CP2 Thomas Spring 2012 B Lindsey

SUFFICIENCY OF COMPLAINT
FRCP 3: A civil action commences by filing a complaint with the court.

SOP not required for commencement if SOP done w/in 120 days.
Does not always toll applicable state SOL in diversity cases.
o Where state law provides a contrary SOL, R3 will not give state law cause of action a longer life
in federal court than in state court.
C/O defectively plead under R8, may not serve to toll SOL.
In diversity, where state law requires SOP for commencement, the court may consider case as not yet
commenced, and therefore, not yet ripe for removal. EERIE ISSUE!

FRCP 7 Pleadings.
(a) Only these pleadings are allowed:
(1)
(2)
(3)
(4)
(5)
(6)
(7)

a complaint;
an answer to a complaint;
an answer to a counterclaim designated as a counterclaim;
an answer to a crossclaim;
a third-party complaint;
an answer to a third-party complaint; and
if the court orders one, a reply to an answer.

(b) Motions and Other Papers.

(1) A request for a court order must be made by motion. The motion must:
(A) be in writing unless made during a hearing or trial;
(B) state with particularity the grounds for seeking the order; and
(C) state the relief sought.
(2) Rules governing captions and other matters of form in pleadings apply to motions and other papers.
Written motion must be signed, as per R11, by partys counsel, or by party, if pro se. Sanctions may be
imposed for frivolous claims.
FRCP 8(a) Pleading must contain:
(1) Short & plain statement of grounds for courts J, unless court already has J, & the claim needs no new
jurisdictional support
(2) Short & plain statement of claim showing pleader is entitled to relief
(3) Demand for the relief sought, which may include relief in the alternative or different types of relief.
Grounds for J must be plainly stated
o Diversity must allege citizenship of each party & amount > $75K.
o FQ must identify laws that create J.
o PJ does not have to be alleged in c/o, only SMJ.
FRCP 12(b)(6) MTD for failure to state a claim upon which relief may be granted.

Court accepts all well plead allegations of P as true and determines if claim is fatally flawed in legal
premise & destined to fail.

o Usually where P asserts a legal theory that is not cognizable as a matter of law or has a factual
tale that is implausible.
Court will not accept as true bald assertions, conclusions, or inferences, legal conclusions masquerading
as facts, or conclusions contradicted by complaints own exhibits.
2 step process:
o Legal conclusions isolated to uncover pleadings purely factual allegations
o These allegations will be presumed true and then examined for plausibility.
BOP is on moving party & even an unopposed MTD is not granted by default.

FRCP 12(e) Motion for a more definitive statement.

If pleading is vague or ambiguous so that a responsive pleading cannot be prepared, responding party
need not file a response, but may ask court to compel P to serve a more definitive statement.

FRCP 12(f) Motion to strike insufficient defense.

Access Now v. South West: P filed suit to force D to make its website more readily accessible for blind access
and asserts that website is a place of public accommodation w/in meaning of ADA.

P has failed to state a claim upon which relief may be granted.

o Website is not a place of public accommodation
o P has not plead a nexus between website & physical concrete place of public accommodation.

Swierkiewicz v Sorema: P filed lawsuit for civil rights violations & ADEA discrimination. T.C. dismissed citing
P failed to plead a prima facie case of discrimination.

TWIQBAL DID NOT OVERRULE THIS AS PER THOMAS! Discuss this as an alternative argument
& use Swierkiewicz & McDonnel Douglas to argue for a lower pleading standard in discrimination suit.
o Bring Twiqbal dissents up as well.
Prima facie case is an evidentiary standard, not a pleading standard. Issue is not if P will ultimately
prevail, but if P is entitled to offer evidence.
P does not need to plead specific facts if able to bring suit based on circumstantial evidence. P does not
have to plead more facts at the pleading stage than would be required to prevail.
FRCP 8 only requires a short & plain statement showing pleader is entitled to relief so as to give D fair
notice of what Ps claim is & grounds upon which it rests.

McDonnel Douglas v. Green: Set standard for proving prima facie case of discrimination and allows P to go to
court with only circumstantial evidence. 4 elements of proof:
(1)
(2)
(3)
(4)

Membership in a protected group.

Qualification for the job in question.
An adverse employment action.
Circumstances that support an inference of discrimination.

Conley v Gibson: C/o should not be dismissed for failure to state a claim, unless it appears beyond doubt, that P
can prove no set of facts in support of claim which would entitle him to relief. P does not need to allege facts
that establish all elements of the claim.
PLAUSIBILITY vs. NOTICE PLEADING

D perspective is that notice pleading allows P to go fishing.

Bell Atlantic v Twombly: If Allegations Legal Conclusions = Lawful Conduct, then dismiss.

Pleading calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of
illegal agreement.
o Allegations of parallel conduct & a bare assertion of conspiracy not enough.
o Allegations require further factual enhancements to push claim from possibility to plausibility of
entitlement to relief.
Other plausible explanations for D behavior besides conspiracy.
o Discovery can be expensive & abuse cannot be solved by careful scrutiny of discovery & MSJ.
The threat of discovery expense will push D to settle prior to even reaching that far.
Not setting a heightened pleading standard, but P must plead enough facts to state a prima facie claim
for relief.
DISSENT: FRCP 8 was designed to not keep litigants out. Merits of a claim would be sorted out during
a flexible pre-trial process.

Ashcroft v Iqbal: P detained following 9/11 attacks. P claims he was subjected to harsh treatment as a matter of
policy & filed suit against a number of public officials. P needs to show that D knew of the maltreatment.

Mere conclusions plead by P are not entitled to the assumption of truth when considering for a MTD.
Legal conclusions must be supported by factual allegations.
It is the conclusory nature of allegations, rather than their extravagantly fanciful nature, that disentitles
them to the presumption of truth.
P cannot take necessary elements to prove a claim & plead that D did those things to satisfy Twombly.
DISSENT: No principled basis for majoritys disregard of the allegations linking Ashcroft to
subordinates discrimination.

FRCP 10 Forms of Pleadings

a) Every pleading must have a caption with the courts name, title, file number & R7 designation. Title of
c/o must name all parties; title of other pleadings, after naming the first party on each side, may refer
generally to other parties.
b) Party must state its claims/defenses in numbered paragraphs, each limited as far as practicable to a
single set of circumstances. Later pleading may reference earlier pleading. Each claim founded on a
separate transaction or occurrence and each defense other than a denial, must be stated in a separate
court or defense.
c) Statement in a pleading may be adopted by reference elsewhere in the same pleading or in any other
pleading or motion. A copy of a written instrument that is an exhibit to a pleading is a part of the
pleading for all purposes.
Omitting party names, such as with use of et all in a notice of appeal may be fatal as court can
consider it an appeal only against those parties named.

BURDENS OF PRODUCTION, PLEADING AND PERSUASION.

B.o. Production: Party has burden of putting sufficient evidence in the record supporting all essential
elements of claim.
o If party presents no or insufficient evidence, judge may decide cases as a matter of law.
o Must establish prima facie case & may move between parties as case moves.
B.o. Persuasion: Level of convincing force that a party bears.
B.o. Pleading: Allegations that are required by each party in the pleadings.
Considerations of allocation of burden of pleading is based on policy, fairness, and probability.
o Policy: Elements may favor one party or another based on the particular kind of litigation &
social reasons.
This is used to handicap one party.
o Fairness: Nature of a particular element may indicate that evidence relating to it lies more w/in
the control of one party, w/ suggests the fairness of allocating that element to him.
o Probability: Consider situation & who will benefit from departure from supposed norm and place
burden on them.
May relate to situation that gave rise to litigation or type of litigation.
Gomez v Toledo: P filed suit against police. D moved to dismiss on basis that P failed to plead that D is
not entitled to immunity by acting in bad faith.
o Statute requires P to plead two things for cause of action under 1983.
P was deprived of a federal right.
Person who deprived him acted under color of law.
o Qualified immunity is an available defense. Burden of pleading defenses is on D.
P does not have to anticipate possible defenses D may raise.
Whether immunity exists depends on facts peculiarly within knowledge and control of D.
No way for P to know this information in advance.

HEIGHTENED PLEADING STANDARDS

Special damages must be plead specially. R 9(g)

Tellabs v Makor: Congress passed PSLRA requiring P to plead with particularity the facts constituting
the alleged violation, and the facts alleging scienter (intention to deceive, manipulate, or defraud). P
must plead facts giving rise to a strong inference that D acted with the required state of mind.
o Congress has the power to create higher pleading standard.
o When deciding on 12(b)(6) motion court must take all plead facts as true and consider plausible
non culpable explanations for Ds conduct as well as inferences favoring P.
Inference of scienter need not be irrefutable or even most plausible.
Complaint will survive only if a reasonable person would deem inferences of scienter
cogent & at least as compelling as any opposing inference.

FRCP 9(b) For fraud or mistake, a party must state with particularity the circumstances constituting fraud or
mistake. Malice, intent, knowledge, and other conditions of a persons mind may be alleged generally.

Information and belief pleading is not usually allowed, unless the party can show:
o The essential information is exclusively within the other partys control; &
o The specific facts upon which the information & belief is based. (pg. 366)
This applies to all portions of the pleading having to do with fraud.
P required to plead to plead content of the statement claimed to be false & falsity of the statement. Must
plead circumstances in sufficient detail to make clear that the statement was one of material fact, rather
than the kind of opinion or prophecy on which people are not entitled to rely.
Amount of particularity required varies with the amount of access the pleader has to the specific facts.
o Consider:
Complexity of the claim.
Relationship of the parties.
Context in which fraud/mistake occurred.
Amount of specificity necessary for adverse party to prepare a responsive pleading.
o Usually required pleader to allege:
Time, place & contents of false statements/omissions & explain how they were
fraudulent.
Identity of the person making the misrepresentation.
How the misrepresentation misled the plaintiff.
What the speaker gained from the fraud.
o Dont forget about the plausible requirement from Twombly.

PLEADING INCONSISTENT THEORIES

McCormick v Kopman: Husband of P killed in accident. P filed suit against D1 alleging negligence and
denying contributory negligence & against D2 under dram shop act, stating that D2 allowed deceased to
drink too much.
o Mutually exclusive theories of recovery may be plead together.
Especially permitted when there is genuine doubt as to the facts & what evidence will
ultimately show.
o Not grounds for dismissal that allegations in one count contradict those in another count.
o Alternative fact allegations made in good faith & based on genuine doubt, are not admissions, so
as to be admissible in evidence against the pleader.
Objective of alternative pleading is to relieve the pleader of the necessity & therefore the
risk of making a binding choice.
o P not required to elect between alternative allegations at close of evidence.
P allowed to produce proof in support of both allegations & leave jury to determine the
facts.

FRCP 8(d)(3) A party may state as many separate claims or defenses that it has, regardless of consistency.

Inconsistent pleading only when legitimate doubt as to the true facts exist.
Factual allegation within each claim or defense cannot be inconsistent with the right of recovery. (pg.
355)

ETHICAL CONSTRAINTS & SANCTIONS

Zuk v Eastern Penn: P filed suit on meritless copyright claim. P attorney did inadequate research and
showed little knowledge of copyright law. Filed suit though claims barred by SOL. D moved for
attorney fees and sanctions. Court granted $15,000 in fees against P & his attorney jointly.
o Because court did not make finding of willful bad faith & failed to give P/C an opportunity to
defend, it was an abuse of discretion to award sanctions under 28 USC 1927.
o No error to impose sanctions pursuant to R11.
Reasonable inquiry into facts would have found obvious SOL issues.
P/C research was faulty. P/C weak grasp of copyright law caused pursuit of a course of a
course of conduct not warranted by existing law.
P/C could have presented case in another manner, as a novel issue of law, and court may
have had a different outcome. Here the brief was evidence of a cursory reading of
copyright laws & a strained analysis of an inappropriate case.
OBJECTIVE BAD FAITH = SANCTIONS

FRCP 11

Signature should be from an individual attorney, from law firm may not be sufficient.
Reasonable inquiry is required. (pg. 394)
o Minimal effort to search public sources and obtain information.
o Adequately research the factual basis for claims.
o Empty head, pure heart is no excuse.
o Reliance on information from a lease agreement may not be justified if no reasonable inquiry
was made.
o May not rely solely on clients claim interpretation, but must perform an independent claim
analysis.
o R 11 does not preclude signer to rely on information from other persons.
Safe harbor: opposing counsel serves motion on other party, who has 21 days to withdraw w/o penalty.
o Court can raise sua sponte, then there is no safe harbor.
Court must consider spirit of R 11 & ability of counsel to pay in setting sanction amount. (pg. 405)
o Deter wrongdoer not compensate the wronged.
o Distinguish R 11 from 28 USC 1927 that seeks to compensate wronged party.
o Payment of fees to an opposing party requires a motion by the party, not if raised by court.
Fees limited to amount directly related to violation.
o Nonmonetary damages may be ordered.
o Financial status of offender will be considered.
RULE 11 DOES NOT APPLY TO DISCOVERY! THAT IS GOVERNED BY FRCP 26-37.

28 U.S.C. 1927 Any attorney or other person admitted to conduct cases in any court of the United States or
any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be
required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred
because of such conduct.

RESPONDING TO COMPLAINT ANSWERS/COUNTERCLAIMS

21 day clock to answer complaint unless under rule 4(d) waiver of SOP- which gives 60 days.
If you file 12(b)(6) & motion is denied, then you only get 14 days to answer, even if you had more than
that to answer at the time motion was filed.
o If you need more time then you call opposing counsel & ask for them to not oppose a motion for
additional time.
o Can also file a motion with the court to request more time & have legitimate reason to give to the
court.
Insufficient denial can be treated as an admission.
Zielinski v Philadelphia: P requested ruling that an ineffective denial made in good faith be deemed an
admission by D. P requested D1 to admit that it owned the forklift & that it was being operated by an EE
of D1 @ time of the accident & collision. D submitted a general denial. It was later learned that forklift
operator was not an EE of D1, but of D2, but that D1 owned the forklift. P requested court to find as a
matter of law that D1 had admitted to the allegation due to inefficient denial.
o Insurance company of D1 is the same as D2, so there is no prejudice against either party to hold
D1 responsible for EE of D2.
o Answer of D1 was an ineffective denial. D is required under FRCP 8(b) to specifically deny
when denying only part of an admission.
o Equity requires D be estopped from denying agency or its inaccurate statements would deprive P
of right of action.
Equitable estoppel will be applied to prevent a party from taking advantage of SOL
where P has been misled by conduct of such party.
Admission may be used strategically, as the issue will not be in dispute and this will prevent party from
presenting evidence in regards to this issue that may be prejudicial. Admission also prevents CE & RJ!
o Fuentes v Tucker: Admission of liability by D renders evidence to prove issue unnecessary &
therefore inadmissible.
Ds intoxication could have no bearing on wrongful death economic damages due to
parents, therefore the evidence was not material & its admission was in error.

FRCP 8(b) & (c)

(b) Defenses; Admissions and Denials.
(1) In responding to a pleading, a party must:
(A) state in short and plain terms its defenses to each claim asserted against it; and
(B) admit or deny the allegations asserted against it by an opposing party.
(2) Denial must fairly respond to the substance of the allegation.
(3) Party that intends in good faith to deny all the allegations of a pleading--including the jurisdictional
grounds--may do so by a general denial. A party that does not intend to deny all the allegations must
either specifically deny designated allegations or generally deny all except those specifically admitted.
(4) Party that intends to deny only part of an allegation must admit the part that is true and deny the rest.
(5) Party that lacks knowledge or information sufficient to form a belief about the truth of an allegation
must so state, and the statement has the effect of a denial.
(6) Allegation--other than one relating to the amount of damages--is admitted if responsive pleading is
required and the allegation is not denied. If responsive pleading not required, an allegation is considered
denied or avoided.
(c) Affirmative Defenses.
(1) In responding to a pleading, party must affirmatively state any avoidance or affirmative defense,
including:
accord and satisfaction; arbitration and award; assumption of risk; contributory negligence;
duress; estoppel; failure of consideration; fraud; illegality; injury by fellow servant; laches;
license; payment; release; res judicata; statute of frauds; statute of limitations; and waiver.
(2) If a party mistakenly designates a defense as a counterclaim, or a counterclaim as a defense, the court
must, if justice requires, treat the pleading as though it were correctly designated, and may impose terms
for doing so.

FRCP 13

Courts will ALWAYS have SMJ over compulsory counterclaims.

To be compulsory it must be from same transaction or occurrence and no new parties need to be added.
o Common issues of fact or law.
o Logical relationship. Most Used
o Would same evidence be used to support or refute the claim & counterclaim.
o Would claim be barred by res judicata?
Compulsory claims under 13(a) must be asserted or are lost. Exceptions: (pg. 500)
o Claim has already been filed in another suit.
o Opposing party has not obtained PJ over party who has a potential counterclaim.
o If claim has not accrued yet.
o If other party asserting only equitable relief, & counterclaim is for money. (pg. 502).
R 13(a) only applies when party has to file a responsive pleading.
o So if P sues D, & D gets dismissed via 12(b) motion, D never had to file a responsive pleading,
so he loses no claims that would have been compulsory under 13(a).
Permissive counterclaim need only be a claim against an opposing party that has already asserted a
claim. No res judicata if not brought.
Permissive should need separate basis for jurisdiction, but see below in Jones v Ford Motor.
o Only a circuit decision, so SCOTUS has not ruled on this issue.
Permissive that arise from same transaction or occurrence, but not compulsory for some reason, may
satisfy SMJ through FQ, diversity or SuppJ, under 13 28 USC 1367.
Jones v Ford Motor Company: Class action brought against Ford by consumers alleging racial
discrimination in lending. FQ under ECOA. Ford attempted to bring counter claims against named class
members and any other members of the class behind in payments to collect any amount past due.
o Here the counterclaims were permissive, not compulsory.
o The logical relationship is that one is the but-for cause of the other.
The essential facts for proving ECOA claim & collection action by Ford are not so
closely related that resolving both sets of issues in one lawsuit would yield judicial
efficiency.
o It is no longer sufficient for courts to assert that permissive counterclaims require independent
jurisdiction.
Cross claims under 13(g) are always permissive.
o Party may seek indemnification from co-party, similar to what is granted by R 14.
o Needs own jurisdiction, but as they MUST arise from same transaction/occurrence or concern
the property being sued over, they fall within SuppJ. of 28 13 USC 1367.
Cross claims & relation back. Relation back gets around SOL. (pg. 514)
o If seeking affirmative & independent relief, no relation back.
o If in the nature of recoupment, indemnity, or contribution, it is usually allowed.
13(h) authorizes use of R 19 & R 20 to join persons not yet parties, if required for a cross or
counterclaim.

AMENDING COMPLAINT & RELATION BACK

Right to amend w/in 21 days of SOP.

R 15(a) Leave to amend should be freely given by court when justice so requires.
o Consider: Has court entered a scheduling order and have scheduling deadlines passed?
Any prejudice to the other party?
Explanation of length of delay?
Time to trial? Discovery open or closed?
Amended claim based on facts and defenses already known to the parties?
R 15(b) allows a party to amend during trial, or by express or implied consent of the parties where an
issue is tried, though not actually in the pleadings.
o I.E. R 15(b) may be used to assert a claim for affirmative relief after trial, to assert a counter
claim where the evidence of the counterclaim was heard at trial.
o If parties found to have consented to try an issue, no amended pleading needs to be filed.
o But, if the other party objects to evidence of those claims, then the party must file 15(b) motion.
o R 15(c) still governs if the 15(b) relates back so as to be considered timely filed.
o Usually only denied for: bad faith, undue delay, unfair prejudice, or futility. (pg. 546).
R 15(c) governs the circumstances in which the amendment will be treated as though it was filed on the
date of the original pleading. Requires:
o SOL of the statute permits relating back;
o Claim or defense in the amended pleading arose from the same transaction or occurrence as in
the original pleading.
Consider Kedra on R 20 page. Long series of violations only one transaction.
Events have a logical relationship to the original transaction.
New allegations only add specificity, or add new claims, defenses, and facts?
Common nucleus of operative facts.
o When a new party is joined, or the name of the party against whom the claim is asserted is
changed, & is not unfair, as defined in R 15(c), for the claim against that party to be treated as if
it was raised on the date the original pleading was filed.
Party must receive notice within period allowed by R 4(m): 120 days of pleading filed.
Party must have received notice of the action that it will not be prejudiced in defending
on the merits;
Did defendant understand or should have understood that they were the correct D?
Difficulty in gathering facts or evidence from a stale claim?
Party knew or should have known that the action would have been brought against it, but
for a mistake concerning the proper partys identity. (pg. 553)
Mere mislabeling?
Mistake may be of fact or law.
Lack of knowledge of relationship of the entities, not a mistake.
No mistake to substitute name of actual D for John Doe.
Mistake as to who is vulnerable to suit? Not a mistake for R 15(c)
Civil rights P may not know who the relevant actors are & may need discovery.
Is there an actual substitution of D, or just adding a new party?
Consider delay in party seeking leave to amend.

o R 15(d) permits parties to supplement previous pleadings to encompass events that have
occurred since the earlier pleadings were filed.
Washington v Wilson: Amended complaint, which changes the name of D, will relate back to filing of
initial complaint, if it arises out of the same conduct contained in the original complaint & the new party
was aware of the action w/in 120 days of filing.
o It must have been for a mistake concerning the ID of the party.
o Where P sues and does not know the names of D, and therefore sues John Doe, there was no
mistake just unawareness & complaint will not relate back.
o Minority of circuits do not follow this rule and hold that unknown ID of defendants is a mistake
as per FRCP.
Lundry v Adaman: P sued D1, hospital where surgery was done that P claims injury from. D1 implead
D2, MD who did the surgery. P attempted to amend complaint after SOL had run to add D2 as an
additional defendant rather than a TPD. D2 was aware @ time suit was filed that P was suing hospital
concerning surgery.
o D2 would not have been liable under the theory advanced by P in original filing & no reason for
D2 to have believed P intended to sue him and only failed to do so due to a mistake.
Shared Attorney Method: When an original named party & the party sought to be added are represented
by the same attorney, the attorney is likely to have communicated to the latter party that he may very
well be joined in the action. But the attorney must become the attorney for the party within the 120 day
window. Singletary v Penn. Dept of Corrections.
Identity of Interest Method: Where the parties are so closely related in their business operations or other
activities that the institution of the action against one serves to provide notice of the litigation to the
other. Singletary v Penn. Dept of Corrections.
o Would the party have prepared a different defense or discovery?

JOINDER OF CLAIMS AND PARTIES.

FRCP 18(a) & 20
18(a) A party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or
alternative claims, as many claims as it has against an opposing party.

Court still needs to have SMJ, but P can aggregated claims against single D to reach 75K.
Party asserting claim may join any other claim to that claim & not required to be from the same case or
controversy.
Effect is to allow a party who brings a claim against another party to bring all claims against that party at
the same time.
While 18(a) may allow for new claims to be joined, the limitations of SMJ may prevent joinder.

20(a) Persons Who May Join or Be Joined.

Allows joinder of parties only where claims by or against newly joined parties arise out of the same
transaction or occurrence & common questions of law or fact.
o Do all claims arise under same law, but each claim have discrete facts?
o Separation of time between distinct events?
o Still feasible even if it reduces likelihood of relief for existing parties.
Must involve all joined parties as part of common nucleus of facts.
Not mandatory that P file against all possible parties. Unless R 19 applies.
For each party joined under R 20, SMJ must be satisfied. WATCH OUT FOR DIVERSITY!!
Kedra v City of PA: P filed civil rights suit against police offices & city for numerous civil rights
violations over a fifteen month period. P wants to try all claims at once so the jury will be influenced by
the scope of the violations.
o Although the events giving rise to Ps claims occurred over a lengthy time period, they are all
reasonably related.
o Here the claims arise out of the same transaction, occurrence or series of transactions or
occurrences for purposes of R 20(a).
o The argument P is raising is that something is going on at a managerial level to establish
commonality as the police action coordinated with repeated violations.
o Court can always sever claims after discovery.
Exxon Mobil v Allapttah: 10,000 dealers filed class action suit against Exxon under diversity. Some
claims satisfied $75k, some did not. Exxon wanted to sever claims from parties that dont have $75K
from the federal action. Now this wouldnt matter due to CAFA. There was also a second joined claim
where P was suing D in diversity and satisfied amount in controversy, but family members who did not
wanted to join.
o Where other elements of jurisdiction are present & at least one named P in the action satisfies the
amount in controversy, 1367 does authorized supplemental j over the claims of the other P in
the same case or controversy, even if those claims are less than $75K.
o Once a court has original jurisdiction over some claims in the action, it may exercise
supplemental jurisdiction over additional claims that are part of the same case or controversy.
o When the well plead complaint contains at least one claim that satisfies the amount in
controversy requirement, and there are no other relevant jurisdictional defects, the district court,
beyond all question, has original jurisdiction over that claim.
R 20(b) does allow for protective measures to sever the trials in the interest of justice.

o Would having multiple suits/claims/parties confuse jury to specific facts, or prejudice jury
against D, just by virtue of the number of claims.
I.E. 25 separate claims of discrimination tried together would likely influence jury that
discrimination was going on more so than if 25 were tried separately.
Weigh considerations of D against cost to other parties & courts.

SMJ OVER JOINED PARTIES

28 U.S.C. 1367

Grants SMJ over ALL compulsory counterclaims.

Supp J over claims sufficiently related to form part of the same case or controversy.
In Diversity no sup J on claims by P against persons made parties under R14, 19, 20 or 24 or over those
proposing to be joined under 19 or interveners under R 24.
o Need a federal anchor.
Gibbs: Claims must arise from a common nucleus of operative facts.

28 USC 1367
(a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any
civil action of which the district courts have original jurisdiction, the district courts shall have supplemental
jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that
they form part of the same case or controversy under Article III of the United States Constitution. Such
supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.
(b) In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of
this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by
plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or
over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as
plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be
inconsistent with the jurisdictional requirements of section 1332.
(c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if-(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has
original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.
(d) The period of limitations for any claim asserted under subsection (a), and for any other claim in the same
action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a),
shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law
provides for a longer tolling period.
(e) As used in this section, the term State includes the District of Columbia, the Commonwealth of Puerto
Rico, and any territory or possession of the United States.

COMPULSORY JOINDER OF PARTIES - R 19

Temple v Synthes Corp: Not necessary for all joint tortfeasors to be named D in a single lawsuit.
Potential joint tortfeasors are merely permissive parties.
Helzberg Diamond v Valley West: P signed lease w/ D with specific terms. D entered into lease with L,
and L violated terms of lease between P & D. P sued & D claims L is indispensable party.
o L was a party to be joined if possible under 19(a), as relief sought by P may affect L.
o L was not indispensable under 19(b).
None of Ls rights or obligations will be determined in a suit to which it is not a party.
Absence of L will not prejudice D. Obligations of D may be incompatible, but this is due
to D signing leases which impose inconsistent obligations on D.

FRCP 19: Party seeking to dismiss or failure to joint necessary party files a motion to join, then court will
decide if case should be dismissed if party cannot be joined. The court dismisses by ordering that the party be
joined, since the party cannot be joined as it is not feasible the case is then dismissed.

No express time limit for filing.

Only a party may file R 19 motion, but court may raise sua sponte.
Party claimed against may file a 12(b)(7) motion for failure to join a necessary party.
If absent person, whose joinder is important can be added by R 14, dismissal under 19(b) is not available
Step 1 is A(1)-(3) to determine if party is necessary. Step 2 is B, where party cannot be joined and court
must decide what to do.
o The court MUST list factors under B(1)-(4) and is considered reversible error if court doesnt.
R 19(a)(1)(A) addresses situations in which the court cannot adequately provide redress to the parties
who are before the court, unless an absentee is also brought into the case.
R 19(a)(1)(B)(i) provides that a person who claims an interest relating to the subject matter of the case
should be made a party if proceeding without that person might impair her ability to protect that interest.
R 19(a)(1)(B)(ii) provides for joinder of an absentee if adjudicating the case without her would expose
one of the original parties to a risk of multiple or inconsistent obligations.
WHY NOT FEASIBLE:
o Personal jurisdiction.
o Destroy diversity.
But could the person fairly be joined as P or D? Court has limited discretion.
o Party may be immune from suit.
19 B factors
o Adverse consequences of proceeding w/o a person:
Does suit create potential for inconsistent judgments?
Does suit potentially exhaust a fund that other party may seek compensation from?
Risk of collateral estoppel for the absent person?
Potential party shows interest in not joining? May not be significantly affected if so.
Interest represented by a party to the suit?
o Avoiding adverse consequences
Some form of relief may be unavailable, but still other forms of relief available.
Could current parties still provide some relief & judgment shaped to diminish prejudice?
Would court have to find that absent party acted improperly? Damaged reputation.
o Adequacy of a judgment.

Public interest in efficient & final disposition of suits & social interest in efficient
administration of justice & the avoidance of multiple suits.
Will persons absence leave related claims by/against that person undecided?
Inadequate if P would have to relitigate in state court to recover against absent party.
o Availability of another forum
Is there another forum in which claimant may sue existing D & other person?
Adequate remedy available in state court? Unreasonable delay?
May he file with an administrative agency & obtain adequate relief instead of court?
When no other forum available to claimant, court will usually proceed with the action.

IMPLEADER - R 14

Must be related to claim or controversy.

Joined party must be liable to part of impleading party for the damage of the other party!
May be done at any time, but leave of the court is required if done after 14 days of serving its original
answer.
Generally allowed unless done so late it unreasonably prejudices parties.
Once joined R 18 allows unrelated claims to be joined, but they are still subject to rules of Supp.J, 28
USC 1367 & SMJ.
Claims by TPD against original P are permissive counterclaims, unless P sues TPD directly, then they
may become compulsory if they fall under 13(a).
o Original Ps claim must arise from same transaction or occurrence, but is not compulsory.
Determine:
o Does rule allow joinder?
o Is there SMJ?
o Is there PJ?
Banks v City of Emeryville: P sued D in 1983 for civil rights violations when decedent died in a fire
while in police custody. In 1985 D filed third party complaint against 14 TPD, who were involved in
sale/manufacture of mattress.
o It is within the discretion of the court to allow/disallow third party complaint filed beyond the ten
day period (now 14 days) after filling of Ds answer.
o Indemnification under R14 permissible, even if no basis under which TPD would be liable to P.
o If there is any possible scenario where TPD may be liable for all or part of D liability, 3rd party
complaint allowed to stand.
Owen Equipment v Kroger: P sued D. D implead TPD. P amended c/o to add TPD as D2. Case against
D dismissed. No basis for SMJ over D2.
o 14(a) permits P to assert a claim against TPD, but does not give SMJ to court.

INTERVENTION FRCP 24

Atlantis Development Corp. v US: P laid claim to islands. P not able to sue US at that time to resolve
dispute judicially. Another party, D, showed up on islands & started building. US sued second party & P
attempted to intervene, but was denied by district court.
o P interest in having lawsuit subject to no one elses direction or meddling must be weighed
against public interest of judicial efficiency.
o P should have been joined under FRCP 19(a)(2)
A is without a friend in the litigation.
If D does not prevail in the main action, most of As claim is destroyed.
Failure to allow P an opportunity to advance its own theories of law & fact at trial will, as
a practical matter, impair or impeded its ability to protect its interests.
No Supp J under 1367(b) over claims by P against those made parties by FRCP 24.
o But, if right to intervene granted by statute, this gives J.

FRCP 24

Timely motion is required, but no set time limit for filing. Consider:
o Length of delay in seeking intervention.
o Prejudicial impact of delay on existing parties.
o Prejudice to intervenor if intervention denied.
o Anything else affecting fairness in this case?
In diversity cases, 28 USC 1367(b) withholds SuppJ from those joined under R 24 as P.
R 24(a)(1) allows a party to intervene as of right if authorized by statute.
o CAN IT BE READ NARROWLY TO BE ONLY PERMISSIVE? SEE BELOW!
R 24(a)(2) authorizes a person who is not a party to a case to intervene if three conditions are met.
o Person claims an interest relating to the property or transaction that is the subject matter suit.
Value to have parties before the court so they will be bound by judgment.
Person have a claim that would satisfy as a separate case & controversy?
Person have no right to bring independent suit, but a legally protected interest that could
be impaired by the suit.
Person will be directly, rather than remotely harmed by result of suit.
Threat of economic injury from the outcome of the litigation? Is it only speculative?
Intervenor have record of involvement on some social issue & record of advocacy.
o Interest may be impaired if the person is not allowed to participate.
Risk of stare decisis.
RJ & CE?
Not limited to strictly legal consequences.
o Interest is not adequately represented by those already in the suit.
Does intervenor & existing party share identical objectives?
Positions of parties adverse to that of intervenor?
Difference in tactics?
Representation may be inadequate.
R 24(b) allows for permissive intervention of any party who has a claim or defense that shares with the
main action a common question of law or fact.
o Permissive intervenor requires independent basis for SMJ.

o Permissive statutory impleader may result from a narrow reading of statute that appears to grant
intervention as of right. ARGUE BOTH SIDES IF POSSIBLE!
o Expressly authorizes denial of intervention if it would unduly delay or prejudice pending suit.
Complexity added that would cause delay.
Shifts focus from issues in pending action to those raised by intervenor.
Extra costs & increased risk of error.
If claim of party appears weak, court will give greater weight to concerns of delay.
24(c) sets out notice & pleading required.
o Courts are split on if failure to comply w/ 24(c) requires dismissal of motion to intervene.

R 41 Dismissal

P may dismiss w/o consent of court or parties if D has not yet filed an answer or MSJ.
o Notice of dismissal is effective when filed, but must be served on all parties.
o If D has filed motion/answer, then P has to obtain court order.
If only dismissing part of the action or defendants, see page 941 & 944.
Even after voluntary dismissal, court retains jurisdiction to award costs to D. (pg. 941).
If dismissed by order of the court, it is presumed to be w/o prejudice, unless order explicitly states
otherwise.
Dismissal is w/in the discretion of the court. Consider:
o Impairment of Ds rights.
o Unfair to force unwilling P to go to trial.
o Will D suffer some plan legal prejudice as a result?
o Ds effort & expense in preparing for trial.
o Any excessive delay & lack of diligence by P in prosecuting action?
o Insufficient explanation of the need to take the dismissal.
o Has an MSJ been filed by D?
Court may condition granting of dismissal. See pg. 943.
Involuntary dismissals are disfavored.
o Failure to prosecute.
o Failure to comply with rules or with an order.
Involuntary dismissal operates as adjudications on the merits for RJ & CE.
o NOT FOR LACK OF:
Jurisdiction.
Venue
Failure to join a party under R 19.
IF P has already voluntary dismissed his action, and files again on the same claim. 41(d) gives court
discretion to stay that action pending P payment of Ds appropriate costs from the 1st suit as determined
by the court. Consider:
o Forum shopping.
o Good or bad faith.
o Circuit split as to if costs include attorney fees. (pg. 948).
o Party unable to pay fees? I.E. does it effectively bar the suit from being brought.
Should the means of the parties matter??? POLICY Argument?
Should attorneys be held to pay & not the party directly? Was it the attorneys fault?
Party held to portion of costs based on fault for involuntary dismissal?
Party not able to appeal, as they are essentially appealing their own voluntary dismissal.

DEFAULT JUDGMENT.

55(a) default is an entry that D failed to plead or defend. Does not terminate the case, but unless vacated
it does bar D from offering evidence on liability as opposed to remedy.
o Can be a penalty as a sanction but requires a warning.
o Clerk enters this on docket, then P has to seek default judgment against D.
o Party is deemed to have admitted all well plead allegation in the complaint, except amount of
damages.
Allegation not well plead & conclusions of law are not admitted.
Defaulting party is usually only allowed to contest other than legal sufficiency of the
pleading, SOP, & jurisdiction. (pg. 1076).
55(b) default is an entry of judgment against D. Default has res judicata affect.
o Relief granted cannot be beyond the amount demanded in the complaint.
o Moving party must submit affidavit establishing damages in sum certain to the clerk, who enters
default judgment on the motion. Otherwise, the court, and not the clerk, may enter the default.
o If party has appeared that party must be served w/ written notice of default judgment at least 7
days before the hearing. This is waived if not objected timely by party.
Party appears by making some presentation or submission to the court. (pg. 1077).
o Some courts require some pleading have been filed or counsel attended a conference etc.
o Others hold that correspondence & telephone calls may be sufficient.
Clerk may enter default if:
o D was defaulted for failure to appear; &
o D is not a minor or incompetent person; &
o Moving party submits affidavit establishing damages as sum certain or that may be made certain.
Sum certain means that there is no doubt as to amount to be rewarded.
Not when some amount needs to be calculated, such as punitive damages, atty
fees etc.
Default judgment by court in all other circumstances:
o D has appeared & has been served w/ written notice of application for default judgment at least 7
days before any hearings on the application.
o Where D is minor/incompetent, default may be entered only if represented.
o Where the amount due is not certain, then court may conduct hearing, trial or may rely on facts
in the record to set damages.
o Where D has defaulted for other than a failure to appear.
May set aside a 55(a) entry for good cause under 55(c) & default judgment under R 60(b).
Good cause. Consider: (pg. 1082).
o Default is disfavored.
o Good cause is not based on Ds mistake, but good cause for court decision.
o Proof that default was not willful or culpable. I.E. more than mere inaction or negligence.
o Swiftness of action to remedy the default
o Existence of a defense on the merits.
o Whether the opponent would be prejudiced by lifting default. I.E. loss of evidence, witness or
impairment to prove case on the merits due to default.
o Default a result of good faith mistake in following a rule of procedure?
o Nature of Ds explanation for defaulting.
o Amount in controversy.
o Availability of effective alternative sanctions.

o Does entry of default produce a harsh or unfair result?

Set aside of default judgment under R 60(b).
o Motion must be made w/in a reasonable time if pleading judgment is void, satisfied, released,
discharged, based on an earlier judgment that has been reversed or vacated, or applying it
prospectively is no longer equitable, or any reason that justifies itself.
o Motion must be brought w/in 1 year if claiming, mistake, inadvertence, surprise, excusable
neglect, newly discovered evidence that could not have been discovered w/ reasonable diligence
in time to motion for a new trial under R 59(b), fraud, misrepresentation, or misconduct by the
opposing party.
o Mistake, inadvertence, surprise or excusable neglect: (pg. 1184)
Mistake may be by any person not just a party.
Circumstances such that party not able to consult with an attorney.
Misunderstanding regarding duty to appear.
Failure to receive SOP.
Attorneys negligent failure to meet a deadline. NOT ACCEPTED BY ALL.
District court made an error of law or fact in the judgment order.
Excusable neglect consider:
Prejudice to opponent, length of delay & impact on the proceedings, reason for
the delay, moving partys good faith.
o Newly discovered evidence. (pg. 1186)
o Fraud, misrepresentation, other adversary misconduct. (pg. 1187).

MSJ R 56 Motion.

Step 1: Has moving party satisfied its burden on MSJ?

o No: Opposing party has no duty to respond.
o Yes: Burden shifts to opposing party -> Step 2
Step 2: Can responding party submit sufficient admissible evidence to satisfy the burden or
production, such that there is a genuine issue to some material fact?
o Can a reasonable jury find in favor of nonmoving party, when evidence is viewed from
light most favorable to nonmoving party, given the ultimate burden of persuasion on this
issue?
12(c) motion allows for either party to request judgment on the pleadings.
o If parties add anything to the motions, they are treated as MSJ.
Court can review evidence, unlike 12(b)(6).
Must be filed before 30 days after close of discovery.
Moving party has BOP on showing no genuine dispute as to any material fact.
o Must be judged on basis of admissible evidence only.
o Documents must be authenticated.
o Does not weigh credibility.
Adickes v SJ Kress: (METHOD 1)
o Moving party has burden of showing the absence of any genuine issue of facts.
o FRCP 56 requires D to rely on more than contrary allegations in his complaint.
Celotex Corp v Catrett: Not required that moving party support its motion w/ affidavits negating
opponents claim. Party can just say other party cant prove an element. (METHOD 2)
o MSJ should be granted only after the nonmoving party had an adequate time for discovery.
Arnstein v Porter: P credibility should be left to the jury. If P offers no evidence to discredit testimony of
D, it does not mean that deposition of D should be accepted as true.
Anderson v Liberty Lobby: More stringent or more lenient burden of persuasion are to be taken into
account when considering MSJ.
Scott v Harris: Where the record blatantly contradicts Ps version of events, such that no reasonable jury
would believe P, a court should not adopt that version of the facts for purposes on MSJ.
o Police chase case!
56(a) is when record establishes no general issues of a material fat & party is entitle to judgment as a
matter of law.
50(a) is asking court to direct a verdict after trial has started & close of opposing partys case. Rare.
Judgment notwithstanding the verdict asks court to set aside jury verdict. This preserves right to
challenge sufficiency of evidence later, & wasted trial time if wrong.
Must file 50(a) motion to bring 50(b) motion for a new trial
o Remitter: gives judge power to reduce award to highest amount reasonable based on evidence as
viewed by judge, or judge will order a new trial.
o Additer: Is the increasing of award & is not available in federal court, but is in some states.

Rule 56 Summary Judgment

Party claiming relief may move for summary judgment on all or part of the claim.
May be filed at any time under 30 days after the close of all discovery. 56(c)(1)(a).
Judge reviews the pleadings & evidence.

If party files 12(b)(6) or 12(c) motion, it is converted into R 56 MSJ if court considers matters outside of
the pleadings in its decision.
Fact in dispute must be material. I.E. It is a fact that might affect the outcome of the case.
Not often feasible in cases involving state of mind issues, as this involves credibility of a witness. But,
see Scott v Harris above!
MSJ as constitutional? (pg. 1103).
Affidavits or declarations may be used to support or oppose MSJ provided: (pg. 1110)
o Sworn or otherwise subscribed as true under risk of perjury.
o Made on personal knowledge.
Information & belief not proper.
Inference & opinions must be premised on first-hand observations or personal experience
More than mere conclusions or unsupported inferences.
Must aver specific facts.
o Set out facts that would be admissible evidence.
Not the form of the submitted evidence via affidavit, but the evidence itself must be such
that it is admissible.
Look for: hearsay, conclusory averments, unfounded self-serving declarations,
ambiguous statements, speculation or conjecture, & inadmissible expert opinions.
Partys promise to produce admissible evidence at trial is not enough.
o Show that the maker is competent to testify on the matters expressed.
Competence to testify may be inferred

RES JUDICATA & COLLATERAL ESTOPPEL

RES JUDICATA: CLAIM PRECLUSION

28 USC 1783 requires sister courts to give full faith & credit to other courts final judgments.
If new evidence discovered, court may grant a motion to vacate prior judgment under FRCP 60. 1 yr.
Determine:
o Whether the barred claims were part of the same cause of action?
o Whether the barred claims could have been advanced in the first suit?
Choosing a court of limited J, when a court did exist that could have heard all claims,
may result in RJ.
Preclusion is affirmative defense. Party asserting has BOP & must plead specifically as per FRCP 8(c).
Res Judicata as per Davis needs:
o Identical parties in suit 1 & suit 2 (or those in privity)
Consider: party is successor in interest (assignee, trust beneficiary, etc.), would this party
have been vicariously liable for a party? Is the action concerning activity that this person
personally did, but some other party sued first on his behalf?
o Valid judgment: Need jurisdiction & notice.
o Prior judgment is on the merits & is final.
o P raises same claim in both suits.
Partys representation of a nonparty is adequate only if: Taylor
o Interests of the nonparty & representative are aligned.
o Either the party understood herself to be acting in representative capacity or the original court
took care to protect the interests of nonparties.
o Sometimes requires adequate notice to persons alleged to have been represented.
Federated Dept Store v Moitre: P sued D, with other P. Lost on MSJ. Other parties appealed & won, but
Moitre did not appeal, so judgment was final to him.
o No general equitable doctrine to preclude application of RJ. RJ is a rule of fundamental &
substantial justice, which should be cordially regarded & enforced by the courts.
o That other parties prevail on appeal from a judgment, to which P was a party, does not make the
judgment not final as to P, who did not appeal
Davis v Dart: P sued on 11/01 for discriminatory conduct between 11/98 to 02/01. Court dismissed w/
prejudice. P sued for discriminatory conduct between 03/01-04/02.
o RJ affect extends to all rights of P w/ respect to all or any part of the transaction or series of
connected transaction, out of which the original action arose. Same nucleus of operative facts.
o While the factual allegation differ, all of the claim originate from the same continuing cause of
allegedly discriminatory conduct by D.
Staats v County of Sawyer: P sued D in state admin agency under state created remedy. P also sued in
federal court for EEOC for same conduct. P lost admin appeal. D.C. RJd the EEOC complaint.
o Court must consider the jurisdiction of the state agency & state court before using RJ.
Did a forum exist where P could have brought all claims?
State agency has limited J & not able to hear EEOC c/o.
WFEA claim could not be asserted in state or federal court.
o As WFEA claim has to be adjudicate in a forum of limited J, no RJ on federal claim.

Taylor v Sturgell: Person not a party to suit generally has not had full & fair opportunity to litigate but:
o Person who agrees to be bound in an action is bound in accordance w/ that agreement.
o May be justified on basis of preexisting legal relationship between the person to be bound &
party to the judgment.
o Where nonparty was adequately represented by someone w/ same interests who was a party to
the suit. I.E. Class actions, Trustee & Beneficiary, Guardian & Ward.
o Where nonparty assumed control over the litigation where judgment was rendered.
o Bound party may not avoid preclusive effect by re-litigating through a proxy.
o Special statutory scheme may expressly foreclose successive litigation by nonlitigants.

COLLATERAL ESTOPPEL: ISSUE PRECLUSION

IF two adverse parties:

o Issue in both proceedings are identical.
o Issue in prior proceeding was actually litigated & actually decided.
Was it foreseeable @ time of initial action that issue would arise in later action?
o Issue was necessary to support a valid & final judgment on the merits.
o Issue was determined by valid & final judgment.
Must have been an appealable decision. I.E. Jury may return verdict finding D negligent,
but find $0 damages for P. D would not appeal this decision.
o No conflicting verdicts.
THEN the parties may not litigate this issue against the same party & under some circumstances, party
who lost on that issue may not litigate that issue against a new party.
To determine if court is to give preclusory effect to a non-judicial ruling court must see if:
o Arbitration was conducted in a judicial like adversarial proceeding.
o Proceedings required witnesses to testify under oath.
o Determination involved the adjudicatory application of rules to a single set of facts.
o Proceedings were conducted before an impartial hearing officer.
o Parties has the right to subpoena witness & present documentary evidence.
o Arbitrator maintained a verbatim record of the proceedings.
Levy v KOAA: Issue if marks were confusingly similar is not the same as deciding the likelihood of
confusion, so no CE.
Troutt v Colorado: Admission precludes a determination that the issue was actually litigated.
Taylor v Hawkinson: No use of issue preclusion when based on a compromise verdict or finding.
Jacobs v CBS: WGA arbitration decided D did not use scripts of P in show. Other P had derivative
claims of P & had filed suit in court. D wants to use CE to dismiss claims of the other P.
o Appropriate to give estoppel effects to findings of an arbitration, so long as the arbitration had
the elements of an adjudicatory procedure.
Here P & D simply submitted paperwork to WGA & WGA issued finding. This is too
informal & has too few procedural safeguards to be an adjudicatory procedure.
Freeman Mining v OWC: CE should not apply where the party against whom preclusion is sought faced
a heavier burden of persuasion in the first action compared to the second.
Connors v Tanoma Mining: Where a court grants judgment on alternative findings, CE is refused as the
precise legal basis upon which the judgment rests is unclear.

NON MUTUAL COLLATERAL ESTOPPEL

Party is prevented from litigating issue in a 2nd Suit if: Bernhard v BOA
o Issue in 2nd case identical to in 1st.
o Party against whom CE is asserted was a party or in privity w/ party to prior litigation.
Parkland Hosiery: PH sued by SEC & private shareholders. SEC suit declared PHs action was
fraudulent. Shareholders in other suit used CE to prevent PH from litigating action as not fraudulent.
o P had a fair opportunity to litigate claim in SEC action.
o NM CE can be unfair to D in a number of ways & TC should use discretion to disallow when
party could have joined the original action or if suit 2 not foreseeable.
o CE allowed here:
P could not have joined in SEC action, so no wait-and-see strategy.

PH had every incentive to fully & vigorously litigate SEC.

Judgment in SEC action not inconsistent with any other judgment.
No procedural opportunities available to PH in present suit not present against SEC.
Lack of jury will be considered, but not dispositive.

EERIE ERIE

Cases based on diversity should apply state substantive law.

In diversity cases, federal courts shall apply the law of the state, including those of its highest court. Erie
o Bound by state highest court only. Intermediate courts are persuasive authority.
OUTCOME DETERMINATIVE TEST: York
o Litigation in federal court should be substantially the same, so far as the legal rules determine the
outcome, as it would be if tried in state court.
If rule determines outcome, then it is considered substantive.
o IL did not allow for court ordered medical exams, but FRCP 35(a) does. Sibbach.
SCOTUS says this is a procedural rule: The test must be whether a rule really regulates
procedure, the judicial process for enforcing rights & duties recognized by substantive
law & for justly administering remedy & redress for disregard or infraction of them.
Medical exam not considered having strong enough effect on outcome under York.
o State law can trump federal procedure, if a narrow reading of FRCP shows no conflict. Palmer.
o Question of burden of proof on an affirmative defense is a question of local law. Palmer.
BOP does affect outcome, but forced medical exam does not?
o Federal court should give same RJ effect to a state court judgment as the courts of that state
would give it. Angel v Bullington.
o If following state rule would mean claim is barred by SOL & federal would allow suit, federal
court MUST follow state rule. Regan.
Procedural rule bound up in parties rights & duties: Cohen.
o NJ rule required P in a shareholders derivative suit to post a bond to cover defense costs, that P
would owe to D if P lost, as a pre-condition to filing suit.
SCOTUS said that this was a procedural rule bound up in the rights and duties of the
parties & required federal court to apply the rule.
Conscious policy decision by state & should be followed.
Federal court should use Erie & apply state law, unless there are significant countervailing factors
favoring the federal policy. Byrd.
o State law said issue of if EE was a statutory EE was decided as matter of law, not for jury.
o Strong federal policy for use of jury as fact finder, and this should not yield to state rule.
o Likelihood of a different result is not strong enough to yield to state rule.
Certainty of outcome effect will be considered.
o This is not a rule intended to be bound up in the rights and obligations of the parties, but a rule
dividing up the judicial workload.
Court must follow the CONFLICTS OF LAW rules of the state where it SITS.
Is this the type of rule that would cause a party to choose one forum over another? If not, then follow
federal rule. Byrd.