Eric Strum’s Civ Pro Outline Fall 2014

Personal Jurisdiction
Section A) In Personam Jurisdiction – two kinds:
1) General
2) Specific
What’s the difference?

General- the defendant can be sued in the forum that on a claim that arose anywhere in
the world.

Specific – The D is sued on a claim that arose in the forum. Something you did in the
state.
This is called the doctrine of relatedness – does claim arise from activities of the person

i) The constitutional limit

Pennoyer v Neff

Gives us traditional basis of in personam jurisdiction:

1) The D is served with process in the forum (called presence)

-He must be present when served with process in the forum – gives us general
jurisdiction

2) The D’s agent is served with process in the forum – if person’s agent is served with
process in the forum, that person is served as well.

3) D is domiciled in the forum – this also gives general jurisdiction. Ex: if someone is
domiciled in Maryland, they are subject to being served in Maryland, even if they did
something in another country.

4) If the D consents – you can always consent to personal jurisdiction

Under Pennyoer it is very tough to get in personam jurisdiction. If the person doesn’t fall
under these categories, it is hard to serve him in the forum. Otherwise, you have to catch
him in the forum. It became much easier once we became more mobile. So the court
expanded these bases. Ex: in hess v palowski

Hess v Pawloski
Pennsylvania guy who drove up to Massachusetts and got into an accident with someone
in Mass. Penn person got out of the state. How did we get him in Mass?

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Implied consent- It was held under the non-resident motorcyclist act, which says that
by driving into our state, you consent to jurisdiction. You also appoint a state officer
as an agent of that state for due process.
Quantity (how many Unrelated Highly Related
contacts?)
Isolated NO jurisdiction MAYBE jurisdiction
(specific jurisdiction, Hess)

Continuous and MAYBE jurisdiction YES jurisdiction

Systematic (general jurisdiction) (International Shoe)

- This is expanded from Pennoyer, because it went from consent to implied

consent. This still holds true today.
SPECIFIC JURISDICTION
Things started changing in 1945 with Int. Show:
 International Shoe throws out the implied consent aspect of Hess- agrees with
asserting personal jurisdiction over non-residents on roads because of state
interest, relatedness

International Shoe
 A MI/DE company was getting solicitations in WA. 13 employees worked in
WA. No transactions, office, property in WA.
 International shoe had presence in Washington state because had systematic and
continuous activities in the state- when doing business in the state you incur
obligations

Here the traditional bases are not expanding, but restatement of the principles.

Due process requirement:

To have jurisdiction over the D, the D must have such minimum
contacts with the forum, so that jurisdiction does not offend traditional
notions of fair play and substantial justice.

1) It is clear that we can serve process outside the forum

- if you want to sue someone outside the forum, you have to look at contacts.
2) It appears this is two parts to Int. Shoe
 Contacts
 Fairness

3) Nowhere does it overrule Pennoyer. It is implied here that Pennoyer applies with
Int Shoe.

You have to apply minimum contacts to every case

Mcgee

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Upheld jurisdiction in California over a Texas Insurance company based on the sale of
one contract of insurance sold in California. The court emphasized that the insurance
company solicited advertisements and business in California. Also California had an
interest in providing justice for its’ citizens

 Rule: state may exercise jurisdiction over a defendant whose contact with the
state consists of only a single act if the act is related to the litigation, and was
deliberately directed toward the state
Here the contact was highly related to the cause of action.
o Contract created substantial connection (high relatedness) with the state

Hanson v Denkla
The court said no jurisdiction here. It said that under International shoe, the contact must
result from Purposeful Availment – the defendant must reach out to the forum,
must direct activity in some way to the forum in some way.

Purposeful Availment- Action that shows someone/something did something so

substantial in a forum state that they made themselves amenable to suit in forum state

In Hanson we did not have this.

Here we had a wealthy Penn woman, after years of doing business with this Delaware
bank, this woman moved to Florida. She continued to do business in Florida. After she
passed away there was litigation in Florida and the question was if there is jurisdiction
over the Delaware bank in Florida?
-The court ruled no PJ over Delaware bank in Florida. The Bank did not avail itself to
Florida. The only contact it has with Florida was through the woman who was doing
business with them from Florida, but they did not purposefully reach out to do business in
Florida (unilateral activity).

Better example of this is WWV:

WWV
- Driving from NYC to Tucson Arizona, accident in Oklahoma, they sue in Oklahoma,
No jurisdiction over vendor or manufacturer
o No purposeful availment
- Defendants did not send car to Oklahoma, there was no relevant contact
o Plaintiff drove the car there. Unilateral act of Plaintiff
- Foreseeable that the product will get somewhere is irrelevant
o It must be foreseeable that defendant could get sued in the forum
- Purpose of minimum contacts
o Protecting defendants from burden of litigation in distant or inconvenient
forum; reasonableness and fairness
o Ensures states don’t reach beyond the limits of federalism into other states
sovereignty

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- Four factors to consider beyond minimum contacts:
1. Forum states interest in adjudicating the dispute;
2. Plaintiff’s interest in obtaining convenient relief (when that interest is not
adequately protected by P’s power to choose the forum);
3. Interstate judicial system’s interest in obtaining the most efficient resolution
of controversies;
4. Shared interest of the several states in furthering fundamental substantive
social policies

Keeton
 We don’t care about the Plaintiff’s contacts with the forum, b/c they are the
ones who brought the suit there…we only care about defendant’s contacts
Kulko
 Introduces another way of establishing a contact
 Causing an Effect in the forum state can sometimes be a contact
 Here we have a family matter (custody after divorce), so maybe that factors
in significantly with respect to PJ
Calder
 Yes PJ…why? EFFECTS TEST
o Defendant’s INTENTIAONLLY reached into California and caused a
harm (EFFECT), creating a contact
o This is a defamation case: not only are the effects significantly felt in
several states, but the Defendant also caused the effect in state as a
result of all these contacts it had with it (Hollywood, the industry, etc.)
 EFFECTS TEST: way to determine purposefulness
o D committed an intentional act
o Expressly aimed at forum state
o Cause harm, brunt suffered by P in forum state, and D knows brunt of harm
likely to be suffered in forum state
 Petitioner intended to and did cause harm to the respondent in CA
- Rule: D need not step foot in forum state if he has caused some sort of adverse effect in
that state (here defaming P)

Burger King
Jurisdiction is upheld over two guys who run a BK in Michigan. They get sued in and by
BK Corp., which is in Florida. The court emphasizes that there are two parts from It.
Shoe: 1) There are contacts and 2) Fairness.

BK tells us that you must have a relevant contact before you even look at fairness.
All the fairness in the world won’t make up for the lack of contact.

Contact: These Michigan people reached out to BK and acquired a contract to run a BK
in Michigan. Contact here is easy.

Fairness: This is what they argued here- that jurisdiction was not fair. SC rejected the
argument. They claimed it was too difficult to go to FL. SC didn’t care. If you want to

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show that it is a burden you have to show that it is so gravely inconvenient that you are
at a severe disadvantage in the case. However, this is almost impossible to show.

 Yet another way of establishing PJ:

o Contract w/ choice of law provision
 Speaks to PA b/c invoking benefits and protection of FL
 Knew he would be subject to suit there
o Purposeful Availment (D in Michigan reached out to FL corporation
deliberately to do business, prior negotiations)
o Continuous and systematic (20 years in contract) which also implies a
substantial relationship
 What does BK tell us?
o Contract is not enough: need contract PLUS
o Course of dealings there is a contact, that’s some PA (negotiations)
 Rule: Contract alone is not enough, need to have something else for purposeful
availment – contract plus (prior negotiations, future consequences, terms of
contract, etc.). Choice of law provision is enough. If purposefulness is not
satisfied, and not sure if min contacts, look to reasonableness.

Asahi

I make components in state A and sell them to a manufacturer in state B. State B takes
A’s product and incorporates it into their product and sells the Machine in states C, D and
E. A did not send it to C,D and E.
Does A have a relevant contacts with these states?

 Issue: Is stream of commerce argument good enough to establish minimum

contacts?
 PJ exercise based on:
o 1) Burden on Defendant? HIGH here (they are very far away based)
o 2) Interest of forum state (Cal.)? Medium/Low…More low
o 3) P’s interest in obtaining relief? Probably Medium
o 4) Interstate judicial systems interest in obtaining most efficient
resolution of controversies; the shared interest of several states in
furthering fundamental substantive social policies? LOW, other
nations are the ones with interest in social policy and legal uniformity

Asahi fails to answer this question. This case gives us no laws, but gives us two strong
arguments/ theories:

1) Brennan’s stream of commerce theory: It is a contact if it is put into the stream of

commerce and can reasonably anticipate that it will get to states C, D and E.

2) O’connor’s stream of commerce PLUS theory: rejected above theory. You need what
Brennan said plus an intent to serve states C, D and E. You must target these states
(ads, customer service, etc.) There is no purposeful availment without this. Must go

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out of way to purposefully have a product end up in forum state, not enough to just know
your product will end up there

 Only case that held that they lack jurisdiction on fairness grounds

McIntyre

English company that manufactures enormous metal sheers (enormous scissors). This
English companies sells this product to a company in Ohio (they only reach out to this
company in Ohio). The Ohio company then sells machines in other states, including NJ.
Person who got injured by machine sues the English company in NJ.

The court held that the company cannot be sued in NJ, why?
- They adopt the O’connor approach here. No PJ because it didn’t reach out
or target NJ.
Dissent (Ginsburg and company):
- their idea is consistent with Brennan. Their argument is that they target the US,
they know their product will end up somewhere in the states. If nationwide
marketing scheme doesn’t exclude any region, should be subjected to PJ in all
states where product ends up

Walden v. Fiore
 P’s money gets seized in GA by D, later try to get it back in NV but initially don’t
until afterwards
 Issue: Does Nevada court have PJ over GA police officer for the funds he seized
of NV residents? NO
 Holding: No PJ over someone without minimum contacts with forum state
 Reasoning: Defendant’s contact with the forum needs to be something other than
his contact with the Plaintiff…just because the Plaintiff whose funds he seized
had a contact with NV doesn’t mean that he does, so of course no PJ...Also, effect
in state not good enough, only reason effect was felt in NV was because that’s
where Plaintiff’s happened to try and withdraw the money.
 The Defendant seized funds in GA, makes false statement in GA, which caused
an effect in NVNOT ENOUGH
o What’s the difference between this and Calder?
 INTENT distinguishing element
 IN Calder, Defendant intended to cause an effect in Cal…here no
such intent
o What’s the difference between this and Hansen?
 Walden says, contact with FORUM, not Plaintiff
 This is a case where effects are not enough
 Hansen says, Contract helps a lot
 Hansen is about a business relationship

Personal Jurisdiction, Specific Jurisdiction Test:

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Pre-Requisite- Specific/General, Traditional basis, Long-Arm Statute
1) What are the contacts with forum state?
o ID them
2) Are they the product of Purposeful Availment? (Only ones that count)
o Ex: Advertising, marketing, business, contract, property, manufacturing, product
distribution, etc.)
o Foreseeable (to be hailed into court there AND that products will end up there)
o Intend to invoke benefits and protections of forum
o Whether or not they count will depend largely on what kind of test the judge is
using (O’Conner, Kennedy or Brennan)
 PA or PD?
3) Quantity and Relatedness
o How many contacts, and how related are those contacts to the CoA (and to
PA/PD)
4) Fairness and Reasonableness (talk about Asahi and BK)
o Burden on D
o Interest of P in obtaining relief
o Forum states interest
o Judicial Efficiency (where are the witnesses, evidence, etc.)
o Shared interest of states in substantive social policies
 Burden on D seems to be most important, but certainly not dispositive of
the issue
5) State’s interest, and interstate interest (furthering substantial social policy)

General Jurisdiction
“Continuous and systematic” contacts required where cause of action arises elsewhere regardless as to
whether the cause of action is in any way related to activity within that forum state

 To sue a D in a state where contacts are not related to the litigation, D’s contacts
must be substantial (continuous and systematic)
o Will still have purposeful availment
o Examples: home state, state of incorporation, principle place of business
 Still must assess reasonableness, even though unlikely PJ would be unreasonable
if there are substantial, continuous and systematic contacts
o Convenient for D- not burdensome to litigate in home state
o State’s interests- state has interest in lawsuit involving residents
o Benefits/privileges- get lots of benefits from your home state
 Rare to have general jurisdiction outside of individual’s home state

Perkins (138)
-A large number of contacts in Cleveland where HQ had relocated due to war, but none
was related to the cause of action. Therefore, the court could take or it could choose to
decline jurisdiction.

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- a state can have general in personam jurisdiction over a foreign corporation if it
conducts substantial (continuous & systematic) activities in the state, even if litigation
is unrelated to those activities
-only time general jurisdiction has worked (during WWII Philippine mining corporation
conducted business in Ohio)

Helicopteros
 Oil company tries using helicopters to transport workers from TX to
Peru…helicopter ends up crashing, families of workers killed sues in TX…
 Oil Company’s contacts with TX?
o Bought a lot of stuff from a company there (choppers, parts)
o Trained their pilots there
 No GJ
 When can we hold a corporation liable in a state where it is not a resident
o Not very often it would seem…you really need A LOT to establish this
 What does Helicopteros tell us?
o 1) We need a hell of a lot for GJ
o 2) “Mere Purchases” are not enough
o 3) CoA is extremely important, b/c if it doesn’t relate to the contacts, then
you need GJ, which as we said is pretty tough to get

Goodyear (2011)
Goodyear is the leading case on general jurisdiction.

General Jurisdiction – You can be sued in the forum on a claim that arose anywhere in
the universe.

Before Goodyear, general jurisdiction was only covered in two prior cases Helicopteros
and Perkins, where they said there would be general jurisdiction if the D has
continuous and systematic ties with the forum.

 NC kids playing soccer in France have their bus crash…bus was using European
Goodyear tires. Family of kids injured sues in NC.
 D’s have very little contacts in NC that we count, so PA is a really tough sell
o No PA to NC

Goodyear, changed this slightly. D still needs to have continuous and systematic ties
with the forum for general jurisdiction, but the D’s ties with the forum mean that the D
is essentially at home in the forum. So the ties have to be so continuous and systematic
that you are essentially at home.

For human beings, it is where ever you are domiciled.

For businesses/ corporations:

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-the state where you are incorporated or have your principal place of business you can be
subject to in personam jurisdiction.

The tough thing is, is there jurisdicition in any other place? Can they be subject to
jurisdiction in all 50 states?

The court says general jurisdiction can’t be based on buying and selling in the state.
Apparently you need some physical presence.

 ***GJ contacts that will count is Principle Place of Business and Incorporation
o ***So as to make them “at home” in that state
 Sales through intermediaries that are sporadic do not constitute give us this

Big Picture: Let’s take Helicopteros and Goodyear together

 ***Neither Sales NOR Purchases are enough, even though sales would seem way
more appropriate for PA (Sales you’re reaching out to someone, purchases they
are reaching out to you)

Daimler AG v. Bauman ET AL, 2013

-Facts: MBUSA is an indirect subsidiary of Daimler, a Delaware corporation, and
principle place of business NJ. P claim Mercedes-Benz Argentina, an Argentinian
subsidiary of Daimler, collaborated with state security forces during war to kill
Argentinian MB workers.
-Question: Whether Daimler’s affiliations with CA are so continuous and systematic to
render it home in the forum amenable to suit in CA for claims involving foreign plaintiffs
and conduct occurring completely abroad?
-What are the contacts? MBUSA is Daimler’s exclusive importer and distributor to the
US, MBUSA has regional offices in CA, MBUSA is the largest supplier of luxury
vehicles to CA market, MBUSA CA sales account for 2.4% of Daimler’s worldwide
sales
-Takeaway: contacts are not enough, 2.4% not enough, and there is nothing else,
international human rights issue, and general jurisdiction in CA would lead to expanding
general jurisdiction in other states (slippery slope). Expansion on the idea of “home:”
comparable to a domestic enterprise in that state – but, Daimler is not home CA, so what
does home mean?

- Test for J
- Is there a traditional basis for J?
o Pennoyer if yes; no International Shoe
- Apply International Shoe- 3 steps
o MUST be Relevant contact between ∆ and forum
 2 factors:

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  Purposeful availment (reached out to the forum in some way;
no accident, no unilateral third party act)
 Foreseeability
o Not that the product would get there but that ∆ could
get sued there.
o Is this general or specific jurisdiction
 Relatedness
 Does π’s claim arise from ∆’s contact with the forum?
 Yes. = Spec.
 No. = Gen.
o Is jurisdiction fair here?
 Burden is on ∆ to show that this is so gravely inconvenient that ∆ will
be at a disadvantage (Burger King):
 5 Fairness Factors:
1. Inconvenience for the D and his witnesses (ex: Burger King) it’s hard to do
but you have to show that the D would be highly burdened.
2. The Forum’s states interest (Ex: McGee – here they said the state had an
interest in making sure their people did not get ripped off.
3. P’s interest – Usually wants to litigate at home.
4. The Legal system’s interest in efficiency
5. Shared substantive policies (ex: Kulco)

Jurisdiction Based on Property

In Personam Jurisdiction- Power over a person and everything they own/represent
(broadest kind of jurisdiction)
In Rem Jurisdiction- Power over property
 Classic example is deciding who owns propertyestablishing a titleTraditional
In Rem (This land is mine versus the rest of the world
Quasi In Rem Jurisdiction- this land is mine versus someone else specifically who’s
trying to claim it
Two Types of Property Based Jurisdiction:
 1) Dispute in terms of who owns what
 2) Using property as a base for jurisdiction, even though property itself has
nothing to do with CoA
o Difficulty is, if you do this, only amount you can recover is amount
property is worth
 Pennoyer: Consent, citizenship and presence
o So jurisdiction based on property is ONLY based on presence

Harris v. Balk
 What does this tell us?
o That debt=property, we are asserting jurisdiction over Balks debt which is
same as his property, so once Balk walks into MD we have jurisdiction in
MD because his property is in MD

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Shaffer v. Heitner
 One shareholder is suing the people who run the company for botching.
 Changes the way we think about jurisdiction based on property, but maybe not so
much in terms of outcomes.
 Presence of property can suggest existence of a contact

Consent- Personal Jurisdiction

- Insurance of Ireland v. CBG (186)
o If you subject yourself to the limited jurisdiction of the court to decide
whether jurisdiction or not; you are bound by their decision; can’t then
back out
 If they submit to limited jurisdiction for deciding jurisdiction; can’t
block discovery of facts
 Such an action leads the courts to presume that jurisdiction
is proper
- M/S Bremen (188)
o Upholds forum selection clauses in contracts, especially foreign contracts
 Even if jurisdiction is otherwise appropriate, can’t exercise if
forum selection clause
 Ignoring such clauses would discourage the expansion of
businesses and the interactions of foreign and American
businesses
- Carnival Cruise (189)
o Forum selection clauses OK, but subject to scrutiny for fairness
(unreasonableness, problem with contract)
 Cruise line has an interest in litigating in a chosen forum; litigation
costs
 Cruise line’s benefits transferred to customers through lower ticket
costs

- Rule 4
o Rule 4(k)(1)
 (a) Subject to district court if person is subject to state courts in the
state the court resides in- including those reachable through the
states long arm statute
 (b) Rule 14 and 19 Joined parties, served w/in 100 miles of district
 (c) service when authorized by federal statute
o 4(k)(2)
 arising under federal law; if not subject to any state courts of
general jurisdiction

Subject Matter Jurisdiction

Main question here: What court do we go to in that state?

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It is over cases and claims, can the court here this kind of claims. Fed courts can hear
only certain kinds of cases.

Two major types of cases that go to Fed Court are:

Diversity of Citizenship and Federal question cases.

State courts can hear any kind of case.

Diversity of citizenship §1332 (a)(1) statute:

Two requirements:
1) Cases between citizens of different states
2) AIC exceeds 75K
Have to meet both of these to meet §1332

1) Citizens of different states:

A. Complete diversity rule – there is no diversity if any P is a citizen of the same
state as any D. Both sides of the V have to be different.
B. The citizenship of the human being (what is his or her citizenship) For a U.S.
citizen you are a citizen of the state where you are domiciled. Everyone only has
one domicile. You can only be a citizen of one state at a time as a human being.
To establish a new domicile you mist first present in the new state and
secondly you must form the intent to make that your permanent home.

C. 1332(c)(2) tells us that businesses are domiciled where the business is

incorporated. Also where the company has its principle place of business (ppb). A
corp. can have more than one citizenship.

Hertz
determined the PPB is where the Corp. has its Nerve Center – this is where managers
direct, control and coordinate corporate activities. That is our PPB. It usually is
headquarters.

D. Unincorporated Business is the citizenships of all the members.

- Strawbridge v. Curtiss (272)

o Interprets the statute (now 1332) to require complete diversity, even
though Article III would allow fed courts to hear cases on minimal
diversity
- Bank of U.S. v. Deveaux (272)
o Diversity jurisdiction is to avoid discrimination by state courts against out
of state defendants
- Mas v. Perry (278)

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 o True, fixed, and permanent home determines what state one is a citizen of
when it comes to diversity citizenship; intention of returning to whenever
absent
o Amount in controversy depends on pleading, NOT eventual award (see
notes)

2) AIC:

3 rules:
1) The amount must exceed 75K – exactly 75K, it is no good.
2) Aggregation – is where we must add multiple claims to get over 75K. Rule: we
aggregate the P’s claims if there is one P vs. one D. There is no limit on the
number of claims. The claims do not have to be related in any way. You can
aggregate all the claims you want this way. You cannot aggregate if you multiple
parties on either sides. Ex: One P vs. two Ds, you can’t aggregate those claims.
3) Joint claim – you use the total value of the claim. Here the number of parties is
irrelevant.

- A.F.A. Tours v. Whitchurch (285)

o Amount in controversy decided at pleading stage; so long as amount is
pleaded in good faith and not solely for the purpose of diversity
jurisdiction, than it counts
o D has burden of showing AIC not met
- Amount must exceed $ 75k
- Aggregation
o Where we must add multiple claims to get over $75k
o The rule:
 We aggregate π’s claims if it’s one π against one ∆
 No aggregation if multiple parties on either side

Federal Question Jurisdiction §1331

Here we need a claim that arises under federal law. It is not enough for the case just to
raise a federal issue. The claim itself must arise under federal law. How do we know it
does: We apply the well-pleaded complaint rule – we look only at the complaint, we do
not look at anything the defendant says. In the complaint we ignore everything the P says
except the claim itself. This is what you ask: Is the P enforcing a Federal right? If yes –
then federal question if no, then no SJ

Osborn
 Dispute about Ohio state tax, Bank of US says it’s unconstitutional
o So if there is a question of constitutionality, should be a slam-dunk for
Federal Jurisdiction… BUT Osborn tells us no because this is a question
of power of Ohio to tax the Bank of the US

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  It is the potential for a Federal issue to be raised that allows us to infer federal
jurisdiction under existing statute at this point in time
o Ingredient Test- Fact that a Fed. Issue is a relevant ingredient, it can be
said to “arise under” Fed. Law
Mottley (Well-pleaded complaint)
 Moving away from issue of potential, moving towards issue of an actual statute
o Why no “arising under”? There is a federal statute involved right?
 Court says the Federal issue isn’t part of the well pleaded
complaint- Fed issue needs to be raised in initial complaint
 So here we have a much narrower interpretation of Osborn
 Why? Court realized how stupid that was, and a narrower
reading is easier than an actual amendment
 *Remember, for Federal Question Jurisdiction we always need the
Constitution AND Statute to approve.
 New Test for Federal Question Jurisdiction: ***Now we are
asking that in order for a plaintiff to establish their claim, do
they NEED federal law?
 Here answer is NO, this is a contract dispute, doesn’t imply
a need for Federal Law.
 Anticipated defense doesn't count
 So what does this case tell us?
o 1) We care about the placement of the federal issue (complaint not
defense)
o 2) We want federal law to be necessary to the claim
Declaratory Judgment-
 Exception where judges can say that what you’re doing is either right or wrong,
setting it down that conduct is or isn’t legally permissible
 RR in Mottley could use this to declare for good that they can terminate the free
passes issuedbecause statute and constitution says that’s OK
T.B. Harms
 Claim is under state law, basically a contract dispute again
 Question here is: Does resolving the dispute necessitate an interpretation of
Federal Law?
o NO!!! No need to analyze/apply/interpret Federal copyright law
 Easy case for jurisdiction under 1331We could, but congress
doesn’t exercise…
o But we still need to address something else…
 Judge Friendy=prestigious appellate judge
 He says “different ways of looking at arising under”
 Creation Test- A suit arises under the law that creates that
CoAIf Federal Law creates the CoA, almost always
“arising under”Application of Federal Law is a
question…state law creates the CoA, but there is a need for
application of Federal Law, can be considered arising under
***Exception to above: Shoshone

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  Even if CoA under Federal Law, if that Federal Law says to use State Law, use
State Law

So what do we do when CoA is in fact under state law?

Smith (304)
 Securities=invalid because law that created them under state law was
UNCONSTITUTIONAL! constitutionality of a federal statute
o So in order to resolve claim, need Federal proposition and whatever
Moore (305)
 Federal issue comes up as anticipation of defense, so no good
 No substantiality

The courts attempt to distinguish Smith and Moore

o The difference here is that Smith dealt with the constitutionality of an important federal
statute
o While Moore emphasized the violation of a fed standard as an element of state tort
recovery (this fed issue did not change the case from a basic state tort claim)
o The nature of the federal issue is important
 Court has sometimes found no jurisdiction when state-law issues predominate,
even if there is a federal question in the claim
o The majority sees the purpose of 1331 to provide a fed forum for the vindication of
federal created remedies
o While the dissent thinks 1331 is meant to provide uniformity of federal law
 Federal question jurisdiction whenever there is interpretation of fed law

Merrell Dow (305)

 Congress hadn’t created a CoA (creation test), BUT, also approved of Smith
(CoA not created by Federal law)so, now we have approval of “creation test”,
BUT also a case without that…
 So the courts have some discretion under 1331!
 The court held that the reference to the FDCA in the state negligence claim was
insufficiently substantial to confer federal question jurisdiction.
***SO, Smith, Moore and Merrell Dow tell us about substantiality
Grable (Trying to resolve Smith and Moore)
 IRS seizes Grable’s property for tax delinquency
 *Quiet title action=classic In Rem case
o Jurisdiction under Mottley? Yes
o Jurisdiction under Smith? Less clear
 Grable wants to say that Merrell Dow based jurisdiction on congress creating
CoA, and there was none here, so shouldn’t be Federal Jurisdiction here.
 Grable Framework – A federal court ought to be able to hear claims recognized
under state law that nonetheless turn on substantial questions of federal law:
o A state law claim necessarily raises a stated federal issue

15
 o Actually disputed; and
o Substantial - Is it constitutional, about interpretation of fed law,
application of fed law (Smith – substantial Mottley is substantial, Moore-
not substantial); and
o A federal forum may hear it without disturbing the congressionally
approved balance of federal and state jurisdiction.
Grable & Sons Metal Products, Inc. v. Darue (U.S. 2005). It is rare that
where a claim arises under state law that a major issue of federal law must
be considered to decide the outcome.
Empire
 Facts: Fed insurance carrier wants to recover for fed employee’s death—in
fact fed contract requires them to do it.
 Holding: Congress conferred jurisdiction-involving benefits against US but
not insurance carrier. Congress could have said something and didn’t. Does
not fit under Grable. Grable was pure issue of law to be settled once and for
all and would have impact in future. This is fact based. Also, no real issue of
fed law. Taking these cases would not fit under proper balance of fed and
state law.
 Test
o Necessary?
 Contract is at issue-so federal common law
o Dispute?
 Contract is in dispute
o Substantial?
 Looking forward: No—it’s fact based.
 Backward-No, would just affect this one party.
o Fed state balance
 Congress did not speak on issue, so they interpret the silence
 Empire Healthchoice suggests that disputed questions of federal law are more important
than disputed questions of fact that involve federal law.

Gunn v. Minton
 P sues his lawyer for mal practice, which is a state claim, but raises a federal
issue supposedly about patent law
o So where does federal law fit in?
 Argument that had a federal issue been raised the suit would
have turned out differently
 So prong 1 and 2 are satisfied (Fed issue in complaint, actually in dispute)
o Is it substantial?
 **NO, because it wouldn’t change patent law in terms of it’s
validity, it wouldn’t affect future cases and it’s not a frequently
raised issue (it’s totally hypothetical, “if”)
o Is this hindering Federalism?

16
  Yes, states traditionally regulate this (malpractice) kind of
claim
 Just because Fed. Judiciary is more familiar with patent law at
hand isn’t sufficient to make them handle case
 If congress wanted it to be handled by Feds, would have said so
 So what does this tell us?
o A prospective impact (or lack of) on federal law is important
o “Substantial”=important to the federal system as a whole, not just
relevant
Mottley: (RR free passes case)
 1) Federal issue raised in complaint? Is federal law a necessary element?
o No!
o This is essential, if this first prong is not met, the rest wont matter, but
for argument’s sake and for test’s sake, explore all
o Ironically this case would probably meet the other three prongs
Smith:
 1) Federal issue necessary?
o Yes. Under MO law, this is a federal issue (ultra vires)
 2) Actually in dispute?
o Yes.
 3) Substantial?
o Yes.
 a) Its a matter of law not fact
 b) *Constitutionality of a federal statute
 4) Federalism concerns?
o Not really, there aren’t too many states out there with these kinds of
laws, so probably wouldn’t be usurping their power
Moore:
 1) Federal issue raised?
o No, it’s only raised as a potential defense which isn’t good enough
 BUT, the court actually looks past this so move on…
 2) Actually in dispute?
o Yes
 3) Is it substantial?
o Not really, it really wont change much about federal law
 4) Federalism concerns?
o It actually would be encroaching upon states
The Court is Sensitive about taking power away from states

Supplemental Jurisdiction
A. Supplemental Jurisdiction

17
1. Section 1367(a) – does the broad grant of supplemental jurisdiction
apply?
a. Freestanding Claim – is there a claim over which the court has
original jurisdiction?
b. Common Nucleus of Operative Fact – If the same facts give rise
to a state or a federal claim then they comprise a case and it is up
to the court’s discretion whether to hear the case and the various
state and federal issues simultaneously. United Mine Workers of
America v. Gibbs (U.S. 1966). Gibbs is always met when the claim
comes out of the same transaction or occurrence. This defines §
1367(a).
2. Section 1367(b) – Does § 1367(b) nonetheless bar jurisdiction?
a. Diversity Claim? – Is jurisdiction based solely on diversity? If
not, § 1367(b) does not apply.
b. Supplemental Claim by Plaintiff? Does the supplemental claim
consist of a claim by the Plaintiff or by Plaintiffs joined under Rule
19 or Rule 24?
i. No. If claim is made by P, then it will not prevent
supplemental jurisdiction, so long as complete diversity is
not destroyed. Owen Equipment & Erection Co. v. Kroger;
See also Exxon Mobil Corp. v. Allapatah Services, Inc.
(For the purposes of § 1367, for you to have a civil action
for the court to assert jurisdiction, you must have at least
one claim to meet AIC, but you must always have complete
diversity of citizenship)
ii. Claim by Rule 19 or Rule 24 Plaintiff – If the claim is by
a P under Rules 19 or 24, then it qualifies for jurisdiction as
long as diversity is not destroyed.
iii. Claim by Plaintiff – claim by original P, then proceed to
next Q.
c. Against certain joined parties? Is the claim against persons made
parties under Rule 14, 19, 20, or 24?
i. No. § 1367 will not prevent supp jur.
ii. Yes. Supp Jur. is not allowed over the claim.
3. Discretionary Basis?
a. the claim raises a novel or complex issue of State law,
b. the claim substantially predominates over the claim or claims over
which the district court has original jurisdiction,
c. the district court has dismissed all claims over which it has original
jurisdiction, or

18
 d. in exceptional circumstances, there are other compelling reasons
for declining jurisdiction. GRABLE.

Exxon Mobile Corp. v. Allapattah Services, Inc.

 
When other elements of jurisdiction are present, if at least one P satisfies
amount in controversy requirement, federal court can exercise
supplemental jurisdiction over the claims of other P’s that don’t meet the
requirement as long as the claim are part of the same controversy.
 §1367 makes it clear that supplemental jurisdiction extends to claims of
joinder or additional parties
 Rule 20 for plaintiffs was left out of the exceptions in §1367 (b)
 Supplemental Jurisdiction in Short: The Test
o Must share common nucleus of operative fact (same T/O)
 Limitations:
 In diversity case, P cannot use supplemental jurisdiction to overcome lack
of diversity
 But P can use it to overcome lack of diversity in FQ case
 P can also use it to overcome lack of amount in controversy for a claim in a

diversity case
 And any party but P can use it to overcome either a lack of complete diversity
or 
amount in controversy in any case (diversity/FQJ)
 So a non-FQ, non-diversity claim can be heard in fed court if it meets the
same t/o test
 UNLESS it is Asserted by P in a diversity case and would violate complete
diversity

B. Removal § 1441
1. Would the federal DC have original jurisdiction over P’s claims if they
were filed in federal court?
i. Limitation – in Diversity cases, removal is proper only if
no defendant is a citizen of the state in which the action
was brought.
b. If Yes, then removal is proper by Defendant (Plaintiff cannot
remove even when a counterclaim is made. Shamrock) for
diversity purposes unless the remover is a citizen of the state
removing to. Removal proper under Federal Question so long as
there is defendant unanimity and within 30 day window.
c. Removal of multiple claims, one of which could not be removed if
sued upon alone – 1441(c). BUT not for diversity, so a Plaintiff’s

19
 Tactic to stay out of Federal Court is to join a non-diverse party to
the case.
d. Judges may also remand a state claim back to state court while
keeping the Federal Claim.
e. Amending Complaint – cannot amend complaint to destroy AIC
amount as a tactic to get removal.

Shamrock Oil & Gas Corp. v. Sheets (pg. 351)

- Issue: whether a plaintiff could remove a state court action to a federal court
because defendant had interposed a counterclaim
- Holding: plaintiff cannot remove to federal court because defendant files
counterclaim
- Arising under jurisdiction has to be based on the complaint (not a counterclaim)
- Just because a counterclaim raises a federal question, doesn’t mean there is
federal jurisdiction
- Limitations:
o In an action that’s based on diversity, defendant does not have a right to
remove that action if the defendant is a citizen of that state in which the
suit is filed (D doesn’t have to worry about bias)
o Amending complaint to reduce AIC after removal will NOT defeat
removal jurisdiction (D’s not going to say- “I injured you way more than
that”)
o Only going to disregard federal jurisdiction if we know to a legal certainty
plaintiff is trying to create it
o Just because something is less than AIC won’t necessarily defeat removal
if it’s clear that it’s worth more than that
- Contract case is different: Can waive your right to seek higher damages, AIC is
predetermined
- All defendants have to consent to removal/we will not let right to remove trump
plaintiff’s right to bring one action

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JOINDER
Harris v. Avery (652) common law case, not as per rules- different actions arising from
the same transaction
 Avery had two claims against Harris (false imprisonment and slander). They arose
from an incident where Harris accused Avery of being a thief of a horse in public,
took the horse, and imprisoned Avery.
 These claims though for different injury, arose out of the same “transaction” and
thus were properly joined
o moved from splitting law and equity remedies to arising under the same
transition
o this would not be accepted under the common law because they fell under
too different writs (trespass - property and personal injury)

 Point: This is what used to be the lawP brings 2 claims allegedly arising out
of the same transaction (allegation of theft, confinement)
o Common Law=code leading

Rule 18: Joinder of Claims: under the device of joinder of claims, once a party has
made a claim against some other party, he may then make any other claim he wishes
against that party

M.K. v. Tenet (pg. 655)- Rule 18 removes all restrictions to joinder of claims in federal
court (outside of subject-matter jurisdiction requirements), and RULE 20
 6 P sued the CIA, director, and others for violation of the privacy act. In an
amended complaint the Ps added 9 other Ps to the action. Ds moved to sever the
initial complaint of the 6 Ps into six different complaints.
 Joinder was satisfied since the rule 18 gave unrestrictive joining ability
 Rule 18 removes all obstacles to joinder except those imposed by subject matter
jurisdiction.
 Joinder is permissive so you don’t have to join if you don’t want to
o Res judicata states prohibits the splitting of a cause of action into 2+ suits,
and thus sometimes compels joinder
 Ds are worried some Ps might have stronger claims and will make court believe
weak stories more
 Joinder would promote trial convenience, expedite final resolution of disputes and
act to prevent multiple lawsuits
 Rule 15: allows parties to amend pleadings, but with limits (if you learn
something new that indicates you have an additional claim, if you learn about a
new party)
 Rule 20: allows to join parties (not claims)

Rule 13(a): Compulsory Counterclaim

 Arises out of the same transaction or occurrence that is the subject matter of
the opposing parties claim

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  Does not require adding another party over which the court can not acquire
jurisdiction
o If CC meets diversity you’re good you have SMJ over it
o If CC doesn't meet diversity (under AinC), it doesn't meet Fed Q, it
must meet 1367! It usually will because its CNOF and it's a claim by
the DEFENDANT, so it will meet (a) and (b) don't worry.
Rule 13 (b): Permissive Counterclaim
 Defendant can assert counterclaim at his discretion for any claim that is not
compulsory
 Does not arise from the same Transaction or occurrence
 Allowed in federal court only if it meets SMJwill NEVER meet supplemental
Same Transaction Test:
 Same issue of fact or law
 Res Judicata (would a separate suit absent the counterclaim be barred?)
 Same evidence to refute P’s claim and support D’s counterclaim?
 Logical relationship
Rule 13 (g): Cross-claims
 Claims brought by one co-party against another co-party (same side of “v.”)
 Proper if they arise out of the same transaction or occurrence that is the
subject matter of the suit
 NEVER COMPULSORY
 Always meets supplemental jurisdiction
Permissive v. Compulsory Counterclaims:
 Compulsory Counterclaim- a party must state any claim at the time of service
that the pleader has against opposing party IF that claim arises out of the
transaction that is the subject of the opposing parties claim, ASSUMING this
doesn’t require adding another party
 Permissive Counterclaim- if it meets SMJ, up to D if they want to bring their
claim now or in a separate suit

United States v. Heyward—Robinson Co. (658) ***broad reading of logical

relationship
 D’A and H were contractors on two jobs in Ct. The Navy Job was federal and the
Stelma Job was state. D’A sued H and Maryland under the Miller Act for
payment for the Navy job. H denied this filed a counter claim for over payment on
both jobs. D’A denied and counterclaimed for money from the Stelma Job.
o The contracts were treated together at trial, had joint payment, insurance,
and facts were connected. Jurisdiction over Stelma claim was disputed
 Both the original claim and the Stelma counterclaim arose out of the same
transaction or occurrence and thus joinder was proper (no independent jurisdiction
basis needed)
 The Stelma counterclaim was compulsory so it came under sup. Jurisdiction
though it was a state claim.

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Cross-Claims-Rule 13(g): cross claims against a co-party on the same sidea D may
also assert any independent claims that she has against a co-defendant when such claims
have arisen out of the same transaction or occurrence as that which gave rise to the
P’s original cause of action or to a counterclaim against the original plaintiff
 The cross-claim must be against a “co-party”
o Which depends on the P original structure of the case using Rule 20(a)
 The claim must arise from the same “transaction or occurrence” as the original
claim or a counterclaim in the claim
 This rule is a permissive one, thus is not mandatory (this is because we don't force
him to be in a random forum)
 This can include an assertion that the co-party is liable for all or part of the claim
against the party filing the cross-claim

LASA v. Alexander (668)

 Facts: Several claims arose out of contracts to construct the Memphis City Hall,
including cross-claims between the contractor, Southern Builders (D) and one of
the subcontractors, Alexander (D) Primary case is about the contract between
Lasa and Alexander-- Alexander’s counterclaim against Lasa for breach and
restitution are both compulsory – Rule 13(a)
 Alexander’s cross-claims against SB for nonpayment and firing – Rule 13(g) OR
Rule 18
Satisfies requirements for cross claims because it is against a co party and has arisen
from the original cause of action (but for the original contract, the subcontract
wouldn’t have been breached
o Policy considerations behind rule 13 was that the rights of all parties be
adjudicated in one trial; even if based on two contracts
 Intended to dispose of entire subject matter arising from one set of
facts in one action
 Broad reading of “transaction or occurrence”
o If too complicated; judges discretion under rule 42(b) to separate
certain claims into separate trials if conducive for judicial economy
- What do we take from this case?
o A) Every time a claim is asserted against me, I have compulsory
counterclaim obligations and permissive counterclaim opportunities
 Party having suit brought against it has a counterclaim obligation
if LR (as is the rule)
o B) Rule 18 says all claims can be joined, related or not

Danner v. Anskis (679)

o 13(g) can be filed by defendant against co-defendant, or plaintiff
against co-plaintiff only if the plaintiffs are subject to a counterclaim
by defendant
 Can’t file cross claim against co-plaintiff if not being sued for
something
- Liebhauser **the subject matter of action important, and the language of the
statute is important

23
- Earle MSimilar to LASA, just b/c you bring in party under Rule 14 doesn’t
mean they’re not a co-party…we can still treat them as a co-party depending on
circumstance (In LASA Alex brought in totally new party when they brought in
Aydellote but can still treat him as a co-party)

Joinder of Parties
Rule 20: Permissive Joinder of Parties
 Plaintiff’s: Multiple plaintiff’s may join together voluntarily in an action if:
o Single transaction or occurrence
o Common question(s) of law or fact

- Ryder v. Jefferson Hotel (679)

o For two torts claims to be joined, the two plaintiffs must have a legal
relationship such that each tort has an effect on both, interfering with
there legal relationship
 Two separate torts to a husband and wife must be brought
separately
- Rule 20
o Permissive Joinder of parties
 Plaintiffs (defendants)
 Assert a right to relief jointly (asserted jointly against
both)
 Question of law or fact common to all parties will arise
- Rule 21
o Misjoinder or Nonjoinder of parties
 Not grounds for dismissal, but grounds for separate trial
- Rule 42(a)
o Consolidation
 If involves a common question of law or fact; judges may (at
discretion) join or consolidate the actions

M.K. v. Tenet (682)
- 6 P sued the CIA, director, and others for violation of the privacy act. In an amended
complaint the Ps added 9 other Ps to the action. Ds moved to sever the initial
complaint of the 6 Ps into six different complaints.
- Holding- They can join under rule 20(a)(1)(A) and (B)
-
o First prong of Rule 20
 (a)(1)(A); Transactional test; is it same transaction
o Second Prong
 (a)(1)(B); Common question test
o Policy underlying Rule 20
 Promote trial convenience, expedite final determination and
prevent multiple lawsuits

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George v. Smith (690)
This was prisoner protesting all these breeches in his rights
Can’t join because claims are unrelated

Tanbro Fabrics
For something to be considered the same transaction or occurrence; doesn’t require
the obligations and rights relative to the parties don’t have to be identical; so long as
arising from same issue

Mandatory Joinder (Rule 19)

- Bank of California
o Indispensible parties; appearance is essential for jurisdiction of the
court to proceed
 Joint or similar partial interest of parties in property
 Apportioning part interest in property of one property
necessarily affects all others with partial interests
 Those whose interest may be affected, but are nonetheless
separable may be “necessary” for complete settlement but are
not indispensible
 If decision would bind the other parties, they are
indispensible; if not binding on them; not indispensible
- Rule 19
- Provident Tradesman
o Equity and Good Conscience test; Rule 19(b)
 Extent that judgment might prejudice the non-joined party
 Extent that prejudice could be lessened by
 Protective provisions or shaping the relief
 Whether judgment can be adequate in their absence
 Would there be an adequate remedy if dismissed for
nonjoinder
 FOUR INTERESTS
 Plaintiffs interest in having a forum
o Preservation of initial judgment
 Defendants interest in avoiding multiple suits,
inconsistent relief or sole responsibility for shared
liability
 Interest of the outsider whom it was desirable to join
 Interest of the courts and the public in complete,
consistent and efficient settlement of controversies

Impleader (Rule 14)

- Rule 14
- Jeub v. B/G Foods

25
 o Can implead a third party prior to a final judgment; Rule 14 in not
restricted to the rights of indemnity of contribution which are
presently enforceable
 May implead a party who is or may be liable

Intervention (Rule 24)

- Rule 24
o (a) Court must permit intervention if
 Statute grants unconditional intervention right
 Claims an interest relating to the property or transaction in
question
 Disposition of the matter as it stands would impair or
impede ability to protect its interests;
o Present parties don’t adequately represent their
interests
o (b) Court may permit if
 Conditional right by statute
 Claim or defense that shares with main action a common
question of law or fact
 Government officer or agency, if;
 Statute or exeutive order
 Court must consider if the intervention will delay or unduly
prejudice existing parties
- Smuck v. Hobson (734)
o Policy behind interest test; accommodation of two possibly conflicting
goals
 To achieve judicial economies of scale and
 To prevent a single lawsuit from becoming fruitlessly complex
 Parties interest in the case is less important than if the
case would impede his protection of his interests, or
that his interest is not adequately represented

Intervention
 Why do we have rules of intervention?
o 1) Justice and Fairness we want to make sure everyone who
deserves a voice has one
o 2) Efficiency It keeps things uniform, so we can include all relevant
parties in one suit instead of having multiple suits
o *Side Note: This is one way of disrupting the existing parties’ ability to
structure the litigation in their favor
 Ex: A v. B and C is not involved
 We are worried that A and B have some hidden agenda that
has caused them not to involve Cwhat if they are excluding C

26
 because C would change he outcome of the whole case and
negatively affect both of them?
 Why might we not want intervention?
o 1) InefficiencyCould actually disrupt things
o 2) Potential for prejudicechanging the outcome of a case in a bad
way
 Rule 24(a): Intervention of Right, The court must permit anyone to
intervene who:
o (1): is given an unconditional right to intervene by way of Federal
Statute; OR
o (2): claims an interest relating to the property or transaction that is
the subject of the action, and is so situated that disposing of the action
may as a practical matter impair or impede the movant’s ability to
protect its interest, unless existing parties adequately represent that
interest
 ***(2) LOOKS A LOT LIKE 19(B), so usually if you meet 19(B)
then you meet 24(a)(2) (Reinert says)
 BUT, 24(a)(2) is even broader, there are even more occasions
where people will be allowed to intervene/come in to the suit

Pleading
 Functions of Pleading Rules
o Notice of nature of claim/defense
o Identifying baseless claims
o Setting each party’s view of the facts
o Narrowing the issue
 Determines whether or not we get to pleading
 Complaint
 Rule 8
o General rules of pleading
o 8(a)
1. Grounds for jurisdiction (1331, 1332)
2. Claim for which there is relief
3. Demand for relief
o 8b(b) = defenses, admissions and denials
o 8(c) = affirmative defenses – must be stated in the response to a
pleading, can not be brought up anew at trial
 Rule 12(b)
o How to present defenses
 File w/o an answer or prior to answer
 12(b)(6)- failure to state a claim
 Code Pleading- P had to state factual elements for every
CoA

27
  Rule 9: Works together with 8…8 is the basic stuff, 9 is the more specific
o Specificity: Must support a “plausible inference” A claim has
facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged (TWIQBAL)
o Heightened pleading standard for certain kinds of complaint, such as
fraud or mistake
Dioguardi v. Durning (Italian guy with tonics case)
Shows how strong Rule 8 influence, you don’t need much, not about merit.
Short and simple pleading is all you need. Goal is trying to remove formalism. Here P
wrote his own complaint (pleading). Court held it was valid, even though it didn’t
make sense. Judge Clark worked to interpret it in a way that made sense, he wanted to
make a point.
Conley v. Gibson
 Tells us it’s about Fair NOTICE (historically used)
 Form 11 page 155 in supplement
o You don’t want to limit yourself, so don’t commit too just one theory
o Don’t accept 12(b)(6) unless beyond doubt P has no set of facts to back
up. Don’t need heightened pleading standard.
Swierkowitz (Wrongful termination of job case)
 Court says all he needed to say was: he was terminatedThere was
discriminationOther people weren’t
 (Eventually will be difficult to reconcile this with other cases)
Leatherman
 1) Conley=NOTICE, 2) Don’t force P to choose specific theory, 3) If there is a
policy reason to require higher standards of pleading, that’s work for
congressPleading rules are Transubstantive; aka there are some for nearly
all areas of law
 Complaint=sufficient even if no specific facts or evidence, as long as elements
of complaint can be inferred
 ***When we read a complaint, we take everything (facts) to be true…All
inferences are to be drawn in favor of the plaintiff
o Still true now, but now it’s harder to decide what it means to allege
facts/inferences

Twombly (p.569)
 4 claims by PParallel conduct, Opportunity, News, Agreement
o All are facts we can take as true EXCCEPT Agreement
 It’s not about whether or not we believe it can happen; we are
just asking is an allegation structured as a fact or a conclusion?
 Alternate Explanations can be detrimental
 So this is about saying that conclusory statements cannot be taken as true so
we cant draw inferences from them
 So now we see difficulty in reconciling Swierkowitz because turns out we do
need more!

28
  The point is, saying that the companies had an actual agreement is an
element of the civil action, so we cant take that as true
o So, Step 1- Which allegations are factual and which are conlcusiory
o Step 2- Taking facts as true, can we infer a plausible claim
 Ex: FORM 11, 155, Negligence=Conclusiory????
Two principles from Twombly:
1) All allegations accepted as true in the complaint are inapplicable to legal
conclusions
2) Only a complaint that states plausible claim for relief survives a MTD

Ashcroft v. Iqbal (p.579)

 Tells us what needs to be in a complaint
 Problem: Does not cross line from conceivable to plausible
o Why? Complaint alleges that while in detention they were treated
differently because of race, religion, etc.
o P + D agree that policy was for “high interest”, but P claims high
interest only BECAUSE race religion etc.
 If that is true, then unconstitutional
o P are challenging that policy saying Ashcroft was architect and
Mueller knew or condoned, willfully or maliciously, b/c of race
religion
 So what does this tell us?
o 1) That higher standard of pleading does NOT apply just to antitrust
(Twombly) (Rule 8 across board)
o 2) Conclusiory and Plausibility are to be considered
o 3) Conclusiory statements w/o supporting facts (“bald conclusions)
are particularly useless for making inferences
o 4) Need to know about what the substantive law requires you to show
in your complaint
o 5) Alternate explanations can be inferred from judicial experience
 Determining if something is conclusiory is TOUGH, but what do we know is?
o Restating the elements of the CoA
 B/c even if you have factual evidence like an eyewitness, that
wont change
 UNFORTUNATELY, still not sure about what is plausible and what is not
o ***So all we can do is go through, take all non-conclusiory facts that
we can take as true, and see if we can draw plausible inferences from
them***
 It is the background assumption that informs the substantive law?????

 Graf 96-conclusory because restates claim

 Graf 69-not conclusory for discrimination, but conclusory for due process
 You are allowed to have contradictory claims in complaint post-Iqbal

29
Post Iqbal
 Still draw all inferences in favor of P
 Still go forward on good claims once bad ones are tossed
 Too much info can get you in trouble
 Could argue to court that just because your alt explanation is plausible does
not mean our explanation is less plausible


Responding to a complaint: ANSWER

 1) Those things didn't happen,
 2) Affirmative Defense (even if what you say is true, it’s nulled by this
fact)”affirmative” b/c D has burden, if not raised they loose it.
 3) D can Dispute the law, say it doesn't provide you with a remedy (12(b)(6)
 4) D can file a counter claim but only after an answer
 Just as P must be short in complaint, so must D with answer
 If it turns out that you had good faith in a general denial, you better have
good answers to everything because judge will rock you if you don’t

Motion to Dismiss
Rule 12 (b) Defendant has to put her defenses in the answer, but you can move to
dismiss for several reasons before answering

12(b)(6) motion to dismiss for failure to state a claim upon which relief can be
granted

12(c) same as 12(b)(6) but after answer is filed (very rare)

Note: Must file an answer to assert a counterclaim.

American Nurses Ass’n v IL (Posner)

 FACTS: P sue for wage disparity. They also claim comparable worth (less
money is paid for industries, like nursing, dominated by women.)
 HOLDING:
o Comparable worth is not necessarily intentional discrimination
because they are just paying market wages. Because you must have a
desire to benefit men at expense of women.
o The general discrimination claim is kept, but this is pre Iqbal (Post
Iqbal court may have found that comparable worth was alternative
explanation)
 Takeaway: Arguing too many facts post-Iqbal can give the court an
alternative explanation.
 A complaint should not be dismissed for failure to state a claim, unless it
appears beyond doubt that the plaintiff can prove no set of facts in support of
his claim which would entitle him to relief (Conley).

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Rule 8 (b)-Denial
 (1)-state defense to each claim and admit or deny the allegations
 Note: Do not want to deny everything, because you may not want the jury to hear
certain things. Also, if you deny something you know is true judge will rule you
admit everything.

Amendments
 Rule 15(a): Amendments as a matter of course: “Freely given”
o All parties have opportunity to amend once “of right” without having
to make a motion or have it granted by judge (don't need permission)
 Rule 15 (c): Relation back
o Can amend to add claim or party after SOL has run out
Aquaslide
 Amendmentsif you realize something went wrong early enough, you can
amend…Rule 15 (a)(2) By consent or court leave, “when justice so
requires”
 Here D’s initially thought slide that injured was theirs b/c insurance agent
they sent said it was, then realized (after SOL) it actually wasn't theirs, so
they make a motion to amend
o Generally, reasons for disallowing motion to amend:
 Undue delay (you’re just doing it strategically)
 Bad faith (related to above)
 Undue prejudice
 So here, undue prejudice is the issue…court says its okay though because
don't want to hold D liable for something they didn't even do, Rule 15 (c)
works.
 D argues that wont result in prejudice because not like any evidence is being
lost…no amendment violations (futility)
o So how do we reconcile with Iqbal?
 In Iqbal it wasn't even plausible (not a great argument)

Moore v Moore (Rule 15(b)—move to conform pleadings to the proof)

 FACTS and HOLDING: Family law proceeding
o Custody: Only one party filed but you knew it was going to be decided
o Child Support: Also allowed because action is about custody and child
support comes up in this context
o Separation Maintenance: Not an obvious part of this action, so cannot
amend here because it was not tried by implied consent
o Issue Moore raises: is that sometimes you want to be clear, you want
to make sure you covered the issue. This is why you would make this
motion – it creates an incentive to speak up and cover your bases.

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Kruski v Costa (15c)-
 FACTS: Plaintiff wants to amend the complaint to include the correct
defendant, SOL has run out
 RULE: 15(c) Can amend to include the correct D and have it relate back to
time of original filing it is
o 15(c)(1)(B): logically related
OR
o 15(c)(1)(C): related to adding new parties
o Rule 15(c)(1)(C)(ii)- the new D “knew or should have known that the action would
have been brought against them, but for mistake concerning the proper party’s
identity”
 HOLDING: D knew the actions would have been against them, but for a
mistake. Even if P made a conscious decision not to include D, that still does
not make it any less of a mistake on P’s part.

Summary Judgment (After Discovery and opportunity to ask

questions)
Rule 56- Allows for SJ when
 56(c)- “there is no genuine issue as to any material fact … and the movant is
entitled to judgment as a matter of law” (NO REASONABLE JURY CAN FIND
FOR NON-MOVING PARTY)
o A material fact is one that may affect the outcome of the case.
 How do we figure out if something is material?
 Substantive law (Reinert will tell us)
 Any fact needed to establish CoA
 56(d)(1)- the court can determine specific issues in the case on summary
judgment
 56(e)(2)- when a motion for SJ is made and supported with evidence the opposing
party “may not rely merely on allegations or denials in its own pleading” rather,
she must set fort facts, by affidavit or otherwise, showing a genuine dispute on the
material issue of fact.
o The opposing part only need respond if the 56(c) standard is met by the
moving party
Rule 56 Notes: On SJ the inferences to be drawn from the underlying facts contained in the moving party’s
materials must be viewed in the light most favorable to the party opposing the motion

Cross v. United States (Professor Abroad)

o Material issue of fact=Purpose of the trip
 How do we know it’s genuinely in dispute?
o B/c P says purpose is one thing, D says purpose is another
 What are his facts?
o Basically what he says about the trip
 What are D’s facts?

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 o They don’t really have any…
 What’s left for the jury to decide?
o The truth of P’s contention!
o Judge CANNOT WEIGH THE EVIDENCE, so
o ****The reason SJ is inappropriate here is b/c we need to decide if P is
telling the truth…what his motive/intent isall of these require a
jury!****
 So SJ particularly inappropriate when inferences to be drawn have questions
of motive, intent and subjective feelings or states of mind

Adickes v SH Kress
o ISSUE: Did officers conspire to make arrest in violation of civil rights?
o HOLDING: No SJ because D has to provide affirmative evidence that this
could not have happened. Must foreclose the possibility that the other side
could obtain relief. (This changes under Celotex.)

Celotex (1st in SJ trilogy) p. 957

 Did D expose P to asbestos?
o D’s argumentNo admissible evidence to support the claim
o P’s argumentHere’s some: 3 documents/affidavits
 D responds: those are not admissible, moved for SJ
 So what is the real question?
o Can D meet the burden for SJ w/o presenting evidence by showing a
lack of evidence on P’s part?
 Yes! This is one of two ways to win motion for SJ
o HOLDING: You can simply point to lack of evidence by plaintiff and get
summary judgment. You can simply point to the plaintiff’s evidence and say
we should have found something here but we didn’t. as long as it is the D or
the party who does not bear the burden of proof at trial, it is enough that the
moving party point to the absence of evidence on the other side
o Celotex type of motion- Opposing party lacks sufficient evidence
o Must incorporate burden of proof when thinking about jury reasonableness

Pros and Cons of Prove It Motions:

o Pro (Rehnquist): P should bear the burden of proving no evidence by for

example, taking a deposition because they do not need to prove at trial;
o Con (Brennan): D should bear the burden because D is moving party

Scott v Harris-deadly force case (in class video)

o FACTS: Cop did trap maneuver and caused Scott to go off the road and hit a
pole. Now paraplegic.
 HOLDING: taken in light most favorable to non-moving party, no reasonable jury could find
that Scott’s actions were unreasonable therefore no genuine dispute as to a material fact (video
makes it look like Harris was putting the public in danger (no reasonable jury could believe his
version)Scott’s actions not unreasonable)

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  NOTES: Even though not supposed to weigh evidence, court says video
blatantly contradicts non movant. Video is good evidence.

Anderson (2nd in SJ trilogy)

 P sues D for libel…D moves for SJ, says P cannot prove by “clear and
convincing evidence” that D acted with malice
o Court agrees
 So what does this case tell us?
o The judge must view the evidence for SJ purposes through the same
prism the trier of fact would in trial
 Same evidentiary burden that substantive law provides
o (Ex: preponderance of the evidence, beyond a reasonable doubt, legal
certainty, etc.)
o Main Point: Must grant a motion to dismiss when P is pursuing a legal
theory that wont allow you to get relief…
Matsushita (3rd in the SJ trilogy)
 1) Puts the final nail in Adickes’ coffin
 FACTS: Japanese companies accused of collusion.
 HOLDING: D’s SJ granted bc little/ P had no evidence supporting conspiracy.
And no rational exonomic motive to conspire.
 NOTES; Could argue for broad application of rationality standard (or can say
apply to this case only). This case is Twombly but for SJ instead of motion to
dismiss. No clear motive.

Summary Judgment Summary

1) When the moving party does not bear the burden at trial (D)
 D has two options for satisfying the initial burden of production:
o 1) D can claim that the P has no evidence; the P then has to come forward with evidence
o 2) D can come up with affirmative evidence to negate the Ps case; more difficult
 if the D satisfies one or the other, the burden shifts to the P
 D does not have to do anything at trial unless the P has presented some viable evidence; this is
why the D does not have to do anything before claiming SJ
2) When the moving party does bear the burden at trial (P)
 the P must show affirmative evidence; if nothing is contradicted by the D, the P will win
 P does not have the option of saying that the D does not have enough evidence because it doesn't
matter until the P has shown the evidence

Dismissal of Actions
 Voluntary Dismissal. A plaintiff has the option of dismissing his action voluntarily, without
prejudice to himself, at any time early in the pretrial procedure.
o However, because there is a chance of harassment and misuse of the tactic of voluntary
dismissal, many jurisdictions provide that a party may voluntarily dismiss his action
without prejudice only once
 subsequent voluntary dismissals act as adjudications in favor of defendant.
[With prejudice = you can’t bring action somewhere else]
o The issue is the risk of prejudicing the D. You always get one of these under Rule
41(a)(2) so you can dismiss and re-file.

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  Dismissal for Failure to Prosecute. Plaintiff must proceed with “due diligence,” meaning within
a “reasonable time.” If plaintiff does nothing to move case forward, case is dismissed. These are
always with prejudice, on the merits (adjudication for defendant).

Default Judgment
 When a defendant in an action at law omits to plead to the complaint within the time permitted by
statute, and otherwise fails to contest the adjudication of the suit, and fails to appear at trial, she
defaults, and a judgment by default may be entered against her without the formality of the trial
upon the merits.

Trial
 Big Q: Who finds the facts?
o Does one of the parties have the right to demand that the jury find
the facts? 7th Amendment PRESERVES, does not create/grant
 1) Right to jury trial at CL (law not equity)
 2) Limited reexamination of findings
 When does the right to a jury trial exist?
o First, how do you ask for it? In the complaint/answer (Rule 38)
o Rule 38(a)right preserved, federal statute can create it
o Rule 38(b)Demand (14 days after last pleading is served)
o Rule 38(d)If you don’t request, YOU WAIVE IT…and if you do
request, you cant rescind unless OTHER PARTY CONSENTS (maybe
you like the judge)
 Why? B/c D was counting on jury from your request, and she
might have asked for it had you not!
o ***BUT, this is all assuming we have met pre requisite for jury trial in
the 1st place!
 2 Principle Tests:
o 1) Historical Test- CL, 1791, was it tried to a jury back then?
 If not, then tried in a court of equity
o 2) Relief (remedy) Based Test- What kind of relief is you seeking? Is it
a remedy at law or equity?
 So there is a little bit of overlap…Legal relief=punitive
damages, where as Equitable relief=stuff like injunctions
 Legal Relief=Jury, Equitable Relief=Judge
 Asking “what relief are you seeking?” is usually enough,
but not always
o Basic Process:
 1) Determine jury right issue by issue (not all or nothing)
 2) If an issue of fact underlies law and equity, JURY (if fact
underlies injunction and damages)
 3) Try jury issues first

Beacon Theaters “Discretion is very narrowly limited and must, whenever possible, be exercised to
preserve jury trial.”
 FACTS: Fox (P) has exclusive rights to movie. Beacons says not allowed
because antitrust. Fox wants injunction to say Beacon cannot harass them

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 and wanst declaratory judgment saying I am not doing anything wrong.
Beacon counterclaims with antitrust and asks for treble damages.
o Beacons counterclaims are compulsory
o To get relief P (Fox) needs to show that Fox and Beacon are
competitors
 PROCEDURE: District court says we determine equitable relief first and then
determine legal.
 D’s Argument: Beacon does not like this because that means that the court
will have to decided
 P’s Argument: Decl. judgment is equitable
 HOLDING: Have to look at this like it is a traditional coercive action. Because
equitable relief is a remedy of last resort, you can decide injunction after
legal relief. Fox is not asking for legal relief, but Beacon is (we don’t count
decl. judgment as legal relief). If Fox needs an injunction, they can request
temporary injunctive relief.
o Only under imperative circumstance can a right to a jury be lost.

Equitable v Legal Takeaway:

 A trial judge can consider equitable relief after the jury trial
 If choosing between legal or equitable relief, legal goes first because.
Equitable relief is supposed to be a last resort.
 What if a legal counterclaim is asserted against a claim for equitable relief
o If counterclaim is compulsory
 Assume factual overlap so equitable relief goes 2nd
o If counterclaim is permissive
 No factual overlap so judge can decide to do equitable first

Dairy Queen v Wood (p. 996) Where there is a mixed request for relief, even if the legal remedy
is "minor" there is a right to a jury trial
 FACTS: Issue of noncompliance with franchise agreement. DQ is asking for
jury trial.
 HOLDING: Even though Wood is pleading accounting, you are really asking
for damages, so DQ has a right to a jury trial
 TAKEAWAY:
o Mixed request for relief means there is still a right to a jury.
o Disregard characterizations of parties when considering whether to
grant jury trial or not
o Jury trial is so important you can make some inroads on it to ensure it
still exists

Policy reasons against jury trial

 Complicated nature of cases can confuse the jury
 Could cause “irreparable harm” because if the jury rules incorrectly on the
legal issue

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Rule 53b Masters
 Court can appoint a master to assist the jury
 Should only be done in exceptional circs
o Better option is just to give clear instructions to the jury
 Instead of doing away with jury trial they are appointing someone not
subject to voir dire

Ross
 P needs to show they can be a stand in for corporation and the merits of the
corporation itself
 Problem: Derivitive actions are usually equitable but the claim
being argued is a legal one, so there is a jury trial But we had
that rule b/c of irreparable harm, and now we don’t have that
so not to worry
 Our rules have allowed us to do all law and equity claims all in one court, so
no worries! (pg. 1000)
o This is RARE, but important
o When legal issue is involved we don’t look at historical test, this case
is an example where the historical case does not work.

Curtis
 D’s are asking for a jury trial, cant go to CL because too new/COA brought in
Title 8 discrimination in housing action. This is not a common law claim so
you cannot go to the historical test. Also, statute does not expressly grant
jury trial.
 under Civil rights act 1968 – didn’t exist in 1791.
 We know there are a lot of statutes out there not applicable to CL, so all we
can do is try to figure out what they would look like…aka are there damages,
are those damages discretionary
o **Less discretion=More right to jury and vice versa
 *Just b/c damages=money isn’t enough!!!
 So with statutes, really we ask, is the remedy legal or equitable? AKA are
they figured out by judge’s discretion or not?
 HOLDING: Jury trial is required because of mandatory nature of the
damages.

Tull v US
 HOLDING: 2 steps:
o 1: Look at what it was like in the 18th century
o 2: Look at the character of the relief (more important part)
 BRENNAN CONCURENCE: Just look at 2.

Rules

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  Court’s assess the availability of a jury on an issue-by-issue basis. The mere presence of equitable
issues cannot rob a party of the right to a jury trial on legal issues. [Beacon]
 It does not matter whether a claim to legal relief is “incidental”, the right to a jury trial cannot be
deprived [Dairy Queen]
 Unless there are “imperative circumstances which the current court cannot anticipate”, the jury
issues shall be tried before the equity issues. [Dairy Queen]
 The characterization by the party's is disregarded [no artful pleading] [Dairy Queen]
 Legal relief- must be tried to a jury, without regard is the overall case is of equity
 If mixed- right to jury trial so if there have overlapping factual issue the issues will be determined
by a jury; but see exception when equitable claims would be tried first [Fox] but can't imagine a
circumstance when it would apply.
o Jury confusion may be a reason to find that a legal remedy is inadequate. [Dairy Queen]
 You can appoint a special master to assist the jury under Rule 53(b).
 Even this limited inroad should only be made in exceptional circumstances.
 All equity claims- No jury trial
o Except in Ross situation where the claim requires the establishment of a legal claim.
 If it’s a new claim- Yes jury trial if the statute is creates legal rights and remedies; where damages
are placed in statute, is there discretion to award damages (discretion is associated with equity);
where is the right enforces (admin agencys, no jury right) [Curtis]
Steps from notes:
1) 1791
2) Curtis – look at statute
3) What kind of relief

Judgment as a Matter of Law (or Directed Verdict) (Rule 50)

Rule: Federal Standard
 Judge is not allowed to weigh evidence. If D has 20 witnesses saying light was
green and P has only one saying it was red, judge cannot find for D.
 It is not answer to say that the jury's decision resulted in speculation and conjecture. This is
assumed to happen for a jury to make inferences.
 Only when there is a complete absence of evidence to support the jury verdict, is a reversible error
committed.
 As long as there is some evidence, one can reason to uphold the verdict, the court cannot take it
away from the jury even if there is a lot of evidence on the other side. Judges aren't meant to
weight evidence.

- taking the case away from the jury and determining the outcome as a matter of
law. Defendant’s argument states (the standard) that no reasonable jury could find
for non-movant. It’s so clear don't need Jury…cant move for this until other side has
been heard (put on evidence, etc.)
 What’s judge going to say?
o DENIED…Why? B/c by now, P has already survived a motion to
dismiss and summary judgment, so we have already determined that
there is an issue of fact requiring trial…basically we wouldn’t have
gotten to a jury trial w/o notion that jury might be able to find for
Plaintiff
 So now what?

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 o Defendant will make a “renewed motion (JNOV)” which judge can
deny, or order a new trial, or grant as a matter of law
 Rule 50(a) (JMOL) is for before the jury
 Rule 50(b) (JNOV) is for after the verdict is filed
 Mal practice risk: if you don’t make the 50(a) motion
YOU ARE BARRED from making a 50(b) motion
 So what if you’re on appeal and court says District Court got it wrong and
directs a verdict for Defendant….is this OK?
o YES, Neely
Neely
 If you thought there were grounds for a new trial, you could have brought
them to our attention
o 1) No difference between Appellate/District court entering judgment
as a matter of law
o 2) If you don’t take advantage of rules, tough!
o 3) 50(a) is almost never granted because if it is done in error, it
restarts the entire process and whole new trial needed…where as
with 50(b), jury verdict to come back to
 So why do we even have 50(a)?
o To prevent a violation of the 7th Amendment which prohibits the mere
reexamination of facts tried to a jury
 Why have 50(b)?
o Safety valve against unreasonable jurycould be unfair to loosing
party

Galloway: Court says JMOL is OK because in 1791 they had demurrer and motion
for new trial in 1791
 Critics say demurrer is a purely legal issue that is irrelevant to what court
finds and that a motion for a new trial has nothing to do with the right to a
jury trial
Jury Trial Check List:
 Did CL permit/demand it?
 What kind of relief is being asked for?
 What does the statute say, if there is one?
 How much discretion does the judge normally have over this matter?

Denman
 All we know is there was a car accident, P’s car is facing one way, D’s car is
facing the other, and the transmission is on the other side of the road
o Additionally we know the cars were driving in opposite directions
 So even though jury verdict for P, D moves for JMOL and wins
 P needs to show negligence… what’s the problem with doing that?
o ***All we know for sure is D was negligent at T0, BUT we have no
evidence that D was negligent at T1, so that would need to be inferred.

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  So court says, speculation/conjecture is NOT enough!
 In order to get to a jury, need issue of material fact AND need to say
reasonable minds could differ….but then jury is going to need to decide this
based on conjecture/speculation! Paradox!!!
o So court says we need evidence that D’s car actually crossed the line
and caused the accident
 HOLDING: There is no evidence. Speculation and conjecture is not enough.
Jury verdict is overruled. To go to a jury you need an issue of material fact, on
which reasonable minds can differ.
 FEDERAL STANDARD: Reasonable minds can differ and we do not know
how you will choose. Fed judges are comfortbale with some conjecture.

Kircher
 FACTS: P loses hand in the trespass area. Trip and fall from the regular area
to the trespass area (or so P claims). D says you were in the trespass area, so
I should not have to pay.
 HOLDING: It’s a question for the jury, so the jury’s ruling for the P is
acceptable
 Difference from Denman: P was his own witness (unlike Denman where
there were no witnesses – there were but court didn’t uphold their
testimony)

Reeves v Sanderson
 FACTS: Age discrimination case. D says fired for poor attendance record. Ct.
of Appeals grant 50(b). but P provides evidence that D’s argument is pretext:
o P proves prima facie case
 Member of protected class
 Qualified for position
 Adverse employment action
 Etc.
o D must prove non-discriminatory reason
o Burden shifts back to P to prove case
 Ct. of Appeals said evidence of P’s rebuttal is no enough to show
discrimination and jury cannot conclude discrimination
 HOLDING: Because P shows that D’s decision is pretext is shows D is trying
to cover something up so jury can find for plaintiff because an inference is
allowed. (This is because jury is allowed to not believe in D’s “legitimate
reason” and infer that P should win.)
 STANDARD FOR JMOL: Look at all the evidence and disregard everything
that facts that favor the moving party except uncontradicted and
unimpeached evidence or evidence from disinterested witnesses.

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Motions for a New Trial (less radical than JMOL)
 Rule 59: Motion for new trial
o Judge has (unlimited) discretion to use if:
 Error (by judge, or evidence, or whatever)
 Improper conduct (Jury or something)
 Verdict against the weight of the evidence
 Excessive /inadequate verdict
 Damages Disproportionate (remitteder, shocks c)
 Newly discovered evidence
 Incoherent/Inconsistent Jury Verdicts
 For appeals on motion for new trial, the standard of review is if the judge abused discretion

Ginsberg
 New trial granted b/c “interests of justice”…SC of MN says that’s too
arbitrary, no other reasons were given, how are we supposed to even review
a decision like that…
o MN rules of civil procedure have this extensive list of all the reasons
you can give to grant a new trial, yet the reason given here is not on
that list, so reason to be sketched out by this
 So what does this case tell us?
o EXCEPTION (to judges discretion): the legislature has spoken on this
issue, so we can’t allow judges to override the legislature like this.

Coppo v. Magnani (not SCOTUs):

 FACTS: WA appellate court looks at lower court decision
 HOLDING: “Substantial justice has not been done.”-lower ct. Appellate court
is OK with granting new trial and giving the power to lower court judge who
was present and saw things that are not in the record.

Incoherent Verdicts

Magnani2 claims, one for wrongful death another for expenses, so one for the
estate and one for P herself…jury is incoherent, comes back with one verdict of 19K
w/o distinguishing who gets what (how much to estate/how much to wife), so really
we need 2 verdicts
o So here court says, judge didn’t abuse his discretion in granting
motion for a new trial (deferential standard of review)
 ***Judges in cases like these are not ruling on the
rightness/wrongness of the verdict
 In this case we needed a special verdict

RobbJury finds contributory negligence, which in that jurisdiction is supposed to

mean complete bar to recovery, yet jury returns verdict for P awarding 2K in
damages…so this is totally inconsistent, so new trial needed.

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Duk
-49/50% case…so we say there is an absence of any evidence of bad faith so we
must uphold the verdict, so we are forced to say that the appellate court did abuse
its discretion of granting a new trial, and so we must reinstate the initial verdict
Holding: When a jury issues an inconsistent verdict and is still available to clarify
their intent; their second, clarified verdict should be given deference and a motion
for a new trial should be denied

VERDICTS AGAINS THE WEIGHT OF THE EVIDENCE

Yeatts
 Case of Doctor asking for indemnity from insurance co….but there is a
question about whether it arose from him performing an illegal abortion.
 P looses, argues for new trial because verdict was against the great weight of
the evidence…. Judge can do this using his own discretion.
 But here, JNOV and MNT are both DENIED, and that’s OK b/c its based on
judges discretion.
o ***The difference between JMOL and MNT is the standard…
 JMOL needs to be denied if “reasonable jury could differ”,
where as MNT does NOT.
 So Big Picture: Judges have A LOT of discretion on MNT,
and virtually none for JML
Side Note: When asking if damages are absurdly out of whack (shock the conscious),
in practice judges will rarely grant a new trial but instead grant a “remitteder””I
will grant a MNT unless you accept less money”

Reasons for allowing motion for new trial:

1. Historically we have allowed it

2. You still have the right to a jury (just a new trial)
3. Misconduct of the jury (Duk)
4. Excessive or insufficient damages (Duk, Robb)
5. Errors of law occurring during course of trial
6. Irregularity in the verdict (Magnani, Duk)
7. Discovery of material evidence that could not have previously been
discovered

Hypo: P v. D
 Jury finds for D
 P moves for new trial
 Judge grants motion
 D cannot appeal
o If D wins D will not appeal
o If D loses D can appeal loss and appeal granting motion for new trial

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  But now it looks like the court was right to grant a new trial
because a jury found differently than the first jury

Damages Standard
1. If damages shock the conscience, judge can grant a new trial.
a. But usually judge will not do this
b. Instead judge will to get parties to settle
i. OR
c. Judge will use remittitur –if party accepts less $ then awarded, no new
trial
d. Addittitur-CANNOT force new trial by asking D to pay more

Addittitur v Remittitur
 Remittitur-does not violate the 7th Amendment because it is within the scope
of what the jury awarded
 Addittitur-violates the 7th Amendment because it’s more than the jury
awareded

Rule 68 (offer of judgment)

 Party can make an offer for amount and for judgment (NOT settlement) to be
entered. If a clerical error is made, erroneous party can make 60a motion to
correct, but if you just overvalued the case, you are in trouble

Rule 60 (relief from judgment or order)

 (a) Ct. can correct clerical mistakes, oversights and omissions
 (b)
o (1) If you fail to show up for a court date you can move for 60b1 relief
o (2) Newly discovered evidence
 Restricts use of evidence that could have been discovered with due diligence, it
existed at the time of first trial, and it would change the outcome
60(b) 1-3 Must be made within 1 year.
60(b)(6) Judges will sometimes stick 1-3 these under (b)(6) to get around the 1
year deadline
 If fraud is present, court is much more willing to expand the time.
 The facts for a 60 motion must have been in existence at the time
o A new law is not grounds for relief
 Rule 60 is hard to invoke because of res judicata

Claim Preclusion (Res Judicata)

 Bar on litigating claims that were the subject of the previous lawsuit
CLAIM PRECLUSION
1 C1 judgment must be valid, final, and on the merits
 valid – rendered by a court of competent jurisdiction
 subject-matter jurisdiction and personal jurisdiciton
 final – case is over in district court

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  claim preclusion can be brought up if case is on appeal
from district court
 On the merits – decision is based on actual facts of claim, not
something procedural
 MERITS:
o SJ, Final Judgment, Default Judgment, anything
with Prejudice, Involuntary dismissal not on
procedure or jurisdiction are also on the merits (rule
41(b))
o 12(b)(6) dismissal for failure to state a claim upon
which relief can be granted
 NOT ON MERITS:
o dismissal for lack of personal jurisdiction, statute of
limitations, bad process…
2. C1 and C2 parties must be identical. 2) Parties in the second action must be
identical to the first [same Claimant and D], same positions P is P and D is D
 Non-parties can also be affected if they are in privity with the
claimant (non-party preclusion)
3. C2 claim must have been considered in C1. The claim in the second suit
must involve matters properly considered included in the first action
 Arise from the same transaction or series of transactions, look if
the “facts are close in time, space, origin, or motivation, and form a
convent trial unit”
 if D doesn’t raise a claim against P arising out of same transaction
or occurrence, not precluded from raising claim in a second action
b/c of claim preclusion (because D would then be P in second
action, and would not be the same party)
 But D must bring claim against P arising out of same transaction or
occurrence as a compulsory counterclaim (Rule 13(a))

Rush v City of Maple Heights

 Facts: Action for negligently maintained roads
o C1: (Rush v City 1) Sues city for failure to maintain street, damage of
$100 for property damage awarded
o C2: (Rush v City 2) : Sue city for personal injury (not injury to
property)
o P argument: Rush wants to use issue preclusion. We already decided
city was neg
o D argument: Want to use claim preclusion. Should have brought
personal injury action in C1. It was same transaction/occurrence.
 HOLDING: “A P may maintain only one action to enforce his rights existing at the time
such action is commenced” The second action is precluded. Transaction test (see above)
 NOTES: May have been a strategic advantage for trying property case first
property damage is not as big of a case so a less experienced attorney may
litigate it for city

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Difference between tests for Joinder/SJ and Claim Preclusion
 Claim Preclusion is not permissive, it is compulsory.
 SJ and joinder are permissive.
 But just because you can do something under SJ and Joinder doesn't mean you
have to do it under claim preclusion (see hypo below)
o BUT if you do wait be sure that C1 did not have jurisdiction
Hypo- P sues D on contract claim in State ct. And wins. Then P sues D for Anti-Trust [exclusive fed
jurisdiction] from the same transaction in Fed ct. Precluded?
 No preclusion, because you couldn't have brought the anti-trust claim in C1. Would have had to
remove to fed ct, P shouldn't be forced to do this, state interest in the claim, Ps choice is important.
Hypo- Car accident with A,B,C. C1 A sues B. C2 A sues C. Preclusion?
 No, different parties [joinder is not required except in rule 19]. Ann could bring them together but
doesn't have to
Rule- If you have claim against different parties arising from the same transaction. You
can sue them separately, no preclusion. If you have multiple claims against one party
from the same transaction, you can't split the claims, unless you couldn't bring C2 in
forum due to jurisdiction

Matthews
 Just tells us that sometimes the substantive law will tell us that there is
privity (respondeat superior)

Hypo
 C1: Phil v. Catherine
o Catherine does not think court has PJ, so she doesn’t sow up
 C2: Phil tries to collect on default judgment
o Catherine can argue that judgment is not valid or final

Moitie (and Brown)

 There are a bunch of plaintiffs originally, and Moitte and Brown are just two
of them…
o They all loose initially, and the other plaintiffs appeal but M+B
don’t…instead they try and re-litigate the case on their own…
 So, C1: Anti-trust case, M+B (and everyone else) v. Dep’t StoreDISMISSED
 C2: Anti-trust, M+B (only) v. Dep’t storeDISMISSED b/c Res Judicata!
o So here’s the thing…C2 is after the other plaintiffs have successfully
appealed AND WON, so even though we now know that Dep’t store
was wrong, we still cannot allow M+B to re-litigate the case because of
our rule about claim preclusion!!!! So even though we know decision
in C1 was wrong, they are still barred!
o So they should have stayed with other plaintiffs and appealed
 So what do we take from this?
o For C1 to be “valid, final and on the merits”, all we must make sure is
that it was procedurally correct, not necessarily the correct decision
(right/wrong)

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Defense Preclusion
 Used in situations where …
o Rule 13 does not apply, if you don't file a pleading, in certain state courts.
Defense preclusion is more narrowed than rule 13
 Defense preclusion bars facts discussed in earlier litigation
 Rule 13 bars any claim arising out of same transaction or
occurrence
 Type 1
o There is a second action by a D that seeks to advance a claim against the
P.
 The claim involves matters not litigated in the first action
 Claim involves matters that were litigated in the first action
o Second action by the P where D raises new defenses not advanced in first
case
 Type 2- C2 would undermine the judgment of the first

Why defense preclusion?

Because you cannot have claim preclusion when you flip the v.
 C1: A v. B
 C2: B v. A
 Technically different parties so no claim preclusion

Mitchell
 C1: Bank sues Mitchell (potato farmer) for collection, Mitchell wins
 C2: Mitchell sues Bank to get surplus on loan, Bank says there is Res Judicata
o If general principles apply then yes…but that isn’t the case here…in
the initial suit, there was a fact central to the claim here, so it should
have been brought as a CCC (compulsory counter claim)
 Mitchell wants to use issue preclusion offensively, but cant because cant use
as both sword and a shield (when CCC applies)
o So issue preclusion is narrower than claim preclusion
 Kirven (referenced within Mitchell)Defense preclusion isn’t so broad

Rule 13 v Common Law Defense Preclusion

 Rule 13 is more powerful because it precludes more claims than the common law does.
o In common law, you are barred from bringing a claim that has same factual basis as
C1 (less broad/powerful than 13)

Linderman v Hillenbrand-barred from raising claims used as a defense in C1

 FACTS:
o C1: L v. H sues about purchase price (H won)
o C2: H v. L sues about fraud (H won)
 HOLDING: H is not barred in C2 because the facts that were discussed in C1
are different than C2.

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Issue Preclusion (Collateral Estoppel)
Issue Preclusion Standard

1 Valid final judgment on the issue

2 Actually litigated
3. Decided and essential to court’s judgment/necessarily decided (did they come to
a conclusion)

 Offensive issue preclusion: when the P in the second action seeks to preclude litigation of an
issue that was decided favorably to him in a prior action
 Defensive issue preclusion: when the D in the second suit seeks to preclude re-litigation of an
issue that was decided in his favor in a prior suit
 Rule: Only party in C1 can use issue preclusion offensively or defensively in C2

Claim Preclusion v Issue Preclusion

Similarities
1) harm is the same (could lead to erroneous result)
2) still, we want to have finality
Differences
1) the issue must have actually ben raised, not just what should have been
raised
2) mutuality—anyone can raise issue preclusion

What is an issue?
 Is the driver of the blue car negligent
 Was the light red

How is issue preclusion decided?

 Trial record
 Testimony
 Looking at elements of claim for substantive law
 Jury instruction/verdict form
Sometimes determining what has actually been litigated is difficult

Cromwell
 Why not actually litigated?
o 1) Different bonds at issue
o 2) Issue of whether Cromwell gave value was never actually litigated
 So what does this case tell us?
o Just what it means to be “actually litigated”

Russel v Place (Decided vs. Litigated)

 HOLDING:
o Patent action. First court determined infringement but sued on fat liquor and leather
treatment. Not clear if the court ruled on 1 or both of those. P sued again for
infringement.

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 o No issue preclusion- we don’t know if they decided on both or not. It was a general
verdict, so we need to relitigate.
o Special verdict form would have been helpful here
o Note: no claim preclusion here because the patent was violated again, so it’s a claim for
the 2nd violation

Rios v Davis (Essential vs. Non-essential)

 FACTS:
o C1: PDGC v Davis for neg and Davis impleaded Rios for neg. Court
finds all three were neg.
 BUT Rios negligence was not essential to court’s judgment
o C2: Rios v Davis. Who can use issue preclusion?
o HOLDING: Rios’s neg is not essential to judgment, so Davis cannot
use it against him. But Rios can use Davis’ neg against him because his
neg was essential.
o ***CANNOT use issue preclusion if issue was ESSENTIAL to the
judgment in C1

HOW TO DETERMINE IF ESSENTIAL

 Change the issue trying to be precluded and ONLY THAT ISSUE
 If it changes the result of the case, it is essential and can be precluded

Alternate Universe Hypos (same facts as hypos above)

 C1: Bus Co. v. Driver (Driver wins!)
 C1 result:
o Non-negligence of BC: non-neg
o Neg of driver: non-neg
 C2: Driver v. Bus Co.
o Issue 1: Bus co. wants to use defensive issue preclusion
o Issue 2 Driver also wants to use offensive issue preclusion

Issue 1 Alt Universe Issue 2 Alt Universe

If BC was negligent, does it change
anything?
 No, driver still wins.
 So NO Issue Preclusion for Bus
Company
If Driver was negligent, does it change
anything?
 Yes, driver would have lost
 SO yes, driver can say he was
not neg in C2, can use issue
preclusion.

 C1: Bus Co v. Driver (Bus Co. wins!)

 C1 result
o Non-neg of BS: non-neg
o Neg of driver: neg
 C2: Anne v. Driver

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 Issue 1 Alt Universe
If driver was not neg, different result?
 Yes, driver would win.
 So yes, Anne can use issue
preclusion to say driver was
neg. (This is non-mutual
offensive issue preclusion.)

 Same C1
 C2: Driver v. Anne

Issue 1 Alt Universe

If driver was not neg, different result?
 Yes, driver would win.
 So yes, Anne can use issue
preclusion to say driver was
neg. (This is non-mutual
defensive issue preclusion.)

Non-Mutual Issue Preclusion (Offensive and Defensive)

 IP used BY someone who wasn't a party in C1
 Defensive=being used by defendant in C2

Bernhard (Non-Mutual DEFENSIVE issue preclusion)

 C1: B v. Estate Accounting, CoA=fraudulent money transfer from old lady to
Cook, Estate wins
 C2: B v. Bank, CoA=same
o Can Bank use IP defensively against B?
 Traditionally no, b/c there is no mutuality (Bank was not a
party in C1)
 BUTCourt says it OK, b/c “it would be unjust to permit one
who has had his day in court (Bernhard) to reopen identical
issues by merely switching adversaries” (1274)
 So what does this case tell us?
o ***Non-Mutual DEFENSIVE issue preclusion is generally something
courts will allow if circumstances are like they are here
 Policy concerns?
o Bank doesn't have to pay to litigate C1
o If C1 is wrong judgment we are applying wrong twice

Parklane Hosiery (Non-mutual OFFENSIVE issue preclusion)

 C1: SEC v. Parklane, CoA=False Proxy statement, SEC wins
 C2: Shore v. Parklane, CoA=class action for same thing

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 o Can Shore use IP offensively, even though he wasn't a party in C1?
 Normally no, but here court says OK with judges discretion
 In cases where the P in C2 easily could have joined in C1,
Person its being used against didn't have a full chance to
litigate in C1, person its being used against could not have
foreseen in C1 that there was potential for multiple litigation
(incentive to litigate hard in C1),there were inconsistent
judgments shouldn't be allowed
 So what does this case (and Blonder-Tongue) tell us?
o ***Court’s are much more hesitant to allow Non-Mutual OFFENSIVE
issue preclusion, but will allow is in some circumstances
 Policy concerns?
o D has to worry about joining all potential P’s in C1
o Incentivizes “wait and see” attitude from P
o Over litigation and inconsistent judgments

Non Mutual OFFENSIVE Issue Preclusion-cannot be used against the govt.

because they are sued so much
Person using preclusion is a claimant, could lead to more litigation, and encourage people to sit out and
watch lawsuits. Can't be used against some on who was not a party in C1.

Binding Nonparties
Hypo: Asbestos mining town. Town agrees to try 5 cases and average out the award.
Everyone will get the average amount.
 After this happens, person 6 is unhappy with the amount. Can she sue?
 Yes. We do not bind nonparties. (BUT if the person signed a contract saying
they agreed that would preclude them—then it is K preclusion not issue
preclusion.)

Hypo 2: Bellwether case in asbestos mining town. No K by Ps. P’s lawyer said we
will try Ann first because her case is strong. Ann loses. Preclusion for P2?
 D will argue yes because Ann represented P2’s interest, and P2 knew that
Ann represented her interst.
o BUT
 There is no K
 No obvious attempt to protect P2 in Ann’s case
 The tactical maneuvering is not the type that would create
preclusion (eg laboring oar)
 It is a wait and see attitude but P2 is not allowed to use
nonmmutual offensive issue preclusion against D.

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Martin v. Wilks
 C1: Black FF v. City/Board, Consent decree
 C2: White FF v. City/Board, Challenging those consent decrees
o So can City/Board use IP?
 NO. IP against a non-party is NEVER okay
 This isn’t non-mutual issue preclusion, this is issue preclusion
against a non-party
 Opportunity to intervene doesn't matter, we will NOT bind that person just
b/c they knew about the suit and didn't intervene…they weren’t a party in C1
and that's that. Rule 19 and 24 don’t count for IP.
 Martin v Wilks-overruled by legislation for Title VII matters only

Montana
 There are times when you can be precluded even though you weren’t a party
in C1
o ***US is precluded here because they were the “laboring oar” in
C1aka they might as well have been a party b/c they were litigating
from behind the scenes
 ***BTWNon-parties can use C1 to bind those who were parties, but we still
don't (usually) bind non-parties to C1

Taylor
 C1: Herrick v. Sturgell, CoA=Seeking documents under FOIA, S wins
 C2: Taylor v. Sturgell, CoA=same
o Can Sturgell use IP defensively based on “virtual representation”
doctrine?
 Court says no, and that you need a whole lot to preclude based
on “adequate” or “virtual” representation
 A person is not bound to a suit to which he was not a party
o For a non party to be bound; virtual representation (if not laboring
oar); six relevant factors
 Close relationship between P1 and P2
 Participation in the previous litigation
 Apparent acquiescence to the preclusive effect of the judgment
 P2’s deliberate maneuvering to avoid preclusive effect
 Adequate representation of P2 in C1
 If either the court uses special procedures to protect the
other parties interests or there is an understanding by
P2 that C1 is being brought in a representative capacity
 Raises public law (constitutional issue) rather than private
issue
 More likely to be bound on public than private issue

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  Reinert says: big factor is whether P in C1 thought they were
representing P in C2, making all their interests represented
and protected
o This case also does list exceptions to nonparty preclusion
 Nonparty agrees to be bound
 Substantive relationship between parties
 Adequately represented interests
 Nonparty assumed control over the suit

REVIEW

HYPO:
 C1: A v. B
 C2: A v. B
 Cannot bring up C1 claim again unless C1 could not have taken jurisdiction
over that claim.

HYPO:
 C1: A v. B
 C2: B V. A
 If compulsory counterclaim, cannot bring in C2
 Common law: If B raised in defense on C1, cannot use as sword in C2.
o OR
 If we think what B is doing in C2 will undermine C1, it is barred.
HYPO:
 C1: A v. B
 C2: A v. C
o A cannot relitigate claim lost in C1 against C (nonmutual defensive)
o Generally OK with C precluding A
 C3: C v. B
o C will try to preclude bc B loset in C1. (Nonmutual offensive issue
preclusion)
o Allowable sometimes
HYPO3:
 C1: A v. B
 C2: A v. C
o A cannot relitigate claim lost in C1 against C (nonmutual defensive)
o Generally OK with C precluding A
 C3: C v. B
o C will try to preclude bc B loset in C1. (Nonmutual offensive issue
preclusion)
o Allowable sometimes
 C4: D v. B
o B cannot use issue preclusion against a nonparty

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Erie Doctrine
 Only 1332, only operates in Federal Court (for our purposes)
o QUESTION: When do we apply Federal Law to particular issues in
1332 cases? (choice of law doctrine in Fed Court, when there may be
state law that could apply)
o Federal courts sitting in diversity apply state substantive law

Erie
 QUESTION: If tried in 1790, do we use Federal or State law?
 Rules and Decisions Act: “Laws of the several states”….what does that mean?
o Swift: Don't use state law over federal law if the state law was judge
madeonly want to use substantive law
 OVERRULED
o Erie overrules Swift because:
o 1) it’s take on statutory interpretation was wrong (judge made law
isn’t automatically discluded) and it wasn't working,
o 2) It gave non-citizens the advantage of choosing between
state/federal court if it sues D in her home state…1332 is meant to
protect non-citizens, not give them an advantage
 Reinert: Not great reasons because 100 years later the
legislature hasn't really changed much
o 3) It’s unconstitutional (Reinert says this was most important reason
since the other two kind of sucked)
 Unconstitutional b/c gave courts more power than congress
 But a more modest question would be whether courts
can exercise power congress has yet to address/chosen
not to address
 Erie says even in an area congress could regulate we are
going to apply state law
 ERIE’S RULE: Federal courts should apply state substantive law unless the
federal law says otherwise

Guaranty Trust v. York

 Issue: SOLDo we apply the states SOL or do we let the Fed court decide for
them?
 YORK’S RULE: If it would affect the outcome of the case, it’s substantive…if
not, it’s procedural
o Why? Because the law should be consistent between federal and state
courtfederal tribunal should operate the same way as a state court
does just under a different name.
o *OUTCOME DETERMINATIVE TEST*
 Reinert: Bad rule because what may be deemed outcome determinative
might be really absurd or dumb (hope on one foot, pink paper, etc.)

53
Regan
 Does suit “commence” by filing or service?
o If by filing, P can pursue claim, but if by service, D wins…
 So this is definitely outcome determinative
o P argues Rule 3 sets the “commence” marker, which is filing
o D argues that state law sets the marker, so service is the marker
 So this case tells us that any procedural variation from state law can be
considered outcome determinative, which is NOT what Erie
wanted/intended.
Byrd (starting to refine Erie and York)
 Conflict: Should the factual question of whether this guy is a statutory
employee be decided by the judge (state law) or a jury (federal law)
o TEST (thus far):
o 1) Substantive or arguably procedural? Procedural
o 2) Outcome determinative? Yes
o 3) Balancing Test (Byrd’s contribution): Balance the federal interests
w/ states interest
 Here the Fed outweighs because that state doesn't have one
 Substantive: Does it affect what we do outside of court
Hanna v. Plummer
 Facts: H sues in MA Federal Court by serving process under Rule 4 FRCP…but
Mass law requires service by hand.
o HANNA’S CONTRIBUTION:
 1) How can we decide “outcome determinative” in light of the
twin aims of Erie (avoid forum shopping and inequitable
administration of the law)
 Answer: If, at the time of filing, deciding between the
rules would have determined the choice of forum; Ex
Ante
 2) We care about the source of Federal law…if it's a FRCP or a
statute, we follow the Hanna test (below), if its judge made CL,
follow unguided Erie (also below)
Walker
 Issue: Whether state law or Rule 3 FRCP in determining when an action is
commenced for the purpose of tolling the state SOL
o State law= at service, Fed Law/Rule= at filing (aka when the statute
starts to run)
 So under state its late, under Fed its not
o 1) What is the source of the Federal Law?
 We think its FRCP, Rule 3
o 2) Is the rule broad enough to occupy the space? Is it in collision w/
the state law?
 If it is, we do Hanna analysis
o 3) Is it arguably procedural? Yes, btw SOL itself is arguably procedural

54
  So normally we would apply Federal Law…but we don't! Why?!
 2 Potential answers: First, maybe court is using
unguided Erie…
 Reinert: More likely that they just didn't want to over
rule Regan!
o So they are literally WRONG…(Reinert: We got
em!)
o Conclusion: When we as “is there a conflict” in Hanna analysis, Walker
gives us an argument for when to ignore the Rule even though it looks
like, on its face, that it is in fact in conflict with the state law.
Burlington (Ex of when Federal Law in form of a Rule is in
direct collision)
 Issue: AL law says if you appeal and loose you need to pay 10%, but Federal
Rule says that's a discretionary matter for judge to decide, and it does not
hinge on an unsuccessful appeal, its only if its frivolous.
o So Federal law is much narrower here for remedies on unsuccessful
appeals.
 1) Is it in conflict? Yes
 2) Is there a direct collision? Yes, because Federal law says “may”
(discretion), where as Alabama (state law) says “must”
 3) Arguably procedural? Yes
o So we use Federal Law

Stewart
 Issue: Can we transfer to NY based on choice of law provision? Should
Federal Statute 28 USC control rules of transfer, or should Alabama law?
o 1) Conflict? Yes
o 2) Direct Collision? Yes, “may” vs. “may not”
 Scalia: Disagrees that there is actually a conflict…he is a textualist, so he looks
at the statute and says “I don't see anything about transfer in the
statute”So he’s saying if the source of the law is not from the statute, it
must be judge made, and there for we should do unguided erie analysis

Gasperini
 Issue: There are 2; Damages review, should we use the state standard of
“deviates materially” or the Fed standard of “shocks the conscious”? THEN,
should we worry about the 7th Amendment “can’t reexamine the facts”
rulewould appellate courts conducting of a “de novo” review conflict with
that.
o So we have a trial standard of review conflict, and an appellate one
 So P, who wants to be under Fed Law, argues that standards should be based
under Rule 59

55
 o Majority responds that Rule 59 does not collide and does not create a
conflict, we can accommodate it…so “shocks the conscious” must be
judge made, and therefore unguided Erie is the correct approach
 1) Substantive or Procedural?
 Court says its both, deviates materially is substantive
but division between trial and appellate is procedural
 2) Outcome determinative?
 Yes, because it would affect the choice of forum
 3) Balance?
 Court chooses to divide the rule, and say the state
interest for trial judges is more important, but the
federal interest for appeal is more important.
Shady Grove
 Issue: Class action of P’s seeking penalty of statutory damages. Allowed
under Federal Law, not allowed under state law.
o Looks a lot like Stewart: “may” vs. “may not”
 Scalia: He writes for the majority, who all agree that RULE 23 should apply,
but they disagree as to why…BUT, Scalia says that state law should play no
role in the interpretation of the Rules Enabling Act analysis (Did Congress
delegate this authority)
 Stevens: Rule 23 is procedural so we are all good there….BUT we should look
at state law in doing the Rules Enabling Act analysisIn order to determine
whether Rule 23 is valid and constitutional, we should consider state law too
(basically meaning, in determining whether its substantive or procedural, we
should consider state law as well).
 Minority: Apply state law here b/c NY was making a change in its substantive
law so…1) Rule 23 does NOT control, so really we need to do unguided Erie
and see that its substantive, and 2) Even if we are on the Hanna side (Rule 23
does apply), we should look to the purpose of state law in doing our Rules
Enabling Act analysis

56