Personal Jurisdiction _Territorial Jurisdiction_ by zhouwenjuan


									Civil Procedure                                last updated 2/10/2012                                  Page 1 of 32

Personal Jurisdiction (Territorial Jurisdiction)
Traditional basis and Limits: Each state has power over person (in personam) and over property (in rem)
within the state. No state has power over persons and property outside of the state. The court must assert
authority by clear act of attachment at the outset in an in rem proceeding or by summons and complaint
service in an in personam proceeding.
     (1) Personal Jurisdiction: asks the question “in what states can the  sue the .” Power over
         property is a form of personal jurisdiction, quasi in rem and in rem; power over this property is a
         basis for personal jurisdiction. Exercising personal jurisdiction is a two step process:
              a. Satisfy a Statute – state basis for exercising jurisdiction, then
              b. Constitutional basis comports with the case law on due process
     (2) Due Process – due process clause of the 5th amendment applied to the states by the 14th
         amendment tells how far they can go in exercising personal jurisdiction.
     (3) General Jurisdiction – such as extends to all controversies that may be brought before a court
         within the legal bounds of rights and remedies; as opposed to special or limited jurisdiction, which
         covers only a particular class of cases, or cases where the amount in controversy is below a
         prescribed sum, or which is subject to specific exceptions. In other words, if a court had general
         jurisdiction over a person, it has jurisdiction over that person for any claim that occurred any
     (4) Specific Jurisdiction – jurisdiction only over a claim that arose in that specific forum

Requirements for Jurisdiction over the Parties: Two distinct requirements which must be met before a
court can be said to have jurisdiction over the parties:
    (1) Substantive due process: court must have power to act, either upon given property, or on a given
         person so as to subject her to personal liability. 14 th Amendment Due Process Clause imposes this
         requirement of power to act, as a matter of “substantive due process”
    (2) Procedural due process: court must have given the  adequate notice of the action against him,
         and an opportunity to be heard. Requirements of procedural due process, also imposed by the
         14th Amendment’s Due Process Clause.

Three kinds of Jurisdiction over the Parties: three different kinds of jurisdiction which a court may
exercise over the parties – one of these three must be present for the case to go forward: [states don’t have
power over person or property outside the state]
    (1) In personam: jurisdiction over the ’s “person,” gives the court power to issue a judgment
         against her personally. Thus, all of the person’s assets may be seized to satisfy the judgment, and
         the judgment can be sued upon in other states as well.
    (2) In rem: jurisdiction over a thing, gives the court power to adjudicate a claim made about a piece
         of property or about a status. (ex. an action to quiet title to real estate, or an action to pronounce a
         marriage dissolved)
    (3) Quasi in rem jurisdiction: action is begun by seizing property owned by (attachment), or a debt
         owed to (garnishment) , within the forum state. This is different from in rem jurisdiction
         because here the action is not really about the “thing” seized; instead the thing seized is a pretext
         for the court to decide the case without having jurisdiction over the ’s person. Any judgment
         affects only the property sized, and the judgment cannot be sued upon in any other court.
              a. Must attach property on the outset

Minimum Contacts requirements: If jurisdiction in the case is in personam or quasi in rem, the court
may not exercise that jurisdiction unless  has “minimum contacts” with the state in which the court sits.
In brief, the requirement of minimum contacts means that  has to have taken actions that were
purposefully directed towards the forum state. (ex. selling goods in the state, or incorporated in the state,
or visited the state, or bought property in the state, etc.) Without such minimum contacts, exercise of
jurisdiction would violate ’s 14th Amendment right to due process.
     (1) Balancing test: Even if  has the requisite “minimum contacts” with the forum state, the court
           may not exercise jurisdiction if considerations of “fair play and substantial justice” would make
           requiring the  to defend the action in the forum state so unreasonable as to constitute a due
Civil Procedure                               last updated 2/10/2012                                 Page 2 of 32

          process violation. Example, if the burden to the  of defending in the forum state was unusually
          great, and the interest of the  in having the controversy heard in the forum state were very slight
          (Asahi Metal Industry Co. v. Superior Court). Generally, if  has the requisite minimum contacts
          with the forum state, it will not be unreasonable for the case to be tried there, and there will thus
          be constitutionally-exercisable jurisdiction over him.

Long-arm Statute: a statute which permits the court to obtain jurisdiction over persons not physically
present within the state at the time of service

Jurisdiction over Individuals

Individual’s presence: Jurisdiction may be exercised over an individual by virtue of her presence within
the forum state
     (1) Traditional bases: Traditionally, presence within the state was the chief, if not, sole, basis for
         personal jurisdiction. Pennoyer v. Neff: “the authority of every tribunal is necessarily restricted by
         the territorial limits of the State in which it is established”
     (2) Pennoyer v. Neff: dispute over land ownership led to a landmark decision. Neff alleged that
         Pennoyer’s deed from a sheriff’s sale was invalid because the court ordering the sale had never
         obtained personal jurisdiction over Neff.
              a. Where the object of the action is to determine the personal rights and obligations of the
                   parties, service by publication against non-residents is ineffective to confer jurisdiction
                   on the court.
                          i. The personal judgment recovered against a non-resident after only notice of
                             publication in a local paper, and without service or appearance is invalid and
                             cannot be executed.
                         ii. Oregon did not have power over Neff’s person and court need not give full faith
                             and credit to the state court on the judgemtn in the first action despite 28 USC §
                        iii. In personam jurisdiction of an alien may violate the 14th Amendments’ due
                             process clause. Where that rules of due process are violated any judgment
                             obtained would be invalid in its own state and not worthy of full faith and credit.
              b. Traditional Basis for In Personam Jurisdiction
                          i. Presence – if present in the state when served, there is jurisdiction
                         ii. Agent – a person can have an agent who can be served summon on behalf of that
                        iii. Domicile – if a person is domiciled in a particular state, that state has
                             jurisdiction over him
                        iv. Consent – person can always consent to personal jurisdiction, it is a waivable
                         v. Attachment – court assumes that an owner is always in possession of his
                                   1. attachment is a form of notice. Attachment at the outset of the action
                                       was a creation of Pennoyer.
                                   2. Prior to Pennoyer, attachment could take place after the judgment by
                                       local custom. This case had no attachment at the outset.

     (3) Presence still enough: Presence within the forum state is only one of numerous ways to get
         jurisdiction over a person. Continues to be a constitutionally valid method of getting jurisdiction,
         even where the individual is an out-of-state resident who comes into the forum state only briefly –
         so long as service is made on the person while he is in the forum state, the entire case probably
         may be tried in the forum state, even though the  then leaves the forum state and has no other
         contacts with it.
              a. Burnham v. Superior Court –  and wife, , separate while residing in NJ.  moves to
                   CA with their children.  visits CA on business, and stops briefly to visit the children.
Civil Procedure                                   last updated 2/10/2012                               Page 3 of 32

                       While  is visiting,  serves him with process in a CA suit for divorce.  never visits the
                       state again.
                  b.   Holding: CA could constitutionally assert personal jurisdiction over  based on his
                       presence in the state at the time of service, even though that presence was brief, and even
                       though  had virtually no other contacts with the state; although no majority opinion, not
                       a violation of due process
                  c.   Four justices felt as long as  was personally served while present in forum state, no
                       matter how briefly, this would always suffice for PJ
                  d.   Other justices believed presence would almost always suffice, but appeared to think that
                       there might be occasional instances where this would lead to great unfairness and might
                       thus be unconstitutional.

Domicile: Jurisdiction may be exercised over a person who is domiciled within the forum state, even if the
person is temporarily absent from the state. A person is considered to be domiciled in the place where he
has his current dwelling place, if he also has the intention to remain in that place for an indefinite period.
    (1) Domicile and citizenship: Domicile is usually held to be synonymous with citizenship for
         personal jurisdiction purposes. A person can only have one domicile at a time for this purpose.
    (2) Formula for domicile: A person is considered to be domiciled in the place where he has his
         current dwelling-place, if he also has an intention to remain in that place for an indefinite period.
         Domicile = current dwelling place + intent to remain indefinitely

Consent [FRCP §12(b)(2),(g)&(h)]: Jurisdiction over a party can be exercised by virtue of her consent,
even if she has no contacts whatsoever with the forum state.
    (1) “Forum selection” clauses: Some contracts go further than just an agreement to submit to the
         jurisdiction of a particular court – they obligate each party to litigate in one particular court. Such
         “forum selection” clauses will be enforced, provided that they are “fundamentally fair.”
              a. Carnival Cruise Lines, Inc. v. Shute – not unfair because (1) cruise ship typically carries
                   passengers from many locales, so the ship’s owners have strong interest in not being
                   subject to litigation in multiple fora; (2) cruise line that can centralize its litigation may
                   well be able to offer lower prices to the public; (3)  based in FL, and many cruises
                   depart from there, so there’s no indication that  chose FL for the forum clause merely to
                   make litigation inconvenient for s.
    (2) General Appearance: If a suit is brought seeking personal liability over a , his appearance in the
         court to contest the case on its merits constitutes consent to the court’s jurisdiction, even if
         jurisdiction would not otherwise have been valid. If  first makes an objection to lack of
         jurisdiction, then contests the case on the merits, the matter is more complicated. [Special
              a. Special Appearance:  appears with the express purpose of making a jurisdictional
                   objection; his doing so is not a consent to the exercise of jurisdiction

Federal Substitute for Special Appearance (used in some states):
    (1) FRCP 12(b)(2) – “motion to dismiss for lack of jurisdiction over the parties can be made without
         subjecting the  to personal jurisdiction”
    (2) FRCP 12(g) & (h)(2) – failure to raise personal jurisdiction issue in answer or pre-answer Rule 12
         Motion constitutes a waiver of these defenses or objections

Collateral Attack on Personal Jurisdiction (Attack in a different court):
    (1)  who makes no appearance whatsoever remains free to challenge personal jurisdiction
         collaterally after a default judgment. But, if unsuccessful, the default judgment sticks. You
         cannot argue merits at this point. Risky strategy.
    (2) If  attacks personal jurisdiction and fails, he can only appeal directly, he cannot collaterally
         attack because of res judicata and full faith and credit. This is called waiver.

Emergence of Contacts Theory - Jurisdiction over Corporations
Civil Procedure                               last updated 2/10/2012                                 Page 4 of 32

General Principles:
   (1) Domestic corporations: any action may be brought against a domestic corporation, one which is
        incorporated in the forum state.
   (2) Presence of corporate agent: corporate agent who comes into the state only occasionally to
        conduct a small piece of business does not render the corporation liable to service through him.
        The corporation must meet minimum standards of contact with a state beyond mere presence by
        an agent, before that state may exercise jurisdiction over it.
   (3) Cessation of in-state contacts: once an act or the systematic doing of in-state business has
        rendered a corporation subject to the state’s jurisdiction, the fact that the corporation has ceased to
        do business within the state will not undo this “amenability to process.”

Older Tests for Jurisdiction over Foreign Corporations: Pre International Shoe, courts had a number of
theories justifying the exercise of jurisdiction over “foreign” corporation, i.e., ones not incorporated in the
forum state.
    (1) Existence only where incorporated
    (2) Corporate agent to receive process
    (3) Consent
    (4) Corporate presence

Modern Ideas on Jurisdiction over Foreign Corporations: The modern view of jurisdiction over
foreign corporations derives mainly from International Shoe Co. v. Washington.
     (1) The “minimum contacts” test of International Shoe: The due process requires that a forum
         state may exercise personal jurisdiction over the corporation only if the corporation has
         “minimum contacts” with the forum state “such that the maintenance of the suit does not offend
         ‘traditional notions of fair play and substantial justice. Two prongs: contacts and fairness.
         Shoe’s contacts were neither causal or irregular, but systematic and continuous.
     (2) Dealings with residents of forum state: Usually, a corporation will be found to have the requisite
         “minimum contacts” with the forum state only if the corporation has somehow voluntarily sought
         to do business in, or with the residents of, the forum state – establishing minimum contact specific
              a. Miminum contacts found:  has no activities in WA except for the activities of its
                   salesmen, who live in the state and work from their homes. All orders are sent by the
                   salesmen to the home office, and approved at the home office. The salesmen earn a total
                   of $31,000 per year in commission
     (3) In Shoe, the state of Washington sought to collect unemployment taxes based on commissions
         paid by the firm to its Washington-based salesmen.
     (4) Holding: Supreme Court concluded that state of WA could constitutionally exercise jurisdiction
         over the Shoe Company.
              a. Test: Court established a new test based on minimum contacts with the forum state:
                   “Due process requires only that in order to subject a  to a judgment in personam, if he
                   be not present within the territory of the forum, he have certain minimum contacts with
                   it such that the maintenance of the suit does not offend ‘traditional notions of fair play
                   and substantial justice’.”
              b. Applicability to Individuals: The Shoe case involved a corporate , but the language
                   used, with its implicit rejection of the requirement that jurisdiction be limited by
                   territoriality (the theory of Pennoyer) seems applicable to individuals as well.
              c. Inconvenience: The test of “fair play” may include “an ‘estimate of the inconveniences’
                   which would result to the corporation from a trial away from its ‘home’ or principal place
                   of business.”
     (5) McGee v. International Life Insurance Co. : CA case involving an insurance policy written by a
         Texas company on a CA resident.
              a. Contacts were sufficient to allow jurisdiction in CA over the Texas insurance company.
                   CA had a strong interest in protecting its citizens, by giving them a local forum to sue the
                   out-of-state company with which they had dealings. Suit based on contract that had
                   substantial connection with the forum state.
              b.  is not inconvenienced in coming to CA to defend case
Civil Procedure                               last updated 2/10/2012                                 Page 5 of 32

     (6) Hanson v. Denckla: Florida court could not constitutionally exercise jurisdiction over the DE
         trustee, since the trustee’s contacts with Florida were insufficient.
              a. Nature of restraints on jurisdiction: Restrictions on jurisdiction “are more than a
                   guaranty of immunity from inconvenient or distant litigation. Restrictions are a
                   consequence of territorial limitations on the power of the respective states. However
                   minimal the burden of defending in a foreign tribunal, a  may not be called upon to do
                   so unless he had had the ‘minimum contacts’ with that state that are a prerequisite to its
                   exercise of power over him.”
              b. Hanson distinguished from McGee: in Hanson, the contacts with the forum state were
                   initiated by the settlor, not the . “The unilateral activities of those who claim some
                   relationship with a non-resident  cannot satisfy requirements of contact with the forum
                   state…It is essential that in each case there be some act by which the  purposely avails
                   itself of the privilege of conducting activities within the forum State, thus involving the
                   benefit and protections of its laws.”

Specific Jurisdiction – claim arise from the in-state contact

Steps in Determining Jurisdiction
    (1) Long Arm Statute [State Law]
    (2) Constitutional Limit [Due Process0
             a. Minimum Contacts – fair play and substantial justice (Shoe) [sovereignty]
             b. Purposeful Availment/Not Unilateral Act of Others (Hanson) [sovereignty]
             c. Multifactered Balancing/Convenience/Plaintiff, Defendant forum’s interest (McGee)

Jurisdiction involving Products Liability: litigation against out-of-state corporations has been in
products liability cases, where the foreign corporation is charged with making or selling (out-of-state) a
product which is shipped into the forum state and which causes personal injury there. Not surprisingly,
injured s have sought to bring suit in the state where the injury occurred.
     (1) Statutes: Suites partially supported by the language of many long-arm statutes. Most long-arm
         statute allow jurisdiction over corporations in cases where an in-state tortuous act is sued on.
              a. Explicit provision: Some long-arm statutes even explicity provide for jurisdiction in
                   cases of out-of-state tortuous conduct having in-state consequences.
     (2) Volkswagen: limitation on use of long-arm statute against out-of-state manufacturers and vendors.
         Mere fact that a product finds its way into a state and causes injury there is not enough to subject
         the out-of-state manufacturer or vendor to personal jurisdiction there. Some effort to market in
         the forum state, either directly or indirectly, is required.
              a. Holding: Even though it may have been foreseeable that the s (distributor of the car and
                   dealer both in NY) might derive revenue from a car ultimately used in OK, this was not
                   sufficient to confer jurisdiction on the OK courts. ’s conduct and connection with the
                   forum state are such that he should reasonably anticipate being haled into court there.
                         i. Application of test: if either  had made efforts “to serve directly or indirectly,
                            the market for its products” in OK, it would not be unreasonable to subject it to
                            that state’s jurisdiction. But the use of ’s products in OK was merely an
                            “isolated occurrence,” and was completely due to the unilateral activity of the
                        ii. Due Process: Places sovereignty test first and then convenience
     (3) Contractual Relationship: The requisite “minimum contacts” are more likely to be found where
         one party to a contract is a resident of the forum state. But the fact tht one party to a contract is a
         resident does not by itself automatically mean that the other party has “minimum contacts” – the
         existence of a contract is just one factor to look at.
     (4) Burger King Crop. V. Rudzewicz:  runs a fast food restaurant in MI under franchise from ,
         which has its headquarters in FL. The contract requires  making royalty payments to  in FL.
Civil Procedure                                  last updated 2/10/2012                                      Page 6 of 32

                   Holding:  may sue  in FL. Fact that the payment stream comes in FL is an important
                   factor, though not by itself dispositive, in the court’s conclusion that there were minimum
                   contacts with FL.
              b. Choice-of-law clause: Where there is a contract between the parties to the suit, the fact
                   that the contract contains a choice of law requiring use of the forum state’s law will also
                   be a factor (though not a dispositive one) tending towards a finding of minimum contacts.
              c. “Reasonable anticipation” of : In suits relating to a contract the minimum contacts
                   issue always boils down to : Could the  have reasonably anticipated being required to
                   litigate in the forum state?
              d. Contacts and Fairness: Meaningful contacts in the case – contract, training, and
                   payments. Inconvenience to one party does not mean unconstitutional.
                          i. There is a sliding scale, that is, if the fairness factor balances strongly in favor of
                              jurisdiction, we might uphold jurisdiction based on a lower standard of conduct.
                              The forum does not have to be the best place.
                         ii. The burden is on the  to prove that the forum is so unfair that the  is at a
                              severe disadvantage. This not now shown merely by economic disparity.
     (5) Awareness of Sales in Foreign State: If the out-of-state manufacturer makes or sells a product
         that it knows will be eventually sold in the forum state, this fact by itself is probably enough to
         establish minimum contacts. However, if this is the only contact that exists, it may nonetheless be
         “unreasonable” to make  defend there, and thus violate due process.
     (6) Asahi Metal Industry Co. v. Superior Court:  injured while riding a motorcycle in CA.  brings
         a products liability suit in CA against, inter alia, , the Taiwanese manufacturer who made the
         cycle’s rear innertube.  impleads Asahi, the Japanese manufacturer of the tube’s valve assembly,
         claiming that Asahi must pay  any amount that  has to pay to . Asahi has no contacts with
         CA, except that Asahi knew that: (1) tires made by  from Asahi’s components were sold in the
         U.S., and (2) 20% of the U.S. sales were in CA. The - suit has been settled but the -Asahi
         case is to be tried.
              a. All nine members of the Court believed that CA could not, consonant with due process,
                   adjudicate ’s indemnity claim against Asahi. But the Court was badly split as to the
                   rationale. Five Justices (Brennan, joined by White, Marshall, and Blackmun, and Stevens
                   in a separate concurrence) believe that Asahi had minimum contacts with CA, because it
                   put its goods into a stream of commerce that it knew would lead many of them to the
                   state. But all Justices except Scalia believed that despite these minimum contacs, it
                   would be “unreasonable and unfair” for CA to hear the case, because of: (1) the burden to
                   Asahi of defending in a foreign legal system; (2) the slenderness of CA’s and ’s
                   interests in having the indemnity claim heard in CA; and (3) the strong federal and state
                   interest in not creating foreign relations problems by deciding an indemnity claim
                   between two foreign s.
                         i.  No minimum contacts  O’Connor: Placement of a product into the stream of
                             commerce, without more, is not an act of the  purposefully directed toward the forum
                             State. ’s awareness that the stream of commerce may or will sweep the product into the
                             forum State does not convert the mere act of placing the product into the stream into an
                             act purposefully directed toward the forum State. Must be purpose or an intent ot serve
                             the forum state market.
                         ii. Reasonableness  O’Connor: Even if Asahi had minimum contacts with CA, it would
                             be so unreasonable as to constitute a violation of due process for CA to exercise the
                             jurisdiction. Reasonableness determined by consideration of the burden on the , the
                             interest of the forum state, the ’s interest in obtaining relief, the interstate judicial
                             system’s interest in obtaining the most efficient resolution of controversies; and the
                             shared interest of the several States in furthering fundamental substantive social policies.
                        iii. Brennan’s concurrence: disagreed with O’Connor on minimum contacts issue. As long
                             as a participant in the manufacturing-to-distribution-to-retail-sale process is aware that
                             the final product is being marketed in the forum State, the possibility of the lawsuit there
                             cannot come as a surprise and the participant should thus be regarded as having the
                             requisite minimum contacts. Asahi benefited economically from the regular retail sale of
                             the final product in CA. Difference between a situation where a single consumer
Civil Procedure                                last updated 2/10/2012                                    Page 7 of 32

                            fortuitously transport the ’s goods into the forum state (Volkswagen) and the situation
                            where the ’s products are regularly sold there.
                      iv.   Unreasonable: agree with O’Connor
                       v.   Stevens’ concurrence: Unreasonable to exercise jurisdiction here. No need to decide the
                            minimum contacts issue since Asahi ‘purposefully availed’ itself because of regular
                            course of dealing  look at volume, value, hazard of product to determine minimum
                      vi.   Significance: found it unreasonable and thus violative of due process for a state to
                            exercise jurisdiction over a  that a majority of the Court believed had minimum contacts
                            with the forum state. Minimum requirements inherent in the concept of fair play and
                            substantial justice defeat the reasonableness of jurisdiction even though the  has
                            purposefully engaged in forum activities. Burden on  was so great, and the interest of
                            the forum state and the  so weak that difficulties were enough to overcome what
                            majority thought were weak minimum contacts and a minority though were no minimum

Minimum Contacts Test
     (1) nature, quality, and number of contacts
     (2) contacts, ties, and relations
     (3) not random, fortuitous, or attenuated contacts
     (4) is  creating continuing obligations between himself and residents of the forum state?
Purposeful Availment
     (1) Not unilateral contact by 
     (2) Are ’s conduct and connection with forum such that  should reasonably anticipate being haled
          into court there?
     (3) Is it foreseeable that  will be haled into court there?
     (4) Is  purposefully getting benefits from that forum?
     (5) Is  purposefully receiving the benefits and protections of the forum state laws?
Nexus Requirement: Once figure out what the ’s contacts with the forum state are, figure out what the 
is suing about. Did the lawsuit “arise out of” those contacts? Was it related to those contacts?
Note: Once minimum contacts, purposeful availment, and nexus requirement are found, conduct a
reasonable inquiry using multifactored balancing .
Multi-Factored Balancing:
     (1) What is the burden on the  to defend in forum state?
     (2) What is the interest in the forum state in providing redress to its citizens?
     (3) What is the interest of the  in getting relief in a convenient forum?
     (4) What is interstate judicial system’s interest in efficient resolution of disputes?
     (5) What is the shared interest of the states in furthering their social policies?
Rules of Interstate Commerce: O’Connor in Asahi – Did foreign company purposefully avail?
     (1) Designing the product for marketing in the forum state
     (2) Establishing channels to provide regular advice to customers from forum state
     (3) Marketing through a distributor who also is a sales agent in the forum state;
     (4) Taking active steps to sell in the forum state, e.g., ads, sending sales agents
     (5) Stevens – was there volume, value, or hazardous character?
     (6) Brennan – awareness of destination and ultimate arrival is enough

General Jurisdiction – higher minimum contacts necessary than for specific jurisdiction

Where cause of action does not arise from the company’s in-state activities, greater contacts between the
 and the forum state have been required. The standard seems to be that the in-state activities must be
“systematic and continuous.”

General Jurisdiction: Where the claim does not arise from the in-state contacts, the in personam
jurisdiction asserted is sometimes called “general” jurisdiction.

     (1) Perkins v. Benguet Consolidated Mining Co.:  an out-of-state mining company
Civil Procedure                                      last updated 2/10/2012                                   Page 8 of 32

                  a.   Test: where cause of action does not arise from business done within the forum state,
                       Constitutional due process requires that the in-state business actually conducted be so
                       systematic and continuous as to make it not unjust that the corporation be forced to
                       defend a suit there. Essence of issue on the constitutional level is one of general fairness
                       to the corporation.

More rigorous “systematic and continuous activities” standard for claims not arising out of the ’s in-state
activities is still in force. The Supreme Court applied the test in Helicopteros Nacionales de Colombia,
S.A. v. Hall. Helicopteros established that, where the claim does not arise out of the ’s in-state activities,
the mere fact that purchases have been made by the  in the forum state, even if they have occurred
regularly, will not be sufficient to establish the requisite minimum contacts.

     (1) Helicopteros: no contacts with Texas except: (1) one negotiation there with a client, (2) the
         purchase by  of 80% of its helicopter fleet from a Texas supplier, (3) the sending of pilots and
         maintenance people to Texas for training, and (4) the receipt out-of-state of two checks written in
         Texas by the client.
     (2) Holding: contacts did not in the aggregate constitute the requisite “minimum contacts.” Wrongful
         death claims did not “arise out of” the ’s in-Texas activities; therefore, issue was whether those
         activities “constitute the kind of continuous and systematic general business contacts the Court
         found to exist in Perkins. “Mere purchases, even if occurring at regular intervals, are not
         enough to warrant a State’s assertion of in personam jurisdiction over a non-resident corporation
         in cause of action not related to those purchase transactions.
     (3) Brennan: Dissent  cause of action was “related to” even though not “arising out of” the ’s in-
         Texas contracts. Since negotiations provided the transportation services that was involved in
         crash were conducted in Texas,  should be expected to be amendable to suit in Texas. “Fair and
         reasonable” to allow the suit to go forward
     (4) Possibility remains that a claim “related to” the in-state activities will be enough to trigger the
         less demanding standard applied for “specific” jurisdiction.

                       Range of Continuum

                       General Jurisdiction

Contacts                                                       Audi

                       Specific Jurisdiction

                                               “unrelated”      “related to”         very close   “arises out of”
                                                                           Relatedness Range

Jurisdiction Based on Presence of Property – jurisdiction over things

Long arm statute may not reach for claim, party would like in personam, but will settle for this.

Two types of actions: There are two types of actions that relate primarily to “things” rather than to people:
(1) in rem actions; and (2) quasi in rem actions.
     (1) In rem actions: In rem actions are ones which do not seek to impose personal liability on
         anyone, but instead seek to affect the interests of persons in a specific thing.
              a. No personal liability: In all these types of in rem actions, no judgment imposing
                  personal liability on anyone results – all that happens is that the status of a thing is
              b. Dispute if over property in that state - Deciding who owns the piece of property against
                  the whole world
Civil Procedure                               last updated 2/10/2012                                 Page 9 of 32

     (2) Quasi in rem actions: Quasi in rem actions are actions that would have been in personam if
         jurisdiction over ’s person had been attainable. Instead, property or intangibles are seized no as
         the object of the litigation, but merely as a means of satisfying a possible judgment against .

Method of Attachment: In an in rem action, description of the property in the papers filed with the court
is sufficient to bring the property within the control of the court for the purposes of the suit. But in a quasi
in rem action, the property must be actually attached, or seized (generally by giving the sheriff post official
notice on the land). This is the actual holding of Pennoyer.

Quasi in rem jurisdiction: one which would have been in personam if jurisdiction over the ’s person had
been attainable. Instead property or intangibles are sized not as the object of the litigation, but merely as a
means of satisfying a possible judgment against the . Generally for money damages awarded by selling
the property or garnishing the debt.
         (1) Jurisdiction based on debt: Quasi in rem jurisdiction has frequently been exercised not only
              over tangible proerty (e.g., real estate) located in the forum state, but also over intangible
              property, such as a debt.
         (2) Harris v. Balk: Harris, of North Carolina, owes $180 to Balk, of North Carolina. Epstein, of
              Maryland, has a claim against Balk for $300. While Harris is visiting in Maryland, Epstein
              attaches Harris’ debt to Balk by serving Harris with process in a Maryland suit. Under pre-
              Shaffer law, this established quasi in rem jurisdiction over the $180 debt, on the theory that
              the debt goes wherever the debtor goes. If Epstein won, he could require Harris to pay the
              $180 to him rather than to Balk.
         (3) Holding: obligation of the debtor ot pay his debt clings to and accompanies him wherever he
         (4) Shaffer v. Heitner: Utility of quasi in rem jurisdiction was radically curtailed in the landmark
              Supreme Court case, Shaffer v. Heitner. Case held that quasi in rem jurisdiction over a 
              could not be exercised unless the  had such “minimum contacts” with the forum state that
              in personam jurisdiction could be exercised over him under International Shoe.
                   a. , Heitner, bought a shareholder’s derivative suit in DE on behalf of Greyhound
                       Corporation against 28 of the corporation’s non-resident directors and officers.
                       None of the activities complained of took place in DE, nor did any  have any other
                       contact with DE.  takes advantage of a DE statute providing that any stock in a DE
                       corporation is deemed to be present in DE, allowing that stock to be attached to
                       provide quasi in rem jurisdiction against its owner. Thus  is able to tie up each ’s
                       stockholdings even though there is no other connection with DE.
                   b. Holding: use of quasi in rem jurisdiction violates constitutional due process. No 
                       may be subjected to quasi in rem jurisdiction unless he has minimum contacts with
                       the forum state. Here, neither the ’s actions nor the fact that those actions related to
                       a DE corporation were sufficient to create minimum contacts, so the exercise of
                       jurisdiction was improper. The same test, the “minimum contacts” test of
                       International Shoe, should therefore apply to determine whether the exercise of
                       quasi in rem in a particular case is constitutional.
                   c. Utility of quasi in rem jurisdiction is at an end. Prior to Shaffer, its utility lay
                       precisely in the fact that where personal jurisdiction was not available, it provided a
                       “second best” form of jurisdiction, in which the  could get satisfaction at least to
                       the extent of the in-state property (and perhaps induce the  into a general
                       appearance). If quasi in rem jurisdiction may only be exercised where the
                       International Shoe minimum contacts test is satisfied, quasi in rem will never do
                       anything that in personam jurisdiction couldn’t do better.
                   d. Jurisdiction cannot be founded on property within a state unless there are sufficient
                       contacts within the meaning of the test developed in International Shoe.
                   e. Overrules Harris in quasi in rem, must apply International Shoe. Presence of
                       property not enough, must meet minimum contacts test for tangible and intangible
Civil Procedure                               last updated 2/10/2012                              Page 10 of 32

Quasi-in-rem is 2 part test:
    (1) attachment statute
              a. allows attachment of ’s property
    (2) constitutional due process – minimum contacts
Full Faith and Credit –
    (1) In personam in any state allows us to use in personam judgment against property of  in any other
         state. In personam creates a personal obligation. Can grab hold of property after judgment.
    (2) Qausi in rem – only enforceable to the extent that court had jurisdiction (the extent that we had the
         property – the value of the property, and no more).

Approach to in personam and quasi in rem question on Exam

     (1) Statutory tests: statutes have to apply to exercise personal jurisdiction (should be looked at before
              a. Does statute grant specific/general jurisdiction?
                         i. Presence alone is likely to create personal jurisdiction (Burnham)
                        ii. Domicile (general)
                       iii. Consent (expressed or implied) (specific) for non-resident motor act; need both
                             presence and purposeful availment – served on agent.
              b. Is it within Due Process clause of the 14th amendment?
                         i. Look for contact between  and the forum that is relevant to the claim.
                                 1. purposeful availment, not unilateral act
                                 2. foreseeability the  might get sued in forum, not that product would get
                                      to forum
                        ii. Fairness/Reasonableness – If factors are overwhelming
                                 1. relatedness – does claim arise from contact with the forum?
                                 2. convenience – very tough for the  to make this showing, so gravely
                                      inconvenient that  is at a severe disadvantage to the litigation.
                                      Doesn’t have to be the best forum.
                                 3. forum state has an interest, may not have to be embodied in a statute.
                                 4. inconvenience of distant forum
                                 5. judicial economy
                                 6. interstate character and impact of ’s activities

Notice and Opportunity to be Heard

Mechanics of Service
   (1) Service of Process FRCP Rule 4: consists of summons and a copy of the complaint that 
       receives signed by court clerk.  has 20 days to respond.
            a. FRCP Rule 4(c)(2) – service may be effected by any non-party person who is at least 18
                years of age.
   (2) Rule 4(d) – Waiver of formal service. Mail form to .  can send back within 30 days.  may
       waiver personal service by sending form back. If not,  must pay for alternate means by which
       service of process is achieved.
            a. Rule 4(d)(1) – waiver of service of summons does not waiver objections to venue or
                personal jurisdiction.
   (3) Rule 4(e)(1) – Methods of service allowed. Can use methods that are allowed in state court of
       which the fed court sits or state that  lives in.
   (4) Rule 4(e)(2) – Hand it to . Personal service, abode service, or “substituted service.”
            a. ’s usual abode or dwelling house (court fairly liberal with this view).
            b. Serve someone of suitable age and discretion and this person must reside there (no actual
                age required), or agent, agent by statute, agent by contract.
   (5) Rule 4(h) – for corporations, serve agent set up by corporation, any officers, top mangers.
Civil Procedure                                last updated 2/10/2012                                Page 11 of 32

     (6) Rule 4(k) – Federal court can serve process outside the state lines of which it resides only if state
         long arm statute allows them to.
     (7) Rule 4(k)(1)(b) – does not apply to brining in original , only good for interpleader, etc. when 
         is a joined party and served within 100 miles from where summons issued
     (8) Rule 4(k)(2) – arising from Omni case, to established personal jurisdiction over the person of any
          who is not subject to the jurisdiction of the courts of general jurisdiction of any state.

Note: As a matter of comity, the federal courts abide by above rule but they actually could serve anywhere
in the US.

Requirement of Reasonable Notice: Even if the court has authority to judge the dispute between the
parties or over the property before it, the court may not proceed unless  received adequate notice of the
case against him.
     (1) Mullane v. Central Hanover Bank: only notice given to beneficiaries of trust funds was through a
          newspaper announcement. Bank had available names and addresses of the beneficiaries, but
          claimed too costly for it to notify them all of the proceedings to settle the accounts. Mullane
          objected, claiming reasonable notice to the beneficiaries was not met
     (2) Holding: held that the expense of notification by mail, and the availability of names and
          addresses of beneficiaries, were factors that could be taken into account in determining whether
          publication was sufficient notice.
     (3) Reasonable calculated to succeed & no due process
     (4) In order to satisfy (14th amendment requirement) due process challenges, notice must be by means
          of calculated to inform the desired parties, and where they reside outside of the state and their
          names and addresses are available, notice by publication is insufficient.
     (5) Constructive Notice: service by publication (very unlikely that fulfill requirement for in
          personam). Constructive notice should be a last resort after exercising due diligence in attempting
          to contact relevant parties.

Opportunity to be Heard: Replevin Statutes (installment sales contract) (repossess) – found to be
violations of a property owner’s due process rights
     (1) Safeguards to Insure Opportunity to be Heard:
              a. Seller must give specific affidavit (information given)
              b. Must get writ from judge (decision maker)
              c. Must post bond (Bond)
              d. Buyer is entitled to notice and hearing on merits (must be prompt)
              e. Look at depriver’s and deprivee’s interests
              f. The exigency of the matter
     (2) Fuentes v. Shevin: Fuentes had her stove and stereo picked up by the sheriff prior to the
         adjudication of a suit filed by Firestone for nonpayment of the installment sales contract.
              a. Procedural due process requires that parties whose rights are to be affected are entitled to
                   be heard at a meaningful time; and, in order that they may enjoy the right, they must be
              b. Court found the taking of her stuff to be unconstitutional, without a hearing at which she
                   could be heard. Firestone initiated the action before Fuentes was even served a summons
              c. Majority concerned with the disadvantaged  (4-3)
     (3) Mitchell v. W.T. Grant Co.: similar case, but the court held that it was constitutional (5-4)
     (4) North Georgia Finishing, Inc. v. Di-Chem, Inc.: involved attachment of a bank account for
         security reasons. Held unconstitutional (6-3)
     (5) Connecticut v. Doehr: judge attached a house for security in a lawsuit over an assault. Court
         unanimously said that this measure was unconstitutional. Developed a three-part test for
         determining the validity of a state statute that enables an individual to enlist the aid of the state to
         deprive another person of his property by means of a prejudgment attachment or similar
              a. Strength of ’s private interest: interest of private party who is being harmed by the
                   prejudgment attachment or other procudure. More important the ’s property right (or
Civil Procedure                                    last updated 2/10/2012                                 Page 12 of 32

                       the greater the interference with that property right), the harder it is for due process to be
                  b.   Risk of erroneous deprivation: greater the risk that the particular procedures being
                       used will result in an erroneous interference with ’s property rights, the harder it is for
                       the procedure to pass due process scrutiny.
                  c.   Interest of the party seeking the remedy: the strength of the interest of the party
                       seeking the prejudgment remedy with due regard to ancillary interest of government in
                       providing or foregoing procedure.

Subject Matter Jurisdiction
    Courts must have both territorial jurisdiction and subject matter jurisdiction before they can adjudicate
     a case. Subject mater jurisdiction concerns the authority of a court to adjudicate a particular type of
     suit. Unlike territorial jurisdiction, absence of subject matter jurisdiction cannot be waived or
    State courts – all states have a court of general jurisdiction which are capable of hearing any dispute
     brough before it limited only by specifically described exceptions.
    Federal Courts are of limited jurisdiction to Article III §2. Congress must grant power to federal courts
     to hear cases. Capable of hearing disputes that are specifically conferred by the Constitution and
     federal statutes. The boils down to Federal Question Jurisdiction §1331 – claims based on federal
     law. And Diversity Jurisdiction §1332 – claims where the s and s are citizens of different states.
     The federal courts also have jurisdiction over cases involving admiralty, ambassadors, and where the
     U.S. is a party.
    State and Federal courts can have concurrent jurisdiction. State’s can hear diversity of citizenship and
     federal question cases.

Diversity Jurisdiction – Article §2/statute, 28 U.S.C. §1332
    (1) Complete diversity required: no  is a citizen of the same state as any . Rule of “complete
        diversity” .
    (2) Presence of foreigner: in a suit between citizens of different states, the fact that a foreigner
        citizen (or foreign country) is a party does not destroy diversity
    (3) Domicile: Mere presence in a state does not establish domicile for purposes of diversity
        jurisdiction. Mas v. Perry A person is considered to be domiciled in the place where he has his
        current dwelling place, if he also has the intention to remain in that place for an indefinite
             a. Domicile and citizenship: Domicile is usually held to be synonymous with citizenship
                  for personal jurisdiction purposes. A person can only have one domicile at a time for this
             b. Formula for domicile: A person is considered to be domiciled in the place where he has
                  his current dwelling-place, if he also has an intention to remain in that place for an
                  indefinite period.
                  Domicile = current dwelling place + intent to remain indefinitely
    (4) Resident Alien: citizen of whatever state in which the alien is domiciled.
    (5) Diversity involving Corporations: any state by which it has been incorporated and of the State
        where it has its principal place of business. No adversary of the corporation may be a citizen of
        the state in which the corporation is incorporated, or of the state in which it has its principal place
        of business.
             a. Determining principal place of business:
                        i. Nerve Center Test – where are the corporate decisions made?
                       ii. Muscle Center Test – where does the bulk of activity/manufacturing take place?
                  Most courts will use nerve center test unless all of the “muscle” is in a single state.
    (6) Unincorporated associations: Unincorporated associations, such as partnerships and labor
        unions, do not fall under the definition of corporate citizenship given in §1332(c). Instead the
        citizenship of each member must be considered.
Civil Procedure                                   last updated 2/10/2012                                Page 13 of 32

                  a.   Class action: Often, diversity can be preserved by brining a class action, naming only
                       those parties for whom complete diversity exists.

Amount in Controversy – 28 U.S.C. §1332(a): in all diversity cases, the amount in controversy must
exceed $75,000.
    (1) Proof not required: party seeking to invoke federal diversity jurisdiction does not have to prove
        that the amount in controversy exceeds $75,000. Just need to show some possibility that that
        much is in question.
    (2) Good faith: sum claimed by  controls if the claim is apparently made in good faith
    (3) “Legal certainty” test: claim cannot be dismissed for failing to meet the $75,000 requirement
        unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount.
    (4) Eventual recovery irrelevant: fact that  eventually recovers far less than the jurisdictional
        amount does not by itself render the verdict subject to reversal and dismissal on appeal for lack of
    (5) A.F.A Tours, Inc. v. Whitchurch: AFA’s diversity action was dismissed on grounds that amount in
        controversy requirement had not been satisfied, even though the issue had not been briefed.
             a. Holding: court may not dismiss a diversity action for failure to meet the amount in
                  controversy requirement if ’s claim is apparently made in good faith and no legal
                  certainty that damaged would not exceed $75,000.
    (6) Aggregation by single : if single  claim in excess of $75,000,  may add to it any other claim
        of his against the same , even though these other claims are for less than the jurisdictional
             a.  does not have any single claim worth more than $75,000, may add together all claims
                  against a single  [must total more than $75,000]
    (7) Aggregation by multiple s: if one  meets the jurisdictional amount, not completely clear
        whether the other s may join their related claims against that same 
    (8) No single claim meets the amount: if no single  has a claim or claims meeting the jurisdictional
        amount, aggregation by multiple s is not allowed.
    (9) Special restrictions for class actions: every member of the class had to satisfy the jurisdictional
        amount or as long as the named class representatives each have a claim in excess of $75,000, the
        supplemental jurisdictional doctrine applies, so that the unnamed members need not meet the
        jurisdictional amount.
Diversity                                              Constitution                          Statute
Article III §2                                    minimal                            §1332
                                                  no amount in controversy           complete diversity
                                                                                      >$75,000

Federal Question Jurisdiction – 28 U.S.C. §1331

Article II, Section 2 of the Constitution gives the federal courts jurisdiction over cases “arising under the
constitution, the laws of the United States, and treaties made or which shall be make under their

The statutory basis for federal question jurisdiction is 27 U.S.C. §1331 which provides that district courts
have original jurisdiction in all civil actions where the matter in controversy “arises under the
Constitution, laws, or treaties of the United States.”

“Arising Under”
Even though the language “arising under” is used in both provisions, it does not mean the same thing. The
statutory grant under §1331 has been construed far more narrowly than the meaning given to the same
constitutional language. The reasons for this narrow interpretation are based on the historical forces which
lead to the adoption of §1331.
Civil Procedure                               last updated 2/10/2012                                  Page 14 of 32

Statutes for both Diversity and Federal question interpretation are narrower then what the Constitution
Federal Question                                   Constitution                            Statute
“arising under”                               Article III                          §1331
                                              Osborn – overly broad                Mottley/’s claim rule
                                               interpretation of the “arising
                                               under” language of the               Holmes test/creates the claim
                                               Constitution, conferred SMJ           [which sovereign creates the
                                               over all cases which                  claim] (covers 90%-95% of
                                               conceivably involve federal           federal question)
                                               question                             [Smith’s test] federal element
                                              Ingredient                            in state claim (shouldn’t use
                                                                                     Smith jurisdiction)

Statutory basis: grant of original jurisdiction over federal question cases given in 28 U.S.C. §1331
“arising under the Constitution, laws, or treaties of the United States.” An action “arises under” the laws
of the United States, for purposes for federal question jurisdiction, if, and only if, the complaint seeks a
remedy expressly granted by a federal statute or if resolution of the issue requires that federal legal
principles control its disposition.
     (1) no need for diversity or amount in controversy in federal question cases
     (2) mere presence of a federal issue does not make it a federal question claim
              a. look only to ’s claim to determine if federal question exists
              b. ’s claim must be based on the federal law

Anticipation of defense insufficient: The federal question must be integral to ’s cause of action, as
revealed by ’s complaint. It does not suffice for federal question jurisdiction that the  anticipates a
defense based on a federal statute, or even that ’s answer does in fact raise a federal question. The
federal question must be part of a “well pleaded complaint.”
    (1) Louisville & Nashville R.R. v. Mottley: ’s claim in a federal suit that , a railroad, has breached
         its agreement to give the s free passes in return for their release of tort claims against it. A
         federal statute has recently been passed which prohibits the giving of such passes. The s
         anticipating that  will raise the federal statute as a defense, assert in their complaint that the
         statute does not apply to their case or, alternatively, that if it applies it would violated their 5 th
         Amendment right not to be deprived of property without due process. The matter goes to trial,
         where  does in fact claim the federal statute as a defense.
    (2) Holding: no federal question jurisdiction exited, because the federal statute was not essential to
         the plaintiff’s cause of action. It is not sufficient that the complaint mentions some anticipated
         defense and asserts that federal law governs the validity of the defense.
    (3) ’s Claim - Well Pleaded Complaint: Supreme Court test for “arising under” is that the federal
         law creates the cause of action or that the s right to relief necessarily depends on the
         resolution of a substantial question of federal law. A  cannot anticipate a federal defense by
         the  in her complaint and use that defense as a basis for federal jurisdiction. The federal
         question must appear on the fact of the well pleaded complaint.

Exceptions that are exclusive Federal Subject Matter Jurisdiction
§1334 Bankruptcy cases and proceedings under title 11 is a federal question
§1345 U.S. as  is a federal question
§1338 Copyright

     (1) T.B. Harms. v. Eliscu: Harms brought an action in federal court to determine the ownership of
         copyrights after Eliscu’s contract rights had expired. It was actually a property case rather than a
         copyright case.
     (2) Holding: Proper forum to hear a case is the one having control over the laws which created the
         cause of action. In this case, property laws of the state controlled.
     (3) Holmes test: a suit arises under the law that creates the cause of action . . . even though the claim
         is created by state law, a case my “arise under” a law of the United States if the complaint
         discloses a need for determining that meaning or application of such a law.
Civil Procedure                              last updated 2/10/2012                              Page 15 of 32

     (4) Smith v. Kansas City Title & Trust Co.: claim that, although created by state law, “arises under” a
         law of the United States by virtue of requiring a determination of the meaning or application of
         such law. A state created cause of action that the Supreme Court held that the action “arose
         under” federal law
     (5) General Rule: where is appears from the ’s claim that the right to relief depends upon the
         construction or application of the Constitution or laws of the United States, and that such federal
         claim is not merely colorable [deception appearance or disguise], and rests upon a reasonable
         foundation, the District Court has jurisdiction. (jurisdiction meaning very ambiguous)
     (6) Hartnett: if Congress hasn’t created a right of action [either explicitly or implicitly], it would
         undermine that congressional determination if allow Smith-type jurisdiction.

Removal from State Court to Federal Court

General right to remove: Generally, any action brought in state court of which the federal courts would
have had original jurisdiction may be removed by the  to federal district court.
    (1) Limitation: The most important limitation on this is that in diversity cases, the action is
        removable only if no defendant is a citizen of the state in which the action was brought. (28
        U.S.C. §1441(b)).
Removal statute: The right of removal is statutory, and is not mentioned in the Constitution. The basic
removal statute is 28 U.S.C. §1441.
    (1) §1441(a) – When a case is removed, it passes “to the district court of the United States for the
        district and division embracing the place where [the state] action is pending.” Only cases which
        could originally have been brought in the federal courts may be removed. [includes federal
        question, diversity cases, and miscellaneous federal jurisdictional cases]
    (2) §1441(b) – in federal question cases (of which by hypothesis the federal courts would have had
        original jurisdiction), the case may be removed by  regardless of citizenship or residence of the
    (3) §1441(b) – in diversity cases, the action may be removed only if no properly joined and served 
        is a citizen of the state in which the action is pending.
    (4) ’s ability to remove is based on original ’s claim, not ’s defense. Cannot remove based on
        federal defense or federal counterclaim (since federal counterclaim made by  is not the original
         and original  could not have filed claim in federal court)
    (5) Shamrock Oil & Gas Corp. v. Sheets:  sued  in state court.  introduced a counterclaim,
        which would have warranted federal jurisdiction if it was brought in a separate action, the 
        attempted to remove the case to federal court.
    (6) Holding:  may not remove a state-court action to the federal courts, even if  brings a
        counterclaim which satisfies the requirements of federal jurisdiction. Removal allows  to avoid
        potential prejudice they might suffer in state courts, when federal courts are constitutionally
        warranted to more well-suited at impartially resolving the dispute.
    (7) The right of removal is generally decided from the fact of the pleadings. The jurisdictional
        allegations of ’s complaint control.
    (8) Must remove before trial.

Challenging Subject Matter Jurisdiction

     (1) FRCP 8(a)(1) – requires arguments of Subject Matter Jurisdiction to be contained in the
     (2) FRCP 12(b)(1) – procedure to dismiss for lack of Subject Matter Jurisdiction, can either be
         asserted in responsive pleading or made by motion
     (3) FRCP 12(h)(3) – For waiver purposes, an objection to lack of jurisdiction over the person must
         be distinguished from one to lack of subject matter jurisdiction. The latter (e.g. “lack of
         diversity”; “jurisdictional amount not satisfied”) may be made at any time, by  or , even after
         trial, and even at the court’s own initiative (sua sponte).
Civil Procedure                                last updated 2/10/2012                                  Page 16 of 32

Ruhrgas Ag v. Marathon Oil Co.: case dismissed for lack of personal jurisdiction. Supreme Court held that
normal rule is to decide subject matter jurisdiction before deciding on personal jurisdiction. Not a firm
rule, only if subject matter jurisdiction is hard to decide on, then can decide on personal jurisdiction.

Venue, Transfer, and Forum Non Conveniens – Choosing Among Courts
Venue: designates the particular county or city in which a court with jurisdiction may hear an determine a
case. Venue in federal cases is controlled by 28 U.S.C. §1391, the general federal venue statute. Provides
mainly for venue based on the ’s residence, the place where a substantial part of the relevant events
occurred, or the place where  can be made subject to personal jurisdiction.

Which Federal District Court hears a case?
   (1) not a constitutional issue, purely statutory
   (2) venue rules do not apply to removal cases
   (3) venue rules do not apply in local actions (land cases, in rem), venue in local actions is where the
       land lies.
   (4) Transitory actions (all other types of cases) venue rules apply
   (5) Basic Venue Rules:
            a. §1391(a) Diversity cases
            b. §1391(b) Non Diversity Cases - Federal Question Cases

Three Methods: §1391 gives three basic methods for determining whether there is venue in a particular
judicial district:
     (1) if any  resides (not necessarily citizenship) in that district, and all s reside in the state
          containing that district (a test applicable in both diversity and non-diversity question cases)
     (2) if “substantial part of the events or omissions giving rise to the claim occurred, or a substantial
          part of property that is the subject of the action is situated…” in the district (test applicable to both
          diversity and non-diversity cases)
     (3) The “escape hatch” provision: for both diversity and federal question cases, there is a kind of
          “escape hatch,”, by which venue may be founded in a district with which at least one  has close
          ties, “if there is no district in which the action may otherwise be brought.” This escape hatch is
          mainly used in cases in which nearly all of the events occurred abroad.
                a. Diversity cases: in a case founded solely on diversity, the escape hatch gives venue in
                     any judicial district “in which any  is subject to personal jurisdiction at the time the
                     action is commenced, if there is no district in which the action may otherwise be
                     brought.” §1391(a)(3).
                b. Federal question cases: in a case containing a federal question, the escape hatch gives
                     venue in any judicial district “in which any  may be found, if there is no district in
                     which the action may otherwise be brought.” §1391(b)(3).
     (4) §1391(c) – Corporations – residence of a corporation for venue purposes matters only if the
          corporation is a . A corporation will be deemed to be a resident of any district as to which it
          would have the “minimum contacts” necessary to support personal jurisdiction if that district were
          a separate state. Corporation will be deemed a “resident” of at least the district where it has its
          principal place of business, any district where it has substantial operations, and probably any
          district in its state of incorporation. A corporation that only does business in a particular district is
          not deemed to reside in all districts of that state (treat multi-state district as separate).
     (5) Bates v. C & S Adjusters, Inc.:  alleging federal statutory violation, debtor() sues PA
          collection agency() in New York court and asserts jurisdiction is proper because the collection
          notices were forwarded to him in New York.
     (6) Holding: Venue exists in the district where the debtor resides and to which a collection notice was
          forwarded, regardless of the collection agency’s lack of intent to forward the notice. Action can
          be brought in “a judicial district in which a substantial part of the events or omissions giving rise
          to the claim occurred. Events giving rise to the claim do not necessarily have to be intentional.

     Transfer: In federal courts, the courts transfers the action to another district. 28 U.S.C. §1404(a)
Civil Procedure                               last updated 2/10/2012                                Page 17 of 32

     (1) Statutory standard: §1404(a) provides that “for the convenience of parties and witnesses, . . . a
         district court may transfer any civil action to any other district or division where it might have
         been brought.” A motion to invoke §1404(a) may be made by either party.
              a. ’s motion: transfer on the motion of  may be made only to a district where the 
                   could initially have been served with process. The district to which action is transferred
                   must be one in which venue would originally have been proper.
              b. ’s motion: trasfer on the motion of  may be made only to those districts “where 
                   would have had the right, independent of the wishes of the , to bring the action.
                   Consent by the  will not permit transfer to a forum where the action could of originally
                   have been commenced.
     (2) Hoffman v. Blaski: an Illinois resident brings suit in Texas against a Texas corporation which, in
         turn, transfers the suit back to Illinois venue even though the Illinois resident could not have
         initiated the suit there himself.
     (3) Holding: §1404 does not give a federal court in which an action was properly brought the power
         to transfer the action to a district in which  could not have properly brought the action. Transfer
         of an action to another district is made to depend not upon the wish or waiver of the  but, rather,
         upon whether the transferee district was one in which the action ‘might have been brought’ by the

Forum Non Conveniens: a court having jurisdiction over a particular case my use its discretion to decline
to exercise that jurisdiction, if the court concludes that the action could be more appropriately tried in some
other jurisdiction.
     (1) when the inconvenience problem can be solved by transfer to another federal district, the court
         may not dismiss; but is the proper forum is in another country, the federal court can dismiss
     (2) Unfavorable change in law insufficient: the mere fact that the law of the alternative forum is less
         favorable to the  is not by itself grounds for denying the ’s forum non conveniens motion.
     (3) Piper Aircraft Co. v. Reyno: Scottish heirs of plane crash victims in Scotland try to sue for
         wrongful death in an American courts because American courts recognize wrongful death as a
         cause of action and are known generally to be more favorable to s than the courts in Scotland.
     (4) Holding: fact of a substantive law being less favorable to s in an alternative forum should not be
         given conclusive or even substantial weight in applying the doctrine of forum non conveniens.
         Purpose of forum non conveniens doctrine is to assure that the litigation takes place in the most
         convenient forum.
     (5) Forum non conveniens harder to obtain than §1404 (change of venue)
     (6) Current practice with use of §1404, major forum non conveniens is granted to foreign s (in favor
         of foreign litigation)

§1406 Cure or waiver of defects:
           (a) if venue in wrong district or division, district court shall dismiss OR in the interest of
               justice, transfer case to any district or division in which claim could have been brought

NOTES on Transfer:
  (1) can only transfer in same system
  (2) §1404 & §1406: can transfer to district that has personal jurisdiction over  and venue is proper
  (3) §1404: original court is proper venue, but another would be better
  (4) §1406: original court is not proper venue, as such must transfer
  (5) §1404: looks to convenience: interest of parties
  (6) §1406: court can transfer or dismiss

Applicable Law – Conflict of Law

The Erie Decision and its progeny

Forum shopping: federal courts’ desire to discourage “forum shopping.” If a particular case could be
brought in either state or federal court, and the state courts would apply rules of law different from those
Civil Procedure                                        last updated 2/10/2012                                            Page 18 of 32

that would be applied by the federal court, the  (and in situations where removal is possible, the ) will
have an incentive to choose the court more favorable to her case. To prevent forum shopping of this sort,
the courts generally apply state law in diversity cases.

Rules of Decision Act: 28 U.S.C. §1652, states that in civil actions, the federal courts must apply the “law
of the several states, except where the Constitution or treaties of the United States or Acts of Congress
otherwise require or provide.
     (1) The Rules, has always been taken to mean that the federal Constitution, treaties, and
          constitutional Acts of Congress always take precedence, where relevant, over all state provisions.
          This rule applies to proceedings in federal and state courts alike.
     (2) State statues: Act has also always been taken to mean that in the absence of controlling federal
          provisions, the federal courts will be bound to follow state constitution and statutes.
     (3) Dispute about common law: These has been much dispute about what law the federal courts
          should apply where there is no controlling constitutional or statutory provision, federal or state;
          that is, where the “law” in question is the so-called “common,” or judge-made, law.

Swift v. Tyson:
             (i.)           federal courts were bound by state court opinions which construed the state’s
                            constitution or statutes, or which pertained to real estate or other essentially local,
                            immobile matters
                  (ii.)     in all other questions the federal courts were free to evolve their own common law
                            irrespective of what state courts were doing. In other words, the phrase “laws of the
                            several states” in the Rules of Decision Act did not encompass “general” common
                  (iii.)    narrow view of the phrase “laws of several states”
                  (iv.)     phrase “laws” does not encompass the decisions of courts
                  (v.)      RDA is limited only to positive statutes of states
                  (vi.)     Judges discover the true common law, free to engage in their own search for the truth

Balck and Whit Taxicab v. Brown and Yellow Taxicab:
     (1) Kentucky cab company, in order to form a monopolistic arrangement with a Kentucky railroad which it knew the state
          courts would not enforce, reincorporated in Tennessee to create diversity so as to be able to sue its Kentucky competitors in
          federal court.
     (2) Holding: citing Swift, agreed that the monopoly was enforceable at general federal common law, and that state law should
          be ignored
     (3) Holmes’s dissent: a new “realist” doctrine that no “transcendent body of law outside of any particular state” exists, htat the
          common law of a state is as much a creation of the state’s sovereign power as the statutory law, and that therefore the
          federal courts under the RDA should be bound to follow state common law. To refuse to follow state law was “an
          unconstitutional assumption of powers by the Courts of the United States.”

In Search of Uniformity

Erie Railroad v. Tompkins (1938): transformed Holmes’ dissent in Taxicab into the law of the land.
     (1)  a pedestrian who was injured when a bar protruding from an  car struck him, sued in federal
         courts and alleged that federal common law should govern the action
     (2) Holding: Supreme Court agreed with the Holmes Taxicab dissent that the Rules of Decision Act
         applies to common law as well as to constitutional and statutory provisions. The Swift doctrine
         was held unconstitutional, as it allowed the federal courts to make law in areas where the power
         to do so had never been granted to the federal government by the Constitution.
              a. Historical evidence: the Court claimed that new evidence had been produced
                  demonstrating that the Rule of Decision Act was intended by its authors to include state
                  common law.
              b. Discrimination: the practical results of Swift were undesirable, “introduced grave
                  discrimination by non-citizens against citizens. It made rights enjoyed under the
                  unwritten ‘general law’ vary according to whether enforcement was sought in the estate
                  or federal court; and the privilege of selecting the court in which the right should be
                  determined was conferred upon the non-citizen.” In other words, the Swift doctrine gave
                  the non-citizen the ability to “forum shop” for the forum most favorable to him.
Civil Procedure                                           last updated 2/10/2012                                              Page 19 of 32

                  c. Unconstitutional: discrimination against citizens by itself would not have been enough
                     to induce the Court to abandon Swift; “but the unconstitutionality of the course pursued .
                     . . compels us to do so. . . . There is no federal general common law. Congress has no
                     power to declear substantive rules of common law applicable in a state, whether they be
                     local in their nature or ‘general,’ be they commercial law or a part of the law of torts.
                     And no clause in the Constitution purports to confer such a power upon the federal
     (3)   Erie repudiates Swift in trying to build an interstate economy; tying laws to particular sovereign
           and no federal “general” law
     (4)   An assumption of powers not granted to courts by the constitution
     (5)   Goal of Erie was to maximize uniformity of outcomes between federal and state courts when
           federal courts within the same district ruled on state causes of action
     (6)   When there is no clear case law precedent or statute on point, the federal court must apply the
           state’s law as announced or would be announced by the state’s highest court today. A federal
           judge has to predict how a state superior court judge would rule taking into consideration lower
           and intermediate state court decision as well as developing trends.

Twin Aims of Erie:
   (1) prevent forum shopping – concerned that law should not change with time and place and be
       subject to manipulation (i.e., if the federal court did their own thing on this issue, is this the kind
       of issue that would cause people to flock to federal courts? If so, apply state law)
   (2) avoid inequitable administration of laws – rule allowed the out-of-state  to choose the most
       favorable substantive law because they could choose federal court

Substantive Rules Found in Rules on Appellate Procedure: if a state statue requires that an appellate court must follow
a certain rule in deciding whether to overturn the result of a jury trial, this state may have so much “substance”
embedded in it that the federal courts must follow the rule as closely as they can. True even it lead to a lack of
uniformity in the federal system.

Gasperini v. Center for Humanities, Inc. (1996): federal court applied a state law standard in reviewing whether a jury’s verdict was
excessive, despite the contrary mandate of the 7th Amendment.
(1) Holding: New York statute was designed to curtail unduly-large jury verdicts, in the same way that a statutory cap on damages
might have done. State’s objective is thus “manifestly substantive.” If the federal courts don’t apply the same standard for review of
jury decisions, different (and substantially larger) recoveries will be obtained in diversity suits than in suits on the same subject matter
brought in New York courts, and forum-shopping will be encouraged (arguments of Hanna Part I).

The Outcome Determinative Test

Guaranty Trust Co. v. York (1945): involved the applicability of a state statute of limitations to a right of
action arising under state law, but tried in federal court;  sued  in federal district court in order to avoid
an application of a state statute of limitations, which would have barred the case in state court
     (1) Holding: in the context of Erie, required that the federal courts obey the state statute of
     (2) Didn’t distinguish Erie on the basis that it involved state “substantive” law while York involved
     (3) Question is whether such a statute concerns merely the manner and the means by which a right to
         recover, as recognized by the State, is enforced, or whether such statutory limitation is a matter of
         substance in the aspect that alone is relevant to our problem, namely does it significantly affect
         the result of a litigation for a federal court to disregard a law of a State that would be
         controlling in an action upon the same claim by the same parties in a State?”
     (4) Outcome-determinative test: if following a federal practice not available in state court might
         “significantly affect the result of a litigation,” the court must apply the state rule instead, to
         prevent diverse parties from gaining unfair advantages simply because they can choose federal
     (5) Court adjudicating a state-created rights solely because of diversity the court in effect only another
         court of the state
     (6) Problems:
Civil Procedure                                          last updated 2/10/2012                                             Page 20 of 32

                  a.   York broadened the Erie doctrine beyond the area in which it is constitutionally
                       compelled by the limits on federal power  effectively eliminated the strength of the
                       FRCP in diversity cases
                  b.   York’s outcome-determinative test required federal courts to use state law in many cases
                       even though Congress or the federal court would have the power to adopt a separate rule
                        constitutional authority to make procedural rules (Article I & II)
                  c.   Diversity jurisdiction affords litigants another tribunal, not another body of law

The Balancing Test

Byrd v. Blue Ridge (1958):  sued  for negligence, and a factual determination of the status of ’s
employment was required in order to determine the appropriate forum
    (1) Holding: absent other considerations, federal courts should follow state procedure even when
         federal courts had authority, if applying the federal rule would substantially affect outcome of
         litigation. However the court found that different outcomes were acceptable if the federal rule
         being applied was too important to be waived (constitutional rights for example). In this case, the
         7th amendment right to trial by jury justified the different outcomes. FRCP should be used.
                  a.   Outcome-determinative: the state policy might be outcome-determinative, and therefore “in the absence of
                       other considerations,” the federal courts should follow it
                  b.   Federal policy: on the other hand, the federal policy requiring jury trial of such “factual” issues was a very
                       strong one and could override the state policy. “It cannot be gainsaid that there is a strong federal policy
                       against allowing state rules to disrupt the judge-jury relationship in the federal courts.”
                  c.   Weak state interest: Also, the state interest in having the trial judge decide the question of employee status did
                       not seem to be a strong one; it was “not a rule intended to be bound up with the definition of the rights and
                       obligations of the parties.”
                  d.   Probability of outcome-determination: in any case, the decision between judge-and jury-adjudication was
                       less likely to “determine” the outcome of the suit. The decision here might influence the outcome, but it was
                       less likely to make a decisive difference than in most of the other cases where the Court had applied outcome-
     (2) “Balancing” test –Effect of Byrd: state decisions that are basically procedural (though they may,
         of course, affect substantive rights) are not necessarily controlling even if they are outcome-
         determinative. The federal interest in the proper maintenance of the federal judiciary has to be
         given some respect, and controls if the federal policy is significantly stronger than the state policy.
     (3) In areas of “form and mode,” where the court is not constitutionally “bound” to follow state law
         but only does so as a matter of policy (think York), the court must consider not only the outcome-
         determinative test of York, but also any countervailing federal policies that arise from the courts
         status as an independent judicial system
     (4) Reaffirmed that broader approach of York, under which the federal court, in order to assure
         uniformity of outcome, applies outcome-determinative state law even on procedural issues as to
         which there is federal constitutional authority to apply a separate rule
     (5) Key distinction the court made was between “bound up with state created rights and obligations”
         and a state’s “form and mode of enforcing”

The New Framework

Hanna v. Plumer (1965): removed the FRCP entirely from the scope of the Erie decision
   (1)  sued in MA district court for negligence following an auto accident, using a substitutied service
        of process rather than in-hand service as required by MA statute
   (2) Holding: Rule 4(d)(1) was “in harmony with the Enabling Act,” and that Rules thus valid are are
        not overridden by state policies or laws. Erie doctrine is not controlling when a valid Federal
        Rule is in conflict with state common-law policy

Hanna Part I (involving the typical “relatively unguided Erie choice” between an uncodified federal
judicial practice and state law” – Rejection of Outcome-Determination: outcome-determination analysis
was never intended to serve as a talisman. The ‘outcome-determination’ test . . . cannot be read without
reference to the twin aims of the Erie rule: discouragement of forum-shopping and avoidance of
inequitable administration of the laws.”
                      Look at “outcome determinative” test at the outset of suit, not at the particular point where there is a problem
Civil Procedure                                        last updated 2/10/2012                                          Page 21 of 32

A Modified Outcome-Determinative Test: whether a federal procedure is outcome determinative must be
viewed in light of the Twin Aims Erie sought to avoid:
    (1) Forum Shopping – did the  choose federal court to avoid an unfavorable state procedural rule?
    (2) Inequitable Administration of Laws – Does using the federal rule alter the mode of enforcement
        of a state created right so much that it raised the equal protection problem Erie wanted to avoid?

Hanna Part II (analysis for cases in which an official FRCP conflicts with state law) – Rules Enabling
            Key is that Rules Enabling Act, enacted by Congress, authorized Supreme Court to
                prescribe general rules and procedures for federal courts. An advisory committee
                appointed by Supreme Court drafted FRCP and FRCP’s adoption has both statutory and
                constitutional authority. (Article III).  Congress and the Supreme Court have the
                authority to promulgate any rule that is arguably procedural.
            Therefore, the court has the authority under the Rules Enabling Act (REA) to enact any
                federal rule that is “arguably procedural” (even in diversity cases)
                     28 U.S.C. §2072 (a) “Supreme Court power to prescribe general rules of practice and procedure for cases in the
                      United States district courts.”

To Follow FRCP or Not - Constitutional Test:
    (1) Decide if rule promulgating from the REA is constitutional
    (2) If an gray area between substantive or procedural, “if arguably procedural, then it can be
        procedural” since court authorized under REA to adopt any Federal Rules that is arguably

Counter Arguments to Hanna Part II:
                  That rule is not procedural and that it is arguably substantive, although the odds are against you because
                   Congress, the Supreme Court and the Rules Advisory Committee all thought it was procedural
                  That rule is part and parcel of the right of action
                  That the state is qualified to make rules on these matters. States are independent governments within the federal
                  That it violated Rule Enabling Act’s (§20 U.S.C. §2072(b)) prohibition against any federal procedure that
                   abridges, enlarges, or modifies any substantive right
                  Unlikely to be successful since no rule has ever been found to violate this prohibition

When the Rules Aren’t in Conflict

“how does one determine whether similar rules are conflicting?”

Walker v. Armco Steel Corp. (1980): whether the federal court sitting in diversity should follow state law
or FRCP Rule 3 in determining when an action is commenced for the purpose of tolling the state statute of
limitations. Basically, using the federal rule, the ’s suit could proceed; using the state rule, the ’s suit
would be bared by the state’s statue of limitations
     (1) Holding: Rule 3 and the state statute did not directly conflict because the OK statute in question
         said that a statute of limitations was tolled when the  had been actually served and had received
         actual notice. The court held that the ’s case was brought past the statute of limitations and that
         there was no reason it should be given extra life simply because there was diversity of citizenship
         between the parties.
     (2) State statute of limitations is not affected by Rule 3, and that Rule 3 should merely be used to
         govern the date from which the various FRCP begin to run
              a. Court found that ignoring the state law would lead to inequitable administration of laws
     (3) Federal statutes will only “trump” state law when there is a “direct collision”
              a. Hanna Part II analysis is premised upon a “direct collision” between federal rule and state
              b. When there is NO direct conflict, Modified Erie (Hanna Part I) is the correct analysis
              c. Not to imply that FRCP should be narrowly construed so as to avoid collision
Civil Procedure                                   last updated 2/10/2012                                Page 22 of 32

                  d.   Federal procedural rule will not be applied in diversity when its effect would be to toll
                       (stop) a state statute of limitations when a state statute requires more such as service of

Conflict between Congressional Statute and State Policy

Conflict between a federal statute directly enacted by Congress, and as state policy or statute.
If a valid congressionally-enacted procedural statute outside of the Federal Rules conflicts with a state law
or policy, the federal statute will control even though this may promote forum shopping.

Stewart Org., Inc. v. Ricoh Corp. (1988): case involving transfer of venue illustrates how a federal
procedural statute will prevail over even a strong state policy. Relying on a forum selection clause in their
dealership agreement, (Ricoh) attempted to transfer a case from Alabama to New York district court. AL,
as a matter of public policy, refuses to enforce, or even weight to, a contractual forum-selection clause.
Federal system (28 U.S.C. §1404(a)) allows the district court to transfer the case to a different district court
for the convenience of the parties.
     (1) Holding: federal statute must be followed. Using Hanna Part II, ask whether:
              a. the statute is ‘sufficiently broad to control the issue before the court’
              b. whether the statute represents a valid exercise of Congress’ authority under the
                  Constitution – [the constitutionality of something in a statute is whether it is ‘arguably
              c. if yes, end of dispute

Breaking It Down – The Frame Work for Analysis

      When the Federal Constitution conflicts with a State Law – The Constitution is the supreme law
       of the land and it will always prevail. (right to jury trial)
      When a Federal Statute conflicts with a State Law – Is the Federal Statute valid? The test here is
       whether the conflicting procedure in question can rationally be classified as “arguably
       procedural.” If it can, then the federal statute wins because of supremacy. (Something out of the
       U.S.C. or the U.S.C.A.)
      When a FRCP conflicts with a State Law – Is the Rule valid (“arguably procedural”)? Use
       Hanna Part II. Basically all FRCP’s will win as long as they do not enlarge, abridge, or modify, etc.
       They never have. (service of process)
      When a Federal Judicial Practice conflicts with a State Law – Is the Federal practice valid? Use
       Hanna Part I – Is there a real danger of the “twin evils” of Erie? If no, then a valid federal practice
       prevails over contrary state provision whether found in state constitution, state statutes, state rules,
       or state judicial practice.
      No Direct conflict between Federal and State Rules – If the issue is arguably procedural, the
       federal court must balance the state and federal policies against each other. If the state interest is
       strong and the federal interest weak, then the federal court should use the state procedure. The
       reverse would hold if the opposite were true.

Three Lines of Inquiry (for federal courts sitting in diversity)
(1) Is there a valid federal statute or federal rule of procedure on point, such as a provision of FRCP or
     If so, then the federal law is to be applied, even if there is a conflicting state law (REA)
         This is an issue invoking the Rule Enabling Act
         (1) determine if the federal law is valid as according to the analysis under Hanna II
                  a. Is the rule “arguably procedural”? Does it violate §2072(b)?
                  b. Is it constitutional? (as per Article III)
         (2) The federal statue is on point:
              Stewart two part test:
                  a. Is there a “direct collision”? Is it broad enough so as to sufficiently cover the issue at
                       hand? Can they both co-exist?
                  b. Is the law constitutional?
Civil Procedure                                         last updated 2/10/2012                                              Page 23 of 32

           Therefore, if there is a federal statute that is constitutional, sufficiently broad enough to cover
          the issue, and directly collides with a state law, the federal law win as according to the Supremacy
          3 Sources of Federal law:
          (1) federal common law – use outcome determinative test
          (2) federal rules – Hanna II
          (3) federal statutes - above

(2) If there is no valid statute or rule of procedure, is the application of the state law in question likely to
    determine the outcome of the lawsuit?
          If the state law is NOT outcome determinative, then the federal law is used. (Hanna I, guided
         by goals of Erie Doctrine)

                 This is an issue of the RDA
                 Essentially, this means that there is no federal statue ON POINT, though there may be a very similar federal rule, it
                  just simply does not collide with the state law at issue – they can both co-exist.
                 Therefore, you must decide whether the state law is outcome determinative (York and as modified in Hanna I)
                           o Will not applying the state law promote forum shopping?
                           o Will not applying the state law lead to similar cases being determined differently (inequitable

(3) If the state law is deemed to be outcome determinative, then. . . Is there an overriding federal interest
    justifying the application of federal law?
          If no countervailing federal interest, then state law controls. Otherwise, federal law is applied.
         (Byrd and Gasperini)

                 As seen in Byrd, the court refused to apply the state laws in that instance because it interfered with a federal policy:
                  state laws should not interfere with the essential function or character of a federal court
                 In applying this test, federal courts are to be guided by the goals of the Erie doctrine, which are to prevent forum-
                  shopping and the inequitable administration of justice.

Ascertaining State Law

Which state law does a court apply?
Two choice of law:
   (1) general law
             a. federal law of choice of law
   (2) adopt the choice of law of state where court sits

Klaxon Co. v. Stentor Electric Mfg. Co: must a federal court apply the conflict-of-laws rules of the state in
which it sits?
    (1) In order to promote uniform application of substantive state law, federal courts must apply the
         conflict-of-laws rules of the state in which the federal court sits.
    (2) When a case is transferred under §1404, the law shall not also change. The transferee court shall
         apply the law that the transferor court would have applied had the case not been transferred.
    (3) Price of federal system: the combination of Erie and Klaxon, is tht while it provides “vertical
         uniformity” between the state and federal courts within each state, “horizontal uniformity” is
         sacrificed among the federal courts in different states (more concerned with courts in the same
         state reaching the same result)

Federal Court (diversity) – Which State’s Law to Apply?
   (1) state in which it sits (substantive law)
   (2) actions arose/events occurred (own choice of law)
   (3) choice of law rules of state where court sits

Mason v. American Emery Wheel:  was injured by an emery wheel constructed by the  and sued this
manufacturer, although he was not in privity of contract with the manufacturer
Civil Procedure                                      last updated 2/10/2012                                           Page 24 of 32

     (1) Holding: A state supreme court holding need not be followed by a federal court sitting in
         diversity if that ruling has lost its vitality. It is therefore up to the court to decide how the state
         court would rule on that issue today (look to dicta, recent judicial trends, etc.)
     (2) The decision here essentially allows district courts a back door out of being bound by what they
         find to be imperfect state law (very Swift-like)
              a. But in the end, the state itself has the last word and it is not bound by the federal court’s

Modern Pleading: (Notice Pleadings) Pleadings serve the function of giving notice to the opposing

General Principles
  Rule 7 - Pleadings Allowed; Form of Motion
            o (a) – establishes allowable pleadings
            o (b) – discusses motions
            o (c) – abolished use of demurrers for insufficiency of pleading
  Rule 8 – General Rules of Pleading (what pleadings must look like)
            o (a) – complaint must contain short and plain statement of claim showing entitled to relief
            o (b) – Answers – in form of denials: admit, deny, insufficient knowledge to admit or deny
                              types of denials allowed:
                                         specific denial – applying to only parts of the pleadings
                                         complete denial – applying to the entire complaint
                                         general denial – applying to the entire complaint, except paragraphs specified
                  o   (c) – list of affirmative defenses ‘yes, but’, which may be raised specifically
                  o   (d) – if an allegation is not answered when required, it is admitted; and those allegations
                      not requiring response are considered denied
                  o   (e) – consistency of pleadings: may be inconsistent, but must be simple, concise, and
                  o   (f) – construe pleadings so as to do “substantial justice”

Under Federal Rules, there are three pleading stages:
   (1) a complaint
   (2) an answer
   (3) a reply

The Complaint:
Rule 8(a): a complaint must contain
             1) a statement of the court’s grounds for jurisdiction
             2) a short statement of the claim, what the pleader is entitled to; and
             3) the relief sought (demand for judgment)

DioGuardi v. Durning:
  federal rules merely require that the complaint contain a statement showing that the person making
     the complaint is entitled to relief
  as required by Rule 8(f), cannot deny a person his day in court merely because of the form of his
   need state only facts, not the legal theory his is relying on
  sufficient that  gives his adversary enough information about the claim to allow the latter to frame
     an answer and to commence discovery

Rule 15 sets forth an extremely liberal policy on the amendment of pleadings
Rule 15(a): the parties have the right to amend a pleading once before a responsive pleading (answer) is
served, or within 20 days of service of the pleading. Thereafter, a pleading may only be amended by
Civil Procedure                               last updated 2/10/2012                               Page 25 of 32

consent of the adverse party or by leave of the court – leave to amend shall be freely given when justice so
Rule 15(b): Amendment is generally allowed at trial when the evidence is objected to as being outside the
scope of the pleadings, can amend even at trial
Rule 15(c): where a pleading has been amended, if the claim or defenses asserted in the amended pleading
“arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original
pleading,” the amendment related back to the date of the original pleading

Beeck v. Aquaslide: Rule 15(a)
   motion to amend an answer should be granted unless the opposing party can show prejudice
            o prejudice may be shown in various ways: delay, bad faith, or dilatory motive by the
                 moving party
            o however, prejudice must be actually shown, not just suggested
            o prejudice = unfair, not just hurtful

Fostering Truthful Allegations

Rule 11
  Requires that some discovery must be done prior to the complaint being filed. A lawyer needs to be
      certain that the claims are warranted and not frivolous because he is making a representation to the
      court that he is submitting is a “good” complaint. The court has the authority to sanction the
      lawyers, firms, or parties that are irresponsible.
  Attorney by presenting to the court a pleading, written motion, or other paper, certifies that to the
      best of her knowledge, information, and belief formed after an inquiry reasonable under the
    (1) the paper is not presented for any improper purpose (harassment, delay, etc.)
    (2) the legal contentions therein are warranted by existing law or a nonfrivolous argument for the
        establishment of a new law
    (3) the allegations and factual contentions either have, or upon further investigation or discovery are
        likely to have, evidentiary support
    (4) denials of factual contentions are warranted on the evidence or where specified are reasonably
        based on a lack of information and belief

if lawyer’s show good faith in brining up claim and do not waste court’s time then no sanctions otherwise...

Sanctions: the court may impose sanction against a party who presents a paper in violation of any of the
above requirements
** Prior to the amendments (1993), the imposition of these sanctions was mandatory. Now the court has
the discretion to impose only what is sufficient to deter repetitive conduct – motions for violations served,
but not filed

21 day safe harbor violation, prepare motion, serve on adversary, give adversary 21 days to withdraw
action, then run to court to get results

Anderson v. Cryovac: invoked Rule 11(b)(3) – “factual contentions are likely to have evidentiary support
after a reasonable opportunity for further investigation or discovery” – state so courts will know that 
does not have all the evidence but with discovery, will be able to gather information

Rule 11 Criticisms:
  generates too much satellite litigation
  unfair to , imposes sanctions on ’s more often than s

  Joinder – expanding beyond single  and single 
Civil Procedure                                 last updated 2/10/2012                                   Page 26 of 32

  Exam Tip
  When analyzing any types of joinder (claims or parties), make it a two-step process:
  (1) find the procedural rule allowing the joinder
  (2) make sure the court has subject matter jurisdiction either by §1331 (claims arising from federal
      question) or §1332 (diversity and amount in controversy)
       if not look for supplemental jurisdiction under §1367 (“derive from a common nucleus of
      operative fact”)
       NOTE: §1367(b) does not allow supplemental jurisdiction when original jurisdiction is based
      solely on §1332 over claims by plaintiffs against person make parties under Rule 14 (third party ),
      19 (joined if feasible), 20 (permissively joined), or 24 (intervene)

  Supplemental Jurisdiction is jurisdiction over claims brought between existing parties or between existing
  and new parties, for which there is no federal subject matter jurisdiction if those claims are considered

  Supplemental jurisdiction - which claims and parties may be brought into a federal case without
  independently satisfying subject matter jurisdictional requirements, once there is a basic controversy as to
  which there is subject matter jurisdiction.

  Supplemental Provision: 28 U.S.C. §1367 codifies the “ancillary” and “pendent” concepts, and
  combines them into a single notion.
  (1) Provision: core of §1367 comes in subsection (a), which says generally that “in any civil action of
      which the district courts have original jurisdiction, the district courts shall have supplemental
      jurisdiction over all other claims that are so related to claims in the action within such original
      jurisdiction that they form part of the same case or controversy under Article III of the Constitution.
      Includes claims that involve joinder or intervention of additional parties.”
           a. Jurisdiction given by §1367 is much broader than that developed by case law prior to
                §1367’s enactment
  (2) Diversity exclusions: where the ‘core’ claim – the claim as to which there is independent federal
      subject matter jurisdiction – is based solely on diversity, §1367’s grant of supplemental jurisdiction is
      a bit less generous. This situation corresponds to the pre§1367 concept of ‘ancillary’ jurisdiction.
      §1367 generally allows claims that would have been ancillary to fall within the Court’s supplemental
      jurisdiction in diversity-only cases, and thus eliminates the requirement of diversity and amount-in-
      controversy as to the supplemental claim. But §1367(b) sets forth some explicit and important limits
      on supplemental jurisdiction.
           a. Theory of exclusions: where the core claim is founded solely on diversity, additional
                claims asserted by s are within the Court’s supplemental jurisdiction, but additional claims
                (the addition of new parties) by s are severely restricted.
           b. Excluded claims and parties:
                      i. Claims against third-party defendants: claims made by a  against a third party
                          defendant, pursuant to Rule 14(a), are excluded from supplemental jurisdiction
                     ii. Compulsory joinder: Rule 19(a) allows the joinder of “persons to be joined if
                          feasible.” Neither a claim against such a person, nor a claim by that person, comes
                          within the supplemental jurisidciton in a diversity-only case.
                    iii. Rule 20 joinder: Supplemental jurisdiction also does not apply in diversity-only
                          cases for claims by s against parties “permissively” joined pursuant to Rule 20.
                          (Rule 20 allows multiple people to be joined as s if ‘there is asserted against them
                          jointly, severally, or in the alternative, any right to relief in respect of or arising out
                          of the same transaction, occurrence, or series of transactions or occurrences and if
                          any question of law or fact common to all defendants will arise in the action.
                    iv. Claims by Rule 20 s not excluded: allows an outsider to come into a Rule 20
                          action under permissive co-
                     v. Intervention: claims by prospective s who try to intervene under Rule 24 do not
                          get the benefit of supplemental jurisdiction.
Civil Procedure                                         last updated 2/10/2012                                              Page 27 of 32

  Joinder of Claims: Supplemental Jurisdiction – formerly “pendent” jurisdiction

  General Rule:
  Rule 18(a) if party A is properly asserting one claim against party B, party A may assert any other claim
  against party B. No requirement that the claims must be related
      parties can join all claims regardless of relatedness; limited only by federal subject matter
      Controlling Mechanism
                   Rule 42(b) Separate Trials – giving court discretion to separate matters for trial
                   Court may not have subject matter jurisdiction over other claims

Rule 18(b) defendant joining claims

United Mine Workers of America v. Gibbs (1966):  asserted a federal claim and a state claim there were
based on the same dispute. There was no diversity between the parties and since the 2 nd claim was based
on state law, the federal court did not have subject matter jurisdiction over it
     (1) Holding: a federal court may hear a ’s state law claim because Article III of the constitution
          gave the courts jurisdiction over “cases” and not just claims. So long as the ’s primary claims is
          one that the federal court does have jurisdiction over, the court would be able to adjudicate over
          claims arising out of the same common nucleus of operative facts (arise out of the same set of
          historical facts).
                     Are the ’s claims so related that he would ordinarily be expected to try them all in one judicial proceeding?
                     If it appears that the state claim constitutes the real body of a case and the federal claim is only an appendage,
                      the state claim may be fairly dismissed. (This dismissal would be without prejudice and therefore the state
                      claim could be heard in state court.)
                     Supplemental claim share common nucleus of operative facts with the federal question so federal courts can
                      have subject matter jurisdiction

Rule 13 distinguished between compulsory and permissive counter claims:
  Rule 13(a) Compulsory Counterclaims – if counterclaims arises out of the same transaction or
      occurrence,  must join during present trial because use it or lose it rule, be sure to established
      independent subject matter jurisdiction (refer to exam tip above)
                  o   Arises from the same transaction or occurrence as the ’s claims and don’t require third party who at least
                      court has no jurisdiction over.
                  o   Claims must be joined and asserted under §1367 at the time of trial, otherwise that claim is then forever barred

Great Lakes Rubber Corp. v. Herbert Cooper Co. (1961): ’s original claims against  were originally
dismissed, and  attempted to reinstate the claims by counterclaiming to ’s counterclaims.
    (1) Holding: counterclaims bearing a logical relationship to an opposing party’s claims, requiring
        investigation of the same facts, cannot be dismissed.
    (2) Counterclaim is logically related where separate trials on each of their claims would involve a
        substantial duplication of time and effort.
    (3) Test to determine compulsory counterclaims (same test for ancillary jurisdiction)
             a. If a counterclaims is compulsory, it is deemed ancillary to the ’s claim and needs no
                 independent jurisdictional grounds to support it. (§1367: supplemental jurisdiction for
                 claims so related that they form part of the “same case or controversy” under Article III)
                 (will not be killed by §1367(b) because claim is made by  not )
             b. A permissive counterclaim needs an independent jurisdictional basis (§1367 will not kill
                 this either because still raised by  not )

      Rule 13(b) Permissive Counterclaims – claim against opposing party not arising out of the same
       transaction or occurrence
                  o    may assert these claims, but does not have to
      Rule 13(g) Cross-Claim Against Co-Party – (generally, no independent jurisdiction needed) allows
       for one party to state any claim it has against any co-party arising out of the same transaction or
       occurrence only that is the subject of either the original claim or a counterclaim. Still need subject
       matter jurisdiction NOT COMPULSORY!
Civil Procedure                                         last updated 2/10/2012                                             Page 28 of 32

                  o   Against a co-party (another , not )
                  o   For subject matter jurisdiction, same steps as a counter-claim
                  o   Cross-claim may include a claim that the party against whom it is asserted is liable for the claim asserted in the
                      action against the party

Joinder of Parties - Pendent Party Jurisdiction

Rule 13(h) Joinder of Additional Parties – parties not part of the original action may be made parties to
a counterclaim or cross claim as per Rule 19 or 20.

Rule 20(a) Permissive Joinder of Parties –
  allows multiple people to be joined as s if there is asserted against hem jointly, severally, or in the
      alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or
      series of transactions or occurrences and if any question of law or fact common to all s will arise in
      the action
  also allows outsider to come into the action as a permissive co-plaintiff, §1367(b) does not bar
      supplemental jurisdiction
  a claim arising out of the same transaction or series of transactions and
  if there was at least one common question of law or fact, (the joined parties need not be interested in
      obtaining or defending all the relief asserted)
  allows for efficient litigation and avoids the possibility of inconsistent judgments on the same issues
  NOTE: Rule 20(a) does not require the parties to be joined. At least initially, the joinder decision is
      left to the s

Aldinger v. Howard: pendent party jurisdiction is more limited than pendent claim jurisdiction, requiring
express or implied congressional intent not to negate such jurisdiction.

Finley v. United States: , whose husband and two children were killed when their airplane struck electric
power lines, sued the United States under the Federal Trot Claims Act for negligent airport maintenance
and attempted to join tow related state claims, against the city and the utility company.
    (1) Holding: City, utility company and United States cannot be brought in as pendent parties. Unless
         Congress affirmatively state, for the particular federal statute in question that new parties may be
         brought in to related pendent state claims, such pendent party jurisdiction will not be allowed.
         Since Congress has remained silent about whether additional parties to pendent state claims can be
         brought where jurisdiction is based on the federal statute, this silence means that  cannot bring in
         additional s.
    (2) Reversed by new statute: Supplemental Jurisdiction §1367 reversed the result and logic of Finley

Impleader:  alleging that a 3rd party is liable to him “for all or part of the ’s claim against him” may
“implead such a person as a ‘third-party-’” Rule 14(a)

Impleader by :  against whom a counterclaim is filed may implead a 3rd party person who is liable to
hime for the counterclaim. Rule 14(b)

Jurisdictional requirements relaxed: Both personal and subject matter jurisdictional requirements are
relaxed with respect to the 3rd party claim.

(1) 100-mile bulge: Rule 4(k)(1)(B) Territorial Limits of Effective Service – allows service of summons
of a Rule 4(e) waiver to be sufficient to establish personal jurisdiction over a  who is a joined party (as
per Rule 14 or Rule 19) when they are served within 100 miles from where the summons was issued
   Allows service of 3rd party complaints anywhere within the 100-mile bulge surrounding the
      courthouse, even if the place of service is outside the state, and is beyond the scope of the local long-

Supplemental jurisdiction: 3rd party claim falls within the court’s supplemental jurisdiction.
Civil Procedure                              last updated 2/10/2012                               Page 29 of 32

Owen Equipment & Erection Co. v. Kroger: complete diversity requirement cannot be circumvented by
waiting for a  to implead a nondiverse party
    (1) wrongful death suit for the electrocution of her husband,  attempted to obtain federal diversity
         jurisdiction over Owen Equipment and  Erection Co., a nondiverse party, by alleging pendent
         party jurisdiction.
    (2)  assert claim against 3rd party  when there was no independent basis for federal jurisdiction
         over that claim
    (3) Holding: federal court does not retain jurisdiction over an action ,based on diversity of
         citizenship, when the plaintiff adds a pendent party  who destroys complete diversity

Rule 14(a) When  may bring in Third Party – allows the , as a third party , to bring a new party (for
indemnity), known as 3rd party , into an action on the ground that the new party is, or may be liable to the
party who brings  in for all or part of the subject matter claim arising out of the same transaction or
Rule 14(b) When  may bring in Third Party – when a counterclaim is asserted against the ,  may
bring in a 3rd party under the circumstances that allow the  to do so

3rd Party ’s options to original ’s pleadings:
     (1) answer – 3rd may assert any defenses which the  made to ’s claim
     (2) counterclaim against  - arising out of the same transaction or occurrence of ’s claim against 
     (3) cross-claim against 

NOTE: there is not need for complete diversity between original  and 3rd party  because the claim is
considered ancillary. There is also no need for diversity between original  and 3rd party because the
controversy is not between them. BUT the original  may not assert a claim against the 3rd party  (by
amending complaint) unless there is diversity between them.

 may only file a complaint against 3rd party  if same claim arises out of same transaction or occurrence
and subject matter jurisdiction exists, BUT REMEMBER §1367(b) takes away diversity jurisdiction
because  against a 

PURPOSE: to determine the rights of all parties in one proceeding, avoiding subsequent independent
actions for indemnification.

Compulsory Joinder – Necessary & Indispensable Parties

Rule 19 Compulsory Joinder
Rule 19(a) Persons to be Joined if Feasible – certain situations in which additional parties must be joined,
if the requirements of jurisdiction mare met
   would be uneconomical or unfair to litigate a claim between two parties without at the same time
        bringing in other claims and parties.
     (1) Two categories: Rule 19(b) goes further, and sets forth situations in which, if joinder is not
           possible for jurisdictional reasons, the entire action must be dropped
               a. “Necessary” parties: Parties whose joinder, if possible, is required by Rule 19(a), are
                    called “necessary” parties
               b. “Indispensable” parties: Parties who are so vital that if their joinder is impossible, the
                    whole action must be dropped, are called “indispensable” parties.
     (2) Distinguishing “necessary” from “indispensable”:
               a. “necessary”: Rule 19 first describes those parties who must be joined if (1) service can
                    be validly made on them, and (2) their joinder would not destroy diversity. These are
                    “necessary” parties. To be a ‘necessary’ party, a person must meet one of the following
                    two tests:
                          i. Incomplete relief: “in the person’s absence complete relief cannot be accorded
                              among those already parties.” (Rule 19(a)(1)) or
Civil Procedure                                          last updated 2/10/2012                                             Page 30 of 32

                             ii. Impaired interest: a judgment in the person’s absence will either (1) as a
                                 practical matter impair an interest the person has, or (2) impose on some of the
                                 existing parties “double, multiple, or otherwise inconsistent obligations.” (Rule
                  b.   “indispensable”: if absentee meets test of (i) or (ii) above, then court then determines
                       whether that absentee is in fact “indispensable” – so vital that the action should be
                       dropped if joinder is not possible – by considering the following additional factors, all
                       laid out in Rule 19(b):
                              i. prejudice: the extent of prejudice to the absentee, or to those already parties;
                             ii. framing of judgment: the possibility of framing the judgment so as to mitigate
                                 such prejudice;
                           iii. adequacy of remedy: the adequacy of the remedy that can be granted in his
                            iv. result of dismissal: whether the  will have an adequate remedy if the action is

STEP 1: determine if party is necessary
            Rule 19(a): such parties will be joined when necessary:
                  o     19(a)(1) relief cannot be properly accorded without joinder of the absent party or
                  o     19(a)(2)(i) the absent party has an interest that would be unprotected if not jointed or
                  o     19(a)(2)(ii) the party’s absence is likely to hurt one of the present parties by opening them up to the substantial
                        risk of multiple litigation or inconsistent judgments
STEP 2: If this person is not joined the court will join that person. Such person shall be made party “if feasible” (personal
jurisdiction, subject matter jurisdiction, and venue may interfere EXCEPT diversity cannot be destroyed) NOTE: if there was a
federal question case with nationwide jurisdiction, there would essentially be no problem.
STEP 3: if it is not feasible to join the absent party, the court may:
            Rule 19(b):
                  o     adjudicate without the absent party (party is merely necessary) OR
                  o     dismiss the case (then labeling the party indispensable – label comes after) because if case is dismissed, party is
                        obviously indispensable
***MUST look at this in terms of equity and god conscience – Four Factors to Consider:
                                   extent to which judgment might be prejudicial to present parties
                                   extent to which, by protive provision or shaping or relief, or other measure the prejudice can be
                                   adequacy of judgment considering absence
                                   will  have adequate remedy if dismissed for non-joinder

invoke Rule 12(b)(7) - motion to dismiss for failure to join an indispensable party

Provident Tradesmen’s Bank & Trust Co. v. Patterson: federal courts do not necessarily have to dismiss
suits where it is not feasible to join a necessary party
     (1) action arising out of a traffic collision, Provident Bank , the administrator of a decedent’s estate,
         sued Lumbermen’s Mutual Casualty Company , the insurer of the automobile. Appellate Court
         dismissed the action for failure to join the insured party.
     (2) Holding: where it is not feasible to join a necessary party, the action must be dismissed only if the
         party is indispensable
     (3) Look at four interest:
              a. The prejudicial effect a judgment would have on the absent party and the parties to the
              b. Alternative measures the court might use to lessen any prejudice
              c. Whether the judgment rendered in the absence of a nonjoined party would be adequate
              d. Will the plaintiff have an adequate remedy if the action is dismissed for nonjoinder
     (4) difference between “necessary” and “indispensable”
              a. necessary: have an interest in the action and should be a party in the interest of finality
                   but who’s interest are separable
              b. indispensable: who not only have an interest, but a final decree cannot be made without
                   affecting that interest – by definition, cannot join an indispensable party

Intervention – part of joinder
Civil Procedure                              last updated 2/10/2012                               Page 31 of 32

Rule 24 allows certain persons who are not initially part of a lawsuit to enter the suit on their own
     (1) Two forms: Rule 24 recognizes two forms of intervention:
             a. Intervention of right Rule 24(a) (no independent jurisdiction needed UNLESS
                 intervening as ) meet the following criteria:
                       i. Interest in subject matter: claim an interest relating to the property or
                           transaction which is the subject of the action
                      ii. Impaired interest: must be so situated that the disposition of the action may as
                           a practical matter impair or impede his ability to protect that interest
                     iii. Inadequate representation: must show that this interest is not adequately
                           represented by existing parties
             b. Permissive intervention Rule 24(b) court has discretion to allow the intervention since
                 person who has a “claim or defense” involves a “question of law or fact in common”
                 (must meet subject matter jurisdiction)
                       i. If independent basis, good under §1367(a), but if diversity claim then no good
                           under §1367(b) [must still satisfy diversity] f  intervening
                         NOTE: If main action is founded on §1332, §1367(b) has barred supplemental
                         jurisdiction over this claim where the person is “seeking to intervene as a  under
                         Rule 24

Martin v. Wilks: party seeking a judgment binding on another cannot obligate the latter to intervene in a
suit to which that person is not a party
     (1) one is not bound by a judgment in personam to which he was not a party
     (2) because Rule 24 (Intervention) is merely permissive, if the parties to an action do not join persons
         under Rule 19 Compulsory Joinder, such persons are not bound by the judgment and may
         collaterally attack

Class Actions

Promote legal efficiency
  protects s who may run out of money if they were sued by each  individually
  assumption is that members of the class are similarly situated
            o evidence used by one can be used by all – facts usually apply to all

Rule 23 Class Actions
 (a) Prerequisites to a Class Action (NEED ALL FOUR) - one or more members of a class may sue or
      be sued as representative parties on behalf of all only if
      (1) numerosity – the class is so large that joinder of all members is impracticable
      (2) commonality – there is a common question of fact or law involved
      (3) typicality – claims or defenses of the representative party are typical of the rest of the class
      (4) adequacy – the representative parties will adequacy/fairly protect the class interests
                ensures quality of representation
                gives people a figurative day in court
                make sure judgment is not vulnerable to collateral attack
 (b) Class Actions Maintainable – need (a) and one of the following:
      (1) Prejudice class – when separate actions would prejudice the non-class party and other members
          of the class. It would create a risk of inconsistency/varying adjudications or it would
          substantially impede other members from taking actions
      (2) Injunctive or Declarative Relief – the opposing party has acted similarly toward the entire class
          (need only to be generally applicable, not offensive to every member)
      (3) “Damages” – only tie between members is that they have been injured in the same way.
          Members are permitted to “opt-out”
                common questions of law or fact must predominate
                class action must be the best available method of adjudication
                opt-out right
Civil Procedure                                          last updated 2/10/2012                                             Page 32 of 32

Snyder v. Harris:  brings class action suit. No individual  ahs a claim satisfying the jurisdictional
amount, but all the s’ claims added together do satisfy the amount
    (1) Holding: amount in controversy requirement is not satisfied here. No “common and undivided
        interest” exists among the stockholders. Aggregation is not permitted. To allow aggregation
        would be to expand federal jurisdiction, something which is up to Congress, not Supreme Court.

Zahn v. International Paper Co.: in class actions, the Supreme Court has taken an especially restrictive
view of the aggregation issue. Court held that every member of the class must satisfy the jurisdictional
amount. The Court based its decision on Snyder, and held that “one  may not ride in on another’s
coattails.” Any recovery by the named s , each of whom met the amount, would have no res judicata
effect on the s not meeting the amount, who would have to relitigate on the merits. Zahn thus cripples
the utility of Rule 23 class actions in diversity cases, since it is only a rare class action in which all
members have $75,000 at stake.
     (1) supplemental jurisdiction statute may overrule Zahn: good chance that the doctrine of
          “supplemental jurisdiction” as codified by Congress wipes out this effect of Zahn. Under the
          supplemental jurisdiction doctrine, 28 U.S.C. §1367, if one  has a valid diversity (or, for that
          matter, federal question) claim against a , other s with closely-related claims may be brought
          into the action even if they don’t separately satisfy the requirements of diversity. The pincipal
          case so far to have considered the effect of §1367 on class actions has held that §1367 nullifies
          Zahn – that as long as the named class representatives each have a claim in excess of $75,000, the
          unnamed members need not meet the jurisdictional amount
     (2)   Subject Matter Jurisdiction – a class action based upon a federal question does not present a problem, but where the
           federal jurisdiction is based upon diversity of citizenship, only the citizenship of the named representatives of the class are
           taken into account to establish diversity. The amount in controversy may be aggregated only in the rare situation where
           the claims of the parties are “joint” or “common.” Otherwise, the claim for each class member (not merely the
           representatives) must meet the jurisdictional minimum. Obviously, however, there is no amount in controversy
           requirement if the class claim invokes federal question jurisdiction
                 a.    Zahn said each member of class must meet jurisdictional amount
                 b. §1367 overrules
                               i. (a) – extend to full extent of constitutional limits
                              ii. (b) – cuts back in diversity case, but only for Rule 14, 19, 20, 24
                             iii. therefore, need only $75,000 and common nucleus of operative fact to get subject matter jurisdiction

Personal Jurisdiction
Phillips Petroleum Co. v. Shutts (1985): minimum contacts are not required for personal jurisdiction in
class actions, but the forum state may not necessarily apply its own law to all claims
     (1)  and several other holders of royalty interest brought a class action against  to recover royalty
          payments. The Kansas court obtained personal jurisdiction over all parties and applied Kansas
          law to all claims
     (2) Holding: in class actions, personal jurisdiction does not require that each class member have
          minimum contacts with the forum state, but the forum state must have sufficient interest in the
          claims to assert its state law to all claims
     (3) A state may exercise jurisdiction over a class action  even if the ’s contacts with the state
          would not confer jurisdiction over a 
               a. “minimum contacts” test was derived to protect the due process rights of a  forced to
                    defend in a foreign, unforeseen forum
               b. class action  is in nowhere near as perilous a situation (i.e., no need to travel to retain
               c. certification and constant overview of the judge remove the potential dangers of inclusion
               d. opt-out privilege prevents s from having to appear in unfair, inconvenient forum –
                    when have opt-out option, not precluded from bringing action individually
               e. need personal jurisdiction over  class, but unclear with s class action
               f. holdings are limited to Rule 23(b)(2) “injunction” and Rule 23(b)(1) “prejudice”
               g. in Rule 23(b)(3) “damages” cases, ’s have opportunity to opt-out


To top