Beruflich Dokumente
Kultur Dokumente
CASES
State Farm Mutual Automobile Insurance Co. v. Campbell punitive damages no
more than 9x compensatory damages. Complaint against State Farm alleged bad faith,
fraud, and intentional infliction of emotional distress (jury awarded $1 million in
compensatory damages and $145 million in punitive damages, supreme court ruled
damages were to high)
o Punitive damages = constitutional issue under 14th amendment because of
possible due process violation (DE NOVO review)
o Changes after Campbell
has less incentive to settle now after Campbell b/c limit on punitive
damages (more calculable risk of damage, reduce risks)
under more pressure to prove high compensatory damages
Lawyers will invest more in cases with significant compensatory
damages over highly culpable
Less deterrent effect for intentional harm
Odd that equally culpable people may have different punitive
damages based on compensatory damages (odd b/c should have
equal punitive damages), but just general rule (1:9 ratio)
Reduces very rare but very high awards
Sigma Chemical v. Harris injunctive relief relies on balancing test: hardships to
parties if injunction is granted AND inadequacy of legal remedies. signed non-
competition agreement w/ . Then went to work w/ competitor, used company secrets.
wanted permanent injunction. Court granted (limited) injunction that he couldnt
work in specific department or use any of his past knowledge.
Litigation in America
o 98% of civil litigation takes place In STATE COURT
o Mostly traffic claims (3/5)
o Litigation growing faster than population but slower than economy
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K Tort
Demographics 55% of filings but only 1/3 go 44% of filings but 2/3 of all
to trial trial cases
Ps win 65% - mostly bench 50% - mostly jury
Median Damages $45K $37K
Specific remedies: those that replace directly what the plaintiff lost
o Compensatory damages: Courts look at what costs to only
o Punitive damages: Courts look at hardship to to determine appropriate
punishment
Subsitutionary remedies: reasonable substitute for what the plaintiff lost
o majority of remedies since most ppl seek money damages.
Under old chancery system, equitable remedies were only available if legal remedies were
insufficient
Declaratory Relief
o Rule 57 - "The existence of another adequate remedy does not preclude a declaratory
judgment that is otherwise appropriate. The court may order a speedy hearing of a
declaratory-judgment action."
o 28 USC 2201 - "any court of the United States, upon the filing of an appropriate
pleading, may declare the rights and other legal relations of any interested party seeking
such declaration, whether or not further relief is or could be sought."
FR 65 (a), (b)
28 U.S.C. 1292(a)(1)
CASES
Winter v. Natural Resources Defense Council, Inc NRDC sued Navy for injunction to
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stop training exercises that could harm marine mammals under various protection acts. Navy
appealed and SC ruled for Navy because balance of equities and public interest weigh in the
favor the military.
o General rule = Sliding scale for injunctive relief - likelihood of harm when the
likelihood of success is very high.
o SC in THIS CASE says harm AND probability of success have to be likely
Fuentes v. Shevin got writ of replevin, state seized s goods without notice or
opportunity to challenge it. Court rules violation of due process because property interests
need at least notice and an opportunity for a hearing before stuff is repossessed (only if done
by state).
o SC stated factor test for whether fundamental requirement of due process -- opportunity
to be heard at a meaningful time in a meaningful manner -- has been met:
(1) will private parties be affected by official action?
(2) risk of erroneous deprivation of such interest through procedures used &
probable value of additional procedural safeguards
(3) govt interest in additional or substitute procedural requirements &
fiscal/administrative burden that additional procedural requirements would
entail
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Financing Litigation
FR 23(e), (h)
FR 54(d)(2)
CASES
Evans v. Jeff D fee shifting. 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). Court held Civil Rights Attorney's Fees Awards
Act does not require courts to disapprove a settlement because it was expressly
conditioned on waiver of statutory eligibility for attorney fee.
Buckhannon Bd. & Care Home v. W. Va. Dep't of Health & Human Res. fee
shifting. P brought suit against D state to change regulation that required home care
resisdents to be able to get out of burning buildings unassisted as against FHA and
ADA. State enacted 2 bills eliminating the regulation => court dismissed case as moot.
Attorneys not awarded fees under catalyst theory because no change in legal
relationship of parties.
o This decision encourages defendants to throw the towel in early -- and change
on their own, SC says this makes system more efficient.
o Could Congress change this result? YES - make Fees Act more clear
Supreme Court binds ONLY state and federal courts regarding
FEDERAL STATUTES (Doesn't bind STATE court applying STATE
fee-shifting statue)
4 Ways to pay for litigation
o Each Party pays own fee: Hourly rate (American Rule: most commercial litigation
financed this way)
o Cost Sharing: Insurance, Contingency fee (winning clients pay costs for their case as
well as losing cases)
Contingency fees: lawyer must have possibility of recovering damages.
Before taking a client, must know:
Remedy sought: damages? (only works for specific remedies
equitable remedies like injunctions dont pay bills)
Ability of other side to pay: Judgment proof? Assets? Will
insurance cover?
Likelihood of compensatory & punitive damages: Campbell
makes this harder if compensatories are low.
Insurance will NOT pay for intentional acts, only accidents
When insurers pay lawyers, lawyers decide based on what is best
for insurance, not client. May settle even if client isnt liable or
fight hard to prevent future similar cases from being brought
o Loser pays winner's fees English Rule Many 1-way fee shifting statutes -
prevalent in civil rights and "public" litigation
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PLEADING CASES
Conley v. Gibson notice pleading alleged wrongful discharge of African-American
employees from a railroad company and unequal protection from the union. The court
ruled that general allegations of discrimination were sufficient to fulfill the Rule 8(a)
requirement of a "short plain statement" because discovery, not pleading, should do
major sorting between grounded and ungrounded claims.
Bell Atlantic v. Twombly Antitrust case with huge potential discovery costs. Twombly
brought a class action against Bell Atlantic Corp. and other telecommunications
companies alleging conspiracy to end competition (antitrust). Conclusory. Court
overruled Conley and held Rule 8(a) pleadings must be specific enough to "nudge
their claims across the line from conceivable to plausible" and statements of
assumption are not entitled to presumption of truth.
Ashcroft v. Iqbal Post 9/11, was detained and sued alleging violations of his
statutory and constitutional rights based on his treatment while confined. sued
specific government officials (head of FBI) which would require huge amounts of
discovery to prove they knew of violations. Court granted motion to dismiss. Extended
Bell's specificity standards to apply to all civil cases.
o Makes pleading more difficult BUT only affects Federal Cases 2% of all cases
since 98% are State cases
o May make standard forms for pleading invalid (unsure since fairly recent case)
Jones v. Bock prisoner sued prisoner for abuse/ forcing him to do work that
caused injury. alleged had not stated a sufficient claim because he hadnt shown
exhaustion of administrative remedies; said exhaustion of administrative remedies
was an affirmative defense. Rule 8(c) lists affirmative defenses but is not exhaustive,
court rules must use not-exhausting as affirmative defense.
o Burden of pleading also determines burden of production and burden of
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Haddle v. Garrison was an at-will employee for Healthmaster, Inc.. sued alleging
his employer conspired to have him fired in retaliation for him being a witness in a
criminal trial against Healthmaster fraud. Haddle claimed his employers' acts had had
"injured [him] in his person or property" in violation of federal law, specifically the
Civil Rights Act of 1871. Court granted 12(b)(6) motion because precedent cases held
that at-will employees suffered no actual injury because no guarantee of future
employment.
o Motion was appealed all the way up to the SC. SC ruled against , found that
's allegations did form a claim on which relief could be granted.
o Win against 12(b)(6) just means case moves on: can begin discovery, can
go back and draft an answer and deny specific facts of 's claim.
ANSWER CASES
Zielinski v. Philadelphia Piers filed personal injury claim based on forklift
accident. Sues as employer; made general denial against Rule 8(b) requiring
specific denial to each allegation and didnt realize that someone else was actually
employer (company had been sold without s knowledge). couldnt sue correct party
b/c stat of limits had run, but both covered by same insurance so court forces company
to litigate as if they were correct employer.
AMENDMENT CASES
Beeck v. Aquaslide sues for personal injury. admits to manufacturing slide but
months later realizes they didnt make it, and moves to amend answer after Stat of
Limitations has run on s claim. Court allows to amend under Rule 15 because would
be highly prejudicial not to, no bad faith on part of , and can possibly still sue
correct party.
Moore v. Baker originally sued after surgery went badly under informed consent
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Triers of Juries and Judges Judge, no Jury Sometimes Judge, sometimes Judge and Jury
Fact
Witnesses Live testimony, no Subpoenas, some Extensive pretrial discovery, subpoenas, and live
subpoenas or discovery discovery, no live witnesses
testimony
Appeal Only after Judgment Free Interlocutory Appeal only after judgment - w/ interloc. appeal
Appeals from prelim. injunctions (& other exceptions)
Functions of pleadings
o Notice to opposing party.
what's the claim?
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o MALPRACTICE: Not under Rule 11. The lawyer will be liable for malpractice
only if the plaintiff shows not only incompetence but also causation--that, but for
malpractice, the client would have won.
o Applies to written motions only because of Rule 11(a), not general behavior
o Rule 11(b) reasonableness required is very much based on courts discretion -
if you only have 8 hours before statute of limitations runs out, court may allow a
filing with much little research (can withdraw under 11(c) if wrong)
Similarly, good faith reason to file (such as if law is debated) does not
merit sanctions
o Rule 11(c) sanctions may (at courts discretion) apply both to those who did the
writing (the lawyer and law firm) and those responsible for the claim (the party)
o Rule 11(d) Rule 11 doesnt apply to discovery SEE Rule 26(g) and Rule 37
RULE 12: Pre-answer motions
o Rule 12(b) motions are an attractive option for because they are relatively
cheap, fast
Allows for dismissal without having to discuss merits of case - no
requirement for to investigate or admit truth or falsity of factual claims
Delays time for answer to be filed until after motion is resolved
If successful, whole case goes away
o Rule 12(g) tries to prevent too much delay by allowing combination of motions
o Rule 12(h): Once you bring a 12(b) motion you WAIVE right to do so again
o EXCEPT: 3 unwaiveable super defenses:
Rule 12(b)(6) failure to state a claim
Rule 12(b)(1) lack of subject matter jurisdiction
Rule 12(b)(7) failure to join a party under Rule 19
RULE 15: Amendments
o Statute of Limitations is one of the main reasons for amending complaints
instead of filing new ones if it relates back, SoL doesnt apply.
o Rule 15(a) Amending before trial
One freebie, within 21 days of the relevant pleading (or, if in response,
within 21 days of service of the responsive pleading
After that, if
opposing party consents (ha!) OR
court grants leave, which it should freely give whenever justice
so requires
o Rule 15(c) Relating back
party can amend the complaint and it will be dated back to the original
date of the pleading (so statute of limitations not an issue)
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Responding to a Complaint
Defendants Action Consequences
1. Nothing 1. Default judgment under Rule 55
2. Answer under Rule 7 & Rule 8 2. Further proceedings
3. Pre-answer motion under Rule 12 3. Delay of answer; decision on issue
raised by motion.
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Discovery
FR 26-37
FR 26(b)(2)
FR 26 (b)(3)-(4)
FR 26(c)
26(g), 37
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bananas arrived at harbor Chiquita hired expert to inspect boat; other party wanted
examiners report but court denied
CASES: Protection
Stalnaker v. Kmart Corp - sued for sexual harassment and asked for information
regarding the sexual activities of other witnesses who were not parties in the lawsuit.
Court held under Rule26(c) that potentially embarrassing but nonetheless relevant
information is discoverable but the courts may place certain limits on it, providing
protective order prohibiting the parties from disclosing what they find to anyone
outside litigation.
Zubulake v. UBS Warburg - Zubulake sued her employer for gender discrimination
and maintained that the evidence she needs to prove her case exists in emails kept only
on UBS's computer systems. Zubulake seeks sanctions against UBS for failing to
preserve those emails. Court denies adverse inference because no duty to preserve
everything. New rules handle electronic issues better:
o Rule 37(e): absent exception circumstances, a court may not impose sanctions
under these rules on a party for failing to provide electronically stored
information lost as a result of routine, good-faith operation of an electronic
information system
o Rule 26(b)(2)(B): excuses a party from providing discovery of electronically
stored information that is "not reasonably accessible because of undue burden or
cost"
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o Interviews (voluntary) are allowed - one doesn't need formal discovery to speak
with someone (BUT this info isn't admissible - interviews are used to decide
whether or not it's worth deposing)
o Depositions can be used whether or not a previous interview has been used.
Deposition is required to put information on the court record.
o Parties don't require subpoenas to be deposed. NON-PARTYS do require a
subpoena under Rule 45.
o In a deposition, a witness cannot simply refuse to answer. Rule 30 (c)(2).
o Lawyer may instruct a deponent not to answer only for certain stated grounds,
of which relevance is not one. Rule 30(c)(2).
o Lawyers can object on grounds of irrelevance then recess to seek a protective
order. Rule 30(d)(3) Clock stops once recess is called.
Rule 33 Interrogatories only served to parties, inexpensive but not very useful
beyond routine questions
o Because the mandatory disclosures required by Rule 26(a)(1) cover many of the
preliminary matters that were once the subject of interrogatories, # of
interrogatories can safely be limited
Rule 36 Requests for Admission: ask other party to admit a fact, takes fact out of
dispute.
o Admission only binding in current action
o Must admit, deny, or say they dont have enough info to admit or deny
Compliance: Tiered approach
o Initial request or duty
o "Meet and confer" requirement before seeking judicial intervention
o Rule 37 motion to compel response
o Sanctions motion only after failure to comply with Rule 37 order
o Note some "self-enforcing sanctions" such as initial disclosures - don't disclose,
can't use it
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Peralta v Heights Medical Center (Rule 55 default judgment: notice for collection of
employee's hospital debts served after expiration) Heights sued Peralta for
collection of him employee's hospital debts. Citation issued, return showing personal
but untimely service = default judgment for on amounts claimed. placed lien on 's
house, started bill of review proceeding and asked to have judgment vacated.
Reversed for because default judgment can only be entered under Rule 55 if
gets proper notice.
CASES: SETTLEMENT
Matsushita Elec. Industrial Co. v. Epstein - class-action settlement releasing both fed
and state claims, fed courts must treat state-court judgments with same respect as state
courts under 28 USC 1738. Two class actions on behalf of MCA shareholders were
filed, one in federal and one in state court. Parties in state (Delaware) court negotiated a
settlement including a "global release of all claims" including state and fed court.
Delaware court approved settlement, but Ninth circuit held that state court could not
adjudicate federal claims. Supreme court reversed, holding under 28 USC 1738,
federal courts must give State proceedings the same full faith and credit they
would have received in the state, and thus, although state courts cannot adjudicate
federal claims, they can settle them if the state law allows them to do so.
o What Matsushita points to is the power of agreement and power of contract in
US Procedure - contract (settlement agreement) trumps jurisdictional lines
Kalinauskas v Wong - can discover facts of settled sexual harassment case, even
though confidentiality agreement was signed, under Rule 26 (discovery after
confidentiality agreements). sued for sexual discrimination, and wanted to depose a
witness who had settled a sexual harassment suit with the same employer a year earlier,
but signed a confidentiality agreement. Court held can discover basic relevant facts,
but not the terms of the settlement, because otherwise settlement and
confidentiality would be the equivalent of buying the silence of witnesses.
o Confidentiality caannot block from discovering underlying historical facts
o Confidentiality agreement can say witnesses could not volunteer information
but if deposed they have to answer
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CASES: ARBITRATION
Ferguson v Countrywide Credit Industries, Inc.- signed a binding arbitration
agreement as part of his contract. sued for sexual harassment, retaliation, and
hostile work environment and moved to compel arbitration. District court overruled
on grounds arbitration contract was unconscionable Court affirmed, holding a binding
arbitration clause in an employment contract that meets both the procedural and
substantive elements of unconscionability is not enforceable.
o Sidenote: Carter (ommitted) - same case, but decided oppositely under Texas
law
AT&T Mobility LLC v Concepcion (no requirement for class action arbitration)
Respondent customers brought a putative class action suit against AT&T in district
court, alleging false advertising and fraud. The district court denied the provider's
motion to compel arbitration, and the United States Court of Appeals for the Ninth
Circuit affirmed. The Supreme Court REVERSED, holding that even though
California found that class action waivers for arbitration are unconscionable (state
law), the Federal Arbitration Act (FAA) preempted local state rules, so as long as
arbitration is not unconscionable arbitration clauses should be enforced.
o Well designed arbitration clause can insulate against class action.
Ferguson v Writers Guild of America - 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). P appeals. The court found that judicial review of
respondent's credits determinations was restricted to considering whether
appellant demonstrated a material and prejudicial departure from the procedures
specified in the credits manual, not whether or not the arbitration itself was fair
P signed contract, writers all agreed to it, system is more efficient than having courts
decide.
Celotex Corp v. Catrett - Catrett (P) sued Celotex (D) and several asbestos
manufacturers in federal district court, claiming that her husbands death was caused by
exposure to their products. Celotex moved for summary judgment on the grounds P had
no evidence. Catrett produced three documents. Celotex objected to the documents on
the grounds that they were hearsay. The district court sustained the objection and
granted Celotexs motion for summary judgment. Appeals court reversed. Supreme
Court REVERSED (allowed summary judgment), holding the party moving for
summary judgment does not have to show there is no genuine dispute regarding a
material fact, they only have to show the basis for their motion, which may be that
the nonmoving party does not have the evidence to support its case at the time
they moved.
o Celotex aligns burdens at trial with burdens at summary judgment - if you have
the burden to produce it at trial, you have the burden to produce it at summary
judgment.
o Rule 16 scheduling is now very important - sets a time for discovery, deadline
for having your case together. If party moves for SJ before scheduled end of
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Trial
FR 16
FR 38
FR 50
FR 59
28 U.S.C. 1861-63
28 U.S.C. 455
U.S. Const. Amend. VII
US Const. Amend. XIV
JURY SELECTION
Thompson v Altheimer & Gray - sued employer and jury ruled for . appealed
arguing a juror had said that, as an employer, she thought some employees sue employers
just to get what they want, and she wasn't sure her perspective wouldn't cloud her
judgment. But also agreed to follow judge's directions. Court held a juror cannot
necessarily be excluded for holding a true belief, but the court must explore (and can
exclude) if that belief would impede juror giving due weight to the evidence and
following the judge's instructions.
JUDGE RECUSAL
Caperton v A.T. Massey Coal -m sued and jury returned verdict for . appealed.
After verdict but before appeal, donated massive amounts ($3 million, 3x more than
judge's own committee spent) of money to a judge candidate, who won and then heard 's
case on appeal, reversing in favor of . Court held due process requires a judge to recuse
himself when there is a serious risk of actual bias based on objective and reasonable
perceptions (regardless of whether or not bias can actually be proved), such as when a
person with a personal stake in a particular case had a significant and disproportionate
influence in placing the judge on that case.
o Due process (constitutional issue) not 455 issue, because they tried 455 and
failed.
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Lind v Schenley Industries - sued for enforcement of an oral contract with no written
documentation. Jury ruled for even though his story was pretty incredible, but judge
entered JNOV and alternative new trial under Rule 59. Although new trials can be
ordered at the judge's discretion, that discretion cannot be abused to order a new trial
simply because the judge disagreed with the jury's findings.
Peterson v Wilson (Texas Southern University administrator firing) - sued for
arbitrarily firing him. Jury found for . Judge granted new trial sua sponte (of his own
accord, without a motion by a party) after interviewing jurors after the fact and deciding
they didn't understand his instructions. Court held under the common law and FRE
606(b), a judge cannot impeach a jury verdict and grant new trial under Rule 59 except in
cases of juror testimony relating to extraneous influences.
o Administrative justification - hard enough to get jurors, don't want to make it
harder by grilling them on how they reached a verdict
o Systematic justification: only close cases should reach a jury; under those
circumstances part of what we want a jury to do is outside the boundaries of logic
Demographics
o 98% State court
o Contracts mostly judges 2/3 win rate
o Torts mostly juries 50% win rates
o Remember: the burden of persuasion very rarely matters in civil trials because the
standard is only more probable than not
Burden of production is a much bigger deal
U.S. Const. Amend. VII establish right to civil jury trials
o Right to jury trial clause: In Suits at common law, where the value in controversy
shall exceed twenty dollars, the right of trial by jury shall be preserved
Not ALL civil cases are jury trials. (All criminal cases are)
o Reexamination clause: no fact tried by a jury, shall be otherwise re-examined
in any Court of the United States, [other] than according to the rules of the
common law.
Allows for JML under Rule 50 because of common law exceptions
o Historical test for both clauses: Jury trial for anything that would have been a
common-law claim in 1791 (Bill of Rights)
SEE LIST OF Legal remedies under Incentives to Litigate
a Cases that blend equitable and legal claims, judge should defer to jury
If different claims split between Judge and Jury, whoever "finds the facts"
first binds the later decision-makers.
o Amendment VI - ALL criminal prosecutions have the right to a jury trial
Includes state and fed courts
Compare with Amendment VII - jury trial for civil cases SOMETIMES:
"in suits at common law the right of trial by jury shall be preserved."
(Only governs jury trials in federal courts, state rules apply differently)
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For CRIMINAL trials judge cannot prevent a jury from acquitting even if
he thinks it's not possible for them to do so. For CIVIL TRIALS judge can
enter j.m.l. or directed verdict if he thinks no sane jury could rule for a
party.
o 2 protections of Jury Verdicts
Substantive - Amendment VII Reexamination Clause
Procedural - Federal Rule of Evidence 606(b) blocking improper
evidence to challenge jury verdicts
Rule 38 - affirms constitutional status of jury trial, establishes timeline & waiver penalty
State vs Federal
o Rule 38 permits 10 days after the pleadings reveal a jury triable issue to demand a
jury trial if no motion made, right to demand a jury is waived
o 7th Amendment doesn't apply to states
o States generally less favorable to jury trial - more financial strain on state court
budgets, less constitutional pressure to err on side of jury trial
Assembling the jury pool
o Voir Dire
o 28 USC 1861: right to jury trial of random fair cross section of the community
o 28 USC 1863-1866 creating cross sectional summons
o 28 USC 1867(c) Challenging jury pool
Challenges for cause
Doesn't understand English, is related to party on trial, unable to be
impartial
Can be difficult to win
Peremptory challenges
No reason needed - limited in number, can be challenged for racial
or gender bias.
Selecting or Recusing Judges
o Selecting judges: Election or Appointment
Want to be a judge?
States: several patterns--
o Gubernatorial appointment and periodic re-election most
common.
o Terms tend to be 7-10 years
Federal: Nomination by President, confirmation by Senate, life
terms.
o Oversight: Discipline based on Judicial Ethics (see 28 USC 351) - doesnt
remove judge from a case
Judge discipline
Federal:
o Removal only by impeachment, conviction in Senate.
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Rule 50 Rule 59
Party Motion Judges Discretion OR Party
o Focus on adequacy of Motion
evidence o Focus on Evidentiary
o Replace jurys verdict with adequacy OR process
judges judgment: for
rational trier of fact to come
out for party opposing
verdict (the party opposing
motion meet its burden of
production?)
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Questions to ask:
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States vary: in CA if you fix your complaint, not precluded (but last
decision was 50 years ago)
o Settlement & release
No - nothing is adjudicated.
You can challenge whether something can be brought to court under
settlement agreement/breach of contract, but NOT under claim preclusion.
Any ways to get justice after the judgment?
o Legal error:
Appeal
o New evidence; mistakes; corruption
Rule 60 -- Relief From Judgment
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Gargallo v Merrill Lynch (claim preclusion for federal court after improper state
judgment) Merrill Lynch sued in state court to collect debts. countersued alleging
negligence, misrepresentation, churning, and violation of federal securities laws. State
court dismissed as a discovery sanction; then filed a suit in federal district court, which
dismissed under res judicata. appealed. Court held for that claim preclusion did not
apply because Federal court must give state court judgment the same preclusive
effect that judgment would have in a state court. In this case Ohio State court would
preclude based on this judgment, but would NOT have precluded a cause of action over
which the adjudicating court had no subject matter jurisdiction, so federal court must do
the same.
Illinois Central Gulf Railroad v. Parks (car crash victim sues as co-plaintiff with partner
for loss of consortium and then separately for personal injuries) (driver) and wife
(passenger) were both in a car accident when they collided with an Illinois Central train.
Wife sued for injuries and sued as part of that for loss of consortium - granted for wife
but denied for . then sued for personal injuries. Court held issue estoppel prevents
from re-litigating facts established in the last case (railroad negligence, proximate
cause, no loss of consortium damages), but new claim can be brought up on issues not
previously litigated (personal injuries and contributory negligence).
o Preclusion in bench trial versus jury trial - if judgment rests on several grounds,
what is precluded?
If its bench trial judge has to explain decision, so its easy to see if he lost
on A and didnt consider B, B will probably not be precluded.
If its a jury trial then decision is a black box and we have not idea what if
any issues they decided on. Issues should probably not be precluded.
Restatement Judgments 1st takes a position that both are precluded
Restatement Judgements 2d says neither are precluded
Idea: Dual finding removes incentives to appeal either one, and
without incentive to appeal, we should be wary of attaching
preclusive effect.
Only want claim preclusion to apply when we're sure that the first
court got it right
SO in jury trial case, since not sure why they made their decision,
not precluded
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Parklane Hosiery Co. v. Shore (Issue precluded in class action because of earlier SEC
suit) First suit: SEC v. Parklane for fraud in materially false proxy statement. A statute
prohibited private citizens from joining as plaintiffs without the approval of the SEC.
Judge found proxy statement was fraudulent. Second suit: Stockholders class action v.
Parklane. Stockholders move for partial summary judgment, want Parklane precluded
from relitigating issue of proxy statement was fraudulent. The Court of Appeals allowed
this offensive use of collateral estoppel, holding a litigant who was not a party to a prior
judgment may use that judgment offensively to prevent a defendant from relitigating
issues resolved in the earlier proceeding, as long as none of the exceptions that would
lead to injustice are present.
o D cannot relitigate if:
The defendant had a full and fair opportunity to defend himself vigorously
in the first action,
there are no other previous inconsistent judgments, and
no new procedural opportunities or change in law is available to the
defendant in the new action.
o D can relitigate if:
stakes in first case were lower than in second case
discovery (or other procedure) was not available in first case
there are prior inconsistent judgments: State Farm Fire & Casualty Co.
P could have easily joined first lawsuit, but decided to wait and see how it
turned out
o Note: Parklane abandons mutuality when party with burden had opportunity
to litigate already. The ruling does not offend the 7th amendment, because even
though offensive use of collateral estoppel was not allowed without mutuality in
1791, the fundamental elements of the jury trial did not require to remain the
same now.
State Farm Fire Casualty Co v Century Home Components (50 lawsuits for same fire)
, which stored sawdust in a box on its premises, somehow started a fire which spread to
's premises. Over 50 people sued for fire damage. In first 3 cases, 1 case came out for
but other 2 came out for . Other 47 cases consolidated and tried to push for issue
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Issue Preclusion only applies once it has been decided claim preclusion does not
apply
Black letter of issue preclusion
o Same issue in both cases
o Adequate incentive and opportunity to litigate issue: diff from claim
preclusion, where you end up precluding claims never litigated!
o Actually litigated and determined
o Essential to the judgment
Do we have same issue?
o Same definition? (For example: residency to determine a scholarship versus taxes
could be different)
o Different legal standard? (eg. criminal and civil charges)
(exception: if higher standard in first lawsuit & party with larger burden
wins, then if 2nd suit has lower standard, then precluded)
Criminal charge first (judgment for P), then civil charge preclusion.
Civil charge first, then criminal charge no preclusion.
WHEN does issue preclusion attach?
o See Rest 2d (Judgments) 27: The doctrine of issue preclusion (or collateral
estoppel) provides that a final judgment precludes relitigation of the same issue
of fact or law if:
(1) the issue was actually litigated, determined and necessary to the
judgment in the prior adjudication; and
(2) the circumstances of the particular case do not suggest any reason why
it would be unfair to invoke the doctrine
o Trial and judgment
Yes - Litigated and determined.
o Judgment as a matter of law (directed verdict or J.N.O.V.)
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Jurisdiction
Judicial jurisdiction: the power of a court to render a judgment
o Personal Jurisdiction: the power of court over
o Subject matter jurisdiction: Power of court over cases like these
o Court must have BOTH subject matter AND personal jurisdiction to render judgment
o State courts:
"kitchen sink" jurisdiction -- practically everything, including most federal
law if they want
o Federal courts:
limited jurisdicition, primarily:
federal questions: i.e., suits "arising under" federal law
bankruptcy is always federal; so are patent and copyright
claims, securities
other federal Q's can be litigated in state courts, but one party
or the other will usually take it to fed ct.
diversity suits, ie., suits between: (28 USC 1332)
citizens of different States
i. "domicile" test
ii. residence/physical presence
iii. intent to remain indefinitely
citizens of a State and citizens or subjects of a foreign state
citizens of different States and in which citizens or subjects of
a foreign state are additional parties
a foreign state as plaintiff and citizens of a State or of different
States
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Personal Jurisdiction
US Const Art IV
US Const Amend. XIV
Rule 12(b), (h), (g)
FR 4(k)(1)(A)
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o Property alone can't support jurisdiction if its unrelated to the claim. (no more
"quasi in rem" jurisdiction). Presence of property in a state affects level of contact. If
case is about ownership of that property, then the presence in the state is enough
contact Judgment in "in rem" cases is limited to value of the property, and factual
findings do not bind in later cases.
o Individuals and corporations should be treated similarly.
o Afterward: DE established a new law that you consent to jurisdiction when you
become director of a DE corporation
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be sued everywhere.
o Interactive website: MAYBE can be sued, depending on specifics / commericalness.
o Passive website (just shows info): CANNOT be sued anywhere.
J. McIntyre Machinery, Ltd. v. Nicastro British manufacturer sold to national distributor in
US, one machine ends up in New Jersey and injures , brings suit in NJ and J. McIntyre
contests jurisdiction. Court holds that, barring multiple sales or direct marketing towards one
state, no jurisdiction in a state if sales were directed to the U.S. generally but not a specific
state. Dissent says this allows foreign companies to dodge liability.
o Foreign businesses
GENERAL JURISDICTION
Goodyear Dunlop Tires Operations, SA v Brown sued multiple s because tire failure in
Paris killed their sons: Goodyear USA, Goodyear Luxembourg, Goodyear France and
Goodyear Turkey in North Carolina. Goodyear USA doesnt contest, but subsidiaries claim
lack of personal jurisdiction because they are separate companies. No specific jurisdiction
(no targeted sales in state), claims general jurisdiction under stream of commerce
argument. Court holds subsidiaries can be treated as separate companies, thus no general
jurisdiction when there is no continuous and systematic activity.
Burnham v. Superior Court husband and wife separate, H. in NJ, wife in CA, H says he
will start divorce proceedings in NJ but doesnt serve wife. On 3-day business trip, also
decided to visit to wife & kids in CA. Wife personally serves H with CA divorce. Court holds
that personal service in a state has always established jurisdiction even without minimal
contacts and specific jurisdiction is only needed when personal service isnt possible.
o Rule 4(k)2: If you don't have enough contact with any individual state to support
general jurisdiction, but you do a lot of business in America, might be able to have
"general jurisdiction" in a federal court.
CONSENT TO JURISDICTION
Carnival Cruise Lines, Inc. v. Shute - booked Carnival Cruise, ticket included forum
selection clause requiring all disputes be litigated in Florida. Court held forum selection
clauses are a legitimate and enforceable contractual method to displace standard procedural
rules of personal jurisdiction.
NOTICE
Mullane v. Central Hanover Bank & Trust: NY law set up pooled trusts; periodically the
trustees chance for accounting to see how the trust is doing or challenge decisions. Bank
put notice in newspaper per minimal requirement of law even though a number of trustees
were out of state. Court held that token notice was not sufficient for due process and
members of a class had to be personally notified where the names and addresses of those
affected are available.
o Key case!
o Method must be REASONABLY CALCULATED to reach parties, and must
afford REASONABLE TIME to appear.
o Reasonable risk that notice won't reach everyone is acceptable (when others are
reached who can represent similar interests, and can object) enough bind even
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A 12(b)(1) ruling in fed court will have no effect in state court unless the defendant tries to remove, in which
case it will prevent removal. The ruling establishes only that the federal court does not have jurisdiction:
presumably a state court will.
A 12(b)(2) motion will not bar the re-filing of the claim but will facilitate a motion to dismiss in state court on
the same jurisdictional grounds. Because federal "long-arm" statutes are always at least as long as those of the
state (Rule 4(k)(1)(A)), if a federal court lacks personal jurisdiction, so will that of the state in question.
Moreover, the federal ruling will be preclusive on the question of personal jurisdiction, barring relitigation of
the issue in a state court.
A 12(b)(6) dismissal in federal court precludes relitigation of the same or any transactionally related claim. That
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rule flows from the ease of amendment and the broad joinder of claims possible in federal courts. The hardest
case for applying such a preclusive rule would be if the basis for the trial court's ruling was the absence of a
federal claimalthough this is technically a jurisdictional ruling, since plaintiff could have asked for
dismissal to be explicitly jurisdictional and failed to do so, claim preclusion applies.
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Federal Jurisdiction
U.S. Const. Article III
28 U.S.C. 1331
28 U.S.C. 1332(a)-(c), (e)
28 U.S.C. 1367
28 U.S.C. 1441-47
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Basic questions:
o Can this suit be brought in any court (state or fed) in a particular state?
Personal jurisdiction flows from due process clause
o Assuming it can be brought in that state, must that court be a state court, a federal
court, or either?
Federal Jurisdiction : mostly from Article III and statutes.
Just because you are in FED COURT on a diversity action does NOT mean you don't have to
worry about personal jurisdiction! They are independent requirements and each must exist
for court to have adjudicatory power.
Historically 3 important branches
o Claims that arise from federal law - "federal question" or "arising under" jurisdiction
o Claimants who come from different states (diversity jurisdiction)
o Boats (admiralty jurisdiction) historically significant control over international trade;
no longer an important part of the conversation
o Newcomer: United States as a Party
Historically insignificant; now almost 20% of caseload
28 USC 1345 - fed jurisdiction brought by the US
i.e. defaults on federally guaranteed student loans
28 USC 1346 for claims brought against the US
Two parts governing federal jurisdiction
o 28 USC 1331: The district courts shall have original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States.
Applies to Federal District Courts
Interpreted more narrowly to apply only to claims that themselves arise under
federal law. Not defenses!
Congressional Limits on Federal Jurisdiction
28 USC 1331 created by Congress. They could change the rule if
they want to.
But can't expand to hear any claim that could be heard in a state court -
that would be beyond the constitution.
Amount in controversy, complete diversity requirement, claim "arising
under" requirement none are limits required by Constitution, instead
given by Congress
o Article III: The judicial Power shall extend to all Cases, in Law and Equity, arising
under this Constitution, the Laws of the United States, and Treaties made, or
which shall be made...
Applies to SCOTUS
Defines outer limits of fed jur
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Interpreted BROADER than 1331 Power: SC can rule on claims and defenses
that arise under federal law.
o How could you re-write USC 1331 to be broader?
District courts shall have original jurisdiction of all civil actions in which
either a claim or a defense arises under
o Current restriction flows from interpretation of STATUTE, not from Constitution
Challenging federal subject matter jurisdiction
o Who raised the issue in Mottley? The court itself did - sua sponte
o Fed jur can be challenged by the court even if both parties are happy to try case in
federal court
o Federal subject matter jurisdiction isn't waivable by parties
o In contrast to personal jurisdiction, we don't know for sure whether subject matter
jurisdiction can be challenged collaterally - very few cases addressing this issue
Federal power is presumptively limited: unless Constitution say fed has a certain power, it
doesn't
o State power is presumptively given: unless state or fed gov't limits a power, state has
it
o Rule 8(a)(1) - must show grounds for federal jurisdiction (thus most states that have
adopted FRCP do not have an 8(a)(1) equivalent b/ state jur assumed)
DIVERSITY
o 28 USC 1332 Diversity AND $75K Limit
o Diversity
COMPLETE diversity requirement no Ps and Ds from same state
Determine citizenship based on factual inquiry into party's intent. (Hawkins v
Masters Farms )
living abroad, after previously being a citizen of a different state, is not
enough. (Redner)
Partnership = citizen where every partner is a citizen
Corporation = citizen, where it is incorporated, or has its principal place of
business (which could be bulk of ops, or nerve center) (1332(c))
If BOTH parties are foreign (alienage jurisdiction) does NOT go to federal
court - has to be in state court, and state courts may have a problem with
personal jurisdiction
o Financial limits Note: statute says in excess of $75k, so if it's $75K exactly, no
diversity
If it's an injunction have to calculate the value of injunctive relief
Shouldn't dismiss unless apparent to legal certainty that P can't get this much.
Hope for HUGE punitives is not enough.
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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.
If has a diversity case and joins a second, non-diverse then
NO supplemental jurisdiction
If has an arising under case and joins a non-diverse then
supplemental jurisdiction
HOW TO TELL:
Is original claim properly in fed court?
Is claim a diversity ONLY case?
Does [another claim against same ] OR [same claim against different
] have its own jurisdiction? (federal question, over the amount)
If yes - no need to worry about supp jur
If no (say $5K claim or diversity joinder)
i. Is it part of the same claim or controversy?
ii. Does it have jurisdiction under 1367(a)?
iii. Does 1367(b) withdraw?
1. Does NOT withdraw different claim against
same
2. Under what rule is joined? If one of rules on
"shopping list" SUPP JUR WITHDRAWN
o 1367(c) can refuse to hear case if novel, complex, etc.
o 1367(d) - if fed court dismisses state claims and SOL has run, gives 30 day grace
Removal 28 USC 1441
o As with all jurisdiction, gets first choice and then can fight back
o WHO removes:
o WHEN can Remove:: 30 day or 1 year limit (if pleading that established fed jur
came late in the case, i.e. if a drops out and establishes complete diversity or raise
their damages over the federal limit)
If wants to keep in state court, keep prayer for damages low for a year, then
increase after removal limit is over
1 year limit applies ONLY to diversity only claim
28 USC 1446 how to remove
28 USC 1446(c) if prevents removal in bad faith then court can still
remove regardless of time limit
2011 Venue and Jurisdiction clarification act who wants to remove but
for jurisdictional amount can say that amount is not real amount in
controversy and challenge for removal
o 1441(b) - NO removal for home-state advantage for in DIVERSITY ONLY cases
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Collateral Attack
CASES: COLLATERAL ATTACK
Durfee v. Duke P (Nebraska) sued D (MO) for quiet title over land right on border
between two states. Debatable which state land is in. D appears and the court fully
litigates and decides jurisdiction (decides Nebraska jur is ok). Court holds Full Faith and
Credit precludes collateral attack on jurisdiction since the issue was fully litigated and
decided in the first court. But if D has no notice and doesnt appear, he may challenge
personal juris on collateral attack.
United States v Beggerly land deed in 1803 potentially given to Ps ancestors, but
unsure if not, US owns land. Case settled in 1982 for modest sum reflecting uncertain
title, judgment (consent decree) entered. In 1994 new information surfaces showing that
Ps family did own land. P moved to set aside verdict under FR 60(b) and award
damages as an independent action allowing it to overcome the 1-year time limit. Court
holds independent action must only be allowed for grave miscarriages of justice , which
this case is not.
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mistake, fraud by opposing party (some w/ one year stat of limits); also allows
independent action to reopen judgment (reserved for cases w/ injustice deemed
gross enough to demand departure from rigid adherence to res judicata). This is
NOT a substitute for appeal
o easier to get court to reopen a default judgment, since party never had a fair
shot. Some advise lawyers not to take default judgment unless no other choice.
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Joinder
FR 13
FR 18
FR 20
28 U.S.C. 1367
CASES: JOINDER
Plant v. Blazer - P sued D for federal claim under Truth-in-Lending Act, D
counterclaimed for unpaid debt. D won, P says no jurisd over Ds claim.The 5th circuit
holds the debt a compulsory counterclaim under Rule 13, with the result that supp jur
extends to counterclaim. Other courts have reached different conclusions on similar
counterclaims if its permissive only, fed jur does not necessarily apply.
Mosley v GM - multiple Ps complaining of multiple kinds of Title VII discrimination by
the same D. Are these claims close enough -- is there a way to frame "transaction or
occurrence" -- to justify bringing all these claims in a single suit? Court holds definition
of transaction is flexible and thus parties meet requirement for joinder under FR 20(a)
because the activities can be seen as part of the same transaction of a company-wide
system of discrimination.
o Strategy/Policy:
Join under Rule 20 b/c show GMs pattern of discrimination, fee-shifting
(more expensive for individuals if separate trials).
Dont join b/c: divide & conquer: easier to paint individual P as
disgruntled employee as oppose to 10-20 employees who experience this,
Ps are more likely to get punitive damages if joined.
Either way, prejudicial to a party.
o ISSUES
SCOPE of joinder relates to preclusion: if joinder is broad enough
(discrimination against women and blacks), futures Ps with similar claims
might be precluded because claims would probably be considered
compulsory
Rule 42 allows judge to separate claims for trial, could be broken back
down into women, blacks, etc. - this is meant to solve some of the broad
joinder problems.
Joinder:
o Does the rule or rules permit joining of the claims or parties?
o Does federal subject matter jurisdiction extend this far?
o Does personal jurisdiction apply?
o If we join or cannot join claims, how does that effect preclusion?
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Context-Sensitive Joinder
Impleader
CASES: IMPLEADER
Price v. CTB - farmer sued chicken house builder in Fed Court (most likely on diversity).
Constructor moves to file a third party complaint under Rule 14 to pass on liability to
person who designed nailes used in construction. Court holds since Alabama state law
allows sellers to pass on liability, D properly impleaded nailmaker.
o ISSUES
Impleader increases costs of litigation for - so Price isn't very happy
about impleading nailmaker
40 similar suits against chicken house builder - if housemaker loses, issue
preclusion could apply to housemaker in other suits
Might encourage housemaker to SETTLE with farmer because settlements
can't be precluded
Kroger - P (IA) sues D1 Power Co (NB). D1 impleads D2 Equip co (IA/NB). D2 says it
is incorporated in NB but doesnt say anything else about citizenship, so P amends
complaint to add suit for D2, thinking there is diversity. D1 successfully drops out on
Summary Judgment. Left w/ P vs. D2. Suddenly D2 announces it is a citizen of IA
because its primary place of business is there. Lower court tries to estop D2 from
dismissing from fed court because it mislead P, but SC reverses: because no
supplemental jurisdiction is allowed for claims by plaintiffs brought against 3rd
party defendants. There must still be complete diversity for claims by P.
o This rule now codified in 28 USC 1367(b)
o 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.
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Compulsory Joinder
FR 19
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Intervention
FR 24
CASES: INTERVENTION
NRDC v. US Nuclear Regulatory Commission - NRDC originally sued NRC and
NMEIA to prohibit them from issuing licenses for the operation of uranium mills, Kerr
moved to intervene under 24(a)(2) b/c Kerr was one of the largest holders of uranium
properties, EIR would delay and possibly harm the activation of their license. United
Nuclear's intervention not challenged b/c they already had a license so this could clearly
impact them. Court holds Kerr can intervene because United Nuclear does not adequately
represent their interests - UN already has a license, would love if they were the only one
in the state with a license, outcome substantially affects Kerr.
Martin v. Wilks black firefighters sued for racial discrimination, gave notice of
hearings. After hearings and coming to settlement, but before final decree, white
firefighters moved to intervene, court held that firefighters could intervene because they
had neither intervened nor joined prior suit so they shouldnt be deprived of their legal
rights to protect their interests.
o Seems to imply that "lurkers" are not precluded from bringing their own claims
Plaintiffs didn't want whites to join because they had notice and
opportunity to join but instead they waited and pounced after judgment
was made - impermissible collateral attack
Court says no, lurking is allowed
Compare to other cases:
Searle bros - holding that witnesses called in lawsuit to which they
were not parties are not precluded
Parklane hints that if you do have an opportunity to join but dont,
you may not be able to take advantage of issue preclusion.
Other casesTaylor v. Sturgell, for example, say that the
opportunity to join isnt enough: that if I want to bind a person I
have to join him, which is consistent with Martin v. Wilks.
Interpleader
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FR 22
28 U.S.C. 1335
1397
2361
Paragon Molding, Ltd. v. Safeco Insurance Company - "Duck call" store burns to
ground, likely will go bankrupt. Original suit: Business sues Insurer for money from fire,
federal district court (diversity). Creditor scramble: don't want other creditors to get paid
before they do, all seek to intervene. Court holds parties should proceed under
interpleader to make Duck Call Co only plaintiff (stakeholder) and all other parties
claimants/party defendants to figure out who gets owed what and whose claims take
precedent over other claims. Judge hopes with all his strict directions to force case to
settle (interpleader cases often do).
You - "stakeholder"
Other members of party -"claimants"
Rule 22 - procedural channel to create interpleader (see Form 31)
Statues come in to play to make things easier when case isn't "clean" - not complete
diversity, diversity between claimants
o 28 USC 1335 - deals with diverse claimants
o 1335(a) - removes limitations on federal subject matter jurisdiction, removes
complete diversity, requires only minimal diversity for claimants
o 2361 - allows nationwide service of process, establishing personal jurisdiction
(service = PJ)
Does it still work after International Shoe requirement of minimal
contacts?
Yes - due process requires SOME forum where case can be held and if this
didn't establish PJ, cases with diverse defendants couldn't be heard in any
state or fed court
If you have CA and AK claimants, case could be in EITHER state
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