TO:

D-01 Civil Procedure Students

FR:

Prof. Friedman

RE:

Mid-term Examination

DA:

January 2009

ANALYSIS OF FALL 2009 CIVIL PROCEDURE EXAM (D-01)

QUESTION ONE (approximately 33 points)
How should the court rule on LaFleurs motion to transfer venue to the U.S.
District Court for the Southern District of Florida and on Shepherds motion to remand?
Following the removal of a matter from state to federal court, a plaintiff may
request that the court remand the matter back to state court. Removal under Section
1441 is appropriate if the matter was one over which the federal district court would have
had jurisdiction had the plaintiff initially sued the defendant in that forum. Shepherd
having sought remand in this case, the first task is to determine whether removal was
appropriate. If it was not, the case should be remanded and the venue question is moot.
I.

Removal

Here, the federal district court would originally have had jurisdiction under
Section 1332: the parties are diverse, and the amount in controversy is satisfied. As to
the latter requirement, there is no evidence to suggest that Shepherds alleged damages
are insufficient. As to the former requirement, it appears that Shepherd owns property in
both New York and California, but that he spends the majority of his time in California,
where he is employed. There are no other facts in the record to suggest that Shepherd is
not domiciled in California. As for LaFleur, the company appears to be incorporated in
France and doing business in New York. Assuming Shepherd is a citizen of California,
there would appear to be complete diversity regardless where LFleur is deemed to be a
citizen. The problem here is that Section 1441(b) bars defendant from removing to a
state where the defendant is a citizen. If the defendant, LaFleur, is a citizen of New York,
this case could not be removed, and the remand should be allowed.
II.

Challenge to Venue

Assuming for the sake of argument that removal was proper in this instance,
there is still the matter of LaFleurs motion to transfer venue. Due to the existence of the
forum selection clause in the insurance agreement, there is reason to believe the
Southern District of New York may not be the proper venue. Pursuant to Section 1406,
transfer or dismissal is appropriate when the originating court lacks venue. In the
alternative, the defendant would likely seek to transfer the case pursuant to Section
1404.
Here, the defendant would seek to dismiss because of the forum selection clause
in the insurance agreement. That clause provides that any disputes arising under the

lease must be litigated in a state or federal court in the State of Florida. Because this is
not a specific forum selection clause, it seems likely that the court would simply treat the
clause as one factor to consider in a transfer analysis. See Stewart Organization.
A.

Venue in the Receiving Court

The first question in the transfer analysis under Sections 1404 and 1406 is
whether the receiving courtin this case, the United States District Court for the
Southern District of Floridawould have been a proper venue at the time of filing. There
is no question the Florida federal district court would have had subject matter
jurisdiction under Section 1332. Personal jurisdiction also would not be an obstacle, if
we assume (as we may) that the forum selection clause indicates LaFleurs intention to
assent to the assertion of personal jurisdiction by the Florida court.
To determine whether the Florida federal district court would be an appropriate
venue, it must be determined whether, under Section 1391, the general venue statute,
venue lies in Florida. Pursuant to that statute, venue is appropriate in any judicial
district in which the defendant resides, in which a substantial part of the events or
omissions giving rise to the claim occurred, or where a defendant is subject to personal
jurisdiction at the time the plaintiff commenced the action, if there is no district in which
the action may otherwise be brought.
In this case, the defendant resides in New York for venue purposes. As explained
above, the defendant is likely subject to personal jurisdiction in Florida, but there are
likely other districts in which this case could be broughtnamely, California. Regardless,
it seems likely that a court would deem a substantial part of the events leading to the
plaintiffs claims occurred in Florida, as that is where the insured vessel was kept, and
this is where it sank. See, e.g., First of Michigan Corp.
B.

Transfer Considerations

Next, the court will weigh the transfer considerations in determining whether
transfer is appropriate. See Colonial Penn Insurance. Among these considerations will
be the forum selection clause. See GNC Franchising, Inc.
1.
Availability and convenience of witnesses and parties. Here,
though Shepherd appears to be located in California, he has an apartment in New York.
His crewall of whom may be considered as witnessesis located in Florida. The
personnel at LaFleur responsible for the insurance agreement seem to be in both Paris,
France, and in New York.
2.
Location of counsel. It is not clear from the facts where counsel to
the parties reside, though it would not be an unreasonable assumption that the plaintiffs
counsel is in New York.
3.
Location of records. It also is not clear from the facts where the
records are located, though it seems safe to assume that records relating to the insurance
agreement would likely be found in New York (and possible Paris), while some records
related to the investigation of the sinking by public authorities would be found in
Florida.

4.
Cost of obtaining attendance of witnesses and other trial
expenses. It seems unlikely, based upon the facts provided, that there is reason to
believe the cost of obtaining the attendance of witnesses and other trial expenses would
be prohibitive in either New York or Florida. The French witnesses would have to travel
to the United States regardless.
5.
Place of the alleged wrong. The alleged wrong occurred in New
Yorkthat is where the defendant denied the plaintiffs insurance claim.
6.
Possibility of delay and prejudice if transfer is granted. Its not
clear whether there would be any delays out of the ordinary if the case were transferred.
7.
Plaintiffs choice of venue. The plaintiff chose to bring this action
in the Southern District of New York.
8.
Forum Selection Clause. The parties signed an agreement
indicating that a Florida court would be the forum in which any disputes arising from the
agreement would be resolved.
The courts have noted that the plaintiffs choice of forum is an influential factor
in this analysis, and should rarely be disturbed unless the balance is strongly in the
defendants favor. See, e.g., Colonial Penn Insurance. This case is likely not that
instance. Though a substantial event leading to the plaintiffs claim occurred in Florida,
New York is the plaintiffs choice of venue, it is the place of the alleged wrong, and the
place where relevant records are likely located. It is not clear where the parties
attorneys are located, but at least the plaintiffs attorney is likely in New York.
Accordingly, this is a case in which, notwithstanding the existence of a forum selection
clause, it would not be an abuse of discretion for the United States District Court for the
Southern District of New York to hear this matter (again, assuming removal were
appropriate in this instance, as discussed above).
QUESTION TWO (approximately 44 points)
How should the court rule on Ned Flanderss motion to dismiss?
The facts here present at least two bases upon which Flanders can argue that
Simpsons suit against him should be dismissed: lack of subject matter jurisdiction and
lack of personal jurisdiction. These issues are analyzed in turn.
I.

Subject Matter Jurisdiction

As stated above, a federal district federal court has jurisdiction over federal
questions, see 1331, and diversity cases, see 1332, as well as supplemental jurisdiction
over certain related state claims, see 1367. On the facts, the parties are plainly diverse
from one another: Simpson is a domiciliary of New York and Flanders of Michigan. The
problem is the amount in controversy: Section 1332 requires that the potential recovery
be more than $75,000.00, and here it seems Simpson falls short by a penny.
Accordingly, we must determine whether the court has federal question jurisdiction over
either or both of Simpsons claims.
A.

Federal Question Jurisdiction

Under Section 1331, a claim raises a federal question if the cause of action on
which the plaintiff sues was created by federal law, or if it includes an essential federal
ingredient. In addition, the claim must be substantial. Under the well-pleaded complaint
rule, we look exclusively to the complaint to ascertain the existence of a federal question.
In this case, federal law does not expressly create the plaintiffs cause of action in
either negligence or contract. The Reasonable Condition Used Care Sales Act contains
a requirement that used cars be sold only in a reasonably safe condition, but it contains
no enforcement mechanism and creates no private cause of action. Nor is this an
instance in which the court will infer a cause of action, as the legislative history does not
indicate a Congressional intent to create an implicit cause of action, and the issue does
not involve the enforcement of individual federal constitutional rights as against the
government.
It remains to determine whether Simpsons claim of negligence in this instance
contains an essential federal ingredient. A cause of action satisfies the essential federal
ingredient test if it presents a clear issue based upon federal law; that issue is important
to the resolution of the underlying dispute; is substantial; and is likely to arise only
infrequently. See Grable & Sons. Here, the contract claim presents no issue of federal
law. The negligence claim, however, appears to be premised upon federal lawin other
words, federal law creates a duty on sellers of used cars to convey the automobiles in a
certain condition. The issue of whether that duty existed here is in dispute. The issue
may be nationally important; the Act speaks to nearly all sellers of used automobiles,
arguably indicating an intention on the part of Congress to indirectly regulate the entire
market through actions like this one.
Finally, the issue is one which is likely to arise quite often. Without knowing very
much about the number of used car sales that take place regularly in the United States,
we can safely assume complaints about such sales related to the condition of the vehicle
will occur with greater frequency than will the notice issue raised in Grable & Sons,
thereby producing a relatively large number of claims brought in federal court. Given
that Congress did not explicitly create a federal cause of action in these cases, judicial
recognition of one here via the essential federal ingredient test, unlike in Grable & Sons,
likely would upset the workload balance between the state and federal courts
contemplated by Congress.
B.

Supplemental Jurisdiction

Assuming, for the sake of argument, that Simpsons negligence claim survives the
essential federal ingredient test, there is still the question of his contract claim against
Flanders. Because this claim does not arise under federal law, we must determine
whether the court can exercise supplemental jurisdiction over it. Under Section 1367,
the district court may exercise supplemental jurisdiction when there is a substantial
federal question, a common nucleus of operative facts, and separate claims that one
would expect to be tried in a single proceeding.
Here, again assuming the essential federal ingredient test is satisfied, there is a
substantial federal question. Further, even under a strict approach to the common
nucleus test, these claims are factually related: both the negligence claim and the
contract claim derive from the same underlying transaction, and proof of each would

involve resort to the same evidencethat is, the parties understanding of the agreement
and the ultimate condition of the car. One would expect these claims to be tried in the
same proceeding, and nothing in the record suggests the contract claim raises a novel
issue of state lawthough it could be argued that state law will predominate in the case
on the merits. See 1367(a).

C.

Conclusion

In sum, it seems the court here has no subject matter jurisdiction over any of
Simpsons claims. The amount in controversy is not satisfied under Section 1332;
neither of Simpsons causes of action was expressly created by federal law; and, finally,
the negligence claim does not satisfy the essential federal ingredient test. If it were to
satisfy that test, the court could likely exercise supplemental jurisdiction over the
contract claim, if in the courts discretion state law issues would not predominate.
II.

Personal Jurisdiction

Ordinarily, a court would likely dismiss Simpsons suit based upon the lack of
subject matter jurisdiction and decline to undertake a personal jurisdiction analysis. In
the interest of being comprehensive, however, the personal jurisdiction question should
also be analyzed. Here, the facts present no issue in respect to the courts ability to
exercise physical presence jurisdiction over Flanders, see Burnham, but, rather, whether
jurisdiction over Flanders satisfies both the New York long-arm statute and due process
under the Fourteenth Amendment to the United States Constitution, see International
Shoe.
A.

Jurisdiction Under the New York Long-Arm Statute

The New York long-arm statute allows the court to exercise jurisdiction over
corporate non-domiciliaries in four circumstances: when the defendant transacts
business or contracts to supply goods or services within the state; commits a tortious act
within the state; commits a tortious act outside the state that causes injury within the
state; and owns, uses or possesses any real property situated within the state. Here,
Flanders would satisfy the first requirement, as he contracted to supply a good (the car)
within the state of New York.
B.

Due Process

The next question is whether the exercise of jurisdiction over Flanders by the
federal district court satisfies the requirements of due process. Due process is satisfied if
the defendant has sufficient minimum contacts with the forum state, and if the exercise
of jurisdiction would be consistent with fair play and substantial justice. See
International Shoe.
1.

Minimum Contacts

For a defendant to have minimum contacts with the forum state, the defendant
must have purposely availed itself of the laws and protections of the jurisdiction or

directed its activities toward the forum state. In addition, the plaintiffs claim must arise
from or be related to the defendants activities in the forum.
a.

Purposeful Availment

A defendant purposefully avails himself of the laws of a jurisdiction when he

sends representatives to the jurisdiction for the purpose of conducting business, see
International Shoe, and when he engages in such activities as entering contractual
relationships with citizens of the forum state, see Burger King Corp.
Here, the facts indicate that Flanders advertised the sale of his car via a website
intended to reach a national audience, including New York residents, and in a magazine
that circulates widely in New York. In addition, he engaged in negotiations about the
purchase price and other details with a citizen of the forum and ultimately sent his
representative (his brother, Ted) into the state to deliver the car. This level of activity is
probably sufficient to qualify as purposeful availment. As in International Shoe, the
defendant sent an agent into the jurisdiction. As in Nowak, the defendant directed
advertising to New York to attract customers, via the website and the magazine. And, as
in Burger King, he entered into a contract with a citizen of the forum that necessarily
involved contact with the state, if, in this case, it was only to fulfill the terms of the
contract by shipping the subject of the contract there.
b.

Relatedness

To satisfy the relatedness requirement, plaintiff must show that the court has
either general or specific jurisdiction. General jurisdiction exists when the defendants
contacts with the forum were so continuous and systematic that the defendant could
expect to be haled into court in the forum on any claim. See Helicopteros. Here, the
facts do not indicate that the defendants contacts with New York were in any way
systematic and continuous: the facts do not indicate that, as in Perkins, Flanders was
essentially doing business in the state.
Specific jurisdiction exists when the cause of action either arises from or
relates to the defendants purposeful contacts with the forum state. When claims do
not directly arise out of a defendants activities in the forum, the courts employ one of
three tests to determine whether those activities are sufficiently related to the cause of
action: the but for test; the substantial connection test; and the proximate cause
standard. See Nowak. Here, Simpsons cause of action arises directly from the
defendants contacts with the forum.
Flanderss forum activitiesthe website
advertising the car for sale, the shipment of the car to New Yorkare the basis for
Simpsons substantive claims.
B.

Fair Play and Substantial Justice

If the plaintiff succeeds in demonstrating that the defendant had minimum

contacts with New York, the defendant bears the burden of demonstrating that the
exercise of jurisdiction would be unreasonable. This requires analysis of five factors: (1)
the burden on the defendant; (2) the forum states interest in adjudicating the dispute;
(3) the plaintiffs interest in obtaining convenient and effective relief; (4) the interstate
judicial systems interest in the most efficient resolution of controversies; and (5) the
interests of other states in furthering their substantive policies. See Asahi Metal Ind. Co.

The Defendants Burden. Here, requiring the defendant to appear in a New York
court would impose only a modest burden; it might be inconvenient and costly for the
defendant to travel, but we know that he has the capacity to travel to New York.
The Forum States Interest. New York has an interest in seeing its residents
protected as consumers through actions like this one. It is not clear whether New York
contract law applies, but if it does, the state would have an interest in seeing its laws
honored.
The Plaintiffs Interest. The plaintiff, Simpson, has an expressed interest in New
York as his choice of forum, as that is the most convenient forum for him.
The Interstate Systems Interests. The interstate systems interest in the most
efficient resolution of controversies would appear to be served by litigating this case in
New York, where one party and most of the evidence is located (though at least two
witnesses are in Michigan).
Other States Interests. Michigan would likely have an interest in this case, as
one of the parties is a citizen. It is not clear whether Michigan contract law applies, but if
it does, the state would have an interest in seeing its laws honored.
C.

Conclusion

In short, it seems likely the court has personal jurisdiction in this instance.
Flanders purposefully availed himself of the privilege of doing business in New York, the
suit arises from the defendants forum contacts, and on balance it would not be unfair for
Flanders to travel to New York to litigate this matter.
QUESTION THREE (approximately 20 points):
How should the court rule on Dunder Mifflins motion to dismiss?
On the facts, Dunder Mifflin can challenge the courts subject matter jurisdiction.
The federal court will have jurisdiction over Pams claim if it raised a federal question,
see 1331, or if the claim fell within the courts diversity jurisdiction, see 1332. Here,
nothing in the facts suggests that Pam has raised a federal question; her claim seems to
be a garden-variety negligence claim. Accordingly, the question is whether the requisites
of diversity jurisdiction have been met. Section 1332 requires (a) that there be complete
diversity between the parties, such that no plaintiff is a citizen of the same state as the
defendant, and (b) that the amount in controversy be at least $75,000.01.
I.

Complete Diversity

To determine whether there is complete diversity, we must determine the

citizenship of each party.
A.

Pam Beesly

For individuals, citizenship is equivalent to domicile. See Lundquist. On the

evidence presented, while some facts suggest Pam has manifested an intention to

continue residing in Pennsylvania (Pennsylvania car registration and drivers license,

visits to Scranton), on balance it seems her domicile is New York. She has changed her
mailing address to New York, rented an apartment in New York, sought employment in
New York, and it seems there are few job prospects available to her in Pennsylvania.
Moreover, she has registered to vote in New York; the Lundquist court viewed this as an
important indication that an individual intends to remain in a state indefinitely.
B.

Dunder Mifflin

Corporations may have two domiciles: the state of their incorporation, and the
state of their principal place of business. Here, the facts indicate that Dunder Mifflin is
incorporated in Delaware. The facts also indicate that the company does business in
several states, including Pennsylvania, New York, Connecticut, and New Hampshire.
The question is whether to apply the nerve center test or the place-of-activity test.
Dunder Mifflin does not appear to be engaged in diverse activities across an array of
geographically remote states. Rather, the companys operations are confined to the
Northeast and those operations are similar from state to state. According to the Tubbs
court, when a company is not engaged in far-flung and varied activities, the place-ofactivity test applies. On the facts, Pennsylvania is arguably Dunder Mifflins central place
of activity: it is the largest presence and conducts both management and operational
activities from its Scranton office. New York is also a possibility, because that is where
corporate decision-making occurs, but Tubbs indicates that, when applying the place-ofactivity test, the location of the companys nerve center is not necessarily dispositive.
In sum, if Pam is a citizen of New York, and Dunder Mifflin is a citizen of both
Delaware and Pennsylvania, there is complete diversity.
II.

Amount in Controversy

Amount in controversy is determined by looking to the circumstances at the time

the complaint is filed. If it is clear from the face of the complaint that the plaintiff could
never recover more than $75,000.00, the suit must be dismissed. If evidence adduced
after the complaint is filed shows, to a legal certainty, that the damages could not have
exceeded the jurisdictional minimum, there was no subsequent event that would save
an otherwise faulty claim. See Coventry Sewage Associates.
Here, Pams good faith assessment of her damages in the complaint exceeds the
jurisdictional minimum$80,000 is sufficient. The problem is that, as Dunder Mifflin
has demonstrated, she could not recover that amount because her future employer,
Cond Nast Publishing, reduced her summer salary by $5,000. As in Coventry Sewage,
however, this was a subsequent event, not a subsequent revelation. Pam could not be
charged with knowing that, after she filed her complaint, her salary for the summer
would be reduced by her employerthat possibility was beyond her control, just as the
assessment of water usage was beyond the plaintiffs control in Coventry Sewage.
III.

Conclusion

Assuming that Pam is a citizen of New York and Dunder Mifflin a citizen of
Pennsylvania, it appears the jurisdictional amount in controversy is satisfied and,
therefore, the court would have subject matter jurisdiction.