Civil Procedure

Professor Greenberger Fall 2010

Table of Contents
Table of Contents.....................................................................................................................................................2 1. Pleading ..............................................................................................................................................................4 a. Introduction ....................................................................................................................................................4 b. Allocation ........................................................................................................................................................4 c. The Complaint .................................................................................................................................................4 d. Responses to the Complaint (Motions and Answer) .......................................................................................6 e. Amendment & Service ....................................................................................................................................8 f. Rule 11 ...........................................................................................................................................................11 2. Adjudication Without Trial ..............................................................................................................................13 a. Default Judgment and Judgment on the Pleadings .......................................................................................13 b. Summary Judgment ......................................................................................................................................14 3. Relief.................................................................................................................................................................16 a. Three types ...................................................................................................................................................16 b. Legal Relief ...................................................................................................................................................16 c. Equitable Relief..............................................................................................................................................16 d. Declaratory Relief .........................................................................................................................................18 4. Jurisdiction .......................................................................................................................................................18 a. Personal Jurisdiction: Territoriality ...............................................................................................................18 b. Personal Jurisdiction: Notice ........................................................................................................................25 c. Federal Subject Matter Jurisdiction ..............................................................................................................27 5. Venue ...............................................................................................................................................................30 6. Erie Problem ....................................................................................................................................................33 a. Rules of Decision Act ...................................................................................................................................33 b. Swift v. Tyson................................................................................................................................................33 c. Problems developed ......................................................................................................................................33 d. Federal Rules of Civil Procedure Adopted....................................................................................................34 e. Erie Railroad Co. v. Tompkins .....................................................................................................................34 f. Principle problem after Erie ..........................................................................................................................34 g. Guaranty Trust v. York (1945) .....................................................................................................................35 h. Byrd v. Blue Ridge Rural Electric Cooperative.............................................................................................35 i. Hanna v. Plumer.............................................................................................................................................35 j. Walker v. Armco Steel Corp...........................................................................................................................36 k. Burlington v. Woods......................................................................................................................................36 l. Stewart v. Richo..............................................................................................................................................36 7. Discovery .........................................................................................................................................................37 a. Important functions .......................................................................................................................................37 b. Rule 26: Scope of Discovery ........................................................................................................................37 c. Rule 26: Operation of Discovery ..................................................................................................................37 d. Formal Discovery Devices ............................................................................................................................38 e. Problems that can arise from discovery ........................................................................................................40 f. Zabulake v. UBS Warburg LLC.....................................................................................................................40 g. Privileges........................................................................................................................................................41 h. Discovery of experts .....................................................................................................................................42 8. Former Adjudication ........................................................................................................................................43 a. Basic Principles .............................................................................................................................................43 b. RES JUDICATA (CLAIM PRECLUSION) ................................................................................................44 c. COLLATERAL ESTOPPEL.........................................................................................................................45 d. Preclusion against Third Parties.....................................................................................................................47 2

e. Preclusion and Erie .......................................................................................................................................48 9. Right to Jury Trial.............................................................................................................................................48 a. Application of the 7th Amendment................................................................................................................48 b. American Insurance v. Stewart .....................................................................................................................49 c. Beacon Theaters v. Westover.........................................................................................................................49 d. Ross v. Bernhart: ...........................................................................................................................................50 e. Chauffeurs v. Terry .......................................................................................................................................50 f. Atlas ...............................................................................................................................................................50 g. Gasperini v. Center for Humanities...............................................................................................................50

1. Pleading
a. Introduction
i. In every lawsuit, there are 2 questions that must be answered: 1. If the event occurred, does the law provide a remedy? [Is there a valid legal claim?] 2. Did the event occur? ii. If either is answered in the negative, the Plt loses. iii. First figure out #1, then #2. iv. Procedure deals with #1: demurrer or 12(b)(6) motions are the mechanisms used at the beginning of the case to answer #1 to facilitate a relatively rapid resolution to the case

b. Allocation
for each element of the claim, there has to be an assessment of why to allocate that element to the Plt or the Def. i. 3 things to consider when deciding allocation: 1. Policy: allocating elements by way of favoring one or the other party to a particular kind of litigation 2. Fairness: knowledge of the event, access to evidence, control of the evidence (Weakest of the three considerations) 3. Probability: if the event is unlikely to happen without the Defs negligence, then the element would be allocated to the Def to prove he wasnt negligent. If a condition once established is likely to continue, then the burden ought to fall on the party benefited by the change. ii. Gomez v. Toledo: should the Plt or the Def bear the pleading burden in a 1983 case? [1983 provides a cause of action for deprivation of a constitutional right or federal law AND the person who denied the right has to be acting under the color of law i.e. a state official] 1. Must the Plt allege that the official has acted in bad faith in order to beat a 12(b)(6) motion in a qualified immunity case? 2. NO: good faith is an affirmative defense that the Def must plead a. Reasoning: i. Historically, qualified immunity has been an affirmative defense ii. The substantive law: 1983 ONLY says that Plt must alleged two things: (1) that someone deprived him of a federal right and (2) that the person worked for the govt 1. Because the language of the statute does not put any additional burden on the Plt, anything else must be allocated to the Def iii. Unfair: since good faith is a subjective assessment, Def has the best access to his subjective state of mind 3. This case makes it easier for Plts to file 1983 claims since they now do not have to prove bad faith 4. GENERAL RULE: party with best access to the information related to the element should have the burden allocated to it

c. The Complaint
once we know what must be alleged, the questions arises of how specific the allegation must be i. Rule 8: a short and plain statement of the claim showing that the pleader is entitled to relief. Rule 8(a)(2). Also must include a short and plain statement of the ground upon which jurisdiction is granted. Rule 8(a)(1). Also a demand for relief sought, including 4

alternative relief. Any relief that is not requested will not be granted therefore many attorneys will as for any further relief that the court deems necessary or appropriate. Rule 8(a)(3). Sought to routinize pleading. ii. Twombley and Iqbal have substantially changed the pleading rules from being very nonspecific to being more specific [in response to the substantial cost of cases and the desire to have a way to settle the cases before the expensive discovery phase] iii. Notice Pleading: requires very little of the pleader 1. Makes things easier for the Plt because Plt may not know sufficient relevant facts to satisfy a detailed pleading standard before discovery 2. Conley v. Gibson: no case can be thrown out for lack of detail, Def just had to be put on notice about what generally he did wrong (discovery was where actual evidence would come out) 3. American Nurses: example of when a claim will stand if there is a substantive issue of law presented a. Plts plead in great detail but the two issues they claimed were not supported by facts (and thus the case could have been thrown out). But the court used the Conley rule to require only notice to the Defs of what they generally did wrong and thus the court said the even though the pleading would have been insufficient under a higher pleading standard, the fact that there was notice was enough. And the court found another underlying substantive legal issue that the Plts did not plead, but said because the issue was there, the pleading was sufficient at this point b. Their long pleading could have created many problems (but didnt because the court only required notice): i. Invalid claims mixed with valid ones ii. Unclear allegations iii. Failure to allege facts to support allegations iv. Failure to plead evidence c. If there are so many potential problems with long pleadings, why do it? GREENBERGER does this because if you plead in great detail, you can get a quick answer from the court on a dispositive legal issue and know whether to pursue an expensive case or not 4. Swierkiewicz: in employment discrimination cases, Plts do NOT need to establish a prima facie case of discrimination at the pleading stage. Only need a short and plain statement to give Def fair notice. a. Expressio unius est exclusion alterius: the expression of one thing is the exclusion of another i. Since rule 9(b) enumerates the two exceptions when more specific pleading is required [fraud or mistake] (and since those are the ONLY exceptions enumerated), then all other cases are excluded for heightened pleading and are only required to meet the Rule 8 standard b. Swierkiewicz was the example of the extent to which notice pleading was used before Twombley iv. Code Pleading: requires somewhat more of the pleader , sometimes called fact pleading v. Trade-off between pleading types: 1. Easier pleading standard: more meritless cases proceed because there is no easy way of getting rid of them 2. Stricter pleading standard: more meritorious cases get thrown out vi. Twombley: shows what needs to be alleged in a situation where conscious parallelism is potentially a viable explanation for the conduct, NOT conspiracy 5

1. Conscious parallelism: acting individually in their best interest but with no agreement not to compete 2. Complaint was pretty lengthy but still insufficient 3. Under the Sherman Antitrust Act, there must be an agreement between two parties to restrain trade (they must conspire) 4. Gets rid of Conley rule 5. Courts holding: a. Must plead facts showing entitlement of relief, not just allege it b. Facts must show plausibility, not just conceivability. When there is an equally plausible legal reason, Plt must show that his allegation is more plausible 6. After Twombley, it was unclear if the heightened standard applied to just antitrust cases. vii. Erikson: confused Twombley even more. It was a pro se complaint and the Court only required the 8(a)(2) standard of a short and plaint stamtent to give the Def fair notice 1. Went back to notice pleading 2. Reasoning suggested that Twombley only applies to specific types of cases viii. Ashcroft v. Iqbal: Twombly applies to ALL CIVIL CASES, not just antitrust or other complex litigation. 1. Heightened pleading is the best way to deal with the potential expense of discovery in meritless cases case-management by the courts during the discovery phase (like limiting the scope of discovery) is insufficient. 2. Court doesnt have a problem with the fact that Rule 9 only requires heightened pleading for fraud and mistake and not for discriminatory intent ix. Rule 9: 1. This standard is in contrast with the Rule 8 standard fraud and mistake are the only two instances where the Federal Rules dictate a heightened pleading standard 2. Tellabs: shareholders alleged that Tellabs and the CEO engaged in a scheme to deceive the investing public about the real worth of Tellabs stock a. Private Securities Litigation Reform Act: plaintiff must state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind. b. Typically, pleading for fraud cases is governed by Rule 9(b) that fraud needs to be plead with particularity c. BUT: if theres a substantive law statute that explicitly establishes a pleading standard, then the statutory standard ALWAYS controls over the Federal Rules of Civil Procedure

d. Responses to the Complaint (Motions and Answer)

i. Rule 12: 1. Establishes the time to answer a complaint a. 21 days; 60 if a government agency b. If 12(b) motion made and denied, have 14 days to reply 2. Sets forth a variety of motions to be made: a. 12(b) Defenses in Answer: the MOST IMPORTANT; enumerates 7 specific defenses that can be either raised via a motion before you answer or you can include them as affirmative defenses in the answer: i. Lack of subject matter jurisdiction: the power of the court to hear the particular type of case 6

ii. Lack of personal jurisdiction: does the court have the power to proceed against this particular defendant iii. Improper venue: where in the Federal court system the case is filed iv. Insufficiency of process: Something defective about the summons the court issues to bring the defendant into court v. Insufficiency of service of process vi. Failure to state a claim: there was something wrong with the way in which the defendant was served vii. Failure to join an indispensible party: DONT NEED TO KNOW b. 12(c) Motion for Judgment on the Pleadings i. Instead of 12(b)(6), the defendant will answer and then file for judgment on the pleadings. Different from 12(b)(6) because it includes affirmative defenses that can be brought by Def. c. 12(e) Motion for a more definite statement i. One of the disfavored Rule 12 motions because it delays the proceedings. ii. Standard: Only granted where the complaint is so vague that there is no way to formulate an Answer (rarely granted) d. 12(f) Motion to strike i. Disfavored; rarely granted because it slows the proceedings ii. Standard: Material included is redundant, immaterial, impertinent, or scandalous e. 12(g) Joining Motions i. Trickiness of Rule 12: If you make a motion under Rule 12, all available motions under Rule 12 must be made at the same time ii. Qualification (Exception): 1. Objections for failure to make a claim (12(b)(6)) or lack of subject matter jurisdiction are NEVER waived. ii. Answer: the principle purpose is to determine which facts are in dispute. 1. You want to respond to each paragraph of the complaint with the same numbering system as the complaint (keep numbers parallel) 2. Three ways to respond to allegations: a. Admission: establishes the allegation as true for purposes of the case i. Once admitted, the facts are established as truth and evidence CANNOT be introduced to discuss these facts b. Denial: puts the allegation in issue and thereby creates an issue of fact as to the allegation i. A denial indicates that the matter is in controversy and whoever has the burden must introduce evidence to establish that allegation ii. CANNOT make a general denial if there are facts in the allegation that you know to be true c. Silence (or failure to deny): has the same effect as an admission 3. If you dont list an affirmative defense in the answer, then that affirmative defense is waived 4. Zielinski v. Philly Piers Inc (PPI): Plt was hurt while working a forklift and tried to sue who he thought owned the forklift (but the company had sold it quietly a year before). In the answer, PPI just generally denied the claims and thus didnt warn Plt that he had sued the wrong Def and statute of limitations ran out. a. Court said that PPIs answer was misleading and was not sufficient under Rule 8(b) 7

e. Amendment & Service

i. Rule 15: 1. Amendments can be proposed for many reasons: to cure defective pleadings, change the legal theories, seek additional/different remedies, state additional claims, add or drop parties 2. Generally amendments under Rule 15 are to be freely granted to further the interest of justice 3. In order to permit amendments, the court considers: a. Hardship to the moving party if leave is denied (hardship to the person who wants the amendment if the amendment is denied) b. Reasons the amendment was not included in the prior pleading c. The existence of undue delay d. Prejudice to the party on the other side most important consideration 4. Relation back a. Rules for relation back of amendment i. Derived from same occurrence ii. Must have received such notice as to not be prejudiced in defending on the merits iii. Party must have known but for mistaken identity the claim would have been brought against them. iv. Notice must have been provided within the statutory period. 4. Schiavone: Plt sued Fortune but they were just a trademark of Time, Inc. They mailed the complaint to Times registered agent who refused to accept it because Time was not named as a Def. Plt then amended the complaint to name the Def as Fortune, also known as Time, Inc. in an attempt to minimize their mistake a. Plts arguments and Courts response: i. Identify of interest Fortune and Time are really the same entity, so Time would have been timely sued in the first instance (knew about the suit), so dont need relation back. 1. Court said: Time was NOT sufficiently named in the original complaint to provide them with notice ii. The amended complaint relates back to the original complaint. 1. Court said: The amended pleading naming Time does NOT relate back because: a. The basic claim must have arisen out of the conduct set forth in the original pleading has to relate to the same incident [this is not at issue in this case] b. The party to be brought in must have received such notice that it will not be prejudiced in maintaining its defense during the extra 120 days, the defendant may have destroyed evidence that may have exonerated them because they thought they were not being sued [not relevant in this case] c. That party must or should have known that, but for a mistake concerning identity, the action would have been brought against it did Time know that but for a mistake, action would have been brought against it? YES: Time knew that when they received the complaint with Fortune listed, it was meant for them 8

d. The second and third requirements must have been fulfilled within the prescribed limitation period defendant had to have received notice AND had to have known that the service was intended for them within the statute of limitations *THIS IS THE KEY ISSUE IN THIS CASE b. The Court says relation back is only allowed when the amended defendant receives notice within the original statute because they are reading Rule 15(c) very strictly and the plain language of the rule says this i. The language says within the limits of time for commencement and the Court has to interpret whether this means just the statute of limitations or the statute of limitations plus the time for process from Rule 4 ii. THERE IS AN ANOMALY IN THIS CASE: any amended named defendant must be served within the statute of limitations but a defendant that is named originally in a complaint must only be served within 120 days after the complaint is filed its strange that the amended defendant must be served much sooner than a defendant that is originally named c. Dissent: intent of Rule 15(c) is to enable a Plt to correct a pleading error after the statute of limitations has run out, if the correction will not prejudice the Def in any way 5. Aftermath of Schiavone: Rule 15 was amended (explicitly to overrule Schiavone) to include the 120 days argued for by the dissent so you have the statute of limitations plus the 120 days given by Rule 4(m) 6. Worthington v. Wilson: Original complaint was against the municipality and three unnamed police officers a. Under 1983 needs to be custom, policy, or practice of the municipality to sue the municipality for the alleged act by the police officers b. Amendment was filed after the statute of limitations had run that named 2 police officers c. Def argued that the amendment could only relate back if it was filed during the original statute of limitations (using the Schiavone rule) i. But Schiavone had been expressly overruled by the amendment to the Federal Rules to allow for amendments during the additional 120 days allocated for service d. District Courts Holding: amendment does not relate back under Rule 15(c), which says that amendments do not relate back but for a mistake concerning the identity of the proper party i. Mistake implies some sort of error, not a lack of knowledge regarding the identity of the party ii. District Court has to follow the precedent of the 7th Circuit regarding mistake, though the Dist. Court does not agree with this precedent

1. Dist. Ct. thinks word mistake does not have a technical meaning it is a shorthand word to refer to the phrase change the party or the naming of the party 7. Predominate rule a. Mistake = error, NOT lack of knowledge b. Most courts have followed this rule set out by the 7th Cir. 8. Jacobsen v. Osbourne: Plt brought 1983 action against named police officer and unnamed deputy identified as John Doe, claiming false arrest and abuse. After the statute of limitations expired, Plt amended the complaint to list the actual officer (different officer than he had named before) and deputy, whose names he figured out during discovery a. Holding: i. Amendment granted to name correct officer named wrong officer 1. Sufficient identity of interest between erroneously named officer and the officer who actually committed the crime proper officer deemed to have received sufficient notice 2. Because there was a mistake, the issue is notice 3. Time period statute of limitations + 120 days 4. Osborne had notice within the 120 days, so relation back is permitted ii. Amendment not granted to name deputies since he had been listed as John Doe 1. No mistake in naming, just didnt know who he was 2. Follows Worthington ii. Rule 4: 1. Service: the act of delivering a copy of the complaint to the defendant; along with the complaint, the plaintiff serves a summons 2. Summons: a form that is issued by the clerk of the court; its a blank form that the plaintiffs lawyer fills in and then the clerk stamps the summons to issue it and then you serve a copy of the summons and the complaint to the defendant a. Includes the name of the parties, the name of the court, the name of the plaintiffs attorneys, and the time period when a response is required 3. Service can be made by anyone over the age of 18 10

4. You can serve process with a waiver form: if you serve process with a request for a waiver, and if the Def completes the waiver form and returns it to you, the Def gets extra time to proceed a. You serve by mail in this situation, with a waiver form. If the defendant ignores the mail service, then you have to serve the defendant personally. If the defendant fails to sign the waiver, then the defendant must pay for the costs of service 5. Service can be effected in the following ways: a. Pursuant to the law of the state in which the district court is located b. Personal service, either in hand or by leaving a copy of the service at the defendants dwelling place with someone of suitable age or discretion c. Serve an authorized agent if someone has appointed an agent for service of process [this is how all corporations deal with service because almost all the time the corporation has to have a registered agent to serve] d. Service on corporations: you can serve either the agent of the corporation or a corporate officer or effect service based on the state law 6. Time for accomplishing service is 120 days; you can ask the court to extend the time of service if you are having trouble serving the person 7. Once service is completed, the person who actually made the service fills out the return of service: on the back of the summons, it describes who you actually served, where you served them etc and sign to prove the service was accomplished and then file the return of service with the district court

f. Rule 11
i. Purpose of the rule is to control abuses in litigation ii. There is an inherent conflict in the rule: if the rule is too lax, it doesnt do anything to deter the filing of abusive lawsuits; if the rule is too strict, theres a potential to chill zealous advocacy and lawyers may be deterred from filing actions that attempt to modify existing laws iii. Rule has been amended many times in an attempt to find the right balance but the amendments just end up oscillating from one side to the other iv. Rule 11(a): every pleading, motion, or other paper filed with the court MUST be signed by an attorney of record in his individual name or must be signed by the party if the party isnt represented by an attorney 1. In the original version of the rule, the attorneys signature certified that to the best of the attorneys knowledge, information and belief there were good grounds to file. The rule was only violated if the attorney acted in bad faith. a. This standard was vague, hard to prove and didnt do much to deter 2. 1983 amendment: New requirement for attorneys to make a reasonable inquiry into both the facts and the law. Had to satisfy himself that the pleading was warranted by 11

existing law or warranted by a good faith argument for modification or extension. Sanctions were mandatory. a. Pendulum had swung too far and people were deterred from filing valid claims and sanctions were imposed frequently 3. 1993 amendment (CURRENT VERSION): rule relaxed again a. Safe Harbor Provision: can withdraw the pleading within 21 days WITHOUT BEING SANCTIONED b. Sanctions are now once again discretionary rather than mandatory c. Deemphasized compensation as the goal of the sanctions no longer the goal to compensate the wronged party for the burden put on them from the frivolous filing i. Courts sanctions are now intended to deter conduct more than compensate the other side ii. All financial penalties imposed can be paid into the court instead of to the other side this has reduced the number of Rule 11 motions filed because it doesnt go to the other sides pocket d. A law firm as well as the individual attorney can be sanctioned for the violation e. Rule requires that lawyers update or keep track of the validity of all filings that have previously been made a continuing duty to ensure all representations filed in court remain in compliance with the rules i. If the lawyers learn something during trial that changes the accuracy of a previous filing, they have to go back and change the prior filing f. Lawyers explicitly allowed to make factual allegations and seek supporting evidence later i. Need to explicitly plead in the complaint that you intend to develop supporting information later v. Albright v. Upjohn: Plt included all manufacturers of the medication that made her sick and after discovery, one manufacturer, Upjohn, realized that there was no evidence that their medication was prescribed. Plt amended the complaint and dropped Upjohn as a Def. 1. Upjohn moved for sanctions under Rule 11: a. Based on Rule 11, Plt must investigate BOTH the facts and the legal theory. If either is lacking, sanctions may be imposed b. How do you know what facts to investigate? i. Formulate a legal theory and identify the elements of that claim that have to be proved. Then investigate facts that prove each element 2. Court held that the Plt inadequately investigated the facts so sanctions could be imposed vi. Keegan Management: Plt alleged that Keegan knew Nutrisystem caused gall bladder problems but didnt have any evidence of the gall bladder problems when they submitted the pleading. Clear evidence came out later that made the case. 12

1. District Court moved for sanctions sua sponte (Def decided not to pursue a Rule 11 motion but court decided to pursue one itself) 2. Plt appealed and Appellate Court held that after-acquired evidence is sufficient to constitute a reasonable inquiry of facts a. Use the objective /objective standard: lawyer gets benefit of what a reasonable attorney might have found through proper investigation (objective ) that brought about the actual legal result (objective )
1 2 1 2

b. Refused to use the subjective /objective used by the District Court: can only give credit to what this attorney actually knew through his own factual investigations (subjective ) that brought about the result (objective )
1 2 1 2

3. Court said that lawyer gets the benefit of what a reasonable (and in this case, better) attorney would know based on the factual investigation they would undertake vii. Whitehead: can still be sanctioned under Rule 11 if you do something legal with an impermissible purpose/intent 1. Attorney obtained a writ legally to execute a verdict for damages against Kmart but did it to embarrass Kmart and create a scene, with no intent to actually get the full amount of damages from the cash register and knowing the decision would be appealed viii. Objective-Objective test for Rule 11 Sanctions 1. Would a reasonable attorney have believed the complaint to be well-founded based on what a reasonable attorney would have known at the time? Ex. Keegan Management

2. Adjudication Without Trial

a. Default Judgment and Judgment on the Pleadings
i. Rule 55: Default Judgments 1. Default and default judgments: if a party fails to plead in response to a complaint, then a default may be entered, pursuant to Rule 55(a), by the clerk. 2. If the complaint seeks a specific amount of money (a sum certain) or seeks an amount that can be determined via a simple calculation, the clerk can enter a default AND a default judgment without notifying the judge 3. If a complaint does not seek a specific amount of money, the default judgment must be entered by the judge after a hearing at which time a prove up takes place: plaintiff actually puts on evidence before the judge establishing what the amount of the default judgment should be 4. There is no judgment by default against the U.S. unless the Plt shows a right to relief by satisfactory evidence. ii. Rule 54: Judgment on the Pleadings 1. The difference between this and 12(b)(6) is that there has been an answer you can rely on information in the answer that you might not have had before the answer 13

b. Summary Judgment
i. Rule 56: allows the court to evaluate whether or not there are sufficient FACTS in the plaintiffs possession to permit the case to go forward [meaning that a reasonable jury could find in favor of the plaintiff if the jury accepts the facts the plaintiff has]. It enlarges the scope of the evaluation of the strength of the plaintiffs case, based on the facts presented, not just the allegations [no clearly defined rule, simply try to predict what a reasonable jury would do], however, heresay is not permitted. ii. No genuine issue of material fact: 1. Material: outcome determinative fact 2. Genuine: whether the issue has been sufficiently established so there is no need for a trial (a reasonable jury could only come to one conclusion) 3. Can obtain partial summary judgment on one issue in the case (without resolving the whole case) a. Narrows the scope of what needs to be debated at trial b. Can discourage the party who the motion is granted against iii. Difference between summary judgment and 12(b)(6) motion: summary judgment allows the court to assess the facts of the case; 12(b)(6) allows the court to assess only allegations 1. When a summary judgment motion is made by the Def, the Plt must then disclose in detail the factual basis of the claim a. If the plaintiff is unable to show that it has sufficient facts from which a judge concludes that a reasonable jury could decide in favor of the plaintiff, then the judge grants summary judgments b. The defendant attaches affidavits, interrogatories, etc from the plaintiff and says that based upon the showing, there are no disputed facts c. In response, the plaintiff will come forward with evidence that the plaintiff contends shows there are facts in dispute i. Doesnt mean the court will evaluate the relative strength of the evidence the courts sole inquiry is whether or not a reasonable jury COULD find in favor of the plaintiff based on the evidence iv. Adickes: 1983 claim and 14th Amendment equal protection claim 1. 1983 elements a. Deprivation of rights secured by Constitution or federal laws b. By someone acting under color of law i. Exception: Private party can be liable if acting in concert (conspiracy) with an individual acting under color of law 1. If Plt can show acted with government actors (police), then can be liable under 1983 2. THIS IS WHAT NEEDED TO BE PROVED IN THIS CASE 2. Restaurant had to be conspiring with the cops for Plt to have a claim 3. Def moves for summary judgment, presenting the following evidence to show there was no conspiracy: a. Deposition of store manager i. Never communicated with the police ii. Communicated to not serve Plt for safety b. Deposition of arresting officers i. Store manager didnt ask them to arrest Plt c. Plts own deposition that she had no knowledge of communication between and the police 14

4. But Supreme Court said this evidence was insufficient because (viewing the evidence in the light most favorable to the nonmoving party, in this case the Plt) Def didnt foreclose the POSSIBILITY that there was a cop in the store a. Court said a reasonable jury COULD conclude conspiracy based on: i. Sequence of events: first white Plt was denied entry into library with the black students, then she was denied service at the Defs restaurant, then IMMEDIATELY after she was arrested on a bogus charge (combined with the hostile social climate of the time) ii. Gap in the Defs evidence: 1. Cops affidavits didnt expressly say they were NOT in the store 2. No affidavits from the waitress or the food counter supervisor a. Could infer that Def didnt include these affidavits because they would be unfavorable and show that there WERE cops in the store 5. also argues regarding the 1963 amendment to Rule 56(e) a. : its the Plts burden to submit affidavits stating affirmatively that there was a cop in the store, and cant just rest on the pleading b. Courts response: did not discharge its original duty to support the summary judgment motion, so Plt duty was not triggered 6. Adickes was a confusion standard: a. Some courts read it as requiring that the moving party negate ANY possibility that the nonmoving party would prevail b. Some courts read it as saying that if theres the slightest doubt about the facts alleged in the motion, then the motion should be denied v. Celotex: Plt said husband died from exposure to asbestos. Def motioned for summary judgment saying that Plt failed to produce a witness that he was actually exposed to any of their products. 1. Appellate court: said Def needed to support motion with affidavits to show proof of absence of material fact 2. Supreme Court now says that this is incorrect a. Rule 56(e): you can move for summary judgment without affidavits i. Moving party can deal with summary judgment in 2 ways: 1. Actually negate Plts claims through affidavits 2. After all evidence has come out during discovery, Def can just point out to the court that there is no evidence in the record to prove an essential element of the case a. Must be post-discovery b. Can only use this option if the moving party does NOT bear the burden of proof at trial 3. In Celotex, Def DIRECTLY asked Plt to provide all evidence of exposure during discovery. Since Plt did not provide that evidence, Def can just point out the lack of evidence and summary judgment is justified 4. This is a change from Adickes: now you do NOT need to negate the Plts evidence to win. You can just point out their lack of evidence after discovery vi. Anderson v. Liberty Lobby: Court said that if a case involves a heightened standard of proof that the Plt must meet at trial, the Plt must meet that heightened standard during summary judgment too vii. Scott v. Harris: video of police chase 15

1. Supreme Court said there was no issue of material fact that deadly force was warranted (but lower courts had thought deadly force was not warranted so clearly its a disputed issue) 2. Practical consequences of summary judgment: changes the identity of the decision maker now decided by a judge and not a jury

3. Relief
possible remedies for from a lawsuit (must state the type of relief you want in the pleading)

a. Three types
i. Legal relief: typically money damages to compensate for a wrong ii. Equitable relief: an order of the court to a party (typically in the form of an injunction) iii. Declaratory relief: court declaring your rights before a the issue becomes a formal case

b. Legal Relief
in the vast majority of cases, damages are the best way to compensate i. Compensatory damages: money awarded to compensate for Plts injuries ii. Punitive damages: used to punish Def for egregious wrongful conduct (rarely used)

c. Equitable Relief
principle form is an injunction (court forcing a person to do something or prohibiting them from doing something); purpose is to remedy a wrong in a situation where money wont suffice; only used in cases where there is an ongoing relationship between actors i. Lawson v. Avnet: Plt seeking appellate court review of district courts denial of preliminary injunction. Plt said Def was poaching their employees who had specialized training and secrets about Plts business 1. Standards moving party must satisfy: a. They are likely to succeed on the merits of the case so when the trial comes, they are likely to win b. Show evidence of a danger of irreparable harm c. No adequate remedy of law exists like monetary damages wont suffice i. Examples: 1. Measuring the damages very difficult 2. Potential destruction of something tangible that cant be replaced 3. Threat of certain action, like violence ii. In this case: threat of losing employees with specialized training NOT sufficient 1. Plt did not sign these employees to a contract a. Moving party MUST exhaust all other ways to protect themselves before they can get a preliminary injunction 2. After these three standards are met, the court must also balance: a. The harm that the plaintiff will suffer against the harm that the defendant will suffer 3. After balancing, there is another factor to evaluate: public interest a. In this case, court didnt want to limit competition in the marketplace or, more importantly, limit Plts employees from being able to change their jobs and negotiate with all possible employers ii. Rule 65: three types of injunctions 16

1. Temporary restraining order a. Can be issued ex parte (with only one side present) and without notice [the TRO is designed to deal with situations that are true emergencies, so in these situations, it may not be possible to provide notice or have the other party be present] b. Standard for obtaining a TRO is very high i. Person seeking TRO must establish that there is a true/demonstrated emergency that can only be rectified via the issuance of a TRO c. Its effective for 10 days but can be continued by the court upon motion d. In order to obtain a TRO, you have to post a bond that will indemnify the other party in case the TRO is found out to be improperly granted 2. Preliminary injunction a. Only issued after notice and a hearing (both sides must be present) b. Is effective from the date of issuance through the actual trial (can, in effect, be for a very long time) c. Looks to the future the injunction will not be entered if the conduct has been discontinued already d. If the harm can be ameliorated by the posting of a bond, sometimes the court may say that if the Def is willing to post the bond, an injunction may not be necessary e. Requires balancing the impact on the various parties f. It frequently is a big deal in a lawsuit because one of the criterion for an injunction is an assessment of the likelihood that a certain party will prevail at trial (so you get a preview of the judges view on the case) i. So oftentimes after an injunction is granted, the parties will settle after they know the judge is not favorably disposed to a certain sides case ii. Or if the only real issue involved is the ongoing harm, then the injunction itself is the only thing the party wants 3. Permanent injunction a. Ordered as part of the relief after trial (after there has been resolution to a case, one form of relief available is a permanent injunction) b. Can be addressed to all sorts of different matters and is very flexible i. Can be used in cases like school desegregation (forcing states to enact a busing order) ii. Prison reform (forcing a prison to enact some safer/civil policy) c. Language of any injection must be drafted with precision. Party seeking the injunction submits a draft injunction to the court and then the court modifies it. Needs to be specific because the party is ONLY prohibited from the specific acts listed in the injunction d. Violation of an injunction is punished as contempt, but must demonstrate they have violated PRECISELY what the injunction says 4. Relationships between the injunctions: a. You do not need to get a TRO before a preliminary injunction but TROs are often sought before preliminary injunctions for 2 reasons: i. There may truly be an emergency situation in which you need the TRO ii. Because the TRO can sometimes be issued ex parte, the party seeking the TRO has a real advantage in persuading the judge and this helps getting the judge to lean your way 17

5. Situations in which courts are hostile to granting injunctions: a. Injunctions prohibiting publication [prior restraint]: law is hostile to stop publication because of the 1st Amendment people who may be defamed in the publication can sue for damages to rectify the situation b. Injunctions in labor disputes: courts dont want to get involved in strikes because the underlying policy of the National Labor Relations Act is that disagreements between workers and management should be dealt with themselves and the court does not want to weigh-in on the managements side iii. Tension with provisional relief: 1. The wrong in these cases is ongoing and the problem is that any judgment that is made provisionally is necessarily subject to a greater error rate (because you dont have a full trial) so what we have to balance is the likelihood of making a correct decision vs. the emergency circumstances iv. Maxims of equitable relief: 1. The clean hands doctrine: he who comes into equity must enter with clean hands a. If you want the court to invoke its special powers to act in equity, then you yourself must not be blameworthy. Any act of bad faith on the party who is seeking invocation of equity will be rejected 2. Equity aids the vigilant: rights must be asserted promptly in equity. a. There is no statute of limitations in equitable claims; rather, there is a doctrine called the doctrine of laches: it means that if you delay too long in asserting your rights or dont act vigorously to protect your rights, then they will be lost i. If you want to court to issue an injunction against some action that has been going on for a long time (and you put up with it for a while), the court is less likely to invoke equity

d. Declaratory Relief
theres an issue but it hasnt become a formal case i. You ask the judge to declare what your rights are in a given situation ii. Court requires the dispute to be ripe to avoid people coming to the court too frequently to ask for advice on what they should do iii. Common cases: 1. Insurance company asking the court if they have a duty to defend under an insurance policy 2. Patent cases: you own a patent and you think someone is infringing on it. You send them a cease and desist letter but the other company wants to know if their manufacturing is actually infringing on your patent before they continue to manufacture (which increases the damages theyll have to pay if the other side wins) or desist and stop their business

4. Jurisdiction
in order to get a valid judgment from the court three requirements must be met: territorial jurisdiction, notice, and subject-matter jurisdiction

a. Personal Jurisdiction: Territoriality

i. Pennoyer v. Neff: Neff owed his lawyer, Mitchell, unpaid fees. Court in OR (where Mitchell filed the lawsuit) allowed a Plt to serve an absent Def via publication if he owned property in the state. Neff owned property in OR but couldnt be found in OR. He did not 18

show up to court and Mitchell was granted a default judgment. Mitchell then sells Neffs property to Pennoyer to satisfy the judgment. 8 years later, Neff wanted his property back from Pennoyer, claiming Mitchells judgment was invalid because Neff was not personally served in OR (no in personam jurisdiction) and his property was not attached at the beginning of the case (so no in rem jurisdiction) 1. In order to have personal jurisdiction (personam) over a Def, the court must ensure that the Def is personally served with process while actually present in the state. 2. In order to have property jurisdiction (in rem), the court must ensure that the Def owns property in the state and that this property is legally attached before the start of the suit attachment serves as constructive notice to the Def that there is legal action pending 3. In Pennoyer, the Plt had never been served while in state nor had his land been attached. The court never acquired ANY jurisdiction over Plt and thus could not have rendered a valid judgment against him. a. But even if Plts property had been properly attached, the OR court exceeded its property jurisdiction by returning a full judgment against the Def (meaning a judgment not limited by the value of the attached land) i. The court confused the jurisdictional power of property jurisdiction with that of personal jurisdiction. ONLY personal jurisdiction allows a court to fully adjudicate and compensate upon the merits of the action. The recovery of property jurisdiction cases is limited to the absolute value of the attached land. 4. A state can exercise jurisdiction over an out-of-state Def when: a. Defendant is present in the state itself (in personam) by either residing in the state or being in the state when service is given b. Their property is present in the state (in rem): as long as the property is seized at the beginning of a case, then a state can assert their jurisdiction over people who may not live in the state [constructive notice is sufficient in these situations] 5. The Full Faith and Credit Clause says that the states are obligated to give full faith and credit of the judgments of the other states which means that you can take your judgment and go into another state and that new state must give credit to the judgment from the different state and permit you to enforce it BUT the original judgment MUST have been valid for the Clause to be enforced ii. Harris v. Balk: Balk (NC resident) owed Epstein (MD company) money. Harris (NC resident) owed Balk money. While Harris was in MD, Epstein attached Balks debt to Harris and Harris paid Epstein what he owed to Balk to thus pay Balks debt to Epstein. 1. Balk tried to sue Harris in NC for the money he owed him but Harris said hed already paid it to Epstein in the MD case and NC must give full faith and credit to the MD decision. 2. Court held that the MD judgment was valid. Court in MD had jurisdiction because Harris was in MD and was personally served there. Also, the debt had no situs it traveled with the debtor to any state he went to so it could be attached that state 3. This is quasi in rem jurisdiction: property that is attached doesnt have anything to do with the underlying lawsuit its merely a means of asserting jurisdiction over Def a. Also, Harris let Balk know that he had paid Epstein so Balk had notice and could have defended himself b. This decision puts a big strain on lenders because then are then subject to jurisdiction anywhere the debtor goes 19

iii. What ultimately happens in International Shoe is that the Pennoyer/Harris regime gets discarded and the idea of presence as the sole touchstone of assertions of jurisdiction is displaced by the minimum contacts framework. iv. International Shoe v. Washington: WA wanted International Shoe to pay unemployment. International Shoes principal place of business was in MO and they were incorporated in DE. They had no plant, office, or stock of merchandise in WA but they did have 13 salesmen who worked in WA. WA personally served a salesman in WA and sent a copy to the office in MO 1. Court said there WAS jurisdiction and established a new test: a. MINIMUM CONTACTS TEST: in order to have jurisdiction over a Def, the Def has to have minimum contact with that state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. i. In this case: the contacts were continuous and systematic and the activities within WA gave rise to the lawsuit, so there WAS jurisdiction ii. This is a fact-based test: must examine the facts of the case closely Conduct/Activity of the Party in that Jurisdiction Minimu m Contacts Related Continuous & Systematic Jurisdiction never questioned (Principle 1) Sometimes sufficient (Principle 3) Isolated/Occasional Almost always sufficient (Principle 4) Not sufficient for jurisdiction (Principle 2)

Not Related

Relation of Claim to the Activity

v. Shaffer v. Heitner: minimum contact standard is extended to in rem cases 1. Since jurisdiction over property is in essence jurisdiction over a person (because property is owned by a person, all jurisdiction must be asserted under the minimum contract standard of International Shoe

20

2. International Shoe sets the test for in personam and Shaffer sets the test for in rem: BOTH tests are now minimum contacts. Ownership of property by itself is not sufficient to get jurisdiction over the property owner. vi. World-Wide Volkswagen v. Woodson: Plt bought an Audi in NY. While driving through OK, they had a bad accident. They sued the retail dealer from NY where they bought the car (Seaway) and the regional distributor (World-Wide VW) in the District Court of OK for products-liability 1. Seaway and WW entered special appearances [went to DC in OK to contest the jurisdiction] claiming due process violation for OK to have jurisdiction 2. Seaway and WW are incorporated in NY and only distribute cars in NY, CN, and NJ a. Do not do any business (NO CONTACTS) with OK 3. SC ruled that minimum contacts do not exists so no jurisdiction 4. Evaluate 2 factors: a. Foreseeability: whether the Def could anticipate that his activities would subject him to jurisdiction in that state (different from foreseeability in torts) i. Look to the facts of the case b. Purposeful availment: Def himself has to engage in some affirmative conduct directed toward the forum state [action directed by a third party not enough] i. Def here did not sell cars in OK, advertise there, etc 5. BUT: you could argue that people buy Audis because there is a national network that has service centers all over so people who buy those cars do so because they know they can go anywhere and have their warranty honored a. The dealers are benefiting from the nationwide network and purposefully availing themselves of that network (helps them sell cars and make money) vii. Theoretical basis for jurisdiction: 1. Sovereignty: if one state could reach out to another state and have jurisdiction, this violates state sovereignty (constitution has jurisdiction rules to help states keep their authority) 2. Defs liberty interest a. Problem: territorial jurisdiction can be waived by the Def. If sovereignty (and not the Defs interest) was really the issue, courts wouldnt allow Defs to waive this right and take sovereignty away from the state) b. Supreme Court isnt sure which interest underlies jurisdiction i. Many courts seem to be saying that the Defs liberty interest is what ultimately should be taken into account ii. This matters because if there is some notion of limitations on state power incorporated in jurisdictional principles, then ultimately something besides the relationship between the Def and the state might be taken into account to decide if jurisdiction should lie. viii. Jurisdiction is a threshold question: the only question is whether the court can constitutionally decide a case. NOT whether that court is the best place to bring the suit (not a comparative question) ix. Helicopteros Nacionales De Colombia v. Hall: helicopters owned by Def (a Colombian company) crashed in Peru and 4 US citizens (who worked for the TX company that bought helicopters from Def) died. They then filed a wrongful death suit in TX 1. CEO of TX company went to TX one time to negotiate the contract, purchased helicopters, parts, and accessories from at TX company, sent prospective pilots to TX for training and sent management/maintenance personnel to visit TX for training. 21

2. Helicol has never been authorized to do business in TX and never had an agent for service of process within the state. They never performed helicopter operations in TX or sold any products that reached TX, never solicited business in TX, never signed any contract in TX, never had an employee based in TX 3. Court says the Plts lawyer conceded specific jurisdiction (conceded that the activity did not arise out of the contacts in TX) lawyer unartful in his discussion a. This is a big deal because Defs contacts do not seem to be sufficient so it will be hard for Plt to argue general jurisdiction (and they are ultimately unable to) 4. Court held the contacts to be insufficient (not continuous and systematic) a. Must be more contacts than the CEO visits the state, the helicopter is bought there, the training was there, the checks were cashed there x. Burger King v. Rudzewicz: Plt BK Corporate from FL had a contract with Def franchise from MI. Def defaulted on his rent due to Plt and Pltsued him in the DC of FL, under FLs long-arm statute 1. Every state has a statute that authorizes its courts to issue territorial jurisdiction and each state decides the basis for that jurisdiction a. In long-arm statutes, the basis allows for ANY jurisdiction that is not in conflict with due process b. For there to be territorial jurisdiction, there are two steps: i. First: there must be a jurisdictional statute that authorizes an assertion of jurisdiction over a Def in a particular case ii. Then: based on the particular facts, the authorization must be constitution (allowed for under due process) 2. Plt alleged that because he was a MI resident and the claim did not arise within FL, the FL DC lacked personal jurisdiction over him 3. FLs long-arm statute extends jurisdiction to any person, FL resident or not, who breaches a contract in FL 4. Supreme Court held that because Plt established a substantial and continuing relationship with BKs FL headquarters, received fair notice from the contract documents and the course of the dealing that he might be subject to suit in FL, and has failed to demonstrate how jurisdiction in that forum would be unfair, thus, the DC has jurisdiction. 5. It is much easier to prove purposeful availment in contract cases actor deliberately chooses to enter into a contract 6. After minimum contacts are established, additional factors to consider to decide jurisdiction: a. Whether jurisdiction offends the notion of fair play and substantial justice. Factors to consider: i. Burden on the Def ii. The forum states interest in adjudicating the dispute iii. The Plts interest in obtaining convenient and effective relief iv. The interest of the interstate judicial system in efficient resolution of controversies v. The shared interest of the states in furthering fundamental substantive social policies b. This is BY FAR the less important element of the test: if there are minimum contacts, there are only rare instances when these factors will overrule 22

7. Look to the NATURE of the relationship (just because there is a contract does not mean there is automatically jurisdiction) 8. This case involved two companies who had more equal bargaining power and were financially sophisticated when they entered into the contract. a. Consumers who sign contacts are treated differently xi. Asahi v. Metal Industry Co. v. Superior Court: Zurcher injured in CA on a mortorcyle with a faulty tube manufactured by Cheng Shin (Taiwanese). Asahi (Japanese) manufactured part of the faulty tube and sold it to Cheng Shin. Cheng Shin sought indemnity from Asahi in the CA courts (Cheng Shin had lost to Zurcher and paid him damages in CA). 1. CAs long-arm statute authorizes jurisdiction on any basis not inconsistent with the Constitution of CA or the US 2. Plurality says there is no territorial jurisdiction a. Majority agrees there are minimum contacts i. Majority says minimum contacts exist when Def put the produce into the stream of commerce, meaning there is a substantial connection between the Def and the forum state that comes about by an action of the Def purposefully directed toward the forum state (ie designing the product for the market in the forum state, advertising in the forum state, establishing channels for providing regular advice to customers in the forum state, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum state) b. But the second prong (fairness and substantial justice) outweighs the minimum contacts i. Burden on the Def was severe (Asahi must defend itself in a foreign legal system) ii. Interests of CA are slight (as long as the applicants are subject to CA law, their interests are served) iii. Interests of the plaintiff (Cheng Shin) are slight xii. Burnham v. Superior Court of CA: Burnham was in CA visiting his children (he was from NJ, going through a divorce, and his ex moved the kids to CA) and while he was there, he was personally served with the divorce petition. 1. Court reiterated that the minimum contacts test is only used to deal with Defs who are not physically present in the state. 2. Since Burnham was in CA and personally served while in that jurisdiction (even though he was only there temporarily) he was subject to jurisdiction there a. Tag jurisdiction is allowed i. Exceptions: 1. Fraudulently induced to enter jurisdiction, than service will be struck down 2. Forced into the jurisdiction, than service will be struck down xiii. Bensusan Restaurant Corp v. King: The Blue Note famous jazz club in NYC sued The Blue Note in Columbia, MI in the Federal DC of NY. 1. Court ruled that Federal courts jurisdiction is determined by the statute of the state in which they are located [NO jurisdictional rules for Federal Courts they take their jurisdiction from the state rules] xiv. CURRENT JURISDICTIONAL TEST: 1. Is there a jurisdictional statute that authorizes jurisdiction over the Def? 2. Is the jurisdiction allowed for under the statute allowed for under due process (i.e. constitutional)? 3. Do minimum contacts exist? 23

a. Are the contacts continuous and systematic? [general jurisdiction] b. Did the lawsuit arise from the contacts? [specific jurisdiction] c. Was it foreseeable to the Def that they would have to adjudicate their case in that forum? d. Did they purposefully avail themselves of the forum state? 4. Is jurisdiction reasonable (i.e. does not offend traditional notions of fair play and substantial justice)? a. Factors to weigh: i. Burden on the Def ii. The forum states interest in adjudicating the dispute iii. The Plts interest in obtaining convenient and effective relief iv. The interest of the interstate judicial system in efficient resolution of controversies v. The shared interest of the states in furthering fundamental substantive social policies ***do a qualitative analysis to see if the reasonableness factors are significant enough to disallow jurisdiction (but minimum contacts weights much more heavily than reasonableness often once there are minimum contacts, jurisdiction is allowable xv. Internet Jurisdiction: most courts distinguish between active and passive websites: 1. Passive: you display info but there is no transaction with the reader a. There is only jurisdiction where you live, posted the info etc. 2. Active: the person interacts with the website a. There is a chance you will be subject to jurisdiction wherever the client is who interacted with you/the website 3. But then you analyze internet jurisdiction under the traditional framework 4. Panavision v. Toeppen: Def in IL registered domain names of companies and then tried to sell them to the companies to extort money. Def registered a domain name of Plt company from CA. Court said CA had jurisdiction because Defs acts were aimed at the company in CA and the company suffered injury in CA xvi. Forum-Selection Clauses 1. Carnival Cruise v. Shutes: WA couple buy cruise tickets from a travel agent in WA on Carnival (FL company) a. Forum-selection clause said all disputes adjudicated in FL b. First time Plts are able to find out about the forum-selection clause is after they pay for the tickets and get them in the mail c. Plt hurt on the cruise and files suit in WA d. SC held that the forum-selection clause was enforceable because: i. Cruise line has a special interest in limiting the fora in which it could be subject to suits ii. Clause has the salutary effect of dispelling any confusion as o where the suite will arise iii. It stands to reason that passengers who purchase tickets containing a forum clause like the one in this case benefit in the reduced fares reflecting the savings that the cruise line enjoys by limiting the fora in which it may be sued e. Look to the reasonableness of the clause itself (not whether it is reasonable under the circumstances because of negotiating power etc) f. Bottom-line rule: forum-selection clauses ARE enforceable in most instances. If you are contesting its enforceability, you have to make a specific 24

demonstration of why it should be deemed unenforceable in a particular situation.

b. Personal Jurisdiction: Notice

i. If you dont have notice, it violated due process ii. Principle underlying idea of notice: people cant be expected to protect their rights if they arent notified of what has transpired. Our legal system is based on adversarial parties expressing their competing interests. iii. But is there flexibility in the due process clause based on circumstances/context with regards to notice? YES iv. Mullane v. Central Hanover Bank and Trust: case arose out of an action for settlement of accounts of a large consolidated trust (many small out-of-state beneficiaries) 1. This is important to the beneficiaries because once the settlement of accounts is concluded, there can be no subsequent challenges of what the trustee did (i.e. mismanagement) 2. How do you deal with notice when the beneficiaries are numerous and spread geographically? 3. Court held that published notice is constitutional for unknown beneficiaries but unconstitutional for known beneficiaries a. Due process notice is not absolute, circumstances dictate the type of notice required b. In this case, its ok if not all beneficiaries receive notice because the action that any one beneficiary takes to challenge a trustees actions will be for the benefit of all other beneficiaries they all have the same interest 4. TEST: notice must be reasonably certain to inform those effected but where conditions dont allow for that, the notice must not be substantially less likely to provide actual notice than other possibilities v. Fuentes v. Shevin: Plt purchased goods from Def under contract (Def maintained title until she made all her payments). A dispute arose about the service plan and Plt stopped making payments. Def filed a suit for payment and at the same time obtained a writ of replevin and sheriff took the goods. 1. Plts first notice was when sheriff came to her house to take the stuff 2. In this case, the Court explains what the vague due process clause means in real life: a. Court said due process protects any significant property interest and protects against unfair deprivation of property i. By making payments, Plt has a property interest (even though goods are still technically owned by Def) b. Due process entitles Plt to a pre-deprivation hearing i. Even temporary, nonfinal deprivation of a possessory interest is a due process violation ii. No later hearing and no damage award can undo the fact that the arbitrary taking has already occurred vi. Mitchell v. Grant: involved a statute similar to the one in Fuentes, except writ had to be issued by a judge and was accompanied by an affidavit. Court found no due process violation. vii. Connecticut v. Doehr: 1. Plt tried to attach Defs home in conjunction with a civil action for assault/battery. Suit did not involve Defs home 25

a. Court said theres nothing to show Def would not be able to satisfy the judgment and attachment was not used to confer jurisdiction b. Plt was only attaching the property to have leverage against the Def (since a substantial amount of his assets are being held via the attachment and this will encourage him to settle) 2. Def filed suit against Plt claiming that the states attachment law was unconstitutional under due process (filed in Federal Court because the state court will be more inclined to sustain the constitutionality of their state statute than the federal court) 3. Court uses the Mathews test to invalidate the attachment: a. Mathews Test: to use when an individual is depriving another individual of property: i. Consideration of the private interest that will be affected by the prejudgment measure 1. IN THIS CASE, Court says: the property interest of the Def are substantial because his house is his principle asset and by attaching his property (through a lien), it clouds the title: meaning his ability to alienate the property (sell it, get a loan against it, etc) is now limited a. Clouding of title is a significant interest in and of itself ii. An examination of the risk of erroneous deprivation through the procedure and the probable value of additional or alternative safeguards 1. IN THIS CASE, Court says: risk of erroneous deprivation is substantial in this case because of the nature of the original suit (an civil case on assault) has NO documented evidence (like in Fuentes, there was evidence of a contract because it was a commercial dealing and there was evidence of whether she made the payments or not) iii. Principal attention to the interest of the party seeking the prejudgment remedy, with due regard for any ancillary interest the government may have in providing the procedure or forgoing the added burden of providing greater protections 1. IN THIS CASE, Court says: the interests to the Plt are minimal there is no pre-existing interest in the real estate, the only reason he attached the property was to satisfy the judgment (although theres no showing that the judgment wont be satisfied) 4. The main difference between the Mathews test and the Fuentes test is that the Mathews test takes into consideration BOTH parties interests (in Mathews, now you take into account the Plts interests even though due process only seems to mention the interests of the Def) viii. Dusenbery v. US: Plt was in prison on drug charges and FBI was going to get rid of property theyd seized from him when they arrested him. FBI sent written notice of seizure to him in prison, the address of the residence where he was arrested, and to an address in the town where his mother lived. They got no response so they declared the items foreclosed. 1. Court said notice was sufficient. Use the Mullane test (old test): a. FBIs notice was calculated to inform Plt and reasonably certain to inform him. 26

i. Only required to attempt to provide notice, not actually provide notice ii. Due process does not require heroic efforts to ensure notice ix. Due Process notice can be analyzed under any of three tests (and its unclear what the actual requirements are for seizure): Mullane, Fuentes, and Mathews 1. Most likely, if a writ is issued by a judge upon a particularized factual showing via an affidavit AND there is some emergency, the Court may/will probably do away with a pre-seizure hearing

c. Federal Subject Matter Jurisdiction

authority of a court to adjudicate a particular type of case i. Federal courts are court of limited jurisdiction. Limitations of federal jurisdiction established by 2 sources: 1. Article 3 of the Constitution (Pg. 514 of soft book): will be 1 supreme court & other federal courts (as needed). Federal jurisdiction extends to 5 principle categories: a. Cases arising under the constitution, laws and treaties of the US (this is Federal Question Jurisdiction) b. Cases effecting ministers and ambassadors (not a big area of litigation) c. Admiralty and maritime jurisdiction d. Where the US is a party (substantial number of cases under this) e. Diversity jurisdiction (where parties are citizens of different states) 2. Specific Congressional statute a. Case must BOTH fall within the scope of article 3 AND be within the jurisdiction of the specific congressional statute b. Because of its limited nature: i. The parties cannot agree that they want their case in federal court it has to be constitutionally authorized ii. Federal jurisdiction cannot be waived by the Def (territorial jurisdiction can be waived by the Def) iii. A defect in subject matter jurisdiction can be raised at ANY TIME (even after a complete trial and at appeal, for the first time, one party questions subject matter jurisdiction) c. In most instances, federal courts and state courts have concurrent jurisdiction on claims brought under Federal law (can file in either federal or state court, even if your claim is based on federal law) d. Federal courts have exclusive jurisdiction in: i. Copyright claims ii. Bankruptcy iii. Some others e. Most important types of federal jurisdiction (in order of importance): i. Federal question jurisdiction ii. Diversity jurisdiction iii. Supplemental jurisdiction ii. Federal Question Jurisdiction: when a case arises under federal law (either the Constitution, Federal statute, or Federal decisional law) 1. Justification: the federal judiciary should have authority to decide cases dealing with federal law 2. Main difficulty: determining when a case arises under federal law as opposed to being a case where federal legal issues are involved 27

3. RULE: well-pleaded complaint rule: the Federal claim must appear on the face of the complaint (federal question must appear in the Plts pleading). a. If Plt doesnt want case to be held in federal court, the she doesnt have to plead the federal issues in her case b. Even if the federal rule is dispositive, it still must be pleaded on the face of the claim or no federal question jurisdiction c. Issues raised by the or defenses anticipated in the complaint do not bring it under federal subject matter jurisdiction iii. Diversity Jurisdiction: historic rationale is to avoid prejudice to out-of-state litigants 1. 1332: a. Enacted by Congress to confer jurisdiction. Congress does not allow the full Constitutional limit of jurisdiction b. Requires complete diversity between parties: i. All the Plts have to be citizens from different states than ALL the Defs 1. This is NOT constitutionally mandated, its from 1332 (the congressional implementing statute) that requires it ii. Confers jurisdiction between citizens of different states OR citizens of a state and citizen of a foreign state (as long as the amount in controversy is exceeded) 2. Rules: 1. The burden of pleading citizenship for purposes of diversity jurisdiction is on the party claiming/seeking to invoke diversity a. Citizenship must be affirmatively alleged in the complaint (actually plead it) b. If the existence of diversity jurisdiction is challenged, the burden is on the party seeking to invoke it 2. The citizenship of parties for diversity purposes is determined as of the time of the filing of the lawsuit ONLY a. Diversity is not impaired by a later change of domicile (even if the parties change domicile later on, it doesnt matter) b. Diversity jurisdiction cant be conferred by a later change in domicile (if the parties move and then are diverse, they cant claim diversity) 3. Diversity jurisdiction must be complete: there is no diversity where any party on one side is a citizen of the same state as any party on the other side 4. Rules of citizenship for diversity: a. For a natural person (all persons): domicile plus being a US citizen i. The person is a citizen of the state where domiciled as long as the person is a US citizen 1. What is domiciled? Domicile means a persons permanent home and where they intend to return after being absent. You can have only one domicile at a time 2. Someones domicile can remain the same for a long time, even if they are absent from the domicile (from Mas, she was a student and left her home, traveled to IL etc but until a new domicile is established, a domicile remains your permanent place of residence) 3. A US citizen not domiciled in a state cannot invoke diversity jurisdiction (like if you live abroad) 28

b. Aliens (non-US citizens): aliens are citizens of their country of citizenship unless they are a permanent resident alien and then they are a citizen of the state of domicile i. 1332 allows for federal jurisdiction between a state and an alien but there is NOT jurisdiction over two aliens c. Corporations: for purposes of citizenship, a corporation is a citizen both of the state of incorporation and its principle place of business i. It can only have 1 principle place of business. There are two tests used to assess where the principle place of business is located: 1. Locus of major production (activities): where they conduct most of their business 2. Nerve-center test: where the corporate headquarters is ii. Most courts look to the locus of major production d. Foreign corporation: is a citizen only of the nation of incorporation (even if its principle place of business is in the US) 5. Amount in controversy: the current minimum is $75K [minimum only applies for diversity cases]. The following rules apply in calculating whether the amount is sufficient: a. If the case involves one Plt against one Def, all the claims the Plt has against the Def can be aggregated, even if they are not related to each other b. In case with multiple Plts against one Def, no aggregation is allowed UNLESS there is a common undivided interest that is being sued upon (like 2 partners suing on the same debt) c. One Plt against multiple Defs: the Plts claim against each Def must be sufficient to satisfy the jurisdictional threshold i. Cannot aggregate the amounts against the multiple Defs 3. Mas v. Perry: Mr. Mas was a citizen of France, married Mrs. Mas, citizen of MS. Lived together in LA while going to school and Def landlord from LA spied on them. Federal jury returned a verdict of $5K for Mr. Mas and $15K for Mrs. Mas a. Def claimed no diversity and insufficient amount in controversy for Mr. Mas claim b. Court said Federal court did have subject matter jurisdiction i. Mrs. Mas was domiciled in MS (only in LA temporarily for school) ii. Mr. Mas was domiciled in France iii. Amount in contention is determined by amount CLAIMED by Plt (in good faith), not what he was actually awarded iv. Supplemental Jurisdiction: applies to the situation where a federal court has jurisdiction over a claim and a Plt has a related state law as to which the federal court would not have jurisdiction over that claim if evaluated independently 1. Based on the Constitution and on statute a. Constitutional test: the two cases have to arise out of a common nucleus of operative facts: have to relate out of the same transactions b. Statute: 1367: distinguishes between claims where courts initial jurisdiction was based on federal question or diversity i. 1367(a): RE: federal question jurisdiction ( 1331) 1. Where jurisdiction is based on a federal question, can have supplemental jurisdiction over related claims, even when the parties are not diverse ii. 1367(b): RE: diversity jurisdiction ( 1332) 29

1. If jurisdiction based on diversity, must have complete diversity to have jurisdiction 2. If a new party is not diverse, than no diversity jurisdiction v. Removal: only state court actions that originally could have been filed in federal court may be removed to federal court by the Def 1. Without diversity of citizenship, federal question jurisdiction is required: a. Well-pleaded complaint rule still applies (unless removal is based on diversity) b. If Plt did not plead the federal claim originally, then the case cannot be removed to federal court

5. Venue
where within the court system a case should take place (has NOTHING to do with the courts power to hear a case, just which place is appropriate) a. Dictated by statute (NOT constitutionally mandated) i. There are both federal and state venue statutes b. Four venue topics: i. Venue rules 1. 1391 lays out the rules: although there are still nominal differences between sections (a) and (b), they operate identically a. Venue lies where any Def resides (as long as all Defs reside in the same state) b. Venue lies where a substantial part of the events giving rise to the claim occurred c. Venue lies based on a fall-back provision: if the first two arent available, venue lies where the Defs are subject to personal jurisdiction i. So when can you provoke the fall-back provision? 1. When the Defs live in multiple states 2. When the event occurs abroad a. You can only use the fall-back in these two instances ii. Where is venue in removed actions? 1. The only proper venue is the DC that encompasses the location of the state court the case was originally in iii. Where is the venue for a corporation? 1. Any judicial district where the corporation is subject to in personam jurisdiction a. Venue test is collapsed with the territorial jurisdiction test for corporations b. BIG CAVEAT: the test for corporate citizenship under diversity 1332 and corporate residence for venue purposes ARE DIFFERENT i. A corporation is a citizen for purposes of analyzing diversity in the state where its incorporated or its principle place of business ii. For venue, though, a corporation can be sued wherever its subject to territorial jurisdiction iii. Tests are different for corporate diversity and corporate venue 30

iv. Two exceptions: 1. A forum selection clause in a contract is generally enforced 2. The local-action rule: actions relating to real estate have to be brought where the real property is located ii. Options available when venue is improper: 1. Two options: a. A motion to dismiss under 12(b)(3) for improper venue: i. Subject to the same requirements 1. Must be made prior to answering or must be asserted as a prior defense or its waived b. Motion to transfer venue: i. Can be made at any time but the odds of persuading the judge to transfer the case is better the earlier you file 2. Venue need not be specifically alleged under Rule 8 3. If venue becomes an issue in the case, the burden to establish proper venue, the party initiating the lawsuit bears the burden on the issue iii. Options when the venue chosen is initially proper but another forum is significantly better: 1. Historically, the courts deal with this problem with a doctrine called forum non conveniens: to dismiss cases where the venue chosen, although proper, was inconvenient. A prerequisite to forum non conveniens was that there is another forums where the action could be maintained a. In 1948, Congress enacted 1404 and 1406: established that if the alternative forum (more convenient forum) is another federal district court, then transfer is possible (case doesnt have to be dismissed and refiled and this helps with statute of limitations problems) b. Only real instance where forum non conveniens is invoked is if the forum is another country 2. Two principle venue transfer statutes: a. 1404: presupposes that venue is proper in the venue initially selected. Allows for a change of venue for convenience when a change in forum is in the interest of justice (transfer, rather than dismissal) i. Four factors the court looks to whether to grant a transfer: 1. Plts choice of forum: especially if theres no compelling interest to move the case 2. Convenience of the witnesses: whether the court can compel their attendance at trial. If a certain witness can only be compelled in a different forum, then that makes transfer very likely most important consideration 3. Convenience of the parties: not clear how important this is. Courts address this but its clearly less important than convenience of the witnesses 4. Interest of justice: catch-all; avoid multiplicity of litigation etc b. 1406: If venue is improper (the forum the Plt initially picked was not appropriate) you can still have a transfer but now it takes place under 1406 rather than 1404; can be to any district where the action could have been brought, meaning that territorial jurisdiction AND venue are proper in that district i. This applies even if the Def does not object to the transfer 31

ii. Plt in IA, Def in IL, suit filed in IN where venue was inappropriate in the first place. Under 1406, Plt moves to transfer the action to FL (which isnt a proper venue either but the Def doesnt object). Action STILL cannot be transferred to FL because neither venue or territorial jurisdiction are proper in FL [Def can originally waive venue as improper (i.e. he waived the improper IN venue), but then once its transferred, then venue can no longer be waived] 1. This is the rule on transfer even though venue is a waivable objection. Even though the Def could have let the suit stay in IN, when the transfer is sought, the Defs consent to the transfer is not enough to allow the action to be transferred there c. 1407: just alerting us to another venue statute: multi-litigation transfer statute, all cases can be transferred to one district to deal with all the cases 3. Burden on the motion to transfer is on the party moving for transfer iv. What law applies when actions are transferred to a different venue: assuming that an action has been transferred, the remaining complication is what law applies to the transferred action. 1. Background: the starting point for deciding what law applies is the SC case Klaxon v. Stentor: Court decided what choice of law rule does a federal DC apply when its sitting in diversity. Klaxon held that the federal DC applies the choice of law rule of the state in which it sits application of the choice of law rule doesnt necessarily mean that states substantive law will apply (there is a distinction between choice of law and the substantive law that will apply). a. Example: a product is purchased by a NYer while on vacation in FL. Product is manufactured in CA but the company is from DE. Product explodes while the Plt is in VA and the lawsuit is filed in VA. i. Under VAs choice of law rule, what substantive law in that setting will VA apply to resolve the case? You have to look to VAs choice of law rule. 1. Different issues in the case can be governed by different states substantive law 2. Whatever the outcome would be under the states choice of law rule, the federal DC must do the same thing 2. If theres no transfer, how do we decide what states law applies? The choice of law rule may or may not dictate the application of that states law. What is duplicated is the CHOICE OF LAW RULE, not necessarily that states substantive law a. In Ferens, under MSs choice of law rule, MSs statute of limitations is applied but PAs law is applied to the substantive questions of the case 3. What about when there is a transfer? a. Starting point is the SCs decision in Van Dusen: following a transfer under 1404, when the Def initiates a transfer, there is a change of courtrooms but NOT a change of law i. Theres a transfer to CA from an original MA case. The CA DC must apply the MA state choice of law rule. b. Ferens differs from Van Dusen because Plt files in MS but then wants to transfer to PA. The question is, what choice of law rule applies? The SC holds that Van Dusen is controlling because it doesnt matter if the Def or the Plt requests the transfer the original states choice of law rules still apply i. Ferens is more troubling than Van Dusen because it seems sleazy for the Plt to not file in PA in the first place if he was allowed to 32

1. But the Plt did this because their statute of limitations ran out in PA and did not run out in MS. They filed in MS originally and then grabbed the MS statute of limitations and brought it back to PA so they could make their claim 2. The Court says this is ok because if the case isnt allowed to be transferred from MS to PA, the case will continue still in MI and then itll waste the courts time and will be inconvenient for everyone because theyll be litigating in two states a. And the Court is saying that the Def will likely move for transfer to PA anyway and this will be allowable under Van Dusen ii. So does it follow that in any transfer situation, the transferor courts choice of law rule will apply/govern? NO the initial forum has to be proper (i.e. has to have territorial jurisdiction and proper venue) 1. Transferor courts choice of law applies assuming that territorial jurisdiction and venue are proper in the transferor court a. If either venue or territorial jurisdiction are improper, that means the lawsuit could not have been filed thee in the first place and you can't capture their choice of law review

6. Erie Problem
once its determined a federal court has subject matter jurisdiction, next question is what law should be used, federal or state. This ONLY applies in diversity cases because if theres federal question jurisdiction, clearly federal law applies

a. Rules of Decision Act

the laws of the several states, except where the constitution, treaties, or statutes of the US shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the US in cases where they apply. i. Question is whether this Act includes state common law as well as state statutory law

b. Swift v. Tyson
In Swift v. Tyson, Court held that state court decisions did not constitute law and federal courts were not obligated to apply state court decisions (although they did have to apply state statutory law) i. Federal courts began to view their role as creating/developing a comprehensive body of law (general law) as a model for the states

c. Problems developed
i. Federal court-made general law did not bring about the desired uniformity of understanding or create a model for states because: 1. Remained hodgepodge and not comprehensive 2. Swift did not obligate states to follow general law (just hoped that they would do so) so many state courts did not follow federal general law 3. Federal courts often looked to the state law of the state in which they sat to decide what the general law should be ii. Main problem: racially different outcomes depending on whether your case was decided in federal court or state court 33

1. Some Plts (Black and White Taxicab case) purposely incorporated in a different state so they could be diverse and take advantage of the federal courts law [since they would have lost their case in state court]

d. Federal Rules of Civil Procedure Adopted

1938, Swift was attacked and there were BIG changes in civil procedure: i. Federal Rules adopted first uniform procedural rules for federal courts ii. Erie is decided: returns to the states a power the federal government had been using improperly since Swift

e. Erie Railroad Co. v. Tompkins

i. Plt, a PA citizen, gets injured by Eries train while walking near the tracks. Def is a NY corporation. 1. Plt argues that he was a licensee while walking there because it was a commonly used path near the tracks 2. Def argues that Plt was a trespasser 3. Plt brings case in federal court in NY 4. Plt argues that since there was no statute in NY state law on this exact topic (although there was state common law), Defs duty/liability should be governed by general law of the federal courts 5. Def argues that PA common law should be used ii. Court says state law should govern. iii. Brandeis gave 3 reasons to overrule Swift: 1. Lack of vertical uniformity a. If you filed in federal court and not state court, you got a very different result b. Led to gamesmanship like Taxicab c. Inequitable administration of the laws 2. Research showed that Holmes misinterpreted the Rules of Decision Act in Swift by confusing the meaning of the statute drafters intended to include judge-made common law as well as statutory law 3. Its unconstitutional: Brandeis doesnt really explain why a. Probably because Supreme Court had failed to include state decisional law as part of the wording of the Rules of Decision Act b. Or maybe because federal courts dont have the power to make law iv. Main point: federal courts DO NOT have the power to make general law. When they sit in diversity, the law of the STATE controls. No more general law: if law is not federal, its state

f. Principle problem after Erie

does the Rules of Decision Act apply to procedural law or just substantive law? i. Prior to 1938 when Federal Rules were enacted, federal court procedure was based on Conformity Act, which said federal courts were to use the procedure of state in which they sat (except equity cases where Congress had already adopted separate federal procedural rules) ii. Since Federal Rules and Erie happened at the same time, this seemed to suggest that federal courts sitting in diversity should apply state substantive law and federal procedural law based on the Federal Rules (this seemed straightforward but courts didnt follow this) 34

g. Guaranty Trust v. York (1945)

i. Plt filed a diversity suit in equity in the NY federal district court for fraud. Def said statute of limitations had run, using NY state statute of limitations. Plt said that federal courts procedural law of laches (more flexible, used in equity cases, case only barred if time period is so long that it creates a potential disadvantage for the Def) should be used 1. If you apply state statute of limitations, then the claim is barred. If you apply federal laches, the claim goes forward ii. Erie did not determine what to do in equity cases iii. Court held that federal courts MUST rely on state law (even for equity cases) 1. Reasoning: a. Use outcome determinative test: want to get same result if your case is heard in federal or state court i. Vertical uniformity ii. Want to duplicate results 2. If failure to adhere to state law by the federal court will lead to a different outcome if the matter was resolved by state court, then you HAVE to take the state law, no matter if the issue is substantive or procedural iv. Problem with outcome determinative test: seems like anything is potentially outcome determinative 1. And if all diversity cases only use state law, then Federal Rules are completely irrelevant 2. Federalism problem: Guaranty Trust swung the pendulum too far and gives states too much power 3. Federal courts exist by right given to them in the Constitution and they have more of a role than just duplicating state decisions

h. Byrd v. Blue Ridge Rural Electric Cooperative

i. Plt sued Def and Def offered an immunity defense. Under state procedure, a judge decides the factual issues related to a defense and federal procedure says they should be decided by a jury [questions at issue seem to be simple enough for a jury to resolve] 1. Said to use the federal rules now 2. TEST: balance the state AND the federal interests a. No longer concerned with just duplicating results 3. Reevaluate outcome determinative test: a. Balancing both federal and state interests works better: i. There is only a weak state interest to have these questions resolved by a judge ii. Strong federal interest (commanded in the 7th Amendment) to have case decided by a jury b. Power of the federal courts is created by the constitution and they are allowed to govern their own procedures

i. Hanna v. Plumer
MA law required the executor of the estate to be personally served while Rule 4 says you can serve someone of suitable age/discretion at the persons residence i. Service was left at the home of the executor (not personally served) so under MA law, the service was invalid 1. Statute of limitations had run so if MA law was applied, case was over 2. VERY outcome determinative choice but Court still said the Federal Rules apply (overrules Guaranty Trust) because: 35

a. Rules Enabling Act gave the Supreme Court the power to make rules to govern federal proceedings b. No concern about forum-shopping because Plt wouldnt pick a forum based on rules of service 3. NEW TEST: If a federal rule is on point, you MUST apply it (based on the Rules Enabling Act) unless it goes beyond the scope of the Rules Enabling Act or goes beyond the constitution a. Limitations to Rules Enabling Act: rules cannot abridge, enlarge, or modify substantive law (purpose is so federal courts cant create substantive law and interfere with substantive law created by the states) b. Rare that a Federal Rule would go beyond the constitution because Congress, the Supreme Court, and the Advisory Committee all passed on the rules but we still must discuss this point in our analysis 4. Federal rules are virtually inviolate when there is a direct conflict between state and federal law, federal law is implicated presumptively (because its unlikely that its unconstitutional or beyond the Rules Enabling Act) 5. Harlans concurrence [Greenberger likes this modified test]: a. Modified test: whether the choice of law rule would substantially affect decisions regarding human conduct which the constitution leaves to state regulation i. Erie was about respecting state law-making prerogatives 1. When federal rules affect state business, this is contrary to the Constitution ii. Cant just call something procedural and then federal rules automatically apply, no matter how much it abridges iii. Dangerous to say Federal Rules are inviolate

j. Walker v. Armco Steel Corp

OK law doesnt deem an action commenced until Def is served. Rule 3 says an action is commenced by filing the complaint. Plts complaint was filed within the statute of limitations but Def was not served until after. i. VERY outcome determinative: if you use state law, case is over. If you use federal, case goes forward. ii. Court says state law applies because there is only an indirect conflict (as opposed to a direct conflict) between the state and the federal rules on this topic (confusing standard) 1. Seems like direct/indirect distinction is about whether the state and federal laws could be applied at the same time. If yes, then indirect; if no, then direct.

k. Burlington v. Woods
AL statute requires 10% penalty to any appellant who obtained a stay (in paying damages until after the appeal) who then loses the appeal (to punish frivolous appeals). Federal law doesnt mandate this penalty. i. Court said this was a direct conflict ii. Rule 38 has plenary discretion to award damages 1. This shows Walker is an outlier

l. Stewart v. Richo
contract had a forum-selection clause that said all actions would be in Manhattan. Plt filed in AL federal court and Def tried to move the case to Manhattan, pursuant to the forum-selection clause. 36

Plt said AL law controlled and forum-selection clause shouldnt be valid (since AL state law disfavored forum-selection clauses) i. Court said there was a Federal rule on the issue of transfers and that this rule governs ii. State DID have a valid interest in voiding forum-selection clauses if they do not like them (this seems like a substantive issue!) but this does not get taken into account [although Harlans Hanna concurrence rule would have] m. The TEST for Erie problems: i. First ask yourself is there a federal rule or statute on point. Is there one that is potential applicable? ii. If the answer is yes, then you ask yourself does the federal rule or statute violate the rules enabling act or constitutional (almost a nonissue) iii. If the answer is no, then you apply the Federal Rule or statute (assuming that there is a direct collision and again, most of the time, if the federal rule is on point, there is going to be a direct collision) 1. Walker is the only case where there is an indirect collision iv. What if the collision is indirect or there is no federal rule or statute on point? Look to Hanna as it modifies Erie: is there a problem in light of the twin-aims of Erie (avoid inequitable admin of the laws and get rid of forum shopping). In addition, Byrd is never overruled so if you have a situation where there is no federal rule on point, you also want to undertake a Byrd balancing analysis: Identify interest on both sides and compare their importance on problems

7. Discovery
usually proceeds without the intervention of the court.

a. Important functions
i. MOST IMPORTANT: Allows parties to obtain info that will lead to the discovery of admissible evidence. This is a very broad standard and hence the scope of discovery is very broad 1. The evidence you seek doesnt have to be admissible in evidence. It only needs to be reasonably calculated to LEAD to admissible evidence. ii. Discovery also allows the parties to identify which issues are actually in controversy narrow the scope of what the lawsuit is all about 1. This has the ancillary benefit of facilitating settlement because parties get a more realistic view of how strong their case is iii. Discovery allows for the preservation of info that might not be available later, particularly for witness depositions. If you get the deposition and the witness is not available at trial, you can use the deposition.

b. Rule 26: Scope of Discovery

i. (b)(1): any matter that is relevant to a claim or defense of either party 1. Relevance has been interpreted broadly by courts ii. Default is that materials should be produced 1. If discovery is resisted, burden is on the objecting party

c. Rule 26: Operation of Discovery

i. First: under Rule 26(f), as soon as practical, parties must meet/confer to discuss the case to develop a discovery plan 1. Discovery plan is presented to the court for its approval 2. Discovery plan is supposed to address LOOK IN RULE 26 37

3. 26(d) no discovery can be initiated until the discovery plan is done ii. Second: Rule 26(a) says parties must make initial disclosure of certain things within 14 days of the discovery conference. This is a HUGE change from prior practice because there used to not be mandatory disclosure. 1. Four categories of disclosure: a. Names of persons with info about your claims/defenses b. Copies or description of docs that may be used to support your claims/defenses i. Disclosure without request from the other side c. Plt has to provide a damage computation set out what it is that it is claiming by way of damages i. In some respects, the third category is often the most important because it forces the Plt at the outset of the lawsuit to focus carefully on exactly what it is the Plt is claiming and can be reasonably expected to receive at the close of the lawsuit 1. Plts lawyers tend to focus more on liability and pay insufficient attention to damages a. Inserts a degree of reality about how much the case is actually worth d. Def has to disclose any insurance agreements that may provide coverage in the situation iii. Per 26(e), parties must supplement the initial disclosures throughout the case even without request from the other side. If they learn that info previously provided is no longer correct or incomplete, they have to tell the other side. This is a big change because there used to not be a duty of supplementing your responses if there was a change 1. If you dont honor this duty, the court might exclude some of your evidence

d. Formal Discovery Devices

i. 5 formal discovery devices that are outlined in the Rules: 1. Oral deposition: allowed for under Rule 30. What happens in a deposition is you give notice to the person you want to depose. a. There are 2 ways to do it: i. You can serve notice under Rule 30 if its upon a party or employee/agent of the party. It gets served on the lawyer 1. Parties will often agree on dates prior to the service of notice ii. If you want to depose a nonparty, you have to serve them with a subpoena instead b. Court reporter takes down everything that is said by everyone verbatim i. In addition, if you want, you can have a videographer there c. Each sides lawyer is present and can ask whatever they want i. If the party for the deponent thinks a question is objectionable, he can object ii. But the rule in a deposition is that you have to answer the question unless it calls for the revelation of privileged matter. The objection is for the record in case it comes up later d. At end of deposition, the transcript is sent back to the deponent. Deponent can make changes in the transcript if she wants to and then the other side can comment on the changes. i. Your own lawyer may ask you questions to clarify things e. Advantages of taking a deposition: 38

i. Its spontaneous, it happens in the moment so you get an answer right away ii. You can pursue evasive answers if you get evasive answers, you can follow up and pin down an evasive deponent iii. Lets you observe the demeanor of the deponent. Juries often determine damage amount depending on if the person is a likable witness. You also get to see how good the other attorney is. iv. Allows you to pin down the witness and set things up for cross examination later on f. Disadvantages: i. Cost: deposition is expensive. Lots of the lawyers time doing the deposition and preparing for the deposition, and the cost for the court reporter and videographer g. Depose a corporation: either specify the individual employee of corporation you want to depose or you can require the corporation to produce someone with knowledge of specific subjects and corporation decides who they want to send h. You can couple request for documents with notice for deposition you can require the deponent to bring the docs to the deposition i. Weird device called deposition on written questions: you write up the questions you want to ask in a deposition and then you dont actually show up. You transmit them to a court reporter and the court reporter asks the deponent the questions j. NEW: Presumptive limits on the number and length of depositions in the case (used to be no limit on number or length it used to be that once you get the corporations CEO into the deposition, you want to inflict as much pain as possible to get him to settle) i. Can only have 10 depositions in a case (can be waived by the court in large cases) and 7 hours to depose someone (which can also be extended) k. Preparation of your witness for deposition is crucial. No question should come as a surprise to your witness you should map out what they should say to tough questions 2. Interrogatories: written questions that you serve on the other side in a lawsuit. They can only be served on parties and they have to be answered in writing under oath. The party responding to the interrogatory can make objections and the objections have to get resolved a. Responding party has a duty to investigate to answer the questions you dont just respond based on your current knowledge b. Can ask contention interrogatories to find out what their position in the lawsuit is c. Now there is a limit to 25 interrogatories in a case d. Interrogatories are good for eliciting basic info but anything complicated, you get legalese in response e. Advantages: i. Very inexpensive ii. Burdens your opponent iii. Obtain all the info the party has because they have to ask about all the knowledge anyone in their company has on the topic f. Disadvantages: 39

i. The answers are not spontaneous ii. Lawyers draft them so they can be cryptic 3. Request for admission: these are only available against a party and you serve them on a party, saying admit that then the fact. a. They are theoretically useful but not practically useful. No matter how basic fact you want admitted, lawyers draft a cute reply that is cryptic b. They are useful for admitting the genuineness of a document c. Party has to admit, deny or explain why they cant admit/deny d. If they fail to respond, the party is assumed to admit it e. Things admitted dont have to be proven at trial 4. Request to produce: this is a big one because most discovery in cases is document discovery. So you can request to inspect docs or real property. a. Want to frame your request to produce carefully because the other party will only produce exactly what is requested b. If you want docs from a third party, you have to serve them with a subpoena 5. Physical or mental examination under Rule 35: if other party is crazy a. Most commonly used in personal injury b. In contrast to all other discovery devices, this device requires a showing of good cause c. But most of the time, if physical condition is an issue, the parties will just agree d. The party who requests the exam has to have their doctor prepare a report and deliver it to the other side e. If the examined party wants the report, they have to produce all other exams they have done themselves f. There can be arguments about the scope of mental exams

e. Problems that can arise from discovery

i. Fights when one side refuses to provide info, usually arguing burdensomeness, cost, and privilege 1. Most fights over electronic discovery because its costly and usually requires experts

f. Zabulake v. UBS Warburg LLC

i. Plt claims gender discrimination by her boss. She requests any communication by or between UBS employees concerning her (note specificity of request you will only get exactly what you ask for) ii. UBS already produced 100 emails (although Plt found 450 in her files) and said they had produced all of them and that looking at back-up tapes was cost-prohibitive iii. Court rules that backup tapes are discoverable but then goes on to the main issue of who should pay for getting the info off the backup tapes 1. In a typical case, the presumption is that the responding party bear the cost of production a. But in this case, they consider cost shifting because: i. Responding party has to show that there is undue burden or expense 1. A burden is undue when burden outweighs the likely benefit, taking into account the needs of the case, amount in controversy, the parties resources, importance of issues at 40

stake, and importance of the proposed discovery in resolving those issues 2. Undue burden issue usually turns on the storage method a. Just because discovery is electronic does not automatically mean there is an undue burden can often be easier/cheaper b. Test: the more important the info, the less likely the cost will be shifted to the requesting party i. Court wants more contextualized analysis: contextualize the cost in light of the nature of the case and the importance of the info with an eye to the importance of the issue in the case that this discovered info will involve

g. Privileges
protect info from being disclosed. Based on a particular relationship. Weight the utility of the info with the need to foster open communication. Info is usually extraordinarily relevant. Important because its one of the only ways to protect info from discovery i. Can be absolute or conditional: 1. Absolute: cant be broken notwithstanding the importance of the info (doesnt matter how relevant the info is or whether this is the only source of the info) a. Example: attorney/client which can only be overcome by crime or fraud 2. Conditional: privilege is available but can be overcome based on a particular showing (most privileges are conditional) a. Example: work-product which can be overcome by a showing of compelling circumstances/necessity ii. Work-product privilege: protects the mental impressions of the lawyer (NOT all info lawyer discovers during investigations) iii. Hickman v. Taylor: tug boat accident and Def lawyer interviews witnesses. Plt files interrogatories asking for witness statements obtained by Def lawyer. Def lawyer files a response that objects to the requests, on the grounds that they infringe on the work-product privilege 1. Court held that documents reflecting the mental impressions of the lawyer made/created in anticipation of litigation are privileged discovery absent showing of compelling circumstances (necessity). 2. Reasoning: a. Principle rationale: lawyers wont write anything down if they have no privilege and this isnt a practical way to conduct litigation b. Unfair advantage if the requesting party can shift the cost of discovery and have the other party tell them everything they have uncovered c. Then the lawyers will be required to testify 3. Privilege can be overcome: a. If there is no other way for the other side to get the info, like if the witness is now unavailable (witness unavailability is the most likely circumstance when privilege can be overruled) 41

b. If a witness refuses to talk to the other side, this can sometimes overrule privilege but more often this can be dealt with by subpoenaing the witness and forcing them to talk i. Cant just overrule privilege because the info is important iv. Rule 26(b)(3) now governs work-product privilege (enacted after Hickman): 1. Shows that the purpose of the privilege is to avoid unfair cost-shifting and protect the mental impressions of the lawyer 2. Also says that all witnesses are allowed to get copies of their own statements and then they could give the statements to the other side a. Not all that useful because if the witness is willing to get his statement for you from the other side, the witness is likely to just tell you what he said 3. The principle problem with applying this privilege is what material actually contains the lawyers mental impressions and what situations necessitate overruling? a. Like what if a lawyer creates a computerized program for organizing docs to litigate the case? Is that privileged?

h. Discovery of experts
i. Can be hard for Plts to obtain experts because those same experts usually consult for Def companies in those industries and dont want to lose their jobs by helping Plts win ii. Discovery of Experts: Rule 26(a)(2) parties are required to expose the identity of all experts who will testify at trial and accompanied by a written report which the expert has prepared and signed. Written report must address: 1. Complete statement of all opinions the expert will express 2. Data or other info the expert considered in informing his opinion 3. His qualifications and publications in the past 10 years 4. Experts compensation 5. A list of all cases in which the expert has testified, in the past 4 years, either at trial or through deposition iii. The disclosures are to be made no later than 90 days before trial (or earlier as the court establishes) iv. Governed by Rule 26(b)(4)(a): all experts may be deposed after their reports are completed. You disclose the experts and the info about the experts and then the expert must be available to be deposed v. Discovery of experts who will not testify Rule 26 (b)(4): retained but not expected to testify at trial is NOT discoverable, unless there is a showing of compelling need 1. Two other categories: a. Experts informally consulted concerning the case but not retained i. Not really a category. This class consists of experts who may have been percipient witnesses. They are just a witness like anyone else b. Experts informally consulted but not retained: may not be the object of discovery i. Rule says that testifying experts have to be disclosed. Experts who are consulted in conjunction of the litigation (whether retained or not) discovery is NOT permitted 1. Rationale for the rule: the fear that if you have to disclose the identify of experts you consulted informally with and either hired or did not, you are giving the other side a roadmap to experts that are unfavorable to you (gives them experts that 42

they may want to hire and inhibits your ability to seek out witnesses) 2. Only have to disclose people you plan to have testify, UNLESS there is compelling need (like him being the only expert in the field) vi. Categories of Experts: 1. Categories: a. Consulted and retained will be called at trial - Fully discoverable b. Experts retained in anticipation of trial but not expected to be called as witnesses i. Not discovery except in showing of exceptional circumstances c. Informally consulted but not retained i. No discovery may be taken ii. Neither information nor identify must be disclosed d. Those whose information was not acquired in preparation of trial i. Witnesses who happen to be experts ii. Discovery may be sought as from any other witness vii. Discover abuses: lots of abuses and court has broad discretion to impose sanctions under Rule 37 (but difficult to get courts involved sometimes) 1. If party refuses entirely, you get a motion to compel 2. More difficult when theres partial compliance and the issue is whether omissions were justified 3. Washington State Physicians Insurance Exchange & Association v. Fisons Corporation: only partially complied with discovery request and tried to narrow the meaning of the request to not reveal docs

8. Former Adjudication
a. Basic Principles
once a final judgment is issued, legal barriers are established against re-litigating the matters involved in the lawsuit. i. Res Judicata (now Preclusion) has 2 types: 1. Res Judicata (now Claim Preclusion): both precludes a Plt from suing again on a claim that has already been resolved AND a Def from raising a new defense to defeat enforcement of a prior judgment 2. Collateral Estoppel (now Issue Preclusion): precludes re-litigation of any issue regardless of whether or not the subsequent lawsuit is on the same claim, so long as that particular issue was actually litigated and decided in the first case ii. Explained by the doctrines of merger and bar: 1. Merger: applies when the Plt wins the lawsuit. The idea is that all possible grounds that the Plt could have prevailed on are said to merge into the judgment and therefore, cannot be the basis of subsequent litigation 2. Bar: applies when the Plt loses and Plt is thereafter barred from ever raising the cause of action again, even if he can present new grounds for recovery iii. Differences between res judicata and collateral estoppel: 1. Collateral estoppel only applies when the case has actually been litigated and res judicata can apply even if there was no adversary contest (like if only consent or default judgment)

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2. Res judicata precludes subsequent suits on the same claim/cause of action while collateral estoppel precludes re-litigation of issues in new suits even when different CLAIMS are involved

b. RES JUDICATA (CLAIM PRECLUSION)

i. Purposes of res judicata: 1. Brings finality to the dispute allows the parties to plan for the future based on a resolution of their controversy 2. Conserves judicial resources by not continuing to re-litigate 3. Consequences for the public at large: a. Allows public to go on with its affairs, confident that a judgment will not be subject to continued re-litigation b. Encourages parties to go to the court to resolve their disputes 4. Forces the parties to seek review of a judgment through the appellate process rather than through re-litigation of claims ii. But: res judicata may lead to harsh outcomes 1. People may not be able to bring a claim for an injury that results later after you have received damages for other injuries a. But the purpose of litigation is not just to arrive at a just outcome. Its also to bring finality to a situation. And in some cases, the need for finality trumps the need for justice. iii. Res judicata is an affirmative defense and it must be raised by the party in the litigation. If its not asserted, its waived 1. But sometimes the court can raise the issue on its own (unusual) iv. Three elements must be satisfied before res judicata (claim preclusion) can apply: 1. Parties must be the same in both lawsuits 2. Must be a final judgment 3. Must be the same claim being litigated again v. Determining if claims are the same (element #3): 1. TEST: a. Transactional Test: if the claim involves the same transaction/occurrence/series of events i. How do you identify what a transaction is? Look to the facts to see if the claim arose out of the same nucleus of operative facts. This is a pragmatic test (like do the witnesses overlap, is the evidence likely to be the same) ii. IMPORTANT: transactional test for preclusion means that preclusion applies to all claims that could have been brought in the first instance, not merely to claims that WERE brought. It means that claims are precluded if they could have been brought as part of the first lawsuit (not just if they actually were brought) 1. Use it or lose it type of rule. If you have a claim or a theory, you have to bring it or you will not be able to bring it iii. IMPORTANT qualification: we are talking about claims not parties. You must bring all CLAIMS you have relating to a transaction against a party in the same lawsuit. However, you are not obligated to sue all parties together in one lawsuit. vi. Davis v. Dallas Area Rapid Transit: cops claimed race discrimination. They had filed a similar claim against same Defs and lost. This claim was now for offenses committed on different dates. 44

1. Court uses transactional test and determines that they are suing on the same claim (a pattern of behavior) that arose from the same transaction. a. AND the incident in case #2 happened before case #1 so they could have added those dates of offenses to the original complaint b. Even if you are disabled from bringing the claim because of an administrative prerequisite, this is not a sufficient excuse i. Preclusion is VERY strong and hard to get over vii. Compulsory counter-claim/corollary to the preclusion rule: under the Federal Rules, Defs must bring counterclaims that arise out of the same transaction that the Plt sues them with respect to. Those are deemed to be compulsory counterclaims 1. If you represent the Def in a case and do no bring a compulsory counterclaim (when you could assert one), that counterclaim is precluded and you cant bring it later. If you have a compulsory counterclaim, you MUST bring it if you are sued with respect that transaction, otherwise you are precluded from bring it later a. Preclusion applies not just to claims that could be brought by Plt but also to claims that could be brought by Def viii. Exception to preclusion: party wasnt able to rely on a particular theory or obtain a certain remedy because of limitations in the first tribunal [exception ONLY applies where there is not a forum where both claims could have been filed originally] 1. Staats v. City of Sawyer: Plt took time off for bipolar disorder and when he came back, his job had been eliminated. a. He was forced first to file his claim under Fair Employment Act with the Equal Rights Division at the state level, which he ultimately lost at the state level b. He also wanted to file federal claims (ADA and Rehabilitation Act claims) c. Def said Plt was precluded because he should have filed the federal claims in the original action in state court (arose from same transaction so they should have been brought together) d. Court says preclusion does not apply because state forum had limited jurisdiction and could not hear his federal claims i. There was no way for Plt to consolidate all those claims in a single forum e. Also, this case establishes that 1738 requires federal courts to give full faith and credit to state judgments i. Federal courts must give state judgments the same preclusion effects they would be given under state law preclusion principles

c. COLLATERAL ESTOPPEL
more widely available does not require that the same claims are being re-litigated, only that its the same issues i. Four factors: 1. Must be dealing with the identical issue (same issues in the 2 proceedings) 2. Must have been a full and fair opportunity to litigate in the first proceeding 3. Issue as to which preclusion is sought must have actually been litigated and decided a. To ensure that an issue was the subject of a contested dispute and decision (cant have collateral estoppel from a default judgment) 4. Issue litigated must have been essential to the judgment (predominant rule is that issues resolved in the alternative (if its an alternative ground for the judgment) this is not sufficient) 45

ii. Jacobs v. CBS Broadcasting: Plt alleged that CBS breached a contract to give them production credit for Early Edition. One Plts claims were investigated by Writers Guild (WGA) in a nonjudicial proceeding (concluded that CBS did not have to give him credit) and CBS says this proceeding precludes the Plts action in state court 1. Court ruled that the arbitration did not preclude because it did not have sufficient procedural safeguards dictated by due process to be an adjudicatory hearing: did not take formal testimony, no opportunity to cross-examine witnesses, none of the Plts had the right to examine the evidence presented by CBS or others, very limited judicial review 2. Also, there were new Plts in the second action that were NOT part of the administrative hearing with WGA a. If burden of proof in 2nd proceeding is higher than in the 1st proceeding, then collateral estoppel will not preclude iii. Identity of parties (element #1) 1. Most common way preclusion extends to nonparties nonparties (someone in a 2nd lawsuit is precluded who was not a party to the 1st lawsuit) is via the doctrine of privity. a. Privity exists where the parties interests are so closely entwined with each other that a decision against one is seen as a decision against the other. b. Most difficult question: relationship for purposes of litigation. Then, the principle question is whether the party in the 2nd case controlled or substantially participated in the first lawsuit, then he can be precluded based upon the party whose interests he actually controlled I the first lawsuit. c. Taylor v. Sturgell: i. ALWAYS start with the due process assumption: YOU HAD TO BE THERE ii. Plt filed a lawsuit for docs under FOIA. His friend, Herrick, had been refused the same docs one month earlier. Def argues Taylor was virtually represented by his friend Herricks claim. 1. Court said no preclusion, interpreted doctrine of preclusion strictly 2. Six exceptions: a. Consent: sometimes parties will agree/consent to be bound by a resolution of a prior matter or consent to have their interests represented by the party of a prior litigation b. Where there is a pre-existing legal relationship (like C and D above they were a buyer and seller of property before the B v. D litigation arose) c. If the party sought to be precluded was adequately represented in the prior litigation like in a class action (actually represented d. Control over the prior litigation: if you actually controlled what went on (like paying for it or directing it), even if your name is not on the lawsuit e. Re-litigation by proxy: this is what the Taylor case is (pretty much, but the SC doesnt find this) f. Some statutes that provide for preclusion (like bankruptcy) iv. Related doctrines: 46

1. Law of the case: once a court decides an issue, that decision is preclusive within the litigation itself (cant re-decide that issue again) a. But this is only discretionary and court can bring an issue back and reverse it, if they want 2. Judicial Estoppel: precludes a party from asserting inconsistent positions in successive litigation. If you took one position in one case, and in a second case, you cant take a position inconsistent with the position you took in the first case

d. Preclusion against Third Parties

only a problem for collateral estoppel because for res judicata, parties must be the same in the first and second action for res judicata to apply. ONLY applies when the third party is the one trying to INVOKE preclusion on the party who was present in the first lawsuit (if a party is seeking preclusion on a third party who was not there, preclusion wont apply because of the due process rule of YOU HAVE TO BE THERE i. Defensive Collateral Estoppel: same Plt in both cases 1. Plt litigated the same claim against a different Def and lost, then tried to re-litigate the same claim with a new Def a. New Def argues that Plt cant re-litigate the same claim because Plt already lost a prior case on that claim b. Collateral estoppel is universally permitted in defensive collateral estoppel i. Plt already had his day in court ii. Cant allow Plt to keep re-litigating his claim by switching adversaries ii. Offensive Collateral Estoppel: same Def in both cases 1. Def lost against one Plt and a new Plt tries to use collateral estoppel to stop Def from re-litigating those settled claims against him a. Courts are more careful about allowing for offensive collateral estoppel b. Courts must evaluate the following factors to determine if offensive collateral estoppel is appropriate: i. Efficiency: could Plt have joined the prior litigation? Is Plt encouraged to wait and see how a case will be resolved against the same Def to decide if they want to bring their case and use offensive collateral estoppel to help them win [empirically false, NEVER happens] ii. Unfair to Def: if the first ruling was inconsistent with prior judgments, if different procedural benefits are available in the new case that were not available in the first action that may change the outcome in the new case, or if stakes were so low in the first case that the Def did not litigate vigorously 2. Parklane Hosiery v. Shore: same Def; new Plt in state action wanted to use SEC decision that statements were misleading to bolster their case against Def on the same claim a. Court said offensive collateral estoppel applied because new Plt could not have joined the SEC action and it was not unfair to the Def (Def knew this was a serious action so it was foreseeable that private suits would follow so they vigorously litigated the SEC case, the first judgment was not inconsistent with any previous decision, and no procedural opportunities now available to this Plt that were not available in the first action which might likely case a different result) 47

e. Preclusion and Erie

i. Semtek Intl Inc v. Lockheed Martin Corp: CA federal district court sitting in diversity dismissed a claim in its entirety on the merits with prejudice. Plt then files the same suit in MD state court and the Def seeks injunctive relief from the CA federal court to enforce collateral estoppel against Plt so Plt cant take any further action since they already lost in CA (CA federal court refuses to do this). US SC grants certiorari because there is a federal issue: what preclusive effect a federal courts diversity judgment should be given by state courts what source of law should a state court look to in giving preclusive effect to a federal judgment? 1. Two issues in this case: a. Rules of interjurisdictional preclusion i. What source of law governs preclusion in the following situations: 1. One state court to another state court: a. Full faith and credit clause: must apply the rule of the state that rendered the first judgment 2. Federal court to state court: a. Full faith and credit statute: use preclusion rule of the state that rendered the judgment 3. Federal court to federal court: a. Federal common law 4. NOW: state court to federal court: a. Federal common law i. BUT federal common law almost always goes by the state law of the rendering state ii. So basically, the state preclusion law applies iii. SCOTUS said federal common law applies, though, because they want to be able to use federal common law in the rare cases when a federal interest is at stake b. Erie problem: issue here is what rule a state should apply when giving preclusive effect to a federal judgment i. Reverse Erie problem

9. Right to Jury Trial

a. Application of the 7th Amendment
Application of the 7th Amendment is complicated because it defines the scope of the 7th Amendment based on conditions of 1791a i. In suits at common law (as distinct from equity law), where the value in controversy shall exceed $20, the right of trial by jury shall be preserved and no fact tried by a jury shall otherwise be re-examined in any court of the United States, other than according to the rules of common law 1. Two elements: a. Preserves the right to jury trial i. Preserves dealt with the difference between law and equity claims but WE NO LONGER HAVE THIS DISTINCTION. But we have to go back to determine if, pre-law and equity separation, if the claim was a legal issue 48

1. Difference between law and equity claims was that law gave monetary damages and equity didnt. 2. The two courts overlapped in many contexts and in 1791, many claims could be filed in either system (law or equity) and the right to a jury trial followed solely from the court you decided to file your claim in 3. In the 20th Century, the courts had to decide what to do about this in a system where law and equity were not separate b. Prevents the re-examination of a jurys finding by a court

b. American Insurance v. Stewart

insurer filed claim in equity to cancel insurance policy based on fraud. i. SCOTUS holds that the insurer was entitled to sue first in equity and thus there is no right to a jury trial because the equity ruling will collaterally estop the law claim 1. If the equity claim proceeds first, all issues will be resolved for the purpose of the legal issues and thus the equity case will preclude ii. If a claim is properly filed in equity, there may be preclusion in the legal claim that follows subsequently (no problem that there will be no jury trial) iii. Clean-up doctrine: once an equity court had jurisdiction, it had the authority to clean up any related legal issues in the case (can hear the entire case and not have two separate proceedings) 1. But this was only to be applied when the legal issues were subordinate in the case iv. The 7th Amendment test focused on the NATURE of the action: was the action itself legal or equitable

c. Beacon Theaters v. Westover

Fox has exclusive distribution of movies in a certain area. Beacon is another theater company and tries to send a letter to Fox to provide them with notice that this violates antitrust acts. But with that letter, Beacon created the case for controversy required before a lawsuit can be filed and now Fox can initiate a lawsuit against Beacon. Fox files an equitable claim, asking for declaratory relief against Beacon saying that the notification and threats by Beacon to sue Fox gave rise to duress and coercion which deprived Fox of a valuable property right i. Since Fox filed their equitable lawsuit first, based on American Insurance, they were allowed to try the equitable claim first before Beacons legal claim. This is a big deal because of collateral estoppel within the lawsuit ITSELF: once the validity of the agreement of the antitrust law (through Foxs claim of declaratory relief) is settled, then Beacon cannot argue that in his legal counterclaim ii. Court held that there WAS a right to a jury trial. iii. Created a new test: 1. Look to issues, not causes of action/nature of action a. When an issue is common to both legal and equitable claims, the legal issue MUST be tried first (to avoid collateral estoppel) and there MUST be a jury i. Look to nature of the relief b. Take into account procedural innovations since 1791 i. Now we have declaratory judgments that serve as relief for Plts so they do not need an injunction c. If there is ANY legal issue in a proceeding, 7th Amendment attaches i. American Insurance is clearly overruled 49

2. Additional rule: only applies for a single proceeding. If there are multiple proceedings that are both equitable and legal, Beacon rule of requiring jury trial and legal before equitable doesnt apply

d. Ross v. Bernhart:
shareholders derivative suit i. SC held that stockholders derivative suits are entitled to a jury. ii. Reaffirms holding in Beacon - Focus on issues, not claims iii. Seventh Amendment Test 1. Look to pre-merger custom 2. Look to remedy sought 3. Look to practical abilities and limitations of juries

e. Chauffeurs v. Terry
i. In order to make out a DFR claim against a union, the employee must prove: 1. That the union failed adequately to represent him when he complained to them 2. If the employee can prove that the union breached its duty of fair rep, then and only then can the employee go on to allege that the company breached the contract in some way ii. Employees wanted a jury trial, although DFR claims did not exist in 1791 and had since then been held in equity iii. Two part test to determine whether there is a jury trial in a claim that didnt exist in 1791 1. Court will attempt to compare an analogize the claim before it to late 18th century causes of action a. Of the types of claims that were available in the late 18th century, what does this claim (which didnt exist then) most resemble [not easy] 2. Examine the nature of the remedy sought [MUCH more important] a. Was there a request for monetary relief (legal) or not

f. Atlas
i. Congress has the power to give adjudicatory power to administrative agencies that operate without a jury there are limitations but the court hasnt clearly spelled out what they are 1. SO: the right to jury trial will follow from the forum, in other words, if resolution of a matter is to be undertaken in the federal courts, then the 7th Amendment test applies a. If resolution has been consigned to an administrative agency (OR ANY NON-ARTICLE 3 COURT), your presumption is that the 7th Amendment doesnt apply and not having a jury is constitutional

g. Gasperini v. Center for Humanities

deals with the second clause of the 7th Amendment: standards against which jury verdicts are to be reviewed AND its a diversity case so theres an Erie problem i. Jury damages (copyright infringement and failure to pay royalties of photographs) 50

ii. As part of an effort at tort reform, NY passed a statute saying that jury verdicts should be scrutinized by ACs in NY state. AC is supposed to see if the jury verdict deviates materially from reasonable compensation. This is tort reform because prior standard was whether the jury award shocked the conscience so fewer verdicts thrown out because a more difficult standard than deviates materially from what is reasonable 1. Federal standard is shocks the conscience which is what the DC judge will use to iii. Erie problem? When the DC hears a case in diversity, do they apply the state rule of review here or the federal rule of review? 1. Complication is that the NY statute only requires APPELLATE courts to use the new standard, not DISTRICT courts (and this is a DC case) iv. The Court held that the NY statute was substantive and so the Federal DC is going to perform the review function using NY standard of deviates materially from reasonable compensation (even though NY law only requires AC to use that standard of review, NOT DC) and on appeal, AC will use the same standard previously, abuse of discretion (NOT review the verdict using the standard NY said to use deviates materially from reasonable compensation just review for abuse of discretion) v. What about the Erie problem? 1. Court says two things: a. 7th Amendment is not on point (not in direct conflict with the NY statute) so Hanna doesnt apply i. This is like Byrd because the SC didnt hold that the 7th Amendment didnt hold a right to trial by jury to be inviolate but that its IMPORTANT 1. So like in Byrd, you could argue that theres a policy reason to uphold the 7th Amendment b. Rule 59 re: reexamining of jury verdicts is NOT on point (not the same as the NY standard) and so the federal rule does not control i. So again, Hanna doesnt apply and then you check Byrd balancing test and Guaranty Trust (as modified by Hanna to focus on the twin aims of Erie)

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