of another party or a third person o Steps 4K1A Long arm statute Constitutionality General Systematic and continuous and substantial Specific o Minimum contacts test (purposeful availment) o Fairness contacts Pg 69 first full paragraph

1/15/14 Overview

International shoe adds onto pennoyer case doesnt replace it Mcgee, Hanson and gray Important cases o First two cases purposeful availment and minimum contacts o Gray introduces stream of commerce Volkswagen Puts a brake on stream of commerce o SOC stops at the last sale Foreseeability isnt enough Burger King Refines some Volkswagen points o Gives us personal jurisdiction in terms of contracts (the above cases were torts) All of these cases deal with specific jurisdiction , NOT general o General D is so present you can sue anywhere (ex. APPLE) o Specific

Back to burger king case

Case started in federal court of south florida o Diversity of citizenship determined by domicile Rudzewicz Michigan Corporations Domiciled by 2 places State theyre incorporated in State where principle office is Starts with long arm statute o See if Florida has authority to bring rudzewicz to florida court o Fed court follows state court jurisdiction 4k1a Special appearance not submitting to jurisdiction but just to resolve dispute o Now rule 12 (B) motion to dismiss complaint Court gives jurisdiction Bench trial judge makes decision not jury Goes to circuit court of appeals 11th circuit for this case o Reversed the decision of trial level court Nature of claim o Breach of contract case Why is it that the court feels comfortable that rudzewicz is able to come down to florida to litigate this case? o Rudzewicz dealt with Michigan and Florida offices negotiating the contract Minimum contacts o Rudzewicz sent payments to Florida Performance of the contract

Choice of law provision D had some idea that Florida is playing some role in this contract Rationale for holding o Minimum contacts test Where a state seeks to assert specific jurisdiction (footnote 15, pg 67) D has purposefully directed his activities at residents of the forum Litigation results from those activities o Fairness Footnote 13 pg 67 Factors pg 69

J. McIntyre Machinery, LTD v. Nicastro Facts

Nicastro hurts hand in machine manufactured in England (McIntyre) Owner of business Nicastro worked for bought machine from Ohio distributor McIntyre told Ohio distributor to sell machine anywhere in U.S. o No specific state Gray v. Volkswagen case difference o Stream of commerce Nicastro is more like Gray

Judgment of court

No jurisdiction

How do they decide? o o o o Opinion of the court 5 or more justices agree NO opinion of the court Plurality of court Less than 5 agree but its the most Kennedy, Roberts, Scalia, Thomas Concurring Agree with judgment but not opinion Breyer and Alito Dissenting Disagree Ginsburg, Sotomayor, Kagen

Oral arguments

Pg 78 Facts are in 1 Decision

The defendants need to aim their activity specifically at something Need some sort of purposeful availment Pg 82 need to get something specifically out of that state

Breyer

1/22/14

Calder effects formula for jurisdiction Stream of commerce Personal jurisdiction in a K setting o McGee and Burger King o Burger King Case Court looked at K provisions Choice of Law provision Prior negotiations Continuing business relationship with Florida Couple of things here o Pennoyer basis Quasi In Rem Personal Domicile Transient presence (found / served in the forum) Consent (appearance/ general appearance) o Specific Jurisdiction D is outside of the state but has done something inside the forum Long arm statute authorizes courts to exercise jurisdiction over non resident CPLR 302 Purposeful availment Constitutional basis Minimum contacts with the state (90% of constitutional analysis) Fairness factors (VW; Burger king) o Burden on D o The forum state has an interest in case o The Ps interest in obtaining convenient and effective relief

o o

The interstate judicial systems interest in obtaining the most efficient resolution of controversies The shared interest of the several states in furthering fundamental substantive social policies

Asahi Case

Bob is driving a motorcycle o Fell off and tire exploded Sues tire manufacturer Manufacturer is from Japan Brings in valve manufacturer from Taiwan Bob serve summons and complaint to tire manufacturer Tire manufacturer sends answer to Bob and 3rd party summons and complaint to Valve Manufacturer Valve sends 3rd party answer Bob and tire manufacturer settled (not mentioned) Now tire manufacturer v. valve manufacturer o Valve manu motion to dismiss on lack of jurisdiction Says valves get to California via Japan mfr & through stream of commerce to California Court 4 says yes, 4 says No, all 9 says the case should be dismissed based on fairness factors o Burden on D was severe o Interest of forum not great bc the person involved (Bob) was already compensated o Shared interest of the states Shouldnt have two foreign manufacturers arguing with foreign law in California courts

General Jurisdiction

What is it? Can sue the D in the forum for anything because the activity in the forum is so great that the D is almost at home o Ex. Apple computers

Goodyear case

Two 13 North Carolina boys died in a Bus accident in Paris o Try to sue Goodyear and their subsidiaries (3) in NC Specific jurisdiction? No o Accident in Paris tire has no bearing on NC

North Carolina lower court grants general jurisdiction o Says tires made its way into NC Post international shoe o Perkins Case Systematic and continuous (general jurisdiction) activity was so great that a mining company in the Philippines can sue an Ohio company in Ohio o Helicopteros No general jurisdiction Holding No general jurisdiction No gray area Ruchser likes the notes to goodyear better than the case itself Note 7 relatedness o Is it sufficient that contacts related to the cause of action, or must the cause of action arise out of the contacts o Corporation from NJ sells a lot of cars in Oklahoma and NY. I buy a car from that manufacturer in NY. I drive the car from NY to Oklahoma where it blows up. Can I sue the manufacturer in Oklahoma? Most courts would say that Corp would be held to specific jurisdiction bc that corp sold that exact product in that jurisdiction, and that product is sufficiently related Brilmayer says noif its not a fact related to your case is doesnt work Quasi in Rem Shaffer v. Heitner

Jurisdiction Personal Pennoyer o 1) Bernham o 2) The earlier cases o 3 Specific General o Goodyear o perkins

International shoebox earlier verison o Now we got purposeful availment (related) o Fairness Systematic and continuous activity PLUS claim relates to activity YES ALWAYS o Now we got purposeful availment (related)

o o

Now we got purposeful availment (related) Fairness

Goodyear

Fairness

Shaffer v. Heitner

Small lecture on Corporations o Government created entity Owned by shareholders Board of directors (usually appointed by shareholders) make the important decisions Officers run company on day to day basis Employees bottom of the power chain o Shareholders bare the brunt of any wrong done by directors and officers o When shareholder decides that the directors/officers have done wrong, he brings an action against them o When a shareholder sues officers or directors of a company alleging they breach their fiduciary duty, its called a shareholders derivative action Shareholder brings shareholders derivative action o Wants to sue the officers and directors in Delaware Greyhound incorporated in Delaware, principal place of business in Arizona o Not very likely to be able to sue in Delaware Shareholder attaches to stock o Stock is deemed to be held in Delaware D says its not fair to make them come to Delaware o Insufficient contacts and property is not related to the lawsuit Status as shareholder has nothing to do with cause of action as directors / officers SUP CT question Do we need to update the rules regarding quasi in rem to account for the notions of fair play and substantial justice that were established in international shoe? o Court says yes Holding o You cannot attach to the property unless the property relates to the claim Need the term of relatedness Most important pg of case pg 110 Notes pg 118 o #2 (a) Yes quasi in rem okay (b) Yes PI that relates to the property (c) Yes Full faith and credit clause

A judgment that is rendered in a quasi in rem action is only enforceable against property o Once that property is sold, thats it Or attach to another state and sue him again

Burnham case Should the transient presence basis of jurisdiction established under pennoyer be updated to comport with notions of fair play and substantial justice in international shoe? o 4 justices say yes, 4 say no, and 1 says what the hell is going on? o No says tradition! You get served in the jurisdiction o Yes modern standards! Once you step into jurisdiction you purposefully avail yourself to it o Stevens this is nonsense Take away if you serve someone in the jurisdiction, you got him

Notice
Have to give defendant adequate notice of a lawsuit o Summons and complaint is served to defendant Rule 4 will show us how to properly serve a defendant If you serve someone in the forum who happens to be there on business. Jurisdiction? Yes o You also fulfill notice bc you serve him summons and complaint 2 fer Effective notice Effective jurisdiction Can serve someone outside of the forum but will not have jurisdiction over him o Effective notice o Non effective jurisdiction Defendant ABC Inc. Want to sue on a K in Cali and wants to bring it in NY. Corporate officer served in NY. Jurisdiction? NO o Can get jurisdiction over natural person in the jurisdiction o Cannot get jurisdiction over a corporate entity in the jurisdiction o Notice? Yes its proper service

Rule 4 (pg 5) Summons Order from court to participate from lawsuit (typically respond with an answer)

(1) Summons must contain o Name of court and party Issuance

Summons must be served with the complaint Rule 4(e) serving an individual within a judicial district of the US o NY action in SDNY and want to serve the guy in NJ? Yes you can (1) Look for rules for service In NY In NJ o (2) Deliver a copy of the summons to the person individual Leaving a copy at the individuals dwelling w/ someone of suitable age Just old enough to appreciate the nature of the importance of a paper o Like 7 or 8? Okay o In diapers? No HYPO o Wanna serve Joe joe. Go to his summer home and serve the mans sister. Three reasons why it may be ineffective service: Might be his little tiny sister Not his domicile The sister might not live there

National dev co v. triad holding corp

Super rich guy moving all over the place, court gives jurisdiction in NY If he wasnt living there at the time, the court doesnt have any opinion

Subject Matter Jurisdiction


3 topics we are going over in SMJ o Diversity For natural person Complete diversity All Ps must be diverse from all Ds o Determine by domicile Same rule if Corporation is involved Determine by principle place of business Amt in controversy has to be over $75,000 o Federal Question When the Ps claim is based on the violation of a federal law o Supplemental (talk about later in course) For extra people that maybe be brought into the lawsuit

Diversity

Why are federal courts limited in diversity? o Constitution Divides power So theres no state biased 28 USC (1331 & 1332) pg (252) What is original jurisdiction? o Trial court jurisdiction. The other jurisdiction is appellate Citizenship 3 rules o There must be complete diversity of citizenship Strawbridge v. curtiss Requirement for complete diversity comes from section 1332 of 28 USC (statutory requirement) The constitutional requirement for diversity only requires minimal diversity o At least a person from 1 state on one side and a different state on the other side o Pg 183 note 3 To illustrate that congress can make legislation to change the diversity requirements to minimal diversity in certain special cases When do we determine diversity? The day the lawsuit starts / date of the commencement / institution of the action o Date of the filing the complaint Determine the citizenship of the parties Natural person Domicile o Where you are born o To change domicile Physically take up residence in a new state Intent to remain there for the indefinite future Subjective based on factors Corporation o Citizen of two places Place of incorporation Place of where its principal in business

Mas v. Perry

Married in Mississippi and moved to Louisiana to work at LSU Landlord in Louisiana had two way mirror, couple leaves Commences action in Louisiana

Mas leaves and has new permanent residence in Illinois

Landlord argument they lived in Louisiana so no diversity in citizenship

Court said NO o Mere residence is not domicile o A change of domicile may only be affected by two elements Taking up residence in a different domicile With intention to remain there o Wife saying shell never go back to Mississippi doesnt change her domicile Intention to not go back is not leaving domicile until new permanent residence has been established o Pg 187, note 2 o Pg 188, note 4 (a) Yes, she is not physically in the place she intended to live in (b) She loses because we determine diversity at the date of commencement (d) Certain places outside US are considered states (District of Columbia, Puerto Rico, etc.)

Citizenship of corporations 28 USC 1332 (c)(1)

Randazzo v. Eagle-Picher Industries

Have to allege diversity in the complaint o Fed rule procedure Rule 8 (a) Forms pg 132 Statement of jurisdiction Lawyer didnt allege didnt allege diversity of the corporation Dismiss with prejudice The plaintiff cannot bring up the claim again

Hertz Corporation v. Friend

Removal jurisdiction If you are the defendant in the case and there is diversity there are special circumstances where you can remove it from a state court and bring it to the fed circuit Hertz has to prove diversity o Hertz argues that its corporate headquarters is in New Jersey Small percentage of business in Cali

Lower court district Cali says Hertz is a citizen of Cali 9th circuit precedent Determine business activity from state to state and Hertz was predominantly in Cali Supreme Court holds thats Hertz is not in Cali o Nerve Center test determines its New Jersey Where is it headquartered? Supreme Courts rationale o Its easier to administer o Statutory language of the principal place of business o Pg 202 Mid paragraph is supreme courts problem that theyre expecting Overall center of control, direction and coordination o Anomalies will arise too bad says Sup Ct.

Representative Suits and Assignments of Claims


Representative suit Class action, Parent represents children, Administrator of the Estate o Rule Child, incompetent and estates We look at the citizenship of the person represented Class action and Shareholder derivative claim We look at the representatives claim Assignment of Claims o If someone buys a note from someone else in full Diversity of citizenship o If someone is assigned a partial of the note from another state No diversity Domestic Relations and Probate exceptions o Domestic relations Fed wont hear it o Probate / wills Feds wont hear it

Amount in Controversey Requirement Pg 213, note 5 Part (a) and (b) MEMORIZE! a) One P v. One D a. P can bring two separate claims against the same D to make it to fed court b. P cannot bring together two separate claims against 2 separate Ds for fed court c. 2 ps cannot aggregate their claims against one defendant d. Joint several liability b) Multiple parties on either sides (joint and severally liable)

a. As long as theres one claim, you can bring to fed court as long as its over 75K i. Makes multiple Ds one D for this instance c) Suing for equitable relief How to sue for amt in controversy? a. Injunction isnt granted how much is the P affected? b. How much will it cost the D?

Woody Allen Complaint

Mottley Case

Mr and Mrs Mottley given lifetime passes to ride on the railroad Congress passes a statute that prevents railroads from giving free passes Mottley sue the railroad over denial of free service Bring up constitutional argument o Unconstitutional for congress to assert that much power Is this a federal question case? NO Barebones / Well pleaded complaint rule o Mottley alleges (1) P and D entered into a contract (2) D breached contract (3) P wants damages Wherefore clause o Railroad answer Railroad admits (1) and denies (2) and (3) As and for 1st affirmative defenseCongress passed statute o Federal question in answer therefore not a federal question case Grable case Know 1st paragraph memorized

2/10/14 Federal question jurisdiction

How do we determine if its a federal question? o Federal statute or constitution Statute example Patent law Violation of a statute based on federal law For this class No such thing as federal common law

Constitution Does all federal statute create a right to sue? No o Where you can sue Right to sue provision put in by Congress o Why you cant sue over some statues Use governmental authorities to enforce rights upon businesses instead of letting consumers sue Employment question Federal law under civil rights act

Mottley case continued

What should the motleys put in their case? o Cause of action Breach of contract by RR for not fulfilling its K obligations o As a result of breach, Mottleys suffered damages RRs answer / response to the complaint o Defense Uses statute made by congress as a defense Mottleys turn around and make it a constitutional issue o 5th amendment issue Why isnt it a federal question? o Original complaint arose from contract law Plaintiff must allege federal issue Section 1331 o Limits the types of questions that can be brought in federal court Only if the plaintiff alleges it on the complaint o Court interprets this section, NOT the constitution If something is mandated by congress, it can be changed Notes o (1) Well pleaded complaint does the federal question have to appear in the plaintiffs complaint to make a valid cause of action? o (2) P had claim against D D has his own claim against P counterclaim D1 sues D2 who are both sued by P Cross claim Suit by a defendant by another defendant Holmes group case Constitution enables congress to change a rule in a case

Well pleaded complaint problems raised by declaratory judgments


Declaratory judgments allots rights to parties but no monetary damages o Basically before the shit hits the fan o Asking the court for advice before you undertake to do a particular thing o Hard to figure out whether its a federal question claim or not What is the thing that nobody is doing yet? Make believe the action is taken o Who is going to sue whom? What does that complaint look like? Whos the P and D? Is there a federal question in it?

Centrality of the issue of federal court


Think nesting dolls State law claim, where one of the claims involves the interpretation of a federal statute o Grable case Quiet title action seeks a declaration from the court to determine who is the owner of the property

Grable v. Darue 5 years later Grable brings quitclaim title action on the grounds that personal service was required not by mail o Grable says he still owns the property because the IRS didnt do service properly Complaint (nested within this state law claim is a federal claim centrality of issue!) o I am Grable, I Allege 1. Grable is the owner of the property 2. The IRS foreclosed on property because there was a tax lien 3. Service was given properly under 26 USC 6335 4. Resale is anullity and I own the property First paragraph o Action brought in state court and removed to federal court o Citizens are non-diverse o Statutory issue is whether section 6335, is if personal service was done properly Merrell Dow case o Whether Merrell violated federal misbranding o In state court because federal law didnt let you have personal suit State court claim was as negligence per se instead Draft complaint! (1) I am Thompson

(2) I bought a drug from Merrell Dow (3) Merrell Dow has duty to provide me with a safe drug (4) Merrell Dow breach duty by failing to label drug in violation of federal labeling law (5) I got hurt o Court said that there is no federal question jurisdiction (4) the embedded federal issue was a law that could not be sued in Pg. 227 congress had not provided a private federal cause of action for violation of the federal branding requirement, and the court found it would flout or at least undermine congressional intent to conclude that fed courts might nerveless exercise fed jurisdiction and provide remedies for violations of that federal statute solely because the violation o Merrell v Grable Merell would open the flood gates And undermine congressional legislation Grable issue would solve the issue with a one shot deal Pg. 228 Court points out that it would open the flood gates to a tremendous amount of cases Pg 229 o Court distinguish between Merrell and Grable Quiet title over federal issue rare instance Mislabeling of a drug Common **Look for the nesting egg in issues!** Notes o (4) Only congress can make the determination of who goes into federal court

Supplemental jurisdiction Plaintiff might have a couple of claims

Employment agreement w. employer and cant be fired without a good cause. Think youre getting fired because of your religion State law and federal claim If state law claim is sufficiently close to federal claim, state law claim can piggyback a federal claim

Removal jurisdiction **Read the relevant statute**

Read 28 USC ss 1441 o If defendant is from state where action is brought, cant remove o Pg 234 (1) a. No. Yes. (1) b. No 1446 (2)C (2)(a) Yes. He has 30 days. File notice of removal in federal court. The court can deny permit or remand action to state court (2) (b) Its the state he lives in. It makes sense because theres not gunna be a biased in the state he lives in.

For next class 2c. 3 4 Venue questions on page 246

Pg 235 2(c) 3(a) initial pleading (b) Notice of removal (c) Preponderance of evidence (d) 4(a) 1447(c) (b) Remanded 1447(c) (c) Federal question (d) common law breach of contract not federal question (e)

Some things about removal The relevant statutes 1441, 1446,1447 Who can remove o D only Must get consent of all Ds served Can you always remove if fed question? o Yes Can also remove if diverse? o No, if you P is citizen in state Time limit? o 30 days for the day of the action Does it apply to defendants late in the game? o 30 days from when they are made parties Must get unmemitity What happens if subject matter jurisdiction is created later? o If D is dropped from case maybe if can be removed P voluntarily drops D1 from case (includes settlement) Can remove to fed court D1 moves to dismiss claim and court grants motion to dismiss Cant remove Is there a limit on when you remove o Can remove within 1 year Exception is bad faith Can remove at any time Changing citizenship of the parties o Date of commence of the action Where do you remove? o The corresponding federal district court Venue rules do not apply in this situation Case was improperly removed? o Motion to remand 30 days o Lack of subject matter jurisdiction Forever and a day

Venue
Ven you pick the federal court o 94 district court Things to think about with federal court o SMJ

o Which district court I can bring the case in? Similar to PMJ o Similar policy where it needs some connection to defendant Ex. In SDNY o Can I exercise PMJ over D in NY? o Is venue proper in SDNY? Initial venue question o Relevant statute section 1391 Generally (b) 1 o Only for all D residing in the same state Can bring in any district in that state (b) 2 o Ex. Car accident o Under this claim, venue is in district of car accident (b) 3 o D1 NY, D2 NY, D3 NJ, Accident CT Can P bring action in VT if a def. is sub. to pass jurisdiction these? o This section is only if B1 and B2 cant be done HYPO changed, Accident Toronto Now (b) 3 lets us sue in VT How do you figure out residency? 1391 o Domicile c(1) Born or moved there with the intention of living there (SMJ rules) c(2) Corporation (not SMJ matters) Personal jurisdiction test (d) D doesnt like district P uses and changes it o Gives you a choice of which courts you can use

Pg 246 1. A. ss1391 (b1) EDNY, (b2) Maine B. No because Doug doesnt intend on staying in Vermont C. No, because just because you have pmj doesnt mean you have venue under (b1) and (b2) 3. A. In any place we have personal jurisdiction over the corporation - Goodyear case says general jurisdiction makes venue proper in Delaware, and western district of Michigan, Maine. Venue would only be proper in Tennessee and Georgia if they:

- Relatedness - Have activity in that jurisdiction 5 possible places under personal jurisdiction Where the corporation has its residence o Delaware and Michigan - Where the corporation is doing business o Tennessee and Georgia Cant get general jurisdiction not Inc. there or principal place of business See if theres specific jurisdiction Relatedness to case o i.e. defect was designed in one of those factories - Where substantial portion of the events o So Maine as well 3. B. Maybe (depends on relatedness). No. C. No. Yes. Two tricks for venue Dont go to b(3) if there are any states available unless b(1) and b(2) Figuring out the residence for venue, for a person its his domicile o For corporation personal jurisdiction Where its principal location and state of inc is definite The rest is part of specific jurisdiction

Bates case D did not engage in any business in NY (b)1 is no good Venue is where the substantial amount of event occurs o Event happened when letter was opened If ambiguity happens that is critical to Ps claim it satisfies B(2)

SS 1404 Transfer of Venue Where venue is right in one place and is changed to another place Up to the judge to decide basically Burger King Case o Rudiewitz has to go to Florida from Michigan Brennan says if Rudiewitz could make a motion to transfer under 1404

Brennan is a big proponent of letting district court judge to decide Only to other places where venue are proper Argument theres another court that has venue thats better

SS 1406 Cure or waiver of defects If filing is in wrong district, court can transfer it to appropriate place

Goldlawr Transfer Motion to dismiss based on o Court doesnt have PMJ o Venue is improper If court determines there is no jurisdiction and lack venue If court dismisses case, the person would have to go through the whole process again (lose a lot of time) Gives power to transfer case even if they lack proper venue and PMJ

Forum selection causes Even if provision in contract states a certain state to litigate in, a court is not required to follow the contacts wishes if the claim is filed in their state o Courts generally follow them

Piper case Where the action is originally brought? Superior court of California

Where was it transferred to? To fed Central district of California US district for the Middle District of Penn.

Why are the defendants trying to dismiss the case under forum non conveniens? Said an alternative and better forum existed in Scotland Respondent argued that its unfair bc Scottish law is less favorable (thrown out)

What are the standards to dismiss under the forum non conviens? Pg 259 combined two cases synethized rule o When alternative forum has jurisdiction to hear case plus

Chosen forum would establish oppressiveness and vexation to the defendant, out of all proportion to the plaintiffs convenience or when o chosen forum is inappropriate bc of considerations affecting courts own administrative and legal problems Standards o Alternative forum to hear case? o Private interests? o Public interests? o Can third parties be impleaded? o Is there a risk of inconsistent verdicts?

Who got it right? Trial or Appellate? Trial

What are private interests? Towards the litigants, where is the most appropriate forum? Relative ease of access to source of proof Availability of compulsory process for attendance of unwilling Cost of obtaining attendance of willing, witnesses Possibility of view of premises If view would be appropriate to the action All other practical problems that make trial of a case easy, expeditious and inexpensive

What are public interests? Bearing on the question included the administrative difficulties flowing from court congestion Local interest Having localized controversies decided at home The interest in having the trial of diversity case in a forum that is at home with the law that must govern the action The avoidance of unnecessary problems in conflict of laws Application of foreign law The unfairness of burdening citizens in an unrelated forum with jury duty

2/19/14 ss1441(a) If diversity or federal question can remove to fed. court of corresponding district ss1441(b)(2) removal based on diversity cannot be removed if D is citizen of that state ss1446(a) fed court of corresponding state court, need notice for removal, copy of process, pleadings, orders, motions, etc.

ss1446(b)(1) 30 days to remove Choice of law rules figure out the most logical law to try the case When changing venue, you take the choice of law of the area of the where the event occurred

Rule 12 Procedure that you undertake to bring a matter to the court Pleadings v. motions o Pleading Complaint and answer, maybe reply too Blueprint / outline for what the parties intend to prove at trial Between parties o Motions When you go to the judge (referee for relief) Request for an order Notice of motion o Tells other side whats going on Evidence that you need to convince judge (affidavit in support of motion) Memo of law in support of the motion o Discovery phase 12(b) motions o Grounds for motion in 12(b) Rule 12(a) o Time to serve an answer 12(b) o Every defense for a claim of relief for a cause of action o (b) when to raise defenses o (h) Waiver of certain defenses Cannot waive SMJ (1) if you make a 12(b) motion and you do not raise a defense in (2),(3) ,(4),(5) that ground is forever waived (easily waivable) If you choose not to use a 12(b) motion, you better put it in your answer or else its waived (2) Can be raised at any time (harder to waive) (3) can never be waived

2/24/14

Subject matter jurisdiction Step 1: Diversity or federal question? Or both? Step 2: Is there complete diversity between the parties? No duplicate states on either sides of the v. Are the parties completely diverse as the date of the commencement of the action? How do we consider the citizenship of a person? o Domicile Place you originally start/born How to change Physical relocation in the state with intent to stay o Even if temporarily located in state, as long as you plan on staying there Second home? Looks at taxes, voter registration, mailing address, etc. Corporation Place of incorporation Principle place of business / headquarters o 1331 federal question o 1332 diversity Executor of intestate of an estate intestate Minor/incompetent or guardian Minor / incompetent Class actions? Citizenship of class representative Assignee or collector? Assignees Diversity Amount in controversy o More than $75,000 o Equitable relief i.e. injunction? What is it worth to the plaintiff? How much will he be benefitted? How much is it gunna cost the defendant to comply? Over $75,000 = good o Aggregation rules Two plaintiffs cannot aggregate their claims against D Plaintiff suing two joint tortfeasors? Yes

Plaintiff can add up all of his claims against an defendant even if they arent related What if the defendant is B.S.ing him over the amount in controversy?

Federal question ss 1331 two rules to remember o well pleaded complaint rule (misnamed) What is the plaintiffs claim? What are the basic minimum allegations needed to set out his claim? o Did we mention a federal question statute or constitution? o Embedded federal issue Federal question hidden inside of a state law claim Step 1: is it embedded in the complaint? Step 2: Does this embedded issue bring up a substantial issue of federal law? Step 3: Does bringing this case into federal court override congress intent to prevent it from federal court? Merrel dow Grabble

Removal Defendant say this case could have been brought in a federal court 1441,1446, 1447 Defendant can only remove o Must get consent from all defendants served Can you always remove if theres a federal question? o Yes generally Can you always remove if theres diversity o No. When D is domiciled there Time limit 30 days How do we figure it out if its removal o Soon as we know its removal 30 days 30 days from the day a plaintiff is added 30 days from the day a defendant is added Needs consent of everyone Is the removal of a defendant o If the plaintiff voluntarily leaves a defendant out, than theres diversity 1446(b) diversity theres a one year cut off

o You cant remove for diversity created a year after the lawsuit begins o Exception if one year delay is caused by plaintiffs bad faith If one of the parties moves = does not make it removable o Starts at the date of the commencement Where do you remove to? o The federal district court of the location of the state court What happens is the plaintiff thinks it was removed improperly? o 1447 30 day limit if defective is other than subject matter jurisdiction Unless its SMJ than removable anytime!

Venue ven you chose the court ss 1391 o distinct in any state o substantial amount of events o where any defendant resides only if the others arent present defendants are all in different states and claim is outside of US Residence of a defendant o Person Domicile o Corporation Where that corporation would be subject to personal jurisdiction Ss 1404 transfer of venue o Venue is proper where brought but we think there is a more convenient venue available ss 1406 o Venue is not proper aka transfer to the right place Goldlawr transfer How to choice of law rules effect venue?

Question 1 Corporation do you sue person in charge or corporation? Sole proprietorship considered as people

Question 2 If someone brings the product into a state no purposeful availment Stream of commerce ends at the last sale

Question 3

Venue X brings case in Y, and Z says for inproper venue? o 1406 X brings case in Y, and Z says non confiems o 1404

12(b) motion how to present defenses Assert grounds (2), (3),(4) AND (5) Lack of a necessary party o Person should be there but cant get him so need to dismiss o Failure to cause an action Timing Or can be in an answer or amended answer that you can amend as a right

Collateral and direct attacks on personal jurisdiction Collateral o Ignore process from the jurisdiction and enforce rights after plaintiff attempts to enforce judgment in a binding jurisdiction Not entitled to full faith and credit bc X didnt have jurisdiction on you 14th amendment o Only allows you to raise issue on jurisdiction Default judgment prevents you from raising any other defenses Loses ability to contest on the merits but still have the chance to challenge the jurisdiction o If you win, most likely will drop the claim Bc you would have to re-litigate in a distant forum Direct attack o Make an appearance in the jurisdiction and fight jurisdiction o Cons Need to find a licensed attorney in that jurisdiction If you lose on jurisdiction, need to litigate whole trial before appealing jurisdiction Who is more likely to hold that there is no jurisdiction in X? X or Y?

What if you do a direct attack and that court says they have jurisdiction, can you just leave? No

But you can still transfer

Baldwin case D doesnt think there is jurisdiction in Missouri and goes home o Federal district thinks they do rendered judgment o P goes to enforce in Iowa D claims collateral attack disputing decision of first court P claims judgment is already rendered o Federal question res judicata + 14th amendment issue Res judicata the court has already decided

Challenging federal SMJ


Generally move to dismiss SMJ under rule 12(b)(1) P challenging jurisdiction of removed case? 28 USC 1447(c) So important that it can be raised at any time and if true, case must be dismissed o Leads to potential bad faith by holding information back Does not work with collateral attacks o Only in limited instances such as bankruptcy Once the case is over, you cant collaterally attack on SMJ o All appeals exhausted and basically nothing left

Pleadings
Motion request for an order from the court What needs to be in a pleading? o Look at rule 7(a) Complaint Rule 8(a) o Needs basis of SMJ o Statement of the claim Elements Statute, form on westlaw, PJI Claim for relief at the end Answer Reply

Counterclaim Cross claim Third party claim Plaintiff sues Defendant and D brings in a joint tortfeasor Lawsuit within a lawsuit

2/26/14 Pleadings Answer o Each number sentence (allegation) in a complaint must be addressed Can respond 3 ways in answer Admit Deny DKI Deny knowledge or information o Assert defenses Reasons why you dont think youre liable for ___, other than allegations in complaint Statute of frauds, statute of limitations, etc. Things that would normally surprise a P We put in the answer so it doesnt surprise P Federal rules 8c o Affirmative defenses o Assert counterclaims against Plaintiff Point of pleading o First threshold P has to do to start the lawsuit o Once good Discovery phase Discovery phase Defendant bears the brunt o Depositions o interrogatories o Notice to produce documents / production of documents o Physical and mental exams o Admissions

Twombly case 12(b) motion What was missing, the P must prove they agreed not to compete Federal rule 8(a)

Issue whether the allegation made on pg 299 satisfies the requirement of fed rule 8a of a short and plain statement of the claim showing that the pleader is entitled to relief? Holding: motion dismissed Rationale: o Conclusory allegation is not enough, need some factual statements to fulfill claim RULE: Strip out all legal conclusions, just facts. Then see if the facts are there to show culpability Dissent o Idea of pleading rules is to keep parties in the court system

Iqbal Case Needs to prove that AG and FBI director just tossed him into jail because hes an Arab Muslim o Facts Thrown in jail Confined on account of race and religion AG and FBI responsible bc they adopted these policies o More people in this case as opposed to Twombly Court still throws out complaint o More plausible reason To protect Americans Souter dissents o Twombly is not the same Pg 307 two working principles

Twombal reasoning Court is concerned with the expensive discovery and settlements Against it People want their day in court o People dont always have the means to get access to certain information

Swanson case Suit for discrimination due to the fact that the appraisal company conspired with bank to lower the value of homes Go forward and proceed with the case Point of court to weed out ridiculous cases Dissent o Posner gives great way to defend an allegation

Leathermen 1993 Case brought against officials 1983 action against municipality against what employees did o Municipality is not going to be liable unless a municipal policy or custom caused the constitutional injury Heightened pleading standard general allegations no bueno, we want more facts if you want to sue a municipality Fed rule 9(b) o Means we want more facts than whats required

Pg 324 Pleading inconsistent facts and alternative theories Allowed to plead inconsistent facts and alternative theories Cites McCormick case o Sues for death of her husband o Allege husband was drunk and causes the accident Wife denies him being drunk But if he was drunk, bar owner should bear liability Shes allowed to do this because she doesnt really know

Defendants options in response 2 choices in responding to a complaint o Motion 12(a) and 12(b) 12(b) before answer bc 12(b) is motion to dismiss Changes answer timing 12(a)(4) o Complaint

Pg330 The answer Admissions Denials DKI Afffirmative defenses

Pg 333 notes 1. a. Actual reason 8(c) so it doesnt surprise plaintiff b. Motion to strike the defense 3. Failure to state a claim bc the particular K has to be in writing

Claims by the defendant -

3/10/14 Practice exam on Wednesday One hour PMJ, SMJ, Venue M/C and an essay

Voluntary dismissal Plaintiff voluntarily dismisses his case Settlement, doesnt like lawyer, etc. Rule 41 dismissal of actions o (a)(1)(A)(i) voluntary just fill out form and serve it (P wants out) o Involuntary dismissal w/ prejudice (D wants out)

W/o prejudice you have a right to bring back trial Opposite W/ prejudice (adjudication on the merits)

Default judgment Rule 55 Defendant doesnt appear or serve an answer 1st step entry of default o Notation that you failed to respond (rule 55a)

2nd step getting entry of default turned into a default judgment o Motion to the judge Clerk or court can enter judgment (1) Clerk can do it (2) Court does it

A dismissal on the lack of SMJ or PMJ is not based on the merits Res Judicata/claim preclusion Applies to claims you should have raised as well

Amended pleadings Rule 15 Pleadings complaint and answer Amend complaint Plaintiff got it wrong and is changing it a little bit o May want to add some claims o May want to beef up some of the allegations Amend answer Defendant forgot something o Add an affirmative defense Pleadings before are important be they are meant to prepare us what to expect at trial Amendment as a matter as course o Amendment with motion for acceptance by court

Motion request for an order Movant person making motion Nonmovant person not making motion First document Notice of motion o Date o Ground Second document evidence in support of motion o Affidavits, deposition, interrogatories How about getting a letter? o An exhibit Third document o Memorandum of law Once movant serves papers, nonmovant serves answer of motion o Serves His evidence in opposition to the motion Memo in opposition to the motion

Pg 337 read rule 15(a)

1. A. Yes because the answer was served under 21 days B. Yes, motion is responsive C. Yes bc its within 21 days 15(a)(1) - Is a the answer required? Rule 7 only if court says so D. Amend it unless there prejudice E. May 24th

15(b) Plaintiff suddenly starts bring in other claims or information Objection not within the Very liberal not a big deal

15(c) If claim Y arises from the same set of facts as claim X and claim Y would have been timely if served in original complaint, then we are going to allow plaintiff to assert claim Y (C) if you serve correctly but name is wrong

Marsh v. Coleman Company Marsh wants to allege a fraud claim bc the company misled him Issue: Can the fraud claim be time barred if it would have been in the original complaint? Court says no because claim was time barred before the claim was made Judge in this case has a very strict idea for relation back If judge was more liberal, would probably allow relation back

Rector Sold stock from one bank to another bank o Felt he was swindled and sue for billions Amended complaint for infinite amount Rule 11 When we sign a piece of paper, we are certifying we are honest and profession o When signing, you are saying that the arguing on good faith and its not a frivolous claim

Rule 11 motion for sanctions o Serve that motion to opposition If now answered or corrected in 21 days, submit the motion to the court o In rectors situation, he waived right for motion by not raising motion

ERIE DOCTRINE Diversity action in federal court Common law claim with no statutory basis For common law claims before Erie, on a diversity actions, the federal courts would disregard state law and make their own federal common law Supreme Court stops federal judges from making common law o Rules of decisions act Federal courts should use the law of the state o Federalism Federal government has limited powers, and doesnt have the power to govern negligence actions, etc. o We can apply the laws of the state, but we can still use federal procedure rules Law State substantive law Procedure Federal civil procedure In a diversity action in federal court

Hanna rule In a diversity action in a federal court, the fed ct does not have to apply a sub rule, even if its outcome determinative, if that rule conflicts with a rule of federal procedure.

11/17/14

Principles we need to get down to understand ERIE o Congress has limited powers on what it could do Constitution article 1, section 8 (enumerated powers) How about civil rights act? Not under section 8 Congress went under commerce clause Congress has to have the power in order to pass legislature o State legislatures have power to legislate in almost any field

If a federal law is valid (congress legislates and is enumerated) than that law takes priority over any conflicting state law This is because of the supremacy clause article 6, clause 2

What law is applied in federal courts? o Step 1 look at the rules and decision act ( 28 USC 1652) Unless there is a provision of the constitution or a federal statute that controls, the federal courts should apply state law For diversity cases

Swift v Tyson (preceded Erie) o Decided in 1842 interpreted the rules and decision act o Question was whether state common law decisions were law within the meaning of the rules and decisions act o If its a common law matter, they didnt have to follow it o Diversity action, claim is common law negligence claim, they applied federal common law of negligence No federal law for negligence courts would make it up o Exception Some state common law matters known as local matters and these were laws thats were very particular to that state o Take away from this case If you have a claim arising out of a federal statute or constitution federal claim federal law applies Diversity claim arises from state statute, court applies state statute Diversity action arises from common law claim, court applies its own version of common law unless the common law is a local common law (very particular to the area) o You can argue that the rule of swift is inconsistent with the idea of a federal government of limited powers bc under swift the federal courts are making law in areas in where congress wouldnt be able to make law

ERIE case o Conflict of laws issue every state has conflict of law principles, it tells the court which state law to apply o LC determines that this is a question of state common law, disregards it and gives $30,000 to plaintiff Defendant tries to argue that this is a local common law claim penn law applies Fed court says its general law

Comes up to supreme court they overrule swift v Tyson Rule: Diversity case state law Question arises where state procedural rules need to be applied in federal court? State rule on burden of proof will be applied in a federal diversity action or else it would result in forum shopping State rule says the answer had to be answered in 14 days and federal rule is 21 days. D answers on day 18. P moves for default judgment Procedural thing doesnt promote forum shopping Pg 548 549 o Guaranty Trust Co. v York Should state statute of limitation should apply? Yes Outcome determinative test Not applying the state rule will change the outcome of the case If its X happens in one court, and Y happens in another court, the result would be forum shopping o If we applied the federal rule of latches in this proceeding, P would be able to bring his lawsuit o If we apply state SOL, P will lose o Ragan v. Merchants Filed in fed court on Monday Claim expires on Tuesdays Serves defendant on Wednesday Fed rule says action commenced when its filed State rule says action commence when D is served D moves to dismiss outside of SOL Court makes this outcome determinative problem Everything is outcome determinative! o o o Blue ridge case o Workers comp issue o SC corp wants Byrd to be considered statutory employee so hes under workers comp o Byrd independent contractor and wants to be that way to recover outside of workers comp o This is what SC does to determine In SC the issue of whether a plaintiff is a statutory employee or contractor is determined by the judge not by the jury o State rule that this issue is determined by the judge and not the judge Look at Erie o What brennan does is what we are going to do for erie issues 2 categories (pg 551) Substance state created rights and obligations

o o

o We must apply the state rule, its required by the constitution Bound up in substance o If policy is not intimately related to statute, its not bound up in substance o We must apply the state rule, its required by the constitution Form and mode Procedural / outcome determinative o If its procedural and outcome determinative we should apply unless there is a countervailing federal interest Form and mode not outcome determinative o Of course not! Let the jury decide Ask yourself Substance or bound up in substance? state rule in federal court bc constitution demands it Form in mode is it outcome determinative? Countervailing federal interest? Like: Forum shopping v. jury determining

In Hanna o State rule that executor of an estate has to be served personally in a certain way o Fed rule says differently o In fed diversity action, executor served with fed rule and not state, SOL runs out o New rule: If congress makes a federal rule and it conflicts with state rule, the state rule is preempted

3/19/14 Jist of Erie substance state common law important and feds cant make it up Basis of Erie Limits on fed. authority in constitution (Art 1, sec 8) Tenth amendment Rules of decision o In diversity cases apply the law of the states

Court has to grapple with question of state procedural rules o Guaranty trust case Outcome determinate

Type of state rule that looks procedure but changes case / forum shopping / bound in substance so have to hear Ragan case Service rule: state v fed State rule wins Cohen v. beneficial Federal rule for when you can bring a shareholders derivative action State rule bring shareholder action, representative has to carry a bond Prevent frivolous suits Fed rule doesnt mentioned bond requirement Court brings in state rule Byrd case Brennan whether a state custom from case law that judges would decide particular issue of fact would apply in federal diversity action Fact being whether an independent contractor was an independent contractor under SC law Is it substantive or bound up in substance? Bound up in substance o SOL o Burden of proof o Choice/conflict of law principles Procedural (form in mode) rule? Is it outcome determinative? Yes Should probably bring it in unless federal countervailing interest No? Dont bring it in Custom of law in SC wasnt substantive or bound up in substance Proceduralis it outcome determinative? o Pretends it was but countervailing federal interest (forum shopping) overrides procedure o Not outcome determinative in a full sense Jury only has so much power Judge can override it

Hanna case o Service of process rule State rule: Sue an executor, have to serve personally Fed served differently o D serves P to fed court Doing that SOL expired within state law In fed courts it would be okay o Is it outcome determinative? Yes

o o

o o o

State rule P wins Fed rule D wins Have to bring in state rule LC and appellate affirm this How do we know if a rule is valid? Pg 557 (2 step process) Can congress make these federal rules of procedural? (do they have the power) Art 1, sec 8, cl 9 & 18 Does it fall in the delegated authority? supreme court rules enabling act Cant infringe on state law Start talking about the purpose of Erie Purpose is to reduce forum shopping not outcome determinative Modified outcome determinative test pg 559 Have to look at the outcome before the case commences to see if the outcome will send plaintiffs flocking to fed court Ex ante effect (before the event) Generally speaking is it outcome determinative? Serving an executor at his house is not going to be outcome determinative generally speaking If feds are satisfied that the fed rule is valid, we dont care about state rule because federal law trumps state law. Pg 560 Erie says fed courts cannot make up law If it looks and sort of smells like procedure, its probably valid Test for Hanna Look at state rule and compare to fed rule Ask: is there a conflict between state and fed rule? If theres a conflict look at federal rule itself Is it valid? o Congress has a power to do it? o Supreme court enacted the rule within the authority granted to it by the rules enabling act Whether this rule is rationally classifiable as procedure If yes, its probably valid If everything passes, federal rule applies The real question after Hanna is to figure out whether there is a conflict between the federal rule of civ pro and the competing state rule

Shady grove case summarizes everything you need to know about Erie o Scalia concludes that there is a conflict applies federal rule o Ginsburg concludes no conflict Erie analysis Facts

o o

2 competing rules Fed rule 23 when you can bring a class action State rule CPLR 901b All requirement exactly the same Legislature copied rule 23 verbatim o Added additional wording If theres a statute that says if you dont receive insurance benefits in time, you received the money plus interest and penalty o Class action statute for NY says you cant recover and fed statute doesnt say anything about it Test Conflict between state and fed? o Scalia says yes Both laws looking to classify what acts as a class o Ginsburg says no Should try to reconcile fed and state competing claims No conflict, just an extra requirement Do an Erie analysis o She says its bound up in substance Is the federal rule valid? o Scalia says yes brings in federal rule Scalia Hanna analysis Dissent Bc she doesnt find any conflict Erie Analysis

3/24/14 Erie/Hanna analysis We are in SDNY P NYer , D NJer Diversity action Choice of law NY common law bc it happened there Rules of decision act 16 USC 1652 o Fed courts gotta use law of the states Policy prevent forum shopping / unfair administration of justice Something I bound up in substance if it has a substantive aim, if it exists to influence substantive outcome

Purpose of the legislature in an Erie analysis bound of substance

Form in mode rules o Anything thats not substance or bound up in substance o Apply in federal law proceeding when its outcome determinative Erie rules of decision act question Hanna rules enabling act question

Shady Grove Justice Scalia o Says theres a conflict Hanna analysis federal rule o Acknowledges concurrent opinion but its too hard to administer Justice Ginsburg o No conflict Erie analysis Outcome determinative Forum shopping o State rule applies Justice Stevens o Wants to change Hanna and add a third step Is the federal rule and state rule on point? Is the federal rule valid? (in sense that it covers procedure) Does the rule as applied in this particular case abridge, enlarge, or modify a substantive right?

Chapter 8 Discovery Ways of getting information from people under the federal rules Trying to get evidence together on off chance that theres a trial Rule 26 o Initial disclosure In fed court system, parties are required to hand over certain/basic things before discovery starts Name, address, phone numbers of people to likely to have information Copy of documents / electronically stored information Computation of damages o Events that precede the judges issuance of a scheduling order Scheduling order Judge outlines how the discovery is going to be done 1. Complaint is served 2. A defendant appears 3. Rule 26F conference Parties get together to form a discovery plan

4. 26F report Parties have to submit a written report to the court outlining their discovery plan Due two weeks after 26F conference 5. Make initial disclosures Due two weeks after 26F conference 6. Judge may order a scheduling conference 7. Judge issues a scheduling order Required under rule 16B o Disclosure of expert testimony 26A2 Two kinds of experts Testifying experts o We have to give detailed information as to the expert himself, what info hes using and what hes gonna do Nontestifying experts o Dont have to give it over to other side Considered work product o Pretrial disclosures 26A3 30 days before trial, you need to give info about what you plan to do at the trial o Whos your witnesses o What evidence Once that pretrial is written, your sort of stuck with it Discovery devices o Depositions sort of like witnesses testifying just no judge Different than all other discovery devices because you can dispose all parties Witnesses, etc o Interrogatories List of questions that you serve to the other party They have to send back written answered Signed by the client Sworn testimony o Production of documents Cant be too open ended o Notices of admission When you believe that the matter should not really be contested i.e. K in a contracts case If other party doesnt answer and court finds he should have, sanctions o Physical / mental exams Need court order

What is it that were actual allowed to look / ask for o Prove the information is relevant to the claim or defense o The other side may argue that even though its relevant, is burdensome and is too much work Whether its unduly cumulative o Resist disclosing it if its privileged See evidence class o It also may be protected work product Rule 26(B)(3) Work prepared by a party in anticipation of litigation o If you feel the other side is requesting information that hes not entitled to, he is going to move for a protective order under rule 26C o If other side resists to disclosing you believe you need, you can make a motion to compel Notice o What is relevant? Has to relevant to the subject matter of the action I.e. IIED claim o Deposition start to ask questions about false imprisonment No good, not necessary / irrelevant information for IIED claim Can you ask about net worth for damages? o Generally no except for punitive damages Evidence need not be admissible at trial to be relevant May help determine other relevant and admissible information

United oil case United to trying to get some info from R and H and Parts Uniteds claim is under failure to warn (products liability) A party has to so some showing of proof to need evidence, then burden shifts over to the other side Court says that all claims that relates to liver damage could be brought in Two different standards here o Discovery phase v. trial phase Have to prove burdensome by formal affidavit, etc. Contention interrogories allowed Take away o How discovery actually works in practice Relevance Burden of proof in est Difference of standards in relevance between case and discovery

Courts power with discovery and limitations on discovery

Zubulake v. UBS Warburg LLC Lawyers have an obligation like clients to preserve information Litigation hold o DONT GET RID OF ANYTHING! o Lawyer must take active steps to hold on to information Clients have an obligation to preserve that data Lawyers didnt o Ask for information from a key employee o Didnt figure out where a key employee stored her old email o Didnt take steps to preserve backup tapes Lawyers obligation starts at the beginning of the case (filing) First thing Lawyer should do litigation hold Zubulake looks for backup tapes bc the emails looked like they had previous emails to them o UBS says too burdensome! Court says you caused the problem your fault Spoliation o Destroying evidence has adverse consequences Elements on pg 380 Outlines what attorney needs to do o Monitor compliance o Locate relevant information o Duty to ensure preservation Discovery is at the judges discretion

Work product Rule 26 trial prep (pg 44) o Issue Is it actually work product? o Issue If other side shows it need substantial need for it

After hickman v. taylor there is a review problem on pg 415 416 Have answers! Dont read 416 on

3/31/14 Overview Depositions o Can depose non party o Medical examinations have to be an order by the court o How do you get a document from a non-party? Subpoena duces tecum Scheduling order Pretrial disclosures How do we figure out if something is discoverable? o Is it relevant? Look to united oil case Something that is going to lead to evidence at trial Judges decide, only appealable at abuse of power Just because its discoverable doesnt mean its admissible Standard for relevance rule 26(B)(1) o Even if its relevant, it might be burdensome More trouble than its worth Judge would necessary Say yes or no, but slice and dice it o Privilege Evidence class o Resist on the grounds that its work product Rule 26 B(3)A If somebody creates a something for you in anticipation of litigation, you dont have to hand it over o Work product protects the document, not the information in the document So you dont have to disclose facts if inquired about it, but dont have to hand over the documents Hickman v. Taylor What happened in Hickman o Tug boat sank while towing a railroad car float o 5 people drowned and tug boat owners hired lawyer o Lawyer interviewed people privately and wrote up statements o Plaintiff, trying to get information suing the tug boats, wants copies of all statements, interviews or oral statements o Tug owners answered all interog. Except #38 Tug boat No, its work product What does the Supreme Court say? o Falls outside of attorney client privilege

Plaintiff made procedural mistake Plaintiff could of gotten the information himself As a matter of policy, attorney show not have to show his mind and how he working on a trial o General rule Work product is generally not disclosable Unless there is a substantial need for that information and you cannot get it otherwise For the test o Is it work product? o Is it exempt from work?

o o o

Work product o The rule protects material prepared in anticipation of litigation Litigation does not have to start Cant be done in course of business So if its a routinely done thing, its not in anticipation of litigation o The rule protects against disclosure of the documents o The rule also protects against asking questions of the documents o Rule 26 It only applies to written materials What if the situation Attorney asked witness about accident and attorney didnt write it down? And you ask for oral recollection? o No its work product Does not protect from information learned in discovery process Client cant refuse to disclose it because his lawyer learned about it through trial prep o Doesnt protect names of witnesses o You can overcome the work product rule if you have substantial need and you are unable without undue hardship to obtain a substantial equivalent of the material by other means Ex Witness dead Ex Witness moved to Tahiti o When considering what work product is needed to disclose Factual work product Ex. Actual facts aka like interview questions and answers Opinioned work product When the statement written by attorney contains his conclusions, opinions, and mental thoughts o Work product is not limited to stuff generated by lawyers It can be done by client, accountant, investigator, etc. Any agent of the party

Regardless of work product rule, anybody can get ahold of their own statement

Pg 415 problem 1. a. b. c. d. e. f. g. h. i. Not dis closable work product Work product but may need Substantial need for it *Sold* wasnt prepared by them Work product Work product Cant resist All notes and memos Probably work product unless can establish substantial need Can get that No cant get a Summary of what was said

Summary judgment Its a trial on paper We can submit evidence to the judge if its in the form of paper o Sworn papers One side is saying look at all of this documentary evidence, if you look at everything, youll say theres no way that any jury is going to do anything except find it in my favor No triable issue of fact Easier for defendant to get summary judgment o Just have to show one little hole in case Plaintiff has to prove everything Defendant proving his case o Notice of motion o Affidavit in support of motion o Copies of transcripts o Interrogatories o Attach documents exhibits o Plaintiff would have to respond and only has to show that there is a triable issue of fact

4/2/14 Judge sort of just says get rid of this case o 2 ways Insufficient evidence to support the parties claim Evidence is so overwhelming, that the judge can grant in favor of the claimant as a matter of law Matter of law judge makes decision instead of jury Court routinely allow for a party to move for summary judgment on the grounds of judgment is a complete bar/defense to claim Plaintiff can move to dismiss a defense as a matter of law Make a motion for summary judgment Summary judgment is not an all or nothing thing o Can remove the frivolous claims o Cleans out the case Summary judgment deprives right of jury trial o When youre entitled to a jury trial Is there a right to a jury trial in a civil action? Sometimes, if it falls within the scope of 7th amendment o Right of trial by jury is preserved? Would you be entitled to a jury trial if it were in 1791? Time amendment was enacted Suits at law v. suits in equity o Law damages, etc Jury o Equity injunction or equitable relief No jury generally Trial with more than one claim, one claim in equity other in law, still jury? Yes, jury case first Rest made by judge after o Basically not entitle to a jury trial in every issue Rule 38 right of jury trial can be waived o Must make demand for jury trial in federal case 2 motions that come up in jury trials o Motion for judgment as a matter of law Directed verdict Rule 50 Part (a) No evidence to support one or more elements of the claim Defense can be dismissed the same way Defendant makes motion after Plaintiff gives his case o Renewed motion for judgment as a matter of law Judgment notwithstanding the verdict (JNOV)

Rule 50 Part (c) Rule 56 summary judgment o No genuine dispute as to any material fact and movant is entitled to summary judgment as a matter of law o Everything is based on sworn testimony o Everything in the affidavits have to be firsthand knowledge o When you make a motion for summary judgment, you will also hand in a memorandum of law Its an evidentiary It outlines for the judge, facts of the case, etc Memo of law Make sure you cite exactly where you found that fact o Things to talk about in rule 56 Either side can move for summary judgment Plaintiff can move for summary judgment to dismiss a defense Defendant can move for summary judgment dismissing a claim, based on his defense P has sued D for slander, but it was a privilege communication. Defense of privilege has been fulfilled Even if the court is unable to grant full summary judgment, it can grant partial It can grant judgment on liability, but let the issue of damages go to trial Makes a listing of facts that are deemed determined to get some facts away from the jury The party making the motion, has the burden of coming forward with some evidence to support his position Movants initial burden of production Although in most instances we submit affidavits in motion to support summary judgment, it is not actually needed, Depositions, answers to interrogatories, etc Once the moving party meets his initial burden of production, the other side has to come forward and do one of two things Come back with some evidence to show the claim/case is not actually open and shut o Issue of important fact Explain to the court that he doesnt have enough evidence yet o Motion is premature Questions 489 o (A) (i) Denied, triable issue of fact Complaints are not usually sworn testimony (ii) Denied

(B) (i) Denied, the jury decides issues of credibility (ii) Denied, issue of fact Circumstantial evidence, for which the jury might be able to infer Circumstantial evidence is good to defeat summary judgment

(C)

Anderson v. liberty lobby P is suing newspaper bc newspaper called them Nazis. (defamation) NYT case actual malice by clear and convincing evidence D moves for summary judgment for not proving actual malice Pg 490 actual malice absent as a matter of law + affidavits No reasonable jury would be capable of finding for the claim youre trying to dismiss Whether the clear and convincing standard should be part of the judges decision for summary judgment? o Holding Yes Has to be a material fact at issue The burden of proof for summary judgment should be the same as the burden of proof for the trial o Basically still what the judge feels Dissent its just a question of credibility and not practical Note on pg 498 499 o Burden goes up, evidence needed goes up

Coble v. City of White House Same as Wal-Mart o A reasonable jury would make this an issue of fact Cites the Scott case o You cant explain away what happened in the Scott case because there was a videotape

Preclusion Generally weve been through this already we cant do it again Two kinds o Claim preclusion if you assert a claim once, you cant do it again. If you assert a claim based on a set of facts, you cant come back and assert other claims afterwards

Should have made the claim with the other ones Carter v. Hinkle The claim in the first action, have to be the same people involved in the second action Validity Finality AKA res judicata Trying to dispose a claim Issue preclusion Generally I know we have to go to trial and we have an argument, etc. but we have an issue in this case that was resolved in a previous case and I dont want to reargue it again Taking facts away from the jury Issue was essential to the judgment Likes to test issue preclusion Personal jurisdiction, Erie, issue preclusion on the test

4/7/14 Claim preclusion If I bring a claim in lawsuit 1, and later seek to bring a related claim in lawsuit 2, I would be precluded from doing so if: o The claim in lawsuit 2, is the same claim as the claim in lawsuit 1 o The parties in lawsuit 1 and lawsuit 2 are the same or in privity Example P1 is a passenger in a bus and sues for his injuries and later dies. P2 is the executors of Ps estate. He sues for property damages in Ps estate. P1 and P2 are in privity. So P2 is subject to claim preclusion of P1. o Lawsuit 1 must have ended in a final judgment on the merits P sues D in LS1. D moves to dismiss for lack of PJ/SMJ. The court dismisses the claim. P brings the exact same claim against D in another jurisdiction. Can P do it? Yes bc the first case didnt end with a final judgment on the merits Whenever P wins LS1, it is on the merits If the jury brings it back to P on merits Summary judgment by judge to P on the merits Default judgment to P on the merits

Carter v. Hinkle Issue Same claim what do we mean when we use same claim?

Minority view can bring two separate claims Majority view bring it all in one case (one cause of action) o Prevents crowding in the court

Notes Transactional or concurrence test Sameness of evidence test

The test that Ruescher wants you to know 7. i. Primary rights 3 Wrongful act 1 Transactional occurrence 1 time ii. Primary rights 3 Wrongful right 1 Transactional 1 Note 6 ss24(1) Transactional

Pg 622 read the contract part! If you bring a contract claim o Series of connected transactions

Issue preclusion Judicial inefficiency? Probably not. LS1: Hinkle v. Carter Property damages o One issue decided is carter negligent? LS2: Hinkle v. Carter Personal injury o Negligence will already be decided o Basically just for damages

Pg 623 Parties or person in privity Privity reflects a relationship that prevents one party from bringing a claim due to the relationship with someone else o You are in privity with someone who represented you in a prior LS Fiduciary guardian, trustee, etc. o Successors in interest Successive landowners, assignees They are succeeding in the parties interest Notes and Questions pg 624 o 1. (a) P-2 is a successor. Therefore in privity and D still has right of way. If we didnt do this, D would have to relititgate o (b) If the court does it wrong, too bad so sad. If we allowed it D would have to relititgate

Configuration of the parties P and D get into accident. P sues D for injuries in accident and wins. Now D decides to sue P for his injuries in the accident. Is it the same party? No Claim preclusion only prevents you from bringing a claim you already made previously o D didnt bring up a claim the first time Under principles of claim preclusion o Compulsory counterclaim rule may bar him o Rule 13(a)(1) Think bow and arrow rule o Once you shoot one arrow at the D, you have to shoot all of them, and vice versa

Valid, Final judgment, on the merits Valid the court had subject matter and personal jurisdiction What if court didnt have PJ but is wasnt raised its waived and its valid

Final judgment Final resolution of the lawsuit After judgment is rendered, you have the ability to appeal to the intermediate appellate court o Takes foreverrr to appeal Does a judgment becomes final at a trial court level or the appellate?

Federal court says trial level

On the Merits Judgment based on the underlying dispute, question of who did what If P wins, its on the merits If D wins its on the merits if its anything other than o PJ o SMJ o Lack of venue o Non joinder of a necessary party

Exceptions to the operation of claim preclusion Example if you find out years later about an injury from an accident

Issue preclusion We use this to prevent relitigation of certain issues in lawsuit 2 o Party who doesnt want to relitigate the issue asserts issue preclusion Asserted against party that wants to lititgate the issue Elements o The issue was fully litigated and determined in the first lawsuit Default judgment No issue preclusion bc nothing was litigated o The issue was necessarily determined in the lawsuit It was essential to the judgment Negate the statement/issue, if the outcome of the case is the same, its not essential Example: P sues D in a contrib neg. jurisdiction as a complete defense Jury finds D was negligent but P was contributory negligent Verdict D wins o The issue was decided in a lawsuit where there was a valid, final judgment on the merits o Preclusion must be asserted against somebody who was a party, or in privity with the party, in lawsuit 1 o Preclusion must be asserted by either: (a) a party in the prior lawsuit; (b) Someone who was not a party in the prior lawsuit, if the party asserting it defensively; or (c) Someone who is asserting it offensively under the limited circumstance set out in the parklane case (they allow offensive use) Two HYPOs

BAD GYM o I go to a gym and sign a K. small letters, if I dont pay on time they can cancel my K and collect balance of the membership Lawsuit GYM sues ruescher Court throws it out bc small print and unconscable Now Julia has same problem Julia wants issue preclusion Makes sense to use issue preclusion as a shield for liability defensively BUS PASSENGER HYPO o NSNB Co gets into a bus accident / driver is negligent. 100 passengers. P1 sues the bus co. Bus company wins P2 v. bus co. Bus company wins P3 80 v. Bus co. Bus company wins P81 v. Bus Co. P81 wins P82 v. Bus Co. P82 wins bc of issue preclusion o Using issue preclusion offensively to get money Sally and Joe Hypothetical on the exam

Cromwell v. County of Sac o When is an issue litigated and determined? o The county issued 5 bonds to build a courthouse ended up being illegal bonds (sort of to pay off a bribe) o For bonds 1 4, the court says the bonds were issued illegally o 5th bond issued, court says differently because hes a holder in due course o If a bond is issued to a holder and its subjected to fraud A holder in due subject of the bond is not subject to fraud If we didnt do that, nobody would buy bonds

4/9/14 Cromwell v. County of Sac Issuance of bonds Guy helping Cromwell brings up action on 4 of 5 bonds and tries to get recovery on bonds (brought coupons with him) o Court says bonds were void bc they were fraudulent Cromwell brings up another action on other bonds/coupons County says Cromwell should already lose because all the evidence was the same

Cromwell says hes a good faith purchaser for value (holder in due course) o Court can enforce the bond even if its fraudulent o Court says this can be raised because this issue wasnt raised in the previous cases Pg 633 in considering the operation Have to fight it out to see if issue preclusion is going to apply Pg 637 Sally and Joe HYPOS **important** o (a) (1) Yes o (a) (2) Precluded from bringing up b/c they found joe negligent in the 1st case o (b) (1) No o (b) (2) No o (c) (1) No o (c) (2) Yes o (d) (1) Yes o (d) (2) Yes o (d) is the same as (a)

Rios v. Davis Popular dry goods is the truck driven by Rios Gets into accident w/ accident driving by Davis First case PDG sues Davis o Davis impleads Rios as third party defendant o Rule 14 Bring in a third party to a law suit claim over If someone is liability for anything involved in the suit, can be brought in o Jury finds that everyone is negligent, sends everyone home This suit, Rios sues Davis o This is NOT issue preclusion because Rios didnt bring in Davis in the first case o If you change the finding of Rios first case (say he was not negligent) the outcome of the case wouldnt change. It wasnt essential to the first case outcome Sally Joe question on the test o Ask about issue preclusion o Ruescher will bury a SMJ issue in the facts Notes pg 641 o (7) (f) (1) No o (7) (f) (2) No o Neither are essential Aka alternative determinations o Courts are up in the air on how to decide

Against whom can issue preclusion be asserted? People/parties that was o In privity with a litigant o A party in the first case

Pg 651 Bernhard v. Bank of America Married couple lived with elderly woman o Couple wrote checks for woman Couple wrote checks from woman to their bank account o When elderly woman died, relatives sue couple for fraudulent Couple were executor Couple wins Couple resign as executor, relatives take over Relatives sue the bank for letting fraudulent checks being made Cali court permits bank to assert issue preclusion o Kicks relatives case out, even though Bank wasnt in first case GYM HYPO Defensive use of issue preclusion

Blonder-Tongue Patent holder sued D1 patent infringement o Court says patent invalid o D1 wins Patent holder sued D2 patent infringement for same patent o Sup. Ct. says D2 wins o P would keep bringing cases o Courts would be too busy o Policy

Back to the Bus Passenger HYPO Issue preclusion cannot be asserted against someone who was not in the first lawsuit

Parklane case About a merger in an SEC suit Someone says proxy statement is materially false and misleading First case o Parklane & SEC Enforcement proceeding LC found it was materially false and misleading Second case o Shareholder v. Parklane Offensive issue preclusion Shareholder trying to get $$$ Wouldnt have voted for merger if it knew the right info Court allows offensive use of issue preclusion is allow Pg 656 Blonder tongue case Pg 656 Offensive use of preclusion (cons) ** o Does not promote judicial economy in the same manner as defensive does o Adopts a wait and see attitude hoping another Ps claim would win o Offensive may be unfair to defendant Case by case basis test for offensive preclusion If the person who is asserting issue preclusion was a party in the first lawsuit, he is allowed to assert issue preclusion offensively or defensively

For next class How about multiple claims? Party Joinder Claim Joinder Adding additional question to SMJ and PMJ SMJ supplemental jurisdiction / piggyback jurisdiction o P fed quest against D and also has another claim against D thats a state law claim If no diversity, seems like all is lost o 28 USC ss 1367 United mine workers v. gibbs o Fed question and related state claim Trying to figure out if state claim and come in Justice Brennan creates supplemental jurisdiction 28 USC ss 1367 o How is supplemental jurisdiction constitutional? o What if the fed quest is very small and state law quest is huge? o What if fed quest is knocked out early in case?

2 questions for joinder Is this allowed under the fed rule of civ pro? Assuming that claims can be joined together, is there SMJ for each and every claim asserted? Read rule 18(a) Permissive party joinder How many Ps and Ds can be joined? Rule 20

4/14/14 Claim joinder trying to bring in multiple claims Does the court have jurisdiction over each and every claim? Three questions o Putting aside the question of jurisdiction, may the claim be asserted in this lawsuit unless the federal rules of civ pro? Answer here is always yes Rule 18a of civ pro o Once you assert one claim, its open season Example one P has breach of K against D. P also has separate tort claim against D. Can he bring the suit? o Yes, rule 18a Example two P sues D for neg. D has counterclaim, negligence and IIED. Can D allege both? o Rule 13 a, b Yes o Putting aside the question of jurisdiction, must the claim be asserted in this lawsuit under the federal rules of civ pro? When P assert a single claim, claim preclusion kicks in Same for D with counter claims D decides not to assert any counterclaim, claim preclusion doesnt apply May be barred under rule 13a o Therefore, he loses his chance to assert his claims o 13a applies to plaintiffs too o Does the court have jurisdiction over the claim / is there a separate basis for jurisdiction for this claim? They have 3 Federal question

Diversity Supplemental P sues D, different states. D makes counterclaim. Its based on diversity P and D both residents of NY. But Ps claim is a federal q claim. 2nd claim is based on NY common law. No fed q and no diversity. If 2nd claim relates to 1st fed question claim, it may make sense to bring it up in fed court (supplemental jurisdiction)

Gibbs case Company closes a mine, doesnt want to hire union workers from united mine workers Company opens up a new mine and hire plaintiff to run it Gives P a separate k to coal o P starts hiring working from a competing union United mine workers starts putting pressure of company o Company fires P P sues for federal labor law and breach of K o Fed law and K law

Does the court have jurisdiction over the second claim? Constitutional question? o Art 3, section 2 limits the federal courts ability to hear certain issues (pg 674) Case because if it were case, you would defeat supplemental jurisdiction Federal case must be substance sufficient for smj State law claim must arise out of common nucleus of operative fact Court has power to hear case, but not required o LC has discretion At any stage of the proceeding a judge can throw out a state law case Brennan says the trial went long enough with federal issue to keep state law claim in Appeal/standard of review? Abuse of discretion standard o How carefully an appellate court views a trial courts ruling

Enactment of USC 1367 Supplemental jurisdiction Codification of what Brennan said (a) Original jurisdiction trial court with smj o Includes joinder or invention of additional parties (c) District courts right to decline jurisdiction

(b) carves out certain claims so that P cannot rig the system to bring in a case based on diversity when the P and a D are from same place

How many different defendants can the plaintiff sue? Rule 20 o Same transaction or occurrence, or series of transactions or occurrence

Schwartz v. Swan Permissive party joinder by plaintiff Two accidents o #1 august 13 Dorothy and Adelia get in accident with bray and Abernathy o #2 8/22 Dorothy and Clarence get in accident with Polevick Dorothy and Clarence (husband and wife) bring up lawsuit against all three defendant o Does husband have a claim against the others? Yes loss of consortium Judge doesnt like it o Rearranges the case into accident #1 and accident #2 Dorothy and Clarence dont like this Each accident person points to the opposite accident Question o Are Clarence and Dorothy justified under rule 20 in the Fed rule to sue both accidents in the same case? Same operative facts? Yes because both cases are related in terms of proof Court says o Bottom of pg 682 o Abuse of discretion because prevents C and D from getting any $$$ Rule 20 is viewed liberally o Time is not an issue o Look at the overlap of the events for similarities

USC 1367 Joinder of parties and supplemental jurisdiction P is from NY. Wants to sue d1 and d2 (independent claims). D1 NJ. D2 NJ. P wants to sue D1 for $80k and D2 for $40k. It all arises out of same transaction or occurrence. Good? o D1 is good, but how about d2?

o 1367(a) lets d2 come in because its related o 1367(b) does have supplemental jurisdiction P is from NY. Wants to sue d1 and d2 (independent claims). D1 NJ. D2 NY. P wants to sue D1 for $80k and D2 for $80k. It all arises out of same transaction or occurrence. Good? o 1367(a) lets d2 come in because its related o 1367(b) does have supplemental jurisdiction P1 and P2 are from NY. Wants to sue D1 NJ. P1 wants to sue D1 for $100k and P2 for $20k. It all arises out of same transaction or occurrence. Good? o Rule 20a Ps can join together to sue one D because it arises under same/similar facts o ss 1367(b) No good o There is jurisdiction under this example P1 AZ and P2 NY. Wants to sue D1 NY. P1 wants to sue D1 for $100k and P2 for $100k. It all arises out of same transaction or occurrence. Good? o 1367(a) Yes o 1367(b) No, P2 and D are from new york

Pg 690 note (5) o This claim is allowed Pg 690 note (6) o No

4/16/14 14 questions o P wants to assert more than one claim against a particular defendant He can do that under 18 a This is true not only for p, but for anyone who enters a counter, cross or 3rd party claim Once you assert one claim, its open season Judge can sever things if he wants o P wants to sue more than one D He can under 20 a if the claims against the difference defendants arise under the same transaction or occurrence o P wants to have a co-plaintiff Yes under 20 a, if he and co plaintiffs claims arise from the same transaction or occurrence o Once D has a claim asserted against him by a P, what type of counter claim Is he allowed to assert?

o o

o o

o o

Any kind of claim he wants 13a Compulsory 13b Once D has a claim asserted against him, what kind of counter claim must he make? All claims arising out of the same transaction or occurrence If D asserts a permissive counter against P, P must assert all counter claims that arise under the same transaction or occurrence 13a What if D wants to make a counter against P and an outsider, kosher? 13h Yes he can do it Bc it relates to the same transaction or occurrence What if D wants to make a cross claim against another D 13g Only is it arises out of the same transaction or occurrence Must our D assert his cross claim? No, its discretionary Can D1 assert other unrelated claims against D2 once hes asserted his permissive cross claim? Yes 13a What if D1 has a cross against D2 and an outsider? 13h, same answer as 6 What if D thinks that an outsider is gunna be liable to him in whole or part of any judgment of P against D, course of action? Rule 14 brings him in as 3rd party defendant Once our third party D is in the case, can third party assert a claim against P Rule 14a2D What if our third party defendant realized that our D1 messed up and missed a certain defense, can 3rd party d assert that defense? Yes 14A2C Can P assert a claim against 3rd party D? Yes

Pg 692 Defendant has to make a counterclaim when a claim is asserted against him

Dindo v. Whitney 1st L.S. Whitney v. Dindo

o Whitneys car insurance v. Dindo and Whitneys car insurance o Fed court on diversity o They settle Dindo realized that he can assert a counterclaim o Whitney says 13a should apply and Dindo is precluded from asserting a counter Court says the parties didnt go to trial o Dindo was left in the dark in this situation 13a is murky from this case o If the parties decide the case before trial, judge may weigh out equities and let the trial go through

Carteret savings v. Jackson Get rich quick scheme o Nonrecourse note Bank sues in Florida, default judgment. Brings it to Massachusetts to enforce the judgment o Full faith and credit Jackson tries assert a claim, Bank says compulsory claim No good Not putting in a claim at all will bar you from asserting a claim

Jurisdictional aspects Ss 1367 Notes on pg 699 o (1) (a) No independent basis for Ds claim. Same case or controversy (Gibbs test). Claims asserted by a plaintiff are carved out, not D. 1367b to prevent P from doing an end run around diversity rules (b) they have original jurisdiction o (2) Not a federal question and no diversity. Same nucleus of operative facts (Gibbs test). We only go to B if its a diversity issue. o (3) A compulsory counterclaim always satisfies 1367a Pg 701 about Gibbs test Pg 700 notes and questions o (1) for it: same nucleus of operative facts Against: different time frame o (2)

(a) Yes because the first claim is compulsory and then you can assert any claim after (b) Must assert negligence claim but not K claim (c) Once a party asserts a claim, a party has to assert back any other related claims

Cross claims Claim by one party against a co party Related to the lawsuit, then anything else be asserted after Pg 702 o (2) Rule 20 (a) Negligence and property damages. If she doesnt assert it she loses it (b) (c) Claim preclusion Have to include preclusion with these tests (d) 18a

4/23/14 M/C and essays 4 different claims 2 by the mom (Pam) 2 by the daughter (Beth)

Question 1 Beths claims cannot be precluded Pams claim IIED is precluded Defamation is not precluded