Andy Final Civ Pro

Civil Procedure – Garrett Civil Procedure Outline Introduction Commencing the case Service of Process Pleading Constrains imposed on pleading (Rule 11) Special Pleading (Rule 9) Burdens Answer/Denials/Affirmative Defense Amendments to Pleading Discovery Pretrial Process and Dispute Resolution Settlement Preliminary Relief Summary Judgment The Trial The Jury Directed Verdict and JNOV New Trial Appeals Standard of review used by appellate court Personal Jurisdiction Presence Consent Domicile Functional approach (Intl Shoe, Hanson, McGee) Transitory Jurisdiction Federal Rules on personal jurisdiction Subject Matter Jurisdiction Diversity Jurisdiction Federal Question Jurisdiction Supplemental Jurisdiction Removal Jurisdiction Venue, Transfer of Venue, and Forum Non Conveniens Erie Problem Garrett 4 track approach Former Adjudication Claim Preclusion Issue Preclusion Multiparty Litigation Joinder of Claims Counterclaims Permissive Joinder of Parties Impleader Cross Claims Compulsory Joinder Intervention Interpleader Class action 2 3 4 6 8 9 9 12 14 21 21 22 23 26 26 28 29 30 33 34 35 36 37 37 40 41 42 44 45 48 49 50 54 55 57 60 61 62 63 64 64 66 67 67 8/12/2008 Civil Procedure – Garrett  8/12/2008 Introductory notes o Difference between standards and rules  standards – are more general – e.g. negligence, drive reasonably under the circumstances, give someone notice that is reasonably calculated to notify them of them  rules – much more direct and specific – drive 65 mph, post the notice on the door  When drafting laws – rules more precise (requires you have more information) vs. standard (less precise, need less information at the crafting of that standard) o Rules of Civil Procedure  Rule 1 – The rules cover all cases at law or equity. The rules should be construed and administered to secure the just, speedy, and inexpensive determination of every action.  Rule 2 – There shall be one form of action to be known as “civil action.”  Rule 3 – A civil action is commenced by filing a complaint with the court. o Common law courts were the King‟s Courts. They were courts of limited jurisdiction.  Why have courts of limited jurisdiction?  1. limited resources – only wanted the most important cases  2. were added later – phase in their jurisdiction. started doing something different and expanding jurisdiction slowly.  Had to have breached the King or Queen‟s law  Had to purchase of Writ – which created jurisdiction.  Once a writ was filed, the sheriff was sent out to get the defendant to respond.  Eventually there became a limited number of writs, and there were different procedures for each writ. o These writs have a great to do with substantive evolution of that area – trespassing had good procedures so it was better to be in that jurisdiction.  Two types of pleas in common-law courts  Dilatory pleas (these are the defendant‟s pleas). In Federal Procedure (Rule 12b) if you don‟t make them at the right time you lose the ability to o jurisdictional pleas – not here, this is the wrong court. o pleas in suspension – not now, the case isn‟t “ripe” for review (yet or it was ripe in the past) o pleas in abatement – not like this, the pleas were done incorrectly (some technical flaw in the plea).  Peremptory pleas – defendant has a choice of one (and only one) and this is done after the dilatory pleas o Demurrer – even if every fact the plaintiff alleges is true, there is no legal claim. OR we don‟t know what the facts are There isn‟t a law that provides relief under this set of facts. Legal dispute  Motion to dismiss for failure to state a claim (12(b)(6)) is the equivalent, though demurrer is still used in some states as well. o Traverse – the facts are just wrong – factual dispute. What you‟ve proved is not trespass. o Confession and avoidance – all the things alleged are true, but I should be excused. I trespassed but it was an emergency. I assaulted the plaintiff but it was self-defense. o Rules are court specific – Federal rules are used only for the Federal Courts, regardless of which state you are in. State rules are specific to state courts in each state. Federal rules do incorporate state rules into the Federal rules, but it is still in Federal Court. 2 Civil Procedure – Garrett o o o I. 8/12/2008 Interpreting the intent of the rules - Look at context of why rules changed, structure of the statute, drafting history, notes from the advisory notes or judicial conference, etc. Federal rules vs. state rules - It is NOT usually the case where the states are more permissive than the Federal Government (sets a basement). There are a couple of states that are more permissive b/c it allows a minor and/or allows a party to serve. attachment = legal term for an officially sanctioned seizure of property (real estate, cars, and other property may be attached) Commencing the Case a) Service of Process i) Rule 4 – Summons – (1) Overview – SERVE SUMMONS AND COMPLAINT TOGETHER, IT MUST BE WITHIN 120 DAYS OF FILING THE COMPLAINT; HAS TO BE DONE BY A NON-PARTY PERSON OVER THE AGE OF 18, CAN BE A US MARSHAL OR DEPUTY MARSHAL OR OFFICER APPOINTED BY THE COURT; DELIVERED TO THE PERSON OR LEAVING IT WITH A PARTY THAT IS OF SUITABLE AGE LIVING IN THE SAME PLACE OR AN AUTHORIZED AGENT FOR SERVICE OR LEAVING IT IN A WAY THAT IS REASONABLE CALCULATED ACCORDING TO ALL THE CIRCUMSTANCES TO REACH THE PARTY. IF IT IS NOT BY A MARSHAL OR DEPUTY PROOF OF SERVICE (AN AFFIDAVIT SIGNED BY THE PERSON THAT SERVED THE NOTICE) (a) (a) Form - summons shall be signed by the clerk, bear the seal of the court, identify the court and the parties, be directed to the defendant, and state the name and address of π or the π‟s attorney. The form shall state the time when the Δ should appear and that failure to do so will result in default judgment. THIS CAN BE AMENDED. (2) (b) Issuance – π may present to the clerk for signature and seal. If properly formatted, clerk will sign, seal and issue to π for service to Δ. If multiple Δ‟s, summons should be issued for each Δ. (3) (c) Service with complaint (by whom) – (a) (1) Summons shall be served with a copy of the complaint. π is responsible for service within the time allowed under subdivision (m). (b) (2) Service can be by anyone NOT a party and who is at least 18 years of age. Can be a US marshal or deputy marshal or officer specially appointed by the court. (4) (d) Waiver of service; duty to save costs; request to waive – Waiver of service of summons does NOT mean waiving any objection to venue or jurisdiction. There is a duty to avoid costs and the π may notify Δ of a commencement of action and request Δ waive service. (a) Standards for waiver request - must be made in writing and addressed to Δ or agent or officer of Δ; must be done through first-class mail or other reliable means; must be accompanied by a copy of the complaint; inform the defendant of consequences of (not) complying with the request; state the date which the request was sent and provide at least 30 days (60 days if outside US) to respond, and provide an extra copy of notice and request and prepaid means of compliance in writing. (b) If the Δ doesn‟t comply…, the court shall impose those costs of service on Δ (unless good cause for failure is shown). (c) Benefit for waiving service – Δ not required to serve an answer to complaint until 60 days after request was sent [otherwise Δ would have to answer in 20 days] (5) (L) - Proof of Service – shall be made to the court. If service is made by a person other than a marshal or deputy marshal, the person shall make affidavit thereof. (6) (M) – Time Limit for service – If not made within 120 days after filing the complaint, the court shall dismiss the action without prejudice (or direct that service within a specified time). ii) How can a summons/complaint served upon an individual? 3 Civil Procedure – Garrett st 8/12/2008 II. (1) 1 way – meets state rules (even for Federal cases) – Rule 4(e) - consistent with the law of the state that the circuit court is located (state where the case is) OR in which service of process is effected (state where the defendant is) (a) It is usually if the state rules differ it is because they tend to have more requirements for service. (i) Because there are rules for both service and who serves, good lawyering might be to use the state rule or the federal rule for both parts rather state rule for one and federal rule for the other. (2) 2nd way – Federal mechanism (a) person not a party to the suit (at least 18) or marshal or deputy marshal or person authorized by the court (b) given to the person or a person of suitable age and discretion that lives with the plaintiff or agent authorized by appointment or by law to receive service of process (c) can serve them in “their dwelling home or usual place of abode” (d) can serve under federal laws or the law of the state (either the Δ is in or where the case is filed) iii) Importance of service of process (1) Can generally re-serve process unless it is past the statute of limitations (2) If you fail to object to service of process at first answer, you lose the right to object to service of process later. iv) Two questions on service of process (1) what does the statute require? (a) Statute is more restrictive than the Constitution (at least as restrictive as the Constitution). (2) What does the Constitution require? (a) That is the discussion in Lindsey v. Greene. v) Lindsey v. Greene – service of process (1) Facts – landlord of a project (controlled by Public Housing Authority) brought a suit against the tenants for eviction. Defendants didn‟t show and judge entered a default judgment. This case is the 2nd case – it is a collateral attack against the first judgment. The attack was because there was something wrong with the system. Kentucky statute allowed for posting on the door. There was knowledge that kids were taking the notices off the door. Tenants did not receive summons and notice to appear and thus lost a default judgment. (a) Collateral attack = subsequent to the suit, are disfavored by the system. (2) The tenants filed a §1983 Civil Rights suit against Greene (sheriff) for equal protection violation for failure to provide notice. (3) Court of Appeals and Supreme Court rule in favor of tenants - Applies Mullane – (a) Rule - “An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” (b) Mullane was a Supreme Court decision that post-dated the Kentucky law. Modern Pleading a) Stating a claim i) Code pleading – This still exists in a few states including CA, NY, and IL. (1) Statements of facts constituting cause of action in ordinary or concise language – requires facts in all elements of cause of action. Inadequate (a) Fail to allege anything (facts or conclusions) relating to the cause of action (b) state conclusions of law but no facts (might pass notice pleading) (c) alleges facts that are not legally sufficient to satisfy law in question. (d) Code pleading requires more information than notice pleading (2) Problem with code pleading – you still need to allege facts and fit it into a cause of action. 4 Civil Procedure – Garrett 8/12/2008 (3) While code pleadings emphasize the facts, it is NOT time for the judge to discern whether facts are true. Assume that the facts are true to determine whether or not there is a legal claim. (4) Trade-off between pleading and discovery – the more information you state and the more specific the complaint, the less maneuverability in discovery. ii) Notice Pleading – this is what the FRCP uses. (1) Rule 8a - “requires three things: (1) short and plain statement of the grounds upon which the court‟s jurisdiction depends (unless the court already had jurisdiction and the claim needs no new grounds of jurisdiction to support it), (2) short and plain statement of the claim showing the pleader is entitled to relief, and (3) demand for judgment for the relief the pleader seeks.” (a) No requirements of facts (2) Why so simple? Notice jurisdictions are concerned with noticing the defendant of an action. Code pleading jurisdiction are muchmore concerned with specifics. (3) Gillispie v. Goodyear Service Stores – standards for notice pleading (a) Facts – π pleads that Δ‟s without cause trespassed π‟s house, used harsh and threatening language and physical force, and assaulted the π. Δ files a motion to dismiss and the court grants the motion, dismissing the case with leave to amend. (b) Rule – “a complaint must contain a plain and concise statement of the facts constituting a cause of action. The cardinal requirement of this statute is that the facts constituting a cause of action, rather than the conclusions of the pleader, must be set out in the complaint, so as to disclose the issueable facts determinative of the plaintiff‟s right to relief.” (i) “Where the complaint merely alleges conclusions and not facts, it fails to state a cause of action and is demurrable.” (ii) “A complaint must be fatally defective before it will be rejected as insufficient and if any portion of it or to any extent it presents facts sufficient to constitute a cause of action, the pleading will stand.” (c) Pleading is the gatekeeper to discovery – after discovery the judge will have another chance to determine whether or not this is an acceptable case. (d) Seems like this case (though it is notice pleading), is an example of what code pleading would actually look like. (4) People ex. rel. Department of Transportation v. Superior Court – Form 9 - forms do NOT make you demurrable proof. *** (Remember CA is code pleading) (a) Facts – π (Verdeja) was driving northbound when another vehicle drive by Δ crossed over the dirt center divider and struck π‟s vehicle head-on. π sued CalTrans and CalTrans filed a demurrer arguing the pleading was not adequate. (b) Trial court rejected the demurrer stating that a Judicial Council form was nondemurrerable. Court of Appeals reversed and granted demurrer with leave to amend. (c) Rule – just using a form is not sufficient to get you past a motion to dismiss for failure to state a claim. (i) “Judicial Council pleading forms have simplified the art of pleading, and have made the task of drafting much easier. Nonetheless, in some cases more is required than merely placing an “X” in a box. In order to be demurrer-proof, a form complaint must contain whatever ultimate facts are essential to state a cause of action under existing statutes or case law.” (5) Rannels v. S.E. Nichols, Inc. – courts mistaken application of code pleading in facts vs. claims in notice pleading (a) Facts – π (Ms. Rannels) purchases a pair of jeans and realizes afterwards they have a defective zipper. The store refused to take them back and she cancelled payment of the check. She had the zipper fixed herself and offered to pay the rest of the money, but the store refused. The store filed a criminal complaint charging a violation of Penn bad check statute. Rannels filed a suit alleging malicious prosecution and slander b/c the store knew she hadn‟t written a fraudulent check. 5 Civil Procedure – Garrett 8/12/2008 (i) Δ file a 12(b)(6). Third Circuit Court rules that if it accept everything the π said in her complaint, relief could be granted and rejected the motion to dismiss. 1. Court found that facts were alleged that met all three elements of malicious prosecution statute (malice, no probable cause for law suit, and termination of suit) (b) Rule – “FRCP do not require a claimant to set out in detail the facts upon which he bases his claim. To the contrary, all the Rules require is a short and plain statement of the claim that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.” iii) Haddle v. Garrison – at-will employment constitutes property for purposes of USC §1985. (1) Facts – Haddle is a mid-level, at-will employee at a healthcare firm. After Haddle‟s grand jury testimony about the company he is fired. He alleges he was fired b/c of the testimony (not because the firm was about to declare bankruptcy). Haddle claims his property is threatened if he testifies at the grand jury. Garrison (Δ) files a motion to dismiss and it is granted by the circuit court. (a) The case makes it all the way to the US Supreme Court. (2) Rule – “a court should not dismiss a complaint for failure to state a claim unless it is clear that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” (a) at-will employment is property. U.S.C. §1985 is to prevent intimidation and retaliation, threatening an at-will employee falls within intimidation and retaliation. (i) a statute can be interpreted to give a claim validity. (3) The end result of this case is only that Haddle gets past pleading, does NOT mean that he won the case. b) Constraints imposed by pleading i) Rule 11 – way of attacking the complaint, but it is more of an attack on the behavior of the lawyer. (1) Rule 11 – (a) signature – every pleading, written motion, and other paper shall be signed by attorney of record of by the party, including signer‟s address and telephone number. Unsigned papers shall be stricken unless omission is corrected promptly. (b) presenter is certifying to the best of his or her knowledge there is no improper purpose (such as harassment); the claims, defenses, and legal contentions are warranted by existing law or non-frivolous argument for extension, modification, or reversal of existing law; allegations and other factual contentions have evidential support; denials are warranted by evidence or reasonably based on lack of evidence or belief. (i) If violation – a motion should be made separately from other motions and should describe specific conduct (can also be done on court’s initiative). (c) Sanctions – can be a non-monetary nature, pay a penalty to the court, payment of some or all reasonable attorney‟s fees and other expenses (i) pretty benign at this point (ii) can sanction the client, the firm, the individual lawyers (d) This does NOT apply to discovery – that is Rule 26g (2) What is the purpose of Rule 11? (a) prevents harassing, frivolous, unnecessary litigation, and claims for improper reasons. (b) also prevents sloppiness – like failure to investigate your client‟s claims (Business Guides). (3) Rule 11 provides 21 day safe harbor period. (4) Attorney‟s and clients can both be sanctioned. (5) Rule 11 before 1993 – (a) before 1983 was too lax, the 1983 rule was too severe, and that brings us to the current Rule 11 (1993). 6 Civil Procedure – Garrett 8/12/2008 (b) Opposing party has less incentive to bring a Rule 11 b/c the current version does not focus on attorney‟s fees (which was a higher priority). (i) If someone won rule 11 (based on 1983 Rule 11), they were guaranteed attorney‟s fees (shall impose upon the person who signed it, a represented party, or both). (6) Business Guides v. Chromatic Communications Enterprises – Rule 11 and TRO (a) Facts – Business Guides (π) alleges the Δ is infringing on its copyright. π produces a directory with bits of false information to make sure there is no infringement. π finds that Δ has several of those “seeds” and sues, seeking a temporary restraining order in the meantime. (i) Before the hearing, judge‟s clerk called Finley (plaintiff‟s attorney) to ask what information was incorrect. At that point it became obvious that Finley and his law firm had never inquired into the details of the case. The law firm quickly dropped 3 of the 10 counts. Finley and Kumble had not investigated and had to ask their clients to double-check the claim. (ii) Rule – “The standard of conduct under Rule 11 is one of objective reasonableness.” 1. Rule 11(b)(3) – this is not “willful and malicious” its more like negligence in (B3). a. “Business Guides in filing the initial TRO application had failed to conduct a proper inquiry resulting in the presentation of unreasonable and false information to the court.” - While the attorney – in haste – didn‟t do the investigation and erred, such action was not reprehensible. However, once the case started to collapse, the attorney maybe should have done some independent investigation. b. Attorney‟s are required to do independent reasonable research on their claims to check its validity, when applicable. (iii) Holding - dismissal with prejudice and 2. awarded attorney fees. (iv) Temporary Restraining Order (TRO) = preliminary, extraordinary relief. Stop and desist while the lawsuit is ongoing. The judge is going to hear the case and must find (to adopt the TRO) there is no other way in law to handle this. 1. Standards for TRO granting: a. suffering irreparable harm, AND b. are likely to win on the merits during the suit. (7) Religious Technoogy Center v. Gerbode – “safe harbor” under Rule 11 (a) Facts – Plaintiff sued Church of New Civilization for a violation of RICO by engaging in acts of mail and wire fraud in connection with the formation and operation of purportedly non-profit corporations. (Case is a continuation of longstanding and acrimonious litigation between plaintiff and defendant) Defendants now bring a Rule 11 after the case was dismissed. (i) π responds with safe harbor provision – Rule 11(c)(1) – cannot file a Rule 11 motion within 21 days of service of the challenged paper, which gives the opposing attorneys time to decide whether to withdraw or amend the paper that is being challenged under Rule 11. (ii) In this case, the Δ filed the Rule 11 within the 21 days (but after the case was dismissed). (iii) Judge did not hold both law firms for π responsible under Rule 11 (only one of the firms and then client) (b) Rule – “It would not be practicable to require compliance with safe harbor provision in this case. Amended Rule 11 (1993 Rule 11) became effective on the same date that this action was dismissed. Thus, it would be futile to now require defendants to comply with the „safe harbor‟ provision.” (c) Policy - The purpose of the safe harbor provision is unclear when the case is dismissed within the first 21 days, since it cannot be withdrawn or amended (as the safe harbor period was created to allow). 7 Civil Procedure – Garrett 8/12/2008 (i) “Safe Harbor” procedural response to a Rule 11. After receiving complaint, you have 20 days to file your answer to the complaint. However, if you file a Rule 11 immediately, the opposing party has 21 days to respond to a Rule 11 claim (by amending or withdrawing the paper). If the purpose of filing a Rule 11 is to get the other party to dismiss the case and they do, but they use all 21 days to do so, the attorney for the defendant (that filed the rule 11) will have already drafted and submitted the response. (ii) In Gerbode, the case was dismissed the same day the Rule 11 was filed, so it didn‟t make any sense to wait 21 days for the Rule 11 (d) Lodestar method for determining lawyers‟ fees – uses the attorney‟s usual hourly rates, which it then adjusts up or down as various circumstances warrant (also allows the court to take into account what are reasonable hourly rates). c) Special Pleadings – i) Rule 9(b) – Pleading special matters (Fraud, mistake, condition of the mind) (1) “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.” ii) Fraud is difficult to win in civil cases and are looked disfavorably on in the civil system. (1) Why? B/c fraud allows punitive damage (which other civil cases do NOT allow). (a) The result is that you have to plead with particularity when it is a fraud case. Thus, it might be easier to meet rule 8, but difficult to meet rule 9. iii) Leatherman v. Tarrant County Narcotics Intelligence & Coordination Unit – no heightened pleading outside Rule 9(b) (1) Facts – Local police officers and two municipal corporations are being sued in their official capacity. The case arose out of the execution of search warrants and forcible entry into a home based on the detection of odors related to the manufacturing of narcotics. The trial court grants a motion to dismiss and the Supreme Court reverses. (2) Issue – Can a Federal Court apply “heightened pleading standards” more stringent than the usual pleading requirements of Rule 8(a) of FRCP in civil rights caes alleging municipal liability under U.S.C. §1983. (3) Rule – It is impossible to square the heightened pleading standard in this case with the liberal system of notice pleading set up in FRCP. Rule 8(a)(2) requires that a complaint include only „a short and plain statement of the claim showing that the pleader is entitled to relief.‟ (a) Rule 9(b)‟s heightened pleading does not apply to this case because it is not a case of fraud or mistake. Rule 9 provides all of the exceptions requiring higher standards of pleading. (i) Rehnquist says in Leatherman that no other pleadings require higher standards. Rule 9 specifies particular pleadings (there is a list) and thus anything not on the list is not on the list and does not require higher standards of pleadings. (4) Policy – municipal immunity – “This argument wrongly equates freedom from liability with immunity from suit… These decisions make it quite clear that, unlike various government officials, municipalities do not enjoy immunity from suit. In short, a municipality can be sued under §1983, but it cannot be held liable unless a municipal policy or custom caused the constitutional inquiry.” (a) Leatherman does NOT discuss heightened pleading requirements for individual – as opposed to municipal – defendants. (5) Rule 8(c) – immunity is a defense, would be pleaded in the answer and the Δ has the burden of proof. (6) Courts have not really liked Leatherman decision (a) 9th circuit still requires heightened pleading standards for immunity cases (b) 5th circuit did something different – it requires a reply when the defendant asserts a qualified immunity. So, if there was a case where a police officer is sued and the 8 Civil Procedure – Garrett 8/12/2008 police officer responds with an immunity defense, the plaintiff is required to file a reply (Schultea v. Wood). d) Burdens – i) Burden of pleading - You have to make allegations of this element in your complaint in some way. ii) Burden of production - You are the party that has to come forward with evidence showing that it is more likely than not the case. iii) Burden of persuasion – not just come up with evidence, you have to persuade the jury as well. (1) If the jury is equal – then the person with the burden of persuasion loses, because they have to prove it is more likely than not likely and they have failed to do so. iv) Affirmative defenses shifts the burden - An affirmative defense is generally a case where the burden of production and persuasion is on the defense. v) How to determine who has the burden of proof? (1) knowledge – the party with more knowledge on the issue (knows more about their own actions) (2) statute and rules– if statute states whether something is or is not an affirmative defense (3) precedent and reason for analogy (like „confession and avoidance‟ from old common law) (a) What does “avoidance” mean? Answer: Yes we did it, but we have no liability. You are right about everything you said, but additional facts (your negligence, my immunity) avoid any liability, despite. (4) policy determinations - what kinds of things do we want in court, what kinds of things do we want to favor the plaintiff on? (5) deviation from the norm - party making the most atypical argument has burden of proof vi) Gomez v. Toledo – qualified immunity is a defense, so Δ has burden of proof (1) Facts – Gomez brought this suit against the Superintendent of the Police of the Commonwealth of Puerto Rico arguing his rights procedural due process rights had been violated when he was discharged from the Police Department‟s Bureau of Criminal Investigation. Gomez had submitted sworn statements that two other agents had submitted false evidence in a criminal case. Afterwards he was transferred and eventually fired. Administrative review revoked his firing and reinstated him. He sued for damages. (a) District court granted 12(b)(6) motion arguing the π had to plead that respondent was motivated by bad faith. US Court of Appeals affirmed. Supreme Court granted suit and reversed. (2) Rule – (a) “Since qualified immunity is a defense, the burden of pleading it rests with the defendant.” e) Answer i) Rule 12 – Defenses and Objections – Motion for Judgment on the Pleadings (1) Rule 12(b) - Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: 1) lack of jurisdiction over the subject matter, 2) lack of jurisdiction over the person, 3) improper venue, 4) insufficiency of the process, 5) insufficiency of service of process, 6) failure to state a claim upon which relief can be granted, 7) failure to join a party under Rule 19. A motion making any of these defenses shall be made before pleading if a further pleading is permitted. No defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion. (a) Motion for 12(b)(6) will be treated as a summary judgment or motion to dismiss. (b) 12(d) – Preliminary Hearings - Rule 12(b)(1-7) and 12(c) motions shall be heard and determined before trial on application of any party, unless the court defers the hearing until the trial. 9 Civil Procedure – Garrett 8/12/2008 (2) Rule 12(a) – when presented – must be filed within 20 days of being served with the summons and complaint, or if service is waived, within 60 days after the date when the request for waiver was sent (90 days if outside the US). The service of a Rule 12 motions alters the periods of time as follows (12(a)(4) – tolling provision) – (a) if the court denies the Rule 12 motion, responsive pleading shall be served within 10 days after notice of the court‟s action, OR (b) if granted for a more definitive statement, the responsible pleading shall be served within 10 days after the service of a more definitive statement (3) Rule 12(c) – motion for judgment on the pleadings – equivalent of 12(b)(6) but after the pleadings are complete – this is what Clinton‟s attorneys did. (4) Rule 12(e) – motion for a more definite statement. (party has 10 days to fix if there is a more definite statement required) (5) Rule 12(f) – motion to strike – upon motion made by a party before responding to a pleading or upon a motion made by a party within 20 days after service of pleading or upon court‟s own initiative, court may order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. (6) Rule 12(g) – *** consolidation of Defenses in motion – if a party makes a Rule 12 motion but omits any defense or object then available to the party which the rule permits to be raised by motion, the party shall NOT make a motion based on that objection or defense so omitted. (a) Make all Rule 12 motions at the same time otherwise you lose the option to make them (12(h)(2)). (i) Subject matter jurisdiction objections are NEVER lost (12(h)(3), motion to dismiss, or failure to join an indispensable party (Rule 19) ii) Denials – 8(b) (1) Rule 8(b) - Denials – a party shall state in short and plain terms the party‟s defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies. If a party is without knowledge of information sufficient to form a belief as to the truth of an averment, a party shall so state and this has the effect of a denial. (a) If the party only intends to deny part, the pleader shall specify so much of it as is true and material and deny only the remainder. (b) Unless the pleader intends in good faith to controvert all averments, the pleader may make denials as specific denials of designated averments or paragraphs OR may generally deny all the averments except such designated averments or paragraphs as the pleader expressly admits. (c) All subject to Rule 11. (2) Rule 8(d) – Effect of failure to deny – (a) Averments in a pleading to which a responsive pleading is required (other than those as to the amount of damages) are admitted when not denied in the responsive pleading. (b) Averments in a pleading to which no responsible pleading is required or permitted shall be taken as denied or avoided. (3) Zielinski v. Philadelphia Piers, Inc. – general vs. specific denials (a) Facts – A fork lifted owned by the Δ and operated by an employee (Sandy Johnson) ran into and severely injured the π. Paragraph 5 of the complaint: “a motor-driven vehicle known as a fork lift… owned, operated and controlled by defendant, its agents and employees was so negligently and carelessly managed… that the same… did come into contact with the π.” The Δ responded with a general denial “Defendant denies the averts of paragraph 5.” (i) Through later investigation it turns out that the company had been bought out by Carload Contractors and the work on the pier and Sandy Johnson were controlled by Carload, not Philadelphia Piers. There was no indication of bad faith in the inaccurate statements regarding who was liable. 10 Civil Procedure – Garrett 8/12/2008 (ii) Philadelphia Piers (really by this time, its insurer – the same insurer at represents Carload) moved for a motion to dismiss because it was the wrong party. (b) Issue – was the general denial of everything in paragraph 5 sufficient for the argument that it was the wrong defendant? (c) Rule – FRCP 8(b) “…When a pleader intends in good faith to deny only a part or a qualification of an averment, he shall specify so much of it as is true and material and shall deny only the remainder.” (d) Application: “A specific denial of parts of this paragraph and specific admission of other parts would have warned the plaintiff that he had sued the wrong defendant.” (i) Holding – the Δ is estopped from denying agency because otherwise its inaccurate statements and states in the record, which it knew (or had means of knowing within its control) were inaccurate, will have deprived plaintiff of his right of action. (e) Policy – what is really going on in this case, is that it is still the same insurance company. The court seemed more willing in this case (as opposed to Aquaslide) to hold the Δ liable – even though it is the wrong Δ – because the same people would be held liable if the Δ‟s were switched (the insurance company). iii) Affirmative Defenses (1) Rule 8(c) – Affirmative defenses (needs to be in the answer) (a) “In pleading to a preceding pleading, a party shall set forth affirmatively accord and satisfaction, arbitration and award, assumption of risk, contributory negligence, discharge in bankruptcy, duress, estoppel, failure of consideration, fraud, illegality, injury by fellow servant, laches, license, payment, releases, res judicata, statute of frauds, statute of limitation, waiver, and any other matter constituting an avoidance or affirmative defense.” If a party pleads a defense that is not a defense, the court shall decide how to treat the pleading. (2) Layman v. Southwestern Bell Telephone Co. – distinction between affirmative defense and denial (a) Facts – The π alleged that the Δ (Southwestern Bell) trespassed upon her land and installed underground telephone lines and cables without her consent. In order to do so, they cut down trees and in general, her land depreciated in value. Trial court rendered judgment in favor of Δ because there was insufficient evidence. (i) Δ claimed that it had received an assignment of “easement” (can enter the property) from the owner previous to Ms. Layman. (b) Issue – Can the Δ argue an affirmative defense when the Δ answered with a general denial? Δ only plead a general denial and not an affirmative defense of easement to the plaintiff‟s trespassing claim. (c) Rule – “The test is whether the defendant intends to rest his defense upon some fact not included in the allegations necessary to support the plaintiff‟s case.” (i) “A general denial places in issue all of the material allegations contained in plaintiff‟s petition necessary to support his claim and the defendant is entitled to prove any fact which tends to show plaintiff‟s cause of action never had any legal existence…” (ii) “(I)f the defendant has a defense… which place defendant in a position to avoid any legal responsibility for his action, then such defense must be set forth in his answer.” (iii) Layman Test – does the defendant‟s argument admit everything that the plaintiff said and bring forth additional facts to prove that the Δ has no liability (affirmative defense) OR does the Δ disagree with something in the π‟s pleading (denial). (d) Affirmative defenses shift the burden to the other side to prove. The π must prove the prima facie case, but the Δ has the burden of proof, evidence, and persuasion of any affirmative defense. (3) If an affirmative defense had been made, could the plaintiff reply? (a) Answer: NO. The court could, under Rule 7(a), request a reply. 11 Civil Procedure – Garrett 8/12/2008 (i) Could make a 12(f) motion to strike the affirmative defense. (ii) 5th Circuit Exception – Shultia case – in the 5th circuit, if there is an immunity affirmative defense, the π must file a reply. (b) If you don‟t reply and a reply is NOT required, is that an admission? (i) Answer: NO. Rule 8(d) – it is assumed if there is no reply required that there is a presumption of denial or avoidance. f) Amendments to pleading – i) Rule 15 – (1) Amendments - Can amend pleadings once as a matter of course at any time before responsive pleading is served (or if no responsive pleadings, within 20 days of service). Otherwise the party can ask the judge or adverse party for leave to amend. If amended, must be responded to within the amount of time left or 10 days, whichever is longer. (2) Amendments to conform to evidence – Issues not raised in pleadings that are tried with express or implied consent shall be treated as if they had been plead. Such amendments may be necessary to conform with evidence and raises issues upon motion of any part at any time, even after judgment; but failure to amend does not affect the result of trial. (If objection b/c evidence wasn‟t in pleading, court may allow pleadings to be amended when the merits of the action will be subserved and the objecting party fails to prove admission would prejudice. (3) Relation back to amendments – an amendment of a pleading relates back to the original pleading when (a) relation back is permitted by the law that provides the statute of limitations (b) the claim or defense asserted in the amended pleading arose out of conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, or (c) the amendment changes the party or the naming of the party against whom a claim is asserted if 15(c)(2) is satisfied and, within the period of time set forth in 4(m) (service of process) the party to be brought in by amendment has both a) received such notice of the institution and action that the party will be prejudiced in maintaining a defense on the merits, and b) the party knew – or should have known – but for a mistake concerning the identity of the proper party, the action would have been brought against the party. (4) Supplemental Pleadings. The court may, upon reasonable notice and upon such terms as are just, permit the party to serve a supplemental pleading setting forth transactions or occurrences or events which may be granted even though the original pleading is defective in its statement of a claim for relief or defense. If the court deems it advisable that the adverse party plead to the supplemental pleading, it shall so order, specifying the time therefore. ii) What does Rule 15 mean? Rule 15 – can be broken down in 2 categories (1) What are the standards (very much effected by when in the process)? (a) Matter of course – any time before a responsive pleading is served OR if the pleading is one to which no responsive pleading is permitted OR within 20 days after service. (b) Can also amend with written agreement from the adversary (written consent). (i) This includes for statute of limitations – it is an affirmative defense, and thus can be waived. (c) With leave of court – court has to agree / give permission. It is within the court‟s discretion. “Leave of court shall be freely given when justice requires.” (d) NOTE - Err on the side of amendment; give leave freely when justice requires. If judge can minimize prejudice to other party, do so to let the amendment in and limit (e) Foman v. Davis – 1962. Tested what “grant freely when justice requires.” Supreme Court said not allowing an amendment is an abuse of discretion unless one of the factors stated below is relevant. You have to grant these amendments. 12 Civil Procedure – Garrett 8/12/2008 (i) Bad faith/dilatory motive, undue delay, repeated failure to cure, undue prejudice (see Beeck v. Aquaslide), futility (even if you amend there‟s still no claim or there is still a statute of limitations violation). (2) Code pleading has to relate back and be the same cause of action (under the same complaint) iii) Beeck v. Aquaslide – undue prejudice, (1) Facts – Beeck was injured at a public swimming pool on a waterslide. After the incident, the process was begun; the insurance company for the park was notified. Also, a letter was sent to Aquaslide informing them that someone had been injured while using their waterslide. Aquaslide sent one of their insurance inspectors out to view the waterslide. That inspector stated in a memo that the “Aquaslide in question was definitely manufactured by our insured.” Investigators for three difference insurance companies… concluded that the slide had been manufactured by Aquaslide. (a) After the statute of limitations had expired, the President and owner of Aquaslide, before his deposition, went to personally inspect the waterslide. From his onsite inspection, he determined it was not a product of the defendant. (b) Aquaslide moved for leave to amend their pleading to state that they did not manufacture the slide in question. The judge, over the plaintiff‟s opposition, granted leave to amend under FRCP 15(a). (i) In the answer, Aquaslide originally admitted to manufacturing the slide. (2) Issue – should Δ be able to amend answer to allege the wrong party has been named after admitting in the answer it was the correct party? (3) Rule – Rule 15(a) – once issue is joined in a lawsuit, a party may amend his pleading “only by leave of court or written consent of the adverse party, and leave shall be freely given when justice so requires.” (a) Foman – leave to amend lies within the sound discretion of the trial court and is reviewable only for an abuse of discretion. (4) Holding – in this case, the Appellate Court found that the possible prejudice to the π was not sufficient to deny the proposed amendment. iv) Rule 15(c) – Relation back - really is only relevant if the π is barred from bringing a new suit because of statute of limitations. (1) Even before looking to see if you can amend after the statute of limitations expires, the first question is: Does the amendment pass the 15(a) and 15(b) test? (a) If it‟s the same party and you are just adding new stuff: transactional test – is it the “same transaction, occurrence, or conduct” (one way the courts have said to determine that is whether there is a “common nucleus of operative facts” (2) Moore v. Baker – relation back = same transaction (a) Facts – π (Moore) had a blockage of her carotid artery. Δ (Baker) recommended surgery. The surgery went badly and left π disabled. π initial complaint was for lack of informed consent. π moved to amend her complaint to assert negligence in surgery and post-operative care. (b) Issue – Can the π amend the complaint for lack of informed consent to negligence during and after surgery? (c) Rule – 15(c) – “An amendment relates back to the original filing „whenver the claim or defense 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.” (d) Holding - The court rejects the plaintiff‟s motion to amend. The court rules that it is not the “same transaction” b/c informed consent deals with actions before the operation where the negligence claim is based on what happened during the operation. (3) Bonerb v. Richard J. Caron Foundation – (a) Facts – π is injured while playing basketball at a recreational basketball court. Δ is a drug and alcohol rehabilitation facility. Original complaint alleges court was negligently maintained and injury occurred during mandatory exercise program. 13 Civil Procedure – Garrett 8/12/2008 (i) π tries to amend complaint to add a new cause of action for “counseling malpractice.” (b) Issue – does amendment sufficiently relate back to the original pleading? (c) Rule – “amendment shall be freely given when justice so requires. This provision has been liberally construed, and leave to amend should be granted absent undue prejudice to the party opposing the amendment, undue delay on the part of the party seeking the amendment, or bad faith…” (i) “… derive from the same nucleus of operative facts.” (d) Holding – the amendment did relate back since the amendment is just a more specific version of negligence for counselors. (i) These allegations not only gave defendant sufficient notice of the general facts surrounding the occurrence, but also alerted defendant to the possibility of a claim based on negligent performance of professional duties. III. Information Gathering / Discovery a) Introductory notes on discovery i) US has the most liberal discovery rules in the world. Going back to England and courts of equity, discovery was the outcome. ii) Discover is designed to get out every bit of information as possible and figuring out “knowing what we know” what is the best legal answer. It is to avoid surprise. Its generally the longest part of the trial and many cases do not make it passed discovery. iii) The process is supposed to be cooperative. (1) before you can get sanctions, you are suppose to get together with the other side and plot out a schedule iv) There were significant changes in discovery in 2000. (1) the framers of the rules hoped that by changing the rules, it would encourage the judges to be more involved and responsible in discovery process. (2) the hope was to encourage cooperation and reduce adversarial nature of discovery and increase judicial involvement. (a) that is the reason for the early conference in rule 26. b) Rule 26 - Discovery i) Rule 26(a) – Mandatory, Initial Disclosure - a party must without awaiting a discovery request, provide to other parties: the name and address and telephone number of each individual likely to have discoverable information that the disclosing party may use to support its claims or defense (unless solely for impeachment, identifying the subjects of information); a copy of, or description by category and location of all documents, data compilations, and tangible things that are in the possession, custody, or control of the party, and that the disclosing party may use to support its claims or defenses, unless solely for impeachment; computation of any category of damages claimed by the disclosing party, the documents or other evidentiary material, not privileged or protected form disclosure; for inspection and copying, any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of a judgment which may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment (1) “Discoverable information that the disclosing party may use to support its claims or defenses” (these are things that would help your case). (a) Prior to 2000, you had to disclose evidence against your case (anything “relevant to your case”). (2) This happens relatively quickly after pleadings are over and before large discovery conference. (3) Because this is early in the process, there is a broad duty to supplement. (26(e)) – if the disclosed information is incorrect or incomplete. (4) can you just give them records (like boxes of office files) rather than giving them exactly what they want? You can give it to them if there is not an undue burden that is based on rule 33(d). (5) one abuse of discovery is to overwhelm the other side. 14 Civil Procedure – Garrett 8/12/2008 (a) the rules have tried to correct that with limiting depositions and disclosures. (6) Initial disclosures must occur within 14 days discovery conference or at a different time stipulated or by court order. ii) Rule 26(b) - Discovery Scope and Limits – Unless otherwise limited by order of the court, the scope of discovery is as follows (1) In general – obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge or any discoverable matter. (a) Relevant information need not be admissible at the trial, if the discovery appears reasonably calculated to lead to the discovery of admissible evidence. (2) Limitations – court may alter the limitations in these rules. Frequency or extent of use of the discovery methods otherwise permitted under these rules… shall be limited by the court if it determinates that (a) (1) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (b) (2) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; (c) (3) the burden or expense of the proposed discovery outweighs its likely benefit. (3) Trial Preparation: Materials – A party may NOT obtain discovery of documents and tangible things otherwise discoverable under 26(b)(1) and prepared in anticipation of litigation or for trial by or for another party or by or for that other party‟s representative UNLESS showing that the party seeking discovery has substantial need of the materials in the preparation of the party‟s case and that the party is unable without undue hardship to obtain the substantial equivalent of the materials by other means… the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning litigation. (a) A party may obtain without the required showing a previous statement of a party. This request can be made of a non-party and if refused, the person may move for a court order. A statement previously made is (a) a written statement signed or otherwise adopted or approved by the person making it, or (b) a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is substantially verbatim recital of an oral statement by the person making it and contemporaneously recorded. (4) Trial Preparation: Experts. (a) Testifying experts - A party may depose any person who has been identified as an expert who opinion may be presented at trial. If a report from the expert is required under 26(a)(2)(b), the deposition shall not be conductd until after the report is released. (b) Non-testifying experts - A party may, through interrogatories or by deposition, discover facts known or opinions held by an expert who has been retained or specifically employed by another party in anticipation of litigation or preparation of trial and who is NOT expected to be called as a witness at trial only as provided in Rule 35(b) or upon showing of exception circumstances under which it is impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means. (i) party seeking discovery should pay expert a reasonable fee for time spent responding to discovery. (5) Claims of Privilege or Protection of Trial Preparation Materials. When a party withholds information otherwise discoverable by claiming that it is privileged or subject to protection as trial preparation material, the party shall make the claim expressly and shall describe the nature of the documents, communications, or things not produced or disclosed in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection. (6) 3 important things to remember. 15 Civil Procedure – Garrett 8/12/2008 (a) cannot get privileged information (b) the test for discovery – is it “relevant to the claim or defense” tied to the pleading, suppose to be narrower since 2000 amendments (c) doesn‟t need to be admissible, just reasonably calculated to lead to admissible evidence (26(b)). iii) 26(c) - Protective Orders - Upon motion by a party or by the person from whom discovery is sought, accompanied by a certification that the movant has in good faith conferred or attempted to confer with other affected parties in an effort to resolve the dispute without court action, and for good cause shown, the court in which the action is pending or alternatively, on matters relating to a deposition, the court in the district where the deposition is to be taken may make any order which justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense, including one or more of the following: (1) disclosure or discovery not be had; (2) that the disclosure or discovery may be had only on specified terms and conditions (including time/place); (3) discovery may be had only by a method of discovery other than that selected by the party seeking discovery; that certain matters not be inquired into, or that the scope of the disclosure or discovery be limited; (4) discovery be conducted with no one present except persons designated by the court; (5) that a deposition, after being sealed, be opened only by order of the court; (6) that a trade secret or confidential research, development, or commercial info not be revealed or be revealed only as designated (like a confidentiality agreement); (7) that parties simultaneously file specified documents or info enclosed in sealed envelopes to be opened as directed by the court iv) Relevance – 26(b) (1) Blank v. Sullivan & Cromwell – relevancy = reasonably calculated (a) Facts – π‟s were female lawyers who had unsuccessfully applied for positions as associates in the law firm and sued alleging sexual discrimination in hiring. During discovery, the π‟s sought information (through interrogatories) regarding promotion of women in the firm. The Δ refused to answer and the magistrate upheld that decision. Upon reconsideration, the Magistrate ordered the defendant to respond to the interrogatories. (b) Issue – Were these questions relevant to the case at bar? (c) Rule – 26(b) FRCP – a party is entitled to discovery, not only of material which is relevant and admissible at trial, but also of information which “appears reasonably calculated to lead to the discovery of admissible evidence.” (d) Holding - “Defendant is incorrect in suggesting that because the individual plaintiff here has not alleged that she was denied partnership due to her sex, she is not entitled to the requested discovery.” (e) McDonnell Douglas Corp. v. Green and Kohn v. Royall, Koegel, & Wells. “general information on defendant‟s labor hierarchy may be reflective of restrictive or exclusionary hiring practices within the contemplation of the statute.” (2) Steffan v. Cheney – only for issue that your case is based on (a) Facts – Steffan resigned from the military after an administrative board recommended he be discharged from the navy. He brought a suit alleging he was constructively discharged in violation of the Constitution. During a deposition, Steffan was asked if he had any homosexual contact. Stefan refused to answer. The cour ordered him to do so, again he refused and this time the court threw out the case. The district court acknowledged that he was discharged because of admission that he was homosexual, not from any homosexual conduct. (i) Nevertheless, the court concluded that the question was “highly relevant” because the Navy could refuse to reinstate him on the grounds that an individual has engaged in homosexual acts. 16 Civil Procedure – Garrett 8/12/2008 (ii) The appellate court overturned the trial court‟s ruling. (b) Rule – The question affected Steffan‟s ability to receive damages (reinstatement) not the validity of his suit. Thus the question was not relevant unless such conduct was the basis for his separation. Review and discovery can only be for the issue that your cause is based. (c) Holding - The court held that „in seeking reinstatement and award of his diploma, Staffan through his claims has placed in issue whether he is qualified for such relief.‟” The appellate court stated: “The district court therefore erred in finding the inquiry into homosexual conduct vel non to be relevant on the ground asserted in its opinion.” (3) Hickman v. Taylor – work-product (a) Facts – Tugboat sinks under suspicious circumstances, five people died and four of the five have settled. There was a public hearing. The final decedent‟s family brought a claim and asked the Δ‟s attorney (Fortenbaugh) to turn over all memoranda that the defendant‟s attorney had written about his impression from the interviews with some relevant people, signed statements, Fortenbaugh‟s impressions that might not be in the documents. Fortenbaugh had interviewed survivors with an eye toward litigation right after the accident. While admitting statements had been taken, Fortenbaugh refused to turn them over, calling them privileged. (i) The District Court granted π‟s request for the information and ordered Fortenbaugh to turn the information over. Fortenbaugh again refused and was help in contempt and imprisoned until he complied. (ii) The Court of Appeals reversed ordering the information sought was “work product of the lawyer” and thus privileged. (b) Rule – (i) We do not mean to say that all written materials obtained or prepared by an adversary‟s counsel with an eye toward litigation are necessarily free from discovery. Where relevant and non-privileged facts remain hidden in an attorney‟s file and where production of those facts is essential to the preparation of one‟s case, discovery may properly be had. (ii) the general policy against invading the privacy of an attorney‟s course of preparation is so well recognized and so essential to an orderly working of our system of legal procedure that a burden rests on the one who would invade that privacy to establish adequate reason to justify production. 1. very protective of attorney‟s thoughts and mental impressions. (iii) The rule has been changed since Hickman in 1945, see 26(b)(3) (above). Protection of mental impressions, conclusions, opinions and legal theories AND documents and other tangible things prepared in anticipation of litigation can only be obtained with upon proof of substantial need. 1. 26(b)(3) only applies to documents and tangible things. For non-tangible things and non-documents you would still use Hickman to protect you. a. only documents and tangible things protected by work product, Hickman protects impressions… (c) Holding - Supreme Court affirms the Court of Appeals decision, but rules that though the evidence is relevant and not privileged, it could be obtained through other channels. (i) Work product is NOT privileged – it is an exception to the discovery rules. 1. privilege is absolute, work product is NOT. (ii) “Memoranda, statements, and mental impressions in issue in this case fall outside the scope of attorney-client privilege and hence are not protected from discovery on that basis… (P)rotective cloak of this privilege does not extend to information which an attorney secures from a witness while acting for his client in anticipation of litigation.” (d) For work product under 26(b)(3) - 4 things 17 Civil Procedure – Garrett 8/12/2008 (i) Is it a document or tangible thing that is otherwise discoverable (i.e. relevant to claim/defense and not privilege) (ii) Was it prepared in anticipation for litigation? There are lots of business records that you generate in course, but that is not work product that was prepared in anticipation for litigation. (iii) Is there substantial need for it? Has the other party made a case for substantial need? Would there be undue hardship to obtain that information for other means? (iv) Does it contain mental opinions, impressions, conclusions, or legal theories? If it does, then you should remove that stuff (black it all out). (e) Policy defense of decision – (i) attorneys need privacy to be successful (ii) if materials could be discovered by opposing attorneys, they would not be written down. (iii) undermine trust in party‟s attorney (iv) those impressions could be misleading (f) When would we require that information be disclosed (that information being part of work production)? (i) it cannot be gotten any other way (the witness has died since they were interviewed originally by the possessing party but not the party seeking discovery). 1. witnesses are no longer available or can be reached only with difficulty (ii) useful for purposes of impeachment or corroboration (iii) be admissible as evidence or give clues as to the existence or location of relevant documents (g) Some examples – (i) Describe the statements made by witnesses you interviewed? NOT LEGITIMATE UNDER HICKMAN. (ii) What defects were there in the boat, according to your witnesses? LEGITIMATE UNDER HICKMAN. v) Expert Information (1) 3 kinds of experts (a) Testifying – who will (or might appear at trial), use 26(a)(2) – (i) requires “mandatory disclosure of expert testimony…” 90 days before trial (ii) have to be available for deposition (b) Non-testifying but retained – probably provided opinions that you didn‟t like or they aren‟t very credible. These are people you paid but will not testify. (i) This is like work product – think of these people as work product. (ii) 26(b)(4)(b) – “upon showing of exceptional circumstances under which it would be impracticable for the party seeking discovery to obtain facts or opinions on the same subject by other means. (iii) Opposing party can only get opinion of non-testifying but retained experts if there is an extraordinary need or circumstance. (c) Nontestifying, nonretained but consulted. (i) Nothing in your rules about this. The Advisor Committee notes said that this could be protected as work product, but it is NOT discussed (2) Thompson v. The Haskell Co. – (a) Facts – π alleges sexual harassment. π seeks a protective order to shield from discovery the documents related to her in possession of her therapist. The therapist was hired prior to counsel to perform a diagnostic review and personality profile. This session was 10 days after the alleged incident and π argued that the doctor‟s opinion was highly probative because of close proximity to the event. This is the type of information that no one else could have b/c of that proximity to the incident. (b) Issue – does 26(b)(4) protect psychological records in a sexual harassment case? (c) Rule – FRCP 26(b)(4)(b) - there must be a showing of exceptional circumstances under which it would be impracticable for the party seeking discovery to obtain 18 Civil Procedure – Garrett 8/12/2008 facts or opinions on the same subject by other means. (rule 35 – medical examiners, exception to Rule 35) (i) This is the non-testifying, but retained expert test. (3) Chiquita International Ltd. v. M/V Bolero Reefer – non-testifying expert who is also a fact witness (a) Facts – Maritime action in which the shipper, Chiquita International (π), sues the carrier International Reefer Services. An expert witness was also a witness of fact because he was on the dock and aw the relevant facts. It is important to note, he is a non-testifying expert witness. (b) Issue – Can the Δ compel discovery of the non-testifying expert witness (who is also a factual witness)? (c) Rule – information does not become exempt from discovery merely because it is conveyed to a non-testifying expert. In this case, documents relating to discoverable information should be produced, but documents that include observations and opinions need not be disclosed. (d) Holding – Winer was ordered to turn over those files that did not reflect his observations and opinions. vi) Enforcement of discovery rules (1) 26(g) – rule 11 for discovery – front end (a) must be signed (b) “consistent with these rules and warranted by existing law or a good faith argument for the extension, modification, or reversal or existing law… not interposed for any improper purposes such as to harass or cause unnecessary delay… not unreasonable or unduly burdensome…” (i) Rule 11 does NOT apply to discovery, so this is the Rule 11 for discovery. (ii) 26(g) looks more like the 1983 version of Rule 11 than the current Rule 11 1. Once you find a sanction, it is mandatory that you sanction. Rule 11 provides the court with discretion. 2. No discretion about sanctioning, lots of discretion about what sanction – in Rule 11 presumption is against attorney fees (big change from 1983 version) but 26(g) has a preference to attorney fees. (2) 26(c) – ask for a protective order and the court to enter a protective order – management (a) Protective order is a management tool to deal with discovery as it happens. (3) Rule 37 – Compel discovery (a) 37(a) – motion to compel discovery - back end (i) obligation to try to work it out before going to court. When you take the motion to court, whoever loses pays the cost, including the attorney‟s fees of the motion. (b) 37(b) - once there is an order to compel discovery, 37(b) deals with sanctions. (i) lots of potential sanctions – 1. taken facts as admitted 2. cannot bring claim forward if you don‟t participate on the claim 3. dismiss the action 4. hold you in contempt (c) 37(c) – refusal to admit (i) if you are asked to admit something and you don‟t and it is proven at trial, you may have to pay the cost of proving it. (ii) if you don‟t disclose something or supplement, you may be precluded from making those arguments at trial (d) 30(d)(3) – part of the deposition rule (i) sanctions a party for impeding a deposition. (e) 37(d) – when you are suppose to depose someone and they just don‟t show up (i) there are lots of punishments from 37(b)(2)(a) or (b) or (c) but NOT (d). (4) Chudasama v. Mazda Motor Corp. – Sanctions as a remedy under discovery 19 Civil Procedure – Garrett 8/12/2008 (a) Facts – π bought a minivan from Mazda and lost control of it, sustaining major injuries and being forced to miss work. She filed a products liability action against Mazda. Discovery took nearly two years; the plaintiffs asked for nearly everything and the defendant was willing to give nearly nothing and delayed parts of discovery. Mazda responded to further discovery requests by objecting then seeking to get the fraud charge dropped then seeking a protective order and finally by withholding a substantial amount of information. The court stepped in and required Mazda to turn over all requested documents within 15 days. Mazda came very close, but did not comply by 5 p.m. The court then issue a default judgment for the π. (i) Judge failed to properly supervise discovery and defendant resorted to self-help to avoid plaintiff overreaching. The Appellate Court reversed the order of the district court (which entered a default judgment). (b) Rule – (i) District court decisions on discovery are reviewed under an “abuse of discretion” standard. (ii) Rule 26(g) – once there is a violation (this is the Rule 11 of discovery), sanctions must be administered. “The nature of the sanction is matter of judicial discretion to be exercised in light of the particular circumstances.” vii) Important tools of discovery that are helpful to know (1) interrogatories – rule 33 (a) Rule 33 – Interrogatories (i) Must be parties to the suit (ii) Limited to 25 questions (iii) Answers and objects must be signed; 1. Grounds for objection – e.g. overly broad and vague; burdensome and oppressive, privilege (attorney-client or work product); not calculated to lead to discovery or admissible evidence (b) advantage of being cheap (relatively) (c) problem - no follow-up and the lawyers help to draft the answers (d) “contention interrogatories” (i) usually at the end of discovery – what is the evidence you rely on the assume your legal theory; facts related to legal theories (e) Document production (rule 34) (i) goes to parties only 1. does this mean you can‟t get them from other non-parties? NO – just subpoena them. (ii) These are often subject to abuse – many just pile on the requests because parties don‟t want to miss anything. Lots of requests also burden the other side. 1. You can object because of burdensome or oppressive requests. (2) Rule 30 – Oral Depositions (a) anyone except in prison (can be prisoner by court permission) (b) 1 day, 7 hours unless there are delay tactics (in which case there can be sanctions with attorneys fees) (c) Failure to attend – must pay opposition attorney fees and expenses (d) Only 10 depositions. Thus you might want to wait until the end of discovery, so you have a better idea of what questions you want to ask. 10 probably does not include experts, but not sure.. (e) Might want to wait until the end since they are expensive and limited and you want to know what information you (f) When is it you can bring the deposition into trial? (Rule 32) (i) for impeachment (ii) when party is an agent of a party (officer of corporation and you are suing the corporation) (iii) when the deposed party is dead or unavailable to testify 20 Civil Procedure – Garrett 8/12/2008 (g) What do you do when you need to depose someone who lives far away? (i) just b/c she is not within the jurisdiction of the court, you can go to the court in her jurisdiction (ii) can go to depose her. can ask her to come depose (iii) deposition on written questions (Rule 31) (3) Medical examinations (Rule 35) (a) applies only to parties and must relate to the case (b) requires a court order upon showing good cause and relevancy to controversy. (c) 35(b) – if requested by party, the results of exam can be turned over (i) both parties can request and receive both sides medical exam records (this waives patient-doctor privilege) (4) Request for admissions (Rule 36) (a) the purpose is to limit the number of things at controversy, stipulate to those things, and avoid having to „prove‟ it at trial. (i) the admission is binding, conclusive (36(b)), unless court permits withdrawal or amendment (serves justice) (b) no limit on # of requests for admissions (5) Rule 31 – Depositions upon written questions. Hybrid with interrogatories. Court reporter records (6) Rule 34 – Inspection of Land IV. The Pretrial Process and Dispute Resolution a) Settlement i) Discovery plays a large role in settlement (1) How much do the parties want to avoid the trial and discovery costs (2) Discovery encourages settlement b/c it is a relatively cooperative process (at least compared to the adversarial nature of the rest of the trial) (a) Discovery also reduces the issues that are actually going to be tried (by stipulating to other facts) (3) judicial involvement in the process may also encourage settlement or mediation ii) Settlement as contract (1) Plaintiff offers consideration (won‟t continue the lawsuit, will keep this secret, etc.) AND (2) Defendant offers consideration (money, will or won‟t do something). iii) Settlement as two axis of deals – (1) There are substantive considerations (money, will or won‟t do something) (2) There are procedural considerations (dismiss the case, keep the issue secret, consent, decree, private contract enforcement, etc.) iv) Court involvement in settlement (1) Court is generally not involved (2) Two exceptions (a) Court has to approve any settlement of a class action – one person is representing many people not before the court, so court approves a class action because there are people that are represented and their rights need to be looked out for. (b) Court has to approve any settlement in cases involving minors (i) minors are thought of as not being able to protect themselves so if it is a consent decree that is violated, courts may get involved with enforcement (3) Lack of court involvement has caused some criticism (particularly over priest settlements and Firestone tire cases) v) Kalinauskas v. Wong – confidentiality and settlement (1) Facts – π (Kalinauskas) filed a sexual harassment suit against Caesars Palace Hotel and Casino. She sought to depose Donna Thomas, a former Caesars employee who filed a sexual harassment suit last year. Thomas‟s suit settled without a trial pursuant to a confidentiality agreement, which the court sealed. (2) Issue – can π discover from Ms. Thomas despite the confidentiality agreement? 21 Civil Procedure – Garrett 8/12/2008 (3) Rule – “Where an appropriate modification of a protective order [or confidentiality agreement] can place private litigants in a position they would otherwise reach only after repetition of another‟s discovery, such modification can be denied only where it would tangibly prejudice substantial rights of the party opposing modication. Even after demonstration of prejudice, the court has broad discretion in judging whether that injury outweighs the benefits of any possible modification.” (a) Rule 26(b)(1) - discovery allows parties to “obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending case…” It is not ground for objections that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.” (4) Holding – this court rejects Caesars argument and rules that Ms. Thomas‟s information can be discovered. (5) What happens to Ms. Thomas? If she is deposed, does she violate her confidentiality agreement? Answer: NO. “Those penalties shall not apply to the disclosure of information for discovery purposes in furtherance of Kalinauskas‟s case.” (6) Policy considerations – (a) confidentiality agreements to induce settlement vs. buying complaining party‟s silence in future cases. vi) Rule 68 – cost shifting after failed settlement (1) If the final judgment obtained by the offeree is NOT more favorable than the offer, the offeree must pay the costs incurred after the making of the offer. So, if the offer of $50,000 is rejected and the jury awards $40,000, the plaintiff must cover the costs incurred after making the offer. b) Preliminary relief i) Rule 64 – seizure of person or property (1) At the commencement of and during the course of an action, all remedies providing for seizure of person or property for the purpose of securing satisfaction of the judgment are available under the circumstances and provided by the law of the state in which the district court is held. Remedies available include: arrest, attachment, garnishment, replevin, sequestration, and other corresponding or equivalent remedies. ii) Rule 65 – preliminary injunctions and TRO‟s (1) No preliminary injunction shall be issued without notice to the adverse party. If you have tried and you just cannot wait and it has to be done immediately, judge can grant the TRO without the other party being present. (a) If a TRO is granted without notice, the TRO must state the date and time issue and why the order was granted without notice and shall expire in no more than 10 days. (b) Motion for preliminary injunction shall be set down for hearing at the earliest possible time and takes precedence over all matters except older matters of the same character (2) hearing on injunction (a) the judge can collapse a hearing for the TRO/PI with the whole case (i) the recall case was an example of a TRO (not a full blown trial). (3) If there is a hearing, testimony may bebinding at trial (4) Both parties are represented and arguments are made. (5) 65(c) – security (a) Judge grants a TRO without knowing who is going to win the case. If that party loses and the TRO has been granted against the innocent, that could be problematic. (i) The party filing the TRO has to put up a security (deposit) to pay the other side if the TRO was accepted incorrectly. 1. This is mandatory, but judge had discretion over size of deposit, making the security deposit less mandatory. (6) Inglis & Sons Baking Co. v. ITT Continental Baking Co. – preliminary injunctions 22 Civil Procedure – Garrett 8/12/2008 (a) Facts– Plaintiff sought a preliminary injunction against the Δ (to stop the Δ from selling bread below a particular price) because the π alleged the Δ was using predatory pricing to drive the local baking companies out of business. (i) The trial court rejected the motion for preliminary injunction and the Appellate Court reversed that order and remanded. (b) Rule – (i) test in determining whether to grant a preliminary injunction 1. the plaintiff will suffer irreparable injury if injunctive relief is not granted 2. the plaintiff will probably prevail on the merits 3. in balancing the equities, the defendants will not be harmed more than plaintiff is helped by the injunction, and 4. granting the injunction is in the public interest (ii) normal test – probable success of moving party and irreparable injury (if not granted). (iii) alternate test – “It is not necessary that the moving party be reasonably certain to succeed on the merits. If the harm that may occur to the plaintiff is sufficiently serious, it is only necessary that there be a fair chance of success on the merits.” (iv) Sliding scale 1. assumes the burden of demonstrating either a combination of probable success and the possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in his favor. Thus the “will prevail” part is NOT as important but the “there is a serious harm to the plaintiff” is elevated to be even more important. 2. The goal is to minimize damages of the judge’s error. (7) Fuentes v. Shevin (a) Facts – π (Ms. Fuentes) purchased a gas stove under a conditional sales contract calling for monthly payments over a period of time. Under the contract, Firestone maintained the title to the merchandise, but π was entitled to possession unless and until she should default on her payments. Then there was a dispute over service and π. Firestone filed a suit in small claims court and simultaneously obtained a writ of replevin ordering the sheriff to seize the disputed goods at once. (b) Issue – “whether procedural due process in the context of these cases requires an opportunity for a hearing before the State authorizes its agents to seize property in the possession of a person upon the application of another?” (i) Is there a problem with the summary nature of this process? (c) Rule – Only in a few limited situations has this Court allowed outright seize without opportunity for a prior hearing. (i) Seizure has been directly necessary to secure an important governmental or general public interest (ii) There has been a special need for very prompt action (iii) The State has kept strict control over its monopoly of legitimate force: the person initiating the seizure has been a government official responsible for determining, under the standards of a narrowly drawn statute, that it was necessary and justified in the particular instance. (d) The Rule was crafted very narrowly to avoid any effect on government repossession of property to protect the security interests of creditors so long as those creditors have tested their claim to the goods through the process of a fair prior hearing. c) Summary Judgment – i) Rule 56 (1) For claimant - A party seeking to recover upon claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after expiration of 20 days from the commencement of the action or after service of a motion summary judgment by the 23 Civil Procedure – Garrett 8/12/2008 adverse party, move for summary judgment in the party‟s favor on part or all of the complaint. (2) For defending party – A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may move for summary judgment in the party‟s favor for part or all of the complaint. (3) Motion and proceedings – The motion shall be served at least 10 days before the hearing. Adverse party prior to the day of hearing may serve opposing affidavits. The judgment shall be rendered if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. A summary judgment (interlocutory in character) may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages. (4) Case not fully adjudicated on Motion – if only a partial summary judgment, the court shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy. Upon trial, the facts so specified shall be deemed established and the trial conducted accordingly. (5) Form of Affidavits; Further Testimony; Defense Required – Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. When a motion for summary judgment is made and supported, an adverse party may not rest upon the mere allegations or denials of their pleading. An adverse party‟s response, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party. (6) When affidavits are unavailable – If the affidavits of a party opposing summary judgment appear that the party cannot for reasons stated present by affidavit facts essential to justify the party‟s opposition, the court may refuse the application for judgment or order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or other order as is just. (7) Affidavits made in bad faith (Rule 11 for summary judgment) – Affidavits made in bad faith or solely for the purpose of delay, the court shall forthwith order the party employing them to pay to the other party the amount of the reasonable expenses which filing the affidavit caused the other party to incur (including attorney‟s fees) and any offending party or attorney may be adjudged guilty of contempt Rule 41(a) – Voluntary Dismissal – By Plaintiff; by Stipulation – An action may be dismissed by the π without the order of the court by filing a notice to dismiss before service by the adverse party of an answer or of a motion for summary judgment, whichever comes first OR by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated, the dismissal is WITHOUT prejudice, except when dismissal operates as an adjudication upon the merits when filed by π who has once dismissed in any federal or state court based on or including the same claim. [2 chances] Rule 41(a)(2) – Voluntary Dismissal – By Order of the Court - An action will not be dismissed at the plaintiff‟s instance unless upon order f the court AND upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a Δ prior to service upon the Δ of motion to dismiss by π, the action shall not be dismissed against the Δ‟s objection UNLESS the counterclaim can remain pending for independent adjudication by the court. Unless otherwise specified, dismissal under 41(b) is WITHOUT PREJUDICE. ii) Summary judgment vs. 12(b)(6) (1) 12(b)(6) (a) 12(b)(6) dismiss case before it goes to trial (b) Motion to dismiss just goes to the pleadings (c) Denial of a motion to dismiss, is the judge stating that the claim is sufficient (d) Is not an adjudication on the merits (usually granted with leave to amend) (e) Defendants bring a motion to dismiss (2) Summary Judgment 24 Civil Procedure – Garrett 8/12/2008 (3) (4) (5) (6) (a) Decides cases on a matter of law (b) Summary judgment looks at the proof you have already got. (i) It doesn‟t take into account what you have alleged, just what you can prove and have evidence to support. (c) Denial of a motion for summary judgment, is the judge saying there is some proof (enough evidence that a reasonable jury can find for the non-moving party) (d) Is a motion on the merits and is granted with prejudice (you cannot bring this suit again) (i) You can appeal the final judgment (summary judgment) (e) Plaintiff or defendant can move for summary judgment (usually is done by the Δ). (f) Both sides must come forward with admissible proof Summary judgment has more teeth because the motions before summary judgment do not have many teeth. Before Celotex, the leading case was Adickes v. S.H. Kress & Co. (a) Adickes rule – the defendant moving for summary judgment had the burden of showing that plaintiff could not prevail at trial. Celotex Corp. v. Catrett – summary judgment – burden of proof (a) Facts – Decedents wife sues Celotex for her husband‟s death from exposure to asbestos from Celotex. Defendant moved for summary judgment claiming that π failed to produce evidence that any Celotex product was the proximate cause of the injuries alleged. In response, π responded with three documents that all tended to establish that the decedent has been exposed to petitioner‟s asbestos products in Chicago. (i) District Court granted the motion because there was no showing that the plaintiff was exposed to defendant asbestos. (b) Rule – (i) Party seeking summary judgment bears the initial responsibility of informing the district court of the basis of its motion, and identifying these portions of the pleading, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any which it believes demonstrate the absence of a genuine issue of material fact. Rule 56 des NOT require the moving party support its motions with affidavits or other similar materials negating the opponent‟s claim. 1. Δ cannot just allege there is no evidence presented but that you have to demonstrate where in discovery the plaintiff should have been able to prove the material fact (in this case causation) and didn‟t. (c) Holding – “The moving party is entitled to judgment as a matter of law because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.” (i) “The standard for summary judgment mirrors the standard for a directed verdict under FRCP 50(a).” (ii) Celotex puts a lot of burden on the plaintiff to prove – (d) Celotex vs. Adickes motions – (i) In Adickes, the moving party has to submit affirmative evidence that negates an essential element of the nonmoving party’s claim. (ii) In Celotex, the moving party may demonstrate to the Court that the nonmoving party‟s evidence is insufficient to establish an essential element of the nonmoving party‟s claim. A party moving on the grounds that there is no evidence must affirmatively show the absence of evidence in the record. (This may require the moving party to depose the nonmoving party‟s witnesses or to establish the inadequacy of the documentary evidence.) Visser v. Packer Engineering Associates – (a) Facts –π (Visser) was fired when he was 64 years old, just 9 months shy of vesting his pension. He had been part of a group of people that had tried to replace Kenneth Packer in a bitter dispute over Packer‟s behavior that included a memo (which Visser 25 Civil Procedure – Garrett 8/12/2008 admitted writing) criticizing Packer‟s leadership. Packer won the dispute and asked Visser to pledge his unqualified loyalty to him. Visser refused and Packer fired him on the spot. (i) Visser sues for a violation of Age Discrimination in Employment Act and Packer files a motion for summary judgment. (b) Rule - Same rule as in Celotex, it is just deployed in this case. (i) 56(e) states that supporting and opposing affidavits shall be made on personal knowledge. It is true that personal knowledge includes inferences. But the inferences and opinions must be grounded in observation or other firsthand personal experience. They must not be flights of fancy, speculation, hunches, intuitions, or rumors about matters remote from that experience. (c) Holding – court grants the motion for summary judgment because there was insufficient evidence to get to a jury (not because the plaintiff had no evidence). (i) Posner didn‟t give a lot of credence to suspicious timing. If I did that, every time someone got fired close to – but before – their pension would sue and make it to a jury. V. The Trial a) Jury i) Relevant Rules (1) 7th Amendment – “In suits in common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any Court of the United States, than according to the rules of the common law.” (a) “shall be preserved” is a historical view into what was the situation in 1791 (when the 7th amendment was passed). (2) Rule 38 (a) Right to trial by jury should be preserved as per the 7 th amendment and can be expanded by statute of the US - While Congress cannot restrict the trial by jury, it can give the right to trial by jury in areas where the Constitution does not (e.g., Title VII claims) (b) Can waive trial by jury by failing to demand it within the appropriate amount of time any time after the commencement of the action and not later than 10 days after the service of the last pleading. (c) Can specify some or all issues in the complaint to be tried by a jury. (d) Can withdraw your request for trial by jury once you‟ve requested it, all parties must agree to the withdrawal. (e) Admiralty and maritime claims – not trial by jury. (3) Rule 39 (a) If a trial by jury is demanded, all issues will receive trial by jury, unless the parties file a written stipulation with the court (or oral motion in open court) to consent to no jury on certain issues or court on its own initiative finds that a right of trial by jury of some or all of those issues does not exist. (b) Default rule - Issues not demanded for trial by jury will be tried by the court; the court can upon its own discretion order a trial by jury on any or all issues. ii) Which cases have jury trials? (1) “suits in common law” for more than $20 – for civil cases, only jury trials for common law cases (legal cases) (a) specific performance – generally no jury (equitable remedy) (b) money damages – generally jury (legal remedy) (i) exceptions 1. restitutionary actions – disgorgement, for example 2. monetary awards incidental to or intertwined with injunctive relief – may be equitable 26 Civil Procedure – Garrett 8/12/2008 (2) trover and conversion – both common law (legal) and thus jury (3) replevin – want the thing back – is a writ and its common law and legal, thus jury (a) replevin is a jury even though it is specific performance (4) fraud – is legal and thus a jury (started as equity originally, but became legal) (5) trust – equitable (6) clean up doctrine – equitable (7) unjust profits (mesne profits) – equitable (8) reforming of contract - equitable (9) Markman v. Westview Instruments – functional justification for juries (a) This was a patents case. In 1791 patents cases got jury trials, however starting with Markman the courts have decided that patents cases should not have trials by jury. The courts used functional arguments, like the need for uniform decisions and that these cases are a combination of law and fact, to justify taking these cases away from juries. (b) Patents and copyright – judge decides (c) Implication – when the court wants to use a functional argument for no jury trial, the courts rel on the Markman precedent. (i) HOWEVER, the court has generally not gone that route. (10) Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry – remedy test is threshold test (a) Facts – π (employees working for McLean Trucking) were represented by the Δ (union). The employer changed its operations, which resulted in 27 π‟s being relocated to different locations, where they kept their seniority. After several weeks, the π‟s were laid off and recalled several times, resulting in a loss of seniority. The union assisted on two of the grievances, but when the π‟s filed the third, the union refused to assist. The π‟s brought this suit alleging the company had violated the collective bargaiing agreement and the union had violated the duty of fair representation. (b) Issue – employee (π) who seeks relief does so for back pay for the union‟s alleged breach of its duty of fair representation. Does the π have a right to trial by jury? (c) Rule – Look at a) the claim brought and whether that was in courts of law or courts of equity and b) is the remedy sought equitable or legal. (i) The dominant prong is b) remedy – it is the threshold test. (ii) If that case did not exist back in 1791, look at analogous cases that did exist in 1791. (d) Application – (i) This case is tricky because we did not have claims of “fair representation” against unions in 1791. (ii) Δ‟s arguments – a) This is similar to a case to vacate an arbitration award (which was equitable in 1791) b) This is similar to an action by a trust beneficiary against a trustee (equitable in 1791) (iii) π‟s arguments – a) this is similar to an attorney malpractice case (legal in 1791) (11) Amoco Oil Co. v. Torcomain – federal characterization of claim determines equitable or legal claim (a) Facts – Amoco wanted to eject Torcomains from an Amoco service station run by the Torcomains and wanted to enjoin them from selling under the Amoco copyright. There are some damages sued for as well as ejectment and injunctive relief. The defendants counterclaim with a bunch of breach of contract claims and suits for profits and damages (i) Amoco sued for ejectment (legal) – though it seems equitable (ii) permanent injunction (equitable) (iii) permanent injunction (equitable) (iv) mesne profits - disgorgement (equitable) 27 Civil Procedure – Garrett 8/12/2008 (v) money damages (legal) – Amoco attempted to amend complaint to eliminate legal damage claims (b) Issue – if the claims are mixed between equitable and legal remedies, should there be a trial by jury? (c) Rule – (i) “equitable main claim cannot preclude a jury trial on a legal counterclaim, at least when the counterclaim is compulsory” 1. a ruling to the contrary would allow preemptive filing of a complaint by the holder of an equitable claim to deprive the holder of a legal claim the 7 th amendment right to trial by jury. (d) Application – the federal law unequivocally holds actions seeking ejectment are legal, not equitable. (12) Some scenarios – (a) If you can separate out the cases and have separate trials, great. (b) If you cannot do that and there are going to be two trials, the jury trial has to go first. (c) The jury has to make the determinations of fact and then the judge (in the 2nd case) bases his judgment on the facts determined by the jury (and can decide any additional facts not relevant to the first case but relevant to the second case). b) Directed verdict and JNOV‟s i) Rules – the test is whether there is an issue as a matter of law (remembering both the burden of proof and persuasion) (1) Rule 12 - Motion to dismiss – deals with allegations in pleadings, not facts to be developed (2) Rule 56(c) – summary judgment – no triable issue of fact and grant a motion for judgment as a matter of law; takes facts from the discovery process and argues that even with those facts, there is no legal case. (3) Rule 50 – judgment as a matter of law – there is no reasonable evidence to support a genuine issue of material fact; no triable issue of fact and grant a motion for judgment as a matter of law. (a) Directed verdict - may be made at any time before submission of the case to the jury. Such a motion shall specify the judgment sought and the law and the facts on which the moving party is entitled to judgment. (b) JNOV – made after the jury returns its verdict. It is a motion to lay the jury verdict aside and enter a judgment in my favor as a matter of law because no reasonable jury could have concluded in this fashion. (i) Rule 50(b) – “renewing a motion for judgment after trial” can only move for JNOV if you have first moved for a directed verdict after all evidence has been presented. 1. Why? a. Judge may have been able to solve the problem earlier. b. “Renewing a motion for judgment after trial” avoids 7 th amendment concerns. (ii) Must make a motion within 10 days after the judgment. 1. Moving for JNOV does not toll the clock for motion for new trial ii) Standard of review (1) The cases are reviewed de novo (of no deference to the trial court) on these issues because it is a purely legal question and the Appellate Court is in as good a position to evaluate an issue of fact as is the trial court. iii) Usefulness of these doctrines (1) Why not just grant summary judgment, why wait to grant a directed verdict or JNOV? Sometimes the judge is unwilling to grant a summary judgment. You may want to see how the case is going to unfold. (2) Why not just grant a directed verdict, why wait to grant a JNOV? You may want to see if the jury comes back with the right verdict, because the Appellate Court is more deferential 28 Civil Procedure – Garrett 8/12/2008 c) d) e) f) to jury verdicts. The judge might also need some extra time to make a decision on directed verdict and will use that time while the jury is deliberating. iv) Reid v. San Pedro, Los Angeles-Salt Lake Railroad – judgment as a matter of law (1) Facts – Action was brought by π to recover damages for the killing of her cattle by Δ‟s train. The Δ negligently allowed the fence along the line of the railroad to be broken and in poor repair and become down so that cattle had an easy passage. A gate was also left open along side the railroad (not the fault of the Δ), and the π does not know whether the cow got out through the open gate or the broken fence. (2) Issue – are there enough facts to sustain this case going to the jury? (3) Rule – the burden is on the part of the π to prove the Δ‟s liability by a preponderance of the evidence. If the existence of an essential fact is sought to be inferred, points with equal force to two things, one of which renders the defendant liable and the other not, the plaintiff must fail. (a) If there are two possibilities that each have exactly a 50-50 chance of being true and the Δ would not be liable in one case, the π must lose because they have not proven a preponderance of the evidence. (4) This does not mean that circumstantial evidence is not sufficient to get to the jury, just that in this case there was insufficient evidence. (5) Armour analogy – have to get past red zone to get past a directed verdict. v) Pennsylvania Railroad v. Chamberlain – judgment as a matter of law (directed verdict) (1) Facts – π brought an action for the death of a brakeman, alleged to have been killed by the Δ‟s negligence. There was a wreck in a train yard that caused him to fall of a train and he died. Bainbridge was a witness at the scene, but not of the actual event. He heard the crash, but did not see it. He was able to estimate, from his expertise, what happened. Trial court granted a directed verdict against π (Chamberlain). (2) Issue – is there sufficient evidence for the case to make it to a jury? (3) Rule – (example of the rule). Ruling must go against the party with the burden of proof b/c there are witnesses that give conflicting testimony with equal support, so the π does not meet preponderance of the evidence. vi) Different standards in different jurisdictions (1) centilla (iota) of evidence in the π‟s case, then the case should go to the jury. This is the most deferential standard to juries. (2) Look only at the evidence that supports the non-moving party. This is a deferential standard as well, that decreases the number of directed verdicts. (3) Non-moving party‟s evidence + any evidence put forward my moving party that is not impeached or contradicted. This is the federal standard. This standard means there are more directed verdicts. Reopening the verdict – Rule 60 – very rare i) Within a year, there was some real serious flaw in this case and the trial must be reopened. Special verdict – Rule 49 – ask the jury a series of questions or interrogatories and use the reasons for structure of decision. Also not used very often. Instructions to jury – Rule 51 – if you have a problem with one of the instructions, you must object before the jury retires to make its decision. (standard of review on appeal – de novo). New Trial i) Rule 59 – (1) even though there is some evidence, the jury decision is against the great weight of the evidence. (2) there was something wrong with the process (let in evidence that should not have been allowed in or there was jury interference, etc.) (3) need to make a motion for a new trial within 10 days of the judgment. If you miss the 10 days, you can file a Rule 60 motion for reopening the verdict, but those are VERY rare. (a) must have urged the problem before. (4) Make JNOV motion with New Trial motion (so if you fail on JNOV, you are all set for a new trial). 29 Civil Procedure – Garrett 8/12/2008 ii) Granting of new trial not a final judgment, cannot be appealed. iii) Grounds for a new trial (1) Procedural error – (evidence admitted that should not have been; mistake in admitting evidence)(council or judge made comments that were prejudicial)(jury instructions were flawed)(jurors acted inappropriately; misconduct) (2) Result was wrong – “against the weight of the evidence;” jury acted irrationally. iv) Lind v. Schenley Industries – (1) Facts – Lind (π) was an employee at the Δ‟s liquor store company. He alleged that the Δ orally promised him an increase in pay and share of commissions but had then breached the promise. The jury found in favor of the π and the Δ appealed for JNOV and alternatively for a new trial. The judge granted the new trial. (a) The judge granted the new trial b/c the jury‟s verdict (1) was contrary to the weight of the evidence, (2) contrary to law, and (3) a result of error in the admission of evidence. (i) If the π‟s testimony was correct, he would be making more money than the company President. The π also went years without taking any action after his boss breached the promise to give him a raise. (2) Appellate Court reviews granting of new trial under abuse of discretion standards. (3) Issue – Should the court have set aside the verdict and ordered a new trial? (4) Rule – While there is no explicit standard, the standard is essentially that: “The judge‟s duty is essentially to see that there is no miscarriage of justice. If convinced that there has been then it is his duty to set the verdict aside; otherwise not.”. (5) Holding – the court held for the π and reversed the granting of a new trial and ordered the lower court to reinstate the verdict for the π. (6) Can only appeal a final decision – a granting of a motion for a new trial is NOT a final judgment. So if a new trial motion is granted, non-moving party CANNOT appeal. (a) Can appeal a JNOV or summary judgment or directed verdict (if they are final judgment). (7) Criteria to move for a new trial (a) The ground on which you move for a new trial must have been made before (i) if you move for a new trial because the verdict is against the weight of the evidence, you must have moved for a JNOV (and thus for a directed verdict). (ii) If you move for a new trial because of flawed jury instructions, you must make that objection at the appropriate time of the instruction. (b) You really must combine a JNOV with the Motion for a New Trial because if you do not make a new trial motion within 10 days of the judgment, you will lose the ability to appeal for a new trial (or have to make a rule 60 motion) (8) If a party appeals because of judicial error for procedural issues (e.g. admission of evidence), the standard is de novo because it is a legal question that the trial court judge is in as good a position as the appellate judge to apply the proper law. (9) Conditioned new trials (a) trials limited to damages (b) remittitur – the judge orders a new trial unless the damages are decreased by the prevailing party, respectively. g) Voir Dire – when you question the jury before the trial. Can get rid of the jury for cause (the juror could not be fair or impartial) and preemptory challenge (usually three and they can be for whatever reason; there are constitutional rules that deal with preemptory challenges dealing with race and gender; Marshall (who wrote many of those opinions) thought the preemptory challenges should have been abolished). h) Control of Evidence – limit what juries can hear so they remain impartial. i) Comment on the evidence – allowed at state and Federal level. Judges usually do not do this b/c it can create some trouble in appellate process. 30 Civil Procedure – Garrett 8/12/2008 VI. Appeals – (Between 80% and 90% of cases appealed are upheld) a) Who can appeal? i) Only a Losing Party… (1) If a party loses on one theory but wins on another, can he appeal? Answer: If the relief sought under the losing theory was identical to that awarded, no appeal will lie because even if the trial court clearly erred, the error was harmless b/c the party still recovered all they sought to recover. If the relief would have entitled the appealing party to more or different relief, then the appeal is allowed. (2) Aetna Casualty and Surety Co. v. Cunningham – who can appeal? party that doesn‟t get relief it claims its entitled. (a) Facts – two claims – one for indemnity and the second for fraud (which includes the possibility of punitive damages). Aetna issued its draft in the amount for San Antonio Independent School District to make good the failure of Cunningham to complete a building contract. Aetna won the indemnity suit but lost the fraud suit. (b) Issue – Can Aetna appeal from the judgment that was in its favor in the amount prayed for (because it won the indemnity suit, but lost the fraud suit). (c) Rule – when, as a practical matter, the denial of any one claim results in the plaintiff not getting the relief to which it claims to be entitled, whether in the amount or in the quality of the judgment, it has a right be heard on appeal. (d) Generally viewed as quantitative, but it can also be qualitative – not just amount of money, but the quality of the decision (being able to collect b/c it is punitive damages). ii) Who was not deterred (1) Every jurisdiction grants the right of at least one appeal in civil cases; further appeal is often discretionary. (2) Some burden of costs on appeal (but that is questionable – Constitutional to have some burden, but there are waivers). b) How can you preserve an issue for appeal i) You have to object to that issue during trial, otherwise there is a waiver of the contention. (1) Does not need to be a formal exception (Rule 46) ii) Four exceptions (1) plain error – you can argue something you didn‟t argue below if the error is so egregious, so harmful to the case that it must be heard on appeal (2) Issue of subject matter jurisdiction – can raise the „subject matter‟ jurisdiction argument at any time during proceeding (can be sua sponte) [that is the argument in Liberty v. Wetzel] (3) Significant change in the law (since the trial court made its decision) – Carson Products v. Califano. (a) Carson Products Co. v. Califano – significant change in the law 9since the trial court made its decision) (i) Facts – Carson (π) loses. Carson does not want to have to put on its label its secret ingredient. Sometimes after the trial case, but before the appeal, the Zoto case comes down, saying that the FDA‟s procedures for determining trade secrets is inadequate (and the FDA doesn‟t appeal that ruling). Carson wants to argue this due process claim (that was argued in Zoto) even though Carson had not made this argument during the case – because the law had been changed. (ii) Rule – “The matter of what questions may be taken up and resolved for the first time on appeal is one left primarily to the discretion of the courts of appeals, to be exercised on the facts of individual cases.” 1. Needs to be an exceptional situation - test – a. How surprising is the change of law? b. How big a change is it? c. Purely legal question (does the change of law present a purely legal question)? 31 Civil Procedure – Garrett 8/12/2008 d. Full opportunity to brief at the appellate level? – all the parties knew this was an issue that needed to be discussed, both sides filed briefs on either side and were able to conduct research (iii) Finality vs. correct – cases that have already been finalized, cannot be reopened and re-litigated when there are changes to the law. If the case is still pending because the final decision is still on appeal, then the case can be review (as per the rule Carson Products). (4) Prevailing party (in an appeal) can defend its judgment on any issue that was raised but not decided in the lower court (A is suing B. A wins. A can defend any issue (Mass Mutual) (a) Mass Mutual Life Insurance Co. v. Ludwig – (i) Facts – Decedent was killed while walking to the train and was struck by the train. The insurance policy provided for double indemnity if the π was killed while a passenger on a public conveyance for hire. The contract was entered into in MI and the accident occurred in IL. The π loses and appeals. (ii) Trial court holding – The trial court concludes based on MI aw there is no double indemnity. 1. The Δ had argued there was no indemnity based on ILL law. 2. The π argued there was double indemnity based on MI law. (iii) In the appeal, the π argues under MI law, it should get double indemnity. The Δ wants to argue that the proper law to be used is IL law and there should be no double indemnity. (iv) Rule – if you are defending a judgment, you can defend it with any arguments in the record. Prevailing party is not limited to supporting the district court‟s rationale. (v) Application – the Δ can defend the court‟s judgment (no double indemnity) on other grounds than the grounds used by the trial court. (vi) Distinguished from Steffan (homosexual discharge case) b/c agencies cannot bring up new information on appeal if they prevailed. c) When can you appeal? i) Final judgment (interlocutory appeals are disfavored). (1) A final judgment ends litigation on the merits (issue of liability and relief – the entire complaint (Rule 54). (a) There are lots of things that are decided during the case that are very important, but not all of those things have interlocutory appeals (2) Liberty Mutual Insurance Co. v. Wetzel – final judgment (a) Facts – Women were suing for a Title VII violation for the insurance company‟s maternity leave and benefits. π‟s win partial summary judgment on the issue of liability. So only damages are left to decide (which included injunction, damage for back pay, pay for the cost of the suit, etc.). The court makes some decisions on damages, but leaves the several damages questions still open. (i) The case is appealed to the Supreme Court and the Supreme Court sua sponte decides that it does not have the jurisdiction to hear the case because no final judgment was made. (b) Rule – (i) Rule 54(b) – does not apply to a single claim action… It is limited expressly to multiple claims actions in which one or more but less than all of the multiple claims have been finally decided and are found otherwise to be ready for appeal. (ii) USC 1292(a)(1) – courts of appeal shall have jurisdiction of appeals from district courts granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions. 32 Civil Procedure – Garrett 8/12/2008 (iii) USC 1292(b) - If it is an interlocutory appeal, it must be stated in writing by the judge that it is an interlocutory appeal and then the Court of Appeals has discretion to hear the case. (c) Application (i) Rule 54(b) – this is just a single claim, s 54(b) doesn‟t apply. 1. Claim – is based on one action (in this case, one violation of Title VII) with multiple parts related to that one claim. Even though the π prayed for several different types of relief, their complaint advanced a single legal theory which was applied to only one set of facts. (ii) USC 1292(a)(1) and USC 1292(b)– was not appealed as an interlocutory appeal and the Court of Appeals should have had discretion to reject the appeal, but did not have that discretion in this case. Plus, the trial court case did not act on the injunction as understood in §1292(a)(1) ii) Exception to the final judgment rule – collateral final order. (1) Lauro Lines s.r.l. v. Chasser – collateral final order doctrine (a way to have an interlocutory appeal) (a) Facts – π‟s represent estates for persons that were killed after a cruise ship owned by the Δ Lauro) was hijacked. Δ moved to dismiss the trial, citing the forum selection on the ticket. The forum selection clause purpoted to obligate the passenger to institute any suit arising in connect with the contract in Naples, Italy and renounce the right to sue elsewhere. (b) Issue – Trial court rejected the motion and the Δ appealed, even though it was not a final judgment. (c) Rule – collateral order doctrine; it has to be extraordinarily important – 3 factors. (i) the lower court needs to have conclusively determined the question – not going to come up again, nothing is going to be gained from waiting, facts have been fully ordered, etc. (ii) resolve an important issue separate from the merits of the case, AND (iii) effectively unreviewable on the final judgment (if we wait until the end, the purpose has already been defeated). (d) Continuum – (i) Collateral order – always on Immunity defenses. (ii) Never collateral order – things like 12(b)(6) motions. (iii) Forum selection falls somewhere in the middle. (e) Best way to explain collateral order doctrine – frame the issue. Is it: “right to what court binds Δ vs. right to stand trial at all”? (i) If it is the right to be bound by this court, probably not collateral order doctrine (Scalia‟s concurrence). (ii) If it is the right not to stand trial at all, then collateral order doctrine because standing trial in the first place (even if reversed on appeal) defeats the purpose of immunity (for example). (2) Writ of Mandamus (extraordinary writ) (a) very rare (b) It is technically a separate action – you argue that the a judicial officer is behaving inappropriately. (i) if federal court, it usually is a §1292. (ii) Generally used more on the state level, for states that limit interlocutory appeals. (c) Example – Caltrans case (People ex. rel. Department of Transportation v. Superior Court) d) Standard of review used by Appellate Court - could be the most important thing to know on appeal i) Jury decisions – extraordinary deference to the jury – almost impossible overturn ii) Review for abuse of discretion (1) Appellate Court is least likely to overrule – abuse of discretion is the most deferential 33 Civil Procedure – Garrett 8/12/2008 (a) this is kind of a continuum and there are different levels of intensity within abuse of discretion (2) We saw this a lot in the discovery cases – magistrate decisions are reviewed for abuse of discretion (3) Sometimes when a case is really important (7th amendment cases or other important rights) iii) De Novo – (1) least deferential (2) Appellate Court views a question of law and makes a decision without deference to the lower court iv) Clearly erroneous – (1) middle of the road standard (2) Standard of review for judges determining facts – was the judge‟s decision clearly erroneous? (a) This was the issue in the Mazda case (Judge failed to properly supervise discovery and defendant resorted to self-help to avoid plaintiff overreaching. The Appellate Court reversed the order of the district court (which entered a default judgment). (b) Anderson v. Bessemer City – clearly erroneous standard of review (i) Facts – π (only woman to apply for a job) sues the city for sexual discrimination in hiring because she did not get the job. 1. After the judge hears a bench trial, the judge (as finder of fact) finds for the π. The Appellate Court reverses the judge‟s decision saying it used the “clearly erroneous” standard, but the Supreme Court says that the Appellate Court incorrectly uses a de novo standard in practice. (ii) Issue – The question is NOT whether the Fourth Circuit‟s interpretation of the facts was clearly erroneous, but whether the District Court‟s finding was clearly erroneous. (iii) Rule – FRCP 52(a) – “Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses.” (iv) Application – the failure of the Court of Appeals was its failure to give due regard to her ability of the District Court to interpret and discern the credibility of oral testimony. VII. Personal Jurisdiction a) Definition – when does the court have the jurisdiction to bind the parties because of jurisdiction over the person. i) Personal jurisdiction does NOT say that this is the best place for jurisdiction, just that it is a sufficient place for jurisdiction. b) Foundations of personal jurisdiction – 3 different foundations i) Constitution provides a minimum for jurisdiction – it can be exceeded by statutes and judicial decisions. ii) Where does personal jurisdiction come from? (1) Due process clause – violates due process to render judgment unless the court has personal jurisdiction (2) Full faith and credit clause and additional federal statutes – (a) full faith and credit part of the Constitution – be given to each state to the public acts, records, and judicial proceedings of every other state. (i) this applies to the federal government via statute. (3) Principles of public law – importance of states respecting each others boundaries, convenience of parties, bias against out-of-state defendants, etc. c) 2 prong question for jurisdiction i) Constitutional ii) Statutory (1) FRCP 4(k) – this is the statute for Federal Courts (sometimes allows broader jurisdiction) 34 Civil Procedure – Garrett 8/12/2008 (a) 4(k)(1)(d) – when authorized by statute. (b) 4(k)(1)(c) – federal interpleader jurisdiction under 28 USC § 1335. (i) bring all of the people who have claims into one court and figure it out at one time 1. For people have claims over one piece of property, let‟s bring them all in and settle this at one time. (c) 4(k)(1)(b) – who is a party joined under Rule 14 or Rule 19 (Rule 14 – Third party and Rule 19 – joinder of persons needed for just adjudication), is served within a judicial district of the US, and within 100 miles of the jurisdiction for service (i) NYC Rule - B is liable to A, but C will pay. If C doesn‟t have contact in the state where A is suing B, you can sue in federal court as long as the person is within 100 miles. (2) FRCP (4)(K)(2) – jurisdiction by necessity – if the exercise of jurisdiction is consistent with the Constitution and statute, service of process is effective with respect to claims arising under federal law, to establish personal jurisdiction over a person who is not subject to the courts of general jurisdiction of any state. (a) Some defendants are foreign and have sufficient contact with the US that it is fair to exercise jurisdiction over that person by the US, but not sufficient contact to have jurisdiction in a particular state. (i) e.g. Foreign Corporations (3) Mullane – cited by Lindsey v. Greene – “The right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.” (a) Facts – prior to mutual funds there were common funds. In this case, 118 trusts were pooled into one common fund and invested into diversified portfolios. Every so often, bank had to go into court and prove that it was acting reasonably. (b) Issue - The question in Mullane, was how to notify these persons of the annual review. Mullane litigates whether notice by publication is sufficient. (c) Rule – Same as Lindsey v. Greene – notice reasonably calculated to give the party the information they need. (d) Policy – there is notice via publication on one hand and notice through personal service on the other. Neither seems appropriate – one is not enough and one is too much. d) Presence i) Pennoyer v. Neff – in person jurisdiction; presence (1) Facts – First case was Mitchell v. Neff. Mitchell sued Neff for attorney fees that were never paid. Neff was notified via publication in the Methodist weekly paper. Neff did NOT show and judgment was entered against him. Attachment was made on his land in Oregon to pay Mitchell. The land was then sold to Pennoyer, which is how he got involved in the case. Neff (π) comes back to his property to learn that Pennoyer owns it and now sues Pennoyer (Δ) for ejectment from his land. (a) This case is a collateral attack on the first case. (2) Rule – “no natural person is subject to the jurisdiction of a court of the State unless he appear in the court (CONSENT), or be found within the State (PRESENCE), or be a resident thereof, or have property therein (only to the extent of such property at the time the jurisdiction attached). (a) How do we know if a person is present in a jurisdiction? Even if you are outside of the jurisdiction, you may still have some presence in that jurisdiction? Answer: two ways. (i) Notify the person in that jurisdiction OR (ii) attach the land (post a notice on the property) – presumption is if you have property in the state, you are monitoring it or have someone else monitoring your property. (b) Can consent to jurisdiction (see the rule) – 35 Civil Procedure – Garrett 8/12/2008 (i) Personal jurisdiction can be waived, but subject matter jurisdiction cannot be. It can be raised at any time (even sua sponte by the courts). (3) Necessary vs. sufficient (a) Presence is sufficient – “every State possesses exclusive jurisdiction and sovereignty over person and property within its territory.” (b) Presence is necessary – to confer jurisdiction over a person in the state. (4) Pennoyer ensures there is notice - both methods (notify the person or notify the property) are designed to ensure the person is noticed. (5) Why can a state assert personal jurisdiction even if the person is not in the jurisdiction? (a) You accrue benefits from the state, so you should be subject to the state‟s jurisdiction. (6) Important terms (a) In rem – property jurisdiction, started by attaching the land and based on presence of property in the state, land is the question of the statute of that land (b) In personam – personal jursdiction, started by noticing persons personally. (c) Quasi in rem jurisdiction – it not about real property, the suit references the land as a hook for the state to have jurisdiction – this case is not about land, it is about Neff. Is started by attaching the land and based on presence of property in the state. (i) value of the remedy of the complaint is limited to the value of that land (d) Special appearance – you appear just to argue there is no personal jurisdiction; arguing in front of that court in this hearing, does not concede the court‟s jurisdiction. (7) Why is presence important according to Pennoyer? (a) State sovereignty – really the lynchpin argument. It offends Washington state to try its citizen in Oregon. (b) Convenience – fairness to the Δ. (c) Bias – benefit of home court advantage. (d) Presence is equivalent to notice – that way you know that you have notice. ii) Presence for corporations – (1) State where the corporations is incorporated OR (2) State where corporation does its principle place of business. iii) Harris v. Balk – presence via property. (1) A state could acquire jurisdiction over persons whenever their debtors were present in that state by attaching the debts. The result was to make creditors liable (to the extent of the amounts owed them) in any state in which their debtors set foot. (2) This is an example from shift in Pennoyer (sovereignty) towards a more liberty based approach (in Harris) that can be e) Consent – i) Carnival Cruise v. Shute – consent through forum selection clause (1) Facts – Shutes purchase a ticket for Carnival cruise. They purchase ticket in Washington state, where they are from. When they receive the ticket, paragraph 8 is a forum selection clause that specifies courts in Florida (no other state or country). Mrs. Shute is injured at sea and brings a suit. Carnival argues the case should be dismissed because of the forum selection clause. (a) District Court grants motion, Appellate Court reversed. US Supreme Court (where the case is now) reverses again, ruling the forum selection clause can be enforced. (2) It is legitimate to have a forum selection clause. You can consent to give a court jurisdiction that it otherwise would not have. ii) Hess v. Pawloski – implied consent (1) Facts – Hess is driving in MASS and hits Pawloski on a public highway. Pawloski sues in MASS. (2) Issue - Pennoyer would not allow the case because Hess is not present in MASS. Are there sufficient grounds to grant MASS jurisdiction? (3) Rule – implied consent (a) Can serve process to state registrar if it is for an accident on a public highway in that state. Operating a vehicle is like an implied consent of jurisdiction. (this 36 Civil Procedure – Garrett 8/12/2008 case is limited to accidents and collisions on a public highway). This is based on consent but also on presence – even if you leave the state, you still have presence (through your agent), in the state. (i) The out-of-state traveler canNOT reject the state official as his agent for service. f) Domicile – i) Definition – where you have a definite intent to remain, where the person has their “true, fixed, and permanent home.” Domicile is more fixed than residence. ii) Milliken v. Meyer – domicile is sufficient (1) Facts – Meyer is domiciled in Wyoming (WY), but at the time of service he was not there. There was a service of process via publication. The service was also left at his abode in WY. He was also served personally, but not in WY. (a) Meyer made a collateral attack against the WY case. The CO Supreme Court ruled the WY case was void for want of jurisdiction, the U.S. Supreme Court overturned and upheld the original WY court case. (2) Issue – Was there jurisdiction WY of this case? (3) Rule – domicile in the state is alone sufficient to bring an absent defendant within the reach of the state‟s jurisdiction for purposes of a personal judgment so long as the process was served properly. (a) can be extra territorial process for a case in jurisdiction where the defendant is domiciled. (4) Policy justification – the state which accords him privileges and affords protection to him and his property by virtue of his domicile may also exact reciprocal duties. g) Functional approach – i) For jurisdiction – you look at the defendant. The exception is that in class action suits, you must also look at the representative plaintiff. ii) International Shoe Co. v. Washington – minimal contacts test (see chart) (1) Facts – There is unemployment compensation that has not been paid to former employees in Washington. international Shoe was not a corporation in Washington and was not doing business within the state; did not have an agent set up within the state upon whom to serve process; and International Shoe was not an employer and did not furnish employment within the meaning of the statute. (2) Issue – Is International Shoe sufficiently present in Washington for it to be a Δ in a suit in Washington state? (3) Rule – Presence is no longer necessary. “Due process requires only that in order to subject a defendant 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”. (a) “The test is not simply mechanical or quantitative… Whether due process is satisfied must depend upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure. (b) Some tests to establish “sufficient contact”: (i) systematic and continuous business through the specified period; (ii) large volume of interstate business; OR (iii) received the benefits and protection of the laws of the state (4) This is a huge change from Pennoyer (a) Not based on sovereignty anymore (b) Moves from a rule to a standard that is much more flexibile (but much less predictable) (c) Pennoyer asks “Is the Δ here?” vs. International Shoe asks “Is it fair to force the Δ to be on trial here?” (5) General jurisdiction – existence in that area is continuous, so often, that there is jurisdiction there (dispute blind). (a) Notion of reciprocity - you should be hauled up to answer because you have such connection. 37 Civil Procedure – Garrett 8/12/2008 (6) Specific jurisdiction – there is not enough contact for general jurisdiction, but there is enough of a contact in combination with the closer relation between the specific activity in the state and the specific claim (dispute specific). (7) Some examples (see chart) (a) Continuous activity related to the suit – definitely jurisdiction (b) Occasional activity but related to the suit – specific jurisdiction; there is jurisdiction the closer the specific activity is to the suit. (c) Continuous activity unrelated to the suit – similar to general jurisdiction; this is like domicile or state of incorporation or state of primary business. (d) Occasional activity unrelated to the suit – no jurisdiction. iii) McGee v. International Life Insurance Co. – McGee factors; high water mark for the personal jurisdiction cases (jurisdiction on the smallest number of contacts). (1) Facts – CA beneficiary of a CA policyholder, suing a Texas insurance company in CA court for breach of contract for failure to pay the claim. (2) Issue - Is it fair to haul this Δ back into the state; does the state of CA have jurisdiction over this Δ? (3) Rule – function factors/McGee factors: (a) What is the plaintiff‟s interest in being in this court? If π‟s have to track these people down and sue them in palces that are totally inconvenient, for the π, there will be less suits. (b) What is the Forum State‟s interest? Is it a state law issue? Is it an important state law issue? (c) Efficiency interest? Where is all of the evidence? Where does it make sense for the trial to be for efficient reasons? (d) Δ‟s convenience? Is the Δ‟s convenience so much that it is unfair to the π? (4) You look at the McGee factors after it has passed International Shoe. (see Asahi) (5) Jurisdiction is a two-step process (a) statute – some authorization for this court o hear this case against the Δ? These are “long arm” statutes. (i) Examples of “long arm” statutes – (see packet) 1. Rhode Island – the statute models the constitution, so R.I. can exercise jurisdiction whenever constitutionally permissible. 2. Illinois – Just takes certain parts of what is constitutionally permissible. (b) Constitutional – after you have found what the process is based on in statute, you must ask if the process (via the statute) is constitutional. iv) Hanson v. Denckla – purposeful availment (moves back from high water mark of McGee) (1) Facts – Family fight over the assets of Mrs. Donner, a deceased mother who had established a trust in DE and some years later moved to FL, where she died. The contest was whether FL or DE courts had jurisdiction over the trust assets. The Supreme Court said FL had NO jurisdiction because it was a DE contract. (2) Rule – “it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws”. (a) purposeful availment – the question is whether there was a purpose on the part of the Δ to reach out and touch someone in the state where the π filed the case. (b) this is kind of the definition of what minimum contacts means post International Shoe. v) World-Wide Volkswagen Corp. v. Woodson - foreseeability (1) Facts – Products liability suit when a car catches fire during an accident and three people are badly burned and die. The car was purchased from a mom and pop car dealership in New York, but the accident was in Oklahoma. (2) Rule – Foreseeability that Δ‟s conduct and connect with the forum state will subject the corporation to trial in that state. 38 Civil Procedure – Garrett 8/12/2008 (a) Purposeful availment is the threshold test (Did the Δ purposefully avail themselves to the jurisdiction?). After purposeful availment, we look at the McGee factors. (i) It is very difficult for the Δ to beat jurisdiction on the McGee factors. The Δ usually gets out of jurisdiction (when jurisdiction is defeated) on purposeful availment. (3) Application of McGee test to World-Wide Volkswagen (a) π interest – The π‟s are moving to Arizona, so a trial in OK is not that convenient for either. (b) Forum state‟s interest – highway safety, product liability in OK. There is a decent interest, but not great since this was a one time incident. (c) Efficiency interest – if it is about the accident, then OK is efficient. If it is about product liability, OK is not efficient. (d) Δ‟s convenience – if it is a massive corporation that is helpful for the π b/c it is convenient for the Δ wherever. If it is a mom and pop shop, it is NOT convenient for the Δ. (4) Why is purposeful availment so important? (a) Reciprocity – The Δ gets all of the benefits of the state, thus the Δ should be subject to its jurisdiction (b) Foreseeability – have your actions foreseeably opened yourself up to jurisdiction a particular place? (5) World-Wide Volkswagen deals with the entity at the end of the chain (the dealer). Asahi deals with the beginning of the chain. vi) Asahi Metal Industry Co. v. Superior Court – (1) Facts – Zurcher is injured in an accident in a motorcycle accident. Zurcher files suit against Cheng Shin (Taiwanese manufacturer or the faulty tube). Cheng Shin files a cross-complaint against seeking indemnification from Asahi Metal Industry. The court concludes there was insufficient contact for Asahi to be within the personal jurisdiction of the court. (2) Issue – how does “stream of commerce” relate to “purposeful availment.” (3) Rule – there was no majority on the rule – even though there was a majority on the decision; All of the opinions are dictum, none of them are binding. It passed the minimum contacts/purposeful availment test but it did NOT meet the McGee factors. (a) O‟Connor – 4 votes, no majority (i) it is NOT enough just to know the product will go into the stream of commerce and may end up in some place. (ii) Hints at a “knowledge (the good is entering the stream of commerce) + (intent to get product into that state or target to that state or use the state’s production specifications) = purposeful availment” 1. “The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State.” 2. Most stringent standard. (b) Brennan – 4 votes (including White who wrote the WW Volkswagen decision), no majority. (i) Just knowledge that you are putting the product into the stream of commerce is sufficient. (ii) His decision casts doubt on International Shoe. (iii) White seems to think it is easier for the dealer to avoid selling in a particular place whereas when it is the producer (upstream person), there is less control where the product will end up. (c) Stevens – 1, only writing for himself. Steven‟s is the closest to actual law. (i) sense of quantity + value (price) of the goods + hazard components – Look at whether the Δ is doing “significant amount of business” in the state (if so, then there is purposeful availment). 39 Civil Procedure – Garrett 8/12/2008 1. There is no brightline; it is a standard that needs to be decided on a case-bycase basis. 2. If there is a significant price, you are probably aware of where it is going and track it a little more closely, than say rice. (4) Application to the case– this is the one in a million case that can be decided on the McGee factors. (a) McGee factors prove there is no jurisdiction. (5) How to apply this case – as a π should try to argue that you meet the most stringent standard (O‟Connor) but Steven‟s is probably the closest you get to actual law. (6) Threshold inquiry of personal availment (a) First, look at is personal availment. (b) Second, you do the McGee factors. vii) Burger King Corp. v. Rudzewicz – example of the functional rule (1) Facts – Rudzewicz and partner begin a burger king restaurant in MI. Burger King eventually terminated its franchise and sued in FL court (where Burger King headquarters are located). Rudzewicz argued there was no personal jurisdiction in FL. (2) Issue – did Rudzewicz and partner personally avail themselves of FL (through contract with Burger King, training in FL, etc.) (3) Rule – (a) “the foreseeability that is critical to due process analysis… is that the defendant‟s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” (i) “reasonably anticipate” as per Denckla means “defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.:” (b) Once, “purposeful availment” has been demonstrated, must show that these contacts comport with fair play and substantial justice. (4) Application – the Δ‟s reached out to FL to contact the franchise, so it meets both purposeful availment and the McGee factors. This case is really an application (5) Policy – Brennan thinks the little guy (usually the π) should have the benefit of the doubt and tries to make the standard as easy as possible to meet. In this case, ironically, the big guy is the π, so Brennan has to rule against Rudzewicz to help the little guy in the long run. (6) How does the internet change everything? International Shoe was created to replace outmoded personal jurisdiction rules. Is International Shoe now outmoded? h) Transitory Jurisdiction i) Burnham v. Superior Court – transitory jurisdiction; the return of Pennoyer. (see attached charts) (1) Facts – Burnham‟s get married in New Jersey and eventually decide to get divorced. Before the divorce, Mrs. Burnham moves with the children to CA. Burnham goes to SoCal for a business trip and up to Northern Cal to see his children. While in NoCAL he is served with divorce papers (including alimony, child support, etc). (2) Issue – does CA have personal jurisdiction over Burnham. (3) Rule – Pennoyer is still good law; CAL has transitory jurisdiction over Burnham. (a) Being in the state at the time of service (Pennoyer) is still sufficient for personal jurisdiction when you voluntarily enter the state. (4) Policy – Makes the minimum contact test a farce. All one has to do is go to the state and get served there and then “minimum contact” standard is irrelevant. (a) Brennan says if you go to the state you are benefiting from that state and thus are subject to its jurisdiction. (b) Scalia says the rule has been around and thus it is adequate. Its constitutional validation is its pedigree. (c) White says the Pennoyer rule in addition to International Shoe standard creates some brightline situations where there is definitely jurisdiction. 40 Civil Procedure – Garrett 8/12/2008 i) Personal Jurisdiction in the Federal Court system – i) 2 prong test for jurisdiction (1) Constitution (2) Statute (a) Rule 4(k) serves as the statute (b) Rule 4(k)(1) service of summons or filing a waiver of service is effective to establish jurisdiction over the person of a defendant… (i) 4(k)(1)(d) – when authorized by statute of the United States 1. Sometimes allows broader jurisdiction (e.g. a statute provides broader authority in securities exchange cases. (ii) 4(k)(1)(c) – who is subject to the federal interpleader jurisdiction (28 USC §1335). Is a mechanism for hearing where multiple relevant parties are brought in at one time. For example if a painting has four different people who have claims to it, the easiest way to resolve the dispute is to bring everybody that has a claim of the property into one hearing and figure it out. (iii) 4(k)(1)(b) – who is a party joined under Rule 14 or Rule 19 and is served at a place within a judicial district of the United States and not more than 100 miles from the place from which the summons was issued 1. B is liable to A, but C will pay. What if C doesn‟t have contact in state where A is suing B. In that case, you can sue in federal court as long as the person is within 100 miles. This was mostly established for the Northeast of the United States. (iv) 4(k)(1)(a) – who could be subjected to the jurisdiction of a court of general jurisdiction in the state in which the district court is located 1. If there is personal jurisdiction in that state, the Federal court has personal jurisdiction as well. (c) 4(k)(2) – Personal jurisdiction over person who is not subject to jurisdiction of any state. If consistent with the Constitution and the laws of the US, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state. (i) There may be some defendants that are foreigners that have sufficient contact with the US but not sufficient contact in a particular state. Rule 4(k)(2) provides the federal courts the ability to establish personal jurisdiction over them. ii) Notice is another requirement under the due process clause. The court must have jurisdiction over the person and also must give that person notice that the court has control over them. (1) Mullane – This case was cited in Lindsey v. Greene; it establishes the standard for notice. (a) Facts – 118 trusts were pooled into one common fund and invested into a diversified portfolio by the bank. The benefits accrued go to the customer‟s trusts. Every so often, the bank has to go into court and prove that it is acting reasonably. (b) Issue – What is the proper method for notice of all 118 people? The court usually appoints representatives that have current and contingent (heirs to the people that have interest) interest. What is the proper procedure for notifying the beneficiaries? (i) The bank can serve all of the contingents, but it does not know all of them. Should the bank use “due diligence” to investigate to find all the contingents? Should the bank notice through publication, is that sufficient? (c) Rule – notice reasonably calculated under all circumstances to give the necessary information to the relevant people. (i) The test is not certainty, not 100% of the people must be notified. Instead this is a standard that provides flexibility to keep the costs down but requires substantial action on the part of the bank. (d) Ways to give notice? (i) In Mullane, no “due diligence” requirement, but in most cases you need to do that 41 Civil Procedure – Garrett 8/12/2008 (ii) Personal service is not required to give notice – mailing them something works in most places (iii) Notification by publication is not sufficient – it is invariably insufficient for notice. (iv) Attachment? Some statutes requirement attachment when land is being litigated over. However, under Mullane, that might not be sufficient (e.g. if it isn‟t reasonably calculated under all circumstances…). (e) Importance of Mullane – “The right to be heard has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to appear or default, acquiesce or contest.” That is the tie to the due process clause and the Constitution for notice. VIII. Subject Matter Jurisdiction a) Diversity Jurisdiction i) Article III, §2 of U.S. Constitution – enumerates judicial power (1) The federal courts have jurisdiction over disputes arising over citizens from different states or a dispute from a citizen from one state and a foreign citizen. ii) How to determine which state a person is a citizen of in determining diversity jurisdiction? (1) Domicile. Every individual has only one place of jurisdiction for diversity. (a) notice the standard for domicile is different for diversity jurisdiction vs. personal jurisdiction (2) Can an alien have jurisdiction? Answer: yes if he is a permanent legal resident alien. (a) §1332 – “for the purposes of this section, an alien admitted to the US for permanent residence shall be deemed a citizen of the State in which such alien is domiciled.” (3) Corporations. For diversity jurisdiction, corporations are located where they are incorporated (usually Delaware) AND whichever state is its primary place of business. (a) some circuits have different tests to determine primary place of business (i) Nerve Center Test – where are the office, where are the executive, where are the decisions being made (ii) Major Assets Test – where are you selling your product, where are your offices, where are your major assets (iii) Total Activity Test – look at all aspects of business and see which state overall has the most activity (4) Insurance companies are located for diversity jurisdiction in the place of incorporation, place of primary business, and place where the insured is a citizen. (5) Citizenship of partnerships (not a corporation) for diversity jurisdiction are located in every state where a partner is a citizen. (6) Unincorporated labor unions for diversity jurisdiction are located in every state where a member is a citizen. (7) Legal representative of decedent‟s estate for diversity jurisdiction is a citizen of the same State as the decedent (8) Legal representative of an infant or incompetent for diversity is a citizen only of the same state as the infant or incompetent. iii) USC §1332 – Diversity of Citizenship (1) District courts shall have original jurisdiction over all civil actions where the matter in controversy exceeds $75,000 (not including costs and interest) and is between (a) citizens of different states (b) citizen of a State and citizens or subjects of a foreign state (c) a foreign state as plaintiff and citizen of a state or of different states (2) Unless when express provision of law, where the π is adjudged to recover less than $75,000 (computed without regard to any setoff or counterclaim to which defendant may be adjudged and exclusive of interest or costs), the court may deny costs to the plaintiff and may impose costs on the plaintiff. (3) Notes on §1332 (a) statute has been amended frequently to restrict jurisdiction 42 Civil Procedure – Garrett 8/12/2008 (b) statute is more limited than the Constitution (i) Article III doesn‟t have an amount in controversy requirement (ii) Requires complete diversity. 1. so, if a corporation is a citizen of DE and OK, a plaintiff from OK does NOT have diversity jurisdiction 2. this is opposed to minimal diversity (which would allow a π suing a Δ who interpleads another Δ to do so in diversity if one Δ was of a different state and one Δ was from the same state at the π). a. The federal interpleader statute has been interpreted to only require minimal diversity. iv) What is the reason for diversity jurisdiction? (1) Idea of bias – allowing cases to go to federal court avoids the potential bias in state court. v) Diversity jurisdiction is a forum specific inquiry, must first make sure the court has personal jurisdiction over the Δ. vi) Why would a π choose to go to Federal Court? (1) Perception that federal courts are superior (2) Procedural rules – International Shoe makes it easier to get cases for non-residents in the court of the state of the π. vii) Complete diversity (1) Mas v. Perry – complete diversity required for diversity jurisdiction (a) Facts – Jean Paul Mas (citizen of France) and Mas (citizen of MISS) sued their landlord in federal court for putting two-way mirrors in the bedroom and bathroom and spying on them in their apartment. Though they were living in Louisiana and had just moved from ILL, they were not sure where they were going to move after they finished their Ph.D work at LSU. (b) Issue – is there diversity jurisdiction in this case given that Mr. Mas is a French citizen and the couple lives in Louisiana, which is where the defendant is from? (c) Rule – complete diversity of parties is required for diversity jurisdiction, meaning no party on one side may be a citizen of the same State as any party on the other side. (i) Federal law controls the determination of one‟s State citizenship for diversity purposes, not state law. 1. For diversity purposes, citizenship in a state means domicile, mere residence in the State is not sufficient. a. Domicile is the place of “true, fixed, permanent home and principal establish, and to which he has the intention of returning whenever he is absent therefrom”. (ii) Diverse citizenship is based on citizenship at the time the complaint is filed and is unaffected by subsequent changes in the citizenship of the parties. (iii) The burden of pleading and proving the diversity of citizenship is on the party invoking federal jurisdiction. (d) Application – b/c Mrs. Mas had not found a new domicile, she had not changed her domicile from MISS and thus had diversity of jurisdiction for this lawsuit. viii) What about cases in which one alien is suing another alien in federal court through diversity jurisdiction? (1) Saadeh v. Farouki – two aliens are not diverse (a) Facts – Farouki borrowed funds from Saadeh and defaulted on the loan. By the time the suit was filed, Farouki, a Jordanian citizen, was a permanent resident residing I Maryland. Saadeh, a Greek citizen, brought suit on the several written contracts allegedly breached, invoking diversity jurisdiction. (b) Issue – was there diversity of jurisdiction given that neither π nor Δ were citizens of the United States. (c) Rule - 43 Civil Procedure – Garrett 8/12/2008 (i) Diversity jurisdiction does not exist when an alien is suing another alien in federal court (even if each alien resides in a different state and even if they are permanent residents). (ii) Citizenship at the time the suit is filed is the relevant test, so that Farouki subsequently became a US citizen did NOT create diversity. (iii) §1332 bars diversity jurisdiction between a citizen and a permanent resident living in the same state. (d) This is a case where the literal interpretation of the statute is at odds with the evidence of Congressional intent and a contrary construction is necessary to avoid formidable constitutional difficulties. (e) There is no diversity between a citizen of a state and an alien also a citizen of that same state. ix) Amount in Controversy Requirement ($75,000) (1) St. Paul Mercury Indemnity Co. v. Red Cab Co. – (a) Rule – It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal. Inability to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust his jurisdiction. Based on the pleadings, if it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed of it the court is satisfied the plaintiff was never entitled to recover that amount and the claim was colorable for the purpose of conferring jurisdiction, the suit will be dismissed. (i) The pleadings are all but controlling, rather than engaging in judicial guessing about the likelihood that the plaintiff would succeed in collecting as much as he had prayed for. (2) What if plaintiff asks for an injunction? There are 4 approaches (a) Determine the value of the injunction to the plaintiff (b) determine the cost of compliance to the defendant (c) determine the cost or value to the party invoking federal jurisdiction (π bringing suit or Δ removing the case) (d) allow jurisdiction if any of the tests above yields a figure of the statutory amount. (3) Can the plaintiff aggregate claims to meet the amount and controversy requirement? (a) All claims from a single π against a single Δ can be aggregated; (b) All claims from a single π against multiple Δ‟s can be aggregated IF Δ‟s are jointly liable; (c) If several plaintiffs each have claims against a single defendant, if the plaintiff‟s have common, undivided interests in claims, they may aggregate their claims (d) if several plaintiffs each have claims against a single defendant for the same nucleus of operative facts, the π‟s CANNOT aggregate. (e) For class action, the representative must have a claim that meets the statutory requirement (depending on the jurisdiction – there is a circuit split). (i) Zahn v. International Paper Co., said that all members of the suit had to meet the requirement, but that was overturned by §1367. (ii) §1367 does not refer to Rule 23, so class actions do NOT need to meet the amount of controversy requirement. (f) §1367 does not deal with a person trying to join as a π (Rule 20), which is the second clause of the 1367(b), so do NOT need to meet the amount in controversy requirement. (i) When Rule 20 is mentioned in §1367(b), it is saying that a π cannot join a Δ from the same state, but does not deal with adding new π‟s to the suit. π‟s are only precluded under by under Rule 19 and Rule 24 under §1367. b) Federal Question Jurisdiction i) 28 USC §1331 – “district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” (1) The difficulty comes in the phrase “arising under” 44 Civil Procedure – Garrett 8/12/2008 (2) §1331 has not amount in controversy requirement (3) complaint has to have the rule in it, not an anticipated defense (see Motley, below) ii) Holmes test – “suit which arises under the law that creates the cause of action.” Look at the facts and look at the law to see which law will be the rule of decision. (1) In 99% of cases, you can use the Holmes test. (2) Some outlying cases that have either been overruled or brought into serious question and are not used. (a) Shoshone Mining – 1900 - all of the disputes are a matter of substantive state law and that is what the whole case will be about, even though there is a federal law and the case is brought under that law. The Supreme Court said nothing about the federal law was relevant in this case and thus there was no need for a federal forum. (b) Merill Dowe and Smith. iii) Louisville & Nashville Railroad v. Mottley – well pleaded complaint rule. (1) Facts – Mottley‟s received lifetime free trips on the train after injury in a train crash. The Federal Government years later prohibited lifetime free trips for anti-corruption issues not related to cases like the Mottley‟s. The Mottley‟s bring a a breach of contract case. Part of the pleading includes an argument that the government‟s action violates the 5 th amendment taking of property without due process. (2) Issue – is this actually a federal issue? (3) Rule – a suit “arises under” the Constitution, laws, or treaties of the United States only when the plaintiff‟s statement of his own cause of action shows that it is based upon those laws or that Constitution. (a) Well pleaded complaint rule - It is NOT enough that to allege some anticipated defense to a cause of action and assert that defense is invalidated by some provision of the Constitution. (4) Application / Holding – the court says the arguments about the Constitution are not part of a “well-pleaded” complaint and instead are a response to a potential defendant‟s argument. The RR‟s action was not unconstitutional, but when the RR said it had to invalidate the tickets b/c of the law of the US, the π‟s response would be that the law was unconstitutional. (5) Policy – Need to determine jurisdiction early. Even though in this case the jurisdictional argument was in the pleading, the rule is established in this case to prevent answers and arguments and discussion that postpone determining the jurisdiction of the case until later in the process. iv) Fink and Tushnet questions in an attempt to create a test for Federal Question Jurisdiction (1) What is the national interest in disposing of the case as a whole? (2) How likely is it that the national interest will in fact be implicated? (3) How likely is it that the Supreme Court will use its limited resources to decide the federal issue where the record is made in the state court? v) Bottom line on Federal Question Jurisdiction (1) Narrower than Constitution - Article III, §2 of the Constitution is broader than §1331 (for example, §1331 has the well-pleaded complaint requirement). The Supreme Court has the authority to hear this case because §1257 gives the Supreme Court more authority than the lower courts are allowed. (a) Congress could change the result in Mottley by amending §1331 to allow original jurisdiction over cases in which an essential element either of a claim or defense rests on federal law. (2) Use the well-pleaded complaint rule and the Holmes test (inherent within the Motley test). c) Supplemental Jurisdiction – to have one case and preserve the federal forum for split claims i) Origin – was entirely a matter of case law (now there is a statute). Scalia forced Congress to enact a statute because he called the court out on not having a statute to create an area of jurisdiction without Congressional authorization. ii) What is supplemental jurisdiction 45 Civil Procedure – Garrett 8/12/2008 (1) Always begin by asking, is there an independent way to get this claim into federal court? If there is, only then should you claim that there is supplemental jurisdiction. (a) Example – 2 claims (a Title VII claim and a state law claim for employment discrimination). Without supplemental jurisdiction, the state law claim would be thrown out by the federal court and have to be brought in state court. Supplemental jurisdiction allows both cases to be brought in federal court. (2) The real reason for supplemental jurisdiction is not so you don‟t have two trials (one in state and one in federal court b/c you could conceivably have both trials in state court (unless the federal government has exclusive jurisdiction over one of the claims)), the real reason is so you can have both claims adjudicated in federal court b/c of the (alleged) benefits of federal court. iii) What is the test for supplemental jurisdiction? (1) Constitutional test (a) Gibbs – common nucleus of operative facts (definition of constitutional case and controversy). (i) Facts – Gibbs was hired to run a mine and to haul coal during a dispute between the United Mine Workers and the Southern Labor Union over representation of miners. Union members forcibly prevented the opening of the mine threatening Gibbs and beating an organizer of a different union. The mine never opened and Gibbs lost his job. Soon after, he began losing other trucking contracts and mine leases he held in nearby areas. Gibbs alleges this is the result of a concerted union plan against him. (ii) Issue – Gibbs sued under federal Labor Management Relations Act and a state law claim of conspiracy. Is there supplemental jurisdiction? (iii) Rule – 1. The federal claim must have substance sufficient to confer subject matter jurisdiction on the court; 2. The state and federal claims must derive from a common nucleus of operative fact; AND 3. A plaintiff‟s claims are such that he would ordinarily be expected to try them all in one judicial proceeding (assuming substantiality of the federal issues, there is power in federal courts to hear the whole case). 4. Some specific examples noted in Gibbs: a. If the federal claims are dismissed before trial, even though no insubstantial in a jurisdictional sense, the claims should dismissed as well. b. If it appears the state issues are substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals. c. There may be reasons independent of jurisdictional considerations (like jury confusion) that justify treating divergent legal theories of relief separately. 5. There may be times when the state and federal claims are so closely tied to questions of federal policy that the argument for exercise of supplemental jurisdiction is particularly strong. (iv) Holding – even though the federal claim failed, the court could NOT say that the federal issues were so remote as to dismiss the state claim. Though the state claim could have been dismissed, the trial court did not do so, and there was no error in that decision. (v) The federal court must hear the federal claim, but has discretion to hear the state claim. 1. Why might the federal court decide not to hear the state claim? a. Maybe the federal law claim is real simple but the state claim is difficult or complicated 46 Civil Procedure – Garrett 8/12/2008 b. Maybe the state law is note well developed in this area and the decision would require making state law and court is hesitant to do so c. It depends on how involved/overlapping the claims are d. Has the federal claim been dismissed? If so, motion to dismiss or summary judgment? i. If the case is dismissed for lack of federal subject matter jurisdiction, the court CANNOT hear the state law claim b/c it must piggyback on a federal claim which it would not be able to do. (2) Owen Equipment & Erection Co. v. Kroger – pendent party jurisdiction (π brings additional party), Rule 14 interpleader (a) Facts – Kroger (Iowa) suing OPPD (Neb) in federal court on diversity. Owen would be the other Δ, but he is from Iowa and if Kroger sued Owen in this suit it would undermine diversity. (b) If OPPD brings in Owen and Kroger is allowed to sue Owen in federal court, that destroys diversity and encourages a Kroger to cut a deal with OPPD to bring in Owen so Kroger can sue in federal court. (c) Rule – the statute and its predecessors have consistently been held to require complete diversity of citizenship. Diversity jurisdiction does NOT exist unless each defendant is a citizen of a different State from each plaintiff. §1367(b) (d) Application - Court says NO jurisdiction for Kroger‟s claims against Owen because those claims could NOT have been brought in the first instance. Kroger v. Owe could not have gotten into federal court, so after OPPD impleaded Owen, Kroger is barred from brining those claims against Owen in this case. (i) This is a statutory argument (not a constitutional argument – because Constitutional standard is minimal diversity). (e) Why does the court let OPPD bring Owen into the case in the first place? Answer: because if it doesn‟t, there could be inconsistent decisions that disadvantage one of the parties. (i) Court is also more lenient with ancillary jurisdiction (when a Δ brings some else in). Court is usually much more sympathetic for ancillary jurisdiction. (3) Finley v. United States – pendent party jurisdiction (a) Facts – Airline passengers died when a plane struck a power line while landing. Passenger‟s representatives sued the US, alleging the FAA had been negligent, such claims arise under the Federal Tort Claims Act. Plaintiffs also wished to sue the power company, alleging that it had negligently located the lines. There was no independent basis for federal jurisdiction over the power company, but claims against both parties would have involved many overlapping factual questions. (b) Issue – can the power company be joined? Answer: NO. (c) Rule - as opposed to addition of claim, in additions of parties, statutes will NOT be read broadly. (i) Even though Gibbs says “same nucleus of operative facts”, Scalia says there is a difference between pendent claim and pendent party, and no supplemental jurisdiction under pendent party. (d) Under §1367 – Finley would come out differently. (4) Statutory test (a) §1367(a) – In any civil action of which 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 US Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties. (i) This statutory test is the same test as the constitutional test (with 2 exceptions or as otherwise expressly provided by federal statute). 1. §1367(c) - district court can decide (reviewed under abuse of discretion) to not use supplemental jurisdiction and dismiss the state claim, if... 47 Civil Procedure – Garrett 8/12/2008 a. the claim raises novel or complex issues of State law b. the claim substantially predominates over the claim or claims over which the district court has original jurisdiction c. the district court has dismissed all claims over which it has original jurisdiction, OR d. in exceptional circumstances, there are other compelling reasons for declining jurisdiction 2. §1367(b) – exception in diversity cases a. When the court has diversity jurisdiction, the district court shall NOT have supplemental jurisdiction over claims by plaintiffs against persons made parties under Rule 14,19,20, or 24. b. When the court has diversity jurisdiction, the district court shall NOT have supplemental jurisdiction over claims by persons proposed to be joined as plaintiffs under Rule 19 or seeking to intervene as plaintiffs under Rule 24 (when exercising supplemental jurisdiction would be inconsistent with diversity requirements in §1332). (ii) §1367(d) - Statute of limitations tolling - What if the case was dismissed by the federal court, but the statute of limitations had run while the case was pending in federal court? Answer: the state statute of limitations will toll and you will have 30 days to file after the case is dismissed in federal court (under §1367(d)) unless the state law provides for a longer tolling period. (iii) §1367 is an attempt to codify Gibbs and Kroger into law and at the same time reverse Finley and Aldinger. 1. Kroger‟s claim against Owen would be kicked out under §1367(b), but OPPD‟s impleading of Owen would still be allowed. 2. §1367(a) proves that Finley would go the other way. Finley would be different b/c §1367(b) deals with diversity jurisdiction and Finley was a federal question + supplemental jurisdiction question. d) Removal Jurisdiction – i) §1441(a) – “Except as otherwise expressly provided by an Act of Congress, any civil action brought in state court of which the district courts of the United States have original jurisdiction may be removed by the defendant or defendants to the district court of the Untied States for the district and division embracing the place where such act is pending.” (1) Exception - §1441(b) – cannot remove if the Δ is a citizen of the state in which the action is brought. (this only deals with diversity) (a) This exception does NOT apply to federal question - §1441(b) – any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or law of the US shall be removable without regard to the citizenship or residence of the parties. ii) What if there are multiple separate claims that are joined and only one being removable? (1) §1441(c) – Whenever a separate and independent claim or cause of action within federal jurisdiction (via federal question) is joined with one or more otherwise non-removable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, OR, in its discretion, may remand all matters in which State law predominates. (a) The entire case has to be removed, but the federal court can then just take parts of it that it wants to hear. (b) Even though §1441(c) says the rest may be remanded, if the federal court does not have subject matter jurisdiction, the case must be remanded. iii) Δ can only seek removal on the basis of the π‟s claim against him, NOT on the Δ‟s counterclaim. iv) Other portions of §1441 relating to removal for cases with multiparty suits (see if test asks questions about it – pg. 329). v) π can defeat removal by 48 Civil Procedure – Garrett 8/12/2008 (1) not meeting amount in controversy, (2) only bringing state law claim, (3) bringing an unrelated state claim (b/c if the Δ removes the unrelated state claim would come back via §1441(c) and Δ‟s generally like to have cases together). IX. Venue, Transfer of Venue, and Forum Non Conveniens a) Venue is transfer from one court to another (federal court to a different federal court) (eg. you brought the case in OK, but really should have brought the case in TX). i) after a π‟s attorney determines personal jurisdiction and subject-matter jurisdiction, the attorney must find what the venue statute says about where to file the case. b) §1391 - venue i) §1391(a) – venue rules for diversity cases ii) §1391(b) – venue rules for federal question cases iii) §1391(a) and §1391(b) both have the same options to prove venue (1) where the defendant lives – “a judicial district where any defendant resides, if all defendants reside in the same State,” (2) where a substantial part of the act (or omission) occurred - “a judicial district in which a 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,” OR (3) fall back option – where Δ is subject to personal jurisdiction at the time the action was commenced - “a judicial district in which any defendant 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.” c) Rule 12(b)(3) – improper venue i) Rule 12(g) - have to object to venue immediately (either in pre-answer motion, if filed, or in answer motion) or else it is waived. ii) §1406 – Improper Venue motion to dismiss – The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought (assuming there is a 12(b)(3) objection). d) If a case is removed, it is removed to the federal jurisdiction where the state court is located. e) Change of venue (§1404) i) (a) For convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought (1) codifies an old common law doctrine (forum non conveniens) – the court has jurisdiction but it makes no sense to have this case here, it really should be some place else. (2) some factors the courts have considered: (a) relative ease of access to sources of proof (b) availability of compulsory process for attendance of unwilling the cost of obtaining attendance of willing, witnesses; (c) possibility of view of premises, if view would be appropriate to the action; and (d) all other practical problems that make trial of a case easy, expeditious, and inexpensive ii) (b) Upon motion, consent, or stipulation of all parties, any action… or any motion of hearing thereof, may be transferred in the discretion of the court… to any division in the same district. (1) In Rem proceedings brought on behalf of the US may be transferred under this section without consent of the US where all other parties request transfer iii) (c) A district court may order any civil action to be tried at any place within the division in which it is pending. f) Venue wrap up i) Venue is entirely statutory (§1404 is a standard, not a rule (interest of justice) ii) Venue is a requirement – must have personal jurisdiction, subject matter jurisdiction, and venue (1) venue can be waived, as opposed to subject matter jurisdiction g) Move to another country 49 Civil Procedure – Garrett 8/12/2008 i) Forum non conviens is the doctrine that would justify such action ii) The same factors for transfer of venue are used; it is still up to the court‟s discretion (1) The case cannot actually be “transferred” to another country. The case is just dismissed and has to be filed in the other country. (2) What if the other country‟s statute of limitations has run? What if the procedural rights are not the same? What if discovery is better here than there? (a) The case can be conditionally dismissed if the Δ agrees to waive statute of limitations defense or whatever defense might e the issue (b) If the discovery rule is a problem, the case can be dismissed and allow the case to be filed in the other country IF the Δ provides whatever would be discovered under US discovery rules (the punishment for failure to do so is the case can be re-filed in the US). (c) If the problem is procedural rights guarantees, the US will just not dismiss the case in the first place (will only dismiss if there is an adequate alternative venue, which lack of due process rights would not qualify as). X. The Erie Problem – (see flow chart) a) Introduction i) 2 components (1) Horizontal – you have a case in some courts and you have to decide which law applies (e.g. which state law applies) (a) Erie is a horizontal law question – should it be MA or PE law. (2) Vertical – deals with the disjunction of state and federal courts in the same state (If all the events happen in OK, but the federal government has diversity jurisdiction, which law (state/fed‟l) applies?) ii) Erie cases only apply when the court sits in diversity jurisdiction. iii) If state and federal laws are concurrent, everyone applies federal law. b) Old Standard i) Swift v. Tyson – Justice Story applies federal law, rather than state law b/c New York law didn‟t make sense (said that release of a preexisting law was not consideration). The holding was that the federal government could apply a federal common law generally. (1) How did Story get around the Rules Decision Act (§1652)? Story said the “laws of several states” was statute and did NOT include state created common law. Thus, Story concluded that the common law is not covered by the Rules of Decision Act. (a) Story said the RDA includes: statutes, decisions interpreting the statute (part of statutory interpretation), and long established local customs. Common law, he said, was not part of the “laws of several states.” c) Erie v. Tompkins – i) Facts – Tompkins is walking along the railroad tracks (trespassing). A train passed and an open door on a refrigerator car struck him and knocked him partially under the train. His right arm was severed. (1) Under Penn law, Tompkins was a trespasser and the railroad was liable only for “wanton” negligence. (2) The judge instructed the jury as to the general law for negligence (based on federal law) that a trespasser can get relief as long as there was “ordinary” negligence. ii) Rule – except in federal question cases, the law to be applied in any case is the law of the State. And whether the law of the State shall be declared by its legislature in a statute or by its highest court in a decision is NOT a matter of federal concern. There is no federal general common law. iii) Reason for decision (1) Congressional intent – Brandeis had testimony on §1652 and found that past drafts included “common law” and it was simply shortened by the phrase “laws of the several states” (a) This was not enough, Brandeis thought to overturn Swift b/c it had been the law for 100 years and Congress had acquiesced that whole time. 50 Civil Procedure – Garrett 8/12/2008 (2) Policy consequences (a) Forum shopping – cases like the Taxi Cab case. Swift allowed for tremendous forum shopping b/c if you filed in federal court, you could get different laws. (i) Black & White Taxicab Co. v. Brown & Yellow Taxicab Co. – Brown & Yellow entered an agreement that it would have exclusive privilege for soliciting passengers at Bowling Green railroad station. Knowing that such a contract would be void under Kentucky law, Yellow & Brown reincorporated in TENN and that the contract be executed in TENN. A suit was then brought in federal court (under diversity jurisdiction) to enjoin Black and White from competition at the railroad station. The federal court upheld the injunction under federal law. (b) Did not achieve uniformity in law – despite the attempts to create uniformity (i) Story assumed there was a natural, common law that would be discovered and it was necessary to have the federal courts doing the work so the natural common law could be uncovered. (c) Diversity of citizenship has been used to discriminate against citizens by noncitizens causing inequitable administration of justice (d) Uncertainty which rule would actually apply to the cases. (3) Constitutional arguments (a) Separation of Powers – court‟s have no authority to promulgate rules in this area, this is an area where the court has no right to be making substantive law. It is problematic for the federal courts to use diversity as a vehicle for creating and applying federal law. (i) Congress can delegate authority to courts to create procedural rights; clearly diversity grants courts authority to create procedural rules; but the court is not granted the authority to make substantive rules. (ii) §1652 provides clear intent of Congress to use state law (not for federal courts to substitute federal law) (b) There is a federalism component but it is not relevant in Erie b/c Erie dealt with an issue that would fall under interstate commerce. (c) Also an Equal Protection argument. Problem is that each sovereign was providing equal treatment for its sovereigns, problem is that the disparate treatment was based on comparisons to the federal law (but federal courts were treating everyone the same as well). iv) Disadvantage of Erie (1) expertise – does it make sense to have federal judges using and applying state law? (2) doesn‟t solve forum shopping – allows horizontal (not vertical) forum shopping (3) What law do the federal courts look at in state common law? (a) State Supreme Court law (b) Appellate and trial court decisions (for persuasive precedent) (c) Sometimes the federal court can certify a question for the state Supreme Court, but the State Supreme Court does not have to answer the question. (4) Federal court is not bound by lower state courts and can update the precedent from the State Supreme Court decisions if they are old. This gives the federal court more authority than lower state courts and it allows the federal courts to push state law in directions that the state may not want to go. d) What is a rule of decision? i) Congress in Rules of Decision act – in appropriate cases (diversity and supplemental jurisdiction), the courts should use state law in those cases as the rules of decision. (1) Erie is the quintessential substantive rule (level of care owed) ii) 2 different tests (1) What under the constitution is procedural? What can the federal courts regulate on its own procedurally. That comes from the constitution‟s enumerated powers, necessary and proper clause, and diversity and supplemental jurisdiction./ (2) What is the statutory authorization given to courts by Congress? 51 Civil Procedure – Garrett 8/12/2008 iii) Guaranty Trust Co. v. York – outcome determinative test (1) Facts – π sued a bond trustee in a federal diversity action alleging misrepresentation and breach of trust. new York substantive law governed. Δ invoked NY statute of limitations. (a) Federal rules is that cases that are brought in equity may not have to adhere to statute of limitations (called laches). Equitable courts had more authority to be flexible with issues like that. (b) State law – a bit unclear, but basically case may not be brought under NY law b/c statute of limitations had run. (2) Issue – Which law applies - is the statute of limitations procedural or substantive? (3) Rule – the decision to use one law or the other “should not lead to a substantially different result” so if it does lead to a substantially difference result, use state law. (a) Outcome determinative in a way that violates the twin aims of Erie. Either: (i) (a) forum shopping - leads to forum shopping resulting in a difference outcome, or (ii) (b) inequitable treatment - leads to a difference in treatment between parties. (b) Evaluate this test prospectively – would it (prior to filing the case) encourage forum shopping. (4) Holding – the court concludes in this case, using the federal law and allowing laches would definitely be outcome determinative in a way that violates the twin aims of Erie and requires the use of the state law. (5) Post-York – courts read York very harshly and deferred to state law for every case that was outcome determinative. Until Byrd… iv) Byrd v. Blue Ridge Rural Electric Cooperative – (1) Facts – Plaintiff was injured while on a construction job for defendant and sued in tort. π was employed by an independent contractor, but Δ argued he should be covered under Worker‟s Comp b/c because he was doing the equivalent work as a statutory employee. The question on remand was whether Worker‟s Comp applied. The South Carolina common law says that this is an issue for the court as a matter of law (although the jury decides all other factual issues raised by the cause of action). (2) Issue – whether the federal policy favoring jury decisions of disputed fact questions should yield to the state rule in the interest of furthering the objective that the litigation should not come out one way in the federal court and another way in the state court. The federal courts do not require a jury trial in this instance, but do allow a jury trial. (3) Rule – the court says that when it is a question of form and mode bearing substantially on the outcome of the case, we have to balance competing interests; outcome determinative is not enough. (4) Holding – the federal court should not follow the state courts in this case. (5) Byrd is never cited again until Gasperini. (6) If a state rule is bound up with state created rights and obligations, then Erie tells us that you must apply the state rule (could even be that constitutionally you have to apply the state rule because of federalism or SOP reasons). v) Hanna v. Plumer - “arguably procedural, ergo constitutional” (1) Facts – π files a claim in federal court through diversity after she is personally injured in an automobile accident. The person that hit her has since passed away and she leaves a copy with the executor‟s wife at his residence. MASS law says that service must be left executor of the estate. (2) Issue – should service of process in diversity case be made in manner set by state law or federal law if the two are in conflict? (3) Rule – “outcome determinative +” under the twin aims of Erie (1. discouragement of forum-shopping and 2. avoidance of inequitable administration of the laws). (a) Outcome-determination analysis was never intended to serve as a talisman. (b) When a situation is covered by one of the Federal Rules the court has been instructed to apply the Federal Rule and can refuse to do so only if the Advisory Committee, this 52 Civil Procedure – Garrett 8/12/2008 Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor the constitutional restrictions. (c) Hanna creates the two tracks (RDA vs. Federal law). (4) Holding – service of process, under the FRCP, did NOT exceed Congressional mandate under the Rules Enabling Act nor transgressed constitutional bounds and the rule is a standard against which the District Court should have measured the adequacy of the service. Service of process relates to the “practice and procedure of the district court.” (5) Harlan Concurrence – outcome determinative not as important as effect on primary choices – proper line for determining what is procedural or substantive is if the choice of law would or would not substantially affect those primary decisions respecting human conduct which the Constitution leaves to state regulation. (a) Harlan thinks that Ragan v. Merchants Transfer & Warehouse came out wrong b/c it effects behavior during litigation (whether statute of limitations stops running when complaint is filed (federal law) or when service is effected (state law). (b) Harlan thinks Cohen came out correctly because having a bond requirements for plaintiffs for the expenses of defense of a shareholder‟s derivative suit effects primary conduct (6) If the courts allow state rules of procedure to prevail in diversity cases in federal court, the whole idea of the FRCP is undermined b/c the goal of FRCP was to create uniformity of procedure in federal courts. vi) §2072 - Rules Enabling Act – The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for federal courts. (b) Such rules shall not abridge, enlarge, or modify any substantive right. All laws in conflict with such rules shal be of no further force or effect after such rules have taken effect. (1) The Constitution, augmented by the Necessary and Proper clause, carries with it congressional power to make rules governing the practice and pleading in those courts. vii) Stewart Organization, Inc. v. Ricoh – (1) Facts – Local franchisee of a national corporation selling photocopies sues the national organization for breach of dealership contract. The Δ invokes the forum selection clause. Alabama (where the case is filed in federal court under diversity) does not recognize forum selection clause in these cases and the federal law does. Which governs? (2) Holding – Federal Law §1404(a) governs the District Court‟s decision whether to give effect to the parties‟ forum selection clause and transfer this case to NY. (a) Lower court (on remand) could take state‟s antipathy to forum selection clauses as a factor (but not a dispositive factor). (3) Reason – because a validly enacted Act of Congress controls the issue in dispute, there is no occasion to evaluate the impact of federal judge-made law on the twin-aims of Erie. viii) Burlington Northern Railroad v. Woods – (1) Facts – Alabama law requires that when a judgment for money has been stayed while waiting for appeal and the appeal affirms the judgment of the court below, the Appellate court must enter a judgment against all appellants for the amount of the affirmed judgment plus 10% and costs of appeal. Federal law does not have such a requirement. Which law governs? (2) Holding – court found that the Alabama statute conflicted with FRAP which gave the judges discretion on whether or not to levy any penalties (much less a specific penalty) for loss on appeal after a stay of judgment. Thus, the court held that federal law applied. ix) Just because you have a conflict between state and federal law does not answer your question, it just tells you what track you are on, then you have to determine which law prevails. x) Gasperini v. Center for Humanities, Inc. (1) Facts – law of New York allowed Appellate Courts to review the size of jury verdicts and to order new trials when the jury‟s award deviates materially from what would be reasonable compensation. Under the 7th amendment, no fact tried by a jury shall be otherwise reexamined by any Court of the United States. 53 Civil Procedure – Garrett 8/12/2008 (2) Two issues – both track one – federal common law (a) standard of review of jury cases (shocks the conscience vs. deviates materially from reasonable) (i) Court said standard of review is substantive and thus state law controls (deviates materially from reasonable) (b) intensity of review (abuse of discretion vs. de novo) (i) form and mode, outcome determinative based on the twin aims of Erie and then down to the Byrd balancing test (the 7th amendment vs. state tort law reform subtracted by standard of view being state law). (3) Scalia dissent – Should have been on track two, because the Reexamination Clause comes from the Constitution, which always prevails. e) Garrett‟s 4 track approach – source of state law irrelevant, source of state law is what is relevant i) Track One – Rules of Decision Act (§1652) (1) bound up in state created rights and obligations (a) if it is bound up in state created rights and obligations, state law trumps (b) if it is not bound up in state created rights and obligations, then it is “form and manner” (RDA) ii) Track Two – Federal Constitution (1) Test: it governs, no state law. iii) Track Three – Federal Statute (1) Test: It governs as long as it is constitutional. iv) Track Four – FRCP/FRAP (1) Test: §2072(b) – cannot “abridge, enlarge, or modify any substantive right.” (a) Burlington Northern – A rule violates §2072(b) if it has more than an incidental effect on substantive rights. (b) NO FRCP has been found in violation of §2072(b). v) Be careful to find conflict only if there is actual conflict (might not be in Burlington North, for example). vi) When do you do Byrd Balancing? We know in 7 th amendment cases and when the federal system is at stake. Byrd balancing has never been done beyond “right to jury” cases. 54 Civil Procedure – Garrett 8/12/2008 XI. Former Adjudication Claim Preclusion – claim preclusion bars the same claim from relitigation. Claim preclusion prevents you from bringing a claim that you could have and should have brought in the first case. Claim preclusion is not based on who won the first case; even if you won the first case, you‟d still be precluded from bringing another claim. Three rules for claim preclusion: same parties; “same transaction or occurrence”; final judgment on the merits. Rule 8(c) – must plead res judicata (claim preclusion) as an affirmative defense. This is also true with estoppel (issue preclusion). The Δ must raise it and prove it or else lose it. Δ has burden of proof for claim preclusion. Claim preclusion has an inverse relationship with joinder rules. The more liberal the joinder rules, the tougher the claim preclusion rules (the more difficult to get the claim relitigated, b/c you had more opportunity under the joinder rules) Which jurisdiction‟s rule dominates? The effect of the judgment is determined by the law of the court that renders judgment. You look at the law of the court that renders judgment. How do we know this? State to state – full faith and credit clause of the Constitution; state has to give effect in the same way that the original state would State to federal - §1738 – federal courts have to do the same thing; give same effect to judgment that the state gives that judgment §1738 = statutory equivalent to full faith and credit clause of the Constitution e.g. tested with same preclusive effect as they do in the original state. Federal to Federal – look at common law Federal to State – look at common law. Policy justifications for claim preclusion Finality Efficiency Avoidance of Inconsistent Judgments 1. Same parties – Claim preclusion doesn‟t have an impact on people not a party to the first lawsuit There are a limited number of rules that equate a party in privity (agent-principle, partnership, 2nd person or entity that controlled the first litigation). 2. “Common core of operative facts” – (restatement uses “all or any part of the transaction or series of connected transactions”) Frier v. City of Vandalia – common core of operative facts Facts – Frier left his four cars on the street and didn‟t move them despite police notices. Eventually the police had the car towed (despite not giving him tickets – it was a small, informal town). He filed suits for replevin. One of the suits (for two cars) was dismissed when he got his cars back. I other two cases were consolidated. After losing on the other cases, he took his claim to federal court arguing a violation of Due Process clause of 14th Amendment. Issue – was there claim preclusion that should have prevented him from bringing the case in federal court? Rule – Causes of action are identical where the evidence necessary to sustain a second verdict would sustain the first, i.e. where the causes of action are based upon a common core of operative facts. Two suits may entail the same cause of action even though they present different legal theories and the first suit operates as an absolute bar to a subsequent action not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose. Application – Frier could have urged constitutional grounds as reasons for replevin. He also could have joined a constitutional claim seeking punitive damages and declaratory relief to his demand for replevin and therefore he had a full and fair opportunity to litigate. 55 Civil Procedure – Garrett 8/12/2008 Concurrence opinion – didn‟t think that “common core of operative facts” was the right standard. He thought the standard should have been “same set of facts” “limiting the theories of recovery advanced in the first” or “altering the claims for relief from one suit to the next.” He argued this did not occur b/c the federal suit was not based on the same facts. 3. Final adjudication on the merits? Different jurisdictions have different rules for judgment No question it is a final adjudication when the jury decides What about summary judgment? Most courts perceive summary judgment to be a final decision on the merits and thus future claims would be precluded. Default judgment = decision on the merits (Rule 55 – default judgment is as good as any other judgment) 12(b)(6) – most jurisdictions consider motion to dismiss as a final judgment on the merits, though some do not consider it to a final judgment on the merits Jurisdiction and venue – are not final decisions on the merits. Gargallo v. Merrill, Lynch, Pierce, Fenner and Smith – final adjudication on the merits Facts – Gargallo opened a broker account with Merrill Lynch. After his investments went awry, Merrill Lynch sued him for $17,000. Gargallo counterclaimed alleging Merrill Lynch caused his losses through its negligence, misrepresentation and churching and had violated federal securities laws. The counterclaim was dismissed (with prejudice) from state court with prejudice. Gargallo then filed suit in federal court for violation of Federal Securities Laws, arising from the same transaction at issue in the state litigation. Federal District Court granted motion to dismiss on rule preclusion grounds. Issue – was there claim preclusion? The problem was that the counterclaim was a claim in which the state court had no subject matter jurisdiction b/c it was a claim that the federal courts had exclusive jurisdiction over. Rule - §1738 – The federal courts are required under USC §1738 to determine the preclusive effect of prior state judgments pursuant to the law of the state. Application – Ohio state courts adhere to the restatement that a judgment rendered by a court lacking subject matter jurisdiction ought not be given preclusive effect. Thus, there is no issue preclusion in this case b/c the judgment was not a final judgment on the merits b/c Ohio courts would not give claim preclusive effect to a claim when there was no subject matter jurisdiction over the claim. What if the π brought the first claim in a court that didn‟t allow full range of recovery alleged in the second case? Answer: courts differ. If π voluntarily brought that first claim in that court, may be stuck with the ramifications of choosing that court. Other courts won‟t preclude if full range of recovery was not possible in first court. What if there are two claims, one is an exclusive federal jurisdiction and the other is a state claim (federal anti-trust and state anti-trust) – She WOULD be precluded if she brought the federal claim in federal court and then later tried to bring the state claim. She would be precluded b/c (assuming the case involved a common core of operative facts), she should have brought the state claim with it and sought supplemental jurisdiction. Had the federal dismissed the state claim (using its §1367 discretion for supplemental jurisdiction), she could then bring the state claim. What if she brought the state claim in state court and then brought the federal claim in federal court (later)? Answer – circuit split. Most jurisdictions would not allow the federal claim. Minority of jurisdictions would allow her to bring the federal claim later cuz it was not allowed in state court (where she filed the first case). Rule 41(b) – Involuntary Dismissal: Effect Thereof – For failure if the π to prosecute or to comply with these rules or any order of court, the Δ may move for dismissal of an action or any claim against the Δ. Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule (other than dismissal for lack of jurisdiction, improper venue, or failure to join a party under Rule 19) operates as an adjudication upon the merits. Issue Preclusion – (Collateral Estoppel) Issue preclusion bars from relitigation issues actually litigated and determined (which is more narrow than claim preclusion). But it does NOT only apply when the second case involves both parties from the first case. Also, issue preclusion is NOT limited to the same claim, but rather just the issues inherent within the same or different claims. Policy justifications - 56 Civil Procedure – Garrett 8/12/2008 Finality - not implicated as much – sometimes the issues are dispositive, but not always Efficiency – avoids rearguing of arguments, wasting judicial time and resources Avoidance of inconsistent decisions - on issues. Test – If the following are met, then the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim. an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment. 1. The same issue Differing standards between criminal and civil law means that civil law decisions don‟t cross over 2. An Issue “Actually Litigated and Determined” Gargallo v. Merrill Lynch (above) – there was no issue preclusion b/c the dismissal of the counterclaim was for violations of discovery rules. The factual and legal issues raised were not actually litigated and decided. Thus, issue preclusion was not applicable. Illinois Central Gulf Railroad v. Parks - . Facts – Jessie and Bertha were injured when a car driven by Jessie in which Bertha was a passenger collided with an Illinois Central Train. Jessie and Bertha sued; Bertha for her injuries and Jessie for Berth‟a loss of consortium. Bertha was able to recover, but Jessie did not recover for loss of consortium. Jessie then sued for his own injuries. Δ claimed issue preclusion. The Δ argued the jury must had found either that Jessie sustained no injuries or that his own negligence was the proximate cause of his injury. The Δ argued the jury must have found contributory negligence b/c claims of his injuries for loss of consortium were not disputed Rule – Where a judgment may have been based upon either of any of two or more distinct facts, a party desiring to plead issue preclusion upon the particular fact involved in a subsequent suit must show that it went upon the fact or else the question will be open to a new contention. Burden of proof is on the Δ (railroad) to show the jury decided against Jessie on contributory negligence. They are unable to prove that here and thus their issue preclusion claim fails. The railroad was estopped from arguing it was not negligent b/c that had been litigated and determined in Bertha‟s case – so the court granted partial summary judgment for the π (Jessie). One of the problems in this case is the issue of a general verdict. A special verdict might have resolved this issue, but they are not used very often. The issue must be actually litigated and determined – if A sues B for negligence and B responds with an affirmative defense of A‟s contributory negligence. If B wins and then sues for damages, nothing is precluded b/c we don‟t know if A was contributorily negligence in the first case or if it just couldn‟t meet its burden that B was negligent. 3. A valid and final judgment – (see above – claim preclusion discussion of valid and final judgment) 4. An Issue “Essential to the Judgment” The issue litigated must be dispositive in the first case – If in the first case Jessie was negligent and suffered no damages, then in the second case, neither is precluded. While both his contributory negligence and failure to prove he suffered damages are sufficient for him to lose his original claim, neither was necessary. The first restatement would have allowed preclusion on both, however, the second restatement does NOT allow preclusion on either cuz neither was “necessary.” This means if the RR was the big winner in the first case, less issues would be precluded in the second case. What are the justifications for that? if there are lots of grounds that are sufficient to sustain a verdict, maybe the jury doesn‟t consider each decreases appeals - if the loser wins one of those issues on appeal and loses the other on appeal, there is now just one issue the π lost on and is precluded from relitigating that argument in the second case. No preclusion where the person is the winner in the first suit. Sara and Laura get into a car accident. Court finds Laura was negligent but there was no proximate cause, so Laura wins. In the 2 nd case, Laura sues Sara on the same accident for negligence. Can Sara use the first court‟s finding that Laura was negligent against Laura in the 2nd case? Answer: No. Laura couldn‟t appeal the first case b/c she won, so there is no preclusion preventing relitigation of that issue in the second case. 57 Civil Procedure – Garrett 8/12/2008 Mutuality & offensive/defensive – under claim preclusion, must have the same parties, but that is not necessarily true in issue preclusion. Can someone who wasn‟t a party to the first lawsuit be bound by the first lawsuit? Mutuality requirement jettisoned – Blonder-Tongue Laboratories v. University of Illinois Foundation – the court ruled that it is no longer tenable to afford a litigant more than one full and fair opportunity for judicial resolution of the same issue. Blonder-Tongue involved defensive issue preclusion (π was estopped from asserting a claim that the π previously litigated and lost against another Δ). Facts – University suing Blonder-Tongue on patent infringement. Court finds for Blonder-Tongue b/c the patent was not valid to begin with (thus no prima facie case). The University then sues another Δ making the same argument. Court says there is issue preclusion preventing the University from relitigating whether the patent was valid or not. Importance of the “victim” of the preclusion. The courts are more willing to allow preclusion against a party to the first case b/c they had a full and fair opportunity to litigate the matter in the first suit. If in the first case, Bertha wins by proving RR‟s negligence, causation, and proximate causation, in the second case where Jessie is suing the RR, Jessie can argue the RR should be precluded from arguing against any of those issues. The courts do NOT allow preclusion against a party not a party in the first case. If the RR was able to prove it was not negligent in the first case against Bertha, the RR could not preclude litigation of the liability question in Jessie‟s case b/c Jessie was not a party to the first case and should not be harmed by preclusion in the second case. Thus, the abandonment of mutuality has created some symmetry problems. Who can use issue preclusion to try to avoid relitigation to their advantage in the second suit? Can a non-party raise issue preclusion in the second case? Parklane Hoisery Co. v. Shore – offensive issue preclusion. Facts – Cross action was filed that Parklane had issued a materially false and misleading proxy statement in connection with a merger, violating the Securities Exchange Act. Before this came to trial, the SEC filed suit against the same alleging the proxy statement was materially false and misleading in the same respects. The SEC won the first case the π in this case sought partial summary judgment based on issue preclusion from the SEC v. Parklane case. Issue – whether a party who has had issues of fact adjudicated adversely to it in an equitable action be collaterally estopped (issue preclusion) from relitigating the same issues before a jury in a subsequent legal action brought against it by a new party. Rule – grant trial courts broad discretion to determine when issue preclusion should be applied. The general rule is that in cases where the π could easily have joined or where the application of offensive estoppel would be unfair to a Δ, a trial judgment should not allow the use of offensive collateral estoppel. Application – offensive collateral estoppel applied in this case against the Δ. Policy - While the court allows offensive issue preclusion in this case, the courts are less willing to accept non-mutual, offensive issue preclusion. Offensive issue preclusion involves a π trying to estop a Δ from relitigating an issue from a different case with a different π. (e.g. a second π arguing this same Δ was negligent, as was proven in the first case) Defensive issue preclusion involves a Δ trying to estop a π from relitigating an issue from a different case with a different Δ (e.g. that the π was not contributorily negligent) What‟s the relevance of the difference? Does not promote judicial economy in the same manner – defensive issue preclusion stops relitigation by the same π just by switching parties, thus encouraging joinder. Offensive issue preclusion creates the opposite incentive since a π can rely on a previous judgment against a Δ that helps the new π‟s claim but is not bound by a judgment that would hurt a new π b/c the π was NOT a party to the first case. Unfair to the Δ. If the Δ is sued in the first case for a small or nominal judgment, there might be less incentive to vigorously defend. 58 Civil Procedure – Garrett 8/12/2008 Unfair if the judgment relied upon as a basis for the estoppel is inconsistent with one or more previous judgments in favor of the Δ (10 cases against the Δ and 1 case for the Δ – should there be issue preclusion against the Δ despite one case in favor of the Δ?). Where the second action affords procedural opportunities unavailable in the first action that could readily cause a different result. Is it unfair in the opposite direction to in effect require a party to join some one else‟s suit in order to get issue preclusion? Might be a bit annoying, but it is not legally unfair. Arguments for why it is unfair: The rules for bringing in parties are usually more for the Δ‟s. We think that π‟s are the masters of their own claims and they shouldn‟t have to litigate with other people they do not want to litigate with We don‟t require future potential π‟s to be on the lookout for other π cases and join those cases. State Farm Fire and Casualty Co. v. Century Home Components – when cases don‟t come out the same way Facts – Δ constructed prefabricated housing in a large shed. π‟s property was stored in a warehouse located 60 feet from Δ‟s shed, which was connected by a wooden loading box. A fire (started by the Δ) spread, via the loading dock, and caused substantial damage. Eventually there were 50 different claims filed. In first 3 cases, the Δ won the first, but was remanded on appeal (π won without a jury). In the second case, the Δ won (no appeal). In the 3rd case, the π won. So, there were 4 trials, 3 final decisions (2 for π and 1 for Δ). Issue – is there issue preclusion as to the Δ‟s negligence the rest of the way for the other 47 cases? Rule – where there are extant determinations that are inconsistent on the matter in issue, it is a strong indication that the application of issue preclusion would work an injustice. There seems to be something fundamentally offensive about depriving a party of the opportunity to litigate the issue again when he has shown beyond a doubt that on another day he prevailed. We don‟t mean to say that one favorable determination can never be overcome and preclusion never applied despite the number of subsequent determinations of the contrary. Application – the prior determinations are basically inconsistent and the circumstances are such that it would be unfair to preclude Δ‟s from relitigating the issue of liability. Intellectually – if when the Δ wins there is no issue preclusion, why is it that if the π wins the first case there can be issue preclusion? Seems like the logical extension is that there shouldn‟t be issue preclusion. Bottom line on preclusion Issue preclusion does not require the same parties (claim preclusion does) Claim preclusion can only be used defensively to get claim out of court AND issue preclusion can be used defensively or offensively (but it is harder to use offensively) Either π or Δ can make issue preclusion arguments, only the Δ can make claim preclusion arguments Δ would use issue preclusion if it was the same π in the second case (but the Δ was new). If Δ using either preclusion, must be in pleading as an affirmative defense. In both cases, the Δ and π use this to a decision on summary judgment. XII. Multiparty Litigation Joinder of claims Test – “same transaction or occurrence” Rule 18(a) – Joinder of claims – A party asserting a claim to relief as an original claim, counterclaim, cross-claim, or third party claim, may join either as independent or as alternate claims, as many claims, legal, equitable, or maritime, as the party has against an opposing party. Rule 18(a) is permissive, so you “may” join various claims against one opposing party (even if it does NOT come from the same transaction or occurrence). While the joinder rules do NOT require joinder (no compulsory joinder of claims) – according to claim preclusion, failure to join (especially when the claim arises out of the common core of operative facts) may prevent bringing that claim in the future. If it does not come from the same transaction or occurrence, then you must meet all the jurisdictional requirements for the (unrelated claims). Related claims will meet the supplemental jurisdiction requirement b/c the test is similar. 59 Civil Procedure – Garrett 8/12/2008 If it is for diversity, each claim must meet the minimum cost in controversy requirements. The court may choose for fairness or convenience to sever the claims (Rule 42(b) – the court, in furtherance of convenience or to avoid prejudice or when separate trials would be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or thirdparty claim, or of any separate issue or of any number of claims, cross-claims, counterclaims, third-party claims, or issues, always preserving inviolate the right of trial by jury as declared by the 7 th amendment or by statute.) Effect of joinder on jurisdictional issues – If A sues B (both are Illinois residents) in federal court through federal question, can A also bring a state claim against B through joinder? Answer: There could be a jurisdictional problem in that case because federal courts are courts of limited jurisdiction. If the state claim meets supplemental jurisdiction (the test being common nucleus of operative facts). There are three things to look at: basis of the original jurisdiction over the case identify of the party – π or Δ – seeking supplemental jurisdiction the Rule authorizing the joinder of the party or claim over whom supplemental jurisdiction is sought. When thinking about joinder, three things to keep in mind: Is there a rule that permits joinder of this claim or person? Is there subject matter jurisdiction (diversity, subject matter, or supplemental if in federal court)? (If adding a party) Is there personal jurisdiction over this party? Rule 18(b) – Joinder of remedies: Fraudulent Conveyances – Whenever a claim is cognizable only after another claim has been prosecuted to a conclusion, the two claims may be joined in a single action; but the court shall grant relief in that action only in accordance with the relative substantive rights of the parties. IN particular, a plaintiff may state a claim for money and a claim to have set aside a conveyance fraudulent as to that plaintiff without first having obtainined a judgment establishing the claim for money. Counterclaims 13(a) – Compulsory counterclaims – A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party‟s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. I pleader NEED NOT STATE I CLAIM if (1) at the time the action was comm enced the claim was the subject of another pending action, or (2) opposing party brought suit upon the claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13. Notice 13(a) talks about opposing parties – not π‟s and Δ‟s – it applies both ways. Plant v. Blazer Financial Services – compulsory counterclaims Facts – Plant gets a loan from Blazer Financial. She sues Blazer for violation of Truth-in-Lending Act for failure to make disclosures required by the Act and by regulation. Blazer counterclaims with unpaid loan. The claim is filed in federal court b/c it is a violation of federal law Blazer probably would not have sued Plant for the money owed b/c it wasn‟t worth the money, however now that they are being sued, why not? B/c the counterclaim is not a federal claim and does not met diversity requirement (and supplemental (§1367) did not exist back then) the question is whether it gets into federal court. Rule – test for what is same transaction or occurrence - logical relation test – a loose standard which permits a broad realistic interpretation in the interest of avoiding a multiplicity of suits. Another possible test (not used by this court, but has factors that lead in the same direction) - Four part test – if the answer to any of these four questions is yes, the counterclaim is compulsory. Are the issues of fact and law raised by the claim and counterclaim largely the same? Would claim preclusion bar a subsequent suit on defendant‟s claim absent the compulsory counterclaim rule? Will substantially the same evidence support or refute plaintiff‟s claim as well as defendant‟s counterclaim? Is there any logical relation between the claim and the counterclaim? Application – court rules the claim is a compulsive counterclaim in this case. 60 Civil Procedure – Garrett 8/12/2008 Supplemental jurisdiction - With the advent of §1367, any case that meets compulsory counterclaim from rule 13 (same transaction or occurrence) necessarily meets the test for supplemental jurisdiction (which is common nucleus of operative facts). However, §1367 is discretionary and the court could choose not to hear the claim, in which case it would be dismissed and could be refiled in state court. . 13(b) – Permissive Counterclaim – A pleading may state as a counterclaim any claim against an opposing party not arising out of the transaction or occurrence that is the subject matter of the opposing party‟s claim. 13(c) – Counterclaim Exceeding Opposing Claim – a counterclaim may or may not diminish or defeat the recovery sought by the opposing party. It may claim relief exceeding in amount or different in kind from that sought in the pleading of the opposing party. 13(d) – Counterclaim against the US – these rules do not expand beyond the limits fixed in law, the limits to counterclaims or to claim credits against the US. 13(e) – Counterclaim maturing or acquired after pleading – A claim either matured or was acquired by the pleader after serving a pleading may, with the permission of the court, be presented as a counterclaim by supplemental pleading. 13(f) – Omitted counterclaim – When a pleader fails to set up a counterclaim through oversight, inadvertence, or excusable neglect, or when justice requires, the pleader may by leave of court set up the counterclaim by amendment. 13(h) – Joinder of Additional Parties – Persons other than those made parties to the original action may be made parties to a counterclaim or cross-claim in accordance with the provisions or Rules 19 and 20. When adding additional parties, must have personal jurisdiction (minimum contacts test) over them. 13(i) – separate trials – the court can, using 42(b), order separate trials. Judgment on a counterclaim or cross-claim may be rendered in accordance with 54(b) (judgment on some but not all of the claims) when the court has jurisdiction to do so, even if the claims of the opposing party have been dismissed or otherwise disposed of. Permissive Joinder of Parties Rule 20(a) – Permissive Joinder – All persons may join in one action as π‟s if they assert any right to relief jointly, severally, or in the alternative 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 these persons will arise in the action. All persons may be joined in one action as Δ 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 Δ‟s will arise in the action. Damages can be awarded to some or all the π‟s and against some or all the Δ‟s – not all or nothing. Rule 20(b) – Separate Trials – The court may make such orders as will prevent embarrassment, delay, or put to expense by the inclusion of a party against whom the party asserts no claim and who assets no claim against the party, and may order separate trials or make other orders to prevent delay or prejudice. Mosley v. General Motors Corp. – permissive joinder (by π‟s) Facts – 10 employees suing GM and the Union on charges of discrimination (The Union and GM can be used in one case under Rule 20 – permissive joinder relating to including multiple π‟s or Δ‟s). Δ‟s are resisting b/c they know that if 10 π‟s all argue discriminatory practice, the Δ is going to lose (or settle early), which is why this is an interlocutory appeal.. Issue – Is joinder allowed in this case? Rule – Two specific requisites – a right to relief must be asserted by, or against, each π or Δ relating to or arising out of the same transaction or occurrence or series of transactions or occurrences AND some question of law or fact common to all the parties must arise in this action. The court concluded the jury abused its discretion by severing the cases and the appellate court reversed. No problem with jurisdiction when we are talking about π‟s volunteering to join a claim b/c of their consent. Impleader - 61 Civil Procedure – Garrett 8/12/2008 Rule 14(a) – When defendant may bring in third party – At any time after commencement of the action, a defending party, as a third party plaintiff, may cause a summons and complaint to be served upon a person not a party to the action who is or may be liable to the third-party plaintiff for all or part of the plaintiff‟s claim against the third-party. Don‟t need leave to amend, if impleading is done within 10 days of serving the original answer. Otherwise, the Δ must obtain leave to amend. The person served (third party defendant) shall make any defense to the third party plaintiff (original Δ) as per Rule 12 and any counterclaims against the third-party plaintiff and cross-claims against other third-party Δs as provided in Rule 13. Third party defendant can also argue against the π‟s original claim (b/c transitively the third party defendant is liable for that claim). Third party defendant can also assert any claim against the plaintiff arising out of the transaction or occurrence that is the subject of the original claim by the plaintiff against the defendant (third party plaintiff) The plaintiff may assert any claim against the third party defendant arising out of the transaction or occurrence (supplemental jurisdiction) and the third party defendant thereupon shall assert any defense as provided in Rule 12 and offer any counterclaims and cross-claims as provided in Rule 13. Any part may move to strike the third-party claim or move for its severance or separate trial. Impleadee impleading someone else - A third party defendant may proceed under this rule against any person not a party to the action who is or may be liable to the third-party defendant for all or part of the claim made in the action against the third-party defendant. Rule 14(b) – When plaintiff may bring in third party – When a counterclaim is asserted against a plaintiff, the plaintiff may cause a third party to be brought in under circumstances which under this rule would entitle a defendant to do so. Watergate Landmark Condo Unit Owners‟ Assoc v. Wiss, Janey, Elstner Assoc. – derivative liability or secondary liability essential Facts – A condo association hired a real estate management firm to overse maintenance of the units. When the owners reported problems with their balconies, the firm hired an engineering firm (Wiss – Δ) to draw specifications to repair the balconies. On the basis of those specs, Brisk Waterproofing was hired to do the repairs. When the repairs failed to satisfy the owners, the π‟s invoked diversity and sued the engineering company (Wiss) and the real estate management firm but not the Brisk. Real estate managers filed an answer cross-claiming Wiss and filing a third party complaint (Impleader) against Brisk, alleging Brisk negligently performed the repairs and is solely liable to the Association. Issue – is Brisk derivatively or secondarily liable to the real estate management firm (Legum). Rule – a third-party claim can be maintained only if the liability it asserts is in some way derivative of the main claim. Absent such derivative liability, a third party claim must fail. A third party defendant may not be impleaded merely because he may be liable to the plaintiff. Typically, a third-party claim sues an indemnitee or a joint tortfeasor or a secondarily liable party impleading the primarily liable party. It is no longer possible to implead a third party claimed to be solely liable to the π… Under Rule 14(a), a third-party complaint is appropriate only in cases where the proposed third-party defendant would be secondarily liable to the original defendant in the event that the latter is held to be liable to the plaintiff. A third-party claim is not appropriate where the defendant (third-party plaintiff) is saying “It was him, not me.” A claim is viable only where a proposed third party plaintiff says, in effect, “If I am liable to the π, then my liability is only technical or secondary or partial, and the third party defendant is derivatively liable and must reimburse me for all or part of anything I must pay plaintiff. What about supplemental jurisdiction? The test for supplemental jurisdiction is “common nucleus of operative facts” and Impleader is only appropriate when there is “derivative liability.” So, whether or not there is a federal question, so long sa the first case was correctly in the federal court, the impleading can meet the jurisdictional requirement. What if the first case is there on diversity jurisdiction, and impleading would undermine complete diversity? Answer – in terms of Δ1 impleading Δ2 it is not a problem b/c impleading only has a minimal diversity requirement (see above). However, if the π now tries to bring a claim against Δ2 that would not 62 Civil Procedure – Garrett 8/12/2008 be allowed as a separate action in federal court b/c no diversity, the π cannot do that (Kroger v. Owen case). What if the party being impleaded is a foreign company? When they are impleaded, they can bring a 12(b)(2) lack of personal jurisdiction. If you couldn‟t prove minimum contacts, that claim might be dismissed. 4(k)(2) incorporates personal jurisdiction rules of the states, so you may be able to get foreigners into federal court (but it only applies to federal question, not diversity, cases). Why do we have impleading? Efficiency – not a great argument, impleading is mostly indemnification which is a contractual issue, not relevant to the dispute between the π and the first party, thus not a lot of efficiency gains. Fairness – this is the primary reason – the insurance company couldn‟t be bound by the ruling in the first case b/c it wasn‟t a party, if it wasn‟t impleaded. So when management sues the insurance company, the insurance company could argue that the management should never have lost that first case because it wasn‟t negligent and the management company could suffer from two inconsistent verdicts. Cross Claims 13(g) – Cross-Claim against co-party – A pleading may state as a cross-claim any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein or relating to any property that is the subject matter of the original action. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross claimant. 13(i) – separate trials – the court can, using 42(b), order separate trials. Judgment on a counterclaim or cross-claim may be rendered in accordance with 54(b) (judgment on some but not all of the claims) when the court has jurisdiction to do so, even if the claims of the opposing party have been dismissed or otherwise disposed of. Compulsory Joinder – parties already in the lawsuit point to parties not in the lawsuit and try to pull them in b/c they need to be in the case. Compulsory Joinder is mirror image of intervention (see below). *** District courts shall NOT have jurisdiction over claims by plaintiff‟s made parties under Rule 19 or over claims by persons proposed to be joined under Rule 19, if exercising supplemental jurisdiction over such claims would be inconsistent with jurisdiction requirements of §1332 (diversity). Rule 19(a) – Joinder of Persons Needed for Just Adjudication – A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction shall be joined as a party if: In this party‟s absence, complete relief cannot be accorded among those already parties OR The person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person’s absence may as a practical matter impair or impede the person’s ability to protect their interest OR leave any of the persons already parties subject to substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. If the person as not been so joined, the court shall order that person to be made a party. If the person should join as a plaintiff but refuses to do so, the person may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and joinder of that party would render the venue of the action improper, that party shall be dismissed for the action. Typical case – Laura sues a trustee b/c Laura gets the trust and doesn‟t think she is getting enough out of it. The remainder people (people who have a future interest in the trust b/c they get what is left after Laura dies) are interested in the case because how much Laura gets will inversely effect how much they get when she dies. They are parties that ought to be included because of their interest. Usually some party (Δ) will move for motion to dismiss under 12(b)(7) motion for failure to join an indispensable party. (this can also be done sua sponte by the court) If the court decides those parties are necessary, the court can try to include those parties (a motion to include other parties rather than dismiss); if the party cannot be included, the court can dismiss. The judge will look to see who is trying to be protected. If the Δ acted badly in delaying but failure to join would hurt 3rd party, then delay is not as important than if the Δ delayed and the joining of necessary parties is helpful to the Δ. Even though 12(b)(7) can be raised at any time, if the Δ keeps in their back pocket and springs it only when it thinks it is going to lose, the judge can take that into account. 63 Civil Procedure – Garrett 8/12/2008 What if you cannot join a necessary party? For example, what if joinder rules allow but no personal or subject matter jurisdiction? 19(b) – determination by court whenever joinder not feasible – If person cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it or should be dismissed, absent person being thus regarded as indispensable. The factors to be considered extent a judgment rendered in the person‟s absence might be prejudicial to the person or those already parties the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided whether a judgment rendered in the person‟s absence will be adequate whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder 19(c) - Pleading reasons for nonjoinder – a pleading asserting a claim for relief shall state the names, if known to pleader, of any persons described in this section who are not joined, and the reasons why they are not joined. 19(d) – Doesn‟t apply to class actions. Helzberg Diamond Shops v. Valley West Des Moines Shopping Center Facts – Contract where mall agrees not to let any other retail specialty jewelry store lease in the mall. The mall leased a space to Lord‟s to open and operate what constituted a full line jewelry store. Helzberg sues in Missouri, where there is sufficient contact to bring in Valley West. Valley West argues that Lord‟s is an indispensable party and the case should not be decided without them. (no personal jurisdiction of Lord‟s in Missouri). Rule – a person does not become indispensable to an action to determine rights under a contract simply because that person‟s rights or obligations under an entirely separate contract will be affected by the result of the action. Application – the court invited Lord‟s to join and used its invitation to Lord‟s as a reason to mitigate the factors under 19(b). Court also found that Lord‟s rights and obligations would not be affected by the ruling. The court ruled that there was no risk of inconsistent judgments b/c Lord‟s had not filed suit and there was no reason to assume a different court would interpret the contract in any other way. Key notes 19(a) – necessary parties 19(b) – if the party cannot be joined, is that party an indispensable party? If no, then no problem. If yes, court can dismiss the case – 19(b) gives the court a lot of power around dismissing the case – be creative and figure out how to resolve the problem. Intervention – party says that it must be a part of a suit and thus must be joined. is mirror image of compulsory joinder (see above). 24(a) – Intervention of Right (stronger of the two)– Upon timely application anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers unconditional right to intervene OR (2) when the applicant claims an interest relating to the property of transaction which is the subject of the action and the application is so situated that the disposition of the action may as a practical matter impair or impede the applicant‟s ability to protect that interest, unless the applicant‟s interest is adequately represented by existing parties. 4 part test to 24(a) timely – intervener may not lie in wait until the litigation is on the brink of resolution interest – intervener must have an interest in the property or transaction subject of the dispute at risk – the interest must be in some strong way at risk; so great that a negative ruling could as a practical matter impair or impede the applicant‟s ability to protect that interest interest not already represented in suit – even if applicant meets all three above requirements, intervention will be denied if in the lawsuit, the interest is already adequately represented. 24(b) – Permissive Intervention (weaker counterpart) (up to judges discretion, reviewed on abuse of discretion) – Upon timely application anyone may be permitted to intervene in an action: (1) when a statute of the United States confers a conditional right to intervene; or (2) when an applicant‟s claim or defense and main action have a question of law or fact in common. [When a party to an action relies for ground of claim or defense upon any statute or executive order administered by a federal or state 64 Civil Procedure – Garrett 8/12/2008 governmental officer or agency or upon any regulation, order, requirement or agreement issued or made pursuant to the statute or executive order, the officer or agency upon timely application may be permitted to intervene in the action. In exercising its discretion, the court shall consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.] 24(c) - Procedure – A person desiring to intervene shall serve a motion to intervene upon the parties as provided in Rule 5. The motion shall state the grounds therefore and shall be accompanied by a pleading setting forth the claim or defense for which intervention is sought. The same procedure shall be followed when a statute of the United States gives a right to intervene. Natural Resources Defense Council v. US Nuclear Regulatory Commission – Facts – NRDC filed suit against Nuclear Regulatory Commission and New Mexico Env‟t Improvement Agency seeking to prevent them from issuing licenses for the operation of uranium mills in NM without first preparing an EIS. United Mining has already intervened in the case. Kerr-McGee and American Mining Council (representative agency that represents all of these groups) are trying to intervene in the case. Kerr-McGee and AMC don‟t have a great relationship and Kerr-McGee is concerned that United Mining will not adequately represent its interests b/c they are competitors and United Mining already has a license for part of the mining and thus might not adequately protect the interests of a company that has no licenses in NM as of yet. Rule – FRCP 24(2) – 24(1) doesn‟t apply b/c there is no relevant statute creating a right. To require the movant to have a direct interest in the outcome of the lawsuit is too narrow. Rather the interest must be a significantly protectable interest. Burden is on the party seeking that representation by current parties is inadequate. If an applicant‟s interest is similar to, but not identical with, that of one of the parties, a discriminating judgment is required on the circumstances of the particular case, but he ordinarily should be allowed to intervene unless it is clear that the party will provide adequate representation for the absentee.. *** If you can intervene as a right (24(a)), it is virtually identical to being a necessary party. Interpleader – Rule 22 – Interpleader – Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. It is not ground for objection to the joinder that the claims of the several claimants or the titles on which their claims do not have a common origin or are not identical but are adverse to and independent of one another, or that the plaintiff avers that the plaintiff is not liable in whole or in part to any or all of the claimants. A defendant exposed to similar liability may obtain such Interpleader by way of cross-claim or counter-claim. The provisions of this rule supplement and do not in any way limit the joinder of parties permitted by Permissive Joinder under Rule 20. §1335 – Interpleader Statute – The district court shall have original jurisdiction of any civil action of interpleader or in the nature of interpleader filed by any person, firm, or corporation, association, or society having in his or its custody or possession money or property of the value of $500 or more or having issued a note, bond, certificate, policy of insurance or other instrument of value or amount of $500 or more, or provided for the delivery or payment or the loan of money or property of such amount or value, or being under any obligation written or unwritten to the amount of $500 or more, IF Two or more adverse claimants, of diverse citizenship (defined in §1332), are claiming or may claim to be entitled to such money or property, or to any one or more of the benefits arising by virtue of any note, bond, certificate, policy or other instrument, or arising by virtue of any such obligation; and IF The plaintiff has deposited such money or property or has paid the amount of or the loan of other value of such instrument or the amount due under such obligation into the registry of the court, there to abide the judgment of the court, or has given bond payable to the clerk of the court in such amount and with such surety as the court or judge may deem proper, conditioned upon the compliance by the plaintiff with the future order or judgment of the court with respect to the subject matter of the controversy. Such an action may be entertained although the titles or claims of the conflicting claimants do not have a common origin or are not identical, but are adverse to an independent of one another. Class Action – Rule 23 – Class Actions - 65 Civil Procedure – Garrett 8/12/2008 (a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only IF numerosity - the class is so numerous that joinder of all members is impracticable; commonality - there are question of law or fact common to the class; typicality - the claims or defenses of the representative parties are typical of the claims or defenses of the class; AND representativeness - the representative parties will fairly and adequately protect the interest of the class includes attorney‟s competence and ability to maintain suit. (b) Choose from one of the 23(b)‟s – 3 different kinds of class actions. It is very important to figure out which (b) you are b/c (1) and (2) have a lot more flexibility than 23(b)(3) 23(b)(1) – super Rule 19 – limited fund class actions – despite assets of the company, insurance, everything we can get our hands on, there is NO WAY there is sufficient money to cover all of the damages alleged. Avoid race to the court house – the idea is to get everyone into a class action so we can make sure that no one walks away empty handed. No opt out provision – because no one would want to opt out and if opt out were allowed it would undermine the limited fund idea by causing a race to the court house. What about personal jurisdiction? The court has to bind everyone in the suit under personal jurisdiction and there is no opt out provision t charade as consent for personal jurisdiction. To the extent that courts are willing to accept these sorts of class actions, and they are, the court will recognize personal jurisdiction by necessity. There has got to be one court that has jurisdiction b/c, if not, no court will have jurisdiction and nothing will work out. You can imagine where a class member not satisfied with the decision has collaterally attacked b/c of lack of jurisdiction; the Supreme Court is yet to rule on such a case. 23(b)(2) – injunctive relief – class action seeking injunctive relief (e.g. school desegregation, housing, etc) Notice and ability to opt out are less important because this really just institutionalizes something that is part of policy Limits collateral attacks and protects Δ‟s from having to relitigate certain issues Court is kind of acting as an administrative agency in this situation 23(b)(3) – empowerment or efficiency class actions (disfavored; considered to be mass torts, harder to get certification) the question of law or fact common to the members of the class predominate over any questions affecting only individual members and that a class is superior to other available methods for the fair and efficient adjudication of the controversy, including members individually brining their claim extent and nature of any litigation concerning the controversy already commenced by or against members of the class if there are already lots of suits, don‟t have to worry about creating a class action the desirability or undesirability of concentrating the litigation of the claims in the particular forum; second hand smoke on airplanes for example – lots of π‟s might be subject to individual and various contributory negligence claims the difficulties likely to be encountered in the management of a class action.. Benefits of this approach efficiency – so many claims where “common issues predominate(s)” empowerment – many persons are injured but the injuries are so small no one would bring a clase and the company would NOT internalize the costs unless a class action was brought this is really where these types of class actions come from Problems with this approach 23(c)(2) – only requires notice for 23(b)(3) – “direct best notice practicable under the circumstances including individual notice to all members who can be identified by reasonable effort.” that seems like a pretty onerous standard new rules make it more onerous – 66 Civil Procedure – Garrett 8/12/2008 Concisely and clearly state in plain, easily understood language – the nature of the action; the definition of the class certified; the class claims, issues, or defenses, that a class member may enter an appearance through counsel if so desired, that the court will exclude from the class any member who requests exclusion, stating when and how members may elect to be excluded, AND the binding effect of class judgment on class members under 23(c)(3). 23(c)(2) requires an opt out provision and judgment (favorable or not) will include all members who do not request exclusion; if didn‟t claim exclusion, may entertain appearance through counsel 23(c)(2) requirement does seem to create personal jurisdiction through consent. Things to look for with Rule 23(b)(3) individual defenses choices of law (in each jurisdiction there was injury). (f) Appeals. A court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification under this rule if application is made to it within ten days after entry of the order. An appeal does not stay proceedings in the district court, unless the district judge or court of appeals so orders. pretty recent – Δ‟s used to not be able to appeal certification b/c it was not a final judgment could use §1292 (interlocutory appeal), but that is based on discretion of appellate court to take the case. Could ask for a writ of mandamus (Possner would grant them), but most judges would not grant (extremely rare) problem – certification leads to lots of settlements so the Δ‟s never really had a chance for appeal 23(f) doesn‟t get rid of discretion of appellate level but does eliminate discretionary power of district court to even certify for appeal (interlocutory appeal) When appropriate court can divide a class up with respect to particular issues OR a class can be divided into a subclasses and each subclass treated as a class. Rule 23 = method to meet constitutional requirement (though it may go further than the Constitution). Key thing in a class action is certification certification defines who the class is – have to know who is and who is not part of the class action. for claim preclusion reasons certification => settlement – once court has certified a class, the case is often over b/c the Δ will often settle. Hansbury v. Lee – 2 important things class actions are constitutional (even if all the people are not represented in the court room) you can collaterally attack class actions someone represented in the class action can argue “I should not have been part of that class.” you can argue in subsequent lawsuits that there was a problem with the class action - lack of notice, lack of personal jurisdiction Eisen – odd lot trades; this is an empowerment claim where each claim is worth about $70. There are 2,000,000 possible π‟s who could be identified with reasonable due diligence, costing about $225,000 worth of postage. District court says you don‟t have to notify all of them so they can opt out so just do a couple of things (notice to NYSE members, notice to 2000 members of class who did the most trading, notice to 5000 random people, notice in WSJ and other papers). Supreme Court held this was unconstitutional. In actuality it is probably not unconstitutional but just a violation of statute. π‟s seemed to have a good case and the district court required the Δ to pay 90% of the costs of notice. The Supreme Court said that was unconstitutional b/c the District Court could not determine the merits of the claim that early in the process. Communities for Equity v. Michigan H.S. Ath. Assoc – 23(b)(2) case Facts – Class action suing Michigan High School Athletic Assoc. for exclusion of π‟s from opportunities to participate in interscholastic athletic programs and receipt of unequal treatment and benefits programs, constituting gender discrimination. Heaven v. Trust Company Bank – standard of review Facts - π signs a lease form provided by SunTrust for a Ford Taurus. She later brought this suit claiming SunTrust failed to comply with strict disclosure requirements of the Consumer Leasing Act. Rule – District Court decisions of whether to certify a class may only be overturned if it constitutes an abuse of discretion. 67 Civil Procedure – Garrett 8/12/2008 Jurisdictional issues with class action suits Subject matter jurisdiction Federal question jurisdiction – no amount and controversy requirement in federal question jurisdictions; lots of class actions in federal court are in federal court on federal question doctrine (e.g. Eisen). Diversity jurisdiction – Requires complete diversity (π is based on citizenship of class representative) Amount in controversy requirement – before §1367 each class member had to meet the amount in controversy requirement (decision in Zahn). That meant that state empowerment class actions couldn‟t get into federal court. NOW, §1367 appears to have overruled Zahn and now only the class representative has to meet amount in controversy requirement. Problem: class representative is suppose to be typical of the class. Abbot Labs – Texas court allowed π $150 claim to meet amount in controversy by including attorney‟s fees that would be included under TX law. The 5th circuit could affirmed. Personal jurisdiction – Phillips Petroleum v. Shutts – jurisdiction Facts – Phillips Petroleum extracted gas from people‟s land and paid royalties based on the price the gas was finally sold for. Could not raise price without federal approval but would sell at higher price while awaiting federal approval. π brought suit on part of 33,000 others b/c Phillips did not pay higher royalties on the increased price gas sold while awaiting federal approval (Phillips argument was that it was too hard to get rebates if approval didn‟t go through). Less than 1000 of the 28,100 that did NOT opt out lived in Kansas, less than one quarter of one percent of the gas leases involved in lawsuit were on Kansas land. Δ argued should be “opt in” rather than “opt out” provision b/c something more than mere silence should be necessary to prove consent for personal jurisdiction Δ also argued should not apply Kansas law to every claim in dispute b/c many were not in Kansas. Rule – A forum state may exercise jurisdiction over the claim of an absent class-action π, even though that π may not possess the minimum contacts with the forum which would support personal jurisdiction over a defendant. If the forum state wishes to bind an absent π concerning a claim for money damages or similar relief at law, it must provide minimal procedural due process protection. Mullane standard - The π must receive notice plus an opportunity to be heard and participate in litigation whether in person or through counsel. The notice must be the best practicable reasonably calculated under all circumstances to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. Due process requires as a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an „opt out‟ or request for exclusion form to the court. Choice of law – the court allows Kansas law to be used and doesn‟t really explain why not a law from a different state. New Rules – 23(e)(1)(b) requires reasonable notice to all class members who would be bound by a proposed settlement, voluntary dismissal, or compromise 23(e)(1)(c) – court can approve a settlement, voluntary dismissal, or compromise that would bind class members “only after a hearing and on finding that the settlement, voluntary dismissal, or compromise is fair, reasonable, and adequate.” 68