Beruflich Dokumente
Kultur Dokumente
Incentives to Litigate
-remember, P here probably cant enforce the injunction to stop Harris from using company
secrets, so think practical outcomes too
-cases in equity historically decided by judge, not jury
D. Financing Lawsuits
1. Costs
-disputes over fact more expensive than law b/c our system requires parties to drive litigation,
discover/investigate facts themselves; requires longer trial (jury)
-direct expenses-legal fees, discovery (court reporter, document production); expert witnesses;
investigators; filing fees; process servers; transportation costs, photocopy
-indirect-loss of party and witness time/focus
2. Payment Methods
1-each party pays for own lawyer (American Rule)-common for most commercial litigation; less
need for legal insurance b/c most covered by auto insurance (most common lawsuit); hourly rate
2-each party, sharing costs w/ similarly situated parties through insurance or contingent fees
(remember, can get this only w/ damages, not specific remedy)
3-prevailing party gets lawyer fees from other side (English Rule)-malicious prosecution at
common law; today generally imposed by statute for some public interest claims, ex: civil
rights/discrimination
4-philanthropy or public subsidy-legal aid, pro bono, good for people wanting specific remedy;
two biggest categories for legal aid: divorce and eviction defense
-types of claims that fall through: small damage claims (class actions a possible solution); nonmonitory relief in non-fee-shifting cases; uninsured defendants (tenants in possession)
3. Evans v. Jeff D
a) Facts
Ps seeking injunctive relief for institutionalized children. Ds offered settlement of everything Ps
asked, but asked for waiver of attorney fees (fee-shifting statute would have covered). The court
must approve all class action settlements (Rule 23e); must they reject it?
b) Rules and Reasoning
Court says no ethical dilemma involved b/c Ps got what they wanted. But what about the lawyers
other legal aid clients? Is this an ethical dilemma?
c) Issues
-if lawyers dont get paid, the incentives to litigate will change and some people may or may not
have access to the legal system
-some lawyers have clients sign agreement not to settle w/o attorneys fees--wrong?
4. Buckhannon
a) Facts
Ps sued state for self-preservation (fire safety) law. Say law violates FHAA and ADA. D repealed
the laws, so the suit is moot. P says they are prevailing party, should get legal fees.
c) Issues
-this does not require a hearing; just a chance for one
-temporary restraining orders-sometimes issued w/o notice or a hearing (Rule 65b)
-use of DPC requires state action; private party can use self-help as long as it doesnt breach the
peace
-Mathews test for determining whether notice/hearing necessary: 1) strength of private interest
involved; 2) risk of erroneous deprivation; 3) govt interest involved including fiscal/admin
burden
II. Pleading
A. Functions of Pleading
F.
1. Possible Actions by D
-nothing: default judgment against D per Rule 55 (often debt-collection action, even if D doesnt
have assets now the creditor could reach future assets)
-pre-answer motion: D gets more time to answer, decision on issue raised by motion, see Rule 12
(most of these can be included in the answer, except request for clarification or more info, but 12e
motion is rare)
-answer: admit, denial (general or specific), affirmative defenses; further proceedings
2. Zielinski
a) Facts
P making personal injury claim based on forklift accident. Sues D as employer; D makes general
denial and P doesnt realize that someone else was employer. P couldnt sue correct party b/c stat
of limits had run, but both covered by same insurance.
b) Rules and Reasoning
Court says D should have been more specific in answer. But maybe this was bad complaint b/c it
put all the allegations in one paragraph?
c) Issues
-injustice a big factor here-no concern b/c same insurer covered D and the correct employer
-Rule 7-defines motion as a request to the court for an order
-Rule 8(b)-averments in a pleading are admitted when not denied (cant just say, make P prove it)
3. Layman
a) Facts
P suing D for trespass. D says they had easement; but didnt raise this in answer. Is it affirmative
defense that D must plead in the answer?
b) Rules and Reasoning
Court decides easement is affirmative defense b/c license is, and that is similar. So D cant argue
that evidence (will amend complaint)
c) Issues
-not clear how court decided this was affirmative defense-maybe more about surprise during
trial? If P had found out during discovery and interrogatory, then court might say differently.
-Rule 8(c) lists affirmative defenses
-good idea for D to plead doubtful matters as affirmative defenses to avoid waiver, though some
courts think D has burden of proof if he pleaded it as affirm def
-pleadings usually predictable; but if there is something unexpected or surprising, then the
pleaders should make that clear. Pleading rules are about fairness and notice
-most action happens in discovery, so if unusual story is learned then, there is no surprise and
wont be too picky about pleading
-if P wants to challenge an affirmative defense, he can make a Rule 12(f) motion to strike (this
motion works like a 12b6 for a single allegation, works for P or D)
4. Reply
-Rule 7(a)-requires reply if the answer contains a counterclaim denominated as such
-technically not required if the potential counterclaim is given as affirmative defense
-court may also order reply on its own motion, or motion of a party
G. Amendments
1. Rule 15
a) Amendments
-party may amend at any time before responsive pleading served; otherwise party can amend if
you have leave of court or written consent of adverse party; court should freely give leave when
justice so requires
-so when does justice so require? Factors-Will other side have a chance to prepare a response?
Was this a result of factors outside their control? Should they have fixed this earlier, or found it
out earlier? How much will it harm other side?
-why allow amendments? b/c notice pleading isnt supposed to have all the facts; focus on
discovery
2. Beeck v. Aquaslide
a) Facts
P sues for product defect. D says the manufactured the slide. Later D realizes they didnt make it,
and want to amend answer. But, the stat of limits has run so P cant sue other guy.
b) Rules and Reasoning
Court allowed D to amend. Thought that D was not bad faith, and still possible that P can sue the
right guy. Would be more prejudicial to deny amendment that to allow it. D could not defend
themselves on the defect claim.
c) Issues
-two concerns: is there good reason that D made the mistake? Will it be prejudicial to other side
(maybe balancing the harms)?
3. Relation Back
-under Rule 15(c), party can amend the complaint and it will be dated back to the original date of
the pleading (so statute of limits not issue)
-BUT 15(c)(3) requires that if you want to change name of party, that party must know or should
have known that they actually should have been sued (had notice)
-15(c) requires that the new claim/defense asserted in the amended pleading arose out of the
conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading;
amendments do NOT turn on whether it is same/different legal theory
-these requirements allow relation back b/c the main concern of stat of limits, notice, is satisfied
-courts analysis of the same occurrence requirement may depend on when the amendment
occurs: if during discovery, the court will be more likely to grant relation back b/c the other side
has time to respond
III. Discovery
D. Initial Disclosures
-disclosure of tangible things party may use to support claim or defense, except for impeachment
(undermining credibility of a testifying witness), plus damage calculation info and insurance
-must disclose identity and address of witnesses
-must disclose insurance info, and info used to make damage calculations
-for expert witnesses: bio and report (26(a)(3)?)
-dont have to disclose bad info
-usually, disclosure will occur no later than 85 days after D appears
-some types of cases are exempt (rule 26b1E)
-Must notify other party if something new comes up after disclosure; risk of not disclosing? Court
might not allow the evidence to be used unless it was discovered another way.
E. Compelled Discovery
-relevant to claim or defense of any party, or sometimes if relevant to subject matter
-objections-must answer unless privileged, or you stop to get a court protective order, or to
enforce the court order
1. Interrogatories (rule 33)
-sending party a list of questions to answer
-no more than 25 questions unless party gets courts permission
-cheaper than deposition, but cant do follow up questions
-non-parties dont have to answer; even if they answer, probably not admissible at trial
-gives evidence for use at trial; contrast admission below
2. Requests for Admission (rule 36)
-asks other party to admit a fact; takes that fact out of the dispute completely; same effect as
admitting in an answer
-party can say they dont have enough info to admit or deny; but cant just say thats an issue for
jury
-admissions are binding only in the pending action
3. Depositions (rule 30 etc)
-lawyer questions a party or witness under oath, reporter and adverse lawyer are present
-total number of depositions on one side may not exceed 10; each deposition cant exceed a day
of seven hours; no person may be deposed second time w/o permission of court or other side
-deposing party can ask for more time if other side delayed the depo
c) Issues
-opposite presumption from protective order: for work product, it is presumed to be nondiscoverable; can be overcome by showing of substantial need or undue hardship
-outcome could vary today: employees of company might be clients also, so interviews privileged
(Upjohn). So would need to depose the crew; might be able to argue undue hardship b/c these are
more expensive
-rule protects insurance adjustors and investigators too
-but witness can also get copies of their own interviews/depositions (26b3)
-to qualify the material must be prepared for litigation
-remember, not all hard work is non-discoverable; if lawyer works hard to find a witness, he
must disclose identity of witness to other side
H. Expert Testimony
1. Rule 26(b)(4)
-defines expert--hired or retained by lawyer for providing expert opinions in anticipation of
litigation
-must give bio and report in initial disclosures if testifying; non-testifying experts dont have to
-other party can depose testifying expert; but need special showing to depose non-testifying
expert
2. Thompson
a) Facts
P suing employer for sexual harassment, emotional distress. D wants psychological report of
expert who interviewed P. P says they cant have it b/c non-testifying.
b) Rules and Reasoning
D cant get this info from other means, so exceptional circumstances met. (privilege waived).
Could also say psychologist was a witness, not hired in anticipation of litigation.
c) Issues
-proving special circumstances-cant get info another way, no way to have gotten it earlier
3. Chiquita
a) Facts
P had expert examine dock; D wants experts report. P says expert wont testify, so dont have to
give report.
b) Rules and Reasoning
D could have sent their own expert to inspect the dock. Cant benefit from other partys work (to
such a degree).
c) Issues
-similar to work product here, other side should do it themselves
I.
Enforcement
1. Sanctions
-Rule 37-if party doesnt disclose the info, court may refuse to allow the evidence at trial or
impose other sanctions, unless it was harmless (ex: the evidence was uncovered in later
discovery). But wrong party may have to pay reasonable expenses of getting info later.
-BUT other party must have made a good faith effort to compel the info w/o court action
-if party continues to refuse to grant discovery, court may order reasonable expenses (including
attorneys fees), order that fact admitted or make a default judgment
-Rule 26(g)-fills in the discovery gap of Rule 11, court can impose appropriate sanction,
considering the whole pattern of behavior
2. Thompson
a) Facts
P class action about housing discrim. Ps want large amount of discovery, covering 75 years. D
says too burdensome.
b) Rules and Reasoning
Court says P and D must work together to resolve the problem. Must narrow the scope of
discovery, and work to solve probs.
3. Poole v. Textron
a) Facts
Product defect case. P wants sanctions against D for bad behavior.
b) Rules and Reasoning
Court can award sanctions under 37a4 (reasonable expenses for specific incident) and 26g
(appropriate sanctions for whole behavior). Court imposes expenses only b/c not bad faith.
c) Issues
-award of sanctions may depend on whether party is perceived as bad faith; but possible that bad
behavior was incompetence, fear of asking client for enough info
-might the stage of litigation explain the different approaches of these two judges? Thompson
happened at beginning of discovery; Poole very late into it
-how might such a ruling affect later motions like amending pleading (ex: in Beeck v. Aquaslide).
Might affect whether justice so requires the court to grant amendment
IV. Resolution w/o Trial
A. How Suits End w/o Adjudication
-abandonment by plaintiff (eventually ends in dismissal): may represent judgment of merits by P;
or inadequate financing of suit
-contractual resolution: in another forum (arbitration); settlement
-about 30% end in non-trial adjudication (some kind of judgment)
-over half end in settlement
B. Default
-Rule 55-suit may end in default judgment if D fails to appear or dismissal if P abandons
-but Rule 60(b)-might allow reopening of judgment after default
C. Settlement
1. Concerns
-good vs. bad version: not clear which is more accurate
-usually dont need a judge to approve a settlement, but exceptions are class actions, cases
involving minors, some multi-D cases.
-settlement helps control the risks of litigation for both parties
-cant appeal after settlement since there is no judgment
2. Strategy
-possible goals to settle: avoid bad publicity, prevent bad info for future employees/employers
-negative factors: wont feel vindicated if no judgment on merits, must enforce the settlement (so
oral agreement is NOT good idea)
-when to settle-before complaint if confidentiality is important, but easier to enforce if judgment
entered (such as involuntary dismissal or consent decree)
-if P files new lawsuit, D would plead affirmative defense of accord and satisfaction or res
judicata if there is a judgment on the merits (invol dis)
-parties can also settle part of the claim, and leave the rest to trial (such as settle on liability but
try damages)
3. Mediation
-a mediator assists in negotiation btw the parties to help them come to an agreement; but doesnt
decide the case or bind the parties
-sometimes mandatory mediation is required by court or statute (frequently in family law)
-judges can even act like mediators (by managing the litigation, offering alternate dispute
resolution, giving early evaluations of the merits)
4. Matsushita
a) Facts
Class action P settled w/ D in state court (approved by court), including federal securities claims
that state court did not have jurisd to hear. Now other members of class suing in federal court.
Claim barred by settlement?
b) Rules and Reasoning
Under full Faith and Credit Act the federal court must give judgment the same effect it would
have in the court where rendered; if the states laws allow the resolving of state and federal claims
in settlement, then there is preclusion.
c) Issues
-this requires a judgment of some kind! Otherwise contract would cover both state and federal
claims
5. Kalinauskas
a) Facts
P wants to depose coworker who settled case w/ D. But coworker signed confidentiality
agreement w/ D.
b) Rules and Reasoning
A confidentiality agreement cant violate public policy by trying to hide underlying facts of the
case. The public policy concern increases as more people are harmed. So P can depose coworker
about the facts, but not about the terms of the settlement.
c) Issues
-remember, P can only depose someone to extent it is relevant to Ps claim (or Ds defense)
-also possible for D to keep some secrecy after this; can seal the depositions
-confidentiality agreements are good for Ds, but good for Ps too b/c they can get a higher
settlement w/ one. The Ps lawyer may also benefit b/c he has a trade secret about that D.
-who doesnt like them? Public at large for certain claims (health/safety) and plaintiffs bar
(wants to use that info in future to reduce costs of discovery)
6. Filing w/ Court
-can P get the discovery from a past case to lower their costs of discovery? Yes, if these
documents are on file w/ the court (unless they were sealed)
-Rule 5d says discovery info is filed when it is used in the proceeding or court orders filing; so
the documents will only be filed if used in some kind of motion
-ex: motion for summary judgment will likely include discovery info, and that will be filed w/
court
D. Arbitration
1. Definition
-parties contractually agree to resolve future disputes outside of the courts. Mediation different:
doesnt decide who wins.
-in arbitration the parties can design their own procedure and control the applicable substantive
law
2. History
-long history, esp among guilds, religious communities
-early 20th C-courts skeptical
-late 20th-courts embraced contracts to arbitrate, even sometimes federal statutory claims (which
courts are generally suspect of, b/c fed statute claims involve public policy issues)
-most recently-some skepticism towards some kinds of agreements, courts not enforcing
fundamentally unfair ones
3. FAA
-Federal Arbitration Act: courts will uphold arbitration agreements involving commerce, except
upon grounds for revocation of any contract
-if one party files suit, and there is arbitration agreement, the other party can move to stay the
action and compel arbitration
4. Floss v. Ryans
a) Facts
P signed arbitration agreement in employment contract w/ D, P must bring dispute to EDSI. Their
procedures subject to change w/o notice. P must pay half fees.
b) Rules and Reasoning
No binding contract b/c no consideration. EDSI didnt promise any specific procedures to handle
the dispute.
c) Issues
-so this court used contract principles to strike down the clause
-remember, you could characterize this agreement differently: say it is geared towards customer
service and individualized attention so it is good
5. Lyster v. Ryans
-same arbitration agreement, this court finds that it wasnt unconscionable or unduly harsh
-this is a different circuit; maybe just a jurisdictional difference
-what should Ryans do? Keep the agreement, but ask EDSI to fix the rules, or notify everyone of
any changes so the procedures will be fair.
6. Ferguson v. Writers Guild
a) Facts
P disputes his credit for screenplay. Member of Guild, which has arbitration policy for credit
disputes. Picks three anonymous arbitrators who are writers, identities all unknown to parties and
vice versa, look at documents only (no testimony).
b) Rules and Reasoning
This system is fine; it handles claims more skillfully and economically than courts could.
Members of guild are better to decide, and they voted for this system themselves.
c) Issues
-procedure like this in a court would violate due process; but here, no state action
-the more we try to make arbitration like litigation, the more benefits we lose (becomes more
expensive, slower)
-the courts reviewing powers are limited to asking whether the parties actually agreed to
arbitrate, and whether it was fair
7. Framework for Enforcement
-Two doctrinal frameworks: 1) agreement as contract (subject to limits of contract law); 2) special
nature of the claims in question: should some claims not be arbitrable (ex: civil rights or
securities law, though courts now allow these)? Are the systems procedures fair, even-handed?
-what disputes are not arbitrable? Maybe if they are public (like Bush v. Gore), important, likely
to be unfair; some statutory claims
-Courts will strike the agreement if it is fundamentally unfair. Factors: Is there mutuality of
obligation? Does the agreement disproportionately disadvantage plaintiff financially
(inhospitable)? Is the agreement too limited on remedies (no punitive damages)?
-Review of arbitration: courts will generally not review the decision, unless there is gross
lawlessness by the arbitrator
E. Summary Judgment
1. Rule 56(c)
-party moving for summary judgment must show there is 1) no genuine issue as to any material
fact; 2) that they are entitled to judgment as a matter of law
-nonmoving party must produce evidence (can be affidavits or other documents) to show an issue
of fact (see Celotex for burden) and cant rest on pleadings alone
-no witnesses testify, and there is no jury to assess credibility of evidence
-nonmoving party can also ask for more time for discovery
-different from 12b6 motion-here we dont assume Ps facts are true; we ask, are there material
facts in dispute, testing whether facts are true (but not whether the evidence is credible or not)
2. Celotex v. Catrett
a) Facts
P claims Ds asbestos killed husband. D says it wasnt their asbestos; moves for summary
judgment on that. Says that P cant show it was their asbestos, based on Ps failure to identify
witnesses during discovery.
b) Rules and Reasoning
D can either: 1) present evidence to show Ps claims cant be true; or 2) say that P cant show
enough evidence to prove element on which they have burden. D just has to point out that P
doesnt have enough evidence for rational jury to find in their favor; no need for other evidence.
Burden of production for SJ is the SAME as for persuasion at trial (usually on P).
c) Issues
-implications for discovery? Puts more pressure on P to get/show evidence before trial; P cant
just say, I will have evidence by trial b/c court will look at state of evidence at time of SJ
-now the burden of production for SJ is same as burden of persuasion at trial
-does the evidence have to be admissible at court? See rule 56(e)
-P can ask for more time, if not enough time for discovery yet
-in response to motion for summary judgment, plaintiff can 1) attack the defendants factual
analysis, say its wrong and you could draw inferences that allow a reasonable jury to find for P;
or 2) there is additional evidence showing there is a factual dispute (and present evidence)
3. Bias
a) Facts
P suing for breach of contract, say D didnt get insurance policy for son. D says son would not
qualify for policy b/c drug user. D moves for SJ, presents testimony about specific incidents of
drug use. P gives affidavits saying generally son not user.
b) Rules and Reasoning
Even though evidence on both sides, court must ask could a rational trier of fact find for P? Ps
evidence too general, doesnt refute the specific evidence from D.
c) Issues
-in motion for SJ, the court must make all justifiable inferences in favor of the nonmovant; but
the nonmoving party must do more than create a metaphysical doubt about credibility
-remember, D has burden of production/persuasion for affirmative defenses like stat of limits
F. Judicial Management
1. Case Loads
-state-average 1500-2000 cases per year per judge
-federal-average 500 cases
-w/ so many cases and a large backlog, judges will want to speed things along, esp in state court.
Major implications for how long trial will take, scheduling, delays
2. Rule 16
-16d-a judge must set a time table (scheduling order) for the trial
-judge can also use discretion to have conferences, make sanctions (same as available for rule 37)
-usually parties cant appeal these orders, b/c of final judgment rule. But remember, injunctions
are appealable; could say the order is injunction
3. Events up to trial
-rule 26(f) conference, btw the lawyers (21 days b4 meeting judge)
-rule 26(a)(1)-initial disclosures
-rule 16(b) scheduling conference
-discovery
-settlement conference?
-rule 16(d) final pretrial conference- may schedule amended pleadings, explore settlement,
refine area of dispute, witness and exhibit lists. Judge has flexibility to extend deadlines, or to
decide not to.
4. Sanders
a) Facts
Judge issued deadlines at scheduling conference. Ps lawyer failed to meet deadlines. At final
pretrial conference, judge dismissed the case as sanction.
b) Rules and Reasoning
En banc appeals thought dismissal too harsh. Appropriate sanction? Maybe reasonable attorneys
fees, expenses.
c) Issues
-other sanctions might end up w/ same result: if P cant afford to pay them and continue litigation
he must drop case
-unfairness also an issue in this case; if P doesnt meet deadline but D does, that means P gets
more time to look at Ds papers
5. McKey
a) Facts
At final pretrial conference, judge issued order limiting Ps theory to negligence. Later P found a
new theory of liability.
b) Rules and Reasoning
Judge wouldnt allow P to bring up the new theory, b/c it violated the order.
c) Issues
-judge probably knew about the other theory; should he have told P about it? Prob not, that is not
point of adversarial system
V. The Trier of Fact
A. Judges: Bias and Recusal
1. 28 USC 455
-based on case-specific bias, not just bad judging in general (unlike CA, where you get one free
pre-emption). For bad judging you can file a complaint but that doesnt remove judge from the
case.
-party can file motion for recusal, or judge must recuse himself if a) impartiality could reasonably
be questioned; or b) one of following criteria apply (financial, personal interest)
-financial interest-doesnt matter how small, but interest in mutual fund ok; but judge can avoid
recusal by divesting self of the interest ONLY after substantial judicial time has been devoted to
the case (if at beginning, there are other judges available and judge must recuse)
-parties can waive ONLY if bias falls under section a
-judges can hear their own recusal motion, or can ask colleague to hear it
2. In re Boston Childrens First
a) Facts
Judge publicly commented on the case, saying it was more complex than a past case. P moved for
recusal, and judge denied the motion.
b) Rules and Reasoning
Actual bias doesnt matter; just the appearance of bias. Courts must seem to be free of bias.
Disqualification is appropriate when facts show what an objective member of public would find
to be a reasonable basis for doubting the judges impartiality.
c) Issues
-any out-of-court response to a reporter is probably not grounds for recusal; should be assessed on
case-by-case basis
-procedure here was a writ of mandamus for appellate court to consider the motion for recusal.
This is very rare; usually appeal happens after final judgment. Court will then need to ask, should
judge have recused self, and did that involve a serious enough likelihood of injustice to overturn
the case?
-usually there is assumption that another judge is available to replace recused judge. But Supreme
Court-if justice recuses self, no one will fill in; if tie, the lower court will be affirmed
-if party argues bias based on attitudes developed during trial, SC says that judicial remarks must
reveal such a high degree of bias as to make fair judgment impossible (high standard)
B. Right to Jury Trial
1. Seventh Amendment
-Right to Jury: in suits at common law, where the controversy exceeds twenty dollars, the right to
a jury shall be preserved
-preserved means wont be taken away; its not required, and the legislature can guarantee more
rights to jury; judge can choose to have a jury in equitable claim
-Reexamination Clause: no fact tried by jury shall be reexamined by any court than according to
the rules of the common law
-Seventh Amendment applies ONLY to federal govt, but states have similar laws preserving right
to jury trial
2. Common Law
-the right is preserved for suits that would be brought under common law courts in 1791 (when
7th A was passed)
-this means claims that seek a legal remedy (not equitable)
-must know what type of remedy is sought; if legal, there is a right to jury trial, if equitable no
right
-if you seek both types of remedy, the parties get a jury on any factual matters that overlap, and
the judge is bound by the jurys findings (only relevant after the Federal Rules, since before you
couldnt combine)
3. Rule 38
-demand and waiver of right to jury trial
-parties have 10 days after the service of the last pleading directed to such issue (that has a right
to jury)
-so if party amends pleading to include a legal remedy, its 10 days after the last pleading about
that
-if you dont demand a jury, you have waived the right!
C. Judge as Trier of Fact
-Rule 52 says that judge must make specific findings of fact stated separately from the findings of
law
-the reviewing court can consider these fact findings (unlike the findings of a jury) and can set the
findings aside if they are clearly erroneous
VI. Trial
A. Importance?
-why focus on trial, when only 2-3% of cases go to trial, and these motions are rarely granted?
-b/c trial has an impact on the rest of the litigation process; what might happen is being assessed
in settlement agreements, deciding to litigate
-after Celotex, the standard for directed verdict is the same as summary judgment, so trial is
important in SJ too; directs the discovery process
-tells us by reference about what happens to the litigation that doesnt make trial
B. Burdens
1. Pleading
-parties must fulfill their burden of pleading
-this is challenged in the 12b6 motion to dismiss (if D challenging P)
-P challenges Ds pleadings in a 12f motion to strike or 12c motion for judgment on the pleadings
2. Production
-important at two phases: summary judgment and judgment as matter of law during trial; this is
when the burden is challenged (standards are the same, remember Celotex)
-has party met their burden of producing evidence that would allow a rational trier to find in their
favor?
3. Persuasion
-important only when the trier is weighing the evidence
-in civil trials, party with burden must prove their side by a preponderance of the evidence
-ONLY important if the evidence is exactly equal; then the jury must find against the party w/ the
burden
-this burden is far more important in criminal cases, where it will almost always determine the
verdict
C. Judgment as a Matter of Law
-can move for directed verdict after P has presented evidence, or after D has presented evidence
-can move for judgment notwithstanding the verdict after the jury has made the verdict
-Rule 50-party can move for judgment as matter of law, granted if there is no legally sufficient
evidentiary basis for a reasonable jury to find for that party on that issue
-often depends on inferences that can reasonably be drawn from evidence
1. Reid v. San Pedro RR
a) Facts
Ps cow killed by train. Could have gotten out by broken fence (RRs duty) or by open gate (Ps
duty). Cow found near gate. Jury finds for P.
b) Rules and Reasoning
There was not enough evidence to support the inference that the cow went through fence. P didnt
satisfy her burden of production by a preponderance of the evidence.
c) Issues
-most courts dont allow party to rely on statistics alone; but if they think party has exhausted
other possible evidence, they might allow it
-once a case reaches the jury, the jury should be able to rationally find for either party; this shows
that litigation is aimed at fairness and managing doubt as much as truth
2. Penn RR v. Chamberlain
a) Facts
Ps husband killed by train. Her witness says the trains collided, but he was far away, heard a
crash that could have happened elsewhere. Several other witnesses say no crash.
-There must be some significant relation to the first suit. Possible approaches for same claim:
only claims which were actually litigated; any possible claim the two parties have against each
other; using same evidence/facts; arising out of same transaction or occurrence (federal courts use
transaction rule)
-remember, something that seems like a different transaction could actually be the same, if they
are recharacterized as related
-importance to preliminary investigation-make sure this isnt related to the same transaction as
previous claim; also must investigate all related facts to decide if there are other claims to make
in this case
-remember, only can preclude claims that were valid claims at the time of the first suit!
2. Relation to Rules
-Rule 8(e)-says party may state any separate claims or defenses the party has regardless of
consistency; doesnt require that party state any claims arising out of same occurrence. What if it
said party MUST state claims arising out of same transaction? Would this addition change the
law? No. Res judicata is common law, and supplements the Rules
-relation to Rules-if you change rules about amendments, you may need to lessen claim
preclusion to be fair. We put most focus on discovery, and that will likely reveal related claims.
BUT, if lawyer asked for amendment and was denied, that doesnt mean there was no opportunity
-Rule 42-judge can split parts of a complaint for trial; this rule could be response to the incentive
for plaintiff to put everything they can into the pleadings
-Rule 13-a pleading must state as a counterclaim any claim against the opposing party that is
related to same transaction that is subject matter of opposing partys claim; otherwise it will be
waived
3. Martino v. McDonald
a) Facts
P had franchise w/ D, D says P breached contract. They settled; consent decree entered. Later P
sued McD, saying contract clause violated antitrust law.
b) Rules and Reasoning
Rule 13a doesnt preclude claim, b/c there was no pleading. But common law compulsory
counterclaims rule does. New claim precluded when it had to have been brought as counterclaim
in past action, and would have been a defense (same transaction), and would undermine integrity
of the first decision.
c) Issues
-*so claim preclusion applies to counterclaims as well, if they are compulsory, or relitigation
would nullify rights established in the first action
-what if first suit settled w/o consent decree; there would be no claim preclusion, but there would
still be accord and satisfaction
-litigation system is very concerned about consistency btw two parties; less so about consistency
btw different suits involving different parties (precedent can be overturned)
-*Rest of Judgments-failing to state counterclaim doesnt waive bringing that claim later, except:
if required by compulsory claim statute or rule; or the relationship btw the counterclaim and
plaintiffs claim is such that successful prosecution of action would nullify the initial action or
impair rights established in the initial action
2. Judgment on Merits
-full trial and verdict, directed verdict, summary judgment clearly have preclusive effect b/c these
are judgments on merits
-dismissal for no jurisdiction-not a judgment on the merits. Rule 41 says any involuntary
dismissal, except for jurisdiction, venue, or failure to join party, are judgments on merits.
-dismissal for failure to comply w/ discovery-not a judgment on substantive merits, but not giving
it preclusive effect would give party another chance. Would undermine effect of sanctions
-dismissal on 12b6 motion-preclusive effect in federal courts, but not all state courts have same
rule. It reflects merits of case, and almost always P has chance to amend; but it occurs at
beginning of trial when D has invested very little.
-remember Semtek rule-would a 12b6 dismissal by fed diversity court have preclusive effect if
state doesnt give preclusive effect to 12b6? Probably, not clear if it would be inconsistent w/
federal interests or not
3. Gargallo
a) Facts
First suit: broker sued G for unpaid debt. G counterclaimed for federal securities fraud. G lost for
failure to comply w/ discovery. But state court didnt have jurisdiction over securities law. G sues
again in federal court.
b) Rules and Reasoning
Federal court must give state court judgment the same preclusive effect that judgment would have
in a state court. State would preclude based on this judgment. But since this state wouldnt give
preclusive effect to judgment w/o jurisdiction, then no preclusion.
c) Issues
-but if the state DID give preclusive effect where the court lacked SMJ, that would have
preclusive effect, even thought state court had no jurisd!
-in CA, Keidatz case decided there is no preclusive effect to a 12b6 dismissal (except for same
claim based on same facts). But this is just precedent; it could change.
4. Semtek
-Erie RR decided that when federal courts sit in diversity cases, they must apply relevant state
laws
-Semtek says that scope of a federal court judgment in a diversity case should be the same as it
would have had the case been adjudicated in state court. So, if a CA court would have dismissed
the claim but would have left other states free to apply their own different rules, same result when
case brought in diversity.
-but, the federal reference to state law will not obtain when state law is incompatible w/ federal
interests. Ex: if state law did not give preclusive effect to dismissal for discovery abuse, federal
court may still preclude to preserve integrity of federal discovery sanctions
D. Issue Preclusion
1. Black Letter Law
a) Same Issue
-the same law must apply; if two cases use different standard to evaluate facts, not the same issue
-burden of proof is also important-criminal and civil trial could be over same issue, but
different burden may or may not allow issue preclusion. If D convicted criminally, that will
preclude civil issue (lower burden). If D acquitted, not precluded for civil
b) Adequate Incentive and Opportunity to Litigate
-if first suit was for small amount of damages, or not very severe loss, then D wont have same
incentive to litigate
-also must have same procedural opportunities, or no less
-usually must have opportunity for appeal or review of judgment
c) Actually Litigated and Determined
-if first suit was dismissed for discovery abuses, for example, issues about the substantive merits
are not precluded
-but, a party who deliberately prevents resolution of factual issues through normal adjudication
may be bound by the first judgment even if it was never fully decided (for example if person
knowingly defaults). Actual litigation is satisfied when party is given a reasonable opportunity
to defend self on the merits and chooses not to
d) Essential to Judgment
-if court rules on alternative grounds, Rest of Judgments says neither have preclusive effect. But
if appeal decides on either or both, that has preclusive effect.
-often not sure whether something was essential in a general jury verdict, so no preclusion (Parks)
e) What Parties
-common law and in some states-issues only precluded btw the same parties; today mutuality not
required. Only the victim of preclusion must have a full and fair opportunity to litigate
-when can non-party not assert preclusion? When party could have joined first suit, or otherwise
unfair to D (Parklane)
-may be unfair to preclude a party if there are prior inconsistent judgments on the same issue
(Century Home)
2. Illinois RR v. Parks
a) Facts
H and W sued RR in first action; W won, H lost. Then H sued RR from different damages. RR
thinks first trial precludes issue of Hs contributory negligence, since he lost.
b) Rules and Reasoning
Jury could have based verdict on contributory negligence OR no damages. No way to know, so
not precluded.
c) Issues
-how would we know how the jury decided? Special verdict
-alternative grounds-why treat these differently from regular preclusion? Cant be sure that each
was sufficiently decided. Not all courts follow this rule.
-dismissal on jurisdiction doesnt preclude claim. But it does preclude that issue of jurisdiction in
future case. For example, decision on personal jurisd in federal court is binding in state court of
same state.
3. Parklane
a) Facts
First suit: SEC v. Parklane for misleading proxy statement. SEC wins. Then Shareholder v.
Parklane, P wants to preclude issue of misleading proxy.
b) Rules and Reasoning
No more requirement of mutuality.
-defensive issue preclusion: when the plaintiff was a party to the first suit, where she lost, and
then is suing a different defendant on the same issue. D can use preclusion here, b/c it gives
plaintiff incentive to join all defendants to the first suit which is more efficient
-offensive-P using past suit to preclude D from litigating issue. not ok for P to wait and see
what happens in first case. So if P could have joined, may not allow preclusion. P here had no
chance to join first suit.
-Where P could have easily joined in the earlier action, or where application of issue preclusion
would be unfair to D, trial judge should not allow use of issue preclusion. Reasons why unfair to
defendant: D didnt have same incentive to litigate the first case; different procedural
opportunities
c) Issues
-some states still require mutuality (preclusion only for cases with same parties). Criticized b/c it
doesnt recognize the difference btw party who never litigated an issue and a party who had a
chance but lost
-cant burden a person w/ preclusion who wasnt a party to original suit; violates due process.
This case deals w/ when the burdened party was in first suit, but opposing party was not.
-B/c of offensive preclusion, Ds may have incentive to settle if there may be future suits instead
of allowing final judgment (partial summary judgment not final judgment)
-no issue preclusion if principal was acquitted for the accomplices trial
-nonmutual issue preclusion does not apply to federal government. Must be the same parties.
Why? Possible that a constitutional issue, decided in a suit against govt, would be then decided
forever. It would be super precedent that even supreme court couldnt overturn
-if procedure is different, be sure to ask whether that really makes a difference. If first admin
hearing didnt allow discovery, did we really need discovery, or did the precluded party have all
the info?
4. Century Home
a) Facts
Several Ps sued D for fire damage. Some verdicts for Ps, one for D. New P wants to use issue
preclusion for the cases where D lost.
b) Rules and Reasoning
-where there are inconsistent holdings on the issue sought to be precluded, then it would be unfair
to preclude defendants from re-litigating the issue of liability
-other times not to preclude: when the prior determination is manifestly erroneous, or there is
newly discovered or crucial evidence that wasnt available in the last case
c) Issues
-Rule 42 allows consolidation of actions, or joint hearing or trial of any or all matters in issue in
the actions. So if you see this coming, judge might be able to prevent inconsistent rulings.
-this also might resolve itself by forming a pattern, where D can settle based on the likely
outcome based on the past cases
-Rest of Judgments-party is precluded from re-litigating an issue w/ another party unless he
lacked full and fair opportunity in first action or other circumstances including: procedural
differences, new party could have joined first action, determination is inconsistent w/ another of
same issue, would foreclose opportunity to reconsider issue of law etc
E. Limits to Preclusion
1. Claim
-Rest of Judgments suggests reasons to not apply claim preclusion: parties have expressly or
implicitly agreed to allow claim splitting; court in first action reserved Ps right to bring second
action; jurisdictional limits prevented P from seeking certain forms of relief now sought
-other possible reasons: first judgment plainly inconsistent w/ statutory or constitutional scheme
(such as interpretation of statutory or constitutional law has changed); case involves recurrent
wrong and P given option to sue periodically; other extraordinary reason for overcoming policy
favoring preclusion
2. Issue Preclusion exceptions
-party could not, as matter of law, obtain review of initial action (thus judicial review must be
available for first to have preclusive effect);
-issue is one of law, and the two actions involve substantially unrelated claims or there was
intervening change in applicable legal context
-difference in procedures or factors relating to allocation of jurisdiction
-actions in small claims or traffic courts dont have preclusive effect
-burden of proof or incentive differences
3. Law of the Case
-functions w/in a single case to prevent relitigation of decided points of law. Parties get one
chance at appeal, and cant argue over that point of law again to the lower court on remand
4. Judicial Estoppel
-when party has taken a sworn position of fact in prior preceding, and benefited from that position
by receiving judgment or other award, now seeks to take a differing position to win a judgment
that would be inconsistent w/ the prior position--not allowed
-contrast issue preclusion-there, the burdened party lost previous suit. Here burdened party won
before
-some tensions w/ Rule 8(e)(2) which says party can state claims regardless of consistency, but
that rule reflects the importance of discovery to reveal the facts. Judicial estoppel applies to
sworn positions, not pleadings
VIII.
Personal Jurisdiction
A. Foundations
1. Pennoyer v. Neff
a) Facts
Mitchell sued Neff, Neff didnt appear. M won, and court sold Ns property to P. Now N is
challenging the jurisdiction of the first court to enter judgment against him. (this claim would
have been precluded if N appeared and litigated the issue).
b) Rules and Reasoning
Each state is sovereign, but there must be limits to FFC. One state cant bind another w/o limit on
their power. Two ways states can get personal juris under DPC: in personam-personally serve the
D in the state; or in rem- seize/attach Ds property w/in the state before the suit (and substitute
service ok then). Didnt do that here, so no juris.
c) Issues
-hole in Full Faith and Credit-under some circumstances it doesnt apply to judgments when court
had no jurisdiction, but only if D didnt appear and litigate the issue. If D appeared and didnt
raise juris, D waived right to object.
-personal jurisd is a limit on full faith and credit
-notice-in some way about notice and fairness to D; assumption that D will know if his property
is seized. But also has to do w/ individual state sovereignty; cant serve D out of state. The D
must have sufficient contacts w/ the state to warrant jurisd
-in dicta the court says that jurisdiction can be challenged under DPC in the first lawsuit (so
supreme court can hear these cases!); but D can also default and challenge later in collateral
action (if D appears, must raise juris issue or waives the right to challenge it)
-subs vs. procedural DPC? Scholars have made both interpretations of this case
-Under Pennoyer, there is either jurisdiction for any claim, or none at all. Claim doesnt have to
be related to the state contacts
2. Waiver
-if D appears and fails to raise jurisdictional challenge, he waives that
-but D also waives right if he doesnt raise jurisdiction at the right time
-you MUST raise a 12b2 challenge in your first pleading or motion.
-Rule 12g-says that party can consolidate defenses with any other motions, but if you fail to raise
a defense in a motion when you could have, that is waived. Rule 12h says that defense of lack of
personal juris is waived if omitted from a motion as described by g
-so, D has a chance to raise 12b2 with any rule 12 motion; if he fails, that defense is waived
3. Raising the Defense
-If no preanswer motion, D must raise defense in the answer
-so options are: raise defense in rule 12 motion; raise it in answer; or fail to appear and default.
Factors to decide which is best? How strong are merits of case (cant litigate them if you default);
how much investigation needed b4 you can answer (and you get more time for answer if you
make preanswer motion); do you want to make other rule 12 motions; willing to take risk of
default
4. Millikin
-held that domicile in the state is alone sufficient to bring absent defendant w/in states
jurisdiction by means of appropriate substituted service. Due process depends on whether or not
the service is reasonably calculated to give defendant actual notice. Authority of a state over one
of its citizens is not terminated by the mere fact of his absence from the state.
5. International Shoe
a) Facts
P is challenging employment tax. State applied tax to their commissioned salesmen; P says no
jurisdiction.
b) Rules and Reasoning
Due process requires that D, if not present w/in territory, have certain minimum contacts w/ the
state such that the maintenance of the suit does not offend traditional notions of fair play and
substantial justice. D can be sued for claims relating to that contact; if subs enough, can be sued
for anything.
c) Issues
-General-defendant has such substantial contacts w/ forum state to make it fair to assert
jurisdiction there over claims unrelated to those contacts.
-Specific-defendants activities are less than for general, but there are minimum contacts as
described by Intl shoe. Defendant can be sued for claims relating to those contacts (such as
driving in the state and causing accident). Jurisdiction exists for the specific claim, but not
necessarily for others
-corporations can ALWAYS be sued in their state of incorporation or their primary state of
business
6. McGee
Court: we think it apparent that the DPC did not preclude the CA court from entering a judgment
binding on respondent. D delivered contract in CA, premiums mailed from there, insured resident
of CA. CA has a manifest interest in protecting insured residents. So there are minimum contacts
and its fair.
7. Hanson
D must have minimum contacts w/ state; here there was no office in state, no actions. Unilateral
activity of those who claim some relationship w/ nonresident D cannot satisfy requirement of
contactit is essential that there be some act by which the defendant purposefully avails itself of
the privileges of the forum state, thus invoking the benefits and protections of its laws
8. Harris v. Balk
-extended in rem jurisdiction so court could attach a debt owed to D, as long as the debtor was
served in the forum state. Attachment of intangible property was basis for in rem jurisdiction.
9. Shaffer
a) Facts
Shareholders suing the members of a board of directors of company. Court in DE attached shares
that the directors own in that state.
c) Issues
-fairness factors: burden on D, interests of forum state, Ps interest in obtaining relief.
-Court seems to assume that manufacturers are liable wherever their products are sold
-facts-maybe different if P still suing? Changes the interests
-P has burden of proving jurisdiction; but D must comply w/ discovery to determine jurisd, b/c D
implicitly agreed by making a rule 12b motion
3. Burger King
a) Facts
BK made franchise agreement w/ D. Ds franchise is in Michigan; BK headquarters in Florida.
Contract had choice of law clause, and D knew Michigan office had no real authority. He would
have a long, continuous relationship w/ BK in Florida.
b) Rules and Reasoning
Court first asks whether there are minimum contacts; and whether it is fair. P purposefully entered
into the contract w/ substantial contacts to Florida. P voluntarily entered into continuing
agreement, knowing that Mich office didnt have authority. Fair to D b/c he is sophisticated.
c) Issues
-what could D have done? Sued in Mich court first if he anticipated the litigation
-minimum contacts is not totally required, it is a sliding scale relative to fairness
4. Pavlovich
a) Facts
Companies in CA suing Pav for putting up DVD code on website. Pav says he didnt know the
companies were in CA until he was sued.
b) Rules and Reasoning
D must know they were causing harm in the state (Calder case-D knew he was harming P in CA).
Not enough that they should have known. More likely to have jurisd for website if it is
interactive; this was passive.
c) Issues
-factual changes? Maybe if D making money from the site, transacts with people from CA. Or if
P could have brought evidence that Pav did know he was causing harm in CA, probably different
result.
-maybe bad lawyering? Should P have done more discovery work to find evidence that D knew
the harmed companies were in CA?
C. General Jurisdiction
1. Jurisdiction for Claims Unrelated to Contacts?
-for people: can always sue in state of domicile; maybe if you personally serve the person w/in
the forum state (Burnham)
-for corporations: in state of incorporation and primary place of business
-what else would establish heavy enough contacts for general jurisd under the Shoe sliding scale
approach?
2. Coastal Video
a) Facts
P wants declaratory judgment that they are not infringing on Ds copyright. D says no jurisdiction
in VA. D did both internet and traditional business in VA.
b) Rules and Reasoning
For general jurisd, the contacts must be extensive, so substantial and of such a nature as to justify
suit on claims unrelated to contacts. For internet based contacts, the most reliable indicator of the
nature and extent of contact is amount of sales generated in the state, how many people in the
state access the website. Probably must have a virtual storefront (interactive).
c) Issues
-Mieczkowski-found state did have jurisd over company that got 3.2% of its gross sales from the
state, but there were also traditional business contacts. Had interactive website w/ customer
service.
-LL Bean-found jurisd where company got 6% of total sales from forum state, there was
interactive website. Said that even if you meet contacts, there is still reasonableness test.
-should sales be viewed in dollars or percent? P may prefer dollars for a big company, D might
want percent.
3. Burnham v. Superior Court
a) Facts
Couple lived in NJ, then separated. Wife and kids moved to CA, H filed for divorce in NJ. Then
H came to visit kids in CA, was served w/ process in CA. Does personal service in forum state
still give personal jurisdiction?
b) Rules and Reasoning
-Scalia-yes, b/c it has always been that way, and Shaffer didnt change that
-Brennan-Shaffer changed the way we think about this, but here the contacts are sufficient and its
fair (so Brennan might find no jurisd under different facts)
c) Issues
-no majority opinion here, so its not clear what the law actually should be
-what is this case holding? Is it saying personal service always enough (thus a new form of
general jurisd), or just when its fair, or just for divorce claims?
D. Consent
1. Carnival Cruise Lines
a) Facts
P injured on cruise, tickets had a forum selection clause in small print. Enforceable?
b) Rules and Reasoning
Forum selection clauses are generally enforceable, as long as they are reasonable (there are valid
business reasons for it) and its not done to discourage valid claims.
c) Issues
-role of consent-in many settings, a preceding agreement can manipulate jurisdiction through use
of contract. Limited by contract principles, and other ideas of fairness and public policy.
-the different types of clauses will appear in different types of situations; most will not be
enforceable for a personal injury suit
-court will consider the circumstances when deciding to enforce
2. National Equipment Rental
-Supreme Court upheld a consent to jurisdiction clause
-these clauses permit one party to sue the consenting party in a forum, and that party has waived
their right to challenge jurisd
-BUT it doesnt require that suit be brought in that forum
3. Types of Consent Agreements
a) Consent to Jurisdiction
-party waives their right to challenge jurisd if they are sued in particular forum; still allows suits
in other forums
b) Choice of Law
-a particular jurisdictions laws will apply, but doesnt set where the suit will be brought
c) Forum Selection
-the suit MUST be brought in a particular jurisdiction
d) Arbitration
-parties agree to arbitrate usually in a particular forum, according to particular rules
-basically a special kind of forum selection and choice of law clause
e) Cognovit
-a confession of judgment, where party signing it agrees that other party may enter judgment
against them w/o further notice or process, not appealable (would have to reopen judgment)
-SC upheld this, but in limited circumstances involving sophisticated parties, clause was
negotiated for, lawyers present
4. Malpractice Issues?
-a lawyer must consider whether a client would benefit from some kind of forum selection clause;
must consider whether you really need it, and whether it would be valid under the circumstances
-but lawyer doesnt have to include one in every agreement; that might be harmful since it could
discredit the client to the court if there are many unenforceable provisions in the contract
E. Notice
1. Notice after Pennoyer
-in Pennoyer, it seemed that notice by publication would be ok for in rem jurisd. So the NY law in
Mullane assumed this was still valid.
-Wuchter--SC considered a NJ law that gave personal jurisd over nonresident motorists, but
didnt require notice to be given to the defendant. Even though D had actual notice, Court struck
down the law. So actual notice may not be important.
2. RR v. Mottley
a) Facts
Mottleys settled a claim in exchange for free RR passes. Then Congress passes law banning free
passes; RR refuses to honor passes. Mottleys sue for breach of contract in federal court, and plan
to argue the law is unconstitutional.
b) Rules and Reasoning
District court did not have jurisd to hear this case. The plaintiffs statement of his claim does not
arise under the Constitution or federal law. Doesnt matter if the P has a federal law anticipated
response to a defense. This is the well-pleaded complaint rule.
c) Issues
-SC raised the issue of jurisdiction here though no one in lower courts did; anyone can raise
FSMJ challenge at any time (courts very concerned about having FSMJ, federalism issues)
-if the parties were switched, there might be no FSMJ. NOT the case that any important federal
issue will be heard by federal court
-SC did hear an appeal of this case after it was remanded; shows how Art III SMJ is broader than
original jursid under 1331
-Congress could change the result in Mottley by amending 1331, since the statute is narrower
than what is allowed under Art III (should they? This would greatly expand FSMJ)
-problems w/ well-pleaded complaint rule? Good b/c it makes court decide jurisd at beginning of
case; but now most federal claims will be decided in state court (few will be appealed to SC)
-common federal claims: infringing copyright, civil rights/14th A violation
3. Other areas of FSMJ
-importance of the federal interest-should not be enough under Mottley, but some courts have
found jurisd when federal govt or law is closely related to claim
-declaratory judgments- potential defendant seeks declaratory judgment under the federal
Declaratory Judgment Act; court asks whether a federal court would have had jurisdiction if the
potential plaintiff had brought a coercive suit in the declaratory action. Supreme Court seems to
take narrow view that a party cannot seek declaratory relief on a federal issue, if the opposing
party would have a nonfederal claim (b/c the party would not be able to sue coercively in federal
court) (law here is NOT clear!)
-enforcement of federal judgments-federal courts have power to enforce their own judgments (so
good idea to enter judgment when settling); but claim preclusion based on federal judgment is a
defense, so it doesnt arise under (same for accord and satisfaction!)
4. Challenging FSMJ
-D can move to dismiss under 12b1 (subject matter jurisd) or 12b6 (failure to state a claim)
-if D wins 12b1, the P can refile in state court. But cant refile after a 12b6 dismissal b/c of claim
preclusion. Good idea to file both motions
-could appeal the 12b6, though, claiming lack of FSMJ
-can raise 12b1 issue at any time, even after making other rule 12 motions (see rule 12h3)
5. Collateral Attack
1-D appears, challenges FSM, and loses. No collateral attack available
2-D appears, does not challenge FSMJ; generally cant attack collaterally. Possible exception: if
Congress intends that a particular proceeding may be attacked collaterally.
-a mere hope for an extreme punitive damages award cannot be the sole basis for jurisdiction
Aggregation of claims
-single P w/ unrelated claims against one D may aggregate
-two Ps with separate and distinct claims against same D may NOT aggregate
-but two Ps w/ related claims may aggregate (but might require at least one have a claim over the
limit)
-multiple parties-value of the total interest is used if the interest is common and undivided
-class actions-supreme court said all class members must meet the limit (but some lower courts
think 1367 overrules this, not clear)
-counterclaims-if compulsory, and first claim satisfies amount, the CC is ok. If permissive, the
amount must meet the limit independently.
C. Supplemental Jurisdiction
1. 28 USC 1367
-grants original jurisd over claims that the district court could NOT hear independently. OK b/c
the claims must be so related to be considered the same constitutional case
-(a)- except as provided in (b) and (c), when there is a case where district court has original
jurisd, court has suppl jurisd over all other claims that are so related to claims in the action that
they form part of the same case (think about characterizing facts to show the claims are more/less
related). Applies to 1331, arising under jurisd. Includes claims that involve joinder or
intervention of addl parties
-(b)-applies to 1332 diversity jurisd; no suppl jurisd over claims by Ps against persons made
parties under [several joinder rules] or over persons joined as plaintiffs when exercising suppl
jurisd would be inconsistent w/ 1332 (so, when joining parties means there is no longer complete
diversity there is no suppl jurisd). BUT OK if parties joined by D!!!
-(c)-district court MAY decline suppl jurisd over a claim that raises a novel or complex issue of
state law; court has dismissed all claims over which it had original jurisd; other compelling
reasons etc.
2. Jin v. Ministry of State Security
a) Facts
Ps suing Chinese group under RICO act and for state law defamation. D says no suppl jurisd over
state claim.
b) Rules and Reasoning
For suppl jurisd, the claim must share a common nucleus of operative facts. That is met here.
Also, the state law issue is not too complex just b/c it involves several states libel laws.
c) Issues
-1367(c) involves judicial discretion; court may decide to remand the suppl claim to state court.
Very fact based inquiry
D. Removal
1. 28 USC 1441
-(a)- civil action brought in state court of which district court has original jurisdiction may be
removed by D to district court
-(b)- when district court has original jurisdiction b/c claim arises from Constitution or fed law, the
case is removable w/o regard to citizenship. Any other action is removable only if NONE of the
defendants is a citizen of the State in which such action is brought. Why? Point of diversity is
avoiding bias, so the defendant shouldnt be unhappy if he is in his home state.
-(c)-if a separate and independent claim w/in 1331 jurisd is joined w/ otherwise non-removable
claims, the entire case can be removed and heard, or district court may decide to remand state law
issues (some constitutional issues here?)
2. Procedure for Removal
28 USC 1446-D must file notice of removal, a short and plain statement signed pursuant to Rule
11
-D must file notice w/in 30 days of receipt of initial pleading by D; D also has 30 days after any
amendment/motion/paper that would make the case removable, but NOT after 1 year after
commencement of suit
3. Caterpillar
a) Facts
Worker suing manufacturer and service co for personal injury, no diversity. His insurance co
intervenes as P. Then worker settles w/ service co and manufacturer moves for removal. Granted
wrongly. Later insurance settles w/ service co.
b) Rules and Reasoning
SC says the district court should not have allowed removal. There was not complete diversity.
But, since when the case was decided there was complete diversity, Court lets verdict stand.
c) Issues
-compare this to Farouki, where D was actually a citizen by the time court was considering
diversity but they only looked to diversity at the time complaint was filed
X. Joinder
A. Background
1. Broad Joinder
-a distinguishing feature of modern US process, along w/ broad discovery
-joinder allows court to hear all the claims and join all the parties connected to a particular event
or claim
2. Questions to Ask
-which joinder rule applies?
-does that rule allow joinder of a claim or party?
-if so, is there personal jurisdiction over joined party? (special rules for impleader and
interpleader)
-if so, is there federal subject matter jurisdiction over joined party or added claim? Or
supplemental jurisdiction?
B. Joinder of Claims
1. Rule 13
-compulsory counterclaims-in pleading, party must state as a counterclaim any claim arising from
the same transaction/occurrence
-permissive counterclaims-party may state any claim against the opposing party (related or not)
-cross claims-13g says D may assert claim against co-defendant that is related to the same
trans/occurrence as the plaintiffs claim
2. Rule 18(a)
-permits joinder of all claims that P has against D, but doesnt compel it
-a party who already has a valid claim for relief against another party can assert as many
unrelated claims as he wants against that party
-the other Rules still apply to the first claim asserted
-once there is a crossclaim, the opposing party to that may assert a crossclaim as a counterclaim
(since this is a mini lawsuit, it avoid the prereq of rule 18a that it has a claim already against that
party)
-but remember, there may be jurisd issues w/ other claims
3. Plant v. Blazer
a) Facts
P sued D for federal claim, D counterclaimed for unpaid debt. D won, P says no jurisd over Ds
claim.
b) Rules and Reasoning
To have supplemental jurisd over a counterclaim w/o an independent basis of FSMJ, the
counterclaim must be compulsory. Then it would be part of same case/controversy under 1367a.
Court uses logical relation test-when counterclaim arises from the same aggregate of operative
facts.
c) Issues
-other tests for compulsory counterclaim-same transaction or occurrence (rule 13); largely the
same issues of law and fact are addressed
-if this was a diversity case, 1367b would apply, BUT 1367b only applies to claims by plaintiff,
NOT defendant
-federal courts have exclusive jurisd over some claims (securities, patent, copyright)
-this is related to preclusion too, since compulsory counterclaims cant be filed later
4. Pleading
-in pleading, D may plead denial (no liability, it was someone else); affirmative defense
(contributory negligence); any counterclaim against P, cross claim against co-D (same trans or
occ); implead third party D
-party can also amend to add a claim, or file a supplemental pleading
5. Great Lakes v. Cooper
-GL sued for state law claim, D counterclaimed for federal claim. State law claim dismissed,
since there was no arising under jurisd. Then GL refiles state claim as a counterclaim, and this is
compulsory since it arose from same transaction. Now GL has suppl federal jurisd!
C. Joinder of Parties
1. Rule 20
-may join in one action as Ps if they assert a right arising from the same transaction AND there is
a question of law or fact common to all Ps
-same for joining more than one defendant
2. Mosley v. General Motors
a) Facts
Ps are employees, former employees, and job applicants suing GM for racial or gender
discrimination in many forms.
b) Rules and Reasoning
Ps may join if they meet reqs of Rule 20. Same transaction if there is a logical relationship btw
the claims; common issue doesnt require that all are common. VERY broad test.
c) Issues
-why join suits? Good for Ps who want to show pattern of bad behavior; also helps w/ issue
preclusion to prevent inconsistent outcomes (remember Century Home)
-but, if these plaintiffs have a new discrimination claim it will probably be considered
compulsory (since the joinder was so broad) and it will be precluded. The scope of joinder relates
to preclusion.
-P not allowed to file lots of related claims hoping for a good judge; must say whether she has
similar claims filed
-also Rule 42b allows judge to separate claims for trial, this is meant to solve some of the broad
joinder problems
D. Impleader
1. Rule 14
-allows D to bring in a third party who is or may be liable to the third party plaintiff for all or
party of the plaintiffs claim against the third party plaintiff
-depends on the substantive law whether third party will be liable (contribution from joint
tortfeasors or indemnity)
-rule 14b-plaintiff can implead person who may be liable for counterclm
-must make the motion to implead w/in 10 days after serving original answer; if D joins later,
court must give leave and other parties must have notice. P can resist late impleading (motion to
strike)
2. Price v. CTB
a) Facts
P suing manuf and builder for defective chicken house (rule 20-same trans, common issue of
fact). Builder impleads nail maker.
b) Rules and Reasoning
Nail maker must be liable for indemnity if builder loses. State allows this, so joinder is proper.
c) Issues
-court may not allow late impleading if it was unreasonable to wait that long
-cant implead a party that you want to blame instead of yourself; cant say its him, not me.
The third party D must be liable only if the third party P is found liable to P.
3. Rule 4--100 Mile Bulge
-gives personal jurisd over a person joined under rule 14 who is served in a place (in the US) not
more than 100 miles from the place from which summons was issued
-constitutional? 100 miles not a big deal today
4. SMJ over Impleaded Party
-there must be either original jurisd over the impleaded claim, or supplemental jurisd
-1367a-allows suppl jurisd over the impleaded claim IF the original jurisd is based on federal
question (same case or controversy)
-1367b-if original jurisd is based on diversity, the D can implead any party for claim (who meets
rule 14) since 1367b only applies to claims by plaintiffs
-but if plaintiff files a claim against the third party D, that can NOT be inconsistent w/ diversity
(there must still be complete diversity)
5. Kroger
a) Facts
P (IA) sues Power co (NB). Power co impleads Equip co (IA/NB). Equips answer is not clear
about citizenship. Then P sues Equip co, thinking there is diversity. Claim against Power co
dropped. Left w/ P v. Equip co.
b) Rules and Reasoning
Lower courts said Equip co is estopped from bringing up lack of complete diversity b/c they
waited so long to bring this up. SC reverses: no jurisdiction. There must still be complete
diversity for claims by P.
c) Issues
-this is enacted in 28 USC 1367b
-what can P do now? Sue Equip co in state court. Many states have savings statutes that will
allow P to sue even though stat of limits has probably run for state claim.
E. Class Actions
1. Certification
-For all class actions, the class must be certified. Class certification has two stages of
qualifications that must be met
a) Rule 23(a)
(1) Numerosity
-there must be enough members to make it worth while
-from hundreds to thousands
(2) Commonality
-class members must have common interests and issues for litigation
-court may certify class for liability, and break it down for damages
-may need to narrow definition of the class
(3) Typicality
-person who is representing the class must be typical of the class in general so their interests are
aligned
(4) Representative Adequacy
-the class rep and the lawyer must be able to do a good job, have adequate resources, experience,
interests
b) Rule 23(b)
(1) Danger of Inconsistent Outcomes
-23b1-when litigating the issue in more than one case may result in inconsistent rights or
standards
(2) Injunctive/Declaratory Relief
-23b2-standard case is for civil rights claim
(3) Money Damages
-23b3-other claims seeking damages
-might be many small claims (each not enough for individual suit) or mass torts
c) Consequences
-certification greatly increases stakes for the defendant (even small claims could have major
impact in aggregate); likely to settle as a result
-powerful negotiating tool for plaintiffs, and easier to show pattern of discrimination
-which category of 23(b) affects notice requirements
-judgment in class action presumptively binds all members
-defining the class-important to make sure there are common rights, but also to prevent mootness
by broadening class
-if not certified, the claims may go away if they are too small to bring individually
d) Appeal
-would think no appeal since this isnt a final judgment
-but rule 23(f) says court of appeals MAY in its discretion permit an appeal if made w/in 10 days
after entry of certification order
-this is a unique appeals provision
e) Notice
-23c2A-court may direct appropriate notice to the class for 23b1 or 2 classes (amended, before no
need for notice here). This may affect certification, since members who disagree will find out and
challenge it. Could even be method to decide whether there is commonality, whether class should
be split/redefined.
-23c2B-for 23b3 classes, members must get individual notice by mail to all those reasonably
identifiable (paid for by P, may affect adequacy of rep if they cant pay). Rule 23b3 also requires
class members to have an option to opt-out.
f) Choosing Counsel
-rule 23(g) says the court must appoint counsel (unless statute provides otherwise), must be
adequate representation
-factors to consider? Experience, available resources, knowledge of applicable law, work already
done on the case, conflicts of interest (even if not professional ethical concerns)
-if counsel wants to do case on small budget, that may suggest inadequate representation
2. Heaven
a) Facts
P 23b3 class suing D under lending laws. D counterclaims against some members.
b) Rules and Reasoning
The counterclaims are compulsory. These would require multiple separate factual determinations,
would be too unwieldy. Rule 23b3 allows court to deny certification if difficulties are likely in the
management of the class action.
c) Issues
-Rule 23b3 category requires that class action be superior to other available methods (not
required under b1 or b2)
-but court could also have denied supplemental jurisd to the counterclaims under 1367c, which
gives court discretion to decline jurisd in exceptional circumstances
3. Hansberry
a) Facts
Ps are homeowners suing to enforce racially restrictive covenant. In first suit, they falsely stated
that covenant was signed. In this suit, D wants to say it wasnt signed, and P says they are
precluded b/c they are part of P class in first suit.
b) Rules and Reasoning
A stipulation is not an actual determination, so no issue preclusion. But SC can only hear federal
questions anyway. Denial of due process to bind class members here b/c they werent adequately
represented. Also, collateral attack based on inadequate rep in class action is allowed.
c) Issues
-similar to Richards v. Jefferson county-cant preclude a person who wasnt a party to first suit
and didnt have notice
-if Hansberry showed up to the first suit and argued there wasnt adequate rep, and lost, this suit
would be precluded b/c he litigated the issue before. But if Hansberry was NOT there when
certification was decided, no preclusion b/c not a party to that.
-implication-if party was adequately represented, he is bound
-does this mean that every class member can collaterally challenge if class loses? Not likely to
happen, they wont prevail if there is precedent already saying no (similar to Century Home)
-alternative strategy-Hansberry could have tried to reopen judgment b/c of collusion in the first
suit
4. Shutts
a) Facts
Ps claim that D Phillips owes them interest on royalties. Large class, few are residents of forum
state. P wins, and Phillips appeals to state court saying court didnt have personal jurisd over the
absent plaintiffs.
b) Rules and Reasoning
Supreme Court accepts that absent class members are like defendants, but it is a difference of
degree. Looks to circumstances of the case per Mullane to decide if due process requires more
notice. Notice here was fine (individual notice by mail to reasonably identifiable members)
c) Issues
-does this mean individual notice is required constitutionally? Not clear; makes Mullane-inquiry
important for class actions too
-if party did have adequate notice, it makes it harder to argue inadequate representation
5. Class Actions in Federal Courts
-for diversity jurisdiction, only the citizenship of the class representative is considered
-also, each member of the class must meet the amount in controversy
-congress passed laws requiring extra specificity in securities fraud class actions, and also law
preempting state securities fraud class actions. So a defendant can remove to federal court
(interesting exception to well-pleaded complaint rule) and then move to dismiss for lack of
specificity
6. Financing of Class Actions
1-paid for by an affinity group, on hourly rate
2-common fund-if there are damages, lawyer can get paid from the common damage fund. Either
paid using lodestar method (reasonable hours times reasonable fee) or percent of the award
(looks like contingency fee)
-problem w/ regular contingency fees, since lawyer cant get all the clients to agree on it
3-fee shifting statutes are common in a lot of class actions
-if more than one method of payment applies, court must pick one
7. Settlement
-most class actions settle
-but there are special conflicts btw lawyer and class for settling class actions b/c clients are not
there to hold lawyer accountable, so lawyer may not negotiate as hard for the clients since his fee
will decrease; another issue is it is hard to value injunctive relief to assess whether the lawyers
fee is fair or not
-also different Rules requirements for settling class action-Rule 23(e) says the court must approve
the settlement. Must give notice to class members of proposed settlement, and hearing on
fairness.
8. Amchem
a) Facts
Thousand of asbestos lawsuits. Plaintiffs have pending suits and want to settle w/ Ds. Ds want
global settlement of all future claims too, to preclude more suits. They ask for certification and
approval of settlement at the same time.
b) Rules and Reasoning
Lower court should not have certified this class. The class members have very different interests
(some are sick now, others just exposed), and inadequate representation since pending suits
lawyers are representing future claims too.
c) Issues
-How to fix? Might split the class and get new lawyers. But maybe the Rules cant handle
settlement classes procedurally.
-settlement class might be fundamentally unfair